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Disqualification from Parliament (Taxation Status) Bill

Volume 470: debated on Friday 25 January 2008

Order for Second Reading read.—[Queen’s Consent, on behalf of the Crown, signified.]

I beg to move, That the Bill be now read a Second time.

I am grateful to Her Majesty. This is a very short Bill, and I am going to make a very short speech, because I would like to hear the Minister’s response. The general principle behind the Bill is that those who make our laws should pay our taxes. There should be no representation without taxation, so to speak. People out there would be astonished to learn that there are Members of Parliament, legislating for the rest of us, who do not pay UK taxes. My short Bill would disqualify Members from the House of Commons and the House of Lords if they were not resident in the United Kingdom for tax purposes. Members of the Commons would declare their residency status once in every Parliament, but peers would have to certify annually that they were UK residents.

May I just make some progress?

People might ask why this provision is necessary. The House of Lords Appointments Commission identified the problem in its report for 2006-07. It concerns a Conservative peer and donor, Irvine Laidlaw, now Lord Laidlaw. He was ennobled in 2004 after promising to become a UK resident for tax purposes. Unfortunately, he reneged on that promise. This is all documented in the House of Lords Appointments Commission’s annual report. He is a tax exile, living in Monaco. Lord Stevenson, the Chair of the Commission, has written to the Prime Minister to flag up his concerns about this matter. In October last year he also told my colleague, the hon. Member for Cannock Chase (Dr. Wright), who chairs the Public Administration Committee, that the commission was no longer prepared to accept assurances from people who do not pay UK taxes but would apparently do so some time in the future. He also said that it would no longer accept non-UK taxpayers as candidates for the peerage. Lord Laidlaw, who lives in Monaco, as I said, has now taken leave of absence from the House of Lords.

So, new rules are clearly needed, and they need to have a statutory basis. The irony is that the House of Lords Appointments Commission is not set up by statute and is, in a sense, making up the rules as it goes along. The House of Lords Appointments Commission decided after the Laidlaw case that it was not going to wave people through to a peerage if they were not UK taxpayers, but there is nothing in statute to address the problem and that applies only to new peers, not to existing ones. Clearly, there is a lacuna in the law.

There is, of course, great speculation about Lord Ashcroft. On his website, he says:

“If home is where the heart is, then Belize is my home”.

No one really knows—he has not volunteered the information—whether Lord Ashcroft, a major donor to the Conservative party, is resident for tax purposes in the UK or in Belize. In 2004, in what I believe is called the House of Lords expenses register, he gave his main residence as Belize. He has repeatedly declined to say where he does reside and I do not know—no one here knows—whether he pays UK taxes.

We have had “no taxation without representation” for many years and we now seem to be on “no representation without taxation”, which is an interesting change. I am an old seahorse when it comes to private Members’ Bills. Will the hon. Gentleman advise us whether in his discussions with the Minister he has been given any indication that his Bill has Government support?

I hope that it has Government support and also that it gains support from all right-thinking people. Is it not amazing that anyone would want to justify membership of Parliament when the individual concerned is not a UK taxpayer? Of course I believe that the Government support my Bill. If it fails to make progress, I hope that the general principle will be gathered up in the omnibus constitutional reform Bill that the Government are bringing forward next month.

The hon. Gentleman’s Bill clearly merits serious consideration. In drafting it, did he consider individuals such as Lord Kinnock or Lord Robertson of Port Ellen who, having been appointed to the House of Lords, moved on to fulfil overseas appointments? I have no direct evidence, but I suspect that that may well have affected their tax status, particularly if they are EU Commissioners. Does the hon. Gentleman intend such individuals to be disqualified and never able to return to this House? There is nothing in his Bill to suggest that by taking leave of absence, for example, it would be possible to escape permanent disqualification.

Those are all important issues, which can be explored in Committee. I am perfectly prepared for my Bill to be amended in Committee to catch those categories of individuals who should not be serving in the legislature.

