Ed Miliband's claim to crackdown on the super-rich unravelled today after it emerged Ed Balls has warned the idea of scrapping non-dom rules would cost the country money. The Labour leader used a speech to say he will 'abolish' the 200-year-old rule for non-doms, which applies to around 116,000 people, claiming they make Britain an 'offshore tax haven for a few' and can 'no longer be justified'. But in January Mr Balls, the shadow chancellor, said: 'I think if you abolished the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.' Scroll down for video . Ed Miliband has pledged to scrap the controversial 'non-dom' status which allows millionaires to reduce their tax bil . The Labour leader visited Cheswick's Coffee shop  in  Rowley Regis in the West Midlands this afternoon . Mr Miliband argues that non-dom tests 'are not very rigorous' and can be granted to people who have a burial plot or property abroad . Non-domicile status allows people living and working in Britain to only pay tax on their UK income, but not earnings from overseas. They must prove that they regard a foreign country as their real home. But Mr Miliband argues that non-dom tests 'are not very rigorous' and can be granted to people who have a burial plot or property abroad. In a speech in Warwick today, Mr Miliband said that everyone who has made Britain their permanent home should pay full UK tax on all their income and gains. He pledged to abolish the non-dom status from April 2016. He told an audience at the University of Warwick: 'Why should there be one rule for some and another for everybody else? 'It is not fair. It is not just. It holds Britain back. We will stop it. The next Labour government will abolish the non-dom rule. 'And we will replace it with a clear principle: Anyone permanently resident in the UK will pay tax in the same way. 'The rules we will introduce are modelled on what other countries do. Real temporary residents, here for a brief period, will only have to pay tax on what they earn here . 'Because they will be paying their taxes in their place of permanent residence. But everyone else will have to pay tax on their worldwide income.' The status, which is unique to the UK having been introduced by William Pitt the Younger in the late 18th century, is used by more than 110,000 wealthy people. In January shadow chancellor Ed Balls warned: 'I think if you abolished the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.' Mr Miliband said non-dom status results from a discredited belief that 'anything goes for those at the top and that what is good for the rich is always good for Britain'. He added: 'There are people who live here in Britain like you and me, work here in Britain, are permanently settled here in Britain like you and me, but aren't required to pay taxes like you and me because they take advantage of what has become an increasingly arcane 200-year-old loophole. 'There are now 116,000 non-doms, costing hundreds of millions of pounds to our country – it can no longer be justified, and it makes Britain an offshore tax haven for a few.' Non-dom status is often inherited through the father so can apply to people who were born in Britain. They must pay an annual fee, of up to £90,000, to take advantage of the rules, which means it is only of us to the very wealthy. Newspaper reports overnight suggested that non-dom rules would be scrapped by Labour altogether. But today it emerged Labour would allow 'real temporary residents' to take advantage of the rules - with the time limit to be consulted on should they take power in the General Election on May 7. Mr Miliband said on Twitter that 'we should all pay taxes by the same rules' ahead of his speech in Coventry . Ex-Dragons' Den star Duncan Bannatyne backed the Labour tax crackdown . Entrepreneur and ex-Dragons' Den star Duncan Bannatyne has backed Ed Miliband over the Labour leader's plan to scrap non-dom tax status. It comes after the hotelier signed a letter sent to the Daily Telegraph from more than 100 business leaders stating the 'Conservative-led Government has been good for business' and backing the cut in corporation tax to 20%. He tweeted: 'Ed Milliband says he will abolish non-dom status in UK. This gets my vote I never thought any party would have courage to do this.' Mr Balls said it should be around two or three years - not the five suggested in some reports. But it emerged that when he was a Treasury minister in the last Labour government, Mr Balls insisted that 'the majority of non-domiciled individuals who had already left the UK spent no more than five years here'. And in a January interview Mr Balls said: 'I think if you abolished the whole status then probably it ends up costing Britain money because there will be some people who will then leave the country.' Asked by BBC Radio Leeds at the time if he would scrap the status, he said he was looking at tightening the system to 'make sure the non-dom rules work in a fair way'. Chancellor George Osborne said Labour's proposals amounted to 'tinkering around the edges' not an outright ban. 