Correspondence reveals Ashcroft's written undertaking to become a permanent UK resident and the intense lobbying on his behalf by his friend and former Tory leader William Hague

When Lord Ashcroft of Chichester sat down to pen his memoirs, he wasted no more than a few paragraphs on those vexed events of March 2000 which saw him rejected for a peerage for a second time, nor on the manner in which his close friend and ally William Hague managed deftly to reverse that misfortune.

It had been a political decision, he wrote. Tony Blair, the prime minister, "was personally blocking my nomination", and there were no legitimate grounds for such a rejection. He went on to describe how a furious Hague rode to the rescue, calling Blair during an EU summit in Lisbon to tell him that it was "disgraceful", and that he saw the matter as a "major constitutional issue". "In the face of William's protests," Ashcroft declared, "Blair backed down and I got my peerage."

It did seem like a remarkable and rapid volte face at the time. One Labour backbencher even warned: "At the rate Ashcroft is going, he will be a member of the royal family by Christmas." But the publication today, by the Commons public administration select committee, of hitherto private correspondence about Hague's nomination of Ashcroft for a peerage reveals a rather different picture.

Not only had Blair told Hague that he personally did not object to the tycoon's nomination, it shows that the question of where Ashcroft lived - and, critically, where he paid his taxes - was at the heart of the decision by the political honours scrutiny committee to reject him for a peerage.

The correspondence also shows that the then Conservative chief whip, James Arbuthnot, had reason to believe that after receiving his peerage Ashcroft was planning to remain a non-dom, despite the "clear and unequivocal assurances" he had given prior to receiving it, which led others to understand he would become a full UK taxpayer.

Although Hague insists he discovered that his old friend was a non-dom only a few months ago, the letters also make clear that he was said to have been made aware of the details of a final decision by a senior civil servant, Sir Haydn Phillips, which resulted in Ashcroft being able to declare himself to be a "long-term" rather than "permanent" resident. It was this decision that allowed Ashcroft to live, secretly, as a non-dom for the last 10 years.

Neither Ashcroft nor Hague have ever discussed this correspondence.

But the documents show in great detail how officials were debating the differences between residence and domicile, the name of the Inland Revenue forms Ashcroft should be completing, and how the scrutiny committee had made clear time and again that his seat in the Lords was approved only on condition of him becoming a permanent UK resident.

The first of the letters released today relate to the first time Ashcroft was rejected for a peerage, in May 1999, when Blair wrote to Hague to inform him of the decision. Three days later Hague wrote back, telling the prime minister he was aware Ashcroft had been turned down, in part, because he was a tax exile, and that it was "incompatible for someone who chose to be out of the country for the majority of the year to be a working peer". Hague confirmed that Ashcroft "is indeed non-resident for tax purposes", but was committed to becoming resident by the next financial year, and added: "This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."

The following month Ashcroft's rejection was reported in the media, although the reasons for the decision were not immediately made public. Six months after that, however, when settling a libel action against the Times, the multimillionaire made a public pledge to return to the UK. An agreed statement, published on the front page of the newspaper, stated: "Mr Ashcroft has told the Times that he recognises the public concern about foreign funding of British politics, and that he intends to re organise his affairs in order to return to live in Britain."

The following February, with Hague about to make a second attempt to obtain a peerage for Ashcroft, the businessman's lawyers, Allen & Overy, wrote to Arbuthnot, who was lobbying on his behalf. This letter, published by the Guardian last month, showed that the lawyers had been advising him "on the methods and implication" of his public commitment to return to live in the UK, and that "several possible courses of action are under consideration".

A few days later, Hague wrote to Lord Thomson of Monifieth, chair of the honours scrutiny committee, saying that Ashcroft "is taking the necessary action to fulfil his undertaking to resume residency", and that he was keen to make use of the businessman "as a working peer within the House of Lords". The same day, Arbuthnot sent a copy of the Allen & Overy letter to Sir Anthony Merifield, secretary to the honours scrutiny committee.

It was clearly not enough. On 22 March Thomson wrote to Blair to inform him that Hague must be in a position to provide "firm evidence" that Ashcroft had made an "irrevocable decision" about becoming a UK taxpayer if he were to be recommended for a peerage. That letter prompted Blair to write to Hague the following day, informing him that Ashcroft had been rejected for a second year in succession. Blair enclosed Thomson's letter calling for "firm evidence" from Hague on his friend's residence and tax status.

It was to be a frantic day of telephone calls, hurriedly dashed-off missives and what is described as an affidavit from Ashcroft, as it became clear that something would need to be done - quickly - if the Tory treasurer was to obtain the peerage, and the seat in parliament, that he clearly desired. Hague and Ashcroft talked over the telephone, and Ashcroft quickly provided a written undertaking in which he gave the Tory leader his "clear and unequivocal assurance" that he had decided to take up "permanent residence in the UK again before the end of this calendar year". This, he added, is a "solemn and binding" undertaking.

Jonathan Powell, Blair's chief of staff, then told Hague's parliamentary private secretary that the prime minister had no objections to Ashcroft's peerage. Later that night, Hague wrote to Blair, enclosing a copy of Ashcroft's undertaking.

Even then, the scrutiny committee was not completely satisfied. Four days after Ashcroft delivered up his written undertaking, Thomson again wrote to Blair, reiterating the committee's concern that candidates for a peerage could not fulfil their responsibilities unless they became resident in the UK "and so, in [Ashcroft's] case also, a UK taxpayer". Thomson adds that the written undertaking handed over by Hague meets the committee's requirements - but only providing Ashcroft's assurances are put into the public domain.

The next day, the honours secretary at Downing Street wrote to Tina Stowell, Hague's deputy chief of staff, explaining Ashcroft's peerage had been approved as a result of the written undertaking containing Ashcroft's "clear and unequivocal assurance" he would take up permanent residence in the UK. And three days after that, Ashcroft's peerage was announced by No 10, along with a note detailing the assurance that he had given.

That weekend in a Sunday Telegraph interview, Ashcroft said he wished to be known as Lord Ashcroft of Belize. The party leadership decided this was not such a good idea, and dismissed the comments as a joke. Ashcroft later made clear that he had been totally serious.

By now, it seemed, nothing remained but to dot a few i's and cross a few t's. Just to be certain nothing went wrong, however - and to avoid any suggestion that "we could not police the undertaking" - in mid-April Merifield wrote to Phillips, the civil servant responsible for sending out the letters patent - the government instrument formally conveying Ashcroft's peerage. These documents, Merifield suggested, should perhaps not be sent until Ashcroft actually took up UK residence.

In May Merifield wrote to Phillips again, and this time his tone was distinctly more firm. The scrutiny committee, he made clear, did not want the letters patent issued until Ashcroft had taken up permanent residence in the UK. He even suggested that the businessman might provide copies of his letter to the Inland Revenue, along with the two relevant forms, "IR Form P86 (Arrival in the UK) and IR Dom 1 (Domicile).

The following month Merifield was replaced as secretary to the committee by another civil servant, Gay Catto. Phillips wrote to Catto, enclosing a draft letter for Arbuthnot, "who has acted as an intermediary with Michael Ashcroft". That letter, which followed a number of conversations between Phillips and Arbuthnot, says that "Mr Ashcroft does not believe his domicile for tax purposes is relevant to the question of his peerage". It added that Ashcroft had promised to become a long-term, rather than permanent, resident.

Catto replied to Phillips, after consulting the scrutiny committee, and pointed out its members "are somewhat concerned" that his proposed letter to Arbuthnot does not mention the second of the two Inland Revenue forms mentioned by Merifield. "In their view the undertaking given by Ashcroft did involve domicile," she says.

Phillips wrote ba

Papers reveal Tory campaign to keep peer's tax privileges

William Hague was said to be aware 10 years ago of a deal struck by senior Tories that eventually resulted in Lord Ashcroft secretly remaining a non-dom after obtaining his peerage, according to official documents released today.

Hague, the former leader of the Conservative party who had been lobbying for the billionaire to secure a seat in the House of Lords, has repeatedly insisted that he was only told earlier this year that Ashcroft was a non-dom, and therefore not paying full UK tax on all his earnings.

But previously confidential parliamentary correspondence published today showed that Hague's chief whip, James Arbuthnot, was instrumental in lobbying for Ashcroft not to have to give up tax privileges on his massive overseas earnings - despite assurances given by Hague that he would pay "tens of millions" to the Treasury.

The papers also include a letter from Arbuthnot which suggests that Hague was fully aware of the deal between the Cabinet Office and Ashcroft.

This raises fresh questions for Hague, the shadow foreign secretary, who was forced to speak about the issue today for the first time after some of the documents were leaked to the BBC. He has denied being aware of the full details of the deal.

After a decade of refusing to clarify his tax status, Ashcroft revealed three weeks ago that he was a non-dom, appearing to contradict assurances made on his behalf by Hague, who fought hard to secure his seat in the Lords 10 years ago.

The political honours scrutiny committee repeatedly made it clear that Ashcroft's elevation was dependent on him giving a promise that he would return to the UK and become a UK taxpayer. The peerage was agreed after Ashcroft gave a "solemn and binding undertaking" in writing that he would become permanently resident in the UK. Instead of becoming a permanent resident, however, he became a "long term resident" - a distinction that allowed him to avoid paying UK income tax on all his worldwide earnings.

The correspondence released today by the public administration committee revealed for the first time that Arbuthnot was deeply involved in the negotiations that led to the downgrading of Ashcroft's undertaking.

Arbuthnot, who was said to be acting as an intermediary for Ashcroft, insisted that the billionaire - under the terms of the assurances he had given - could take up his seat in the Lords despite not being domiciled in the UK for tax purposes.

Sir Hayden Phillips, a senior civil servant, eventually agreed with Arbuthnot in July 2000 that Ashcroft needed only to become a long-term resident in order to comply with the undertakings he had given. In turn, Arbuthnot replied within hours, saying: "I confirm that I agree with your understanding of the position." He added: "The leader of the opposition is satisfied that the action adequately meets the terms of Michael Ashcroft's undertaking to take up permanent residence in the UK."

The terms of that deal shocked members of the political honours scrutiny committee. Lady Dean, one of the two surviving members of the committee, said today: "We were continually of the view that Lord Ashcroft would maintain his undertaking to take up permanent residence ... It looks like the commitments and undertakings given were not carried through."

The papers released today also show the scrutiny committee was determined that Ashcroft should honour the assurances he had given. The secretary of the committee had even suggested the businessman might be asked to show copies of Inland Revenue forms as proof that he was a full UK taxpayer; the IR Form P86, denoting arrival in the UK, and IR DOM1, proving he had become domiciled and would pay full tax. It repeatedly asked for evidence that this had been done before the undertaking was revised. The documents also show that all parties emphasised Ashcroft should live in the UK to become a full working peer and attend parliament regularly. But his Lords records show he has not spoken in a debate in the last year and has attended only 15% of votes.

A spokesman for Hague insisted tonight that he had delegated the issue to his chief whip. "He didn't know any of the details [in 2000]. He asked James Arbuthnot to deal with the issue and make sure Downing Street was satisfied. He did. That was it," he said. However, Hague did concede today that he should not have promised that Ashcroft would pay tens of millions of tax.

The foreign secretary David Miliband said that the letters proved that Hague was "intimately" involved in the process. He said: "It is now clear there has been a decade of deception at the top of the Conservative party and I repeat my call ... that David Cameron sacks Lord Ashcroft."

Monetary policy committee member Andrew Sentance calls rate of international recovery 'impressive'

An impressive bounce-back by the global economy from its deep recession a year ago will boost the chances of Britain exporting its way to economic recovery, a Bank of England policymaker said last night.

Andrew Sentance, one of the nine members of the Bank's monetary policy committee, said that the UK was already being helped by an improvement in global trade and output.

"The turnaround in the global economy over the last year has been quite impressive, given the scale of the shocks from the financial crisis," Sentance told the annual conference of the British Chambers of Commerce.

"This should give us grounds for encouragement that continued growth in the global economy will provide a supportive backdrop for recovery in the UK - even if some of our important markets, such as the economies of the euro area, may be turning around more slowly.

Sentance added that the global pick-up was the result of three main factors - a recovery in confidence, growth in Asia and other emerging markets, and the impact of ultra-loose economic policy. "As confidence builds and private spending recovers, it is likely to be appropriate to gradually withdraw at least some of this policy support for demand, without jeopardising growth prospects."

His remarks came as the CBI reported that a stronger performance by UK exporters was compensating for the continued weakness of domestic demand for industrial goods. The employers' organisation's monthly snapshot of industry found that 40% of firms reported export demand to be below normal, while 22% said it was above normal. The balance of -18% was an improvement on the -23% recorded last month. "Despite the gloomy headlines surrounding the release of the latest UK trade figures last week, the UK economy is benefiting from the revival in world trade and activity," Sentance said.

Larry Elliott

No party has created a vision for post-banking-crisis capitalism. Next week the chancellor, now his own master, can do so

In less than two months, Labour may no longer be in government. Even if, by some turn of events, Labour succeeds in remaining in office, Alistair Darling may no longer be chancellor. So it is entirely rational to see his budget next week as at best a stopgap event and at worst an almost irrelevant one, likely to be eclipsed by the almost inevitable emergency package the next government will seek to bring in.

And yet. No budget is ever wholly insignificant, least of all in troubled economic times. Budget day remains one of the few moments in the year when the public pays attention to politics. Moreover, any budget delivered on the eve of an election is still, to put it as neutrally as possible, an unrivalled opportunity to shape the forthcoming campaign.

But what kind of shaping? That is the real question. In 1987, when Nigel Lawson cut income tax by 2p just before the election, and in 1992, when Norman Lamont took 5p off the basic rate, the shaping took the form of the time-honoured tax giveaway. Gordon Brown's last pre-election budget in 2005 - the one in which he boasted hubristically of presiding over the longest period of growth since 1701 - was full of electoral goodies too, like free bus travel for the over-60s and a hike in the stamp duty threshold for first-time house buyers.

Bank bail-outs and borrowing mean that Darling has much less room next week for largesse of that sort. Nevertheless, yesterday's downward revision in the government borrowing figures provides a slightly bigger platform for the targeted help to industry and to those in work that the Treasury is said to be planning. With receipts up, unemployment down, and borrowing scaled back, it begins to look as if Darling's budget may be a larger fiscal opportunity than seemed likely in December. One should never rule out the possibility of a rabbit being produced out of the hat next Wednesday, especially something aimed at the rich that requires David Cameron to give an instant commitment to either back it or scrap it.

Yet the word is that this will not be an earth-shaking budget. These are not propitious economic times, and this is not by temperament the chancellor for anything that smacks of vulgar electioneering. This week's Ipsos-Mori survey for the Royal Society of Arts revealed that the public may not yet be ready for tough choices on cuts. Yet ministers fear that the public reaction to next Wednesday's speech may be that Darling is not facing up to the issues.

Perhaps surprisingly there are also no signs at present that Brown is pressing Darling to deliver giveaways. After the cabinet storms of the past year, the chancellor has won the political space to be his own master. His public reputation has risen unspectacularly but inexorably. Darling is now a trusted figure, a rare Labour asset at a time when trust in politicians is generally thin on the ground. The televised election debate that was announced this week between Darling, George Osborne and Vince Cable will have the Tories, not Labour, on the defensive.

Events have played to Labour's argument that cuts should not be made until the recovery is more secure. This week's unemployment numbers and yesterday's borrowing figures were a reminder that economic statistics can be unexpectedly good. April's first quarter growth figures, however, could be unexpectedly bad. Amid such volatility, Darling's caution inevitably goes down better than the more overtly politicised style adopted by Osborne.

The signs are that the general election will resolve into a Gold Cup-style contest between Time for a Change in the blue colours and Better the Devil You Know in the red. Yet if there is to be any point to a fourth term, Labour has to aim higher. Next week's budget may prove to be New Labour's, as well as Darling's, final opportunity to command the public debate for a long time. For that reason, Darling should seize this chance to say something brave and true that his party and his voters will remember for years to come. He can't neglect the more immediate practical and electoral demands of the occasion, of course. But next week it could be the larger message that matters as much as the measures.

All parties, Labour included, are struggling to give themselves and the voters a clearer vision of the kind of capitalist society they wish Britain to become in the next generation. This is, in spite of the difficulty, the question of the hour, the question that should be at the top of the agenda in the first general election after the worst economic crisis for 80 years. Labour cannot go back to the nationalising, public sector dominated vision of the 1970s, much though many in the trade union leadership would like that. It will not embrace the doctrinaire privatising and individualist vision of the 1980s, which it rejected. But it should not any longer sustain the Thatcherism-with-a-human-face vision that felt like the limit of the possible in the 1990s, though there are still positive lessons to be learned from it. No party has yet made the 2010's, post-banking-crisis, capitalist vision its own. Darling has the chance to do this on Wednesday.

Ever since the credit crunch and the bank collapse, Labour has been inching unevenly towards this new vision of capitalism. Darling himself has played a part, in his Callaghan lecture last year, as has Peter Mandelson. But the "what kind of capitalism" question goes well beyond the narrower issue of the proper role of government that Darling has so far addressed. It extends to questions such as ensuring the place of science, the environment and manufacturing in a balanced economy, the structure of the banks, the principles of a good business, the nature of corporate governance, mutualism and workplace consultation, the principles governing salary levels - and much else besides. It's about doing things differently. Labour has a very long way to go here.

It would help if Labour rid itself of its addiction to often irrelevant American thinking and looked more consistently to European models. Next to the sign above their desks that always says "It's the economy, stupid", Labour's manifesto writers could have one saying "like Germany, stupid". But if Labour wants Britain to be more like Sweden, Canada or Germany, rather than Greece, Italy or the US - and it should - then it needs to say so much more clearly, and to say how we get from here to there over the next quarter-century. If Labour is serious about offering a manifesto of genuine national renewal in May, as it claims, then there is no better place to start than when all eyes and ears are on Alistair Darling next week.

o PM criticised as official advice stays under wraps
o MPs call for more scrutiny of intelligence staff

Gordon Brown today broke a promise to publish new guidelines for British intelligence officers dealing with the torture and abuse of detainees held abroad after MPs and peers privately warned that existing guidance was unsatisfactory.

The prime minister was locked in a bitter dispute tonight with the parliamentary body set up to monitor the intelligence agencies over his refusal to publish its criticisms of the new guidance.

The Guardian has learned that members of the intelligence and security committee have expressed serious concern to Brown about the lack of clarity and "ambiguities" in the new guidance on interrogation techniques drawn up for MI5, MI6, and military intelligence officers after revelations in the Binyam Mohamed case.

The committee was assured by Brown last week that the guidance - and its own criticism of it - would be published before a Commons debate on the issue today.

His failure to do so drew sharp criticism from a committee whose members are hand picked by the prime minister. The dispute is compounded by a row between the committee and the government about plans for more effective overall scrutiny of MI5, MI6, and GCHQ, the government's electronic eavesdropping centre.

Michael Mates, the senior Conservative on the committee, told the Commons that the dispute was not "a matter of national security in any shape or form". Publication of the committee's criticisms had been put off was "because certain people think it is embarrassing", he said.

A Whitehall spokesman said that the committee's criticism had "raised a number of issues that need further consideration". The guidance is now unlikely to be published before the general election.

Brown has promised to publish the new guidance, drawn up after evidence, notably in the case of British resident and terror suspect Binyam Mohamed, that British security and intelligence officers were involved in the torture and cruel and inhuman treatment of detainees.

The government has already declined to publish previous guidance in force when Mohamed and other British citizens and residents say they were abused and tortured. "If they cannot get the new guidance legal, what does it tell us about the old guidance?" said the former shadow home secretary David Davis.

William Hague, the shadow foreign secretary, and Ed Davey, the Liberal Democrat foreign affairs spokesman, called for a "judge-led inquiry" into the affair.

The government also came under fire yesterday over a Foreign Office report that said Britain had to continue to work with foreign security agencies against terrorism even if they do not share UK standards on human rights. The UK could not afford the "luxury" of co-operating only with agencies in countries that did not abuse or torture detainees, the report said.

