Adam Afriyie
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(12 years, 11 months ago)
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Adam Afriyie (Windsor) (Con)
I beg to move,
That this House approves the recommendations of the First Report from the Members’ Expenses Committee on the Operation of the Parliamentary Standards Act 2009, HC 1484.
It is a pleasure to open the debate. I do not intend to detain the House for too long, as there has been a lot of debate on this subject. I welcome this opportunity from the Backbench Business Committee to present the findings of our very thorough and carefully conducted review of the Parliamentary Standards Act 2009. The Committee on Members’ Expenses was tasked with reviewing the operation of the Act to work out what were its aims—what was intended by Parliament—and whether those aims were being fulfilled, and to make any recommendations that were felt necessary.
I am delighted that the House has the opportunity to debate this issue and I thank hon. Members on both sides of the House for their support and input during the process of constructing the report. I thank in particular my fellow members on the Committee. We worked very hard in very busy circumstances to try to put together a report that truly reflected the evidence we received. Hon. Members will be aware that in many cases when one is on a Committee one has to pull back one’s personal preferences to ensure that what is delivered is fair and balanced and truly reflects the evidence and information provided. I thank the Chair of the Backbench Business Committee for making it possible to bring these issues to the House in a non-confrontational environment in which we can talk about matters that relate to the House and, primarily, to Back Benchers. This is a good forum in which to do that.
The party leaders and the House in general deserve some recognition for the initiation and passing of the Parliamentary Standards Act in 2009 and the amending Act in 2010. The House clearly decided to get rid of the old discredited system, to have independent regulation of Members’ expenses and to have that level of remuneration set independently. It also decided clearly that it wanted there to be more accountability for that body and these things than there had been in the past. I thank in particular the former Leader of the House, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), for stating very clearly what the intentions of the Act were prior to its enactment in 2009. I thank also the shadow Leader of the House at that time, the current Leader of the House and the former shadow Leader of the House in the current Parliament for being entirely consistent in their presentation of the aims and objectives behind the legislation and for being persistent in trying to ensure that those aims and objectives were met.
Contrary to most media reports, the review that I present on behalf of the Committee is not particularly controversial. It is completely in keeping with the aims of the Act, as they were laid out. There are seven fairly clear aims about, for example, value for money, accountability, not deterring Members from making claims, being open about what is going on—the transparency side of things—and not creating a system that is unfair for Members who do not have independent means or who do not have families. We were very mindful of those objectives when we conducted the review and I highly recommend that hon. Members read the first section of the report, which runs through the history of payments to MPs. That section also runs through each of the Act’s aims and analyses the extent to which they are currently being met.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
My hon. Friend has thanked various people. Will he accept my thanks and those of many colleagues for all the work he has put into this report? This is an extremely controversial matter and he has shown great leadership and sacrifice in doing all he has done.
Adam Afriyie
I thank my hon. Friend. If I could, I would probably flush up at this moment, but luckily hon. Members would not know if I had.
The objective of the review and its recommendations was to make sure that the aims of the Act, on which the majority of the House agreed, were being met in reality. Let me dispel a couple of the misleading ideas that are bouncing around about the report before I go through its recommendations so that the House is fully aware of what we might be accepting or putting over to the Independent Parliamentary Standards Authority a bit later.
Mark Pritchard (The Wrekin) (Con)
I, too, congratulate my hon. Friend on the hard work that he and his Committee have done over the past few weeks. During the expenses scandal, issues that came up included not only the misappropriation of public funds by a minority of Members in the House but the cost of politics. Could my hon. Friend set out whether his recommendations would drive up or drive down the cost of politics?
Adam Afriyie
That is one of the key issues that we looked at. If Members go through the recommendations—I will run through a few of them in a moment—they will find that their primary motivation is to find ways of reducing the costs of bureaucracy for the taxpayer and to achieve better value for money. At the moment, there is a huge burden on Members because of the unnecessarily long time that it takes to navigate the expenses system, and that places a cost burden on our constituents—the taxpayers. It also takes Members, and their staff, away from serving their constituents and performing the functions that they were elected to perform. My hon. Friend the Member for The Wrekin (Mark Pritchard) hit the nail on the head with his remarks, because at the forefront of our minds was the question, “What recommendations can we make that will reduce the overall costs and ensure that the system is still accountable?”
Bob Russell (Colchester) (LD)
I want to put on record my appreciation of the front-line staff of IPSA, who have to work a system that is not fit for purpose. In addition to there being costs to Members of Parliament and their staff, the National Audit Office believes that in 38% of cases the cost of processing a claim is higher than the amount for which the claim is being made. Will my hon. Friend confirm that?
Adam Afriyie
That is a fascinating statistic. We had a session in which we looked in particular at value for money, and that message came through loud and clear. Anyone in the House with a background in business or in a medium-sized organisation that runs an expenses system will recognise that something needs to be looked at if the cost of processing a large minority of the claims is higher than the value of the claims themselves. Some of the recommendations are very much directed at helping IPSA to move to a system that is less expensive to operate and in which taxpayers’ resources are being spent as they would wish: on activities such as supporting democracy and ensuring that constituents are serviced, rather than supporting unnecessary bureaucracy.
Mr Andrew Smith (Oxford East) (Lab)
What would the hon. Gentleman say to the argument that the public might well see it as rather self-serving of MPs if his cost-saving proposals had the effect of there being less scrutiny of the money that they spend? Would not the public, in the wake of the scandal, be particularly concerned about that?
Adam Afriyie
That is absolutely right. The right hon. Gentleman could have been a member of the Committee, because that was exactly the attitude adopted by every member throughout. We asked ourselves, “Can we, with our recommendations, improve the transparency and the accountability to the public beyond what is being offered under the current regime?” That was exactly the direction of travel and I urge the right hon. Gentleman to have a good look through the 19 recommendations, because he will see that we seek to address that issue.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
As a member of the Committee, I add my thanks to the hon. Gentleman for all the work that he has done. Does he agree that it is unfortunate that some of the media reporting has perhaps given the impression that the Committee was making recommendations for something that would be less transparent, when nothing could be further from the truth? We want to see more transparency, better value for the taxpayer and independence in setting pay, allowances and expenses for MPs.
