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Labour accuses Tories of editing Ed Balls non-dom video to mislead voters Labour accuses Tories of editing Ed Balls non-dom video to mislead voters
(about 1 hour later)
Labour has accused the Tories of deliberately misleading voters by editing an interview with Ed Balls as a row broke out over a pledge by Ed Miliband to abolish the non-domicile tax status for anyone living in Britain for more than three years.Labour has accused the Tories of deliberately misleading voters by editing an interview with Ed Balls as a row broke out over a pledge by Ed Miliband to abolish the non-domicile tax status for anyone living in Britain for more than three years.
The Tories moved to unpick the announcement by the Labour leader by releasing a video of a BBC interview back in January in which the shadow chancellor said that abolishing non-dom status might lead to a fall in tax revenue.The Tories moved to unpick the announcement by the Labour leader by releasing a video of a BBC interview back in January in which the shadow chancellor said that abolishing non-dom status might lead to a fall in tax revenue.
But the Tories edited out a crucial final sentence in which Balls told BBC Radio Leeds on 9 January: “But I think we can be tougher and we should be and we will.”But the Tories edited out a crucial final sentence in which Balls told BBC Radio Leeds on 9 January: “But I think we can be tougher and we should be and we will.”
Labour seized on the Tory editing of the Balls interview to accuse the Tories of misleading people to defend their refusal to tackle tax avoidance. The shadow chancellor blogged: “The Tories have edited my words from January in an attempt to deliberately mislead people because they can’t defend their own refusal to act on tax avoidance.Labour seized on the Tory editing of the Balls interview to accuse the Tories of misleading people to defend their refusal to tackle tax avoidance. The shadow chancellor blogged: “The Tories have edited my words from January in an attempt to deliberately mislead people because they can’t defend their own refusal to act on tax avoidance.
Related: Non-dom status: living and working in the UK, without paying all your tax in the UKRelated: Non-dom status: living and working in the UK, without paying all your tax in the UK
“They have dropped the part of my interview where on non-domicile rules I say: ‘I think we can be tougher and we should be and we will.’ That is exactly what we have proposed – ending a situation where people permanently living in the UK year after year can claim non-domicile status to reduce their tax bills and play by different rules to everyone else.”“They have dropped the part of my interview where on non-domicile rules I say: ‘I think we can be tougher and we should be and we will.’ That is exactly what we have proposed – ending a situation where people permanently living in the UK year after year can claim non-domicile status to reduce their tax bills and play by different rules to everyone else.”
The row has lit up Britain’s general election campaign after Miliband promised to abolish the non-dom rule, which allows many of Britain’s richest permanent residents to avoid paying tax in the UK on their worldwide income, for those who are based in Britain for more than two to three years.The row has lit up Britain’s general election campaign after Miliband promised to abolish the non-dom rule, which allows many of Britain’s richest permanent residents to avoid paying tax in the UK on their worldwide income, for those who are based in Britain for more than two to three years.
Labour said the rule, introduced by William Pitt the Younger in the late 18th century, has been open to abuse and offends the moral basis of taxation. Everyone who has made the UK their permanent home should pay full UK tax on all their income and gains, Miliband argued.Labour said the rule, introduced by William Pitt the Younger in the late 18th century, has been open to abuse and offends the moral basis of taxation. Everyone who has made the UK their permanent home should pay full UK tax on all their income and gains, Miliband argued.
George Osborne, conscious of poll findings that the Tories are seen as the party of the rich, realised overnight that he had to tread carefully in response to a Labour plan to crack down on multi-millionaires. Osborne therefore moved to unpick the announcement by saying that Labour was merely planning to tinker with the non-dom tax status on the grounds that the rule would remain in place for beneficiaries who stay in the UK for under two to three years.George Osborne, conscious of poll findings that the Tories are seen as the party of the rich, realised overnight that he had to tread carefully in response to a Labour plan to crack down on multi-millionaires. Osborne therefore moved to unpick the announcement by saying that Labour was merely planning to tinker with the non-dom tax status on the grounds that the rule would remain in place for beneficiaries who stay in the UK for under two to three years.
The Tories then released a video of the shadow chancellor’s January interview in which Balls suggested that abolishing the non-dom rule could lower tax revenues by encouraging some wealthy people to leave the UK.The Tories then released a video of the shadow chancellor’s January interview in which Balls suggested that abolishing the non-dom rule could lower tax revenues by encouraging some wealthy people to leave the UK.
WATCH: @edballsmp says abolishing non-dom status "will end up costing Britain money" https://t.co/dL2Gf6omkzWATCH: @edballsmp says abolishing non-dom status "will end up costing Britain money" https://t.co/dL2Gf6omkz
The edited video shows Balls saying: “I think that it is important that you make sure the non-dom rules work in a fair way. I think they were too lax in the past. Both the last Labour government and this Conservative government have tightened them up.The edited video shows Balls saying: “I think that it is important that you make sure the non-dom rules work in a fair way. I think they were too lax in the past. Both the last Labour government and this Conservative government have tightened them up.
“That is something I will continue to look at. I think if you abolish the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.”“That is something I will continue to look at. I think if you abolish the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.”
