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Parliamentary Standards Bill

Volume 495: debated on Tuesday 30 June 2009

[Relevant Documents: Memorandum from the Audit Committees on the Parliamentary Standards Bill, and written evidence received by the Justice Committee on Constitutional Reform and Renewal, HC 791-i.]

[1st Allocated Day]

Considered in Committee

[Sylvia Heal in the Chair]

The Committee will be aware of the considerable pressures of time today and tomorrow. Yesterday, some 40 additional amendments and new clauses were tabled. In view of the speed with which the House is being asked to proceed with this Bill, the Chairman of Ways and Means was prepared to select the majority of them, even though they are starred on today’s amendment paper. One result is that there are four additional groups, raising significant and distinct points, to be dealt with today.

Hon. Members will see that a measure of restraint will be very much in their interests and will allow us to deal with as many issues as possible. For example, I would hope that there might be little or even no debate on clause 1 stand part, as all its provisions arise in subsequent groups of amendments. I hope, too, that the Committee will resist the temptation to rerun the Second Reading debate that we had yesterday, and instead will focus closely on the substance of each group of amendments.

Finally, might I point out two printing errors on the first page of the amendment paper? In amendment 50, the word “third” should be omitted, and amendment 52 should refer to line 23 on page 11, not line 3.

Clause 1

Independent Parliamentary Standards Authority etc

Question proposed, That the clause stand part of the Bill.

Clause 1 sets out the basic structure and architecture of the new regime: the new bodies—the Independent Parliamentary Standards Authority and the Commissioner for Parliamentary Investigations, which are detailed in schedules 1 and 2—and a special Committee of this House to oversee the work of IPSA. I went into further detail yesterday in my Second Reading speech, as did others. Of course, I stand ready to respond to any questions that are raised about the clause.

In the interest of the brevity that you have called for, Mrs. Heal, the need for which we quite appreciate, I merely point out that the very name of the Bill and the new authority are not a perfect description of what they will do. It would have been much better if they had been called something like the parliamentary payments authority and the parliamentary payments Bill. We have a proliferation of the use of the words “standard” and “standards”, but this is really about money—money paid to a Member of Parliament by an allowances system and by any outside interests. The name is not perfect, and I hope that it will not be misused in our public prints in future.

I shall obey your injunctions, Mrs. Heal, and not make a long speech, or even a proper speech at all. What you said to the Committee a few minutes ago underlined the serious nature of the Government taking a Bill of constitutional significance through the House at the gallop and without time properly to consider and reflect.

The point that my hon. Friend the Member for Rutland and Melton (Alan Duncan) made was extremely good, and it is a pity that we do not have the opportunity to discuss a different name. I very much hope that the Government will reflect on what was said yesterday during a debate that pointed out the widespread concerns in all parts of the House about what they are doing and the speed with which they are doing it. I hope that this afternoon and tomorrow, in this indecent haste, the Government will respond with a degree of sensitivity to the points that colleagues and I will make to try to make a very, very bad Bill just a little bit better.

I strongly object to the time limit on the Bill. Some of us withdrew from the debate yesterday, conscious that many hon. Members were trying to catch the Chair’s attention in a very full day’s debate. We would have liked more opportunity so that we, too, could have spoken about the big underlying principles. Of course, I accept your injunction, Mrs. Heal, because I want as much of the detail as possible to be examined in the Committee stage, which is too short.

However, I cannot let clause 1 go without asking the Minister on duty why the complex and expensive bureaucracy will be better than the current bureaucracy. Why is it thought superior to beefing up, amending or improving the current system? We should have some idea of what salaries will be paid, and some budgets for the complicated authority. We should know how it will be superior to the system of recent years in carrying out payment and audit functions.

The Government have not made the case for the new authority. There was little detail in the remarks yesterday about the sort of people it would comprise, the cost, and how the job would be done differently from the way in which our staff currently undertake it. More reassurance is needed for current staff so that they know what the terms and conditions of transfer are likely to be, who will be transferred and so on. As an employer, we owe some sort of duty to our staff, who must feel rather concerned about the peremptory discussions. Has the Secretary of State properly consulted the staff concerned? What has he told them about what their future holds? Is there any sort of guarantee that they will be transferred and get jobs, or is the idea to put all the jobs out to tender and have new people? Are different sorts of people from the current staff being sought, or is it intended to transfer as many as possible, but make them go through some kind of competitive process? We have a right to know those things. I accept your instruction, Mrs. Heal, but we really need two or three hours to debate those issues.

I, too, would like to place on record my concerns about the management of the Bill. It is proper to reflect on the fact that many hon. Members would be present for today’s debate but for being members of the Select Committee on Justice, which will meet in 13 minutes to take evidence from the Clerk of the House on the aspects of the Bill that cover privilege. That highlights the inadequate way in which the measure is being tackled.

The Liberal Democrats do not take issue with the principle of contracting out the functions of the Fees Office. It is a necessary part of restoring public confidence in the House and its operation. However, as the right hon. Member for Wokingham (Mr. Redwood) said, several issues of substantial and practical concern arise from that. There is little about it on the face of the Bill and, if the debate is truncated, it would appear that we are simply to take matters on trust. I am disinclined to take a great deal from the Government on trust, in view of my experience as a Member since 2001.

As I said yesterday, we have yet another fisher in a fairly small pond, and what we do is all without prejudice to the possible conclusions of the Kelly commission, which we will doubtless learn this autumn. I hope that, once we know those conclusions, it will be possible to review the number of actors because piecemeal development, which responds to each individual crisis as it arises, leaves us with a far from satisfactory landscape.

I support the points that my hon. Friend the Member for Rutland and Melton (Alan Duncan) made. As a member of the Committee on Standards on Public Life, I get correspondence about matters with which the Committee on Standards and Privileges is dealing because of the public’s confusion about those two bodies. To add another body with the word “standards” in the title is just asking for trouble. I just suggest that the Secretary of State think that over and perhaps come up with a name that refers to payments or something different. The whole purpose of the exercise is supposed to be to try to make the thing more transparent and understandable, but it is actually making it more confusing.

I would like to draw the House’s attention to clause 1(2), which states that schedule 1 provides for the new body’s

“administration functions to be carried out by its chief executive in accordance with paragraph 17 of that Schedule”.

The Secretary of State will know where I am going with this—at least I think he will—because paragraph 17 of schedule 1 refers not just to administrative functions, but to regulation functions. I invite hon. Members to glance at page 13 of the Bill in order to follow what I am about to say.

Paragraph 17 distinguishes those two functions from one another, so that, “So far as possible”—whatever that means—

“the…administration functions and…regulation functions must be carried out separately”.

That must happen

“so that one set of functions”—

by the way, the word “functions” means powers and duties—

“does not adversely affect the carrying out of the other.”

Paragraph 18 of schedule 2 gives the meanings of “administration functions” and “regulation functions”, but I have to say—I say this as gently as possible—that it is utterly disingenuous. I know the Justice Secretary well enough to be surprised that he has allowed the drafting of the Bill not to refer to the regulatory functions in clause 1(2), but they are hugely important, for the reasons that I am about to give.

Paragraph 18 of schedule 1 says that the new body’s administration functions are

“its functions under…section 2 (payment of MPs’ salaries)…section 3(1) (payment of MPs’ allowances)”

and

“section 4 (dealing with allowances claims)”.

That raises a raft of issues, which I do not need to go into now. The paragraph continues:

“and the function of maintaining and publishing the register under section 5.”

Paragraph 18(2) says that the regulation functions of the body are

“its functions under…section 3(3)…(preparing and revising MPs’ allowances scheme)…section 5 (preparing and revising MPs’ financial interests rules),”

and, in paragraph 18(2)(c), “determining procedures for investigations”.

I suspect that my hon. Friend the Member for Ashford (Damian Green)—or, indeed, any other hon. Member—might be interested in that provision, in relation to the question of the entry by the police into this House, on which I have spoken on many occasions. I have also got into some severe altercations about that with the Attorney-General, who alleges that it is for the courts to decide such matters, not the House of Commons. You will forgive me, Mrs. Heal, if I make it abundantly clear that I still totally and utterly repudiate the reasoning in her memorandum. I believe that that was the first occasion on which a memorandum from the Attorney-General was placed in the Library, at my insistence—and, to give her credit, the Leader of the House agreed to ensure that it was put there.

The issues are profound, because they relate to article IX of the Bill of Rights, in respect of which I have tabled a new clause, which I am glad to see that you have selected for debate tomorrow, Mrs. Heal. I therefore do not need to go into that in detail now, but I do need to go into the supremacy of Parliament, which relates to new clause 7. New clauses 7 and 8 deal with the supremacy of Parliament and article IX of the Bill of Rights, which relates to the internal regulation of the proceedings of this House by this House. That is where the Bill gets into deep trouble. I shall not go into that now, although not because it is out of order—it is not—but because I prefer to reserve my arguments for the new clauses tomorrow, on which I shall have a certain amount to say.

Indeed, although my hon. Friend might well be warned as well, because whereas those matters can be taken with jocularity in certain circumstances, they can lead to arrest of the kind that my hon. Friend the Member for Ashford was under, and many other matters, which I will deal with when we come to those new clauses tomorrow.

It was not the seriousness of the issue that I was reflecting on, but rather the anticipated length of my hon. Friend’s speech.

Indeed. I am glad to be able to say that, in Committee, it is appropriate for us to go into these matters. If my hon. Friend believes that we can deal with the whole history of the House and its power to determine its own internal proceedings simply by referring to a few jottings on the back of an envelope, I am afraid that he has a lesson or two to learn.

To return to my hon. Friend’s point about clause 1, he drew our attention to the fact that IPSA will be both a regulatory body and an administrative body. Does he foresee any difficulty with that, given that its regulatory functions will primarily involve its regulating its own administrative functions? Is not that a rather unusual arrangement?

Perhaps the provision is set out in this way so that, as far as possible, the functions can be treated separately. This is typical of any hybrid arrangement, however; one is never quite sure which is the tail and which is the head. I am afraid that that is exactly where we are on this matter.

Clause 8 contains a whole stack of provisions relating to directions and recommendations. One of the most unsatisfactory aspects of the Bill—in addition to the length of time that we have in which to discuss it—is the impact that it will have on our ability to run our own affairs and the extent to which that will be taken away from us. I said this to the Prime Minister when he came to talk about so-called constitutional renewal and reform. He raised the manner in which we were going to deal with matters of this kind. I pointed out to him that he had just returned from the beaches in Normandy, where people had fought and died—as my own father did—so that we could maintain our democracy in this House. I said that they had not fought and died in Normandy to achieve what the Government now seem to want and what the Attorney-General stated in her memorandum that she wanted—namely, that the proceedings and privileges of this House, which are derived from the people exercising their freedom of choice and voting for us by putting a simple cross on a ballot, should be taken away and given to the judicial supremacy of the courts either in this country or in Strasbourg or Luxembourg. That matter remains on the agenda, and I shall return to it tomorrow when we discuss the new clauses.

We need an overarching way of saving the rights of this House, on behalf of the electorate who vote for us. It is their Parliament, not ours. I do not believe that it is the Government’s Parliament either, and they have not the slightest right to take away from the people of this country the right to govern themselves.

The hon. Member for Rutland and Melton (Alan Duncan) and a number of other right hon. and hon. Members asked about the name of the new authority. It will be called the Independent Parliamentary Standards Authority, but it is a rose by any other name, and it is certainly a very fine rose. As I said yesterday, the other place might well wish to latch on to these arrangements, and it seemed to us that the body ought to have a fairly generic title.

I pointed out yesterday that most of the contents of the code of conduct and guidance are concerned with financial interests, as are the central parts of the Bill. We spent a lot of time arguing about the name for the new body, but the proposed title certainly seemed to be acceptable to our party leaders. The word “independent” was added as a result of our cross-party talks, to emphasise that it will be independent of Parliament. We all know why we are here, and why we are having to go through this process. It is rather less a result of some serious abuses of the allowance system by one or two individuals, and more to do with a failure of the system, which we allowed to develop and for which we are all responsible.

I will, of course, reflect on what the hon. Member for South Staffordshire (Sir Patrick Cormack) said. I have already made it clear from outside the House that we are ready to accept a number of amendments. Where I am in doubt, I will listen to the arguments, but I can tell the House now that we will certainly accept a number of amendments tabled in the names of the right hon. Member for North-West Hampshire (Sir George Young) and my hon. Friend the Member for Middlesbrough (Sir Stuart Bell)—and some others.

Was there any discussion this morning about moving a Government motion to amend the programme motion to enable us to spend as much time as we want this evening by removing the 10 o’clock limit? There was a statement and an enormous number of amendments were added only yesterday, so did the Government consider that option?

There were discussions, but in the event, it was judged appropriate to keep within the time scale. From my perspective, we are seeking to proceed by consensus and to make as much progress as we can. I also remind the Committee about the judgments made less than three weeks ago across the parties—

It may have been the Front Benchers, as the hon. Member for Aldridge-Brownhills (Mr. Shepherd) says, but that is the way we work within the parties and it is how the system operates. There was a general agreement—I am not saying it was universal—that we needed to make swift progress, so I hope that that answers the right hon. Member for Wokingham (Mr. Redwood), who criticises us on account of the speed of the process. I wish that many things had not happened; I wish that the scheme commended by my right hon. and learned Friend the Leader of the House almost this time last year had been voted on and approved by the House. Many Members in their places today did vote for it, as did I; others did not, and I think that their repentance has been very painful and that the whole House and its reputation has suffered from it. Expenses are not dominating the news today, but they were for six weeks, and they undermined the reputation of this House, so it is crucial—in my judgment and, I think, that of the House as a whole—that we act swiftly.

The budgets have yet to be drawn up, but they will be. Our judgment is that the total cost of this scheme and what will be administered—namely, the content of the allowance scheme—will not be more than current costs. Indeed, it may well be less in some respects, as any new system is likely to be simpler than the one it replaces.

I do not demur from what the right hon. Gentleman says about a general consensus emerging a few weeks ago among party leaders and others about having an arm’s-length body to deal with financial aspects, allowances and so forth. All that is to the good. What was not agreed—and is not agreed—is the idea of bringing in a statutory code of conduct and, worse still, impinging on our rights and, even more importantly, the rights of our constituents as within the Bill of Rights. At that stage, nobody foresaw the attack on the basic freedoms of our constituents and on our basic freedoms, including, crucially, our freedom of speech.

Not me.

The issue particularly exercising the Clerk and Members was clause 6, which I have dealt with. [Interruption.] Well, we can deal with that when we come to clause 10. As I recall, it is the nationalist parties that were keen to ensure that offences were written directly into the Bill, so there is the consequent issue about how to adduce evidence.

The Lord Chancellor knows very well that I endorse all that the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) said a moment ago, and we rehearsed much of this yesterday. What will happen if Sir Christopher Kelly, who is being constrained, trammelled and confined—

That, too. What happens if Sir Christopher and his committee decide that they do not want to take this approach? Given that the Government have said that they will accept the committee’s report, what will happen?

As I explained yesterday, the Kelly committee is dealing with the content of the allowance system—[Hon. Members: “No.”] With great respect, that is the central part of what it is doing. It is looking at the whole system of allowances and what its content should be. This Bill is about how any system of allowances should be administered and about setting up a register of financial interests outside the House that should take over certain functions of the Fees Office and the registrar and some aspects of the investigations that are currently undertaken by the commissioner here. The outside body would also make judgments in cases of abuse. All of those follow, as night follows day, from the acceptance on both sides of the House that we should have an Independent Parliamentary Standards Authority.

I must correct the Justice Secretary. He just said that the Kelly inquiry is only conducting a review of the narrow issue of the content of the allowances, but on 23 March the Prime Minister wrote to Sir Christopher referring to

“the opportunity to consider the full picture.”

There is no constraint there. The Prime Minister explicitly asked the committee to consider everything. Therefore, it is entirely wrong that through this Bill we are pre-empting and constraining a committee that was set up to consider what the Prime Minister calls “the full picture”.

I do not accept that. We are not pre-empting what Sir Christopher Kelly is doing. The fact of the Kelly inquiry was well known to all three party leaders. For these purposes, I am not putting words into the mouths of the leaders of the nationalist parties, but the three main party leaders are on the record as welcoming the establishment of an Independent Parliamentary Standards Authority, notwithstanding and in the full knowledge that the Kelly inquiry was under way. That is the truth—

Why, then, when I and several colleagues went to see Sir Christopher Kelly, did he specifically ask us what our thoughts were about external regulation? Why did he welcome me writing him a supplementary letter about external regulation that addressed all these issues? Was he acting outside his remit?

The hon. Gentleman will have to ask Sir Christopher Kelly why he asked those questions. It would be impertinent of me to suggest a reason, and such matters are for a chairman of an inquiry to determine. I provide this reassurance, not least to the right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for South Staffordshire, that if there were to be—although I do not anticipate this for a moment—aspects of Sir Christopher Kelly’s proposals that the House wished to accept, but they were wholly inconsistent or incompatible with the legislation, we would have to amend the legislation—[Hon. Members: “Ah!”] I am trying to be helpful by saying that that is what we would have to do. There will almost certainly be a vehicle to enable that to happen.

