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There is, of course, another aspect. If a noble Lord is employed by an international organisation, then however honest and conscientious they may be, there must inevitably be a degree of responsibility to his or her paymaster. While I have the utmost faith in the ability of Members of this House to behave completely honourably, I am not certain that there should be a special position in Parliament as is proposed. This leads one to ask, as my noble friend Lord Selsdon
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Lord Desai: I want to ask the noble Lords, Lord Goodhart and Lord Howard, a very simple question about these amendments. As far as I understand these matters of taxation, which is not very much, would what the noble Lord, Lord Goodhart, wants to achieve be met by the Member concerned having a temporary leave of absence while he is employed in such positions? If that were allowed, we would not need to make any further changes to the noble Lord’s Bill.
Lord Goodhart: I shall reply to the noble Lord, Lord Desai, on that. To provide in this Bill for a temporary leave of absence would require further amendment to the Bill, so it is not an answer to the problem.
Lord Selsdon: If I may just use my 45 years here to comment on this, I have held 21 years of government appointments in one form or another, all unpaid. In the days when we received no remuneration at all, I had to explain to my colleagues why I was sloping off to the House of Lords early for a gin and tonic. It is extraordinarily difficult to balance that. I have worked in or with many countries—how many I cannot say—and have been paying tax on and off and have sometimes got tax relief.
If an individual wished to take a paid job, it would not matter who he was paid by or whether it was public or private but, if he was unable to attend the House of Lords, he would have the right to take temporary leave of absence. That is what he should do—and he is not surrendering very much. The incidences may not be great but when I was 25 it was quite significant. I was way down in the age group here.
We also have to think that withering on the vine takes place. There is another two years to go and already well over 60 per cent of your Lordships' House are pensioners in one form or another. Most of them will not necessarily take full-paid jobs—but I do not see why there should be any exceptions at all to this rule. The right should be there that if someone decides that he wishes to take an international appointment, whether paid by the private or the public sector, or even if he were self-employed and working on an individual project somewhere or other, he should be able to say to the House that he is taking leave of absence. That could be revoked at any time, when he
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The noble Lord, Lord Oakeshott, stated with a certain pride that one year he paid a six-figure tax Bill, or something quite big. If he is as good as that he might well get a heavily paid job from one of the American banks or Dubai or anywhere else. We would hate to lose him, even for a short time.
Viscount Astor: This amendment, like the Bill, does not really work. It does not work for a number of reasons. As the noble Lord, Lord Goodhart, said to start with, it does not include anybody who went abroad to work for a charity. I find that extraordinary. In a previous amendment my noble friend Lord Ferrers suggested that I should do more so that I should have a better afterlife. He was very keen on that. If I took him seriously and headed off to some remote corner of the world for six months or whatever period to work for a charity, and if this Bill were passed, I might find myself excluded from this House when I came back. That is a flaw in the Bill. It shows that it is incredibly difficult to tinker with taxation, and it shows what a difficult time Chancellors of the Exchequer have.
I also find it extraordinary that the noble Lord, Lord Goodhart, should just dismiss the suggestion of the noble Lord, Lord Desai, about a temporary leave of absence. It seemed an enormously sensible proposal. I do not understand why he is so against that. Maybe the noble Lord, Lord Oakeshott, will be able to give us better reasons why he should be against it.
My noble friend Lord Howard of Rising made a very important point. We do not know how many such organisations there are. We do not even know the definition of “member”. What is the definition of member? What is a membership? Is it an honorary membership, a signed-up membership or a signatory? If some Minister somewhere signs something saying “Save the Walrus in Patagonia”, does that mean that that international organisation will be recognised and count for these purposes? Who knows? I think the lawyers would have enormous fun with the idea of “an international organisation of which the United Kingdom is a member”. I am surprised that the noble Lord, Lord Goodhart, who is such a distinguished member of the legal profession, would come forward with an amendment with such a gaping loophole in it. Perhaps it suggests that even his party and the mover of the Bill do not expect it to go very far.
Lord De Mauley: The fact that the noble Lord, Lord Goodhart, has had to propose an amendment to a Bill put forward by someone on his own Benches—indeed, he said that his noble friend had asked him to put it down—raises a question about how much thought went into the Bill in the first place. That seems particularly unacceptable in a week when this House has sat until midnight more than once to consider issues of
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I think I understand where the noble Lord, Lord Goodhart, is coming from, but Amendments Nos. 3 and 5, which would allow those working in an official capacity to retain membership of your Lordships’ House—
Lord Shutt of Greetland: My Lords, I understand what the noble Lord said, but as he himself said, the House has met several times this week and we have had various government amendments; in other words, they thought a little better as the thing went on. If my noble friend Lord Oakeshott, in consultation with my noble friend Lord Goodhart, believes that this amendment is right, I do not see that the situation is any different.
