House of Lords: Allowances

Lord Faulkner of Worcester Excerpts

Tuesday 20th July 2010 Lords Chamber

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, on 28 June, I made a Statement in this House on the merits of a new proposal for the remuneration of Peers. Today, I introduce two resolutions that will put the essence of that Statement into effect.

These resolutions will have an impact on all Peers and, while I welcome any interventions that Peers may wish to make during the course of my speech, I hope that noble Lords will intervene only if any clarification is required because my opening remarks will, I hope, lay out the ground and I will pick up queries when I wind up at the end of this afternoon's debate. I echo my noble friend the Chief Whip: there will be an opportunity for all Peers who wish to take part to do so.

We have before us today a final set of proposals for a new system of financial support for Members which, if approved, will come into effect on 1 October this year. This is not a new subject. The discredited parliamentary expenses regime is one that has caused this House much difficulty in the past, but today we have the opportunity to put that behind us and approve a new scheme that is direct, transparent and accountable, a scheme that is simple and not open to abuse, a scheme that will lay to rest the risk of the scandal of claims for so-called second homes that so damaged the House, a scheme that is fair in treating all Members alike.

When I made a Statement to the House, putting forward the outline of a radical new scheme for one single allowance to be paid on the basis of attendance on each sitting day, a number of comments were made on it. That proposal has now been considered by the House Committee, which brought its wisdom to bear and, as noble Lords would expect, has refined the proposal. The result is a sensible and workable scheme, which I have no hesitation in supporting today.

The scheme is set before your Lordships’ House today in the form of two resolutions in my name, and the Motion to approve the House Committee report in the name of the noble Lord, Lord Brabazon of Tara, Chairman of Committees. It may be helpful if I set out some of the detail of the proposals contained in the Motions on the Order Paper. I will do so partly on behalf of the noble Lord, Lord Brabazon of Tara, who will speak towards the end of the debate and, in doing so, will be able to respond to any questions Members raise about the details of the House Committee proposals.

The central element of my original proposal remains a single daily allowance paid on the basis of attendance on any sitting day. The allowance will be set at £300. This can be claimed if a Member has attended the House or a Committee of the House. Next, the reduced rate of £150 also remains a central part of the proposal. Paragraphs 3 and 4 of the resolution set out the circumstances in which a Member may claim the reduced rate. First, for attendances at Westminster, at a sitting of the House or a Committee of the House, any Member may elect, on a monthly basis, to claim the reduced rate,

“where they consider it appropriate”.

I am aware that the question of when a Member might claim this reduced rate was an issue of concern to some. As the House Committee report states at paragraph 6:

“It is difficult to arrive at specific criteria for measurement of a Member’s contribution to the work of the House”.

It will therefore be a matter for Members to judge their own circumstances in deciding whether it is appropriate to claim the full or reduced rate. Secondly, the reduced rate applies if the attendance on any day is on authorised business away from Westminster. Members attending such business will already be in receipt of reimbursement for the costs of accommodation, food and transport. These two categories of authorised business for which the reduced rate applies are the same as those for which Members may claim financial support under the current system. They are travel on official Select Committee business or on parliamentary delegations to certain interparliamentary assemblies; and travel in connection with certain authorised business such as CPA and IPU.

The new scheme, if approved, will come into effect on 1 October. Up to that point, the current scheme continues to have effect. In respect of the additional office costs allowance, the resolution makes it clear that Members may continue to recover office costs up to a maximum 40 days per year while the House is not sitting. This will apply for the period from 1 August to 30 September. The House Committee decided that this provided a degree of certainty to those Members who employ staff and who may otherwise be affected by the scheme agreed today. I have accepted that advice.

When I made my Statement to the House in June, several noble Lords raised the question of whether the new allowance would or should be taxable. Tax is not paid on the current expenses system on the basis that membership of the House is neither an employment nor an office. Any change to this position would require primary legislation and reconsideration of the level—£300—at which the attendance allowance is set. The Government currently have no plans to legislate to change the tax status of the scheme that is on the table today. If and when there is full reform of the House, the whole basis of financial support would need to be reviewed.

