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Greedy? Foolish? Either way, some of our MPs are sullying the name of politics

October 19, 2012 9:51 am

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“I’ve done nothing wrong. It was within the rules.”

Is it 2009 again? I hope not – that year was bad enough first time round – but exect to hear several of those MP catchphrases from that year repeated in the coming days. The expenses scandal seemed to be the final nail in the coffin of credibility for politics, but just when it looked like politics was about to make a Houdini-like escape and become relevant to the lives of ordinary people again, another nail is slammed in.

MPs renting out homes in London whilst renting alternative properties at the taxpayers expense. Some renting those homes to other MPs.

Have some of our representatives learned nothing? Was the expenses scandal such a hoot for them the first time around that they fancy doing it again? Do they have so little feel for the probable reaction from ordinary people that they thought this would be ok? Did they think that people struggling with low wages (or no wages) would turn around and say “Two flats? Good on ya!”?

Because – obviously – that won’t be the reaction. It will be that politicians are venal and corrupt and greedy. (I disagree – I think most MPs, including some of those named today, are passionate representatives who do good work – but it’s becoming harder and harder to defend politicians, and by extension politics.)

There’s an argument to be made of course that what was happening here is entirely legitimate. Why should a politician not buy a property and let it out? (Apart from the fact that buy to let landlords are in part responsible for driving up rental costs for those of us trapped in the private rented sector). It’s a legitimate question, but it’s defeated by the “sniff test”. It doesn’t smell right to own one flat and expect the taxpayer to provide you with another one. It especially doesn’t smell right if the taxpayer bought you a house – which you rent out – and then you ask the taxpayer to rent you another house. That smells greedy. Scratch that. That IS greedy. It stinks.

Although it may be hard for some of them to accept, our MPs must be whiter than white, squeaky clean and without even the slightest strain of greed, selfishness or sef-interest. That may be a high bar but the same rules apply here as for political lying – it just takes a few bad apples to make a few big lies and suddenly all politicians are liars. Similarly it only takes a few MPs looking like they’re “on the make” and suddenly they all are.

There may have been a time when being an MP was a great way to get rich and live the high life. Some may lament the passing of that time. But sitting in the Commons as a representative of the people should be a great honour, not a meal ticket. MPs are already paid more than enough, but yet that still isn’t enough, it seems. A few more ways must be developed to coin it in, or at best, a few loopholes must be kept open, just to be on the safe side.

Shame on those who – deliberately or unwittingly – make use of those loopholes, because you’re sullying the name of politics at a time when it can least afford the abuse. And it won’t just be you who suffers for it – it’ll be your colleagues, your supporters, and anyone who believes that politics is a noble cause. Shame on you.

What were you thinking?

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  • hgsfc

    Those named cannot be accused of being foolish..they strike me as remarkably intelligent people…that only leaves greedy?

  • Hugh

    “It’s a legitimate question, but it’s defeated by the “sniff test”.”

    It’s also defeated – as in the original expenses scandal – by the concerted efforts to prevent the information being made public. It’s quite apparent – again – that the MPs know the public won’t like it, so they’ve – again – tried to cover it up.

  • AlanGiles

    Totally agree Mark and you views do you great  credit, but, sadly, I expect just as in 2009, we will find that no party is immune from yet more sticky-fingered behaviour.

    What angers me even more than the greed and avarice is the furtiveness of their behaviour.

    May I suggest that we stop trying to rehabilitate on LL those MPs caught out last time (and no doubt this one). In short, no more articles from the likes of Hazel Blears, Liam Byrne  David Miliband etc. I don’t doubt for one moment your views are genuine and coincide with many of us here but to deny a platform to the expenses scroungers on LL would show just how distasteful we find their antics.

  • alex_penyfai

    This time will pass and they will get away with it. You know it, we all know it. It’s small corruption anyway, compared to the selling off of the NHS to Tory donors and friends for example or the ever open door for a sufficient political donation. How anyone can say we live in a democracy I don’t know.

  • alex_penyfai

    This time will pass and they will get away with it. You know it, we all know it. It’s small corruption anyway, compared to the selling off of the NHS to Tory donors and friends for example or the ever open door for a sufficient political donation. How anyone can say we live in a democracy I don’t know.

  • alex_penyfai

    This time will pass and they will get away with it. You know it, we all know it. It’s small corruption anyway, compared to the selling off of the NHS to Tory donors and friends for example or the ever open door for a sufficient political donation. How anyone can say we live in a democracy I don’t know.

