With permission, Mr. Speaker, I would like to make a statement.
Today the Committee on Standards in Public Life, under its chair Sir Christopher Kelly, has published its report setting out recommendations for a new framework for parliamentary allowances. People in this country need to be able to have full trust and confidence in their Parliament. What happened under the old allowance system has knocked that confidence.
We come into Parliament not to serve our own self-interest but to serve the public interest, but that is not the impression that the public have. We have all acknowledged that and have recognised that to ensure that we have a system in which everyone can have confidence, we need to take action. We have already made changes and the Kelly report is another important step on that path to restoring public confidence.
Before I turn to the Kelly report, I would like to remind the House of the action that we have already taken. To deal with the past, we are ensuring that any overpayments, including those which were simply a mistake, are paid back. That is the work that the Members Estimate Committee, which is chaired by you, Mr. Speaker, commissioned from Sir Thomas Legg. We have already taken action to change the current allowance system. In order to allow for the period while wholesale reform of our allowances is being considered, we introduced interim measures last May to pare back allowances as a result of a meeting of the party leaders and the Members Estimate Committee.
Amid the enormous attention paid to past problems, no one should overlook the fact that we have already decided to cap the monthly amount that can be claimed on mortgage or rent; to prevent a Member from changing the designation of their main or second home; to abolish the second home allowance for outer-London Members; and to stop claims for furniture, stop claims for cleaning and stop claims for gardening. Parliament has not sat back waiting for Kelly. The current allowance system is already very different from the one which allowed for the claims that have angered both the public and the House.
We have also recognised that for the future, it is no longer appropriate for us to set or administer our own allowance system. That is why in July we passed the Parliamentary Standards Act 2009, which sets up the new Independent Parliamentary Standards Authority, which will decide on our allowances and run the system, so just as we no longer vote on our own pay increases, we will not play a part in deciding or administering our allowances.
My right hon. Friend the Prime Minister in March asked Sir Christopher Kelly, the chair of the Committee on Standards in Public Life, to review the system of MPs allowances. I would like to thank Sir Christopher and his committee for the important work they have undertaken, and also to thank all those, including many hon. Members, who gave evidence to his committee. His report was published only this morning, but it is obviously right for the House to hear an early statement and to have the chance to air initial views.
MPs representing constituencies outside London need to be able to live in both their constituency and in Westminster because they need to work in both places. We do not want a Parliament where the only people who can come to Westminster as MPs are those who are wealthy enough to afford to pay for second homes out of their own pocket. Nor do we want to undermine the importance of MPs working in two places-the constituency and Westminster. Both are important. Nor do we want to have a situation where you cannot have your family with you if you are an MP. The Kelly report recognises that the allowances are there so that Parliament works properly on behalf of people in this country; the constituency link is sustained; Parliament is not barred to people on modest incomes; and so that Parliament is not barred to people with a young family. The Kelly report acknowledges this.
The Kelly report covers 138 pages and puts forward 60 recommendations. Among the key recommendations are two that I would like to draw to the attention of the House. First, on the recommendation that Members should not be able to claim for mortgage interest but only for rent or hotels, the committee recommends that those with existing mortgages should be able to continue to claim for one further Parliament. It recommends that Members should not be reimbursed for the employment of family members. Those who currently employ family members will be able to continue to do so for one further Parliament.
Turning to the Independent Parliamentary Standards Authority, the acting chief executive, Andrew MacDonald, has been appointed and has begun work, and you, Mr. Speaker, have just announced that Professor Sir Ian Kennedy has been selected as the new chair-designate of IPSA. I will put the motion to confirm his appointment to the House in the next few days. The other members of the authority will be appointed shortly.
The Independent Parliamentary Standards Authority has already started the work of setting up the new allowance regime for MPs. A new allowance regime will be in place to come into effect in the new Parliament, as recommended by Sir Christopher Kelly. In the light of this, the Government welcome and fully accept the Kelly report, which should be taken as a whole. It will be for IPSA to take it forward. This is the approach Kelly's report itself recommends.
