Standards and Privileges

– in the House of Commons at 4:41 pm on 16th May 2011.

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Photo of George Young George Young The Leader of the House of Commons 4:41 pm, 16th May 2011

I beg to move,

That this House—

(1) approves the Fifteenth Report of the Committee on Standards and Privileges (House of Commons Paper No. 1023);

(2) endorses the recommendation in paragraph 39; and

(3) accordingly suspends Mr David Laws from the service of the House for a period of seven sitting days, beginning on Tuesday 7 June.

It is always regrettable when the House finds it necessary to suspend an hon. Member, as it does today. The facts of the case are set out in detail in the Parliamentary Commissioner for Standards’ report to the Standards and Privileges Committee. The Chair of that Committee may catch your eye in a moment, Mr Speaker, so I will not rehearse them.

This has been a lengthy inquiry, not least because Mr Laws invited the commissioner to examine every aspect of his claims for additional costs allowance over an eight-year period. The commissioner has completed his inquiry as quickly as is consistent with the need for absolute rigour, and a complete chronology is set out at paragraphs 29 to 34 of his report. On behalf of the House, I would like to express our thanks to the Committee and to the commissioner and his team for their fair, diligent and impartial work in this case, and indeed in other cases. It is clear that the Committee has considered the commissioner’s findings carefully and has taken into account all the circumstances of the case in arriving at its recommendation of a seven-day suspension.

The House will recall press speculation in the days before the report was published. The question of whether this was a result of premature disclosure of the Committee’s report and, if so, by whom, is a matter for the Committee itself to consider, and I understand that the Chair of the Committee has announced an inquiry into this.

It has been the practice of this House to endorse the findings of the Committee on Standards and Privileges, and I invite hon. Members to do so this afternoon.

Photo of Helen Jones Helen Jones Shadow Deputy Leader of the House of Commons 4:43 pm, 16th May 2011

May I begin by echoing the thanks of the Leader of the House to the Commissioner for Standards and to the Committee on Standards and Privileges? The nature of the matters that they had to investigate required a detailed investigation by the commissioner and careful scrutiny by the Committee, and the whole House is grateful to them for their diligence.

The matters under consideration that have led to the motion on today’s Order Paper are extremely serious ones that concern breaches of the rules over the very long term. No one should underestimate their seriousness. The commissioner found that from 2001 Mr Laws submitted lodging agreements that gave a false impression of his relationship with his landlord and of their shared use of successive London properties. The commissioner found that he claimed higher rent for the use of two London properties than was justified either under the terms of the lodging agreement or as a reflection of the arrangement that he had for living with his partner in those properties.

The commissioner also found that the right hon. Gentleman wrongly claimed for building work on the second property that should have been covered by the rent. In addition, he dealt with the separate matter of wrong claims for phone bills, which, as Members who have been here for some time will know, were not claimable under the additional costs allowance.

I think it fair to remind the House that the commissioner reached his conclusions based on the standards expected at the time, and not under a retrospective reinterpretation of the rules. [ Interruption. ] A Member on the Government Front Bench is saying that that is not right, so perhaps I can clarify the matter for him. Claims for phone bills in Somerset and for a mobile phone were judged by the commissioner not to be claimable under the additional costs allowance, because the ACA related to a London property. Those were the rules at the time.

In considering the report, the Committee made it clear that it agreed with the commissioner that from 2005 onwards the right hon. Gentleman’s main home was, as a matter of fact, in London, not in Somerset. The rules at the time made it clear that any hon. Member who was in doubt about which property they should declare as their main home should have sought advice. The right hon. Gentleman failed to do so.

The Committee endorses many of the commissioner’s conclusions. It makes clear the seriousness of the breaches in agreeing with the commissioner’s conclusion that while the arrangement for the first property may have represented a good deal for the landlord, it did not represent a good or even a reasonable deal for the House. The Committee also makes it clear that the breaches in relation to the second property were even more serious, because the right hon. Gentleman had made a significant financial contribution to the purchase and upgrading of the property.

