Wednesday 16 July
Opposition Day - Members' Allowances
Mr. Speaker: We now come to the main business, an Opposition day debate on Members' allowances. I have selected the amendment in the name of the Prime Minister.
Mrs. Theresa May (Maidenhead) (Con): I beg to move,
That this House recognises growing public concern on expenses and allowances for hon. Members and Members of the European Parliament (MEPs); believes that the minimum requirements for tackling the problem include regular reporting and appropriate auditing of the use of expenses and allowances, the publication of claims made, broken down by type, in relation to each allowance and claimable expense, the publication of the names and salary bands of all relatives employed by hon. Members and the abolition of the so-called John Lewis list; further believes that UK MEPs should abide by the same rules and practices as hon. Members, with particular regard to the repayment of surpluses, published annual statements verified by independent accountants and overseen by a compliance officer, the publication of the names and salary bands of any relative employed and regular reporting of expenses and allowances; and resolves that, notwithstanding its decision of 3rd July, hon. Members should no longer be able to claim reimbursement for furniture and household goods with effect from 1st April 2009.
Some hon. Members may wonder why, two weeks after a debate on MPs' expenses and allowances, we have brought forward another motion on the subject. Two weeks ago, the Commons had the opportunity to put its house in order, to clear its name and to go some way to restoring public confidence in Parliament as a body and hon. Members as individuals. It failed to do so. Members voted to keep the John Lewis list and rejected a system of external auditing. The newspapers, which had welcomed the report from the Members Estimate Committee, were accordingly negative about the vote taken by this House. Of course, we should not be driven by the media- [Laughter.] I say to those hon. Members who are laughing that we should listen- [Interruption.]
Sir Patrick Cormack (South Staffordshire) (Con): Will my right hon. Friend give way?
Mrs. May: If my hon. Friend will allow me, I should like to make a little progress with my speech first, but I assure him that I am happy to take interventions later. We should not be driven by the media, but we should listen to the views of our constituents. It is incumbent on every Member to understand the depth of feeling on the issue outside the House. The result of the vote on the MEC report has compounded a general lack of respect for politicians.
Mr. Don Touhig (Islwyn) (Lab/Co-op) rose-
Mrs. May: As I have just said to my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack), I shall be happy to give way in a few minutes. I should just like to make a little progress with explaining why we brought forward such a debate at this time.
We believe that the matter is so important that we should not let it rest after the vote on 3 July. I hope that the House will show that, having reflected on its decision on that day, it is now willing to move forward and make the changes needed to restore public confidence. In short, we need to show not only that we recognise the depths to which we have sunk in the public mind, but that we accept our responsibility to do something about it.
We are honourable Members, but our failure to recognise the concern outside the House about our processes and that people expect us to adopt the best practice shown in the private and public sectors, has led to cynicism and, I believe, damage to the reputation of the House, and we need to address that. That is why we have chosen today to show leadership on this issue, to debate the motion to show that Members of Parliament take this seriously and that we are willing to clean up our acts and be deserving of the office that we are privileged enough to hold.
Sir Patrick Cormack: This is a bit reminiscent of the nasty party speech that some of us remember. It really is a pity that this has become a party political issue. This is a matter for the House of Commons, and because today we have a helpful written statement from the Leader of the House, and because the Government amendment is not all that different, would it not better serve the interests of the House and of our constituents if the Leader of the House, the shadow Leader of the House and the Liberal spokesman put a collective hot towel round their heads, went away and came back with an agreed position that we could all adopt, without a vote, so that we could get on to debating the issue that really does concern our constituents? Before sitting down, I want to apologise to my right hon. Friend for having to leave before the end of the debate, but I am chairing my Select Committee.
Mrs. May: When my hon. Friend refers to getting on with issues that concern our constituents, only on Tuesday of this week I had an e-mail from a constituent raising a number of issues relevant to my constituency, but it started with this sentence:
"Talking amongst my friends, the anger does not subside with regard to MPs' expenses and the way in which public funds are being used to finance second homes and pay family."
That is a reflection of the views that constituents hold on this issue.
Mrs. May: I should be grateful if hon. Members would allow me to answer one intervention before I take any more.
That is a reflection of constituents' views on the issue. We are offering the House an opportunity to come to a consensus on a position that would move the House forward in a way that we failed to do on 3 July.
Mr. Touhig: The right hon. Lady referred to our decision a week or so ago on external auditors. Would she accept that the National Audit Office is a credible
Mrs. May: I will come on to the statement made by the Leader of the House and the Government amendment in relation to the National Audit Office. In fact, that amendment does very little to take us further than the present position of the NAO as the auditors of the House, because it talks about processes, not about going behind Members' signatures, which was the point of the external audit proposals in the MEC report that were rejected by the House.
Mr. Jim Devine (Livingston) (Lab) rose-
Mr. Douglas Hogg (Sleaford and North Hykeham) (Con) rose-
Mrs. May: I give way to the hon. Gentleman and then to my right hon. and learned Friend.
Mr. Devine: The right hon. Lady is absolutely right. My constituents are talking about this, and their concern is that they will see the situation where the only people who can come to this place are rich Tories. I have been told that the leader of the Conservative party has a £20 million trust fund. Is that the case?
Mr. Speaker: Order. These are personal matters. [Interruption.] Order. Hon. Members know the rules. If an hon. Member is going to be criticised or attacked they should be notified in advance.
Mrs. May: Thank you, Mr. Speaker.
Of course we want people from all sorts of backgrounds to be able to play their part in this House, but we also need to ensure that taxpayers' money is being used properly and that our constituents and taxpayers see that it is being used properly.
Mrs. May: If hon. Members will just be a little patient, I said that I would give way to my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg). I will then give way to the hon. Member for North Southwark and Bermondsey (Simon Hughes) and then to the hon. Member for Milton Keynes, South-West (Dr. Starkey), who has been seeking to intervene rather a lot, and then I should like to make some progress.
Mr. Hogg: May I associate myself with the comments made by my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack)? Historically, this matter has been for the House, not for whipped party votes. Therefore I have difficulty in understanding why it is being debated on the Supply day. Incidentally, as we do not live in unfurnished boxes, why should there be a prohibition on reimbursement for furniture and household goods? Provided that it is modest, transparent and audited, what is the objection?
Mrs. May: I shall expand on that point later in my speech. I believe that it is one of the issues of most concern to our constituents. It is not essential for Members who come to the House and look for other accommodation to have a flat of their own that they need to furnish.
My right hon. and learned Friend mentioned whipped votes on this issue; I merely point him to the fact that it is because the Government were unwilling to stand by the Prime Minister's undertaking to support the Members Estimate Committee report-they failed to whip the votes-that the House is in this position today.
Simon Hughes (North Southwark and Bermondsey) (LD): The thrust and direction of what the right hon. Lady is saying has warm support from the Liberal Democrat Benches. However, she must accept that we would not be in the mess that we are in today if 21 Conservative Members of Parliament had not voted against openness and transparency, rather than in favour of it. If they had voted with her, what she and I want would have gone through on 3 July.
Mrs. May: I note the hon. Gentleman's support for the general thrust of what I am saying, but I merely say this to him. The House would not be in this position today if the 29 Liberal Democrat Members who stayed away had turned up to vote on 3 July. They included the right hon. Member for Sheffield, Hallam (Mr. Clegg), who, significantly, failed to show leadership on the MEC report.
Mrs. May: I did say that I would give way to the hon. Member for Milton Keynes, South-West as well.
Dr. Starkey: I thank the right hon. Lady. May I urge her to take the wise advice given her by the hon. Member for South Staffordshire (Sir Patrick Cormack)? I do not often agree with him, but I do on this occasion.
Mr. Simon Burns (West Chelmsford) (Con): You don't often smile, either.
Dr. Starkey: I shall pass over the misogyny from the Tory Benches, which one expects; I sympathise with the right hon. Lady on that, as she also suffers from it. I draw her attention to how the debate has gone thus far and point to the evidence that it is giving of the danger of trying to make this a party political issue. In particular, members of the public may recall that the most stupendous examples of abuse have largely come, in the last Parliament and this, from members of her party.
Mrs. May: On that latter point, I should say that there are examples of problems with the use of allowances expenses in respect of Members from all parties in the House.
Chris Bryant (Rhondda) (Lab): Name them.
