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22 Jan 2009 : Column 915

Motion 4 —Members’ Allowances (Audit and Assurance)—

Motion 5 —Committee on Members’ Allowances—

(1) There shall be a select committee, called the Committee on Members’ Allowances,

(a) to advise the House of Commons Members Estimate Committee on the discharge of its functions; and

(b) to advise the Speaker, the Members Estimate Committee and the Leader of the House on the potential development of the arrangements made by or under the Resolutions in force from time to time regarding Members’ allowances &c;

(2) The committee shall consist of eight members;

(3) Unless the House otherwise orders, each Member nominated to the committee shall continue to be a member of it for the remainder of the Parliament;

(4) The committee shall have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to appoint specialist advisers and to report from time to time.

In Standing Order No. 152D, leave out lines 23 to 25;

Paragraph (5) of the Resolution of the House of 5 July 2001 relating to Members’ Allowances, Insurance &c. shall cease to have effect.

Ms Harman: I first want to set out the basis on which we approach this issue. I want this debate to proceed not as a Dutch auction of which party can do most to besmirch the reputation of MPs. I am not going to do that, because it would be wrong. We are public servants committed to our public duties and that is how we should approach this debate.

There should be proper resources to enable MPs to carry out our work, and we need to be sure that those allowances are not abused and that no MP uses them to line their own pockets. When that happens, as it did so disgracefully in the case of one particular Member last year, it is not only the public purse that suffers. What suffers is the reputation of this whole House and of every single Member who works hard and abides by the rules. It is to take further steps to prevent the possibility of that abuse that I bring these motions to the House today, so that the public and the whole House can rest assured that public money is properly spent.

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Mr. David Kidney (Stafford) (Lab): For 11 years I have been conscientiously filling in expenses claims forms, attaching copies of invoices and taking very seriously the words on the certificates that I sign, which read:

I was therefore shocked to hear the police explain last year that there would be no prosecution of an hon. Member caught fiddling his expenses because the rules of this House were—they felt—not clear enough. Can my right hon. and learned Friend confirm that the legal advice that she has states that no such excuse will be given by the police in future, and that someone who fiddles his or her expenses with dishonest intent will be prosecuted?

Ms Harman: My hon. Friend has made an extremely important point. One of our aims in introducing the new Green Book, which is the subject of the first motion, is to ensure that the rules are absolutely clear and detailed, and that the required evidence is supplied before payments are made. That will apply whether the amounts concerned represent reimbursement for items bought or, more important, payment of staff. Staff will not be paid unless there is a signed contract of employment and a job description, so that no one can say afterwards, “Oh, yes, actually they were doing that job, but I did not have any evidence because I did not need any evidence.” It is precisely to protect hard-working, law-abiding, conscientious public servants such as my hon. Friend, who are stained by those who abuse the rules, that we are introducing the tougher rules in the Green Book today.

I thank the Members Estimate Committee and the officers and staff of the House of Commons Commission for their contribution to the work that lies behind the motions that we are debating. I should not have been able to present the motions to the House without their advice, expertise and many hours of meetings and work since last December, when I first outlined to the Members Estimate Committee the approach that I am taking today.

When I became a Member of Parliament in the 1980s, there were three major problems, which have been addressed bit by bit over the years. First, the resources for our offices were wholly inadequate. That has been addressed over the years, and rightly so. Last year my office handled 6,300 individual constituents’ cases. Each letter, e-mail, phone call or surgery visit was handled within, on average, 10 working days. My constituents have a right to expect us to have the resources to do the job for which we are elected.

The second problem was that the rules governing payment of the claims of Members of Parliament were—as was pointed out by my hon. Friend the Member for Stafford (Mr. Kidney)—loose and unclear, giving scope for uncertainty as a result of which abuse could take place. The third problem was that the public were given no information at all about who claimed how much and for what. The rules were published, but the outcome of those rules was not.

Over the years, we have increased the resources needed to enable us to do the work that our constituents expect. We have begun to publish information about Members’ allowances annually, and have broken it down into
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14 categories. However, we need to do more. There has been concern about three issues, which we sought to address through the work that we did in July last year and that we seek to address again today. We need to address the problem that the rules are not clear enough; we need to address the problem that audit is not robust enough; and we need to address the problem that not enough information is published. The propositions that we have put before the House today address each of those problems.

I approach this issue in the belief that the public are entitled to be confident that the public money that is being paid out is being paid out on the basis of a clear and reasonable set of rules, that they should be confident that those rules are properly enforced and that money is not paid out other than within them, and that the public should be able to know in respect of every Member—not just some—every year, as a matter of routine, how much has been paid in allowances and for what.