The hon. Member for Stone (Mr. Cash) cannot have it both ways. He has complained that this Bill is being treated as urgent, but it is urgent. With urgent legislation it is usual to say—as I did this time last year about anonymised evidence—that the House will have a chance to consider it again at a time of less urgency. The impending general election will take place by next June, so I do not make that explicit promise, but I do make the explicit promise that if there are aspects of the recommendations from Sir Christopher that the House wishes to implement, but cannot because of this legislation—a very distant prospect—we will have to amend the legislation. [Interruption.] The hon. Member for Stone asks why it cannot be done now. I am not clairvoyant, and that would require me to anticipate Sir Christopher Kelly’s recommendations.

No. I have already given way to the hon. Gentleman, and we must make progress.

As always, I listened with great care to the speech of the hon. Member for Stone. I thought for a moment that I would be able to record the fact that it was the first speech that I had heard him make in the House for many years in which he did not mention Europe. However, it followed a consistent pattern. Wherever the hon. Gentleman’s speeches start, they end with Europe.

I commend clause 1 to the Committee.

Question put:—

The Committee proceeded to a Division; but no Member being willing to act as Teller, the Chairman of Ways and Means declared that the Ayes had it.

Clause 1 ordered to stand part of the Bill.

Schedule 1

Independent Parliamentary Standards Authority

With this it will be convenient to discuss the following:

Amendment 50, page 10, line 24, leave out from ‘by’ to ‘the’.

Amendment 51, line 26, leave out from ‘by’ to ‘the’ in line 27.

Amendment 52, page 11, line 23, leave out sub-paragraph (5).

Amendment 54, in schedule 2, page 17, line 28, leave out from ‘by’ to ‘the’.

Amendment 62, page 17, line 33, at end insert—

‘(3A) The person must be a person who holds or has held high judicial office (within the meaning of Part 3 of the Constitutional Reform Act 2005 (c.4)).’.

Amendment 55, page 18, line 15, leave out sub-paragraph (3).

The purpose of the amendment is simply to ask the promoter of the Bill what the judge, or ex-judge, who is appointed to IPSA will be for, and whether we are appointing him to the right role.

In principle, I have always been in favour of there being someone with juridical experience to help to adjudicate matters of fact, evidence and the interpretation of rules when enforcing those rules on Members of Parliament and dealing with complaints. That is lacking from our present arrangements. However, I fail to understand why it is a good thing to make the judge a member of IPSA. If he were acting purely for the House and independently of potential judicial review, he would be contributing something very positive, but he will be acting as a de facto legal adviser to IPSA in respect of any judicial review of its activities and functions of regulation and enforcement. I propose in other amendments that the construction of the Bill should be insulated from judicial review. I will not refer to them now, but they effectively propose that all proceedings of IPSA and the commissioner should be regarded as proceedings in Parliament under article 9 of the Bill of Rights so that they are themselves privileged and whatever they deal with within Parliament is not therefore subject to adjudication and review by the courts.

In that capacity, I propose that if we are going to have someone as eminent as, let us say, a former Lord of Appeal involved in these processes, he should be the commissioner and not a member of IPSA. He should be involved with the investigations, the adjudication of rules, the consideration of evidence and the establishment of facts in a fair and impartial way, which is what a judge is trained in being skilled at, rather than just a member of this quango.

I just leave that question on the table for the Lord Chancellor to consider. I welcome the idea of a judge having a role in the process, but it should be on the investigation side, and not just as a member of a quango.

I am grateful to you, Sir Alan, for selecting my starred amendments in your position as Chairman of this Committee. That is, perhaps, a recognition of the fact that we are all in a tremendous rush and it is an abuse of the procedures of this House that a constitutional Bill of this importance is being treated as an emergency. The Government have an emergency, but the constitution does not, and it is wholly wrong that we are having to table complex amendments and have them considered extremely quickly.

None of the amendments I have tabled is in any sense a recognition that this Bill can be adequately improved. I think it is irretrievably a bad Bill, which is why I voted against it. However, in accordance with the spirit that Committees are supposed to have, I have tabled some amendments to try to correct some of the grosser abuses and to question the Government about their proposals.

Amendments 50 and 51 remove the requirement that the chair of IPSA must be appointed by Her Majesty the Queen. I have also included other members of IPSA in another amendment, because I am puzzled about why these need to be royal appointments. Therefore, I have this question for the Justice Secretary: what additional rights and status does this give them? Is it intended to elevate the importance of IPSA? That is hardly necessary, as it is already the supreme quango, at the pinnacle of the quango state; so I want to know what it is that royal appointment brings.

My hon. Friend makes an historical illusion, which is relevant because a part of our history—certainly of the history of this place—is an attempt to keep royal power at bay; so, again, it is rather puzzling that we are importing into this Bill, quite unnecessarily in my view, a system of royal appointment.

I suspect that the truth is that this is a kind of proxy for the Executive. They want to appoint the chair and members of this new quango. So my question to the Secretary of State is: what does this bring to the party? If it has no effect, why are we doing it? If it does have an effect, what is it? I certainly believe that this House is perfectly capable of making these appointments, if they are necessary, without having the additional rigmarole of making them Crown appointments.

I am grateful to the First Deputy Chairman of Ways and Means for correcting the misprint on the amendment paper, because Amendment 52 deals with line 23, not line 3. Such misprints are rare, and I think that this was another example of the fact that this is rushed legislation. The amendment leaves out part of paragraph 5 that deals with the removal from office of members of IPSA. The Bill says that such a removal may be carried out by Her Majesty the Queen—I think she has quite enough to do without having that duty as well—and that any such removal must be done

“on an address of both Houses”.

I am not sure why both Houses need to be involved, because I understood that this Bill was about this House. Why are we importing into the Bill the requirement that the Leader of the House of Lords should also table a motion in another place to bring about such a removal? Is this because, as I suspect, IPSA is in due course to cover the whole of Parliament, not just this House?

My amendment 52 would alter the procedure within this House and would mean that the motion for an address could not only be moved by the Leader of the House. To put it another way, my amendment would remove the requirement that such an address can be moved only by the Leader of the House and by the Leader of the House of Lords in another place. My amendment seeks to remove that requirement because I am worried that only the Government can do this. I think it is much better to leave the matter open, so that other Members—perhaps the Speaker—can, if the rules allow it, move such an address to make those removals should they be required.

Finally, I come to my amendment 53, which relates to funding.

Order. May I just say to the right hon. Gentleman that his amendment 53 was not selected, so it is not in order to refer to it at this stage?

I shall therefore merely make the point in passing, because it is relevant to the schedule as a whole. I shall ask this in an interrogative way, rather than to make a point, and perhaps the Justice Secretary would refer to it. Why is it that any repayments obtained by this new quango from Members, perhaps in respect of matters paid in error, should not benefit the taxpayer, but instead should be used to fund other activities and functions of the quango? I leave that hanging and I direct the main force of my remarks towards the amendments that you generously selected, Mr. Deputy Speaker.

Order. May I just make a correction for the Committee’s benefit, because this error is being repeated? We are in Committee of the whole House, so the form of address is either Mr. Chairman or Sir Alan.

I am extremely sorry, Sir Alan, and I hope that you will forgive me. I rise to support the amendment to which my right hon. Friend has just spoken. I do so because he highlighted a very important aspect of this Bill when he talked about the royal appointment, because, as we all know, royal appointments are prime ministerial appointments. In making those comments, my right hon. Friend indicated why we are here today. We are here today because of the Prime Minister, who, in a fit of pique and panic, has introduced an extremely bad Bill to Parliament. I have often been criticised, in my constituency and elsewhere, for sometimes working too closely with Members of other parties. I have taken great pride in that and I still do. It is with great reluctance that I have come to the conclusion that the Prime Minister of this country at the moment is not a good public servant of this country—

Order. It troubles me to have to intervene once again on the hon. Gentleman, but having listened to what he has said so far I do not detect how it fits with the narrow amendment we are discussing.

It fits, if I may so suggest, Sir Alan, because the amendment tabled by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) wishes to delete the reference to royal appointment. I have made the point that a royal appointment is, in effect, a prime ministerial appointment. This very bad Bill has been foisted on us by the Prime Minister in a spirit of vindictiveness, malice and uncharitableness. He is a Prime Minister who wishes to tear down some of the institutions of this country, of which Parliament—

Order. The hon. Gentleman is giving me trouble this afternoon. I reacted instantly to the use of the word “malice” and I think that that is over the borderline of what should really be permissible when ascribed to a right hon. Member.

At your instruction, Sir Alan, I will withdraw “malice” but I shall leave “uncharitableness”. I believe that we are where we are today because of the Prime Minister’s determination to foist on us an instrument that is destructive of this Parliament and its Members’ rights, including yours, Sir Alan.

I shall rest my case there, because I do not wish to make a long speech. I say what I say with a considerable degree of reluctance, but my right hon. Friend the Member for Wells is right to insist that the reference to the royal appointment should be deleted, because for “royal” one has to read “prime ministerial”, and that takes away the power of Parliament to regulate its own affairs and makes us dance to the tune of the chief executive—something that no free Parliament should ever do.

May I ask the Secretary of State one or two questions that arise from the amendment tabled by my hon. Friend the Member for North Essex (Mr. Jenkin)? They relate to the sub-paragraph of the schedule—paragraph 1(2)—that deals with the need to have a member of the judiciary, past or present, on IPSA.

It seems a matter of concern that we should be permitting an arrangement whereby a current member of the senior judiciary becomes involved in what will, in many respects, be an acutely political environment. IPSA, of course, will no doubt do its best to act in a dispassionate and judicial way, but the subject matter of its deliberations must by its very nature be acutely political. Indeed, that subject matter will not just be capital “p” political, but party political. We need to be extremely careful about drawing current members of the judiciary into the arena. Perhaps, on better consideration, if we are to have a person of judicial experience on the body, it should be a retired judge and not a sitting judge. However, I do think that some legal experience is sometimes helpful.

I appreciate that not all Members of Parliament always agree, and I also understand that the Lord Chancellor takes a different view from mine on the construction of certain parts of the Bill, particularly in relation to clause 9 and how we define dishonesty. We can perhaps discuss that tomorrow, when I shall do my best to correct him.

I confess that, perhaps naively, I took sub-paragraph (2) to mean that it was intended that a person who held judicial office at the time of his appointment to IPSA would relinquish that office. If that is not clear, it should be made clear. I hope that that is the Government’s intention and that, if necessary, they will table a Government amendment to clarify matters. In addition, does my hon. and learned Friend agree that a person with experience of high juridical office would be more objective and less likely to be infected by party political matters than, say, a former civil servant?

That is one of the skills of being a judge. I have no doubt that any current judges who had the misfortune to be appointed to this body would do their best to apply their judicial skills, but that is not the point. Judges must be separated from politics, and seen to be so. We do not have a written constitution in this country, but whether those who prefer a written constitution like it or not, we do have a separation of powers. Importing current judges on to political bodies of this nature would be a mistake.

The other point that flows from the amendment is that there are statutory limits on the numbers of people who may serve as judges in the High Court, the Court of Appeal or the Judicial Committee of the House of Lords. It is not widely known—and even where it is known, it is often ignored—that those people are already fairly fully employed. Taking a serving judge off the current bench of senior judges would simply add delay to the existing criminal and civil jurisdictions, and place additional work on the backs of the current judiciary at a time when they have plenty to do already. There are only two logical conclusions: either that sub-paragraph (2) be deleted, as advocated in amendment 61, or that membership of IPSA should be restricted to retired or former senior judges.

I want to say a few words about the amendments, and the Opposition’s view of these matters. My hon. Friend the Member for North Essex (Mr. Jenkin) has tabled two amendments that are important in that they give proper consideration to the issue of judicial appointments, as my hon. and learned Friend the Member for Harborough (Mr. Garnier) has explained. There seems to be good reason for having someone of legal experience on IPSA, but I also think that the point made by my hon. and learned Friend is correct. I find it very difficult to imagine how a person in high judicial office, with some time in post still to run, would want to spend his or her later years on the judicial bench—or the years after leaving it—as a member or the chairman of IPSA. It strikes me as a job that, although it may have some interest, is unlikely to match the interest generated by working on the bench.

Does my hon. and learned Friend believe that a judge’s enthusiasm for serving on this body will be enhanced by the possibility, which the Justice Secretary has confirmed, that it may be scrapped at a later date if Sir Christopher Kelly turns out to dislike it?

I agree entirely with my hon. Friend. I would not have thought that the uncertainties about the structure of IPSA would encourage people of sensible disposition who wish to be of public service to apply to join it. I do not wish to stray from the amendment, but we touched on one of the unfortunate aspects of the matter yesterday when we noted the degree of incoherence in how we have proceeded with this legislation. Even the bits that we support—I shall say more about them in a moment—seem to us deficient, as we cannot see the entire structure because we do not have Sir Christopher Kelly’s report.

There are good arguments for saying that IPSA should have a person with legal experience serving on it. If that is to be a retired High Court judge, so be it, but the point has been made that a person who has an active career in the judiciary should not be included in the list, and I rather think that that was not what the Secretary of State intended.

The main point that I was seeking to make was that if we are to have someone with such experience, he should be on the investigation and prosecuting side, not on the administration and function side. That was the main point of my tabling this pair of amendments. I wonder whether my hon. and learned Friend has a view on that?

There again, having someone of legal experience on the investigatory side may be desirable—clearly not a serving High Court judge or someone who is likely to go back on the bench. There are arguments that someone of legal experience would be valuable. I happen to think that legal experience would be valuable in either role. I shall be interested to hear from the Secretary of State what he has to say on the subject.

There are two slightly different roles. One is clearly investigatory and involves making sure that due process of law is followed, so judicial experience is relevant, especially in view of the comments made by the hon. Member for Hendon (Mr. Dismore) about the human rights compatibility of the new statute. Equally, there may well be some scope for judicial experience within IPSA, if for no other reason than that if one gets the right person it will help inject common sense and may be of assistance in justifying decisions to the public independently of the House. For those reasons, I shall be interested to hear what the Secretary of State has to say.

The second set of amendments has been tabled by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) on the question of royal appointments. There is something slightly strange here. On the one hand, the Bill makes it clear that the appointment is made by this House voting on a motion, but is ratified by the Queen. On the other, later in the Bill, the person who is appointed is described as not being a Crown servant. I find a slight incompatibility between an appointment that derives from the monarch and the appointee not being a Crown servant. I shall be interested to hear from the Secretary of State exactly what the legal status of that person will be.

Is it not a fundamental point of parliamentary privilege established since the civil war that no Crown servant should have any jurisdiction over this House?

My hon. Friend makes an important point. The difficulty that the House has, and we have to face up to it, is that either IPSA is our creature in the sense that it is ultimately answerable to us, or it is not. As I said on Second Reading, I have grave anxieties about the widening of the scope of IPSA’s operation, especially to issues of MPs’ conduct. That is in a sense a separate issue that we will have to consider tomorrow, although it will colour my view about the entirety of the legislation.

If the purpose of establishing IPSA is to set up a system for setting our salaries and allowances and ensuring that they are properly paid and that we repay what might have been misclaimed, the arguments for creating a body that is seen to be entirely independent of the House become strong. I have to say that we have got ourselves into our difficulties in part because we have in-house allocation of our allowances and we ultimately control them.

I am sympathetic to the Government’s aim, as I made clear at the outset, of having our salaries and allowances set outside this place entirely. If we are to achieve that, it must follow that IPSA cannot be seen to be our creature. If it is appointed on the basis of motions in the House, it will remain so. That is the point where I have sympathy with the Government’s position. That sympathy begins to erode when I see how the Government have provided for IPSA to have other functions and, above all, for the commissioner to have other functions which I believe intrude into areas of conduct, affect the Bill of Rights and our privileges, and are much more controversial.

The question that I would like the Secretary of State to answer is: in view of what the Bill says—namely, that the appointment is made by motion of this House but is ratified by the Crown—what is the status of the person who is thus appointed if they are not a Crown servant? On the face of it, it seems rather an anomalous position.

This has been a useful debate, and I am grateful to right hon. and hon. Gentlemen for having raised issues. Let me deal with them in turn. The hon. Member for North Essex (Mr. Jenkin) asked, first, whether it was appropriate for there to be a place on the authority for somebody who has held high judicial office; secondly, whether it is acceptable, in any circumstances, to hold out the possibility of that person being a current holder of high judicial office; and, thirdly, whether it would be more appropriate for somebody in that position to be the person selected to be commissioner.

