Non-domicile Tax Status

Naz Shah Excerpts

Tuesday 31st January 2023 Commons Chamber

[Naz Shah (Bradford West) (Lab)]

Since 2010, Conservative Governments have demanded that working people pay yet more tax, but Conservative MPs and their friends are keen on avoiding paying tax themselves. Working people are picking up the tab again while the rich and powerful benefit from non-dom status and loopholes. Indeed, the Prime Minister himself was Chancellor of the Exchequer for two years before his wife gave up her non-dom status. He himself held a US green card.

This is not carelessness. The Conservative party has deliberately failed to clean up the sleaze and get rid of the loopholes to generate income to strengthen our economy. The Institute for Fiscal Studies has estimated that abolishing non-dom status alone would generate £3 billion a year for the economy. That is how much the current Chancellor has pledged for the NHS over the next two years, so if he is trying to find the money, now he knows how.

While the Tories keep telling us that we are all in this together, the UK is not even in this together with other G7 countries. According to the International Monetary Fund, we are the only country in the G7 that is moving into a recession—we are all alone. Over the past few years, while those with non-dom status have seen tax breaks and benefits, hard-working people in Bradford West and around the country have been let down by austerity and economic failure and are experiencing a big tax burden.

In the last financial year, Government spending per head was significantly lower in the Yorkshire and Humber region than in any other area of the UK. So was Government spending on transport and infrastructure, despite the Government’s commitment to level up the north of England. As for Government spending on education, Bradford West has seen a reduction of 10.2% in real-terms spending since 2015, whereas the national average is 3.9%. The Tories’ failure to properly invest in Bradford district and Bradford West has created devastating outcomes for the area, where child poverty is at 51.2%, the highest rate in the north of England. In Bradford West, 22.3% of households are in fuel poverty, compared with 13.2% in the country as a whole.

It is clear that abolishing this unjust, unfair tax perk would create a fairer and stronger economy that works for everyone, not just the richest in society. Conservative Members argue that abolishing non-dom status would be bad for business, would not be competitive and—as the right hon. and learned Member for Northampton North (Michael Ellis) suggested—would deter business and investment in the UK, but that is simply not true.

I can see why the Tories have an issue with abolishing non-dom status. After all, the chairman of the party resigned for failing to declare his taxes, the party treasurer took part in a tax avoidance scheme, and the party has a CEO whose firm is allegedly involved in a tax avoidance scheme. But while abolishing non-dom status might be bad for the Conservatives, let us not pretend that it is bad for business. Other countries that attract business, investment and entrepreneurship, such as the USA, Canada and Germany, require people to pay tax after six months or even immediately.

Despite the UK’s non-dom status, it is the only country in the G7 that faces negative growth, as predicted by the IMF. Not Germany, not Canada, not the United States—the UK. Honestly, the Conservatives have had 13 years, five Prime Ministers and seven Chancellors and the only thing they have been consistent on is low growth. They talk as if they know what is best for business and the economy, but the only thing they have succeeded in doing is crashing the economy into the ground. If the Government were truly serious about strengthening and growing the economy, if they were serious about levelling up the north, if they were serious about lifting people out of poverty, if they were serious about accountability and ethics or if they were even remotely serious about the NHS and other vital infrastructure, they would have gone further than sacking individual Ministers. They would have abolished non-dom status and closed the loopholes. We need a change to the system, not just the faces.