Second Reading
Parliamentary Standards Bill
3:29 pm

Moved By Baroness Royall of Blaisdon

That the Bill be read a second time.

3:36 pm
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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, the standing of Parliament and of politicians is at its lowest point in the modern history of our country. Parliament and politics face a huge task in seeking to dispel public disgust and public anger with our politics and politicians and instead to replace it with public trust and public confidence. The legislation before this House today is a vital step in that endeavour.

I shall touch, first, on one procedural issue. On 30 June, my noble friend the Chief Whip proposed to the House a timetable for consideration of the Bill with the aim of achieving Royal Assent by the time the House rises for the Summer Recess. The noble Lord, Lord Norton, has since tabled an amendment to the committal Motion, which will be considered after Second Reading. In order to allow the House the opportunity to take a view on the timetable in response to that Motion, last night I withdrew from the Order Paper the Motion I had tabled, which would have allowed the House to take Report and Third Reading on 20 July. If appropriate, I shall retable my Motion at a later date.

Before I begin to address the issues in and around the Bill, I want first to deal with three specific points: this House and what this House has done to tackle its own difficult issues this year; the relationship of the Bill, and its provisions and implications, to this House; and the responsibility that we as Members both of this House and of Parliament more generally have towards this proposed legislation.

First, the Bill deals wholly and solely with the House of Commons. The reason for that is the public's anger—entirely justified, entirely understandable and entirely right—over the expenses scandal in the House of Commons. Most MPs are decent, hard-working men and women who strive for their constituents and do an excellent job. However, all MPs and many of their families have been tarnished by the expenses scandal, and that is why we need to work, and work hard, to put it right. I want to do everything possible to do that.

Although the scandal is primarily a Commons scandal, we in this House have had our own difficulties. We have had to take the serious and significant step of suspending Members of this House for the first time in 400 years. We have been subject to a degree of media scrutiny of our own system of allowances—not on the scale of that undergone by MPs but, none the less, unquestionably difficult enough. As do the Commons, we feel the dark shadow of investigations into Members of this House by the police—no doubt legitimate and necessary investigations but, again, difficult none the less. If this has been an appalling period for the Commons—and it has—then it has been a tough period for this House too. I believe that we can say that we have addressed our own problems ourselves and have tried to do so in good order.

The inquiry, which we established at our own instigation and concluded, into the events which led to the suspensions was thorough, rigorous and scrupulously fair. Arising from that incident, again at our own instigation, we have senior and serious Members of this House considering the issues for the rules and code of conduct of this House. At our own instigation and in the light of media scrutiny of our own allowances, the independent Senior Salaries Review Body is examining the question of financial support for Members of this House.

If there are abuses in this House, this House is rooting them out and, if there are wrongs, this House is righting them. This House is putting this House in order. In line with that, this Bill contains no provisions, no measures and no proposals at all for this House. Nothing in this Bill will affect this House. Nothing in this Bill will impact upon this House. Nothing in this Bill will change what we in this House do and how we in this House do it.

In spite of that, I recognise that there are two issues which we need to address: the constitutional and related issues—issues for the Commons, but for this House too and for Parliament more generally—which a number of Members of this House believe are raised by the Bill, and the future applicability of the Bill, its approach and provisions to this House. I will deal with the constitutional and related issues when I deal later with a range of reports on this Bill by a number of committees of this House and the other place. I need to deal with the future applicability of the Bill to this House.

I know that a number of Members of this House have expressed concern at statements by Ministers about the Government's declared intention that they intended, in due course, to extend the provisions of the Bill to this House. Indeed, I gave some of those statements myself. But we also said that we would listen and consult extensively. We have done so. We have listened. For this House is not the House of Commons; it is a different place, a separate place, a place with its own, different, and separate ways of doing things. It is a place in which self-regulation means something different—genuinely and materially different—from what it means in the Commons. In relation to this Bill, the Government have recognised that from the first.

When the proposals now in this Bill were first advanced, No 10 said in a document from the Prime Minister's Office on 19 May that the Government accepted the difference in self-regulation in this House, and in this Chamber, on 20 May, I repeated a Statement made in the other place by my right honourable friend the Leader of the House of Commons which stated that we,

"recognise that the principle of self-regulation operates differently in the House of Lords".—[Hansard, 20/5/09; col. 1385.]

I understand the concerns of Members of this House about this Bill or its approach being applied to this House and I acknowledge those concerns.

I can say two specific things today. First, this Bill, whose current and only remit is for the House of Commons, will not apply to this House. Secondly, this Bill will not be extended in the future to this House as currently constituted. But, thirdly, just because this Bill does not and will not apply to the House of Lords, it does not mean that this House has nothing to do with this Bill. This House does have business with this Bill because this House has a responsibility to this legislation.

The Commons has passed this legislation. The Commons believes it needs this legislation. That is explicit in the approval that the Commons has given to it. The Commons has amended this legislation to the point where the Commons is satisfied with it and with what the legislation will do to the Commons. This is the Commons' Bill; a Bill of the Commons, by the Commons and for the Commons; and I believe that the Commons should have it.

I am aware of the argument put by some Members of this House, with their own views of what constitutes a strong sense of parliamentary duty, that they see it as an obligation on them to save the Commons from itself. I understand those arguments and I respect those arguments, but I believe that they are misplaced. Although this House has a clear responsibility, it is a responsibility to let the Commons have the Bill that the Commons wants for the Commons.

That is the responsibility of this House in dealing with the Bill. I look for this House to discharge the responsibility that it has before it.

I now turn specifically to the Bill itself. The argument for the Bill, in what it is proposing for the Commons, is clear. The fundamental purpose of the Bill is to replace the self-regulation of expenses, allowances and financial interests with a system of independent, transparent and robust regulation.

Public confidence in the Commons—and, indeed, the whole of Parliament—has been shaken by the expenses crisis. Although the issue has now fallen from the headlines, we are mistaken if any of us believe that this episode has been forgotten or forgiven by the public. We have a duty in this House to help the Commons implement a new system that can restore public confidence in the propriety of MPs and the process that governs their expenses and financial interests.

That restoration of confidence cannot happen soon enough. There is agreement between the leaders of the parties that that is essential. All party leaders in the Commons agreed on the need for an independent authority for the setting, administration and adjudication of allowances. The Commons passed the Bill now before us unopposed at Third Reading. It has benefited from scrutiny and amendment in the Commons. Our aim is to create a system in which the public and Members of the other place can have full confidence. Key to the package of measures that we have brought forward in this Bill has been the guiding principle that we should deliver an independent, transparent and accountable system for handling expenses.

The Bill establishes an Independent Parliamentary Standards Authority and a separate Commissioner for Parliamentary Investigations. The authority will have three very important functions. It will set the system of MPs' allowances independently of Parliament. It will administer the payment of those allowances according to clear rules. It will set and administer the MPs' code of conduct on financial interests. All three of these functions will be taken out of Parliament and made transparent and independent. The commissioner will investigate complaints about breaches of the rules on allowances or financial interests. He or she will be independent and transparent, working outside Parliament.

Let me now deal in more detail with the structure of the Bill. Clause 1 provides for the creation of the Independent Parliamentary Standards Authority, the IPSA, and a separate Commissioner for Parliamentary Investigations. The Independent Parliamentary Standards Authority will have the power to set a system of allowances and expenses for MPs without requiring parliamentary approval.

Schedule 1 to the Bill supplements Clause 1 and makes provision for the membership, administration and funding of the IPSA. The IPSA will be made up of four members and a chair. To ensure that the IPSA is lead by people with the appropriate breadth of skills and experience, the Bill provides that one of the five members must be a person who has held, but no longer holds, high judicial office; one must be qualified to be an auditor for the National Audit Office; and one must have been, but no longer be, a Member of the House of Commons. There is no bar on Members of the House of Lords being members of the authority.

With the exception of the parliamentary member, a person who has been a Member of the House of Commons at any time within the past five years may not be a member of the IPSA. It is important that the IPSA should have some understanding of the way that Parliament works, but it is equally important that we can demonstrate to the public that it is truly independent. The proposed membership will deliver that balance.

Selection to the authority will be on merit and by fair and open competition. A candidate for appointment as the chair or as a member will be selected by a panel, under the aegis of the Speaker of the House of Commons, with the agreement of the Speaker's Committee, which is to be established by the Bill. The appointments will be approved by an Address of the House of Commons and made by Her Majesty. Provisions for the terms of office for the chair and ordinary members of the IPSA are set out in paragraph 4 of Schedule 1 and they will be for a fixed term, which will not exceed five years. Both may be reappointed only once for a further term not exceeding three years. The IPSA, its members and staff will not be regarded as servants of the Crown and its annual report will be laid before each House of Parliament.

The independence of the IPSA is further enhanced by paragraph 5 of Schedule 1, which provides that its members can be dismissed only in response to an Address from both Houses of Parliament. We are there as a safeguard for the independence of the process—a vital role in making clear to the public that the IPSA is not beholden to the other place, that its perceived independence is a real, substantial independence.

Schedules 1 and 2 extend the Freedom of Information Act to cover the IPSA and commissioner respectively. This means, among other things, that both bodies will be obliged to publish a publication scheme, approved by the Information Commissioner, setting out what information they will make available to the public without an FOI request being needed.

I have already referred to the Speaker's Committee for the IPSA, which will be established by the Bill. Schedules 1 and 2 provide that it will approve the selection of candidates for appointment as a member of the IPSA or as the commissioner. In addition to giving the committee certain functions, the Bill sets out the membership of the Speaker's Committee which will comprise: the Speaker of the House of Commons; the Leader of the House of Commons; the chair of the House of Commons' Committee on Standards and Privileges; and five MPs who are not Ministers of the Crown, appointed by the House of Commons.

Clause 2 provides that the IPSA is to take over responsibility for paying the salaries of MPs in accordance with the relevant resolutions of the House. However, it will have no role under this Bill in setting the level of salaries. A new procedure for this has been set recently, with the level of salary increase being recommended by the Senior Salaries Review Body on the basis of a basket of relevant public sector pay settlements. That procedure will continue unchanged.

Clause 3 provides that the IPSA will be responsible for preparing and administering a new MPs' allowances scheme and that this should be reviewed on a regular basis. The measures in the Bill will in no way pre-empt the work currently being undertaken by the Committee for Standards in Public Life to review MPs' allowances. Indeed, the Bill simply lays the framework for a system of independent regulation, and we expect that the IPSA will draw on the outcome of the committee's work when devising an allowances scheme for MPs. Clause 3(7) lays out certain matters that the IPSA may include in the scheme, such as specifying the kinds of expenditure or the limits on the amounts to be paid. The allowances scheme will be laid before the House of Commons and published. However, it is essential to the credibility of the scheme that the other place should not be able to amend it, and therefore the scheme will come into effect without the need for parliamentary approval. There will however be a requirement on the IPSA to consult widely when devising the scheme and Clause 3(4) lists those who the IPSA must consult, including any other person the IPSA considers appropriate.

To ensure that we lay the foundations for a robust and transparent system, Clause 4 provides that the IPSA will also take over responsibility for authorising and making payments under the allowances scheme.

Clause 5 places a duty on the IPSA to prepare an MPs' code of conduct relating to financial interests. The code will be prepared and revised by the IPSA in wide consultation, and must be reviewed regularly by the authority. The Speaker must lay the code before the House of Commons, and no such code can come into force unless approved by a resolution of the other place. The Bill requires that the code of conduct relating to financial interests must prohibit paid advocacy and must require registration of interests. It will not cover declaration of interests, which will remain a matter for internal regulation by the other House.

Clause 6 sets out the investigatory powers for the Commissioner for Parliamentary Investigations. This will allow the commissioner to initiate an investigation where there is reason to believe that an MP may have been paid an allowance to which he or she was not entitled, or may have failed to comply with MPs' code of conduct relating to financial interests. A significant element of these provisions is subsection (6), which requires the IPSA to determine procedures in relation to the handling of investigations, complaints and the publication of reports following investigations. Clearly, Members in another place will want to be assured that any investigations or complaints will be handled according to appropriate standards of fairness. To begin to address these legitimate concerns, Clause 6(8) makes particular requirements on these procedures to exemplify how standards of fairness must be upheld.

An additional safeguard is that the judicial member of the IPSA will have a hand in agreeing the investigation, complaint and publication handling procedures. The IPSA will also need to act in setting these procedures in a way that is compatible with the Human Rights Act. This means that courts will be able to review the exercise of functions of the Independent Parliamentary Standards Authority on the basis of the ordinary principles of administrative and human rights law.

Clause 7 includes a number of sanction powers so that the IPSA may direct those who have received allowances to which they were not entitled to repay them. In addition, the IPSA will be able to direct an MP to amend his or her entries in the register of financial interests. Where appropriate, the IPSA will also be able to recommend to the House of Commons Committee on Standards and Privileges that the House takes disciplinary action against a Member who has broken the rules. It will be up to the committee whether it accepts, rejects or modifies such a recommendation. Such disciplinary action may include withholding a Member's pay, being suspended or even expulsion from the other place.

It is important that we should note that these are powers that the House of Commons already has; the Bill does not confer them on the House. They are mentioned only as an indication of the matters on which the IPSA may recommend, not as an indication of the sanctions the House can impose. Moreover, the Bill does not prevent the House exercising any of its disciplinary powers otherwise than following an investigation by the commissioner or a recommendation by the IPSA. However, we are willing to consider further whether the commissioner should simply make a report on fact and refer rather than recommend this to the Committee on Standards and Privileges.

In addition to the enforcement powers for the ISPA and commissioner, Clause 8 of the Bill creates the following new criminal offences: of providing information that the Member knows is false or misleading in a claim for an allowance, for which the maximum sanction is up to 12 months' custodial sentence or an unlimited fine; failing, without reasonable excuse, to comply with the rules on registration of financial interests, for which the maximum penalty is a fine of up to £5,000, and an offence prohibiting paid advocacy. There are precedents for such offences; I have made available in the Library a chart that shows a range of comparative offences.

Clause 9 provides that the Speaker may agree with the IPSA that it shall take over certain registration functions currently carried out by the Standards Commissioner. It further provides that the Speaker may agree with the Commissioner for Parliamentary Investigations that he or she shall take over other functions of the Standards Commissioner. Any such agreement would take place only after appropriate consultation with the House of Commons Committee on Standards and Privileges; it would be laid before the House of Commons and be subject to approval by resolution of the other place.

We must recognise that, already, there is a wide-ranging scheme on allowances and financial interests in the House of Commons. To manage the transition from the old system of allowances, Clause 11 sets out the powers to make transitional provision which may be exercised by a Minister of the Crown, for example the Leader of the House of Commons. This is to ensure that a valid system of rules relating to allowances and financial interests is in place as soon as possible after the IPSA has been established. I should emphasise, however, that the new rules on offences will apply only in relation to an allowances scheme or financial rules made by the IPSA. Moreover, the IPSA and the commissioner will not be able to exercise its functions under the Bill in relation to any matter arising under the old rules.

Perhaps I might now turn to the thoughtful scrutiny that this Bill has received from several committees. The House of Lords Constitution Committee, the Joint Committee on Human Rights and the House of Commons Justice Committee have all published reports in the last week. First, let me address the reports from the House of Lords Select Committee on the Constitution. Its first report concludes that the committee is unconvinced that the case has been made for fast-tracking this Bill and that the policymaking has been rushed.

This Bill is the result of constructive cross-party discussion, which included representatives from your Lordships' House. Throughout the cross-party talks on this Bill, there has been a broad consensus that we must end the self-regulation of the House of Commons allowances schemes and the registration of financial interests. It is critical that the IPSA should be up and running as soon as possible for MPs currently in the Commons, but it is also crucial that it is established and properly embedded before the forthcoming general election, so that any new MPs elected at that time are not sullied by the problems of this Parliament.

I am grateful to the Constitution Committee for its reports on this Bill. As members of the committee will know from the evidence that I gave to them, we agree on many issues, including expedited legislation. On that point, following a key recommendation of the committee, I undertake to ensure that in this House, any Minister seeking to bring forward fast-track legislation makes an early statement to the House when the legislation is introduced, setting out the case for expedition. On a second key recommendation, I believe that there should be a post-legislative review of the Parliamentary Standards Bill within two years. This would provide Parliament with an opportunity to review the impact and effectiveness of the legislation in the near future. On the committee's second report, published this lunchtime, we will study it and come back in Committee to the issues raised in it.

I would also like to touch upon the key issues raised in the report of the Joint Committee on Human Rights. The report suggested that the Bill may not be compatible with Article 6 of the European Convention on Human Rights. Article 6 sets out a right to a fair and public hearing where there is to be a determination of a civil right or a criminal charge. The committee suggests that more procedural safeguards, such as the opportunity to call and examine witnesses, should be included in the Bill.

The report also concludes that there should be a right of appeal to the Judicial Committee of the Privy Council against determinations of the IPSA and the House of Commons. The Government very much appreciate the work of the Joint Committee but we do not accept that the Bill as currently drafted is incompatible with Article 6. We will set out our reasons fully in due course. I should stress also our belief that nothing in the Bill as it currently stands is incompatible with Article 9 of the Bill of Rights 1689.

The Justice Committee report aired concerns about the infringement of parliamentary privilege. The Government have listened to its concerns about including a statutory requirement for there to continue to be a code of conduct incorporating the Nolan principles and we have removed this from the Bill. On its introduction, the Bill also included provisions that proceedings in Parliament may be admissible in a court in relation to the three new offences in proceedings against a Member. At the behest of the other place, this no longer forms part of the Bill. The removal of these clauses in no way undermines our key objective, which is to establish an independent and transparent system of regulation.

In the light of this, and following further cross-party discussions—

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Lord Lester of Herne Hill (Liberal Democrat)

My Lords, in relation to the work of the Joint Committee on Human Rights, the right honourable Jack Straw, in the Commons, indicated to Mr Dismore, the chair of the committee, that the Government were open minded about introducing fairness procedures. Is it the Government's intention to do that at Committee stage?

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, we will bring forward amendments.

In the light of what I was saying, and following further cross-party discussions, we will be tabling an amendment to the Bill to remove the new offence on paid advocacy. We agree that this issue requires further consideration and we intend to return to it in the next legislative Session.

In conclusion, the Bill, which is wholly and solely for the Commons, is necessary. It is an essential Bill; a Bill which the Commons wants; a Bill which the Commons needs; and a Bill which will bring about the changes in the Commons that the public of this country want to see. It is a Bill that does not apply to this House; a Bill which will not apply to this House. Nevertheless, it is a Bill towards which this House, as the second Chamber of our Parliament, has a clear responsibility. It is a Commons Bill and it is a Bill which this House must ensure that the Commons has. I commend the Bill to the House.

4:03 pm
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Lord MacGregor of Pulham Market (Conservative)

My Lords, as the first speaker from these Benches, I make it clear that I am speaking as a Back-Bencher and expressing my own views; I am not speaking on behalf of my Front Bench. My past interests in this area have been as Leader of the House of Commons, chairman of the Standards and Privileges Committee some 20 years ago, although much has changed since, and more recently as a Member of the Committee on Standards in Public Life, the committee that produced the report on the House of Lords.

I wish to make four general points today. The first is this: there is no question but that there have been, it would appear, some serious abuses of the Commons allowances system, although it is easy to get an exaggerated view on how many—but more on that later. It clearly needs to be attended to and I have no objection in principle to an independent body being responsible for it. However, that does not mean that we should give this Bill, which is the Prime Minister's answer to the abuses, swift approval. There are some serious and fundamental flaws in it, which anyone reading the paper by the Clerk of the House of Commons to the House of Commons Justice Committee, our own Constitution Committee report and the Joint Committee on Human Rights report would see in abundance. In particular, the first two are devastating in their criticisms. At Second Reading in the other place, Alan Duncan referred to the Clerk's paper. He said that it had two central concerns, which were,

"first, that swathes of the Bill are or would have been justiciable and would set Parliament"—

"Parliament", not only the House of Commons—

"on a direct collision course with the courts; and, secondly, that this could undermine the basic principles of free speech in this House".—[Hansard, Commons, 29/6/09; col. 66.]

Those are devastating criticisms.

My first point therefore is that the handling of this matter is little short of disgraceful. It bears all the hallmarks of a knee-jerk response by a beleaguered Prime Minister in a bunker making legislation on the hoof in response to newspaper headlines and announcing his quick thought for the day on YouTube. It flies in the face of all the Government's own rules for public consultation—I stress public consultation, as distinct from secret cross-party talks—and adequate time for scrutiny of legislation. It raises serious constitutional issues as a result of the thoughtless haste with which the Government did the drafting. We see evidence of that in the continuing response by the Government in making changes and even promising some—if I heard it right—in the next Parliament. In all my time in Parliament, I have never seen such a critical report by a clerk in the House of Commons. I say to the Leader that my criticism does not include her role. I have great sympathy for her and I am grateful for the assurances that she fought for and gave today.

Admittedly, in the House of Commons, Clause 6 was withdrawn and Clause 10 was defeated, albeit by a majority of three. These clauses were highly objectionable on constitutional grounds but, as the report of the Constitution Committee makes clear, much still needs to be done on what are now Clauses 6, 7 and 8. I leave it to my noble friend Lord Goodlad to talk about his Constitution Committee report, but I quote one sentence from it:

"This is no way in which to legislate on matters which raise complex constitutional and legal issues".

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The Earl of Onslow (Conservative)

My Lords, the noble Lord is very critical of the Government, with which I agree 100,000 per cent, if my mathematics is not a bit ropey, but the same criticism applies to our own Front Bench for allowing this through on the nod. We should not have done that. We should have stopped it in the Commons and said no.

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Lord MacGregor of Pulham Market (Conservative)

My Lords, I do not want to talk about what happened in the other place, except to say that several of my honourable and right honourable friends, including the shadow Leader of the House, tried hard to get changes and succeeded in getting some.

