Select Committee on Members Estimate Committee Second Report

Second Report

1. In this report the Members Estimate Committee sets out radical issues for our root and branch review of allowances. Nothing is ruled in and nothing is ruled out but leaving things as they are is not an option. Many of these issues will be controversial. We want to hear comments from within and outside the House on which are the best ideas to pursue. There may be other issues we have not yet considered which could be brought forward now. The next stage will be for us to produce emerging conclusions in May. We aim to report in time for a debate in the House in July. This report therefore contains no recommendations. The House itself will have to decide on any changes to the allowance system in July.

2. The House referred to the MEC, on 24 January 2008, 11 recommendations from the Senior Salaries Review Body on Members' allowances. Shortly afterwards MEC's work was extended following the Fourth Report from the Standards and Privileges Committee concerning the use of the staffing allowance to employ relatives.

3. The MEC therefore decided to conduct a root and branch review of the allowances system. On 26 February the Committee reported:

"Our first priority is looking at radical options for restructuring pay and allowances. We are conscious of the need to establish a structure which will endure and will rebuild confidence. In doing this we will consider in detail the recommendations of the SSRB and review the Additional Costs Allowance.

As a first step, the Committee has agreed that the threshold of £250 for invoices and receipts should be reduced from the start of the next financial year.

The next priority is a robust and transparent process for claiming allowances and auditing them. Building on the recommendations of the Audit Committee and the SSRB we have asked the Department of Resources to draw up in consultation with the NAO and others several options for a better way of claiming and checking allowances. These will help identify a new system which is workable, in line with practice elsewhere and able to command public respect."[1]

4. We have already decided that all claims for items worth £25 or more should be accompanied by receipts with effect from 1 April 2008.[2] In paragraphs 49-53 below we raise issues about how this new claims threshold can be under-pinned by a more rigorous audit regime.

5. In drawing up this issues paper, the Committee has taken into account suggestions made in meetings with Members from all sides of the House as well as the many comments made from outside the House. It is clear that there is a widespread desire for radical reform. The Members Estimate Committee is committed to leading and delivering this reform. We want the House to have a system that is above reproach and transparent. It must support and meet the costs of Members in their democratic role. It must also encourage candidates from diverse backgrounds—irrespective of personal financial means—to stand for Parliament. This paper poses a series of questions for those inside and outside the House across a wide range of issues—with nothing ruled in or out. The aim is to elicit reaction about which ideas seem the most workable. We will discuss these matters and our emerging conclusions with the Committee on Standards in Public Life, among others. We expect these conclusions to be tested thoroughly against the principles which apply generally to expenses systems in the public and private sectors.

6. The Committee has also taken into account the report—published on 11 March 2008—of the Independent Review of Parliamentary Allowances in the Scottish Parliament which deals with many of the same issues. The papers to that review include a description of pay and allowance arrangements in Commonwealth and European Parliaments.[3]

1   First Special Report, HC 368, paras 2-4. Back

2   First Report, HC 415. Back

3 Back

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Prepared 2 April 2008