Queen dragged into Ashcroft row

The Queen has been dragged into the Lord Ashcroft peerage row
12 April 2012

A top Liberal Democrat has called for all documents relating to Conservative donor Michael Ashcroft's peerage to be made public to establish whether the Queen conferred the honour under false pretences.

Liberal Democrat Treasury spokesman Lord Oakeshott wrote to Cabinet Secretary Sir Gus O'Donnell, urging him to publish all relevant papers as a matter of urgency, to make clear whether the monarch had been misled.

The move came as The Observer reported that billionaire Lord Ashcroft would stand down as Tory deputy chairman following the general election.

Former Conservative leader William Hague has said that he discovered only a few months ago that Lord Ashcroft had enjoyed "non-dom" tax status for the last 10 years, allowing him to pay UK tax only on his earnings in Britain and not his much larger income overseas.

But former Clerk to the Court in Chancery Sir Hayden Phillips said that a deal was agreed in 2000 between the Conservative leadership and the House of Lords Political Honours Scrutiny Committee that Lord Ashcroft would become a "long-term resident" of the UK, rather than a "permanent resident". The change, which contradicted a written assurance he gave to Mr Hague, allowed him to claim non-domiciled status and save large sums - estimated by the Lib Dems at £127 million - in tax over the following decade.

Foreign Secretary David Miliband has demanded to know whether Mr Hague, who was Tory leader at the time, was aware of the deal described by Sir Hayden.

Speaking at the Labour Northern Conference in Sunderland, Mr Miliband asked: "Did Hague agree a deal 10 years ago to change the promise he made in public that Ashcroft would become a 'permanent resident' and pay 'tens of millions a year in tax'?

"If he did agree to that change, then did he know then that change could allow Ashcroft to avoid 'tens of millions a year in tax'? And if he didn't know then, then surely he now feels misled by Ashcroft?"

In his letter to Sir Gus, Lord Oakeshott said that, given the "overwhelming public interest" in how Lord Ashcroft became a peer despite twice being turned down by the Scrutiny Committee because he was a tax exile, it was vital "to establish whether the Queen conferred a life peerage... under false pretences".

The Queen was dragged into the row because she gives peerages on the advice of the Cabinet Office and the Prime Minister.

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