Labour's Jeremy Corbyn or a no-deal Brexit? UK deals with a conundrum

London

HE IS the bane of bankers, a bearded, teetotalling socialist often derided in the British press and in Parliament for his efforts to suppress dissent inside the Labour Party and his radical plans to remake the British economy.

But in the unmitigated chaos of Brexit, Jeremy Corbyn, the opposition Labour leader, is trying to remint himself as a safe pair of hands, and an unlikely salve to jittery British markets spooked by Prime Minister Boris Johnson's plans for an abrupt split with the European Union (EU).

Surprisingly, it might be working.

"'What method of execution would you prefer?' is basically the question," said David Willetts, a Conservative former minister who was once an aide to Margaret Thatcher. "Corbyn would in normal circumstances look like an off-the-scale risky gamble. However, Brexit is the single biggest change in Britain's economic and political relations in 40 years, so Brexit itself is an off-the-scale economic gamble," he said.

With an early election looming, Mr Johnson's Conservative Party, once a friend to big business and a refuge for establishment figures of all stripes, has torched one convention after another, creating dust-ups with Queen Elizabeth II, the Supreme Court and Parliament. The Prime Minister's proposed Brexit deal, proffered last week to Brussels, was met with so much dismay that most analysts believe he is fully resigned to Britain leaving the bloc without one.

That has turned Mr Corbyn - a lifelong rabble-rouser and one of the most left-wing leaders in Labour's century-long history - into an improbable figure of restraint. He is implacably opposed to a no-deal Brexit and promises a second referendum that could reverse the split altogether.

Suddenly, banks have been left grudgingly weighing the benefits of a party run by neo-Marxists, radical union leaders and lawmakers with a history of supporting Communist regimes. Some parts of Labour, famously anti-establishment under Mr Corbyn, are fretting that they will somehow look like the soberer party in an election dominated by voters' desire for a shake-up.

"The Tories are promising the most radical and extreme economic disruption in nearly 200 years," said Tom Kibasi, the director of the left-leaning Institute for Public Policy Research, calling a no-deal Brexit the biggest upheaval since the British Empire abolished slavery in the 1830s.

"The scale of economic chaos the Tories are promising means that any of Labour's policies pale in significance." But, he said: "The issue is that right now the public have a clear appetite for change. The question is, are you going to offer them positive change, or change that's chaos and disruption?" Mr Corbyn's new sheen of acceptability has not yet paid dividends with the public. In carving out the middle ground on Brexit - promising a second referendum, but refusing to commit to one side or the other - he has alienated both Leave and Remain voters.

Analysts say it is not clear whether Mr Corbyn's plans for a generational reordering of the economy will cut through as long as voters remain obsessed with Brexit.

Despite his involvement in efforts to avert a no-deal Brexit, Mr Corbyn is still despised by a cohort of anti-Brexit lawmakers, some of whom blame him for failing to get a grip on anti-Semitism in the Labour Party.

Those lawmakers have resisted trying to unseat the government and instal him as a caretaker prime minister.

But in Britain's winner-takes-all voting system, Labour is still the party best positioned to wrench power from the Conservatives.

That has narrowed the choice awaiting Britain, some analysts say: a Johnson-led government increasingly bent on a no-deal Brexit, or a Corbyn-led government that would stop it. Even for some of Mr Corbyn's biggest foes, that is an easy choice to make.

Ken Clarke, a Conservative former chancellor of the Exchequer who has locked horns with Labour for decades, said last month: "Both are awful prospects, but I think a no-deal Brexit could cause far more damage to our future economic success than Corbyn."

Even in London, there is growing feeling that the financial industry could withstand the shock of Mr Corbyn's hard-left economic plans if that were what it had to do to avoid Britain leaving the EU without a deal managing future relations.

For financial analysts, there is nothing that tempers fears of Labour's plans to redistribute wealth and assets like an even more daring economic experiment: cutting adrift an export market of 500 million people.

"Between a Corbyn government that delivers a second referendum at the cost of some policies which from an economic perspective we may not be entirely happy with, and a Conservative government that is broadly pro-business but does the irreversible damage of the UK leaving without a deal, I'd choose the former," said Christian Schulz, an analyst for Citi.

Mr Corbyn, a vegetarian with a grandfatherly manner who for decades wandered the hard-left hinterlands of the Labour Party, has not made himself many friends in the City of London with a series of bold proposals he has rolled out over the last few weeks: creating a state-owned pharmaceutical company, attacking private schools, forcing companies to make their workforces into shareholders.

He also wants to nationalise the railways, raise new taxes on the financial industry and create a four-day work week.

Those policies could permanently undo the anti-regulatory crusade waged 40 years ago by Mrs Thatcher, cementing high-tax, pro-workforce rules. Labour supporters hope these measures will address gaping inequalities while critics fear they are built on an outdated vision of Britain's economy.

It's still, to many if not most bankers, a programme that looks politically repugnant and personally costly. And the calculation that it might be less catastrophic to banks than a no-deal Brexit remains hotly contested in some circles.

But analysts say the markets have taken comfort in the fact that even if Mr Corbyn performs well in the next election, he will probably not win enough seats in Parliament to govern alone.

Being forced to rely on the backing of one or more smaller parties, such as the centrist Liberal Democrats or the economically centre-left Scottish National Party, would rein in Labour's most radical plans. NYTIMES