On whether it would be very useful for there to be one person on the authority who has high judicial experience, certainly there was not much argument in the inter-party talks, although I accept that they were not a substitute for debate in this House; of course they were not. My view is that given the nature of the functions of the authority, somebody with high judicial experience could be extremely helpful in helping to guide the authority. There is no direct parallel, but I have certainly witnessed at close hand the work that former members of the Court of Appeal have done as commissioners for the interception of communications, for surveillance and for the intelligence services. They do a job that is partly administrative and partly adjudicatory, and they do it with huge skill, perspicacity and authority. We are trying to set up an authoritative body that is at arm’s length from the House, and that does not leave us open to the criticism that we are judging ourselves, so having someone with that authority on the body would be very helpful.

I say to the hon. Member for North Essex that the authority will have two functions, which are set out in one of the clauses. One of the functions is to run the administrative system—that is, to administer the allowances and so on. The execution of that system will be a matter for the chief executive. Alongside that, but quite separately, there is the function of adjudicating on complaints that are brought to the body by the commissioner. In certain circumstances, the body will deal with the complaints; in other circumstances—if it judges the complaints to be more serious—it will refer them to this House. Again, when it comes to ensuring that there is an acceptable process that meets the requirements of natural justice and of article 6 of the European convention on human rights, it would be helpful to have somebody on IPSA with the authority of high judicial experience.

On the hon. Gentleman’s second point, he is quite right to suggest that it is improbable, not to say impossible, that somebody who is currently serving as a senior judge could or should accept appointment to IPSA. The only circumstances that I can conceive in which the current wording would be relevant are those in which someone who is coming to the end of their term of office, and is about to retire, wishes to apply for the IPSA job. He or she might be appointed to it while still holding high judicial office, but would not take the job on until they had finished their term of office. However, if I may, I will take away the issue of the current drafting and think about it.

On the third point, which was about whether it would be more appropriate for the commissioner to be somebody who had held high judicial office, there is nothing to stop somebody who has judicial experience from applying for the post. It is important that a member of the authority should have held high judicial office, but I can think of others who have had good judicial experience who could easily fulfil the work of the commissioner.

There has been a succession of very able Parliamentary Commissioners for Standards, but no holder of that office has had juridical experience, and that is a disadvantage. Surely the Bill is an opportunity to make sure that an improvement is made in the new arrangements.

I am a member of the legal profession and have great affection for it. I have made plenty of jokes along the lines that only a lawyer should apply for any job I can think of. I know there is approbation for that on at least part of the Opposition Front Bench. However, just as we have fine qualities, there are others with equally good qualities.

Could the Government think a little more carefully about another problem? They are in danger of leading themselves into yet further difficulties. The Secretary of State has now accepted that it would be unwise for a serving member of the judiciary to fulfil the function, but the Government’s policy seems to be continually to reduce the retiring age of judges, presumably on the basis that above that age they are unfit, through senility or exhaustion, to serve as judges. If they are required to retire at increasingly early ages as judges, why are they then fit to perform the proposed function?

The basic reduction in the age of retirement for the judiciary was made by the right hon. and noble Lord Mackay in 1995. It was his proposal to reduce the retirement age from 75 to 70. I have no proposals to reduce it still further, and I would be reluctant to do so. As the hon. and learned Gentleman knows, many members of the senior and less senior judiciary are very capable of carrying out further functions after they have retired.

Let me deal with the points made by the right hon. Member for Wells (Mr. Heathcoat-Amory). I do not accept—and there is no provenance for this—that if an appointment is made by the Speaker, by virtue of that fact it is a creature of the Executive. Many, many appointments are made which have nothing whatever to do with the Executive. My right hon. Friend the Member for Birkenhead (Mr. Field), who is not in his place, said to me that he had been appointed by Her Majesty to two positions, neither of which have anything to do with the Executive.

We considered whether, as is standard in respect of the Comptroller and Auditor General, for example, there was something to be said for the appointment to be formally recommended by the Prime Minister, but we ruled that out rather quickly so that the recommendation should go direct from the Speaker. As was made clear by the ceremony last Monday, in which I took part, the Speaker, who is elected to serve the House, has to have his or her appointment approved by Her Majesty, but that never goes near the Executive, nor should it. I hope I can provide reassurance on that.

The purpose of ensuring that if there is discontent with the individual or individuals, they can be removed only on an address of both Houses, is to bring that into line with the arrangements for the removal of members of the High Court and above, to give them assurance that they are independent. That makes sense, but I accept the right hon. Gentleman’s objections to only the Leader of the House or the Leader of the other place being able to put that motion before the House. I acknowledge that that provision should not be in the Bill, so I will seek the approval of the House for amendment 52.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 52, in schedule 1, page 11, line 23, leave out sub-paragraph (5).—(Mr. Heathcoat-Amory.)

I beg to move amendment 3, page 15, line 41, leave out from ‘After’ to end of line and insert

‘the Committee has reviewed the estimate and made any modifications, the Speaker’.

With this it will be convenient to discuss the following:

Amendment 4, page 16, line 28, after ‘and’, insert ‘the Speaker must’.

Amendment 5, page 16, line 30, leave out ‘On laying’ and insert ‘When the Speaker lays’.

Amendment 1, in clause 3, page 2, line 18, leave out ‘IPSA’ and insert ‘Speaker’.

Amendment 2, in clause 5, page 3, line 25, leave out ‘IPSA’ and insert ‘Speaker’.

These are technical amendments, and the need for them may reflect the haste with which the Bill has been drafted. Paragraph 25 of schedule 1 provides for IPSA to lay its annual report before Parliament. Papers may be laid on the Table only by a Member or an Officer of the House, so in practice someone will have to lay the annual report and other papers on behalf of IPSA. Of course, IPSA is independent of the Government, so it would not be right for the papers to be laid by a Minister of the Crown. The Government may assume that the Clerk of the House will lay them, but the legislation should not rest on assumptions, and, to the extent that there are precedents for this, they are not very good. It will be for the House authorities to decide whether any Act, drafted in the current terms of the Bill, provides sufficient clarity and authority for papers to be laid on behalf of IPSA.

It would be much better to specify the laying authority in the Bill, and the Speaker, as Chairman of the Committee established by virtue of clause 1, is the appropriate person to lay the papers both on behalf of that Committee and, indeed, of IPSA. He already lays papers on behalf of similar independent bodies, such as the Electoral Commission. If the Government do not agree, they should at least make it clear in the Bill who will lay those papers.

I am very grateful for the opportunity to make a contribution with you in the Chair, Sir Alan; it is a very rare opportunity for us all. I simply second the comments of the right hon. Member for North-West Hampshire (Sir George Young). His amendment would place the focus back on the Speaker, and, as we have just chosen a new Speaker, it is appropriate that he have that role. I seek to be persuasive, and I invite the Secretary of State to agree to the amendment.

Such is the eloquence of the right hon. Member for North-West Hampshire (Sir George Young) and my hon. Friend the Member for Middlesbrough (Sir Stuart Bell) that I am very happy to accept the amendment. It makes eminent sense and shows the value of this kind of process.

Amendment 3 agreed to.

Amendments made: 4, in schedule 1, page 16, line 28, after ‘and’, insert ‘the Speaker must’.

Amendment 5,  page 16, line 30, leave out ‘On laying’ and insert ‘When the Speaker lays’.—(Sir George Young.)

Schedule 1, as amended, agreed to.

They come later. The hon. Gentleman should not be concerned; we shall arrive at them in due course.

Schedule 2

Commissioner for parliamentary investigations

Question proposed, That the schedule be the Second schedule to the Bill.

Schedule 2 creates a new Commissioner for Parliamentary Investigations, but it leaves in place the existing Parliamentary Commissioner for Standards. After the legislation comes into force, the Parliamentary Commissioner for Standards will, for an as yet unspecified period, retain responsibility for the register of Members’ staff, the register of journalists and the register of all-party groups; for advising the House on its code of conduct; and for considering complaints that a Member has breached the code, unless the complaint relates wholly to the Members’ allowances scheme or to the rules on Members’ financial interests.

Of course, complaints do not always fit neatly into one category or another, however; it is perfectly possible for a complaint against a Member to fall into two. The advantage to the public and to the House of the current arrangements is that we have a one-stop shop for complaints about Members: the Parliamentary Commissioner for Standards. Under the Bill, however, we will close that one-stop shop. Not only will some complaints be potentially open to investigation by both commissioners, but the conduct of the two investigations into the same complaint may be carried out according to different procedures, and the resolution of the two complaints may be made according to different criteria.

Last night, the Deputy Leader of the House told the House in her winding-up speech:

“Any future change to the role of the Parliamentary Commissioner for Standards would be made only with the agreement of the Speaker and after an affirmative vote by the House, following consultation with both the Independent Parliamentary Standards Authority and the Committee”—

my Committee, the Standards and Privileges Committee—

“that the right hon. Gentleman chairs.”—[Official Report, 29 June 2009; Vol. 495, c. 126-27.]

In view of the potential for confusion, I wonder whether I can press the Minister to say a bit more today about how she sees the relationship between those two commissioners prior to such changes that may bring to an end the existence of one. How exactly will we avoid all the dangers of duplication, overlap and inconsistency of approach which are inherent in two commissioners being in office at the same time?

I endorse everything that my right hon. Friend has just said. There will inevitably be duplication in the transition period, but then the question is, what happens beyond any transitional period? Either we get rid of the Parliamentary Commissioner for Standards, whom we have in this House, in which case the Commissioner for Parliamentary Investigations must inevitably acquire the powers of regulation over those matters that are solely within the House’s remit; or we recognise the basic problem that the Government created a Bill that was initially designed to regulate our conduct in its entirety, they backed off after the overwhelming outcry about the House’s independence being completely lost in the process, and they have been unable to follow the matter through to its logical conclusion, which is that the role of the Commissioner for Parliamentary Investigations is redundant. We should look for a proper system whereby IPSA, if it considers rules on claiming allowances and salaries to have been transgressed—although that is rather unlikely in the case of parliamentary salaries—makes any reference that it needs to make to the existing structure.

That is the problem, and my right hon. Friend is absolutely right to highlight the fact that the issue appears to be a fertile area for conflict. Conflict will occur not just when we decide on the current structures today; we are laying the ground for future conflict when the House considers whatever the final structures should be.

Taking into account what our right hon. Friend the Member for North-West Hampshire (Sir George Young) said about the potential for conflict over the interpretation of the law and the facts, might not one pragmatic solution be to have one person doing both jobs? It is a bodge, but this Bill is a bodge.

My hon. and learned Friend makes an interesting and sensible point. The only difficulty is that we have just debated the fact that the chain of answerability of the Commissioner for Parliamentary Investigations and the Parliamentary Commissioner for Standards is different: one derives directly from the House; the other quite deliberately—certainly in terms of IPSA—goes somewhere else.

The measure has not been properly thought through, and there is a real constitutional incoherence about the way the Government have dealt with the issue. The problem will not go away just because we decide to ignore it.

Is not the overwhelming and logical conclusion to the argument of my hon. and learned Friend the Member for Beaconsfield (Mr. Grieve) that IPSA should be no more and no less than an independent fees office?

My hon. Friend refers to the body that many thought was going to be created. There are very good arguments for having a wholly independent body administering our salaries and allowances. That would free Members of Parliament from a burden which, frankly, we were showing ourselves very ill used to discharging, and which meant that we were coming in for a great deal of public criticism; in many cases, MPs did not want to go through the business of doing it because it attracted public opprobrium whatever decisions they came to.

Those are really good and compelling arguments. The Government have muddied the waters. When the Prime Minister made his pronouncements on television, which did not appear to relate to having taken any prior advice, he indicated that this structure would have supervision of our conduct without thinking through the constitutional implications. Although he has since rowed back—under a great deal of pressure, I suspect, from several quarters—there has been an unwillingness to follow that through to its logical conclusion. I urge the Secretary of State—who is, after all, responsible for the rule of law in this country, for trying to maintain some clarity, and for protecting our constitution—not to create what appears to be a dog’s breakfast. I will be interested to hear how he thinks these two things can, in practice, be reconciled when it is abundantly clear that if we breach the rules on parliamentary allowances, we bring ourselves directly in line for criticism in terms of our status as Members of this House. Having some clarity would help everybody.

The right hon. Member for North-West Hampshire (Sir George Young) has raised an important issue that we discussed to some degree in the cross-party talks. It may be helpful if I tell the Committee what is in the Government’s mind. I resist the claim by the hon. and learned Member for Beaconsfield (Mr. Grieve) that we have been unwilling to follow through the consequences of our proposals to their logical conclusion. We are not discussing clause 11 at the moment, but that clause—Opposition Members will recall its provenance—was put into the Bill to try to deal with precisely this issue.

First, let me deal with the point made by the hon. Member for Gainsborough (Mr. Leigh), who asked whether this body should have been an independent fees office, in his phrase, and nothing more. We are indeed establishing an independent fees office, but there are certain consequences that follow from that. One of the key consequences involves who then supervises that independent fees office. If we approve the principle of an independent fees office, as the House plainly has—I remind Members that the principle of the Bill was approved by a majority of 290; the vote was 291 to one—we must also approve the principle that the people who supervise it must be independent of this House. Otherwise, we would get into the absurd position of having a fees office that was allegedly independent, but when there was a complaint about its operation— whether it came from a member of the public, a Member of this House or a member of staff, and whether it concerned its administration or how it was adjudicating on individual Members’ allowances and claims—that complaint would fall to be adjudicated solely by this House. If there were then a question about whether the new independent fees office was being properly run, again it would fall to the House to deal with it. We would not be setting up what we sought to set up at all, but a charade.

That is why we thought that we should set up the structure that is essentially provided for in schedules 1 and 2. The authority has two branches to its work, one of which is administrative. There is a chief executive, or chief officer, appointed by the authority, but it is the chief officer, not the authority, who is the accounting officer, and he or she is directly responsible for the administration and good financial conduct of the authority and its expenditure of money. On the other side, there is a commissioner who is there to investigate complaints, which may well be about the operation of the chief executive and his or her staff. I suggest to the Committee that that is an essential part of any process to establish what the hon. Member for Gainsborough describes as an independent fees office. There is an argument for saying that the commissioner should be wholly hived off, but the commissioner is pretty nearly wholly hived off.

The right hon. Member for North-West Hampshire asked whether we would have two sets of investigations falling over each other with two sets of procedures. If one reads the Green Book, one can see that it is overwhelmingly concerned with Members’ conduct in terms of their financial interests and allowances. That will fall almost exclusively to the new authority and the new commissioner. However, there will continue to be some work for the existing commissioner and some investigations that will go directly to the Standards and Privileges Committee, not through the authority as well.

The hon. and learned Member for Harborough (Mr. Garnier) asked whether it might be sensible to have one person who was able to do both jobs. Yes, it might be; the double-hatting of functions is perfectly normal in many situations. That is why clause 11, which we will come to in due course, provides for two sets of things. First, subsection (1) states:

“The Speaker, after consulting the Commissioner and the House of Commons Committee on Standards and Privileges, may agree with the”

authority that it

“is to carry out any registration function specified in the agreement”

that it is not already carrying out. The registration functions in the Bill will be functions relating to Members, not necessarily to Members’ spouses or staff, nor, for example, to the press lobby, which is currently separate. If that is agreed, then subject to the provisions in subsection (8), those functions would go to the authority.

Secondly, subsection (4) states:

“The Speaker, after consulting the IPSA and the House of Commons Committee on Standards and Privileges, may agree with the Commissioner that the Commissioner is to carry out any relevant function specified in the agreement (whether relating to a matter arising before or after the agreement is made or the date this Act is passed).”

Therefore, the existing functions could be passed over. The other safeguard for the House is that that could happen only if the agreement were approved by a resolution of the House.

The Secretary of State makes a compelling argument for having a reviewer of IPSA decisions in relation to any mistakes that might be made by IPSA or complaints about individual Members’ claims in terms of their having been overpaid or paid for something to which they were not entitled. I have no difficulty with that. The difficulty that arises, which is inherent in the enforcement provisions in clause 8 that we will have to consider tomorrow, is what happens when one sets up a system whereby IPSA or the Commissioner for Parliamentary Investigations—it is not quite clear how they interrelate in this context—makes recommendations to the Standards and Privileges Committee about what it should do to Members of Parliament who have, in IPSA’s view, transgressed on a financial matter. For reasons that I made clear in my closing remarks yesterday, I think that is very dangerous territory for the independence of this House. That is why my original comment is valid. The Commissioner for Parliamentary Investigations is a leftover from a structure that was put together by the Prime Minister at a time when he wanted to put this House entirely under independent regulation from outside.

The hon. and learned Gentleman’s imagination is running away with him. I promise him that that is not the case.

A few moments ago the Secretary of State made a perfectly fair point about the need for complaints about the independent fees office, as my hon. Friend the Member for Gainsborough (Mr. Leigh) described it, to be dealt with by someone independent. However, according to schedule 2 the Commissioner for Parliamentary Investigations will essentially be chosen by, or with the agreement of, the Speaker, and the Speaker cannot nominate a candidate without the agreement of the Speaker’s Committee for the Independent Parliamentary Standards Authority. Who will make up that Committee but Members of Parliament? The Secretary of State is building into his so-called independent system a snake and a ladder that go straight back to Parliament, so the appearance of independence is destroyed.

