Pendle MP, Gordon Prentice, last night told the House of Commons that Lord Ashcroft should “speak out and tell the truth” on whether he has been a UK resident for tax purposes since his elevation to the peerage in 2000 on the recommendation of the then leader of the Conservative Party, William Hague.

The MP told the Commons that the Information Commissioner had ruled that the Cabinet Office must give details of the undertaking Michael Ashcroft gave when he was being considered for a peerage and to whom it was given. He ordered that this information must be given to the Pendle MP within 35 days of his decision notice (issued on 28 January 2010).

Speaking afterwards, the MP said: “Lord Ashcroft has bankrolled the Conservative Party for years. He is also financing the money-no-object campaign in my Pendle constituency where we have seen a tsunami of newspapers, glossies and surveys for the past three years. All paid for by a tax exile.”

“I also want William Hague and David Cameron to ask Ashcroft directly whether he is and has been since 2000 a UK resident for tax purposes. After the Information Commissioner’s ruling it is no good saying these matters are for Ashcroft and the Revenue and Customs.”

Note to Editors: The Information Commissioner’s decision can be accessed via the Information Commissioner’s Office website. The case reference number is: FS50197952

The MP’s new clause designed to force MPs and peers to disclose whether they had been UK taxpayers in each year since 2000 could not be moved and voted upon for procedural reasons.

The Government’s new clauses on the tax status of MPs and peers were carried with all Party support. The changes – which require all MPs and peers to be deemed to be UK residents for tax purposes – were not retrospective.

Note 2 to Editors: The MP’s Commons speech on 1 February 2010 is set out below:

Mr. Gordon Prentice (Pendle) (Lab): I just want to say a few words to start with for my many supporters out there. I fear that I have been stitched up procedurally, and it may not be possible to vote on my new clause. I know that that will disappoint my many supporters, and it grieves me. I support Government new clauses 85 and 86, but so do the Conservatives and the Liberal Democrats. My new clause is in the same grouping, and the first vote will be on Government new clause 85. I shall not ask my friends to vote against my Government, so that will go through, and that will effectively kill all the other new clauses and amendments in that group. That is the stitch-up.

My new clause proposes an approach that the others do not, and it would have retrospective effect, but I shall come to that. My Government have come to this issue very late-two or three months before a general election-but we have known that this has been a festering problem for years. Even last year, when Lord Campbell-Savours tabled amendments to the Political Parties and Elections Act 2009-which capped at £7,500 the donations that non-doms could made to political parties-the Government had to be forced into accepting that position. My friend the Secretary of State for Justice told me that I had the numbers-not that the argument was right, but that I had the numbers. What a tragedy it is that my Government act on that basis.

Mr. Wills: My hon. Friend has fought a successful campaign and deserves credit for his diligence and persistence, but he should give the whole picture. I do not know what my right hon. Friend the Justice Secretary said, but we have always talked about the principle behind this issue, and my hon. Friend should at least give us credit for that.

A few years ago, we woke up to the problem that there were legislators in this Parliament who were not paying UK taxes. That was an affront to those inside and outside this place. Indeed, I know for a fact that one legislator is a tax exile. Moreover, he is a tax exile on leave of absence. It is Lord Laidlaw, a former vice-chairman of the Conservative party, who was ennobled in 2004 after promising the House of Lords Appointments Commission that he would become a UK resident for tax purposes. He reneged on that promise.

HOLAC's annual report for 2006-07 said:

"During spring 2004, the Commission vetted a list of party-political nominees. One of the individuals on the list, Irvine Laidlaw (now Lord Laidlaw of Rothiemay) was not resident in the UK for tax purposes. Following an exchange of correspondence and a face-to-face meeting, the Commission accepted an assurance from Lord Laidlaw that he would become a resident in the UK for tax purposes from April 2004. On the basis of this assurance, the Commission found no objection to his appointment. The Commission would have taken a different view on Lord Laidlaw's nomination if it had known that he would not be resident in the UK for tax purposes from April 2004. In June 2004 he was appointed to the House of Lords."

Lord Laidlaw still does not pay UK taxes. He is a self-confessed tax exile living in Monaco. He has given £3 million to the Conservative party, and I have said publicly many times that it should return that tainted money. To take money from someone who sits in the UK Parliament but does not pay UK taxes is a scandal.

Bob Spink: Does that breach of trust by Lord Laidlaw give the hon. Gentleman any confidence in the promise made by Tory candidate Zac Goldsmith along the same lines?

Mr. Prentice: I do not want to get sucked into that issue-[Hon. Members: "Go on!"] No, I have read all the stuff in the newspapers about Zac Goldsmith not receiving a benefit from his non-dom status and how it was all a big mistake that would be put right, but I do not want to go there. I just want to draw attention to something that is on the record, because it is a scandal that a tax exile has been bankrolling the Conservatives' campaign and they will not give the money back.

