Provincial Rantings

Poor Premier League Footballers need more money!

2009-06-12T12:45:00.004+01:00

I read an article in The Sunday Times recently (31st May 2009) that really got my goat, so to speak. It concerned Premier League footballers at top football clubs earning huge sums of money, up to £150,000 per WEEK. It is not necessarily the salary that bothers me, after all it is a market driven result, but their use of accountant advisors to find ways to reduce the footballers tax bill.

This seems to have come about because the Budget put up taxes on top earners, those earning over £150,000 per YEAR. On earnings above this level the income tax rate will be 50%. In effect after a couple of weeks each financial year the footballers will have an income tax rate of 50%.

Apparently this is likely to make some of the top foreign footballers consider leaving the Premier League and ply their trade elsewhere, as they could be better off on a lower salary elsewhere. You have to feel sorry for poor old Andrey Arshavin who recently joined Arsenal from Russian club Zenit St Petersburg and according to The Sunday Times report now needs a pay rise on the his £80,000 per week salary, due to the high taxes.

The accountants used by top footballers already have various legal schemes to limit the tax these high earners pay. They are now looking at the football clubs not paying players salaries but making them loans. The plan is to write off the loan when tax rates are lowered, probably by a future conservative government. The players would then pay tax at the new lower rate, saving them a lot of money and depriving the nation of the taxes it needs.

The UK is in a well documented financial hole, as are probably many football fans and their families. Footballers are not the only wealthy people who try to legally minimise their tax. I think just because this behaviour is legal it does not make it right. If wealthy people played by the spirit of the rules and paid the tax they were supposed to, then the tax burden for all could be reduced.

The wealthy do well out of living in the United Kingdom, it is a good place to live. They should accept their responsibility to contribute fairly to the overall well being and development of the country that affords them such a privileged status. Benefit cheats are poorly regarded for cheating the public finances, MPs are unpopular for claiming public money whilst insisting their dubious claims are within the rules. Likewise the wealthy tax minimisers are also unfairly cheating the public purse.

Gordon, Gordon, Gordon – Do you see the Irony?

2009-06-07T15:06:00.001+01:00

According to widespread media reports throughout Tony Blair’s long spell as Prime Minister the then Chancellor of the Exchequer Gordon Brown was busy plotting to replace him. Labour Party politics were reported in terms of “Brownites” and “Blairites”. The combatants reputedly had a great falling out, resulting in the two key figures of the UK Government were not speaking to each other. The root of the problem was supposedly Gordon Brown’s huge desire to be Prime Minister and he stood accused of using advisors, supporters and spin doctors to brief against his colleague and Prime Minister.

I recall reading Piers Morgan’s book about his time as a tabloid editor giving some of the inside track on the fallings out and difficult relationships between the Blairs and the Browns. It is not the major part of the book but an interesting sub-plot. If you have grown to like Piers through Britain’s got Talent then you will enjoy his book, especially if you like a laugh at celebrities expense, despair at their vanity or think the tabloids are lacking in morality. Piers Morgan is almost likeable for his openness and not necessarily painting himself in the best of lights. I stray off the point, it’s a good read anyway.

Now Gordon Brown is the Prime Minister, the job he coveted so much, and everyone seems to be plotting against him. Plotting is suggestive of secret, clandestine meetings so perhaps a better description would be that there is open revolt against Gordon Brown. Now that is irony, unlike rain on your wedding day. It does make you wonder how Gordon ever thought he would command loyalty from his MPs after the example he set as Blair’s Chancellor. Poor old Gordon, he wanted the job so much he didn’t realise it was such a bad time to takeover. He surely has no chance of winning the next election.

I must admit I do feel sympathy for Gordon Brown, as I feel he is genuinely in politics for the right reasons, to make a difference to his country. It does look though like he is out of his depth. He was the Chancellor who had a tremendous grasp of the detail of his job which was perhaps his great strength. The role of Prime Minister demands leadership, big picture and visionary skills and he has not been able to look like a leader, despite the current times where there is massive opportunity to be a leader. Our Prime Minister has missed the opportunity to show leadership over the MPs Expenses crisis. He has seemed reactive not proactive, just far from being in charge.

MPs and Travel Expenses

2009-06-02T18:50:00.004+01:00

The BBC website has published the MPs full expense claims by category for the year 2007 to 2008 (see link at bottom of page). A short play with the data quickly brings some interesting anomalies to light. At the extremes the MPs annual travel expense claims ranged from £0 to £40,841.

Lets praise the 10 MPs who did not claim any travel expenses, these are George Galloway, Ann Keen, Adam Afriyie, Nick Raynsford, Tony McNulty, Greg Hands, Susan Kramer, Glenda Jackson, Stephen Timms and Emily Thornberry. Perhaps not surprisingly these MPs all have constituencies in London.

Contrast these MPs with others who have constituencies in London yet have claimed travel expenses. The 6 largest claims are:

Stephen Pound, Ealing North £7113
Rudi Vis, Finchley & Golders Green £5905
Malcolm Rifkind, Kensington & Chelsea £5095
Stephen Hammond, Wimbledon £4162
Andrew Dismore, Hendon £3644
Andrew Slaughter, Ealing Acton & Shepherds Bush £3407

Why is there such a difference?

