MPs expenses

Some of you are asking what my thoughts are on the Prime Minister’s latest wheeze, the daily attendance allowance for MPs who make it to their main place of work.

Last night I was asked to speak at a Saint George’s Day dinner held in the magnificent surroundings of the HAC headquarters in the City. Also present were the Secretary of State for Defence and the Master of the Rolls. I felt in such mixed company I should steer clear of the Credit Crunch and the Debt crisis. Instead I tackled the only perennially fascinating part of public spending, MPs’ expenses.

I set out my general view of the Attendance Allowance. It can best be summed up in nuanced and technical terms as “barking” – for this is a family friendly site based on moderate language.

The Prime Minister seems to have in mind every MP from outside London being able to claim maybe £175 a day for every day they make it to Westminster. The only evidence needed to support the claim would be to swipe their ID pass into a Commons entrance at some point during the specified day of the claim.

The many details which have not yet been worked out or divulged include:

1. How many MPs would not be allowed to claim anything? There are rumours that they are trying to draw a ring around London that minimises the number of Labour MPs who would lose the right to claim, and maximises the number of Conservatives who would be excluded. Is this true? Are they looking at actual journey times, which vary depending on public transport patterns more than distance?
2. How much would the claim be each day? Would it end up with the taxpayer paying more than under the second homes allowance, which surely is completely unacceptable?
3. What transitional arrangements if any would there be for MPs who have in recent years committed themselves to large rents or mortgages on second homes? Ms Harman implied there would be transitional cash for some. Who? How much?
4. Do MPs undertaking Parliamentary business elsewhere qualify? There was some suggestion from Ms Harman yesterday they might. Why? In what circumstances?
5. Why does the PM think this could be introduced as early as 1 July? We have only just received all the new rules and paperwork for the new system that came in as of 1 April this year. The PM’s proposal would require a lot of systems change, and more expense.

The Prime Minister clearly thought this back of the envelope proposal was clever. He thought he had found a quick way to tip substantial sums to MPs avoiding all need for invoices, embarrassing revelations about personal items they had bought for their second homes and arguments over what was their second home. Were he to go ahead with the vote and win it, I suspect he will disovcover great public anger and continued press fascination. The press might well then do all of the following – and more besides:

1. Follow particular MPs thought to be abusing the system , to see not only when they clock in but also when they leave on any given day
2. Seeing what the MPs do with the money they receive as Attendance Allowance
3. Trying to find cheap skates who despite the Allowance sleep on office sofas or end up in very cheap hotels
4 Seeing if any rackets are running – like one MP swiping another MP in so he or she can claim the Allowance for a day when they don’t make it to Westminster
5. Alleging that any attempt to delay proceedings or to demand an extra day’s debate is just a demand for more Attendance Allowances.

It is by no means clear the PM can win this vote. He has blundered into a Commons matter, where governments are usually wary of whipping a given answer, preferring a consensus or majority view to emerge. My best advice to him is to do his U turn early, before the revolt gets out of control. Parliamentary hothouse rumours that Labour MPs are already being threatened with de-selection from their seats if they do not do the government’s bidding is a sign of how unpopular this is with Labour MPs. Worse still would be if he wins this vote and ends up with another unsustainable and indefensible system.

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

30 Comments

  1. Donna W
    Posted April 24, 2009 at 6:43 am | Permalink

    The PM proposals are ridiculous and unacceptable. As Vince Cable said, it is bringing the Brussels Gravy Train to the UK.

    But at least we got treated to the most hilarious political video ever … Gordon Brown doing his best impression of Bill (or Ben) combined with The Joker. It was so funny I watched it twice!

  2. Ian Jones
    Posted April 24, 2009 at 7:06 am | Permalink

    First and foremost all expense claims must be made with a receipt.

    Second, any property (houses, bathplugs, tv’s, furniture) purchased on expenses remains the property of the crown and those of a sufficient value returned at the end of being an MP.