The hon. and learned Gentleman raises an important point, but someone has to appoint both the members of the authority and the commissioner. The hon. Member for Rutland and Melton (Alan Duncan)—if I might have his attention for a moment—and other members of the cross-party group will confirm that we considered alternative methods for the appointment of the commissioner. One was for it to be effectively in the hands of the civil service commissioners, so that we would simply be presented with a person whom we would endorse but have no ownership of, as it were. That did not find favour with the hon. Gentleman or anybody else on the cross-party group, or indeed with me.

There is a balance to be struck. The House can set up an independent authority and appoint independent individuals, which is consistent with our responsibilities, or it can somehow lose its sense of responsibility and outsource decisions to another body completely. I happen to think—I may be wrong—that we have got the correct structure and the right balance.

I am confident in saying that because, for instance, I have been part of the process to appoint members of the Electoral Commission. That has been done on an all-party basis, with the assistance of the civil service commissioners, but by this House. No one suggests that members of the commission, or its recently appointed chair, are not independent of the House, even though they are appointed by it. No one suggests that although the new Information Commissioner is endorsed by the House, he is not independent of it. We are perfectly capable of making judgments about the qualities of individuals and having protections to ensure their independence.

Finally, all the people appointed under schedules 1 and 2 will have tenure unless they are removed by an address to Her Majesty generated by any Member of the House.

On any view, the commissioner will have considerable authority over right hon. and hon. Members, or at least his decisions will have an impact on them. The selection of the commissioner is therefore a matter of considerable importance and should be subject to constraint and oversight. It is clear from paragraph 1(3) and (4) of the schedule that the drafters of the Bill had that in mind. I note that the person in question will have to be selected by the Speaker, and I note from sub-paragraph (4) that:

“The Speaker must not select a candidate without the agreement of the Speaker’s Committee for the Independent Parliamentary Standards Authority.”

I hope that you will allow a debate on schedule 3, Sir Alan, because one is therefore driven to consider the composition of that committee.

I notice that in reality, the Executive could have considerable authority over the selection of the committee that is specified in schedule 3. Obviously the Speaker is independent of the Executive, but the Leader of the House is not. The five members of the committee who are MPs but not Ministers, who are to be appointed by the House of Commons, may well be chosen as a result of a Whips’ operation.

We could therefore find that the composition of the committee, which will no doubt sit under the chairmanship of Mr. Speaker, is shaped by the Executive of the day, operating through the Whips when the House comes to decide its membership. I regard that as a thoroughly undesirable state of affairs, and it means that the safeguard on the appointment of the commissioner that we are providing under sub-paragraphs (3) and (4) is much less real than one perhaps thinks. I hope that you might allow a short debate on schedule 3, Sir Alan, so that that point can be reinforced and so that we can make the further point that the House should have greater independence when it comes to decide on the nature of the authority.

Schedule 2 deals with the role of the Commissioner for Parliamentary Investigations. We will get on to questions of privilege later under clause 7, but I simply wish to put it on record that on my analysis of the commissioner’s function, the schedule and clause 7 do not appear to preclude the involvement of the police. The use of the word “may” in that context, irrespective of whether the word “shall” should have been used, gives rise to the question whether there will be parallel functions. I hope that the Secretary of State will take account of that in his consideration of clause 7 later, because although I believe it is intended that the commissioner will have the function—apparently the sole function—of investigating, I am by no means convinced that that will be the result of how the Bill is drafted.

I wish to support the comments of my right hon. Friend the Member for North-West Hampshire (Sir George Young). We are devising a new system on the hoof in this very fast piece of legislation, but I beg the Secretary of State to have something that is clear and that we and our electorate can understand.

We had quite a few problems over the years, until we solved them recently, with the fact that certain things had to be declared to the Electoral Commission and certain things to the registrar of interests here. Some Members fell foul of that system without any personal culpability, because they had not completely understood it. It was very confusing, but that was acknowledged and we have now put it right. We are in danger of creating another system that will be even more confusing.

My right hon. Friend rightly pointed to the activities of the Parliamentary Commissioner for Standards, and I know of no one who has seriously criticised the current commissioner or his predecessor, Sir Philip Mawer, who was an enormously dedicated public servant and gave great time and tremendous integrity to his task. He served the House, and through it the country, very well indeed. I have no reason to suppose that the current commissioner is any different. I rather infer from my right hon. Friend’s remarks that he has a similar regard for him.

My right hon. Friend indicates that he does. Now we are going to have another commissioner. The clearly logical situation would be to do as my hon. and learned Friend the Member for Harborough (Mr. Garnier) suggested, but the Secretary of State indicated that there would be a potential conflict of interest in that. We have to address that point, because the public need to know who “the commissioner” is. They will not understand the nuances and the differences between one commissioner and the other.

I am sorry to go back to this point, but we are in this mess because we are legislating on the hoof and with such precipitate and unnecessary speed. On 18 June—less than two weeks ago—I asked the Leader of the House whether IPSA would be solely concerned with the financial aspects, and she replied in the affirmative. Even though the Secretary of State graciously withdrew clause 6 yesterday, we still have an exceptionally badly drafted and unsatisfactory Bill. It has caused widespread concern throughout the House, irrespective of party—the minority parties are as concerned and exercised by it as any others.

We compound the problem by having two commissioners, and the confusion makes it difficult for people who wish to level genuine complaints—I do not mean those who wish to make frivolous and vexatious complaints; goodness knows, there are enough of them. The Secretary of State obliquely suggested that it might be possible for one person to wear two hats, and I urge him to consider the matter further so that when the Bill goes to another place, where Members have more time and, frankly, more expertise, they can perhaps reach a reasonably satisfactory conclusion, which does away with the confusion and creates the clarity that must be the prerequisite of such legislation.

Before I call the next hon. Member, I need to make a confession to the House and seek indulgence. In the euphoria that we perhaps felt when the Secretary of State accepted amendment 52 in the name of the right hon. Member for Wells (Mr. Heathcoat-Amory), I failed to notice that amendment 55 makes exactly the same point. It requires the leave of the House for me to put that amendment immediately before I put the Question on the schedule. That is clearly logical and would save tidying up later. Do I have the House’s approval? [Hon. Members: “Yes.”] That is what we will therefore do. I offer my humble apologies for not spotting that earlier.

I want to place on record my concerns, some of which mirror those that Opposition Members have expressed, about the creation of the Commissioner for Parliamentary Investigations and providing for it in the Bill. The public think that it is to do with stopping the scandals about expenses, which have caused so much concern. Instead, we are creating something that has a slightly Cromwellian air. Cromwell was keen on commissioners in place of Members of Parliament. A Commissioner for Parliamentary Investigations sounds rather sinister. What exactly will that person investigate?

If we combine the earlier aspects of the Bill with the new rule book that has just been presented to us, it will be jolly hard for any Member of Parliament to write a book again. Those who consider doing that will have to log all the hours they spend thinking about, preparing and writing the book. When such matters are reported to the new IPSA, or “Guardian Council” as I prefer to call it, constituents will ask, “What on earth is this man doing writing a book? He should be in the constituency working on all our cases. We need a parliamentary investigation. Oh good, we have a Commission for Parliamentary Investigations. Let’s get him on the job.” I exaggerate slightly.

My right hon. Friend the Secretary of State, who is a much better, more honest and keener parliamentarian than I will ever be—I know from working with him as a Minister how seriously he takes the House—is trying to get something on to the statute book in response to one of the periodical “fits of morality”, to quote Lord Macaulay, through which our nation is going.

I ask my right hon. Friend to ascertain whether the old expression “festina lente” applies. In my 15 years as a Labour Member of Parliament, who would like an elected second House, I never thought that I would say, as I say tonight, that I hope that the other place takes time and considers the matter carefully. The concern is cross party—many of us are talking about the matter in the Tea Room and in the corridors. That includes those who are not present because we have many other unfortunate and pressing issues to tackle. For example, I have to deal with massive steel redundancies in my constituency.

I speak simply out of deep concern that we are legislating in haste and without clarity, and creating an incredibly powerful office that can interfere substantially with what Members of Parliament do. Members of Parliament can be eccentric—I note that the hon. Member for Bethnal Green and Bow (Mr. Galloway), who was once a great supporter of Saddam Hussein, now supports, according to reports that I have read, President Ahmadinejad and is acting as his spokesman in Britain.

Order. The right hon. Gentleman must take care when criticising another hon. Member, certainly when it is done without notice.

I was simply reporting what the website said. If it is a criticism, let the cap fit.

In the House, we have always had our eccentrics—people who are isolated in their party and from public opinion. However, they were always protected by the invincible shield of having been elected by their constituents in a free vote in a specific locality. Nothing could take that away from them.

Indeed. At the beginning of 1939, the Conservative party actively tried to deselect Churchill. Winston Churchill had to conduct a surgery; he had to go to his constituency and find out where Chingford or Chigwell—whatever it is called—was.

Winston Churchill’s private and business affairs were extremely shady in the 1930s, and he would certainly have fallen foul of the new commission.

Under the new rules, not only in the Bill, but in the Green Book that has been waved around, the notion that anybody could find time to write a book while serving as a Member of Parliament has gone out of the window. I do not know whether that is healthy. Many of us feel that we should spend more time reading books; one or two of us are mad enough to try to write one, but there will be little time to do that under the new proposals.

I appreciate that my right hon. Friend the Secretary of State is trying to get things right and I accept that he is sincere. He is a great parliamentarian—one day, he may even become a Back Bencher again, though that is difficult to imagine. He would be a good Back Bencher and, if he were to become one, he would not want to be hobbled by the Cromwellian commissioner that he proposes.

I largely agree with what the right hon. Member for Rotherham (Mr. MacShane) has just said, particularly his early remarks about the haste with which the Bill has been cobbled together. As I said a moment ago, it is a bodge. Bodged Bills tend to lead to bad law and tears before bedtime. I assure you, Sir Alan, that there will be tears before bedtime if the measure gets on to the statute book as it is drafted.

I want to say something nice about the Secretary of State for Justice. I hope that it will not accelerate his return to the Back Benches—I said that with my fingers crossed. The Government’s Lord Chancellors have appointed members of the judiciary, and not one can be accused of being a political creature. That applies to the current Lord Chancellor and his predecessors as Labour Lord Chancellors. They have performed their functions as party politicians who happen to be Lord Chancellor in an exemplary fashion when making appointments to the judiciary. They even managed to do that with the appointment of a former Labour Solicitor-General, who is now a member of the High Court bench. He performs his judicial functions entirely properly and utterly separately from any previous political allegiance that he may have had.

That said, however, it is fair to say that it would in theory be possible for a Speaker, advised by the Independent Parliamentary Standards Authority, to appoint somebody as the Commissioner for Parliamentary Investigations who could carry out his functions in an entirely dispassionate and disinterested way. However, my concern is not so much about the actuality, but about the appearance, because we will not get the confidence of the British public—and certainly not in the current book-burning storm that we seem to be facing—if they think that there has been a parliamentary stitch-up. I happen to think that Parliament ought to be big enough and self-confident enough to manage its own affairs and to discipline its malefactors, as we have done in the past, without feeling ashamed. However, I suspect that the political climate is rather different now and that we now have to have a Bill such as this one. However, if we are to have such a Bill, let us get it right instead of rushing it through and making mistakes that are either unforeseen or foreseeable, but which are none the less mistakes.

The Justice Secretary is trying to persuade us that it is important for the independent fees office, as described by my hon. Friend the Member for Gainsborough (Mr. Leigh), to be disciplined—or governed or looked after—by an independent functionary. Yet we also see, and not just in schedule 2, which we are discussing, but in other parts of the Bill, various references—[Interruption]—including 20 references to the powers of the Speaker to do things, as my hon. Friend the Member for Chichester (Mr. Tyrie) reminds me. We are persuading ourselves that the machinery that the Bill creates is one of independence. However, every time one looks at a clause or a subsection, one sees that the Bill does not produce machinery that is independent of the House of Commons or Parliament, still less of the Executive; rather, it produces one that remains in their grip. I happen to think that that is not necessarily a bad thing, but it is no good for the Government to proclaim that the Bill sets up an independent machinery when we see the fingerprints of the Speaker’s office and the Executive on more or less every clause.

When my hon. and learned Friend says that the machinery is in the grip of Parliament, what I think he means to say is that it is in the grip of the Executive, and that is what is truly dangerous.

I agree. It has long been my view that while we have an Executive who sit in Parliament, they should not sit on Parliament. We have become too supine as Members of Parliament. I hope that, in recognising the public anger about expenses and so forth, we will none the less remember that we were elected to represent our constituents in a self-confident and independent way, and not to be bullied by either the Executive or other outside interests that wish to knock us off our stride.

Of course Members of Parliament make mistakes. Some may have committed serious mistakes and will have to answer to the law for them. However, I cannot understand an argument that says that we are setting up an independent machinery when one sees, for example, references to the Speaker in paragraphs 1(2), (3) and (4) of schedule 2, references to the Independent Parliamentary Standards Authority, which is made up of Members of Parliament, or references in paragraph 4 of schedule 2 to the removal of the Commissioner for Parliamentary Investigations being brought about only on a motion put down by the Leader of the Commons—Hon. Members: They’ve conceded that.

Well, I am delighted to hear that, because—[Interruption.] I am so grateful for the attendance of that person over there, whoever he is. None the less, my point in relation to those other aspects of schedule 2 remains. I apologise if I misunderstood the nature of the amendments of my right hon. Friend the Member for North-West Hampshire (Sir George Young) in relation to the motion made by the Leader of the House, but that function will now be performed by the Speaker—is that right?

Well, there we are—it appears that none of us has an idea, but perhaps we ought to. I return to what the right hon. Member for Rotherham said at the beginning of his remarks. If we rush the Bill through without having thought about it thoroughly, we will end up disappointing not only ourselves, but those outside.

Having listened to this debate on schedule 2, I think that we are clearly on a journey with the destination unknown. Where we are now is that we have a one-stop shop. We have one Parliamentary Commissioner for Standards, one code of conduct and one route for complaints. The original proposition from the Prime Minister was for the whole thing—finance and non-finance—to be contracted out to an outside body. That proposition met with criticism, for all the reasons that the Secretary of State knows, so it has now been divided into two aspects: financial and non-financial. The finance bit goes out to IPSA, which will be subject to the new commissioner. However, a bit of the code remains with the House of Commons and the Parliamentary Commissioner for Standards.

In his remarks, the Secretary of State helpfully pointed to some provisions in clause 11 that enable us to move on from what we all regard as a rather unsatisfactory position, with two routes for complaints. If the Bill goes through, the commissioner whom we are discussing under schedule 2 could, if everybody agreed, perform the function of dealing with non-financial complaints and reporting not to IPSA, but straight to the Standards and Privileges Committee. If we ended up at that destination, we would have one commissioner who would perform two functions. In other words, there would be a one-stop shop.

There would still be some untidiness, however, in that the rules for one route of complaints might be different from those for another route, and the destination might be different. However, if we end up there, it would be helpful to have some consultation about that at some point, because there are people involved. It would also help to have a time scale. How long will we have two Parliamentary Commissioners for Standards running alongside each other, one reporting to us and the other reporting to IPSA? I have no difficulty with schedule 2, but there is a residual untidiness, although there are also some possible solutions, which the legislation may facilitate.

I should make it clear—I might not have done this earlier—that I can see that there might be some merit in having the commissioner for investigations performing the role of the Parliamentary Commissioner for Standards. Indeed, there has been criticism in the past about the extent to which parliamentary commissioners have been subject to improper pressure from within this House, and that proposal might help to resolve that problem. However, is not the nub of the issue that if we are to have that conjoined role, the powers of enforcement in clause 8 and the relationship of the commissioner vis-à-vis the Standards and Privileges Committee will have to be identical? Otherwise, we will start running into some very difficult areas indeed.

My hon. and learned Friend is quite right, which underlines the need for some serious consultation if we are to come up with a solution that meets all the points that have been raised, including his concerns and mine about exposing those decisions that currently rest with the House to review in the courts, which is not something that I would wish for.

Does that point not underline the good sense of taking time in the other place to get the Bill absolutely right?

I agree with my hon. Friend.

We have had a useful debate that has outlined some potential solutions, albeit ones that have ramifications that need to be thought through. However, it was helpful to hear from the Secretary of State that he is not unfamiliar with the issues raised by the approach adopted by the Government. I hope that he will be sympathetic to some of the solutions that have been explored.

This has been a useful debate, and I should like to respond to it, if I may. My right hon. Friend the Member for Rotherham (Mr. MacShane) talked about a Cromwellian commission, and I understand his anxiety, which is shared across the House, that we might lurch from a system of inadequate regulation—which has exposed the reputation of the House and of the vast majority of honourable and honest Members to being besmirched—to the other extreme of over-regulation. Parenthetically, may I add that my right hon. and learned Friend the Leader of the House and I also understand the concerns about the interpretation of the guidance on so-called second incomes?