The right hon. Gentleman has said that he was concerned to preserve his privacy. However, it has always been the rule of the House that when personal interests and the public interest conflict, matters should be resolved in favour of the public interest. Sadly, we therefore have to conclude that, because the breaches were serious and took place over a long period, the penalty that the Committee proposes of a suspension from the House is the right one. The Opposition therefore support the motion.

Photo of Frank Field Frank Field Labour, Birkenhead 4:47 pm, 16th May 2011

May I ask the Leader of the House two questions that arise from the report? First, how does the Committee on Standards and Privileges go about its business to ensure that one judgment is consistent with another? The second question relates to how long it takes for inquiries to be completed in the way that the Leader of the House has described.

On the first question about equity between Members, we are not in a position to know how many Members from the previous Parliament will end up in court. I therefore do not wish to cite examples of Members from the previous Parliament whose record of claiming moneys from the public purse was, on the face of it, pretty appalling. However, so far, some of those Members have not even had their knuckles rapped with a ruler, let alone been the subject of a report of this nature, which is handed into the House for it to comment and vote on. Will the Leader of the House tell us something about how the Committee goes about its work to ensure that in judging one Member it bears in mind the behaviour of and the judgment it has come to on another Member?

My second question relates to the length of time the inquiry has taken. Many Parliaments ago, I was asked to chair the Social Security Committee. One of our tasks was to look at the Maxwell theft of pension funds. We confronted layer upon layer of deceit. We completed our task, made our recommendations, suggested the shape of a new pensions Act, and were invited by the then Secretary of State to shape that pensions Act within a year—less time than it has taken to undertake this inquiry and report back to the House. I would be grateful if the Leader of the House addressed whether the speed, thoroughness and consistency of the commissioner’s work is appropriate.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee 4:49 pm, 16th May 2011

I will pick up a couple of points that my right hon. Friend Mr Field has just made, but I first wish to say something about the leaks that have occurred. There have been two types of leak in connection with the report. First, from Sunday 8 May onward, there has been a steady trickle of comment on the memorandum of the Parliamentary Commissioner for Standards to the Standards and Privileges Committee, which was, as is customary, sent to Mr Laws for his comments as well as to Committee members and to the Attorney-General, whom Standing Orders make our adviser. My first impression was that that comment could well have been based on informed speculation, but I no longer hold that view, because on Wednesday morning the Committee’s recommendation was leaked to the media. We immediately instigated a leak inquiry, and it is not appropriate to say more at this stage, as that inquiry is now ongoing.

I will pick up two issues raised by my right hon. Friend the Member for Birkenhead. One is the length of time taken. He will see from reading the report that it goes far wider than the allegations that were made against the right hon. Member for Yeovil in the media last May, and I suspect that that was one reason for the time taken. However, I say to my right hon. Friend that the timing is wholly in the hands of the commissioner, who reports to the Committee and publishes a memorandum when he is ready to do so. The evidence that he takes is entirely a matter for him.

The other issue that my right hon. Friend has mentioned concerns the comparison of one case with another. I will mention in my speech the circumstances of this particular case and why we have come to the recommendations before the House. I have not commented on the matter before, because I believe it is for the House to judge, not the media or commentators. The extent of reporting of what the commissioner and the Committee would say, and what it would mean for the right hon. Member for Yeovil, has been unfortunate. It meant that the press have perhaps not looked as carefully as they might have done at what we actually said.

The Committee has been attacked from one side for being too severe and from the other for being too soft. It would be complacent to say that we got it about right, but I wish to set out what the report says and why we said it. First, I urge those who say that the Committee has been too severe—many of them are in this House or in another place—to examine what the Committee actually found and the way in which that compares with other breaches.

