Bruce Anderson: Parliament should think twice before changing the rules on MPs' allowances

We do not want obsessive legislators. Nor is there anything wrong with MPs employing wives

I feel sorry for the MP Derek Conway. Although he brought his troubles on himself, he has many good qualities. He worked his way up from a council house and a secondary modern. He rose to be a Major in the Territorial Army; his son Freddie hopes to go to Sandhurst. Dr Johnson was right: in the company of the military, "every man thinks meanly of himself for not having been a soldier". Much may be forgiven to those who serve in the colours.

Mr Conway also worked hard in the Commons, in the unglamorous jobs which rarely win publicity but which keep the place going. As a Whip, he helped to prolong John Major's government beyond its natural life expectancy. Later, he was the Chairman of Committees and a candidate for Speaker. The least sentimental of men, he loves the House of Commons. Not a man who would boast about his achievements, he was quietly proud to be an MP. There is little scope for pride now. Mr Conway must know that he has inflicted damage on Parliament and on his party. But this is not just a tale of greed. Mr Conway went wrong because he was thoughtless. As he should have realised, we are in an era of increasing scrutiny. As a result, the easy assumptions which used to govern the remuneration of MPs no longer apply.

It must be remembered that, in the long history of Parliament, the payment of MPs is a recent development. In the 19th century, Cabinet Ministers were paid significantly more in real terms than they are now, but MPs were not paid at all. It was assumed that they had independent means, second careers or rich patrons.

The 1906 Liberal government introduced salaries to meet the needs of the working-class Labour MPs who were beginning to arrive at Westminster. But the rates were never generous. It was assumed that the gents did not need more than a pittance, while the horny-handed would be grateful for one.

There was also an obvious difficulty, which ensured that MPs could not be well-paid. There is never a good moment to inform the hard-pressed taxpayer that those who vote to impose his taxes have just awarded themselves a hefty pay rise. But over the decades after the war, as both main parties became embourgeoisified and Parliament's workload grew, MPs became discontented. Hence an expedient, which seemed a good wheeze at the time but which is now coming apart: allowances.

There is a clear need for some allowances. Many MPs have to maintain two residences. They are obliged to travel between Westminster and their constituencies. They require secretarial help. But wherever there are expenses, there is scope for abuse. This used to be equally true in the old Fleet Street as well as in industry and the City, all encouraged by pre-Thatcherite tax rates. What was the point of giving someone a salary increase if 83 per cent of it would go in income tax? Far better to allow generous – and unqueried – "expenses".

In the private sector, that has all changed. The expenses climate of the 1980s and 90s gradually caught up with the new tax climate. The same was even true in Fleet Sreet, where suppression of old Spanish practices on the printing-room floor was eventually followed by the abolition of old Spanish expenses on the editorial one. But the Commons was the slowest to change.

MPs have been tacitly encouraged to regard some of their expenses as a form of disguised income. Spend what you must; pocket the rest. Until recently, a number of cars would leave New Palace Yard on Friday mornings. They would each contain four Labour MPs heading for the north of England or Scotland. The driving would be shared but not the mileage allowances. Four MPs, one car, four mileage claims.

Although Derek Conway is the last man who would take money that did not belong to him, he had come to think that, because his expenses had been increased to compensate him for a low salary, he was entitled to use them as he chose. Even if that meant over-paying his son out of the public purse, it was nobody else's business. But this nod-and-wink expenses system, conceived in secret, had never commanded the voters' agreement – still less, their affection.

There is a further factor. Tory MPs are now suffering because of the economic successes associated with Thatcherism. Acombination of higher salaries and lower tax rates has ensured that a lot of lawyers, bankers and brokers are vastly better off than they would have been 30 years ago. They are the sort of chaps whom the average Tory MP was at school and university with, or might meet at dinner parties.

He is feeling broke after paying his tax bill. Briefly, he loses concentration. Can he risk phoning the bank manager twice in a month and – oh, God – next term's school fees. He comes out of his anxious reverie to hear the other guests discussing the relative merits of a manor house in the Dordogne and a palazzo in Tuscany. Only a saint would not feel a twinge of envy. Those fellows are no brighter than I am. How come they are earning 10, 20 times more than I do?

The average Tory MP looks at his upper-middle class friends and feels poor. Incited by The Daily Mail, the average lower-middle class Tory voter looks at his MP and thinks: "Snouts in the trough. In it for what they can get out of it. What do they do for all that money?" The Tory party is suffering from the decline of deference and the rise of celebrity. MPs used to command deference. Today, they may pass as celebrities, but a celebrity's status is as uncertain as a funeral orator's in Julius Caesar.

All this is so unfair. The average MP is not a celebrity. His average hourly rate of pay is less than that of a director's secretary in a FTSE-100 company. Almost all Tory MPs took a cut in salary when they arrived in the House of Commons. If the Conway affair encourages the British electorate to think less of its representatives, the electorate will be making a misjudgement.

There will have to be changes. David Cameron has stressed the need for transparency. He believes that, with the best will in the world, many MPs do not see themselves as others see them. That could be cured by disclosure. With disclosure, it is desirable that MPs should have interests outside Parliament. We do not want blinkered and obsessive legislators. Nor is there anything wrong with MPs employing their wives. Colette Conway is a very hard-working secretary, as one would expect. Any MP without an efficient secretary would quickly pay a high price in voter alienation.

Mr Conway was an exception. It is never a good idea to make the exception the basis for a new rule. Before creating any new regulations, Parliament should deliberate on the matter in a thorough and non-partisan fashion. David Cameron would like to participate in that process. But he also knows he has a more urgent, short-term task: to repair the damage which Mr Conway has unwittingly caused.