At the other end of the scale the largest travel claims are submitted by MPs with constituencies in Scotland and Northern Ireland, as you would expect given the distances involved. It is strange that in this higher end group of travel expense claims also appear MPs from constituency’s that are not anywhere near as far from London. So step forward:

1. Alan Meale, Mansfield, £23,290
Who compares badly to Bob Laxton of Derby North or Dennis Skinner of Bolsover who managed to keep travel expenses to £5731 and £6412 respectively

2. Geoffrey Robinson, Coventry North West, £21,534
Who compares badly to Bob Ainsworth of Coventry North East and Jim Cunningham of Coventry South whose relatively modest travel claims were £3,698 and £4,418.

3. Janet Anderson, Rossendale & Darwen, £20,965
Who compares badly to John Pugh of Southport and John Leech of Manchester Withington who managed £4736 and £8,066 respectively

When you begin to look at our large cities there are some interesting differences. How is it that the 3 MPs representing Nottingham spend such different amounts on travelling to and from London?
John Heppell presumably travels in the cattle car with a paltry £6,637
Alan Simpson maybe travels in standard class with an average £11,649
Graham Allen possibly travels in first class with an extravagant £18,211

It’s not just Nottingham either. Let’s try Sheffield where 6 MPs spend between David Blunkett’s miserly £3,055 and Richard Caborn’s expensive £16,066 or Birmingham where the range is from John Hemming’s £4,045 to Khalid Mahmood’s £17,462.

I don’t know that any of these MPs have done anything wrong, but I am struggling to see why MPs from the same city spend vastly different amounts on travel to represent their constituencies.

http://news.bbc.co.uk/1/hi/uk_politics/8044207.stm

A Partial Defence of MPs Expenses

2009-05-22T15:43:00.003+01:00

All MPs are in danger of being tarnished with the same brush thanks to the misuse of the expenses system by some of their colleagues. When the dust has settled on the Daily Telegraph revelations some of our MPs will be able to look their electorate in the eye and say “I have been honest with my expense claims”. Others will have a difficult job explaining their expenses record. I have sympathy with the innocent, but because of Parliaments reluctance to publish all the details we do not yet know how many are innocent. However I can’t believe MPs have not known what is going on, if it was within the rules then I am sure they would have discussed it, so why did they not blow the whistle themselves?

MPs are allowed to claim expenses in a number of areas, in addition to an annual salary:

Second Homes Allowance or London Supplement
Travel
Office
Staff
Central Stationary
Stationary & Postage
IT Provision
Staff Cover
Communications

These expenses seem reasonable enough to me. Obviously MPs represent their constituents and so will need both a home and an office in their constituency, to meet their constituents and be available for them to contact. I can see they need to have staff to handle case work on behalf of their constituents with who they need to communicate. It is no surprise that they incur office, staff, stationary, postage, IT and communications expenses. They couldn’t effectively represent us without these items. Members of the public incurring such expenses whilst doing their job would expect to be reimbursed. The big questions are

Have the MPs tried to get value for money?
Have they only claimed for genuine expenses?

MPs are required to travel to London to attend the House of Commons, where they represent their constituents, although it looks like they represent their parties. Whilst attending the House of Commons MPs incur travel expenses which it seems fair to be able to have reimbursed, providing that their constituency office is regarded as their main place of work. The House also sits until late at night, making commuting and unreasonable expectation for many MPs.

There is clearly a need for accommodation based near Parliament for MPs. This need is where most of the attention so far has been focussed as it is revealed MPs are buying second homes in London and claiming the mortgage interest on expenses. In addition they are also claiming the costs of electrical equipments, furnishings and redecoration. Finally MPs also keep the profits from selling their second home, sometimes without paying capital gains tax.

I have heard David Cameron argue that he needs a second home in London to keep his family together. I’m not sure I buy his argument. When you decide to seek election as an MP, you are deciding to take on a job requiring you to split your time between different locations. Many families face this choice and since the economy is going down the pan, even more families face this predicament. People in a normal job expect their expenses to be reimbursed, whilst balancing finding reasonable accommodation with cost effectiveness. Expense reimbursement is not designed to improve your financial position, which assisting the purchase and maintenance of second homes clearly does. I can’t believe a house purchase is the most cost effective for the tax payer. Maybe MPs need to look at value for money of other options

Hotel Rooms
Rented Apartments – sharing with other MPs perhaps
Bed & Breakfast
Renting a room in someone’s house

Actually maybe that is a bit flippant, as I think MPs probably need privacy in a home as I am sure they will have confidential documents and will need a place where they can work undisturbed. Maybe Parliament should purchase a property for each constituency’s use for the use of whoever is elected as their MP. These needn’t be castles, perhaps an apartment as the MPs should really be based at home in their constituencies.

