Michael Gove claims businesses do not fear no-deal Brexit as much as a Jeremy Corbyn government

Michael Gove in the House of Commons. Photograph: Parliament TV. - Credit: Archant

Michael Gove has claimed he is yet to meet a single business that fears a no-deal Brexit more than Jeremy Corbyn in Downing Street.

The chancellor of duchy of Lancaster was answering a question from Clive Efford on a new Institute for Fiscal Studies which pointed out the government’s “incompetence” on finances after “ten years of austerity”.

The Labour MP asked: “Would anyone other government consider a no-deal Brexit with the finances in that state?”

But a bullish Gove simply replied: “Business take a variety of views on Brexit and indeed a no-deal Brexit.

“But I’m yet to meet a single businessman, woman or organisation that thinks a no-deal Brexit would be worse than Jeremy Corbyn government.”

But there are signs that some businesses do consider Jeremy Corbyn less of a concern to their interests than a no-deal Brexit.

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Analysts at key banks including Citibank recently told the Telegraph they are more concerned about the UK leaving the EU without agreement.

“Is Corbyn as bad as no-deal? Perhaps no longer,” said Christian Schulz at Citi.

“A year ago, a Labour government would have been a big economic downside risk,” he explained, pointing to the plans for higher taxes and nationalisation. “These risks to the longer-term outlook have not changed, but Labour has become more decisively pro-EU over the past 12 months.”

“First, any market unfriendly policies instigated during a Labour government are temporary (until the government is voted out of office), and must be set against the permanent shock caused by a no-deal Brexit,” he said.

“Second, we see the magnitude of economic damage caused by a no-deal Brexit as much higher than policies proposed in the last Labour manifesto.”