"This clearly leaves the door open to UK complicity in torture," Human Rights Watch, an independent group, said yesterday. Sending the message to abusive governments that torture is acceptable in the name of fighting terrorism "runs counter to the absolute prohibition on torture which imposes obligations on states not only to refrain themselves from committing such abuse, but also to working towards the prevention and eradication of torture worldwide", the group said.

Labour MP Chris Bryant was caught posing in his pants on the Gaydar dating website seven years ago, but now his career is thriving. And he is about to get married in the first civil partnership ceremony in the Houses of Parliament

The only thing I previously knew about Chris Bryant was that he once appeared on the gay dating website Gaydar in his underpants. Not a very fetching pair of underpants either: white Y-fronts that would not have been out of place in C&A circa 1972. Lithe, toned - he is a committed gym-goer and House of Commons swimming champion - but with a very dodgy taste in pants.

That was in 2003 and it's not a great thing to have on a Labour MP's CV. Google him now and about half the pictures you get are still that image. Yet here he is, seven years later, still lithe and toned and glowing with athleticism but in an immaculate suit and occupying a vast, polished, art-filled space in the Foreign Office as minister for Europe, eager to bang the drum for the EU and point out the uneasiness of the Conservative position. Bryant's advance suggests that we may finally be growing up a bit where sex and public life are concerned, and he will celebrate that fact a week tomorrow when he marries his partner Jared Cranney in what will be the first civil partnership ever held in the Houses of Parliament.

"When I was born, it was illegal to be gay in Britain and until the last 13 years progress was painfully slow," says Bryant. "Jared and I are really looking forward to getting married in Parliament, as so many straight couples have before us, because it's Parliament that has made it possible. Some people talk of 'broken Britain', but Britain is in many ways an infinitely better place than it was 13 years ago, when we didn't even have an equal age of consent. I saw Peter Tatchell's 1996 list of what had to be achieved by a Labour government - civil partnerships, gays in the military, adoption, equal age of consent - and every single one of them has been done. Civil partnerships are symbolic of the social change Labour has brought about."

How Bryant made it through the underpants debacle fascinates me, and after a tour d'horizon of the great European questions - Turkish accession, a joint army, whether the Tories will ever try to bring us out - I wheedle my way round to the subject. "I think of it now as a scar," he says. "It was a wound but it's a rather charming scar now. I had a period when I barely slept and it was horrible, but I'm very lucky in having a supportive set of friends - MP friends and others - and they looked after me."

At the time, the media predicted that he wouldn't survive, and there was much talk of deselection as MP for the rock-solid Labour seat of the Rhondda, but he says that was never likely. "That was just hyperbole [in the media], but it was pretty unpleasant. People were being doorstepped. You can't retaliate in any way; you're completely powerless. You just have to let it happen. It took a long time to stop because the pursuit of other people - exes and family members - by journalists went on for quite a while, and that's when you remember there's collateral damage to other people in your family." Do people still mention it? "Only David Cameron. He brought it up in the chamber," he says, referring to an oblique reference the Conservative leader made to him in the Commons in November last year.

It's fascinating that the Rhondda chose Bryant - gay, a former Anglican priest, and someone who had dallied with the Conservatives as a student - in the first place. Had he been surprised to be picked to fight the 2001 election? "I fell off the chair," he says, "and my opponents [for the nomination] certainly did. I had promised my then partner that I wouldn't get selected, but I did. He was very worried that I'd disappear into politics and he'd never see me again, and becoming an MP didn't do much for that relationship."

Fifty-two people applied for the candidature and a local councillor was hot favourite to win, but Bryant says hard work and knocking on the doors of every one of the constituency's 700 Labour members produced the unlikeliest of upsets. "Eight of us were put on the shortlist and there was a hustings. I did my 'I am what I am' moment, and got a standing ovation. I thought it was better to get selected on an honest basis."

Bryant is a youthful 48, a keen rugby player as well as a swimmer, energetic, competitive, combative. I see him in action at the London School of Economics, answering tough questions about European policy, and he gives no quarter, relishing the cut and thrust of the debate that follows his lecture on the perils of euroscepticism. "The euroscepticism that is prevalent in parts of British society - and which has seized hold of the opposition like a severe bout of influenza - undermines the British interest at every turn," he tells his audience. "It's an act of false patriotism." He calls himself an internationalist, and traces the roots of that outlook back to his Welsh father's decision to take a computing job in Spain in the 1960s - an unusual move back then. His family lived in Bilbao and Madrid before returning to the UK, where Bryant read English at Oxford before going on to theological college and being ordained as a Church of England minister.

Had he always intended to be a priest? "No," he says, "but the years from 12 to 18 were quite tough at home because Mum drank and it wasn't very happy, and the people who were most supportive of me were Christians [his school, Cheltenham College, had an Anglican ethos]. It's not that they said 'Go and be a vicar', but I remember the first Sunday at Oxford I decided to go to church and it continued. There was a bit of me that felt I'd survived all of this with a degree of strength, and that wasn't because I was a wonderful person, so it should be something I shared with other people and put to the use of the wider community. Now I hear myself saying it, it sounds hideously patronising and glutinous."

Gradually he realised that being gay and being a priest were incompatible. "When I was ordained [in 1986], the view on homosexuality was 'Don't ask, don't tell', and, anyway, I wasn't really certain where I was going, but by 1991 I thought, hang on I'm gay, and the church had changed its position a bit - it had decided the Bible doesn't really like gays. There was a new document produced, and I remember the Bishop of Oxford saying, 'I've never laid hands on a gay man' a week after he'd ordained me. I thought there are battles I want to fight; this isn't a battle I want to fight all my life; I want to go and do something where I can be open and honest about myself and have a partner and all of that."

He left the priesthood - though remains what he calls a "heterodox" Christian, rejecting the Virgin Birth and the Resurrection but holding firm to the teachings of Jesus - for the uncertain world of politics. He worked for Labour MP Frank Dobson, was a councillor in Hackney, became chairman of the Christian Socialist Movement, wrote biographies of former Labour chancellor Stafford Cripps and actor-turned-politician Glenda Jackson, came remarkably close to winning Wycombe for Labour in 1997, and was the BBC's head of European affairs, lobbying on the corporation's behalf in Brussels, before landing one of the safest Labour seats in the country.

Bryant is frequently called ambitious, and his prominent role in trying to usurp Tony Blair in a party coup in September 2006 was attributed to his having been left on the backbenches, but he insists he has changed. "There was a time when I had an ambition that was all about rising to great office, and it made me a pretty odious member of the House of Commons," he says. "I was running at the gate like a

City brushes aside Treasury denials and predicts extra £2-3bn pre-election spending as figures show fall in net borrowing

Alistair Darling tonight ruled out a pre-election giveaway budget despite the release of new borrowing figures showing a smaller hole in the government's finances than previously feared.

The Treasury stamped on speculation that improved tax receipts would enable the chancellor to produce headline grabbing measures in Wednesday's package to kick-start Labour's election campaign.

"With one month of the financial year remaining, today's figures are broadly in line with our pre-budget report forecasts," a Treasury spokesman said after borrowing figures for February showed net borrowing at £12.4bn against the £14.8bn expected by the City. "They continue to show strong growth in government spending, reflecting our continued support for the economy."

Despite the official caution, the City is expecting Darling to pump an extra £2-3bn into the economy next week, with the emphasis on measures that will boost long-term growth prospects. Analysts believe the chancellor may also freeze petrol duty to try to prevent petrol prices rising above 120p a litre during the election campaign.

The Institute for Fiscal Studies, Britain's leading expert on tax and spending, said the budget deficit for 2009-10 was likely to be £166bn - £12bn less than Darling predicted in December's pre-budget report. But with separate data released today showing Britain's credit-starved companies still struggling, the IFS warned there was little scope for generosity.

Rowena Crawford, a research economist at the IFS, said: "As the chancellor prepares for next week's budget he will doubtless be pleased by today's figures. Tax receipts were higher than the same month last year - with growth in receipts of income tax, national insurance and capital gains tax being particularly strong relative to his December 2009 pre-budget report forecast - and there have been downward revisions to figures for borrowing in earlier months of this financial year."

In the first 11 months of the 2009-10 financial year, public sector net borrowing stood at £131.9bn, up from £66.5bn in the same period last year. The Treasury said in December's pre-budget report that it expected the full-year figure to be £178bn.

Crawford said: "Overall the figures from the first 11 months this year suggest that borrowing is on course to come in at £166bn, which would be £12bn lower than Mr Darling forecast in the pre-budget report. Despite these figures, the overall state of the public finances - and the fact that lower borrowing this year might not translate into lower borrowing going forwards - means the chancellor should not announce a significant permanent net giveaway in next week's budget."

Lower than expected unemployment and the return of VAT to 17.5% helped to restrict the level of borrowing last month, even though the deficit was still the highest for any February since modern records began.

Government receipts were 3.6% higher last month than in February 2009, the fastest rate of growth since April 2008, when the economy was just slipping into recession.

Weak lending figures from the Bank of England, however, put the durability of economic recovery in doubt. Threadneedle Street said credit to businesses had shrunk by £6.5bn in January, almost double the decline of £3.4bn in December. Despite pressure from the government, lending by banks to the corporate sector was at its lowest since July 2009.

Howard Archer, UK economist at IHS Insight said the survey made "grim reading" and underlined concerns about tight credit conditions.

"Lack of access to credit for smaller businesses remains a particular problem," Archer said, adding that the Bank might be forced to return to return to quantitative easing if the economy faltered.

Justice is a public health concern too. Offenders meeting victims can cut the trauma crime causes

It was when the man sitting opposite him in HMP Pentonville casually referred to "the first time we met" that Will Riley finally erupted - because the businessman had not encountered Peter Woolf at a drinks reception but when the prolific burglar broke into his home and attacked him. "I was like a fire hydrant going off," Riley recalls. "I shouted at him that he had crushed every belief I had that I could handle myself and protect my family. "

For Woolf, this was the moment his perspective shifted irrevocably. "I wanted the ground to swallow me up, I felt so ashamed. So I went on the defensive, then Will started listing the effect I'd had on him - so many things I hadn't given a thought to before."

The men were brought together by a process of "restorative conferencing", a model of restorative justice that holds the offender directly accountable to the people he has harmed, often in front of others he trusts, including members of his family or community.

Though many lobbyists would argue that it puts victims' experience at the heart of the criminal justice system, where it belongs, that too readily lends itself to reinterpretation as retributive tabloid shorthand. More aptly, it can be said that restorative justice offers a controlled environment in which the anger, trauma and guilt surrounding an offence can be discharged by victim and offender, resulting in a - not necessarily instantaneous and certainly not simplistic - coming-to-terms for both.

Eight years later, Woolf has not reoffended, and is working as a restorative conference facilitator, while Riley was so inspired that he went on to found Why Me?, an organisation that campaigns for conferencing to be made available to all victims of crime. Yet, despite numerous glowing evaluations in Britain and abroad, as well as copious government lip service, only a handful of the 10.7m crimes with an identifiable victim committed last year were resolved with a restorative element. But with the shadow prisons minister, Alan Duncan, last month making a commitment to implement the scheme nationally if elected, that may be about to change.

Restorative justice is the most effective tool the criminal justice system doesn't use. Four different evaluations of pilot schemes by the Ministry of Justice have found an average fall of 27% in reoffending rates, while the Restorative Justice Consortium estimates that for every £1 spent on conferences it saves the taxpayer £8 through the reduction in reconviction.

Just as important, the schemes are hugely popular among victims, with a takeup rate of 77% and a satisfaction rate of 85%. Most compelling, compared with a control group of victims, those who had been through restorative justice were 32% less likely to show high levels of post-traumatic stress disorder. In New Zealand, where legislative provision for restorative practice was enshrined in 2002, the impact on reconviction and incarceration, particularly for young offenders, has been marked.

Of course, the purpose of any criminal justice system is to adjudicate, not ameliorate. Still, as Baroness Stern argued this week in her report on rape prosecution, a focus on conviction should not come at the expense of consideration for victims. According to Karin Madsen, who runs a pioneering centre in Denmark using restorative techniques with victims of sexual violence, the authorities can forget that victims have an immense need for information, which is excluded by a court system that requires defendants to counter allegations rather than explain their behaviour. Restorative justice humanises the cold instrumentalism of punishment.

Critics on the right display an unhelpful tendency to equate the restorative model with cleaning off graffiti instead of serving time. But it wasn't conceived of to divert serious offenders from custody. While many community sentences do now have a restorative flavour - and, yes, that can include graffiti removal - it's the specific nature of public confrontation and shaming involved in conferencing that has most impact.

Liberal sceptics are suspicious of this public element, but it is very different in intent and execution from the kind of punitive, unstructured shaming that results with an antisocial behaviour order (asbo). The Australian academic John Braithwaite, a leading advocate for restorative methods, believes that current criminal justice practice creates shame that is solely stigmatising and thus counterproductive, as it serves to symbolically exclude the criminal from law-abiding society long after their sentence has been served, making reoffending more likely. Reintegrative shaming, on the other hand, allows offenders to acknowledge wrongdoing, then offers ways to expiate that shame while encouraging others to readmit the offender to society.

Restorative justice is about balance: between therapeutic and retributive models; between the rights and responsibilities of offenders and the needs of victims; between a community's desire for local solutions and the state's duty to punish. Most fundamentally though, it recognises that justice should be as much a public health concern as a rational legal process.

Extensive correspondence released today sheds new light on Tory peer's efforts to shield foreign earnings from UK tax

The striking fact to emerge from the correspondence released today on Lord Ashcroft's tax status is the determination with which Michael Ashcroft back in 2000 refused to give up his non-domicile tax status in return for a peerage. His tax status was the issue that dominates the correspondence, itself a fascinating glimpse into the closed world of how the establishment hand out peerages.

It is also clear that the political honours scrutiny committee initially interpreted the terms of Ashcroft's peerage as requiring him to become permanently resident and domiciled for tax purposes. The committee even directed Ashcroft which tax forms he would have to sign to become domiciled.

Ironically, the man that may have led the committee to that belief was William Hague. The former Tory leader started the negotiations on Ashcroft's peerage in May 23 1999 in a letter to Tony Blair in which he committed his biggest donor to becoming resident. But he gave the impression that Ashcroft was also going to become domiciled by writing to Blair that Ashcroft's "decision will cost him ( and benefit the the Treasury) tens of millions a year in tax, yet he considers it worthwhile". That would only be the case if Aschcroft was to pay tax in the UK on his world wide income. Hague now says his promise to Blair was "mistaken".

In Ashcroft's defence, the final agreement between the honours scrutiny committee and Hague's intermediary, James Arbuthnot the chief whip, is silent on whether Ashcroft intends to become domiciled, and makes only reference to the fact that he will be resident. In successive meetings Arbuthnot argued it would be wrong to require Ashcroft to become domiciled, pointing out no such conditions had been imposed on other peers such as Lord Paul.

It is also clear in Ashcroft's defence that the civil servant involved in the talks, Sir Hayden Phillips, did not believe Ashcroft needed to become domiciled.

The honours scrutiny committee abandoned its battle to require him explicitly to be domiciled by writing to Phillips in July 2000 saying they saw no longer saw any reason to deny him his peerage, adding "the question of Mr Ashcroft's domicile does not apparently have to be resolved at this stage". But they decided the drafted agreement between Arbuthnot and the committee omit a planned reference to Ashcroft's belief that "his domicile for tax purposes is not relevant to his peerage: It is not clear why the committee was content with this ambivalent conclusion. Possibly Phillips persuaded them they were overstepping their rights.

One reason the committee may have relented is a obfuscatory letter from Ashcroft's lawyers - relayed to the committee - saying his tax status was terribly complex and would take time to resolve, as long as two years. Hague argued in a letter dated March 2 2000 to the political honours committee this lawyer's letter was clear about how he would fulfil his undertaking to resume residency. The letter was anything but clear.

Two final puzzling points.

First, it is hard, looking at this extensive correspondence, to work out how Sir Hayden Phillips can sustain his image as "the gifted amateur" bamboozled by the difference between permanently resident and domiciled. He said effectively today he was unaware of the distinction between the two. Yet the difference between the two, and Ashcroft's refusal to commit himself to domicile status, was the central point of Sir Hayden's discussions.

Second, we are being asked to believe that Hague was not informed by his chief whip of how these highly sensitive discussions concluded. Hague only got alongside the detail at the turn of this year, even though he personally repeatedly intervened in the negotiations in 2000 on behalf of one of his major funders. For a decade, with a controversy interrmittently raging on the issue, Hague did not think it worth saying either to Ashcroft or Arbuthnot "old boy, how did those talks precisely end up ? "

Poorly prepared Crown Prosecution Service cases see criminals walk scot-free. Recruiting in-house prosecutors is partly to blame

Crown prosecutors are lawyers employed by the Crown Prosecution Service (CPS) whose various duties include advice on charges, case preparation and advocacy in the magistrates court. Some days they appear in court with a pile of 20 cases to process in preparation for trial. Other days they deal with legal applications, sentences, or conducting summary (magistrates court) trials, although frequently trials are briefed out to an independent barrister, which frees up the crown prosecutor's time to deal with their other tasks.

So when an email sent by a senior crown prosecutor makes the headlines, warning that the CPS in their borough is "near meltdown", with criminals walking away scot-free due to internal inefficiencies, one would expect uproar. When Stephen Wooler, the chief inspector of the CPS, says there are serious concerns which have had a knock-on effect on the conviction rates in the capital, and recent reports in nine of the London boroughs classified five out of the nine as "poor", with the remaining four classified as "fair", you would imagine heads to roll. Particularly when the final reports show the situation to be far worse than originally anticipated.

Keir Starmer QC, director of prosecutions, says that the CPS in London needs to "perform much better than it does". So where does the problem originate?

As an independent barrister prosecuting in some of these London boroughs, I see the fallout on a weekly basis. Paperwork and files are incomplete or missing; witnesses are not warned to attend court; vital evidence mislaid. And, tired of hearing the same excuses day after day, magistrates are increasingly less likely to adjourn the case to allow the crown to paper over the cracks. Defendants who would otherwise be "bang to rights" end up walking out of the court with a big grin on their face as the case against them is dismissed.

It would be easy to blame these problems on a simple lack of funding. But there may be another root cause - the CPS policy of employing criminal barristers as in-house crown advocates, rather than paying them a fee case by case.

Crown advocates, unlike crown prosecutors, deal almost exclusively with trials in the crown court and court of appeal. For some at the independent bar, it can be a tempting career move. With a starting salary of £60,000 to £70,000 a year, paid holiday, pension and maternity leave, there are many who will happily relinquish their precarious self-employed status and take the Queen's shilling in exchange for future security.

Yet a report by Europe Economics, published in September 2009, suggests that the policy, far from saving money, is likely to end up costing the taxpayer millions more compared with the previous system. How could the CPS have made such a fundamental error of analysis? Unless cost was not the main motive behind this scheme, and they had a more politically-motivated goal in mind.

It is far easier to control the way in which prosecutors work if they are on the payroll than if they are an independent agent. They will be subject to internal policies and targets set by their political masters; they will likely think twice about sticking their heads above the parapet and making impolitic noises that might leave their job, their promotion prospects or their pension in jeopardy. In short, as Rupert Myers pointed out in a previous article, by becoming civil servants, the prosecutors' allegiance shifts from being an agent of the justice system to an agent of the government.

For the in-house prosecutor, the public interest test will inevitably be tainted by the latest political imperative - more burglary convictions, or a clamp down on anti-social behaviour. In other words, in-house prosecutors are arguably more malleable than their colleagues at the independent bar, and more inclined to tow the political line. But is the cost of this unswerving allegiance a price worth paying?

Local CPS offices have had to tighten their belts, leading to staff shortages, recruitment freezes and fewer counsel being briefed for summary trials, meaning more crown prosecutors spending a day in court on one or two trials instead of providing the valuable back-up required in advice, case preparation and review. The extent to which these cutbacks can be laid at the door of the crown advocate recruitment policy is unknown, but it is evident that if the budget has been fudged, as suggested by the Europe Economics report, the shortfall will have to be made up from elsewhere.