May I say to my right hon. Friend the Member for Rotherham that the rules or code that the commissioner would be hoping to enforce could come into effect only by approval of the House on an affirmative vote? The authority will propose the rules or code, but clause 5(6) is absolutely explicit:

“The rules (or revision) do not come into effect until they are approved by a resolution of the House of Commons.”

My reading of that—in accordance with the ordinary procedures on affirmative resolutions—is that the House would have no power to amend. Indeed, once the rules were in place, I do not think that the House would have any power to revoke them.

It is certainly the case, as with any affirmative resolution, that the rules would be either accepted or rejected. However, there would be a process of consultation beforehand. I give notice to the House that, when we reach clause 5, I will accept amendments to subsection (4) to extend the list of those who have to be consulted. There will be an iterative process between the authority and the House. In any event, if 95 per cent. of the proposals are acceptable and 5 per cent. are not, it will be for the House to decide.

Once the rules are in place, who will be able to get rid of them? Will it be only IPSA, or will the House also be able to do so?

The right hon. and learned Gentleman raises an interesting point. Under the structure of the Bill at the moment, only IPSA could do so, but I will take the matter away. I had not thought of this before, but there might need to be provision in the Bill for the rules periodically to be reviewed and voted on by the House. I will take that matter away; it is an important point.

The hon. and learned Member for Harborough (Mr. Garnier) raised several points. We have talked about whether it would be possible to appoint people who are independent and capable of exercising authority over us when we ourselves make the appointments. I think that that is possible. The hon. and learned Gentleman was complimentary about the way in which my predecessors as Lord Chancellor and I have supervised the system of judicial appointments, and I think that we can achieve the appointments in question because we have experience of doing so. I must also tell him that the Executive’s fingerprints are nowhere to be found on the scheme proposed in the Bill. It is true that they were, in some of the earlier drafts, but we made sure that they were removed.

I shall turn to the very helpful points raised by the right hon. Member for North-West Hampshire (Sir George Young). Clause 11 was drafted in response to points that he made in the cross-party talks. If it is the wish of the House, we could double-hat the commissioner. One person could perform two sets of parallel functions. Once the House has approved the scheme and the Bill, I undertake to ensure that detailed consultations are entered into on how we might achieve that.

I acknowledge, in relation to the staff in the Fees Office and to the commissioner and the staff who will work alongside the commissioner, that we are dealing with individual human beings who have been doing the best job they can. Personally, I have very high regard for Mr. John Lyon, who worked with me as an official in the Home Office and in the Ministry of Justice before he came here.

Clause 8(6), which we will come to tomorrow, contains a provision for a protocol setting out the interrelationships between the authority, the commissioner, the Committee on Standards and Privileges and—in respect of criminal prosecutions—the Director of Public Prosecutions and the Metropolitan Police Commissioner. We have included the provision as a result of discussions in the cross-party group to ensure that there were clear dividing lines—in the best sense of the term—between the different functions.

Amendment made: 55, in schedule 2, page 18, line 15, leave out sub-paragraph (3).—(Mr. Heathcoat-Amory.)

Schedule 2, as amended, agreed to.

Schedule 3

Speaker’s Committee for the Independent Parliamentary Standards Authority

Question proposed, That the schedule be the Third schedule to the Bill.

I indicated in the previous debate that I would like to have a short debate on schedule 3. The composition of the Speaker’s Committee for IPSA is obviously a matter of some importance, because the committee will be consulted on a number of significant issues and policies. One is therefore entitled to look at its composition. Of course it will have among its members Mr. Speaker, which is a very good thing, but it will also have the Leader of the House of Commons. One has to recognise that the Leaders of the House of Commons are not infrequently extremely partisan. They used not to be, when I first came into the House, but increasingly, instead of being representatives of the House of Commons as they used to be, they have become very partisan.

I notice that there will be no ex officio members of the committee, other than my right hon. Friend the Member for North-West Hampshire (Sir George Young), who at the moment chairs the Committee on Standards and Privileges; I am pleased that that post has been recognised in this regard. I would like there to be a nominated representative from the other political parties. I see considerable merit in the shadow Leader of the House or the spokesman for the Liberal Democrats or another minority party being an ex officio member of the committee. In that way, one could be reasonably sure that the views of the House would be fairly represented in the committee.

It is true that paragraph 1(d) provides for

“five members of the House of Commons who are not Ministers”

to be among the membership, but, as I have repeatedly pointed out, the Whips often control the votes. The Executive, through their Whips, could thus fashion the composition of the committee. I do not want that. I do not trust the Executive. Over the past 12 years, we have seen the power of the Executive over this House increase, and right hon. and hon. Members should do their utmost to prevent any more erosion. This is part of the process. When the composition of the committee is considered further in another place, serious thought should be given to the appointment of Members who represent other parties, who should sit on the committee by right. In that way, the Executive would not be able to fashion the committee through the Whips Office, because that would be an erosion of parliamentary sovereignty.

It might help if I explain the basis on which we propose the Speaker’s Committee. We took into consideration the parallel experience of the Speaker’s Committee on the Electoral Commission. I have served on that committee—as Leader of the House, I think, and certainly as Justice Secretary.

I understand the anxiety of the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) about these committees being taken over by the Executive, but the Speaker’s Committee on the Electoral Commission is chaired by the hon. Member for Gosport (Sir Peter Viggers) and is operated on a very collaborative basis. If we are talking about a Public Bill Committee on a contentious piece of legislation, then, yes, of course the Whips will influence the Committee of Selection, but for this kind of Committee, the individuals selected to serve on it do so because of their commitment to this House and, in this case, to the Electoral Commission—and it has worked extremely well. I have no reason to think that that should not also be the case here.

I do not accept what the right hon. and learned Gentleman says about Leaders of the House, and I am not just speaking for myself, but for other Leaders of the House. As I have witnessed, they have stood up for the interests of the House not just here, but inside Government—repeatedly and assiduously—as well.

We are always open to suggestions for improvement, but paragraph 1 of schedule 3 provides that of eight members, only one can be a Minister of the Crown—it would be the Leader of the House. I will give further consideration to the right hon. and learned Gentleman’s suggestion to have some requirement to ensure a balance between the parties.

Question put and agreed to.

Schedule 3 agreed to.

Clause 2

MPs’ salaries

I beg to move amendment 69, page 1, line 17, at end add ‘of 3 July 2008.’

The amendment would take further the implementation of the recommendations of Sir John Baker. It would remove the requirement for the House to pass further resolutions in order to amend MPs’ pay, which would become entirely a matter of statute. Although it incorporates the resolutions passed on 3 July 2008, I am advised that it involves no issues of retrospection. It retains the flexibility built into the Baker recommendations of a review by the Senior Salaries Review Board at the start of each Parliament.

My reason for tabling the amendment is clear enough. Along with allowances, the pay of MPs has been a source of enormous controversy almost every time the House has considered it. To the public, it looks like MPs voting themselves a pay rise from taxpayers’ pockets; it looks like trotters in the trough. There is always a pressing reason, too, for the Government to wish to vary an SSRB recommendation, which can cause even more controversy and require even bigger adjustments to be made later.

That was partly why Sir John Baker was given the task of devising a system

“to make recommendations for a mechanism for independently determining the pay and pensions of MPs which does not involve MPs voting on their own pay”.

His report recommended annual uprating in line with public sector average earnings, with a review by the SSRB each Parliament, but that still left the difficulty of the need for a resolution of the House and the scope for Parliament to vary its conclusions in it.

The intention of the provision is to remove that scope. In doing so, it seeks to fulfil the policy objective of the democracy task force, chaired by my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), in which my right hon. Friend the Member for North-West Hampshire (Sir George Young) was also involved, which concluded that pay awards should be placed in the hands of an independent body by statute.

It is curious—it can be a product only of the undue haste that comes when a Government convince themselves that they need what they have described as “emergency legislation”—that the Bill does not already contain a provision of this type. It is particularly odd that clause 2 perpetuates the setting of pay by resolution, when it has so manifestly caused so much difficulty for everybody in the past.

Even so, it is not primarily to avoid controversy that I feel that the amendment is necessary. It is necessary primarily because, as I suggested a few moments ago, the current arrangements are still wrong in principle: nobody should set their own pay—not even MPs, and the public might say especially MPs. I think that the public are right about that. Other democracies have addressed this issue and mostly have put it right by removing the right of MPs, or their elected representatives, to set their own pay. An appendix to the Baker review sets out a wide range of other countries that have taken steps similar to what I am suggesting today.

Neither does the amendment represent an effort to secure increases in pay by the back door. I am not a supporter of a sharp pay adjustment for MPs; I think that there is a vocational element to the job, which should be reflected in the pay that we receive. If one takes that view, however, it also means that the full costs borne by MPs in the performance of their duties should be met by allowances, however unpopular that may be to the public. That is why Sir Christopher Kelly’s investigation will be so important and why the way in which he presents his report, however difficult, will be crucial for the future of the allowances system.

This is emergency legislation and it, including the amendment, will need to be reviewed. I think that that will be best done by a sunset clause, which I have not yet had an opportunity to table, but I hope will be tabled in the other place—[Interruption.] I am pleased to hear that a sunset clause has been tabled by my colleagues. The arrangements in my small amendment would be able to be reviewed on that basis, prior to the expiry of the sunset clause.

I believe that a review will eventually be needed for a number of reasons. I have already alluded to the first—that the amendment will need to be considered in the light of Sir Christopher Kelly’s recommendations. Secondly, the weighted index built into the Baker proposal may, for some unforeseen reason, become distorted. That has happened in the past, which has required making changes to indexation.

Thirdly, pensions are not fully dealt with by Sir John Baker, on his own admission, and we would be incorporating what he has said on pensions. As it happens, I have long favoured an end to the final salary scheme for MPs, starting with new entrants, and its replacement by a defined contribution scheme. In view of what is happening in the private sector right across the country, I believe that that is the only way forward.

Fourthly, I am not absolutely sure that the indexation scheme being proposed by Sir John Baker as the basis for law by resolution is necessarily the best one. I would have favoured UK average earnings rather than public sector earnings as the basis, which would include the private sector. With a linkage to public sector earnings, it could be argued that MPs would receive disproportionate protection in a downswing, as now. Vice versa, of course, we would benefit disproportionately when UK Inc. is doing particularly well. These are all issues to which we can return when the sunset clause, which I hope is built into the Bill, takes effect.

My final reason for suggesting an eventual review is that even if this amendment were made, there would still be some discretion left to Parliament through the vote on estimates. The only technical way of removing pay completely from the grasp of the House of Commons would be to pay MPs from the Consolidated Fund in the same way as the Speaker or judges, for example, are paid. The Government would then be unable to control the remuneration through votes on estimates, but that is a bigger issue and is not for now; it can be clarified as part of a later review.

In the meantime, the amendment will do at least something to restore public trust by removing the opportunity for MPs to vote on their pay, which is, along with allowances, one of the big issues that have triggered a sense of loss of trust between MPs and the people who put us here. The amendment would ensure that pay is dealt with in accordance with the spirit of Sir John’s recommendations and with the intentions of the Government as set out yesterday, with those of the democracy task force, on which I served, and also with the wishes of my own Front-Bench team. I very much hope that the Government will feel able to support the amendment.

I commend my hon. Friend the Member for Chichester (Mr. Tyrie) on tabling the amendment. It has considerable merit, being both ingenious and uncontentious. It contains a lot of sense and I hope that the Government will see fit to accept it.

The purpose of the Bill is to set up an independent Fees Office designed to administer and set allowances. In its current proposed form, it is designed to administer—that is to say, pay—salaries. In the long term, we want to ensure that everything that is paid to Members of Parliament, be it pensions, salary or allowances, is determined by an outside body rather than by ourselves. As the Bill stands, it goes only some way towards doing that, but the amendment would take us a marginal step further in the direction of having an outside body determine our salary. Crucially—and sensibly, at this awkward time—as well as removing Members from the process, it would prevent the Executive from inevitably attempting to intervene to reject the recommendation of the SSRB or to amend it. As such, it would introduce a measure of automaticity into the way in which our pay is adjusted and prevent the contentious political shenanigans that bedevil this issue.

The two resolutions in question are the one that was passed on 3 July last year and the accompanying money resolution. The amendment would entrench the adjudication of any increases that follow. It would link our pay to a package of comparators, including public service workers—in the NHS, school teachers, the armed forces and the civil service, including HMRC—and it would also introduce an annual review. In making that link, it would not only remove many of the contentious arguments about how much we should be paid, but prevent the political intervention that normally follows.

We should be realistic and accept that the regime set up by the amendment would be an interim measure. The Bill does not allow for the external assessment and setting of our pay, so the amendment would be in place until the primary legislation was amended. If in future we were to bolt on to this Bill a broader responsibility to consider the entire pay and rations of Members of Parliament, and potentially Ministers, this interim regime would be replaced by giving IPSA responsibility for setting our pay, allowances and pension.

The amendment would set up an effective, depoliticising and interim regime that would do much to improve the basis on which our pay is set, and as such it is entirely in the spirit of the Bill. I urge the Committee to support the amendment.

My hon. Friend the Member for Rutland and Melton (Alan Duncan) used the word “automaticity” about our pay: I take an entirely different view, of course. It has been a historic function of a self-governing Parliament to set its own pay and be responsible and accountable to those who send us here. I remember the voices of Enoch Powell and Michael Foot arguing that very point: what we do will ultimately always be judged by the electorate. We should not have some independent outside authority setting our pay.

We have had many comparators over the year, and we know who they are. It is true that the Government, in the exigencies of the economic situation, say that it is not an appropriate time to increase pay, but in my mixed constituency—it is not a wealthy one—the amount that we currently receive is not greatly challenged. The whole point of the Bill is to address those issues that are seriously challenged—the construction of an expenses system that was beyond the understanding of most of us who have been here for 30 years. We had no idea that furniture could be bought—that had been added on to the system.

The amendment would turn away from something very fundamental to the purpose of this House. We are the central authority and the representatives of the people. That is why we have the concept of the sovereignty of Parliament. In all my years here, I have argued that the sovereignty of Parliament is a shorthand for the sovereignty of the people. We have become some sort of sleek agency that outsources and has specialists coming in to tell us what is appropriate. At the end of the day, the House can still vote down all the recommendations that are put to it. If it does so at the behest of the Government Whips, that is a matter of judgment.

My hon. Friend the Member for North Essex (Mr. Jenkin) yesterday made reference to the American system, which experiences the same difficulties. In the US, they have an even greater impediment than we do. As I understand it, the salaries of federal employees cannot be greater than those of the elected representatives. If we put our salaries up to £120,000, we would fear a revolt in the homelands, because people would think that that was excessive. We tend, therefore, to be very timorous, and that is the dilemma that elected members in the US faced. They could not hire people to work in the federal service because they had so suppressed their own wages. That happened under Reagan, and eventually something had to be done about the representatives’ salaries. After investigation and adjudication, they came to the conclusion that they should not set the rate for themselves, but set it at the end of a session. So in this country we would set the rate at the end of a Parliament not for the existing Members, but for those who form the next Parliament. Some of those who set that pay would stand at the election, and would therefore face the critical judgment of the electors as to whether the rate was excessive.

We should not be swept away by fads or crazes, or set every quango in existence over us. We are representative of something far greater than ourselves. This is Parliament. It is 800 years old. It came about because we were trying to restrain the authority of the monarch. Now we want to make this place subservient again. It is suggested that we would be better validated if a quango authorised our affairs. No: we should take the responsibility. We should face our electorate, and I suggest that it should be done at the end of a Parliament in order to benefit the next Parliament. That is why there is not universal consensus on my hon. Friend’s proposal. The automat—I cannot even say it; it sounds like a launderette—the automaticity is ghastly.

As a Front Bencher, I am now not sure whether I want to speak after all.

The hon. Member for Aldridge-Brownhills (Mr. Shepherd) gave a passionate exposition of the sovereignty of Parliament, but nothing in the amendment alters that. Given that Parliament can pass statute, the statute that we are attempting to pass tonight can be revisited by Parliament at any time, and given that we have that sovereignty, we can decide that it is in the current interests of Parliament and the body politic for the judgment to be passed to an external authority to be implemented by that external authority. We are perfectly entitled to make that decision and, because we have sovereignty, to do it in the way that has been proposed.

I believe that the amendment builds on the public trust that is being sought through the creation of an agency to deal with our expenses and allowances, and given that salaries are so intertwined with expenses and allowances, it seems to me to be an important step forward. The hon. Member for Chichester (Mr. Tyrie) pointed out that there would subsequently be a sunset clause debate, which means that it will be possible to revisit any imperfections in any of the legislation that is being rushed through now if the Government accept the sunset clause. However, I think that at this stage we should focus on the financial aspects of the Bill, and that the Government should respond positively to the amendment.

