Liz Truss blames high UK taxes for British exodus to Dubai

Dubai: High taxes in the UK are one of the main reasons so many British citizens have relocated to Dubai, former prime minister Liz Truss said, arguing that years of policy failure have eroded growth, competitiveness and living standards across Britain and much of Europe.

“One of the reasons there are so many British people in Dubai now is because our taxes are so high,” Truss said during a fireside chat at the World Governments Summit, framing the shift as a direct response to economic pressure at home rather than lifestyle choice alone.

Truss said the UK’s economic challenges predate her brief premiership, pointing to three decades of stagnation, rising debt and declining productivity. She drew a comparison with the US, where per capita GDP has surged ahead.

“In 2000, British GDP per capita was roughly the same as the US,” she said. “By 2025, their GDP is about 50% higher per capita.”

Energy policy, she argued, sits at the heart of that divergence. UK energy prices, she said, are among the highest globally due to restrictions on domestic oil and gas production and the cost of net-zero policies. “Their energy prices are a quarter of what they are in the UK,” she said of the US, adding that high costs damage manufacturing and emerging sectors such as artificial intelligence and crypto.

Truss defended the controversial mini-budget of 2022, rejecting claims that it alone triggered market instability. She said the spike in government bond yields stemmed from weaknesses in pension fund regulation and actions taken by the Bank of England.

“The reason there was a spike in gilts in 2022 was because of the LDI (Liability-Driven Investment)crisis,” she said, noting that a 2024 Bank of England report later acknowledged the issue. She added that interest rates were rising globally at the time, compounding the shock.

She argued that the abandonment of her proposed tax and energy reforms has since left Britain worse off. “Every single metric has got worse,” she said. “Debt is higher. Unemployment is higher. Growth is lower.”

Truss warned that mounting public debt remains the most underestimated economic risk facing governments, particularly in Western Europe. She pointed to debt levels nearing 100% of GDP in the UK and mounting strain in France, Japan and the US.

“We have been living beyond our means,” she said. “We have not been generating the productive capacity. We have been consuming and growing debt.”

She said governments face political resistance when attempting to shrink the state quickly, making private-sector-led growth essential. “You have to outrun the debt,” she said, calling lower taxes, deregulation and cheaper energy critical to that effort.

On global trade, Truss rejected full economic decoupling from China but urged greater caution, citing examples of trade retaliation against Australia. She said countries should diversify partnerships while remaining mindful of geopolitical risk.

She contrasted that approach with the UAE’s strategy of staying open and expanding trade ties globally, a model she acknowledged has delivered results. Still, she warned against overdependence on any single partner, arguing that leverage comes from choice and resilience.

Truss said current policies are failing working and middle classes across Western economies, with industrial decline and financialisation hollowing out productive sectors. Without a shift toward growth, she warned, pressures driving migration and capital outflows would intensify.