A government minister has admitted that Labour’s tax rises have led to wealthy Britons leaving the country, just days before this week’s make-or-break Budget.
The business secretary accepted that “some of the decisions” the party has made since Labour entered government mean “some people feel the need to leave”.
It comes just days after Sir Keir Starmer was urged to tackle a “dangerous brain drain” that is harming the UK economy after official figures showed that the number of Britons leaving the UK is far higher than was previously thought.
Asked if he thought wealthy individuals were choosing to leave the UK because of Labour’s tax choices, Peter Kyle told Sky News: “I do, yes”.
“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 added.
It comes after it was revealed over the weekend that billionaire Lakshmi Mittal has shifted his tax residence to Switzerland after nearly thirty years in the UK, becoming the latest ultra-wealthy individual to head for friendlier fiscal terrain ahead of Rachel Reeves’s budget.
Mr Mittal, who is one of the most prominent figures in Britain’s business landscape and often dubbed by media as the “King of Steel”, amassed his fortune through ArcelorMittal, the Luxembourg-based industrial giant his family controls through a roughly 40 per cent stake.
His departure follows a string of high-profile individuals moving abroad, including Revolut founder Nik Storonsky and Herman Narula, the £2.5bn tech chief executive.
Asked about Mr Mittal’s decision to leave the UK, the business secretary said he was worried “whenever somebody feels they have to leave the UK in order to succeed”.
He said: “I think it’s a worry [but] what I don’t want to do is, as a country, just focus just on the billionaires because there are other people that have needed to leave.
“There are people starting businesses that have gone to America — actually in their droves — because they haven’t had the funding that they need in this country to succeed.
“And that is something that we are fundamentally stopping the need for by recapitalising the markets here and putting a lot of work in for those spin-outs, those start-ups, those scale-up companies.”
Defending the government’s measures, Mr Kyle continued: “We’ve set up a global talent task force. We have set up a global talent visa. We are making it easier for people to come here who have high talents.”
He added: “Now, some people are going to leave because they were here, because of the way that the old non-dom system worked. There are other people who are coming to this country because of the excitement that’s in our economy at the moment, including the fact we are investing in AI.
“So lots of people are coming here because of the new excitement in our country, but I accept because of some of the decisions we’ve made, like closing those non-dom tax loopholes, some people feel the need to leave.”
A total of 257,000 British nationals are now thought to have left the country last year – 180,000 more than the initial estimate of just 77,000, according new official statistics, which also revealed that net migration had reached a new record high.
In the three years between the end of 2021 and the end of 2024, 344,000 more Britons are believed to have emigrated than the original estimate indicated, after the Office for National Statistics (ONS) updated its methodology.
Karl Williams, research director at think tank the Centre for Policy Studies, told The Independent that the figures point to “an alarming brain drain, with net emigration of British nationals both much higher than previously thought, and accelerating”.
The extent of migration away from the UK comes as a blow to Sir Keir just a week before his government’s crucial Budget, where the chancellor is expected to impose a swathe of tax rises as part of an attempt to plug a multi-billion pound hole in the public finances.
