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Independent Parliamentary Standards Authority

It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Walsall North (Mr Winnick) on securing the debate. It is almost a year since the Parliamentary Standards Act 2009 went through its Commons stages. I remember it well. The Act created the Independent Parliamentary Standards Authority and gave it a number of administrative and regulatory functions, including payment of MPs' allowances, dealing with allowance claims and revising the allowance scheme for MPs. The key aspect of the Act is that it gave IPSA those functions in relation to Members' allowances, yet when IPSA published the first scheme for consultation, it changed the word "allowances" to "expenses". Most right hon. and hon. Members understand the anger and annoyance generated in the public by the term "MPs' expenses" following the scandal of last year. It therefore seems to me to be incorrect and somewhat provocative of IPSA to describe allowances designed to support MPs in carrying out their parliamentary functions as expenses. We could debate the different definitions, but the definition of "allowance" is money defined or set aside for a purpose—in the case of MPs, to pay essential costs such as staff salaries and national insurance, rent, business rates and utility costs. It includes the sense that the sum specified in the allowance may or may not be used, but IPSA seemed to react to the term "allowances" by suggesting that if it made an "allowance scheme", MPs would use all of the allowance allocated. That has not been the case in the past. There is a wide variety of definitions of expenses, but a common one is that of costs incurred by an employee that are payable by an employer. As other Members have said, that does not fit the situation of MPs as we are not employees of the House. I strongly feel that "expenses" has overtones that work to hamper Parliament's recovery from the scandal generated by the discredited system used in the previous Parliament. As my hon. Friend the Member for Walsall North has said, we all want to get over it. In my view, IPSA would be well advised to describe the scheme as an allowance scheme, as the 2009 Act laid down. Interestingly, IPSA uses a different definition of expenses when it comes to its own reporting. It states on its website that it will publish all expenses and hospitality incurred by the IPSA board and senior staff. If it used the same definition of "expenses" for its own staff, it would report its office costs and the salaries and other support costs of its staff, as well as personal expenses. What it actually publishes is travel and accommodation costs. What was called the office costs allowance is now split by IPSA into two allowances: constituency office rental and general administrative expenditure. The previous allowance was more than £22,000 and could be supplemented by transfer from other allowances if office running costs were higher than the allowance. The IPSA scheme split the allowance into two parts and reduced it by £1,300. One part of the allowance has to be used to pay office rent, business rates, utility bills and office insurance, and the other for office furniture, computers and printers, phone systems and bills, stationery and postage. Why does IPSA feel that it is right to reduce the total amount of allowances for running an MP's constituency office? The Committee on Standards in Public Life looked at the previous allowance and, in its report, recommended no change. Not only has IPSA reduced the allowance, but it has arbitrarily split it and insisted that office rental and associated costs must somehow fit into the reduced half, with the other part of the allowance not able be used for rent, rates or utility bills. Apparently, the level of rental used by IPSA to set the constituency office rental cap is about £5,000 a year, which is meant to pay the annual rent of offices for the MP and up to three and a half staff, plus filing space, printers and space to meet constituents. It is not adequate. The cap is said to be the average office rent paid in the previous Parliament. The concept of an average rent is strange—rents vary up and down the country and probably half of the MPs in that Parliament had a higher cost than the £5,000 average. Many MPs are able to rent office space at low cost from constituency associations or have subsidised offices from their local authority, but for other MPs such subsidised and low-cost offices are not available. There is a danger that IPSA's splitting the allowance and setting such a low cap on the office rental element could drive MPs out of their current constituency offices and into unsuitable premises.