The issue of travel expenses is properly House Committee territory, but it may be helpful if I set out, on behalf of the noble Lord, Lord Brabazon of Tara, the recommendations on travel made by the committee. In line with the SSRB and the Wakeham group reports, the committee recommended that car parking and road tolls should be treated as “permissible travelling expenses” but that Members should not be able to claim for the London congestion charge. Provision for this is made in the text of my second resolution. Also in line with the SSRB and the Wakeham group reports, the committee recommended that, where Members do not make use of the House of Lords travel credit card, travel expenses should be reimbursed only on the basis of receipts or tickets. Equally in line with those reports, the committee recommended that claims for vehicle mileage must be accompanied by details of the individual journey and that only one claim per journey per vehicle can be made. The committee recommended that only those Members who live outside Greater London may claim reimbursement for travel expenses to and from Westminster.

The committee made a number of recommendations on the class of travel for Members and for Members’ spouses, civil partners and dependants. Members may be reimbursed for train travel up to the cost of a standard open ticket, whatever class they ultimately choose to travel. The committee recommended that the same rules should apply in respect of travel by Members’ spouses, civil partners and dependants.

[Lord Faulkner of Worcester]

This is a quick question. Does the description,

“ceiling cost of a standard … open ticket”,

apply after the application of a senior citizen discount or any other discount card that Members may hold or does it apply only to the standard open ticket?

[Lord Strathclyde]

My Lords, the standard open ticket is the price ceiling on which all claims will be judged.

That neatly brings me towards the end of my words. The committee recommended that the new arrangements be put in place for the duration of the present Parliament. I fully support that approach.

This has been a long and at times difficult journey to reform the discredited expenses regime, but it is a journey that is coming to an end. I hope that today the House will approve the Motions before it so that the reforms can be made and, when the House returns in October, we can start afresh under a simpler, more transparent allowance scheme that can command public confidence. I commend the scheme and I beg to move.

House of Lords Reform

Lord Faulkner of Worcester Excerpts

Tuesday 29th June 2010 Lords Chamber

[Lord Faulkner of Worcester]

My Lords, I am sorry that the Chancellor of the Duchy of Lancaster, the Leader of the House, has temporarily left his place, because I was going to start by congratulating him on the way in which he opened the debate. It was, typically for him, a smooth and polished performance. I felt that if he were to visit a turkey farm in November he would have no difficulty in convincing the residents that Christmas was really a time for rejoicing and that all of them should be grateful for the humane way in which they were going to be dispatched. However, he is not here, so perhaps his Chief Whip will pass that comment on to him.

I had hoped that the new Government would have tried harder to achieve a consensus on Lords reform. When my noble and learned friend Lord Falconer of Thoroton was Lord Chancellor, he made it clear that Members of your Lordships' House were to be part of the consensus which would deliver change. That made particular sense in the aftermath of the votes in the other place in 2003, when no majority could be assembled for any of the options on offer.

That approach was shattered, which made me sad, following the votes in the House of Commons on 8 March 2007, and from then on the views of Back-Bench Peers were largely ignored in the discussions about our future. Quite why the 2007 votes mattered so much, and why the failure to agree on any option in 2003 was of so little consequence, has never been satisfactorily explained to me. The noble Lord, Lord Norton of Louth, referred to this matter in his speech. I have a strong suspicion that, had a Bill been published before the recent election, it would have contained provision for the eventual expulsion of all existing Members as we moved to an all-elected House. I do not know how many of your Lordships are familiar with the TV game show “The Weakest Link”. I suspect that the noble Lord, Lord Jopling, may be, because he seemed to suggest that noble Lords should vote other noble Lords out because they were not contributing enough—very much the theme of that programme, as noble Lords will know if they are familiar with it.

