The Great British Brain-Drain
I am friends with a billionaire property developer who left Britain for good this year. He went to live in a European tax haven because he objects to this country’s 40 percent inheritance tax—one of the most punitive rates in the world. He was born and had lived in London all his life, but his business interests are now global; he no longer recognizes this city, and feels the current Labour government is hostile towards wealth creators. The nation will miss him and his ilk: He reckoned he was frequently one of the top 10 taxpayers in Britain. Overall, the top one percent of earners generate 29 percent of all income tax receipts.
For centuries, Britain and especially London have been a magnet for talent and capital from across the world. Historically the center of the British Empire, and latterly the only financial hub to rival New York, London was a truly global city—full of high earners, a cultural mecca, brilliantly connected to other centers of finance and industry.
But recent times have not been good for London, or indeed Britain. I have lived and worked here for over 40 years, and I cannot recall a period when entrepreneurs and investors have been so demoralized. Everything appears worse: Public spending is approaching 45 percent of GDP, the highest level ever outside wartime; taxation is rising to 39 percent of GDP, the highest ever; regulation is more burdensome than ever; and we suffer the highest commercial energy costs of any developed nation.
The country appears caught in a doom loop of high debt, rising borrowing costs, and stubbornly high inflation. Unemployment is climbing and investment falling; many citizens are fearful of crime and disorder and unhappy with record levels of mostly unskilled legal and illegal immigration from places like Pakistan, Nigeria, India, and Bangladesh.
So an unprecedented exodus of Brits are off to Anglosphere countries like Australia, New Zealand, America, and Canada, as well as to Europe, where they see better opportunities. For the year ending June 2024, total long-term departures from Britain were 693,000, the highest for some years. As a friend recently remarked: “Every waiter in Sydney has an English accent.”
Ambitious young graduates find conditions here tough: sky-high accommodation costs; a weak job market; an all-pervading sense of gloom. The start-up booms of previous eras feel like a fading memory—they are at a 10-year low. Of course times are hard elsewhere too: France, Germany, and Spain are also teetering on the edge of recession. But those nations can at least cling together as part of the EU and the euro, which may provide some shelter from the storm. By contrast, Britain retained an independent currency in the pound sterling, and, in the years since it finally left the bureaucratic embrace of the EU in 2020, it has failed to reap major economic dividends.
Despite pioneering the industrial revolution and modern capitalism, Britain is a semi-socialist state. The current Labour government is deeply unpopular after only 18 months in power, but there is unlikely to be an election until 2029. So we are stuck with an administration where only 10 percent of the MPs have ever worked in the private sector. Consequently, their true mission appears to lie not in raising living standards through growth, but in workers’ rights, the public sector, redistribution, DEI, and all the other tired left-wing cornerstones.
Those who want to get ahead feel disenfranchised. Moving abroad to study, live, and work is mostly easier than ever—digital nomads are embraced by countries like Brazil, Portugal, Spain, and Thailand. People leave for the weather, a lower cost of living, and adventure. If I were in my 20s, I would be on the next plane to California or Texas. I regularly tell my children, aged 20, 19, and 15, that they must consider the option of emigrating.
At every business conference I attend, a key question I’m asked is “Why haven’t you left yet?” I stay because I’m patriotic, my family and friends are here, and because despite its many drawbacks, Britain retains a charm which is hard to match. And yet I have almost given up backing companies here after investing in over 50 ventures since the 1980s. I would prefer to deploy my capital in places with lower taxes, less regulation, and more growth opportunities.
Countries go through cycles, and I’m sad to say we are in a slump. Partly this is a consequence of policies like lockdowns during Covid; partly it is an addiction to public spending, deficits, red tape, and the challenges of an aging population. We probably need a crisis to force the politicians and the citizenry to realize that we need to make dramatic changes—involving tough trade-offs—so that Britain again becomes one of the best places in the world to live and grow a business. Until then, many of our best will flee these shores to live among the bright lights of other countries—a tragedy for us, and a boon for them.
https://www.theamericanconservative.com/the-great-british-brain-drain/