Page last updated at 15:30 GMT, Monday, 23 February 2009

Euro MP expenses 'can reach 1m'

By Laurence Peter
BBC News

Flags flying at the European Parliament
Parliament voted to keep auditors' reports secret

Euro MPs' expenses and pensions are so lavish that they can earn as much as 1m (1.13m euros) on top of their salaries over their five-year term in parliament, a British campaign group says.

The TaxPayers' Alliance (TPA) said its research also showed that British MEPs would get a big increase in their take-home pay after June's European elections.

The TPA has published an internal report - the Galvin Report - on abuse of MEPs' expenses, which had been kept secret by the European Parliament but was partially leaked last year.

Every member could "easily" save more than 1m from their expenses and pension benefits over a five-year term at the European Parliament, according to the TPA.

This includes a subsistence allowance of 117,000 euros (104,000), staff allowance of 489,840 euros, office expenses of 243,120 euros, travel expenses of 60,000 euros and an accrued pension of 394,000 euros.


This does not include the MEP salary. This varies between countries but amounts to 63,291 for a British MEP.

After the European Parliament elections in June, MEPs from all countries will be paid the same - 91,980 euros. At today's exchange rate that is equal to 81,420 - an effective pay rise for British MEPs of 27%.

The Galvin Report selected a random 167 MEPs for checks during 2004 and exposed a culture of MEPs paying huge "bonuses" to staff.

I don't want the cheats to get away with it
Chris Davies, Lib Dem MEP

In one case, the bonus was worth 19.5 times the official's monthly salary.

The report's existence was made public by Lib Dem MEP Chris Davies a year ago.

Then last March a Dutch MEP, Paul van Buitenen, posted a short summary of the report on his website, defying the secrecy that fellow MEPs had voted for.

Mr Davies said on Sunday: "Honesty doesn't pay in this system and the temptations are great.

"No-one knows who is cheating and who is not and it is a disgrace that the parliament has voted to keep auditors' reports secret."

He said expenses were not being abused by everyone, but called for the disclosure rules to be tightened for all British candidates before this June's European elections.

Subsistence allowance: 117,000 euros
Staff allowance: 489,840 euros
Office expenses: 243,120 euros
Travel expenses: 60,000 euros
Accrued pension: 394,000 euros
Does not include salary of 63,291 rising to 81,420 in June, for a British MEP

"Some MEPs from some countries may have pocketed 2m more than I have by observing the letter but not the spirit of the rules. I don't want the cheats to get away with it," he said.

A spokesman for the European Parliament said it had acted on the findings of the Galvin Report.

"It has had important consequences. The result has been a complete overhaul of this system to enter into force after the June elections," he told the Times newspaper.

The report revealed major anomalies in payments for those providing office assistance and services to MEPs.

Two MEPs were found to be paying out full assistance allowance, but neither had any assistant actually accredited or registered with the parliament.

In another case, a company was registered as the recipient of the full assistance allowance, but its accounts showed no activity.

The report also highlighted improper registration and tax compliance of MEPs' service providers.

Flat-rate allowance

The European Parliament is introducing changes to MEPs' salaries and allowances after the June election.

The standard monthly payment for all MEPs will be 7,000 euros (6,196).

The TPA claims British MEPs will get a 47% income boost not only because the pound has slumped against the euro, but also because they will pay a reduced EU income tax.

However, British MEPs say this is untrue, as they have voted to opt out of the European tax rate and will pay the same tax as anyone in Britain.

The TPA - a limited company - was founded in 2004 by British Conservatives who wanted the party to stick to tax-cutting policies.

After the June election, the MEPs' flat-rate travel allowance will be replaced by the reimbursement of expenses actually incurred.

But they will continue to get flat-rate subsistence and general expenditure allowances.

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