Benefits could offer a solution to the MPs’ allowances scandal

Benefits could offer a solution to the MPs’ allowances scandal. Commentators have agreed the system needs to change, but many are unsure how to amend it to ensure fair reward.

Dr Simon Draycott, a business psychologist at Mendas, said the allowances should not simply be withdrawn, because that would fail to address why MPs had begun abusing the system in the first place. “MPs are seeing these allowances as their right to claim,” he said. “This may be because there is a sense of imbalance between the effort they are putting in and the reward. They are looking around and recognising their pay is quite low compared to senior civil servants, so they are seeking to redress this imbalance.”

But consolidating expenses into salary could fall foul of the law of unintended consequences. Clive Grimley, a partner at Barnett Waddingham, warned that if MPs added the £28,000 expenses allowance to their salary of £64,700, it would increase pension liabilities by £11.5 million a year.

Brett Smith, a practice manager at Towry Law, suggested: “Maybe it comes down to total reward and looking at what MPs get in total.

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They have a defined benefit pension. It may be appropriate to focus attention on this so they are not tempted to diddle allowances.”

A flexible benefits scheme may be another solution. Draycott said: “It does not mean spending any more on rewards, just that the individual can ensure reward means something to them, and motivates them.”