Page last updated at 18:16 GMT, Thursday, 18 March 2010

Lord Ashcroft tax status row continues

William Hague: "It is up to the individual themselves to reveal anything about their tax status"

The row over Lord Ashcroft has reopened despite documents appearing to confirm that he did not have to become a full UK taxpayer to join the Lords.

The Tory donor was made a peer in 2000 after undertaking to become a permanent UK resident, which was widely believed to mean he would be a full UK taxpayer.

Ex-Tory leader William Hague said the documents showed No 10 agreed the peerage did not depend on tax status.

But Labour accused him of continuing to "obfuscate" the issue.

Foreign Secretary David Miliband said: "It is now clear there has been a decade of deception at the top of the Conservative Party and I repeat my call, which is backed today by a former Chief Executive of the Conservative Party, that David Cameron sacks Lord Ashcroft.

"As for William Hague, he needs to explain why it's taken 10 years to drag the truth out of the Conservative Party and why he continues to obfuscate today."

Former Conservative Party chief executive Barry Legg, a long-standing critic of Lord Ashcroft, attacked the peer's apparent delay in clearing up the issue.

He told BBC Radio 4's The World at One: "Virtually everybody in this country has thought that since he became a peer he has been paying full UK taxes.

"We know that isn't true. Lord Ashcroft should have corrected this long ago."

'Blatant politicisation'

Shadow foreign secretary Mr Hague, who nominated Lord Ashcroft for a peerage when he was Tory leader, said the cabinet office documents from 2000 "vindicated" his argument that Lord Ashcroft had abided by the undertakings he had given at the time.

A businessman once described as the "boss" of Caribbean tax haven Belize, Michael Ashcroft has pumped millions into the Tory Party since 1998. Has become deputy party chairman and runs a crucial unit targeting marginal seats.
It had been thought he pledged to become a full UK taxpayer as a condition of becoming a Lord in 2000, but he and Tory politicians have always refused to clarify whether he had done so.
Last month Lord Ashcroft finally cleared the issue by admitting he did not pay tax in the UK on most of his non-UK earnings, but said the undertaking agreed at the time of becoming a Lord was to be a "long-term resident", and he had complied with that.
Leaked cabinet office papers appear to confirm that the deal done over his peerage did not include his tax status.

"The idea that this was a secret Tory deal for Lord Ashcroft to avoid whatever people thought he should have paid is rather blown apart by the knowledge this was all copied to Downing Street," he told BBC Radio 4's Today.

But a member of the honours scrutiny panel which approved the peerage said she felt Lord Ashcroft had not met his undertakings.

Giving evidence to a Commons committee which is looking into the issue, Labour peer Baroness Dean said the Political Honours Scrutiny Committee believed it had been assured Lord Ashcroft would become a permanent resident before he took up his seat in the Lords.

"It looks like that the commitments and undertakings given were not carried through," she said.

She added that she was "surprised" by Lord Ashcroft's recent admission of his actual tax position.

There has been a long-running row over Lord Ashcroft's tax status, focusing in recent weeks on when the Conservative leadership knew he was not domiciled in the UK for tax purposes after he acknowledged being a "non-dom" last month.

Long-running row

While defending his actions over the issue, Mr Hague added: "The one thing I will concede on this - and which I think in retrospect was a mistake - was to say tens of millions because it may have cost him millions. We don't know, it may cost him millions into the future.

"None of us can know - other than him, I suppose, and the tax authorities - what it has cost.

"But it was certainly an important change for him to go from being not resident in the UK."

Chris Huhne, Lib Dems: "The leader of the British Conservative Party at the time was prepared to connive"

Mr Hague said Lord Ashcroft had only told him he was a non-dom "around the turn of the year" and that he subsequently went on to "explain" his position to David Cameron and announce it publicly.

"You could argue that that should all have been done earlier. OK, you can argue that. But we have done all of that."

The BBC's Political Editor Nick Robinson said despite Mr Hague's attempts to dismiss the matter as a "fuss", the reality was, in public, the Tories had appeared secretive and evasive over the issue for 10 years.


Mr Hague's comments came ahead of a Commons hearing by the Public Administration Committee into the arrangements and undertakings surrounding Lord Ashcroft's peerage.

Sir Hayden Phillips, the senior civil servant who oversaw negotiations between the Conservatives and the scrutiny panel over the peerage process, told the committee he did not believe he had been "deceived".

He told MPs his role was merely to "satisfy" himself that Lord Ashcroft would spend enough time in the UK to qualify for his peerage and that the Conservatives and the authorities agreed on the nature of the undertakings that he was giving, which he believed they had.

Sir Hayden said he was not a tax expert and did not, at the time, appreciate the distinctions between domicile and non-domicile tax status, although the documents from the time show he was aware of the scrutiny committee's concerns about the issue.

Mr Hague and Lord Ashcroft are also under fire from Labour for refusing to appear before a select committee to answer questions about the issue, with Commons leader Harriet Harman saying it showed "flagrant contempt" for Parliament.

But Ian Liddell-Grainger, one of three Conservative MPs who boycotted the committee when they learned that Mr Hague and Lord Ashcroft had been asked to appear before it, accused its Labour chairman Tony Wright of turning it into a "political mouthpiece of the government".

He [William Hague] is not prepared to acknowledge that he knew Lord Ashcroft was a non-dom but kept quiet because he wanted to carry on taking the money
Harriet Harman

"This is a blatant piece of politicisation of the select committee system and it is simply appalling," he told the BBC.

Shadow Commons leader Sir George Young has written to Cabinet secretary Sir Gus O'Donnell to demand an inquiry into documents obtained by the BBC, amid Tory claims they had been leaked by the government in an attempt to influence the general election.

The Lib Dems, who claim that Lord Ashcroft owes more than £100m in unpaid tax, said the Tories had treated the public "with total contempt" over the issue.

"William Hague promised the prime minister that before Lord Ashcroft received his peerage he would pay 'tens of millions' in British tax, but then never even checked whether the promise was kept," the party's home affairs spokesman Chris Huhne said.

"It is utterly unbelievable to say, as William Hague did this morning, that he was not aware of the tax implications of these negotiations that dragged on for four months when he was kept informed by his closest loyalist, the chief whip."

Lord Ashcroft has pumped millions of pounds of his own money into the Conservative Party over the years and in 2005 was made its deputy chairman, with responsibility for targeting marginal seats at the general election.

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