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House of Lords: Financial Support for Members

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, on how we should proceed at the end of this debate. 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 that the Chairman of Committees takes our view back to the House Committee and tells 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.