Committee

House of Lords (Members' Taxation Status) Bill [HL] – in the House of Lords at 4:48 pm on 12th March 2009.

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Votes in this debate

Motion

Moved by Lord Oakeshott of Seagrove Bay

That the House do now resolve itself into Committee

Photo of Lord Trefgarne Lord Trefgarne Conservative 5:08 pm, 12th March 2009

My Lords, I do not intend to delay your Lordships for more than a short time on this Motion which the House will no doubt agree in a few moments. However, I hope that the noble Lord, Lord Oakeshott, understands that many of us face the prospect of going through this Committee stage with considerable regret.

The fact is that the Bill has now been before your Lordships, I think, three times in identical terms. The noble Lord has not apparently been moved by anything that has been said on the various occasions upon which the Bill has been considered. The result, therefore, is that we receive the identical Bill yet again. Would it not have been helpful for the noble Lord to have taken into account some of the views expressed on the previous occasions the Bill was before your Lordships, and reflected them in the drafting of the Bill now before us, thereby perhaps reducing the need for such an extensive Committee stage as we are now facing?

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

My Lords, it is slightly unusual and novel for me to deal with this matter, but I am happy to do so. I say to the noble Lord, Lord Trefgarne, that this is the second time—not any other number of occasions—that I have introduced a Bill in this form. He is right: I introduced a separate, rather different and much smaller—and, I believe, not effective—Bill in previous Sessions, but that did not progress. This is the second time that I have introduced it in this form. However, what is totally different is that we are deeming, or seeking to deem, people to be residents of this country. He is quite right: I introduced the Bill in the same form at the beginning of this Session as in the previous one, although it had had detailed consideration. My noble friend Lord Goodhart and I took careful note of the Second Reading debate in January, and subsequently tabled the amendments before us today. Therefore, we have taken account of what was said. However, it is the second time that the Bill has been introduced and we now look forward to moving forward.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament

My Lords, before the noble Lord is too critical of my noble friend, my recollection is that there have been at least three Bills from the noble Lord on this subject, although I am happy to accept his assurance that this is the second. What is undoubtedly true—as the noble Lord has agreed—is that the Bill before us is identical to the Bill that he chose not to progress in the previous Session of Parliament for whatever reason, although I was glad that he did so. It is extraordinary that in the Marshalled List that we are about to deal with he has seen fit to table precisely the amendments that we suggested he should look at last year. If he had taken the trouble to reread the Committee stage that we had last year and taken into account the amendments that were proposed at that stage, he would not have needed to propose the amendments that he will propose today. I suspect that I know what happens in the noble Lord's mind. He walks into his office, has a great idea and says to his secretary, "Remember that Bill we did last year? Press the button, belt it out again; prepare 10 press releases". That is not the way we should legislate.

I do not know whether my noble friend is tempted to press this Question to a Division. However, if he were to do so, I would be unable to support him. At any stage of my being in this House, as a Member of either the Government Front Bench or of the Opposition, I do not think that I have ever been through a Committee stage when I have not been very grateful for the advice and helpful contributions from all sides of the Chamber. I, for one, am rather looking forward to this Committee stage. I hope that, at the end of it, we end up with a far better Bill than we have before us at the moment.

Photo of Lord McNally Lord McNally Leader in the House of Lords, Spokesperson for Constitutional Affairs , Liberal Democrat Leader in the House of Lords

My Lords, the noble Lord, Lord Strathclyde, is, as ever, being extremely helpful, not least in trying to temper his colleague's enthusiasm as regards a possible Division, and for that I am grateful. As regards bringing this Bill back, I recall that Wilberforce brought back the anti-slavery Bill successively over 35 years. Therefore, we have some time to go before we get into Wilberforce proportions. If the noble Lord, Lord Trefgarne, feels so strongly about the Bill being introduced a second time, he should have divided the House at Second Reading, not on the eve of the Committee stage. However, I am thankful for the wisdom of the noble Lord, Lord Strathclyde, at this moment of crisis for the House.

Motion agreed.

Clause 1: Taxation status of members of the House of Lords

Amendment 1

Moved by Lord Selsdon

1: Clause 1, page 1, line 2, leave out subsection (1) and insert—

"(1) Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes.

(1A) For the purposes of this Act "British citizen" means—

(a) a citizen of England, Wales, Scotland or Northern Ireland; or

(b) a citizen of Her Majesty's Crown Dependencies and Her Majesty's Crown Dependencies are—

(i) The Isle of Man,

(ii) The Bailiwick of Jersey,

(iii) the Bailiwick of Guernsey; or

(c) a citizen of Her Majesty's Overseas Territories who holds British citizenship under the British Overseas Territories Act 2002 and Her Majesty's Overseas Territories are—

(i) Anguilla,

(ii) Bermuda,

(iii) British Antarctic Territory,

(iv) British Indian Ocean Territory,

(v) British Virgin Islands,

(vi) Cayman Islands,

(vii) Falkland Islands,

(viii) Gibraltar,

(ix) Montserrat,

(x) Pitcairn, Henderson, Ducie and Oeno Islands,

(xi) St Helena and her dependencies of Ascension Island and Tristan da Cuhna,

(xii) South Georgia and South Sandwich Islands.

(1B) For the purposes of this Act a member of the House of Lords who is a citizen of one of Her Majesty's Realms may be granted British citizenship without surrendering the current citizenship of a country of Her Majesty's Realms which are—

(a) Antigua and Barbuda,

(b) Australia,

(c) The Bahamas,

(d) Barbados,

(e) Belize,

(f) Canada,

(g) Grenada,

(h) Jamaica,

(i) New Zealand,

(j) Papua New Guinea,

(k) St Kitts and Nevis,

(l) St Lucia,

(m) St Vincent and Grenadines,

(n) Solomon Islands,

(o) Tuvalu.

(1C) For the purposes of this Act, a member of the House of Lords who was born in any country of the Commonwealth prior to independence of that country may be granted British citizenship without surrendering the current citizenship of the country of birth."

Photo of Lord Selsdon Lord Selsdon Conservative 5:15 pm, 12th March 2009

I find myself in an extraordinary position of considerable nervousness, having recently with the noble Lord, Lord Oakeshott, done a "windy p". I find myself sitting where I started in the House behind the Liberal Democrats. Therefore, today I wear a yellow tie with a little bit of blue in the form of an aster and a little bit of red.

I begin here for a historic reason which goes back to my grandfather, who stood as a tariff reformer and a unionist in north-west Lanark, initially in 1903 and then in 1906, when he was elected. Your Lordships will recall that in those days a deal was done between Liberals and Conservatives and Unionists, or whatever they were called, that they would not stand against each other because the union was the most important thing. My grandfather went on to be MP for North Down. He never made it to Wales, but he came down to Croydon and spent 26 years in the House of Commons before coming here. I shall now explain some of the reasons why I am speaking.

I feel very moved about the importance of the House of Lords and the House of Commons, and of every one of our realms and territories for which Her Majesty the Queen is responsible. This is in part why I am moving my amendment. It is to inform, but I want, first, to clear the air. Your Lordships will know that we are midway between the ides and the nones of March and it was 510 years ago that Shakespeare wrote "Julius Caesar".

