The issue of MP expenses is a difficult one because the role of an MP is largely a self defined one, but a Member of Parliament like every other worker in the country needs to be able to claim expenses from their employer to perform their job. Yet the question of what MPs should get as a wage and what should be claimed as an expense needs to be defined in a much tighter and transparent manner.

There are six main areas of costs for the taxpayer for each MP these are:-

1. Accommodation

2. Staffing

3. Offices

4. Travel

5. Communications Allowance

6. Salary of Members of Parliament

1. Accommodation

Need – Most MPs, who do not live in or near London, need to have accommodation available in London so that they can represent their constituencies in Westminster during the week, before returning to the constituency to work at the weekend. MPs that live in London likewise need to have accommodation in their constituencies.

2009 status – MPs (except those in inner London) can spend up to £24,222 to assist with their accommodation, under the heading PAAE (personal additional accommodation expenditure). Inner London MPs, and those who do not wish to receive it, can opt to spend £7,500 to assist with London living costs.

REFORM PROPOSALS

• Personal additional accommodation expenditure – Personal additional accommodation expenditure should be restricted to rental agreements, utility bills, and council tax. There should be separate limits for expense claims on rent costs and utility costs. These two limits combined should be substantially less than the current £24,222.
• Property Purchase – No further arrangements by MPs to purchase property through personal additional accommodation expenditure should be entered into. There should be a period of 12 months whilst current MP sort out alternative arrangements to property purchase, after which no further expenditure will be permitted in support of mortgage interest payments.
• Property Rental – renting costs covered only for properties inside London for MPs with constituencies outside London and there needs to a cap put on the level of rent that will be paid. I did think that MPs could be left to decide on the best value for the public purse whether renting or buying but this is clearly but not the case with some members.
• Hotel accommodation – for non-London MPs who choose to commute to London and do not have a residence in London of any kind should be able to claim hotel expenses for the odd night stay to the limit of the London allowance in any one year.
• Utility bills – could be claimed for by all non-London MPs, if the MP has a constituency residence within 10 miles of the constituency and another residence in London. The claimable expense will be on the lower of the two bills, regardless of whether that is the constituency or London residence, and regardless of whether the residences are owned or rented. The combined cost of the bills should be compared on the lower of the two could be claimed. Utility bills should defined as heating costs, fuel costs for cooking, electric, telephone (landline only) and broadband costs. Payment is only on the basis of the production of the necessary bills. If two or more MPs co-habit, total permitted personal additional accommodation expenditure should be divided by the number of co-habitees.
• Council Tax – for non-London MP’s with a London residence the London Council Tax bill should be a claimable expense.
• London Allowance – for all MPs representing London constituencies only and this is to be regarded as taxable income instead of claimed in tax-free expenses. I believe it is difficult to justify to the public London allowance for non-London MPs, particularly as they either will get rent costs covered in the city or travel costs covered if they commute.
• First and second homes – The above rules will mean that it will be not possible or necessary for a MP to define a property as their main or secondary residence. It will prevent MPs choosing the designations based on what is most advantageous to themselves.
• ‘Grace and favour’ housing – The taxpayer should only assist in paying for MPs accommodation once. In the event that an MP takes ministerial office and receives ‘grace and favour’ accommodation, payments of personal additional accommodation expenditure should cease.

2. Staffing

Need – MPs require staff to assist in answering correspondence, taking up the concerns of constituents with Government offices and other organisations, planning meetings with the people, organisation and businesses in their community, and researching issues that MPs wish to speak on in Parliament.

2009 status – MPs are permitted staffing expenditure not exceeding £103,812 to assist them in their duties.

REFORM PROPOSALS

• Employing family members – The employment of all family members should be automatically entered in the Register of Members’ Interests by the Department of Resources, including job description, hours of work and salary. The number of family members employed should be recorded in the publication of expenses, against the provision for staff salary expenditure. The House of Commons Human Resources Department should check the detailed CV, experience and qualifications of all family members to verify their competency to perform the job.
• Staff members – A full and up to date record of all staff employed should be retained by the House authorities, setting out details of persons employed, in what capacity they are employed, and how much they are earning. Spot checks should be undertaken each year on a sample set of MPs’ offices to verify the quality of this data.
• Staff interests – The Register of Interests be extended to include all staff employed in MP offices.

