Calls mount for tax inquiry into Ashcroftgate

Ashcroftgate is far from over. More evidence is emerging that the man who bankrolls the Tory party reneged on a promise to become a British tax-payer in return for a seat in the House of Lords in 2000. The Inland Revenue is facing calls to investigate his afairs. And the opposition is continuing to enjoy itself at the Tories’ expense.

The Guardian claims today that it has seen documents which show that William Hague, the Tory leader at the time, gave repeated assurances to Prime Minister Tony Blair and to Lord Thomson, chairman of the Lords scrutiny committee, that Michael Ashcroft, whose interests are mainly in Belize, would return to the UK and end his status as a tax exile.

The documents show that concern over Ashcroft's tax status was the key reason why he was refused a peerage in 1999 and 2000.

On March 23, 2000, Blair wrote to Hague telling him that Thomson's committee was "unable to approve the recommendation for Mr Michael Ashcroft for the forthcoming list of peerages". Within hours, Ashcroft had written to Hague, giving his "clear and unequivocal assurance" that he would be permanently resident in the UK before the end of the year. A week later his peerage was duly announced.

But, as it has transpired in recent days, some sort of fudge was apparently agreed, involving a senior civil servant and a Tory whip, which meant Ashcroft need only declare himself a "long-term resident". Whether it was intended or not, as a result of that agreement Ashcroft was able to remain a non-dom for tax purposes and avoid paying millions of pounds in income tax.

Lib Dem Chris Huhne, one of those leading the calls for an inquiry by the tax authorities, believes Ashcroft has avoided paying £127m in tax over the past decade.

The nature of that "long-term resident" deal looks likely to exercise Westminster for days to come unless someone can nail down precisely who said what and why.

Sir Hayden Phillips, a former senior civil servant who gave Ashcroft's peerage its final approval in 2000, has told the Times that he did not offer Ashcroft an "official blessing" that would allow him to avoid paying tax on his foreign income.

"I was in no position to confirm whether or not he would or would not meet the commitments he had entered into," he said. "Nor was I in the business of interpreting what those commitments meant."

And on Channel 4 News last night, the widow of Lord Thomson said that her husband did not believe Ashcroft was "a suitable man to be a peer". Lady Grace Thomson said: "I know George was rather furious afterwards. He felt he had been promised a certain code of behaviour and that had not worked out. I would say that George felt this was not a suitable man to be a peer."

Meanwhile, David Cameron has come up with the rather lame complaint that the media are flogging a dead horse pursuing Ashcroftgate. Oh no they're not.

And nor will that be much of an answer when the subject comes up - as it surely will - during the TV debates, on which Brown, Cameron and the Lib Dems' Nick Clegg finally reached agreement yesterday.

All is now settled for Britain's first stab at US-style debates - apart from the dates, of course, which will have to be finalised after Brown calls the election. According to the Independent, the three debates have been pencilled in for 8pm to 9.30pm on Thursdays April 15 and 22 and Wednesday April 28.

It doesn't mean Brown won't suddenly go early, but May 6 clearly remains the most likely day. ·