Strengthening links with China…

Oliver speaking to a Chinese Delegation

Britain is trying to strengthen links with China at all levels and George Osborne has recently visited China to develop trade and economic contacts. The Chinese are also interested in how our constitution works and our anti-corruption measures.

I was recently invited to speak to a delegation of elected officials from Shanghai about standards in public life. I was able to explain the development of thinking in this country over recent years, leading to the establishment of the Nolan Committee, subsequently the Committee on Standards in Public Life, and the introduction of IPSA and the role of the House of Commons Standards and Privileges Committee. The officials were well-briefed and took a keen interest in Nolan’s seven principles of public life. We had a lively discussion – or as lively as can be had via an interpreter – and it did seem that the highest echelons of local government in Shanghai are looking closely at emulating some of our procedures.

KELLY REPORT ON PARTY FUNDING –making a start on reform?

I was talking to a friend the other day about the Report of the Kelly Committee on political party funding. He wanted to know if the process of reform has stalled because the three political members of the Committee, including me, dissented: (Committee on Standards in Public Life, Thirteenth Report, Political Party Finance – Ending the big donor culture).

I certainly hope that a start can be made on a gradual process of reform supported by all main parties. The case for taking Big Money influence out of politics is strong. Rather than the current world of large donations from unions, companies and rich individuals, with the inevitable suspicion that the money is being paid for favours, it would be far better to move to a situation where donations are moderate and the result of individual decisions to donate. This means moving to a system with individual donors where donations are capped at a sensible level. We should see an end to corporate, institutional and trade union funding altogether, which have often led to suspicions of undue influence. Indeed trade unions boast of their influence over Labour.

The Kelly Committee Report moves in this direction with recommended strict rules on company giving and the recommendation that trade union affiliation fees should become truly individual donations.
Two issues are central to making progress: setting a sustainable donation cap and a plan to move to individual giving.

As I make clear in my Note of Dissent and as the Committee recommends, political party accounting standards need to be improved so that it is possible to “model” the effects on the main parties of a particular level of donation cap. No one would seriously want to implement changes which could put a major party out of business. The Committee considered caps of between £10,000 and £50,000 a year. Once the new accounting standards are implemented, it will be easier to fix on the right figure.

The position of trade unions is key to the way forward, because they are the predominant donors to Labour and have millions of members in their political funds. They could strengthen political engagement in the UK, if they were willing to give their members an individual choice of which political party received their donation through the political fund of the union.

The British Election Study 2010* suggests that about:

*40% of trade union members identified themselves with Labour,
*20% identified themselves with the Conservatives,
*10% identified themselves with the Liberal Democrats,
*10% identified themselves with another party, and
*the final 20% did not know or did not identify with a particular party.

Many of the trade union members who support Labour would tick a box to turn their affiliation fee into an individual donation, which would increase Labour’s funding. The Committee felt that any proposals should not unduly weaken or aid a particular Party. Allowing only Labour to benefit from affiliation fees does not satisfy this test.

Trade unions should be willing to allow their members to contribute to the political party of their choice through the union. This point was made to the Committee by a number of witnesses, including former Labour fundraiser Lord Levy. This would also encourage political engagement by all trade union members. At the heart of matter is the fact that these days as many union members vote for the other parties as for Labour.

It is widely thought that trade unions exercise undue influence on Labour through affiliation fees. If affiliation fees also benefitted other parties, this impression would be dispelled. It would also tackle the concern expressed by the Committee that trade unions might increase affiliation fees in order to off-set losses in Labour income caused by less trade union members opting to pay affiliation fees than are paid now.

Times have changed for the trade unions and their membership is not predominantly Labour. Unions should be campaigning for their members’ interests with all parties equally. Lord Alderdice, the Liberal Democrat Committee member and I argue that unions should be prepared to collect affiliation fees for all three main parties.
This approach would only work if Labour was prepared to agree. There are clear advantages for Ed Miliband in being less dependent on the unions, but if the change was made as a “Big Bang” affecting all union members, Labour would lose too large a part of its donation income. It is also difficult to see that any large amount of public money could be used currently to fill the gap.

