Britain's Brain Drain: Professionals Flee High Taxes

The number of Brits leaving England for new lives abroad has risen sharply over the past 20 years, according to new research undertaken for the UK Home Office.

The number of Brits leaving England for new lives abroad has risen sharply over the past 20 years, according to new research undertaken for the UK Home Office.

New statistics show that around 149,000 Brits emigrated last year, leaving the UK for the United States, Australia, and Canada, among other destinations. Commentators, however, are more alarmed that almost half of Britons emigrating each year are professionals and company managers, "potentially threatening the country's supply of highly skilled workers," as one writer put it.

Britain's high rates of income tax, alongside an increasing cost of living and slow economic recovery, are seen as key factors in the sharp increase in professionals leaving the country. John Cridland, director general of the Confederation of British Industry, one of the UK's leading independent employers' organizations, agrees that taxation is an issue, but believes that a remedy is imminent. "These are disturbing figures, there is no doubt that the spike in recent years was due in part to high personal taxes, which the Chancellor is now tackling." 

Yet scholars at the free-market Adam Smith Institute are less optimistic. They suggest that as income tax levels have risen above those of their European neighbors, the UK's competitiveness and economic growth will be stifled over the coming years. In a new report, the Institute's Peter Young and Miles Saltiel highlight the extended consequences of the tax burden, showing how it's leading not only to the emigration of young professionals but also to the flight of entire companies. In the report, Stephen Hedgecock, the managing partner of Altis, a hedge fund that recently moved from the UK to Jersey, an independent island just off the British coast known for its status as a "tax haven," argues:

The UK model is broken. It's not just the 50% rate- its National Insurance, the treatment of pensions…everything. It's just a ridiculous amount of taxation.

Speaking on the findings, a Home Office spokesman recognized the necessity of making the UK an attractive place to live and work in order to retain talented British workers. "To continue competing in a global race, businesses must invest in the skills of UK workers and retain our highly skilled workforce." The harsh reality of the UK tax system has meant that talented workers can find considerably more attractive employment offers elsewhere in the world.