Parliamentary Pay and Perks – Matters Arising

Feature Article of Sunday, 14 April 2013

Columnist: Gyan-Apenteng, Kwasi

The subject of MPs’ pay and other benefits is a topic of hot public interest in all democracies. In the UK, the MPs expenses scandal which rocked Westminster in 2009 is too well known to recount in full but at the core of that trouble was public outrage at expenses claimed by members of the British Parliament, especially for accommodation costs “wholly, exclusively and necessarily incurred for the performance of a Member’s parliamentary duties”. The scandal led to some members from both the House of Commons and the House of Lords going to prison and several resigning or being made to pay back monies illegally collected. It has generally been agreed that the scandal, which led to the 2005 Parliament being described as “rotten” led to a crisis of confidence for Parliament and politics as a whole.

In Ghana, MPs’ pay and allowances took centre stage lately and all indications are that the issue is not going away any time soon. No one has suggested that MPs in Ghana have done anything illegal but the immediate reason for the brouhaha was the disclosure that MPs have received (shock and horror) IN FULL their ex-gratia allowance totaling more than 40 million cedis at a time when the government is struggling to settle pay-arrears for the likes of teachers and doctors. Naturally, MPs defended their right to the money arguing that since part of the amount paid was deducted to defray previous loans, the money could not be said to have been paid in full.

The debate was pitched as a contention between morality and value-for-money. It is both and we need to have a proper adult and non-partisan discussion about it. There are a number of questions that need to be answered; principal among them being whether the payment of the ex-gratia in addition to a basic monthly pay of 7,200 Ghana cedis is warranted. At the very least, we need to know what the money is intended for and whether that purpose is best served by this method of payment. The same can be said of the build-up of other expenses such as for accommodation and resettlement.

Ex-gratia is Latin for “out of goodwill” and ex-gratia payment is defined by the online Business Dictionary as “a sum of money paid when there was no obligation or liability to pay it. For example, a lump sum payment over and above the pension benefits of a retiring employee”. In other words, an ex-gratia payment at all times is a privilege and not a right even when it has been conferred by the Constitution because it is money the recipient has NOT worked for or earned in any way. We can understand why giving this “free bonto” money to MPs would have looked like the right thing to do in the transitional climate of 1992 when the present Constitution came into operation. Is it still the right thing to do? There has to be a reason why such ex-gratia payment to MPs can be justified in 2013 when public sector salaries and other payments have been restructured and rationalised in the years since the first Parliament.

Let us assume that the ex-gratia is a kind of end-of-service benefit paid to MPs. Why should it be paid automatically to all members including those who are still in service? Unless I have completely misunderstood the situation, every four years, ALL members of Parliament are given an ex-gratia payment that can best be justified as an end-of-service benefit. Would it not be more morally justified if that payment was made only to MPs who are retiring from Parliament? Another point: all MPs receive a housing allowance said to be 50,000 Ghana cedis to help them find a place to live. This makes sense because the majority of MPs come from outside the nation’s capital where Parliament sits but since the allowance is not means-tested the same sum is paid to all MPs irrespective of their personal circumstances and needs. Thus, whether the MP is a youthful recent graduate or a serial polygamist who is the father of many children, they receive the same amount for accommodation. Question: is this fair and equitable? Question: Do Accra MPs receive this allowance too? The question of MPs “second homes” was one of the most contentious issues in the UK scandal because it was claimed by MPs who were not entitled to it and grossly abused by some who did. Should MPs who come from Accra also receive a housing allowance to find accommodation in Accra? We have to assume that MPs were not homeless before getting elected into Parliament or must they necessarily have to change their living quarters just because they have become MPs?

And another question: do ALL MPs receive in the ex-gratia package an amount described as “re-settlement allowance”? What does the resettlement mean? These people are neither refugees nor internally-displaced persons; they are honourable men and women who after the privilege of serving their constituents, are presumably going back home. So how are they going to be “resettled”? This is an important point because in the course of their tenure in the House, MPs are expected to visit and interact with their constituents on a regular basis. If they do this as expected, why are they being “resettled” in a place they have never truly departed from? Can these “resettlements” be legal where there is no resettling to do? Members of Parliament are public servants and we must ensure that they do not become a class apart from the people they are representing. No one begrudges MPs the special privileges they receive in the course of their work but there has to be a democratic principle implicit in the social contract that enjoins them to understand the pressures to which their constituents are subjected in their lives.

Here is an example: Why can’t MPs arrange their own mortgage just as other people do? Indeed, even the ability to arrange a mortgage in Ghana is a rare privilege given to a small minority of people. Is it too much for MPs to be allowed to go to a bank to arrange their own mortgage, or should the privilege of a cool GHC50,000 housing allowance be granted to all public servants? The above are among several questions that we must examine if public confidence in Parliament and politicians in general is not to be completed eroded. However, in the course of the recent public upheaval, several MPs were heard in the media displaying considerable annoyance that “We the People” dare raise these issues. One MP was particularly strident in denouncing the Public Affairs Division of the Parliamentary Service for not “explaining” to the public that the ex-gratia went into paying loans contracted by MPs already. She appeared to fall into the category of people who seemed to think that questions asked about MPs pay and perks are about procedure and process. In fact, they are about morality, equity and value-for-money. In the course of her spirited defence, the MP said that, among other things, she and her colleagues had borrowed money to finance their election campaigns and therefore needed the ex-gratia to repay. This raises a serious political point: who must finance political campaigns in Ghana? The MP was saying in effect that the tax payer funds or must fund MPs re-election campaigns; the question is, who finances the campaigns of the MPs opponents who have no ex gratia to fall back on?

If we follow the logic of her argument, the ex-gratia, in effect, undermines democracy by ensuring that incumbent MPs have an unfair advantage over others who might want to challenge them for their seats. This means that only government ministers and other wealthy people who also have access to serious money can challenge sitting MPs for their seats. This is the surest way to morph democracy into oligarchy.

The tone of the discussion thus far does not betray a bitter or envious edge; perhaps it is a good idea to pay free money to our MPs as often as we like but given our needs and scale of priorities is it the best way to spend 40 million Ghana cedis every four years? That is the question.

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