Brexit and the waning days of the United Kingdom

[Jacob]

Cheer up, Tamas!

You (we) will probably have either a massive war or an existential economic crisis at some point in the next 60 years (maybe both). That should shake things up a bit and lead to a post-war / post-war boom of derring-do and action (hopefully).

[Sheilbh]

My official opinion is God Save the King, of course, and I'll never actively contribute to remove our Lord and Sovereign, but I do wonder if dumping the monarchy and with it remnants of the Empire could help revitalise the country?

You could always have done your citizenship ceremony like Lea Ypi (although I do feel this is a little Harry Enfield playing a teenager ):


I think it's the wrong way round. You can't really engineer a constitutional moment that would cause the UK to get rid of the monarchy introduce a new constitution etc - in the same way as re-writing any other country's constitutional settlement. Constitutional moments happen because revolution, independence, occupation or liberation - I don't think it's something you can just choose to do.

Although clearly on balance the UK is a great place to live in and likely will remain so on the short and medium term, I am a bit concerned about the long term, due to all this obvious passive inertia we are on.

Yeah I think this is a challenge and an important part of British politics - and I expect is true of many other places too. And I think we need to be careful not to get into accidental "American carnage" territory that overstates issues in a way that opens up a risk.

During the local elections a pollster asked people to describe the UK in 2024 in one or two words. The most popular words: broken, mess, struggling, divided, expensive.

When asked to describe the area that they live in, the most popular words were: nice, quiet, rural, safe, peaceful.

And they're both right and don't negate each other but I think they're both people's experience and there is a difference between their lived experience in their life and community v the (I think correct) perceived national picture.

I wonder, what if the past 60-odd years have been still mainly going on the momentum the centuries of the Empire gave the country? the prestige, the language, the capital assembled?

I think the inherited advantages from Empire are law and language. English law has travelled the world which is an advantage that we still benefit from - law is a big export sector. Similarly I say it a lot but the Bismarck line is right, including in relation to Britain - the most important fact for the UK in the twentieth century is that America speaks English. I also think for much of post-war Britain, the role of Hong Kong is quite important.

For the rest I'm not sure. Capital is very much a mixed bag (it is not relevant to the moral or ethical judgements, but economic historians basically say that on balance the British Empire broke even), as is prestige. I think the empire we benefit from is the American. The "global world order", the "rules based liberal world order" is what was created by Americans and Europeans  in the post-war era and we are a beneficiary of that. I think the imperial context that matters most right now is the challenge to that system by revisionist powers.

No matter how much that is a factor, to me it seems obvious that the challenges Sheilbh have been listing like water management, the energy grid, housing, etc, aren't going to sort themselves out. Paradoxically, we are in inertia because too many people (including myself, really) have it too good, still. Change, like letting a new housing estate to be built near you, or a solar farm ruining the sight of the unwieldy green space you are used to, means a graspable  risk to your comfort. Inaction's risk is more long-term and thus not visible, especially for those won't be around in a couple of decades (which, I realise, might also apply to me if I consider the average age of death when I was born).

Ok, ramble done.

Yeah. I mean just today I saw that the proposal for a big new film studio (again - a major British export industry) in Marlow has been blocked. Further saving our precious green belt (in this case, a former quarry next to a dual carriageway).

I think this is also where it clashes with the rhetoric and left attack on the Tories. It's, as you say, inertia. It's a government that's done basically nothing. And my slight worry is that I do think there's something to the centre-right argument that a lot of this is basically about restrictions on supply and vested interests - and I'm not fully sure Labour (or the left more generally) is prepared for that. 

But I would go slightly further and say that I think a lot of this basically goes for almost all of Western Europe - I think you see this in the situation of banks pre and post-financial crisis (to which the UK was particularly exposed), energy and its impact on industrial policy (where Germany is particularly exposed). And I think there's a lot to Macron and Thierry Breton's critique (in the context of the AI Act) that Europe congratulates itself as being the first to regulate and a "regulatory superpower", when it should be more concerned that there's basically no big European companies in those sectors. It's often the way where I find myself basically agreeing with  Macron's analysis and proposed possible solution, but am very much doubtful of his method of delivering on them (two hour speeches designed to annoy and provoke the Germans ).