Adam Afriyie
The hon. Lady makes the point very well. Those who actually read the report will see that that is exactly what we were attempting to achieve. I think that we achieve it elegantly in our recommendations to IPSA on how to improve the way it operates, and we achieve it in quite a moderate fashion in the recommendations that the Government may want to take up in the months and years to come.
Sir Peter Bottomley (Worthing West) (Con)
I echo the words of my hon. Friend the Member for Colchester (Bob Russell) about anything that we say here not being derogatory about IPSA staff, who face the same problems we do. I draw the attention of my hon. Friend the Member for Windsor (Adam Afriyie) to the answers in annex 1, which show that four out of five MPs think that IPSA is not effective in helping us to do our job. I tried to ring IPSA this morning, because I see that 99 times out of 100 it answers the phone within 60 seconds. I started calling at 9 o’clock; it is now half-past 12. That is three and a half hours. It is a bit like the train operating company that said, “No trains this morning were late because we didn’t run any.” IPSA will not answer the phone before 1 o’clock, and then we discover that the person we want is at lunch. If the amendment is carried—I am not sure whether it should be—will my hon. Friend try to persuade IPSA to pay attention to the detail of the report? Does IPSA have to be the only public service that for half the day is not available to somebody who wants to ring it?
Adam Afriyie
That is another point very well made. I hope that the direction of travel in the recommendations will precipitate such an outcome when IPSA reflects on them.
I draw everyone’s attention to the survey in annex 1, on page 66, which contains some telling statistics. We conducted a brief survey towards the end of the inquiry to ensure that we were picking up contemporary, rather than historical, points of view of Members of Parliament. There are some striking figures. For example, 81% of MPs do not believe that the board of IPSA has been effective in supporting MPs in conducting their duties. Even if the intention was to be supportive, it is quite telling that over 80% of MPs do not think that it is. Another fascinating statistic is that 93% of MPs are subsidising their work here. That is a contemporary figure from two or three weeks ago.
Bob Russell
Does my hon. Friend know of any other profession or occupation—perhaps the world of journalism? —where 93% of the work force are subsidising the work that they do?
Adam Afriyie
It is incredibly unlikely. As I say, 93% are subsidising their work to some degree—some, about one in 10, to the tune of over £10,000 a year. One of the main reasons cited, by 83% of MPs, is that they are trying to protect their reputation. The bi-monthly publication cycle allows for misleading comparisons. The report calls for more transparency—perhaps we could publish in real time. However, the misleading bi-monthly publication routine means that MPs are trying to protect their reputation, which is the thing most valuable to them. Let us not think that that is a selfish act; it is an act that works to protect our democracy. If individual MPs are constantly being lambasted in their local media for making legitimate claims but having false comparisons made, that undermines democracy overall and harms the reputation of Parliament. That is why one of our recommendations is that IPSA should become a lot more transparent in its publications.
We make a recommendation about annual publications. At the moment, it is incredibly difficult for the public to see what is going on. They have to print out one page and then another, and try to compare them. That does not work, so we recommend that the annual publication is searchable and easily accessible to the public so that they can make sensible comparisons from year to year, rather than misleading ones drawn from the bi-monthly publications.
Jo Swinson (East Dunbartonshire) (LD)
There are many helpful suggestions in the report, not only on how IPSA can pursue matters in a most cost-effective way but particularly on the issue of transparency, which is crucial. I wholeheartedly endorse what the hon. Gentleman says about real-time publication and making it easier for the public to search. I am also delighted to see that the Committee has recommended to IPSA that the underlying receipts should also be published so that anybody can see all the evidence, obviously with credit card details redacted for security. That is essential.
Adam Afriyie
I thank the hon. Lady. The whole thrust of the report was to make sure that there is value for money for the taxpayer and that transparency is enhanced and improved. However, our primary aim, which we reaffirm in recommendation 1, is that we want the independent determination of the payments system for MPs’ costs and independent regulation to continue, and to continue to be robust. Let me dispel myth No. 1. Nothing in the recommendations seeks to undermine the independence of IPSA and the power of the regulatory function performed by that outside body. That was paramount in what we were doing. The Act was right in that intention, and it should remain, which is why we reaffirmed it in recommendation 1.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Many of us very much admire the hon. Gentleman’s work in this field. We all feel very exposed. We all have an individual relationship with IPSA. Being able to share in a debate such as this is very useful, but I constantly feel that we need a parliamentary association that can act for Members of Parliament across the Benches when these very important issues about how we best fulfil our functions come up.
Mr Edward Leigh (Gainsborough) (Con)
I chair the liaison committee with IPSA, which includes Members from all parties, and know that it can be a deeply frustrating experience. We do our best, but one of the problems we have had is trying to convince IPSA that its primary motivation must be to allow MPs to do their job and have a system that is not bureaucratic, does not allow fraud or error and, above all, saves taxpayers’ money. That is why a central recommendation of the report is that there should be an independent cost-benefit analysis of whether a flat-rate, taxable allowance, so that there could be no fraud, error or detailed administrative costs, would save taxpayers’ money.
Adam Afriyie
I thank my hon. Friend for his intervention and for his work on the Committee. I think that together we came to a very moderate view that we hope will, if the recommendations are accepted, move the whole thing forward.
Mr Andrew Tyrie (Chichester) (Con)
Does my hon. Friend agree that the key message that must come out of today’s debate and go to the Front Bench as well as to IPSA is, as my hon. Friend the Member for Gainsborough (Mr Leigh) has just said, that IPSA’s primary duty must be to ensure that we can do our job, and the plain fact is that many of us find it has become an obstacle to our doing that? That is why the legislation needs to be changed. Does he also agree that it is extremely important that these recommendations are not kicked into the long grass, and does he share my hope that Front Benchers will do nothing to obstruct this early implementation, which is clearly sensible?
