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

In preparation for my noble friend’s amendment, I printed a copy of an HM Treasury document, Reviewing the Residence and Domicile Rules as they Affect the Taxation of Individuals: A Background Paper. It is certainly a worthy document that gives a lot of background information. What is interesting is what it has to say on the historical perspective: ""The current rules on residence and domicile can be traced back to the introduction of income tax in 1799 to meet the cost of the Napoleonic wars. The regime has changed little since its introduction"." In 1799, before the noble Lord, Lord Oakeshott, could accuse us of trying to avoid paying tax, we were trapping furs up the Hudson river. Indeed, I am not sure that my family knew that the Napoleonic wars were going on. What this shows is that the rules have been around for a long time and that the noble Lord, Lord Oakeshott, wishes to make some important changes. He intervened on my noble friend to say that citizenship has nothing to do with this issue. I have before me the so-called White Paper published by the Government, although it can be regarded more as a Green Paper because it sets out a menu of options. On nationality requirements, it states that the Government’s view is that, ""there is no case for changing the current nationality and citizenship requirements for membership of the second chamber in advance of any wider changes in this area"." That seems clear enough. Indeed, I am not entirely clear about the nationality requirements for this Chamber at the moment. No doubt the Minister can enlighten your Lordships. However, the important thing about this White Paper, one that I believe was endorsed by my noble friend on the Front Bench, is that the Government propose that, ""in the absence of any other changes to nationality requirements for membership of the legislature, British citizens and qualifying citizens of the Commonwealth (including citizens of British Overseas Territories) and citizens of the Republic of Ireland would be eligible for membership of a reformed second chamber"." That is a clear statement by the Government that they want to encourage people living in the overseas territories, the list of which is included in my noble friend’s amendment, to come and attend this House should they be picked by the Appointments Commission. I think that the commission said, and the Government agreed, that it would look only at possible candidates for your Lordships’ House who agreed to be resident in this country. That is fair enough because, if you are resident in this country, you pay English taxes. However, the noble Lord’s Bill does not just include residents; it covers residents and domiciles. My question is this, and it is as much for the noble Lord, Lord Hunt, on the government Front Bench as it is for the noble Lord, Lord Oakeshott: did he expect, when he wrote this, a candidate from a British Overseas Territory appointed to your Lordships’ House automatically to change his domicile as well as his residence? The noble Lord will be aware that you can be resident in more than one country, but you can be domiciled in only one. Given that, the amendment moved by my noble friend Lord Selsdon is very apt. It seeks to ask the Government what they mean in their statement about including the citizens of British Overseas Territories as possible candidates for membership of this House. In fact, they have gone further than my noble friend because I do not think that he has included citizens of the Republic of Ireland, whom the Government seem to want to include. Of course, if you are a citizen of the Republic of Ireland and you move to this country, you have an automatic right to vote here. What I do not know is whether the Government, in considering someone for inclusion in this House, would ask them to move their domicile from the Republic of Ireland to this country. It is an interesting area and my noble friend has brought up an important subject. Perhaps I may say one thing to the noble Lord, Lord Oakeshott. In the debate on Second Reading, I made it entirely clear that I was in favour of any Member of your Lordships’ House who is resident in this country paying all their taxes. However, following that, I took my wife on holiday—sadly, not to a tax haven, but to somewhere quite expensive. I suddenly received a call and was told that the noble Lord, Lord Oakeshott, was quoted in the Daily Telegraph. I do not know whether the quote was right, but it said that I was in favour of Members of your Lordships’ House sitting in this Chamber not paying tax. That is not true. It is ridiculous. It is rather like saying that, if a noble Lord on the Liberal Benches introduced a crime Bill and one opposed the details of the Bill, one could be accused of being in favour of crime, which is not the case. I want to make it clear to the noble Lord, Lord Oakeshott, who I am sure was misquoted even by such an important and well regarded newspaper as the Daily Telegraph, that I and, I think, all my noble friends on these Benches who attend your Lordships’ House are in favour of paying their taxes. That does not mean that we necessarily agree with everything in the noble Lord’s Bill.