Political expenses scandal

The great shaming of Parliament

It has taken an almighty crisis for MPs to start cleaning up their act

POLITICIANS who were dreading the day when their exploitation of Parliament’s lax expenses regime would be exposed may have consoled themselves that at least it would all be over in one go. Hundreds of thousands of mortifying pages detailing their claims since 2004 were scheduled for official publication this summer, despite the tenacious resistance of parliamentary authorities in the courts.

In the end, though, the revelations came in agonising stages. The Daily Telegraph obtained the leaked data and, on May 8th, began to publish it. The first to be exposed were ministers. Another batch of Labour politicians followed before the spotlight shone on front- and backbenchers of the Conservative Party. By the time the Liberal Democrats’ turn came round on May 13th, Parliament was on its knees.

The purchases dubiously claimed by MPs ranged from dog food and toilet brushes to thousands of pounds’ worth of home improvements. Much of the nest-feathering took place under the so-called second-homes allowance, worth up to £24,000 ($36,000) a year to MPs who require accommodation in both London and their constituencies. Some “flipped” the designation of their first and second homes in order to be reimbursed for work done on both. A few profited by sprucing up a second home on expenses before reclassifying it as their main residence to avoid capital-gains tax when they sold it.

The reaction of politicians to the great exposure has only slowly and fitfully begun to match public outrage. Gordon Brown apologised for the entire political class on May 11th. David Cameron, the Tory leader, and the Lib Dems’ Nick Clegg followed suit, declaring that colleagues would pay back unjustified claims. Andrew MacKay, Mr Cameron’s parliamentary aide, has resigned over claims his party deemed “unacceptable”; some MPs are returning money; pressure on Michael Martin, accused of an indulgent line on expenses as speaker of the House of Commons, is growing; and reform of the system is now inevitable. An inquiry by the independent Committee on Standards in Public Life, launched after previous scandals, is due to report this year.

But all this came after days of mealy-mouthed denial and obfuscation. Some MPs blamed the media (the Telegraph is said to have paid for what could be regarded as stolen information). Others insisted the controversial claims were technically within the rules, as if those rules were not made by Parliament itself, and as if their spirit did not matter as much as their letter.

Voters, forced by recession to live more leanly, are irate. A Populus poll conducted as the Labour and Tory revelations were being published showed the two parties down by four percentage points each, while the Lib Dems, yet to be exposed, were up by four. And 86% of respondents thought all the parties equally bad on expenses. Britain’s anti-politics mood did not need the boost that the expenses scandal has given it. In April a YouGov poll showed that a third of voters trusted no politician to tell the truth (Mr Brown and Mr Cameron were trusted by only 12% and 21%, respectively, of respondents).

Yet the perverse result of all parties being tainted may be that no party really is. The incumbents are culpable for letting a bad system fester for so long, and Mr Cameron produced a better and bolder response than Mr Brown. But the spectacle of wealthy grandees having their country homes renovated at taxpayers’ expense has done the Tory brand no favours. And the Lib Dems cannot afford to lose their unique selling point as Westminster’s nice guys. Labour, one of whose MPs is responsible for what is perhaps the gravest offence (Elliot Morley claimed £16,000 for a mortgage he had already paid and was suspended from the Parliamentary Labour Party on May 14th), looks the worst, by a bit. But just as the sleaze that racked the last Tory government only amplified the defeat they were already due to suffer in 1997, so this scandal only reinforces the likely outcome of the next election: a loss for Labour, and grudging approval for the Tories.

Amid the din of recrimination, some MPs’ plaintive wails deserve to be heard. British politicians are neither corrupt nor lavishly remunerated by international standards. The revelations were less shocking than many observers expected. Some MPs have shown Cromwellian rectitude; the cynic’s mantra that they are all bad is nonsense. And while much of Britain’s anti-political mood is a justified response to a scandal for which MPs must do penance, some reflects a basic nihilism they can do little about. A popular television satire, “The Thick of It” (and its recent film adaptation, “In the Loop”, with its prescient gag about a politician expensing porn films), is funny viewing but its central conceit that everyone in politics is stupid and malign is all too widely held.

The expenses scandal was born of two traits often found in British public life: a preference for “muddling through” over rational design, and a reluctance to ditch a flawed system until it falls apart in a crisis. As MPs’ earnings fell over time behind those of bankers and family doctors, and as their role changed to include constituency work better done by local councillors, they could have debated, openly and from first principles, the issue of pay and expenses. But rather than risk honest analysis of what MPs are for and what they are worth, they improvised a solution by treating expenses as a way of topping up their income. And instead of abandoning this approach when its flaws came to light—mini-sleaze stories have abounded in recent years—they procrastinated until a crushing torrent of revelations pushed them into action. The failure to act sooner will damage their reputations for years.

The Conservatives in government

A cold coming they'll have of it

The Tories, favourites for the next election, embrace austerity

FAMOUS for its top girls’ boarding school and a racecourse beloved of preposterously hatted blue-bloods, Cheltenham is the kind of town where the recession seems a small war in a distant country. The timing of the Conservatives’ recent spring conference there was as congenial as its setting: at most 13 months remain before a general election that, judging by the polls (see chart), will end the Tories’ prolonged absence from power.

