Opening the debate, the Tory leader in the Lords, Baroness Evans of Bowes Park, said the “unprecedented circumstances” caused by the global pandemic and the resulting remote working had raised issues around allowances.

“At a time when millions of people across the country are having to adapt to working remotely and facing considerable financial challenges of their own, it is right we have adapted our financial arrangements and our burden on the taxpayer to reflect the current working environment we face,” she said.

But Lord Newby, the leader of the Liberal Democrats in the Lords, warned that some members faced seeing their allowance cut by as much as seven-eighths. He said that was “particularly hard” on peers from Scotland, Wales and the English regions who “have unbreakable rental contracts on flats in London”.

“It must therefore be seen very much as a temporary expedient,” he added. “I am sure that no one believes that having a London-centric House is desirable.”

Lord Shinkwin said he had a “huge mortgage” and was “not in any way shape or form a member of the privileged elite”.

He added: “I know from my own situation and the situation of other members that actually they do rely on the income that the allowances bring to live in the real world. Some members are not wealthy. I feel this decision hangs those of us who live in that part of the real world out to dry.”

A House of Lords spokesman said the Lord Speaker, Norman Fowler, had received the letter from peers and the matter would be considered in the coming days by the Commission and the Procedure Committee. The Government has agreed to review the allowance in the coming weeks. 

The Lords allowances system has been frequently criticised. In 2017, Lord Fowler’s predecessor, Baroness D’Souza, claimed a peer had kept a taxi waiting outside the House of Lords so he could dash inside to qualify for a £300 daily allowance.

She told a BBC documentary that many peers “contribute absolutely nothing” and attend only to take advantage of the daily attendance allowance.

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