In a striking admission, Business Secretary Peter Kyle has conceded that tax increases implemented by the Labour government are fuelling an exodus of wealthy individuals from Britain. The comments come after one of the UK's richest people, Lakshmi Mittal, relocated to Switzerland.
Minister Admits "Worry" Over Business Exodus
Peter Kyle stated he is "worried" that super-rich business figures like Mittal feel compelled to leave the UK "in order to succeed." He revealed to Sky News that the situation extends beyond individual billionaires, noting "people starting businesses who have gone to America, actually in their droves," due to a lack of necessary funding in Britain.
Kyle did not shy away from linking these departures directly to government policy. "I'm not going to duck the fact that we have put up taxes, and we've closed some of the loopholes for non-doms," he said. He acknowledged that some are leaving specifically because of the changes to the non-domiciled tax status system.
Budget Anxiety and the "Growth Emergency"
Despite these concerns, Kyle sought to reassure the business community during and after the Confederation of British Industry (CBI) conference, insisting that Labour "is on the side of business." However, he admitted the government faces a significant challenge, stating, "I accept that we need more urgency. We need more boldness, because we inherited a growth emergency. We are still in a growth emergency."
This reassurance comes as business leaders await the upcoming Budget with trepidation. There is a palpable fear that Chancellor Rachel Reeves might be preparing further commercial tax hikes to raise an estimated £20 to £30 billion.
A "Groundhog Day" Budget Feared by Industry
While the Budget on Wednesday is expected to include some relief, such as a nearly £1 billion tax break for innovators and plans to address cliff-edge business rates for small firms, these measures may be overshadowed by larger tax raids.
CBI chief Rain Newton-Smith has issued a stark warning, urging the Chancellor to avoid a "Groundhog Day" Budget. She characterised the cumulative impact of repeated tax increases as "death by a thousand taxes" for UK businesses, highlighting the severe strain on the commercial sector.
As the government grapples with its inherited growth emergency, it faces the delicate balancing act of stabilising public finances without driving away the wealth and enterprise it seeks to cultivate.
