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Miss Widdecombe:
Does my hon. Friend recall that the last time we had a set of independent recommendations on allowances, the poor souls involved were so deluded that they proposed that we should lose thousands of pounds for every member of staff whom we employed
on the parliamentary estate, and Members on both sides of the House had to reject the recommendation? The recommendation was independent, but it was based on misunderstanding, so we must have the flexibility to challenge any misunderstanding.
Angela Watkinson: My right hon. Friend is right. One needs to experience this life to understand fully what it is like and all its implications.
I will make a personal suggestion, which will be unpopular, that would get us out of all these difficulties and save the taxpayer money at the same time. The accommodation allowance, which is not taxable, should be transferred to salary, which is taxable. MPs would then experience an immediate loss of income equivalent to 40 per cent. of the accommodation allowance—about £10,000 in additional tax liability. That should satisfy the mob feeding frenzy that has been whipped up by the media as national entertainment. That amount could also be made exempt from pension, if necessary. There could be a further saving to the taxpayer, because the administration of the system would be much simpler, and the proposal would prevent gross intrusion into all our personal lives, so I think it would be a price worth paying.
4.17 pm
Mr. Gordon Prentice (Pendle) (Lab): Most of us here get just over £64,000, and I do not complain about it because that is a king’s ransom for people in Pendle. The Member for Upminster (Angela Watkinson) made a point about Kelly, but he does not come from the planet Pluto. He will take evidence—the evidence sessions will be held in public—so to ensure that there are no misunderstandings, it will be open to Members to make submissions, and no doubt she will do so.
It is a colossal mistake that we are having the debate at all, and an even bigger mistake to be having any votes. The whole shooting match should be handed over to Kelly. The YouTube was almost too horrible to watch—it was terrible. I was flinching as I watched the performance, and it became obvious that the proposals had not been thought through for one moment.
The Prime Minister’s decision was announced to the nation in that way only about 16 hours after a meeting of the parliamentary Labour party, at which we could have been taken into his confidence and said to him, “The daily allowance, Gordon, will not work.” All Members then suffered the indignity of hearing an official spokesperson for No. 10 saying about the per diem proposal, to which the Prime Minister was so wedded until recently:
“One of the advantages of the daily allowance is that it does provide them”—
“with an incentive to attend”
Parliament. That is disgraceful. I find it offensive that some unnamed source in No. 10 says that we need to be paid a daily allowance to turn up here and do our job.
Christopher Kelly has said—and I agree—that the whole parliamentary expenses issue has been
“the single most damaging issue for public trust in politicians”
in the past 15 years. Who could disagree with that? Colleagues have sheltered behind rules; they said that they had not broken any rules when those rules offended against common sense. People were saying, “We’re not going to think the better of you because you obeyed these perverse rules.” The rules need to be rewritten—a point made by my friend the Member for Bassetlaw (John Mann).
Sir Christopher Kelly said of parliamentary expenses:
“This is not something that should be left to politicians to sort out for themselves.”
When, on 10 February this year, he came before the Public Administration Committee, which my friend the Member for Cannock Chase (Dr. Wright) chairs, he asked:
“should Members of Parliament have the right to set their own pay and allowances...the answer is clearly, no.”
We will get out of this mess only if we hand everything over to an independent body, even though some of the recommendations may be uncomfortable. Perhaps there are people who say, “This Parliament is sovereign, so we cannot delegate these decisions to an independent body.” I say that they are wrong. I want pay and allowances to be like a devolved matter. When I go to the Table Office and want to table a question about some arcane thing that is happening in Scotland, the Clerk will say, “I am sorry, Mr. Prentice, you cannot table that because it’s a devolved matter.” Pay and allowances for Members of Parliament should be a devolved matter, and we should have nothing to do with it.
I come to my final point. I have heard a lot of really good speeches today, including from my friend the Member for Sherwood (Paddy Tipping), my friend the Member for North-East Derbyshire (Natascha Engel), who spoke just a moment ago, and of course my friend the Member for Cannock Chase. The system will just turn to dust yet again if, when we get the recommendations from Sir Christopher Kelly, we pick and choose. We have to accept the entire package of recommendations without amendment. That is the way for us to rebuild public trust in this institution, and in us as individual politicians.
4.22 pm
Mr. Bernard Jenkin (North Essex) (Con): I agree with a great deal of what the hon. Member for Pendle (Mr. Prentice) said, but not with his last main point, and not because we are a sovereign House. I ask him to reflect on this: if we cannot trust ourselves, and cannot be trusted by the British people to sort out our own pay and allowances, how on earth can we be trusted with the nuclear deterrent, the state of the economy and the other much more important things with which we are meant to be trusted? My right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) made the sane point that the proposals may be very good, but may require adjustment. However, I agree with the hon. Member for Pendle that if we are to adjust those proposals, we will have to do so with great care.
