Trust In Politics

A programme for restoring public respect

for the political system

By The Conservative Party Democracy Task Force

Democracy Task Force

Summary and recommendations
The Democracy Task Force makes the following
recommendations to David Cameron for action by the next
Conservative government to enhance transparency and
improve trust in British public life:
• Party funding should be reformed along the lines already
indicated in Conservative Party proposals, with reduced
limits on general election spending, caps on donations, the
winding down of corporate, institutional and trade union
donations and some increase in state support
• The link between honours and party funding must be broken
by taking awards completely out of the hands of ministers,
including the Prime Minister
• Investigation of breaches of the Ministerial Code should be
made more transparent and placed in the hands of the
Parliamentary Commissioner for Standards. However, the
final decision as to whether or not a minister should resign
must rest with the Prime Minister
• The work of the Advisory Committee on Business
Appointments should be put on a statutory basis and its
recommendations should be binding on ministers, senior
civil servants and special advisers
• MPs should no longer vote on their own pay and
allowances. The implementation of review body
recommendations should only be overturned by primary
legislation. To avoid the need for major one-off adjustments,
changes in MPs’ pay should be based on a representative
benchmark such as the change in average earnings or in
public sector pay
• The current MPs’ pension scheme should be closed to new
entrants, with a new system based on defined contributions
• There should be greater clarity in separating out those
elements of allowances which do not go directly to MPs
(such as staff salaries and stationery) and those that do. The
direct payments should be subject to greater clarity and
more rigorous audit.
• The Communications Allowance should be abolished
Trust in Politics
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Introduction
In recent years, a crisis of trust has enveloped governments
of both parties. The Conservative government of 1992-97
was constantly accused of ‘sleaze’ and the loss of the party’s
reputation for probity was a significant factor in the massive
defeat of 1997. The New Labour government that followed
promised, famously, to be ‘whiter than white’. The subsequent
disillusionment has been, if anything, still greater. A steady
troop of forced ministerial resignations has been accompanied
by serious questions over the access to power and patronage
that money can buy, culminating in the first-ever interviewing
by the police of a Prime Minister in office. Within weeks of
Gordon Brown’s launch of proposals to restore trust, a second
police investigation has been undertaken in response to
admissions of unlawful Labour party funding. Meanwhile, the
costs of democratic politics have spiralled.
It is important not to feed an exaggerated view of malpractice
in British politics. International studies show that corruption
levels in the UK are significantly below the average for the
EU and for other advanced countries. The most recent
assessments from Transparency International rank the UK
eleventh equal among the least corrupt countries in the world.
Nordic countries predominate among those with markedly
better scores, while the British position is comparable to that
of Canada and Australia, and markedly better than that of
countries such as Germany, France and the USA1.
Analysis within the UK produces similar findings. In the case
of MPs’ behaviour, the Eighth Report of the Committee on
Standards in Public Life found that “standards in the House of
Commons are generally high; the overwhelming majority of
members seek to, and in practice do, uphold high standards of
propriety.” The most recent report by the Parliamentary
Commissioner for Standards presents a similarly encouraging
picture of improvement as far as MPs’ conduct is concerned,
though noting that “standards in public life were much in the
headlines” for other reasons, notably party funding and issues
of adherence to the Ministerial Code2.
However, there have been significant lapses and public
expectations of clean public life are, quite rightly, high and
rising. It is on this basis, rather than on international
comparisons, that our political leaders will be judged. Recent
scandals over ministerial conduct and, especially, party
funding are matters of proper concern, while a number of
other practices, such as MPs setting their own pay, remain
anomalous. The government’s Green Paper, The Governance
of Britain, addresses some of these questions but not all, and
in the view of the Democracy Task Force, a number of its
proposed solutions do not go far enough.
1. Transparency International, Corruption Perceptions Index 2006; www.transparency.org
2. Committee on Standards in Public Life, Standards of Conduct in the House of Commons:
Summary of Eighth Report (2002); Parliamentary Commissioner for Standards, Annual Report
2005-06 (July 2006).
This short report complements the other work of the
Democracy Task Force. We have already brought forward
proposals to repair constitutional relationships that have
been damaged in recent years, notably those between Prime
Minister and Cabinet, Ministers and Civil Servants, and the
Executive and Parliament. These include a Civil Service Act;
a reduction in the number of special advisers; an expanded
Ministerial Code to enhance the collective working of cabinet
government; better and more independent government
statistics; greater control by the House of Commons over its
own timetable; and stronger Select Committees. This paper