Adam Afriyie
That is another point well made. I will tackle the point made by the hon. Member for Huddersfield (Mr Sheerman) first and then move on to deal with that made by my hon. Friend.
If we think about the rest of society and the work we do as MPs—this is not a sob story, but I am sure that it will be reported as such—we will realise that every other body has a pressure group, a trade association, a trade union or a communications or public relations company working for them. We want our great British democracy to be an icon of honesty, transparency and straightforwardness around the world, so it is curious that Parliament appears to be the only organisation that does not have a similar function. IPSA, which is a small organisation, has two or three people dealing with its communications, but in Parliament there is no one to give the other side of the story. That is not a recommendation of the report, but simply my own observation to back up what the hon. Gentleman said.
Mr Sheerman
The trouble is that the three main parties in the House tend to be represented by the Whips, whose view of what goes on here is very different to that of most Back Benchers, so the call that I would like the hon. Gentleman to make for a parliamentary association might be what we need.
Adam Afriyie
The hon. Gentleman makes his point well. It is not in the report, but I accept it.
To return to the point made by my right hon. Friend the Member for Chichester (Mr Tyrie)—[Interruption.] Have I just promoted him?
Adam Afriyie
Indeed he should.
The report contains two pretty uncontroversial recommendations, and again this brings me to the second misrepresentation. The first recommendation, which is for the Government, is that the primary duty of the independent regulator and its administration should be to support MPs to perform their duties cost-effectively and efficiently. The Committee on Standards in Public Life and the constitutional historians we spoke to recommended that, as virtually every body in the world has that kind of line in their legislation. There is no time limit on that, so we recommend that the Government should at some point get around to doing that, and I urge them to do so.
IPSA is unique in being both the regulator and administrator of an expenses system. The second recommendation is that the law should be updated to enable the separation of those two functions. We are not saying that the administration function should definitely come to the House of Commons. We say nothing of the sort. We are not going to recreate the old Fees Office, which would be absolute madness, so that will not happen. However, we should be able to separate those two functions within the legislation, and I urge the Government—there is no need to answer this now—to make headway and look at how we might facilitate that while ensuring that the regulatory role is entirely independent of the House.
Stephen Williams (Bristol West) (LD)
As a member of the Committee, I would like to put on the record my thanks to my hon. Friend for his patience in trying to reconcile the views of the Committee. On the point he is making, in addition to the separation of IPSA’s regulatory and administrative functions, was not another stark factor presented to the Committee the extraordinarily expensive way IPSA administered a relatively small number of transactions and the fact that many other organisations, whether inside the House of Commons or elsewhere, could do that for much better value for money for the taxpayer?
Adam Afriyie
My hon. Friend the Member for Bristol West (Stephen Williams) was incredibly helpful during the Committee’s deliberations, for which I thank him. We all have strong views on these matters, some of which will be very different, so I thank him in particular because we all moderated our views somewhat to look at the evidence and see where it pointed us. We came to a good conclusion on how the system can be become more efficient. I should also point out that there have been arguments from the press again, and unfortunately from elsewhere, suggesting that somehow the report wants the House to regain control of expenses. That is utter nonsense. There is nothing in the report that seeks to do that. If there is any lack of clarity, I am happy to tidy it up or answer any questions. All the recommendations, other than 2 and 3, are for IPSA. It has the power to accept or reject them. We hope that it will accept them, but it has the power. There is nothing in the report that alters the relationship. If anything, one or two of the recommendations seek to increase the distance between Parliament and the regulator and urge IPSA to be more transparent.
Alison Seabeck (Plymouth, Moor View) (Lab)
I have a fairly straightforward question. Does the hon. Gentleman expect Sir Ian Kennedy and IPSA to respond publicly to the Committee’s recommendations?
Adam Afriyie
The amendment to the motion makes that point and proposes that IPSA should address the report in its annual review, and I have no objection to that and hope that it will respond. It seems to have indicated that it will respond at some point, which would be great. The House will await that response and then take a view on it, but it is for IPSA to decide whether to implement these cost-effective measures or reject them.
Alison Seabeck
Is not part of the problem, and part of the frustration that Members of the House feel with IPSA, the fact that we do not get responses from it? I have written to Sir Ian Kennedy on a number of occasions but have yet to receive a reply signed by him. I would like a public reassurance from IPSA that it will respond thoughtfully to the recommendations of what is an excellent piece of work by the Committee.
Adam Afriyie
Again, that is a perfect observation. In the survey that was conducted, MPs were asked on how many occasions in the last six months IPSA lost paperwork that they had submitted in support of a claim. Some 62% of MPs replied the IPSA had lost paperwork. In response to a question on the consistency of advice, the majority of MPs said that advice has been inconsistent. We updated the survey specifically to ensure that we were talking not about the history of the organisation and what happened when it was set up, but about the current reality for Members trying to get on with their work. What the hon. Member for Plymouth, Moor View (Alison Seabeck) said is reflected in the information and evidence within the report.
I will focus on two recommendations for the moment before concluding my remarks. I just wanted to dispel many of the myths that have been knocking about.
We recommend that IPSA should move as far as possible to a system of direct payments. There are lots of reports in the media about MPs and whether they are pocketing money, but, as we know, certainly since the beginning of the new Parliament, that has not been the case. Even IPSA would agree, because it has robust systems, but the Committee says, “Why keep paying money to MPs, who then have to pay it to their member of staff who bought a toner cartridge three months earlier?” Many payments could be made directly to suppliers, so that the money does not go via MPs. They are not MPs’ expenses, they are the costs of running an office, and I cannot imagine that anyone in the country buys their own office furniture and then reclaims the costs.
Bob Russell
“Expenses” is the wrong word; those costs are allowances for us to do our job. My staff salaries are not my expenses.
