The government has been forced to agree to a new law banning people who do not pay UK income tax - or are not liable to do so - from giving money to political parties.

Threatened with a huge rebellion - and possible defeat - in the Commons on Monday, the Justice Secretary Jack Straw has made a dramatic U-turn and withdrawn government opposition to an amendment to the Elections Bill recently passed in the Lords by an alliance of Labour rebels, Liberal Democrats and cross-benchers.

The leader of the Lords rebellion Lord Campbell-Savours has confirmed to me that ministers have now accepted his plan, and this has also been confirmed to me by a senior government source.

The measure is clearly aimed at the Conservative Deputy Chairman and election strategist Lord Ashcroft who has given the Conservative Party millions of pounds in recent years, but who has aroused considerable controversy over whether he pays British tax.

But it is likely to have a significant effect on donations to both the major parties.

Both Labour and the Conservatives are thought to have taken large sums of money from wealthy supporters who are non-domiciled in the UK for tax purposes.

Mr Straw has held a series of meeting with Lords and Commons rebels this week but has finally conceded on the issue in the last 36 hours.

Ministers claimed they were sympathetic to the measure but told rebels there were various legal and technical reasons, and issues of principle as to why it was unworkable.

Some rebels suspected however, that Labour may have been hoping for big donations in the immediate future from supporters who do not pay UK tax.

Ministry of Justice officials will be working frantically over this weekend to overcome these obstacles.

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• NowPublic |
• Reddit
• - What's this?

An interesting account of the atmosphere at the News of the World during Andy Coulson's editorship can be found in Peter Burden's book "News of the world? Fake Sheiks and Royal Trappings".

Mr Burden says that on the day the News of the World royal editor Clive Goodman was jailed for four months for hacking into the voicemails of palace aides, Mr Coulson called a staff meeting to announce his immediate resignation, and told colleagues that he thought Goodman had been treated far too harshly by the judge.

According to Mr Burden, Mr Coulson "took the opportunity to vent his anger at the sentence, railing that just that week the Home Secretary, John Reid, had advised judges, in view of current prison overcrowding, that only the most dangerous criminals should be sent to prison".

It would be interesting to know if Mr Coulson still takes that view.

And still supports John Reid's efforts to reduce prison overcrowding!

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• NowPublic |
• Reddit
• - What's this?

Senior Labour sources in Scotland tell me the voters of Glasgow North East may have to wait until November before they get a new MP in succession to Michael Martin, who left the Commons when he stepped down as Speaker last month.

If the Labour whips were to call the by-election right now it would occur slap-bang in the middle of the school holidays. Labour thinks doing that last summer helped ruin their chances in the by-election in neighbouring Glasgow East, a supposedly safe Labour seat famously won by the SNP.

Under the rules Labour can't issue the writ for the by-election whilst the Commons is in recess. MPs won't come back to Westminster until 12 October 2009, which could mean an election on Thursday 12 November 2009. Technically they could hold it on 5 November 2009 but that's unlikely given the religious sensitivity of bonfire night in the West of Scotland.

"We want to hold the election quicker than that," my senior source says, "but there's nothing we can do about it. We can't hold it in the holidays again. We got a lot of criticism for that."

At the moment Labour is pretty confident of success. They claim that on the basis of the local figures in the constituency in the recent European elections - which were disastrous for Labour across most of Britain - they actually won in Glasgow North East.

But can Labour keep that up? The general rule in by-elections is the longer the sitting party waits, the more time it gives the challenger to gain the momentum to win.

A small footnote about my former Newsnight colleague David Kerr. He took voluntary redundancy from BBC Scotland last week to try to become the SNP candidate for Glasgow North East. But then last night, sadly for him, the SNP picked someone else, perhaps because Kerr was seen as Alex Salmond's preferred man.

I first came across Kerr when he was the SNP candidate in the Falkirk by-election of 2004, when I said in my commentary, rather cheekily: "David Kerr used to be editor of Newsnight Scotland, so he should be used to small audiences."

My producer was having kittens during the editing of my film, and begged me to change the line, fearing the wrath of humourless BBC bureaucrats in Glasgow. In the event, nobody complained, partly because my film didn't go out in Scotland... but also, of course, because there are no humourless BBC bureaucrats in Glasgow.

• Bookmark with:
• del.icio.us |
• Digg |
• Newsvine |
• NowPublic |
• Reddit
• - What's this?