Consequently, trials, particularly in the magistrates court, are not properly reviewed, disclosure is not made, witnesses are not properly warned, procedures are not followed, the CCTV not followed up, or the interview tape goes missing.

And so the cycle is complete. The defendant grins as he walks out of the courtroom. The crown prosecutor (or independent barrister) is torn off a strip by an impatient bench and takes it on the chin as they wonder how they will find the right words to explain to the victim why their case has been canned.

o This thread was commissioned after the author suggested it in a You tell us thread

Toxicology tests attribute death of John Sterling Smith last month directly to legal high, adding to clamour for it to be banned

A man from Hove collapsed and died as a direct result of taking the legal high mephedrone, according to the results of toxicology tests released today.

John Sterling Smith, 46, a Marks & Spencer checkout worker, suffered a heart attack in early February after taking the drug, which is also known as K-Cat and Meow Meow and has a similar effect to ecstasy and cocaine.

The result, which emerged from tests at St George's hospital, Tooting, south London, for the Brighton and Hove coroner's office, added to the clamour for the drug to be banned. It is thought to be the first time a fatality in the UK has been directly attributed to the stimulant.

Two teenagers from Scunthorpe, Nick Smith, 19, and Louis Wainwright, 18, died after taking it on Sunday night with alcohol and methadone, the heroin substitute. Toxicology tests will determine mephedrone's role in the fatalities.

In the Commons, Labour's deputy leader, Harriet Harman, warned young people to stop taking legal highs. "They are extremely dangerous."

The Conservatives have called for a temporary ban on legal highs until there is a proper assessment of the risks.

Smith's brother, Roger Smith, told the Brighton Argus: "If anything at all good can come from John's death, I hope it can be a warning to anyone thinking of trying it - just don't. It could kill you. Sadly, people will try it as long as it's legal, whatever the risk. The government needs to ban it, urgently."

Two men, aged 35 and 40, are on police bail after being arrested in connection with the supply of class A drugs also found at Smith's Hove home.

Mephedrone is derived from cathinone, the active ingredient found in khat, a plant used as a stimulant in east Africa, and is widely available as a powder online for £10 to £15 per gram.

The Advisory Council on the Misuse of Drugs (ACMD) is to issue a report into a group of legal highs, including mephedrone, at the end of this month. The government said it would take "immediate action" based on the advice.

Nick, a 16-year-old in the south-west of England, told the Guardian the drug had grown dramatically in popularity in the last three months.

"When you take it you start feeling elated and in a really good place," he said. "You become quite emotional and it is very easy to talk about deep things. It is very moreish and you always have to snort more than one line, but it is a terrible comedown.

"Your vision is quite funny and you feel really really desperate. I had a friend who did it day after day and then at the end of the week sat down and cried for hours.

"Another friend had been drinking and then had a couple of lines and started coming in and out of consciousness and then he stopped breathing. We had to hit him in the chest and he would come back round with a huge intake of breath."

Lord Ashcroft has remained a non-dom despite apparently gaining his peerage on the understanding that he would become a UK taxpayer. Will this damage the Conservatives' electoral prospects?

Europe must end its diplomatic indifference to Bosnia's need for reform if it is to prevent a breakdown in the fragile status quo

Bosnia's future is becoming increasingly uncertain. An ethnic veto has long made the central government ineffective and, most recently, Milorad Dodik, the leader of the Serb-controlled entity Republika Srpska, has responded to efforts at reform with a threat to hold a referendum on independence.

Many consider secession unlikely, but Dodik's threat does heighten fears that today's fragile status quo could break down. While nobody expects the mass violence of the 1990s to recur, that does not justify diplomatic indifference and inaction.

The Dayton Accords of 1995 ended Serb-instigated ethnic cleansing and established peace in Bosnia. But that agreement did not create a functional Bosnian central government with the capacity to undertake the reforms needed to meet the terms of accession to the European Union.

To appease Bosnian Serbs led by Slobodan Milosevic (who died while on trial for war crimes), Radovan Karadzic (who remains on trial for war crimes) and Ratko Mladic (who was indicted for war crimes and is still on the run in Serbia), the west accepted the territorial division of Bosnia at the end of the war. This acceptance was manifested in a constitutional structure that gave the Bosnian Serb region quasi-independence and the power to obstruct the emergence of an effective central government in Sarajevo.

The EU, having helped rescue Bosnia from its past by mortgaging its future, seems in no hurry to change the country's purgatory-like status. European leaders have allowed their most useful tool for preserving the peace and leveraging change - the once-respected office of the high representative - to be diminished to the point that many Bosnian officials treat the incumbent with disdain. But it should be recognised that, in post-Cold War Europe, it has proved highly dangerous to allow disrespect for European purpose and resolve to take root.

If the Bosnians lack the capability to modify the iron corset bequeathed to them at Dayton, the EU remains indifferent, and the United States is preoccupied with the Middle East, South Asia and China, what lies ahead? Leaving Bosnians to explore the options that befall a failed state (with a Muslim plurality) - located within Europe but on the margins of its prosperity, unity and relative social cohesion - is to acknowledge policy bankruptcy and let others roll the dice on ways to end the current stalemate.

Some in Europe assert that over time the parties may eventually see the benefits of greater co-operation, that dissolution will not occur, or that, if it does, it will likely be relatively tranquil. Such assumptions do not inspire confidence. Violence has been the traditional agent of change in the Balkans, and the level of frustration in Bosnia is growing.

Faute de mieux, the Americans have allowed the burden of dealing with these issues and sorting out the unfinished business of Dayton to fall to the EU. Indeed, it is past time for the EU to take the diplomatic lead in fixing what Dayton left undone. While the EU's new governance structure seems, at least on paper, to lend itself to more robust efforts in the Balkans, diplomatic habits die hard, and the Union will need to overcome its continuing legacy of relying on carrots without sticks to deal with knotty Balkan problems.

Regardless of the EU's unhappy diplomatic past in the Balkans, the most practical way forward is to seek political reform in Bosnia rather than hoping for the US to resume its leadership role. Any EU effort should be based on the following reinforcing elements:

o A conference of the three Bosnian parties this spring to fix the Dayton agreement by strengthening the central government sufficiently to enable Bosnians to fulfil the requirements of the EU accession process while maintaining the existing entities. This gathering should include both the US and Serbian governments as active observers. European and US leaders would have to convey to the Bosnians and others that failure is not an option and convince them of the EU's bottom-line unwillingness to accept opposition from those in Bosnia who impede the EU accession process.

o Since Serbia is essential to the continued existence of Republika Srpska, pressure must be brought to bear on its government, which seeks EU membership, to make clear to obstructionist Bosnian Serb leaders that they cannot hold a referendum on independence, and that they must accept enhanced central-government powers.

o Support for civil-society groups and democratic parties prior to elections throughout Bosnia this October. The EU and the US should underscore the need for political change and for candidates who support EU accession as indispensable to Bosnia's economic and political progress.

The alternative - tinkering with reform while hoping that time, EU money and a watchful eye will move the three Bosnian communities toward political harmony - is not prudent policy.

Copyright: Project Syndicate, 2010

Now the Home Office is suggesting the ID card could replace the bus pass for the over 60s - insinuating it into national life

Leading Labour's pre-election push on the ID card is Home Office minister Meg Hillier, a former mayor of Islington and an MP since just 2005. According to Theyworkforyou.com, Hillier has voted strongly in favour of a smoking ban, replacing Trident, terror laws and - naturally - ID cards, while voting against an investigation into the Iraq war and climate change laws: so, a bright New Labour high-flyer who balances her busy political life with the demands of a young family, or a dreary knuckle-dragging authoritarian, according to your point of view.

Hillier's attempt to embed the ID card into British life has a desperate ingenuity about it. First the Home Office tries - without much success - to persuade young people that the card is a hip accessory that will allow them to prove their age when buying alcohol or clubbing, now Hillier targets old people with a suggestion that the ID card will replace the bus pass, as part of a plan where the elderly are given the card free.

The efforts to roll out the £5bn scheme when government departments are so strapped for funds tell us much about the deep, pathological needs of the state when it comes to "identity management". The Home Office has responded to the widespread hostility to the card by identifying different groups' needs and devising ways of subtly implanting the card and making it seem indispensables. As I have written many times, the primary motive is not to allow you to identify yourself, but to allow the state to identify you and furthermore track your life in the records accumulated by the National Identity Register.

Phil Booth of NO2ID may be right when he says in response to Hillier's latest idea that the government has reached the end of the road on the policy and that "the minister is indulging in wild fantasy and speculation", but he knows well how determined the Home Office is to get the universal ID card and if it does, as night follows day, police officers will eventually be allowed to demand to see someone's card on the street.

You only have to look at the abuse of Section 44 to understand that, or read this young man's story about being stopped by police with sniffer dogs on the way to work and being told that the fact that he had been searched would appear on a database, although nothing was found. Without protest we already accept incredible curtailment of our freedoms. Think how it will be with the ID card.

The particular gleam in the eye of Hillier and IPS officials at the moment is the prospect of putting an electronic identifier in a person's mobile phone - which they seem to have forgotten is one of the most frequently stolen items. Typically, this was presented as satisfying the needs of another social group - the poor. At a Social Market Foundation event recently, Hillier talked of the needs of the "socially disadvantaged" in her constituency who had no other form of identity documents.

In response to a councillor at the event who asked why the government kept on changing its argument for the ID card, she said that "9/11 has put the cast on the ID card", but that the card had always been a multifaceted project. Whatever that means, the government has failed to make the case for the card and every time it thinks of a new reason is soundly beaten by the logic of civil liberties groups. So now the policy is not to make the argument but to insinuate the card into national life. Well, at least we have a chance to say something about that in a few weeks' time.

o Following the success of an event last week to launch Keith Ewing's book on Labour's attack on liberties, it has been suggested that such an event would go down well outside London. If there are groups, who during the election campaign, would like to hear about the experiences of people who have fallen victim to New Labour's authoritarian laws, or from speakers of all persuasions who appeared at the Convention on Modern Liberty, let me know at henry.porter@observer.co.uk, and Professor Ewing and I will see if we can put something together.

Chronology of William Hague's statements on whether the billionaire had become a UK tax resident as promised

23 May 1999

After the first refusal to accept Michael Ashcroft for a peerage in 1999, Hague, then Tory leader, writes a letter to Tony Blair confirming Ashcroft is "non-resident for tax purposes", but adding: "He is, however, committed to becoming resident by the next financial year in order properly to fulfil his responsibilities in the House of Lords. This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."

21 July 1999

After Ashcroft issues a writ against the Times over its long-running campaign against his business dealings in Belize, Hague refers to the matter in his end of term address to Tory MPs at Westminster. He has supported the libel action and kept on Ashcroft as party treasurer. To applause, Hague says: "I am not going to allow people to be driven from positions in the party by smear and innuendo."

10 December 1999

In an interview in the Times about the end of the legal dispute between the newspaper and Ashcroft, Hague speaks about Ashcroft's public announcement that he will move back to Britain.

Hague, in Helsinki for a meeting with centre-right European leaders, says Ashcroft had always said in private that he intends to move back to Britain.

"But this is the first time he has said it in public. It does not change anything as far as I am concerned."

2 April 2000

Hague tells GMTV's Sunday programme that Ashcroft was joking when he said he wanted to be known as "Lord Ashcroft of Belize and somewhere in the UK" in an interview on 1 April.

Asked whether he would be happy with Lord Ashcroft of Belize, Hague said: "No, I think that was a little joke he was having yesterday, and should be taken as a joke rather than written up as a genuinely serious story."

Hague denies reports he called Tony Blair to "beg" him for a peerage for Ashcroft.

"Reports that I phoned to beg for a peerage for Michael Ashcroft are not true," Hague says. "I phoned him at Lisbon and many other places - he phones me at many other places. That is not an exceptional thing."

2 June 2009

Hague faces 17 questions from Jeremy Paxman on Newsnight about Lord Ashcroft.

Paxman: "Just one final point, in the current climate of suspicion about politics your deputy chairman Lord Ashcroft, a man whose peerage you lobbied for, saying that he would become resident in Britain for tax purposes, can you just tell us, is he resident in Britain for tax purposes now?"

Hague: "I've no reason to think that he's not complied with the requirement that he entered into ..."

Paxman: "Have you asked him directly?"

Hague: "I have discussed it with him and I have no reason to think he hasn't complied."

8 November 2009

Asked on the BBC's Andrew Marr programme whether Ashcroft now pays tax in Britain, Hague replies: "My conclusion, having asked him, is that he fulfilled the obligations that were imposed on him at the time that he became a peer."

Here is a transcript:

Hague: "I'm sure he fulfils the obligations that were imposed on him at the time he became ..."

Marr: "Have you asked him?"

Hague: "I have asked him."

Marr: "And?"

Hague: "Because I've been asked whether I've asked him before. My conclusion having asked him is that he fulfilled the obligations that were imposed on him at the time that he became a peer."

Marr: "So does he pay taxes in the UK?"

Hague: "Well that, well that, I imagine that was the obligation that was imposed on him."

Marr: "So you think he does?"

Hague: "So I think he's fulfilled what was asked of him."

Marr: "I don't understand."

Hague: "Well, you can't expect me to know every detail of somebody's tax affairs. But I have asked him and he has ..."

Marr: "But you must have asked him ... yes or no, surely?"

Hague: "I've asked him and he fulfils the obligations that were imposed on him ..."

3 March 2010

Hague is asked by Harriet Harman in the Commons: "What has happened to the tens of millions of pounds of taxes that the shadow foreign secretary promised would be paid by Lord Ashcroft?"

Hague replies: "If she wants to discuss the House of Lords, I am sure that she will want to explain the position of Lord Paul, who was made a privy counsellor after he bought 6,000 copies of the prime minister's book on courage. Never has so much been given for so few people to read so many words in vain. She might also want to explain why Labour took half a million pounds from a non-dom hedge fund manager called Mr Bollinger. Champagne socialism is alive and well in the Labour party, obviously."

3 March 2010

Hague says he only learned of the non-dom status of Ashcroft a few months ago. In an interview with the BBC's The World Tonight, he says he had not previously known the details of the peer's arrangement with the Cabinet Office.

Asked when he found out, Hague replies: "Over the last few months I knew about that."

18 March 2010

Hague admits he was wrong to say Ashcroft would pay tens of millions more in tax after the deal struck in 2000 allowing the Tory donor a seat in the Lords.

Speaking on BBC Radio 4's Today programme, Hague says it was an "entirely legitimate criticism" that the party had not revealed Ashcroft's tax status until this year despite concerted pressure - but says many other peers of all parties are non-doms and individuals have a right to privacy.

He says he went to Ashcroft "around the turn of the year" to tell him the pressure for the party to reveal his tax status had reached the point where he would have to go public.

"We were coming under so many questions about him that I said to him: 'Well, we are going to have to say.' And so we had that conversation and then he had a conversation with David Cameron and then he made his announcement."

Hague repeats his insistence that he "did not go into the detail" of the agreement that committed Ashcroft to be a resident in the UK and had not asked about the tax element "as far as anyone involved can recollect".

There were interesting choices of language during yesterday's Mayors' Question Time exchanges between Mayor Johnson, the Green Party's Jenny Jones and Tory statutory Deputy Mayor Richard Barnes (watch the webcast from around the 90 minute mark). Jones's question to the Mayor was:

Do you stand by your election campaign promise that only hotels and restaurants paying the London Living Wage would be promoted by Visit London ahead of the 2012 Olympic and Paralympic Games?

Boris replied:

I don't remember saying that we would not support any hotel that didn't have the London Living Wage. What I've certainly done is said that we'll work with the catering and hotel industry to make sure they, as far as possible, institute the London Living Wage.

The campaign promise Jones referred to was made at the memorable London Citizens' mayoral accountability assembly of April 2008. All candidates were asked to:

Work with London Citizens to ensure that London's hotels and hospitality sector pay a Living Wage by the 2012 Olympics and work with Visit London and other Tourist Guides to only endorse Hotels and Restaurants which are accredited Living Wage employers and sites.

Boris obliged - see my ropey video clip - to the surprise of many at the time. However, by August 2008 it was already clear that Boris's interpretation of the words "work with" was more flexible than it might have seemed. Earlier that month he had increased the LLW from £7.20 to £7.45 per hour, but in correspondence with Catersearch.com redefined his position regarding Visit London and the Olympics:

During my election campaign, I supported a list of proposals on the living wage that included this idea. However, further work in this area has made it clear that a positive approach of partnership with business to promote the London living wage is more appropriate, and likely to be more effective in achieving the key goal of the wider implementation of the living wage.

He took a similar line when responding to Jenny Jones yesterday.

I think people should be paid the London Living Wage. I think there is a balance to be struck, though. I think if we withdraw support for parts of the London economy at a very difficult time, I'm not certain that's the way to go.

Jones then raised the matter of his financial support for the prestigious SportAccord conference due to be held in the Park Plaza Hotel, Westminster Bridge next year (an arrangement that angered a rival hotelier, though that's another story).

Boris's mayoral decision says that SportAccord will be worth "in excess of £2 million" to the Park Plaza and that the LDA will put nearly £1 million towards meeting the cost. Yet it contains no requirement that the London Living Wage be paid to the hotel's staff or those of other contractors who might be engaged. Why hadn't Boris specified this?

He told Jones that he would "certainly look into that," though written answers to previous questions on the subject asked by Jones's Green Party colleague Darren Johnson show that he's made undertakings of this kind before. Last December, Darren Johnson asked:

Have you secured any initial commitments from companies involved with the SportAccord convention with respect to paying the London Living Wage?

Answer by Boris Johnson:

Not yet, but when negotiations take place with suppliers the London Living Wage will be a consideration where appropriate.

Only "a consideration where appropriate"? In January came a further question from Green Johnson:

Further to [my previous] question...will you secure a commitment from the Park Plaza Westminster Bridge hotel to pay all staff and contractors involved with the SportAccord convention the London Living Wage?

Answer by Boris Johnson

Discussions will be had with the Park Plaza Westminster Bridge, to seek commitment to pay staff and contractors involved with SportAccord the London Living Wage. It should be noted that the Park Plaza Westminster Bridge currently pay staff above the minimum wage with other staff benefits on top (e.g. meals and laundry).

That's the national minimum wage, a statutory requirement, and considerably lower than the LLW which reflects the higher cost of living in the capital. And finally, a third written question to complement Jenny Jones's verbal one of yesterday:

Further to [my previous] question, why was a commitment from Park Plaza Westminster Bridge to paying the London Living Wage not secured when the contract was signed in mid-November 2009?

I'm looking forward to the answer to that. I'm also looking forward to receiving more detail about the "£3 billion-worth of contracts of within the GLA Group," cited by Richard Barnes that, he said, "have within them clauses related to London's minimum wage."

Boris says that he favours Londoners being paid the LLW, and has encouraged employers represented by the British Hospitality Association to do so. But if a money-spinning, pre-Olympic venture such as SportAccord fails to enshrine the pledge he made to London Citizens two years ago, then his commitment to it will look a little weak.

Department of Health backs current policy of education and self-regulation, saying MPs' proposals are not strong enough

The government has today rejected a call from MPs on the Commons health select committee to crack down on alcohol advertising, including a pre-9pm watershed ban, instead backing a policy of education and self-regulation.

There was "some way to go" before the restrictions proposed by the health select committee should be considered, the Department of Health said.

"While the committee has drawn attention to an important issue from some emerging evidence on the potential harm to young people, there is some way to go before there is a strong enough case for the specific restrictions and controls the committee has recommended," said the DoH in its response today.

The DoH rejected the call for a pre-9pm alcohol ad ban as disproportionate and said that "given the current economic climate extensive regulatory interventions ... would most likely have a significant impact on the creative industries. It is not clear that this impact would be a proportionate or effective response."

Other restrictions recommended by the health select committee included stopping drinks companies from advertising in the media or sponsoring events involving sport or music if the audience is likely to be at least 10% people who are too young to legally buy alcohol.

The DoH said that there are already restrictions on the sponsorship sector and that "further restrictions are likely to have a significant effect on major events". The department also continued to back the current self-regulatory regime, which is enforced by the Advertising Standards Authority, which the select committee argued was not arm's length enough from industry.