Adam Afriyie
That point is reflected in recommendation 8, in which the Committee states that there should be a “clear distinction” between those costs that are commonly associated with an MP personally, and those costs that clearly relate to running an office and paying staff. They do not come anywhere near an MP; they are merely the cost of providing a service to the public.
Jo Swinson
The hon. Gentleman’s remarks on the separation of the administration and regulation of expenses are interesting and helpful, and I understand why those roles should be separate, but some media coverage might have been generated in part by the recommendation stating:
“The best arrangement would be for that separate body”—
the administration—
“to be within the House of Commons Service”.
Some Members, and certainly I, feel that that is absolutely the last place to which the administration of expenses should go. A separate accounting firm might be able to administer them more cost-effectively, but please let us not return them to the House authorities.
Adam Afriyie
I thank the hon. Lady for her view, and I can understand the shudder that would go up the spine if it looked as though we were making such a recommendation, but we are not. The Committee’s opinion is that the House is probably the best place for such an administrative role, because the IT systems and infrastructure are already in place, but that is not our recommendation. It would be misleading to suggest that we recommend the return of such administration to the House; we simply say that we think that that is the best way. All that is needed is to enable the separation of the two roles.
If Members are concerned about that idea, I challenge them to find any other body in the world which is both regulator and administrator. IPSA is unique: we would never allow such an arrangement in any other walk of life, and it is certainly unique when it comes to Parliaments and payments to Members.
Mr David Winnick (Walsall North) (Lab)
May I pay tribute to the hon. Gentleman for his excellent work in this regard but, at the same time, strengthen and support what the hon. Member for Colchester (Bob Russell) has said? Among the general public, the thinking is that expenses are taxi fares and the rest, but they do not understand—understandably so—that expenses include the salaries that we pay our staff, without whose work we could hardly carry out our duties as Members. The sooner this silly and unnecessary term “expenses” is changed to a relevant one, the better we will be.
Adam Afriyie
That point is echoed and very well made as a recommendation in the report. IPSA is taking some steps in that direction, and I hope that the report encourages it to move more quickly.
Let us remember that all the changes we made in 2009 were about improving the public’s confidence in this institution, but that cannot happen if the way information is published misleads people into believing something different. I am concerned in particular about the new intake of MPs, and at some point I will ask IPSA, “How many members of the new intake do we honestly think have been terribly devious and tried to cheat their expenses?” I think that the answer is zero. The robust systems in place indicate as much, but every eight weeks Members are lambasted in their local press for claiming something, so something is wrong with the way information is presented, and that is what the report tries to tackle.
Daniel Kawczynski
I very much hope that as part of my hon. Friend’s recommendations to IPSA he challenges it also to interact with our suppliers to lower the costs that we pay to some of them, such as Cellhire, which I personally think are extortionate. I very much hope also that IPSA will use bulk purchasing contracts in future to drive down our costs.
Adam Afriyie
The report also makes that recommendation, urging IPSA to continue in that direction and, as far as possible, like most other organisations, to do some central purchasing and secure some wholesale agreements, as it has with rail travel. It is stepping slowly in that direction, but we urge it to move a lot more quickly, so that our time and that of our staff can be spent on constituents rather than on unnecessary bureaucracy.
It is very hard to see anything controversial in our report; it is incredibly moderate, calm and analytical. It also asks that IPSA be more transparent and explain to the public—on its website, or in a letter to us—its existing system of supplements for London, for the outer London area and for mileage; explain its rationale for those items, which it has introduced, because the public need to know why it has done so; and then to show very clearly the methodology behind the calculation that enables it to arrive at its figures for those supplements. That would be a very useful exercise, because then people might see how the numbers are calculated and where they come from.
In the second part of recommendation 17, we say that if the system that IPSA has already introduced to London and the outer London area were rolled out—so we are not making a decision on it, but saying, “if it were rolled out”—let us ask a third party, not us or IPSA, to undertake a cost-benefit analysis to see whether it saves taxpayers money and provides them with value for money. Even if it does, and it may not, that is not good enough, however, so we recommend that a third party evaluate whether the system continues to meet the aims of the 2009 Act. Again, that is pretty uncontroversial: we simply, and perfectly reasonably, ask for information, and for an analysis and evaluation to be undertaken.
Recommendation 17(c) may have caused a little concern. During my discussions with the Leader of the House and others, there was some concern that it implies that Members should take control of the expenses system again and “decide” what IPSA does. May I just be absolutely clear, however, and ask Front Benchers to reflect on the fact that, if that were the argument, I have made it clear—including in the amendment that I attempted to table—that that is definitely not the intention? If a word is slightly out of place, I would just say that the report is not legislation but merely a set of recommendations, and I apologise on behalf of the Committee.
The recommendation states that, once the cost-benefit analysis has been completed and we are able to work out whether the taxpayer would get better value while accountability, transparency and everything else are maintained, the House should express its opinion, which I imagine would be in the form of a motion or an early-day motion, stating: “In the opinion of this House, we think this piece of work is jolly good and IPSA should think about it.” We would not be overruling IPSA—nothing of the sort; it would be another recommendation in a report, and that would be it.
Sir Peter Bottomley
Will my hon. Friend explain recommendation 18, which states that MPs should have no increase in pay during a Parliament? I agree with that, but should it not read as IPSA setting, in advance of an election, what the pay will be?
When I searched for best matches for IPSA telephone operating hours, the search engine recommended that I go to the International Professional Surrogates Association, which deals with problems of “physical and emotional intimacy”. That is the problem we have with IPSA.
Adam Afriyie
I suspect that we have some of those problems in the House as well.