    Third, an annual limit on the amount available for expenses differentiated on the cost of travel to Parliament. Those in London dont get any for rent.

    This removes most of the incentives to fiddle the expenses to make the extra cash that is currently going on. Its also how the rest of the world has to live!!!

    It never ceases to amaze me to see socialists stuffing their pockets at the first opportunity. Whether in Westminster or Brussels its no different.

  3. alan jutson
    Posted April 24, 2009 at 7:08 am | Permalink

    John
    As I have said before on this blog.
    The situation is easy.
    MPs should be treated as senior executives as they are PAYE EMPLOYEES.
    They should only get the same expenses and allowances that all EMPLOYEES are allowed in Business under INLAND REVENUE RULES which apply to all of us.
    The Company pays for overnight stays.
    The Company pays for travel costs.
    The Company pays for pens, paper, computers and telephones.
    The Company pays for support staff.
    Tthe Company pays for office space.
    If an executive pays for some of these items himself (although they usually have a company credit card) then all expenses are repaid on production of a valid reciept.
    No receipt no repayment.
    If you have a Company car then you pay Tax as a benefit in kind.
    if you pay for your own car you claim BUSINESS milage at the Inland revenue rate of 40 pence a mile for the first 10,000 miles.
    We may then see a few more sensible tax policies from those in power when they realise that therte is no gravy train.
    Not a personal attack on you John as I know you are in favour of reducing cost, increasing transparency, and you are already low on the expenses take. compared to the average.

    It all seems so bloody simple to solve so whats the problem.

    • Brigham
      Posted April 24, 2009 at 10:06 am | Permalink

      “It all seems so bloody simple to solve so what’s the problem? The problem is an enormous one. How do we keep all our crooked scams without the general public discovering it. George Orwell must be turning in his grave. Perhaps the government should get some advice from his real namesake.

    • D K McGREGOR
      Posted April 25, 2009 at 9:39 am | Permalink

      Agree 100%

  4. Colin D.
    Posted April 24, 2009 at 7:15 am | Permalink

    If Brown had his head screwed on, he would be aware of the fiddles in the European Parliament whereby people ‘signed on’ to get their generous allowance and then left the premises very soon after. I believe Neil Kinnock’s wife held something of a record in this regard.
    Another piece of crass stupidity by Brown to add to the ever lengthening list.

  5. backofanenvelope
    Posted April 24, 2009 at 8:43 am | Permalink

    When I was an RAF officer serving in MoD, I received a lodging allowance. You could not rent accommodation from yourself, a relative, or from anyone you had a financial relationship with.

  6. Thatcher-right
    Posted April 24, 2009 at 8:58 am | Permalink

    What I don’t understand is why the tax man isn’t down on these obvious fiddles like a ton of bricks? No manager in industry would dream of trying this sort of thing on.

    Are the expenses paid with tax – acknowledging they are not real expenses?

    Does anybody know?

  7. Demetrius
    Posted April 24, 2009 at 9:06 am | Permalink

    Long long ago, when our Stores Sergeant was arrested for creative accounting in the Squadron stores; he was unwise enough to buy a car larger and flashier than that provided for the General Officer Commanding; the G1, a Colonel in the 17/21 Lancers, told me one of the basic laws of military administration, and for that matter, civilian life.

    It was “If anything can be fiddled, it will be fiddled.” It proved to be one of the ineluctable truths, or as grannie used to say “Errare humanum est.”

    • Liz
      Posted May 12, 2009 at 1:24 pm | Permalink

      Or, as my philosophy tutor at Uni used to say “That may be correct; but is it right?”
      A good maxim, I’ve found. Comes in useful in all sorts of dilemmas.

  8. Howard - Stockport
    Posted April 24, 2009 at 9:51 am | Permalink

    I agree with Alan Jutson. Why can’t MP’s be subject to the same Inland Revenue expense rules as the rest of us?

    To state the obvious, expenses should not be a source of income but the additional costs of doing a particular job which, quite fairly, should be reimbursed by the employer.

