Rafe Fletcher: We should learn from Singapore how to treat our country like an asset | Conservative Home

Rafe Fletcher is the founder of CWG.

The UK is fast becoming a place to enjoy wealth, not build it. It offers world-class institutions and infrastructure cheaply to transient visitors, while punishing those who seek to build a future there.

A recent trip back from my home in Singapore reinforced this view (though I concede it’s a rather London-focused case study). While Britain and its capital should welcome foreign investment, it must be self-confident in recognising the value it offers. Future prosperity depends on commitment as well as capital.

Take housing. Every week in Singapore, I’m invited to a British property seminar. Agents market new builds from Preston to Birmingham. Capital appreciation is assumed; yields are healthy.

Foreign buyers are also sold on the ease of entry, paying just two percent more in stamp duty than UK residents. In Singapore, that same foreign buyer would pay 60 percent stamp duty. Even popular middle=income countries surrounding Singapore, like Thailand and Indonesia, apply thorough safeguards on foreign ownership.

It would be foolish for the UK, in such growth doldrums, to turn its back on investment. But it should charge appropriately for access. Propping up an inflated housing market may please asset-rich older voters, but it’s ultimately unsustainable. Like immigration policies that boost GDP without raising living standards per capita, it’s a superficial fix – and it’s not fooling anyone.

The ambience of London in summer masked deeper discontent. One friend tells me no one believes life will be better in ten years. She is eyeing a move to the United States. She says many of her friends have already joined the Dubai exodus.

Opportunities abroad offer higher wages, lower taxes and little difference in living costs. Singapore regularly ranks as the world’s most expensive city, but London is no better value. S$7,000 (c.£4,000) a month for a 3-bedroom flat in Orchard (Singapore’s central shopping belt) is a lot less than anything you’d find in similarly-prime London, whilst Singapore’s low taxes leave far more disposable income to absorb these costs. Where one pays 40 per cent in Britain, it’s 11.5 per cent in Singapore.

So, it’s easy maths for any young Brit looking to save and with the means to move. And the UK’s current set up for non-residents offers perverse incentives, making it easy to go and hard to return.

A British passport is a tremendous asset. It still ranks sixth on the migration consultancy Henley & Partners’ global mobility spectrum, and it is a considerable safety blanket in the form of diplomatic assistance and healthcare. When my wife fell ill on another trip back, she received outstanding NHS care. As non-residents, we should have paid for it.

Merryn Somerset Webb, no darling of the left, outlined the power of this undervalued asset in Bloomberg. “A UK passport has value… and comes with access to a huge range of non-contributory state benefits.” £88.50 buys you state services and voting rights. Surely, Somerset Webb argues, “those who live abroad should be putting something into the UK pot.”

Compare that to the United States’ system of double taxation or Canada’s exit tax. Or indeed, Singapore, which regularly ranks as the world’s most powerful passport. Singaporeans cannot hold dual citizenship and all men must complete two years of national service; if they leave the country before 18, they must fulfil the obligation upon return. Citizenship is a contract.

Britain should at least charge a flat fee to those living abroad. That may not be tangible for the exchequer, but it would better reflect the asset’s value. It would also help shift the mindset of expats. Among Brits in Singapore, it’s common to deride the UK’s stagnation. But we should also recognise the enduring privileges it provides.

An overseas levy could be balanced by a more generous tax regime for returning expats. Why not extend the same treatment non-doms receive on their foreign-earned income? After all, the fundamental principle of wealth accumulation is compounding. Time in the market beats everything else.

Yet under current rules, expats moving back to the UK can’t let their savings grow. Without selling up first and creating “clean capital,” they fall into a complex and punitive web of capital gains and dividend taxes. A four-year amnesty, modelled on the post-Akshata Murty non-dom reforms, would give returnees time to restructure savings and gradually move into tax-free ISAs at the current limit of £20,000 per year.

To ensure this policy attracts the economically active rather than retirees, an age cap of 40 or 45 could apply. Eligibility might also require renouncing entitlement to a state pension, increasingly unaffordable anyway. More creatively, that four-year window could be extended further for those who reinvest their foreign savings directly into UK-listed stocks.

Politicians often talk about the British public’s appetite for sacrifice. But also its regard for fair play. Labour’s politics of envy taps into this sense that non-contributors get a better deal than those committed to the country. Current policy rewards those who make the UK expedient rather than a home.

Wealthy non-doms may be a popular tax target. But at least they treat Britain as a base. They generate year-round demand, contribute human capital, and provide reliable tax revenue from their UK-based activities. If Labour don’t scrap current inheritance tax plans, these non-doms will soon realise they are better off treating the UK as a holiday home too.

The British Council’s December 2024 report found 72 percent of Brits aged 18-30s are considering a move abroad, citing low wages and the breakdown of intergenerational standards. Government policy needs to show them a fair deal. That starts with treating the UK as an asset rather than a benefactor. There should be a proper price of access, whether that comes in the form of a passport or property.

Conservatism must prioritise its own citizens. In Singapore, this principle is evident not just in housing, education and healthcare, but even in small everyday policies. Singaporeans enjoy free access to galleries and museums, while visitors, including employment pass holders, pay. In contrast, the UK’s free ride for non-committed foreign capital stems from the same impulse that pays to house immigrants at the expense of taxpayers.

Of course, Britain must remain attractive to wealthy visitors. But it starts with a national pride recognising the country as an asset built by its citizens. And they should come first.