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This debate is taking place against the backdrop of Legg and Kennedy and the appeals, some of which have already leaked into the public domain. As has been demonstrated by the press reports, the interpretation of the rules is a complex task. In some cases, the Fees Office, Members, Legg and Kennedy have all reached different conclusions about the same case. However hard IPSA tries to remove any ambiguity from the new regime, the rules will never be codified and there will always be grey areas. That is why we all thought back in
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July that it was so important to have an external investigator who has the independence to come to a final, considered judgment.

I wish to make one further point about the compliance officer. Although the original Act stipulated a role for a Parliamentary Commissioner for Investigations, the position was not advertised or appointed at the same time as those of Sir Ian Kennedy or the other members of IPSA. It may be that the Government were envisaging that John Lyon would take over both roles in the future. Whatever the reason, the idea of a Commissioner for Parliamentary Investigations was quietly dropped after Kelly. As things stand now, IPSA will not be able to appoint the new compliance officer until after Royal Assent has been given to this Bill. Given that IPSA aims to be fully operational by the beginning of the next Parliament, do the Government think that they will be able to fill the compliance officer post in time? If not, what will be the procedure for complaints?

We also left hanging in the air the question posed by my hon. Friend the Member for Worthing, West (Peter Bottomley) about dual mandates. Unless something happens to the rules within the House, it will still be possible for a constituent to make a complaint to the Parliamentary Commissioner for Standards at the same time as a complaint is being considered by the alternative route. Those consequential issues need to be addressed.

In fairness to the Secretary of State, he has tried to address some of the issues that I have just been talking about by tabling new clause 75, which gives MPs the right to appeal to a first-tier tribunal. That is a welcome step, but the first time the tribunal finds against the compliance officer, as it could under new schedule 7, there is a risk that the whole compliance system could be compromised.

5.45 pm

I want briefly to return to new clause 77, on investigations, and note that proposed new section 9A(2)(b) and (3) of the Parliamentary Standards Act 2009 give Members under investigation an opportunity to call and examine witnesses. That was not contained in the Kelly report and it is not current practice. It would be helpful if the Government could explain the rationale for what is a fairly radical change in the process and say why it is a good idea.

There are two concerns about new schedule 7. First, what is the source of paragraph 1(4)(a) and (b) of proposed new schedule 4 to the 2009 Act? In the event of an overpayment, they allow IPSA not only to charge interest but to ask Members to bear the costs

That is an entirely new provision-there is no mention of it in Kelly-and what it allows for is not current practice. Any charge incurred could be extremely significant. I have known some cases, from when I was the Chairman of the Standards and Privileges Committee, that ran into many thousands of pounds. For example, the inquiry into the hon. Member for Bethnal Green and Bow (Mr. Galloway) involved considerable expense and a large amount of fees for translation. We also note that the adjudicator's services are entirely free of charge, whatever the verdict. What is the Government's reasoning for including paragraph 1(4)(a) and (b), which were not part of Kelly?

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The whole procedure is just beginning to look rather bureaucratic. IPSA has to "prepare guidance" on the disciplinary regime, under paragraph 2(1) of proposed new schedule 4 to the 2009 Act, as well as having to consult the Speaker, the Leader of the House and other people, all within a short space of time. I contrast the relative speed of the current disciplinary process, whereby a case can be resolved within a matter of weeks, with the rather cumbersome, top-heavy and, I fear, slow-moving new regime that we are about to introduce.

Let me briefly mention new clause 87, standing in my name and that of my hon. Friend the Member for North-West Cambridgeshire (Mr. Vara), about which the Secretary of State spoke movingly. [ Interruption . ] He spoke movingly, but he was unable to accept it. New clause 87 would give IPSA a duty to offer advice to Members on claims and seeks to implement a recommendation in the Kelly report-recommendation 44, I think-that IPSA should be able to give advice to Members and "promote good practice". It would be a waste of time and resources if Members were left having to interpret the rules as they saw fit, only to have claims continually rejected. The current IPSA consultation document is silent on giving advice. However, I am grateful to the Secretary of State for saying that he would have another look at that before Report.

A considerable influx of new Members is expected in the next Parliament, and they will be required to get to grips very quickly indeed with a new system. For that reason, if for no other, IPSA needs to have the capacity and ability to give them guidance. There are already stories of some candidates pledging to avoid claiming expenses altogether, owing to the confusion of events over the past year. MPs should not feel discouraged from legitimately claiming for expenditure incurred in the course of their duties. That point is underlined in the IPSA consultation.

Kelly has suggested that advice to Members should be channelled through the compliance officer, but that would be illogical. The title "compliance officer" implies that he will audit, review and determine outcomes, not offer advice. If a compliance officer gave advice about a claim that was later investigated, he would have compromised his role in any inquiry. We do not want to return to the culture of secrecy and collusion that may have existed in the past, but there is a recommendation in the Kelly report about giving advice, and we feel that it should be acted on.

