The Operation of the Parliamentary Standards Act 2009 - Committee on Members' Expenses Contents


Part 2. Background


4. History of payments to MPs

14. The history of payments to MPs can be divided into four periods:

  • Before 1911, when there were neither salaries nor allowances.
  • From 1911 to 1971, when the payment was intended both as salary and expenses.
  • From 1971 to 2010, when salary and expenses were separate.
  • From 2010 to date, when the expenses system (and later MPs' pay) came under the control of an independent body rather than being self-regulated by the House.

15. We note that for tax and other purposes MPs are classified as office-holders, by virtue of holding a "position which has an existence independent of the person who holds it and may be filled by successive holders".[21]

BEFORE 1911

16. MPs were not officially paid until 1911. From the 13th century shires and boroughs sometimes paid their MPs and met some of the expenses of sending them to Westminster. This practice ceased by the end of the 17th century. Thereafter MPs required personal wealth or a wealthy sponsor to sustain a career in Parliament; as Samuel Pepys recorded: "At dinner ... all concluded that the bane of the Parliament hath been the leaving off of the old custom of the places allowing wages to those that served them in Parliament, by which they chose men that understood their business and would attend it, and they could expect an account from, which now they cannot." In 1780, a committee chaired by Charles James Fox recommended the introduction of a government payment to MPs. The 1830 Reform Bill and the People's Charter of 1838 also proposed the introduction of a payment. Motions or Bills proposing a payment to MPs were introduced in the House of Commons unsuccessfully in 1870, 1888, 1892, 1893, 1895 and 1903.[22]

1911-1971

17. The rise of the Labour Party increased demands for the introduction of a payment to MPs. In 1909, financial support from trade unions to Labour MPs was successfully challenged in the courts (the Osborne judgment). This led directly to the introduction of a payment of £400 to each MP (except Ministers) in 1911.[23]

18. Lloyd George, then Chancellor of the Exchequer, stated in debate that the £400 was "not a remuneration, it is not a recompense; it is not even a salary. It is just an allowance, and I think the minimum allowance, to enable men to come here, men who would render incalculable service to the State and whom it is an incalculable loss to the State not to have here, but who cannot be here because their means do not allow it." He added that "The only principle of payment in the public service is that you should make an allowance to a man to enable him to maintain himself comfortably and honourably, but not luxuriously, during the time he is rendering the service to the State."[24] However, the motion passed by the House referred to the £400 as a salary. In fact it combined salary and allowance, and the Inland Revenue (from 1912) treated it as such, with a quarter of the amount regarded as an allowance to meet expenses and free of tax.[25]

19. The introduction of the payment was controversial. Some MPs argued that it would result in a new and undesirable class of professional politician. The Government's view was that MPs' costs had grown with the increase in workload, and that membership of the House should be made more representative of the nation as a whole by allowing those without independent means to serve.[26]

20. Themes of the next 60 years included the following:

  • Reluctance by governments to increase the sum. The £400 of 1911 remained unchanged until 1937, from which date it rose at irregular intervals. There were only ad hoc reviews until 1971.
  • Uncertainty about how much of the sum was salary as opposed to an allowance to cover expenses, reflected in changes in Inland Revenue rules. The categories of expenses allowed by the Inland Revenue foreshadowed the later range of allowances.
  • A reluctance to link the level of the salary to any other occupation.
  • Few separate allowances and little other provision, the earliest being free stationery in 1911, free rail travel in 1924 and support for office accommodation in 1950. A secretarial allowance was not introduced until 1969.[27]

