Leading article: A saga that reflects badly on the Conservative Party

David Cameron should have stood up to Lord Ashcroft long ago

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At last we have an answer to one of the nagging questions of British politics.

Lord Ashcroft, the deputy chairman of the Conservative Party and its biggest donor, released a statement yesterday revealing that he is a "non-domiciled" resident of the UK. What this means is that Lord Ashcroft pays UK tax on his British earnings, but not on his income from abroad. The Tory leadership expressed the hope yesterday that this will draw a line under the whole bothersome saga of Lord Ashcroft's tax status. Alas, this is wishful thinking.

For one thing, when Mr Ashcroft was made a peer in 2000 on the condition that he became a UK resident, there was no mention of the curious half-in half-out status of the "non-dom". Rather, the implication was that Mr Ashcroft would become a full British citizen and a full UK taxpayer. Lord Ashcroft now claims he struck a deal with the Government a decade ago that his "long-term residency" as a non-dom would fulfil the requirement that he take up "permanent residency" in Britain. This seems rather a stretch. And even if Lord Ashcroft's arrangements fit the letter of the 2000 agreement, they are hardly living up to the spirit of it. Moreover, if becoming a non-dom was an entirely honourable course for Lord Ashcroft, why does he now apparently plan to become a full resident?

Then there is the manner in which this information has emerged. Lord Ashcroft says he has broken his silence because he does not want his affairs to become a distraction in the forthcoming general election campaign. Yet the timing appears to be a response to the ruling last month by the Information Commissioner, Christopher Graham, that the Cabinet Office should release the precise terms of the 2000 agreement on the granting of the peerage. Lord Ashcroft has gone public merely because he was forced to do so.

This whole business reflects badly on the Conservative leader, David Cameron. Mr Cameron released a statement of his own yesterday, welcoming Lord Ashcroft's revelation. This typifies the supine position the Conservative leader has adopted throughout this affair. Mr Cameron ought to have put an end to the farce years ago by demanding that his deputy party chairman come clean, rather than insisting that the peer's tax status was a private matter.

Lord Ashcroft is hardly an obscure private individual. As this newspaper's investigation at the weekend made clear, the peer is in charge of a formidable operation within Conservative Party headquarters which is ploughing considerable sums of money directly into Conservative association coffers in marginal constituencies. And the results of these marginal constituencies in the next general election could be of the highest importance. Whether Lord Ashcroft likes it or not, he is a public figure. And as the Information Commissioner argues, there is a "legitimate interest" in his tax affairs.

The Tories have attempted to deflect some of the pressure they are now under by pointing to several Labour donors who, like Lord Ashcroft, are also non-domiciled. Labour must indeed account for their decision to take money from these individuals. But none of that excuses the Conservatives' failure to stand up to their own benefactor and their inability to see – despite many warnings – that obfuscation on this question would make matters worse for them in the end.

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