Written evidence from the Cabinet Office
DISCUSSIONS WITH POLITICAL HONOURS SCRUTINY
COMMITTEE FOLLOWING THE ANNOUNCEMENT OF LORD ASHCROFT'S PEERAGE
ON 31 MARCH 2000
INTRODUCTION
1. In his letter of 4 March to the Cabinet
Secretary, the Committee Chairman asked the Cabinet Office to
supply any papers relating to the discussion with government 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. The
department was also asked to supply a brief written statement
describing the nature of the dialogue, and describing the identities
of those directly involved or otherwise consulted.
2. This memorandum responds to the request.
It describes the nature of the dialogue and includes copies of
all the correspondence between the Secretary of the Political
Honours Scrutiny Committee and Sir Hayden Phillips, Clerk to the
Crown in Chancery (Annex A). A small amount of internal correspondence
between the Secretary and Committee members is not included; the
conclusions are fully reflected in the letters from the Secretary
to Sir Hayden Phillips.
LORD ASHCROFT'S
STATEMENT
3. Lord Ashcroft's statement of 1 March
said that there was a dialogue with the Government subsequent
to the memorandum he gave to Mr William Hague on 23 March 2000.
Lord Ashcroft stated:
"In subsequent dialogue with the Government,
it. was officially confirmed that the interpretation in the first
undertaking [`a clear and unequivocal assurance that I have decided
to take up permanent residence in the UK again before the end
of the calendar year'] of the words `permanent residence' was
to be that of `a long term resident' of the UK".
NATURE OF
THE DIALOGUE
4. The essence of the dialogue was a series
of discussions and exchanges during May, June and July 2000 aimed
at satisfying the Political Honours Scrutiny Committee that the
assurances given by Mr Ashcroft at the time of his announcement
as Working Peer on 31 March were being put into practice.
THOSE INVOLVED
5. Those principally involved were:
The members of the Political Honours Scrutiny
Committee (PHSC):
— Lord Thomson of Monifieth, (Chair), appointed
to PHSC October 1992.
— Baroness Dean of Thornton-Le-Fylde, appointed
February 1998.
— Lord Hurd of Westwell, appointed April
1999.
The Secretariat of the Committee was provided
by the Ceremonial Officer of the Cabinet Office: Sir Anthony
Merifield until June 2000, subsequently Gay Catto. A background
note on the PHSC is at Annex B.
Sir Hayden Phillips
Clerk to the Crown in Chancery was responsible
for the Crown Office. In turn, this is responsible for arranging
the issue of Letters Patent to an individual appointed to the
House of Lords. The Queen issues Letters 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 means
by which a Peerage is formally conferred. The new Peer is enabled
to take his seat in the House of Lords by virtue of a Writ of
Summons, the issue of which follows immediately after the issue
of the Letters Patent and the documents invariable bear the same
date.)
Rt Hon James Arbuthnot MP
Then Opposition Chief Whip, who was acting as
an interlocutor with the then Mr Ashcroft.
17 March 2010
Annex A
PAPERS RECORDING THE DISCUSSIONS WITH POLITICAL
HONOURS SCRUTINY COMMITTEE
As requested, the Cabinet Office is making available
to the Committee the relevant documents.
Document A: Letter of 12 April 2000 from
Sir Anthony Merifield, Secretary of the Political Honours Scrutiny
Committee to Sir Hayden Phillips, Clerk to the Crown in Chancery.
Document B: Letter of 23 March 2000 from
the Prime Minster to the then Leader of the Conservative Party.
Document C: Letter of 23 March 2000 from
the then Leader of the Conservative Party to the Prime Minister.
Document D: Letter of 27 March 2000 from
the PHSC to the Prime Minister.
Document E: Press notice issued on 31 March
2000.
Document F: Letter of 9 May 2000 from
Sir Anthony Merifield, Secretary of the Political Honours Scrutiny
Committee to Sir Hayden Phillips.
Document G: Letter of 13 June 2000 and
attachment from Sir Hayden Phillips to 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 Prime Minister.
Document K: Letter of 28 March 2000 from
the Honours Secretary, No 10 to Tina Stowell in the then Leader
of the Opposition's Office.
Document L: Letter of 23 May 1999 from
the then Leader of the Opposition (Mr Hague) to the Prime Minister.
Document M: Letter of 2 March 2000 from
the then Leader of the Opposition to Lord Thomson attaching letter
of 29 February 2000 from Allen and Overy, Solicitors, to James
Arbuthnot.
Document N: Letter of 12 July 2000 from
Gay Catto to Sir Hayden Phillips.
Document O: Letter of 12 July 2000 from
Sir Hayden Phillips to Mr Arbuthnot.
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.
