April 7, 2009

The MP expenses scandal: Why it matters

The scandal of the UK MPs and their excessive expense claims has reached a new crescendo, with fresh details including the news that a senior minister claimed for porn films and a bath plug and that MPs are able to not only profit from the sale of their government funded properties but that they are also able to claim back the detested ‘stamp duty’ property sales tax that they have imposed on their constituents.

For a good summary of some of the juicier details, here is The Time’s list of the 10 most outrageous expense claims ever: http://tinyurl.com/c7kf7y . Personally, I think that they missed a few that should have also been there.

We resist the temptation to comment every time the media goes nuts on the issue. However, we do thing that it’s pertinent to remind ourselves why this is important:

“There is strong correlation between corruption and poverty.” Transparency International, the global coalition against corruption.

“Each penny taxed which is not spent properly is a theft from the people.” Gustav Moller, creator of the Swedish welfare state.

In other words, if our esteemed MPs have got it into their heads that their role implies an invitation to line their pockets to the greatest extend possible, then they are unlikely to be doing the job of looking after the interests of their constituents effectively.

But there’s more. When the constituents witness the money grubbing of their elected leaders, they will be disinclined to contribute tax dollars to a system that they view as being corrupt. And so the spiral continues.

What can you learn from this as someone responsible for managing a workforce? To avoid the same effect in micro format in your organisation, apply some common sense: It’s fine to assume that employees will do the right thing, but make sure that everyone knows the guidelines. Set an example at the top of the organisation. And above all, be fair.