I was impressed, to a degree, by some of the arguments presented by the hon. Member for Chichester (Mr. Tyrie), but I am not fully persuaded that we should tie the reference in clause 2(1) to a single set of resolutions of the House. After all, a number of Members who seem to support the amendment said earlier that part of their problem with the Bill was that it would pre-empt the Kelly review. Many said that Kelly would examine issues much wider than the issue of the allowances scheme. It is true that some of the questions that Kelly has asked and some of the answers that have been submitted touch on considerations relating to such matters as salaries, and on how there might be a recalibration between the two.

May I point out to the hon. Gentleman that pay is specifically excluded from the terms of reference set by Sir Christopher Kelly for his review?

Pay, in terms of salary, is excluded, but treatment of some of the issues is not. We need only examine some of the submissions to Kelly to see that there have been suggestions that the way in which some matters are treated should be recalibrated, whether they are treated as being presumed to have been built into and covered by salaries or by allowances. For instance, a number of the submissions have touched on whether there should be a subsistence allowance. Some people say that salaries should be reviewed to ensure that such costs are taken fully into account. Some have even suggested that second homes should be presumed to be covered by salaries rather than allowances, and that salaries should be reviewed accordingly.

If, as some have said, Kelly should be allowed to return to look at the whole picture, we cannot have it both ways. We cannot say that we cannot tie ourselves or Kelly in the Bill. My fear is that, while the amendment might not tie Kelly, it might tie us in the future, and that we may be freer without it.

May I respectfully point out that even if Sir Christopher Kelly and his committee made recommendations about salaries, the Bill in its present form would not give IPSA the power to do anything about them? The amendment would provide an anchor, or foundation, for the salary issue, on which Sir Christopher Kelly’s recommendations on allowances could fit, along with the recommendations of the Senior Salaries Review Body. If we needed to do anything about salaries in the future, there would need to be an amendment to this primary legislation in any event, which could amend my hon. Friend’s proposal and do something about salaries at the same time.

But that would mean our agreeing that the legislation was purely temporary. I know that some have favoured a sunset clause elsewhere in the Bill, but I do not think it necessary for us to be confined in this part to a single day’s resolutions rather than being covered by

“relevant resolutions of the House”.

We could automatically create a situation in which we would be required to re-legislate in circumstances in which we could pass future resolutions that could take care of themselves in a fairly mature way without having to amend the Bill. One of the aims of the amendment is to make us revisit the legislation by way of more amendments than I think would be appropriate. If we are saying that we want, by virtue of the Bill and other measures, to reach a point at which we no longer spend so much time determining, deciding, debating and legislating in respect of our own salaries, why table an amendment that forces us to legislate again on the very issue of pay?

My hon. Friend the Member for Foyle (Mark Durkan) has already put very well the point that I want to make. We should not pre-empt the Kelly review, we should not tie the issue of pay to a single set of resolutions of the House, and we should not agree to what we see as temporary legislation in circumstances in which we can forge for the future.

The Minister seems to be ignorant of the fact that pay is not part of the Kelly review. Also, she seems to have forgotten that her own Secretary of State has described this as emergency legislation, which by definition is generally considered to be temporary and something to which we return in due course.

I can tell the hon. Gentleman at the outset that we will not be accepting his amendment.

The amendment limits IPSA’s power to pay Members’ salaries set in accordance with the resolutions passed by the House last July, which set out the formula whereby the SSRB was to calculate the annual change in our salaries. That would mean that if in the coming months we decided to adopt new resolutions—which, given what has been said in the debate on the amendment, we may find ourselves doing—or a new way of calculating Members’ salaries, IPSA would have to cease to be the payment authority. My hon. Friend the Member for Foyle made that point. As a result, it would be necessary to pass new legislation—for which some Members seem to be setting us up—to enable IPSA to pay salaries under the new regime, or to set up a new payment system within the House. That is a complicated set of options, and by that point the House might no longer have access to funds with which to make the payments.

If Members propose to ensure that the House does not seek to resile from the resolution of last July allowing our salaries to be set automatically—and there has been much discussion of the automatic nature of the current mechanism—I suggest that it would not have that effect. The amendment would not bind the House; it would only bind IPSA. It would lead to chaos and confusion—which, of course, may be the intention in some cases—if the House ever were to change its arrangements, and I urge the hon. Member for Chichester (Mr. Tyrie) to withdraw the amendment.

Clause 2 ordered to stand part of the Bill.

Clause 3

MPs’ allowances scheme

I beg to move amendment 68, page 2, line 11, at end insert—

‘( ) the Committee on Standards in Public life’.

With this it will be convenient to discuss the following:

Amendment 26, page 2, line 14, at end insert—

‘(ca) members of the House of Commons.’.

Amendment 71, page 2, line 15, at end insert—

‘(da) HM Revenue and Customs,’.

New clause 10—Taxation etc

‘(1) In administering House of Commons salaries the IPSA will make arrangements for the deduction and payment of income tax and national insurance contributions and provide Members with relevant details for return purposes.

(2) In the context of administering the Members of Parliament’s allowances scheme the IPSA will engage with HMRC on the appropriate tax treatment of property, items or benefits funded or part-funded by the allowances scheme and shall provide members with appropriate details for submission in their tax returns.

(3) The IPSA shall provide general guidance to Members on relevant principles and considerations of due parliamentary standards to be reflected in the preparation and submission of their tax returns, in particular as they relate to property, items or benefits funded or part-funded by the Members of Parliament’s allowances scheme and such other costs as may be presented as work-related expenses in connection with their role as a Member of Parliament.

(4) The IPSA shall consult with HMRC in preparing and revising the guidance referred to in subsection (3).

This relatively small amendment is significant, because it would add the Committee on Standards in Public Life to the list of people and bodies that IPSA would have a statutory duty to consult when preparing or revising the MPs’ allowances scheme.

I find it astonishing that the Government could have drawn up a long and apparently comprehensive list of people to consult, which includes the Leader of the House, the Speaker, any Committee of the House of Commons, the Senior Salaries Review Body and the Treasury, yet succeeded in excluding the one body and the one person to have been specifically charged by the Prime Minister with examining the issue.

The revision of the scheme may well be necessary in the light of the recommendations of Sir Christopher Kelly. It is simply not true to say that his group is looking just at the content of the allowances, as the Secretary of State suggested earlier today—I believe he did so yesterday too. The group is not engaged in a study with the intention merely of making recommendations that can be slotted into the Bill afterwards; it is looking widely at allowances, including the structure of allowances and the compliance structure that lies behind them, as I found out when I gave oral evidence to it the week before last.

The absence of any reference to the Committee on Standards in Public Life in this clause—indeed, there is almost no reference to it in the entire Bill—raises the possibility that IPSA could, although I do not think that it would, ignore Sir Christopher’s recommendations. We could find ourselves in the crazy position where all the parties are falling over themselves to say that they agree with his recommendations, but because of how the Bill is drafted IPSA could then completely ignore the political parties and those recommendations, and do something completely different. I am confident that nothing in the Bill would prevent such a situation—even my amendment would not. However, my amendment would at least require IPSA to consult Sir Christopher Kelly before coming to its conclusions, which is why it is an essential minimum that we should add to this Bill in order to ensure that his recommendations are given proper consideration. I very much hope that the Government will be able to agree to the amendment.

I welcome the amendment tabled by my hon. Friend, because it is entirely sensible. The Government will also see that Conservative Members have tabled amendment 26, which would provide that Members of Parliament should be consulted too. Given our number, it would be perfectly feasible for that to happen without any difficulty. A letter could go out to every Member and they could then make the relevant representations. It is not adequate that representations should simply be made by the intermediary of one or two Committees. I very much hope that the Minister will be able to respond positively to our proposal too.

I note that other proposals have been tabled to provide for the consultation of other bodies. The hon. Member for Foyle (Mark Durkan) has made those proposals. I am less certain that it is necessary to consult Her Majesty’s Revenue and Customs, but he will doubtless be able to speak for himself on that, and I shall also leave him to discuss his new clause.

Obviously, I rise to speak to amendment 71 and new clause 10, which are tabled in my name. I begin by noting and accepting the strong case that has been made for amendment 68. The House would reject it at the risk of creating a very serious misunderstanding and misapprehension. If we were not to include the Committee on Standards in Public Life in this statutory consultation list at a time when that Committee is carrying out work on this issue and is conducting hearings—indeed, it is to take evidence in Belfast tomorrow—that would send out the signal that we were legislating in deliberate disregard of the important work of that Committee. I therefore believe that we would be wise to accept the sensible amendment tabled by the hon. Member for Chichester (Mr. Tyrie).

On amendment 26, I am less convinced about insisting on statutory consultation with all Members of Parliament, because that would take us back in another direction. Clearly, other interests who have responsibilities in this House and have regard to the needs, circumstances and rights of people in it are factored into this consultation, so I am unsure whether it needs to be extended to all Members.

On amendment 71, the reason I believe HMRC needs to be specifically included in the list is because the Treasury is included and it is, thus, easy for people to misunderstand things and believe that their only reason for consulting the Treasury might be to consider what the tax treatment implications would be of different allowances—either those that exist or new allowances that might be created in future. Obviously as Governments change the rules on the treatment of benefits in kind and various other work-related benefits and subsidies, issues will arise from time to time. Those matters are best addressed by the authority speaking directly to the independent professional people who are handling and interpreting those issues, namely Her Majesty’s Revenue and Customs. So, if the authority proposes significantly to change the allowance system, create some new allowances or insist that certain allowances should be available for particular purposes on the basis of particular entitlements, it is right that due consideration and due regard should be given in advance of any possible unforeseen tax implications. Similarly, as the tax rules change—as approved by this House and tabled by Government—it would be necessary from time to time for the authority to liaise with and talk to HMRC to see whether the changes affect how parliamentary allowances are treated. It seems to me to be sensible and proper that we should do that.

New clause 10 has been tabled because, at the minute, the Bill would have the new Independent Parliamentary Standards Authority see nothing, say nothing and consider nothing in relation to taxation and parliamentary standards. If we are saying that one reason that the Bill is necessary is the concern and consternation that has been raised by the recent revelations, we have to remember that that concern and consternation does not relate solely to the issue of allowances and expenses. It also relates, very substantially, to the whole question of MPs’ attitudes to tax returns.

The whole question of flipping, as it is called, is not just a matter of people using the designation of a property to draw down expenses in respect of one property and then to do so in respect of another. Flipping goes to the heart of the question of capital gains tax, and of people being able to avoid capital gains tax in a way that has scandalised some but that was obviously within the rules and was the approach that was advised by people in the Revenue at the time as well as by others.

I interrupt the hon. Gentleman because although I appreciate what he is trying to do—indeed, it might be the right thing to do—the difficulty is that, as I understand it, the Revenue might take a completely different view of matters from the morality view. It is indeed right that that might have got MPs into terrible trouble, and some MPs have repaid—or tried to repay—sums to the Revenue. I am not sure whether they have been able to do that successfully, unless they have improperly withheld tax. It does not seem to me to be the role of the Revenue to conform its rules to those that the House might wish to impose on its Members. I wonder whether this might create a bigger muddle than the one we have at present.

Nothing in new clause 10 imposes any duty on HMRC. It is not obliged to conform to anything. Amendment 71 would require consultation between the authority and HMRC so that it can draw up its schemes in the light of what HMRC has said will be the likely treatment of any benefits, or that will be the new treatment under new tax rules as they come in.

The purpose of each proposed subsection in new clause 10 is fairly straightforward. Proposed new subsection (1) will specifically ensure that we recognise that the authority will be handling the issue of salaries and that, in doing so, it will be making the deductions and payments for tax, national insurance and so on. That will avoid any doubt that we are talking about the authority’s having an overseeing role and that some of the pay functions will be held residually in the Fees Office or elsewhere. It is to make it clear that it is the total function—

I appreciate that point, and I hope that it would have to follow automatically that IPSA did that. However, in proposed new subsection (3), the hon. Gentleman wants IPSA to

“provide general guidance to Members on relevant principles and considerations of due parliamentary standards to be reflected in the preparation and submission of their tax returns, in particular as they relate to property, items or benefits funded or part-funded by the Members of Parliament’s allowances”.

That is where I think that a much greater difficulty arises. It seems to me to be turning IPSA into one’s accountant, and I am not sure that that is the right role to request of it. IPSA will be placed in a difficult situation when it comes to the question whether it is there to advise MPs on how they should best go about their taxation business to minimise tax or to advise them on the standards of morality that should apply to their tax returns. Those are two rather different things.

I think that the hon. and learned Gentleman may be persuaded that it is very clear that the latter would be the role of IPSA.

The hon. and learned Gentleman referred to proposed new subsection (3). I turn now to proposed new subsection (2). It provides for the fact that IPSA will engage with the Revenue commissioners on the tax treatment of property and benefits that are funded or part-funded by the allowances scheme. It will provide details to Members for the purpose of their tax returns, which is a follow-on and consequential amendment. Yes, we might have all assumed it, but in these circumstances, and as some people seemed to be suggesting earlier that the function in relation to the salary might not rest with IPSA, I believe that it is important to put proposed new subsections (1) and (2) on the face of the Bill for clarity. That would ensure, first, that IPSA would do the pay-as-you-earn and national insurance deductions and would pay them over, and, secondly, that Members would be provided with the basic tax information they needed for their salary and on any allowances they received.

On proposed new subsection (2), it seems to be good employment practice for someone who is providing allowances to ensure that the Member—or employee in any situation—is provided with accurate and effective information on which to make their tax return.

Yes, absolutely. Many Members have been criticised and challenged for the way in which they were relying on the obscurity of the system, the failures in administration, and so on. We need to be upfront and explicit so that we are clear where things lie in future.

In proposed new subsection (3), I am saying that, given that the authority’s role is in parliamentary standards, it should provide general guidance to Members. I am not saying that it should be responsible for the tax returns or for all kinds of advice, but that it should provide general guidance to Members on relevant principles and considerations of due parliamentary standards to be reflected in the preparation and submission of their tax returns

“in particular as they relate to property, items or benefits funded or part-funded by the Members of Parliament’s allowances.”

Such guidance should also be provided in relation to

“such other costs as may be presented as work-related expenses”—

in a tax return—

“in connection with their role as a Member of Parliament.”

I have included that provision because it has been revealed in recent times that a number of Members used their allowances, apparently wrongly, to get assistance and advice on tax returns that dealt with some of the particular requirements of being a Member of Parliament. Indeed, it seems that some people were passing around the cards of people who could give bespoke advice—whether they were qualified or not, I am not sure, but they were able to give bespoke advice on tax returns and so on. It seems to me that there is something missing when we do not have a source of general guidance available to us in that regard.

It is important that we should recognise that the authority is not just there to police and investigate what Members do, but to support us in our efforts to do the right thing by way of due parliamentary standards, and we should make it very clear that the authority will provide appropriate guidance to us on such matters. The situation changes from time to time, and Members can be caught offside because of rule changes that they do not appreciate—many such things have been referred to—and it is important to ensure that the authority’s role includes providing that guidance. To leave it with a “pounce and bounce” role towards any Member whenever it feels like it or when some member of the public feels like it seems to me to be odd.

We have to recognise that the taxation issue is a matter of concern. It will probably be the next big focal point. We know that there is a big issue about second jobs and the questions of what needs to be declared in relation to them, but taxation will be another big focal point and challenge. We need to make sure that the authority that we are setting up responds to the concerns and the sense of scandal that people feel. The public have an image of the House as being like a good ship “Lollipop” moored on the Thames, where we all do what we want and try to get what we can. It is important that people do not see us follow cleaning up the allowance system with cleaning up on the tax system, and they must not perceive that we have unclear rules and no clear guidance on tax. If we have complained about the lack of them in the past in relation to allowances—and Members have said that they were not aware of the sensitivities involved or the possibility that claims could be held to be improper or unsuitable—we must make it very clear that the authority has a duty to provide general guidance about tax.

This House is the only place that passes the law on taxation, including on capital gains tax. We cannot afford to be casual about whether we comply with the requirements of the tax law, or about whether those requirements go together with achieving good parliamentary standards, and that is why we should make sure that the appropriate provision is in the Bill. Yes, we are human: we know that tax laws and tax compliance can be difficult to understand and, even with the provision of general guidance, our tax returns would remain our own responsibility. We would also be responsible for the advice given by the professional advisers that we hire, but the authority’s guidance role should be made clear.

The need for guidance goes beyond the treatment of items funded, in full or in part, for the purposes of CGT or any other tax. We also need it for other items that might be claimed as work-related expenses. My accountant always asks why I do not claim such items, as he says that there must be plenty of things that I could claim as work-related expenses. I do not make such claims—I am sure that others do, and probably quite legitimately—but the next false dividing line used to determine which Members claim what will be taxation. We all need the protection of good advice and guidance that are given in the light of considered parliamentary standards.

There have been stories in the media recently about some of the exotic and expensive claims that have been refused by the Fees Office. There are questions about whether some of the claims presented in tax returns and approved as work-related expenses were reasonable. If significant curbs are placed on the allowances paid to Members in future, will that force them to consider claiming work-related expenses on their tax forms? Once again, questions will arise about the propriety and consistency of that approach.

