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20 May 2009 : Column 1505

Parliamentary Standards Authority

12.31 pm

The Leader of the House of Commons (Ms Harriet Harman): May I strongly identify myself with the tributes to you, Mr. Speaker, that the Prime Minister has led today? I know that hon. Members on both sides of the House will want to have the opportunity to pay tribute to you. As Leader of the House, I shall make sure that an occasion is arranged before you leave the Chair so that we can all pay tribute to your generous and courteous chairing of this House of Commons.

With permission, Mr. Speaker, and following on from your statement to the House yesterday, I should like to make a statement on the decisions made yesterday at the meeting of the Members Estimate Committee that you convened with the Prime Minister, the party leaders and the Chair of the Committee on Members’ Allowances, and on the Prime Minister’s proposals for a new parliamentary standards authority.

First, I want to set out how we are dealing with the past. At the meeting last night, we agreed a process, proposed by the Committee on Members’ Allowances, that will reassess Members’ claims over the past four years and identify those claims that should not have been made and should not have been paid out because they were outwith the rules. We also agreed to make arrangements for repayment. The public are entitled to see a process of reparation and Members are entitled to know that this will be orderly and fair.

Secondly, I want to set out the immediate steps that will be taken. The House has already voted to ensure that the threshold for receipts has gone down from £25 to zero and to introduce full-scope audit under the National Audit Office. But, in addition, the MEC meeting last night agreed to an immediate ban on claims for furniture, a cap on interest payments for accommodation at the equivalent per year of £1,250 per month and a restriction on any changes to designation of main and second homes. The meeting also agreed that Members who are married or living together as partners should be prevented from claiming more than one second home allowance.

I understand that the MEC will meet later today to determine detailed changes to the Green Book to put into practice the principles on which the party leaders and the MEC reached clear agreement last night. That should give immediate reassurance to Members of this House and to the public, but, in order fully to restore public trust and confidence, we need more than reparation and reassurance: we need renewal, and to put in place a new system on a new footing.

The House has already voted, on 30 April, to endorse the inquiry by the Committee on Standards in Public Life, which will come forward with its recommendations later this year. Once again, I want to place on record my thanks to Sir Christopher Kelly and his committee for their work.

At the MEC meeting last night, all parties agreed to the Prime Minister’s proposal that the keystone for any reform must be to switch from self-regulation to independent external regulation. We agreed that we should end the gentlemen’s club approach that means that we set and enforce our own rules, and instead bring forward proposals for a new parliamentary standards authority.

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The proposal on which we seek to consult would see Parliament legislate to delegate specific responsibilities to a new, independent parliamentary standards authority, which would revise and update the codes of practice for Members of this House, investigate complaints where a Member of this House is alleged to have breached the code of conduct, take forward the implementation of the recommendations of the Committee on Standards in Public Life on allowances and take responsibility for authorising claims for payment under the new allowance system. It would be able not only to disallow claims, but to require payback of claims wrongly paid out and to impose financial penalties.

It is clearly appropriate that the new body should also take responsibility for such issues in the Lords, including administering and regulating the systems for peers’ allowances, overseeing the code governing peers’ conduct and the Register of Lords’ Interests, ensuring high standards of propriety and financial conduct, investigating alleged abuses of the system and recommending any necessary sanctions.

We in this House recognise that the principle of self-regulation operates differently in the House of Lords. It is clear that extensive work and consultation will be necessary to ensure the agreement of the House of Lords to the effective transfer of responsibilities to the new body.

The new authority would also maintain the register of Members’ financial interests in this House and deal with the disclosure of second incomes. Discipline issues that might require sanctions such as suspension from the House, which would have a bearing on Members’ ability to perform their work, would remain a matter for the whole House through the Standards and Privileges Committee. Only the electorate, or those who are themselves democratically elected, should be able to prevent a Member from doing their work in this House.

We have set in place the actions for reparation and reassurance. For renewal for the future, we look forward to Sir Christopher Kelly’s proposals, and we further propose that the House move from a system of self-regulation to a system of statutory regulation. Although I know that it is hard to get a hearing on this subject now, as Leader of the House I will continue to argue, both inside and outside the House, that most honourable Members are precisely that: they are people who come into Parliament as a matter of public service, and are hard-working, decent and honest. However, we must recognise that, even before the allowance revelations, there was a problem of public disengagement and public cynicism, and a public sense of distance from Parliament.

We must now seize the opportunity to promote a debate that will see proposals to change and strengthen our democracy move from the margins to centre stage, where they ought rightly to be. Parliament and politics are important precisely because there are deeply held, different views about public policy, but there is consensus among all parties that we need to put the reputation of Parliament above reproach, and we will. I commend the statement to the House.

Alan Duncan (Rutland and Melton) (Con): I thank the Leader of the House for her statement. May I also thank you, Mr. Speaker, for convening yesterday’s meeting with all the party leaders? Such a meeting could have taken place weeks ago without the need for your involvement, but the House and those who elect us will be grateful for the way in which you made it happen.

