Baroness Evans of Bowes Park
That—
1. (1) The Resolution of 20 July 2010 relating to the House of Lords allowance is amended as follows with effect from the beginning of 1 April 2018.
(2) For paragraph 1(3) substitute—
“(3) The amount of the allowance payable to a Member in respect of a day of attendance in the year beginning with 1 April 2018 should be—
(a) £305, or
(b) if paragraph (4) applies, £153.
(3A) In relation to the year beginning with 1 April 2019, and each subsequent year beginning with 1 April—
(a) any formula or mechanism included in the IPSA determination for the year as a result of section 4A(4) of the Parliamentary Standards Act 2009 (adjustment of MPs’ salaries) should be treated as applying for the purposes of adjusting for that year the amount of the allowance payable to a Member of this House, and
(b) accordingly, the amount of the allowance payable to a Member in respect of a day of attendance in that year should be—
(i) the amount obtained by applying the formula or mechanism to the amount payable by way of allowance (under paragraph (3) or this paragraph) in the previous year, or
(ii) where no formula or mechanism is included in the determination, the same amount payable by way of allowance (under paragraph (3) or this paragraph) in the previous year.”
(3) After paragraph 1(4) insert—
“(4A) In paragraph (3A)(a) “IPSA determination” means a determination under section 4(4) of the Parliamentary Standards Act 2009.
(4B) Any fraction of a pound in an amount obtained under paragraph (3A)(b)(i) should be rounded up to the nearest pound if the fraction is 50p or more, but otherwise should be disregarded.”
(4) In paragraph 2(1) for “Accordingly, the” substitute “The”.
2. In respect of a day of attendance before 1 April 2018, the Resolution of 20 July 2010 relating to the House of Lords allowance continues to have effect without the amendments made by this Resolution.
The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, the Motion in my name proposes changes to the current and future rates of the daily allowance that would come into effect from 1 April. It follows the agreement of a report by the commission, which has also been put to the House for agreement. The current system was introduced in 2010 and was rightly considered to be a more direct, simpler and more transparent system, as well as being much easier to administer than the previous, discredited expenses system.
The daily allowance rates of £300 and £150 have been fixed since their introduction in 2010, and the House made a conscious decision at that time that this should remain the case until the end of the 2010 to 2015 Parliament. No decision was taken about how the scheme would operate after that Parliament, and rates have remained the same. I believe that, after almost eight years of the rate being frozen, the time is now right to introduce a modest uprating. While freezing the rate during that time was justified in line with public sector wage restraint and expenditure more generally, it is clear that, unless some means of providing a modest uprating mechanism is introduced, over time the amount of the daily allowance will reduce significantly in real terms.
The question then arises of what uprating mechanism should be used. I believe that the method that the Independent Parliamentary Standards Authority has used to determine annual increases in MPs’ pay for the last few years, in line with the independent ONS figures for average increases in public sector pay, is a sensible method which we should apply to the level of the daily allowance, beginning this year and for subsequent years. I am pleased to confirm that the commission agreed to my proposal that an initial uprating should be made to the daily allowance from 1 April 2018, in line with this year’s IPSA increase to MPs’ salaries of 1.8%, with subsequent annual upratings being pegged to subsequent annual IPSA determinations. Initially, this would result in a new rate of either £305 or £153. The result would be a modest and sustainable adjustment to the rate which I commend to the House. I also welcome the commission’s endorsement.
The overall cost of such an uprating in terms of the impact on the House of Lords estimate would be approximately £339,000 per annum. This can be accommodated within the current financial plan, which reflects overall savings year on year in the total running costs of this House, and means that we would continue to fulfil our important role at a rate that represents good value to the taxpayer. If IPSA were to change its method of determining future upratings, the commission would, of course, want to reconsider this approach. I beg to move.
Baroness Smith of Basildon (Lab)
My Lords, I thank the noble Baroness for her comments. This seems a sensible and appropriate approach to an uprating mechanism. As she pointed out, Members of your Lordships’ House have not seen any increase in allowances since 2010. To have an automatic annual increase on the same basis as Members of Parliament seems an entirely fair and appropriate way to proceed. She will understand that issues and anomalies remain that colleagues across the House will seek to address. They have not been addressed today, as she commented. However, the approach to the uprating mechanism is entirely appropriate. On a personal level, I thank the noble Baroness as I have raised this issue for a number of years, and without her personal commitment I do not believe that we would have seen this uprating at all.
Lord Foulkes of Cumnock (Lab)
My Lords, I back my noble friend Lord Blunkett, and I have total sympathy with the concerns that were raised by my noble friend Lord McConnell and, indeed, by the noble Lord, Lord Newby, although perhaps he did so in a gentler way. As Members on all sides will know, I have raised this issue on a number of occasions. I pay tribute to the Lord Speaker—I hope that this does not sound too gratuitous and crawling; it is absolutely genuine—who agreed to meet a deputation of all parties and the Cross Benches, which I had the privilege of taking to him to make the arguments, including the argument my noble friend Lord McConnell made. The Lord Speaker has been working with deft diplomacy behind the scenes, and the result is what we have achieved today. It is the first step towards getting these considerations dealt with properly, and I look forward to meeting the Lord Speaker afterwards, with a deputation, to raise other issues that need resolving, particularly those raised by my noble friend Lord McConnell. I hope that on that basis, my noble friend will not vote against this. As my noble friend Lord Blunkett said, it is a small step in the right direction.
Baroness Evans of Bowes Park
My Lords, I am grateful to all those who have briefly contributed. I thank in particular the noble Baroness, Lady Smith, and the noble Lord, Lord Newby, for the work they have done and for their support for this approach, which has allowed us to make progress, notwithstanding the comments made by the noble Lord, Lord McConnell. I understand that this is not what many Members of the House may have hoped for, but I hope they see that we have understood some of the comments noble Lords have made and that we have tried to take a step in the right direction. I agree with the noble Baroness, Lady Smith, that this is the right thing to do at this point. I accept that it is a modest increase, but I hope that noble Lords will feel able to support the Motion.