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Independent Parliamentary Standards Authority

Volume 554: debated on Tuesday 4 December 2012

I beg to move,

That an humble Address be presented to Her Majesty, praying that Her Majesty will appoint the Hon. Sir Alexander Neil Logie Butterfield, Elizabeth Jane Padmore, Miss Anne Whitaker and Professor Anthony Wayland Wright to the office of ordinary member of the Independent Parliamentary Standards Authority with effect from 11 January 2013.

The motion provides for the fixed-term appointment to the Independent Parliamentary Standards Authority of four ordinary members of the board, having effect from 11 January 2013, following the expiry of the existing board members’ term of office on 10 January 2013. I do not intend to detain the House for too long, but it may be helpful to the House if I briefly set out the process of these appointments and introduce the candidates. I should point out at this point that Professor Sir Ian Kennedy was appointed for a fixed term of five years, which does not expire until 3 November 2014. He will remain chair of the board.

The Parliamentary Standards Act 2009, which established IPSA, states that the board of IPSA consists of the chair and four ordinary members, and establishes certain qualifications for some of those members: at least one must have held, but no longer hold, high judicial office; at least one must be eligible for appointment as a statutory auditor, by virtue of chapter 2 of part 42 of the Companies Act 2006; one must be a person who has been, but is no longer, a Member of the House of Commons; and there must be one other member, for whom no qualification has been specified.

In 2009, Her Majesty, on an Humble Address from this House, appointed the right hon. Justice Scott Baker, Jackie Ballard, Ken Olisa and Professor Isobel Sharp to be the four ordinary members of the board of IPSA, following its establishment. As I said, their terms of office expire on 10 January 2013, three years after their appointment. May I take this opportunity to thank them for their work over the past three years? Nobody in the House will need reminding that the past three years have not been easy, as was somewhat inevitable given what was being asked of IPSA and the time scale it was working to. The National Audit Office, in 2011, recognised that it was a “major achievement” for IPSA to establish itself

“as a functioning organisation in a very short time”.

The Office of Government Commerce said that the “impossible” was “delivered”. I am in no doubt that the fact of an independent, transparent, regulator has made a significant contribution to increasing public confidence on the issue of MPs’ expenses, and will continue to do so into the future. Indeed, IPSA is now consulting on the important issue of a long-term proposal for Members’ pay and pensions, which I am sure will further reassure the public that there will be no return to the problems of the past.

Earlier this year Mr Speaker, recognising that four of the five initial appointments were reaching their end, sought legal advice on the interpretation of the Act as it related to reappointments. The advice was that although the Act permits board members to serve a second fixed term, whether consecutive or not, that is subject to the requirement that the names appearing on a motion before this House must have been selected by the Speaker on merit on the basis of fair and open competition: in other words, the posts have to be opened to competition at the end of each fixed term. The four members whose terms of office were expiring did not seek reappointment on that basis. That is a matter for them.

Following the precedent established in 2009, Mr Speaker appointed an independent panel to run the competition and to report to him with recommendations. The panel was chaired by Dame Denise Platt, a member of the Committee on Standards in Public Life. Professor Sir Ian Kennedy, chair of IPSA, also sat on the panel, as did Dame Janet Gaymer, a former commissioner for public appointments and lay member of the Speaker’s Committee for the Independent Parliamentary Standards Authority.

The panel was assisted in its deliberations by the right hon. Sir Anthony May QC, who was nominated to the panel by the Lord Chief Justice; Martin Sinclair, assistant auditor general of the National Audit Office, who was nominated to the panel by the Comptroller and Auditor General; and Peter Atkinson, former MP for Hexham, who was nominated to the panel by Mr Speaker. Those individuals were able to provide insights into the statutory qualifications for IPSA required of board members, as I set out previously.

