Lord Ashcroft – the three things which strike me

For the third day, the revelation that Lord Ashcroft has dodged paying full UK taxes for a decade with the complicit knowledge of the Tory leadership has been dominating the serious news media. And congratulations are due here to Chris Huhne and his research team for unearthing the estimate that the Tory deputy chairman has saved himself £127m in tax by maintaining his non-dom status despite promising to live in the UK as an ordinary resident.

It’s not been a pretty couple of days for the Tories. Here are three points which have struck me:

1. What does this episode say about Ashcroft’s power?

My LDV co-editor Mark Pack tweeted immediately after the story broke on Monday, “Main thought on #Ashcroft: shows how weak Tory press operation is at times. They tried to kill story in Dec and failed”. He may be right.

An alternative reading is this: how frustrated must the Tory press operation be? The timing for the party could scarcely have been worse. Over the last few weeks, the Tories have been seriously shaken by opinion polls showing a shrinking lead over Labour; David Cameron’s adequate speech to the party’s spring forum in Brighton at the weekend provided them with an opportunity to show they had bottomed out, and can bounce back. Then came Ashcroft’s revelation, and the party back on the ropes again.

What this suggests to me is that Ashcroft, not the Tory leadership, writes the rules. It seems incredible that the timing of his announcement was the one the leadership, let alone their press team, could have wanted. He who pays the piper calls the tune: and the Tory leadership has danced to Lord Ashcroft’s tune for a decade now.

2. What does this episode say about the Tories’ fitness for power?

But even allowing for my view that the Tory leadership is so indebted to Lord Ashcroft that they now feel unable to assert any real authority, what has struck me about the wider Tory response is quite how defensive and resentful is their bluster.

The Tory defence seems to be two-fold. First, that Lord Ashcroft is a modest donor these days, and almost peripheral to the Tories’ campaign strategy. This is of course nonsense, as this Times article makes clear:

Today Lord Ashcroft’s reach is huge. Despite insisting that George Osborne is running the campaign, it is the peer’s team who control polling and strategy in marginal seats.

And, secondly, that whatever you might say about Lord Ashcroft, Labour also has its share of non-dom peers. But saying ‘The other lot are just as bad’ is a rather futile point to make when you’re two months away from an election at which you have to make the case for why you’d be so much better in government.

The over-riding impression I get from this Ashcroft episode (and I’ve talked to a handful of senior Tories about it) is bafflement that it’s an issue at all. Most Tories seem to see nothing wrong in Lord Ashcroft minimising his tax bill through whatever legal means available, and nothing wrong with him occupying a seat in the House of Lords while doing so. The idea of fairness – that those who legislate how much the rest of us should get taxed, and how that money should be spent, should pay the same tax as the rest of us – is seen as the pedantry of liberal-leftys.

If there’s one thing bound to unite Lib Dem, Labour and floating voters, it’s irritation with the sense of entitlement too many Tories exude, and which Lord Ashcroft’s tax affairs exemplify.

3. What can we do about it?

It’s all very well complaining about Lord Ashcroft on blogs, or tweeting disparagingly – but is there anything that any of us can actually do about it? Well, yes – two things …

First, The Guardian suggests a practical way in which folk can try and find out from the Tories what the Tories are keeping schtum about:

What we would like is if you could put our questions, below, to your local Tory MP or candidate and let us know what responses you get, or if they too get ignored.

Please email what you find to [email protected] with “Ashcroft questions” (or similar) in the subject field. You can find your Tory MP or candidate and their contact details on the Conservative’s website.

And here are the questions:

1. In 1999 William Hague wrote to Tony Blair assuring him that Lord Ashcroft would change his tax status by the following financial year with the effect that he would pay “tens of millions a year in tax”. Did Lord Ashcroft indeed pay tens of millions a year in UK tax since becoming a peer?

2. How is Lord Ashcroft’s non-dom status consistent with his “solemn and binding” undertaking to become a permanent UK resident?

3. When did William Hague become aware that Lord Ashcroft was not domiciled in the UK for tax purposes?

4. When did David Cameron become aware that Lord Ashcroft was not domiciled in the UK for tax purposes?

5. Do you believe Lord Ashcroft misled William Hague when he promised to become a permanent resident as a condition for receiving a peerage?

And secondly, the Lib Dems need your donations to enable the party to compete in key battleground seats against Lord Ashcroft’s largesse.

