House of Lords: Financial Support for Members — Motion to Approve

Part of the debate – in the House of Lords at 7:08 pm on 14th December 2009.

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Photo of Baroness Royall of Blaisdon Baroness Royall of Blaisdon Chancellor of the Duchy of Lancaster, House of Lords, Leader of the House of Lords and Chancellor of the Duchy of Lancaster 7:08 pm, 14th December 2009

At the conclusion of our long debate, after 35 speakers, I want again to thank Members of your Lordships' House for allowing me to speak twice during our considerations. As the Leader of the whole House and as a member of the House Committee whose Motion is before us, I shall try to deal with as many as possible of noble Lords' points.

As we reach the end of our debate on a new system of financial support for your Lordships' House, we need to be clear about what is in front of it and what is not. What is not in front of it is the SSRB report itself. The House is not being asked to endorse all aspects of the report, warts and all. The House is not being asked to approve everything in the report, and it is not being asked to accept its every recommendation. However, the House is being asked to approve the Motion put forward by the House Committee to accept the principles and architecture of the report, as the Motion states, but, following the publication of the SSRB report, to refer the particulars and practicalities of the new system of financial support for Members of this House to an ad hoc group to consider, consult on and advise on implementing the new system, and to review the system, once implemented, after 12 months. It is for the ad hoc group, nominated by all the principal groupings of the House, including Back-Bench Members of this House, to look in detail at all the issues that Members have raised in today's debate. I am grateful to the noble Lord, Lord MacGregor, for drawing a parallel between the work of the Eames committee and the work that is ongoing. Whatever else the debate may have done, it has shown that there is indeed a large range of issues for the ad hoc group to consider if the House tonight approves its establishment.

The noble Lord, Lord Strathclyde, gave us a clear picture of the architecture, as well as of the flying buttresses. He was right to stress the need for flexibility but he was also right to say that, while we should be willing to accept independent advice, we have to ensure that the flying buttresses are dismantled. I am confident that an ad hoc committee can do exactly that.

When eventually we get to debate-and, I hope, accept-the subsequent report of the House Committee, I hope that it will be something with which we can all feel comfortable. I sense this evening that we do not all feel comfortable with the SSRB report but I hope that that is what we will achieve in due course.

The noble Lord, Lord McNally, set out the problems relating to the current system-in a nutshell, a cheap and cheerful system which delivers rough justice with a lack of clarity. As he said, there has to be change, but he broadly recognised the changes outlined in the SSRB report and referred to some of the problems that need to be ironed out. Both the noble Lord and the right reverend Prelate mentioned the need to heed the advice of an independent body, especially in the current political climate.

The noble Baroness, Lady D'Souza, spoke of the need for clarity and flexibility. That is absolutely right. Flexibility is crucial to maintaining the diversity of this House that we all cherish. We have to make sure that we continue to be a diverse House, with men and women from many backgrounds and from all parts of the UK, and ensure that they are all able to attend and participate in the work of this House-a House where those with and without personal wealth can continue to serve with distinction. We have to ensure that the work of all Benches is able to continue. I heed the words of my noble friend Lord Peston about opposition, but we are not going there.

The noble Lord, Lord Greaves, is right to stress the need for geographical diversity. He also suggested that a new system would save money but this could not be proved because of the lack of an evidence base and financial approval. That is the importance of the fourth bullet point of the House Committee-that the committee should monitor and report on the effects of implementation of the new system after a year of operation. That is absolutely right.

I heard the deep concern expressed that the net effect of an inappropriate or misapplied series of proposals and allowances could be that a number of Members would disengage from the House. We must guard against that, and we will.

Some noble Lords raised concerns about the comparators mentioned in the SSRB report. As I said earlier, we are an extraordinarily good-value House, if I may put it that way. With regard to daily rates for quangos, I point out that a member of a quango may serve in that capacity on only three or four occasions a year, but of course that is not to detract from the value of our work day in and day out in this Chamber.

Disability is a crucial issue and takes us back to the need for flexibility. Of course, there must be maximum flexibility for our disabled colleagues and their needs must be met so that they can continue with the invaluable role that they play in the House today. I very much hope that the noble Lord, Lord Low, will discuss these issues with the ad hoc committee, if it is set up, because I believe that we need some evidence-based policies, certainly in this respect.

Taxation was a further issue for many noble Lords, including my noble friend Lord Barnett and the noble and learned Lords, Lord Howe and Lord Lloyd of Berwick. This is a complex matter. I confirm that, unless primary legislation is forthcoming, HMRC has told us clearly that the financial support offered to Members by the new scheme will not be subjected to taxation. In relation to travelling expenses, Recommendation 6 of the report clearly states that,

"Members' reimbursed travel to-work-expenses should continue to be untaxed".

The noble and learned Lord is absolutely correct to say that this puts Peers in a different position from that of members of the public. Again, that is a matter on which an ad hoc committee might need some clarification.

