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Mr. Newton : That is certainly the case, and I was going to say later that it is absolutely clear that allowances are generally paid against claims that the expenses have been wholly and necessarily incurred in the performance and pursuit of parliamentary duties. On my hon. Friend's first point, it will ultimately be a matter for the judgment of the House, but I judged that some attempt to look strategically at this or any other allowance now would not have been the most sensible thing to do. I thought that it would be better to establish a sensible uprating mechanism.

In the process of what I am proposing, we have moved away from the position whereby the uprating depended on overnight subsistence costs, which in turn related partly to hotel charges. One reason why the additional costs allowance rose very little for a couple of years was the effect of the recession on hotel charges, which rose very little. The move to an RPI indexing system will at least ensure that my hon. Friend will receive a more sensible deal than he would otherwise have done.

I can sum up this part of my speech in two sentences. The purpose is simply to allow the limits on claims for expenses necessarily incurred by hon. Members in fulfilling their duties to be updated for inflation, and to ensure that they are annually updated in future. None of the increases, looked at on an annual basis, exceeds 2.3 per cent.

I turn now to the fifth leg of the resolution, which involves the winding- up allowance. That is the amount, currently a maximum of one sixth of the office costs allowance, which is intended to enable Members--or their executors where the issue unhappily arises as a result of death--to clear up their obligations after leaving the House. It has become clear that this amount is now inadequate in the light of, for example, prevailing contracts

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of employment with staff and the periods of notice which are often required in relation to the increasing amount of equipment that Members have.

Having taken advice from the Fees Office, I now propose that the allowance should be set at a maximum of one third of the annual office costs allowance, although Members will see that, for technical reasons connected with the way that the basic allowance is defined, the motion is drafted in terms of four thirds of the quarterly allowance.

In addition, the motion widens the scope of costs that can be covered from purely secretarial to all necessary costs. I emphasise, of course, that, in common with the OCA, and indeed others, the new figure is a ceiling to which legitimate costs can be claimed, and not in any way an entitlement.

Finally, I come to part F of the resolution, which introduces a new allowance to cover the necessary expenses of Members returning to Westminster in the event of a recall of Parliament during a recess--not, I should say, that we are planning one. [Interruption.] We are planning a recess.

As I said earlier, the present position is that Ministers faced with a recall can have their expenses covered by their Departments, but no such protection is available to other Members. The motion proposes that Members faced by a recall during a recess should be covered for all costs

"wholly and exclusively attributable to the recall",

which includes, assuming that time and plans make it reasonable, the expenses also of travelling to resume a holiday. This is not, of course, an allowance we would expect to be activated very often, but I think it a reasonable safeguard to introduce for Members who need or wish to attend the House in the event of a recall, and I hope hon. Members will agree with me.

Indeed, I need hardly say that I hope they will agree with, and support, the resolution as a whole. I believe it to be reasonable, realistic and restrained, and I commend it to the House.

11.33 pm

Mr. Paul Flynn (Newport, West) : We are considering the recommendations in the shadow of recent events. We all recall what happened two years ago, when we took a decision, by a majority of the House, to increase the allowances paid by a large sum. That decision was unpopular outside the House, and the decisions that we take tonight will be seen in the twilight of the events that have taken place in the past three or four days. There is a great deal of cynicism about our status here. Most of it is unjustified, but we have to bear it in mind.

We heard tonight from the hon. Member for Southwark and Bermondsey (Mr. Hughes) for the Liberal Democrats that an offer in excess of £10,000 was made to a Member of this House for secretly carrying out a small duty of booking rooms. That is the type of information that will be presented in the press tomorrow along with the

recommendations that we make tonight. I believe that the recommendations are prudent and sensible.

We could put into our recommendations, if not tonight then on a future occasion, the same conditions that we lay down for other people who live off public money--those who live on income support. Those people have their ceiling of income support, as we have our recommended ceiling, which we have agreed. If they receive income in excess of that amount, of even a fiver a week, that amount is deducted pound for pound from their income support. In

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order to defend our position, if income comes into our pockets for doing parliamentary duties, we should consider deducting that amount pound for pound from the amount that we receive.

When we took the decision to increase our allowances two years ago, 53 hon. Members opposed the increase. Those awkward 53 Members had substantial outside interests, which I believe brought them in a great deal of money. They opposed the increase, and I presume that they do not take the full allowance now. I believe that we are equal as Back-Bench Members of Parliament. We have agreed on a certain amount, and that should be the ceiling.

