How should we end the scandal of Members of Parliament making bogus claims for expenses? Most recommend closer scrutiny of their spending and clearer rules about what is allowed.

I have a better idea. Let's have no rules and no scrutiny - and no claims for expenses either. MPs should be paid a lump sum at the beginning of the year - £200,000, let's say, from which they would pay themselves a salary - and nothing more, no matter what expenses they incur. And they should be free to spend this money as they wish.

That would end the scandal, since nothing counts as cheating in this scheme. We would know exactly how much our MPs are going to cost

us, which need be no more than at present. And, most importantly, it would improve the quality of MPs' spending.

Crazy, you say. MPs could spend it all on jewellery, birthday parties, champagne or anything they fancy. But it is not crazy if MPs fancy things that help them to do their jobs - as surely they do.

Then a discretionary system must result in better spending than a rules-based system. Because those who set the rules cannot know better than an MP what allocation of spending will best help him or her to do the job.

If you tell MPs that they may claim up to £20,000 for a second residence, £77,000 for staff and nothing for nannies, then, provided they are honest (or well monitored) that is more or less how much you can expect them to claim for each of these. But who says this is the best use to which they could put £97,000?

What some MPs need to do a better job may well be a nanny (for their children, I mean). Some may have no need of a state-funded second residence but be able to make good use of more than £77,000 of staff. It is impossible for others to know what is the best allocation of an individual MP's spending, and absurd to think that one allocation is best for all. Tightening the rules can only make things worse.

Instead, we should simply decide how much we are willing to pay for MPs to do their jobs, and then pay them that much. We can rely on them to spend the money wisely because it is in their interests to perform well. That will gain them re-election and advancement through the party ranks.

This may sound naive. Perhaps there is no connection between MPs' performance and their re-election or career prospects. If so, British democracy faces a much bigger problem than a few MPs cheating taxpayers out of the cost of a research assistant.

Jamie Whyte is the author of Bad Thoughts: A Guide to Clear Thinking

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