Heath, Mulholland and Swinson on MPs' expenses

9.33.00am BST (GMT +0100) Tue 5th May 2009

• [Apr 30] . . Jo Swinson: ' . . PERHAPS, amid all the criticism, we should commend the Prime Minister for at least trying to embrace new technology-although, sadly, he has not quite got the hang of it. He said in his YouTube video that he wanted to hear the public's views on MPs' expenses, but then did the online equivalent of putting his hands over his ears by disabling the comment function. That does not make sense.'

David Heath (Somerton & Frome, Liberal Democrat): Sir Stuart Bell is absolutely right: this is a debate of great constitutional and practical importance. Unfortunately, it more resembles a Whitehall farce, given the way that the House has proceeded on the matter over the years-constantly debating it and giving more hostages to fortune, but never reaching resolutions that satisfactorily address some of the basic issues or give confidence to the public that the system meets the need.

Need is an important part of this debate. We should not walk away from the fact that Members of Parliament need expenses in order to do their jobs on behalf of their constituents. We need to make that absolutely and abundantly clear. Paying staff, renting offices and providing accommodation for Members of Parliament whose constituencies are a long way from London is part of the responsibility of the House, in order to enable Members to do their jobs properly.

But-and it is a big "but"-there are criteria that should apply to that provision of finance. It should be based on genuine need and provide what is necessary for right hon. and hon. Members to do their jobs as Members of Parliament, but not a penny more and not a penny less. That is a significant point. That provision needs a system that is transparent, so that the public can see that the money is being used effectively and properly. It also needs accountability and external audit that goes beyond what is available in the House, so that there is a guarantee that matters are being properly dealt with.

We cannot get away from the urgency of dealing with the issue. As I have said, it is a matter on which we have had endless debates. The public are sick and tired of us sitting in this Chamber and talking about our allowances, rather than the big problems that face this country. They simply do not understand why, if we purport to run the country, we cannot run our own affairs properly.

Clive Efford (Eltham, Labour): I absolutely agree with what the hon. Gentleman has just said. Does he therefore think we should not have to wait to be told to do what is right? Getting rid of the outer-London allowance for MPs is the right thing to do. Publishing details of second incomes that may influence hon. Members' activities in this House or how they vote is also the right thing to do in the interests of openness and scrutiny of this House. We do not need anyone to tell us how to do that; we should get on and do it now. Does he agree?

• David Heath: My right hon. Friend Mr. Clegg has made it clear in what he has recently published that there ought to be matters we can agree as a matter of urgency-matters that are self-evident; matters that are clear abuses of the present system that we can remove. That is why we need the twin-track approach, dealing both with the more complex issues, about which it is quite proper to ask for Sir Christopher Kelly's and his committee's advice, and with those matters which I would have hoped-although I am almost doomed to disappointment in this respect-the House could see are matters that are in our hands and which we can deal with urgently today.

That is why, although the Leader of the House has accepted the amendment standing in the name of the Chairman of the Standards and Privileges Committee, Sir George Young, I do not take the view that we should not proceed with the other motions. We have opinions on them; nevertheless, they are matters that we can quite properly discuss in the House today.

John Barrett (Edinburgh West, Liberal Democrat): Will my hon. Friend give way?

• David Heath: I will, but I will try not to take every intervention; otherwise I will still be speaking in 40 minutes.

John Barrett (Edinburgh West, Liberal Democrat): Does my hon. Friend agree that one of the worst abuses has not been covered today, and that is the use of grace and favour homes? Expenses are there to cover additional costs. There are no additional costs for those living in Downing street and they should not be claiming for constituency homes.

• David Heath: My hon. Friend knows that I tabled an amendment to that effect, because I thought it was a glaring omission in today's proposal. However, that amendment has not been selected, so we cannot debate it. The Leader of the House says that her solution-the Prime Minister's solution-is to deal with the issue through the ministerial code of conduct. That is not sufficient. There should be a rule that governs the right to those allowances. The reason I say that is that the issue should be a matter about which members of the public can make complaints and which could be investigated by the Parliamentary Commissioner for Standards and, if necessary, brought before the Standards and Privileges Committee.

