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An exodus

“What’s wrong with UK financial markets? The global economy is recovering, but British stocks and shares are not keeping pace. The pound has failed to recover from the slide it experienced in the wake of the EU referendum. This is frequently blamed on investors being spooked by Brexit, even more so by the possibility of a no deal. But has anyone actually asked the markets what is spooking them? Look closer and it becomes clear that while Brexit is a problem for some investors, most are much more worried about a far bigger risk, even if they rarely speak about it in public. It is the possibility of a Corbyn government.”

Ross Clark, in the Spectator (£).

As there is a paywall and it is annoying for those who cannot get through it, here are more paragraphs:

Since last year’s election, when the Labour leader came within a stone’s throw of No. 10, it has been impossible to write off the idea of a Corbyn victory. And we’re about to enter a time when anything can happen. Theresa May looks doomed to lose the Commons vote on her Brexit deal on 11 December; the DUP has said it may well withdraw its support from the Tories, leaving the Prime Minister without a majority. Whatever the Commons result, turmoil is more or less guaranteed — and one possible outcome is a general election as early as January.

A no-deal Brexit would unquestionably cause short-term ructions in the UK economy, as well as affect the pound and the FTSE — for what economic forecasts are worth (which is not very much, to judge by recent history). Oxford Economics recently claimed that GDP would be 2 per cent smaller than expected, pushing the UK into a mild recession. But even if that were to happen (and it has to be remembered just how far Treasury forecasts were out when they claimed the economy would shrink by 3.6 and 6 per cent in the event of a Brexit vote), growth would then rekindle, trade would continue, companies would re-route imports and exports, and an inflationary spike would die down. But if Corbyn were to be elected on a ‘radical socialist’ platform, investors can only guess as to what might happen.

It is the threat of a wealth tax that is scaring wealthy individuals. It is a theme to which shadow chancellor John McDonnell has returned several times. In 2012 he gave his endorsement to a proposal by University of Glasgow academic Greg Philo (sometimes mistakenly called an ‘economist’ but actually a professor in sociology) to subject wealthy individuals to a one-off wealth tax of 20 per cent in the hope of using it to pay off the government’s debts.

`The wealthiest 10 per cent own £4,000 billion,’ said McDonnell. ‘If you took 20 per cent of that you would then have £800 billion and we could tackle our deficit — we could tackle our debt — four-fifths of our debt would then be wiped out. So we’re saying just collect the money and make those who created the crisis pay for the crisis and that way you overcome it.’

The idea that wealthy individuals are as a group responsible for the 2008/09 crisis is absurd — what role, he might like to explain, did the Rolling Stones play in the crash? — as is the suggestion that such a tax would pay off the government’s debts: how McDonnell would manage to capture his £800 billion when, of course, highly mobile wealthy individuals have the option of fleeing the country. There is little appetite around the world for international socialist revolution, the only thing which could stop capital flight in its tracks.

On the contrary, many governments are going in the opposite direction and making every effort to attract wealthy residents. Donald Trump’s tax cuts have set out a big welcome mat for the world’s rich (if not so much for those of liberal opinion). Israel has introduced a ten-year tax holiday on the global wealth of new residents — they will pay tax only on money they bring into the country. Emmanuel Macron has reversed François Hollande’s war on the rich and offered special inducements to attract wealthy residents. Monaco recently held a presentation in London in an effort to attract wealthy individuals. Argentina and Greece, countries from which the wealthy were fleeing in recent times, are now much more settled.

The author is correct; in my own discussions with people in the financial markets, there is a real fear of what these reheated Marxists will do. Anyone who owns land, for example, unless they are politically connected to Labour, will be targeted. And as usual, it will not just be “the rich” who get it in the neck (not that isn’t bad in its own right), but the broad mass of the middle class who will not have the ease of being able to go abroad on a second passport.

The tragedy of the current situation is that Prime Minister Theresa May uses the genuine fear of a Corbyn-led government to scare us into accepting her plans to turn the UK into a European Customs Union vassal state, indefinitely, hoping no doubt that we all become so bored by the Brexit process that we accept that as the least-worst, if still crap, outcome. This situation, however, cannot last and I predict that there will be a significant political party realignment in the next few years, a view that several folk I know share. This current choice menu of Marxist anti-semite Left vs managerialist and hopeless Tory Party is simply shameful for a country of the UK’s standing in the world.

22 comments to An exodus

  • Cesare

    It is a global Truth, deficits do not exist because of a lack of money they exist because governments spend too much.

  • Ian

    This matches what I’ve been told, that there is a two-month waiting list at KPMG for current customers to obtain Corbyn-related financial advice.

  • John B

    ‘The pound has failed to recover…’

    Is there a default value at which the Pound should be? What is it?

  • Flubber

    I think Corbyn is nailed on, unless we leave on a no-deal and May is replaced with a genuine leaver who actually puts the country first and embraces the opportunities of Brexit.

    There are simply too many Former Tory voters who wont touch the current “managers of decline” with a bargepole.