Mrs. May: I could name hon. Members from the Labour party, but I do not intend to, because I want this debate to be about how we take the House forward.
Mr. Kevan Jones (North Durham) (Lab): Will the right hon. Lady give way?
Mrs. May: No. I said that I would make progress after I had taken the intervention from the hon. Member for Milton Keynes, South-West; I shall take some more interventions later in my speech. As I think hon. Members realise, I am normally generous in taking interventions.
I say to the hon. Member for Milton Keynes, South-West that the interventions that there have been that suggest that everything is tickety-boo and that we do not need to look at the issue again reflect an unwillingness to listen to the views out there. It is for all of us to understand those views.
Judy Mallaber (Amber Valley) (Lab) rose-
Mr. Speaker: Order. The right hon. Lady is not giving way. Ms Mallaber, you should sit down.
Mrs. May: As a party, we have taken a lead in ensuring that information is published about Conservative MPs. In October, we called for greater transparency. My right hon. Friend the Leader of the Opposition announced the introduction of the right-to-know form, under which all Front-Bench Conservative MPs are required to detail all their expenses and allowances. The overwhelming majority of Back-Bench Conservative MPs are also providing that information, which will all be published later today.
We are committed to transparency, disclosure and the right-to-know details, and the information will be published. It will include details about Members' staff, including family members and their salary bands. It has a breakdown of office costs, travel, communications allowances, the additional costs allowances and the costs of staying away from home.
Judy Mallaber: I voted for the Members Estimate Committee report, because we do need to clean up our act. Personally, I claim a very small amount of the additional costs allowance. Can the right hon. Lady explain to me why I should be lectured and forced into whipped business by a party whose leader claims all of the additional costs allowance-more than £21,000-towards his mortgage? I do not do that. Why are we being pushed into whipped business by somebody who makes such a claim?
Mrs. May: Whether the Government choose to whip their Members on this issue is a matter for the Government and the Government Chief Whip, not for me.
Mr. John Redwood (Wokingham) (Con): As someone who would like the whole House to come to a sensible judgment on this, I urge colleagues to calm down a little and understand that a real problem has been highlighted by this debate. We are where we are with this debate. Does my right hon. Friend agree that the problem with introducing audit for individual items for a household or flat is that we will go straight back to the John Lewis list? The auditors, of course, will want a reference point, and it is the list that has done so much to drag this House into the mire in the public mind.
Mrs. May: I agree that the issue of the John Lewis list is the one that has perhaps struck the public mind most as a matter of concern; it is symbolic of the public's concern about the House. That is why it is important that we do something about the list beyond simply asking that its future be considered.
The right-to-know form that will be published later today is reflected in the terms of our motion. We are asking the House to agree a basic set of principles for a system of expenses and allowances that would be tougher than the regime agreed on 3 July. It is necessary to restore confidence in the House, and I hope that all Members will have that in mind when they come to consider the matter later.
Mr. Kevan Jones: Most of us in the House have one single source of income-our parliamentary salary. The right hon. Lady and her party leader talk about transparency. Will she publish the exact details of the 40 directorships held by members of the shadow Cabinet and of the 65 separate occasions on which, according to the latest Register of Members' Interests, paid employment was done by members of the shadow Cabinet?
Mrs. May: The hon. Gentleman clearly does not need me to publish those details, as he was reading them from a published document-the Register of Members' Interests. Members of the shadow Cabinet abide by the rules and requirements. The hon. Gentleman might look to the fact that not only Members on the Conservative Benches hold external appointments and directorships.
Rob Marris (Wolverhampton, South-West) (Lab): Will the right hon. Lady give way?
Mrs. May: I shall give way one further time, and then make some progress.
Rob Marris: On that latter point, I should say that I think we should ban moonlighting. However, I do not think that my constituents expect me to live in an unfurnished bedsit in the distant suburbs. My accommodation expenses amount to about £650 per month, and I am 10 minutes from the House of Commons; I think that pretty reasonable. My constituents do not expect me to carry a bed down on the Virgin Trains service every week because I do not have an additional costs allowance to buy a bed in London. Why does the end of the Opposition motion state that
"Members should no longer be able to claim reimbursement for furniture and household goods"?
My constituents do not expect me to sleep on the floor.
Mrs. May: I have already made the point-I will come to it again-about the importance of the John Lewis list to the House's being seen to clean up its act.
Mr. Brian H. Donohoe (Central Ayrshire) (Lab): Will the right hon. Lady give way?
Reference is made to the John Lewis list by the Leader of the House in the Government amendment and in her written ministerial statement today. There is a real difference between abolishing the John Lewis list and replacing it with an Ikea list, and getting rid of the right to claim for TVs and fridges on the taxpayer. The hon. Gentleman mentioned beds, but not every hon. Member coming into the House has to rent or get a mortgage for an unfurnished flat; he knows that full well.
Miss Ann Widdecombe (Maidstone and The Weald) (Con): Will my right hon. Friend give way?
Mrs. May: Before I took that last intervention, I said that I wanted to make a little more progress. My right hon. Friend should bear with me; I am sure that she will be able to keep her question until later.
Mrs. Ann Cryer (Keighley) (Lab) rose-
Mrs. May: I say that to the hon. Member for Keighley (Mrs. Cryer) as well.
The principles of our motion are based on transparency, and it includes a reference to "appropriate auditing". As we discussed on 3 July, auditing is important because it is best practice outside this House, and we should show that we are willing to abide by that. Proposals in the MEC report would have brought this House into line with best practice not only in the private sector but elsewhere in the public sector. We need to achieve transparency by publishing a comprehensive breakdown of expenses claims made by Members to prove that we are using public money correctly. As from later this year, the House will publish Members' expenses together with all the claims and receipts. We will continue with the commitment that we made to publish right-to-know forms on Conservative Members later today.
Linda Gilroy (Plymouth, Sutton) (Lab/Co-op) rose-
Mrs. May: If hon. Members will just wait- [ Interruption . ] I thank the Leader of the House for pointing out that several Members wish to intervene on me. I have already made it clear that I am willing to take further interventions later, but I wish to get beyond this point in my explanation of our motion because-who knows?-that might answer some of the questions that hon. Members have. I suspect that they were pre-arranged questions anyway, but there we are.
The need for transparency also lay behind our proposal that Members should declare on the register any family members whom they employ. That has now been agreed by this House following a review by the Standards and Privileges Committee. We are going further in relation to the right to know by publishing the salary bands of family members as well as their names. During the debate on 3 July, the expense involved was cited as a reason for not going further on the recommendations on auditing and publication. However, the House needs to operate by the same rules that operate elsewhere in the private and public sectors; that is why it is important that we explore this point.
Mr. Donohoe rose-
Mrs. May: I am happy to give way to my right hon. Friend the Member for Maidstone and The Weald (Miss Widdecombe) first, and then to the other three hon. Members. I will then go on to talk about the John Lewis list, so the hon. Member for Central Ayrshire (Mr. Donohoe) might wish to wait until I have done that before he makes his point.
Miss Widdecombe: I am grateful to my right hon. Friend for giving way and for the number of times that she has already done so. She said a few sentences ago that it was not necessary for hon. Members to have a second home that needed to be furnished. Let me put it to her that if hon. Members buy their second homes, as opposed to renting or going into hotels with their families, the taxpayer gains because hon. Members have to pay the capital of their mortgage-that is not given to us by anybody-and in the end, when they sell, they pay the Exchequer capital gains tax. There is therefore a direct and much under-discussed benefit to the taxpayer in our choosing to buy rather than going into a hotel.
Mrs. May: To correct my right hon. Friend, I did not say that it was not necessary to have a second home, or, as she further implied, to furnish it at the expense of the taxpayer. [ Interruption . ] It is amazing that Labour Members do not seem to have heard of the concept of renting furnished flats, but I will not go into that. My right hon. Friend drew a distinction between the capital element and the interest element of a mortgage. The capital element relates to the fact that the house or flat remains in the ownership of the individual Member of Parliament. The point about furniture and household goods is that they remain in the ownership of the individual Member, who is able to take them on to a further property as opposed to simply possessing them as a Member of this House.
