Straw placates “striking” tax exile rebels

By Alex Stevenson

MPs voted to ban tax exiles like Lord Ashcroft from making large donations to political parties last night, after a U-turn from Jack Straw.

The justice secretary averted a potential rebellion from Labour backbenchers seeking to reduce the cap for tax exiles’ donations to just £7,500 but lost cross-party support in doing so.

The Conservatives, who rely on Lord Ashcroft’s donations to fund their carefully targeted campaigns in marginal seats, withdrew their backing for the bill as a result. It is not clear whether Lord Ashcroft is a tax exile or not.

During yesterday evening’s debate, Mr Straw admitted that the political parties and elections bill had undermined the whips’ usual powers.

In the Lords, where the government was defeated on the issue, he said there had been a “striking… difficulty that both the Conservative and Labour front-bench teams, if I may say so, found in encouraging otherwise loyal party supporters into the lobby”.

The government had been determined to oppose the tax exiles provisions until pressure from Labour backbenchers forced a change of heart.

“I am only too well aware that if we scratch the surface, the issue of party funding arouses great tribal feelings,” Mr Straw added.

“Whenever two or three Labour Members gather together, it does not take long for a peer’s name beginning with ‘A’ to fall from their lips; equally, a particular kind of Conservative member will foam at the mouth at the very mention of trade unions.”

He sought to persuade the Tories that the eventual measures voted through were different from the Lords amendment.

“They are not quite the end of civilisation as we know it. Indeed, they are a considerable modification,” Mr Straw explained.

The Conservatives voted against the measure.