[Sheilbh]

Separately just on the D-Day thing Sunak has now done two media appearances apologising for it - and Number 10 are putting out briefings trying to blame the civil service. Lots of conservative commentators are apoplectic about it - and piece in the Guardian on how it's just the latest thing that's really crushing morale for party activists etc.

Also see how this plays out - but journalists reporting that this is apparently coming up on the doorstep with people spontaneously raising it. There are also rumours from the pollsters that it's showing up in a significant way in polls being conducted now.

As I say I think it's something that will definitely cut through and all other parties are making hay. Starmer's able to go "more disappointed than angry" about it. Labour aren't directly attacking but, for example, Angela Rayner doing an event with veterans today to make the point. In part Labour don't need to attack because Farage is in the race and, as you'd expect, absolutely feral on it.

[Jacob]

Yeah... like D-Day is still something that pretty much the entire nation (whether the US, UK, or Canada) can gather around and agree is heroic, admirable, important to the nation. No matter how you feel about foreign policy or the military or politics, most folks can agree that those veterans deserve to be honoured and that D-Day was of huge significance.

It's pretty foolish to treat it as just another random calendar appointment to be shuffled around or ignored if something "more important" comes up.

[Sheilbh]

I'm not watching tonight's "debate" because it sounds awful. But just saw a clip that sums up the problem for the government after 14 years.

Penny Mordaunt for the Tories was attacking Labour on tax. Angela Rayner first of all said that figure was a lie but then pointed out that the Tories have raised taxes to their highest level in 70 years. Mordaunt: "yeah - we have! And we've hated putting taxes up"

[Syt]

https://fortune.com/europe/2024/06/06/uks-super-rich-panic-mode-fleeing-the-country-shelter-money-from-election-hit/

The U.K.'s super-rich are in 'panic mode' and are fleeing the country to shelter their money from election hit

Wealthy people in the UK, from foreign billionaires to City of London bankers, are rushing to shelter their money after Prime Minister Rishi Sunak surprised the country by calling a summer election.

Some are cashing in investments, paying off bills that may soon rise or leaving the UK entirely, according to interviews with more than two dozen high-net-worth individuals, who asked not to be named, and wealth advisers.

The ruling Conservatives and the opposition Labour party have both pledged to scrap preferential tax treatment for non-domiciled residents — rich foreigners living in the UK, also known as non-doms. Labour leader Keir Starmer has additional plans to tax the wealthy and polls show his party more than 20 points ahead.

"I have had previously hesitating clients go into panic mode," David Lesperance, a Poland-based tax and immigration adviser for the ultra-rich, said on Sunak calling the July 4 vote. He "pulled the pin on the election grenade."

The UK was expected to lose a net 3,200 high-net-worth individuals last year, the most in Europe and double 2022's level, citizenship advisory firm Henley & Partners estimated. Britain's reputation for legal and political stability has been rocked by the upheaval of Brexit and the chop-and-change of five different Tory Prime Ministers since 2016.

As well as losing ground to popular territories for the well-heeled such as Monaco, Dubai and Switzerland, it has also had to compete with European neighbors like Italy and Greece, which rolled out programs to lure wealthy foreigners. The UK scrapped its so-called golden visa program in 2022.

"It will be a serious, and entirely avoidable, misstep if these changes proceed as announced," Dominic Lawrance, a London-based partner at global law firm Charles Russell Speechlys.

Labour also wants to add taxes on private equity professionals and private school fees. As part of its non-dom proposal, it aims to remove inheritance tax exemptions for overseas assets held in trust structures. The idea of this major change has helped push up the price of insurance to cover possible levies on wealthy estates.

