The Tory guidelines which justify Michael Ashcroft's £1 million donation through the Belize Bank Trust Company will have to be rewritten to meet Jack Straw's draft bill which bans payments through trusts. Their present rules say: "Donations can be accepted from any trust wherever incorporated if the receipts of the trust are substantially from those whose direct donations would be accepted."
The Conservative rules also allow the party to take donations from countries outside the European Union provided they are run by British nationals or through British trusts.
The new legislation will block these routes. The proposed law will no longer allow any foreign donations and restrict the party taking any cash from companies incorporated outside the United Kingdom unless they are carrying on the main part of their business here.
A similar tightening up will apply to foreign-based partnerships and unincorporated businesses - even if run by British nationals whose main business interests are not in the UK.
The onus will be on parties to check that the companies do most of their business in Britain and they will have 30 days to return the donation if there is any serious doubt that this is not the case. According to the Home Office, the acceptance by political parties of donations from trusts where it is not always possible to check where the money has come from will not be allowed, whether "they are is in Belize or Barnsley". A similar rule bans payments through blind trusts.
On the surface this would appear to stop Mr Ashcroft using the present route to transfer money. He would have to pay the cash personally through an overseas branch of a British bank to ensure that it can be properly accepted.
