Monday 23 March 2009

When not doing wrong is not necessarily right

So the Minister of State for Employment and Welfare Reform , the Right Honourable Tony McNulty says he has done nothing wrong by claiming some £14,000 a year Additional Costs Allowance (ACA) on a second home in his Harrow East constituency, some 9 miles from his main residence in Hammersmith.

He might believe that he has complied with the letter of the law and done nothing illegal - but he is morally in the wrong by accepting these additional allowances.

He must have known something was amiss as he stopped claiming the ACA earlier this year "because interest rates had fallen so far that he was able to meet his mortgage commitments from his MP's salary" - an MP currently receives £63.291 per year (Members Series: Fact Sheet M5 - Members’ pay, pensions and allowances) which in McNulty's case is topped up with a Ministerial entitlement of £40, 759 (Members Series: Fact Sheet M6 - Ministerial Salaries), giving an annual salary of £104,050.

When confronted by the Mail on Sunday for the article published yesterday , in a bizarre bid to deflect criticism, McNulty called for any MP within 60 miles of Westminster to be banned from getting the handout.


The history of the case appears to be that Mr McNulty lived with his parents in the house in Harrow East until his marriage to Christine Gilbert, the chief inspector of schools, in 2002.

He then moved into the home Ms Gilbert owned in Hammersmith, itself only three miles from the House of Commons, and this is considered his main residence.

So why is he claiming ACA for the house in his constituency? When asked on Sky News' Sunday Live why he was claiming expenses on a property where his parents live, Mr McNulty said: "I use it considerably. I work there at weekends when I am in the constituency." Yet he has (and in 2006/7 claimed £20,000 for) an office that is just round the corner.

ACA is meant to help MPs whose constituencies are a long way from Parliament to fund a London base, a perfectly reasonable aim. But should this also help London-based MPs? Those of 25 proscribed inner London constituencies (including the MP for Hammersmith and Fulham) are not entitled to the ACA but receive a London Supplement of £2,916. MPs in the outer London constituencies can elect either for the London Supplement or the Additional Costs Allowance.

The Green Book 2006:Parliamentary Salaries, Allowances and Pensions (follow link from here) is the bible on such matters, and some relevant passage are posted below.

3.1.1. Scope of allowance
The Additional Costs Allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight away from their main UK residence (referred to below as their main home) for the purpose of performing Parliamentary duties. This excludes expenses that have been incurred for purely personal or political purposes.

3.3.1. Principles
You must ensure that arrangements for your ACA claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. Members should bear in mind the need to obtain value for money from accommodation, goods or services funded from the allowances.

3.3.2.
You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds or that public money is being diverted for the benefit of a political organisation.

So how can McNulty claim he was doing nothing wrong? The expenses and allowances are meant to be above reproach and there should be no suggestion of a misuse of public money. Neither of these case appear to met in the claiming of ACA.

[More information on Tony McNulty can be found on the "They Work For You" website.]

Wednesday 18 March 2009

The REAL Financial Crisis

Today is the 10th anniversary of Tony Blair's visionary Beveridge Memorial speech where he committed the Labour Government to eradicating child poverty within 20 years. But at present 1 in 3 children are currently living below the breadline

In an article in the Guardian G2, Amelia Gentlemen gives a portrait of 21st-century child poverty.

The chilling indictment is that some of Louise's problems arise from the £7 a week repayment of overdraft charges to LloydsTSB.

When she was still battling with bank charges imposed every time she went overdrawn (which was every week), she would she has to make do without meals herself because there wasn't enough food for herself and her 2 children.

She is now slowly paying of a debt of £600 of fines and charges. In addition, she no longer has a bank account and now only deals in cash.

At £7 per week, Louise will be paying off this debt for the next year and a half. Something chief executives of banks SHOULD be mulling over as they accept unacceptable bonuses and pension pay-outs.

And what can we do? Perhaps we should start by re-reading the July 2006 report and findings by Donald Hirsch to the Joseph Rowntree Foundation, "What will it take to end child poverty?",
which concluded:
"that, to make further inroads into child poverty, the Government will need to extend its policy of increasing redistribution to low-income families, but that this will not be enough on its own to meet the targets. In addition, this will require parents to fare better in the workplace, with improved pay and opportunities. Long-term policies working in this direction include better education and training for disadvantaged groups, improved childcare and the promotion of equal pay for women."

The same author in his recent study for the JRF, "Child poverty in a changing economy" (February 2009) , updates and revises projections of child poverty in 2010 and 2020.

He states:
"Despite tough times ahead, there is still political consensus around the goal to end child poverty. Based on new projections taking account of the recession, the Joseph Rowntree Foundation has updated its assessment of what it will take to meet the government targets to halve child poverty by 2010 and eradicate it by 2020."

One of the key points is that projections based on current policies suggest that child poverty will fall from 2.9 million to 2.3 million by 2010 – 600,000 short of the target.

To meet its target for 2010, the Government will have to invest an estimated £4.2 billion a year in benefits and tax credits above its present plans. The allocation of an additional £2 billion since 2006 has been offset by an unexpected rise in child poverty between 2004 and 2007 and the increased costs of the recession.

By 2020, without new policies to help low-income families, child poverty is projected to rise to 3.1 million.

We've found money to help the banks - indeed last October £17 billion was injected into the very same LloydsTSB Bank that causes Louise such financial hardship. Why can't we do the same to assist those like Louise who face REAL financial difficulties