"The government is strongly supportive of the current regulatory system and notes that appropriate levels of independence are already built into the system," the DoH said. "The government will continue to monitor the effectiveness of the UK's regulatory regimes ... especially with regard to the regulation of new digital media."

The health select committee also called for a ban on alcohol posters within 100 metres of schools. The DoH responded that the Outdoor Advertising Association has a charter that asks members not to run ads near schools.

To strengthen this the government has said that the ASA has "indicated" that it would "consider" complaints about ads too close to schools.

"We believe it's right that the more extreme recommendations on marketing restrictions have been rejected by government as the rationale behind them was less than clear," said Rae Burdon, the Advertising Association chief operating officer. "We understand the government will now conduct a further evidence review. While this means a continued debate, so long as that review is conducted both independently and professionally, we can hardly complain."

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A simple programming tool is helpful in understanding what's changed - but we really need some proper internet-enabled means of viewing bills, as MySociety points out

When programmers are working on code and want to see how the old and new versions compare, they use a program called "diff" to do a line-by-line comparison. It's quick, simple and can make the process of combining and reconciling two slightly different files much easier.

Alternatively, if you have ever wondered about the history of a Wikipedia page, you can see how changes have happened by choosing to highlight the changes. That's a diff. (Here's an example.)

Wouldn't it be great if Parliament could see that that's just what it needs to make Parliamentary bills more comprehensible?

OK, you could argue that the picture above isn't very easy to understand - and I'd agree. But that's partly because it's had to be taken from PDFs of the bills, which have then had to be processed to remove line numbers - not always successfully - and other strange formatting additions which are useful for humans, but not for computers.

But I've been trying to work out how much the digital economy bill has changed in its progress through the House of Lords. The answer: a lot (that's 263 differences in the bottom-left hand corner). But does it make much sense? Not really - the bill consists of lots of amendments to other acts, such as the Communications Act 2003, so it really is like trying to understand an operating system while only seeing a few of the programs. (The red rectangle on the right-hand side shows where the bill has altered; the picture is only a snapshot of part of it.)

More comprehensible bills that citizens can make sense of? That's what MySociety is calling for in its Free Our Bills campaign (hmm, snappy name - wonder where they got the idea?).

MySociety explains:

"The problem, to put it simply, is that the way in which Bills are currently published out is completely incompatible with the Internet era. As a consequence few people ever get to find out what a Bill says before it becomes law and binds us all. Bills are currently buried within the Parliamentary website, published in a hopelessly old fashioned way that makes them difficult to find, difficult to read and impossible to do anything clever with."

Though Parliament has improved the accessibility of bills, their presentation is still rooted in the world of print - more to the point, of print that gets scratched out with pens. It's all PDFs or very stilted HTML.

As MySociety says,

"It's time for Parliament to improve its act and start publishing these vital documents properly in the first place. Quite apart from the fact that we're a tiny charity without many resources to fix this information, you're paying for them to produce it in a uselessly old fashioned way. Unless Parliament produces better bills:

"You can't get an email alert to tell you when a bill mentions something you might be interested in.

"You can't find out what amendments your own MP is asking for, or voting on.

"You can't learn, or help other people learn, about the process by annotating them to explain what they're really going on about for everyone else.

"MPs and their staff can't receive services that would help them notice when they were being asked to vote on dumb or dubious things.

"You can't get a rounded view of how useful your MP is if you can't see their involvement with the bill making process."

The horrendous way that the digital economy bill is being hustled through Parliament, as though it were something that would spontaneously combust if it were to see too much debate, shows just how necessary this is. Parliament has been dragged, somewhat reluctantly, into the 21st century with theyworkforyou's reworking of Hansard; now we need the bills - which are the stuff of laws being made, and so important to democracy - to become more transparent too.

Academics have been suffering from the move to restructure universities into business enterprises for years

The Higher Education Council for England has just announced £500m worth of cuts in higher education. Everyone expects these to be only the beginning of a brutal squeeze in state spending on universities over the next few years.

But the cuts are already a reality. In my own university, King's College London, management is seeking to reduce salary costs by 10% in the next two years. Like all academic staff in the arts and humanities school, I have had my job declared "at risk of redundancy" as part of the effort to eliminate 22 teaching posts in the school. This has caused an international furore and great damage to the reputation of King's. Members of the University and College Union are currently voting in a strike ballot against the redundancies.

This conflict - and others like it at, for example, Leeds and Sussex universities - must be seen against the background of the neoliberal transformation of universities over the past three decades. This has involved the internalisation of the logic of competition, so that universities, departments and individual academics are all pushed to treat each other as rivals in the struggle for resources. The recently rebranded Research Excellence Framework - an Orwellian name if ever there was one - has been a key mechanism in this process.

This has gone alongside the restructuring of universities into business enterprises organised along managerial lines. Since 2003 the number of managers in higher education has risen by 33%, while academics have increased only by 10%. The metamorphosis of vice-chancellors into CEOs, expecting to be paid accordingly (as the figures published in Monday's Guardian show), is part of the same process. One of the driving forces of the staff rebellion at King's has been the anger provoked by this new managerial regime.

The rationale for this reorganisation is to a significant extent the reorientation of academic research to the direct benefit of business - a policy recommended by Richard Lambert, now director general of the Confederation of British Industry, in a review for the Treasury in 2003 and summed up by Charles Clarke when he was education secretary as "harnessing knowledge to wealth creation". How cutting back on higher education is supposed to achieve this objective is anybody's guess.

This points to the larger paradox of the cuts. They are intended to reduce the budget deficit, which has hugely increased thanks to the government rescue of the banks. Now the surviving banks are campaigning for the deficit to be cut by shrinking the public sector. But academics, along with other public sector workers, had absolutely nothing to do with causing the financial crash that necessitated the rescues. The cuts are a class project for displacing the costs of the economic and financial crisis onto those who produce and consume public services.

Central to the ideology of the neoliberal university is the conception of students as consumers whose needs are sovereign. This is no way corresponds to reality, since the most prestigious institutions (for example, the Russell Group) give priority to research, while poorer universities are required to teach unmanageable numbers of students. At King's we are expected to absorb cuts in staff but "to continue to improve the student experience".

Many students recognise these goals are mutually inconsistent. At Sussex University students have mounted occupations in support of staff opposition to the cuts. At King's students have been campaigning around the slogan "We support our teachers". Out of the solidarity that is developing between academics and students we may see the beginnings of a new and more democratic university system.

Spending cuts are not the way out of the financial crisis - taxing financiers' transactions is a fairer way to redistribute wealth

The US, UK, French and other governments have finally recognised the need to raise taxes on the financial sector, both on the banks' balance sheets and perhaps on financial transactions as well. Amazingly, the big banks have mostly gotten a free ride right through the financial crisis. Wall Street continued to pay itself mega-bonuses in 2008 and 2009, pocketing more than $20bn this past holiday season. Total Wall Street profits in 2009 are estimated at more than $55bn, a record, pumped up by cheap loans from the Federal Reserve to the banks that were lent onward at a significant spread.

The urgency of increased tax revenues is clear enough. The US budget deficit is around $1.5 trillion this year, more than 10% of GDP, and with prospects of $1 trillion a year deficits as far as the eye can see. The UK budget deficit is even more dramatic, at around 13% of GDP this year. As I wrote with George Osborne in the Financial Times this week, we should get started on deficit reduction already this year, especially given the continued turmoil in the global financial markets. We don't want to see a Greek-style funding crisis hitting the UK and US.

But neither the US or UK can close their huge budget deficits through spending cuts alone. The US could save a couple percent of GDP by ending the hapless wars in Iraq and Afghanistan, and by cutting other wasteful military spending, but these cuts are unfortunately not in the works. There is even less scope for cuts in non-military discretionary budget spending. Sectors such as education, roads, rail, water and sustainable energy need more rather than less public spending.

The Obama and Brown governments have suggested a tax on the banks' balance sheets, such as a tax on the banks' liabilities. Such a balance sheet tax is advisable, but not sufficient. It's time, too, to tax financial transactions as well, on currency, derivatives, and other financial assets. Derivatives markets, for example, have soared in size, without proper regulation, taxation, or discernible societal benefits, and arguably with huge social costs (as in the massively misguided market for credit default swaps). As the late Nobel laureate James Tobin argued almost 40 years ago, macroeconomic stability and microeconomic efficiency will both be enhanced by a tax on the financial casino.

The introduction of a financial transactions tax has been debated since Tobin first made the proposal. The case for a Tobin tax has grown stronger over time, as the motivations to raise revenues, restrain speculative trades and soak up excess trading profits all are stronger than ever. Moreover, the administrative capacity to levy and collect such taxes has also strengthened, as has the likelihood of reaching a trans-Atlantic consensus on introducing such taxes. The key point is that after more than 30 years of debating a financial transactions tax, it's time to try it.

The Robin Hood tax campaign, to levy a financial transactions tax and allocate a designated portion for global development assistance (as Tobin himself had proposed) therefore has enormous merit. As campaign leader Richard Curtis has noted, Tobin and Robin differ by only one letter, underscoring the sound provenance of the campaign ideas. Of all of the uses of government revenues today, the most urgent of all is surely to meet our commitments to the world's poorest people. Reducing our budget deficits is crucial. Closing the deficit of political will on urgent development aid is a matter of life and death.

The time has come to implement the Robin Hood tax. Ideally the new tax will be introduced both in the US and Europe. If the US delays, however, in response to the Wall Street lobby, then the UK and the rest of Europe should simply move ahead with the tax to get their own house in order.

The ahistorical David Cameron has no idea how much his association with Waffen-SS admirers has tarnished UK politics

Ian Traynor's balanced report from Riga about the Waffen-SS commemoration in Latvia is a reminder that Britain's Conservative party has not been adequately called to account for its links with extremists in eastern Europe.

There are unconfirmed reports that before deciding to open a joint shop with east European nationalist populist politicians, David Cameron ordered a full assessment from a Conservative expert with long experience in European politics. His dossier made clear that the Tories would be well advised to stay clear of alliances with either the Latvian For Fatherland and Freedom party or Poland's Law and Justice party (PiS), which had incorporated openly anti-Jewish politicians into its ranks even if top PiS leaders have publicly condemned antisemitism.

This week we can see the ugly face of the Conservative's foolish alliance. Even if no Tory MP was present to march in memory of the Waffen-SS alongside their Latvian allies, the grotesque nature of the ceremony mocks not just Jews but all who sacrificed themselves to defeat Nazism. As Efraim Zuroff, the head of the Simon Wiesenthal Centre, noted the event was deeply offensive. "These people were thinking they were fighting for Latvia but the real beneficiary of their service and their bravery was Nazi Germany."

Stalinism was cruel and Russia's occupation of Latvia in 1939 and the brutality of the Red Army as it raped its way across the Baltic states in 1944 and 1945 have scarred Latvian national memory. Five per cent of the Latvian population was deported to rot and die in Siberia under Stalin. Many Latvians fled to west Europe or North America rather than live under Soviet imperialism. But 90% of Latvia's Jews were killed by the Nazis with the active collaboration of Latvian recruits to the Waffen-SS local divisions. Many were youngsters conscripted with no choice. Others were volunteers. But all SS and other German soldiers who carried out the extermination of Jews were conscripts. Obligatory enrolment in the SS and other Nazi units has never been and cannot be an excuse for whitewashing the murder of Jews.

There is a deeper rightwing revisionism at play. Stalin's crimes are being elevated to a par with the exterminations of Jews by those who want to banalise or relativise the Holocaust and reduce its historical centrality to just another example of wartime mass murders. Stalin's famines of the 1930s or his deportations in the 1940s are held up as the right creates its own moral equivalence between Nazism and Communism. The latter was foul, evil and those who were Stalin and Trotksy's mouthpieces in European democracies have done lasting damage to the democratic left.

But Hitlerism's Holocaust converted an entire nation's engineers, chemists, railway systems, diplomats as well as the military and the police into an industrially organised network absorbing massive resources as it combed Europe to transport Jews from every remote corner of the continent to be put to death in Nazi extermination camps on Polish soil.

If history starts to absolve Nazism and the Holocaust as being on a par with the crimes of Stalinism and its cruelties, including in Latvia, then European democracy will take a major step backwards.

It is the ahistorical nature of David Cameron and William Hague that they have no understanding of the damage they have done to the good name of British politics by entering into an alliance with east European apologists for crimes committed in the second world war, provided those crimes were committed in the name of anti-Sovietism.

Russia today is a bully and an ugly nationalist power in the region with no interest in becoming more not less European. But Russian paranoia can only increase if European democracies get into bed with parties that justify the Jew-killing of the second world war because communism was as great if not a greater enemy than Nazism.

When this row broke out last summer Tory apologists such as Iain Dale, Stephen Pollard, and Dean Godson went into overdrive along with politicians such as William Hague and Daniel Hannan in denouncing reporters like the Observer's Toby Helm, the Guardian's Ian Traynor and the New Statesman's James Macintyre for revealing the sordid background of politicians David Cameron had chosen as his allies in place of mainstream centre-right European parties. They were accused of McCarthyism, smears and distorting the truth. With every passing moment it is the journalists who were right and the Conservative propagandists who were wrong.

This does not make the Conservatives weak on the common cause of combating antisemitism but it does call into question their judgement in choosing admirers of the Waffen-SS to be their new friends in Europe.

Once the election is over the Conservatives should rethink this alliance. When Latvian rightwingers commemorate the memory of the Waffen-SS in March 2011 it would be good for British politics if they marched alone and were no longer part of an alliance with a British political party.

Police investigating complaint about former Conservative party chairman's conduct during celebrations in Bury St Edmunds

Lord Tebbit, the former minister and Conservative party chairman, will face a formal police inquiry after a fracas with Chinese New Year revellers in his new home town of Bury St Edmunds, it emerged today.

A spokesman for Suffolk police said the Tory peer had been informed, as required by statute, that a complaint about his conduct while protesting about the event would be pursued by officers and a report would be compiled.

Caseworkers would then decide whether the matter should be passed to the Crown Prosecution Service.

The development will come as a shock to many in the party and in Bury St Edmunds, Suffolk, where it was largely assumed that meetings between Lord Tebbit and local council officials had resolved the issue.

In a letter he wrote after meeting the event organisers, Lord Tebbit, who moved to the town last year, wrote: "Peace and good community relations have been established between the indigenous population of Churchgate and the recent immigrants."

He said he was unaware that the event occurred in the centre of the town each year. "It was of course to be regretted that as a recent immigrant I had not been told of this, but then it is up to immigrants to remember that when in Rome."

While some considered the matter closed, the police are obliged to pursue complaints from the evening when Lord Tebbit was said to have to disrupted the dragon dancing due to the noise. He allegedly approached one man with a drum, and on receiving no satisfactory reply, placed his hands on the instrument. Later reports suggested he may have kicked out at one of the revellers.

A Suffolk police spokesman said: "A 78-year-old man from Bury St Edmunds has been reported for consideration of prosecution for a public order offence, after a complaint was received about the conduct of a man in Hatter Street in Bury St Edmunds on the evening of Tuesday 16th February. Inquiries are continuing."

o Evidence released today shows that Ashcroft's peerage was awarded on the basis that he would become a full UK taxpayer
o Ashcroft documents reveal concern over Tory's tax status
o Read the Cabinet Office letters on Lord Ashcroft

Lord Ashcroft's peerage was awarded on the basis that he would become a full UK taxpayer, relinquishing his "non-dom" status and providing Inland Revenue with proof that he was both UK resident and domiciled, according to explosive new evidence released by the government to parliament.

The political honours scrutiny committee (PHSC) sought repeated reassurances in 2000 that Ashcroft would move his tax affairs onshore, but finally agreed to award the peerage on the understanding that he would become a full UK taxpayer "at some stage".

Lady Dean, the first member of that committee to give evidence in public, today said that she was "shocked" to learn just three weeks ago that Ashcroft was still a non-dom, and does not pay tax on his international earnings.

The documents also reveal how the Conservative leadership, via their chief whip James Arbuthnot, argued vociferously that Ashcroft only needed to be resident in order to fulfil his obligations as a member of the House of Lords and that his domesticity, which would have incurred paying tax in the UK, was not necessary.

Arbuthnot argued that Ashcroft should have been able to keep his non-dom status just like other peers, including Labour's Lord Paul.

That evidence, contained in the decade-old letters published today by the Cabinet Office at the request of the public administration select committee (PASC), raises new questions about Hague's claim that he only found out about Ashcroft's non-dom status at Christmas.

The letters reveal how Sir Hayden Phillips, the senior civil servant whose job it was to sign off peerages, oversaw the key negotiations between the committee, which expected Ashcroft to pay full tax, and the Conservative party, who were arguing that he only needed to be a long-term resident and not a permanent resident, paying full tax.

Phillips insisted in his evidence to the committee today that he was not aware of the tax significance of the subtle shift. He blamed the political honours scrutiny committee for not being more explicit in their demands.

The deal for the peerage was eventually signed off referring to "long-term residence" instead of "permanent residence" suggesting the committee - and Phillips - did not understand that this would mean he could retain his non-dom status.

"This time our primary reservations in respect to Mr Ashcroft (as indeed to one other candidate also) were that, though proposed as a working peer, he would be unable to fulfil that function until he became a permanent resident of the UK - and so, in his case also, a UK taxpayer. It seemed to us that without such assurances, the appointment of anyone, and of Mr Ashcroft in particular, to a seat in parliament would give rise to highly critical and damaging publicity."

His letter crucially asks for the undertaking to be included in publicity material announcing the peerage. Had they not included it, the conditions of his peerage would have remained secret.

Anthony Merifield, secretary to PHSC, writes to Phillips arguing that the peerage should not be completed until the residency issue is settled.

"Until he becomes a resident there is no urgency in the issue of the letters patent and a writ of summons [awarding the title]." He added: "Indeed, to allow a peerage now would suggest that we could not police the undertaking."

"While it is for Ashcroft to decide how to notify his taking up permanent residence, a letter to the Inland Revenue which provides them with a firm date (and would include or lead to the submission of their forms IR Form P86, (Arrival in the UK) and IR DOM1 (Domicile)) would seem to be significant in discharging the assurance he gave in March. Thereafter we would not expect there to be any undue delay in the issue of the letters patent and Michael Ashcroft's being introduced in the house."

"You explained that Mr Ashcroft would complete Inland Revenue Form P86 (Arrival in the UK) giving as his reasons for taking up residence in the UK, the fact that he was to take up a seat in the House of Lords and that his contract for services to the various companies with which he is involved would be based in the UK. His income under those contracts would, therefore, be sourced in the UK and subject to UK tax.

"Mr Ashcroft does not believe that his domicile for tax purposes is relevant to the question of his peerage, having undertaken to be resident in the UK. Paragraph 3 of the Inland Revenue's guidance 'Coming to the UK' states that a person is treated as resident and ordinarily resident if he intends to come to the UK to live here permanently. Mr Ashcroft has said he will live in the UK indefinitely and will, therefore, be a long-term resident here."

Catto responds to Phillips expressing concerns about the omission of the tax issues.

"They [the committee members] are somewhat concerned that Mr Ashcroft does not apparently propose to complete the second of the two Inland Revenue forms mentioned in Anthony Merrifield's letter of 9 May to you. In their view the undertaking given by Mr Ashcroft did involve domicile as well as residence as defined by the Inland Reveue. (And from my own, admittedly inexpert reading of forms P86 and DOM1 it is hard to see how Mr Ashcroft could avoid filling in the second once he had completed the first.)"

Phillips responds to Catto arguing that the evidence he has seen suggests that Ashcroft is being asked to become resident in order to become a full working peer. It reveals he sought advice on the necessity of filling in the Dom1 form from the Inland Revenue and was told this was not a requirement until the end of the tax year. He also reveals that Arbuthnot argued that there were other "resident but non-domiciled" peers, including Labour's Lord Paul.

"He has provided me with copies of two letters (which I enclose), one from Richard Roscoe to Tina Stowell and one from Lord Thomson of Monifieth to the prime minister. These letters show that Mr Ashcroft was asked to give an undertaking to take up permanent residence in the UK. In order to be available in the UK to exercise the responsibilities of a working peer.

