Cameron backing tax exiles block

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David Cameron is backing a Liberal Democrat bill to make it illegal for anyone who does not pay taxes in the UK to sit in the House of Lords.

The Tory leader's move will increase pressure on Lord Ashcroft, the party's deputy chairman and a major donor, to disclose his tax and residency status.

The new law would remove his peerage unless he makes clear he pays UK taxes.

Lord Ashcroft has been accused of reneging on a commitment to become UK domiciled for tax purposes.

This was reportedly a condition for the peerage he was awarded in 2000 when William Hague was Tory leader.

Mr Hague said then that Lord Ashcroft, who has a multi-million-pound business empire based in Central America's Belize, had promised to become resident in Britain in order to fulfil his responsibilities in the House of Lords.

'Disgrace to democracy'

However, the peer has refused to say whether he has honoured the commitment.

Mr Cameron said in December he had been given private assurances by Lord Ashcroft on the matter, but is now backing the new law proposed by Lib Dem peer Lord Oakeshott, who said: "Tax-evading peers are a disgrace to democracy."

The move comes amid mounting concern about parliamentary transparency and accountability after a string of financial and funding scandals.

And it coincides with a letter from Labour's chief whip Geoff Hoon to Mr Cameron, demanding straight answers about whether Lord Ashcroft is on the UK electoral register and is a permanent resident.

In a Mail on Sunday interview, Lord Strathclyde, the Tory leader in the Lords, said if the bill became law and Lord Ashcroft was not a UK taxpayer he would have to surrender his seat in the Lords.

A spokesman for Lord Ashcroft told the paper his tax affairs were a private matter.