The cost of politics

Events in the past few days have brought together two distinct but connected issues over how Britain funds its politics.  The Independent Parliamentary Standards Authority (Ipsa) has recommended that MPs’ pay should be increased by £6,000 to £74,000 a year from 2016 with increases after that linked to average earnings across the economy.  This has been condemned by all the party leaders and by some MPs as incomprehensible increase at a time of austerity and, they argue, could damage Parliament’s reputation.  However, government does not have a veto and MPs will not get to vote in their pay rise.  Despite linking the pay increase to new pension arrangements, reduction in ‘resettlement payments’ if MPs lose their seats and tightening control over business costs and expenses, they are probably right but this not mean that Ipsa has got it wrong.  MPs’ pay has fallen over over  many years compared to other positions in the public sector and with MPs’ pay around the world.  Until Ipsa was set up in the wake of the expenses scandal as an independent body, MPs decided their own pay resulting in what Ipsa chairman Sir Ian Kennedy says was ‘a catalogue of fixes, fudges and failures to act’. 

The question of selecting parliamentary candidates at Falkirk and the suggested illegality of the actions of Unite has raised, yet again, the question of how political parties are funded.  In November 2011, the Committee of Standards in Public Life, chaired at the time by Sir Christopher Kelly, proposed a cap on individual donations of £10,000 but added that it would not be possible to exempt union donations so long as people were automatically affiliated to Labour without individuals having made a positive choice.  The Kelly Report also proposed that taxpayers should subsidise political parties for each vote they got.  This would remove the the rhetoric of funding with Labour attacking Tory donations from the rich and privileged and the Tories attacking Labour for being in hock to the unions.  Like MPs’ pay, this issue has rumbled on for years with both the Tories and Labour paying more heed to the rhetoric of funding than to whether public funding would remove the cash for honours, secret funding, dinners for donors and cash in envelopes.  The choice is a stark one: should political parties be funded entirely from taxation or should there be a free market for party funding with parties getting what they can from donors of whatever hue? 

Related to both these issues has been the revival of the question of whether MPs should have second jobs.  I must admit that, with the proviso that MPs declare their interests, I’ve always been in favour of this.  It isn’t that this gives MPs an understanding of the ‘real world’—it rarely does given the sort of jobs they do—but what it does do is give them an alternative perspective to the Westminster village.  We have been moving, almost inexorably, over the last forty years towards the development of the ‘professional politician’, someone who goes to university, then becomes a research assistant in Westminster and finally becomes an MP.  Their lives are political, their horizons political and their job aspirations political—narrow horizons, narrow interests and all-consuming ambitions.  They often become MPs in the mid- to late-twenties and , depending on the safeness of their constituencies, could be in the Commons for the next forty years and where their horizons narrow even further. 

So what’s the solution.  I’d double MPs’ pay and remove all the myriad expenses they claim--the exception would be second-class or economy-class travel to and from their constituencies—and publish their tax returns annually.  I would fund political parties out of taxation following Kelly’s suggestion that it should be based on the number of votes they garner.  Individuals and organisations could still make donations to political parties but these would be limited to £10,000 a year, would not be tax-deductible and would be paid to the political parties quarterly as well as monitored through Ipsa.    As far as second jobs are concerned, I’d like to see this extended—reduce Parliament to a four-day week so that MPs can do work experience on the other day.  Now that would be really popular—with the public at least!