Cabinet Office Memorandum on Lord Ashcroft

8/9/2019 Cabinet Office Memorandum on Lord Ashcroft

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CABINET OFFICE

DISCUSSIONS WITH POLITICAL HONOURS SCRUTINY COMMITTEEFOLLOWING THE ANNOUNCEMENT OF LORD ASCHROFT'S PEERAGE ON31 MARCH 2000MEMORANDUM FOR THE PUBLIC ADMINISTRATION SELECT COMMITTEE

Introduction1. In his letter of 4 March to the Cabinet Secretary, the Committee Chairmanasked the Cabinet Office to supply any papers relating to the discussions withgovernment which took place subsequent to the announcement by No 10 on

31 March 2000 that Mr Michael Ashcroft was to be created a Life Peer. Thedepartment was also asked to supply a brief written statement describing thenature of the dialogue, and describing the identities of those directly involvedor otherwise consulted.2. This memorandum responds to the request. It describes the nature of thedialogue and includes copies of all the correspondence between the Secretary

of the Political Honours Scrutiny Committee and Sir Hayden Phillips, Clerk tothe Crown in Chancery (Annex A). A small amount of internalcorrespondence between the Secretary and Committee members is notincluded; the conclusions are fully reflected in the letters from the Secretary toSir Hayden Phillips.Lord Ashcroft's Statement3. Lord Ashcroft's statement of 1 March said that there was a dialogue with theGovernment subsequent to the memorandum he gave to MrWilliam Hague on23 March 2000. Lord Ashcroft stated:

"In subsequent dialogue with the Government, it.was officially confirmedthat the interpretation in the first undertaking ['a clear and unequivocalassurance that I have decided to take up permanent residence in the UKagain before the end of the calendar year'] of the words 'permanentresidence' was to be that of 'a long term resident' of the UK".Nature of the Dialogue4. The essence of the dialogue was a series of discussions and exchangesduring May, June and July 2000 aimed at satisfying the Political Honours

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Scrutiny Committee that the assurances given by Mr Ashcroft at the time ofhis announcement as Working Peer on 31 March were being put into practice.Those Involved5. Those principally involved were:

The members of the Political Honours Scrutiny Committee (PHSC): Lord Thomson of Monifieth, (Chair), appointed to PHSC October 1992(now d e c e ~ s e d ) Baroness Dean of Thornton-Le-Fylde, appointed February1998 Lord Hurd ofWestwell, appointed April 1999The Secretariat of the Committee was provided by the Ceremonial Officer ofthe Cabinet Office: Sir Anthony Merifield until June 2000, subsequently GayCatto. A background note on the PHSC is at Annex B.Sir Hayden Phill ips, Clerk to the Crown in Chancery was responsible for theCrown Office. In turn, this is responsible for arranging the issue of LettersPatent to an individual appointed to the House of Lords. The Queen issuesLetters Patent on the advice of Ministers, acting under her Royal Prerogative.(Letters Patent, issued by'the office of the Clerk of the Crown, are the meansby which a Peerage is formally conferred. The new Peer is enabled to takehis seat in the House of Lords by virtue of a Writ of Summons, the issue ofwhich follows immediately after the issue of the Letters Patent and thedocuments invariable bear the same date.)Rt Hon James Arbuthnot MP, then Opposition Chief Whip, who was actingas an interlocutor with the then Mr Ashcroft.

Cabinet Office17 March 2010

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Annex APapers Recording the Discussions with Political Honours ScrutinyCommitteeAs requested, the Cabinet Office is making available to the Committee therelevant documents.

Document A: Letter of 12 April 2000 from Sir Anthony Merifield, Secretary ofthe Political Honours Scrutiny Committee to Sir Hayden Phillips, Clerk to theCrown in Chancery.Document B: Letter of 23 March 2000 from the Prime Minster to the thenLeader of the Conservative PartyDocument C: Letter of 23 March 2000 from the then Leader of theConservative Party to the Prime MinisterDocument 0: Letter of 27 March 2000 from the PHSC to the Prime MinisterDocument E: Press notice issued on 31 March 2000Document F: Letter of 9 May 2000 from Sir Anthony Merifield, Secretary ofthe Political Honours Scrutiny Committee to Sir Hayden Phillips,Document G: Letter of 13 June 2000 and attachment from Sir Hayden Phillipsto Gay Catto, Secretary of the Political Honours Scrutiny Committee.Document H: Letter of 22 June 2000 from Gay Catto to Sir Hayden Phillips.Document I: Letter of 29 June 2000 from Sir Hayden Phillips to Gay Catto,(with attachments J-L below):Document J: Letter of 22 March 2000 from Lord Thomson to the PrimeMinisterDocument K: Letter of 28 March 2000 from the Honours Secretary, No 10 toTina Stowell in the then Leader of the Opposition's OfficeDocument L: Letter of 23 May 1999 from the then Leader of the Opposition(Mr Hague) to the Prime MinisterDocument M: Letter of 2 March 2000 from then Leader of the Opposition toLord Thomson attaching letter of 29 February 2000 from Allen and Overy,Solicitors, to James ArbuthnotDocument N: Letter of 12 July 2000 from Gay Catto to Sir Hayden Phillips.Document 0: Letter of 12 July 2000 from Sir Hayden Phillips to Mr Arbuthnot.