But we could make a start on reform. What is needed is a gradual process of change over a period of time. Tax relief on small donations to the main political parties, similar to charities’ gift aid, could ease the way – without requiring public spending.

A modest start could be made with new trade union members being given the choice of political party for their donation and stopping new corporate donors. Labour would expect to receive 40 per cent of the new union members’ donations and with tax relief on top, whilst retaining the pre-existing affiliation fees and the benefit of tax relief on its small donations. Other qualifying parties would receive their supporters’ small donations with tax relief. This would start a process of individualisation of donations.

The lists of individual donors coming through the unions would also provide a treasure trove of opportunities for the parties to involve these supporters in their activities and policy making. All three parties would be connected to millions of newly found friends. This would greatly strengthen engagement in our democracy. All three parties may find new opportunities for income generation or to convert these contributors into full party members.
The advantage of a gradual process rather than a “Big Bang” is that it would be possible to keep the changes under review to ensure fairness.

The early implementation of trade union “choice” for new members with gift aid and of the accounting changes would mean that after two years experience, there would be solid information from which to “model” effects on parties of donation caps at particular levels and also of the behavioural changes likely if trade union members had “choice”.
After two years experience of the changes and in accordance with the principles of sustainability in the Kelly Report, it would be possible to set a donation cap, set a timetable for full individualisation of donations, including “choice of party” for all union members and the ending of other non-individual donations. It would also be possible to see the impact of gift aid and access to the lists of new union member donors.

This would enable a proper judgement to be made on the case for and against further public subsidy, bearing in mind that the lower the donation cap, the larger the income gap faced by the parties. Even if no timetable was set at that stage for full individualisation, a steady process of individualisation of donations would continue.

What we need is a start on reform – a gradual process not a “Big Bang”.

* British Election Study 2010, internet pre-campaign survey – analysis by House of Commons Library

Two Standards Committees

Today is a busy day starting at the Standards and Privileges Committee, where we consider complaints made about Members of Parliament and also look into alleged breaches of the rules which stop people from obstructing the work of MPs. After that I am going to the meeting of the Committee on Standards in Public Life, which is taking evidence about funding of political parties. These two committees are often confused, but the first committee is a Parliamentary Select Committee made up of MPs, whilst the Committee on Standards in Public Life is not. It was set up by John Major after allegations of sleaze in order to set Standards for Public Life and has published 7 principles. Although it has a political member from each of the three main parties, the majority of members are lay members appointed by the Prime Minister from different walks of life : some are eminent academics, one a top accountant, another a former police chief and along with other members from other walks of life, our Chair is Sir Christopher Kelly, a former top civil servant. We are interviewing journalists and experts on Party funding and hope to report next year on how parties should be funded without suspicions of undue influence on policy from donors.

Later on I am attending a meeting to learn more about the current situation in Scandinavia.

My entry in the Legg report

This is what it says about my expenses in today’s Legg report (on page 75):

Mr Oliver Heald MP
North East Hertfordshire

                      Mr Heald has no issues.

Kelly Recommendations To Be Written Into Law

I was delighted when the Leader of the House of Commons conceded that legislation would be required to implement the recommendations in the Kelly Report on expenses and that they will bring in the changes.

At the time of the Queens Speech I asked the Leader of House, Harriet Harman, if she would support a Bill to implement the 11 law changes recommended by the Kelly Committee, her reaction was lukewarm and confused – saying “we do not want to legislate if that is unnecessary” (see the Hansard record of my request on 19 November, here).

All the main parties accepted the recommendations in the Committee’s report, yet the Labour Government stalled over the necessary law changes.

When I asked Harriet Harman if she would put the recommendations into law before the general election, she said that she thought some of the recommendations could be implemented using powers that already existed. Yet it was clear from the Kelly Report that this was wrong.