Lib Dem Voice is running our election appeal, focusing on five candidates in marginal seats, here. Alternatively, you can donate generally to the national party here – you can even specify that your donation support a candidate in an Ashcroft-funded seat: I’m sure the party will oblige.

Either way, please consider doing what you can today to help the Lib Dems fight the next election on a level playing field.

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20 Comments

  • Its a Scandal. Next thing you know the Tories will be taking money from a convicted fraudster. I bet you if that happened they wouldnt pay the money back either. Thats the sort of people they are. Thank god the Lib-Dems would never do anything like that. …. er hang on a minute …..

    Well at least the none of the leading Lib-Dems took non-dom money to fund ther leadership campaigns. They wouldnt would they?

    ‘The Conservatives pointed out that Mr Huhne took non-dom money to fund his Lib Dem leadership campaign in 2008’
    http://www.telegraph.co.uk/news/election-2010/7346763/Lord-Ashcroft-admits-he-is-a-non-dom-for-tax.html

    Who can you trust these days? What can you do about it?. Perhaps a letter to you your MP asking if they, and their febrile supporters, could abstain from cant and self-righteous hypocrisy for a while.

  • The interesting thing is this – in the `Ashcroft constituencies` the people the money is trying to attract to the Tory cause are the very ones that are probably looking at Tory literature thinking `ugh, tax exiles money`.

  • I am not aware that Michael Brown ever installed staff in Cowley Street who were answerable to him rather than to the Party Leader. I am not aware that Michael Brown was ever made a peer. I am not aware that Michael Brown ever bought party policies. What else am I not aware of? Oh yes. I am not aware that senior figures in the Party ever feigned ignorance about Michael Brown’s tax status.

    What should Liberal Democrats up against Ashcroft-funded candidates do now? Yes, I have an idea. They should suggest useful things that Ashcroft could do in the constituency if he gave the money to charity rather than spent it on furthering the political ambitions of some mendacious Tory chancer. And another thing. They could put “Love from Michael A” stickers on Tory billboards.

  • Anthony Aloysius St 3rd Mar '10 - 11:26pm

    “The issue is not taking money from non-doms.”

    Isn’t it? Surely the pronouncements by Huhne and Clegg indicate that the issue is precisely that.

    Huhne:
    “The Conservatives’ biggest donor is a tax-dodger from Belize who has not paid a penny of British tax on the vast bulk of his estimated £1.1bn fortune held offshore. This raises extraordinary questions about the judgement of successive Tory leaders …”

    Clegg:
    “I think if you are seeking to influence the outcome of the next general election… then it is wholly wrong that you basically seek to pay taxes only partially in this country.”

    Did they forget they had accepted donations from non-doms – and worse – or what?

  • Antony Hook 4th Mar '10 - 12:38am

    The worst aspect of this is the extent to which Ashcroft has basically bought the Conservative Party in the ways Sesenco describes.

    He gave his party leader (Hague at the time) an assurance in writing which he has broken. Would anyone else not face some sanction? Disgraceful.

  • William Hague insisted that he was an intellectually curious person when Jeremy Paxman challenged him to explain why he did not appear to know Michael Ashcroft’s tax status, and appeared not to have asked Lord Aschcroft directly what his tax status was. William Hague’s extraordinarily careful parsing of what he did and did not know, until last night, suggested he long ago adopted the policy, where Lord Ashcroft’s tax affairs were concerned, of: Don’t ask, don’t tell.

    Don’t ask and don’t tell is a pretty good description of the Conservative party’s approach to sensitive and potentially embarrassing policy issues – not just Ashccroft’s obligations as a Conservative legislator. In the case of its former Party Treasurer and current Deputy Party Chairman there is no doubting that Michel Ashcroft wished, despite accepting an appointment as a UK legislator, to keep his tax status in the closet. Of course his party, like the UK’s other leading political parties, has gone on record as a firm supporter of the proposition that British citizenship – let alone a role in its legislature – should balance benefits and opportunities with responsibilities.

    One journalist, Michael White of the Guardian, got an opportunity to ask Michael Ashcroft about his tax status: “When [Michael Ashcroft] bought me lunch (and paid cash for it too) I asked him the obvious question and got this memorable reply: ‘You can ask me about my sex and gender. You can ask whether I have two testicles and a penis. But [on tax] I do not respond’.”

    Close observers of the British political scene and, most especially, the behaviour of the leading members of the Conservative party have been put on notice that it is headed by people who don’t ask and don’t tell.

