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3 July 2008 : Column 1105

On the security of the public, I have mentioned members of the public who live in the same blocks of flats as Members. A further point is that the publication of our addresses would inevitably mean more incidents at our homes, which would mean more police tied up with the task of protecting us. I felt that very strongly when about 12 police had to be around my home, instead of policing in my constituency, when Fathers 4 Justice campaigners were on my roof.

Having discussed the matter with the Lord Chancellor and the Law Officers, I can tell the House that the Government intend to introduce a statutory instrument under section 7(3) of the Freedom of Information Act, which will exclude Members’ addresses or any material that could lead to the identification of Members’ address. We will bring it before Members on the Floor of the House before the House rises for the summer recess.

Stephen Pound (Ealing, North) (Lab): For those of us who are slow learners, can my right hon. and learned Friend clarify a point for me? Some of us do not claim for a second home and our only home address is always printed at the start of every election campaign, despite the risk of ne’er-do-wells. Will our home addresses no longer be published or does this apply only to those who claim for a second home?

Ms Harman: I am referring to a statutory instrument that would introduce an exclusion from the freedom of information legislation for the information that the House authorities hold on Members. The House authorities hold information about addresses beyond claims of additional costs allowances, because they hold information on destination of travel for Members. All that information about Members’ addresses would need to be considered for exclusion.

Simon Hughes: Will the Leader of the House give way?

Ms Harman: I wish to press on, because I know that many hon. Members want to speak on these issues.

If I may, I shall now turn to the motion moved by the hon. Member for North Devon (Nick Harvey). The Government do not take an official position on the proposals in the MEC report, which is a matter for the House rather than the Government. However, it is right and necessary to have strengthened and independent audit of our expenditure on our offices, travel and accommodation, and that will be a necessary step in regaining the public confidence that has been so severely dented by the disgraceful actions of a tiny minority of Members. I will support the motion standing in the hon. Gentleman’s name and reject the amendments.

I also wish to place on record my thanks to the hon. Gentleman and to the other two members of the MEC three. They have received little thanks in the House, but I wish to thank them for the dedicated work that they have done on behalf of us all.

4.27 pm

Mrs. Theresa May (Maidenhead) (Con): We had an important debate earlier on the future determination of MPs’ pay, but this debate is every bit as important. Indeed, in relation to the need to show that hon. Members recognise the depth of concern outside this House, not
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only about the use of taxpayers’ money, but the relationship of practices here to those in the outside world, this debate is in fact the more important.

Before I go into more detail, I wish to pay tribute, as the Leader of the House has just done, to the work of the group that came to be known as the MEC three—the hon. Members for North Devon (Nick Harvey) and for Middlesbrough (Sir Stuart Bell), and my right hon. Friend the Member for Penrith and The Border (David Maclean). Theirs has not been an easy task, but they have put in many hours of work on behalf not only of the members of the MEC, but of all hon. Members.

The debate is important for the following reasons. We all know that to do our jobs we need budgets to meet our office costs. There are probably as many structures as there are MPs, because we all do things differently. Our constituencies are different, and no one model can be imposed on us all. It is also right that we are able to claim for costs incurred for working away from home as would happen in any other field of employment. But the approach that has been taken by MPs to the use of taxpayers’ money for expenses and allowances has over the years been seen by taxpayers to be secretive and to fail to follow best practice.

Above all, Parliament has been seen as failing to recognise that life has changed. Outside this place, in any other business, compliance is the order of the day. We have appeared to be willing to require others to do that which we are not prepared to accept for ourselves. Crucial to that is the issue of audit.

I chair the Audit Committee, which, under various Chairmen, has pressed for proper audit of MPs’ claims since 2004, as the MEC report states in paragraph 27. In what other walk of life would it have been possible regularly to claim expenses for £250 a time without a receipt? In short, we have been seriously out of touch and careless of our duty to taxpayers. Members, before they vote on the issue, should have a care and consider the damage that that has done to the House.

We can argue about the media’s role. They certainly have a lot to answer for, but frankly so do we. The reputation of the House has been damaged and today we have a duty to put in place the changes necessary to restore confidence in Parliament and in MPs’ use of taxpayers’ money and to make this institution fit for the 21st century. There are two areas where people have particularly found us to be out of touch. One is audit and the other is transparency. Transparency has been resolved following the High Court judgment. All Members’ claims will be published with receipts later this year. That will, of course, be of some cost to the House but I believe that it is right to embrace that transparency. It will be an important means of showing taxpayers that their money is being properly spent. The only exception to transparency is the issue of addresses, which I shall touch on later.

