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“must lay the scheme...before the House of Commons.”
It cannot then be voted down. That is included not only as a protection for the public, but for the House. If the body were to have responsibility for pay at some point in the future—and there are some good arguments for that—the same would apply.
Alan Duncan: I am grateful to the Secretary of State for confirming what I said. On a small, technical point, given that only a Member of this House can lay anything before it, I am sure that he will accept an amendment that says that the Speaker, and not IPSA, will lay the matters before the House.
Mr. Tyrie:
Given what my hon. Friend said about the need to take the issue of pay directly out of the hands of the House, would Front Benchers support an amendment
that altered clause 3 to exclude pay from consideration under resolutions of the House and to place the issue at one remove by statute?
Alan Duncan: That is essentially our party’s policy. Of course, we would need to look at the exact words of any amendment to determine whether we supported it. In principle, we are today setting up the architecture that would allow what my hon. Friend suggests to happen. I think that in practice the Bill allows for subsequent amendment or revision. I think that we are all thirsting for some kind of total, comprehensive and, dare I use the word, holistic approach to all the various strands that are, at the moment, fragmented.
The men and women who become commissioners will need to be distinguished and of unimpeachable character. They will also need to be confident, so I am pleased that the Bill makes it clear that there should be someone on the board of IPSA who has had direct parliamentary experience. That is not because we wish to give ourselves an easier deal; it is to ensure that there is someone on the board who knows and understands what it is to work in this place, who can ground IPSA in the gritty reality of the House of Commons, and who will not be seduced by any of the popular myths about what an MP does or does not do. Equally, the legal complexities of establishing the body call for someone who has reached the highest plains of the legal profession. We suggest that an experienced accountant should be on the board, too.
Mr. Swire: No serving Member of the House of Commons can be a member of IPSA, but a retired Member of the Commons can be. However, a Member of the House of Lords can be a member of IPSA. Does my hon. Friend agree that that is an anomaly, given that the Justice Secretary told me earlier that he hoped that the measures would eventually apply across both Houses?
Alan Duncan: The difference arises from the fact that a Member of the House of Lords is a Member for life, so there are no ex-Members of the House of Lords who are able to make a constructive contribution.
Alan Duncan: Yes, there are hereditaries. Some past heads of the Committee on Standards in Public Life have been Members of the House of Lords; I am thinking particularly of Lord Nolan and Lord Neill. If one is to seek a senior judicial figure, it may well be that the House of Lords is where they come from. Of course, there are Cross Benchers in the House of Lords, but not here, bar one or two.
Sir Alan Beith (Berwick-upon-Tweed) (LD): Will the hon. Gentleman allow me to intervene?
Alan Duncan: Yes, but then I will make progress, if I may.
Sir Alan Beith: I declare an interest, as my wife is involved. I had better make it clear that the three parliamentarians who are members of the Committee on Standards in Public Life are explicitly not taking part in the committee’s inquiry on pay and allowances, because they have an interest.
Alan Duncan: Indeed. They were asked to stand down from the investigation. In a way, that is against many of the principles under which Lord Nolan set up the committee in the first place. One of those principles was that, in order properly to decide anything to do with this place, knowledge of it was necessary. Sir Christopher Kelly decided that the parliamentarians should stand down from the inquiry; whether that was right or not is for others to judge.
We do not have a serious problem with the investigative functions of the new body. We have to hope that Sir Christopher Kelly’s committee comes up with sensible, simple proposals later this year that will make any new system virtually impossible to manipulate. However, the public’s view of politicians is so low at the moment that we must be prepared for what I can only imagine might be rare instances of outright fraud. In doing so, we should ensure that there is a real, and not just a cosmetic, separation of powers between the administrative and investigative competence of IPSA.