    In his interview on last night’s World Tonight radio programme William Hague could not have put it more clearly: “I don’t ask people what their tax status is or what they have negotiated with the Cabinet office.” He might have added: I don’t even ask when that is precisely what I have led others to believe I will do.

    The Ashcroft affair is emblematic of contemporary British politics and Tory politics in particular. British electors have had their warning. I wonder how many of them will heed it. I have only a few weeks to wait to find out.

  • Lord Ashcroft’s tax is small fry… Google pays no tax on £1.6bn in Britain.
    I suggest you stop trying to score points and tell us what you’d do about Google ripping the p***.

  • Oh, is Google trying to buy the election for a political party too?

  • mr hill, does it strike you that politicians buying elections is as timeless as elections themselves; the person who thinks they can change that is a child or a fool.
    Google on the other hand is ripping money out of the British economy on a daily basis; that can and should be stopped.

  • The EC – no match for Bearwood and co

    The Electoral Commission summary of its Bearwood Corporate Services investigation confirms what most of us suspected: it is easy, for anyone who wants to and has the wealth to, to invest substantial amounts of money in UK politics from aboard. They can do so without running a serious risk of being found to have breached the Political Parties, Elections and Referendums Act (PPERA), even if there is suspicion that funds, which originated with individuals who are not permitted to make individual donations to UK political parties, have made a company donation possible.

    Take one off the shelf company. Invite a friendly party you can trust to ‘run’ the company. Engage in ‘business activities’; activities which are as weightless as possible. Get the friendly party, running the off the shelf company, to sell shares to another company, which is a subsidiary of yet another company, which receives funds from an overseas financial entity, which is under no obligation to disclose information to UK authorities about its finances. Be as economical as possible in keeping financial records about share sales and business activities undertaken in the UK.

    Donate whatever the off the shelf company can spare to the political party of your choice – sorry, its choice.

  • ali al rimmer 4th Mar '10 - 8:30pm

    ‘the three things which strike me’

    1) When will the Lib Dems be repaying the £2 million they accepted from their criminal donor?

    2) Was Chris Huhne’s leadeship election paid for by a non dom?

    3) How many non doms have given funds to the Lib Dems over the past 10 years, how much did they give & how much tax have they avoided because of their non dom status?

    So in the interests of transparecy will the Lib Dems come clean with the electorate?

  • In addition to the questions suggested by The Guardian, it might be worth asking Cameron or other Tory MPs the following questions or similar. Read the letter first, as it prompts numerous questions.

    Have you replied to the letter raised in Parliament by Mike Gapes MP, from Shaun Malcolm, the opposition leader in the Turks and Caicos Islands, concerning Lord Ashcroft? If so, were you able to offer him the reassurances he was seeking?

    http://tcijournal.com/index.php?idsub=2067&id=8

    Have you had any further contact with Belize PM, Dean Barrow, since he warned against appointing Lord Ashcroft in any governmental role last November? Does the Belize government still feel it is in a ‘state of war’ with Lord Ashcroft?

    http://www.independent.co.uk/news/uk/politics/belize-pm-warns-cameron-about-role-for-ashcroft-18307

  • Anthony Aloysius St 4th Mar '10 - 9:20pm

    “The Electoral Commission summary of its Bearwood Corporate Services investigation confirms what most of us suspected”

    Hadn’t your suspicions already been confirmed by the Electoral Commission’s investigation of 5th Avenue Partners?

  • Apart from the apparent naivety of Hague and Cameron in thinking that Ashcroft was innocent and had been hiding nothing – apparently didn’t ask…. I am only more amazed at the strangely convoluted and hypocritical comments here from AAS, W, AAR etc who seem to think that somehow two supposed wrongs elsewhere somehow make it all okay for Lord Cashcroft to try and buy this election…

    It is essentially bad for British politics that we haven’t sorted funding of political parties or reformed MPs expenses and pay. Its bad for the process and sets a bad example for young people or whatever political hue. It is demeaning and undermining the whole democratic process and has to be condemned.

    What really angers me is the cant from Tories who try this, tarring others, approach when they are conniving at corruption of the process in the belief that the end somehow justifies their means. They are morally bankrupt.

    Just how far off kilter Cashcroft is, is revealed in the comment that he’ll pay taxes here IF THE TORIES WIN!!!! How insulting – he shouldn’t be allowed to further issue such blackmail – its contemptible! Pay up or be damned!! No representation without taxation.

