Members' Expenses

Bill Presented – in the House of Commons at 3:49 pm on 3rd July 2008.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence 3:49 pm, 3rd July 2008

I beg to move,

That this House
welcomes the Third Report from the Members Estimate Committee: Review of Members Allowances (House of Commons Paper 578);
endorses in particular the recognition of the need for a robust system of scrutiny for parliamentary allowances and the accompanying emphasis in the Report on improved audit;
and is of the opinion that—

(1) Recommendations 1-5 (audit and assurance), Recommendations 6 and 7 (scope of overnight expenses), Recommendations 9 and 10 (Communications Allowance), Recommendations 11 and 12 (travel), Recommendations 13 and 14 (overnight expenses), Recommendation 15 (resettlement), and Recommendations 16-18 (other SSRB recommendations) should be implemented, subject to decisions of the Members Estimate Committee with respect to their introduction and application;

(2) the principle of central funding of constituency office costs, as set out in Recommendation 8, should be approved and asks the Members Estimate Committee to prepare a detailed proposal accordingly;

(3) the timetable for implementation of the Recommendations set out in paragraph 257 of the Report be endorsed; and instructs the Members Estimate Committee to report from time to time on the implementation of this Resolution.

The motion invites the House to approve the recommendations made in the report on Members' allowances produced by the Members Estimate Committee. It has been just over five long months since the House instructed the Committee on 24 January to consider the recommendations in the Senior Salaries Review Body's July 2007 report on Members' allowances. Members will recall that, no sooner had that instruction been given than the House was plunged into controversy following the irregularities in staffing practices of one hon. Member, the atmosphere that that created, and the judgments made by the freedom of information tribunal shortly thereafter.

It was decided at that point that the review being conducted by the Members Estimate Committee should be a more thorough review, that it should look at every aspect of Members' allowances and that it should be a root and branch review. I am not necessarily suggesting that we have cut off every branch; that is for others to judge. The report runs to 271 paragraphs, and it follows that no one—not even all six members of the Members Estimate Committee—will think that all 271 of those paragraphs are perfect. The six members of the Committee have had to make compromises between ourselves in order to reach consensus.

The task that we were set at the beginning of the review was to balance the interests of Members of Parliament with the interests of taxpayers. I do not need to tell Members that the impression created in the national media has not reflected well on this House as an institution or on its Members. The public believe—quite erroneously, in my view—that our allowances are excessive, that there are irregularities in the way in which Members claim those allowances and that the systems in this place are lax. I repeat that those are not my views, but that is the impression out there among the general public, and that is the context in which the Members Estimate Committee has conducted its investigations and the basis on which we have brought forward our recommendations.

We have a clear need to restore the reputation of this House. Thus it is that our principal recommendation is that we need a more rigorous system of audit and assurance, possibly going rather further than the strict requirements that an audit would deem necessary. We need to do this in the interests of trying to restore public confidence in this House. The events of earlier this year have adversely changed people's impression of our arrangements for these allowances. Frankly, nothing will ever be quite the same again, not least because the freedom of information regime now means that we will publish, right down to receipt level, every claim that every Member makes against every allowance.

Over the past five months, we have been grateful for oral, written, formal and informal comments from colleagues. As I have said, we cannot expect to make everyone happy, but we have done our best to take on board as many of those representations as we could. We are also grateful to the outsiders who have come in and given evidence and advice to us. They include the Comptroller and Auditor General in the National Audit Office, Her Majesty's Revenue and Customs, two firms of accountants, the Institute of Chartered Accountants' practice assurance experts, and our own officials within the House.

When we published our report last week, we made it clear that tougher rules on the way in which we police our allowances were essential to putting right the problems that some people detect and the impression that abounds among the general public.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will just finish laying out the recommendations, then I will happily give way to the hon. Gentleman.

Members of Parliament are unique in certifying their own expenses. The Committee was advised by all those who gave evidence to us that this is simply not a practice that takes place in other walks of life. Even the chief executive of a plc will have an expense claim certified by the chairman of the board. The belief that a Member's signature reflects the fact that a gentleman's word is his bond is, regrettably, not one that the rest of the country is prepared to put its faith in any longer. The proposed system of practice assurance will for the first time allow checks to be made against the basis on which Members have made their claims and the uses to which the resources they have claimed have been put.

I encourage Members to read closely what is being suggested. We are not employees of this House but independent office holders. Our situation is comparable in many ways to that of professionals, whether as partners or in individual practices. The assurance system proposed in the report places us on a similar footing to professionals who practise either in partnership or as sole practitioners. Our intention is that there should be better record keeping and accounting and that if Members are doing anything at all irregular, they are more likely to be doing it through inadvertence than malfeasance.

We thus view these proposals as a soft knock on the door and as a helpful advisory service to be provided by professionals trained to do this in other walks of life, who will come in to assist Members. I want to clear up at this point any suggestion that the proposed practice assurance model is intended to go any further than deal with Members' claims and their use of public money.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will give way in a few moments.

It has been suggested, for example, that the practice assurance teams might come in and start telling Members how to go about their political business, how they should be serving their constituents, how they should order their political priorities and so forth. Nothing could be further from the truth. This is targeted solely at how Members are making claims and the uses to which resources allocated to them from public funds are put. I hope that I have made that clear.

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Photo of David Winnick David Winnick Labour, Walsall North

Let me turn back to what the hon. Gentleman was saying a little earlier about the lack of public confidence in the way we claim our allowances. Does the hon. Gentleman not recognise that the manner in which the House of Commons Commission went to the High Court without any authorisation from the House whatever—there was no motion of any kind—is hardly likely to bolster public confidence in the system of allowances, much of which is absolutely justified?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I do not accept what the hon. Gentleman says. The principal argument advanced at the High Court was that Members' private addresses should not be put into the public arena, and Members will have an opportunity to express their opinions on that subject later in today's debate.

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Photo of Ian Lucas Ian Lucas PPS (Mr Liam Byrne, Minister of State), Home Office, PPS (Mr Liam Byrne, Minister of State), HM Treasury

The hon. Gentleman has referred on a number of occasions to the phrase "practice assurance", which I believe is a deeply unfortunate one. He seems to be saying—will he confirm it—that the audit arrangements will extend only to financial assurance, not to practice assurance. Practice assurance goes way beyond audit and financial assurance. Does he agree that a much better, more accurate and less ambiguous description would be "financial assurance", and will he use that term from now on?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

Let me confirm that it is the financial practice, not the political practice, that the assurance team will be coming round to check, but I would not be satisfied to call it simply "financial assurance" for this reason: the scandal that I mentioned earlier related to the employment and use of staff. With respect, that went a little wider than just financial matters, but in no sense whatever would the assurance teams involve themselves in matters of political practice, which are entirely a matter for Members' judgments. We are talking about the usage of considerable sums of public money—and nothing else.

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Photo of David Clelland David Clelland Labour, Tyne Bridge

Will the hon. Gentleman tell the House how much all this will cost and how much it will save?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

How much it will save time alone will tell. I hope that it will save and improve the reputation of the House and improve the quality of British democracy. If it does that and if in a couple of years we have convinced people that any problems that there were are being ironed out, it will have been worth it. The question of how much it costs will depend on terms of contracts that we let, what people bid in at and what scale of work is done. Some estimates are included in the appendices—

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will press on, with respect to the hon. Gentleman, so that more Members get the opportunity to contribute to the debate.

The purpose of introducing the principle of practice assurance is to put Members of Parliament on the same footing and the same basis as other members of the professions and others in other walks of life. One thing that we were asked to do at the outset of the process was to examine practice elsewhere and ensure that the practice of Members of Parliament was analogous to that of those in other professions. A mindset that Members of Parliament are in some separate world of their own and that different rules apply to us than to everybody else has got the House into the sort of trouble that we have at the moment.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will press on. Introducing this system of practice assurance is intended to put us on the same footing as other professionals in other walks of life.

The rules of engagement will be drawn up by Members of Parliament. The rules against which our practice is judged will be drawn up by Members of Parliament. The contract with the professionals who carry this out will be set by Members of Parliament. The House will still have domain over its own rules and regulations and the practices that it puts in place to police them. This is not something being imposed from outwith, but we are using the expertise of professionals in other walks of life so that they can come in and ensure that we are adopting best practice in 2008.

