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John Redwood criticised over advice to pull money out of UK

November 13, 2017 5:20 PM
By Jessica Elgot in The Guardian

Liberal Democrats and Labour criticise Eurosceptic MP for telling investors to 'look further afield' because of the state of the UK economy

Labour has criticised the arch-Eurosceptic MP John Redwood for "talking down Britain" after he recently wrote a column of financial advice in which he recommended investors "look further afield" because of the state of the UK economy.

In the piece for the Financial Times, the Conservative MP - who has a £180,000 second job as chief global strategist for Charles Stanley - said the European Central Bank was promoting faster growth when the UK was seeing a squeeze on credit.

"Mario Draghi, ECB president, is now doing whatever it takes, not just to rescue the euro but to promote a much-needed economic recovery," he wrote. He also compared the US and Japan's approach favourably to the UK's.

The piece was published on 3 November but came to greater prominence after a scathing comment piece was published over the weekend by a Forbes commentator, Frances Coppola, who wrote that the MP had "advocated a course of action by the UK government that he knows would seriously damage the UK economy".

Coppola wrote: "To protect his job as an investment manager, he warned his wealthy clients to get their money out before the disaster hits. To me, this smacks of disaster capitalism. Engineer a crash while ensuring your own interests are protected, then clean up when it hits. This is despicable behaviour by a lawmaker."

Peter Dowd, Labour's shadow chief secretary to the Treasury, said: "This is yet another Tory MP openly admitting the chancellor's poor record on the economy means we need to change course in the budget, proving yet again that they are clearly losing the economic argument.

"Even worse than other calls from Tory MPs is the fact that this one is talking down Britain and encouraging investors to invest in other countries instead. It speaks volumes for the government's bungling of the Brexit negotiations, and their mismanagement of our economy."

Tom Brake (By Chris McAndrew - https://api20170418155059.azure-api.net/photo/bhDYT87s.jpeg?crop=CU_1:1&quality=80&download=trueGallery: https://beta.parliament.uk/media/bhDYT87s, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=61321850)Tom Brake, the Liberal Democrats' Brexit spokesman, also criticised the column, calling the advice "sheer hypocrisy" from an MP who had promoted leaving the EU.

"He is advising investors to move their money out of the UK, all the while pushing in parliament for a destructive hard Brexit that would see even more investment desert the country," Brake said.

"Major investors may be able to move their money abroad, but it is ordinary people who will suffer from the impact of a hard Brexit on jobs and living standards. The fact that even arch-Brexiteers are now losing confidence in Brexit Britain shows why we must give people a chance to think again and, if they choose to, stay in the EU."

Redwood, who does not mention the Brexit vote in his piece, has been a long-time critic of the approach of the Bank of England governor, Mark Carney. He wrote in the FT article that the bank was "busily arguing with itself".

"I sold out of the general share ETFs [exchange traded funds] in the UK after their great performance for the year from early July 2016 when I saw the last budget and heard the BoE's credit warnings," Redwood wrote. "The money could be better put to work in places where the authorities are allowing credit to expand a bit, to permit faster growth."

The MP for Wokingham has also previously criticised the cautious approach of the chancellor, Philip Hammond, tweeting that he must "get the Treasury to have more realistic, optimistic forecasts and to find the money for a successful economy post-Brexit".

Redwood's duties for Charles Stanley include chairing the bank's investment committee and writing twice-weekly market review and investment reports, totalling around 75 hours per quarter, according to the register for members' interests.

Downing Street would not comment directly on his advice to investors. Asked whether Theresa May agreed with Redwood that it was time for financiers to start pulling their money out of the UK, the prime minister's spokesman said: "We are working to secure a good deal for Britain and also a deal that works for the European Union. We think we're heading in the right direction and we're confident of achieving that."