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I repeat: we should not criticise IPSA staff. It is their bosses who created this monster. It is not fit for purpose. This is not a question of MPs wanting to line their pockets; it is a question of MPs being able to pay the bills, so that they can operate their constituency offices and their staff can get on with their jobs. I honestly believe that if the job had been handed over to Tesco, it
would have been done more efficiently, because Tesco knows everyone who goes in its shops and what they purchase. If every MP were issued with a House of Commons credit card, at the end of the month the printout would say what had been purchased and it would be deducted automatically. No money would go out of or into an MP's personal account.
It is an affront that I have found it necessary to open a separate bank account. I do not see why the private bank account of my wife and I should be called upon to pay the office costs of an MP and that money then paid back into our private account. It is a real affront. Please, let us take up the excellent research undertaken by my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley). We have the Leader of the House and the Minister here, and I can guarantee that the Deputy Prime Minister will hear about this at 5 o'clock tonight.
Barbara Keeley (Worsley and Eccles South) (Lab): It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Walsall North (Mr Winnick) on securing the debate.
It is almost a year since the Parliamentary Standards Act 2009 went through its Commons stages. I remember it well. The Act created the Independent Parliamentary Standards Authority and gave it a number of administrative and regulatory functions, including payment of MPs' allowances, dealing with allowance claims and revising the allowance scheme for MPs. The key aspect of the Act is that it gave IPSA those functions in relation to Members' allowances, yet when IPSA published the first scheme for consultation, it changed the word "allowances" to "expenses".
Most right hon. and hon. Members understand the anger and annoyance generated in the public by the term "MPs' expenses" following the scandal of last year. It therefore seems to me to be incorrect and somewhat provocative of IPSA to describe allowances designed to support MPs in carrying out their parliamentary functions as expenses. We could debate the different definitions, but the definition of "allowance" is money defined or set aside for a purpose-in the case of MPs, to pay essential costs such as staff salaries and national insurance, rent, business rates and utility costs. It includes the sense that the sum specified in the allowance may or may not be used, but IPSA seemed to react to the term "allowances" by suggesting that if it made an "allowance scheme", MPs would use all of the allowance allocated. That has not been the case in the past.
There is a wide variety of definitions of expenses, but a common one is that of costs incurred by an employee that are payable by an employer. As other Members have said, that does not fit the situation of MPs as we are not employees of the House. I strongly feel that "expenses" has overtones that work to hamper Parliament's recovery from the scandal generated by the discredited system used in the previous Parliament. As my hon. Friend the Member for Walsall North has said, we all want to get over it. In my view, IPSA would be well advised to describe the scheme as an allowance scheme, as the 2009 Act laid down.
Interestingly, IPSA uses a different definition of expenses when it comes to its own reporting. It states on its website that it will publish all expenses and hospitality
incurred by the IPSA board and senior staff. If it used the same definition of "expenses" for its own staff, it would report its office costs and the salaries and other support costs of its staff, as well as personal expenses. What it actually publishes is travel and accommodation costs.
What was called the office costs allowance is now split by IPSA into two allowances: constituency office rental and general administrative expenditure. The previous allowance was more than £22,000 and could be supplemented by transfer from other allowances if office running costs were higher than the allowance. The IPSA scheme split the allowance into two parts and reduced it by £1,300. One part of the allowance has to be used to pay office rent, business rates, utility bills and office insurance, and the other for office furniture, computers and printers, phone systems and bills, stationery and postage. Why does IPSA feel that it is right to reduce the total amount of allowances for running an MP's constituency office?
The Committee on Standards in Public Life looked at the previous allowance and, in its report, recommended no change. Not only has IPSA reduced the allowance, but it has arbitrarily split it and insisted that office rental and associated costs must somehow fit into the reduced half, with the other part of the allowance not able be used for rent, rates or utility bills. Apparently, the level of rental used by IPSA to set the constituency office rental cap is about £5,000 a year, which is meant to pay the annual rent of offices for the MP and up to three and a half staff, plus filing space, printers and space to meet constituents. It is not adequate. The cap is said to be the average office rent paid in the previous Parliament. The concept of an average rent is strange-rents vary up and down the country and probably half of the MPs in that Parliament had a higher cost than the £5,000 average. Many MPs are able to rent office space at low cost from constituency associations or have subsidised offices from their local authority, but for other MPs such subsidised and low-cost offices are not available. There is a danger that IPSA's splitting the allowance and setting such a low cap on the office rental element could drive MPs out of their current constituency offices and into unsuitable premises.
Helen Goodman: My hon. Friend is absolutely right. It is even more absurd to put things over which no one has any flexibility into one budget. We sign up to all the things included in the rent five years beforehand-they are not under our control-and all the flexible things are in another budget. Putting those two budgets together would make management of the money far easier.
