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I thank the Attorney-General for her excellent letter and for the concise but authoritative statement she has made today. If it commends itself to the House of Commons, it would be desirable for it to adopt procedures which are in accordance with the Strasbourg and our own common law rules of fairness. But that is a matter for the House of Commons and should not form part of the Bill.

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Lord Elystan-Morgan: My Lords, I, too, congratulate the Attorney-General on her clear and concise exposition of her case. Perhaps I may make a brief point on Clause 8(1)(a) in relation to a false claim. I shall try to

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illustrate how narrow the difference is between the Government's case and the case of those of us who have spoken at some length and with great force against that measure. It is perfectly clear that, in so far as the vast majority of cases which come under Clause 8(1)(a) are concerned-as was illustrated so trenchantly by the noble and learned Lord, Lord Mackay of Clashfern, last week-the vast majority will inevitably involve dishonesty. It is impossible to conceive of a situation where a person deliberately makes a representation knowing it to be false or misleading without it being dishonest.

However, when the Leader of the House was asked last week about illustrations, she helpfully described two situations where it might be difficult to prove dishonesty as defined under the authority of R v Ghosh some 25 years ago, a case which has been regarded as the classic enunciation of that interpretation. The noble Baroness said that there could be a situation where a person rents flat 22A but then, for one reason or another, moves to flat 24A in circumstances that are identical. The claim that would be made would be incorrect-it would be false-but it would be for exactly the same amount of money as would be deserved by that claimant in any event. The other illustration would be perhaps more difficult to deal with. It envisages a situation where a Member of Parliament had gone along to one of the servants of the House and had been assured that it was perfectly proper, moral and legal in every way for a claim to be made, only to find out later that that was not the case. Those two instances illustrate the difference between offences under the Fraud Act 2006 and the Theft Act 1968 and the offence now under Clause 8(1)(a) and (b).

However, the point I make is this: in those instances, would anyone in his senses wish to prosecute a Member who had been told in terms by a servant of the House that what he was doing was entirely proper; or where the person did not want to fill in a whole barrage of forms to change his application from 22A to 24A? Indeed, there may be some other reason-he may have formed a relationship with someone and did not want to publicise the fact that he had gone to a different flat-but would anyone in his senses prosecute in those circumstances? If the answer to my rhetorical question is no, what is the point of breaching the fundamental rule of privilege that the jurisdictions of the High Court to Parliament and the jurisdictions of the other courts are mutually exclusive? It is not worth it.

Baroness Scotland of Asthal: My Lords, I thank all noble Lords who have agreed with the analysis and for the kind remarks that have been made about it. I can reassure the noble Lord, Lord Elystan-Morgan, about the difference between these two offences. We have to take into account that if, pursuant to Section 112 of the Social Security Administration Act 1992, an ordinary member of the public made a false declaration similar to that which we now contemplate, they would be successfully prosecuted. We are trying to draw a line under the poor practice that has gone before and be very clear that all Members of Parliament have to act with the utmost probity when filling in these issues. We would hope that no Member of Parliament would

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seek to deliberately fill out these forms incorrectly in a false or misleading way. So whatever has gone on in the past will be left in the past, but from now on there will be this clear standard.

We do not think that it will cause undue difficulty. The aspiration of the whole House and the other place is to have rules that are clear and precise and easy to follow, and not depend on conversations about what may be in and may be out. A lot of pain and difficulty has been caused because there was not clarity: what one person thought was in, another person thought was out; one person may have been given an assurance, another person was not. We hope that that will now be concluded. We will have new rules, clearly understood and promulgated, that will enable all to know precisely where they stand and therefore to answer frankly.

I say to the noble Lords, Lord Pannick and Lord Lester, and the noble and learned Lord, Lord Mackay of Clashfern, that I agree with them. I would particularly like to adopt in their entirety the comments made by the noble Lord, Lord Pannick. I would not wish the courts to misunderstand the acceptance that I make that there is a technical ability to judicially review, because they can do so only within the context and confines that currently exist for that principle. I respectfully agree with the noble Lord's analysis that, in the circumstances that he describes, the court, acting properly, would be likely to resist the temptation to review. Nothing that I say should be misinterpreted. We therefore have, in this debate, a happy Pepper v Hart exposition.

