There has been endless fuss about MPs expenses. Most of it is either with a tone of envy, or focussed on the apparent dishonesty of some claims. I’d like to suggest thet there has been a much more malign effect in the massive inflation of the parliamentary allowances system in the last 20 years.
Career politicians with no outside interests have been effectively exempted from the tax system as it applies to everyone else. Their tax returns are even dealt with by a special office. (For a while the Revenue has produced a special suplementary return form for parliamentarians. I saw one in the early 90s when helping an MP with his bookkeeping.)
This makes it easy for them to tighten the screws: raise rates and rake-offs, increase the tax-collector’s powers, without caring to comprehend the consequences. It also gives them the idea that everyone else must be milking the system: that rich people have got rich by postitional parasitism, since that’s how you get rich either as an MP, or as one of the providers of government services that they deal with among the quangocracy and PFI tsars.
The Prime Minister’s reaction to this: to try to isolate MPs further, by ‘naming ang shaming’ those who make money honestly in the outside world, and do therefore have some idea what things are like for the rest of us.
I couldn’t give a damn about peculation. It is the isolation of politicians, particularly, but not exclusively, politicians of the present ruling party, as cushioned servants of the state that is fundamentally corrupting. The theory of parliament, the root of its legitimacy, is that it stands between us and the rapacity of the crown, and holds taxes to what are fair and reasonable and are applied in the interests of the kingdom as a whole. That was the ground for the Great Rebellion and the Glorious Revolution. It was the ground on which de Montfort set up the first parliament, attempting to settle an earlier revolution.
Once parliament was filled with the independent rich, well-heeled professionals, and the sponsored, among the latter the old Labour members whose unions or philanthropy paid for them to live in Westminster. They had interests, they had views, but they were self-chosen, not neatly alligned with one another, not bound by a party machine, not tied to the public purse-strings or the rehearsal of instrumental populism.
That is what has been corrupted away almost completely. MPs have been reduced to gold-edged agents of the state, and have prospered the more, the less resistance they have offered the executive. Ministers are often closer to mouthpieces for their departments than their masters. They don’t control the state for us, because the state devotes our resources to keep them in a distanced shadow-world, immune to the effects of what they do at its motion.
I can’t wait for Mr Brown to publish what he thinks are damning details of member’s outside interests. We have had quite enough of inside interests. It will be an excellent guide who to vote for.
It’s this sort of issue that has the potential to bring down a government, or at least a leadership, when people glaze over at more substantial offenses. I’m entirely at a loss, for example, to understand why I’m paying for Gordon Brown to have a cleaner, and I’m guessing the majority of people who have to stoop to doing their own cleaning will wonder much the same.
From our founding the LPUK decided all claims would go through “central clearing” to ensure no fiddling. We would also exempt ourselves from the gold-plated index-linked pension because that would isolate MPs from the inflation, recessions and devaluation that everyone else has to cope with.
Same as the international elite in UNESCO, EEC and other pontificating bodies.They are protected from the world as we know it and never suffer the fiscal consequences of their actions.
Nothing will change while we allow the same group of politicians both to legislate and to tax. Split the legislature into two – one legislative chamber, but without tax-raising powers, and a separately-elected taxing chamber with no legislative powers beyond the operation of the tax system. As long as the current way of doing things obtains, and parliamentarians have the huge elephant-in-the-room conflict of interest that is the tax-and-spend constitution, then even good people will eventually be corrupted, and we finish up back in the pig-sty, every time.
The ability of politicians to make the standard corrupt bargain with the electorate – “Vote for me, and I’ll see you right” – is the heart of nearly every legislative and administrative debacle. Fix that, and you solve the problem. Don’t, and you don’t.
Random question to Guy: do you think term limits are a good idea to counter some of this sort of thing?
Jonathan,
Not really. Conceivably they make it worse by increasing the grip of party and the permanent government institutions against politicians who would then be newbies if not placemen.
A great many of the best parliamentarians are to be found in the Lords, where they cannot be removed at all.