For me, it is slightly difficult, because I am superstitious and I have a gift from God knows where of being able to divine water and other things. I have certain feelings at the moment, and I go back to the days of the raven and the fox. Both were superstitious and worrying characters of the gods—normally the Celtic gods of the Irish, the Scots and the Welsh. It was said that the raven was a sign of doom or good. I must ask the noble Lords in front of me not to turn to look over their shoulders at me at this moment, because if you looked over your right shoulder and saw a raven over the left shoulder or the right shoulder, one represented doom and death, and the other represented gain and glory. The ravens always formed an important part in battles. As those of Welsh extraction will know, the Welsh historically used to play chess with ravens.

The other creature of superstition is the fox, but this time it depends on whether the fox looks at you over his right or left shoulder. One is doom and death, and the other is gain and glory. These superstitions are carried throughout history, and that is one reason for the Tower of London, which is meant to have a Welsh saint buried beneath it. I raise this just to show that some of the histories and traditions of your Lordships' House are not written in tablets of stone, but are procedures that have grown up over time and are based now, I suppose, upon various conditions, as we call them.

I looked up what I shall call the rules and regulations, the code of conduct, and went through them in great detail over the past few weeks. I also went over the codes of conduct for the Civil Service, which are equally strong. In your Lordships' House one of the worst things that you can possibly do is, I think, to criticise individual Members. I wish to refer to two texts, which I then shall dismiss in a rather light-hearted way. They are not light-hearted, but to show that I was not behaving badly, I went as a member of the Information Committee and asked if I could look up, while attacks on your Lordships' House were being levied from the outside world, how they originated, whether they were misrepresented, and what they stemmed from. How could we correct them? That is why I have tried to include a code of conduct in the Steel Bill.

I turn to comments in various newspapers. There were some things in the Times but what hurt me most were the comments in Australia. My grandfather was an MP in Scotland, my great-grandfather was provost of Edinburgh and another great-grandfather was the first lord mayor of Melbourne and one of the first Members of the Australian Parliament. The Australian stated:

"'Tax-dodgers, bung-takers, fraudsters and perjurers must be cleared out of parliament now,' Oakeshott said".

A similar comment appeared in the Times. I thought that I would have a look at the Telegraph as well; last year, it referred to a certain Michael Brown, who gave,

" a record £2.4 million ... to the Lib Dems' 2005 General Election war chest ... Following the donation he flew in a private plane with then leader Charles Kennedy and dined with other senior Lib Dem figures.

The crooked businessman—who will not be sentenced until he is caught—channelled the gift through a company called 5th Avenue Partners".

We seem to have heard about that from all sides of the House.

The noble Lord, Lord Oakeshott, will remember that, after he first commented on the Bill, I spoke to him, wrote him a very friendly letter and circulated that letter. I said that he should possibly try to understand because he has not been here so long. However, I realised that he has done a lot of good, I suppose, for the Liberal Democrat party by promoting this worldwide. I am told once again by the information sources available to me that almost all these issues started with a telephone call, a press release or some sort of statement. Was the noble Lord, Lord Oakeshott, responsible for that? In particular, to which persons, peoples or others was he referring? Perhaps we could get that out of the way by calling it overt enthusiasm. Throughout the world, we are being attacked.

That is of considerable importance because the value of this House lies in the respect that it commands outside. It is not an expensive body—it costs £127 million a year. I have asked noble Lords to tell me which Members of this House have positions on non-governmental public bodies. Only two people have so far replied; 92,000 people are employed in those bodies, which incur an expenditure of £45 billion a year. I do not know how many times the total cost of the House of Lords and the House of Commons that is; they are meant to be able to advise the Government. In that regard, I wrote to the noble Lord, Lord Oakeshott, and said that perhaps there was something else at which he could direct his energies by asking who those people are.

The Leader of the House responded and gave me the information. The Minister also responded by saying, in relation to the Forestry Commission, "None". I thought that that was rather unfortunate. Many noble Lords have forests, and forestry is one of their areas of knowledge.

Photo of Lord Selsdon Lord Selsdon Conservative

I am most grateful to the noble Lord. Of course, before I do these things I consult the Leader's office and everyone else. I may have the ability to string some words together but in writing I am not quite so good; it is difficult. My point was that £43 billion is being spent on I know not what.

I turn to the amendment. We want to say who should be a Member of this House. Frankly, I do not believe that more than 400 Members should be appointed, directly or indirectly, by a prevailing Prime Minister; nor do I believe that those who merely inherited a title have the right to be here. Those of us who were appointed by an Act of Parliament in 1999 believe that we have a duty to be here. If you look, you will find that among those with the highest attendance are those who were elected following the 1999 Act. We feel that we are in part guardians of history.

I turn to the specific details of the amendment, which was designed to help the noble Lord, Lord Oakeshott. I tried to remove from the Title the word "taxation", leaving just the word "status". What first determines taxation throughout the world is status: who you are, your nationality, where you live and so on. The Public Bill Office said that I could not do that, so I thought that, first and foremost, I would say that anyone who was a Member of the House of Lords should be British or have the opportunity to be British. Therefore, the question is: what is British? Proposed new subsection (1) in my amendment states:

"Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes", although I wanted to leave out "for taxation purposes". The most interesting thing about it is that anyone who attends the House of Lords for more than the equivalent of 90 days—it is quite complicated—is automatically—

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

I am grateful to the noble Lord, Lord Selsdon, for giving way. The short—

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

I was looking over my right shoulder in order to impose doom and gloom on the noble Lord. I apologise for looking behind me. The Long Title is to:

"Make provision about the taxation status of members of the House of Lords".

However, the noble Lord, Lord Selsdon, now seems to be raising an entirely different subject which falls well outside the Long Title, and that is the question of who should or should not be eligible to become a Member of the House of Lords.

I should also point out here that citizenship of the United Kingdom or Great Britain has no relevance to the tax status of Members of the House of Lords, because taxation depends on domicile and residence and not at all on nationality. In those circumstances, I wonder whether the noble Lord, Lord Selsdon, thinks that the appropriate course following his very entertaining introduction is to recognise that his amendment has no relevance here and that he should withdraw it.

Photo of Lord Selsdon Lord Selsdon Conservative

I am most grateful to the noble Lord. That is exactly what I hoped someone would say. Noble Lords would not expect me not to have consulted widely or to have had considerable discussions in this House and with my accountants, who—not regrettably—are very strong Liberal Democrat supporters. Therefore, I provided the Public Bill Office with the advice that was given independently by a well known accountancy firm, whose members openly admit that they are very strong Liberal Democrat supporters. I think it is good that we have a party in this House with supporters.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour

Before this becomes a private spat between the Liberal Democrats and the Conservatives, I point out that I am not a Liberal Democrat and that I support the principles of the Bill. So a little less about all those who support it being Liberal Democrats would be appreciated.

Photo of Lord Selsdon Lord Selsdon Conservative

Today, I noticed sitting on the Benches a well known member of the Labour Party who, like me, was wearing a yellow tie, but no one is on this side. I fully accept the noble Lord's point and I will come on to the Labour Party in a moment.

I am saying, first and foremost, that anyone who is appointed to this House should be a British citizen or have the right to be a British citizen. That is important. I do not see how you can change the citizenship, domicile or residence of everyone in the House without forcing them to surrender an existing relationship or an existing situation. Therefore, for the purpose of this Bill—

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

Will the noble Lord address a very important point here? The word "citizen" is not mentioned anywhere in the Bill for the very good reason that we are not seeking to change anyone's citizenship. That is not the intention behind the Bill, and I wonder whether it is appropriate to try to go totally outwith the meaning of the Bill.

