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I recognise that there are objections to this House telling the House of Commons what to do, but this House has a real responsibility for the constitutional effect and good clarification of this legislation. Clauses 21 and 22 require the House of Commons to do away with the current additional costs allowance in respect of second homes and to provide for a salary that would be taxed in the normal way as for all other taxpayers, which amounts to what the Senior Salaries Review Body considers to be a fair level. It should take into account the needs of a Member of Parliament to maintain homes near Westminster and in or near his or her constituency.
Put very simply, the aim is to treat Members of Parliament as nearly as possible like all other citizens.
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6.15 pm
Lord Gordon of Strathblane: Just so that I and perhaps other Members of the Committee are clear, does this mean that an MP for Orkney and Shetland would be paid exactly the same as an MP for Chelsea?
Lord Lyell of Markyate: I think that it probably does. During the years when I was in Parliament, there was perceived to be a lot of unfairness to London Members, who did not get the second homes allowance which was so valuable. They got a much smaller allowance. Parliament could consider going back to that sort of idea. I do not really want to get into that kind of detail. I am trying to get away from what I believe was the device of using allowances which ought to have been pay, and which was pay. A Member of Parliament got just pay until July 1974. Since then, we have expanded this device of allowances and the time has come to do away with it.
Ordinary citizens talk to us and we discuss this issue. They really dislike seeing people have a £7,000 kitchen or something like that put into their house in order to get an allowance. Almost more damaging-although it is perhaps the only respectable way of getting this allowance-seems to be to have a colossal mortgage of £250,000 or sometimes £350,000 on which the interest is paid. This leads to a lot of the fudges and the flipping and to all sorts of things of which one does not approve, some of which amount to wrongdoing. But we should not put Members in that position. It is relevant for us to consider this because the Bill seems to set in stone the obligation to do that.
Under Clause 2, the obligation is for the House of Commons to make resolutions on its salaries. However, the clause says nothing about allowances. Under Clause 3, IPSA is to pay the salaries and make provision for allowances. There seems to be a notion in the Bill-the Minister will correct me if I am wrong, but there is a real danger that this is how it will be seen-that this system of a mixture of pay and allowances, a large portion of which is, or always used to be, substitute pay, will be continued.
There are perfectly good grounds for genuine expenses, including travel expenses, being dealt with differently. I take the point made by the noble Lord, Lord Gordon: you certainly should not get the same amount of money if you travel to Hemel Hempstead, as I did, or to St Albans, as opposed to Orkney and Shetland. Likewise, secretarial allowances in my time were much more disciplined and properly organised. They were paid by the House and were proper expenses. That can be dealt with perfectly well. However, let us clean up the system and get away from the mixture of expenses and allowances, both of which really are an essential part of pay. I think that I have said enough.
Lord King of Bridgwater: I may have misunderstood, but my noble and learned friend said that he did not want to dictate to the House of Commons what it should do. Is he not dictating to Sir Christopher Kelly what he should do?
Lord Lyell of Markyate: My noble friend is absolutely right. In fact, I have written on my notes that I would be accused of dictating to Sir Christopher Kelly, for whom I have a very high regard. I do not know him
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Lord Bridges: The noble and learned Lord has made some very important points. I am not sure, strictly speaking-
Lord Hunt of Kings Heath: Can we allow the Deputy Chairman of Committees to follow the appropriate procedure?
The Deputy Chairman of Committees (Baroness Harris of Richmond): I am assuming that the noble and learned Lord has moved the amendment.
The Earl of Onslow: My amendment is grouped with Amendment 21-
Lord Foulkes of Cumnock: Lord Bridges!
Baroness Royall of Blaisdon: The noble Lord wishes to speak.
Lord Bridges: I wish to comment briefly on the remarks made by the noble and learned Lord. He touches on some extremely important points. Just how permissible it is for us to comment on arrangements proposed for the other House, I am not sure, but I would suggest that the two points that he has made are different in character. The first suggests that Members should be paid a taxable salary. That is probably key to part of the solution to the problems of the other place. Indeed, the noble and learned Lord may have noticed that the Prime Minister himself made a suggestion of this kind not all that long ago.
