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Friday, 29 February 2008

29 February 2008

Why on earth, you may wonder, do some MPs think they’re entitled to claim thousands of pounds of our money as expenses without submitting any receipts? Well, perhaps it’s because they reckon there’s an unwritten agreement that they can bump up their salaries (currently £61,280 pa), which many of them regard as ridiculously inadequate, by claiming a bit extra on expenses.

(There’s a story, in fact, that back in the days of Harold Wilson, his Chief Whip, Bob Mellish, told Labour MPs something to the effect: “Look lads, don't push for a big pay rise. Load as much as you can on your expenses.”)

Here’s what MPs are told in the “Green Book” that they’re given when they enter the House of Commons: “It is your responsibility to satisfy yourself when you submit a claim, or authorise payments from your staffing allowance, that any expenditure claimed from the allowances has been wholly, exclusively and necessarily incurred for the purpose of performing your Parliamentary duties.”

As for their housing allowance, in answer to the question “What can I claim?” the rules say: “Only those additional costs wholly, exclusively and necessarily incurred to enable you to stay overnight away from your only or main UK residence, either in London or in the constituency … We require receipts for items of expenditure of £250 or more (except for food), and for all hotel bills. If you are claiming rental or mortgage interest we ask for a copy of your rental agreement or your latest mortgage interest statement.”

In other words, under the current rules, anything they claim up to £250 doesn’t need a receipt, nor does anything they claim for food. I have no evidence that this arrangement is abused, but it wouldn’t entirely surprise me if, sometimes, something slips through that strictly speaking shouldn’t.

I do not intend to go into the detail of some of the recent allegations that have been made about certain MPs. There are various inquiries, reviews and what-have-yous under way which, in due course, maybe, will resolve some of the issues that have been in the headlines over the past few weeks. My hunch is that the current “we’re-all-honourable-gentlemen” arrangements are about to come to a shuddering halt.

An information appeal tribunal ruled this week that MPs should disclose in detail what they buy with the money they claim under the so-called additional costs allowance: how much goes on heating, how much on phone bills and so on. One Labour MP called the decision “absurd and ridiculous”. “It will end,” he said, “with people writing about how much MPs are paying for a pint of milk.”

All of which contrasts rather neatly with the way they do things in the US. Suppose you have a burning desire to know how much Hillary Clinton’s campaign team have been spending on refreshments. No problem: the New York Times election blog reported this week (after what it called “an hour-long investigation”) that they handed over $1,884.83 at Dunkin’ Donuts in New Hampshire, Florida and Virginia, and another $505.02 at Krispy Kremes in South Carolina.

I can also reveal (and you’ll wonder how you’ve managed to get along without this information) that the Republican front-runner John McCain spent $923.70 to Mitt Romney’s $992.91 at Dunkin’ Donuts, but also forked out another $116.79 on Krispy Kremes in Reno, Nevada. (Barack Obama’s bakeries bill comes in at $1,877.28 – so what I want to know is, how come he’s so slim?)

The point is, perhaps, that the machinery of politics does not necessarily seize up if we know what politicians are spending. I am perfectly happy to accept that, by and large, they’re as honest a bunch as the rest of us. But I’m not sure it would matter all that much if MPs did have to tell us how much they spent on milk each week, if they used our money to buy it. Boring, yes. Absurd and ridiculous? Quite possibly. But not necessarily an outrageous imposition on the people we employ to run the country.

After all, I imagine you have to tell your employers in some detail what you spend their money on. I know I do.

Friday, 15 February 2008

15 February 2008

My text this week comes from Robert Chote, the director of the highly respected and impeccably neutral Institute for Fiscal Studies. He was quoted a couple of days ago in the Financial Times as follows: “A weak chancellor, an interfering Prime Minister, a self-interested business lobby and an opportunistic opposition is not a combination designed to deliver good tax reform.”

Harsh? Maybe – but after the headlines this week over tax arrangements for the “non-doms” (does anyone actually know someone who is a non-dom?), which themselves followed similar headlines over a change to the government’s proposals over Capital Gains Tax, you may think that Mr Chote is not being entirely unfair.

So let’s take his list of culprits one by one and try to unpick what’s going on here. (Non-doms, by the way, are foreigners who live in the UK, but who keep the bulk of their wealth outside the UK, and who are allowed to escape paying tax on it, save for those bits that are either earned here or are sent here. There are, apparently, more than 100,000 of them, mostly working in banking, insurance and shipping. They’re called non-doms because the Inland Revenue classifies them as “non-domiciled residents for tax purposes”. )

First, the weak chancellor: well, no one thought it’d be easy running the Treasury while Gordon Brown was Prime Minister. But Alistair Darling, who is one of those rare politicians whose ambition has traditionally been to keep as low a profile as possible, has had more than his fair share of bad luck. And whereas until he took up his current job, he had a reputation at Westminster as a safe pair of hands, he’s now beginning to look like a serial fumbler.