  • alex_penyfai

    This time will pass and they will get away with it. You know it, we all know it. It’s small corruption anyway, compared to the selling off of the NHS to Tory donors and friends for example or the ever open door for a sufficient political donation. How anyone can say we live in a democracy I don’t know.

  • http://profile.yahoo.com/E6JYCB7EANFU42TCSXQPYTTPOA Mink

    The IPSA is a firewall and Bercow was a elected as a joke by politicians who regretted nothing.  It would be very easy to create an efficient and rigorous system for expenses if this is what was wanted, but it isn’t.  Please spare us the “good intentions” routine.  This is institutional venality. 

  • Steve Oatway

    Excellent article – but I fear that once more nothing will change – ranks will close and information will have to be dragged out kicking and screaming to the sound of much hand-wringing – then in a couple of years we’ll be here again in a different guise

  • Meissen Bison

      buy to let landlords are in part responsible for driving up rental costs

    How so?  In a free market not disitorted by the availability of Housing Benefit, the entry of new private landlords should increase the price of houses by reducing the supply for owner occupation and reduce rental costs as the supply of rented accommodation increases.

    That apart, a good piece and Alan Giles is correct too: people abusing the system should be prosecuted if possible and hounded out of public life in any event.

    • http://twitter.com/waterwards dave stone

      The buy to let frenzy was in a large part caused by the neglect of politicians. Those with funds or the right contacts were able to get on the gravy train. It became a gravy train because rising property prices were caused by the failure of politicians to address the housing crisis. And, for many, property ownership seemed to provide a far better option to the various private sector pension scams.

      Now politicians who went to sleep on the job are trying to escape the consequences of their own inactivity. We shouldn’t let them get away with it.

    • PeterBarnard

      There is no “free market” in housing, Mr Bison, because  the simple fact is that any new dwelling that is proposed has to receive planning permission approval, ie permission from government, and that has been the case for decades now.

      I doubt very much that the availability of housing benefit distorts prices. What does distort prices is the availability of mortgage money, as seen in 1972-74, 1988-89 and, more recently, in 2002-07.

      • charles.ward

        I don’t see how the availability of mortgage money increases demand (and therefore inflates prices) but the availability of housing benefit money doesn’t.  If the tax money that paid for increased housing benefit came purely from increases in taxes on house ownership or rental then you might have a point.

        I also don’t see how restricted supply (either by the government or by natural scarcity) implies that there is not a free market in the property that exists.

        • PeterBarnard

          CW,

          Between April, 1996 and  April, 2007, the outstanding lending secured against property increased from £468 bn to £1,326 bn (BoE) : an arithmetical average/year of £78 bn.

          Over the same period, HB increased from £10.9 bn to £14.8 bn (DWP) : an arithmetic average/year of £350 million.

          In percentages :

          HB up 36%
          Lending up 183%
          Prices up 242% (Nationwide BS series)

          Which do you think had the greater influence on the price (and hence, rental value) of residential property? HB or availability of mortgage money?

          In addition : HB is a transfer payment and therefore the aggregate of money available to consumers does not change. Mortgage money, in the wonderful world of fractional reserve banking, is credit created out of thin air and (what Roger Bootle called) a “financial phenomenon” in the housing market occurs.

          • charles.ward

            You can’t look at the raw numbers and say one is bigger than the other therefore it must have had the larger effect.

            One represents loans and the other gifts.  There’s a big difference between giving someone £10k and offering to lend them (with interest) £10k more than you otherwise would.

            “In addition : HB is a transfer payment and therefore the aggregate of money available to consumers does not change.”

            But as money is transferred from a general form (as it is raised from general taxation) to one that can only be spent on housing (housing benefit) then the demand for housing will rise.

            I did point this out in my earlier comment (when I said you would have a point if taxes on housing were raised to pay for the increased housing benefit).  This would be a true transfer payment within the amount of money available for housing.

          • MonkeyBot5000

            But as money is transferred from a general form (as it is raised from general taxation) to one that can only be spent on housing (housing benefit) then the demand for housing will rise.

            Surely the demand for housing is dictated by the number of people needing housing. It’s not like having a roof over your head is an optional extra.

            The Housing Benefit bill didn’t increase because government just decided to give away more money. It’s an effect, not a cause.

          • PeterBarnard

            Never forget, MB5000, “it’s the rich wot gets the pleasure and the poor wot gets the blame.”

          • charles.ward

             ”Surely the demand for housing is dictated by the number of people
            needing housing. It’s not like having a roof over your head is an
            optional extra.”