When the Leader of the House appeared to accept the amendment of my right hon. Friend the Member for North-West Hampshire (Sir George Young), the Chairman of the Select Committee on Standards and Privileges, I thought that we would have an outbreak of real dignity and common sense in the House. Instead,
we have had a scrappy, miserable debate, albeit illuminated by some exceptional speeches. My hon. Friend the Member for Upminster (Angela Watkinson) gave a heartfelt speech. How can Members on the Treasury Bench force through the amendment on Greater London Members having heard that speech? I noted that the Leader of the House kindly came to the Chamber to hear those remarks, and I hope that she will address the issue when she winds up.
Having accepted the amendment of my right hon. Friend the Member for North-West Hampshire, we cannot just go back to a sticking-plaster on the discredited system that is the Green Book. The Green Book is a discredited system, and the failure to accept that fundamental point for some time has got us into more and more problems. Various comments have been made about our allowances and salaries. That is the fundamental problem: what we claim, our expenses, have in fact become part of our remuneration, and the public will never accept that. They will also never accept the special tax rules that we give ourselves. Members ought to try explaining to a small business man in their constituency why we should have rules, with Revenue and Customs, that we would never dream of giving them. There is quite an argument for handing back to HMRC the whole question of what we get and what should and should not be taxed, so that we are treated like ordinary citizens, instead of treating ourselves as special.
We must recognise that those fundamental problems have arisen because we have moved from an age of deference to an age of reference: from an age when people respected institutions for what they purported to be, to an age when people, through the internet and the media, expect individual accountability and exposure in a way that was never accepted before. We are 20 years behind the rest of society in that respect. The denial in respect of the Freedom of Information Act 2000, furthermore, was a crass own goal for which those responsible should take some responsibility. Voters are also angry because MPs appear to cost more and more but to do less and less: shorter hours, longer recesses, less and less power to scrutinise legislation properly, fewer and fewer votes on substantive issues and more and more decisions taken in Whitehall, Brussels and elsewhere.
We must, however, take ultimate responsibility for the outcome. The advantage of the Kelly approach is that he will return to some fundamental principles, and we ought to approach these questions from first principle, instead of trying to patch up the existing system. What is the role of a Member? What does he or she require to do his or her job? What is it legitimate to expect the taxpayer to pay for? How should the system command public confidence?
The great danger, for example, of instantly deciding that a panacea for one of our problems is the direct employment of our staff by the House is that it fundamentally misunderstands the role of a Member. We should be strengthening our ability to make independent judgments on behalf of our constituents and in the interests of our nation, instead of becoming part of a more and more amorphous corporation. We enter the House not to join the establishment but to challenge the establishment, and the independence of our arrangements in our offices is absolutely fundamental to that purpose. The Kelly commission must be made to understand that.
4.27 pm
Hugh Bayley (City of York) (Lab): Ever since I have been a Member, I have found it invidious to have to vote on my pay and allowances. We should delegate that responsibility to others, and I welcome the decision to refer the question to Sir Christopher Kelly’s committee. If we refer matters to an independent body, we should respect its independence and not seek to micro-manage its work or to tell it what conclusions to reach. The wisest course for the House would be to pass the proposition tabled by the right hon. Member for North-West Hampshire (Sir George Young) and accepted by the Government, and then to let the other questions lie on the Table.
I have tabled an amendment to motion 4(1) which seeks to improve the pension entitlement of MPs’ staff, but, to be consistent with what I have just said, I shall not press my amendment if it is called. However, I wish to discuss the questions that underlie it, because I should like them to be considered by the Committee on Standards in Public Life and the House of Commons Commission.
My staff are extremely important to me; I simply could not do my job on behalf of my constituents without their support. My staff research, draft and type more than 1,000 letters a month to and on behalf of my constituents, and they do a great deal of other work in my constituency on their behalf. The House staff are important, too. The text of my amendment was drafted by Clerks and, at this very moment, a Library researcher is looking into a question for me. Both the House staff and Members’ own staff are paid from the House budget, but there is a glaring discrepancy in their terms of employment. House staff benefit from a public sector final salary pension scheme, while our staff are entitled to join a stakeholder scheme, the Portcullis pension plan, or, if they have served us rather longer, that or some other money purchase scheme of their choosing.
I give as an example the situation of one of my members of staff, who has worked for me for the 17 years that I have been in Parliament and who is paid on one of the higher pay scales for Members’ staff. After 17 years of pension contributions, when she reaches the age of 60, she will have earned, through the money purchase scheme, a pension of about £2,900 per year, which is only partly index linked. Because she is in a money purchase scheme, she is also entitled to receive a state second pension—I am glad that this Labour Government brought that in—which will perhaps increase her pension entitlement by some £3,000 a year. I asked the Department of Resources to calculate what a House of Commons employee on a similar pay point with the same length of service would have earned in the House of Commons pension scheme. It is difficult, of course, to compare one pension scheme with another, but its best estimate is that she would have earned, at age 60, a pension of some £8,000; and the House of Commons scheme is fully index linked.
