Just when you think that the Labour voices of disquiet, prompted by politics of envy, couldn’t get any worse, there is now a new initiative… wait for it; an Exit Tax trying to prevent wealthy Britons fleeing this country.
Let us not forget that the government has just reformed the 200-year-old non-dom tax regime, which has uprooted 16,500 millionaires and created the largest migration of wealth ever seen on Earth.
This is not just the case of them selling a few trophy homes in the UK, but moving holding companies, capital connections and future commerce, such that this could be a masterclass of capital flight loss which could have secondary effects amounting to a loss of £66billion for this country.
As a result, very sadly, London (formerly the greatest city on earth) is fading as a brand magnet for wealth and more welcoming fiscal regimes in other countries are ‘rolling out the red carpet’ to welcome these valuable individuals and cannot believe their own luck.
POLITICAL SLOGANS
Prior to the election last year, the Labour Party liberally deployed political slogans that they were going to use the new-found riches, from the non-dom tax changes, to pay for extra nurses and doctors and look how hollow this soundbite appears today.
Stuffing its saddle bags with freshly minted money
Mental visions of the Treasury ‘stuffing its saddlebags’ with freshly minted money, is the stuff of Walt Disney.
Economic commentators cannot understand the breathtaking naivety of the government and its inability to avoid this predictable car crash.
As if this was not enough, an Exit Tax is the equivalent, in metaphoric terms, ‘of an incompetent hotel manager who, rather than improve the standard of food and service of his business so that it is oversubscribed, decides, instead, to lock the guests in their rooms in order to prevent them from leaving.’
Stupidity on steroids, or what?
This is illustrative of a foolish tax plan, imposed by out of touch politicians who are presiding over a failing system.
The record outflow of monies from the UK is a sign of being a badly run country, reflected in the bond prices, and the growth factor is as elusive as ever.
These laudable objectives do not come about by simply praying for them, you need to provide the environment for them to thrive.
Scintilla of hope on the horizon
Hark, all is not lost, there is a scintilla of hope on the horizon if the ideas published by the think tank, Onward, ever see the light of day.
Apparently, 69% of Labour supporters would back the government if it exempted the richest from some taxes, in return for paying a lump sum to be invested in the UK economy.
Under Onward’s proposals, wealthy residents could be exempted from worldwide foreign Income Tax, Capital Gains and Inheritance Tax for 15 years, in exchange for a £300,000 flat fee.
To qualify for the tax break, they would also have to invest £3million in one of the government’s industrial priorities such as life sciences, clean energy and financial services.
16,500 wealthy Britons are lost
Whilst the United States and United Arab Emirates are attracting 7,500 and 9,800 millionaires respectively, on the other hand, Britain has lost 16,500 of them, according to Henley & Partners.
Lord Mandelson – politician with more titles than a newsstand at WHSmith
Lord Mandelson (the politician who has more titles than a newsstand at WHSmith) endorses this initiative, and good for him for doing so, in sharp contrast to the complete buffoon, Lord ‘Pillock’ (oops typo… aka Lord Kinnock), who thinks it is a marvellous idea.
He would, wouldn’t he? Shall we remind him of the notorious pre-election rally in Sheffield in 1992, when he struck the wrong triumphalist tone and threw away the election.
The left-wing Labour zealots need to get over themselves and out of their own way.
The left-wing Labour zealots need to get over themselves and out of their own way.
They need to learn a lesson from Tony Blair that harnessing the resources of the wealthy lets everyone in the UK benefit, rather than imposing draconian policies that repel them, which inevitably is a huge cost to this country.
There is a feeling amongst even the wealthy who have left, that they may return if the government comes to its senses or there is a political party change at the next Election.
Some of them have chosen to keep their property for their wives, as a backstop, whilst their children are educated in the UK.
No stampede of residential properties yet…
As such, there isn’t yet a stampede of residential properties coming onto the market at reduced prices, as I might have feared a little while ago.
However, we are, now, short of cash buyers above £10million, as this was the natural preserve of the international purchaser who, currently, are enjoying their Mediterranean retreats and are not normally back until autumn.
After this, we can properly assess how serious this problem really is for the uber residential property market.
Getting larger by the day, the Chancellor’s Budget sinkhole
Presently, all the economic indicators are moving in the wrong direction.
Unemployment, inflation and the budget deficit are up, growth is down and the sinkhole in the Chancellor’s budget is getting larger by the day.
Reeves and the Prime Minister are not averse to one or four U-turns on tax policies
I hope Reeves has the gumption to see the writing on the wall before it is too late.
After all, both she and the Prime Minister are not averse to one or four U-turns on tax policies, as we have seen.
I think these two political pygmies are short of the ‘self-effacing gene’ or just perhaps their narcissistic, rhinoceros hides are difficult to penetrate.
If ‘Rachel from Accounts’ was crying in the Commons recently, no doubt she will be wailing after her next autumn budget and I’m afraid, so will we!
