Saturday, May 30, 2009

A Sense of Proportion

It's hard to get away from the subject of MP's expenses nowadays, especially if you, like me, read The Telegraph. Many people I've heard discussing the matter over the last couple of weeks have said "They're even worse than bankers" - is this the ultimate insult?

So I started wondering if this were true.

Over the course of the last few hours, I've worked through a part of The Telegraph web site covering their review of expenses.

Now where you draw the line depends on your own moral judgement and the information available. Where I judged a claim "dodgy" I put it in my spreadsheet. There were many I couldn't make a call on, either because there was insufficient information on the cost or on the nature of the claim from the information on the Telegraph website (there's just one of me; they have dozens working on this).

But I came up with a total of just under £1.5m. I expect this is on the low side: probably two to three times this would be a truer figure.

Then I looked up just one dodgy banker's payment: Fred the Shred's £16m pension pot. And I put these figures into the chart below.

It seems to me that in the furore over MP's expenses, we've lost our sense of proportion. Let's make it clear: I am not making excuses for any of the MP's dodgy claims, but even if we doubled the amounts of MP's' dodgy claims, they would still be dwarfed by just this one banker. The sensible MPs have admitted they got it wrong and apologised and may face further sanction in some cases. The dodgy ones are in many cases still dodging.

But all the MPs' dodgy claims put together look like being well under what Fred the Shred snaffled quite legally. And he's just one banker. Take all the dodgy bankers (a small proportion, I know) and they've made off with staggering amounts of cash while ruining the western economies. The dodgy MPs have cost you and me each a few pennies. They are pennies that by rights ought to be yours and mine, but they are pennies. The dodgy bankers have cost you and me each tens of thousands of pounds.


Cathryn said...

A chart is worth 1000 words.

Alex said...

You aren't comparing like with like. Sir Fred's pension (I hasten to add I am not a fan) is an accumulation of rights that were earned at RBS and transferred in from previous jobs. He was the partner at ouche Ross in charge of the BCCI administration.

Secondly, although he made errors (along with the rest of his board and his regulators), his pension rights ae either wha he was entitled to under his contract or what others granted to him, not amounts that he claimed the way tha MP's paid their expenses.

If you wanted to compare like for like you would have to show thet total value of MP's expenses and allowances (c. £100 million) for the next 25 years, or £2.5 billion and then some after allowing for inflation.