Osborne has to resist LibDem Luddites
25 January 2013
Despite growing fears of a triple-dip recession, Chancellor George Osborne must resist pressure from his Liberal Democrat coalition partners to introduce a new wealth tax in his 20th March budget, as it could “deter much-needed new foreign wealth from entering the UK and drive out wealthy foreigners who already live here,” says the chief executive of the world’s largest independent financial advisory firm.
The comments from the deVere Group’s Nigel Green come as it is confirmed that UK GDP shrank by 0.3 per cent in the fourth quarter, and earlier reports that the Lib Dems are drawing up plans to propose a new tax aimed at the rich.
It also follows suggestions that former French President, Nicolas Sarkozy, amongst other high profile French personalities, is considering a move to London in response to speculation that France’s new President, Françoise Hollande, is to create a hefty millionaire tax.
Mr Green says: “Mr Osborne has, on many occasions, bragged that he has increased taxes on the wealthy in every budget since 2010, but he should resist any plans to implement a new wealth tax in this year’s budget as it could deter much-needed new foreign wealth from entering the UK and drive out wealthy foreigners who already live here.
“One of the UK’s main attractions for the super-wealthy, such as Mr Sarkozy and his heiress wife Carla Bruni, is that is has a more competitive tax policy than other jurisdictions.”
He added: “We are now seeing in France, with Gérard Depardieu recently renouncing his French passport in favour of Russian nationality, and with the country’s richest man, luxury goods magnate Bernard Arnault, having transferred his multi-billion euro fortune to Belgium, that even the prospect of taxing the mega-rich can potentially trigger an exodus – and the Treasury benefits hugely from such people in a multitude of ways, including stamp duties on shares and properties, capital gains, inheritance taxes and high income tax rates.
“The UK does not want to go down the road seemingly favoured by the Lib Dems and Mr Hollande, despite, and because of, today’s bleak GDP figures that put Britain on track for a triple-dip recession.”