            For many it is optional.  Most young people have the (highly undesirable) option of staying with their parents.  Providing them with HB increases the demand for housing.  Demand is not just about how many people want something but how many people can afford it.

          • PeterBarnard

            Well, try these figures, CW. According to the consumer expenditure figures produced by ONS :

            1996 – actual rentals for housing £18.8 bn
            2007 – actual rentals for housing £39.5 bn
            =============================
            1996 – imputed rentals for housing £39.5 bn
            2007 – imputed rentals for housing £86.3 bn

            As MB5000 says below, the increase in HB was an effect, not a cause,  of the price of residential property.

            The price increase between 1996 and 2007 was due to an avalanche of mortgage money available for residential property purchase, nothing more, nothing less. Certainly, it wasn’t due to underlying demographic pressure in the Labour years 1997-2010 :

            Increase in total number of dwellings (England)  - 10.0%
            Increase in population (England) – 7.3%

            And certainly, an additional £3.5 bn in HB (2007 vs 1996) was not responsible for an increase of nearly £21 bn in actual property rentals.

          • charles.ward

             I never said that it was the only thing that caused prices to rise, only that it would have had an effect.  The fact that the increase in HB is 15% of the increase in rentals shows that the increase in HB is not insignificant.

            You said:

            “I doubt very much that the availability of housing benefit distorts prices.”

            Which is what I had a problem with.

          • Meissen Bison

            Which do you think had the greater influence on the price (and hence, rental value) of residential property?

            There is a misapprehension here about the relationship between the price and the rental value of a house.  While it’s broadly going to be true that a more expensive house will command a more expensive rent, a house owner, like any investor, will be prepared to accept that a part of the return on his investment will be in the capital appreciation of his asset.  In any event, the level of rent that can be charge will be determined by the market for rental property of a similar type and not by the caprice or cupidity of the landlord.

            If the foreseeable capital appreciation over a period is sufficiently attractive, the private landlord might be prepared to forego rent altogether and prefer to keep the house empty rather than risk the dilapidations and possible defaults of a tenancy.  In purely economic terms this is a perfectly justifiable course.

            The underlying economic realities do not become easier to grasp by a philosophical stance which has it that landlords by their nature are grasping and wicked and that there is a general entitlement to housing.

      • Meissen Bison

        For good or ill, the market for housing is distorted by all manner of state involvement.  In my comment, I asserted that Housing Benefit distorts the level of rentals rather than the price of  houses.

        Since you raise the point, though, there could be an impact on house prices at the margin where some buy to let properties are concerned.

        My contention is that an increase in the number of private landlords, mutatis mutandis, should not have an upward impact on the levels of rent being sought on those properties.

    • MonkeyBot5000

      “…and reduce rental costs as the supply of rented accommodation increases.

      Except when someone takes out a mortgage to buy the property, they charge enough rent to cover the mortgage payments. That leaves people like me paying for a mortgage and someone else getting to own the property.

      Because I’m now paying a mortgage instead of renting I don’t have the money to save up a deposit to get my own mortgage.

      • Meissen Bison

        In your economic model rents reflect not what the market will bear but what the landlord decides to impose.

        You need to convince a lender of the truth of your theory and get into the buy to let business yourself.

  • derekemery

    There is no way the information will not get out to the media regardless of any attempts by the speaker just as it did last time when Martin was the speaker. The reality is the majority of politicians are self-serving especially where money is concerned.  The ‘within the rules’ defence will not wash with the public. Many work for the private sector and see the huge difference between how expenses are treated in the private sector and in the public sector. They would face jail if they tried to pull the expenses scams that politicians pull. They see politicians as moral imbeciles. Guido usually has the dirt on politicians and there is already one name there.  My guess is that the Sundays will be full of names.

  • Dave Postles

    It’s another reason why extra-Parliamentary activity is necessary: we just can’t expect anything from Westminster any more.

  • Dave Postles

    Starbucks, no more; Google, no more; Westminster, no more; when you go, will you send them a letter from HMRC? (with apologies to The Proclaimers).

  • hereward

    Sullying the name of politics ??????   No they are not .  This sort of scam is just what we expect from our MPs of all Parties .   Nothing will change until the British wake up and vote anything but LibLabCon .

  • Anniesec

    A question more than a comment. Is it not the case that some MPs had purchased flats in London to enable them to do the job. Under the new expenses I think they are now barred from claiming for mortgage payments towards that flat – so the alternative is to rent it out to someone else? Needs a better system – take over a hotel and let them all stay there. Or better still try moving Parliament around the country when it has to close for repairs.

