Lords leader Baroness Stowell rejects Tory 'top-up' salary
The new leader of the House of Lords, Baroness Stowell, has rejected an offer from the Conservative Party to pay part of her salary, saying it would amount to a conflict of interest.
Her appointment last week in a cabinet reshuffle sparked a row about pay equality and the status of the Lords.
She is being paid less from public funds than her predecessor Lord Hill, due to other changes in the cabinet.
The Tories said they would supplement her pay but she has turned it down.
Prime Minister David Cameron said he "understood" Baroness Stowell's decision and he would seek to restore the leader of the House of Lords to full cabinet rank at the "earliest opportunity".
There was an outcry after it emerged that Baroness Stowell of Beeston would be paid the equivalent of a minister-of-state's salary, £78,891, rather than the £101,038 secretary of state's salary earned by her predecessor Lord Hill.
There is a limit on the number of full members who can sit around the prime minister's cabinet table, as opposed to those who are entitled to attend cabinet but are paid less.
The issue arose because William Hague is remaining in the cabinet after he moved from foreign secretary to leader of the House of Commons in the reshuffle - despite the latter not traditionally being a full cabinet post.
The Conservatives offered to pay the £22,000 differential in Baroness Stowell's salary from their own party funds but the Tory peer said that this would not be appropriate.
In a letter to Mr Cameron, she wrote: "Even though additional pay from Conservative Party funds would not break the House of Lords code of conduct for members or the ministerial code, I am a firm believer that when it comes to potential conflicts of interest and especially where money is involved, it is essential that all interested parties feel the right thing is not only done but is also seen to be done.
She added: "I am all too aware that my responsibilities as Leader of the House of Lords extend beyond the Conservative benches to all parts of the Chamber and to the House as a whole.
"I feel it only right therefore that my salary comes form a single source and that source should be the public purse consistent with my role as a public servant."
Peers from all parties have reacted angrily to the fact that the Lords leader is no longer a full cabinet member by right, one describing it as a "constitutional outrage".
Mr Cameron has written to the Association of Conservative Peers to signal his intention to "rectify" the situation as soon as possible.
In the letter, he said the House of Lords should be "properly represented in the government at the highest level" and he regarded Lady Stowell's position as "a purely temporary one".
"I will certainly do so immediately after the general election if I am returned as prime minister, if no opportunity has arisen to do so over the coming nine months," he said.
The prime minister stressed that Baroness Stowell would attend the same meetings as her predecessor and "will have the same full right to speak and contribute to the cabinet's business."