On recommendation 18, in the Welsh Assembly and many others throughout the world a figure is set for the duration of a Parliament. We now have fixed-term Parliaments for five years, but the Committee felt that, even if we did not, it would be far better to select a figure that remained the same for the entire Parliament. Then we would not have the constant moving around and unnecessary changes that we currently experience. The situation seems to work very well in Wales with the Welsh Assembly and elsewhere, so we recommend not that IPSA introduce the proposal, but that it look at it, so that we do not have stories every three months about another change—another shift in the level—and whether a figure relates to RPI or to CPI. Let us forget all that and just have a fixed figure that runs for a Parliament.
Mr Andrew Smith
I am grateful to the hon. Gentleman, who is being generous in giving way. I take him back to recommendation 17(c), which states:
“In not more than six months’ time, the House should have the opportunity to consider the merits of that cost-benefit analysis and evaluation”—
which the hon. Gentleman referred to—
“and to make a decision on whether there should or should not be a system of regional supplements instead of the existing travel and accommodation provisions.”
Does he accept that that is wrongly worded and inconsistent with what he has said? I, for one, would find it unacceptable because it compromises the independence of IPSA.
Adam Afriyie
We can quibble about one word in a report that is 100 pages long. I am telling hon. Members on behalf of the Committee that that was not the intention. The intention was simply to express a view about whether that was something that we would like to see. Basically, it would be like another recommendation to IPSA.
I hope that there is not going to be some massive argument about the issue; I have just made it absolutely clear to the House what was intended. By the way, I have also put the matter in writing to Front Benchers. Furthermore, I have now stated that I imagine that there would be a statement or early-day motion that said, “The House’s opinion is that we like it or do not like it.” The issue is for IPSA, not the House, to decide. We are looking for demons where they do not necessarily exist.
Mr Leigh
The right hon. Member for Oxford East (Mr Smith) can be reassured because the House cannot order IPSA to do anything, except by an Act of Parliament. We could pass any motion we liked to express an opinion, but that could not force IPSA to do anything. The right hon. Gentleman talks about the House making a decision, but it is making a decision to express a point of view, and IPSA is independent.
Adam Afriyie
I draw hon. Members’ eyes back to the first recommendation—the first thing that we are insisting on is that that independence should remain. That is what this whole thing was about. We were not tackling that in any way, other than to say that in some ways that independence should possibly even be enhanced through a separation of the administration and regulatory functions, so that IPSA would be in an even more powerful position to do the regulation, audit and checking, rather than doing the administration.
Adam Afriyie
I will give way twice more, and then I will definitely stop. I give way first to my hon. Friend.
Mr Bone
My hon. Friend is making an extraordinarily powerful and well reasoned case. But is it not a fact that a vote on his motion would simply say that the House approves of the recommendations? It could not force the Government or IPSA to do anything. May I suggest that a lot of misinformation is being given out by the usual channels?
Jim Sheridan
Are there any recommendations in the report about the principles afforded to IPSA? Is it subject to the same transparency and accountability in terms of salaries, bonuses and hours of work, so that we can see exactly what it is doing?
Adam Afriyie
We did not make any recommendations in that field; I simply observe that, given how things are worded, IPSA should be equally transparent. We ask it to tell us what it is doing, explain its logic and show its calculations so that the public can make a judgment on whether that is the right way to do things. Point taken.
I shall conclude my remarks, as I have gone on a fair bit longer than I intended. I have seen the amendment to the motion. I was a touch surprised that it should have come from a member of the Committee, given that we had not spoken about it beforehand, but I thank my hon. Friend the Member for Aberconwy (Guto Bebb) for all his work on the Committee; he made a great contribution and we reached a moderate set of proposals.
My own feeling is that we have presented the recommendations to the House, and IPSA can see them now. The Government may want to consider a few things in the medium term about these minor, non-controversial legislative changes. If the amendment to the motion is agreed to, I would not be happy about that but ultimately I would not think it was the end of the world.
I know from some of the feedback that I have had in the past few days that Front Benchers have been quite disoriented in their vehemence; I am quite surprised about some of the stories in the newspapers. I just ask Front Benchers to take the issue in a reasoned, calm fashion. Let us not be combative. They have heard my view on the amendment. Let us get on with this gently, without fear or favour, in the interests of taxpayers, transparency and making this place work. Above all, we need to ensure that we do not get a two-tier Parliament in which those with independent means enjoy an easy ride relative to those who need to claim because they cannot afford to subsidise themselves.
Mr Raynsford
If my hon. Friend reads the transcripts of the evidence, he will see that the Committee took evidence from Sir Ian Kennedy in two sessions. He will have to draw his own conclusions from the views set forward by Sir Ian Kennedy. I have to say that we did not feel that there was a meeting of minds that would suggest the likelihood of a smooth and easy transition from the current arrangements to ones that would work properly and effectively, and in a way that guaranteed the public confidence in Parliament that we all want to see.
The report recommends the establishment of a liaison group between IPSA and representatives of MPs’ staff. I found it extraordinary that no such group exists, but that probably explains why IPSA, in some of its evidence to us and in some of its responses to MPs, appears to be surprisingly ignorant of the practical implications for the staff in this place of operating the systems that it has set up. The establishment of a liaison framework between IPSA and MPs’ staff, who do the bulk of the work in making claims and processing applications, is surely commonsensical and ought to be done.
I cannot see how the many pragmatic and sensible reform proposals in the report merit the intemperate language that has been heaped on them by some media commentators. However, let me in conclusion focus on two recommendations that might appear to be more controversial. The first is the proposal to amend the legislation to make it clear that the independent regulator should, in line with the recommendation of the Committee on Standards in Public Life,
“support MPs efficiently, cost-effectively and transparently in carrying out their parliamentary functions”.
The way in which that recommendation was transposed into legislation allowed a loss of clarity.
Adam Afriyie
It struck us in the evidence sessions that even the chairman of IPSA acknowledged that he did not quite have the mandate to justify supporting MPs in the way that he wanted, because the legislation says that he must “have regard to” the principle of supporting MPs cost-effectively and efficiently, rather than it being a primary duty. It is clear from all the observations and evidence that there can be no other primary duty for such a body than to support MPs cost-effectively and efficiently in doing the duties that their constituents expect.
