The corruption paradox

There is one political story that will never die in the UK and that is politicians’ expenses. All countries have to wrestle with corruption of some form or another at the top. It is inevitable because there is no such thing as a perfect political system and so some people will always exploit the loopholes or just break the law because they think they can get away with it. Some countries are better than others at dealing with it, the UK political class, however, is failing miserably. It is a truly appalling state of affairs, worse even than what is being reported in mainstream newspapers and in my opinion is the biggest problem facing UK politics today because quite simply it is crippling any possibility of good government and undermining the key principles of democracy itself.

There are two strands to this problem: personal corruption and corporate corruption and the two are very much linked. I shall discuss the personal corruption problem first and cover the corporate second. Some parts of the problem are relatively easy to solve, other parts are not. What is definitely true is that there is a lack of true political will. If there ever was a time for a puritanical type of Prime Minister who would show the necessary steel and leadership to charge headlong at this problem, now is the time for them to step up!

Personal Corruption – The problem

I will start this section off by outlining a key assumption that needs to be borne in mind when considering things such as the MPs expenses scandal: British MPs, Lords and Ministers are poorly paid. It is a simple statement and it is not meant to excuse what they have done. For anyone seeking to fix the problem of politicians fiddling their expenses then this issue has to be tackled head on. The paradox is of course now that their scandalous expenses have been exposed and due to the current recession, politicians are too scared to actually pay themselves a decent salary.

Now I know many people think that MPs are paid too much and don’t deserve an even more generous salary, the truth as always is more complicated and so a quick history lesson is appropriate. British MPs were historically paid a very low salary because they came from wealthy backgrounds and UK politics at the time was very much dominated by the aristocracy who conducted their political affairs almost as a hobby rather than a profession. We do not live in that sort of world anymore and a lot has changed for the better since then and so how you look at the role of MPs, Lords and Ministers needs to change too. The majority of MPs (not all but indisputably most) work very long hours. Politics is a very life consuming beast, it demands more and more from you and before long it takes over your life especially the higher up the political hierarchy you get. Become a Minister and you effectively are now on call any time of the day, any day of the week except for when you are on holidays. The equivalent business man/woman expected to deal with complex issues and sacrifice their life for the benefits of the business gets paid several hundreds of thousands if not millions. It is also revealing that if you compare UK political pay scales to that of other countries, it is obvious that UK politicians are not paid well. The demographics of Parliament is also very revealing, too many people from wealthy public school backgrounds at one end, too many union leaders or political careerists at the other with a woefully low number of women, ethnic minorities, civil servants, proper business leaders or other professionals being represented. A decent salary is just one but still critical step towards correcting this demographic imbalance and eliminating personal corruption.

Personal Corruption – The solution

Nothing in politics is ever truly simple, but I really do not see this problem as being insurmountable providing the political will is there. I also think that the British public can accept it providing that the solution is presented to them clearly and simply. Here is how I think it should be done. I am not going to cover the Lords in this analysis simply because the issue of Lords reform complicates matters and I would like to cover this in a later post.

Every MP should get a decent basic salary, let us say for the sake of argument that the figure should be between £100,000 and £150,000. Each Minister should get between £150,000 and £200,000. They should be allowed to claim expenses for any ‘reasonable’ travel (this means not everywhere first class!) and overnight stays connected with work. They should also be allowed a certain amount of expenses for hiring staff to run their offices. In addition, Parliament should own or lease a significant number of reasonable but not extravagant properties in London which MPs and Ministers (who don’t live in London ) can rent from Parliament at a subsidised rate. Let us say something like £500 per month for a single bedroom, £800 per month for a two bedroom, £1200 for a three bedroom and so on. All very straightforward, they cannot sub-let these subsidised properties, they cannot buy houses or furniture on expenses and in short, they are treated fairly. For those who would rather own their own property, would rather rent a different one or who already live in London , they should be able to claim an allowance in lieu of paying rent, but that allowance should not exceed how much they would pay in rent. For example, if an MP bought or rented a one bedroom flat, they would get a £500 per month allowance. This is simply to recognise that they are not claiming the Parliament provided rental property, but they have incurred the cost of buying/renting a property for work purposes. As they have chosen to buy/rent their own property, all other costs above that allowance are their problem (mortgage, repairs, furniture etc). Simply put, there is nothing to claim on expenses and the salary is enough to live reasonably well in London.

