Call to Action: The final MPs' expenses consultation

January 11, 2010 11:04 AM

Back in the autumn, Sir Christopher Kelly's inquiry into MP's expenses went well. There was a broad public consultation that got a large response. The public made their views extremely clear. As a result, a hefty block of
excellent recommendations was delivered to Parliament - see here
- and party leaders publicly agreed to support them.

But there
is still one, final consultation to settle the issue, launched last week by
the new Independent Parliamentary Standards Authority (IPSA). We have produced a question by question guide (below) to our views on each question, and the consultation itself can be found here.

It is extremely important that as many of us as possible respond to this consultation with a strong message. The public's responses will determine how tough or soft IPSA's new
rules will be. There is a very real danger that last minute, coordinated lobbying by MPs could water down Kelly's proposals significantly. The only way to defeat that attempt is to send IPSA a clear and overwhelming message that a fudge is unacceptable and the Kelly proposals should be implemented in full.


If you'd like to make sure IPSA doesn't backslide at the last minute, we encourage everyone to go on line to contribute
to the consultation - http://mpexpensesconsultation.org.uk/. For full details of the IPSA proposals, see here. (A summary is available on the last few pages.)


Here is our guide to the 18 questions in the consultation. Feel free to use our responses as you see fit. 

Q.1: Do you agree that the CSPL (Kelly inquiry) principles, supplemented as proposed, should form the basis of new expenses system?

YES. The principles laid out in the CSPL (Kelly) report - regarding the probity, transparency, and proportionality of any system) should underpin the new rules.

However, while IPSA is right that the system "must give the public confidence that high standards of honesty and decency will be upheld", its other supplemental principle - "that the system should prohibit MPs from entering into arrangements which might appear to create a conflict of interests in the the use of public resources" - may be problematic. While we fully support IPSAs efforts to limit the possibility of MPs inappropriately channelling public funds, we are concerned that the principle may be interpreted to restrict MPs’ outside interests. Kelly was right to conclude that outside interests can be beneficial for Parliament, by giving MPs a connection to the real world, and the new system should reflect this.

Q.2 Do you agree with our proposal to concentrate on expenses rather than allowances wherever possible?

YES. Instead of allowances, the system should run on the principle of reimbursing expenses that are incurred. Allowances have clearly proved open to abuse and have encouraged a culture of claiming as much as possible, rather than just what is necessary to do the job. As the principles suggest, total transparency of all expense claims and allowance usage must be at the centre of the new system.

Q.3 Do you agree that there should be annual limits to the amount that can be spent from public funds on each of the main elements of our expenses scheme, except travel and subsistence?

Yes, so long as the system remains based on essential expenses, and the limits do not become seen as a target to aim for (as the allowance limits currently are). Subsistence (i.e. food etc) should not be exempt, though – there should be a firm limit there, too.

Q.4 Do you agree with our approach to the submission of claims?

YES. MP's must be responsible for their own expenses, even if their staff are involved in spending the money or accounting that expenditure to IPSA. No longer should MPs be able to excuse their indiscretions by claiming that someone else submitted was fulfilling out their expense form on their behalf.

Q.5 Are you content with our proposed approach to the publication of claims?

YES. All claims (approved and rejected) should be published in full - both online and in paper form - by IPSA at very regular occasions. The only information to be withheld should be that identified by the High Court in their previous ruling on publication of MPs’ expenses – i.e. credit card and bank account details.

Q.6 Do you support the idea of requiring MPs to produce an annual report of their use of public funds?

NO. An annual report is frankly unnecessary if full details of all claims are to be published every few months, as Kelly recommends (see answer to Question 5). Moreover, giving an MP the opportunity to produce a glossy publication about their own work at taxpayers’ expense gives them an incumbent propaganda advantage, much like the regularly abused Communications Allowance.

Q.7 We propose that MPs are eligible to claim for accommodation expenses unless their constituency contains a station within London transport zones 1-6. Do you agree with this approach?

NO. Journey time, rather than a distance measure (such as the Zone 1-6 proposal) should determine eligibility for accommodation expenses. While we appreciate that it may be easier to have a simple measure such as the proposed Zone 1-6, IPSA's role is to develop and oversee the best system, not the easiest.