We in this House are left to pick up and sort out the pieces. I believe that, contrary to the implication that the Leader gave, there are many in the other place who expect us to do just that. Indeed, some have said that to me. This raises the question of timing, about which my noble friend Lord Norton has tabled an amendment to the Motion—I wait to hear what he has to say. If we do not go down that route, there are other ways of giving this House more time, such as extra days or postponing other business to the spillover. Whatever it is, we must find some way or other of ensuring that we give this Bill enough time for the proper scrutiny to take place. That includes the question of a sunset clause for further considered thoughts in the next Parliament. We have to bear in mind that the other House passed this legislation in three days with no Third Reading.

My second point relates to the fact that, although this Bill relates only to the House of Commons, there are, as all three reports to which I referred confirm, major constitutional implications in the Bill relating to the Bill of Rights, parliamentary supremacy, the relations between Parliament and the courts, judicial review and human rights. I leave it to others in this debate more qualified than I am to talk on these issues.

In passing, I observe on human rights that one of the most disgraceful aspects of this whole episode has been the way in which what is effectively a kangaroo court of three people, with no proper right of hearing or appeal, has been allowed to cause one or two Members of the other place to retire from Parliament because they were not able to stand again. I refer in particular to the case of Ian Gibson, the former Member for Norwich North. I come from that area. Although I disagree profoundly with him on many political issues, I thought that the way in which he was treated was utterly disgraceful and should not have been allowed. I know that that feeling is widely shared in the whole community and in all parties in Norfolk. In my judgment, there will have to be much debate and significant amendments on all these counts before this Bill is allowed to pass.

Again, as Alan Duncan said at Second Reading,

"if we get it wrong it could have a devastating effect on our democratic process and our procedures, which could seriously disadvantage the interests of voters".—[Hansard, Commons, 29/6/09; col. 58.]

So this Bill is not just about internal matters of the House of Commons; there are much wider parliamentary issues at stake. Since the House of Commons gave such little time to it, it behoves us to give much more.

My third point relates to outside interests. There is a curious paradox in that there is much complaint nowadays that too many MPs have never had experience outside the narrow channels of going from university to politics, being a research assistant, then a special adviser, then a Member of the House and then, just possibly, a Minister. Now measures are being introduced to curtail and hugely discourage outside interests. Shortly after I left the Cabinet, I had to give what was almost the first piece of evidence in the first session of the Committee on Standards in Public Life. I made a plea to it, and delivered a paper, on the importance of allowing Members of Parliament to continue with outside interests to enable them to bring the proper experience and judgment to the House of Commons. I am glad to say that that committee, which was under pressure to recommend against outside interests, strongly agreed with me.

I know that having outside interests hugely helped me in my parliamentary career and I do not believe that it is to the detriment of what MPs do in their role as Members of Parliament or in their constituency. It means a heavy workload, but it brings huge advantages to the House. Let us not forget that Ministers, who have an even bigger role than many of those with outside interests, also have their constituency and parliamentary interests as well. So there is one law for Ministers and another for everyone else.

This Bill—and even the petty timekeeping that will now be required to have an outside interest—will mean a continuation of the trend of stopping outside interests, which will mean the demeaning of Parliament and reinforce the very trend that so many criticise of a House dominated by people with no outside experience. In my view, it is not necessary to include outside interests in the Bill, as the Standards and Privileges Committee in the House of Commons has been doing a good job in the area of the register, the code of conduct and breaches. I am not aware of criticism of the committee, whose chairman I pay tribute to—he has done a terrific job—along with the parliamentary committee itself. The committee should have been left to deal with all of that.

I come to a point that takes me outside the Bill but that worries me most. I know that what I am about to say will be unpopular in some quarters, but I believe that it needs saying. Of course, there have been serious abuses that need to be tackled but, in the media witch-hunt that is taking place, the fact that most MPs are highly honourable is being overlooked. They have to have second homes if they are to undertake their constituency activities and have time even to see their families. They are immensely hard-working and commit themselves to public service, their constituents and the great issues of the nation, often at some considerable financial sacrifice. I do not think that most people realise, unless they have been in it, how time-consuming the whole business is. The commitment is enormous.

The unpalatable fact—and perhaps I will be unpopular for saying it, but it needs saying—is that one reason why allowances have got out of kilter and sometimes been misused is that salaries have gone way out of line for the kind of people whom we should be trying to attract to Parliament. Of course, there will always be people who will stand for Parliament, but it is people of talent and experience whom we need to attract. After all, it is the greatest institution in the nation. Ministers are drawn primarily from it and in their roles in all sorts of ways they have much greater responsibility and impact on people, the nation's affairs and internationally than do those in many other roles outside Parliament.

When I left the Cabinet and rejoined some companies, I simply had not realised the extent to which salaries had fallen behind in the House of Commons, compared with the kind of salaries—and pensions—that I saw offered even in middle-ranking positions in not very big companies. The whole thing has got completely out of kilter. Indeed, many people in public sector jobs in local authorities are paid greatly more than Members of Parliament, who are supposed to have the responsibility over them. Most people know that there are recently qualified lawyers in their mid-20s, with perhaps only one or two years' experience, who are earning as much as Members of Parliament and who expect to go on earning hugely more. That also applies to other professions.

Being a Member of Parliament should be one of the most important and worthwhile careers, but I am concerned about everything that is now happening to many good and worthy MPs and the unfair vilification of them, on top of outdated salaries. I realise that in the current crunch this is not the moment to raise salaries, but that issue has to be addressed in the future. My concern is that, unless we put these things right, it will be very difficult to attract the sort of talents that we want in the House and to stand for Parliament, which would be a tragedy.

4:15 pm
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Lord Shutt of Greetland (Liberal Democrat)

My Lords, I thank the noble Baroness for introducing the Bill. The need for it is self-evident in the harm that has been done to the body politic in the past two or three months. I am mindful, as many noble Lords will be, of the agreement involved. Not only the Prime Minister, but the three party leaders in the Commons, believe it is important for a Bill of this nature to be brought here. I agree that we have to be flexible with the timetable. If more days are required for Committee stage—it will depend on the number of amendments tabled—further time will have to be provided.

This is a short Bill and it seems to be getting shorter in terms of what is before us. It has been an interesting experience for me as one who has been invited for what one might call informal pre-legislative scrutiny with the Lord Chancellor, the right honourable Jack Straw MP, representatives of all the parties in the Commons, including the nationalist parties and the Northern Ireland parties, and Cross-Benchers from this House. There have been at least five meetings, and the Bill changed in many ways before it became the one now published. The Bill is to create this thing called IPSA to create and run an expenses regime and pay salaries, to investigate alleged wrongdoing and deal with the consequences. My noble friends Lord Goodhart and Lord Lester of Herne Hill will have more to say on such matters.

We have also been informed that the Bill does not affect this House, and the noble Baroness reiterated that point. One way of making that clear would be to re-name the authority the IHOCSA or the Independent House of Commons Standards Authority. The aim is to get MPs out of fixing salaries and expenses; yet Parliament is supreme. However if, through this regime, expenses became too much or were perceived as too little, I doubt that IPSA would last that long.

I also want to mention the relationship between the various bodies that are looking at these matters. The Bill creates IPSA for the moment, which will look at the expenses regime and then pay those expenses, but we have Sir Christopher Kelly's report to come, and then there is the SSRB. I am far from clear about the inter-relationships there. It could be, as the noble Lord, Lord MacGregor, indicated, that there is a greater relationship between these matters; particularly the salaries issue where, in certain circumstances, expenses seem to have been embraced as an addition to salary. Perhaps that should be put to one side and these things looked at in the round, and not separately.

Reference has already been made to a sunset clause. There is no doubt about it: all those meetings have taken place; nevertheless, this is being done in a rush. Is it right? If there is a sunset clause and this Bill lasts a couple of years, it would be a good thing, particularly with post-legislative scrutiny. There are details in the Bill that need looking at. I am amazed that the Bill suggests that five people should become the IPSA and that those five can resolve themselves into a committee of—I assume—fewer than five. The committee can then resolve itself into a sub-committee, of fewer than fewer than five. It is strange that they cannot co-opt someone to serve on a sub-committee of a committee, when doing so may assist them on some element of benefit in kind, or something that they have no expertise in.

At the Second Reading of a Bill, there comes a point at this stage where people say, "Well, I very much welcome this Bill and perhaps we can improve it in Committee", or, "This is a Bill that I want to oppose at every turn". I think this Bill may well need very much amendment, but it is one of those Bills that I feel we will just have to put up with.

4:22 pm
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Lord Woolf (Crossbench)

My Lords, the Bill has always been of modest physical dimensions but, as a result of the amendments made in its passage through the Commons, it became even smaller. I am pleased that further concessions have been made today by the noble Baroness, Lady Royall; this means that its size is to be yet further reduced. However, despite this, the Bill still raises issues of significant constitutional importance. Accordingly, while its contents may be primarily of concern to the other place, I would suggest that this House would be wrong to abdicate its responsibility to revise its contents, particularly in relation to constitutional matters.

In so far as this has been possible in the time available, the Select Committee on the Constitution has given careful consideration to the Bill in its present form. Its views have been made known to the House by its chairman, the noble Lord, Lord Goodlad. I agree with the views of the committee and will try to avoid trespassing on what the noble Lord, Lord Goodlad, will say about the views of the committee.

There are issues that I would like to address, which are by no means exhaustive. First, the Bill is premature. Secondly, I raise the question of whether we need a new criminal offence that can be committed only by Members of the House of Commons, when there is already a perfectly good existing criminal offence which would be applicable and which gives greater powers of punishment than those in the Bill. Thirdly, is there a danger that the Bill will undermine the delicate relationship between Parliament and the courts? This has been carefully established by the courts in relation to not interfering with proceedings in Parliament.

I have not the benefit of the great experience of the noble Lord, Lord MacGregor of Pulham Market, whose speech I endorse, but in addressing these issues I take into account my experience as chairman for a short time of the sub-committee on interests of Members of this House, the cases bearing on the relationship between Parliament and the courts that came before me when I sat as a judge, and the deliberations of the Select Committee on the Constitution.

On the prematurity of the Bill, as I understand it a primary purpose of the Bill is to ensure that Members of the other place adopt the appropriate standards in making claims for the repayment of allowances. However, those standards have not yet been determined and are still under consideration. We still await the report of Sir Christopher Kelly. If you are still seeking to devise the appropriate standard, is it not unwise to introduce new methods of enforcing an as yet unidentified standard? Surely the method of enforcement should be tailored to meet the standard, not the other way round. The Bill curtails what the standard can be before it has been introduced and accepted by Parliament in that it assumes that it will be allowances based.

Let me illustrate what I mean. A great many of the problems that have arisen over expenses are due to a lack of clarity about what can properly be claimed. It is my understanding that if clarity had been introduced into what Members in the other place were entitled to, many of the situations which have resulted in criticism would not have arisen. If that clarity could now be achieved, much of what is proposed in the Bill could be unnecessary.

To take an extreme example, if it was decided that instead of being an unquantified amount a set sum was payable irrespective of what had been expended, the problem, at least in relation to that allowance, would largely disappear. How much better it would be to wait until full consultation has taken place and then legislate than to take the present course, which involves determining the remedy before the true dimension of what is required is known.

As regards the new criminal offence, it is always possible for dishonest persons to make claims to receive that to which they are not entitled. This can happen in many circumstances and criminal offences can be committed by all sections of society. This is certainly not a temptation confined to Members of the other place. The criminal law therefore makes full provision to ensure that those who commit offences of this nature can be convicted and duly punished. What is the purpose of creating this new offence, which I believe does not add to the existing law, by providing that a Member, who for the purposes of the allowances scheme,

"provides information ... that the member knows to be false or misleading in a material respect"?

This is well trodden ground. The presence of the new offence will only create confusion and allow the unjustified point to be made that Members of the other place are being treated with undue preference; for example, because the punishment is less than those available against the ordinary citizen.

On the courts and Parliament, recent constitutional changes have undermined certain of the constitutional safeguards which have benefited our society for generations. This Bill creates a danger of undermining at least one of those safeguards, which is that the courts should avoid pronouncing on matters affecting the internal affairs of either House of Parliament. So far, by the exercise of appropriate sensitivity the courts have avoided conflict with Parliament. This has proved to be a constitutional safeguard. It is difficult to conceive of any more damaging way of disturbing the delicate relationship between Parliament and the courts than the courts taking upon themselves a supervisory role in relation to the manner in which Members are to be compensated for expenses incurred in the performance of their parliamentary duties.

The Bill introduces methods of investigating, policing and adjudicating upon the activities of Members of the other place by IPSA and the commissioner, which could well come before the courts if the Bill remains in its present form. The adjudications by IPSA, which the Bill involves, will have very serious consequences for the reputation of those Members—albeit that they would not involve penalties of the sort imposed by the criminal courts. The Members who are proceeded against can reasonably expect to have the same rights as would be available to those who appear before ordinary disciplinary tribunals. The new bodies that are being created—the commissioner and IPSA—have many characteristics of a tribunal which is subject to judicial review.

I note, however, what was said by the noble Baroness, Lady Royall, about no recommendations being made; I appreciate that that could improve the position. Despite that, this is still a very delicate situation. The fact that, at such a late stage, it was thought right to make that change indicates the danger to which I am referring.

There is, therefore, a real risk that the system being introduced by the Bill will inadvertently make the activities of those bodies subject to review by the courts. The courts in this way will be drawn into adjudicating upon what has been happening in Parliament. Generally this is undesirable, but it is particularly undesirable because, in those proceedings, questions of parliamentary privilege could well arise. The danger of this happening should be avoided, unless there is no alternative. However, Clause 6(3) provides that, for the purposes of investigation, a Member of the other place must—and I emphasise the word "must"—provide the commissioner with any information he reasonably requires. I suggest that could be a recipe for conflict which could end in the courts. One way that the danger could be reduced—

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Lord Lea of Crondall (Labour)

My Lords, I am grateful to the noble and learned Lord for giving way. Surely, the consideration of the courts being involved with Parliament will arise in ordinary criminal proceedings against a Member. Can the noble and learned Lord explain why that does not also raise an issue about courts adjudicating upon Members? How can that be preferable?

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Lord Woolf (Crossbench)

My Lords, fortunately, the position of criminal proceedings against a person who is a Member of Parliament is subject to the ordinary principles; in that situation parliamentary privilege would arise. Parliament could not be landed in a position where the courts were undermining the privilege of free speech, which is so important, in the Houses of Parliament. However, once you put a specific statutory obligation upon a Member of Parliament, as this Bill does, to provide information without limitation as to what information can reasonably be sought, that surely creates a different situation. It is that different situation to which I was seeking to draw attention.

I was going to refer to the fact that perhaps an alternative way of dealing with the matter would be by giving an express right of appeal to the Member, instead of the Member relying upon judicial review. I note what has been said about the possibility of an appeal to the Privy Council—an appeal which is now to be dealt with by our new Supreme Court. I am bound to ask: is that the right place for an appeal on a matter of this nature to go, bearing in mind that it is thought that the criminal offence would go before a magistrates' court? You would get a ruling on evidence by the Privy Council in relation to proceedings which could take place in the magistrates' court. The Supreme Court will have jurisdiction over the whole of the United Kingdom—to that extent it is different from any other court—but the Crown Court and magistrates' court, at least in England and Wales, would seem more appropriate destinations for an appeal. However, for different reasons, each would be inappropriate destinations for matters with which the Bill is concerned.

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Lord Lester of Herne Hill (Liberal Democrat)

My Lords, it is a rare privilege to question a senior judge, and I will do so as modestly and as quickly as I can. Does he agree that there is no objection to there being an internal independent appeal mechanism set up instead of the Privy Council, or that the Privy Council—as it deals with appeals against members of the professions—could do precisely the same if it were a disciplinary matter? In other words, there could be either an external body, which has the disadvantages that the noble and learned Lord indicated, or an independent and impartial tribunal set up within the House of Commons, presided over by a senior judge, that could deal with the matter in the way that the noble and learned Lord has indicated.

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Lord Woolf (Crossbench)

My Lords, these are matters that no doubt should be considered. It is the need to consider matters of that sort, to which I will not—if the noble Lord will forgive me—give a response immediately, that indicates why the course that has been taken in relation to this Bill was perhaps not the one that was needed. These are dangers which need very careful examination. After careful deliberation, a system needs to be made which stands the test of time.

I suggest that that there is a dilemma there. We could hardly take away from Members of Parliament the rights of access to the courts to which other members of the community are entitled. The dilemma will remain. Surely this is a situation on which there should be further reflection.

4:38 pm
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Lord Goodlad (Conservative)

My Lords, the Leader of the House referred to the three reports of your Lordships' Select Committee on the Constitution on this matter: the 17th report of this Session, published on 6 July; the 18th report, entitled Parliamentary Standards Bill: Implications for Parliament and the Courts; and a further report entitled Fast-track Legislation: Constitutional Implications and Safeguards, which followed the taking of evidence in public. I respectfully associate myself with everything said by the noble and learned Lord, Lord Woolf, who is a member of the committee; by the noble Lord, Lord Shutt; and by my noble friend Lord MacGregor.

Your Lordships' committee deplored the decision to seek to suspend normal parliamentary proceedings in consideration of the Bill, especially since the Bill seeks, by establishing a statutory external regulator for Parliament, to break the constitutional convention that Parliament regulates its own affairs. Your Lordships' committee expressed doubt about whether a Bill expedited through the legislative process without proper scrutiny or public consultation would enhance public confidence in Parliament or the reverse. Our conclusion was that it would have the reverse effect.

Your Lordships' committee's first report on the Bill focused on process and haste. The second report considered the proposals for the creation of an independent parliamentary standards association. We were surprised that there was no mention in the Bill of the party political affiliation, if any, of the members or chairman of that association.

Your Lordships' committee considered the question of members appealing against decisions by the proposed association and parliamentary commissioner. As a matter of constitutional principle, the decisions of a public authority should, in our view, be subject to the possibility of an appeal to a different body. We found it troubling that the Bill is apparently proceeding without the necessary policy work and consultation on appeals being conducted—and perhaps being seen to be conducted.

As the noble and learned Lord, Lord Woolf, said, your Lordships' committees do not support the creation of new offences applicable to a small number of people whose potential misconduct is already punishable under existing law. As the noble and learned Lord said, the maximum sentence under the Fraud Act for unlawful expense claims by MPs is 10 years' imprisonment. Under the provisions of the present Bill, it is one year.

Your Lordships' committee examined the possibility of prosecution of Members of Parliament for paid advocacy statements made in Parliament. Under the current provisions of the Bill, they would be inadmissible as evidence in court. Nor is it clear whether prosecutions could be made under Scottish law. We shall examine with great care what has been said by the Leader of the House.

Since the expression "parliamentary privilege" was coined, the word "privilege" has, over the years, acquired an understandably pejorative aspect. The Bill before us goes to the heart of the role of Parliament, for which we in this House, our predecessors and those in the other place have made many sacrifices over the centuries.

I have touched briefly on a fraction of the considerations rehearsed in the three Select Committee reports currently before your Lordships' House. I hope that the Government will not seek to rush legislation through this place that would diminish public regard for Parliament rather than enhance it.

4:43 pm
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Lord Howe of Aberavon (Conservative)

My Lords, I, like my noble friend Lord MacGregor, must acknowledge that for a short time—just one year compared with his two—I was Leader of the House of Commons and chairman of the Privileges Committee, as we then called it without blushing. I agree absolutely with all that has been said both by my noble friend Lord MacGregor and by the noble Lord, Lord Goodlad.

We are faced with a serious situation, which has prompted—although not in a very sensible way—the preparation of serious measures in response to it. However, it is important to put them in perspective. I fear that, in the 20 years that have passed since I was Leader of the House of Commons, the morale of parliamentarians, Members of the other place, has declined steadily. We need to consider the impact of what is now being proposed on the long-term prospects for that.

My recollection of the atmosphere in those days, when we had only just invented our first parliamentary standards commissioner and the Privileges Committee had greater freedom and greater self-confidence, is that the committee and its members were confident that if such a crisis had arisen, they would have been able to handle it. I had as my colleagues parliamentarians as diverse and emphatic as the late Lord Biffen and the by no means late Tony Benn. It was a traditional, confident body. I am anxious that what follows from this will try to restore that confidence as well as the standards.

We have, in a way, been here already. I had forgotten until the other day that the noble Lord, Lord Neill of Bladen, had himself been charged, in April 2000, with making proposals for standards of conduct in this House. I wrote then a document for his consideration and this is what I said:

"My central proposition is that the tide of oversight and regulation of Members of Parliament should now be seen as having already reached its high water mark. In the Commons indeed it has already become unduly intrusive and should now begin to recede".

I drew to his attention a quotation that I have overworked frequently. It is from Lord Moulton, the distinguished liberal Law Lord, in 1912:

"There are three great domains of human conduct. The first is where our actions are limited or forbidden by law. Then there is the domain of free personal choice. But between these two is a third domain, that in which there is neither law nor unfettered freedom. This is the domain of 'obedience to the unenforceable', where people do right although there is no one and nothing to make them do right but themselves".

That was then a proposition understood. It has been a proposition on which many of our self-disciplines have been based. Indeed, it was the foundation of the determination of this House to be self-regulating without the need for external pressure. It is a perfectly respectable standard. That is why I was distressed when the Prime Minister, I think, began repudiating the notion of behaving on our own devices like a gentlemen's club. In fact the whole essence of self-regulation, if it is properly to work, is mutual respect in that way, and that is a way to which we should wish to return, if we can.

