Voices: There’s one tax pledge Tory leadership candidates won’t mention

The Tory leadership contest is well and truly under way, with an unrelenting rush of tax pledges from contenders – a £330bn tombola of unfunded Tory tax cuts that are as pie in the sky as the candidates themselves. It’s almost as though they’re regretting voting through 15 tax rises in the last two years.

But there’s one commitment on tax you can be sure they won’t make – and that’s abolishing non-dom status, like Labour has pledged to do.

The Independent’s front page on Tuesday – which revealed that Sajid Javid used non-dom status while an MP in the Treasury – is the latest revelation, with a string of leadership candidates being accused of attempting to lower their tax bills.

From current chancellor Nadhim Zahawi’s tax affairs under investigation by HMRC, to the suggestion the former health secretary used an offshore trust while working at the Treasury, and of course those many stories linking Rishi Sunak to practices to avoid paying taxes in Britain – the rap sheet is getting longer and longer.

As working people’s taxes rise to their highest level in 70 years, this smacks of hypocrisy. It also explains why Tory leadership candidates will never get behind calls to abolish non-dom status.

The non-dom loophole is more than 200 years old, and allows UK residents to claim their permanent homes are abroad so they don’t pay UK tax on overseas income. That’s the case even if you’ve lived here for up to 15 years.

The idea that changing the rules will be bad for investment and business is as outdated as the loophole itself. Take Canada or Germany – which requires people to pay their taxes after just six months; or America where you pay tax from day one. There is no question at all that the US isn’t a great environment for entrepreneurship and investment.

That’s why Labour will abolish non-dom status, and introduce a modern scheme for people who are genuinely living in the UK for short periods to allow us to continue to attract top international talent. We’ll also crack down on the use of hidden offshore trusts that allow people to avoid paying tax here in the UK.

The truth of the matter is that despite throwing every unfunded tax cut they can to see what sticks, not one of the Conservative leadership candidates understand that what people want to see is fairness in our tax system.

A fairer tax system doesn’t mean dishonest and unfunded tax pledges, and it doesn’t mean diving into the pockets of working people first in the midst of a cost of living crisis – the only G7 country to do so.

It means instead looking towards oil and gas producers making booming profits, something that Sunak had to be dragged kicking and screaming to do after five months of frustration from families watching their bills soar. It means that instead of giving private schools a VAT exemption, you spend that £1.7bn on our state schools that need that support right now.

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Instead of giving private equity fund managers a tax break, you tax their earnings as you would any other form of income from work, and put that money into mental health services. Instead of keeping business rates rising on our high streets, you shift the burden of tax onto online giants.

These are the sensible, fair and fully costed tax plans which Labour has set out. They are choices all the Tory candidates could make. But my bet is they won’t.

They don’t understand that people want a fairer, stronger economy, and they don’t understand how much we need growth to get our public services back on their feet. They’re so out of ideas that all they can do is grasp for unfunded, pie-in-the-sky offers that provide little reassurance to families wondering what is next for our economy.

There are no plans for how they will grow the economy, grasp the opportunities that will help us become a global leader in next generation industries, or tackle the challenges facing us with the seriousness they require.

Only Labour will provide that fresh start that our country needs. And that starts with a fairer tax system.

Rachel Reeves is shadow chancellor of the exchequer and the Labour MP for Leeds West