Firstly I’m writing this article as a centrist and fiscal conservative. I’m not arguing for higher taxation. I’m arguing for intellectual honesty about taxation. Those are very different things.
A remarkably simple causal narrative has taken hold in Britain:
Labour came to power. Taxes increased. Millionaires left. Wealth disappeared. Britain became poorer.
Repeat those statements together often enough and they begin to sound like an established chain of cause and effect.
They are not.
That does not mean taxes have no influence on where people live. Nor does it mean losing major investors, entrepreneurs or taxpayers could never harm the economy.
It means that separate facts, forecasts and assumptions are being stitched together to support a political conclusion that the evidence does not automatically establish.
Britain’s high taxes were not invented by Labour
Whatever anyone thinks of the present government’s tax decisions, Britain did not suddenly become a high-tax country when Labour entered office.
Before the 2024 general election, the Institute for Fiscal Studies reported that tax revenue as a proportion of national income had risen sharply since 2019 and was already higher than at any point since 1948. It described the 2019–24 Parliament as overseeing the largest increase in the tax take of any Parliament on record.
That happened under a Conservative government.
The same period included tax reductions in particular areas, including cuts to employee National Insurance and earlier increases in the personal allowance. But reducing one tax while increasing the overall amount collected does not make Britain a low-tax economy.
Labour inherited a historically high tax burden. It did not invent one.
That distinction matters because the current narrative attempts to establish Labour as the starting point of the causal chain. Once that false starting point is accepted, every subsequent report of a millionaire leaving Britain can be presented as proof of Labour’s economic failure.
“Millionaires are leaving” is not a complete economic argument
The widely reported claim that Britain would lose 16,500 millionaires in 2025 came from Henley & Partners and New World Wealth.
It was a forecast of net migration, not an administrative count from HM Revenue & Customs proving that 16,500 people had left because of a particular Labour tax decision.
The underlying methodology draws on a private database of more than 150,000 high-net-worth individuals, property and company registers, migration programme statistics, information from removal companies, and Henley & Partners’ own enquiries and applications. Estimates of migrating wealth are produced by multiplying estimated migration flows by the average wealth attributed to high-net-worth individuals in the relevant country.
That may provide useful evidence of a trend.
But it does not prove that a particular tax caused each departure, that the person’s assets left Britain with them, or that an equivalent amount of productive investment disappeared from the UK economy.
Changing tax residence is not the same as closing a factory.
Personal net worth is not the same as productive capital.
And neither is automatically a measure of the value someone contributes to the wider economy.
If somebody leaves Britain and takes a productive company, significant investment, employment and future tax receipts with them, that matters.
But if somebody changes tax residence while retaining British property, businesses, customers and investments, the economic consequences are different.
We should measure those differences rather than replacing them with the word “millionaire”.
A concentrated tax base is not necessarily a resilient one
Wealthy people unquestionably pay substantial amounts of tax.
The National Audit Office reported that approximately 850,000 people classified by HM Revenue & Customs as wealthy represented around 2% of individual taxpayers in 2023–24 but paid £119 billion, approximately 25% of personal taxes. It also found that 29,000 people with incomes above £1 million had £34 billion in Income Tax liabilities.
Those figures are usually presented as evidence that Britain must organise its tax system around retaining a comparatively small population of extremely wealthy taxpayers.
I think they should prompt a different question:
Why has Britain allowed its tax base to become so dependent upon a relatively small number of highly mobile individuals?
A large payment from one wealthy taxpayer is important.
But millions of smaller payments from people earning salaries, running businesses, employing others and purchasing goods provide something else: scale, predictability and resilience.
Most employed people pay tax through PAYE. The tax is deducted before their salary reaches them. They cannot normally move their employment income between jurisdictions, reclassify it as a capital gain, place it in a trust or decide when it should be recognised.
Wealthy individuals are not inherently dishonest, and most meet their obligations. But HM Revenue & Customs acknowledges that wealthy taxpayers can have affairs involving multiple businesses, investments, trusts, taxes and jurisdictions. That complexity creates greater scope for error, uncertainty and deliberate non-compliance.
Research using UK administrative tax records found another complication. When taxable income and realised capital gains were considered together, mean effective tax rates peaked at 38% for people receiving £500,000 and then declined to below 30% for those receiving more than £3 million. The researchers attributed most of that difference to lower statutory rates applying to different forms of remuneration, particularly capital gains.
In other words, someone with an ordinary salary may have fewer choices about how and when their income is taxed than someone receiving wealth through several different channels.
That should be part of any honest conversation about fairness.
The goal should be millions of prosperous taxpayers
Britain’s greatest economic asset is not the number of millionaires who choose to claim residence here.
It is millions of economically active people.
People working, buying, saving, investing, forming businesses and employing one another.
A broadly prosperous population creates a broad tax base. A broad tax base is inherently less exposed to the decisions of a relatively small group of internationally mobile individuals.
This does not mean we should be indifferent to entrepreneurs, investors or productive capital. Britain should actively attract all three.
But we should distinguish between genuine wealth creation and the passive accumulation, relocation or restructuring of wealth.
We should also recognise that private wealth is not created independently of society.
Entrepreneurs contribute ideas, expertise, capital and risk.
Britain provides infrastructure, educated workers, courts, contract enforcement, property rights, financial institutions, security and access to a large, sophisticated consumer market.
Both sides of that relationship create value.
Taxation is partly the mechanism through which we decide how the cost of maintaining that environment should be distributed.
This is not an argument for higher taxation
I say this as a centrist and fiscal conservative.
I believe government should take no more than it reasonably needs. It should eliminate waste, justify its expenditure and be accountable for every pound it collects.
A tax can be economically damaging even when its political objective sounds attractive. Poorly designed taxes can discourage investment, distort behaviour, suppress growth and produce less revenue than expected.
But fiscal conservatism should not require intellectual dishonesty about taxation.
I am not arguing for higher taxation. I am arguing for an honest discussion about taxation.
That discussion should ask:
What should Britain tax?
Who should bear the greatest responsibility?
Which behaviours should the tax system encourage?
How do we reward productive investment and genuine entrepreneurship?
How do we build a broader and more resilient tax base?
What should taxpayers reasonably expect the government to provide in return?
Those are difficult questions.
They cannot be answered by repeating:
Taxes rose. Millionaires left. Britain became poorer.
Show us the productive investment that was lost.
Show us the businesses and jobs that disappeared.
Show us the reduction in productivity.
Show us the tax revenue that would otherwise have been collected.
Most importantly, show us the counterfactual: what would have happened had the tax not changed?
That would be evidence of causation.
Until then, we have forecasts, correlations and political assumptions arranged to resemble economic fact.
And while Britain argues about whether it is doing enough to retain a relatively small number of millionaires, it avoids the much more important question:
What are we doing to create millions more prosperous ordinary taxpayers?
That is the real foundation of a successful, resilient economy.