    Also, why not follow the totally transparent example shown by the Scottish Parliament where MP’s expenses can viewed online.

  9. Olaf
    Posted April 24, 2009 at 10:43 am | Permalink

    I think Alan Jutston has it.

    We the public simply want MPs to have to play and pay by the same rules as the rest of us.

  10. mikestallard
    Posted April 24, 2009 at 11:15 am | Permalink

    Allow me to go one step further.
    This week i was coaching and my pupil (aged 12) kindly killed a fly which was buzzing round annoyingly. Unfortunately it fell into my cup of tea. He looked mortified as a kindly act had been turned into an attempt at poisoning. I fished out the fly and took a sip of the tea.
    I know a French culinary expert who actually ate a maggot in his cabbage for the same reason.
    So if little people can do it, why cannot MPs?
    NO EXPENSES AT ALL.
    Teachers and nurses get no expenses.
    Payment for MPs was made so that Labour people could get into parliament.
    Once they turn into grabbing fat cats, then, surely, they have lost their appeal as People’s Tribunes?
    Where is the example?
    Also it might force MPs into taking a second job to find out how other people live.

  11. Cliff.
    Posted April 24, 2009 at 11:17 am | Permalink

    I would suggest instead of rewarding people for turning up to do the job they are paid to do, why not take money away from those that don’t?

    The system advocated by Mr Brown is similar to the one used in Brussels and we all know how it is abused.

    I would suggest setting up a hostel near to Parliament, with rooms that are equiped with phones and internet accesss. This would cut out the abuse of the second home allowance, I also suspect fewer MPs would feel the need to stay in town and would return home, especially those that live no further from Westminster than you do John.

    The whole expenses system was set up when those that went into public life did it for the right reasons and had high moral standards, integrity and honesty. Sadly, we now have too many of the wrong type of people in our parliament, that see politics as a get rich quick scheme. Obviously John you are not tarred with that brush; There are still some MPs that do it because they have a sense of public service, sadly there appears to be too few of you!!

    Expenses are a simple thing and HMRC rules should apply to MPs as they do for private industry. First and foremost, a receipt should be required, secondly, only those items that are NECESSARY and SOLEY for the purpose of carrying out the business of an MP should be reimbursed. Porn movies, cusions etc etc should be excluded. The use of a government hostel, would negate the need of a John Lewis list.

  12. Adrian Peirson
    Posted April 24, 2009 at 11:18 am | Permalink

    Build or take over a Block of flats Near Westminster, or if we had to Get rid of the QE2, why couldn’t we have Moored her on the Thames and used her for MP’s London accomodation.

    • Denis Cooper
      Posted April 24, 2009 at 11:24 am | Permalink

      HMS Belfast is already there, within convenient walking distance.

      Conditions would be cramped, but men who risked their lives to defend this country were prepared to put up with them.

  13. Nick
    Posted April 24, 2009 at 11:23 am | Permalink

    What’s to stop a company replacing parts of salary with a per diem expense of 175 quid a day?

    Or are MPs going to give themselves a perk that others don’t have?

    nick

    • alan jutson
      Posted April 25, 2009 at 7:35 am | Permalink

      Nick
      Inland Revenue rules for us would stop it.

      That is why it is in my view, very important for MP’s to come under exactly the same criteria as the rest of us.
      MP’s make the rules for others at the moment, but do, and STILL WANT TO EXCLUDE THEMSELVES, this simply IS NOT FAIR.
      We may get better Legislation and Tax policies if MP’s know how they work from personal experience.
      You and me cannot claim mileage to and from your normal place of work from home. Inland Revenue do not allow it.
      Try putting your mortgage interest on your tax form against and see if you do not get fined.
      Try putting the purchase of your furnituire on your tax bill for an alowance and see if you get away with it.
      Sell off a second home and see if you are exempt from Capital Gains Tax.
      The list seems endless.