focuses on issues of accountability and probity in the day
to day conduct of our politics. Its underlying philosophy
is entirely consistent with that of the earlier papers. We
emphasise transparency and the use of clear procedures to
redress the informal and arbitrary use of political power
and patronage.
Peerages and the honours system
The biggest recent centre of concern, and of serious doubts
about the probity of the political system, has been the award
of honours and in particular the link of the award of peerages
to party donors. Recent events have given this issue a level of
public profile not seen since the days of Lloyd George and the
honours broker Maundy Gregory. This is in spite of attempted
reforms by both parties in government over the last fifteen
years. Further change is badly needed.
The first requirement of reform is that the link between
honours and party funding must be decisively broken. Parties
have engaged in expensive (if not always effective) election
campaigning methods, while the parties’ financial base has
narrowed. As a result, there has been constant pressure to seek
new sources of finance and to exploit loopholes in the rules:
for example, using loans rather than donations. The
Conservative Party has published elsewhere its proposals3 for
party funding reform. These are designed to ensure that
neither individuals, corporations, trade unions or other
institutions, donors and sponsors can capture parliament and
secure back door influence. This will require a number of
measures which need to be considered as a package:
• A cap on donations (set initially at £50,000) from any
individual or organisation, and the gradual winding down
of corporate, institutional and trade union donations
• A ban on loans to parties, except by financial institutions on
commercial terms
3. Andrew Tyrie MP, The Conservative Party’s proposals for the funding of political parties
(Conservative Party, March 2006)
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• A reduction in general election spending limits from £20
million to £15 million.
• Income tax relief on small individual donations (up to
£3,000 per annum) to eligible political parties and a
taxpayer financed match-funding scheme to eligible political
parties to encourage local participation.
• Consideration of a scheme to link taxpayer financed support
to votes won at the previous General Election.
The second requirement for reform is that the honours system
should be taken completely out of the hands of ministers.
Apart from peerages, honours must be awarded solely on the
basis of an independent assessment of achievement.
Appointment to the House of Lords should be by an
independent body based on an assessment of the ability and
the likelihood of that individual making a useful contribution
to the work of the legislature. If the Commons succeeds in
following through its recent votes in favour of a largely or
fully elected House of Lords, the issue of how appointments
were made would greatly diminish or disappear. However,
prior to reform – or if a change in the composition in the
chamber were to include a continuing appointed element
– appointment to the Lords should be based on an assessment
of an individual’s ability to contribute to legislative work and
it should also reflect political support in the country.
The Democracy Task Force therefore endorses the
Conservative party’s existing proposals for changes to the
honours system. The current framework for awarding or
reviewing honours – comprising the House of Lords
Appointments Commission, as well as the ceremonial unit
within the Cabinet Office for other honours – would be
subsumed within one body, the Honours Commission. This
would be put on a statutory basis and would take on the task
of recommending all honours to the Queen with the Prime
Minister undertaking not to alter recommendations. For the
bulk of awards, this would mean that the ceremonial unit’s
work would continue, but at arms’ length from ministers.
With respect to peerages, the new Honours Commission
would have a stronger role than the powers of vetting
and review held by the House of Lords Appointments
Commission. Anyone, including the party leaders, would be
able to make recommendations to the Commission. However,
since the decision would rest ultimately with the Commission,
the potential link between financial support for a party and
honours would be finally broken.
The Honours Commission should have the power to check
whether or not nominees for the Lords have made loans to
political parties, and make other such checks as they consider
appropriate, whereas current rules apply only to donations4.
This would also mean that political honours would still be
part of the process as a whole. We see no reason why political
service should be recognised any less than other forms of
public service – but awards for political service would be
divorced from direct patronage.
We believe that changes on this scale are required to overcome
the current loss of trust in the system. The Government’s
Green Paper’s treatment of the topic is inadequate. It has
nothing to say about either party funding or appointments to
the House of Lords, and with regard to other honours merely
states that Mr Brown will maintain his predecessor’s
commitment (made in March 2006) neither to add to nor to
subtract from the list of names put to him5.
‘No one resigns’: the Ministerial Code
Second only, perhaps, to issues of funding and honours
in eroding public trust in politics has been the issue of
ministerial conduct and the degree to which ministers can
be held to account.
Our report, An End to Sofa Government, proposed an
extension of the Ministerial Code to address issues of