In respect of the first point on the need for clear rules, we submit the new Green Book to the House for its approval. Let me take this opportunity to thank the members of the Members Estimate Committee, the members of the Advisory Panel on Members’ Allowances—including its two independent members—and the many hon. Members who have contributed to the new Green Book. I also thank the Comptroller and Auditor General for specifying the level of evidence that is necessary for us to be confident that the rules are indeed clear, and can form the foundation for a robust audit. If we pass the motion endorsing the new Green Book, we shall have a clear set of reasonable rules for the payment of allowances.

The second issue is the proper enforcement of the rules. It requires robust audit, and that is the subject of a motion that will provide for what is described as “full scope” audit, on the same basis that applies to other public bodies. This will be the first occasion on which the House has been subject to “full scope” audit.

The House authorities will—as they do now—check each claim before payment is made, but that work will additionally be subject to the scrutiny of a new internal unit, the operational assurance unit. There will also be supervision by the National Audit Office. That scrutiny will consist of examining not just the claim form that the Member has signed, but the evidence submitted with that claim—for example, invoices, receipts, statements, or any other documentary evidence that supports the evidence of the transaction. The NAO will be in a position to carry out the “full scope” audit because, as well as clear rules in the Green Book, there will be a requirement for no claim save those under £25 to be met unless it is submitted with a receipt or other evidence confirming the transaction.

I thank the Members Estimate Audit Committee, including its four independent members and, in particular, its Chair, the former shadow Leader of the House, the right hon. Member for Maidenhead (Mrs. May). This is not glamorous work, but it is very important and the right hon. Lady’s report contains the proposals for the robust and independent audit for which the motion seeks the House’s support.

Kate Hoey (Vauxhall) (Lab): Does my right hon. and learned Friend now believe, on reflection, that it was not correct for anyone to try to secure an exemption
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from the Freedom of Information Act? Will she give a commitment that, while she is Leader of the House, no attempt will be made by Members of Parliament who passed the legislation on freedom of information to exempt themselves?

Ms Harman: I thought that that point might be raised, and I am about to deal with it.

Mr. Clive Betts (Sheffield, Attercliffe) (Lab): As a member of the Members Estimate Audit Committee, I want to make one thing absolutely clear, given comment in the media about the £25 threshold. That threshold has the full support of the National Audit Office and the independent members of the Members Estimate Audit Committee, and the NAO has confirmed its belief that it is a proper and proportionate figure that allows it to make a full and comprehensive estimate, to its satisfaction, of the allowances that we claim.

Ms Harman: I thank my hon. Friend for his work on the Members Estimate Audit Committee. As I have said, it is not glamorous work—it does not involve members of the Committee being carried through the streets of Sheffield to be thanked—but it is very important work, and the Committee has produced a substantial report.

My hon. Friend is entirely right. The National Audit Office has said that as 99 per cent. of the amount paid in allowances is paid in response to claims for more than £25, only 1 per cent. of claims will be submitted without receipts. That means that 99 per cent. of claims can be subject to a full audit with the full documentary evidence behind it, which is normal auditing practice.

Dr. Tony Wright (Cannock Chase) (Lab): It is easy to become confused about all the various bodies involved in this process. As my right hon. and learned Friend says, it is good and right and true that there is an independent element in the Members Estimate Audit Committee, but there is no such element in the Members Estimate Committee, nor will there be in the new Committee of the House whose establishment is proposed. The body that did advise on allowances and did have an independent element—the Advisory Panel on Members’ Allowances—is to be abolished. If we are to secure confidence in the system, is it not important for us to ensure that there is a robust independent element in the procedures according to which we set the allowances?

Ms Harman: It is right that there should be a robust independent element, and the “full scope” NAO audit should provide bottom-line confidence in, and reassurance on, that. It has been involved in our deliberations on, and construction of, the rules that we have drawn up with the independent advisers on APMA. If we pass the motion, the NAO will henceforth be permanently involved in scrutinising the allowances and making sure they are paid out only in accordance with these rules.

If we make APMA a Committee of this House, only Members of this House will be able to be members of that Committee; external, independent people will not be able to be full members of the Committee. The proposal is that those who have served so well as independent members of APMA will be advisers to the Committee on Members’ Allowances. I can say that the
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CAM will have no Government Members on it. APMA had members of the Government on it, but the CAM will not have a Government Member on it, and nor will it have a Government majority—it will not be constructed as Select and Standing Committees are, with a Government majority. Therefore, I think we have the right level of independent input and the right reassurances for the future.