Broadly the expenses system seems fit for purpose, barring some change to the accommodation of MPs whilst in London; it is the MPs who have abused it that are not. We the electorate do need to be careful over the expenses row and there needs to be a careful examination of the records of all MPs. If we are not careful we could end up with a system that succeeds in minimising expenses and the use of taxpayers money, but also prevents anyone but the wealthy becoming an MP. That would be a mistake.

In forthcoming blogs I am going to look at MPs expenses to point out where constituents might like to ask their MP for an explanation, as there may well be a good reason.

2009-05-19T15:46:00.000+01:00

The MPs expense claims scandal has certainly got people fired up, passion was plentiful on the BBC programme Question Time (14 May). It has even motivated me to start blogging. I had to admire Margaret Beckett et al, who showed great courage in going on the programme and sticking to her guns. I completely disagreed with her, but have to admire her brass neck.

I find the revelations genuinely surprising and immensely disappointing. I thought the people who became MPs did so primarily out of a desire to serve their country. I don’t mind MPs being well paid, as after all it must be a difficult job. But I do object to the clandestine way incomes have been boosted when financial gain in this manner should be beneath them.

When asked to define what it means to be British I quickly think of a sense of fair play and playing by the spirit of the rules. We frown upon benefit cheats and the rich who evade taxes. We pride ourselves that our country is not as corrupt as many others and are shocked by reports of EU corruption. This scandal just flies in the face of this and undermines the essence of being British.

It appears MPs through the House of Commons fought a long and publically funded legal battle to keep the expense claims records secret. They did not want us to know. The court case was lost, after appeals, and the records were ordered to be made public. Incidentally this still has not officially happened. The information is only public because someone has leaked it to the Daily Telegraph. I wonder why they want to keep the data secret.

MPs should set standards and model behaviour to the rest of the population. There is an expectation they have integrity and perhaps a degree of altruism in their wish to serve their constituency. Many people have experience of expense systems and know they are designed not for gain but to reimburse expenses incurred in doing your job. There is a massive disconnect between the publics experience of expenses and what we now read and hear about MPs expenses. Many people have jobs taking them away from home regularly and they have to stay in hotels, B&B’s or rent a room. They certainly do get to buy a fully equipped second home, which they can then sell at a profit when their job finishes.

It is the people and not the system that are at fault. The system seems to be fine as the rules and principles are inline with other expense systems. There is a clear obligation that valid expenses must be justified in terms of being necessary to fulfil ones duties as an MP. The system could work fine. It is the people using and policing it that are abusing it. Politicians of all people should be attuned to the spirit of the rules and the ideas behind the system. The MPs themselves have chosen to push the system to its limits and milk it. That is their judgement and their choice.

But should the public’s judgement and choice be? Who do we vote for in future elections? With all three major parties being implicated in this scandal, the whole political class is tainted. I hope people do not vote for the BNP or other extreme parties as a protest, but there must be a real risk they will. Perhaps it will encourage more people to seek election as an independent MP.

MPs Expense Claims

2009-05-19T15:40:00.001+01:00

I can’t remember the last time people got so excited about domestic politics. The Daily Telegraph’s coverage of Members of Parliament expense claims has been truly incredible. It seems to have got the whole country talking and angry. We are not talking about a distant third world country with a corrupt dictator, but the United Kingdom, the Houses of Parliament and the mother of parliamentary democracy.

The more I read about this scandal, the more it appears that the MPs are just milking the expenses system. Here are some of my favourite examples

David Heathcoat-Amery and £380 for horse manure
John Prescott and £312 for fitting mock Tudor beams to his home
Douglas Hogg and over £2000 to clear a moat
Oliver Letwin and over £2000 to repair a pipe under a tennis court
Lembit Opik and £40 summons for not paying his council tax

You can find plenty more at http://www.telegraph.co.uk/news/newstopics/mps-expenses/

It is amazing to discover MPs expense claims have to be independently approved. Claims are submitted to the Department of Resources and must follow guidance laid out in the Green Book, which contains some fundamental principles including

“Claims must only be made for expenditure that it was necessary for a member to incur to ensure that he or she could properly perform his or her parliamentary duties”.

“Members must ensure that claims do not give rise to, or give the appearance of giving rise to, an improper financial benefit to themselves or anyone else”

Basically expense claims need to be necessary for MPs to do their job and should not be for personal benefit, or even look like they are.

MPs are surely on their own in thinking it a reasonable defence to point out they acted within the rules, their claims were approved and it is the system that is wrong and needs changing. What rubbish. Can they honestly say the claims did not result in personal gain and they were necessary to carry out the duties of an MP. I think not.

MPs have been milking the expense system, but their milk has soured and left them covered in a bad smell.

Here are some other points to consider:

The Department of Resources also seem not to have been applying their own rules to the MPs expense claims. What should happen to them?

The expense claims apparently only cover the last four years. So are we to assume it was all squeaky clean before this?

How many MPs would be paying back their claims without the Telegraphs story?

You can read the Green Book at
http://www.parliament.uk/documents/upload/GreenBook.pdf