Notable non-doms

Non-dom status dates back to 1799, when it was introduced to protect colonial investments. Recent notable non-doms include former HSBC Holdings Plc Chief Executive Officer Stuart Gulliver and onetime Conservative Party Deputy Chairman Michael Ashcroft.

Sunak's wife, Akshata Murty, was also revealed in 2022 to benefit from the status. After a media storm, Murty said she would pay UK taxes on her global earnings, partly derived from Indian software giant Infosys Ltd.

Labour leaders have previously estimated they can raise about £3 billion ($3.8 billion) from scrapping the regime, echoing recent academic research that predicted fewer than 100 wealthy foreigners with the status would subsequently leave the nation.

The number of non-doms is already declining, falling by almost half to 68,800 in the decade to 2022, partly through an earlier change in the rules to stop individuals using the benefit permanently. Still, those retaining the status pay more than £8 billion in British taxes a year, according to latest official data.

One City law firm has received more than three-dozen enquiries related to non-dom changes in the past few months, ranging from multibillionaires to centi-millionaires, according to people familiar with the matter. One individual has now left for Switzerland, while another is preparing to move to Italy, the people said, who asked not to be identified as the details are private.

One London-based former hedge fund manager originally from outside the UK is moving to another European nation, partly due to frustrations over the political direction of both main parties. Another ultra-rich UK national with property investments is similarly considering ways of switching from living full time in the UK to only three months a year, with the balance spent between low-tax territories such as Dubai and Monaco.

Simon Goldring, a tax and trust adviser for the ultra-wealthy at global law firm Ogier, said he has a handful of live cases of British residents wanting to relocate overseas, mostly from UK nationals frustrated with taxes hitting post-war highs.

"They're fed up," added Goldring, who himself relocated to Dubai last year from the UK. "It's a sad indictment."

Before the 2019 election, the threat of left-wing Labour leader Jeremy Corbyn helped prompt some of the UK's richest individuals to exit. Jim Ratcliffe, billionaire founder of chemicals giant Ineos, has said it was a factor in his relocation around 2018 to Monaco, where residents don't face income or capital gains taxes.

Starmer, though, has made more of an effort to appeal to this demographic. Iceland Foods founder Malcolm Walker and former JPMorgan Chase & Co. executive Charles Harman were among 120 business leaders who signed a Labour-backing letter last week.

For the "mass-affluent" cohort of Britons, the election has accelerated demand to future-proof their finances, according to wealth advisers.

While neither party has published their manifestos yet, Starmer has said he'd impose a 20% value-added sales tax on private school fees to raise £1.7 billion for the state school system. That's making some deep-pocketed parents consider paying years of fees — which can run to £65,000 annually — to avoid that extra cost.

"I've got friends in this scenario," said Ben Yearsley, investment consultant at Fairview Investing in Bristol. They "are looking at pre-paying two years' worth," he added.

The UK's political swings are also putting off wealthy foreigners coming to the country.

One high-net-worth individual from the Middle East, who asked to remain anonymous, has canned plans to relocate with his family from Monaco to London as his children approached schooling age. A wealth manager for billionaires said clients are pulling back UK investments for now, especially in the real estate sector often favored by the super-rich.

Lesperance, a former non-dom in Britain during the late 1990s, said one billionaire client's trust holdings would increase his UK inheritance tax liability more than 1,000% to about £400 million due to Labour's non-dom reforms.

"We're fueling up the engines," he said. "And we've got our landing permission."

[Valmy]

Were they under the impression the Conservatives would never lose an election ever again?

They are fed up, it is a sad indictment, and nothing has even happened yet.

Besides are you really going to beat places like Monaco and Dubai when it comes to kissing the ass the super rich?

[Josquius]

Britain is never going to compete with Switzerland, Dubai or microstates when it comes to being a tax haven.

If they care that much about their money they'd rather live in some Swiss village or god forsaken plastic hell scape in the middle east rather than getting to keep living their fancy pants life in London, then so be it.

