Non-domicile Tax Status

Debate between Rob Butler and Anthony Browne

Tuesday 31st January 2023 Commons Chamber

[Rob Butler (Aylesbury) (Con)]

I rise to speak against the motion on the Order Paper. It is important that we recollect what that is. It says that Treasury analysis of a potential tax policy should be laid before the House two weeks before the Budget. Having listened very carefully to the previous four speakers from the Opposition Benches, I do not recall any of them actually addressing that point. That is surely because the Opposition know full well that no Government could publish pre-Budget advice, for the simple and straightforward reason that Budget announcements are market sensitive. No Government of any colour have ever published that sort of advice. Those on the Opposition Front Bench know that full well and they know that, if the situation were reversed, which, hopefully, it never will be, they would not publish it, either. It is important that the public understand exactly what has been put on the Order Paper by the Labour party, which has brought us here today.

This Conservative Government are absolutely committed to a fair tax system, ensuring that the UK attracts talented people to work and do business here and, at the same time, generating tax revenue that pays for our public services. That was brilliantly set out by my hon. Friend the Minister. It is, of course, vital that our tax regime is competitive and that talented entrepreneurs overseas see the UK as a country where their risk taking will be rewarded and where their commitment to developing their business will bring jobs to British people, strengthening our economy and generating in turn more tax that will pay for more public services. It is a virtuous circle.

Let me be clear that I am not in any way suggesting a blank cheque or a free ride for non-doms. I absolutely accept that non-dom status should not be permanent and I am pleased that we have already moved away from that. I absolutely agree with my hon. Friend the Member for Amber Valley (Nigel Mills) that there is scope for further reform, but that should be considered calmly and rationally.

Let us remember that non-domiciled individuals already pay tax on UK income and gains. They also pay tax on foreign income and gains if those moneys are brought into the UK. We have heard of some £8 billion in UK tax contributed in 2021 alone. I also made the point, when I intervened on the shadow Minister right at the beginning of the debate, that successive Labour Chancellors tried to reform the system and gave up, because they realised it was not the easy panacea that those on the current Labour Front Bench would have us believe. Even Ed Balls has said that abolishing non-dom status would probably end up costing Britain money, because some people would leave the country.

I make those points because it is important that, when we consider headline-grabbing ideas, we take the time to look behind the headlines and think carefully about all the implications of a policy proposal. I know that is exactly what my right hon. Friend the Chancellor is doing as he prepares his Budget, listening to ideas and weighing up their implications.

[Anthony Browne]

My hon. Friend is making a powerful and important speech. Does he agree that the reason why the Labour party is focusing on this issue so much in this debate and during Prime Minister’s questions is that, while we are the party of aspiration, Labour is the party of envy and is just trying to play class war?

[Rob Butler]

I have no alternative but to agree with my hon. Friend—otherwise, what on earth is the point of having this discussion? We believe in aspiring, striving and achieving and we then believe in paying our fair share of tax, which generates the public services that we value so highly.

As I was saying, the Chancellor is currently weighing up what are the best policies to stimulate growth. Of course that involves raising tax revenue, but we need to do so in a way that does not stifle the potential for economic growth in this country. There are plenty of people giving him advice on how to do that, including some of my constituents, and even me.

I believe that there are plenty of changes we could introduce. I would like us to look at the cap on private pensions; doing so would enable us to get more people in their 50s remaining in work or returning to the workforce. Some dub that current tax a doctor’s tax, because it creates a strong disincentive for doctors to work extra shifts—doctors, the very healthcare workers the Opposition are so keen that we should support. I agree that we should support them, so let us make a tax regime that creates the opportunity and potential for them to want to work more.

There are other taxes that also impede free markets—stamp duty land tax could be considered one of those—but this is not the place to consider the detail of all that. Nor is this the place for the publication of Treasury analysis on the effect of the abolition of non-dom tax status on public revenue, because of the time, just before a Budget, when the Labour party is suggesting it should be done. Let us instead focus on the real, pressing needs of our economy for our constituents: driving opportunities for growth, building a skilled workforce, creating jobs and so generating revenues that will support our public services for many decades to come.