Election economics: what the pundits say
Labour’s villains
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Britain has more than 150 billionaires, controlling assets worth £525bn, said The Observer. Given that around 14 million Britons live in “relative poverty” – defined as scraping by on the basics – each one of these billionaires “could be seen as a failure of government policy”. Jeremy Corbyn’s warnings to “the stinking rich” could well “smell sweet to struggling workers”. Maybe, said Nils
Pratley in The Guardian, but “summoning a few villains for the crowd to boo” will “do nothing for his business credentials”. Some of the Labour leader’s “baddies” – who include The Duke of Westminster, Ineos’ Jim Ratcliffe, hedge funder Crispin Odey and Sports Direct’s Mike Ashley – “may deserve a few verbal jabs”. But it’s impossible to tell if he is “proposing policies to tame their alleged sins” or “simply naming rich individuals he dislikes”. Floating voters will be assessing Labour’s economic credentials. “It would be better to say occasionally that the taxes that business pays are crucial.”
Tory tax cuts
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When it comes to tax, Boris Johnson should heed satirist Jonathan Swift’s saying that promises are like pie crusts – “made to be broken”, said Russell Lynch in The Sunday Telegraph. The PM’s leadership campaign pledge to raise the higher rate of income tax to £80,000, from the current level of £50,000, “should be going nowhere near a Conservative manifesto”. The politics and economics are “disastrous”. The move would cost £9bn a year, and 75% of the gains would be enjoyed by richest 10% of households. “Progressive taxation this is not.”
Johnson/Corbyn trades
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Some City investors “have already done nicely” from Johnson, said Lex in the FT. The “Bunterish” ex-mayor’s better-thanexpected progress towards a Brexit deal has prompted soaring shares “in companies with heavy exposure to sterling and the UK economy”. Land Securities and British Land are up by a third since August. Profiting from a Corbyn victory is “tougher”. Still, it might pay to take short positions (bet against) concerning utilities like Severn Trent, United Utilities, National Grid and Centrica if Labour rises in the polls – all are under threat of “expropriations”. Long positions would include multinationals with limited UK earnings and investor bases.