Non-dom numbers: growth in the City is key
So you write about non-doms for years and nobody, apparently, listens. And then suddenly, after a week in politics that has witnessed the most sensational turnaround in public opinion that I can remember, you find yourself at the centre of political debate.
Since the big issue appears to be how many non-doms might pay the Tories' new levy of £25,000, let me suggest this.
The Treasury's own figures for the growth in non-doms are interesting, and could add some understanding to the debate.
Here they are:
Tax Year |
No of individuals |
1996-97 |
68,000 |
1997-98 |
83,000 |
1998-99 |
91,000 |
1999-2000 |
98,000 |
2000-01 |
106,000 |
2001-02 |
111,000 |
2002-03 |
110,000 |
2003-04 |
111,000 |
2004-05 |
115,000 |
2005-06 |
114,000 |
Now what do they say to you? To me, they say that the growth in numbers took place between 1996 and 2001. Now Poland joined the EU in 2004, so I think we can probably dispense with the idea that most of these people are just Polish nurses (as both the Lib Dems and Labour are trying to rather vainly argue).
It suggests to me that the growth in the City in the late 90s can be the only explanation. In fact, I find it difficult to imagine that the bulk of the non-doms can have come from anywhere else. Premiership footballers or Russian oligarchs? There aren't enough of them. Entrepreneurs coming to the UK as a result of low corporation tax and positive economic prospects? Perhaps.
The number of non-doms may have risen since 2005 for several reasons. Further huge growth in the City, with the internationalisation in particular (as London becomes a global centre), and the influence of private equity and hedge funds, is sure to have pumped up the numbers. 150,000? Maybe.
Ultimately, we just don't really know who these people are and what their individual calculations about the Tory levy are likely to be. But I think we can say the City people are likely to be a good deal better off than the Polish plumbers and more likely to have to fork out at least a little bit of their offshore income.
I'm amazed by 'figures close to Brown' briefing that they can unpick the Tory proposals. I don't think they have a hope in hell of doing that, because of a lack of information.
Ultimately, the Tory tax plans are about £3.5bn of government revenues. That's less than 1% of current government revenues and spending.
Alistair Darling said by contrast that the plans created a 'gaping black hole' in government finances.
With that in mind, can I ask: whose credibility is really at risk here? The Tories', or the chancellor of the Exchequer's?
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