  • Mr Ecks

    “I think Corbyn is nailed on, unless we leave on a no-deal and May is replaced with a genuine leaver who actually puts the country first and embraces the opportunities of Brexit”

    THIS.

    We have two weeks to ensure that the Tory sellout MPs finally get the message. I don’t want Corbyn but I won’t accept the Tory EU sellout.

    If they betray then they must pay.

  • Flubber

    I for one would take a Corbyn government over May’s deal any day of the week and twice on Tuesdays…

    My reasoning:

    A) We need a dose of socialism every thirty years or so, so the dickheads have their idealism crushed before them.
    B) We can recover from Corbyn. We are done if May’s deal goes through.

  • Itellyounothing

    Agreed.

    We can vote about the EU every forty odd years.

    General elections are every five.

    Cornyn and his ideas are awful…

    But at least he can be dismissed after a reasonable interval.

    A bit real hard left governance will teach a lesson better than all the Wikipedia links to the Holodomor ever will.

  • Paul Marks

    Even as a cynical (and bitter) old man, I was still shocked that we could not even get 48 Conservative Members of Parliament who would oppose Mrs May. Theresa May is a dreadfull person – it is not “just” the European Union, it is everything. This is a person who has no belief in liberty, and is deeply controlling and dishonest. The logical conclusion of the collectivist philosophy of Mrs May is Mr Corbyn – he is just Mrs May carried to the logical end point (which is what makes a “debate” between May and Corbyn utterly pointless). And yet there are not 48 Conservative Members of Parliament with the courage to oppose her.

  • It’s the timing Paul.

    Until BRExit is done in one fashion or another 10 Downing Street is a poisoned chalice. Part of the reason why May got in was because she was desperate enough / foolish enough to still want it despite the fact that it would clearly be completely screwed for anyone who wasn’t a hard BRExiter.

    The only reason that she’s still there is not because of an inability to find 48 Tory MP’s that find her incompetent and dangerous, but rather that all the options they have are either weak (i.e. chances of getting a BRExiter in) or bad (Corbyn). Their own vacillation and contempt for the electorate only exacerbates this.

    I still believe we will end up with a hard BRExit, but that will be more by default than anything else (as I always expected it would be), since there are too many choices and most of them are considered bad by enough groups of MP’s to mean there is no plurality, never mind a majority.

    So this chaos will continue until March 2019 at least (and more likely we won’t get a real Tory leadership challenge until late Spring / early Summer 2019).

    Most MP’s fancy themselves as PM, but those actually in which a remote chance of it also understand that the taint of their parliamentary cowardice over BRExit will linger for the rest of their political lives, so they’d rather let May have that unenviable position.

  • Roué le Jour

    What is Corbyn’s current thinking?

    Tories enemy, vote against.
    But EU are fellow socialists, vote for.
    But EU rules don’t permit full on Marxism, vote against.
    But it’s really Whitehall’s deal and I have to work with them, vote for.

    Erm, free vote?

  • Runcie Balspune

    We have two weeks to ensure that the Tory sellout MPs finally get the message. I don’t want Corbyn but I won’t accept the Tory EU sellout.

    If you are concerned about a “bad deal” just consider your choice is “May and bad deal” or “Corbyn and bad deal”, there is no “Corbyn and no deal” option, even worse, there could actually be a “Corbyn and rejoin the EU” option.

    On that basis, Corbyn is always the nastiest ending, regardless of the deal.

    We can recover from Corbyn. We are done if May’s deal goes through.
    But at least he can be dismissed after a reasonable interval.

    I am not sure of the age of these commentators but I will tell you that a hard-left government will have an immediate priority once in power to make it extremely difficult to shift later on, it is the nature of the beast.

    In reference to the OP, it is a known that Labour are already drawing up plans to avoid capital flight, and it is probably already happening.

  • Mr Ecks

    “I am not sure of the age of these commentators but I will tell you that a hard-left government will have an immediate priority once in power to make it extremely difficult to shift later on, it is the nature of the beast.”

    Which is exactly what the fucking EU are about via their agent Treason May.

    Yes Corbyn does pose the danger of a 1917 type scenario. And antics like importing 5 million more beards to try to ensure he can’t be voted out. But there is little difference other than timing between Jizz and his so-called Tory rivals.

    If the Tories betray they will be destroyed. But nor is it clear that Jizz–already an EU traitor who is trying to sell out Brexit– will prosper. Millions of potential Labour supporters voted for Jizz in 2017 because he lied–like May–that he supported Brexit. He is as big a betrayer as her.

    Do not underestimate the potential of UKIP with or without TR. Robinson may put off a few middle-class Yaxleysnobs whose brains have been got at by SJW cockrot (even if they are otherwise sound). But millions of folk know that the EU is only a part of the battle against Global “Elite” tyranny. Given that both alternatives stink I can see UKIP breaking through in any election. Even tho’ I don’t see the Tories–if they betray Brexit– daring to go for a GE one second before it is forced on them in 2022. The mental case that is Treason May the FFC would do it but she is delusional. The Tory Grandees know better.