21. Reviews during the period took place as follows:

  • 1920. Increases in the cost of living following the First World War led to the appointment in November 1920 of a select committee "to consider the salary allotted to Members of this House, the travelling and other expenses incurred by them in connection with their parliamentary duties". The committee concluded that, although the £400 payment was inadequate, a pay increase could not be recommended due to the state of the national economy. Shortly afterwards the Government proposed that the whole £400 payment be treated as exempt from tax, but there was public opposition and the House rejected the proposal on 1 June 1921.[28] After 1921 the cost of living began to fall.
  • 1937. The Prime Minister, Stanley Baldwin, conducted informal soundings with MPs and then announced his Government's intention to increase the £400 payment to £600. The House agreed this on 22 June 1937. Baldwin's successor, Neville Chamberlain, put the case for the increase as follows: "It is obvious that the circumstances are different in the case of almost every individual Member. On the one hand, one does not want to fix the salary so high that it becomes an inducement to people to enter this House for the purpose of earning more than they would earn outside and, on the other hand, we do not want to fix it so low that men or women who could give valuable service to the House should be prevented from doing so merely by the fact that they have not sufficient means to afford it."[29]
  • 1945-6. Increases in the cost of living resulted in 1945 in the appointment of a select committee "to consider the expenses incurred in connection with their parliamentary and official duties by Members of this House". The committee recommended in 1946 an increase in the payment to £1,000, of which £500 should be a tax-free, flat-rate expense allowance. With parliamentary and public opinion opposed to a flat-rate allowance, the Government instead proposed an increase in salary to £1,000 without any change in tax relief. A resolution to that effect was passed on 29 May 1946.[30]
  • 1953-54. Living costs continued to rise, and a select committee was appointed in November 1953 to consider and report on "the nature and extent of the expenditure incurred by Members of this House in the performance of their duties". The committee concluded that the £1,000 payment was too low to allow MPs without independent means to perform adequately their parliamentary duties, and recommended that the salary be increased to £1,500 and the £100 tax-free element (dating from 1912) be discontinued. It rejected the introduction of additional free services and tax concessions in favour of a straightforward increase in salary.[31] The Government was unwilling to agree the increased salary, due to its policy of restraint in public sector salaries, and instead introduced in July 1954 an allowance of £2 for every day that the House sat (except Fridays). The Prime Minister described it as "a cash reimbursement, related to the actual sittings at Westminster, of the subsistence and other expenditure which Members are obliged to incur."[32] It replaced the £100 tax-free element, though, as before, MPs could deduct expenses from income for tax purposes.
  • 1957. In July 1957 the House agreed a government proposal that the £1,000 salary should remain unchanged, but the £2 daily allowance should be replaced by a payment of £750 in respect of expenses, which would be " a straightforward addition to salary" (and taxable).[33]
  • 1964. The Lawrence Committee, which reported in 1964, undertook the first external review of MPs' pay.

22. The Lawrence Committee considered but rejected as impractical the possibility of varying the remuneration of individual MPs according to their circumstances. Instead it recommended that all MPs should receive the same salary, which should "enable those Members who are without private means or the opportunity to earn income outside the House efficiently to discharge the duties of the service without undue financial worry and to live and maintain themselves and their families at a modest but honourable level." An increase from £1,750 to £3,250 a year was recommended, of which £1,250 was assumed to cover expenses.[34]

23. The Committee also rejected any linkage between the salaries of MPs and civil servants; did not recommend any separation of salary and expenses; and recommended a contributory pension scheme.[35] A contributory pension scheme was introduced with effect from October 1964.

1971-2010

24. Rising inflation resulted in MPs' salaries and expenses being referred to a new pay review body, the Top Salaries Review Body, in 1970. In 1971 the Body inaugurated a new era by recommending a clear separation of salary and expenses, regular reviews of salary and the creation of a system of allowances. Its view was that "in future, a clear separation should be observed between salary, on the one hand, and provision for expenses on the other. ... it should not normally be the responsibility of the individual Member to finance the facilities he needs to do his job."[36] Thereafter there were four main allowances: car allowance, secretarial allowance, additional costs allowance (for the cost of working away from home, introduced as an annual payment of up to £750) and London supplement (for MPs not entitled to additional costs allowance).

25. Themes in this period included:

  • Continuing reluctance of Governments to raise MPs' salaries, and much greater willingness to increase allowances.
  • MPs' increasing workloads.
  • Growth in the range, scale and complexity of payments to cover expenses, with increasing scope for abuse.
  • Eventually, increasing disquiet about the potential for abuse of the expenses system.

