George Osborne was quick to warn of the risks of business fleeing the shores of the UK if Nick Clegg’s suggestion of a temporary additional tax on the rich came to pass. But what evidence or justification is there or such fears and concerns?
One of the great fallacies that underpins a great deal of right-wing fiscal thinking is that increasing taxation on the better off will drive them out of the UK and thus prove counter-productive in revenue raising terms. That this is a fallacy was amply demonstrated by the recent Skandia “Millionaire Monitor” survey, a fascinating, if at times profoundly depressing, insight into the minds and motivations of a sample of millionaires from the UK, Dubai, France, Hong Kong, Italy and Singapore. By far the most interesting question came under the heading of “High Net Worth Mobility” and asked “Please rank the following reasons why you would consider leaving this country”, giving a list of 10 reasons. I couldn’t believe the mind set that the results demonstrated, and neither will you:
|Reason for leaving||Percentage of millionaires placing reason for leaving first||Ranking of reasons for leaving (1 to 10)|
|Society issues (crime, poverty etc.)||7.7||6|
|Friends and family overseas||8.8||5|
|High / increasing cost of living||11.0||3|
|Better standard of living in chosen alternative country||20.4||2|
This needs to be read in the context that 44% of the surveyed millionaires were not totally committed to living in the UK, so it is hardly an academic question for a good proportion of them. High taxation comes in fourth, just behind high or increased standard of living. Almost twice as many millionaires cite the similar reason of better standard of living in the chosen alternative country, but more than twice as many cite the main reason for considering leaving the UK.
So what is this problem that we must deal with at all costs to dissuade our footloose millionaires from fleeing these shores, never to return? What aspect of government policy needs to be tweaked to keep our rich friends content in their penthouses and country estates? The weather. Yes, those highly sophisticated captains of industry whom we must at all costs retain as UK residents are most significantly influenced in their lack of desire to stay in the UK by the good old British weather.
So George, you would be better off by a factor of 2 employing planes and chemicals to bombard the rain clouds off the south west coast to make it rain out at sea and improve the UK climate than you would worrying about whether to cut or increase taxes on the better off. Clearly imputing any degree of greater sophistication to our resident millionaires that that of the general population is utterly futile; they are just as shallow as the rest of us. So much for Bernard Jenkin’s comment “If the politics of envy made a country rich, we would be a very rich country.” I don’t envy them Bernard, I feel sorry for them. If the weather is their biggest worry, they clearly haven’t got enough going on in their sad little lives.
Two parting thoughts. The serious one? When will right wing politician stop peddling this rubbish about tweaks to the tax system having a devastating effect on our quota of resident millionaires? And (I hope) the humorous one? Perhaps the Tory politicians who are urging David Cameron to allow the building of a third runway at Heathrow are playing the long game, on the basis that global warming would improve the UK climate and thus attract more millionaires to come or to stay here? I know they always said when there was a Tory leadership election that they were “the most sophisticated electorate in the world” (also perhaps the most big-headed?), but boy that is sophisticated fiscal planning. Shame about the future of the planet though …………..