John Mann (Bassetlaw) (Lab): The right hon. Lady will recall that she agreed with my amendment, passed unanimously by the House last week, which removed the potential loophole whereby people could nominate two main homes, one under the additional costs allowance and one for capital gains tax purposes in relation to the Revenue. Can she confirm that that point has been taken fully into consideration in the statistics on her Front Benchers that she is providing today, that nobody among them has worked that loophole and that everything is consistent with the current House position?
Mrs. May: The figures that will be published today are based on the right-to-know form that was published earlier this year. I have a certain sympathy with the intention of the hon. Gentleman's amendment, but there are some practical issues involved in implementing it. [ Interruption . ] He says that there are not. He will be aware, however, that there are rules for claiming for a home under the ACA. HMRC has different rules, and there is a choice on whether a house is claimed as the main house for capital gains tax purposes. The House authorities will need to consider those issues in interpreting the amendment in terms of the rules that will be put into the green book. The House took a decision, and I have every confidence that it will be implemented.
Linda Gilroy: Notwithstanding what the right hon. Member for Maidstone and The Weald (Miss Widdecombe) said, will the list that is to be published this afternoon indicate the capital gain for Members who use all their allowance to purchase a property? The John Lewis list is a smokescreen for that.
Mrs. May: It is not possible to do that, because one is not able to list a capital gain until one sells the property and knows what the capital gain on it is.
Mrs. Cryer: The right hon. Lady's comments are worth clarifying. Does she understand that new Members entering the House, particularly Labour Members with no inherited wealth whatsoever, may be put off buying a flat because they have no money to buy furniture for it, including basic things such as a bed, and may as a result be shoved into renting a furnished flat or a hotel room that will cost the taxpayer a great deal more money in the long term?
Mrs. May: I take considerable umbrage at the suggestion that everybody on my side came into the House with inherited wealth. There are Conservative Members who would also find it difficult to cope with the arrangements that we are putting in place. It will be difficult for some Members, but it is possible. Hon. Members have alternatives available to them-they do not need to go out and buy their TV on the back of the taxpayer.
Mrs. May: I said that I would make progress and discuss the John Lewis list, because the hon. Gentleman has a specific question about it. Let me explain the reference in the motion. There has been public dismay about the concept of being able to buy a TV on the taxpayer-that is one of the issues that has most concerned people and about which they have been particularly vocal. I accept that most Members did not know of the John Lewis list before it was revealed in the court case, but it has become symbolic. Several hon. Members have made comments about initial requirements, but it is not just about that. The John Lewis list-that is, the ability to claim through the ACA money for furniture and household goods- continues throughout the time that a Member of Parliament is in this House, so it is not just a question of buying basic requirements from the allowance that is available. I believe that we should, as the MEC report suggested, remove the ability to buy furniture and household goods through the ACA. That is a different position from that taken in the Government's amendment.
Mr. Donohoe: I became a Member of Parliament in 1992 and I was taken to the Fees Office, where I was instructed that I could spend money anyway I wanted on the additional costs allowance by a Mr. Maskell, who I think was in charge of the Fees Office then. I have never had any guidance since, other than the contents of the green book, which gives no indication of a John Lewis list. I sit on the Administration Committee and such a list has never been debated there. Where did the John Lewis list come from? I can give the right hon. Lady the answer, but I wonder whether she knows.
Mrs. May: I am grateful for that intervention. It is true that, when people have become Members of Parliament at different times, the Fees Office has given different advice about how to interpret the allowances. Over the years, the House, through the Members Estimate Committee and officers in the Department of Resources, has been tightening up those rules to try to clarify them and to ensure that Members know more about exactly what they can claim. Some Members' past claims will be based on a previous regime, and were entirely appropriate under it, but they would not be acceptable today.
To answer the question about the John Lewis list, I believe that officers in the Department of Resources, formerly the Department of Finance and Administration, introduced it with a view to ensuring that, when staff considered claims by Members of Parliament, they had a checklist against which they could decide whether the claim was reasonable and whether Members were trying to get more out of the taxpayer than they needed. For example, they would see that Members were buying a fridge for x amount and would try to ascertain whether they could buy a cheaper fridge that was equally functional. The purpose of the John Lewis list was to help staff determine whether claims were appropriate. Whatever the intention at the time, the term has come to cause concern. However, the ability to claim the items, rather than the term and the existence of a list, worries the public.
Mr. Donohoe: I thank the right hon. Lady for giving way again. Her stance does not relate to the fact that hon. Members also have access to an incidental costs allowance for offices. If the Opposition were serious about the matter, they would have included in the motion the same barriers to the incidental costs allowance as to the additional costs allowance. One could buy a mahogany desk-or anything-to furnish an office. Surely it is wrong to be able to do that when one does not have the right to buy the furniture that is required for a flat.
Mrs. May: There is a distinction between buying furniture for an office, which is perhaps in a constituency and provides a service to constituents, and a television or a fridge for a Member of Parliament. There is a genuine difference, and the public perceive it. They recognise that office costs are needed to provide a service to constituents.
Mr. David Anderson (Blaydon) (Lab): rose-
Helen Jones (Warrington, North) (Lab) rose-
Mrs. May: I know that many hon. Members wish to speak and I am conscious that time is passing. I have been generous with taking interventions and I now want to get on with my speech because I want to deal with the expenses of Members of the European Parliament and the transparency rules to which they are expected to adhere because the spotlight has fallen on them.
Mr. Andy Slaughter (Ealing, Acton and Shepherd's Bush) (Lab): Will the right hon. Lady give way?
Mrs. May: The hon. Gentleman has just heard me say that I want to make progress, so I suggest that he contain himself a little.
We believe that we need to establish equivalent requirements for MEPs. That is why the Conservative party has published a new code for Conservative MEPs on the use of expenses and allowances. They have undertaken to abide by the rules of the European Parliament on the payment of expenses and allowances to Members, and to fulfil additional requirements for transparency and accounting in their allowances and expenses. Those will be published in the way we are publishing the expenses and allowances claims for Members of Parliament. We are taking action unilaterally and I hope that it means that Conservative MEPs will abide by additional transparency rules, over and above those of the European Parliament. The Labour party is not adopting those rules for its MEPs and I hope-[Hon. Members: "We've already got them."] Several Labour Members claim from a sedentary position that I am wrong, and I will deal with that shortly. There is a genuine difference between the requirements that the Labour party places on its MEPs and those that we will place on ours. Conservative MEPs will have an equivalent requirement for publishing expenses to the one that we place on Members of Parliament. That gives me an opportunity to consider the Government amendment.
When I first heard about the amendment, I believed that we were making progress. After the vote on 3 July, the Prime Minister said:
"I was not happy about what happened. I was disappointed... now we must look at the issue of expenses and accountability again."
Given that the Leader of the House moved quickly on MPs' addresses-a statutory instrument on that is being considered tomorrow-I thought that she would introduce concrete proposals on allowances that would mean progress before the recess. However, it has taken today's debate to make the Government do anything about the matter or make any proposals to the House. I fear that we give the public the impression that we are willing to move when it comes to protecting ourselves, but not when it comes to protecting taxpayers' money and showing that we are doing that.
Mrs. May: Let me get a little further because I want to make a specific point about the John Lewis list.
Instead of a clear decision about the John Lewis list, the amendment would refer it to the Speaker's Advisory Panel on Members Allowances. Far from removing MPs' right to buy items such as TVs and fridges on the taxpayer, the Government would retain it. According to my reading of the amendment, we would effectively replace the John Lewis list with the IKEA list. The Leader of the House's statement does not take us much further because she offers us Government consultation on capping the extent of claims to 10 per cent. of the additional costs allowance-nearly £2,500 every year.
Under the Government amendment, the taxpayer would still foot the bill for MPs' furniture and household goods. I do not believe that that is acceptable and that is why we have specifically rejected that aspect of the current arrangements in our motion. The Government also suggest that the task of rewriting the green book, which is currently a matter for the Members Estimate Committee, should be given solely to the Speaker's advisory panel. The Speaker's Advisory Panel on Members Allowances is a different animal from the Members Estimate Committee. It has a Government majority and its remit is purely advisory. Perhaps when the Leader of the House responds, she could say whether she intends to change the remit if she is asking the panel to rewrite the green book rather than simply advise the Members Estimate Committee about it.