Lord Stevenson, the then chair of HOLAC, wrote to Tony Blair, then Prime Minister, about the issue:

"The Commission has always required that nominees to the House of Lords must be resident in the UK for tax purposes. Following a review of our processes in 2005"-

following the Laidlaw scandal-

"we will not vet nominees who are not resident in the UK for tax purposes; nominees need to be UK resident and paying taxes before the Commission will consider their nomination."

That is the effect of the scandal of the former vice-chairman of the Conservative party who was given a peerage in 2004. HOLAC will no longer even accept nominations if the person is not a UK resident for tax purposes.

I turn now to Lord Ashcroft, whose case has some similarities to that of Lord Laidlaw. Lord Ashcroft gave an undertaking to the Political Honours Scrutiny Committee, the predecessor body of the House of Lords Appointments Commission, that he would become a UK resident for tax purposes in 2000. However, unlike with Lord Laidlaw, we have no record of his giving any assurance that he has done that. Now we are in an Alice in Wonderland situation, where for 10 years we have found it impossible to establish whether Lord Ashcroft has properly been elevated to the peerage, even though what I have described was, in a sense, a condition of his being elevated to the peerage.

Like many other colleagues, I have read all 36 pages of the report from the Information Commissioner, who agrees with me that more information should be put into the public domain about the nature of the undertaking that was given by Michael Ashcroft-now Lord Ashcroft-and the form that that undertaking took. Let me remind the Committee-this is relevant and I want to get it on the record-that Michael Ashcroft was appointed to the House of Lords in 2000. A No. 10 statement was issued in March 2000 saying:

"In order to meet the requirements for a Working Peer, Mr. Michael Ashcroft has given his clear and unequivocal assurance that he will take up permanent residence in the United Kingdom again before the end of the calendar year"-

that is, before the end of 2000. The statement continued:

"He would be introduced into the House of lords only after taking up that residence."

Then the statement said:

"These undertakings have been endorsed by the Leader of the Conservative Party"-

then the right hon. Member for Richmond, Yorks (Mr. Hague)-

"and conveyed to the Prime Minister and to the Political Honours Scrutiny Committee."

That is very clear indeed; and yet for 10 years Lord Ashcroft has maintained that the matter is private and that no one else has the right to inquire into it, even though that undertaking was a condition of his elevation to the peerage.

The Information Commissioner will be asking for-or rather, not asking for, but ordering-the release of that information within the next 35 days. Let me make a public request to Lord Ashcroft now: he should not wait 35 days; he should just speak out now and tell us what we all want to know. He just needs to say, "Yes, I am a UK resident for tax purposes, and I have been for each of the past 10 years," and then my new clause and this whole debate will be otiose and redundant. We will see what happens with Michael Ashcroft. I just want him to speak out and tell the truth, and I am sure that he will.

I know that colleagues are uncomfortable about retrospection, and I am too. However, we have on the amendment paper today an amendment or new clause-I cannot remember which-that allows for retrospection in MPs' salaries. Legg, like it or not, is retrospective: he has gone back five years, which is retrospection with a capital R and in bold. The other thing about my new clause and retrospection is that it does not apply to the wider population, but to a small subset of the population: us and our colleagues in the House of Lords. I accept that it is in the public interest generally to avoid retrospective legislation, but there are cases where it is justified.

I thought at this stage that I would be looking at the back of the head of my friend the Member for Blackburn (Mr. Straw), but he is not here. However, I will make this point anyway. The Criminal Evidence (Witness Anonymity) Act 2008 was introduced by him and it has retrospective provisions. The Election Publications Act 2001 was also introduced, I think, by my friend the Member for Blackburn, who was Home Secretary in 2001, so there are many-well, not many; I am getting carried away-there are a number of Acts containing retrospective provisions of which my friend the Member for Blackburn was the author. There is also the Banking Act 2009, which gives the Treasury powers to make orders with retrospective effect. I have tried to do a little homework for this debate, because to me it is about an important issue. The House of Lords Select Committee on the Constitution has said:

"there is no absolute prohibition on retrospective legislation in British Constitutional law or practice. There does, however, need to be a compelling reason in the public interest for a departure from the general principle that retrospective legislation is undesirable."

If ever there was an important issue that justified retrospective action, surely it is this one, where people have been in Parliament under what I would say were false pretences.

That is as much as I can do here; I now leave it to people outside. What a sad reflection it is on our procedures that I have to rely on the Information Commissioner, who is acting on the view that I put to him, which is that there is a public interest imperative in knowing how people who, unlike us, are not elected get into the legislature down there, in the other place. The Information Commission is doing a very good job.