Let’s give new Mayors taxation powers to stop the millionaire exodus.

For her column in CITY AM, Jamila Robertson suggests we give new Mayors taxation powers to stop the millionaire exodus.

Today, voters head to polling stations to elect four regional mayors (two of which are new roles for 2025, with six to come in 2026). This forms part of the government’s English Devolution Plan, which will grant extended powers to metro mayors, allowing them to “take back control” and end the “cap-in-hand approach to our regions”. Disappointingly for business, mayoral powers remain largely unchanged and continue to centre around access to central funding.

I have always had mixed feelings about devolution. While I understand the need for local communities to manage their own affairs, there is a danger that devolution puts power in the wrong hands. Case in point, Scotland, where the SNP used office not to advance the lives of Scots, but to obsess over independence; or in London, where we see a Mayor infatuated with air quality whilst locals walk around clasping their phones with both hands for fear of theft, and investors flee.

To be fair, the latter isn’t only a London problem. The impact of the Autumn Budget is still being felt across the country. Only last week, City AM reported that Goldman Sachs’ most senior banker outside the US, Richard Gnodde, is moving to Italy – which has attracted non-doms through its golden visa scheme (a flat €200,000 fee, ironically inspired by the UK’s non-dom status). Gnodde’s move mirrors that of Labour Party donor and multi-billionaire steel tycoon, Lakshmi Mittal, who recently announced he was leaving the UK for the UAE, and young entrepreneurs Steven Bartlett and Grace Beverley, who have both relocated to LA.

But who can blame them? With the government increasing Capital Gains Tax to 24 per cent (a move which has seen UK Capital Gains Tax receipts fall by £1bn in the 12 months to March 2025), imposing VAT on independent schools and abolishing non-dom status, more than 10,000 millionaires left the UK in 2024, a 157 per cent increase on the previous year, according to investment migration advisers Henley & Partners. It means that, since Labour came to power, one millionaire has left the UK every 45 minutes. 

A study by the Adam Smith Institute claimed that Britain’s exodus of millionaires last year was as damaging as the UK losing half a million taxpayers, and found that each of the millionaires who left Britain last year would have paid at least £393,957 in income tax.

So what is the solution? We channel Texas, and we do this by expanding enterprise zones. Established by Geoffrey Howe in 1980 and relaunched by George Osborne in 2011, Enterprise zones were created to provide businesses located within them with growth incentives, such as a business rate discount of up to 100 per cent over a five-year period, enhanced capital allowances for the purchase of machinery and equipment, and access to simplified planning laws.

There are 48 enterprise zones in England, which form a myriad of guises, including Bristol University, the Didcot Growth Accelerator and Oceansgate Plymouth. In 2018, the then Ministry of Housing, Communities and Local Government revealed that between April 2012 and December 2016, enterprise zones in England hosted 877 companies, which employed 38,393 people and attracted £3.5bn in private sector investment. 

The US federal system enables a similar level of competition on steroids. If you are priced out of California, as many wealth creators have been, you can move to Texas. Texas, which boasts zero corporate income tax, with only businesses with gross receipts in excess of $2.47m subject to a franchise tax between 0.375-0.75 per cent, saw 94,000 Californians move to the state in 2023. 

To realise similar benefits, metro mayors should be given the freedom to set income tax, corporation tax and business rates for their areas, creating a real market mechanism.

If a mayor could set the income and corporation tax rate for an area they preside over to 0 per cent, we would see a dramatic shift and real movement across the country, instead of out of it. We would see entrepreneurs, young families and investors move not to Italy or the UAE, but to Lincolnshire, Bath or Hull. Who needs the Burj Khalifa, when you have Bath Spa?

Read the article here: https://www.cityam.com/britain-is-going-to-the-polls-but-whats-the-point-of-metro-mayors/