Alan Duncan (Rutland and Melton) (Con): May I add to what the Leader of the House has said in response to the hon. Member for Cannock Chase (Dr. Wright)? Is it not also the case that whereas the previous Committee met in private and gave private advice, the great advance in what is proposed here is that this Committee will be open, so it will be able to take advice openly and everything it does will be subject to open scrutiny? Does she also agree that it will therefore have a much stronger and more open influence than the closed Committee that used to exist?

Ms Harman: I absolutely agree with those points. In addition, the new Committee will be able to require evidence to be brought to it and to publish reports. I take nothing away from the work of APMA in the past; since it was set up in 2001, it has done a very important job. However, the next stage is to move it on to a full footing as a Committee of the House. I will deal with this matter a little later in my speech.

The third principle is that, over and above the clear rules and robust audit, the public should know who is spending, how much and on what. The motion before the House would effect a publication scheme that would put into the public domain more information than has hitherto been published, and in a form that is consistent year on year and comprehensible to the public. Until now, we have published information about expenses broken down into 14 categories. This motion would lead to publishing information in greater detail and in 26 categories. For example, the House authorities currently publish a single figure for “office running costs”, but under the proposed publication scheme, the House authorities will publish the information broken down into accommodation for offices and surgeries, “office equipment and supplies”, phones, “professional fees and charges”, “agency and other staff costs”, travel costs and utilities. So the single figure would be broken down into seven detailed categories for every Member for every year.

Natascha Engel (North-East Derbyshire) (Lab): Can the Leader of the House reassure me that if, in line with the Freedom of Information Act 2000, any member of the public requests a detailed breakdown of the claims a Member makes against the public purse in any of these 26 categories, there will be full disclosure and people will have full access to that information?

Ms Harman: The House authorities will comply with all the requests that are before them under the Freedom of Information Act—I think some 180 are in the pipeline—in the same way as they complied with the High Court judgment in respect of freedom of information requests for all the receipts of 14 Members.

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Bob Spink (Castle Point) (Ind): Will the Leader of the House confirm that if we can show during this debate that a slightly different breakdown—and, perhaps, a more detailed breakdown, splitting one or two of these subjects—would provide even greater transparency and end confusion to the public, she will accept such an amendment?

Ms Harman: I am aware that the hon. Gentleman tabled an amendment, which was not selected, that breaks down one of the categories by separating “service charges” from

That makes sense, and it will be possible to review the categories from time to time. If the hon. Gentleman’s amendment had been selected, we would not have opposed it—we would have accepted it—and then that change to the categories would have been made. However, we should not change the categories too often, because it is important for the public to be able to see year by year how things change, and if we change the categories, they will not be able to see that broad picture. Therefore, because the hon. Gentleman’s perfectly sensible amendment was not selected, we will go forward—with, I hope, the support of the House—with the 26 categories that we have listed in the motion.

Mr. David Winnick (Walsall, North) (Lab): Like everyone else I am sure, I am very pleased there will be greater transparency, but does my right hon. and learned Friend agree that had we been foolish enough to have continued with the earlier attempt to exempt ourselves from the freedom of information legislation, there would inevitably have been a feeling that we were trying to hide various amounts? That would have undermined all the good work that is rightly being done to let the public know all the necessary information. Bearing in mind last year’s attempt to exempt ourselves completely from the freedom of information legislation—the very law we passed for other people—can my right hon. and learned Friend make it clear that there will be no attempt at any stage in the future to exempt ourselves from that legislation?

Ms Harman: The private Member’s Bill to which my hon. Friend refers sought to remove the obligations of the Freedom of Information Act from the House authorities in respect of Members’ allowances, but it did not put anything in its place. Our approach would have been to introduce a publication scheme that would have provided the public with the information they need about Members, and therefore it could have taken the place of those provisions in the Freedom of Information Act. For reasons I will come to later in my speech, we are not bringing that forward. What I am proposing to the House is the four motions before us today. I am not proposing the Freedom of Information Act statutory instrument; I am proposing the new Green Book, the audit and assurance, the publication scheme and the new Committee of the House.

Several hon. Members rose

Ms Harman: I am perfectly happy to debate something we are not bringing forward, but I am trying to make progress in debating what we are bringing forward, and I will deal with some further points about the SI in a moment.

Several hon. Members rose

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