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I support with enthusiasm the proposal from the Members Estimate Committee, and I hope that the House listens very clearly to the warnings that my hon. Friend the Member for North Devon (Nick Harvey) and the right hon. Member for Maidenhead (Mrs. May) gave, because unless we are robust on the issue, and unless the amendment in the name of the right hon.
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Member for Islwyn (Mr. Touhig) is defeated, we will undermine all the work that people have been trying to do to ensure that we are seen to be absolutely transparent in our practices. It is completely unacceptable to propose, as the amendment does, an audit only for the additional costs allowance, rather than a full audit of all that we do with public money. It is completely unacceptable, and if the right hon. Gentleman and his colleagues win the vote, it will be a shameful day. I hope that colleagues—

Mr. Betts: Will the hon. Gentleman give way?

Simon Hughes: No, I will not give way, because I said that I would restrict my contribution to six minutes.

I hope that colleagues are absolutely clear about the need to turn over the page and introduce a transparent system with proper auditing, so that everybody here is affected and everybody out there knows that we have our expenses policed in the same way as everybody else who is in public service and in the public pay. I pray in aid—if I needed to—the chairman of the Committee on Standards in Public Life, who has been very clear that he and his colleagues will, as they should, keep on watching what we do. He has also made it clear that if we accept the proposals, it will be a good starting point but nothing more, and that watering them down will not do.

The proposals on properly managed arrangements for constituency offices are welcome, and as I said to my hon. Friend the Member for North Devon by way of my amendment, which I shall not press to a vote, the arrangements need to start as soon as possible. I am grateful for his assurance in respect of that. The separate mileage allowance proposal, which will entitle Members with large and sparsely populated constituencies to more than Members, such as me, with smaller constituencies, is also welcome.

The proposal to change the additional costs allowance is a good one. It will provide a cash sum of up to £19,000 for a second, London home for non-London MPs, and they will be able to do what they want with the money. It rightfully does not include furnishings and all the other stuff; it is a sum of money, and colleagues can decide how to spend it. That is the way other people are reimbursed when they have to work away from home, and that is how colleagues in this place should be reimbursed.

It is also right that we end the absolutely disgraceful way in which, under the current arrangements, colleagues from outer London have been able to take full advantage not only of their own home, but of a second home at the same rate, even though in some cases they have lived only a matter of 20, 30 or 45 minutes away from here. We have to be very clear about those things.

I have two final points. First, it seems right that travel allowances should be tightened further and given only to spouses or civil partners, rather than to other people in a relationship. That seems to be right and good, and we have to be tough about it. Secondly, on the point about addresses, I think that I am in as good a position as anybody to comment on the risks that people have to live with. I have lived under police protection, as have other colleagues, but the proposal to hide one’s home address is a complete nonsense. The reality is that one stands for election as a public representative, one knows the risks when standing and declares one’s address on the ballot paper.

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Miss Ann Widdecombe (Maidstone and The Weald) (Con): rose—

Helen Jones rose—

Simon Hughes: No, I will not give way.

The only exception—[ Interruption.]

Mr. Speaker: Order. I know that some Members disapprove of what the hon. Gentleman is saying, but he is entitled to be heard.

Simon Hughes: I am grateful for that, Mr. Speaker.

The only exception should be if one can demonstrate such threats that the electoral registration officer is persuaded to exclude one’s name from the electoral register. Otherwise, we are all on the electoral register, anybody can find our constituency address and they should be able to do so. The only perfectly good and proper argument is that the addresses of colleagues’ second, London homes, which they have when they work in Parliament, should not be a public matter, because they have nothing to do with their constituents. In the interests of security, those addresses should be protected.

Several hon. Members rose

Simon Hughes: I am not going to give way, simply because I said that I would be very brief.

I am clear that many colleagues take a different view from mine. An order will come before the House to be voted on. I understand the threats under which people and their families live, but we need to err on the transparent and open side of the line. We are different from judges and other people. We are elected to be public servants accountable to our electorates, and the public should be absolutely aware of where our homes in our constituencies are, so that they can judge about where we live as well as know about us, the people whom they elect. The vote may not be won. It is less important than the other vote. However, I hope that the suggestion of a reduced audit is rejected, because introducing such an audit would be a catastrophically foolish and wrong decision.

4.50 pm

Mr. Don Touhig (Islwyn) (Lab/Co-op): The hon. Member for North Devon (Nick Harvey) and I exchanged some barbed comments. That is perfectly normal in this House and in no way diminishes my respect for him and other members of the Members Estimate Committee, who have done a difficult job. I greatly admire what they have done. However, I hope that those of us who disagree with elements of the report are not going to be cast as people who are against reform or transparency.

I cannot pay such a tribute to the hon. Member for North Southwark and Bermondsey (Simon Hughes). He can wear his hair shirt and be sanctimonious if he wants. As is typical of the activities throughout his political life, he thinks that there is a way of making smear some sort of progress in this House. Those of us who oppose some of the report are not anti-transparency or anti-reform.

