The business secretary has conceded that tax hikes have sparked an exodus of rich Brits, after one of the UK’s richest people fled to Switzerland.
Peter Kyle admitted that he is “worried” that super-rich business figures such as Lakshmi Mittal feel they need to leave Britain “in order to succeed”.
“There are people starting businesses who have gone to America, actually in their droves, because they haven’t had the funding they need in this country to succeed.”
In an interview with Sky News, Kyle acknowledged that Labour tax decisions have led directly to exits from the UK.
Kyle said: “I’m not going to duck the fact that we have put up taxes, and we’ve closed some of the loopholes for non-doms.”
He added: “Some people are going to leave, because they were here for the way the old non-doms system worked.
“There are other people who are coming to this country because of the excitement in our economy at the moment.”
When speaking again to the broadcaster after the Confederation of British Industry (CBI) conference, Kyle insisted that Labour “is on the side of business”.
The business secretary said: “I accept that we need more urgency. We need more boldness, because we inherited a growth emergency. We are still in a growth emergency.”
Business chiefs wait nervously for Wednesday
Though Peter Kyle had warm words for businesses on Monday, bosses around the UK are wary that the Chancellor might well be preparing for another swoop on commercial tax hikes.
The Budget could include a tax break for innovators – at the cost of just under £1bn – to cover business purchases such as patents and licences.
Rachel Reeves is reportedly planning to announce plans on “fixing” cliff-edge business rates that make small businesses pay higher taxes upon opening a second property.
However, with relatively few levers left to pull to raise somewhere between £20 to 30bn at the Budget, this tinkering around the edges could well be dwarfed by more substantial tax raids on businesses.
CBI chief Rain Newton-Smith has urged Reeves to avoid a “Groundhog Day” Budget, that she said would amount to “death by a thousand taxes” for businesses.