John Hemming's Web Log John's Reference Website
Tuesday, April 07, 2009
  Parliamentary Expenses - the international situation
The BBC have done some useful research on how other countries deal with parliamentary expenses. It is interesting that it was in Sweden where a cabinet minster lost her job temporarily for buying nappies using the parliamentary credit card.

Sweden, which is a country with a high level of transparency, seems to give a good solution for how to deal with the "second home" issue.

My view as to the principles of the expenses system are as follows.

It is obvious that the current system is indefensible on a number of bases. It was established to give a tax free bung to members of parliament rather than a salary increase. I am not saying that it should be replaced by a salary increase, however.

Firstly, any scheme should be determined by an independent body. That is because of the mess that we are in at the moment.

Secondly, the rules that apply to MPs expenses should be the same principles as apply to anyone else's expenses. A situation which allows a tax free bung for MPs only is not right.

Thirdly, we should concentrate on the issue of what the cost is to the taxpayer.

What the Swedish Parliament does is to have a number of flats for MPs. However, those MPs that live elsewhere get a simple allowance and declare any profits or losses on that allowance to the taxman. This is a lower cost option for the tax payer than maintaining a flat. It also maintains the same principles as would apply to anyone else in the same situation who was not an elected official.

When lives in a property they own there are taxation issues, maintenance and utility issues and a cost of capital issue. Those are best handled by simply paying a sum of money that would be less than were someone to be in a state owned flat. That payment should be treated in the same way from a tax perspective as would be normally expected.

In the mean time the House of Lords pays no salaries and Peers get by on "expenses" alone. Some day this must be sorted out as well.
 
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