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Photo of Helen Jones Helen Jones PPS (Rt Hon Dawn Primarolo, Minister of State), Department of Health

The hon. Gentleman will accept that outside the House proportionality applies. Therefore, will he explain to the House how much this system will cost and how much he expects to save for the money spent?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

That question was asked a moment ago and I repeat what I said then. The objective of the exercise is to restore the reputation of the House and its Members. We cannot say how much it will save until we have tried the system and seen what it will save. What it will cost is laid out in the report and I invite the hon. Lady to have a look at it.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

No, I am going to make some progress.

The second part of this is the question of formal financial audit. Our proposals involve the National Audit Office extending the scope of its audit of the House accounts and bringing it up to the general standards of the public sector. The NAO will continue its practice of sampling transactions and systems, but it is not the role of the external audit of our accounts to test the behaviour of Members. For the first time, the NAO will have the power to look behind the Member's signature, and it has also indicated to us that reducing the receipt threshold will enable it to give assurance on the House's accounts on a comparable basis to that which it offers on the accounts of other public sector bodies.

An amendment has been tabled that would knock that provision out. I invite the House to consider that carefully. We have before us a recommendation that would put the audit of the House accounts on the same basis as that of other public bodies. If we vote it down, we will knowingly vote to have our accounts on a less adequate basis than those of the rest of the public sector. In my view, and in the light of the challenges that we have experienced to the reputation of the House, it would be utterly catastrophic for us to do that knowingly and having taken advice from the NAO.

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Photo of Patrick Cormack Patrick Cormack Chair, Northern Ireland Affairs Committee

I go along with much of what the hon. Gentleman says, and as a former member of the Commission and of the Members Estimate Committee I understand the difficulties of his task. I am grateful to him and his colleagues. I can understand the £25 threshold, but I am told by people in the House's own accounts department that requiring a receipt for everything—be it £1, £2 or 7s/3d—will cause enormous and disproportionate cost. Why was that recommendation made?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

On 1 April, the receipt threshold was reduced from £250 to £25. That change has involved a far greater adjustment of the administrative load than the further—quite small—reduction from £25 to zero.

When we made that change, it was I who was sent to the media studios. The interviewers did not say, "This is entirely commendable. The House of Commons has reduced its receipt threshold from £250 to £25." The first question on the lips of every interviewer was, "Why are you sticking at this £25 threshold when the rest of the world expects receipts for everything?" [Interruption.] According to the evidence that we have been given, that is the case in many other walks of life.

There is a £30-a-day subsistence allowance for Members, also based on the practice that we have observed in other professions—the civil service, for example. We do not expect receipts for that. It is a small sum, and the way in which Members use it is at their discretion. Members have complained that they would not be able to get a receipt for the purchase of a newspaper or a cup of coffee. Those are exactly the sort of purchases for which the £30 daily subsistence rate is meant to provide. It is true that the receipt threshold is going down to zero for most purposes, but a small amount is still left to the discretion of Members.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will, but then I must make a little progress.

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Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

I entirely support what the hon. Gentleman has been saying, but those in almost every other walk of life must submit a receipt for almost every item of expenditure. Can he explain the rationale for a £30 daily subsistence which will not involve receipts, and can he also explain why it is not being given to all Members of Parliament?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

The £30 subsistence allowance is based on the subsistence arrangements in other professions, which are recognised by Her Majesty's Revenue and Customs. HMRC does not allow people a tax-free subsistence rate unless they are staying away from home. I think the hon. Gentleman is asking me about those who have only one home. He will have noted our proposal to increase the London subsistence rate and make it a London costs allowance. If he works out what that will deliver to him, net of tax, he will find that it bears a close resemblance to the subsistence allowance that is on offer to other Members.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I will give way to my hon. Friend, but then I shall try to finish my speech so that others can contribute.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am grateful to my hon. Friend. I support the most robust of responses, which I think is what his Committee proposes. Can he tell us what is the difference between the proposal in his motion that the report

"should be implemented, subject to decisions of the Members Estimate Committee with respect to their introduction and application" and the amendment tabled by Mr. Touhig, which appears to delay some changes until October this year, some until April next year, some until April 2010, and some until the end of the next Parliament? How soon will my hon. Friend's proposal be implemented? I want it to be implemented tomorrow, if that is possible.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I do not think it is possible to introduce such systems in the middle of a financial year. I believe that the earliest point at which we can implement most of them is 1 April next year, and that some of the more complex arrangements will take a little longer than that.

I have seen my hon. Friend's amendment asking for the proposal for central procurement for constituency offices to be brought forward, and inviting the Members Estimate Committee to produce a comprehensive plan before 22 July. With great respect to my hon. Friend, I must tell him that that is simply not possible. We are very keen for the system to be sound and reliable, and over the next year or 18 months, during which time some Members' leases will expire, we will seek opportunities to pilot the new system so that we can get it right for the majority of Members. That will take a little time.

My hon. Friend invites me to contrast the arrangements proposed in our report with what is proposed in the amendment tabled by Mr. Touhig. As I said earlier, it is impossible to please all the people all the time, and I do not believe that any one of the six members of the Committee is entirely happy with every last detail of the report. However, we have to decide collectively what is in our best interests. The problem with the amendment in the name of the right hon. Member for Islwyn is that it helps itself to the spoonful of sugar, but declines to take the medicine. The package that the report proposes was meant to be just that—a package, some aspects of which are to the advantage of Members, but in a context of there being greater controls that are more visible so that the public can see them and therefore understand. If we help ourselves to the goodies but decline to take the medicine, the danger is that any progress that we are making in improving public perceptions of our practice and in improving the reputation of the House will be fundamentally undone. That is the danger if we take the sugar but do not take the medicine.

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Photo of Don Touhig Don Touhig Labour, Islwyn

Let me tell Simon Hughes that the dates in the amendment I have tabled have not been made up, but that they are taken from the Members Estimate Committee report, so there is no difference between us as far as that is concerned. I hope that reassures him.

Nick Harvey says the amendment would lead to our taking the spoonful of sugar, but not the medicine. That is a very lyrical turn of phrase, but will he tell us why the main thrust of this report involves an audit system that is uncosted? I sit on the Public Accounts Committee, and I am sure that this will cost the taxpayer millions. Does not the Members Estimate Committee have a responsibility not to waste public money?

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

It is not true to say that it is uncosted. We have explained in the report the possible range of costs, but in any event the cost of this system will be less than 0.5 per cent. of the Members' estimates. Surely a sum of less than 0.5 per cent. of the total cost of the allowances Members are drawing is a price worth paying for the purpose of trying to restore the reputation of this House?

Members will have seen over the course of the past week the media reaction to this report, and they will have seen in particular the response from the Committee on Standards in Public Life. It is perfectly clear to me that if the amendment in the name of the right hon. Gentleman is passed, any sense that we are putting our house in order—that we will have transparent systems of financial control that the rest of the world will recognise and respect—will be undone, and in no time at all Sir Christopher Kelly and his standards committee will be conducting their own separate inquiry, which they have thus far concluded they do not feel they need to conduct.

The right hon. Gentleman accuses me of being lyrical, but I believe that what I say about his amendment is accurate. It will go along with central procurement for constituency offices, which will cost a lot of money, and it happily cashes in on the fact that we are not suggesting reducing the value of the incidental expenses provision, as was suggested by the Senior Salaries Review Body. However, when we suggest having a light-touch system of financial control to try to restore the reputation of the House and faith in the systems we have, he does not want to take that fairly light and sweet medicine.

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Photo of Don Touhig Don Touhig Labour, Islwyn

Is it not a fact that it will cost £1,200 a day to bring in fat cats from the City accountancy firms to spend three days a year going around examining Members' office cost allowances? The hon. Gentleman is like Ethelred the Unready: pay them gold and they will run away. That is what he is trying to do: he is trying get rid of a bad headline by throwing public money at it, and thereby wasting that money.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

The comment about being lyrical could be employed there, too. The proposals include measures that are intended to try to improve the reputation of the House, and we believe that they constitute a balanced package. I know that some Members are unhappy that we are getting rid of the so-called "John Lewis list"— [Interruption.]

