File this one away in the "we'll see" pile

An exodus after the election?

The chief executive of deVere Group, "the world’s largest independent financial advisory firm", wants you to know that this time, rich people really mean it when they say they'll leave the country this time if taxes go up. Nick Green says:

The astute number crunchers at the Institute for Fiscal Studies have shown that the government will have little alternative but to borrow more or increase taxes to pay for the Chancellor’s budget. As this is after an election, a time when MPs can more afford to take controversial measures, it is highly probable that the new government would opt for the former [sic, but I think he means latter] – taxes would be hiked up…

As so-called ‘high tax Britain’ is set to become ‘even higher tax Britain’, I would fully expect there to be something of a wealth exodus from the UK as wealthy Brits and non-domiciled taxpayers in the UK seek to move themselves and assets to lower-tax jurisdictions in order to safeguard their funds.

We've already had that argument, of course. After the 50p tax was introduced, there was a drop in the number of bankers fleeing to Switzerland, with the majority of avoidance taking the form of bringing forward payments (which is part of the reason why cutting the rate so soon was a stupid idea – that's not a trick you can perform twice). And we'll see what happens from 1 April, but I'll be we don't get an exodus of bankers from Switzerland to Britain once the 50p tax dies either.

File this one away for the future, in other words – it could make tasty claim chowder.


Boarding the private jet… Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why Theresa May won't exclude students from the net migration target

The Prime Minister believes the public would view the move as "a fix". 

In a letter to David Cameron shortly after the last general election, Philip Hammond demanded that students be excluded from the net migration target. The then foreign secretary, who was backed by George Osborne and Sajid Javid, wrote: "From a foreign policy point of view, Britain's role as a world class destination for international students is a highly significant element of our soft power offer. It's an issue that's consistently raised with me by our foreign counterparts." Universities and businesses have long argued that it is economically harmful to limit student numbers. But David Cameron, supported by Theresa May, refused to relent. 

Appearing before the Treasury select committee yesterday, Hammond reignited the issue. "As we approach the challenge of getting net migration figures down, it is in my view essential that we look at how we do this in a way that protects the vital interests of our economy," he said. He added that "It's not whether politicians think one thing or another, it's what the public believe and I think it would be useful to explore that quesrtion." A YouGov poll published earlier this year found that 57 per cent of the public support excluding students from the "tens of thousands" target.

Amber Rudd, the Home Secretary, has also pressured May to do so. But the Prime Minister not only rejected the proposal - she demanded a stricter regime. Rudd later announced in her conference speech that there would be "tougher rules for students on lower quality courses". 

The economic case for reform is that students aid growth. The political case is that it would make the net migration target (which has been missed for six years) easier to meet (long-term immigration for study was 164,000 in the most recent period). But in May's view, excluding students from the target would be regarded by the public as a "fix" and would harm the drive to reduce numbers. If an exemption is made for one group, others will inevitably demand similar treatment. 

Universities complain that their lobbying power has been reduced by the decision to transfer ministerial responsibility from the business department to education. Bill Rammell, the former higher education minister and the vice-chancellor of Bedfordshire, said in July: “We shouldn’t assume that Theresa May as prime minister will have the same restrictive view on overseas students that Theresa May the home secretary had”. Some Tory MPs hoped that the net migration target would be abolished altogether in a "Nixon goes to China" moment.

But rather than retreating, May has doubled-down. The Prime Minister regards permanently reduced migration as essential to her vision of a more ordered society. She believes the economic benefits of high immigration are both too negligible and too narrow. 

Her ambition is a forbidding one. Net migration has not been in the "tens of thousands" since 1997: when the EU had just 15 member states and the term "BRICS" had not even been coined. But as prime minister, May is determined to achieve what she could not as home secretary. 

George Eaton is political editor of the New Statesman.