House of Lords
Monday, 14 December 2009.
Prayers—read by the Lord Bishop of Chester.
Economy: Quantitative Easing
My Lords, monetary policy and its assessment are matters for the Bank of England. There is uncertainty about the impact of the asset purchase facility, but a number of developments are consistent with its expected effects. Corporate bond and gilt yields fell significantly following the APF announcement. Issuance of bonds by UK non-financial companies rose sharply in the first half of 2009.
My Lords, I think I thank my noble friend for the Answer. He quoted the Bank of England. Does he accept that its powers of independence are heavily circumscribed under the Bank of England Act and if the unpredictable governor sought to stop quantitative easing too soon, it would be disastrous? Will my noble friend use the Bank of England Act to make sure that he does not?
The Treasury has the highest confidence in the Governor of the Bank of England and, no doubt, through the interplay of the price of money—interests rates have fallen from 5 per cent in October 2008 to 0.5 per cent at the moment—and the quantity of money, as affected through the APF, the Bank of England will continue to target an inflation rate of 2 per cent. The move to introduce quantitative easing was to ensure that we headed off the risk of deflation. There is increasing evidence that the Bank has been successful in that respect. I am sure it will continue to be successful in other decisions in future.
My Lords, can the Minister explain why the Monetary Policy Committee of the Bank of the England was not informed about the covert support given to RBS and Lloyds HBOS when that information, had it been available to it, would have affected its views on the introduction of quantitative easing? Secondly, can he say what proportion of government debt outstanding is now owned by the Bank of England? Does he see any theoretical or practical upper limit to that?
My Lords, there are several questions there. The majority of members of the Monetary Policy Committee were aware of the action that the Bank of England had taken under the Banking (Special Provisions) Act 2008 to provide emergency liquidity support to HBOS and the Royal Bank of Scotland. Accordingly, they would have been aware of that matter when it came to deliberations and discussions in the MPC. The content of those discussions is not known to me and therefore I am not in a position to know what information was given to the MPC. Nor would it be appropriate for me to know because the MPC has independent responsibility for the management of interest rates and the price and quantity of money.
As for the second part of the noble Lord’s question, quantitative easing is targeted at about 12 per cent of GDP so the proportion of government debt owned under the APF can be deduced from that. I am afraid that my mathematics are not quick enough to carry out the calculation, but I am sure that the noble Lord, Lord Lamont, is able to do so.
The third part of the noble Lord’s question was about an upper limit. The MPC will form a view on how much more quantitative easing is required to achieve a 5 per cent nominal GDP target and a 2 per cent inflation target. If it judges it necessary to continue the programme beyond its present limitations, it will no doubt seek the agreement of the Chancellor of the Exchequer to do so.
The liquidation of the existing APF through exchange, holding to maturity and selling back into the market in co-operation with the DMO should not in itself set an upper limit for these operations that is anywhere close to where we are at the moment.
I have already referred to the significant increase in equity and bond issuance. Unfortunately, proving that there has been a contraction of credit spreads over gilt-edged spreads and in the movement in gilt-edged yields, is, as Charlie Bean, the deputy governor, said in a speech in October, extremely difficult because one is trying to prove a counterfactual. The Bank of England’s judgment at the moment is that quantitative easing is having the effect that it anticipated, but Mr Bean went on to say that it may be several decades before academics have reached a firm conclusion.
My Lords, does the Minister accept that if the Bank stops quantitative easing, as is predicted, in February next year, private sector purchases of government debt will have to rise sevenfold next year, and that that will inevitably lead to a significant increase in interest rates? Will he assure the House that in those circumstances the Government will resist the temptation to put pressure on the Bank to keep quantitative easing going purely to reduce their own interest costs?
The Government would put no pressure on the Bank in respect of any aspect of monetary policy decision-making, be it interest rates or quantitative easing. I will not comment on when the quantitative easing programme might come to a close because only the members of the MPC are authorised to determine that matter. If the observation made by the noble Lord, Lord Newby, was correct, the fact that quantitative easing will come to an end at some time is already priced into the markets, because, not surprisingly, he is not the only one to have that view.
My Lords, confining ourselves to, say, the past 200 years, the British Government have never reneged on either principal or interest on any bit of the national debt. Is that not a reason for believing that the Government’s monetary, and more broadly asset, policy is entirely correct?
I am grateful to my noble friend for reminding us of 200 years of history. That gives the markets considerable assurance, as does the PBR statement and the very firm commitment to halve the public sector financing requirement within four years of the recovery commencing.
My Lords, the Minister rightly links quantitative easing with interest rate policy. This is particularly relevant to what the noble Lord, Lord Peston, said about funding the Government’s debt, because that may well depend on changes in interest rates. How, therefore, did the Prime Minister manage to offer an extra £1.5 billion to encourage the third world on the subject of global warming? The figure of £1.5 billion is apparently based on the need to show that we are more generous than the French and the Germans. Do we really have that sort of money, or will it come out of the aid budget?
I think we have strayed some distance from quantitative easing, but I am sure that the House endorses the action that the UK Government are taking to show our firm and real commitment to address the horrifying scale of the risks attached to global warming.
House of Lords: Titles
My Lords, the Government have no plans to alter the existing arrangements in relation to the use of courtesy titles or styles for the husbands of women Members of the House of Lords.
I thank the Minister for his Answer, albeit that it was disappointing. The Equality Bill is wending its way through this House. Does he accept that equality between the sexes should start in this Chamber? If a male Peer’s wife is always a Lady, why should not the same courtesy be extended to the husband of a woman Peer, who I am sure has done just as much to support their spouse? If the issue is trivial, titles should either be extended to husbands or confined only to the recipient.
My Lords, I agree with the noble Baroness that it is an anomalous situation whereby a woman takes her husband’s title but a man does not take his wife’s. I suspect that the reason is that the UK honours system of names and titles is complex and is rooted in history. In recent history, thankfully, the position of women has changed dramatically. However, notwithstanding that, I have to tell the House that the Government are not aware of any great anxiety or urgent desire for change in this respect.
My Lords, the House will be aware that the wives of Bishops need to be considered as well, as they do not have any title. If the Minister was minded to resolve the anomaly without addressing the concerns potentially of Bishops’ wives, he might have a deputation of them on his doorstep, which is not a prospect I should wish on him.
My Lords, in supporting my noble friend Lady Deech in her suggestion, does this matter not go a little further than that? For example, is it not the case that the wife of a Knight Bachelor has the title “Lady”? Therefore, is there not an argument for the husband of a Dame of the Most Excellent Order of the British Empire to have an equivalent title as well? While I understand the Minister’s statement that the Government have no proposals on these matters, might there not be a case to refer these matters to a Select Committee of your Lordships' House?
My Lords, there is always a case for referring any matter that is raised in your Lordships' House to a Select Committee. I am not sure that this is the best case. The Public Administration Select Committee of another place looked inter alia at titles and name changing honours. While recognising that this issue was contentious, it recommended the phasing out of knighthoods and what it called damehoods. In February 2005, the Government’s response was that they did not believe that the case had been made for phasing out the awards of knighthoods and damehoods or knights bachelor. They said that they play a well respected, understood and valued part in our national life.
My Lords, if we are quick, we could hear from my noble friend and then the noble Lord, Lord Thomas of Gresford.
My Lords, at one level of course this is an amusing topic and we can all have a jolly good laugh at each other’s expense, but the noble Baroness, Lady Deech, has made a serious point. This is not an anomaly, it is discrimination. It is discrimination that a man may confer on his wife an honour that a woman may not confer on her husband. It is perfectly straightforward and I see many heads nodding in agreement. Does not my noble friend think that there is some way of addressing a discrimination that we practise and laugh about?
My Lords, I get an even greater frisson than the noble Baroness, Lady Trumpington, in hotels. Is it not the answer to this that you can call yourself anything you wish? Earlier this year there was a Lord in the dock who got 10 years. But surely, after today’s debate, the husband of a lady Peer should be called the “honourable breadwinner”.
My Lords, DfID’s latest Afghanistan country programme evaluation was published in May 2009. While the challenges remain daunting, life for many Afghans is improving with support from the United Kingdom and the international community. A majority say that they are better off now than under the Taliban.
My Lords, I thank the noble Lord for that Answer. According to the DfID website, strong systems have been put in place to make sure that UK aid is not misused. Can the Minister tell us what and where are these systems? Further, can he confirm that 70 per cent of our aid is going to Kabul and not towards reconstruction in Helmand?
My Lords, President Karzai requested at his inauguration that all donors should aim to spend 50 per cent of their assistance money through the Afghan Government’s systems in the next two years and urged other donors to join DfID in meeting that target. Our support for the Government of Afghanistan is tied to a series of benchmarks that need to be met in order to receive the total available. The World Bank’s initial review of those benchmarks this year shows that the Afghan Government are on track to achieve all of the benchmarks, and the World Bank has called that a quite remarkable event. We therefore believe that maintaining strong systems with the Government of Afghanistan is the best way of ensuring that value for money is achieved and that UK aid is used for the greatest level of humanitarian purpose in the country.
My Lords, as the Minister will be aware, one of the principles of post-conflict stabilisation is that the reconstructors should get in immediately after the fighting has finished. As he may also be aware, however, DfID took six weeks or so to get on the ground after British troops took Musa Qala in April 2008. Can he describe to us how things have changed so as to improve this performance?
My Lords, the current situation is that DfID and the Foreign Office are both closely involved with the Government of Afghanistan. We are fully involved in that process. However, the noble Lord is absolutely right to say that we need to ensure that we are on the ground as soon as possible. We have already seen a military surge but we also need to see a political surge. The conference that the Prime Minister has called for the end of January will give us an opportunity to build on that and to ensure that structures can be put in place in Afghanistan to bring forward development, further stability and do all that we seek to achieve through humanitarian aid and development in the country.
My Lords, as I said in my initial response to the noble Baroness, the situation is daunting, but we should not be deterred by that. We need to work with our allies—all 43 ISAF countries or the 60 countries that are seeking to assist in the area. I do not think that it was ill-conceived. We have to take on the situation with the Afghan Government and in terms of the five commitments that President Karzai’s new Government’s have adopted—on security, governance, reintegration, economic development and regional relationships. I am not sure that discussing whether things are ill-conceived is the best way forward. In my view, the best approach is to look at the problems we have and then at how to solve them.
My Lords, the Minister rightly quotes President Karzai as wishing 50 per cent of development aid to be routed through the Afghan Government. Has the Minister any figures on the percentage of development aid allocated to the Afghan Government that is actually applied to development?
My Lords, I shall answer my noble friend by talking in terms of amounts of money and where it is spent. Some £60 million this year goes to the Afghanistan Reconstruction Trust Fund—the ARTF—which finances the salaries of over 320,000 public servants of whom over half are teachers. Some £32 million over an eight-year period from 2003 is being spent to elect almost 22,000 community development councils and initiate 50,000 locally generated projects to improve water, roads, health and education. More than £40 million over 2002-09 has gone to the microfinance investment and support facility, which is benefiting 1.5 million entrepreneurs with women being 60 per cent of the total.
My Lords, will the Minister accept that one reason for the haemorrhaging of public support for military engagement in Afghanistan has been the perception of widespread corruption in the Karzai regime? What protocols are being put in place to ensure that public money is used in an honest way for the reconstruction of the country, and is not used for corrupt purposes?
The noble Lord makes a good and important point, which is recognised by many people in Afghanistan as well as many outside it. President Karzai made a renewed commitment to the Afghan people that he would tackle corruption in his second term. We have heard the words in his inaugural address; we now seek the action, which I think will come when we see the formation of the new Government supporting him, and the appointments to governorships and other positions. At the moment, funding to Afghanistan through the Government is very much based on seeing the results; in other words, for teachers, we repay the Government of Afghanistan when those teachers have been paid their salaries. That is the best way forward. Also, we called for a new anti-corruption commission and look forward to the appointment of the new body for that task, which the President has announced.
My Lords, I think that it is the Conservatives’ turn.
My Lords, I shall put the question of the noble Lord, Lord Alton, in another and perhaps a more focused way. Is an audit trail being constructed on President Karzai’s performance that can be examined to see whether he honours his commitments? Can we see those answers?
We share the noble Lord’s anxiety to ensure that we convince our people in the United Kingdom who are financing the humanitarian development costs, convince the international community and convince—not least—the people of Afghanistan. We believe that we will see new Ministers with a clean track record presenting policies that will be put through without the corruption that people suspect has taken place in the past. There have been arrests of senior police officers and investigations of Ministers. Afghanistan is moving. We want it to move much more quickly and resolutely.
My Lords, we all agree that hospital stays should be for as short a time as possible, but that must be balanced against the complex health needs of a patient with dementia. The National Dementia Strategy addresses the issue, including the appointment of a senior member of staff to improve the quality of care for people with dementia, proper training for all staff and specialist older people’s mental health teams working in hospitals.
I thank the Minister for that Answer. At present, up to a quarter of hospital beds are currently used by older people suffering from dementia, with unacceptable variations—as I am sure she will accept—in the quality of care they receive. Recently, both the National Audit Office and the Alzheimer’s Society highlighted opportunities for significant NHS cost savings in hospital care which could be more effectively reinvested in workforce development and community services if care for dementia patients was moved into appropriate services in the community. Will the Government be taking this recommendation forward and, if so, how?
The noble Baroness points to an important problem. As I said in my Answer, the problem here is the complexity of dealing with someone with dementia in hospital. For example, if someone is admitted with a broken leg and then diagnosed with dementia, a whole new health team and social care kick in. It is not straightforward. However, that is not an excuse for adding to the length of the stay in hospital or for there not to be adequate care. We are committed to the National Dementia Strategy, which has been the focus of debate in your Lordships’ House on more than one occasion, and we are working closely with the Alzheimer’s Society on its implementation. An important part of that implementation is dealing with people who have dementia and who are in hospital. No doubt money could be saved. However, this is not an appropriate target to set because, ultimately, clinical decisions will have to be taken by the doctors concerned.
My Lords, the Minister will be aware that it is estimated that over the next 15 years there will be more than 1 million people with dementia in this country, which will cost the nation as a whole £25 billion. What planning is taking place in the Department of Health to account for these numbers and to ensure that our hospital services and our already overstretched and under-funded mental health services are not swamped by these patients?
We are two years into the 10-year National Dementia Strategy, which has had widespread support and has been backed by funding of £150 million in its first two years. Its major strands include early diagnosis, support for those who care for people with dementia, training, increasing the science base and research; it is a very comprehensive strategy. A 10-year strategy is the way to deal with this issue.
We need to make sure that we prevent people with dementia from going into hospital in the first place—my noble friend is right about that. The way to do that is to make sure that doctors can diagnose dementia early and that people receive the right level of treatment and support in their homes to enable them to stay there and avoid hospital admittance.
I do not have a precise answer in front of me but the noble Lord is right that nurses will have to work in the community, as many of them already do. It is not a question of taking nurses out of hospitals but of increasing the number of people who are trained to deal with those with dementia and of adding to the community teams which support their families.
My Lords, while undoubtedly excellent work is going on under the National Dementia Strategy, does my noble friend agree that the pockets of good practice are at best patchy? What is the Department of Health doing to ensure shared learning about co-operation between health, social care and third sector organisations, which provide so much care?
Does the Minister agree that, since one-third of older people admitted to hospital in an emergency are suffering from either a confusional state or dementia, the assessment and diagnosis of dementia in hospital and the solving of the problem which the noble Baroness, Lady Greengross, raised, must start at a very early point of diagnosis? At the moment, there is no such assessment in diagnosis in 50 to 60 per cent of hospitals. How can this be addressed?
One way in which it is being addressed is by every hospital having a senior member of staff charged with providing leadership for improving the quality of care for people with dementia, for hospital staff having the proper training and for the development of the kind of pathway for people with dementia to which the noble Baroness referred. That cannot be delivered in a year; it is why we have a 10-year strategy.
Arrangement of Business
My Lords, as there is no speakers list for today’s debate, it might be helpful if I say a few words about the expected running order. The debate will be opened by the Chairman of Committees, the noble Lord, Lord Brabazon of Tara, who will be followed by my noble friend the Leader of the House, Lady Royall, the noble Lord, Lord Strathclyde, the noble Lord, Lord McNally, and the noble Baroness, Lady D’Souza. At that point, the House may wish to hear from the right reverend Prelate the Bishop of Chester, before other noble Lords rise to speak. With the leave of the House, my noble friend the Leader of the House will reply to the debate.
House of Lords: Financial Support for Members
Motion to Approve
In accordance with paragraph 7 of the Report from the House Committee on the SSRB Review of Financial Support for Members of the House of Lords (First Report, HL Paper 12), this House agrees:
the architecture and principles of the new system proposed by the SSRB;
that the House Committee should work to prepare resolutions to implement the proposals on a timescale which allows a new system to be operational from the start of the new Parliament;
that an ad hoc group of members should be established to consider and consult on issues in the SSRB report and advise on their implementation; and
that the House Committee should monitor and report on the effects of implementation of the new system after a year of operation.
My Lords, in opening today’s debate, I should perhaps take a moment to explain the procedure that we will follow. The Motion before the House asks it to agree to the four recommendations contained in the House Committee’s report on the Review of Financial Support for Members of the House of Lords by the Senior Salaries Review Body. As I shall explain, agreement to this Motion today will not be the end of the process; ultimately, detailed resolutions to adopt the new scheme will be put to your Lordships by the Leader of the House in the spring.
At the outset, it may be for the convenience of the House for me to make a general declaration of interests on behalf of all noble Lords taking part today. I claim travel expenses under the scheme and am a paid officeholder. I am sure that most, if not all, noble Lords taking part in today’s debate will have similar interests as claimants under the Members’ reimbursement scheme. Therefore, it is not necessary for noble Lords to begin their speeches with a declaration of interests.
I turn to the short House Committee report before the House. The report, which was agreed unanimously, recommends that the House accepts the “architecture and principles” of the system contained in the SSRB report, with a view to the new system being in place for the start of the new Parliament next year.
In order to allow Members to put forward their views on the detail of how the SSRB’s recommendations can be implemented, the report recommends that an ad hoc group of Back-Bench Members be set up,
“to consider and consult on issues in the report and advise on their implementation”.
If the House agrees to the Motion today, I would hope that the House Committee would be in a position to appoint the group at its meeting tomorrow, so that it can begin work immediately. In that event, I would propose to inform the House of the appointment by way of a Written Statement.
Many of the SSRB recommendations, which I will briefly outline, require careful and detailed thought about how best to implement them. For that reason, the ad hoc group of Members proposed by the House Committee will take the recommendations away and look at them in detail. The group will report back to the House Committee, which will then feed its recommendations in to the Government. As I have said, the end of the process will be in the spring, when, in the normal way, the Leader of the House will bring resolutions to the Floor of the House for agreement.
Significantly, the House Committee report also proposes that the committee should be tasked with monitoring and reporting on the impacts of the new system after a year of operation. This is an important part of the implementation process. The changes recommended by the SSRB are fundamental and very wide-ranging. As thorough as the SSRB’s work has been, the impact of the new system is to a degree unknown and it will be important for us to be alive to any unintended consequences.