The Tory version of the video then ends abruptly after the Tories chopped off the final sentence in which Balls pledged that a Labour government would take tougher action against non-doms. Labour sources said the Tory tactics had rebounded on the chancellor and had served to show that he was defending an anomaly in the tax system that benefits millionaires.The Tory version of the video then ends abruptly after the Tories chopped off the final sentence in which Balls pledged that a Labour government would take tougher action against non-doms. Labour sources said the Tory tactics had rebounded on the chancellor and had served to show that he was defending an anomaly in the tax system that benefits millionaires.
The Labour sources also challenged the Tory claim that they were tinkering with the system. They said they were abolishing it for beneficiaries who live in the UK for more than two to three years. The sources said that allowing non-dom status for people based in the UK for a short period addressed the issue raised by Balls in his January interview – that some beneficiaries would flee Britain, leading to a loss of tax revenue.The Labour sources also challenged the Tory claim that they were tinkering with the system. They said they were abolishing it for beneficiaries who live in the UK for more than two to three years. The sources said that allowing non-dom status for people based in the UK for a short period addressed the issue raised by Balls in his January interview – that some beneficiaries would flee Britain, leading to a loss of tax revenue.
The shadow chancellor clarified the Labour plans by outlining a three-stage process which would end the non-dom rule for people resident in the UK for more than two to three years. Balls said: The shadow chancellor clarified the Labour plans by outlining a three-stage process that would end the non-dom rule for people resident in the UK for more than two to three years. Balls said:
Labour said it had worked carefully to ensure the change would lead to an increase in tax revenue. It cited research by the tax barrister, Jolyon Maugham QC, who said the change could raise “well north of £1bn”. The Tories said that Maugham was a Labour supporter. Labour said it had worked carefully to ensure the change would lead to an increase in tax revenue. It cited research by the tax barrister, Jolyon Maugham QC, who said the change could raise “well north of £1bn”. The Tories said Maugham was a Labour supporter.
Osborne had earlier said: “The small print of Labour’s policy makes clear that they are not actually abolishing non-dom status. Either they are going to abolish non-dom status altogether which would cost our country hundreds of millions of pounds in lost tax revenues and lost investment – the reason they did nothing on this during 13 years in office. Or they are just tinkering around the edges and making small adjustments to the rules on how long people can be non-dom.”” Osborne had earlier said: “The small print of Labour’s policy makes clear that they are not actually abolishing non-dom status. Either they are going to abolish non-dom status altogether, which would cost our country hundreds of millions of pounds in lost tax revenues and lost investment – the reason they did nothing on this during 13 years in office. Or they are just tinkering around the edges and making small adjustments to the rules on how long people can be non-dom.””
Nick Clegg defended the non-dom rule on the grounds that it allowed people to come to Britain, some of whom were not “massively rich”, without having to pay tax on income outside the UK.
In remarks that went beyond the Tories, who limited themselves to criticising Labour for inconsistency, the deputy prime minister said: “As Labour themselves have been forced to admit, there is a role for allowing people to come here who want to play by the rules, who aren’t necessarily massively rich, to nonetheless have a particular tax status during the time they are in Britain.”
Related: How much money would ending non-dom tax status raise for Britain?Related: How much money would ending non-dom tax status raise for Britain?
Miliband said in a speech in Warwick announcing the policy: “The truth is we found a way to do this which independent experts say is going to raise money and you have seen many people out this morning saying it will raise at least hundreds of millions of pounds, and it is the right thing to. People will have a choice at the next election, they can carry on with the non-dom rule which is what George Osborne is saying this morning.Miliband said in a speech in Warwick announcing the policy: “The truth is we found a way to do this which independent experts say is going to raise money and you have seen many people out this morning saying it will raise at least hundreds of millions of pounds, and it is the right thing to. People will have a choice at the next election, they can carry on with the non-dom rule which is what George Osborne is saying this morning.
“They want to keep the non-dom rule which has one rule for one set of people and another set of rules for another and we are going to abolish it. That is the choice the electorate are going to face, and it goes to the bigger choice we face, how do we succeed as a country. I have said consistently through this campaign they they think if you look after the people at the top, it will help everyone else. I don’t think it works; I think you have to put working people first.” “They want to keep the non-dom rule, which has one rule for one set of people and another set of rules for another, and we are going to abolish it. That is the choice the electorate are going to face, and it goes to the bigger choice we face – how do we succeed as a country. I have said consistently through this campaign that they think if you look after the people at the top, it will help everyone else. I don’t think it works; I think you have to put working people first.”
The Labour leader added that no other developed country had this kind of rule. “Let us be clear about this, we are abolishing this rule. It is wrong to have people in this country 15, 20, 30 years and not pay tax on your worldwide income. I think the British people are fed up with it.”The Labour leader added that no other developed country had this kind of rule. “Let us be clear about this, we are abolishing this rule. It is wrong to have people in this country 15, 20, 30 years and not pay tax on your worldwide income. I think the British people are fed up with it.”
He dismissed suggestions of an exodus of talented entrepreneurs. “There are many reasons people come to Britain and we have heard these arguments before when we introduced the 50p tax rate. It is what people with special privileges say when they want to justify carrying on with those privileges.”He dismissed suggestions of an exodus of talented entrepreneurs. “There are many reasons people come to Britain and we have heard these arguments before when we introduced the 50p tax rate. It is what people with special privileges say when they want to justify carrying on with those privileges.”