Parliamentary Standards Act 2009

Andrew Smith Excerpts

Thursday 15th December 2011 Commons Chamber

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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 Andrew Smith]

To clarify what the hon. Gentleman’s amendment means, is not the crucial difference that the original motion would have the House approving the recommendations in the report, whereas agreeing to the amendment would mean that the House was not approving them but simply passing them to IPSA for consideration? I might be able to live with the amendment, but I would not have been able to vote for the motion; indeed, I would have voted against it.

[Guto Bebb]

I am grateful for the intervention and delighted that the amendment will make it easier for Members to ensure that IPSA examines the issues in the report. I joined the Committee with a great deal of reservation, because as a newly elected Member the last thing I wanted was to be vilified as being part of an attempt to make MPs’ lives easier.

--- Later in debate ---

[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.”

[Mr Andrew Smith]

I strongly support the line of argument that the Minister is advancing. Quite apart from the unacceptable proposals within the recommendations—the hon. Member for Windsor (Adam Afriyie) tries to belittle them, but they are there, they mean what they say, and the House is being invited to approve them—is it not crucial that this House does not give the impression that it is seeking to use its legislative power to lean on IPSA? That would be wrong, and we must make that clear.

[Mr Harper]

I welcome the right hon. Gentleman’s point, which is an important one.

The House set up a proper way in which to express its views when it legislated to create IPSA—statutory consultees include Members. IPSA also has an annual review, as the amendment makes clear. The proper thing to do is to state our views through that. IPSA has published a document in which it acknowledges quite a number of the concerns that Members have raised today and in the report, including, for example, those on staffing. IPSA has made dealing with staffing one of its focuses. It seems to me that Members need to respond to IPSA. The consultation stage is open until 20 January. I urge every Member of the House who has a concern about how the system works to take full advantage of that opportunity and to feed their views back to IPSA.

--- Later in debate ---

[Mr Harper]

I hear what the right hon. Gentleman says, but I have made it clear that IPSA has a legal duty to carry out its work and to ensure that we are “efficiently, cost-effectively and transparently” supported in the carrying out of our functions. However, IPSA must balance that duty with a range of other duties, one of which is restoring and maintaining public confidence. It will not be possible for it to have a sole objective.

[Mr Andrew Smith]

In common-sense terms, does it not come down to the question of whether IPSA is seen as working for us—which should not be the case—or as working for the British public? Yes, it has a responsibility to ensure that we do our job in an accountable and transparent way and so forth, but ultimately, if public confidence is to be restored, it must be seen to be working for the public and not for Members of Parliament.

[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.