If it is left to hon. Members to take their chances in that regard, or to go with whatever advice they have been given, it will occur to a person working in the tax office—just as it did to someone in the Fees Office—that the range of practices is very wide, and that all sorts of things are being tried on. That person will then take away a disc, and in a year or two a job will be done, like the one that we have just seen in The Daily Telegraph, on tax matters. If we reject the new clause, or if we do not make similar provision in the Bill, we will then rush to say, “Shock! Horror! We didn’t realise tax was also going to be an issue in relation to parliamentary standards”, even though we have been served absolute and due notice of that.

Proposed new subsection (4) of new clause 10 would merely ensure that, when IPSA is preparing the general guidance for Members, it would consult with Revenue and Customs so that the guidance was more reliable. It would also mean that Members under pressure in years to come can say that they relied on that guidance. As a result, they will be in a much stronger position than Members who said that they relied on advice from the Fees Office about what expenses claims would be approved.

I rise to support very strongly amendment 68, in the name of the hon. Member for Chichester (Mr. Tyrie). It would strengthen the Bill immensely, and it is entirely logical that the Government should accept it. If the body being set up is charged with undertaking the work that is proposed, we must make sure that it gets the best and widest possible advice and expertise. I hope that the Government will consider the amendment very carefully.

Amendment 26 is also sensible, in that clause 3 should of course contain some reference to Members of Parliament. It would not cause any embarrassment, as Members of Parliament would merely be consultees in a list of other consultees. They may well have something useful to contribute, so excluding them from the clause is a rather strange thing to do.

The proposal in amendment 71 that HMRC should also be consulted is also very sensible, although I am not so sure about new clause 10. Our tax affairs are somewhat complicated, and the fact that Members are neither self-employed nor employed means that we are a hybrid in tax terms, but all that is clearly understood by accountants, who are properly paid for the work that they do. If we are saying, “The Revenue is bound to tell us every single thing that we should or shouldn’t do,” why should that not be extended to every other profession and trade?

New clause 10 and its provisions for general guidance apply only to considerations and principles relevant to parliamentary standards. It does not propose guidance on how Members can maximise claims or minimise the tax payable. Members who want that must employ their own accountants. The new clause relates only to parliamentary standards, but there are parliamentary standards issues in relation to tax.

Of course there are, and we have seen a few over the past few weeks and months. I accept what the hon. Gentleman says, and I think that his amendment 71 is worthy of support. I am still considering new clause 10, but that is by the by.

These amendments are useful, and the debate on them, though short, has been useful too. I hope that the Government will take note of everything that has been said.

In a long and highly competitive field, this is by any stretch of the imagination a very foolish Bill. That is exemplified by clause 3, and I wish to support amendment 68, moved by my hon. Friend the Member for Chichester (Mr. Tyrie), on including the Committee on Standards in Public Life in the consultation process.

Sir Christopher Kelly is a mild-mannered and sensible man, but if I were him I would be outraged that I had not been consulted by the Government. He has already started his work, but to some extent that has been negated by the introduction of this very foolish Bill, which is designed purely to show that the Prime Minister is doing something. If I were Kelly, I would be extremely angry as well that the Bill had been introduced after I had started the inquiries that the Prime Minister had asked me to undertake. Amendment 68 is absolutely essential to the Bill, and I hope that the Minister will take what steps she can to see that it is included.

Incidentally, I believe that the Government tried to consult on this matter. I was present at two pre-legislative meetings that the Minister attended, at which it was clear that the Government were trying to accept amendments and arrive at a consensus. However, to exclude the Committee on Standards in Public Life from the provisions of clause 3 is insulting and—much worse—incredibly foolish.

I want to reinforce the point that the Government should accept amendment 68. Clearly, the Committee on Standards in Public Life is relevant to the proposals on allowances, and it seems blindingly obvious that it should be involved.

In relation to amendment 26, the hon. Member for Foyle (Mark Durkan) said that Members should not necessarily be consulted, but I disagree. All hon. Members are here to represent their constituents, but many have different and even unique needs in terms of the allowance system. It is important that that is reflected in the introduction of the system. The system should be independent, but it should be informed by the variety in the House.

Amendment 71 makes a lot of sense. It makes sense to consult the Revenue because there is an awful lot of interaction between expenses and allowance systems and the work of the Revenue.

Under new clause 10, the hon. Member for Foyle (Mark Durkan) is trying to deal with public concern about the tax treatment of Members. I suspect that the Revenue might not want to be tied into giving advice over and above that which it gives directly through the Revenue system, so I am not sure that new clause 10 will achieve the hon. Gentleman’s objectives.

My job is quite an easy one because we intend broadly to accept the amendments. We are discussing amendments to clause 3, which sets out the authority’s duties in setting the scheme for MPs’ allowances and lays an obligation on the authority to prepare a scheme, review it regularly and revise it as appropriate. The authority is obliged to consult a number of bodies about the scheme. That already includes the Leader of the House, the Speaker, any committee of the House nominated by the Speaker, the review body on senior salaries, the Treasury and others, but hon. Members have tabled some useful amendments in this short debate. I thank the hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith), the hon. and learned Member for Beaconsfield (Mr. Grieve)—the shadow Justice Secretary—and the hon. Members for Chichester (Mr. Tyrie), for Foyle (Mark Durkan), for Meirionnydd Nant Conwy (Mr. Llwyd) and for Mid-Sussex (Mr. Soames) for their contributions on amendments 68, 26 and 71, which we shall be happy to accept.

The Committee on Standards in Public Life was not included in the list of consultees. It may be necessary to consult it at the moment, but it may not be in the future. It may not be looking at matters that affect IPSA. However, the hon. Member for Chichester made a good case for including that body, and we are happy to accept amendment 68.

A number of points have been made about the need to consult Members of this House, and we are prepared to accept amendment 26. What we were seeking to do in not including hon. Members in the list was to avoid burdening the consultation process and making it too lengthy, but as hon. Members have just said, there are differences between Members. London Members are different from Members in other parts of the country in terms of, for instance, their staffing allowances. So there are issues to consult Members about, and we accept that point.

It is clear that matters relating to HM Revenue and Customs have been serious issues, as the hon. Member for Foyle said, and I am sure that it would be appropriate to consult HMRC, so we shall accept amendment 71.

We accept the principle that the hon. Member for Foyle has outlined in new clause 10, but we shall need to look at the drafting so, if it is acceptable to him, we shall do that and table a similar new clause later in the proceedings.

Once IPSA has drawn up the scheme, it will be laid before the House and it will reflect the amendments.

Amendments made: 68, in clause 3, page 2, line 11, at end insert—

‘( ) the Committee on Standards in Public life’. —(Mr. Tyrie.)

Amendment 26, page 2, line 14, at end insert—

‘(ca) members of the House of Commons.’.(Mr. Grieve.)

Amendment 71, page 2, line 15, at end insert—

‘(da) HM Revenue and Customs,’.(Mark Durkan)

Amendment 1, page 2, line 18, leave out ‘IPSA’ and insert ‘Speaker’.—(Sir George Young.)

I beg to move amendment 56, in clause 3, page 2, line 18, at end add

‘and shall not come into effect until they are approved by a resolution of the House of Commons.’.

With this it will be convenient to discuss amendment 57, page 2, line 19, leave out from ‘effect’ to end of line 20 and insert

‘only after the general election following the resolution of the House of Commons referred to in subsection (5).’.

The amendment provides that the House should approve the allowances system that has been prepared by IPSA. It brings this aspect of the clause into line with clause 5, whereby the scheme of financial interests, and the rules governing that will be approved by the House, having been recommended by IPSA. I believe that we should do the same for the allowances system.

Of course, allowances should be administered externally. That is generally agreed. The Fees Office is too close to us and if the Bill had been all about setting up an external body to administer, judge and enforce the expenses system, there would not have been very much controversy. However, I believe that the making of the rules, which are then handed over to the external body, should be decided ultimately by the House. We should not permanently transfer to an external body the making of the rules. Obviously, we would accept recommendations. Others would design the system, but the ultimate approval should remain here so that they become our rules and it is up to us to defend them, explain them and be elected on them. I do not believe that a sovereign body should permanently and irreversibly delegate these matters to an external body of whatever kind.

Of course we all know that reform is urgently required of the entire expenses system, and that is happening. The second purpose of my amendments is to rescue the Bill from a collision between what Sir Christopher Kelly and his committee are doing and what IPSA will do. Both are bringing forward proposals on expenses and allowances. There is a much bigger collision between the Kelly committee and the Bill. In the Bill, we are setting into statute matters that are being investigated by Sir Christopher and his committee. This was raised yesterday, and remarkably the Justice Secretary denied that there was any confusion or conflict here. He said when questioned by my hon. Friend the Member for Louth and Horncastle (Sir Peter Tapsell):

“Sir Christopher Kelly and his committee will come forward with proposals for the scheme of allowances, … However, that is about the content of the scheme. The Bill is about the operation of the scheme”.—[Official Report, 29 June 2009; Vol. 495, c. 50-51.]

I have to say that that is simply untrue, and the Prime Minister would agree. He made no distinction between the content and the operation of the scheme when he wrote to Sir Christopher Kelly on 23 March. He made it clear in his letter that Sir Christopher was not confined to going into and designing matters of content and detail about expenses. He wanted that Committee to look at everything. He said:

“I would welcome a review of MPs’ support and remuneration, including outside interests, carried out by the Committee on Standards in Public Life as it offers the opportunity to consider the full picture. For example, you will have greater freedom to consider issues such as the impact of MPs holding second jobs and their roles outside of Parliament.”

Is there not an inconsistency in logic here? On the one hand, we are saying that we should accept whatever IPSA imposes; on the other, the Government have been careful to say that they will not necessarily accept what Kelly proposes—in other words, we will be prepared for a little bit of pain, but perhaps not too much from an external source.

That is exactly the point that I am making. We may or may not accept the Kelly recommendations; we have discretion on that. However, under the terms of the Bill, we have to accept the scheme brought forward by IPSA. To conclude the point that I was making, in another letter, dated 30 March, the Prime Minister went on to repeat the point about the breadth of the Kelly inquiry:

“I am keen you should not feel bound in your discussions but free to consider a wide set of issues”.

The Government could not have been clearer. The Kelly inquiry is looking into everything, including the structure of the allowances and the content of the scheme, yet we are legislating for such a scheme in the Bill.

When pressed, the Justice Secretary conceded earlier today that future legislation might be required, so this is only an interim Bill. I think that he is already retreating from his earlier remarks, if I interpret his body language rightly, but they are on the record. He must concede that there is a conflict between setting up an inquiry into everything, as required by the Prime Minister, and prejudging that inquiry in a Bill that is being rushed through the House in a week. There is nothing that I can do to rescue the Government from that collision except try to throw the Bill out, which I tried to do yesterday by voting against it.

However, through my amendment 56, I could at least prevent the House from having to accept the scheme of allowances that IPSA will bring forward under clause 3. It is required, under the Bill, to bring forward a scheme of allowances, and we do not have any say on it; we have to accept it. Again, there is a conflict between the Kelly inquiry findings, which we may or may not accept, and the terms of the Bill, which require the House to accept the scheme that IPSA must present.

I believe that the House must have the last word on such matters. That is desirable both because we are a sovereign Parliament and must decide the rules and be accountable for them, and because, as I have explained, that would give us discretion if the Kelly inquiry brought forward rules and suggestions that were incompatible with those that we have to accept from IPSA, under the Bill as drafted. That is why I ask the Government to accept amendment 56.

My second amendment, 57, proposes that any scheme of allowances that is proposed, agreed and accepted by us should come into effect only after an election. As I mentioned yesterday on Second Reading, I borrowed the idea from the 27th amendment to the United States constitution. I will not weary the Committee with a long history of that amendment; it is a very long history. It took more than 200 years for that amendment finally to be ratified. It was first proposed in the 18th century. In essence, it prevents any change from being made to the pay and compensation of Senators and Representatives until after the next election. “Compensation” is the word used in the amendment to the constitution; it chiefly refers, I think, to salary, but its meaning could easily be extended to cover allowances and expenses. The amendment to the constitution requires that any such change should take effect only after the next intervening election.

I think that we could adopt a similar system here. It would counter the charge that we are setting our own pay and allowances. As I have explained, I believe that the House ought to set such matters. A sovereign body should not transfer those matters to any other body. Under my amendment, we would not set pay and allowances for this Parliament and for ourselves; the change would take effect only after an election—after the implied endorsement of the electorate.

I am grateful to my right hon. Friend for bringing amendments 56 and 57 before the House. I see his exact purpose in doing so. The difficulty that I perceive with amendment 56 brings us back to a debate that we had earlier on a fundamental issue—the extent to which we wish to set up an independent authority to regulate our allowances. If it is the desire of the Committee to have such an authority, so that it can distance itself from the decisions taken, amendment 56, while it would achieve the aim that my right hon. Friend desires, would effectively defeat the intention behind the legislation. It would turn IPSA into something very similar to the Fees Office, as it currently stands. That is a difficult issue.

All that I can say to my right hon. Friend is that I do not think that the sovereignty of Parliament is involved in the matter, because just as we have the power to set up the authority, which would be at one remove from us—we would have to accept what it came up with—if at a later date we decided that we wanted to get rid of it, we could do so through primary legislation, so the power remains with us. The question is: to what extent do we wish to interfere with its daily operation?

My right hon. Friend makes a powerful point when he highlights the fact that when Sir Christopher Kelly’s report comes out, there may be incompatibilities between it and the structure that we have set up. I have no idea who will be in government when that happens, so all that I can say to him is that if there are incompatibilities, we will have to have primary legislation to resolve them. It is quite apparent that we cannot have those incompatibilities. If they occur, the fault will be due to the way in which the Government approached the matter. On that, I agree entirely with my right hon. Friend.

Amendments 56 and 57 would insert a parliamentary filter into the setting of the allowances claim, and would delay the introduction of an allowances scheme by setting a scheme for a later Parliament, rather than for now. Both amendments are unacceptable to the Government. It is important, for the restoration of public trust, that we are seen not to set our own pay and allowances. As discussed earlier, we have decided that we will allow our main pay to be set automatically by reference to movement in public sector pay, and a review will be carried out once in each Parliament by the Senior Salaries Review Body. We will not set our pay. We must take the same hands-off approach to setting our allowances; we on the Labour Benches believe that that is the only thing that will satisfy public concern. I urge the Committee of the whole House to reject the amendments.

Amendment 56 negatived.

Clause 3, as amended, ordered to stand part of the Bill.

Clause 4

Dealing with claims under the scheme

I beg to move amendment 6, page 2, line 32, after ‘to’, insert ‘or on behalf of’.

The issue raised by the amendment is of a less constitutional nature than those raised by my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory) in the amendments that we have just discussed. Clause 4 states:

“No allowance is to be paid to a member of the House of Commons under the MPs’ allowances scheme unless a claim for the allowance has been made to the IPSA.”

I want to make sure that the facility that exists at present, whereby the allowances are not paid directly to a Member, but are paid on his behalf to a third party, can be carried through into the new regime. I was concerned that, as drafted, clause 4(1) did not allow that facility.

It is often convenient for Members to pass the invoice on to the Fees Office to be paid with the requisite authority, rather than to pay it themselves and claim it back. I hope that advantage can remain. Also, the audit trail—

I may be interrupting the right hon. Gentleman as he was about to make the point that with the Fees Office paying directly, there is much greater clarity about where the money has gone.

I am grateful to the hon. Gentleman. He anticipated the other point that I intended to make. The audit trail is much simpler if the money has gone straight from the Fees Office to the supplier, rather than along the more circuitous route via the Member’s bank account. No great oratory is needed to make the case. All I seek from the Government is an acceptance of the amendment or an assurance that the amendment is not necessary because that facility is possible under the Bill as drafted.

The experience of the past few months had taught us that some Members may need to take greater responsibility in future for the allowance claims made in their name. We want to be sure that, as the right hon. Member for North-West Hampshire (Sir George Young) outlined, existing arrangements to pay invoices or standing payments in respect of a Member are transferred to the new scheme. The amendment as drafted may raise some technical issues. We want to capture the point that payments are made for or in respect of a Member. If right hon. and hon. Members will allow, we will give the matter further consideration as the Bill progresses through Parliament and seek to capture the essence of the amendment.

The amendment tabled by my right hon. Friend the Member for North-West Hampshire (Sir George Young) is sensible. When our allowances were published, a constituent pointed out to me that the system by which we were submitting payments to the Fees Office was costing more money because direct debit arrangements would lead to savings. These are all issues that need to be examined. Given that we are required to provide value for money, and given also—I take the Minister’s point—that there should be proper scrutiny of what we are claiming for, cost savings could be achieved by direct debit mechanisms, with the money going straight from the Fees Office to the third party.