Annex B
POLITICAL 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 with the recommendations
of the Royal Commission on Honours, under an Order of the Privy
Council. The Committee was required to "make such enquiry
as it thought fit about those whom the Prime Minister proposed
to recommend for an honour on account of political services, including
political peerages, and report whether they were fit and proper
persons to be recommended". The Committee did 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 Appointments Commission in 2005.
DOCUMENT A
Letter of 12 April 2000 from Sir Anthony Merifield,
Secretary of the Political Honours Scrutiny Committee to Sir Hayden
Phillips, Clerk to the Crown in Chancery
1. We spoke about the issue of Letters Patent
to Mr Michael Ashcroft.
2. In confidence I am sending to you copies
of letters from the PHSC about their decision:
(a) that of 22 March (A) was sent by the Prime
Minister to the Leader of the Conservative Party, from whom a
letter was received on 23 March 2000 (B) covering the affidavit
signed by Mr Ashcroft on 23 March 2000; and
(b) in the light of that, the Committee responded
to the Prime Minister on 27 March 2000 (extract enclosed as C).
No 10 published a Note to Editors (which I believe they had agreed
with the Conservative Leader's office) in the Press Notice issued
on 31 March (D).
3. The Chairman of the PHSC holds firmly
to the view, expressed also I believe by No.10 that the logic
of their decision is:
(a) the appointment is for a Working Peerage;
(b) an affidavit was signed on 23 March by Mr
Ashcroft giving an assurance that he would not take up that appointment
(ie be introduced into the House) until he had become permanently
resident at some time before the end of the calendar year; and
(c) until he becomes so resident there is no
urgency in the issue of the Letters Patent and a Writ of Summons.
Indeed to allow a Peerage now would suggest that we could not
police the undertaking.
4. Further it seems reasonable, not to expect
the Issue of Letters Patent to be widely sepertateed from the
issue of a writ of summons and the peer's response to it. Ian
Denyer has checked for me that the precents for Working Peers
support this, with very short gaps between Letters Patent and
the introduction to the House. Now the concept of a Working Peer
has become much firmer, with the loss of hereditary Members, the
rationale for a close tie seems to be strengthened.
5. We need to consider how to handle the
mechanics of this—especially as No.10 seem not to wish to
front the response to Mr Ashcroft though in the last resort it
is the Prime Minister who makes the recommendation to the Queen.
Lord Thomson will be willing to call a PHSC meeting if necessary—and
it may indeed be right to do this to ensure that Lord Hurd can
express his views. But, alternatively it may be sufficient to
inform the PHSC that (with the Prime Minister's agreement), the
Crown Office take the view that they should not issue Letters
Patent until it is clear that Mr Ashcroft has moved into permanent
residence in the UK and is thus able to take his seat and function
as a Working Peer.
6. However, as PHSC's Secretary I need to
have a clear message to convey to the Members, and to be moving
in line with you should there need to be a handling strategy.
So it would be most helpful if you, William Chapman and I could
have a word first.
7. I realise you have an uncomfortable Monday
and Tuesday with PAC and Select Committees though i trust your
page 3 notoriety will not provoke any of your interlocutors to
extremes! But if we could meet at noon on Monday to clarify the
position, and any handling points, I would be most grateful.
8. I am copying this letter to William Chapman.
He is aware of the noon meeting which your secretary kindly offered.
DOCUMENT B
Letter of 23 March 2000 from the Prime Minster
to the then Leader of the Conservative Party
I am writing to let you know that the Political
Honours Scrutiny Committee (PHSC) have completed their enquiries
on your recommendations for working life peerages submitted with
your letter of 2 March.
The Committee were unable to approve the recommendation
for Mr Michael Ashcroft for the forthcoming list of peerages.
Enclosed is a copy of a letter from Lord Thomson recording the
Committee's concerns. I would be happy to pass on your response
to them.
The list of working peers will be published
on Friday 31 March. I will be writing shortly to Sebastian Coe,
Robin Hodgson and Dame Sheila Masters to inform them of their
life peerages. My office will be in touch with yours to confirm
the details.
DOCUMENT C
Letter of 23 March 2000 from the then Leader of
the Conservative Party to the Prime Minister
Thank you for your letter of today's date.
Following our telephone conversation earlier
this evening I was pleased to learn from Jonathan Powell's conversation
with my PPS, John Whittingdale MP, that you do not object to the
recommendation of a peerage to Michael Ashcroft.
I am happy to give the assurance in the terms
sought by the Committee and enclose a memo I have tonight received
from Michael Ashcroft. I am, therefore, as requested by George
Thomson, sending this directly to you and would ask that you pass
it on to the Committee without delay so that they can formalise
their approval.
Memo from Lord Ashcroft to Rt Hon William Hague
MP, 23 March 2000
Further to our telephone conversation I am writing
to you to confirm the assurances which I have given you in relation
to the matters which you raised with me and upon which you sought
my written and unequivocal undertakings.
