'Challenge to find the money to fund public services properly'

MP for Ellesmere Port

FOR years the Tories have hit out at Labour’s plan to scrap the non-dom status enjoyed by people who live in the UK, but whose home for tax purposes is overseas.

Non-domiciled people, often referred to as non-doms, only pay UK tax on money earned in the UK. They do not have to pay any tax to the UK on money made elsewhere. They were first introduced as a concept during the age of the British Empire.

Conservatives, including the Chancellor Jeremy Hunt, have long defended the non-dom arrangements, saying they helped to ensure the UK was an attractive place for highly sought after, well-off people to choose to live and work.

Now, all of a sudden, he agrees with us that those with us, as he says, that “those with the broadest shoulders should pay their fair share”.

Well, according to the old adage, imitation is the sincerest form of flattery, but just imagine how much more money there would have been available for our well worn-out public services if Chancellor Hunt and his predecessors had introduced the non-dom policy when we first proposed it long ago. With this probably being the last budget before the election it is rather depressing to see that the Chancellor’s main policy was aimed at wrong footing the Labour Party than repairing some of the damage done over the last 14 years.

You will have learned that the scrapping of the non-dom status is to be used to fund a further reduction in National Insurance contributions. We do not oppose those measures on the basis that the average worker in this country is overtaxed and will continue to be overtaxed as, contrary to the impression that the Government is trying to portray, the tax burden on most workers will continue to rise with the highest tax burden since the Second World War.

Against this backdrop, we acknowledge that whoever becomes Chancellor after the next General Election will face a challenge to find the money to fund public services properly. Of that there is no doubt which is why our Chancellor elect, Rachel Reeves, is undoubtedly a good choice, given her background as a Bank of England economist.

Rachel has vowed to go line by line through the Spring Budget to find places where pockets of money have been stashed in order to help keep our services running and I can think of no-one better to achieve that aim.

The bottom line must be that most members of the electorate understand all too well that most services are in a mess and one of the main objectives of an incoming Labour Government is to turn round those services, including of course the NHS, to the point where they are working well. That is what we achieved the last time Labour was in power and that is a crucial aim of ours moving ahead.

A main plank of our pledges will be to get the economy growing, after years and years of stagnation in the past decade or so. If the UK economy had grown at just the rate of the OECD average over the last 14 years there would have been around £50 billion extra available to spend on public services. That fact alone goes a long way to explaining why the overwhelming feeling most people have now is that they are paying more for less.