With regard to the comments from the noble Lord, Lord Lester, and the noble and learned Lord, Lord Mackay of Clashfern, about fairness, I respectfully say that there is a great deal of merit in the suggestions that they make. I am confident that this matter is likely to be addressed, if not in this debate then later.

Lord Jenkin of Roding: My Lords, I am grateful to all noble Lords who took part in this debate. I think that the circumstances will show that I was justified in putting these clauses down again in order to enable us to have what I can describe only as the immensely authoritative statement from the noble and learned Baroness the Attorney-General, coupled with her letter. I have some sympathy with those who suggested that it is easier to read the letter than to follow the somewhat complicated argument that the noble and learned Baroness delivered in the House, but we will have both. She has been reading into the record in the shape of Hansard, while her letter contains some additional explanations.

I shall not go into the whole question of criminal liability under Clause 8. That has been addressed by others, and we have had an interesting and authoritative answer. On the question of the European legislation, though, it is now recognised that yes, the European Court of Human Rights can call into question what is said in Parliament, as was emphasised by the case that I cited and which the noble and learned Baroness also referred to, A v United Kingdom. There is recognition that there are circumstances in which Members of either House can find their remarks being quoted in a court. On whether my noble friend Lord Higgins is right that taking out the words "in the United Kingdom"

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would make a difference, I would need to take legal advice; neither he nor I are lawyers, and I would hesitate to express an opinion.

The noble and learned Baroness has gone a long way to satisfying me that the risks of there being a major challenge to Article IX of the Bill of Rights 1689 are extremely small. Although one might have some doubts about her assertion that the Bill is now "perfectly formed"-I have a suspicion that she may come to regret those words-she has gone a long way to satisfying me on the merits of this particular case. I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Amendment 3 not moved.

Clause 2 : Independent Parliamentary Standards Authority etc

Amendment 4

Moved by Lord Shutt of Greetland

4: Clause 2, page 2, line 2, at end insert "("the Committee")"

Amendment 4 agreed.

Schedule 1 : Independent Parliamentary Standards Authority

Amendment 5

Moved by Baroness Royall of Blaisdon

5: Page 6, line 21, leave out from "means" to end of line 22 and insert "-

(a) a function that is exercisable-

(i) by the Director by virtue of this section, or

(ii) by customs revenue officials by virtue of section 11,

(b) a function that is conferred on customs revenue officials or the Director by or by virtue of any of sections 22 to 24 (investigations and detention), or

(c) a function under Community law that is exercisable by the Director or customs revenue officials in relation to a customs revenue matter."

Amendment 5 agreed.

Amendment 6

Moved by Lord Jenkin of Roding

6: Schedule 1, page 15, line 34, leave out "consistency" and insert "the consistency specified under sub-paragraph (3)"

Lord Jenkin of Roding: My Lords, we had a brief discussion in Committee about the meaning of the word "consistency" in the subsection concerned. The noble Lord, Lord Borrie, suggested that it obviously referred back to the previous clause, and the noble Lord, Lord Bach, agreed with that. I suggested that if the word "such" were inserted, that would make it clear. That did not find favour, as was indicated in the letter that we had from the noble Baroness the Leader of the House. I therefore suggested the words in this amendment instead. This is a matter of legal

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interpretation; there is no real substance in the thing other than where it makes the issue clearer to the reader. As the Bill originally stood, the word "consistency" at the end of the subsection seemed to give rise to some confusion. I beg to move.

Lord Bach: My Lords, I would like to make our debate on this amendment last, but I cannot. We agree with the noble Lord and thank him. We are going to vote with him on this amendment.

Lord Jenkin of Roding: My Lords, I am immensely grateful to the Government and rather overwhelmed.

Amendment 6 agreed.