      • Nick Leaton
        Posted April 25, 2009 at 10:39 am | Permalink

        I know. So that’s why Brown should be challenged on his plan for expenses to make sure that any rules for MPs apply to the public, as an amendment to anything put before parliament.

        It’s a poisoned chalice. If he tries to have it removed, then its clear that he’s proposing enriching MPs at the public expense or that his idea is bonkers.

        If it goes through people will rearrange their pay as per diem allowances for the first 175 a day.

        Nick

  14. Denis Cooper
    Posted April 24, 2009 at 11:26 am | Permalink

    According to Whitaker’s Almanack 2009 (ie I can’t be bothered to look on Parliament’s website to check the current rates):

    “Members of the House of Lords are unpaid but are entitled to allowances for attendance at sittings of the house. The daily maxima, between 1 August 2007 and 31 July 2008, were £165.50 for overnight subsistence, £82.50 for day subsistence and incidental travel, and £71.50 for office costs.”

    I’ve no doubt that this system has always attracted a certain low level of abuse, with some unscrupulous peers briefly dropping into the Lords to qualify for allowances when in fact they were in London on other business, and I’ve no doubt that the level of abuse has risen sharply since Blair “reformed” the chamber.

    Still, as they’re unpaid, applying the same system to the Commons would still cost the taxpayer a lot less than having MPs paid a salary, and later getting a pension, plus cheating on their expenses.

    Oh, and also getting “resettlement grants” if they lose their seats at the next election, but not if they decide to resign before the election.

  15. chris southern
    Posted April 24, 2009 at 12:38 pm | Permalink

    As we all know, mr browns proposal is firstly a way of hiding all of the scams, and secondly, a way of penalising opposition MP’s.

    Also, who gets the contract to install the technology? A lot of pointless contracts seem to have been issued over the last several years, who are the contract holders connected to?

  16. TCD
    Posted April 24, 2009 at 3:32 pm | Permalink

    It seems to me that this proposal was introduced at this time for the sole purpose to outshine the bad news in the budget.
    This is a tried and tested method with this government.

  17. Jonathan Bryce
    Posted April 24, 2009 at 8:16 pm | Permalink

    My main problem with this is that someone like Charles Kennedy, member for Ross, Skye and Inverness West will incur a lot more expenses in doing his job than the member for Wokingham. It takes quite a lot of travelling just to get from Skye, an island off the west coast of Scotland, to Inverness, a city on the east coast, never mind the trips back and forth to London.

    Any amount that is enough to cover Charles Kennedy’s legitimate expenses is going to be far too much to cover the expenses for most other MPs.

    • alan jutson
      Posted April 25, 2009 at 7:43 am | Permalink

      Simple solution
      His place of work is his constituancy, as it should be with all MP’s.
      Under Inland Revenue rules they could claim to travel to another Company site (LONDON) which is not his normal working office site, so full expenses would be allowed.
      That is why the idea of a fixed allowance is stupid, its not fair on those who live hundreds of miles away, but neither is it fair to not pay them.
      Allow them to claim the cost of travel back, but NO TAX FREE ALLOWANCE or PROFIT, that is not what expenses are for.
      Expenses cover the cost of expenditure, no more no less.

  18. Bewick
    Posted April 24, 2009 at 10:45 pm | Permalink

    Before I retired I was a freelance Management Consultant. That involved leaving home at 5:30 most Mondays and getting home about 22:00 Fridays. I worked across the country but frequently in London (300 miles away)
    My contracts were agreed on a “daily rate” which assumed 7 or 8 hours a day but were more usually 10 or more. They also usually, but not always, specified that travel and accommodation and breakfast were extra.

    I often worked for Blue Chip companies who usually had “arrangements” with hoteliers which provided very good 4 star accommodation and breakfast at preferential rates. I had to use those. They also afforded to we “contractors”the same evening meal and “socialising” (a couple of drinks say) allowances as they afforded to their own staff. Even in London these were adequate to get a very nice meal. SOMETIMES the fee was “inclusive” so I had to pay for my own accommodation and meals. So I moved “downmarket” but in London at least that was no real hardship.

