Triennial
Review of Parliamentary Pay, Pensions & Allowances by the
Senior Salaries Review Body (SSRB)
I was very grateful for your letter of 18 October
and the invitation it contained to give evidence to this review.
You sent a similar invitation to Sir George Young
as Chairman of the House of Commons Committee on Standards and
Privileges and he will be replying to you shortly forwarding a
submission on behalf of the Committee. As I have been involved
in the preparation of that submission, the most important thing
I wish to do by way of response to you is to associate myself
entirely with its contents.
Many of the points made in the submission apply across
the allowance regime as a whole, but some relate to specific allowances,
notably the Additional Costs Allowance (ACA). Two specific allowances
not mentioned in terms in the submission are the Incidental Expenses
Provision (IEP) and the proposed Communications Allowance to the
introduction of which the House has recently agreed in principle.
While many of Members' core costs incurred in discharging
their parliamentary duties are met direct, as described in paragraph
8 of the Standards and Privileges Committee's submission, the
IEP provides within a capped framework both for flexibility
at the margins on some of these core costs, and for discretionary
expenditure. It thus provides important flexibility through which
Members can tailor their approach to their own particular needs
and requirements, and those of their constituents.
IEP is, however, used entirely at the Member's discretion
within an overall requirement that it is used on 'parliamentary
duties'. Unlike ACA, it is taxable, with expenditure accepted
by HMRC as wholly, exclusively and necessarily incurred on parliamentary
duties being eligible for tax relief. The difficulty in determining
a commonly accepted boundary for the 'parliamentary duties' means
that IEP has the greatest vulnerability to perception of abuse
for partisan political purposes. The Committee on Standards and
Privileges has so far dealt with two cases where Members' publications,
funded from the IEP, have been alleged to have stepped into areas
of party activity. The Committee and I have done our best, in
the context of these particular cases, to define what is and is
not acceptable in this respect. Similar concerns have been expressed
from time to time about IEP funded websites, but have not yet
resulted in a formal complaint.
It has hitherto proved unrealistic to seek wider
agreement on where the line should be drawn between Members' activities
as parliamentarians and those in a party context, given the extent
to which the two are interwoven in our parliamentary system. The
answer, as in the case of ACA, would therefore appear to be greater
clarity in what IEP is intended to cover, and in how any recommended
figure is determined. Also, a degree of tautness in the allowances
might be beneficial in helping to counter criticism that, by providing
the means to support promotional activity on the part of Members,
it funds indirect support to their parties.
As noted earlier, the House has recently agreed in
principle to a Communications Allowance. It may well be
that this new allowance, the details of which have yet to be determined,
will have implications, which SSRB would no doubt wish to take
into account, for the scope and level of other allowances, in
particular the IEP.
To conclude, I hope the opportunity to clarify the
basis and boundaries of the present allowance regime which is
afforded by the SSRB review will be taken, in order to help build
public confidence and assist those tasked with regulating and
applying the regime. I stand ready, with Sir George Young, to
amplify any of these points orally if the Review Body would find
that helpful.
23 November 2006