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

Let me rephrase my point, Mr. Speaker. There are those who are upset that the report recommends that Members ought not in future to be allowed to purchase items with their additional costs allowance. I think that they will have the devil's own job if we continue with the existing system. In an era when freedom of information requires every receipt to be perused by the public, they would have a difficulty in justifying the purchase of televisions, fridges, three-piece suites, curtains, carpets and whatever else. Every time that Members make any such purchase, it will not only be for the individual Member to defend it to his local paper; the reputation of the House and the impression given of us all will be demeaned by the process of that information coming out and being debated and haggled over in the public press.

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Several hon. Members:

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Photo of Jimmy Hood Jimmy Hood Labour, Lanark and Hamilton East

I thank the hon. Gentleman for giving way. Did his Committee at any time consider the Member of Parliament who has to spend thousands of pounds out of his or her own pocket, and then gets into trouble and criticised for trying to claim it back? Is not a better way to have fewer receipts and a system of audit and accounting, in which MPs do not have to spend as much of their own money? Let me give an example. I was away on NATO assembly duty last week and had to pay $1,500 out of my own pocket just to be on duty. That is outrageous, and this House should be looking at what it can do to help Members, so that they are not laying out their own money and having to claim it back.

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I am grateful to the hon. Gentleman. A number of Members did make the point to us during our consultations that, across all the allowances, they end up having to shell out quite a lot of money up front and that it takes some time to get it back. I am very sympathetic to what he says and we continue to look at that as a live issue. I am sorry that we have not found a solution at this time, but we have absolutely logged the problem and we continue to explore ways of assisting with that.

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Several hon. Members:

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Photo of Nick Harvey Nick Harvey Shadow Secretary of State for Defence

I have been speaking for a lot of this 90-minute debate, and I think it right that I shortly allow other Members to speak.

I commend the report, which provides a balanced package. We bring in for the first time systems that the rest of the world would recognise. We are not intending to string up at the scaffold every Member who is found to have had the smallest administrative mishap. There will be a balanced approach. Helen Jones, who intervened on me earlier, said that things need to be proportionate and that is exactly what we intend them to be. Clearly, as we work our way through this system and as it matures, we will find a way of dealing with these matters that is fair to Members. The rules will be set by Members; the terms of engagement for those coming in to do the studies will be set by Members; the findings of those assurance teams will be reported to Members; and only if it is felt that something is of so severe a nature that it reflects on the standards will it be referred to the Parliamentary Commissioner for Standards and the Standards and Privileges Committee.

However, everybody involved in this—the Standards and Privileges Committee, the commissioner, the Members Estimate Audit Committee and the practice assurance teams—will have to work out together how we are going to deal with these matters in a proportionate and graded way. I do not think that any Member will have anything to fear from this system. On the contrary, they will find it helpful, and within a short time we could have made substantial progress toward restoring the reputation of this House. However, if we do not take this step today and we vote through the amendment, we will be absolutely back to where we were in the dark days of January and February, and back to the sort of media coverage and public hostility that was being expressed towards this House.

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Photo of Harriet Harman Harriet Harman Chair, Modernisation of the House of Commons Committee, Minister of State (Government Equalities Office), The Leader of the House of Commons , Member, Labour Party National Executive Committee, Party Chair, Labour Party, Deputy Leader of the Labour Party 4:18 pm, 3rd July 2008

I want to speak briefly in support of the motion on Members' home addresses, standing in my name. I have made my position clear on many occasions in this House and I have not changed my view. To do our job properly, we have to be able to speak freely in this House—without fear or favour. We must be able to say what we believe to be true about controversial issues, without feeling that to do so would put ourselves or our families at risk. If our addresses are published on the House of Commons website, it will inevitably result in some Members being inhibited about what they say in the House. If Members want to publish their own addresses, that is a matter for them, but I advise against it, for the same reason that I believe that it should not be required for the House authorities to put our addresses in the public domain.

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Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

The Leader of the House will know that I have campaigned on the issues of MPs' expenses and freedom of information, but it is perfectly possible to campaign for freedom of information and support the point that she is making. It is important that MPs have confidence that they will not be subject to improper and perhaps irregular approaches by members of the public. Keeping MPs' addresses confidential is important to that.

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Photo of Patrick Cormack Patrick Cormack Chair, Northern Ireland Affairs Committee

Many of us who are concerned about this matter—I pay tribute to my hon. Friend Dr. Lewis, who has played such a prominent part in the campaign—are concerned not so much for ourselves as for our families. Frequently, a wife, husband or partner is at home alone when a Member is here. If addresses are published, that can be an invitation to ne'er-do-wells.

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Photo of Harriet Harman Harriet Harman Chair, Modernisation of the House of Commons Committee, Minister of State (Government Equalities Office), The Leader of the House of Commons , Member, Labour Party National Executive Committee, Party Chair, Labour Party, Deputy Leader of the Labour Party

I absolutely agree with the hon. Gentleman. I, too, pay tribute to Dr. Lewis for the work that he has done. I know that, like me, he believes that the problem is about not just current threats but those in future, either to an individual Member—whether a threat from what is described as a fixated individual or a threat to their involvement in a controversial issue—or to all Members from circumstances that pose new and unforeseen dangers. That could be a new terrorist threat focusing on Parliament.

Once someone's address is a matter of public information, they cannot make it private without moving. I have had the opportunity to have discussions with the Chairman of the Joint Committee on Security, my right hon. Friend Mr. Brown, and with the House's security co-ordinator. I thank them both for their important work and their advice to me as Leader of the House. The security co-ordinator takes the view that it would be a risk to put in the public domain our addresses, or anything that would lead to the identification of our addresses, such as our travel plans.

This is also about the security of Members' families, as Sir Patrick Cormack said, and the security of the public. The publication of our addresses would put at greater risk those who happen to live in the same block of flats as a Member.

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Photo of Mike Gapes Mike Gapes Chair, Foreign Affairs Committee

My right hon. Friend refers to information in the public domain. Would that include, for example, the address of a locksmith or glazier, whose receipts would be published as part of our general submissions and could give people the information that they need to get access to the property or constituency office of an MP for bad purposes?

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Photo of Bob Spink Bob Spink UKIP, Castle Point

Does the Leader of the House accept that we are not dealing with some theoretical threat? There are Members who have suffered from fixated individuals following them and seeking to interrupt their travel patterns. In fact, certain individuals have subsequently gone into mental institutions to be treated, having received two police harassment warnings after civil injunctions have failed to work. We are dealing with not a theoretical threat but an actual one to Members and their families.

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Photo of Harriet Harman Harriet Harman Chair, Modernisation of the House of Commons Committee, Minister of State (Government Equalities Office), The Leader of the House of Commons , Member, Labour Party National Executive Committee, Party Chair, Labour Party, Deputy Leader of the Labour Party

The hon. Gentleman makes an important point, and I absolutely agree with him.

On the security of the public, I have mentioned members of the public who live in the same blocks of flats as Members. A further point is that the publication of our addresses would inevitably mean more incidents at our homes, which would mean more police tied up with the task of protecting us. I felt that very strongly when about 12 police had to be around my home, instead of policing in my constituency, when Fathers 4 Justice campaigners were on my roof.

Having discussed the matter with the Lord Chancellor and the Law Officers, I can tell the House that the Government intend to introduce a statutory instrument under section 7(3) of the Freedom of Information Act, which will exclude Members' addresses or any material that could lead to the identification of Members' address. We will bring it before Members on the Floor of the House before the House rises for the summer recess.

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Photo of Steve Pound Steve Pound PPS (Rt Hon Stephen Timms, Minister of State), Department for Work and Pensions

For those of us who are slow learners, can my right hon. and learned Friend clarify a point for me? Some of us do not claim for a second home and our only home address is always printed at the start of every election campaign, despite the risk of ne'er-do-wells. Will our home addresses no longer be published or does this apply only to those who claim for a second home?

