Lords' Expenses

HL Deb 20 July 1994 vol 557 cc240-52

3.21 p.m.

Viscount Ullswater

My Lords, on behalf of my noble friend, I beg to move the second Motion standing in his name on the Order Paper. It may be for the convenience of the House if, in moving this Motion, I speak also to the three other Motions standing in his name relating to Lords' expenses. I can only apologise to the House for the apparent complexity of these Motions. Their purpose is as set out in the answer my noble friend gave to a Written Question from the noble Lord, Lord Bruce of Donington, last Wednesday. It may, however, assist the House if I were briefly to clarify the effect of the Motions before the House today.

As your Lordships will be only too aware, the usual uprating of your Lordships' expenses, which is due at the beginning of August each year, did not take place last summer. I know that that has caused your Lordships some disquiet, for which I can only express my regret. The reason for the delay is that the basis on which your Lordships' expenses have been uprated since 1984, by reference to increases in corresponding Civil Service subsistence rates, and in respect of the secretarial allowance by reference to changes in Civil Service secretarial pay, no longer holds good. The Civil Service no longer promulgates central subsistence rates, which have been delegated to individual departments. And a new system for secretarial pay has been introduced.

The Government have therefore been investigating proposals as to how the subsistence rates applicable to your Lordships should in future be uprated. The conclusion we have reached is that upratings should in future be determined by reference to the retail prices index. I believe that this offers the most practical and convenient mechanism for the future, which preserves the value of the allowances without changing their nature (and which, importantly, preserves the existing tax position of the allowances).

For the future, the allowances will be uprated from 1st August by reference to the RPI in July. This means that at the end of this month the subsistence allowances will be further increased by the RPI index for this month. That will be in addition to the increases in the three Lords' allowances, up to an aggregated maximum rate of £2 per day, which your Lordships will be entitled to recover backdated to 1st August 1993.

I should also point out one small change in the eligibility for claiming expenses. This concerns those Members of the House who attend the boards of the Parliamentary Office of Science and Technology and of the Parliamentary Broadcasting Unit Limited. As Members of the House are appointed to these bodies by the Committee of Selection, and as the bodies themselves are very much parliamentary in their character, it seemed to the Government that Peers who attended meetings of the board should be eligible for expenses in the same way as if they had attended a committee of the House. I trust your Lordships will look on that small change favourably.

The second Motion concerns the London allowance for office holders. This Motion follows the Motion which was agreed to in another place last week and is necessitated due to the replacement of the London allowance in the Civil Service by a recruitment and retention allowance.

The third Motion uprates the motor mileage allowance in accordance with the proposals which were agreed to by the other place last week. This Motion maintains the single rate allowance applicable to your Lordships, to which the House agreed in 1984. Again, this Motion is required because the schedule of motoring costs by which parliamentary motor mileage allowances were calculated is no longer available in a form which can be operated within the terms of the resolution.

Finally, the fourth Motion corrects an anomaly in the eligibility to claim expenses incurred in respect of a recall of Parliament during a Recess. The effect of the Motion, which again is similar to a Motion agreed to in another place, is to enable those of your Lordships who are abroad and who wish to attend the House in the event of a recall during the Recess to reclaim any necessary extra costs as may be incurred in respect of travelling back to London, together with the return journey. Ministers are currently able to recover such expenses from their departments, and this Motion will place other Members of the House on a similar footing. Lest there be any doubt about this, let me add that there are. no plans for such a recall! I hope that all this is sufficiently clear.

Moved, That this House approves the following proposals with respect to expenses incurred by Members of this House after 31st July 1993—

(1) The limit on the expenses incurred in a year which a Lord may recover under paragraph (1) (d) of the Resolution of 22nd July 1980 (office, secretarial and research allowance) should be the amount obtained by multiplying—

1. (a) the number of days of attendance by him in that year at relevant sittings or relevant meetings, by
2. (b) the appropriate amount for expenses incurred in that year;

but this paragraph is subject to paragraph (4).

(2) In paragraph (1)— relevant sitting" means a sitting of this House or of a Committee of this House, other than a judicial sitting; and relevant meeting" means a meeting of the Board of the Parliamentary Office of Science and Technology or the Parliamentary Broadcasting Unit Limited.