26. Important developments in the payments system included the following:

  • Additional costs allowance, meeting the extra cost of living and working in two separate places, began in 1971 as a payment reimbursing expenses of up to £750 a year, instead of the daily subsistence rate recommended by the Review Body. Notable changes were allowing it to be used to meet the cost of mortgage interest in 1985 and a large increase in 2001 (resulting from a backbench amendment rather than an external recommendation) from £13,322 to £19,469.
  • The secretarial allowance (one full-time secretary per MP in 1969) developed by 2007 into a budget sufficient to employ up to 3.5 full-time staff.
  • From 1977 part of the staffing budget could be used for office equipment, and funding for the cost of running an office became a separate budget in 2001.
  • A Communications Allowance, "to assist in the work of communicating with the public on parliamentary business", was introduced in 2007.[37]

27. An important part of the background to these developments was change in MPs and their work. As the workload increased (Annex 2) it became less credible to argue that an MP's work was not full-time. The growth in constituency work was particularly important, and a home in or near the constituency or at least a constituency office became more necessary. The Members Estimate Committee in 2008 summed up the growing workload as follows: "first, scrutiny of the executive has been significantly enhanced through the advent of select committees; second, demands from the public for direct help with problems have increased; and thirdly, legislation is more complex with three elements¯primary, secondary and European. This has been coupled with a rising expectation from the public for open reporting, transparency and a professional approach to the business of representative democracy."[38] One measure of the increasing workload was the dramatic increase in the quantity of mail received: from an average of 12 to 15 letters per MP per week in the 1950s and 1960s to an average of more than 300, plus emails, faxes and phone calls by 2007.[39] Other figures indicate an increase in the total number of letters coming into the Commons from 10,000 a week in 1964 to 40,000 in 1997 and 74,000 in 2006, the peak year.[40]

28. It has often been stated that allowances were increased as an alternative to the much more controversial raising of salaries. At least once, in May 1974, a Minister explicitly referred to a strategy of holding down the salary while increasing allowances.[41] Several MPs and former MPs have suggested that they were encouraged by party whips to make up for deficiencies in salary by claiming as much as possible as allowances. For example, the former MP Mike Thomas stated that, in 1976, following an acrimonious meeting about pay with the Leader of the House, Michael Foot, word came back from the whips that "it was 'untimely' to increase salaries significantly but a new range of allowances would be put in place and nobody would ask too many questions about claims for them. This was done and there was no public outcry."[42]

29. None of this meant that the allowances could be claimed regardless of whether the costs were incurred. Rules and principles existed, even though the requirement for evidence and the checking of claims were lax. On the other hand it was certainly the case that the additional costs allowance covered some expenditure which would otherwise have been paid out of salaries, such as white goods, home furnishings and home improvements. Matthew Parris described it to us as "a sort of curious hybrid, half-way between a proper expenses system and an allowances system".[43] Thus the separation of salary and expenses envisaged in 1971 was muddied, eventually with disastrous results in 2009.

30. MPs' pay increased, but fell behind the increase in average earnings, even if accommodation expenses are included, as shown in Chart 1. Indeed Chart 1 emphasises the extent to which increasing accommodation expenses were a substitute for higher salaries. At the same time the MP's workload increased significantly, as shown in Annex 2. From 1988 there was a link with civil service pay, combined with periodic reviews. From 2008 pay was automatically uprated annually in line with that of 15 groups of public sector workers. The SSRB stated in 2007 its view that pay "should be neither so low as to deter suitable candidates, nor so high as to be the primary attraction of the job".[44]

Growth in MPs' actual pay 1911-2010 (plus accommodation expenses from 1971), compared to MPs' 1911 pay uprated in line with the growth of average nominal earnings

Source: Earnings index from www.measuringworth.com

THE EXPENSES SCANDAL

31. The major review of the expenses system by the Members Estimate Committee in 2008 was prompted by a case of misuse of the staffing allowance, together with increasing concern about the system in general.[45] There was also a growing likelihood that the House would be required to publish detailed information on expenses under the Freedom of Information Act. The Committee produced detailed proposals for reform, but most of them were rejected by the House in July 2008.[46] Some changes were made in early 2009, including the requirement for receipts for all claims and full-scope audit (i.e. looking beyond the MP's signature) by the NAO. From April to November 2009 MPs' expenses and allowances were investigated by the Committee on Standards in Public Life, which produced a thorough and wide-ranging report.