Before I turn to the detail of the recommendations contained in the SSRB report, it may be helpful for me to remind noble Lords of the context to the recent review. In June of this year, as noble Lords will recall, the House Committee asked the SSRB, via the Prime Minister, to conduct a review of the system of financial support for Members of the House. On the advice of our Audit Committee, we took the view that the arrangements for financial support required greater clarity to reduce any risk of abuse, which might expose both individual Members and the reputation of the House as a whole. While the system had some pragmatic benefits—it was good value to the taxpayer and easy to administer—there was a need to ask an independent body to conduct a comprehensive review of our system. We decided that the best body to conduct this review was the SSRB, which had historically made recommendations on our system and has the specific remit to review parliamentary pay and allowances.
We gave the SSRB the following terms of reference:
“To review options for the system of financial support for Members of the House of Lords, given its current role and composition; and to make recommendations. In conducting the review, SSRB will have regard to clarity and transparency; accountability and public acceptability; value for money; differing attendance patterns of Members; the geographical spread of the membership of the House; the financial consequences for Members in participating in the work of the House; schemes operated in comparable circumstances by other institutions”.
The SSRB conducted extensive consultation in the short time available. Three open meetings were held with Members before the Summer Recess, which around 150 noble Lords attended. The SSRB held a series of additional meetings with smaller groups and individual Members, including the Lord Speaker, the leaders of the three main parties and the Convenor of the Cross-Bench Peers. In addition, noble Lords submitted a total of 121 written responses to the consultation document issued in July.
The SSRB reported on 26 November. What one might call the headline conclusion of the report was a validation of the House Committee’s decision to seek a comprehensive review by an independent body. The report says:
“Having now examined the House’s arrangements for financial support as they have evolved over the years, we can only conclude that they do not meet the standards of governance, precision and transparency now demanded for the use of public funds”.
The SSRB has made recommendations for an entirely new scheme. In some areas, if its recommendations are accepted, Members will no longer be able to claim allowances to the levels that they can under the current arrangements. It is important to put on record that this does not constitute any criticism whatever, implied or explicit, of those Members who have legitimately claimed allowances under the current scheme. Such Members have followed the rules as they stand and have acted entirely properly.
The report makes 26 specific recommendations for a new system, which the SSRB believes would meet the necessarily high standards. I will briefly take the House through some of these recommendations. In doing so, I do not propose to address the two recommendations in Chapter 6 on ministerial allowances, or recommendation 26 on a future role for the Independent Parliamentary Standards Authority, where the recommendations of the report are addressed primarily to the Government rather than to the House.
The SSRB recommends a new daily fee for attendance of £200. This fee would replace the current day subsistence allowance of £86.50 and the office or secretarial costs allowance. The new fee would be higher than the combination of those two allowances, but the current reimbursement of expenses for the “additional 40 days” office costs would be discontinued. The report recommends that the fee should be paid on the basis of attendance. The House is invited to consider and define which activities, in addition to attendance at sittings of the House or its committees, should qualify Members to claim the daily fee.
I come to taxation. The new daily fee for attendance would introduce an element of income to Members and therefore in principle the SSRB recommends that the fee should be subject to income tax and, where a Member is under the pensionable age, to national insurance contributions. Although the SSRB believes in principle that the fee should be taxed, the report makes it clear that it would not be possible for it to be taxed without further primary legislation. The SSRB report states:
“Membership of the House of Lords is neither an employment nor an office”.
Therefore, under current legislation, allowances or expenses paid to Members are not subject to taxation. In coming to this view, SSRB consulted Her Majesty’s Revenue and Customs. I can report that the House authorities have independently confirmed that position directly with HMRC. HMRC confirmed that membership of the House of Lords is neither employment nor an office and that issues of taxation do not arise. Members of the House of Lords who are officeholders, such as Ministers, are and will remain subject to tax and national insurance contributions in the normal way on payments of salary.
The report says that, should primary legislation be introduced, the SSRB would conduct a further review of the level of the daily fee, taking into account,
“the different rates of tax payable by Members in different circumstances”.
If the necessary legislation is not forthcoming in the short term, the SSRB will in any case review the level of the fee three years from its introduction and every three years from then onwards.
On overnight accommodation, the SSRB recommends:
“Members whose principal residence is not within a reasonable commuting distance from the House of Lords should be entitled to recover the cost of one night’s overnight accommodation for each qualifying attendance at the House”.
The upper limit for overnight accommodation claims would be reduced from the current limit of £174 to £140. Reimbursement up to that limit would be on the basis of receipts. The SSRB further recommends that the House retain a hotel booking agent, as government departments do, to find and book hotel accommodation for Members if they so wish.
As at present, Members who have a principal residence within Greater London would not be eligible to claim the overnight accommodation allowance. Under the recommendations of the report, those Members with principal residences outside Greater London would have to make a confidential statement to the House authorities explaining why their principal residence was outside a reasonable commuting distance of London in order to claim the allowance. Members would also have to provide a signed declaration stating the location of their principal residence and explaining their criteria for designating it as such.
My Lords, did the SSRB give any consideration to amalgamating the residence allowance with the attendance fee, thus vastly simplifying the whole operation? Why did it not consider putting the residence allowance and the fee in one single overall fee?
My Lords, I am afraid that I cannot say whether the SSRB considered that or why it came to its conclusions. There is a lot in the report and my job today is to explain what is in it, not what is not in it.
The SSRB report makes a series of six recommendations on Members’ travel. These relate to vouching for expenditure on travel claims, the classes of travel for which Members can be reimbursed and travel for family members.
The report also makes recommendations on the publication of information about expenses held by the House and the frequency of publication. In line with the recommendations of the Eames report, it makes recommendations on the investigation of complaints relating to Members’ expenses.
We have much work ahead of us, but the House Committee has taken the clear view that we must seize this opportunity to accept the principles of an external, independent review and to get on with implementing them. The ad hoc group, which is the subject of the third limb of the Motion before the House, will provide a further opportunity for Members to feed in to that implementation process before resolutions to agree a new scheme for the new Parliament are brought back to the House. Agreement to the Motion before the House today would constitute a significant step in the right direction. I beg to move.
My Lords, I am grateful to the noble Lord, Lord Brabazon, the Chairman of Committees, for his skilful exposition for the benefit of the House of the background and main points of the report from the Senior Salaries Review Body on financial support for Members of your Lordships’ House. Once again, we face today important issues for this House to consider and it is crucial that we get these issues right.
In line with the importance of our considerations today, and with the leave of the House and the agreement of the usual channels, I will be taking the unusual step of speaking twice in today’s debate, now, with the other leaders of the party and non-party groupings, and then at the end of the debate, as Leader of the whole House and as a member of the House Committee, to reply to the points that noble Lords have put and to draw the debate to a conclusion. My noble friend Lord Peston asked why I was responding to the debate today. There was a discussion in the House Committee, at the end of which I was asked to respond to the debate. I said that I would be honoured so to do and am doing so today, but I must stress—
My Lords, I have no doubt that the noble Lord, Lord Brabazon, will take back very strong messages, as indeed I shall, but I should stress that at the end of the debate I will be replying as Leader of the House. It is incumbent upon me to do so. To begin with, however, I want to set out the Government’s position on the SSRB’s report.
The Government’s role in relation to the system of allowances in your Lordships’ House is clear. First, the Government meet the cost of your Lordships’ House, which is a highly cost-effective House. The SSRB’s report points out, for example, that the total cost of financial support for Members of your Lordships’ House in 2007-08 was £18.4 million, compared to a total cost of MPs’ salaries and allowances of £159.5 million, so that the direct cost of Members of this House is just 11.5 per cent of the cost of Members of another place. Members’ expenses also comprise a relatively small proportion of the costs of this House. At 15 per cent of the total annual running costs, Members’ expenses are considerably less than items such as buildings depreciation and capital charges, which together comprise 43 per cent of the total costs. Some might regard this House as already legislating at a very low price; it certainly is a bargain.
Secondly, in connection with the Government’s role in relation to the system of allowances in this House, the Government have a responsibility to seek improvements to the system and to help resolve any difficulties, just as they did on MPs’ expenses. Thirdly, and as a result of that role, it was the Government in the shape of my right honourable friend the Prime Minister who—at the request of the House Committee of your Lordships’ House—formally referred the issue of financial support to the SSRB and who, with the Lord Speaker, received the SSRB’s report last month.
My right honourable friend the Prime Minister made clear the Government’s position on the day of publication of the report, when he made two particular points. First, he stated clearly that the Government accepted the SSRB’s report. Secondly, he stated that the Government—in precise terms, that I, as Leader of the House—would work with other Members of your Lordships’ House,
“to take forward its implementation”.
My noble friend has just told us about the relevance of our costs and the agreement of the Government on that. However, has she noticed that in Annex A of the report the Prime Minister has added to the terms of reference, asking that they should consider reducing costs?
My Lords, I did indeed notice that. The Prime Minister has many responsibilities in relation to the finances of the country, and most people would think it right and proper that he should ask the SSRB to consider that. Having said that, what is important in these matters is value for money—and the House gives extraordinary value for money.
I am aware that there has been a wide range of responses to the SSRB’s report, beyond the responses of the Government and the main political parties. I am particularly aware of the breadth of the responses from all Members on both sides of your Lordships’ House—everything from keen espousal of the report to outright rejection of it and virtually all points in between. I am sure that today we will hear representation of the various views during our debate.
However, a substantial number of Members of your Lordships’ House, having read the report itself—rather than either the speculation which preceded it or the even more extraordinary supposed reporting of it on publication—judged it to be better than was predicted and the sound basis for a new system of financial support for Members of the House. I know, too, that many Members from both sides of the House have a range of concerns about what is being proposed. I have listened to and read in detail the comments that have been made to me and in other ways, including meetings of Back-Bench Members. I know as well that leaders of the other principal groupings in the House have taken similar extensive soundings. I look forward to hearing their remarks shortly.
I do not wish to usurp Members’ own remarks to the House by setting out those concerns in detail, but they cover many aspects of the SSRB’s report, including the current and future diversity of the House; taxation, accommodation and travel issues; the practicality of a number of the proposed arrangements; and the timing of future reviews. In particular, several Members are concerned about what they see as a proposed system that is far from simple, how overbureaucratic the proposed system seems and the staffing and resource implications for the House. Many Members believe that there is a need for a clear and simple system which not only this House but those beyond it can grasp. It should be simple for the House to understand and run, and simple for the public to comprehend and approve.
There are a substantial number of issues here to be considered. In addition to the 26 specific recommendations put forward by the SSRB, there are other issues detailed in its report which the SSRB itself has asked the House to consider and make decisions on. That is the value of the establishment of the ad hoc group: to consider, consult and advise on implementing proposals for a new system of financial support for Members of your Lordships’ House in the wake of the publication of the report. This is entirely in line with the response of the Government, set out by my right honourable friend the Prime Minister, and that is what is set out in the Motion from the House Committee which is before us today.
The Motion asks the House to approve the principles and architecture of the SSRB report, and to establish an ad hoc group of Members of your Lordships’ House to consider, consult and advise on the implementation of the new financial system of support for Members. It might be helpful for me to give an example of what is meant by these distinctions. Some of the most critical recent media coverage of Members of this House has centred on Members’ primary residences. The House has acknowledged publicly that at present there is, in effect, no meaningful definition of “primary residences” in force. The principle involved here is that the House should be a diverse House, for instance by comprising men and women from all parts of the United Kingdom. The architecture of that principle would be in providing a proper definition of a primary residence to allow those Peers whose main home is outside London to attend the House. The practicalities of that—the issues for the ad hoc group to consider following the SSRB report, which includes a definition and criteria for a primary residence for Members of the House—would be precisely what such a definition should be.
I come to principles, architecture and practicalities. I believe that the principles of the SSRB’s report, which propose a system that commands public confidence and provides clear guidance to Members of this House, are absolutely right. They are enunciated clearly in the report itself. No Member of the House is prevented attending and playing a full part in the activities of the House because of a lack of financial resources. Members have the right to reimbursed against receipts for unavoidable costs incurred wholly, exclusively and necessarily in the performance of their parliamentary duties. We maintain the geographic and other diversities of the House by ensuring that Members from throughout the United Kingdom can afford to attend. We have rules on expense claims which minimise the scope for any abuse.
Just as we have done in relation to the Code of Conduct for Members of your Lordships’ House by the House’s adoption a fortnight ago of the Eames report, so too in relation to expenses we adopt the seven principles on public life set out by the Committee on Standards in Public Life. We minimise administrative burdens both for Members of the House and the House authorities, while ensuring the accountability of public money. These are all matters of principle on which I believe we can all agree. I believe, too, that the architecture is right. In the modern age of greater openness, transparency, and accountability, and especially in the difficult climate this year around the issue of parliamentary expenses, particularly in the other place but in your Lordships’ House too, we need to move towards a system in which there is transparency, openness and accountability.
We may not quite achieve that while this House remains unreformed. Members of the House will be aware that part of the Government’s proposals for further reform of this House is to move Members of a reformed Chamber on to a salaried basis. That would have to include a comprehensive system of allowances. However, in advance of that, we need a system of financial support now for Members of this House which has an architecture in which, for example, receipts as appropriate are the norm, as they are now in relation to Members’ travel; in which there is, as I mentioned earlier, a proper definition of primary residence; and in which, for instance, there are increased and improved audit arrangements. These are all matters of architecture on which I believe we can all agree.
However, I believe also that there are a number of issues about the particularities and practicalities of the report’s recommendations which we need to examine, not least because the SSRB has asked us to do so. That is precisely why we need the ad hoc group I mentioned earlier. I echo the noble Lord, Lord Brabazon, the Chairman of Committees, in hoping that if your Lordships’ House approves the Motion which is before us today, accepting the proposals of the House Committee, not the SSRB’s report itself, a scheduled meeting of the House Committee tomorrow will be able to establish such an ad hoc group so that it can begin work on these issues immediately. Based on the work of the ad hoc group on the issues arising from the SSRB’s report, there will be practicalities of a new system of financial support on which I believe we will all ultimately be able to agree—I look forward to the House doing so when it has studied the work of the ad hoc group—so as to have in place a new system of financial support in time for the new Parliament following the general election.
When I spoke earlier of the Government’s response to the SSRB debate, I omitted to mention that the Government accept the two rates, as it were, mentioned in the report; that is, the daily fee and the overnight fee. I got slightly discombobulated when my noble friend questioned me and I thought it was important to put the Government’s view on that on record. I know that some Members of this House are concerned that the net effect of an inappropriate or misapplied series of proposals on allowances would lead to a number of Members disengaging from this House, and returning the House to one which is largely wealthy, retired, male, south-eastern and narrowly based. We must guard against this. We now have a vibrant House of which we are all proud, and we must retain the wealth of our diversity.
I strongly support the Motion before us, which proposes accepting the principles and architecture of the SSRB’s report; following the report by establishing an ad hoc group of Members of your Lordships’ House to consider, consult on and advise on implementing a new system of financial support for Members; and reviewing that new system a year after its implementation. This will give us what it is important: a House with a system of allowances which commands public confidence, is comprehensible to the public, is accountable, transparent and subject to regular audit, and is simple and practicable. It is vital, though, that we have a House which—as it is now—is hard-working, effective and diverse; is sufficiently broadly-based and effective to hold to account the Government of the day; is a key part of the Parliament of the United Kingdom; is a House whose Members are dealt with as Members of the Parliament of the United Kingdom; is central to the British constitution; and is one of the most necessary of the checks and balances of our constitution. That is the House which we in this House and in the country beyond want and need. That is the House which, in resource terms, including our system of allowances, we must ensure that we provide.
The SSRB itself says in its report that this House,
“is a very important element of our constitutional framework, although much of the population … does not fully appreciate its significance, impact and the value it provides”.
It goes on to say:
“In the course of our review we have come to understand and appreciate the vital constitutional role played by the House of Lords. It relies heavily on the goodwill and public-spiritedness of Members who devote substantial time and effort to their work … in the House”.
I agree with those views and I believe that the Motion before us from the House Committee is the right Motion. I urge all Members of the House to support it.
My Lords, I was delighted to be invited to speak early by the noble Lord, Lord Bassam, the Government Chief Whip. Perhaps I may also say, given that it has become controversial, that I wholly agree with the idea that the noble Baroness, Lady Royall, the Leader of the House, should reply to this debate. There is a very good reason for that. As this report was jointly commissioned by the House Committee and by the Prime Minister, it is entirely appropriate that a senior Minister should respond at the end of the debate.
As I am following the Chairman of Committees and the Leader of the House, I shall not trouble your Lordships with a lengthy speech setting out the case for accepting this Motion, as I hope that your Lordships will.
The proposal for an ad hoc committee to consider how in practice these recommendations might best be put into effect, together with the undertaking that the House Committee report back to your Lordships on the impact of that system in a year, offers a degree of flexibility. That is sensible. It is flexibility that I know many noble Lords feel is so clearly necessary. However, the noble Baroness has referred to the background of this report, and we all understand what that is. We all know that there have been abuses—by a small minority, certainly, but abuses no less. We know that, given the intense scrutiny of everyone in public life at present, we must show not just willingness to take independent advice but a positive readiness to accept it when it comes.
There are defects in the report, and I shall point out some, but I believe that they are matters that can be ironed out. I have confidence that the process recommended by the Chairman of Committees will ensure that this is done. I therefore join the noble Baroness in urging your Lordships to accept the Motion today.
Accepting the report must include adopting the architecture of the system—namely the structure of the two allowances and the amounts as proposed, and its key principles, such as the proposition that claims for overnight stays must be backed by receipts. I do not doubt for one moment the high sense of honour of your Lordships, but it would simply not be understood by the public if a system of receipting were rejected. However, there is no reason for that system to be even more complex than it need be.
When I first heard the term architecture, I thought of one of our great cathedrals. I accept the form of this cathedral. I also accept its scale. So I hope that this debate is not an occasion for unseemly haggling over the figures proposed. However, that does not mean that you must accept outright every decoration of that cathedral, every gargoyle and pediment. After all, some odd flying buttresses have been clamped onto this one by its authors.
There is the idea, for example, implicit in paragraph 3.13 of the report, that if a noble Baroness and her husband are travelling by train from Scotland to attend the State Opening, they must travel in separate compartments. There is the proposition that while noble Lords are permitted to travel by first class rail to enable them to work better, Peers who come from Northern Ireland—as the noble and learned Lord, Lord Carswell, who is not able to be here today, pointed out to me in a letter—cannot travel in the more spacious parts of the cabin. Many other examples come to mind, and no doubt your Lordships will be mentioning them either in this debate or in a letter to the new ad hoc committee. I believe that most of those issues can be sorted out.
These are perhaps minor details, but they are part of a picture that some noble Lords have put to me which suggests that there is a meanness of tone in parts of this report. It is not mean in terms of money. After all, your Lordships are not here for money. Our House has never been a place where people come to make money, and it never should be. Being a Member of this House is, and has always been, a tremendous honour. We should not deride that in any way.
This is an unpaid House that gives outstanding value for money, so I hope that the SSRB will not take it amiss if I say that I was disappointed by a statement in paragraph 2.23 that your Lordships’ counterparts in Holland, Austria, Belgium and Ireland “cost significantly less”. The cost of your Lordships’ remuneration is £25,000 a head. In Holland, it is £46,000—nearly twice as much; in Austria, it is £96,000—four times as much; in Belgium, it is £120,000—nearly five times as much; and in Ireland, it is nearly £160,000—more than six times as much. These are just the Houses whose Members the SSRB has told the world cost considerably less than ours. In France, the cost is £110,000; in Italy, £136,000; and in the United States, £258,000. Even in Poland, the equivalents of your Lordships draw £72,000 a head on average. Dare I say that it is a little sloppy to imply that your Lordships cash in in a significantly more costly way? I believe that your Lordships do not have snouts in the trough. This report should not, and does not, change that fact but it might be a little more sensitive to the realities of life.
