MPs' Expenses: Execs Are Just as Bad

What businessmen reading the saga of MPs' expenses would be willing to have their own spending scrutinised by shareholders or the public?

Without doubt, politicians have played the system and been on the make, but is the corporate sector so pure?

Pay, pension payments and options of publicly-quoted company directors are now published in annual reports, along with loans and some items like relocation allowances.

But it involves delving into employment contracts before perks such as a pied-a-terre or chauffeur are revealed, and there is no way to discover hotel or restaurant receipts.

As for executives and staff below board level, there is no external disclosure at all.

Compare that with a parliamentary system that will reveal every supermarket bill, taxi receipt and cleaner's invoice for the past four years and for the future. And they will be published in real time, under the Conservatives' interim plan.

In theory companies would not pay to clean a chairman's moat or remove his moles. In practice, much spending that was not "wholly or exclusively" in the corporate interest is passed, largely on the basis that a happy director is an efficient one.

Accounts department questioning of directors' spending is typically as lax as that by the parliamentary fees office. And the accusation that MPs fail to curb each other's abuse because they are "all at it" applies as much to the cosy coterie on remuneration committees.

As for the non-board level expenses, sustenance allowances for being out of town or overnight payments are often negotiated by staff association and paid irrespective of expenditure -- or irrespective of whether the employee actually travelled.

Mileage allowances are seen by many as a tax-free boost to salary. Blind eyes are turned to workers who perform well -- or at least their high expenses are clawed back by lower pay.

Even so, business has lessons to teach Westminster. Companies are used to compensating employees who must travel between remote sites and head office without buying them a second home.

One lesson should be to set sensible budgets that are adhered to; another to demand receipts for everything. Commerce could explain the benefits of central booking for travel, for instance.

But the most important thing MPs must do is change from a culture of claiming everything available to one of showing restraint with other people's money.

Scrutiny of benefits-in-kind by the tax authorities would be one practice to borrow from private enterprise. But the biggest curb on expenditure will be transparency.

MPs will think twice before submitting even a legitimate claim if its revelation would cause embarrassment.

Until now, company directors have been ahead of MPs on many aspects of disclosure: thanks to the situation that politicians have brought on themselves, business is now behind.

Directors and senior executives would be wise to watch what is happening at Westminster -- it may seem ludicrous to publish every claimed receipt, but the way corporate governance has gone it is by no means impossible.