Bank for ultra-rich warns Reeves over entrepreneur exodus
Money manager says its wealthy customers believe Labour is ‘anti-business rather than pro-growth’
A leading private bank has warned the Government that high taxes and red tape are making Britain an “excruciating” place to invest and driving entrepreneurs overseas.
Lombard Odier, which manages money for the ultra-wealthy, has written to Rachel Reeves to highlight the scale of frustration among investors over the Government’s policies.
The 230-year-old bank said the Chancellor’s tax raid on employers’ National Insurance contributions, combined with the Employment Rights Act and changes to business rates, had led many of its customers to conclude that the Government is “anti-business rather than pro-growth”.
A number of high profile entrepreneurs have fled Britain in recent months for tax havens, including Dubai, in the wake of the Chancellor’s Budget announcements.
Lombard Odier said the impact of the tax changes have been compounded by a “lack of enterprise and negativity embedded in UK investing culture”.
“This cautious approach regarding investment may also be rooted in a perception that generating wealth is something negative,” the bank wrote.
The bank described how some entrepreneurs “found the process of raising capital from UK investors excruciating”, forcing many of them to seek investment overseas.
Lombard Odier submitted its concerns in a call for evidence launched by the Treasury last year. This was designed to tackle the growing number of entrepreneurs moving their companies overseas in search of growth.
Ms Reeves has tasked Treasury officials with reviewing the scale of investors leaving Britain. She has also launched an assessment of her decision to abolish the non-dom regime.
To tackle the wealth exodus, Mark Goddard, the UK chief executive of Lombard Odier, urged the Treasury to try and unlock £350bn in funds from cash Isas.
He said savers could be encouraged to direct some of this cash towards early-stage start-ups.
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However, the Chancellor’s Spring Statement on Tuesday is not expected to include any tax breaks for business owners. The Chancellor aims to keep it as uneventful as possible in an attempt to restore confidence.
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“We are seeing a quiet but determined exodus,” Mr Goddard said.
“When these individuals leave, they don’t just take their bank balance. They take their expertise, their future tax contributions and their appetite to mentor and fund the next generation of British start-ups.”
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