By Hugo Dixon
Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.
The UK faces an unpalatable choice in next May’s general election. The Labour opposition, which is currently ahead in the polls, has a somewhat anti-business agenda. Meanwhile, the Conservatives want to hold a referendum on Britain’s EU membership. If the people vote to quit the EU, industry will lose full access to its biggest external market.
To many in business, the choice seems like one between the devil and the deep blue sea. It’s not quite that bad. But Britain risks being stuck with a government that damages its economy.
Look first at Labour, whose annual conference was held last week. Ed Miliband, its leader and quite possibly Britain’s next prime minister, isn’t quite an old-style socialist. But he doesn’t understand enterprise, business or markets in the way that Tony Blair, the former Labour leader, did.
Miliband’s economic policies are mostly about interfering with the market: an increase in the minimum wage; raising the top rate of income tax back to 50 percent; a new tax on “mansions”; a freeze on electricity prices; special taxes on hedge funds and tobacco companies; further taxes on bankers’ bonuses; and yet another hike in the levy banks pay according to the size of their balance sheets.