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Photo of Harriet Harman Harriet Harman Chair, Modernisation of the House of Commons Committee, Minister of State (Government Equalities Office), The Leader of the House of Commons , Member, Labour Party National Executive Committee, Party Chair, Labour Party, Deputy Leader of the Labour Party

I am referring to a statutory instrument that would introduce an exclusion from the freedom of information legislation for the information that the House authorities hold on Members. The House authorities hold information about addresses beyond claims of additional costs allowances, because they hold information on destination of travel for Members. All that information about Members' addresses would need to be considered for exclusion.

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Photo of Harriet Harman Harriet Harman Chair, Modernisation of the House of Commons Committee, Minister of State (Government Equalities Office), The Leader of the House of Commons , Member, Labour Party National Executive Committee, Party Chair, Labour Party, Deputy Leader of the Labour Party

I wish to press on, because I know that many hon. Members want to speak on these issues.

If I may, I shall now turn to the motion moved by Nick Harvey. The Government do not take an official position on the proposals in the MEC report, which is a matter for the House rather than the Government. However, it is right and necessary to have strengthened and independent audit of our expenditure on our offices, travel and accommodation, and that will be a necessary step in regaining the public confidence that has been so severely dented by the disgraceful actions of a tiny minority of Members. I will support the motion standing in the hon. Gentleman's name and reject the amendments.

I also wish to place on record my thanks to the hon. Gentleman and to the other two members of the MEC three. They have received little thanks in the House, but I wish to thank them for the dedicated work that they have done on behalf of us all.

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Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons 4:27 pm, 3rd July 2008

We had an important debate earlier on the future determination of MPs' pay, but this debate is every bit as important. Indeed, in relation to the need to show that hon. Members recognise the depth of concern outside this House, not only about the use of taxpayers' money, but the relationship of practices here to those in the outside world, this debate is in fact the more important.

Before I go into more detail, I wish to pay tribute, as the Leader of the House has just done, to the work of the group that came to be known as the MEC three—the hon. Members for North Devon (Nick Harvey) and for Middlesbrough (Sir Stuart Bell), and my right hon. Friend David Maclean. Theirs has not been an easy task, but they have put in many hours of work on behalf not only of the members of the MEC, but of all hon. Members.

The debate is important for the following reasons. We all know that to do our jobs we need budgets to meet our office costs. There are probably as many structures as there are MPs, because we all do things differently. Our constituencies are different, and no one model can be imposed on us all. It is also right that we are able to claim for costs incurred for working away from home as would happen in any other field of employment. But the approach that has been taken by MPs to the use of taxpayers' money for expenses and allowances has over the years been seen by taxpayers to be secretive and to fail to follow best practice.

Above all, Parliament has been seen as failing to recognise that life has changed. Outside this place, in any other business, compliance is the order of the day. We have appeared to be willing to require others to do that which we are not prepared to accept for ourselves. Crucial to that is the issue of audit.

I chair the Audit Committee, which, under various Chairmen, has pressed for proper audit of MPs' claims since 2004, as the MEC report states in paragraph 27. In what other walk of life would it have been possible regularly to claim expenses for £250 a time without a receipt? In short, we have been seriously out of touch and careless of our duty to taxpayers. Members, before they vote on the issue, should have a care and consider the damage that that has done to the House.

We can argue about the media's role. They certainly have a lot to answer for, but frankly so do we. The reputation of the House has been damaged and today we have a duty to put in place the changes necessary to restore confidence in Parliament and in MPs' use of taxpayers' money and to make this institution fit for the 21st century. There are two areas where people have particularly found us to be out of touch. One is audit and the other is transparency. Transparency has been resolved following the High Court judgment. All Members' claims will be published with receipts later this year. That will, of course, be of some cost to the House but I believe that it is right to embrace that transparency. It will be an important means of showing taxpayers that their money is being properly spent. The only exception to transparency is the issue of addresses, which I shall touch on later.

On transparency, the official Opposition have already introduced a right-to-know form for Front Benchers. It reflects my right hon. Friend the Leader of the Opposition's strong support for transparency, which he has made clear in a number of public statements. I said that there were two areas in which people feel that we are out of touch. One is transparency and the other is audit. I want to refer to the Members Estimate Audit Committee paper, which is published in the MEC report. On the governance framework, it makes the point that

"the media and public perception of Members' actions and motives in this area is very poor. This perception has two main components, namely an apparent failure (i) by Members to lead by example; and (ii) by the House to achieve recognised minimum public service standards of accountability by installing adequate checks and balances."

I believe that the paragraphs and proposals in the report on audit and assurance are important, if not the most important, parts of the MEC report.

Traditionally, the view was taken that a Member's signature was sufficient for a claim and there should be no need for any proof. Today we live in a different age. That is not to say that we are not honourable Members, but we must accept that today in all walks of life people are required to be scrutinised and checked in their use of finances in a way that never used to be the case years ago. We cannot ignore that and we must be willing to accept for ourselves the same sort of regime as we expect others to adopt.

We must also not forget that the traditional practices are not good enough for the people we serve. We must be willing to institute procedures that are modern, clear and without room for interpretation.

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Photo of John Spellar John Spellar Labour, Warley

The right hon. Lady might be due to come on to this, but is she giving any account to the concept of proportionality? Given the amount that is fixed in what we pay, for example in our offices—the vast bulk goes on salaries—does she think that three days with an auditor from PricewaterhouseCoopers at £1,200 a day crawling all over our constituency offices is a proportionate response or good value for money?

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Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons

I believe that the proportionate response that is needed from this House is the restoration of its reputation and that is what the MEC report provides. That is why I believe that it is important that when hon. Members vote today they should recognise the need to think not just about our individual situations but about the damage that has been done to this House by our failure to adopt best practice in those areas before now. We need to show taxpayers that we have understood the depth of people's concerns and have been willing to respond, to get a grip on the problem and to sort it out. As the report says in its conclusions and recommendations:

"Our over-riding conclusion is that we must introduce a robust system of scrutiny for parliamentary allowances as a matter of urgency in order to build public confidence."

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Photo of Tom Levitt Tom Levitt Labour, High Peak

The right hon. Lady has talked about transparency and good practice. Is it not worth putting it on the record that Members of the House did not even know of the existence of the John Lewis list until a few months ago, so that it was not possible for us to be transparent or to show best practice?

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Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons

I certainly accept that, as the hon. Gentleman says, many—in fact, most—Members of the House did not know of the existence of the John Lewis list before the story appeared in the newspapers; it is worth putting that on the record. That does not change my view that we should effectively abolish the John Lewis list by taking away the right to claim for items that appear on it, including furniture and fridges.

The MEC report proposes two levels of assurance. One of them is what has been referred to as practice assurance. I noted what Ian Lucas said about how the term could be misinterpreted. It is important that the hon. Member for North Devon, who speaks on behalf of the House of Commons Commission, and I, as a member of the Commission, make it clear that the intention is to provide assurance about the financial arrangements for claiming taxpayers' money from the House. There is a difference between that assurance and audit. The practice assurance is as much about advice, help and support for Members as about scrutiny and checking on Members. The service will not only help Members to ensure that they properly understand what can be claimed through the green book, but help them to improve their record-keeping and their claims processes. Audit, on the other hand, is about scrutiny.

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Photo of Patrick Cormack Patrick Cormack Chair, Northern Ireland Affairs Committee

I am grateful to my right hon. Friend for giving way, but I would be even more grateful if she made one thing plain. When I first came to the House, there were no allowances for any of the things that we are discussing, and one had to provide everything for oneself. However, many hon. Members have come to the House since the allowances were available. There has been a fixed sum beyond which they could not claim, and the sum had to cover their rent. I know that many members of the shadow Cabinet made legitimate claims for furnishings when they were first elected to the House. Please may we move away from any insinuation that the behaviour of the vast majority of Members has been anything other than entirely proper?

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Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons

If my hon. Friend took my words as such an insinuation, then they were not what I intended. As I mentioned earlier, I am not saying that we are not honourable Members. However, our failure to recognise the concern outside this House about our processes, and the failure to recognise that people expect us to adopt the best practice that has been adopted elsewhere in the public and private sectors, has led to cynicism and damage to the reputation of the House, and we need to address that.