In the second part of the amendment, the noble and learned Lord refers to,
Here we are in far more difficult territory. It is one of the reasons why the previous scheme got into such difficulties in the House of Commons. One therefore ought to separate these two ideas. While I agree strongly with the first of the noble and learned Lord's ideas, I am very doubtful about the second.
The Earl of Onslow: Although my amendment is grouped with Amendment 21, it deals with a different point. Either we can go on with it or we can deal with it separately.
Lord Hunt of Kings Heath: The noble Earl's amendments are in this group. It is perfectly sensible for him to speak to them now.
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The Earl of Onslow: I must admit that parts of this Committee have reminded me totally and utterly of the wireless programme "I'm Sorry I Haven't a Clue". Perhaps the Woolsack ought to be rechristened as Mornington Crescent. Another thing has amused me somewhat. Normally one gets furious with Governments for resisting perfectly sound amendments with intellectual back-up. Now we have a Government who cannot stop accepting amendments. The noble Baroness, Lady Royall, is shaking her head, but she protests too much. The noble Lord, Lord Bach, has said "I haven't a clue" at least twice, while both the noble Baroness and the noble Lord have been accepting amendments. It is a novel experience.
The point I make in my amendment is important. It goes back to what my noble and learned friend Lord Lyell was saying about Harold Wilson and the allowances business. A Member of your Lordships' House, whose name escapes me for the moment, said to me earlier that he remembers the late and much loved Lord Mellish, when he was Chief Whip in the House of Commons, saying exactly the same thing: "The allowances will make up your salary". My amendment tries to take away from the Executive. I believe that David Cameron has said that they should not get the recently recommended award, and the Prime Minister has said that he is not going to take his ministerial pension. With respect, that is gesture politics that stops people being intelligent about what salaries should be. My simple point is this. If IPSA recommends that the pay should be X, that salary should come in after the next election so that the temptation for the Executive to go down the fiddling route, for want of a better term, is taken away. As we all know, the late and much loved Mr Harold Wilson said that a week is a long time in politics. So this provision would surely enable a divorce from the shenanigans and ensure that there is no temptation towards greater shenanigans.
Lord Foulkes of Cumnock: I am glad that the noble Earl, Lord Onslow, got in before me, because he has said that the Government Front Bench cannot stop accepting amendments. Well, now is the time to stop accepting amendments. I urge my noble friends not to accept the amendments tabled by the noble and learned Lord, Lord Lyell, and the noble Earl, Lord Onslow, for a whole variety of reasons. One was brilliantly put by the noble Lord, Lord King, in a very short and sharp intervention. When we were in the cloakroom earlier, the noble and learned Lord, Lord Lyell, encouraged me to participate in this debate. When I get that kind of encouragement, it is difficult to refuse, although I think that he might regret his encouragement.
However, I agree with the noble and learned Lord's analysis of what happened over the years that he and I were in the House of Commons. Successive Prime Ministers from both parties said to Members, "Don't accept the increases". We must remember that those increases were proposed by the Senior Salaries Review Body. It is meeting regularly at the moment under the munificent chairmanship of Bill Cockburn, and we all have faith in it. The body has done us proud in the past. But when recommendations were made, Prime Ministers would say, "Oh no, the time is not right to accept salary increases. The public won't accept it". The pay rises were voted down. I can say that I was
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Sixty-four thousand pounds is a ridiculously low salary for a legislator. It is about time that we said that and, even more important, it is about time that they said it. It is about time that they stood up and said that they are worth more than that. I say to some of my ex-colleagues that they should start doing that. After all, a general practitioner is now paid over £100,000, and head teachers are paid similar amounts. John Humphrys gets paid hundreds of thousands of pounds for going on and undermining our whole democratic structure with his gurning and his awful-
The Earl of Onslow: Jonathan Ross is paid even more.
Lord Foulkes of Cumnock: I was going to come to him. The editor of the Daily Mail, for goodness' sake, gets over £1 million. I also found out during an interesting exchange on television that even young girls like Carrie Gracie on morning television which no one watches get paid £92,000 a year. I could not believe it. It is about time that people at the other end of the corridor said, "We are doing an important job and we deserve to be properly paid".