I am not challenging the need now for tighter measures of the kind that we are discussing today. I am really saying that we need to try to get the balance right and restore the morale and self-confidence of Members of the other place, as we would here. I agree with those who have said that there has been a decline—one must put it as crudely as this—in the self-confidence of Members of the other place, alongside an enhancement in the narrow professionalisation of their political role. The other place now lacks the presence of people with wider experience in almost every occupation of which I can think. Nowhere is it more obvious and more critical than in the field of the law officers of the Crown. We have at the moment an Attorney-General in this House who is immensely competent and well qualified for the post. But in the days when I became Solicitor-General, and that is now some 30 years ago, I was one of probably half a dozen people competing for the job. At that time the House of Commons had a mass of people, not just in the law but in other professions, who were there with those qualifications, giving a spread of confidence and competence to the House.

That has changed, and the prospect of entering Parliament at the present time is not very encouraging. We need to have a Parliament that is able once again to spread its confidence and its talent. That is why I feel that we must not only be careful in the adjustment and measurement of the measures that are necessarily now being taken but also ask ourselves whether there are not other ways in which Parliament has abdicated from areas where it once used to be responsible and behaving effectively in areas of need.

The first example is the fact that we have now had in the Commons a sequence of four parliamentary commissioners for standards, all people of great integrity and all coming from a background wholly different from the one in which they have had to exercise their powers. One wonders whether we cannot get away from that contraction of the self-regulatory capacity of the House of Commons.

Another example is the extent to which the Electoral Commission has taken over many functions that used to be determined by Speaker's Conferences. The first chairman of the Electoral Commission was a man for whom I had the greatest admiration as the director of the BBC World Service. However, his background and training, and that of his colleagues, were not the most appropriate to handle an area that had been taken away from the House of Commons. Speaker's Conferences are not all that ancient—the first was held in 1916—but they became more frequent after World War II, being held in 1944, 1965, 1973 and 1977. Parliament—the House of Lords was also represented on Speaker's Conferences—then played a part effectively and with respect, but we have now sub-contracted that role to an organisation which, frankly, lands a whole range of ill considered propositions in front of us. Therefore, over the past decade or so the electoral system has gone through turmoil so fast that even I can hardly understand the ballot paper.

Those are my two points: Parliament should set about reclaiming functions that it used to do well and we have to get the balance right, although we have to be very careful to ensure that we have a sufficiently tight means of preventing any further misbehaviour of the kind that has caused this problem. Just as my noble friend Lord MacGregor drew attention to the current under-financial reward for Members of the House of Commons, so we also have to ensure that the House itself is rewarding and welcoming, so that it can once again attract real people and not just narrowly qualified professional politicians to perform a job of huge importance. It is our function not only, as some people have said, to protect the House of Commons from itself but also to enable the House to regain some of the self-confidence that it used to enjoy—I sound like a very old man indeed—in the days when we were there.

4:52 pm
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Lord Peston (Labour)

My Lords, I address your Lordships today with reluctance. Despite the great range of expertise on the subject before us, we found on the Labour Benches that none of my noble friends, except my noble friend Lord Barnett, felt able to take part in this debate. Therefore, both I and my noble friend felt that we had no choice—we had to take part.

I begin by thanking my noble friend the Leader of the House for her introduction to this debate and for her obvious desire to be conciliatory. As an example, I had thought that the Prime Minister had said in terms that the principles of the Bill would be applied to reform of the House of Lords when that took place. That, I must admit, frightened the life out of me, but I understand from my noble friend that that was based on a complete misinterpretation and that, when we come to reform, we are not going to be told, "You accepted this for the Commons Bill; therefore, you have to accept it for the Lords Bill". I hope that, when she replies to the debate, my noble friend will reassure me that I did not misunderstand what she said and that we will not be confronted with that argument. If we are, my view is that we ought to throw this Bill out rather than amend it.

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Lord Jenkin of Roding (Conservative)

My Lords, I do not want to comment on what the noble Baroness the Leader of the House said, but it is right to remind the House that the Justice Secretary, as recently as 29 June, said absolutely specifically that,

"it is envisaged that in due course the arrangements relating to the Independent Parliamentary Standards Authority should indeed apply to the other place; that is why we sought to create an authority that covers both Houses".—[Hansard, Commons, 29/6/09; col. 47.]

The noble Baroness is shaking her head. I hope that at some stage she will firmly disown that statement.

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Lord Peston (Labour)

My Lords, I thought she had. She will have an opportunity, as she gets a second chance to speak which is not available to the rest of us.

Given what has been going on in the other place, albeit by a minority of Members, as the noble Lord, Lord MacGregor, has pointed out, the Government need to act and to introduce appropriate legislation as quickly as possible. I, for one, certainly support the Government in that. However, beyond that, if there had been deals in the other place between the Government and the Opposition so that the Bill passed there with a minimum of debate, that is their business. Of course, it becomes our business when it affects how we deal with the Bill.

There is a paradox. Recently your Lordships' Constitution Committee published a report on the fast-tracking of legislation, to which the Leader of your Lordships' House and the Deputy Leader of the other place gave excellent evidence. The paradox is that what they said then does not remotely match up to what is being done now and is in conflict with the Constitution Committee's report on that subject. What is being proposed makes it impossible for your Lordships' Constitution Committee to do the job assigned to it by your Lordships when the committee was set up. One can quote various paragraphs from the report but my favourite is the absolutely stark statement in paragraph 9:

"The way policy making has been rushed, the lack of public consultation and the limited opportunities given to Parliament to scrutinise the Bill all, in our view, fail to meet the minimum requirements of constitutional acceptability".

Nothing could be plainer than that and nothing can guide us more clearly to what is our duty.

One would have thought that the Leader of the House would immediately have accepted the view of a major committee like the Constitution Committee, which has expressed its view in such a forthright way. We would have expected the usual channels—I emphasise "the usual channels"—to have assisted us but there has been complete silence from the usual channels, as far as I understand it, in accepting the peculiar set of accelerated arrangements that have come forward. Why are not the usual channels defending the way in which this House behaves? Your Lordships' Constitution Committee published a second report this afternoon and I commend it to your Lordships because it contains very good detailed examples of precisely the areas in which the detailed scrutiny must take place—I use the word "must", not "might". The Constitution Committee and your Lordships' House must be allowed to do the job of scrutiny properly.

It is clear to me that we would do it in a way which makes it absolutely certain that the legislation will be passed. We do not seek to destroy the legislation but it seems to me—this is where I disagree with my noble friend the Leader of the House—that October is soon enough to get this Bill on the statute book. It would be better than "soon enough" as we would end up with a much better piece of legislation.

My second worry is that the gossip around your Lordships' House is that the deal or the stitch-up—a better expression—between the main parties, or rather between the leaders of the main parties, is that the Opposition have been instructed to nod through the Bill. I have heard that from at least one very senior member of the Opposition Front Bench. That means that with all the time in the world the Opposition leadership would devote none of its efforts to scrutiny at all.

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

My Lords, I am most grateful to the noble Lord for giving way. I can assure him that the Opposition have not been nobbled in the way that he suggests.

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Lord Peston (Labour)

My Lords, that cheers me up enormously; I must say that I think it cheers up the people sitting behind the noble Lord even more. I am always willing to believe that I have been misled. I was going to add that the fact that essentially the Opposition were saying that they not going to get involved in scrutiny was unusual, to say the least.

I now have to add one or two quite disrespectful remarks to noble Lords opposite. The most cursory reading of any of the major works on politics and government in this country tells us that the Conservative Party is the custodian of the traditions, notably the constitutional traditions, of our country. For better or worse, the Bill removes 300 years of self-regulation in the other place. You would have thought that the Conservative leadership in the other place would therefore have absolutely nothing to do with a Bill of this kind. You would have thought that if the Liberal leadership—sorry, they are now called the Liberal Democrats, but they used to be Liberals—had any sense of history, they would also not involve themselves in this. I can tell you one person who does not want to be involved at all: that is me.

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

My Lords, once again, the noble Lord is very kind in giving way. The fundamental difficulty about the Bill is that it tries to do two separate things, one of which is wholly laudable and that is to deal with the immediate problem of expenses and how they are dealt with. The other is the quite separate question of financial interests; an extremely complicated matter involving the privileges of Parliament and the relationship between Parliament and the courts, which deserves long and careful consideration before we come to any legislative decisions, if those decisions are indeed necessary. The difficulty we face is that both those issues have been bundled into one document. The first needs urgent consideration; the second needs long reflection.

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Lord Peston (Labour)

My Lords, I am getting tired. I should like to finish my speech and sit down. Of course I agree with the noble Lord, but that means that we must give the Bill full scrutiny in this House and take as long as is required. All the problems can be solved by a simple statement from my noble friend the Leader of the House. All she has to do is to say that there will be no accelerated timetable, and then the Government will have their legislation in October. That is all she has to do. In fact, we could probably end today's debate if she were to get up to say that right away. If the media, which have convinced themselves that they are the real Government in this country, complain, she can then say to them that it is not Her Majesty's Government's fault, it is those old fogies in the House of Lords who they should blame.

5:03 pm
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Lord Higgins (Conservative)

My Lords, we are told by the Government that the Bill is designed to restore public confidence in Parliament in the aftermath of the expenses scandal. It is certainly highly desirable that that objective should be achieved, but the reality is that the way in which the Bill is being pushed through and the drafting of the Bill will themselves bring Parliament further into disrepute. That is the nub of the situation.

The noble Baroness the Leader of the House says that this is a Bill that Parliament—or, rather, the House of Commons—wants and that the House of Commons ought to have it. I think that that is seriously open to doubt. I do not think that the House of Commons or, indeed, this House wants a Bill that has the most horrendous constitutional implications and undermines some of the basic building blocks on which Parliament operates. That is not the kind of Bill that either the Commons or this House wants or deserves. I find it extraordinary that the Bill in its original form should have appeared as it did. I cannot imagine what the people drafting it were thinking about.

Apparently, what is now envisaged is that we must rush the Bill through so that it is on the statute book before the Summer Recess. Members of Parliament are going to rush back to their constituents waving the Act, as it will then be, almost like Chamberlain returning from Munich, saying, "Fear not! All our troubles are over. You can have faith in Parliament. I am now going to be very carefully regulated by IPSA"—they may ask what that is—"and don't worry about it. All is well". Then, if the MP is honest, he will go on to say, "But I feel bound to point out that the cost of getting this to you now, rather than in the autumn, is that serious aspects of the Bill of Rights, which have protected your interests for years, have been eroded and parliamentary privilege has been under attack in order to get this Act to you quickly". The constituent may well turn round and ask whether parliamentary privilege is something that the MP wants to keep, but the MP may say, "It's your privilege. It's people's privilege, not Parliament's privilege. It enables me to stand up in the House of Commons and say things without fear of being taken to court by someone I am rightly attacking on your behalf". It does not seem to me to be sensible to want to create that situation so that Members of Parliament can get to their constituencies with the Act in a few weeks' time, rather than in the autumn, by which time we could deal with some of these immensely difficult problems.

I shall make one more quick point. The Leader of the House referred to a cross-party consensus. We all know that there is no cross-party consensus. What has been reached between closed doors is an agreement between the leaders of the parties, perhaps motivated to some extent by political expedience in the present circumstances. It is not a cross-party consensus and I hope very much that, in the course of the debates, abbreviated though they may be, unless we accept the amendment tabled by my noble friend Lord Norton, we can deal with the matter more appropriately. I believe that there is an underlying, deep, cross-party consensus against the Bill as now drafted and that we need to have the opportunity to amend it.

Having said that, I agree with what the noble Baroness said in her opening remarks about the independent, self-governing aspects of both Houses. We recognise that she is very good at defending the interests of this House and is doing a splendid job in that respect. However, we must recognise that the independence of each House operates both ways. If it were just a question of qualifications, an enormous number of Peers in this House have great experience of the House of Commons and how it works, whereas, alas, very few people at the other end—although one or two of them now appear at the Bar since we have had Secretaries of State in this House—have any idea of what goes on here. That was certainly true when I was in the Commons. So, in terms of qualifications, it is more appropriate to say what we think ought to happen in that House than for them to say what happens in this House. There is no doubt that we win hands down. None the less, I think that the noble Baroness is right to preserve the view that we are independent in that sense.

We have been immensely well served by the committees of the House and, indeed, the Justice Committee in the other place. We have had a succession of extraordinary reports produced at very short notice that ought to form the basis on which we go forward. In particular, the committee chaired by my noble friend Lord Goodlad has produced extraordinary reports in a short space of time. For example, the committee's 17th report points out that the Bill has already been somewhat changed by the Government agreeing to remove one clause and by the defeat on the other very important constitutional clause. It is important to point out that so little time was allowed in the House of Commons for debate on this issue that the implications of the defeat and the consequential amendments were not able to be debated there. They will have to be debated in this House.

Photo of Lord Higgins

Lord Higgins (Conservative)

My Lords, with great respect to my noble friend, I want to be as brief as possible.

It is important that we recognise that the situation is somewhat better than it was, but there is still an immense amount to be done. The latest report of the Select Committee—and, indeed, the extremely helpful memorandum by the Clerk of the Parliaments, which I am glad has been provided—points out that there are still many issues of great constitutional importance that we need to deal with. I hope that we will be given adequate time and that the amendment proposed by my noble friend Lord Norton will be accepted, because we can then proceed on a sensible basis. If that is not so, it is important that the Government should clean up the highly objectionable clauses that the various committee reports point to, preferably with government amendments or, certainly, with acceptance of other appropriate amendments, so that we can get a Bill that is not wholly objectionable and does not completely defeat the object that it seeks to achieve.

In that context, I refer to the point that was made—perhaps rather unfairly—in the Constitutional Committee's report. It says that the noble Baroness, Lady Royall of Blaisdon, talking,

"24 hours before the removal of the proceedings in Parliament clause",

said:

"The package ... is a coherent whole, and no part of it would work without the rest".

We have lost at least one major bit since then, so we are entitled to ask the noble Baroness where we stand after that. The committee goes on:

"The bill will accordingly have to be substantially recast. To do so under an accelerated passage is in our view wholly unacceptable given the questions of constitutional principle and detail that it raises".

That is a strong statement, but I hope that the noble Baroness can, in winding up, tell us how she proposes to recast the Bill if, indeed, we do not have time to sort it out. None the less, I very much hope that, when we come to a decision on the matter tonight, it will be to allow adequate time, so that Members of the House of Commons can go back to their constituencies saying, "You may be reassured by this Bill, which has been properly considered by Parliament, with a great deal of assistance from the Members of the House of Lords. This is something with which we can now restore faith in Parliament as a whole".

5:12 pm
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Lord Lester of Herne Hill (Liberal Democrat)

My Lords, it is a particular pleasure to follow the noble Lord, Lord Higgins, because 43 years ago he defeated me when I appeared in the Labour interest in a general election in Worthing—so decisively that it was not necessary to count the votes, one simply weighed them. I agree with the last part of what the noble Lord said, if not the whole. I should declare an interest: I was counsel in the case of Pepper v Hart, dealing with parliamentary privilege, and next week I am in a case where one Secretary of State is trying to use parliamentary privilege to prevent proceedings of this House from being seen by the courts.

The way in which the Government have rushed to introduce and propel this hastily cobbled Bill is not how the Executive should use their law-making powers. However, in considering the Bill, we should remember, as the Leader of the House emphasised, that its aim is to deal with the House of Commons, not the House of Lords. We should not filibuster or thwart but seek to improve the Bill as far as we can. I also agree with my noble kinsman, the noble and learned Lord, Lord Woolf, who said that the House must not abdicate its responsibilities but scrutinise and improve the Bill. It is vital for us to work together, across and beyond parties, to increase public confidence in Parliament and politicians and in the fact that in both Houses most of us are, I hope, dedicated to public service.

One of the problems that the Bill creates is its impact on the fundamental constitutional principle that statements made in Parliament should be protected by absolute privilege. As has been said, parliamentary privilege is not some fusty, archaic doctrine, and "privilege" is a misnomer. Article IX of the Bill of Rights 1688 serves the dual interests of free speech in Parliament and the separation of powers between Parliament and the courts. It is designed not to protect individual MPs but Parliament itself, although for party-political reasons a squalid exception was made in Section 13 of the Defamation Act 1996, enabling MPs to pick and choose, on the basis of personal self-interest, whether to waive parliamentary privilege or to invoke it as claimant or defendant in libel proceedings. That was, as Lord Simon of Glaisdale pointed out, a constitutional monstrosity, which continues to deface the statute book.

Article IX of the Bill of Rights can be taken too far. As I say, I declare an interest as counsel in Pepper v Hart, when I appeared against the then Attorney-General, the noble and learned Lord, Lord Lyell, as he will recall, where an attempt was made by him on behalf of the Commons to prevent the courts from referring to what Ministers had said in Parliament when courts interpret ambiguous legislation. It was claimed that the Commons would strongly object if courts were to use Hansard as an extrinsic aid to statutory interpretation. Other common law countries, including Australia, New Zealand, India and the United States, had done so without any violation of their constitutional protection of speech and debate in their parliaments. The Law Lords rejected this inordinate claim and there has not been any subsequent objection from the other place.

More recently, it has even been suggested from Commons advisers that the practice of referring in court to reports of Select Committees, such as the Joint Committee on Human Rights, of which I am a member, in legal proceedings violates the Bill of Rights because it involves the risk that the courts may question proceedings in Parliament. That, too, is an inordinate claim, which would place the courts in blinkers. I am sure that my noble kinsman, the noble and learned Lord, Lord Woolf, would agree, as he has said so in the past as a judge. The courts know when and how to keep off Parliament's lawns while exercising their vital duty of interpreting the law of the land. There have been important cases where neither the Executive nor the citizen could have had a fair hearing without the benefit of the proceedings of Select Committees when deciding issues of legal public policy and where the courts would have been denied crucial evidence.

In the present case, the Clerk of the Commons has explained his perception of the problems of the privilege aspects of the Bill. He is surely right to remind Parliament of the need for a parliamentary privileges Act to implement the recommendations of the Joint Committee on Parliamentary Privilege in 1999, but there is no appetite for one in the Government. I respectfully do not agree with the Commons Clerk's opposition to what he describes as,

"tinkering with parliamentary privilege on a piecemeal basis".

If that view were taken literally, it would inhibit or even prevent necessary reforms. His concerns about encroachments on parliamentary privilege are real but they go too far. He takes a similarly negative position on the draft bribery Bill, arguing that privilege prevents any use of anything said in Parliament, even to prove that a Member committed the offence of corruption. His memorandum argues in paragraph 19 that admitting evidence of proceedings in Parliament effectively removes the right of free speech.

We should look for enlightenment across the Atlantic. Article I, Section 6, of the American Constitution provides, like our own Article IX, that any speech or debate in either House of Congress,

"shall not be questioned in any other place".

This so-called speech and debate clause protects legislators from punitive executive or judicial action and reinforces separation of powers. In the 1970s, the American Supreme Court considered several cases aimed at preventing claims of privilege from going too far. To take one example, which was referred to the Constitution Committee, in a case called the United States v Brewster a former Senator had been indicted for taking a bribe to influence the performance of his official legislative duties. He sought protection under the speech and debate clause to declare the indictment invalid. In upholding the indictment, the Supreme Court ruled:

"Taking a bribe is obviously no part of the legislative process or function".

The clause was read as prohibiting an inquiry into the motivation for performing specific legislative actions. That surely is the common-sense and balanced approach that will be taken by our own courts. I therefore respectfully disagree with the somewhat overprotective approach taken by the Clerk of the Commons. It is important to keep Article IX of the Bill of Rights within proper balance and limits, as our courts and other courts of the Commonwealth and the United States have done in recent times.

The human rights problems are at least as important as those about parliamentary privilege. They were examined by the Joint Committee on Parliamentary Privilege in its report 10 years ago. It is lamentable that the Government have failed to give effect to its recommendations, including the repeal of Section 13. The committee was chaired by the noble and learned Lord, Lord Nicholls of Birkenhead. Its members included the noble and learned Lords, Lord Mayhew and Lord Archer, the noble Lord, Lord Waddington, Lord Wigoder, my learned friend Paul Tyler MP, as he then was, and Ann Taylor MP, as she then was—not a bad committee.

The committee pointed out in paragraph 280 the importance of ensuring that the procedures followed in the investigation of complaints against MPs should match what it called "contemporary standards of fairness". It set those out in paragraph 281. Those recommendations were endorsed by the Committee on Standards in Public Life in 1992. The Joint Committee on Human Rights then reaffirmed them and the chair of the Joint Committee on Human Rights, Andrew Dismore MP, speaking in the other place on 29 June at cols. 82-7 of the Official Report, made an extremely strong speech in which he explained them fully. Later in the process, the Justice Secretary, the right honourable Jack Straw, indicated, as I mentioned, that he was open-minded about introducing some fairness guarantees.

We do not know what advice the Attorney-General has given. That perhaps illustrates the need for Parliament to have its own legal adviser. Perhaps the much delayed constitutional renewal Bill will have to be amended to deal with that. In any event, Ministers must have the committee's recommendations drawn to their attention as well as its references to Article 6 of the convention and the judgment of the Strasbourg court in the case Demicoli v Malta. As the Select Committee on Parliamentary Privilege observed 10 years ago:

"The existence of this jurisdiction"—

at Strasbourg—

"is a salutary reminder that if the procedures adopted by Parliament when exercising its disciplinary powers are not fair, the proceedings may be challenged by those prejudiced. It is in the interests of Parliament, as well as justice, that Parliament should adopt at least the minimum requirements of fairness".

That applies as much to the functions of IPSA and IPSA's commissioner as to parliamentary committees. They should have an overriding duty to be manifestly seen to be fair and to ensure fairness in their procedures.