(3) For the purposes of paragraph (1)—

1. (a) the appropriate amount for expenses incurred in the year beginning with 1st August 1993 should be £30–50; and
2. (b) the appropriate amount for expenses incurred in any subsequent year should be the amount obtained by increasing the appropriate amount for expenses incurred in the immediately preceding year by the relevant percentage for that subsequent year.

(4) In calculating the limit under paragraph (1) for any year there should, if a Lord so requires, be added to the number of days of attendance by him in that year such number of days in that year on which this House does not sit as are specified by him, but subject to a maximum of thirty days.

(5) The limit on the expenses which a Lord may recover under paragraph (3) of the Resolution of 22nd July 1980 (office holders' secretarial allowance)—

1. (a) for expenses incurred in the year beginning with 1st August 1993, should be £3,684; and
2. (b) for expenses incurred in any subsequent year, should be the amount obtained by increasing the limit for expenses incurred in the immediately preceding year by the relevant percentage for that subsequent year.

(6) The references in the Resolution of 25th July 1991 (day and night subsistence) to a sitting of this House or of a Committee of this House should include references to a meeting of the Board of the Parliamentary Office of Science and Technology or the Parliamentary Broadcasting Unit Limited.

(7) In determining, in accordance with paragraph (2) of the Resolution of 25th July 1991, the limit on the expenses which a Lord may recover under paragraph (1) (a) of that Resolution (day subsistence), the maximum daily amount—

1. (a) for a day in the year beginning with 1st August 1993, should be £31.50; and
2. (b) for a day in any subsequent year, should be the amount obtained by increasing the maximum daily amount for a day in the immediately preceding year by the relevant percentage for that subsequent year.

(8) In determining, in accordance with paragraph (4) of the Resolution of 25th July 1991, the limit on the expenses which a Lord may recover under paragraph (1) (b) of that Resolution (night subsistence), the maximum daily amount—

1. (a) for a day in the year beginning with 1st August 1993, should be £70; and
2. (b) for a day in any subsequent year, should be the amount obtained by increasing the maximum daily amount for a day in the immediately preceding year by the relevant percentage for that subsequent year.

(9) In this Resolution "year" means a year beginning with 1st August, and for the purposes of this Resolution—

1. (a) the relevant percentage for any year is the percentage by which the retail prices index for July in the immediately preceding year has increased compared with the retail prices index for the previous July;
2. (b) any amount obtained under paragraph (3) (b), (7) (b) or (8) (b) should be calculated to the nearest multiple of fifty pence; and
3. (c) any amount obtained under paragraph (5) (b) should be calculated to the nearest pound.

(10) The references in paragraph (9) (a) to the retail prices index are references to the general index of retail prices (for all items) published by the Cental Statistical Office; but if that index is not published for a month which is relevant for the purposes of this Resolution, those references in that paragraph shall be construed as references to any index or index figure published in place of that index.—(Viscount Ullswater.)

Lord Dean of Beswick

My Lords, the Minister will not be surprised to see that I have risen to speak on this subject. I fully agree with him, as will other Members of the House, that this is a long and complicated Motion. I shall restrict my remarks to three items which I would say cover Back Benchers in your Lordships' House.

I express my thanks to the noble Lord, Lord Wakeham, who, unfortunately, is no longer with us in his former capacity, for spending time yesterday discussing some of the intricacies of the report. The overnight allowance has risen from £69 to £70. That is not adequate. I rent a flat in London in order to carry out my duties here and I do not think that an increase of £1 is adequate. I am told that these rises have been determined by the Treasury and not by any independent adjudication body. The daily subsistence allowance rises from £31 to £31.50. Members of your Lordships' House who come in to make the place work—and the House is working harder now than when these allowances were first introduced—take three meals a day here. In addition they have other refreshments. They are also expected to pay their postage out of the allowance. They are expected to use some of it for telephone calls made outside the House. Worst of all, they are expected to pay for taxis from the £31.50, after paying for their meals and sustenance for the day.

I think noble Lords will agree with me that it is absolute nonsense. It is almost essential at night, with the hours we are sitting, that noble Lords go home from here by taxi. A number of Members of your Lordships' House and members of staff working here and in another place have been mugged on the way home. Going home by Tube from this House late at night is not the most pleasant experience. People are seriously at risk. A couple of years ago I was on a train travelling only from Victoria to Pimlico, where I live. I have never been on a train late at night since then. A gang was "steaming" through it from the back mugging everybody, taking rings and wristwatches from people. As I was only going the one stop and I was at the front of the train, I got off before the gang reached me. That is the scenario. The payment of £31.50 to Peers who are attending here in order to make the place work needs to be looked at again.