Over the years, Members of this House have claimed according to the rules that existed at the time, but the rules have changed. An important element of the process is ensuring that when we adapt the green book, Members are fully aware of, and are given proper advice by the Fees Office on, the rules that are in place.

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Photo of Michael Jabez Foster Michael Jabez Foster Labour, Hastings and Rye

As the right hon. Lady says, the rules have changed; the broad-brush approach is no longer acceptable and every penny must be identified. However, Members spend large sums of money that do not count as recoverable expenditure, and will now do so to an even greater extent. Does she agree that that means that we should also look into the way in which Members are taxed? Perhaps they should be taxed as small businesses, rather than as employees, as they are at present.

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Surely a pay cut, or reduced expences, would be simpler than paying members and then taxing it back- and even more so than treating them as buisnesses! .

Submitted by Ben Hoskin

Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons

I know that the hon. Gentleman has tabled amendments on the issue, but I can only say that I would resist the temptation to go down the route of discussing MPs' tax status. That would lead us into a whole other set of debates. We are talking about the processes that the House adopts for claims that we Members of Parliament make.

I accept the point made earlier by Mr. Hood about the problem of sometimes having to wait a considerable time for claims to be met. The best option would be to be able to invoice the Fees Office directly, and for it to pay Members directly, rather than Members having to pay out themselves; but for many expenses, such as those covered by the additional costs allowance, that is not always possible.

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Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Will the right hon. Lady make it absolutely clear to the House whether it is essential to have both the extra external audit and the extra assurance process? Surely that will mean significant costs as a result of external auditors being brought in, and extra staff in the finance department so that the assurance people can do their work. Extra staff are already needed because of the pressures resulting from reducing the receipts level to £25, and extra staff will be needed when the level is reduced to zero. In addition, MPs' office staff will spend extra time on the issues. Are those not all considerable costs, and could we not make do with just one of the elements?

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Photo of Theresa May Theresa May Shadow Minister (Women), Shadow Leader of the House of Commons

I believe that we need both, because they are different—as I have been trying to explain. I shall come on to the point about audit in a moment, but financial practice assurance is about giving support and advice to Members of Parliament as well as checking what they do. It is not just about claims: it is about best practice, and encouraging Members of Parliament to adopt best practice in their offices.

Audit is about checking and scrutiny, and making sure that MPs submit correct claims. Random audit by an external auditor—and the NAO's reputation inspires confidence in people outside the House—would give the public confidence that money was being spent properly. As the hon. Member for North Devon said, it would also put the House on the same basis as other public sector bodies.

Checking and scrutiny are extremely important and introducing them would—crucially—incorporate best practice in the House. I refer to the letter from the Chairman of the Committee on Standards in Public Life, which was mentioned earlier by my hon. Friend Mr. Heald. It states:

"In particular we were pleased to see the proposals for a more robust system of audit and assurance, based for the most part on claims backed by receipts, and by the implied acceptance of complete transparency about what is claimed...these seem to us to be significant steps towards the establishment of the robust regime that MPs and the taxpayer have the right to expect."

I agree with Sir Christopher Kelly: our responsibility as Members is not to think only about our personal interests, but to think about the House and to do what is necessary to restore trust in it. Amendment (d), in the name of Mr. Touhig, proposes a reduced level of assurance and does not incorporate external scrutiny. That is why I believe that it does not go as far as is necessary to ensure that we provide confidence and trust for members of the public. Voting in favour of that amendment, or against the main motion, would be to say to people outside the House that we do not accept that they are concerned, and that we are not prepared to take the steps necessary to improve the House's reputation. If we sent out that message, we would tarnish the House's reputation further. As the hon. Member for North Devon said, that would be catastrophic. Today is our opportunity to restore faith in the House.

I just want to say something about the ACA proposals. The MEC looked at three options, but I have never left my personal view in doubt, having said in public several times that my preference would be to abolish the ACA and incorporate it in salary. However, I know that that will not satisfy the House's requirements today.

I do not approve of per diem expenses, and that is why I am pleased that the £140-a-day option was not the one preferred by the MEC. I remain concerned—as, I know, does my right hon. Friend the Leader of the Opposition—about the element of per diem expenses incorporated in the ACA proposals, as that would mean that some money would be claimed for which there was no transparency.

However, the overall benefits of the MEC report package outweigh that concern. The proposals would tighten up how claims are made, introduce necessary audit procedures and bring the House's business and procedures in line with best practice elsewhere.

I fully support the Leader of the House's proposals on MPs' addresses. They are important for us, but also for those members of the public who reside in blocks of flats where MPs also live. They might feel that they would be a target if the addresses of MPs in one block were published.

This House has a very important decision to take today. We have the opportunity to start the process of restoring confidence in Members and the processes of the House. We can put our heads above the parapet and say, "We understand the degree of concern that exists outside this House, and we are willing to take the necessary action." I hope that the House will therefore support the motion in the name of the MEC.

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Several hon. Members:

rose —

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. I call Simon Hughes, but before I do so, may I say that the Back Benchers have not been able to get in? I set a limit of eight minutes, but I am putting that limit down to six minutes so that I can at least get some Back Benchers in.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats 4:44 pm, 3rd July 2008

I am grateful for that, Mr. Speaker. I shall respect that timetable as well.

I support with enthusiasm the proposal from the Members Estimate Committee, and I hope that the House listens very clearly to the warnings that my hon. Friend Nick Harvey and Mrs. May gave, because unless we are robust on the issue, and unless the amendment in the name of Mr. Touhig is defeated, we will undermine all the work that people have been trying to do to ensure that we are seen to be absolutely transparent in our practices. It is completely unacceptable to propose, as the amendment does, an audit only for the additional costs allowance, rather than a full audit of all that we do with public money. It is completely unacceptable, and if the right hon. Gentleman and his colleagues win the vote, it will be a shameful day. I hope that colleagues—

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

No, I will not give way, because I said that I would restrict my contribution to six minutes.

I hope that colleagues are absolutely clear about the need to turn over the page and introduce a transparent system with proper auditing, so that everybody here is affected and everybody out there knows that we have our expenses policed in the same way as everybody else who is in public service and in the public pay. I pray in aid—if I needed to—the chairman of the Committee on Standards in Public Life, who has been very clear that he and his colleagues will, as they should, keep on watching what we do. He has also made it clear that if we accept the proposals, it will be a good starting point but nothing more, and that watering them down will not do.

The proposals on properly managed arrangements for constituency offices are welcome, and as I said to my hon. Friend the Member for North Devon by way of my amendment, which I shall not press to a vote, the arrangements need to start as soon as possible. I am grateful for his assurance in respect of that. The separate mileage allowance proposal, which will entitle Members with large and sparsely populated constituencies to more than Members, such as me, with smaller constituencies, is also welcome.

The proposal to change the additional costs allowance is a good one. It will provide a cash sum of up to £19,000 for a second, London home for non-London MPs, and they will be able to do what they want with the money. It rightfully does not include furnishings and all the other stuff; it is a sum of money, and colleagues can decide how to spend it. That is the way other people are reimbursed when they have to work away from home, and that is how colleagues in this place should be reimbursed.

It is also right that we end the absolutely disgraceful way in which, under the current arrangements, colleagues from outer London have been able to take full advantage not only of their own home, but of a second home at the same rate, even though in some cases they have lived only a matter of 20, 30 or 45 minutes away from here. We have to be very clear about those things.

I have two final points. First, it seems right that travel allowances should be tightened further and given only to spouses or civil partners, rather than to other people in a relationship. That seems to be right and good, and we have to be tough about it. Secondly, on the point about addresses, I think that I am in as good a position as anybody to comment on the risks that people have to live with. I have lived under police protection, as have other colleagues, but the proposal to hide one's home address is a complete nonsense. The reality is that one stands for election as a public representative, one knows the risks when standing and declares one's address on the ballot paper.

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

Order. I know that some Members disapprove of what the hon. Gentleman is saying, but he is entitled to be heard.

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am grateful for that, Mr. Speaker.

