Cabinet minister admits Labour’s tax rises have driven wealthy out of UK
A government minister has admitted Labour’s tax rises are causing wealthy Britons to flee the country just days before this week’s budget.
The business secretary acknowledged that “some of the decisions” the party has made since Labor entered government meant “some people feel the need to leave”.
It comes just days after Sir Keir Starmer was called on to tackle a “dangerous brain drain” damaging the UK economy after official figures showed the number of Britons leaving the UK was much higher than previously thought.
Asked whether wealthy individuals were choosing to leave the UK because of Labour’s tax preferences, Peter Kyle told Sky News: “Yes, I think so.”
“I’m not going to run away from the fact that we put in taxes and closed some loopholes for non-doms,” he added.
It was revealed over the weekend that billionaire Lakshmi Mittal has moved her tax office to Switzerland after nearly three decades in the UK, becoming the latest ultra-rich person to head to friendlier financial territory ahead of Rachel Reeves’ budget.
Mr Mittal, one of Britain’s most prominent business figures and often referred to by the media as the “King of Steel”, made his fortune through Luxembourg-based industrial giant ArcelorMittal, which his family controls with a nearly 40 per cent stake.
His departure follows a number of high-profile figures moving abroad, including Revolut founder Nik Storonsky and £2.5bn tech CEO Herman Narula.
Asked about Mr Mittal’s decision to leave the UK, the Business Secretary said he was concerned “when someone feels they have to leave the UK to be successful”.
He said: “I think it’s a concern [but] What I don’t want to do as a country is just focus on the billionaires because there are other people who need to go too.
“There are people — in fact, in droves — who are starting businesses and leaving for America because they don’t have the financing they need to be successful in this country.
“And that’s something that we’ve basically stopped the need for by recapitalizing the markets here and doing a lot of work on these spin-offs, startups and companies that are scaling.”
Defending the government’s measures, Kyle continued: “We’ve created a global talent task force. We’ve created a global talent visa. We’re making it easier for highly skilled people to come here.”
He added: “Some people will leave now that they are here, because of the way the old non-dom system works. “There are other people coming to this country because of the excitement in our economy at the moment, including the fact that we are investing in artificial intelligence.
“A lot of people are coming here because of the new excitement in our country, but I accept that some people feel the need to leave because of some of the decisions we’ve made, such as closing non-dom tax loopholes.”
A total of 257,000 British citizens are thought to have left the country last year, according to new official statistics; that number is 180,000 more than the initial estimate of 77,000. This figure also reveals that net migration has reached a new record.
344,000 more Britons are believed to have emigrated in the three years between the end of 2021 and the end of 2024 than the original estimate stated, after the Office for National Statistics (ONS) updated its methodology.
Karl Williams, research director at the think tank Center for Policy Research, said: Independent The figures point to “a worrying brain drain, with net migration of British nationals much higher than previously thought and rising rapidly”.
The scale of immigration from the UK was a blow for Sir Keir just a week before his government’s crucial budget deadline; Here the chancellor is expected to introduce a series of tax increases as part of a bid to plug a multi-billion pound gap in the public finances.
