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Freeze pay, scrap IPSA

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by Paul Goodman

I wrote yesterday that MPs expenses are Cameron's Perfect Storm.   I set out what's likely to happen during the next few weeks.  Let me now turn to what should.  It goes almost without saying that the question of what expenses MPs should be paid, if any, is secondary to the more important question of what we want them to do and to be in the first place.  I've written on this matter before, though not recently (and not about IPSA).  Essentially, there are two views -

  • MPs should be citizen legislators, who by definition are therefore free to earn and work outside the Commons.  That way, they represent a range of interests, the conflict of which is then debate and resolved.
  • MPs should be professional politicians, who are not so free, but are funded exclusively by the taxpayer.  It's hard to see how such representatives could represent this range of interests, since they're state-funded

Indeed, MPs as professional politicians will, at worst, speak and vote only for those who, like themselves, are also taxpayer-dependent.  At best, the only other substantial interest they'll represent is their constituency - which is why the professional political model leads naturally to the belief that being an MP is a job (rather than "work").  This view, in turn, points logically to the separation of the legislature from the executive, since it follows that MPs should no more moonlight as Ministers than as barristers or business people or journalists (or whatever).

I hold the first view.  Others take the second.  But either way, one must decide for one or the other.  And, having done so, turn next to expenses.

The bill for MPs' expenses rose continuously until the expenses scandal found out the details.  Professionalisation increased over the same period.  (In 1982, 69 per cent of MPs had extra-Parliamentary remuneration.  By 2008, this had fallen to 41 per cent.)  I'm not suggesting that the second was the sole cause of the first, but there's surely some connection.  And in my view, the more MPs come to be professional politicians, the more likely they are to try to use expenses as a form of backdoor pay (which is wrong, and what happened).

So what to do?  Having first made up your mind whether or not you want citizen legislators or professional politicians, there are two future ways forward.  (I'm excluding a third, which is that MPs should have to fund their own expenses, which is, I believe, unreasonable.)  And again, it all depends what you want.

  • If you want a rapid-turnover Commons, you'll favour keeping IPSA and the present system.  MPs are paid over two and a half times annual earnings.  There's unlikely ever to be a shortage of volunteers.  The quality of last May's intake is high (by and large).  But if pay's frozen indefinitely, outside earnings are inhibited and MPs have to pay their own expenses, turnover will increase.  MPs will enter the Commons, work hard for a term or so, and quit.  Those who reach the Cabinet will go at the election after they're sacked, or sooner.  Over time, the Commons will become less experienced, even more frantic, and its institutional memory will wean.
  • If you want a slower-turnover Commons, you'll support ending the Catch 1922 I described yesterday.  At the least, you'd badger IPSA into putting expenses on-line as soon as they're claimed, which shouldn't be mission impossible; at most, you'd pay flat rate allowances for expenses - rent costs for a flat, office expenses, travel, phone and utility bills - though with one strict proviso: any reform would have to provide better value for money than the present system.  But this would of course close a rich seam of media stories, so the papers would try to stop it happening, and try to work already furious voters into further rage.

Me?  I'd freeze the pay, ease outside earnings conditions - to help MPs become citizen legislators again - and go to fixed rate allowances.  You'll almost certainly disagree.  But either way, there's no need for a costly bureaucracy established to administer the system.  You don't believe me?  Then consult the unearther of the expenses scandal exposure, the Daily Telegraph, which wrote in an editorial as recently as January 7 -

"Does this mean that Ipsa should be maintained in its present form? Not necessarily. MPs' essential objection to the watchdog is that it appears to presume they are criminals even before the first receipt is submitted. We agree that, in the long run, this is not desirable, though it will take several years of impeccable behaviour before the public is offended by this presumption.

A better reason for reforming Ipsa, or perhaps scrapping it, is that its well-remunerated public employees are using our money to administer, tinker with and defend what seems to be a malfunctioning system. It is true that the body has succeeded in reducing the amount MPs claim; but such has been the outcry from politicians over real and imagined injustices that it has launched an elaborate two-month public review of its work. The questions in the review go into great detail and will consume an enormous amount of MPs' time. But all the public wants to know is whether Parliament has found a simple and transparent system to stop elected representatives fiddling their expenses."

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