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Clause 4, which provides for IPSA to pay for claims, raises an important question. Presumably the authority will have a budget equal to the sum of all MPs' allowances. What if MPs decide in the Finance Bill to increase or reduce that budget? What would happen then? What would happen to the underspend? None of these issues is clear.

I turn to the issue of parliamentary privilege, with which a great number of Members have been concerned this afternoon-and rightly. I was, in common with the noble Lord, Lord Neill, and the noble and learned Lord, Lord Nicholls, a member of that Joint Committee on parliamentary privilege, reporting in 1999. That was a decade ago. The committee's recommendations have never been followed through by the Government.

The Bill originally, in the other place, encroached on an important element of parliamentary privilege; the right to expect that proceedings in Parliament should not be used as evidence in a court of law. The House of Commons-rather rarely-showed some teeth in defence of that principle, and voted the clause down. But the Bill still leaves a big gap. One of the Joint Committee's central recommendations was that there should be a parliamentary privilege Act, to define-and therefore limit-what privileges are conferred on Parliament. The noble and learned Lord, Lord Bingham, told our committee:

"The term 'privilege' is, I think, plainly unfortunate, although hallowed by long usage. It wrongly suggests some perk or special right or dignity, which certain office-holders enjoy, when attention should be concentrated on the limited exemption from the ordinary law which the effective performance of a public duty requires".

That has been a constant thread in our debate today. As the Bill stands, even with the exclusion of the previous Clause 10, this is still a problem. My noble friend Lord Lester has set out very properly the concerns that have been already reported from the Joint Committee on Human Rights about proper process and fairness. Those too have not been properly addressed. It is a real concern to all Members, on all sides of the House, whatever they think about the timetable for this Bill, that we make sure that it is not just going to be a very temporary Bill, with all the weaknesses that

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that would entail; and that it is going to stand at least the test of time until we are able to give it-with a sunset clause, which again I strongly support-a reconsideration.

Can the Leader of the House give some indication of what the Government intend to do about parliamentary privilege? It is left in abeyance at the moment-in limbo. It is a real problem, but so too are the issues raised by the Joint Committee on Human Rights. Due process and right of appeal surely have to be built into any procedures to ensure that there are guarantees of fairness.

As the noble and learned Lord, Lord Woolf, pointed out, the 18th report of the House of Lords Constitution Committee, which reported today with admirable timing, has indicated that there are real problems with the section of the Bill dealing with offences.

In paragraph 39, the report says that it is,

As the noble Lord, Lord Elystan-Morgan, has just said, it would look from that as if the general public, in committing a fraud offence, have to be subjected to a much more formidable sentence than Members of the other place. That surely will do nothing to encourage reconnection between the people and Parliament.

In the other place, Mr Jack Straw said of Section 8:

"There is a difference between what is in section 2 of the Fraud Act and what is in this provision, not least in that in the Act one of the components of fraud is dishonesty, while in the Bill it is knowingly making a false statement".-[Official Report, Commons,29/6/02; col. 46.]

I am no lawyer, but knowingly making a false statement sounds to me to be pretty dishonest. Playing games of that sort seems to be not very helpful when we are trying to encourage greater trust in Parliament and parliamentary proceedings among the general public.

I will not attempt to go into some of the other inadequacies of the Bill. The point that I have to make to your Lordships' House-it has been made so often this afternoon and this evening-is that we have a responsibility to make sure that what comes to us goes away again in a better form than it came.

I do not believe that simply delaying matters meets that point. What I certainly believe very strongly indeed is that the process that we are setting up for the other place has implications for your Lordships' House as well.

Many Members have taken great heart from the statement made by the Leader of the House that the Prime Minister has undertaken a U-turn at some speed-U-turns at speed have very dangerous implications as we all know-and that he has given instructions to other members of the Cabinet that this Bill should no longer apply to your Lordships' House. I take that as a perfectly proper way to listen to Parliament, but it has implications for your Lordships' House.

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Clearly, anything that has implications for parliamentary privilege does not just address the situation at the other end of the building; it addresses your Lordships' House too. This Bill has such implications.

It will be said, sooner rather than later, that the arrangements for the other place in terms of setting and deciding allowances-"outsourced" was the word that one of your Lordships used-should apply to your Lordships' House as well. There are implications; and we would all be behaving like a herd of noble ostriches if we felt that there was nothing in this Bill that could affect your Lordships' House. The dangerous situation with ostriches is that they tend to get bitten in a very uncomfortable place.

