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

My Lords, as I have said, we think that the £30,000 annual charge is a reasonable basis on which to achieve the kind of balance that I have just described. I shall come on to the definition of domicile. I have to say to the noble Lord, Lord Selsdon, that the 17 out of 20 years rule applies only to inheritance tax, because the proposal to extend the rule to all tax categories was rejected after public consultation. I suspect that we will have a very enjoyable canter on taxation rules in Committee. I come to the question of deeming, which is also a matter of interest and concern. I have referred in brief already to the question of the 17 out of the last 20 years. Clearly in our consultation the Government gave great consideration to that. But in the light of the consultation’s consideration and its rejection, one would have to think very carefully about reopening the question so soon. In addition, I have to say to the noble Lord, Lord Oakeshott, as I said last time, that we are concerned with the proposal to deem Members of the House to be domiciled tax-resident and ordinary tax-resident in no country other than the UK. Taken together with the Bill’s amendments to the Income and Corporation Taxes Act 1988, the provision would override the double taxation treaties. The Government have made it clear that we cannot ride those treaties unilaterally. Amending them by bilateral agreement is unlikely to be a practical suggestion, since this Parliament has no jurisdiction over how other countries define individuals as resident or non-resident for tax purposes. That indicates that, whatever the principle behind the Bill, it is not a simple matter of simply passing it without giving due consideration to all these difficult matters. On the question of Peers who work abroad, the noble Lord, Lord Goodhart, made a very pertinent point in the last debate and today’s debate as well. I hope that there will always be cases of Members of this House working abroad, sometimes for long periods of time, in high-profile international organisations. Long may that continue and long may they then be able to come back to your Lordships' House. We have seen in our debates on foreign affairs the huge advantage that that brings to your Lordships' House. We would have to be very careful about that. Aside from the technicalities of all these matters, it is worth bearing in mind two points. First, the House of Lords Appointments Commission has informed the Prime Minister that, as from June 2007, nominees need to be resident in the UK for tax purposes before the commission will consider their nomination. I understand that that policy covers both political and non-political candidates. I also understand that it has been reaffirmed by the noble Lord, Lord Jay of Ewelme, who has taken over the chairmanship of that commission. As the noble Lord, Lord Teverson, suggested, one needs to place this Bill in the wider context of Lords reform. As I have said, we referred to and dealt with the matter of tax status in the White Paper on Lords reform, proposing that all Members would need to be resident in the UK for tax purposes. The noble Viscount, Lord Astor, quoted from the White Paper, and my noble friend Lord Lipsey felt that the morning glory of that White Paper had gone. I do not know whether the noble Lord, Lord Strathclyde, or I ever felt that it felt like morning glory. The morning may have gone, but there are still elements of glory in that remarkable document. This matter is much better dealt with in the context of comprehensive reform of your Lordships' House. I very much agree with the noble Lord, Lord Trefgarne, on that matter. We have set out those proposals. I totally disagree with my good and noble friend Lord Lipsey on his analysis that Lords reform might be many years to come. I remain confident that it is entirely possible, based on the consensus reached between the political parties in the White Paper, and following the next general election. That is surely the best way in which to deal with this important matter.