Mr. David Ashby (Leicestershire, North-West) : We are talking about the office costs allowance, which is the expense of running an office. Is the hon. Gentleman suggesting that the money that he receives from the trade union, which goes for running his office in the constituency, should be deducted from his allowance ? If hon. Members receive money to run the parliamentary office from other sources, the hon. Gentleman has a point. Most Labour Members receive large amounts of money from the unions to run their offices.

Mr. Flynn : I must explain to the hon. Gentleman that I and many other hon. Members receive not a penny from a trade union or any other organisation. I believe that the 14 per cent. of Labour Members who receive sums of money from trade unions and commercial bodies should act in exactly the same way as the 85 per cent. of Conservative Members who receive such pay.

If the amount that the House decided was appropriate for the office costs allowance was applied to everyone, the House could take a more realistic decision on what the office costs allowance should be. Some Members voted for a low office costs allowance when they realised that vast amounts of other funds would come into their office to do exactly the same job that all the rest of us do.

We have to look at the matter with some realism, and recall the decision that we took two years ago. The many Members who opposed the increase two years ago should consider the amount of money that comes into them. We must restore respect to the House, which we all love. It is the centre of our lives. We regret the comments that are being made about the House and Members of the House.

We have to say that any money that comes in to us, wherever it comes from, whether it is for making speeches or acting in the long term for a company, should be set against our allowance. As has been said, there is little difference between someone being paid a set amount to ask a single question, and someone being paid a substantial amount to act on behalf of a certain company over a period of years. There is another point, which has probably been made. We have had a debate on the pensions industry and a debate on the Trade Marks Bill in the Chamber in recent months. In both debates, only one Conservative Member spoke who did not have a financial interest in the subject. Those hon. Members were speaking not on behalf of their constituents or their party, but on behalf of companies outside. Neither a trade union party nor a Transport and General Workers party stood at the election. There was not

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a Legal and General party--or an Ian Greer party--standing at the general election. People voted for the Labour and Conservative parties.

We have degraded our own democracy, and we have prostituted it. We have become so used to the atmosphere of soft corruption in the House that Members are shocked when they hear that what they are doing is wrong, and deeply wrong.

11.39 pm

Sir Peter Fry (Wellingborough) : I do not intend to follow what the hon. Member for Newport, West (Mr. Flynn) said. My inclination is to say that any Member of Parliament who feels that his allowances are too high does not have to claim them. Anybody who feels that he is paid too much can pay it back to the Chancellor, who would be delighted to receive it.

My comments will be confined to the car mileage allowance. I say to the Leader of the House, with respect, that I believe that the car mileage allowance is rather different from other allowances. It was historically fixed to a scale of mileage allowances proposed by the Royal Automobile Club, but we know that that scale of allowances has long since disappeared. The problem has been how we are to peg the car allowance to a more realistic figure.

The fact that the original figure upon which we now base the allowance is years out of date does not give me the utmost confidence that we have the right formula. I would point out to my right hon. Friend that, perhaps unlike other allowances, the amount of money that is required to run a car could well rise, and, if the Chancellor keeps to what he said in the previous Budget statement, it will rise considerably faster than the cost of living.

Therefore, we shall progressively find that, unless some other things happen, Members will be increasingly expected to provide more out of their other taxed income to use on the car on parliamentary business. The only way that that can be avoided is to ensure that, when the Inland Revenue comes to the point of deciding whether any of the car allowance should be taxed, it should take into account what the cost is, and raise the amount that it allows before tax applies. The present system for those who are now roughly paying the full amount of tax on the mileage allowance is such that, in many cases, Members are literally at break-even point. Certainly there is no question of their making any additional income from the car allowance. That makes it more important that we are careful in that respect.

If we accept my right hon. Friend's recommendations tonight, does he not agree that a message should be imparted to the Commissioners of Inland Revenue that the figure that they accept before tax is due on the mileage allowance is also altered to take into account not just the rise in cost of living but the actual rise in the cost of running a car while on parliamentary business ?

11.42 pm

Mr. Doug Hoyle (Warrington, North) : I congratulate the Leader of the House on his report to the House. It is never the right time to talk about allowances or salaries. I know full well that, despite the interventions from one or

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two Members, what has been done tonight shall be seen in the press as being a payment to the Member, not a payment relating to costs incurred.

Sir Jerry Wiggin indicated assent .

Mr. Hoyle : The hon. Member nods his head, and he made a similar point a little earlier.