As workers whose job is in London, many MP's living outside Zone 1-6 are just too close to Parliament to legitimately claim for accommodation in London. Many thousands of commuters make similar journeys each day, and for some MPs living outside Zone 1-6 the journey into Westminster is easier (and not necessarily significantly more expensive) than it is for some MP's who live within Zone 1-6.

Of course, as the parliamentary day is not always equivalent to a normal working day, MP's are not always regular commuters. This problem must be corrected through changes to the parliamentary time table, rather than through the expenses system. It is perfectly feasible to make the Parliamentary day conform to more normal work times, and thus to enable easier commuting, particularly by reducing recess and holiday time. Such a reform would not only make parliament itself more effective, but also more attractive to candidates with young children.

IPSA should limit accommodation expenses to those MP's who live an hour or more from a central London train station (within Zone 1-2). Once this system is in place, MPs will no doubt move quickly to reform their anachronistic parliamentary time table.

Q.8 Which of the following is most important in a long term system for accommodating MPs: MPs having responsibility for their own actions; cost to the taxpayer; no money passing through MPs' hands; flexibility for MPs to identify properties that meet their particular needs?

Although all are important, preventing MPs from making a capital gain must be the main focus of new rules.  A less transparent and more flexible system may seem attractive on paper, and even potentially cheaper in theory, but the most important thing is to ensure the public are in control of an honest and transparent system, in which MPs have no potential or incentive to profit (even temporarily) at the taxpayers' expense. Any system that lacks transparency and allows for capital gain will inevitably end up being extremely costly – both financially to taxpayers and reputationally to the House of Commons.

Q.9 When should the payment of mortgage interest to existing MPs be ended?


Current IPSA proposals will not allow new MPs - elected later this year - to claim for mortgage interest payments. Re-elected MPs will - for an indeterminate time - be allowed to claim mortgage interest payments, with the understanding that they will terminate such contracts when possible.

It is unfeasible for all mortgage interest payment to be eneded immediately, due to the time that can be involved in the act of selling a house. However all sitting MPs must be instructed to instigate the sale of their taxpayer-funded homes now, with a view to terminating their mortagage contracts as soon as possible. As a guard against MPs dragging their feet, all payments should cease to be available from 1st November 2011. As recommended by Kelly, all profits on the properties must be returned to the taxpayer.

Q.10 Do you agree with our proposed approach to accommodation expenses for MPs with caring responsibilities?

NO. While those MPs with disabilities (or with spouses with disabilities) should be entitled to accommodation appropriate to their needs, 'caring responsibilities' relating to children should not(in itself) warrant higher levels of accommodation allowance. Taxpayers will cover the accommodation of MPs on the basis that they are working away from home. Like many people, this will involve having a small place in London, suitable for one or two people, but not to house the family. Arrangements for MPs must reflect what is standard practice in the private sector for employees who work away from home for three to four nights a week. Such demands do not warrant a public subsidy to allow families to live with MPs in London.

Some consideration must be given to the issue of MP's who are single parents, or individuals who the sole carer for an

elderly or infirm parent. IPSA will have to judge such cases individually, but it would be appropriate for the system to accommodate such circumstances.

Q. 11 Do you agree with our proposed list of running costs for accommodation which might be met through public funds?

YES. Within the limits to be set by IPSA, some reimbursement for council tax, water, electricity, gas or other fuel, ground rent, contents insurance, service charges and security appear fair. The exclusion of all 'improvement' costs - cleaning, gardening, furnishing, repairs or maintenance - is also correct.

Q.12 Which of the options that we set out [page 43 of the consultation] do you favour in providing assurance about claims for travel expenses?

Option 2, as providing details of each journal is the most practicable approach and is widely used in the private sector. IPSA must ensure that it is vigilant in scrutinising claims made under this system.  

Q.13 Do you agree with our approach to travel by public transport, including ordinarily travelling standard class?

