How MPs' expenses should work

The Express reveals more about Jacqui Smith's expenses today, while the Mail disses Harry Cohen, Jacqui Lait, and Bob Neill.

Just to be clear - they're all guilty.

The presumption should be that an MP's main home is in their constituency.

If that is too far away for them to commute like ordinary mortals, they can be put up in flats owned by the state. They will be lodgers, but they will pay for their own food.

Thus

• Ms Smith's main home would be in Redditch. In London, use the grace and favour apartment or stay elsewhere at your own expense.
  
• Harry Cohen's would be in Leyton. No flat, he can easily commute.
• Jacqui Lait's main home for parliamentary purposes would be in Beckenham. No flat, she too can easily commute.
• Bob Neill's main home would be in Bromley/Chislehurst. No flat, he too can easily commute.

The MPs' outlying properties in Colchester, Sussex and Southend would be irrelevant. If they want to maintain a property outside their constituency, that's up to them.

Scandal of MPs' expenses worsens

Oops, Jacqui Smith's husband - paid £40,000 as her researcher even though they apparently live in different homes most of the time - included a couple of adult films in her claim.

But they're just the tip of the iceberg.

The Sunday Express has seen the documents that show Ms Smith has claimed for virtually every major household item over the past five years, right down to the kitchen sink.

It was a £550 stone model from Habitat. The minister, who earns £141,866-a-year, even claimed for an 88p bath plug.

She had already spent £460 on a dining room table, £704 on a sofabed, and £1,000 on an antique fireplace. She claimed for the cost of coal to burn in it.

Other items included a Hotpoint cooker, at £399 plus £15 connection, a Hotpoint tumble dryer worth £189 and two washing machines in under two years, a £249 Ariston and a Zanussi worth nearly £300.

Her entertainment centre was to include DVD players, two Samsung widescreen televisions and two digital set-top boxes worth more than £1,100.

Clearly trying to maximise the family income, no wonder this disgustingly greedy pig voted to keep MPs' expenses secret.

She knew just what she was doing, and has been aiming to leave herself comfortable when she loses her seat at the next election.

These claims start to put her choice of her 'main home' into context. They are far more repugnant than her husband charging a couple of films. That was accidental, the high class fittings are deliberate purloining of taxpayers' money.

Labour MP Harry Cohen - a left winger and supposedly therefore an egalitarian - has been defending his second home claims.

The Labour politician with the highest expenses claim of any London MP has denied that he was cheating taxpayers by claiming a second-home allowance while maintaining that his main home is a single-bedroom schoolhouse and seaside caravan 70 miles from his constituency. ...

Mr Cohen has claimed every single penny of the maximum £104,701 in Commons expenses in the past five years for his £375,000 property in his Leyton and Wanstead constituency in East London, on the basis that it is his 'second home'.

So his 'first homes' are actually further from the Commons than the second home he claims for.

Ms Smith and Mr Cohen deserve to be pelted from public life with rotten tomatoes. Sadly it probably won't happen.

Collapsing in his internal contradictions

Charles Grant probably aimed to make a case for other EU countries bailing out eurozone members in danger of defaulting, concentrating on Greece.

The first part of his article puts a compelling financial and economic case why no one should lend Greece a bean. Wages up, state borrowing out of control, industry in the wrong sectors. Fear of street protests has deterred Greek politicians from taking serious steps to bring order to its public finances or to shake up its sluggish economy.

Politically, says Grant, a bailout would be attractive. Few Greeks would want to leave the euro; and if one eurozone country left, there would be a wall of speculation against other weak members. So better hold the line and not risk the Lehman Bros effect.

But then he turns on himself.

Greece would have to implement painful spending cuts and structural reforms. Is the Greek political system robust enough to swallow such bitter medicine? There would surely be huge demonstrations against austerity and perhaps calls to quit the euro.

Would they accept measures at the behest of the IMF or the EU, but not from their own politicians?

