Labour’s proposed wealth tax may cause an exodus of rich people from UK, warns Sadiq Khan Mayor of London Sadiq Khan delivers a speech as the London Assembly invite Londoners to attend the first People’s Question Time since the Coronavirus pandemic began on November 23, 2021 in London, England. (Photo by Leon Neal/Getty Images)
LONDON mayor Sadiq Khan has said that Labour’s wealth tax proposal would hit those who are ‘equity rich but cash poor’ and cause a ‘flight’ of rich people out of the UK, according to a report in the MailOnline.
In September, Labour leader Sir Keir Starmer said that he would launch a tax raid on homes and shares if his party were in government.
According to the plan, homeowners don’t pay the tax on sales of their main homes but it is applied to any other property they own such as holiday homes and rental properties, when they are sold.
However, Khan has distanced himself from such proposals, warning of potential knock-on effects, the MailOnline report added.
“We have always got to be careful about the unintended consequences of hypothetical tax increases. I’m quite cognisant of the fact that it’s not me that creates the wealth and prosperity in our city, it is the small businesses, those who are innovators, those who are chief executives of big companies,” Khan was quoted as saying by MailOnline.
“I’m not competing against Manchester, Liverpool, Edinburgh and Glasgow, I am competing against Paris, Singapore, New York, Hong Kong. What I don’t want is flight out of London to those global competitors.”
Khan added that he had warned prime minister Boris Johnson, who was also his predecessor as mayor, that any ‘levelling up’ plans must not simultaneously damage the South East.
The premier last week faced accusations that he has ‘betrayed’ the North by axing flagship plans to improve rail.
Conservatives MPs and local leaders joined a brutal backlash as the PM tried to defend his ‘ambitious and unparalleled’ overhaul of inter-city links.
Johnson was accused of giving his crucial Red Wall voters ‘scraps off the table’ after the HS2 route to Leeds was ditched in favour of a Birmingham to East Midlands Parkway line, MailOnline report added.
The HS3 line linking Manchester and Leeds – known as Northern Powerhouse Rail – is also being shelved.