I hereby give you my clear and unequivocal assurance
that I have decided to take up permanent residence in the UK again
before the end of this calendar year. I have given my advisers
instructions to make arrangement to give effect to this decision
and I will instruct them forthwith to do so within this calendar
year.
I hereby firmly agree that I will not seek to
be introduced to the House of l.ords until I have taken up residency
in the United Kingdom within the timescale above mentioned.
I will also immediately resign as the Belize
representative to the United Nations, that resignation to take
effect before 31st March this year.
These are my solemn and binding undertakings
to you.
DOCUMENT D
Letter of 27 March 2000 from the PHSC to the Prime
Minister
Working Peers List: Spring 2000
We have now considered the letter of 23 March
2000, from the Leader of the Conservative Party, enclosing an
affidavit from Mr Ashcroft.
The Committee's 22 March letter rehearsed some
of the points which informed the Committee's views last June.
This time, our primary reservations in respect to Mr Ashcroft
(as indeed to one other candidate also) were that, though proposed
as a Working Peer he would be unable to fulfil that function until
he became a permanent resident of the UK—and so, in his
case also, a UK tax payer. It seemed to us that without such assurances,
the appointment of anyone, and of Mr Ashcroft in particular, to
a seat in Parliament would give rise to highly critical and damaging
publicity.
Mr Ashcroft's affidavit, endorsed by Mr Hague
in his letter, meet our requirements. Provided, therefore, that
the assurances are put in the public domain, we would not consider
Mr Ashcroft unsuitable to be recommended in terms of our remit.
We would hope that the Press Notice announcing
the Working Peers Appointments 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 that he will take up permanent residence in the UK again
before the end of this calendar year. He would be introduced into
the House of Lords only after taking up that residence. These
undertakings have been endorsed by the Leader of the Conservative
Party and conveyed to the Prime Minister—and to the Political
Honours Scrutiny Committee".
We have been concerned by statements in the
Press about certain candidates who are within the Working Peers
List. The Times of 2 March reported offers of a Peerage to five
former Labour Party Hereditary Peers and mention has been made
also of a possible offer of a Peerage to Mr Ashcroft and Mr Coe.
The most recent comments, about Mr Ashcroft, were printed on Friday
last week and are particularly unwelcome. The careful and confidential
handling of early sounding, nomination, and scrutiny cannot be
emphasised too much. We believe it would be right to hold an enquiry
into any breaches of confidentiality which may have occurred.
DOCUMENT E
Press notice issued by Number 10 on 31 March 2000
Working Peers List
The Queen has been graciously pleased to signify
her intention of conferring Peerages of the United Kingdom for
life upon the undermentioned.
To be Baronesses:
Dr Kay Andrews, OBE, Director, Education Extra.
Angela Theodora Billingham, JP, Formerly Member
(Labour) Northampton and Blaby, European Parliament.
Mrs Janet Cohen, Non-Executive Director and
Consultant, Charterhouse Bank Ltd.
Ms Anne Gibson, OBE, Former National Secretary,
Manufacturing Science and Finance Union.
Dr Lindsay Granshaw, Chair, Women's Liberal
Democrats.
Dame Sheila Masters, DBE, Partner, KPMG.
Mrs Rosalind Carol Scott, Group Leader, Suffolk
County Council.
Mrs Joan Walmsley, Public Relations Consultant.
To be Barons:
Richard Gerald Lyon-Dalberg-Acton, Baron Acton
Bt, Writer.
Michael Ashcroft, Chairman, Carlisle Holdings
Ltd.
Anthony Fitzhardinge Gueterbock, Baron Berkeley
OBE, Chairman, Rail Freight Group; Piggybank Consortium.
Alexander Bernstein, Retired Television Executive
and Chairman, Old Vic Theatre Trust.
Daniel Joseph Brennan QC, Chairman, The Bar
Council.
Thomas Orlando Lyttelton, Viscount Chandos,
Chairman, Lopex plc
Sebastian Newbold Coe, OBE, Private Secretary
to the Leader of the Opposition.
Matthew Evans CBE, Managing Director, Faber
& Faber.
George Lennox Fyfe, Chief Executive, Midlands
Co-operative Society Ltd; Chairman, Co-operative Wholesale Society
Ltd.
Anthony Robert Greaves, Former Councillor, Pendle
Borough Council.
Julian Pascoe Francis St Leger, Baron Grenfell,
Former Advisor to the World Bank.
Robin Granville Hodgson CBE, Chairman and Founder,
Granville plc.
Professor Julian Charles Roland Hunt CB FRS,
Professor of Climate Modelling, Department of Space and Climate
Physics and Geological Sciences and Honorary Professor of Mathematics,
University College London.
William Brian Jordan CBE, General Secretary,
International Confederation of Free Trade Unions.
Professor Peter Richard Grenville Layard, Director,
Centre for Economic Performance, London School of Economics.
James Thorne Erskine, the Earl of Mar and Kellie
DL, Former Member of the House of Lords.
