Financial Provision for Members

Lord Phillips of Sudbury Excerpts

Monday 28th June 2010 Lords Chamber

[Lord Strathclyde]

My Lords, the noble Lord asks an extremely sensible question, one which is not entirely easy to deal with. There is a perception among those outside this House that a few minutes’ attendance reaps the benefits of large sums of money. In my experience, both as a former Chief Whip and as Leader of the House, I regard these abuses to have been exceedingly small; nevertheless, there is that perception. I am also aware that there are some Peers who, because of the nature of their outside work and for other reasons, do not spend a great deal of time in the House. It was felt in the discussions that I had that we should offer an alternative—a lower sum of £150.

Ultimately, it can only be up to the judgment of each individual Peer where and how they make that claim. A Peer may spend only half an hour in the House on a given day but, if they spent the morning reading and preparing for a complicated Committee stage on the next day, how are we to judge whether that time was well spent? In the end, all these claims will be made public. I hope that, with the co-operation of the House Committee and the House authorities, we will be able to make these claims known electronically on a rolling basis so that it will be easy to attach contributions to the amount of money claimed. That will create an internal accountability, which will be useful to Peers and public alike.

[Lord Phillips of Sudbury]

My Lords, I hope that I am correct in understanding my noble friend as having indicated that the new scheme will be wholly divorced from the actual expenses incurred by Members of this House in coming here and undertaking their duties. I think that that is right—the noble Lord is nodding. Therefore, his remarks vis-à-vis taxation assume a more important light. I go back to what he started by saying, which is that this House and, indeed, the other place came under a great deal of unwelcome public scrutiny over the expenses arrangements and that the trust in both Houses was severely dented. Some may think that those wounds are not entirely healed. Would it therefore be acceptable if the noble Lord and, indeed, the noble Lord, Lord Wakeham, and his group were to work on the basis that, whatever arrangements are come to vis-à-vis taxation, we have to accept that the allowance will now leave some Members of this place with substantial remuneration—that is to say, a return well in excess of anything incurred by way of expenses—and that it surely cannot be acceptable that this place, of all places, should expect a privilege in tax terms over any other citizen of this land? For us to say that it is much simpler to claim the entitlement and be done with it is fair enough, but that surely cannot satisfy the test that every other person has to live by, which is that, in terms of the tax charge, they can claim only those expenses actually incurred.

[Lord Strathclyde]

My Lords, my noble friend is entirely correct to point out that the reason why we are even discussing this is because trust has been dented, not just in this House but substantially in another place. Both Houses are, in their own way, trying to find their way through this to come out at the other end with a greater understanding between the public and Parliament, so that we can try to rebuild that trust. My noble friend is also entirely correct to say that this is a move away from the expenses regime. We are not asking Peers to demonstrate what they have spent. In fact, we are not hugely interested in what Peers spend their money on, in where they stay or, indeed, in whom they stay with. What we are interested in is: have they turned up? Have they made a contribution? What should the value of that be?

The SSRB suggested in its report that in due course the expenses regime that it proposed should be taxed. I take no particular view on that. I am not an accountant and it is not a decision for me. It may well be a decision for HMRC and the Treasury to take in due course. My further understanding is that, if tax were payable, that would require legislation and that, if tax were taken off, no doubt many Peers would make the case for some sort of rerating to make an allowance for taxation. These are all issues for another day.

There is another view, which I laid out a few minutes ago. We hope that there will be legislation on a reformed House. If there is a reformed, elected House, those Peers—or senators, or whatever they are—will be paid. There is then the prospect in that legislation for another independent body—perhaps IPSA itself—to look at what the recommendations should be.