MPs’ staff are clearly at a disadvantage, but it is not, in my view, a huge and unfundable disadvantage. I was reassured when my hon. Friend the Member for Middlesbrough (Sir Stuart Bell) said that the House of Commons Commission would consider the pension entitlement of MPs’ staff when considering the case for transferring them to the House of Commons payroll. I recognise that cost is an important consideration, and
that serious questions are being asked in this House, and in the country as a whole, about the continuing affordability of public sector final salary schemes. However, I hope that the Commission will consider both the practicability of allowing MPs’ staff to join the House of Commons staff pension scheme and alternative ways of improving their pension entitlement. They are public servants who are as important to the public in our constituencies as any other staff of the House, and they should not be disadvantaged.
I have not spoken often in debates about Members’ allowances because, as I said, I think that it is invidious for us to make decisions about our own pay and conditions. However, that does not apply to the pay and conditions of our staff; indeed, we have a responsibility openly and transparently to make decisions about how they should be remunerated and to see that they are properly and fairly remunerated.
4.32 pm
Jo Swinson (East Dunbartonshire) (LD): Some Members will know that I am a bit of a fan of new technology. I like using podcasts, Twitter and Facebook to engage with my constituents. In particular, I have campaigned in the House—for example, through early-day motion 1319—to allow clips of Parliament to be shown on YouTube. Perhaps, amid all the criticism, we should commend the Prime Minister for at least trying to embrace new technology—although, sadly, he has not quite got the hang of it. He said in his YouTube video that he wanted to hear the public’s views on MPs’ expenses, but then did the online equivalent of putting his hands over his ears by disabling the comment function. That does not make sense.
Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab): I share the hon. Lady’s enthusiasm for new technology, but my fundamental objection to the Prime Minister’s appearance on YouTube is that, instead, he or the Leader of the House should have come to this House and made a statement that could have been questioned.
Jo Swinson: The hon. Lady has made her point.
It is certainly true that there were many concerns about the procedural way in which this matter came to our attention. The concept of the Government trying to reach out more through electronic technology is, in itself, a good one, but it has to be done properly. The Prime Minister does not really “do” listening. Instead, in a frantic rush to be seen to be doing something—anything—about this issue, he did not stop to think whether he was doing the wrong thing. We ended up with that ridiculous proposal, apparently intended to try to promote better transparency, to give us the cash, no questions asked, for turning up at the House of Commons. I am very glad that that did not make it on to today’s Order Paper. However, there is no denying that the Government’s confusion, U-turns and general lack of consultation have been deeply unhelpful to the whole debate.
I have a certain sympathy with the Leader of the House. She has been sent here to attempt to clear up this whole disastrous episode, which is not an easy job. I
have a lot of sympathy also with those who have said that it does not make any sense for us to vote on the later motions if the Government accept the amendment to the first. It is slightly farcical for us to say, “Leave it all to Kelly” but then have those votes.
It would have been better if a small number of urgent changes had been consulted on properly, introduced and enacted with the minimum of fuss. Instead we have had a mix of some good changes, many half-baked ideas and some changes that would just have made the whole system murkier. That said, we all know the depth of public anger on this issue. Given the motions before us, if the Government intend to press them, and given that the Kelly report might not be completed until the end of the year and therefore the changes might not come in until well into 2010, we must consider whether it is justifiable to vote today against measures that would clamp down on some of the abuses of the system. I think not.
Motion 5, in particular, is long overdue. Rather than saying that something under £25 does not need a receipt, ensuring that receipts should be provided for every expense that we incur in our parliamentary duties seems to be common sense. I have called for that before in the House, and I will certainly support it today. Most of our constituents cannot understand why there is a different rule in the House of Commons from that in the real world. In most jobs, expense claims are accompanied by receipts as a matter of course.
We can clearly deal with some problems today, but many more complex reforms are needed. As many hon. Members have said, the House of Commons has sadly shown itself not to be very well tasked with making those reforms or up to the job, whether in the vote last July that kicked out the reforms proposed by the Members Estimate Committee, the Government’s attempts to keep everything secret back in January or even the mess that has been created over the past 10 days. That is why the independent review by Sir Christopher Kelly is so important.
I am sure that all Members have had constituents raise with them many other issues of concern, particularly on second homes. People do not understand the designation of second homes, and why it seems to be possible for that to be decided on for the convenience of the MP involved. That clearly has to change. The John Lewis list caused huge public outcry and anger, and there is the problem of MPs making capital gains from properties partly funded by the taxpayer. I know that some in the House make the argument, which I understand, that it is often cheaper for the taxpayer to pay the mortgage interest on a bought property. I am sure that the flat that I rent may cost more, particularly with interest rates as they are, than the flats that some hon. Members have bought and claimed mortgage interest on. But surely it would not be impossible to design a system whereby the House of Commons had a portfolio of accommodation, so that the House would benefit from the capital gains and, over time, the cost to the taxpayer would actually reduce.
We will all make our own representations to the Kelly review, but it is absolutely clear that the best way to proceed is to have an impartial arbiter to make a comprehensive set of proposals that we can use to start rebuilding public trust. Transparency has to be a fundamental principle of any system of MPs’ expenses, because then whatever the system is, if there are problems
with it, they will very soon come to attention and be nipped in the bud. That is why I will vote today to increase transparency in the expenses system.
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