Brex and the City: Beware the seduction of Labour's new strategy

Catherine Neilan
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Jeremy Corbyn Delivers Road To Brexit Speech
McDonnell and Starmer have been granted a meeting with City chiefs (Source: Getty)

In the two years since Jeremy Corbyn became leader of the opposition, much has changed in British politics.

But while there is a large group of people who find a closer connection with the radical left-winger than they ever did with his more centrist colleagues it remains the case that Corbyn’s appeal is more cult classic than bestseller.

Nevertheless, such is the level concern in the City over Theresa May’s handling of Brexit, Corbyn and his comrades, for all their confusion over whether or not we should stay in the single market, are attracting attention from the Square Mile in a way they didn't before June's election.

Not only has avowed anti-capitalist John McDonnell (and his more reasonable, more pro-Europe, colleague Keir Starmer) sought a meeting with the City of London Corporation, some within the City are starting to see Labour’s position on leaving the EU as having Brex appeal.

Indeed, City AM understands the shadow ministers of Treasury, DIT and DexEU will be heading into the City for a roundtable as soon as conference season is over.

Read more: We need future-facing leaders, not nostalgic dinosaurs like Corbyn and Rees-Mogg

One top City insider has told this newspaper of straw poll of his board that had them leaning towards Corbyn and Starmer precisely for their soft Brexit stance, rather than back the Conservatives who seem more relaxed hard Brexit.

This should serve as a wake up call to the government. The City is desperate for clarity over what to expect on exit day and beyond, and gradually people are becoming seduced by what is, on the surface of things, a more reassuring approach by the Labour party. The Tories, if not May herself, could win back support if they allow people an opportunity to plan for themselves, their businesses and indeed their families.

And while it makes sense to engage with Labour wherever possible, it would be short-sighted for City figures to view a Corbyn government as anything other than hostile to the business community.

Read more: Pressure piles on PM to make "deal friendly" Brexit speech to EU27

This is a party that would drag a further 1.2m people into the higher rate tax bracket, raise corporation tax as well as upping other business burdens, commit billions to nationalising industries, create a stultifying publicly-owned National Investment Bank and borrow up to the eyeballs to fund it all.

So despite Labour's superficially attract Brexit stance, the City should still view the party with a healthy dose of caution and scepticism.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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