Mansion tax is not Land Value Tax, but it is a place to start down the road to shifting a significant part of the tax base from income to wealth.
There seems little argument that mansion tax would be a more effective method of taxing non-resident Non-Doms who acquired over 60% of the properties valued at over £2m in recent times.
The inequalities in wealth in the UK far outstrip inequalities in income. The top 10% of households own more wealth than the rest put together: 0.3 per cent of Britain’s population owns 69 per cent of its land.
David Cameron’s comments over the weekend that he wants to cut tax but now is not the time gives a very strong indication as to what the overall impact will be of any new measures in next month’s Budget – no net tax cuts. But no net tax cuts is not the same as no tax cuts.
Two different ideas were also floated over the weekend, from credible looking sources even if they were also both formally denied by the government. They were to move even further towards the planned £10,000 basic income tax allowance and also to tax non-doms …
I’d mentioned previously that Conservative peers McAlpine and Laidlaw have chosen to quit the Lords rather than have to end their non-dom tax status. With the deadline for making a final decision approaching they have been joined by a third Conservative peer – Lord Bagri – and a crossbencher – Baroness Dunn.
A fourth Conservative peer, Lord Ashcroft, has instead given up his non-dom status as has the Labour peer, Lord Paul.
UPDATE: Lord Foster has also quit the Lords in order to preserve his tax status, though from the Parliamentary records it doesn’t looks as if he was ever …
A footnote to our previous coverage of Lords McAlpine and Laidlaw, two non-dom Conservative members of the House of Lords. They had both for a long time been unmoved by criticism of their tax affairs, but ahead of changes to the law they have both decided to give up their seats in the Lords.
Lord McAlpine’s case was relatively straight-forward, but Lord Laidlaw’s case had the added twist that he broke a promise he made on being appointed. Indeed, the Lords Appointment Commission was subsequently moved to say that they would not have authorised his peerage if they had known …
Sometimes good intentions don’t quite result in the good outcomes you’d wish. In this case, the issue is a recommendation from the Committee on Standards in Public Life that general election candidates should have to publish their financial interests just as MPs do.
The logic is a good one: if you’re a voter wanting to chose between candidates, it’s a bit odd if you only know about the financial interests of an MP standing for re-election but not of the people they’re up against. You want to know the interests before you cast your vote, not find out afterwards whether or not you should regret your choice.
However, as the committee recognised, its proposals came out too late to change the law for the 2010 general election. Therefore instead the Ministry of Justice has just published a voluntary scheme, detailing a recommended set of questions that candidates should answer about their financial interests.
Perhaps the most controversial will be the section on tax, where people are asked if:
I confirm that, for the tax year 2008/09, I have not claimed to be, or been treated as not resident, not ordinarily resident or non-domiciled in the UK for tax purposes.
Non-doms are a controversial issues anyway; the appearance of this recommendation just before an election is unlikely to cool such partisan passions. When neither Parliament nor the Committee on Standards in Public Life have decided on such a rule (so far – and I hope they do in due course), should the Ministry of Justice unilaterally be slipping it in to a report so soon before an election?
Overall, the recommendations themselves acknowledge that they go beyond what is currently required of MPs. To require candidates to publish the same information as is required of MPs makes obvious sense; for a government ministry to go beyond that off its own bat could turn out to be quite controversial.
With a voluntary code, published rather late in the day and plenty of scope for individual candidates to partially answer the questions, we’re unlikely to see a triumph of transparency that results in voters being significantly better informed. However, it will at the very least provide a test of the different provisions which should make for better legislation when the whole process most likely becomes law during the next Parliament.
What are other Liberal Democrat bloggers saying? Here are two posts that have caught the eye from the Liberal Democrat Blogs aggregator:
Tories in Devon and Cornwall set themselves a target of raising £13,000 in an Obama-style online donate-now campaign, perhaps in an attempt to wean themselves off the Ashcroft millions. How much did they raise?
Stephen Glenn picks up on the news that Lord Paul has said he will voluntarily end his non-dom status from April, whether required to or not, and asks what it means for the Tory “they do it too” defence.
