House of Lords: Allowances

Lord Tomlinson Excerpts

Tuesday 20th July 2010 Lords Chamber

[Lord Wakeham]

My Lords, I support the Motions.

As noble Lords will be aware, I chaired the ad hoc group of Members which was established to consider the recommendations of the SSRB review and advise the House Committee on how they might be implemented. It may be of assistance to the House if I say a few words about that process.

However, I first thank the Members of that committee who worked with me. It was not what some people might refer to as a patsy board. We had a series of vigorous discussions and reached conclusions, but I would not pretend that the group had an easy task, and I hope that our report has made a useful contribution to the debate. I am pleased that most of the group’s recommendations have been accepted by the House Committee and by the Government. We placed great value on conducting as thorough and wide-ranging a consultation of noble Lords as possible, and we were rewarded—if that is the right word—with a wealth of views, diverse though they inevitably were.

If I was not aware at the beginning of the process, I was certainly aware by the end of it that no one would be able to design a system of financial support which would meet with universal support. Inevitably, any change to the current system would create winners and losers.

In carrying out our report, the group stuck to the principles and structure of the SSRB review. That was our remit from the House and it was right to do so. I believe that the recommendations in the group report represented a much needed adjustment, simplifying to an extent the SSRB proposals while keeping their core and remaining cost-neutral to the current scheme.

Yet the further we went in preparing our report, the more I was convinced that, in an ideal world, we should put in place a still simpler scheme rather than increasing the existing scheme’s complexity and attendant bureaucracy. The case for a simpler scheme grew stronger with the coalition Government’s announcement of their intention to reform your Lordships’ House for the start of the next Parliament. It seemed to me less and less sensible to overhaul the current scheme with more complex arrangements, possibly on a very temporary basis, particularly when the political consensus appeared to be that a reformed House would in fact be a salaried House. For this combination of reasons the group, with one Member dissenting, decided to invite the House Committee to consider the possibility of,

“a simplified allowance, to replace the daily allowance … recommended by the SSRB”.

We thought that such an allowance,

“might operate for the life-time of the … Parliament”,

until the “reform of the House” and that such a scheme would be “simple”, easy to operate and,

“easy to explain to the public”.

On publication of the group’s report, the Leader of the House put forward his proposals endorsing such an approach.

I shall mention one further point, which is on taxation. I welcome and agree with the opening remarks made by my noble friend the Leader of the House. The SSRB suggested in its report that,

“in principle fees for attending the House of Lords should be taxable”,

and that,

“until legislation is amended to bring … the House of Lords into the tax system, the fee should be set at a lower level so as to make an approximate allowance for the absence of tax”.

I understand that officials from the House authorities met officials at HMRC to confirm that it was their view that, in the absence of legislation, the fee or allowance would not be subject to tax. The level of the allowance is set on the assumption that it is not taxed. If it were to be so as a result of new legislation, the level would have to be looked at again. Speaking entirely personally, I do not think that the Inland Revenue has the slightest desire to get involved in the complications of taxing at all. It does not think that it is losing a penny piece by these present arrangements.

As I have said, I believe that there is no perfect solution; my noble friend’s proposal is, however, a fair solution. It is straightforward and sweeps away the expenses system as it stood. It will be cheap to administer and easy to explain. While I regret that some noble Lords will be worse off, I believe that the proposed level, combined with the reimbursement of travel costs, will mean that all noble Lords will have sufficient support to enable them to contribute to the important work of this House. On that basis, I agree entirely with my noble friend’s proposals.

[Lord Tomlinson]

My Lords—

[Lord Davies of Coity]

My Lords, I want to ask a very simple—

--- Later in debate ---

[Lord Tomlinson]

My Lords, the Statement of the noble Lord, Lord Strathclyde, on 28 June was in my opinion deficient in a number of respects. It was not fully accurate. Today’s resolution tabled by the noble Lord rests on that, which I believe is a weak foundation. I shall give three examples of where his Statement of 28 June was inaccurate. The noble Lord said that,

“Lord Wakeham was invited to lead an ad hoc group to consider, consult and advise on the implementation of a new system of financial support”.

That is not what we were asked to do. The remit for the ad hoc group established following the Motion agreed by the House on 14 December—as is shown at paragraph 3.6 of the ad hoc committee’s report—was that it should,

“consider and consult on issues in the SSRB report and advise on their implementation”.

On 14 December 2009, the House also agreed that the principles and architecture of the SSRB should be part of our mandate.

Secondly, the noble Lord, Lord Strathclyde, said that,

“the group suggests an alternative option, a simplification of the SSRB’s approach to overnight allowances”.—[Official Report, 28/6/10; col. 1512.]

In fact, the ad hoc group had completed its report and was persuaded to reopen it following certain discussions that took place in the House Committee involving the Leader of the House. The genesis of the new idea was not in the ad hoc committee but elsewhere, and it was that which led to the paragraphs in the report to which I added my note of dissent—in particular, my dissent to recommendation 17 in the ad hoc committee’s report. That arose from a reopening of the report after the committee had finished its deliberations. Recommendation 17, however, did not suggest an alternative system. It said that,

“consideration might also”—

three very important words—

“be given to … putting in place a simplified allowance to replace the daily allowance and the overnight allowance”.

