London Mayor Sadiq Khan is set to become one of the country's highest-paid politicians following his appointment to the House of Lords by Keir Starmer. The move has generated controversy due to Khan's potential to claim a £390 daily tax-free allowance for attending sittings of the Upper House, in addition to his existing mayoral salary.
Under current rules, if Khan were to accept a salary as a Member of Parliament or a Lord, his £170,000 mayoral salary would be reduced by two-thirds. However, he appears eligible to claim the daily allowance without such a reduction. With the House of Lords typically sitting for approximately 150 days per year, this allowance could add £58,500 to his annual income. The tax-free nature of this allowance means Khan would need a salary of around £280,000 to achieve a comparable net income. For context, the Prime Minister's total salary, including that of an MP, is just over £174,000.
A spokesperson for Khan stated that his time would remain dedicated to his mayoral duties, including attending meetings and events, and fulfilling all responsibilities for Londoners. Aides have indicated that Khan is not seeking a government ministerial position and has not yet decided if he will seek an unprecedented fourth term as Mayor of London in 2028.
The situation has drawn criticism. John O'Connell, chief executive of the TaxPayers' Alliance, called for Khan to clarify his intentions regarding the allowance. "Taxpayers will not take kindly to their mayor exploiting a loophole to boost an already bumper pay packet," O'Connell said, urging for the loophole to be closed.
This development follows reports of potential similar arrangements for other mayors. Tees Valley mayor Lord Houchen has reportedly claimed the Lords' per diem allowance, though his mayoral salary is significantly lower at £65,000. There have also been rumors that other mayors are being considered for appointments to the House of Lords.