Barbara Keeley: My hon. Friend makes a very good point. My hon. Friend the Member for Walsall North referred to new MPs setting up their offices from scratch. Some new colleagues have told me that they cannot afford the offices used by their predecessors. The rent will last for a number of weeks and then they will be pushed out of those offices.
On the same day that my right hon. Friend the Member for East Ham (Mr Timms) was stabbed at a constituency surgery, I challenged a person whom I thought was breaking into a property neighbouring my constituency office. The police advised me that challenging would-be burglars is not a good idea and that I should
desist from doing so in future. My current constituency office is a place in which I feel that my staff and I are safe-it is not a shop, it is not on the ground floor and we have good security protection in the building-but I am very aware of the possibility of crime in the area and the other security threats posed to MPs and their staff.
Ian Mearns (Gateshead) (Lab): I am an MP for a new constituency following a boundary change. It would plainly have been the wrong decision for me to try to inherit the premises occupied by my former colleague, David Clelland, which are on the outskirts of the new constituency. In Gateshead town centre, there is a significant transport hub that feeds virtually every part of my constituency, so it would be right for me to establish a new constituency office there. However, the IPSA recommendations on rents do not take account of town centre locations, where rents are necessarily higher because of market conditions. That precludes my establishing a constituency office that is handy for my constituents to access, unless I subsidise it out of my own salary.
I am short of time, so I want to end my remarks on that aspect by saying that I cannot get another office that I believe would be safe for my staff at the rent that IPSA has used to calculate office costs. IPSA is considering my case, and presumably that of other Members in my situation. I hope that it will be true to its word and not force me and other MPs out of our constituency offices. If it forces us into cheap premises in unsuitable areas, what does that say about security and safety considerations? Following on from my hon. Friend's intervention, I am now thinking about finding ways to subsidise my office costs. That is the position we have been pushed into.
In summary, why has IPSA changed the terms laid down in the Parliamentary Standards Act 2009? Why does it describe our offices and staffing costs and other essential elements of MPs' costs as "expenses", given that the word has such a particular resonance with the public? Why has it caused a great deal of doubt, uncertainty and problems to MPs by reducing the office costs budget and splitting an allowance that worked well into elements with caps that are too low to work properly for a number of MPs and that, by forcing MPs into cheaper office premises, could have very serious implications for the safety and security of MPs and their staff?
Jim Sheridan (Paisley and Renfrewshire North) (Lab):
I congratulate my hon. Friend the Member for Walsall North (Mr Winnick) on securing this debate. In anticipation of press reporting of this debate, may I say that we get it-but we have had it? Also on press reporting, I would really welcome Mr Kennedy's coming out of his luxurious bunker to tell us whether a member of staff said to an MP, "Don't shout at me because it wasn't me who fiddled my expenses." I very much doubt whether that was said by a member of IPSA, because the staff are
extremely helpful if they can be. I raise the matter because it relates to the whole question of staff budgets. IPSA has effectively cut £5,000 from staff budget levels. That means that 175 MPs will have to reduce their staff, which is unacceptable.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): As a new Member, I inherited the staffing structure of my predecessor. He and I and our constituents have been served by those staff with both dignity and diligence. If there is no change in the staffing levels, I will have to sack someone. Does the hon. Gentleman not agree that that is unfair?
Jim Sheridan: That is grossly unfair. The worrying aspect is that the hon. Gentleman may even be taken to an industrial tribunal, and who will pay the cost of that? IPSA has also denied our staff the opportunity to be awarded performance-related bonuses. What we want to know-we have been trying to find this out and it has been very difficult-is whether IPSA staff receive performance-related bonuses. If they do, what is the criteria for them and how much do they get? As for redundancy, we cannot pay staff a basic redundancy, and we have little opportunity to enhance that, which is causing us concern.
There is also the question of gender in this place. Maternity pay for our staff now comes from a contingency fund, and it is approved or rejected at the sole discretion of IPSA. There is no possibility of an appeal or anything else. Again, that is extremely worrying.
I am conscious of the time, but let me finish by referring to the question of the stand-in Deputy Prime Minister, the hon. Member for Colchester (Bob Russell), who asked why we could not have a credit card. I asked IPSA that question myself, and it came back and said:
"Your email asks whether IPSA can consider an alternative system for processing expenses, based on a credit card similar to the travel card. The system used by IPSA has been assessed to be efficient and cost effective for the purposes required. A significant advantage of the system is that it has been specifically designed to help MPs by preventing them from making mistakes at the initial stage of inputting an expense claim - this automatically reduces the level of incorrect claims and therefore reduces associated administration costs."
If we had a simple credit card system that is transparent and accountable-that is what the general public wants and what we want to give them-we would not need all these compliance officers, communications officers and press officers. We have created an administrative monster. If we had a simple credit card system that is, as I said, transparent and accountable, we would not need all of that.
