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July 30, 2004

MEPs' Expenses

Posted by Michael Mosbacher

How to Maximise Your Expenses:
Advice to new Members of the European Parliament

The Social Affairs Unit is publishing on Monday a helpful guide for those Members newly elected to the European Parliament on June 10th: How to Maximise Your Expenses: Advice to New Members of the European Parliament.

The guide records the four tax-free streams of income available to MEPs as 'expenses' in addition to their salaries in the UK case of 56,000.

Firstly there is the travel allowance. Unlike what one might expect, this does not actually reimburse MEPs for the cost of their travel. MEPs merely have to hand in their boarding passes and a sum is paid according to kilometerage. In nearly all cases this amount is in excess of a full Business Class fare.

Then there is the attendance allowance of 262 (180), widely known as the 'sign-on and sod-off' fee. In order to claim this it is merely necessary to sign on before 10am on any or all of the 155 days on which the European Parliament sits; there is no need to speak in a debate or even to stay. An MEP who signs on for every day Parliament is sitting will earn an extra 40,610 (27,900) per year.

Thanks to the staff allowance, of 8,500 per month at current rates of exchange, an MEP can put his or her family on the payroll around 70% of MEPs follow this advice. It is entirely up to the individual member how these choose to spend their staff allowance; no receipts are necessary and there is no audit.

Finally there is the general expenses allowance. This is meant to cover office expenses and the like. It amounts to 2,540 a month and again is not subject to audit. MEPs may, if they wish, have this paid directly into their bank account.

Such a generous interpretation of 'expenses' may go somewhere towards explaining why it costs over a million pounds to send an MEP to Brussels more than two and a half times the cost of sending a British MP to Westminster.


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How hilarious. I wonder if any of you light hearted champions of fair play have ever thought of doing the same for Westminster where abuses of office expenses, London weighting and the like are far more widespread, result in more investigations and have gone on for much longer?
Or would that somehow be disrespectful of the Mother of all Parliaments??

Posted by: david at August 4, 2004 02:06 PM
•••

Dear Sirs,

I was delighted to see that you chose to publish my article "How to Maximise
Your Expenses: Advice to new Members of the European Parliament" on your
website at http://socialaffairsunit.org.uk/digipub/content/view/15/27/

In the interests of equality and fairness, I thought you might be interested
to know that I based this article on one during my years as a Westminster MP
before I was promoted to the heady heights of the European Parliament. That
original article was entitled "How to Maximise Your Expenses: Advice to new
Members of the House of Commons". You will note that the themes throughout
the article are somewhat similar to my later MEP version.

I thought you may be interested to read this article, so I have attached it
for your perusal. Of course I would not flatter myself to imagine that it
may be suitable for publishing. It is, after all, virtually identical to the
later version you have already published, except that it panders rather less
to the current tabloid agenda which your organisation so assiduously
shadows.

Assuring you of my most sincere service at all times,
I remain, Sirs,
Your most humble and obedient servant,

Hon. Tristan Smithers-Johnson, MEP (MP)

How to Maximise Your Expenses: Advice to new Members of the House of Commons

Welcome to London! Fewer people voted in the general election than in any
other for more than half a century, so not exactly a great victory for
national democracy. Nevertheless, you have achieved a great personal
victory. Never mind that yours was just a name put up by a party and
ninety nine per cent of your supporters voted for you on that basis, not
because of who you are. The fact is that you have been given the
opportunity to play a part in completing the great national Project and to
live in a style commensurate with the high importance of your work.

In this connection, it is worth explaining a vital and central aspect of the
life of a parliamentarian: the system for paying expenses. It is important
this is clearly grasped not just in your own interests but in those of the
other MPs - with whom cordial relations must be established if your
parliamentary career is to blossom. Politics are not always adversarial,
even at Westminster. Forming relations with Parliamentary colleagues with
common interests is what being an MP is all about, and there is no doubt we
have a shared interest in preserving the present system of MPs' expenses.

Hence this explanatory note. The first thing to understand about the system
for payment of Members' expenses is that it may differ from any system that
you may have known in the past; expectations will have to be revised
accordingly. This is because in other walks of life (except large
businesses, of course) 'expenses' refers to the reimbursement of sums spent
in the course of one's work. In the case of the House of Commons, however,
the situation is quite different: 'expenses' refers to a remarkable stream
of largely non-taxable income, well, actually to several streams. Payments
may even have little relationship with what has been spent. MPs have fought
courageously to preserve this system against a barrage of misplaced
criticism; it is part of our heritage and it is incumbent upon new members
to defend it.

