TAX exiles will be forced to return to live in Britain before they will be considered for a peerage in a key change to the vetting procedures for the House of Lords.

The Times has learnt that the tightening of the rules by the House of Lords Appointments Commission has been triggered by the Scotland Yard inquiry into cash for peerages.

Two of the Labour businessmen whose blocked peerage nominations are at the centre of the police investigation would have been disqualified by the rule change.

In 2005 Sir David Garrard, a property developer, moved to Geneva to become a tax exile.

Dr Chai Patel, the founder of the Priory Clinic, has his £45 million fortune in an offshore trust in Jersey. He qualified for non-domicile status for tax purposes because he was born in Uganda.

The men, who made secret loans of £2.3 million and £1.5 million, respectively, to the Labour Party, were rejected by the Appointments Commission. They have been interviewed under caution by the police.

The commission said that it would be considering the lessons learnt in the light of the controversy over the blocked peerages. It is also anxious to ensure that all peers can attend Parliament all year round. Tax exiles can stay in Britain for only 90 days a year.

Its annual report states: “Some likely changes would be making more explicit its expectation that it is informed of all matters that could influence a nomination and, in particular, loans to a political party. In the future it will also decline to vet nominees who are not resident in the UK for tax purposes.”

The rule change would have meant that two of the Tory party’s most generous supporters would not even have been considered by the commission.

Lord Laidlaw of Rothiemay, the Tory peer who sold his conference business for £768 million in 2005, had lived offshore in Monaco for 20 years. He became a peer in 2004. Lord Ashcroft, the former Tory trea- surer, was based in Belize before becoming a peer in 2001. Both men moved back to Britain to take up their seats in the House of Lords.

It is understood that Sir Gulam Noon, whose peerage was blocked after Labour failed to declare that he had lent the party £250,000, is registered in Britain for tax purposes.

Robert Edmiston, the Tory businessman whose peerage was blocked, is also registered in Britain for tax.

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