The Underlying Problems
7. Members are office holders, not employees, and
have a right to be reimbursed reasonable expenses necessarily
incurred in performing the duties of their office. There is no
reason in principle why they should subsidise these from their
parliamentary salaries, and no one should be deterred from seeking
election or be unable to look after their constituents because
they are obliged to meet, from their own pockets, expenses properly
incurred in this respect.
8. However, one enduring difficulty with the ongoing
debate over allowances is that the important differences in the
character of the various elements which make up the overall structure
tend to be overlooked. Provision must be made to cover costs tangibly
related to Members' performance of their parliamentary duties,
such as the cost of staff, constituency office accommodation,
stationery, equipment and communications costs. Many of these,
while technically constituting 'allowances' are met direct by
the House authorities, with Members having only limited control
over the figures. Others fall within the scope of the Incidental
Expenses Provision (IEP), over which Members have much more control.
There are also allowances which relate to Members' personal costs,
such as those associated with the need to spend time away from
'home', (for the most part covered by the Additional Costs Allowance
(ACA)) and travel costs between Westminster and constituency.
It is unfortunate that public comment, particularly comment in
the context of the differences between Members in the levels of
allowances claimed, rarely brings out these critical differences.
9. It is sometimes asserted that, in the past, the
allowance system has been used as a conduit for the Government
of the day to avoid politically inconvenient levels of increase
in Member' pay, thus blurring the distinction between salary and
allowances; and there are concerns that the allowance regime may
in practice be subsidising party political activity. Taken together,
these fuel concerns in some quarters that the scale and scope
of the available allowances goes beyond that strictly needed by
Members to meet costs necessarily incurred in discharging their
parliamentary duties.
10. We hope the SSRB will propose a regime which
is both fair to members, and to their constituents who have to
pay for the allowances under review. We make some specific suggestions.
11. The ACA should cover what its name implies—additional
costs necessarily incurred by Members as a result of having to
live, for the most part, in two places. Anything else tends to
undermine its non-taxable basis. Greater clarity in what it is
intended to cover, and how the figure is determined, might build
public confidence. It might also be sensible to recognise that
public confidence will be enhanced if the allowance is seen as
taut.
12. The allowance should also be structured in such
a way that it is not possible for Members to arrange their affairs
so as to maximise their claims at the expense of personal outgoings,
and in particular to avoid costs which constituents in similar
circumstances could not avoid. Within the context of an allowance
system common to all Members, there should nonetheless be an overarching
presumption that every Member, including Ministers and office
holders, should in practice meet from their own resources what
amounts to the full reasonable costs normally associated with
a principal domestic residence.
13. One component of the ACA is the claim for additional
food costs. Living away from home almost inevitably means higher
food costs, but the element chargeable to public funds ought to
be proportionate. This is an area where comparison with practice
elsewhere would be possible and might be beneficial.
14. It is important, though, that the system is at
the same time kept as simple for Members as possible. Again, reference
to best practice elsewhere would be helpful, over matters such
as the level at which receipts or other relevant documentary validation
should routinely be provided in support of claims.
15. Members' expenses are always likely to prove
controversial in some quarters, and the level of allowances, like
Members' salaries, will inevitably remain a matter of public debate.
Independent involvement in determining fair levels for these,
which balance Members' rights to reasonable levels of reimbursement
of the costs of their office with taxpayers' expectations that
public funds should not be used to facilitate private benefit,
is a key element in maximising public confidence in this area
where the natural sensitivity is compounded by Members ultimately
being judge and jury in a matter in which they have a direct personal
interest.
21 November 2006