Perhaps the least understood aspect of that heritage is the travel
allowance. Fortunately, tabloid newspapers have frequently attacked the
European Parliament on such matters, keeping the public angry with them
rather than us! The great merit of the travel allowance is that it allows
car travel to be claimed, not on the basis of actual fares, but on a flat
rate mileage well in excess of actual costs (over 51p per mile for the first
20,000 miles and 23p thereafter in 2002 - presumably even more now!). Travel
within your constituency can also be claimed on this basis (unlike those
unfortunate Euro-MPs with their huge regional constituencies), so it is
easy to throw in some extra miles additional to the distance from London -
and who is to know how many kilometres you have done? No receipt is
required and the money rolls in without a fib being told or any kind of
effort, criminal or otherwise, on your part. It is true that there have
been one or two regrettable instances where MPs have invented far flung
addresses in order to bump up their claims: it cannot be stressed too
strongly that this kind of behaviour threatens to kill the goose that lays
the golden egg.

You should also be warned against allowing a sudden fit of morality to lead
you to try to demand a sum equivalent to that which you have actually spent.
This will not only play badly with colleagues; an official will politely
explain that no machinery exists to pay honest expenses (while privately
entertaining doubts about your sanity).

In its own way the London living allowance of just over 20,000 - widely
known as the 'sign-on and sod-off' fee - is just as remarkable. Unlike the
European Parliament, where it is necessary to sign on every single day
attended and only those days are reimbursed, the House of Commons grants
this allowance irrespective of actual attendance. And there is no need to
speak in a debate or even to do anything very much. There is, of course,
nothing to stop you from pursuing business or professional interests, or
heading for the nearest swimming pool in order to work up an appetite for
the top class lunch you can expect a few hours later.

Remember: it costs, per taxpayer, far more to maintain the House of Commons
than it does the European Parliament, so it is important that you should
deport yourself in a style commensurate with the sacrifice made by the
taxpayer.

In theory, this attendance allowance is paid to cover accommodation in
London. In reality, most MPs have wisely bought flats, most of which shoot
up in value during the term of office. Some are even sub-let to research
assistants who hand back part of the income they receive from the Member's
staff allowance (see below) as rent. As for meals there is no reason to
spend a penny of your allowance or your 56,000 salary. To eat well simply
flag down a passing lobbyist who will be delighted to take you to breakfast,
lunch or dinner. (Some friendly advice here: until you get into the swing of
things you may find a working breakfast too much to take after the working
dinner the previous evening and the working lunch and reception that you
enjoyed earlier in the day). London is the home to many thousands of
lobbyists and the number is still growing. Since there are usually more
lobbyists wanting to dine an MP than there are MPs wanting to be dined, you
can expect to eat out a first class restaurant every night.

Spouses frequently complain that politics is a career which is unkind to
families. Not so in the case of the House of Commons. Indeed, thanks to
the extremely generous staff allowance (about 75,000 a year plus pension
contributions and various other extras) you can put the family on the
payroll. A significant percentage of MPs - even a recent leader of the
opposition - demonstrate their commitment to the family by employing a wife,
husband or other member of their family as secretary or assistant, which, of
course, leaves plenty of money left over to employ a researcher and still
provide a handsome surplus. Some foreigners find this strange 'What is it
about you English? You employ your wives, and you sleep with your staff'.
The important thing to remember about the staff allowance is that it is
entirely up to you how you spend it in terms of who you employ, at what rate
and what they are expected to do. Of course, as in any Parliament,
contracts, social security coverage, etc must be handed in to prove that you
are in order technically.

No insurmountable restrictions exist either in the case of the office
allowance. This is meant to cover office expenses and the like. It amounts
to nearly 2,000 a month - plus free postage and computer equipment. There
are also some less well known allowances (that do not exist in other
Parliaments, such as the European Parliament). For instance, you can claim
a return fare for your spouse or children should they wish to go shopping
in London - up to 30 times a year. Maybe you will want them to do that
while you are taking advantage of the three free trips a year you are
allowed to make to any European capital: Athens during the Olympics or
indeed any southern capital in the summer (or Vienna during the skiing
season) spring to mind. Many members may prefer other activities in, say,
Amsterdam.

How much profit can one make out of all of this? Well, this may certainly
exceed your formal income. Estimates range as high as 300,000 per annum,
surely an exaggeration, but naturally it is not the kind of thing that you
expect me to be precise about. Should you be weak enough to accept the case
for 'transparency' or 'reform' expect trouble.

Yours sincerely,

Tristan Smithers-Johnson MP


Tristan Smithers-Johnson MP does not, of course, exist. He is a literary
fiction initially brought into being in order to give an exaggerated and
inaccurate description of the expense arrangements of MEPs.

This version of How to Maximise Your Expenses is based on his description of
the European Parliament, changing only the figures and terminology so that
they give a reasonably accurate description of the situation in the House of
Commons.

Posted by: Tristan Smithers-Johnson at August 31, 2004 04:14 PM
•••
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