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Document P: Letter of 12 July 2000 from Mr Arbuthnot to Sir Hayden Phillips.Document Q: Letter of 13 July 2000 from Sir Hayden Phillips to Gay Catto.

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Annex BPolitical Honours Scrutiny Committee,The Political Honours Scrutiny Committee was a committee of the Privy Council,whose members were all Privy Councillors, instituted in 1923, in accordance withthe recommendations of the Royal Commission on Honours, under an Order ofthe Privy Council. The Committee was required to "make such enquiry as itthought fit about those whom the Prime Minister proposed to recommend for anhonour on account of political services, including political peerages, and reportwhether they were fit and proper persons to be recommended". The Committeedid not initiate recommendations or select them. The duty was that of scrutiny.Members were appointed by the Prime Minister.The Committee's functions were taken over by the House of Lords AppointmentsCommission in 2005.

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PERSONAL ANDHEHTHICTED . HONOlIHS

SII HHyrkli Phdlips KCBLord ( ' lwlledlor 's !)cpClIIIlH'1l1HO\lSI ' of Lorch,London SW 1A OPW

J1 April .WOO

We spuke about tile J ~ S I W of Leiters Patent to Mr Michael AshcroftJ. In confldence I am sending to you copies of lellcrs from I he PH Heabout their dcnsion:

a thilt of 22 March (A) was sent by the Prime Minister tu 'h eLeader o f the Conservative Party, from whom a l ette r was received on23 Marcil 2000 (BI covering the affidavit signed by Mr Ashcroft on23 March 2000;b. In the light of that , the Committee responded to th e PnnwMin is ln on 27 March 2000 (extract enclosed at C). No 10 published r lNote to l


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RESTRICTED, HONOURS

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( '.

TIlE PRIME MINISTER

10 DOWNING STREETLONDON SWlA 2M

23 March 2000

I am writing to let you know that the Political Honours ScrutinyCommittee (PHSC) have completed their enquiries on your recommendations forworking life peerages submitted with your letter of 2 March.

The Committee were unable to approve the recommendation for MrMichael Ashcroft for the forthcoming list of peerages. Enclosed is a copy of aletter from Lord Thomson recording the Committee's concerns. I would behappy to pass on your response to them.

The list of working peers will be published on Friday 31 March. I will bewriting shortly to Sebastian Coe, Robin Hodgson and Dame Sheila Masters toinform them of their life peerages. My office will be in touch with yours toconfinn the details.

AJVvt

he Right Honourable William Hague MP

PERSONAL - HONOURS IN CONFIDENCE


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To

FromDate'

Memorandum1tIe Rt Ho'! William t laglJf' MPLeader of the OPP0'lli()r"

23 March 20UO

fu rther tv our telephone conversation I am wrltmg 10 you 10 confirm ttle aS5U1anceswhich f have g iven you In relalion to the matters wll lc t) you raised Wltt l mE" and l InOnwhICh you soughl my woMen and uneqlJlvocat undertakIngs

I herelJy give you my clear and unequivocal assurance that I have decided to take uppermanent residence in the UK again before the end of this calendar year I have givenmy advisers Instructions to make arrangement (0 give eFfect to this decIsion and I willinstruct them forthwith to do so WlttH() this cale",dar year

I hereby firmly agree tnat I will not seek to be Introduced to the House of l.ords untilhave taken up residency In the United Kingdom within the "mescale above mentioned

I will also Immediately resign as the Belize representatIve to the United Nations thatreSignation to take effect before 31 ~ March this year

These ~ r my solemn and binding unoertakrngs to you

//1 A t?~

. ~ ... 1'.\-.)"J ... 4 . ' ~ : , ~ . . '

Slgr'lature Witnessed by


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DlIousn OF /,ORIJS'LOlldo" SU'/ A ()PJfI