3. Offices

Need – In order to do the job that constituents expect their MP to do, it is important that MPs are provided with the appropriate resources to support them in that job. Often, it makes sense to establish an office in the constituency from which an MP and his or her staff can work. The House of Commons doesn’t provide an office and so one has to be rented commercially. There are also associated running costs such as office expenses for computers, printers, telephones, electricity, water and lights.

2009 status – MPs can spend £22,393 to assist with these office costs under the heading of administrative and office expenditure.

REFORM PROPOSALS

• Value for money – The House of Commons and Members of Parliament are duty bound to secure value for money in providing administrative and office expenditure within the limits set. Whether the House of Commons directly purchases office space for the MPs or the MP rents an office the costs should be independent audited to prove that they are indeed value for money. The size and shape of every constituency is different therefore the requirement and the costs should be rigorously assessed on a case by case basis.

4. Travel

Need – Like many in the private sector, MPs need to travel in order to do their job properly. MPs need to be able to travel to and from Westminster, to represent their constituents’ interests. They also need to travel around their constituencies to be able to meet constituents who wish to raise concerns. Occasionally, it is necessary to represent those interests in Brussels. Unlike many private companies, MPs are not provided with a car. Instead, they are able to claim expenses for that travel.

2009 status – Currently, MPs can claim 40p for each mile up to 10,000 miles and 25p for each mile thereafter. Rail and air tickets can be claimed at cost.

REFORM PROPOSALS

• Mileage rates – These should be annually reviewed to make sure they reflect the costs incurred.
• Maximum mileage payments – That the House should only pay mileage costs incurred between the constituency and Westminster to a maximum of the cost of a standard open rail return between the constituency and Westminster.
• Identify Journeys – all journeys should be identified specifying the journey (date/time/distance) and reason for the journey. Almost unbelievably this is currently only done for claims of greater than 350 miles.

5. Communications Allowance

Need – MPs need to spend money communicating with their constituents and informing them of their activities.

2009 status – MPs will be permitted to spend £10,400. This has been fixed for the next three years.

REFORM PROPOSALS

• No campaigning – Whilst it is in peoples’ interests to be informed of their MP’s activities, expenditure should be tightly audited to ensure that it is not spent on party campaigning.

6. Salary of Members of Parliament

Need – Like all employees the salary of members of parliament needs to be increased from time to time. The salary of Members of Parliament was formerly determined independently by the Senior Salaries Review Board. Now it is up-rated by a Government formula, adopted by the House, in July 2008. The House of Commons is responsible for authorising all public spending and so MPs vote on their own salary and, if they choose to, could vary that formula. Most recently, the formula produced a rise of 2.33%.

2009 status – the annual salary of a Member of Parliament is £64,766.

REFORM PROPOSALS

• Recession pay freeze – If the country economy is in recession there should be no increase of MPs’ salaries because the country is not generating increased income to pay it.
• Independent review – In times of economic growth any change in MPs should be determined by the Senior Salaries Review Board on an annual basis.
• No right to determine own pay – MPs should pass a clear resolution denying themselves the right determine their own salary and should always accept the outcome of the Senior Salaries Review Board.

My Personal Commitments

If I were elected to Parliament :-

1.) I would follow the expense rules as I have defined above, providing of course they are within the parliamentary expense rules.

2.) I would publish all details of my expenses on this website.

Conclusion

MPs need to have provision to meet additional costs over and above their basic salary in the areas of accommodation, office, staffing, travel and communications, but any such provision should be rigorously tested to ensure value for money and costs incurred open to all the analyse to ensure that they are.

Note:- Much the the above proposals are based on Liberal Democrat Leader Nick Clegg’s own plan for MP Expense reform.