As Scotland’s pretty moderate taxation changes begin, the Telegraph launches into one more of the ‘brain drain’ stories we’ve heard for a decade now. Sometimes selfish bar stewards shout that they’re off but then later, never do.
So-called experts predict an actual movement of large numbers of well-paid professionals but the evidence is never published in even the lowest impact academic journals.
It’s just another classic moral panic, a teeny phenomenon amplified by media and ridden by a few journalist who care little for facts.
The headline cries out ‘How Nicola drove’ but by the opening line of the text, it’s ‘Scotland is risking an exodus.’
In the third paragraph, we hear ‘Experts warn Scotland could see many of it’s top-earning workers move south’, but then, only in the final paragraphs does he not offer the actual evidence with ‘the SNP risks creating a ‘brain drain’ across the border.
Once more they have nothing.
If the Telegraph’s expert has no actual evidence from any previous brain drain, might that mean there is none?
There is, globally, some evidence that such drains don’t exist.
I’ll come to that but first, why would top-earning professionals flee the very place in which they’ve managed to get a top-earning job? Second, would they flee to a place where their children have to pay tuition fees, where their parents have to pay heavy prescription charges, where the crime rate is twice as high or where the local health service is far less functional?
Think about it.
Evidence?
In October 2022, we saw this:
Predictable as clockwork, tax increases in Scotland are being touted by the not-so-brainy journalists we have to suffer here, as risking a ‘brain drain.’ Were there such a thing in the Express or in most other Scottish Unionist newspapers (SUN), would we notice? I think not.
In January 2019, I spent some time showing that this notion never survives a collision with the evidence (I do like that line), triggered by a report in the Scotsman. Such is my contempt for such churnalism and, of course, my intrinsic laziness, I’ll just repeat it again, below:
The Scottish Conservatives Branch’s, Temporary Press Liaison Officer, Murdo Fraser has alerted the Scotsman to a serious problem of imminent tax-flight by Scotland’s better paid individuals:
‘While many people will not have much sympathy for the decrease in higher incomes, further tax increases could push this income bracket to leave and deny Scotland any tax take. However, the SNP tax hikes will also charge middle earners more compared to the rest of the UK, which, after such small wage growth, seems punitive.’
Fraser seems to have been unable to include factors such as free student tuition, care for the elderly or free prescriptions into his overall assessment of the tax burden in Scotland.
The Scotsman has, unusually [:-)], failed to undertake any proper background research to establish the basis or lack of basis for Fraser’s claim.
However, a US study of every million-dollar earner, reported in the Guardian in 2017, does not support him:
‘Only about 2.4% of US-based millionaires change their state of residence in a given year. Interstate migration is actually more common among the US middle [working] class, and almost twice as common among its poorest residents, who have an annual interstate migration rate of 4.5%.’
The greater mobility among the poorer residents, reflects the lack of welfare benefits and worker protections in the US compared to those in Scotland. Even the low-level of mobility of millionaires in the US may be higher than we should expect in Scotland given the additional pull factors here of lower crime, a more efficient health service and more attractive recreational environment than is available in England.
Further evidence undermining Fraser’s notions comes from Forbes, also reported in the Guardian in 2017:
‘Analysis of this list shows most of the world’s billionaires – about 84% – still live in their country of birth. And among those who do live abroad, most moved to their current country of residence long before they became wealthy – either as children with their parents, or as students going abroad to study (and then staying). The world’s billionaires largely live where they were born or where they began their careers. Only about 5% of world billionaires moved abroad after they became successful. These individuals readily fit the stereotype of a “transnational capitalist class” – unplugged from their nation state, travelling the world for some combination of tax avoidance and cosmopolitan lifestyle.’
So, just the word of one partisan member of a party dedicated to low-taxation is all you need for a report, ‘Scotsman.?’
The above Scotsman writer had not even researched their own reports:
Scots `brain drain’ to rest of the UK has reversed this century
The traditional “brain drain” from Scotland to the rest of the UK has been reversed in recent decades, a new study has found.
By Scott Macnab
Published 3rd Sep 2020
People moving up from the rest of the UK has boosted the population north of the border by 137,000 since the start of this century, according the Expert Advisory Group (EAG) on Migration and Population.
This has reversed the “historical trend” of Scotland being a nation of net population outflow.
Talking-up Scotland 
Scotland only benefits from people who actually want to live in Scotland , anyone who leaves Scotland because their income tax has gone up or their council tax has gone up is not missed we are well rid of such petty miserable people.