Spotted any other great posts in the last day from blogs that aren’t on the aggregator? Do post up a comment sharing them with us all.
Glad tidings from the House of Lords today, where Labour has – at long, long last – bowed to Lib Dem pressure and announced that non-doms will no longer be able to sit in Parliament.
The party’s terrier-like Treasury spokesman Lord (Matthew) Oakeshott has welcomed the Government’s announcement:
I have introduced 4 bills over the last 5 years to ban non-doms from the House of Lords with no support from the Government and with serious obstruction from the Conservatives.
“Now, with an election looming, I am delighted that the Government has had this last-minute conversion and adopted my Bill almost to the letter in their amendment.
“It’s outrageous if people who sit in our Parliament do not pay full British taxes like everyone else. They must pay up or pack up.”
The Government, in the person of the almost-tautologically named Baroness Royall, has sent a letter to all peers today explaining how the new law will affect them:
Lib Dem Shadow Chancellor Vince Cable has wasted no time in pointing out the huge gaps in the arithmetic of the Conservatives’ draft election manifesto. Earlier today, at the launch of the manifesto, David Cameron stated that his proposed inheritance tax cut would be paid for by taxing non-doms, saying:
“Every other spending pledge we have made, every tax pledge we have made, is fully costed and fully set out. If you take for example the pledge on inheritance tax, which we’ve said is not for a first budget but is a pledge for a parliament, that is to be paid for by taxing the non-doms, the people who live here but do not pay full tax here.”
However Vince was critical of both the principle of the inheritance tax cut and the Tories’ sums. He pointed out that the annual gap between the revenue from non-doms and the lost inheritance tax will grow from £350 million in the first year of the next parliament to almost £1.5 billion by 2015, a total of almost £6 billion. He said:
I write this after watching the 6 O’Clock news on Sunday. After the usual sick feeling that I invariably feel when I hear Cameron speak subsides, I am left in a state of mild shock at what he just tried to do: make the public believe that there aren’t many differences between the Lib Dems and the Tories and scaremongering our supporters into voting for them under the pretence that a hung parliament would be ‘bad for Britain’.
I start by addressing the latter point first. There is an argument that decisive action is needed in facing the economic crisis. As I am not an economist and have heard this from many noted sources I will take this as read. However, the idea that the Liberal Democrats would, through a hung parliament, have a say in how and what is done is fantastic news to Lib Dem supporters. I hear the Tories want to set up some sort of “getting out of the recession” committee to work out what to do. Well who would the nation rather have steering this committee than Vince Cable MP? I’m sorry we don’t say this enough: he was right! And he’s consistently right. Over and over again. It beggars belief that this could be twisted into something bad for Britain.
By Stephen Tall
| Wed 16th December 2009 - 6:35 pm
Forgive me if I tread carefully here, for while the Lib Dem deputy leader is protected by the cloak of Parliamentary privilege your humble scribe has no wish to tangle with a billionaire. So I’ll let The Times tell the story of today’s (Deputy) Prime Minister’s Questions:
A senior Liberal Democrat today referred to Lord Ashcroft, the Tory deputy chairman, as a “non-dom” in the Commons. It is the first time the Conservative peer, whose tax status is unknown, has been described in a such a way on the floor of the House.
David Blake Interesting piece on the Sutton election: https://www.onlondon.co.uk/lewis-baston-lib-dem-sutton-by-election-win-underlines-trouble-londons-tories-are-in/...
Caron Lindsay @suzanne Have had a look and can't see another comment from you. The internet must have eaten it....
Greg Hyde How come France doesn't adhere to the UNHCR ? ...A tented city in Calais as opposed to a hotel in the UK. As for British homeless it's a political choice - gove...
Big Tall Tim Brilliant work Michal. Well done to all involved in organising it and the very high turnout....
Anton McNulty-Howard It seems we have forgotten that reform is actually made up of Tories. It may get some working class voters but essentially, they are tory orientated. We are wit...
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