Parry Mitchell, Founder and Chairman, Syscap
plc.
Professor Kenneth Owen Morgan, Research Professor,
University College of Swansea.
Matthew Oakeshott, Director, OLIM Ltd and Warburg
Investment Management.
Professor Bhikhu Chotalal Parekh, Professor
of Political Theory, Hull University.
Frederick Matthew Thomas, Baron Ponsonby of
Shulbrede, Former Spokesman on Education, House of Lords; Delegate,
Council of Europe and WEU.
Rupert Bertram Mitford, Baron Redesdale, Former
Liberal Democrat spokesman, House of Lords.
John Francis Hodgess Roper, Visiting Professor,
College of Europe, Bruges.
David Trevor Shutt, OBE, Chartered Accountant
and Group Leader, Calderdale MBC.
Sir Leslie (Arnold) Turnberg, President, British
Society of Gastroenterology.
Thursday 30 March 2000
Notes to Editors
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. He would be
introduced into the House of Lords only after taking up that residence.
These undertakings have been endorsed by the Leader of the Conservative
Party and conveyed to the Prime Minister—and to the Political
Honours Scrutiny Committee.
DOCUMENT F
Letter of 9 May 2000 from Sir Anthony Merifield,
Secretary of the Political Honours Scrutiny Committee to Sir Hayden
Phillips
I am writing, following a meeting of the Political
Honours Scrutiny Committee, to provide some additional information
about the appointment of Mr Michael Ashcroft to a Working Peerage.
The Committee recognises that, following the
public announcement on 31 March, the implementation of the award,
with the conditions attached to it, passes to the Crown Office,
acting on advice from the Home Office who will have obtained Royal
Approval to the issue of Letters Patent The Committee have noted
that these convey a right to a place in the House of
Lords, and that practice in respect of those
appointed as Working Peers recognises that the Letters Patent
be issued when the individual is ready to go ahead and take his
or her seat. We understand that except for cases where illness,
or a Parliamentary recess, have intervened, there is no recent
precedent for splitting the issue of Letters Patent, and the issue
of a Writ of Summons and the arrangements for the Peer to he introduced
into the House. Indeed, we understood that once Letters Patent
have been issued the individual concerned has a constitutional
right, and duty, to take his place in the House of Lords without
undue delay.
In order to provide assurances about his ability
to fulfil his duties of a Working Peer on behalf of his Party,
(in March he was still resident overseas and limited to 90 days
per year residence in the UK), Mr Michael Ashcroft furnished us
with an undertaking that he had "decided to take up permanent
residence in the UK again before the end of this calendar year".
He also said that "I hereby firmly agree that I will not
seek (my italics) to be introduced into the House of Lords until
I have taken up residency in the United Kingdom within the timescale
above mentioned.
The Committee would prefer that, in the light
of these understandings and of the provisions of the Constitutional
documents to which I have referred, Mr Ashcroft should be issued
with his Letters Patent, with their right and duty to attend as
a Member of the House of Lords, only when he is in a position
to exercise that right. While it is for Mr Ashcroft to decide
how to notify his taking up permanent residence, a letter to the
Inland Revenue which provides them with a firm date (and would
include or lead to the submission of their forms IR Form P86 (Arrival
in the UK) and IR DOM 1 (Domicile) would seem to be significant
in discharging the assurance he gave in March. Thereafter we would
not expect there to be any undue delay in the issue of the Letters
Patent and Michael Ashcroft's being introduced in the House.
When appropriate, the Crown Office may wish
to write to give Mr Ashcroft some indication of the convention,
practice and precedent which suggest that it would be usual to
issue Letters Patent as soon as, but not before, a new Peer is
in a position to discharge the constitutional right and duty conveyed
in the legal documents. There need be no delay once this stage
has been reached so that, once permanently resident in the UK,
Mr Ashcroft may then take his place in the House to discharge
the responsibilities of a Working Peer for which he was nominated
by his Party Leader.
DOCUMENT G
Letter of 13 June 2000 and attachment from Sir
Hayden Phillips to Gay Catto, Secretary of the Political Honours
Scrutiny Committee
Michael Ashcroft
I propose to send the enclosed letter to James
Arbuthnot MP, the Opposition Chief Whip, who has acted as an intermediary
with Michael Ashcroft, to confirm our joint understanding of Mr
Ashcroft's position in relation to his undertaking to the Leader
of the Opposition in connection with his Peerage.
On the basis of that joint understanding, I
believe I cannot reasonably withhold my permission for the procedure
leading to Ashcroft's Introduction to the House going ahead. I
would be grateful, however, if you would confirm that this is
in line with the expectations of the PHSC, urgently consulting
the members of the Committee if necessary.
