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Being generous, it is possible to argue that someone who has chosen a domicile in a different country might still have the requisite amount of commitment to this
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country if they refuse to take advantage of their domicile for tax purposes. This is the importance of the remittance basis of tax: a person living in this country might have a long-term intention to live in a different country, but they do not want to take advantage of that for tax purposes. That might show a sufficient commitment to this country. However, someone who has a long-term intention not to be domiciled here and takes advantage of that for their personal advantage is not the kind of person who has sufficient commitment to be a Member of our legislature.

Philip Davies (Shipley) (Con): The hon. Gentleman's argument falls down in relation to the European Union, because 80 per cent. of our laws now come from there rather than this place. The European Commission is made of people who have no commitment to, and do not pay tax in, this country, but who still pass laws that affect this country. Presumably, according to his line of argument and criteria, European commissioners should introduce laws in this country only if they are paying tax here.

David Howarth: I do not accept the premise of the hon. Gentleman's argument, because I do not know how we would measure a percentage of laws. Nor do I accept that laws passed in Europe are not passed by this country-that is also wrong, because this country passed an Act of Parliament allowing it to happen. The fundamental question is who should be in the legislature of this country when it passes something like the European Communities Act 1972. Such a person should have a degree of commitment to living in this country.

Mr. Grieve: Dare I say that the hon. Gentleman seems to be following a rather esoteric path? The reasons why we have such odd rules that allow all sorts of strange people to come here and become peers and Members of Parliament are, firstly, our imperial past, particularly in respect of Commonwealth citizens-we have never modernised the rules in that regard but have left them as they are-and secondly, our mediaeval past, which is about personal fealty. People could move around and pledge personal fealty, and fulfil it.

What fascinates me-dare I say it?-is the rather nationalist view the hon. Gentleman is expressing. I find it strangely out of keeping with the principles that I normally associate with the Liberal Democrats.

David Howarth: I do not think the Liberal Democrats have ever said it was a good idea for someone who had no connection with a local authority area to stand for election to that local authority. Perhaps I am expressing some Whig principles, but we have stood by those principles for a very long time.

There is a real problem. What we are talking about is not whether people pay tax in a certain way, but the underlying problem of their commitment. That is why I am not entirely happy with how the Government have chosen to deal with the problem-it does not require that commitment from individuals, but simply says that they are to be treated as if they have it whether or not they do. The measure tends to treat the symptoms, not the underlying disease.

Mike Penning (Hemel Hempstead) (Con): I am slightly curious, because I know the hon. Gentleman is a good European. Surely the concept of the European Union is
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free movement within the European Union. The hon. Gentleman's argument would prevent that movement ethic, because a person would be precluded from moving around by the fact that he must have a commitment back here. If a person is committed to the European Union, he should be able to go around the European Union.

David Howarth: I remind the hon. Gentleman that we are talking about people in the legislature-Members of Parliament and Members of the House of Lords. I rather doubt that a person living in Sicily would take into account the chances of becoming a Member of the House of Lords when deciding whether to move to Britain. We are talking about law-making, not general economic activity.

Bob Spink (Castle Point) (Ind): The hon. Gentleman will be delighted to hear that I want to move him away from Europe-I am sure you will be pleased about that, too, Mr. Illsley. He was talking about commitment, which is important. However, is it not more important to consider the authority of those who set taxes? We rule the country, as it were, and fix the laws, by the authority of the people. They do not want other people to pass laws on what taxes they will pay if those others themselves seek to avoid paying those taxes, like so many Conservatives.

David Howarth: I thank the hon. Gentleman for that point and simply add this: the fact that people were seeking to avoid tax is important, not whether they actually ended up paying tax on one basis or another.

The Liberal Democrats made a slightly different proposal that did not involve the deeming provision. It would simply have meant that if someone admitted to being a non-dom and took advantage of that for tax purposes, they should resign from the Lords-they would simply not be allowed to be a Member of the Lords. If they are not willing to say whether they are non-doms or not, they should be suspended from the Lords until they do so. If they make a declaration about their status but lie about it, that should be a crime and they should be disqualified from the Lords. That is a straightforward approach. It is not vindictive or retrospective, but it is firm in its central purpose, which is to say to people who do not have that real level of commitment to this country that they should not sit in our legislature.

One can quibble about the detail in all these proposals. I accept that the Government's proposals are better than the present situation, and better than the Conservatives' proposals, which lack any transparency. However, a different approach would come closer to the reality at the heart of the matter, and I ask the Government to think about whether what we are doing here is legislating about reality or appearance.