  • Hugh

     ”they strike me as remarkably intelligent people”

    Let’s not get carried away.

    • james102

      Problem is they strike must people as aged students, particularly Mitchell on his bike.

  • ColinAdkins

    MPs are renting out houses that have been refurbished courtesy of the tax payer. They claim this is not against the rules. Starbucks pays little tax on a multi-billion turnover stating they make a loss on this (yet their reports to shareholders are different). They claim this is not against the law. Am I being dense by suggesting that perhaps they should change the rules and the law to make these acts breaches?

  • Jeremy_Preece

    Excellent article Mark.

    Those of us who try to persude people to vote know only too well what happens to democracy when sufficient public reaction is that “they are all the same and all greedy *******s so why vote”. 

    I also agree that very many MPs (including some whose views I might despise) are conviction politicians, and well motivated. As we all know, there are plenty of exceptions!

    There is a problem though. To be an MP you must work sometimes late into the night and not be able to return home. Therefore they need to stay over in Westminster. They also need to live in their own homes, which hopefully will be in the area that they serve. Parachuting candidates from other areas makes this problem worse.

    What I am saying is that there needs to be a much better system in place, and the expenses must be simplified. Why not for example provide a B&B room to each MP in Westminster. These facilities would be all the same and all part of the office, for the MP and partner. Then pay their travel expenses between home and Westminster.
    If the MP does not live in the area that they serve, then they can be paid B&B within certain perameters. That would surely end much of this double dipping, and renting out houses etc. 

    In any job that I have ever worked, if travel and overnight stays are required then there is a very clear policy on what you can and cannot claim. The result is that abuse of the system is nearly impossible. If it is abused the rules make that very clear cut.

    Is is in everyone’s best interst that the whole system of MPs expenses be better clarified, simplified and therefore easy to enforce. Thereby an expense claim is either fair and legitimate, or not allowed. A system with “grey areas” where expense claims are legitiamte because the are within the rules, but not nice from a moral point of view is a whole no-man’s-land that should not exisit.

    • Quiet_Sceptic

      In addition to getting clarity on what is claimable and the limits, there also needs to be something to enforce a proper relationship between the MP claiming the expenses and supplier. To have MPs claiming for services/items purchased from friends, family or colleagues opens the system to abuse.

    • Quiet_Sceptic

      In addition to getting clarity on what is claimable and the limits, there also needs to be something to enforce a proper relationship between the MP claiming the expenses and supplier. To have MPs claiming for services/items purchased from friends, family or colleagues opens the system to abuse.

      • Jeremy_Preece

        Quite right, and part of the detail that should be included in the new policy!

      • Jeremy_Preece

        Quite right, and part of the detail that should be included in the new policy!

      • Jeremy_Preece

        Quite right, and part of the detail that should be included in the new policy!

  • ColinAdkins

    If we are going to have some national convulsions on this issue can we also throw in their platinum plated pensions in for consideration?

  • mr_fraud

    I am sorry but MPs just seem to be in it for themselves these days, they twist and distort with the best of them, when found out some have the decency to resign and trot off for well paid positions else where on the back of contacts made. They disgust me.

  • LeeMatthews

    I can foresee a lot less cash jobs being declared on peoples tax returns now.  If it’s ok for MP’s it’s ok for the rest of us.

  • george

    I dont care what party they belong to. Each and every trougher bleeding the taxpayer should be put up for a by election immediately – see how the voters react.
    The cries of “we havent broken any rules” cuts no ice with me since the troughers wrote the rules. Anywhere an MP is making a profit out of the taxpayer that does not include his salary or simple expenses should be outlawed and handled the same way a company HR department would – sacked. The same rules for expenses in the private sector for (say for arguments sake) a middle manager attending meetings in a city away from home could be applied.
    ps: no internal inquiries either … get in the most aggressively independent QC out there and let him/her loose!
    screw tr!bal … lets clean out the sleaze on ALL sides of the house

  • james102

    No a landlord can’t just decide on a rent level that covers a mortgage, the market decides the rent level.
    The average return on rental property in London is under 6% if an alternative market for investment became available money would move away from property.
    It is population pressure that supports the housing market as can be seen in Ireland and Spain where housing availability exceeded demand and the property bubble burst.

  • MonkeyBot5000

    In your economic model, having a roof over your head is an optional extra as opposed to a requirement.

    You need to convince the rest of the population that they should choose to live on the streets to force “the market” to lower prices.

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