House of Lords (members taxation status Bill)

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Lord Oakeshott of Seagrove Bay introduced a Private Members Bill to the House of Lords about the taxation status of Members of the House of Lords.

Private Members Bills rarely become law but give backbenchers in both Houses of Parliament the opportunity to raise issues they feel strongly about. The Bill had its first reading in the Lords on February 27 2008, and was read a second time on March 14 2008. It was read to the Commons on April 24 2008.

Contents 1 What the Bill does 1.1 Third Reading 1.2 Objections 1.3 Government Position

What the Bill does

The Bill seeks to clarify that a Member of the House of Lords is only deemed to be fully resident in Britain if they are domiciled in no other country for tax purposes. The Bill includes a provision stating that no person shall become a member of the House of Lords who is not resident and domiciled in the UK and no other country for taxation purposes.

Third Reading

Lord Oakeshott of Seagrove Bay (Liberal Democrats) said: ‘this is a short Bill and a short speech. It is simple; if you sit in the British Parliament and vote on laws for the British people, you must pay full British taxes on all your income like the vast majority of your fellow citizens.

‘You must not hide income or assets offshore behind a veil marked “non-resident” or “non-domiciled” for tax purposes. If you accept a peerage from the Queen for life, you must not sign a tax return saying that you do not intend to stay permanently in this country, as non-domiciles do.

‘If, like the noble Lord, Lord Laidlaw, you give cast-iron undertakings to the House of Lords Appointments Commission that you will immediately become resident for tax purposes in this country in order to get a peerage, and then flagrantly dishonour them, you have simply obtained a peerage under false pretences. Even if you eventually take leave of absence, as this gentleman has, the stain remains on this House because you can still change your mind and pop over from Monte Carlo to pick up your peerage again any time you fancy.’

Objections

Viscount Astor’s opposition to the bill was made apparent in the third reading: ‘The Bill excludes anyone who lives in the Channel Islands or the Isle of Man, as I do not think for tax purposes that they count as being resident or domiciled in the United Kingdom, although there seems to be no reason why, if you live there, you should not be able to serve in this House. Many people have done so in the past.’

'If you take this theory even further, we must ask what about civil servants? Are they going to be asked to be resident and domiciled in this country before they accept the Government’s money? What about all those who sit on government quangos and accept the Crown’s payment for doing so. It seems that we go down a dangerous route.’

Lord Strathclyde, leader of the Conservative party in the Lords, had earlier voiced support for the bill, accused Lord Oakeshott of being "swift to jump on a bandwagon".

He said the Tories would not support the bill but rather back a government measure dealing with the issue, or a separate Commons bill that is being piloted by the Labour backbencher Gordon Prentice, and which would be "less draconian". The Liberal Democrat sponsoring the Bill, Lord Oakeshott of Seagrove Bay, said: ‘This is an amazing U-turn. The only explanation I can give is that when they looked at the small print they realised that Lord Ashcroft could be caught.’

The Parliamentary bill could exclude the multimillionaire Conservative donor Lord Ashcroft from the Lords and is likely to fail after Labour and the Conservatives joined forces to reject the measure. Lord Strathclyde did not indicate whether or not Lord Ashcroft would be affected. "Every political donation he has made has been found to be in accordance with the law," he told peers. Lord Oakeshott said he was disappointed that Lord Strathclyde was not backing his bill. "My bill is not a publicity stunt. It is a serious bill with substantial support to stop behaviour which besmirches our house."

Government Position

The government has indicated that it could not support the Parliamentary Bill proposed by Lord Oakeshott and was more interested in the Prentice bill. Lord Hunt, the legal aid minister, said: "We support the 'no representation without taxation' principle; we support the intentions behind the bill, and would not seek to oppose the bill's progress in the Lords because it is not appropriate for the government so to do.