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Following the uproar of the past couple of weeks, we have at last taken concrete steps to address some of the unacceptable elements of an allowances system for Members that has attracted universal condemnation. Last night, we learned from you, Mr. Speaker, of the main points that were decided, and they go a long way to addressing the issues that were crying out for attention. My right hon. Friend the Leader of the Opposition last week outlined a clear list of what he wanted to see for all of us, which he has insisted on for his party. Yesterday’s announcement was in many ways the same as that list.

We will have, straight away, a strict regime to ban the flipping of homes just to exploit the allowances available. Capital gains tax cannot be evaded. A declaration about where one’s home is will have to be open and clear. People will not be allowed to claim for plasma TVs or furniture, and there will be an annual cap on how much can be claimed for mortgage interest or rent. Will the Leader of the House confirm when she expects those revised rules to be up and running?

The very fact that the proposals were endorsed by all parties, and the fact that the meeting took clear, practical action, should be welcomed by all who have so disapproved of the system under which we have been working. Will the right hon. and learned Lady confirm that it is the Government’s continuing wish to proceed in everything that we are going to do in a genuinely cross-party way?

In the meantime, Sir Christopher Kelly and his committee are working on recommendations for a long-term solution to the pay and conditions of MPs. In the middle of what can only be described as the most serious and revolutionary shift in popular opinion and in the reputation of Parliament in our lifetime, his committee is required to stand back from the fray and set out how a modern Parliament should look, and how it and its Members should be resourced. This is no easy task, and whatever people think of Parliament, I hope they will fully respect the integrity of his committee’s efforts and show proper respect for his conclusions. May I ask, therefore, when the Leader of the House thinks the committee will eventually report?

One massive structural shift that we in this Parliament must embrace if it is not to sink further in the eyes of voters is to relinquish the right to determine how we reward ourselves. We are here to legislate, to scrutinise, to discuss and to govern. We are here to represent the interests of our constituents, not to serve our own. For a long time, the Conservative party’s policy has been to give up setting our own pay and allowances and to give that power to an outside body. Some sort of outside structure is long overdue. We also want to cut the cost of politics. Where in the reforms does the right hon. and learned Lady believe that that might yet be achieved?

Behind all this is the need for massive parliamentary reform to bring this institution up to the requirements of the 21st century. May I therefore offer the co-operation of the official Opposition in proceeding constructively and responsibly to try to sort out this near constitutional crisis thoroughly and as soon as possible?

Ms Harman: I thank the hon. Gentleman for the way he responded to the statement. He suggested that we work in a cross-party way, and I know that he is not just saying that. He means it in practice, and ever since he
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has been shadow Leader of the House we have been able to work together on a proper cross-party basis. We know that when we are looking for solutions to these issues, no party has a monopoly of wisdom, and when it comes to unearthing the problems, no party has a monopoly of virtue either, so we will work together across the House to sort them out.

I agree that we owe a great deal to Sir Christopher Kelly and his Committee on Standards in Public Life. He has said that he will report later this year. To respect the independence of his committee’s work, although we have asked the committee to work as expeditiously as it can to make its report so that we can adopt its proposals, it cannot be for us to set out the time scale. The committee must go through the processes as it sees fit.

That is why it was important that the MEC yesterday—you convened it, Mr. Speaker—set in place interim measures. The shadow Leader of the House asked when those interim measures will be up and running. He and I, along with other members of the MEC, will meet later this afternoon. These transitional measures need to be up and running straight away, as soon as the detailed rules can be put together, which will not take long at all.

Mr. Don Touhig (Islwyn) (Lab/Co-op): I welcome my right hon. and learned Friend’s statement. I also thank you, Mr. Speaker, for taking the initiative of calling together the MEC and all the party leaders—all the party leaders—yesterday. You invited me to attend the meeting as Chairman of the Committee on Members’ Allowances, and I was very pleased that the meeting accepted all the recommendations from my Committee, added to your own proposals. That was the basis for your statement last night.

On the consultation on the proposed parliamentary standards authority, I hope the Government will consult and involve the staff of the Fees Office. They have served this place very well indeed. They help us in every way possible in trying to give us information and advice. Although we may feel bruised, they, too, feel somewhat bruised at present, as I know from a meeting that I had with them yesterday. I hope that in the consultation, they, too, will be asked their views on the proposals.

Ms Harman: I am sure that we will need to engage with the invaluable experience and information that the Fees Office has accumulated over years of work on those issues, and that its contribution to the consultation will be very important indeed. I acknowledge the work of the Committee on Members’ Allowances, which my right hon. Friend chairs. Its work paved the way for yesterday’s agreement, and a great deal of work was done in advance so that the all-party in-principle agreement could be reached. I pay tribute to him as Chair, and to all Members who serve on that Committee.