From 2006 onwards, the arrangements of the right hon. Member for Yeovil were simply and explicitly against the rules, because he rented from a partner. He has said that he did not regard his landlord as his partner for the purposes of the Green Book. In 2007, he gave his landlord £99,000, which was a free gift but which was put towards the purchase of a London property that the two shared. He also contributed to building work. As the report states:

“Mr Laws had made significant financial contributions to the purchase and upgrading of the property. Such commitments are unusual between landlord and tenant, or even between friends. In consequence he should have had no doubt that he and his landlord were ‘partners’ for the purposes of the Green Book.”

Photo of Kevan Jones Kevan Jones Shadow Minister (Defence)

My right hon. Friend will have seen the volume of appendices to the report, which includes evidence from Mr Laws such as a rental agreement, which states at item 5:

The Lodger will be responsible for any damages or breakages caused by him/her”.

How could the claim of £2,000 for renovation work be covered by that? There is no other reference in any of the agreements to any contribution that the lodger should make to any major renovations of the property.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

That is true. The commissioner commented on that claim in his memorandum, and it was taken into account when we came to make the recommendations that are before the House.

The right hon. Member for Yeovil was in breach before the financial contributions that I have described, by wrongly claiming that his main home was in Somerset rather than in London. It is clear that he was not the only Member who designated the wrong property. When the pattern of nights spent at two properties were changing, it would be easy to assume that the main property was the one on which a mortgage was held. If that were the main issue in the period up to 2006, it might easily have been put right, but the problem was that the right hon. Gentleman’s conduct was designed to hide his real circumstances, which formed a pattern with his later breach of the rules.

There has been a great deal of press comment on this case, much of it before the Committee reported. It has been suggested that the right hon. Gentleman saved the public money, and that that makes his conduct all right. It is certainly possible that other, proper arrangements might have been more expensive. Clearly, there could have been substantial claims against the Somerset property, but they were not made, so we cannot know precisely what would have been approved. We must judge the arrangements that were actually in place, not arrangements that might have been made. As the report says:

“Mr Laws contends that the payments were lower than they would have been had he claimed on his Somerset home, or made other permissible arrangements. In our view, it is inappropriate to judge whether the claims on property A are appropriate by reference to potential payments on another property, which is not in fact claimed for.”

Photo of Andrew Slaughter Andrew Slaughter Shadow Minister (Justice)

The Committee has dealt with the false representation allegations—the appropriateness of the penalty, which hon. Members are here to judge, does not matter—but my submission is that it has not dealt adequately with the quantum of claim, other than by saying that the rent was above the market rent and that there were

“contributions towards building repairs and maintenance”.

The Committee and the commissioner did not go into the fact that the rent was up to 50% more than the market rent, or that sums of up to £100 a month were being charged for each of council tax, utilities, parking the car in the driveway, maintenance repairs and the purchase of capital equipment. Why has the Committee not dealt with those sums on aggregate? That is a huge amount of money for a lodger to pay to his landlord.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

My hon. Friend may wish to comment on that further, but I wish to make my comments on behalf of the Committee.

What is clear is that the rents charged to the public purse were excessive, and that charges were made for repairs that would not have been included in any normal rental arrangement. It is impossible to tell exactly how much more was charged than should have been, but that is because of the right hon. Gentleman’s desire for secrecy.

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

No—I shall just carry on for a few minutes, if my hon. Friend does not mind.

The commissioner’s report suggests that the public purse was overcharged by between £80 and £270 per month, even in comparison with assured shorthold tenancies. Property advisers considered that the rent in the right hon. Gentleman’s lodging agreement was between £209 and £370 a month higher than the market price.

The right hon. Gentleman and his supporters say that he acted to preserve his privacy. Extensive press briefings suggested that the breach would be somehow less blameworthy if that were the case, but the commissioner expressed his sympathy for the right hon. Gentleman, and the Committee recognised his motivation. However, there were other ways to preserve privacy. He could have refrained from claiming. Alternatively, he could have designated his main home properly, which would have meant that there would be no need to conceal receipts that might have identified his landlord.

