Tax-exiles get a new lease of life as political donors

From today’s Observer:

A much-publicised law designed to stop wealthy tax exiles bankrolling political parties has been quietly dropped until after a general election, the Observer has learned.

The disclosure means that key Labour donors such as Lakshmi Mittal as well as Tory donor Lord Ashcroft will still be able to pump millions of pounds into the forthcoming election campaign, despite promises to curb the influence of wealthy backers. It has prompted accusations that the government has “nobbled” an act of parliament by failing to ask the electoral commission to enforce the rule.

Lord Oakeshott, the Liberal Democrat treasury spokesman, said he suspected Labour had abandoned its principled stand of just a few weeks ago because of concerns that the party cannot fight a cut-price general election against cash-rich Tories. “To support an important piece of legislation stopping this underhand practice and not bring it in before a general election is like banning a drug-taking footballer but allowing him to play in the cup final,” he said.

“I suspect the electoral commission is not being pushed by the government to get on with it. Labour needs to realise that they will never win an arms race with the Tories on dodgy donations.”