Until such time as IPSA takes the Kelly report forward, we will retain the current restricted allowance rules and every claim will of course be published and available for the public to see. Because we decided in July that in future we would play no part in deciding our allowance system and that it would be done independently, it does not make sense for us now to vote on the future shape of our allowance system. Instead that is the job of IPSA. After all, that is what we set it up to do. The Parliamentary Standards Act lays down that IPSA must consult MPs and others when drawing up the allowances regime. IPSA will set to work immediately and we expect, following such consultations, it to proceed as quickly as possible to put into effect the Kelly recommendations on allowances.
The events that lie behind the recommendations in the Kelly report have caused anger and dismay both in the public and among hon. Members. Our responsibility is to continue to take the action needed to sort the situation out and to make the changes that are necessary. The payback system is under way. The new restrictive allowance system will remain in place. Sir Christopher Kelly has recommended a new framework for our allowances, and IPSA is up and running and will set up the new allowance system and administer it. Sir Christopher Kelly's report is another important step on the road to the public knowing that the allowance system has been put on to a proper independent footing and that we are getting on with our important task of serving our constituents and this country.
This House of Commons has yet to fully resolve this damaging episode. But with clear acknowledgement of the public anger, with the firm action already taken, with the Kelly report and the establishment of the Independent Parliamentary Standards Authority, this will be resolved. I commend this statement to the House.
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I thank the Leader of the House for her statement and may I take this opportunity to deplore the way in which Sir Christopher's report was selectively leaked last week?
This report was commissioned because neither the House nor the Senior Salaries Review Body was able to come up with a sustainable solution to the vexed question of our allowances. On behalf of my party, I wish to thank Sir Christopher and his colleagues for producing a thorough report, whose conclusions we shall accept in full and take forward.
My brief questions fall into two parts-first on the process for implementing reform and, secondly, on the substance of some of the recommendations. On process, does the Leader of the House agree that now that the report has been published, our priority should be to ensure that these reforms are implemented as quickly as possible? Is not the position now very different to that when Sir Christopher began his review? Then he was going to produce the definitive response on which we would vote, and possibly resolve this by Christmas. But since June, as the Leader of the House said, the Parliamentary Standards Act has been put on the statute book, giving IPSA and not Kelly the final say on our allowances. So today's report is not the end of the process-that rests with IPSA, which is not yet constituted. Does she agree that it is important, therefore, that the consultation on Sir Christopher's report and the consultation that IPSA is obliged to carry out should happen at the same time? Does that not mean that IPSA should be up and running as soon as possible, taking Kelly as its text, and if we move quickly, might IPSA come to its conclusions on the Kelly report by February? Under that scenario, can she confirm that the interim arrangements might run until the new IPSA regime kicks in, possibly at the beginning of the next Parliament? Related to that, does she recognise that the continued uncertainty of the timetable for establishing IPSA is causing anxiety for many staff at the Department of Resources, who have to keep the show on the road without knowing their future? Finally, on process, does the Leader of the House recognise that some of the recommendations will require primary legislation, and when does she plan to introduce that?
Turning to the substance of the recommendations, I declare an interest in the employment of relatives. I believe that there is insufficient appreciation of the demanding jobs that all staff do, often at antisocial hours, and many colleagues on both sides of the House, and indeed their constituents, will attest to the invaluable service that family members can, and do, provide, as was confirmed by Sir Christopher this morning. However, does the right hon. and learned Lady accept, as I do, that in a modern Parliament the current arrangements no longer carry public confidence? Does she agree that we need to accept Sir Christopher's recommendations while considering closely his proposed transitional period to ensure that the House does not fall foul of employment law?