The second half of the Government amendment deals with the role of the National Audit Office and it has two parts. I believe that the first part, which tackles what the NAO should do in considering the rules that the House operates, is contrary to the NAO's legal powers under the National Audit Act 1983, which states that the provisions
"shall not be construed as entitling the Comptroller and Auditor General to question the merits of the policy objectives of any department, authority or body in respect of which an examination is carried out."
Assuming that the amendment means that the Government are asking the NAO to say whether the rules are correct, or, as was suggested on the radio, that the John Lewis list is being replaced by an NAO list, the NAO does not have that power and therefore could not effect the intention.
The second part of the amendment that deals with the NAO covers what it already does. It already audits on a random basis all the allowances that Members claim and the controls and processes that the Department of Resources uses. That part of the amendment is therefore superfluous. Far from giving us a more rigorous audit regime, the amendment does nothing.
The amendment also deals with MEPs' expenses. I said that I would state the differences between what Labour and Conservative MEPs do. The Government claim in their amendment that they have open and transparent procedures, but they are far from open and certainly not transparent. The requirement on Labour MEPs is to submit themselves to an audit. The results are not published and I do not believe that anyone even has to publish details of who does the audit for Labour MEPs. We are bringing our MEPs' expenses into the open in the same way as MPs' expenses are being brought into the open. I hope that the Government will be prepared to bring their MEPs' expenses into the open at the same time.
Mr. Kevan Jones: I am grateful to the right hon. Lady for giving way. Will she indicate today whether the Conservative party will make the measure retrospective, so that we can see what the crooked Tory MEPs have been up to over the past few years?
Daniel Kawczynski (Shrewsbury and Atcham) (Con): On a point of order, Mr. Speaker-
Mr. Speaker: Order. I am sorry, but I was speaking to an hon. Member when that remark was made. The hon. Gentleman must withdraw that remark, or qualify it.
Mr. Jones: I am sorry, Mr. Speaker-I will just say "creative use of their expenses", then.
Mrs. May: I would simply tell the hon. Gentleman that I have already set out that, later this year, Conservative MEPs will publish details of their expenses and allowances. They will be subject to a rigorous regime; Labour MEPs will not be subject to that rigorous regime.
The Government amendment is disappointing. We have a chance to work on the issue, to change the current system and to ensure that we move the House forwards in a way that meets the requirements of the public. But instead, we have taken a half-hearted and tentative step. The public deserve better than that indecision. When the Government referred the issue to the MEC back in February and put the proposal before the House, the Prime Minister wrote to Mr. Speaker and said:
"Labour MPs want to cooperate fully with your review, with its findings, and with any further requirements it may make upon them and we will insist that this happens."
Sadly, that did not happen, because a majority of Labour MPs voted against the MEC report, which meant that it did not go through. The Government did not show leadership, with 33 Ministers, including five Cabinet Ministers, voting against the reforms in the MEC report.
We have an opportunity today to make good some of the damage done by the vote of 3 July and to show the public that we are deserving of our office and their votes, and that we did not enter the House to take advantage of the taxpayer. We understand the privileges and responsibilities of being a Member of Parliament. We are willing to place on ourselves the same sort of requirements for transparency and the checking of our expenses and allowances that we expect other people to place upon themselves. We should not consider that we are different simply because we are Members of Parliament. We should be willing to adopt the same sort of practices that are best practice in the public and private sector elsewhere.
The Leader of the House of Commons (Ms Harriet Harman): I beg to move, To leave out from "(MEPs)" to the end of the Question, and to add instead thereof:
"believes that all British Members of the European Parliament (MEPs) should follow all the open and transparent procedures voluntarily adopted by Labour MEPs; further to debate in the House on 3rd July on the control and audit of the public money spent by hon. Members carrying out their duties, further believes that there should be a re-writing of the Green book by the Advisory Panel on Members' Allowances, augmented by two independent external appointees; further believes that the Panel should keep the Green Book under review and advise on any further modifications, including in relation to reimbursement of reasonable costs of a second residence, to include abolition of the so-called John Lewis list; and further believes that an external financial audit by the National Audit Office, covering all the allowances in the Green Book, should include the rules and guidance on what is and what is not acceptable under the rules, the management controls and processes used by the Department of Resources to ensure compliance with the rules, and the checks and testing of the controls to ensure that they are adequate and effective.".
Let me start by agreeing with the points that were made by the right hon. Member for West Derbyshire (Mr. McLoughlin) and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg). It is unprecedented for the House to be debating, as whipped business, matters that are traditionally decided on a free vote. Opposition day debates are by definition partisan and are whipped by both the Opposition and the Government. What the Opposition have done with their motion is to take House matters, which are by custom and practice decided on a free vote, and make them into whipped business. That is regrettable.
Let me turn to the substance of the debate. Our starting point is the health of our democracy. That depends on two things. It depends on us as Members fulfilling our responsibilities-doing the work that is expected of us in our constituency, and here in the Chamber and all the Committees of the House. Unless Members are London MPs, as I am, they have to live in two places-in their constituency and in Westminster-and to travel between that constituency and Westminster.
As MPs, it is our responsibility to help with our constituents' problems, to listen to their concerns and to play a leading role in the life of our constituency. To do that effectively Members must have a good team of staff. I pay tribute to my hard-working team of constituency staff. Our constituents write to us, e-mail us and phone us, and they expect, quite rightly, that we should reply. They come to our surgeries and expect, quite rightly, that we will take up their case. They expect us to tell them what we do. That is why most of us have websites and some of us do annual reports.
I, and many others in the House, believe in equality. We believe that to be MPs, we should not have to depend on private wealth to do our job and carry out the responsibilities placed upon us by our constituents.
Mr. Andrew Tyrie (Chichester) (Con): I have a great deal of sympathy with what the right hon. and Learned Lady has just been saying, but with regard to communication with constituents, does she not think that the time has come to look again at the communications allowance? Is it not the case that, as the Chairman of the Public Administration Committee said, it is an exercise in shameless self-promotion? Has not the communications allowance, too, brought us into disrepute, and is it not time we reviewed it?
Ms Harman: No, I do not agree with the hon. Gentleman. Before the communications allowance was introduced, I used to do an annual report for my constituents, setting out what I had done in the previous 12 months and inviting them to comment on the priorities that I had set for the next 12 months. I probably used the incidental expenses provision outside the rules, but I thought that it was very important to communicate with my constituents. It was to deal with such matters that the communications allowance was introduced. I do not think that it is disreputable for hon. Members from any part of the House to tell their constituents what they are doing. When the public know what MPs are doing, they are more supportive and can get involved.
Sir Patrick Cormack: The Leader of the House knows that I am entirely with her in her opening remarks, but frankly, the communications allowance is an abuse. Any self-respecting Member of Parliament knows how to be well known in his or her constituency. We had years without the allowance. I have never claimed a penny of it and I have no intention of ever doing so. Neither I nor the hon. Member for Bolsover (Mr. Skinner), nor many of the Members present, need that sort of thing to be decent constituency MPs.
Ms Harman: The communications allowance is not mentioned in either the Opposition motion or the Government amendment. I said what I believe to be the case about it-and it was decided by the House that we would have a communications allowance.
Daniel Kawczynski: I am grateful to the Leader of the House for giving way. I totally concur with her about how hard-working our staff in our constituencies are, in dealing with sometimes very emotional and difficult cases. My secretary, Mrs. Helen Sheppey, does a marvellous job. Does the Leader of the House share my concern about the way in which the media report on our expenses? Some constituents actually believe that the money comes directly to us. The media are part of the problem, because some constituents do not realise that the money goes to other people, rather than to us. The media are to blame for that.
Ms Harman: It is wrong for the media to give the impression that the money that is available and is paid directly to our staff-our having deposited contracts of employment and job descriptions for those staff doing the work-is added to our pay. The media should not imply that that money goes into our pockets. That is why it is so unfortunate that one Member of the House did not respect the proper rules and brought us all into disrepute.
Jo Swinson (East Dunbartonshire) (LD): The Leader of the House was talking about the expectations that our constituents have of us. Does she not accept that our constituents also expect us to have an expenses regime that is transparent, accountable and fit for the 21st century, rather than something more akin to an old boys' club? For that reason, does she not think that the vote on 3 July was incredibly damaging to democracy? Although I believe that the Members Estimate Committee report did not go far enough in proposing a radical overhaul of the system, it will have beggared belief among her constituents that we voted against better accountability and better scrutiny of our expenses.