Mr. Gordon Prentice (Pendle) (Lab): I just want to say a few words to start with for my many supporters out there. I fear that I have been stitched up procedurally, and it may not be possible to vote on my new clause. I know that that will disappoint my many supporters, and it grieves me. I support Government new clauses 85 and 86, but so do the Conservatives and the Liberal
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Democrats. My new clause is in the same grouping, and the first vote will be on Government new clause 85. I shall not ask my friends to vote against my Government, so that will go through, and that will effectively kill all the other new clauses and amendments in that group. That is the stitch-up.

My new clause proposes an approach that the others do not, and it would have retrospective effect, but I shall come to that. My Government have come to this issue very late-two or three months before a general election-but we have known that this has been a festering problem for years. Even last year, when Lord Campbell-Savours tabled amendments to the Political Parties and Elections Act 2009-which capped at £7,500 the donations that non-doms could made to political parties-the Government had to be forced into accepting that position. My friend the Secretary of State for Justice told me that I had the numbers-not that the argument was right, but that I had the numbers. What a tragedy it is that my Government act on that basis.

Mr. Wills: My hon. Friend has fought a successful campaign and deserves credit for his diligence and persistence, but he should give the whole picture. I do not know what my right hon. Friend the Justice Secretary said, but we have always talked about the principle behind this issue, and my hon. Friend should at least give us credit for that.

Mr. Prentice: In the real world, when these changes take effect really matters. I had a private Member's Bill more than two years ago-the Disqualification from Parliament (Taxation Status) Bill-which ran into the usual procedural problems. However, the Government had an opportunity to take up that Bill and, with our huge majority and given the demands for action by Labour Back Benchers, to make it law. The cap on donations was too late and although the new clauses are welcome, they do not go far enough, nor are they retrospective.

8.15 pm

A few years ago, we woke up to the problem that there were legislators in this Parliament who were not paying UK taxes. That was an affront to those inside and outside this place. Indeed, I know for a fact that one legislator is a tax exile. Moreover, he is a tax exile on leave of absence. It is Lord Laidlaw, a former vice-chairman of the Conservative party, who was ennobled in 2004 after promising the House of Lords Appointments Commission that he would become a UK resident for tax purposes. He reneged on that promise.

HOLAC's annual report for 2006-07 said:

Lord Laidlaw still does not pay UK taxes. He is a self-confessed tax exile living in Monaco. He has given £3 million to the Conservative party, and I have said
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publicly many times that it should return that tainted money. To take money from someone who sits in the UK Parliament but does not pay UK taxes is a scandal.

Bob Spink: Does that breach of trust by Lord Laidlaw give the hon. Gentleman any confidence in the promise made by Tory candidate Zac Goldsmith along the same lines?

Mr. Prentice: I do not want to get sucked into that issue-[Hon. Members: "Go on!"] No, I have read all the stuff in the newspapers about Zac Goldsmith not receiving a benefit from his non-dom status and how it was all a big mistake that would be put right, but I do not want to go there. I just want to draw attention to something that is on the record, because it is a scandal that a tax exile has been bankrolling the Conservatives' campaign and they will not give the money back.

Lord Stevenson, the then chair of HOLAC, wrote to Tony Blair, then Prime Minister, about the issue:

following the Laidlaw scandal-

That is the effect of the scandal of the former vice-chairman of the Conservative party who was given a peerage in 2004. HOLAC will no longer even accept nominations if the person is not a UK resident for tax purposes.

I turn now to Lord Ashcroft, whose case has some similarities to that of Lord Laidlaw. Lord Ashcroft gave an undertaking to the Political Honours Scrutiny Committee, the predecessor body of the House of Lords Appointments Commission, that he would become a UK resident for tax purposes in 2000. However, unlike with Lord Laidlaw, we have no record of his giving any assurance that he has done that. Now we are in an Alice in Wonderland situation, where for 10 years we have found it impossible to establish whether Lord Ashcroft has properly been elevated to the peerage, even though what I have described was, in a sense, a condition of his being elevated to the peerage.

Like many other colleagues, I have read all 36 pages of the report from the Information Commissioner, who agrees with me that more information should be put into the public domain about the nature of the undertaking that was given by Michael Ashcroft-now Lord Ashcroft-and the form that that undertaking took. Let me remind the Committee-this is relevant and I want to get it on the record-that Michael Ashcroft was appointed to the House of Lords in 2000. A No. 10 statement was issued in March 2000 saying:

that is, before the end of 2000. The statement continued:

Then the statement said:


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then the right hon. Member for Richmond, Yorks (Mr. Hague)-

That is very clear indeed; and yet for 10 years Lord Ashcroft has maintained that the matter is private and that no one else has the right to inquire into it, even though that undertaking was a condition of his elevation to the peerage.