… elected only by net taxpayers.
“Career politicians with no outside interests have been effectively exempted from the tax system as it applies to everyone else. Their tax returns are even dealt with by a special office.”
That second sentence is misleading – I read the article, and they are dealt with by a special office for secrecy/privacy reasons. Now, perhaps MPs shouldn’t have any privacy, but the second sentence doesn’t justify the first, even if it appears to.
How are MPs exempted from the tax system?
Hugo,
I recall reading an article when I was gainfully employed to the effect that MPs were classed as a special case. In my book they work, or should, for us the people who vote for them and pay their wages, expenses and pensions, but they are not classed as employed. Nor are they self employed. thus the article laid out the things that were allowed for MPs far greater than I ever got working full time in private industry. Only an employee but the Inland Revenue were on my back every year although they had my tax returns and the Company tax details. My tax code was a joke, every year I had underpaid tax by well over
£100 and this went on until I retired at 65.
The PM has effectively become the de-facto monarch, yet he is of parliament. This has created a system where parliament, far from holding the “monarch” to account, has become a tool by which the PM and his/her executive legitimise their imposition of ever more laws, restrictions, regulations on an increasingly servile and suppressed public.
Our electoral system is absurd. Most voters in general elections vote for a national party, yet they are actually voting for a specific individual to represent their constituency in parliament, someone who is free to change their party allegiance or support or oppose party policy on any given issue.
Add to this a massive, unelected 2nd chamber, numerous tiers of local, regional, county and district government, regional assemblies, devolution of Scotland, Northern Ireland and Wales, and the European Parliament!
What a bloated, bureaucratic mess of pottage, a gigantic gravy train of nobodies, parasitic on the public purse.
We urgently need a new system of strict proportional representation, with far less MPs, as a first chamber, complemented by a second chamber of volunteers who give freely of their time when able, to scrutinise legislation in much the same way as the Lords now do.
Hugo,
The UK tax rule on business expenses is so harsh that there are several well-established extra-statutory concessions where tax inspectors permit apportionment of business and private use of some expenses. However, the rule is that to be allowable against tax an expense must be necessarily, wholly and exclusively for business purposes. The leading case, that of Mallalieu, appears to establish that even if an item is not in fact used for any private purpose, provided it could possibly be of some private use then the inspector may deem it not allowed.
In the case of people who are employed, ALL goods or services that they receive that are paid for by their employer, especially unsupervised expense allowances, are deemed a taxable benefit in kind. An employee who for example is given a company credit card to use for business purchases is well advised to get an accountant or risk being seriously out of pocket as their tax code will be altered by the P11D return and more tax collected from them automatically.
MPs’ salaries and direct expenses are treated in the same way. But their allowances are different. They are considered “exempt income”, falling outside the tax-schedules altogether. An MP would only incur a potentially taxable expense if he were too naive
Note there is a huge difference here. A normal taxpayer claiming an expense is looking for tax relief – to avoid having to pay over up to 40% (for the moment) of the money they have already received and spent. An MP claiming an allowance is getting 100% extra money, not risking some future charge.
That is quite a different from my suggestion that MPs can look forward to gentler treatment from their segregated tax office. I can’t prove that; but the mere segregation is suspicious. It certainly means all MPs are going to be treated alike, by an office that knows who they are, and not experience the quite variable attentions of the HMRC offered to the rest of the country. Do you really suppose that means HMRC will allow them to be treated worse than average, and that particularly bullying, arbitrary, officials will be appointed to annoy them all simultaneously, and investigate all their non-parliamentary affairs with a combination of ignorance, condescention and aggression?
MPs have some say over tax law, and thus the powers invoved. Only the few who have had professional involvement with taxation outside, however, are currently prepared to tackle the detail of tax legislation. There is a strong interest in the Treasury that most MPs just vote as they are told and do not interfere with its progress.
Any system used by parliament’s temporary occupiers is based on an untested idea that whatever they do, they are essential to the life of the nation and therefore beyond reproach.