Ms Harman: I agree with the hon. Lady that our constituents expect openness, transparency and a properly enforced system. If she will allow me, however, I should like to get on with explaining how I think we can achieve that in the House.
Mr. Tyrie: Will the right hon. and learned Lady give way?
Ms Harman: I have already given way to the hon. Gentleman once, so I will press on with my speech for the moment. The allowances are to help us to do our job.
Mr. Touhig: Partly to respond to the hon. Member for East Dunbartonshire (Jo Swinson), can we make it absolutely clear that the recommendation of the MEC for an external audit never intended that that audit should be published? A myth has grown up as a result of that debate that the external audit recommended by the MEC was to be made public. It was never to be made public; that was not the recommendation. Can we make that clear in the House?
Ms Harman: My right hon. Friend is right on that point. Our allowances are important for us to do the work that sustains public confidence, but we know that it undermines confidence in the House, and in us, if they are abused. We all know that the public are angry that a small number of Members have misused allowances.
We want to ensure that that does not happen in future. It is not just the public who are angry. Most hon. Members are angry, because all of us who work hard and obey the rules are stained by the misconduct of a few, and the reputation of the House, which we hold dear, is undermined.
Anne Main (St. Albans) (Con): It is not only hon. Members who abuse the allowances who are pilloried by the press. Hon. Members who comply completely with the rules are also abused by the press. Indeed, the issue is used as a party political football by some people who aspire to enter this place. It is completely wrong that we should not look at this matter again, in the light of the fact that this is a media-driven thing. People who use their allowances properly should not feel bad about using them.
Ms Harman: I agree with the sentiment behind what the hon. Lady says. However, building on what the House decided on 3 July, we will be able to give ourselves, as well as the public, more assurance that the rules are clear, and will be properly complied with by all of us.
Ms Harman: I will not give way to the hon. Gentleman, but I will give way to my hon. Friend the Member for North Durham (Mr. Jones).
Mr. Jones: The right hon. Member for Maidenhead (Mrs. May) suggested that Labour Members of Parliament had been abusing the system. However, is not the reason why this matter has such a high public profile the fact that every case of Members abusing the system that has gone before the Standards and Privileges Committee has involved Conservative Members?
Ms Harman: We have only to check the reports of the Standards and Privileges Committee to understand the point that my hon. Friend is making about the situation in Parliament.
Earlier this month, we made decisions on pay and allowances. We set up a system that will rightly prevent us from voting on our own pay increases in future. Instead, they will be set by an independent review body. We have also made decisions to improve the system of allowances. On 3 July, we agreed that no staff should be paid out of public funds unless evidence of their employment-a contract of employment and a job description-had been deposited with the House authorities. We also agreed that there should be a strengthened system of audit.
As Leader of the House, it is my responsibility to consider how we put the will of the House into effect. That means implementing the resolutions of 3 July and considering how we can build on the clearly expressed view that we need to do more to ensure that the rules are clear and properly enforced, so that we protect public money and the reputation of the House.
Mr. Tyrie: Will the Leader of the House give way?
Ms Harman: I will not give way to the hon. Gentleman again; I have already given way to him once.
After the vote on 3 July-and certainly before this debate was called by the Opposition-I have had a number of discussions with hon. Members, with the Chair of the Committee on Standards in Public Life, Sir Christopher Kelly, and with the Comptroller and Auditor General, Tim Burr. I have also prepared a written ministerial statement, which I have laid before the House this morning, and which forms the basis of our amendment to the Opposition motion. I want to reassure the House that what I have set out in my written ministerial statement today and in our amendment to the Opposition motion is based on a programme of work and discussions that I have been undertaking, and that it is not in any sense a response to this Opposition day debate.
I would like to outline briefly the measures that will build on the decisions the House took on 3 July, in respect of which I intend to issue a consultation document. The key elements include the proposal that the green book that sets out the rules on entitlements to allowances should be rewritten by the Advisory Panel on Members' Allowances, in the light of decisions taken by the House on 3 July, and to abolish the so-called John Lewis list. The Advisory Panel on Members' Allowances will keep the green book under review and advise on any further modifications to the rules that may be required, including in relation to reasonable costs of a second residence. I will consult on including capping furniture costs at 10 per cent. of the additional costs allowance. The membership of the Advisory Panel on Members' Allowances will be increased to include two independent external appointees.
Mrs. May: In my speech, I expressly asked the right hon. and learned Lady to address the issue of the remit of the Speaker's advisory panel and to clarify whether the next rewrite of the green book will be a matter solely for the panel. Is she suggesting a change to the rules so that the MEC will have no role in that?
Ms Harman: The green book is ultimately a matter for the House, but the important thing is to give to the Advisory Panel on Members' Allowances, augmented by two independent external appointees, the responsibility of keeping the green book under review and ensuring that proposals come forward, including on the question of the reasonable cost of second residences.
Linda Gilroy: On the additional costs allowance, is my right hon. and learned Friend sympathetic to revisiting the issue of central provision of accommodation-not, as it has been caricatured, in a single block somewhere in central London, but in a range of rented accommodation-and, more importantly, to having the House authorities hold any capital gain, or indeed any loss, if Members are here for only a short time?
Ms Harman: I will be issuing a consultation document, and the Advisory Panel on Members' Allowances will be looking at this issue. My hon. Friend will no doubt be able to contribute to those processes.
The key elements will also involve an external financial audit by the National Audit Office that will cover all the allowances in the green book, not just the additional costs allowance. It will also cover travel, staffing costs, incidental expenses provision for other office costs, and the communications allowance. Furthermore, the NAO financial audit will be extended to include an NAO audit of the rules and guidance on what is and is not acceptable under the rules, an NAO audit of the management controls and processes used by the Department of Resources to ensure compliance with the rules, and NAO checks and testing of the controls, to ensure that they are adequate and effective. I propose that the NAO should report to the Members Estimate Audit Committee, which will include three external independent members.
I am encouraged that the Comptroller and Auditor General believes that, given the additional evidence to be provided in support of claims, there is an opportunity to strengthen significantly the assurance that public money has been properly spent.
John Mann: What time scale is my right hon. and learned Friend putting on the final decision making on these issues?
Ms Harman: The consultation document that, as is set out in my written ministerial statement, I will be putting forward, includes the strengthening of the audit and the putting into effect of the decisions of 3 July. The written ministerial statement has been put before the House today, and I expect to issue the consultation document shortly. It would be appropriate for us to have concluded that aspect of our work before the publication of the green book on hon. Members' expenses in the autumn.
Simon Hughes: Following that last question, can the Leader of the House confirm that if, after the consultation, we adopt the approach that she is consulting on-which will involve trying to undo some of the decisions that we made a fortnight ago-there will need to be a vote here, and her Back Benchers will need to vote for the proposals, not against them?
Ms Harman: I hope that support for reasonable audit will come from across the House. The National Audit Office proposals-which were put to the MEC but which did not form the subject of the MEC's proposals-provide a good way forward, and I hope that the whole House will agree that they would provide us with the assurance that we need that public money is being properly spent in respect of all Members' allowances.
I now turn to the question of the European Parliament. As long ago as 2000, Labour Members of the European Parliament who were concerned about the lack of accountability for spending on allowances in the European Parliament introduced their own system. This includes, among other provisions, an independent financial audit for each MEP's total expenditure every year, which is then published on their website. For eight years, the UK's Labour MEPs pressed for other UK parties to follow this example. Until eight years later, when the Leader of the Opposition announced his so-called "deep clean", nothing was heard from them. At Government level, we have raised with the President of the European Parliament the need for greater accountability for spending by all the European Union's MEPs.
In conclusion, if the Government amendment is carried today-and pursuant to my written ministerial statement-certain things will happen.
Mrs. May: The Leader of the House made a statement a couple of minutes ago about the National Audit Office and the Members Estimate Committee report. She said that the MEC report did not include references to external auditing by the NAO, but it did-in recommendation 2, under audit and assurance. Will she explain how what she is proposing now differs from the MEC proposals?
Ms Harman: It differs in a number of ways. It goes beyond the additional costs allowance to include travel, staffing, the incidental expenses provision and the communications allowance. It will not only look into the spending of individual Members, but audit the Department of Resources to make sure that the rules are effectively applied.
