| Previous Section | Back to Table of Contents | Lords Hansard Home Page |
We have heard, if I may say so, one or two flippant speeches. It is clear that the noble Lord, Lord Selsdon, intends, so far as possible, to wreck the Bill in Committee. I entirely failed to follow much of his argument. He seemed to suggest at one point that the length of time one has served in this House is completely correlated with the degree of wisdom one has. I am not entirely sure that what I have observed in my nearly 14 years’ membership of this House bears out that suggestion. The reason I did not stand up immediately when the noble Lord, Lord Trefgarne, finished his speech is that
23 Jan 2009 : Column 1866
I was interested to hear a declaration from someone with a background in international banking who takes the Conservative Whip that they have never given a penny to any political party. I trust that the Conservative Whip will be in touch with them shortly. I assure the noble Lord that on these Benches someone who took the Liberal Democrat Whip who had not given a penny to that party would be in serious trouble very quickly.
On the previous occasion when we debated the Bill, the noble Viscount, Lord Astor, confused Luxembourg with Liechtenstein. This time I think I heard the noble Lord, Lord Selsdon, tell us that Selsdon was in Scotland. Perhaps there is another Selsdon, in Scotland, that I have missed.
Lord Selsdon: My Lords, I have a problem: I am a Scottish Baron with an English barony registered in Scotland and a baronetcy. I might buy the noble Lord a drink later and we could have an exchange.
Lord Wallace of Saltaire: My Lords, the Bill is about Members of this House taking responsibility as legislators in the UK to pay tax in this county. We have to recognise that the reputation of politicians in the United Kingdom at the moment is low. The mess we had this week over the Government’s attempt to push through the members’ expenses order is the latest example of own goals with regard to our reputation. On Wednesday the noble Lord, Lord Bassam, said he was withdrawing the order in the hope that the Government would manage to re-establish a cross-party consensus. There never was one. There may have been a comfortable two-party consensus between those on the Labour Benches who had something to hide and those on the Conservative Benches who had something to hide, but we were never consulted and certainly never agreed.
As we enter a recession, we recognise the degree of public anger at the denial by the financial elite in Britain, the United States, France, Germany and elsewhere of any responsibility to their wider national societies—certainly not in paying tax. I well remember Leona Helmsley’s dictum in a previous recession that, “Only the little people pay taxes”. That is one of the problems we are up against, and it is something that my party will be campaigning on in the next few months; we need fair taxation, and everyone should pay tax.
There are severe dangers to the Conservative Party, and I am sure the noble Lord, Lord Strathclyde, is aware of them, in allowing itself to be identified with fat cats and tax evaders. We know, without mentioning names, that there are those appointed to the Conservative Benches who made promises on appointment that have not been fulfilled, one or two whose status is in need of clarification and has not been clarified, and we know that some of those people are among the largest donors to the party. So there are issues—and
23 Jan 2009 : Column 1867
The issue is about the reputation of this House and, as the noble Lord, Lord Lipsey, said, about interim measures that we need to take, recognising that, whatever the final shape of this House may be, we are going to be stuck with its current composition for some time. Perhaps other measures will come through on an interim basis, but this is one that I suggest needs to be considered seriously. The Conservatives will do themselves great damage if they attempt to treat this flippantly or sarcastically and suggest that the evasion of tax is not a serious problem.
Lord Trefgarne: My Lords, the noble Lord has made a number of remarks about the Conservative Party generally. Is he absolutely certain that every single member of the Liberal Democrat Party is above reproach in these matters?
Lord Wallace of Saltaire: Of course not, my Lords, and we shall do our best to sort that out—as I am sure the noble Lord, Lord Strathclyde, will do.
11.08 am
Lord Strathclyde: My Lords, I am glad to hear that the noble Lord, Lord Wallace, takes these matters so seriously. Once again today the Liberal Democrats have raised the salience of Lords reform. I remind noble Lords that this is one of my favourite subjects; I have spoken on this subject probably more than any other Member currently, and I am looking forward to continuing to do so. We have not had an opportunity for quite some time, so it is tremendous to be able to dust down the old files and make another speech on the subject.
When the noble Lord, Lord Oakeshott, started, I thought he was going to make a rather more interesting point about the state of the economy, taxation, debt and trying to make this country a more attractive place for people and businesses to come and base themselves here—an issue that really would have an impact beyond this House. Sadly, I was disappointed. Many will have no quarrel with this Groundhog Day. The noble Lord should be under no illusions that if he starts to legislate to exclude certain Peers from this House, some will question why others should sit here at all.
