Alan Watkins: Public money and a very private enterprise

The employment practices of Mr Derek Conway point up the urgent need for a review of the whole system of allowances

In the days when I attended the House of Commons more regularly than I do now, I turned to my neighbour in the Press Gallery and asked: "Who's that chap who looks like Mel Smith?", referring to the comedian of that name. I also thought he looked like a bookie, so that may have amounted to the same thing, and none the worse for that. "That," my companion replied, "is Derek Conway."

He was, it appeared, very popular on the Tory side and, indeed, in the House generally. He was, I learnt later, a principal mover in the group that got rid of Mr Iain Duncan Smith. He was an ally in Mr David Davis's attempt to become leader of the Conservatives. And he was a possible candidate to succeed Mr Michael Martin as Speaker.

All this I discovered in the past week or so. Until then, Mr Conway had not troubled my thoughts. He and I adopted positions of benevolent neutrality. Matters changed, partly because of the activities of the Standards and Privileges Committee, but mainly because of the assiduity of the British press.

Mr Conway was, it appeared, in the loyal habit of employing not one but two of his sons as research assistants out of his parliamentary allowance, of whom one was recorded as having done no work of any kind. His wife's position as his secretary was regarded as legitimate, as is that of numerous other wives or, presumably, lady friends. His daughter, as far as is known, played no part in this cottage industry.

The word from on high, in both parties, was that Mr Gordon Brown and Mr David Cameron had no plans to disturb existing family arrangements as far as secretaries were concerned. "OK, let's play MPs and secretaries": that seemed to be the slogan of the moment. Things may change. But it is not up to party leaders to dictate these arrangements. There is the argument, advanced with every appearance of seriousness, that many marriages are kept together by the prospect of dealing with parliamentary correspondence.

Research assistants are trickier, in all senses of the phrase. They can come from anywhere: the London School of Economics, the Massachusetts Institute of Technology – anywhere at all. One of Mr Conway's sons was studying at Newcastle University. I have even known retired journalists, highly regarded in their profession, who have been kept on as "research assistants" because it suited the parties concerned and they continued to enjoy access to the place.

Much more important, numerically, are the young people, usually in their twenties, who are ambitious politically for themselves or for the organisations they represent at Westminster. The professionalisation of politics about which Mr Peter Oborne has written so eloquently and so much is both a cause and a consequence of this development in our national life.

From time to time there is a scandal. There are CIA spies in Annie's Bar, or something of that description. In fact there used to be a Russian agent in Annie's Bar in the 1970s, and a most entertaining member he used to be: he is now dead. The usual story is about securing improper access of some kind to the premises.

In 11 days (Mr Alastair Campbell's limit for stories of this kind), the scandal is forgotten completely or turns into quite another row altogether. Who can now remember the exact details of Mr Peter Mandelson's resignations? It is hard enough to remember even one of them, let alone two. The various bodies or individuals charged with investigating these matters are equally difficult to understand, but I shall try my best.

Assorted committees or single inquiries have been working away since the 1970s, the age of John Poulson and Reginald Maudling. But it was not until the 1990s that "sleaze" was taken up by Mr Campbell and Mr Tony Blair. Sir John Major tried to be accommodating to the then opposition. It did no good to the Tories. But the creatures unleashed by Mr Campbell and Mr Blair, later embodied in Mr Jack Straw's funding measure of 2001, turned round and bit their original keepers. It was justice, of a sort.

Following a report from the Committee on Standards in Public Life under Lord Nolan, the House voted to set up permanently a committee on Standards and Privileges, now chaired by Sir George Young. The Parliamentary Commission for Standards was set up separately but reports to it. I am unable to see the reason for this separation myself, but there it is.

When Sir George reported from his committee, he recommended a reprimand for Mr Conway. At least one fellow member, Sir Nicholas Soames, a pillar of the constitution or, at least, of Wiltons Restaurant, recommended a more stringent penalty, which was duly imposed. Mr Cameron then added an overnight punishment of his own, deprivation of the Whip, in effect his expulsion from the party in Parliament. At least one member had his political career terminated in this way by Mr Michael Howard, while several recalcitrant members were treated more indulgently by Sir John and lived to tell the tale. Mr Conway has already announced that he is leaving the House at the election.

In old Fleet Street, there used to be something called an "expenses allowance". I was not offered one, perhaps because I was insufficiently senior. But an old lag once took me aside and, as gin succeeded tonic, advised: "Never accept an expenses allowance, lad, because, if you do, you will find yourself on your own. George Gale" – a legendary figure in the street of shame – "once had an expenses allowance and he found he could never get rid of the Inland Revenue."

There might have been other explanations for the financial troubles of the journalist in question. But at Westminster there is everything to be said for the payment of directly reimbursed expenses. The whole system of claiming allowances should be looked at again.

A commentator wrote last week that all the benefit secured by the Conservatives by the various funding scandals surrounding the Government had been undone by the greed of Mr Conway. I am not sure that this balance is quite right. I am certainly not sure that it is a balance of any kind that ought to be measured.

Parliamentary allowances or claiming them are one thing: the solicitation of funds to fight internal party elections are a different matter entirely.

In 1976 there were six candidates to become leader of the Labour Party: in 2007 there were the same number for deputy leader. The first contest took three ballots over 11 days; the second contest lasted for months. It is extraordinary to me that the candidates managed to spend so much money.

The Electoral Commission need not have been brought in at any stage. The party would have borne the inevitable and modest expense. Nor would there have been any need to call on public funds. The unstated major premise of any discussion of party funding in progressive circles is that the taxpayer must fork out. Not so. Indeed, in Mr Conway's case, forking out is precisely what the taxpayer had to do.

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