I know that that will happen. We are rightly bringing some relief to our hard-worked secretaries and research assistants, who are absolutely necessary for us to run our offices. It is pleasing to hear tonight that, in future, there will be an automatic allowance based on the retail prices index.

Speaking as a Back Bencher, and not in my position as chair of the parliamentary Labour party, I should like to ask that thought be given in future to ensuring that that allowance is not part of a Member's allowance, and that secretaries and research assistants are paid as though they were in the civil service. That would not prevent Members from choosing their own research assistants or secretaries, but it would mean that they were paid the right salaries, based on a civil service grade. It might also offer them career prospects. I believe that, if a Member dies or retires, his staff should be kept on if possible. New Members arriving after an election could then select staff with experience. These people would also be available to help out Members whose secretaries were ill or on holiday-- a better system altogether.

It would be good to have a House personnel officer to advise us on these matters. What I propose would also remove the uncertainties surrounding what research assistants and secretaries should be paid ; they would be paid against a definite grade.

Perhaps the employer's element of our assistants' national insurance contributions could be paid, too. That would remove from Members the difficult choices of how much they can afford to pay in salary increases for their hard-worked staff, or whether to spend the money on office equipment. That too would afford us some relief. The rest of the proposals are correct, in my submission. The change to the supplementary London allowance will help Members with London constituencies. I agree also with what has been said about the additional costs that may be associated with the car mileage allowance. It is right, furthermore, to equate Members with Ministers when it comes to reimbursement for the costs involved in a recall of Parliament during the recess.

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I know from conversations with the Leader of the House that one of the difficulties has been finding a civil service grade to which to attach these figures. Now we are to base them on the retail prices index, so we shall not have to go through the whole process again. That is welcome.

I congratulate the right hon. Gentleman. I know that it has not been easy to achieve what he has done--there is never a right time, as I said--but the proposals in respect of the office costs allowance will, I hope, benefit our staff.

11.46 pm

Mr. Simon Hughes (Southwark and Bermondsey) : Can the Leader of the House assure us that the car mileage allowance policy is consistent with Government policies on reducing car use, and compatible with the idea of using the smallest, most fuel-efficient cars that are commensurate with our duties ?

11.47 pm

Mr. Peter L. Pike (Burnley) : I ask the Leader of the House to reconsider the position of staff who are off sick or on maternity leave. Our current allowances do not adequately cover this problem. I recognise the difficulties, but increasingly Members' allowances are fully committed, and that can put Members whose staff are off sick or on maternity leave under pressure.

I appreciate that the right hon. Gentleman cannot give me a commitment tonight, but I ask him for an assurance that he will review an arrangement which has been in place now for a number of years, and which should be updated.

11.48 pm

Mr. Newton : Other hon. Members have raised with me the same point as the hon. Member for Burnley (Mr. Pike) has just mentioned, and I am looking into it. I am sorry that I have not managed to find a solution to put before the House tonight.

I have taken note of other hon. Members' points. I have to say to the hon. Member for Newport, West (Mr. Flynn) that I view his points with a little less sympathy than some of the others that were put to me.

I shall certainly ensure that the point made by my hon. Friend the Member for Wellingborough (Sir P. Fry) is drawn to the attention of those to whom it was directed, and I would say to the hon. Member for Southwark and Bermondsey (Mr. Hughes) that I am a member of the Government, so I regard what I have suggested as being consistent with Government policy.

Question put and agreed to .

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Members' Interests

11.50 pm

The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton) : I beg to move,

That this House approves the proposals in paragraph 18 of the Second Report from the Select Committee on Members' Interests (House of Commons Paper No. 353).

Mr. Deputy Speaker (Mr. Michael Morris) : Madam Speaker wishes me to announce that she has selected the amendment in the name of the hon. Member for Sheffield, Heeley (Mr. Michie).

Mr. Newton : This is now the sixth speech I have made on House of Commons issues since Monday and I shall try to keep this one reasonably crisp and brief.

I can be brief because the purpose of the resolution is simply to implement recommendations from the Select Committee on Members' Interests, whose Chairman will no doubt seek to catch your eye, Mr. Deputy Speaker, to set out in more detail the Committee's proposals and the reasons for them.

The House will probably need little reminding of the background. In March 1992, the Committee produced a major report on the registration and declaration of Members' interests. That report was debated on the Adjournment in June 1992 and formally approved by resolution of the House in June last year.

