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  1. Politics
1 March 2010

The Ashcroft saga doesn’t end here

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

By George Eaton

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”.

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

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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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