Photo of Lord Selsdon Lord Selsdon Conservative 5:30 pm, 12th March 2009

I would not have done this had I not consulted, for a considerable period of time, with the Public Bill Office and with others. They insisted that the word "taxation" should be placed here. Subsection (1) reads:

"Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes".

I think that is absolutely correct. If I am wrong, I shall apologise to the noble Lord and if he is wrong, I shall expect a full case of champagne at modern-day prices.

The definition of a British citizen is a citizen of England, Wales, Scotland and Northern Ireland. I was concerned because taxation in some of those areas varies and there are different conditions in relation to domicile in Scotland, which I have already disclosed: you are automatically domiciled in Scotland if you have a lair, meaning you own a property where you are to be buried. As I explained, I have several and, therefore, I shall certainly be drawn and quartered but not necessarily hanged. I do not see how anyone could object to that definition.

Subsection (1A)(b) states:

"a citizen of Her Majesty's Crown Dependencies".

They are British citizens and British subjects. Of course, they may pay tax in their own areas, but they are entitled, under an Act, to have British passports. They include the Isle of Man, which sometimes has another name and which also has a different taxation situation, and the Bailiwick of Jersey. When someone said, "In your bailiwick", I did not realise what a bailiwick was. I should have known because when I worked with the Midland Bank, Samuel Montagu and others, we worked closely with our subsidiaries and others in the bailiwicks—I did not realise that Sark is not included—and the Isle of Man. I declare that as a banker I have had over a long period a relationship either through my employers or personally with almost all the listed territories.

Those three areas have certain taxation problems which are currently being attacked. Historically there were no problems when the Bank of England was in charge and was directly or indirectly supervising all the bodies that were British, and the regulation was very tough. The noble Lord, Lord Oakeshott, is worried about tax havens and people abusing the tax situation. As he will be aware, in 50 the Romans first arrived in Brading Haven, just where he lives in two thatched cottages. Although that part of the Isle of Wight later had problems with Ethelred the Unready and a battle with King Arwald, it was a haven. Brading Haven became Bembridge haven, where I used to sail as a small boy. I would take a boat over from Chichester. We would take out the bung on the way over and put it back in when we arrived near Brading Haven.

Historically, there were certain tax advantages there. I wish to disclose another interest: 20 per cent of the ships of the world are Commonwealth flagged. It is being suggested now that with shipping in a bad state, we should consider being able to dual-flag ships and possibly incorporate them in one of the British territories. One suggestion is the Isle of Wight.

The second area is British Overseas Territories. Their citizens hold British citizenship under a specific Act which is not very old: the British Overseas Territories Act 2002. Their citizens are entitled to be British and to hold British passports.

The problem with all these issues, as the noble Lord said, is that anyone who is a Member of this House would automatically be deemed to be taxed. The word "deem" is an extraordinarily difficult word to apply in law. Who does the deeming?

Photo of Lord Selsdon Lord Selsdon Conservative

It should be HMRC. Those territories have seen the stories flashing round in the press and feel pretty insecure. The taxation situation for them is an individual one. Any Member of the House of Lords who has been here for more than 90 days after midnight—I have forgotten the latest form—will automatically be deemed to be a British resident for tax purposes. I was trying to find a way of saying that if someone is appointed here, they should have a minimum attendance.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader in the House of Lords, Spokesperson for Foreign and Commonwealth Affairs

The noble Lord is now in his 20th minute. He was in his 10th minute when he first mentioned the amendment. I think that we can all recognise an attempt to delay proceedings that is very close to being an abuse of the House in a Committee debate. I ask him to draw his remarks to a close.

Photo of Lord Lyell Lord Lyell Conservative

I apologise to the noble Lord, Lord Wallace, and to the mover of the amendment for being late, but I have listened to what my noble friend had to say and I really worry for the noble Lord, Lord Wallace. What my noble friend is saying is entirely in line with the amendment. If the noble Lord, Lord Wallace, would be good enough to look at the amendment, he will find that paragraph (x) includes the Pitcairn, Henderson, Ducie and Oeno Islands. I was fascinated to know why those islands will be specified as British for tax purposes. I am sorry if that is surprising to the noble Lord, Lord Oakeshott, who pays considerable attention to detail, but it has been explained by my noble friend. I am certain that my noble friend will not take long and has no intention of abusing the House.

Photo of Lord Selsdon Lord Selsdon Conservative

I was about to get to the third lot, which is of course Anguilla, Bermuda, British Antarctic Territory and British Indian Ocean Territory. As your Lordships will know, the noble Lord, Lord Avebury, introduced a proposal a few days ago that someone from Oeno, or I have forgotten what island, should be treated as a British citizen, because in the Indian Ocean other islands are occupied. The second list is a perfectly reasonable list of all those territories that are British Overseas Territories under the 2002 Act. The two together constitute Her Majesty's Territories. We should recognise that Her Majesty gives us our Letters Patent and our Writs of Summons.

What does that mean and why are those territories important to us? Your Lordships should be aware that we as an island have little future unless we are international. With the balance of trade deficit in visibles of £100 billion, we must look back to where we traded historically and where we can create added value. Why are those people British citizens? It is because, historically, we traded with them and they were part of our empire.

We forget that in these days of lack of resources and materials, we should take another look at the coastlines of the world and the territorial waters. Your Lordships will be aware that the Commonwealth has more coastline than any other territories in the world put together. You will have seen not so long ago in discussions on the marine Bill that on the map that shows where the territories are, 50 per cent between somewhere and somewhere else includes Rockall. If the Royal Marines had not got there and that British subject had not stuck a flag up, we would not have been able to claim the extraterritorial waters.

I suggest that where we have a British territory, we should claim the territorial waters up to 50 per cent towards the mainland so that, with those islands, we would have substantial authority. After all, 92 per cent of all CO2 is absorbed by the sea, so there is a green element to this.

That is not just a stupid idea. I wanted to identify what were British territories. Here, in an amendment to a Bill, they are all there. I have the details of all their populations; I have everything that your Lordships would expect me to know. Of the total of 221 countries in the world, the British are the most dominant in terms of potential area, although not necessarily in wealth.

We come to the further grouping, which is Her Majesty's Realms. That started me off because of Australia, my family relationship with Australia and the letters that I have been receiving. They are writing a family history at the moment and asking, "What is all this attack on us?". Her Majesty's Realms are where the Queen is effectively head of state. They are not necessarily British subjects and therefore, in the amendment, I have stated,

"For the purposes of this Act, a member of the House of Lords who was born in any country of the Commonwealth", should,

"be granted British citizenship", but for those who are citizens of Her Majesty's Realms, they,

"may be granted British citizenship without surrendering the current citizenship of" the country that they are from. That is perfectly reasonable.

Having identified Her Majesty's Realms and all territories with which we are related and trade, we now come to the question of citizenship, passports and relationship. I will argue until the end of the day that your nationality is one of the first things that triggers anything related to tax: which passport do you have? Some amendments propose that those who go off and work for international agencies should not be taxed. This is the wrong way round. If you are British, you should pay tax in the country in which you are resident, and if you attend the House of Lords you should certainly be resident here for more than 90 days. Should your Lordships wish it, you would expect me to have a list of those who have not been here for more than 90 days.