The Minister made a helpful reply. I accept the implied rebuke that my drafting is not perfect and that there is somebody somewhere else who thinks they can do a better job. It would be churlish to press the amendment against the undertaking given by the Minister, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Clause 5

MPs’ financial interests rules

I beg to move amendment 74, page 3, line 16, leave out subsections (1) and (2) and insert—

‘(1) The IPSA must prepare a code to be observed by members of the House of Commons, the content of which is provision made by virtue of subsections (7), (8) and (10).

(2) In this Act “the MPs’ code of conduct relating to financial interests” means the code prepared under this section as it is in effect for the time being.’.

With this it will be convenient to discuss the following: Government amendments 75 and 76.

Amendment 16, page 3, line 21, at end insert—

‘( ) the Speaker of the House of Commons’.

Amendment 27, page 3, line 23, at end insert—

‘(ba) members of the House of Commons.’.

Government amendments 77 to 79.

Amendment 28, page 3, line 29, at end insert

‘save that no member may be required to declare any specified information relating to any source of outside earned income which would place him in breach of a duty of a confidentiality laid upon him by any recognised profession.’.

Amendment 7, page 3, line 30, leave out subsection (8).

Government amendments 80 to 82.

Amendment 29, page 4, line 2, after ‘or’, insert ‘specified’.

Amendment 30, page 4, line 4, after ‘or’, insert ‘specified’.

Government amendments 88 to 91.

Government amendments 84 to 87.

Amendment 73, page 4, line 16, at end add—

‘(c) to payment as, and hours worked as, a Minister.’.

Clause stand part.

It may assist the Committee if, in addition to speaking to the Government amendments, I comment briefly on the other amendments.

Yesterday, to general approbation, I announced that the Government would withdraw clause 6. We should get an opportunity to do that later this evening. My right hon. and learned Friend the Leader of the House attached her name to amendment 83, standing in the names of right hon. and hon. Members on both sides. I also told the House that there would be certain consequential amendments, and these are they. Essentially, they replace the word “rules” with

“a code to be observed by members of the House”.

In amendment 74, proposed subsection (2) refers to the

“code of conduct relating to financial interests”.

Why are we doing that? The Committee could spend the whole evening on this, or no time at all. I recommend the latter. I am sure all Members have studied the code of conduct with great care. In addition to the fact that 33 pages are devoted exclusively to guidance on financial matters, a significant chunk of the code qua code in the earlier pages is also concerned with financial relationships. That will go into the scheme that IPSA would have the responsibility to prepare, but I repeat that it would be subject to decision by the House. Under clause 5(6) it could not come into effect unless it was approved by the House.

There was a suggestion not only from the Government Benches, but from the Leader of the Liberal Democrats, for example, that there should be a code. In so far as the public take a close interest in the matter, it makes sense for them to note that the code of conduct will not disappear when, as a House production, it becomes thinner. A large part of it will find its way into that proposed in clause 5.

I am not entirely persuaded by the soft-soaping of that change, which is rather fundamental. We are setting up financial rules and we have a code of conduct. I appreciate that the Government take the view that, at some point in the future, the commissioner might have some conjoined role covering not only standards and privileges, but the investigatory functions in the Bill. However, now does not seem to be the time to run the two together, because it would immediately raise the possibility of our current code of conduct becoming subject to IPSA’s remit. Indeed, the Secretary of State seemed at least to hint that a revised code could be produced which would wrap the whole thing up into one. The Bill, however, does not seem to authorise that; we would have to take further decisions. So, for the moment, why not keep the rules separate from the code? If there comes a time when we should join the two together, we can do so later.

I was not suggesting that the two codes would run together—far from it; I was suggesting that they would be split. The code that relates to the non-financial matters of the House would be pretty thin, and I therefore think it important that the public and Members be able to find that part of the code which is the vast bulk. It would comprise not only the guide to the rules relating to the conduct of Members, but the rules of conduct in the Members’ current code of conduct, wrapped up in a single word: “code”. That is all I am saying.

Is it not the case that we will continue to have the Members’ current code of conduct, albeit without paragraphs 14 and 16 and the financial bits, and then another code that, if the amendment is agreed to, will be called a “code”? There is a real risk of confusion, because there will be one code produced by the House, our current code of conduct, and another code produced by another body, covering matters that are tangential but not identical. Would it not be better to have just one code and to stick with what we had until this morning, which was the rest of it being just rules?

That is a choice for the Committee, but in my judgment, there are slightly more important issues to get on with. My view is that the amendment would be more sensible. We would have a code that was like the current code but

“a code of conduct relating to financial interests”,

as spelt out by proposed new subsection (2) in amendment 74. Like the current code, it would have rules and general guidance, too. It would be more than a code and more than the rules, just like the current code, and it would come before the House.

I should like some clarity from the Secretary of State. Why was the provision in clause 5 originally worded “financial…rules”?

This is a rose by any other name, but now it is called a

“code of conduct relating to financial interests”.

The measure amounts to the same thing; it depends what label one wishes to attach to it. It raises no issues of principle or privilege whatever. They are separate.

In the hope that we can speed on our way through the clause, I wonder whether my right hon. Friend recalls that, yesterday evening, Government Members insisted that it was totally proper that we declare in detail our earnings from other interests, but that we thought unworkable the proposals that we account for the amount of time spent in acquiring those earnings. Has he had further thoughts on that in relation to this clause?

Yes, I have, but it may assist the Committee if I go through the other amendments in this group in the order in which they happen to be on my sheet.

On amendment 16, which my hon. Friend the Member for Middlesbrough (Sir Stuart Bell) tabled, I shall listen carefully to what he has to say before coming to a view. Amendment 27, from the Opposition Front-Bench team, would require IPSA to consult Members when preparing and revising Members’ financial interests, and we will of course accept that.

Amendment 28 proposes that

“no member may be required to declare any specified information relating to any source of outside earned income which would place him in breach of a duty of a confidentiality”,

and amendment 7 would leave out subsection (8), which is quite a detailed subsection. I want to listen to the debate on those two amendments, but I say to all parts of the Committee that I accept that the drafting of subsection (8) is potentially too onerous and restrictive of Members. I do not mean that it is too narrow; it may be too wide. However, parliamentary counsel are already looking at whether its basic purpose can be captured in far less onerous language.

I think that there is general agreement that any scheme for the registration of interests should be backed by arrangements whereby interests have to be declared. Part 6 of the code of conduct, “Registration and Declaration of Interests”, says:

“Members shall fulfil conscientiously the requirements of the House in respect of…registration…and shall always draw attention to any relevant interest in any proceeding of the House or its Committees”.

Paragraph 77 gives further guidance on how declarations of interest should be made, saying that it should be done “briefly”. I think that we all accept that. I certainly accept that, as the hon. Member for Rutland and Melton (Alan Duncan) said, we are now in the age of Google. Ten years ago, before Google, someone who wanted to find out whether a Member had a declarable interest had to go to the Library or to a public library—there was no other way of accessing that information. These days everybody can do it, even from a mobile telephone. The fact that the consequences of registration are so ubiquitous should mean that the need for declaration is less onerous.

At the same time, there must be some provision for declaring an interest; otherwise, we would get into some extraordinary situations. Somebody may, perfectly properly, be an adviser to a particular company and wish to say something—not paid advocacy—in a debate. For example, an adviser to or a director of a defence company may have an interest in speaking generally in a defence debate. There is no reason why they should not do so, but it is important that that is drawn to the House’s attention and that of the Member’s constituents.

The Justice Secretary has made some important and practical points. However, what astonishes me is that we are faced with a specific, detailed provision, presumably drawn up by lawyers in consultation with Ministers, and it looks as though—I welcome this—it is about to fall at the first fence. Why on earth was it introduced in this fashion if the Justice Secretary now accepts that it is a complete load of nonsense? Can he give us some idea of how he expects us to have to deal with this? At the moment we simply say, “I refer to my entry in the Register of Members’ Interests”, that reminds the House that the right hon. or hon. Member has an interest, and if anybody wants to look it up, they can do so.

Even in Bills that are not brought in with this speed, sometimes Homer nods and they need refreshment—the language needs to be improved—as one proceeds. That is the purpose of proper scrutiny. There is not a single Bill in which I have been involved in the past 12 years—it is a huge pile now—that has not been improved by the process of scrutiny. Sometimes, as a result of amendments being tabled, one discovers things that should be improved. I plead guilty to that.

I am in a great dilemma. Today the current rules come to an end. As from tomorrow, we are supposed to declare all these timings and things, which were so brilliantly exposed as odd by the right hon. Member for Birkenhead (Mr. Field) in his speech yesterday; I supported him in the course of my own speech. We now have proposals before us that the Secretary of State accepts are imperfect; I infer from what he says that he wishes to see them altered. The other problem is that Sir Christopher Kelly was specifically asked by the Prime Minister to look at the whole issue and to report on it. We really are in an awful, confused mess. As I have said before, we want clarity, so can we please have some advice from the Justice Secretary? Will the rules that are supposed to come into force tomorrow come into force? How are we affected by what he is saying tonight? Can he give an undertaking that whatever he says tonight will take second place to what Sir Christopher says if he makes different recommendations?

The rules that are due to come into force tomorrow will come into force tomorrow, and that has nothing whatever to do with the Bill. Everybody knows that to be the case, because the decision about that preceded the Bill’s publication. Those rules will stay in force until they are changed by the House in the normal way.

I have sought to answer the hon. Gentleman’s point about recommendations from Sir Christopher Kelly, but the Bill—even the rather onerous clause 5(8), and clause 5(9), which is linked to it—simply provides a framework into which his recommendations, as accepted, would drop. There is no problem with that, although for belt-and-braces reasons I have spelled out what would happen if there were a problem, so we need not go down that track again now.

May I bring my right hon. Friend back to the matter of timing? He is correct to say that we approved the rules that are coming into force tomorrow, but when we did so we were given four resolutions that we had to accept or reject in their entirety. One of the four stated that we should declare our earnings, which I am totally in favour of, but it also stated that we should declare how much time we spent on them. Like a lot of people, I did not want to be in the position of seeming to be against declaring our earnings, so we voted it through knowing the time factor involved.

From tomorrow, I will not and cannot fulfil the conditions of the House, because of the principles and practicalities that I outlined yesterday. I shall be fined, but I shall not pay the fine, so we will then be in this ludicrous business of going to prison. Surely that cannot have been the aim.

I have known my right hon. Friend for more than 30 years, and when we were both traipsing around in the rain at a shack on the gyratory system in Brixton, waiting to be interviewed by the Effra ward of the Vauxhall constituency Labour party in 1976—

We were indeed, and never was there salvation more quickly delivered. It struck me then that my right hon. Friend was possessed of many great talents but had a wish to end up on the stake or subject to some other form of martyrdom. Attractive though I know the stake or the gallows are to him, the prospect of his proceeding in that way and being fined by the new body is out of the question.

And on that point, four hon. Members stand up. I give way to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd).

May I take the right hon. Gentleman back to the incisive question asked by the right hon. Member for North-West Hampshire (Sir George Young)? He dissected the current code of conduct and said that at some point the non-financial aspects of it would probably be hived off to the new body. Some of us were quite happy to hear that clause 6 would disappear from the Bill, but it is actually a great concern because that clause stated that the code of conduct would continue as per the Nolan principles. The deletion of clause 6 will in fact make it easier for all conduct issues to be taken into the new body.

I assure the hon. Gentleman that there is no question of responsibility for non-financial conduct matters going to the new authority. That will not be part of its functions. We discussed the matter at some length downstairs in the cross-party talks. It would be outwith its functions and experience, and it would be completely inappropriate for wider issues of conduct to be subject to scrutiny or determination other than by the House. The Government oppose that; I oppose it; it is not in the Bill and we are proceeding on that basis.

I have a growing anxiety as I listen to the Secretary of State and watch his body language as he explains the provisions. Changing “rules” to “code” emphasises that the measures we passed a few weeks ago and that several hon. Members regard as completely flawed—I shall explain the reasons for that when I speak to my amendments—will, the moment the Bill is on the statute book, be subject to all the pains and penalties, including criminal offences in so far as they refer to financial matters, in clause 9. Should we not concentrate on that? On the one hand, the Government tell us that they have abandoned the conduct provisions in clause 6—to which we all say, “Hooray”—but on the other, and with some slight sideways movement, the Secretary of State attempts to lull us into accepting an unsatisfactory state of affairs, with potentially catastrophic consequences for individual Members.

I do not accept that. We can have a debate about whether we use “code relating to financial interests” or “rules”. It amounts to the same thing. What is in the tin is the same.

Is the Secretary of State saying that introducing a new set of financial rules tomorrow could be followed by their substantial amendment when Kelly reports, and that that could be followed by further substantial amendment when the new authority is set up and opines that it has got it all wrong? Is that not simply too difficult and complicated for people who try to follow what we do?

I am genuinely unaware of whether Sir Christopher Kelly is concerning himself with rules or codes about declarations of interest. I do not think that he is. He may be, but—

I have not said so. I am open to correction—I have not given evidence to Sir Christopher Kelly’s committee, but he appears to be concentrating on the whole system of allowances and expenses. If he were to say that there should be some change in categories of registration and declaration, the House would have to take that on board, but it is not relevant to the Bill.

I say to the right hon. Member for Wokingham (Mr. Redwood) that, in due course—it will be quite some time—the authority may decide to propose different sets of rules in its code for registration and declaration. It may propose some that would give my right hon. Friend the Member for Birkenhead (Mr. Field) greater comfort than paragraph 24 of the Green Book about declarations of hours. However, that is further down the track. I offer the right hon. Member for Wokingham the comfort that, if the authority made such a proposition, it could come into force only if and when it was approved by affirmative resolution.

I want to try a question on the Secretary of State that has nothing to do with Kelly or with the words “code” or “rules”, but is pertinent to what he says. As he knows and as colleagues have said, the new rules that require Members to declare how many hours they work outside this place come into effect tomorrow. According to clause 5, a series of rules will be established. Subsection (6) provides that they will not come into effect until they are approved by a resolution of the House. If the clause goes on to the statute book, is it the case that from that point the rules that come into effect tomorrow will be null and void until the House passes a resolution on the new rules? The Deputy Leader of the House is shaking her head.

No, it is not. The rules will come into force and, despite what the hon. and learned Member for Beaconsfield has said—that at the moment a breach of the code would not give rise to a criminal offence—it is certainly the case that, because a failure to comply with the requirement in the financial interest rules code will give rise to an offence under clauses 9(2) and (3), that requirement will have to be very carefully drafted. Indeed, it will have to be more carefully drafted than what is currently in the code.

This is not supposed to be a debate about paragraph 24 of the current code of conduct, but I just want to make one point. There are 168 hours in a week—that is not a matter for argument across the Chamber; it is just true. I merely offer hon. Members who are worried and their constituents this reflection. The European working time directive, whether one likes it or not—some do, some do not—prescribes 48 hours as the standard maximum that one is supposed to work in one job. [Laughter.] Hang on. If colleagues are sleeping normally—eight hours a day—that will them give them 56 hours. Adding those two together gives 104 hours. If we take that away from 168 hours we get 64 hours, which gives hon. Members nine hours a day, more or less, to do what they want with and still fulfil their constituency duties. [Interruption.] I am merely trying to be helpful.

I agree with my right hon. Friend the Member for North-West Hampshire (Sir George Young). I entered the House of Commons four years ago, and it is a complete madhouse. We are now on our fourth iteration of the Green Book since I got here. The rules have changed on a quarterly basis, and now they are changing on an almost fortnightly basis. We have codes there, codes there—codes everywhere. We are seeing almost a deliberate attempt to criminalise every Member of Parliament, because it is now impossible to keep up with what the Government are doing.

The House has been struggling to bring its systems up to date and into a state such as it has insisted that other institutions and professions bring theirs into, which is one of the reasons, I suggest, why we fell into the abyss of the expenses scandal. With a bit of luck, once we get the legislation through and we get the authority established, we will be able to enter a period of much greater stability. That is my hope, and I think that we will do that.

I apologise to the right hon. Gentleman for missing the opening few minutes of his remarks, although I was pleased to hear his important comment about clause 5(8), which he will now take away and redraft. However, could he tell us how that will be done practically? Will he table an amendment tonight that will be dealt with on Report tomorrow or do we have to leave that to the House of Lords? We are scrutinising the Bill in very limited time, so it would seem to be awfully late in the day to bring forward such amendments, welcome though they would be.

With the best will in the world, I do not think there will be time to table such an amendment to take on Report tomorrow. However, we are a bicameral legislature, and there is no reason on earth why we cannot have commitments made in one Chamber and amendments moved in the other—indeed, it happens all the time. However, what I also undertake to do—I should have said this—is to consult—

I will indeed consult the hon. Gentleman—why not? I cannot promise that we will reach agreement on the draft amendment, but I promise that I will consult him, and I will consult all the others on the cross-party group, too.

I think that I have spoken for long enough. This has been an unexpectedly entertaining few minutes—for me, anyway—and I shall now listen to the debate.