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Lord Oakeshott of Seagrove Bay: My Lords, it is slightly unusual and novel for me to deal with this matter, but I am happy to do so. I say to the noble Lord, Lord Trefgarne, that this is the second time—not any other number of occasions—that I have introduced a Bill in this form. He is right: I introduced a separate, rather different and much smaller—and, I believe, not effective—Bill in previous Sessions, but that did not progress. This is the second time that I have introduced it in this form. However, what is totally different is that we are deeming, or seeking to deem, people to be residents of this country. He is quite right: I introduced the Bill in the same form at the beginning of this Session as in the previous one, although it had had detailed consideration. My noble friend Lord Goodhart and I took careful note of the Second Reading debate in January, and subsequently tabled the amendments

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before us today. Therefore, we have taken account of what was said. However, it is the second time that the Bill has been introduced and we now look forward to moving forward.

Lord Strathclyde: My Lords, before the noble Lord is too critical of my noble friend, my recollection is that there have been at least three Bills from the noble Lord on this subject, although I am happy to accept his assurance that this is the second. What is undoubtedly true—as the noble Lord has agreed—is that the Bill before us is identical to the Bill that he chose not to progress in the previous Session of Parliament for whatever reason, although I was glad that he did so. It is extraordinary that in the Marshalled List that we are about to deal with he has seen fit to table precisely the amendments that we suggested he should look at last year. If he had taken the trouble to reread the Committee stage that we had last year and taken into account the amendments that were proposed at that stage, he would not have needed to propose the amendments that he will propose today. I suspect that I know what happens in the noble Lord’s mind. He walks into his office, has a great idea and says to his secretary, “Remember that Bill we did last year? Press the button, belt it out again; prepare 10 press releases”. That is not the way we should legislate.

I do not know whether my noble friend is tempted to press this Question to a Division. However, if he were to do so, I would be unable to support him. At any stage of my being in this House, as a Member of either the Government Front Bench or of the Opposition, I do not think that I have ever been through a Committee stage when I have not been very grateful for the advice and helpful contributions from all sides of the Chamber. I, for one, am rather looking forward to this Committee stage. I hope that, at the end of it, we end up with a far better Bill than we have before us at the moment.

Lord McNally: My Lords, the noble Lord, Lord Strathclyde, is, as ever, being extremely helpful, not least in trying to temper his colleague’s enthusiasm as regards a possible Division, and for that I am grateful. As regards bringing this Bill back, I recall that Wilberforce brought back the anti-slavery Bill successively over 35 years. Therefore, we have some time to go before we get into Wilberforce proportions. If the noble Lord, Lord Trefgarne, feels so strongly about the Bill being introduced a second time, he should have divided the House at Second Reading, not on the eve of the Committee stage. However, I am thankful for the wisdom of the noble Lord, Lord Strathclyde, at this moment of crisis for the House.

Motion agreed.

5.15 pm

Clause 1: Taxation status of members of the House of Lords

Amendment 1

Moved by Lord Selsdon

1: Clause 1, page 1, line 2, leave out subsection (1) and insert—

“(1) Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes.

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(1A) For the purposes of this Act “British citizen” means—

(a) a citizen of England, Wales, Scotland or Northern Ireland; or

(b) a citizen of Her Majesty’s Crown Dependencies and Her Majesty’s Crown Dependencies are—

(i) The Isle of Man,

(ii) The Bailiwick of Jersey,

(iii) the Bailiwick of Guernsey; or

(c) a citizen of Her Majesty’s Overseas Territories who holds British citizenship under the British Overseas Territories Act 2002 and Her Majesty’s Overseas Territories are—

(i) Anguilla,

(ii) Bermuda,

(iii) British Antarctic Territory,

(iv) British Indian Ocean Territory,

(v) British Virgin Islands,

(vi) Cayman Islands,

(vii) Falkland Islands,

(viii) Gibraltar,

(ix) Montserrat,

(x) Pitcairn, Henderson, Ducie and Oeno Islands,

(xi) St Helena and her dependencies of Ascension Island and Tristan da Cuhna,

(xii) South Georgia and South Sandwich Islands.