In tabling the amendment, I strongly support the introduction of a robust system of scrutiny for parliamentary allowances in order to rebuild public confidence. The Members Estimate Committee has made
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some excellent recommendations, which many on both sides want to be implemented. However, although I accept most of the recommendations and the spirit of the report as a whole, I have tabled the amendment, with the support of others, because of my experience on the Public Accounts Committee.

Our amendment calls for 25 per cent. of Members’ additional costs allowance claims each year to be audited and for the auditing of every Member’s additional costs allowance every parliament. We are proposing a very thorough internal audit system performed by an in-house team set up on the model of the National Audit Office and working at arm’s length from the House authorities, rather than by outside auditors from big City firms that would cost the taxpayer millions of pounds.

My experience on the Public Accounts Committee has taught me that unless auditing is approached in the right way, it can incur such disproportionate cost that, far from safeguarding taxpayers’ money, it undermines the purpose of the audit in the first place. The report proposes a system of assurance audit of Members’ office cost allowances. That proposal is ill-thought out. From what the hon. Member for North Devon has said, it appears not to be properly costed. There is no evidence that it is needed.

The lapses in standards that have besmirched the reputation of the House recently have all been to do with the operations of the additional costs allowance and salaries. I am not aware of any problems or failure of standards as far as the office costs allowance is concerned. If there were thought to be problems, we should have a report—and if problems were found, of course there should be a great deal of scrutiny and audit. I would support the recommendation on that basis. I stress that I am not opposed to the proposal; however, the Committee has given no grounds, made no proposals and given no information on how we can justify the spending of this vast amount of money.

Mr. Kevan Jones (North Durham) (Lab): When we attended the briefing from the Members Estimate Committee at lunch time, many of us were shocked to learn that despite what I thought were the rules—that we had to lodge contracts of employment and terms and conditions of employment with the Fees Office—87 Members refused to do so, and have been allowed to get away with it.

Mr. Touhig: My hon. Friend makes a good point; that is how the system is operating.

If we accept all the recommendations of the report, as proposed by the hon. Member for North Devon, we will commit ourselves to employing hundreds of accountants who will travel Britain at great cost to the taxpayer, checking on whether a Member from the north of Scotland has spent too much on paper clips and on whether a Member from the south-west could have bought toilet paper for his office staff cheaper at the Co-op than he could at Tesco.

Bringing in outside teams of auditors always sounds good, but it can be expensive and it undermines the objective of sensible spending. My colleagues on the Public Accounts Committee and I are forever upbraiding Government Departments for spending millions of pounds
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on consultants. Let us not make the same mistake. The Members Estimate Committee wrote to Sir John Baker on the separate issue of Members’ salaries and stated that the pay issue had got out of all proportion to its real significance to the public purse. With the proposed audit, we are in danger of making the same thing happen. There is a great danger that if we make that mistake on Members’ allowances by spending a disproportionate amount of money on external auditors, we will have a high cost to pay at the end of the day. What is needed is not outside auditors but the development of auditing expertise within this House so that we do not create waste when we need transparency and good use of public money. Let us involve the National Audit Office in helping us to set up our own internal audit system so that we do not spend more money on things that we cannot justify.

The amendment that I have tabled, with the support of others, supports the continuation of the principle of the ACA to meet the necessary costs of MPs living away from home. I think that most fair-minded people would accept that the extraordinary situation of an MP needing to live both in his or her constituency and in London requires an allowance to support those costs.

However, there is no getting away from the fact that the confidence of the public in Members has been severely damaged by press stories about allowances and expenditure. That is why I support most of the recommendations in the report, which present the House with an opportunity to bring about a system that is transparent and open to scrutiny. It is a chance for Members to demonstrate that they are serious about restoring public faith in Members of Parliament. We are charged in this debate with restoring public confidence in this House and in our political system. We all recognise, I think, that it is imperative to put in place a system with clear guidelines and spot checks, but we must get the right system. Of course, underlying any debate on reform of the ACA is the fact that we should be seen in this House to be exercising the same type of restraint that has been asked for from others in the public sector. For that reason, my amendment supports the freezing of the communications allowance and the introduction of restrictions on Members claiming for travel.

At a time when public perception of politics and politicians is at an all-time low, the decisions that we make today will help to restore public faith in us. It is up to us to reaffirm that public service for its own sake is worth while and honourable. Given the way that the report has gone, I do not believe that we will currently be able to do that.

4.56 pm

Sir George Young (North-West Hampshire) (Con): I want to contribute briefly to this debate because the Committee that I chair monitors the arrangements for allowances, and we therefore have an interest in the issues under discussion. I begin by thanking our three colleagues for the speed and efficiency with which they conducted their report. I broadly agree with the direction of travel, but there are some interface issues between the existing regimes and what is proposed that we need to tease out and to which I shall turn in a moment. Given the tight time scale and the complexity of the issues under debate, I can understand why this time it was not possible to involve a wider range of interests in
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the Committee’s conclusions. If we go round the course again, it might be better to take slightly more time to resolve some of the issues that remain unresolved and to deal with some of the anxieties that have been expressed in this debate.

