MPs face fines for abusing expenses

MPs who abuse their expenses face being fined under new proposals to beef up the role of Parliament's standards watchdog.

A new compliance officer at the Independent Parliamentary Standards Authority (Ipsa) will be responsible for investigating alleged breaches of expenses rules and be given the power to impose civil penalties on errant MPs.

The plans, unveiled by Commons Leader Harriet Harman, would also give Ipsa the power to set MPs' pay and pensions from 2011-12.

Today's proposals are based on the recommendations by Sir Christopher Kelly, Chairman of the Committee on Standards in Public Life.

In a written statement to Parliament, Ms Harman said the creation of a compliance officer was originally contained in the legislation to set up Ipsa but was removed in the face of opposition.

Ms Harman said: "As it now appears that allowing sanctions to be imposed directly by the regulator is acceptable, the Government will introduce amendments to the 2009 Act to give the compliance officer the power to impose sanctions, namely a civil penalty, as well as requiring restitution of wrongly paid allowances.

"Repayments, monetary penalties and costs will also be made recoverable as civil debt."

MPs will have the right to appeal against any fine and parliamentary sanctions can still be imposed by the Committee on Standards and Privileges.

Ms Harman conceded that new legislation would be needed, despite Ministers previously insisting most of the recommendations in Sir Christopher's report could be met without additional laws.

Ms Harman said: "We have already made changes, and implementing the various recommendations of the report by Sir Christopher Kelly is another vital step on that path to restoring public confidence.

"Parliament did not sit back waiting for Kelly. The current allowance system is already very different from the one which allowed for the claims which have angered both the public and the House.

"This House of Commons has yet to fully resolve this damaging episode.

"But with clear acknowledgement of the public anger, with firm action already taken, with the Kelly report and the establishment of the Independent Parliamentary Standards Authority - this will be resolved."

Tory leader David Cameron clashed with Gordon Brown over the issue of new laws following last month's Queen's Speech, which contained no mention of legislation to implement the Kelly report.

The Government said it would bring forward legislation on the details on a cross-party basis.

Ms Harman said legislation would be required to allow Ipsa to dock or remove the "golden goodbye" paid to expenses-abusing MPs who step down or lose their seats.

The Parliamentary Standards Act will also be amended to establish the new compliance officer post.

Legislation will also be needed to allow three lay members from outside Parliament to sit on the Speaker's Committee overseeing the running of Ipsa.

The Kelly report also recommended removing the responsibility for the register of financial interests and the code of conduct from Ipsa and returning it to the House of Commons.

Ms Harman said parts of the Parliamentary Standards Act would be repealed to achieve that.

Justice Secretary Jack Straw held talks about the new proposals with Sir Christopher and Ipsa chairman Sir Ian Kennedy, who is in charge of drawing up the new allowances system.

Mr Straw pleaded for all parties to co-operate to get the new laws through Parliament.

He said: "What happened under the old allowances system has badly knocked public confidence in the political process.

"It is vital that this confidence is restored. The proposals set out today are an important step towards that goal and I hope all political parties in Parliament will support the legislative changes which the Government now proposes, and ensure that the new independent regulatory system is in place for the start of the next Parliament."

The new allowances system will be drawn up by Ipsa following a consultation period.

There have been fears from reformers that Sir Ian would seek to drop parts of the blueprint for the new regime contained in the Kelly report.

The Prime Minister's spokesman denied the Government had performed a U-turn.

"I would not describe it in those terms at all," he told reporters.

"We always said we would bring forward necessary legislation."

Asked why the measures had not been included in the Queen's Speech, he said: "We did not know at that time the detail of what it was that might be required to be legislated for."

Shadow Commons leader Sir George Young said: "We're relieved that the Government has finally accepted our arguments that some legislation was necessary now to implement Kelly in full.

"We look forward to giving the Government our support. We must get the new system up and running so that the next Parliament can start off with a clean sheet."