(1B) For the purposes of this Act a member of the House of Lords who is a citizen of one of Her Majesty’s Realms may be granted British citizenship without surrendering the current citizenship of a country of Her Majesty’s Realms which are—

(a) Antigua and Barbuda,

(b) Australia,

(c) The Bahamas,

(d) Barbados,

(e) Belize,

(f) Canada,

(g) Grenada,

(h) Jamaica,

(i) New Zealand,

(j) Papua New Guinea,

(k) St Kitts and Nevis,

(l) St Lucia,

(m) St Vincent and Grenadines,

(n) Solomon Islands,

(o) Tuvalu.

(1C) For the purposes of this Act, a member of the House of Lords who was born in any country of the Commonwealth prior to independence of that country may be granted British citizenship without surrendering the current citizenship of the country of birth.”

Lord Selsdon: I find myself in an extraordinary position of considerable nervousness, having recently with the noble Lord, Lord Oakeshott, done a “windy p”. I find myself sitting where I started in the House behind the Liberal Democrats. Therefore, today I wear a yellow tie with a little bit of blue in the form of an aster and a little bit of red.

I begin here for a historic reason which goes back to my grandfather, who stood as a tariff reformer and a unionist in north-west Lanark, initially in 1903 and then in 1906, when he was elected. Your Lordships will recall that in those days a deal was done between

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Liberals and Conservatives and Unionists, or whatever they were called, that they would not stand against each other because the union was the most important thing. My grandfather went on to be MP for North Down. He never made it to Wales, but he came down to Croydon and spent 26 years in the House of Commons before coming here. I shall now explain some of the reasons why I am speaking.

I feel very moved about the importance of the House of Lords and the House of Commons, and of every one of our realms and territories for which Her Majesty the Queen is responsible. This is in part why I am moving my amendment. It is to inform, but I want, first, to clear the air. Your Lordships will know that we are midway between the ides and the nones of March and it was 510 years ago that Shakespeare wrote “Julius Caesar”.

For me, it is slightly difficult, because I am superstitious and I have a gift from God knows where of being able to divine water and other things. I have certain feelings at the moment, and I go back to the days of the raven and the fox. Both were superstitious and worrying characters of the gods—normally the Celtic gods of the Irish, the Scots and the Welsh. It was said that the raven was a sign of doom or good. I must ask the noble Lords in front of me not to turn to look over their shoulders at me at this moment, because if you looked over your right shoulder and saw a raven over the left shoulder or the right shoulder, one represented doom and death, and the other represented gain and glory. The ravens always formed an important part in battles. As those of Welsh extraction will know, the Welsh historically used to play chess with ravens.

The other creature of superstition is the fox, but this time it depends on whether the fox looks at you over his right or left shoulder. One is doom and death, and the other is gain and glory. These superstitions are carried throughout history, and that is one reason for the Tower of London, which is meant to have a Welsh saint buried beneath it. I raise this just to show that some of the histories and traditions of your Lordships’ House are not written in tablets of stone, but are procedures that have grown up over time and are based now, I suppose, upon various conditions, as we call them.

I looked up what I shall call the rules and regulations, the code of conduct, and went through them in great detail over the past few weeks. I also went over the codes of conduct for the Civil Service, which are equally strong. In your Lordships’ House one of the worst things that you can possibly do is, I think, to criticise individual Members. I wish to refer to two texts, which I then shall dismiss in a rather light-hearted way. They are not light-hearted, but to show that I was not behaving badly, I went as a member of the Information Committee and asked if I could look up, while attacks on your Lordships’ House were being levied from the outside world, how they originated, whether they were misrepresented, and what they stemmed from. How could we correct them? That is why I have tried to include a code of conduct in the Steel Bill.

I turn to comments in various newspapers. There were some things in the Times but what hurt me most were the comments in Australia. My grandfather was an MP in Scotland, my great-grandfather was provost

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of Edinburgh and another great-grandfather was the first lord mayor of Melbourne and one of the first Members of the Australian Parliament. The Australian stated:

“‘Tax-dodgers, bung-takers, fraudsters and perjurers must be cleared out of parliament now,’ Oakeshott said”.

A similar comment appeared in the Times. I thought that I would have a look at the Telegraph as well; last year, it referred to a certain Michael Brown, who gave,

The crooked businessman—who will not be sentenced until he is caught—channelled the gift through a company called 5th Avenue Partners”.

We seem to have heard about that from all sides of the House.