The noble Lord, Lord Lipsey, talked about the absurdities of this House. The noble Lord was quoted in the Times some years ago saying, “You couldn’t elect better Lords than me”, so perhaps that is an absurdity we should start off with.
Lord Lipsey: My Lords, I was not quoted as saying any such thing in the Times. They put that headline on my piece. If the noble Lord reads the rest of it, he will find that I could stick to every single word of it.
Lord Strathclyde: My Lords, I am glad that the noble Lord has put that right and I hope that he will now start to support an elected Senate.
23 Jan 2009 : Column 1868
If the noble Lord, Lord Oakeshott, starts to probe into the personal finances of individual noble Lords as he wants, others will no doubt probe how it is that his party has utterly refused to pay back £2.5 million obtained from a convicted fraudster. Only the little people have to pay money back, is that not right? Perhaps we should look for legislation to stop people whose party goes on benefiting from such donations making our laws. Perhaps the noble Lord himself might start drafting it, with the help of his noble friend Lord Wallace of Saltaire. The reputation of his party is at stake. Perhaps he might wish to make a statement as to whether it is planning to repay that money.
The noble Lord, Lord Oakeshott, is getting a reputation for shouting the odds about this House outside it in ways that do not always reflect accurately on it. Last weekend, he was offering a rent-a-quote comment on the voting records of some of his colleagues—the noble Lord, Lord McNally, might be interested in this—so I thought that I would look up that of the noble Lord, Lord Oakeshott. He was equal 51st in the table of Lib Dem voters in the previous Session. That puts him struggling to avoid relegation from the Lib Dem third division to the fourth.
Last year, the noble Lord brought this self same Bill to the House. It did not find favour. It was extensively debated. Suggestions were made, even by its critics, to improve it, but has the noble Lord listened? Has he had any discussions with anybody? Has he made any changes whatever to this legislation? Perhaps he has had private discussions with the Government about the Bill. No, he has not. We have to question why the noble Lord believes that he has the right to bring before the House the same Bill which failed last year and the year before in exactly the same way, rather than listening more considerately to those who have criticised it.
It is a game that the noble Lord and his friends play in debating this issue to pretend that those who oppose the Bill oppose the underlying principles of it. I therefore make it clear, as I did last year, that I and my party believe that if you make UK law in either House—it is a flaw of the Bill that it deals only with one House—you should pay UK tax.
Whether it should be only UK tax is a different matter. I am not a tax expert, nor is the noble Lord, Lord Oakeshott—even the noble Lord, Lord Goodhart, accepted that it is a deeply complex matter. Many technical issues will need to be addressed if the Bill is to be progressed. Some of them were thrown up by my noble friend Lord Selsdon. I am grateful particularly for the interjection of my noble friend Lady Gardner of Parkes. As I asked last year, what about those who do jobs for the United Nations, the EU or other organisations? Can the noble Lord give the House an assurance that Mr Clegg paid full UK tax on all his EU earnings, from which he will draw a pension? What of businesspeople in mid-career who take contracts abroad? What about gifted businesspeople such as the noble Lord, Lord Paul, who is widely respected in this House and who came to this country to create jobs but may not always be domiciled here? And what, indeed, about the old Liberal Democrat ideal that this country
23 Jan 2009 : Column 1869
I also disagree with giving HMRC any authority over Members of this House. This House’s membership and who sits here is a matter for the Committee for Privileges of your Lordships' House. Since when does the Customs man have any say on who sits in a sovereign Parliament? If there is any system, it should be managed by the Clerk of the Parliaments. I totally disagree with the draconian idea of a life ban as proposed by the noble Lord, Lord Oakeshott, in Clause 1(3). I doubt that it is even in conformity with human rights principles. We should perhaps hear from the noble Lord, Lord Lester of Herne Hill, on that subject in Committee. Even murderers get out in seven to 10 years.
These and many other issues will need scrutiny in Committee. But what should happen next? This is the third or fourth occasion on which we have had a very similar Bill before us. I doubt very much that it will pass this House. If it does, I understand that the Government will not support it in the House of Commons. Would it not be better if we left all this for proper, well thought-through government legislation on reform not just of this aspect of the House but of so many others, so that we could carry on dealing with the serious issues that face our nation?
11.16 am
Lord Hunt of Kings Heath: My Lords, I say first to the noble Lord, Lord Oakeshott, that, like the noble Lord, Lord Strathclyde, I have been suffering some withdrawal symptoms, since I think that we have to go back as far as last March to find ourselves last being able to debate a subject of keen interest to a number of us; namely, reform of your Lordships' House. I think that we can now look forward to spending many happy Fridays in your Lordships' House debating these matters, as well as, no doubt, the Bill of the noble Lord, Lord Steel, when he eventually returns from his cruise.
