Tuesday, October 02, 2007

So why are civil servants doing political work?

Well, you will no doubt have heard that George Osbourne has announced to planned tax cuts, by raising the threshold for the tax on death, otherwise known as inheritance tax to £1 million, whilst also eliminating stamp duty for first time buyers for houses up to £250,000.

These adjustments will cost around £3.5 billion, or 0.7% of the total size of the state. In terms of ordinary people, think of taking home say £20,000 in which case we are talking about a budget change of £140.

Now this is to be funded by changing the rules for non domiciled tax payers. These are people who mostly live here but are resident abroad for tax purposes. They have to go through quite a few hoops to get that status, so presumably it makes sense to do so.

The Conservative party will levy a fee for this status of £25,000 per year. We estimate that there are of the order of 150,000 such people, and if all paid that would raise £3.75 billion. You can read more, and indeed watch the speech here.

Labour has of course launched into attack mode on this. Benedict Brogan has been getting some interesting government press releases. Apparently civil servants at the treasury have been digging up the numbers to trash the Conservative claims:

What strikes me though is the scale of the Labour spin operation tonight, which is designed to turn a "Tories promise you tax cut" story into a "Tories rocked by funding row" tale. I have in my inbox a press release from the Labour Party Press Office, in which Alistair Darling, the Chancellor of the Exchequer, claims: "Today George Osborne made a £3.5 billion tax commitment. Treasury analysis shows it is impossible for him to raise the money he needs to pay for this commitment from his proposals on residence and domicile. Initial costings by the Treasury show that George Osborne's proposal would raise a maximum of £650m, leaving George Osborne at least £2.9 billion short. So George Osborne cannot afford the promises he is making. He cannot afford to cut inheritance tax."

Benedict Brogan wants to know what civil servants are doing working on party work, and so do I.

The other thing of note is this:

The treasury have claimed to have no figures on how much non domiciled people earn abroad, yet when it becomes a political issue, within hours they claim they do.

Is this really the end of spin in government?


flashgordonnz said...

As a non-domicile, paying GBP25k (pa?!) is out of the question.

Why is there a need to replace the lost revenue? Surely it should be about cutting spending...? Do the tories HAVE a working group or allied think-tank keeping track of where Zanulab is wasting money? If so, why can't they trot out the numbers/disasters to show the public?

I thought Tories recently attacked the govt for proposing to remove the domicile concept?

Letters From A Tory said...

It is pretty shocking how much control Labour have over government departments. The civil service are always resistant to change and they'd probably be quite happy to see Labour stay in power.