Let us be quite clear about one thing. Those of us who are opposed to an elected House are not against reform. This House has already demonstrated that there is very considerable support for the measures contained in the Private Member’s Bill introduced by the noble Lord, Lord Steel of Aikwood. It is very regrettable that its merits were not recognised until it was too late in the last Parliament to do anything about it. If the noble Lord, Lord Steel, wishes to press his Motion to a vote later, I shall certainly support him. His Bill goes a very long way towards modernising this House, as the previous Government recognised in their Constitutional Reform Bill. One of its immediate benefits would have been to reduce the total number of Members, to which a number of noble Lords have referred, as they took advantage of the provisions for retirement. Until now we have had to rely only on the Grim Reaper as a means of reducing our number. Unless something like the bubonic plague were to make a reappearance, the Grim Reaper would not be able to keep up with the lists of new appointments that seem to come through week after week at the moment. So I wish the noble Lord, Lord Hunt of Wirral, well with his group, but I think that the provisions in the Private Member’s Bill of the noble Lord, Lord Steel, will be an essential part of any new arrangement for retirement.

I have a great deal of respect for the point of view that elections confer legitimacy, but I argue too that elections are not the only way in which legitimacy can be achieved. The role of this Chamber, which is primarily to scrutinise legislation and hold the Government to account, derives its legitimacy from the way in which we do that job and from the people who carry it out. It would not be enhanced if every Member, or nearly every Member of this House, were elected. It is necessary in doing the job that we involve substantial numbers of people who are not part of the normal party-political establishment. At present we can credibly say, during the passage of legislation and the final stages of ping-pong, “We know our place”. That is a point that the noble Lord, Lord Cope, made. When inadequately scrutinised legislation is presented to us, we are able to suggest improvements and revisions to it, but we know and accept that the final word lies with the elected Chamber. The moment when authority is conferred on an assembly through election, it would be necessary to rewrite the conventions between the two Houses. Where would you stop? On what basis would you deny an elected House the right to debate supply and agree the Budget, for example? That point was made with great force by my noble friend Lord Rooker.

I hope that honourable Members in the other place will read very carefully the words of the noble Earl, Lord Onslow. As we heard this afternoon, the noble Earl is a great enthusiast for elections. But the reason why he is such a great supporter of them is that he wants this House to be really powerful and to challenge the will of the Commons. I hope that the House of Commons will come to terms with the fact that many more Members will take the same view as the noble Earl. It seems to me that there is barely a glimmer of understanding of that in the other place. They seem to believe that opposition at this end of the building to an elected House is motivated purely by self-interest and will somehow melt away if we can be bought off by some vague offer of grandfather rights for existing Members, which I have to say I find pretty insulting. The great majority of us are opposed to a predominantly or entirely elected House because we believe that the effectiveness of the second Chamber will be irretrievably weakened if it is replaced by an elected body from which Cross-Bench Peers are absent and whose Members are chosen by the party machines.

It would be invidious to name individual members—mostly, but not entirely, they are on the Cross Benches—whom we would lose if they had to stand for election. Yet who can imagine how groups such as former university vice-chancellors, eminent scientists, distinguished medical practitioners, retired police chiefs and permanent secretaries, generals, air vice-marshals and admirals—with the possible exception of my noble friend Lord West of Spithead, who I can see on the hustings—would offer themselves as political party candidates in elections to this place? They would disappear and the character and effectiveness of the House would change totally.

I wish that when we discuss these matters we would use the English language accurately and truthfully. What is being proposed is not reform, it is abolition. It is the replacement of what we have now with something totally different. Anyone who questions that has only to read Mr Clegg’s rhetoric. I cannot believe that the overwhelming majority of noble Lords on the Conservative Benches, who voted by margins of almost 6 to 1 in favour of an appointed House in 2007, are going to allow their temporary coalition partner to destroy an institution in which they so strongly believe and to which they make such a powerful contribution.