Tuesday, 13 October 2009

Revisiting MPs’ expenses

It’s the beginning of a a new year in Parliament and MPs have received their letters from Sir Thomas Legg asking them to respond to his audit.  No problem with this then!  It’s what the public wanted…public accountability and pay-back time.  It may be very reasonable to accept this as the party leaders have done in an attempt to draw a line under the issue but many MPs, with some justification, think that the retrospective application of rules (decided by Legg it seems to me) is unjust and breaches the natural law of justice.  Are his conclusions reasonable? Probably.  Whether they are just is another thing.  I suspect the general public will be less than sympathetic feeling that MPs have got their comeuppance.  The problem is that Legg’s judgement sets an unfortunate precedent: that a retrospective modification of the rules is justifiable if someone thinks the rules were wrong in the first place and that circumstances have now changed.  Imagine the following: a decision is made by Parliament to reduce income tax by one pence but, five years down the line, an individual (say a prime minister) decides that because circumstances have changed and that the rules should be applied differently that we should all repay the income tax we should have paid, you can imagine the public’s reaction.  Now, I am not defending the appalling record of MPs on expenses but merely suggesting that they do have a point!

This brings me back to a point that I made in a previous blog.  Get rid of all MPs expenses except where they are approved in advance and replace them with a salary that takes into account the cost of travel to and from constituencies and the cost of housing in London during the parliamentary sessions.  All MPs should have the same basic salary (say £65,000 per year).  All, except those living within a thirty mile radius of Westminster should also have an allowance for housing costs (say £50 a night for eight months five days a week; or £250 a week).  Transport costs should be calculated on the basis of distance from Westminster with Inner London MPs getting nothing with a progressive increase the further you are from London.  This should be based on second class off-peak rail travel and if MPs want to upgrade to first class or fly then they make up the difference.  Office costs in the constituencies should be the financial responsibility of local party associations and in London should be paid out of public funds (say £300 a week maximum).  So an MP’s salary would consist of basic pay + housing costs + travel to constituency and individuals would be expected to pay everything out of this figure (perhaps £80,000 per year).  This solution would eliminate the question of expenses in virtually all areas. If MPs want to pay for cleaning or gardening then, like the rest of us, they pay for it out of their salaries. 

Expenses would only be allowed when they are in pursuance of their role as an MP and where approved in advance by an independent auditor.  I remember when I was teaching that, when I wanted to go on a course I had to justify why and explain why it would be of value not simply for me but to the institution as a whole.  This applies equally in business and should apply to MPs.  So no fact-finding visits to the Bahamas or Mauritius! 

As it is clear that MPs are incapable of regulating themselves, a system is needed that leaves no room for equivocation and where salaries and expenses claimed (and rejected) and any addition income from ‘outside sources’ are published monthly.  This should eliminate duck houses, moats and new lawns!

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