32. Preparations for the publication of claims and receipts following decisions by the Information Tribunal and the High Court under the Freedom of Information Act resulted in the leaking of the entire body of material, much of which was then published in the Daily Telegraph in May-June 2009. This revealed a system which could not be defended, and had two main consequences for the system itself:

  • An immediate reduction in May 2009 in the scope of what could be claimed under the additional costs allowance,[47] together with many other changes, such as a freeze on second-home designations (subject to appeal) in order to prevent "flipping".[48] These measures remedied the most abused aspects of the old system, and were combined with greatly increased transparency, especially from the House's second expenses publication, and much improved arrangements for audit and assurance. When 23% of MPs responding to the NAO's survey disagreed that the old expenses system had required major change, most if not all were referring to the reformed system of 2009, as many made explicit in their replies.[49]
  • The proposal for an independent body responsible for all aspects of payments to MPs.

THE ESTABLISHMENT OF IPSA

33. On 20 May 2009, the then Leader of the House, Harriet Harman, announced that there was cross-party agreement on the need to move from the discredited system of self-regulation to "independent external regulation", ending "the gentlemen's club approach". Alan Duncan, then Shadow Leader of the House, agreed that, if the House was not to "sink further in the eyes of the voters [MPs had to] relinquish the right to determine how we reward ourselves". David Heath, for the Liberal Democrats, added that the House had "forfeited the right to self-regulation".[50]

34. The then Prime Minister, Gordon Brown, announced on 10 June 2009 his plans for the new independent body to take responsibility for Members' allowances. He declared that the House had "let the country down" in its management of MPs' allowances and that MPs now had a "collective duty to clear up [the] House in the interests of democracy". He added that "Each of us has a part to play in the hard task of regaining the country's trust ... Without that trust, there can be no legitimacy."[51] David Cameron, then Leader of the Opposition, supported the establishment of the body, as did Nick Clegg, Leader of the Liberal Democrats.[52]

35. Establishment of the independent body, known as the Independent Parliamentary Standards Authority (IPSA), was provided for in the Parliamentary Standards Act 2009 (referred to here as the 2009 Act), which was itself heavily amended in the Constitutional Reform and Governance Act 2010 (the 2010 Act). The 2009 Act received Royal Assent in July 2009, IPSA was formally established in October 2009, IPSA's Chair and Board members were appointed in December 2009, consultation on the new scheme began in January 2010 and the new scheme came into operation on 7 May 2010.[53]

36. We congratulate the then Prime Minister, party leaders and Parliament on their decision to establish an independent system of payments for MPs' costs. This provided the opportunity to establish a system which not only enabled MPs to fulfil their duties but was also regarded as fair and open by the public. The aims which they intended the new system to achieve were the right ones. However, the new system was devised and implemented in haste, without enough time to examine whether the new structure was likely to achieve those aims in practice. Our intention has therefore been to examine whether the aims are being achieved, and where they are not to propose changes to bring that about.

