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

My Lords, I have resisted with some reluctance the temptation to move a resolution that the noble Lord, Lord Selsdon, be no longer heard. I may come back to that if, when we get to Committee stage, he speaks for as long as he did on the previous occasion. Since the end of 1999, when the House of Lords Act came into force, all Members of your Lordships’ House have been here by choice, either by accepting a life peerage, by standing for election as an elected hereditary Peer or by accepting an appointment, such as that of a Law Lord or a Bishop, which carries with it the right to sit as a Member of your Lordships' House. Life peerages are no longer awarded, at least in principle, as honours for past services. They are awarded, or should be, in the expectation that the donee of the peerage will play his or her proper part as a Member of your Lordships' House. Membership of the legislature or one of the Houses of the legislature should involve personal commitment to this country. For Members of your Lordships' House, that commitment should include willingness to be liable to pay taxes on the same basis as the great majority of citizens of this country and the great majority of Members of your Lordships' House who are resident, ordinarily resident and domiciled in the United Kingdom. Those who limit their time in the United Kingdom to 90 or 91 days a year to preserve their non-resident status will be insufficiently frequent in attendance and insufficiently in touch with what is happening in this country to justify their membership of your Lordships' House. As I explained in the Committee stage of the predecessor of this Bill, I was a ““non-dom”” until 1968. Non-doms are in a very favourable position because, even if they are resident in the United Kingdom, they are taxable only on income from a source in the United Kingdom or that is remitted from abroad to the United Kingdom. There is no tax on capital remittances, so it is easy for someone who is non-domiciled to avoid a great proportion of income tax by ensuring that, even if they are living a high life in this country, they are doing that out of capital remittances. Domicile is a complicated issue. Broadly, you are domiciled in the United Kingdom if that was your domicile of origin and you have not taken up permanent residence in another country or if you have a domicile of origin elsewhere and have taken up permanent residence in the United Kingdom. The question of whether residence anywhere is to be regarded as permanent is notably subjective because it depends not on the present position but on an individual’s intentions. An individual may be able to say, ““Oh, I do not intend to live permanently in the United Kingdom””, knowing perfectly well that in all probability he or she will. Those who have surrendered domicile in the United Kingdom, or who are resident in the UK as non-doms, because they have not committed themselves to personal residence, do not have sufficient commitment to the United Kingdom to justify membership of your Lordships' House. I suspect that very few Members of your Lordships' House are not resident and domiciled in the United Kingdom and that they pay their tax accordingly. But those Members who are non-resident or non-domiciled include some people—I will not name any names—of great wealth who have accepted the prestige of a title, without accepting the liability to pay United Kingdom taxes or any obligation to attend your Lordships' House. They have no intention of taking an active part here when they accept their peerage. They should not be among us. This is a good Bill, which may benefit from some amendment. In the debates on the predecessor Bill in the last Session I moved an amendment to exempt people who have undertaken temporary public service abroad. That would include the notable cases of my noble friend Lord Ashdown who, so to speak, was the Viceroy of Bosnia-Herzegovina, and the noble Lord, Lord Robertson, when he was Secretary-General of NATO. It seems perfectly fair that people who are non-resident because they are performing an important public service should be exempt from the Bill. But these are only minor improvements that would affect a small number of people. This is a good Bill, and whether or not it is likely to get through the other place, I hope very much that your Lordships will see fit to give it a passage through this House.