Brain drain fears as foreigners flee Sir Keir Starmer’s tax risk
The Tories raised fears last night that Labour‘s ‘hidden’ tax rises could spark a 1970s-style brain drain of the wealthy amid claims that top earners are already quitting the country.
Sir Keir Starmer was challenged to admit he would unleash new levies on rich entrepreneurs and well-off investors that would drive them out of the UK.
The claims came with some experts already saying that rich individuals are leaving the UK before a high-tax Labour government got in.
Miles Dean, head of international tax at consultants Andersen, told the Financial Times: ‘People are leaving because of Labour. Tax is clearly the key weapon they have and they’re going to use it to level down.’
But Labour said last night that plans to scrap the ‘non-dom’ (non-domiciled) tax-exemption status for wealthy individuals were first unveiled in the last Tory budget.
Sir Keir Starmer (pictured, on a BBC Question Time special on Thursday) was challenged to admit he would unleash new levies on rich entrepreneurs and well-off investors that would drive them out of the UK
Only yesterday, the Tories claimed to have uncovered a new £2 billion ‘black hole’ in the very first year of an incoming Starmer government – partly because Shadow Chancellor Rachel Reeves (pictured) has said Labour will not introduce VAT for private schools in their first year
Non-doms are those living in Britain but with their home overseas for tax purposes who don’t pay UK tax on money they make elsewhere.
Sir Keir has also insisted that apart from closing specific tax loopholes, nothing in his manifesto requires additional tax rises.
But Conservative critics say Labour’s plans cannot be delivered without unleashing tax hikes yet to be declared to voters.
Only yesterday, the Tories claimed to have uncovered a new £2 billion ‘black hole’ in the very first year of an incoming Starmer government – partly because Shadow Chancellor Rachel Reeves has said Labour will not introduce VAT for private schools in their first year.
Ex-business secretary Sir Jacob Rees-Mogg said: ‘If Sir Keir gets in, he will repeat the mistakes of the 1970s Labour government and provoke a brain drain of wealthy people our economy needs.’
And a Cabinet minister warned that a Starmer government would ‘soak the rich’.
Left-wing MPs will lay down amendments to the private schools legislation to make the tax hike 25 per cent instead of 20 per cent, the minister told The Mail on Sunday.
Ex-business secretary Sir Jacob Rees-Mogg (pictured) said: ‘If Sir Keir gets in, he will repeat the mistakes of the 1970s Labour government and provoke a brain drain of wealthy people our economy needs’
Other tax hikes will be brought in through amendments. ‘The ‘soak the rich’ element of Labour will be high in number,’ the minister said. ‘The unions will also pile pressure on them to amend Starmer’s proposals. He will have to start facing down his own MPs.’
Last night Labour said: ‘Nothing in our plans requires any additional tax to be increased.
‘Labour is committed to closing the loopholes in the Government’s plan to end the non-dom status and to invest that money in our NHS because if you make Britain your home, you should pay your taxes here too.’
