Tuesday, 31 March 2009

The Expences Of Democracy

With recent expense claims from various politicians being revealed recently, and MPs as usual voting themselves a pay rise, its time to examine how much democracy costs us.

On top of an annual salary of £63,291, MPs are entitled to claim for a range of things including staffing, IT equipment, travel, pension provision, communications and housing. The type of housing allowance MPs can claim for depends upon where they live, and effectively breaks down into two categories: those with constituencies in inner London, and those with seats in the rest of the UK. Because they live close to Westminster, inner London MPs can't claim as much in housing costs as their outer London and regional colleagues, as it is deemed that their need to stay away from home is comparatively low.

MPs decided to award themselves a payrise of £1,468 from tomorrow – a rise of 2.33 per cent. Which is more shocking than their expense claims in my opinion at a time when the country is in a recession. With both the Conservative and Liberal Democrat front benches backing the government, the decision over this year's pay settlement did not go to a formal vote! This bringing their salary - before allowances - up from £63,291 to £64,766. Hastily Downing Street moved quickly to say that ministers will not benefit from the rise, which comes at a time when the Government's preferred CPI index of inflation stands at zero.

The averages MPs Claims broken down by party:
LibDems claim £151,232
Labour MPs claim £146,452
Tory MPs claim £138,343

MPs do not have to pay council tax on their second homes. They can, of course claim it on expenses.

A few of the highlights;

* Jacqui Smith: claimed £135 under the maximum allowable £23,083 including a bath plug and adult films! The home secretary is facing an inquiry after claiming £20,000 per year on her home in her constituency in Redditch, saying that her sister's home in London was her main residence.
* Tony McNulty: the employment minister claimed £14,000 per year on his parents house in his constituency in Harrow. He insists he acted within the rules.
* Dawn Butler: her other home in Stratford being the same distance from parliament as her Brent South home.
* Harry Cohen MP: has claimed more than £300,000 in second home allowances, because he listed a caravan as his “main home” and claimed instead for a £375,000 property in his Leyton and Wanstead constituency in East London. An unrepentant Mr Cohen reportedly said: "It really is part of my salary in all but name, that is what it exists for. When MPs were given this allowance they were told "Go and spend it, boys" and that is what I have done. It is my right.”
* Bill Butler MSP: tried to claim back a £1 charity donation that a hotel made on his behalf. He claims that the hotel made the charge without his knowledge. It was rejected by the Scottish Parliament authorities.

* Malcolm Rifkind: claimed £499.0 for his wife to make 3 four mile journeys.
* Derek Conway: the MP for Old Bexley and Sidcup was suspended from the Commons and ordered to return £13,161 in January 2008 for paying more than £200,000 to his family, including to his youngest son, Freddie, who was a full time student in Newcastle at the time.
* Nicholas and Ann Winterton: the husband and wife who are both MPs in Cheshire were found to have breached the expenses rules when they claimed £21,600 per year in rent on their London flat after paying off the mortgage and transferring the ownership of the £700,000 property into a family trust.
* Caroline Spelman: The Meriden MP was told to pay back £9,600 after the parliamentary standards commissioner found that she had unintentionally breached Commons rules by paying her children's nanny through Parliamentary allowances, saying that the nanny was working as a constituency secretary.

* Nick Clegg: claimed the most of any party leader with £149,026
* Baroness Emma Nicholson MEP: is receiving thousands of pounds in EU expenses for an office already paid for by the UK taxpayer.
* Mark Hunter MP: broke parliamentary rules by using his allowance to fund a survey which attacked the government and was later used for a campaigning newsletter.

Some links to the media (feeding frenzy):
Expenses probe to be speeded up
Details of MPs' expenses 'for sale'
House Of Commons Expenses
Jacqui Smith's porn bill makes MP expenses probe urgent
MP expense system to be reviewed
'The porn ultimatum'

The trouble with so much negativity on this isue is that in the future on wealthy may try for politics. But if Cllrs can do a decent job for less than £10,000 as a part time job, something is wrong.

Thanksfully the LSE examined this in 2006 with their report 'Working or shirking? A closer look at MPs' expenses and Parliamentary attendance'

Party affiliation, constituency size, average income of the constituency and marginality of the constituency are all uncorrelated with the total amounts claimed.
Attendance varies substantially, with a few MPs attending fewer than 10 per cent of possible divisions while others attending more than 90 per cent of the time.

For staff and other expenses, party affiliation and the age and experience of an MP matter. The Liberal Democrats seem to be high spenders on staff while Labour MPs spend more on other items like postage and computer equipment. The Conservatives appear to be lower spenders on these items. Age and experience, or announcing retirement reduce spending, especially on computer equipment, stationery and postage.
The distance from Westminster, however, is a very strong predictor of spending.

The average cost (over a three years period) of an individual vote in parliament is £556. This figure, however, hides a large variation: the cost goes from £257 for the cheapest MP to £3,360 for the most expensive.

One of the reports authors, Dr Valentino Larcinese said: 'Up until now MPs have not themselves been subject to performance targets. But this raises the wider issue of whether (as public servants) they should. Our findings show that the allowance system does seem to fulfil its main purposes of levelling the playing field between MPs with different circumstances and providing MPs with the means to improve the quality of their service.'

Working of Shirking? A Closer Look at MPs' Expenses and Parliamentary Attendance by Professor Besley and Dr Larcinese is online

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