1. The Parliamentary Standards Bill is a legislative response to the public anger in recent weeks about the conduct of some Members of both Houses of Parliament in relation to financial matters. In this report we express concerns about the bill. We are particularly concerned by the hasty manner in which policy-making has taken place, with negligible public consultation, and the subsequent 'fast-tracking' through Parliament of a bill which will have major constitutional implications. We focus on these issues of process in this report. We intend to make a further report on the bill, dealing in more detail with constitutional points relating to the policy of the bill.
2. At the outset, we need to recognise that the bill as introduced in the House of Lords is in two vital respects different from the one originally introduced in the House of Commons. First, the Government agreed to remove a clause seeking to place a statutory duty on the House of Commons to have a code of conduct. Second, the Government was defeated on a controversial clause ("the proceedings in Parliament clause") that sought to carve out an exception from Article IX of the Bill of Rights 1689, which protects freedom of speech and proceedings in Parliament from being questioned in court. The Government indicated that they will respect the view of the House of Commons and not seek to reintroduce the proceedings in Parliament clause. Both of these clauses threatened to undermine freedoms which are essential for Parliament to operate properly and risked opening the door to conflict between Parliament and the courts.
3. We welcome these changes. They do, however, reinforce our view that the bill is the product of a desire to respond to a demand to see something done, as the Government put it, rather than the outcome of a law-making process suitable for a bill with serious constitutional repercussions. Even with the two clauses removed, the bill raises other as yet unresolved questions about the relationship between Parliament and the courts. Moreover, it will fall to the House of Lords to consider how the bill hangs together in the light of the decisions made in the House of Commons. Baroness Royall of Blaisdon, the Leader of the House of Lords, told us 24 hours before the removal of the proceedings in Parliament clause, that "The package in the bill is a coherent whole, and no part of it would work without the rest". The bill will accordingly have to be substantially recast. To do so under an accelerated passage is in our view wholly unacceptable given the questions of constitutional principle and detail that it raises.
The contribution of the House of Lords to the scrutiny of this bill
4. In different circumstances, a bill that seeks to regulate the working practices of the House of Commons might be thought to require the House of Lords to adopt a degree of deference in the scrutiny of it. It has been a characteristic of the British constitution that each House should be free to regulate its own internal affairs independently of the other. Our Committee is, however, called upon to examine all public bills. The bill raises questions of broad constitutional significance, including that of the relationship between Parliament and the courts and matters relating to parliamentary privilege. More specifically, the Government have indicated in relation to the present bill that they intend "to extend it to the Lords, using the same principles, as soon as the Parliamentary timetable allows". This was confirmed by the Justice Secretary during the second reading of the bill in the House of Commons on 29 June. A document deposited in the House of Commons Library by the Government on 20 May 2009, referring to the proposed Independent Parliamentary Standards Authority, states that "it is clearly appropriate that this new body also takes responsibility for these issues in the Lords". The document adds:
"We recognise that the principle of self-regulation operates differently in the House of Lords. It is clear that extensive work and consultation will be necessary in order to ensure the agreement of the House to the effective transfer of responsibilities to the new body".
5. For these reasons, it is in our view necessary for the House of Lords to subject the provisions contained in the bill to close scrutiny, even though the proposals contained in the bill apply (at present) only to the House of Commons. In any event, it is clear from remarks made in the proceedings on report in the House of Commons that that House expects the bill to be thoroughly revised in the House of Lords, if only to make it workable.
Constitutional consequences of a further move away from self-regulation
6. On one view, the policy of the bill to create an independent body responsible for allowances and registration of interests, working at arm's length from Members, may be seen as an incremental development. The House of Commons first established a system for registering financial interests in 1974, in which the registrar was a clerk and alleged abuses were investigated by a parliamentary committee. In 1995, the first report of the Committee on Standards in Public Life, under the chairmanship of Lord Nolan, recommended that the House of Commons should appoint a Parliamentary Commissioner for Standards, who would be "a person of independent standing" responsible for maintaining the register of interests, offering advice to MPs, and investigating allegations of misconduct relating to the register. Decisions about imposing penalties would remain with a committee of MPs. The House of Commons accepted this recommendation. Parliament has also agreed to subject itself to external regulation of a constitutional character in other contexts, notably in the Freedom of Information Act 2000.
