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Friday, 19 October 2012

MPs expenses

The issue of MPs’ expenses is back in the news. It seems that MPs have experienced much and learned little: the system is still being used as a cash cow, and they are still trying to keep the whole thing quiet.

According to the Telegraph:

The Independent Parliamentary Standards Authority (Ipsa) reversed its decision to publish information about MPs’ landlords today, after the Speaker of the House of Commons ordered the regulator to keep the information private for “security” reasons.

It is feared that several MPs may be exploiting a loophole in the rules that allows politicians to rent their homes to one another.

This means that MPs can still effectively build up property nest eggs at taxpayers’ expense, despite official attempts to stop the practice following the expenses scandal.

More details have followed since.

Both the amount of money MPs are paid and the method of payment – salary, bonus, expenses – are essentially political questions. They are however of legal interest in two respects. The first is the obvious question of whether expense claims are lawful; that is to say, whether they are within the rules. Various extremely high profile criminal prosecutions were made under the old regime, following determination of the prior question whether the courts or Parliament itself had jurisdiction over the matter. I wrote about this for Criminal Law & Justice Weekly (vol 175, 5 February 2011, p 73).

The second question is the rather more general point about the wrong approach to making law. In my forthcoming book (details on the sidebar in this blog) I have written about R v Chaytor and suggested something on the following lines:

The fundamental flaw is that any system which operates by people making claims and then hoping to get them approved, but with no restriction on the amount that might be claimed or penalty for having a number of claims refused, gives every encouragement to people to keep on shoving in claim after claim for anything and everything. Any rational, profit-maximising individual would do nothing else.

There are many alternatives. For example, MPs could simply have a fixed sum added to their salaries, to be spent on support staff, travelling expenses or whatever, but no more. Then – in sharp contrast with the present system – they would have every incentive to economise.

All the talk in the original controversy about needing second homes and travel expenses was predicated on the assumption that MPs actually needed to be in any particular physical place at any particular time. In the age of smartphones, videoconferencing and unlimited broadband access, however, that assumption is very hard to justify.

However, let us assume that it is indeed desirable for MPs to be physically present in the Houses of Parliament. Let us also assume that it would be unfair for MPs outside the M25 to be saddled with the extra costs of travelling to and staying in London. Then, one could build a hall of residence for those MPs (with a grander name if one prefers). It could be a modern, furnished and serviced apartment block next to the Palace of Westminster. It would cost a tiny fraction of the amount spent on second homes, the security costs would be far lower as there would only be one building to protect, and MPs would have no more and no less than they needed.

No doubt MPs would feel demeaned by this. But they might consider that a number of large city law firms have dormitories on their premises, together with a few ancillary services such as a canteen and laundry service. These are provided for partners working overtime on large deals. If the apartment block was within walking distance from the Houses of Parliament, (perhaps with an underground tunnel to reduce security costs and provide disabled access) it would slash travelling expenses as well.

This would go a long way towards restoring public confidence in MPs and Parliament generally. One fears though that a majority of MPs will still prefer to play the property market at the taxpayer’s expense and either withhold details from the public or take the loss of popularity on the chin.

Unless the above suggestion or a similarly radical reform is instigated, public confidence in Parliament will continue to be threatened. Needless to say, it is not only lawyers who should be concerned by that.

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