"The committee's view was that availability to sit in the House of Lords was the central issue and the undertaking Mr Ashcroft was asked to give was intended to satisfy the committee that he would be available.

"As someone who is resident and ordinarily resident for tax purposes, Mr Ashcroft will be able to sit regularly in the house and to exercise the responsibilities of a working peer. It is on that basis that Mr Arbuthnot does not believe that the question of domicile is or can be relevant to the fulfilment of the undertaking.

"In any event, my own understanding from independent enquiries to the Inland Revenue is that the Form DOM1 (Domicile) need not be completed until the tax return is submitted which for the current tax year could be as late as January 2002. While some people choose to submit DOM1 on arrival or shortly afterwards, the Inland Revenue would not require someone, who had not chosen to complete the form, to do so prior to the completion of their tax return at the end of the tax year.

"Mr Arbuthnot also pointed out to me that other working peers, including, he said, Lord Paul, are resident but non-domiciled for tax purposes and seem to be adequately fulfilling their responsibilities. He is concerned about the appearance of inequity in the treatment of Mr Ashcroft in comparison with other non-domiciled working peers."

The scrutiny committee writes to Phillips to approve the formalisation apparently on the basis that Ashcroft would become domiciled later on. But they request that the reference in the letter to be sent to Arbuthnot remove the following reference form

Correspondence detailing discussions with the political honours scrutiny committee following the announcement of Lord Ashcroft's peerage in March 2000

o William Hague wrangled for months over the deal
o Honours scrutiny committee wanted to see proof Ashcroft was becoming full UK taxpayer
o This never arrived - but deal was waved through anyway

The row over Lord Ashcroft's tax status exploded again today when new documents revealed the full extent of concerns held by the honours committee over the Tory donor's tax status.

Papers published by the Commons public administration committee show that senior Tories led by William Hague, the then-Conservative leader, wrangled for months over the details of the deal. They also show the political honours scrutiny committee, in charge of overseeing his bid for a peerage, wanted to see proof that he was becoming a full UK taxpayer before he took his seat in the Lords. This never arrived but, after further submissions from the Tories, the deal was waved through.

On a day of fast-moving developments:

o Hague admitted he was wrong to declare Ashcroft would pay "tens of millions" of pounds more in tax as a result of the deal struck in 2000 to allow the Tory donor to take a seat in the Lords.

o Lady Dean, a member of the body that oversaw the peerage bid, told the scrutiny committee that she and her colleagues understood that Ashcroft would not take up his peerage until he was permanently resident in the UK. "It looks like the undertakings were not carried through," she said.

o Sir Hayden Phillips, the senior civil servant who shepherded the peerage through, came under pressure to explain why he had allowed the peerage through despite the honours committee's reservations.

Today's documents cast new light on the tortuous negotiations over Ashcroft's peerage.

In a letter on 12 April 2000, two weeks after Ashcroft's peerage was announced, the honours scrutiny committee (through its secretary, Sir Anthony Merifield) said he should not be allowed to take up his seat in the Lords until he became fully resident. "Indeed to allow a peerage now would suggest that we could not police the undertaking."

In another letter, on 9 May, Merifield asked for evidence from Ashcroft of the IR DOM 1 form confirming he had moved his tax affairs to the UK.

Later Phillips appeared to accept the view of the then-Tory chief whip, James Arbuthnot, that Ashcroft did not need to become domiciled to take up his peerage. The honours committee on 22 June said it was "somewhat concerned" that Ashcroft had not completed the IR DOM 1 form, and asked for further clarification. But Ashcroft and Arbuthnot told Phillips that other peers including Labour's Lord Paul were also non-doms, and that Ashcroft need not complete DOM 1 until the end of the tax year. This was enough to persuade the honours committee, which accepted that Phillips could go ahead and process the peerage.

Gordon Prentice, a member of the administration committee, told Phillips he had accepted "hook, line and sinker" assurances from Arbuthnot, who took part in the negotiations, that domicility was not an important issue.

Phillips says he wasn't there to interpret Ashcroft's precise tax status. But he said the final wording agreed between the honours committee and the Tories should have been clearer. "I acknowledge that was in hindsight a mistake in the process," he said.

Hayden conceded there had been no one to "police" Aschroft's undertakings to ensure "the full set of reassurances" were followed through.

The Cabinet Office papers revealed by the BBC today show that Arbuthnot told officials that Hague was "satisfied that the action adequately met the terms of Mr Ashcroft's undertakings" in July 2000.

In an interview with Radio 4's Today programme this morning, Hague admitted he was wrong to predict in a letter to Tony Blair that if Ashcroft became a peer it would "cost him and benefit the Treasury tens of millions of pounds a year in tax".

Hague said: "The one thing I will concede which I think in retrospect was a mistake was to say tens of millions, because it may have cost him millions, it may cost him millions in the future - we don't know.

"None of us can know other than him and the tax authorities what it has cost. But it was still an important change for him to go from being non-resident in the UK to being resident and I concede that point."

Ashcroft revealed earlier this month that, despite becoming a UK resident under the deal, he remains "non-domiciled" for tax purposes, meaning he does not pay UK tax on his overseas earnings.

Hague approved the deal at the time but insisted it had never concerned tax matters. He told Today that he became aware at the beginning of this year of Ashcroft's precise tax status - before the Tory leader, David Cameron, was informed.

Hague repeated his insistence that he did not "go into the detail" of the arrangement at the time and said that - 10 years on - he had not been asked about the tax element "as far as anyone involved can recollect".

"I made clear to James that I was going to be satisfied with any agreement which implemented the original undertaking and which the government officials dealing with it and the honours scrutiny committee were happy with."

The business secretary, Lord Mandelson, said: "I don't know what sort of hold Lord Ashcroft has over David Cameron that he could not find the backbone, the bottle, to ask the relevant questions. In my view, that says rather a lot about David Cameron."

Mandelson said the leaked document showed Hague and Cameron had been "economical with the truth" and had not had "the courage to stand up to Lord Ashcroft" over his tax status.

Chris Huhne, the Liberal Democrat home affairs spokesman, told the BBC Hague was "completely unfit to be foreign secretary". He said the Tory frontbencher was complicit in "a cynical cover-up" with Ashcroft over his non-dom status. The Tory attitude was "tax is for the little people, and the big people, if they are giving enough money to the Conservatives, can be let off paying tax".

Both Hague and Ashcroft declined to attend this morning's inquiry by the Commons public administration select committee.

Ashcroft has given more than £4m to the Tories since Cameron became leader in 2005, directing the funds at the key marginal seats that the party needs to win to gain power.

The Independent reported today that a BBC Panorama investigation involving interviews with politicians and businessmen in Belize and the Turks and Caicos islands, where Ashcroft has business interests, had been put on hold.

A BBC spokesman told the Independent: "The programme is not on the schedule at the moment. We do not know when it will be aired." BBC sources said lawyers had become involved.

o Last-ditch talks under way between BA and union
o Cabin crew due to begin three-day walkout on Saturday

A three-day strike by British Airways cabin crew is still planned for this weekend but last-ditch peace talks are continuing between the airline and union.

BA's chief executive, Willie Walsh, met the joint general secretary of the Unite trade union, Tony Woodley, this morning but they failed to reach an agreement. It is understood that Walsh submitted a new offer but Woodley raised strong objections. However, Woodley has returned to the TUC for more talks after discussions with representatives of Unite's cabin crew branches, Bassa and Cabin Crew 89.

Walsh and Woodley have been holding discussions at the headquarters of the TUC in central London. If there is no breakthrough this afternoon it is likely that the first walkout by BA cabin crew in 13 years will begin on Saturday.

BA has pledged to fly 65% of its passengers to their destinations by using a fleet of chartered jets and 1,000 volunteer cabin crew.

Earlier this week, Woodley said Unite would suspend the strikes if BA put a previous formal offer to the union back on the table. BA had withdrawn the offer last Friday after Unite set strike dates for the three-day walkout starting on Saturday, and a further four days of industrial action starting on 27 March.

Representatives of Bassa had warned that members were unlikely to accept the offer anyway. It included a three-year pay deal and the partial repeal of staffing cuts that triggered the dispute.

Walsh had indicated that BA was unlikely to put the same offer back on the table and would present a tougher one instead. That appears to have happened this morning, with Walsh claiming the dispute has already cost BA nearly £30m that now needs to be reclaimed through any future agreement.

o See John Harris, Nick Cohen and Jackie Ashley discuss the forthcoming election campaign
o Click here for tickets

On Tuesday 20 April 2010 at 7pm, Politics Weekly will be recorded in front of a live studio audience in Birmingham, with a panel of our top commentators.

John Harris, Nick Cohen and Jackie Ashley will be on the panel as our politics podcast continues on the road in the run-up to the election.

Come along, pitch questions to our panel and hear what they have to say about the key issues as Britain goes to the polls.

Tickets are £5. Click on this link to buy a ticket and secure your place.

The event takes place in Muirhead Lecture Theatre at the University of Birmingham at 6.30pm for a 7pm start.

John Harris is a journalist and author, who writes regularly for the Guardian about a range of subjects including politics, popular culture and music.

Nick Cohen is a columnist for the Observer and the New Statesman.

nickcohen.net

Jackie Ashley is a Guardian columnist and political interviewer.

The roadshow will travel to London in May. Further details will be posted on this blog soon.

We have turned our backs on London's main waterway for too long. Let's open up access to the river before the Olympics

London has been described as a world-class sustainable city but its main artery, the river Thames, is largely ignored. It may form a spectacular backdrop, but please don't fall in because no one is likely to be able to rescue you. Access to the Thames is surprisingly difficult: many ancient stairways are blocked off and hardly any slipways are left open.

The Vikings had no problems making the most of the Thames. Each high tide brought the perfect opportunity for a shopping trip to London. They could even row up the river Lea for a quick bit of pillaging. Today, they'd find the trip rather more of a challenge and would probably get arrested trying to tie up anywhere in central London. We have been turning our backs on the river for decades as we allow exclusive flats to line its banks. As John Vidal wrote in a brilliant article in 2006, London's planning system has simply allowed developers to build into and along the river banks for the rich to stare at a barren river.

It hasn't gone without challenge. Some of us who love London's rivers formed the Thamesbank Trust to try to help make the most of the river for all of us. Thamesbank champions the inclusion of river policies (known as the Blue Ribbon network) in the London Plan, and we are fighting to ensure they remain in the revised plan this year. But in many ways, we have been swimming against a tide of ignorance.

According to the Gravesham councillor Conrad Broadley, who is a Thamesbank Trust member and passionate about the river Thames, there is at the moment practically nowhere for a boat to be launched by the public. Likewise, the only walk-on walk-off facility for the public to land is St Katherine's Dock in London, which means any visitors tend to sail on by. But with a bit of drive and imagination, the waterfront from Dartford through to Gravesend could once again become a vibrant boating destination with a heritage to be truly proud of. Conrad has listed many facilities we could make use of along the lower tidal Thames, especially the miles of sterilised wharfs that could become home to historic vessels and ships of interest.

But it is not all doom and gloom. Gravesham Council have recently proposed an exemplary town pier, highlighting that, for the first time, people of all abilities and ages will be able to access boating. The pier will be multifunctional, as it will host clippers, accommodate the Gravesend to Tilbury ferry, historic ships such as the Balmoral and Waverley plus Thames sailing barges will be able to pick up tourists. At least international visitors may find the Thames welcoming.

People who live and work on the Thames know the value of being so close to nature, often right smack bang in the heart of London. It is them who help protect our marine heritage, from keeping boatyards open to living and working on traditional boats and ships and campaigning for better infrastructure. They also save lives. At Kingston-upon-Thames, a good friend who is threatened with eviction from her moorings has recently helped police to rescue a drowning woman.

With the 2012 London Olympic games, we have a chance to seize a big opportunity in opening up the river Thames and the river Lea for all of us. We need to get people to re-invade Viking-style, but this time with support from the top. Nick Clegg has stated that old shipyards can play a pivotal role in building wind turbines, and the Environment Agency has identified great potential for small hydropower sites along the Thames. Let's see this happen and let us celebrate these achievements to the world. When 2012 comes along, a barren, stinking river won't make the grade unless we want the world to compare our treatment of London's waterways with Beijing's air pollution problem.

o This article was commisisoned following a suggestion by the author in a You tell us thread. The author posts under the username BlueCloud

Lord Clement-Jones, co-sponsor of controversial site-blocking amendment, is partner in law firm with content-industry clients

The Liberal Democrat peer whose co-sponsored a controversial amendment to the digital economy bill has defended his failure to disclose, during the House of Lords debate, that he is a partner in a law firm with close ties to the content industry.

Lord Clement-Jones is a partner at DLA Piper, which has worked closely with the FA Premier League to clamp down on websites offering live coverage of football games without the organisation's permission, and also advised Universal Music about its digital music plans. The amendment he moved could have resulted in YouTube being blocked.

While he has notified the House of Lords of his work with DLA Piper in the register of interests, the chamber's code of practice also states that a member must "declare when speaking in the House, or communicating with ministers, government departments or executive agencies, any interest which is a relevant interest in the context of the debate or the matter under discussion". Clement-Jones, as reported in Hansard, did not mention his work at DLA Piper when he moved his amendment with a fellow Liberal Demcrat peer, Lord Razzall, earlier this month.

Speaking to the Guardian, however, Clement-Jones said it would be "completely ludicrous" for him to declare an interest before every debate which might touch upon the activities of DLA Piper's clients. "When did you ever see a partner in a law firm declare their partnership before the beginning of the debate?" he said.

"Do you know how many clients we have in DLA Piper? Thousands upon thousands. We have 70 offices across the world, we act for every side of the argument: for content providers, internet service providers, technical companies who provide the hardware, software, a massive range. It would be completely ludicrous.

"I am not particularly sympathetic to the idea that I have got to stand up and tell everybody that I am the partner in DLA Piper every time I open my mouth."

The amendment to the bill - amendment 120A - tabled by Clement-Jones and Razzall was designed to replace the controversial clause 17, introduced at the last minute by Lord Mandelson and designed to give the government sweeping powers to change copyright law to deal with future forms of online piracy.

The two peers decided instead to focus on the blocking of access to websites and other services that store unlawfully copied material on the web. Privacy campaigners, however, suggested that could lead to ISPs blocking access to sites such as YouTube.

It then emerged that the wording of the amendment was very similar to a draft proposal by the BPI, the music industry association. Clement-Jones told the Guardian, however, that there is nothing unusual in peers tabling amendments from lobby groups if they believe they have merit.

"How many amendments did I put forward in the bill? Probably a hundred or so from the Lib Dem benches," he said. "They came from Which? They came from the BPI, they came from ISPs, they came from Sky - people draft amendments and you put them down and you see whether they fly or not."

In fact, the amendment was not included in the bill when it completed its third reading in the House of Lords on Monday. The government has instead decided to draft a new section to the act to deal with so-called cyberlockers and other websites that store unlawfully copied material as part of the pre-election "wash-up" process under a deal between digital Britain minister Stephen Timms and shadow culture secretary Jeremy Hunt.

The move has dismayed campaigners who have been fighting hard for a proper debate over the more controversial aspects of the digital economy bill. Already more than 6,700 people have emailed their MP to demand a democratic debate on disconnection, according to Jim Killock, executive director of the Open Rights Group, quoting figures from campaigning website 38Degrees.

"There is a massive groundswell of opposition to extreme laws being rammed through Parliament without debate," said Killock. "People are angry with lobbyists writing our laws and with disconnection being proposed as a punishment. MPs need to give this Bill the democratic scrutiny it deserves."

In fact, Clement-Jones expressed surprised at the scrutiny which the bill has received, some of it not altogether pleasant.

"People have threatened to castrate me for God's sake," he said. "When I looked on Sunday someone said they were going to nail Lord Razzall's and my testicles to the door. That's what it said on the internet.

"It's pretty unpleasant and of course it's all done anonymously. You cannot expect me to be that sympathetic with some of those people."

People have to ask what all the fuss was about.

So said William Hague this morning when for the first time in 10 years he chose to answer fully rather than avoid questions about the friend, ally and multi million pound Tory donor who he put in the House of Lords.

Mr Hague insisted that Cabinet documents leaked to the BBC which outline the negotiations that led to that peerage proved that there was "no secret Tory deal" and that the hurdle that Ashcroft had to cross to become a peer was "always about him becoming resident" - not, in other words, about his tax status.

The fuss is, and will continue to be, about the funding of British politics and not the precise tax status of members of the House of Lords.

Ashcroft has boasted that he might be this country's largest political donor. He has said that his heart is in Belize along, of course, with many of his millions. It was, therefore, inevitable that questions would always be asked about him and his role.

What's more David Cameron has called for an end to the perception that political donations can buy honours, favours or position and he's argued for transparency.

Only now - under pressure from Freedom of Information - are we seeing a steady flow of information which has been held behind closed doors for so long.

For 10 years William Hague has known that Lord Ashcroft had no intention of becoming a full UK taxpayer merely to satisfy the demands of his political enemies.

This despite the fact that, as Leader of the Opposition, Mr Hague had written to Tony Blair in 1999 to say that:

"Mr Ashcroft is...committed to becoming resident by the next financial year in order properly to fulfil his responsibilities in the House of Lords. This decision will cost him (and benefit the Treasury) tens of millions a year in tax yet he considers it worthwhile."

This morning Mr Hague conceded that promise to pay tens of millions more in tax should, perhaps, not have been made and might well not have been met.

How then could the former Tory leader and his successor, David Cameron, claim that they only finally learnt that Ashcroft was a "non-dom" in the past few months?

Simple - they never demanded the answer about his current tax status since they regarded it as a private matter and were satisfied that, despite claims to the contrary, Ashcroft had done all that had been asked of him.

It's clear that Hague deeply resented the fact that his friend was initially blocked for elevation to the Lords.

Today's documents confirm that in order to secure a peerage Ashcroft promised to become a "permanent resident". In negotiations spanning from May to June 2000 he persuaded officials from the Political Honours Scrutiny Committee and the Cabinet Office that he did not need to become a full UK taxpayer.

He could, instead, become a "long term resident" paying tax here on his UK but not his worldwide earnings. Hague was told all of this.

It's also clear that some, perhaps all, members of the Scrutiny Committee wanted Ashcroft to go further - by becoming a full UK taxpayer - the course implied in Hague's letter to Blair.

Ever since Ashcroft has told people in private that his tax status is none of their business; pointed out "non-doms" sit on Labour's benches in the Lords; he's given assurances that he's met the undertakings asked of him; and insisted that he would not give in to pressure from his enemies and what he describes as "the left wing media".

The result has been that in public the Tories have looked evasive and secretive about their principal funder - in other words "the fuss" Mr Hague dismissed this morning which has threatened to undermine David Cameron's four year mission to "decontaminate" the Tory brand.

The Tory leader's allies say that he deserves credit for reducing his party's dependence on Ashcroft and for, eventually, insisting that he reveal his tax status. They now demand that Labour reveals who are its "non-dom" donors and why Gordon Brown made Lord Paul - a "non-dom" - a Privy Councillor.

The moral of the story is that rather like MPs when it came to their expenses, Messrs Hague, Ashcroft and Cameron did not foresee the impact of Freedom of Information and the fact that it forces out into the public domain things that politicians would prefer never saw the light of day.

The emasculation of our MPs and the expectations we heap on them make for robotic, charisma-free followers of the party line

Certain jobs hold a naive mystical allure that tends to be shattered after spending a few weeks pointing a documentary film camera into their daily crevices. Any daft lingering teenage fantasies about the occupational upsides of being a male porn star were put to bed last year after passing some time on a Los Angeles set (where men are an underpaid, emasculated, irrelevance burdened by unrealistic expectations). Visions of being a heroic war correspondent were laid to rest when Newsnight called my bluff and asked if I'd go to Iraq - mid-invasion. And now, to this cursory list of jobs that are appealing only in theory, can I add that of being a member of parliament.

On paper, not a bad old job. The chance to make a real difference to people's lives, fingers nearish the levers of power, surrounded by an infectious campaigning zeal, a tribal clubbiness, first-class travel, and sanctioned puerile jeering of your competitors every week. But having spent a few months filming with nine MPs who are standing down - for a BBC 2 documentary, The People's Politician - the allure of the green benches has all but dissipated. And MPs themselves seem to agree.