Under the Government's present proposal, it would simply be a matter for the Prime Minister. Keeping everything within the bunker at No. 10 would not be satisfactory under the rules of the House, and I therefore ask the Leader of the House to think again. If she will not do so, I will certainly make such a proposal to Sir Christopher Kelly's committee in due course.

John Bercow (Buckingham, Conservative): The hon. Gentleman says that he sees merit in taking action on some of these issues now, notably the less complicated ones. I agree with him, and that is a view shared by a number of Members in all parties. Does he recall that, as recently as 1 April, my right hon. Friend the Leader of the Opposition said that agreement on action on a number of these issues was needed now, and that this matter needed to be sorted out?

• David Heath: The hon. Gentleman is absolutely right, and I am a little disappointed to sense that these matters could be left in their entirety to the committee. I regret what I take to be the current view of the Conservative Front-Bench team, because there was a sense of urgency a few weeks ago. That was clear from what my right hon. Friend the Member for Sheffield, Hallam said at the time. He put forward proposals-they might not command the support of every Member, but they have mine-to reduce the additional costs allowance to cover only basic accommodation costs such as rent, council tax and utility bills, and nothing else. There would be none of this John Lewis list or any other incidentals. That system would be clearly understood by the public, and we could act quickly to adopt it. I understand that other Members have different views, however. I also understand that the Leader of the Opposition put forward proposals of his own. They were not entirely irreconcilable with our own, and there was a suspicion that we might have reached an agreement. I shall come back to the provenance of the arrangements in a moment, because the subject is instructive about how the Government do business.

What are the concerns that the public have been expressing very loudly in recent weeks? If any Member has not heard them, they cannot have talked to many of their constituents recently, because these are real concerns. People are talking about inappropriate purchases being made at the taxpayer's expense. Whether such purchases are typical, common or fair is neither here nor there-that is what people are concerned about. They are also concerned about the abuse of definition in relation to our identifying our principal place of residence, and about the fact that, for some hon. Members, it seems appropriate to change that definition every now and then, according to the potential income involved. That gives rise to a great deal of concern. Concern is also being expressed about unnecessary accommodation, and the possibility that people are claiming for accommodation that they do not need because they have alternative arrangements of one kind or another.

The public cannot understand why we cannot deal with these issues. Frankly, I cannot understand why we cannot deal with them even under the present system, because it is clearly stated on the forms we sign every time we submit a claim that the costs have been occasioned by parliamentary duties, although that definition seems to be remarkable wide in some cases. Nevertheless, that is the question that the public are asking.

Dari Taylor (PPS (Phil Hope, Minister of State), Department of Health; Stockton South, Labour): I agree with everything that the hon. Gentleman has said. Every single one of us wants our expenditure to be seen to be accountable, clear and absolutely necessary. I have had incredible letters from some of my constituents about the way I am apparently spending public money. I have written back, faithfully and factually, yet those same people still write letters of abuse. Even if we state our case accurately here today, we are still not going to get away with it. There will still be a sense that we are overpaid and underworked; that is common to many people's responses.

• David Heath: The hon. Lady is absolutely right. It is perhaps a counsel of perfection to say that we will ever get away from that entirely. Every time we see a clear abuse of the system in the pages of a newspaper, it affects not only the person who has been named but every single Member of the House. Every Member of the House is considered to be a crook. That is unacceptable, and it is something that we have to deal with as a matter of urgency.

Given the public concern, it was nothing short of an act of genius for the Prime Minister to come up with a solution that absolutely failed to meet those concerns. The process has been quite extraordinary. As I said, my right hon. Friend the Member for Sheffield, Hallam put forward his proposals and, whether people agreed with them or not, they were real proposals that addressed the issues and would have made a real difference to the way the House is perceived. The Leader of the Opposition also put forward proper proposals. They were not identical to ours, but they addressed the same issues and tried to find a way forward. At that time, we had nothing at all from the Prime Minister.