On transparency, the official Opposition have already introduced a right-to-know form for Front Benchers. It reflects my right hon. Friend the Leader of the Opposition’s strong support for transparency, which he has made clear in a number of public statements. I said that there were two areas in which people feel that we are out of touch. One is transparency and the other is audit. I want to refer to the Members Estimate Audit Committee paper, which is published in the MEC report. On the governance framework, it makes the point that

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I believe that the paragraphs and proposals in the report on audit and assurance are important, if not the most important, parts of the MEC report.

Traditionally, the view was taken that a Member’s signature was sufficient for a claim and there should be no need for any proof. Today we live in a different age. That is not to say that we are not honourable Members, but we must accept that today in all walks of life people are required to be scrutinised and checked in their use of finances in a way that never used to be the case years ago. We cannot ignore that and we must be willing to accept for ourselves the same sort of regime as we expect others to adopt.

We must also not forget that the traditional practices are not good enough for the people we serve. We must be willing to institute procedures that are modern, clear and without room for interpretation.

Mr. John Spellar (Warley) (Lab): The right hon. Lady might be due to come on to this, but is she giving any account to the concept of proportionality? Given the amount that is fixed in what we pay, for example in our offices—the vast bulk goes on salaries—does she think that three days with an auditor from PricewaterhouseCoopers at £1,200 a day crawling all over our constituency offices is a proportionate response or good value for money?

Mrs. May: I believe that the proportionate response that is needed from this House is the restoration of its reputation and that is what the MEC report provides. That is why I believe that it is important that when hon. Members vote today they should recognise the need to think not just about our individual situations but about the damage that has been done to this House by our failure to adopt best practice in those areas before now. We need to show taxpayers that we have understood the depth of people’s concerns and have been willing to respond, to get a grip on the problem and to sort it out. As the report says in its conclusions and recommendations:

Tom Levitt (High Peak) (Lab): The right hon. Lady has talked about transparency and good practice. Is it not worth putting it on the record that Members of the House did not even know of the existence of the John Lewis list until a few months ago, so that it was not possible for us to be transparent or to show best practice?

Mrs. May: I certainly accept that, as the hon. Gentleman says, many—in fact, most—Members of the House did not know of the existence of the John Lewis list before the story appeared in the newspapers; it is worth putting that on the record. That does not change my view that we should effectively abolish the John Lewis list by taking away the right to claim for items that appear on it, including furniture and fridges.

The MEC report proposes two levels of assurance. One of them is what has been referred to as practice
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assurance. I noted what the hon. Member for Wrexham (Ian Lucas) said about how the term could be misinterpreted. It is important that the hon. Member for North Devon, who speaks on behalf of the House of Commons Commission, and I, as a member of the Commission, make it clear that the intention is to provide assurance about the financial arrangements for claiming taxpayers’ money from the House. There is a difference between that assurance and audit. The practice assurance is as much about advice, help and support for Members as about scrutiny and checking on Members. The service will not only help Members to ensure that they properly understand what can be claimed through the green book, but help them to improve their record-keeping and their claims processes. Audit, on the other hand, is about scrutiny.

Sir Patrick Cormack: I am grateful to my right hon. Friend for giving way, but I would be even more grateful if she made one thing plain. When I first came to the House, there were no allowances for any of the things that we are discussing, and one had to provide everything for oneself. However, many hon. Members have come to the House since the allowances were available. There has been a fixed sum beyond which they could not claim, and the sum had to cover their rent. I know that many members of the shadow Cabinet made legitimate claims for furnishings when they were first elected to the House. Please may we move away from any insinuation that the behaviour of the vast majority of Members has been anything other than entirely proper?

Mrs. May: If my hon. Friend took my words as such an insinuation, then they were not what I intended. As I mentioned earlier, I am not saying that we are not honourable Members. However, our failure to recognise the concern outside this House about our processes, and the failure to recognise that people expect us to adopt the best practice that has been adopted elsewhere in the public and private sectors, has led to cynicism and damage to the reputation of the House, and we need to address that.

Over the years, Members of this House have claimed according to the rules that existed at the time, but the rules have changed. An important element of the process is ensuring that when we adapt the green book, Members are fully aware of, and are given proper advice by the Fees Office on, the rules that are in place.

Michael Jabez Foster: As the right hon. Lady says, the rules have changed; the broad-brush approach is no longer acceptable and every penny must be identified. However, Members spend large sums of money that do not count as recoverable expenditure, and will now do so to an even greater extent. Does she agree that that means that we should also look into the way in which Members are taxed? Perhaps they should be taxed as small businesses, rather than as employees, as they are at present.