That brought into play the very views that the Leader of the House had been discussing with the House Committee, on which the ad hoc committee never had a formal paper. However, there was a majority view that perhaps we should leave the matter open in the recommendation, which led us to say that,

“consideration might also be given”.

Thirdly, the noble Lord, Lord Strathclyde, also claimed that the proposal was broadly cost-neutral compared with the existing scheme. However, the extension of what has been seen as a payment for the legitimately incurred costs of overnight stay in London and extending it to all Members of the House destroys the pretence of cost-neutrality. On my estimation—and I have checked this with the Finance Department—it adds possibly £1.5 million to the cost of the scheme. If we really think that the proposal for a payment of £150 is going to recoup that £1.5 million, I suggest we are living in cloud-cuckoo-land, but that is what will need to happen in order to achieve cost-neutrality.

Perhaps I may also say, more in sorrow than in anger, that when on 28 June I raised my reservations, in less detail than I am doing today, the noble Lord, Lord Strathclyde, rather disingenuously, said to me, a member of the ad hoc committee—I assume still compos mentis, following its proposals and making some contribution to its work—

“If the noble Lord reads the document, as I have done”.—[Official Report, 28/6/10; col. 1518.]

I not only read it; I helped to prepare it. I hope that I have demonstrated that I have read our report accurately and not in the rather inaccurate way in which the noble Lord did.

I turn to my specific objections to the new system. The first one is on grounds of equity. It is not a demonstration of equity to say that you treat everyone the same when the costs of attending your Lordships’ House are vastly different. A noble Lord who lives around the corner and can walk to the House is being treated in exactly the same way as another who lives in the furthest reaches of the country and who, in order to attend here, is forced, having no option whatever, to get accommodation in London. That is not equity; it makes a mockery of the word. In mocking equity, it also produces a potential threat to the regional balance in this House—a regional balance that Members of this House hold to be important and which was part of the remit given to the SSRB.

Those are two fundamental questions, and there is the question of costs which I have already mentioned. There are still taxation implications but I shall not go into them further. We have seen in this resolution a concern about a problem with our expenses regime but as far as I can tell from reading the press, in each and every instance there was an allegation of somebody claiming a London overnight allowance to which they were not entitled. And so what do we do? We give everybody the London overnight allowance, wrap it all up together and call it a single per diem. I do not think that that is either fair or right. I am also very fearful that those who tell us that that will satisfy public opinion and the press will live to regret their optimism. I can see no basis on which this system will or should satisfy public opinion, and there is no basis on which this system should or will satisfy the media. It is the antithesis of the transparency that we were talking about. We will regret it and the system will not have my support.

[Baroness Harris of Richmond]

My Lords, it may be appropriate at this juncture to speak to the amendment in my name to which we will come later. In doing so, I declare an interest as one who travels weekly to your Lordships’ House. I am also a recipient of a senior railcard.

My amendment refers to paragraph 30 on page 8 of the report and I shall speak to it for two specific reasons. First, like the noble Lord, Lord Tomlinson, I believe that it discriminates against those of us who travel from the far reaches of the United Kingdom to participate in the work of your Lordships’ House. For those of us who are old enough to use a senior railcard it is possible to purchase a first-class flexible ticket for just below the cost of a walk-on standard fare. That is fine for those who have a senior railcard. However, for younger Members of this House who live in the far reaches of this country and who do not have the advantage of age, the difference between the cost of the two tickets is enormous.

That is unfair and ageist. It takes no account of those younger Members who might have disabilities so it is discriminatory. The House Travel Office advises me that anyone without a railcard who wishes to purchase a first-class ticket would have to book well in advance and keep to that date and time to be within the guidelines. As your Lordships know, it is impossible to say when the House will finish its business, so it would be extremely difficult to book ahead. Other Members may wish to address that issue. If, for instance there is a difficulty on the day of travel, for whatever reason, and a pre-booked advance ticket has been purchased that ticket will be invalid if it is not used and the new ticket will have to be purchased at the cost of the full walk-on standard fare. It will then be a battle to try to persuade IPSA to refund the original fare. That moves me on to my second point.

I was perturbed that it was IPSA’s solution to travel for Members of the House of Commons that prevailed with the House Committee for your Lordships' House. I had understood that this House generally accepted the SSRB rulings, not those of IPSA, which was set up to deal with arrangements in another place. Indeed, on page 7 of the report, it is the SSRB which advises on all other parts of our travel expenses, and the House Committee concurs with its proposals in those parts of the report. I find it strange, therefore, that we should suddenly find it introducing IPSA into the mix. Paragraph 30 is the only part of the report in which IPSA appears. I find it invidious that its proposals are preferred to those of the SSRB. That creates a two-tier membership of the House.

I thought long and hard about seeking the House’s endorsement for my amendment. In the almost 11 very happy years that I have spent working in this House, I have never once challenged the will of the House Committee, and I do so today with great sadness. I know that many hours of work went into the report, the main conclusions of which I am very happy to endorse—except paragraph 30. It is that simple but important change that I wish to revisit, and I sincerely hope that the House Committee will feel able to do so.