Chancellor Alistair not the City’s darling

This week's 'half-term' parliamentary recess is normally a chance for MPs and ministers to unwind. Chancellor Alistair Darling will be spending it wondering how long he can hold on to his job after he was jeered at two City events last week over his handling of Northern Rock and what some see as his ham-fisted approach to non-domiciled foreigners - 'non-doms' - who are now threatening to leave London in droves.

The knives are out for Darling, not just among business leaders but parliamentary colleagues too. One Labour MP told the Sunday Times
yesterday: "We spent 15 years slowly building trust with business and the City - and Darling has managed to destroy that in a matter of months."

Financial experts say there is evidence of hundreds of foreign businessmen losing faith in the Labour government and quitting London for Switzerland and Monaco. The non-doms pay no taxes on foreign income. They may be the source of envy but they are credited with keeping London's service industries - from restaurants and nightclubs to Porsche dealerships - in clover in recent years.

It's not the recently introduced £30,000-a-year charge that's upsetting the non-doms - a joke considering their high earnings - but the demand that they inform the British taxman of their worldwide assets and the closure of a loophole that allowed them to escape capital gains tax in British assets held in offshore trusts. Financial experts say that while this might raise £1bn for the Exchequer over the next four years, twice as much will be lost by non-doms leaving London and taking their spending power with them.

Downing Street claims there is no reshuffle in the offing. But that will be of little comfort to Darling who knows full well that Ed Balls, Brown's long-term protege, is waiting in the wings to take over. When Brown took power last June it was assumed by Westminster insiders that he would give Balls, his chief economic advisor since 1997, 18 months or so in a less hostile environment - he's currently the Schools Secretary - before promoting him to Chancellor. Balls may not have to wait that long.