Mr. David Hamilton (Midlothian) (Lab): May I bring us back to a housekeeping issue? The consultation will take place for nearly three months over the House of Commons recess, so will the Leader of the House ensure that there is a dialogue, and that people can be contacted to try to clarify any points during the recess? That is a simple matter of housekeeping.
Ms Harman: My hon. Friend makes an important point. I want to reassure people that when the House returns after the recess, there will be an opportunity to consider the proposals further.
As for the abolition of the "John Lewis list", which is mentioned in both the Opposition motion and our amendment, I remind the House that that was a list that no MP had ever heard of until it appeared in the newspapers.
I will consult on the proposals I have set out, so that when the House returns in the autumn, we will be able to put into effect new rules and a new system of audit that gives Members and the public the confidence that the payment of expenses is on a proper footing so that we can all get on with the job that our constituents elected us to do, which is not to debate and discuss ourselves, and our own pay and allowances, but to focus on them and on their day-to-day concerns, and to take the action that they want us to take in the interests of this country.
Simon Hughes (North Southwark and Bermondsey) (LD): Although it is controversial, I am glad that we are having this debate today.
Sir Patrick Cormack: You would be.
Simon Hughes: Yes, I would be, because the House made a bad mistake on 3 July. This is a brave move and the Leader of the House is right to bring the matter back to the Floor of the House.
I start with what I hope will be non-controversial comments, so I guess that what I say after that will be more controversial. First, I join the Leader of the House and the shadow Leader of the House in paying tribute to our staff. We could not do the job the public expect of us without our extremely hard-working, diligent and committed staff. They are often in the front line of people's life tragedies, dramas and pressures, which sometimes means that they encounter threats of suicide, fears of eviction tomorrow, deportation today and so forth. The reality is that they do a fantastic job.
Let us be clear. At the moment, the allowance for our staff is something between £90,000 and £100,000. To put it simply, that means that if we have four staff fully on the payroll as I do-two here and two in my constituency office-and if we include national insurance, they are receiving something in the order of £20,000 to £25,000 each. That is the amount if we divide the cake four ways. If we had fewer staff, they would of course get more, but this is what we are talking about. We are not talking about staff earning £30,000, £40,000, £50,000 or £60,000 as part of a staff team; rather, it is a wage that other people with the same abilities working in the private sector would vastly exceed. I hope that we are clear about that and that it is not a matter of dispute. Our staff do a very important job for us.
We need to clarify what happened in the famous debate of 3 July. Some areas were not controversial and were agreed. There were 14 substantive recommendations from the Members Estimate Committee: they were unanimously proposed by the right hon. Member for Penrith and The Border (David Maclean), the hon. Member for Middlesbrough (Sir Stuart Bell), my hon. Friend the Member for North Devon (Nick Harvey), the Leader of the House, the shadow Leader of the House and Mr. Speaker.
Of those 14 recommendations, those on constituency offices, communications, of which there were two, and travel, of which there were two, went through without any dissent. Two substantive issues, emanating from the amendment proposed by the right hon. Member for Islwyn (Mr. Touhig), were disputed and were not agreed. First, three different recommendations put forward a clear proposal, which everyone here will understand:
"We recommend that, with immediate effect, Members should no longer be able to claim reimbursement for furniture and household goods or for capital improvements".
Secondly, it was proposed that
"new MPs elected to the next Parliament to represent constituencies in outer London should be eligible to claim half of any overnight expenses allowance; and all MPs representing those seats should be restricted to claim half the standard rate".
That was to deal with the perceived abuse surrounding colleagues in outer London who were claiming in respect of two homes, irrespective of the fact that they lived just over the line between inner and outer London and were actually able to get home relatively quickly. They received the full allowance on the same basis as a colleague living in Orkney, Shetland, Cornwall, west Wales or the like.
The third proposal that was not accepted was that
"the Additional Costs Allowance be adapted into an overnight expenses allowance, comprising a £19,600 maximum budget for accommodation (excluding furniture, household goods and capital improvements) but operating on the basis of itemised reimbursement and a flat rate of £30 for daily subsistence."
That was the proposal and it meant that MPs could have furnished accommodation, stay in a hotel or have the money for the purchase of accommodation as well as a daily rate for subsistence, but that the allowance did not include furnishing.
Mr. John Spellar (Warley) (Lab): Is not all this in the nature of a differential allowance? In such a scheme, there is a always border and a line, and anyone with any experience knows about London weighting allowances. There will always be people living just one side or the other of a border. Unless we have an overall national rate, that will always apply, so is not the hon. Gentleman putting forward a rather silly argument?
Simon Hughes: No, it is not a rather silly argument and it is not my argument. It is an argument supported by the top salaries review people, by Sir John Baker in his report and by the Members Estimate Committee. The argument is that the abuses of some people who live nearby-only 20 to 25 minutes away, in some cases-and have two homes have to be reined in.
The final set of proposals from the MEC, which were backed up by the independent review, suggested that there should be a full audit of all expenses, not just of the additional costs allowance. The amendment, which was carried, limited audit to the additional costs allowance and not the other things.
Mr. Kevan Jones: I think that the hon. Gentleman has fallen into the same trap as many others since that debate in believing that the MEC report has somehow become the Ark of the Covenant and that everything in it was wonderfully transparent. The fact of the matter is that if we had voted for the proposal, we would have given ourselves £4,200 a year-an unreceipted, tax-free bung. Secondly, on the audit of offices and other aspects, the proposal was not for a financial audit but for £1,500 a day to be paid to consultants for snooping around offices. What I am in favour of, which is being proposed now, is a rigorous audit of all budget heads. What the hon. Gentleman is talking about is not what was being put forward- [Interruption.]
Simon Hughes: I am afraid to say, as the right hon. Member for Maidenhead (Mrs. May) is saying, that the hon. Gentleman is misrepresenting the position- [Interruption.] I am reading it; the proposal is in front of me. The recommendation was quite clear:
"there should be a robust new system of practice assurance involving regular financial health checks on records kept and processes used in Members' offices with outside professional teams covering about 25 per cent. of Members each year and every Member each Parliament".
Simon Hughes: I shall give way to the right hon. Gentleman in a moment.
The difference was that it would have been an audit of everything, not just- [Interruption.] Potentially of everything. It was not just of the additional costs allowance. Most people out there cannot understand why we are not willing to have everything audited and willing to have only some things audited. [Interruption.]
Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Member for North Durham (Mr. Jones) might not like what he is hearing, but I would be grateful if he did not keep chuntering from a sedentary position.
Simon Hughes: I give way to the right hon. Member for Islwyn.
Mr. Touhig: I am grateful to the hon. Gentleman, who is being generous in giving way. Does he accept the point that I and perhaps others made on the day of that debate? I was concerned about the cost of the assurance, which I think we had difficulty justifying, but will he support me in killing off the myth that the external audit proposed by the Members Estimate Committee was to be made public? It was never to be made public. That was the recommendation. We have this myth growing up that, somehow, what we have done is secretive and that what we could have done would have been transparent. It was never to have been transparent. It was never to be told to the world.
Simon Hughes: On that point, I absolutely agree with the right hon. Gentleman. I am trying to ensure that where there is consensus, we have it. The difference was that it was an audit of everything. I share concerns that we should not have a hugely expensive process with millions of quid going to the private sector, but that would not have been the implication had we voted for the motion tabled by the Members Estimate Committee.
I come now to discuss the issues that are, I guess, less controversial. First, I think we made a bad decision on 3 July. I made that clear in my speech at the time and I make it clear again today. The tough audit proposals were voted against by 172 MPs: 149 Labour, 21 Conservative, one independent and, bizarrely, our new UK Independence party Member, who voted in both Lobbies. He must explain that.
Linda Gilroy: Will the hon. Gentleman give way?
Simon Hughes: Not for a moment. Every one of my Liberal Democrat colleagues who was here- [Laughter.] No, no, no. Every one who was here voted in favour of the tough and transparent system, and 55 per cent. of our parliamentary party was here. All of them voted for the open system. Of the-
Mr. Touhig: Will the hon. Gentleman give way?