Mr Speaker provided the panel with a role and person specification for the board posts, which he had agreed with Professor Sir Ian Kennedy. The recruitment process involved stages of advertisement, longlisting, shortlisting and final interview. The panel’s recommendations to the Speaker were made in the form of a ranked list, with reasons, to support selection on the basis of merit. The names on the motion were selected by Mr Speaker, with the agreement of the Speaker’s Committee for the Independent Parliamentary Standards Authority, as required by the statute.

The candidates before the House are the hon. Sir Neil Butterfield, who has held high judicial office as a High Court judge sitting in the Queen’s bench division from 1995 to 2012; Liz Padmore, for the post to which no specific qualifications apply, who has a wide range of public and private sector experience, most recently as chair of Hampshire Hospitals NHS Foundation Trust; Miss Anne Whitaker MA ACA, proposed for appointment as the auditor member of IPSA; and Professor Tony Wright, formerly Member for Cannock Chase, who is proposed as the parliamentary member of IPSA. A short career profile for each has been made available to Members as part of the explanatory memorandum supporting this debate. I do not intend to detain the House by going through their extensive résumés, but I can assure the House that each candidate would bring a wealth of relevant experience to their respective posts.

Under paragraph 3 of schedule 1 to the Parliamentary Standards Act 2009, the terms and conditions for each appointment are determined by the Speaker. Clearly, it is better for IPSA if appointments to its board expire over a period, not all together, providing greater continuity of governance. Mr Speaker therefore asked the independent panel, as part of its assessment, to consider and recommend varying lengths of appointment for the candidates. The panel recommended that two candidates be appointed for three years and two for five years. Sir Neil Butterfield has been recommended for a three-year appointment, reflecting his own preference, and Professor Tony Wright has been recommended for a three-year appointment, so that the next competition for a parliamentary member of IPSA can take place shortly after the general election that is due in 2015.

It is a matter of public record that Sir Ian Kennedy wrote to Mr Speaker to express concerns about the process before the independent panel was appointed. Members might wish to note, however, that after the independent panel had reported, Sir Ian Kennedy issued a statement saying that that the independent panel was

“chaired impeccably by Dame Denise Platt and proceeded in a thoroughly proper manner”,

and that his “fears were not realised”. He has also issued a statement describing the nominees as “impressive individuals” giving him “great confidence” for IPSA’s work.

In this debate it is important that we should keep in mind the reasons why IPSA was created and the importance of the work it has still to do. It was established at great speed and in difficult circumstances and we should recognise that under Sir Ian Kennedy’s leadership the board of IPSA has made a significant contribution to the task of establishing the authority and ensuring there is transparency about Members’ business costs and expenses. These steps are essential to the restoration of the public’s confidence in their Parliament.

It is of great importance, in my view, that we uphold the independence of IPSA. This enables us to refute any implication that Members of Parliament can seek to manipulate the system to their advantage. As we have seen, it is not proof against the interpretation of the media, but for any reasonable person an MP’s adherence to the rules set by IPSA should be a sufficient defence.

The four individuals named in the motion have been through a rigorous and independent recruitment process to be considered by the House today. If appointed, they will bring to IPSA not only the experience required by the statute, but a considerable range of skills and knowledge acquired in both the public and private sectors.

I commend the motion to the House.

As the Leader of the House has just pointed out, the proceedings before us today are required under the Parliamentary Standards Act 2009. As I am sure Members in all parts of the House will recall, this is the statute which set up the Independent Parliamentary Standards Authority. It requires that the board of IPSA consist of four ordinary members and a chair. The chair, Professor Sir Ian Kennedy, was appointed for a fixed term of five years, which runs out in November 2014, but the board members all have appointments which expire on 10 January 2013, so it has been necessary to hold a selection process to find a successor board. It is the result of this process that the House is considering today.