And now for the big clincher, the big stipulation that MPs will hate the most, but is what I think will make the British public accept this idea. NO SECOND INCOME OR JOB. As a civil servant there are very strict rules on my ability to obtain income from a second job. Those rules exist for a reason and I find it inconceivable that MPs and Ministers should be any different. The exception should be for where a professional needs to do paid work to maintain a professional licence or qualification, for example pilots need to fly so many hours a year and magistrates need to be in court so many days a year in order to keep their respective licence. I might even be generous and say that being paid a smallish sum to act as chair/treasurer to a political party or being paid a small fee for appearing on Question Time would also qualify as an acceptable exception. I do not buy the argument that MPs or Ministers are ‘kept in tune’ with life outside Westminster by having additional jobs. This is a nakedly obvious way in which conflicts of interests arise and how political corruption is legalised. MPs and Ministers are essentially public servants and so need to dedicate themselves to the job in the same way as I do. If a Managing Director of a company wants to go into Parliament, they should stand down from their job for the company for the period in which they are serving the country and be willing to accept this. Note that I am talking about an income for actually conducting work. For those who have shares or significant savings etc, this should not need to be cut off. The principle is that you should not be paid to do something outside of your day job, but there should not be a barrier to utilising existing property or assets in the same way I am allowed to gain incomes from my savings or from renting my own property outside of my civil servant job. By doing this, the rich and wealthy person who enters politics is now on a level playing field (job wise) to a much less wealthy person. Both should have entered Parliament because they want to do good not to enrich themselves and both should be expected to focus fully on that job. If the rich person does not want to sacrifice/postpone their business income then that should be their choice as obviously that is not the right time for them to enter politics. The suggested increase in pay does mean, however, that they can live within that income while doing the job.

Corporate corruption

For anyone who reads Private Eye, this will be a familiar topic. MPs or Ministers sit on committees or run a Government Department while big business places ‘office assistants’ in their offices and pays them directorships during or after their time in Parliament. This has to stop. What also has to stop is the reality that big business and individuals make political donations to influence policy as seen by the recent Peter Cruddas story (http://www.bbc.co.uk/news/uk-politics-17503116). Anybody involved in politics knows that this is not an isolated incident. All the political parties are desperate for campaign funding and by various means, whether involving money, dinners, favours or even simply privileged access, the corporate world is now more able to influence certain UK policies even more than several million UK voters are able to. Democracy is meant to be about the decision of the many, not the influence of a select few. Can it be a coincidence that the Conservatives are so keen to reform the NHS despite the overwhelming hostility from the UK populace at large while at the same time the party is accepting large donations from private health providers? Can it be right that certain defence companies can walk into Downing Street or the Ministry of Defence and press for pet projects to go ahead or for corruption enquiries to be shut down? Can we really be surprised that Adrian Beecroft (A big Conservative Party donor) who is a venture capitalist is pushing for reforms that in allowing people to be fired on a ‘no fault dismissal basis’ which just so happens to reduce the cost of making people redundant coincidently making it cheaper for venture capitalists to asset strip businesses that they have just bought?

This is not to say politicians should not speak to businesses, particularly when trying to understand the implications of certain policies. But this engagement should be a lot less cosy than it currently is and politicians should always be critical of whatever bright ideas is put in front of them, no matter who suggests it. The fact that business can offer ‘rewards’ to politicians is a significant barrier to any Government making the right decisions for the benefit of the country as a whole. Paying politicians a good salary while forbidding them from holding down second jobs or accepting payments would go a long way towards cracking down on this form of corruption in whatever soft guise it is practiced. And for those politicians who demonstrate that they can make a positive difference or successfully run a Government Department? I don’t think they will lack for job opportunities when they come out. For a business person looking for a new challenge, sacrificing a very high income for five years for the chance to put a big success story on your CV which will probably earn you more pay later on sounds like a reasonable trade-off to me.

The UK used to pride itself on being a relatively honest country as far as political dealings were concerned. I think we lost this claim a long time ago and if you are going to try to encourage other countries, particularly those involved in the Arab spring, to become democratic or for those various parts of the world where corruption is endemic, the UK is not exactly a shining beacon of good practice. There is currently a lot of gloom about recovering from the current economic recession, a big part has to be because no one has faith in politics anymore, probably not even the politicians or big business leaders themselves. A new, more honest, more professional generation is needed. One can only deam…