BROADLY YES. These proposals are a welcome and significant improvement on the existing system.  The concept of 'ad hoc' provision is quite concerning, though, as MP's should be reimbursed soley for parliamentary or constituency travel. Where MPs travel around the UK on fact-finding trips, these are already funded by the Parliamentary Committees that arrange them. IPSA should clarify what it means by 'ad-hoc'. Beyond that however, the proposals should be implemented in full.  

Q.14 We propose to prohibit the use of public funds in the employment of family members by MPs. Do you agree with this approach?

YES, we agree fully with the proposed prohibition, with one extension. The current definition of family member in the proposals is too narrow, and would arguably allow siblings and other close relatives who don’t live in the MP’s family home to be employed at taxpayers’ expense. This is unacceptable, and the wider Welsh Assembly definition of family members should be used, to ensure siblings, aunts and uncles and so on are forbidden in order to eliminate any prospect of this becoming a scandal again.

Q.15 We propose that IPSA should prohibit MPs from renting from, or purchasing goods or services from, members of their families. Do you agree with this approach?

YES.

Q.16 Do you agree with our proposed approach to communications expenditure? (Page 59 of the consultation document)

YES. The Communications Allowance should be abolished, and is effectively an incumbency benefit that gives sitting MPs an unfair advantage.

Q.17 Do you believe there should be any form of payment in the event of an MP leaving Parliament, either voluntarily or otherwise?

NO. As IPSA itself says in the consultation document, the volatility associated with the job of being an MP is well understood by both sitting MPs and candidates. An MP who stands down makes a conscious choice not to seek re-election, and should therefore not be rewarded for that choice. Similarly, an MP that loses in an election has effectively been rejected by their constituents; again, this does not deserve reward. MPs should be free to take out their own unemployment insurance at personal cost if they wish.

Q.18 What impact do you believe our proposals might have on the diversity of representation in the House of Commons?

The implication that IPSA's proposals, or an expenses system as whole, affects the diversity of representation in the House is a red herring that should be avoided at all times. As political parties are the gatekeepers to parliamentary seats, in many cases effectively deciding on behalf of constituents who will represent them in Parliament, any real concern about diversity in the House must be directed towards parties.

Back in the autumn, Sir Christopher Kelly's inquiry into MP's expenses went well. There was a broad public consultation that got a large response. The public made their views extremely clear. As a result, a hefty block of
excellent recommendations was delivered to Parliament - see here
- and party leaders publicly agreed to support them.

But there
is still one, final consultation to settle the issue, launched last week by
the new Independent Parliamentary Standards Authority (IPSA). We have produced a question by question guide (below) to our views on each question, and the consultation itself can be found here.

It is extremely important that as many of us as possible respond to this consultation with a strong message. The public's responses will determine how tough or soft IPSA's new
rules will be. There is a very real danger that last minute, coordinated lobbying by MPs could water down Kelly's proposals significantly. The only way to defeat that attempt is to send IPSA a clear and overwhelming message that a fudge is unacceptable and the Kelly proposals should be implemented in full.


If you'd like to make sure IPSA doesn't backslide at the last minute, we encourage everyone to go on line to contribute
to the consultation - http://mpexpensesconsultation.org.uk/. For full details of the IPSA proposals, see here. (A summary is available on the last few pages.)


Here is our guide to the 18 questions in the consultation. Feel free to use our responses as you see fit. 

Q.1: Do you agree that the CSPL (Kelly inquiry) principles, supplemented as proposed, should form the basis of new expenses system?

YES. The principles laid out in the CSPL (Kelly) report - regarding the probity, transparency, and proportionality of any system) should underpin the new rules.

However, while IPSA is right that the system "must give the public confidence that high standards of honesty and decency will be upheld", its other supplemental principle - "that the system should prohibit MPs from entering into arrangements which might appear to create a conflict of interests in the the use of public resources" - may be problematic. While we fully support IPSAs efforts to limit the possibility of MPs inappropriately channelling public funds, we are concerned that the principle may be interpreted to restrict MPs’ outside interests. Kelly was right to conclude that outside interests can be beneficial for Parliament, by giving MPs a connection to the real world, and the new system should reflect this.

