Khan: wealth tax will cause exodus from UK
The ‘equity rich but cash poor’ would be unfairly hit by proposed levy to fund services, mayor warns
A WEALTH tax could unfairly affect people who are “equity rich, but cash poor” and lead to a “flight” of high net worth individuals out of the UK, Sadiq Khan has said.
The Labour Mayor of London also warned Boris Johnson, the Prime Minister, that his plans to “level up” the country could not happen at “the expense” of London and the South East.
Mr Khan also said he wanted to see more statues in London of women, black and disabled people to reflect the multicultural nature of the UK.
Senior Labour figures are increasingly talking about a new tax on assets, or a wealth tax, as a means to force the rich to pay more to fund public services.
Sir Keir Starmer, Labour’s leader, said in September he would back “a wealth tax, in the broadest sense of the word” on people’s “properties, dividends, stocks, shares” to fund social care.
However, speaking to today’s edition of Chopper’s Politics podcast, Mr Khan warned about “unintended consequences” from imposing such a tax on people who might be “equity rich, but cash poor”.
While he accepted that those “with the broadest shoulders” should pay more, he said: “We have always got to be careful about the unintended consequences of hypothetical tax increases.”
He added: “I’m quite cognisant of the fact that it’s not me that creates the wealth and prosperity in our city, it is the small businesses, those who are innovators, those who are chief executives of big companies.
“I’m not competing against Manchester, Liverpool, Edinburgh and Glasgow, I am competing against Paris, Singapore, New York, Hong Kong. What I don’t want is flight out of London to those global competitors.
“That’s why it’s so important for our Chancellor, Rishi Sunak, to bat for our city. He needs to understand that we need equivalence to make sure we don’t have flight to Dublin, Paris, Madrid, elsewhere in Europe, Frankfurt.”
Mr Khan said he had personally warned Mr Johnson, his predecessor as mayor, that a new White Paper on levelling up – due to be published next month – must not back policies to damage the South East.
Pointing out that London contributes a net £40billion to the UK economy, he said: “The point I made to the Prime Minister was the way to make our country more equal is not to make London poorer. Levelling up should not mean dragging down London.
“You do not get wealth and prosperity created by dragging London down. We do not want to go back to the 70s and the 80s.”
Mr Khan pledged that there will be no more lockdowns this Christmas due to Covid cases, despite fresh restrictions sweeping continental Europe.
“There will not be a lockdown. It’s unforeseeable at the moment in relation to this Christmas,” he said.
He wanted to see more people back in offices on weekdays to support local businesses in the capital.
He said: “We’re getting more people back. Unfortunately, what we’re seeing is an increase on Tuesdays, Wednesdays and Thursdays, not so much on Mondays and Fridays.”
Mr Khan is in talks with Grant Shapps, the Transport Secretary, about new powers to force people to wear face masks on the Underground or face fines. British Transport Police lost powers to fine people for not wearing masks last July when most lockdown restrictions were lifted in England.
“It will give people confidence and keep the virus down, but also as we have increased footfall as we get into winter – Christmas shopping, the January sales – we want more people coming back.”
Mr Khan is in talks with the Government about a £1.7billion financial package for Transport for London over the next two years. He warned that if a deal could not be agreed by the deadline of Dec 11, services would have to be cut.
A review of statues and other monuments in London has also been ordered and Mr Khan said he wanted to see more memorials to women, black and disabled people.
“I think women have played a great role in the history of our city and our country. Where can you see them? Similarly, disabled people have played a great role in our city. People of colour. Where can you see them?”
Listen to Christopher Hope’s interview with Sadiq Khan on Chopper’s Politics podcast today