The secretarial allowance goes up by 50p to £30.50p. When this allowance was first awarded it was to cover 18 days a year. Due to the efforts of the noble Lord, Lord Wakeham, that was increased to cover 30 days a year. I still believe that the secretarial allowance for 30 days a year, when we sit four days a week for over 30 weeks a year, is grossly inadequate. I do not think the rate of payment is sufficient to pay for reasonable hours of work from a secretary. The question of the number of days ought to be looked at.

As I said at the commencement of my remarks a few moments ago, I understand that these proposals are the brainchild of the Treasury. As the noble Lord said in his very detailed explanation of what is before us, the difficulty is that we used to be linked to a grade of civil servant which is no longer applicable. The proposal now before us is that we are now linked to the retail prices index. But if the base is too low now there is an inbuilt deficiency, and an increase related to the retail prices index will not make up the difference. I do not want to follow another place in voting themselves sums of money. That is not the right way to go about it. We are entitled to an independent adjudication for the changes which we shall have to live with in the foreseeable future and I do not believe that that should be undertaken by the Treasury.

Perhaps I may make a constructive suggestion to the Minister. Would it not be better, through the usual channels, to refer the matter back to the Top Salaries Review Body in order to return next year with some proposals which will at least protect the position for us in future? I hope that that suggestion meets with some approval. I do not want to delay anything. What the Minister has said is very welcome at this time; but the danger lies in the future and not today.

3.30 p.m.

Lord Boyd-Carpenter

My Lords, we are indebted to the noble Lord opposite for what he has just said because this is a matter which concerns a great many of your Lordships.

I am sure that the House is indebted to my noble friend and his colleagues for the care with which they have outlined these proposals, even though the increases in remuneration which they provide are modest on the whole. I rise to raise one particular point with which they do not deal and which I hope may be dealt with in future— that is to say, the cost of postage. I believe that many of your Lordships find, as I do, that one gets a great deal of mail from outside institutions, organisations, public relations firms and pressure groups of one sort or another, all of whom expect a reply. The cost of postage for these replies is quite substantial. In another place they have free postage, and any correspondence that comes there can be answered without having to pay for the stamp; whereas our replies, even if one is prepared to use second class stamps—which some organisations regard as slightly offensive—incur still quite a substantial cost.

I hope that this matter will be looked at carefully. It is a little illogical that if your Lordships desire to respond by telephone to representations made to them they generally get a free telephone service; but if noble Lords desire to reply more formally—and, from a practical point of view, perhaps more wisely—by letter, then they have to pay the current very high rates of postage.

I do not believe that we could propose an amendment to these particular proposals at this stage; but I hope that the various organisations which go into these matters such as the usual channels or the Rippon committee, or whatever it may be, will look at the question of postage— and, if necessary, take evidence from those of us who have a great deal of correspondence—and consider bringing forward some recommendations in respect of postage in the near future.

Lord Avebury

My Lords, I should like to reinforce what the noble Lord, Lord Boyd-Carpenter, has said. At some point in the past, I tried to get something done about postage. I have written to the authorities in the House; and I believe that at my instigation the question of postage was put on the agenda at one time. The committee which looked into this matter decided that it was not a good idea to have free postage at this end of the corridor as there is in another place.

There is an additional factor which reinforces the plea which has been made by the noble Lord, Lord Boyd-Carpenter. The more work that one does in this House, the greater the cost of postage. In no way is any part of the allowance paid to your Lordships performance-related. This is one way in which it could be made to be so. The proposal which I made several years ago was to work out the average amount that a noble Lord spends on postage and then to reduce the secretarial allowance by that amount. Then there is free postage. The noble Lord, Lord Boyd-Carpenter, makes interventions on a great many different subjects and receives a large postbag which he feels duty bound to reply to. I respect the noble Lord for that. Why should he be "in the red" because he has so many varied interests and takes such an active role in your Lordships' proceedings whereas some other noble Lord simply "clocks in", receives the allowance and does not receive any letters because he does not speak and therefore whatever element of the allowance is attributed to postage is for nothing? That is grossly unfair.