Letter from Sir Hayden Phillips to Rt Hon James
Arbuthnot, June 2000
Michael Ashcroft
I am writing, as we agreed, to confirm our understanding
of Michael Ashcroft's position in relation 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 in the House of Lords and that his contract for services
to the various companies with which he is involved would be based
in the UK. His income under those contracts would, therefore,
be sourced in the UK and subject to UK tax. Mr Ashcroft does not
believe that his domicile for tax purposes is relevant to the
question of his Peerage, having undertaken to be resident in the
UK. 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 intends to come to the UK to live here
permanently. Mr Ashcroft has said that he will live in the UK
indefinitely 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 the position and that
the Leader of the Opposition is satisfied that the action adequately
meets the terms of his undertaking to take up permanent residence
in the UK. If so, I shall invite Mr Ashcroft to discuss his title
with Garter King of Arms and I will set in motion the process
for Letters Patent and Introduction on a date to be agreed between
him and the Crown Office.
DOCUMENT H
Letter of 22 June 2000 from Gay Catto to Sir Hayden
Phillips
MichaeL Ashcroft
Thank you for your letter of 13 July. I am sorry
I wasn't able to get back to you earlier.
I have now been able to consult the Political
Honours Scrutiny Committee about the draft letter which you propose
to send to the Opposition Chief Whip. They are somewhat concerned
that Mr Ashcroft does not apparently propose to complete the second
of the two Inland Revenue forms mentioned in Anthony Merifield's
letter of 9 May to you. In their view the undertaking given by
Mr Ashcroft did involve domicile as well as residence as defined
by the Inland Revenue. (And from my own, admittedly inexpert reading
of forms P86 and DOM 1 it is hard to see how Mr Ashcroft could
avoid filling in the second once he had completed the first.)
The Committee would therefore be grateful if
Mr Arbuthnot could be asked to clarify the position a little further.
They do not feel that the understanding set out in your draft
letter yet meets their expectations.
DOCUMENT I
Letter of 29 June 2000 from Sir Hayden Phillips
to Gay Catto, (with attachments J-L)
Michael Ashcroft
Thank you for your letter of 22 June. I have
sought from the Opposition Chief Whip the further clarification
you sought.
He has provided me with copies of two letters
(which I enclose), one from Richard Roscoe to Tina Stowell and
one from Lord Thomson of Monifieth to the Prime Minister. These
letters show that Mr Ashcroft was asked to give an undertaking
to take up permanent residence in the UK, in order to be available
in the UK to exercise the responsibilities of a Working Peer The
Committee's view was that availability to sit in the House of
Lords was the central issue and the undertaking Mr Ashcroft was
asked to give was intended to satisfy the Committee that he would
be available. As someone who is resident and ordinarily resident
for tax purposes, Mr Ashcroft will be able to sit regularly in
the House and to exercise the responsibilities of a Working Peer.
It is on that basis that Mr Arbuthnot does not believe that the
question of domicile is or can be relevant to the fulfilment of
the undertaking.
In any event, my own understanding from independent
enquiries to the Inland Revenue is that the Form DOM1 (Domicile)
need not be completed until the tax return is submitted which
for the current tax year could be as late as January 2002. While
some people choose to submit DOM1 on arrival or shortly afterwards,
the Inland Revenue would not require someone, who had not chosen
to complete the form, to do so prior to the completion of their
tax return at the end of the tax year.
Mr Arbuthnot also pointed out to me that other
Working Peers, including. he said, Lord Paul, are resident but
non-domiciled tax purposes and seem to be adequately fulfilling
their responsibilities. He is concerned about the appearance of
inequity in the treatment of Mr Ashcroft in comparison with other
non-domiciled Working Peers.
In my view, what Mr Ashcroft proposes would
appear to be sufficient to meet the undertaking he has given.
On the information available to me, I do not think I can reasonably
continue to withhold permission for the issue of Letters Patent,
but it is clearly important for all concerned that I do not take
the formal action for which I am responsible if the Committee
feels I have missed a relevant point in the agreements which were
reached. I should, therefore, be grateful for their reaction and
I am, of course, ready to meet them to discuss the position if
that would be helpful.
DOCUMENT J
Letter of 22 March 2000 from Lord Thomson to the
Prime Minister
Working Peers List: Spring 2000
When we reported the outcome of our meeting
on 16 March, I said I would be writing separately to you about
Mr Michael Ashcroft.
Last time we had a number of concerns about
Mr Ashcroft—possible adverse publicity linking the sinking
of the Belize Registered Rema with his shared ownership of the
Belize Shipping Register: his permanent residence overseas; and
the fact that Mr Ashcroft held a Belize diplomatic post at the
United Nations. There were discrepancies also between the donations
reported and those being canvassed in the Press—Mr Arbuthnot's
current Certificate now clarifies for us both personal and company
donations (which were recent and substantial).
