People want cuts in public spending

For a decade now we have been sold the mantra that public spending is investment and that every penny of it is well spent and well judged. If any of us suggested some of the spending was wasteful, or inappropriate, or not a priority we were immolated in the fire of rhetoric claiming wrongly we wanted to sack teachers or throw nurses out onto the streets.

It took an 88p basin plug to help undermine that. It’s unfair on both the inoffensive plug and the Home Secretary. If Parliament allows MPs to claim for the costs of maintaining second homes, then the odd plug will qualify for the careful and bureaucratic MP who remembers to keep the receipt and fill in the form. If only all public sector claims were so small and practical. One has to assume the MP or her assistant installed the plug themselves on that occasion, unlike normal practise in the public sector where procuring and installing a new plug would be a complex and expensive task involving the expenditure of much more than 88p. I wonder how much a new basin plug in the executive loo at the local Council costs to buy and install? It would be a lot more than 88p, and would not appear on the list of personal expenses of the Chief Executive.

The passion and anger over basin plugs and the like reflects the public mood that MPs, along with much of the rest of the public sector, just does not offer vaue for money. If you look at the full extent of the £93 million MPs claim you will soon realise that the main cost by far is the cost of employing people, not the cost of plugs or even patio heaters.

Some of my fellow MPs think it is grossly unfair that all these figures for our total expenses get published. They point out that when the local Chief Executive of the Council gets some adverse publicity for being on a large six figure salary no-one also adds in the salaries of his or her deputy,assistants, secretaries and other hangers on. When some quango head gets done for his exotic travel at the taxpayers expense or for his energetic wining and dining for the public good, no-one adds in the cost of running his private office in the quango, yet that office spent time and our money organising the trips or the jollies.

I think they are missing the point. The anger directed at MPs is a good sign that there is some health and life left in our democacy. People think it is worth being angry about MPs, because they might be shamed into spending less or changing the rules so they are less offensive to the public that pays the bills. People do not think they can make other public sector bosses responsible for larger abuses elsewhere in the public sector accountable in the same way. Everyday items bought at the public expense for second homes are bound to touch a raw nerve when others on lower incomes are struggling with the bills for similar items themselves for their first and only home, because people no longer believe the overall system is giving good value.

The searchlight of public opinion needs to be well directed to start to get us some value for money out of this vast increase in public spending the government has presided over. If MP s together are claiming too much by way of expenses, then so is the whole public sector. There is a generalised culture in quangoland and Whitehall of travel, eating and drinking at the public expense, of employing more staff to do your work, and contracting out anything difficult or risky. The biggest cost by far is the cost of employment. It is the surge in the numbers of administrative staff, spin doctors, secretaries, case workers, regulators, glossy brochure writers,press release authors and the like which characterises the poor value public sector.

This culture is obvious in Parliament, in quangoland and in many a local Council. Some MPs have staff to write press releases, to produce blog text, to write speeches, to draft questions, to attend meetings about important issues. Surely an MP wants to ask their own questions or make their own speeches? If we can’t find 645 people who do want to do that and are capable of thinking for themselves, let’s have fewer MPs. The same is true of many quangos and Councils. I am often approached by paid staff at these bodies urging me to send out a press release they have already drafted for me, complete with a quote from me! This is from people who have never met me, let alone taken the trouble to find out what I think about the issue by reading my website or books.

The best response MPs could make to the criticism of the £93 million is to do it for less next year. My expenses were £40,000 below the average in 2007-8, and I intend to reduce my costs further. That’s what private enterprise is having to do. Why should we assume we can tax them more to pay the extra? We do need a wind of change to sweep through the public sector, concentrating money on the public services and transfer payments people want, and reducing the rest. I am happy to pay for the basin plug, but not so happy to pay for all the spin doctors and quangos that have multiplied like crazy in recent years.

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39 Comments

  1. Duyfken
    Posted April 10, 2009 at 7:41 am | Permalink

    Mr Redwood, you suggest that the public mood is that MPs and much of the rest of the public sector do not offer value for money. Whether or not that is so, I suggest there is a greater concern with us in the public – that MPs in particular are abusing a system in a blatant and gross manner. Although rules may not have been broken, the principles certainly have. Please look at the “Fundamental Principles” in the latest edition of The Green Book:

    “1. Claims should be above reproach and must reflect actual usage of the resources being claimed.

