UK Economy: MPs Expenses Scandal

London, UK, 26 May 2009. British politics has never been a particularly clean affair, with the whiff of scandal and the sound of madams cracking whips as much a part of Westminster as the Speaker’s wig. The British public have never had a particularly rosy view of their MPs either, who tend to be either rich toffs or young upstarts with spin doctors to polish their image.

The scandal that is currently ripping through Parliament is of a different order altogether.[br]

It the expenses that MPs can claim on second homes to use in London when they are at parliament, together with a few other perks of the trade. It seems that ruling parties have shied away from raising MPs salaries for fear of public backlash, but have no doubt been looking enviously at their chums in the City of London earning vast salaries and bonuses (at least up till last year), and even their American colleagues who get paid about twice as much. A de-facto agreement then appeared to take shape, that these expense claims could be used to supplement these modest incomes.

The Daily Telegraph newspaper got hold of computer disks full of expense claims and correspondence, and has been publishing details on a daily basis. MPs have claimed for outrageous items like the cleaning of a moat around a country home, a duck house and various other lush fittings and fixtures. Some MPs have gone even further and bought and sold properties at a considerable profit, continued claiming for houses that they had already sold, or in the case of a married couple who are both MPs, claimed for the same property twice.

The UK is in the grip of its worst recession since World War II, so to hear about these expense claims while the queues grew at unemployment offices made the public understandably angry. Anger turned to fury at the way MPs attempted to hide the facts or deny them, until the Telegraph started publishing the accounts. Confidence in politicians is at an all-time low.

There was some evidence that Parliament colluded to help MPs claim as much as they could and this had led to the dismissal of the Speaker of the House – the first such sacking in over 300 years.[br]

Casualties So Far

Michael Martin will step down as Commons Speaker. He had used a chauffeur-driven car to get to the local job centre, and his officials had helped MPs to maximise claims.

Shahid Malik stepped down from his post as Justice Minister because of a discounted rent he get on a property he had said was his main home.

Andrew MacKay was the most senior Conservative to go, when both he and his MP wife claimed expenses on both their homes.

David Chaytor was suspended from the Labour Party for claiming on a mortgage that had already been paid.

Elliot Morley was also suspended from the Parliamentary Labour Party for claiming £16,000 on a false mortgage.

Ben Chapman has promised to stand down for claiming £15,000 in interest charges on a mortgage he had already paid of .

Sir Nicholas and Ann Winterton to stand down from parliament for claiming more than £80,000 in rent for a London flat owned by their children’s trust.

Sir Peter Viggers announced he will stand down at the next election after claiming £1,645 on a duck house.

Anthony Steen will step down at the next election for claiming maintenance on his country house, including tree inspections by a forestry tree doctor.

Douglas Hogg announced he would not contest the next election. He initially denied he had claimed £2,000 for clearing his moat but later had to agree to repay it after publication.

 

The Winners

 The Telegraph has clearly scored a scoop and has seen a big jump in its circulation figures.

Smaller parties will get a boost in European elections, but some of their leaders have also been tainted so it is unclear if this can carry through into the all-important parliamentary elections.

Perhaps the most surprising winner has been David Cameroon, leader of the Conservative Party. Although the Tories are usually thought of as rich toffs, and many have been implicated in this scandal, he has thought on his feet and played a great hand.

He has been quicker than Prime Minister Gordon Brown to say sorry and condemn the system and the MPs involved. He also has been quicker to get rid of MPs in his party found to be on the take. This actually strengthens him internally because he can remove some grandees and get more of his loyalists in.

He has also been clever enough to call for reforms of the system, which appear very noble but in reality all help his chances and those of the Conservatives in the next election. If Cameroon is the winner, then Brown will be a clear loser.

Umberto Osman, EconomyWatch.com