Many noble Lords have said to me that they feel that the report does not give due weight to differences between the two Houses. I can see why that might be so. We have to recall that when the Prime Minister commissioned the report, it was he who instructed the SSRB to,
“work closely with Sir Christopher Kelly in producing recommendations”.
Mr Brown, the Prime Minister, at that time envisaged putting your Lordships under the same external regulating body as the other place—an idea pressed again in recommendation 26 of the report. Therefore, your Lordships might feel that it was the Government who pushed the authors of this report down what I believe to be a false trail. A workable allowance system for this House—unpaid, for many part-time, and for all not representative—cannot and should not replicate the Commons, which is salaried, full-time and representative.
Most of the problems that we have had recently have concerned so-called second homes. There have been flagrant examples of bad behaviour here which need to be dealt with, and that in itself is one reason why we should accept the report’s demand for greater controls here. However, there is an illusion, perhaps again resulting from the Prime Minister’s instruction to work with Kelly, that the second homes issue in the Commons and the second homes issue in this House are connected. I do not believe that they are.
Members of this House do not have constituencies. They do not turn up at a selection meeting where the first question they are asked is, “Will you find a home in the constituency?”. You do not need a second home to do this job but what you do need, whether you live in London or not, is a place to lay your head near enough to enable you to attend your Lordships’ House. That is why in July I suggested in my evidence to the SSRB that we should have a system based on one single allowance to recognise all the costs of attendance, with travel costs dealt with separately. That would have avoided the complications of trying to mend a second home system which originated with the Top Salaries Review Body in the first place and which has led to so much trouble. It was rejected, for reasons in paragraph 3.8 that I do not find wholly convincing, but rejected it has been. I have to tell your Lordships that I accept that, because we must work with what we have.
However, in respect of homes, I only wish that there had been more equitable treatment of those who own and those who rent. In a House with an average age of nearly 70, many Peers will have acquired their homes and paid off their mortgages. Would there be another walk of life where, after we have been encouraging home ownership for generations, a report would suggest, as paragraph 8.12 does, that noble Lords who own homes should sell them, incurring all the costs involved, and rent another one so as to benefit from the rent offset allowances offered? I fear that that will happen, and I shudder at the likely public reaction. Can the authors of the report seriously intend that to be a consequence of their proposals, and will they undertake to defend it if it happens?
I have also been struck by the number of noble Baronesses from all parts of the House who have asked, “Was it because all 10 of the authors of the report were men that they saw no issue in lady Peers, some of them elderly, needing financial support to rent a hotel room in Victoria rather than be in their own homes?”.
Sensible though many elements of the report are, there is a great deal for an ad hoc group to look at. However, despite its defects, the report does offer a coherent basis for a system that—stripped of some of the barnacles set on it—will hold down costs, will be more transparent and can be more openly audited in a way that meets our duty of accountability. It is far from perfect, but it does what we ask. It addresses areas in which the current system no longer carries public confidence. I believe that those matters needed to be addressed. Change is never congenial, and as we have seen in other aspects of the life of this House, we do not always get it right the first time. The Members’ group can take us forward on some of the details that I have mentioned, and on many others that I am sure other noble Lords will raise.
With that in mind, my firm recommendation is that we should accept the broad structure and principles of the report today, as the Chairman of Committees has asked. We shall have another opportunity to debate points of detail when the Members' group reports and when the House Committee reports back on its impact a year into its operation. The present system does not carry full confidence outside but the report offers the basis for a fresh start, and I urge my colleagues to support the Motion.
My Lords, the Leader of the House and the Leader of the Opposition have done the House a service by being so unequivocal in recommending acceptance of this report. The Leader of the House rightly put our debate in the context of the wider issues of conduct, reform and the crisis of confidence that we face in terms of public attitudes to our Parliament.
During the past five years, I have been a member of the Leaders' Group, the Procedure Committee and the House Committee, the main committees responsible to the House for allowances and conduct. Over the past few months, as we have had to deal with the various challenges to the reputation of this House, I have asked myself many times whether we, who were charged with these responsibilities, could and should have acted sooner and with a greater sense of urgency to avert some of the troubles that have beset us. On conduct, I do not think that is true. On the issue raised by the Sunday Times sting, we acted decisively and even rejected the views of an Attorney-General to assert our right to discipline wayward Members. We acted quickly to appoint the Eames committee, which moved with commendable speed to report. In my view, our acceptance of that report puts matters of conduct and discipline on a clear and transparent basis. I am less sure that we can claim the same about the handling of expenses and allowances.
The truth is that the system that we are in the process of replacing is, to put it at its kindest, cheap and cheerful. Its main benefit was that it allowed Members of modest means to participate fully in the work of this House and also allowed for a greater geographic spread of participation. In short, as the Leader of the House indicated, it prevented the House of Lords becoming the preserve of the rich, the retired and the London-based.
Whatever any strict interpretation of the rules may have said, Members were encouraged by nods and winks to assume that they could claim beyond reimbursement for outgoings and expenditure to provide a little padding. Such rough justice worked well in encouraging men and women in their 40s and 50s to accept working peerages in spite of the fact that such acceptances involved loss of career and salary advancement within their profession as well as a large measure of pension contribution and entitlement.
As that rough justice worked, as it provided a very effective and value-for-money return to the taxpayer and as its cost was not bureaucratic and cost little to administer, perhaps we lost sight of the change in public mood to such arrangements. As the Chairman of Committees reminded us, and as the SSRB bluntly put it, our existing systems,
“lack precision, transparency and rigour”
and do not meet current standards for control of public money. Or, as the Lord Speaker put it in her excellent Hansard lecture last Thursday, which I recommend that every noble Lord read:
“having failed to provide any clarity over what has constituted reimbursement for actual expenses and what was an allowance, and having been regulated with the lightest of touches. The system was an accident waiting to happen and happen the accident did”.
Whether those of us charged with responsibilities in those matters could and should have acted earlier is a judgment easier to make with hindsight. In June of this year, we did act, as the Chairman of Committees explained, by referring the matter to the SSRB. My group, the Liberal Democrat group, submitted joint evidence to the SSRB which recommended replacing the attendance allowance, office costs and 40-day additional office costs by a single, taxable daily rate for the job. Our evidence also called for a specific and receipted overnight allowance. These changes, we argued, would involve,
“a significant switch in resources used presently for accommodation needs to general financial support”.
That being the thrust of our evidence and the outcome of the SSRB deliberations, I hope that my colleagues on these Benches will support what the House Committee has called “the architecture and principles” of the system proposed in the SSRB report. The House Committee also recommends that an ad hoc group of Back-Benchers,
“consider and consult on issues in the … report and advise on their implementation”,
and the Leader of the House has set out in her speech some of the topics that noble Lords could submit as ideas to the group.
I support that way of going forward. Like the noble Lord, Lord Strathclyde, I agree that we need to deal with some of the gargoyles in the report, but it would be disastrous if we were to allow it to be thought that by setting up the committee we were giving ourselves some wriggle room on the main recommendations of the report: namely, the £200 daily allowance and the £140 overnight expenses. Those, in my view, are the immovable iron poles of what has been termed the architecture, and voting for the resolution today should mean accepting those figures. We cannot appear to be setting our own rates—in that way lies public condemnation.
What the ad hoc committee can and should do is look at some of the recommendations on overnight expenses so that they are fair and realistic not only to hotel and club dwellers, but to renters and owner-occupiers as well. I hope that it will look also at guidance on travel both for long distance out-of-towners and middle distance commuters. Some of both the wording used and implementing bureaucracy suggested by the SSRB would be more suitable for tagged prisoners on day release than for Members of the House of Parliament.
In the excellent Hansard lecture to which I have already referred, the Lord Speaker cited President Obama's Chief of Staff, Rahm Emmanuel, as advising, “Don’t let a serious crisis go to waste”. That is good advice. That is why, like the Leader of the House and the noble Lord, Lord Strathclyde, I believe that the ad hoc committee should be bold in looking at how, while accepting the broad architecture of the SSRB, we use the collective wisdom of this House to make sure that we have the accountability and public acceptability which I think acceptance of the SSRB report will bring. However, at the same time, we must not burden the public purse with a bureaucracy whose costs will outweigh any notional savings and which will not reflect the realities of life for an active working Peer.
Retaining and enhancing the reputation of this House is a three-legged stool. The first leg is the Eames report, which, as I said, offers a clear basis of truth and consequences in terms of conduct in this House. The second leg is our response today to the SSRB report. Our message must be that we accept the report and that we are determined to make it work.
The third leg is equally important if the other two are to stand. I do not believe that public patience with this House will long remain if the notional membership is bloated to more than 800 in the next year without at least the very modest proposals suggested by my noble friend Lord Steel making their way into law. The Constitutional Reform Bill seems to be dawdling a suspiciously long time in the Commons. Unless the provisions relating to this House can be enacted before the general election, any notional saving to the public purse will be swallowed up by the cost of new creations, who are bound to be regular attenders. I accept that fundamental reform of this House is for another day and another Parliament, but we must do what we can in the time remaining in this Parliament to tidy up what we can if we are to avoid further public outrage and contempt.
I think I have said before that it is now 43 years since I first entered this Palace seeking my first political job. I did so with a sense of awe for what it is, and what it stands for, and awe I retain to this day. My predecessor on these Benches, Roy Jenkins, once likened public trust to carrying a very valuable glass vase across a highly polished floor. It is our turn to do the carrying. Voting for this Motion tonight will be one step in ensuring that we do not slip.
My Lords, can the noble Lord clarify whether he regards the overnight allowance as part of the architecture, and therefore immovable? If he does, would he care to comment on the previous report by the SSRB, which stated in Appendix 2, paragraph 5.9
“It is our view that the current arrangements for reimbursing the costs of overnight accommodation in London are fit for purpose and set at an appropriate level”?
That was in January 2008, when the level was £174.00.
My Lords, this is a long awaited day. There is a full House to debate the report before us and express our views freely. All that really needs to be said has been said, and so I should agree with most of the previous speakers and sit down, but I am not going to—at least, not immediately. I want to put on record two points: first, a recognition of what the new scheme will mean to many who have relied on expenses as a form and, indeed, sometimes the only source, of income, and, secondly, the recognition that the current system cannot continue, if only because it invites actual or potential abuse, however fuzzy, and is therefore not fit for purpose in the 21st century. This has been brutally exposed in recent months and has done more damage than I think this House is ready to admit. I suspect that none of us wishes to creep around being unsure about whether we are entitled to a given allowance, and I hope that the clarity that the report aims for will be a relief to most of us.
I know that some views expressed today will be somewhat hostile, and perhaps that is inevitable, but I would like to point out that the work that we do in this House is adequately acknowledged in the introduction to the report and the case for reforming the expenses system is certainly cogent. I shall not go over the arguments that were made in the report and were subsequently made by others, but I support the main pillars in the conclusions of an allowance, a cap on overnight expenditure and the vital issue of receipts. As has been said, there are many other aspects of implementation that will have to be sorted out, and the main concern expressed by Cross-Benchers is that there should be a degree of flexibility in the application of these new rules.
What is meant by flexibility? Given the principles of good practice and good employment that this House enjoys in the day-to-day administration, the different needs of individuals must be taken into account. To give but one example, a rigid system whereby attendance might in future be electronically recorded would unfairly discriminate against the disabled who perforce need to do much parliamentary work at home. Again, there will be occasions when an extra overnight stay is necessary beyond four or five nights a week for reasons of weather, illness or even late sittings in this House. There are already quite salient differences in the amount of work that individuals put in to, say, committee work: some Members chair committees and/or work many hours per week, others decline to sit on committees or perhaps attend less than half the scheduled sessions. Some are prevented from attending due to illness, and the system of expenses that is anticipated will penalise those who can least afford it by disallowing during the recesses recompense for what has been lost at sitting times.
No doubt some noble Lords will feel that it is no longer worth attending the House, no matter how committed they are to public service; others will simply be unable to afford to attend if their travel and overnight expenses are not covered; so, while the report aims at clarity and fairness, the system must also be sufficiently flexible to accommodate those who do not fall neatly into the categories that are set out in the report. This will be the task of the working group, if it is agreed by this House, under anticipated competent chairmanship. I believe that the group will be ready to listen to Members with special needs and to take these into account. With this in place, I feel sure that most of your Lordships will agree to the Motion before us.
Finally, I for one rather favour the share-a-room scheme, and suggest that the House might set up a ballot so that proper democratic allocations can be made on the basis of “first come, first served”, rather than along party political lines.
My Lords, I should make it clear at the outset that I speak personally on this matter, although, from the limited consultations that I have been able to undertake, I believe that other Members on these Benches welcome the report and urge its speedy implementation.
A number of speakers have already emphasised the word “independence”. Indeed, the independence of the recommendations is what is important at this time. The self-regulation of the House is a very important characteristic of the House, but self-regulation does not preclude proper recourse to independent and authoritative advice. That is the key aspect of this report. Even if some Members of the House feel unhappy about aspects of the report, independence is absolutely crucial, as the noble Lord, Lord McNally, emphasised. I also associate myself with the noble Lord’s views on the Constitutional Reform and Governance Bill and on other issues to do with the reform of the House. In many ways, I am a minimalist in this, but if we do nothing we will jeopardise the House as we know it more than anything. That lurks in the background of our debate this afternoon.
I have a couple of words to add about accommodation, particularly given the general experience of Members on the Bishops’ Bench, who are usually not here sufficiently often to justify renting accommodation. I strongly welcome the idea of access to a booking agent or accommodation office for Members of the House, which would be very valuable particularly when we need to book accommodation at short notice. If we are booking some way ahead, I am sure that suitable accommodation within the figure of £140 could be found. Sometimes, however, business comes up at short notice in the House and one needs to book accommodation, so to have the use and protection of an accommodation office would be a wholly helpful development, not least if the market rate in London at that time was pushing above £140. Indeed, I go further and ask why, if we might be able to use a travel card, the underlying bill itself should not be met by the accommodation office directly if the accommodation has been booked through it.
There is one small proviso, however. The report talks about the recommended standard of accommodation, but, so far as I can see, is rather silent about what that standard should be. That needs to be teased out with care, because it should not be assumed that all we need is a bed for the night. If I am in London, typically I work into the evening on the business of the House. I could work in the Bishops’ Room, but the Bishops’ Room has only three desks and I ask noble Lords to imagine what would happen if all 26 Bishops turned up to work in it. You would need the Danish police to exercise crowd control and to sort things out. There is a need to have somewhere outside the House where one can at least have a desk or a table at which to work. Those who maintain flats almost certainly have that. Those who stay in booked accommodation need more than just a bed. I am not asking for luxury, and I hope that the House Committee will look at those matters.
Secondly, there is an assumption in the report that Members of the House have only one principal residence. In the case of Bishops, that is a little hard. We have a see house where we live, but which we do not own. Typically, towards retirement, a bishop may buy a retirement house somewhere else in the country. Most often, understandably, we will travel to London from our see house. I do not think that I have ever travelled to London from my house in the Scottish borders, but I can imagine that circumstances will arise when I will need to do so. We need to give attention to whether there can be proper reasons why a Member of the House has two residences; that is, the principal residence and, as in my case, a separate house which for tax purposes is the only house that I own. I hope that the House Committee will look at details of that sort. I feel that it is incumbent upon us to look at issues like that and to move as swiftly as we can to accept this report.
I do not think that it is just a heavy cold, for which I apologise, that makes me dislike this Motion so much. I wish that we were being asked simply to take note so that our views could be heard before we make commitments that we may regret. When the noble Baroness the Leader of the House comes to speak I hope that she will be able to persuade me that we are not putting our heads in a noose. She has given us definitions of “architecture” and “principles”, which I can completely accept. But she did not reassure me that we would be able to change the damaging proposals in this report, which were described by my noble friend Lord Strathclyde as the gargoyles. I will be seeking reassurance from the noble Baroness when she winds up that there will be real scope for the ad hoc group to have sufficient flexibility in preparing the proposals for implementation to ensure that they can be made fair and workable. For a good many of us, such assurances will be important.
The Cockburn review and our affairs are linked by an umbilical chord to the Kelly report. For that reason, I will start with a few words about the conduct of MPs and the conclusions of Sir Christopher Kelly. Those of us who were MPs when pay and the allowance system made impossible the kind of abuses that have occurred feel as angry as any member of the public about what has happened. Having said that, I fear that the remedies proposed will damage our system of parliamentary democracy. My fears are exactly the same as those set out so admirably on 23 November by my noble friend Lord MacGregor of Pulham Market during the debate on the Queen’s Speech. Like him and the writer of the Times editorial on 5 November, I regret that the Kelly report failed to make any comment about the need to,
“attract and retain people of high professional standing”.
Sir Christopher Kelly, with his denial that salaries would need adjustment if allowances were to be slashed, his view that other employment should be limited in scope and his failure to understand the effect on family life of his rules about the kind of accommodation that will be permitted, seems blind to the consequences of his proposals. We need to consider the wise comments of Sir John Baker, the former chairman of the Senior Salaries Review Body, in his powerful letter to the Times on 6 November. He wrote:
“Once the new expenses regime is in place and the last repayment made … there should be a substantial increase in MPs’ pay no matter what the ‘court of public opinion’ or tabloid headlines may say”.
Unfortunately, we are in the middle of a financial crisis and public sector pay freeze, which is the same situation as that which led to the introduction of an allowance scheme to avoid putting up the pay of MPs and inexorably on to the disaster we have witnessed. One way out would be to accept the good sense of Sir John Baker's view, which is:
“We need the best MPs, although ideally a lot fewer of them—450 should do it”.
The solution may indeed be far fewer MPs who are properly paid, because, as Sir John went on with words that apply equally to this House,
“we need good-quality people, capable of meeting the policy challenges of our complex society, of producing legislation that is coherent, thought-out and considered with care, and of holding the executive better to account … the policy objective should be fewer but better: that means paying the right price, not settling for shoddy goods in the bargain-basement”.
That leads us rather neatly into the needs of the second Chamber.
The remit for the review stated that the SSRB should have regard to schemes operated in comparable circumstances by other institutions. Mr Cockburn and his colleagues seem to have gone out of their way to obscure the comparison of remuneration levels here with those in other countries, but they provide enough information to make it possible for us, as my noble friend Lord Strathclyde has done, to calculate the numbers ourselves. It is clear that in the Upper House remuneration league, we are in the relegation zone.
The report describes the vital nature and scale of the work we undertake, and states that one of the objectives is to help to ensure that no Members of the House are prevented or deterred from playing their part by their financial circumstances. Having stated the objective, the review body then proposes that the amount paid to a large section of this House should be substantially reduced. The proposal that the day subsistence and office costs allowances should be combined and rounded up to £200, with the 40 days allowable for office costs in the Recess removed, is sensible. But although some Members, mainly those living in or close to London and spending little on office costs will be better off, a great many others who claim the overnight subsistence allowance will be big losers.