The right hon. Gentleman instead took the decision to preserve his privacy by concocting a rent agreement and, wherever possible, claiming below the receipts threshold. He told the commissioner:

“After the receipts threshold changed I reduced my claims below the threshold.”

Ultimately, as the report says, this case is about the fundamental principles of the code of conduct, which says, and has always said:

“Members shall base their conduct on a consideration of the public interest, avoid conflict between personal interest and the public interest and resolve any conflict between the two, at once…in favour of the public interest.”

As the Committee said:

“We consider the rental agreements submitted between 2003 and 2008 were misleading and designed to conceal the nature of the relationship. They prevented any examination of the arrangements that in fact pertained over the entire period.”

That is why this case is worse than many others in which the commissioner has found there has been a breach of the rules of the additional costs allowance. In many of those cases, the Members concerned had consulted the department of finance and administration, and in some cases both the department and independent valuers, so there was no intention to deceive. In one case, the Member’s circumstances changed, so that arrangements that were expected to be temporary lasted longer than expected.

In contrast, the case before us involved a deliberate attempt to conceal the Member’s real living arrangements that continued for many years. It is clear that he recognised the potential conflict between the public interest and his private interest. By omitting to seek advice, however, he made himself the sole judge of whether that conflict was properly resolved. It was inappropriate for him to be judge and jury in his own case. As the commissioner commented, it can never be acceptable to submit misleading documents to those charged with overseeing public finances. As this case shows, the right hon. Member’s desire for secrecy led him to act in a way that was not compatible with the standards expected of an MP. Whatever the motive, I do not think that is acceptable.

Now I will address the concerns of those who think that we have been too lenient. Since the Committee reported, my hon. Friend Thomas Docherty has asked the police to investigate. There is a protocol between the police, the commissioner and the Committee providing for liaison between the commissioner and the police, if either of them has concerns. The police will not comment on individual investigations, and the commissioner is also understandably reluctant to comment on such matters, even to the Committee. However, the fact that the commissioner has reported to us suggests the Member’s behaviour is unlikely to have been criminal.

I have already explained why we felt this case was more serious than others, but there were mitigating factors. As we stated in the report:

“Not only has Mr Laws already resigned from the Cabinet, his behaviour since May 2010 has been exemplary. He quickly referred himself to the Commissioner, has already repaid allowances from July 2006 in full, and has cooperated fully with the Commissioner’s investigation. This behaviour has influenced our recommendation.”

Photo of Jim Dowd Jim Dowd Labour, Lewisham West and Penge

The Committee said that the right hon. Member’s behaviour had been exemplary since the matter became public knowledge, and the commissioner himself, in paragraph 324 of his report, stated that it was to his

“considerable and personal credit that, when his living arrangements came to public attention” he referred himself. Did the Committee calculate what he might have done had it not come to public attention?

Photo of Kevin Barron Kevin Barron Chair, Standards and Privileges Committee, Chair, Standards and Privileges Committee

No, it did not.

The repayment was one of the mitigating circumstances. The voluntary payments went further than the circumstances at the time required. The outstanding amount related to rent that might or might not have been over-claimed and not to expenses claims that were wholly wrongly based, as in other cases that sadly have come before the House. As in other cases where Members have over-claimed, we have clawed back the overpayment. Given the uncertainty over what a true comparator should be, we calculated the maximum overpayment, and it was only because it was within the amount that had been paid back, over and above housing claims, that we made no further recommendation.

