Friday, May 29, 2009

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.