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Constitutional Reform and Governance Bill

February 1, 2010

Constitutional Reform and Governance Bill

Below are some interventions Mark made in a debate about the expenses system being moved under the auspices of a new Independent Parliamentary Standards Authority (IPSA).

Mark Field (Cities of London & Westminster, Conservative) :I agree with my right hon. Friend Sir George Young that it essential for us to put these matters on to a statutory footing, and I welcome the Government’s determination for that to be done. As my right hon. Friend said, nothing would be more damaging to the reputation of parliamentary democracy in this country than for the allowances scandal to permeate the next Parliament as it has permeated this one. These issues require urgent and definitive resolution, and, as a number of other Members have said, we owe it to the many people who will serve for the first time in the next Parliament to put the House in order, however belatedly. I want to speak briefly on two of the new clauses. I am mildly unhappy about the proposal in new clause 73 that IPSA will not take on fully fledged responsibility for the setting of MPs’ salaries until potentially as late as 1 April 2012. I appreciate that the Secretary of State said that that was of IPSA’s own doing, but we need to recall that this whole allowances scandal started because successive Executives over about the past 30 years refused or failed to implement Senior Salaries Review Body recommendations for salary increases. We heard a lot of grandstanding by party leaders over that period-and I acknowledge that leaders of Conservative, as well as Labour, Governments have been guilty of that. We therefore allowed a system to develop under which there was, effectively, a salary supplement through the allowances system, which grew like Topsy, especially after the resolution of the House in July 2001-without an SSRB recommendation-for a hefty 40 per cent. increase in the second-home allowance.

I fear that failure to get this system on to a proper footing, and therefore reliance on the interim measure that has been in place since January 2008, will result in further grandstanding by party leaders over the next two years, which risks a further injustice being done. What happens if the formula that was set in place in January conflicts with, for instance, a pay pause in the public sector? If we choose the path of least resistance, how can we suggest that MPs are not once again setting their own salary-the problem that started much of this episode, which has been so corrosive to parliamentary democracy in the past nine months? I would prefer IPSA to be given the authority at once. I accept that it will need to be in touch with the SSRB, and this may well take as long as a year, so we might not be able to do anything until April 2011. However, giving a long-stop date that is, effectively, two years in the future will bring forth the potential for there to be lots of problems, which will mean that this issue will not go away in the next Parliament, as all of us would wish.

I also wish to say a few words about new clause 71 on the membership of the Speaker’s Committee. I would have liked that Committee to have been abolished. We have a notional safeguard in place, as it is proposed that three lay persons should be appointed by resolution of the House of Commons, but we have to face facts. The Members Estimate Committee-the body that preceded the Speaker’s Committee-conducted itself, at the margins at least, in a disgraceful way. There was deliberate manipulation by party managers of all parties to ensure that, as far as possible, the public were kept in the dark. Why else did that body go to such unbelievable trouble to prevent publication of all the parliamentary expenses? We had a protracted High Court case that did great discredit to this House. I personally feel that the MEC-now the Speaker’s Committee-does not speak for me; I do not share the notion that it represents the interests of Members of Parliament. Rather, its behaviour has been one of the biggest problems. In view of what we are trying to achieve with IPSA, I would have liked all these matters to have been taken out of the hands of any such committee, and, indeed, out of the hands of the Speaker of the House of Commons.

These are relatively minor matters, and I appreciate that we now have to move forward with the recommendations before us. I therefore hope the Committee will be able to agree on most of the issues tonight. We have discussed the new clause in the name of my right hon. Friend the Member for North-West Hampshire and my hon. Friend Mr. Vara. I hope that the Secretary of State will give some consideration to the concerns in this regard. We should have a pre-clearance system, in order to avoid the terrible, and nonsensical, situation whereby open and transparent claims are entirely reversed some years further down the line. If we are going to have the IPSA machinery and a compliance officer in place, it is not beyond the wit of man to ensure that we also have such a system in place for the protection not only of Members of this House, but the taxpayer.

Mark Field (Cities of London & Westminster, Conservative): I am still slightly unclear about something, perhaps because I have not picked up some of the nuances of earlier interventions. Will there still be an overlap between what the compliance officer does and the work of the Select Committee on Standards and Privileges? Or is it envisaged that issues that are directly within IPSA’s ambit will be matters entirely for the compliance officer, and that the Committee will therefore deal only with other issues? A failure to create such a separation will lead to overlap and ever more confusion, which will not be very helpful and will be very expensive for the taxpayer.

Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour): Day by day, those responsibilities will not overlap, but there must be the overlap that I am describing. I think that the Committee accepts that. Without that overlap, the system could be subject to outrageous abuse. That is unlikely, given what the House and Members, whether they have transgressed or not, have been through in the past year, but one can ever be surprised. If there were such an abuse-a serious fraud, which might involve police prosecution-the case would go to the compliance officer and a civil sanction might be imposed, as might a requirement to repay money. However, if the abuse were particularly outrageous, the compliance officer might decide to refer the case to the Standards and Privileges Committee, with a view to the relevant person being expelled or suspended from the House. There is no rule here, any more than there is a rule in real life, that says that if one transgresses criminal law or a statutory code, the only consequences that will follow will be those related directly to the transgression of that law or code. If one transgresses criminal law and the case is serious enough, one might go to prison, but one might also lose one’s job. Police officers who transgress the criminal law and the disciplinary code may lose not only their liberty and their job, but, in extreme circumstances, their pension as well. When I was the Home Secretary, I had to take decisions on such matters. The measures I am outlining will run parallel to such systems. I hope that that satisfies the hon. Gentleman. We do not propose that there should be second-guessing, or two parallel systems of enforcement.