Again as the Leader of the House pointed out in his remarks, the IPSA board has to meet certain very particular specifications. Under the Act, one board member must have held high judicial office, one must be eligible for appointment as a statutory auditor, and one must have served in the House of Commons. The appointments panel convened by the Speaker has done a very thorough job and come forward with four candidates who more than fulfil the statutory requirements of the 2009 Act. On behalf of Her Majesty’s Opposition, may I endorse the candidates who have been selected and the scrupulously fair and independent process by which that was achieved?

It is only right that I endorse the thanks that the Leader of the House has already put on record to Dame Denise Platt, a member of the Committee on Standards in Public Life, to Professor Sir Ian Kennedy, chair of IPSA, and to Dame Janet Gaymer, a former commissioner for public appointments and a lay member of the Speaker’s Committee for IPSA, who sat on the appointments panel. I also join the Leader of the House in thanking those who assisted them in their considerations: the right hon. Sir Anthony May QC, who was nominated to the panel by the Lord Chief Justice; Martin Sinclair, who was nominated to the panel by the Comptroller and Auditor General; and Peter Atkinson, who was nominated by the Speaker.

It is crystal clear from the form of the appointments panel and those who assisted it that this was a scrupulously fair and independent process, and I hope that no one will seek to cast any aspersions on it at any time in the future. I was grateful to the Leader of the House for putting a few things straight in his remarks about the nature of this process and the reason for conducting it in that particular way. It is also sensible to put on record Sir Ian Kennedy’s evident satisfaction with both the process and the outcome of the appointments panel, despite his initial unhappiness.

I agree that the Speaker’s decision to stagger future appointments so that the board members’ terms of office do not all expire at the same time is sensible. It is an obvious improvement on the current arrangements, which I hope the House will endorse tonight.

IPSA needs to demonstrate its robust independence from both Parliament and the Government of the day. It needs to do this by the process and in the content of the decisions that it reaches. Part of IPSA’s job is to communicate and explain any decisions that it makes to the public and to defend Parliament as an institution from unfair criticism on costs and expenses, which are now clearly decided independently by IPSA.

It only remains for me to thank the outgoing members of the IPSA board for the work they have done, and to welcome their successors and wish them well in their job for the future.

I welcome the appointment of the four new board members and trust that they will bring a commitment to the job that I think, on occasion, was sadly lacking on the part of the four departing. I refer to the fact that attendance at board meetings was not always their top priority. On one famous occasion, only one of the five board members—the chairman—was present and the other four conducted the business down the phone. I am confident that the four new members will not follow that procedure, which is why I welcome them.

The Leader of the House referred to the National Audit Office in his introduction. He could have added that it estimates that 92% of Members of Parliament now subsidise their work. I trust that is something the new board members will address, along with the fact that 38% of claims cost more to process than the amount claimed.

The new board members have a job to do that the previous board did not. As a member of the Speaker’s Committee for the Independent Parliamentary Standards Authority, I feel that the manner in which two of the departing four—incidentally, not one of them sought reappointment, which speaks volumes—launched what can only be described as a personal attack on Mr Speaker was unfair and simply unacceptable. I look forward to their apologising to Mr Speaker at some point, because it was the Committee that made the decisions; Mr Speaker acted in the name of the Committee. I welcome the four individuals, but I am not at all sorry to see the previous four go.

I find it quite extraordinary that Parliament feels it appropriate to debate or comment on people who are appointed to public office without their having some kind of right of reply here. I think that is regrettable. I am certain that the individuals who have been put forward are excellent people who will do an excellent job, in precisely the same way that those who served the public previously did an excellent job in establishing the organisation.

My concern and regret—this is not a criticism of the Leader of the House, who is bound by what Parliament has previously agreed—is that the motion is in front of Parliament at all, and indeed that SCIPSA exists at all. In the three years since IPSA was set up, Parliament has had the opportunity to separate out properly and entirely all matters relating to pay and conditions, rather than have any semblance of control, influence or direction, however distant, over such matters. The fact that the appointments have been made with parliamentary involvement demonstrates that we have not yet gone far enough in isolating pay and expenses entirely from everything else we do. That is the fundamental error that was made before.