Sounds to me like the same old myth that comes up every time anyone talks about taxes on the rich. Trickle down economics is definitely going to start working soon.

[Sheilbh]

Yeah I mean all of the quotes in that are from immigration experts and city law firms selling their services

I am basically okay with 70s style tax evasion - if you've got to go and live in Monte Carlo or Switzerland. But with all the off-shore and tax sheltering corporate structures so you can live anywhere (especially with non-dom regime which makes sense in a less globalised era), then fuck'em. You want the upside of living here, then pay your taxes.

The private school thing is very funny too - various right wing papers in meltdown mode and even the Guardian doing an article on people who are left wing but send their kids to private school so feel guilty and concerned about the tax

It is something I always think with our press. Basically everyone in the UK uses the NHS - and I think the way it's covered in the media broadly reflects that. But media is incredibly dominated by private school educated people who also send their kids to private schools - and I think their coverage (even, or perhaps especially, the Guardian and other lefty papers) of education also reflects that...

[Richard Hakluyt]

Yeah... I can get behind the fuck em sentiment 

Such slaves to their money that they end up living in a ghetto rather than a world city 

[Jacob]

Can someone explain what is lost from their money being moved off shore in response to potentially being taxed more? If it's not being taxed significantly as is, does it matter that it's moved off-shore?

Or are folks anticipating that the loss of tax revenue from off-shoring will be significantly larger than the additional revenue collected from increasing the tax on whatever is not off-shored?

[Josquius]

Can someone explain what is lost from their money being moved off shore in response to potentially being taxed more? If it's not being taxed significantly as is, does it matter that it's moved off-shore?

Or are folks anticipating that the loss of tax revenue from off-shoring will be significantly larger than the additional revenue collected from increasing the tax on whatever is not off-shored?

Sounds like they're moaning that the 0.1% tax they actually pay will be lost if we try to make them pay what they actually owe.
Not in this article but they usually moan about trickle down economics being a real thing too. These oligarchs may not be paying taxes but think of all the jobs they're supporting with their lifestyle!

[Valmy]

I would certainly support whoring yourself out to the oligarchs if it ever seemed to work out.

I mean look over at Ireland. They basically do whatever those big rich corporations want and while it makes their numbers look good, it never seems to ever make its way to the average person.

[Sheilbh]

I mean look over at Ireland. They basically do whatever those big rich corporations want and while it makes their numbers look good, it never seems to ever make its way to the average person.

Yes and no.

There are absolutely issues with it (and it's not just tax attracting those corporations) but life for the average Irish person has been absolutely transformed in the last 50-60 years.

It was a very protectionist, autarkic, agrarian society that was desperately poor and exported its young within living memory.

Edit: Although despite that description of Dev's Ireland, I think de Valera is desperately underrated nowadays

[Valmy]

I mean look over at Ireland. They basically do whatever those big rich corporations want and while it makes their numbers look good, it never seems to ever make its way to the average person.

Yes and no.

There are absolutely issues with it (and it's not just tax attracting those corporations) but life for the average Irish person has been absolutely transformed in the last 50-60 years.

It was a very protectionist, autarkic, agrarian society that was desperately poor and exported its young within living memory.

Sure. But lots of other things changed since those ancient times. Like joining Europe in 1973.

And about exporting the young, their housing crisis is supposedly leading their youth to want to leave.

But the point is that despite whoring themselves to an absurd degree and supposedly building one of the most powerful economies in the world, the common people still struggle. So is it a winning strategy? And Ireland is one of the most successful countries at sucking off the rich. Other countries do it with much less success. I am sure there are some advantages to being the Apple Corporations bitch, it just doesn't seem to get shared by the average man in the street who still has consumption levels at UK levels.

I think you just have to make peace with the fact that money is going to be smuggled out to tax havens and there is little societal advantage to becoming one. That sucks, but its just the way it is. You shouldn't set government policy trying to make the oligarchs happy. They will always find a way to pay you nothing and will offer little advantage for you sucking up to them.