There also needs to be a right of appeal, whether through the Judicial Committee of the Privy Council against any determination by IPSA or by the Commons that amounts to the determination of a criminal charge, or a Member's civil rights and obligations, or through some other body. Having listened to the noble and learned Lord, Lord Woolf, I think that the better path might be to include within the Bill at Committee stage something familiar to those who deal with disciplinary offences against lawyers, doctors or accountants, where a special independent and impartial tribunal is set up under the statute that is able to look at the substance of complaints and allegations, and not merely by way of judicial review. I am not drafting, but if one were to say, "For the purposes of this Act, there is to be a tribunal known as the Parliamentary Standards Tribunal, to have the functions conferred on it by this Act", and, "Members of the House of Commons should have a right of appeal to that tribunal against any determination by IPSA or the House of Commons amounting to the determination of a criminal charge or a Member's civil rights and obligations, within the meaning of Article 6 of the convention", that would wholly meet the obligations of the United Kingdom that bind Parliament as well as the courts and the Executive. It would avoid the conflict that everyone is rightly worried about between the Queen's courts on the one hand and Parliament on the other under the doctrine of parliamentary privilege.

I respectfully suggest, therefore, that consideration might urgently be given to creating the kind of tribunal that the Prime Minister, as Chancellor, created in the Financial Services and Markets Act 2000 when he set up the Financial Services and Markets Tribunal dealing with disciplinary matters in exactly the way that I have suggested. Those interested in matters north of the border, as I am, will recall that, when recently the Scottish Parliament was dealing with how to discipline naughty solicitors, all these issues were raised and the Scottish Parliament decided to create an independent and impartial special tribunal to deal with disciplinary matters in that way.

I shall not now bore the House by commenting on the Explanatory Notes dealing with legal advice about the European convention. However, I should like to point out one rather comical matter. If, in our sad lives, we study the Explanatory Notes in the Commons and the Lords, we find an interesting difference between the two. The Commons version is extremely tentative and walks on eggshells, whereas the Lords version has been firmed up by reference to a French case involving the Conseil d'État. I do not believe in this case that second thoughts were better than first; I have no doubt that the convention would apply.

Finally, the Constitution Committee pointed clearly in paragraph 35 of its most recent report—from lunchtime—to the need to create a domestic appellate body that is sufficiently independent and impartial to satisfy the requirements of the convention. If that were done, I would feel much more confident in supporting the Bill.

5:26 pm
Photo of Lord Mayhew of Twysden

Lord Mayhew of Twysden (Conservative)

My Lords, like the noble Lord, Lord Peston, I begin my contribution to this debate by thanking the Leader of the House for the sensitive way in which she introduced the Bill this afternoon, and I admired the delicacy of her footwork. However, among the very sound doctrine about the need and duty of this House to revise legislation coming to it from the House of Commons, there was also a delicate warning off from any notion that we might be looking at an extension of the time that the Government desire the Bill to take. If I remember correctly, the noble Baroness said that this was about the House of Commons only and for the House of Commons, and that it would not be extended to this House. She was taken up on that by the noble Lord, Lord Peston, and the noble Lord, Lord Jenkin.

I add one further reference, taken from the first report on this matter from your Lordships' Select Committee on the Constitution. Paragraph 4 says:

"A document deposited in the House of Commons Library by the Government on 20 May 2009, referring to the proposed Independent Parliamentary Standards Authority, states that it is clearly appropriate that this new body also takes responsibility for these issues in the Lords".

It is only fair to go on to say that the document adds:

"We recognise that the principle of self-regulation operates differently in the House of Lords. It is clear that extensive work and consultation will be necessary in order to ensure the agreement of the House to the effective transfer of responsibilities to the new body".

Like my noble friend and the noble Lord, Lord Peston, I look forward keenly to the noble Baroness's response to the questions that she was asked in that regard. The very brief life of this Bill rather starkly illustrates the wisdom of the old parliamentary adage, "Don't go legislating in haste, or you will repent at leisure". A gloss on that might be added, "Especially in July". The remarkable Clause 6, providing for a statutory code of conduct for MPs, has already had to be withdrawn. In fact, the Lord Chancellor was driven to repent before he had finished his Second Reading speech, by withdrawing that clause. He did so in the face of some savage condemnation for what might be called its unconsidered constitutional dismemberment, with warning criticism, already referred to, from the Clerk of the House of Commons. The Lord Chancellor then suffered the mortification of Clause 10—the no less objectionable parliamentary proceedings clause—being defeated without any debate, the Lord Chancellor's own guillotine having descended on himself. I tried to think of some allusion about petards, but failed.

Now, today, it was announced at the end of the Leader of the House's speech that part of Clause 5 relating to paid advocacy is also to be withdrawn. It is a shrinking Bill, but one that I none the less suggest to your Lordships still needs the extra time—that should more appropriately be called the ordinary time—that would be secured by the amendment to be moved later by my noble friend Lord Norton.

One could take a certain grim pleasure in all this if it were not for the fact that the Bill itself is so deeply alarming. So much has been said about that that I shall try not to repeat it. Your Lordships' Select Committee has done full justice to it in a report the like of which, for the severity of its unanimous criticism, I have never seen. Of the two clauses concerned, the report states at paragraph 2:

"Both of these clauses threatened to undermine freedoms which are essential for Parliament to operate properly and risked opening the door to conflict between Parliament and the courts".

Like several noble Lords who have spoken today, I think that it is a real pity that the word "privilege", attaching as it does to constitutional safeguards, has acquired a rather foreseeable pejorative flavour. In truth, the privilege is that of the public who are ensured that their representatives in Parliament speak without fear of unpleasant consequences, whether at the hands of the Executive or the judges. The trouble with the Bill even as amended in the other place is that it still—I quote again from the Select Committee's report at paragraph 7—establishes,

"a statutory external regulator of important parliamentary matters, acting within a statutory regime and potentially subject to the jurisdiction of the courts".

The committee describes that development as,

"a profound change which has the potential to give rise to conflict between Parliament and the courts, the implications of which require very careful examination".

Those last three words bear perhaps even more weight than what precedes them, and even that is putting the matter a little laconically.

Immense benefits for individual freedom and the rule of law have flowed over the centuries from the settlement in the Bill of Rights and the separate jurisdictions of Parliament and the courts. We had an enormously interesting and authoritative speech from the noble and learned Lord, Lord Woolf, on the importance of that being maintained. I am quite certain that the judges do not wish to see it disturbed. I reckon that they are mightily relieved that under our domestic constitutional arrangements, Members of Parliament answer only to their electorates in respect of parliamentary matters, not to the judges. As for the Commons, in my 23 years there, I never detected any desire to offer any sort of welcome for what was liable to be described as interference from the judges.

Since it is the extraordinary fact that these proposals certainly have not received the very careful examination called for by the Select Committee, or anything approaching it, and since the Government intend that they shall not receive it here, one is driven to ask why. I am afraid the answer is that Ministers have simply lost their heads. I have sympathy for them and for all MPs in their present travails, but it cannot be sensible to behave like this, without even a sunset clause, in order that,

"something may be seen by the public to be being done about the system for regulating MPs' expenses".

That is the end of the quotation from the Leader of the House's explanation to the Select Committee. I repeat that it is said to be simply in order that,

"something may be seen by the public to be being done about the system for regulating MPs' expenses".

It cannot be sensible either, I suggest, on constitutional grounds. Nor can it on more immediate practical grounds, for when its true import is understood, it is likely to diminish public confidence even further.

My right honourable friend Mr David Heathcoat-Amory said at Second Reading in the other place:

"The Government have an emergency, but the constitution does not".—[Hansard, Commons, 30/6/09; col. 195.]

That, I suggest, should be the operative perspective. What is needed from this House, therefore, is surely some cool, calm deliberation.

Photo of Lord Lester of Herne Hill

Lord Lester of Herne Hill (Liberal Democrat)

My Lords, listening to the noble and learned Lord, I wonder whether he still agrees with the Joint Committee on Parliamentary Privilege, of which he was a member, which pointed out that the Strasbourg court would have jurisdiction if the procedures in the other place do not operate fairly. Does that not give rise to a practical problem, which has to be solved; that is, to ensure fairness by some tribunal that will prevent the Strasbourg court having to intervene? That is what the Joint Committee was saying.

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Lord Mayhew of Twysden (Conservative)

My Lords, I am grateful to the noble Lord. That is one of the many complex matters that deserves far fuller discussion and decision than is possible for somebody standing on his feet, either when making a speech or having it interrupted. I was suggesting, perhaps presumptuously, that some cool, calm deliberation is needed. Very notably, that is what was called for in the other place by the very senior and experienced Labour Member Mr Denis MacShane. He said—reluctantly, as a long-standing socialist and no friend of the House of Lords as it is presently constituted—that he hoped that the Lords,

"takes time and considers the matter carefully".

He went on:

"I speak simply out of deep concern that we are legislating in haste and without clarity, and creating an incredibly powerful office that can interfere substantially with what Members of Parliament do". —[Hansard, Commons, 30/6/09; col. 211.]

The reflections of these two Members of Parliament, from opposing sides of their House, sum up why I shall tonight support the amendment to be moved by my noble friend Lord Norton of Louth.

5:37 pm
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Lord Armstrong of Ilminster (Crossbench)

My Lords, the evil that the Bill is intended to address needs to be remedied, and one can understand the Government's anxiety to be seen to be seeking to remedy it with dispatch and urgency. I add my own tribute to the way in which the noble Baroness the Leader of the House presented the Bill this afternoon, but I wish to differ from her in one respect. She was, I think, trying to argue that the Bill has gone through all its stages in another place and that, as it applies only to that other place, it is for Members there to decide how the evil should be remedied. As we have heard very clearly this afternoon, the rights and privileges of Parliament are put at hazard in the Bill. That affects your Lordships as well as the other place.

The Government are much attached to constitutional reform. This measure is constitutional reform with a vengeance. It might almost be called "constitutional regression". We should think long and hard before passing with unseemly and unnecessary haste a measure that puts at hazard parliamentary rights and privileges, which have been, as was pointed out, so long and hard fought for, and which lie at the heart of our democratic freedom. As Feste says to Malvolio:

"That is not the way".

It would not be beyond the wit of man to devise a remedy for the evil that this Bill seeks to deal with which would avoid this hazard. The Bill provides for a new independent authority, IPSA, to determine and pay the salaries and allowances of Members of Parliament and to propose and police a code of conduct relating to their financial interests. It is true that the new authority's recommendations and proposals are to be subject to the approval of the House of Commons, but that is no more than a right of veto. A right of veto may look good in principle but can well be very difficult to act on and to exercise in practice. The power of proposal and decision should remain with Parliament.

It may be argued that the public anger and distrust of Members of Parliament is so great that the abdication of authority by the House of Commons proposed in this Bill is a necessary part of the remedy if a measure of trust is to be restored. However, as has been said this afternoon, it would be a very high price to pay. Members of Parliament have received a no doubt very salutary shock from the recent exposures of the uses and abuses of the system of allowances and expenses. As the Leader of the House has said, the great majority of them are decent and hardworking people and they will be as keen as anybody else to restore trust. I believe that most of them would not just accept but would positively welcome a framework under which they themselves would be responsible for setting up, approving and abiding by a new system for regulating their allowances and expenses and a new code of conduct relating to their financial interests.

The system will need to provide clarity, scrutiny, transparency and sanctions. It will need to provide the least possible degree of ambiguity and the greatest possible degree of clarity in the structure of rules and entitlements; scrutiny of claims by independent scrutineers paid for but not employed by Parliament; transparency so that claims by and payments to Members can be made known to the public; and sanctions for abusive claims and breaches of the code of conduct.

This system could be administered and supervised by a new House of Commons commission or committee of senior Members of Parliament, none of them from the Front Benches, chosen by the Members of the House of Commons as people of unquestionable and widely respected integrity and trustworthiness. I will not try to name any such people although I am sure they exist: I have no desire to risk damaging their reputations by doing so. This committee would in a sense resemble the audit committee in a public company. It would consist of people who had no executive ministerial or shadow ministerial responsibilities and would be immune from the baneful and baleful influence of the Whips.

This committee, acting on the authority of and reporting to the whole House of Commons, would be responsible for framing the code of conduct and the arrangements for allowances and expenses. It would receive reports from those scrutinising claims and payments where rulings by the scrutineers were challenged by the Members concerned, and would make recommendations to the House when it was thought necessary to apply sanctions to individual Members. Such a committee or commission—I suppose that it might be called a Speaker's conference—could also have responsibility for determining and proposing the salaries of Members of the House of Commons, though I entirely see that they might feel the need, and should be able if they wished, to employ the services of a review body or some such body to assist them in that work. Such a system would not infringe the rights and privileges of Parliament. Members of the House of Commons would remain masters in their own house.

By themselves creating and voluntarily accepting such a system, Members would express their determination to restore, maintain and deserve a reputation for trustworthiness, and do so more effectively and convincingly than they would by grudgingly and reluctantly falling in with a system of external discipline imposed on them. It might even be possible to introduce and establish such a system without legislation.

Given the criticisms of the Government's Bill by the Select Committee on the Constitution, and by many others in the House this afternoon, and given that, as the noble and learned Lord, Lord Mayhew, pointed out, legislation passed in haste usually comes quickly to be repented at leisure, we should do well to allow a pause for reflection and reconsideration. The Government should desist from seeking to push their Bill through before the Summer Recess and allow time for other, less unsatisfactory remedies for the admitted deficiencies of the existing arrangements to be worked out and considered. I am sure that, in any but the shortest perspective, the Government will gain greater public credit from taking time to get it right than they will get from trying to force through a measure that is so widely thought to be dangerous and defective.

5:45 pm
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Lord Jenkin of Roding (Conservative)

My Lords, the noble Lord, Lord Armstrong, addresses the House with all the wisdom and moderation appropriate for a former Cabinet Secretary. If I do not follow him in that regard, perhaps I may be forgiven. I am grateful to the Leader of the House for inviting me yesterday to have a word with her about my views on the Bill—it was her invitation. What I am going to say to the House, I said very firmly to her.

This Bill is one of the most deeply disturbing Bills that I have seen in my 45 years in Parliament. In this, I believe, I am reflecting the views of a great many Members—not only noble Lords in this House but also Members in another place, of all parties. Indeed, on Monday I was approached by a couple of government supporters in another place who expressed to me the hope that this House would simply throw it out. I said to them that it might be rather difficult for us to do that.

I entirely understand and recognise the immense pressures that have been put on Members of another place by the hot public anger over the expenses scandal. I must share part of the blame for that. I was a member of a Cabinet which had a recommendation for an increase in the salaries of Members of Parliament; we came to the conclusion that it would be politically easier to increase their expenses, rather than their salaries. With hindsight, it is impossible not to see in this the seeds of the present expenses scandal which has done so much damage not only to the integrity of the system but to the whole political system itself.

I would like to pick up a point made by my noble and learned friend Lord Howe. I am even more concerned by the traumatic loss of confidence in themselves on the part of many Members of another place as a consequence of the disclosures and what they have suffered as a result of the public reaction.

Of course I recognise that all the parties share the objective of restoring public trust in our parliamentary institutions; indeed if our democracy is to survive that is absolutely crucial. We have had in the past a proud tradition of representative self-government. This must continue. But I cannot believe that this Bill, and the new code of conduct that it seeks to enshrine, is the right way to do this. Like others, I am reinforced in this view by the devastating series of reports that have come before us from committees in both Houses in recent days. We are immensely grateful for the work that those committees have done to enable us to take account of their deliberations. They have been referred to already and I do not need to do that again.

What I should refer to, and I read it all, is the evidence given to the Justice Committee in another place by the Clerk in another place, Dr Malcolm Jack, about the effect of the Bill on Article IX of the Bill of Rights, on free speech and on everything on which our free democracy depends. It was rightly said by some wise man that the freedom of speech of Members of Parliament is at the heart of the freedom of speech of everyone else. It is, indeed, at the heart of our constitution.

These are formidable issues which have been raised in these reports, and they need to be debated in full. I am simply repeating what has been said by others, and I hope that the Leader of the House has taken note of them. I note what she said about not moving the Motion regarding the Report and Third Reading, but we do not know what she will put in its place. It would be extremely helpful if she could tell the House this evening what she is now proposing.

Others will be much better equipped than I am to advance the legal and constitutional arguments, but I should like to make just one major point. Not for the first time, the Prime Minister has wholly failed to understand the impact of how his proposals actually look to the people at whom they are aimed. What this Bill seems really to represent, and will be read by many as representing, is that all Members of another place are a bunch of immoral, self-seeking villains on whom a swingeing panoply of new controls, new rules and new penalties must be imposed if they are to regain the trust of the public. What does this actually say to the public? Surely it says that their perceptions, honed by the media, are right: that MPs are a bunch of self-seeking—and so on—villains who need to be brought to heel. The impact of this Bill is not making people say, "Well, that's sorted then; now they will all behave properly". That is not what they are saying at all. They are saying that their perceptions are simply being reinforced and that the costs of doing this, in terms of the constitutional vandalism it involves, have to be accepted as a necessary evil to achieve that end.

What is the impact of the Bill on Members of another place? My noble and learned friend Lord Howe made this point very clearly. Again the Prime Minister has it wrong. Instead of concentrating on restoring the powers of the House of Commons and the health of its procedures—as has already been said, Clause 10 was removed without a single word of debate because the guillotine had fallen—and on Parliament's critical role in holding the Executive to account and scrutinising legislation, free from any threats of repercussions in the courts and elsewhere, this Bill simply reinforces Members' loss of self-confidence, because the Government have not said any of that. MPs are being told that only the threat of the courts interfering in proceedings in Parliament, and the threat of new punishments after summary justice, will keep them in their place. Is anyone surprised that a number of able, long-serving and distinguished Members of another place have decided to call it a day and retire at the next election?

When part of the new panoply of measures is what I can only describe as the vindictive new rule about disclosing not only interests but how much money is earned from them, and how many hours are spent on earning that money—when you see all that—can you blame the Member of Parliament who spoke to me the other day, and who is giving up, when he said that he really was not willing to live in a goldfish bowl?

That is why I regard the Bill as almost wholly misconceived. Why does it impose new criminal penalties when the existing law already covers theft and fraud? Why does it open the door to the courts concerning themselves with proceedings in Parliament—something that they have never had to do before? Why does it provide for enforcement procedures that may infringe the European Convention on Human Rights? Why should we rush through all this legislation and major constitutional changes? As the noble Lord, Lord Barnett, has asked twice at Question Time, what is the hurry?

Our job is to rescue another place from itself. The House of Commons is, above all, a citizens' Parliament, representative of all the interests and varied communities that make up our nation. We do not want to end up with a Parliament consisting only of full-time politicians with no outside interests, cowed by what the Clerk at the other end called the "chilling effect" of finding themselves accountable not to their constituents but to the courts. That will be the effect of the Bill unless it is amended drastically.

5:56 pm
Photo of Lord Roberts of Conwy

Lord Roberts of Conwy (Conservative)

My Lords, most of us agree that the Bill has all the hallmarks of a government quick fix for the sorry situation in which the Commons has found itself in recent weeks. There has been no consultation to speak of on the Bill's provisions, and a never-ending stream of complaints about the lack of it. One obvious consequence was the deletion of two objectionable clauses in the course of the hasty two-day Committee proceedings in the other place.

The Bill presented to your Lordships for Second Reading is therefore different in important respects from that presented to the Commons, and will be subject to further government amendment in the course of proceedings here, as we learnt earlier in the debate. Nevertheless, the basic principles of the original Bill remain. Furthermore, as we have heard, we are expected to complete our detailed consideration of the Bill before we rise for the Summer Recess on 21 July. This is fast-tracking in Formula 1 style, crashing through barriers galore.

Why all the hurry, when all who have studied the Bill are urging care and caution? This is a constitutional Bill touching on fundamental principles, as our Constitution Committee—headed by my noble friend Lord Goodlad—and others have pointed out in their excellent reports. The Government have told us that they hope to have the independent parliamentary standards authority in place early next year. Presumably the commissioner for parliamentary investigations would follow soon after. The rest of the parliamentary rescue operation would also be executed as envisaged by the Government, for the benefit and gratification of an angry electorate who will brook no delay, according to the Leader of the House. All necessary reforms under the Bill should be done and dusted before the next election. That is the scenario that we are asked to accept.

I will quote a constitutional expert, Mr Barry Winetrobe, who wrote a memorandum to the Justice Committee of the other place, which is now printed in its seventh report. He wrote that,

"the usual longer-term result of these Executive-driven reactive responses is the further weakening of Parliament, in relation to the Executive, to the detriment of the public".

I fully endorse that summary view.

A governmental package such as this Bill is little short of an insult to my concept of Parliament. It will certainly not enhance the reputation of the other place and may very well further detract from it, as a number of your Lordships have suggested. Reading between the lines, one suspects that the ultimate effect of these provisions will be to subject Parliament still further to the Government's will, as has happened time and again. The creation of offences unique to membership of the House of Commons under Clause 8 is particularly galling, especially when related to the fact that some of these offences already exist for other citizens under other statutes. Do we really need offences specific to MPs? I was very glad to hear the noble Baroness the Leader of the House saying that one of these offences would be withdrawn in the course of proceedings here, and, of course, we have the full assessment of the noble and learned Lord, Lord Woolf, on this issue.

Of course, the Commons should never have got themselves into this dangerous position where their nominal or—should I say?—quasi self-regulation of pay and allowances could be so extensively abused. This provoked the extreme chagrin and disgust of the electorate when it was revealed to them first by the Daily Telegraph and then in the odious, redacted version obtained under the Freedom of Information Act. Yet, when we seek the causa et origo of this extremely perilous position, I find it very difficult to exonerate the Government from some blame for negligence. They have dominated the Commons for the last decade, not only through their party majority, their leadership of the House and the precedence given to their business at every sitting, but institutionally, behind the scenes. The wishes of the Government are supreme and their influence irresistible in this context. They create the ethos in which Parliament operates and may be held culpable if a corrupt and mendacious ethos prevails.

On a personal note, I was a Member of the Commons for 27 years and stood down in 1997. Towards the end of the Major Government the atmosphere in the Commons on our side was uncomfortable to say the least, besieged as we were by the gutter press, but the discomfort nowadays permeates all parties. Some remedial action should have been taken long before this, preferably by the House itself. The current situation should certainly have been foreseen.