On communications, we welcome Sir Christopher's endorsement of our proposal to scrap the communications allowance, and I welcome what he said on MPs who retain outside interests. I also welcome the recommendation to enable IPSA to look at pay, pensions and allowances, enabling the full spectrum of MPs' remuneration to be considered in the round. Does the right hon. and learned Lady agree that it was the fragmented approach of the past that is partly to blame for the mess that we are in today?
On accommodation, again we support Sir Christopher's recommendations. The public have lost confidence in the current regime, and it has to change. As Sir Christopher says, IPSA will need to look closely at the proposals in the report. There are legitimate concerns with aspects of it, particularly the rules surrounding those who are expected to get back to their constituencies at night. Does the right hon. and learned Lady accept that Sir Christopher's proposals on rent will need to be monitored by IPSA to ensure that the overall package is not more expensive than it is now? Does his package meet the Prime Minister's test on reducing the cost to the taxpayer?
Finally, the issue before us has dogged the House for the past 12 months. The public are waiting for action. Sir Christopher provides the basis for an enduring settlement that is fair to the taxpayer and Members of the House-existing and potential-who need the resources to do the job properly without relying on private means. Is it not now paramount that we make urgent progress in what remains of this Parliament, so that we can return to our core tasks of scrutinising legislation, holding the Government to account and fighting for our constituents, and so that we can bequeath to our successors in the next Parliament the opportunity of a fresh start?
The right hon. Gentleman raised the point about getting on as quickly as possible with the implementation of the Kelly report, and he is right of course that when Sir Christopher Kelly started his work, the idea was that he would produce a report and that it would come back to the House to be implemented. After he started his work, we decided to set up IPSA, to which his report will now go for implementation. I confirm to the House that IPSA is already up and running. We expect it, of course, to take Kelly as its text, and the current interim regime of allowances will continue and subsist until such time as the whole regime is taken over by IPSA.
On the question about proposals for changes in the legislation on the structure of IPSA, obviously if a new Act of Parliament is brought forward and a new authority set up, it would start its work and Parliament can keep the legislative framework under review. However, I do not think that we should be addressing the question of legislating to change the IPSA structure. The important thing is for it to be getting on with its work.
The right hon. Gentleman acknowledged that the important thing is not to take the proposals piecemeal and for the House not to pick out any one proposal, but that we should simply send the whole package to IPSA. However, he commented on the employment of relatives and accommodation. It is right to recognise, as Sir Christopher Kelly did, that a great deal of hard work is done by the spouses employed by Members of Parliament, which is much valued by constituents. Sir Christopher's proposal for a change in the system should absolutely not cause a cloud to hang over the heads of those who have done, and continue to do, good work in the public interest, and of course IPSA will not want to fall foul of employment law.
On accommodation, it is of course right that IPSA will need to look at the detailed implementation issues that will arise in moving from mortgages to rents or hotels. As the right hon. Gentleman said, we will need to look at how IPSA gets it right. It will of course need to keep an eye on cost, and cost will depend on implementation.
Sir Christopher Kelly deserves our congratulations and thanks. The report is comprehensive and thorough. There will of course be issues of detailed implementation, but does the Leader of the House agree that we would not expect IPSA to disregard any part of what Sir Christopher calls
"a package, not...a menu of options"?
Should not those colleagues who have expressed difficulties with some parts of the report recognise that we have a unique and privileged position-a position that we apply for every four or five years? The terms of that contract have changed. Those who do not like it have a choice as to whether they reapply.
The Leader of the House has rightly pointed out what has been done recently. It is only fair also to set out the criticism in Sir Christopher's report of what he describes as
"a series of piecemeal attempts at reform, some of which were announced while we were deliberating. These attempts have, at best, lacked coherence."
We have made some progress, but we should recognise that criticism.
Some of the recommendations cannot be implemented without changes in either Standing Orders or primary legislation. Despite what the Leader of the House said in response to Sir George Young, can she assure me that those will be considered as a matter of urgency?
