Trade and investment minister Digby Jones has broken ranks with the Government to attack its planned crackdown on non-domicile individuals living in the UK.
Darling proposed in his pre-Budget report that non-domiciliaries who have been living in the UK for at least seven years should pay an annual £30,000 flat-rate tax.
But Lord Jones said in an interview with the Financial Times that the proposals threaten London’s title as a world centre for finance and will deter people from investing in Britain.
He said: “I can give you five reasons as to why you should invest in Britain before you go and invest anywhere else in Europe but maybe there were seven and now there are five.”
Former Confederation of British Industry director general Jones said that on recent trips to India and the Arabian Gulf, he had been asked: “Does this mean you don’t want us?”
He said he was concerned that skilled people would consider living elsewhere as a result of the tax changes, which were not consulted on.
LibDem Shadow Chancellor Vince Cable says: “It is utterly bizarre that a Government minister is also acting as an opposition spokesperson. I wonder how long Gordon Brown will put up with this kind of freelancing.
“The Conservatives and Labour Government came up with a half-thought-out idea for a flat-rate charge which will drive away many useful and productive workers and investors while being a flea bite for the super-rich like Mr Abramovich and Mr Mittal.”