7. On the other hand, the policy expressed in the bill of establishing a statutory external regulator of important parliamentary matters, acting within a statutory regime and potentially subject to the jurisdiction of the courts, in our view represents a step-change in the trend towards greater external regulation. Self-regulation has been a central characteristic of both Houses of the United Kingdom Parliament. The "exclusive cognisance" of each House to regulate its own affairs, free from intervention by the courts, has been a key feature of our constitutional framework. The bill breaks with that convention. This is a profound change which has the potential to give rise to conflict between Parliament and the courts, the implications of which require very careful examination.
8. There are questions about the extent to which decisions taken under the new institutional framework created by the bill—by the Independent Parliamentary Standards Authority (IPSA) and the Commissioner for Parliamentary Standards—will open up the possibility of judicial review challenges. We note that suggestions have also been made that the bill may even lead to the prospect of judicial review proceedings against the Speaker of the House of Commons. The proposition raised by the Joint Committee on Human Rights that disciplinary proceedings within Parliament against Members ought to be subject to an appeal to the courts was not debated in detail in the House of Commons and deserves to be examined during the bill's passage through the House of Lords. There are also questions about the constitutional acceptability of the policy of the bill to create special criminal offences that apply only to a small class of person (in this case, Members of the House of Commons). It appears to us that the excessively speedy policy-making and consideration of the bill has prevented proper examination of these and other legally and constitutionally complex questions. We will address these further in our second report on the bill.
Fast-tracking of policy-making and of the passage of the bill
9. The way policy-making has been rushed, the lack of public consultation and the limited opportunities given to Parliament to scrutinise the bill all, in our view, fail to meet the minimum requirements of constitutional acceptability.
10. The Government decided that the bill should have an accelerated passage through both Houses. The bill was introduced in the House of Commons on Tuesday 23 June 2009. Second Reading was held on Monday 29 June; the Committee stage took place on Tuesday 30 June and was completed on Wednesday 1 July, along with all remaining stages. The timetable for consideration of the bill did not even provide the House of Commons with an opportunity to debate the proceedings in Parliament clause, which was of vital constitutional importance.
11. The House will want to consider whether the bill is the product of a thorough policy-making process. To do so, it will be helpful to set the bill's proposals in the context of the recent initiatives designed to restore public confidence.
12. On 23 March 2009, the Prime Minister invited the Committee on Standards in Public Life, chaired by Sir Christopher Kelly, to inquire into MPs' allowances. In his letter to Sir Christopher, the Prime Minister stated "I understand that you will be undertaking a short, focused review of whether current arrangements in the House of Lords are still appropriate, given the reforms already completed for MPs, once the Sub-Committee on Lords' Interests, chaired by Usha Prashar has concluded its review. It would be helpful to consider the evidence from that exercise". The Committee invited written submissions (the closing date for which was 5 June 2009) and is holding a number of oral evidence sessions. The Committee's report is expected to be published in autumn 2009.
13. On 21 April 2009, the Prime Minister used the constitutionally unorthodox medium of a video clip on YouTube to announce "urgent proposals to make our system of MPs' allowances and expenses simpler and less generous". These interim changes were debated in the House of Commons on 30 April 2009. The House of Commons voted in favour of Resolutions that: welcomed the Committee on Standards in Public Life's inquiry; amended rules relating to allowances for MPs in outer London constituencies; ensured that all claims are backed with receipts; amended the rules relating to MPs' declarations of outside earnings; and made changes to the arrangements for MPs' staff employed on parliamentary business.
14. On 19 May 2009, the then Speaker of the House of Commons made a statement to that House saying that a meeting of party leaders:
"... received a paper from the Prime Minister, which was endorsed by the other party leaders, calling for a fundamental reform of allowances—moving from self-regulation to regulation by an independent body. The Government will consult widely on this proposal. Further to this, the Leader of the House will be making a statement tomorrow, which will allow the House a full opportunity to ask questions, and Members to air their views on the decisions we have made and the proposals for the future".
15. On 20 May 2009, Harriet Harman MP (Leader of the House of Commons) made a statement in the House of Commons on a proposed Independent Parliamentary Standards Authority. Subsequently, a three page outline of the proposals was deposited in the House of Commons Library and later uploaded to the Ministry of Justice website.