I cannot see that the Treasury can possibly have any objection if there was no net addition to the bulk allowance paid to your Lordships for secretarial purposes. If that amount remained the same and was redistributed in favour of those who received a large postbag, then I am sure that the Treasury would be happy, and those who face a large postbag would have some recompense for the work that they do.

While I am on my feet, perhaps I may say that the alternative of the telephone is only available to those who have an office in this building, and there are many of us who do not.

Noble Lords

No!

Lord Avebury

My Lords, noble Lords say no; but if one wants to make a confidential telephone call to someone who has intervened with you on a matter, it is not very satisfactory to do so in the corridor, as we are obliged to do. Many of us have been in this House for years and years. I have been in this House for 20 years and I have not got a desk yet, whereas in another place, being in the Whips' Office, I was fortunate enough to be equipped with proper office facilities from the word go. I do feel the contrast. For that reason, very largely I work from an office in my own home and I incur all the telephone costs which, in some cases, may be an alternative to answering by letter. There are also fax charges, which can be sent free from downstairs in this building. However, if I am not on the premises and am working in my office at home, that means I have to spend money on the telephone and also incur fax costs.

The third point I wish to raise is on the opposite side. Do not noble Lords believe that the motoring allowance of 44p per mile is excessive? I know, as the noble Lord explained, that this is not something which we decided for ourselves but copied from another place. I believe that the other place is being extraordinarily greedy—and we are, too. The average cost of running a motor car could not possibly amount to as much as 14p per mile unless one has a Rolls-Royce. I know that there are one or two of those in the car park here. But those who are rich enough to afford a Rolls-Royce do not need the 44p. It is all very well for the noble Lord to wave his hand—he may well have a Rolls-Royce; I do not know. I am asking for this matter to be included in the reconsideration of our allowances for which the noble Lord, Lord Dean of Beswick, has asked. I hope that this matter can be considered at the same time.

Lord Taylor of Gryfe

My Lords, I appreciate what has been done by the committee. During the committee's proceedings I took the trouble to submit certain details. I sought to ascertain the average cost of staying in a hotel fairly near to the House. I can advise your Lordships that the allowance of £70 per night, which is an increase of £1 on our overnight allowance, hardly covers the cost of staying in a reasonable hotel within a reasonable distance of this House. I fear that members of the committee might have been influenced by the proximity of their homes to this House and by the fact that they are not required to travel 500 miles to come to this House or to incur overnight expenses, as many noble Lords from Scotland have to do.

I travel frequently by plane and train with civil servants from the Scottish Office who come down here regularly to serve their Ministers. The last time that I asked about their overnight expenses, I discovered that they were allowed something like £120 per night as against the £70 which is allowed to Members of your Lordships' House. I have submitted those figures to the Minister. I am not a poor man, but I do not think that we should be out of pocket for attending the House of Lords. I believe that the expenses of staying overnight in a reasonable hotel incurred by Members of this House should be properly covered. That cost is not covered by the £70 which is now to be granted although, as I have said, we are thankful for the increase of £1 per night.

All this is related to the retail prices index, but the RPI has little to do with hotel costs. Hotel costs fall into a different category. It cannot be right to apply the RPI to the matter of our overnight allowances. Indeed, I do not think that hotel costs feature in RPI calculations. Therefore, the House should try to relate our overnight allowance to the actual cost of staying in reasonable accommodation overnight.

Lord Airedale

My Lords, I shall be very brief indeed—

Lord Stoddart of Swindon

My Lords—

Lord Hailsham of Saint Marylebone

Order!

Lord Stoddart of Swindon

All right, I am a decent sort of chap.

Lord Airedale

My Lords, I shall be brief. The noble Viscount referred us to a Written Answer of last Wednesday. Does he accept, on reflection, that it is misleading because it says nothing about any maximum? Indeed, it reads as follows:

"
	£
Backbench Peers (Daily rates)
Day subsistence	31.50
	"

—[Official Report, 13th July 1994; col. WA 104.]

That leads the reader to suppose that Back-Bench Peers get an attendance allowance of £31.50 per day.

3.45 p.m.

Lord Stoddart of Swindon

My Lords, it is altogether good that we are having this discussion. I should like to thank not only the Government Chief Whip and my noble friend but also other noble Lords who have spoken for raising some of the issues which have been raised. Noble Lords are very diffident, and have been diffident over a long period of time, about discussing their own expenses. That is altogether to the credit of this House. However, I think that the time has come when we have to discuss our expenses and, at the same time, the way in which this House is resourced and whether the resources that are given to this House are adequate for it to do the very important job that it has to do, which is to check the Executive.

