12 Days Remaining

Thursday 9th
posted by Morning Star in Editorial

ED MILIBAND'S pledge to abolish the non-dom loophole that allows over 100,000 of Britain's richest people to avoid hundreds of millions in tax each year has panicked the Conservatives.

As Labour has pointed out, within 12 hours of Mr Miliband's announcement leading Tories had claimed a clampdown might not save money, that they are already clamping down, that clamping down would "cost hundreds of millions" as non-doms flee, that Labour didn't do anything in office and that they want to see more details.

Such mixed messages suggest Labour has caught the government unawares.

Non-domiciled status is not a reflection of anything in the real world. It is a scam which allows rich people to buy themselves an exemption from British taxation.

It is an artificial concept too, since non-dom status does not mean an individual isn't actually here. These are people who live in this country and have access to all the public services and publicly maintained infrastructure that our taxes pay for.

The system is grossly unfair and carping from the Conservatives and Liberal Democrats that the number claiming this status rose under Tony Blair and Gordon Brown is irrelevant.

The 1997-2010 Labour administrations have a lot to answer for, including this. The party can legitimately be attacked for its failure to break decisively with Blair's blood-soaked foreign policy or Brown's disastrous PFI wheeze that still suffocates our hospitals.

But Miliband should not be attacked when he does the right thing on the grounds that his predecessors did not.

Scaremongering over the super-rich leaving the country is an even weaker objection. For one thing, no other major state allows this loophole - there's no indication that the wealthy are fleeing the United States, France, Japan or anywhere else.

There is some evidence that London attracts unusual numbers of foreign billionaires, but the consequences of our lax tax regime are not the mythical explosion in jobs and investment cited by the Tories.

Instead it prompts runaway property prices that are forcing working people out of the capital and the centre of other major cities. 

Labour can be congratulated on a policy with no downsides. But, as the Centre for Labour and Social Studies (Class) points out, it needs to follow this up with an aggressive crackdown on corporate tax avoidance, which costs the Treasury a great deal more than non-dom status - with the amount lost to the public purse from tax evasion and avoidance totalling upwards of £70 billion a year by most estimates.

At a time when public services are starved of funds and public servants are being denied the pay rises they deserve this is money we need back.

Ending rampant tax-dodging will not end austerity. 

Only those still wedded to the delusion that Tory cuts are about bringing down the deficit could think that.

The assault on our public services is ideological, the latest escalation of a decades-long neoliberal campaign of privatisation, outsourcing and attacks on workers' rights.

As a result the share of Britain's wealth paid to the workers who create it has nosedived, from over 60 per cent in the 1970s to just under 50 per cent in 2014. The TUC has estimated that if ages had kept pace with economic growth, a worker on a median salary would have been £7,000 a year better off by 2010.

The missing millions have been gobbled up in higher profits for business. So the labour movement's approach to tax cannot simply mean the rich "paying their fair share," whatever that means, but must be about how we use taxation to redistribute wealth back to the real wealth creators - us.

Attacking non-doms is a start, but on redistribution Labour is stil playing catch-up with the British people.