The only exception should be if one can demonstrate such threats that the electoral registration officer is persuaded to exclude one's name from the electoral register. Otherwise, we are all on the electoral register, anybody can find our constituency address and they should be able to do so. The only perfectly good and proper argument is that the addresses of colleagues' second, London homes, which they have when they work in Parliament, should not be a public matter, because they have nothing to do with their constituents. In the interests of security, those addresses should be protected.

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Several hon. Members:

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Photo of Simon Hughes Simon Hughes Shadow Leader of the House of Commons, Party Chair, Liberal Democrats

I am not going to give way, simply because I said that I would be very brief.

I am clear that many colleagues take a different view from mine. An order will come before the House to be voted on. I understand the threats under which people and their families live, but we need to err on the transparent and open side of the line. We are different from judges and other people. We are elected to be public servants accountable to our electorates, and the public should be absolutely aware of where our homes in our constituencies are, so that they can judge about where we live as well as know about us, the people whom they elect. The vote may not be won. It is less important than the other vote. However, I hope that the suggestion of a reduced audit is rejected, because introducing such an audit would be a catastrophically foolish and wrong decision.

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Photo of Don Touhig Don Touhig Labour, Islwyn 4:50 pm, 3rd July 2008

Nick Harvey and I exchanged some barbed comments. That is perfectly normal in this House and in no way diminishes my respect for him and other members of the Members Estimate Committee, who have done a difficult job. I greatly admire what they have done. However, I hope that those of us who disagree with elements of the report are not going to be cast as people who are against reform or transparency.

I cannot pay such a tribute to Simon Hughes. He can wear his hair shirt and be sanctimonious if he wants. As is typical of the activities throughout his political life, he thinks that there is a way of making smear some sort of progress in this House. Those of us who oppose some of the report are not anti-transparency or anti-reform.

In tabling the amendment, I strongly support the introduction of a robust system of scrutiny for parliamentary allowances in order to rebuild public confidence. The Members Estimate Committee has made some excellent recommendations, which many on both sides want to be implemented. However, although I accept most of the recommendations and the spirit of the report as a whole, I have tabled the amendment, with the support of others, because of my experience on the Public Accounts Committee.

Our amendment calls for 25 per cent. of Members' additional costs allowance claims each year to be audited and for the auditing of every Member's additional costs allowance every parliament. We are proposing a very thorough internal audit system performed by an in-house team set up on the model of the National Audit Office and working at arm's length from the House authorities, rather than by outside auditors from big City firms that would cost the taxpayer millions of pounds.

My experience on the Public Accounts Committee has taught me that unless auditing is approached in the right way, it can incur such disproportionate cost that, far from safeguarding taxpayers' money, it undermines the purpose of the audit in the first place. The report proposes a system of assurance audit of Members' office cost allowances. That proposal is ill-thought out. From what the hon. Member for North Devon has said, it appears not to be properly costed. There is no evidence that it is needed.

The lapses in standards that have besmirched the reputation of the House recently have all been to do with the operations of the additional costs allowance and salaries. I am not aware of any problems or failure of standards as far as the office costs allowance is concerned. If there were thought to be problems, we should have a report—and if problems were found, of course there should be a great deal of scrutiny and audit. I would support the recommendation on that basis. I stress that I am not opposed to the proposal; however, the Committee has given no grounds, made no proposals and given no information on how we can justify the spending of this vast amount of money.

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Photo of Kevan Jones Kevan Jones Labour, North Durham

When we attended the briefing from the Members Estimate Committee at lunch time, many of us were shocked to learn that despite what I thought were the rules—that we had to lodge contracts of employment and terms and conditions of employment with the Fees Office—87 Members refused to do so, and have been allowed to get away with it.

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Photo of Don Touhig Don Touhig Labour, Islwyn

My hon. Friend makes a good point; that is how the system is operating.

If we accept all the recommendations of the report, as proposed by the hon. Member for North Devon, we will commit ourselves to employing hundreds of accountants who will travel Britain at great cost to the taxpayer, checking on whether a Member from the north of Scotland has spent too much on paper clips and on whether a Member from the south-west could have bought toilet paper for his office staff cheaper at the Co-op than he could at Tesco.

Bringing in outside teams of auditors always sounds good, but it can be expensive and it undermines the objective of sensible spending. My colleagues on the Public Accounts Committee and I are forever upbraiding Government Departments for spending millions of pounds on consultants. Let us not make the same mistake. The Members Estimate Committee wrote to Sir John Baker on the separate issue of Members' salaries and stated that the pay issue had got out of all proportion to its real significance to the public purse. With the proposed audit, we are in danger of making the same thing happen. There is a great danger that if we make that mistake on Members' allowances by spending a disproportionate amount of money on external auditors, we will have a high cost to pay at the end of the day. What is needed is not outside auditors but the development of auditing expertise within this House so that we do not create waste when we need transparency and good use of public money. Let us involve the National Audit Office in helping us to set up our own internal audit system so that we do not spend more money on things that we cannot justify.

The amendment that I have tabled, with the support of others, supports the continuation of the principle of the ACA to meet the necessary costs of MPs living away from home. I think that most fair-minded people would accept that the extraordinary situation of an MP needing to live both in his or her constituency and in London requires an allowance to support those costs.

However, there is no getting away from the fact that the confidence of the public in Members has been severely damaged by press stories about allowances and expenditure. That is why I support most of the recommendations in the report, which present the House with an opportunity to bring about a system that is transparent and open to scrutiny. It is a chance for Members to demonstrate that they are serious about restoring public faith in Members of Parliament. We are charged in this debate with restoring public confidence in this House and in our political system. We all recognise, I think, that it is imperative to put in place a system with clear guidelines and spot checks, but we must get the right system. Of course, underlying any debate on reform of the ACA is the fact that we should be seen in this House to be exercising the same type of restraint that has been asked for from others in the public sector. For that reason, my amendment supports the freezing of the communications allowance and the introduction of restrictions on Members claiming for travel.

At a time when public perception of politics and politicians is at an all-time low, the decisions that we make today will help to restore public faith in us. It is up to us to reaffirm that public service for its own sake is worth while and honourable. Given the way that the report has gone, I do not believe that we will currently be able to do that.

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Dear Mr Touhig, I heard you on Radio 4 the other day. I think that you said that you didn't receive enough to do your job properly. Also that you weren't born with a silver spoon in your mouth and didn't have independent means. I think you are quite right that the public's perception of politicians is at an all time low. I don't think anyone would argue against politicians receiving a fair wage. However, what politicians consider as fair and what ordinary citizens struggling to get by think is fair, is another matter. Thanks to Heather Brooke the stone has been lifted, and what has been found below is not pretty. If we take the speaker for instance, he lives rent free in a grace and favour residence and yet he still claims second home allowance. It's allowed by the rules he says. Well, if that is right there is definitely something wrong with the rules. Take Conway, The Keens, with their Westminster flat, and yet live just a short ride out of London. Peter Haines employing his 80 year old mother. All of these would have gone unnoticed if it hadn't been for Heather Brooke. No wonder you all voted for exemption from the FOI act. I'm quite sure there will be more sordid facts revealed. I have a young daughter, who with her partner work all hours to be able to provide and bring up their two children. The fact that a proportion of the tax they pay goes towards providing luxuries such as the Plasma TVs fitted kitchens, we all hear about, makes me sick. The fact that politicians can use taxpayers money to buy a property and then collect the profit when it is sold, makes me incandescent. No doubt, if a loss is incurred the taxpayer will have to cough up too. It must be obvious to you that people have no trust in internal monitoring. We have seen where that has already led us. I find the statement that it will cost millions to have external checks made, ludicrous. What needs to be done, is that at the end of every month proof of expenditure is sent to a recognised external accountant, who would verify the expenses accrued. These expenses should also been made available for the public to see. It is...

