Thursday, May 21, 2009
A double deception
Buried in the torrent of media coverage on MPs' "expenses" was a revealing piece in The Daily Telegraph recently, on the workings of the parliamentary fees office.

The first of two pertinent observations comes in the opening to the piece, written by journalists Nick Allen and Robert Winnett. They remark that, "it has become increasingly clear that officials working in the office are often keen to help MPs maximise their claims, rather than safeguarding taxpayers' money."

Then we have Sir Alistair Graham, chairman of the committee on standards in public life from 2004 to 2007. He remarks that: "Allowances became part of the remuneration system, and officials were complicit in that".

To this, we must add the earlier observations which focus not on the officials in the fees office, but on successive governments since the 1970s. It is they that have been complicit in allowing salary increases to be disguised as "allowances", largely to avoid the public outcry attendant on overt pay rises being awarded.

The point we made earlier is that this cosy arrangement was well known to the political hacks, and is known to the Telegraph. Thus, in running its current stories, it is quite deliberately misrepresenting the covert pay rises as "expenses". That is the first deception.

But that begs the question as to why both government and MPs have not cleared up the misrepresentation and come clean about the real nature of the allowances. Therein lies the second deception.

As long as the public are focused on "expenses", the attention is on individual MPs who have been more than usually creative in supplying receipts to cover what amounted to automatic payments. Thus, the smaller number can be pilloried for "expense fraud", while the rest of the MPs escape individual censure.

However, if the allowances are identified for what they actually are – pay increases – then we are not looking at expenses fraud but tax evasion. As part of their salary, the goods and services purchased - and accommodation payments over and above a minimal subsistence rate for the days actually spent in London on parliamentary business – are treated as "benefits in kind". The monetary value of these is taxable as income.

Thus, if MPs did admit the truth about what has been going on, then all of them are complicit and all of them would now be facing substantial bills for back tax, penalty payments for tax evasion and possible prosecution.

On that basis, it is much better to let the "expenses" myth run its course, simply because – of all the unpleasant options – this is the least damaging to the entire membership of the Commons. It is very much a question of hurling a few members to the wolves, so that the rest can escape – the needs of the many outweigh the needs of the few (who, in any case, with have their generous pensions on which to rely).

There is added political advantage to this in that, by selectively focusing on the "old guard" – as seems to be happening - David Cameron has the opportunity to get rid of them and move in some of his own people.

Ironically, the plans to tighten up the "expenses" system is merely perpetuating the current charade. The surviving MPs will be more than willing to accept more rigorous controls as the price for escaping massive tax bills.

Moreover, by this means, they also escape the shame that goes with the admission that, effectively, the vast majority of MPs were complicit in systematic tax evasion. That also avoids the need to justify to their constituents a situation whereby they have granted themselves tax immunity, while benefiting from a system that hounds the ordinary public for every last penny.

However, as Directgov helpfully tells us: "You can report this type of fraud by calling the Tax Evasion Hotline on 0800 788 887, open Monday to Friday from 8.00 am to 8.00 pm, Saturday and Sunday 8.00 am to 4.00 pm. This is a confidential service and you don't have to give your name."

Alternatively, you can make a report online. "HMRC is committed to targeting tax evasion," the site tells us. "We know some people don't pay their fair share of tax, which is unfair on the rest of us. Now you can help us do something about it."

UPDATE: I understand there have been so many reports already that HMRC is about to set up a special hotline to report MPs.

COMMENT THREAD

MPs' expenses: secretive fees office exposed

The operation of the parliamentary fees office was shrouded in secrecy for decades before the disclosures of the past 10 days.

By Nick Allen and Robert Winnett
Last Updated: 1:02PM BST 18 May 2009

However, it has become increasingly clear that officials working in the office are often keen to help MPs maximise their claims, rather than safeguarding taxpayers’ money.

The history of the expenses system dates to a time when MPs were considered honourable and their expenses beyond question. It has only been over the past decade that MPs have even had to produce receipts for many of their purchases.

Many older members of Parliament still take exception to being asked by the fees office to produce proof of their expenses.

The role of the office has evolved through a series of ad hoc developments, leading to confusion both among its own staff and MPs.

Andrew Walker, a civil servant, was appointed to the £125,000-a-year job as finance and administration director at the Commons in 1997, having previously worked as assistant director of human resources at the Inland Revenue.

His degree was in ancient Eastern studies.