Mark Field (Cities of London & Westminster, Conservative) I recognise that, as the Secretary of State rightly says, all of us are busy, though I am sure that we will all have learned the lesson that all the forms and applications for expenses and allowances must be completed by us, and that we should not rely on office staff to do that. We all know that there have been some terrible abuses, but where an open and transparent claim has been signed off, the biggest concern and the aspect that has aroused the anger of many Members of Parliament on the grounds of natural justice has been the attempt at retrospection-a very successful attempt under Sir Thomas Legg-going back some years.

I have always said that the rules were far too lax and that, in many ways, Members cannot complain. None the less, the issue that arises, which my right hon. Friend Sir George Young has tried to address, is the need for some sort of clearance process. That would apply if we had a compliance officer. If an open and transparent claim is made and accepted, surely it is wrong that many years later a Member should be expected to repay or more importantly, even if repayment is made, should be seen to have committed wrongdoing, where in fact there has been openness, transparency and the opportunity for clearance. Does the Secretary of State not see that there would be great benefits from putting in place some sort of clearance process that would avoid such problems in the future?

Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour) I accept entirely the burden of what the hon. Gentleman says. The issue is how to achieve that. Let us suppose that in such a case, the authority says, “We shouldn’t have agreed this amount for training or for cleaning,” and the Member says, “Sorry, but you did, and I did this in good faith”-there was no trickery, and on the face of it, the claim was entirely consistent with the rules. One of the things that we need to consider between now and Report is how to ensure that there is a clear power available to the compliance officer, to the first tier tribunal and so on, to say, “There has been a technical transgression here. We accept now that the authority is right to say that there was an error, but this was nothing whatever to do with the Member, so we are not requiring any repayment.”

IPSA is clear, as are we all, that the rules must be much more categorical. Let us take as an example the issue that has not affected me, but has affected a number of Members, who are understandably sore about it-levels of cleaning costs, which were set retrospectively by Sir Thomas Legg at £2,000. My understanding is that some right hon. and hon. Members claimed considerably in excess of that. I am trying to remember whether cleaning costs are provided for. To the extent that an item is provided for, the parliamentary authority and the House have been much more specific.

The first way of avoiding the need for detailed advice is to be clear about what can be paid and what cannot be paid. That said, there will always be areas where discretion has to be exercised, just as the Revenue, day by day, has to exercise discretion, as do tax accountants, about what is wholly, necessarily and exclusively incurred in pursuit of the individual’s employment, which is the mantra for schedule E. Since that definition is taken straight from tax law, and is the fundamental test, aside from the specifics of the regulations as to whether an expenditure is acceptable, there is bound to be some scope for debate. I accept that some measure of guidance, good practice and consistency, which we did not get from the Fees Office all the time, will be very helpful.

The other side of this is that the Independent Parliamentary Standards Authority does not want to be in a position where somebody phones up and, in good faith, a member of staff says, “We think you should do such and such.” The member of staff may not be a senior member and is just giving informal advice, but that is regarded as holy writ. Nobody is suggesting that that should happen. I promise that between now and Report we will discuss the matter actively with colleagues here to try and reach wording that is acceptable to Members of the House and as far as possible to Sir Ian Kennedy and his colleagues on the authority.

New clauses 73 and 84 and new schedule 9 relate to Members’ pay and pensions. The Committee will recall that on 3 July 2008 we took the long-overdue decision to end the practice, which was unseemly to say the least, of determining our own pay and voting for our own pay increases. We passed a resolution saying that responsibility for determining pay should go to the Senior Salaries Review Body, and we established a formula for that. The Kelly Committee argued that one body should be responsible for considering in the round, and determining the full remuneration package for, Members’ pay, pensions and expenses. We now propose that all that, in respect of pay and pensions structure, be shifted from the SSRB and the House to the Independent Parliamentary Standards Authority.

Mark Field: Although I have a lot of sympathy with what the hon. Gentleman has to say, does he not understand that it is not a matter of whether the pension fund is working well and whether the trustee arrangements provide an arm’s length between Parliament and the taxpayer? The issue is the perception that we are enriching ourselves. As my hon. Friend Peter Bottomley rightly said, a lot of MPs’ spouses do a fantastically good job and provide tremendously good value to the taxpayer, but none the less there is a perception of our own enrichment. The changes therefore apply not only to employing spouses and issues to do with our salary but to our pensions. We have a different and rather more generous pension scheme than many others, even in the public sector. The public perception means that IPSA needs to have its tentacles across this matter, and that is no reflection on the ability or otherwise of the trustees who have done their work in this regard over the past few years.

Nick Harvey (North Devon, Liberal Democrat): I sympathise with what the hon. Gentleman is saying, but I said categorically at the outset that I accept that the world has changed and that the Kelly report made two recommendations on pension arrangements. Specifically, IPSA will have a say in what we get out of the scheme and what we pay into it. I am not trying to resist that at all. The hon. Gentleman just used the expression “IPSA needs to have its tentacles across this matter”. I am not resisting that-I am merely resisting the idea that IPSA should delve its tentacles into these matters in an attempt to run the whole thing. It is possible to hit the right balance but, as the Bill is drafted, the Government have failed to do that. I would welcome it if they would get into a meaningful dialogue with the trustees so that on Report we can arrive at some arrangements that will take account of the points that the hon. Gentleman is making while leaving a viable pension arrangement with a scheme that will have the same sort of autonomy and power to organise its own affairs that any other pension fund would take for granted.