The Prime Ministci10 IJowning StreetLondonSWl

27 March 2000

Dear P,ime Minister,

WORKING PEERS UST: SPRING 2000

We have now considered the letter of 23 Man:h 2000, from the LeadeJ o f theConservative Party, enclosing an affidavit from Mr Ashcroft.The Committee's 22 March letter rehearsed some of the points whichinformed the Committee's views last June. This time, our primaryreservations in respect to Mr Ashcroft (a s indeed to one other candidate also)were that, though proposed as a Working Peer. he would be unable to fulfilthat function until he became a permanent resident of Lhe UK - and so, inhis case also, a UK tax payer. It seemed to us that without suchassurances, the appointment of anyone, and of Mr Ashcroft in particular, toa seat in Parliament would give rise to highly critical and damagingpublicity.Mr Ashcroft's affidavit, endorsed by Mr Hague in his letter, meet ourrequirements. Provided, therefore, that the assurances are put in the publicdomain, we would not consider Mr Asht;wfL unsuitable to be recommendedin terms of our remi t..We would hope that t h Press Notice announcing the Working PeersAppointments could include a note on the following lines:

"In order to meet the requirements for a Working Peer,Mr Ashcroft has given his clear and unequivocal assurance thathe will take up permanent res idence in the UK again before theend of this calendar year. He would be introduced into th e Houseof Lords only after taking up that residence. These undertakingshave been endorsed by the Leader of the Conservative Party andconveyed to the Prime Minister - and to the Political HonoursScrutiny Committee I'l


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RESTRICTED .- HONOURS

We have been concerned by statements in the Press about certaincandidates who are within the Working Peers List. The Times of2 March reported offers of a Peerage to five former Labour PartyHereditary Peers and mention has been made also of a possible offer ofa Peerage to Mr Ashcroft and Mr Coe. The most recent comments,about Mr Ashcroft, were printed on Friday last week and areparticularly unwelcome. The careful and confidential handling of earlysounding, nomination, and scrutiny cannot be emphasised too much.We believe it would be right to hold an enquiry into any breaches ofconfidentiality which may have occurred.

Yours sincerely,

~ , THOMSONOF MONIFlBTH(On behalf of the Committee)

Drqf t approwd by the Committee and Blgned,in Lord Thomson's absence, with hu authorl.ty

.,,


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q May ' )000

I am wdling, following a meeting of Ihe Pol it ic al HOJ lours ScrulinyComl1lillCC, to provide some addit ional information ab out the appoinlllH'lltof M, Michael Ashcroft to a Working Peerage,The Committee , 'ccognises that, following the public announcernent U l lJ 1 March, Ihe implementation of t he award , with th e conditions attached 10it, pass{'s to the Crown Office, acting on advic e from the Horne Office whowill have outained Royal Approval to the issue of Letters Palenl TheCornrnlllee have noted that these convey a right to a place in the Ilollse ofLorch;, and that practice in respect of those appoin ted as W o r ' k i n ~ Peen;recngllisf>S that the Leiters Patent be issued when the individual is ready to~ ( Hhead and take his 01 her seat We understand that except for caseswlwn' illness, or H Parliamentar'Y ,cccss, have intervened. there ll'> no recentprecedent for splitting th e is su e of Leiters Patent. and the il'>SllC of a Wril ofSummons Hnd tIl(' arrAngements for th e Peer to he in troduce d illlo th elIouse Inde{>d, we understood that once Lellers Palent have heen i ssuf 'oth e individual cOSH'crncd has a constitutional right, and duty, 10 l a k ( ~ hispltH'c in Ihe House of Lords withollt undue delayIII order to provide assuramT auout his ability 10 fulfil Ih e dutws of i tWorking Peer Oil behalf of his Party I (in March he was still resident O\'(TSei l l - ;and limited to ()O days pC?r year residence in the UK!. Mr Mich,wl Ashnof'rUlllished us willi an undertaking that he htHI " t I ( , ( )(kd \0 takc' \ IPpermanl ' l I ! n'SI


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MICHAEL ASIICnOFT

I p r v p o s ~ [0 send the enclosed draft leUer to James Arbutlmot MP. the Opposition Chief Whip,who has HCll'd as lin intcnncdiary with Michacl Ashcroft, to confirm our joint understandingof MrAshcwfi's positiol! jn relation to his lI11dcl1nking to the Leader orthe Opposition ill connecllon withhb Pl'CllIgl'

()Il thl' basis of that joiut understanding, J believe J t:annot reasonably withhold my permission1(11 the jllllcedurc leading to Ashcll.lfl'S Introduction to tile House gOiltg ahead, I would be grateful,ho\\'c\'l:I. it yOIl "til/it.! I:onfirm Ihal Ihis is ill line Wllh the expectations of the PHSC, urgently(';(illslIlling t!le m ~ l I I b e r s


