With only a few days left until the election, tensions are mounting high. The latest polls reveal that while Labour has narrowed the gap against the Conservatives, Boris Johnson and co. are still the clear favourites to win a majority.
It is also guaranteed that Corbyn is a greater threat to the wealthiest of this country, than a hard Brexit.
Britain’s wealthiest individuals are prepared to immediately leave after a Labour win, out of fear of losing billions under a Corbyn Government. The £82.9 billion spending proposal and various tax reforms in Jeremy Corbyn’s Manifesto heavily target the ‘bankers and billionaires who profit from a rigged system’. The CEO of Campden Wealth, Dominic Samuelson, believes that more than 3,500 wealthy families will be affected by Corbyn’s new tax systems, and many have already put plans into action, for instance making early gifts to their children to avoid Labour’s proposed inheritance tax, which starts at just £125,000 (current inheritance tax starts as £325,000).
Radical policies result in Radical change
Corbyn’s Manifesto has been labelled as one of the most radical plans to change Britain by a major party for decades openly attacking the ‘Tax Dodgers, Bad Bosses, and Big Polluters.’ It has received a lot of public backlash, with Peter Hargreaves, co-founder of Hargreaves Lansdown, warning Corbyn that such a radical tax regime against wealth creators would rapidly reduce the health of Britain’s economy. If tax rates are intolerable for the wealthiest, they will leave, and if the biggest fifty taxpayers (each paying more than £40 million in taxes every year) left it would put a big hole in the chancellor’s budget.
Bad for the Economy
Many investors have also taken money out of the stock market for the first time in years – as they wait for some stability pre-election and Brexit before investing again. Moreover, the lack of political stability has encouraged many HNWI to move UK equities into cash. A labour victory would only serve to worsen the financial situation, especially in key industries (such as Rail and Energy) which Corbyn has threatened to re-nationalise thus dampening the share prices of many providers. Lastly, with new policies such as the Financial Transition Tax which adds a charge both ways, increasing the cost of buying shares and bonds, a victory could have a nuclear effect on the stock market. It would also mean further delays to Brexit, as the Leave Plan goes back to the negotiation table, bringing another extended period of uncertainty for the stock market.
This election, at the core, is a question of ideology…will the country choose to continue with a low tax, small state, individualist regime – characterised since the Thatcher era, or leap into a more Social-Democratic regime, with more generous State provision, but with an unknown price tag at the expense of the wealthy?