This morning I wake to news that MPs will be banned from paying mortgages under the new rules that will be suggested by Sir Christopher Kelly. My first reaction was ‘great’ – but how do poor people who do not live within commuting distance become MPs?
As I read the further detail of the suggestions given to the press I realised that, yet again, we are facing a sticking plaster solution to cover up a rotten system. Sir Christopher Kelly is said to be recommending that no MP should be able to claim for a mortgage for their second home if they live more than an hour’s commute from Houses of Parliament.
Fine, until you get an image of the type of advert for a rental property close to Westminster advertised on some notice board in a room in the House of Commons:
House swap required, 2 bedroom flat with views over Westminster Palace and the River Thames, well decorated and maintained (at the taxpayers’ expense). Current owner respected MP of Blog-town would consider house-swap with any other MP of any party to cover current mortgage payments’
This may be an extreme view but is quite plausible. Many MPs own property in Westminster that they may not wish to sell in a property slump as they will want to get the maximum benefit from the rotten system. Not many MPs have said that any profit they make on selling their property will go back to the taxpayer – Nick Clegg being one of the notable exceptions.
This, however, is not the only problem; rent is astonishingly higher than many mortgage payments, so this solution, for which there seems to be no cap (at least not one that has been announced yet) looks rather expensive. The prices on a basic Rightmove search show that properties in Westminster can range from £5,000 per WEEK to the lower end of the market at £425 per week. Even at the lowest end of the market this faces the taxpayer with a £22,000 annual bill per MP allowed to claim.
However, back in 2008 I suggested what to me seems like the better solution. Government buys 500-600 properties and has a lottery for MPs. Each gains one, simply decorated, simply furnished property for use throughout their term in parliament. You can read my full suggestion here.
This current suggestion is just another sticking plaster and still open to abuse at a large cost to the tax-payer not real reform of the system.
* Susan Gaszczak is from Watford, she is a member of the Lib Dems’ Federal Policy Committee and Federal Conference Committee.
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16 Comments
That would be a better option in the long term – oh for County Hall! – but the public are baying for blood, and would prefer a more expensive solution to a more crooked one… And the gov’t might be able to negotiate rent concessions in exchange for the certainty that the MP will pay, for one thing among others. But I agree it’s dreadful how the punishment is avoiding the real need for *reform*.
I agree with your solution, except a lottery in itself is probably a bit crude.
MPs with young children obviously have different needs to those who are pensioners. The government should buy 600 or so London properties, in consultation with the MP in question, and furnish them at a reasonable level.
There’s no need for the lottery – the Commons authority could simply pay people’s mortgages but own the equity. That way any profit from subsequent sales would go back to them, not the MP.
It’s a really simple system. We have shared equity schemes for teachers and nurses, why is it beyond the ken of Parliament to operate something similar?
@James G – you’ve pretty much said exactly what I was going to say.
If we can come up with a system whereby MPs get a choice of house with a maximum permissible monthly mortgage payment then when the MP retires, loses their seat or sells the property the MP should get back any deposit equity, any equity from mortgage payments above the monthly limit paid by UK Plc and an amount of remaining value back of any profit made based on what the MP could have gathered with their original equity deposit based on averaged inflation of the period was owned.
This way MPs could have whatever size house they see fit, not lose their own equity investment in it and UK Plc could gain from the remaining profits which, in a lot of cases, would be significant and end up funding a big chunk of the rest of expenses claimed by an MP over a period.
I think the majority of MPs don’t actually live in Westminster itself anyway. The majority live in somewhere that is an easy commute away from the Palace of Westminster but substantially cheaper, such as Vauxhall or Battersea.
Although many people suggest putting all MPs in the same apartment block, for me there is one simple reason not to – all it does is reinforce the Westminster bubble. I would rather an MP lived in an ordinary street with non-MPs than in a building where the only people they see during the week are their work colleagues.
James G – easy. Any part of the gain that realtes to tax-payer-funded borrowing becomes the Treasury’s.
It seems that MPs are getting a very pointed lesson in the difficulties of housing policy.
Do I not recall reading somewhere that an experiment was made whereby housing benefits recipients were paid the money as an allowance and allowed to keep the balance if they could find cheaper accommodation or negotiate savings – which many promptly did.
Would it not be simpler to have such a system for MPs. Decide on a reasonable allowance and allow them to save from it or add to it, to pay rent or get a mortgage as they saw fit.
Such an approach would be transparent and simple to administer – it would require precisely zero bookkeeping by either MPs or the HoC.
I think in one Scandinavian country they already have MPs staying in what might be described as halls of residence . I have no problem with the idea coming to this country.
There are also lots of empty properties in inner London that need bringing up to scratch and occupying to prevent them becoming squats of worse. Maybe these could be purchased for MPs and brought back into life.
