Every inch of our economy is now owned by some faceless fund. All serious capital generated in the country is extracted out into the pockets of fund managers and Californian pensioners.
We're screwed until we can stem the outflow. I always thought taxing money leaving the country might be interesting way to approach the problem.
> taxing money leaving the country might be interesting way to approach the problem.
This would end very poorly because what the U.K. sorely needs is investment (to create new productive capacity). For example, Americans invested huge sums in North Sea oil and created an entire industry (before we destroyed it). Conversely, if you force people to keep wealth in the country then you just make things more expensive: they will bid up the price of property and the like. Nothing is added to the UK’s real economy by increasing the number of pounds flowing around in it - it’s only helpful if it’s invested. So what you actually want is tax breaks for foreign investment, but with some kind of ownership cap.
There's been enough in the way of tax breaks and "derisking". A huge part of the problem with our public finances is being on the hook for some very ill-advised "investments".
The money going out exceeds the money going in, because that's what an investment is. An opportunity to make money.
What the UK desperately needs is actual shareholder capital actually being invested into British companies, so that they can create new wealth. They are welcome to take a share of the wealth they create! Everybody wins!
Even China with extreme capital controls and pervasive surveillance can't stop money leaving the country. Unless the UK was willing to go fully authoritarian and ban its citizens from spending money overseas, and ban crypto (and build all the internet firewall/DPI infrastructure that doing so would require), it wouldn't stand a chance. And attempting to do so would destroy the value of the pound, because nobody with any options would want to hold a currency that could only be spent in the UK.
What I see is every national asset, every successful company, and increasingly land and housing sold to (typically overseas) capital, with the proceeds sucked offshore.
Whether it's new housing in London, ARM, the water, the electricity, most products and most supermarkets: the beneficial owner is outside the country, being largely taxed outside the country, and spending their money outside the country.
We're discussing this in the context of a deeply dysfunctional Britain. If the "wealth creation" route were in any way effective, we'd be in a very different place right now. There's been concensus among pretty much every party in my lifetime around supporting "growth", "investment", number go up. It's clearly not working for most of us. Everyone but a select few in this country is living on the edge.
I personally see a major component of our malaise as the rentierism practiced by largely foreign interests throughout our economy. Alternative explanations are welcome, but it's hard to see how we'd be worse off without the vampire squid up each and every orifice.
Capital controls. By the time they are applied it's always too little, too late, and they only ever apply to the plebs -- the wealthy always have ways to move money out (and back in, later -much later-, if it becomes necessary or advantageous). Always too little too late because -I suspect- capital controls don't really work -- not against the wealthy.
> There's been consensus among pretty much every party in my lifetime around supporting "growth", "investment", number go up.
Yes most U.K. governments have talked about fine talk but other than Thatcher, failed to actually deliver on securing enough investment. It’s not that the investments are bad, it’s that they have been decreasing for 25 years:
https://www.economicsobservatory.com/boosting-productivity-w...
It’s funny that you mention ARM because it was created under Thatcher back when the U.K. was willing to start businesses. Yes it should never have been sold.