Ultimately, we must ask ourselves whether something can be made of this Bill. It has some fundamental defects. In my mind, it is clear that we must not further compromise the independence of the House of Commons and belittle it as an institution. Its privileges, particularly freedom of speech, must be safeguarded. There must be no further encroachment by the Crown which has long since moved from royal palaces to No. 10. We must also buttress the self-regulatory aspects of each House of Parliament in the near certain knowledge that what is imposed on the other place today will be imposed upon us tomorrow. I hear indeed what the noble Baroness the Leader of the House said to us earlier, but again, like my noble friend who has just spoken, I refer her to what was said by the Justice Secretary. All I want to emphasise to her and to the House is that the Justice Secretary actually referred to the Prime Minister, so it is not just he alone who holds the view. Let me quote:

"As my right hon. Friend the Prime Minister made clear on 10 June, it is envisaged that in due course the arrangements relating to the Independent Parliamentary Standards Authority should indeed apply to the other place; that is why we sought to create an authority that covers both Houses".—[Hansard, Commons, 29/6/09, col. 47.]

Photo of Baroness Royall of Blaisdon

Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, I think it might be useful at this juncture for me to respond very briefly to the noble Lord and other noble Lords, and to repeat what I said in my earlier statement. Yes, the Justice Secretary did make that statement on 29 June. Yes, he was quoting from my right honourable friend the Prime Minister and, as I said earlier, I myself have said in this House that I thought at some stage it would be appropriate for this Bill to pertain to the House of Lords. I now speak with the full authority of government. This Bill does not and will not apply to the House of Lords. I categorically state that fact and I am very happy to do so. Why am I happy to do so? Because it demonstrates that I have fully reported the very strong, very proper and very cogent views of this House to the Government and the Government have listened to me.

Photo of Lord Roberts of Conwy

Lord Roberts of Conwy (Conservative)

My Lords, we are all delighted to hear the noble Baroness's statement and are extremely grateful to her for making it so clearly.

The issue of timing has arisen in the course of this debate and my view is that ideally there should be time to properly review the relationships between Parliament, Government and the public to establish key principles and build upon them. It is also my view that this Bill is not a suitable vehicle for that purpose, but of course we shall see in the course of amending it.

6:07 pm
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Lord Barnett (Labour)

My Lords, I had intended to start my brief remarks by saying that I would not oppose the Bill on Second Reading. Listening to some of the quite brilliant speeches we have heard today from the former Lord Chief Justice and many others, I must say that I have my doubts but I am sure my noble friend for whom I have the greatest respect will support it. I am extremely concerned that a major constitutional Bill of this kind should be rushed through in the timescale that is suggested without being properly considered. Indeed, whether a Bill of this kind is even necessary is becoming clearer and clearer the more we hear from distinguished Members of your Lordships' House.

A couple of times in the House the other day, I asked our Chief Whip what the hurry was. The reply that I got, which was rather brief, if not to say slightly rude, was that it was self-evident. But listening to this debate there is nothing self-evident about rushing this Bill. Some of us on this side of the House have received an e-mail from my noble friend. I can quote it because e-mails, as we all know, are quoted quite frequently around the world. This one is very interesting because of this criticism of the Front Bench. My noble friend assured us that,

"the consensus remains with the Lib Dems and the Tory Front Bench".

That was also rightly stated by the noble Earl when he referred to all Front-Benchers. I have said it before in this House that all Front-Benchers do not usually speak for the Back-Benchers in this House. On these kinds of issues, and on Lords reform, they certainly do not.

My noble friend went on to say that,

"the report by the Constitutional Committee was excoriating".

I know that my noble friend Lord Peston looked up that word in the dictionary but I assure noble Lords that, whatever it said there, if anything it understated the extent of the condemnation of this haste by the Constitution Committee. The committee's report was brilliant and explained matters fully. I shall not go into it again because it has been referred to frequently and has probably already been read by most of the speakers in the debate today.

The main case put by my noble friend for the haste in relation to this Bill is that the public want it. The mass of the great British public have many concerns but I have little doubt in my mind about their concern with MPs. I am sure that the public's concerns are with other matters, and we all know it. All Front-Benchers in the other place and many others are running scared of the media—that is what this is about. However, I urge noble Lords not to be in a mad rush with this Bill; there is no need for it.

My noble friend Lord Peston said that the Minister has only to say tonight that there will be full discussion and that she will not seek to fast-track the Bill, and she will get the Bill by October, probably amended, as she and many others have suggested. Therefore, there is absolutely no case for rushing it through over the next couple of weeks; it would be absurd to do so. Unless my noble friend is able to assure us of that—and I would regret it if she did not—I shall support the amendment of the noble Lord, Lord Norton of Louth. That would at least delay the Bill so that it had to continue until October, unless the Government decide to recall Parliament in September. That would probably be more to the liking of the media than trying to rush it through now.

Whatever you do, running scared of the media will not help you with the criticism that you get. The media are in full cry but I hope that we can ignore that and concentrate on the real issues. The Bill has already been scrutinised by Select Committees and in some of the speeches here today. For my part, as I said, I hope that my noble friend will give us the reassurance that I seek. If she does not, I shall support the amendment of the noble Lord, Lord Norton, and I hope that everyone else will as well.

6:13 pm
Photo of Baroness Perry of Southwark

Baroness Perry of Southwark (Conservative)

My Lords, I also thank the noble Baroness, the Leader of the House, for her sympathetic way of dealing with the Bill in her introduction and in her latest very welcome intervention. I also thank her for the way in which she kindly allowed me yesterday, at her request, to talk to her about my concerns about the Bill.

I am not a lawyer, nor am I a former Member of the House of Commons. Many others who have spoken and will speak after me are far more expert and articulate than me, but I am a passionate defender of the British constitution and I feel extremely strongly about the damage that is being done by the Bill to the basic constitutional strength on which our democracy rests.

I should like to make two very simple points, although others have made them far better and perhaps slightly differently. First, Members of Parliament have certainly suffered a blow to their public esteem. The allegations have applied to a small minority of them but there are no headlines in saying that there are 400-odd honest MPs. No one wants to read a headline like that. After the first few days when the Daily Telegraph had done a necessary job of exposing the dangers of the expenses system, it began to descend into nothing but salacious gossip along the lines of, "Guess what someone claimed for", and so on. That contributed absolutely nothing to the important point that was being made about the difficulties of the expenses structure.

However, that is a very small part of what is at issue here. This matter involves one fleeting generation of a very small number of MPs but, because of their behaviour and because of the way in which one or two newspapers blew it up and it was then picked up by the sound media and television, we—corporately, as a country—have allowed the whole reputation of the democratic heart of our Parliament to be put very much under suspicion. We cannot do that. This is a temporary matter, and it will be very temporary. Already down at the Dog and Duck they are not talking about MPs' expenses and they certainly will not be doing so in another six months' time. As the noble Lord, Lord Barnett, said, people have other concerns on their minds, and it is very important to look to the long term.

We need to help people to understand—perhaps they already have a gut understanding of this—that Members of Parliament are the people. They are not individuals—Mr Bloggs and Miss Jones—but representatives of the people. As I keep saying, they are the heart of our democracy, and the voice of the people is heard through the freedom of speech and freedom of action that Members of Parliament are able to exercise in Parliament.

As the only female to speak in this debate after the noble Baroness, the Leader of the House, introduced the Bill so eloquently, I hope that I can be forgiven if I introduce a rather homely example of my concerns. Anyone who has ever taught young children or who has been a parent of young children knows one simple truth: the more they are trusted, the better they behave, but the more they are watched over, suspected and caught out at every opportunity, the more they will behave properly when watched but behave very badly when not being watched. I think that we have seen in the way in which the Bill is worded an example of the danger of failing to trust people. Failing to trust our Members of Parliament is, as I have said many times in the past couple of minutes, a failure to trust the people of this country who elect them and give them the freedoms to which they are entitled.

I hope that we can convey to Members of the House at the other end of the Corridor that they must stand up for their own freedoms. To me, it is extraordinary that they have voted through a Bill that now makes them subject to scrutiny from an outside body which is not part of the democratic process. That says, "We are not to be trusted. We are people whom you cannot trust, and the only way that we can restore any kind of confidence is for someone to watch over us and breathe down our necks". Therefore, I believe very strongly that if people's trust in Parliament and in Members of Parliament is to be restored, it is vital that those Members of Parliament reassert their authority.

I was unfortunate enough to be on a public panel last week in which the debate was about who governs: the media, politicians or the people themselves? The point was made that the politicians are the people but every time someone tried in any way to defend the actions of politicians, there were hoots of derision. People commented, "They tried to blame the system but they themselves created the system". It appeared to me as a lay person and non-expert that a very simple measure would be to say, "We as parliamentarians and Members of the House of Commons will create a new system in which the public can have trust. We will not let someone else do it for us but will do it ourselves". Would that not be better than Members of the House of Commons raising their hands in surrender and saying, "No, we can't be trusted and therefore someone else must come and do it for us". That is a lay, non-expert view of what I should like to see happen. I agree with almost every other speaker that the Bill does nothing to restore public confidence, it does nothing to restore the standing of Parliament and it does nothing to enhance our democracy.

6:19 pm
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Lord Goodhart (Liberal Democrat)

My Lords, I recognise the urgency for this Bill, but it is not so urgent as to exclude proper scrutiny. I understand that the Government want to get IPSA working on the scheme as soon as possible, but we need to be satisfied that the Bill is right. The Government could and should, at the very least, provide further time for the Committee stage on Wednesday and/or Thursday next week in place of the not very urgent legislation which is now listed for both those days. I understand that the Committee stage of both of those Bills will not be completed before the Recess, so it will make very little difference indeed if they are replaced in the timetable by this Bill. I am absolutely certain that one day in Committee for this Bill will not be enough, and I am far from certain that two will be sufficient.

The basic principle of the Bill, the setting up of IPSA as a body independent of control by the House of Commons with a duty to set up and manage the allowances scheme, has been endorsed by all three parties, or at least their leaders, and I believe rightly so. I agree that the new code should be prepared by IPSA and should require approval by the House of Commons, although that could cause problems in the case of disagreements between IPSA and the House of Commons. We shall see whether that occurs.

In my view, there are quite serious problems with Clauses 6 and 7 on investigations and enforcement respectively. Those problems have been pointed out by the Joint Committee on Human Rights, by my noble friend Lord Lester in the debate today and particularly effectively by the Constitution Committee of your Lordships' House in its admirable report. There is a need for proceedings to be fair and for there to be a right of appeal, whether to the Judicial Committee of the Privy Council or to some other independent and impartial body. Various options could be adopted for that. We shall have to think about that very rapidly.

I have serious doubts about Clause 7, even though I understand that the Government have now agreed to withdraw the subsection which allows IPSA to make recommendations about disciplinary proceedings to the Committee on Standards and Privileges before it has decided on the actual sanction. That was a very unusual and, frankly, odd provision which divided responsibility for imposing punishment and could have led to all sorts of difficulties. It is essential that it goes.

The way in which the system operates seems to be that under Clause 6 the commissioner makes a report and sends it to IPSA. It is not wholly clear what happens next. Does IPSA simply accept the report? Does it have any power of its own to carry out further investigation? Is it bound to accept the report as factually correct? If not, does it have power to modify the report? What sort of representation can be made to IPSA by the Member who is subject to the investigation? Now that IPSA will not be authorised to give a recommendation to the Committee on Standards and Privileges, what will IPSA do with the report when it gets it, apart from file it in its archive? That is not the way to conduct business. It will be extremely slow. As IPSA does not have any disciplinary powers itself, I think it should be out of the loop altogether and that the commissioner should simply report straight to the Committee on Standards and Privileges.

Another provision which concerns me is Clause 8. Is it right that Members of Parliament should be subject to criminal offences to which no one else at all is subject? I am very doubtful about that. The offence in Clause 8(1) of knowingly giving false or misleading information for the purpose of claiming an allowance is plainly a fraudulent act which is already a criminal offence with a much higher maximum sentence than is proposed under that subsection of the Bill. I agree with the Constitution Committee's report in paragraph 39, where it says that no criminal offences should be applicable only to MPs when the general criminal law already covers the situation.

However, the committee goes beyond that. The offence under Clause 8(2) of failing to register an interest is hardly serious enough to justify criminal proceedings and could perfectly adequately be left to disciplinary action by the House of Commons and its power to suspend or to expel a Member from the House. For that particular misbehaviour that seems to be a perfectly adequate punishment. In addition, the Constitution Committee in paragraph 22 points out that Clause 8(2) could lead to a conflict between the courts and Parliament.

The offence under Clause 8(3) of paid advocacy is probably not a criminal offence at present but is likely to become one, if and when the draft bribery Bill, now getting pre-legislative scrutiny, is enacted. The Constitution Committee says that a criminal offence of paid advocacy is unlikely to be workable. In my view, the conclusion is that all three of the offences in Clause 8 should be removed from the Bill; and I am certainly prepared to support the amendments tabled by the Conservative Party to remove them from the Bill.

The changes which I believe are needed to Clauses 6 and 7 and the removal of Clause 8 do nothing to prejudice the fundamental purpose of the Bill. I believe that they would improve it.

I very much welcome the idea of a sunset clause as, given the inadequate time to get this Bill through, it is likely to produce serious problems within the next couple of years. For an unavoidable sunset clause to come into effect in a year's time would be too soon as that would take us up to shortly after the next general election, but a two-year period would be sufficient to give time for further consideration and to identify the shortcomings of the Bill, not all of which I suspect have yet been realised by those of us speaking in this debate. Although we are anxious to get this Bill through quickly and although we certainly support the principles behind it, I believe that we shall need to carry out a very detailed inspection even within the very limited time that may be made available to us.

6:28 pm
Photo of Lord Crickhowell

Lord Crickhowell (Conservative)

My Lords, I was struck by the final remarks of the noble Lord, Lord Goodhart, that there may be even more flaws revealed in this Bill than have already been exposed during the course of this debate. In all the 39 years that I have been in Parliament, I have never seen an important Bill handled in such an extraordinary way and I am tempted to say such a scandalous way. As early as Second Reading in another place, it was announced that Clause 6, which provided that the Commons should continue to have a code of conduct, was being dropped after deadly criticism by the Clerk of the House of Commons.

Clause 10 would have directly excluded the operation of Article 9 of the Bill of Rights from the functions of IPSA. This, the Clerk of the Commons said, would 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".

I am certain that never in my 39 years here has the Clerk thought it necessary to make a similar intervention to protect not just the rights of Parliament, but its ability to serve the people whom it represents. I very much doubt that there have been many, if any, similar interventions in the history of Parliament. Before the other place had concluded its rushed and curtailed consideration of the Bill, the Government were defeated in a Division on Clause 10 as a result of an amendment that, because of the guillotine, was not even debated. Clause 5, to which I will return, was inadequately debated, although it was the subject of particularly devastating and destructive speeches, and an important subsection was removed.

Sometimes, when there are genuine emergencies threatening the state, it is justifiable to rush through legislation with minimum debate, but this is not one of them. Most of the conduct rules could have been approved by the other place without any legislation. The Standards and Privileges Committee in the other place said that there should have been a draft Bill that went through due process to get it right. Consideration of the Bill could have been held over until the autumn, with the advantage that it might then have been able to take account of the Kelly committee report. The noble and learned Lord, Lord Woolf, suggested that it was a mistake to pass a Bill to enforce standards yet to be established.

The Bill could have been divided and, if it was really necessary, a one or two-clause Bill could have been put on the statute book before the Recess. As it is, the Bill is likely to leave a large number of important questions still unresolved, because it has taken apart one system, transferred some functions and left other functions spinning in an unresolved vacuum. Sir George Young's analysis of those problems at Second Reading deserves study.

I completely understand the need for new arrangements to deal with the pay and allowances of MPs. It is all too clear that the existing scheme has been a disaster. Like my noble friend Lord Jenkin, I suppose that I have to plead guilty for some responsibility, having been a member of a Cabinet that refused to increase the pay of Members of Parliament and said that it would be better if they got more allowances. As the scandal unfolded, hardly anyone has been more angry than the spouses of those of us who had to struggle in an era when expense allowances were minimal and all Ministers were deemed to have their principal houses in London. I can tell you that my wife can be extremely strong on the subject. However, I am pretty sure that in time—perhaps it will not be very long—we may come to regret the fact that so much authority is being transferred to unelected quangos and away from Members of Parliament, who have to answer to and may be dismissed by their electors.

I was not much comforted by the statement by the Leader of the House in her opening speech that IPSA must have some—I am pretty sure that she said "some"—understanding of the way that Parliament works. My fear is that it may not have enough understanding of matters that are essential for good parliamentary government. I was also not entirely comforted by her intervention in the speech of my noble friend Lord Roberts of Conwy. She said that the Bill would not apply to the House of Lords, but I fear that it may be the model for a Bill that will apply to the House of Lords. I do not think that she said that IPSA would not be the body that would be responsible for dealing with the affairs of the House of Lords, either.

The 18th report of the Select Committee on the Constitution, published only today, raises some very significant issues, referred to by my noble friend Lord Goodlad, about the necessity to ensure the political neutrality of IPSA. It draws attention to the fact that the statute-based prohibition of paid advocacy and the creation of a criminal offence of engaging in paid advocacy may open up a possible area of conflict between the courts and Parliament. The committee also pointed out that the decision-making powers of IPSA should be subject to the possibility of appeal. It draws attention to the complex human rights issues, also raised by the Joint Committee on Human Rights. We were given no consolation at all by the noble Baroness the Leader of the House, who said that the Government do not agree with the Joint Committee. I fear that we are getting into very murky waters.

I had always intended to say some robust words about how this House should deal with the Bill, but then I read the 17th report of the Select Committee on the Constitution, chaired by my noble friend Lord Goodlad, which was published on Monday. The committee's language was more robust than even I had in mind, and its opinion much more authoritative. I take simply its last conclusion as my text:

"we do not think that the case for proceeding with this bill on a fast-track timetable has been established and we do not support any curtailment of the usual legislative timetable".

It is in the face of that recommendation that I heard with surprise and dismay that only one day was being set aside for Committee and one for Report and Third Reading. I understand that because Members in the other place are anxious to conclude the whole business as quickly as possible, the usual channels have concluded what I can only describe as an unholy pact and accepted a timetable that fails to meet the Constitution Committee's requirements and will almost certainly be inadequate to complete our work as it should be completed.

I very much welcome the fact that my noble friend Lord Norton of Louth has tabled an amendment to the Motion to follow this debate. I will support it, and I hope that others will. I very much hope that it will be passed. If it is not, I fear that that is a decision that we will all come to regret. At the very least, we must get a sunset clause into the Bill. The Bill has been introduced by a dying Government into a demoralised and shell-shocked House of Commons. It is likely that about half the Members of that House will not return after the election, so we will have an elected Chamber in which there may even be a majority who will be entirely new. We are legislating not so much for this Parliament, but for its successor. That means that a refreshed Parliament, with a new mandate, should have the opportunity to revisit the Bill.

Earlier, I mentioned Clause 5, which has had subsection (8) removed. At a recent meeting in this building, one of my noble friends said that the original clause was aimed by the Prime Minister at the heart of the Conservative Party. I responded by saying that in my view it was aimed at the heart of the effectiveness of the House of Commons. It is true that the damage was done before the Bill appeared when, in April, the other place agreed a new code of conduct—or perhaps it was earlier, when the Nolan rules were accepted rather too easily, without enough realisation of some of their consequences.

Old Clause 5 would have taken Parliament a very big step down an increasingly rocky road. Then, in the face of sustained criticism, Clause 5(8) was deleted. The overall effect of Clause 5 in the amended Bill may not be very different. It gives statutory authority to what were rules and are now a code under which Members must register the precise amount of each individual payment, the number of hours worked during the period to which the payment referred, the nature of the work, and the name of the individual or organisation who made the payment.

Under the conventions that govern our conduct, I believe I should not quote the words of Members in another place unless they are Ministers. If that were not so, I would have liked to quote a large part of the speech of Mr Frank Field. I beg noble Lords to read it. He spoke of representative government, the principles that should underlie it and how the House of Commons should, through those who sit in it, be a mirror of the society that they represent. Over the centuries, Parliament has been about representing interests, but now it is judged that the great interests in this country should not be represented and that if Members attempt to do so, they might be expelled or imprisoned. He spoke of the change that had come over the other place during the past 50 years, during the course of which the pool from which MPs are drawn has become narrower and narrower. He thought that Clause 5 would further change the nature of the House and that it is unworkable.

The nature of the House has changed in a fundamental way since I entered it in 1970, and not for the better. Then, it was full of people with wide experience representative of and knowledgeable about trade unions, business, industry, law, farming, the services and so many other things besides. There were many who, because of outside incomes and the ability to find employment outside, were able to take an independent stand on great issues and defy the Whips, not fearful that they might never achieve ministerial office or be able to find employment if they lost their seats. I do not think it an improvement that the number of such people there today is smaller. I do not think it an improvement that it is increasingly difficult to find Members qualified to become the law officers. I do not think it an improvement that there has been a great increase in the number of those who have no other skills or experience, except those of politics, and no prospect of obtaining jobs outside politics. I agreed with every single word that my noble friend Lord MacGregor of Pulham Market had to say on this subject.

I had no private income, and I could never have contemplated becoming a candidate, let alone an MP, if I had not had another job. It is true that the pay then was far less and that the allowances that we were entitled to claim would hardly register on the scale of the modern system but, even today, I am certain that there are many capable of giving good public service who would not feel able to sacrifice their own and, more importantly, their family's standard of living if it became impossible for them to hold down other jobs as well as fulfilling their parliamentary duties.