Don't believe it. We are not talking tweaking here, but major shifts over a prolonged period, by a country whose politicians lied about its economy to smuggle it into the eurozone in the first place.

If the EU provided the money, it might suit them politically for the IMF to write the conditions. But Greeks can read. They would know full well what was happening.

Eurozone voters can read too. Would you want your taxes to go to supporting a profligate economy, with questionable prospects of ever getting your money back?

This parrot is surely deceased.

Tony McNulty anti-fraud minister!

In larger cases of benefit fraud, statements are regularly issued in Mr McNulty's name.

Here's the latest, from the Northampton Chronicle & Echo -

Anti Fraud Minister (sic) Tony McNulty said: "Benefit thieves have to understand that they will not get away with it.

"Working together with local authorities and the police we have a strong range of powers to investigate and with the support of the public we bring benefit thieves to justice.

"When people commit benefit theft, they face imprisonment, fines and other penalties. We will also make sure they pay back the money they have stolen from the taxpayer and seek to ensure any proceeds from their crime are confiscated too."

German hegemony raises its head

Commentators are debating whether the financial crisis may provide an opening for closer integration of the eurozone, with Germany providing financial assistance to troubled economies. This blog has argued against this scenario, on the grounds that German voters would never pay the price even if the German economy could afford it; and if they did stretch to it, they would be bound to attach conditions; and the other countries would rail against what they would see as the return of German hegemony.

Open Europe today mentions a report in the Irish Times that German Foreign Minister Frank-Walter Steinmeier is considering financial assistance to struggling EU economies as a way for Berlin to "consolidate its position [in the EU] for years to come". The article reports that a new working group will soon decide which countries should be offered help, which has noted that Germany has "much to win" from such assistance.

Leading members of Mr Steinmeier's own Social Democratic Party (SPD) have gone further, says Open Europe, indicating that any assistance to Ireland would require "greater humility" from Dublin and a renewed commitment to the EU from Irish voters in a second Lisbon Treaty referendum. Axel Schäfer, SPD Parliamentary Spokesman on European affairs has said it would be "irresponsible" to discuss aid as long as Ireland does not require it, but he insisted that any possible help would be "conditional on obligations in the European context".

In a leader, the Irish Times notes that "in the interests of the whole system German leaders are willing to respond; but they are determined the policy outcome should be shaped to suit themselves".

Inflation rises

The BBC has it that "key inflation measure hits zero". How much more agreeable for the government than the Sky News take of "shock rise in rate of inflation".

Of course they're both right. Mr Brown's preferred CPI is up - imports are becoming dearer thanks to devaluation - while the RPI is down thanks to the artificial slashing of interest rates.

Guess which measure he'll prefer now.

Yes, inflation is rising. Mike Denham has the breakdown. As he points out, and as Liam Halligan has been saying for ages, there is no deflation.

Brown will turn out to have been the worst chancellor in British history.

P.S. Andrew Neill has written a classy piece about the inflation numbers.

Further update - the BBC now leads on "surprise hike in consumer prices".

Splitting the anti-EU vote

Members of the imploding UKIP are becoming fixated on the activities of the splinter UK First Party, which will contest the European elections. They will not be UKIP's main opponents.

Also on the ballots will be Libertas. They will no doubt set out to attract the eurosceptic vote, even though they're not actually anti-EU - they advocate an EU which would be (more) democratic, though so far they are refusing to say what they mean by this or how it could be achieved. The effect, though, of strengthening the EU's democratic credentials would be to increase its legitimacy and therefore possibly EU integration. It's hard to see what sectors of UK voters this proposition would attract, with its vague theme offering ambiguity in outcomes.

This week's Daily politics poll shows more support for the EU among ABs than among lower "social grades".

In answer to the proposition "Britain benefits overall from membership of the European Union in terms of jobs and trade", 50% of ABs agreed against 47% who didn't, while among DEs only 35% agreed, while 58% didn't.