Mr Raynsford
I agree very much with the hon. Gentleman. It is clear from the evidence that there is a lack of clarity in the legislation, and that needs to be resolved. It cannot be satisfactory for the chairman of IPSA to talk in fairly broad terms about balancing a number of different considerations, some of which are in legislation and some of which are not. That gives no clarity about what the role and responsibility of the independent regulator should be.
There is a persuasive case for making this change. This is not MPs arguing for support, which some journalists have interpreted it to be. It is not us saying that we need customer care, as has been suggested. This is about clarity in the role of IPSA and in the balance that needs to be struck in its work between ensuring that MPs have the support necessary to carry out their functions properly, in a cost-effective and transparent way, and ensuring that all the other objectives that we want are satisfied. The lack of clarity needs to go. The arguments are set out very persuasively in paragraphs 8 to 13 of the report, and I commend them to right hon. and hon. Members.
The second recommendation that might be seen as controversial is in respect of flat-rate allowances. The first thing that I should say is that it is sometimes ignored that there are existing flat-rate allowances. As a London Member, I obviously receive one such allowance. Members from outer London and the immediate surrounding areas are also eligible for an additional allowance. Those elements exist at the moment.
It was put to the Committee that there might be a case for extending that principle of allowances to cut out much of the considerable cost involved in checking and processing individual claims for travel and accommodation costs. I can see an argument for that, but I am not wholly persuaded that it should be done. I do believe, and I think that the Committee believes, that it is right for the idea to be evaluated independently. That is why the recommendation in the report states clearly that there should be an independent evaluation of it.
Guto Bebb
I am grateful. It came from various colleagues, and indeed from some Parliamentary Private Secretaries, who despite the fact that there is a one-line Whip are staying around today. That might indicate why I had my concerns.
The report is an important piece of work and contains proposals to better the situation. Crucially, and in contrast with the media comments on it, a large part of the Committee’s work examined not the unfairness of IPSA towards Members—we have spoken at length about that in the Chamber—but how it has discriminated against our staff. That issue has been ignored time and time again when we have discussed how IPSA operates. It has created real barriers to promotion for staff members, and they have found themselves worse off for child care. There are serious proposals on that in the report, which IPSA should take into account.
It is frankly astounding that IPSA has not formally spoken to any organisation responsible for our members of staff. There are recommendations in the report that it should be allowed to think carefully about and take forward. I would not want to end up with the report being rejected by the House, allowing IPSA to ignore its responsibility to consider those recommendations seriously.
Before becoming a Member of the House, I ran a small business for 17 years, so I believe in a pragmatic approach to what can be done. There are 19 recommendations in the report, and I stand by them, although I would say that we need to explain recommendation 3 in detail. I take full responsibility for the wording of it, because I was a member of the Committee, but it has allowed the media to attack us on the basis that we want to bring the expenses system back in-house. A Committee of Members came up with that wording, and I am as responsible as anybody else.
We need to consider carefully whether the administration and governance of the system can be split, and whether better value for money can be achieved by allowing IPSA to subcontract the work of administering it. The media’s conclusion from looking carefully at the wording of recommendation 3 has been unfortunate—I do not believe the conclusion that has been drawn was the intention behind the report. As my hon. Friend the Member for Windsor (Adam Afriyie) and the right hon. Member for Greenwich and Woolwich (Mr Raynsford) have made perfectly clear, that was not the report’s purpose. If there were transcripts of our discussions in Committee, they would make that apparent.
Adam Afriyie
I respect the work that my hon. Friend has done with the Committee. I have already pointed out my slight frustration and disappointment with the fact that we have not spoken—there would have been other ways of achieving his goal, but his actions ruled them out.
I simply observe that the report is not a legal document. It is not a Bill or a piece of legislation but a general set of recommendations for small changes to legislation that are not that controversial. The absolute precision of the wording—one word here or there—does not make any difference. The report does not commit anybody to doing anything with such precision.
Guto Bebb
I am grateful to my hon. Friend and accept his comments, but that has not been my argument. My argument is that Members need to have a great deal of confidence in IPSA to believe that it would not see a rejection of the report by the House as an excuse not to take its recommendations seriously.
Mr Harper
I will. In summary, the recommendations that trespass on IPSA’s independence are recommendations 2, 3, and 17(c). It is worth drawing the House’s attention to one other thing. My hon. Friend the Member for Windsor and the right hon. Member for Greenwich and Woolwich (Mr Raynsford) made it clear that they did not in any way want to trespass on IPSA’s independence, but however frustrating we find an independent regulator, we cannot give it instructions—
Mr Harper
Hang on. Let me finish this point and I will give way. Paragraph 204 of the report acknowledges that some of the Committee’s “recommendations require legislative changes” but also states that other recommendations do not require legislation
“but could be brought about in that way if IPSA does not act.”
The report also says that the Committee believes that legislation should be introduced to implement its recommendations if
“IPSA’s Board has not implemented”
them.
Mr Harper
I have said that I will take my hon. Friend’s intervention if I am allowed to finish my point.
We cannot have an independent regulator and expenses system, and then say that if it does not follow the views and advice that we give it, we will legislate to implement them. Those things are not compatible. In paragraph 205 of the report, the Committee states:
“We urge the Government and Parliament to have the courage to reform the system of payments…by implementing our recommendations.”
From the way I read that—I am happy to be put straight by hon. Members—it seems that there is a conflict between the recommendations in the report and an independent system. It says to IPSA, “If you don’t do them, we will legislate to do them anyway,” which trespasses on the independent system.
Adam Afriyie
I shall be polite in this intervention, but frankly, my hon. Friend has had to work very hard to find a tiny little thing to object to, but it does not say what he is suggesting. Nowhere in the report does it say that we should not have independent regulation and nobody is saying that—the first recommendation is that independent regulation should be reinforced.
