House of Commons expenses probe orders MPs to repay £1.12 million

Published on Thursday 4 February 2010 08:39

THE long-awaited review of House of Commons expenses has ordered MPs to repay £1.12 million, it has been revealed.

The review's author Sir Thomas Legg lambasted the "deeply flawed" system at Westminster and recommended that MPs hand back 1.3 million.

But that figure was reduced by 185,000 after former judge Sir Paul Kennedy upheld a number of appeals by MPs against the repayment demands.

In his executive summary, Sir Thomas said the "rules were vague, and MPs were themselves self-certifying as to the propriety of their use of the allowance".

There was also a "prevailing lack of transparency" and officials had a "culture of deference" to MPs.

"A particular challenge has proved to be the widespread lack of proper evidence on the record from MPs to support substantial payments, especially of mortgage interest, even though this was expressly required by the rules," he added.

Sir Thomas roundly rejected complaints from many MPs that he had imposed retrospective rules and spending limits for items such as gardening and cleaning.

He insisted the regulations governing use of second home allowance had indicated it could "only be used as reimbursement for specific and proportionate expenditure on accommodation needed for the performance of Parliamentary duties".

"Payments by the Fees Office which contravened these requirements breached the published rules and standards in force at the time. To hold such payments invalid is not to impose new rules retrospectively, but to apply now the rules that were properly in force then, but were overlooked or misunderstood at the time.

"For this reason, the fact that in some cases the Fees Office and MPs acted in apparent ignorance of the rules and standards then in force cannot cure the invalidity of the payments.

"Suggestions that MPs necessarily acted 'in accordance with the rules' simply because the Fees Office made payments to them, and even encouraged and endorsed their claims, are therefore misconceived."

Former judge Sir Paul Kennedy, who was asked by the Commons to hear MPs' appeals against the Legg findings, wholly or partially threw out 44 of 75 disputed demands.

And he used the foreword to his own report to level several serious criticisms at the methods used by Sir Thomas in his audit

Sir Paul said he was "particularly troubled" that MPs who had not broken rules that were in place at the time had been accused of making "tainted" claims or having "breached the requirement of propriety".

The application of retrospective caps for cleaning and gardening was "a rational response to a difficult problem" but it was "bound to have unfortunate consequences".

While it was "irritating, to say the least" for anyone to be asked to repay money claimed in good faith, he went on, it was "infinitely more irritating and potentially very damaging to reputation if the exercise takes place in the full glare of media publicity".

Sir Paul said it was "unfortunate" that the Legg review had invoked "the requirement of propriety" over cleaning and gardening claims.

"That carries with it the inevitable implication that those who made claims in excess of the retrospectively-imposed limits were lacking in propriety.

"I found little, if any, evidence of that," he said – accusing Sir Thomas of acting beyond his remit.

"It was not the function of the review, nor is it my function, to make judgments of that kind."

The largest sums ordered to be repaid by sitting MPs – after appeals are taken into account – were 42,458 by Barbara Follett (Lab, Stevenage), 36,250 by Bernard Jenkin (Con, North Essex), 31,193 by Andrew Mackay (Con, Bracknell), 29,398 by John Gummer (Con, Suffolk Coastal), 29,243 by Julie Kirkbride (Con, Bromsgrove) and 24,878 by Liam Fox (Con, Woodspring).

In a damning passage of the report, Sir Thomas said that between 2004 and 2009 senior figures in the Commons had been more focused on furthering the "immediate interests of MPs" than "propriety in public expenditure".

The former Whitehall mandarin said the "culture of deference" in the Fees Office had left it "vulnerable to the influence of higher authorities in the House of Commons, from the Speaker down, and of individual MPs".

Sir Thomas stressed that his findings merely dealt with whether expenses claims had been "valid", and intended "no reflections on the conduct or motives of individual MPs".

Sir Paul said it was "damaging, unfair and wrong" to publicly state that MPs who made apparently genuine claims within existing rules had engaged in "tainted" practices or had acted improperly.

He disputed the Legg review's decision to order the wholesale repayment of so-called "conflicted transactions"– such as buying or renting a second home from a close relative, a company in which the MP had shares, or a close associate.

In his report, Sir Thomas said he had regarded all such claims – of which there were seven – "as tainted and the whole payment accordingly invalid".

Sir Paul said he found "little room for the application of the approach which commended itself to the Review" and that each case should have been considered separately.

He said he was "particularly troubled" that claims made before the rules were changed in 2006 to outlaw such arrangements should have been dubbed "tainted", invalid and improper.