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General Election 2015: Watch Ed Balls explain why scrapping non-dom status would cost Britain money

Labour's big announcement is undone as video emerges of Shadow Chancellor ruling out the policy in January because it would cost taxpayers more

Matt Dathan
Wednesday 08 April 2015 12:50 BST
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Thumbs up? All eyes will be on Ed Balls' hands this afternoon
Thumbs up? All eyes will be on Ed Balls' hands this afternoon

No sooner had Ed Miliband announced a popular Labour policy to scrap the non-dom tax status, a video emerged of Ed Balls explaining how such a move would end up costing Britain more.

It was in January this year when the Shadow Chancellor ruled out stripping wealthy British residents who do not pay tax on their overseas earnings of their non-domicile status.

"I think if you abolish the whole status then it probably ends up costing Britain money because there’ll be some people who will then leave the country, but I think we can be tougher and we should," he said in an interview with BBC Radio Leeds.

But speaking this morning, Mr Miliband contradicted these remarks: "I don't buy the argument about it not raising resources and nor do independent experts."

Mr Balls attempted to clarify his comments, insisting they were consistent with today's announcement. Writing in a blog post on his website, he said the policy would give temporary exemptions for students and foreign workers seconded to the UK for a period of "two or three years".

He writes: "Independent experts have said that the changes we are proposing today – abolishing non-dom status while allowing for genuine temporary residence – will raise revenue."

It was looking like it could be a good day for Labour, with Dragon's Den star Duncan Bannatyne saying today's announcement had convinced him to switch his vote from the Tories to Labour.

The businessman only last week signed a letter from 103 business leaders in support of the Conservative party's economic policy.

And the announcement seems to have caused disarray in Conservative ranks with apparently contradictory statements from the Chancellor George Osborne and Education Secretary Nicky Morgan this morning.

Duncan Bannatyne has backed Labour's pledge to scrap the non-dom tax status

But the positive headlines for Labour soon became overshadowed by the recording of Mr Balls pouring scorn on the idea of abolishing the controversial tax status, raising questions over whether the two figures at the top of the party agree on the policy.

This morning Mr Balls claimed the Tories had circulated an edited version of the video "to deliberately mislead people". But fear not - our video above includes his quotes in full and you can read them below.

Asked by BBC Radio Leeds in January whether he would close the loop-hold of the non-dom tax status “so we can have these people taxed properly”, Mr Balls said:

“I think it’s important that you make the non-dom rules work in 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’s something I’ll continue to look at.

“I think if you abolish the whole status then it probably ends up costing Britain money because there’ll be some people who will then leave the country, but I think we can be tougher and we should be and we will.”

The Tories have already produced an attack-ad exposing the change of tune by Ed Balls:

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