Most of the changes, which were substantial, have proved acceptable and appear to have worked without difficulty. That cannot, however, be said to have been the case in relation to the new requirement that Members who are members of Lloyd's should not only register that fact, but also list their syndicate numbers for the current year and their membership of any syndicates which remain unclosed. This requirement has led to difficulty well known to the House and complaints from a number of Members who argued strongly that those requirements went beyond what was reasonable compared with what is required in other fields and exposed them to intrusive, inaccurate and damaging speculation about the details of their financial affairs. The Committee, therefore, and in my view rightly, decided to carry out a further inquiry and to make another report to the House. It is the recommendations of that report for further changes, having examined those complaints, that are the subject of this motion. Essentially, the Committee has accepted that the requirements introduced last year have indeed inadvertently upset the balance between the accepted need for disclosure and the accepted need for hon. Members and their families to a proper degree of personal privacy. Its recommendations seek to restore what it believes to be reasonable balance while still going beyond the requirements of earlier years, and at the same time to take account of new developments in the Lloyd's market, in particular the introduction of what are known as members' agent pooling arrangements--MAPA--which on their own would clearly have necessitated some reconsideration. My hon. Friend the Member for Wealden (Sir G. Johnson Smith), the Chairman of the Committee, and his Committee performed a valuable service to the House in being willing to look again at what is appropriate in this difficult area and what they have proposed deserves the support of the House.

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Mr. D. N. Campbell-Savours (Workington) rose

Mr. Deputy Speaker : Order. I call Mr. Bill Michie to move the amendment.

Mr. Campbell-Savours : On a point of order, Mr. Deputy Speaker. Has the Leader of the House actually read the report ? What about the deprecation by the Select Committee ?

Mr. Deputy Speaker : Order. Those are not questions for the Chair. I call Mr. Michie to move the amendment.

11.53 pm

Mr. Bill Michie (Sheffield, Heeley) : I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof :

takes note of the Second Report from the Select Committee on Members' Interests (House of Commons Paper No. 353) ; but considers that the existing rule on the registration of Lloyd's syndicate numbers is reasonable and necessary in the interests of transparency and that all honourable Members who are underwriting members of Lloyd's should comply with it.'.

May I first express my gratitude to Madam Speaker for allowing the amendment to be debated ? I do not consider that the motion on the Order Paper in any way reflects what was discussed and voted on in Committee. That is why I tabled the amendment.

The debate took place over many months, going through a tremendous amount of detail interviewing individual hon. Members and the people of Lloyd's on the new arrangements to apply after 1991. The motion before us tonight does not reflect the issues that were before the Committee.

There were two totally separate issues. First, some hon. Members did not comply with the will of the House. We had to write to them and the Chairman, who is here this evening, had to talk to them. We had written submissions from some, and none from others. We gave them yet another opportunity to explain why they had refused to comply with the will of the House.

The House also gave the Committee the job of considering the changes that had taken place in the Lloyd's market since 1991-92. Even now, I have no doubt whatever that those two issues were meant to be separate and should have remained so, although obviously the Committee can deal with more than one issue at a time.

Slowly but surely, however, the Committee began to merge the two issues. I protested more than once. Finally, on Tuesday 24 May--I stand to be corrected, but I doubt that I am wrong--the issue of how the report should be framed was discussed again, and

"the prevailing view in the Committee appeared to favour the Chairman's proposal of a single Report divided clearly into two parts, although Mr. Michie protested strongly that this ran counter to the understanding on which the Committee's original decision to take evidence from Lloyd's had been based."

We knew that there had been changes in the Lloyd's rules and their interpretation. No one doubted that the implications for the future had to be considered ; but that had nothing to do with the fact that certain right hon. and hon. Members had flatly refused to comply with the rules of the House. Any mere Back Bencher who did that in any other context would be crucified. But the Committee went on and on ; excuse after excuse was given for why the details could not be given. It mentioned intrusion into personal finances, embarrassment to families and so forth.

Hon. Members may ask what difference the merging of the two reports makes. I believe that it makes a tremendous

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difference. After all our deliberations, however, we ended up with the bland statement on the Order Paper--not a reprimand for hon. Members who were guilty of contempt of the House, but a recommendation that actually suits those hon. Members.

It is not just a case of "Let's look at the whole thing and come up with a consensus." No one reading the Order Paper would believe the way in which the report was worded. It is in two parts : the first deals with hon. Members who did not comply with the rule, and the second with the debate about whether we should change the rules in accordance with the new rules in the Lloyd's market. It states that "12 Members who had registered an interest . . . had failed to comply with that additional requirement . . . The other nine Members have still not provided the required information ; and two further Members have subsequently registered an interest in Lloyd's but have similarly failed to supply their syndicate numbers."

