They need to give something away to please the electorate or they need to
find money to fund some new promise. But how do you do that without offending
some other part of the electorate or cutting other bits of spending?
Gordon Brown, in his time as chancellor, found the ideal solution:
anti-avoidance. Give with one hand, hammer the evil tax avoiders with the other
clunking fist. Now that shadow chancellor George Osborne has taken the same
approach, promising IHT and stamp duty cuts with a crackdown on non-domiciles,
Brown and his chancellor Alistair Darling can hardly complain, can they?
They can complain, of course, and they have. All of these non-doms will not
come anywhere near to funding the Tory tax pledges, they say.
Aspects of the tax on non-doms are perhaps overstated. The jury is still out
over whether there are 150,000 non-doms that would pay the charge. But Darling
and Brown’s criticisms of the Tory policy are more plainly nonsense.
Labour claims that many of these non-doms are merely Polish plumbers and
nurses. But the growth in non-dom numbers to over 100,000 happened in the late
1990s. The Polish influx came later, after accession to the EU in 2004.
It is likely that these people are City bankers. The banks hire tax experts
to explain these kinds of tax benefits to their international staff based in
London and it seems likely that the bulk of non-doms work in the Square Mile.
The irony will not be lost on the profession George Osborne is planning a
stealth tax on the City to fund giveaways elsewhere. The Tories have studied the
New Labour textbook, and studied it well.
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