The Government opened the door yesterday to stripping peers living abroad of their titles and coats of arms.
The anomaly of "non-dom" peers giving up their seats in the House of Lords and still being free to style themselves Lord or Baroness could soon be corrected, Downing Street indicated.
Four peers – Lords Bagri, Laidlaw and McAlpine and Baroness Dunn – who have chosen to live abroad for tax reasons are still able to use their titles.
A fifth, Lord Foster, also still uses his title although he is no longer a British resident and lives in Switzerland with his family.
The apparent softening of the Government's position came after Whitehall sources made clear last week that it was not a priority to close the loophole.
The Prime Minister's official spokesman said critics could attempt to remove the titles from the five peers as part of forthcoming legislation to set up a wholly or mainly elected second chamber.
He said: "Lords reform is something that will take place later in the Parliament. I'm sure people will make these arguments and we will listen."
A draft Bill on the future of the Lords is due at the end of the year.
Lord Tyler, a former Liberal Democrat leader of the Commons, said yesterday he would be very surprised if an attempt to tackle the "totally absurd" situation of the five peers was not made at that point.
He added that action was essential to "disentangle" the honours system from peers' role as part of the legislature.
The position of the five peers has been considered by ministers, who concluded that there was no power to remove titles – and the use of heraldic coats of arms – in existing legislation.
They considered it not to be a sensible use of government time to take specific action against them. The anomaly will not exist in future as recent legislation now requires all members of the House of Lords – and the Commons – to be full UK taxpayers and residents.
However, Liberal Democrat members of the coalition are, in particular, sensitive to the existence of the loophole and look certain to back attempts to correct the anomaly as part of future Lords reform.
A Labour MP, John Mann, plans to table a Commons Bill calling for the removal of their titles.
It will not get the Government time required to turn it into legislation, but he could embarrass ministers if his Bill is supported by large numbers of MPs – possibly including Liberal Democrats.
The immediate constitutional priorities for the coalition emerged yesterday with the disclosure that two Bills will be published by summer recess at the end of the month.
The first will legislate for a referendum next May on replacing the first-past-the-post voting system with the Alternative Vote and for the establishment of a Boundary review to equalise the size of Westminster constituencies.
The second will set out plans to introduce fixed-term parliaments – and what would happen if a government lost a vote of confidence.Reuse content