Andy Burnham has been warned not to pay wealth tax before he arrives in Downing Street, with one of the private financial advisory firms saying that speculation alone is already driving big money, and the businessmen who send it, out of Britain.
The warning by Nigel Green, chief executive of the deVere Group, follows an interview in which Burnham, who replaced Sir Keir Starmer as Prime Minister on Monday, refused to tax the wealth of Britain’s wealthiest citizens. Speaking on Gary Lineker’s podcast, the incoming PM suggested that people could end up being asked for “more” and said fairness requires tough decisions ahead.
For business owners, the concern is less about the tax itself than the uncertainty. “The unproposed wealth tax is already doing damage,” Green said. “Money does not always wait for the law, it moves when the government shows that it is willing to go there, and Mr. Burnham just signed it.
“He needs to put this down today, not let it sit in Britain for months while the capital looks at the door.”
The time is not bad for a new administration that promises stability. The UK lost an estimated 16,500 millionaires by 2025, one of the largest single-year exits recorded anywhere in the world, and industry forecasts suggest the number could double by 2026 as the effects of deregulation continue to take hold. Analysts had already warned that Britain faced the biggest migration of billions worldwide before the change of leadership, and the latest research shows that the outflow of non-dom is going worse than predicted, putting billions of tax receipts at risk.
The competition does not stop. The UAE, Switzerland and Italy have all positioned themselves as the beneficiaries of Britain’s loss, favoring the capital and talent that London once took for granted.
Green says the presentations are not encouraging. “History has done this experiment more than once, and the result does not change,” he said. “France tried and watched tens of thousands of its wealthiest citizens leave before repealing this policy. Sweden tried and lost businessmen and headquarters and never came back.
“Wealth is moving in the same way that wages are not, and every government that has paid hard taxes ends up chasing money that is no longer there.”
The economics, he says, don’t always work as well as donors think. “A wealth tax reads well on policy paper and falls apart when it comes into contact with reality. Assets collected are taxed and the people who hold them start planning their exits quickly. The next is not new money for the Treasury. A shrinking base for investment, jobs and philanthropy, all equally dependent on the very people this tax will target.”
In the SME community, second-order effects can be very important. Leaving the wealth behind is the angel investment, family office backing and consumer spending that small firms rely on, and Green says the damage has already begun.
“Family offices are holding relocation talks this week that wouldn’t have happened a year ago. Business people are asking advisers whether Britain is still worth building.
His conclusion is clear: “Andy Burnham has a choice in his first weeks as Prime Minister.” Abolish wealth tax now, or watch Britain’s wealth record become his opening legacy.
“There is no version of this where keeping the door open to wealth tax helps Britain compete for money. Every day it stays open, most of that money goes through it.”
