Saturday, April 05, 2008

MP's face more humiliation over their allowances.

The House of Commons authorities have been forced to give up a small amount of detail concerning some MP's allowances and once again the newspapers are awash with lurid tales of John Prescotts eating habits and Gordon Browns TV choices.

The range of allowances given to MP's fall into three broad categories:
1) expenses for the provision of and for running their constituency office and staff,
2) expenses connected to communicating with their electorate, and
3) expenses connected to the costs involved in working in London and/or maintaining a home in their constituency, travel and personal costs.

There have been consistent problems with some MP's claims in all three categories. Early on under the new scheme several Labour MP's got into trouble for claiming the costs of offices that it turned out their political parties were using (all costs are not supposed to be for political campaigning, only dealing with constituents) and numerous MP's including our own have found themselves under very close scrutiny for employing family members in their parliamentary or constituency office.

Then there has been the concerns over using both the new £10,000 'communications allowance' and the annual report to promote MP's and boost their chances of re-election. Conservatives have promised to abolish the communications allowance if elected and the annual report rules will be tightened up to ensure that each MP publishes to an approved format.

The third area is probably the one that causes the most concern. Nearly all MP's are able to claim what is a tax free housing allowance that is around £2,000 a month and most of them take the view that it's a ligitimate part of their 'pay'. But MP's who had a London home already, or who get one for free, found that they couldn't claim mortgage or rent which seemd unfair; so the HOC authorities settled on a scheme whereby other 'costs' could be claimed instead, which is where the infamous John Lewis List comes in. MP's simply ensured that they claimed the money they felt they were 'entitled to' for other things that were 'essential costs incurred in connection with maintaining a second home' that added up to the allowance total.

Frankly the system is nonsense. In industry and in the civil service their are lots of cases where employees need to be based in two places, or need to maintain two homes; and very rarely would an employer start some stupid scheme like this.

What should happen is that MP's salaries should reflect the costs of the job more accurately and MP's should then pay for their own accommodation from their own pocket. If one MP wants to live in a caravan and then save for retirement while another wants to fork out for a flat screen TV and a flat in Canary Wharf then it should be their own business and no-one else's.

The political drawback, of course, is that to maintain the lifestyle to which MP's have become accustomed you would have to increase their salary by a lot more than the £20,000 housing allowance because it is tax free. You would be looking at a basic salary for MP's of about £100,000 and the headlines would be screaming "MP's award themselves a 65% payrise".

And we all remember what happens to elected representatives who award themselves 65% increases, don't we?

So in spite of promises by MP's for reform of the system I expect another fudge on the question of MP's housing allowances this summer, and more revelations and political damage next Autumn as a result.

Blog Updates: I am on holiday for a fortnight from this weekend.


Anonymous said...

Are you promising to change it, Marcus?

I doubt it. Once you get elected and the trappings of power and money be come yours you wont vote to change anything.

Turkeys never voted for Christmas; MP's never voted to cut their fat cat allowances.

Marcus Wood said...

I'd look pretty daft after all the fuss I have made if I didn't do my best to reform a rotten system.

Unfortunately the allowances arrangements are come to by the decisions of a committee of MP's and then enacted by the Commons authorities, you are possibly correct that the MP's on the committee now might not vote for change now but a new intake of MP's in 2010 would certainly push for much more drastic reform.

All the PPC colleagues I have discussed this with agree the current rules bring all MP's into disrepute and must be radically changed.