The mass (and unprecedented in modern times) exodus of more than 140 MPs at the next election is telling. Many of them are untainted by the expenses scandal and have simply had enough of being a politician. A poll commissioned for the documentary further reveals the depths of the darkness felt by MPs. A surprisingly high number of politicians - around 130 - took up the chance to confidentially reveal how they are feeling. And what they're feeling is enough to warrant a mass referral for cognitive behavioural therapy. Eighty per cent feel they are hated as a group by the public, around a quarter would not go into politics if they were starting again, 40% said their work sometimes left them feeling depressed, and the same proportion admitted they "always" or "often" exceed the government's recommended weekly alcohol limit.

What underpins this existential ennui is perhaps a sense that we've lost any realistic notion of what we want and expect from our (now neurotic) MPs. We deluge them with the sorts of banal demands that would be obviated by bothering to open the Yellow Pages. My favourite was the former Northern Ireland minister Michael Mates being requested to clear the mosquitoes from a lady's pond. We expect them to be social workers and statesmen. The job description is all over the shop. We project a puritanicalism that most of us don't adhere to, at the expense of deterring the maverick: it's hard to see the self-flagellating prostitute-reclaiming, yet great-statesman, Gladstone making it to three terms as PM with today's Sunday papers. And we jump on any expression of honest opinion that deviates from the party line to dramatically expose "rifts" - ensuring that MPs become robotic, charisma-free interviewees.

It's deeply uncool to say so in this climate, but once we moved beyond that initial knee-jerk roboticism in interviews, I rather grew to like the politicians we filmed (eight of the nine would pass the go-for-a-pint-with test) - and, shockingly, even came to admire them for tackling their workload.

But let's not get carried away. Some are no doubt lying, pompous gits. And the ways of Westminster itself, which emasculates the power of many an MP, must share responsibility for the sorry state that politicians feel they are in - 37% felt they had little or no power. One confided to the survey: "It is, above all else, totally frustrating: a parish clerk has more power."

The emasculation and expectations might not be on a par with that of the Los Angeles studio stud. But with the impending loss of first-class travel, who on earth would want to be an MP now?

Memo detailing discussions with the political honours scrutiny committee following the announcement of Lord Ashcroft's peerage in March 2000

Bitter dispute with committee handpicked by prime minister to oversee intelligence services

The government is locked in a serious and bitter dispute with the parliamentary body set up to monitor MI5 and MI6 over the guidelines covering the torture and abuse of detainees held abroad, the Guardian has learned.

The dispute, compounded by a row about plans for more effective overall scrutiny of MI5, MI6 and GCHQ, has added significance since it has been sparked by a group of senior MPs and peers handpicked by the prime minister.

In a surprise move, the government is refusing to publish criticisms of new guidelines on interrogating prisoners, notably terror suspects, drawn up by the intelligence and security committee, the ISC.

A Whitehall spokesman said the government welcomed what he called the "critical contribution" of the committee in reviewing the guidance. He described it as "comprehensive and insightful", but it had "raised a number of issues that need further consideration".

The committee, chaired by the former Foreign Office minister Kim Howells, said its review of the guidance on handling detainees was sent to Gordon Brown on 5 March but publication was a "matter for the prime minister".

The ISC has been under fire for being too subservient to the security and intelligence agencies and to the prime minister, who chooses its members and has a veto over what the committee can publish.

However, the Guardian has learned that MPs and peers on the committee - perhaps stung by recent criticism - have expressed serious concern to Gordon Brown about the lack of clarity and "ambiguities" in the guidance for MI5 and MI6 officers operating abroad.

The Foreign Office said yesterday that Britain had to continue to work with foreign agencies in the fight against terrorism, even if they do not share UK standards on human rights. It said in its latest annual report on human rights that the UK could not afford the "luxury" of co-operating only with agencies in countries which did not abuse or torture detainees.

It said British agencies tried to minimise the risk that detainees held overseas were mistreated, but it was not always possible to "reduce the risk to zero". The Foreign Office report said it was ultimately for ministers to decide whether the needs of national security outweighed concerns about possible mistreatment.

In its latest annual report, published today, the ISC also sharply attacks the government for rejecting its demand for more independence, specifically greater control over its expenditure and separation from the Cabinet Office, which oversees the work of the intelligence agencies on behalf of the government.

"Separation and independence are the key issues", said Howells. "We are therefore surprised and disappointed that the government's response to our report has failed to respond positively and kicks the issue into the long grass."

He added: "We now find ourselves in an inappropriate position whereby we sit within a government department which has a significant role in the UK intelligence community which we also oversee. The fact that the Cabinet Office also decides and allocates the committee's budget and employs our staff is another conflict of interest."

Andrew Rawnsley's new book elicits more detail than the Chilcot inquiry

Andrew Rawnsley should have been put in charge of the Iraq inquiry. I've only just started his 800-page book, The End of the Party, but I've already picked up three key facts about Tony Blair's relationship with George Bush that haven't emerged from the Iraq inquiry hearings. Many of the figures interviewed by Rawnsley also gave evidence to Sir John Chilcot and his team. But Rawnsley seems to have asked the more searching questions.

Here are the revelations that struck me.

1. Blair told Bush: "Whatever you decide to do, I'm with you."

The inquiry has heard about the private letters that Blair sent to Bush in 2002. Alastair Campbell told Chilcot that the letters were "very frank" and that the central message was, in Campbell's words: "We share the analysis, we share the concern, we are going to be with you in making sure that Saddam Hussein is faced up to his obligations and that Iraq is disarmed." But the letters have not been published and the precise contents remain a secret.

Rawnsley, though, has published a direct quote from one of the letters. Here's the relevant extract from his book.

Towards the end of July [2002], Blair did write a letter to Bush "really making the case for going down the international route" to deal with Saddam ...

Yet again, though, Blair had emphasised his "yes" at the expense of the "buts". The July note began: "You know, George, whatever you decide to do, I'm with you."

When [Sir Christopher] Meyer [Britain's ambassador to the US] learnt of it, he rang [David] Manning [Blair's foreign policy adviser] in horror. "It's a brilliant note except for this bloody opening sentence: 'Whatever you do, I'm with you,'" the ambassador expostulated. "Why in God's name has he said that again? He's handed Bush carte blanche."

Manning sighed down the phone: "We tried to stop him. We told him so, but he wouldn't listen. That's what he thinks."

A footnote explains that the information in this passage came from interviews with Manning and Meyer.

When Blair gave evidence to the inquiry he said he had always been quite open about the fact he supported Bush in his determination to deal with Saddam. But I don't remember him ever saying in public that he would back Bush "whatever" Bush decided to do. As blank cheques go, they don't get much blanker than that.

2. Blair did not tell his aides much about his private talks with Bush at Crawford

A crucial meeting between Blair and Bush took place in Crawford, Texas, in April 2002. The two leaders spent a lot of time talking alone and what they said to each other has been the subject of considerable speculation. Meyer told the inquiry that to this day he still did not know "what degree of convergence was signed in blood" during these private exchanges.

In his evidence, Jonathan Powell, Blair's chief of staff, said that Meyer was wrong to suggest that there was any mystery about what was agreed.

"I was at Crawford, David Manning was at Crawford, Christopher Meyer was not at Crawford. He was at Waco, about 30 miles away," Powell told the inquiry. "The prime minister gave us an account of his conversation with the president the previous evening ... There was no undertaking in blood to go into war on Iraq."

But Rawnsley has got a rather different version of what happened. He says Blair did not give his aides a full account of his private conversations with the president.

The two men [Blair and Bush] were alone for several hours. "It sent Jonathan [Powell] and David [Manning] mad" because they could not be sure what Blair was signing up to in the absence of any advisers or officials. That was made worse by his reluctance to properly debrief them afterwards. "He'd drive the foreign policy people nuts because he wouldn't give them a readout." When asked by Manning and Powell what he had said to Bush, Blair would shrug: "You know, I can't really remember." It was "partly because he wanted to keep it tight and partly because he just couldn't be bothered".

Rawnsley attributes these quotes to named sources. The "drive the foreign policy people nuts" quote came from an interview with Tom Kelly, Blair's press secretary. The "I can't really remember" quote came from interviews with Manning and Powell. And the "wanted to keep it tight" came from an interview with Powell.

So, according to this version, Blair had a discussion with the most powerful man in the world about going to war and later claimed that he could not really remember what they said. Doesn't sound too good, does it?

3. The Americans did not think the British had attached conditions to their support for an Iraq war

The inquiry has spent some time trying to establish whether Blair attached any conditions when he told Bush at Crawford that he would support action against Saddam. A Cabinet Office paper written in July 2002, which was subsequently leaked, said there were conditions. It said Blair had agreed "to support military action to bring about regime change, provided that certain conditions were met: efforts had been made to construct a coalition/shape public opinion, the Israel-Palestine crisis was quiescent, and the options for action to eliminate Iraq's WMD through the UN weapons inspectors had been exhausted."

But Rawnsley says the Americans did not come away from Crawford thinking British support was conditional.

"I don't remember any quote conditions that were outlined at that meeting," says Andrew Card, Bush's chief of staff. Neither did Colin Powell [the then-US secretary of state]: "It was always a given that Blair would back us militarily, should it come to war in Iraq, so far as I was concerned. Right from the start. He did not attach any conditions to that support. Or none that I can recall anyway."

The Card quote comes from an interview with Rawnsley. The Powell quote comes from Anthony Seldon's book, Blair Unbound.

The inquiry has been trying to establish how much influence Britain had over the US. Blair argued that being close to Bush gave him more leverage than he otherwise would have had. Judging from some of the questions they have been asking, Chilcot and his colleagues have their doubts about this. Rawnsley's revelations will make them even more sceptical.

Palestinian president appeals to EU foreign policy chief to pressure Israel over housing settlements

Israel faced new international pressure over the deadlocked Middle East peace process today with a visit by Lady Ashton, the European Union's new foreign policy chief, to the blockaded Gaza Strip controlled by the Islamist movement Hamas.

Ashton was touring United Nations offices, schools and refugee camps but had no plans to meet representatives of Hamas, the Islamist movement that controls Gaza, in line with a long-standing boycott by the EU and US.

Minutes after she arrived, a rocket fired from Gaza killed a Thai farm worker in the southern Israeli village of Netiv Ha'asara. Israel Radio reported that responsibility for the attack had been claimed by the radical Palestinan group Ansar al-Sunna. Hamas has tried to enforce a de facto ceasefire since last year's war.

Mahmoud Abbas, the Palestinian president, asked Ashton for EU intervention to put pressure on Israel to freeze building in the settlements and Jerusalem. Earlier she held talks in Egypt, Lebanon, Syria and Jordan and tomorrow will be in Moscow to join a meeting of the Middle East quartet - Hillary Clinton for the US, the UN's Ban Ki-Moon, Russian foreign minister, Sergei Lavrov and Tony Blair, the quartet's special representative.

Ashton is one of the most senior western political figures to visit Gaza since Hamas took power. Only two EU foreign ministers have been to Gaza since last year's war. Foreign officials are regularly refused entry by Israel or stay away because their governments do not recognise Hamas. The EU is the largest contributor of aid to the Palestinians, delivering EUR1bn (£890m)a year, and is often described as a "payer but not a player" in the Middle East.

Under heavy pressure to show her mettle after criticism of inexperience and a poor start to her high-profile job, Ashton has said she would push for the launch of Palestinian-Israeli "proximity" talks as a prelude to formal negotiations. But diplomats admit they do not know how to get from indirect to direct talks, let alone how to break the current impasse caused by the East Jerusalem row.

The UN says the blockade of Gaza has left hundreds of thousands living in poverty. The head of the UN's refugee agency for Palestinians (UNRWA) in the Gaza Strip, John Ging, said Palestinians were hoping for a single outcome from Ashton's visit - a lifting of the Israeli siege.

Her arrival in the Middle East comes after the row last week between Israel and the US, following Israel's announcement of plans to build 1,600 homes in the occupied West Bank.

The decision, which was announced during the visit of the US vice-president, Joe Biden, was described by one of Barack Obama's closest aides, David Axelrod, as an affront to the US that could undermine peace efforts in the Middle East.

Last night the US president said Jerusalem's new settlement homes "weren't helpful" in carving out a peace between Israelis and Palestinians, but stressed Washington remained a committed ally of Israel.

"Friends are going to disagree sometimes," he told Fox News.

Last night Top London Blogger Chris Underwood attended what he describes as "possibly the only debate that might take place between four of the parliamentary candidates vying for our votes," in the "frontline" seat of Hammersmith. It took place at Imperial College before an audience of its students. Chris reports:

On the recession and how to get out of it Shaun Bailey rather departed from the party line when he declared that "Trident may need to be looked at again".

I wonder what Bailey exactly meant by "looked at again." The last I heard, Cameron is committed to renewing Trident, though on a smaller scale than the present government plans to.

I've known Bailey to take up an unexpected position before. When he and I were fellow panellists on a TV discussion show a few years back, he surprised me by very strongly favouring a government apology for Britain's role in the slave trade. He argued, if memory serves, that this would help heal a great hurt felt by black Britons. Such a view is mostly held by the sorts of liberal-lefties that Bailey has often blamed for poor youth discipline, the "dependency culture" and so on.

The incongruity was underlined for me by Bailey's high opinion (expressed to me off-camera) of the TV drama Shoot the Messenger, which had gone out at around the same period of time. Written by Sharon Foster, it centred on a young black man whose impatience with his fellow black citizens was expressed in an outburst against what he saw as an unhealthy and disabling preoccupation with slavery's historic legacy. A small inconsistency, but a striking one.

Bailey's opponents have accused him of being an over-managed media construction, designed and promoted to personify Cameron's purging of some of Toryism's nastier attitudes. But while he certainly serves this useful purpose for his party, there are also at least some indications that the political story we tend to hear about Bailey is more complex than it sometimes seems.

Guardian photographer charts the 2010 election campaign as it happens

Two of the biggest beasts in the political jungle - the business secretary and his Tory shadow - slug it out in front of an audience of business leaders

It's not exactly Frazier v Ali but it's the closest British politics gets to a heavyweight bout. In the red corner is Labour's veteran spinmeister Lord Mandelson, the business secretary. In the blue corner is his opposite number, the old Tory bruiser Kenneth Clarke.

The two comeback kings have been paired up in a kind pre-election sparring match by the British Chambers of Commerce. This Rumble in the Jungle takes place, not in a Kinshasa stadium, but in the more sedate surroundings of the Bafta HQ in Piccadilly. The match referee is the BBC's Jon Sopel.

David Frost, the director general of the BCC, sets the scene: "At 12.45pm voters will finally get a chance to see two of the biggest players in British politics debate the future of UK business in an unrehearsed, authentic, and open fashion."

"Unlike the debates arranged by the party leaders, our conference session has no strict rules, no coaches and no rehearsed sound bites. Lord Mandelson and Ken Clarke are going to have to make their case in a straightforward and spontaneous way, by answering direct questions from amongst BCC's 100,000 members who represent five million employees."

Repeated reorganisations have reaped few benefits for taxpayers, says spending watchdog

Labour's repeated restructuring of Whitehall has cost £1bn in just four years but there is no evidence that the changes have reaped benefits for taxpayers, according to a report by the spending watchdog.

Gordon Brown accelerated reforms when he became prime minister, creating new departments, some of which were scrapped after less than two years. At least £200m a year was poured into redundancy payouts, new buildings and logos to rebrand departments between 2005 and 2009, the National Audit Office says.

Its report records a sharp increase in the number of departments being restructured after Brown became prime minister in 2007, but also carries a warning for the Tories - who are planning to abolish dozens of quangos - that plans to merge operations can be wasteful.

In the year that Brown became prime minister 10 departments were overhauled, compared with just three the previous year and none in the two years before that. The Department for Business, Enterprise and Regulatory Reform and the Department for Innovation, Universities and Skills, both created in 2007, lasted less than two years and were merged to form Lord Mandelson's Department for Business, Innovation and Skills last year.

It emerged that in 2006 John Prescott had spent thousands - including £645 to change the brass plate on the door of his offices in Whitehall - when the Office of the Deputy Prime Minister became the Deputy Prime Minister's Office.

Since 1980 the government has created 25 new government departments, compared with just two in the US. Thirteen of them no longer exist. But the true scale of the reforms has been much larger once quangos are accounted for.

Amyas Morse, the comptroller and auditor general, said the government was in a "constant state of change". He added: "At approximately £200m per annum, the costs are far from negligible and the reorganisations inevitably involve disruption and loss of service."

Edward Leigh, who chairs the Commons public accounts committee, said: "Designers of logos and makers of nameplates have had much reason to be grateful for central government's passion for constantly reorganising and renaming its departments. This is all costing a lot of public money without any cost-benefit analysis in advance or means of tracking any eventual benefits."

Auditors found that between May 2005 and June 2009 there were more than 90 reorganisations of central government and its arm's-length management bodies.

There has been no attempt to cost the changes by the government, although it was estimated to be about £780m. Researchers suggest the real figure is likely to be close to £1bn after 42 smaller reorganisations are included in the calculation.

Ministers have rarely set out the aims of a merger, so it was all but impossible for the auditors to establish whether the changes offered value for money. A survey of 51 reorganisations over the period suggested that staff were the most costly element of reforming departments and quangos, with costs inflated by payouts to people who had been made redundant.

Francis Maude, the shadow cabinet office minister, said: "Gordon Brown has had a reckless attitude to spending our money. This report shows his pledge to be a prudent chancellor was pure fiction."

The Cabinet Office said: "Value for money must always be a priority, but it is also important that the prime minister is able to structure the government, acting quickly if necessary, to best develop and implement the government's policies and deliver on key priorities that bring real benefits to people and public services."

'Officer A's' account of infiltrating an anti-racist group is ludicrous and raises questions about whose interests police act in

Last Sunday's Observer claimed to expose how "an officer from a secretive unit of the Metropolitan police" worked "undercover among anti-racist groups in Britain, during which he routinely engaged in violence against members of the public and uniformed police officers to maintain his cover".

Despite this sensationalist introduction, "Officer A" does not describe his involvement in any violent incidents. No wonder. The organisation he infiltrated, Youth Against Racism in Europe (YRE) is a peaceful organisation of young people, which in the 1990s organised mass protests against racism and the BNP.

A supporter of the Militant Tendency (now the Socialist party), I was the elected national secretary of YRE between 1992 and 1996 and remember YRE often facing violence from the far right, and unfortunately also from the police.

Ludicrously, the article says Officer A's "key success" was to discover that the 1993 demonstration against the BNP's headquarters was going to be "far larger than thought". YRE repeatedly told the police that the demonstration, following four racist murders within two miles of the BNP HQ, would be huge. Fifty thousand attended. We wanted to march peacefully past the BNP bunker. The police response, as the Observer's film shows, was to refuse to allow us to march at all, and to carry out an incredibly brutal attack on peaceful young people using their democratic right to protest.

We now discover that the police not only used violence against our demonstrations but also carried out a secretive, unaccountable and clearly expensive infiltration operation. They gained nothing from it. Far from being secretive we publicly advertised our events - the police could have read our leaflets and newspapers, or attended our public meetings, to find out what was going on.

Nor is there any basis to Officer A's suggestion that he succeeded in making our work ineffective. In fact he had no negative effect on YRE, which was very successful, playing an important role in completely marginalising the BNP for over a decade.

Hackney activists from the time remember Officer A of the Special Demonstration Squad (SDS), or "Peter Daley" as we knew him, as hardworking. When he disappeared in mid-1997, saying he was moving to Greece, he suggested we sell the contents of his flat to raise funds for the cause.

More seriously, they also recall that Peter did not fully agree with our position on how to defeat the BNP. We explained that defeating racist and fascist groups is a political task which required patient campaigning in working-class communities, rather than street fighting. Peter wasn't as convinced of our position as he could have been and tended to argue for brawling with the BNP. Was he sent in partly as provocateur?