One of the obligations is regular attendance here and regular participation. If you look at the taxation related to where you are resident, you must also accept that people can be resident in other countries because they may live and work there as well and they may have dual nationality. They will also have dual tax requirements. In England, people must be resident for 90 days. In other countries, it may be 180 days or 120. It is a complete nightmare to harmonise, and where there are no double taxation agreements there will be a problem.

Ordinary residency is also a very complicated issue, as I pointed out to the noble Lord, Lord Oakeshott. You cannot just be deemed to be ordinarily resident; you are ordinarily resident once you have been back in England, if you have worked or been abroad. Noble Lords should realise that 12 million, or 15 million, British nationals live abroad. You are deemed to be ordinarily resident there after a period of time, but my principle is that if you are to be appointed a Member of the House of Lords, you will be here and will be taxed as a resident.

Photo of Lord Wallace of Saltaire Lord Wallace of Saltaire Deputy Leader in the House of Lords, Spokesperson for Foreign and Commonwealth Affairs

I recall intervening many years ago on Lord Shore, who was a rather long-winded Member of this House whom many of us will remember. As he entered the 25th minute of a speech in Committee, I pointed out that the Companion says that long speeches tend to weary the House. He sat down within 30 seconds. I thought that that was a very good reaction to a gentle comment.

Photo of Lord Selsdon Lord Selsdon Conservative

This is a perfectly reasonable statement to make. This is not a long speech; this is a long amendment, which covers a whole range of countries.

I will not repeat what I said last time. My point is that, if you are a British citizen, you should be allowed to be a British citizen. Everything that I have down here is correct; it has been checked again and again. The suggestion is that any residents of Commonwealth countries—the Queen is also the head of the Commonwealth—should be entitled to be a Member of the House of Lords if they are invited to be so. Noble Lords should know that several people in this House are not British subjects in the full sense of the word but come under this heading. My noble friend Lady Gardner of Parkes, is partly domiciled in Australia. She is a very honourable woman indeed, and has disclosed all this. Why should she be forced to change? You cannot change your domicile of origin unless you surrender all relations with that country, including membership of your clubs. That is an unfair imposition and totally wrong.

Domicility is a very difficult issue—I mentioned this when some noble Lords were not here—but domicile of origin is a clear matter. Another scenario is even more worrying. Domicile of origin should relate to your taking the domicile of your father at birth, with the right to change at the age of 16. Not so long ago, there was a case in which a woman went to court to say that your domicile of origin should relate to the domicile of your mother as well, and she won. In the case of domicility, are we saying that domicile of origin relates only to the domicile of the father, or can it also relate to the domicile of the mother?

These may be tiny issues, but they should be raised in Committee, otherwise you have a completely imperfect Bill. It is, in fact, a useless Bill. I have used that phrase before. It does not mean that it has no use, but it has less use than anything that anyone else can think of.

I may have made a hopeless speech, but I make the point that we should deal with people who are British. The British and citizenship should come first. I beg to move.

Photo of Lord Haskel Lord Haskel Labour

If this amendment is agreed, I cannot call Amendments 2 to 10 and Amendment 12 because of pre-emption.

Photo of Viscount Astor Viscount Astor Conservative 5:45 pm, 12th March 2009

In preparation for my noble friend's amendment, I printed a copy of an HM Treasury document, Reviewing the Residence and Domicile Rules as they Affect the Taxation of Individuals: A Background Paper.It is certainly a worthy document that gives a lot of background information. What is interesting is what it has to say on the historical perspective:

"The current rules on residence and domicile can be traced back to the introduction of income tax in 1799 to meet the cost of the Napoleonic wars. The regime has changed little since its introduction".

In 1799, before the noble Lord, Lord Oakeshott, could accuse us of trying to avoid paying tax, we were trapping furs up the Hudson river. Indeed, I am not sure that my family knew that the Napoleonic wars were going on. What this shows is that the rules have been around for a long time and that the noble Lord, Lord Oakeshott, wishes to make some important changes. He intervened on my noble friend to say that citizenship has nothing to do with this issue.

I have before me the so-called White Paper published by the Government, although it can be regarded more as a Green Paper because it sets out a menu of options. On nationality requirements, it states that the Government's view is that,

"there is no case for changing the current nationality and citizenship requirements for membership of the second chamber in advance of any wider changes in this area".

That seems clear enough. Indeed, I am not entirely clear about the nationality requirements for this Chamber at the moment. No doubt the Minister can enlighten your Lordships. However, the important thing about this White Paper, one that I believe was endorsed by my noble friend on the Front Bench, is that the Government propose that,

"in the absence of any other changes to nationality requirements for membership of the legislature, British citizens and qualifying citizens of the Commonwealth (including citizens of British Overseas Territories) and citizens of the Republic of Ireland would be eligible for membership of a reformed second chamber".

That is a clear statement by the Government that they want to encourage people living in the overseas territories, the list of which is included in my noble friend's amendment, to come and attend this House should they be picked by the Appointments Commission. I think that the commission said, and the Government agreed, that it would look only at possible candidates for your Lordships' House who agreed to be resident in this country. That is fair enough because, if you are resident in this country, you pay English taxes. However, the noble Lord's Bill does not just include residents; it covers residents and domiciles.

My question is this, and it is as much for the noble Lord, Lord Hunt, on the government Front Bench as it is for the noble Lord, Lord Oakeshott: did he expect, when he wrote this, a candidate from a British Overseas Territory appointed to your Lordships' House automatically to change his domicile as well as his residence? The noble Lord will be aware that you can be resident in more than one country, but you can be domiciled in only one. Given that, the amendment moved by my noble friend Lord Selsdon is very apt. It seeks to ask the Government what they mean in their statement about including the citizens of British Overseas Territories as possible candidates for membership of this House. In fact, they have gone further than my noble friend because I do not think that he has included citizens of the Republic of Ireland, whom the Government seem to want to include. Of course, if you are a citizen of the Republic of Ireland and you move to this country, you have an automatic right to vote here. What I do not know is whether the Government, in considering someone for inclusion in this House, would ask them to move their domicile from the Republic of Ireland to this country. It is an interesting area and my noble friend has brought up an important subject.

Perhaps I may say one thing to the noble Lord, Lord Oakeshott. In the debate on Second Reading, I made it entirely clear that I was in favour of any Member of your Lordships' House who is resident in this country paying all their taxes. However, following that, I took my wife on holiday—sadly, not to a tax haven, but to somewhere quite expensive. I suddenly received a call and was told that the noble Lord, Lord Oakeshott, was quoted in the Daily Telegraph. I do not know whether the quote was right, but it said that I was in favour of Members of your Lordships' House sitting in this Chamber not paying tax. That is not true. It is ridiculous. It is rather like saying that, if a noble Lord on the Liberal Benches introduced a crime Bill and one opposed the details of the Bill, one could be accused of being in favour of crime, which is not the case.

I want to make it clear to the noble Lord, Lord Oakeshott, who I am sure was misquoted even by such an important and well regarded newspaper as the Daily Telegraph, that I and, I think, all my noble friends on these Benches who attend your Lordships' House are in favour of paying their taxes. That does not mean that we necessarily agree with everything in the noble Lord's Bill.

Photo of Lord Trefgarne Lord Trefgarne Conservative

One of the difficulties with a Bill such as this, which sets out to correct what the noble Lord sees as a difficulty, is that in correcting one difficulty new difficulties are created. Like my noble friend Lord Astor, I, too, am in favour of every Member of your Lordships' House paying their taxes. When I read the reports to which my noble friend referred, I, too, wondered how they could have originated in the newspaper that I read, which happens to be the same as my noble friend reads. Is it possible that someone in the Liberal Democrats' machinery is leaking the alleged views, which are wrong, of my noble friend? I hope that the noble Lord, Lord Oakeshott, will disclaim responsibility for those most unfortunate and quite improper reports referring to my noble friend.