Yet the flatness of the jamboree, where activists were subdued, party staff glad to be absent and the speeches of ministers-in-waiting mostly leaden, almost drove observers to check that they had come to the right place. For David Cameron, the “heir to Blair” who has led the Tories to electability over the past three years, the contrast with Labour’s beatific run-up to its 1997 election triumph must grate.

Much of this reflects Britain’s grim Zeitgeist. Tories know that recession and the rise of anti-politics, stoked by stories of Westminster sleaze, means that loathing for the government does not imply love for its opponents. But some of the Cheltenham glumness reflects a dawning awareness that the next government faces a hard and unpopular slog, dominated by the burden of fixing the awful public finances.

The credit crunch and broader crisis that began in 2007 has often wrong-footed the Tories. Not only were they unconvincing on many specifics (they initially opposed the nationalisation of Northern Rock, a failed mortgage lender, for example), but Mr Cameron’s thriving attempt to rebrand the party as sunny and youthful suddenly jarred with the bleaker times. Lulled like many by years of uninterrupted economic expansion, he took a while to shed a complacently post-economic message which vaunted “GWB”, or general well-being, above GDP and suggested that society needed more fixing than the economy. The Tories persisted with their mantra of “sharing the proceeds of growth” between tax cuts and public spending after growth had stopped.

But the recession has discombobulated both main parties. Gordon Brown, despite a dead-cat bounce after his bank bail-out and fiscal stimulus last year, has seen his premiership mauled by it. (The Liberal Democrats’ deputy leader, Vince Cable, has sounded authoritative but his party has made only slim gains in the polls.)

The Conservatives are now deftly re-re-branding themselves as the party of austerity. Their opposition to a debt-financed fiscal stimulus, and particularly to a temporary cut in VAT (a sales tax), seemed quixotic last autumn. It has since gained adherents, even before the mortifying scale of public borrowing was set out in the recent budget. To the frustration of their core supporters, the Tories have not promised to reverse the government’s income-tax hike for high earners. The priority, says George Osborne, the shadow chancellor of the exchequer, is to undo the planned increase in national-insurance contributions. Taxes may have to go up, he thinks, but increasing those on jobs could kill an economic recovery before it begins.

Some in the party grumble that pundits have been slow to credit the Tories with taking brave positions on the economy. They console themselves that the public seems more impressed. A recent ICM poll showed Mr Cameron and Mr Osborne leading their opposite numbers in government on the question of economic competence by a ten-point margin.

None of this is to deny that the Conservatives have some way to go before their voice on economic matters truly carries. Their pledge to scrap inheritance tax for most households, so popular when it was unveiled in 2007 that it helped make Mr Brown retreat from a snap election he was about to call, now seems indulgent. The Tories have implied that implementing the policy may be delayed; it might make sense to scale it down too (it would raise the individual inheritance tax threshold from £325,000 to £1m, or $1.5m). Nor are they providing details about their approach to fiscal retrenchment. That is understandable: Mr Osborne reminds critics that, had he given in to demands for more precise plans in happier years, he would now be tearing them up. But fine print on which taxes are to rise and which budgets are to be cut will be expected eventually.

There are reasons other than the state of the economy to think that the Tories are shaping up to be sober rather than spectacular. Despite his self-styled affinity with Tony Blair, Mr Cameron has none of the former prime minister’s messianic zeal. In his scepticism towards grand plans, and in the privileged background he shares with many colleagues (a political handicap, confess Tories too canny to believe Britain has become classless), he seems to follow more naturally in the tradition of patrician Tory leaders such as Harold Macmillan. His cautious line on health care, which some say is too soft on doctors and nurses, encourages this view, as does his rejection of a big-picture vision of foreign policy in favour of case-by-case pragmatism.

Not just Supermac’s heir

But this tells only half the tale. Mr Cameron harbours some radical ideas, such as greater choice and competition among schools (see article) and the revival of local government. The theme of “giving power away” seems a neat response to plummeting trust in national politics. And Mr Blair, like Margaret Thatcher, acquired much of his boldness in office; Mr Cameron may do the same. Above all, austerity is its own form of radicalism. Efficiency gains alone will not plug the hole in the budget (see article); the government may have to shed functions altogether. Mooted ideas include limiting eligibility for tax credits, child benefit and other goodies to the poor and, because cuts will have to fall on Tory causes too, perhaps scrapping some defence projects.

Not the soporific “do-nothings” of caricature, then, but the Tories have greater expectations than that to live up to. Mr Osborne is confident that the next election will be as seminal as those of 1945, which led to the construction of the welfare state, and 1979, when free-market economics made its comeback. Bold stuff, but he has yet to outline what profound change in Britain’s political economy he foresees.

Others outside Britain have high hopes of the Tories too. As centre-right leaders elsewhere wobble or fall, many conservative-minded observers may look to a new Tory government for inspiration. Some Tories were giddy recently when their favourite American pundit, David Brooks of the New York Times, cited Mr Cameron’s communitarian strain of conservatism—or “Red Toryism”, in the coinage of Phillip Blond, an intellectual fellow traveller—as the future direction for America’s Republican Party. But this too needs elaboration if it is not to fizzle out like Mr Blair’s “Third Way”. What Britain’s government will look like by the middle of next year is increasingly clear. What the country will look like five years after that is less so.