Many concerns were raised about accommodation. The right reverend Prelate and others spoke of the importance of accommodation in enabling us to do our preparatory work each evening. We must ensure that those who wish to rent flats are able to do so. I also note noble Lords' comments about home ownership. The noble Lord, Lord Crickhowell, and others cited problems and anomalies relating to the proposed new system of overnight accommodation allowances. There are clear anomalies in the SSRB proposals which do indeed need to be considered. It cannot be acceptable that Peers subsidise Parliament, as my noble friend Lord Sewel and others pointed out, and I am sure that my noble friend's suggestions will be considered. The noble Lord, Lord James of Blackheath, made similar points. I have no doubt that, whatever the noble Lord does, he is of great use to this House. I shall have to read his calculations most carefully because there were a lot of figures to take in.

I draw noble Lords' attention to the proposed transitionary arrangements for home owners, whether or not they have mortgages. The timescale for transition appears to be arbitrary, so that may be another issue that the ad hoc committee can address. I am grateful to the noble Lord, Lord MacGregor, for recognising that the SSRB tried to take account of the work of the Lords in the 21st century, but it was, and is, a difficult task. He is also right to emphasise the strong element of public service in the proposed daily fee.

Many noble Lords spoke about the fact that the SSRB recommended an overnight allowance of £174 in 2007 and that that has now changed. The 2007 report conceded that there were some ambiguities in the system. At that point, a recently published government White Paper on Lords reform recommended a salaried House and the SSRB therefore decided not to make a comprehensive recommendation in 2007. We need a system which is now fit for purpose, but of course I recognise the concerns expressed by noble Lords and the experience of my noble friend Lord Graham.

Many noble Lords clearly feel that what is being proposed is a heavily overbureaucratic system. Instead, they want simplicity for Members of your Lordships' House, for the public beyond and, of course, for the administration. The noble Earl, Lord Ferrers, rightly drew our attention to the costs of bureaucracy. That is why we have to ensure that we have a simple system, albeit one with receipts for overnight accommodation and one that can be easily administered. Again, that is probably another task for the ad hoc group.

Noble Lords were especially concerned about women Members of this House, and I share that deep concern. I, too, was absolutely staggered and disappointed to learn a few weeks ago that there were no women sitting as members on the SSRB. I of course took the chairman to task and asked him to tackle this issue, and I hope that the situation will be rectified as soon as possible. It is not acceptable for this House that everything has been seen through the prism of a man, and I think that similar problems will arise in every report that the SSRB makes. Many aspects of the report are detrimental to women in particular and to family life. However, when the ad hoc committee, which I hope will be balanced, looks at all the details of this report, I know that it will do so through the prism of women as well as of men, because safety issues for women, especially for those of advancing years when travelling home at night, are extremely important to us all.

Travel arrangements are another nitty-gritty area but one of great importance to all noble Lords. Many speakers referred to the fact that spouses are supposed to travel second class. Clearly, that is another matter that needs to be addressed because not only does the current proposal underestimate the contribution made by spouses but it is not conducive to good relationships and it is also inequitable. It is a spurious means of saving money in this technological era when buying tickets on the internet can result in great savings, as the noble Lord, Lord Shutt, said. I certainly want my noble friend Lord Peston to be able to continue to row with his wife in the privacy of a first-class carriage whenever he travels to and from London.

Noble Lords-including the noble Earl, Lord Ferrers; the noble Lord, Lord Palmer, who made an impassioned speech; and the noble Baroness, Lady Shephard-expressed concern and exposed some absurdities relating to travel. Those are well noted, and I can assure noble Lords that the Government are not salivating at the thought of creating another new team of inspectors. This is not another job creation scheme. Details like that really have to be looked at carefully.

The noble Lord, Lord Shutt, was concerned about the implications of illness among Members that were posed by the SSRB's recommendations. He is right to say that regular attendance for younger Members is much easier than it is for some of our older colleagues. The SSRB's report makes it clear that it had a number of representations from Members on that issue and that serious consideration was given to it. It expressed sympathy on the point but, in the absence of salaries, could find no way for making such a provision. However, I know that this is a serious issue and I hope that we can find a way of addressing it outside the scheme of financial support. We will certainly take the issue away for consideration.

The tone of the report was mentioned by several noble Lords, including my noble friend Lord Graham and the noble Lord, Lord Strathclyde. I note the disappointment and frustration expressed. Many Members have rightly spoken of the fact that so much of the work of Members of this House is hidden from public view. Members do a superb job not only in the Chamber but in committees which meet in the morning as well as in the afternoon. As my noble friend Lord Peston and the noble Lord, Lord Palmer, said, work in the Chamber and in committees requires huge amounts of preparation which must be taken into account, as must the other activities that noble Lords undertake, as referred to by the noble Lord, Lord Walton of Detchant. Some of those activities continue during the recess.

The noble Earl, Lord Caithness, raised important issues about committees, including the payment of allowances when committees meet outside the House. I do not have an answer to that or to many other questions but the ad hoc committee will look at them and provide answers to some. The noble Earl also asked why the SSRB is taking the 40-day additional office cost allowance away. The additional office cost allowance is not being taken away but is being incorporated into the new £200 daily fee. It will be open to the ad hoc group, as part of its implementation work, to consider whether the recommendations on office costs are sufficient and appropriate. I have heard the arguments made by many noble Lords who obviously have to employ secretaries and not just for 140 or 145 days a year. I am sure that members of the SSRB do not give their secretaries a P45 before every holiday.