It has already been pointed out by a number of noble Lords speaking in this debate that the Clerk of the Parliaments has drawn attention to this issue. We must take very seriously indeed what he says to us. Surely the time will come-it might not be immediately, but it will come-when, if this Bill goes through in its present form, or anything like its present form, there will be direct implications for your Lordships' House as well. Some would say that that is right and proper. Some would say that our present arrangements are as lamentable and as indefensible as those of the Commons. I do not necessarily take that view, but certainly there will be those who question that. Therefore, if the Bill reaches the statute book in its present form, it will have implications for us.

If we take at face value what the Leader of the House has told us this afternoon, the title of the Bill-the short title as well as long title-is now a misnomer. This is not a Parliamentary Standards Bill if it is set out now that it is not going to apply to one half of Parliament; it is the House of Commons independent standards authority that we are legislating for. That, surely, is what should be on the face of the Bill.

We are in a difficult situation, which is not entirely of the Government's making-of course we recognise that; some of us would blame the Daily Telegraph. It should have done the job much earlier. However, we have a problem with the onset of the Recess. The noble Lord, Lord Barnett, said that he had been reassured on a number of occasions by his Front Bench that the urgency was self-evident. What is self-evident from all the speeches on all sides of the House is that this Bill is nowhere near the satisfactory form which would meet even the objectives of the Government, let alone the deep-seated concerns of Members of both Houses.

8.10 pm

Lord Kingsland: My Lords, my noble and learned friend Lord Mayhew of Twysden, with his characteristic felicity of expression, referred to the deft footwork of the noble Baroness in her opening speech. How right he was. Indeed, it reminded me of a phrase in that memorable wartime song, "A Nightingale Sang in Berkeley Square":

My noble friend Lord MacGregor set a marvellous standard for the rest of the debate, effectively opening it for our side. He does not speak often in your Lordships' House these days, but as a Cabinet Minister

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in another place he spoke frequently. It was quite obvious to those who listened to him in those days that he has lost none of his oratorical skills.

I return to the noble Baroness's nimble tread. She said two things which I regard as germane to the issues in front of us. First of all, she said that there are no circumstances in which this Bill will affect the House of Lords-despite the remarks made at an earlier stage by the right honourable gentlemen the Prime Minister and the Secretary of State for Justice. However, as my noble friend Lord Crickhowell and the noble Lord, Lord Neill of Bladen, observed, does her statement also mean that the Bill will not be used as a model for your Lordships' House? I hope that the noble Baroness will deal with that matter in her reply; but I should say now that if it is to be made a model for what is to come to your Lordships' House, that underlines even more heavily the importance of the quality of scrutiny we give to the Bill.

The noble Baroness also said that we have a responsibility to let the other place have the Bill it wants. A number of your Lordships have commented on that statement. I wish also to say a few words about it. My first observation is: has the other place had a proper opportunity to find out what it really wants, given the time that was accorded to its debates? Secondly, as a number of your Lordships said-particularly the noble Lord, Lord Armstrong-this is future legislation. We are constitutionally a part of the legislative process. We have to take into account the interests not just of another place but of Parliament. Therefore, it is perfectly right that we give the Bill proper scrutiny, particularly given that it affects many fundamental principles that go to the heart of our constitutional arrangements.

However, perhaps as good a reason as any for our dealing with this Bill is that it has come to your Lordships' House in what has been described by more than one Member of another place as "a mess". As a consequence of the removal of two crucial clauses-Clauses 6 and 10-many of the provisions make no sense at all. We, in a sense, are trustees for the clarity of the Bill, as well as its content.

Many of your Lordships have talked about the process. I pay tribute to my noble friend Lord Goodlad for the extraordinary speed with which his committee has produced two excellent reports, both of which have made some excoriating remarks about the way that this matter has been handled.

The noble Baroness quite rightly drew our attention to the public anger about the question of allowances and expenses in another place. She was quite right in saying that this needs a prompt response. However, I discern from the debate that there is a deep division about what the character of that response should be. We have one kind of response in the Bill-which is IPSA and all the panoply of a statutorily independent body-but, on the other hand, other solutions have been proposed. The noble Lord, Lord Neill of Bladen, presented a perfectly plausible alternative for dealing with this matter.

