Zac Goldsmith, the Conservative parliamentary candidate who has an estimated £200m fortune, has given up his “non-dom” tax status after the Tories were hit by stinging accusations that they had once again become the party of the rich.
Mr Goldsmith's non-dom status meant that he did not have to pay tax on offshore earnings. The announcement from the Conservatives' candidate for Richmond Park, who is one of David Cameron's senior advisers on the environment, came moments after the Tory leader was accused by Labour of being a slick PR man who dreamt up policies “on the playing fields of Eton”.
In one of Gordon Brown's most effective performances at Prime Minister's Questions, he signalled a return to class warfare as he slammed the Tories over their plans on inheritance tax, its leader's public school background and Mr Goldsmith's non-dom tax status.
Politicians on both sides of the house immediately detected the input of Tony Blair's former director of communications, Alastair Campbell, as the PM launched a string of personal attacks against Mr Cameron. “The voice may be that of a modern public relations man. The mindset is that of the 1930s,” said Mr Brown, as he criticised the Tories over their plans to cut spending. The Prime Minister added: “The more he talks the less he says.”
No 10 sources confirmed that while Mr Campbell was not present at the regular morning run-through of PMQs, he remained “in touch with various members of the Government”. However, the Prime Minister's official spokesman said that it was his diet, rather than the hand of Mr Campbell, that accounted for Mr Brown's improved performance. “He had a very hearty breakfast,” he said. “He is a full English kind of breakfast guy.”
Mr Cameron attempted to criticise the Prime Minister for his handling of the economy, claiming that the Government's policies had seen Britain fall behind the other countries in the G20 group of industrialised nations.
Mr Brown hit back by citing a plan by the shadow Chancellor, George Osborne, to raise the inheritance tax threshold to £1m: “If he wanted to reduce the deficit, why does he persist in his inheritance tax policy, which is to help his friends with inheritance tax, and a global tax policy to help non-domiciled candidates avoid any tax whatsoever?”
Mr Goldsmith's admission that he had inherited the non-dom status from his father, Sir James Goldsmith, came as a surprise to Mr Cameron, who immediately put him under pressure to change his tax arrangements. He has now said all Tory candidates will have to be resident in the UK for tax purposes to prevent similar embarrassment nearer the general election.
In a speech this week, Mr Goldsmith also said that said he has always paid tax on his locally raised income, insisting that his non-dom status did not save him a large sum.