I shall make two observations at this point. Like my noble friend Lord Strathclyde, I am astonished that not a single woman is included among the 10 members of the review body. Perhaps that is why they believe that MPs and Peers should have no family life and be content with a one-bedroom flat. Like the recommendation that Peers should be allowed to travel first class on the grounds that they need to work but should dispatch their spouses to the crowded standard-class carriages, or worse, to share standard-class sleepers, it is just petty and small-minded, but underestimates the contribution made by spouses and the sacrifice they make all the time so that their partners can contribute to public life. It is the kind of attitude that will discourage many who could contribute from doing so.
Secondly, secretaries will still have to be paid and office expenses met. I am in favour of the simplicity of a single allowance, but it will be misrepresented as pay. The report misleads by saying that a Peer attending all sitting days would receive a net income of around £30,000 a year, ignoring travel and overnight accommodation. I would wager that Mr Cockburn does not include his secretary’s pay and office costs in any statement of his own net income.
I return to the overnight subsistence allowance where the changes are likely to have devastating consequences for many Peers. It is not just that the upper limit of £176 originally set by the SSRB itself is being reduced to £140, but other changes which mean that most Peers will only be able to claim a fraction of that amount. In order to illustrate the effect of those changes, I must beg the indulgence of the House by describing my own situation, which is probably not untypical. I spend four and, when the House sits on a Friday, five days a week in the Lords except for a couple of weeks in February when I am on holiday. I serve on two demanding committees that sit on two and sometimes three days a week and involve reading a vast quantity of paper. In recent years, I have served on the joint pre-legislative scrutiny committees on two important Bills, and I have taken part in the proceedings on a number of other Bills. If my party is returned to government, I will be invited to stay long hours to ensure that its majority is maintained. I travel from my home in Wales, which has been my principal home for more than 30 years except for the eight during which I was a Cabinet Minister when all Ministers were deemed to have their main home in London. Last year, in total and after paying office expenses, I received about £32,500 for my contribution to the work of Parliament and to maintain a home in London. I do not believe that the leader writers, journalists and broadcasters who are so free with their criticisms would undertake my workload for less, or—dare I say it—make a more valuable contribution.
As I own our home in Wales, our small house in Battersea, which I paid for with the aid of a mortgage which has been paid off, is in my wife’s name. Under the existing rules I have been able to claim up to £174 per night spent away from the main home,
“towards the costs of maintaining a London residence in connection with … parliamentary duties”.
Although Parliament sits for an average of only 150 days a year, we have to maintain the London house for a full 12 months. I do not believe that I or others like me should be deprived of family life for five months out of 12 while we lodge in a club, hotel or one-bedroom flat. My wife and I both contribute to the family expenses and I have been paying all the costs that would be recoverable under the rules now proposed. Under those rules—I am not sure that every noble Lord will have taken this on board—I and others are to be denied any overnight subsistence, by the words,
“rented or owned by the Peer (either singly or jointly) and that he or she is personally liable for the running costs”.
If my understanding of those words is correct, anyone in my position will get nothing. There must be a strong case to amend the rules to accommodate family situations of this kind.
Even if the rules are amended, Peers owning or renting houses as second homes in London will still have their allowances slashed. Allowable running costs are to be confined to council tax, utility bills, ground rent, insurance, service charges and approved security measures. There is nothing for repairs, maintenance, cleaning, duplicate telephone or internet services or the simple fact that running two homes costs more than twice as much as running one. Then if I attend for 123 days, as I did last year, I will get 123-150ths of that heavily confined list of costs, assuming that the ownership rules would allow me anything. Bizarrely, as has already been pointed out, many Peers who rent one-bedroom flats will be able to claim more than those of us who own houses.
The review body acknowledged that there would be Peers who had organised their personal affairs on the assumption that they could use the current allowance system to offset the cost of keeping second homes in London, and that the proposed changes would significantly reduce their annual income. It therefore proposes a transitional arrangement ending after five years. If my situation is at all typical, noble Lords in that position will find their night subsistence allowance cut by around a third in year 1 and by well over two-thirds by the sixth year. That will be pretty devastating for Peers who have organised their personal financial affairs under rules established by the same SSRB that now proposes to tear them up. We will face uncomfortable choices, which may well include selling one or other of our homes or giving up our parliamentary work.
It may be said that if older Peers such as me are forced out, that would be a good thing. The trouble is that younger Peers will find themselves in the same situation. If the country wants an effective second Chamber it is hugely important that younger Peers are able to serve without hardship or the possession of large personal wealth. The need for accommodation that caters for family life is even more important in the case of that younger generation.
We will hear in the debate of other consequences of this review, particularly from those who are not wealthy but have served with distinction both in the Commons and in the Lords who will now face real hardship as a reward for long and continuing years of public service. The need for transitional arrangements is accepted by the review body. I do not believe that five years is long enough; it needs to be quite a lot longer.
The conclusions of the review fail to meet the criteria of fairness. The combined consequences of Kelly and Cockburn will be deeply damaging for our system of parliamentary democracy. They will cause some of the most able members of both Houses to withdraw while discouraging others from coming forward, make membership of the Commons impossible for those with outside employment and the knowledge and skills that they used to bring to it, make membership of both Houses far easier for those with money than for those without, and create a Parliament in which talent is discouraged by low pay and the inability to lead a normal family life. I fear that long after the scandal that stimulated these reports has been largely forgotten, the names Kelly and Cockburn will be remembered for the devastation that they will have wrought. The nation will pay a heavy price for the weakened and undervalued Parliament that they will have created.
If, as I hope she can, the noble Baroness who is to wind up, and whose leadership has earned the respect of the whole House, will confirm that in accepting the phrase “the architecture and principles” we are not also accepting the gargoyles—the really damaging proposals—and that there will be sufficient flexibility in interpretation to produce a fair and workable set of arrangements, then, although still anxious, I will feel able to accept the Motion. I will then place my trust in the sagacity and skill of the ad hoc committee.
My Lords, when I started to read the SSRB report I did not expect to agree with it. However, I did expect it to be of high quality and of the standard of an evidence-based Lords’ committee report; it would summarise all the evidence and back-up the statements made in reference to specific evidence received; it would state clearly at the beginning the central questions and analyse them appropriately; and only then would it go on to conclusions and recommendations, the latter being coupled with arguments explaining why it is reasonable to believe that the outcome would be better than what currently prevails. The SSRB has published a report which meets none of these requirements. If this was a Lords’ report, no clerk in this House would allow it to go forward. How then the House Committee can come to your Lordships with the Motion on the Order Paper is beyond me. If ever a report was largely ad hoc and not based on discernable principles, it is this one. As for architecture, I find it impossible to discern what it can mean in this context.
As the SSRB could not provide any fundamental principles, I propose to do the job for it. On the day when the world’s greatest economist has died, I shall start with the relevant cost concept which, to quote my noble friend Lord Lipsey, is, in the case of a London home, the opportunity cost of the home, and the interest foregone is central to that. Any true economist would argue that this is the most logical basis for an allowance. The phrase “opportunity cost” appears once in the report and is then totally ignored.
There are three distinguished economists on the SSRB—all males, of course—each of whom knows that it is fundamental to economics that expenditure and costs are not the same things. However, this report treats them as equivalent. For example, anyone who owns and lives in a flat in London which could be rented out, say, for £1,000 a month, incurs a cost of £1,000 a month even though no expenditure is involved. Anyone who comes to your Lordships’ House having given up a day’s work where they could earn money—as in my glory days when I used to earn £1,000 a day—that is a cost because it is an opportunity foregone; it involves no expenditure. How the three economists on the SSRB could have signed this report is beyond me.
On the central questions, the most important one—the noble Lord, Lord Crickhowell, has made the same point—is how any proposals on allowances will affect the work of your Lordships’ House in scrutinising legislation, in holding the Government to account and in publishing major committee reports. The SSRB takes it for granted that what it proposes can do no harm. I say “takes it for granted” because it makes no effort to address the question directly and offers no relevant analysis. Moreover, it proposes to replace a simple system that works and causes us to work—what the noble Lord, Lord McNally, called cheap and cheerful—with an extremely complicated system which places greater burdens on Peers in just trying to understand how to use it and reduces the allowances available to a great many noble Lords.
However, a more worrying question is whether noble Lords will carry on working for this House under the new regime in the way in which they did so previously. Again slightly inverting what the noble Lord, Lord Crickhowell, said—and while it would be a terrible mischance for the country—it is at least possible that noble Lords on this side will find themselves in opposition. Having spent 10 years slogging my guts out on the opposition Front Benches at great personal cost, I do not think that, if I were the same age again, I would remotely consider it my duty. My noble friend the Leader of the House should ask, in case of the disaster that we might lose the election, who will do the work on our side.
It has been suggested that some Peers work harder than others and that it is unfair. I do not doubt that some Peers work harder, but I know of no organisation in which that sort of thing does not happen. When I was a lecturer, there was enormous variation. Some of us worked much harder; some of us worked much less. Some of us would be asked, “Can you give my lectures for me, because I’ve got something else I’d like to do? I’ll pay you back”. I still am owed several hundred hours of lecturing. I do not think that unfairness is a central question.
I would not have thought it unreasonable for Peers who have worked enormously hard in the past but do not feel able to work quite so hard now still to be able to claim allowances without having fingers pointed at them for not doing enough work. I have spent much of the past decade either chairing or being a member of a committee. At the moment, I am sorry to say, I am not a member of a committee, for the obvious reason that my noble friend the Chief Whip has not appointed me to one. But I must tell him that as a result of that, which I know will cheer him up enormously, I shall have a great deal more time to make mischief in the Chamber.
Many Members of your Lordships' House suffer from various disabilities. One of the most appalling and nastiest—I use the word advisedly—aspects of the SSRB report is a sentence stating that noble Lords who wish to claim any special sums to help them with their disabilities must provide receipts. I am not happy to be a Member of a House that would raise that for someone who suffered from a disability. My legs hurt, but it is not a major disability. However, one’s spouse acts to a greater or lesser extent as a carer. What is a reasonable distance for commuting for one Peer may be very unreasonable for another. Again, the SSRB does not seem to appreciate that. Although my wife and I row all the time, we actually like to be together. A system that recognises that some of us are very old fashioned and like being with our spouses is one that we regard as reasonably normal. The SSRB states that a Member who claims for the cost of a second property in London should always declare that as not his or her principal residence for the purposes of council tax and capital gains tax. Many years ago, I thought that I had better ask the Inland Revenue about precisely the point implied in the SSRB report on capital gains tax, and it told me that the difference between first and second properties for Lords’ purposes was nothing to do with the revenue at all, that it did not want to know about it and would I please stop bothering it about that. How, then, the SSRB has invented this doctrine now is beyond me. As the noble Lord, Lord Lawson, put it in his evidence, which home has been nominated as main home to the Inland Revenue is clearly the least important question; the matter is not a matter of substantive importance but purely a matter of ensuring that you pay capital gains tax on one of the properties.
There are two other witnesses that I should like to mention, both noble friends of mine. My noble friend Lord Donoughue, in a very brief piece of evidence to the SSRB, reflected the views of most Peers, especially in his emphasis on the value for money that noble Lords provide and the need not to set up a vast bureaucracy. My noble friend Lord Williams of Elvel was equally brief and definitive. He said that it would be absurd to ask Peers to produce receipts for London flats, rents and service charges—and I agree with him. When it was suggested that we did not work hard enough, he asked how anybody could value the contribution of an idiot who attended and spoke every day against a sage who sensibly spoke rarely. Above all, my noble friend said—and this is my position—we will have enormous difficulty devising any system that replaces the present system and that is acceptable to the House and satisfies the media. We are going to have to recognise that.
I come to what I was moaning about at the start of this debate: how we should proceed at the end of it. There are many more speeches that I am looking forward to hearing and I am certainly not keen that the House should divide on this or reject the Motion. What I would most like—which is why I raised the question of who is winding up—echoing the noble Lord opposite, is for the Chairman of Committees take our view back to the House Committee and tell it to come back with a rather more acceptable form of Motion reflecting what is said here. It need not delay the committee a long time, but it will delay it a bit. In particular, it should reflect what we are saying today. What bothers me is that I do not see, under this Motion, how very much of what we say today—and I have no idea how many speeches we will hear—can possibly affect the specific outcomes that we get.
My Lords, to avoid unnecessary repetition, I shall concentrate on one very important issue that we have to address today. I hope that all Members who value the reputation of this House have now read the address given by the Lord Speaker to the Hansard Society in the Robing Room last Wednesday, to which my noble friend Lord McNally referred. We are in grave danger of ignoring the impact on the public that we serve if we think that this report is only of internal interest and significance to this House. That would lead to the “gilded bunker” mentality to which the Lord Speaker referred. I am especially concerned that we do not continue to imagine that we can ourselves be the final arbiter of our allowance package. That was exactly how MPs got into the quagmire of scandal from which they have yet to emerge. I know only too well from my own experience that the public were astounded and horrified to discover that MPs regularly debated and decided their own remuneration package.
This House agreed to invite the SSRB to examine and recommend a comprehensive new allowance regime. Sadly, the board’s work has been far from perfect. Maybe, given the timescale, it was impossible to achieve perfection. I do not complain that it has come up with a cost-saving package; after all, that was what the Prime Minister asked it to do, though, incidentally, not what the House asked it to do. Nor do I complain that I personally will be out of pocket; I suspect that the vast majority of your Lordships’ House will be in one way or another.
I am, however, concerned that it seems to have misunderstood, or deliberately misrepresented, the role and responsibility of your Lordships’ House in the 21st century. I shall take one example, to which brief reference has been made already. How does the SSRB expect those of us who want to do a good job here, and do not necessarily ourselves have the necessary experience and talent and who therefore need to employ well qualified staff to help us to do so, to pay someone only for the days on which the House sits and we attend, as in paragraph 3.12? Does the board cling to some anachronistic view of us from our aristocratic predecessors? Does it imagine that we can bring up a spare manservant, groom or ghillie from our country estate to help us out when we are in town to attend the House? It is an extraordinary idea. I hope that that in particular will be the subject of some re-examination by the ad hoc group.
Obviously there are other issues in the SSRB package that need clarification or even modification, as the noble Lords, Lord Peston and Lord Crickhowell, have said. The House Committee’s recommendation of an ad hoc group of Members of your Lordships’ House to examine these proposals should cause us some anxiety. It would be certain folly if we made it the final arbiter of this package, let alone if it came back for a debate, a Division and a decision in your Lordships’ House. Surely it would be sensible for this detailed examination to be completed before the general election, as the Motion from the Chairman of Committees has suggested, and for a new Parliament to see in place. It would be both stupid and insensitive to leave the last word on the subject of that package to the House.
Are we obliged to go back to the SSRB, with all its defects, for that independent imprimatur? I hope not, because our experience of its lack of understanding of our role suggests that it would be better to find another independent arbiter. So what is the alternative? Clearly, it is to invite the Independent Parliamentary Standards Authority to provide the essential review and final, independent approval.
It was clearly premature of the Government, back in the July debates, to rule out any role for IPSA in determining how best to implement these recommendations. The exclusion of this House from the provisions of the Parliamentary Standards Bill can now be seen as a classic case of the “gilded bunker” mentality. Paragraph 7.13 of the SSRB report should be read again by all Members contributing to today’s debate, and particularly by the Government.
Last week Ministers completed a drastic U-turn, with their agreement that IPSA should undertake much wider responsibilities in relation to MPs’ salaries and pensions. Indeed, Harriet Harman announced no fewer than seven major changes to that Act. Again, perhaps that was an example of legislating in haste and repenting at leisure. There is therefore no reason whatever for them to resist the logic of a change here too. The recent refusal to appreciate the need for second thoughts was very ill advised. An eighth repeal of the exclusion clause would signal that we in this House recognise that our credibility and integrity are, in the public mind, still at stake.
On these Benches, we hope that the Leader of the House, in response to the anticipated acceptance today of the main structure of the SSRB package, will now agree that IPSA should be invited to examine and give the final detailed approval to the allowance regime for Peers. That was the clear recommendation in the SSRB report—number 26—and it should have been accepted by Ministers just as readily as the others. I reinforce the point made by the right reverend Prelate the Bishop of Chester. We need to demonstrate that, on this of all issues, we are prepared to take independent advice and, for our final package, to have that independent authority. Anything less will risk renewed public accusations—even more justifiable than previously—that the House of Lords is fixing its own remuneration package. That would indeed reinforce the public perception that we are legislating in a gilded bunker. Just think what that would do to our battered reputation.
My Lords, I am more than aware of the contempt in which Parliament is held today. I agree with many of the comments made throughout the House but I consider the detail of the report to be, quite frankly, an insult. It is quite apparent that members of the SSRB have no idea whatever of what a working Peer does—and that work, it must not be forgotten, is done in extremely cramped conditions where very few of us have an office to ourselves.
I have dedicated 19 years of my life to this House, and in the last Session for which statistics are available I attended 88.4 per cent of the sittings, despite the fact that I have a 400-mile commute to make. Often in the past, bucket-and-spade holidays with my children when they were young had to be cut short or, indeed, sacrificed altogether. I am sure that very few of your Lordships could put their hand on their heart and say that they have never “clocked in” for two minutes and then disappeared. In my 19 years I admit to having done so twice, and once was on my wedding day.
In the old days, I remember being a teller in the Lobby at 3 am when more than 400 Peers trooped through it. I wonder how many members of the SSRB are awake and working at 3 am. My dear friend the late Lord Weatherill, who was such a loved and respected Convenor of the Cross Benches, always used to remind me that for every minute you are on your feet in the Chamber, you ought to spend at least an hour in preparation. For my maiden speech, I made 99 drafts; for the first debate that I ever led on the arts and heritage, I was on my feet for 15 minutes. As a matter of interest, I kept an exact count of the number of hours I spent in preparation for that, and it came to 117 hours—I repeat, 117 hours. For those of us who sit on European sub-committees—as the noble Lord, Lord Crickhowell, has indeed mentioned—there is an enormous amount of work and reading to be done. Every Saturday morning, I receive at least an inch of paperwork relating to our weekly meeting; again, the SSRB has totally lost account of this fact.
Every morning, my wife’s final words to me are, “What time will you be back?” Of course, it is impossible to know, particularly if you are involved in a Bill. I remember preparing a speech for the last Energy Bill nine times before I delivered it on the tenth sitting day in Grand Committee. Likewise, if there are likely to be votes, as we all know, it is difficult to ascertain the exact time of the vote. It must not be forgotten that that could play complete havoc with any social life that one might try to have, let alone spending quality time with one’s spouse, as the noble Lord, Lord Peston, mentioned. Again, the SSRB has completely failed to take that into account.
Now I, too, turn to travel, especially for those of us who travel long distances. It is incredible to think that the recommendation is: if you are not working, you should travel second-class. In the past, I have often taken the sleeper to Edinburgh, and while it is difficult to sleep on such a conveyance, it is also difficult to claim that one is actually working. The idea of having to share a compartment with a complete stranger or, for that matter, another noble Lord is really unbelievable. The proposal that spouses should travel second-class on long journeys—and I emphasise that they are long journeys—while accompanying a Member of this House who might legitimately be working is, in my view, completely unacceptable. Also, as the noble Lord, Lord Peston, mentioned, the recommended six visits per annum for a spouse is just nasty and indeed mean.