Without wishing to cast any aspersions on the staff of the Department of Resources, who do what is at present a very tough job, part of the reason for our current problems has been that the Fees Office was for a long time both the administrator and the adjudicator of allowances. This clearly can no longer continue. If we are to avoid falling foul of any further elephant traps, we will need to look carefully at what the Justice Secretary has called the “firewall” between IPSA’s administrative and regulatory functions. I am sure we will examine that in Committee. I refer Members particularly to schedule 1, part 2, paragraph 17.
These parts of the Bill are, we would argue, the least controversial, unless one is opposed to the entire principle of contracting out our pay and allowances, although at present the new body will look only at our allowances. But there are other elements of the Bill that appear to be designed purely to satisfy the prime ministerial press release. One of the reasons we find ourselves in this mess is that we have suffered from the most trivial form of gesture politics. The Government must understand that we will not resolve the problem with yet more gestures. We can get away with some bad legislation, but if we put a foot wrong in this case, we might end up not just with an expensive inconvenience, but with a constitutional nightmare that will haunt us for decades.
Although we remain cautiously relaxed about transferring powers on allowances, we are not so comfortable about the provisions in the Bill that allow IPSA to regulate the system and create new offences for false claims or failing properly to declare financial interests. That view is nothing to do with giving MPs special favours. It is about making sure that in fixing the Commons, we do not unfix the parts that are not broken. The Government must listen, and I hope they will be prepared to accept some amendments.
The House had particular concerns about clause 6, which would have created an obligation on the House to have a statutory code of conduct, or at least by statute it would have required the House to have a code of conduct, which is slightly different. That would have created all sorts of conflicts between us and the courts. We still have concerns about clause 10, which creates a formal provision to allow proceedings to be admissible
in court proceedings against an MP, regardless of parliamentary privilege. We will have to examine this in depth in Committee.
What is at stake here has been expertly explained by the Clerk of the House in a powerful analysis of those aspects of the Bill that touch on questions of parliamentary privilege and our freedom as Members. That document is already public, and I know that the Clerk will be before the Justice Committee tomorrow night. He had two central concerns—first, that swathes of the Bill are or would have been justiciable and would set Parliament on a direct collision course with the courts; and secondly, that this could undermine the basic principle of free speech in the House.
The sovereign independence of Parliament from the judiciary has been one of the fundamental pillars of our constitution for centuries. As the Clerk interprets it, had the Bill gone through unamended, we would have seen an endless merry-go-round of litigation and judicial reviews. We cannot end the culture of blank cheques to MPs, only to open up a culture of blank cheques for lawyers. Members—we—are already subject to the law of the land, just like anyone else. We are also already subject to a parliamentary code of conduct, and to the judgment of the electorate.
Inasmuch as IPSA has power over our allowances, we are largely content, but inasmuch as it muddies the water and empowers the courts to intrude on our independence of action, it must be resisted. Even more dangerously, as the Clerk goes on to suggest, the casual disregard for parliamentary privilege in the Bill, particularly in clause 10, could cause permanent damage to parliamentary proceedings. As he says, it could have a
“chilling effect on the freedom of speech of Members, and of witnesses before committees, and would hamper the ability of House officials to give advice to Members”.
As has already been said, responding to me at business questions last week, the Leader of the House said:
“He will see from the face of the Bill that the question of parliamentary privilege is not an issue in that Bill, so that is not a question that hon. Members need to concern themselves with.”—[ Official Report, 25 June 2009; Vol. 494, c. 950.]
It is difficult to see on what basis she made such a statement. It is in obvious contradiction to the expert advice from the Clerk. We are glad that clause 6 has been withdrawn, but we are still concerned about other aspects.
Sir Patrick Cormack: Does not the Clerk also point out that in 1999 a Joint Committee of both Houses, on which I was privileged to sit, produced a report that has been pigeon-holed ever since? Had it been followed and had we had a privileges Act, as the Committee recommended, many of the issues that have disturbed us since would not have arisen.
