The new expenses regime

The new Independent Authority has reached ts conclusions on what expenses MPs should be allowed to claim. There are some improvements for the taxpayer – no full fare first class travel, a lower amount for rent of a second home, and fewer extra items for that second home. Mortgage interest is disallowed.

Last night we were voting on the Budget until 11.30pm – later than the usual 10.30 pm finish on a Tuesday. That led to discussion amongst some MPs about the new list of constituencies not eligible for a second home allowance at all, on the grounds that they are within easy train travelling distance with sensible train times into and out of London. In Berkshire the determination is that Bracknell, Wokingham and Newbury are allowed second home costs but Maidenhead, Reading East, Reading West, Slough and Windsor are not. It’s the same pattern in all the Home Counties.

Personally I think IPSA has a very difficult job to do and they have gone about it sensibly. I just hope there is now public support for their scheme, so the MPs settle down to it. Last night in some areas – not the mentioned Berkshire MPs – there were unhappy MPs trying to work out how they could get home to their constituencies if they reached the station at midnight.

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17 Comments

  1. Letters From A Tory
    Posted March 31, 2010 at 10:28 am | Permalink

    Unfortunately, common sense regarding solutions to the MP expenses scandal died at the around the same time as many MPs' reputations.

  2. Jonathan
    Posted March 31, 2010 at 10:54 am | Permalink

    I make the journey regularly from Earley to London and it's hell; I can't imagine making it every day although 1000's of people do. It's a feature of our society that we are willing (put upon) to travel even further distances to work as housing becomes more expensive.
    Getting back from London after 10pm can easily put another hour onto the journey as the connections are messed up.
    Cutting the hours MPs stay in the House to 9-6 and slashing the holidays they enjoy would still allow enough time to get all work done.

  3. Nick
    Posted March 31, 2010 at 11:18 am | Permalink

    Personally I think IPSA has a very difficult job to do and they have gone about it sensibly. I just hope there is now public support for their scheme, so the MPs settle down to it. Last night in some areas – not the mentioned Berkshire MPs – there were unhappy MPs trying to work out how they could get home to their constituencies if they reached the station at midnight.

    It's called a taxi.

    Just shows what the thinking is.

  4. WheresMyVote
    Posted March 31, 2010 at 11:20 am | Permalink

    "Last night in some areas – not the mentioned Berkshire MPs – there were unhappy MPs trying to work out how they could get home to their constituencies if they reached the station at midnight. "

    Good! This means that these MPs are going to understand what is like for the rest of the population that have to do this on a daily basis. The primary purpose of being an MP is to represent your constituents, how is this possible if you are insulated from the effects your decisions have on those same people? Maybe now some serious thought will actually be put into making public transport a decent service.

    In general, I think IPSA have nearly aligned the MPs expenses with that of the real world. I actually don't object to MPs being able to employ family members, provided they have to advertise the role and go through a formal interview process against other candidates.

  5. Mark
    Posted March 31, 2010 at 12:07 pm | Permalink

    The IPSA approach is one way. Personally, I think they missed a trick. All MPs are expected to attend Westminster. Therefore, they should be remunerated on the assumption they will have a home within commutable distance – just as if they were a Civil Servant working in Whitehall. The variable element is the location of constituencies. That is where it is appropriate to consider an expenses regime.

    It would be interesting to know how many MPs actually have a home in their constituency, rather than close by. If "close by" is good enough, then it would substantially extend the area where a second home should not be justified as an expense, because the constituency would be commutable from a Westminster commutable home, so perhaps a Bristol or Swindon MP could be based in Reading. Any argument that that would make commuting between the constituency and Westminster too difficult should be ignored – such a commute would not be possible from e.g. Orkney anyway.

    Moreover, it would be far more equitable and cheaper to treat the variable cost of a constituency home as expenses. Those MPs who represent areas where housing is cheaper would cost less to provide for, while having a constituency area property of similar standard to those who represent more expensive areas. Instead of pay and allowances being set to make a respectable life for those in the most expensive areas, to the benefit of those who come form the cheaper ones, you end with a more level playing field.

    It is clear that politics needs to have an end to the disruption caused by the expenses scandals (and that includes taming the Lords who seem to have largely exempted themselves from prosecution that would have been pursued anywhere else). Perhaps IPSA itself needs trimming though. Why do they need so many press officers? I don't think they need any at all – the head of the organisation should take responsibility for answering to the public, including via the press. Press for it!

  6. Alan Wheatley
    Posted March 31, 2010 at 12:11 pm | Permalink

    I think MPs are hard done by as to expenses, but they have only themselves to blame.

    Makes you think – if they can not sort out their own expenses what chance do they have of making a good job of running the country.

    The debate should never have been allowed to degenerate into all and sundry expressing an opinion on what expense was reasonable to claim. A second home ALLOWANCE should never have been claimed as expenses.

    Almost all the issues relating to MPs are already address by what is a tax deductible expense/allowance for private industry. All we wanted was for the MPs to be treated the same, NOT to make cosy rules unique to themselves.