With regard to overnight expenses, there are hotels where, if you are lucky, you can get a room for £140 a night. However, you might well incur a taxi fare of £20 each way. Travelling late at night, particularly for elderly female Members of this House, is a very scary experience. Not for one moment am I suggesting that any Member of your Lordships’ House should stay in a five-star hotel, but it is interesting to note that some of them charge upwards of £470, plus VAT, per night, and that is before you have had a peanut, let alone breakfast.
Another aspect of parliamentary duties which has been completely overlooked is being a member of an all-party parliamentary group, of which there are 584. I am the office bearer in three of them and a member of a further six. These take time to prepare for, particularly if you are chairing a session and then have to lobby and hold telephone or face-to-face meetings with officials and/or Members of the other place. Again, the SSRB has totally failed to take that on board.
My youngest son, who, at the moment, is an unqualified accountant, is charged out at £125 an hour. If he was qualified, that would be nearer £200. If a senior partner is charged out, it is for £600 an hour. I have no idea when we will finish tonight; there are rumours that it might well be midnight. Just think: the senior partners of a firm of accountants can get paid £600 an hour.
I hope that by now I have proven how derisory the £200 per day attendance suggestion is. At the moment the cost to the taxpayer for a Member of this House is £3.81 a year. To put that in context, unaccountable government quangos with salaried members last year cost each and every UK household the staggering amount of £3,641 a year. I wonder who gives the best value.
Before I came here I had a secretary for six hours a week. Now I have to have someone for 36 hours a week to do all the things that I would normally do if I was not here. This, again, is something that the SSRB has totally failed to take into account. I agree with what other noble Lords have said about non-sitting days and secretarial allowances. One other fundamental point is that we must not forget that we all have a Writ of Summons to attend Parliament.
Your Lordships will be delighted to hear that I conclude by reiterating that I think this report is an utter insult to those of us who have dedicated our lives to working here. I greatly look forward to the reply of the noble Baroness, who is held in such respect and affection throughout the House. This report will undoubtedly have a negative effect on attendance figures, but perhaps that is exactly what Her Majesty’s Government want.
My Lords, we have already enjoyed some lighter moments in the course of this debate, but, fundamentally, it is an extremely serious debate. Its seriousness is equalled only by the seriousness of the situation in which the institution of Parliament finds itself. The SSRB report says that our debate is taking place against,
“a climate of unprecedented public concern arising from serious abuse by some MPs of their expenses system”.
“While not on the same scale, there have been some allegations of abuses of the expenses system in the House of Lords”.
This creeping contempt for the institution of Parliament has been mentioned by a number of noble Lords. Many noble Lords know much better than I, a relative newcomer, that the House of Lords is one of the most extraordinary institutions in the world. We also know that while this is one of the largest second Chambers in the world, it is the least costly, as has been pointed out. We cost the taxpayer less than a third of the cost of the House of Commons. That is not based on allowances; that is the total cost. We also sit for more days, scrutinise more legislation and sit for longer hours than any other second Chamber in the world. I know these facts because I constantly dish them out as I travel about doing outreach work on behalf of the Lord Speaker, as do many other noble Lords. When you produce these facts for the enormous variety of groups addressed by many colleagues in this House, people are first astonished, and then extremely, and pleasantly, surprised.
Our unsalaried Members bring to our legislative functions the broadest possible range of experience, wisdom and knowledge from all parts of British society. This, too, has already been mentioned. Our membership is more diverse in terms of gender, faith and race than that of the House of Commons. Our work also benefits from the expertise of Members with a wide range of disabilities.
We are being asked today to agree the architecture. We need to make the Leader of the House aware that people do not like the term “architecture”. I wonder how much easier this process would be if “framework” had been used. People do not like “architecture”; it is not just the gargoyles, it is the architecture as well. I shall refer to the framework of new arrangements for our fees and allowances. We are also being asked to agree to the establishment of an ad hoc committee to examine the practicalities of their application. I suggest that, as we debate them, we need to have in the forefront of our minds not only the reputation of our House and of the whole institution of Parliament but the question of whether the SSRB proposals will damage or enhance the unique qualities of the House as a legislative Chamber and, in particular, whether their adoption will make it easier or more difficult for people from all walks of life to become Members. The majority of speakers who have mentioned this seem to feel that the proposals may well make it more difficult to maintain our diverse representation.
Many noble Lords are deeply unhappy that this matter has to be debated. I do not share that view, given the events and feelings in another place. We rightly pride ourselves on being a self-regulating House, but if we do not debate this and do not take decisions for ourselves, someone else will do it for us. After all, it is very clear from the report that the Prime Minister himself has demanded that this exercise result in a reduction in costs.
Many feel that the proposals do not take into account noble Lords’ wide variety of circumstances. I share that view. I find it shocking and incredible that the SSRB does not have one woman member. I did not think that that was legal. I understand that, not long ago, the SSRB interviewed people for the five vacancies but could not find a single woman to fill them. I hope it is watching, because if it advertises again, it may well find people suitable to help it in its deliberations. Indeed, if there had been women on the SSRB, its proposals would have recognised the issues surrounding Members having to ring up an agency late at night to see whether a hotel somewhere in Brixton could accommodate them. We cannot use taxis; that is also right. We routinely sit later than the other place—that is another point. If there had been women on the SSRB, someone would have said that older women might find such arrangements difficult.
Some of the proposals are unfriendly to families, spouses and partners. Much has been made of the suggestion that noble Lords may travel first class only if they are working. This introduces a whole new range of inspectorates. Or should the public be alerted to spot whether a noble Lord is working in the first-class compartment? Of course, it could be more embarrassing when we examine what goes on in sleepers. But what we are certain of is that your spouse cannot be in the sleeper with you. You will be in a first-class sleeper but your spouse will be in guard’s van, as far as I can make out. I do not wish to appear to be sexist, but I cannot help feeling that a woman member of the SSRB—just one—might have spotted this nonsense before it got into print.
I am also very concerned, as are we all, that the new arrangements should not result in people becoming Peers only because they can afford to, and because they live within the M25. One of the marvellous things about this House—I have already mentioned diversity—is its geographical diversity, which enriches every debate and consideration that we make. Paragraph 1.15 of the report gives a nod to this concern and then dismisses it. We have heard already—and we shall certainly hear more in this debate—from those who strongly believe that that concern should not be dismissed so lightly.
The detail of exactly how the new arrangements will work is of key importance. That detail has been raised again and again. If the Motion is eventually agreed, the ad hoc committee will have much work to do. The so-called architecture—namely the introduction of the merged daily fee—will undoubtedly cause difficulty for some. On the other hand, it would bring clarity, certainty and even comprehensibility to a system which we all accept has just grown.
We cannot ignore the crisis of confidence in the public mind with regard to the whole of Parliament. Although that crisis has been caused largely by events in another place, we are not, in the public’s mind, absolved from the responsibility of reforming ourselves. It was this House which agreed that the whole issue of our allowances should be subjected to the outside scrutiny of the SSRB. We have its report. Its conclusions are unacceptable to some, but most of us think that they need to be refined in detail.
As I said, I am a relative newcomer to this House. In my four and a half years here, I have grown to understand and to value more than I can say its unique qualities, the respect it rightly receives from the public and the extraordinary and vital position that it occupies in the legislative structure of our country. I would not wish for any of that respect to be lost or diminished by our taking the wrong decision today. We have the prized tradition of regulating ourselves. The Motion enables us to continue that tradition and I intend to support it.
My Lords, after those five Exocets, perhaps I should declare an interest—not a pecuniary one but as a former chairman of the SSRB rather a long time ago. Then, 40 per cent of our membership were women, and a tremendous contribution they made too. When, as my noble friend Lord Butler will well remember, I succeeded my predecessor, Lord Plowden, he said to me, “My boy, if you take this on, you do realise that it is the ultimate poison pill”. That was 20 years ago and I am still here. In those days, not only were women well represented on the SSRB but we carried out our roles voluntarily—in our own time and without pay. That is as may be.
Having heard those five speeches, I well understand the concern that many noble Lords have about the details of the report, but I support wholeheartedly the Motion in the name of the House Committee and the line taken by the Government. I draw a parallel with what happened to a report that was presented to another place in 1992-93, for which I suppose I had responsibility as the author, and with what happened in the other place. I very much hope that, despite their reservations, your Lordships will look at the bigger picture.
As has been said many times in this debate and in the one held a fortnight ago on the report of the noble and right reverend Lord, Lord Eames, the ripples of public opinion, to use a current phrase, may only just be lapping the sandbags around the Peers’ Entrance and we may not have had the catastrophic flooding that occurred in the climate change of public opinion relating to politicians in another place. However, we must realise that, whether we talk about the architecture, the cathedral or the framework, we absolutely have to accept that it would be a tragic mistake for this House to reject a report that was commissioned by this House and, through the Prime Minister, the Government. It would be a very great mistake to reject it.
I am not saying that all the detail is perfect, as it very clearly is not; nor am I saying that any of the reports for which I was responsible for six years were perfect—they were not. I cannot remember a single report that was totally accepted in every detail by the Government. Sometimes reports were staged for reasons of economic imperative and so on; sometimes details were altered; and sometimes one felt that some of the details were altered just to keep us on our toes. In one case, I remember that when we returned, bloodied, to discuss what had happened to our report, I was so moved by what had occurred that I instructed the staff of the OME to play the last Sir Humphrey episode of “Yes, Prime Minister”, and the parallels were very great. We did that instead of reading the minutes.
I want to refer, in particular, to a report commissioned in 1991 on office cost allowances in another place. I shall not bore your Lordships with it too much but one recommendation was made in order that Members of Parliament could achieve,
“higher standards of employment practice”.
One objective was that,
“the way in which the allowances are used should meet high standards of public accountability and employment practice”.
When the report was debated, it was rejected, together with the architecture and the framework. Many of your Lordships were almost certainly in the other place at the time, and the noble Lord, Lord MacGregor of Pulham Market, may remember this, as he told me shortly afterwards what had happened when, as John MacGregor, he was Lord President. However, the report was rejected and the Members in another place voted themselves 20 per cent more than had been recommended. I want to read three short extracts from that debate:
“Let us not fool ourselves: whatever the rights and wrongs of the issue, it is being observed by the public out there, and the public are about to undergo an economic phase in which they will have not inflation-plus rises but perhaps inflation-minus rises. They will ask themselves why we are behaving like a 1970s trade union and awarding ourselves increases for reasons that they will never understand”.
The second quote is:
“The Government commission an independent report. They establish a committee of people who are distinguished in their fields, under the chairmanship of Sir David Nickson. The secretariat is provided by the Office of Manpower Economics”—
and consultants are used. It continues:
“The committee takes many months to do its work. It takes evidence from hon. Members on both sides of the House”,
and so on. The report is then rejected.
My final quote is:
in this case, the House—
“if they propose to deal with these matters by referring them to review bodies”—
to an independent outside body, in this case the Senior Salaries Review Body—
“must decide in advance to accept the review bodies’ reports”.—[Official Report, Commons, 14/07/92; cols. 1086-91.]
In general terms, they must accept the recommendations made. That report was rejected. Had it not been rejected and had its architecture or some of its framework been adopted, I think that very many of the problems that we have seen in recent months might not have occurred.
I have two last points but I do not want to go into any detail. I am not saying that everything is perfect. When I chaired the SSRB, it was called the Top Salaries Review Body. I felt that that title was slightly inappropriate and your Lordships may feel that the change to the Senior Salaries Review Body was perhaps a wise one at the time. It is entirely right that the House Committee should consider this matter. No doubt it will consider the points made so eloquently by many noble Lords who are unhappy but, when the time comes to consider this, I urge the House to accept the report in broad principles, as it would be most unfortunate if we took a different view.
My Lords, the former chairman of the SSRB has just urged us to accept the report, as have the leaders of all the political parties in your Lordships' House and the leaders in the other place. I guess that they would have urged us to accept it even before a word was written, because it is suggested that there has been abuse. I looked into that and Bill Cockburn, the current chairman of the SSRB, said that it will restore public confidence.
We are told by the Sunday Times that public confidence in your Lordships’ House has been damaged. The Sunday Times, which was scooped by the Telegraph as regards MPs expenses, decided that it had to look under every conceivable leaf to see whether it could find abuse here. I asked House of Lords research staff to check on the abuse and, up to a couple of weeks ago, the alleged abuse was by 29 Members of your Lordships' House out of 735 Members, 582 of whom claimed some allowances. That is the level of abuse. There have been another two cases in the past two weeks. As has been indicated, many of those instances would be found not to be abuse at all precisely because there is no definition of “main home” in the current rules which still apply. That is the level of abuse that has been found by the Sunday Times and by no one else. We now have a situation in which it is assumed that those in this House are as guilty as those in the other place and it simply is not true. There is absolutely no evidence to that effect.
I accept that the SSRB has tried its best to produce some kind of balanced recommendations, but even the noble Lord, Lord Strathclyde, pointed out that it has failed in a number of respects. The fact is that, as has been mentioned, it has failed to get a reasonable balance at all in its recommendations. I accept that transition would be of some little help to some, but that is not an answer. We are talking about a basic system of allowances and expenses for your Lordships' House. We are now told, if we accept the Motion before us today, we must agree with the architecture and principles. Even the noble Lord, Lord Strathclyde, in asking us to agree, pointed out that much of the architecture of the recommendations is faulty, to put it mildly.
My noble friend the Leader of the House tried very hard to define architecture and principles, but anyone listening would be bound to accept that she failed. Unfortunately she did not and could not define architecture and principles properly—it is impossible—yet we are being asked in this debate simply to agree with the architecture and principles. For my part, I cannot agree, I do not agree. That is not to say that I am suggesting to your Lordships that we should vote tonight. I agree with the noble Lord who has just spoken that that would not be helpful, but the fact is that the architecture and principles are not something that I, for one, can agree with.
There are some major recommendations. The one on taxation is surely absurd. We are not on a salary, we are on expenses. If, eventually, there is an elected House—which I do not believe would be any better than the present one—and Members are on salaries, that is one thing, but to talk about now asking a Government to change the law to allow the taxation to take place is another. I hope that whoever is in government in this country in the near future will not accept that recommendation. I hope that they will not dream of putting into a Finance Bill the taxation of our allowances.
I agree with the idea of an ad hoc committee, particularly one made up of Back-Benchers with no Front-Benchers on it—perhaps a few former Front-Benchers. I have heard rumours about who would be chairman of the ad hoc committee. If the name that I have heard is accurate, I would strongly support the noble Lord, Lord Wakeham. The SSRB has come up with one or two good things. It has now defined “main residence”. Not everybody will agree with the actual definition but I could accept some of it. The idea that we should now simply agree this resolution seems to me to be unacceptable to the House.
I urge my noble friend, when she comes to wind up the debate, not just to listen and say that we will go back and let the House Committee decide once we have agreed the architecture and principles. If we accept the resolution, we also accept what the House Committee report states about what the ad hoc committee would do. Paragraph 5 states:
“We recommend that the views of members should be taken into account and inform the final resolutions to be put before the House. The SSRB's report asks the House to consider a number of issues … we would propose to set up an ad hoc group to consider and consult on issues in the report and advise on their implementation”.
I want it to do a lot more than that. I want the House to consider clear terms of reference.
I ask my noble friend to go back to the House Committee tomorrow to say that it is quite clear that the House does not accept the recommendation that we agree to the architecture and principles. We want clear terms of reference for the ad hoc committee, which I am sure that this House would then consider and, very likely, agree. I urge my noble friend to recognise that that is what the House wants; I hope that she does as well.
My Lords, I am not often accompanied by a kind of Red Indian greeting. I shall take advantage of the opportunity. I wish to follow in the recent steps of the noble Lords, Lord Nickson and Lord Barnett. It is desirable that we identify a path which, for the reasons aired in the debate so far, some of them deeply moving and highly persuasive—for example, the speeches made by my noble friend Lord Crickhowell and the noble Lord, Lord Peston—makes it plain that the structure and design in the report are not the right framework in which we should try to go forward. I do not want that to be regarded as a dismissal of the efforts of those who got us to this position. The extent to which the Front Bench leaders, most notably led by the Leader of the House, have been working together to try to find a solution for this House, as a House, is to be welcomed, as it has been welcomed. One of the mishaps that has struck the other place is an increasing pattern of competitive sneaking, with counter allegation matched by counter allegation, instead of a coming together. We should count ourselves lucky that our leaders have reached that point.
The content of the report has been discussed in great detail, and many flaws have been identified. They make it difficult, if not impossible, to regard the framework as the right one in which to proceed. Even if it is not mentioned in the resolution, there is no reason why the ad hoc group should not be invited to examine the way forward, starting from the report, without being obliged to accept the framework. There is a developing, articulate insight in to the kind of things that ought to be achieved.
If we look at the proposals in a little detail, the suggestion of integrating the daily fee with secretarial and office allowances is complicated and would be difficult to operate. The SSRB identified an element of income in the current arrangements, an income component that is very imperfectly defined and only halfway there. That does not take us anywhere. One recognises some changes proposed on top of that. The SSRB offers a vision of a future that at first takes the form of a transition, leading to taxation of those allowances next and an elevation of the cost of the entire exercise in order to make taxation possible. That is an absurd, circular contradiction in terms. I do not think that anyone will be delighted to see a shadowy transition period in which one of the elements is the arrival of further reform of this House, wherever that may take us. It is a transition of indefinite length in which it is plain that changes will be made to make more resources available from the taxpayer without any changes being made in the inadequacy of what is proposed in other respects. That is not an acceptable way forward.
Without looking at it in great detail, the overnight allowance is admitted at the outset to involve a substantial reduction in its value. My noble kinswoman and I share the same dwelling most of the time, and it is a relief to find that the single allowance that we share 50:50 between us will be increased by thirty-three and a third per cent. Indeed, it is exhilarating. This really is not an effective way of tackling this.
I am avoiding the uncomfortable task of trying to offer my own prescription in great detail, and suggest instead that we should not wish to see Members of this House denounced en masse because we have contented ourselves with moaning and whining and with moving stories that are only half idiomatic, or because we have occasionally found moments of good humour in this debate. We understand the seriousness of the position and the need to put together not just a structure but a way ahead that takes account of the points and speeches that have already been made.
I am prepared to accept with some enthusiasm the inspirational idea of the noble Lord, Lord Barnett, that my noble friend Lord Wakeham might chair the ad hoc committee. My noble friend and I have worked together in many ad hoc situations, and I have found no better “ad hoccer” than him, so I underwrite what has so far been proposed. Let us avoid being compelled to accept the resolution before us, but let us recognise that the SSRB has tried to identify some components with which they agree, although so far not enough, and recognise above all that our leaders of the parties are trying to maintain a unified approach by this House to find the best way of preserving our reputation and getting the right financial outcome. That is the destination that I commend to the House. Heaven knows what we will vote for and against, but I hope that we are all getting the same idea.
My Lords, I am very glad to follow the noble and learned Lord, Lord Howe. I will take one of his points a little further. I am also very glad to follow my noble friend Lord Nickson, but if he goes back a long way as a chairman of the SSRB I go back much further as a member of the Review Body on Top Salaries. That is the only reason why I venture to say anything today, and my contribution will be very short.