Paragraph 204 merely states the obvious. In a parliamentary democracy, Parliament ultimately has the power to do anything. It does not recommend that the Government make legislation. Only recommendations 2 and 3 recommend change. Paragraph 204 is not a recommendation but an observational statement. The Minister could dig out a sentence from any report to try to make a point that simply is not there.
Mr Harper
I want time to set out our recommendations, but the report states:
“Some of our recommendations require legislative changes; others are not dependent on legislation, but could be brought about in that way if IPSA does not act.”
If the Committee had stopped there, my hon. Friend’s point would have had some force, but it did not. The report goes on to say:
“We believe that step should be taken”—
meaning that legislation should be introduced—if IPSA
“has not implemented the recommendations of this report by 1 April 2012.”
Adam Afriyie
I am sorry to disappoint the hon. Member for Colchester (Bob Russell). The point is that this is not a recommendation of this report. It is merely an observation that members of the Committee have made. If the Minister goes through the 200 or 300 pages of the report, he will find plenty of other observations that people have made. This is not a recommendation, so the Minister is working a little bit too hard on an argument that does not really exist.
Mr Harper
It is one of the conclusions of the report. I will now move on to the three recommendations. Most of the recommendations in the report are for IPSA to consider. As Members on both sides of the House have said, many of the recommendations are very sensible and I hope that IPSA looks at them and takes them into account. In response to the report, IPSA has said that in some areas, it and the Members’ Expenses Committee are in agreement. Indeed, it has already introduced some of the suggestions that the Committee has made. IPSA has gone on to say, and has confirmed, that it will consider the recommendations of the Committee as it carries out its annual review of the scheme, which is very welcome.
Adam Afriyie
What is clear from the statement in the report, and clear overall, is that the purpose of creating the legislation was to improve the public standing of Parliament, but the primary duty of the body administering and regulating must be to support. The CSPL said that there cannot be any other primary purpose than to support Members in performing their functions. The Minister is slightly confusing the two issues—one is the purpose of creating legislation and the other is a primary duty provided to IPSA, rather than a statement that it must have regard to something, which it may or may not decide that it wishes to.
Mr Harper
I do not think that the two are mutually exclusive. Indeed, I would argue that if Members are to be able to carry out their parliamentary functions efficiently, there must be public confidence in them. If the public lose confidence in us and in this institution, we shall be in deep trouble.
Mr Harper
The right hon. Gentleman has put it very well. I cannot really add anything to what he has said.
A number of Members talked about costs and how efficiently IPSA did its job. I should emphasise that IPSA itself has a legal duty to be efficient and cost-effective. The National Audit Office’s report, which has been mentioned by a number of Members, noted that IPSA had significantly reduced its cost per claim, observing:
“This is impressive by the end of its first year of operation”.
The report went on to say, however, that
“IPSA is dealing with a much higher number of claims”
than were made in other UK legislatures in the UK,
“and should therefore be able to be the most efficient in the future.”
Given that, as I said, IPSA itself has a legal duty to be efficient and cost-effective, I think that it will be mindful of the thorough work done by the National Audit Office and the important recommendations that it has made.
I shall read out recommendation 3 so that Members can be clear about what it says:
“IPSA’s current administrative role should be carried out by a separate body, so that IPSA is not regulating itself, and the Act should be amended to permit this. The best arrangement would be for that separate body to be within the House of Commons Service, both because such a body would avoid imposing undue burdens on MPs and because it would benefit from the economies of scale of being part of a larger organisation in areas such as human resources and IT. Independent regulation by IPSA and transparency would ensure that it did not replicate the deficiencies of the old expenses system.”
I entirely accept that the Committee’s intention is not—here I paraphrase a media report—to go back to the old Fees Office, but it did not exactly go out of its way to make it difficult for the media to draw that conclusion, and I think it would be difficult for the House to agree to a recommendation that contains such a reference.
Another point requires clarification. IPSA’s administrative role falls into two categories: deciding whether claims should be allowed—what is called in the legislation “determining” claims—and paying those allowed claims. IPSA already has the power to contract out the payment of those claims, which is set out explicitly in the legislation. It can also contract out the payment of our salaries and the administration of our pensions, now that it is responsible for those. Under the legislation, however, it must retain direct control of the scheme for our expenses and decisions on the claims.
I believe that the deciding of claims should remain with IPSA, and the best way of explaining why I believe that is to quote paragraph 74 of the report, which quotes the Committee on Standards in Public Life:
“The CSPL noted in 2009 that both the Scottish Parliament and the National Assembly for Wales”—
the way in which the Scottish Parliament carried out its work was referred to in our debate in May, and has also been touched on today—
“had felt able to retain self-regulation by adding safeguards, but noted that ‘the difference is that neither ... has suffered a crisis of trust remotely comparable to that which has affected Westminster.’”
I think that, for that reason, the determination of our claims should remain with IPSA. The payment can already be contracted out if IPSA considers that to be more cost-effective and sensible. Other Members have said that we should not return to the old Fees Office approach, and I accept that the Committee did not mean to suggest that we should, although some may have interpreted its observations in that way.
Words mean what they say, and we must judge them on that basis. The House is being asked to approve these words in paragraph 17(c):
“In not more than six months’ time, the House should have the opportunity to consider the merits of the cost-benefit analysis and evaluation”—
as proposed in recommendation 17(b)—
“and to make a decision on whether there should or should not be a system of regional supplements instead of the existing travel and accommodation provisions.”
My hon. Friend the Member for Windsor said that what was meant was that the House should simply express a view—nothing stronger than that—but I am afraid that that is not what the report says. The right hon. Member for Oxford East (Mr Smith) spotted that point and drew it to the attention of the House, and I think that it raises a fundamental issue.
