One of Britain’s richest men has warned that Labour’s plans to target wealth and increase corporate taxation risks scaring away businesses and investors to the detriment of the wider economy.
Surinder Arora, worth an estimated £1.129bn, is one of a handful of self-made British billionaires.
He arrived in the UK from the Punjab aged 13 and worked as a clerk, a wine waiter and an insurance salesman before founding the Arora Group, a hotel and property business that today has more than 3,000 employees.
Mr Arora, who has supported Labour and the Conservatives in the past, told Sky News that many businesses and wealthy individuals may leave the country if Jeremy Corbyn becomes prime minister.
“If you want big businesses to come and bring money in, then you want to hold on to them as well, and to grow and succeed,” he said.
“If you’re going to scare businesses, multinationals, all the big companies and billionaires and other people, if you give out the wrong message, then what do they do? In this day and age, people just pack their bags and say, I’ll go somewhere else and invest my money elsewhere. Do we really want that as a nation? I think that’s wrong.”
Mr Arora said Labour is wrong to describe the existence of billionaires as a “policy failure”.
“It has to be a success, it’s not a failure, because those billionaires haven’t sat in their front rooms and just printed the cash, they’ve worked for it,” he said. “They’ve created employment, they’re adding to the economy, they’re adding and paying taxes, that’s all helping everyone else, so why should we be looking at that in a negative way?”
Labour has promised the most radical transformation of corporate ownership and taxation since the war, describing billionaires as a “policy failure” and singling out individuals including Sir Richard Branson and Mike Ashley as emblematic of the inequality it seeks to address.
:: Listen to Campaign Unwrapped on Apple Podcasts, Spotify, Google Podcasts, Spreaker
Under Labour’s plans, income tax for everyone earning more than £80,000 will increase, and capital gains tax, charged on the sales of assets like property and shares, will rise to the same level in an attempt to tax wealth more effectively.
The policy has drawn predictable criticism from the Conservatives, and scepticism from independent observers including the Institute for Fiscal Studies, which questions whether such narrowly targeted increases will generate the revenue Labour is predicting.
The Confederation of British Business also warned that policies including the appropriation of 10% of all large companies into employee trusts will “set alarm bells ringing” for businesses.
Labour’s transformative program, championed by shadow chancellor John McDonnell, does have support among some economists however.
Danny Blanchflower, a former member of the Bank of England’s monetary policy committee, was among 160 signatories to a supportive letter to the Financial Times this week.
James Meadway, a former policy adviser to Mr McDonnell, says that Britain’s yawning inequality demands a greater redistribution of wealth, including raising wealth taxes to match those on income.
“The issue with billionaires is that in Britain, like across the rest of the world, we have a very, very unequal society, so there’s a few people right at the top with enormous concentrations of wealth,” he said.
“If you just go out to work, you pay an income tax rate of 20% or 40%. If you’re selling assets, which very rich do a lot, you pay half the rate of tax, so one option is to simply equalisers two rates of tax.
“That’ll get you a fair bit of money, that starts to change the balance of the tax system, so instead of taxing income, which is what most people make, or wealth which most people don’t really have very much of, it is shifted back in favour of wealth.”
Source: Read Full Article