    I ALWAYS ensured that I “clocked in” and “clocked out” and that I maintained a timesheet which I ensured that the relevant manager signed each week before I submitted an invoice.

    Now I worked at least as hard as any MP; I suffered the same disruption to my life – probably much more since I could not “slope off” on Thursdays nor did I have extensive “holiday” periods.

    I didn’t NEED a 2nd home. the hotels were fine for doing work after leaving the office and provided perfectly good “room service” meals.
    Moreover I HAD to account for EVERY penny I spent to HMRC including the VATMAN.

    Now exactly WHY are MP’s so different? they are not and a period in the REAL world might wake them up. Maybe it should be compulsory – that is ALL should be debarred from standing unless they’d had Five years in a real job!

  19. Bewick
    Posted April 24, 2009 at 10:59 pm | Permalink

    And oh a PS. I did some consultancy for a northern University on staffing and organisational structures.
    I made a comment in my report which the Vice-Chancellor and a couple of Deans found both amusing and accurate. It was something like “some of your staff appear to believe that their salaries are actually “attendance allowances” and think that if they actually do any work at all then they should be paid more”

    I rather think that the MP expenses debacle is somewhat akin to that. Oh how I wish someone would ask me to do a job evaluation on MPs and Ministers. I’d have a field day.

    • alan jutson
      Posted April 25, 2009 at 7:46 am | Permalink

      Bewick.
      Exactly my point as well.
      I’m up for the job as well.

  20. jailhouselawyer
    Posted April 24, 2009 at 11:40 pm | Permalink

    I quite like the idea of MPs all living together in London. In my view, Wormwood Scrubs should be decommissioned as a prison and the cells are ready made bedsits for MPs. There would be room for them all without the need for overcrowding putting two or three in one room. As MPs tend to believe that prisons are already holiday camps or 5 star hotels, the cost of conversion would be very minimal. Perhaps, transport to and from the House of Commons could be via decommissioned prison vans.

    Alternatively, MPs may live elsewhere but cannot claim expenses if they choose not to live in this government accommodation scheme.

    There should be a clocking in and out machine at the House of Commons, and each MP has a card which they have to punch in and out to register how many hours they work. The basic salary obviously includes an attendance allowance. Unauthorised absences will result in deductions.

  21. james harries
    Posted April 24, 2009 at 11:50 pm | Permalink

    let’s not overcomplicate.
    they have “surgeries”
    so pay them a vet’s wage.
    give them two secretaries
    if they are useless and they want to fire them, let them jump through the same hoops as normal employers.
    no london weighting
    give them a voting thing (iike your internet banking gadget) to vote
    if they want to speak, a vet or GP’s wage will run to national express coach, forget the receipt.

  22. Bustop
    Posted April 25, 2009 at 12:44 pm | Permalink

    I agree with the proposal of Alan Jutson 7.08 am. But I want my money back from existing scams. MPs buy second homes because they need them to work in London. We pay for this because it is an expense incurred to enable them to do their job – the Jacqui Smith defence. Logic decrees that when they are no longer MPs they have no need of the home. Therefore it should either be passed onto an incoming MP or sold with it’s contents and the money and any profit returned to the exchequer. Put another way what right do they have to keep it? It is by definition not the family home, it was paid for to some extent by the public. If MPs have made personal contributions this could be retained or if they wanted to keep the property MP’s could ‘buy out’ the exchequer to the value of expenses laimed plus a figure for added value. If MPs argue that they would have bought the property anyway then it is not wholly necessary for theoir job and they have obtained money by deception.
    Back to poor old Jacqui Smith, who under this proposal would either lose her home in Redditch or have to reimburse the exchequer for all money paid for it by you and me. Or of course move her family into her main home in London – bunk beds are available at John Lewis!

  • 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.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page