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JUIH' 2000The Right HonourableJames Arbuthnot Esq MPOpposition ChiefWhirHouse ofCommonsLONDONSWIA OAA

MICIIAEL ASHCROFT( am writing, as we agreed, to confinn our understanding of Michael Ashcroft's position inrelation to the undertaking he gave to the Leader of the Opposition in conneclion with his Peerage,You explained that Mr Ashcroft would complete Inland Revenue Form 1'86 (Arrival in theUK) giving as his reasons for taking up residence in the l IK, the fact that he was to take lip a seat inthe House of Lords and thai his contract for services to the various companies with which he isinvolved would be based in the UK His income under those contracts would, therefore, be sourcedin the UK and subject to UK tax. Mr Ashcroft does not believe that his domicile [or tax purposes isrelevant to the question of his Peerage, having undertaken to be resident in the UK. Paragraph 3. Iof the Inland Revenue's guidance "Coming to the UK" states that a person is treated as resident andordinarily resident if he intends to come to lhe UK to live here permanently. Mr Ashcroft has said(halhe will live in the UK indefinitely and will, therefore, be a long-term resident here.I should be grateful if you could write to confinn that you agree with my understanding of theposition and that the Leader of the Opposition is satisfied that the action adequately meets the terms

of his undertaking to take up pennanent residence in the UK, If so, I shall invite Mr Ashcrof t todiscuss his title with Garter King of Arms and I will set in motion the process for Letters (latent andIntroduction on a date to be agreed between him and the Crown Office

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I.ONI JON SWIA OI'W

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SI/ Ilayden Phillips }{C!I

Gay CattoCeremonial Office!Ashley Housa2 Monck StreetLONDONSW1P 2BO

MICHAEL ASHCROFT

2..\'fV-.,June 2000

Thank you for your latter of 22 June. I have sought from the Opposit ion Chief Whip the furtherclanficatlon you sought.He has provided me with coplf3s of two letters (which I enclose), one from Richard Roscoe toTina Stowell and one from Lord Thomson of Monifieth to the Prime Minister. These letters showthai Mr Ashcroft was asked to give an undertaking to take up IJ8rmanent residence In the UK. Inorder to be available in the UK to exercise lhe responsIbilities of a Working Peer TheCommittee's view was that availability to sit in the House of Lords was the central ls8ue and theundertaking Mr Ashcrof t was asked to give was intended to sat isfy the Committee that he would

be available. As someone who Is resident and ordinarily resident for tax purposes, Mr Ashcroft willbe able to sit regularly in the House and to e)(ercisc lhe responsibilities of a Working Peer. It Is onthai basis that Mr Arbuthnot does not believe that the quesUon of domicile Is or can be relevant tothe fulfilment of the undertaking.In any event, my own understanding from independent enquiries to the Inland Revenue Is thatthe Form DOM1 (Domici le) need not be completed unt il the tax return Is submitted which for thecurrent tax year could be as late as January 2002 While some people choose to submit OOM1 onarrival or shortly afterwards. thEJ Inland Revehue would not require someone, who had not chosento complete the form, to do so prior to the completion of their tax return at the end o f the talC year.Mr Arbulhnot also pointed oul to me that other Working Peers, including. he said, Lord Paul,are resident but non-domiciled fa! tax purposes and seem to be adequately fUlfilling their

responsibil it ies. He is concerned about the appearance of inequity i n the treatment of Mr Ashcroftin comparison with other non-domiciled Working PeersIn my view, what Mr Ashcroft proposes would appear \0 be sufficient to meet the undertaking

~ l has given On lh e information available to me, I do not think I can reasonably continue towithhold permission for the issue of Leiters Patent. but it IS clearly Important for all concerned that Ido not take the formal action for which I am responsible if the Committee feels I have missed arelevant point in the agreements which were rcached I should, therefore, be grateful for their!eadlOn and 1am. 01 course. ready 10 meet them 10 discuss the POSition if that would be helpful


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/lOUSE OF LORl)l\'London S'VIA ()PJf!

