McNally on the Lords: “it must not just be for the rich, the retired and the London-based”

The report of the Senior Salaries Review Body was being debated in the House of Lords on Monday – and Lord (Tom) McNally was there to put forward the Lib Dem view that, whatever and however peers are paid, the second chamber becomes a place which is open to those of all backgrounds, income and geography.

The Lib Dems in the Lords submitted evidence to the SSRB which recommended replacing the attendance allowances and all office costs with a single taxable daily rate with a specific receipted overnight allowance. The SSRB recommended reforms to expenses which would see the introduction of a £200 daily allowance and £140 overnight receipted expense while the Lords is sitting.

Here’s Lord McNally’s speech to the Lords in full:

My Lords,
I am not a paid office holder; but I do claim expenses under the existing scheme and those for 2008/2009 were, along with those of other noble lords, published last Thursday.

During the last five years I have been a member of the Leaders Group, the Procedure Committee and the House Committee – the main committees responsible to this house both for allowances and for conduct. Over the last few months, as we have had to deal with the various challenges to the reputation of this House I have asked myself many times whether we who were charged with these responsibilities could and should have acted sooner and with a greater sense of urgency to avert some of the troubles which have beset us. In the matter of conduct I think not.

On the issues raised by the Sunday Times “sting” we acted decisively and even took on the views of the Attorney General to assert our right to discipline wayward members. We acted quickly to appoint the Eames Committee which moved with commendable speed to report. Our acceptance of that Report does, in my view, put matters of conduct and discipline on a clear and transparent basis.

I am less sure that we can claim the same about the handling of expenses and allowances. The truth is that the system we are in the process of replacing is, to put it at its kindest, “cheap and cheerful”. Its’ main benefit was that it allowed members of modest means to participate fully in the work of this House and also allowed for a greater geographic spread of participation. In short it prevented the House of Lords becoming the preserve of the rich, the retired and the London based.

Whatever any strict interpretation of the rules may have said members were encouraged by nods and winks to assume that they could claim beyond re-imbursement for outgoings and expenditure to provide a little padding.

Such rough justice worked well in encouraging men and women in their forties and fifties to accept working peerages in spite of the fact that such acceptance involved loss of career and salary advancement within their profession as well as a large measure of pension contribution and entitlement.

Because that rough justice worked, because it provided a very effective and value for money return to the taxpayer, because it was not bureaucratic and cost little to administer, perhaps we lost sight of the change in public mood to such arrangements.

As the SSRB Report bluntly put it, our existing systems “lack precision, transparency and rigour and do not meet current standards for control of public money.” Or as the Lord Speaker put it in her excellent Hansard Society Lecture of last Thursday which I recommend every noble Lord to read: “Having failed to provide any clarity over what has constituted reimbursement for actual expenses and what was allowances, and having been regulated with the lightest touch, the system was an accident waiting to happen, and happen the accident did.”

Whether those of us charged with responsibilities in these matters could and should have acted earlier is a judgement easier to make with hindsight.

In June of this year we did act, as the Chairman of Committees has explained, by referring the matter to the SSRB.

My own Group, the Liberal Democrat Group in the Lords, submitted joint evidence to the SSRB which recommended replacing the attendance allowance, office costs and the forty day additional office costs by a single taxable daily rate for the job. Our evidence also called for a specific and receipted overnight allowance. These changes, we argued would involve “a significant switch in resources used presently for accommodation needs to general financial support.”

That being the thrust of our evidence and the outcome of the SSRB deliberations, I hope that my colleagues on these benches will support what the House Committee has called “the architecture and principles” of the system proposed in the SSRB Report. The House Committee also recommends that an ad hoc group of backbench members “consider and consult on issues in the report and advise on their implementation.”

I support that way of going forward. But, my Lords, it would be disastrous if we were to allow it to be thought that the setting up of this committee offered any wriggle room on the main recommendations of the report: namely the £200 daily allowance and the £140 overnight receipted expense. Those are the immovable iron poles of the architecture and voting for this resolution today means accepting those figures.

What I hope the ad hoc committee can and should do is look at some of the recommendations on overnight expenses so that they are fair and realistic not only to hotel and club dwellers; but to renters and owner-occupiers as well. I hope they will look also at guidance on travel both for long distance out-of-towners and middle distance commuters. Some of both the wording used and implementation bureaucracy suggested by the SSRB would be more suitable for tagged prisoners on day release than for members of the House of Parliament.

In the excellent Hansard Lecture, to which I have already referred, the Lords Speaker quoted President Obama’s Chief of Staff Rahm Emmanuel who advised against “letting a serious crisis go to waste.”

This is good advice. The ad hoc committee should be bold in looking at how, whilst accepting the broad architecture of the SSRB
Report, we use the collective wisdom of this House to make sure we have the accountability and public acceptability which I think acceptance of the SSRB report will bring. At the same time we must not burden the public purse with a bureaucracy whose costs will outweigh any notional savings and which will not reflect the realities of life for an active working peer.

My Lords, retaining and enhancing the reputation of this House is a three legged stool.

The first leg is the Eames Report, which, as I have said, offers a clear basis of truth and consequences in terms of conduct in this House.

The second leg is our response today to the SSRB Report. Our message today must be that we accept this Report and we are determined to make it work.

The third leg is equally important if the other two are to stand. I do not believe public patience with this House will long remain if notional membership of the House is bloated to over 800 without as a very minimum the modest proposals suggested by my Noble Friend Lord Steel do not make their way into law. The Constitutional Reform Bill seems to be dawdling suspiciously long in the Commons. Unless the provisions relating to this House can be enacted before the General Election any notional saving to the public purse will be swallowed up by the cost of new creations who are bound to be regular attenders. I accept that fundamental reform of this House is for another day and another Parliament. But we must do what we can in the time remaining in this Parliament to tidy up what we can if we are to avoid further public outrage and contempt.

My Lords I think I have said before that it is now some forty-three years since I first entered this Palace seeking my first political job. I did so with a sense of awe for what it is, and what it stands for. My predecessor on these benches, Roy Jenkins, once likened public trust to carrying a very valuable glass vase across a highly polished floor. It is our turn to do the carrying. Voting for this motion tonight will be one step in ensuring that we do not slip.

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