Q.2 Do you agree with our proposal to concentrate on expenses rather than allowances wherever possible?

YES. Instead of allowances, the system should run on the principle of reimbursing expenses that are incurred. Allowances have clearly proved open to abuse and have encouraged a culture of claiming as much as possible, rather than just what is necessary to do the job. As the principles suggest, total transparency of all expense claims and allowance usage must be at the centre of the new system.

Q.3 Do you agree that there should be annual limits to the amount that can be spent from public funds on each of the main elements of our expenses scheme, except travel and subsistence?

Yes, so long as the system remains based on essential expenses, and the limits do not become seen as a target to aim for (as the allowance limits currently are). Subsistence (i.e. food etc) should not be exempt, though – there should be a firm limit there, too.

Q.4 Do you agree with our approach to the submission of claims?

YES. MP's must be responsible for their own expenses, even if their staff are involved in spending the money or accounting that expenditure to IPSA. No longer should MPs be able to excuse their indiscretions by claiming that someone else submitted was fulfilling out their expense form on their behalf.

Q.5 Are you content with our proposed approach to the publication of claims?

YES. All claims (approved and rejected) should be published in full - both online and in paper form - by IPSA at very regular occasions. The only information to be withheld should be that identified by the High Court in their previous ruling on publication of MPs’ expenses – i.e. credit card and bank account details.

Q.6 Do you support the idea of requiring MPs to produce an annual report of their use of public funds?

NO. An annual report is frankly unnecessary if full details of all claims are to be published every few months, as Kelly recommends (see answer to Question 5). Moreover, giving an MP the opportunity to produce a glossy publication about their own work at taxpayers’ expense gives them an incumbent propaganda advantage, much like the regularly abused Communications Allowance.

Q.7 We propose that MPs are eligible to claim for accommodation expenses unless their constituency contains a station within London transport zones 1-6. Do you agree with this approach?

NO. Journey time, rather than a distance measure (such as the Zone 1-6 proposal) should determine eligibility for accommodation expenses. While we appreciate that it may be easier to have a simple measure such as the proposed Zone 1-6, IPSA's role is to develop and oversee the best system, not the easiest.

As workers whose job is in London, many MP's living outside Zone 1-6 are just too close to Parliament to legitimately claim for accommodation in London. Many thousands of commuters make similar journeys each day, and for some MPs living outside Zone 1-6 the journey into Westminster is easier (and not necessarily significantly more expensive) than it is for some MP's who live within Zone 1-6.

Of course, as the parliamentary day is not always equivalent to a normal working day, MP's are not always regular commuters. This problem must be corrected through changes to the parliamentary time table, rather than through the expenses system. It is perfectly feasible to make the Parliamentary day conform to more normal work times, and thus to enable easier commuting, particularly by reducing recess and holiday time. Such a reform would not only make parliament itself more effective, but also more attractive to candidates with young children.

IPSA should limit accommodation expenses to those MP's who live an hour or more from a central London train station (within Zone 1-2). Once this system is in place, MPs will no doubt move quickly to reform their anachronistic parliamentary time table.

Q.8 Which of the following is most important in a long term system for accommodating MPs: MPs having responsibility for their own actions; cost to the taxpayer; no money passing through MPs' hands; flexibility for MPs to identify properties that meet their particular needs?

Although all are important, preventing MPs from making a capital gain must be the main focus of new rules.  A less transparent and more flexible system may seem attractive on paper, and even potentially cheaper in theory, but the most important thing is to ensure the public are in control of an honest and transparent system, in which MPs have no potential or incentive to profit (even temporarily) at the taxpayers' expense. Any system that lacks transparency and allows for capital gain will inevitably end up being extremely costly – both financially to taxpayers and reputationally to the House of Commons.

Q.9 When should the payment of mortgage interest to existing MPs be ended?


Current IPSA proposals will not allow new MPs - elected later this year - to claim for mortgage interest payments. Re-elected MPs will - for an indeterminate time - be allowed to claim mortgage interest payments, with the understanding that they will terminate such contracts when possible.