Tlie Prime Minister10 Downing StreetLOlloon SW 1

22 March 2000

Dear p.,ime Ministff!r,

WORK1NG PEERS UST: SPRING 2000

When we I-epol-ted the outcome of our meeting on 16 March, I said I wouldbe wl-iting separately to you about Mr Michael Ashcroft.Last time we had a number of concerns about Mr .Ashcroft - possibleadverse publicity linking the s inking of the Belize Registered Rema with hisshared ownership of the Belize Shipping Registerj his pennanent residenceoverseas; and the fact that Mr Ashcroft held a Belize diplomatic post at theUnited Nations. There were d iscrepancies a lso between the donationsreported and those being canvassed in the Press - Mr Arbuthnot's currentCertificate now clarifies for us both personal and company donations (whichwere recent and substantial).The Rema sinking may continue to provoke comment (as it did in the Lloyd'sRegister on 18 February) , but we must recognise that a recent report by theMarine Accident Investigation Branch was unable to identify the cause of it ssinking or link it to the Belize Register. (Although the inspectors noted thatit was an old ship , detained twice in port State control inspections and wasflagged to a State with a poor detention record. F'urthermore they repor tedthat the ship was undermanned and there were que stions about thequalifications and experience of the crew. Exceptionally the Chief Inspectorof Marine Accidents had added to the Report cerlain recommendations toassist Belize improve its safety record.)More specifically, therefore, we considered the issue of residence, as thisseems centraJ to the exercise of responsibilities as a Working Peer. In his23 May letter to you last year, Mr Hague said "He (Mr Ashcroft) is, however,committed to becoming resident by the next financial year lie by April 20001in order properly to fulfil his responsibil i ties in the House of Lords". It isunlikely that commitment will be realised and a letter (enclosedl fromMr Ashcroft's lawyers, Allen and Overy, which was sent to \18 recently,


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l l lHkcs It d e d i thaI there an ' Illf i l ly ~ ' : I g l l i f l u l l l t i S f l \ l C S 10 1Jt' Hddl('S:-;cd b ( ~ f ( ) r trill inkllliol\ to rel\lln to lIve ill Brilain CHII Ill' put inlo effectWe understand th e likely constraints, hut for that very reason believe Ihat itwould he important to have a clearer assurance of residence before advising,on Mr AshclOft's appointment as a Working Peer in this parliculal List.eiven Mr Hague's May 1999 le tter, Hnd the timescale for exercising theduties of a Working Peer appointed in a Spring List, we hope you will agreeto invite Mr Hague to Jet us have firm evidence of an unequivocal decision byMr Ashcroft that he will have taken up residence in the UK, on a permanentbasis, before the end of this calendar year.

. Even with an assurance about such a decision, (which we hope would beput into the public domain). we would propose also th at the ConseIvat iveLeader- should reach an agreement with Mr Ashcroft that he should no t beintroduced into the House of Lords until he has act ua lly taken up thatresidence in the UK in the timescale we have mentioned.If it can be given, an a ssurance about such an irrevocable decision, carryingwilh it messages about availability and status as a UK tax payer, and a dearunderstanding from the Party Leader about the date of Mr Ashcroft'sintroduction to the House, would go a long way to avoid what mightotherwise be h ighly critical and damaging publicity.Finally, we understand from a letter sent to us by Mr Hague, tha tMr Ashcroft is ready to resign his appointment as the Belize representativeat the Uni ted Nat ions once he is able to attend regularly as a Working Peer,We believe that should be done before any publication of a Peerage.We hope tha t it will be possible fo r you to convey t he se point s to Mr Hagueand invite his response. If you wished to use this letter fo r that purpose, wewould be happy fo r a copy to be sent , exceptionally, to Mr Hague. But wewould expect his response to be sent directly to you.

Yours sincerely,

jr THOMSON OF MONIFIETH(On behalf0/ the Committee)Draft approved by the Committee and signed,in Lord Thomson's absence, with his authority

Rf


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IN ( O ~ T l f ) E N C F . HONOURS

I t10 DOWNING STREETLONDON S \ l t l ~ 2M28 Marcb 2000

y, .. -(;...l dIll WI iling lO confirm lhe outcome of the Politk:ll Hooours ScrutlDYCOOlmittee' s ( ' o l l 5 i t 1 ~ r a t i o D of Mr Michael Achcroft. ITbe Committe!! !las agreed that Mr Ashcroft" s affidavit, eodorsed by MrHague metl theIr requiremerlls. Provided that these usurances are placed In mep',lbllc domain there ""ould be DO objections to Mr Ashcrof\ btin' rccoaunended,

T b . ~ Pume MUlisler bas, therefore, put in hand the oecessary aftqcments forMr Asbcron (0 beinchu1.ed in the list of workina life peers to be ' , ~ e d onFnday 3 t March \,

We propose that the press notice lI1JlouDcing the Working Peers Ust wiU1Dclude the follOWing note: l,10 order to meet the tcquiJemenlS tor aWorking Peer. Mr Ashcroft has

givcll his clelt


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, I -J.' j r 1i1 ' 'I , --, r 1\1, I: , II I......... -. - .HOUSE OF COMMONS