procedure to help restore functioning cabinet government.
Here, however, we address issues of enforcement of the
existing Code, which focuses on issues of ministerial conduct
and probity.
We believe that there should be a distinction between
investigation of alleged breaches of the Code and a final
decision as to whether or not particular conduct is a resigning
matter for a minister. The power to appoint and dismiss is
central to the role of the Prime Minister, and we believe that
this should not be pre-empted by another body. If the Prime
Minister is determined to keep a particular minister in post,
that is a political judgement that he or she must make, and
take the possibly serious political consequences.
The Democracy Task Force recommends that the
Parliamentary Commissioner for Standards should take on the
role of investigating potential breaches of the Ministerial Code
and be given access to all relevant records and papers and
should publish his conclusions. The decision to investigate
should rest with the Commissioner himself, though anyone
(including the Prime Minister, or an accused minister)
should be able to ask him to undertake an investigation. The
4. The Conservative Party’s proposals …, especially pages 6 and 15. The Honours Commission 6. The Governance of Britain, p. 39.
proposal is also to be found in the House of Commons Public Administration Select Committee
report, A Matter of Honour: Reforming the Honours System (2004)
5. The Governance of Britain, p. 30.
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Government’s Green Paper, by contrast, keeps the power to
request an investigation (by ‘a new Independent Adviser … on
Ministers’ interests’) in the hands of the Prime Minister alone.
The Parliamentary Commissioner has established an excellent
reputation and is the obvious person to take on this new role.
Judgements on Ministerial conduct should be based on the
same principles as judgements on standards in public life as
a whole6.
The appointment of the Commissioner himself should not be
in the hands of the Prime Minister, but should be by a cross-
party group of senior parliamentarians, with advice from the
Civil Service Commission.
Leaving office: ministerial appointments
A number of quick appointments to new outside jobs of
outgoing ministers, civil servants and political advisors have
done further damage. The impression is left that some people’s
actions in government may have been swayed by the prospect
of future employment in particular parts of the private sector,
or that, by taking up an outside appointment in an enterprise
or lobbying group very shortly after leaving office, their inside
knowledge of government relations with that enterprise might
confer an unreasonable advantage to a particular firm.
The Democracy Task Force therefore recommends that the
work of the Advisory Committee on Business Appointments
should be put on a statutory basis, with its work incorporated
in provisions of a Civil Service Act and of a revised
Ministerial Code. It should be a legal requirement for
Ministers, senior civil servants and special advisers to consult
the Committee before taking on a post, and there should be
sanctions for disregarding its advice.
MPs’ pay and allowances
Much of the controversy over MPs’ pay and allowances is
caused by MPs themselves having to vote them into effect.
The impression that is eagerly presented in the media, is
one of ‘trotters in the trough’, of politicians lining their own
pockets. The truth is more complex. Governments have
frequently asked MPs to vote for cuts in the recommendations
made by the Senior Salaries Review Board (SSRB), with
the result that anomalies in pay between MPs and those in
comparable jobs have grown to a level that has subsequently
required massive, and thus controversial adjustments.
However, the media and the public have a point: there is
something unacceptable about MPs’ unique arrangement in
setting their own pay, and it cannot be allowed to continue.
The Democracy Task Force therefore proposes that the next
Conservative government should end the practice of MPs’ pay
awards being determined by Parliamentary resolution. Instead,
it should legislate that the implementation of MPs’ pay awards
should be in the hands of the SSRB or whatever other body
sets them. MPs would only be able to intervene by amending
or repealing this primary legislation.
To reduce further the prospect of sharp increases in pay, the
review body should be required to base changes in MPs’ pay
on a benchmark, such as the growth of average earnings in the
country as a whole or possibly that of public sector pay. This
will link MPs’ earnings to the same fluctuations, the same
gains and risks as those of the workforce as a whole, or
alternatively to a significant part of the workforce that could
provide an obvious base for comparison. Inevitably, the
review body will occasionally have to reassess the
appropriateness of the level of MPs’ pay, and this may result
in some adjustments. However, we do not believe that such
adjustments would be likely to be large.
The review body should be asked to treat MPs’ pensions in a
similarly independent fashion. Over the last ten years, there
have been radical changes in private sector pension provision,
resulting in sharp cuts in the number of final salary schemes
and their replacement by defined contribution schemes. We
believe that MPs’ current pension arrangements – a generous
index-linked and funded final salary scheme, based on historic
civil service arrangements – are out of line with expectations
of public and private sector pension plans in future years and
are no longer acceptable. The Democracy Task Force
therefore recommends the closure of the current scheme to
