In his speech to the Conservative Party Conference, Shadow Chancellor George Osborne said:
"There are currently a number of people living in Britain who register for non-domiciled tax status offshore. It is a good thing for Britain that they live here and bring their talent and their investment to our economy. I make this promise: I am not going to tax all that income as Gordon Brown has persistently threatened to do. But in return for that promise and the certainty it brings, we will charge a flat annual levy of around £25,000 for those who register for non-domicile status.
It is easy to administer, difficult to avoid and strikes the right balance between a fair tax system and a competitive economy. Introducing this offshore levy covers the cost of abolishing stamp duty for 9 out of 10 first time buyers. And it also enables me to make one further commitment to help those families striving for a better life.”
“The next Conservative Government will raise the Inheritance Tax threshold to £1 million.
That means we will take the family home out of inheritance tax. In a Conservative Britain, nine million families will benefit. In a Conservative Britain, only millionaires will pay death duties. In a Conservative Britain, you will not be punished for working hard and saving hard. You will not be penalised for wanting a better life for your children. Taken together our measures on stamp duty and inheritance tax represent the most important reform of capital taxes for a generation.”
“The next Conservative Government will abolish stamp duty for almost all first time buyers.
Anyone who buys their first home for under £250,000 will pay no stamp duty. We will take 200,000 people a year out of stamp duty altogether; that’s one million people over a Parliament; And our message to the family working long hours, saving every spare pound to afford their first home is this: Your dream is our dream too. Your aspiration is our aspiration. We will get you out of tax and into your home.”
Notes to Editors
Opportunity, aspiration and fairness
New Challenges: The aspiration of owning your own home has become an increasingly distant dream. Thanks to high house prices and rapid increases in stamp duty, the bottom rungs of the housing ladder are broken. And once on the ladder, parents find it harder to help their children when they die because of inheritance tax, which now threatens four in ten households.
Old Solutions: Labour’s approach is to increase stealth taxes on home ownership, through stamp duty, inheritance tax and council tax rises, while their top-down approach to planning builds resentment in local communities and has resulted in a sharp slow-down in the growth of housing.
Change required: We will abolish stamp duty for 9 in 10 first time buyers by raising the threshold for first time buyers to £250,000. We will raise the threshold for inheritance tax to £1 million, so that only millionaires pay inheritance tax. For 98% of families, this will take the family home out of inheritance tax altogether. And we will pay for it by asking those with untaxed offshore income to pay a flat rate charge to contribute to living in Britain. These changes are separate from our Family Fund from new green taxes which will be used to pay for lower taxes for families.
Opportunity: Exempting first time buyers from stamp duty
Conservatives would exempt first time buyers from stamp duty, for purchases of up to £250,000, saving 200,000 first time buyers a year an average of £2,000 each.
Under Labour, over half of first time buyers pay stamp duty. Under the Conservatives it will be less than one in ten. Exempting first time buyers from Stamp Duty for purchases of up to £250,000 will cost £400m
Aspiration: Taking nine million family homes out of inheritance tax
The Conservative Party will abolish inheritance tax for everyone who dies leaving under £1 million. This will lift almost nine million people out of the inheritance tax net.
According to independent research by Scottish Widows, instead of 37% of households being caught in the inheritance tax net, only the top 2% would be affected.
Instead of average households in 177 local authorities being eligible for inheritance tax – it will now only affect average households living in Kensington and Chelsea, the most expensive local authority in the UK. (Based on average house prices over £210,000 and £910,000; in addition to average household wealth of £92,034 (Sources: Land Registry; CEBR)
The change will cost £3.1bn.
Fairness: Ending the uncertainty over the tax treatment of non-doms
We will end the uncertainty over the tax status of non-domiciled residents, creating a flat rate Offshore Domicile Levy on those who are domiciled offshore for tax purposes.
The Levy will safeguard the attractiveness of the UK as a place for wealthy foreigners to live, as their tax status will be guaranteed. At the moment it has been under review by the Government for five years.
A cautious estimate is that the Levy would be paid by 150,000 UK residents of foreign origin who are tax domiciled offshore. If it was set at £25,000 a cautious estimate is that it would raise £3.5bn.