LONDON SW1A OM

L

WH/ta23 May 1999

Th.ank you for your letter about my recommendations for working l ikpeerages.I am ltlost concerned about the: C ~ t t e e t s report to you on MichaelAshcroft A tb suaaCltionoflor-.. Powe11, my Chief Whip spoketo Douglas H\U'd to pltJUC w* tqjpt be behind such a report, anddiscovered that the issues W 88 foUows;

1. The COmmittoc UDC1erstood that Mr Ashcroft was the owner andchief executive officer of the Belize Shipping Registry. TheBelizean trawler 'R#ma' went clown in tho North sea last year.with tbe lou of fourBtlu.h lives. The state of the ship in termso f ~ , and tile nature of required bythe seu.an ~ to be tIz subjed8 .of a report tocome Ollt in N()VIm)ber, and were likely to bescandalous. For dQ$ t--.o now was not the proper time tomake a working peer'"of someone who, though not pcmIODI1lyinvolved in the state of the ship, was closely connected with it.. .

2. Mt Ashcroft was a tax exile. It was incompatible for someonewho chose to be Ollt of the coun1rY for the mavority of the yearto be a working peer, a position that required presence inWemninster.

3. Mr Ashcroft had recently become the Belizean ambassador tothe United Nations, which was incompatible with being aBritish working peer.


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lu

4. The Committee bad read reports that suggested he hadunderwritten the finances of the Conservative Party.

It seems that the cumulative effect of these issues was such as topersuade the Committee that it should report to you that Mr Ashcroftwasnot a "fit and proper person" to be recommendod. The decision as torecommendation is, of c o not theirs but yours, and the pwpose ofthis letter is therefore to express to you my concern at the Committee's~ ; .... ~ ~ d J l r i t t t h i t repOrt . bld dttemUn stillt o ~ d W I i : ~ , * ; i ~ f 6 l ~ ~ [ . . . .. ... J you s. ou eI shall deal with ~ ofthe issues in tum..

1. Mt ~ b ~ f ; \ i s ~ o t the Chief ~ v Officer of the BelizeanS J j P P ~ . ; ~ e ~ H e i $ t b o ~ r m a n . 4 Chief B x e c u t i ~om_ 6 ~ owner. of8JJt a pUblic company whoseprib6iP81 actiVities_ C 0 1 b P l ~ 1M'" to the ShippingR,egi$ter. Bm:OWQS (as a sruu ~ 50% of thecontpltny tblt .......P1 the on bebalf of b BelizeanGovernment; but other SO%is owned by a &roUP of laWyerswho IDJIko up the active oftbe CODJPIUlY. Co!i1iaryto SUQCSfiODS msadem SOIII8 . . . . . ~ M Aahaoft bas nodirect i n v o N ~ iD. the ; m a Q I . ~ of the ResistrY and hispersonal link witb. tile loss of _ Rana and the leport to beproduced in N ( . i n c i ~ , the request of BelizeaDd tbt ~ i D I ~ is a diStaDt ODe. The SundayExpre$SdClbtly an apolOiY to him for suggestingthat his in..- in theR.egister showed he W8I iporiIig thesafety of those who SIfted in Belizean registered ships.

2. I am advised thai tJJe terms of reference of the Committee donot include a judgement of wbelber Mr Ashcroft would belikely, ifmade a workin& peer, to attend (although for reasons Ishall set out I believe he would). The Committee "will have noduties either of initiation or selection, nor will they be asked toadjudicate on the nature of the honour submitted. Theirfunctions will be one of scrutiny and scrutiny only . to report i fthe past history or general character of a person rendered him


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unsuitable to be recommended". Mr Ashcroft is indeed non ..resident for tax pwposes and bas been for some years, duringwhich time his principal business interests have been abroad.He is, however, committed to becoming resident by the nextfinancial year in order properly to fulfil bis responsibilities inthe House of Lords. This decision will cost him (and benefitthe Treasury) tens ofmillions a year in tax yet he considers itworthwhile.

3. f i j ~ ~ t i Q l l as a B e l ~ a m ~ o r i$ s o ~ g that hewould bring to a halt if it were felt that it was incompatiblewith bej:ng aworking peer. He is a dual national, and Belize isa 1 I l O I 1 1 ~ of the Conunonwealth; so this seems an odd reasonto dct1yhitn a peerage.