It has been suggested that recommending that the suspension should begin after the recess is part of a plot to reduce the right hon. Member’s fine. It was not put in, as one of the Sunday papers suggested, by political partisans on the Committee. The Committee considered carefully and decided that a suspension of seven days was appropriate. It would have been arbitrary and unfair to have extended the suspension simply because a recess fell during the period. In 2007, the Committee recommended that George Galloway’s suspension should start after the summer recess for precisely the same reasons. In that case, he got himself named in the House and suspended in the last week of sitting, so he lost his salary for the entire summer recess plus the 18 days that the Committee recommended. In this case, we felt that it would have been wrong to have started the suspension today—if that is what the House agrees—because we knew that we are entering a short recess. It would have been unfair and resulted in a longer suspension than the one recommended in our report. If the motion is agreed to, approximately £1,500 of salary will be withheld as a result of the right hon. Member’s suspension. I recommend the report to the House.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West and Penge 5:05 pm, 16th May 2011

I will not detain the House too long. I realise that we have immensely important business to discuss later, and we should get on to it as soon as possible. However, this matter is not unimportant. Judging from the number of Members seeking to take part in the debate on the report, I fear that it would otherwise have slipped quietly into parliamentary history. We have realised over the past few years just how tainted this House’s reputation has become vis-à-vis not just the conduct of some Members, but how the way in which we deal with them is perceived.

I do not want to go into extreme detail about what Mr Laws has done—or not. The commissioner has conducted a characteristically scrupulous and systematic investigation of the events, and the Committee and all its members have followed in the same vein. I will not seek to divide the House on the recommendation, which I am sure will be agreed. However, I fear that the way in which the case has been dealt with and the conclusion that the Committee has presented create the danger of emphasising the idea that, superficially at least, there is one rule for some Members of this House and other rules for others. Some are taken before the courts—and, indeed, imprisoned—for their conduct; some get barely a slap across the wrist; and others escape scot-free.

I accept that the speculation around this case is nothing to do with the right hon. Gentleman personally, but so much of the comment outside this place—I accept, too, that neither this House nor any Member is responsible for such comment—is about how much time he should serve not before he is brought before the courts or sent to prison, but before he is brought back into the Cabinet. That changes the aspect and the proportion of this case entirely. The report makes it plain that there has been a systematic, calculated and flagrant pattern of behaviour by the right hon. Gentleman, which, describe it as we might—deceit, deception, fraud—amounts to dishonesty. If this House is to rebuild its reputation we need not only procedures that are, to quote an oft-repeated phrase in the report, “above reproach”, but systems that are seen to treat each and every Member of this House in the same fashion. I do not think that we have that at the moment—I do not criticise the report; I am sure that we will pass it and move on—but it is for the authorities and the Committees in this House to ensure that one simple procedure applies to everybody.

As the Chair of the Committee, my right hon. Friend Mr Barron, has said, this matter is now under investigation by the police because somebody has referred it. [ Interruption. ] I am told that he did not say that, in which case, we need to refer it. However, it is equally true that in other cases, the police have not waited for a referral for matters to be investigated, but have taken it upon themselves to investigate whether there was any criminal or corrupt element in Members’ behaviour. Indeed, matters that for a while fell within the purview of the commissioner were passed on, because the police had commissioned investigations into whether criminality and wrongdoing had taken place. There are those who have said that Members found guilty of serious wrongdoing should resign and leave this House, triggering a by-election—so much so, indeed, that the current Deputy Prime Minister said in his first address to the Liberal party conference that he wanted to add a “Derek Conwayclause.

Photo of John Bercow John Bercow Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission, Speaker of the House of Commons, Speaker of the House of Commons, Chair, Speaker's Committee for the Independent Parliamentary Standards Authority, Chair, Speaker's Committee on the Electoral Commission

Order. The right hon. Gentleman, the Chair of the Standards and Privileges Committee, made a passing reference—it was not, if I remember correctly, an evaluative one—to the police. Of course the hon. Gentleman is perfectly at liberty to make clear to the House his view about the merits or demerits of the report and its recommendations. However, I urge the House to focus on the specifics of this report alone and not to engage in what might be called a Second Reading debate about the differential treatment of particular cases, and we certainly cannot get into a general discussion about whether or when the police are involved.