The last time we debated this matter, the Prime Minister did nothing whatever to get the proposals from the House of Commons Commission through; he did not even bother to turn up. He showed no sense of leadership. This time, he waited until the very last moment, then reluctantly agreed, when pushed several times by my right hon. Friend and by the Leader of the Opposition, that it would be a good idea to have a meeting of the three leaders to see whether there was a possibility of consensus. Yet before that meeting, which he did nothing to arrange, had even happened, he came up with a set of proposals that had apparently been written on the back of a fag packet. He did not appear to have discussed them with members of his own parliamentary party. He put them out to the press before he even had the agreement of the Cabinet, which emerged to find them already in the public domain.

As an afterthought, the Prime Minister rang round the leaders of the other parties to try to arrange a meeting that very evening, because he thought it would be a good idea to get their imprimatur for his proposals. At that meeting, he was completely belligerent and refused to accept any amendment to his perfect proposals. And he wonders why there is no consensus! Then, last week, he made his announcement to the public in a YouTube appearance that had all the awfulness of a David Brent performance. It was quite astonishing-and this was the Prime Minister addressing an issue that affects the House in an extremely important way.

The Prime Minister proposed an attendance allowance, but would it address the question of transparency? No. It would provide cash in hand with no accountability. Would it be related to real costs? No, because it would be given to every single Member of Parliament, irrespective of their needs or arrangements. Would it even be workable? No, it could not have worked within the present arrangements. The Prime Minister failed to understand that, in proposing a system that already exists for the European Parliament-doesn't it work wonderfully there!-he was proposing that the gravy train of Europe should come to Westminster. Incidentally, that also happens at the other end of the corridor. We hear apocryphal stories of noble Members leaving the Rolls-Royce running outside while they nip in to sign in, before going home having claimed their allowance for the day. Is that the system we want? No. That is why it had to be rejected. Eventually the message even got through to the bunker, and it was not put on the Order Paper today. There is, however, a vestigial reference to it in motion 1-I will return to that in a moment-because the Prime Minister can never be completely gainsaid. He must have his way, so if he cannot have it through a vote in the House, he must find another alternative.

Let me go through the matters for consideration. The grace and favour issues are not there, and I have explained why that is wholly unacceptable and should be remedied. I hope that the House can agree to some motions-our motion 6, which is a technical motion, and motion 5 on evidence of expenditure, which adds to transparency and accountability.

Motion 3 deals with the registration of interests. I know that that matter is a bit difficult, but it is a basic principle. I have thought about the questions that it has been suggested would arise. Whether people are being paid far too much for too little in their outside employment or are spending too long at their outside employment are legitimate questions to ask Members of the House. If they are not full-time Members of the House, what are they doing with their time? How does their loyalty to their constituents square with their loyalty to their shareholders or employers?

Douglas Hogg (Sleaford & North Hykeham, Conservative): I take that point, and as the House knows, I practise as a barrister and am sometimes in court. I always declare that fact, my constituents know it, and it is in the register. What possible objection is there to that?

• David Heath: There is no objection, but it is a matter of transparency-[Hon. Members: "Yes, there is."] There is no objection within the rules of the House as presently constituted. However, our constituents are entitled to know how we apportion our time and the extent to which we are prepared to provide our time for their benefit rather than for our own. That is the question.

Barry Sheerman (Huddersfield, Labour): I have been listening carefully to the hon. Gentleman's speech, and when he started I thought that I would be on his side. However, he is making me angry, because he has said not one good thing about the work-the hard work-of parliamentarians on both sides of the House, in Committee and in constituencies. I share the criticisms, but, for goodness' sake, cannot someone on the Opposition Benches get the balance right rather than picking up every negative comment, and say something good about the House-about the all-party aspects, the hard-working, good legislators, and the work in Select Committees? Come on, please say something good about our colleagues.

• David Heath: Clearly the hon. Gentleman was not listening to what I said. If he is not prepared to listen, I find it difficult to answer him.

Motion 2 deals with Greater London; surely we can go ahead with this necessary reform. I do not claim exclusive credit for my party colleagues, but I am pleased that not a single Liberal Democrat Member who serves a Greater London constituency claims the allowance. Those Liberal Democrat Members can commute perfectly happily within London, and it is not unreasonable to expect other Members to do so. I notice that the starting date in the motion has been changed by the Leader of the House, to give a little more leeway. We do not need to wait for a transparently appropriate measure to be introduced. The measure is already in place for central London, and it is an anomaly that it did not extend to the greater metropolis.