The Rema sinking may continue to provoke
comment (as it did in the Lloyd's Register on 18 February), but
we must recognise that a recent report by the Marine Accident
Investigation Branch was unable to identify the cause of its sinking
or link it to the Belize Register. (Although the inspectors noted
that it was an old ship, detained twice in port State control
inspections and was flagged to a State with a poor detention record.
Furthermore they reported that the ship was undermanned and there
were questions about the qualifications and experience of the
crew. Exceptionally the Chief Inspector of Marine Accidents had
added to the Report certain recommendations to assist Belize improve
its safety record.)
More specifically, therefore, we considered
the issue of residence, as this seems central to the exercise
of responsibilities as a Working Peer. In his 23 May letter to
you last year, Mr Hague said "He (Mr Ashcroft) is, however,
committed to becoming resident by the next financial year (ie
by April 2000) in order properly to fulfil his responsibilities
in the House of Lords". It is unlikely that commitment will
be realised and a letter (enclosed) from Mr Ashcroft's lawyers,
Allen and Overy, which was sent to us recently, makes it clear
that there are significant issues to be addressed before an intention
to return to live in Britain can be put into effect. We understand
the likely constraints, but for that very reason believe that
it would be important to have a clearer assurance of residence
before advising on Mr Ashcroft's appointment as a Working Peer
in this particular List. Given Mr Hague's May 1999 letter, and
the timescale for exercising the duties of a Working Peer appointed
in a Spring List, we hope you will agree to invite Mr Hague to
let us have firm evidence of an unequivocal decision by Mr Ashcroft
that he will have taken up residence in the UK, on a permanent
basis, before the end of this calendar year.
Even with an assurance about such a decision,
(which we hope would be put into the public domain), we would
propose also that the Conservative Leader should reach an agreement
with Mr Ashcroft that he should not be introduced into the House
of Lords until he has actually taken up that residence in the
UK in the timescale we have mentioned.
If it can be given, an assurance about such
an irrevocable decision, carrying with it messages about availability
and status as a UK tax payer, and a clear understanding from the
Party Leader about the date of Mr Ashcroft's introduction to the
House, would go a long way to avoid what might otherwise be highly
critical and damaging publicity.
Finally, we understand from a letter sent to
us by Mr Hague, that Mr Ashcroft is ready to resign his appointment
as the Belize representative at the United Nations 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 that it will be possible for you to
convey these points to Mr Hague and invite his response. If you
wished to use this letter for that purpose, we would be happy
for a copy to be sent, exceptionally, to Mr Hague. But we would
expect his response to be sent directly to you.
DOCUMENT K
Letter of 28 March 2000 from the Honours Secretary,
No 10 to Tina Stowell in the then Leader of the Opposition's Office
l am willing to confirm the outcome of the Political
Honours Scrutiny Committee's consideration of Mr Michael Ashcroft.
The Committee has agreed that Mr Ashcroft' s
affidavit, endorsed by Mr Hague met their requirements. Provided
that these assurances are placed in the public domain there would
be no objections to Mr Ashcroft being recommended. The Prime Minister
has, therefore, put in hand the necessary arrangements for Mr
Ashcroft to be included in the list of working life peers to be
announced on Friday 31 March.
We propose that the press notice announcing
the Working Peers list will include the following note:
"In order to meet the requirements for a
Working Peer, Mr 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, He would be
introduced into the House of Lords only after taking up that residence.
These undertakings have been endorsed by the Leader of the Conservative
Party and conveyed to the Prime Minister- and to the Political
Honours Scrutiny Committee".
DOCUMENT L
Letter of 23 May 1999 from the then Leader of
the Opposition (Mr Hague) to the Prime Minister
Thank you for your letter about my recommendations
for working life peerages.
I am most concerned about the Committee's report
to you on Michael Ashcroft. At the suggestion of Jonathan Powell,
my Chief Whip spoke to Douglas Hurd to persue what might be behind
such a report, and discovered that the issues were as follows:
1. The Committee understood that Mr Ashcroft
was the owner and chief executive officer of the Belize Shipping
Registry. The Belizean trawler `Rema' went clown in the North
sea last year with the loss of four British lives. The state of
the ship in terms of safety, and the inadequate nature of the
safety required by the Belizean Registry, were to be the subjects
of a report to come out in perhaps November, and were likely to
be scandalous. For this reason now was not the proper time to
make a working peer of someone who, though not personally involved
in the state of the ship, was closely connected with it.
2. Mr Ashcroft was a tax exile. It was incompatible
for someone who chose to be out of the country for the majority
of the year to be a working peer, a position that required presence
in Westminster.
3. Mr Ashcroft had recently become the Belizean
ambassador to the United Nations, which was incompatible with
being a British working peer.
4. The Committee had read reports that suggested
he had underwritten the finances of the Conservative Party.
