Labour calls for a watchdog inquiry into Lord Ashcroft were denied today as Tory leader David Cameron faced questions over what he knew of his party deputy chairman’s tax status.
The peer, who has given millions of pounds to bankroll Tory campaigning in marginal seats, revealed yesterday after years of speculation that he was non-domiciled for tax purposes.
Labour accused him of breaching assurances he gave in 2000 as a condition of receiving his peerage and Lord Mandelson asked the House of Lords Appointment Commission to investigate.
But although the Commission said it would “consider” the business secretary’s letter, it said it had no powers to investigate as the peerage was vetted before it was set up. Under rules in place now, the watchdog will not even consider applications for “non doms” to take a seat in the upper chamber, it also pointed out in a statement.
The Conservative Party has so far declined to say how long Mr Cameron knew the peer was not paying tax on his overseas earnings.
The party leader said yesterday that he hoped the disclosure would allow him to “get on” with the election after months of persistent questions over Lord Ashcroft.
He and other senior Conservatives sought to turn the tables on the other parties, who have also received money from “non-doms”, and urged the media to put the same pressure on them.
But Justice Secretary Jack Straw accused them of “concealing the truth” for 10 years while Lord Ashcroft was trying to “buy the election”.
“He was only granted his peerage on the basis that he would return to live in the UK, become fully resident, and that he would pay tax in the UK on his wider income,” he said.
“Lord Ashcroft has been forced to admit that he has not complied with this promise and that for the last 10 years the Conservatives have been concealing the truth.”
Lord Ashcroft has made donations worth more than £4 million through Bearwood Corporate Services since Mr Cameron became Conservative leader in 2005.
These gifts are the subject of an Electoral Commission investigation into claims that the UK-registered company is not carrying out business in Britain and is therefore ineligible to donate.
The peer made clear he was ready to pay full UK tax if the law is changed to bar non-doms from membership of the upper house, saying: “I agree with this change and expect to be sitting in the House of Lords for many years to come.” Government legislation introducing a ban is set to clear its final Commons hurdle today, with Conservative support.