Adam Afriyie
I understand my hon. Friend’s point, but both I and other members of the Committee have made it absolutely clear that nothing in that recommendation suggests that IPSA would be bound by it. He will know that earlier in the week when we were discussing these matters, I tried to table an amendment to change the motion to make that clear, but it was firmly turned down. I can only suspect that the aim is to engineer a difference. Furthermore, primary legislation would be required to enable this place to force IPSA to do anything, and that is not what the recommendation suggests. I realise that the Minister will persist in his noble attempt to make this a bigger point than it is, and I respect that, but I think that we need to be clear about it.
Mr Harper
I know that my hon. Friend has set out clearly what he intended by the report, but his motion asks the House to approve the words in the recommendation, and those words mean what they mean—they ask the House “to make a decision”. Although he said that only primary legislation could bind the House, his Committee wrote, in paragraph 204, that if IPSA did not implement the recommendations, primary legislation should be used. The Committee has set out its view clearly. It might not have meant to say that, but it did say it.
Adam Afriyie
I will leave the Minister alone from hereon in because the point has been well made. Let us be clear: in paragraph 204 the Committee merely states, “We believe”. It is not a recommendation. He is working hard and doing a good job at creating the sense that this is legislation that is going through when it clearly is not. I commend him on his efforts, therefore, but the House should be clear on that point.
Mr Harper
I am happy to agree with my hon. Friend that we have explained the matter enough to the House. I have set out my view of what the Committee report states, and he has set out his. The House will be asked shortly to take a view on that, and I am happy for it to do so.
The creation of IPSA was an essential step in cleaning up politics by bringing to an end the discredited system of self-regulation. IPSA has handled expenses for some time now, and the House recently resolved to commence IPSA’s powers to determine our pay and pensions. Those powers had been on the statute book since the previous Parliament, and my right hon. Friend the Leader of the House commenced those powers after consulting Members from across the House. I mention that because the Leader of the House said, in moving that motion, that under the relevant legislation MPs would not vote on their pay again, and his opposite number, the hon. Member for Wallasey (Ms Eagle), confirmed that the principle of independent determination was right. During those debates, several Members on both sides of the House were very firm in their view that the House should never again vote on our pay, pensions or expenses, and I think that recommendation 17(c) is incompatible with that, which is why the Government cannot accept it.
Mr David
My hon. Friend makes a good point, which underlines the point that IPSA should always effectively be independent of Parliament, as he says. The only point I would make—and which the National Audit Office has also made—is about the general principle of collective procurement, which could be done more effectively to save taxpayers’ money. IPSA has made advances in ensuring a cost-effective scheme, but more can be done, and this is a clear example.
The second report that we are discussing today is that from the Committee on Members’ Expenses. I pay tribute to the hon. Member for Windsor (Adam Afriyie) and his Committee for their assiduous work. Their report is reasonable in tone and contains a raft of practical proposals to improve IPSA’s performance. However, I have some reservations about aspects of the report. For example, I am somewhat concerned about the recommendation that a separate body be established within the House of Commons service. That body, the report says, would be independently regulated by IPSA, and
“transparency would ensure that it did not replicate the deficiencies of the old expenses system.”
I welcome those words of reassurance, which are honestly expressed, but I am not convinced that we should run the risk of creating a perception that MPs could once again exercise influence over their expenses. For me, independence means independence, full stop.
Adam Afriyie
I do not think there is any disagreement, actually. The recommendation is merely that the legislation should enable the separation of those functions, because IPSA is unique in the entire world in its existing set-up. The Committee goes on to suggest what we think might be the best way to work more cost-effectively, but that is not the recommendation. The recommendation is merely that the legislation should enable a separation to take place, just to tidy things up a little.
Mr David
I hear what the hon. Gentleman says, but it still worries me that we are talking about at least an aspect of IPSA’s work coming in-house, to this place. Indeed, recommendation 3 says clearly:
“The best arrangement would be for that separate body to be within the House of Commons Service”.
However, if that body is in the House of Commons service, it is under the control of Members of Parliament, and I do not think that is desirable, nor is it something that would be easily understood by the general public.
That said, the report makes a number of good practical suggestions. For example, it is suggested that IPSA should extend its use of direct payments to cover as near to 100% of transactions as possible. That is to be welcomed. It is proposed that Members’ office and staff budgets should be merged, which would also be welcome. The report proposes that IPSA should make it easier for MPs to find out online how much of each budget has been spent. That would be a step forward. It is also suggested that IPSA should always ensure that MPs’ staff should have their expenses reimbursed directly and that this reimbursement should be made promptly. We would all endorse that. Those are just some of the practical and positive suggestions that are well worth active consideration and, I hope, implementation.
There are many policies and proposals in the report that I believe require careful deliberation. However, because of that, I am of the view that simply approving all the recommendations in their entirety might not be the best approach. That is why I have sympathy with the amendment, tabled by Government Back Benchers, which asks that the report be considered by IPSA as part of its annual review. I also hope that the Government will not merely wrap the report in warm words, but ensure that active consideration is given to those proposals that relate directly to the Government—in particular, recommendation 2—or the duties of IPSA.
I believe that the House has begun the process of restoring the reputation of Members of Parliament in the eyes of the public. However, to be honest, we still have a long way to go. That is why I believe that IPSA’s independence must be unequivocally maintained and that this House should not have any determining influence over any aspect of its expenses regime.
Adam Afriyie
I have enjoyed hearing the constructive contributions to the debate. One thing that has been emphasised over and over again is that nobody wants to undermine the regulation of payments to Members and that everybody would like greater transparency, greater efficiency and greater value for money for the taxpayer.
The amended motion would not be my preferred route, but it would not prevent other actions from being taken by the Government as they revisit some of these issues. On balance, I shall not object to the amendment. I hope that we can therefore move swiftly on the next business.
Amendment agreed to.
Main question, as amended, put and agreed to.
Resolved,
That this House thanks the Members’ Expenses Committee for its First Report on the Operation of the Parliamentary Standards Act 2009, HC 1484; and refers it to IPSA to be considered as part of its Annual Review.