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Baroness Kinnock of Holyhead: My Lords, the Government's approach to the future of Trident is central to any nuclear posture review, as the noble

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Lord, Lord Hannay, intimated. Will the Minister tell the House how the strong preference of one of the coalition partners for alternatives to Trident renewal will be taken into account in a future review scrutinising spending to ensure value for money?

Lord Howell of Guildford: There will be a review, as undertaken in the coalition agreement, and the coalition partners will be free to express their views, as they have said they will. I have no doubt that there will be a very healthy, realistic and sensible analysis of the situation, but the overarching commitment is that, however we organise the matter, there must be a constant-at-sea deterrent that works, rather than one that does not work or costs a lot more money and involves a lot more missiles, as some alternatives would.

Lord Marlesford: My Lords, given that many of the most significant developments in relations between nations in the past 30 or 40 years have been unpredicted and sometimes unpredictable, is it not important, in the context of what the noble Lord, Lord Hannay, said about the deterrent being focused on the Cold War period, to recognise that if we were to lose the capability, it might be very difficult to get it back again if it were to be needed?

Lord Howell of Guildford: Those are very wise and practical words from my noble friend Lord Marlesford.

The Earl of Onslow: My Lords, is it not also reasonable to assume that had neither India nor Pakistan had nuclear weapons within the past 10 years, it is probable that they would have gone to war? Because they had nuclear weapons, they thought it would be a silly idea and so did not.

Lord Howell of Guildford: My noble friend is quite right. That could be a good example of the theory of mutual deterrence working. Perhaps, if we look back over the history of the past 50 years, it has worked.

Climate Change: UN Framework Convention

Question

3.03 pm

Asked By Lord Hunt of Kings Heath

The Parliamentary Under-Secretary of State, Energy and Climate Change (Lord Marland): My Lords, the Government are committed to working towards an ambitious global climate deal that will limit emissions. We will be working with our international partners, both in the European Union and bilaterally, to secure practical progress in tackling climate change by the time of the next conference of parties in Cancun in November this year.

Lord Hunt of Kings Heath: My Lords, I am very grateful to the noble Lord for that response. Will he confirm that the Government acknowledge that the

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scientific evidence is clear that unless we mitigate the worst impact of climate change, countries of the world face catastrophe, and therefore an international agreement in Cancun is essential?

Lord Marland: My Lords, rarely has so much political capital been spent in trying to reach that agreement in Copenhagen, so it is a bit much to ask that it will happen in Cancun. We are optimistic that, unlike the England football team, we might get a result in South Africa in 2011, but, as the noble Lord will know, we need to be patient and realistic and to develop a dialogue with countries that do not row in tune with us at the moment.

Lord Lawson of Blaby: My Lords, given that, as my noble friend's answer implies, a unilateral UK climate policy makes no sense in scientific, economic or political terms, will he give an undertaking that should Cancun not result in an ambitious and binding global agreement to cap emissions, the United Kingdom Government will fundamentally re-examine and re-evaluate our climate change and energy policies in the light of the outcome of Cancun? If not, why not?

Lord Marland: I thank my noble friend Lord Lawson for his question. His views are widely known, and I compliment him, incidentally, for bringing a great wealth of knowledge to this debate. However, his views are, I am afraid, not in line with the Government's policy. This Government are committed to a green agenda. Climate change is one of the gravest threats that we face as a nation and as a world. Urgent action at home and abroad is required to tackle it. The overwhelming weight of scientific evidence from a range of independent sources indicates that global temperatures are rising due to human activities, and temperatures are set to increase over the coming century. It is our duty as a Government to solve these problems.

Lord Teverson: My Lords, one of the areas in which there was almost success at Copenhagen was deforestation and the REDD programme. Even if the grand scheme is not solved in Mexico, is it my noble friend the Minister's judgment that we will move forward in this important area and find a solution? How are the Government approaching this at the moment?

Lord Marland: I thank the noble Lord for his question. He brings unrivalled knowledge to this subject. As he well knows, 70 countries are working very closely to firm up some of the loose agreements that were made in Copenhagen. We are very committed to that dialogue and will continue that process in earnest.

