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Members’ Expenses

3.49 pm

Nick Harvey (North Devon) (LD): I beg to move,

The motion invites the House to approve the recommendations made in the report on Members’ allowances produced by the Members Estimate Committee. It has been just over five long months since the House instructed the Committee on 24 January to consider the recommendations in the Senior Salaries Review Body’s July 2007 report on Members’ allowances. Members will recall that, no sooner had that instruction been given than the House was plunged into controversy following the irregularities in staffing practices of one hon. Member, the atmosphere that that created, and the judgments made by the freedom of information tribunal shortly thereafter.

It was decided at that point that the review being conducted by the Members Estimate Committee should be a more thorough review, that it should look at every aspect of Members’ allowances and that it should be a root and branch review. I am not necessarily suggesting that we have cut off every branch; that is for others to judge. The report runs to 271 paragraphs, and it follows that no one—not even all six members of the Members Estimate Committee—will think that all 271 of those paragraphs are perfect. The six members of the Committee have had to make compromises between ourselves in order to reach consensus.

The task that we were set at the beginning of the review was to balance the interests of Members of Parliament with the interests of taxpayers. I do not need to tell Members that the impression created in the national media has not reflected well on this House as an institution or on its Members. The public believe—quite erroneously, in my view—that our allowances are excessive, that there are irregularities in the way in which Members claim those allowances and that the systems in this place are lax. I repeat that those are not my views, but that is the impression out there among the general public, and that is the context in which the Members Estimate Committee has conducted its investigations and the basis on which we have brought forward our recommendations.

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We have a clear need to restore the reputation of this House. Thus it is that our principal recommendation is that we need a more rigorous system of audit and assurance, possibly going rather further than the strict requirements that an audit would deem necessary. We need to do this in the interests of trying to restore public confidence in this House. The events of earlier this year have adversely changed people’s impression of our arrangements for these allowances. Frankly, nothing will ever be quite the same again, not least because the freedom of information regime now means that we will publish, right down to receipt level, every claim that every Member makes against every allowance.

Over the past five months, we have been grateful for oral, written, formal and informal comments from colleagues. As I have said, we cannot expect to make everyone happy, but we have done our best to take on board as many of those representations as we could. We are also grateful to the outsiders who have come in and given evidence and advice to us. They include the Comptroller and Auditor General in the National Audit Office, Her Majesty’s Revenue and Customs, two firms of accountants, the Institute of Chartered Accountants’ practice assurance experts, and our own officials within the House.

When we published our report last week, we made it clear that tougher rules on the way in which we police our allowances were essential to putting right the problems that some people detect and the impression that abounds among the general public.

Mr. David Winnick (Walsall, North) (Lab): Will the hon. Gentleman give way?

Nick Harvey: I will just finish laying out the recommendations, then I will happily give way to the hon. Gentleman.

Members of Parliament are unique in certifying their own expenses. The Committee was advised by all those who gave evidence to us that this is simply not a practice that takes place in other walks of life. Even the chief executive of a plc will have an expense claim certified by the chairman of the board. The belief that a Member’s signature reflects the fact that a gentleman’s word is his bond is, regrettably, not one that the rest of the country is prepared to put its faith in any longer. The proposed system of practice assurance will for the first time allow checks to be made against the basis on which Members have made their claims and the uses to which the resources they have claimed have been put.

I encourage Members to read closely what is being suggested. We are not employees of this House but independent office holders. Our situation is comparable in many ways to that of professionals, whether as partners or in individual practices. The assurance system proposed in the report places us on a similar footing to professionals who practise either in partnership or as sole practitioners. Our intention is that there should be better record keeping and accounting and that if Members are doing anything at all irregular, they are more likely to be doing it through inadvertence than malfeasance.

We thus view these proposals as a soft knock on the door and as a helpful advisory service to be provided by professionals trained to do this in other walks of life, who will come in to assist Members. I want to clear up at this point any suggestion that the proposed practice assurance model is intended to go any further than deal with Members’ claims and their use of public money.

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Mr. Winnick rose—

Ian Lucas (Wrexham) (Lab) rose—

Nick Harvey: I will give way in a few moments.

It has been suggested, for example, that the practice assurance teams might come in and start telling Members how to go about their political business, how they should be serving their constituents, how they should order their political priorities and so forth. Nothing could be further from the truth. This is targeted solely at how Members are making claims and the uses to which resources allocated to them from public funds are put. I hope that I have made that clear.

