WPP chief executive Sir Martin Sorrell has described the UK general election as a no-win choice between Tory uncertainty over Europe and Labour “bashing business”.
Sorrell said the 7 May election was a so-called “Morton’s fork” – named after a 15th-century Archbishop of Canterbury – in which neither outcome was satisfactory and would “crimp” the UK economy.
The WPP boss is no stranger to colourful language, having previously talked about “bath-shaped” recessions and “grey swans” to portray uncertain political and economic events.
The UK election, he said, was one of five “grey swans” that were still “flapping”, the vote for Scottish independence having gone away – for now.
Sorrell, a close ally of David Cameron, said: “It’s difficult. You’ve got the Europe referendum on one side [triggered by a Conservative election victory] and then Labour having a go at business or bashing business on the other.”
“It doesn’t matter who wins, both are going to have to deal with a big deficit,” he told the Guardian.
Asked about the impact of multi-party politics amid the growing popularity of Ukip and the Greens, Sorrell said: “Obviously coalition governments are not strong governments by definition; that may nor may not be a bad thing.
“If we do have a referendum [on Europe], the best thing will be to get it over quickly rather than wait until 2017. That is a long time to wait, as we saw with the Scottish referendum it increases uncertainty.”
In his company’s preliminary results for 2014 published on Monday, in which the marketing and advertising giant reported pre-tax profits up 12% to £1.45bn, Sorrell warned the election’s “increasingly uncertain result … may crimp the strong UK economy”.
He said a Conservative win or coalition-led government would lead to an EU referendum causing “significant uncertainty”.
But he warned against Labour’s “bashing business” manifesto which he said “may resonate at the box office”, with an outright win for either the Conservatives or Labour deemed unlikely.
“All seems a case of ‘Morton’s Fork’,” he said.
“Either way, the UK economy may slip into the political cycle again, with austerity in the early part of the five-year cycle to deal with the continuing budget deficit and better times around the next election in five years’ time (or earlier?).”
Of the five “grey swans” identified by Sorrell, he said the future of the Eurozone and the situation in Ukraine were of the most concern.
The phrase Morton’s Fork – not to be confused with Hobson’s Choice – is said to come from John Morton, the Archbishop of Canterbury and Lord Chancellor under Henry VII.
A choice in which both alternatives are deemed to have unpleasant consequences, Morton is said to have reasoned that people who lived extravagantly could pay taxes because they were well off, and people who lived frugally could pay taxes because they had saved their money.
Sorrell said the Tory-led coalition had done a “great job” in the UK and chancellor George Osborne had done “brilliantly”. “Five years ago it looked pretty gloomy,” he added.
Sorrell said the sixth “grey swan” – last year’s Scottish referendum – “seems to have flapped away, at least for the moment”.
He said the Eurozone remained “fragile despite some improvement” and “the litany of woes remain in the Middle East”.
He said there were continuing fears around the BRIC economies, Brazil, Russia, India and China, but said WPP remained “undiminished bulls” on China and “bullish on Russia … but only in the medium to long term”.
Sorrell expressed support for HSBC – a WPP client – following allegations of systematic tax avoidance at its Swiss banking arm.
Sorrell said: “You have a chairman and a chief executive who have made strategic and structural changes and they will continue to do so.
“They have changed the bank and they have slimmed it down. The line they used to have was the ‘world’s local bank’. That is no longer the line.”
He told Sky News: “They have to weather the storm and implement the strategy they have outlined in recent years. I think they will win through in the end.”
