BORIS JOHNSON: Britain is enduring a slow-motion catastrophe, as one set of tax rises triggers the next. There's only one solution

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We Brits can be a pretty flinty-hearted lot when it comes to the sufferings of the rich. So, I don’t think there will be much lamentation at the latest news from Ferrari, the Italian makers of luxury supercars. They have radically chopped the numbers of new vehicles being shipped to Britain, says the chief executive, Benedetto Vigna – because the market is drying up. So many wealthy people are fleeing the UK, complains Mr Vigna.

He is right. They are off to Dubai, to Milan, even to Belgium. According to a controversial but increasingly corroborated study by Henley & Partners, an ‘investment migration consultancy’, the country is haemorrhaging millionaires at a rate of about 16,000 a year.

The exodus has been a disaster for Ferrari UK – because there’s only one qualification you need to possess one of these long-bonneted, red throbberchops Freudian compensation symbols – and that is a very large bank account.

The bulk of the UK population would not dream of forking out £300,000 or so on a car. So, I can imagine that on hearing there will be slightly fewer Ferraris on British roads, most people will heroically contain their grief. Most people don’t care that the non-doms are off. Most people think there are plenty more where they came from, and if they want to take off in their Testarossas to another country – arum, arum, arum, araaagh – well good riddance! Tax their cars! Tax their houses! Tax their schools! Most people instinctively support the idea of ever-higher taxes on the wealthy.

On this point, sadly, most people are wrong. Rachel Reeves constantly tells us that the burden of tax should fall on those with the broadest shoulders. Which is morally persuasive, except that many of these rich people are built like American football quarterbacks, in the sense that those with the broadest shoulders are also the fleetest of foot.

We are seeing the biggest exodus of wealth and talent from this country since the 1970s, and it is bad news for all of us. The top 1 per cent pay about 30 per cent of all income tax, and the top 10 per cent pay about 60 per cent. If they are not there, if they are not living and working in the UK, then quite simply the Government’s tax receipts go down.

Ferrari has radically chopped the numbers of new vehicles being shipped to Britain, says the chief executive, Benedetto Vigna – because the market is drying up

You must accept that having a large number of Ferrari drivers is a sign of economic health, rather than the reverse. You need people to sell these machines. You need people to fix them

Under this dreadful doom loop Labour Government, that is what is already happening, with revenues from taxes such as capital gains down by 10 per cent on the year. Even if you have some puritanical dislike (which I don’t) of people who can afford to drive beautiful Italian sports cars, you must accept that having a large number of Ferrari drivers is a sign of economic health, rather than the reverse.

You need people to sell these machines. You need people to fix them when they break down. We are talking jobs, good jobs, and when the Ferraris roar off, the jobs go too. So does the investment, the creativity. So does confidence in the whole economy.

We have unemployment at 4.8 per cent. Government borrowing costs are at a 30-year high. Growth is non-existent. Debt is so badly out of control that Britain is seemingly on the verge of going bust. All of which makes the Government’s economic rhetoric – never mind their policies – seem on the face of it so utterly bewildering.

Why does Rachel Reeves keep going on about tax? Why has she spent month after month informing us all – not just the rich – that she is coming for our wallets? She never seems to have anything positive to say, no vision for the country, no sense of why it might be a fantastic place to invest. All she can talk about is tax, tax, tax, and how much she wants to inflict pain. No wonder investment has dried up, and consumer spending has evaporated. What has got into her?

It’s very simple. As a result of a series of disastrous errors, starting with her first Budget in October last year, Labour has lost the confidence of the bond markets. The world’s bankers just don’t believe that the Government has the guts to cut spending.

They saw what happened with the big pay bungs to the public sector unions – completely unjustified by any growth in productivity. Worse still they saw how this summer the Government chickened out – despite its massive majority - and failed to cut spending on welfare.

Rachel Reeves constantly tells us that the burden of tax should fall on those with the broadest shoulders. Which is morally persuasive, except that many of these rich people are built like American football quarterbacks

Under Labour the country is enduring a slow-motion catastrophe, as one set of tax rises triggers the next set of tax rises

The invertebrate Starmer quailed before his Lefty backbenchers and U-turned on the winter fuel allowance and ended up spending even more – not less – on disability benefits. The markets have concluded, rightly, that this means this Government is too weak to cut expenditure.

This failure means the hole in the public finances is now growing fast, up to £30billion or so, and so every day. Rachel Reeves faces the threat that the global markets will demand an ever-higher price to fund Britain’s growing debt. She has only one way to calm them and stop interest rates from climbing still further – and that is to talk tough on tax. That is why we have spent the past few months cowering in advance of the budget.

It is not enough for her to raise taxes on November 26 – as she surely will. She has got herself into such a mess that she has to reassure the markets on this point every day. When the blow falls, of course, and wherever it falls – on business, pensions, homes, wherever – the next round of Reeves tax increases will further depress confidence and inhibit investment. Higher tax rates will do more damage to growth and produce lower tax yields – and the doom loop will go on.

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Under Labour the country is enduring a slow-motion catastrophe, as one set of tax rises triggers the next set of tax rises. There must be another way.

We must cut spending, and with real national resolve we can. It is simply not sustainable for the benefits bill to keep rising as fast as it has – now almost £300billion and set to hit about £400billion by the end of the decade. I just don’t believe that the mental and physical health of the workforce has declined so spectacularly in the past four years as to justify a 50 per cent increase in the size of the bill for in-work health and disability benefits – now about £50billion.

Too many people are simply having a laugh. I don’t believe that we need about 6.2million people on the public sector pay roll, when we had about 800,000 fewer only a ten years ago.

This country is ripe for a new Thatcherite revolution, in which we restore world confidence in British finances, and cut the size of government. There is an obvious way to do it – and that is by the wholesale and systematic use of artificial intelligence.

As anyone who has used AI will testify, this technology is only in its infancy and is already extraordinary. Vast quantities of government work – legal, planning, compliance, HR, you name it – can be done much faster, much cheaper, and with far fewer people.

Starmer needs urgently to set out a programme for using AI to cut the size of the state. Otherwise, he and his devalued Chancellor will have to step aside. We can’t go on like this.