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Harman attacks Hague on Ashcroft Hague 'told recently of Ashcroft'
(about 2 hours later)
Labour's deputy leader has said ex-Tory leader William Hague lacks a "shred of credibility" over his involvement with Lord Ashcroft being awarded a peerage. Ex-Tory leader William Hague says he found out in the "last few months" that Lord Ashcroft changed an undertaking he made before being granted a peerage.
The Tory donor has revealed he is a "non-dom" - someone who does not have to pay UK tax on overseas earnings. The peer agreed to become a "permanent" UK resident, making it more likely he would pay tax on overseas earnings.
Harriet Harman said Mr Hague's promise 10 years ago that the peer would pay "tens of millions" in taxes was wrong and suggested he might resign. But this was later changed to "long-term resident" - a lesser commitment - after discussions with civil servants.
But Mr Hague told the Commons Labour must answer questions over its donors. Mr Hague told the BBC he had been keen on making the peer's position "public" after finding out about it.
The issue of the billionaire businessman and Conservative deputy chairman Lord Ashcroft's tax status dominated a bad-tempered and rowdy prime minister's questions session. Following years of questions about his status, Conservative deputy chairman and donor Lord Ashcroft revealed this week that he had been non-domiciled for tax purposes for the past decade.
Speaker John Bercow had to intervene several times to calm MPs. This means he did not have to pay UK taxes on overseas earnings.
'Who is right?' 'Tens of millions'
Following years of questions about his status, Lord Ashcroft revealed this week that he had been non-domiciled for tax purposes for the past decade. Michael Ashcroft was refused a peerage by the political honours committee in 1999.
Ms Harman, replacing Gordon Brown at prime minister's questions, challenged Mr Hague, saying: "People who have promised to pay their taxes and given assurances should pay their taxes, and what has happened to the tens of millions of pounds of taxes that the shadow foreign secretary promised would be paid by Lord Ashcroft?" The Guardian has published a letter written afterwards by Mr Hague to then Prime Minister Tony Blair, acknowledging that one reason was that he "was a tax exile".
The shadow foreign secretary stands here without a shred of credibility Harriet Harman, Labour
Mr Hague wrote Mr Ashcroft was "non-resident for tax purposes" but told Mr Blair: "He is committed to becoming resident ... This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."
Mr Ashcroft was given a peerage in 2000 after he signed a letter to Mr Hague promising to "take up permanent residence in the UK again", which would seem to preclude non-dom status.
But the peer, in a statement earlier this week, said that, after talking to government officials, "the interpretation of the first undertaking of the words 'permanent residence' was to be that of 'long-term resident'".
This was a lesser commitment which would allow non-dom status.
Mr Hague, now shadow foreign secretary, told BBC Radio 4's The World Tonight: "Over the last few months I knew and, after that, of course I was very keen to support him in making that position public."
The Cabinet Office said on Tuesday that former Clerk to the Crown in Chancery Sir Hayden Phillips had reached an agreement with Tory chief whip James Arbuthnot in 2000 about the interpretation of Mr Ashcroft's undertaking, concluding that his promise to take up "permanent residence" meant he would be a "long-term resident" in the UK.
A Cabinet Office spokesman said: "This was not about tax; this was about residency."
In his BBC interview, Mr Hague said Mr Ashcroft's undertakings were "to be set in stone and defined by the Cabinet Office". He also said: "I wasn't aware of any of the details of that".
'Credibility'
The issue of Lord Ashcroft's tax status dominated a rowdy prime minister's questions session on Wednesday, in which Mr Hague stood in for Tory leader David Cameron.
Labour deputy leader Harriet Harman, replacing Gordon Brown, challenged Mr Hague, saying: "People who have promised to pay their taxes and given assurances should pay their taxes, and what has happened to the tens of millions of pounds of taxes that the shadow foreign secretary promised would be paid by Lord Ashcroft?"
