Top Lib Dem asks: was Ashcroft’s peerage given under false pretences?

by Stephen Tall on March 7, 2010

Today’s Telegraph reports that Lib Dem peer Lord (Matthew) Oakeshott has called for all documents relating to Tory donor Lord (Michael) Ashcroft’s peerage to be made public to establish whether the Queen conferred the honour under false pretences:

Lord Oakeshott, Liberal Democrat Treasury spokesman, 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. … William Hague, the former Conservative leader, 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. …

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.

“No-one really cares about all this Ashcroft stuff” seems to be the damage limitation line the Tories are attempting to spin. To an extent they may have a point. Do I honestly think the man on the Clapham omnibus is discussing Tory non-doms with Worcester woman down the Dog and Duck? No.

But it is having an impact on the way the media views David Cameron’s judgement, as the Economist’s Bagehot pointed out earlier this week:

… all this matters not for what it says about Lord Ashcroft but for how it reflects on David Cameron and his judgment. The Tories point out that for some time Lord Ashcroft’s donations have made up a relatively small proportion of the total, unlike in the dark days under Mr Hague. But in a way that makes it all the more mysterious that Mr Cameron should have helped to protect Lord Ashcroft’s “privacy” until now.

A practical illustration of this can be seen in today’s Independent on Sunday leader. There’s been speculation for some time the Sindy might in the end back Mr Cameron (it would be an endorsement for the leader rather than his party, just as The Sun backed Blair in ‘97). The effect would scarcely have boosted the Tories’ ratings – the Sindy is a low circulation quality paper – but it would have emphasised the way the Mr Cameron was building a broad coalition of support, one which embraced small-l liberals, and not simply resorting to a core vote strategy. But it looks like his poor handling of the Ashcroft affair has exploded that possibility:

The Independent on Sunday has been more favourably disposed towards him than towards any previous Conservative leader since we were founded two decades ago. … This newspaper was ready to consider the Conservative Party’s election pitch with an open mind. … Instead, Mr Cameron has embarked on retoxification. We have been reminded that the Tory party is funded and run by rich people who seem to regard the payment of taxes as optional, and whose “patriotic duty” is to find a status that allows them to live in this country when they feel like it. As for openness, it has taken 10 years for Lord Ashcroft, the Tory party deputy chairman, to make a public statement about his tax affairs. …

What, then, was the Tory leader thinking? Did he imagine that Lord Ashcroft’s obfuscation had gone on so long that they could make it to the election without further disclosure? Was he too trusting of a too-trusting Mr Hague? Did he think that it did not matter, or that Lord Ashcroft was too terrifying to sack? Or that it was all jolly awkward and, my goodness, is it time for my next meeting? None of the answers to these questions reflects well on Mr Cameron’s judgement. We are told that Mr Cameron had several conversations with Lord Ashcroft about his tax status but “got little by way of response”. This is feeble. … It makes no sense, and undermines our confidence that he possesses the judgement required to be a successful prime minister.

It is just this impact of the Ashcroft affair which will worry Tory strategists, as it may well result in something my LDV co-editor Mark Pack pointed to yesterday – a ‘tactical rewind’:

… it’s an issue on which many Liberal Democrats and Labour supporters are of a similar mind: privileged Tories skimp on paying tax, want to cut tax for the very richest and cut services for the rest of us. That’s a powerful motivation to encourage anti-Tory tactical voting to continue at the levels seen in 2005. Not so much a case of tactical unwind as tactical rewind.