The Ashcroft saga doesn't end here

The investigation into the Tory peer's company must conclude before the election.

After more than a decade of obfuscation, Lord Ashcroft has finally come out and admitted he's a non-dom. He did so through a statement on his website, designed to pre-empt the Cabinet Office's release of the promise he made regarding his tax status when he became a Conservative peer in 2000.

Here is the key passage:

As the letter shows, the undertakings I gave were confirmed in a memorandum to William Hague dated 23rd March 2000. These were to "take up permanent residence in the UK again" by the end of that year. The other commitment in the memorandum was to resign as Belize's permanent representative to the UN, which I did a week later.

In subsequent dialogue with the Government, it was officially confirmed that the interpretation in the first undertaking of the words "permanent residence" was to be that of "a long-term resident" of the UK. I agreed to this and finally took up my seat in the House of Lords in October 2000. Throughout the last ten years, I have been declaring all my UK income to HM Revenue. My precise tax status therefore is that of a "non-dom".

In an attempt to blunt Labour's anticipated attack, he adds:

Two of Labour's biggest donors -- Lord Paul (recently made a privy councillor by the Prime Minister) and Sir Ronald Cohen, both long-term residents of the UK -- are also "non-doms".

It's something of a false comparison. Neither of those two enjoys anything like the influence the Tory deputy chairman has over his party's campaign strategy, but even so, Labour stands plausibly accused of hypocrisy.

He ends by promising to change his tax status following David Cameron's pledge to ban non-doms from the Lords.

But the story doesn't end here. It is now essential that the Electoral Commission complete its investigation into whether donations made to the Tories by Ashcroft's company, Bearwood Corporate Services, breached funding rules before the 2005 election. The inquiry began 18 months ago amid claims that Bearwood was not a fully functioning business at the time the donations were made. Since 2003, the company has donated more than £4.7m to the party.

Should the Electoral Commission rule that Bearwood's donations breached electoral law, not only would the Tories be forced to repay the money, but MPs could launch a legal challenge to the election result.

In the meantime, if Labour's attack is to have any moral force, it must refuse to take another penny from anyone who isn't a full UK taxpayer.

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George Eaton is political editor of the New Statesman.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.