She also said: "The shadow foreign secretary stands here without a shred of credibility."She also said: "The shadow foreign secretary stands here without a shred of credibility."
There has been a lot of hypocrisy about this David Cameron, Conservatives
Insisting Mr Hague and Lord Ashcroft could not "both be right", she added: "One of them must go."Insisting Mr Hague and Lord Ashcroft could not "both be right", she added: "One of them must go."
But Mr Hague, standing in for Tory leader David Cameron in the Commons, accused Labour of being in a "desperate panic". But Mr Hague, standing in for Tory leader David Cameron, accused Labour of being in a "desperate panic".
He also said: "If she wants to discuss the House of Lords, I'm sure she will want to explain the position of Lord Paul, who was made a privy counsellor after he bought 6,000 copies of the prime minister's book on courage.He also said: "If she wants to discuss the House of Lords, I'm sure she will want to explain the position of Lord Paul, who was made a privy counsellor after he bought 6,000 copies of the prime minister's book on courage.
"Never has so much been given for so few people to read so many words in vain."Never has so much been given for so few people to read so many words in vain.
"She might also want explain why Labour took half a million pounds from a hedge fund manager called Mr Bollinger. Champagne socialism is alive and well in the Labour Party, obviously.""She might also want explain why Labour took half a million pounds from a hedge fund manager called Mr Bollinger. Champagne socialism is alive and well in the Labour Party, obviously."
Attacking Labour's record, he said: "People in glass houses shouldn't throw stones."Attacking Labour's record, he said: "People in glass houses shouldn't throw stones."
'Tax exile'
Mr Hague became central to the row over Lord Ashcroft after The Guardian published details of letters between him and then prime minister Tony Blair from 1999 and 2000.
In a letter following the political honours committee's 1999 refusal of a nomination for a peerage, Mr Hague acknowledged that one reason for their decision was that "Mr Ashcroft was a tax exile".
He confirmed that Mr Ashcroft was "non-resident for tax purposes" but told Mr Blair: "He is committed to becoming resident ... This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."
Mr Ashcroft became Lord Ashcroft after he signed a letter to Mr Hague promising to "take up permanent residence in the UK again", which would seem to preclude non-dom status.
But the peer, in a statement earlier this week, said that, after a "dialogue with the government", "the interpretation of the first undertaking of the words 'permanent residence' was to be that of 'long-term resident'", a lesser commitment which would allow non-dom status.
'Not suitable'
The Cabinet Office said on Tuesday that former Clerk to the Crown in Chancery Sir Hayden Phillips had reached an agreement with Tory chief whip James Arbuthnot in 2000 about the interpretation of Mr Ashcroft's undertaking, concluding that his promise to take up "permanent residence" meant he would be a "long-term resident" in the UK.
A Cabinet Office spokesman said: "This was not about tax; this was about residency."
But Sir Hayden told The Times: "I was in no position to confirm whether or not he [Lord Ashcroft] would or would not meet the commitments he had entered into. Nor was I in the business of interpreting what those commitments meant."
According to The Guardian, the chairman of the Public Honours Scrutiny Committee, Lord Thomson of Monifieth, told Mr Blair in 1999 that the tax status of Mr Ashcroft, "seems central" to the question of whether he should be ennobled.
The Liberal Democrats have called on HM Revenue and Customs to conduct an inquiry into whether Lord Ashcroft's commitment to take up "permanent residence" in the UK was compatible with his status as "non-domiciled" for tax purposes.The Liberal Democrats have called on HM Revenue and Customs to conduct an inquiry into whether Lord Ashcroft's commitment to take up "permanent residence" in the UK was compatible with his status as "non-domiciled" for tax purposes.
Home affairs spokesman Chris Huhne, who estimates that Lord Ashcroft has saved around £127m over 10 years, asked whether he should pay any back taxes.Home affairs spokesman Chris Huhne, who estimates that Lord Ashcroft has saved around £127m over 10 years, asked whether he should pay any back taxes.