They are more suited to England which continually votes for right wing Conservative Party governments that take from the poor and give more to the already wealthy people.
Scotland is more willing to share and help those not so well off .
LikeLiked by 4 people
For people whose earnings are so high that under the Scottish INCOME taxation system they pay more than they MIGHT in England, the difference is insufficient to cause them to move their families from the communities in which they have CHOSEN to settle. In addition to things like University tuition fees there are other quality of life factors which are rated more important than money, especially when they have more than enough anyway.
In any case, as we have seen with the tax returns of Rishi Sunak, such people can arrange their tax affairs so that much of their earnings is not INCOME but dividends and other things.
LikeLiked by 4 people
Scandinavian countries have higher taxation than Scotland but there is no evidence of educated Scandinavians draining down into England.
Of course,should they try that,they might end up on a flight to Rwanda which has even lower rates of taxation than England.
It may come as news to the Anglo establishment and it’s supporters but there is a lot more to life than simply how much money you have in your pocket.
LikeLiked by 3 people
Murdo, the Daily Supress and the Torygraph now share the same intellectual space in Scotland–below the Hootsmon and Herod, but still yellow page agitprop outlets for fanciful and deranged Brit Nits.
LikeLiked by 2 people
Gavin, ye missed the Daily Fail!
LikeLiked by 1 person
I avoid the Sieg Heilers whenever I can.
Lower than Tories, Trumpists and knee creepers.
LikeLiked by 1 person
I’ve always avoided it too, but I have friends who buy it daily and they are clearly influenced
LikeLike
Great NEWS
ALL THESE BIG WELL PAID PEOPLE ARE GOING TO LEAVE
THATS FANTASTIC NEWS FOR ALL US OTHER POOR FOLK
WE CAN NOW GET A CHANCE TO GET BETTER WAGES
LikeLiked by 1 person
Excellent John. As you say this notion of mobile billionaires seldom survived a collision 💥 with the evidence (so do I).
But if it’s not actually true, where does it come from? As someone who has an Honours degree in Political Economy, I’m ashamed to say it’s Economics, and it’s obsession with maximisation. That companies seek to maximise profits (they don’t). And at the level of the individual that we seek to maximise income. Therefore if an individual seeks to maximise their income, they will want to minimise their outgoings.
That will be why so many of the most wealthy drive big fancy cars and live in huge big houses with every amenity. The answer you get if you make this point is that these things yield utility, pleasure if you like. So for instance most will derive more pleasure from driving this year’s Merc than a 10 year old Kia.
But this is the start of the slippery slope for the argument. A precise calculation can be done for income less financial costs including tax, but once you start including factors that have no numerical value you’re done. How do you compare the value of a positive life style to income tax?
So, when we see that billionaires tend not to move around to minimise their tax, there is an answer that says their life style is more important to them while tax is secondary, if that important.
The problem of non-quantitative factors is well known one. One approach, used in cost benefit analysis is to impute monetary values, so for instance if we’re looking at a by-pass for a small village, we might try to work out a financial benefit from not having heavy traffic thundering past your front door (quality of life, health etc).
How satisfactory is it? Er well. Cost benefit analysis isn’t so widely used these days.
So, this argument that the highly skilled, better paid etc will up and leave if tax goes up too high is well and truly holed below the water line by the failure to address non- quantitative factors, a problem that is well known in the profession because it bedevils it. But it’s still good for newspapers and other media whose first question is “how can we make trouble”.
LikeLiked by 3 people
As if those with loads of dosh are more likely to be more intelligent lol! Though knowing how to play the system to keep making tons of dosh is a type of intelligence I guess. My son’s IQ when he was age nine was 124, (average adult IQ) and when we were forced to home educate because Labour sent £blns back to Westminster so there was ‘no money’! for support for kids with special needs, (autism) he taught himself to speak Japanese and passed the exams with flying colours. We’re still relatively poor, though he’s an asset to the country, in my mumsy opinion.
Anyone leaving Scotland because of a wee tax rise, well, bye then enjoy prescription charges, uni tuition fees, and paying tons for private healthcare, and all that pooey water!
LikeLike
Offhand, the only one I can think of who fled was the appalling Michelle Mone, who left behind shouts of “Thank God!”
LikeLike
So far as “Telegraph experts” go perhaps we should consider the author of this absolute garbage as one “Charlotte Gifford, personal finance reporter covering tax, investments and equity release personal finance reporter covering tax, investments and equity release”, or https://muckrack.com/charlotte-gifford
There is no brain to drain from Charlotte and probably never was…
LikeLike