He is said to have warned the Speaker, Michael Martin, five years ago that there were excessive claims.

A source said: “Andrew did his best to keep control of things, but it was an impossible job.

“Now MPs are blaming him for the trouble they are in by saying he approved their expenses. He has every right to be angry.”

According to Sir Alistair Graham, chairman of the committee on standards in public life from 2004 to 2007, the expenses politicians submitted have been “sloppy and slapdash” and the fees office was to blame as well.

“It has become all too clear that our representatives in Parliament have adjusted the use of allowances to maximise their personal benefit," he said.

“Allowances became part of the remuneration system, and officials were complicit in that.

“It was an old boys’ club where officials took everything on trust.”

==========================

Friday, May 08, 2009

It has come to this …

On a day when we have reported the highest casualty rate in Afghanistan on one day, since February, the BBC relegates that news to about fifth or sixth item on its main television bulletin.

I heard today, incidentally, that when the Taleban attacked Lashkar Gah last October, so desperate did the situation become that even the Army media team were given rifles and pressed into service, taking turns in the sangars to help defend the base. That this is supposed to be the safest, most secure area in Helmand says it all.

If we had a grown-up nation and a grown-up parliament, there would be calls for an emergency debate on the situation in Afghanistan. By any real metric – as opposed to the wishful thinking of the MoD – we are in for a torrid time this summer, and there can be no confidence that the strategy for dealing with it is right.

But, in a parliament which once decided the fate of kings, nations and empires, the hystèrie du jour - occupying by far the greater part of the national news - was the expenses claims of the members of that once-great institution.

Standing back for a moment, it has long been known in the "Westminster village" that the remuneration package comprises salary and expenses. Given the hypocrisy of the public and media, which demands (but rarely gets) the best from its MPs yet is only prepared to sanction a paltry £63,000 per annum - less than half the salary of a GP and considerably less than the earnings of a primary school head – the money is made up by a relatively generous and relaxed expenses scheme.

The system was, in fact, introduced by Thatcher in the 1980s and is no different in principle from remuneration packages found in the private sector, where low basic salaries are "improved" by generous expenses.

Looking at the total figure – for the life-style and (notional) responsibility – the reumuneration package is not excessive and, if we are ever to have a chance of recruiting the best people for what should be an exacting and vitally important job, then we have to be prepared to pay the going rate. As it is, no one except the wildly ambitious (and optimistic) and the second-rate would be tempted by a remuneration package that is fringed with the degree of personal scrutiny and intrusion that goes with it.

That the MPs themselves have not seen the pitfalls of the arrangements is a reflection on them, but the system is not new and has been familiar to every political hack in the Lobby for the decades it has existed. That the media is now getting worked up about it after all these years says as much about the hacks as it does the system.

But while the poltical claque are now revelling in the discomfort of MPs, none of them seem prepared to look at the other side of the equation – value for money. None of them, for instance, are prepared to suggest that, when 80 percent or more of our legislation is made by Brussels, MPs should take an 80 percent pay cut.

None of them, as we pointed out this morning, seem at all interested in why MPs are standing back, idle, when they should be intervening to prevent departments of state going off the rails.

I personally have listened to MPs tell me how powerless they are, and my counter is that they are so only if they allow themselves to be. I point to the Snatch Land Rover campaign where MPs and Lords ganged up on the government and, in concert with the media, effectively forced the government to review its policy on protected vehicles.

If MPs "hunt as a pack" – as I have heard it described – and use the weapons available to them, from written questions to early-day motions and debates to press briefings, they can be an irresistable force. That so many issues go by default is not through lack of power. It is simply that the MPs are too idle, or too preoccupied with their party politicking to do what is needed.

But when you see the usually sensible Tim Montgomerie fall in with the claque, applauding the self-serving cant of the media, you know there is something seriously wrong.

We really do not have time for this introspective nonsense. There are too many issues crying out for attention and too many problems which require addressing for us to indulge in this lower order matter, when billions are pouring down the drain unheeded, men are dying and the country is going to the dogs.

One of the main jobs of parliament is holding the executive to account. Our job in a democracy – with the assistance of the media – is to hold MPs to account for their performance, the measure of which is how well they constrain and challenge the executive. Whether they spend their agreed expenses allowance, or what they spend it on, is of relatively little importance. We have lost sight of the wood and are counting the trees.

COMMENT THREAD

Thursday, 21 May 2009