Ashcroft Involved In New Tax Controversy, Report Suggests

by Jason Gorringe, Tax-News.com, London

28 August 2002

The Guardian reported on Tuesday that the Parliamentary Ombudsman has called off an investigation into whether former Tory Party Treasurer, Michael Ashcroft fulfilled his obligation to 'take up permanent residence' in the United Kingdom and pay British tax before receiving his peerage.

In a letter to Peter Bradley, the Labour backbencher who sparked the investigation, Sir Michael Buckley explained his reasons for abandoning the probe:

'What the Cabinet Office has said is that, in relation to Lord Ashcroft's introduction into the House of Lords, the political honours scrutiny committee were content to rely on undertakings given by both him and the then leader of the Conservative party [William Hague]. Once Lord Ashcroft had been introduced into the House of Lords, however, the role of the committee ceased and their interest ended there...There would therefore have been no purpose in carrying out the kind of checks to which you refer,' he wrote in a letter seen by the UK newspaper.

Mr Bradley responded to the ombudsman's decision by asserting that the 'gentleman's agreement' between the peer and the scrutiny committee is insufficiently rigorous, and has not been honoured.

'It is essential Lord Ashcroft produces evidence that he did meet the Cabinet Office's requirements before he took his seat, and that he still fulfils them. If he is unwilling or unable to do so, Iain Duncan Smith must take decisive action,' he argued, suggesting that future Conservative party donations from the peer should be refused until he can prove tax residence in the United Kingdom.

Responding to the Guardian report, Lord Ashcroft's spokesman, Alan Kilkenny argued that the senior Tory had 'complied fully' with the agreement reached with the Cabinet Office, an assertion supported by former Cabinet Secretary, Sir Richard Wilson, who told Mr Bradley in 2000 that the honours committee was satisfied 'that Lord Ashcroft had fulfilled his undertaking to take up permanent residence in the UK.'

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