MPs’ expenses… oh, the irony.

When I joined IBM in the mid 80s, there were plenty of alternative interpretations of the corporation’s three-letter name. Customers with particularly pushy salesmen said it stood for “I’m Bloody Marvellous”, while those with particularly slow mainframes preferred “It’s Better Manually”… and so on. Oh, and if you want a genuine example of ‘pushy salesman’ behaviour: I was once assigned, as a junior systems engineer, to a salesman who took the time to explain to his (financial services) customer that IBM called its customers “customers” because “only banks and whores have clients”. Quelle finesse.

Internally it was often reckoned to stand for “I’ve Been Moved” – so widespread was the corporate culture of “assignments”. This was the process of relocating employees, usually to work in another country. It was reckoned to be a great deal by most IBMers, because – apart from the obvious attraction of seeing the world, broadening the mind, etc. – your move was paid for and the assignment usually came with generous financial allowances (and sometimes, if appropriate, a temporary promotion). I tried a couple of times to swing an assignment, once to Rome and once to Stuttgart, but never pulled off anything more spectacular than a stint in Basingstoke. How sad is that?

By the time I was a little more savvy about how to approach that kind of negotiation, Lou Gerstner had taken over and, astounded at the corporation’s willingness to send a few dozen people from Tokyo to the US on assignment, while simultaneously sending a few dozen in the opposite direction at similar expense, had done much to stamp out this entertaining but ultimately not terribly profitable practice.

Anyway, I digress through all this ancient history merely to note that assignment allowances (such as the one I got as a sop for my three-year stretch in Basingstoke) came with a number of conditions:

  • they were taxable income, and were treated as such through the PAYE system;
  • the taxman insisted that an “assignment” should have a duration of no more than 3 years. Any more than that and it was considered to be a permanent job move, and the employee had to be remunerated by some more conventional mechanism.

It’s odd, isn’t it, that the taxman is not allowed to take any equivalent level of interest in MPs’ allowances.

Wind forward to 2008, and I was finally caught by one of the ‘reductions in force’ which had preiodically swept through Sun throughout my time there. With the P45 came a redundancy payment, and under UK law the employer has to deduct tax at source on any of that which exceeds £30,000.

It’s odd, isn’t it, that the “winding-up” payment an MP receives if they lose their seat does not have the same condition applied to it.

The irony, then, is that every MP who gets the boot because of constituents’ rage at the expenses saga will, as a result, get a tax-free redundancy cheque for £42,000.