Page last updated at 13:29 GMT, Wednesday, 16 December 2009

Tax attack on Tory peer Ashcroft

Lord Ashcroft
Lord Ashcroft is one of the Conservatives' main donors

The Lib Dems have said new laws should be brought in immediately to remove MPs and peers who do not pay tax in the UK from Parliament.

Mr Cable, standing in for Nick Clegg at prime minister's questions, accused Tory peer Lord Ashcroft of not paying tax in the UK on overseas earnings.

The Conservatives have said they will pass a law requiring all MPs and peers to pay tax in the UK if elected.

For Labour, Harriet Harman said peers and MPs must "set an example" on tax.

When he was made a Conservative peer in 2000, Lord Ashcroft gave an undertaking that he would pay taxes in the UK but has since refused to comment on his tax status, insisting it was a private matter.

As well as being deputy chairman of the party, Lord Ashcroft is one of the Conservatives' largest donors.

'Tax promise'

Vince Cable, the Lib Dem Treasury spokesman, said the recent Tory commitment to legislation on the issue was "very helpful" but urged more speedy action.

During heated exchanges, Mr Cable accused Lord Ashcroft of being a "non-dom" - the term used to describe UK residents domiciled abroad for tax purposes and who do not pay tax in the UK on foreign earnings.

Members of the House of Commons and House of Lords who are non-doms should not sit in Parliament
Vince Cable

Mr Cable called for an amendment to legislation currently before Parliament to force such peers and MPs to stand down from Parliament.

"Members of the House of Commons and House of Lords who are non-doms should not sit in Parliament," he said. "I suggest the minister..bring an amendment to the constitutional reform bill so that non-doms like Lord Ashcroft can leave Parliament immediately."

Ms Harman said Labour was bringing forward laws to require all peers and MPs to pay tax in the UK and attacked the Conservatives.

Lord Ashcroft had "made a promise" to pay tax in the UK, she said, urging the Tories to clarify whether he had done so.

Shadow Foreign Secretary William Hague told the BBC this summer he had discussed the issue with Lord Ashcroft and had "no reason to think" he had not complied with the commitment to pay tax in the UK.

On Sunday, David Cameron said donations by Lord Ashcroft were "within the law" because he was resident in the UK and on the electoral register.

But he said the tax status of many peers from different parties was currently "rather unclear".

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