I became a member of the Review Body on Top Salaries 33 years ago under the chairmanship of Lord Boyle of Handsworth. Our first report was made a very long time ago, in 1971, and was on the salaries of Ministers and Members of Parliament. In 1976, we made a report on allowances for Members of your Lordships’ House: the first such report since the report of the Lawrence committee. The general shape—that seems to be the best word—of our report back in 1976 is very similar to the general shape of the report today, but the figures might just bear repeating. We recommended an overnight subsistence allowance of £11 a night and a day subsistence allowance of £6.50. How things have changed in 33 years. That report differs in one respect from the report now before us. We considered then whether Members of the House of Lords should be remunerated directly for the job that they did, and came down against that view for two reasons. The first was constitutional, and I will try to explain it by quoting two or three sentences from our report:
“In this respect, we find ourselves in agreement with the view of the Lawrence Committee that a recommendation from an outside body in favour of the introduction of direct remuneration ‘might well amount to a recommendation on the reform of the House of Lords itself’. Clearly, such an implied recommendation would be well outside our terms of reference”.
That is the first reason, which it may be said has now been rather overtaken by events.
Our second reason was very practical. How would the recommended daily fee in lieu of expenses work in relation to taxation? That practical problem remains. After the necessary legislation has been put in place, I think that almost everyone would accept that that fee will have to be taxable. But what about travel? Under present law, as I am sure your Lordships know, a taxpayer is not entitled to deduct the expenses of getting from home to work against his liability for tax. How will that work under the daily fee system? Is it intended that the general law should continue to apply in relation to travel expenses when the daily fee is being paid or will there be a special exception for Peers getting from their home, wherever it may be, to the House of Lords? That is an important point. I do not expect the noble Baroness when she comes to reply to be able to answer it unless the answer is in the report. I have not been able to find it. Clearly, it is a matter which will have to be considered at some stage.
As to the figures, I say nothing. We have listened to very powerful speeches from the noble Lord, Lord Crickhowell, and my noble friend Lord Palmer. I would feel happier if the figures of £200 and £140 were not part of the architecture and principles which we are being asked to support today. If the ad hoc committee could have another look at those figures, I would find it much easier to support the Motion.
The noble Lord is referring to gargoyles in the context of the noble Lord, Lord Strathclyde. I do not know what I can say as to where exactly the gargoyle fits. I thought I heard the Leader of the House saying, in passing, that the figures are part of what we are being asked to approve. But, if not, I should be much happier to support the Motion. That would be my answer, which I think the noble Lord, Lord Crickhowell, wanted before—
Perhaps it would be helpful if I clarified this point. At the beginning of the debate, I said that I, on behalf of the Government, agreed with the figures of £200 and £140. I think that other noble Lords from the Front Benches and the noble Baroness, Lady D’Souza, also agreed that. It is for the House to take its own decision. In agreeing the principles and the architecture today, it is a matter for the ad hoc committee to look at these issues. Personally, I feel that these figures should be agreed. That is my view, and that of noble Lords opposite and the noble Baroness, Lady D’Souza. But it is for the committee to look at these issues.
The noble and learned Lord had difficulty in finding another example of people in paid employment who receive tax-free travel expenses. I do not think that he needs to look any further than the other place where Members of Parliament who live within 20 miles of their constituency are entitled to claim the costs of travel both within their constituency and their homes, and between their homes and London. There is a precedent and it is in this building.
My Lords, one can understand people getting worked up about expenses. The noble and learned Lord, Lord Lloyd of Berwick, recalled that when he was a member of the Top Salaries Review Body, the expenses were £11 a day. When I came here they were £3 a day; in fact, there was nothing to start with. All you got was a first-class rail fare, provided you attended a certain number of sittings. If you got flu during the fourth week of the month, you were not paid anything because the expenses could not be carried over. There was great excitement when the expenses were increased to £3. The newspapers went wild and said that the bluebloods—they were bluebloods in those days—would be taking their girlfriends out to London nightclubs on expenses. That was absolute rubbish.
I am afraid that I do not think that mine will be a particularly helpful intervention. I hope that that does not matter, but sometimes it is a good thing to stand back and survey the scene from a distance. What does one see? The House of Commons is being destroyed, and why is that? Because a court ordered that all the files in the Fees Office should be published. It was too great a problem to be done in-house and so the task was, as the Americans would say, outsourced to a contractor. There, the disk concerned was copied by an employee who hawked this property, belonging to someone else, around Fleet Street. No one wanted to touch it but the Daily Telegraph, which purchased a copy of the material that rightly belonged to someone else for, I understand, £300,000, and then published it drip by drip, day after day, rightly or wrongly—and so it continues.
What was the result? Another place has been turned into turmoil. The Daily Telegraph has had Parliament running scared. Many people who have spent their lives honourably working for their constituents and for their country have been blackguarded, characters have been assassinated, and many who are giving up as Members of Parliament are saying that they are thankful that they are leaving. What a terrible reflection of years of hard work and pride—and what a reflection it is of what is happening to Parliament. Now another place is to be administered by a quango costing £8.5 million per year. The chairman is to be paid twice the salary of a Member of Parliament for a three-day week just to ensure that Members of Parliament are not paid too much. That is a good old mix-up. I think that people have gone off their heads. The whole point of Parliament is that it should be separate from the Executive and not run by it. Members of Parliament are elected to run the country and to keep a check on the Executive, not to go to Parliament and be immersed in the web of the Executive’s regulations. We certainly do not want it run by the media.
There is nothing which some alteration and clarification of the rules could not have put right. Your Lordships may say, “What on earth has that got to do with us?”. I shall tell your Lordships: everything, because in my view, “they” are trying to draw your Lordship’s House down through the same pipe. It was thought better, therefore, that we should be ahead of the game, and so the Senior Salaries Review Body was asked to look at your Lordships’ House. It would have been too much to expect the Senior Salaries Review Body to say that everything was fine, so it has made some recommendations, and odd ones they are too.
The overnight fee is going to be reduced by £45. Why is that? As the noble Lord, Lord Gordon of Strathblane, said earlier, it was only last year that it was put up to £174. Did the Senior Salaries Review Body consider that it had made a mistake, or that it was too much, or that your Lordships have been living in too much luxury? Now your Lordships will have to produce receipts. This means getting two bills from the hotel or club—one for the room and one for the telephone call to the wife, the newspaper and the bedtime drink if you feel inclined to have one. What does this mean? As I understand it, the finance department, which at the moment has around five people looking after Peers’ expenses, will now have to take an extra eight people—just to check. The department will have to be, as they say, relocated because there is not enough room where it is. All those extra people, as well as their salaries and accommodation, become a huge additional cost which in turn becomes a part of the cost of Peers’ expenses. The administration of Peers’ expenses has always been simple and it ought to be kept that way.
Then, as we have heard, the report says that, in time, those expenses should be taxable, and that in order to cover the tax, they will have to be increased. So the Government are going to provide more money for your Lordships’ expenses in order to enable them to pay it back again in tax. It seems a pretty crazy thing to do, but that is typical Civil Service accounting. Last week, the Prime Minister said that he was concerned that we should get value for money in everything. Whatever else this does or does not do, none of it provides value for money. It will just make a good and simple arrangement expensive and complicated.
The report goes on to say that if you rent a room in, say, your son’s flat, this should be discontinued because it does not seem to be correct. You will have to move out, go to an agent, find another flat and move in. Meanwhile, your son will have an empty room, so he will also have to go to an agent, find a new tenant, and have an unknown stranger move into his flat. What on earth is the purpose of this? It is totally bizarre.
Your Lordships are going to be allowed to go first class in a train provided that they work. If you want to read a thriller, you will have to go standard. But if you stuff a copy of the Sun in your pocket and go into first class, you can have the pleasure of looking at the Page 3 girl if your Lordships like to do that. You are allowed to go first class because you will be reading up about what is going on in the world, and therefore you are working. I cannot think what the Senior Salaries Review Body was thinking of when it concocted that idea. A first-class rail ticket should be automatic. It always has been, ever since rail fares were first allowed as expenses in the early 1950s. Why has it got to be changed now?
If a noble Lord lives in Scotland, it has always been the practice that you can travel with your wife in a first-class sleeper. Now, it will be all right for the Peer to go first class but, as my noble friend Lady Shephard observed so graphically, “the wife” has to go in the guard’s van with the baggage. That hardly seems to be a delicate way of running expenses in your Lordships’ House, and it is pretty insulting to the wives.
Recommendation 26 of the report proposes that the new quango, IPSA—it sounds like the People’s Dispensary for Sick Animals—should extend its activities from another place to your Lordships’ House. The noble Lord, Lord Tyler, wants that too, but then the Liberals always want something quite absurd and unsuitable. I hope that that will not happen. We must remain independent from another place and not become subject to this expensive and wholly inappropriate quango. Your Lordships’ House and another place are different. This House is simply run and is inexpensive—indeed, it is the least expensive second Chamber in the world. In all ways it has been good value for money. We must beware of the great temptation of being drawn into this spider’s web of bureaucracy on the apparent altar of transparency and openness and accountability, which have nothing to do with common sense or the duties of Parliament.
Your Lordships might recall that Archbishop Fisher once said:
“There is no unreasonable argument which cannot be proved reasonable by reason”.
Payments should be simple: so much for a day or a night. If you claim an overnight payment and decide to sleep on the Embankment, that is fine. It should not be the business of the powers that be to inquire about that. If people cheat or break the rules, that of course is a different matter, and they should be subject to the appropriate discipline. However, I find it unacceptable that your Lordships, many of whom are very distinguished, who have contributed in a variety of different ways to the life of the nation, some of whom—unlike me—may not be in the first flush of youth, and who come here to continue to give their best without payment, should be treated like fifth-form schoolboys over expenses. Most people are upright. Not everyone is a baddy, and it is offensive to see proposals put forward which insinuate that this is the case.
Mr Speaker said the other day that Members of Parliament have never worked so hard. That may be so, as far as their social worker duties are concerned. But they work only three days a week in another place: Monday, Tuesday and on Wednesday mornings a football shouting match at Prime Minister’s Questions, and then home. The real job of the House of Commons is to look at legislation to ensure that what gets on to the statute books is right and reasonable, and to keep a check on the Executive. But another place only looks at 10 per cent of each Bill which comes in front of it. The rest of the Bill passes to your Lordships' House from another place just as the parliamentary draftsman had drafted it. It is here, in the unpaid House, where the whole of every Bill is subject to scrutiny on which the country depends for the integrity of its legislation. If it were not for this House, much more bad legislation would appear on the statute book than is the case now. I therefore find it extraordinary that the Senior Salaries Review Body can produce such a nit-picking report.
As if that is not bad enough, we are asked to approve the architecture—that famous word—of the report. What on earth does that mean? I agree with my noble friend Lord Strathclyde that architecture normally refers to houses. You might just as well ask your Lordships to approve the “general drift” or the “building blocks” of the report. I remember an amendment tabled to a Bill once that referred to putting in the building blocks of a report, but you cannot use that kind of language when dealing with Parliament. In this case, architecture is a dilettante word which does not fall easily from the lips of the noble Lord the Chairman of Committees. Your Lordships are normally asked to “take note” of or “approve” a report, not to approve its architecture. I do not know what it means—except that it insinuates something fishy—and, like the noble Lord, Lord Barnett, I do not propose to vote for something which I do not understand.
My Lords, it is this side’s turn now.
I agree with the basic sentiments put forward by my noble friend Lord McNally, reinforced by the extremely wise words of the noble and learned Lord, Lord Howe—that we are being asked to endorse a practical way forward, which may result in a sensible outcome that takes account of the clear views expressed around the House today.
The noble Baroness, Lady Shephard, who is not in her seat at the moment, talked about self-regulation. This is the biggest test that self-regulation in this House has yet had. If we can deal with the matter sensibly and properly under self-regulation, it will prove self-regulation. If we cannot, it will be the beginning of a long, slippery slope. One thing on which this House prides itself is its ability to scrutinise legislation and challenge the Government on what they do. Why should this be any different? Are we not capable of setting up a system that will effectively scrutinise the report? A slight side issue is that some of us are concerned that, by intervening as they have done, the Government are putting themselves in an awkward position. They may be being seen to fetter the ability of the House in its scrutiny function by putting forward clear recommendations that would involve a reduction in the resources put towards scrutiny. That may be the right thing to do in this case, but it is for us to make that decision.
We have been asked to endorse the “architecture and principles”. Like everybody else who has spoken, I do not understand what “architecture” means. I suspect that it is a weasel word. Perhaps it is the right time for a weasel word, to allow a process to go forward that will result in rather more sense than is in parts of the report. However, I understand “principles”. Paragraph 2.19 of the report sets out five clear principles, three of which the report itself then breaches. The first is,
“to ensure that no Member of the House is prevented from attending and playing a full part in the activities of the House because of lack of financial resources”.
I do not believe that what is being put forward will prevent most people in this House taking a full part, but it will affect some, particularly younger Peers—those with families—for whom being a Member of this House is their chosen career path. They will find it difficult to survive as full-time Peers under the new system.
The third principle is,
“to maintain the geographical diversity of the House by ensuring that Members from throughout the United Kingdom can afford to attend”.
Like many other Peers, I come rather a long way; I live four and a half hours from this House, door to door. To come here effectively takes up a full working day in the week. I do not complain about it; I knew what I was taking on. It is right that people from all parts of the country should be able to take part. I am not complaining personally; I have spent my life working for toffee and doing things that I wanted to do, and will continue doing that. If there were no allowances at all, I would hitch a lift down on a lorry, and bring my tent and pitch it on College Green. If the BBC booted me off, I would probably go and camp next to Mr Brian Haw. I would come anyway, but that is not the case for a lot of people who come from distant parts. At the moment the House is not sufficiently diverse, geographically. Let us look at the north of England. It is a relatively small number of us for whom what we do here relies on our experience of being in the north, but we come here to try to represent its broad interests. The proposals clearly discriminate against people from distant parts.
The fifth principle is,
“to minimise the scope for abuse of allowances and for manipulation, by drawing up unambiguous rules for expenses claims”.
Several speakers have mentioned that the rules put forward are far from clear; they are extremely complex.
When we talk about the diversity of the House, we often talk about our origins. We talk about the fact that we have hereditaries still; that many peerages are given as honours or rewards for work done during a lifetime; that many are bestowed as a matter of distinction, and we benefit as a House by having people here who are extremely distinguished in many fields in this country; and that we have former MPs, some of whom clearly come here seeing it as a nice, cosy retirement and some of whom see it as a new job. However they have come here, Peers get older. At the moment we are here for life, and people become less active. Then there are the people under the strange designation of “working Peers”, which includes all those other categories but with some of us specifically appointed on political lists as working Peers, which is what we try to be. Without the working Peers appointed on various political lists and as Ministers, the House would find it difficult to keep going.
All those types of people contribute to the House, but none of the distinctions is particularly relevant to expenses. What matters in relation to expenses are people’s life circumstances—where they live, how old they are, what other personal resources such as pensions they have, and what sort of families they have. I agree with the point made that you cannot say, “If you pay those allowances, it is unfair because some people come in for just half an hour every day, get a tick and then go back to their home in London”. It is too bad if that is what they do; the important thing is that the allowances allow the people who need them to come here and contribute. I fear that there is a real danger that the proposals, as they are at the moment, will result in a less diverse House.
The noble Lord, Lord Peston, who is not in his place at the moment, talked about the quality of the report; I agreed entirely. If it had come to me as a local councillor on Pendle Borough Council, I would have been rude about it. I would have said that it was a pretty shoddy affair and sent it back to be reworked. I am advised that calling a report shoddy is probably not the right thing to do in your Lordships' House, so I shall say that I find it disappointing. A number of speakers have said that the report does not seem to be based on a clear and full understanding of the present position in the House—who the people are here and what we individually do. One thing that screams out to me from it is a series of assertions. The report says “We believe” in a number of places, which should be reserved for religions and not for reports of this nature.
There is no financial appraisal in the report of how much this will cost, how much it will save or whether, as the report suggests, the cost will be broadly neutral. It states that it believes it will be broadly neutral but there is no evidence to point that out. It is clear from what Members around the House have been saying over the past week or two that a majority—possibly a large majority—will be paid less under the new system. That leads me to believe that the amount of money paid out in aggregate will be less. Neither I nor anyone else can prove that from what is in the report because the evidence is not there; the research necessary to find out has not been done. In these straitened financial times, this may be a contribution that the House wishes to make. However, if that is the case, we should take the decision overtly and clearly and we should not have it foisted on us in the form in which it is for other reasons.
There is no financial appraisal of the increased costs of administration of the proposed new system. As I said, if this report came to my local authority we would not consider making a decision on it unless we had that financial information—indeed, any other self-respecting local authority would do the same—and I do not see why this House should do so. I hope the ad hoc committee will find it possible to look into this issue because if, as has been said, we do not want to increase the amount of money that we are being paid—and I agree with that—that is a fair argument to make; however, that is different from then saying, “Therefore you have got to have a big reduction”. This issue needs to be faced up to in a reasonable way.
I am sorry, I have not finished yet. I beg your pardon. I was pausing to consider the one other thing I wish to say.
My final point relates to the proposals for renting accommodation. There is a general feeling that people will be forced out of owner occupation or that if they have unoccupied properties in London they will be unable to claim for them in the future. However, the proposal for renting is, frankly, crackers. It will become almost impossible to rent accommodation in London without personally subsidising the system because unless you have a 100 per cent attendance you will not be able to claim 100 per cent of the cost of renting your accommodation. For example, if you are renting accommodation for £15,000 a year—which is not a huge amount in London—and you come to two-thirds of the sittings of the House, you will get only £10,000 back. You will therefore have to subsidise that extra £5,000 either out of the remainder of your allowances or out of your personal funds.
It is not possible to rent proper accommodation by the day—well, it is possible, but it is not the kind of accommodation I would expect your Lordships to stay in—and if this proposal were to be carried out, the perverse consequence would be to force people into hotels. As a previous speaker—I think it was the right reverend Prelate the Bishop of Chester—said, it is all very well staying in hotels, but if you are to do a proper job here, you need a base while you are in London. That is a fundamental flaw, and regardless of whether it is a part of the architecture, it needs ripping off, recasting and putting back in a sensible way that allows people to recover the genuine and proper costs of living in London.
My Lords, I intended to say only a few words as I am a member of the House Committee. In view of the remarks of the noble Lord, Lord Barnett, I shall say even fewer than I had intended.
I and everyone else must, at the end of the debate, recognise that there are all kinds of objections to the detail of this report, both in principle and in substance. I am sure that the suggestion that the House Committee should set up an ad hoc committee to look into those objections and to approach them in as flexible a way as possible is the best way for the House to proceed from here. I wish that ad hoc committee all the luck in the world. However, the House has to recognise that it will not be possible to reconcile everything that has been said in this debate—some are mutually contradictory—but, nevertheless, it will be possible for the committee to do some things and I hope it will do its best to do them.
I wish to make two short points. First, it gives me a modest amount of satisfaction that this is the first official report that I can recall that has taken up one of the recommendations of the Royal Commission on the Reform of the House of Lords, which I had the honour to chair some years ago. We made it abundantly clear that, in our view, it was not right and proper to expect people to give up their time in this House without recompense for their services. I am dealing not with quantum here but with principle.