new entrants and its replacement by a defined contribution
scheme, with employer and employee contributions at a level
set by the review body. We anticipate that, in accordance with
the private sector practice of recent years, these employer
contributions are likely to be less generous than those of the
current scheme.
However, neither pay nor pensions generates the level of
criticism recently aimed at MPs’ allowances. There is a real
issue here, but it is important to be clear as to what it is.
At the moment, the House of Commons publishes details
of individual MPs so-called allowances which detail their
expenditure on travel, on accommodation away from home,
on Incidental Office Expenditure and on staff salaries. The
press add these up and refer to them as “MPs’ expenses”.
This is seriously misleading. For example, the expenditure
Trust in Politics
4
on staff salaries is made directly by the House of Commons
to members of staff against a contract of employment.
Allowances also include office equipment and stationery
paid for by the House authorities directly. This expenditure
is of a different nature to the rest and should be accounted
for differently. We recommend that members should be able
to draw on a central staff allowance of up to the existing
maximum, and that accumulated total should be published
along with the related central costs of providing services
and accommodation at Portcullis House and other offices
at Westminster. The present practice of reporting this
expenditure as if it is the reimbursement in cash of individual
MP’s expenses is bringing Parliament and politics into
groundless disrepute.
Only those allowances which involve cash passing through
MPs’ hands should continue to be published as at present
because they reimburse members for their individual
expenses and are under the direct control of members
themselves. For these allowances, there is certainly scope for
more rigorous audit than is undertaken at present. There is a
need for greater clarity and tighter definition of what can be
included in, for example, the Additional Costs Allowance
(designed to cover the additional costs incurred by MPs who
have to live in two places). The levels, based on public and
private sector practice, are already set by the SSRB and
should continue to be so. Greater information as to how
claims are approved would help build public confidence. The
House of Commons’ audit procedures should reflect, and be
seen to reflect, best practice in the private and public sectors.
Consideration should be given to the greater use of outside
independent audit.
The expansion in MPs’ allowances in recent years has also
raised serious questions about the use of public funds to
entrench incumbent advantage. The recently-approved
‘communications allowance’ offers significant dangers of
this kind, providing £10,000 per year to sitting MPs to
communicate with their constituents. This allowance,
proposed and promoted by the present Government, not only
delivers a publicly funded advantage to incumbents but also
has an undesirable inflationary impact on local campaigning
costs. In the words of the Labour MP, Tony Wright, “It’s going
to be an exercise in shameless self-promotion. It’s going to tell
people how wonderful we are and is paid for by our
constituents.”7 The Democracy Task Force recommends that
the next Conservative government should scrap the
communications allowance. No new allowances should be
introduced except by the Review Body, who did not of course
ever recommend the ‘communications allowance’.
7. Tony Wright MP, debate on Communications Allowance, Hansard, 28 March 2007.
The question of MPs’ pay and allowances also raises
the question of the overall cost of politics – which has Task Force membership
undoubtedly risen over the last ten years – and of whether or
not the existing size of the House of Commons is appropriate. Rt Hon Kenneth Clarke QC MP (Chairman)
The Democracy Task Force is sympathetic to a modest Ferdinand Mount
reduction in the number of MPs in the House of Commons Laura Sandys
in the context of further measures to decentralise power. Andrew Tyrie MP
Rt Hon Sir George Young Bt MP
Roger Gough (editor and rapporteur)
Conclusion
Public expectations of probity in British politics are rising, Rt Hon Lord Butler of Brockwell and Sir Christopher
and justifiably so. The current government took office Foster are members of the Task Force and have given
promising to meet those expectations: its failure to do so, expert advice on a non-party basis. They support its
coupled with the rapidly rising cost of politics, has only added recommendations but are not signatories to party political
to disenchantment and scepticism about the political process. statements expressed in this report.
We believe that the reforms set out in this paper will reduce
the gap between public expectations and the reality that our
system delivers. Reforms to the interlinked problems of
party finance and the honours system are the most critical to
restoring credibility, followed by greater transparency over
investigations of breaches of the Ministerial Code and new
rules for jobs for ex-ministers. Changes to the setting of MPs’
pay, pensions and allowances are vital to overcoming the
sense that there is a political sphere ‘out there’ in which the
rules under which the general public live do not apply.
The sense that there is a political class separate from the
rest of the country is dangerous to democracy. That belief
has increased in the last ten years. The next Conservative
government must act to dispel it.

Promoted by Alan Mabbutt on behalf of the Conservative Party, both at 30 Millbank, London SW1P 4DP

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