A Labour government would end the non-domiciled tax status, Party Leader Ed Miliband will announce today, in what some observers are already calling the biggest announcement of the election campaign so far. Non-domiciled, or “non-dom”, status, allows British residents to avoid paying tax on earnings from sources outside Britain if they can prove that either they, their father, or grandfather was born in another country considered to be their ‘true’ home. The non-dom does not have to spend any time in the country they claim to be their true home. Labour has admitted uncertainty over how much money would be raised by ending non-dom tax status, but hopes to raise money in the hundreds of millions with the new rules. 115,000 people would be affected by the changes. The move marks an attempt by Labour to differentiate itself from the Conservative Party, with Labour hoping to portray the pledge as a clear targeting of the rich. Some observers have noted that a change in non-dom tax rules could risk losing more in tax, given the taxes and fees paid by non-dom residents.
Royal Dutch Shell has agreed to buy oil and gas exploration firm BG group, in a deal valued at £47 billion. The acquisition could produce a company with a value over £200 billion, and looks set to be one of the biggest of 2015 – a year already being seen as a bumper year for large scale corporate mergers. BG Group is Britain’s third largest energy firm, and was formed in 1997 after British Gas split into two companies, BG Group and Centrica. Share prices for BG Group rose 42 percent this morning in response to the news, though its share price had fallen by 20 percent over the past year. While Shell and BG Group have announced expected savings of US$2.5 billion through the deal, Shell’s Chief Executive reiterated a commitment to investing in North Sea oil.
The World Bank will work together with the China-led Asian Infrastructure Investment Bank (AIIB) in alleviating poverty, World Bank President Jim Yong Kim has said. In a speech in Washington on Tuesday, Kim endorsed the AIIB, along with the New Development Bank founded by the BRICS nations, as having the potential to become great new forces in the development of poor and emerging markets. Kim also announced plans to meet with Chinese officials next week during meetings between the World Bank and International Monetary Fund to discuss collaboration. Co-financing infrastructure projects could be an option, Kim suggested. While the US has expressed opposition to the AIIB, the World Bank’s announcement marks a softening of Washington’s stance on the bank that has been endorsed by several other leading western nations.
The Labour Party’s unveiling of plans to end the non-domiciled, or non-dom, tax status in Britain makes most of the headlines today. The Guardian leads with the story, explaining that “All who live permanently in the UK will pay all their tax here”. The paper calls the non-dom tax status “a colonial-era symbol of inequity in the tax system”. The Financial Times also leads with the story, writing in its headline that Labour Leader Ed Miliband has vowed to “ban rules that make UK ‘a tax haven’ for rich” people. The move “puts pressure on Osborne to respond”, the paper writes, which notes that the non-dom tax rule was established in Britain in 1799. The Independent leads with the same story, noting that Labour is moving to target the wealthy in a “new dividing line with Tories”, as the move to end non-dom tax status “follows pledges on 50p top rate and mansion tax”. The Times leads with the line that Miliband is ‘raiding’ the rich with the proposals. Labour claims the plan “will raise hundreds of millions” in tax, the paper writes. The paper calls the news “the biggest announcement of the election campaign so far”. The Daily Telegraph leads with news that “Children who fail Sats will face resit” in their first year of secondary school under a Conservative government. The plan aims to “boost education standards”, with the resit rule only applying to primary school-leaving exams in English and maths.
British Media on China
On Chinese tourists: Chinese authorities will keep records of Chinese tourists found to have engaged in illegal or inappropriate behaviour abroad, China’s National Tourism Administration announced on Monday, with the story receiving coverage from The Guardian, The Independent and The Daily Telegraph. The Independent reports that under new plans, “Regulators would be hired to monitor incidents of bad behaviour through local tourism bureaus, media reports and complaints from the public”. The Daily Telegraph reports that “inappropriate behaviour of some Chinese travellers has earned the country a bad reputation around the world, to the government’s embarrassment”. The Guardian’s agency piece writes that authorities would work with tourists “to fix their conduct”.