Two years ago, as a Home Counties Member of Parliament representing the constituency of Broxbourne, I gave up the Additional Cost Allowance (ACA) in favour of commuting into London on a daily basis. This was a decision that best met my personal circumstances. Turning my back on the ACA does not make me a saint (far from it) but simply reflects the fact that I have no overriding ambition to serve on the Frontbench and that I prefer being with my family than staring at four walls in London.
Despite not claiming for a second home, I recognise the hours that many colleagues work makes having a place to stay in London essential. For this reason, I took a keen interest in the Kelly inquiry, suggesting that the second home allowance of £24,000 be paid as non-pensionable income, taxed at 41%, with any reimbursements negotiated with Her Majesty’s Revenue & Customs. Making the taxman the arbiter of the allowance would go some way towards restoring the public’s confidence in their elected representatives. This approach would also do away with layers of expensive bureaucracy in the House of Commons Fees Office.
The argument I put forward was reflected in the submissions of other colleagues, who shared my desire to see Members of Parliament argue the toss over permitted expenditure with the taxman rather than the Fees Office. Unfortunately, it seems that Sir Christopher Kelly may have chosen to travel down a different path. Below, I have set out a brief, non-exhaustive resume of the pros and cons of his likely findings:
- The review will satisfy the public’s wholly understandable desire for retribution against Members of Parliament (and who can blame them for wanting this?);
- The review may well reduce the overall cost of politics, which was the noble aim of the Party Leaders and the House of Commons;
- The phase-in period will allow colleagues to manage their finances towards the changeover but will create tiers of Parliamentarians (more on that below).
- The review, by widening the remuneration gap between a backbench MP and Minister, will provide an absolute coup to the Executive and Government Whips' Office. All but the most sainted MP will have one eye towards their family finances when the Whips come knocking with promises of preferment in return for moderated behaviour. Is yet more patronage healthy for our Parliamentary democracy?
- The review will favour independently wealthy Members of Parliament, who can afford to retain a ”networking” base in London, while their less well-off colleagues commute back to their constituencies – taking them out of the political loop.
- The review has the potential to erode contact between the MP and his/her constituents. It is probable some Home Counties MPs and those further afield will – for a combination of family, career and cost reasons – choose to retain a single home in London.
- The review will do nothing to encourage women to enter Parliament. The Information Tribunal that heard the appeal on the publication of MPs’ expenses said that £425 a week would pay for a one bedroom, furnished flat in Central London. The current limit is £300 a week – not much room for the family there!
- The review, as being reported, will generate lingering bad feeling between the haves and have-nots – creating tiers of Parliamentarians divided by year of entry into the House and personal wealth.
The Allowance structure was in desperate need of reform. However, it seems Sir Christopher Kelly has shelved bold innovation in favour of a bureaucratic, Whitehall-type solution.
This is a great shame and an opportunity lost.