'We have Ed Balls himself saying it would cost the country money,' Mr Osborne said on a campaign visit to a bank in Kingston, south London. 'It is a classic example of the economic chaos and confusion you get with Ed Miliband. It's why they have no economic credibility.' Mr Osborne said the Government's policy of increasing the fees charged to non-doms, which he raised as recently as December, had brought in more than £1 billion. The Lib Dems said the number non-dom numbers 'exploded' under the last Labour government and more than doubled while Mr Miliband was an adviser in the Treasury . Tory Chancellor George Osborne warned the plan could cost Britain 'hundreds of millions of pounds' and stopped short of scrapping the rules, despite Labour's claims . Nick Clegg's party said it would rack up existing fees for non don status as high as £150,000 a year . The Lib Dems were bounced into announcing their own crackdown on non doms by the Labour pledge. They would rack up existing fees for non don status as high as £150,000 a year. The party is also considering its own ban on non doms staying in Britain longer than a decade. But officials said they would not go ahead with this until it was clear it would raise money. And officials said there were 'dangers' that talent could leave the UK if non dom rules were seen to be 'unfair'. Officials said the plans were in the manifesto but brought forward after Ed Miliband's announcement. The Lib Dems would also ban people from inheriting non-dom status from their parent. The party's manifesto will commit to raising the levy on non-doms who have been in the country for more than seven of the past nine years from £30,000 to £50,000. Non doms in the country for 12 of the past 14 years would rise from £60,000 to £100,000 and for people who have been in the country for 17 of the past 19 years from £90,000 to £150,000. Mr Balls told BBC Radio 4's Today that circumstances had changed and there was now a large budget deficit to cut. 'People were saying in the middle of the last decade this will lead to people leaving the country. It's not actually turned out to be the case,' he said. 'The abuse is bigger than we thought. These rules are ridiculous, they are unfair, they are being abused, and I think it's time to act. 'These were introduced in the period of the Napoleonic wars to allow people who were earning money in the colonies not to pay tax in the UK. 'That's fine, it's a different world now, a different time, different choices.' Admitting he was not scrapping non-dom rules completely, he said that Labour would allow 'a short period for existing non-doms to get their affairs sorted out'. Asked about the exemptions, he said: 'What we will do in the future is if people are coming here temporarily to work or to study, then we'll allow a short period, I think five years is probably too long. 'I'm thinking more the length of a normal postgraduate or university degree, say two to three years.' Mr Osborne said 'the right approach' was to hit 'non-doms' with higher annual charges for exploiting the system - effectively making it only worthwhile for the very wealthiest. The Liberal Democrats said they planned to take an additional £130 million from non-doms by reforming eligibility rules and 'significantly increasing the charges'. Chief Secretary to the Treasury Danny Alexander said: 'The key tests are what maximises revenue for the exchequer and best supports our economic recovery.' 'Non-dom numbers exploded under Tony Blair and Gordon Brown, more than doubling when Ed Miliband was an adviser in the Treasury,' he said. 'We came down hard on those who stayed in the UK for long periods without paying their share - increasing charges on non-doms year-on-year since 2010. Labour used to allow non-doms to sit in the House of Lords, Lib Dems stopped that. 'In the next parliament we want to go further by radically reforming the rules and significantly increasing the charges for non-doms to secure an additional GBP130 million for the public purse.'
Ed Miliband will today pledge to scrap the controversial 'non-dom' status .
The rule allows Britain's richest to avoid UK tax on their worldwide income .
Labour will claim it's open to abuse and offends the moral basis of taxation .
But critics will say it is another example of Labour's anti-business agenda .