Simon Hughes: No, not for a second. Of the Conservatives, 54 MPs voted for the open and transparent system and 21 voted against. Had those 21 voted for, we would not be in this mess because the amendment would not have been carried. That means that only 27 per cent. of the Tories were in favour of the open system. There were 201 Labour Members here and voting. Of those, 52 were in favour of full transparency and 149 against. That means that only 14 per cent. of the parliamentary Labour party voted in favour of an open system.
Simon Hughes: I will make one last point and then give way to the hon. Member for Plymouth, Sutton (Linda Gilroy).
Even if every one of my colleagues had been here, there would not, contrary to what the right hon. Member for Maidenhead (Mrs. May) suggested, have been a majority against the amendment. Had her Tory colleagues voted with her, there would have been and we would not be in this mess.
Linda Gilroy: As we are all honourable Members, will the hon. Gentleman take it from me that those of us who voted differently from him did so because we did not think that the proposal was robust, effective, transparent and representative of good value for taxpayers' money?
Simon Hughes: The hon. Lady will have to explain to her electorate her vote on that day, as we all have to do. All I can say is that the external pressure, which arose for reasons that we all know, for us to have the most robust, the most open and the most transparent system has been greater than ever. As a result of consensus recommendations made to us by senior colleagues and endorsed by the Committee on Standards in Public Life, we were given an opportunity to do something about that and we bottled it. That is why the Leader of the House has this morning, out of the blue, produced proposals in a written statement to try to rescue the Labour party from the predicament that its own Back Benchers got it into. As she says, those proposals would have to come back to the House to be voted on.
Mr. Andrew Robathan (Blaby) (Con): I am most grateful to the hon. Gentleman for giving way, and I should say that I voted against the amendment tabled by the right hon. Member for Islwyn (Mr. Touhig) on grounds of transparency.
The hon. Gentleman is raising sanctimony to a new art form. Where was the right hon. Member for Sheffield, Hallam (Mr. Clegg) and where were the other 29 Liberal Democrats, if they felt so strongly about this? Everybody else was to blame, but oh no, not the Liberal Democrats.
Mr. Deputy Speaker: Order. Before the hon. Member for North Southwark and Bermondsey (Simon Hughes) responds to that question, may I say that I know there is considerable interest in the matter outside the House? I understand that hon. and right hon. Members want to make their points and make their position clear, but we should remember the duty that we all owe to ourselves as Members of Parliament and to the House of Commons. We should debate this matter calmly and constructively.
Simon Hughes: I will answer the question calmly and constructively. My right hon. Friend the Member for Sheffield, Hallam was here for the first votes, but he had a long-standing commitment way out of London, to which he went, and he had to leave in the early part of the evening. Other friends who could not be here were at public events-my hon. Friend the Member for East Dunbartonshire (Jo Swinson), for example. The answer is that some of my colleagues were not here, like other Members, but most of them were and every one of them voted for the open and transparent system.
Simon Hughes: No, no. I am going to press on because colleagues-
Mr. Touhig: Will the hon. Gentleman give way?
Simon Hughes: I have already given way to the right hon. Gentleman.
Simon Hughes: No, no. The Leader of the House therefore thought that she had better respond to the Conservative motion by producing something that tried to take things forward. [Interruption.] The Leader of the House protests that that is not fair, but it is on the Order Paper today as a written statement-not yesterday, the day before or last week, but today. There was no notice of it coming. I honestly believe that the general interpretation is that it is a response to the fact that we are having the debate today. If it is not, I apologise, but it seems mighty strange that it just happened to appear on the same day and after we saw the motion tabled.
Ms Harman: I ask the hon. Gentleman to withdraw that and accept the word that I have given the House, which is that the work that I was undertaking was under way, following the 3 July vote. I had discussions with, for example, the chair of the Committee on Standards in Public Life and the Comptroller and Auditor General long before we realised that an Opposition day debate was tabled, and indeed discussed with them the value of a written ministerial statement. So I had already discussed the timetable of the written ministerial statement with them. I think the hon. Gentleman should withdraw what he said. I take offence at what he has said about what I have told the House. The work was under way; it was not a response to the Opposition day debate, and he should not choose not to believe me on it. I do not think that is fair.
Simon Hughes: The right hon. and learned Lady and I have known each other for a long time. I am not misrepresenting her. Of course I accept what she says about the talks having been under way since 3 July. I know that; I accept it. The only thing I am observing is the slightly strange coincidence that the written statement landed on the Order Paper today and that we heard about it only once we knew there was going to be a debate today. Only freedom of information requests will tell, I guess, when it was decided to include a statement on the Order Paper today. The rest I absolutely accept; I do not dissent at all.
Under the right hon. and learned Lady's proposals, the John Lewis list would be abolished. That would be a good thing. There would not be a complete abolition of the payment for household goods and things in a property, as recommended-there would still be a possibility of spending on those, amounting to 10 per cent. There would be an audit, which is what was proposed two weeks ago. So this must be an attempt to scramble back and put things together after what the right hon. and learned Lady voted for was not carried because her colleagues-by a large majority of 3:1-did not follow her into the Lobby on 3 July. That is good; the Government have realised that we cannot go on as we are. If the voices that come from this place today make that absolutely clear, that must be a good thing because the sooner we get out of this mess, the better.
Greg Mulholland (Leeds, North-West) (LD): May I try to put this matter in simple terms, in spite of the chuntering and the side swiping? Is it not the simple reality of the situation that although the reform package might not have been perfect-would any package have been?-it nevertheless would have represented a huge step forward in restoring public confidence? Anyone voting against it for any reason was mind-blowingly stupid and arrogant.
Simon Hughes: That is my view, and my hon. Friend, blunt Yorkshireman that he is, puts the case clearly. We had a proposal that would not have been perfect, but that would have been miles better than where we were. Some of us voted for it, but, sadly, the majority did not.
I shall say quickly what the Liberal Democrats will do, because political parties must deliver on the matter, as well as the House as a whole. The day after the vote, my right hon. Friend the Member for Sheffield, Hallam announced that we would implement for ourselves the MEC proposals. We will have spot checks for all Liberal Democrat MPs. We will have independent auditing of our expenses. Every one of our shadow Cabinet members will publish all their expenses, as my right hon. Friend has done, and as Conservative Front Benchers will do. Ours will be published by next Tuesday so that people can look at them, and they will be published on a regular basis thereafter. That is the right thing. There may be questions, but at least everyone will be able to see the facts.
One of the reasons why the European Parliament is often discredited is that people perceive MEPs as being on a gravy train. As someone who has never been an MEP, may I say that it has looked like that even to those of us who support the European Parliament, the European Union and the rest? My friend Chris Davies, a Member of the European Parliament for the north-west, was one of those who said earlier this year that such practices had to stop, private reports in the European Parliament had to be made public, and abuses in the European Parliament had to end. I pay tribute to his work.
We are committed-as the Labour party has been, to an extent, for a while, and as the Tories are belatedly, having made a mess of their expenses in the European Parliament for so long-to declarations by everyone who is elected as to whether they are a member of the parliamentary pension scheme, whom they employ as assistants and whether they are members of their family, and the band of payment within ?10,000 bands; nothing being used to cover personal expenses, or to finance subsidies or gifts of a political nature; annual accounting of the allowance; certified independent certification of all the expenditure; annual publication by everyone of everything that they spend; proper contracts; publication on the website, with the consent of staff, of those who work for them; publication of all the service providers; subsistence allowance claims to be published on the website; and generally, complete transparency.
All parties in the House are moving to that being the regime in the European Parliament.
Mr. Spellar: Will the hon. Gentleman give way?
Simon Hughes: I shall not give way again.
I hope that everyone in the European Parliament will go down that road, but some Members of the European Parliament from countries that are absolutely resistant must learn that if they are to give credibility to the European Parliament elected next year, they too need to follow the example being promoted by colleagues such as Chris Davies. I hope that the European Parliament will learn the lesson, and that its reputation will be enhanced as a result. We will support the motion on the Order Paper. I hope that it will produce a speedy consultation, a speedy response, a speedy proposal from the Leader of the House, and a vote that goes the right way when the House returns from the summer recess.
Several hon. Members rose -
Mr. Deputy Speaker: Order. Before I call the next speaker, I remind the House that Mr. Speaker has put a 12-minute on Back-Bench speeches, which applies from now on.