5. IPSA and the current expenses scheme

37. IPSA was given responsibility not only for devising a new scheme for MPs' allowances or expenses but also for administering it and regulating it. Under the scheme, all claims must be accompanied by evidence, must be certified by the MP as having been incurred because of parliamentary duties and must be submitted within 90 days. Following recent changes, the main elements (closely resembling those provided by the House before 2010) are:

  • Accommodation (up to £19,900 a year in the case of London Area accommodation), covering rental payments and associated bills or hotel costs only, but with transitional provision for existing mortgages until August 2012.
  • London Area Living Payment (£3,760 a year, plus an additional £1,330 in 24 outer London constituencies), a flat-rate sum for London-area MPs, who are not able to claim for accommodation, and for other MPs who choose not to do so.
  • Office costs expenditure (up to £21,500 a year, but £24,000 in the London Area), covering constituency office rent, office equipment and communication costs.
  • Staffing (up to £115,000 a year). Costs such as replacement staff to cover for maternity leave and long-term sick leave are met from a central budget.
  • Travel (uncapped), mainly between the constituency and London or within the constituency, and including some travel by staff and family members.
  • Subsistence (uncapped) in certain circumstances (eg if the House sits beyond 1 am and it would not be reasonable for the MP to return to a residence).
  • Contingency funding.[54]

38. IPSA processed 134,696 separate claim lines between May 2010 and March 2011. Since January, only 0.5% of claims have been rejected, amounting to 0.2% of the sum paid out, and most if not all rejections have been the result of mistakes in claims.[55] The most numerous types of claim from 1 April to 1 October 2011 were for phone bills (6,063), stationery (4,502), interns' expenses (7,181), mileage (19,870), train fares (8,051) and travel by staff members (5,387).[56]

39. Dissatisfaction among MPs has been less about what is covered and the sums available than about the process of claiming, the damage caused by the system to the reputations of individual MPs and to Parliament, as discussed later, and about MPs' time taken away from their constituents and parliamentary duties. Nevertheless, we acknowledge that IPSA was given an extremely challenging task to carry out within an exceptionally short timescale. The fact that it succeeded in setting up a new payments system at all in the time available reflected a great deal of hard work by the staff of IPSA. The Office of Government Commerce stated that "in October 2009, the task looked well nigh impossible ... Eight months later, the impossible has been delivered ... this has been a success story, and deserves to be recognised as such."[57] As the NAO put it, IPSA "began providing services to MPs on time in May 2010; this was a major achievement by the Authority."[58] On the other hand, while in administrative terms the setting up of IPSA and the new scheme on time was a success, policy decisions by IPSA's Board have obstructed the achievement of some of the aims set out in 2009, as discussed in detail later in our report.[59]

40. IPSA has sought to improve the operation of the scheme. Recent changes include:[60]

  • Improvements to the on-line claims system.
  • Greater use of the payment card and direct payments (including new arrangements for train travel), which should result in less bureaucracy, reduced cashflow problems for MPs and less money passing through MPs' bank accounts.
  • A narrower definition of the area around London within which MPs may not claim for accommodation, together with a new higher rate of London Area Living Payment for MPs in the outer part of the London Area.[61]
  • Changing the rules about family accommodation, allowing claims to be made for extra funding for dependent children up to the age of 16, or 18 in full-time education, instead of up to five years as before.[62] The rules on travel by partners have also been modified.
  • Merging of the budgets for office rent and other office costs, together with less prescriptive rules.
  • A wider definition of "extended travel" so MPs can claim for travel outside their constituencies where it concerns a matter before Parliament.
  • A start-up allowance of £6,000 for new MPs.

41. These changes are welcome, but we note that all of them, except the last two, are intended to remedy defects in the scheme which IPSA was warned about in February 2010 by our predecessors on the Committee on Members' Allowances in response to IPSA's original consultation paper.[63]

42. IPSA's "strategic aim is that the Scheme should evolve, so that it becomes:

  • increasingly streamlined and simple to operate both for MPs and IPSA;
  • increasingly based on payments not needing to be made personally by MPs and then reclaimed; and
  • less prescriptive and rule-based, leaving MPs increasing discretion in how money is spent, assuming that the evidence, particularly regarding appropriate levels of assurance, warrants it and that it commends itself to the public."[64]

43. An important purpose of our report is to determine whether the changes made or planned by IPSA are sufficient and to make recommendations accordingly.

