Page last updated at 17:16 GMT, Wednesday, 20 May 2009 18:16 UK

Q&A: Peers cash claims

Peers sitting during the State Opening of Parliament in November

Two Labour members of the House of Lords have been suspended from Parliament after being found guilty of misconduct by an internal inquiry.

The investigation examined allegations made by the Sunday Times earlier this year that four peers discussed amending legislation in return for cash, claims which they denied.

What were the allegations?

The Sunday Times said Lord Truscott and Lord Taylor offered to make amendments to legislation in return for cash payments. The newspaper claimed its reporters approached the men pretending to be lobbyists acting for a company which wanted help getting an exemption from current laws on business rates. The peers denied the allegations, saying no money changed hands.

What action has Parliament taken over this?

A Lords committee on members' interests looked into the allegations against the men. It concluded that Lord Truscott and Lord Taylor had broken parliamentary rules prohibiting peers from influencing legislation in any way in return for financial gain. It recommended that they should be suspended from Parliament for six months, the maximum penalty for the offences uncovered. The House of Lords voted to endorse the report on Tuesday with none of its members dissenting. This is an exceptional step as no peer has been suspended since the reign of Oliver Cromwell. However, peers cannot be permanently expelled from Parliament.

When will this take effect?

The ban will take effect immediately. This means the two men will be excluded from Parliament until the middle of November when the current parliamentary session ends. Once suspended, the peers will not be able to claim their parliamentary allowances.

How have politicians reacted?

Peers from all parties backed the move, although many said they were doing so with a "heavy heart" due to the severe and unprecedented nature of the penalties. Labour Leader in the Lords Baroness Royall said it was a "dark day" for Parliament while her Conservative counterpart, Lord Strathclyde, said it was an "unhappy but fair and just" outcome.

Will that be the end of the matter?

Lord Taylor's membership of the Labour Party has been suspended pending a disciplinary hearing and his future in the party must be in doubt. Lord Truscott has already resigned from the party. The police looked into the matter earlier this year after the Liberal Democrats made a complaint. The Met decided not to proceed with a criminal investigation citing, among other factors, the difficulty in obtaining evidence due to the convention of parliamentary privilege governing members' correspondence and other activities. However, it said it could reconsider its decision in the light of any new evidence.

Were any other peers implicated?

Yes. The Sunday Times also made allegations against Lord Snape and Lord Moonie. However, the committee cleared them of wrongdoing but invited them to apologise to Parliament for an "inappropriate attitude" to parliamentary rules banning paid advocacy.

What rules govern the conduct of peers?

Members of the House of Lords are bound by a parliamentary code of conduct governing their behaviour. This outlaws peers from accepting financial incentives in return for voting in a certain way, asking specific questions or promoting any particular issue. Peers, the code says, must "never accept any financial inducement as an incentive or reward for exercising parliamentary influence". Any peers trying to amend proposed laws in return for cash would be breaking the rules.

Are peers paid?

Unlike MPs, there is no salary for "being a peer". But they get an allowance of £335.50 for every day they attend the House of Lords. This consists of £174 for overnight accommodation, £86.50 for "day subsistence" and £75 for office costs. Once suspended, the peers will not be able to claim these allowances.

What are peers allowed to do?

Peers are not paid a salary and it is perfectly legal for them to provide general advice and to act as consultants for outside interests, as long as this does not directly influence their conduct. But if a peer asked another member to put down an amendment to a bill, in return for cash from a third party, this would breach the members' code of conduct.

Do peers declare earnings?

They have to name the companies or organisations for which they act. The Lords code of conduct says they are "not required to disclose how much they earn" but "may do so if they wish".

Will this lead to further reform of the House of Lords?

Critics say this kind of incident shows the need for a radical overhaul of the upper chamber, which is generally under less scrutiny than its fully elected counterpart. The SNP says members of the House of Lords are unaccountable and the body is "unsustainable" in its current form. Proposals for further reform have become bogged down in recent years. In 2007, MPs backed plans for a fully elected Lords but peers rejected them. All peers are now appointed apart from 92 hereditary members who survived the first stage of Lords reform.

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