Moreover, as my noble friend Lord Norton of Louth said, what is here as regards the expenses arrangement is simply a framework. What will be poured into that framework depends on an entirely different body, quite outside your Lordships' House,

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which is the Committee on Standards in Public Life. Until we know what its recommendations are, which we will not get until the autumn, we will not know to what use this framework will be put. That went to the core of what my noble friend Lord Norton was saying.

The other part of the Bill, with respect, does not merit urgent treatment-the question of financial interests. That is the part of the Bill that concerns the Opposition the most. There is no evidence that the question of financial interests needs urgent treatment. There was a crisis in the other place in the mid-1990s, which is best encapsulated in the words "brown envelopes". We recently had our own difficulties, as your Lordships will recall. In my submission, both those issues were handled extremely well by the internal arrangements of both Houses. I should be very surprised if we have similar crises of that sort in the foreseeable future. Both in another place and in your Lordships' House the internal procedures were wholly adequate to deal with these matters.

Moreover, the kind of arrangements on the face of the Bill, with respect to financial interests, will worsen the problems, as was so brilliantly described by my noble and learned friend Lord Howe of Aberavon, as well as by other noble friends and other noble Lords. We have been concerned in your Lordships' House for a very long time about the increasing professionalism of another place. We have been concerned, as my noble friend Lord MacGregor said, about the decreasing number of Members of another place who have skills outside the purely political ones. The provisions in this Bill will worsen that situation profoundly, and for that reason are wholly misplaced.

The Earl of Onslow: My Lords, my noble friend said that there was no urgency on certain financial matters. Under those circumstances, will he encourage his friends on the Front Bench to vote for my noble friend Lord Norton of Louth's amendment-or is that asking too much?

Lord Kingsland: My Lords, the noble Earl can ask as much as he likes. I have found, when I have responded to similar questions from him in previous debates, that I have rarely satisfied him. However, I will put the questions to the noble Baroness at a later stage in my remarks. I hope that that will suffice.

I will say something about constitutional issues. The best way to do this is to draw your Lordships' attention to certain provisions of the Bill. First, there is the question of the relationship between Parliament and the courts. This has been managed very satisfactorily ever since the Act of Settlement. There has been a constitutional understanding that the courts will not interfere with parliamentary procedures and Parliament will not interfere with the procedures of the courts.

That balance, which is one of constitutional convention, is now threatened. A good example of this is the enforcement provision in Clause 7(2)-a provision to which both the noble Baroness and the noble Lord, Lord Goodhart, have drawn our attention. The provision states:

"The IPSA may recommend to the House of Commons Committee on Standards and Privileges that the House should exercise any of its disciplinary powers in relation to a member of the House".

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That will be as a consequence of an inquiry made by the commissioner and endorsed by IPSA.

Until now, the arrangements that have been in place since 1995 have never been questioned in any court of law. The commissioner for standards, who has been put in place to examine any complaint about a Member of another place, has conducted his proceedings, reached his conclusions and made his recommendations while acting as part of another place, and therefore being protected by the provisions of Clause IX of the Bill of Rights. Will that still be the case? The Bill requires IPSA to recommend to the Committee on Standards and Privileges certain actions as a result of its investigation. It is clear that the recommendation will be capable of being judicially reviewed by a court. Will the ability of the court to judicially review extend to the decision of the Committee on Standards and Privileges?

Lord Goodhart: My Lords, I am grateful to the noble Lord for giving way. My understanding is that the Government have agreed to withdraw that provision.

Lord Kingsland: My Lords, we have tabled an amendment to the effect that the word "recommend" should be replaced by the word "report". The Government have indicated that they are considering it. I had not understood that they had accepted it.

Baroness Royall of Blaisdon: My Lords, I indicated in my earlier speech that we would replace "recommended" with "referred". It is our clear intention to refer cases, not to recommend them.

Lord Kingsland: My Lords, if that is an undertaking-

Lord Lester of Herne Hill: My Lords, I have listened carefully to the noble Lord. He has not yet faced the problem-I imagine that he will-raised by the Joint Committee on Parliamentary Privileges and the Constitution Committee, of complying with Article 6 of the European Convention on Human Rights. The problem is that if whatever machinery is set up is punitive or determines civil rights and obligations, there must be an independent and impartial tribunal to deal with the matter, or else we will be-as the Joint Committee on Parliamentary Privileges said 10 years ago-in trouble under the convention. Does the noble Lord have a solution to that difficult problem?

