MPs make a try for a discrete £20k+ pay-rise in the face of the public sector pay-freeze

The British Army has a brave tradition known as the "Forlorn Hope": a band of soldiers who would make the first assault against a well defended position. None of the Forlorn Hope was expected to survive unscathed; few were expected to survive at all. In spite of the extreme danger there was rarely a shortage of volunteers. Ambitious men who had a forlorn hope of being plucked from obscurity, veterans who hoped forlornly to show they still had what it takes, or those on their last legs forlorn and yet hopeful of leaving the mark they had failed to leave in their careers so far. Survivors were rewarded with promotion, glory, and cash.

British Members of Parliament have set up their own Forlorn Hope, in the form of the Committee on Members' Expenses. Their objective is to scale the heights of public outrage and outflank the entrenched disgust of voters at our MPs' pilfering, and breach the defences of the public purse. If their assault is successful they will earn the whispered gratitude of the whole House of Commons, perhaps with ministries for the survivors and peerages for the fallen.

As Britain was distracted by thoughts of Christmas food, presents, and relatives, our intrepid MPs quietly made their opening gambit. Objective, to sneak through a remuneration rise in the face of the current freeze on public sector pay. The committee, set up in July 2011, published its first report early in December 2011. One of its key recommendations (Recommendation 17):

1. IPSA provide a detailed explanation of the rationale for its existing London supplements (especially the Outer London one) and make transparent its current methodology for calculation of the rates.
   
   
2. A body independent of both Parliament and IPSA be commissioned by the House Service to undertake a financial cost-benefit analysis to determine whether extending IPSA's current system of London and Outer London supplements to other regions in the UK could provide greater value for money for taxpayers..
   
   
3. In not more than six months' time, the House should have the opportunity to consider the merits of that cost-benefit analysis and evaluation and to make a decision on whether there should or should not be a system of regional supplements instead of the existing travel and accommodation provisions.

(IPSA=Independent Parliamentary Standards Authority)

The committee, you will note, has identified “a system of regional supplements” as a means of capturing a few extra £000s using the Outer London allowance as its Trojan Horse. So, what is this all about? Referred to as the London Area Living Payment, the details are:

Eligibility:            MPs for constituencies in Greater London, plus 24 MPs who are outside Greater London but are in the “London Area” (within 20 miles of Parliament).

Value:               £3,760 per annum for MPs in Greater London

                        £5,090 per annum for the 24 MPs in the “London Area”

In order to reinforce the argument for inflating these relatively modest amounts, the committee asks IPSA to ‘make transparent’ its methodology for calculation of the London supplements. IPSA publishes an FAQ document, with the following statement on how it calculates the additional £1,330 per annum for the outer London MPs:

“IPSA took the average cost of a return, at peak time, from a major rail terminus in each of the 24 constituencies entitled to the additional amount, and multiplied this by four days a week, for 30 weeks a year. Allowing for tax (which is paid by MPs on the LALP at a rate of 40%), this equated to an average additional cost per MP of £1,330 per year.”

From this we see that IPSA assumes that our hard working MPs spend 120 days a year in Parliament. Or perhaps 150, as this calculation equates to the price of an annual season ticket.

The existing travel and accommodation provisions allow MPs to claim £150 per night for hotel accommodation in London, or £19,900 a year for renting an apartment.

The expense allowance for travel has no upper limit. The “MPs’ Expenses Scheme” document specifies what travel is covered:

MPs may claim for Travel and Subsistence Expenditure for journeys which are necessary for the performance of their parliamentary functions, and fall into one of the following categories:

a.             for MPs who are eligible for Accommodation Expenditure, journeys between any point in the constituency (or a home or office within 20 miles of their constituency boundary) and Westminster or a London Area home;

b.             for MPs who are not eligible for Accommodation Expenditure, journeys between their constituency office and Westminster;

c.              travel within the constituency or within 20 miles of the constituency boundary;

Using IPSA’s assumption of our MPs spending 30 weeks a year in Westminster, our non-London representatives would be able to claim for 30 return tickets from their constituencies. Without limit! Which perhaps puts a new perspective on parliament’s pusillanimous performance on runaway rail fares, with season tickets up to 10 times more per mile than in Europe.

MPs are entitled to an “Anytime standard class rail travel return”, which at UK ticket prices adds up to a pretty penny. In fact, checking some example fares, tens of thousands of pretty pennies:

Using IPSA’s assumption for London MPs, that they come in to Westminster to work for 30 weeks a year, it is no wonder the rest of our MPs are drooling just a little bit. Rather than have to submit expense claims for what they actually spend, the prospect of getting a top-up of over £20,000 (travel + accommodation) a year would make most people salivate.

And it almost makes sense! Wouldn’t it save the cost and effort of filling in all those forms, and paying a bean-counter to check and hand out all the little payments? Except for the fact that being an MP is one of the very few public sector professions where 

a)      you don’t have to turn up at work
AND

b)      you can hold down as many other paid jobs as you like

Under these circumstances, actually having to incur an expense before being able to get it reimbursed is highly inconvenient. Much better to get it paid as an additional allowance, without any further scrutiny.

As we can see from the Members’ Register of Interests, here are a few random examples taken from the full declarations of our MPs who find time to earn an extra crust or two away from their political vocation, doing their hobbies:

·        £3,333 per month as deputy chairman of an energy exploration company.

·        £175,000 for work as a practicing barrister between December 2010 and July 2011

·        £102,568.22  for role of Distinguished Global Leader in Residence at a US university.

·        £62,181.32 for a speech in Nigeria.

·        £40,000 for work paid for by a school between September 2010 and November 2011

·        £20,000 for advising a recruitment company between February 2011 and November 2011

·        £1,234.06 per month from June-December 2010, rising to £2,083 per month from January 2011 as a director of a software services company.

·        £11,759 per quarter as a director of an energy exploration company.

·        £75,000 per year as vice chairman of a northern football club

·        Something between £90,000-£95,000 per annum as an adviser to a venture capital company.

·        £15,300 for giving a speech at an insurance industry event in Claridge’s Hotel, London.

·        Et cetera, et pecunia…..

Are expenses really so complicated and costly to administer? British organisations, commercial and public sector, have managed for hundreds of years. In the new-fangled internet era, MPs need look no further than Her Majesty’s Revenue and Customs, who helpfully provide a complete A to Z considered adequate for the use of us ordinary ripped-off Britons.

And yet, in the noble tradition of the Forlorn Hope bravely taking on challenges no rational person would, our intrepid band in the “Committee on MPs Expenses” soldier on. In military terms, doing the unthinkable sometimes works!