It seems that the cumulative effect of these
issues was such as to persuade the Committee that it should report
to you that Mr Ashcroft was not a "fit and proper person"
to be recommended. The decision as to recommendation is, of course
not theirs but yours, and the purpose of this letter is therefore
to express to you my concern at the Committee's report and my
request that, despite that report, you should determine still
to recommend Mr Ashcroft's name.
I shall deal with each of the issues in turn:
1. Mr Ashcroft is not the Chief Executive
Officer of the Belizean Shipping Register. He is the Chairman
and Chief Executive Officer and 62% owner of BHI a public company
whose principal activities are completely unrelated to the Shipping
Register. BHI owns (as a very small investment) 50% of the company
that manages the Register on behalf of the Belizean Government;
but the other 50% is owned by a group of lawyers who make up the
active management of the company. Contrary to suggestions made
in some press reports Mr Ashcroft has no direct involvement in
the management of the Registry and his personal link with the
loss of the Rema and the report to be produced in November (at,
incidentally, the request of Belize and the Shipping Register)
is a distant one. The Sunday Express recently published an apology
to him for suggesting that he was ignoring the safety of those
who Sailed in Belizean registered ships.
2. I am advised that the terms of reference
of the Committee do not include a judgement of whether Mr Ashcroft
would be likely, if made a working peer, to attend (although for
reasons I shall set out I believe he would). The Committee "will
have no duties either of initiation or selection, nor will they
be asked to adjudicate on the nature of the honour submitted.
Their functions will be one of scrutiny and scrutiny only—to
report if the past history or general character of a person rendered
him unsuitable to be recommended". Mr Ashcroft is indeed
non-resident for tax purposes and has been for some years, during
which time his principal business interests have been abroad.
He is, however, committed to becoming resident by the next financial
year in order properly to fulfil his responsibilities in the House
of Lords. This decision will cost him (and benefit the Treasury)
tens of millions a year in tax yet he considers it worthwhile.
3. His position as a Belizean ambassador
is something that he would bring to a halt if it were felt that
it was incompatible with being a working peer. He is a dual national,
and Belize is a member of the Commonwealth; so this seems an odd
reason to deny him a peerage.
4. The Committee appears to accept that
it is perfectly proper for a working peer to have made substantial
and regular donations to a political party provided there is no
question of those donations being made in return for the recommendation
of a peerage. My Chief Whip has already certified that no such
question arises in this case. In any event, Mr Ashcroft does not
underwrite the Conservative Party. He is a generous supporter
but in no different a way from those many Labour peers (including
Lords Sainsbury, Hamlyn, Levy, Puttnam and Bragg) who generously
support the Labour Party. Perhaps more to the point, he is also
an exceptionally generous supporter of charities in this Country.
His work for Crimestoppers (which he founded) continues to be
of acknowledged value to the police and to good order and has
been responsible for something like 26,000 arrests. He was the
anonymous businessman who recently offered a £50,000 reward
for information leading to the arrest and conviction of Jill Dando's
killer. It would be quite wrong to assert that his support for
any political party should somehow diminish the importance and
value of what he has already done for the country.
All of this arises in a climate of secrecy that
will create the false impression that there is lurking in his
past something giving serious cause to doubt his integrity. Yet
it also seems to me likely that there will be leaks to the press
of the fact that he has been the subject of an unfavourable report
by the Committee. All of this is utterly unfair to him.
A very important issue of principle now arises.
Mr Ashcroft runs the risk of being denied a peerage for reasons
which are either wrong, insubstantial or a matter of choice and
swift alteration, yet this is happening in a way which allows
no opportunity to answer the allegations made against him. Surely
in cases where the Committee feels there is some question about
whether a person is fit and proper to be recommended for an honour,
the party leader recommending that honour should be given the
opportunity to answer points made against his recommendation.
But I have not been given that opportunity.
If therefore despite the points made in this
letter you still feel unable to recommend his name for a working
life peerage, or to arrange for these points to be put urgently
to the Committee, I would ask for an urgent meeting with you to
discuss the matter further.
DOCUMENT M
Letter of 2 March 2000 from the then Leader of
the Opposition to Lord Thomson attaching letter of 29 February
2000 from Allen and Overy, Solicitors, to James Arbuthnot
I am taking the somewhat unusual step of writing
a letter to coincide with my nominations for life peerages. I
am doing so because one of my nominations, namely Mr Michael Ashcroft,
was considered by the Committee last summer on my nomination and
did not go forward. I was given to understand that there were
a number of concerns held by the Committee at that time which
led them to 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 it might be helpful if I were
to explain why in these circumstances I have nominated Mr Ashcroft
once again.
There was concern about Mr Ashcroft's involvement
with the Belize Shipping Registry IMMARBE and in particular with
the sinking of the mv Rema on 25th April 1998. As you will be
aware Mr Ashcroft severed all his connections with the Register
in July 1999 and the official investigation into the sinking of
the Rema has found no cause which can be attributed to the failings
of the Register or to any actions or omissions on the part of
Mr Ashcroft. I hope therefore that this concern has been fully
met.