Secondly, remarks have been made about parliamentary expenses being taxable. I had something to do with making them tax free many years ago and the House should know why we did it. The wealthy Members in the other place were, year in and year out, claiming a loss on their parliamentary expenses and demonstrated that they spent considerably more than their parliamentary expenses; as a result, they were able to claim back tax on their other income. Those who were less wealthy ran the risk of the inspector of taxes saying, “You only had egg and chips in the canteen and we think that you did not spend all your expenses”. In my judgment, the Inland Revenue would run a mile if it were asked to tax the expenses here because that would represent a redistribution from the less well-off Members of the House to the better-off Members, who would be able to claim a loss because their substantial London residences did not cover the costs of the expenses.
I wish the committee well in its work. It is the right way to proceed and I shall not say any more.
Very often at this stage of a debate someone will rise and say that everything that could be said has been said, and a voice pipes up, “But not by everyone”.
I have one or two points to make. First, this is not a dilemma but a situation has been created—not of the House of Lords making—and the words that come to mind are, “We are where we are. We cannot undo that which has been done. We have to move forward”. I pay tribute to the Leader of the House and the leaders of the other parties who have put their money where their mouth is in making progress, although it has not been easy and it is not universally accepted.
The noble Lord, Lord Strathclyde, categorised the report of the SSRB as “mean”. In my view, it is mean in the sense that it fails to grasp completely the nature of this House in comparison with the other House. If there are 700 Members of this place, there will be 400 or 500 different circumstances in, first, the way in which they arrived here and, secondly, the way in which they survive here. The SSRB has not acted fairly to Members of this House.
When I was closer to the action than I am now, I chaired an all-party committee in the late 1990s and early 2000s. We produced a report which broke the deadlock as far as satisfaction was concerned. There were always complaints about allowances. I discovered that the RAC produced every year a league table of the cost of bed and breakfast in London hotels. It categorised the hotels by stars, from one to five, and gave a figure which was way in excess of what we were able to claim then. I remember saying to my colleagues on that committee, “I think we ought to say to the SSRB that we would like you to consider adopting the rate which is in the report for three-star hotels”. There were Members who said, “Well, just a minute, we’re not a three-star House; we’re a five-star House. We’re not in the middle; we ought to be treated with respect”. I used to come to this House and the other place—I have been attending the two Houses now for more than 35 years—with a spring in my step. Like everybody else in this House, I am a politician. Whatever else you might say you do outside, and however much you say you are not a party man, we are all politicians. Unless we are very careful and can readjust the atmosphere—which is not impossible—we shall find that coming here is a sadder experience.
Thirty-five years ago, I did the noble Lord, Lord Wakeham, whom we all respect, a great favour by agreeing to be his pair, and he agreed to be mine. When I went into government two years later, I did him the even greater favour of passing on to him a young lady called Barbara Castle, and she became his pair. Even since, the noble Lord, Lord Wakeham, and I have seen eye to eye on many things. I remember saying that the Wakeham report favoured a different House by suggesting an element of election. The other great thing that the noble Lord said was that there should be some basis on which a salary or income could be earned. It did not have to be as much as that in the Commons; it could have been 75 per cent of it, for example. That was 10 years ago. The sad fact is that if the House had been wiser, we would have made good progress.
The Leader has gone out of her way to spell out the clear position. Although she has given her views, and those of the Government and other party leaders, what happens to the detail of the report is up to us, because the working party to be established will invite opinions. I hope that colleagues will put their money where their mouth is and give opinions for change. There will be all sorts of reasons why they cannot be accepted, but we ought to stand up for ourselves. It is not a question of being hit over the head, ambushed or sandbagged; we are in control of ourselves. When the House Committee gets those reports, I hope that it will have the courage to recognise that some of them are worthy not just of consideration but action. When the House Committee makes its report to this House with recommendations, I hope that we shall not run away on the grounds that the public will not understand it. If there are genuine reasons why the recommendations of the SSRB are in our hands, we should have the guts to stand up and make the change. If we have sense and sensibility on our side, the public will understand the reasons for the changes, which will have to be powerful. There is nothing we can do tonight. We have to accept the report, otherwise the public would say at the first opportunity that the House of Lords was nit-picking and doodling. If amendments to the Motion had been possible tonight and votes had followed, I shudder to think of the terrible night that we would have had. We have now escaped that. We should accept the report and take advantage of the opportunities it presents, because they may not come again.
My Lords, I apologise to the noble Lord, Lord Greaves, for interrupting him just now. I am afraid that it is one of the hazards of the dramatic pause or pausing for effect. I usually find that it does not pay to pause for a moment in this place. I had thought that the best way to get in was to interrupt someone who was speaking before you, but it has not worked out quite like that this evening.
I sense that we are getting down to the last knockings of this debate, so, without wishing in any way to minimise what others have had to say about the potentially far reaching implications of the SSRB report for the dynamics of this House, I shall be brief and concentrate on just one or two matters of fine-tuning.
Before I do that, however, I should like to say that the Leader is in a difficult position this evening. She cannot vary the Motion that is before us at this stage. I suppose that she could decide not to put it when we come to the end of the debate, but, at all events, I hope that she may feel that it would be appropriate for the ad hoc group which is to be set up to take an expansive view of what is not “architecture and principles”. If she could make some acknowledgement of that when winding up, she would in that way faithfully reflect the sense of the House as expressed in the debate.
I agree with the noble Lord, Lord Nickson, and others that we are on a hiding to nothing with this report. I am not absolutely sure that we are damned if we do, but I am certain that we are damned if we don’t. We therefore have to go along with the broad thrust of what the report proposes or, as the House Committee has said, the architecture and principles. I take as my starting point that the daily fee for attendance is hardly princely by the standards of quangoland, but provides a more appropriate and defensible basis for reimbursing Members of this House. At the same time, I recognise that the principles may bear much more harshly on Members who attend from outside London, with potentially undesirable consequences. It may have the effect of making the House much more London-centric, for example. I agree that the recommendations on standard and economy-class travel for families are mean-spirited.
The incorporation of the office costs allowance into the daily fee seems to make sense, but there are two specific points that I want to make about it. First, I support what others have said about the need to make some provision for non-sitting days. Many Members need to maintain arrangements for secretarial, research and other support throughout the year. There is some recognition of this in the present system, which permits claims in respect of office costs for up to 40 days a year. It would be appropriate for some provision along these lines to be retained. It could be set at half the daily fee if that was thought more appropriate.
Secondly, paragraph 3.11 of the SSRB report sets out the provision made by the House in respect of IT facilities, the costs of broadband installation, line rental and calls up to £10 a month, and for postage. The next paragraph simply refers to rolling the office costs allowance in with the daily fee but says nothing about maintaining the provision detailed in the previous paragraph. I hope it can be taken as read that we can continue to rely on this provision. It may seem petty to pick up the report on such points of detail, but we seem to live in an age when precision about such matters of detail and wording is required.
Finally, on what may seem another nit-picking point, paragraph 5.17 of the report states that Members of the House who are disabled may currently recover the additional expenses that they incur in attending the House. I hope that the further work that is to be done on fleshing out the detail and implications of the report will confirm the present system whereby disabled Peers may recover the extra expenses that they incur, not only in attending the House but in doing the work that they were sent here to do.
The point has also been made to me that disabled Members coming from outside London may have additional expenses in connection with their London accommodation, such as a more expensive hotel. If we are really going to implement this invidious distinction between first and standard or economy class travel, which I very much hope we are not, it should be understood that disabled Peers may very well need an assistant with them in the business class cabin to help them to do their work. All these points need to be recognised.
My Lords, I hope that the House will forgive me for making a brief intervention.
I do not share all the outright criticisms that some colleagues have made of the SSRB report. I began my submission to the SSRB by saying:
“The present system of financial assistance to members of the House of Lords is in my view seriously out of date”.
I gave a number of the reasons, and concluded:
“It is no longer fit for purpose”.
My starting point was that in today’s world—and I stress, in today’s world—we could not continue with the system as it is now, particularly in relation to being recompensed for expenditure without having to prove that the expenditure has been incurred. That is, in fact, the basis of the expenditure system.
My noble friend Lord Crickhowell was very kind in relation to a speech I made about the House of Commons a couple of weeks ago in this Chamber, in defence of Members of Parliament. One point that I made was that the rot set in there when, in 2003, the House of Commons increased the SSRB recommendations for allowances by 40 per cent because the salary was simply inadequate. That is how the current crisis has been caused. I do not want us to be in the same position. So I support some of the key recommendations of the SSRB—the “framework”, as my noble friend Lady Shephard called it, which I much prefer to the word “architecture”.
Later I shall say something strongly in support of my noble friend Lord Crickhowell, but I do not share the criticism that the SSRB wholly followed the Kelly report. I have some very serious criticism of that report, in that it did not understand the role and responsibilities of Members of the other place; but this SSRB report acknowledges in chapter 2 the role and realities of today’s House of Lords, as the noble Baroness, Lady D’Souza, acknowledged. Above all, it recognises that we are not salaried and that the great strength of this House lies in the experience, expertise and diversity that it offers. The report makes a reasonable attempt at recognising those points in its recommendations, given especially—and this is the crucial point—the expenditure constraint that the SSRB had to operate under. That was not recommended by the House Committee but was added by the Prime Minister. From chapter 8, you can see why it was that some of the recommendations came out as they did, having been compelled to follow that request by the Prime Minister.
One particularly important point, which is a key point of the framework, is the proposal for a daily fee. I have to say that I recommended this. Chapter 3 refers to the fact that around half of all the Members who responded to the consultation favoured the payment of a fee or allowance for each day of attendance. That is important, because it would overcome the biggest problem that we have with the present system. Like my noble friend Lord Strathclyde, who also recommended the daily fee, I did not suggest the same two ingredients as the SSRB put forward, but I am prepared to accept them. The importance of this is that it overcomes the kind of issue that I warned would be a criticism. Annex 7 of the report shows that the daily fee recommended is way at the bottom and much the cheapest of the daily fees for any other public body for which daily fees are paid for the contribution given.
I do not think that that is the relevant point. It is the relevant fee per day that is paid; that is what annex 7 is about. I am comparing the £200 that the SSRB recommends with the other fees, which are substantially higher in many cases than the £200 per day. It deserves to be said very clearly to the public that a fee of that level has a very large element of public service and duty in it, because, as has rightly been said, many Members of this House could be paid £200 per hour for the work that they do, not per day. That is an important point. Whether it is the architecture, the principles or the framework, I believe that that recommendation should be accepted, which is why I would accept the Government’s recommendation this evening.
The analogy that I would give is the way in which we approach the code of conduct, and the Eames report, of which I was a member. The code of conduct was accepted in our debate, but the guidance on the code was referred to a working party. That is absolutely right; as the noble Lord, Lord Brabazon of Tara, said, in both the SSRB and the Eames report we had only a short time available to look at the detail and not enough time to look at the unintended consequences. With some of the detail put forward in the Eames report, they were just four people’s views and we did not even agree among us exactly what they should all be. Therefore, the process should be subjected to much wider and longer consideration. Exactly the same principle should take place this evening; some of the details should be referred to the working group, as is proposed.
I share the concern expressed by many noble Lords on the details. On travel, it is clearly absurd to prevent the attendance of those who have to travel a long distance. On the point about taxable elements of home to work, it should be recognised that those coming here are not paid a salary at all and so have to have reasonable and full expenses for their travel. That area has to be looked at closely. I also share strongly the views expressed by my noble friend Lord Crickhowell about some of the details of the overnight allowance. I shall not repeat them, but that is the area that most of all has to be looked at. I understand entirely the point that the noble Lord, Lord Peston, made about the absurd position on capital gains tax. This amounted to only three words in the whole report, as I see it; I do not know why it was thrown in as it was. No justification was given for it, or any explanation. However, that does need to be looked at, because it would be a bizarre situation if, on capital gains tax, the rule applying to Peers was different from the rule covering every other taxpayer in the country. I do not see how that can be justified.
I wanted to be very brief. I conclude on this point. I agree absolutely with my noble and long-standing friend Lord Ferrers about recommendation 26 on IPSA, which I hope that we will reject absolutely. However, overall I support the approach of the three party leaders in suggesting that we accept the framework, which includes the daily fee. There are, as has been clearly expressed today, a lot of details that I do not think that the SSRB has got right and which the working party should put forward for this House to decide.
My Lords, I had intended to give a speech today that started at the level of principle and worked its way down to detail, covering all the various recommendations. I do not think your Lordships would appreciate that type of speech at this stage, so instead I am going to make a number of basically incoherent and unlinked observations.
Throughout the debate, emphasis has been put on the distinctive nature of your Lordships’ House. That is right, but its key distinctive characteristic is that it must be the only legislative assembly where a requirement for participation is that you have a non-parliamentary income. That is at the heart of the problem, and the Senior Salaries Review Body and other, earlier schemes have tried to get around that difficulty without being explicit that it is the nub of the problem.
While I have been sitting here, it has struck me that although we are going to be paid the fee for attendance here in the Chamber, it is likely that for most people the bulk of the work on today’s debate has taken place over the weekend. That difficulty has not been recognised.
The issue of principle that I want to stress is my commitment to your Lordships’ House being representative. That will eventually determine which way I vote at a later stage in the proceedings when we get the implementation resolutions. The whole argument for reform of your Lordships’ House that we had when the noble Baroness, Lady Jay, was Leader of the House was to create a more representative House. It would be a tragedy if we now introduced measures that moved us backwards and away from that.
The representative test can be summed up in two ways: one, that the House’s composition should not be dependent on what I call the “three Rs”—the rich, the retired on good pensions and those resident in London who can continue with an additional job—and, two, to recognise that the House pretty effectively represents the peoples, the regions and the nations of the United Kingdom, and that nothing at all should dilute that.
One of the tragedies of the review is that it is a missed opportunity. The real challenge of a review like this would have been to create a scheme that enabled, say, a relatively successful person in their mid-50s living some distance from London to be a participant in your Lordships’ House. I do not think that this scheme will deliver that.
I agree with those who have focused on accommodation and the overnight issue as needing the greatest attention. More work needs to be done on people who are owners, with or without mortgages. When it comes to renters, of which I am one, I agree entirely with what the noble Lord, Lord Greaves, had to say—I think it is the first time I have agreed with anything he has said—because, as he pointed out, the model that has been produced makes it inevitable that the Peer subsidises Parliament. Very few people get 100 per cent attendance, and once you move away from that you get this perverse subsidisation. That must surely be wrong.
I suggest that the ad hoc committee looks at the idea of thresholds. For example, if a Peer had a 60 per cent attendance rate, it would be clear that their rented property was being rented for the obvious purpose of sustaining the Peer’s attendance in your Lordships’ House and, therefore, 60 per cent ought to translate into 100 per cent support for the costs of the accommodation.
The non-sitting day allowance has been withdrawn. There is no evidence or argument to support that decision; I do not understand it. There is a strong case to have some form of limited, continuing support for the Peer’s activity during the period of recess. That should be looked at.
On travel, it has virtually all been said. I shall not bore your Lordships with my prospective story about what would happen on Aberdeen railway station as my wife went into standard class and I went into first class, mainly because delicacy prevents me from going into what I know would be her response. When it comes to air travel, though, the reason why we do not use economy tickets is not some great love for luxury—to tell you the truth, there is no difference between economy and non-economy on BA flights in the United Kingdom—but flexibility. If you change the flexible ticket, you incur additional costs; is the House up to recognising that? We cannot predict with total accuracy when we are going to require to go home. It is also about ensuring that we get a degree of priority when things go wrong. Things went wrong on Friday, for example: there were a lot of cancellations from Heathrow and the only way I managed to get home on the day and not on Saturday afternoon was that I had a full-fare ticket and got priority on one of the two other flights. That is a reasonable safeguard that Peers should have.
To go back to my original speech, my real concern is that if the report is implemented in a way that some of the detail can be read as it currently stands in the report, there will be those in your Lordships’ House who will quite rightly feel that not only have they been treated unfairly but they have also been demeaned, to the extent that they will redefine their relationship with the House. That would change the nature of the House itself. Frequent attenders might become infrequent attenders. At the limit, attendance would become more a matter of personal interest and convenience than a duty. That would be bad in itself, but it would be worse if the House became less representative of the peoples, the regions and the nations of the United Kingdom. From where I stand, that is particularly worrying at a time when the bonds that keep us together are being challenged.
My Lords, I stand with some hesitation at this stage in the evening, when it is late and because I am a new girl in this House—or, I should say, a new pensioner. That gives me a fresh look at some of these issues, so perhaps I might get back from the detail and talk generally. Unfortunately, it is the case that this House appears to many citizens of this country to be comprised of elderly people who enjoy being photographed in fancy dress. Despite the excellent work done by the Lord Speaker and others, I believe that there is little appreciation of the meticulous work done here in scrutinising legislation, nor of the impressive work of committees. Debates are sometimes noticed, usually in comparison to those of another place. Even I, 30 years a public servant—who lived in this Palace in the days when the Lord Chancellor’s residence was painted in Ministry of Works magnolia, not as it currently is—did not understand the vital work done here.
Therefore, when there are allegations that Peers have abused their trust—the noble Lord, Lord Barnett, referred to 29, not a trivial number—and when it is known that the police have referred cases to the Crown Prosecution Service, this House is cut little slack by public opinion. I am not surprised by what has happened, which led to the remit of the SSRB. When I joined your Lordships’ House, I studied the guidance on what are variously called expenses, allowances and financial support for Peers. Those are different terms; to my mind, they mean different things. I found the terminology confusing, the definitions vague and the rules fuzzy. I was surprised that expenses could be paid without receipts; any public organisation with such practices in its handling of taxpayers’ money would be pilloried by the National Audit Office, not to mention the Public Accounts Committee in another place. Yet I came to understand that expenses had somehow mutated into allowances in acknowledgement of the substantial commitment made by Members of this House.
I was very pleased to hear the speech of the noble Lord, Lord MacGregor, because I thought that I was in a minority of one in thinking that the SSRB had not done a bad job, given its very tricky remit. I felt and feel that these arrangements have to change. I do not find its tone insulting; I do not regard myself as being entitled to use public money unless it is clear, accountable and verifiable. I know that there are concerns about the detail, and I have listened with interest to what Peers have said about that. Yet I still believe that the principles of the report are good, and I hope that the ad hoc committee can sort out some of the details, because I believe the allegations about the abuse of taxpayers’ money have eroded trust, not only in the Commons but here and in Parliament as a whole.
If we are to begin to regain that, we have little option but to accept the recommendations in broad terms, and on that I agree with my noble friend Lord Nickson. Precisely because we have no constituents, we have to be sensitive to public opinion. I am not arguing that we should be led by it—at this point, I look to the noble Lord, Lord Graham—but precisely because, for the moment at least, we cannot be kicked out of this House we must be sure that our rules on expenses and allowances are quite clear and fair, that they follow the principles of the diversity of this House, and that they are properly auditable. That is a basis for re-establishing confidence in this House’s key contribution to the work of the UK Parliament, and I will support the Motion on that basis.
My Lords, I believe that this review needed doing. Unless there is some extreme provocation, I expect to be the last speaker from these Benches, which might give other people a bit of a hint. As I was leaving home this morning, I was thinking that I really would prefer Parliament to be in Greetland, or at least somewhere within reasonable distance of the south Pennines, but it is here and we have to accept that.