On the amendment tabled by my noble friend Lord Selsdon, I should like to ask him whether he is entirely satisfied that the lists of the various countries are correct. I ask that because, during my somewhat inglorious short career as a junior Minister, I came across a number of curiosities, one of which I draw to your Lordships' attention: the island of Rockall.

Back in 1981, I was honoured to be appointed Parliamentary Under-Secretary at the Department of Trade with responsibility for shipping matters. The late Lord Biffen was the Secretary of State. After a while, I was asked whether I agreed that the Department of Trade should continue to pay for the light on Rockall, which was apparently for shipping purposes. Shipping purposes had apparently receded and our lights over Rockall were more of a political nature at that time rather than of a marine or maritime nature. I was advised to write to my opposite number at the Foreign Office saying that the Department of Trade would no longer be responsible for looking after the shipping light on Rockall and that in future, as it was a diplomatic matter, it should fall to the Foreign Office.

Sadly, I was immediately reshuffled to the Foreign Office and someone said, "Minister, we have received this rude letter from the Department of Trade". I was then obliged to write a letter back to my successor at the Department of Trade saying that the letter that I had written to the Foreign Office was complete rubbish and that the Foreign Office declined to have anything to do with it. What happened to the light on Rockall is lost in the mists of history. I cite that example not just to entertain your Lordships, but to draw attention to the difficulties of defining the appropriate status of some of those overseas territories, which is far from clear.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament

I am puzzled. Are my noble friends Lord Trefgarne and Lord Selsdon saying that Rockall somehow should be treated not as part of the British Isles, but that it could have its own citizens as part of a wider definition of British citizenship and that those people could sit in the House of Lords? I thought that it was very difficult to live on Rockall.

Photo of Lord Trefgarne Lord Trefgarne Conservative

My noble friend is entirely right. As far as I know, no significant number of people lives on Rockall, but it is visited on a regular basis. I believe that a naval party goes ashore every so often just to check up on it. I am not trying to be facetious; I am trying to draw attention to difficult issues relating to some of the territories included in my noble friend's amendment and, indeed, to some that may not be included. It is important that we treat places of a similar status in an equal manner. I hope that my noble friend is satisfied that the three lists included in his amendment are correct. If not, we may have to reflect further on what he is proposing.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

As I have been mentioned in the debate, I shall comment on the amendment, even more on the Bill itself and on what the amendment is trying to do to correct it.

Like the noble Lord, Lord Paul, I featured on the front page of the Times as someone who was about to be expelled from the House for being non-domiciled. I have spoken to the noble Lord about it and we are both in exactly the same position. We were born overseas in a Commonwealth country and we have always retained our citizenship of that country, but we are resident and ordinarily resident here and pay taxes in this country.

I have every sympathy with the Bill in relation to taxation—that is fine, as everyone in the House should be paying their taxes, although I wish that they were not as bad as they are—but to require that we should all change our domicile is an extraordinary demand. I really cannot accept the word "domicile" in the Bill and the amendment is an attempt to change that. You retain your domicile of origin all your life unless you take deliberate steps to change it, and I would be unwilling and reluctant to change my domicile. Therefore, if the Bill did not contain "domicile" it would make more sense. On the taxation issue, as the noble Viscount, Lord Astor, said, I am all for everyone paying their taxes. There is no argument about that; it is the question of domicile.

If you demand that the only people who can be in this House have to be of British domicile you will rule out not only Australians but the whole of the Commonwealth. I remember an occasion when Mrs Thatcher, as she was then, visited the Australian High Commission and was told that there was only a short lease left on the beautiful property and that the high commission was considering moving outside London. Bob Hawke was the Australian Prime Minister at the time and Mrs Thatcher said to him, "Well, Mr Hawke, you are a sovereign state and you may do what you like with your own property. But, of course, I shall not come to visit if you move further out". Australia House still has that residence to this day. The reason why I raise that point is to show that Australia is a sovereign state.

The amendment that my noble friend has moved contains some very nice provisions. For example, the first part gives me a sunset clause, because it would not bring in any of the provisions until after the passing of the Act. That is very nice and it might help the noble Lord, Lord Paul, and me. Subsection (1C) then states that we can all become British citizens without losing our own national citizenship. However, as Australia is a sovereign state, Britain cannot decide that Australia cannot revoke your Australian citizenship. As I have explained, until quite recently—certainly within the last 10 years—had I ever applied for a British passport my Australian nationality would have been revoked. So, even if my noble friend's amendment were passed, it would be all very well to say that you can now be British, but you cannot say what the other country should do. You can only say what Britain will do if the Government accept the legislation. I believe that Canada is the same and will not allow its people to have British citizenship and retain Canadian citizenship. Again, its law may have changed.

As to point made by the noble Lord, Lord Goodhart, that nationality is not important, nationality is very important to people of whatever nationality. He said that it was not dependent on domicile.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat 6:00 pm, 12th March 2009

With respect to the noble Baroness, I did not say that nationality was unimportant. I believe it is extremely important. What I said was that nationality has no bearing on the tax liabilities of people resident in this country or elsewhere.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

I thank the noble Lord for that, and I accept what he says. However, I then understood him to say that taxation status was dependent on domicile. That is the whole argument that I am on about; taxation and domicile are not related except in so far as the Treasury is the body that controls this. Now, whatever your domicile, if you are ordinarily resident here you are liable for a British tax on whatever assets or income you have anywhere in the world.

People are given an option as to whether they choose to pay a lump sum or on their total worldwide income, but none of that has anything to do with you needing to change your domicile. The Government have covered the taxation issue with tax law, not by saying that everyone must change their domicile. I find that strange.

The question of deeming was raised. I do not have any problem with the point about deeming. I am ordinarily a resident here, but when I die I would be deemed resident even if I had not been here for so many years, and inheritance tax applies to worldwide income on death. Australia has a double-taxation agreement with the UK, which would mean that if I paid death duties in Australia they would give me relief on them here. Australia has no death duties, however, and I wish it was the same here. Unfortunately, there is no prospect of that happening.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

Yes, the Conservatives are planning to go a little way towards it, but still not enough for some people.

The points that have been made are important, but it would be most unfortunate—I have had this view expressed to me by many Australians and I have discussed it with people at high level in the Australian Government, and I believe that the same would apply to all Commonwealth people—if our Government in the United Kingdom, and I look on it as "our" Government because I have lived here so long, suddenly said, "All Commonwealth people are unwelcome unless they suddenly become British". That would be a dramatic change from the marvellous tolerance that Britain has always had towards people from all parts of the Commonwealth. That is why this is called the mother country, because it has always been so welcoming and supportive. To turn around and say, "Sorry, you're all out if you're Commonwealth" would provoke a pretty bad reaction, not only in Australia but in pretty well all the Commonwealth. I return to the same point: domicile. If domicile were not in the Bill, I would have no objection to the taxation issue.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

The noble Baroness's speech was, in many ways, refreshing. For the first time in the debate we have actually got on to serious issues. The noble Baroness did not discuss silly points about the status of the island of Rockall.

