Ashcroft’s tax perk costs Belize British debt relief
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Billionaire Tory peer Lord Ashcroft claimed yesterday to have won a bitter battle with Clare Short, the international development secretary, and the Belize government to protect his lucrative tax exemptions in the small Central American country. His victory comes at the expense of an impoverished country which will lose millions of pounds of debt relief. Lord Ashcroft, who has based his business empire in Belize since the late 1980s, will continue to save hefty amounts by not having to pay tax to the Belize government for 30 years through a special exemption. The battle between Lord Ashcroft and Ms Short has been laced with bad feeling. The former Tory treasurer accused her of running a sustained and orchestrated “Get Ashcroft” campaign. He alleged she called him a “scumbag”. She denied both allegations. Lord Ashcroft pumped funds into the Conservative party while William Hague was leader, before stepping down as treasurer last month. Ms Short was preparing to write off £10m worth of Belize’s debts, provided it reformed its financial regime and ended the tax relief enjoyed by Lord Ashcroft’s businesses and one other firm. She argued that there was little point in waiving the debts to help poor people if Belize was foregoing tax revenues. Alan Kilkenny, spokesman for Lord Ashcroft, said: “The government is punishing Belize - a country hit by two hurricanes - by refusing to allow any relief from debt. This dog in the manger attitude is just punishing the people of Belize because the government would not agree to Britain’s demands.” Department for International Development sources privately insisted that the decision not to give debt relief went wider than the issue of the tax concessions, and that the British had other concerns about the Belize government’s financial policies. Such concerns were echoed by recent reports from the World Bank and the International Monetary Fund, they pointed out. Following an official study by management consultants KPMG this year, the two governments commissioned a confidential legal opinion from Michael Beloff QC. It is understood he advised that it would be possible to abolish the tax exemptions. But the Belize government has decided to take no action. US government documents obtained by the Guardian in June revealed American fears that Belize’s tax haven was being exploited by money launderers and fraudsters. |