    2. Claims must only be made for expenditure that it was necessary for a Member to incur to ensure that he or she could properly perform his or her parliamentary duties.

    3. Allowances are reimbursed only for the purpose of a Member carrying out his or her parliamentary duties. Claims cannot relate to party political activity of any sort, nor must any claim provide a benefit to a party political organisation.

    4. It is not permissible for a Member to claim under any parliamentary allowance for anything that the Member is claiming from any other source.

    5. Members must ensure that claims do not give rise to, or give the appearance of giving rise to, an improper personal financial benefit to themselves or anyone else.

    6. Members are committed to openness about what expenditure has been incurred and for what purposes.

    7. Individual Members take personal responsibility for all expenses incurred, for making claims and for keeping records, even if the administration of claims is delegated by them to others.

    8. The requirement of ensuring value for money is central in claiming for accommodation, goods or services – Members should avoid purchases which could be seen as extravagant or luxurious.

    9. Claims must be supported by documentary evidence, except where the House has agreed that such evidence is not necessary.”

    Whether it is an 88p bath plug or mortgage interest on a so-called second home, there is an appearance that few MPs comply with these Fundamental Principles.

    You address the circumstance of sections of the public sector not giving value for money and also seeming to follow in this culture of “snouts-in-the-trough”. I suggest the best way to tackle that is first to ensure that parliament is beyond reproach.

    Reply: Yes, I agree claims have to be within the spirit as well as the letter of these principles. In some cases that will be a matter of disputed judgement. In other cases MPs do clearly violate the spirit if not the letter of the rules. Most people would also accept that MPs should ,like most other executive style job holders, have the right to reclaim legitimate expenses they have to incur to do their jobs.

    • Duyfken
      Posted April 10, 2009 at 4:22 pm | Permalink

      I’m in agreement with all that you say in your original blog and also in your reply, for which thanks.

      Nevertheless, I find your comment may betray a less than determined wish to see a root and branch reform, in that in stating the obvious: “… MPs should … have the right to reclaim legitimate expenses …”, you appear to be trying to avert our attention from what needs to be done. I hope I’m wrong.

      reply: Yes, you are wrong.

  2. Ian Jones
    Posted April 10, 2009 at 7:54 am | Permalink

    People who pay taxes want a cut in public spending, unfortunately it would seem a significant number of the public lives off the public spending and are not so keen on a cut.

    As things stand I fully expect the cuts to be made to my living standard by increasing taxes and removing any benefits I get such as higher rate relief on a pension. I think it will be many years before enough of the public see that a cut in spending is in the countries interest. Sadly by then, Britain will be the sick man of Europe once again.

  3. THE ESSEX BOYS
    Posted April 10, 2009 at 7:56 am | Permalink

    Amongst many excellent examples of common sense and tapping into the precise public mood on this site, this one ranks amongst the best.

    THANK YOU AND HAPPY EASTER SIR!

    Thanks you – glad to be of service. Happy Easter to you.

  4. david b
    Posted April 10, 2009 at 8:23 am | Permalink

    I am sure I am not alone in the belief that MP’s response will not be to be open, and to try to spend less, but rather to find some way of getting their hands on the loot that we cannot see. How many times have I heard in recent weeks that the homes allowance should be folded into an MP’s much enlarged salary?

    There is a perception that members are on the make. Your own party are no angels here either. Viz Ms Spelman or the Wintertons. Even Mr Pickles – whom I have some regard for – stumbled in the face of public animosity on QT recently when the issue came up.

    A few years ago there was a rumpus in Glasgow about new asylum seekers being given newly furnished housing by the Council. The root of the problem was that existing tenants were not getting freebies. It was what they were missing out on that annoyed those tenants. Now we have a situation where anyone in real life claims expenses, but has to provide receipts, has to detail their mileage, has to pay tax on perceived benefits. Its the fact that different rules apply to the public that is getting under my skin on this issue.

    I detest the bureaucratisation of life, but while it amuses me to read of bath plugs and porn being billed to the taxpayers, its the P11D form that really gets to me.