My Committee supports proportionate measures that drive up standards and reduce the likelihood of colleagues falling foul of the rules. There is some evidence that over the years we have made significant progress in that regard. If one goes back a number of years, the principal causes of complaint were on matters such as the non-disclosure of interests and the acceptance of cash for activities such as questions and lobbying. Firm action by the House has dealt with those. More recently, the complaints have been about misuse of allowances, and they have formed a prominent part of my Committee’s work. We need the same robust approach to deal with those. The communications allowance is proving a fertile ground for complaints given the inevitably fine and not always clear line between a Member’s parliamentary and party political roles. I am glad that the MEC has accepted the implementation of my Committee’s recommendations on the communications allowance. I hope that that will reduce the risk of Members facing complaints about their publications, and I strongly commend the case for seeking pre-clearance from the Resources Department.

On accountability, we need to lead by example. Our arrangements should reflect best practice in the public and private sectors. That does not mean a hair shirt approach, but it does mean systems that are open and transparent about what we are reimbursed for and why, effectively administered and subject to independent audit. The MEC proposals move in the right direction, and I welcome that.

I want to make one general point and then put down two markers. The general point is this: having been Chairman of the Committee on Standards and Privileges for some seven years, it is my view that the vast majority of Members are honest folk who did not become Members to enrich themselves but to do a useful job in public life. They genuinely do their best to abide by our rules, which are often complex and less than clear. If they break the rules, the consequences can be terminal, as we have seen. I know that not everyone outside will accept that view, but I believe it to be the case, and it should be said.

The first marker is that it is important, as we improve transparency and accountability, that the House’s arrangements for the independent investigation of complaints should not be compromised. My Committee would be concerned if the proposed practice oversight arrangements and the greater depth of external audit were to compromise the House’s arrangements for the investigation of complaints. I welcome the undertakings given earlier in this debate by the hon. Member for North Devon (Nick Harvey) to consult the Parliamentary Commissioner for Standards and my Committee on the mechanics of implementing the relevant recommendations.

The second marker is this: as we look for greater accountability, we risk the regulatory pond becoming unduly crowded. Putting to one side the Committee on Standards in Public Life, which will have an ongoing interest in the issues that we debate, it seems likely that all the following bodies will have some direct interest in the practical operation of the revised arrangements: the
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Parliamentary Commissioner for Standards, my Committee, the Members Estimate Committee, the Speaker’s advisory panel, the Department of Resources, the National Audit Office and the practice assurance teams and whatever new Committee they report to. The risk is clearly one of over-supervision, which, rather than improving clarity and assurance, would have the contrary effect as those bodies trip over one another.

In conclusion, I welcome the Members Estimate Committee report, and the cautious welcome that it has received from the Committee on Standards in Public Life. I assure the House that the Parliamentary Commissioner for Standards and my Committee will play their full part within the framework laid down by the House to ensure that any new arrangements work effectively, and that they help to rebuild confidence in allowance arrangements that are fair to the House and the wider public interest.

5.1 pm

Mr. David Winnick (Walsall, North) (Lab): The public’s concern on this issue is not confined to—or indeed, in any way involved with—the filing system in our offices. It goes somewhat deeper than that. Virtually every reform on financial matters, apart from our salaries, has come about because of some scandal. The same is true of what we are debating today. As the hon. Member for North Devon (Nick Harvey), who spoke on behalf of the House of Commons Commission, mentioned, the scandal referred to in the report led to the recommendations before us today. Similar matters have arisen on previous occasions. In the late 80s and early 90s, there was the issue of payment for questions, and as a result of what The Sunday Times did—I congratulated that paper at the time—a number of reforms came about, which should have been put in place earlier.

I regret that this review has been entirely in house. The Chair of the Committee on Standards in Public Life said that a better way of doing things would have been through a committee of Members of Parliament and outsiders. I agree. I am not altogether certain that having a report from a body made up exclusively of MPs will restore public confidence in any way. One should not forget that it was only a year or so ago that attempts were made, supported, as I understand it, by the House of Commons Commission, to exempt Parliament from the Freedom of Information Act. What would the position have been if that had come about? Inevitably, there would have been a strong feeling that we were afraid of exposing our allowances. Everything would have been done on a voluntary basis, and it certainly would not have been done as a result of what has been decided by the Information Commissioner and the High Court. We would have been saying, in effect, that all other public bodies would be subject to the Freedom of Information Act, but that this House, which was responsible for introducing and passing that law, would be exempt. That would have been a disgraceful attempt at a cover-up, and I am pleased that it never became law.

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