Alan Duncan: I could not agree more with my hon. Friend. Our expenses regime and the Bill, together with the recent arrest of my hon. Friend the Member for Ashford (Damian Green), make the case for a privileges Act ever more compelling. We should look at that in detail.
Mr. Dismore:
Picking up on the point made by the hon. Member for South Staffordshire (Sir Patrick Cormack), does the shadow Leader of the House agree
that that Committee made particular recommendations in relation to the provisions of article 6 and natural justice to ensure that Members had the right to fair procedure when such cases were dealt with?
Alan Duncan: I am happy to take that on board, and it sounds as though the House agrees with the hon. Member for Hendon (Mr. Dismore).
Mr. Gerald Howarth (Aldershot) (Con): I notice that my hon. Friend has not mentioned clause 5, which is of concern to a number of us. Will he share with us his view on a point made by our right hon. Friend the Member for Wokingham (Mr. Redwood), who challenged the Lord Chancellor on his unpaid post, and sought to establish from him why Ministers were excluded? After all, the Prime Minister, like us, is a right hon. Member of the House, but he also moonlights as Prime Minister, for a fairly substantial fee. Ministers do not have to go through the rigmarole of having to account for their every hour and minute spent on that outside interest, whereas those who have other outside interests that enable them to bring some serious experience to the House will be subject to that process.
Alan Duncan: My hon. Friend has made that point in the House a number of times. The loose use of the phrase “full-time MP” is increasingly vacuous. It does not mean much. The Prime Minister and other Ministers are Members of Parliament, working for their constituencies, and have very busy jobs as Ministers. Members who are paid as Chairmen of Select Committees also have that as an extra job. So the notion that we are either full-time MPs or not requires us to help inform people about how this place works. If ever there was a time when educating people and helping them understand this place were needed, now is such a time.
We will have to consider all these issues very soberly over the next few days. One issue that has been discussed and is of great importance is the question why we need to create special new offences for MPs, as in clause 9, for example, for providing “false or misleading” information when making an expense claim. As my hon. and learned Friends the Members for Harborough (Mr. Garnier) and for Beaconsfield (Mr. Grieve) said earlier, and as was pointed out by a QC in the letters page of The Times last week, such behaviour is already punishable under section 15 or 15A of the Theft Act 1968—dishonestly obtaining property by deception—or perhaps under the provisions for false accounting in section 17.
There has been a perverse consequence of the Government’s attempt to define a special offence for us. I suspect that it was not the Government’s intention to limit the maximum sentence for which an MP could be imprisoned to 12 months, rather than the 10-year sentence that can await members of the public found guilty under the Theft Act, but that is how it appeared to the correspondent in The Times. Creating different rules just for Members of Parliament cannot hope to fill the public with confidence in the new system. The Government’s unworthy briefing to the press today suggests that they are more interested in propaganda than in a proper Parliament.
A Second Reading speech is to do with the principle of the Bill. The key principle at stake here is not only the external determination of our allowances, but the relationship between Parliament and the courts. As mentioned before, we had concerns about the obligation to have a statutorily enforced code of conduct; we were perturbed that the justiciability of the code would move our focus away from the legitimate concerns of our constituents towards the vexatious concerns of litigants.
These are tough times for Parliament, but they are also times in which the House needs to keep its collective head. We need a simple Bill that deals swiftly and effectively with the problem of our expenses. Let us not try to solve that problem by creating other problems, whose magnitude might dwarf even the hideous situation of the past two months.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I have to remind the House that Mr. Speaker has placed a 15-minute limit on Back-Bench speeches, and that it operates from now.
6 pm
Sir Stuart Bell (Middlesbrough) (Lab): I am grateful for the opportunity to follow the shadow Leader of the House. He reads the same newspapers as I do, and he referred to the letter in The Times last week that noted that under the Theft Act 1968 one receives a 10-year sentence, rather than the one-year term that might be set down in our Bill. The Justice Secretary has pointed out, however, that there will be a new offence and that there is a difference between “knowingly” and “dishonestly”. We lawyers understand perfectly well that there is a difference.
