Allowances

Baroness Smith of Basildon Excerpts

Wednesday 27th March 2024 Lords Chamber

[Lord Newby (LD)]

My Lords, we on these Benches very much welcome this scheme. I would say to the noble Baroness, Lady Fraser, that we do not want to go down the IPSA route on anything. Everything is different, and once we start trying to draw comparisons, we get into real difficulty.

It is very important that this House is as diverse as possible. It is heavily skewed towards London and the south-east. Money is not the only reason, but we should be doing whatever we can to ensure that everybody, wherever they live and whatever their circumstances, can participate.

I fully accept that the scheme is not perfect, but it is better. Nobody I have spoken to has come up with a scheme that everybody would agree is perfect. This scheme will relieve real problems for a significant number of Members who, in some cases, have been out of pocket by coming to your Lordships’ House. This is clearly not acceptable, and the scheme goes a long way towards dealing with that. From these Benches we heartily welcome it.

[Baroness Smith of Basildon (Lab)]

My Lords, I thank the Leader of the House for bringing this forward today. He has heard the mood of the House, and it is warmly welcomed. I also put on record our thanks to the chairs of the groups and the convenor. They have consulted around the House about the difficulties caused for those who travel some distance to get here and stay overnight. I am grateful to them for their efforts in putting forward a scheme.

This scheme recognises three things. First, when the rules on the initial daily payment were changed, it was not kept in line with inflation for around 10 years, meaning that it fell behind what was reasonably expected when it was set up. At the same time, the cost of hotels and other accommodation increased significantly above inflation during that period, meaning that those paying for accommodation are paying a significantly greater proportion of the daily allowance than they were when the scheme was set up.

To answer the noble Baroness, Lady Fraser, the difference between us and the Members of the House of Commons is that they are salaried employees, and we are not. We receive a daily allowance for days on which we attend and are here working. So, there is a difference in the arrangements for the two Houses.

The scheme also recognises that this is a contribution towards the costs, which fluctuate enormously; in that sense, it is fair to all colleagues. It also recognises the work of your Lordships’ House. Too often we talk about allowances in the abstract, but allowances enable Members of this House to fulfil their responsibilities. Members who have to dash off early to catch the train home because they cannot find a hotel within their price range are disadvantaged and cannot play a proper role. The bottom line is that we need to ensure that the House can do its work properly. I am grateful to the Leader of the House and to the chairs of the groups, who, as I said, have done a lot of work in producing something which is fair and reasonable for all. It has the support of these Benches.

[Lord True (Con)]

My Lords, I am grateful to the noble Baroness. In my opening remarks, I expressed gratitude to the chairs of the various groups. I should have explicitly included the convenor, but I was including the Cross-Bench group as well. Mature, sensible discussions have contributed to this.

I thank the noble Lord, Lord McConnell, for what he said. I must not go back over old times, but the reality is that the current scheme came out of what was an emergency brake on a system that was being abused. We were trekking down a road which led the other place into considerable disrepute at that time, and there was widespread agreement in the House that we should move to a simple, transparent and accountable system. With the test of time and having spoken to the noble Lord and to others, I think it was right to undertake these conversations and this review. As the noble Baroness and the noble Lord, Lord Newby, said—I am grateful to them—we have arrived at a scheme which, although not perfect, is direct, transparent and clear.

My noble friend Lord Balfe spoke of loopholes. Being an expert, he will no doubt advise the finance department if he detects any. I have written to him privately about his VAT question but, since he raised it in the Chamber, I will give him the same reply. What he suggests would not necessarily achieve the desired result because there may be commercial premises that are below the VAT threshold and therefore not registered. There are far more likely to be Airbnb operations which cross the £85,000 threshold and charge VAT. This is a complexity that may not create a clear line between different types of property. There is broader guidance about this system; it is not too complex.

With respect, I do not fully agree with my noble friend that this is how Civil Service rules work. From an initial search, this does not appear to be the case in every department. In the Cabinet Office, for example, civil servants need to go through an approved agent to secure hotels.

I return to the fundamental point: this is proportionate and clear, and it is also testable. We will have a review and if it is misused, that will be seen and the House will wish to address it.

My noble friend Lady Fraser asked why we are treated differently from the House of Commons. The noble Lord, Lord Newby, gave the answer. Being a Member of your Lordships’ House is entirely different from being a Member of the other place; their range of duties, responsibilities and offices is completely different.

My feeling, the feeling of the commission and the feeling of the Back-Bench groups was that while this may not please everybody, as I said in my opening remarks, we need to reflect on the context that we are in. There is a point at which we need to enhance participation in the House, to get more Peers being better able to come from outside London to take part. I repeat that this is a proportionate, reasonable, clear and transparent system, which will be reviewed and tested.