THE LONDON AREA LIVING PAYMENT

44. The London Area Living Payment (LALP), a flat-rate supplement added to the salaries of London Area MPs and some other MPs, is of particular interest, in view of IPSA's opposition to flat-rate supplements.[65] IPSA has not only retained the LALP from the pre-2010 scheme but has introduced a new flat-rate supplement for outer London constituencies.

45. The London Supplement (now the LALP) was until 2008 available only to Inner London MPs (who were not eligible to claim accommodation costs) and to Outer London MPs who chose not to claim for accommodation costs. It was reviewed in 2007, by PricewaterhouseCoopers (PwC) for the SSRB. PwC noted that London allowances in general were "paid primarily to reflect the relatively higher cost of living in London", but also sometimes to attract and retain key staff in London, though the latter did not apply to MPs. They added that

we believe greater clarity as to [the] purpose of the London Supplement is desirable. In our view it should not be seen as an amount to cover the additional costs of living and travelling in central London, but should be considered as the amount of additional salary that would normally need to be paid to employees who work in London, paid as a market premium to reflect the additional housing and other living costs in London. The London Supplement should not be regarded as a smaller taxable alternative to the ACA, which is a separate payment to reimburse the costs of staying away from an MP's main home.[66]

46. The SSRB itself did not respond to this invitation to clarify the purpose of the London Supplement.[67] In 2008 the Members Estimate Committee observed that MPs outside London but within commutable distance received no financial support towards their subsistence costs unless they chose to run a second home, which was a perverse incentive, and recommended that any MP not claiming accommodation costs should be eligible to claim the London Supplement.[68] The House made this change. IPSA has continued to pay the London Supplement (renamed LALP) both to MPs not eligible to claim for accommodation costs and to MPs who choose not to do so. Its scheme states that the payment "is intended to contribute towards the additional expenses of living in the London Area or of commuting regularly to the London area".[69]

47. As for the amount, on the basis of a widely varying range of London supplements for 12 groups of public sector professions which "we would consider comparable to that of an MP", PwC recommended £4,000 per annum.[70] The SSRB simply noted that most other public sector employees in comparable roles in London received between £3,000 and £4,000 (though in fact five of the 12 examples were above that range for Inner London and three were ranges extending above £4,000), and recommended £3,500.[71] The SSRB's recommendation was not implemented, but in 2009 the CSPL recommended that the amount should be the SSRB's £3,500 plus uprating, bringing the figure to £3,760.[72] IPSA implemented this recommendation.[73] The current figure is therefore based on a very broadbrush comparison from 2007 with various public sector workers rather than on any objective assessment of the extra costs of living in the London area. For MPs outside the London Area who choose not to claim for accommodation costs and instead receive LALP in recognition of "the additional expenses of ... commuting regularly to the London area",[74] the amount seems to constitute compensation for not claiming accommodation costs rather than to be based on the actual additional expenses. LALP is an addition to salary; as IPSA puts it, "You don't need to send us any evidence of how you spend it".[75]

48. In 2011, IPSA created an additional London supplement for MPs representing 24 constituencies outside Greater London but inside its own "London Area". The extra £1,330 per year for these MPs in addition to the £3,760 represents the average cost of a return rail ticket at peak time multiplied by four days a week for 30 weeks a year, plus allowance for 40% tax.[76] As IPSA does not pay commuting costs, this seems to be an attempt to place all London Area MPs on a reasonably equal footing.

49. We note that neither the long-established London Area Living Payment nor the more recent Outer London supplement have attracted criticism.

6. International and UK comparisons

50. Michael Rush and Philip Giddings of the Universities of Exeter and Reading warned us that comparisons with other legislatures are complicated by variations in their constitutional position and institutional arrangements. Such variations include those between federal and unitary systems, between bicameral and single-chamber legislatures and between countries of different size (to which we would add variation in population served and in number of sitting days a year): "Failure to take account of such differences can result in facile comparisons being made".[77] Nevertheless, they acknowledge that data from other states can be useful in comparing the support provided. We have largely confined ourselves in this respect to taking advantage of the NAO's valuable work on other legislatures and examining the expenses systems operating closest to home, in the Scottish Parliament and the National Assembly for Wales.

