House of Lords: Allowance

Lord Newby Excerpts

Tuesday 27th March 2018 Lords Chamber

[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 Newby (LD)]

My Lords, I, too, congratulate the Leader on securing this settlement. It is modest but it protects the current level of allowances after years during which they have fallen and provides the basis of a regular uprating in the years to come—and it is closely linked to what happens in the Commons. In the current environment, I simply do not believe that a more generous settlement was politically possible, so it is very much to be welcomed.

In my view this does not mean that we have anything like a satisfactory approach to allowances. The noble Lord, Lord Strathclyde, produced a simple political fix when he introduced the current system, and, while it has met what I am sure were his objectives—namely, a system which survived without inviting much adverse comment—it is by any logical perspective deeply flawed. In the past 10 years, I have seen my allowance in effect doubled—I lived in London when the Strathclyde measure was introduced—and then, when I moved last year to north Yorkshire, halved again. These changes have borne no relation to my participation in the affairs of the House.

Colleagues who have lived outside London for the whole period have seen a real terms fall in their allowances of nearly 20% at a time when London accommodation costs have increased faster than the overall rate of inflation. Personally, I can see no reason why, within a slowly rising funding envelope, we should not move towards a position in which expenses start again to reflect the actual costs incurred by Members who live outside London. I think that would be a much fairer system. However, I realise that there is no consensus in the House to move in such a direction and that the overall funding available to the Lords is likely to remain tightly constrained for the foreseeable future. That being so, I reiterate my thanks to the Leader for securing the increase she has announced today.