Can we blame the wealthy for leaving?
Plus: vape bans and growth failure
In today’s newsletter:
Growth figures and government failure
New vape ban
The political realignment
This week, the University of York’s Dialectic Union organised a debate on the motion ‘This House Would Introduce a Wealth Tax’. Two representatives from the Patriotic Millionaires campaign group spoke in favour of the motion, while William Yarwood from the Taxpayers Alliance and I spoke (surprise, I know) against it.
We obviously lost (you don’t ‘win’ such debates when you have unfashionable opinions), but at a respectable ratio of 49 vs 28 votes, plus a few undecided ones. Given that almost everyone seems to support a wealth tax these days, that’s not bad.
Apart from the obligatory ‘who funds you?’, it was an amicable, good-faith debate, and I’d certainly rather debate someone from Patriotic Millionaires than a Polanski-style slopulist. (Yes, that’s a portmanteau of ‘slop’ and ‘populist’. You’re welcome.)
What I noticed, though, was how little the other side had to say about actual wealth taxes. Their argument could be summarised as:
‘Public services are a good thing. Social safety nets are a good thing. Some people have lots of money. So it obviously follows that we need a wealth tax.’
Well, no, that does follow at all – or at best, it is only one possible conclusion among many. It is as if I tried to convince you to try one very particular and exotic style of craft beer by praising the virtues of beer in general.
Maybe my expectations were unrealistic. Patriotic Millionaires are a campaign group, not a think tank, or a subdivision of the Institute for Fiscal Studies, so arguably, it is not their job to cover the economics of wealth taxation in great depth. What I would have expected from them, though, is some insights into the economic attitudes and behaviours of Britain’s millionaires. But on that front, they made even less sense. On the one hand, we were told that the super-wealthy currently don’t pay taxes, because they use every trick in the book to minimise their tax obligations. A few seconds later, we were told that the super-wealthy are extremely eager to be taxed more heavily, that they cannot wait to pay wealth taxes, and that there could not possibly be any negative behavioural responses to such a tax. The strange case of the tax-dodging Dr Jekyll and the wealth tax-loving Mr Hyde.
One name that inevitably came up a few times was James Ratcliffe, the controversial billionaire who caused a storm of outrage this week with his statement that Britain had been ‘colonised’ by immigrants.
I don’t particularly care what James Ratcliffe thinks about immigration, and I don’t see why the opinion of one man has to be a national story, which requires wall-to-wall media coverage and interventions from the Prime Minister and the Chancellor. For me, the only interesting aspect of this non-story was the way the media reported on Ratcliffe’s residential arrangements.
The phrase they used was that Ratcliffe ‘changed his residence’ to Monaco in 2020. That’s an odd expression. Why not simply say that he ‘moved to Monaco’, ‘relocated to Monaco’ or ‘emigrated to Monaco’?
It’s because, for someone in Ratcliffe’s position, terms like ‘moving’, ‘relocating’ or ‘emigrating’ can be a bit misleading. Presumably, Ratcliffe already had a home in Monaco before 2020, which he already used as a secondary residence. So there was no single ‘relocation event’ in 2020 – just a rebalancing act, where he chose to spend a bit more time in Monaco, and a bit less time in Britain. ‘Changing one’s residence’ is a better way to describe that than ‘relocating’ or ‘emigrating’, because it is mostly an administrative act, where the person’s day-today life does not really change all that much.
Proponents of wealth taxes scoff at the idea that wealthy people will emigrate if you introduce a wealth tax, because they think of ‘emigration’ as a drastic event, which completely changes the emigrant’s life. Of course, if ‘emigrating’ means ‘leaving everyone and everything behind, and starting from scratch in a new and unfamiliar place where you may not even speak the language’, then no, that’s not something you would do just to save a few quid in taxes. But if you have a second home somewhere where you already feel at home, where the fiscal situation is a lot more attractive than here while public services are at least as good, where the weather is nicer, and where the climate of opinion is less hostile to you – can you honestly say that you would not be tempted to spend a bit more time there?
Kristian Niemietz
Editorial Director
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IEA Podcast: Director of Communications Callum Price is joined by Director General David Frost and Editorial Director Kristian Niemietz to discuss the growth figures, Andy Burnham’s latest speech, and Oat Milk… - IEA YouTube
Growth figures are an ‘utter failure’ for government
Responding to the latest GDP figures, Lord Frost, Director General of the Institute of Economic Affairs, said:
“Whatever the government’s growth strategy may be, it isn’t working. The economy has virtually stalled since the spring. And GDP per head is falling again: if you feel poorer, it’s because you are.
“This is an utter failure for a government that is so vocal about prioritising growth. They need to act quickly to turn this around. That means at the very least to stop sliding in the wrong direction with growth-damaging measures like business tax rises and the Employment Rights Act. The tax and spending burden needs to fall, and massive deregulation and supply-side reform is required to unlock our economy and get Britain growing again.”
Read Callum Price’s three takeaways from the figures:
3 takeaways from the GDP figures
Today’s growth figures make for familiarly depressing reading. The UK economy grew by just 0.1% in the final quarter of 2025, the same anaemic rate as the previous quarter. Overall the economy grew by 1.3% in 2025. But GDP per head fell for a second consecutive quarter. If you feel poorer, it is because you are.
Watch Lord Frost and Kristian Niemietz discuss the growth problem on the IEA podcast:
News and Views
Jesus Armas, our former intern and a pro-freedom and democracy activist in Venezuela, was released from arbitrary detention this week
Government is set to ban people from vaping in their own cars if children are present, Christopher Snowdon quoted in the Daily Mail
Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, told the Daily Mail: ‘Expanding the ban on smoking to also cover vaping in many places is a ridiculous, draconian move.
‘There is no scientific justification for banning vaping, as the water vapour doesn’t harm anyone. A private car is about as private a place as you can get and it should be for the owner to decide whether they want to vape or let other vape in their vehicle.
‘Likewise, if landlords want to ban customers vaping in their pub, that should be a decision for them to take and they can let customers choose whether they want to drink there or not.
‘An enforced nationwide ban risks sending vapers back to smoking - many will have switched to vaping as it allowed them to stay inside, but if you’re going to be forced outside to the smoking area, you might as well smoke. This is another attack on the hospitality sector.’
Listen to Chris on Radio 2:
Britain is heading for its John Galt moment, Lord Frost writes in The Telegraph
“The economy has basically stalled since April. That’s hardly a coincidence, since that’s when the first round of tax and National Insurance increases hit us. Since then confidence has spiralled down, spooked in particular by the prospect of the dreadful Employment Act. So the economy overall has grown just 0.2 per cent since mid-year. Worse than that, GDP per head, which is what really matters, is once again falling, back down to where it was three years ago. So if you feel you’re not getting any better off – you’re right.”
Andy Burnham is right about the bond markets, but his solutions will only make things worse, Callum Price writes in ConservativeHome
On ‘Patriotic Millionaires’ - do rich people really want higher taxes? Asks Kristian Niemietz, IEA YouTube
How “smoke-free” went up in smoke, the campaign against vaping has been miserably counter-productive, Chris Snowdon writes in The Critic
The great political realignment, Lord Frost and Steve Davies discuss the new right, IEA YouTube
Why life is so unaffordable in Britain, Lord Frost quoted in The Telegraph
“Normal economic activity is slowly being squeezed to death by the state,” noted Lord Frost, director general of the Institute of Economic Affairs.
Some countries have drunk the Kool-Aid on Net Zero, Lord Frost speaks on the British Thought Leaders Podcast