Ian Taylor (Esher & Walton, Conservative): The Kelly committee may come to the conclusion that the hon. Gentleman has just outlined, but the matter is being imposed in isolation. Those Members, including me, as I fully declare, who have never been in London, and whose constituencies are in Surrey-the old border of my constituency went down to Guildford-have suddenly been lumped in, without any consultation about the impact on us. I have served for 22 years, and I speak on behalf of all the other Members on a cross-party basis. The matter should not be imposed without full consideration.

• David Heath: The number of parameters to consider is not enormous, and I notice that the Leader of the Opposition accepted the proposition at an early stage. Mr. Taylor will disagree and vote against it, but the proposition is properly put forward.

Motion 4 is very significant, and many Members have made interventions on the matter. There are arguments for putting members of staff directly on the payroll of the House of Commons, but there are many imponderables, and many serious questions need to be asked about the process. Sadly-I will upset the Chairman of the Children, Schools and Families Committee again-some Members do not behave as we would wish in their employment of their staff. There are some mill owner MPs who exploit their staff, who might be extremely grateful for the protection of the House. Equally, however, there are issues about transfer of staff, about what happens at the dissolution of a Parliament, and about pensions. Hugh Bayley is keen on a move to the House of Commons pension scheme, and I understand that entirely, but a huge cost is involved in that, and the House must be aware of that cost-I think that it would double the House of Commons pension bill. Given that we are talking about savings in this context, we really ought to be aware of that before we agree to his approach, and issues relating to the political restrictions that might apply would need to be addressed before we could make progress.

Hugh Bayley (York, City of, Labour): Does the hon. Gentleman really believe that it is fair, just and sustainable that the staff of the House, who provide a very good service to us, are in a public sector final salary pension scheme with a notional contribution by the employer of about 25 per cent. of earnings, whereas our staff are entitled to join only a stakeholder scheme, which provides considerably poorer benefits and whereby they get only 10 per cent. of their salary paid in by the employer?

• David Heath: Serious questions need to be asked about that and about the whole of the public sector's pension schemes. The hon. Gentleman knows that Liberal Democrats have very serious concerns about the sustainability of public sector pensions as a whole, including those of Members and servants of this House. All I am saying is that one cannot sign a blank cheque for a very large sum without understanding the consequences. May I say to Labour Members who are very concerned about this matter that that is why I have tabled two amendments to motion 4-amendments (a) and (b)-at which I invite them to look carefully?

The consequence of those two amendments would not be to remove the progress being made on this by the House of Commons Commission, which the hon. Member for Middlesbrough mentioned; it would be to ask the Commission to examine the benefits and disbenefits before it moves to implementation, so that this House does not agree to something and instruct the Commission to go ahead with it. Instead, the Commission would examine all the consequences of it, report back to the House and, on that basis, make recommendations. In the first instance, I ask the Leader of the House to accept this sensible pair of amendments, but if she does not do so, I ask hon. Members to support them, because they are a sensible precaution to take, in order to avoid yet another car crash on this matter.

That leaves me with motion 1 to discuss. We have heard what the right hon. and learned Lady has to say, and I hope that that will not remove any of the urgency that all of us identify as necessary on this. The one great benefit of accepting the amendment tabled by the right hon. Member for North-West Hampshire is that it would remove this vestigial inclusion of the requirement to take account of hon. Members' attendance at Westminster. I was going to have to ask a lot of questions about that, because if it simply meant that if a Member never attended Westminster they would not get accommodation, that would be exactly fair. If it was a per diem attendance allowance by the back door, which I suspect it was intended to be, I would be wholly against it, for all the reasons that I have indicated. It is not good enough for the Leader of the House to say that it makes no difference now, because it is already in the paper produced by the Committee on Standards in Public Life; it is there as one issue to be looked at among many. In the form in which it was presented to us in motion 1 the provision was an instruction to the Committee, which is why it was unacceptable. If we accept the amendment, that becomes redundant and we look forward to the proposals.