  5. Brian Tomkinson
    Posted April 10, 2009 at 8:23 am | Permalink

    If MPs pay for virtually nothing out of their taxed income how can they relate to those they claim to serve? In particular, what does inflation mean when all your outgoings are paid for and your pension is INDEX-LINKED? I have written before about wastage in local government where councillors now receive quite generous payments and have unnecessary titles to make them sound grand. There is an obvious need for a massive reduction in government spending whilst preserving essential services. On Newsnight this week you made this point clearly and succinctly and yet I don’t hear the same clear and decisive message when I listen to George Osborne.

    Reply: Oif course Mps should feel the pain of who they represent by having to pay increased prices out of taxed income. That is what they are meant to do even under the current discredited system, for their main home which is where they should live most of the time.

    • Brian Tomkinson
      Posted April 10, 2009 at 11:36 am | Permalink

      Thanks for the reply, but do they?

  6. John Coles
    Posted April 10, 2009 at 8:28 am | Permalink

    You demonstrate that you understand the demands of leadership. But Mr Cameron……..?

  7. alan jutson
    Posted April 10, 2009 at 8:29 am | Permalink

    The simple problem here John is that all the hangers on are paid for as you say out of Tax.
    People who are working have no option on paying Tax, the amount you pay, or to who (there is no competition).
    Yes I am aware that you can mitigate some of the amount you pay with Pension contributions and many other schemes, but the problem is that the Tax rules are now so complicated and far reaching that most of us just pay up, as attempting to mitigate what you are allowed, is often more expensive than the savings made.
    Just a silly idea (or is it), but why do we not just get back to absolute basics.
    Just ONE tax, income tax, and ONE Corporation Tax, nothing else. You could scale these Taxes.
    No Council tax, No National insurance, no Vat, no Ttax on savings etc.
    A all people have exactly the same tax code with no exceptions.
    We would then all know exactly the real level of Tax which is taken from the people, and then it may concentrate the minds on those who fix it, to get it down.
    If we were to do that now, the percentage rate would be astonishing, and I guess fewer and fewer would want to work.
    Before people rise up in arms at the above comments put up as an idea only, of course there would still be Benefits, and of course everything needed already in place, would be paid for by the State.
    Hospitals, Schools, Police, Armed forces, Pensions etc.
    No its not communism, as its already being paid for now.

    • chris southern
      Posted April 10, 2009 at 12:09 pm | Permalink

      A far fairer tax alan is local sales tax, replacing VAT. No other tax. Therefore those who spend more (nearly always those who earn more) contribute more to their local societies services. No need for the percentage of your wage rubish (not having a go at you mate, but directly taxing someones labour is not only theft but puts many into the benefit trap) BY taxing bussines and labour directly, less people are employed, by taxing those with higher amounts of wealth, you discourage wealth creaters (employers) as well as undermine the value of skilled labour.
      Just food for thought alan.

      • alan jutson
        Posted April 10, 2009 at 5:21 pm | Permalink

        Chris I agree with you tax on sales is better from an incentive point of view.

        All I was trying to do was engender some rational thinking and discussion here, or thinking out of the box as they now call it.

        The present system is now far too complicated and costly to collect etc, and with expensive ole Gordon taxing away everything in sight he hides the real cost effect of the Tax take.

        We need a system of tax which is transparent on cost and simple to collect and administer.

        At the moment people can only guess at the true rate, but if it was 60% of income, or VAT was at 40% it may concentrate the minds on how much it needs to be reduced.

        The present reality is that it is probably more than the above examples, which is frightening.

        • chris southern
          Posted April 10, 2009 at 7:50 pm | Permalink

          Definately agree Alan, that the real amount of tax people pay is quite frightening. Tax and spend goverments never see it that way though 🙁

  8. TomTom
    Posted April 10, 2009 at 8:47 am | Permalink

    I am stunned that Mr Robert Quick qualifies for £110,000 index-linked pension. It is truly astounding and presumably he qualifies as does Fred Goodwin because early retirement is cheaper than termination and tribunal hearings under employment legislation.

