That brain drain

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Paul Sagar, who blogs at Liberal Conspiracy, has more on the brain drain that the Right claims will happen as a result of the 50% higher rate tax. He says:

For a Brain Drain to happen and be meaningful, two things are required. Firstly, a significant number of people must leave the country, and secondly, that significant number of people must be irreplaceable.

It’s worth questioning whether 25,000 really will leave. After all, leaving friends and relatives behind, abandoning one’s cultural attachments to a place one has lived in for potentially many years, and all in the name of not incurring an extra 10p of tax in every pound over the ¬£150,000 mark - well it’s a little extreme, isn’t it? And remember, it’s a lot easier to tell a journalist or pollster that you will leave the country, and a lot harder to actually do so.

Precisely. Remember the non-doms were the last to use this threat. And there is no evidence at all that they have gone.

But let’s also look at the second issue. Are they irreplaceable? Hugh Osmond is one of those who has been saying he’ll go. I noticed this on Bloomberg:

Pearl, the manager of closed life funds owned by Hugh Osmond’s Sun Capital Partners Ltd. and TDR Capital LLP, angered investors last month by not paying interest on 500 million pounds ($736 million) of bonds, citing the need for “an increased level of prudence.” Pearl said it would meet with bondholders on May 6.

I noticed that in the London Evening Standard last night they called this a default. Whether or not true, skipping an interest payment to those who funded your business acquisition does not look good. I don’t think it would be prudent for most people to do so to their bank.

Can we be sure in that case if this is irreplaceable behaviour, or is it the behaviour we wish to replace? And are those making the threats indicative of the mindset that got us into the mess, just as many of the non-doms were?

I leave you to ponder that one.