  • In response to Ali Ali Rimmer

    I don’t think that the Lib Dems will be handing £2 million over to Michael Brown or playing Solomon with those who have claims against Michael Brown. If you know Michael Brown’s current whereabouts then I suggest that you contact the relevant authorities without delay.

    If you were to have asked me if I think the Lib Dems should have had anything to do with Michael Brown or accepted a donation from him my answer would have been an emphatic ‘no’. I am pretty certain that my opinion is shared by many other Liberal Democrats. I am also confident that many Conservative and Labour party members share my disgust at the way in which UK politics is funded.

    I don’t know how Chris Huhne funded his leadership bid. As many others have commented accepting political donations from non-doms isn’t unlawful. In my view donations to party political campaigns, by those who are non-domiciled for tax purposes, shouldn’t be permitted. The UK’s current arrangements for party funding and political campaigning should be (and can be) radically reformed. I’m very sympathetic to Stein Ringen’s ideas about political funding and Robert Reich’s proposals for citizen based funding.

    I’m sure you have heard of Gresham’s Law. Party treasurers and fund raisers face a variant of Gresham’s Law. There is an almost irresistible pressure on them – all of them – to behave as the most unscrupulous of their opponents do. Of course that pressure should be resisted and joining in a funding arms race usually turns out to be short-sighted and self-defeating. I’d be very surprised if T. Blair, G. Brown and D. Cameron aren’t amongst those who would privately agree with me and I suspect that all three have sorry tales to tell.

    I don’t know how many non-doms have given money to the Lib Dems over the past 10 years and I cannot give detailed answers to your other questions. I know that more detailed answers are now available to specific questions about political donations, but I also know that each time the regulatory framework for party funding is tightened the temptations to find ways around it prove too great for party treasurers to resist.

    On the scale of tax avoidance by non-doms – as I suspect you will appreciate – it’s anyone’s guess. That is one of the reasons why anyone who wants to clean up the UK political system, make it more democratic and accountable, and prevent it from being the plaything of the exceptionally wealthy, should concentrate on prosecuting the case for radical reforms. There are ways of removing the many temptations to ‘make an end run’ around party funding rules. Rule changes can be made which would encourage political parties to concentrate on making the best case they can for their policies rather than trying to out compete one another for the cash of a wealthy few.

    And in response to Anthony Aloysius St

    I agree. The Electoral Commission went into the Bearwood with little more prospect of establishing that something impermissible had happened than it had when it took a walk down 5th Avenue.

    The political parties – at least the political parties that say they are committed to electoral probity – need to reach an agreement about party funding with each other before they can hope to equip the Electoral Commission to do an effective job of policing party funding. We don’t have to look too far to see what happens in a political system with impressive democratic institutions but which permits the transfer of political power from electors in general to a select group of major party funders in particular.

    What we have in the UK – though not yet to the same degree as the US – is a classic example of the prisoner’s dilemma. The greatest problem in overcoming that dilemma comes from those ‘players’ who do not accept that they are prisoners; the ‘players’ who think that they have a special financial advantage making them the only positive sum players in a game where all their rivals hold losing hand.

    The Liberal democrats, the Conservative democrats and the Social democrats, in the UKs principal political parties, can only hope to make changes to party funding that stick and work if they recognise they have something in common as democrats to begin with. Exchanges here and elsewhere suggest that there is a depressingly long way to go before that becomes the case.

  • Anthony Aloysius St 5th Mar '10 - 1:24pm

    Paul

    “I am only more amazed at the strangely convoluted and hypocritical comments here from AAS, W, AAR etc who seem to think that somehow two supposed wrongs elsewhere somehow make it all okay for Lord Cashcroft to try and buy this election… “

    Where the hell do you get that from?

    I don’t think any of this is right. I don’t think it’s right for non-doms to bankroll political parties, and I don’t think it’s right for donations that are effectively coming from ineligible donors to be disguised by channelling them through companies.

    I think most people agree that what the Tories have done is wrong. The only difference between me and the “loyalists” here is that I also think it’s wrong when it’s Lib Dems who are accepting donations from non-doms, or gifts from ineligible donors channelled through companies.

    This isn’t an issue that politicians should try to score party points on, because all the parties have behaved badly. And people who come out with a holier-than-thou attitude are just asking to be reminded about their own party’s past behaviour.

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