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The Tory offshore peer

Robert Peston | 07:00 UK time, Wednesday, 18 April 2007

lord_laidlaw.jpgLord Laidlaw remains a tax exile, three years after having agreed to become resident in the UK for tax purposes as a condition of becoming a Tory peer.

When nominated for a peerage in the spring of 2004, the Lords Appointments Commission insisted that the wealthy businessman should not become a lord unless he agreed to start paying most of his taxes in Britain.

In April of 2004, Lord Laidlaw - who has been a substantial donor to the Tory Party - agreed to do just that. But I've learned that Lord Laidlaw is still not resident in the UK.

Lord Laidlaw wrote to the Lords Appointments Commission three weeks ago explaining why he had not yet given up his tax-exile status. The letter, which has been read to me, cites a variety of personal reasons.

The letter also says that Lord Laidlaw still intends to become a UK resident for tax purposes.

However the Lords Appointments Commission - which was created by Tony Blair to vet all nominees of the House of Lords - is furious at Lord Laidlaw's failure to come back onshore. One of the conditions it sets for all new peers is that they should pay most of their tax in the UK.

The Commission has no formal punitive powers. But it plans to name and shame him in a review of its activities, to be published in a few weeks.

When contacted by me, Lord Laidlaw said "I have made it a rule never to speak to journalists".

A friend of Lord Laidlaw said: "No date was ever set for Lord Laidlaw to become resident in the UK".

The disclosure will add to the unease about the process of creating peers, which has been highlighted by the police investigation into peerages offered by Tony Blair to four business people who lent millions collectively to the Labour Party.

In 2005, Lord Laidlaw - who has homes in Monaco, London and Florida - sold his conferences business, the Institute of International Research, for £768m. He picked up £714m for his stake in the Bermuda-based business.

There was plenty of controversy when Irvine Laidlaw became a lord because he has been a generous Tory donor. He is believed to have given the Tories more than £1m in the past. The Conservative Party currently owes Lord Laidlaw £2.5m.

Lord Laidlaw is a substantial donor to charity, notably the Laidlaw Youth Trust which helps disadvantaged young people in Scotland. He has also provided an estimated £2m to finance productions at the London Coliseum.

The Lords Appointments Commission tells me it has now shut the stable door. As of last year, it will no longer even consider anyone for a peerage if the nominee is not already resident in the UK for tax purposes. Which shows quite how seriously it regards Lord Laidlaw's failure to honour his agreement to become a tax resident.

The Lords Appointments Commission has today written to Lord Laidlaw saying that it would not have approved his appointment to the Lords if it had known that he would remain a tax exile.

The Commission's members feel very let down by Lord Laidlaw's behaviour.

They have in their possession a civil servant's notes of a meeting between Lord Laidlaw and the chairman of the Commission, Lord Stevenson, which took place on April 2 2004.

The minutes record Lord Laidlaw as saying he would become a tax resident as of April 6 that same year.

The commission is insisting therefore that Lord Laidlaw now backdate his residency and make all payments due to Her Majesty’s Revenue and Customs over the past three years.

That could be very expensive for the wealthy businessman - who pocketed more than £700m in 2005 when he sold his conferences business.

But the pressure is piling on him, after the Tory leader, David Cameron, insisted he honour his undertakings.

Comments   Post your comment

  • 1.
  • At 09:41 AM on 18 Apr 2007,
  • Nick wrote:

Who cares?

  • 2.
  • At 10:06 AM on 18 Apr 2007,
  • Paul Amery wrote:

It would be interesting to learn how many donors to the Labour and Conservative parties, and how many recently created peers are either non-resident for tax purposes or are resident but non-domiciled. it is amazing that in this country we allow tax exiles to impose taxes on the rest of us. Can you investigate?

I like the idea of having "personal reasons" for being a tax exile. I thought all tax exiles had a fairly obvious personal reason...

  • 4.
  • At 11:45 AM on 18 Apr 2007,
  • Nick wrote:

Amazing how people will take two different facts and juxtapose them to make an emotional point with no basis in law or logic.

So he's a peer - let us hope this is because he is perceived as someone who has something to contribute, (he is a "working peer" after all), and he's also a tax exile. While you can comment on either of these items, putting them together like this, while it plays to the emotions, and may outrage the more sensitive or socialist-minded, provides no new information or insight.

Perhaps an open and frank discussion of why wealthy individuals find it more pleasant to live elsewhere and what that means for the tax system ought to be had - but it would undoubtedly be dominated by those who would like to see the successful stripped of their wealth, the tax system reinforced and success penalised through confiscation. I would rather have these individuals stay, pay less tax, and have the economy benefit from their entrepreneurial gifts and personal energy (occasional examples of fraud or misbehaviour notwithstanding)

  • 5.
  • At 12:03 PM on 18 Apr 2007,
  • Colin D Gibbs wrote:

Just shows how widespread "corruption" is within our Political establishment!

I don't know what Laidlaw is worried about - taxes are very easily avoided by the rich these days. In fact it's deliberate government policy.

It's a shame middle-income earners can't afford to avoid taxes so easily.

  • 7.
  • At 12:15 PM on 18 Apr 2007,
  • Stefan Paetow wrote:

It is somewhat disconcerting when a Lord goes back on his word. While it is fine that personal reasons are behind the move to be a tax exile, Lord Laidlaw can't have his cake and eat it. If you promise to become a UK resident in order to be created Lord, then you follow up on it.

It's bad enough that members of the House of Commons go back on their word, but for a Lord to do it... I think it sums up the state of affairs in our nation.

  • 8.
  • At 12:16 PM on 18 Apr 2007,
  • M wrote:

Party donations from private individuals are just another form of corruption. It seems that the views of a few wealthy donors has a disproportionate weight on the decisions of both the Tories and Labour.