There seems to be some worry among Members of this House that if they shout too loud, the moves for them to be abolished will be increased. That is not a very good reason for telling the truth about what happens here, and it is about time that we did begin to tell the truth about what happens here. Furthermore, if there is to be a discussion —and undoubtedly in the years to come there will be discussions—about what happens in this House, about whether it is to be reformed and, if so, how it is to be reformed, the House will have not only the opportunity but the duty to contribute to that debate because Members of the House will be very much involved. Therefore, we must discuss not only our expenses, but the way in which this House is resourced and whether it is able to do the job that it is supposed to do.

The work of the House has increased markedly over the past 20 years. It has increasingly had to act as a check and a brake on the excesses of government and of another place. I am sure that noble Lords will understand that even since I became a Member of this House—that was getting on for 11 years ago—the nature of the House has changed completely. I happen to believe that it has changed for the good. The House is now sitting far more days and hours than ever before. We now find that the House of Lords is sitting into the early hours when the House of Commons has long gone home. We find that we are often sitting when the House of Commons is still in Recess. Indeed, in the present term this House returned to its duties on 6th June; the House of Commons returned to its duties on 14th June—eight days later. We find that the House of Commons will rise tomorrow. The House of Lords will not rise until 26th July, so the House of Lords is now quite a different place from what it used to be. Indeed, it is doing a lot more work than ever before.

The costs of this place are minimal. Noble Lords might well have seen the Written Answer to a question that I tabled last December in which I asked Her Majesty's Government: What is the total cost of running (a) the House of Commons; (b) House of Lords; (c) the European Parliament: and how much this cost represents per active member in each case". The answer read: The total voted costs of the House of Commons this year are some £170 million. This represents £261,000 for each Member of Parliament The corresponding costs for the House of Lords are £39.5 million, or some £38,000 for each active member of the House. Equivalent costs for the European Parliament are some £476 million; £919,000 for each MEP".—[Official Report, 17/12/93; col. WA 155.] I understand that the total costs of the House of Lords for 1993–94 are only £36,260,000. You can bet your life that the costs of the European Parliament have soared in the same period.

One of the arguments that is used against Members of this House having proper expenses and proper places in which to work rather than slummy offices is that this House is not elected. I suppose that that has some legitimacy. However, I should like to examine it. It is true that the House of Commons is elected, but whether its Members remain representative for the whole of their five-year tenure is a different matter. What is more, the Members of the European Parliament, who enjoy lavish expenses as well as a salary, were elected by just 36.4 per cent. of the electorate. Nearly two-thirds of the electorate showed its utter contempt for the whole business by not voting at all. So where is the legitimacy in all that? However, that is not the only point about the legitimacy that I wish to make: £40 billion of government money is expended by unelected quangos, all of which are made up of people who are paid a salary and lavish expenses. So even the legitimacy or illegitimacy of not being elected does not wash.

The House of Lords is the only second Chamber that we have. If we believe in a bicameral system of government, we have to ensure that both Chambers are enabled to do the job that they have to do; that is, to check on the Executive; to examine legislation; and to examine it closely to ensure that when it leaves this House and receives Royal Assent it is in good order. I expect that all of us wish that the Government would lay off legislation a bit so that both Houses could spend much more time in examining legislation more closely to ensure that it reaches the statute book in good order.

Lord Tordoff

My Lords, perhaps I may intervene as one of the members of the usual channels who is in the position of a Back Bencher in relation to expenses. I am not trying to make a particular point there, except that that is the position upon which I stand. The House is clearly grateful to the noble Lord, Lord Dean of Beswick, for introducing this topic in response to the noble Viscount the Government Chief Whip, with whom I have to say I have considerable sympathy at having been forced into this position at a very late hour due to certain circumstances outside his control.

First, I should like to pick up the point made by my noble friend Lord Airedale which was a trap into which I believe the noble Lord, Lord Dean of Beswick, also fell: we should not be talking about allowances; we should be talking about reclaiming expenses which are paid out in the course of our duties here. It is important that we should always remember that.