Submitted by Robert Gough Continue reading (and 1 more annotation)

Photo of George Young George Young Chair, Standards and Privileges Committee 4:56 pm, 3rd July 2008

I want to contribute briefly to this debate because the Committee that I chair monitors the arrangements for allowances, and we therefore have an interest in the issues under discussion. I begin by thanking our three colleagues for the speed and efficiency with which they conducted their report. I broadly agree with the direction of travel, but there are some interface issues between the existing regimes and what is proposed that we need to tease out and to which I shall turn in a moment. Given the tight time scale and the complexity of the issues under debate, I can understand why this time it was not possible to involve a wider range of interests in the Committee's conclusions. If we go round the course again, it might be better to take slightly more time to resolve some of the issues that remain unresolved and to deal with some of the anxieties that have been expressed in this debate.

My Committee supports proportionate measures that drive up standards and reduce the likelihood of colleagues falling foul of the rules. There is some evidence that over the years we have made significant progress in that regard. If one goes back a number of years, the principal causes of complaint were on matters such as the non-disclosure of interests and the acceptance of cash for activities such as questions and lobbying. Firm action by the House has dealt with those. More recently, the complaints have been about misuse of allowances, and they have formed a prominent part of my Committee's work. We need the same robust approach to deal with those. The communications allowance is proving a fertile ground for complaints given the inevitably fine and not always clear line between a Member's parliamentary and party political roles. I am glad that the MEC has accepted the implementation of my Committee's recommendations on the communications allowance. I hope that that will reduce the risk of Members facing complaints about their publications, and I strongly commend the case for seeking pre-clearance from the Resources Department.

On accountability, we need to lead by example. Our arrangements should reflect best practice in the public and private sectors. That does not mean a hair shirt approach, but it does mean systems that are open and transparent about what we are reimbursed for and why, effectively administered and subject to independent audit. The MEC proposals move in the right direction, and I welcome that.

I want to make one general point and then put down two markers. The general point is this: having been Chairman of the Committee on Standards and Privileges for some seven years, it is my view that the vast majority of Members are honest folk who did not become Members to enrich themselves but to do a useful job in public life. They genuinely do their best to abide by our rules, which are often complex and less than clear. If they break the rules, the consequences can be terminal, as we have seen. I know that not everyone outside will accept that view, but I believe it to be the case, and it should be said.

The first marker is that it is important, as we improve transparency and accountability, that the House's arrangements for the independent investigation of complaints should not be compromised. My Committee would be concerned if the proposed practice oversight arrangements and the greater depth of external audit were to compromise the House's arrangements for the investigation of complaints. I welcome the undertakings given earlier in this debate by Nick Harvey to consult the Parliamentary Commissioner for Standards and my Committee on the mechanics of implementing the relevant recommendations.

The second marker is this: as we look for greater accountability, we risk the regulatory pond becoming unduly crowded. Putting to one side the Committee on Standards in Public Life, which will have an ongoing interest in the issues that we debate, it seems likely that all the following bodies will have some direct interest in the practical operation of the revised arrangements: the Parliamentary Commissioner for Standards, my Committee, the Members Estimate Committee, the Speaker's advisory panel, the Department of Resources, the National Audit Office and the practice assurance teams and whatever new Committee they report to. The risk is clearly one of over-supervision, which, rather than improving clarity and assurance, would have the contrary effect as those bodies trip over one another.

In conclusion, I welcome the Members Estimate Committee report, and the cautious welcome that it has received from the Committee on Standards in Public Life. I assure the House that the Parliamentary Commissioner for Standards and my Committee will play their full part within the framework laid down by the House to ensure that any new arrangements work effectively, and that they help to rebuild confidence in allowance arrangements that are fair to the House and the wider public interest.

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Photo of David Winnick David Winnick Labour, Walsall North 5:01 pm, 3rd July 2008

The public's concern on this issue is not confined to—or indeed, in any way involved with—the filing system in our offices. It goes somewhat deeper than that. Virtually every reform on financial matters, apart from our salaries, has come about because of some scandal. The same is true of what we are debating today. As Nick Harvey, who spoke on behalf of the House of Commons Commission, mentioned, the scandal referred to in the report led to the recommendations before us today. Similar matters have arisen on previous occasions. In the late 80s and early 90s, there was the issue of payment for questions, and as a result of what The Sunday Times did—I congratulated that paper at the time—a number of reforms came about, which should have been put in place earlier.

I regret that this review has been entirely in house. The Chair of the Committee on Standards in Public Life said that a better way of doing things would have been through a committee of Members of Parliament and outsiders. I agree. I am not altogether certain that having a report from a body made up exclusively of MPs will restore public confidence in any way. One should not forget that it was only a year or so ago that attempts were made, supported, as I understand it, by the House of Commons Commission, to exempt Parliament from the Freedom of Information Act. What would the position have been if that had come about? Inevitably, there would have been a strong feeling that we were afraid of exposing our allowances. Everything would have been done on a voluntary basis, and it certainly would not have been done as a result of what has been decided by the Information Commissioner and the High Court. We would have been saying, in effect, that all other public bodies would be subject to the Freedom of Information Act, but that this House, which was responsible for introducing and passing that law, would be exempt. That would have been a disgraceful attempt at a cover-up, and I am pleased that it never became law.

We have to face up to the fact, which has been mentioned several times today, that there is a lack of public confidence in some aspects of the allowances system. Yes, the media play a role to some extent because they love to go on about our allowances, expenses and salaries, and give the very wrong impression about this money that is given to us each month. Of course, it is nothing of the kind. Nevertheless, what has recently come out on what are described as second homes has understandably caused a great deal of concern. I am concerned that there has been a form of abuse, and that simply cannot be justified. The report does not deal with that. The public must be confident that the money that we claim for allowances and expenses is above board and legitimate. Except for the abuse that came to light and was duly exposed, there is no dispute about the secretarial allowance—the Fees Office pays it directly. However, the same does not apply to second homes. I happen to claim for rented accommodation. I claim the rent, the council tax and so on because the need for the accommodation arises from my parliamentary and constituency duties. I am happy for all the details to come out in October, but are we confident that everything about mortgage interest and so on is above board? Are we confident that what is claimed is what should be claimed, and that the public money that is claimed is justified? I have doubts about that, and the matter needs to be cleared up.

We are often our own worst enemies. We do an important job—parliamentary democracy depends on the House and we should receive allowances and so on that are justified. When I first became a Member of Parliament, there was no secretarial allowance. That position has rightly been changed. Many other matters that needed to be rectified have been put right. However, I remain of the view that we should be careful that, while we preach to others and set guidelines about public expenditure, we cannot be accused of abusing the system. Although I welcome some aspects of the report—they are good and should help matters—I am not certain that it will restore public confidence in the way we would like.

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Photo of Julian Lewis Julian Lewis Shadow Minister (Defence) 5:06 pm, 3rd July 2008

A few days ago, after the Leader of the House gave us the good news that she would table a motion to enable the privacy and security of our home addresses to be maintained, an honourable Labour Member approached me and said in all seriousness, "Julian, what do you think about the prospect of establishing a trade union for Members of Parliament?" I think that he had me in mind for the role of shop steward—not quite the climactic outcome that I had in mind after six long years as a shadow Defence Minister. However, he had rather a good point because, as Mr. Jones revealed in a previous debate, no security information was apparently considered by the House authorities or put before the court before the crazy decision was made to release our home addresses en masse in easily accessible form for the benefit of any troublemaker or terrorist at home or abroad.

I did the Information Commissioner an injustice on a previous occasion because I assumed that he had first suggested releasing our addresses. In fact, the matter first arose when the information appeal tribunal said that private addresses should be revealed, and the three eminent judges, in their wisdom, upheld the decision. On 25 June, 50 to 60 Members of Parliament attended a meeting with the Information Commissioner and, consequently, he has issued a statement. I shall briefly put some of it on the record.

The Information Commissioner states that his office

"has consistently taken a cautious approach towards the disclosure of home addresses, whether in the context of the Freedom of Information Act or otherwise. In most cases, an address is an individual's personal data and is protected by the Data Protection Act. None of the Freedom of Information decisions about MPs' expenses made by the Commissioner has required disclosure of home addresses."

He goes on to say that

"if any disclosure of personal address information arising from a Freedom of Information request is required at all, it should normally be limited to the first three digits of the postcode."

