Next, the shadow chancellor Rachel Reeves is planning to raid the money in the UK’s pension funds. A big chunk of it will be diverted, under Treasury direction, into infrastructure investment, or into newer unquoted businesses, preferably in “green” or “socially responsible” sectors.
Perhaps it’s a good idea – but to take such a view requires immense faith in the intelligence and foresight of Reeves and her team to believe they can really pick “the industries of the future”. But there will surely be even less money to go into the existing 1,800 listed companies.
Finally, returns will be dismal anyway. We can all argue about whether the Tories or Labour are better at managing the economy (both of them seem fairly inept at present). And yet, there is little question about which is better for investors.
According to research by the brokers AJ Bell, since the 1960s Conservative governments have witnessed real returns of 17pc for the FTSE All-Share Index over the term of each administration. Under Labour the real returns have been minus 9pc. London has already significantly under-performed just about every other major market in the developed world. That is one of the main reasons companies no longer list in the City. Their share price will do better somewhere else.
Under Labour, the historical record shows that will get a lot worse. London will be trapped in a vicious cycle of diminishing returns leading to fewer listings, leading to even lower returns. Once that gets established, it will be virtually impossible to break out of.
On top of all that, we will see a clamp-down on non-doms, possibly higher corporation taxes, more windfall taxes, potentially a wealth tax further down the line, and a raft of new rights for employees. Add it all up, and the verdict is surely clear. The environment for doing business is becoming more and more hostile.
We cannot be complacent. After all, there used to be thriving stock markets in Liverpool and Manchester which only finally disappeared in the 1980s after many years of steady decline.
With another five years of more regulations, higher taxes, and dismal returns, the London stock market may well become a historical curio as well. A Starmer-led Labour government will finally have finished it off.