The Observer's revelation is not unique. Christopher Andrew's The Defence of the Realm: the Authorized History of M15, published last year, also describes state infiltration of Militant, the National Union of Miners and others.

This is not just of historical interest. As recent articles in the Guardian have revealed, surveillance of peaceful protestors has mushroomed. Police brutality also, as the tragic death of Ian Tomlinson showed, is not a thing of the past.

Today a new generation are becoming involved in campaigning against the BNP, such as Youth Fight for Jobs, which demonstrated in Barking last weekend. At the same time the current economic crisis sees many workers and young people moving to the left. New "Peters" will undoubtedly be sent to infiltrate anti-racist campaigns and left-wing organisations to try and cut across protest. They will not succeed. But questions about whose interests the police act in, alongside demands for them to be made democratically accountable, and for the disbandment of the SDS, the Territorial Support Group and all other similar units, will be an important aspect of future campaigns.

The papacy normally gets away with things far more lightly than our secular leaders do - and the record suggests it will also recover from the latest revelations

Good to see the pope in the media dock over the Catholic hierarchy's conspiratorial role in child abuse by its priesthood. It was the lead story in the Guardian this morning, though the Mail - usually a better barometer of public opinion, I fear - attaches more importance to the high court victory of a Catholic care agency keen to resist gay adoption.

Hey, ho, it's a funny old world: gays bad, paedophiles not so bad. Is the Mail editor, Paul Dacre, a Catholic? I immediately asked myself. Mr Google tells me he is. That might explain a lot.

But the reason Pope Benny warrants a stint in the public stocks is that he deserves it. He has got away with it far more lightly than our secular leaders routinely do in liberal secular media, which doesn't take the power of faith very seriously - and therefore does not take the abuse of it seriously either.

As Riazat Butt sets out in today's Guardian this scandal has been unfolding for a long time. The Catholic hierarchy has been battered and beset by scandal and lawsuit in the US for more than a decade, though this latest strand of the ancient priests-and-sex scandal first emerged in Newfoundland, Canada's most remote province in the late 1980s.

It has belatedly spread to the point where Angela Merkel, daughter of a Protestant pastor from Hamburg who went east, is cutting up rough this week and Cardinal Sean Brady, primate of all Ireland, is taking a long time to resign for his own part in the cover-up.

Heaven knows what goes on in Catholic Africa and Asia (Catholicism is India's third largest faith) where society can be - not always - rather more repressive about sexuality. In due course we may find out.

None of which should suggest that Catholic priests and their hierarchy are uniquely wicked, though the penny is starting to drop that celibacy - a fairly late invention in the Christian tradition - has its drawbacks. Who'd have thought it, eh?

As Andrew Brown reminds us today a lot of abuse of children and teenagers (some try to claim that most abuse by priests was not of children, but of 16 to 17-year-olds) takes place within secular institutions, not least the family home. Think those grim court cases where social workers have failed, think the export of "orphans" to Australia.

But the cover-up has been instinctive, systemic and organised from the top over a long period of time. As Andrew Brown also concedes, secular society has proved wiser in seeking to address the past and make amends.

The pope's choirmaster brother in Bavaria seems to have been badly compromised - among many others.

The papacy has endured worse crises before and survived them. As the west's oldest institution it takes the long view, not subject to mere transient fashion in law or morality. The routine brutalisation of the innocent faithful, well that was deemed an unfortunate price to pay.

Thus the late pope's investigation, instigated in 2001, took place in secret, revealed only in 2005. That sort of strategy is the church's strength - and its weakness. At a time when all sorts of quack religions are doing well, it's doing badly.

As it campaigns to resist secularisation, especially in Europe, it has let itself down. The record suggests it will recover.

Why mention it all here? For the usual reason: proportionality. We live in an age where secular institutions which are accountable to citizens, notably elected governments and hard-pressed local councillors, get a terrible kicking day in, day out.

The media is usually to the fore. When in doubt, bash the NHS. The hacks are less keen to take on those with deep pockets and expensive lawyers, most of them not very accountable either.

But if you compare the profound power exercised by the church over millions of people's conduct and imaginations with that of a transient elected government it's no contest, is it?

I'd say that Michael Ashcroft's tax status, over which William Hague did himself more damage on Radio 4's Today this morning, or Charlie Whelan's union manoeuvres - both topical issues - get even more attention than they warrant, the papacy's rearguard action rather less.

That leads to a larger point, humanity's extraordinary capacity for selective indignation and a cheerful willingness to manipulate facts to fit our prejudices. We all do it and should try harder not to do so.

This very day news comes from Germany that an official commission of historians has concluded that the number of Germans killed in the RAF's terrible night raid on Dresden - on February 13-14 1945 - was as originally reported: up to 25,000, and not the 200,000-plus of later legend.

Naturally, protests have already begun.

Neo-Nazis and assorted leftwingers have too much invested in the British "war crime" of Dresden to give up easily. David Irving, the talented-but-dodgy historian, played a significant role in hamming up the figures. So did Kurt Vonnegut, though he had an excuse: as a PoW he survived the attack.

And the papacy's view? We await it. In his teens the future German pope, whose father was an anti-Nazi, was conscripted into the Hitler Youth against his will; unlike Günter Grass who eagerly volunteered, so the great hero of the left confessed 50 years after the event - when he also claimed to have been a PoW with young Ratzinger as the war ended.

At the time the then-pope, Pius XII (1939-58) was also taking the long view that communism was a bigger threat than Nazism and espoused a less than even-handed neutrality. He was certainly right on that score, but it was also convenient. Pius XI did better, even before the millions died.

As we speak Pius XII is on the fast track towards canonisation by Benedict XVI and Cardinal Bernard Law, a fugitive from US justice for his role in the Boston sex scandals has a job in the Vatican.

But give it a century or two and it will all blow over. It is a lesson in how to keep your nerve and take the long view.

BA chief executive and joint general secretary of Unite in talks to avert cabin crew walkout on Saturday

The British Airways chief executive, Willie Walsh, and the joint general secretary of the Unite trade union, Tony Woodley, are today holding last-ditch talks in a bid to avert a three-day cabin crew strike this weekend.

Last night Walsh met the general secretary of the Trades Union Congress, Brendan Barber, where it is understood the BA boss handed over a letter. Walsh declined to comment when leaving the TUC headquarters in central London.

In a sign that today's meeting could be make-or-break, Woodley has called a gathering of representatives of Bassa, the Unite cabin crew branch, this afternoon.

Woodley offered a way out of an increasingly damaging and politically contentious dispute earlier this week when he said Unite would suspend the strikes if BA re-submitted a peace offer that was taken off the table last week.

Walsh has appeared to harden his stance in subsequent communications with Barber, warning that BA was unlikely to submit the same offer and apparently refusing to lift disciplinary procedures against senior Bassa members employed by the airline.

The latter stance has led many Unite officials to believe that all hope of a deal before Saturday is lost. There is also concern among Bassa representatives that the BA offer, which included a three-year pay deal and the partial repeal of staffing cuts that triggered the dispute, does not go far enough and could be rejected by members. However, this morning's meeting has provided some hope.

BA has said it expects to fly 65% of its passengers to their destinations during the walkout that is scheduled to begin on Saturday. A further four-day walkout will take place the following Saturday if no deal is reached.

Unite has been placed under intense political pressure to reach a deal after Gordon Brown labelled the threatened industrial action "deplorable". Unite is one of the Labour Party's largest donors.

The Treasury needed to borrow £12.4bn to balance the books in February

A better-than-expected outturn in the public finances last month has given Alistair Darling more room for some pre-election sweeteners in next week's budget.

Hopes that the chancellor will be able to trim his forecast for record peacetime borrowing rose today after the Office for National Statistics released data showing that the Treasury needed to borrow £12.4bn to balance the books in February. While this was the biggest February deficit on record, the gap between taxes and revenue was smaller than the City had feared.

Tax receipts were stronger than expected thanks to the VAT increase at the start of the year, while the City bonus tax will also have helped.

"This perhaps gives Darling some room to offer something to the electorate at the 24 March budget," said James Knightley at ING. "However, with ratings agencies and financial markets eager to see action on the deficit he is unlikely to offer very much."

Jonathan Loynes at Capital Economics agreed, saying the figures have given the chancellor a timely boost ahead of the budget. "He now looks likely to have a little wriggle room in the budget to either cut borrowing or fund a few pre-election sweeteners - we suspect that he will choose the latter. Make no mistake, though, a prolonged and painful fiscal squeeze still lies ahead."

Government borrowing last month took the cumulative total for the first 11 months of the financial year to almost £132bn - fuelling speculation that the chancellor will cut his full-year forecast in next week's budget from the £178bn announced in the pre-budget report last December.

Britain's borrowing has ballooned this year as the public finances have felt the full impact of the longest and deepest recession since the second world war.

But the ONS said it had scaled down its estimate of net borrowing in January from more than £4.3bn to just £43m. Revisions to the data for 2009-10 overall have reduced the size of the deficit by almost £3bn.

Less encouraging news for the government came from separate data from the Bank of England showing that lending to businesses fell more sharply in January than at any time since records began a decade ago.

Fuelling growing concerns about the sustainability of the UK's economic recovery, Threadneedle Street said net lending fell by £6.5bn - double the rate of decline in December. Lending in the first month of 2010 was almost 10% lower than a year earlier, despite government attempts to persuade banks to increase the flow of credit to companies.

Labour's Lindsay Hoyle is ignorant of the facts when he fingers fuel barons for pump prices when his government is to blame

In the run up to an election campaign, how useful for us to see how politics actually works in the raw. That view being given to us by Lindsay Hoyle MP in his recent piece here at Cif.

In essence, take a legitimate concern - the price of petrol - ignore GCSE-level economics (let alone anything more complex), sprinkle with ignorance and finish with some rabble-rousing about the filthy capitalists. All the while glossing over the simple fact that the major determinant of petrol prices is the taxes imposed by the very government that he supports.

Put simply, Hoyle tells us that oil prices in US dollars are down from their past peaks but petrol prices at the pumps are not. Thus we must be being ripped off by the oil companies and the solution is, well, apparently that Hoyle should have more influence over what petrol companies do.

So let us have the basics of the oil market explained shall we? The first thing is that the price is determined in US dollars. This is as true of oil pumped up within these kingdoms as it is without. The reason for this is that oil is fungible and is one of the few truly global markets. When the pound falls against the dollar (as it has done by some 30% in recent years), then the price of oil expressed in pounds will rise by the same amount. If companies in the North Sea kept their sterling price fixed then they would be losing possible profits as the dollar rose against sterling. So too would the Treasury, for they take some 50% of such profits, plus a great big fat royalty. This explains a large part of why petrol prices in sterling are as high as they were despite a fall in the dollar price of oil. Sterling has fallen against the dollar.

The second important thing is that refining and distributing petrol is not a particularly profitable activity. Indeed, for many years in the UK it was loss-making. The profits are made in the drilling for, finding of and pumping up of crude. Turning it into petrol to put in our cars is a low-margin high-volume business. There simply aren't large profits to be taxed here.

Thirdly, at current prices (I'll round because they can change day to day) of the £1.15 or so that you pay at the pumps, 55p or 56p goes in fuel duty. Around 40p goes to the retailer, wholesaler, refiner and whoever it is that has paid for those huge rigs in the middle of the oceans, plus all the tankers and pipelines connecting them. Then there's VAT on top of the whole lot meaning that, again in round terms, the government gets 70p of the price per litre.

Now it is righteous and just that people should pay the costs of what they do. Fuel duty pays for the roads themselves, plus there's some element of the taxation that goes to pay for the noise and other pollution caused - perhaps we could count in the cost of the NHS patching up accident victims and so on. Perhaps 30p of that 55p should be assigned to user fees. We can check this because when there was a tax difference between biodiesel and fossil fuel, that's what the duty difference roughly was.

There is also, of course, climate change to consider. As the Stern Review told us, the social cost of carbon emissions is $80 a tonne. This is 11p on a litre of petrol. Thus, there should be this amount of tax to pay for that. And the fuel duty escalator has raised, since 1993 (it was imposed by Ken Clarke "to meet our Rio commitments"), the price by some 23p, without the latest mooted rises. So, currently, we are overtaxing petrol by some 12p a litre to meet all of the correct costs that should be assigned to this activity.

So, petrol is expensive in the UK because we pay too much tax on it. The price is high in sterling terms because the pound has fallen against the dollar. There's no great trove of profits being made in refining or wholesaling of petrol. But an MP facing election has decided to call for confiscating those tiny to nonexistent profits (please do note, he says it is the petrol companies, retailers, not the international oil companies) in the hope that no one will note that his own government is responsible twice over. Once in the excessive tax levied and secondly in the decision to reduce the value of the pound.

In short, it was the other kid that did it and he ran away. Not me Guv.

Yes, this is silly, that such displayed ignorance and rabble-rousing will have an effect. Democracy only works if we see through such to the truths underneath. But this will work, tens of thousands will vote for Hoyle in Chorley, sad to say. And until we all grow up, politicians will continue to treat us as children and flannel us as Hoyle has done.

Video: John Harris visits Manchester University to measure the impact of students' politics on the election result in Withington

This week I took part in a protest against those who paint the Waffen-SS as heroes. Britain should take a similar stand

Ever since the marches of Latvian SS veterans have been held on 16 March in Riga, I have been involved in the efforts to convince the local authorities to ban these ceremonies. There were a few years when we succeeded, but for the most part the marches have continued to the consternation of the Russian residents of Latvia and those who oppose the honouring of individuals who fought alongside the Nazis to achieve a victory of the Third Reich.

This Tuesday, for the first time, I actually saw the march with my own eyes and had an opportunity to join a peaceful protest staged by local anti-fascist demonstrators. It was a shocking and utterly disheartening sight to see over 1,000 people gathered in subfreezing weather to honour Waffen-SS units, among whose soldiers were several of the biggest mass murderers of Jews during the Holocaust.

As emotionally distressing as the ceremony was for me personally, however, its most problematic and disturbing aspect was the manner in which the symbols of renewed Latvian independence were exploited to honour the service of the members of the Latvian Legion - thereby reinforcing the myth that they were freedom fighters for their country's independence, as opposed to fighters in the service of Nazi Germany, a regime which bears direct responsibility for the mass murder of tens of millions of innocent civilians. Thus two rows of young Latvian nationalists waving the flags of democratic Latvia, a member in good standing of the European Union and Nato, stood as an honour guard at the Freedom Monument as the procession of veterans came to lay flowers and wreaths at its base.

Staging the ceremony at the Freedom Monument, probably the most cherished symbol of Latvian independence and opposition to the Soviet occupation, and incorporating the use of current Latvian flags, gave the event an aura of ostensible official recognition that was not in fact the case. (No government officials participated.) Even worse, it sent a message that the new Latvia salutes the Latvian Legion, despite the fact that among its members were mass murderers and Latvia's most ardent supporters of Nazi Germany.

Standing among the demonstrators against the march and listening to the hateful exchanges between the two sides was both frustrating and infuriating. Were the pro-Legion marchers aware of the fact that there was never any indication that the Nazis intended to grant Latvia independence? Were they aware of the terrible crimes committed by the self-declared Latvian patriots who were among those who volunteered for service in the Waffen-SS Latvian Legion? It appeared as if these facts were irrelevant to the supporters of the march, who were driven by hatred of the Soviets more than any other element.

In reality, Tuesday's ceremony was in certain respects only the tip of a very dangerous iceberg that is attempting to rewrite the history books and create a false symmetry or equalisation of Communist and Nazi crimes. And while the march was not organised by the government, it is obvious that there is strong support for its message among Latvian leaders. Thus, for example, yesterday Latvia's foreign minister Maris Riekstins issued an official statement in which he attacked my criticism of the march and attempted to equate the suffering of all the victims of the second world war, as if there was no difference between those supporting Nazism and those opposing it.

The question facing the European Union and especially Britain (given the Conservative's alliance with march supporters, For Fatherland and Freedom), is whether they will finally realise how dangerous this movement of Holocaust and second world war distortion is and take the necessary measures to defeat it, before it defeats us.

The government today announced better-than-expected figures for last month's public finances, although it was the worst February deficit on record. Here is what the economists make of it

Public finances: what the economists say

This is still the worst January and February period on record (monthly data goes back to 1993), but it looks increasingly likely that borrowing will slip under the £178bn in full fiscal year forecast chancellor Darling presented in the pre-budget report late last year.

Therefore this perhaps gives Darling some room to offer something to the electorate at the March 24 budget. However, with ratings agencies and financial markets eager to see action on the deficit he is unlikely to offer very much. Prime Minister Gordon Brown will likely to be far more eager for a fiscal easing to boost his chances of re-election. However, Darling is no doubt aware that this will probably be his last budget. Consequently he may not want to be pushed around by Brown and may look to his legacy as Chancellor. This perhaps suggests he will be keen to stand firm and be recognised as the person putting the UK's fiscal house back in order.

It's helpful given there is a budget next week. All the budget forecasts will be based on these figures.

At first glance the figures don't seem as bad as expected. The February deficit is a touch narrower than we'd forecast and the January figures appear to have been revised better.

The precise arithmetic looks as if it's a bit more favourable than previously, but it doesn't change the big picture which is that the UK must make big efforts to consolidate its budget deficit over the medium term.

February's public finances figures have provided Alistair Darling with a very timely boost ahead of next Wednesday's Budget. Not only was the February public sector net borrowing (PSNB) total of £12.4bn lower than expected (and only £3.4bn higher than last year's figure), but January's deficit was (unusually) revised down from £4.3bn to just £43m.

The better than expected outcome seems largely to have reflected stronger tax receipts after the rise in VAT - the bankers' bonus tax may have helped a bit too. The figures leave a total deficit for the first 11 months of the year of £132bn, suggesting that Mr Darling may now hit or even undershoot his full-year forecast (on this measure) of £170bn.

As such, he now looks likely to have a little wriggle room in the Budget to either cut borrowing or fund a few pre-election sweeteners - we suspect that he will choose the latter. Make no mistake, though, a prolonged and painful fiscal squeeze still lies ahead. Elsewhere, the failure of the Bank of England lending panel's measure of new mortgage approvals to rebound in February (it fell from 49,000 to 48,000) suggests that January's slump may have been more than a weather and stamp duty effect.

After yesterday's surprise drop in unemployment, there was some more good news today for Chancellor Darling, ahead of next week's Budget on Wednesday. Public sector net borrowing in February came in at £12.4bn, below expectations of £14bn. And January's data were also revised to show no significant borrowing, from the earlier estimate of £4.3bn, which had been the first January on record to show a deficit. As such, total PSNB in the eleven months to February stood at £132bn - leaving Darling well on track to meet and maybe even beat his Pre-Budget Report (PBR) forecast of £178bn in the fiscal year 2009/10 (and the £175bn forecast in the 2009 Budget).

Despite this good news, and the smaller-than-expected increase in unemployment, we still do not expect any big giveaways in next week's Budget. There may be the usual eye-catching and headline-grabbing measures, but these are likely to be small scale. Fundamentally, the UK fiscal position is still dire, despite the recent good news, and we think Darling will want to bank any recent improvement, rather than hand out pre-election giveaways. (Prime Minister Brown may, of course, disagree on this point.) Fundamentally, we therefore expect the Budget to paint a similar macro story to that contained in the PBR - a gradual process of fiscal consolidation over a number of years.

Much has been made in recent weeks about the difference between the gradual pace of fiscal repair proposed by the Labour government, and the more swingeing cuts that the Tory opposition had said they would opt for (although they have recently been somewhat confused, to say the least, on this point). In reality, we think the gap between the two parties is far smaller than the political rhetoric would suggest. Whoever wins the election, spending cuts and tax rises will ensue. Indeed, the main concern for the market now is that no-one wins an outright majority - and the ensuing hung parliament fails to get to grips with the problem. Our view is that long-term interest rates are clearly not holding back the UK economy at the moment. And, with the recovery far from assured, we think that a more gradual pace of fiscal tightening, certainly during FY10/11, is appropriate. And even after that, fiscal consolidation must be based on the state of the economy. If the recovery is weak, or the economy takes another dip, then that could even imply a decade of adjustment, which would have ratings implications. But, if truth be told, it would not be the end of the world if the UK lost its AAA status in such a scenario, despite what some politicians claim. Ensuring the recovery is the immediate priority.