Frankly, this is all starting to get very silly. Tonight’s news reports that virtually every allowance and expense is to be cut; often perfectly sensible ones. The end result could be that all MPs will either be the very rich or unable to find a better paid job elsewhere, or in the case of the Tories, probably both.
The public simply fail to realise that we will have more and more ‘professional’ politicians, fewer and fewer members with real experience and ability. This is mainly because the public simply don’t know what comparable salaries are. Do people realise that school head teachers can now earn up to a £110,000? That’s nearly £50,000 more than an MP. This just gets sillier and sillier. The consequences for the long term future health of our democracy are immeasurable.
If we’re getting onto the general concept of expenses rather than specifically housing – I have to agree with Martin above – it’s getting ridiculous.
Looking at one example – banning spouses working for their MP partner. In the “real world” in many small businesses the support of a partner or family member is vital – there are very few other people in the world who will work for such small amounts of pay yet devote such a huge amount of their time. In essence an MP is their own small business and banning a dedicated source of work, that probably understands the issues more than anyone just plonked in to the position seems bonkers to me… but with a thirst for blood everything seems to be going.
I agree. But if you put a rich well paid civil servant or similar person in charge of decreeing what MPs will receive you will get a hypocritical and punitive answer.
Cue another wave of MPs who refuse to stand again (and there are good Liberal Democrats thinking about it) and back to the days when the only MPs who could afford to do the job and fund proper support are rich (mainly) Tories.
If they try to do the same to the Lords (here we are not even paid a wage) a lot of people will give up.
Tony Greaves
tonygreaves
“here we are not even paid a wage”
On the other hand, “day subsistence” pretty well equates to the average salary, if a peer attends every day for the 60% or so of the year that the House of Lords sits. Those who claim their “main residence” – now officially ruled to be undefined – is outside London would receive in addition twice that amount. And there’s up to a maximum of £16,000 of office costs on top of all that. Scarcely penury.
‘If they try to do the same to the Lords (here we are not even paid a wage) a lot of people will give up’.
Hopefully this will be an additional benefit, the sheer volume of people entitled to sit in this politicians retierment club is absurd,cut the numbers to a maximum of 250,get them to clock in & off so we can get rid of the troughers & skivers,and pay them a fixed allowance for putting in an 8 hour work day.
Why do MP’s need a second home in London,how can this be justified?
Why are MP’s any different from the thousands of business people that spend months every year away from home staying at hotels?
Within walking distance from parliament you have both the Premier and Day’s Inn hotels with an advertised b&b rack rate of £ 70.00 per night,no doubt with a block booking by the HoC a reduced rate of around £50.00 per night could be negotiated giving value to taxpayers.
‘This is mainly because the public simply don’t know what comparable salaries are. Do people realise that school head teachers can now earn up to a £110,000? That’s nearly £50,000 more than an MP.’
Martin,
A school head teacher needs qualifications,experience,has a complex job spec and real responsibilty for hundreds of children. An MP requires no qualifications,no experience for a job that is a mix of social worket & delegate.
I
If you add the value of gold plated final salary pension scheme,to the free travel and salary that an MP receives then an MP is comfortably within the band of the top 5% of salaries in the UK..
Martin, the head of a large school has far more day to day responsibility than a backbench MP.
In nay event, the fact that a very small minority of people now earn six figire salaries does not mean MPs need to earn more than three times that natiomal average.
‘This is mainly because the public simply don’t know what comparable salaries are. Do people realise that school head teachers can now earn up to a £110,000? That’s nearly £50,000 more than an MP.’
Um.. yes – but that has nothing to do with MP salaries – and that’s a lot better than any councillors pay.
It took me 4 years of university and 10 years of hard work to reach an MPs Salary in the IT Industry, and that was only by becoming a contractor : MPs have safe jobs for at least 5 years *and* a huge resettlement package.
And as for the hours.. nonsense – I worked longer hours and had a longer commute when I worked in london as a junior programmer, on less than 1/3 of an MPs salary – not to mention the large number of MPs who have extra jobs as directors, lawyers, writers, etc.
Of course, you could probably fit Parliament work inside a normal working day easily if you instilled some discipline – no more heckling and childish disruption (Only the speaker has a job equivilent to a school teacher, and almost all teachers do a better job of keeping some order and productivity in a classroom, than any speaker I’ve seen), no more toadying questions and no more “something waffle [insert trivial local issue] waffle I want a parliamentary question for my newspaper/leaflet/website” rubbish.
As for the Lords not being paid ? 150 quid a day, just to sign in?!!??
How out of touch are they? Give me strength!
Many of the Lords really aren’t worth that much money, I could hire pretty skilled IT contractors for that much to do actual productive work rather than sitting in subsidised bars or sleeping on the benches.