House of Lords (Members’ Taxation Status) Bill [HL]

No, my Lords, not ““Shame””; that is the normal behaviour of the Liberal Democrat party. I have the great advantage of never having given a penny to any political party and I have never been allowed to vote because my father died rather young, so I am totally independent. Here I come to the principal issues of the Bill. If it is a bit of fun, it is a good bit of fun. There is someone whom the noble Lord, Lord Oakeshott, mentioned last time whom we can mention under the rules here. The noble Lord said that we might, heaven forbid, even have Lord Mandelson of Mischief here. I think that the noble Lord, Lord Mandelson, would rather like that; that was suggested before anybody had contemplated that he would be a Member of this House. On a more serious note, I do not want to decimate the Bill, but I thought that the answer was that I should add a whole range of new clauses. The first problem is Clause 1, which just does not work. I have raised that before and put it in writing. It involves the question of residency. Residency in the United Kingdom means that you must now—the law has been changed—be here for no more than 91 nights. However, you can be resident in several countries at the same time; other countries have their own tax regulations. The problem is that that is not a clear-cut issue. Then we come to ordinary residency. If you have lived and worked abroad for a period and you come back to the United Kingdom, you are immediately resident if you are here for more than a certain period. You do not have to be deemed to be resident; you are effectively resident for tax purposes. Ordinary residency means that if you have been away for a period, it takes four years to become an ordinary resident. You are not an ordinary resident immediately. That causes some concern. I have raised the question of domicility before and I have looked at it again at some length. I am not an expert on this, but in my life in international banking everybody wants to mitigate tax when there are transactions. The noble Lord, Lord Oakeshott, will have found that in his investment business. You seek to find the best opportunity if you are buying or selling businesses or investing to get tax clawbacks, government grants or capital allowances. Taxation is a weapon of trade. I remind noble Lords that I am president of the Anglo-Swiss Society. We found in discussions with the Swiss that we wanted to co-operate on taxation. You wish to attract people to a tax-friendly—but not tax-free—environment. Our legal and accountancy systems in the UK are perhaps the most trusted in the world; that is a plus. People would like to be here for that reason, but not necessarily for that reason alone. Domicility raises an interesting scenario. At birth, you take the domicile of your father. You therefore have that domicile for life or until you wish to change it, which you can do at the age of 16. When you change your domicile of origin, as it is called, you have to do certain things. You must cut off all links with your former country, you must resign from your clubs and sell all your assets, and you must do that, effectively, for life. In your Lordships’ House and in many parts of this country, there are people who have come in from abroad who had foreign domicility to begin with. Why should they be penalised for such activities? Under the new rules, someone has introduced the horrendous phrase ““non-doms””. Some people thought that that meant that we were getting rid of domestic servants. We have to accept that if you have been in the United Kingdom for 17 out of the past 20 years, under the new regulation you will be deemed to be domiciled. However, you have the problem of your domicility in other countries, which can cause concern not just in relation to taxation but in all sorts of human relationships. If you change your domicile and become domiciled here or are forced to be domiciled here, you effectively cut off your ties with your mother country. At any time, you have the right, under current law, to resile that domicility of choice and go back to your original country. I am a Scot and if we split up, I would be domiciled in Scotland, where I have a pretty serious opportunity. If you also have a place to bury yourself, as the noble Lord, Lord Desai, made clear at Second Reading, you are domiciled where that is. In Scotland, that is call a lair certificate—you receive a letter when you reach 50, which is the age at which you are expected to die, saying that the authorities hand that over to you. Normally a Scot has paid for the plot a long time ago and paid a maintenance fee for life, so you cannot be got at by the vicar to pay an extra amount. This means that you have a territory. Just before this debate I went to the first floor to get advice on your Lordships. If a noble Lord takes a title and becomes an ““of””, does he have a territory that could be related to having a grave? He has a designated territory. Let us take the noble Lord, Lord Oakeshott, who is ““of Seagrove Bay””. After his title, the record states ““of Seagrove Bay, of Seagrove Bay in the County of the Isle of Wight””. The comma is very important. Therefore, he has a territory, which, if I were standing in the European Court of Human Rights, would mean that he is domiciled in Seagrove Bay. It is a question of where the comma comes. Commas are very important. In some countries a comma means a full stop, particularly for money. This whole domicile business is extremely worrying. I assume that the noble Lord, Lord Oakeshott, is putting this Bill forward purely for political reasons; but within it are some interesting points, which is why I should like to extend it. I believe that anyone in this country who is in Parliament or who is elected, who holds a public appointment or a job for which they are paid, should have that fully disclosed and have it disclosed that tax is paid on that. Over the years, I have asked Questions on whether the Government—not this one—would provide a list of what public appointments are held by Members of Parliament and what is their remuneration. Most people thought that that was a political issue. I wanted to demonstrate that the breadth of knowledge of your Lordships’ House was even greater because of the external appointments that Members held; but people are so concerned about party political sniping that it becomes worrying. On a previous Bill, when I banged on ad nauseam at Second Reading, which was an unpleasant experience for me because I do not like doing that sort of thing, I drew attention to the problems that would come to the economy when international confidence went. I forecasted that the pound would go down and that foreigners would leave. A significant proportion in the fall in the value of sterling is because of that. People do not have confidence anymore that the United Kingdom is a stable place in which to live and work from a tax and other points of view. I welcome the noble Lord, Lord Oakeshott, for having shown the clemency and understanding that he would not name and shame people. But also he should know that within your Lordships' House there may be, because of people who have come from the Commonwealth and elsewhere, many more foreign domiciles who would like to remain as such. As Her Majesty is Queen of many Commonwealth countries, we cannot look at this issue in isolation. We may come to the view that if people cannot become Members of this House because they are foreign nationals they may change their nationality. Does that forbid them from being Members? It is a complex issue, which is worthy of debate. I have enjoyed, so far, the prejudice of the noble Lord, Lord Lea, and I am sure that we will have prejudice later. Perhaps I may point out that my noble friends Lord Trefgarne and Lord Astor, and I, together have more years of service than all those sitting on the Liberal Benches today. My noble friend Lord Trefgarne is younger than me but has been here longer. I hope that the wisdom of my colleagues will prevail and that the Liberal party sitting there with some three-line Whip on ““Thank God it’s Friday””—