The biggest cheer during Alistair Darling's budget speech erupted when he announced that the UK has reached agreements with three overseas tax havens. Strange, it might seem, unless you knew that one of them was the Central American state of Belize – where the non-dom deputy chairman of the Conservative Party, Lord Ashcroft, has a lot of his fortune. The Tory MP sat in stony-faced silence.
But, despite the Labour cheering, financial experts said afterwards that it may not mean very much in practice. The tax information exchange agreements will mean that UK tax inspectors will be able to request information from any of the states involved – Belize, Dominica and Grenada – only if they have evidence that someone is involved in crime or tax avoidance.
One expert said: "It will lead to a behavioural change as people who go to Belize know that Belize is exchanging information with us. It will make the tax affairs of Britons in Belize less invisible." It could also benefit British citizens in Belize who are thinking of returning the UK, because it will protect them from being taxed twice on the same income.
Lord Ashcroft admitted earlier this month that he has not domiciled in the UK for tax purposes, despite having made a promise 10 years ago, before being awarded a peerage, that he would make the UK his permanent residence. He has not disclosed where he is domiciled, but on his website he refers to Belize as his home. He is also thought to have business interests on the Turks and Caicos Islands, but he has fiercely protected himself against intrusion into what he sees as his private affairs.
Lawyers representing Lord Ashcroft have succeeded in holding up a Panorama documentary into Lord Ashcroft's business interests in Belize and the Turks and Caicos. The Conservatives also put pressure on the BBC not to broadcast the programme before a general election. Lord Ashcroft is also suing The Independent over two articles about his involvement in Turks and Caicos.
His legal threats were raised in the Commons yesterday by the Labour MP, David Borrow, who told Gordon Brown: "No MP should seek to prevent, through censorship, the BBC or The Independent from questioning the involvement of Lord Ashcroft in alleged corruption scandals in the Turks and Caicos."
His remark was almost drowned by jeers and shouts from Tory MPs, provoking the Prime Minister to reply: "They do not like hearing the name 'Lord Ashcroft', but he is deputy chairman of the Conservative Party."
In a separate Commons exchange the previous day, the Labour MP Gordon Prentice asked: "Is there any evidence that contracts were awarded to Lord Ashcroft by people who are being investigated for possible corruption?"
But the Foreign Office minister Chris Bryant told MPs: "The precise nexus of companies and organisations on the Turks and Caicos Islands is enormously complicated, so sometimes it is difficult to be precise about who owned what at any particular moment."
But Mr Bryant added that the islands' former governor, Gordon Wetherell, believed that Lord Ashcroft either owned or controlled Johnston International, a major construction firm operating on Turks and Caicos, and the Belize Bank, which Mr Bryant described as "the holding bank for party political slush-fund accounts" on Turks and Caicos.Reuse content