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
- 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".
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
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.
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."
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
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.
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.
21. Reviews during the period took place as follows:
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.
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."
- 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.
- 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.
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."
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"
- 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.
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. A
contributory pension scheme was introduced with effect from October
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."
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
25. Themes in this period included:
- Continuing reluctance of Governments
to raise MPs' salaries, and much greater willingness to increase
- 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.
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."
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.
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.
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
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."
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".
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".
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.
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. 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
together with many other changes, such as a freeze on second-home
designations (subject to appeal) in order to prevent "flipping".
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.
- 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".
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."
David Cameron, then Leader of the Opposition, supported the establishment
of the body, as did Nick Clegg, Leader of the Liberal Democrats.
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
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
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.
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.
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
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."
As the NAO put it, IPSA "began providing services to MPs
on time in May 2010; this was a major achievement by the Authority."
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.
40. IPSA has sought to improve the operation of the
scheme. Recent changes include:
- Improvements to the on-line
- 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.
- 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.
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.
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."
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
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.
46. The SSRB itself did not respond to this invitation
to clarify the purpose of the London Supplement.
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.
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".
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.
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.
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.
IPSA implemented this recommendation.
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",
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".
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. 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".
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".
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.
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.
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. 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
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.
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
21 Ev 104, para 2 (HMRC). Back
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
Ev 114. Back
Ev 114. Back
Ev 114. Back
Ev 114. Back
House of Commons Library, Standard Note, 'Members' pay and allowances-a
brief history' (May 2009), SN/PC/05075, pp 8, 9, 11. Back
Ev 115-16. Back
HC Deb, 22 June 1937, c 1052. Back
Ev 116-17. Back
Ev 117. Back
HC Deb, 8 July 1954, cc 2347-8. Back
Ev 118. Back
Report of the Committee on the Remuneration of Ministers and
Members of Parliament, Cmnd 2516, paras 33-7, 53. Back
Ibid, paras 39, 52, 75-6. Back
Ev 120. Back
House of Commons Library, Standard Note, 'Members' pay and allowances-a
brief history' (May 2009), SN/PC/05075. Back
Third Report from the Members Estimate Committee, 2007-08, Review
of allowances, HC 578 (hereafter: MEC), para 7. Back
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
Oonagh Gay, 'MPs go back to their constituencies', Political
Quarterly, vol 76 (2005), p 58; information from the House
of Commons Library. Back
Ev 121. Back
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
Q 88. Back
Cm 7270-1, summary para 4. Back
MEC, paras 3-4. Back
House of Commons Journal, 2007-08, 3 July 2008. Back
By then renamed Personal Additional Accommodation Expenditure
HC Deb, 19 May 2009, c 1421. Back
The NAO's question referred to "The system for reimbursing
MPs' expenses that was in place before the last General Election". Back
HC Deb, 20 May 2009, cc 1505, 1507, 1509. Back
HC Deb, 10 June 2009, cc 795, 809. Back
HC Deb, 10 June 2009, cc 799, 802. Back
NAO, p 13. Back
IPSA, The MPs' expenses scheme: third edition (May 2011),
HC 954, 2010-12 (hereafter: IPSA Scheme). Back
NAO, paras 3, 10, 2.3; PAC, QQ 48, 51. Back
IPSA, Annual review of the MPs' scheme of expenses and costs:
consultation (November 2011), pp 33-4. Back
Ev 76, para 43. Back
NAO, para 6. See also ibid, para 1.7. Back
See para 176 below. Back
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
The latter implements a CSPL recommendation: see CSPL, para 5.79. Back
Provision for dependent children up to 21 in full-time education
if the MP is the sole carer remains as before. Back
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,
IPSA, Corporate Plan 2011-2015, p 4, para 13. Back
Q43; IPSA, Annual review of the MPs' scheme of expenses and
costs: consultation (November 2011), para 95. Back
Review Body on Senior Salaries, Report No. 64, Review of parliamentary
pay, pensions and allowances 2007, Cm 7270-2, pp 31-2, para
Cm 7270-I, paras 5.58-5.59. Back
MEC, paras 226, 234. Back
IPSA Scheme, para 5.1. Back
Cm 7270-2, pp 30-2. Back
Cm 7270-1, para 5.59. Back
CSPL, para 5.76 and Recommendation 8. Back
IPSA, The MPs' expenses scheme (March 2010), HC 501 (2009-10),
para 6.3. Back
Para 46 above. Back
IPSA, Frequently asked questions (25 March 2011), p 19. Back
Ev 124, para 7. Back
NAO, paras 4.4-4.5. Back
Ev 124, para 8. Back
CSPL, paras 5.30-5.31. Back
NAO, p 40. Back
NAO, paras 4.7-4.8. Back
See 'Members Expenses Scheme' on the Scottish Parliament website. Back
National Assembly for Wales Remuneration Board, Determination
on Members' pay and allowances (No 2) (July 2011). Back