    The pension system was bankrupted in the private sector by early retirements in place of redundancy coupled with Treasury greed reducing employer contributions to defined benefit schemes assuming they were a tax dodge; but the public sector banks and agencies continue to draw blank cheques on the Exchequer with retirement at 50

    • a-tracy
      Posted April 10, 2009 at 12:00 pm | Permalink

      Wow! not a bad pay off for a serious dereliction of duty. This above all else infuriates me presently both private and public sector equally.

      The government should fight these tribunal cases properly, not settle early, they must present all the evidence of dereliction properly as they would if it was their personal money they were spending.

      • a-tracy
        Posted April 10, 2009 at 12:19 pm | Permalink

        By the way, I wasn’t suggesting automatic dismissal for Mr Quick after years of exemplary service one mistake, serious though it was, could have resulted in a demotion to a lower grade surely? Then if he resigned he would have resigned on a lower pension.

  9. David Belchamber
    Posted April 10, 2009 at 9:02 am | Permalink

    “The biggest cost by far is the cost of employment. It is the surge in the numbers of administrative staff, spin doctors, secretaries, case workers, regulators, glossy brochure writers,press release authors and the like which characterises the poor value public sector”.

    This needs saying loud and clear – and often!

  10. Waramess
    Posted April 10, 2009 at 9:10 am | Permalink

    I am afraid that this one really does miss the point, and there is plenty of evidence on the web if any politician wants to know how people feel.

    Just look at the second homes nonsense. MP’s were given an allowance for a very specific purpose and proceeded to abuse it; and there is little question that many abused it in quite a robust manner.

    If they had not, then this hue and cry would never have developed.

    I’m afraid you all get tarrred with the same brush and the changes will apply to all, even the most honest; but the honest won’t be too bothered because they had never intended to abuse the system anyway

  11. A. Sedgwick
    Posted April 10, 2009 at 9:10 am | Permalink

    The witch hunt over MPs’ remuneration could have a more deep seated cause. On the plug analogy if a plumber does a really good job for you in your home and goes over budget you tend to grin and bear it. I would suggest that many people think MPs collectively, among other politicians, are ineffective and do not have the courage to do what is right and frequently what they believe and for example ignore party whips. The pay package for MPs is a mess and unfair but the emphasis on the perceived rip off is a consequence of general elector(customer)dissatisfaction.

  12. D K McGREGOR
    Posted April 10, 2009 at 9:11 am | Permalink

    And so say all of us!

  13. Acorn
    Posted April 10, 2009 at 9:15 am | Permalink

    JR, it is all very well wanting cuts in public spending; but, at some point your party is going to have to start putting names and numbers to it.

    I assume that as we are now within a year of the general election being called, parliamentary protocol now gives you access to the Treasury books. I further assume that your policy wonks are hard at work dredging up said names and numbers.

    I appreciate that everything has to have a voter impact assessment, particularly now Labour has built up a huge client state; at the moment, your troops have got very little to sell on the doorsteps of England.

    reply: That’s what this site gives people – ideas and numbers of how to cut the public sector without sacking nurses and teachers.

  14. Mike Cunningham
    Posted April 10, 2009 at 9:15 am | Permalink

    “but not so happy to pay for all the spin doctors and quangos that have multiplied like crazy in recent years”.

    Can we then look forward to a confirmation of Mr. Redwoods own promise that the Tories will axe 162 quangos on assuming power in Westminster, as he stated in 2005, and will he also confirm that he and his colleagues will publicly demonstrate how useful the remaining quangos are to the well-being of the British electorate?

    reply: I hope my colleagues re-adopt the policy I launched for the 2005 election. Surely they are goign to have to ntake an axe to waste and needless spending, of which there is plenty.

  15. Cliff.
    Posted April 10, 2009 at 9:19 am | Permalink

    One of the best ways to reduce public spending is to cut out the continuous barrage of Dot Gov adverts that appear during every ad break on most TV channels and on most commercial radio stations.
    I am sick and tired of paying for government to threaten me and dictate to me in my own home via the media.

  16. oldrightie
    Posted April 10, 2009 at 9:23 am | Permalink

    If we look around our nation today you would think we have had 12 years of cuts. I have blogged today, where has all this “investment” gone? We need a new word for Labour’s investment mantra. Spendment, perhaps? Meaning; to spend in a manic and deranged manner, causing waste and decay.