I therefore ask the Leader of the House to consider, with the four new board members, establishing a dialogue to determine whether they could bring forward and recommend to us a better system in which we would have no involvement whatever in future appointments, whether ratification or anything else, so that there is a complete separation between Parliament and those who decide our pay and expenses. It seems to me that the public would support that. Equally important, I think that would strengthen our position as legislators. I hope that the Leader of the House will consider it.

I wish to say a little about what the new board members are going to do in terms of getting trained and educated about what we do in this House. Their statutory responsibility is to determine Members’ pay and allowances—I emphasise the word “allowances” because that is the expression in the statute, although that is not how it has been interpreted by the current board and its chairman.

It is surely important that anybody who is looking at terms of pay and conditions should understand a bit about the job of the people whose pay and conditions they are sitting in judgment over. As you may know, Mr Deputy Speaker, on the morning of 22 November this year the current chairman of IPSA, who sat on the board that selected the four candidates whose names are before the House tonight, told the “Today” programme that he knew a lot about what Members of Parliament did in their constituencies, but admitted to ignorance about what they did in this great House of Commons. That is after three years in the position, which he holds for only five years. In other words, after 66% of his time in post, he still admits that he is ignorant. He said that the only thing he knew about what Members of Parliament did was that they attended, as he put it, “a zoo” on a Wednesday. Later that day, I asked my right hon. Friend the Leader of the House whether he would organise a programme of education for Sir Ian Kennedy. He assured me that Sir Ian had always shown a willingness and desire to learn more about the work of the House, and obviously put him in a strong position to be able to show leadership to the new members of the board.

Pursuant to that, I wrote to Sir Ian on the following day, 23 November, setting out in detail everything that I had done in this House on Thursday 22 November, including asking a question about him. That covered the time between about 8.30 am and after 10 o’clock at night, when I returned to my constituency home. In the letter, which I said I was quite prepared to have treated as an open letter, I invited him to come along and shadow me for a day in the House so that I could show him exactly what we do here because he is so ignorant of it. I had assumed that by now, in the knowledge that we were having this debate, which my right hon. Friend flagged up when he responded to my business question, the chairman of IPSA would have responded to me, but he has not yet done so. I therefore wonder whether he really is interested in finding out what we do here. I hope that other members of the board will have a greater appetite for learning about it before they feel able to comment on our pay, allowances and pensions.

On the subject of pay and conditions, and the transparency and probity that IPSA is responsible for upholding in this place, does my hon. Friend deprecate, as I do, the fact that despite a very strong lead from the Chief Secretary to the Treasury and the Government, IPSA set its face against that policy in paying its interim chief executive, through a tax-avoiding personal service company, the sum of £39,000?

On a point of order, Mr Deputy Speaker. The comments that I made relate specifically to the duties and responsibilities of board members, which are to protect the probity, honesty and transparency of this place, and I would respectfully submit that that is in order.

I am grateful to you for challenging the order of the Chair. I said that it was outside the scope of the motion, and it is.

May I invite my right hon. Friend the Leader of the House to address the issue of whether there is going to be an induction programme for the new members of the board? As a modernising House, we have induction programmes for new Members of Parliament and I think that they have been well received. I see that my right hon. Friend is nodding. Although I know that it is strictly outside the scope of the motion to say that the existing chairman should be invited to attend such an induction programme, perhaps he could be invited—even though it is three years late—so that those who sit on the independent board can be informed about our work.

Earlier the hon. Gentleman rightly drew attention to the importance of the word “allowances”. Does he agree that the new board members should address IPSA’s use of the phrase “business costs,” because Members of Parliament are not businesses?

That is correct. Indeed, ironically that point was made to me, unsolicited, by a senior colleague in the Tea Room on Thursday 22 November. I sat down in the Tea Room at 7.15 pm after realising that I had not had any lunch that day, and the first thing that this colleague said to me was the point that the hon. Gentleman has just made. I have included that in my letter to Sir Ian.