Clause 4 : MPs' allowances scheme

Amendment 7

Moved by Lord Hunt of Kings Heath

7: Clause 4, page 3, line 3, at end insert-

"(1) In section 3A(1) of the European Parliament (Pay and Pensions) Act 1979 (c. 50) (power to make order aligning MEPs' resettlement grants with MPs' resettlement grants), after "resolutions of the House of Commons" insert ", or a scheme under section 4 of the Parliamentary Standards Act 2009,"."

The Minister of State, Department of Energy and Climate Change (Lord Hunt of Kings Heath): My Lords, this is a technical amendment. Under the European Parliament (Pay and Pensions) Act 1979, there is a power for the Leader of the House of Commons to make an order aligning MEPs' resettlement grants with MPs' resettlement grants. At the moment, the power can be exercised only to align MEPs' grants with resettlement grants set by resolution of the House of Commons. In future, however, resettlement grants will be set as part of the allowance scheme that is drawn up by IPSA. It is a key part of the scheme for improving the independence and transparency of the allowances scheme that it should not be subject to approval by resolution of the House. Without this amendment, therefore, there would be no means in future of aligning MEPs' resettlement arrangements with those for MPs.

I should add for clarification that, from 14 July 2009, the 1979 Act applies only to those who were MEPs before that date and who opt out of the new system for payment of MEPs by the European Parliament. I beg to move.

Amendment 7 agreed.

Amendment 8

Moved by Lord Hunt of Kings Heath

8: After Clause 5, insert the following new Clause-

"Information and guidance about taxation

(1) The IPSA must provide to members of the House of Commons-

(a) details of any general information or guidance about taxation issues published by HMRC that it considers they should be aware of, and

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(b) any other general information or guidance about taxation issues that it considers appropriate (consulting HMRC for this purpose as it considers appropriate).

(2) "Taxation issues" means-

(a) issues about the taxation of salaries payable under section 3 and allowances payable under the MPs' allowances scheme, and

(b) any other issues about taxation arising in connection with those salaries and allowances.

(3) "HMRC" means Her Majesty's Revenue and Customs."

Lord Hunt of Kings Heath: My Lords, this amendment deals with an issue which arose in Committee in the other place. It was felt in debate there that, given that some of the public concern about the issue of allowances and expenses arose from the tax treatment that had sometimes been applied, there was a case for making clear what IPSA's responsibilities with regard to taxation matters were.

A new clause, proposed by Mr Durkan in another place, would have laid certain obligations on IPSA in relation to both individual tax deductions and general guidance. In that debate, the Government clearly understood that rules in relation to taxation concerning the tax treatment of second homes and questions about whether accountants' expenses were tax-deductible had formed part of the public concern about the revelations about the expenses regime in the other place. However, the Government had concerns about the drafting of Mr Durkan's proposed new clause.

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It either set out matters of general practice which would apply to any person who was making payments that would be taxable, such as salaries, or it appeared to suggest that, in certain circumstances, the IPSA might be obliged to give individuals tax advice. In particular, the clause proposed by Mr Durkan said that the IPSA should give individuals advice on relevant principles and considerations of due parliamentary standards. As was pointed out during the debates in the other place, it is the individual's obligation to determine his or her tax liability and, if necessary, to seek professional advice so to do. It would not be, and should not be, an excuse for making the wrong tax payments that the IPSA had given advice on the matter. HMRC already provides general advice and guidance. Legislating for that would be unnecessary and potentially have unforeseen consequences.

However, although the Government were concerned at the wording of Mr Durkan's proposed new clause, they accepted the general principle of what he was aiming at. The draft clause which I have now tabled sets out the general obligation on the IPSA to provide to Members of the House of Commons any general information or guidance about taxation issues published by HMRC. The key point of this is that the obligation is to make available guidance which HMRC has published. In addition, it may make available information or guidance about taxation issues that it considers appropriate, but again in consultation with HMRC. We consider this to be a proportionate response to the issues raised in the other place, but without falling into the difficulties that might have arisen under the original new clause moved by Mr Durkan. I beg to move.

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Lord Mackay of Clashfern: My Lords, are we to assume that the IPSA will have responsibility for deduction and payment of tax?