Mr Richard Bacon (South Norfolk) (Con): I strongly endorse the point made by the hon. Member for Paisley and Renfrewshire North (Jim Sheridan). If we can have a House of Commons travel card for our train or plane tickets, why can we not have it for anything else? The hon. Gentleman made a very good point.
People will not be able to take up the excellent suggestion of my right hon. Friend the Member for Tonbridge and Malling (Sir John Stanley) about privileges until the Standards and Privileges Committee is established. There is one other thing that Members can do now.
Many people have said that IPSA is not accountable, but that is wrong. It spends public money, which, therefore, makes it accountable. The IPSA chief executive is an accounting officer. The Comptroller and Auditor General is an officer of the House of Commons; he is the head of the National Audit Office. His address is 157 Buckingham Palace road, London SW1 W9SP. I encourage all Members of Parliament to write to him with their own experiences, because he is responsible. He is charged by Parliament, under the National Audit Act 1983, with ensuring the effective, efficient and economic use of public funds. In due course, he will need to take an interest in this question. It is a simple suggestion, but people should encourage the Comptroller and Auditor General to look at IPSA, because eventually, if there is enough pressure, he will have to look at it, and IPSA will then have to account for how it is spending public funds. It is that simple.
Emily Thornberry (Islington South and Finsbury) (Lab): I promise to be extremely brief. I appreciate that many Members do not have a great deal of sympathy for us London MPs because we have the huge advantage of being able to go home every night and see our families, but we do have particular difficulties. Historically, we have had problems balancing our budgets. The current rules mean that the office limit of £12,761 is simply far too low for London MPs. The amount of money allowed for staff is too low for central London. IPSA suggests that we spend 20% more on our staff, but not a penny more is given to us to be able to employ them. The requirement for staff pensions creates new pressures on that tight budget, and the money allowed for staff bears no relation to the needs of the constituency.
It is the opinion of central London MPs that there should be an objective test, perhaps based on the index of multiple deprivation, on the basis of which we should be allowed additional case work. We have confessed to each other that, over the years, we have been putting large amounts of our own salaries into our staffing budgets. Frankly, this is the last straw. We are quite sure that IPSA intends to support Members of Parliament in their work, but it has got a number of the issues completely wrong, and that needs to change. We are pleased that IPSA has agreed to an early review, but we ask it to
"develop an objective method of assessing constituency need. Assess how many staff would be needed to meet that need. Fund that number of staff. Commit to funding increments for staff with long service. Commit to funding London weighting for London-based staff. Develop an objective method of assessing local rent levels. Fund a constituency office large enough to hold the assessed number of staff plus volunteers."
Mr Jack Straw (Blackburn) (Lab):
I express my gratitude to my hon. Friend the Member for Walsall North (Mr Winnick) for raising this very important issue. It is important not only to every colleague in the House, but, indirectly, to every constituent. It will become very apparent from this debate that concern about the structure
and administration of the new allowance system goes right across the House. It is a matter of concern regardless of party or of previous experience. In his important remarks, the right hon. Member for Tonbridge and Malling (Sir John Stanley) said that IPSA was the first body ever to be created with power effectively to adjudicate over the conduct of Members of Parliament, and that is true. However, it is worth reflecting on why this time last year, the whole of the House of Commons, all three party leaders, and some of us caught up in a vice by those party leaders, were under such pressure to establish a separate and independent allowance system.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): I want to raise one issue that probably has not been mentioned yet. We are talking about value for money for the public purse and the taxpayer. As a matter of public record, at the moment the cost of my accommodation in London is £252.54 a month. Under the IPSA system and the proposed changes, that figure will rise to about £1,200 or £1,400 a month, so the cost to the taxpayer will be four or five times greater. Does the right hon. Gentleman think that that represents value for money?
Mr Straw: From what I have seen, IPSA itself recognises that there are a number of anomalies in the system-although I do not remotely speak for IPSA. Those include the anomaly that if a colleague lives in a second home that they now own they cannot make a claim in respect of that second home. They could, however, rent the home out to a third party and then use an IPSA allowance to rent further accommodation. That is plainly irrational and I gather that it is going to be changed.
Bob Russell: Will the right hon. Gentleman please confirm that the public anger during the last year was directed at MPs' second home allowances and not at our staff, our constituency offices and the office costs? IPSA has created problems that were not there before.
Just to go back slightly, it is true that this is the first time that there has been a body adjudicating on the conduct of Members of Parliament. However, the reason for that is not an invention of the board of IPSA; it was because of the egregious and outrageous conduct of some Members of the previous Parliament. We know what happened. We also know that the Commons, during a period of years, although it was never presented with the full facts, failed to take-
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