4. ~ U e e a,pears to accept tba.t it is perfectly proper for a~ . p e a - t o 'b$.Ve__ su1$t8b1ial and regular donations toa .po__ , pnm.d.ed .tl*e is no queation of thosedOQ81iC)JJ$ bo.kJg Uladc in . for the recommendation of apeerase. My ChiefWhip has aheady certified that no suchquestion ari..- in this caBo. In any event,MrAshaoft does notunderwrite the Conservative Party. He is agenerou.s supportelbut in no ditlerent a way from tho$e many Labour peers(including Lords Sainsbury, Hamlyn, Levy, PuttDam andBragg) who generously support the Labour Party. Perhapsmore to the point, he is also an exceptionally generoussupporter of charitf in 't!lis C9U11try. His work for(which befoundod) continues to be of. ., 4acknowledpd value to the police and to good order and hasbeen ~ b l c for sometbU1s like 26,000 arrests. He was theanonymous businessman who recently offered a 50,000reward for information leading to the arrest and conviction ofJill Dando's killer. It would be quite wrong to assert that hissupport for any political party should somehow diminish theimportance and value of what he bas already done for thecountry.


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All of this arises in a climate of secrecy that will create the falseimpression that there is lurking in his past something giving setiouscause to doubt his integrity. Yet it also seems to me likely that there willbe leaks to the press of the fact that he has been the subject of anunfavourable report by the Committee. All of this is utterly unfair tohim.A very in:tportantissue ofprinciple now arises. Mr Ashcroft IlU1S the riskof being denied a peerage for reasons which are either wrong,insubstantial 01' a matter of choice and swift alteration, .yet this isin a way which allows no opportunity to answer theallegations made against him. Surely in cases where the Committee feelsthere is some question about whether a per$OD is fit and proper to berecommended for an honour, the party leader reconmtending tbat honourshould be given the opportunity to answer points made against hisrecommendation. But I have not been given tbat opportunity.If therefore despite the points made in this letter you still feel uuab1e torecommend his name for a workinIlife peerage, or to arrange for thesepoints to be put urgently to the Conunittee, I would ask for an urgentmeeting with you to dilCUSS the matter fUrther.

rJutCeIeh-{1o J ~ ~The Rt Han Tony BlairMP10 Downing StreetLondon SWIA 2AA

I I '. I.;.


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------------------------- -- - - - - - - - - - -- - - - - - - - - - -- - - - - - -_ ._- --, - - , ) , IL.\ \... \ c:-n

HOUSE OF COMMONSLONDON SWIA OAA

LEADER OF THE OPPOSITION 2 WHitsMarch 2000I am taking the somewhat unusual step of writing a letter to coincide with mynominations for life peerages. I am doing so because one of my nominations,namelyMr Michael Ashcroft, was considered by the Committee last summer onmy nomination and did not go forward. I was given to understand that therewere a number of concerns held by the Committee at that time which led themto the view that they could not recommend that this name went forward. - - I believe that the causes of these concerns have now been met, and I felt that itmight be helpful if I were to explain why in these circumstances I havenominatedMr Ashcroft once again.- There was concern about Mr Ashcroft's involvement with the Belize ShippingRegistry IMMARBE -and in particular with the sinking of the mv Rema on 25 thApril 1998. As you will be aware Mr Ashcroft severed all his connections withthe Register in July 1999 and the official investigation into the sinking of theRema has found no cause which can be attributed to the failings of the Registeror to any actions or omissions on the part ofMr Ashcroft. I hope therefore thatthis concern has been fully met.In an unpleasant media campaign aimed at Mr Ashcroft over the summer andautunm a number of other allegations were made. None has been substantiatedand suggestions of inferences to be drawn therefrom by the Times newspaperwere in tum withdrawn publicly in December as part of the settlement betweenMr Ashcroft and that newspaper of the libel action which he had taken againstthem.


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-2-

Concern was also, I understand, expressed by the Committee in the summer ontwo other aspects relating to Mr Ashcroft.Firstly his non-residence in the UK was felt to be relevant. Mr Ashcroft hassince publicly undertaken to resume residency in the UK. Given the complexnature of his business and financial affairs this cannot be achieved immediatelybut his lawyers have been instructed to resettle his affairs so as to achieve hisresidency in a well ordered manner. A letter from his solicitors Allen & Overyto James Arbuthnot is attached which makes clear the way in which MrAshcroft is taking the necessary action to fulfil his undertaking to resumeresidency. I have no doubt that this reflects his clear intention.Secondly his current position as Belize ambassador to the UN caused concern.Mr Ashcroft has undertaken to me that he will give this up if he is ennobled toavoid any potential conflict of interest. Once again I am in no doubt that thisreflects his clear intention.Finally I am putting his name forward once again because I value his abilitiesand wish to make political use of them as a working peer within the House ofLords to which, I believe, he would bring new strengths.I am sure that you will appreciate that, in the light of what has gone before, Iwould not be renominating Mr Ashcroft if I had any doubts as to his suitabilityand was not anxious to make use of him on the Conservative benches in theHouse ofLords.