Business of the House

Announcement

3.07 pm

Baroness Anelay of St Johns: My Lords, with the leave of the House, my noble friend Lord Strathclyde will now make a Statement on financial provision for Members. In the light of the subject matter, it may be for the convenience of the House if the Convenor of the Cross Benches is given the opportunity to intervene in the course of the Front-Bench exchange. If required,

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it may also be convenient to extend the maximum time allocated to Back-Bench questions and answers from 20 minutes to 30 minutes.

Immediately after proceedings on the first Statement have concluded, my noble friend will repeat a Statement entitled, "G8 and G20".

Financial Provision for Members

Statement

3.08 pm

The Chancellor of the Duchy of Lancaster (Lord Strathclyde): My Lords, I wish to make a Statement on future financial provision for Members of this House.

In my view, we need fundamental change. None of us wants to live through again what we lived through in the last Parliament. In a House in which the overwhelming majority of Peers have always acted on their honour, we found ourselves severely criticised. All too often, that criticism was fully justified. The parliamentary expenses regime was opened up to public view, and the public saw a system that was badly broken. Difficult questions were asked, abuses were uncovered, apologies have been made and prosecutions are pending. We could not let this continue, and I pay tribute again to the contribution made by the noble Baroness, Lady Royall. Once problems were uncovered, she acted decisively, and the House is indebted to her.

We received a report from the Senior Salaries Review Body. Building on that report, my noble friend Lord Wakeham was invited to lead an ad hoc group to consider, consult and advise on the implementation of a new system of financial support. The group has now submitted its proposals to the House Committee, and its report, entitled Financial Support forMembers of the House of Lords, is now available in the Printed Paper Office.

The Wakeham group supported the SSRB's idea of combining the current daily subsistence and office costs allowances into one daily allowance. I agree with that. But the group suggests an alternative option, a simplification of the SSRB's approach to overnight allowances by combining that, too, into one single daily allowance, payable on attendance on each sitting day. If this were done, it would mean the abolition of the expenses regime as we know it, and in future, payment for staying overnight, taxis, meals, secretaries and research assistants would all come out of that single payment. How much Peers spend on each item would be entirely up to them. There would be no extras, no small print. The single payment would be the end of the matter.

Under the current scheme, the maximum some Members may claim per day they attend is £334. The SSRB suggested that this should be £340. If we create a single uniform daily allowance, it should be set at a figure less than these two totals. I recommend £300. This is 10 per cent less than the current maximum and 12 per cent less than the figure recommended by the SSRB. Furthermore, there will be a lower rate at which Members can claim. I suggest that this should be 50 per cent lower at £150.



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This is not a salaried House. Attendance will remain the key basis for the allowance-that is what the public expect. But in order to contribute effectively to the work of the House, Peers are often involved in preparatory and other work outside the Chamber and cannot attend, for example, for long periods in Committee. However, I believe that many will consider a lower rate appropriate, for example for Peers who are able to attend the House for only part of a sitting on a particular day.

We are rightly all under scrutiny for our use of public money and the public expect Members of the House to set the same high standards for themselves as they do for others. Some may feel they do not wish to ask for any payment at all. Based on provisional statistics, last year 13 per cent of those who attended the House did not claim any allowances. I hope that they will continue not to. The Wakeham group proposals cover a number of other important issues, including travel arrangements for Members. Its proposals will continue to recognise the additional costs faced by Peers who travel from long distances.

Axing through the current complex structure of expenses would represent radical change, but I believe that that would be right. It also holds other advantages. It would be cheaper to run than any more complex arrangements, less bureaucratic and less expensive to comply with, simpler to police and far harder to abuse. The controversial rules on so-called "second homes" would quite simply be swept away. There will be no more accusations of addresses of convenience, and no more juggling of utility bills and claims forms. If you come to Westminster and work in Parliament, you will be able to claim the allowance. If you do not, you will not.