Photo of Lord Trefgarne Lord Trefgarne Conservative

That was not a silly point at all. It was quoted as an example of the idiosyncrasies that are contained in the Bill.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

That remark only reinforces my view about the silliness of that discussion.

A noble Lord:

Your opinion.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

My view or my opinion, whichever you prefer.

The noble Baroness must be taken seriously here, but there is nothing in the Bill that would require her or anyone else to give up another nationality in order to remain a Member of your Lordships' House. That is perfectly plain. The Bill does nothing about nationality. However, if the noble Baroness wished to stay in your Lordships' House as a Member, as I certainly hope she would, she would be deemed for tax purposes, but for no other purpose, to be domiciled in this country. I recognise that this point concerns her, but it is right that those people who have the privilege and the duty of taking part in the governance of this country by being Members of your Lordships' House should accept that that carries with it the obligation to pay the same taxation as they would have to pay if they were domiciled and resident in this country, whether they are so resident or domiciled in fact.

The real problem is that there are a small number of people, some of them very important supporters of party funding, who have relied on the fact that they can claim foreign domicile to exclude themselves from liability for any income other than the income which arises in this country. I know that the law has been changed somewhat in recent years, but it still means that there is a limit, which is low for the very wealthy, on the amount of tax they have to pay in this country, which would be lower if they were domiciled abroad than they would have to pay if they were domiciled in this country.

For the very small number of people concerned, we are saying that it is right and proper to require those who are in fact not domiciled but are Members of your Lordships' House to pay the same tax they would have to pay if they were domiciled here. That is why I believe that the inclusion of "domiciled" is an important step forward which will be essential if we are to avoid the fact of unequal tax burdens among Members of your Lordships' House.

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

Will the noble Lord explain to me, then, why Clause 1(1) uses the phrase,

"and in no other country for taxation purposes"?

Australia has a double taxation agreement with the UK, and for the tax I now pay there I will get credit on money here. Is he saying that the Australians would not charge me or that I would pay all that tax in Australia and pay it all again here without any relief? That is quite significant.

Photo of Lord Goodhart Lord Goodhart Liberal Democrat

As I understand the situation, the noble Baroness is right that the dual taxation treaty would not apply. However, I think that any taxation she was required to pay in Australia would be deducted from what could be set against her liability to pay taxation in this country. I accept that the noble Baroness may have a point with regard to dual taxation treaties; that is a point that we should perhaps look at again.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament

I knew that this debate would prove interesting, and I have been proved correct. We have all learnt a little something about domicility and tax residence, and no doubt we will learn a great deal more.

Most of us start from the proposition that UK legislators should pay UK tax. The trouble is how we get from there to trying to put that into law. One of the reasons why I am in favour of the Government coming forward in due course with legislation on this matter is that they have the knowledge, resources and ability to consult widely, with Green Papers, White Papers, and so on, to make sure that we get this kind of thing right instead of having the rather tortuous discussions that we have had today.

I am not quite sure why the Liberal Democrats have been so upset about the time that has been taken on this amendment when I think of my noble friends who sit on the Front Bench and have to listen to Liberal Democrats, most notably on the Marine and Coastal Access Bill. The noble Lord, Lord Goodhart, and his noble friends need to get their own house in order before they start talking about my Back-Benchers.

This Bill is about who should not sit in the House of Lords. It is worth looking at some of those people on whom it might have an impact, because it raises questions about all those who are born abroad but who make their homes in this country and are appointed to the House of Lords. At Second Reading, I raised the question of the noble Lord, Lord Paul. He is undoubtedly extremely proud of his birthplace, but he has made his life in the United Kingdom, has employed many tens of thousands of people over the years and plays a major role. Under the terms of this Bill, he would be out. My noble friend Lady Gardner, who spoke with great eloquence this evening, is rightly proud of her birthplace and her heritage. She pays tax in Australia, as she pointed out, but she has made her home here. Although the noble Lord, Lord Goodhart, said that she would not be excluded by the Bill, that is not what I think it means, and perhaps the Government may have another view.

There are other, more obvious examples. I have to admit that I have not seen the noble Baroness, Lady Dunn, in this House for some time, but she could come back here and introduce useful, important and relevant debates about what is happening in the Far East. She has been a Member of this House for a long time. I have no idea how much tax she pays in this country—I could not possibly comment on that—but the Bill would stop any future Lady Dunn being able to sit in the second Chamber of these Houses of Parliament. Quite recently, Lord Cooke of Thorndon was a distinguished Member of the Cross Benches. He was a judge from New Zealand, who gave great weight and authority to our deliberations. But he would be excluded as well—as would many others. I do not know yet whether that is really the noble Lord's intention.

It was extremely useful for my noble friend Lord Astor to read out a passage— which I had forgotten—from the White Paper that the Government published last year about their view of the international net of people who could come and sit in a second Chamber. For a while, the newest Minister, the noble Lord, Lord Davies of Abersoch, was sitting on the Front Bench. Again, I cast absolutely no doubt on his tax status, but he is a very good example of somebody who has spent a large part of their life working abroad in international finance and has now come to the House of Lords. It is perfectly possible that, for a period, he was paying his taxes elsewhere. Would he be excluded from taking his place in the House of Lords until he had sorted out those aspects? I do not know. I see the noble Lord, Lord Puttnam, who I know has spent a large part of his life working in Hollywood and, no doubt, has paid a substantial fortune to the American Government. But he should certainly not be excluded from sitting in this House. This Bill slams the door permanently on people such as him.

As my noble friend Lord Selsdon pointed out, many of those countries that he listed contain loyal subjects of the Crown. Many of those countries have double tax arrangements with the United Kingdom. Perhaps we should look more closely at those arrangements before rather hastily seeking to exclude the subjects concerned from being able to sit in your Lordships' House.

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Environment, Food and Rural Affairs, Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Energy and Climate Change, Minister of State (Department of Energy and Climate Change), Minister of State (Department for Environment, Food and Rural Affairs) (Sustainable Development, Climate Change Adaptation and Air Quality) (also in the Department for Energy and Climate Change), Deputy Leader of the House of Lords 6:15 pm, 12th March 2009

I am sorry that the noble Lord, Lord Strathclyde, mentioned the Marine and Coastal Access Bill. I had hoped to escape the pain for just a day.

I follow the noble Lord, Lord Strathclyde, by commenting on the general principle of the Government's response to the Bill proposed by the noble Lord, Lord Oakeshott. I am glad that he has allowed us to debate these matters again, because they are important and deserve to be taken seriously. The Government agree with the principle of no representation without taxation; clearly, paying tax in this country is an important demonstration of one's commitment to it, and it is important for legislators to demonstrate that commitment. The noble Lord knows—and I do not want to repeat what I said at Second Reading—that we have reservations about how he has approached the issue in his Bill. However, because of the importance of the matter, the Government are reflecting on how the issue might be taken forward in other ways. I noted the comments of the noble Lord, Lord Strathclyde, on that.

Clearly, there are important questions about the relationship, and whether individuals should be required to be domiciled and resident in the UK for tax purposes in order to donate to political parties. It is likely that we shall shortly be discussing those matters as part of the debate on the Political Parties and Elections Bill, which I think is soon to reach your Lordships' House. But my job is to comment on some of the technical aspects of the noble Lord's amendment, which would make a major change to the UK system of taxation by making citizenship the basis of taxation. The UK tax system is based on residence, and we have no plans to change that.