I hope that we can make some progress today, because we need to do so. However, I fear that the process to date has been so farcical and absurd that it will instil little more confidence in the eyes of the public until we have the report of Sir Christopher Kelly's committee, until it does the job that we have asked it to do and until we agree the recommendations, so that we actually have a proper externally audited arrangement that bears scrutiny. At the moment, we do not have such an arrangement.

• . . Greg Mulholland (Leeds North West, Liberal Democrat): Thank you, Mr. Deputy Speaker. May I begin by saying that I love this job, and that I am very proud to be a Member of Parliament? I can say that I genuinely try to do the job to the best of my ability, and I believe that the same is true for the vast majority of Members of this House.

Just a couple of weeks ago, however, I had one of those rare moments when I questioned whether I really wanted to carry on doing the job. That moment came on the day that the so-called MPs' expenses league tables came out, when the story was all about our £93 million gravy train and how we all had our snouts in the trough. That hurt me, as I am sure that it hurt the vast majority of hon. Members to whom such remarks are grossly unfair.

As we all know, we have very little right of reply to such stories, but the problem was actually far harder for my wife. She told me that she was too embarrassed to go out that day because of what the neighbours would say. People presumably think that we keep the Jag around the back, and that we somehow hide the vast amounts of money that come rolling in. That is exactly the perception fostered by the media: one newspaper said that, by making an average claim for allowances of £144,000, we were effectively trebling our salaries. That is absolutely absurd, but how can we sort the problem out? I have to admit that I am feeling embarrassed again about the nature of the debate that we are having today, and about the farcical situation that we find ourselves in. I shall make that situation clear, as no one has done so up to now.

We face a very difficult choice. We are about to vote on a hotch-potch of recommendations that are not at all coherent, although some have more merit than others. Alternatively, we can refer the whole matter to the Committee on Standards in Public Life, and get accused by the media and the public of kicking it into the long grass. What a choice that is. Why are we in this position? We are in it because the Prime Minister came up with a half-baked and entirely inappropriate set of proposals that sidelined the House of Commons. I think that all hon. Members would agree-even the majority of those on the Government Benches-with the view among people outside the House that this is another fine mess that the Prime Minister has gotten us into. I fail to see how we can get ourselves out of that mess today.

At least the nonsense of the proposed daily allowance has been rejected. That would have given us a clock-in culture, causing people to turn up to Parliament whether they were needed here or not. It would have penalised constituency-focused MPs but, most of all, it would not have been transparent. It would have allowed hon. Members who did not need the money to pocket it and to benefit from it.

We do have principles to follow-the seven principles of public life. The first states:

"Holders of public office should act solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family or their friends."

We sign claim forms to a similar end, saying:

"I claim reimbursement of these costs which I incurred wholly, exclusively and necessarily in the performance of my parliamentary duties"

Sadly, we have now thrown that out and have the nonsense about saying that the amounts claimed comply with the Green Book.

On one area I disagree with John Mann. Yes, some of the things that he mentioned are uses of the system, but there have been abuses of the system. If the Prime Minister wanted to show true leadership, he would not have come forward with this half-baked set of proposals sidelining the House of Commons. He would have had the courage to sack those Ministers who have clearly been abusing the system. I am talking about misappropriation of public funds for personal gain. That is precisely what has happened in a number of examples, and it is unacceptable. The sad truth is that there have been abuses, and they have led simply to a slap on the wrist. Is it any wonder that the public have no confidence in us to make this sort of decision?

I shall be voting for some of the measures today because I feel that I cannot in conscience not do so, even though this is a farce. I shall be roundly rejecting the ludicrous suggestion that we can no longer employ our staff-our wonderful staff who serve our constituents with no praise for themselves. I am afraid that we are in a situation that we cannot get ourselves out of today, and the Prime Minister must accept the blame for that.