  17. Tim Almond
    Posted April 10, 2009 at 9:31 am | Permalink

    The difference between an MP and a chief executive/quango head is that there is no-one above an MP. Council chief executive pay is determined by the councillors on our behalf, MPs vote for their own rules.

    The way to deal with MPs pay is in a free-market manner. Get each candidate to calculate the monthly required cost for the next term of parliament and put it on the ballot paper where the voter can see how much it will cost them to hire that MP in total including salary, staff, bath plugs, late night movies etc. It may be that one candidate will charge more but that the local people can see that they are an excellent MP, and so worth the extra cost, in the same way that we might pay more for better wine, televisions or plumbers.

    • Denis Cooper
      Posted April 10, 2009 at 2:43 pm | Permalink

      An alternative, maybe too whimsical, idea would be to withhold a fifth of each MP’s salary, and then at the end of each year ask his constituents what percentage of it he should get.

      It wouldn’t be necessary to poll them all, which would be too expensive – it would be good enough for a random sample of say a couple of hundred registered voters to be sent reply-paid postcards with various options – 0%, 10% etc, up to 100% – of which they are to choose one, and then find their median response. Those who didn’t bother to reply would be included, deemed to have voted for 0%.

  18. Neil Craig
    Posted April 10, 2009 at 9:55 am | Permalink

    I think the concentration on MP’s rip offs, while a satisfying reversal of the “sleaze” campaign against Tories before 1997, is missing much of the point. The important thing is that under Labour government spending has gone up by £200 billion, in real terms. All our current problems can be directly traced to that. Porn videos may be of more interest to the tabloids & lets admit that human weakness is more interesting than balance sheets, but being diverted risks the main point being lost.

  19. Simon D
    Posted April 10, 2009 at 9:56 am | Permalink

    Your best post yet, spot on!

    The rot starts with the folly that goes on in Brussels and reaches farcical proportions in Westminster where there are too many MPs, Peers and hangers-on plus a deranged expenses system.

    Recently I had the pleasure of waiting at the bus stop outside the Scottish parliament building. The withering contempt expressed by some ordinary members of the public standing outside the building was quite fascinating.

  20. Ian B
    Posted April 10, 2009 at 10:25 am | Permalink

    “I am often approached by paid staff at these bodies urging me to send out a press release they have already drafted for me, complete with a quote from me! ”

    Some “naming and shaming” wouldn’t go amiss there, Mr. Redwood 🙂

    Reply: Will do the next time it happens.

  21. Denis Cooper
    Posted April 10, 2009 at 10:55 am | Permalink

    “If we can’t find 645 people who do want to do that and are capable of thinking for themselves, let’s have fewer MPs.”

    That wouldn’t solve the problem.

    There are about 45 million adult citizens in this country, so it should be dead easy to find 646 men and women who would be excellent MPs.

    The fact that we so comprehensively fail to do that suggests that the problem lies in the process through which people become MPs, and that problem would still be there even if we only wanted half the number.

    In fact out of the seventy-odd thousand adult citizens living in each Parliamentary constituency there must be thousands who could be just as good at being the MP as the present incumbent, and in many cases they could make a better fist of it.

    However … introduce the criterion that the successful candidate must (almost always) be a member of one of the main political parties, and that cuts the number of potential MPs down by a factor of a hundred – so it becomes tens in each constituency, rather than thousands.

    Then allow the cabals controlling the political parties to pre-select official candidates at the national level, before the local party group carries out the final selection for that constituency, and what do we end up with?

    A lot of duff MPs, far inferior to the MPs we could have if they were drawn from the entire population, rather from the 1% who are prepared to join one of the main political parties, accepting that they’ll then have to stop any nonsense about “thinking for themselves” …

    Present company excepted, of course.