It is unfeasible for all mortgage interest payment to be eneded immediately, due to the time that can be involved in the act of selling a house. However all sitting MPs must be instructed to instigate the sale of their taxpayer-funded homes now, with a view to terminating their mortagage contracts as soon as possible. As a guard against MPs dragging their feet, all payments should cease to be available from 1st November 2011. As recommended by Kelly, all profits on the properties must be returned to the taxpayer.

Q.10 Do you agree with our proposed approach to accommodation expenses for MPs with caring responsibilities?

NO. While those MPs with disabilities (or with spouses with disabilities) should be entitled to accommodation appropriate to their needs, 'caring responsibilities' relating to children should not(in itself) warrant higher levels of accommodation allowance. Taxpayers will cover the accommodation of MPs on the basis that they are working away from home. Like many people, this will involve having a small place in London, suitable for one or two people, but not to house the family. Arrangements for MPs must reflect what is standard practice in the private sector for employees who work away from home for three to four nights a week. Such demands do not warrant a public subsidy to allow families to live with MPs in London.

Some consideration must be given to the issue of MP's who are single parents, or individuals who the sole carer for an

elderly or infirm parent. IPSA will have to judge such cases individually, but it would be appropriate for the system to accommodate such circumstances.

Q. 11 Do you agree with our proposed list of running costs for accommodation which might be met through public funds?

YES. Within the limits to be set by IPSA, some reimbursement for council tax, water, electricity, gas or other fuel, ground rent, contents insurance, service charges and security appear fair. The exclusion of all 'improvement' costs - cleaning, gardening, furnishing, repairs or maintenance - is also correct.

Q.12 Which of the options that we set out [page 43 of the consultation] do you favour in providing assurance about claims for travel expenses?

Option 2, as providing details of each journal is the most practicable approach and is widely used in the private sector. IPSA must ensure that it is vigilant in scrutinising claims made under this system.  

Q.13 Do you agree with our approach to travel by public transport, including ordinarily travelling standard class?

BROADLY YES. These proposals are a welcome and significant improvement on the existing system.  The concept of 'ad hoc' provision is quite concerning, though, as MP's should be reimbursed soley for parliamentary or constituency travel. Where MPs travel around the UK on fact-finding trips, these are already funded by the Parliamentary Committees that arrange them. IPSA should clarify what it means by 'ad-hoc'. Beyond that however, the proposals should be implemented in full.  

Q.14 We propose to prohibit the use of public funds in the employment of family members by MPs. Do you agree with this approach?

YES, we agree fully with the proposed prohibition, with one extension. The current definition of family member in the proposals is too narrow, and would arguably allow siblings and other close relatives who don’t live in the MP’s family home to be employed at taxpayers’ expense. This is unacceptable, and the wider Welsh Assembly definition of family members should be used, to ensure siblings, aunts and uncles and so on are forbidden in order to eliminate any prospect of this becoming a scandal again.

Q.15 We propose that IPSA should prohibit MPs from renting from, or purchasing goods or services from, members of their families. Do you agree with this approach?

YES.

Q.16 Do you agree with our proposed approach to communications expenditure? (Page 59 of the consultation document)

YES. The Communications Allowance should be abolished, and is effectively an incumbency benefit that gives sitting MPs an unfair advantage.

Q.17 Do you believe there should be any form of payment in the event of an MP leaving Parliament, either voluntarily or otherwise?

NO. As IPSA itself says in the consultation document, the volatility associated with the job of being an MP is well understood by both sitting MPs and candidates. An MP who stands down makes a conscious choice not to seek re-election, and should therefore not be rewarded for that choice. Similarly, an MP that loses in an election has effectively been rejected by their constituents; again, this does not deserve reward. MPs should be free to take out their own unemployment insurance at personal cost if they wish.

Q.18 What impact do you believe our proposals might have on the diversity of representation in the House of Commons?

The implication that IPSA's proposals, or an expenses system as whole, affects the diversity of representation in the House is a red herring that should be avoided at all times. As political parties are the gatekeepers to parliamentary seats, in many cases effectively deciding on behalf of constituents who will represent them in Parliament, any real concern about diversity in the House must be directed towards parties.

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