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The Tory offshore peer

• Robert Peston
• 18 Apr 07, 07:00 AM

Lord 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 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 , for 拢768m. He picked up 拢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 拢1m in the past. The Conservative Party currently owes Lord Laidlaw 拢2.5m.

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

UPDATE 0950 GMT
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.

UPDATE 1700 GMT
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鈥檚 Revenue and Customs over the past three years.

That could be very expensive for the wealthy businessman - who pocketed more than 拢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.

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