Still more will be deterred by a system that is intrusive and unworkable. The language being used about those with other jobs is frequently offensive and nonsensical, born of ignorance or jealousy. "Moonlighting" is one such description. I won a seat not held by my party for 42 years, and I held it in every subsequent election that I fought. I did not win it or retain it by neglecting my constituents. I did not establish a reputation in the House, become a Front-Bench Opposition spokesman, a shadow Secretary of State and, in due course, a Secretary of State by neglecting my parliamentary duties. In those days, we sat for far longer hours—frequently through the night—and we were not provided with the plethora of secretaries and political aides now available. I did not give up my principal outside employment until the last months as the shadow Cabinet prepared for the election we won and for office. As a Minister, like other Ministers, I then had to work harder and for longer hours than I had ever worked before, but I still had to nurse my far-flung constituency and look after my constituents.

Like Mr Frank Field, I strongly oppose a measure that makes a mockery of what he and I thought public service was all about and provides for stopwatches or egg timers to be started every time an MP undertakes anything outside his parliamentary duties. The scheme is preposterous. On the one hand, we are asked to believe that every MP without an outside job is endlessly engaged on political work. Does he or she never enjoy the sun on the Terrace, spend long hours drinking in the bars, watching television in his or her sumptuous offices or just gossiping in the Tea Room? Back in the constituencies where MPs now spend so much time, do they really spend all their time in frantic political activity? I do not believe it, and if they do, it is curious how little many of us observe of those activities.

In the real world, it is virtually impossible to disentangle minute by minute the time spent on each activity. In the days when I had a job in the City, I might have been able, on a weekly basis, to produce a very rough approximation. In the days when I was chairman of the National Rivers Authority, when I was sitting in this House, I was paid on the basis that I would do at least three days' work a week for the authority, I would have found it impossible, though I am quite certain that the NRA got a full three days from its chairman. If the Bill passes, those approximations would be open to challenge and possible penalties. What are lawyers and other professionals to do if they are required to identify their clients and how much they have paid, which would breach their duty of confidentiality? As Mr Dominic Grieve pointed out, that conflict of duties could end up in the European Court of Human Rights. What is the farmer to do or the individual running a small private business? Every time a transaction is completed, it will have to be declared with the gross receipt set out in full and the time devoted to obtaining the contract. The public are never going to know the expenses of running the business or obtaining the contract, so the real net income will not be revealed. Imagine the scene: the farmer sits by the sale ring for most of the morning and buys 20 heifers towards the end of the sale. What has been the time spent? How can it possibly be relevant? Surely, all that is needed is a simple declaration: "I am a farmer". Already, a significant number of very capable and conscientious Members of Parliament have announced that they are no longer prepared to put themselves and their families through this invasive and humiliating nonsense. I fear that in the future a very large number of able men and women of the kind that we desperately need will come to the conclusion that they too must abandon any thought of serving their country in Parliament. Parliament will be the poorer for it and, more importantly, the people of this country will pay a heavy price. Ironically, one result is likely to be a House containing more of the very rich with private incomes.

A number of noble Lords referred to the misunderstandings about the privileges of Parliament, many believing that they simply provide protection for a whole lot of cosy rights for Members of Parliament and Lords. The reality is that those privileges are there to protect the most basic rights of the citizen. There are clauses that make changes that go to the very heart of Parliament's independence and what the Bill of Rights 1689 was all about. There are questions about the ability of individual Members to be treated justly with the proper protection of the law. The report of the Joint Committee on Human Rights is as relevant to our consideration of the Bill as that of the Constitution Committee.

I finish my remarks as I started them, by expressing a sense of outrage at the way in which this Bill is being handled. We must do our best to give it the examination it needs. I hope that my noble friend Lord Norton of Louth's amendment will be carried. We need to insert a sunset clause to give a new House of Commons the opportunity to carry out wider scrutiny and consultation in order to prepare a Bill more likely to serve the interests of both Parliament and people.

6:49 pm
Photo of Lord Neill of Bladen

Lord Neill of Bladen (Crossbench)

My Lords, I declare an interest as the second chairman of the Committee on Standards in Public Life, following Lord Nolan, who is now, sadly, deceased. That committee strongly believed in self-regulation in Parliament. I want to begin with, and take as my leading text, a citation from the learned and able report of the Joint Committee on Parliamentary Privilege, which several speakers have mentioned today and whose chairman, the noble and learned Lord, Lord Nicholls of Birkenhead, entered the Chamber by fortune about three-quarters of an hour ago to hear this eulogistic citation from paragraph 3:

"Parliamentary privilege consists of the rights and immunities which the two Houses of Parliament and their members and officers possess to enable them to carry out their parliamentary functions effectively. Without this protection members would be handicapped in performing their parliamentary duties, and the authority of Parliament itself in confronting the executive and as a forum for expressing the anxieties of citizens would be correspondingly diminished".

To summarise, parliamentary privilege exists to protect Members of Parliament and thereby to benefit the public. If, by a Bill such as this, you diminish the House of Commons, you thereby injure the public.

The events that took place in May and June, beginning with the disclosures in the Daily Telegraph, revealed a terrible situation where the public was angrier with Parliament than one has ever known in one's life. There was a double whammy, because even when the first shock waves were going through the country, based on what was in the Daily Telegraph—its sales, no doubt, soared—a second lot of disclosures came from Parliament, no doubt as a result of the grindingly slow process that started with the defeat of the House of Commons in front of the High Court on 16 May 2008, when the court made an order for full disclosure, albeit subject to redactions, which produced those ludicrous publications with hardly a word or even the name of anybody visible. That was the double whammy, because it showed that, left to themselves, the Members of Parliament operating that system would have liked to reduce the amount of information in the public domain to those limited, unintelligible fragments.

That dire situation called for a response. Should it have been mature, measured and consistent with the privileges and traditions of Parliament or a panic reaction designed to capture some laudatory headline in the tabloids, or even the broadsheets? I am afraid that the Prime Minister made it perfectly clear in what he said on 10 June that the route to be followed was that of panic. Now, in reading this passage I bear in mind what the Leader of the House told us this afternoon: that it is no longer the view of the Prime Minister that this Bill should apply to the House of Lords. I would interpret that to mean that it would not even be a model for a Bill. At the time, however, before the U-turn, the Prime Minister referred to a meeting of "the Government's democratic council", which was going to,

"bring forward ... proposals ... First, we propose that the House of Commons—and subsequently the House of Lords—move from the old system of self-regulation to independent, statutory regulation. That will mean the immediate creation of a new Parliamentary Standards Authority, which will have delegated power to regulate the system of allowances. No more can Westminster operate in ways reminiscent of the last century, whereby Members make up the rules and operate them among themselves".

He went on to refer to other powers that would be given to that authority and added:

"I welcome the cross-party support for these proposals".—[Hansard, Commons, 10/6/09; col. 796.]

In the inner room, no longer smoke-filled, a deal of some sort was, no doubt, done with the leaders of the parties—foolishly, in my opinion—that it was in the interests of all parties that the Bill should be bustled out with that strong-arm appearance.

If you stand back and think about the situation, you see that it is very grave for the Members of Parliament down the Corridor and, as the noble Lord, Lord Crickhowell, pointed out, for their successors, who will soon be here—possibly a 50 per cent different team of men and women. But what was the Prime Minister saying in that passage? It was, surely, that the Members of the House of Commons are not to be treated as fit to regulate their own affairs or to conduct self-regulation. Either that is a condemnation, which will add to the worries expressed by the noble and learned Lord, Lord Howe, and others about what is happening to the morale of Parliament, or it is a pure funk that, in order to please the media, some new, external body must appear and have an authority over the House of Commons that, with such knowledge as I have, I believe is without parallel in parliamentary history.

The Star Chamber was abolished in 1641. It is as if King Charles walked into Parliament in 1643 saying, "Do you know what I'm going to do? I've decided that you made a mistake when you abolished the Star Chamber. I'm going to set up a body that is superior to you and can give orders to Members of Parliament on how they are to behave". That is inconceivable, for Parliament is sovereign; you cannot create a body out there with those powers. In an election, the electorate can get rid of Parliament but not of those other bodies that are superior to Parliament. I submit to your Lordships that the creation of that new, outside body is wholly unnecessary.

I entirely adopt what the noble Lord, Lord Armstrong of Ilminster, said. If you reflect maturely on it, why should you not create a system for self-regulation? You can have any amount of assistance on the financial side. The four great chartered accountancy companies that do all the mega-audits—although they were criticised yesterday, on some grounds that I have forgotten—could be asked, "Will you set up a panel for us, that will immediately—the same day, or the next—review any submission for expense or allowance made by any Member of Parliament?". That panel could adjudicate on whether the claim had been supported by the mortgage or whichever receipt. You could set up any amount of independent assistance to help to ensure total integrity and remove all opportunities for people to say, "They are up to their tricks, or stealing, or doing things in a sly manner by flipping from one second home to another". You could eliminate all of that with the greatest of ease, but you do not need to impose that additional, outside body on Parliament.

There is a need to look at, with reflection and mature consideration over the vacation or long recess, what system could be put up in place, in light of the forthcoming recommendations from the Committee on Standards in Public Life, which, as now constituted, has undertaken the role of producing new guidelines. One very much hopes that its guidelines will say, "This is how we ensure integrity on the financial side, and we will make recommendations on a wise way of ensuring that that is complied with". Then there can be no more criticism of the sort that the Daily Telegraph has carried.

I agree, then, with the noble Lord, Lord Armstrong of Ilminster, and with other speakers: this approach is completely wrong. It is totally contrary to history. It negates the privileges conferred in 1689; noble Lords may remember the words about there being no interference with the proceedings in any court or any other place. The committee that the Bill creates is another place, where the proceedings in Parliament would be interfered with. Let us get rid of all that and devise a system that is consistent with our history.

7:00 pm
Photo of Lord Lyell of Markyate

Lord Lyell of Markyate (Conservative)

My Lords, I am glad to follow the noble Lord, Lord Neill. The commission set up by King James II under Judge Jeffreys reflected on the system that is to be set up under the Bill. I declare an interest in that, with the noble and learned Lord, Lord Morris of Aberavon, I sat in the mid-1990s on the rather doleful Privileges Committee that dealt with the cash for questions issue. As Attorney-General, I was indeed counsel in the fascinating Pepper v Hart case, although I confess to the noble Lord, Lord Lester, that my recollection of it is a little different from his.

As almost every Member of the House has said, the Bill is dreadfully rushed. It still contains provisions that rightly cause us great concern and need much more than one day in Committee. They need to be looked at carefully, which would be to the huge benefit of the Government. I congratulate the Leader of the House because she works very hard on our behalf. When she has been nipping in and out, I hope that it is to get authority to extend the time before we have to vote on the amendment tabled by the noble Lord, Lord Norton of Louth—otherwise, I shall vote for it. We need time to consider the Bill properly. There has been no time for input from public or press and we have not waited for Sir Christopher Kelly's report.

I wish to make two points. I emphasise the point made by the noble and learned Lord, Lord Woolf, about the unnecessariness and deep undesirability of providing for separate criminal offences for Members of Parliament when the existing offences of false accounting and fraud more than cover any relevant misconduct. Furthermore, it is bound to be observed, with proper criticism, that these offences carry much lighter penalties than the common law, which carries seven years and 10 years respectively for those other offences.

The principle in relation to that aspect and the other point that I wish to make is the same: that Members of Parliament—and, indeed, Members of this House—should be treated, as far as possible, under the law and in relation to laws of taxation and remuneration, like other citizens of this country. It is the disclosure that people are suddenly getting kitchens, bath plugs and massive mortgages as part of so-called expenses or allowances that is upsetting people.

In summary, the system of allowances for second homes in the House of Commons should be abolished. It should be rolled into and paid as part of a fair salary as recommended by the Senior Salaries Review Body to cover, as well as normal living expenses, the reasonable needs of Members of Parliament to maintain homes both near Westminster and in or near their constituencies.

A great deal has been said about our being in hock to the press and I was heartened about three weeks ago to read a leader in the Times that said, broadly, that the expenses for this aspect should be rolled into a salary—as they always, in a sense, had been while they existed—and that there should be an overall taxable salary for these purposes of £90,000. Whether that figure is too high or too low is for the Senior Salaries Review Body and not for us—Parliament will have to consider it and take responsibility—but the principle that we should be treated the same as other citizens would do more to restore confidence than anything else.

For those of us who were Members of the other place, the background to the present system is fascinatingly set out in the broadsheet Order, Order!, which former Members of Parliament receive. There is an interesting article by Joe Ashton, the former Labour Member of Parliament for Bassetlaw in Nottinghamshire, who was always a gutsy speaker. He is as gutsy today as he was then and he points out the background. It all started in July 1974, between the two elections, when Harold Wilson was faced with a revolt by 150 Members of Parliament. There are former Members of Parliament here who were there then and will know whether Joe Ashton is right or wrong.

Certainly when I came in, five years later, at first I did not claim. I could not quite understand the living away from home allowance and I rented a servant's room from Lady Airey in Marsham Court, for which I paid £40 a week, and that is what I claimed. I then asked a more experienced old hand in Parliament how it worked and he said, "No, don't do that; it's part of your pay". I then claimed the living away from home allowance for the next 22 years because I believed that that was what every Member of Parliament did.

There is nothing party political in this because, although that system may have been started under the Labour Government, it was adopted by Mrs Thatcher, John Major and Tony Blair. I am all in favour of openness—I am being fairly open in this speech—but the system began to fall apart when people saw these new kitchens and massive mortgages. It is not satisfactory to have massive mortgages as the only way in which you can get an essential part of your salary. I do not excuse the flipping of homes—it did not happen in those days; I do not think that anyone thought of it—but the complexities of changing tax law to do away with it are, I suspect, much greater than most of us have given our minds to.

It comes back to this point: we should stand back and look at this with common sense and be truthful and realistic about Members' remuneration. We should put it to an outside body, set a level of what we should get and pay tax on it. One noble Lord of great distinction said to me, when I tried this out on him, "If you make this reform, you will not need this Bill". To a great extent that may be true, because the other aspects of expenses, such as secretarial and travel allowances, are not difficult to model. Although there have been some fiddles, with people allegedly employing their sons in dubious circumstances and so on, they have not caused a major problem.

We do not know what Sir Christopher Kelly is going to recommend; we are putting the cart before the horse and we are legislating in haste and in abstract. I ask the Government, even at this stage, to reflect on whether to defer the remaining stages, at least for a reasonable time, to enable us to have a proper debate and to help us to make good law, not bad law.

7:08 pm
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Lord Norton of Louth (Conservative)

My Lords, this Bill is introduced on the basis of a false premise. That premise underpins the desire to fast-track the Bill. Given that it is a false premise, it follows that there is no case for expediting the passage of the Bill and setting aside the House's recommended minimum intervals between the stages of a Bill. I shall argue not only that there is no case for fast-tracking the Bill but also that there are strong—I would suggest compelling—arguments for not fast-tracking it.

The Bill is designed, as we have heard, to help restore public trust in Parliament. Recent months have seen a collapse of confidence in the political class. The problem has not been so much with Parliament as with parliamentarians. There is a widespread perception of a misuse of public funds. The case for expediting the passage of the Bill is that creating an independent parliamentary standards agency to regulate MPs' pay and allowances, and to do so as soon as possible, will help lance the boil of public anger.

This argument fails to grasp the nature of the public anger. As far as the Government are concerned, the crucial point is that the Bill creates an independent body: MPs will not be in control of their own pay and allowances. What this ignores is that the problem is not one solely of public disapproval of how the allowances are being administered; it is the fact of the allowances themselves. They will remain—look at Clause 3. Having an independent body dispersing money to MPs for furniture and mortgages, however independent the body and however rigorous the rules, will not lance the boil of public anger. Believing that this Bill will have such an effect is not only misguided but dangerously so.

Had there been greater discussion, not only within Parliament but with people outside, then this may have been apparent. I draw to the attention of the House the words of Natascha Engel, Labour Member for North-East Derbyshire, during Second Reading in the other place when she said:

"Until we know what sort of Parliament the people out there want this to be, it will be much more difficult for us to create an appropriate system of remuneration and reimbursement. We have had any number of opportunities to go out and talk to people, but we have failed at every turn".—[Hansard, Commons, 29/6/09; col. 92.]

We are legislating against a background of public anger but without fully appreciating the depth of that anger and what people want Parliament to do.

This brings me to the arguments against expediting the passage of the Bill. Given what I have said, there is no clear case for fast-tracking the Bill. There are, I suggest, three powerful arguments against. An expedited passage will be counterproductive, perverse, and dangerous.

First, fast-tracking the Bill is counterproductive. It would, as some noble Lords have already outlined, reinforce the very condition it seeks to counter; that is, a lack of confidence in parliamentarians. The point has been well expressed by the Joint Committee on Human Rights in its report on the Bill. It said:

"We note, with a certain irony, that although the bill is designed to restore public confidence in the House of Commons, it is being rushed into the statute book and will not receive proper scrutiny, as a result. We have been unable to write to the Government to ask for its views on the issues we raise".

It is a point developed in the report on the Bill of the Constitution Committee of your Lordships' House, on which I serve. Paragraph 23 of the report states:

"There is an undoubted need to restore public confidence in the parliamentary system. It is not, however, clear to us that a cobbled together bill rushed through Parliament will help rebuild public trust; on the contrary, if parliament cannot be seen to be scrutinising proposals with the thoroughness they deserve, public confidence in parliamentarians is likely to be further undermined".

Secondly, fast-tracking is perverse, given that the Committee on Standards in Public Life is due to report in the autumn. What if its recommendations—which party leaders have said, in advance, that they will accept—run counter to the provisions of the Bill? The Justice Secretary has claimed that the Bill creates the scheme for pay and allowances and that the committee will fill in the details of the scheme. The committee, justifiably in the light of the Prime Minister's invitation, believes that it is addressing the most appropriate scheme.

This raises an obvious question. It was raised by Professor Dawn Oliver in her evidence to the Justice Committee in the other place. In commenting on Clause 3, she wrote:

"This clause assumes that there will be an allowance scheme. This pre-empts the CSPL recommendations, which might not recommend allowances but flat rated salaries instead".

Flat-rate salaries, as my noble and learned friend Lord Lyell has touched upon, would address the problem probably far more effectively than the provisions of the Bill. The question I put to Government is this: if this Bill becomes law before the recess and the Committee on Standards in Public Life makes recommendations that run counter to its provisions, what then do we do? The party leaders have signed up to implementing the committee's recommendations. Jack Straw appears to believe that the answer is to amend the Act. We enact it before the recess and we amend it in the autumn. Does anyone really believe that this will restore public confidence?

Thirdly, fast-tracking the Bill is dangerous. This is the most important point. This, as has been so well argued already by noble Lords, is a public Bill with constitutional implications. Those implications have been drawn out in the memorandum of the Clerk of the House of Commons to the Justice Committee; in the memorandum of the Clerk of the Parliaments to the Constitution Committee of this House; and in the reports of the Joint Committee on Human Rights and the Constitution Committee. They are also clear from other evidence submitted to the Justice Committee in the other place.

The Bill was hastily drafted and the constitutional implications not fully realised. When some of the implications became apparent, the Government accepted that one clause had to go. Another was removed by a vote of the House, even though there had been no opportunity to debate the clause and no opportunity to take account of its consequences. Indeed, as the Justice Secretary said after the vote and at the very end of Committee stage:

"I say to the right hon. Member for Berwick-upon-Tweed ... that although we will not be able to do so on Report, we will take full account of the decision of the House in the consequential amendments in the other place".—[Hansard, Commons, 1/7/09; col. 387.]

So we have to look at the consequences of that change to the Bill. However, we also have to address the constitutional implications of the remaining clauses. The clauses that have been removed in the other place have not shed the Bill of constitutional implications, as we have already heard this afternoon. Anyone who believes that they have should read the report of the Joint Committee on Human Rights and the memorandum of the Clerk of the Parliaments. There was no time in the Commons to consider all the issues raised by the Joint Committee. The chairman, Andrew Dismore, made clear that he expected that his Joint Committee colleagues in this House would pursue amendments similar to those tabled in the other place. In other words, there is a lot to be done on a Bill that, without thorough consideration, may have significant unintended consequences. As the Constitution Committee makes clear, the move towards greater external regulation, as provided for in the Bill, breaks with the principle of "exclusive cognisance" and has the potential, again as we have heard this afternoon, to give rise to conflict between Parliament and the courts.

In the House on Monday evening, I drew attention to the fourth report of the Constitution Committee in the 2001-02 Session on the process of constitutional change. The committee took evidence from the then Lord Chancellor, the noble and learned Lord, Lord Irvine of Lairg, who made clear that constitutional measures brought forward by government were subject to a rigorous process of preparation within government. He produced a diagram showing the process. He told the committee that,

"the devil is in the detail and I can assure you that we do work very intensively".

This Bill clearly departs from the process detailed by the noble and learned Lord. The devil most certainly is in the detail but there has not been the necessary intensive work prior to introduction. The Constitution Committee yesterday published a report detailing the steps that should be undertaken by government when proposing to fast-track legislation. Those steps have not been followed in respect of this Bill.

Given that the Bill has not been brought in on the basis of consultation, within government or with anyone outside, and has been rushed through the other place in three days and is demonstrably incomplete, the onus falls on this House to ensure that it is subject to detailed examination. That point has been made by Members of the other place. Like my noble and learned friend Lord Mayhew in his excellent speech, I, too, quote Dr Denis MacShane, the Member for Rotherham, during Committee stage of the Bill. He said:

"In my 15 years as a Labour Member of Parliament, who would like an elected second House, I never thought that I would say, as I say tonight, that I hope that the other place takes time and considers the matter carefully".

He added:

"The concern is cross-party—many of us are talking about the matter in the Tea Room and in the corridors".—[Hansard, Commons, 30/6/09; col. 211.]

The report of the Constitution Committee is clear. Its conclusion could not be more emphatic. It states that,

"we do not think that the case for proceeding with this bill on a fast-track timetable has been established and we do not support any curtailment of the usual legislative timetable".