Lord De Mauley: I am most grateful to the noble Lord for his intervention. I will try to explain why I think these amendments need further thought. I was saying that I think that I understand where the noble Lord, Lord Goodhart, is coming from, but Amendments Nos. 3 and 5 would allow those working in an official capacity to retain membership of your Lordships’ House. Therefore, they introduce a glaring incidence of double standards. If accepted, it would on the one hand be permissible for those expecting to retake their seats in your Lordships’ House to go off abroad and earn substantial remuneration simply on the grounds that they are employed in some loosely defined way by the Crown or by an international organisation, of which the United Kingdom is a member, while on the other hand it would not be acceptable for other Members of your Lordships’ House to go off to work unashamedly and perfectly legally in the private sector overseas to earn valuable foreign currency to the UK’s benefit and then return and retake their seats.
What also needs to be answered is whether, in order to retain their status as Members of your Lordships’ House, Peers employed outside the United Kingdom by the Crown or by an international organisation, of which the United Kingdom is a member, would be required while resident abroad to pay United Kingdom tax, or at least to remit to Her Majesty’s Revenue and Customs the amount by which UK tax on their earnings would have exceeded the foreign tax they paid while they were so working had they been UK-resident. The amendment of the noble Lord, Lord Goodhart, does not appear so to provide. I think I understand his explanation why it does not but his noble friend’s Bill would therefore result in other Members of your Lordships’ House being exposed to double taxation, so it smacks of double standards, as I say.
My noble friend Lord Howard of Rising makes a very valid point with his Amendment No. 4; namely, that even if the rest of it is acceptable, the wording of the original Amendment No. 3 is far too wide. The United Kingdom is a member of many international organisations. The noble Lord, Lord Oakeshott, himself said at Second Reading that,
- “we need to be careful to define the type of international public bodies which would qualify; otherwise, we could leave gaping loopholes”.—[Official Report, 14/3/08; col. 1710.]
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We look forward to his proposal and perhaps that of his noble friend Lord Goodhart on how to deal with these problems.
6.15 pm
Lord Hunt of Kings Heath: I do not disagree with the noble Lord’s analysis but I thought that he was being a little unfair to the Liberal Democrat Party because surely the whole point of the Committee stage is to allow for amendments to be made in the light of discussion. To be fair, the noble Lord’s amendment came about because of discussion at Second Reading.
However, the Government have reservations about the way in which the noble Lord, Lord Goodhart, has approached his amendment. I reflect comments made by other noble Lords. No doubt, he is agonising over whether to press it to a vote. If he decides not to do so and to consider the comments that have been made, it seems to me that is a vindication of the way your Lordships work.
It seems to me that no one disagrees with the principle of providing an exemption to noble Lords working abroad for international organisations such as NATO and the United Nations on the basis that the Bill is drafted. It is clearly in this country’s interest that distinguished Members of Parliament and people from other reaches of life take part in international organisations. That must be in the interests of the United Kingdom. I am sure we acknowledge the splendid work carried out by noble Lords from all parties and the Cross Benches who have held very high office in international organisations. Clearly, they have made a huge contribution to those organisations and make highly relevant contributions to our debates in the light of their international experience. It would be a great loss if that were not allowed to happen in future.
The problem with the amendment’s drafting has already been mentioned. The United Kingdom is a member of many international organisations. The noble Lord, Lord Howard, suggested that we are not aware of how many but to try to discover that would be a futile and costly exercise. I remember answering a Question on international treaties and being asked how many this country had signed. Over the years we have signed hundreds, if not thousands, and I suspect that the same applies with regard to international organisations although I can confirm that we are not a member of the Patagonian Society of Walrus Lovers.
Viscount Astor: How does the Minister know if he does not have a list?
Lord Hunt of Kings Heath: I have it on very good authority.
This is a problem that will have to be faced up to. The noble Lord, Lord Goodhart, himself referred to international voluntary organisations such as Oxfam or Save the Children Fund and illustrated some of the difficulties involved. None the less, I am sure we would consider that Members of your Lordships' House who were involved in such organisations could make a
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The noble Lord, Lord Howard, suggested that only Crown servants serving abroad should be exempt from the provisions of the Bill. I have taken advice on this, and my understanding is that earnings from that type of employment remain taxable in the UK and that, in certain circumstances, legislation provides for HMRC to exempt such earnings in case of individuals who are resident abroad, for example, where an individual is being employed locally on a low rate of remuneration. That might, for instance, include a local national who is employed to provide clerical support for a British consulate. That is unlikely to include any of your Lordships if they are working for the Crown abroad.
My understanding is that the majority of Crown servants pay UK tax on their earnings and would be most unlikely inadvertently to fall foul of the provisions in the Bill. If noble Lords are interested, I will be happy to provide further information on this matter. Both noble Lords have raised very interesting points, which need to be considered by the noble Lord, Lord Oakeshott. The fact is that it is a rather complicated area that needs great consideration.