Let me turn to new clause 84 and new schedule 9, and return to pensions. Kelly is quite clear that salary and pensions should be taken out of the hands of Parliament, and we agree. However, although he is clear-cut on the need for a total separation between IPSA and Parliament on pay, there is much more ambiguity in how he envisages IPSA handling pensions. As he says:

However, real concerns are being expressed by trustees of the fund about the Government's amendments as drafted. We discovered that the Government had not been able to carry out any consultation before the amendments were tabled, and I am glad that that will now urgently take place.

In moving to the new scheme, as outlined in new schedule 9, paragraph 3, will Members have the same
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safeguards in relation to the benefits that they have accrued over time as would employees of a company that is part of a takeover bid? I think that the Secretary of State gave such a guarantee in his remarks, but it would be nice to see it enshrined in the legislation.

We raise a further issue in our probing amendment (a). The new schedule as it stands seems to imply that no MP or ex-MP will even be consulted in the strategic oversight of the pension scheme. My hon. Friend the Member for Worthing, West said that he knew of no parallel in the private sector where such provision exists. Although the measure does not say so explicitly, it does not specify who the trustees should be. It seems odd that, once the fund is transferred into IPSA's competence, the appointment of the trustees is to be left entirely up to IPSA, which will need to consult only the Prime Minister. One wonders what the Prime Minister's interest in this matter is, as opposed to everyone else's.

Andrew Miller: Does the right hon. Gentleman agree that the practice that applies to pension funds outside this place should equally apply to us, and that Members should have the right to appoint a proportion of the trustees, just as members of any large scheme elsewhere have?

Sir George Young: The hon. Gentleman makes a forceful point. I can see no reason why there should be a disparity between this scheme and the schemes that he has just mentioned.

There is also a degree of confusion-which the Secretary of State might be able to resolve-about exactly when pensions will move into IPSA's competence. In the written ministerial statement from the Leader of the House on 10 December, the Government said that they would bring forward legislation

I understand the need for IPSA to consult the SSRB before making its first determination on pay, as set out in proposed new section 4A(7), but does it follow that pensions would therefore take effect in the same year? And where in the Government's amendments do they set out when IPSA should start determining the structure of MPs' pensions? As drafted, new schedule 9 seems to take effect immediately after Royal Assent is granted, rather than in 2011-12.

Before I finish, I wish to make one final point on the general scope of this debate. Today, we are focusing on building in improvements to the disciplinary regime by, among other things, strengthening the Members code of conduct. But, despite the behaviour of members of the Government being of just as much public interest as that of Members of this House, we are going to make no change whatever to the second code of conduct-that relating to Ministers.

The policing of Ministers lags far behind the policing of the House in terms of transparency, independence and reprisals. At present, the ministerial code is overseen by the Prime Minister, who can decide whether to refer a matter to his independent adviser and whether to publish any report. Neither procedure has ever been invoked, even though there have been several opportunities to do so. In the past, the adoption of tougher measures in the code of conduct for Members has led to pressure
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being applied to representatives in other institutions-for instance, Members of the European Parliament and peers. I hope that today's debate will allow us to return soon to the issue of the ministerial code of conduct, so that greater accountability can be introduced into the system.

Angus Robertson (Moray) (SNP): Will the right hon. Gentleman give the House some clarification on that point? The Government appear not to intend to make the kind of changes to the ministerial code that I would welcome. Will he make a commitment on behalf of the Conservative party that, if it were to form a Government in the near future, it would make such changes?

Sir George Young: Any new code of conduct would be the property of an incoming Prime Minister, who would devise his own code of conduct and guidance. I think I am right in saying that a previous Conservative Prime Minister was the first to publish the code of guidance for Ministers. If the hon. Gentleman wants a categorical assurance, however, he will have to wait until a later occasion.

We welcome the Government's decision finally to bring forward these amendments for debate, and I hope that the Secretary of State will respond to the substantive issues that I have raised. We all want to see a new system up and running by the time of the next Parliament, but, in achieving that objective, we should be able to ask legitimate questions about how the new regime will be run, how it will work and how much it will cost. These are the questions that will be in the minds of our constituents, and it is right that we should have answers to give them.

Mr. Heath: I shall start at the point with which the right hon. Member for North-West Hampshire (Sir George Young) ended. I shared his frustration and sense of disbelief when Ministers told us, following the publication of the Kelly report, that no statutory changes would be required as a consequence. The fact that we now have before us in the Government's name 15 new clauses, four new schedules and an amendment in order to implement Kelly shows that we were absolutely right to express such impatience. At last, we have the opportunity to put these measures on to the statute book. The Liberal Democrats have taken the view, as have others, that it was important to implement the Kelly recommendations in full and as promptly as possible. That is what this process is about.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): Is not a consequence of the Government's dithering over the need to introduce statutory provisions the fact that the new clauses and schedules have arrived very late in the day for us to scrutinise, to ensure that they are as effective as possible?

