Lords reform: MPs attack plan to give life peers 'redundancy pay'
Wednesday, 7 February 2007
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Some of Britain's richest men and women will be offered taxpayers' money to give up their seats in the House of Lords under government plans to reform the second chamber.
The 605 life peers will not be forced to leave the Lords to make way for a new generation of directly elected members, but they will be offered "voluntary redundancy" payments which could amount to tens of thousands of pounds.
A White Paper to be published today is expected to say that the Senior Salaries Review Body should advise on the scale of the payments. They would also apply to the 91 hereditary peers if MPs decide not to evict them from the Upper House - one option in the White Paper.
Some ministers are unhappy about the proposed severance payments. "These people are hardly on the poverty line. The public won't understand it and won't put up with it," one minister said.
But Jack Straw, the Leader of the Commons who is in charge of Lords reform, argues that many peers gave up outside careers when they were appointed and should receive some compensation. He believes that one in five peers would stand down if they were offered financial inducements, helping Labour to achieve its plan to reduce the size of the House from 748 to 540.
Fifteen members of the upper house are on the Sunday Times Rich List, while many more have extensive business, property and land interests.
The richest peers include: Lord Sainsbury of Turville, the former science minister whose family's holdings have been estimated at £1.6bn; Lord Ashcroft, the Conservative deputy chairman, whose wealth was estimated at £820m; and Lord Laidlaw of Rothiemay, a major Conservative donor, said to be worth £730m.
Other peers include Lord Grantchester, a member of the Littlewoods dynasty, and Lord Saatchi, whose fortune, along with his brother, Charles, is estimated at £226m. Lord Drayson, the Defence Procurement minister and former Powderject vaccine boss, is said to be worth £80m, while Lord Heseltine's publishing empire is estimated to have given his family a fortune of just over £200m.
Alan Simpson, the Labour MP for Nottingham South, said: "I have no objection to paying a generous redundancy package to those who do the job and are not well off, but the payments must be means-tested.
"Clearly those who have already walked off with a disproportionate slice of the nation's wealth cannot fall into the category of being entitled to a second generous payout."
Norman Baker, the Liberal Democrat MP for Lewes, added: "I don't see why they should pay redundancy. They didn't compensate the hereditaries when they went. Peers are officially paid nothing so I'm happy to give them three years' pay on that basis."
Peers are not officially paid for their work, but can claim expenses in the form of travel and daily subsistence payments of £77 to cover meals and local travel as well as allowances of £154.50 for overnight accommodation when they attend sittings or a second home allowance of about £100 a day. Office expenses of £67 a day can also be claimed along with cash to cover any travel expenses to and from Westminster.
Under the White Paper, which was approved by the Cabinet last Thursday, peers would be paid a salary rather than allowances. Half the members of the new-look House would be elected, with 30 per cent nominated by party leaders and 20 per cent chosen by an independent appointments commission.
A YouGov poll for the Hansard Society found that only 6 per cent of people believe the Lords should be appointed, while 82 per cent believe that at least some members should be elected.