• . . Jo Swinson (East Dunbartonshire, Liberal Democrat): Some Members will know that I am a bit of a fan of new technology. I like using podcasts, Twitter and Facebook to engage with my constituents. In particular, I have campaigned in the House-for example, through early-day motion 1319-to allow clips of Parliament to be shown on YouTube. Perhaps, amid all the criticism, we should commend the Prime Minister for at least trying to embrace new technology-although, sadly, he has not quite got the hang of it. He said in his YouTube video that he wanted to hear the public's views on MPs' expenses, but then did the online equivalent of putting his hands over his ears by disabling the comment function. That does not make sense.

Diane Abbott (Hackney North & Stoke Newington, Labour): I share the hon. Lady's enthusiasm for new technology, but my fundamental objection to the Prime Minister's appearance on YouTube is that, instead, he or the Leader of the House should have come to this House and made a statement that could have been questioned.

• Jo Swinson: The hon. Lady has made her point.

It is certainly true that there were many concerns about the procedural way in which this matter came to our attention. The concept of the Government trying to reach out more through electronic technology is, in itself, a good one, but it has to be done properly. The Prime Minister does not really "do" listening. Instead, in a frantic rush to be seen to be doing something-anything-about this issue, he did not stop to think whether he was doing the wrong thing. We ended up with that ridiculous proposal, apparently intended to try to promote better transparency, to give us the cash, no questions asked, for turning up at the House of Commons. I am very glad that that did not make it on to today's Order Paper. However, there is no denying that the Government's confusion, U-turns and general lack of consultation have been deeply unhelpful to the whole debate.

I have a certain sympathy with the Leader of the House. She has been sent here to attempt to clear up this whole disastrous episode, which is not an easy job. I have a lot of sympathy also with those who have said that it does not make any sense for us to vote on the later motions if the Government accept the amendment to the first. It is slightly farcical for us to say, "Leave it all to Kelly" but then have those votes.

It would have been better if a small number of urgent changes had been consulted on properly, introduced and enacted with the minimum of fuss. Instead we have had a mix of some good changes, many half-baked ideas and some changes that would just have made the whole system murkier. That said, we all know the depth of public anger on this issue. Given the motions before us, if the Government intend to press them, and given that the Kelly report might not be completed until the end of the year and therefore the changes might not come in until well into 2010, we must consider whether it is justifiable to vote today against measures that would clamp down on some of the abuses of the system. I think not.

Motion 5, in particular, is long overdue. Rather than saying that something under £25 does not need a receipt, ensuring that receipts should be provided for every expense that we incur in our parliamentary duties seems to be common sense. I have called for that before in the House, and I will certainly support it today. Most of our constituents cannot understand why there is a different rule in the House of Commons from that in the real world. In most jobs, expense claims are accompanied by receipts as a matter of course.

We can clearly deal with some problems today, but many more complex reforms are needed. As many hon. Members have said, the House of Commons has sadly shown itself not to be very well tasked with making those reforms or up to the job, whether in the vote last July that kicked out the reforms proposed by the Members Estimate Committee, the Government's attempts to keep everything secret back in January or even the mess that has been created over the past 10 days. That is why the independent review by Sir Christopher Kelly is so important.

I am sure that all Members have had constituents raise with them many other issues of concern, particularly on second homes. People do not understand the designation of second homes, and why it seems to be possible for that to be decided on for the convenience of the MP involved. That clearly has to change. The John Lewis list caused huge public outcry and anger, and there is the problem of MPs making capital gains from properties partly funded by the taxpayer. I know that some in the House make the argument, which I understand, that it is often cheaper for the taxpayer to pay the mortgage interest on a bought property. I am sure that the flat that I rent may cost more, particularly with interest rates as they are, than the flats that some hon. Members have bought and claimed mortgage interest on. But surely it would not be impossible to design a system whereby the House of Commons had a portfolio of accommodation, so that the House would benefit from the capital gains and, over time, the cost to the taxpayer would actually reduce.

We will all make our own representations to the Kelly review, but it is absolutely clear that the best way to proceed is to have an impartial arbiter to make a comprehensive set of proposals that we can use to start rebuilding public trust. Transparency has to be a fundamental principle of any system of MPs' expenses, because then whatever the system is, if there are problems with it, they will very soon come to attention and be nipped in the bud. That is why I will vote today to increase transparency in the expenses system.

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