16. On 23 June 2009, when the bill was introduced to the House of Commons, the Leader of the House of Commons said in a Written Statement:
"This Bill is the first stage of legislation and covers the specific but important and urgent task of setting up an independent authority. There is likely to be subsequent legislation where this is judged necessary, not least in the light of further cross-party discussions".
17. We have recently been engaged in an inquiry into fast-track legislation. Our report Fast-track Legislation: Constitutional Implications and Safeguards will be published in the next few days. In Appendix 1, we have set out the recommendations we will make for improvements to the pre-legislative, legislative and post-legislative scrutiny process relating to fast-tracked legislation. We wrote to Baroness Royall on 25 June seeking a full explanation of the justification for fast-tracking this bill, in accordance with our recommendation at paragraph 186 of our forthcoming report.
18. Baroness Royall told us "Fast tracking is necessary because there is an urgent public demand to see something done about the system for regulating MPs' expenses". She said "If the legislation were not passed until the autumn, that would lose three months during which the public would continue to wonder what MPs were doing to answer their concerns". It appears that the key driver for the bill is public perception, rather than any specific policy outcome. Nevertheless, in answer to our question as to what public consultation there had been about the policy contained in the bill, Baroness Royall responded that "The policy proposal directly affects only MPs and the staff of the House". She did not allude to any external public consultation, nor admit the case for it. This strikes us as an worryingly narrow view of a bill designed to rebuild public confidence in the way Parliament operates.
19. There is no sign that the policy proposals contained in the bill were subject to rigorous internal scrutiny as to their constitutional acceptability. Once again, there appears to have been a failure at the centre of Government to prevent a policy with clear constitutional flaws being pursued. The abandoned clauses in the present bill now lay on the cutting room floor alongside clauses from the Legislative and Regulatory Reform Bill in 2006 and the 2003 announcement that the office of Lord Chancellor would be abolished.
20. We recognise that there have been discussions, conducted under the "Chatham House Rule", involving the leaders of the political parties about the policy in the bill. We understand that the bill changed substantially as a result. We welcome consultation between the parties about matters of significant constitutional importance. But such discussions are no substitute for rigorous evaluation of policy options and public consultation. It is ironic that provisions designed to restore public confidence in aspects of the operation of Parliament have emerged from behind closed doors without providing an opportunity for adequate public engagement before the policy is crystallised into a bill introduced to Parliament. This is no way in which to legislate on matters which raise complex constitutional and legal issues.
21. The proposals contained in the bill have not been preceded by public consultation in accordance with the Government's Code of Practice on Consultation. We see no justification for departing from the presumption in favour of formal, written public consultation, the duration of which should be no less than 12 weeks. The failure to consult has deprived Government and Parliament of the opportunity to hear expert views on the policy of the bill. Other parliaments have adopted various models for the regulation of ethics and financial interests of their members. There is little sign that policy-making in advance of the bill has been informed by careful evaluation of what has worked well, and less well, in other systems
22. Moreover, this is a bill that should subsequently have been published in draft to enable pre-legislative scrutiny. Without such prior scrutiny, or the evidence-based scrutiny of a Public Bill Committee in the House of Commons (because the Committee stage was taken on the floor of the House), it is difficult to see how the policy can have been appropriately informed by expert and public opinion.
23. We are wholly unpersuaded by the Government's case for this bill to be fast-tracked. There is an undoubted need to restore public confidence in the parliamentary system. It is not, however, clear to us that a cobbled together bill rushed through Parliament will help rebuild public trust; on the contrary, if Parliament cannot be seen to be scrutinising proposals with the thoroughness they deserve, public confidence in parliamentarians is likely to be further undermined. Governments should find the strength to resist falling into a temptation simply to see something done, which is no substitute for properly prepared policy and legislation.
24. It will ultimately be for the House as a whole to decide whether the bill should follow a normal timetable, respecting the minimum recommended intervals between stages of the bill and following the requirements of Standing Order 47 that no two stages of a Bill be taken on one day. For our own part we regret the haste with which the bill is being pursued. In our forthcoming report on Fast-track legislation we identify a number of principles which we consider need to be met in order to justify expediting legislation. We doubt that any of these principles has been met in respect of this bill. Accordingly we do not think that the case for proceeding with this bill on a fast-track timetable has been established and we do not support any curtailment of the usual legislative timetable.