US investment bank Goldman Sachs warns that a Labour government would be 'problematic' for big business

http://www.independent.co.uk/news/uk/politics/generalelection/us-investment-bank-goldman-sachs-warns-that-a-labour-government-would-be-problematic-for-big-business-10194492.html

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International banking giant Goldman Sachs has warned against Labour government, arguing that a victory for the party would be viewed as “problematic” by big business.

The bank has sent a research note to clients arguing that a Labour government – especially one supported by the SNP – might not implement what it called “market-friendly” policies, the Daily Telegraph reports.

The bank raised specific concerns that Labour would abolish zero-hours contracts and freeze energy prices, arguing that such a move would be likely to compromise the “flexibility” of British capitalism.

“The flexibility of the UK labour market could be compromised by promises to abolish so-called 'zero hour contracts’ and interventions in markets,” the bank said.

“Concerns are likely to emerge that reliance on the SNP would pull the Labour government away from the centre to the left of the political spectrum, as well as raising the spectre of distributional policies favouring Scotland at the expense of the UK as a whole.”

The bank said it was “likely that market and business sentiment would be supported by the emergence of a Conservative government,” the note continued, seemingly an endorsement of David Cameron.

In January of this year a note by the bank said it was likely that the Conservatives would win the general election.

Polls at the time and now show Labour and the Tories neck and neck, with Labour more likely to be able to lead a government were they repeated on election day.

It comes a day after the Independent reported that media mogul Rupert Murdoch had told Sun journalists that the future of his business depending on keeping Ed Miliband out of Downing Street.

Labour has faced a volatile relationship with big business under Mr Miliband.

At the party’s 2011 conference the new leader said businesses could be split into “predators” and “producers” – firms that took from society and firms who benefited it.

The speech was poorly received by groups claiming to represent big business, including the Confederation of British Industry.

Other figures in the party, such as shadow business secretary Chuka Umunna, have struck a more conciliatory tone, however.