Photo of Jim Dowd Jim Dowd Labour, Lewisham West and Penge

I accept that, Mr Speaker, and I will abide by your ruling. I asked for your guidance before the debate, because I fear that the niceties and technicalities of parliamentary procedure might reduce common sense to zero in this case, and that the public at large will not understand the import of events.

I accept the report, but I still think that we need a procedure that is open and that has clear stages, regardless of whether the matter in question is in the hands of the House authorities, of Members’ Committees or of officials, or of whether it has entered the domain of a public investigation. We have not got the balance right in the report not because of any failing by the Committee, but because our procedures are still ineffective. We have tried to overhaul the expenses system, which was the genesis of this case, but I do not believe that we have got our administrative arrangements right in this House. The Committee continues to do a good job, as does the commissioner, but we must concentrate on creating a system that not only treats everyone fairly and equally but that is seen to do so.

Photo of Clive Efford Clive Efford Labour, Eltham 5:11 pm, 16th May 2011

Like my hon. Friend Jim Dowd, I have concerns about the question that the report raises of consistency in dealing with individual cases. It would be wrong if we did not raise these matters on the Floor of the House, because the concerns—certainly those of Labour Members—about how these reports are dealt with must be addressed if we are to deal with similar issues in the future. I make no criticism of the Committee, the commissioner or anyone else.

The conclusion was reached that Mr Laws had behaved in an exemplary fashion since being placed under investigation, but I hope that any Member of this House would behave in that way and co-operate fully in such circumstances. Having spoken to some hon. Members who have been under investigation, I received the impression that they did exactly that.

I have one or two questions about consistency, which is all that I am bothered about. I understand that at least one case went to the Committee with the recommendation that it be referred to the Metropolitan police. What criteria were used to reach that judgment? I do not understand that, and I want to understand, because I am concerned about how these reports are written and how different Members are dealt with. What criteria does the commissioner use when he decides whether a case should go to the Metropolitan police?

Also, how many Members have claimed expenses without submitting receipts up to the £250 limit? I understand that some Members who have been investigated by the Metropolitan police and taken to court have been prosecuted for breaching that rule. How many of them, when found to be in breach of that rule by the commissioner, have been allowed to pay the money back?


The mans a thief pure and simple, if it was a man from any council estate he would be in prison, where’s the justice in this,

Submitted by Briam Miles

Photo of Kevan Jones Kevan Jones Shadow Minister (Defence)

The report states that Mr Laws stopped claiming when the rules relating to the maximum amount changed. Did my hon. Friend find it strange that the reason he gave for not putting in receipts was to disguise this relationship with his landlord, even though the landlord’s name was on the tenancy agreement?

Photo of Clive Efford Clive Efford Labour, Eltham

I hear what my hon. Friend is saying, but if he will forgive me, I do not want to get drawn into the detail of the case against the right hon. Member for Yeovil. The concerns that the report has raised for me are general ones about how we should deal with everyone who comes under investigation, because, let us face it, any of us could come under investigation if someone made a complaint against us, and we would all want to be dealt with under the same rules.

Who has been allowed to pay back money and on what criteria? On what criteria have they been referred to the Metropolitan police, and on what criteria have they been dealt with by the Committee and had a penalty imposed on them, as recommended to us today? Does the fact that Members offer to pay the money back make a difference? This report refers to the fact that the right hon. Member for Yeovil paid money back, which seems to have been taken in his favour. Have other Members made such offers and, if so, has that affected how they have been dealt with?

I have read the report, and I have highlighted several passages that appear to be inconsistent. I find it difficult to understand, for example, how someone can be a lodger in a house to which they have contributed £100,000 for its purchase and can then state to the Committee that they have no financial interest in that house and that the financial interests of the landlord and the lodger are completely separate. I find that sort of thing very confusing and very inconsistent, and I want to know what criteria are being applied to MPs when these matters come before the commissioner and the Committee. There are serious inconsistencies in what is happening here, and I believe that they are worthy of further investigation.

Question put and agreed to .