I do not often do this, but I told the House that I was concerned about the quality of the existing board members when we debated their appointment some three years ago. Indeed, I tabled an amendment proposing that we should exclude one particular member from the board—the former Member of Parliament for Taunton—on the basis that she had only been a Member of this House between 1997 and 2001 and I was sceptical about whether she would be able to contribute fully. [Interruption.] The hon. Gentleman says that I was right to be sceptical, but I have to point out that on that occasion the Liberal Democrats used a procedural device to ensure that my amendment was not voted on and the main motion was then passed.

I continue to take an interest in this matter and hope that next time we debate the issues I will be able to report back on how Sir Ian’s day of induction with me went.

I am grateful to the shadow Leader of the House, the hon. Member for Wallasey (Ms Eagle), and to the other Members who have contributed to the debate.

I cannot encourage the hon. Member for Bassetlaw (John Mann) to believe that the IPSA board will provide the House with a proposal for a new scheme for appointments. The body was established under the Parliamentary Standards Act and is bound by it, and the nature of the appointment scheme is set out in that legislation.

My hon. Friend the Member for Christchurch (Mr Chope) made a number of points. I am sure that Sir Ian Kennedy will respond to him and I will invite Sir Ian to include in that response a reference to how the board intends to have an induction programme for its new members. That is, of course, a matter for the board—it is not a matter for me or, indeed, for the House—but I will invite him to respond on that point.

In his discussions, will the Leader of the House suggest that the website that gives details of board meetings should be kept more up to date? It notes that the last board meeting took place in July, but I assume that it has met in the past five to six months.

I will ask Sir Ian Kennedy to respond to that point, too. I confess that I do not know whether the board has met since July, but he will no doubt be able to better inform my hon. Friend.

I have known Sir Ian Kennedy over a number of years—less in the IPSA context than in his previous role as chair of the Healthcare Commission; I knew him in his capacity in that role—and think that on 22 November he probably understated his knowledge of Members of Parliament and what they do in this place. He probably regrets that, but I know from my conversations with him that he regards knowledge of the role of MPs and their activities and important work as important. He also believes it important not only for IPSA to recognise that fully in what it does, but for the public to recognise it as part of an understanding of how IPSA goes about its work and makes its decisions.

Does the Leader of the House agree that Sir Ian has been taken aback by the lack of understanding among the public of the role of Members in this House? It may be that he misspoke on the radio and attributed to himself the understanding that he had picked up from the public consultation, which is that many members of the public know about Prime Minister’s questions, but not the detail of what else we do in this House. I expect that that is what he meant.

The hon. Lady makes a very good point. Sir Ian may well have been reflecting the public’s perception. They understand much more about what we do as constituency Members of Parliament and, frankly, they value it more. I know from conversations with Sir Ian that that is something that he, as well as we in this House, hopes to remedy. One of the substantial number of criteria in the person and role specification that was agreed between Mr Speaker and Ian Kennedy, which would have been reflected in the panel’s judgments, was a candidate’s understanding and awareness of the role of Members of Parliament.

Is it not correct that in that radio interview, Sir Ian Kennedy had the opportunity to explain to the public who were listening what we do here? He could have told them about his understanding of what Members of Parliament do, but instead he chose to use a cheap jibe, pandering to public prejudice.

I understand what my hon. Friend says. Sir Ian must speak for himself as this is his responsibility. The shadow Leader of the House and I were just reflecting our own conversations with him. He would have wanted to reflect his desire for the public to know more about what we do here and his belief that IPSA should fully understand the nature of the work that we do. If he did not reflect that in his interview on the “Today” programme, he will no doubt have an opportunity to remedy that in future.

I am grateful to Members for the points that they have made in this debate. I hope, along with other Members, that the members nominated in the motion take forward the important work that IPSA has to do in the years ahead.

Question put and agreed to.