Review of Parliamentary Standards Act 2009

Edward Leigh Excerpts

Thursday 12th May 2011 Commons Chamber

[Mr Edward Leigh (Gainsborough) (Con)]

I congratulate my hon. Friend the Member for Windsor (Adam Afriyie) on tabling the motion, and on the diligent work that he has done on behalf of Parliament and the taxpayer. I have been asked to chair the MPs’ side of the committee liaising with IPSA, and we have done our honest best in recent months to try to put MPs’ views to IPSA. Our meetings are courteous and lengthy. We have covered the entire ground but, at the end of the day, many of our suggestions are simply not acted on. The motion will provide further impetus to IPSA to listen to Parliament. Everyone accepts that we must have an independent body that sets the overall levels of remuneration, but we still have a fantastically bureaucratic system that employs 70 staff and which costs upwards of £6 million just to do the expenses of 650 people. It is an absurdly bureaucratic system that must be reviewed, not for our sake but for the sake of the taxpayer.

It is perfectly possible to devise a system that can command public confidence and result in a much lower cost to the taxpayer. Our first priority is cutting the cost to the taxpayer, who has to pay for all of this. It is an expensive way of doing things. Secondly, we want to minimise the possibility of fraud and error. As we have seen with social security, one of the best ways to do that is to simplify the system as much as possible. Thirdly—this point was made by my hon. Friend and others—we want to open Parliament up, and ensure that it is an attractive place for people of all types, from all regions, of all levels of income, and all the rest of it, who want to come here.

I mentioned all regions, because disincentives are built into the current system. For instance, is being a Member of Parliament, with our existing expenses regime and the way in which families are still treated, an attractive option for a lady GP working in Newcastle upon Tyne? I do not think so. We should encourage in particular women with families who want to serve as Members of Parliament, which means that we must have an expenses regime that understands Parliament and the fact that many people who come to the House are not just coming to London for an occasional business trip. It is often a life sentence, as people have to spend half their time in a constituency that may be a long way from London, and the other half in London. Younger Members of Parliament with young families, in particular, want to be with their families, so ultimately we need an expenses regime—we have to keep repeating this—that is not too bureaucratic, which is attractive, minimises fraud and error and cuts the cost to the taxpayer. The present system does not do that.

We have those meetings in our liaison committee, but we have no power whatsoever. We can make suggestions on all the points that are made to me in e-mails and letters from colleagues, but ultimately we can still be ignored. There has been some progress, particularly on how we run our offices. The way in which IPSA originally tried to set up the expenses regime for MPs’ offices was absurd. It was ludicrously bureaucratic, but we have made progress, and MPs can increasingly use the IPSA debit card to ensure that the money they need to run their offices does not go through their personal bank accounts. The fact that MPs were forced to subsidise their offices from their bank accounts was almost a throwback to the 18th century, when Ministers had to pay for government from their own personal bank accounts. The situation was ridiculous, and we have made progress.

We have also made progress on travel, but accommodation remains a bugbear. I hope that the motion will be approved today and we can make progress. Let us be quite honest about this. MPs’ accommodation has been the kernel of the problem for the past 30 years. It has proved difficult because successive Governments have not wanted to bite the bullet. My hon. Friend originally tabled another motion for the Order Paper, but I understand that there were Government sensitivities about allowing it to go through. However, it would have maximised pressure on IPSA to reach a reasonable settlement on accommodation.

What is the way forward? So many of the problems with which we deal in public life are utterly difficult and intractable, as we know when we deal with the NHS, social security and the economy, but there is a simple solution staring us in the face on this issue, and there always has been. Although the old expenses regime was much criticised, when it began it was not an expenses regime but an allowances regime, effectively providing a flat-rate allowance. As long as it remained a flat-rate allowance, it worked. It began to go wrong when it became the expenses regime. The moment that we began to ask MPs to maximise their so-called expenses by submitting receipts, we ensured that sooner or later a Member of Parliament would end up in prison, which is what has happened. If it had remained a flat-rate allowances system, we would not have had all the issues that we have had.

I cannot prejudge what the Committee will do, but it is worth putting a marker in the sand, because we have made the point continuously in the regular liaison committee meetings with IPSA. People nod their heads, but our points are ignored. I just hope that if the evidence from the new Committee supports my point of view, and if the matter returns to the House, the new Committee will not be ignored. If it makes a sensible proposal that has been worked through for many months, with hearings of witnesses who have expressed their views, and offers a proposal to the House, I hope that at that stage the Government will not try to block it once again, just as successive Governments have always blocked every sensible resolution on the grounds that it is not acceptable to public opinion, they are not ready, and all the other issues. I think that public opinion is ready. All members of the public I talk with say, “Why can’t MPs just be allowed to get on with it? They should be paid a proper salary and left to live their lives.”

Some people claim that IPSA has made progress, but its latest reforms almost make the situation worse, because it is getting more involved in the family life of MPs. We are paid extra if we have children, and a slightly increased allowance when the children are between certain ages. What happens when the children grow up, which they always do? There are all those sorts of issues. We are going down the same track as our social security system, with more interference in people’s private lives. Frankly, how an MP lives their private life is none of IPSA’s business, nor anyone else’s. All we have to accept is that all MPs have to live some of their lives in London and some of their lives in their constituencies.

