The complexity of MPs' expenses

March 12, 2009 10:32 AM

The issue of Parliamentary expenses and allowances will be back in the news today with the publication of the official list of ministerial interests, which sees ministers declare not only their own financial interests but also those of family members. The rumbling on of this and various other stories is - as well as a possible source on controversy, depending on what emerges - a continuing reminder of the complexity of the system of expenses and allowances which operates in our Parliament.


With a blizzard of different allowances and expense accounts, a whole book devoted to the rules and a special, if not particularly competent, department in the House of Commons is apparently still not enough to properly police the system.


One example to rear its head recently is this vexed issue of second homes for MPs. The Sunday Herald recently revealed that a number of Scottish MPs - Tommy McAvoy, Charles Kennedy, Alistair Darling and John Reid - are claiming allowances for second homes despite already owning flats in London. Obviously, if someone already owns a London flat outright but chooses to make money by renting it out and then living at taxpayers' expense, that is wrong. These expenses exist in order to allow people who could not otherwise afford to to represent their constituents in Parliament. Personal poverty should be no barrier to being elected to Westminster, but that does not mean that those who already own a property in London should be able to cash in by renting whilst getting another home free on the taxpayer.


When the Herald approached us, we commented along those lines: "The ACA is there to help MPs represent their constituents, not to help them build up a property portfolio at taxpayers' expense. It is clear the whole system needs tightening." Since then, there have been some vocal objections to this comment, and some total silences from other MPs named in the article that are an interesting indication of the as yet unpublished details of the issue, and an argument for greater transparency.


One MP, Tommy McAvoy, has been in touch to give more details on his case. He doesn't own his flat outright, he has got it specifically on a buy-to-let mortgage and "not a penny of taxpayers' money" has ever been spent on it. Those circumstances put him in the clear, because it's not a flat that he could just stay in and save taxpayers' money instead of renting it out - if he didn't rent it he would either have to sell it, or he would have to live in it himself and then charge that to taxpayers, which would make little difference (or might be more expensive, depending on the size of the mortgage). By being open he has allayed our concerns and undoubtedly the concerns of his constituents.


By contrast to Mr McAvoy's enthusiasm to explain the details of his circumstances, the other MPs in the article - John Reid, Alistair Darling and Charles Kennedy - have been notably silent. Of course, it could be that they are in the same situation but have for some reason decided that they are happy to leave a cloud of suspicion hanging over themselves. Just as likely, though, is that they are not in the same situation as Mr McAvoy - either having been in Parliament and earned sufficient cash to buy their first Parliamentary expenses flat, rent it out and then move onto another on which they can claim further expenses or, in the case of Alistair Darling, having reached a position that comes with a free house on Downing Street, perhaps decided to simply rent out the flat they were claiming on expenses now they are put up somewhere else at taxpayers' expense.


This issue is a complex one precisely because of the potential for such wrongful behaviour to be withing the rules and because of the lack of transparency in the system. It is wrong that, under the rules, an MP could own a six storey house in Westminster but choose to rent it out and then charge the cost of another flat on expenses. That must be stopped by a tightening up of the rules, in order to avoid a system introduced to allow the non-wealthy into Parlaiment simply becoming a tool for self-enrichment. To tighten up the rules, if MPs cannot all be trusted to do the honourable thing and avoid claiming expenses where they aren't necessary, then we will need full disclosure on relevant assets. If MPs are bothered about the possible security implications, then at minimum they should have to disclose to a stern and strict Parliamentary fees office, though I would rather this was put in the hands of the people rather than a watchdog or a bureaucrat.


It's amazing that while the Chancellor of the Exchequer, who lives in a free house at taxpayers' expense, declares that he owns and rents out a flat in London, voters and taxpayers are not being told whether they've paid towards that flat or how much money he is making from it. Proper transparency would give people that information and allow them to judge people like Mr Darling and Mr McAvoy firmly and fairly. In that system, suspicion and criticism would never have fallen on Mr McAvoy, and people would have the right to see and judge for themselves about the rest.

