MPs leverage their kids to get more expenses

George Osborne

You might have thought that MPs had seen enough expenses scandal headlines to learn to err on the side of claiming too little rather than too much. However, the Independent Parliamentary Standards Authority has introduced new rules which allow MPs to register their children in order to claim more expenses.

Some 148 have signed their children up, and some have claimed more than £10,000 as a result.

Children registered

The figures were revealed by the Daily Telegraph, which gathered them under the Freedom of Information Act. They reported that 148 MPs had registered 300 children with the expenses regulator.

The idea is that MPs need to have a base in their constituency and one in London, and in order to have their children with them in both properties they need more bedrooms - and face higher costs - so the maximum they can claim is boosted by £2,425 for each child that routinely lives with them.

The Independent reported that nine ministerial level MPs were part of the scheme. Those using the scheme include George Osborne (pictured), Danny Alexander, Ed Miliband, and Ed Balls. Every MP who was contacted by the newspaper insisted that they had acted transparently and within the rules, and therefore had done nothing wrong. This is indeed part of the system, approved by the independent body.

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MPs leverage their kids to get more expenses

Pay is an average of £84,453


Average annual pay is £68,438.

Average annual pay is £64,889.

Average annual pay is £63,677.

Average pay is £60,486.

Average pay is £57,664.

Average pay is £55,426.

Average pay is £54,539.


Is it right?

But it begs the question of whether the system is right. Can you imagine a private sector employee demanding something similar from their boss? While they're at it, why not claim for the costs of childcare or for the therapy the children will need after seeing their parents go through another expenses scandal?

The news comes in the midst of a row over whether MPs should be allowed a £10,000 pay rise after the election - at a time when the rest of the country is facing pay cuts - or taking a job with worse pay after redundancy out of a desperation to work.

The pay rise is being proposed by the independent body, to reflect the cut in expenses and pensions. The chair of the body has insisted this is not being driven by MPs. He added that after this one-off rise it would rise along with average earnings. However, it still leaves a bitter taste for many.

With such an enormous pay rise looming, we are like to see even more scrutiny of the additional perks that MPs receive. Who knew, for example, that MPs can claim the expense of awarding 'modest reward and recognition' payments to their staff. One MP has claimed £3,200 - despite the fact he only has five staff. And who would have thought that they would have been granted up to £3,750 for returning to Westminster after the death of Margaret Thatcher?

While the expenses system has been overhauled to make it more acceptable to taxpayers, you can be sure there will be plenty that will emerge over the coming weeks that will leave us wondering whether this really is any better than the former moat-clearing, duck-house-building system.

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MPs leverage their kids to get more expenses

Most recently HM Revenue & Customs let Vodafone off the hook - for quite a sum. Vodafone paid out just £1.25 billion despite an original tax bill being closer to £8 billion (HMRC has always refused to reveal how much it thought the Vodafone final bill was). The episode was made even more shaming and painful because Vodafone was given several years to come good with the cash owed - even though it was sitting on a substantial cash pile at the time.

The Exchequer is estimated to have lost around £10 million to Goldman Sachs recently through an 'error' made by HMRC. The episode relates to an employee benefit trust run by Goldman allowing employees to take non-repayable loans that had no National Insurance contributions tied to them. HMRC did claw back the full amount from more than 20 businesses - but not Goldman. HMRC remains cagey about the details of the deal. Little HMRC accountability or transparency.

Huge problems with QinetiQ, the former Defence Evaluation and Research Agency, or DERA. A lack of clarity on contractual arrangements at the outset didn't help, allowing private equity company Carlyle to hammer the price down (why would you start negotiations when you didn't know the company's true value?). The Ministry of Defence behaved, it was said, like "an innocent at a table of card-sharps". Estimated cost to the taxpayer - £90 million. Huge sums were later made by QinetiQ management when the company listed.

The TaxPayers' Alliances estimates £2.7bn worth of taxpayer cash was wasted with a super-expensive 'National Programme for IT in the NHS'. The Department of Health, in the end, had very little to show for it as a consequence. Another example of poor management and a seemingly ingrained inability to provide taxpayers' with value for money.

"BT is paid £9 million to implement systems at each NHS site, even though the same systems have been purchased for under £2 million by NHS organisations outside the Programme", the Commons Public Accounts Committee noted.

Contentious. The Office for National Statistics estimated this has declined 3.4% since 1997, "with inputs increasing by 38%." The Centre for Economics and Business Research estimate that this inefficiency costs the taxpayer £58.4 billion a year.

Given the above record, are there any deals that the taxpayer has actually won out on? Not many, but the one successful project was the roll out of new Jobcentre Plus offices. It came in £314 million under budget, claims the Taxpayers' Alliance. A small cheer.


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