The shadow Leader of the House also mentioned the Bill’s principles, which I fully support and always have supported. I refer simply to something that I learned many years ago from Ernie Marples, a former Conservative Minister for Transport, who said that a time of crisis is a time of opportunity. A crisis has certainly engulfed the House in relation to the public’s perception. There is a phenomenon among the public, in that everyone seems to relate to Members’ expenses. I have an aunt in Newcastle who is 92 years old, and when her son visits her from Spain she does not ask how he is, how the children are or how the journey was; instead, she says, “I cannot get a communal garden seat, but those MPs...” And so it goes on up and down the land. We created a crisis and the Bill is dealing with it.
The shadow Leader of the House said that there was a low opinion of politicians; I have to tell him that in 1974 we were behind estate agents in such popularity stakes. We have not moved very far since then, so it is not true that Members have ever been popular in our land. However, we are certainly more unpopular now.
I am glad to see the right hon. Member for Wells (Mr. Heathcoat-Amory) still in his seat. He, the hon. Member for Chichester (Mr. Tyrie), who made an intervention, and my right hon. Friend the Member for Birkenhead (Mr. Field) were all concerned about salaries and whether they were also part of the Bill. I read a number of briefing notes on the Bill, and I was under the impression that, should the Independent Parliamentary
Standards Authority ask the Senior Salaries Review Body for a recommendation on salaries after a review, the issue would fall within the same category as expenses and, as the Justice Secretary has said, be laid before the House without a vote. If that is to be the case, it will be the first time since 1971 that MPs’ salaries as recommended by the SSRB have been approved. The late Sir Edward Heath did so, but since 1975, when the Leader of the House was Michael Foot, no Prime Minister or Government—through the Thatcher, Major and Blair years—have ever accepted a recommendation from the SSRB. That has given us the current disequilibrium between allowances and salaries, so I hope that, in the future, salaries, like allowances, will be covered by IPSA.
My hon. Friend the Member for North-East Derbyshire (Natascha Engel) said in her intervention that we should listen to the public. I think that, through this Bill, the Kelly recommendations on MPs’ allowances and the four-year review of all our expenses and allowances, which will begin very soon and is being carried out by independent auditors, we are listening to the public.
I think that it was the shadow Leader of the House who had the good fortune, or the misfortune, to mention The Daily Telegraph, and I repeat what I said at the time: it is a matter of great regret that a CD-ROM was stolen from the House, that it was bought for a tremendous amount of money—possibly £250,000—and that it led to the revelations that came to the public’s attention. Voltaire once said, however, that out of some ill, some good can come, and the good that has come out of the revelations is the Kelly review, the Bill and our review of four years’ expenses and allowances. So, when people ask, “Why the rush with the Bill? Why the haste?”, I answer that the haste is to respond to the public’s opinion, which we created. We have created a terrible public opinion of this House, and the House as an institution, as well as its Members, must respond. That is what we are doing today.
Sir Christopher Kelly has been mentioned on a few occasions, and those who have given evidence include the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd), who gave evidence today, and myself. I gave evidence last week, just before the Bill’s First Reading, and I tried to explain to the committee, and I think that it understood, that IPSA is not being set up as another quango. It will separate the work of the Fees Office from Members. I repeat on the Floor of the House what I said to the committee: an incestuous relationship had developed between Members and the Fees Office.
Many people—the Justice Secretary, the shadow Leader of the House and my right hon. Friend the Member for Birkenhead—have said that the Fees Office does a sterling job. No one is criticising members of the Fees Office; we are all responsible, because, over the years, we right hon. and hon. Members have made our claims and they have responded. They tried to help us. When the difficulties arose with the media, Members said, “Well, it was agreed by the Fees Office,” and the Fees Office said, “You are hon. Members,” and the relationship became rather unstable, leading us into our current situation.
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