I

The Rt HOD William Hague MP

The Rt Hon The Lord Thomson ofMonifiethChainnanPolitical Honours Scrutiny Committee


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~ ......EN & OVERY

Our Ref: CO:71139S.1

BYIIANDSTRICfLY PRIVATE & CONFIDENTIAL.Rl. Hon. James Arbuthnot MPC b i ~ f W h i p . Conservative PartyHouse ofCommonsLondon SWI

Dear Sir,Michael A. Ashcroft

One New ChangeLondon EC4M 9QQ

29th February, 2000

Mr. Ashc;roft, who is a long-estabtished client of this f'lrm, has asked us to write to you regarding thestatus or his reorpnisation ofbis personal and business affilirs.S h after the settlement in December 1999 ofhis libel action against 'l'M Times (on wbiob we did notaeMIie him" owing to a conflict of interest),Mr. Ashcroft consulted Ulan his affairs, baving regard to hisintention to return to l ive in Britain. somethiDg to wbich be bad publicly coounittcd himself.ActOfdingly, since that time we bave been advising Mr. A.shcroft on various relevant questions, inc:ol\iunGtion with hi s other professional advisen, including a leading rum of accountants in London whomhe bas engaged for the pwpose. He has instruoted us to advise him on the methods and implications ofreorganising bis affairs in an appropriate mannc:l'. prior to his returning to live in Britain, so thal he canfulfil his commitment.Given thatMr. Asb'%oft ha$ lived abroad for many years and bas substantial business and othc:l' interestsabroad, as well as in the United Kingdom, there are many significant issues to be addressed, some ofwhich an: complex in nature. In relation to bi s becoming resident il l Britain. several possible courses ofaction are UDder consideratioD and each will have to be assessed according to its implications for him, hisfamily and associated trusts and b u s i n ~ s s e s ; in some instances, it will also be necessary to obtain advice inother jurisdictions.Yours faithfully.

Copy: Michael A. Ashcroft

A lis' o l l l t ~ 1I/UrtCJ 01 p t u f 1 l ~ n utd ' I t ~ l r p'0/uno,,J f(IIa/ifictltiqflS is I I P ~ " '0 ItuptdiOIl lit ,Itt llbavr flfJiet..nit ptut" tn IIU t 'illtn soliciton Dr npttnt i /or t igPl IlIW)'u1


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< : F 1 U ~ M ( ) N J A L BJ,AN


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oIloUSI:: OF L O I ~ \ ) S ,LONDON SWI A OPW

I'clllWnen( Secretary and(:It lk of tlie Crown ill Chancery

SII Hayden Phillips KCn

..,...."...' '- July 2000

The Right HonourableJames Arbuthnot Esq MPOpppsition Chief WhipHouse of CommonsLONDONSW1AOM

1 ~ r J ~ ~ MICHAEL ASHCROFT

I am writing, as we agreed, to confirm our understanding of Michael Ashcroft 's position inrelation to the undertaking he gave to the Leader of the Opposition In connection with his Peerage.You explained that Mr Ashcroft would complete Inland Revenue Form P86 (Arrival in the UK)giving as his reasons for taking up residence in the UK, the fact that he was to take up a seat inthe House of Lords and that his contract for services to the various companies with which he Isinvolved would be based In the UK. His income under those contracts would, therefore, besourced in the UK and sUbject to UK tax. Paragraph 3.1 of the Inland Revenue's guidance"Coming to the UK" states that a person is treated as resIdent and ordinarily resident If he Intendsto come to the UK to live here permanently. Mr Ashcroft has said that he will live in the UKindefinitely and will, therefore, be a long-term resident here.I should be grateful if you could write to confirm that you agree with my understanding of theposition and that the Leader of the Opposition is satisfied that the action adequately meets theterms of his undertaking to take up permanent residence In the UK. If so, I shall set In motion theprocess for Letters Patent and Introduction on a date to be agreed between him and the CrownOffice,

'jvv-.v> .,..::. >AU>. '"jI\-- ~ '3--- .


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(.:Jay CdtluCeremollial ( ) f f f n ~ rAshley /louse;; Mond, S l r ( ' ( ~ 1I O I ~ D O NSW1P ;J!iU

MICHAEL ASHCROFT

1\-'V.b Jill)' :,JQOO

I arn wrlling 10 lei you know that I wfote to Ihe Opposition Chief Whip yesterday (copyenclosed) and received the enclosed reply. As you will see, the way is now clear to proceed to theissue of Letters Palent and Introduction lo the House I have instructed the Head of Ihe CrownOffice, 10 lake the necessary steps

I am copying tIlls lel ler and Ils enclosures 10 Hfcllard Wilson and William Chapman

Documents

Cabinet Office Memorandum on Lord Ashcroft