Market News

The majority of rich people who backed Labour at the election now regret it, according to a new poll.

Two thirds of high net worth individuals (HNWI) who voted for Sir Keir Starmer’s party last July now wish they hadn’t, a survey from wealth manager Saltus has found.

Policies that have shattered faith in Labour include changes to inheritance tax, the addition of VAT – at 20pc – to private school fees and an increase in employers’ National Insurance contributions, which has pushed up staffing costs for business owners.

A poll of 2,000 people, each with more than £250,000 of investable assets, found confidence in the economy had plummeted among this group since the election.

The percentage of wealthy individuals who are confident in the economy’s prospects has plunged from 84pc in August, a month after Labour’s election victory, to 48pc today – a record low.

Mike Stimpson, a partner at Saltus, said: “The extent to which the confidence of high net worth individuals has collapsed demonstrates a missed opportunity for the new Government, who had high levels of support when they came to power and drove the highest levels of HNWI confidence in the UK economy we have ever recorded.

“Confidence is a critical component in growth, and the fact that this vitally important group of people – the wealth creators, employers and investors in the businesses of tomorrow – feel that the UK economy is not on the right track is a cause for concern.”

Labour campaigned hard to win over the wealthy at the last election, with promises not to raise key taxes and a vow to focus on economic growth. Sir Keir claimed his was “the party of wealth creation” in Labour’s manifesto.

It paid off as donations flooded into Labour’s coffers. Big backers include Gary Lubner, the former chief executive of Autoglass’s parent company, who donated £4.5m to the party before the election.

More than one third of the country’s HNWIs eventually backed Labour, according to Saltus.

Mr Stimpson said: “It can be described as a protest vote. The Conservative Party had really lost the confidence of many, but not all, high net worth individuals. The famous Liz Truss mini-Budget really was damaging.”

However, optimism has “disbanded at an absolute rate of knots” in the wake of the Chancellor’s October Budget, which raised taxes by a record amount.

The wealthy fear worse is to come: more than eight in 10 think the Government will increase taxes further in the coming year. They believe capital gains tax, income tax and inheritance tax are most likely to rise.

As a result, one in 10 is considering permanently leaving the UK, Saltus said. Britain lost 10,800 millionaires to overseas countries in 2024, according to the Adam Smith Institute, more than double the number who left in 2023.

High-profile exiles include Charlie Mullins, the self-made entrepreneur who founded Pimlico Plumbers and left Britain for Spain “as soon as Labour won the election”.

The exodus of the wealthy has forced the Government to reverse course on a planned tightening of the non-dom tax regime. Rachel Reeves announced changes that will make it easier for non-doms to bring money instantly to the UK last month.

Speaking at the World Economic Forum in Davos, Ms Reeves said the aim was to keep more wealth in Britain: “We’re always interested in hearing ideas for making our tax regime more attractive to talented entrepreneurs and business leaders from around the world to help create jobs and wealth in the UK.”

A continued exodus of the wealthy would hammer the economy and the Chancellor’s tax take. The top 1pc of earners currently pay almost 30pc of all income tax, so driving the rich out of Britain has a disproportionate impact on the public finances.

One wealthy Labour supporter who does not regret voting for the party is Dale Vince, the green energy tycoon who gave £5m to the party ahead of the election.

Mr Vince told The Telegraph in October that rich people threatening to flee Britain to avoid tax rises should “f--- off”.

A Treasury spokesman said: “At the Budget, we made the difficult decisions needed on tax to fix the foundations and increase investment in public services and the economy, to rebuild Britain and unlock long-term growth.”