The definition of British citizenship is laid out in the British Nationality Act 1981 and the British Overseas Territories Act 2002. We have no plans to amend those further at present. There is a problem with having a separate definition of British citizenship for the purposes of this Act, because there would be potential for considerable confusion. Would British citizens, for the purpose of this Act, have the same rights and responsibilities as British citizens under other Acts? If they did, what would be the implication of granting full British citizenship to people who are citizens of more than 15 other countries in the list that the noble Lord has included in the amendment? That would have to be considered very seriously.

The amendment requires Members to be British citizens. The noble Viscount, Lord Astor, has already pointed out that citizens of the Republic of Ireland, for instance, are also eligible to sit in the House. The Government made it clear very recently that we have no plans to change that arrangement. The fact is that, currently, those eligible to be Members of this House are British citizens, including the Crown dependencies and qualifying British overseas territories, citizens of Commonwealth countries—and we have heard from one very notable Member of your Lordships' House in that regard—and, as I have already said, citizens of the Republic of Ireland.

Photo of Viscount Astor Viscount Astor Conservative

I believe that the Government have said that they will expect any person in coming to this House in future to be resident, and the Appointments Commission has also said that. Equally, I do not think that the Government have made—and I am not aware of the new chairman of the Appointments Commission, the noble Lord, Lord Jay, having made—any statement on domicile. Is it the Government's intention that should a candidate for inclusion in your Lordships' House come forward from the Republic of Ireland, they would be in favour of following the proposal of the noble Lord, Lord Oakeshott, that that person would have to change their domicile from the Republic of Ireland to one in this country?

Photo of Lord Hunt of Kings Heath Lord Hunt of Kings Heath Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Environment, Food and Rural Affairs, Minister of State (Sustainable Development, Climate Change Adaptation and Air Quality), Department for Energy and Climate Change, Minister of State (Department of Energy and Climate Change), Minister of State (Department for Environment, Food and Rural Affairs) (Sustainable Development, Climate Change Adaptation and Air Quality) (also in the Department for Energy and Climate Change), Deputy Leader of the House of Lords

I do not think that that is the case at all, but I am most grateful to the noble Viscount for his assiduous reading of the White Paper. Noble Lords have been somewhat unfair on their commentary on a very well written and well ordered document, which shows all the signs of the coming together of the major political parties and the consensus that was achieved. I was disappointed that he referred to the greenness in it. There is an awful lot of whiteness, with a touch of greenness around such minor issues as which form of electoral system might be adopted. The White Paper represented a very strong political consensus. Noble Lords will know that the Government's firm view is that these matters should be put to the electorate at the next election. Following that is the time to consider major reform of your Lordships' House.

I was about to say that there is the question of double taxation. It is really the point raised by the noble Baroness. The amendment allows those individuals in subsections (1), (1A)(b) and (c) to have dual citizenship. At the same time, the amendment deems people domiciled and resident for tax purposes in the UK and in no other country. On our reading, people in this category could be asked to pay tax in the country where they hold their second citizenship. The UK would have no jurisdiction over another country's tax law to avoid that possibility. Therefore, it would be potentially impossible for an individual to hold dual citizenship and be deemed domiciled and resident in the UK and no other country. If these difficulties were overcome, the possibility of double taxation for them would remain. The noble Lord will have to think about that.

I shall not comment on Rockall, save to say that given the time we are spending on the Marine and Coastal Access Bill, we might as well have the noble Lord, Lord Trefgarne, join us to talk about these important matters.

On the more substantive point of lists, I would say to the noble Lord, Lord Selsdon, that if I were adopting his approach, I would not list countries in the way he has done. If I did, I would have an order-making power that allowed amendments to be made. Governments do not like lists, and it is for a very good reason.

The noble Lord, Lord Strathclyde, referred to my noble friend Lord Davies when he was not in his place. I am glad to say that my noble friend has always paid tax in this country.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament

For the avoidance of doubt, and since the noble Lord was not there when I spoke, I was not for one moment suggesting that he had not. My example was entirely different, and was that those who make their living abroad should not be excluded from being Members of the House of Lords. There is an even more powerful point. An existing Member of the House of Lords may, having spent a few years, say, on the Front Bench, be offered a job running a great bank or something else overseas—perhaps not such a great bank—and under the terms of the Bill they would be excluded for life. It is on that idea, which we will return to in future amendments, about being excluded for life that we need to tease out from the noble Lord, Lord Oakeshott, exactly what he means.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

That last point highlights how unsatisfactory—indeed I could probably go further than that if I was not feeling so good-natured today—and unfortunate has been the way in which the Conservative Benches have used the first 10 minutes of this debate. I would say to the noble Lord, Lord Strathclyde, that that point is in the next group of amendments and when we get on to that we can discuss exactly that. It would have been helpful if we had not had such extensive excursions around the wider shores of the British Empire, particularly from the noble Lord, Lord Selsdon, as we could have made some serious progress in dealing with just that point. We discussed the point before, and we have tabled substantive amendments on it.

On the amendment put forward by the noble Lord, Lord Selsdon—I must say that I believe the House has rather lost its way on this amendment, whether by accident or design—we are not talking about asking people to change their citizenship. There is no reference to citizenship in my Bill. It is a very simple Bill: the key provision asks Members of this House to make a very simple choice as to whether they wish to be fully resident and domiciled and pay full British tax in this country. If they choose not to do so, they are free not to do so, but then they leave the House.

I say to the noble Baroness, Lady Gardner, that the case for non-doms in particular is whether they would be taking advantage of the £30,000 by which very rich non-domiciled people do not then have to pay tax on the rest of their worldwide income. That is a critical question, which, again, we will come to.

I must disagree with the noble Lord, Lord Strathclyde. The Bill is in no way slamming the door permanently on some of the noble Lords whose names he mentioned. All they would have to do would be to decide whether they were prepared to pay full British tax on their worldwide income or not.

It is only right that I should clarify the question of the report in the Daily Telegraph by its political correspondent Rosa Prince on 23 February. As I understood it, the noble Viscount, Lord Astor, accused me of saying that he had said that Peers should not pay tax. To clarify, I shall read out the relevant section of my article, which I stand by. The point of the article was to draw attention to what the Conservative leader David Cameron had said at his press conference. When asked about my Bill on the record, he said that it was "not a bad idea" and "deserved to make progress". Well, my heart leapt at that prospect, but the Bill is not making much progress tonight. In contrast to that, I said that I thought that the noble Viscount had tabled amendments as a form of filibuster:

"If discussion of the amendments takes too long, then under House of Lords rules the entirety of the proposed legislation would fall".

We have had a good example tonight of why I said that and why I say it again now. I in no way said that the noble Viscount, Lord Astor, said that people should not pay tax. I said a very specific thing, pointing out the contrast between what the Conservative leader was saying and what the noble Viscount was doing.

Noble Lords:

Oh!

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

I was asked to quote from this article and so I shall. It said:

"Lord Astor ... denied his amendments were 'wrecking', and added: 'Lord Oakeshott's Bill is not going anywhere—it hasn't got a chance'".

I thought that I would give noble Lords something to chew on.

Photo of Lord Strathclyde Lord Strathclyde Leader of the Opposition In the House of Lords, Parliament

Before my noble friend stands up, I should point out that the noble Lord, Lord Oakeshott, used the word "filibuster". I hope that he will explain to the House where he thinks that the filibuster has taken place. I hope that he will do so in great detail. I have not noticed any filibuster. I have been in this House for 20 years or so. I assure him that I have seen filibusters, and this is a long way from a filibuster. We have spent only an hour and a quarter on this amendment. That is not a filibuster at all. I object to that charge.