An interfering Prime Minister? The word is that Mr Brown has been taking a very close interest in his successor’s handling of the Treasury brief – no surprise there, then – and let’s not forget that both the capital gains tax and the non-doms proposals were born in the febrile snap-election hysteria of last autumn. Not the best atmosphere, I’d suggest, for drawing up complex tax reform plans.

Next, we come to that self-interested business lobby. M’lud, I call in evidence Digby Jones, currently employed as a trade minister but in a former existence the director of the employers’ organisation the CBI. He broke ranks with his colleagues last week to warn that their proposals on taxing non-doms risked chasing away skilled foreign workers and threatened London’s status as a world financial centre.

Well, maybe, and there again, maybe not. But clearly there was a powerful campaign under way, and on Tuesday, with as much grace as he could muster, Mr Darling (or rather his colleague Yvette Cooper) unveiled some “clarifications”. The proposal to make non-doms pay £30,000 a year in order to retain their preferential status remains in place, but other ideas, like making them declare everything they own, wherever it is, have gone. The Treasury people insist they never meant that to be in the plan anyway; the suggestion is that some over-enthusiastic nosey parkers at the Inland Revenue slipped it in when they thought no one was looking.

Finally, an opportunistic opposition. Fraser Nelson of The Spectator put it this way: “If there is an award for a brass neck of 2008, George Osborne has just done enough to win it. First, he proposes a tax on the non-doms … then Darling nicks it in his infamous magpie budget ... Today Osborne has written an “open letter” to Darling asking him to repeal [it].”

It’s been half term at Westminster this week, so there’s been plenty of opportunity for the opposition and the political correspondents to play Let’s-Get-Darling. I suspect, though, that like many chancellors before him, he’s playing a rather useful role as lightning conductor to protect the PM. He’s got a budget to announce next month, and I predict it’ll be greeted with jeers and scorn, whatever it contains. As Gordon Brown himself used to observe: there are only two kinds of chancellor – those who fail, and those who get out in time.

Friday, 8 February 2008

8 February 2008

I get some lovely emails sometimes. Like this one, which arrived a couple of days ago while I was in Chicago.

“Why are you covering the US primaries in such detail?” it asked. “They are just not relevant to a UK audience. Why do we care? I have just had to turn off The World Tonight because I simply couldn't take any more of it. It was either that or die of boredom.”

Well, excuse me. Not relevant? Why do we care? Maybe because it matters who runs the most powerful country in the world. Because we really need to understand who the next US president will be, and how he or she got to the White House. Because to understand the US, we need to understand what US voters think, about their country and the world.

Not relevant if for the first time in the country’s history the US president is a woman? Or a black man? Does anyone really not care about the politics of the country that exerts greater military and economic influence than any other power on earth?

Sorry, but to me it seems obvious. Nor do I accept the criticism that we “only” cover US elections. You may recall that I wrote about the Serbian elections last week – and Ray Furlong was in Belgrade to report on the outcome. Next month, I’ll be in Madrid to report on the Spanish elections. I reckon that I must have reported on elections in more than a dozen different countries over the past few years, from Iran to Zimbabwe, Israel to Russia.

So now I’m writing this on the plane back to London, after Super Tuesday primaries which told us quite a lot about American voters, and about the leading candidates, but which still didn’t give us a definitive answer on who the Democratic party candidate will be in November.

Mind you, as I wrote in my blog last Monday (before the Super Tuesday primaries and before his rival Mitt Romney “suspended” his campaign), John McCain is now certain to be the Republican party candidate. He’s a former Vietnam prisoner of war, tough on security, more moderate on social and economic issues. He voted against President Bush on tax cuts, and co-sponsored a proposal with arch-liberal Edward Kennedy on granting an amnesty to illegal immigrants. He is deeply distrusted by the conservative wing of his party, who call him a RINO (Republican In Name Only). Some even say they’d rather see Hillary Clinton in the White House than Senator McCain.

As for Mrs Clinton and Barack Obama, it’s neck and neck. She does better among women, the less well-off and older and Hispanic voters; he does better among the young, the educated, the better-off, and black voters. He seems to have the greater momentum and more campaign cash; but she has a formidable campaign team and either of them could still emerge as the eventual nominee.

As for what will happen in November, I’m now prepared to stick my neck out: I think the Democrats will win. It’s a little remarked upon fact that Senator McCain won most of his victories on Tuesday in states (six out of nine) where in the last three presidential elections, the Democrats have won. So they may have helped him win the nomination, but they probably won’t help him win the White House.

If I’m right, that means the next US president will be either a woman, or black. I reckon that’s pretty interesting. So is this: David Frum, a leading conservative commentator and former speech writer for George Bush, wrote in the Financial Times yesterday: “The conservative ascendancy in American politics is coming to an end … the stage has been set for the boldest and most dramatic redirection of US politics since (Ronald) Reagan’s first year in office.”

Relevant? I think so …