This will mean a reduction in the amount that some Peers have claimed in the past. But in the present economic climate we cannot protest against a reduction. Indeed, in my own view, with a new system, levels of payments should be frozen for the life of this Parliament. I accept that this is a scheme that will not be welcomed by all, but it will be broadly cost-neutral compared with the existing scheme. The existing expenses regime is discredited. It lacks credibility and the public have lost confidence in it. This new plan means the end of the second homes fiasco. It means the end of expenses in the House of Lords. It means a new system that is direct, transparent and accountable. It means that we are making a significant step towards winning the public's confidence again.

So, what next? The House Committee will meet soon to discuss the details of this proposal. Before the Summer Recess, I will table resolutions for the House's approval. This House has suffered greatly from the faults of the previous system and the misbehaviour of a small minority. Ultimately, it is a matter for the House if it wants to make this change. The Government's view is that we need clarity, simplicity and reform-and that the time for reform is now. I hope that your Lordships will agree, and I commend this Statement to the House.



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3.15 pm

Lord Hunt of Kings Heath: My Lords, in the absence of my noble friend Lady Royall, I am grateful to the noble Lord, Lord Strathclyde, the Leader of the House, for making this Statement on financial support for Members of the House of Lords. I am also grateful to him for his acknowledgement of the actions taken previously by my noble friend.

This House is rightly jealous of its reputation. It makes an enormous contribution to this country in the scrutiny of legislation and in holding Governments to account, and to Parliament as a whole. It is important in maintaining public confidence in the integrity of this House and its Members that it has a financial support system which is fit for purpose. I add my thanks to the noble Lord, Lord Wakeham, and the members of his group for the great care and attention that they have given to their work.

The noble Lord, Lord Strathclyde, has informed the House that in addition to the detailed work undertaken by the Wakeham group on the SSRB recommendations, it has also suggested that consideration should be given to putting in place a simplified allowance to replace the daily and overnight allowance recommended by the SSRB. This will of course be a matter for the House itself to decide. But the noble Lord, Lord Strathclyde, has stated that he intends to support the alternative simplified system set out in the Wakeham group report. I and my noble friend Lady Royall, the Leader of the Opposition, will also give our support to that recommendation.

I believe that the arguments for pursuing a simplified allowance are persuasive. Of course it has a swings-and-roundabouts characteristic about it, and there will be some inequities, as no system is ever likely to be perfect; but the simplified system should be easy to implement, easy to administer and, above all, easy to explain to the public.

We are embarking on a period of change to your Lordships' House in the light of the Government's proposals for reform and the establishment of a committee to prepare a draft Bill. It makes sense to move quickly to this new and simplified system, which can always be further reviewed as part of the reform process. I would be grateful for confirmation of that from the noble Lord, Lord Strathclyde.

It is necessary and important that Members have the financial support necessary to undertake their duties. Equally, we must ensure that public money is spent wisely and efficiently. I have noted the remarks of the noble Lord, Lord Strathclyde, that this will be cost-neutral and that the maximum level set will be lower than the current level. Can the noble Lord give some indication of when the House is likely to be asked to discuss and approve the new system? Can he confirm that the new system, if approved, will be in place by the time the House returns after the Summer Recess? Can he confirm also that the necessary administrative processes can be put in place in time?

Overall, we can see a sensible way forward which can command public confidence and support Members appropriately in the fulfilment of their responsibilities to your Lordships' House.



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3.18 pm

Baroness D'Souza: My Lords, I add to the thanks already expressed to the Wakeham ad hoc group for its report, which I know has taken a great deal of time and may have caused a few more grey hairs. It is particularly helpful that the proposals put forward by the SSRB have in large part been accepted, thereby holding true to the resolution in this House last December to accept the principles and architecture of that report. One or two of the more strange recommendations have been ironed out, such as the need to separate man and wife when travelling in a first-class railway carriage.

I say this in anticipation of the debate which is due to be held tomorrow on House of Lords reform. Let no one say that this House does not undertake reform. In the space of less than a year we now have a stringent code of conduct, an active sub-committee on privileges and standards and greater financial transparency.

