Andy Burnham has been warned that he must quash talk of a potential wealth tax, which some suggest could raise £10 billion but drive wealthy individuals out of the country.
Burnham's Comments on Wealth Tax
Speaking in an interview with Gary Lineker before officially taking office, the new prime minister said: "I'm not going to rule things out right now. I do believe we need a greater sense of fairness and people feeling that things are being done in the right way and a fair way. But at the same time, you know, I don't want to sort of be perceived as somebody who's coming in with grudges and agendas and, you know, going to just immediately find or demonise one group or create a new way of dividing people."
Warning from deVere Group CEO
Nigel Green, CEO of financial advice firm deVere Group, said that a wealth tax would cause rich people to leave the UK. He stated: "A wealth tax that has not been proposed is already doing damage. Money does not sit around waiting for legislation.
"It moves the moment a Government signals it is willing to go there, and Mr Burnham just signalled it.
"He needs to put this to rest today, not let it hang over Britain for months while capital quietly heads for the door."
Potential Revenue and Impact
It is thought that a levy on the super-rich could raise £10 billion through a 2% minimum charge on households with more than £100 million in wealth, as suggested by a study by Gabriel Zucman, a professor of economics at the Paris School of Economics, and Ben Tippet, a lecturer in economics and wealth inequality at King’s College London.
Mr Green added that the UAE, Switzerland and Italy have "positioned themselves as beneficiaries of Britain’s loss, actively courting the capital and talent that London once took for granted".
He said: "Wealth is mobile in a way wages are not, and every government that has taxed it hard has ended up chasing capital that has already gone."
Mr Green fears every week this speculation continues is a week that competition swings further away from Britain. A wealth tax, he added, "reads well on a policy paper and collapses on contact with reality".
Mr Green said: "Tax accumulated assets and the people holding them start planning their exit immediately. What follows is not new revenue for the Treasury. It’s a shrinking base of investment, jobs and philanthropy, all disproportionately reliant on the very people this tax would target."
