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The wrong targets

Created:

20 May 2009

Written by:

Alistair Blair

Mortgages and rent good. Moat-cleaners and mole-catchers bad. But what about "unnecessary" mortgages or "extravagant" rents? It is impossible to construct an allowances system - for MPs or anybody else - that its beneficiaries will not make the most of. The House of Commons allowances system may have run counter to the principle of "selflessness" enshrined in the official Code of Conduct for MPs. But apart from addressing a handful of definitively objectionable transgressions, the new one announced on Tuesday isn't a lot better. Wealthy MPs will continue to claim what they claimed before. Only non-wealthy MPs will be penalised.

Fred Bloggs MP is wealthy. His constituency house cost £750,000. He paid cash, so he has no mortgage. The cost of running the house in the style to which he's accustomed is £42,000 a year. If he wasn't an MP, Fred might have a different second house, but in fact he has this one. And he is entitled from most points of view to a contribution towards owning and running it. He claimed the maximum allowance of £24,000. Since the House of Commons rules oblige him to present receipts, he forwards some of those associated with running his house, which happen to include a £247 bill for mole-catching. From an economic point of view, the Rt. Hon. Bloggs would be equally entitled to claim instead simply £24,000 of the income foregone on £750,000.

Joe Soap MP is even wealthier than Fred but a sixth sense told him that a bill for moles might one day fall into the wrong hands. He too bought a £750,000 house. He could have paid cash, but he took out a mortgage on which the annual interest is £25,000. He presents his mortgage statement and claims the full allowance. This is a cleaner claim than Fred's, although there is zero real difference.

Hamish McFiddle had £20,000 of savings when he became an MP. He used that plus a £150,000 mortgage to buy a constituency house for £170,000; interest - £7,500. He also paid a cleaner £4,000 a year. He also felt the principle of selflessness was bearing down more on him than on Joe and Fred. So he used to bump up with receipts for some meals and furniture and claimed in total £19,000.

Jane Brown MP had no savings but did not intend to let that hold her back. She uses her modest constituency home as her main base and rents a bijou pad in Chelsea. The rent is £23,000 a year. She has no trouble presenting a further £1,000 of claims.

Would you like to write the rules that said which of these MPs should be allowed to claim for which expenses? It would be nice to make the wealthy pay the entire cost of their constituency homes and restrict Jane Brown to living in the manner to which she is accustomed. But it would be a hopeless exercise. Where would you set the floor for the wealthy? How would you define extravagance for the rest?

Of those MPs entitled to second home allowances, 66 per cent claim of £20,000 or more, and 22 per cent claim over £15,000. 11 per cent claim smaller amounts and seven MPs claim nothing. Whether these are wealthy and selfless or poor and selfless, I do not know and frankly, I do not care. Nor do I care that Fred Bloggs used to claim for his mole-catcher, Hamish McFiddle for his meals, and Jane Brown for living higher on the hog than she should.

The Daily Telegraph has entertained us all greatly, but in truth the misgovernance element in the "scandal" of MPs' allowances is very slight. Of course, no MP dare say this. And since they have all signed up to the Code of Conduct, including the immortal caution: "Could your claim in any way damage the reputation of Parliament?", it's open season.

To wish for unabased selflessness from politicians is to wish for the impossible. Public fervour on this issue is beyond reason. Umbrage should instead be directed at high pay in the business and investment community, where the excesses make MPs look like paupers, and are far more damaging to the public good.

If 600 MPs and 400 Lords obtain on average £10,000 of allowances which in a perfect world we would like to deny them, that's £10m a year. Last year, the boss of Shell collected almost £10m all by himself. For keeping our legislators' fiddles at this level - and deriving this huge entertainment into the bargain - we should be celebrating, not despairing.

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