Newspaper article The Evening Standard (London, England)

Why Markets and Business Can Live with Labour

Newspaper article The Evening Standard (London, England)

Why Markets and Business Can Live with Labour

Article excerpt


IT IS astonishing to have to report with just a week left to polling day that the only thing that could test the nerve of the financial markets would be the prospect of a Conservative victory. Anything else, with the qualified exception of a very small Labour majority which would put Prime Minister Blair in hock to his left-wingers and the trade unions, will be taken in its stride by the City.

This very dullness of this general election campaign tends to obscure the remarkable fact that the temples of capitalism are entirely unfazed by the prospect of five more Labour years. Since the election was called the pound has not moved, even when provoked by quite horrendous balance of payment figures; Government securities have remained steady, suggesting continued confidence in the Government's handling of the public finances and its ability to keep inflation under control; and the stock market's crablike meander shows it is far more preoccupied with American economic developments than with politics at home.

This is an amazing transformation. For more than 30 years from 1964 onwards the merest hint that Labour was doing well in the polls was enough to give investors the jitters. But not this time. Markets have now had four years' experience of this Government and reckon they have its measure. Labour caused some irritation in its first term but business no longer believes it will do anything totally stupid.

Much of the City is now owned and managed by non-British subjects and for them the election is a sideshow. They see the world from a global perspective and don't care much either way who wins - a complacency which perhaps owes something to the fact that if it gets bad here, they can always decamp.

But the calm in the markets does not mean, despite Blair's claims yesterday, that Labour is now the natural party of business. …

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