I have always thought, as was said time and again in the liaison committee, that the obvious solution was to build on the old London weighting allowance, which was a flat-rate, taxable allowance. If it is flat-rate and taxable, it is not the business of the Inland Revenue and there is no possibility for fraud or error. I am not suggesting that we can move to such a system immediately, as many MPs have now made arrangements for renting and should be allowed to continue with that very bureaucratic expenses regime, with receipts and all the rest of it, if they wish to do so. However, MPs must have some opportunity to opt out of that bureaucratic system and into a flat-rate, taxable allowance system. Otherwise, we will create perverse incentives. We also said in the committee that the more rules we have, the more perverse incentives there will be. For example, there is a perverse incentive for MPs who have been paying for their second homes with mortgages to rent those homes out and then rent themselves a flat, at greater cost to IPSA. How does that help the taxpayer? It is ludicrous.

I very much hope that the Committee will be set up, take evidence and come back with simple solutions that ultimately protect the taxpayer. That is what we are about. It should also ensure that MPs have the maximum amount of time to hold the Executive to account, which is why we are here. We are not here to have our staff spend hours every week enmeshed in some bureaucratic expenses regime. The only reason for our existence is to hold those people on the Front Bench to account in an independent and satisfactory way. I have to say that IPSA is still not there yet. I hope that, with the Committee being set up, we will finally make progress, cut the cost to the taxpayer and do the job we were elected to do.

--- Later in debate ---

[Mr Harper]

The Comptroller and Auditor General makes it clear that all the NAO’s work will be independent and evidence based. The answer to the hon. Lady’s question is that it is for Members to provide the NAO with that evidence. The NAO has a brief to look at the public sector as a whole; as its masthead says, it is “Helping the nation spend wisely”. If Members feel, as a number have said today, that there is a problem not just with the bureaucratic system, but with the time spent administering it by them and their staff, who are employed at public cost, they should take the opportunity to furnish the NAO with that information. I might be going a little beyond my remit here. I do not know how detailed the questionnaire will be. There might not be a specific question about this matter, but I suspect that there will be. If Members provide this information, the NAO will be able to take it into account. It is no good the NAO just looking at the scheme and the direct costs incurred by IPSA. If, because of the way IPSA is operating, it is putting an extra burden on our offices, which are funded by the taxpayer, the NAO should take that into account. The hon. Lady’s point is therefore very helpful, and Members should give the NAO as much information as possible, so that it can write a sensible, evidence-based report with recommendations. No doubt those recommendations will then be considered by the Public Accounts Committee, as is the usual process, and the Committee that we are setting up.

The Constitutional Reform and Governance Act 2010, which was passed in the last Parliament, amended the Parliamentary Standards Act 2009 to give IPSA a general duty to behave in a cost-effective, efficient manner, and to support MPs to carry out their work efficiently, cost-effectively and transparently. IPSA therefore has a statutory duty to do what it does transparently and independently, and cost-effectively. The NAO report will help to advise IPSA on whether it is complying with the duties it has to carry out under the law that set it up.

[Mr Leigh]

Will the Minister assure that House that when all this excellent work has been done and the Committee makes its recommendations, the Government —I know that he cannot give any absolute promises—will seek to give us a fair wind so that we can implement them?

[Mr Harper]

As with all reports from Committees of this House, the Government will look carefully at the recommendations. I do not think that my hon. Friend would expect me, given that the Committee has not even been set up, let alone started its work, to give assurances that the Government will carry out its every recommendation. The Government will of course study its recommendations. If its recommendations are about process, the scheme and how IPSA operates, they will be for IPSA to consider. Only if they are recommendations for legislative change will they be for the Government to recognise. Every Member who has spoken in this debate has confirmed that they are in favour of an independent and transparent scheme for paying our costs. Clearly, even if Members thought that there were issues, they would not immediately want the Government to rush into legislating. The right hon. Member for Leeds Central said wisely that when this House legislates on such matters in haste, it often comes to repent it.

The Government will look carefully at the considerations that the Committee makes, and I hope that IPSA will look carefully at them. If the review is carried out in that spirit, I think that it will be very productive.

--- Later in debate ---

[Mr Harper]

I made a distinction in my remarks. Clearly, if the Committee, or indeed the National Audit Office, makes recommendations about value for money and cost-effectiveness in the way IPSA operates, IPSA will pay attention to them, as with all its recommendations. It may be that the Committee makes recommendations about legislative change. However, we do not want to go back to a system in which the Government—heaven forbid—or the House start to micro-manage the details of the scheme. We have an independent system with transparency, and it is important that we stick with that. The Committee needs to bear that in mind. There will be two important audiences for what the Committee recommends. In the same way that we should not legislate in haste, we should not re-legislate in haste and change things further. The Committee needs to bear that in mind when it considers this matter, and should not immediately leap to the conclusion that we have to change the entire structure of the system.

[Mr Leigh]

There is a third audience: the taxpayer. Ultimately, nobody is independent of the House of Commons, because the House of Commons is not for us, but for the people—we represent the people and the taxpayer. If serious recommendations are made and IPSA ignores them, the House of Commons has a right to vote on its estimates and to reduce the amount it spends on administration.