Darling proposed in his pre-Budget report that non-domicile foreigners who have been living in the country for at least seven years should pay an annual £30,000 flat rate tax.
But in an interview with the Financial Times Lord Jones said the tax changes threatened London’s title as a world centre for finance.
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.”
The former CBI director general said on recent trips abroad he had been asked “Does this mean you don’t want us?” which got him worried that skilled individuals would begin looking elsewhere.
He said the UK would remain attractive to young people looking to move here on a temporary basis but insisted that the Government had to “get the message across to these people that it’s seven years before this begins to bite”.
Liberal Democrats Shadow chancellor Vince Cable says having a Government minister who is also acting as an opposition spokesperson is “utterly bizarre” and “undermines any last shred of confidence in what the Government is doing”.
He says: “These comments confirm that the Government’s policies on non-dom investors are proving counter-productive and damaging. 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 whilst being a flea bite for the super-rich like Mr Abramovich and Mr Mittal. Now that the non-doms are doing their sums, it is clear that half or more of them may simply walk away. The revenue gain to the Government will be tiny.”