Lord Paul, the Labour peer and longtime party donor, has announced that he is to end his controversial "non-dom" tax status and become a full UK taxpayer.
In an exclusive interview with the New Statesman's Mehdi Hasan he said that he would be "fully complying" with the government's plan to change the law to ban non-doms from sitting in parliament.
"On the issue of taxation position of peers, of course it goes without saying that I'll be fully complying with the change of law which the government is bringing forward. I strongly support the government proposals in relation to the taxation status of peers and MPs and the membership of the House of Lords and the House of Commons."
Asked if this meant he would be ending his non-dom status from the next tax year, he said: "That's right".
The Conservatives have repeatedly used the peer's tax status to accuse Labour of hypocrisy over their criticism of Tory donor Lord Ashcroft's non-dom status.
Asked to comment on the affair, Paul said that the Tories had been "caught with their pants down" and rejected the comparison between himself and Ashcroft.
He said: "First of all, I am a born domicile. I am born in India. He was the only one who was asked to pay full taxes. Nobody asked me. I have always been open about my non-domiciled status. There are lots of non-doms in the House of Lords but I don't know of any case where they were asked to pay full tax, apart from Lord Ashcroft."
Paul also revealed that the police had decided not to proceed with their investigation into his House of Lords expenses.
He said: "I am delighted to announce today that the Metropolitan Police Service have informed me that it has decided after due consideration that it will no longer be proceeding with any investigation or inquiry in relation to my House of Lords expenses. I very much welcome the police decision."
He added: "I am not buying MPs, seats or the party. I have no interest in being a minister. I'm too old for it anyway. The Tories seem to be confused. And don't forget I was appointed a peer by John Major, not by the Labour government of Tony Blair or Gordon Brown."
Asked how much his decision will cost him, in terms of tax contributions to the exchequer, the Labour donor said: "Definitely not millions of pounds, or hundreds of thousands."
Paul also clarified the speculation over the nature of his donations, saying: "I have never given a personal donation to the Labour party."
He added, with regard to the controversy over his appointment to the Privy Council in 2009: "My contribution to this country is perhaps bigger than a lot of people who are privy councillors. I don't think it is a monopoly for ex-ministers and ministers to be members of the Privy Council. I bought steel companies in Britain and brought them to health and made the industry fashionable again in the 1980s. We have 3,500 employees in this country right now."
