Business Secretary Peter Kyle has acknowledged that wealthy people are leaving the UK due to Labour’s closing of non-dom tax loopholes.
Speaking to Sky News on Monday morning, Kyle acknowledged that people were leaving the UK thanks to the Labour government’s tax decisions but said that the government must also focus on making it attractive for working people to stay in the country.
He referred to the recent flight of thousands of doctors from the country, who left for better opportunities and pay abroad.
“I am worried whenever somebody feels they need to leave the UK in order to succeed. What I don’t want to do is just as a country to be focused on just the billionaires, because there are other people that have needed to leave,” Kyle said.
“There are people starting businesses that have gone to America in their droves because they haven’t had the funding they need in this country to succeed, and that is something that we are fundamentally stopping the need for.”
This comes after reports over the weekend that Lakshmi Mittal, one of the richest men in Britain, is leaving the UK ahead of Rachel Reeves’s upcoming Autumn Budget, which has rumoured to include further levies on accumulated wealth and inheritance to help fund government spending.
As reported by The Sunday Times, Mittal is worth £15.4 billion and is currently domiciled in Switzerland for tax purposes, although he plans to spend much of his time in a mansion in Dubai going forward.
Kyle acknowledged that the exit of super-rich people from the UK has been partly the result of tax changes by the Labour government which aimed to close loopholes used by wealthy people.
He referred to Labour’s increased focus on international talent and attracting productive workers and innovative entrepreneurs as a positive example of the government’s strategy for boosting business growth.
“Lots of people are coming here because of the new excitement in our country, but I accept that because of some of the decisions we’ve made like closing those non-dom tax loopholes, some people feel the need to leave.”
‘Wealth exodus’ claims could be overblown
While recent reports have pointed to an exodus of millionaires leaving the UK due to the country’s increasing tax burden, an analysis of the research behind these findings shows that these claims don’t always stand up to scrutiny.
The data used to back up this claim is based on websites like LinkedIn, which is not the most accurate identifier of where millionaires actually live as opposed to where they work.
Additionally, the proportion of rich people leaving or expected to leave the UK has remained relatively constant below 1% of total UK millionaires.
The reason the number of millionaires leaving has grown significantly is because the number of millionaires has also grown proportionally. The fraction of millionaires that emigrate has remained largely the same.
Surveys have also shown that wealthy people living in the UK are not necessarily opposed to higher taxes on wealth, with 72% of millionaires polled by UK organisation Patriotic Millionaires supporting increased taxes on the super-rich.
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