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  1. Politics
9 March 2010

Exclusive: Lord Paul to end his non-domiciled tax status

Bold move by Labour peer will put pressure back on his Tory critics.

By Mehdi Hasan

In an exclusive interview with the New Statesman, the Labour peer and long-time party donor Lord Paul of Marylebone says he is to end his controversial “non-dom” tax status. He says:

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.

On the subject of the police investigation into his House of Lords expenses, Lord Paul reveals:

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.

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So will he be ending his non-dom status from the next tax year? “That’s right,” he says.

Asked about his views on the Tories and their attempt to involve him in the non-dom row about Lord Ashcroft, he says:

I think they have been caught with their pants down, and what better than try to reflect on others? 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.

He adds:

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 reveals:

Definitely not millions of pounds, or hundreds of thousands.

Lord Paul also clarifies the speculation over the nature of his donations, saying:

I have never given a personal donation to the Labour Party.

He adds, 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.

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