  22. Richard Taylor
    Posted April 10, 2009 at 11:07 am | Permalink

    Dear Mr Redwood

    You have great perception. I thought generally, that MPs gloss over the huge waste of money spend in quangoland – as to do anything about it would make them less popular with public sector colleagues. I have worked for four years in the Economc Development of a local council – partnering up with other departments including SEEDA and Hampshire County Council – and I think on the whole we were highly unproductive and even the best things we did – really didn’t do much for the private sector. It as highly aspirational – thinking up daft ideas, writing strategies, holding consultations, then re-writing strategies and then trying to form groups to meet up for nothing much. It just went on and on and had little to do with what’s going on in the real world. And it still continues. Now I am back in the private sector, thankfully. I only wish MPs would dismantle much of the public sector and quangolands and put them out of their misery.

    Thanks for the blog

    Reply: Thanks for the contirbution. I agree with yoiur verdict on much development activity. That’s why Conseravtives are saying abolish the development Agencies – unless local Councils want to take them on- and abolish many other regional quangos.

  23. Ruth
    Posted April 10, 2009 at 11:12 am | Permalink

    Agreed, the rise in the cost of the public sector is mainly down to the vast numbers it now employs. Over recent years the sector has adopted a division of labour principle, with more and more specialised roles requiring more and more people, working in a more inefficient way.

    As an example:
    a relative was offered a screening which could pick up a serious health matter – she went along for the screening, which was done by a nurse. She should have seen the doctor as well, but they were running late so they sent her away and said she should come back again to see the doctor. The nurse told her she had the condition but said “I’m not supposed to tell you that”. So they sent a taxi a few days later to take her back to do what they should have done first time. She was told she then had to come back again for an xray. So she went back (by publicly funded taxi) for an xray and to see the doctor, who told her she had the condition, and not much else. She was told to see her GP. She dutifully booked a double appointment as she had a lot of questions, but when she got there discovered the report from the screening had not yet arrived and her GP said he wasn’t the expert on this condition anyway. So once again she got no information. So she asked the doctor about another issue she had, and he said she would need a blood test for that – she had to come back to see the nurse to have this done. It seems that a doctor is unable to take blood for a test.

    So after over a month of appointments (5 in total) involving two nurses, 2 doctors, an xray technician, two receptionists and two publicly funded taxi drivers, she knows she has a condition which requires treatment, has received no treatment and no information on what to do about it. She now has to make another appointment to see a GP about treatment.

    My cats get more efficient and cost effective treatment from their vet, who is not afraid to get his hands dirty.

    So I’m getting the information she needs from the internet.

    Don’t tell me the money poured into the NHS has improved things – it has been spent on employing more and more people to do the same things more inefficiently.

  24. michael read
    Posted April 10, 2009 at 3:21 pm | Permalink

    You are strongly advised to read Prof Buitter’s latest post on FT.com.

    Taking an obscure Bank of England announcement about a currency swap with the Fed Buitter makes quite a case for the UK having already lost tens of billions from its loans to duff banks.

    It gets worse. And then some.

    • Denis Cooper
      Posted April 10, 2009 at 5:47 pm | Permalink

      Great – so as I understand, if he’s right, then RBS and HBOS and other banks may have more or less drained our foreign currency reserves through their losses in the US, and regrettably even Alistair Darling can’t persuade the Bank of England to create new money in the form of foreign currencies … still, it’s not really in the interests of the US for the UK to collapse into the arms of the IMF, is it?

      I did notice this in one of Buitter’s earlier articles:

      “… there is a material risk that the mind-boggling general government deficits (14% of GDP or over for the US and 12 % of GDP or over for the UK for the coming year) will either have to be monetised permanently … ”

      In other (figurative) words, eventually the Bank may be instructed to send its entire portfolio of gilts back to their issuer, the Debt Management Office, at no charge, and then they’d all be shredded.

  25. mikestallard
    Posted April 10, 2009 at 3:49 pm | Permalink

    Thank you for taking the trouble to put yourself on our side, for trying to understand what it is like if you are not an MP and for making some very sensible suggestions about why we are so angry out here in the sticks.

  26. Puncheon
    Posted April 10, 2009 at 6:38 pm | Permalink

    I have forgotten which economic commentator it was who used to say that the real economic role of governments was to squander money. This is true, almost all public expenditure is wasteful, and the expression “public investment” is an oxymoron. When I worked in the finance department of a large civil service department, we used to have a rule that went: taxpayers’ money should not be spent on persuading people to do what they would have done anyway with their own money. This is a sound rule and helps to ensure that public money is only spent on common goods, eg defence; law and order; transport infrastructure; ensuring a minimum level of education, health and welfare and so on. But not on social engineering whimsies and feather bedding voter groups, which is simply a form of corruption.