The noble Lord, Lord Oakeshott, will remember that, after he first commented on the Bill, I spoke to him, wrote him a very friendly letter and circulated that letter. I said that he should possibly try to understand because he has not been here so long. However, I realised that he has done a lot of good, I suppose, for the Liberal Democrat party by promoting this worldwide. I am told once again by the information sources available to me that almost all these issues started with a telephone call, a press release or some sort of statement. Was the noble Lord, Lord Oakeshott, responsible for that? In particular, to which persons, peoples or others was he referring? Perhaps we could get that out of the way by calling it overt enthusiasm. Throughout the world, we are being attacked.

That is of considerable importance because the value of this House lies in the respect that it commands outside. It is not an expensive body—it costs £127 million a year. I have asked noble Lords to tell me which Members of this House have positions on non-governmental public bodies. Only two people have so far replied; 92,000 people are employed in those bodies, which incur an expenditure of £45 billion a year. I do not know how many times the total cost of the House of Lords and the House of Commons that is; they are meant to be able to advise the Government. In that regard, I wrote to the noble Lord, Lord Oakeshott, and said that perhaps there was something else at which he could direct his energies by asking who those people are.

The Leader of the House responded and gave me the information. The Minister also responded by saying, in relation to the Forestry Commission, “None”. I thought that that was rather unfortunate. Many noble Lords have forests, and forestry is one of their areas of knowledge.

The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): The noble Lord should have asked about the board of the Forestry Commission; I could have then told him that the chair of the Forestry Commission is indeed a Member of your Lordships’ House.

Lord Selsdon: I am most grateful to the noble Lord. Of course, before I do these things I consult the Leader’s office and everyone else. I may have the

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ability to string some words together but in writing I am not quite so good; it is difficult. My point was that £43 billion is being spent on I know not what.

I turn to the amendment. We want to say who should be a Member of this House. Frankly, I do not believe that more than 400 Members should be appointed, directly or indirectly, by a prevailing Prime Minister; nor do I believe that those who merely inherited a title have the right to be here. Those of us who were appointed by an Act of Parliament in 1999 believe that we have a duty to be here. If you look, you will find that among those with the highest attendance are those who were elected following the 1999 Act. We feel that we are in part guardians of history.

I turn to the specific details of the amendment, which was designed to help the noble Lord, Lord Oakeshott. I tried to remove from the Title the word “taxation”, leaving just the word “status”. What first determines taxation throughout the world is status: who you are, your nationality, where you live and so on. The Public Bill Office said that I could not do that, so I thought that, first and foremost, I would say that anyone who was a Member of the House of Lords should be British or have the opportunity to be British. Therefore, the question is: what is British? Proposed new subsection (1) in my amendment states:

“Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes”,

although I wanted to leave out “for taxation purposes”. The most interesting thing about it is that anyone who attends the House of Lords for more than the equivalent of 90 days—it is quite complicated—is automatically—

Lord Goodhart: I am grateful to the noble Lord, Lord Selsdon, for giving way. The short—

Lord Hunt of Kings Heath: The noble Lord should perhaps turn round as he should address the whole Chamber.

Lord Goodhart: I was looking over my right shoulder in order to impose doom and gloom on the noble Lord. I apologise for looking behind me. The Long Title is to:

“Make provision about the taxation status of members of the House of Lords”.

However, the noble Lord, Lord Selsdon, now seems to be raising an entirely different subject which falls well outside the Long Title, and that is the question of who should or should not be eligible to become a Member of the House of Lords.

I should also point out here that citizenship of the United Kingdom or Great Britain has no relevance to the tax status of Members of the House of Lords, because taxation depends on domicile and residence and not at all on nationality. In those circumstances, I wonder whether the noble Lord, Lord Selsdon, thinks that the appropriate course following his very entertaining introduction is to recognise that his amendment has no relevance here and that he should withdraw it.

Lord Selsdon: I am most grateful to the noble Lord. That is exactly what I hoped someone would say. Noble Lords would not expect me not to have consulted widely or to have had considerable discussions in this

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House and with my accountants, who—not regrettably—are very strong Liberal Democrat supporters. Therefore, I provided the Public Bill Office with the advice that was given independently by a well known accountancy firm, whose members openly admit that they are very strong Liberal Democrat supporters. I think it is good that we have a party in this House with supporters.

Lord Lea of Crondall: Before this becomes a private spat between the Liberal Democrats and the Conservatives, I point out that I am not a Liberal Democrat and that I support the principles of the Bill. So a little less about all those who support it being Liberal Democrats would be appreciated.

