Home > Parliament and MPs > Regulating MPs’ expenses and conduct – more changes

Regulating MPs’ expenses and conduct – more changes

In the aftermath of the MPs’ expenses scandal over the summer, the Parliamentary Standards Act was enacted. While it might have been thought necessary to show a quick response, what emerged was a rushed piece of legislation that created a hybrid system statutory regulation and internal self-regulation – resulting in a confusing web of numerous investigators and committees. In particular, the Act provided for a new Independent Parliamentary Standards Authority with statutory powers, that would sit alongside the existing self-regulatory (and non-statutory) bodies in the House of Commons, such as the Parliamentary Commissioner for Standards and the Select Committee on Standards and Privileges. With the ink on the statute barely dry, the Leader of the House of Commons yesterday proposed a number of amendments, which aim to address some of the criticisms that have been levelled at the Act – in particular those included in the recent Kelly Report.

Many of the problems with the original Act partly arose from the tension between the need to create an effective system for regulating MPs and to respond to the public outcry on expenses, while respecting Parliament’s status as a sovereign body and the freedom of elected MPs to decide how they do their job. The latter point also raises the concern that external regulation would undermine parliamentary privilege. The messy system of statutory and self-regulation is the product of an attempt to mediate these competing issues. The hybrid system of regulation is by no means unique to Parliament. For example, the BBC is subject to the statutory regulator Ofcom for some issues, while governed by its own self-regulatory body, the BBC Trust, for others. That approach has hardly been free from criticism either (see the speech yesterday by Gregg Dyke).

Even if the amendments to the Parliamentary Standards Act are made, the system will, its critics argue, remain a confusing mixture of different bodies and committees. As Heather Brooke writes in The Guardian: ‘with today’s government amendments, we still have the farce of duelling commissioners.’ But the proposals seek to address several of the most pressing problems with the original Act.

One problem with the original version of the Act concerned the enforcement powers of the statutory regulator. In the original Act, the statutory investigator could conduct an investigation where an MP had been paid an amount that was not permitted under the expenses scheme. However, unless the breach was only minor or inadvertent, that investigator could only refer the findings of the investigation to the Committee on Standards and Privileges (a Committee composed of MPs). This meant the statutory body could carry out the investigation, but the sanction still lay with the Commons’ internal self-regulating process.

Following the recommendations of the Kelly Report, the Act will be changed to allow the statutory body to require repayment of such sums or impose a sanction without a reference to the Standards and Privileges Committee. The thinking is that such an imposition of sanctions from an outside body would not touch on the work of the MP or impact on parliamentary privilege.

A second problem with the original Act was that the Independent Standards Authority was not going to be sufficiently independent. The Authority’s budget is to be drawn up by the Speaker’s Committee (an internal body of the House of Commons) and laid before the House of Commons. The concern that was that the Speaker’s Committee, through its power over funding, would provide a channel for the Commons to apply a financial pressure upon the independent regulator. Even if this was not likely to happen in practice, perceptions matter.

To address this, the Leader of the House of Commons proposes to amend the 2009 Act, so that 3 people from outside Parliament will sit on the Speaker’s Committee. This does not create complete independence, as the Commons will still have final authority over the budget. However, it at least adds an external voice to the process.

A third problem with the original Act was that responsibility for investigating the MPs’ Code of Conduct was split between the statutory regulator and the internal parliamentary bodies. The Code of Conduct sets out the various ethical standards to be met by MPs, such as requiring certain financial interests to be disclosed and forbidding MPs engaging in paid advocacy. Under the original version of the Parliamentary Standards Act, the statutory body was to be responsible for drawing up the Code of Conduct and investigating those breaches of the Code that related to the Register of MPs’ Interests. However, the non-statutory investigator, the Parliamentary Commissioner for Standards, was to investigate other breaches of the Code (such as the rule against MPs being paid as parliamentary advocates by outside interests).

The split responsibility between internal and external regulators was confusing in itself. The concern was also that giving any powers in relation to the Code of Conduct to the statutory regulator could interfere and impose external restraints on the MPs work. The fear was that it may curtail MPs’ freedom to decide how to do their job (for example, in deciding how MPs should be allowed to relate to outside interests). Consequently, the proposed amendment to the Act will repeal section 8, and now matters relating to the Code will be dealt with by the House of Commons internal investigator and committees only.

The outcome leads to the odd result that the Code of Conduct, which governs matters much more serious than the abuse of the expenses system, will be dependent on self-regulation – which is often criticised for being too lax. However, the concern was that any alternative would unduly limit the way MPs choose to perform their duties.  This does not mean that MPs will necessarily be free from all external constraints in relation to their work in Parliament. The Bribery Bill, which should be passed before the election, is expected to make MPs subject to the criminal law of bribery (a position which had been uncertain under the old law). On Wednesday, Lord Bach told the House of Lords: ‘It is, I believe, axiomatic that no Peer or Member of Parliament should be above the law.’ Concerns about the parliamentary privilege are likely to feature in the debate on that Bill too. However, if the Bribery Bill is passed and does apply to MPs, it will provide some external check on the most extreme abuses in public office. However, such examples aside, MPs conduct in relation to their public duties will remain largely a matter for self-regulation.

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