Appendix 1: Paper by the Committee on
Standards in Public Life
Principles to govern a review of MPs'
allowances
This note sets out the principles which the Committee
on Standards in Public Life believe should be followed in the
review of MPs' allowances currently being conducted by the Members
Estimate Committee. It has been produced following a discussion
between the Chairman of the Committee and Mr Speaker, and a separate
discussion with the Members Estimates Committee.
It starts from the premise that it is in Members'
own interest, as well as that of the public, that the arrangements
for their remuneration and reimbursement of expenses should meet
the highest standards of transparency, probity and accountability.
It is clear from recent events and the reaction to them that the
current arrangements fail to meet those standards in a number
of respects. Our understanding is that a large number of MPs share
that view.
We therefore welcome the decision to review the current
arrangements and the steps that have already been taken towards
greater transparency and accountability. Should Members take the
view, however, that the public credibility of the review would
be greater if it were undertaken independently of the House of
Commons, as with the recent independent review of Parliamentary
allowances in Scotland conducted by a panel chaired by Sir Alan
Langlands, we would be prepared to undertake such a review ourselves.
Depending on circumstances, and in the event that the outcome
of the current review fails to command public confidence, we may
wish to do so in any event.
In the meantime, and in the absence of hearing the
evidence which we would expect to take should we mount our own
review, we have not felt it right to pronounce on the detail of
the allowance structure. But we are clear about the principles
which we would expect reforms to follow if confidence in the system
and in the probity of Members of Parliament is to be restored.
The principles which we suggest should govern the
review are as follows:
General
1. Members of Parliament have a duty to demonstrate
leadership in the observation of the 7 Nolan principles of public
life, as set out in the Parliamentary code of conduct. We expect
they would wish to do so anyway.
2. There should always be a clear distinction
between pay, reimbursable expenses, and the resources provided
to Members to enable them to carry out their jobs effectively—accommodation,
staffing , IT etc. Nomenclature should reflect this.
3. The system for claiming costs incurred by
Members of Parliament in performing their public duties should
be based on the reimbursement of actual expenses, not on entitlement
to "allowances". Again, nomenclature should reflect
this.
4. Members of Parliament should take personal
responsibility for ensuring that any expenses claimed or resources
used in pursuit of their duties are properly incurred. They should
be at least as careful in the spending of public money as of their
own.
5. Members of Parliament should be as open and
transparent as possible about their expenditure and the claims
they make on public funds, subject only to data protection or
security considerations.
6. Arrangements should be as simple as possible
both for ease of administration and transparency.
7. Robust but proportionate audit is needed to
restore confidence. It must be shown to be sufficiently independent.
Pay
8. Members of Parliament have the right to expect
to be paid a reasonable salary for the work they do.
9. But they should not be responsible for setting
their own salaries, both because that creates a conflict of interest
and exposes settlements to political pressures.
Expenses
10. Members of Parliament should be entitled
to be reimbursed for reasonable expenses incurred wholly, necessarily
and exclusively in the performance of their Parliamentary duties.
11. But such expenses should never be regarded
as a substitute for pay.
12. Nor should Members seek any personal financial
benefit from them, either directly or indirectly.
13. Wherever reasonably possible, all claims
for expenses should be backed up by receipts or other appropriate
documentation, available to be produced if necessary.
14. Claims should be subjected to robust audit
on a sample basis using a proportionate and risk-based approach.
Members should be expected to retain receipts for a set period,
perhaps three years, to make this possible.
15. Maxima placed on claims for expenses should
be regarded as such and not as entitlements. This principle is
particularly important in any consideration that may be given
to removing elements of the expense regime and reflecting them
in pay.
16. In deciding whether to make a claim, the
spirit of the rules should be respected as well as the letter.
17. There should be no double benefit for Members
who are also Ministers (for example claiming for the cost of maintaining
a second home in London if a grace and favour home is provided).)
18. Expenses incurred by or on behalf of third
parties should not be reimbursed unless exceptionally incurred
to enable the Member to perform their Parliamentary duties.
Resources
19. Members of Parliament should, in line with
other public servants, be given the means to undertake the duties
for which they have been elected.
20. Wherever practical and economic, such resources
should be centrally procured.
21. There should be no cross-subsidisation between
resources provided to enable Members to undertake their Parliamentary
duties and party political activities. Preserving this boundary
is vital to public confidence in the arrangements and it must
be rigorously policed. Where premises or staff are shared, it
should be possible to demonstrate that such cross subsidisation
is not occurring, and the arrangements should be subject to occasional
audit.
22. Members of Parliament should be able to select
their own staff including, arguably and where appropriate, family
members. But the need for each post should be clearly established
and staff should always be employed against a contract setting
out their duties. They should be able to demonstrate that they
have appropriate skills for the job; and their salaries should
be commensurate with their responsibilities, experience and skills.
Observance of this should be auditable. Ideally all such payments
should be made centrally and direct to the staff member concerned.
In accordance with best practice, employment of all staff should
be supported by a statement of objectives and by periodic appraisal.
Transition
23. While a transitional period may be necessary
for any major changes, this should not extend beyond the next
general election. Existing Members of Parliament should know the
basis on which they will be remunerated and supported at the time
they choose to stand for re-election.
Committee on Standards in Public Life
April 2008
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