A delegate takes a break outside the venue for the annual Labour Conference in Liverpool, U.K. (Photographer: Simon Dawson/Bloomberg)  

The Six-Letter Word Scaring Business. It's Not Brexit.

(Bloomberg Opinion) -- Who says there is no consensus on Brexit? Maybe not in Westminster, where the U.K.’s fractious parliament sits; but get a group of business leaders in a room, and suddenly everything looks much clearer: Prime Minister Theresa May’s deal to quit the European Union is workable, but a Labour government under Jeremy Corbyn would, however, be a whole other category of pain.

Since the Brexit referendum, the voice of business had rarely made itself heard. Many company chiefs pragmatically assumed a deal would be struck and the U.K. would make an orderly exit. They made contingency plans, but as a survey by the Confederation of British Industry of its members found, most held off triggering them.

There were downsides to speaking out too openly. Many firms were wary of alienating either remain or leave voters among their customers by expressing a strong viewpoint. Large public companies had the added concern of spooking investors by drawing attention to the costs of continued uncertainty or disruption to supply chains.

The business leaders who got most of the attention were, by default, those like James Dyson, pioneer of the bag-less vacuum cleaner, or JD Wetherspoon Plc founder Tim Martin, or leave campaigner and insurance entrepreneur Arron Banks, all vocal supporters of Brexit. They tended to fall into two categories: those who resented the EU’s approach to regulation and wanted to see the U.K. strike more ambitious trade deals; and those who had more nationalist or sovereignty-centered arguments.

Many Brexiters gleefully noted that business lobbies like the CBI had often been on the wrong side of history in the past. And other groups like the British Chambers of Commerce have been more circumspect about the deal’s merits.

But now that an exit agreement is on the table, the clock is running out and the chance of no deal at all is a very real possibility. Corporate leaders are starting to make noise. The real catalyst isn’t Brexit, it’s the risk of a Labour government.

The consensus view was succinctly summed up by the CBI’s Director for Wales, Ian Price. “People are pretty Brexited out,” he said, recounting a recent meeting of 30 or so Welsh business leaders. “The feeling in the room was one of let’s get on with this and, if that’s the best deal on the table, let’s get it done.”

Both May and Corbyn addressed the CBI’s annual gathering this week. The prime minister pitched her deal as the best available. While she received applause that was warm and sympathetic, it could hardly be described as enthusiastic.

Executives I spoke to in hall afterwards all gave similar verdicts: The deal is flawed and the government has made a hash of things — but it is acceptable. It was never going to be an even negotiation, they reasoned. Their preoccupation was Corbyn.

The Labour leader’s address came at the end of the conference and there wasn’t much to appease the crowd. His party would reject the deal, seek new elections and set about a dramatic reordering of the economy. The latter would include nationalizing key industries, raising corporate taxes and giving workers a third of the seats on company boards.

His vision isn’t the social democracy of Sweden, but a populist socialism whose mantra “for the many, not the few” struck many as a euphemism for the kind of redistributive policies Britain hasn’t seen in decades. He got polite applause, but I thought delegates looked like they’d just visited the dentist. Corbyn didn’t look any more comfortable in their company either.

Labour’s 2017 manifesto promised to honor the result of the Brexit vote and ruled out continuing the free movement of people. So he too would take the U.K. out of the EU and out of the single market. How Corbyn and his party intend to salvage a good Brexit remained a mystery after his address; his plans for remaking the British economy were left all too clear.

A Labour government is where the real risk lies, says the CBI’s Price. “There is a huge cost implication to what Labour wants to do.”

Steve Eisman, the money manager who predicted the collapse of subprime mortgages before the financial crisis, put it more bluntly than any of the executives I met. “Corbyn’s a Trotskyite,” he told Bloomberg earlier this month. “Now I know my Trotskyites well, and I know you don’t want to be invested in the U.K. if a Trotskyite is prime minister.”

The CBI’s reaction to Corbyn’s speech was unequivocal. “From rigid employment rules to blunt public ownership, the Labour approach sounds more command and control, than partnership. This is not the change that is needed.”

Business isn’t entirely united on how to proceed. Some executives think a second referendum is the only way to settle the issue. They include Guy Hands, founder of the private equity company Terra Firma and former Bank of America Merrill Lynch European chief Alex Wilmot-Sitwell, who told the FT that May’s deal is the best option but “There is a strong case for another public vote” if she fails to get it through parliament.

The apparent support for May’s agreement among the corporate community isn’t something Britain’s traditional party of business can dismiss as parliament moves toward a vote. If Conservative lawmakers reject the deal and plunge the country into further uncertainty, many traditional Tory voters will view it as the ultimate self-indulgence. It should be of little comfort to them that their supporters have nowhere else to turn for now.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.

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