What a mess. It would be hard to think up a system that could do more to fuel public cynicism about MPs. Leaving aside the sideshow of Jacqui Smith's husband's taste in films, the image has been created of many MPs, including ministers, lining their pockets, even if they are not breaking the Commons rules.

All this is avoidable, provided MPs and, above all, party leaders, show the political will and courage lacking in the past to raise their basic pay in return for smaller allowances.

The growth in allowances is partly because of a reluctance to be seen to raise basic pay. Hence, just as under the incomes policies of the 1960s and 1970s, extra money has been conjured up in the form of new and expanded allowances. Many, such as employing staff and travelling to constituencies, are legitimate and should not be treated as hidden pay.

The additional costs allowance, on second homes and the like, has, however, been abused by some MPs and has been subject to inadequate audit. It has only been unofficial leaks and a persistent freedom of information campaign that has produced the recent flood of disclosures, with much more to come.

The rules on allowances are being strengthened from tomorrow to provide greater transparency and tighter audit, but this is not enough. Travel costs should be much more tightly defined: why first-class travel? Other allowances should be abolished and replaced by a once-and-for-all rise in salary. This should automatically change annually, but in line with average earnings, not the basket of public sector pay.

There is never a right time to increase politicians' pay, as was seen yesterday when a 2.3 per cent rise to £64,766 was announced under the current formula.

So we had the predictable sacrifice imposed by Gordon Brown with the freezing of ministers' pay, including the MPs' part, while opposition leaders also accepted a personal freeze.

There is a case for restraint given the economic troubles, but it should be voted on by the Commons, and not be the result of hair-shirted gestures.

The defensive reaction just feeds the current populist mood of anti-politician anger. Most MPs work hard and deserve a reasonable salary, which is anyway lower than many public sector managers. Cutting, or holding down, MPs' pay will only ensure more already wealthy Members but, if MPs are to regain respect, they need to clean up their entire system of allowances.

As Mr Brown said last night, this needs to happen far faster than the original leisurely timetable of the Committee on Standards in Public Life to report early in the life of the new Parliament. If the current mess is to be avoided, the brief post-election period is the only time when a new system can be introduced.

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