Among the social grades, only ABs disagreed that "Britain should leave the EU but maintain close trading links".

On a regional basis the majority for leaving the EU was highest in Wales and the South West (62% v. 35%), and lowest in Nigel Farage's South East, where the margin was 51% v. 45%.

Of course the anti-EU BNP has its greatest appeal among the lower social grades. They will also be targeted by union leader Bob Crow, who is launching a new political party today. No2EU - Yes to Democracy will only fight the European elections. If this anti European party win, candidates will refuse to take up a seat in the European parliament, take a salary or claim any expenses.

This doesn't suggest they would be influential, but it does suggest a certain purity, and may well attract anti-EU voters disenchanted by tales of UKIP on the gravy train, which we will doubtless hear much more of as the European election approaches.

Perhaps preference votes will turn out to be important.

The Heartland amateurs

Booker and North are keen to tell us that the 2009 International Conference on Climate Change on the theme "Global Warming: was it ever a crisis?" was a conference of proper scientists. Indeed. And there were hommes d'affaires, among them the redoubtable Booker himself.

Both men lament the paucity of press coverage. One can only say that the conference organisers do not seem to have made it easy for the media to report them - or indeed for the rest of us to find out what went on.

North refers us to "the proceedings of the New York conference ... admirably summed up in American Thinker blog". Marc Sheppard's dense summary is interesting, but his gobbets have very little context and there is no attempt to tease out themes of any of the four tracks - palaeoclimatology, climatology, climate change impacts, and economics and politics. As the tracks ran in parallel, this would naturally have been beyond one man.

We can see the conference agenda here, offering us powerpoints of many of the contributions, and recordings, html or PDFs of a few. Accessible, huh? We learn for instance, that Piers Corbyn spoke on "What Does and Does Not Cause Climate Change". Clicking the powerpoint link for this one talk produces 36 slides. While the concluding slide is interesting (if overcrowded), others rapidly lost this layman.

Nothing wrong with that in itself. Corbyn was a scientist talking to scientists. But where is the two paragraph summary telling me in layman's terms the key point he had to make and why it was significant? At least Corbyn provides the powerpoint summary, while for Booker's talk - and he is a professional communicator - we are offered no summary at all.

I think it was Sununu who urged speakers to provide the media with soundbites. Well, in those terms the conference was a spectacular failure.

One Bob Carter blogged from the conference, and his introductory piece is here, while his daily summaries are here, here and here. He gives a good flavour of the plenary sessions, but again he could not attend all four parallel tracks.

Carter also provides a link to Joanne Nova's Skeptic's Handbook, which seems to be a work in progress. This gives a helicopter view of a few main points of the debate, and is a good place for new readers to start. One speech certainly worth enjoying is Monckton's crowd pleasing closing address - one may imagine that delegates left fortified and fulfilled.

But if the conference was about speaking to the wider world, it was a failure. There was evidently no systematic effort to get digestible versions of the main points out day by day. Am I just being lazy? No. I have spent quite some time clicking and reading and reading and clicking and puzzling.

The organisers should not judge their conference a success. The messages were important, and many of the truths imparted could have been understood by laymen.

If this conference is repeated in 2010 - and I hope it will be - the organisers should assume right at the start that mainstream media coverage will be minimal. Write the press summaries of each track and day before the conference starts, and get them out promptly in digestible formats.

If they cannot think of anyone who can do that, an email to Sununu would doubtless produce the names of several expert communicators.

This light is too important to be hidden under a bushel.

P.S. They messed up last year too on the Manhatten Declaration.

HBOS what ifs

Iain Martin has a useful piece pointing out that both the big failed banks - Bank of Scotland and Royal Bank of Scotland - were Scottish. He also points out how desperate Gordon Brown was for HBOS not to go down ahead of the Glenrothes by election.

