Tory lord rebuked for tax status

Lords must be resident in the UK for tax purposes

A leading Tory donor has been publicly rebuked by the Lords appointments commission for taking his seat without giving up his status as a tax exile.

The Appointments Commission has taken the unprecedented step of naming Lord Laidlaw in its annual report for not becoming a tax resident in the UK.

Under the current rules, members of the Lords must be resident in the UK for tax purposes.

Lord Laidlaw, on a leave of absence from the Lords, is based in Monaco.

The commission said it had informed the prime minister of Lord Laidlaw's situation and said it would not have approved his peerage if it had known that he would not honour his promise.

You have so far failed to honour this unqualified commitment Lord Stevenson Lords Appointment Commission chairman

Lord Laidlaw suspended his membership of the Lords on May 9 by taking temporary "leave of absence".

The commission had said on April 18 that it would name Lord Laidlaw in its annual report.

"During spring 2004, the commission vetted a list of party-political nominees," the commission's report, published on Thursday, said.

"One of the individuals on the list, Irvine Laidlaw (now Lord Laidlaw), was not resident in the UK for tax purposes. Following an exchange of correspondence and a face-to-face meeting, the commission accepted an assurance from Lord Laidlaw that he would become resident in the UK for tax purposes from April 2004.

"On the basis of this assurance the commission found no objection to his appointment. The commission would have taken a different view on Lord Laidlaw's nomination if it had known that he would not be resident in the UK for tax purposes from April 2004," the report said.

"In June 2004 he was appointed to the House of Lords. Lord Laidlaw has not become resident in the UK for tax purposes."

In correspondence released on Thusday under freedom of information laws, it emerged that Lord Stevenson, the commission chairman, wrote to Lord Laidlaw last month reminding him of his commitment.

"You made a very precise commitment to the commission in a situation where you knew a condition of being appointed to the Lords was to be UK tax resident," he wrote.

"You have so far failed to honour this unqualified commitment."

The commission reviewed its residency policy in 2005 and no longer considers nominees who are not resident in the UK for tax purposes.