I shall later invite the House to support that conclusion. This is a matter not for the political parties but for this House. There is an important principle at stake and I hope very much that the House will agree to uphold it.

7:19 pm
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Lord Williamson of Horton (Crossbench)

My Lords, to me, as the 21st speaker in this debate, it seems a long time since we heard the first presentation by the noble Baroness the Leader of the House. However, before I comment briefly on the Bill and pose some questions, I thank her for her presentation of the real situation in which we find ourselves and of why, as she says, the House of Commons needs this Bill. I understand the overall situation. I am also grateful to her for her quite definitive statement of the non-application of provisions similar to this Bill to the House of Lords—although this Bill does not apply to us. That is a very important statement, as it effectively negates earlier statements made by Ministers in recent days, which is important for us in this House.

When I was in the Army, in the Royal Signals, we spent a lot of time repairing equipment and trying to make it as good as new. Then the great day came when we were told that if the product was bust we should simply scrap it and replace it with a new model. I believe that in the present circumstances and in the light of public reaction, the Bill follows the second course, as the intention is to make a really substantive change, as well as to establish a new independent authority to pay the salaries and allowances of Members of the House of Commons, to prepare their allowances scheme and a code relating to their financial interests. I have great sympathy with a recent point made by the noble Lord, Lord Norton of Louth. The people are not concerned so much with the creation of some new body as about the existence of the allowance scheme in itself. That is a very important point, and one that we need to concentrate on.

In view of the importance in our political system of the need for Parliament not to cede its powers either to the Government or to another body, one might have hoped that the House of Commons would keep the final control of the allowance scheme to itself. In the present circumstances, I see that is very difficult. However, I note that the code of conduct relating to financial interests to be prepared by the Independent Parliamentary Standards Authority does not come into effect until approved by a resolution of the House of Commons. That remaining element of parliamentary control is to be welcomed in that matter.

I have a number of questions. In the debate so far, everyone has expressed an opinion, mostly very strongly, and we have had a whole range of quotations from important committees. In my intervention, I want to pose specific questions to the Government, because what I am interested in is their reaction to these points. We may be very unhappy, but I want to know what they think about them.

First, of course, is the important point about parliamentary privilege. The situation is not the same as it was when the Bill went into the other House. There has been a substantive change in the removal of important clauses from the Bill, including the one headed "Proceedings in the House of Commons", which was removed without a vote on the amendments but in a vote in the other House. The clause then vanished. It was a rather curious vote, as there was a majority of three and a former Home Secretary and a former Foreign Secretary voted against the Government on that occasion. If you do the mathematics, you can see that it was rather a curious result—but, as the Australians say, "Good on them".

None the less, despite the non-existence of that clause from the original draft, subsequent to that we have the note from the Clerk of the Parliaments—and I am not referring to Dr Jack from the other House. It says that,

"the juxtaposition of the statutory provisions on paid advocacy contained in the Bill (which will of course be subject to judicial oversight) with the codes covering declaration adopted by the two Houses, which are omitted from the Bill ... could erode the protection offered by Article IX"—

that is, the famous Article IX of the Bill of Rights. I know that the Government may find a way around that, but I pose the question to the Leader of the House: what is her reaction to that in relation to the question of parliamentary privilege?

The second point, the House will be delighted to hear, has not been raised before—so there is one other thing in this Bill that noble Lords will be able to complain about. We understand that the decision to create the Commissioner for Parliamentary Investigations was principally because it would avoid the risk that the independent authority might be judge and jury in its own case. That seems quite reasonable, but there are still elements that we need to look at. I ask the Leader of the House to say whether she is satisfied that there will be a clear division between the independent authority and the Commissioner for Parliamentary Investigations and that the activity of the independent authority will clearly take account of those points.

I turn to one separate point on this, which is not in the main part of the Bill but in the schedule to the Bill, in paragraph 17(2), which states that:

"So far as possible the IPSA's administration functions and its regulation functions must be carried out separately, so that one set of functions does not adversely affect the carrying out of the other".

I do not want to make too much of this point, but the phrase "so far as possible" is not very encouraging. It is very important that we should have a proper differentiation of functions in the new proposals.

Thirdly—and this is the most important point that I come on to—there is the question of the extent to which the Bill introduces dangerous proposals that would affect relations between Parliament and the courts. For me, that is the most important point. Will the Leader of the House comment on that specifically? In the text of Clause 7(6), there is written,

"otherwise, is not to have any legal effect".

That is interestingly written, but it is not really the point. The point is that, as indicated by the noble and learned Lord, Lord Woolf, some elements in this Bill could very easily end up in the courts. He made clear, and I agree, that some of the actions of the independent authority and the commissioner could be covered by that statement—in particular Clause 6(3), which he quoted. That is quite possible, and it is a matter that concerns me. The differentiation of the responsibilities between Parliament and the courts is something to which we need to give attention and respect and not to overtarget in an incidental manner in some other proposal.

That is my third point. Very briefly, I repeat, what about parliamentary privilege, what about the extent to which the independent authority and the commissioner divide their work and what about—a key issue raised by so many Members—relations between Parliament and the courts?

7:29 pm
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The Earl of Onslow (Conservative)

My Lords, I have never been a Member of the House of Commons, but when I am either booted out of this House or I die, it will be the first time since 1550 that there has not been an Onslow in one or both Houses of Parliament continuously for 500 years. I feel an enormous and overawed awe of this place. Whenever I come into it, I am shattered by the grandeur of it. I know that I am a descendant of a hairy-cloaked Anglo-Saxon who attended the Witan of Alfred the Great; because that is what we are.

One of my forebears was Speaker of the House of Commons for 33 years, and I promise noble Lords that he would not have descended into wearing one small robe to think that he was bringing the House back into proper repute. Somebody said of him, "Judging by the silence in the room, Sir Arthur Onslow has just made a joke", but he produced most of the rules by which the House of Commons was run. He was a man of the utmost integrity and was unbribable in the days of Walpole.

Why has this scandal arisen? The noble Lord, Lord Crickhowell, alluded to it, as did the noble Lord, Lord Jenkin. It was because the executives of both parties chickened out of awarding. So what did they do? They said "No, old boy. Don't take your full pay. We'll make it up to you in allowances". What was constructed was a trough. Over that trough was a large neon sign which said, "Put not only your snouts but your front trotters and your floppy ears into it and go slurp". I suggest to your Lordships that only 20 per cent of the Members of the House of Commons have taken the mickey out of the system and 80 per cent of them have not, as was mentioned by one noble Lord. Those 80 per cent are quite entitled to say, as did Clive when surrounded by the treasury of the Siraj-Ud-Daulah, "Gentlemen, I stand astonished at my own moderation".

The House of Commons is the foundation of all our liberties. The confidence of the House of Commons, which has made sure that we can all walk as free subjects of the Crown around this country, is something of magic and awe. If Members there lose their bottle and start wandering around with their shoulders hunched and terrified, we will all suffer appallingly for it.

I wish that the noble Lord, Lord Barnett, would divide the House on Second Reading, because I would not walk through the Lobby, I would run through the Lobby with him. This Bill has been completely and comprehensively destroyed. I do not even need to read the bits that I have marked in these two reports, because they are there. The noble Lord, Lord Armstrong, perfectly sensibly said that this problem could be solved by proper structures on the instructions of the House of Commons. It does not need to be outsourced—like being outsourced to a call centre in Bangalore.

I will finish my brief remarks by congratulating the noble Baroness, Lady Royall. I say that because when we had our little troubles, she acted immediately and decisively. The Privileges Committee acted immediately and decisively and we suddenly discovered—was it not lovely?—that we had the power to suspend. We had not known that we had it for 800 years but we suddenly found it. She acted with speed and decisiveness and now she has to show a lot of courage. She has to get up at the end of this debate and say—is she listening?

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The Earl of Onslow (Conservative)

Good, my Lords, she is. Well done.

The noble Baroness has to get up and say, "I have listened to very distinguished gentleman from all sides of the House"—and ladies, because I am not being sexist. I do not want to be reported to Harriet Harman. She should get up and say, "I have listened. The case for agreeing with what the noble Lord, Lord Norton of Louth, proposes is overwhelming. I am going to go back to the Prime Minister and say, 'First Lord of the Treasury, if you want real trouble with the House of Lords this is what you will get. If you want a little co-operation on something which is pretty awful anyway, at least you'll get it if I can do this'". The noble Baroness should give an undertaking to say that and then do it, and if she gets the sack, we will all buy her a pension. It is as simple as that.

7:35 pm
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Lord Cope of Berkeley (Conservative)

My Lords, the only surprise in the speech of my noble friend Lord Onslow was that he was in the least worried about being reported to Harriet Harman. I was surprised about that.

This has been an exceptional debate, not least for the speeches of the two Labour Peers. But like the noble Lord, Lord Barnett, I find most of the things that I had in mind have already been said much more effectively than I could have done and have helped to change my own appreciation of this particular Bill.

We have all been shocked over the past few weeks by these expenses revelations and the Commons is shell-shocked by them, which is what has given rise to the Bill, as others have said in different forms. There are two elements to the Bill. One is about expenses. I understand the Commons wants to try to do something about expenses before the Summer Recess starts, even though things are already going to happen during the Recess as consideration is given to what should happen in the future about the salaries and expenses of Members of Parliament.

In any case, I am perfectly sure that in practice the expenses regime has already changed a great deal. I am quite sure that Members of Parliament are not claiming things that they would have claimed some months ago. I am also quite sure that the officials of what is now called the House of Commons Department of Resources are being much more careful about the expenses that they agree. I am also quite certain that the audit of what is happening now, which will be done in due course, will be much more rigorous than the previous audit of what was happening. So, as a matter of fact, the expenses regime has already changed a great deal in practice, whatever happens to the Bill.

However, the Bill is also about what to do about the interests of Members of Parliament, and there is no urgency for that. The public have not been bothered about that to any great degree recently. It is a matter of the greatest complexity and anyone who did not understand that only has to read today's proceedings. There is much more that can be said about that, but I will not trouble your Lordships at the moment.

Our excellent Leader of the House said at the beginning of her remarks that this is Commons business and we should let the Commons decide what happens to the Commons in respect of its allowances and so forth. I would have agreed with that until recently, but the fact is that the Commons brought us, your Lordships' House, into this. Things used to be settled with Commons Standing Orders, where we had no locus or role at all. The setting up of the present commissioner and so forth was all dealt with under Commons Standing Orders. Now it is proposed that it should all be done by statute law. That means both Houses of Parliament are involved in deciding what should be in statute law. There is also the danger of bringing in the courts. A lot has been said about that, to which I do not need to add this afternoon.

The Commons has brought us into this, and this afternoon's debate has amply demonstrated that the Committee and Report stages will take a long time to settle. There is already a raft of amendments down before we even start our consideration—some of the greatest importance. We have heard enough this afternoon to know that it will all take a very long time. The very least that the Leader of the House needs to do when she winds up is to set out in detail the timetable that she now proposes we should follow. The very short timetables that have so far been suggested do not seem in the least adequate. Perhaps that will mean that we do not start the Recess as soon as we thought we might. Perhaps it will mean that we interrupt the Recess to come back to consideration of the Bill after a lull; or perhaps it will mean that we return to the matter after the Recess. It is unfortunate that the Recess is upon us because it adds to the difficulties of public presentation and, for that matter, of the consideration of the issues involved.

We have been greatly assisted by the very fast and excellent work of the Constitution Committee, the Joint Committee on Human Rights and the Justice Committee. We have been greatly assisted by their fast work. I have no doubt that your Lordships will give great attention to the detail in the Bill but we need to know what the future is for both parts of the Bill; the part that deals with expenses and the part that deals with Members' interests, which is much the more complicated and over which there is no urgency at all.

7:41 pm
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Lord Elystan-Morgan (Crossbench)

My Lords, as your Lordships will appreciate, I am the 24th speaker and the last man in, as it were, from the Back Benches. As last man in, if I can push a few singles past mid-off in a short period, I shall be more than happy. We all appreciate that two or three months ago a bombshell exploded. In consequence of that, one of the greatest parliamentary scandals of all time has occurred. It may not be, by a long way, the worst scandal that has occurred in the history of Parliament, but its effect is probably the most injurious development in at least the last 100 years—and possibly the last 200—in the life of Parliament. It is against that background that we must consider this issue.

In such circumstances, any Government would immediately say to themselves, "What must we do?". There was a case for immediacy and the Government have acted with immediacy, but immediacy means different things. Immediacy means the immediate acceptance of the problem, commitment to dealing with it and setting up of proper institutions to make that possible. Immediacy does not mean an immediate problem, an immediate answer and immediate legislation. That, I think, is exactly where the Government fail. They fail probably not on account of their faults but on account of their virtues—by believing that it was somehow possible to conjure a complete, wise and Solomonic solution to the dreadful situation that is now upon us. It is not a situation that can be met with logic because public anger does not operate logically. Public anger can very often be brought about by the very measures that we would impose on ourselves in this connection.

What should the Government have done? They should have set up the most rigorous inquiry into exactly what has happened and how it started. There have been very candid contributions from the noble Lords, Lord Crickhowell and Lord Jenkin. Whether it started exactly on their watch or earlier does not matter. It started some time in the last 30 years. It is what might be called the nettle problem—the failure to grasp a nettle that was there. The nettle was the realisation that practically every other Parliament in western Europe paid anything up to twice as much as British Members of Parliament were receiving. It was, happily, just after the time when the electorate released me from Parliament. MPs very properly went to their masters and said, "Raise our salaries". They were told, "It is not possible but we will think of a few alternatives, provided you are reasonable about them". That was the beginning of it all.

In addition to that examination, there should have been an examination of all the possible alternatives, to meet not only substantially, but psychologically, the anger that has now built up in the public against Parliament. All those alternatives should have been considered and, after that, there should have been the fullest consultation. I do not mean consultation between party leaders, which is sometimes rather conspiratorial, but consultation with the public. It is, after all, their Parliament and it is right that they should feel involved in dealing with the problem and, indeed, the whole issue. Then—and only then—should a draft Bill have been prepared. Once that Bill was prepared, it should have gone to one place, namely the Constitution Committee, for the most rigorous scrutiny that a Bill has ever had. We have done none of these things and have done the exact opposite. I say "we", taking responsibility—corporately, as a member of the community—for what the Government have done.

The noble Baroness the Leader of the House, for whom I—like every other Member of the House—have profound admiration and respect, tells us that this is not a Bill that in any way involves this House. That, of course, is technically true, but it is a Bill that massively affects and involves this House, which is exactly what we must consider. I accept what is now said about the intention to tag this House on to the Bill. Indeed, there is nothing in Clause 1 that refers specifically to the House of Commons. It could refer to both Houses. Be that as it may, I accept completely that there will be no tagging on now, nor indeed—as the noble Baroness the Leader of the House says—until there is some change in the constitution of this House. I suppose that must be many, many years hence.

Nevertheless, there will still be effects on the House as the upper Chamber of Parliament. There is bound to be an effect on its relationship with the courts. We have had the benefit of the most erudite and valuable opinion of the noble and learned Lord, Lord Woolf; we must accept him at his word. One of two things will occur. If the Bill remains as it is now drafted, there will be a flood of applications for judicial review. If that right is removed a very gross misjudgment will have been made, and a very gross injustice will have been imposed on those Members of Parliament. There may be halfway houses between the two situations. It is far too late at night to consider them now, but they are extremely complicated and each has its counterdifficulties.

So, what are we to do? I agree completely with everything that has been said by the noble Lord with regard to the amendment. It seems to me that the whole issue can be distilled to one question. Does anybody in the House not believe that, if the House—in dealing with this Bill of crucial constitutional significance, in the full glare of public contempt and anger—is able to avoid its responsibility of scrutinising the Bill line by line and word by word, the House will have abrogated its right to existence as a Second Chamber? That is the whole issue as far as the timing is concerned. How it is overcome is not all that important. It may be done by delaying the matter until the end of the summer vacation. It may be done by spending practically the whole of the period that we have left until 21 July on the Bill. It may be done by delaying the vacation by a few weeks. It matters not. If we fail to do it, we will have betrayed the very best interests of this place. If we do it, I believe that we will have properly earned a substantial measure of public respect.

I mention a very narrow legal point that has already been alluded to by many noble Lords; namely, the offences section and the proposal that Members of Parliament responsible for abuses in relation to expenses claims should be dealt with in a particular way. This is not at all a case of double-banking and unnecessarily creating an offence. The offences are contained in Section 17 of the Theft Act 1968—the offence of falsification of accounts—and in Section 2 of the Fraud Act 2006. The major point to remember is that the wording of those offences, in the Theft Act and in the Fraud Act, is almost identical to the wording of the offence in subsection (1) of the relevant clause. This means therefore that the elements of those three offences are exactly the same. There is not the slightest necessity or justification for this subsection. Why was it introduced and what will its message be? Its message is this: whereas ordinary citizens who commit these fraudulent offences are liable to 10 years' maximum imprisonment under the Fraud Act, and seven years' imprisonment under the Theft Act, there will be a very tame and limited tariff of one year's imprisonment, or six months or 12 months in the magistrates' court depending on whether that matter arose before or after the Criminal Justice Act 2003. That will be seen not as trying to lay better standards for Members of Parliament but treating them in a way in which the ordinary member of the public is not treated.

7:51 pm
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Lord Tyler (Liberal Democrat)

My Lords, as will be apparent from my speech, which I approach with great trepidation, I am not a lawyer. However, I have had experience in the other place as shadow leader of the Commons for some eight years. During that time I made a great many friends and had many contacts with Members on all sides. As the noble Lord, Lord Norton of Louth, properly said, many Members on all sides of that House are looking to us to save them from themselves. It would be an illusion if we were to expect and accept that this House must somehow just rubber-stamp what has happened in the other place. I shall come back to that point in a moment.

Let us not fool ourselves; there is a genuine dilemma. Everyone on all sides—this is apparent in your Lordships' House this afternoon—is keen to see a practical resolution to the various expenses scandals, which starts us on the long road of trying to renew public trust in both Houses of Parliament, and, indeed, in our political system. Anyone who works anywhere near this place, be they the most senior parliamentarian or a temporary contractor, knows that the mere mention of where we work gives rise at the moment to howls of derision. I think that the noble Baroness, Lady Perry of Southwark, used those words. It is a serious problem and we should not in any way underestimate that.

The public simply do not understand, or accept, that MPs or Members of your Lordships' House should be solely responsible for setting their own pay and conditions. Very few members of the public set their own salaries and still fewer can claim expenses underwritten by the honour of their signature alone rather than by the presence of a receipt. People are understandably urging that Parliament should meet the same standards as the people for whom we legislate. However, this is the dilemma: Parliament is sovereign. Deciding things is what Parliament does, so it is quite difficult to make laws to stop it deciding things. That is the centre of the dilemma which this Bill is all about. It is going to be very difficult to find a way in which Parliament can legislate so that it no longer has any say on this issue. For one thing, what will be the budget of the IPSA and who will set it? Is it not the primary responsibility of the House of Commons to be responsible for "supply"—for money? That is what it is for and has been for many centuries.

The Government, and in a sense the whole political establishment, are acting as though this is a new problem. That is why we are told that this is emergency legislation with special procedures. But this problem is, of course, not new. It is a pitiful situation in which we now find ourselves—the proverbial bulls lumbering around the china shop, with a piece of poorly drafted, ill thought-out legislation. I have not yet heard anyone say this afternoon or this evening that this Bill is in a proper form to go on to the statute book. As has already been said—legislate in haste, repent at leisure. It was ironic that on the very same day that the Commons could not find time to have a Third Reading of this Bill, a Bill was brought before that House to amend the Dangerous Dogs Act. I think that others have referred to this Bill as the Dangerous Politicians Act on the same basis; namely, that it is a knee-jerk and inadequate reaction.

My noble friend Lord Shutt has said that we on these Benches are not in the business of delay for delay's sake. All of us are here to do our job, and our job is to try to make sure that what returns to the other place is a great deal better than the Bill that has come to us. We simply cannot attempt to make an inadequate response to the critical situation we face. The Bill that leaves this House has to be seen as a great improvement on what we have at the moment, even if that is achieved through very drastic surgery. I assure the noble Lord, Lord Peston, that there is no question of us nodding through the Bill in its present state.

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Lord Peston (Labour)

My Lords, will the noble Lord recommend to his colleagues that they should vote for the amendment of the noble Lord, Lord Norton?

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Lord Tyler (Liberal Democrat)

My Lords, I shall come to that point immediately as it is raised. We believe that the amendments that are already on the Order Paper, and those which are likely to flow from today's debate, will require at least three days in Committee next week. That is our preference. If that preference is not met by the Government's business managers we will review the situation because we do not believe that it will be possible to achieve the radical surgery that this Bill requires in the time currently available. If it is the view of this House that it is appropriate to delay further consideration of this Bill for 10 or 12 weeks, I suggest that it is out of touch with public opinion. As has already been said by many Members of this House, the public consider that this matter needs to be addressed. That will not be achieved by accepting every bit of this Bill in its present form. Indeed, it has already become clear that it may be appropriate to amend the first part of the Bill to address the public's concern and leave some of the latter parts for the time being.

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Lord Crickhowell (Conservative)

My Lords, will the noble Lord tell the House what he and his colleagues will do if he is not this evening—before my noble friend Lord Norton has the opportunity to move his amendment—promised three days in Committee?

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Lord Tyler (Liberal Democrat)

My Lords, there are, of course, two further stages after Committee—Report and Third Reading.

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Lord Crickhowell (Conservative)

My Lords, I asked a perfectly straightforward question. The noble Lord said that he needs three days in Committee. The Leader of the House will wind up the debate and will be able to tell him whether he will get three days. If he does not, what will he do?

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Lord Tyler (Liberal Democrat)

My Lords, until we see how many amendments there are and your Lordships' House is given the opportunity to consider them very carefully in Committee, I do not understand how it is possible to decide whether this issue has been addressed.