Well, it seems to have been the oddly silent Sir James Crosby who set the merged HBOS hurtling on its road to doom. But Bank of Scotland sought a partner because it had expanded as far as it could.

How would an independent Scotland have dealt with the banking collapse, asks Jim Pickard on the FT's Westminster blog. Most of the suggestions seem to be wishful thinking. Certainly Scotland's Darien financial disaster is being talked of more these days.

One answer is that Halifax would probably have taken over Bank of Scotland and moved it south anyway. If Fred the Shred had laboured under an independent Scotland's regulatory system that was tougher than London's, he would have unhesitatingly threatened to move south too.

Back at the coal face, Paul Moore is contesting much of the FSA's February statement. Individually his contentions are not dramatic. But if they turn out to be true, it will suggest at the very least continued sloppiness at the FSA.

HBOS: it wasn't just political pressure on the FSA

In mitigation of the FSA's failings in regulating, Adair Turner among others has pleaded that politicians put it under pressure to regulate banks with a light hand.

But evidence is emerging that the FSA was (also?) plain incompetent.

HBOS was one of only two banks (the other being Barclays) that was given "advanced IRB status" under Basel II guidelines - the laws balancing risk exposure against capital reserves - which allowed the bank to police itself and carry out its own financial "stress testing" without regular FSA inspection.

More in the Sunday Herald, which calls this "an extraordinary lapse by the UK regulator" and says it happened "after FSA inspectors had carried out extensive work and given the bank the all-clear, allowing it to continue to monitor itself".

The HBOS rescue in pictures

The FT's Westminster blog has a cracking pictorial representation of the HBOS 'rescue'.

Enjoy!

Breaking welfare dependency

A cracking set of pieces this weekend about welfare dependency, the reasons for it, and how to crack the cycle.

Glasgow Labour MP Tom Harris leads off with an article in the Mail with the long title Why is it 'Left wing' to allow millions to live on benefits and let children get each other pregnant, asks the ex-minister who broke Labour's last taboo. From a Labour politician it's a ground breaking piece, concentrating on the social and moral breakdown that the structure if welfare benefits has caused - read it in full.

Fraser Nelson has followed it up in the News of the World and a Spectator blog. He points out that a girl leaving school without qualifications can get far more money through being a single parent than she will from the sort of jobs that will be open to her. The disparity is huge.

Hence also (though he does not make this point) the huge temptation of benefit fraud. It's remunerative, you're not likely to get caught, and if you're unlucky the punishments are often minimal. Benefit fraud, as I've shown on my benefit fraud blog, costs us at least £2bn every year.

Fraser commends James Purnell, who "has moved to tackle child dependency, stopping it when the youngest child is 12. He wants to lower this to age three (like the rest of Europe)."

Make work pay, says Fraser. Take all low-paid out of tax. Make it worth while for people to take low paid jobs rather than live off benefits.

Comments on Tom Harris's article raise some interesting points:

• Each time I started a part-time job I found It cost me more in lost benefit than I gained in wages.
• Since the baby bonus was brought in here in Aussie there has been an increase in the number of teenage girls getting pregnant and they blow their cash hand-out on a plasma TV or a car or something and do not spend it on the baby as they are supposed to. There should be no benefits at all for unmarried mothers, just let their families support them or else give the child up for adoption. Why should I pay taxes to support someone else's lifestyle choice?
• Child benefit should not automatically be paid out and if it is it should be for one child only. If welfare benefits stopped so would the huge majority of teenage pregnancies.
• Before the girl can get full benefit she should have to disclose the name of the father. Then take half of his benefit towards hers so that she and the child get the full amount but the father only half. This happens for those working who find the addition of a child to be expensive so why not make the shiftless do the same. When a youth has to divide his own benefit between two or three others who have had his children, perhaps he will think again before starting any more.
• As for child pregnancy, cut the benefits and free flats and put the responsibility as it use to be on the parents. If they have to pay they will soon put a stop to it.
  
