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House of Lords: Code of Conduct

My Lords, first, I draw your Lordships’ attention to the fact that I was a member of the Sub-Committee on Lords’ Interests in the previous Session. Our work earlier this year convinced me, and I think my colleagues, that the wording of the code needed careful reconsideration, and the whole House is grateful to the noble and right reverend Lord, Lord Eames, and his colleagues for their work and their report. I have two points to make today. If today’s Motion is carried, and assuming that I am reappointed to the sub-committee, I will be of one of those who will consider the detailed wording of the proposed guide. One of the difficult questions that we will need to consider—I, for one, would welcome advice from your Lordships on this either in this debate or afterwards—is how to word the code and the guide in a way that prevents Peers from profiting from their parliamentary activity and knowledge but still permits them to continue to have important outside interests of every kind, where inevitably they will sometimes be asked their advice and opinion on current legislative, parliamentary and governmental matters. We all value the contribution of colleagues on their specialist subjects, and visitors and outside observers often comment on the amount of world-class expertise in your Lordships’ House. The distinction of so many noble Lords is what gives this House its special flavour and value within our constitution, but that very expertise is of less use if it is all in the past. Current practice in every field advances faster and faster these days, and we are all in danger of becoming out of date. For that reason alone, we need to allow Peers who have significant outside interests to continue to have them. We also have to recognise that those with significant outside interests will simply not come to the House if they are forced to give them up in order to do so. The Members of another place are likely to become ever more specialist politicians, which makes it all the more important that your Lordships’ House should not become so. The noble and right reverend Lord, Lord Eames, and his colleagues say in the report that the distinction between acceptable and unacceptable interests is not always obvious. I entirely agree. The wording of the guide in this respect needs the most careful consideration. The other matter that concerns me is the blurring of the lines of responsibility over Lords’ expenses. The proposed new code and guide provide that the new commissioner should investigate complaints not only about alleged breaches of the code of conduct, as the Sub-Committee on Lords’ Interests did earlier this year, but about alleged breaches of the rules on expenses and, for that matter, on the use of facilities. The Committee for Privileges and our sub-committee are to be responsible for dealing with expense allegations and facilities allegations on appeal from the commissioner’s findings. At present, the control of expenses is part of the regular financial procedures of the House of Lords administration. As in every other government body, it is the responsibility of the accounting officer. In a government department, that is the Permanent Secretary. Here, the Clerk of the Parliaments is our chief executive. The finances in every particular are subject to internal and external audit by the Comptroller and Auditor-General. That process, and sometimes the details of it, is supervised by the Audit Committee of the House. It is to the Chairman of the Audit Committee that House of Lords staff who want to become whistleblowers are at present encouraged to report any wrongdoing which they believe is occurring at a high level. That system is an important element in the whole structure of public finances. In my ministerial days, I observed that when the Permanent Secretary was facing criticism from the Comptroller and Auditor-General or, even more, was going to have to appear before the Public Accounts Committee, that is when the fur really flew in the department. When he or she was to be the man or woman in the spotlight, everyone in the department would go that extra mile to ensure that the Permanent Secretary in the department came out as well as possible. Apart from anything else, the Permanent Secretary was ultimately responsible for every civil servant’s career, which could not be said of the Secretary of State or any other Ministers who may be here for the moment, but may not be in a short while. The code proposes instead to give the responsibility—but only part of the responsibility—for investigating complaints to the new commissioner and to the Committee for Privileges. They will look only at complaints about expense claims received and not the financial system. They will only by chance see something that is systemically wrong. It was on the recommendation of the Audit Committee that the question of Peers’ expenses was referred to the SSRB. We now have its report, which picks up the Eames committee’s recommendation of a role for the Committee for Privileges and its sub-committee. But neither the Eames committee nor the SSRB advance arguments in favour of this change and neither appear to have considered the overlapping responsibilities which it would create. For that matter, none of the opening speeches from the Front Bench and so on have dealt with that question either. Will the internal and/or external auditors examine the work of the new commissioner or will the auditors and the commissioner each leave some aspects to the other and risk a lacuna? What role will the accounting officer have, with his statutory responsibilities, to make sure that fraud and errors are discovered and dealt with? If we are going to amend or augment the basic financial control systems which apply throughout the public sector, we need to give careful thought to how the new elements of the system will work with the existing elements to make sure that our controls are not weakened by confusing the lines of responsibility. But I suppose that that will be another matter to be considered by the Committee for Privileges and its sub-committee.