Scots Tory peer quits the Lords to avoid paying out millions of pounds in tax

LORD Laidlaw, the millionaire who bankrolled the Scottish Conservatives, is to give up his seat in the House of Lords in order to maintain his status as a tax exile.

• Lord (Irvine) Laidlaw, who will keep his title after his decision not to comply with new rules which would force him to become a full British resident. Picture: Phil Wilkinson

Palace of Westminster authorities last night confirmed that the Conservative peer had contacted them to declare he was "not prepared" to comply with new rules which forced peers to become full British residents.

Faced with a multi-million-pound bill if he had chosen to do so, the Monaco-based peer has opted to surrender his seat, given to him in 2004.

The decision will place doubt on Lord Laidlaw's further involvement in Conservative politics, after it emerged last year that he had decided to cancel his donations to the Scottish party in order to "sort out" his tax issues.

However, despite no longer be allowed to sit in parliament, he will be able to keep his title, in the same way as hereditary peers who were also barred from sitting were able to keep theirs.

Born in Banffshire, Lord Laidlaw rose to become one of Scotland's wealthiest men on the back of a successful international conferencing business. He sold it in 2005, landing a fortune estimated at 730 million.

Over that time, he became one of the Conservatives' most generous donors, handing more than 3m to the party in 2007 alone. The Scottish party relied particularly heavily on his largesse.

However, his position has never been far from controversy, and after taking up his seat in the Lords his tax arrangements soon began to be questioned.

On becoming a peer, he promised to change his tax status to become a British resident, but, faced with an estimated tax bill of as much as 50m, he declined to do so.

In 2007, he acknowledged that "for personal reasons" he was still registered in Monaco, where he lives. Later that year, he announced that, to spare the Tories any further embarrassment, he would be taking a "leave of absence" from taking up his seat.

Lord Laidlaw's hand was forced earlier this year by the new Constitutional Reform Act, which asserts that members of the House of Lords must be full British residents.

Those members who were "non-doms", like Lord Laidlaw, were told they had until 7 July either to bring their tax status on shore or to resign.

A spokesman for the Lords said last night that Lord Laidlaw had written to the Clerk of the House to declare that he was "not prepared to come under the new rules".

It is understood he is the only peer to have so far announced he is resigning.

His fellow Conservative peer and tax exile, Lord Ashcroft, has indicated that he is prepared to give up his own non-dom status in order to remain a sitting member of the Lords.

Lord Laidlaw, who has homes in London, Scotland, Monaco and South Africa, has a record of huge donations to political and other causes.

Along with his funding for the Tories, he has donated 2m to the Princes' Trust and a six-figure sum to Merchiston Castle, his former school in Edinburgh.

He also once harboured hopes of funding a series of City Academies in Scotland, before opting to fund a school in Newcastle.

That project ran into trouble in 2008 after the peer was the subject of a tabloid sting, when he was secretly filmed with prostitutes in a Monaco hotel.

He subsequently issued a statement declaring that he had been "fighting sexual addiction for my whole adult life".

Comparing it to other addictions, such as drugs and alcohol, he asked for "understanding and forgiveness".

Last year, he had a brush with death after crashing his helicopter on a visit to the United States.

Lord Laidlaw was unavailable for comment last night.