Cash for peerages, or cash for policies, is nothing more than glorified corruption. No different from 'special interest' money that so has served to corrupt the US Senate and Congress.

  • 9.
  • At 12:25 PM on 18 Apr 2007,
  • David Cook wrote:

if ever there was a case of cash for peerages then this is it - the guy doesn't even live or pay tax in the UK yet still gets a peerage!

  • 10.
  • At 12:29 PM on 18 Apr 2007,
  • Steve Jameson wrote:

How empty must your life be if you have to deceive your way into getting a title stuck in front of your name?

  • 11.
  • At 12:30 PM on 18 Apr 2007,
  • James wrote:

Are his personal reasons for being a tax exile that he doesn't like paying tax? A usual sneaky, wealthy Tory who wants to keep all his money to himself and not pay any tax to help those less well off. This is why i will never vote Tory..despite what they say they are all me, me, me!

  • 12.
  • At 12:35 PM on 18 Apr 2007,
  • Chris Hills wrote:

He's a politician. What do you expect? It's one rule for them, and a different rule for the rest of us. They do something wrong, and the worst that happens to them is that they have to apologise. Words are cheap. He should be stripped of his peerage and have to pay a big fine, enough to stop others thinking of doing the same sort of thing.

  • 13.
  • At 12:40 PM on 18 Apr 2007,
  • Tim Easton wrote:

I think if you luve in this country you should be taxed on all income generated in this country. No-one should be allowed to conduct business affairs in the UK and avoid tax because they are only in the UK for x amount of days a year.

  • 14.
  • At 01:13 PM on 18 Apr 2007,
  • Andrew wrote:

He has given millions to charity in this country!

What would the government spend the money on??

Instead of criticising Laidlaw,we should be criticising Brown for not making it more attractive for people to live here.

  • 15.
  • At 01:20 PM on 18 Apr 2007,
  • Richard wrote:

I thought you were the business editor. What's the relevance of this to you - it is a politics story ? There are probably a lot more dodgy Lords on the Labour side...

  • 16.
  • At 01:34 PM on 18 Apr 2007,
  • Tony Parrack wrote:

It's particularly disappointing that somebody who is so evidently a generous benefactor of charities etc (and I'm not including the basket-case Tory Party) has to live abroad in order to preserve his wealth. The country would financially earn much more by him residing and spending his wealth here, and I'm sure Parliament would gain from the presence of somebody who clearly has a great deal of useful business experience to offer (unlike most of those who currently reside in the Commons!). What is to gain from frightening him off so that he remains abroad?

  • 17.
  • At 02:29 PM on 18 Apr 2007,
  • Trish wrote:

Am I the only person concerned that Lord Laidlaws millions have been instrumental in the closing of a popular and improving Newcastle school to allow the opening a city acadamy in which the "overall specialism will be enterprise" I think we can all guess what the first lesson for those pupils will be.

No taxation without representation, not representation without taxation.

  • 19.
  • At 03:53 PM on 18 Apr 2007,
  • Gordon Thomas wrote:

He may be an exile but some people should consider what his impact has been before making ignorant statements. Fistrly he created a company and therefore jobs - quite a lot of thenm given the price of his company. Second, he donates an awful lot of time to charity - and money too, and he now wants a role in public life. fair enough. if only more people folloowed his career rather than sitting arong whingeing.

  • 20.
  • At 04:32 PM on 18 Apr 2007,
  • David wrote:

The issue here is the tax system. I agree with a couple fo the other posts in that the Treasury need to make it more attractive for people like this to contribute their knowledge and entrepreneurial skills to the UK business world. This problem also exists in Ireland where top/wealthy business men base themselves offshore. We need a system which is much fairer but doesn't penalise successful people.
How about if we started by recognising that the government has created the biggest employer in the UK by way of the civil service in order to move people from the dole and into work - most of our hard earned money which goes straight back in taxes goes to pay for a civil servant not services!!

  • 21.
  • At 05:36 PM on 18 Apr 2007,
  • Joseph wrote:

Please explain to me exactly what this article has to do with Business?.

This article could have been written by the Labour party, Could you balance this article by adding the names of some of the Labour peers who also live outside the country?.

  • 22.
  • At 07:17 PM on 18 Apr 2007,
  • billy wrote:

i really dont see the problem with this.
lords started out as robber barons and anyone who thinks things have changed is.. well..

but i'd rather have a guy in the lords helping on policy in business with knowledge of business than that idiot career politician (who's never had a real job) raffles brown.

  • 23.
  • At 07:55 AM on 19 Apr 2007,
  • Helen Smith wrote:

I challenge the BBC to be politically objective, just for once.

  • 24.
  • At 01:43 PM on 19 Apr 2007,
  • alan wayward wrote:

Tim Easton's comment - Think things through before you cast your net of envy so wide. Small minded comments like this are the reason why i left the UK. Politics of envy and little England!

  • 25.
  • At 12:51 PM on 20 Apr 2007,
  • Alastair Ross wrote:

So how come Irvine Laidlaw now is a Lord?

The Lords Appointments Commission made a condition which he has not fulfilled. Why was this not a condition precedent to becoming a Lord?

It's easy to see the risk from his point of view: become tax resident and discover that the promised Lordship fails to materialise. But what about the risk from our point of view: accord him a Lordship and he still fails to become tax resident.

Which of these risks is more embarrassing for the country, and to which should the Lords Appointment Commission have given priority.

Clearly not the same choice that I would have made.

I'm afraid it's getting harder to trust a gentleman to keep to his word. And such as do not seem to me not to be gentlemen and thus unworthy of a Lordship.

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