Jeremy Corbyn – a fate worse than Brexit

published 5 July 2019

Jeremy Corbyn © Ian Forsyth/Getty Images

We have heard a lot over the last three years about the number of businesses making contingency plans to shift their headquarters from the UK and into somewhere inside the EU because of Brexit (nad actually doing it of course). We hear less about businesses making similar contingency plans to do the same in the event of the election of a Corbyn led government or a Labour government with a different leader but similar policies.

However, given that, when pushed, most business leaders (and investors) will confess to be much more nervous about this than about Brexit, must wonder if behind very closed doors they aren't doing it exactly that.

Note that a survey out late last year showed that four out of five of the chairmen of FTSE 100 companies felt that a Corbyn government would be more harmful to them than Brexit. One, quoted in the Times, put it like this: "a Corbyn government will be anti aspiration, anti business, wealth destructive and result in contracted spending leading to no growth." Britain's rich feel much the same way.

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With that in mind, a release from Hansa Trust (an investment trust that holds a variety of other investment funds as well as a large stake in Brazil based maritime services company Ocean Wilsons Holdings) is interesting. The board it says "has become increasingly concerned about the recent political climate in the UK and the instability and uncertainty this creates for Hansa Trust."

As a result, the board has "given consideration as to how to best protect Hansa Trust's business from the risks of unfavourable political developments in the UK and concluded that Hansa Trust should redomicile to an alternative location."

We know that this isn't about Brexit partly because Brexit makes little odds to the regulation around investment trusts but also because in order to attempt to replicate the benefits of the investment trust status it has had in the UK without the risk of losing that status Hansa has decided to ask shareholders to approve it redomiciling in Bermuda.

Hansa is slightly ahead of the game here Corbyn's approval ratings are shockingly awful. But it won't take much political change for them to look less paranoid than prescient.

We've put together a detailed report outlining how to protect your wealth from a Corbyn-led government. Subscribe to MoneyWeek now, and not only will you get your first six issues on the house, but you also get our Corbyn Wealth Protection Report completely free.

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.