In 2009, the UK Parliament was rocked by a major scandal. The scandal was triggered by the leak and subsequent publication by one of the UK’s major newspapers, the Telegraph, of expense claims made by members of both the House of Commons and the House of Lords over several years. These disclosures revealed widespread misuse of the Additional Cost Allowances (ACA) members were able to claim. The UK Parliament had been fighting disclosure of these expenses for years.
Compared to the UK expenses scandal, the current Canadian Senate expenses scandal is relatively minor. The abuses uncovered in the UK were quite extensive. Alongside specific allegations of incorrect claims such as claims for the cost of mortgages which had already been repaid in full, the Telegraph alleged that parliamentary expenses rules gave wide scope for a number of abuses, especially those related to costs of maintaining two residences, one in the constituency and one in London. Areas of questionable claims highlighted by the Telegraph included (but were not limited to):
- Nominating second homes: MPs and peers were able to ensure that their second home was the one which enabled them to claim more expenses. In at least one case, the nominated home was near neither constituency nor Westminster.
- Re-designating second homes: MPs were able repeatedly to switch the designation of their second home, enabling them to claim for purchasing, renovating and furnishing more than one property. This practice became widely known as “flipping”.
- Renting out homes: MPs were able to claim for their “second home” while they were, in fact, renting other homes out. In most cases the rented homes were ‘third’ properties, but in one case, a second home was rented to another MP, who was claiming the rent on expenses.
- Over-claiming for council tax on second home: MPs were able to round up actual amounts due, claiming for 12 monthly instalments where only 10 were due or by claiming up to £250.00 per month with no receipt required until those rules were changed. Over 50 MPs were alleged to have over-claimed council tax.
- Subsidising property development: The rule that MPs could not claim for repairs “beyond making good dilapidations” was not enforced and consequently MPs were able to add significantly to the value of a property. By implication some “second homes” were effectively businesses (not homes) since they were renovated on expenses and then rapidly sold.
- Evading tax and inappropriate attempts at avoiding tax: MPs either evaded tax, or inappropriately deemed themselves not required to pay tax on reimbursements when it was likely tax was due.
- Claiming expenses while living in grace and favour homes: Ministers with “grace and favour” homes in Westminster as well as their existing primary residence were able to claim for a further “second home” in addition.
- Renovating and furnishing properties when standing down: MPs were able to claim for renovations and furniture even when they had already announced their intention to resign from Parliament.
- Furnishing of other homes: MPs were able to claim for items of furniture that were actually delivered somewhere other than their second home.
- Exploiting the ‘no receipt’ rule: MPs submitted a large number of claims for just below £250, the ceiling under which they were not required to produce receipts, without being challenged as to their legitimacy.
- Over-claiming for food: Under a rule permitting up to £400 for food each month (without receipts), MPs were simply able to claim the whole £400 every month, even when Parliament was not sitting.
- Overspending at the end of the financial year: MPs were able to submit claims just before the end of the financial year, so as to use up allowances, without being challenged as to their legitimacy.
There was massive political fall-out from this scandal. The Speaker of the House of Commons, Michael Martin, was forced to resign because of his handling of the crisis. He appeared to be far more concerned with the fact that the information was leaked to the Telegraph than with the actual abuse of expenses. MPs from his own majority party, Labour, and the minority opposition party, the Conservatives, felt he had lost the confidence of the public and the House in general. Martin was the first Speaker to be forced out of the office by a motion of no confidence since John Trevor in 1695. A number of ministers resigned. A number of MPs from both Labour and the Conservative parties announced they would not seek re-election. Four MPs and 2 Lords were charged and convicted of various criminal offenses.
However, the scandal had a silver lining. Public outrage and anger over the expenses scandal drove home the fact to MPs and Lords alike that Parliament needed to change if it hoped to regain the public’s trust. One of the first reforms implemented, in May 2009, was the creation of the creation of the Independent Parliamentary Standards Authority, intended to manage Members’ expenses at an “arm’s length” from the House, ending the historical self-policing by MPs of their expenses.