Lord Oakeshott of Seagrove Bay: Perhaps I may very quickly take up a moment of our scarce and valuable time, as I heard the noble Lord, Lord De Mauley, say. The noble Lord asked me why we have brought forward one amendment to this Bill. It was as a result of a meeting that I had with the noble Lord, Lord Strathclyde, three days before Second Reading, when he raised this point. Therefore, we are trying to deal with the points that have been made, and if we cannot do that in the context of what are very clear principles, things have come to a pretty pass.
Lord Selsdon: I was just going to be helpful. For many years, I had responsibility for relationships with international organisations, when I was in the Midland Bank Group. We were bankers to many of them; I probably have a list somewhere. It was amazing how many there were. My only unfortunate incident was when I was briefly sued by the Flat Earth Society, which was complaining that we made an acquisition in America, and it was trying to stop it and settle out of court.
There are many organisations, not least in the Middle East, and in many cultural parts of the world, which are quite active and genuine, which have bank accounts and which employ British subjects in one way or another. There can often be people who may be seconded by the Peace Corps in the United States or by voluntary organisations here. We do not want to stop the younger groups wanting to come into the House of Lords—
Lord Hunt of Kings Heath: Does the noble Lord think that the solution is to have a prescribed list? Normally, it is the role of opposition amendments to
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Earl Ferrers: Let us not have more legislation, for goodness sake.
Lord Hunt of Kings Heath: The noble Earl, Lord Ferrers, was a member of the Government for 18 years. I wonder how many pieces of legislation he took through your Lordships’ House.
Earl Ferrers: Stacks; and on the whole, they got through. But rather like the noble Lord, Lord Oakeshott, we actually listened to people and amended Bills. I cannot think what that has to do with this Bill this afternoon.
Lord Goodhart: I think the next stage in the procedure is for me to reply on the amendment tabled by the noble Lord, Lord Howard of Rising, but not to deal at this point with the general structure of my Amendment No. 3.
The issue that causes particular problems is the allegedly very large and wholly uncertain number of international organisations. I do not accept that as being the case. The concept of international organisations is well recognised in international law. I seem to remember from my student days that this goes back to the International Postal Commission set up by an international agreement in the 1860s. This issue is very different from that of treaties. I quite understand why the Government do not know how many treaties, particularly bilateral treaties, are still in force, because they become sometimes more relevant and sometimes less relevant as time passes. But if there is an international organisation in existence, it can hardly escape being identified.
Lord Hunt of Kings Heath: I wonder whether the problem is the definition of an international organisation. In a sense, the noble Lord has in his mind the kind of international organisations to which the amendment would apply. Is not the problem in the way that he has drafted the amendment that many organisations could be classified in that way? That is why I wonder whether he has given consideration to a list, as I have suggested.
Lord Goodhart: I very much welcome the Minister’s suggestion and I may come to that later, but not at this stage. Such a body does not just have to be an international organisation; it must be an organisation of which states are members, and of which the United Kingdom is one of those states. I quite imagine the response to a Written Question to which the noble Lord, Lord Howard, referred. I can see that it might take a bit of money to go through the files of the FCO to find out how many international organisations there were of which the
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Lord Lea of Crondall: As it is 6.30 pm and we are here for half an hour, it might be useful to put the thought that the amendment is not predicated on the fact that we can draw up a definitive list of international organisations. If someone out of the handful of people to whom this might apply filled in a form at the time, would that not cover the issue?
Lord Goodhart: Perhaps the best way of putting the position, rather than spending more time on this, is that I am certainly prepared to reconsider this issue. The Minister’s suggestion has been very helpful. In that case, provided that the noble Lord, Lord Howard, is prepared to withdraw his amendment to my amendment, I am prepared to ask the leave of the House to withdraw Amendment No. 3.
Earl Ferrers: Before the noble Lord does that, I note that he says that he would consider what the Minister said and that his advice was very helpful. Would the noble Lord say which advice was helpful, because the noble Lord, Lord Hunt, said it had always been the Government’s attitude to say, “No, we do not want lists”, but then said that it would be a good idea to have a list? One has seen government views change quickly and radically, but not as quickly as that. Which does the noble Lord, Lord Goodhart, support—having a list or not having a list?
Lord Goodhart: The noble Earl would expect me to say—indeed, I shall say—that what I thought was interesting was the proposal that there should be a list and a power to add to it by order. That seems reasonable.
Lord Hunt of Kings Heath: When noble Lords propose lists, it is normal for the Government to point out the risk. Is it definitive and inflexible? Also, by listing certain things, you exclude others. But I thought that in this case a list might be a way of dealing with this problem, particularly if it was amendable by order, so that there could be flexibility. I do not think that there is any contradiction. Clearly, lists appear in legislation, but I was just making the point that in general Governments are a little wary of them.
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