Business Leaders Warn Labour Against Wealth Tax Exodus Risks

The prospect of a new wealth tax under the Labour government has sparked significant debate and concern among economists, business leaders, and government watchdogs. The Institute for Fiscal Studies warned that such a tax would penalize savers and the middle class and has historically failed in other countries. Prominent business figures, including Sir Rocco Forte and Sir Martin Sorrell, cautioned that a wealth tax could trigger a further exodus of entrepreneurs and wealthy individuals from the UK, potentially harming economic growth and investment. The Office for Budget Responsibility highlighted risks in relying on high-net-worth individuals for tax revenues, warning of the government's vulnerable finances amid rising debt and demographic challenges. While Labour leaders emphasize fairness and the principle that those with the broadest shoulders should bear the greatest burden, Downing Street has neither confirmed nor ruled out the introduction of a wealth tax, fueling speculation amid calls from major unions and former Labour figures. Critics argue that the tax could undermine business confidence and wealth creation, at a time when the government is seeking to address a significant fiscal shortfall caused by recent policy reversals.