He concludes that

"it would be prudent for the House Authorities first to give each MP"— about whom a freedom of information request is made—

"the opportunity to indicate whether they have a current or prospective security-related concern... The Commissioner considers that the House Authorities would then be entitled to withhold each address where such a concern is registered."

As Simon Hughes pointed out, once every four or five years we have to reveal our constituency address in the process of getting elected. But the fact that we have to do that with some of our addresses, some of the time, is no reason whatever for our having to do it with all our addresses, all the time, in an easily accessible form. Of course, if someone who is targeting a particular MP and means to track him or her down in order to do him or her harm puts in enough effort, it will be possible to do so. However, that does not cater for a situation in which someone with a grudge, someone with an obsession, a follower of a political cause or a self-taught follower of al-Qaeda, at home or abroad—who will not even have heard of most of the Members of this House—goes on the internet, conveniently finds 646 addresses and sends 646 packages containing something explosive, horrible or, at the very least, abusive to 646 unprotected mail boxes. The proposal is absolutely insane.

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Photo of Julian Lewis Julian Lewis Shadow Minister (Defence)

If the hon. Gentleman will forgive me, I will not, because of the time.

Finally, let me say something to those hon. Members who are worried about what the press say about our deliberations today. This is my first experience of a total media black-out. Journalists have again and again admitted to me privately that they have no answers to the points that I have made, but time and again they have refused to put anything in their papers. Even The Daily Telegraph refused to publish a letter in reply. Could that conceivably be something to do with the fact that one of the people who took the case to court was a journalist on The Sunday Telegraph who then proceeded to write an inane half-page article about how vital it was to reveal our home addresses, to ensure that we were not fiddling our expenses? He ought to be ashamed of himself, as should the media. I am grateful to the Leader of the House, who has done her duty so well in this event.

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Photo of John Spellar John Spellar Labour, Warley 5:11 pm, 3rd July 2008

One of the problems with this debate is that most of us quite like the members of the Members Estimate Committee; we just think that they are wrong in one or two areas. They are wrong in believing that their measures will do away with some of the criticism, particularly in the media, but also from some of the public. In August 1944, Gallup asked the public what they thought about politicians. Some 36 per cent. thought that they were acting in the country's interest and 57 per cent. thought that they were acting in their own or their party's interest.

Let me deal with the issue of the second residence. I say "residence", because it is important to get across the fact that the nature of our job means that, year in year out, most of us have to maintain two residences—one in our constituency and one in London. Helpfully, the report identifies the considerable costs of hotels, but even in spite of the cost, that is not a very suitable way to live, either for Members or their families. Members' families have to put up with a considerable amount of inconvenience anyway. To add to that is quite unjustifiable.

We should also recognise that both society and this House have changed. As our panel said in its evidence to the MEC, this is the first time that all three party leaders have young families. That is unprecedented. Many more Members of Parliament have young families. As we saw at Easter, school holidays do not always coincide with our recesses. We see that every year in the summer, too. Often, families want to be able to be together, which they cannot in a bare-boards room.

Another rather odd thing is the position that the MEC took on making the property habitable, rather than having just the four bare walls. The MEC makes a nod in that direction, saying:

"We can see that new MPs setting up home in either a rented or purchased flat need a modest dispensation to use their allowance to equip it".

That is in the report, but it is not in the recommendations and no figure is identified, which is unfortunate. The MEC sees no justification for continuing with that arrangement—in other words, for replacing that furniture or those fittings. I presume that if even a prisoner's television breaks down or their bed wears out, they get a replacement. That is an inadequacy of the report and the amendment seeks to address it.

The MEC also implicitly assumes that there is one single pattern for Members' accommodation, namely that they have their main home in their constituency and an additional residence in London. I see one of the members of the MEC shaking his head, but that is exactly the way in which the report is written. In fact, that is true for about 80 per cent. of us. For a variety of reasons, about 20 per cent. of Members—often those who were Ministers before 1999—have to have their main residence in London, and they cannot keep on changing their residences back and forth.

We therefore need flexibility, rather than a rigid system. That is the problem with some of the recommendations, which would create a bureaucratic, uniform system. The report talks about an expanded green book—an ever-expanding rule book—but in a short space of time, that could grow to achieve the proportions of the tax code. That might be familiar to some of those in the Department of Resources, but I do not think that it is a sensible way for us to go.

If Members look at their own claims, they will find that the great majority relate to mortgage interest or rent, plus utilities and council tax, so we are going to spend large amounts of audit money dealing with a small part of our expenses. The same applies to office costs, because a large proportion of them is salaries. Will there be some cases in which there are problems? Yes, but they will be revealed not through an audit, not even with the £1,200-a-day PricewaterhouseCoopers people looking at the matter. They will be revealed by other discontented members of staff. That is true not only in our organisation but in all organisations.

We therefore need proportionality. All companies and organisations need to examine how much they spend on creating a system to ensure that there is proper expenditure of their money. They must ensure that this is done in a proportionate way and that they are not spending £100 in order to save 2s/6d. I fear, however, that in response to media campaigns, the MEC has gone overboard in this regard. One thing that I know about consultants is that they always want to find a reason for being employed on the next contract. If a consultant goes into an organisation and spends three days rooting around, they will end up wanting to run the business. They will end up trying to tell us how to be Members of Parliament, just as a previous standards commissioner here tried to take on cases and act as an ombudsman on whether we were doing our job properly. The process is expensive, undesirable and unnecessary, which is why the amendment is right.

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Photo of Ann Widdecombe Ann Widdecombe Conservative, Maidstone and The Weald 5:17 pm, 3rd July 2008

There is an immense naivety governing this debate. If we imagine that, by passing the well thought out motion tabled by the Members Estimate Committee, we shall somehow restore public confidence, or that by rejecting the amendment tabled by Mr. Touhig, we shall continue not to have the confidence of the public, we are living in cloud cuckoo land.

One of two headlines will greet us at breakfast tomorrow. If the recommendations of the Members Estimate Committee go through, the headline will be "MPs to get £30 a day just for turning up". If the right hon. Gentleman's amendment, which I intend to support, is passed, the headline will be "MPs vote to keep the John Lewis list". Whichever way we vote, we will continue to be vilified and ridiculed until we have the guts—which we certainly did not show in the previous series of votes—to stand up for ourselves, to defend the system and to tell people why we have that system.

We should tell people—because it is true—that if they pay someone less than a GP is paid, but demand, as they would not demand of a GP, that that person should then run—

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Photo of Michael Martin Michael Martin Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons

I am sorry to interrupt the right hon. Lady. I rarely interrupt her, but we must deal with the amendments to the motion on Members' expenses.

It being one and a half hours after the commencement of proceedings, Mr. Speaker put the Question s necessary to dispose of proceedings on the motions relating to Members' expenses and Members' home addresses, pursuant to Order [ 1 July ] .

Amendment proposed: (d) in line 2, leave out from '578)' to end and add

'recognises the need to strengthen the system of scrutiny and is of the opinion that a rigorous internal system of audit of the Additional Costs Allowance be introduced covering 25 per cent. of hon. Members each year, and every hon. Member each Parliament; and is of the opinion that—

(1) Recommendations 5 (staff contracts), 8 (constituency offices), 9 and 10 (communications allowance), 11 and 12 (travel), 14 (overnight expenses), 15 (resettlement), and 16, 17 and 18 (other SSRB recommendations) be approved; and

(2) that Recommendation 5 be implemented from 1st October 2008, that Recommendation 8 be implemented from 1st April 2010, that Recommendations 9 and 10 be implemented from 1st April 2009, that Recommendations 11 and 12 be implemented from 1st April 2009, that Recommendation 14 be implemented from 1st April 2009 and that Recommendation 15 be implemented at the end of the next Parliament.'.— [Mr. Touhig.]

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Question put, That the amendment be made:—

The House divided: Ayes 172, Noes 144.

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Question accordingly agreed to.

Amendment made: (f), in line 18, at end add—

"4) any allowance for overnight costs arising from Parliamentary duties in London may not be used for accommodation expenses in respect of a residence designated by an hon. Member as his main residence for tax purposes.".— [John Mann.]

Main Question, as amended, agreed to.

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