The next initiative was the striking of the Select Committee on Reform of the House of Commons, which was appointed by the House of Commons on 20 July 2009 to consider and report by 13 November 2009 on four specified matters and related matters:
- the appointment of members and chairmen of select committees;
- the appointment of the Chairman and Deputy Chairmen of Ways and Means;
- scheduling business in the House;
- enabling the public to initiate debates and proceedings in the House
More commonly known as the Wright Committee, after its chair, Tony Wright, the committee’s report led to the adoption of by the UK House of Commons of the many reforms about which I have frequently written. These reforms include: the creation of the Backbench Business Committee, various initiatives to increase public involvement in the legislative process and other House business; the election of select committee chairs and select committee membership, etc.
The Wright Committee understood why it had come into being and what it needed to do. To quote from the introduction of its November 2009 report, Rebuilding the House:
1. We have been set up at a time when the House of Commons is going through a crisis of confidence not experienced in our lifetimes. This is largely, but not exclusively, because of the revelations about Members’ expenses, bringing with it a storm of public disapproval and contempt. Public confidence in the House and in Members as a whole has been low for some time, but not as low as now. It is not too much to say that the institution is in crisis.
2. The storm has been gathering, but has now reached its climax. In 2001 a survey found that 30 per cent of people were dissatisfied with how Parliament was doing its job; in 2009, in the wake of the expenses scandal, dissatisfaction with the Commons was a massive 71 per cent (Ipsos/Mori). This demands a response, if public confidence in the central institution of our representative democracy is to be restored. Action is already being taken to establish a transparent, fair and independently regulated system of allowances. This is necessary, but not sufficient.
3. The great majority of Members of Parliament work extremely hard. Members are in closer and more regular contact with their constituents than ever before, and dedicate a great deal of time to serving their interests. But while the House of Commons remains the central institution of British democracy, in both real and symbolic terms, there is a sense in the country that it matters a good deal less than it used to. We believe that the House of Commons has to become a more vital institution, less sterile in how it operates, better able to reflect public concerns, more transparent, and more vigorous in its task of scrutiny and accountability. This requires both structural and cultural change. This report by necessity focuses on structural changes, but we hope they will lead gradually to a change of culture. The core business of Parliament has to matter more to the public and to individual Members. At present many Members do not see the point in attending debates or making the House the primary focus of their activities. In order to address this we must give Members back a sense of ownership of their own institution, the ability to set its agenda and take meaningful decisions, and ensure the business of the Chamber is responsive to public concerns. We believe this is what the public demands, what the institution needs and what most Members want. The present crisis presents an opportunity to make some real progress with this.
4. Without the shock of recent events, it is unlikely that this Committee would have been established. Yet the case for an inquiry such as ours was already strong, and becoming ever stronger. Since 1997 the Modernisation Committee has presided over a number of reforms, some of which—such as sittings in Westminster Hall and oral questions without notice to Ministers—have proved successful. However, a number of the proposals from that Committee, and the Procedure Committee and others, have been shelved, sidelined or simply disregarded, often without being put to the House, which is dispiriting for reform and reformers. A steady stream of reports from outside bodies have made the case for significant parliamentary reform. Meanwhile, the Modernisation Committee has run out of steam and not met for over a year.
5. We have a rare window of opportunity. There is an appetite for reform inside the House and among the public at large. We have a newly elected Speaker expressly committed to it. Backbenchers are fed up with their inability to make a difference and the deadweight of timeworn procedures. Select committees are universally praised but have few opportunities to initiate debates or propose amendments to legislation and sometimes struggle to maintain a quorum. Thirty years ago, in the closing period of the 1974–79 Parliament, our predecessors took the bold step of proposing a system of departmental select committees, which have now become integral to the work of the House. Unlike our predecessors, we have had to work at high speed under a very tight timetable, but hope to have produced proposals which—if implemented—may have an equivalent impact.
The Senate scandal in Canada could be a rare window of opportunity to finally implement real and lasting reform – not only of the Senate, but of our Parliament as a whole. Sadly, I doubt that will happen.