Peers have expenses reduced to £300 a day

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Members of the House of Lords have had their allowances cut for the first time, following the parliamentary expenses scandal. In future, they will be able to claim a maximum of £300 a day, instead of the present £335.50, and will lose a range of perks.

To combat the notorious practice of Lords leaving their car engines running while they nip into the Palace of Westminster to sign the attendance register, a new half-day rate of £150 is being brought for those who are not in Parliament for a full working day.

Peers will also lose their right to claim separately for taxis, meals, office costs or hotel bills, all of which will have to come out of their daily allowance. It means the maximum any peer will be paid is £45,000 a year, assuming the House of Lords sits for 150 days. The Senior Salaries Review Board had suggested that the attendance allowance be put up to £340, rather than being reduced.

The new rates were announced by the Lords leader, Lord Strathclyde, who claimed the new system would be "cheaper to run, less bureaucratic to comply with, simpler to police and far, far harder to abuse".

He added: "We would sweep away the controversial rules on so-called 'second homes', which in my judgment have no logic in a House that is not elected. There will be no more addresses of convenience. No more juggling of utility bills and claims forms. If you come to Westminster and work in Parliament, you will be able to claim the allowance. If you do not, you will not.

"The existing expenses regime is discredited. It lacks credibility and the public has no confidence in it. This new plan means the end of the second homes fiasco. It means the end of the old expenses regime. It means a new system that is direct, transparent and accountable. It means we are making a significant step towards winning the public's confidence again."

Until just over 50 years ago, Lords were not paid to be in Parliament but the Conservative government recognised some aristocrats had become so impoverished during the years of post-war austerity that they could barely afford train fares to London. In July 1957, they introduced a daily allowance of three guineas, equivalent to just over £50 today. In 1979, peers were also granted the right to claim secretarial expenses.