Parliament was meant to be a check on the government – made up of independent people.
Of course once Members of Parliament started to be paid (1911) all this was bound to happen – sooner or later.
The wonder is that it has taken so long.
It is rather like “public” (i.e. government) education in the United States.
This was intended by its “father” (H. Mann) and even more by later “reformers” (such as the vile “National Socialist” Bellamy Brothers, Francis and Edward, who did such things as write a “Pledge of Allegience” that deliberatly does not mention the Constitution of the United States whose limited government principles they hated – almost needless to say ignorant conservatives love the Pledge of Allegience).
And the “public school” system in the United States does spread collectivist thinking …….
However, for many years one could make the argument that it did not (I might argue that it did, pointing at such things as the acceptance by the public of such collectivist antics as the New Deal, but good arguments could be made against me).
For many years local (really local – once each School Board covered only a few thousand people or less) control meant that it could be argued that, in spite of the intentions of those who spread the system, American public schools did not really just do the work of the Progressive Movement.
Just as it could be aruged that many Members of Parliament in Britain (in spite of the payment of M.P.s) were, for many years, not just corrupt scumbags uninterested in holding government to account.
The logic of the situation was obvious – and eventually it came to pass.
However, often such things take a lot longer to happen than people like me would predict.
By the way Thomas (“Tom”) Paine argued that members of Congress would never make a rod for their own backs – i.e. would never impose the wild spending and taxes and regulations that he claimed (sometimes correctly claimed) European Kings did, because the Congressmen and Senators would have to pay for the consequences of such wild spending.
However, the Constitution of the United States specifically allows for members of Congress to be paid – and their is no provision for term limits on them, or forbidding pensions.
So I do not see what Mr Paine was basing his argument on.
It is true that a Constitution Amendment (orginally proposed by James Madison) went on to the books a few years ago saying that before an increase in Congressional pay can take effect an election of the House of Representatives must have taken place.
However, the Congress ignores that part of the Constitution (as they ignore most of the rest of the Consitution) and the pay rises are automatic (as are the pension increases).
No open voting – and no judgement of the people.
No one King living off the people (like George III in that rather small house – no luxury when Thomas Paine was actually writing).
Instead 435 members of Congress, 100 Senators, and a President and Vice President and ……….
“But the King had staff and pensioners”.
And each member of Congress and each Senator has staff and pensioners, and …….
As for elections limiting government regualtions and spending……
Two qwick problems with that.
Firstly collectivist ideology (the ideology of the education system and, therefore, eventually much of the media and culture) holds that government is there to help the poor, the sick, the old (and so on) by passing regulations and spending money and that all problems (environment, health and safety, investiment…..) are helped by government passing regulations.
So all this is a “good thing”.
Secondly goverment action (such as spending schemes) help a group of people far more than they hurt the general taxpayer.
Concentrated benefits, diffuse costs – Public Choice problem.
For Representative Democracy to work the above problems have to be overcome – which is difficult.
Although I fully accept that I am speaking with the benefit of centuries of hidesight.
Although the problem was clear almost from the start.
For example, when the evil corrupt Tory Closed Corporation (town authority) in Manchester was swept away by the 1835 Municipal Corporation Reform Act (which got rid of all of Closed Corporations – bar the City of London) the local property tax was indeed changed as Richard Cobden said it would be.
Accept that it did not go down (as he predicted), it went up.
Lots of nice Whig/Liberal projects proved rather more expensive than the old annual dinner of the Manchester Corporation.
Not that the Liberals stinted on showy things – indeed they soon built themselves a palace of townhall (something the old Corporation would never have dared do – not being “freely elected”).
It was much the same in other towns and cities.
For example, the 19th century Liberals in Kettering (my hometown) talked about freedom and voluntary cooperation endlessly.
But in policy what they were interested in doing was setting up a School Board (even after the people of the town voted not to have one), and banning booze, and ………
At least in the 20th Century things like the Manchester Guardian newspaper no longer pretend to be free market – so one need not be shocked at what its readers do when they take office.