This is not the first time that we have debated this matter. Indeed, this morning we have been treated to a fascinating debate. My noble friend Lord Lea gave a very stirring speech, and the analysis of the noble Lord, Lord Selsdon, of the Liberal Democrats as a collection of new boys was certainly interesting. As I fast approach receipt of my bus pass, I rather enjoyed his description.
When the noble Lord, Lord Oakeshott, introduced a very similar Bill on this matter in March last year, he set out a simple principle, that,
- “if you pass laws for British people, you pay taxes like British people”.—[Official Report, 14/3/08; col. 1711.]
23 Jan 2009 : Column 1870
That has been summed up very simply as no representation without taxation—the noble Lord, Lord Wallace, repeated that.
The Government cannot and would not wish to argue with that principle. I support what the noble Lord, Lord Goodhart, said about the commitment of Members to your Lordships' House. Paying taxes is an important way in which Members of both Houses of this Parliament demonstrate a commitment to the country that they serve through their parliamentary work.
As is customary, the Government do not seek to impede the progress of a Private Member’s Bill through your Lordships' House, but, equally, it would be useful if I set out some of their reservations about the details of its provisions. The Government are fully entitled to bring to the House those reservations and to ask that the Bill be given extensive scrutiny, without in any way detracting from our support of the no-representation-without-taxation principle. A number of noble Lords kindly mentioned the well ordered White Paper on reform of your Lordships' House which was published last summer. It was informed by the extensive discussion in the cross-party working group and set out clearly how we thought it best to proceed on those matters.
Let me come to some of the details of the Bill. The noble Lords, Lord Goodhart and Lord Selsdon, as well as the noble Baroness, Lady Gardner, illustrated the complexity of matters around domicile status. I remind noble Lords of a commitment that the Government made in last year’s Budget, which undertook not to substantially revise or revisit rules on residence and domicile in this Parliament and the next. We stand by that commitment; the Budget’s measures on residence and domicile strike the right balance between helping to maintain the competitiveness of the UK economy and providing a tax system in which everyone pays their fair share.
A number of noble Lords have commented on the financial challenge facing this country; I should have thought that the stability and balance to which I have referred was ever more important in those circumstances. The stability that we have committed to in rules governing domicile help the UK, and will continue to help the UK, to be an attractive destination for talent and investment in our economy.
A number of technical points were raised, and it is with some trepidation that I provide the House with information, although it is appropriate that I do so. On the £30,000 charge for access to remittance basis, my understanding is that non-domiciles are not forced to access the remittance basis; it is their choice whether to apply for access to that tax status. Non-domiciles who access the remittance basis for more than seven out of the last 10 years must then pay £30,000 to continue to access the remittance basis or move on to the arising basis. These provisions and others in the 2008 Budget statement strike the right balance between asking non-domiciles to pay a fairer share as they stay in the UK for longer and maintaining the UK economy as an attractive place to invest.
Lord Goodhart: My Lords, does the Minister agree that the £30,000 would be chicken feed for some of the very rich people who spend a lot of time in this country but are non-domicile?
23 Jan 2009 : Column 1871
Lord Hunt of Kings Heath: My Lords, as I have said, we think that the £30,000 annual charge is a reasonable basis on which to achieve the kind of balance that I have just described. I shall come on to the definition of domicile. I have to say to the noble Lord, Lord Selsdon, that the 17 out of 20 years rule applies only to inheritance tax, because the proposal to extend the rule to all tax categories was rejected after public consultation. I suspect that we will have a very enjoyable canter on taxation rules in Committee.
I come to the question of deeming, which is also a matter of interest and concern. I have referred in brief already to the question of the 17 out of the last 20 years. Clearly in our consultation the Government gave great consideration to that. But in the light of the consultation’s consideration and its rejection, one would have to think very carefully about reopening the question so soon.
In addition, I have to say to the noble Lord, Lord Oakeshott, as I said last time, that we are concerned with the proposal to deem Members of the House to be domiciled tax-resident and ordinary tax-resident in no country other than the UK. Taken together with the Bill’s amendments to the Income and Corporation Taxes Act 1988, the provision would override the double taxation treaties. The Government have made it clear that we cannot override those treaties unilaterally. Amending them by bilateral agreement is unlikely to be a practical suggestion, since this Parliament has no jurisdiction over how other countries define individuals as resident or non-resident for tax purposes. That indicates that, whatever the principle behind the Bill, it is not a simple matter of simply passing it without giving due consideration to all these difficult matters.
