Non-domicile Tax Status

Nigel Evans Excerpts

Tuesday 31st January 2023 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

I remind everybody here that, if you participate in this second Opposition Day debate, you will be expected to turn up for the wind-ups.

--- Later in debate ---

[Harriett Baldwin]

On a point of order, Mr Deputy Speaker. Is it in order for the Opposition spokesman to be talking in such general terms about a wide range of things, without actually addressing the motion on the Order Paper?

[Mr Deputy Speaker (Mr Nigel Evans)]

If I had heard anything out of order, I would have called the shadow Minister to order. I am quite content with what he is saying at this moment in time.

--- Later in debate ---

[The Financial Secretary to the Treasury (Victoria Atkins)]

On a point of order, Mr Deputy Speaker. If I am going to be quoted, I expect to be quoted correctly. The hon. Gentleman seems to use words I am not sure he quite understands—I do not know. In my speech, I am going to help him to understand some of the words he has used. But I have only ever sought to set out the facts, which we have to take into account on the issue under discussion, which is that they do pay £7.9 billion in tax. That is the context in which I have cited that figure, not in the way that he has alleged.

[Mr Deputy Speaker]

Shadow Minister, do you want to respond to that? They were your words, not mine.

[James Murray]

I am not sure I want to respond to that. The Minister has made her point. No doubt she will have a further chance in a few moments to set out those points again. She confirmed, in fact, that she is seeking to use as a defence for non-dom tax status the fact that non-doms paid £7.9 billion in UK taxes last year. Of course that argument entirely misses the point. We are talking about the £3.2 billion of tax that non-doms do not pay each year in this country.

Without wanting to forecast what might come in a few minutes, I suspect the Minister might also recycle her line that non-doms have invested £6 billion in investment schemes since 2012. But, of course, that ignores the fact that only 1% of non-doms invest their overseas income in the UK in any given year, and that non-dom status actively discourages people from bringing money into the UK to invest. Finally, the Minister may try to win praise for the Government having stopped non-dom status being permanent, but I suspect she will neglect to mention the fact that the Government have created a brand-new loophole that allows people to use offshore trusts to retain non-dom benefits permanently.

To be fair, while Treasury Ministers have come to the Dispatch Box time and again to defend non-dom tax status, the Chancellor did at least confirm to the House of Commons Treasury Committee on 23 November last year that he had asked the Treasury to look into how much abolishing that loophole would save. When he was questioned at that Committee by the superb interrogator, my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), the Chancellor claimed:

“I want to make sure that anything you do in terms of the non-dom tax regime does not mean you lose more than you gain.”

We already have clear, well-evidenced work from the London School of Economics and Warwick University—respected academic institutions, using HMRC data—which confirms that non-dom tax status costs the public finances £3.2 billion a year, even after any behavioural effects are taken into account. If the Chancellor is determined to ask his officials to confirm that figure, presumably using the same HMRC data as the LSE and Warwick University, we want to see him doing so as quickly as possible, and we want to see the result. That is why we have tabled today’s Humble Address.

We believe that non-dom tax status should be abolished, but that is not what we will be voting to make happen today. All we are voting for today is to make sure that, by the end of next month, the analysis the Chancellor referred to at the Treasury Committee on 23 November last year is published. Our motion would put that analysis alongside any other document or analysis on non-doms prepared for the Chancellor since he took office into the public domain ahead of the spring Budget.

I would hope that a Government supposedly committed to integrity, professionalism and accountability would feel obliged to accept that request. If not, the question will surely arise, what have they got to hide? What is it they are so keen to keep out of the public domain? What questions or conclusions are they so desperate to avoid? Our motion would simply make sure that any information the Chancellor has been considering in relation to the non-dom tax status would be made public ahead of the spring Budget in March 2023.

We know what happened at the last fiscal event, the autumn statement in November 2022. The decisions taken by the Chancellor at that time hit working people by forcing through a council tax rise and extending freezes in thresholds for income tax and national insurance contributions. Those freezes in tax thresholds will, over time, cost the average household more than £1,000 a year, and yet, at the same time as announcing those tax rises on working people last November, the Chancellor was silent on non-doms. That is what it looks like when working people are forced to pay for this Government’s failure.

Time and again, the Conservatives have chosen to put the burden of tax on to working people, rather than asking those with the broadest shoulders to pay their fair share. If working people are being asked to pay more tax, it is simply wrong to allow well-off people to continue to benefit from an outdated tax break on their overseas income. The truth is that Labour wants lower taxes for people who keep the country moving. The Tories want lower taxes for people who move their tax status overseas. We believe that if a person makes Britain their home, they should pay their taxes here. We believe that abolishing this tax loophole should be common sense and that using that money to invest in the NHS and childcare should make it a no-brainer. We will be voting today to make this Government finally come clean about why they are so reluctant to do the right thing.