Labour eurosceptic donor John Mills: ‘the City always says the roof will fall in’

by Dave Hill

Labour Brexiters are relatively rare and therefore sometimes thought exotic. It’s difficult not to see businessman John Mills, who has been giving large sums of money to the party currently led by Jeremy Corbyn for many years, as fitting that mould. He is an army colonel’s son who went to public school and is the boss of JML – John Mills Limited, a company that makes an array of useful products, from steam irons to pet-grooming gloves, and owns various TV shopping channels.

Though educated in Scotland and at Oxford, Mills is a Londoner, born in Hampstead Garden Suburb. Aged 79, he was a Labour Councillor in Camden for most of the years between 1971 and 2006 and has served as deputy chairman of the London Docklands Corporation and on pan-London local authority bodies. He’s also an economist, with strong views about sterling and exchange rates, as expressed in a new book.

Responding to his invitation, also accepted by eight other journalists, to hear his views on the general election result, Brexit and the state of he economy entailed a breakfast time visit to a book-lined niche within the Ivy Club in Covent Garden, the type of venue that makes an English small town migrant check his boots for dung, even after 40 years tramping the capital.

The cappuccino was sublime. I ventured that Brexit is anticipated with trepidation by City financial giants, much of London’s business community and by its Labour mayor, Sadiq Khan. Jobs could be relocated. Migration curbs will hurt. London’s economy could shrink. Are these fears unfounded? Almost certainly, Mills believes.

“They always say that,” he replied, reassuringly, of big players in the Square Mile. “We had all this with the Euro. We were told the roof was going to fall in if we didn’t adopt it, the City was going to go downhill, there was going to be a flight to Europe, and that all turned out to be completely wrong. I think there will be some problems with the City, obviously, but I honestly think it is unlikely to be on a scale that is massively disruptive.”

Should Sadiq cheer up a bit? Mills does not take this chance to chide a comrade.

“I don’t think the prospects for the economy are that bad,” he said, referring to the UK in general. “I think it’s probably not going to grow much over the next year or two as a result of all this, which is a bit of a worry, but that’s a different thing from having a big depression.”

By “all this” he meant the uncertainty created by Brexit, up to a point, but now also the uncertain state of Theresa May’s government. His caution against undue alarm certainly brings to mind certain episodes under the previous mayor. Boris Johnson, future Brexit poster boy, came to power at City Hall in May 2008 just as the financial crisis was about to get into its full stride. A report he commissioned into London’s competitiveness, published at the end of that year, warned that unless certain EU regulations were loosened, the City faced decline. They weren’t, and the City is still here. In 2013, Johnson railed against EU plans to cap bankers’ bonuses, calling them “a boost for Zurich, Singapore and New York” at London’s expense. A mass exodus was forecast, but never came.

Mills, a eurosceptic for a very long time, is far more worried that the prime minister’s weakened grip on power makes a “soft Brexit” more likely. “I think the government had, although it hadn’t fully announced it, a pretty clear plan as to what they wanted to see accomplished in the negotiations,” he said. “It was to see the UK coming out of the single market, coming out of the European Economic Area, coming out of the Customs Union and then negotiating a free trade deal. I think that outcome would be pretty good for the UK, good for the rest of Europe, would satisfy most people in this country and would be the best possible outcome”.

But now he fears it will “very difficult to get everyone to focus in and agree to all that”. His view, as a deal-making entrepreneur, is that the UK’s position must be “sufficiently robust to be prepared to walk away from a really poor deal”. He worries that “the likelihood of being prepared to support a walkaway position, which is the Hard Brexit, the World Trade Organisation deal,” has lessened and he believes that can’t be good.

Mills emphasises both the large amount of cash we pay into the EU, which he puts at £12bn in all, and the UK’s low levels of investment: “The proportion of GDP which we divert to investment is unbelievably low, now less than 13%, which is about half the world average and about a quarter of what is spent in China.” This, he contends, has ruined UK manufacturing and created an economy of debt and sell-offs, from airports to football clubs to utilities.

“The result of all this is that half the population has done really well out of globalisation and everything that’s gone with it and the other half has done really very badly with no wage increases for years,” Mills says. He illustrates this with a stark North-South statistic: “The gross value added per employee in the London area is £44,000 a year, in the north-east it’s £19,000. That’s how divided the country is.”

Like his views or not, Mills puts the dominant London view that Brexit will be bad for us to a useful intellectual stress test. He does the same for the political party he’s helped keep balance its books for so long. Though impressed by Labour’s avoidance of the huge defeat that was widely predicted, he thinks Corbyn has plenty of work to do: “One of the most important things for Labour over the next period is to translate the wave of protest and the enthusiasm for a lot of what Jeremy Corbyn had to say into policies which are going to be practical and workable.”

Mills thinks Brexit could be a part of Labour putting Britain right. In his secret heart, does the MP for Islington North agree?

 

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