• Society and governments must find a way to differentiate between those for whom a life on benefits is a choice and those who have worked hard for years then been thrown on the scrapheap by redundancy. ... The DWP should be focussing on those who have never had a job in their lives, and treating hard working people who have lost their job through no fault of their own with a little more respect. Absolutely, and Frank Field has been hammering away at the same point.
• Its about time the system was changed to echo that of the Southern Irish; you can't take out what you haven't put in, or in other words, you need to pay in to the "social fund" for 5 years before you can claim...for anything! Sound good??? Not difficult to do and would get rid of these parasites in one sweep!
• I have the misfortune to have a 16 year old daughter who has a 4 month old son. ... shortly after the birth we are called by her appointed social worker (due to her age ) he was there to facilitate her housing needs and help with her benefits applications plus organise liaison with the birth father . Poor man was appalled when she said she was staying at home with her family didn't want her own home, was carrying on with her education and wanted to get a part time job.
• No benefit system that allows you to be better off not working at all than working full time for minimum wage can possibly be right. The maximum job seekers benefit anyone should be able to earn should be equivalent to 35 hours per week at minimum wage minus 20p per hour. And it should be taxable and they should have to pay their rent and council tax out of it.
  

The Tories doubtless have no votes to lose among the scrounging classes. But they probably have plenty to gain from a robust set of policies against benefit scroungers.

Should it be so hard to draw a line in the sand over child benefit? Start by stopping it at age three for children born after the end of this year. No preferential treatment for single mothers over people actually working in low paid jobs who do things in the right order.

And don't reward single parenthood more than the traditional two parent family.

Lesser expectations

Peter Oborne and Matthew Parris both suggest that the Tories are going to give up triangulation and move more into conviction politics. There's - um - little evidence of that so far. But can two such articles by commentators sympathetic to the Right be a coincidence? We'll see.

Oborne in particular stresses the absolutely dire condition of our state finances.

The depth of the slump is so great that there is no chance we will any longer be able to afford the generous welfare state, public services and lavish overseas spending commitments which make up an annual budget of £600 billion. ... The long, benign upward trend - which continued through the so-called 'cuts' of the Thatcher years - is about to end, and in a vicious and unpleasant way.

Government needs to spend far more effectively. At the margins - and this is only marginal stuff - they need to axe spending on consultants and fancy IT initiatives.

They should also axe wistfully high standards. Grant Shapps has tentatively shown the way with his proposal to ease social housing standards. This would be temporary. But £600bn of state spending says we are going to need plenty of boldness on these lines.

It is all very uplifting for Matthew Parris to write that politics is about vision, not management. Getting elected is about vision, not management. But governing is about delivering the vision.

And here ministers have no choice but to get down and dirty with the detail. The bureaucracy is hardly likely to be stuffed with civil servants sympathetic to slashing state provision and delivering what remains in a cheaper, more rough and ready way to a lower standard.

The second rank of Conservative ministers will have to be hard nuts driven to deliver these unpalatable results over the squeals of the bureaucracy.

Yes, this will mean sharp deregulation. Not of banks - obviously. But the case for deregulation over wider stretches of the economy will become increasingly unanswerable. We just won't be able to afford unnecessary regulation. Here too we will require ministers who can nut the bureaucracy and actually deliver.

Grant Shapps' tentative step points in the right direction.

More on HBOS

Vince Cable is asking for government documents relating to the Lloyds takeover of HBOS to be made public.

There are claims that HBOS employees were mis-sold company share schemes.

The Accord union has appointed lawyers to investigate whether the banking group, now part of Lloyds, breached Financial Services Authority rules in its advertising, which encouraged thousands of staff to sign up to the share scheme.

Peter Cummings, whose division caused most of the recent £10bn of losses at HBOS, has started receiving his pension of £5,000 a week.

