Will London tempt the New Yorkers fleeing Mamdani?

As New York’s wealthy elite weigh up the options under their new ‘democratic socialist’ Mayor Zohran Mamdani, many of them are now reported to be considering fleeing to London instead. But will it really offer them the safe harbour they are searching for? The truth is that under the Labour Chancellor Rachel Reeves and Mayor Sadiq Khan, Britain’s capital has become an even worse place to be rich than the city they are looking to get out of. 

There are plenty of reasons for American billionaires to feel nervous about the Mamdani regime. The new mayor has promised an extra 2 per cent tax on incomes above $1 million (£758,000) as well as higher corporate taxes to fund his plans for free buses and childcare. Of course, it remains to be seen whether he can make that happen. The Mayor of New York can only recommend a tax increase and needs to persuade the state legislature to agree to actually make it happen. Even so, the world’s financial capital has suddenly become far less welcoming. 

In better times, London would be a natural alternative. After all, the two cities are so similar that they used to be known as NYLon. Both are affluent, fashionable, global powerhouses in finance and media.

The trouble is, New Yorkers who don’t like the sound of Mamdani’s taxes will like London’s even less. True, there is a new four-year exemption from global taxation for people who have not lived in Britain for the last 10 years. But the ‘non-dom status’ that used to make London a magnet for the world’s mega-rich is now completely gone. New Yorkers face being taxed at 45 per cent on their income over £125,000, while New York’s top rate of state income tax of 10 per cent, on top of federal taxes, only kicks in at $25 million (£19 million) a year. New York has no inheritance taxes, while the UK levies 40 per cent over £320,000. Overall taxes are far higher in London, and it is likely to get even worse. They may soon face a mansion tax on a property they buy, a wealth tax on assets over £10 million, and an exit tax if they try and go home again. 

When they look at the numbers, it is hard to believe that many New Yorkers will actually make the switch. That is a shame. London should be perfectly placed to welcome the refugees from Mandami’s attempt to create ‘East Berlin on the Hudson’. Right now, the City could use an influx of energy and capital, and the tech hubs around Shoreditch and East London could use some of New York’s AI-driven entrepreneurial talent.

A smarter Chancellor than Reeves and a more ambitious Mayor than Khan would be finding a way of tempting New Yorkers across the Atlantic. Unfortunately that seems very unlikely to happen.