Rachel Reeves faces backlash for seeking investment while millionaires flee the UK amid tax changes
London: Labour’s Rachel Reeves is catching heat for her trip to Davos. She’s there to attract foreign investment, but it seems like millionaires are leaving the UK every 45 minutes.
She’s heading to the World Economic Forum, hoping to bring some overseas cash back to the UK. But critics, like shadow chancellor Mel Stride, say her tax policies are scaring off investors.
It’s a bit of a mess, really. The party’s crackdown on ‘non-doms’—wealthy foreigners living in the UK—has led to a big drop in millionaires. Last year, the UK lost over 10,800 of them, including some billionaires.
Rachel de Souza from RSM UK mentioned that many of these millionaires are looking for advice on relocating. It’s not a great look for Reeves, especially with the market being shaky and her needing to figure out how to balance the budget.
Even Elon Musk has jumped in, saying that not many businesses want to invest in the UK right now. Stride pointed out that while Labour claims to prioritize growth, their actions are pushing away potential investors.
Reeves is off to Davos, but Stride argues that her tax policies are driving wealth creators away. He warns that without these people, public services will suffer, and taxes will rise for everyone else.
Former business secretary Jacob Rees-Mogg also criticized her, saying the UK has become unfriendly to foreign investors. He thinks she should rethink her policies instead of just mingling in Davos.
In her recent Budget, Reeves announced plans to abolish the non-dom status, which has been a hot topic lately. Treasury minister Darren Jones defended this move, saying it’s only fair for those living in the UK to pay taxes here.
The non-dom status allows wealthy individuals to avoid UK taxes on foreign income, and it became a big issue when Rishi Sunak’s wife was revealed to be using it. She later decided to give it up to avoid distractions for her husband.
Business leaders are worried that Reeves’ Budget will hurt economic growth. The co-founder of Cobra Beer, Lord Bilimoria, said the planned national insurance hike for employers could damage businesses.
Despite the backlash, Reeves is standing her ground, saying she hasn’t heard any solid alternatives to her Budget plans. The Treasury hasn’t commented yet, but it’s clear this situation is heating up.
