Hunt’s plan to scrap non-dom tax status intensifies pressure on Labour

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Good morning. The chancellor Jeremy Hunt is considering scrapping the non-dom tax regime: in a story that will have caused both Keir Starmer and Rachel Reeves to sit bolt upright upon reading it. Some thoughts on that below.

Bad news for Labour

Labour’s plan to replace the existing non-dom system does an awful lot of work: it promises the funds to the NHS workforce and to breakfast clubs in primary schools, both of which will be a big part of their “retail offer” to voters at the election. And it is a not-particularly subtle way of reminding voters about Rishi Sunak’s green card and that his wife, Akshata Murty, previously benefited from non-dom status while living in Downing Street.

So our story that Jeremy Hunt is contemplating scrapping the non-dom regime in the Budget next week will send shivers down the spine of the Labour leadership and the shadow Treasury team in particular:

Jeremy Hunt has drawn up emergency Budget plans to scrap or scale back Britain’s “non-dom” tax rules, in the event that he needs to raise billions of pounds to fund mass-market pre-election tax cuts. The chancellor has a “secret project list” of potential revenue-raising measures for the exchequer, according to Treasury insiders, as he looks for ways to fund cuts to national insurance or income tax rates in next week’s Budget.

If Hunt does get rid of the non-dom scheme, it will put further pressure on Labour to end up exactly where they don’t want to be in an election year: having to talk about broad-based tax rises and/or having to further dilute their spending pledges.

Of course, floating options that are never introduced is a big part of how the Treasury manages expectations going into fiscal events. Labour will desperately hope that this is one of those.

Now try this

I saw Perfect Days (having had to cancel my plans to see it last Friday). The soundtrack is lovely, it’s beautifully shot: but bluntly it has no good reason to go on as long as it does. There’s a moving 70-minute film about an ordinary life well lived and small kindnesses and heartbreaks we all go through. Unfortunately it is contained within a film that goes on for 123 minutes.

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