Mrs. May: I know that the hon. Gentleman has tabled amendments on the issue, but I can only say that I would resist the temptation to go down the route of discussing MPs’ tax status. That would lead us into a whole other set of debates. We are talking about the processes that the House adopts for claims that we Members of Parliament make.

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I accept the point made earlier by the hon. Member for Lanark and Hamilton, East (Mr. Hood) about the problem of sometimes having to wait a considerable time for claims to be met. The best option would be to be able to invoice the Fees Office directly, and for it to pay Members directly, rather than Members having to pay out themselves; but for many expenses, such as those covered by the additional costs allowance, that is not always possible.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): Will the right hon. Lady give way?

Mrs. May: I will give way one more time, and then I will make some progress.

Mr. Betts: Will the right hon. Lady make it absolutely clear to the House whether it is essential to have both the extra external audit and the extra assurance process? Surely that will mean significant costs as a result of external auditors being brought in, and extra staff in the finance department so that the assurance people can do their work. Extra staff are already needed because of the pressures resulting from reducing the receipts level to £25, and extra staff will be needed when the level is reduced to zero. In addition, MPs’ office staff will spend extra time on the issues. Are those not all considerable costs, and could we not make do with just one of the elements?

Mrs. May: I believe that we need both, because they are different—as I have been trying to explain. I shall come on to the point about audit in a moment, but financial practice assurance is about giving support and advice to Members of Parliament as well as checking what they do. It is not just about claims: it is about best practice, and encouraging Members of Parliament to adopt best practice in their offices.

Audit is about checking and scrutiny, and making sure that MPs submit correct claims. Random audit by an external auditor—and the NAO’s reputation inspires confidence in people outside the House—would give the public confidence that money was being spent properly. As the hon. Member for North Devon said, it would also put the House on the same basis as other public sector bodies.

Checking and scrutiny are extremely important and introducing them would—crucially—incorporate best practice in the House. I refer to the letter from the Chairman of the Committee on Standards in Public Life, which was mentioned earlier by my hon. Friend the Member for North-East Hertfordshire (Mr. Heald). It states:

I agree with Sir Christopher Kelly: our responsibility as Members is not to think only about our personal interests, but to think about the House and to do what is necessary to restore trust in it. Amendment (d), in the name of the right hon. Member for Islwyn (Mr. Touhig), proposes a reduced level of assurance and does not
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incorporate external scrutiny. That is why I believe that it does not go as far as is necessary to ensure that we provide confidence and trust for members of the public. Voting in favour of that amendment, or against the main motion, would be to say to people outside the House that we do not accept that they are concerned, and that we are not prepared to take the steps necessary to improve the House’s reputation. If we sent out that message, we would tarnish the House’s reputation further. As the hon. Member for North Devon said, that would be catastrophic. Today is our opportunity to restore faith in the House.

I just want to say something about the ACA proposals. The MEC looked at three options, but I have never left my personal view in doubt, having said in public several times that my preference would be to abolish the ACA and incorporate it in salary. However, I know that that will not satisfy the House’s requirements today.

I do not approve of per diem expenses, and that is why I am pleased that the £140-a-day option was not the one preferred by the MEC. I remain concerned—as, I know, does my right hon. Friend the Leader of the Opposition—about the element of per diem expenses incorporated in the ACA proposals, as that would mean that some money would be claimed for which there was no transparency.

However, the overall benefits of the MEC report package outweigh that concern. The proposals would tighten up how claims are made, introduce necessary audit procedures and bring the House’s business and procedures in line with best practice elsewhere.

I fully support the Leader of the House’s proposals on MPs’ addresses. They are important for us, but also for those members of the public who reside in blocks of flats where MPs also live. They might feel that they would be a target if the addresses of MPs in one block were published.

This House has a very important decision to take today. We have the opportunity to start the process of restoring confidence in Members and the processes of the House. We can put our heads above the parapet and say, “We understand the degree of concern that exists outside this House, and we are willing to take the necessary action.” I hope that the House will therefore support the motion in the name of the MEC.

Several hon. Members rose

Mr. Speaker: Order. I call Simon Hughes, but before I do so, may I say that the Back Benchers have not been able to get in? I set a limit of eight minutes, but I am putting that limit down to six minutes so that I can at least get some Back Benchers in.

4.44 pm

Simon Hughes (North Southwark and Bermondsey) (LD): I am grateful for that, Mr. Speaker. I shall respect that timetable as well.

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