Mention was made by the noble Lord, Lord Taylor of Gryfe, of the overnight allowance. He talked about the difficulty of obtaining hotels within the scope of the £70 expenses maximum. I believe that the problem—I should be glad to hear from the noble Viscount the Chief Whip—is that civil servants have some kind of arrangement with a group of hotels in London whereby they can obtain hotel rooms at lower rates than can the average member of the public, among whom we count ourselves. If the Government can come to some arrangement with a suitable hotel chain whereby noble Lords can obtain cheaper accommodation I am sure that they would all be grateful. That might be why the calculation included here is inaccurate. It has been based on the false presumption that we can tap into that network of hotel rooms which civil servants can use.

My noble friend Lord Avebury, in an interesting plea to get a desk, which I heard, raised the question of the mileage allowance. He will not remember because, at the time, although he was a Member of the House he was not attending as frequently as he does now—I am glad to see him back fully in action—we had a debate in the House as to what the mileage allowance should be. I remember vividly that I had a head-on collision with the noble Viscount, Lord Whitelaw, because the other place has three separate rates of mileage allowance for different sizes of cars. I argued that we should dispense with the top rate since the lower rate was for Mini Minors into which noble Lords would find it difficult to prise themselves in most cases. I was not thinking then of the noble Lord, Lord Hesketh, and others. We have that allowance because your Lordships decided to agree with me and not the noble Viscount. I do not disagree with the fact that the rate may be higher than it should be in environmental terms, but still it is better than it might have been.

I agree on the subject of postage. It is a strange facet of our life here that we have to lick stamps all the time to reply to the correspondence which the more active Members of your Lordships' House receive.

There is one issue that I should like to raise which is not covered by this Motion and which is something that occurs in another place but not here; that is, the ability of spouses to be given some type of travel facility to get to London from distant parts of the country. It is unfortunate that there is not some mechanism whereby spouses of Members of your Lordships' House could receive some allowance or warrant to come to London on a certain number of occasions a year. I wonder whether the Minister would care to look at that issue.

Finally, I am not at all sure—this is where I agree with the noble Lord, Lord Dean of Beswick—that the RPI is the right index. He was right when he talked about taxi fares. They have escalated out of all measure in the past few years compared with the RPI. Although noble Lords will undoubtedly agree to the Motion today, I wonder whether the noble Viscount the Chief Whip, and through him the Lord Privy Seal, whoever that may be, is prepared to take this matter away to see whether it is possible to produce some index which is more applicable to the job that we do here and the expenses that we incur here so that we can get on to a sensible index and not have to discuss these issues in the future.

Lord Bruce of Donington

My Lords, I would not wish to stir up any undue controversy in a matter of this kind, but I must say that when my noble friend said that he thought the existing proposals were some kind of punishment it occurred to me that the microscopic increases which your Lordships will have over the next few years possibly result from the number of defeats that your Lordships' House has inflicted on the Government in increasing quantity over the past few years. If a graph were drawn showing the various degrees of expenses to which we are entitled and the number of defeats that the Government have suffered, it would not surprise me to see at any rate a mild correlation.

There has been a tendency, since we have seen the new rates, to heap undue criticism upon the Treasury. I believe that that is entirely misplaced. Those to whom we should address ourselves are the Government themselves and, beyond that, the general public, including the media. There is in your Lordships' House a second Chamber. In addition to its revising functions, and the other useful functions it performs, it happens to be one of the two public forums for public debate on public issues. There are only two: the Commons and the Lords.

I am bound to say that over the past few years when subjects come up for public debate—important issues of principle, policy and action—the quality of debate in your Lordships' House is not inferior to me quality of debate in another place. Often that is accomplished without the catcalls which occur from time to time in another place in order to enliven the proceedings.

We in this House perform a useful function. It may be that we are on our way out and that we shall be replaced by some other body. However, while we are here we are serving a useful purpose in public and constitutional terms.

The question is what reward we should receive for performing our function. As I read the allowances to which we are to become entitled, I could not help comparing them with those of European Members of Parliament. Your Lordships may know that I have had some four years' experience in that capacity. The average attending Member of the House of Lords works more hours here than do MEPs in Brussels, Strasbourg and elsewhere. We in this House sit many more days than do the MEPs in the plenary, the committees and the various study groups of the European Parliament.

I do not suggest that we should receive the same lush terms —and, believe me, they are lush!—as Members of the European Parliament. However, it is wrong that when considering the expenses that are. to be made available to Members here the Government and the public at large take one view, but when it comes to considering those of MEPs they take a totally different view.

