Wealth tax: City bosses warn Labour of entrepreneur exodus
A wealth tax would spark a fresh exodus of entrepreneurs from the UK, according to City grandees as calls mount from within Labour to explore the policy.
Sir Martin Sorrell, Sir Rocco Forte and Sir Philip Hampton warned in The Telegraph that business owners could flee Britain en masse.
Hotelier Sir Rocco said: “Labour has already seen a huge exodus of wealthy people which is ongoing, with many more due to leave before the Budget. A wealth tax will further exacerbate the problem.”
S4 Capital chief Sir Martin Sorrell told the paper: “It would result in people leaving the country and not just wealthy people or people who’ve accumulated those assets but people who were looking to accumulate assets over time.”
“Trying to distribute a smaller cake doesn’t work. What you should be trying to do is trying to create a bigger cake.”
Meanwhile, former Royal Bank of Scotland (RBS) chair Sir Philip Hampton slammed the policy as a “strange idea” which is “very anti-growth”, adding: “What you lose most by having things like the wealth taxes is the people who can invest in the country.”
He added: “I can’t think of a business sector that wouldn’t be adversely affected by this.”
Towing the party line
The consistent refrain drummed in by Labour figures – from Neil and Stephen Kinnock to a Downing Street spokesperson and most recently transport secretary Heidi Alexander – is that those with “the broadest shoulders” should take the highest tax burden.
Alexander told LBC’s Nick Ferrari that government policy has been “guided by fairness”, citing new taxes on non-doms and VAT on private school fees.
“I think fairness needs to be the guiding principle in the way we approach decisions around taxation, but we also need to do that in a way which balances the contribution that entrepreneurs can make to growing the economy.
“And so this government will always take decisions in the national interest. And we’re determined to get the economy firing on all cylinders again.”
Polarising policy
In the past 48 hours, the prospect of a wealth tax has spiralled out from a comment made by a Labour leader who stepped down 33 years ago – Lord Kinnock – to a major political dividing line.
Conservative leader Kemi Badenoch said in response to Stephen Kinnock’s LBC interview: “Labour aren’t slapping down talk of new taxes – they’re entertaining it.
“They’ve blown a £9.3bn hole in the public finances and now want to plug it by taxing your home, car, pensions and savings.”
She added: “You don’t tax your way to growth – life’s already too hard for people.”
On the other side of the aisle, Green co-leader Carla Denyer posted on X: “Are Starmer and Reeves finally about to take their heads out of the sand and admit that taxing wealth fairly is a much better idea than cutting support for disabled people?”