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Lord Low of Dalston (Crossbench)

My Lords, can I sharpen the question a little? How will the noble Lord review the situation if the House has already passed a Motion this evening to put this Bill through Committee on a fast-track process?

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Lord Tyler (Liberal Democrat)

My Lords, the Leader of the House has already indicated in her earlier remarks that she is prepared to consider how much time is afforded for the Committee stage of this Bill. That seems to me a perfectly reasonable response to the concerns expressed on all sides of your Lordships' House. The point I am simply trying to make is—

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The Earl of Onslow (Conservative)

My Lords, if the Leader of the House were to get up now and say yes to three days or no to three days, that would ease the noble Lord's dilemma, would it not? If she were to say no to three days, he would then have to become unimpaled from the fence.

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Lord Tyler (Liberal Democrat)

My Lords, if the Leader of the House wishes to give an indication of what she is intending to do with the Committee stage of this Bill, it would indeed be very helpful—not just to myself, but to all Members of your Lordships' House.

Perhaps I might now consider some of the issues that have been addressed during the debate, because it is my duty to try and respond to some of those issues. The Leader of the House, in her response, may be able to make it clear how she intends to square the circle between the sovereignty of Parliament and our mutual desire—I hope it is a mutual desire, on all sides of your Lordships' House—that there be an independent initiative in the setting and enforcing of MPs' pay and allowances.

For example, will the adopted route be that the IPSA will put an entire scheme before Parliament to accept or reject, rather than have the present situation, from which I have suffered on a number of occasions, where the House has a mush of motions from which MPs can cherry pick carrots and then discard the sticks?

Clause 4 provides for the IPSA—

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Lord Bassam of Brighton (Chief Whip (House of Lords), HM Household; Labour)

My Lords, I ask that the noble Lord, Lord Tyler, is listened to respectfully in this. This is an important debate. The House is behaving somewhat unreasonably. Can we kindly listen to the noble Lord, Lord Tyler?

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Lord Tyler (Liberal Democrat)

My Lords, I have never had a government Whip come to my help in that way; I hope that is not a bad sign.

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 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,

"noteworthy that while the maximum sentence for the Fraud Act offences is 10 years imprisonment only 12 months is proposed for the new offences created by the bill. We do not support the retention in the bill of provisions creating criminal offences applicable to members only when offences in the general criminal law already adequately cover the misconduct in question".

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.

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 a 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
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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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":

"the nimble tread of the feet of Fred Astaire".

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 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, 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.

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The Earl of Onslow (Conservative)

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?

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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".

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?

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Lord Goodhart (Liberal Democrat)

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

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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.

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

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.

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

My Lords, if that is an undertaking—

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Lord Lester of Herne Hill (Liberal Democrat)

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?

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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.

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Lord Lester of Herne Hill (Liberal Democrat)

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

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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 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.

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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.

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Lord Tyler (Liberal Democrat)

My Lords, the noble Lord, Lord Kingsland, will be aware that a number of his noble friends pressed me on whether I and my colleagues will vote for the amendment of the noble Lord, Lord Norton. Will he?

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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.

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Lord Barnett (Labour)

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?

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Lord Kingsland (Shadow Lord Chancellor, Parliament; Conservative)

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.

8:30 pm
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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, this has been a truly extraordinary debate in which it has been a great privilege to be able to participate. I am very grateful to all the noble Lords who have participated and made contributions and for their personal warmth and their support. We have covered considerable ground and I acknowledge that there are a huge number of issues to be revisited in Committee and on Report.

Before I address many of the points of detail which have been raised this evening, I would just like to recall the points of principle on which I think most of us can agree. I believe that there is a clear public desire for reform of arrangements in the House of Commons. Given the public's legitimate concerns about the conduct of members in the other House, I think it is incumbent upon this House to act decisively and to build on the interim measures that the other place has already introduced.

I think that we can probably agree on the following fundamental points. First, the current system in the Commons for allowances and expenses must be replaced. We eagerly await Sir Christopher Kelly's recommendations and this is the Bill that will provide the formal structure to put those recommendations into practice. Secondly, a minimum requirement of the administration of the allowances and expenses system is that it should be subject to effective, independent scrutiny. Thirdly, it is important for securing renewed public trust that the House of Commons code of conduct on financial interests should be drawn up and overseen by an independent body. I know that that last point is slightly controversial but I think many people in this House would agree on it.

I will respond to many of the points made in today's debates. I have to say that I too am not a lawyer. I will do my utmost but I will also from time to time rely on Box notes. The noble Lord, Lord MacGregor, made a superb opening speech and as the noble Lord, Lord Kingsland, said, he set the tone of the debate and I am very grateful for that. The noble Lord, Lord MacGregor, referred to Mr Alan Duncan in the other place and the concerns he expressed, and he quoted him saying that the Bill must be right—that we cannot get it wrong. I acknowledge that there is still a great deal of work to be done on this Bill, but in my view the very fact that all the noble Lord's colleagues in the other place voted in favour of this Bill at Second Reading, and that they did not press the issue to a vote at Third Reading, means that Mr Duncan is content that this Bill is broadly right.

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Lord MacGregor of Pulham Market (Conservative)

My Lords, I am very grateful to the noble Baroness for what she said about me. I can assure her, and I have actually talked to some Members of the other place this afternoon who have been very anxious to make this point, that the fact that they did not vote at Third Reading does not mean that they are happy with the Bill. Many Members in the other place—including, I have been told, Members of her own party—want substantial changes and are looking to this House to make them.

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, it is a rum old business when the other place relies on this place, is it not? I suggest respectfully that in future if Members of the other place want to vote then they should vote.

The noble Lord raised the issue of MPs and outside interests, as have many other noble Lords this evening, including the noble Lord, Lord Crickhowell. Nothing in this Bill prevents a Member of Parliament having an outside interest but it does stipulate that those interests must be registered, as they are at present, in order that there is no ambiguity about an MP's motives for raising an issue when he or she is in the Chamber. I personally think that is absolutely right.

I thank the noble Lord, Lord Shutt, for confirming the intense nature of the cross-party talks. There has been much discussion this evening, or much innuendo, about the cross-party agreements and this, that and the other. There were intensive discussions between the parties and I believe that they were very fruitful. The Bill that we have before us, with all its imperfections, is the result of those cross-party talks.

I am now going to deal up front with the sunset clause, which was first raised by the noble Lord, Lord Shutt, and then by the noble Lord, Lord Kingsland, and others. I know that the noble Lord, Lord Kingsland, has either tabled, or is going to table, an amendment asking that there be a sunset clause. I think it would be improper for there to be a sunset clause which covered the whole of the Bill. It would be difficult to set up a new authority to advertise for people to be employed by this new authority without giving them security of employment and, indeed, without allowing this authority to start its work. I recognise however that some clauses could, and perhaps should, be revisited in a period of perhaps two years. I therefore suggest that we come back to this in Committee, but I do not think the Government would be opposed to reviewing some aspects of the Bill in a couple of years.

The noble Lord raised the pay of MPs. Of course I should clarify that this Bill will not alter the existing arrangements for sitting MPs' pay. It is determined by the SSRB and approved by the Commons, and IPSA will only administer the payment of salaries.

The noble and learned Lord, Lord Woolf, who I know cannot be in his place, and many other noble Lords suggested that the Bill was premature and that we should wait until Sir Christopher Kelly and his committee had reported. I stress again that this Bill provides a structural framework. Sir Christopher and his committee will provide the substance, and I believe it is entirely appropriate that the authority should be set up, with the chair and committee being appointed, while we await the report from Sir Christopher. As I said in my opening remarks, I believe that this is important for Members of the other place now and it is vital that everything is up and running and embedded before the next election so that the MPs who are elected to the next Parliament can get on with their work without having any more of these arguments and discussions about pay and allowances.

The noble and learned Lord, Lord Woolf, and many others, including the noble Lord, Lord Williamson, asked whether the Bill would upset the balance between the courts and Parliament. We do not believe that the Bill is incompatible with Article 9 of the Bill of Rights. It makes no specific provision to disapply Article 9 and will not change the relationship between Parliament and the courts. A court faced with a judicial review of IPSA functions would not be able to consider proceedings in Parliament, as that would not be possible under Article 9.

Many noble Lords, including the noble Lord, Lord Kingsland, asked why we should create a separate criminal offence in respect of allowances applicable just to MPs when we already have a criminal offence that would apply. Providing false information on a claim under the allowances scheme could amount to conduct already caught by an existing offence—that is, fraud by false representation under the Fraud Act 2006. However, this would be dependent on whether the elements of this offence were made out. A prosecution for fraud requires additional proof beyond reasonable doubt of dishonest intent and proof that the purpose was to make a financial gain. Fraud is a more serious offence which carries a greater maximum penalty than that envisaged in the Bill, which, as many noble Lords have said, requires only knowingly providing false information. I hear what the noble Lord, Lord Kingsland, says and I note the amendments that he has tabled. Before Committee, I shall certainly reflect on his suggestion to get rid of the whole of Clause 8. However, of course I cannot make any concessions here at the Dispatch Box and it would not be right for me to do so.

I thank the noble Lord, Lord Goodlad, for his excellent reports. They have of course caused me and the Government enormous problems but I still believe that they are excellent. I especially pay tribute to his report on fast-tracked legislation, which I hope will guide us in the future. Of course, I disagree with his view that the Bill will not enhance public support. I believe that it will because the public are frustrated with what is going on and they do not understand the niceties of our debates and our scrutiny. They want good legislation but they want action, and this Bill provides us with that.

I am grateful to the noble and learned Lord, Lord Howe, for earlier giving me a copy of his document written in 2000. I always listen to him very carefully due to his vast experience, and I wholeheartedly agree that Members of both the Commons and the Lords should give obedience to the unenforceable. However, that has patently not been happening, and that is why we have this Bill before us.

My noble friend Lord Peston and others referred to the Statement of my right honourable friend the Secretary of State for Justice. In his concluding remarks, the noble Lord, Lord Kingsland, also went back to the question of whether the Bill would ever be applicable to the Lords. Again, I categorically state that this Bill will not be used as a model for your Lordships' House, and there is no intention of this or any similar Bill applying to this House. We will not apply this legislation to this House. Having said that, I add that what I say at this Dispatch Box cannot bind future Parliaments, but that is the view of this Government. I am being honest with your Lordships.

My noble friend Lord Peston referred to the Constitution Committee's reports, which, as I said, are excellent. He, like the committee, suggested that the Bill should not be fast-tracked and he referred to deals and stitch-ups. As I said, there were no deals; the position arrived at was consensual.

Noble Lords:

Oh!

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, that is true—I wish that noble Lords had all been flies on the wall.

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Lord Peston (Labour)

My Lords, has my noble friend listened to the speeches from the two opposition Front Benches? There is no deal. Did she not listen to what they said?

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, I listened respectfully to the Front Benches and to all noble Lords in this House, as I always do. There was no deal; there was a consensual position. I believe that the Front Benches of all parties—

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The Earl of Onslow (Conservative)

My Lords, was there not a consensual agreement between Molotov and Ribbentrop in 1939?

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, I do not think that that remark is worthy of a reply.

I shall turn to the noble Lord, Lord Higgins. Of course, he is absolutely right when he says that Members of the other place do not understand your Lordships and your Lordships' House. It is incumbent on us all to try to ensure that there is more knowledge about this place in the other place. I hear what the noble Lord and so many others have said about the desirability for more time to scrutinise the Bill. I shall return to that shortly.

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Lord Goodlad (Conservative)

My Lords, the Leader of the House said that I had said that the Bill would be counterproductive in its purpose of reassuring public opinion about Parliament. I think that what I said on behalf of the Select Committee was that it would be counterproductive in terms of influencing public opinion if it were given inadequate time for consideration.

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, forgive me if I misquoted the noble Lord. I beg your Lordships' pardon.

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Lord Lester of Herne Hill (Liberal Democrat)

My Lords, in her speech, will the Leader of the House be turning to the human rights implications raised by me on behalf of the committee?

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, my very next page says "Lord Lester". The noble Lord proposed that there should be a tribunal. My note says that the IPSA, an independent body in itself, with a former judge as a member, has limited powers. It can make a direction to repay an allowance or update the register, or it can recommend additional sanctions to the Commons Committee on Standards and Privileges. Enforcement is left to the House of Commons and the Commons Committee on Standards and Privileges. That means that enforcement will not happen without the House of Commons saying so. We have committed to considering whether the commissioner should simply make a finding of fact so that he has even fewer functions. However, I undertake to look into the proposal made by the noble Lord that there should be a tribunal.

The noble and learned Lord, Lord Mayhew, referred to the word "privilege". This might seem a silly point but, like him and so many others in this House, I deeply regret that the word brings with it so many misconceptions. That is one of our problems. It is a hugely important concept and it is a right that protects parliamentarians and, through parliamentarians, their constituents. Like all noble Lords, I am concerned about that.

I agree with the noble Lord, Lord Armstrong of Ilminster, that we have to do something to confront the evils facing the House of Commons. I listened to his proposals with care but I believe that the Bill helps to confront some of those evils.

I understand the view of the noble Lord, Lord Jenkin of Roding, that we should rescue the Commons from itself. I believe that this Bill is what the Commons wants. The hard-working Members of the other place are suffering from the terrible opprobrium that has fallen on them and their families in the past weeks. They know far better than we do how ghastly it has been and what needs to be done.

I say to the noble Lord, Lord Roberts of Conwy, that hindsight is wonderful. I agree that action should have been taken earlier, but that is easy for us to say now. When he talks about the dominance of this Government, I respectfully remind him that his own Government were dominant for 18 years.

To my noble friend Lord Barnett I say that this is not a response to the media. It is a response to the concern of the public that may have been engendered by the media. A little flame was ignited and, now that that public flame is there, we have to do our best to deal with it.

I have huge respect for the noble Baroness, Lady Perry of Southwark, and I completely agree that most Members of Parliament are upright, hard-working men and women. They work their socks off for their constituents. However, I do not agree that the public concern is temporary. Public life has changed fundamentally and we have a duty to deal with the situation as we find it now.

Of course, I agree with the view of the noble Lord, Lord Goodhart, that scrutiny is needed. I note his views about the reporting chain from the commissioner to IPSA and to the Committee on Standards in Public Life. I undertake to look at that carefully, as I will the many other issues raised by the noble Lord.

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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, I was ill reading my words. Forgive me. I know exactly what the noble Lord was referring to.

The noble Lord, Lord Neill of Bladen, asked whether IPSA and the commissioner would not be able to perform their functions because the provision on privilege in the Bill as introduced disapplied privilege to permit IPSA and the commissioner to perform their functions. The prohibition on questioning proceedings in Parliament in Article IX of the Bill of Rights applies to,

"any court or place out of Parliament".

Neither IPSA nor the commissioner is a court. "Place out of Parliament" should not be taken literally. It obviously does not prevent newspapers or the public from commenting on Parliament. In 1999, the Joint Committee on Parliamentary Privilege stated that "place out of Parliament" includes tribunals where witnesses give evidence on oath but not non-statutory tribunals or inquiries.

I note the views expressed by the noble and learned Lord, Lord Lyell of Markyate, about the need for salaries to be increased to take account of second home expenses. I am sure that the other place will come back to that, but that is a matter for it.

The noble Lord, Lord Norton of Louth, said about the nature of the public anger that it is the allowances themselves, not the way in which they are administered, that is important. Sir Christopher Kelly's committee is looking at the allowances, but the Bill is necessary to provide the structure so that, when the new allowances system is brought in, it can be implemented in the best possible way.

The noble Lord, Lord Williamson, posed a number of questions. I shall answer just one of them. Yes, the Bill carefully separates the functions of IPSA and those of the commissioner. Both IPSA and the commissioner have their functions conferred separately on them. They are established separately. The only link is a duty on IPSA adequately to resource the commissioner. Paragraph 7 of Schedule 2 is about separating the administrative functions of IPSA—for example, setting the allowances scheme. I will respond to the noble Lord in writing.

To the noble Earl, Lord Onslow, I say that I have no illustrious ancestors. I bought all my own furniture. I came from peasant stock and mining stock, but my stock were also men and women of integrity. They, like me, had a sense of history. Like the noble Earl, when I come into this place, I feel that it is a very special place. Because I feel that it is a special place, and because this Parliament belongs to the ancestors of both of us, and to the people of this country, who are so angry, we have a duty to deliver a Bill that will help to promote understanding and assuage that deep anger.

I agree with much of what the noble Lord, Lord Cope, said about the excellent work of the Constitution Committee and I assure him that I have listened throughout the debate.

I say to the noble Lord, Lord Elystan-Morgan, that nobody thinks that this is a total solution. This is part of the solution, along with Sir Christopher Kelly's committee, the work by Sir Thomas Legg and many other things that are now being implemented in the House of Commons.

The noble Lord, Lord Tyler, is right to say that the public do not understand why MPs should be solely responsible for their pay and conditions. That is why the Bill is so important. He was right to mention the excellent paper written by the Clerk of the Parliaments, to whom I pay tribute. I will come back to the noble Lord in writing on many points. Is there a difference between dishonesty and knowledge? There is a great difference between the elements of dishonesty and knowledge of an offence. Dishonesty requires a higher threshold for the prosecution to overcome and is determined by a two-stage test.

I think that I have answered many of the points raised by the noble Lord, Lord Kingsland. I love dancing and I wore the appropriate shoes today. Yes, of course it is our duty to scrutinise and improve the Bill and I am determined that that is exactly what this House should and must do. I have heard what many noble Lords have said about the arrangements that we have proposed to debate the Bill before the Recess. I have really listened and I know that the House wants more time to scrutinise the Bill. I respect those views and, while I may not go quite as far as the noble Earl, Lord Onslow, suggested, I undertake to go away and discuss the arrangements with the usual channels in the light of what has been said today to try to find more time. I have to say that we have very few days available to us and there is a great deal of business still unfinished, but I note what has been said seriously and vehemently in this House today. I assure the House that, whatever happens, the Government will bring forward their amendments for the Committee stage in very good time so that noble Lords have ample time to reflect on them.

This is an extremely important Bill. I have listened to and noted the views of noble Lords. I believe that passing the Bill as expeditiously as possible is the right thing to do. My feelings are clear; the feelings of the Government are clear. I accept that the Bill requires an awful lot more work, but I know that this House is the right place to undertake that work and that, with its assistance, the Bill will be greatly improved. I commend the Bill to the House.

Bill read a second time.

Committal Motion

Moved by Baroness Royall of Blaisdon

That the Bill be committed to a Committee of the Whole House.

8:56 pm
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Baroness Royall of Blaisdon (Chancellor of the Duchy of Lancaster, House of Lords; Labour)

My Lords, I beg to move that the Bill be committed to a Committee of the Whole House. Normally, as this House knows, that would be all that I would say as Leader at this point. However, with the amendment from the noble Lord, Lord Norton of Louth, we are in unusual territory, and I would like to take this opportunity to make a few short points.

As I have said several times this afternoon, I am aware of the work done and the points made about the Bill, specifically about its timing, in the Chamber this afternoon and by your Lordships' Constitution Committee. I understand the concerns and the genuine desire to see legislation taken through Parliament in a measured and considered way. However, I am also aware, as anyone in this House or, especially, in the other place must be, of the strength of public feeling on these issues and the desire not just for reform and improvement but for that reform and improvement to be put in place as soon as possible. The public want action and they want it now. The Constitution Committee wants due process properly considered. However, I do not believe that the two positions are incompatible. It is not impossible to bring the two positions together, which is exactly what the Government are trying to do. We are trying to strike the right balance between the genuine public desire for urgent reform and the equally genuine constitutional call for due process. I believe that, in the arrangements that we are proposing for the Bill, we are indeed striking that balance and striking it correctly. Accordingly, I urge the House to pass the Motion that I am moving.

Amendment to the Motion

Moved by Lord Norton of Louth

At end to insert "and that the Committee shall not meet until 14 days from the date of Second Reading, in accordance with the House's recommended minimum intervals between stages of bills".

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Lord Norton of Louth (Conservative)

My Lords, I made the case for the amendment in my speech earlier in the debate and I do not propose to repeat that speech. All I will say is that I think that the case for the argument that I advanced has been made considerably by the speeches that we have heard this afternoon. They have convinced me that this is the right step to take. As I argued, I believe that fast-tracking the Bill would be counterproductive, perverse and dangerous. The noble Baroness the Leader of the House said that the public want action. I am sure that that is true, but the danger is in taking action in a way that appears to be action for the sake of action. What the public deserve is good legislation. It is up to us to ensure that we deliver that. We need to get it right and that takes time.

Photo of Lord Foulkes of Cumnock

Lord Foulkes of Cumnock (Labour)

My Lords, I have not spoken until now, but the noble Lord says that he made his points earlier. Since he made his speech, however, the Leader of the House has given a number of important assurances. In the light of those and the extra time that will be made available over the next two weeks, does he not think that the challenge to this House is to make this legislation proper and good? That can be done over the next two weeks. In the light of the assurances given by the Leader of the House, will he not consider withdrawing his amendment?

Photo of Lord Norton of Louth

Lord Norton of Louth (Conservative)

My Lords, I am not sure whether the noble Lord heard my speech, but the assurances from the noble Baroness have not addressed the points that I made. I hear what she said about going away and seeing what she can do and, like other noble Lords who have spoken, I have the utmost respect for her; she does great work on behalf of the House and I trust her in everything that she says. However, that has not answered the points that I made earlier, which have been reinforced by the speeches made in this debate. We need the time to get this right and I invite the House to ensure that we have that time in accordance with our normal rules. I beg to move the amendment.

Division on Lord Norton of Louth's amendment

Contents 88; Not-Contents 110.

Amendment disagreed.

Division number 1

See full list of votes (From The Public Whip)

Main Motion agreed.