Setting the Levy at around £25,000 strikes the right balance between ensuring everyone contributes their fair share towards our public services and maintaining the competitiveness of the UK as a location for high net worth individuals.
Raise Inheritance Tax Threshold to £1 million -£3,100m
Raise stamp duty threshold to £250,000 for first time buyers -£400m
Offshore Domicile Levy +£3,500m
CHECK AGAINST DELIVERY
The question people are asking of us this week is simple: are we ready to lead?
Are we ready to lead our country out of a decade of disappointment and betrayal of trust.
The British people want change – and they want to know if we are that change.
This week let us send the resounding answer.
Yes we are ready.
Yes we are the change.
Yes, under David Cameron, this Conference says with one voice. United. We are ready to serve our country.
We will put ourselves forward for office as the ally of those who aspire;
the friend of those who are left behind;
the champion of those who strive for a better life for themselves and their children.
Last week in Bournemouth you saw the past. This week in Blackpool you see the future.
I come to you today with this argument.
Our world is living through a new economic revolution as far reaching as the Industrial Revolution two centuries ago.
The cause of this new revolution is the fusion of extraordinary technology with the power of global free markets –and its impact this time is felt not just in the mill towns here in Lancashire, but the business zones of Shanghai and the technology parks of Bangalore.
I believe that this new economic revolution offers us an unrivalled moment of hope and opportunity for mankind.
It gives people power over their own lives, unimaginable even a generation ago.
And it is going to change for ever the relationship between citizen and state.
But the tragedy is that we have a Prime Minister who spent the first half of his political career resisting the coming revolution, and the second half, failing to understand it when it arrived.
Gordon Brown still thinks he can command, control, dictate, regulate and tax.
His most senior civil servant says he holds a ‘very cynical view of mankind’. It is the antithesis of our age.
If you want an election, Prime Minister, then get on and call it: because your cynicism and your fear will lose every time to our hope and our optimism.
He can never be the change the country needs. We can.
For it is our Party, provided we never thrive on fear, nor turn our back on the modern world, that alone truly understands this economic revolution and the opportunity it brings.
It is our Party that has at its core an instinctive trust in the choices and the aspirations of free people that represent the spirit of our times.
If we are to offer change then we need the right economic policy.
So let me start with one of the hardest messages.
We will always put stability first.
We agreed that at our last Conference.
Today, as a decade of debt leaves Britain exposed to financial turbulence on the world credit markets, we can see that what was the right decision then has become the essential decision now.
The queues of savers trying to take their deposits out of a high street bank was something this country hasn’t seen since the Victorian age.
It was a crisis that shook the stability of our financial system.
And let us be clear who has to take a large part of the blame: the man who was Chancellor of the Exchequer over the last ten years.
He created the system designed to stop a run on a bank – and it failed.
He ran the system that was supposed to reassure savers – and it failed.
He encouraged the private debt, and built up the public debt that has left us exposed.
We will make sure that people understand where the responsibility for this mess lies.
But as usual when things go wrong, the Prime Minister disappears and pushes out someone else to make the excuses.
Isn’t it ironic his latest book is called Courage?
Courage, by Gordon Brown.
Next week we’ll have Charisma, by Alistair Darling.
We need a deposit scheme savers trust and we need to entrench the independence of the Bank of England.
But the real lesson is clear: an economy built on debt is living on borrowed time.
Stability underpins our economic policy.
But its purpose is prosperity for all; and its method is freedom.
The report from John Redwood and Simon Wolfson sets out how we liberate our economy to compete with the likes of India and China.
Cut government regulation, planning restriction and red tape.
Get people and goods moving freely on uncongested roads and high speed railways and Crossrail.
And help businesses create jobs with lower taxes.
I want lower taxes.
I want simpler taxes too.
That is why I set up the Tax Reform Commission.
I believe lower, simpler taxes are vital for Britain to compete.
And I give you this personal promise.
I will approach each Budget seeking ways, consistent with sound public finances and economic stability, to reduce taxes on businesses and families striving for a better life.
That’s the real difference between this Chancellor and the next one.
He is always looking for ways to put taxes up.
I will always be looking for ways to bring taxes down.
And not just for big companies, important as they are – but for the small businesses too.
You don’t need to tell me about the sweat and the hard work and the dedication that goes into building a successful business.
