[tag|Rathbones|]Rathbones[/tag] has warned that investors could flee the UK if an anti-business Government is elected at the General Election in May next year.

Rathbones has warned that investors could flee the UK if an anti-business government is elected at the general election in May next year.

A latest report by the private bank said the UK should not take investors for granted, adding that they quickly find alternative homes for their capital if the political environment has turned against them. It pointed to the mass exodus in France when Francois Hollande was elected president two years ago and introduced a 75 per cent top rate tax on high earners. The most high-profile dissenter was French actor Gerard Depardieu who took up Russian citizenship in 2013 and accused Hollande of punishing “success, creation and talent".

The significance of such trends is that, as the wealth management industry in London and elsewhere has seen, shifts of high net worth and ultra HNW individuals to new jurisdictions for reasons of tax and business created new client segments. In London, for example, there is a brisk business in securing immigration rights and visas for wealthy investors fleeing more difficult situations at home.

All three mainstream political parties came under attack in the Rathbones report, yet it was Labour and its leader Ed Miliband that received the most stinging criticism.

Rathbones described Miliband as “the most left-wing Labour leader since Michael Foot”, adding that his policies - which include freezing energy prices and rents and breaking up high street banks - are just mere populism.

“Mr Miliband’s approach appears unrestricted and his next attack could be on any sector - the only requirement is that he thinks it makes too much profit from the segment of voters that he is targeting,” said Jane Sydenham, investment director at Rathbones. “This creates a difficult environment for investors and international capital could move elsewhere.”


The Tories were pictured in a more positive light. Yet the private bank predicts the party will fail to win a majority for a second time around.  Its inability to reach agreement with the Liberal Democrats about re-balancing constituencies means Labour has a considerable advantage in the upcoming election and can gain a majority with a lower share of the vote.

As a result all forms of coalition government are still possible meaning that with less than 12 months until voting investors have little visibility on the potential implications for the economy.

But regardless of the election the most pressing issue for investors is protecting themselves against a rise in interest rates.

“To reduce the risk of overheating and inflation, which would require even bigger interest rate rises in time, a new chancellor would encourage the BoE to start raising rates straight after the election. Investors should plan accordingly,” the report said.