Positive Changes Emerging From the Expenses Scandal

The past few weeks have been difficult on many levels. At Westminster, MPs feel a sense of collective shame and remorse that the expenses system could have descended into such a mess. This is coupled with shock and disappointment at those Colleagues – many of whom have had long and distinguished careers in the House – whose behaviour appears to have gone far beyond anything acceptable. Change to the expenses regime has been swift and decisive. David Cameron took a strong lead by restricting the headings under which Conservative MPs could make claims for their additional accommodation and these restrictions have now been adopted across the House. We are all now waiting for the Kelly Report, which will undoubtedly recommend an open and transparent system for the future.

I would like to see an early General Election, but out of this awful mess, we are already seeing some positive consequences. Gordon Brown made an important Statement to the House on Constitutional Reform in a number of areas. There is going to be a national debate over the coming months on fundamental issues such as the power of the Executive, the size of Parliament, the composition of the House of Lords. However, I do doubt whether now is the right time to be considering a move to Proportional Representation – at the end of a parliament and after the governing party has had its worst election results for generations, particularly just after “PR” has let in two BNP MEPs. This issue needs more measured reflection and should not be a desperate last throw of the dice.

Last night, I went to a remarkable public meeting organised by David’s Bookshop in Letchworth Garden City, where these issues and many more were discussed. It was the best political meeting I have been to for many years. Understandably, I was asked about my own expenses in detail and was happy to give clear straightforward answers. But these questions were in the minority and far more speakers wanted to talk about the fundamental issues in our democracy and how change can strengthen it. The views I heard were sincerely and passionately held and arguments were carefully and thoughtfully presented. A spotlight has been shone on Parliament and although it has highlighted shortcomings which need to be sorted out, it has also galvanised the country into thinking seriously and constructively about how the institution can be improved.

To read a copy of the speech I made at last night’s public meeting click here.

I back the new Cameron Rules – my allowances

I fully back David Cameron’s announcement of a tough new approach on Allowances. We are right to be apologising to the public. I am a supporter of reform of MPs’ Allowances and have spoken in the House of Commons about this in the past. I was involved in making the decision to start publishing information on Allowances and I support independent external audit and increased transparency. Last year I backed David when he asked us to volunteer much greater information and I already have a link to the currently published information under “Oliver” on my web-site, http://www.oliverhealdmp.com.

I believe the current system needs a complete overhaul by an outside body and I support the wide-ranging review now being undertaken by the Committee on Standards in Public Life.

I will be following the new Cameron Rules and putting up my next claim for Additional Costs Allowance on line. I am also giving the new Cameron Review Body all the old claim forms and receipts, which the House authorities have sent me. The Review Body will check to see if they think any of my claims are wrong or unethical and whether I should pay back anything. I will follow their ruling.

The difficulty in publishing the bundles of documents as they stand is that they contain numerous pieces of genuinely private information such as staff addresses, bank details and the like. These documents have not been fully “redacted”, as they will be for publication. The House authorities are working hard on this and are very aware of the need to publish the details for all MPs as soon as possible. They have brought the date forward from mid-July and now hope to be ready in June.

I claim the allowance to pay for accommodation in London when I am there for Parliamentary work. I believe this is necessary. My main home has been and is in Royston 48 miles from London. The House of Commons now usually sits to at least 10.30pm on Mondays and Tuesdays; on Wednesdays to at least 7.30pm and to at least 6.30pm on Thursdays. The House may sit later on Treasury business or with Government support. I am on a number of Parliamentary Committees and have morning meetings at 9am. The 11.15pm train from London arrives in Royston after midnight and it would be necessary to take a train before 8am the next morning. Although it might have been possible to commute on a short term basis, I believe this would not have been sustainable over my 17 years in Parliament.