It is clear that IPSA will deal with the detailed arrangements. Nobody doubts that, but may I renew the call for an opportunity for all right hon. and hon. Members-not just the lucky few who catch your eye this afternoon, Mr. Speaker-not to vote or amend the recommendations, but to debate them? When I called for such a debate last week, the Leader of the House said that
"the hon. Gentleman should make up his mind: does he really think it right that this House should pick over the question of our allowances when we have already decided to make that the responsibility of an independent authority? He cannot be on both sides of the argument".-[ Hansard, 29 October 2009; Vol. 498, c. 446.]
I am clear: Sir Christopher Kelly's proposals should be implemented in full without equivocation. In the light of her widely reported comments over the weekend, can she say the same, or is she trying, for whatever reason, to be on both sides?
After a disastrous and shaming year for Parliament, Sir Christopher Kelly has taken us back to where we should have been in the beginning when he says:
"Members of Parliament have the right to be reimbursed for unavoidable costs where they are incurred wholly, exclusively, and necessarily in the performance of their parliamentary duties, but not otherwise."
Is that not precisely correct?
I agree with the hon. Gentleman that the report should be seen as a package, not a menu of options, as Sir Christopher Kelly recommends. I also agree that Sir Christopher Kelly himself acknowledges the progress that the House has already made to improve the system, but nonetheless says that taking a piecemeal approach has meant that this progress has lacked coherence. That is why it is important that the Christopher Kelly proposals go to the Independent Parliamentary Standards Authority as a whole, rather than being dealt with piecemeal.
Obviously the further issues that Sir Christopher Kelly deals with-for example, the structure of the Standards and Privileges Committee and various structural issues to do with IPSA, which are not to do with the allowances regime package, which needs to be dealt with as a whole-are ones that we will need to consider.
On allowances, we should all be on the side of ensuring that the House can do its job. It will help the House to be able to do its job when Sir Christopher Kelly's proposals go to IPSA. It is not a question of our returning to the work that we need to do; the truth is that we have never stopped scrutinising legislation, holding the Government to account and doing the work of the House. We need to return to a situation in which the public have confidence that that is the case.
On a day when we mourn the loss of five of our servicemen, with many others seriously wounded, does that not put into perspective the question of allowances in our time? Is it not a fact that Sir Christopher Kelly is trying to end not just one year of frustration about allowances, but 30 years in which they have bedevilled the House? May I draw the Leader of the House's attention to Sir Christopher Kelly's suggestion that IPSA and the Senior Salaries Review Body look at the pay structures of Members of Parliament, so that in the longer term we can marry pay structures with allowances in such a way that the dreadful allowances system is abolished for all time and we can get back to discussing Afghanistan, the middle east, violence in Northern Ireland, the peace process, Iran and all the other issues, including the economy? Those are the matters that should occupy the House's attention.
My hon. Friend is absolutely right: that is the paramount role of the House. We should be dealing with issues of concern to our constituents and the country as a whole, as well as international issues, not spending a huge amount of time dealing with our allowances, important though they are to enable us to discharge our obligations on behalf of our constituents.
The Independent Parliamentary Standards Authority will administer our pay and pensions, which will be decided by the Senior Salaries Review Body. We have already decided not to vote on our pay in future. Sir Christopher Kelly suggests that perhaps that role too should be co-ordinated with the responsibility of IPSA, which is certainly something that we can consider for the future. However, the fundamental point is that we will no longer be voting on our allowances, just as we already no longer vote on our pay.
First, may I welcome the publication of Sir Christopher's report and the statement by the Leader of the House? I very much approve of the approach that she is taking to this matter. If any parliamentary procedures are required to implement what she laid out in her statement, she can be assured that my colleagues will be happy to support her.
As the fundamental systemic problem has arisen from the fact that Members of Parliament have been setting both their pay and conditions, and the standards of their expenses and allowances, it would be entirely wrong for Members of Parliament to attempt in any way to unpick Sir Christopher's report. In that context, will the Leader of the House ensure that there will be Government support for all of Sir Christopher's recommendations?
