Friday, March 14, 2008

How did MP’s expenses get to this?

Being an MP is a job; yes a special job because they are representing a constituency and their job interview is in the form of an election but still a job after all. When they apply for this job they are well aware that it requires a certain amount of travel and being away on business. This gives them 2 choices: they can either live in their constituency and commute to Westminster or they can live near London and commute to their constituencies at tax payers expense.

Whichever they choose they may need to stay overnight, fair enough, that happens to lots of us and we accept that it is part of the job. Now some employers are very generous, they allow business class travel, 5 star hotels and generous restaurant bills, accepting this is straight off the bottom line but they judge that they get value for money. Others are quite parsimonious and insist on the cheapest form of travel, a 3 star hotel and "reasonable" meals. Most allow a free call to talk to family whilst away but generally limit this to around 10 minutes. I don't see why this principle shouldn't apply to MP's. and maybe they sit somewhere in between.

If someone wants to take their spouse on one of these trips their costs have to be kept completely separate for business and tax reasons. I had one employer who insisted that that we get the clients' permission as well before our spouses travelled with us, harsh but it was a condition of employment.

One thing is sure; if the tax man thinks that the employer has been too generous with their expenses policy then they will tax expenses as a benefit in kind. This means the employee and employer have to pay tax at the prevailing rate on those expenses. Furthermore, all expenses have to be fully receipted, if they aren't the taxman can, and do, treat them as a benefit in kind.

So how have we got to the point where MP's have so many exemptions from these best practices, most of which they have insisted on so they can cream more tax and ensure none of us get any real perks? The answer is that they are in charge of their own pay and expenses policy and like all people the temptation became too much and they started to lick the arse out of it. When this happens in industry with execs awarding themselves company jets and other perks there is, quite rightly, a public outcry. Indeed when they really kick the arse out of it they go to jail, as Lord Black will testify.

As MP's have shown themselves to be so untrustworthy we should turn to industry to provide us with a solution. We need the equivalent of non-execs to police pay and expenses policies. Whoever does this needs to be separated from the civil service following New Labour's successful politicisation of them and with the growth of failed politicians and other toadies being ennobled the Lords is out. Perhaps something along the lines of the jury system, say 100 people picked at random who elect a smaller team to get in to the nitty gritty and then they all vote on it.

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