On the question of Peers who work abroad, the noble Lord, Lord Goodhart, made a very pertinent point in the last debate and today’s debate as well. I hope that there will always be cases of Members of this House working abroad, sometimes for long periods of time, in high-profile international organisations. Long may that continue and long may they then be able to come back to your Lordships' House. We have seen in our debates on foreign affairs the huge advantage that that brings to your Lordships' House. We would have to be very careful about that.
Aside from the technicalities of all these matters, it is worth bearing in mind two points. First, the House of Lords Appointments Commission has informed the Prime Minister that, as from June 2007, nominees need to be resident in the UK for tax purposes before the commission will consider their nomination. I understand that that policy covers both political and non-political candidates. I also understand that it has been reaffirmed by the noble Lord, Lord Jay of Ewelme, who has taken over the chairmanship of that commission.
As the noble Lord, Lord Teverson, suggested, one needs to place this Bill in the wider context of Lords reform. As I have said, we referred to and dealt with the matter of tax status in the White Paper on Lords reform, proposing that all Members would need to be resident in the UK for tax purposes. The noble Viscount, Lord Astor, quoted from the White Paper, and my noble friend Lord Lipsey felt that the morning glory of that White Paper had gone. I do not know whether
23 Jan 2009 : Column 1872
This matter is much better dealt with in the context of comprehensive reform of your Lordships' House. I very much agree with the noble Lord, Lord Trefgarne, on that matter. We have set out those proposals. I totally disagree with my good and noble friend Lord Lipsey on his analysis that Lords reform might be many years to come. I remain confident that it is entirely possible, based on the consensus reached between the political parties in the White Paper, and following the next general election. That is surely the best way in which to deal with this important matter.
11.28 am
Lord Oakeshott of Seagrove Bay: My Lords, I thank all noble Lords who have spoken. I should probably start by apologising to the noble Lord, Lord Selsdon, for shooting his fox. He was obviously deeply disappointed that I was, as my noble friend Lord McNally said, statesmanlike. Indeed, noble Lords may have heard not a breath of partisan comment pass may lips—and I must chide him gently for bringing in a political note.
There is an important point, however—and I was sorry that neither I nor my noble friend Lord Goodhart seemed to manage to get it across to the noble Lord, Lord Selsdon, or the noble Viscount, Lord Astor. Indeed, there were one or two passages in the Minister’s speech where there seemed to be confusion about how the Bill would work. Let me put it even more simply, if I can. We are just saying that noble Lords will be taxed as if they were fully resident and fully domiciled in this country, and no other. It is a very simple point.
Viscount Astor: My Lords, the noble Lord, Lord Oakeshott, has repeated his mantra, but the problem is that that is not what his Bill actually says. The Bill says:
“No person shall become a member of [this House] who is not resident, ordinarily resident and domiciled in the United Kingdom”.
It has nothing to do with different bases. It is not equivocal or more complex than that. Or is the noble Lord saying that he will change Clause 1(6)?
Lord Oakeshott of Seagrove Bay: My Lords, I am sorry, but that would be for the future. No one will become a Member of this House on that basis in the future. That is made quite clear and that is the position of the Appointments Commission. The Bill mainly seeks to deal with the people who are here already. That is why that clause is different. For the people who are here already, it is clearly on that basis.
Viscount Astor: My Lords, I am sorry to interrupt, but the Appointments Commission, as I understand it, deals with residency and has nothing to do with domicile.
Lord Oakeshott of Seagrove Bay: My Lords, the principle is clear and I am sorry if I did not fully get it across.
23 Jan 2009 : Column 1873
Lord Hunt of Kings Heath: My Lords, noble Lords may find this helpful. The noble Lord, Lord Jay of Ewelme, gave evidence to a pre-appointment hearing before the Public Administration Select Committee, on 22 July. Speaking about new appointees, he said:
“As I understand, they should pay UK taxes”.
“I think anybody who is appointed to the House of Lords should be paying taxes in this country and, in addition, should be playing an active part in the House of Lords”.
Lord Oakeshott of Seagrove Bay: My Lords, moving on, I thank the noble Lord, Lord Lea, for his support. He made a very powerful point about the irresponsibility of financial elites. In particular—he did not name anyone but I will—he picked out Merrill Lynch, which has so arranged its affairs to create enormous tax losses and will not be paying tax for many years in this country.
| Next Section | Back to Table of Contents | Lords Hansard Home Page |