The amendment should not be accepted for a number of reasons. In what was again a penetrating intervention, my noble friend Lord Gordon said-with respect to the noble and learned Lord, Lord Lyell-that the situation for someone who represents a London constituency is very different from that of someone representing a Scottish, Welsh or northern English constituency. The costs are much greater for people coming from long distances. Maintaining a home here has legitimate costs, but unfortunately they have been abused. A number of Members of the House of Commons, but only a relatively small number of them, abused the system with things like duck houses and cleaning out moats. We know all of them.
A noble Lord: That has nothing to do with it.
Lord Foulkes of Cumnock: They were claimed under second home allowances and they are embarrassing. Some of those who appeared in the Daily Telegraph were not abusing the system because genuine mistakes were made. I can give one example. A number of Members from all parties claimed every month for council tax, so they claimed £59 or whatever it was each month. They forgot that you pay council tax for only 10 months, not 12. It is an easy mistake to make, and it is a genuine and honest one. As a result they have been pilloried and included in the awful category of having somehow defrauded the taxpayer, which is certainly not the case. We should recognise that some of the alleged crimes that Members of the House of Commons are supposed to have committed are not as bad as they have been painted.
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There are two reasons why we should not accept these amendments, particularly the amendment of the noble and learned Lord, Lord Lyell. First, as the noble Lord, Lord King, said, Christopher Kelly has been asked to look into this. We are getting ourselves into so many fankles-we had an exchange earlier-that we do not even know how many commissioners there are or what they are to do. That has not been settled yet.
Just consider the cost of all these commissioners. When I went into the House of Commons, there was one man with a small staff in the Fees Office dealing with an efficient, simple system. Now there are dozens, if not scores, if not hundreds of people, costing millions and millions of pounds, keeping an eye on the expenses, which are probably now less than the cost of keeping an eye on them. It is astonishing. Now we are to set up more commissioners, who will cost more, to keep an eye on a decreasing expenditure.
Sir Christopher Kelly has been asked to look at the system and it would be outrageous for us to suggest that we should pre-empt his examination. Even more important, it would be outrageous for this House to dictate to the other House what that system should be. It could also happen the other way round. We are in the middle of looking at our system and I have made recommendations on my own behalf to the Senior Salaries Review Body and it is right that we should put them forward. We should have a decent system of allowances here and it is important that we should argue the case for it. We should recognise that people here give service.
I heard an eloquent, powerful argument at a meeting with the Senior Salaries Review Body from a Liberal Democrat Baroness for allowances that make it possible for people to do this job full time and effectively. Other people had different points of view, but we need to put forward our arguments forcefully. We shall make the decision. The House of Commons is not going to tell us what our system is going to be and we should not tell it what its system should be.
Lord Cope of Berkeley: We should get back to the Bill before long, but I agree with the noble Lord, Lord Foulkes-not necessarily with every word he said-in his opposition to my noble and learned friend's amendment. My noble and learned friend seemed concerned that the Bill will put the future of MPs' salaries and allowances into a straitjacket and that we should avoid doing that. In my opinion, Amendment 26, and also, to a degree, Amendment 21, would put them into a straitjacket and decide what the overall system is to be.
It may be that at the end of all the discussions the system outlined by my noble and learned friend will come out as the best one, although the Inland Revenue would have views on whether it would wish to be placed in the position of having to decide on the correct costs of allowing Members of Parliament the expenses of doing their job. There are undoubtedly expenses. My constituency was 120 or 125 miles from London and so, inevitably, there were not only travel costs but accommodation costs, whatever you like to call them, that had to be allowed for somehow. They
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However, his amendments will put the system in a straitjacket. Whatever comes out of the second homes business, we all agree that MPs must have travel allowances, secretarial allowances and so on, and these could be properly referred to in the Bill, to be decided by whatever the mechanism is. We should not write my noble and learned friend's amendments into the Bill because it would put it into a straitjacket for the future, which we should not do for some of the reasons given by the noble Lord, Lord Foulkes.