51. The NAO identified two broad categories of expenses systems. One model, similar to that at Westminster and operating in the devolved legislatures and Australia, Canada and New Zealand, relies on detailed rules governing permitted expenditure; within those rules, individuals can operate with a high degree of independence. The second model, in operation in Norway, Sweden, the United States and the European Parliament, has less detailed rules and involves greater use of allowances or block grants, sometimes with no requirement to provide receipts; responsibility for some types of expenditure, including accommodation in some cases, is held centrally. The NAO found that IPSA was "unique in being the only independent regulator which also has responsibility for processing and validating claims. Even when a scheme's rules are now determined independently, as is the case in Northern Ireland and Wales, their administration remains the responsibility of parliamentary staff".[78]

52. Michael Rush and Philip Giddings observed that in the comparable countries they studied, only France had a tax-free element in MPs' salaries to cover expenses, though it had a range of allowances in addition.[79] The CSPL cited the example of the Bundestag, which believes that "A lump-sum allowance for all Members based on average expenditure is the fairest and cheapest solution, as a system based on submission of receipts would create a huge increase in administrative expenditure for the Bundestag." The CSPL added that "Not all the precedents [for flat-rate allowances] are entirely favourable", referring to the European Parliament.[80]

53. Looking more widely, the NAO identified several characteristics that were common across legislative, public sector and private sector systems. These were that all systems were rule-based, with controls in place to enforce the rules; required supporting evidence to be submitted with claims; were subject to internal and external audit; made use of payment cards to improve value for money (by reducing processing costs); and applied a time limit to claims.[81] The NAO observed that "expenses schemes in both public and private sector employers make overall cost-effectiveness their key aim, and include within this definition the degree to which they enable staff to do their jobs". It had not identified any public or private sector employer which had an independently administered expenses scheme.[82]

54. The Scottish Parliament determines by means of a resolution both the body upon which responsibility for the payment of expenses is conferred and the terms of the scheme. The body to which responsibility has been granted is the Scottish Parliament Corporate Body (SPCB), and the day-to-day administration of expenses is carried out by the Allowances Office in the Scottish Parliament Service. MSPs can make appeals to the SPCB. Details of each claim are published, and disclosure of receipts may be requested.[83]

55. In the National Assembly for Wales, since the 2011 Assembly elections, all aspects of financial support for Assembly Members have been set by the Wales Remuneration Board, which is independent of the Assembly. The Board's remit is to "make decisions on all aspects of financial support for Assembly Members; take account of changing responsibilities in the work of Assembly Members; review the effectiveness and impact of the uprating process; and deal with any 'ad hoc' issues". Previously salaries and allowances were set by the Assembly Commission. The scheme is administered by Assembly staff. Any dispute about an entitlement to a payment may be referred to the Chief Executive and Clerk of the Assembly, and ultimately to the Remuneration Board.[84]


21   Ev 104, para 2 (HMRC). Back

22   House of Commons Information Service, Factsheet M5, Members' pay, pensions and allowances, revised May 2009; available at www.parliament.uk/documents/commons-information-office/fymp/m05.pdf. Back

23   Ev 114. Back

24   Ev 114. Back

25   Ev 114Back

26   Ev 114. Back

27   House of Commons Library, Standard Note, 'Members' pay and allowances-a brief history' (May 2009), SN/PC/05075, pp 8, 9, 11. Back

28   Ev 115-16. Back

29   HC Deb, 22 June 1937, c 1052. Back

30   Ev 116-17. Back

31   Ev 117. Back

32   HC Deb, 8 July 1954, cc 2347-8. Back

33   Ev 118. Back

34   Report of the Committee on the Remuneration of Ministers and Members of Parliament, Cmnd 2516, paras 33-7, 53. Back

35   Ibid, paras 39, 52, 75-6. Back

36   Ev 120. Back

37   House of Commons Library, Standard Note, 'Members' pay and allowances-a brief history' (May 2009), SN/PC/05075. Back

