Saturday, 5 July 2008

A suggestion about MPs' pay

There is something malodorous about MPs having the power to set their salaries and expenses allowances. Yesterday's debate, concentrating as it had to in present circumstances, on expenses did nobody any favours. Those opposing an increase opened themselves to accusations of pious hand-wringing, those supporting it could be accused of greed at a time when their constituents are having to tighten belts to an alarming degree.

Salary and expenses are very different things and must be looked at separately.

If people of substance are to be encouraged to stand for Parliament it is certainly necessary for a reasonable salary to be paid. I doubt, however, that there is any good reason for that salary to be more than would be considered subsistence wages for a successful professional person.

The present system involves the Senior Salaries Review Body trying to compare the responsibilities of MPs to those of others paid by the public purse. There is a serious problem with this approach because it is unrealistic to compare all MPs to a colonel in the army, a police superintendent or a head teacher (the level of comparison which is made). No colonel, superintendant or head teacher can gain that position in the absence of many years of proven good quality work. Now more than ever the House of Commons is full of young party flunkies. That it also contains many people of genuine quality who can boast successful careers outside party politics does not disguise the fact that a large proportion have never had a real job and have no legitimate claim to comparison in either proven skills or experience with anyone other than middle managers in minor industries.

To argue that top money must be paid to attract top people into Parliament is pure hyperbole. Show me the top people who will stand for Parliament if only the salary were doubled and I might accept there is something to the argument, but I know of no one in that position nor have I ever heard it suggested that there are people in that position. Indeed, if there is an untapped bubble of brilliance give them peerages and an attendance allowance so they can continue their careers and pop into the Lords to help out when their expertise would be beneficial. And then show me how many MPs could command their current salary in the outside world. Many could, of course, but I wouldn't mind betting a pork pie to a pork scratching that a good 40% would not get within spitting distance.

What I suggest is that MPs' salaries are set for a full Parliament. When Parliament is dissolved the level of pay for the next Parliament should be fixed and should stay constant no matter how long until the next dissolution. Those thinking of standing for election who feel they would not be sufficiently remunerated can withdraw and make way for others.

When it comes to expenses there are far too many examples of snouts in the trough (as the great Mr Fawkes and Mr Kitchen have exposed in their blogs - I would add links but don't know how). But I want to look at the system because snouts can only dip into the warm sticky swill if the trough is reachable.

MPs outside a reasonable commuting distance of Westminster do need a London base, it would be unrealistic to say they should not also have a base in or near their constituencies. It is, in my view, reasonable for them to be compensated for at least some of the additional costs of having to run two homes rather than one. What is not reasonable, however, is that they should ever be able to make a capital gain out of the arrangement, particularly a capital gain on their extra home in London. Any money paid by the taxpayer towards mortgage interest or capital repayments should give the taxpayer equity in the property. The percentage equity should be in direct proportion to the amount the taxpayer has paid towards the purchase price compared to the amount the MP has paid.

A capital gain or loss only arises when the resident MP no longer wishes to live there (either because they choose to move or because their constituents become their former constituents). Like the rest of us, while we live in our homes the notional market value is just a figure, a gain or loss can only be made on sale. If the house has risen in value the taxpayer is the appropriate person to reap the benefit, if it has fallen in value the Treasury can decide to sell it at a loss or, more sensibly, it could form part of a pool of houses owned by the Treasury and made available to MPs from outside commuting distance. No chance of personal benefit from expenses = no swill.

When it comes to televisions, fridges, new kitchens, dvd players and the like the sums are so small for any individual MP that they really do not matter - allow them or disallow them it will make no great difference. But for everything that is allowed, there must be a receipt and it must be published. Woe betide the MP in a marginal constituency who draws an annual salary of £60,000-odd and claims a £700 plasma telly when his constituents' pre-tax income averages £23,000.

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