Alistair Darling

A day or so after our hapless Chancellor of the Exchequer announced his plan to change the taxation status on non-domiciled taxpayers last year, I happened to have lunch with a businessman who fully understood the impact. He explained to me that the proposals were a disaster for the UK economy and that Alistair Darling would have to climb down. It wasn't so much the annual charge (which was not too dissimilar from the Conservative proposal which the Chancellor was trying to copy - £30K per annum rather than £25K) It was the retrospective and inquisitive nature of the proposals. The annual levy would have an effect on some, who would see it as a base which future Chancellors would increase as an easy source of money - so they might as well relocate to another country now. But this would be small beer. The real killer was the proposal to extend the net to include off-shore trusts. My lunch companion was adamant that the Chancelor would have to climb down. He climbed down yesterday.


Yesterday's announcement will reduce the damaging impact that the Chancellor's original proposals would have had on the UK economy - so they are welcome. And there's room for a debate about taxation of non-doms. But two questions arise about the competence of Alistair Darling. Firstly, just how incompetent is he. How can a Chancellor, with his team of officials, propose a new tax which an informed businessman knows immediately and with certainty that he would have to abandon. And we've seen exactly the same sort of climb down over Capital Gains Tax. It may be that Gordon Brown is telling him exactly what to do, but it does make Alistair Darling look hopelessly incompetent. And secondly. how often can a Chancellor stand before us just shrugging his shoulders helplessly, like a cork being tossed about on an angry ocean, before he disappears under the waves of a re-shuffle.