38   Third Report from the Members Estimate Committee, 2007-08, Review of allowances, HC 578 (hereafter: MEC), para 7. Back

39   First Report from the Select Committee on Modernisation of the House of Commons, 2006-07, Revitalising the Chamber: the role of the backbench Member, HC 337, para 15. Back

40   Oonagh Gay, 'MPs go back to their constituencies', Political Quarterly, vol 76 (2005), p 58; information from the House of Commons Library. Back

41   Ev 121. Back

42   Michael Rush and Philip Giddings, "Worlds apart: explaining the MPs' expenses scandal", paper presented to the Ninth Workshop of Parliamentary Scholars and Parliamentarians, 24-5 July 2010, Wroxton College, Banbury, pp 9-10. Back

43   Q 88. Back

44   Cm 7270-1, summary para 4. Back

45   MEC, paras 3-4. Back

46   House of Commons Journal, 2007-08, 3 July 2008. Back

47   By then renamed Personal Additional Accommodation Expenditure (PAAE). Back

48   HC Deb, 19 May 2009, c 1421. Back

49   The NAO's question referred to "The system for reimbursing MPs' expenses that was in place before the last General Election". Back

50   HC Deb, 20 May 2009, cc 1505, 1507, 1509. Back

51   HC Deb, 10 June 2009, cc 795, 809. Back

52   HC Deb, 10 June 2009, cc 799, 802. Back

53   NAO, p 13. Back

54   IPSA, The MPs' expenses scheme: third edition (May 2011), HC 954, 2010-12 (hereafter: IPSA Scheme). Back

55   NAO, paras 3, 10, 2.3; PAC, QQ 48, 51. Back

56   IPSA, Annual review of the MPs' scheme of expenses and costs: consultation (November 2011), pp 33-4. Back

57   Ev 76, para 43. Back

58   NAO, para 6. See also ibid, para 1.7. Back

59   See para 176 below. Back

60   Ev 74, para 22; Ev 75, paras 32-3; Ev 77, paras 49-50; IPSA, note on 'Changes to the MPs' expenses scheme' (April 2011). Back

61   The latter implements a CSPL recommendation: see CSPL, para 5.79. Back

62   Provision for dependent children up to 21 in full-time education if the MP is the sole carer remains as before. Back

63   Response by the Committee on Members' Allowances, House of Commons, to IPSA's consultation paper on MPs' expenses (February 2010) (hereafter: MAC), paras 31-2, 37, 71, 65-6, 102, 129. Back

64   IPSA, Corporate Plan 2011-2015, p 4, para 13. Back

65   Q43; IPSA, Annual review of the MPs' scheme of expenses and costs: consultation (November 2011), para 95. Back

66   Review Body on Senior Salaries, Report No. 64, Review of parliamentary pay, pensions and allowances 2007, Cm 7270-2, pp 31-2, para 4.18. Back

67   Cm 7270-I, paras 5.58-5.59. Back

68   MEC, paras 226, 234. Back

69   IPSA Scheme, para 5.1. Back

70   Cm 7270-2, pp 30-2. Back

71   Cm 7270-1, para 5.59. Back

72   CSPL, para 5.76 and Recommendation 8. Back

73   IPSA, The MPs' expenses scheme (March 2010), HC 501 (2009-10), para 6.3. Back

74   Para 46 above. Back

75   IPSA, Frequently asked questions (25 March 2011), p 19. Back

76   Ibid. Back

77   Ev 124, para 7. Back

78   NAO, paras 4.4-4.5. Back

79   Ev 124, para 8. Back

80   CSPL, paras 5.30-5.31. Back

81   NAO, p 40. Back

82   NAO, paras 4.7-4.8. Back

83   See 'Members Expenses Scheme' on the Scottish Parliament website. Back

84   National Assembly for Wales Remuneration Board, Determination on Members' pay and allowances (No 2) (July 2011). Back


 
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© Parliamentary copyright 2011
Prepared 12 December 2011