Looking beneath the Khanbhai affair

THE fallout from the sacking of Bashir Khanbhai from the Conservative Party's European election list is not just confined to the personal tragedy that has engulfed the East of England Euro MP.

THE fallout from the sacking of Bashir Khanbhai from the Conservative Party's European election list is not just confined to the personal tragedy that has engulfed the East of England Euro MP.

The Conservatives emerge from the affair with very little credit, their leader Michael Howard has looked indecisive, and Euro MPs from all political parties must expect a barrage of questions from the voters as well as the media on their generous expenses and allowances.

Mr Khanbhai made two decisions in 1999 that ultimately brought him down. The first was not to buy a house in the region, preferring instead to operate from his family home in Sevenoaks, Kent.

The second was not to use one of the dozen or so Tory offices in Norfolk or Suffolk, where he became identified as the party's voice in the European Parliament, as his constituency business address.

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Had he done both, there would have been none of the problems of an allegedly phantom address in a Wroxham boatyard being used for mileage claims.

When did the Conservatives decide to axe Mr Khanbhai? Despite being cleared to stand as a candidate by the party's Board four weeks ago after an internal inquiry, the seeds of doubt had been sown in the minds of the Tory hierarchy.

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Some constituency activists, MPs and MEPs sought his removal, believing he could become an electoral liability. But at first sight, it does seem a denial of natural justice for Conservative Central Office to insist that Mr Khanbhai remain silent – adding to the perception that he was guilty – and then to tell him just 26 hours before nominations closed that he was being dismissed.

I understand the MEP received a telephone call at 2.25pm on Wednesday that he had until 3pm to either resign or be sacked. It was so late that the impact of the decision was far more devastating to him than if it had been taken weeks ago when the Tories first considered the allegations over his expenses.

It seems Central Office were worried that with more time, the millionaire might try to force the issue to a judicial review thus allowing him to retain his position on the Tory list.

Michael Howard wanted Mr Khanbhai to retire gracefully for the sake of the party. Norfolk South-West MP Gillian Shephard, acting as an emissary for the leader, contacted the MEP last Thursday asking him to go.

Having received the answer that he would not, Mr Howard told the media last Friday that the MEP had his full support, only for the party to pull the rug from under him five days later. Mr Howard cannot avoid the charge that he didn't know what he was doing.

The Khanbhai affair surfaced just as the national media were getting their teeth into the practice of MEPs signing on for a £175 daily attendance allowance without actually going to meetings.

It brings into focus the whole question of the unregulated expenses of our Euro MPs. To me, the solution is simply.

MEPs should receive the same salary – the British currently receive the £56,538 of a Westminster MP – rather than variable rates. On top of this, there should be a housing allowance for Brussels and money to pay secretaries and political assistants.

Lastly, all expenses such as journeys each week to either Brussels or Strasbourg should be reimbursed either through the use of prepaid official travel warrants or on production of receipts.

If these were implemented, it would remove the need for signing on fees and would stop the obscene practice of charging business class tickets while travelling on cheaper fares.

Until MEPs get to grips with this, the public will remain deeply cynical about the European gravy train. Who wouldn't like £175 a day on top of a salary just to turn up to do our jobs?

THE future of council tax will be one of the major issues confronting voters when Tony Blair decides to hold a General Election – but it has already caused an angry clash in the Harwich constituency between Labour MP Ivan Henderson and his Tory opponent Douglas Carswell.

Mr Henderson let fly over a policy paper Paying for Localism – published by the Adam Smith Institute, a right of centre economic think tank – which has been written by Mr Carswell.

It calls for the abolition of national VAT and council tax, with all local government revenue being levied by a sales tax collected by individual local authorities.

"Such a sales tax would have the immediate impact of increasing the tax burden on the poor and elderly," said Mr Henderson who claimed Mr Carswell had no concept of how his agenda would "cripple the communities he wishes to represent." It would be devastating for retailers in areas such as Clacton, Frinton, Walton and Harwich.

The consequence of a local sales tax, a form of local VAT, would mean that if his constituents did their shopping in Colchester or Ipswich, they would be putting money into those economies rather than their local ones.

Mr Henderson claimed cross border shopping might lead to a loss of sales and retail floor space in high tax jurisdictions and could distort the geographical pattern of retail development.

Mr Carswell, who welcomed Shadow Chancellor Oliver Letwin to Clacton on Monday evening, countered: "I have been listening to local people, particularly pensioners, who have faced massive increases in council tax since 1997. The council tax hikes, which have been engineered in Whitehall not our local town hall, have hit those on fixed incomes, such as pensioners, especially hard.

"I wrote a paper for the Adam Smith Institute, which was endorsed by a couple of national newspapers. However, it was merely a contribution to the debate that is taking place about local government financing. It is certainly not party policy at this time.

"If Mr Henderson prefers us to keep the council tax in its current form, he should explain why, rather than attack me for suggesting that there may be a better way."

It's a good, honest debate. What a pity the Liberal Democrats have no Harwich candidate in place to promote their policy of a local income tax to pay for council services.

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