There was one issue on which Sir Christopher did not feel it appropriate to make a comment-namely the pay, expenses and allowances of Members who do not take their seats in this House. In the new circumstances, will the Leader of the House ensure that the House has the opportunity to vote on that issue?
I appreciate the right hon. Gentleman's comments and the support that he has given to the efforts that the House has taken as a whole to sort the situation out. He is right to recognise that, fundamentally, the problems have arisen because we have attempted self-regulation. Even with the best will in the world, the public do not have confidence that we should regulate our own affairs in that respect any more.
I know that there is discussion about the situation in Northern Ireland. That will have to be a discussion across all the parties, and I know that the right hon. Gentleman will be engaged in it.
My right hon. and learned Friend should know that the majority of people throughout the country would endorse her remarks, as well as those of the Kelly report, about family members of MPs, whose work and dedication has been very much in the interests of the taxpayer and our constituents. In that context, does she recognise that those employees have rights too? Will she ensure that their particular circumstances are drawn to the attention of the new standards authority, so that it can look properly at what the employment package involves for those who now face uncertainty about their employment prospects?
Under the Parliamentary Standards Act, that issue will be the responsibility of the Independent Parliamentary Standards Authority, which will of course have to comply with and respect employment rights. I should like to draw the attention of the House to what Sir Christopher Kelly said about family members who work for Members of Parliament. He said:
"Despite the publicity that a small number of cases have received, the Committee has no evidence of abuse occurring on a significant scale through the employment of family members. On the contrary, the Committee has heard evidence that many MPs' family members work hard and offer good value for money for taxpayers".
If the Independent Parliamentary Standards Authority is to be truly independent, is it not important that it regards Kelly as its agenda, and not its prescription? Before the authority considers these matters, would it not be right for the House to have a "take note" debate on Kelly?
No, I do not think that we should have a "take note" debate. It might be possible in the future to keep under consideration whether there should be a further debate, but I do not think that we want to get into a situation where we have a vote on the different aspects of Kelly. We have had an opportunity for Members to try to catch the Speaker's eye today. If there is a need for further discussions about this, we will have to consider that. The fact of the matter is that we are trying to move away from the House's preoccupation with our own allowances. Many hon. Members-more than 80, I think; myself included-gave evidence to the Kelly inquiry, and he drew up his recommendations and report with that in mind. The matter will now go to IPSA, which, under the Act, has the responsibility to consult Members of this House as well as others.
It has been the habit of a lifetime for us to spend a lot of time in the House debating our pay. We have now broken ourselves of that habit, and it was important that we did so. It has also been the habit of a lifetime for us to discuss our allowances, but we know that, every time we do that, we adopt a piecemeal approach and it causes dismay among our constituents, who, as my hon. Friend Sir Stuart Bell said, are asking why we are not discussing their jobs and their prospects. We have now set this independent system up, and that is how the matter is to be taken forward. I do not rule out the prospect of a debate in the future, but I hope that-in so far as it is in my power to do so-I may rule out the idea that the House will take Kelly and have a series of votes on all the different bits of it. That would be very undesirable.
We have all made a speech saying that we want nothing to do with the setting of our own pay and allowances, and that we would like those things to be determined by an independent body. When that independent body comes along and determines them, we will logically have no alternative but to accept that. If we do so, that and the other changes that we are making will finally give us a realistic chance of digging ourselves out of the dreadful mess into which the House has got itself.
I strongly agree with my hon. Friend's comments.
I very much welcome the Kelly recommendations-moving Westminster, as they do, towards the higher standard now operating in the Scottish Parliament. At the all-party talks on these issues, much hope was invested by everyone in all the parties that IPSA would deal with pay, allowances and expenses, so it must surely be for IPSA to take the Kelly report forward, and not for MPs to cherry-pick what they like from what they do not like.