Lord Hunt of Kings Heath: My Lords, my understanding is that it will and that it will exercise it within the proper framework for the deduction and payment of both income tax and national insurance.

Amendment 8 agreed.

Clause 7 : Investigations

Amendment 9

Moved by Lord Jenkin of Roding

9: Clause 7, page 5, line 5, leave out from "such" to "are" and insert "conditions as are specified by the IPSA under subsection (9)(d)"

Lord Jenkin of Roding: My Lords, I hope that we can take this amendment with Amendments 10 and 11. Noble Lords will remember that the Government tabled a fairly substantial amendment to the Bill in Committee, inserting subsections (4), (5), (6) and (7) in Clause 7. Subsection (5)(b) refers to,

in relation to payments. Subsection (7)(c) also refers to,

I have to say that I was totally confused: I did not know what those conditions referred to. However, the noble Lord, Lord Bach, very swiftly enlightened me by saying:

"IPSA can impose conditions about which cases are suitable to be dealt with in this way".-[Official Report, 14/7/09; col. 1086.]

Light dawned, and one then realised that this was quite an important part of the Bill.

We now have the very full description set out on the first and second pages of the letter of 16 July written by the noble Baroness the Leader of the House, which explains clearly to what the provision refers; namely, that if a Member has made a claim which turns out to be of the kind referred to in the Bill and is of relatively minor concern, the commissioner does not have to refer the findings to the Committee on Standards and Privileges. I can well understand, as is explained at some length in the letter, that the IPSA may well want to attach some conditions to the circumstances in which that non-referral might take place, and it is to that that "other conditions" in the Bill refers. However, although the clarification has been made, the letter is not part of the statute. It may be sensible for the noble Baroness to say just a few words, perhaps not as long as her letter, to put on the record just what these conditions are about.

It was said in the debate-I think by the noble Lord, Lord Goodhart-that it was important that people should know what the conditions are. One therefore asks whether they will be published or are relevant only to particular cases. It would be helpful if we could get some guidance on that. I beg to move.

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Lord Goodhart: My Lords, as the noble Lord, Lord Jenkin, mentioned, I said in Committee that it is highly desirable that the Bill should contain provisions about what is to happen if no fault is found-which it does not at the moment. I notice that that is covered in Amendment 12 rather than in Amendments 9, 10 or 11, but I think that the noble Lord, Lord Jenkin, has treated them together. The noble Lord's suggestion in Amendment 12 that it should be a matter for a Member to choose whether the findings remain off the record or are published if he or she wishes it is perfectly reasonable.

Lord Strathclyde: My Lords, I rather agree with my noble friend on Amendment 12-

Lord Jenkin of Roding: My Lords, I have not moved Amendment 12; it is not grouped with Amendment 9. I can talk to it if it would be helpful. I cannot make two speeches; I was going to move it separately.

Lord Strathclyde: My Lords, I apologise to my noble friend. We shall talk to Amendment 12 when we get to it.

Baroness Royall of Blaisdon: My Lords, the conditions referred to in subsections (5)(b) and (7)(c) need not refer only to the conditions for the rectification of the error. They could equally well cover other conditions in relation to the commission of the error; in fact, they are more likely to do so given that a number of conditions in relation to the rectification of the error are already set out in the Bill.

As I stated in the letter mentioned by the noble Lord, the requirement for conditions specified by the IPSA to be met allows the IPSA to set the rules about when the commissioner can decide not to refer a matter. To determine that a case should not even go to the Committee on Standards and Privileges where a fault or problem has been found is a serious matter. The power to set conditions allows consideration of what other controls may be needed on the exercise of that power. Conditions that might be set could include, for example, maxima for the repayments which could be acceptable, or conditions requiring a reference where there is a series of findings relating to the same member. It is in the Government's view essential that the IPSA be able to consider and review the conditions that may need to be met as the code evolves. As we said in Committee, these are not intended to provide extra hoops for MPs to go through, but to attempt to be open about the fairness of the procedures.

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