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Norway and UK sign joint declaration on cooperation

Norwegian PM Jonas Gahr Støre met his UK counterpart Boris Johnson in London on Friday, where the pair signed a joint declaration on strategic cooperation between the two countries.

Published: 13 May 2022 17:55 CEST

Jonas Gahr Store and Boris Johnson.

Norway and the UK have singed a joint declaration on cooperation. Britain's Prime Minister Boris Johnson greets Norway's Prime Minister Jonas Gahr Store outside 10 Downing Street in central London on May 13, 2022, ahead of their meeting. Photo by Daniel LEAL / AFP.

Norwegian Prime Minister Jonas Gahr Støre visited Downing Street on Friday and met UK Prime Minister Boris Johnson, where the pair signed a declaration of cooperation between the two countries.

“Britain is a good neighbour and close ally. We have a long tradition of close cooperation. The British are now outside the EU, and bilateral cooperation is becoming even more important than before,” Støre said in a statement on the government’s website.

The joint declaration on bilateral strategic cooperation outlines defence and security, the climate and environment, research and innovation and education and culture as issues the two countries wish to cooperate on in the future.

Støre’s visit was the first bilateral meeting of the countries’ PMs since Brexit. The pair also discussed the green shift, the war in Ukraine and defence.

Støre also arranged a round table conference on energy, the climate and business with the UK Minister of Trade, Kwasi Kwarteng, and a number of representatives from Norwegian and British firms.

“The green transition is important for our two countries. I spoke about our great ambitions for offshore wind, and this is one of many areas where Norway and the United Kingdom can cooperate more,” Støre said.

Earlier this week, the Norwegian government announced that it would build 1,500 offshore wind turbines by 2040.

Last year, the UK and Norway signed a post-Brexit trade deal, which the Norwegian government said was the largest free trade agreement the country had entered into outside of its arrangement with the European Economic Area.

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Will Norway's new exit tax slow the exodus of ultra-rich from the country?

Industrialist Kjell Inge Røkke, former cross-country ski legend Bjørn Dæhlie, and the father of football star Erling Haaland are among the dozens of super-wealthy who have packed up and left in recent years.

The reason? The centre-left government in power since 2021 has hiked the wealth tax from 0.85 percent to one percent — and to 1.1 percent for the very wealthiest — and raised the dividend tax.

Norway, Spain and Switzerland are the only European countries that have a tax on net wealth. In Norway it also applies to unrealised capital gains (gains not yet realised through the sale of shares, for example).

Owners of companies are among those hit hardest, often drawing a modest salary even though their company has a high value.

“If your salary is one million and you have to pay three million in (wealth) tax, it’s clear that it’s untenable,” said Tord Ueland Kolstad, a real estate magnate who “grudgingly” moved to Lucerne, Switzerland in 2022.

“The system is designed so that it confiscates more than what you can produce,” he said.

To pay a wealth tax which can exceed their yearly income, entrepreneurs often need to take out dividends, hampering their company’s capacity to invest.

And those dividends are also subject to a tax rate of 37.84 percent.

“So basically you have two options: either leave Norway, or sell your company,” said Kolstad.

‘Breach of the social contract’

Between 2021 and 2023, more than 100 of Norway’s wealthiest people went into exile, with the large majority relocating to Switzerland.

Others transferred their wealth to heirs already residing abroad, as Norway does not have inheritance tax.

Labour Prime Minister Jonas Gahr Støre has criticised the mini-exodus, stressing that taxes are what pay for Norway’s generous welfare system.

“When you’ve made your wealth in Norway, put your kids in school, benefitted from the health care system, driven on the roads and reaped the rewards of its research, it’s a breach of the social contract,” he said in a speech in parliament.

The government is now working to tighten the country’s “exit tax”.

People who move abroad would have 12 years to pay the exit tax — also 37.84 percent of gains made in Norway from shares and other sources over many years — that has until now been easy to circumvent or defer.

“The aim is that gains made in Norway be taxed in Norway,” explained Erlend Grimstad, a state secretary in the finance ministry.

“Our nurses and teachers have to hand over a large share of their earnings to society in the form of taxes,” he said.

“If they see that the most well-off can simply avoid contributing their share by leaving the country, that undermines the legitimacy of the tax system.”

‘Don’t come to Norway’

That does little to quell the anger of the ultra-rich.

Christer Dalsbøe, who started his own company, made buzz on social media recently singing a little ditty discouraging other entrepreneurs from starting businesses in the country.

“Don’t come to Norway, We will tax you till you’re poor. And when you have nothing left, We will tax you a little more,” he sang, sitting at a piano.

The liberal think tank Civita said the government’s plans to tighten the “exit tax” were in reality aimed at setting up roadblocks for millionaires and billionaires.

“Instead of attacking the reasons that push them into exile, meaning easing the tax burden on Norwegian shareholders, they seem to prefer to set up regulatory obstacles,” said Civita economist Mathilde Fasting.

In Lucerne, Tord Ueland Kolstad said he can receive “several calls a week” from other Norwegians considering moving to Switzerland.

“The flow has not stopped. Maybe it is just beginning.”

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