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Peers who influence or amend laws to benefit companies that pay them will not face any new restrictions after the cash for amendments row.
Jack Straw, the Justice Secretary, promised new laws yesterday, allowing members of the Lords to be expelled if they bring the Upper House into disrepute.
Peers who are “non-domiciled” for tax purposes, potentially including billionaire Labour and Tory donors, could also lose their seats if plans supported by the Justice Secretary become law. Mr Straw said that, in general, lobbyists were too influential in British political life — the first hint since a report by the Commons Public Administration Committee on lobbying that curbs may be coming.
But there are no plans by the Government or the House of Lords to restrict peers who lobby on behalf of companies that pay them, despite criticism that this presents a worrying conflict of interest.
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Last week The Times revealed the case of Lord O’Neill of Clackmannan, a Labour peer and president of the Specialist Engineering Contractors’ Group, who had put down amendments to construction legislation that would benefit subcontractors. He withdrew them, acknowledging it would be “inappropriate” to pursue them in the current climate.
His action was permitted under House of Lords rules because he was paid in his role as president of the subcontracting industry body, rather than receiving a fee to change the law, which is banned.
Neither Mr Straw nor the review by the Lords’ Privileges Committee will try to tighten this rule, even though critics point out that this leaves a huge loophole allowing companies that want the law changed to pay peers.
Mr Straw said: “In the House of Commons, if you break the criminal law, or it is found that although you have not broken the law you have been doing something improper, then the House of Commons can, in extremis, expel you. That must apply to the House of Lords.” There are doubts about whether this will apply retrospectively to convicted peers such as Lord Archer of Weston-Super-Mare, the former Tory vice-chairman and novelist, and Lord Black, the former publisher of The Daily Telegraph.
There are a number of others with convictions whom it would be “inappropriate” to force out, according to Lords sources. Mr Straw is also risking the bipartisan approach to reforms in the Constitutional Renewal Bill by introducing a requirement that peers pay tax in Britain, which could hit Conservative donors such as Lord Laidlaw of Rothiemay and Lord Ashcroft, who has refused to confirm his tax status. Lord Paul, the steel magnate and billionaire Labour donor, and Baroness Gardner of Parkes, the Australian Tory peer, are openly non-domiciled and could also be affected by plans promoted by Lord Oakeshott of Seagrove Bay, the Liberal Democrat peer, that are expected to be adopted officially.
Government sources said that an attempt by Harriet Harman, the Leader of the Commons, to restrict MPs’ second earnings to 15 per cent of their main salary is unlikely to make progress. Apparently designed to embarrass the Tory front bench, many of whom have second jobs, it could hit Labour backbenchers hardest if they lose the next election.