The Information Commissioner will be asking for-or rather, not asking for, but ordering-the release of that information within the next 35 days. Let me make a public request to Lord Ashcroft now: he should not wait 35 days; he should just speak out now and tell us what we all want to know. He just needs to say, "Yes, I am a UK resident for tax purposes, and I have been for each of the past 10 years," and then my new clause and this whole debate will be otiose and redundant. We will see what happens with Michael Ashcroft. I just want him to speak out and tell the truth, and I am sure that he will.

I know that colleagues are uncomfortable about retrospection, and I am too. However, we have on the amendment paper today an amendment or new clause-I cannot remember which-that allows for retrospection in MPs' salaries. Legg, like it or not, is retrospective: he has gone back five years, which is retrospection with a capital R and in bold. The other thing about my new clause and retrospection is that it does not apply to the wider population, but to a small subset of the population: us and our colleagues in the House of Lords. I accept that it is in the public interest generally to avoid retrospective legislation, but there are cases where it is justified.

I thought at this stage that I would be looking at the back of the head of my friend the Member for Blackburn (Mr. Straw), but he is not here. However, I will make this point anyway. The Criminal Evidence (Witness Anonymity) Act 2008 was introduced by him and it has retrospective provisions. The Election Publications Act 2001 was also introduced, I think, by my friend the Member for Blackburn, who was Home Secretary in 2001, so there are many-well, not many; I am getting carried away-there are a number of Acts containing retrospective provisions of which my friend the Member for Blackburn was the author. There is also the Banking Act 2009, which gives the Treasury powers to make orders with retrospective effect. I have tried to do a little homework for this debate, because to me it is about an important issue. The House of Lords Select Committee on the Constitution has said:

If ever there was an important issue that justified retrospective action, surely it is this one, where people have been in Parliament under what I would say were false pretences.

That is as much as I can do here; I now leave it to people outside. What a sad reflection it is on our procedures that I have to rely on the Information Commissioner, who is acting on the view that I put to him, which is that there is a public interest imperative in knowing how people who, unlike us, are not elected get into the legislature down there, in the other place. The Information Commission is doing a very good job.


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Dr. Richard Taylor (Wyre Forest) (Ind): It is a great pleasure to follow the hon. Member for Pendle (Mr. Prentice). If he pushes his new clause 52 to a vote, I will certainly support it. Hon. Members must understand that I come at this issue from the point of view of independent election candidates, who fight on a very unlevel playing field. To my mind, new clause 52 would level the playing field for us independents and, perhaps, the smaller parties as well.

Let us look at the recent changes to the election expenses regulations. We now have a long campaign as well as a short campaign. In the long campaign we are allowed to spend £25,000, plus an amount for each constituent. What independent hopeful or smaller party has 25 grand to spend, unless they happen to be multi-millionaires? It is enough of a struggle to raise the £7,000 and a bit for the short campaign, so anything that placed more control on outside donors, with a retrospective focus on their tax status, would certainly make it rather more difficult for these super-rich people to donate to the main parties. I realise that that would not be popular with Members who belong to parties. However, in view of the desire to improve the reputation of the House and of our electoral system, I appeal to hon. Members to look at the use of rich supporters in the football league. It is well known that money buys the best footballers.

Kelvin Hopkins (Luton, North) (Lab): I thought that the 1832 Reform Act had got rid of the idea that votes could be bought. Perhaps they can no longer be bought directly, but elections can certainly be bought. Does the hon. Gentleman agree that certain seats will be won because of the money spent there?

Dr. Taylor: I will refer to the hon. Member as my hon. Friend, because he has just made the point that I was about to make. It appears that people can buy election results, but they cannot necessarily buy the best MPs. I am absolutely in favour of the hon. Member for Pendle's new clause, and I wish that he would press it to a vote.

8.30 pm

Mr. Wills: That was an interesting debate. Although it is sometimes hard to discern it, I believe that there is a broad measure of consensus on these matters. I know that my hon. Friend the Member for Pendle (Mr. Prentice) prefers his own new clause, but he did not actually raise too many concerns about the Government's proposals, apart from the issue of retrospectivity, which I will come to.

The hon. and learned Member for Beaconsfield (Mr. Grieve) made a point about leave of absence. He will be aware of the correspondence on that. I remind him that the policy intention behind the new clauses is to ensure that those who sit in the United Kingdom Parliament pay tax on the same basis as the majority of the population. I hope that he will accept that his concerns would come into play only when someone was working abroad on public service. They would not refer to someone taking a leave of absence to avoid, or even evade, paying tax in this country. We are talking about people who go away to work on public service and, for the most part, for only a short period of time.


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