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House of Lords (Members’ Taxation Status) Bill [HL]

My Lords, it will not have escaped the House’s notice that this is the third House of Lords Bill from the Liberal Democrats in just three months—a ““here we go again”” moment, if there ever were one. I am beginning to wonder whether the Liberal Democrats have anything else to do other than dream up greater blueprints for your Lordships’ House. Perhaps it is more rewarding than deciding how you can break your promise to the electorate over a referendum without getting egg on your face. If I judge the mood of the House correctly in all the debates we have had on this great subject, it is that the House would like less legislation rather than agitating for more. We know that there is to be a major government White Paper before the summer. There is some impatience in the House, as demonstrated yesterday at Question Time, that papers prepared for the group have not been shared with the House—something to which I would not have objected. It is important that the White Paper be published as soon as it is ready so that the House can be brought into considerations about what is, after all, its own future. I hope that the Minister will forgive me for saying that I expect that there will be proposals relating to tax residence in that White Paper. We agree that there should be legislation in that area, but these matters would be better discussed in the context of government plans than of a Private Member’s Bill. A fully reformed directly elected senate is the way forward. But here we are—we have another Lib Dem Bill and we must look at it. Let me repeat at once that I have no particular difficulty with the principle of the Bill but, as has already been mentioned, there is another Bill on this subject already before Parliament—Mr Gordon Prentice’s Disqualification from Parliament (Taxation Status) Bill. Although the noble Lord, Lord Oakeshott, is always swift to jump on a bandwagon, it is not really convenient for Parliament to have two Bills dealing with the same subject, as we have also had lately from the Liberal Democrats, with the Bills of the noble Lords, Lord Avebury and Lord Steel, which also have their defects in drafting. The Prentice Bill has one incomparable advantage. It extends the same disqualification provision to the House of Commons. That surely is the right approach. I cannot for the life of me imagine why the noble Lord excludes MPs from his Bill, unless he is not so much interested in the principle as in making a political point. We all read the press. Why should the Bill not extend to the Scottish Parliament and the Welsh and Northern Ireland Assemblies? Those details can be examined in Committee. The noble Lord may have a very good reason for not doing so. I do not know, but we will find out. I suspect that we really know what this is about: he is having a bit of a go at a couple of noble Lords on our Benches. Doubtless he has a couple of noble Lords on the government Benches in mind as well. I do not want to go far into personalities. My noble friend Lord Ashcroft can well take care of himself. Every political donation he has made has been found to be in accordance with the law. That is not something you can say about the Liberal Democrats. My noble friend Lord Laidlaw has rightly and honourably taken Leave of Absence from this House while his tax affairs are clarified—exactly what this Bill asks for. There is a good old rule of courtesy here that one does not refer to a fellow Peer who cannot reply. The noble Lord, Lord Oakeshott, seems to have a detailed knowledge of the tax affairs of my noble friend Lord Laidlaw. I hope the noble Lord will confirm that he simply plucked them from the air this morning. I have listened with some amusement here and outside the Chamber to the indignation of the noble Lord, Lord Oakeshott, about foreigners and tax exiles playing a part in our national affairs. After all, he lists among his top recreations in Dods supporting Arsenal Football Club. There is nothing wrong with that, but you do not find too many Englishmen there. I do not think that Monsieur Wenger was born in the Holloway Road, and I wonder what the taxation arrangements of some of those celebrity players are. Are they all 100 per cent taxed onshore at the highest UK marginal rate? I am sure the noble Lord will assure us that they are. Of course, the noble Lord has a serious point when it comes to legislating, but he can overegg it a bit. I have listened to what he has said in the past: "““Foreign millionaires should not be waved through immigration controls just by flashing their bank statements””." Who was the target there? It was Roman Abramovich. I bet that pleased them up at the Emirates. He has also referred to, "““creeping corruption, alongside the shameless sleaze of cash for Labour peerages. New Labour trumpets the need for transparency and diversity. It doesn't work that way when they hand out jobs to their own Peers””." Who was the poor target there? It was none other than the noble Baroness, Lady Dean of Thornton-le-Fylde. The noble Lord would sometimes do well to get a sense of proportion before hyperbole runs away with him. That said, I have made my position clear. If you are a UK legislator, you should pay UK tax. The broad principles must be right. However, the noble Lord, Lord Oakeshott, appears to argue you should pay only UK tax rates, which gives rise to other questions to which I shall return in a moment. No doubt he will clarify that later on or in Committee. There are many issues that we will need to look at before the Bill is passed into law. I for one would not go along with the draconian lifetime exclusion that he proposes. What sort of natural justice is that? Is it a new Liberal Democrat doctrine that once guilty, your guilt can never be forgiven or absolved? What would happen if a distinguished businessman who was a Member of this House, someone like the late Lord Trotman or the noble Lord, Lord Browne of Madingley, were offered a contract for a period overseas? Should they be forbidden from ever again sitting in your Lordships’ House if they paid tax abroad? Is it a sense that no one who has ever benefited from non-UK tax rates should ever be allowed to sit here? That seems to be the purport of the Bill. What about all those who have worked for United Nations organisations or the EU and who have paid tax or had an adjustment that is not at the full UK rate? I believe that Mr Clegg, the Liberal Democrat leader, used to be an EU employee and indeed an MEP. Did he ever receive pay at less than the UK marginal tax rate? What would happen if a Member of your Lordships’ House was sent abroad for some years to serve as a UN high representative or to work in the EU? Could he accept such a job only at the full UK marginal rate? What if a Prime Minister wanted to make a Minister of someone who has served in the United Nations or the EU, or for a great institution or a global business based overseas? Could he become a Member of your Lordships’ House before giving a full statement of his tax affairs? I do not know. Indeed, you can argue it both ways, but these are clearly tax-related details that will need to be discussed and probed in Committee. In his opening speech, the noble Lord rightly already conceded the point about some Members of the House working overseas, but what a pity that he did not think of it before he came in this morning. I do not agree with the noble Lord, Lord Pearson of Rannoch, who has argued that those who have benefited, and still benefit, or are under obligations to international organisations—I think we all know whom he is talking about—should not speak on matters related to their former employees. However, some clearly see this as an abuse and will no doubt raise the matter in Committee. There is also the question of the handling of unacceptable overseas donations. Take the case of 5th Avenue Partners, whose offshore donation to the Liberal Democrats was the largest ever refused by the Electoral Commission. The noble Lord, Lord Oakeshott, has long been a Liberal Democrat Treasury spokesman. Did he not sniff at that offshore money? Did he not demand inquiries in numerous press releases that the money should be returned? And if not, why not? Also, should those involved in procuring such a donation to a UK political party be able to legislate in our Parliament? Once you start down this road, there are all too difficult issues and many stones to overturn, so we on this side of the House will give positive consideration to legislation that may be proposed by the Government on this subject. We will look at improving the Prentice Bill if it reaches your Lordships’ House, but we will not play bit parts in a Bill designed as a prop for press releases by the noble Lord, who has already filled pages on Google before even explaining his Bill to your Lordships at Second Reading. There is much in the kernel of the Bill that I suspect we could all agree on, but it needs to be carefully worked out and, I submit, agreed cross-party before we put the matter into law. It may be that the alleged abuses are felt to be so great that this cannot wait for government legislation, but I cannot help feeling that this flawed Bill is not the right way to go about it.