ALEX BRUMMER: The folly of Labour wealth taxes

Daily Mail​

a day ago

During the run-up to Labour's election a year ago, I had a bruising on-the-air encounter with an LBC radio interviewer.
My suggestion was that plans by Rachel Reeves to target wealth would undermine the energy, entrepreneurship and enterprise needed to drive UK growth.
The interlocutor insisted it was time we rid ourselves of rich free loaders with little interest in the broader population.
The pay gap between those at the top in business and working people has been widening for decades.
Tesco boss Ken Murphy picked up £10m last year, which is 431 times that earned by the average worker in the group.
As boss of a top FTSE 100 company, everything about Murphy's remuneration is known and explained in ferocious detail in the company's annual report.
Research by the London School of Economics shows that the top 1 per cent of taxpayers living in Britain account for 30 per cent of the nation's total income tax take. The targeting of aspiration by Labour is proving an own goal.
The outflow of the rich from the UK, some 16,500 people on the last count, harms spending and investment.
The elimination of non-domicile privileges began under the Tories. The Chancellor hammered in the last nail. The change is calculated to add £4.2billion to the tax take of the Exchequer in 2026-27 and more in the subsequent two years.
She will be fortunate. Rather than stay in the UK and wait for their privileges to vanish, many non-doms already have fled. The current preferred destination is Milan.
For the price of £145,000, or equivalent fee to the Italian government, it is possible to circumvent taxes on worldwide income.
As wealthy residents depart, property prices in smart central London and sales of luxury goods and services have been punished. The willingness to invest in start-ups, real estate deals, partnerships and trading in Britain is diminished.
The City survived Brexit because UK wholesale markets and derivatives trading remained the first choice for European and American dealers. The number of jobs heading towards Europe was far smaller than predicted.
When the vice-chairman of Goldman Sachs, Richard Gnodde, was driven offshore this year, one recognised how serious the exits were becoming.
Milan, Dubai, Singapore are each growing rich on exiles from investment banks, private equity, and hedge funds. Private plane leasing firm NetJets is doing a roaring trade from billionaires swooping in for a couple of days to complete transactions but leaving before their feet touch the ground.
And we wonder why UK posh firms such as Burberry, Smythson and others are having a torrid time.
As alluring as soak the rich taxes are to the Angela Rayner wing of the Labour Party, they will not resolve the nation's fiscal problems.
Every penny may count in difficult times, but the extra income generated by inheritance tax reforms will be paltry. The dial is going to be shifted by the torrent of wealth, accumulated by baby boomers, as it is released to the next generations.
Unfairness in the tax system such as the 'carried interest' loophole exploited by private equity barons should be removed.
But the Chancellor and Treasury would do well to recall that there is no group more mobile than the super-rich.
Ask Sir Jim Ratcliffe, retailer Sir Philip Green, F1 star Sir Lewis Hamilton et al.
They voted with their feet long ago.