I recently published this analysis of local newspaper coverage of MPs’ expenses claims. One thing is quite clear: the IPSA system will do nothing to restore the reputation of Parliament.
The results of the analysis are quite shocking:
- IPSA is bringing MPs into disrepute by portraying honest claims as illegitimate, which is generating misleading media coverage nationwide.
- 63% of stories made unfair and misleading comparisons between MPs and their claims.
- 97% of local newspaper stories were negative towards MPs.
- Negative coverage was seen by 28 million readers of local newspapers.
- MPs and their staff are forced to spend 498 days a year rebutting misleading and inaccurate stories generated by the IPSA, at an additional cost of about £150,000 to the taxpayer (£340,000 including overheads).
The shortfalls in IPSA’s approach
So let us consider IPSA’s approach. IPSA publishes the aggregated claims of all MPs on a bi-monthly basis. It also publishes all rejected claims submitted by MPs. But perhaps of more interest is what IPSA does not publish.
It fails to disaggregate claims. The public only see grouped headline figures, which encourage false comparisons between total amounts claimed by MPs. The problem is exacerbated by IPSA’s method of bi-monthly publication, which means a single invoice (for example, for office rent) can move a particular MP from the bottom to the top of the table. If IPSA were to publish expenses claims on an annual basis, the public and media would be better able to make fairer and more meaningful comparisons between the costs of MPs.
By failing to publish the underlying receipts behind claims, IPSA is propagating the falsehood that all MPs have something to hide. This approach does nothing to help restore public trust in politicians. Indeed, it almost certainly hinders any possibility of repairing public confidence. IPSA argues that the cost of publishing receipts would be too great, but this is an unconvincing argument. The IPSA board designed the scheme and should have been aware of the costs involved. The current approach offers the worst of both worlds: it is incredibly costly, yet it lacks transparency.
IPSA also fails to properly categorise rejected claims. Dozens of published rejected claims were either due to administrative mistakes by IPSA, or the unnecessary complexity of their system. Many rejected claims were subsequently paid, but IPSA does not make any connection between the two. This has caused untold damage to the reputations of a new intake of MPs who had nothing to do with the old, flawed expenses regime.
US Supreme Court Justice Louis Brandeis once said that “sunlight is… the best of disinfectants” – the idea that public disclosure of data makes politicians more accountable and improves public trust in elected officials. However, as academics Archon Fung, Mary Graham and David Weil have subsequently argued, transparency must be “targeted”; in other words, it must be comparable, standardised and disaggregated. The IPSA approach fails on all three counts.
- The data published by IPSA is not comparable, as the circumstances of no two MPs are the same. The topography of each constituency is unique. A rail fare from Westminster to Scotland, for example, is not comparable to a rail fare to Norfolk.
- The data is not standardised. Commodities such as shares are standardised. The price of a share buys exactly the same commodity for any two purchases. However, the price of a train fare buys two very different products if one is a peak-time first class ticket from Scotland and the other an off-peak from Witney.
- The data is not disaggregated. IPSA publishes total claims made by MPs but does not disaggregate the data into categories.
Openness and accountability are undoubtedly good for public life. The public clearly has the right to know how its money is spent. But the IPSA system confuses means with ends. Transparency is not an end in itself; it must serve a purpose.
The IPSA approach is bad for constituents and the taxpayer. It is bad for Parliament and British democracy. Constituents enjoy less of their MPs’ time because MPs spend hours fire-fighting inaccurate media stories – often as a result of mistakes by IPSA. The cost to the taxpayer remains unnecessarily high. The IPSA system actually costs more than the discredited regime it replaced. Our Parliament is mocked abroad, and an entire new generation of MPs have had their reputations unjustly dragged through the mud.
Clearly a new system must be in place for operation by April 1st 2011. The Prime Minister himself has rightly said that a better system must be introduced, or Parliament will take action to do so.
The way forward
But what is the way forward? The 1964 Lawrence Committee succinctly defined the dilemma we face today: either MPs are remunerated to a degree which allows those without private means to efficiently perform their duties; or a system of “differential remuneration” is introduced “which would attempt to meet… the variation in circumstances of individual Members.”
Successive governments have pursued the latter route for over fifty years to disastrous effect. The solution is clear: to restore the integrity of Parliament and rule out abuse for good, we must return to the principles underlying the original 1911 Members’ Allowance. This is why I have presented the Parliamentary Standards (Amendment) Bill.
The Parliamentary Standards (Amendment) Bill – what does it do?
- Reduces the cost of MPs by about £4 million a year.
- Retains a strict regime of receipts for office and staff costs – so that the public can see exactly how their money is spent.
- Simplifies the way in which payments are made by introducing a completely transparent taxable Members’ Allowance – it would be simple and cheap to administer and impossible to abuse.
- Treats MPs exactly the same as any person with self-employed income – they must deal with the HMRC for legitimate business expenses.
- Asks IPSA to set the rate for the Members Allowance for an entire Parliament.
- Maintains the independence of IPSA, but forces it to fulfil its original mandate to be cost-effective and efficient.
- The Bill is offered as a cross-party platform for change, not a final destination and is open to amendment in committee.
- Puts to bed an issue that’s been plaguing Parliament for 50 years.
We can only hope that the Government shows the good sense to allow the Bill to make progress before it’s too late. Over the past fifty years, Parliament has dug itself into an ever deep hole over expenses. It is now time to stop digging.