Lord Selsdon: Today, I noticed sitting on the Benches a well known member of the Labour Party who, like me, was wearing a yellow tie, but no one is on this side. I fully accept the noble Lord’s point and I will come on to the Labour Party in a moment.

I am saying, first and foremost, that anyone who is appointed to this House should be a British citizen or have the right to be a British citizen. That is important. I do not see how you can change the citizenship, domicile or residence of everyone in the House without forcing them to surrender an existing relationship or an existing situation. Therefore, for the purpose of this Bill—

Lord Oakeshott of Seagrove Bay: Will the noble Lord address a very important point here? The word “citizen” is not mentioned anywhere in the Bill for the very good reason that we are not seeking to change anyone’s citizenship. That is not the intention behind the Bill, and I wonder whether it is appropriate to try to go totally outwith the meaning of the Bill.

5.30 pm

Lord Selsdon: I would not have done this had I not consulted, for a considerable period of time, with the Public Bill Office and with others. They insisted that the word “taxation” should be placed here. Subsection (1) reads:

“Any Member introduced into the House of Lords after the passing of this Act shall be a British citizen for taxation purposes”.

I think that is absolutely correct. If I am wrong, I shall apologise to the noble Lord and if he is wrong, I shall expect a full case of champagne at modern-day prices.

The definition of a British citizen is a citizen of England, Wales, Scotland and Northern Ireland. I was concerned because taxation in some of those areas varies and there are different conditions in relation to domicile in Scotland, which I have already disclosed: you are automatically domiciled in Scotland if you have a lair, meaning you own a property where you are to be buried. As I explained, I have several and, therefore, I shall certainly be drawn and quartered but not necessarily hanged. I do not see how anyone could object to that definition.

Subsection (1A)(b) states:

They are British citizens and British subjects. Of course, they may pay tax in their own areas, but they are entitled, under an Act, to have British passports. They include the Isle of Man, which sometimes has another

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name and which also has a different taxation situation, and the Bailiwick of Jersey. When someone said, “In your bailiwick”, I did not realise what a bailiwick was. I should have known because when I worked with the Midland Bank, Samuel Montagu and others, we worked closely with our subsidiaries and others in the bailiwicks—I did not realise that Sark is not included—and the Isle of Man. I declare that as a banker I have had over a long period a relationship either through my employers or personally with almost all the listed territories.

Those three areas have certain taxation problems which are currently being attacked. Historically there were no problems when the Bank of England was in charge and was directly or indirectly supervising all the bodies that were British, and the regulation was very tough. The noble Lord, Lord Oakeshott, is worried about tax havens and people abusing the tax situation. As he will be aware, in 50 the Romans first arrived in Brading Haven, just where he lives in two thatched cottages. Although that part of the Isle of Wight later had problems with Ethelred the Unready and a battle with King Arwald, it was a haven. Brading Haven became Bembridge haven, where I used to sail as a small boy. I would take a boat over from Chichester. We would take out the bung on the way over and put it back in when we arrived near Brading Haven.

Historically, there were certain tax advantages there. I wish to disclose another interest: 20 per cent of the ships of the world are Commonwealth flagged. It is being suggested now that with shipping in a bad state, we should consider being able to dual-flag ships and possibly incorporate them in one of the British territories. One suggestion is the Isle of Wight.

The second area is British Overseas Territories. Their citizens hold British citizenship under a specific Act which is not very old: the British Overseas Territories Act 2002. Their citizens are entitled to be British and to hold British passports.

The problem with all these issues, as the noble Lord said, is that anyone who is a Member of this House would automatically be deemed to be taxed. The word “deem” is an extraordinarily difficult word to apply in law. Who does the deeming?

Lord Lyell: The Revenue.

Lord Selsdon:It should be HMRC. Those territories have seen the stories flashing round in the press and feel pretty insecure. The taxation situation for them is an individual one. Any Member of the House of Lords who has been here for more than 90 days after midnight—I have forgotten the latest form—will automatically be deemed to be a British resident for tax purposes. I was trying to find a way of saying that if someone is appointed here, they should have a minimum attendance.

Lord Wallace of Saltaire: The noble Lord is now in his 20th minute. He was in his 10th minute when he first mentioned the amendment. I think that we can all recognise an attempt to delay proceedings that is very close to being an abuse of the House in a Committee debate. I ask him to draw his remarks to a close.

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