Home > Party funding > Ashcroft’s tax status revealed

Ashcroft’s tax status revealed

Lord Ashcroft has confirmed what many had long suspected, he is a non-dom.

In the statement on his website, he reminds readers that he is not the only non-dom to give money:

My precise tax status therefore is that of a “non-dom”. Two of Labour’s biggest donors – Lord Paul (recently made a privy councillor by the Prime Minister) and Sir Ronald Cohen, both long-term residents of the UK, are also “non-doms”.

It is true that Labour have taken money from non-doms too, although this has not been as much of a secret.

It is also interesting to see another reference to Lord Paul being one of Labour’s ‘biggest donors.’ He has made substantial donations, but – as I have pointed out before – the donations recorded from the Electoral Commission from either Lord Paul or Caparo are nowhere near as much as those given over the years by the likes of Ashcroft, Sainsbury, Mittal, Fink or Rowland.

Now his status has been confirmed, not sure where the story will go from now. Obviously attention will turn to the Electoral Commission’s investigation of Bearwood Corporate Services, to consider whether it is carrying on business in the UK.

Another Ashcroft related question is whether he is on the electoral roll – some newspaper reports have previously suggested this is unknown. There is also the question of his promise a decade ago to take up permanent residence in the UK and how long his tax status was known to the Tories.

Moving away from Ashcroft, there is the issue of non-doms in general. As I have mentioned previously, the government have so far declined to bring into force an amendment to the law (passed in 2009) to prevent non-doms from giving money to political parties. You may ask why we should be concerned about non-doms giving money more than anyone else. The justification for restricting non-dom donors was advanced by Lord Campbell-Savours when the amendment was introduced in the House of Lords:

as individual citizens, we collectively pay our taxes in the belief that, having paid them, we have the right to influence how they are used. The payment of, and liability for, tax gives us and not others the right to decide. It is our money, not theirs. It is for us to decide which Government should be in place to spend the money raised from us as citizens through taxation. Those who are not liable to taxation are not entitled, through the use of their money, to influence the Government that is in place to decide how our taxes are spent. Why should a person who is not liable for tax in the United Kingdom influence the use of taxpayers’ money paid by those who are liable for tax?

The line of argument is similar to the rationale for restricting foreign donors –  suggesting that only those fully paying tax here have a sufficient stake in politics to be a donor to a party.

Some now argue that the donations are not the problem, but the position held by people such as Ashcroft. Michael White advances this view in the Guardian today:

There’s nothing wrong with having rich backers, don’t forget. Voters have three choices. They can finance parties through taxes (they don’t like that); they can make small individual donations (not keen on that either); or they can leave it to rich firms and big trade unions (both very unpopular). Failing that it looks like rich men and women have to do it. Labour and the Tories each have a Lord Sainsbury.

Instead, according to White, Lord Ashcroft ‘is special because of his quite dominant role at HQ.’ I would not be so quick to dismiss the problems posed by ‘rich backers.’ But this obviously goes beyond non-dom donors. Non-dom donors face the additional objections outlined by Campbell-Savours. Yet even when people are domiciled in the UK for tax purposes , rich donors still pose a challenge to political equality. Some of the alternatives may not be popular, as Michael White notes, but can provide a fairer way to fund parties.

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