“Wholly, exclusively and necessarily…”

I tend to shy away from overtly political topics on this blog, but the MPs’ expenses furore seems somewhat outside the normal political boundaries – even the LibDems seem to have dirty fingers – and I wanted to put in my tuppenyworth, prompted by the MP in the constituency I used to live in emailing a link to his online statement on his own actions.

What I find interesting about his statement is that – despite accruing expenses within the rules and for what appear to be wholly understandable and acceptable reasons – he is repaying half of the legal costs of acquiring his “second home” in London.

This suggests some very weak thinking: he appears instead to feel he has to be seen to be doing something. He hasn’t (and doesn’t think he has) done anything wrong. He is worried that others – his constituents (or the media?) – might think that the legal fees were high.

Many, many years ago, I was the financial controller of a small part of a larger organisation, and I had to sign off certain expenses claims. Including my boss’s. He had difficulty in distinguishing the company’s money from his own, and several times I had to tell him he couldn’t claim for particular things. It wasn’t comfortable, but it seemed pretty clear to me what were expenses incurred in the course of the business and what weren’t, and I had to say so.

Many of the MPs’ expenses reported in the Daily Telegraph are clearly not business related – almost any private business would quibble over servicing an Aga, buying cat food and a chocolate Santa, or purchasing eye-liner (and that is only up to the Es!) – unless it is agreed that it forms part of their remuneration (and at that point becomes taxable). Just like other workers, MPs expenses must be incurred “wholly, necessarily and exclusively” to do their job (the words come from the HMRC about employees, but they were just used by an MP on Radio4’s WatO). It is pretty easy for most items to work out whether these conditions are met. Usually, one can also apply a “reasonableness test” – is it reasonable for someone to charge those items as expenses. (Clue: husband watching videos – of whatever nature – no!)

Many MPs were clearly “swinging the lead” – seeing what they could get away with (horse manure, anyone?), and they should be subject to review and censure. But the sight of MPs falling over themselves to pay back what seem perfectly reasonable expenses is bizarre. And paying back half of the expenses which you clearly feel were ok (because otherwise you’d be paying back all of that money) is doubly so.

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8 thoughts on ““Wholly, exclusively and necessarily…”

  1. Francesca

    Do you hold a distinction between expenses and allowances? Some of the money being discussed is the latter, although I don’t have a good sense of what is which.

    Reply
    1. MatGB

      Is the crucial point. Most of this fuss is over allowances—instead of getting salary increases, they’ve been increasing the additional costs allowance regularly since the 80s.

      Their expenses are on things like staffing, stationery, etc.

      The fuss here is on things they’re allowed to claim for regardless of what it is. Stupid system, but…

      Reply
      1. Patrick Post author

        And one doesn’t need to justify allowances – hence their use to make up salary.

        The whole system is broken!

        Reply
  2. Patrick Post author

    I don’t, really: with regard to MPs, I think they classify all these items within “allowances”. Surprisingly given all the attention in the media over the last few days, I wasn’t able to find out what the rules MPs were meant to stick to are!

    For other organisations, the difference between allowances and expenses may be down to the tax regime: if one is staying away for business, a company may choose to pay all expenses, but only those within HMRC’s allowances would be tax-deductible in the UK.

    Reply
  3. John

    I think what’s happening is a reflection of a deep corruption of mind in UK political culture. None of these folks are repaying the money because they think what they did was wrong. They are repaying it because not to do so impedes their electoral prospects. That is their substitute for a moral compass.

    Reply
    1. Patrick Post author

      I think some people are repaying money because they made honest mistakes – Jacqui Smith and her husband’s late night viewing, for instance, or Nick Clegg and his overseas phone calls.

      But generally I agree – a real lack of a sense of “right or wrong” which I would have thought most of us have.

      It is a pity that our elected representatives do not set a better example.

      Reply
  4. Pingback: Waiving the Rules « Patrick’s Blog

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