Sir Stuart Bell (Middlesbrough) (Lab): I am grateful, Mr. Deputy Speaker. You made an intervention a few minutes ago about the value of the House of Commons. We need to keep in proportion the fact that this is a House of Commons debate, and that we are an important part of Parliament. I will return to that in my final remarks.
I will not follow the speech of the hon. Member for North Southwark and Bermondsey (Simon Hughes) in relation to the European Parliament, which is not my remit. He made some other pertinent points, however, to which I shall refer during my speech.
The hon. Member for South Staffordshire (Sir Patrick Cormack), who is still in his place and follows such debates as a great parliamentarian, has a great dislike of the communications allowance. It is remarkable how often that view is reflected on the Conservative Benches. In an age in which we get little from our media and have to deal with our constituents through the prism of the media, I would have thought that an allowance that enabled Members of Parliament to communicate with constituents in a non-partisan way about what we are doing would be welcomed throughout the House. The hon. Gentleman would certainly welcome the fact that the MEC report proposed to freeze the allowance at £10,000 for three years from next April.
I enjoyed the speech of the right hon. Member for Maidenhead (Mrs. May), as I did her speech on 3 July-she made the speech that I would have made, so it saved me from making it. I agree with many of her points, certainly in relation to the role of the National Audit Office and the thorough work that it is doing now, which will continue. One of the ironies of today's debate, and the proposal to extend the role of the National Audit Office to do an audit of 25 per cent. of MPs throughout the whole Parliament, is that that was a recommendation of the MEC. I welcome the fact that the Leader of the House has now taken it on board.
The issue that has created the most mayhem among Labour Members is that of practice assurance, which was intended to assist MPs in their roles before they ever got near a National Audit Office full audit. According to our paper, the essence of the scheme was:
"to help Members compile and record better evidence of their claims; to check on the uses to which parliamentary resources have been put rather than (as now) verifying only the initial expenditure"-
getting behind the signature, as we said-
"to clarify rules and guidance; to set a standards framework; to improve office systems and avoid errors; to support both internal and external audit."
There was a system behind that recommendation which enabled Members to put their house in order if need be, without reference to the dreaded Standards and Privileges Committee. That has been removed by the will of the House, and we are now faced with a simple audit.
As we go along, we will need to find out what was the purpose of those audits, to what purpose they will be put, and to whom they will refer. My right hon. Friend the Member for Islwyn (Mr. Touhig), who is no longer in his place but follows such debates, was perfectly right: the NAO is exempt from the Freedom of Information Act, audits are exempt from that, and there would be no question of reporting to FOI people that there was an audit and what the consequences were.
I was not able to speak in the 3 July debate, which was truncated and covered two subjects: addresses and allowances. I do not propose to use my time today to go through all the arguments that took place then. The MEC had a clear view from the beginning-which was 24 January, when the Government gave us the review, rather than February. First, it was to reassure the public, and secondly, to do so in a way that enabled MPs to carry on their jobs in a complex society, which imposes great demands, to which the Leader of the House has referred, in e-mails, the internet and a host of other ways. The question was how do we relate and give confidence to the public, and also allow MPs to continue with their work.
Many comments have been made about the media coverage. We live in a world in which to keep in touch with civil society, the political society must cross the media bridge. If we cannot do so, there will be a great deal of criticism in the popular press and in our constituencies. There was no greater outrage than in my constituency Labour party when the MEC report was turned down. That was not a happy day for the House. Fewer than half the Members of Parliament voted on the matter, and that would be our criticism-not who voted which way, or which party voted for what, but that only half the MPs thought it appropriate to be here to vote on the question of their salaries and allowances.
When the MEC report was published, and the members of the MEC-the right hon. Member for Penrith and The Border (David Maclean) and the hon. Member for North Devon (Nick Harvey)-gave a press conference, it was well received by the media, and that converted into being well received by the public. We had begun to restore the reputation of the House. That fell catastrophically, as we knew it would, when the report was rejected, which brought some damaging and serious headlines, which I will not repeat now. However, it was clear-the hon. Member for North Southwark and Bermondsey has touched on this-that matters could not be left as they were on 3 July. A number of recommendations had been accepted, including that of my hon. Friend the Member for Bassetlaw (John Mann), and other recommendations were hanging in the air. It was not clear how we were to go forward, but the Members Estimate Committee always said that it would fully respect the will of the House.
Mr. Kevan Jones: Does my hon. Friend not think that it would have been better with hindsight to have produced a draft report and consulted Members on both sides of the House? They could have put forward some suggestions and amendments so that we might have had a degree of consensus about the way forward when the final report was produced?
Sir Stuart Bell: I agree entirely with my hon. Friend, although I would point out to him that when the Government sent this issue down to the Members Estimate Committee on 24 January, we said that we would need until October to go through the report with the utmost care, to consult a whole host of bodies, such as the National Audit Office, the Comptroller and Auditor General, the Inland Revenue and outside bodies, and then to get the support, if we could, of the 1922 committee-the Conservatives' Back-Bench committee-the parliamentary Labour party committee and then the House. We failed to do that. It is clear that our report had public support through the media, but it did not have the support of the House. The reason for that-I concur with my hon. Friend the Member for North Durham (Mr. Jones) on this-is that we did not have the time. If we had had more time, we could have looked at the issue more carefully, taken other matters on board and explained what we were trying to do, but we were not able to do that in the short time that we had. It would also have been preferable had the House been able to discuss allowances separately from pay, but the two came together on the same day, and things got very confusing and very confused. The result was not what it might have been, and the consequence is that we are here today debating the matter again.
Although this might be ironic, the fact is that it is a Conservative Opposition day motion that has brought the issue to the Floor of the House and which gives me the opportunity to make the speech that I could not make on 3 July. I am aware that the Leader of the House has had discussions with the chairman of the Committee on Standards in Public Life and the Comptroller and Auditor General and that she has been very active since 3 July. I entirely accept what she has said about those discussions, but the fact is that the time scale for this second debate is longer, and we are therefore able to make some points and to take on board what the Government are now saying in their ministerial statement. I would surmise that we would still have had the ministerial statement had we not had today's debate.
On the ministerial statement, I welcome the commitment of the Leader of the House to bring within the purview of the original decision by the House an extension of the powers of the National Audit Office to cover all the allowances in the green book, as the MEC proposed, rather than just the additional costs allowance, as well as travel, staffing costs, incidental expense provisions for other office costs and the communications allowance.
I welcome the fact that the green book will be rewritten-another recommendation by the MEC-and that that will be carried out by the Advisory Panel on Members' Allowances. I wish the right hon. and hon. Members on the panel well. We met them and discussed our report with them as we went along, and I know that they are diligent and will seek to equate the interests of Members with those of the taxpayers who fund our Parliament.
I welcome, too, the statement by the Leader of the House that the National Audit Office should report to the Members Estimate Committee, which already includes three external members. Incidentally, I also welcome the fact that the work of the Advisory Panel on Members' Allowances will also be assisted by two independent members.
I also welcome the assurance from the Leader of the House that the Comptroller and Auditor General believes that there is an opportunity, given the additional evidence to be provided in support of all claims, significantly to strengthen the assurance that public money has been properly spent.
The House will decide on the motion and the amendment before it. I have enjoyed the comments of the hon. Member for South Staffordshire and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), but the House must bear it in mind-this brings me to your original comments, Mr. Deputy Speaker-that what was at the forefront of the MEC's thinking in its review was the reputation of this House, balanced with the interests of Members. We have heard many comments about the role of Members and their heavy work load. On our salary and allowances, I have consistently taken the view that it is a privilege to be a Member of Parliament, and that privilege must be guarded with a sense of responsibility.
The Leader of the House and the right hon. Member for Maidenhead have referred to the fact that the reputation of the House has taken a battering over these past few months, but the House may soon have the power to declare war and it may take over the royal prerogative. It debates and decides on major issues, such as war and peace, human embryology, radical changes to society, justice and civil rights. It is still the fulcrum of the nation in times of crisis and of debate on national issues. I remember the debate on the Falklands war. I was not in the House at the time, but perhaps other hon. Members were. There was a debate in the House on the Saturday morning after the Falkland Islands had been taken over by the Argentines, and the question was what we should do. The entire nation listened to our debate on the radio-we were not on television in those days-which shows how important the House of Commons is in our affairs.