Mr. Winnick: Let me turn back to what the hon. Gentleman was saying a little earlier about the lack of public confidence in the way we claim our allowances. Does the hon. Gentleman not recognise that the manner in which the House of Commons Commission went to the High Court without any authorisation from the House whatever—there was no motion of any kind—is hardly likely to bolster public confidence in the system of allowances, much of which is absolutely justified?

Nick Harvey: I do not accept what the hon. Gentleman says. The principal argument advanced at the High Court was that Members’ private addresses should not be put into the public arena, and Members will have an opportunity to express their opinions on that subject later in today’s debate.

Ian Lucas: The hon. Gentleman has referred on a number of occasions to the phrase “practice assurance”, which I believe is a deeply unfortunate one. He seems to be saying—will he confirm it—that the audit arrangements will extend only to financial assurance, not to practice assurance. Practice assurance goes way beyond audit and financial assurance. Does he agree that a much better, more accurate and less ambiguous description would be “financial assurance”, and will he use that term from now on?

Nick Harvey: Let me confirm that it is the financial practice, not the political practice, that the assurance team will be coming round to check, but I would not be satisfied to call it simply “financial assurance” for this reason: the scandal that I mentioned earlier related to the employment and use of staff. With respect, that went a little wider than just financial matters, but in no sense whatever would the assurance teams involve themselves in matters of political practice, which are entirely a matter for Members’ judgments. We are talking about the usage of considerable sums of public money—and nothing else.

Mr. David Clelland (Tyne Bridge) (Lab): Will the hon. Gentleman tell the House how much all this will cost and how much it will save?

Nick Harvey: How much it will save time alone will tell. I hope that it will save and improve the reputation of the House and improve the quality of British democracy. If it does that and if in a couple of years we have convinced people that any problems that there were are being ironed out, it will have been worth it. The question of how much it costs will depend on terms of contracts that we let, what people bid in at and what scale of work is done. Some estimates are included in the appendices—

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Michael Jabez Foster (Hastings and Rye) (Lab): Will the hon. Gentleman give way?

Nick Harvey: I will press on, with respect to the hon. Gentleman, so that more Members get the opportunity to contribute to the debate.

The purpose of introducing the principle of practice assurance is to put Members of Parliament on the same footing and the same basis as other members of the professions and others in other walks of life. One thing that we were asked to do at the outset of the process was to examine practice elsewhere and ensure that the practice of Members of Parliament was analogous to that of those in other professions. A mindset that Members of Parliament are in some separate world of their own and that different rules apply to us than to everybody else has got the House into the sort of trouble that we have at the moment.

Helen Jones (Warrington, North) (Lab): Will the hon. Gentleman give way?

Nick Harvey: I will press on. Introducing this system of practice assurance is intended to put us on the same footing as other professionals in other walks of life.

The rules of engagement will be drawn up by Members of Parliament. The rules against which our practice is judged will be drawn up by Members of Parliament. The contract with the professionals who carry this out will be set by Members of Parliament. The House will still have domain over its own rules and regulations and the practices that it puts in place to police them. This is not something being imposed from outwith, but we are using the expertise of professionals in other walks of life so that they can come in and ensure that we are adopting best practice in 2008.

Helen Jones: The hon. Gentleman will accept that outside the House proportionality applies. Therefore, will he explain to the House how much this system will cost and how much he expects to save for the money spent?

Nick Harvey: That question was asked a moment ago and I repeat what I said then. The objective of the exercise is to restore the reputation of the House and its Members. We cannot say how much it will save until we have tried the system and seen what it will save. What it will cost is laid out in the report and I invite the hon. Lady to have a look at it.

Michael Jabez Foster: Will the hon. Gentleman give way?

Nick Harvey: No, I am going to make some progress.

The second part of this is the question of formal financial audit. Our proposals involve the National Audit Office extending the scope of its audit of the House accounts and bringing it up to the general standards of the public sector. The NAO will continue its practice of sampling transactions and systems, but it is not the role of the external audit of our accounts to test the behaviour of Members. For the first time, the NAO will have the power to look behind the Member’s signature, and it has also indicated to us that reducing the receipt threshold will enable it to give assurance on the House’s accounts on a comparable basis to that which it offers on the accounts of other public sector bodies.

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