Lord Kingsland: My Lords, we are in danger of getting into a Committee debate here, so I will reply to the noble Lord as succinctly as I can. My understanding is that the investigation process is plainly judicially reviewable, and if it falls below the standards of the Human Rights convention, a court will say so and the procedures will have to change.

Lord Lester of Herne Hill: My Lords, that is the very problem of parliamentary privilege that must be solved by having a proper procedure.

Lord Kingsland: My Lords, I completely agree with the noble Lord. The issue is whether Section 6 is human rights compliant. I was addressing a different issue: what happens if IPSA makes a recommendation to the Committee on Standards and Privileges with respect to the possibility of the court judicially reviewing

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the committee? Now that the noble Baroness has underlined that she has made that concession, I will not trouble the House on the matter any further. It is an important concession from the Government, and I thank her for it.

It is also crucial to change the offences provisions under Clause 8. We on the committee will seek to expunge the whole of Clause 8. There are three offences. We need not trouble ourselves any further about Clause 8(3), because now that Clause 10 has been removed from the Bill, it would be impossible to use parliamentary proceedings as evidence in court, and therefore impossible to establish a prosecution case against any Member of Parliament.

The other two provisions remain. The first one has been spoken to by a number of noble Lords, in particular by the noble and learned Lord, Lord Woolf, and the noble Lord, Lord Goodhart. I respectfully agree with their conclusions. It is clear that the matter is covered by Section 2 of the Fraud Act 2006. Therefore it is unnecessary to have a provision that mirrors it in Clause 8(1), particularly since the provision only carries with it a sentence of imprisonment for one year, whereas Section 2 of the Fraud Act carries a sentence of 10 years. It will be suggested by the public that, by inserting Clause 8(1), the Government are trying to set a much lighter penalty for Members than for the public. That would be highly dangerous-I am delighted to see that the noble Baroness is nodding.

Lord Foulkes of Cumnock: My Lords, would it not be possible to prosecute the Member of Parliament under the Fraud Act, as well?

Lord Kingsland: My Lords, it is now possible to do that, and indeed I believe that to be the more desirable approach.

Lord Foulkes of Cumnock: My Lords, it would be possible even if the Bill becomes an Act.

Lord Kingsland: My Lords, removing Clause 8 would have no effect on the application of the criminal law.

The remaining offences come under Clause 8(2), which refers to failures with respect to the financial register. This is a completely counterproductive defence. You cannot have an offence under Clause 8(2) until the financial rules have been legislated for. Who legislates for the financial rules? IPSA decides what these rules, which are about to become criminal, are. It then sends them to another place, which endorses them by a Motion and they become the law of the land. What an extraordinary way to make criminal law. In effect, it is not Parliament-involving both Houses and the Crown-that is making the criminal law, but IPSA. Once it establishes the financial rules, the only thing that another place can do is to endorse them-it cannot even amend them. That cannot be constitutionally right and I urge the Government to withdraw the whole of Clause 8.

I hope that the noble Baroness has heard enough from noble Lords all around the House to realise that fundamental changes must be addressed.

Lord Tyler: My Lords, the noble Lord, Lord Kingsland, will be aware that a number of his noble friends

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pressed me on whether I and my colleagues will vote for the amendment of the noble Lord, Lord Norton. Will he?

Lord Kingsland: My Lords, we have tabled a two-year sunset clause to the Bill. My noble friends have heard the speech of the noble Lord, Lord Norton, and will make up their own minds about what to do, having also heard the noble Baroness's speech. The noble Baroness also knows that a number of Members have urged her, through the usual channels, to find more days between now and 21 July to deal with this Bill. I cannot predict what the noble Baroness's reaction will be; but from my part, the Front Bench of the Opposition will abide by the decisions of the usual channels.

Lord Barnett: My Lords, in an earlier intervention in the speech of my noble friend Lord Peston the noble Lord assured us that there was no agreement between the Front Benches. He has now tried for 20 minutes to tell us nothing. Would he care to tell us in which Lobby he will be if, at the end of my noble friend's speech, there is a Division on the amendment of the noble Lord, Lord Norton?

Lord Kingsland: My Lords, on the amendment of the noble Lord, Lord Norton, I shall be in neither Lobby, and nor will my Front-Benchers. I have just made that quite clear to the noble Baroness. We are bound by the decision of the usual channels.

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