The issue of Parliamentary expenses and allowances will be back in the news today with the publication of the official list of ministerial interests, which sees ministers declare not only their own financial interests but also those of family members. The rumbling on of this and various other stories is - as well as a possible source on controversy, depending on what emerges - a continuing reminder of the complexity of the system of expenses and allowances which operates in our Parliament.


With a blizzard of different allowances and expense accounts, a whole book devoted to the rules and a special, if not particularly competent, department in the House of Commons is apparently still not enough to properly police the system.


One example to rear its head recently is this vexed issue of second homes for MPs. The Sunday Herald recently revealed that a number of Scottish MPs - Tommy McAvoy, Charles Kennedy, Alistair Darling and John Reid - are claiming allowances for second homes despite already owning flats in London. Obviously, if someone already owns a London flat outright but chooses to make money by renting it out and then living at taxpayers' expense, that is wrong. These expenses exist in order to allow people who could not otherwise afford to to represent their constituents in Parliament. Personal poverty should be no barrier to being elected to Westminster, but that does not mean that those who already own a property in London should be able to cash in by renting whilst getting another home free on the taxpayer.


When the Herald approached us, we commented along those lines: "The ACA is there to help MPs represent their constituents, not to help them build up a property portfolio at taxpayers' expense. It is clear the whole system needs tightening." Since then, there have been some vocal objections to this comment, and some total silences from other MPs named in the article that are an interesting indication of the as yet unpublished details of the issue, and an argument for greater transparency.


One MP, Tommy McAvoy, has been in touch to give more details on his case. He doesn't own his flat outright, he has got it specifically on a buy-to-let mortgage and "not a penny of taxpayers' money" has ever been spent on it. Those circumstances put him in the clear, because it's not a flat that he could just stay in and save taxpayers' money instead of renting it out - if he didn't rent it he would either have to sell it, or he would have to live in it himself and then charge that to taxpayers, which would make little difference (or might be more expensive, depending on the size of the mortgage). By being open he has allayed our concerns and undoubtedly the concerns of his constituents.


By contrast to Mr McAvoy's enthusiasm to explain the details of his circumstances, the other MPs in the article - John Reid, Alistair Darling and Charles Kennedy - have been notably silent. Of course, it could be that they are in the same situation but have for some reason decided that they are happy to leave a cloud of suspicion hanging over themselves. Just as likely, though, is that they are not in the same situation as Mr McAvoy - either having been in Parliament and earned sufficient cash to buy their first Parliamentary expenses flat, rent it out and then move onto another on which they can claim further expenses or, in the case of Alistair Darling, having reached a position that comes with a free house on Downing Street, perhaps decided to simply rent out the flat they were claiming on expenses now they are put up somewhere else at taxpayers' expense.


This issue is a complex one precisely because of the potential for such wrongful behaviour to be withing the rules and because of the lack of transparency in the system. It is wrong that, under the rules, an MP could own a six storey house in Westminster but choose to rent it out and then charge the cost of another flat on expenses. That must be stopped by a tightening up of the rules, in order to avoid a system introduced to allow the non-wealthy into Parlaiment simply becoming a tool for self-enrichment. To tighten up the rules, if MPs cannot all be trusted to do the honourable thing and avoid claiming expenses where they aren't necessary, then we will need full disclosure on relevant assets. If MPs are bothered about the possible security implications, then at minimum they should have to disclose to a stern and strict Parliamentary fees office, though I would rather this was put in the hands of the people rather than a watchdog or a bureaucrat.


It's amazing that while the Chancellor of the Exchequer, who lives in a free house at taxpayers' expense, declares that he owns and rents out a flat in London, voters and taxpayers are not being told whether they've paid towards that flat or how much money he is making from it. Proper transparency would give people that information and allow them to judge people like Mr Darling and Mr McAvoy firmly and fairly. In that system, suspicion and criticism would never have fallen on Mr McAvoy, and people would have the right to see and judge for themselves about the rest.

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