Mr. David Heath (Somerton and Frome) (LD): I, too, thank you, Mr. Speaker, for convening the meeting yesterday and for getting some overdue consequences from it. I also very much welcome the statement by the Leader of the House. I remember giving evidence to the Committee on Standards in Public Life some years ago, when I suggested that self-regulation for this place was on very flimsy foundations indeed and in imminent danger of collapse. That collapse has been all too
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self-evident, and the House has forfeited the right to self-regulation. Statutory regulation is now necessary, and I am pleased that the Leader of the House will now consult on that proposal.

I welcome the immediate steps that have been set out as a necessary review of what has happened over recent years. The capacity to make the adjustments must be put in place. I welcome also the announcement by the Leader of the House that the MEC will meet today, because all Members need clarity about exactly what will be required from them over the next few days and weeks and about how the system will work. Some of it is self-evident, and it does not take a genius to realise that Members should stop buying household goods and stop some of the most egregious excesses and abuses that have come to light. However, there are other areas where Members will need guidance, so I enter one note of caution.

I am worried that we may have inadvertently introduced a perverse incentive against Members renting accommodation and in favour of them entering into mortgage arrangements. That cannot be what the House intends or what the general public want, so I ask the Leader of the House to look carefully at that issue.

I now look forward, as we all do, to the results of the deliberations of Sir Christopher Kelly’s committee. I hope that they will be timely, thorough and give us the answers that we and the public want, and I hope that the House will be able to accept them without equivocation, so that we have a firm foundation for the future.

Finally, I echo what was said earlier by my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg) and what was referred to in the right hon. and learned Lady’s statement: the matter now goes well beyond expenses. It is about the reform of Parliament and the political system, making the House work in a way that it has not done over recent years.

Even this week, we have had the spectacle of a guillotine motion preventing proper debate of an important Bill. We cannot go on like this. This House must be able to hold the Executive to account properly and do its work properly. We need renewal of the whole political system. More papers and more proposals will not do that: action will, and it is overdue.

Ms Harman: The hon. Gentleman said that he, like all Members from all parts of the House, wants to contribute to the consultation and approach it on a cross-party basis, and he reminded the House that, some years ago, he proposed changing self-regulation to statutory regulation. I acknowledge that there have been proposals from his party, which we have put into practice through the MEC system. Indeed, proposals from the Opposition have now been implemented, and proposals have come from Government Members, too.

The truth, however, is that this is not a competition for ideas. All ideas from all parts of the House are welcome in contributing to the process. Whatever we disagree on—we disagree strongly on different issues, which is why we stand for different parties and fight it out at elections—we all agree that we want decent rules that the whole country respects.

I did not agree with the hon. Gentleman when he talked about our “forfeiting” the right to regulate ourselves. In this day and age, the move from self-regulation,
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which is internal and not transparent, to public accountability and statutory regulation is the right move and a sign of strength. We are not forfeiting; this is the strong and right decision to take.

I agree with the hon. Gentleman about the issue of clarity. For 650-odd Members of the House of Commons, there are 650 different sets of circumstances, and each Member will need to know how the new rules apply to their circumstances and how they can make their arrangements. The MEC will have very much in mind the need for clarity and swiftness in showing how the rules are going to work, so that Members can work out how they apply to them. He has already made that point to me, earlier today, and he is absolutely right to have raised it.

The hon. Gentleman and the shadow Leader of the House also raised a point that has been made by a number of Labour Members. We must be aware that some people’s rental agreements include services, utilities, service charges and suchlike; we must not have a perverse incentive that would help Members who have already bought their properties or encourage Members to buy properties rather than rent. We need a fair system that covers the different sorts of accommodation that Members use. The MEC will be mindful of that when we meet this afternoon to work out how we should put into practice the very important cap on accommodation expenses.

The hon. Member for Somerton and Frome (Mr. Heath) said that we need to reconnect with the public and that we need reform of Parliament. I agree; we must all work together on those wider issues, as well as sorting out the immediate issues.

Sir Stuart Bell (Middlesbrough) (Lab): I welcome my right hon. and learned Friend’s statement. I have been a member of the House of Commons Commission for 10 years, nine of them under your stewardship, Mr. Speaker. It was never you who was opposed to reform; the House of Commons showed total incapacity to grasp the nettle of accepting that reform was needed—never more so than on 3 July last year, when proposals that might well have avoided many of today’s scandals were rejected by the collective will of the House.

That, however, is the past. The future is absolutely in independent regulation, and again I welcome my right hon. and learned Friend’s statement. I also welcome the fact that it extends to the House of Lords. I break with tradition by calling it that rather than “the other place”. That might be a welcome change in our own proceedings.

In the past, the House of Lords has been jealous of its own prerogatives and has avoided integration with this House. I ask my right hon. and learned Friend to be sure that the broad bipartisan support here will be reflected in the House of Lords and that that House will not be an impediment to the kind of changes that we seek.

Ms Harman: I know that many Members of the House of Lords themselves want to put the situation on a proper footing; indeed, that work was already under way. I take this opportunity to pay tribute to my hon. Friend’s work on the MEC. He has been a member of it for many years, and he has done a good job on behalf of the House in explaining to the public at large our strong belief that there should be a constituency link.

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