PMQs: Peers shouldn’t get out of paying tax, says Clegg

11.59.00am GMT Wed 28th Jan 2009

The Liberal Democrat leader slams Members of the Lords relying on residency loophole to avoid taxes

Speaking at Prime Minister's Questions, Nick Clegg asked the Prime Minister to support a Private Member's Bill to ensure peers - "who make the law of this country" - pay their taxes in full. He said if anyone deserved a tax break it was the millions of ordinary British taxpayers completing their tax returns, not the super-rich.

The Prime Minister failed to offer his support outright for the Liberal Democrat bill. This added to evidence compiled by Norman Baker MP, who recently identified the PM as one of the biggest offenders for failing to answer parliamentary questions.

Read the full PMQs exchange below

Mr. Nick Clegg (Sheffield, Hallam) (LD): Does the Prime Minister think it is right that some Members of the upper House can use their status as non-domicile non-residents to get out of paying their full taxes here in this country?

The Prime Minister: Of course it is not right.

Mr. Clegg: In that case, will he - [Interruption.] Hang on. Millions of ordinary British taxpayers are filing their tax returns this week. They are the ones who deserve a tax break, not the super-rich. So will the Prime Minister support our private Member's Bill to force peers, who make the laws of this country, to pay their full taxes in this country?

The Prime Minister: Where I would disagree with the right hon. Gentleman is to say that we are helping ordinary taxpayers in this country. We are raising personal allowances so that people will pay less tax; they will rise again in April as a result of the decisions in the pre-Budget report. We have cut VAT - and, if I may say so, the Institute for Fiscal Studies says today that that is a far more effective stimulus than critics are saying. Of course, we are also raising pensions and child benefit. Yes, we should take action against tax havens, but, yes also, we are helping ordinary taxpayers in this country.