  • The contrast between where the Tories, and Corbyn, and the UK, would be if the Tories had chosen a Leave leader (Boris, presumably) in 2016 – one who could have honestly and immediately held an election – versus where they are under May, is extreme. That so many Tory MPs do not see this is perhaps no more surprising than that no-one reports hearing Gove say,”‘Sorry, maybe I should not have done that, or not done it in quite that way”, though it would surprise even me if he has never once reflected that he’d be chancellor if he’d met a fairly minimal standard of political honesty. When seeing your hand in front of your face also requires seeing your past mistakes, it can be awfully hard to spot.

    That said, remember that every MP is very aware of the rules. Corbyn is unshiftable thanks to the leadership rules with which Milliband unwittingly shafted the Labour party. May is safe from a leadership challenge for a year if she survives this one (under Tory rules originally meant to rebuke those who rebelled against Margaret Thatcher). If 48 cannot be found after her deal is defeated in the house, that would mean the party has a raw death wish. If enough to pass the threshold feel they must wait till that happens, to be sure of being rid of her, then I guess it’s politics – ugly, but not in that aspect clinically insane.

  • Stonyground

    I’m not quite sure that Corbyn is quite the threat that people perceive him to be. I think that in the last election many people voted Labour to take a pop at May in the belief that they didn’t have a ghost of a chance of actually winning. The fact that Labour came such a close second means that next time around people will be fully aware of what they could well end up with, actual literal communism. Only a handful of loons actually want that.

    On the other hand I won’t be able to bring myself to vote Conservative unless there is a very big shake up.

  • Patrick Crozier (Twickenham)

    While the Johnathan is making a rather different analogy I find the parallels between Brexit and Exodus – that’s the biblical version not the Bob Marley version – extraordinary. We have an enslaved people (the British) who leave (Brexit) who spend decades in the desert (the transition period), making burnt offerings (concessions) and falling out with each other before reaching the promised land (unilateral free trade).

    Plagues of frogs, locusts etc? Clearly the accession of Romania and Bulgaria etc.

    Ten Commandments? Hmm… er… not quite sure about this one. Maybe we’ll find out one day.

  • Mr Ed

    Patrick

    Ten Commandments? Hmm… er… not quite sure about this one. Maybe we’ll find out one day.

    The EU could not get by with 10 Commandments, but here’s a link to a starter on the acquis of EU law.

    Magna Carta isn’t that wordy, and there is the Bill of Rights isn’t either. Those two would work for me.

  • If 48 cannot be found after her deal is defeated in the house, that would mean the party has a raw death wish. If enough to pass the threshold feel they must wait till that happens, to be sure of being rid of her, then I guess it’s politics – ugly, but not in that aspect clinically insane.

    I agree, but with the ousting it’s not just about the numbers, it’s the timing as well. It needs to be done after BRExit has been triggered (so after March 30th) to avoid accusations of blame, but soon enough afterwards to control the outcome, damage limitation and seen to be the “Hero who fixed the UK post-BRExit after Theresa May f***ed it!”

    On the other hand I won’t be able to bring myself to vote Conservative unless there is a very big shake up.

    I’m struggling with the problem of “Which party is the least worst” if a General Election happened anytime soon. Can’t even vote for Labour as a protest, because if Corbyn got in I would never forgive myself. It’s a problem.

  • NickM

    On the subject of Jeremiah Corbyn…

    …well, he gets all the attention but he’s essentially a buffoon and the really nasty piece of work is John McDonnell who is an out and out Commie and fully and openly supported the IRA. And if Labour form a government he’s in charge of the money (if there is any left).

    I suspect he’s the reason the City is jittery.

    Anyway back to Corbyn. I am not given to religious thoughts but…

    Lanky string of piss with scraggly beard, teetoal, vegetarian, lefty, likes nasty people, annoyingly sanctimonious and a sort of poseur of the worst variety.

    He’s the bloody reincarnation of George Bernard Shaw!

  • #John Galt: “I still believe we will end up with a hard BRExit, but that will be more by default than anything else” was my position, also, all along.
    But I fear the game is now up. The Remoan establishment and the mainstream media have cottoned on that this is going to happen, and are now all peddling hell for leather the “crashing out” narrative. “This deal, or No Deal – which is of course, too horrendous to contemplate”.
    Everybody -all of us – need to start talking loudly about “Cashing in on WTO” every time somebody says “crashing out with No Deal”. Take back control… of the narrative.

  • I’m struggling with the problem of “Which party is the least worst” if a General Election happened anytime soon. Can’t even vote for Labour as a protest, because if Corbyn got in I would never forgive myself. It’s a problem.

    How much is the deposit? You could always stand as an independent.

  • terence patrick hewett

    Voting labour or tory is the difference between catching leprosy or bubonic plague.

  • bobby b

    Very apt. One kills you from the inside out, the other from the outside in.

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