Cents and Sensibility
Civitas, 19 November 2009
Yesterday’s Queens Speech at the State Opening of the UK Parliament has drawn unanticipated criticism for the Government’s failure to propose legislation reforming the MPs expenses system (unanticipated by the Government, but perhaps not the Opposition, as David Cameron’s comments drawing attention to the omission were conspicuously followed by Sir Kelly (author of the recent expenses review) also voicing his disappointment.
This year’s revelations of MPs’ expenses abuses in Westminster have undermined the electorate’s faith in the political class. The public’s scorn for politicians was demonstrated at the 2009 European Parliament Election in the UK, when 2 British National Party MEPs were elected, purportedly as a result of a “protest” vote against mainstream UK political parties.
Members of the European Parliament (MEPs) have largely managed to avoid similar public scorn, despite the fact that the absurdities of the European Parliament (EP) expenses system are well documented.
Before the 2009 EP elections, MEPs’ salaries were aligned with that of National politicians in their own member state: UK MEPs were paid £61,180, Italian MEPs were paid £127,670 and Czech Rep MEPs, £25,730 (the generosity afforded to Italy’s MEPs in conjunction with MEPs’ right to immunity from prosecution, might have tempted Berlusconi to stand for the EP when his tenure as Italy’s Prime Minister expires…) Since July 2009, however, all MEPs will receive a salary equal to 38.5% of the salary received by ECJ judges, plus a 13-17% EU tax (rather than any national income tax). Note that MEPs ‘are allowed’ to top-up their payments to match the national level of tax … one wonders if information about who volunteers such funds will be readily available?
MEPs receive their salaries in conjunction with: €202,968 for staffing costs; €48,624 for running a constituency office; €57,000 “subsistence” costs; €100 per every 500 km travelled and an annual international travel allowance of €4,000. MEPs also receive a ‘transitional allowance’ when they leave office, and a generous pension scheme in which their personal payments can be paid from their office expenses allowance (MEPs are supposed to then reimburse this amount from their own pocket …), and they are also topped up with (doubled) payments by the EP.
MEPs have voted numerous times to keep the details of their expenses claims private. Furthermore, recent reforms to the MEPs expenses system have failed to close the numerous loopholes, e.g. substistency expenses will still not require MEPs to present receipts as proof of actual expenditure.
Former UK MEP Tom Wise was recently jailed for fraudulent expenses whilst he was serving in Brussels. Given the extensive “rule stretching” which goes on within the Brussels expenses system, the fact that Mr Wise got caught now appears to be quite an achievement – many MEPs caught with their hand in the cookie jar have received little more than a slap on the wrist. Whilst Mr Wise’s behaviour cannot and should not be condoned, he does perhaps perform a useful ‘whipping boy’ role for the EU, which is eager to demostrate that it reacts strongly to expenses abuses. As a former UKIP-turned-Independent MEP, one would expect few people tojump to Wise’s defence by pointing to the rife manipulation of expenses claims within the EU. Even so, the absurd generosityof ‘legitimate’ MEP expenses claims should not permit representatives to continue to waste EU funds simply because they have stuck to the letter of the law.
In light of recent revelations that Britain lost out on €10.5bn by not having its EU budget rebate between 2007 – 2013, arguments over the UK’s rebate are re-emerging. Tony Blair renegotiated Margaret Thatcher’s demand for a UK rebate in return for “a comprehensive reform of the CAP”, which hasn’t happened (CAP continues to account for almost 1/3 of all EU expenditure, the biggest single item on the EU budget). However, at this time of economic hardship and forced austerity, the EU would be advised to remember that its “own resources” are drawn from member states’ individual contribution (based on their Gross National Income), Customs Duties, and VAT receipts – every cent spent by Eurocrats belongs to the people of Europe. They would do well to remember that, and to spend it sensibly.