On administration and bureaucratic costs, our system clearly has to be more transparent. Transparency often means additional administration but that does not mean that it has to be over-bureaucratic and hugely costly. We really need to look at that.

On capital gains tax, as I understand it, the HMRC regulations allow an individual an exemption from capital gains tax in relation to gains made on the sale of their only or principal private residence. If an individual has more than one residence, they need to notify HMRC which is their principal residence. Paragraph 4.12 of the SSRB report makes it clear that a Member who claims the costs of a second property in London under these SSRB arrangements should always declare that as not his or her principal residence for CGT purposes. That is the implication of the SSRB arrangement, as the basis on which the financial assistance is being claimed is that the Member's principal residence is not within a reasonable commuting distance of the House. That comes from an answer I was given by my friends in the Box and I cannot pretend to be authoritative on that issue. Clearly, that needs clarification.

We have had a long and full debate. We may not have considered every aspect of the SSRB's report but we have looked at many of the issues raised in it and at the system of financial support for Members of the House. The noble Lord, Lord Crickhowell, asked for my assurance that noble Lords would not be putting their heads in a noose. I have no noose to hand. This is not the last word on the SSRB report. Today's debate is an invaluable part of the process.

The noble Lord, Lord Tyler, suggested that at the end of the process we should accept recommendation 26 of the SSRB report, which is that we ask IPSA to look at whatever the House eventually decides. That recommendation relates to the future and not to the present. For the present, I do not think that that is the correct way forward. The Government's position is clear: it is not appropriate for IPSA to be involved with the Lords as presently constituted.

We asked the SSRB to review the financial assistance to Members of the House and that is what it has done. We have its independent advice in the shape of the report. I believe that the process on which we have embarked today is the correct one: agreeing to the principles and architecture that it suggests; asking the ad hoc committee to look at the detail; and to consider, consult and implement. I am confident that in following this process we will demonstrate to the public that we are taking independent advice, but we will also ensure that the advice is made fit or the purpose of the House of Lords. I am grateful for the advice from the noble Lord, Lord Nickson, on that.

Of course we must take account of the crisis of confidence in politics and the creeping contempt for our parliamentary institutions, as the noble Baroness, Lady Shephard, put it. We need clarity, certainty and comprehensibility; we want to ensure that we enhance, not damage, the reputation of this House, a House of which we are all proud and privileged to be Members.

I note the views expressed by my noble friend Lord Barnett about the instances of abuse and alleged abuse. We have to consider the well-being of this House, which includes its reputation. My noble friend asked me to ask the House Committee to define the tasks of the ad hoc committee and to bring that definition back to the House. As the noble Lord, Lord Wakeham, said, I think that the committee should have maximum flexibility. That is why the Motion before us is the correct one. As the noble and learned Lord, Lord Howe, said, we understand the need for change, and we have to demonstrate that we understand that. I suggest that that change should be on the basis of the SSRB's report. The noble Baroness, Lady Manningham-Buller, made important points about the need to heed public opinion. She is right: the public allow us little slack. The noble and learned Baroness, Lady Butler-Sloss, made a powerful point about public perceptions.

There have been many comments about the word architecture. We were not seeking to be dilettantes in any way by using that word. It is rather like the cathedral mentioned by the noble Lord, Lord Strathclyde. In many ways, architecture and framework are the same thing; it is semantics and means no more and no less. However, it was right for the House Committee to put the current Motion, rather than a Take Note Motion, before the House.

The noble Lord, Lord Wakeham, spoke wisely when he said that the ad hoc committee would not be able to reconcile all of the problems and concerns that have been brought to our attention today. Some of the points of view expressed were simply contradictory. Also, we should recognise that whatever the committee recommends will not be welcomed by every Member of this House-that is simply not possible-but we have to find the best possible system for the majority of Members of this House. I know, however, that an ad hoc committee would look at the particularities and practicalities of the report through the eyes of Members of this House, knowing and understanding the real implication of the recommendations, and that its advice would make us more comfortable with future change.

It is for this House to decide on what changes it wants to make for the system of allowances for Members. The Government have given their response to the SSRB and the House Committee has proposed a way forward as contained in the Motion before you, but it is for the House to decide, this House and none other than this House-not the SSRB, not the Government, not the House Committee and certainly not the media, but this House. It is for the Members of this House: the decision is in your hands and your hands alone.

In taking that decision, I urge all noble Lords to support the Motion, to vote for the course of action set out for the benefit of the House by the House Committee, to accept the principles and architecture of the SSRB's report and, following that report, to refer the practicalities of a new system of financial support, issues for consideration and consultation and advice on implementation to an ad hoc group of Members of this House, and to review that system within a year of its implementation. That is the way forward, and I urge all Members of your Lordships' House to take it.

On behalf of the noble Lord, Lord Brabazon, the Chairman of Committees, I commend the Motion.