Also criticised the 'champagne-swilling' caricatures of some peers

Lord Farmer, reportedly worth around £150m, said he did not claim the £300 allowance when he attends debates, 'because I do not need to'

A millionaire peer appointed by David Cameron is calling for higher pay to attend the House of Lords - describing the £300 daily allowance as 'inadequate'.

Lord Farmer, a hedge-fund boss and Conservative donor, said people would consider the current payment to be 'modest and even inadequate' if they knew how hard peers worked.

And he argued that peers deserved higher pay because attending the House of Lords 'restricts their earning opportunities elsewhere'.

Lord Farmer - who was also a senior treasurer of the Conservative Party with a reported personal fortune of £150 million - said he, personally, did not claim the £300 allowance when he attends debates, 'because I do not need to'.

But he added: 'Some depend on the daily allowance to make ends meet because they give so much of their time.

'If this were made clear to the public, who, of course, pay garage and plumbers' bills per hour, or per day, they might think the daily fee is in fact rather modest, and even inadequate, particularly if they understood there are many peers whose work here restricts their earning opportunities elsewhere.'

The 71 year-old peer, who is reported to have donated around £7 million to the Conservatives, also backed calls for a beefed-up Lords press office, to trumpet the chamber's successes.

He said: 'Crucially, however, if their [peers] contribution is to be considered worthy of public funding, the public need to value and understand the work we do.

'There is so much to shout about every day that would actually encourage all who pay taxes, whether individuals, or businesses, that they are in fact getting great value for money.

'We might even see public support for higher daily allowances, which I would endorse wholeheartedly.'

Alex Wild, research director at the TaxPayers' Alliance, said: 'It would be hard to square David Cameron's commitment to the cost of politics with hiking the tax-free peers' allowance.

'At a time when the government is rightly looking to keep spending down, they need to practise what they preach.'

Katie Ghose, Chief Executive of the Electoral Reform Society, added: 'While many Peers work hard, it is fairly offensive to suggest that £300 a day is 'modest and inadequate' given the fact that Peers who did not speak once in House of Lords debates over the past year still claimed almost £1.3m in expenses and allowances.'

Lord Farmer, a metals trader who built his fortune with the Red Kite commodities trading group - earning the nickname 'Mr Copper' - was made a working peer by the prime minister in 2014.

During the debate, on how to better promote the role of the Lords, he also criticised the 'champagne-swilling' popular image of the upper chamber.

Lord Farmer said: 'Caricatures abound - ermine clad, swilling champagne, swanning around your Lordships' house at the taxpayers' expense.

'That may sell newspapers but it doesn't give anything of true facts.

'A highly distorted myth is relentlessly peddled of everyone with their snouts in the trough, greedily pocketing £300 a day for turning up.'

Lord Farmer also owns a private jet and his son, George, was President of the Bullingdon Club at Oxford University whose former members include David Cameron and Boris Johnson.