Indeed. When we set up IPSA, and when we were discussing the Parliamentary Standards Act, our imperative was expeditiously to set up an authority with the specific remit of dealing with parliamentary allowances. The Justice Secretary, who took the legislation through the House of Commons, acknowledged at the time that, once IPSA was up and running, it might be able to take on a further remit-for example, that of pay. We are already safeguarded to some extent on pay, however, in that we have already decided not to vote on it. That matter could become statutorily embodied in IPSA in the future, but the most important thing is that the whole Kelly package on allowances falls to be considered by the authority and implemented for the next Parliament.
Is the hon. Member talking about the ministerial code and the ministerial payments?
There have already been changes in that, so that when a Minister leaves and subsequently rejoins the Government, the payment that they received on leaving is abated proportionately. That has therefore already been dealt with, which I am sure will meet with his approval.
I would like to thank the Leader of the House for her statement today, and also for her comments before today's statement. In relation to what Sir Christopher has said about the employment of spouses, was she surprised by his recommendation? In particular, was she surprised that, on page 58, he is in fact encouraging wife-swapping?
Sir Christopher Kelly sets out his argument in full in relation to the employment of those working for Members of Parliament. He takes up a debate that was already running strongly in the public domain, and it is not a question of our being surprised. This is a question of the whole package going to IPSA.
Does the Leader of the House recognise that, while many of us say that we must fully accept the Kelly recommendations, not all of us believe that they are as comprehensive or thorough as some have said? Indeed, they will invite the creation of some new anomalies and discrepancies that the new Independent Parliamentary Standards Authority will certainly have to address. Does she recognise that some of us are concerned that five years is too long a period for last orders in respect of certain classes of claims for certain classes of MP? There is a serious risk that the next Parliament will end up being a Parliament of double standards, because different standards will apply to the claims and expenses of different MPs. That is a very bad precedent for a legislative assembly to set.
I do not think that it is unusual, when changing from an old system to a new one, to have transitional arrangements, when hon. Members-or anyone else-have already entered into arrangements. The transitional arrangements should therefore apply. There is nothing unusual about that, and I think that people will understand it.
The Leader of the House said in her statement that the House of Commons had to "fully resolve this damaging episode", but does she agree that it cannot be fully resolved until the issue of flipping homes for the avoidance of capital gains tax has been investigated?
The avoidance of capital gains tax is a matter for the Revenue and Customs; it is its responsibility. As for the designation between main and second homes, that has already been addressed at the meeting, chaired by the Speaker, that was attended by all the party leaders, the Members Estimate Committee and the Chair of the Committee on Members' Allowances. At that meeting, it was agreed-and subsequently taken through by the Members Estimate Committee and put into effect-that there was to be no change in designation between a main and second home. Since May, there has been no possibility of that change being made. Even before then, if a proper, accurate description was not given to the Revenue about a second home, that would be a matter for the Revenue to look into so that it could deal with the tax issues.
In joining hon. Members in thanking Sir Christopher and his colleagues, may I ask the Leader of the House please to reconsider her answer to the question on a "take note" debate? There are various issues that many people would like to discuss. Two that I can think of are, first, whether allowances could be set for a Parliament and not changed each year, as the report has recommended, and, secondly, whether Sir Christopher and his colleagues have given sufficient attention to the needs of MPs who have young children, because it seems to me that their lives might not be quite so easy under his recommendations as they should be.
I will listen to, and reflect on, what hon. Members say about wanting a debate, but we all need to ask what the purpose of such a debate would be. We have all agreed that, if it was a "take note" debate, there would be no vote on it. Would its purpose be for hon. Members to make comments in the Chamber to IPSA, to enable it to understand hon. Members' position in the way that they want? If that is the purpose, that can be done either on the Floor of the House in a debate or by writing to IPSA. Bearing in mind the point we are at now, we must reflect quite carefully: we have had the Kelly report and IPSA is going to do its work. We should perhaps try to work according to an element of self-denying ordinance-as soon as I say it, I realise it might be beyond our ability-whereby having legislated for an independent authority, we actually allow it to get on with its work.