I suspect that the reason why my noble friend said that the Bill was not going anywhere is that it is not supported by the Government or the Opposition. Many Peers from all around the House have spoken against it. I ask the noble Lord, Lord Oakeshott, what on earth gives him the view that it could go past this House, given that nobody, apart from a few of his noble friends, supports it.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

How nice it is to be able to say a few words on my own Bill. If the noble Lord, Lord Strathclyde, does not recognise a filibuster when he sees one, perhaps he would like to go and read the 28-minute opening speech of his noble friend Earl Selsdon. I was just clarifying, because the noble Viscount, Lord Astor, accused me of something that I did not say. It is on the record. Now, may I—

Noble Lords:

Order!

Photo of Baroness Farrington of Ribbleton Baroness Farrington of Ribbleton Government Whip

It would be extremely helpful if noble Lords spoke moderately and intervened when essential.

Photo of Viscount Astor Viscount Astor Conservative

I am grateful to the noble Lord, Lord Oakeshott, for what he said about the article in the Daily Telegraph. There is no disagreement between the leader of my party and me on the Bill and on taxation. I respectfully remind the noble Lord that I am probably rather more closely related to the leader of my party and know rather more about his views on this than do most in your Lordships' House.

However, when I said that the Bill was not going anywhere, I was not making a statement on my own grounds, I was quoting the Minister, who said that he did not think the Bill would go anywhere. I have two questions for the noble Lord. Is it correct that he is disagreeing—

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions 6:30 pm, 12th March 2009

I am happy to respond to that but I am trying to answer the first amendment. I am happy to accept—indeed, it was the whole point of the article—that the noble Viscount, Lord Astor, is close to David Cameron, but I hope that I may make the key point that I was trying to make, particularly to the noble Lord, Lord Strathclyde, but also to other noble Lords who have spoken, almost entirely from the Conservative Benches. That is why this debate is not a fair reflection—as when we had a vote in the previous Session—of views all round the Committee, because we have hardly started to have a proper discussion on the substance. The point is that we are not seeking to change anyone's taxation status. All we are saying is that if you make the laws in this country, you pay the tax. We are not making anyone, wherever they come from, change their status; we are asking that they pay. That is why I am afraid that the amendment of the noble Lord, Lord Selsdon, fascinating though it is, is entirely misconceived and entirely misses the point, and I am not prepared to accept it.

Photo of Viscount Astor Viscount Astor Conservative

Before my noble friend responds, I hope that I may ask the noble Lord, Lord Oakeshott, a question. My noble friend's amendment seeks to amend Clause 1(1). The noble Lord's Bill states:

"A Member of the House of Lords is deemed to be resident".

The advice that is offered by HM Treasury on domicile and residence states that it is not in itself a tax concept but one of general law. Therefore, is the noble Lord, Lord Oakeshott, clear that the word "deemed" is applicable in these circumstances and would be accepted by the Treasury?

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

It will have to be accepted by the Treasury if we pass the Bill that says so. I base my remarks on the fact that my noble friend Lord Goodhart has worked on this with me, has earned a very good living for many years advising people on these matters and is one of the leading experts in this field. The key point about domicile, which is a simple statement of fact, is that in order to claim non-domicile status for tax purposes—that is not the same as your domicile of origin; the domicile of origin of my noble friend Lord Goodhart is America but he chose not to use that loophole, if I can put it that way—on your tax return every year you sign a form which says that you do not intend to stay permanently in this country. How can any Member of this House in all conscience sign that form?

Photo of Baroness Gardner of Parkes Baroness Gardner of Parkes Conservative

I must intervene on that point. It is not correct that you sign a form saying that you do not intend to remain in this country. You have to have an intention of returning to your own country at some point, but that can be a moving target. For example, it could be when your first child is born, then when your first child is 10. It does not have to be a fixed target at all. Therefore, the noble Lord's statement is wrong. He also said that the Bill is not intended to change anyone's taxation status. Yet, Clause 1(1) states that you are,

"deemed to be resident ... and in no other country".

That is an attempt not only to change your taxation status but to change your status in your country of origin, whatever that may be.

The noble Lord has not really covered a further point. He keeps talking about the £30,000 figure and saying how marvellous that is for someone who has a heap of money. Sure enough, it may be. I remember that the famous Harrods man was very concerned when the right to pay only £250,000 in tax a year was taken away. If he were still living in this country, instead of having moved to Switzerland, £30,000 would seem a good bargain to him by comparison. If people have an income that would attract tax of less than £30,000, they have the option of just paying tax on whatever it is. You might have to pay tax of only £5,000. It depends purely on what your income is in the other country. Even the expert noble Lord, Lord Goodhart, has said that the phrase,

"in no other country for taxation", needs to be looked at. I draw the noble Lord's attention to the statement that the noble Lord, Lord Goodhart, made.

Photo of Lord Selsdon Lord Selsdon Conservative

I intervened only because the noble Lord—I have forgotten his name—actually called me an Earl. That was why I intervened quietly, just to say I was not an Earl.

I have been concerned and I should like the noble Lord, Lord Oakeshott, to respond to my first questions. Did he make those statements that appeared in the newspapers, or did he not? Who was he accusing?

There is a bit of confusion here. My amendment does not affect most of his Bill, it simply states:

"Any Member introduced into the House after the passing of this Act shall be a British citizen".

So we should not exclude those. The list is only there because there was no one in the Foreign Office or anywhere else who could tell me what the list should be, because the Government do not have lists. This list is correct and I wanted to put it in the Bill—this is the point—so that those who were British subjects would not feel automatically if all these changes took place that they could not come here. I would have added Members of the House of Commons and elected members of local authorities, because the same principle—that if you make laws in this country you should pay tax in this country—is generally accepted.

Perhaps the noble Lord, Lord Oakeshott, would answer my questions about his statements, because accusations and cross-accusations have triggered this slightly heated debate.

Photo of Lord Oakeshott of Seagrove Bay Lord Oakeshott of Seagrove Bay Spokesperson for the Treasury, Spokesperson for Work and Pensions

Before the noble Lord sits down, because he is obviously replying, I am happy to clarify, although I did not think that it was worth it, that those statements were actually made in the Sunday Times, but these days the Murdoch press, particularly the Telegraph, reprints large chunks of what has been in the British papers. I noticed that when I was in Australia last year. So, yes I did and they were in the Sunday Times. I hope that deals with that and that we can get on with the substance.

Photo of Lord Selsdon Lord Selsdon Conservative

The question was also in the Telegraph the other way round, because I do not approve of the accusation relating to the question of who funds political parties, and find it rather distasteful and distressful and that it lets down the whole House. That is why I have added the code of conduct to the Bill of the noble Lord, Lord Steel.

I do not know whether there is any support for this amendment. The Minister said that he did not like it, but I do not see what is wrong in saying that any new Member who is introduced should be a British subject. I should like to test the opinion of the House, and if everyone says no, I shall sit down.

Division on Amendment 1

Contents 8; Not-Contents 37.

Amendment 1 disagreed.

Division number 1 House of Lords (Members' Taxation Status) Bill [HL] — Committee

Aye: 6 Members of the House of Lords

No: 35 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

House resumed.