Old Labour Is Back After All

Ten days ago, I opined the following in the wake of Northern Rock’s nationalisation:

The Brown government’s decision to nationalise Northern Rock takes us back to the days when Labour governments in the UK were wont to nationalise just about everything that moved–literally in the case of British Rail and British Leyland…If the Brown government allows this kind of mentality to spread to other aspects of policy (especially taxation,) they will oversee the running down of the UK as they did following World War II, as capital goes elsewhere.

It hasn’t taken long for the markets to figure this out:

The collapse of Northern Rock and the proposed tax crackdown on non-domiciled residents are making the UK less attractive to overseas businesses, according to the City of London Corporation, which commissioned the survey.

A separate survey, also commissioned by the City, said the UK tax system had lost its competitive edge over other financial centres. The UK had become increasingly unpredictable and uncertain, complex and unnecessarily aggressive in its approach to taxpayers, it found.

Thursday was the last day for submissions to the Treasury on the government’s plans to charge non-doms £30,000 a year if they wanted their overseas income to remain outside the UK tax net after seven years’ residence.

City leaders have already warned that the proposals, which include a crackdown on offshore trusts, will provoke an exodus of foreign investors and professionals who have contributed to its pre-eminence as a financial centre.

It’s also a salutary warning to those on this side of the Atlantic who would advance an "Old Labour" agenda over here.

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