I could go into some detail about the expenses of a European Member of Parliament but it sticks in the craw a little to realise that MEPs are entitled to £20,000 per annum general expenses without having to account to anybody as to their expenditure. I do not deny that they have expenses; but when I look at our increases of 50 pence per day, I believe that people should re-think the matter.

What bothers me is not the extent of the difference in principle that arise when Her Majesty's Government consider the proper remuneration for MEPs and your Lordships but the insult that is implicit in a rise of 50 pence per day for any Member of this House, wherever they sit, whether hereditary or life Peers. We are peers of the realm, we serve a useful purpose and we try our best to do the job as we see it. The Government should think again before offering yet another insult to your Lordships.

4.4 p.m.

Viscount Ullswater

My Lords, I am grateful for the somewhat qualified welcome that the Motion has received. I am sensitive to the feeling which many noble Lords have expressed about the existing maximum rates for expenses. The noble Lord, Lord Airedale, was right in pointing out that they are maximum rates rather than daily flat rates.

The noble Lord, Lord Dean of Beswick, informed your Lordships that yesterday he had a useful meeting with the then Lord Privy Seal. I am grateful to the noble Lord for mentioning that because that discussion has been taken on board. His anxiety was with the basic rates rather than with the method of increase, which is the subject of today's Motion. The rates were originally set in 1983 on the recommendation of the Top Salaries Review Body, as it was then called. That recommendation was based on a full examination of the relevant costs that your Lordships might incur.

It appears from our discussions today that there may be a good reason why that should be looked at again. I suggest that the basic levels, the costs of postage, which was raised by my noble friend Lord Boyd-Carpenter, the increase in the workload, which was implied by the noble Lord, Lord Stoddart, and travel, as raised by the noble Lord, Lord Tordoff, could be dealt with in another review or another discussion which could take place through the usual channels, in order to see whether the basic levels are correct.

The noble Lord, Lord Avebury, can be comforted by the fact that his party is most anxious about the cost of motoring. His noble friend moved a Motion to cut the top rate for Members of this House. It is interesting that we should talk about these allowances being too small and then have one being criticised as being too large.

I must tell the noble Lord, Lord Taylor of Gryfe, that the price of hotel accommodation does not always obey the RPI. I understand that during the past four years, for instance, the cost of hotel accommodation has fallen by a considerable amount and therefore—

Noble Lords

No!

Viscount Ullswater

My Lords, of course it depends on which hotel one goes to but average prices have not risen with the RPI. The noble Lord, Lord Tordoff, asked about the cheap hotel accommodation that has been arranged through the Civil Service. The basis on which the allowance has been made to your Lordships pays no regard to the fact that a deal may have been done through the Civil Service. The allowance has not been agreed on that basis.

The noble Lord, Lord Stoddart, was anxious about the legitimacy of this House. I have no such anxiety. This House does a very good job as a second, non-competitive Chamber to the other place and long may it remain a second, non-competitive Chamber.

Requests have been made for a different index on which your Lordships' expenses can be reviewed. I am standing at this Dispatch Box almost a year to the day when the expenses should have been up-rated, which indicates the great difficulty that we have had in finding an index which will properly measure the increase in the levels. It became apparent to those involved in the task that the use of the RPI as an up-rating mechanism is perceptibly fair and reasonable both to your Lordships and to the taxpayer—

Baroness White

My Lords, am I wrong in supposing that it does not include value added tax?

Viscount Ullswater

My Lords, I am not sure what the noble Baroness means by that. No value added tax is placed on the expenses—

Baroness White

My Lords, does the index include value added tax in its calculation? If it does not, one is not given a fair idea of the increase in costs.

Viscount Ullswater

My Lords, of course, the retail prices index includes the rate of VAT on the goods measured by the index because that is the cost of the goods. Therefore, in as much as the goods carry VAT, it measures that proportion of VAT placed on them.

I hope that your Lordships will approve the Motions. They are reimbursement allowances. They have a special tax status and we should be conscious of that fact.

Lord Graham of Edmonton

My Lords, before the noble Viscount sits down at the end of this interesting and valuable debate, perhaps I may assure him from this side of the House that we would welcome any invitation by the Government to discuss those issues through the usual channels because we have not been party to reaching the agreement placed before the House today.

On Question, Motion agreed to.