Scrapping non-dom tax status ‘an utter humiliation’ for government, Labour claims
Scrapping the non-dom tax status for wealthy foreign nationals is “an utter humiliation for this government”, shadow chancellor Rachel Reeves has said.
“The last budget of this parliament – they’ve had 14 years and they use this moment to close a non-dom tax loophole that everyone has been aware of for years,” Ms Reeves told Sky News’ Sunday Morning With Trevor Phillips.
“If they had done this when we first announced it we could have brought in billions of pounds extra to either keep taxes down for working people” or invest in other priorities, she said.
In last Wednesday’s budget, Chancellor Jeremy Hunt committed to cutting the tax status for non-doms – short for non-domiciled individuals, who live in the UK but whose permanent home is abroad.
The tax break allows people with non-dom status to only pay tax on money earned in the UK, meaning their overseas income and wealth are not subject to UK tax for up to 15 years. But the chancellor has cut that to four years, a move expected to raise £2.7bn a year towards tax cuts.
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Asked why she was not praising Mr Hunt for taking an idea she supports, Ms Reeves said: “Because they could have done it years ago and we could have reduced those NHS hospital waiting lists…
“Imagine what good could have been done if the chancellor and prime minister had done this years ago.
“So it is a humiliation that they’re doing it at this late stage. They’ve run out of ideas, they’re quickly running out of road.”
Pic: PA
Asked if Labour would stick to the government’s spending plans, Ms Reeves said there were “areas where we would do more” and noted she has already announced “a small number of targeted tax increases to provide an immediate injection of cash into public services”.
These include the plan to make private schools pay VAT and business rates, and expanding the oil and gas company windfall tax.
She said Labour has fiscal rules she will enforce with an “iron discipline” which are “slightly different” to what the government has in place.
The aim is to “boost our long-term growth and productivity”, which is “absolutely key and has been the missing ingredient in the government’s economic approach the last 14 years”.
She said our economy “would be £140bn bigger” with a similar approach to other OECD countries.
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Pressed on where else she would raise revenue for her party’s priorities, Ms Reeves said she would go through the budget documents to work out where else money could be raised.
“Those pledges very much stand,” she said. “They are national priorities and they are Labour’s priorities as well, and we will now make sure we identify the funding streams, because everything in our manifesto will be fully funded.”
She repeated her pledge there would be no additional borrowing to pay for day-to-day expenditure.
“I’ve been very clear about the fiscal rules to get debt falling as a share of GDP, to pay for day-to-day expenditure through tax receipts and there won’t be anything in our manifesto that breaks those rules.”
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Kemi Badenoch accuses Sir Keir Starmer of ‘lying’ about Peter Mandelson prior to sacking him
Kemi Badenoch has accused Sir Keir Starmer of “lying to the whole country” about what he knew regarding Peter Mandelson’s correspondence with Jeffrey Epstein.
Lord Mandelson was this week stripped of his position as ambassador to the US amid fresh scrutiny over his years-long friendship with the convicted paedophile.
The prime minister initially defended the Labour peer but removed him from his post on Thursday after newly seen emails revealed he sent messages of support to Epstein even as he faced jail for sex offences in 2008.
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Lord Mandelson – the unanswered questions
The Times has now reported that Downing Street and the Foreign Office were aware of the emails on Tuesday – a day before Sir Keir gave Lord Mandelson his backing at Prime Minister’s Questions (PMQs).
In a post on X, Conservative leader Ms Badenoch wrote: “Looks like the Prime Minister and Labour MPs spent the week lying to the whole country about what they knew regarding Mandelson’s involvement with convicted paedophile Jeffrey Epstein.”
She continued: “If No 10 had those emails for 48 hours before acting, it means he lied at PMQs and ministers lied again about new additional information. These are yet more errors of judgment.
“The Prime Minister has very serious questions to answer. The only way to clear this up is full transparency about who knew what, and when.”
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Sources said Sir Keir was not aware of the contents of the emails when he told MPs he had “confidence” in Lord Mandelson.
A media enquiry outlining details of the messages between Lord Mandelson and Epstein was sent to the Foreign Office on Tuesday, and passed on to Number 10.
Sir Oliver Robbins, the permanent under-secretary at the Foreign Office, asked Lord Mandelson about the emails on Tuesday, but did not receive a response until the following day.
Sir Keir is understood not to have been aware of the contents of the emails until Wednesday evening.
Speaking to Sky News, one Labour MP has called for more information on what happened behind closed doors at No 10 this week.
Jo White, MP for Bassetlaw, in Nottinghamshire, said: “We cannot move on until we find out how he [Sir Keir] was not briefed properly before PMQs.”
“What he needs to do now is get on top and sort out this mess,” she said. “Suspend the whip from Peter Mandelson and expel him from the party, then have a transparent enquiry about what went wrong at No.10.”
This came as Sir Keir enjoyed some time away from Downing Street.
The prime minister was on Saturday pictured watching Arsenal face Nottingham Forest in a Premier League match at the Emirates Stadium.
Arsenal fan Sir Keir cheered on his side as they won 3-0. Pic: Reuters
Lord Mandelson’s exit came after less than a fortnight after another high-profile loss for the Labour government, as Angela Rayner was forced to quit as deputy prime minister and deputy Labour leader over her tax affairs.
As Sir Keir has faced a scandal-hit start to the month, a growing number of Labour MPs have begun calling his leadership into question.
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Lucy Powell, who is running to replace Ms Rayner as Labour’s deputy leader, has called for a “change of culture” at Downing Street.
“We’ve got a bit of a groupthink happening at the top, that culture of not being receptive to interrogation, not being receptive to differing views,” she told The Guardian newspaper.
Meanwhile, senior Labour MP Emily Thornberry has written to the new foreign secretary, Yvette Cooper, demanding answers about the vetting process for UK diplomats in the wake of Lord Mandelson’s sacking.
A man has admitted arson after a major fire at an MP’s constituency office.
Joshua Oliver, 28, pleaded guilty to starting the fire which destroyed the office of Labour MP Sharon Hodgson, at Vermont House in Washington, Tyne and Wear.
The fire also wrecked a small charity for people with very rare genetic diseases and an NHS mental health service for veterans.
The guilty plea was entered at Newcastle Magistrates’ Court on the basis that it was reckless rather than intentional.
Hodgson, who has been an MP since 2005, winning her seat again in 2019. Pic: Reuters
The Crown did not accept that basis of plea.
Oliver, of no fixed address, had been living in a tent nearby, the court heard.
Northumbria Police previously said it was “alerted to a fire at a premises on Woodland Terrace in the Washington area” shortly after 12.20am on Thursday.
“Emergency services attended and no one is reported to have been injured in the incident,” it added.
Drone footage from the scene showed extensive damage to the building.
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A spokesperson for the Crown Prosecution Service said: “Our prosecutors have worked to establish that there is sufficient evidence to bring the case to trial and that it is in the public interest to pursue criminal proceedings.
“We have worked closely with Northumbria Police as they carried out their investigation.”
Oliver was remanded in custody and will appear at Newcastle Crown Court on Tuesday, 14 October.
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