There are three elements to this report: living, London and travel. Reference has been made to architecture, which a lot of people have been talking up. As soon as I heard all of that talk, I thought that the answer was that the Wakeham six are the quantity surveyors. They are absolutely needed, and I hope to mention one or two items that the quantity surveyors might look at when considering some of the detail. Some of those items are mine, and some have come from other colleagues who are not speaking this evening. They will need the odd plumber and joiner as well, and I shall come to that in a moment.
In common with the leaders, I take the view that the architecture of the £200 daily figure to replace subsistence and office expenses is a good decision. I do not know whether the figure is right, but it has been put there and at this stage I am not going to gainsay it. Where London is concerned, we have been in the slipstream of the climate that has led many people to be concerned about capital gains and all that that means in terms of ownership. Although it is important to have proper transitional provisions for owners of property in London, I see the point that rental is perhaps the right way forward for having a place in London. I see that as part of the architecture; that is, rental for those who wish to stay in rented places. However, when the ad hoc committee looks at this, from the illustration that has been given in the report there are complex calculations to be made. I believe that it is possible to come up with something rather better.
The reference to 150 nights is not right, not in the past five years. Provided that we stay until Wednesday of this week, this year it will add up to 140. In any event, that 150 is not correct. I see the point of having a much lower figure if that were to be the principle; to maximise the rental of the property, a better figure would perhaps be in the order of 60 per cent to 80 per cent attendance. In the sense of sending for the joiners or the plumber, one thing which we should perhaps send for is medical assistance. What is the position on illness for a place with an average age of 69? How many days can we expect that Members will not be able to attend because of illness? Surely that ought to be taken into account.
Not everyone will wish to stay, of course, even in rented accommodation. Reference has been made to staying in hotels and clubs. One Member has asked me what the position is with subscriptions to those clubs, which I understand are not inconsiderable figures. Reference is made in the rental element to service charges, which have to be paid on flats. One would assume—but it is not stated in this report—that club subscriptions should similarly be taken into account. Likewise, those who travel by train, as I do, buy their ticket with the House credit card, and those who stay in hotels and clubs ought to be able to use that credit card for paying their club and hotel bills.
Moving on to travel, I am surprised that people have made reference to the report and whether it is a good piece of work. For example, on page 30 at paragraph 5.7, the report says that the board thinks that,
“expenses should be backed by receipts”,
“all claims for mileage should list the dates of journeys, the start and end point and the mileage”.
That is exactly what the present form asks us all to do. Now, people may not use the form; they may write a letter saying, “Will you please pay me so much money?”, but I would be surprised if that were the case. It almost indicates that that is the way that we go forward.
I travel by train, and I am aware of railway tickets. Perhaps we need another carpenter; perhaps in this case the noble Lord, Lord Adonis, could look at railway tickets. The whole business of first and second class depends on when you buy the ticket and what is cheap and what is expensive. There needs to be some definition of that. There was a time when those two terms—first class and second class—perhaps meant something, but now there are advance tickets, tickets that can be used after 9.30 and everything else. Perhaps some specialisation is required there.
My final point is another that has not been raised today. On page 36 there is a reference to Front-Bench opposition spokesmen. Certainly, representations were made to the SSRB about assistance for Front-Bench spokesmen and Cranborne money. The report refers to the possibility of creating a parallel but distinct system of providing money to the opposition parties for this purpose. There is no better time than now.
My Lords, I think it is the turn of the Conservatives. I supported the reference to the SSRB, but it was clear at the meeting that I attended that we were not going to get anything like a sensible report. Indeed, it is well below the standard that any of your Lordships should be expected to accept. One thing that has come out of today is frustration that we cannot get any answers to some of the questions that we wish to pose. That is no fault of the noble Baroness the Leader of the House or the Chairman of Committees. It is a fault of the system. We are, I sense, frustrated—I am, too—that the noble Baroness will not be able to answer some of the questions that many of us have posed.
The SSRB report is also a completely missed opportunity. Surely, here was a chance to look at what would be the right remuneration for the very work that the noble Lord, Lord Peston, mentioned in his speech. What is the right remuneration for a Member of Parliament or a Member of this House, given the workload? That opportunity was missed and, as a result, we will be forced to accept a system that will, in due course, cause us huge problems. The noble Baroness the Leader of the House said that this report would be a template for the future, but how can we accept a template that is so completely inaccurate and contradictory in many parts?
I take a very different view from my noble friend Lord MacGregor on Chapter 2, in which the SSRB addresses the role of the House. I find no reference to the House as a great debating chamber. I find no reference to the work of the EU sub-committees, which are so diligent and which no other country undertakes to the same extent as we do. In Annex 8 sitting times are given but there is not a word about committees sitting in the morning. In Chapter 3 there is no mention of the fact that if one goes to the EU or further afield—for instance, on sub-committee work—one cannot claim the day attendance allowance unless one manages to sit in the Chamber that day. The old adage that a little knowledge is dangerous has been proved right so far as the SSRB is concerned. Such basic omissions give us no confidence in the rest of the report.
The terms of reference in paragraph 1.2 include the need to look at schemes operated in comparable circumstances by other institutions. In Annex 5 there is a comparison with the size and cost of upper chambers in other countries. However, in paragraph 8.3 the report summarily dismisses this annex because,
“second chambers are all constituted differently, so we do not feel that there are direct parallels to be drawn at the level of costs”.
If that is so, why was the annex put in at all? Although we might be constituted differently, we do roughly the same job. There will be huge differences between the judiciary, the Armed Forces, senior civil servants and very senior managers in the NHS, but the SSRB seemed to cope with that.
It was my noble friend Lord Strathclyde who brought to our notice how wilfully misleading the statement in paragraph 2.23 is. I have contacted a number of the other second chambers mentioned, and the evidence directly from them shows not only—as many noble Lords have said—that we are the cheapest House, but that we are the most hard-working. Moreover, I was informed that members of the Austrian Federal Council are paid for travelling time. That would suit me; it takes me between eight and 18 hours to get here from home. I have to leave home on Sunday afternoon to guarantee being here by 3 pm, in time to take part in a debate such as this. I am glad to see my noble friend Lord Maclennan of Rogart here. He lives three miles up the road from me and faces exactly the same problem. I do not ask for that allowance, although it would be jolly nice, but I reiterate the point that we give our time and commitment to this House very cheaply.
Who does the SSRB compare us with? Annex 7 lists daily fees for part-time public sector posts. I try hard to be full-time here. I do not work two to three days a month, as a member of the Commission on Standards in Public Life does. The chairman of that body currently works two to three days a week for £700 a day, which is well in excess of what is recommended for us. I e-mailed the SSRB to ask for further details of its working hours and remuneration. It did not surprise me—and I am sure it will not surprise your Lordships—that I did not receive a reply. However, I received a very prompt one from the British Pharamacopoeia Commission, the members of which attend three meetings a year. I am usually here three or four nights a week when the House sits. We are also compared to a board adviser to a primary care trust. The reply I received from the trust that I contacted told me that it had no such board advisers and no scheme to define their remuneration package. It is a sloppy report which uses comparables that are clearly inappropriate, and I resent that.
Another difference between us and those with whom we are compared is that we are here for life. Many of us have made our accommodation arrangements on that basis. I do not think any other noble Lord has mentioned that. That is a very different view that you have to take. For those of us who live a very long way from London, there are two other points to consider. One is the need to keep clothes in London. Travelling with a suitcase would prevent me making some of my airline connections and it would take even longer—if not be impossible—to get home. That has certainly affected where I have to live in London. Secondly, if we are supposed to have another job outside the House, it is much harder for those of us who live far away. Either it will impinge on the work that we can do if we can find work outside the House, or it will impinge on the work that we want to do inside the House.
Does the SSRB believe that work connected with Parliament ceases the moment that we leave the House? The post and e-mails continue for us all and need to be dealt with. There is regularly homework to be done for future sittings or committees. I use some of the Recess time to keep myself updated on matters on which I speak in the House, such as the countryside. I am fully aware that it is not the same as being an MP, but it is necessary and it should be acknowledged, as the noble Lord, Lord Sewel, has just said. Why are we to be deprived of the 40 days’ allowance? No argument has been put forward to support that recommendation. We are entitled to know why this is to be so arbitrarily taken away from us.
The review body must have regard to the need to recruit, train and motivate suitably able and qualified people, but there is no mention of that in the report. I am now in the top 25 longest-serving Peers, yet I believe I am still in the lowest quartile age-wise. The average age of the House, as has been said, is 69. We have seen the Government appoint some excellent younger Peers but how long have they stayed when they discover that they can earn much more elsewhere? The noble Lord, Lord McNally, raised this in a wonderfully humorous manner in the recent adjournment debate on the gracious Speech, but it is a serious point. It is a concern for the future of the House that we cannot retain such people at this point in their careers. I do not expect that the influx of new Peers after the next general election will correct this. It is something that the SSRB has ignored to Parliament’s detriment.
Other Peers have commented on Recommendation 26, but I was not surprised to note in the report the amount of empire-building that the unaccountable SSRB is seeking. Recommendations 7 and 20 seek to give that quango an even greater role in controlling this House. The report also institutes a lot of new, petty bureaucratic regulations that I do not want to go into, as other noble Lords have done so.
Will the noble Baroness the Leader of the House or, indeed, the Lord Speaker convey to the SSRB the great unhappiness with the report that exists in the House? As has been said, it needs to be made aware that the report is not up to the quality of reports produced by committees of this House. It is not up to the quality of a report that should be submitted to Parliament, let alone agreed by us. If the report is accepted—I fear that it will be—Parliament will increasingly have to rely on the good will of all those who attend. Its provisions will make it very much harder for those of us who live further away. The Appointments Commission is not appointing Peers from regionally diverse backgrounds, as we had hoped. The evidence shows that most Peers are from the south. That will constitute the future composition of this House, which is quite a contrast from how it was 40 years ago when I first came here. This is a very sad day for Parliament.
My Lords, it is imperative that this House now accepts for the time being the SSRB report, with all its manifest flaws. The present situation cannot continue, and there is nothing else on the table for us to take at this stage. I very much hope that an ad hoc committee will have the flexibility to deal with the large number of very good points made in the House today. The reputation of this House is at stake. It is not a question of abuse of the House by the majority of Peers—a minority may be at fault, and certainly there are allegations in that regard—but of perception. I am speaking in the debate because I am increasingly concerned about the perception of members of the public who watch BBC Parliament, and who will watch this debate. It will also be viewed by the press. If we do not wholeheartedly accept the Motion before the House, we will get very adverse publicity. We absolutely have to swallow this bitter pill, but I hope that the working party will ameliorate many aspects of it. It will be necessary at some stage—but not now—to consider the £140 payment for those who take a room for the night in London.
The method of establishing the principal residence may not be best achieved by counting the number of nights you sleep there, because people take holidays and have other duties which may be London-based. I live in Devon but spend a lot of time in London and have other commitments, including with charities. All of us have children or grandchildren whom we want to see and will spend nights with them, not necessarily in one’s flat or rented accommodation in London. The measure is a rather rough, cumbersome way of working out what a principal residence is, but that is a matter for the working party. These further considerations must not stop us accepting the report today.
I am anxious to be extremely short, bearing in mind the time, but I wish to make one further point. I pay for a part-time secretary for 12 months. Perhaps at a later stage we should press for secretaries to be employed by the House of Lords rather than being employed ad hoc by Members. That would get rid of the problem of coming in and sitting on a Bench in this Chamber in order to pay for one’s secretary during the Summer Recess if one loses the 40 days.
My Lords, I do not wish to try the patience of the House. However, I welcome the proposal to put quarterly information about our expenses on the website. We can learn from our younger Parliaments in Scotland and Wales, which provide full information in quarterly reports on their websites. I do not know whether that is the case in Northern Ireland. I understand that that happened in Scotland only a few weeks ago, and that hardly any inquiries were made, or mischief entered into, by the media. Only last week, the 2008-09 information concerning the other place was issued, but there was misrepresentation by the media in spite of the facts being made available. I think that the quarterly system would be very welcome and very helpful to us all.
Some noble Lords have said that it might be a good idea for IPSA to examine this House. It should be remembered that the 646 Members in the other place can claim additional costs of approximately £24,000. They can claim £103 for secretarial costs, £14,000 for an office allowance and £25 per day for subsistence. That is a substantial amount compared with noble Lords’ allowances. Mention has been made today, and in an earlier debate, that IPSA will cost the House of Commons £8 million. However, we should remember that that £8 million relates only to the payment of MPs’ salaries and expenses. There will still be a Finance Department, or, as we older Members used to call it, a Fees Office, which will pay for the security staff, the cleaners, the Metropolitan Police, the badge messengers and all the other staff who look after the House. The £8 million accounts for only a small part of that administration; I do not know what the rest costs. To suggest that IPSA administers the expenses of this House is like taking a hammer to crack a walnut.
My Lords, much of what I propose to say has already been said; therefore, I shall be very brief. I regard it as an exceptional privilege to have been in this House for 20 years. As a rule, I speak only on medicine, science and education, with an occasional swipe at the dualling of the A1 in north Northumberland. However, one issue that has arisen today relates to the fact that the SSRB report—I believe that it is structurally and architecturally sensible in many regards—contains a substantial number of flaws. I hope very much that the working group will have every opportunity to iron out those flaws. The SSRB has taken little account of the fact that a large number of Members of this House undertake a huge range of activities outside the Chamber which are directly relevant to the work of this House, such as activities involved with charities—I undertake such activities as I am involved with more than 12 charities— and all-party groups.
We recently produced three major reports, rather like in the work of a Select Committee. I sat on Select Committees for some 15 years. Such activities are not fully recognised by the SSRB. They generate a huge volume of work and correspondence, which continue even during the Recess. During the Easter Recess this year, under the Lord Speaker’s outreach programme, I spoke to 350 lady members of the County Durham women’s institute. It must have been successful, because in August I was asked to repeat my speech to 200 ladies of the Northumberland women’s institute. These activities are not taken full account of in the SSRB report.
I employ a secretary who works for me throughout the year. The payments that will be made available for secretarial support will not cover the activity for the whole year. I do not have a flat in London, but I stay at the Athenaeum Club, the Oxford and Cambridge Club or the Royal Society of Medicine. I was told in this Chamber many years ago that one could take account of the subscriptions paid to those clubs when making one’s claim for overnight expenses. That is ignored by the SSRB.
Finally, perhaps I may add that the mere thought that my late wife would have been compelled to travel second class when I was travelling first class is so horrifying as not even to be contemplated—particularly given that we are to debate the Equality Bill in the House tomorrow. I end simply by offering the working group, when constituted, the best of good wishes for Christmas, coupled with the very best of wishes for a fruitful and productive new year.
My Lords, as we approach the end of this lengthy debate I should like to make a few points which derive from it, but which should be kept in mind as we approach the end.
The first is that, although it may behove us that we should not under any circumstances renege on an obligation to present this House’s responsible attitude to the public, the electorate and the world outside, equally we do not have a responsibility to wreck this House against the interest of the electorate and the nation—especially as we approach the juncture of Governments in an election year. That would be an act of total folly, and we must not do it. Why might we do it? I have not heard this mentioned in this debate, but by my calculation, the actual net cost in unclaimable money for every Peer in this House each year will be £16,600, compared with the figure which appears to be on the table. That is an excessive burden to be imposed upon an individual who, perhaps, does not have any other pensions to carry forward and who is then being asked to subsidise from what little they have the cost of government in this way. This requires explanation.
The report proposes that we should be paid £140 for 150 days’ attendance. This amounts to exactly £51,000. If you took the total currently available from our three expense allocations, the maximum you could earn would be £49,725. This means that, on the face of it, we are being offered a small improvement on what we have. That level would be fine—except for the fact that conditionality has been introduced, which cuts away a large part of the claimability that you can achieve within those figures. I have taken, as a median figure, 110 days as a reasonable average that we could each attain; 150 days is not feasible. You cannot attain a 100 per cent record. If you attain 110 days, your maximum payment under the new formula is £37,400. You would lose £13,600 of what appears to be available. In addition, you have lost £3,000 of the top-up on secretarial costs. Thereby, the aggregate cost of the two is £16,600, compared with what you could get at present. That checks back perfectly, because you could take the figure as being the total secretarial cost of £11,250 plus the £3,000, and, taking account of the difference between the £26,100 which was claimable on accommodation and the £21,000 now proposed, you arrive at the figure of £16,600.
I have a couple of questions. First, I cannot understand the logic of including in the £200 allowance compensation for secretarial costs. Is this not rewarding those who have been claiming secretarial costs without having a secretary, by letting them keep that money? I should have thought that the easy way would be to allow separate secretarial costs only if they could be proved on a receipt. They should not otherwise be allowed. That would cure the problem.
Secondly, I was interested in the words of the noble and learned Lord, Lord Lloyd, on income tax. He came very close to a fundamental truth, but did not go the whole way. The report is strange on this issue. One of the two paragraphs on income tax implies that tax would be applied only to the £200, but not to accommodation costs. Would that not create a new and horrendous tax conflict, in so far as accommodation costs are not tax-allowable for any normal business activity? Why should we suddenly create for ourselves tax-free accommodation? We would only put ourselves in greater odium with the public if we did that. That does not seem to stack up.
A comment in the report is hugely offensive. It states that we should have to show that we can be useful when we are here. The very function of this House is to be useful collectively. That is what we are here for. It is strange; how do we prove that we are useful? I sit on the Merits of Statutory Instruments Committee and calculate that I have attended 50 of its meetings over the past three years. I have been useful at the Merits Committee for precisely five minutes. Have I, therefore, been useless for the rest of that time? No; I would claim that I had been extremely useful, because, in that five minutes, one bit of expertise happened to be absolutely important. I sank the proposal for a Manchester casino. It was like being the pilot of the plane with one torpedo left that sank the Bismarck. As far as I was concerned, it was a triumph. However, frankly, I had to sit there for 50 meetings as the token oik among all those learned lawyers and Cabinet secretaries before I found my moment of value. That is what this House is about. We all bring some moment of expertise that is waiting to be made useful. Sooner or later, we are all useful, and that is why this place is unique.
We cannot just score points. What are we going to do? Like big boy scouts, do we have to do a good deed a day for ever more in this House to justify putting in an expense claim? There are strange things in this report, and I hope that the committee under my noble friend Lord Wakeham, or whoever chairs it, will take a broad view of the fact that we have to work on this to a point whereby the House survives the calamity which will otherwise unfold.
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 that 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 of 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 for 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.
My Lords, before the noble Baroness sits down, I would be grateful if she would be kind enough to get me out of a muddle, because I still do not understand it. She said at the beginning that we are not voting for the report, we are voting for the architecture of the report. Presumably the report contains its own architecture. If we vote only for the architecture, not for the report, what are we doing? We are dismissing various bits of the report. It seems to me rather like the decorations on a Christmas tree; we are flinging bits off that we do not want and putting others on.
No, my Lords, we are not dismissing elements of the report. We are saying that we adhere to the principles, we agree to the broad framework of the report—if the noble Earl prefers “framework” to “architecture”—and that we refer the details of the report to an ad hoc committee for the committee to consult on and consider and to look at the implementation of the detailed recommendations of the report. That is exactly what I am proposing today on behalf of the House Committee.
On Question, Motion agreed to.
House adjourned at 7.32 pm.