Lord Shutt of Greetland: I have some sympathy for the reasoning behind the amendments tabled by the noble and learned Lord, Lord Lyell of Markyate. There are two issues here: fixing and paying salaries and fixing and paying expenses/allowances. However, the Bill does not address the two issues; it addresses only one and a half because fixing salaries is not included in the Bill.
There is an interrelationship between the two and it is interesting that under the Bill IPSA will have to consult the SSRB. It might be worth having if the SSRB had to consult IPSA, but I am not certain that that is in the script for the SSRB. In many ways it would be far better if both jobs were done by one organisation. People accept that the SSRB has certain skills and so on, but there is an interrelationship and that is what is behind the amendments.
However, the amendments cannot be right. Amendment 21 refers to maintaining homes near Westminster and in or near constituencies. That could lead one to believe that it has got to cover two additional homes because there could be another place where the MPs actually live and they would then need a constituency home and a London home. I am not certain that that would be thought through by someone considering this, so there is an open point there for someone to look at. If we are suggesting that Parliament is to distance itself from this thinking, that is one of the things that should be done.
Secondly, the scheme must abolish the additional costs allowance. That may be right, it may be wrong, but the body is being set up to look at the various allowances and therefore it is surely not right to amend the Bill in this way. I do not believe the amendments should be supported.
Earl Ferrers: I am glad that my noble and learned friend has tabled the amendment because it goes to the heart of the whole problem. As he said, this has been going on for 35 years. Why has it come to this fearful mess? Simply because the Daily Telegraph bought a disc for £300,000 and published its contents day after day. No one had any redress and, if they tried to find any redress, they were ridiculed. That is terrible because people have had their names blackguarded as a result of this. Good, honest Members of Parliament-and the majority of them are good and honest and work hard-have had their names blackguarded and their characters assassinated.
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The noble Lord, Lord Foulkes, made a typical mistake-not typical of him but a mistake that is typical of many people-when he referred to moats and to duck palaces. The two gentlemen to whom he has referred did not get a penny for either of those, but they are associated with having got money and, as a result of that, they are obliged to leave Parliament. I think that is an absolute tragedy.
If we have a House of Parliament which we value and like, we should consider how best to improve Parliament and not just say, "This is a matter for the House of Commons". It is a constitutional matter. Just because a few people down there may want such and such a thing at this time, it does not mean to say that in 18 months' time many of them will still be there. This will be passed on to the next generation and therefore it is right that it should be considered by both Houses. I hope that your Lordships will do so.
However, if this has been going on for 35 years-and it was not wrong; it was the method by which people were paid-it is because no Government would accept the opinion of the Senior Salaries Review Body. I remember Baroness Seear from the Liberal Democrats, who was a member of the Senior Salaries Review Body, saying, "There is no point in being a member; whenever we suggest something it is never accepted. What is the point of going to all the trouble?". Governments did not accept its recommendations for the good reason that they felt the public would not stand it, so they accepted instead the parliamentary allowances scheme.
The conditions of that scheme were wrong, and it was unfair when people who took advantage of what they were entitled to were then accused of being wicked, milking the system and having their snouts in the trough-all those ghastly expressions that were applied to them. The Members of the House of Commons are good, honest people and it is terrible to see them blackguarded like this.
As this has been going on for so long, for 35 years, why are we in such a hurry to get it through in two weeks? There is of course a problem and we have got to try to get the solution right, but we do not get the solution right by doing it in such a hurry. I do not blame the noble Lord, Lord Bach, for saying, "I'll take this back and I'll think about it". The need to get the solution right is the reason for having three, good, set periods between the stages of the Bill as it goes through Parliament and not doing it all in a hurry, because, otherwise, we will come to the wrong view.
There are a lot of problems here, but my noble and learned friend has accentuated them by suggesting that if we pay people a proper salary and cut out the expenses, everyone will supposedly be satisfied-except, of course, the moment you pay them a proper salary, there will be such a rumpus in the newspapers and everywhere else that, as a result of all this hoo-ha, all the Members of Parliament have done is pay themselves more. That is an awful problem. However, we have got to be careful not to hurry this and produce an inadequate result.
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