Directors who were running the banks Northern Rock, HBOS, Royal Bank of Scotland and Bradford & Bingley when they were rescued by the taxpayer should be disqualified from sitting on company boards, Nick Clegg says. Well, they should certainly never be directors of companies in the financial sector ever again. And would any shareholder ever trust them to be worth while Non-Executive Directors?

Maybe the FSA should ban them from directorships in the finance sector, which would also be a good way of publishing a convenient list of names.

In a world of their own

Mr Brown goes to Washington and appeals for help to save the world. And back home Lord Mandelson has been speaking: "We are right to continue stabilising and repairing the banks. We are also right to refuse to retrench on vital spending in the teeth of falling national output."

He described the Government approach as "industrial activism" rather than "state intervention" and said Britain would fight its way back by focusing on strengths in high-tech manufacturing, aerospace, the automotive industry, biosciences and precision engineering as well as becoming the world's strongest creative sector.

Kate Winslet's Oscar win was "just the beginning" of Britain's global creative dominance, he said.

What planet are they on? I'd almost prefer it if they were setting out to pull the wool over our eyes. But I fear they've talked to each other so much in their own little group that they actually believe this stuff.

David Kynaston describes in Austerity Britain how post-war Labour ministers really believed they could improve people.

What with Lord Mandelson and the socially inept control freak Brown, it seems that we are back there again. More left wing politicians sincerely puffed up with their own importance.

Stupid quote of the day

If you are made redundant after the age of 50, you stand more chance of dying than ever finding another job.

Well, yes.

Where does the buck stop?

Politically correct social workers withheld information from foster parents about a teenager they placed with him. He raped their two-year-old son and molested their daughter aged nine.

So have we seen immediate naming and sackings? No.

Transport police don't get the money issue

Two members of the British transport Police drank a bottle of Vimto they found. Yuk. They were fined £400 each for breaching police rules. Quite right. Police can't help themselves to lost property.

But the investigation was costly. A legal source is quoted as saying:

There is a very strict procedure the Crown Prosecution Service has to go through when considering whether to bring charges and it can be a drawn-out affair.

The subsequent police internal investigation would also have been a drain on the public purse.

The officers wages for 18 months would have amounted to around £100,000 so it would not be amiss to estimate the total cost somewhere around £200,000.

British Transport Police say:

The integrity of officers is paramount in maintaining public confidence and any failure to uphold our high standards will always be treated seriously.

As usual, lawyers and police miss the point. This is taxpayers' money they are thoughtlessly frittering away.

If they can't manage our money property, let's find some people who can.

More HBOS detail

The payouts to former executives of HBOS are being investigated by Lloyds Banking Group and UK Financial Investments, a body of the government that oversees its bank stakes, as to whether the payouts are legally necessary. David Waller, a UK Financial Investments spokesman, says that the thorough legal assurance process is almost complete.

There's no news which changes the overall picture of what happened at HBOS. The former retail banking chief there who left suddenly in mid-2007 says HBOS had got its risk profile wrong.

And Paul Moore claims he repeatedly called for a review of corporate bond fund selling practices in 2004 after a boom in sales. He says that his call for a review was ignored by Jo Dawson, who ran the sales force, until the FSA specifically required the bank to look into corporate bond sales.

Of course Jo Dawson replaced him when he was sacked. Moore says:

As the yields went down on standard deposit accounts, many customers were switched into corporate bond funds and [the Group Regulatory Risk department] and I were not confident that customers who were switched out of deposit accounts into CBFs would really understand the additional risks they were taking on and we wanted to ensure they did.

What was clear was that the advisers were strongly targeted to sell CBFs to deposit account customers whose deposits matured and the margin HBOS made on CBFs was very much higher than on deposit accounts.

This obviously increased the incentive to sell them.

Mr Moore also said he raised concerns over the potential misselling of payment protection insurance at HBOS.

You can see why he got up the noses of those behind a sales driven culture. But Compliance are paid to be the watchdogs.