The Farage allowances episode is primarily a sign of a fundamentally broken allowances system

The Times today uses the news that Nigel Farage is to be investigated by the EU’s anti-fraud office OLAF, following a complaint from an ex-Ukip official that £60,000 of EU allowances paid into his personal bank account have gone “missing”, to attack the “fraudulent prospectus” that he is “the politician who is not a politician”.

The chief allegation is that:

"The Ukip leader has received £15,500 a year from the EU since at least 2009 to pay for the upkeep of his constituency office, a small converted grain store near Bognor Regis, according to transparency reports filed on the party’s website.  

However, the grain store was given rent-free to Mr Farage by Ukip supporters 15 years ago. Utilities and other non-rental costs amount to no more than £3,000 a year, according to the former office manager, leaving about £12,000 a year unexplained."

The paper also notes that Mr Farage “also revealed that he used a proportion of his [General Expenditure Allowance] to pay more than £1,000 a month towards a controversial second EU pension scheme of which he was a member between 1999 and 2009.”

We looked at this additional pension scheme back in 2009, when it closed to new members, and it was controversial for two reasons. Firstly, it was two-thirds funded by taxpayers and, second, the system relied on MEPs being honest enough to fund the shortfall in their allowances out of their own salary. Credit to Farage for leaving the scheme - but being part of it in the first place doesn't reflect well on him (though he's one of many, many MEPs from all parties who were or still are).

Whatever the rights or wrongs of Farage's actions, this illustrates that the EP's allowances and expenses system is still miles away from what taxpayers should accept. The General Expenditure Allowance is notoriously vulnerable to abuse because it is generous, has a wide list of potential uses and does not require MEPs to produce receipts. The Times' leader itself admits that "It is probable, even if these allegations prove to be true, that Mr Farage has done nothing illegal".

Predictably Farage's response casts him as the victim of a "politically motivated attack from what is the establishment newspaper." The general expenditure allowance, he said, "is given to every MEP and we can spend it how we want to," adding:

"We have used the money to promote the cause of Britain leaving the European Union and we have done that unashamedly"

It is right that Nigel Farage is subject to proper scrutiny and that investigations are carried out if he has a case to answer, but there's still no proof he has done anything illegal. And whether singling out Farage will actually help or hurt his cause remains to be seen. However, what's clear is that the EP's allowance system must urgently be reformed.

The EP allowances system is something that we'll most definitely return to.

'My reaction was excessive, but the journalist was rude': Italian MEP caught on camera responds

Italian MEP Renato Baldassarre has responded to the posting of the video in which he's seen pushing and slapping a Dutch journalist (or at least the journalist's microphone) after being caught on camera allegedly signing in for a day's work, and then sodding off.

We posted a cut down version of the video on our blog, and it has generated quite a bit of interest .

As we're always keen on a right to reply, we've now translated Mr Baldassarre's response below. Again, judge for yourself (and if you understand Italian, the full interview is available here).

"First of all, I’m really sorry about that episode and the relevance which was given to it. But the truth has to be re-established. I answered the questions that I understood in a very correct fashion, until the insistence – and I would also say the rudeness – of the interviewer has triggered a reaction, perhaps excessive, but also justified by the fact I was not exactly in the best of moods given that around that time I had received the news that a very close relative of mine had been hospitalised."

"That said, this is about the usual episodes aimed at highlighting waste and privileges allegedly involving the European Parliament...I have a very high attendance record, 90% in plenaries and 85-86% in the various Committees. On that specific day, I had just arrived and was going to my office where I stayed until 10pm. Therefore, I really believe the whole fabrication around this episode is frankly excessive."

It is also worth noting that this story has unfolded on the same day as the Parliament has told member states it will not accept the latest compromise proposal on the EU's long term budget. In other words, MEPs are still holding the budget cut negotiated by David Cameron and other EU leaders hostage. Not a great day for MEPs from a PR point of view...

Caviar For Eurosceptic Palates

Why doesn't this strike us as a surprise? MEPs have asked for more of taxpayers' cash, although this time the money will not end up directly in their pockets. The European Parliament's Committee on Budgets voted yesterday to increase MEPs' monthly staff allowance by a further €1,500 - which, multiplied by 12 months and 736 MEPs, amounts to an annual increase of €13.2 million.

Not exactly a wise decision given the wave of austerity that national governments (and taxpayers) are facing across Europe. MEPs already gave themselves a €1,500 office allowance increase last year, following claims that new duties brought in by the Lisbon Treaty had increased their workload. What's more, they already receive a generous monthly allowance of €19,709 to cover staff and other office expenses.

In the words of Italian journalist Marco Zatterin, this really is "caviar for eurosceptic palates".

NB: It's a bit disappointing to see German MEP Ingeborg Grässle (a member of the EP Budgets Committee who has been saying a couple of sensible things in the past, for example on the EU's new diplomatic service budget) saying, "I cannot do the political or control work I have to do if I don't have more staff."

Now who was it who said "where you stand depends on where you sit?"

Putting your money where your mouth is

Amid all the scandal stories about absurdly generous allowances and shady pension schemes that MEPs get to enjoy, it's good to know that at least some MEPs still want to do the right thing. Like MEP Jens Holm (pictured) of the Swedish Left Party, for instance. At the end of 2008, he asked the European Parliament to give him a statement on the exact amount paid out to him in travel allowances by the EP, since he joined in 2006.

The amount? €158,708 - in less than two years! The outrageous amount owes to the fact that MEPs can claim for travel expenses based on a flat-rate, rather than the documented costs. For air travel, MEPs can claim expenses for an amount equivalent to the 'economy full fare' for the journey to and from Brussels/Strasbourg, regardless of the actual cost of the journey. So in effect this means that an MEP could travel on a low-budget airline, but still claim for the economy fare of a more expensive airline.

Objecting to this system, Jens keeps receipts of all his travel expenses (revolutionary!). Rather than pocketing the difference, like most MEPs do without a second thought, Jens - wait for it - gives the surplus to charities. In total, he donated around €70.000 between 06 and 08 - around half the amount he recieved in travel allowances from the EU.

Talk about putting your money where your mouth is!

Any "reformist" British MEPs feel like priding themselves on turning principle into practice in a similar way?