£30k golden goodbye plan for Lords

PEERS sitting in the House of Lords should be offered a £30,000 tax-free lump sum to encourage them to retire, says Lord Steel of Aikwood.

The former Presiding Officer of the Scottish Parliament wants peers to get a taxpayer-funded pay-off as part of plans to cut the numbers sitting in the House of Lords. In a debate on the reforms last week, Steel suggested that retiring peers could use the extra cash to pay for a new car or go on a cruise. Yesterday, the proposal by the former Liberal leader was condemned by his political opponents, who said that his remarks were out of touch with public opinion when the country was facing a financial crisis.

The House of Lords is set to have its numbers cut from 788 to 300 under reforms drafted by Deputy Prime Minister Nick Clegg. Under the plans, peers would be elected to a one-off 15-year term. Currently peers do not receive a pension, because they are in the Lords for life. Under the reforms they would receive a salary of around £60,000 per year, instead of the £300 daily attendance allowance they currently receive.

In his contribution to a debate, Steel said: “I hope that in due course, the government may come forward with a modest payment proposal of a lump sum of, say, £30,000 to those choosing to retire after, say, ten years’ service or having reached the age of 75, provided that they have had an attendance record of at least 50 per cent in the previous two sessions.”

Steel, who in his spare time delivers lectures on cruise ships, then said: “Those in the business world tell me that a modest lump sum of that kind is much more attractive than the financial sum appears.

“One can imagine members of your Lordships’ house discussing with their spouses whether they might buy a new car for their retirement or go on a world cruise and listen to lectures by the noble Lord, Lord Steel of Aikwood – or choose another one to avoid that peril.”

His comments angered Stewart Maxwell, the SNP MSP for West Scotland, who said: “These comments by Lord Steel are out of touch with public opinion and totally inappropriate in tough financial times. There is no doubt that the House of Lords needs robust reform but that should be to make peers more accountable to the public, not to provide retiring Lords with lump sums of cash.”

Emma Boon, campaigns director for the Taxpayers’ Alliance, said: “Discussing this at a time when the Government is looking to cut spending and taxpayers are feeling hard-pressed is a little insensitive.”

But Steel said that his lump-sum proposal, which would be funded by savings in the House of Lords’ budget rather than extra cash from the Treasury, would save money. Speaking to Scotland on Sunday, Steel said: “It would save money, because £30,000 is about what an average peer will get if he turns up about three-quarters of the time. So if you pay them off and get the numbers down, there should be a substantial saving. If you don’t make any provision for retirement, they [peers] can collect that every year.”

Steel said his suggestion that the pay-off could be used to buy a car or go on a liner was a light-hearted remark.

“That was just a joke. It was received as that too. The serious point is that there are far too many peers. It would be cheaper to get rid of quite a lot,” he said. “I can assure you that a lump sum sounds much more attractive than its actual financial value and that’s why I mentioned buying a car or going on a cruise. I can assure you that it is going to save money rather than cost money.”