Let me finish on this point. The House of Lords Appointments Commission has registered its view and the Public Administration Committee, of which I am privileged to be a member, recommends a change along the lines that I have suggested. I would like to know the basis of the undertaking that Michael Ashcroft, now Lord Ashcroft, gave in 2000 before being elevated to the peerage. In March 2000, No. 10 Downing street issued a press release, which included this note to editors:

“In order to meet the requirements for Working Peer, Mr Michael Ashcroft has given his clear and unequivocal assurance that he will take up permanent residence in the United Kingdom again before the end of the calendar year”—

in 2000. It continues:

“He would be introduced into the House of Lords only after taking up that residence. These undertakings have been endorsed by the Leader of the Conservative Party and conveyed to the Prime Minister—and to the Political Honours Scrutiny Committee.”

I want to know the form of the undertaking and to whom that undertaking was given—it is nothing to do with how much tax Lord Ashcroft pays or does not pay—but the Cabinet Secretary has refused my request under the Freedom of Information Act 2000. The matter is now subject to an internal review, but I fully intend to take this matter to the Information Commissioner. I finish by emphasising that it is totally unacceptable for people to make the laws of the United Kingdom when they do not pay their taxes here.

I congratulate my hon. Friend the Member for Pendle (Mr. Prentice) on securing this debate. He has raised the question of the tax status of Members of the other place previously, including through early-day motions, and I am pleased to give the Government’s view on the matter.

The Government agree with the intention underlying the Bill—that Members of this House and the other place should pay taxes in the United Kingdom. That is an important way in which they demonstrate their connection with and commitment to our country. The public would find it odd if their elected representative in this House could, as a tax exile, vote on the provision of income tax but was not subject personally to that regime. I doubt that the electorate would consider that fair.

How might the proposals impact on the Good Friday agreement and the terms of the peace settlement in Northern Ireland, in relation to the ability of citizens of the Irish Republic to stand for the United Kingdom Parliament while remaining resident in the Republic of Ireland? If my recollection is correct, that is specifically provided for and allowed for, and it might make it difficult for the hon. Gentleman to achieve his intention.

The hon. Gentleman makes a good point, to which I was going to refer later in my speech, but I will address it now. He is correct that the Bill as drafted would have an anomaly in that a citizen of the Republic of Ireland could be disqualified from standing for the Northern Ireland Assembly. The same point might apply to Members of the European Parliament. In both those situations, people could be unfairly disqualified from standing. Although we support the idea behind the Bill in principle, I will ask my hon. Friend the Member for Pendle whether he would be open to amendments in Committee—he has indicated that he would—to ensure that such candidates would not be unfairly prevented from standing for Parliament.

Would the principle that people who do not pay taxes here should not make our laws, prevent the European Commission ever making any laws that affect our country? Were that the basis on which the Bill was being brought forward, I would support it wholeheartedly.

The hon. Gentleman makes an ingenious intervention, and I am sure that he will have the opportunity to raise the issue again in the next dozen or so days when we debate European matters. Ingenious as it is, however, it is not absolutely relevant to the question before us today.

The Bill has some potential technical problems, and the hon. Member for Beaconsfield (Mr. Grieve) has raised one. I want to mention some others. For example, only this week Her Majesty’s Revenue and Customs published proposed amendments to the residence and domicile tax rules. Those are still being consulted on, so I would be cautious about cross-referencing the Bill to any of the current tax residency rules, because of possible changes.

To make the position clear, I understand the seriousness of purpose, and the merit, in the matters that the hon. Member for Pendle (Mr. Prentice) wishes to examine. But the issues are more than technical, because if we start providing exceptions as opposed to the blanket approach that he wants, that raises the question of what exceptions. We would then start a process of looking down the list that might lead to the justification of all sorts of exceptions, which might start to undermine his intention.

Again, the hon. Gentleman makes a fair point. However, although the Government make some criticisms of the Bill, in a spirit of helpfulness we support its intention. There are good reasons for introducing legislation along such lines. With assurances from my hon. Friend the Member for Pendle that he would be prepared to accept amendments in Committee, I would be happy to endorse the principle behind the Bill.

The hon. Member for Pendle has raised an important issue. In the past, we have considered such matters as whether donations can be made to political parties and whether individuals can stand for Parliament in the context of their status. The historic—

It being half-past Two o’clock, the debate stood adjourned.

Debate to be resumed on Friday 14 March.