Mr. Heath: My hon. Friend is absolutely right. They arrived very late in the day, as did this Committee sitting. Last week, we did not even know that it was going to happen, despite the fact that we had repeatedly pointed out that the number of Committee days available were insufficient for the House's needs. Now we have our debate, however, and let us not decry the fact that we have amendments-albeit late in the day-and a day in which to discuss them.

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I intend to raise certain points, not to criticise the proposals but to ask for amplification on some of them, and to ask the Secretary of State to look more closely at the implications of others. My general position is that we will support amendments of this kind, although there are some detailed considerations that it will be proper for us to raise.

My first point relates to a matter that the Lord Chancellor touched on in his speech-the question of who will appoint the compliance officer.

Mr. Straw: Quis custodiet ipsos custodes?

Mr. Heath: Indeed. There is a problem with who the compliance officer will work for and the status of the officer. The Lord Chancellor has considered the matter and come to the conclusion that he would prefer the compliance officer to be a creature of IPSA. My feeling is that that could raise complications, particularly in the context of the legal appeal process that is now incorporated in the Government's proposals. I ask the Lord Chancellor to consider carefully what would happen if the compliance officer's position were challenged in court-as I suspect it will be-on the ground that they are a person adjudicating on the actions of IPSA while being complicit in those actions. The level of independence necessary to prevent such a challenge is insufficiently illustrated in the appointment procedure.

The status of the compliance officer is a little confusing at the moment. The only thing that we learn from the details of the new schedule is that the officer will not be an officer of the Crown. By definition they will not be an Officer of the House-nor should they be-so it is a little difficult to know exactly where they will lie in the great firmament. It is important that we at least attempt to get an answer to that question. I know that my hon. Friend the Member for Cambridge (David Howarth) has suggested informally that the Judicial Appointments Commission might be a vehicle, and the Lord Chancellor mentioned it in his speech. I think that my hon. Friend would be the first to agree that it is an imperfect answer, but it may be better than all the other imperfect answers that have been brought forward. However, we may need to consider the matter again.

6 pm

I turn to new clause 71, about which I have a simple question. It states that any of the new lay members who are to be added to the Speaker's Committee for the Independent Parliamentary Standards Authority under proposed new section 2A(6) of the Parliamentary Standards Act 2009 will cease to be a member of the Committee if they become a Member of either House of Parliament. Why was that role not included in the list of disqualifications under the House of Commons Disqualification Act 1975, which new schedule 6 states will apply to the compliance officer? Why adopt the way of disqualifying lay members set out in new clause 71, rather than simply list them under the 1975 Act? It would be simpler to have people listed in one place than to have to search around various laws for statutory disqualifications.

I do not wish to cast any doubt on Mr. Speaker's judgment-heaven forfend-but I wonder whether he should be required to gain a resolution of the House not only on the membership of the Committee, as was the case when the original members were appointed,
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but on the remuneration and allowances of the members. It does not seem entirely unreasonable that Mr. Speaker should consider the matter and put it before the House for resolution, rather than simply determine almost by holy writ how much the members should be paid. There have been occasions when the actions of previous Speakers and their advisers on the House of Commons Commission have not been as transparent as some Members have wished, and this is a matter on which transparency is devoutly to be wished for.

On new clause 72, the right hon. Member for North-West Hampshire raised an important point about the advice that IPSA is able to give, and I agree with him entirely that the compliance officer is not the right person to give it. How could the compliance officer possibly advise on the appropriateness or inappropriateness of a particular claim, and then if challenged determine the matter on the basis of his own advice? It is simply an untenable position.

The new general duty of IPSA that the new clause will introduce in proposed new section 3A(2) of the 2009 Act as a result of Kelly recommendation 41 is:

I wonder whether that could be expanded so that statutory provision was made for advice to be available to Members. The new clause goes part of the way, by stating that Members should be supported, but it does not explicitly state in what way they should be supported. In my view, advice should be part of that support.

While I am addressing new clause 72, may I ask the Lord Chancellor about proposed new subsections (8) and (9) of section 6 of the 2009 Act-the numbering is inevitably complicated when we are amending a previous enactment-which deal with how IPSA will make public information about claims? The new clause states that IPSA itself can decide what information it is appropriate to make available and how often and in what way that information should be published. That is fine-it is an independent body-but it will not be fine if we have backsliding from the position on the publication of Members' expenses that we have already reached through great adversity. It seems necessary that we impress on IPSA, even if only by exhortation rather than in statute, that the starting point should be the point that we have already reached. We should not revert to the secrecy that we had before.

I believe that the Lord Chancellor has dealt with the matter of retrospectivity in pay. However, it is not abundantly clear from new clause 73 that it is to be dealt with in the way that he suggested. It would be entirely inappropriate for retrospectivity to be applied to a previous Parliament, for instance, and I can see no obstacle to that in the current drafting of the new clause. I notice that proposed new section 4A(3) states:

I do not recognise different classes of Member of the House.

Mr. Straw rose-

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