I’ve watched my father do it all my life. He set up his own manufacturing business forty years ago.
The fortunes of the business were part of the rhythm of my childhood.
The excitement when the new order was won; the long silences when sales were down; the pride that comes from building a business.
I want many others to fulfil their aspiration of owning their own business.
So we are the low tax party.
But it is a mark of our seriousness about lower taxes that I will not promise un-funded, undeliverable tax giveaways to dress up a press conference in an autumn election campaign.
For this party lower taxes aren’t just for Christmas.
They are for life.
The new economic revolution also demands that a government that knows how to look after money and spend wisely.
The government has borrowed in a boom – and now there’s nothing in the bank if rainy days lie ahead.
And Gordon Brown has the cheek to pose as the nation’s bank manager.
The nation’s bank manager. He put up taxes to pay for the NHS and got Derek Wanless to make the case.
Now even this trusted adviser admits most of it was wasted, so yet another report has to be commissioned. What a bargain. £37billion to go from Wanless to clueless.
The nation’s bank manager. He told you he’d help the very poorest and now the numbers of the very poorest rise by 600,000.
The nation’s bank manager. He told you he’d look after your pension then he launched his £100 billion raid on savers.
The nation’s bank manager. Who cost us all two and a half billion pounds by selling our gold at a record low, when it has now reached a record high.
Gordon Brown. The nation’s bank manger. Let’s start queuing round the corner to close our account.
Government must live within its means.
We can’t answer every problem with a pledge to spend more money.
I have committed us to two per cent a year spending rises for the next three years.
This will mean real increases for our public services.
It will mean honouring our solemn international pledges on aid and fighting malaria.
But it will also mean that we share the proceeds of growth.
We are going to make sure that our economy grows faster than our government.
The new economic revolution also demands a government that does not walk away from its obligations on the environment.
We will follow the recommendation of John Gummer and Zac Goldsmith’s excellent report that we must shift the burden of taxation from income to pollution. And we will adopt their idea of replacing air passenger duty with an airline pollution duty.
So empty planes will pay the same as the full ones. And newer, cleaner planes will pay less than the older, polluting ones.
But this is my pledge: every penny a Conservative Government raises in new green taxes will go into our Family Fund and straight back to the taxpayer with matching tax cuts. No more stealth taxes.
For people elect Conservative Governments to help the strivers and families struggling on limited budgets.
So let me make this clear today.
I’ve heard it suggested that in my first Budget I am going to tax people who go to the supermarket. What do you think I am? Off my trolley?
You will not be out of pocket with a Conservative Government.
The new economic revolution needs a government in-tune with the modern world.
Every failed scheme of Gordon Brown – from his NHS reforms to his complicated tax system to his public service targets – all boil down to the same error: his over-weaning belief in the ability of central government to gather all information to itself and make all the decisions.
The basis of the new economy is the exact opposite.
It is based on the linking of millions of locally held pieces of information.
It works by harnessing the power of billions of individual choices.
It succeeds by trusting in the collective wisdom that emerges from free people making individual decisions about their own lives.
That’s how Google works. It’s how FaceBook works. It’s how MySpace works.
But it is not how Gordon Brown works.
We Conservatives instinctively understand this new economy – and frankly he does not.
It shone through in every sentence of the speech he gave last week. Not a word on free markets or enterprise or individual choice.
It’s been reported he copied the speech from others. But, you know, I read every word. It was pretty bad. I’m fairly sure he wrote it himself.
This Party has had its own period of appearing to be out of touch with the modern world;
of appearing not to understand that people want to commit to each other in civil partnerships;
of appearing not to understand that many women want both careers and families;
of not talking enough about the national health service or comprehensive education.
But thanks to David Cameron we’ve worked hard to change our Party.
Now we are the champions of modern Britain.
And one of the greatest challenges of modern Britain is how we help people get on to the housing ladder.
Each year it becomes more difficult for millions of young families.
I think it is time we did something about it.
We need to build more houses so supply meets demand. That’s the long term answer to the housing crisis.
But we also need help now for families struggling to cover their first deposit and the tax bill.
A decade ago the average family paid no stamp duty on their first home.
Thanks to Gordon Brown’s stealth taxes they now have to find sixteen hundred pounds in tax – on top of their deposit.