  27. chris southern
    Posted April 10, 2009 at 7:55 pm | Permalink

    One of the other ways of cutting needless expenditure would be to axe the end of budget waste that we see. Money being spent littleraly so that the department gets the same amount the following year! If they were allowed to roll the amount over, then money desperately needed in some areas would be available, whilst the needless waste would be cut due to the halt in the end of budget year waste, purely to gain the same budget the following year!

  28. Ross
    Posted April 10, 2009 at 8:50 pm | Permalink

    John

    As you frequently point out, many of the public sector’s problems come from what economists would call poor mechanism design – institutions set up in ways that provide perverse incentives.

    May MPs like to pretend to their constituents that they earn less than they actually do, so the remuneration package seems to have evolved to be 60K in salary plus 140K in expenses. Some MPs appear to view this as a salary of 200K and act accordingly – not just by charging the kitchen renovations for their third homes, but by employing their wives and kids. Meanwhile if you send an email to an MP you often get a whine about how Parliament doesn’t provide enough secretarial support for them to answer email from people who are not their constituents, and asking you to write to them first telling them where in their constituency you live. It’s just not the way to run a brewery.

    A rational lawgiver – say the ghost of Solon, brought back by Dr Who to sort out the mess – might fix the problem as follows. Make MPs into self-employed contractors – as GPs are. Each MP gets a budget of 200K and can spend it however he or she wants to. Any money drawn as salary, whether by the MP, or a family member, or anybody else, is taxed like any other UK income, while costs necessarily incurred in the course of the business of politics would be tax deductible. Decisions on what an MP could get away with would thus be taken by HM Revenue and Customs rather than by Parliament.

    In short order we’d see an end to many of the abuses – the first-class air tickets to Barbados in February to investigate the anti-terror measures taken by cricket organisers, the 3-litre cars bought to attract large mileage allowances, and all the third-rate administrative crud that MPs put up with because it’s “free”. MPs would buy Macs rather than Windows PCs, fly economy class like the rest of us, and answer their own email. Huge increase in productivity; zero increase in costs.

    Oh, and any MP who wants to claim to her or his constituents that they live on a modest salary could voluntarily publish the appropriate tax return(s).

  29. Brian J. Edwards
    Posted April 10, 2009 at 9:07 pm | Permalink

    When I was a Civil Servant in the Board of Trade some 35 years ago, I had to visit Masstricht Air Traffic control centre for a meeting.
    Submitting my expenses on my return I was asked whether I had bought anything duty free. Foolishly I admitted to having bought a bottle of Scotch, and was told that they would deduct the amount of duty that I had not paid on the Scotch from my claim as “A Civil Servant must not gain a pecuniary advantage at cost to the taxpayer as a result of carrying out his official duties”.
    On another occasion, on a visit to Stockholm, I was due to return on a Friday afternoon and suggested that they might let me have a ticket to return on Saturday evening, and that I was prepared to pay for the overnight accommodation; again my request was refused on the basis that I would gain a personal advantage as a result of carrying out my duties.
    I considered both decisions to be rather hard but accept that they were fair.
    These days when I read of the whole range of things that MPs apparently need in order to carry out their duties, it seems quite clear to me that they are not there for the good of their own constituents, nor for the good of the country, but simply for their own personal gain. We need to return to the dogma,”A Member of Parliament must not gain a pecuniary advantage at cost to the taxpayer as a result of carrying out his official duties”. That would have excluded such jollies as Tony Blair from going to a meeting with the Egyptian President and then straight from there to a holiday on the Red Sea!

  30. Adrian Peirson
    Posted April 11, 2009 at 5:24 pm | Permalink

    I’d like to suggest that the way to make things better is NOT more and more rules and regulation but a Free’r Press and upholding the FOI rules.

    Pres Putin Warns the West on Adopting Socialism,

    But we aren’t adopting it, we are trapped in a Gulag and they are hosefeeding us it.

    http://www.infowars.com/putin-warns-us-about-socialism/

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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