MPs' expenses

British Members of Parliament have been enjoying a very relaxed system of indirect remuneration. Instead of voting themselves pay rises, they have voted themselves allowances which do not show as part of their basic pay.

Two things made this system different from normal: firstly, MPs voted themselves special tax exemptions which members of the public did not have; secondly, the culture surrounding the management of such expenses encouraged MPs to 'use up' their allowances, rather than minimise costs. This was plainly a system and culture which encouraged spending as an MP's 'right', and viewed allowances as a perk of the job.

There will always be those who push things as far as the rules will allow. But they are not always exposed so ruthlessly. What is driving the additional attention and hostility?

We are in a recession, with many worried about their finances. At times of acute threat, people tend to place more blame outside themselves, to avoid immediate pressure. In extreme and focussed form, this turns into scapegoating, where one class of people becomes the repository for everyone else's anger and despair. British MPs are suffering because the British public has turned on them in this way.

As to the system itself, my suggestions are: to tax MPs allowances in exactly the same way as everyone else's; and to give design and control of the system to a non-MP with a specific remit to keep costs down.

Is BAA in trouble?

Running UK airports used to be a monopolistic licence to print money, and an attractive cash cow for outside investors. At the moment, however, BAA, which runs many UK airports, is suffering several attacks - from financial losses; from falls in passenger numbers; and from the Competition Commission's quest to break up its market power.

Passenger volumes have fallen by around 10%, but BAA's main problems relate to financing issues, include interest charges and losses on financial instruments. BAA refinanced its debt (currently around £10bn) last summer.

BAA (majority-owned by Spanish company Ferrovial) has been ordered by the Competition Commission to sell Gatwick and Stansted airports, as well as Glasgow or Edinburgh. The Gatwick sale is well under way, and BAA are considering three rival bids - from Global Infrastructure Partners; Manchester Airport Group and Borealis; and Citi Infrastructure Investors.

The question for me is whether, once the sales are completed, BAA has enough cash-generating ability to finance whatever debt remains on the books. In a buyer's market, this isn't guaranteed. The situation reminds me of BT, a one-time perennial cash-earner, which is now saddled with debt as well as periodic de-monopolising pressure.