Reforming the Additional Costs Allowance (ACA), aka MPs’ second home allowance, is clearly needed in view of the abuse of the system by a small number of MPs, in a few cases outrageously, but the method chosen by Gordon Brown combines all the worst elements. Basically there are three alternative ways to reform the system. Either the second home allowance is abolished and replaced by a daily overnight allowance, which is what he proposes, or it is replaced by an increase in MPs’ pay, or the second home allowance is retained but drastically tightened up. The problem is that the first of these options, for which the Government has rashly jumped far too hastily, is full of pitfalls and has not been thought through.

If MPs were paid on a daily basis for attendance at the House of Commons, there is a real risk of importing into Westminster the same gravy train allegations as are now directed at the European Parliament. MPs would be paid the daily rate so long as they attended Parliament (clocked on) for at least a minimum period of time. Whatever that period of time was, it will almost certainly be claimed that MPs are being over-paid for too short an attendance, even though many conscientious MPs already spend 13 hours or more a day in the House (from 9am to 10pm).
A second objection is that if the daily allowance were fixed at the rate currently paid to peers in the Lords, i.e. £200 a day for 4 days a week, then for a Parliamentary session of 34 weeks a year an MP with a full record of attendance would be paid £27,200 for the year, which is more than the current annual ACA. Paid on top of the MPs’ salary which next year amounts to £65,000, this would in effect increase that salary to £92,000 a year, which in current circumstances is out of the question.
There is another serious objection to Brown’s proposal. He is appointing Sir Christopher Kelly and the Committee on Standards in Pulic Life to look at all the relevant issues involved in MPs’ allowances ‘as speedily as possible’ (why not set a precise date, as is usual, say by the end of June?). Yet his own proposal for solving the problem via a daily overnight allowance surely pre-empts the very inquiry he himself has set up. Worse, it seems the Government is determined to push the matter to a vote in the House on Thursday of next week (30 April) on the basis of the Prime Minister’s proposals, even though there has been no consultation with the other parties and no deliberation on the pitfalls and drawbacks.
The second way to reform the system, which a few at Westminster have advocated, is a significant pay rise for MPs to substitute for the abolition of the ACA. That has all the disadvantages set out above, and in the current climate MPs need it like a hole in the head. Frankly it should be a complete non-starter.
The third alternative is the least bad option, so long as reform of the ACA is tough and rigorous (as proposed in my blog of 2 April) and not left to MPs in the last analysis to determine for themselves. Self-regulation has patently failed, and the decision on MPs’ pay and due and proper allowances should be settled by a high-level external regulatory authority. Sir Christopher Kelly’s committee should be told to report by a clear date before the summer, which would allow full opportunity for public debate of the issues, and their conclusions should then be implemented before the House rises.

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