MPs Expenses (12 May 2009)
Few issues have generated as much public outrage as recent revelations about MPs’ expenses. There are a lot of things wrong with the current system and people are understandably angry about the ways that some MPs have claimed expenses.
While a lot of the anger is both justified and understandable, newspapers have sometimes also reported things in quite a misleading way. For example, to do our job effectively, MPs need to employ staff. People who have contacted my office will know the work that my own constituency team does in helping people in Birmingham Northfield to take up housing, benefits, employment, community safety and other grievances with Birmingham City Council, government departments and a range of other agencies. We can’t promise to solve every issue but we always try to give the best advice we can. In Westminster, I also employ a researcher who plays a vital back-up role for the work I undertake in Westminster and in diary management.
MPs get a budget from the Commons to pay their staff. This allows me to employ three full time staff and one part time. Some newspapers, however, regularly report these staff salaries as if they are expenses claimed by MPs’ for their personal use. Sometimes they are even reported as part of the MPs’ personal income. If the papers applied that logic to themselves they would also report the salaries paid to journalists as part of the personal income of the newspaper editor or owner!
Another area which has attracted a lot of public comment is the so called “second homes allowance” for MPs. Let me briefly describe the system currently in place. Until recently, this system has been called the “Additional Costs Allowance” and it is now called “Personal Additional Accommodation Expenditure”. In this article I want to describe how those allowances work so that people can make up their own mind about what MPs can claim. (You can also read more about pay and allowances for MPs – including the Green Book – on the UK Parliament website.)
For MPs like me representing constituencies outside London, the job requires me to spend a lot of time working in my Birmingham constituency and a lot of time working in Parliament in London. My parliamentary duties also take me to other parts of the country and to other countries from time to time.
My home is in my Birmingham Northfield constituency and I do not receive, nor would I expect to receive, parliamentary allowances for maintaining that house as a home. I am reimbursed for a broadband connection to a work computer at home which is separate from the family computer. Like people who are not MPs – I can also set against tax some of the costs associated with my use of a room at home for parliamentary office work and for work calls from my home phone line.
I also have to stay in London a lot. When Parliament is in session, I normally go to London during the day on Monday and stay in Parliament until about 10.00 or 10.30 at night. On Tuesday my parliamentary day usually lasts from about 8.30 or 9.00 am until about 10.00 or 10.30 pm. Wednesday is about 8.30 or 9.00 am until about 7.00 or 8.00 pm and Thursday from about 8.30 or 9.00 am until about 7.00 pm – after which I normally head back to Birmingham to work in my constituency on Friday and over the weekend. Sometimes I also have commitments arising from my work as an MP which require me to be in London even if Parliament is not in session.
The upshot of this is that I need somewhere to stay in London. I could claim for hotel accommodation every night I am there. Given the amount I have to stay in London that would be quite expensive in itself. It would also mean that MPs like me would need to pack up and move every week. Given the amount of time we stay in London, most of us think it makes a lot more sense to leave changes of clothes etc down in London. As a result of this, instead of hotel expenses, MPs can claim either rent or mortgage interest (but not the capital on a mortgage) as well as food, heating, lighting, services and household effects up to the same amount that we are allowed to claim for hotel expenses and other costs of staying away from home.
The total allowed here is £24,222 per annum. It may sound a lot – and it is. But it is probably not far off the price you would have to pay if you stayed in a central London hotel for a large part of the year. I have a mortgage on a flat where I stay when I am in London. It was modestly priced by London standards and therefore the mortgage interest I claim on it is lower than that claimed by those MPs who have bought more expensive accommodation. The amounts of other expenses I have claimed for staying in London have varied over time. In the early years after I bought the flat I had to buy start-up furnishings etc. A few years later, I decorated it for the first time and fitted proper carpets. Over an eight year period, I have claimed for new bedding and bought pots, pans, crockery, cutlery etc. I have also replaced a cooker and bought a fridge and a freezer. I have also claimed for replacement light fittings and work on the wiring. All residents in the block of flats pay a quarterly service charge and I also claim for cleaning, repairs, insurance etc. I claim for food on the days I have to be in London or travelling elsewhere on parliamentary business. It does add up to a lot but, put together, it is still normally less than the total allowance MPs can claim for hotel bills or mortgage interest.
Contrary to what many people believe, MPs are also liable for tax if we make capital gains when we sell these “second homes” – just like anyone else. Like other people, we also personally take the financial hit if we have to sell our properties when house prices fall as they have recently.
Information about the amounts claimed by MPs under different categories of allowances and expenses has been available to the public for some years now (available online here). The receipts we have submitted going back to 2004 were to be made available from the Commons authorities for public inspection from this summer after personal details like addresses and bank details had been removed. Before that could happen, though, a copy of the information (including the personal information) was leaked to the Daily Telegraph which has started to publish edited extracts from different MPs’ claims.
The contents of these extracts have generated a huge wave of public anger, not only about cases of apparent abuse by some MPs, but also about the system of allowances itself. Public confidence has been shattered and reforms clearly have to be made if it is to be restored. Part of that goes well beyond the system of expenses and there is not enough space to go into that here.
On the specific question of expenses and allowances, though, there are also real questions about whether the current system is too generous and whether it is fair either to the MP or to the taxpayer. There are choices to be made about how to ensure the realities of an MPs job – including the requirement to spend a lot of time living in different places – can best be addressed. And there are choices to be made about the best way of enabling MPs’ staff to have proper pay, terms and conditions. Being so close to all this, neither I nor any other MP is best placed to determine the fairest way to reform the system. So Parliament has set up an independent commission under Sir Christopher Kelly to look at all these things and to report back. I think that such an independent look at the system is vital for the public to have confidence in any proposals brought forward. I have signed a parliamentary motion on this which you can see online here.
On 30th April – before the revelations in the Daily Telegraph – there was a debate in the House of Commons on whether MPs should introduce interim changes ourselves or whether we should wait for the recommendations of the Kelly Inquiry. You won’t see my name on any of the voting lists from that debate. I had a previously booked constituency commitment at a conference looking at the long term social and economic impact of the MG Rover collapse in South West Birmingham. Given its relevance to my own constituency, I thought it was important that I did not break that engagement.
But I guess it does make the point about MPs having regular commitments in different parts of the country – sometimes at the same time.
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