And the result? The number of first time buyers is at its lowest level for 27 years.
So I can tell you now: the next Conservative Government will abolish stamp duty for almost all first time buyers.
Anyone who buys their first home for under £250,000 will pay no stamp duty.
We will take 200,000 people a year out of stamp duty altogether;
that’s one million people over a Parliament;
And our message to the family working long hours, saving every spare pound to afford their first home is this:
Your dream is our dream too.
Your aspiration is our aspiration.
We will get you out of tax and into your home.
For we are on your side.
How will we pay for it?
You know some advised me, when I got to this part of this speech, to skip the details. Bury it in the small print, they said. Do a Gordon Brown, they said.
It maybe how he governs but it’s time for change.
So let me be absolutely straight with you
There are currently a number of people living in Britain who register for non-domiciled tax status offshore.
It is a good thing for Britain that they live here and bring their talent and their investment to our economy.
I make this promise: I am not going to tax all that income as Gordon Brown has persistently threatened to do.
But in return for that promise and the certainty it brings, we will charge a flat annual levy of around £25,000 for those who register for non-domicile status.
It is easy to administer, difficult to avoid and strikes the right balance between a fair tax system and a competitive economy.
Introducing this offshore levy covers the cost of abolishing stamp duty for 9 out of 10 first time buyers.
And it also enables me to make one further commitment to help those families striving for a better life.
When inheritance tax was first introduced it was designed to hit the very rich.
But the very rich hire expensive advisers to make sure they don’t pay it.
Instead, thanks to Gordon Brown, this unfair tax falls increasingly on the aspirations of ordinary people.
So now well over a third of homeowners in Britain have the threat of inheritance tax hanging over them.
These are people who have worked all their lives.
People who have saved money all their lives.
People who have already paid taxes once on their income.
People whose only crime in the eyes of the taxman is that instead of spending their savings on themselves, they want to pass something on to their families.
People who feel the most basic human instinct of all: they aspire to a better life for their children and their grandchildren.
Our Government will be on their side.
The next Conservative Government will raise the Inheritance Tax threshold to £1 million.
That means, we will take the family home out of inheritance tax.
In a Conservative Britain, nine million families will benefit.
In a Conservative Britain, only millionaires will pay death duties.
In a Conservative Britain, you will not be punished for working hard and saving hard.
You will not be penalised for wanting a better life for your children.
Taken together our measures on stamp duty and inheritance tax represent the most important reform of capital taxes for a generation.
We will take ten million people out of these taxes on aspiration
We will simplify the tax affairs of millions.
For millions of people, today sounds the death knell for death taxes.
We have a new dividing line in British politics.
The dividing line between a Labour Prime Minister who has taxed a generation out of home ownership and a Conservative Government that will abolish stamp duty for first time buyers.
The dividing line between a Labour Prime Minister who takes away the homes of those who have saved all their lives and a Conservative Government that takes people’s homes and savings out of inheritance tax.
The dividing line between a Labour Prime Minister who penalises couples and presides over social breakdown, and a Conservative Government that supports marriage and encourages families to come together.
The dividing line between a Labour Party that punishes those who aspire for a better life and a Conservative Government that says clearly: we are on your side.
We are the Party of aspiration.
And I for one am happy to put these clear choices before the British people at a general election.
I first stood here before you as Shadow Chancellor in this hall two years ago.
Each day I have done this job I have been conscious of the great trust that you have placed in me.
And I am grateful every day for the faith you have shown.
But an even greater responsibility lies ahead.
I don’t look lightly on the job I aspire to do.
I am aware of the heavy burdens and high responsibilities of the Chancellor of the Exchequer.
But if I have the honour to occupy that great office of state, and we as a Party have the honour to serve our nation in government, I want it to be said of us:
We served not for the trappings of power.
Or the seductions of office.
We served to help Britain meet the great challenges of our time.
We served to help the British people realise their aspirations.
And we were brave enough to take the difficult decisions of the modern age.
Let us fulfil the great promise of our nation.
The promise that life will be better for us than it was for our grandparents.
The promise that life will be better for our grandchildren than it is for us.
For it falls now, to all of us, to take our place in the great story of this great Party
We have changed our Party to face the modern world.
Now let us change our country."