Non-Dom Policy Damned By Tory Treasurer

Michael Spencer, the demi-billionaire Tory treasurer and boss of the City money broking powerhouse ICAP, had an article in The Times criticising Brown and Darling’s plans to drive foreign businessman out of London to Monaco.

Guido suspects that Spencer doesn’t think Osborne’s own plans for non-doms are so brilliant either, he implausibly says the Tory version of the policy was “broadly welcomed” when he took City soundings. Broadly welcomed by whom?

Phil Hammond is defending the plans rather meekly, whereas Michael Fallon, a Tory member of the Treasury Select Committee, tells the FT bluntly “Chasing non-doms out of London is a huge mistake … Why do we want to lose all that business to Luxembourg or Dublin or Geneva?”

The US Embassy has made their view known and is lobbying hard to persuade the Treasury to change the wording of its legislation to ensure the charge falls within the scope of the double taxation treaty. The Chancellor’s plans will actually cost the Treasury money, according to a study by the Society of Trust and Estate Practitioners: the £30,000 annual levy will cost £2.1 billion a year as many residents will leave the country. The 116,000 non-doms are mostly not tycoons but bank, hedge fund and private equity staff who bring investment and prosperity. The problem for the Tories with having their policy stolen by Gordon is that they can’t attack his even worse version without highlighting the problems with their own. The Treasury and Osborne should realise that the elasticity in the Laffer Curve applies even more to foreigners.


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