    The whole issue has been clouded by a lack of clear information. Even now I am not clear whether switching the second home for capital gains tax purposes is exactly the same as anyone can do, or if it could be done such that only an MP could uniquely benefit.

    Lets hope the whole saga does quiet down as there are far more important issues to address.

    Lets also hope that we are not soon to hear a proposal to increase MP's pay as an offset to the expenses they have lost. Pay is one thing and expenses entirely another, and mixing the two up, as seems to have happened over a period, is at the heart of the recent, sorry mess.

  7. Steve Cox
    Posted March 31, 2010 at 12:33 pm | Permalink

    I raised the matter of first class rail travel for public sector employees on your blog a few days ago, John, not realising that it was going to be a part of the new expenses regime. So 640-odd MP's can no longer claim full-fare first class travel – plus the few admirals and generals that GB was kicking with his big clunking bovver boots. But what about the tens of thousands of other public sector staff who regard it as a right to travel full fare first class? If they are allowed to continue in this way, then the savings from changing the rules for MP's and top military brass will be completely irrelevant.

    • Jonathan
      Posted March 31, 2010 at 4:16 pm | Permalink

      Just think of the savings the Tories could make there; they'd save straight away on all public servants having to take standard class travel (flights & trains); it might well have the knock on effect of freeing up another train carriage for those not fortunate to have someone else paying.

    • Johnny Williams
      Posted April 1, 2010 at 12:37 am | Permalink

      I would like to endorse this vitial point made by Steve Cox. Thousands of senior civil servants are now quietly chuckling, as are many at the BBC as they continue with impunity to claim First Class Travel and "Gold Plated " Pensions.

      We have "hit" a few Generals and Politicians but not hit the millions of pounds being lost in this manner at Town Halls and Quangoes Country wide.

      Our biggest problem is the cost of an expanded, fat Public Sector and it is those Senior People who need a spotlight placed upon them, across the whole Country. It is called "Brutal Transparency" when tax payers or rate payers money is used. They shudder at the thought of such a Public Spotlight on their secret spending

  8. Jeff
    Posted March 31, 2010 at 1:26 pm | Permalink

    The house price bubble has had and continues to cause serious distortions to the UK economy. Perhaps now that MP's will have less incentive to tolerate property ramping, we may see a more responsible attitude from politicians when it come to dealing with its consequences.

    • Mark
      Posted April 1, 2010 at 11:35 am | Permalink

      I would be in favour of fixing allowances for housing and pay for a parliament. That would give MPs the incentive not to vote for inflationary policies.

  9. grahams
    Posted March 31, 2010 at 5:12 pm | Permalink

    Replacing allowances with expenses is a good move, following decades behind most private business. But the total package is what economists call a poor local optimum: not much cop but no incentive to improve it. Unfortunately, the Commission was given a brief to look only at expenses and interpreted it narrowly. The £400 a year pay introduced when Lloyd George was Chancellor aimed to allow MPs of ordinary means to function in London without taking a paid job. In relative terms, that would translate into £100,000 a year now but even Margaret Thatcher would not grasp that political nettle. The downside of the new system is a costly new quango led by someone paid more than MPs, already staffing up merrily with needless overheads. plus a bureaucratic regime that makes MPs even more like civil servants than elected representatives and may not attract candidates of the quality of the proprietor of this blog. In my view, MPs should be self-employed people paid a standard fee (varying only by distance) by their own constituents to represent them and employ the staff now necessary for a job much encumbered since Lloyd George's day: say £150,000 to £170,000 a year with no expenses and no state pensions. But that is not going to happen so let us hope that the new regime works and give it a chance.

  10. Bob Frost
    Posted March 31, 2010 at 7:15 pm | Permalink

    John, Trains from Paddington to Reading @ 23.20, 23.30, 23.38, 23.48, 00.20, 00.34, 01.34. Your problem is????

    Reply: I have no problem. I don't live anywhere near Reading Station, and as I said the Reading MPs are not complaining about IPSA's wish that they do travel back to Reading every night.

  11. Peter Black
    Posted March 31, 2010 at 11:32 pm | Permalink

    Okay, enough is enough. We don't need politicians to travel second-class, or suffer terrible penalties, to prove that they love us. In short, first-class travel is fine, but only if you're on legitimate parliamentary business….

    So, as an elected politician on the road, are you? If you are, you have my vote, and you can have a decent salary (£100k plus) and first-class travel… if not, then there is no argument that justifies any payment to you at all. Paying for performance isn't really bad…..

  12. JohnRS
    Posted April 2, 2010 at 1:14 pm | Permalink

    At over £60k pa a Travelodge wouldnt break the bank.

  13. Mark R
    Posted April 7, 2010 at 10:24 am | Permalink

    Perhaps compulsory purchase back the old County Hall and use its hotel facilities for "put-me-ups" for MPs who can't get home several nights a week?

  14. cheap ghd
    Posted May 7, 2010 at 9:58 am | Permalink

    The whole issue has been clouded by a lack of clear information. Even now I am not clear whether switching the second home for capital gains tax purposes is exactly the same as anyone can do, or if it could be done such that only an MP could uniquely benefit.

  • 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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