So it looks like the Ditherer-in-Chief is going to back down on non-doms and it may well end up as a flat-rate £30,000 charge, no further questions asked. City uproar was not the reason for the change of heart. The billions that the Square Mile brings to Britain were of no consequence to our ruling clique of politicians without a drop of entrepreneurialism* in their blood.

Lord Paul, the Indian-born steel billionaire, Gordon Brown’s biggest backer, says Labour is proposing an “unfair levy” which risked undermining him the economy. Sir Gulam Noon, who gave Labour £450,000 for a peerage (undelivered) says “everybody is against” the Government proposal.

When did the Labour Party first realise this policy would jeapardise millions in donations?

UPDATE : Osborne is gloating already – the Treasury is spinning the climbdowns as a clarification of “what the Government’s intention has always been”

Osborne is giving Darling a kicking for good measure

“In times of economic uncertainty, people need a Chancellor who can demonstrate strength of leadership and consistency of judgement. With Alistair Darling, we have neither. In his time at Number 11, he has gone from one retreat to another and his economic incompetence, whether on Northern Rock, Capital Gains Tax or now non-domiciled taxation is doing real damage to the real economy. The question for our dithering Prime Minister is how long can he keep someone at the Treasury who is clearly not up to the job.”

That will please Ed Balls…

Don’t know why Osborne is laughing, his policy now looks more punitive than Darling’s new version of his own policy. Doh!

*Except when it comes to making up expense claims, then they display the most imaginative entrepreneurialism.