Commons still shy of Lord Nolan's key idea

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A Labour bid for an immediate move to "stamp out the impression of a Parliament for hire" failed last night when MPs voted by 282 votes to 248 to postpone a decision on whether to make a public declaration of any money they earn from consultancy work.

Lord Nolan's key recommendation for improving the public standing of the Commons will now be subject to a further round of study by a committee of MPs with a view to a final decision in October.

In an acrimonious debate, Labour MPs voiced a strong suspicion that the extra time granted to the Select Committee on Standards in Public Life was an attempt to kick the consultancy issue into the long grass.

Dale Campbell-Savours, MP for Workington, said Conservatives were out to block the reform of consultancy advocacy. "They simply cannot afford to live on pounds 33,000 a year. Conservative MPs with two kids away at public school are spending before tax over 30 grand a year. They know that if they are going to pay their bills they have to find ways of using Parliament to earn extra cash."

At present, MPs are only required to declare the source of outside earnings, not the amounts. The select committee will also give further consideration to Nolan's recommendation of a ban on MPs working for specialist lobbying firms - a move supported in principle by several Conservatives.

Iain Duncan-Smith, MP for Chingford, gave notice he would propose drawing the line at advocacy, whether for a consultancy or a trade union. The best thing to do was "cut out the cancer at source".

Sir Edward Heath said Labour MPs were "consumed by the insatiable desire of prying into other people's affairs. This time they believe it is going to give them an enormous electoral advantage when the general election comes."

Cheered by Tory backbenchers, the former prime minister flatly rejected Lord Nolan's recommendations and said MPs were able to look after their own affairs. He accused Ann Taylor, shadow Leader of the Commons, of "screaming for immediate action without any proper consideration at all". If the Nolan proposals were accepted the process would not stop there, said Sir Edward, who lists extensive outside work in the Register of Members' Interests.

"The pressure will go on for more and more details and next Mrs Taylor will be demanding bank accounts, she will want all Members' bank accounts to be shown to her."

Opening the debate, Tony Newton, Leader of the Commons and chairman of the committee, said it was not clear whether the ban on consultancies with multi-client organisations proposed by Nolan was meant to apply "only to what can be described as lobbying and public relations firms or to organisations of any type. If it is just lobbying organisations that are to be covered by any ban, we need to establish a clear and workable definition".

Rejecting Labour's call for speedier action, Mr Newton said the Nolan report itself criticised the existing rules for their lack of clarity and uncertainty. "We shall do no service either to the reputation of this House or to the standards of public life if we simply replace one set of ambiguities and uncertainties with another."

Mrs Taylor said the debate gave MPs an opportunity to start the long process of restoring public confidence in the House and the democratic process.

"If we get it wrong then public confidence will be reduced even further and we will all be tarred with the same brush and we will all be blamed for the abuses of the few who flout the rules."