From 1992 to 2001 I rented a room in London. In 2001 I bought a studio flat in Lambeth and in 2003 I moved to a 2 bed flat in Lambeth. I paid Capital Gains’ Tax on the profit of £15,000 at 40 per cent. I claim Allowance for mortgage interest (of course, I paid the deposit and capital repayments) and for household costs and necessary repairs. I have never had a flat screen TV. I have never “flipped” my main home designation.

I claim the Office Costs Allowance to pay for equipment and materials for constituency casework.

I claim Mileage Allowance for my constituency work. The North East Herts constituency is one of the largest in the Home Counties and by far the largest in Hertfordshire at 181 square miles.

The PM’s Pre-Budget Gambit

It seems to me that the decision by the Prime Minister to make an announcement about MPs’ allowances the day before the Budget is a strange coincidence. MPs’ expenses are such a big issue in the papers right now that the Prime Minister may well be hoping that this will deflect attention away from the bad news the Budget will bring. This Budget will show massive borrowing by the Government, the biggest-ever rise in unemployment, the longest recession since the War and that all previous Government predictions were wrong, so the Prime Minister will be desperate to draw people’s attention away from it.

I certainly agree that reform of the allowances’ system is needed and I have long supported more transparency and better audit, but I am surprised that his announcement has been made just 3 days before the start of the Inquiry into Allowances he requested.

My relief that the Government has not blocked access to MPs expenses

Many people were worried – as I was – that the Government motion to exempt MPs from the Freedom of Information Act might be forced through by Government Whips, as threatened. The High Court has ordered certain information to be published and that is what must happen. It would be wrong for Parliament to act retrospectively to stop this. Of course, publishing 1.2 million records is a task and will cost £2 million, but I think the Courts must be respected. I do wonder if there might not be a better simpler system for MPs’ Pay and Allowances and for making the details public.

I was glad the Government backed down in the face of opposition from all parts of the House and in the country.

But as I pointed out in the debate (click here to see the Hansard), one good thing is that there will now be proper audit with an external element to check the accuracy of MPs’ claims and this is a step forward.

I am a member of the Committee on Standards in Public Life, which upholds the Seven Principles for Public Life established when the Committee was chaired by Lord Nolan: Selflessness, Integrity, Objectivity, Accountability, Openness, Honesty and Leadership. I was glad to have the chance to make the point in yesterday’s debate on new rules on Members of Parliaments’ allowances that MPs must set an example and follow these high standards.

Our Committee will be looking at the latest changes to the rules in February and considering whether an Inquiry is needed into the whole Pay and Allowances’ System to ensure that the Seven Principles are met. The advantage would be that our Committee is made up of ten independent individuals from many walks of life – with only three political appointees – and could give a fresh insight. The public might also find the system more worthy of respect if independently proposed and approved. It will be an interesting discussion. Parliament is sovereign and will ultimately decide the matter, but the Scottish Parliament did find an independent report on this helpful in making their decisions on their structure of Pay and Allowances for MSPs.

This morning’s Committee On Standards In Public Life Seminar

This morning I took part in the Committee On Standards In Public Life Seminar on the Survey of Public Attitudes Towards Conduct in Public Life. This survey had highlighted a decline in public trust in standards since our last survey in 2006. A disappointing finding indeed.

 

A key finding was that national politicians were trusted less than before, although local Members of Parliament were trusted much more.  There had been a downward trend in trust in Government Ministers with a fall of 4%, with 42% thinking they did a good job for the public, a fall of 4% thinking they were competent down to 38% and falls in confidence about openness, owning up to mistakes and making sure public money is used wisely. 

 

We discussed why this might be, with some saying that the question was not whether the public trust politicians, but whether politicians are trustworthy.  There were calls for a better system of accountability for all those in public office.  Another point made was that MPs are now using blogs and other internet tools to explain their work more fully and it was generally agreed that this was a good step in the right direction. 

 

I was certainly fascinated by the discussion, which included experts from the academic world, journalists, local government and many other walks of life.