There is of course room for further adjustment, which is why the suggestion of a review in a year's time is welcome. The Leader did not actually suggest that in his speech, but I think it is in the air. One area that continues to cause some concern is that the daily allowance is tied to presence, and this may affect disabled peers where daily attendance would in fact reduce productivity rather than enhance it. I again ask that there be some flexibility in the implementation of allowances.

The Government have now put forward a variation on the Wakeham proposals; namely, a fixed daily allowance for all attendees. As we have heard from all sides, the chief advantage of this proposal is that it would immediately lighten the burden on the finance office: no invoices, no verification measures and no end-of-term adjustments. Another advantage is that adoption of this proposal, as has also been stressed, would for ever pre-empt any accusations of fraudulent claims.

I can see the attraction of this simpler payment system and agree with the government proposal, but I also have some sympathy with those who live outside London and who stay in London for the purposes of attending your Lordships' House. These people will be penalised to the extent of anything up to perhaps £700 per month, receiving only £300 per sitting day rather than £341 for a receipted overnight stay.

There will be those who argue that an allowance structure will inevitably invoke questions about tax. I feel that the sum of £300 per day to cover all secretarial, office and subsistence costs is not unduly generous, and that any further reduction would seriously deter some Peers from attending at all. It would be helpful for those Peers who live in more distant parts for a distinction to be made, in any publication of costs incurred, between the actual total allowances for a given month and the travel costs, since these expenses are paid directly and thus are not part of any allowance.

The stated aim of the SSRB recommendations was to restore public confidence. I suspect that public confidence will ultimately rest upon more than the size of a daily fee; it is to be hoped that this House will be judged on the work that it does in improving legislation.

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That said, the changes put forward in the SSRB, the Wakeham report and the noble Lord the Leader's Statement are all to be welcomed.

3.21 pm

Lord Strathclyde: My Lords, I am grateful for the broad welcome given by the noble Lord, Lord Hunt of Kings Heath, and the noble Baroness the Convenor of the Cross Benches. I understand why the Leader of the Opposition could not be in her place today, and I am glad that the noble Lord stood in for her in such an excellent manner.

I think the whole House should thank my noble friend Lord Wakeham and congratulate him on the work that he did. He took on an immensely difficult task after the debate that we had last December. It was not clear to me that anyone would be able to find their way around this particular maze, with so many different groups of people wanting different things and dissatisfied with what was being presented. It is a real credit. He did not manage to find his way through alone, though; he did so with the help of a group of individuals from all sides of the House who no doubt helped and encouraged him in his work.

The noble Lord, Lord Hunt, asked some specific questions, particularly about how long I anticipate this process will take and when the new regime will come into force. It is important that we move quickly to the new regime. The House Committee will therefore meet very soon and take a view on resolutions that will be proposed by me. If they are agreed they will be brought to the House. I hope that this will be done in the course of the next few weeks-certainly before the Summer Recess, because I envisage the new regime coming into force on 1 October. The current regime will continue until then.

We will need resolutions, in part to allow the authorities of the House to take them into account when they are creating the new system. I do not believe that anything I have said about the new system will give the authorities in the House of Lords any concern at all about being able to administer the scheme effectively, efficiently and more cheaply than was envisaged under the scheme proposed by the SSRB.

Turning to the points made by the Convenor of the Cross Benches, I recognise that some will be concerned about a net reduction in the amount of money they receive. As the noble Lord, Lord Hunt of Kings Heath, said, this is not a perfect system-nor does it try to be. It tries simply to iron out the worst of the difficulties that we have seen in the current system and the proposed scheme, and it has taken all those things into account.

The noble Baroness was right about all the changes that have taken place during the past 12 months. We have a new code of conduct, a new independent Commissioner for Standards, and we are reviewing the attendance allowances. For the House of Lords, it is a positively revolutionary pace.

The noble Baroness mentioned taxation. That is not a matter for me; it is up to HMRC and the Treasury. However, if the previous scheme was without tax, there must be compelling arguments for this scheme also to be without tax, given that many of the expenses which Peers have are very similar.



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