Labour’s continual pessimism about the UK economy may be more damaging than the £22 billion deficit they inherited, warns a financial advisory service boss.

The stark warning comes from deVere Group’s Nigel Green who says: “With the looming spectre of ‘hard decisions’ and fears of brutal tax reforms in the upcoming Budget, the messaging from the new government is not just grim—it’s threatening to drive away the very people and businesses that are crucial to economic growth.

“High-net-worth (HNW) individuals, job creators, and tax-paying contributors are considering leaving the UK, not out of disloyalty, but out of sheer necessity.  And this is before Labour has even formally introduced its much-feared tax hikes. 

“Talk of increasing National Insurance contributions—in essence a jobs tax —capital gains tax, inheritance tax, higher fuel duties, and potential raids on pension savings is sending shockwaves through both the domestic and international business community.

“Instead of instilling confidence and fostering a positive outlook on the future of the UK economy, Labour’s messaging has achieved the opposite. Their relentless focus on what they call an economic black hole has undermined faith in the UK’s prospects, leaving investors wary and businesses feeling cornered.”

He says Labour’s plan to increase capital gains tax and inheritance tax may appeal to the party’s base, but in practice, these are regressive. 

Green adds: “Investors, both large and small, are crucial to the health of the UK economy. By raising capital gains tax, Labour is discouraging investment in UK businesses, property, and new ventures. Why would investors choose to place their capital in a country where they’re penalized for growth, when other markets are more welcoming?

“Likewise, raising inheritance tax is a surefire way to drive HNW individuals out of the country. These are people who contribute significantly to the UK economy, not just through taxes but through charitable giving, investments, and job creation. The prospect of leaving a larger share of their estate to the government rather than their family is enough to prompt many to relocate to more tax-friendly jurisdictions. 

“The result? A brain drain of talent and wealth that could have been used to drive UK growth.”

He says that growth comes from innovation, entrepreneurship, and investment — none of which can thrive in a hostile environment. Businesses need stability and predictability, not the threat of higher taxes and more red tape, he insists

“The law of unintended consequences is at play here, and unless Labour course-corrects soon, they may find themselves presiding over an exodus of talent, wealth, and investment—leaving the UK’s economic future far darker than it needed to be”.