There were always a couple of risks with this number in terms of the forecast. One was that there were a lot of late payments of personal taxes which certainly seems to have been the case. The income tax number is high for a February which probably is due to people struggling with their personal finances and paying late.

The other one was that government expenditure appears to have been rising quite sharply over the last couple of months but that one didn't materialise. So we had the positive one where the income tax looked very low last month and we've corrected that hence we've got the better reading. The risk of course is for the March data when we get it, which will be after the budget, we'll actually have a big spike up in expenditure so what looks like a slightly better number this month, puts us back on course for where we were with the PBR may not necessarily be the case in the end.

It looks like the deficit is probably going to undershoot the government's £178bn forecast by a small amount. From a market perspective I think the key is what they do with that saving. If most of that money is saved the markets will be be pleased. My hunch is that the government will almost certainly spend the supertax and might decide to save a little bit of the remainder. From a market perspective that's the focus for next week.

A survey of NHS staff finds many disatisified with the quality of care at their own hospitals. Find out which ones they are
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Question 20 on this year's annual NHS staff survey has come up with some worrying answers. Staff in the health service were asked: "If a friend or relative needed treatment, I would be happy with the standard of care provided by this Trust". The responses were deeply disturbing. In 17 NHS trusts and foundation trusts, a tenth of those surveyed - more than 20 per cent of staff - disagreed with the statement. More than a quarter of staff disagreed at three - Scarborough, West Hertfordshire and Mid-Staffordshire NHS Foundation Trust - where a patient died unnecessarily.

A shocking 36% of staff would be happy with the standard of care for a friend or relative at Scarborough, and 41% at Mid-Staffordshire. Other flagship foundation trusts, somewhat surprisingly, also scored badly - with 22% of staff at Tameside being unhappy for family and friends to be treated there. For thousands of patients this means being treated in hospitals where a fifth of the staff would not be happy to send someone they love to their place of work. Who did score highly were the specialist hospitals such as the Moorgate's eye hospital, the Queen Victoria burns hospital in Sussex and the specialist cancer hospital, the Royal Marsden.

In Cambridge's Papworth no staff were unhappy for a friend or relative to be treated there and 90 per cent said they would be happy for that to happen. Such a wide variation in staff experiences does raise questions about how national the health service can really claim to be.

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Cumulative total of £132bn for the first 11 months of the financial year fuels speculation that the chancellor will cut his full-year forecast of £178bn

Hopes that Alistair Darling will be able to trim his forecast for record peacetime borrowing rose today after the government announced better-than-expected figures for the public finances last month.

Although the Office for National Statistics released data showing that the Treasury needed to borrow £12.4bn to balance the books in February, the gap between taxes and revenue was smaller than the City had feared.

Borrowing last month took the cumulative total for the first 11 months of the financial year to almost £132bn - fuelling speculation that the chancellor will cut his full-year forecast in next week's budget from the £178bn announced in the pre-budget report last December.

Britain's borrowing has ballooned this year as the public finances have felt the full impact of the longest and deepest recession since the second world war.

But the ONS said it had scaled down its estimate of net borrowing in January from more than £4.3bn to just £43m. Revisions to the data for 2009-10 overall have reduced the size of the deficit by almost £3bn.

Less encouraging news for the government came from separate data from the Bank of England showing that lending to businesses fell more sharply in January than at any time since records began a decade ago.

Fuelling growing concerns about the sustainability of the UK's economic recovery, Threadneedle Street said net lending fell by £6.5bn - double the rate of decline in December. Lending in the first month of 2010 was almost 10% lower than a year earlier, despite government attempts to persuade banks to increase the flow of credit to companies.

Minute-by-minute coverage of developments regarding Lord Ashcroft's tax status and hearings of parliamentary committees examining Tory deputy chairman's peerage

10.28am:
Baroness Dean, who was a member of the scrutiny committee when the peerage was awarded, is the first witness. She made a short opening statement saying she had a duty to protect confidentiality in her role on the scrutiny committee but these were "exceptional circumstances". The Labour peer said she came to the committee with a "heavy heart".

10.26am:
The chair Tony Wright says Ashcroft received his peerage in "highly unusual" circumstances and the peer's statement about his non-dom status invited a revisiting of the circumstances surrounding the award. Wright says PASC wants to investigate the dialogue Ashcroft had with the government about his tax status post-peerage and what steps were taken to make sure the conditions attached to the peerage were fulfilled.
Ashcroft and Hagues were invited to attend but were "not inclined to" the shadow leader of the house Sir George Young said in a letter to PASC.

10.20am:
The Lib Dems' home affairs spokesman Chris Huhne has just told the BBC Hague is "completely unfit to be foreign secretary". He said Hague was complicit in "a cynical cover-up" with Ashcroft over his non-dom status. According to Huhne, the Tory attitude is:

"Tax is for the little people and the big people, if they are giving enough money to the Conservatives, can be let off paying tax."

PASC is just starting.

10.12am:
The PASC meeting is scheduled to start at 10.15am.

The BBC may have been grilling Hague this morning but it has shelved a Panorama documentary about the business affairs of the Ashcroft because of a threat of legal action from the peer's lawyers, according to the Independent. It writes:

The hold-up will delight David Cameron's campaign team, who had been trying to pressure the BBC into delaying the programme until after the general election.

9.59am: The spotlight falls once again on Lord Ashcroft today, his non-dom status and what other Conservatives knew about it. William Hague admitted today he was wrong to declare Lord Ashcroft would pay "tens of millions of pounds" more in tax as a result of a deal struck to allow the Tory donor to take a seat in the Lords. Hague gave an interview on BBC Radio 4's Today programme this morning after the BBC revealed leaked papers suggesting that he was kept informed about the negotiations in 2000 over Ashcroft's tax status.

Two parliamentary committees - the subcommittee on Lords' interests and the Commons public administration select committee (PASC) - are meeting today to investigate the circumstances surrounding the award of a peerage to Ashcroft. Ashcroft has been invited to attend by PASC but judging by the list of witnesses on the parliament website, he will not be appearing. Also not appearing will be the Tory members of PAC who have boycotted today's special meeting.

This is vital because if he was not misled by Ashcroft then the shadow foreign secretary misled the country

A couple of points stand out from William Hague's breezy interview on BBC Radio 4's Today programme that left even more matters up in the air than before.

First, if these documents, obtained by the BBC, about the terms of Lord Ashcroft's peerage are so helpful to Hague, as he claimed, then why did he make the point repeatedly that it was disgraceful that Labour had leaked them?

It is not normal to claim that something is a political disgrace if it helps you clear your own good name.

But second and more substantively Hague did not clear up the question of whether he was misled by Ashcroft for 10 years about his tax affairs. This is vital because if he was not misled by Ashcroft then he (Hague) misled the country.

Hague told Blair in a letter in 2000 that the deal about Ashcroft getting his peerage would mean Ashcroft paying tens of millions of in tax in this country.

The heavy implication has always been (and was allowed to remain) that Ashcroft had told Hague at the time that this would be the cost to him of his peerage, the cost of paying full UK tax.

Hague allowed this impression to remain despite being pounded on the matter in interview after interview. He always said that he believed Ashcroft was complying with the deal he was involved in signing off, and about which he wrote to Blair.

Yet Hague was wrong. Ashcroft did not pay tens of millions of pounds. Hague admitted today that this was the one area on which he could have been clearer.

So was he misled by Ashcroft? Will he say he was misled by his friend? If not, why not? If he wasn't misled then it would be natural to conclude that he knew all along that Ashcroft was not paying full UK tax and was a non-dom. So why did he not tell us?

Or perhaps he does not want to say he was misled because his friend Ashcroft would be cross. Why might he be cross, I wonder?

What is certain is that Hague's statement about tens of millions of pounds implied that the money pouring into the Tory party - the money that could decide the next election - was not "foreign money".

What remains completely unexplained, crucially, is precisely why that statement was wrong. Until we know this, the matter will not go away.

Leaked Cabinet Office papers seen by the BBC suggest then-Tory leader was kept informed about negotiations on Ashcroft's tax status in 2000

William Hague admitted today he was wrong to declare Lord Ashcroft would pay "tens of millions of pounds" more in tax as a result of a deal struck to allow the Tory donor to take a seat in the Lords.

Leaked papers today revealed more details about the secret deal, prompting Hague to concede that the Tories should have revealed Ashcroft's tax status much earlier.

The papers, revealed by the BBC today, suggest that Hague -- at that time Tory leader -- was kept informed about the negotiations in 2000 over Ashcroft's tax status.

According to the BBC, the documentation includes a letter written by Hague to then prime minister Tony Blair insisting that Ashcroft was not being given a peerage for political reasons.

Hague declared to Blair that Ashcroft was non-resident for tax purposes but that he was planning to become resident in the following financial year. "This decision will cost him and benefit the Treasury tens of millions of pounds a year in tax," wrote Hague.

Hague admitted today that it was "a mistake" to suggest the Tory donor would pay "tens of millions". Speaking on BBC Radio 4's Today programme, Hague said: "The one thing I will concede which I think in retrospect was a mistake was to say tens of millions because it may have cost him millions, it may cost him millions in the future -- we don't know.

"None of us can know other than him and the tax authorities what it has cost. But it was still an important change for him to go from being non-resident in the UK to being resident and I concede that point."

Ashcroft revealed earlier this month that, despite becoming a UK resident under the deal, he remains "non-domiciled" for tax purposes, meaning he does not pay UK tax on his overseas earnings.

Hague, now shadow foreign secretary, approved the deal at the time but insisted it had never concerned tax matters. He told Today that he became aware at the beginning of this year of Ashcroft's precise tax status -- before Tory leader David Cameron was informed.

The Cabinet Office papers revealed by the BBC today show that James Arbuthnot, the then-Tory chief whip, who was involved in the protracted negotiations to secure a deal to allow Ashcroft to take up his peerage, told officials that Hague was "satisfied that the action adequately met the terms of Mr Ashcroft's undertakings" in July 2000.

Ashcroft had twice been refused a peerage, partly because of concerns that he was a tax exile.

The leaked report is likely to stoke Labour and Liberal Democrat demands for greater clarity about when senior Tories first became aware Ashcroft was a "non-dom".

Liberal Democrats estimate the "non-domiciled" arrangement has saved Ashcroft more than £120m.

Hague spoke as two parliamentary committees prepared to hold inquiries today into the circumstances surrounding the award of the peerage to Ashcroft.

Follow the debate live, featuring Jimmy Wales, Erik Huggers, Michael Wolff and many more

10.23am: Nick Appleyard and Jeremy Silver from the Technology Strategy Board, presenting on Digital Britain. As @wadds has just tweeted: "Blokes from the Govt can't get the tech to work. Oh dear." Full disclosure: this is a Guardian conference, so I think we, corporately have to take some of that blame. Huggers managed to make it work though. As did Wales.

10.17am: Huggers reveals that famed newspaper designer Neville Brody is helping with new BBC web design. Brody has done some famous newspaper design work, not least on the last Guardian broadsheet design.

10.05am: So, 200 top level directories will focus on news, weather, sport, knowledge and learning, music, children (a list that seems to cover almost everyhing). Will be interesting to hear whcih 200 will close...

Huggers then also echoes Mark Thompson's (and indeed every D-G evers message) that the BBC must reach every single person within Britain with some part of content. (That is how the BBC justifies the licence fee).

10.02am: Huggers: Web is world of unlimited possibilities. The Strategy Review says we need to focus, that endless spread is not the right strategy.
Focus on journalism, knowledge, music & culture, drama and comedy, big events.

BBC Online currently consists of 400 top level directories (BBC.co.uk/news or cbeebies or)

We propose that we cut the number of top level directories: down to 200. "Focus on the areas that the BBC excels in. We go from a sprawling website with lots and lots of stuff on it. Go to a much more structured view of what BBC online is all about."

10.00am: Huggers is pointing out that, while the BBC has many platforms, everything, absolutely everything, is published via the web.

9.52am: Erik Huggers, director of BBC Future Media and Technology, is on stage: "Erik, what is it that you do at the BBC?" he says people ask him all the time. Web, red button, iPlayer, archives, everything the BBC has ever output...

9.41am: Wales is now talking about one of my favourite subjects: Lostpedia, an immensely detailed site about TV show Lost. He says such sites are replacing niche magazines. And that youngsters, like his daughter, expect that such services are free and that they provide much more content. A magazine would no longer cut it for her.

Cellan Jones says that Wales is the high priest of the Cult of the Amateur: Wales says that professional journalists face change due to citizen journalism but says "Everyone tells jokes but we still have professional comedians."

Wales says that Wikipedia has an advantage over news organisations because it tells the whole story, updated, whereas news organisations tell of the latest developments. People want broader summaries and context to their news. His key quote on what newspapers do: 'Selling stale bread while giving fresh bread away free.'

9.37am: Jimmy Wales: "Wikipedia is free. Free as in free speech not as in beer." Big laugh.

Wales is now being questioned by the BBC's Rory Cellan-Jones about Wikipedia in China. Wales is praising Googles approach to China. Although he also says: "But I know Larry & Sergey and they are a little naive. And idealistic." Says it is better to be in China and help change.

9.19am: Good morning, welcome to a packed Kings Place Hall One for the Changing Media Summit 2010. Apologies for slightly tardy start, it has taken a while to get logged on! Emily Bell has opened the event and Jimmy Wales is now giving a keynote multi-media presentation. You can follow the action here or on Twitter, using the hashtag #cms2010, and you can speak to me in the comments below or via Twitter using @Busfield.

Shock news:

Since former KGB officer Lebedev became owner of the London Evening Standard the newspaper has stopped being the cheerleader for Boris Johnson that it was when Veronica Wadley was its editor. Journalists are given more freedom under Geordie Greig's more laissez-faire editorship.

Who is responsible for this foul heresy? Only Conservative Home.

Tory leader's attempt to reach out to black voters continues at event in south-east London

The Conservatives would take steps to prevent British National party members from becoming teachers, David Cameron said last night.

The Tory leader made the pledge at an event in Peckham, south-east London, where he was attempting to reach out to black voters. He said being a member of the BNP and a teacher was "completely incompatible" and headteachers should be given more rights when it came to hiring and firing staff. Ministers last week ruled out banning members of the BNP from the teaching profession.

Cameron, who spent more than an hour taking questions, received the loudest applause of the evening when he said: "Any good headteacher would not have a member of the BNP within a hundred miles of a school. They should be able to fire someone for that reason."

The Tory leader also pledged to stop police using terrorism laws to search people not suspected of terror-related offences.

He told those gathered at the Harris Academy that he did not believe people voted on issues that only affected their own race.

"I generally believe in a one-nation Conservative party, a one-nation Britain," he said.

But he acknowledged that "for a long time" there were reasons why black people would hold back from supporting the Conservative party.

"Because they would say, 'OK, you stand for one nation. But I don't see other people like me in your party.'

"If you look at black Britain today, the Conservative party have come a long way," the Tory leader said.

He added that the Tories had taken a "huge step" forward.

The event followed an article by Cameron published in the Guardian yesterday in which he pledged to help black people start businesses.

One audience member noted that Cameron had ventured into Harriet Harman's constituency in coming to the academy. "No bulletproof vest," the Conservative leader quipped in reference to an occasion when the Labour deputy leader toured Peckham in body armour.

Questions from the floor varied from the NHS and carers to stop-and-search and immigration.

Cameron received a warm reception for most of his answers but was heckled by one man at the end.

"You're no Tony Blair, mate," the man shouted.

"I'm glad I'm not," Cameron retorted.

This economic crisis is an opportunity to create public services that are cheaper but better

The deficit. The deficit. It's become this monolithic part of the landscape: always there, brooding away, occasionally to be gazed at in awe, but mainly to be walked briskly around, eyes downcast. The EU warns that even British government promises to halve the deficit in four years are not enough. Nick Clegg suggests that cutting too quickly might trigger civil unrest, as in Greece.

But if you want a colourful, graphic estimate of the magnitude of what is to come, then writers from the Financial Times are your men and women. Martin Wolf described the assumed cuts of £100bn that are to be made over the next two parliaments as "equal to a sixth of total spending, two-thirds of the public sector pay bill and all spending on the NHS in England". Ouch. Rowena Crawford worked out that, after both main parties' ring-fencing of the NHS, education and overseas relief, the required cut for, say, the Ministry of Defence would be "something on the scale of no longer employing the army". Yikes. No wonder politicians are so tight-lipped about the particulars.

Happily, not everyone is quite so coy. This week, the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce) urged the public to engage with a reality that politicians will not. It warns that: "To cut public services without proper public debate about the long-term challenges is a recipe for future discord. To make short-term budget-balancing decisions without a clear long-term vision for public services could be disastrous." Quite right.

The RSA goes further. Through the agency of a cross-party working group, the 2020 Public Services Trust, which was set up to explore options for reshaping public services, it boldly states an obvious truth. If Britain attempts to carry on with the model it presently has, then: "Public services are retrenched but not reformed. They are residualised and become increasingly poor services for a marginalised minority." It's a bleak prospect.

Yet it is surely a correct analysis. Even before the recession, Britain was not managing to cover the cost of its public services, and building up a structural deficit. Even without the recession, this situation could only have got worse, as the much-discussed ageing population moved from putting cash in to taking services out.

To be fair, the government had already been attempting to prime the population for change, warning that a different income stream had to be created, if care for older people was to be funded properly. Thanks to the opposition, this necessary injection of new thinking has already been branded "Labour's death tax".

This is an example of political debate at its most destructive, not least because it encourages the electorate to indulge in some dangerous delusions. Research by Ipsos MORI, commissioned by the trust, found that in spite of the deficit, only half of the public believes spending on public services needs to be cut, while 75% think efficiency savings alone can avoid the need for cuts.

It would be lovely if this were true - but it is not. When the cuts do come, as they must, people are going to be all the more angry because so many think they are not even necessary. This is the nasty near-future scenario that current political obfuscation is stoking up.

However, there are plenty of reasons to be cheerful; to see this crisis as an opportunity to create public services that are cheaper but better. In its interim report, Beyond Beveridge, the trust suggests this can be achieved by a threefold shift - in culture, power and finance. It all sounds quite dynamic and exciting.

The shift in culture chimes with attitudes towards public services that have become quite widespread: that they are "top-down", offering citizens passive protection from social risks, rather than empowering people to help themselves and each other. The trust offers Southwark Circle as an example. This successful pilot project "provides on-demand help with life's practical tasks through local, reliable neighbourhood helpers, and a social network for teaching, learning and helping". Essentially, people get together, have a nice time, and pool their various skills to help each other out. In terms of combating the great ill of social isolation alone, this sounds like a good plan, and echoes Amartya Sen's important work on "capability building". Good stuff.

The shift in power is an attempt to put some flesh on the bones of the buzzword "localism", and asks for the devolution of decision-making and commissioning authority to the lowest appropriate level. As an example, the trust cites Turning Point's Connected Care, which offers communities a blueprint for integrating health, housing and social care services at a local level, instead of waiting around as Whitehall continues to strive so ineffectually for elusive "joined up government".

The shift in finance is probably the most controversial part of the package. Partly, the proposals are simply about imbuing people with a greater awareness of what they are giving and getting, and what it costs. But it does also warn that there may have to be an expansion of joint funding, user charges and insurance-based models. There is emphasis on ensuring that this is progressive and redistributive, to avoid disadvantaging those on lower incomes. It's surely a more mature approach than shouting: "Tax the rich."

The great thing about the RSA's tough talking is that the very act of engaging with the debate is a glimpse of a future in which citizenship can be more active and more pleasurable. It's horrible, sitting around and waiting for the salami-slicing of public services to begin; waiting for people in distress to become more visible (as in the terrible homelessness of the early 1990s), for schoolbooks to become tattered, and for hospitals to become more tatty and dispiriting, as they did during the round of public service cuts that was endured back then.

But it's much less horrible to think of ways in which this stuff can be mitigated, and the worst of the damage avoided. Here is a project that people can take part in - instead of waiting to see who will get in a couple of months down the line, then waiting again to see what they will actually do.