In an unpleasant media campaign aimed at Mr
Ashcroft over the summer and autumn a number of other allegations
were made. None has been substantiated and suggestions of inferences
to be drawn there from by the Times newspaper were in turn withdrawn
publicly in December as part of the settlement between Mr Ashcroft
and that newspaper of the libel action which he had taken against
them.
Concern was also, I understand, expressed by
the Committee in the summer on two other aspects relating to Mr
Ashcroft.
Firstly his non-residence in the UK was felt
to be relevant. Mr Ashcroft has since publicly undertaken to resume
residency in the UK. Given the complex nature of his business
and financial affairs this cannot be achieved immediately but
his lawyers have been instructed to resettle his affairs so as
to achieve his residency in a well ordered manner. A letter from
his solicitors Allen & Overy to James Arbuthnot is attached
which makes clear the way in which Mr Ashcroft is taking the necessary
action to fulfil his undertaking to resume residency. 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 to avoid any potential
conflict of interest. Once again I am in no doubt that this reflects
his clear intention.
Finally I am putting his name forward once again
because I value his abilities and wish to make political use of
them as a working peer within the House of Lords 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, I would not be renominating
Mr Ashcroft if I had any doubts as to his suitability and was
not anxious to make use of him on the Conservative benches in
the House of Lords.
Letter of 29 February 2000 from Allen and Overy,
Solicitors, to James Arbuthnot
Michael A Ashcroft
Mr Ashcroft, who is a long-established client
of this firm, has asked us to write to you regarding the status
of his reorganisation of his personal and business affairs.
Shortly after the settlement in December 1999
of his libel action against The Times (on which we did not advise
him, owing to a conflict of interest), Mr Ashcroft consulted us
on his affairs, having regard to his intention to return to live
in Britain, something to which he had publicly committed himself.
Accordingly, since that time we have been advising
Mr. Ashcroft on various relevant questions, in conjunction with
his other professional advisers, including a leading firm of accountants
in London whom he has engaged for the purpose. He has instructed
us to advise him on the methods and implications of reorganising
his affairs in an appropriate manner, prior to his returning to
live in Britain, so that he can fulfil his commitment.
Given that Mr Ashcroft has lived abroad for
many years and has substantial business and other interests abroad,
as well as in the United Kingdom, there are many significant issues
to be addressed, some of which are complex in nature. In relation
to his becoming resident in Britain, several possible courses
of action are under consideration and each will have to be assessed
according to its implications for him, his family and associated
trusts and businesses; in some instances, it will also be necessary
to obtain advice in other jurisdictions.
DOCUMENT N
Letter of 12 July 2000 from Gay Catto to Sir Hayden
Phillips
Michael Ashcroft
Thank you for your letter of 29 June.
The PHSC are most grateful for the further clarification
you have obtained from the Opposition Chief Whip. They agree that
there is now no reason why you should not put in motion the procedures
leading to Mr Ashcroft's introduction to the House of Lords. They
suggest however that, since the question of Mr Ashcroft's domicile
does not apparently have to be resolved at this stage, it might
be preferable to omit the third sentence (`Mr Ashcroft does not
believe, ...') of the second paragraph of the draft letter to
the Opposition Chief Whip which you sent me on 13 June.
DOCUMENT O
Letter of 12 July 2000 from Sir Hayden Phillips
to Mr Arbuthnot
Michael Ashcroft
I am writing, as we agreed, to confirm our understanding
of Michael Ashcroft's position in relation 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 in the House of Lords and that his contract for services
to the various companies with which he is involved would be based
in the UK. His income under those contracts would, therefore,
be sourced 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 intends to come to the UK to live here permanently. Mr Ashcroft
has said that he will live in the UK indefinitely 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 the position and that
the Leader of the Opposition is satisfied that the action adequately
meets the terms of his undertaking to take up permanent residence
in the UK. If so, I shall set in motion the process for Letters
Patent and Introduction on a date to be agreed between him and
the Crown Office.
DOCUMENT P
Letter of 12 July 2000 from Mr Arbuthnot to Sir
Hayden Phillips
Michael Ashcroft
Further to your letter of today's date, I confirm
that I agree with your understanding of the position and that
the Leader of the Opposition is satisfied that the action adequately
meets the terms of Michael Ashcroft's undertaking to take up permanent
residence in the UK.
DOCUMENT Q
Letter of 13 July 2000 from Sir Hayden Phillips
to Gay Catto
Michael Ashcroft
I am writing to let you know that I wrote to
the Opposition Chief Whip yesterday (copy enclosed) and received
the enclosed reply. As you will see, the way is now clear to proceed
to the issue of Letters Patent and Introduction to the House.
I have instructed the Head of the Crown Office to take the necessary
steps.
I am copying this letter and Its enclosures
to Richard Wilson and William Chapman.
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