It's no wonder that the middle classes are fleeing Rachel Reeves's anti-wealth island
A brain drain is coming. We need to talk about emigration. Yes, you read that right, emigration – not just immigration.
You heard the warnings during the Brexit wars – business and investors will leave for Paris, Frankfurt, Milan (and the Earth will stop spinning...) unless we remain in the customs union – and back then it was largely a load of hot air. But hear me out.
This time, it's actually happening. Entrepreneurs and businesspeople are fleeing in their droves. In the past year alone, more than 10,000 millionaires have left the UK. Only China saw more high net-worth individuals leave. European countries are now stealing our lunch, with Italy and Portugal styling themselves as destinations for investor flight with attractive low-tax regimes.
It wasn't Brexit that did it, but an economically illiterate tax regime determined to squeeze the juice dry. The best-paid 1 per cent already paid about a third of all income tax collected: those with the broadest shoulders were – and still are – bearing the greatest burden. But the Chancellor viewed successful investors and risk-taking entrepreneurs as criminals to punish, rather than assets to court.
The non-dom tax changes may have polled well in focus groups, but they've backfired – and the public will now pay the price. Who is going to fund increases in defence, healthcare and transport spending? Yet again, it will fall to the middle classes to bridge the gap left. The Chancellor's ineptitude means further tax rises on working people in the autumn are now inevitable.
The social contract with the middle class hasn't simply frayed – it's been shredded. They have been disproportionately targeted to fund a record tax burden while their quality of life has remained largely stagnant. They're paying more than ever to get less than ever in return. The public services they use are crumbling, the streets they walk feel less safe, and the town centres they visit are hollowed out by petty crime and boarded-up shopfronts.
In France, discontent leads to riots; in Britain, it seems to dissipate into despair. The very real risk now is that Brits vote with their feet and simply pack up and leave en masse. A recent poll showed that nearly a quarter of UK adults are considering moving abroad in the next five years.
These are highly skilled professionals who are the bedrock of any country: 48 per cent of those in the IT industry are considering emigrating, as are 30 per cent of those in the healthcare sector. And it's not just white-collar workers, either – when I speak to tradesmen, they think they would have far better prospects in countries such as Australia and Canada.
This is no longer an issue of investor flight, but a full-on brain drain. In the 1970s, a high-tax and anti-business environment led to Britain experiencing a net loss of 500,000 people. Half a century later, history could well repeat itself.
Even my generation, now pushing into our 40s, who didn't feel like we had it particularly good entering the jobs market in the 2000s, and with the massive house-price boom of that period, had it so much better. When I speak at universities, I am struck by how many are contemplating opportunities abroad. And who can blame them? Young graduates today pay more than ever to live in tiny bedrooms in shared flats. The prospect of homeownership – or starting a family – has never been more distant.
Unlike previously, the alternatives to the UK are increasingly appealing. Their money can go further elsewhere, and they can live in more prosperous countries with a better quality of life.
In 2007, the average Brit was richer than the average American, Australian, Austrian, Belgian, Canadian and German, to name just a few. Now, they have all overtaken us. And it's not just them. Finland, the UAE, Hong Kong and Israel have all sailed past us when it comes to GDP per capita. A failed policy consensus of the past 20 years has driven this country into decline – and now the consequences are upon us.
We won't return to being a country of net emigration anytime soon. Quite the opposite: Starmer's immigration White Paper was a recipe for more mass legal and illegal migration. That means hundreds of thousands more migrants who, over their lifetime, will take out more then they put in – many of whom are from culturally divergent countries. Meanwhile, net contributors are pushed towards the exit. On average, a millionaire leaves the country every 45 minutes, while an illegal migrant enters the country every 15 minutes. It's the most brain-dead migration policy imaginable.
I don't just fear for the raw economic consequences. If middle-class flight takes off, the foot will slam on the accelerator driving the dizzying pace of change. Brits who have grown up here and are imbued with our history, heritage, culture, customs and traditions can't simply be swapped like-for-like. Nations, like all good things, take an age to create but are easily destroyed. Many Brits can sense that the country they love is slipping away: at first gradually, then suddenly.
I understand why people consider leaving the UK, although I could never, ever imagine it myself. I too despair sometimes, but I care too much to just shrug my shoulders and resign myself to defeat. We have a fight on our hands to turn this country around. But safe streets, cohesive communities, cheap energy, functioning public services, higher wages and a startup culture are never unobtainable. For all our problems, this is a great country – and I'm convinced we can be greater still.
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