Ultimately, 11 hon. Members had failed to comply with the wish of the House.

The report states :

"The Registrar and the Chairman of this Committee have written successively to all these Members, drawing their attention to the relevant provision in the House's rules and making a formal request to them to supply details of their syndicate numbers. Eight of the 11 Members subsequently accepted an invitation to give evidence to the Committee.

There is therefore no question but that the Members' failure to provide the required information is the result of decision rather than inadvertence or any other cause.

The Registrar has informed the Committee that two of the named Members have submitted information about their syndicates to him, while withholding permission for the inclusion of the information in the published Register. We consider that this action can in no way be regarded as satisfactory compliance with the rule of the House." The Chairman's recommendation in part l of the report states : "Whatever the circumstances, the refusal by individual Members to comply with a rule which has been agreed by the House sets a bad precedent and is to be deprecated. We accordingly draw the attention of the House to the fact that the Members named in paragraph 3 above have refused to register their Lloyd's syndicate numbers as required by the House's resolutions of 28 June 1993."

That is damning.

The motion tabled by the Leader of the House states :

"That this House approves the proposals in paragraph 18 of the Second Report from the Select Committee on Members' Interests (House of Commons Paper No. 353)."

How can that be called a reprimand for people who told the Committee on more than one occasion to mind its own business and that it was out of order ? Conservative Members are shaking their heads. I can go over this chapter and verse. I have all the drafts of what was said. It is great stuff. I will do that in private because I do not want to go on too long.

The issue of contempt has been swept under the carpet. We are changing the rules in accordance with the wishes of those who are guilty of contempt. That is what the motion means.

I do not doubt that in the future we may have to consider the new rules of the Lloyd's market and that that may be complicated. However, if because of MAPA and the change of rules we make changes because people might be embarrassed or because people are misled or misinterpret what the syndicate numbers mean, we will be making changes before things are proved. I say that because the syndicate numbers have not been registered and we do not know whether it will be embarrassing.

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The Members finally said that this was intrusive and that there was a misinterpretation. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said that the press reports were wild, totally out of proportion and inaccurate. The strange thing is that he had not registered the syndicate numbers with the House. The few Members who did register the numbers did not suffer any embarrassment. If the press reports were wild, inaccurate and embarrassing, it was because Members did not provide the information to enable more accurate reports to be made. It is strange that the only people who have been embarrassed by the press are those who have flatly refused to give their syndicate numbers.

Let us look at registration. We had the Lloyd's people at the Committee. The MAPA business is very complicated. It is far beyond the wit of the average person. [Interruption.] I have to concede that I do not have the same great wisdom as members of Lloyd's

Mr. Campbell-Savours : They cannot be that wise.

Mr. Michie : My hon. Friend is right. They cannot be that wise because they put their money on a horse without knowing which horse it was and they did not know whether it came last or even ran at all. That is part of the problem. Then they go bleating to the bookie saying, "Can I have my money back because I was misinformed." Imagine somebody going back to the bookie after the Grand National. It is nonsense. They shout foul all the time.

Whatever happens tonight, at least it will be on record that some right hon. and hon. Members have got away scot free by basically saying to the House, "Get stuffed. We are greater and more powerful than you are." One of the arrogant statements that was made cannot be seen in the report because the wording has been changed. I have checked it with the Clerk. He said, "I think that I heard something like that." One of the right hon. Members said

Mr. Michael Fabricant (Mid-Staffordshire) : On a point of order, Madam Speaker. The hon. Gentleman is saying that the Clerk stated that the Committee record has been changed. Is not that outrageous ?

Madam Speaker : Provided that they are in order, I am not responsible for the comments of the hon. Member for Sheffield, Heeley (Mr. Michie). Many outrageous statements are made in the House.

Mr. Michie : Coming from the hon. Member for Mid-Staffordshire (Mr. Fabricant), that point of order was a joke. I am not into slimming foods and things of that nature, so we shall not get into that subject, on which he did a good job the other week.

I did not say that the Clerk had misinterpreted, misunderstood or changed the wording. I know what happens in every Committee of that nature and a lot of it is confidential. I repeat that the right hon. Member for Old Bexley and Sidcup said that, if the Select Committee probed too deeply into matters of this nature, men of substance may be disinclined to stand for Parliament. What arrogance, when one thinks about it.

The record now states that people of importance may not want to stand for Parliament, or something like that. Was that a threat to the Committee that it should not ask too many questions because, if it did, some people might not stand for Parliament ? That is good news to some extent

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