MPs hit back at Brown's expenses reforms

Published on Tuesday 21 April 2009 22:08

GORDON Brown was facing a revolt last night over his pledge to clean up politics by replacing MPs' housing allowance with a bonus just for turning up to work.

The Prime Minister said MPs could vote as early as next week on a "less generous" system of expenses after months of damaging headlines.

But Mr Brown faces opposition from his own MPs as backbenchers claimed they were being penalised for the scandals triggered by ministers abusing the system.

And the head of the watchdog undertaking a fundamental review of the pay and perks system warned a political "quick fix" would not satisfy angry voters.

Under the reforms, MPs from constituencies outside London would no longer be able to claim up to 24,000 for a second home.

Scots MPs could also be penalised as they have further to travel and often have to leave earlier to make it back to constituency meetings.

Westminster has been rocked by controversy over claims, mostly involving MPs' second homes, which have drawn in Cabinet ministers including Home Secretary Jacqui Smith.

Mr Brown, who unveiled his plans in a video on the Downing Street website, had resisted demands for immediate action.

He had instead submitted proposals to the Committee on Standards in Public Life, which brought forward its inquiry into the system so that reforms could be drawn up by the end of the year.

But yesterday – the day before the Budget – he broke his reticence to announce that the rules would be changed by July after a vote by MPs.

Tory leader David Cameron, who will join Liberal Democrat leader Nick Clegg for talks with Mr Brown on the plans today, welcomed the PM's "U-turn" on the need for more urgent changes.

But both men expressed serious reservations over whether a Brussels-style attendance allowance was the best way to restore public faith that MPs were not milking the system.

Under the proposals London MPs would continue to receive the extra 7,500 supplement for living in the capital, and would not be eligible for the day rate.

However, it is believed about 89 MPs representing constituencies just outside London would no longer qualify for the second-home allowance.

Instead, they would be given the London weighting, which would greatly reduce their expenses bill.

The day rate is likely to be similar to that received by councillors or the overnight rate received by Lords, which is 174.

An MP claiming for every day parliament was sitting could still make nearly 25,000. Rent or mortgage costs, council tax and furniture would have to be paid out of this.

Westminster politicians will also have to submit a receipt for every expense, a tightening up of the present regime where they can claim for items under 25 without evidence.

Mr Brown has also announced that all MPs will have to disclose any additional income or jobs, along with payments and the hours contracted outside the Commons.

The Conservatives privately see this as a dig at some of their MPs, who have lucrative directorships outside parliament.

Ministers with grace and favour homes, such as the Foreign Secretary, Home Secretary and Prime Minister, would not receive the daily allowance.

"The issue of expenses is casting a cloud over the whole of parliament. So Members of Parliament need to have the humility to recognise that the country has lost confidence in the current system," Mr Brown said.

"To restore our faith in parliament and the good that it can do on the public's behalf, we must commit to tightening up the system of allowances urgently."

Mr Brown's attempts to draw a line under the expenses controversy quickly were undermined by Sir Christopher Kelly, the chairman of the Standards Committee, which launched its inquiry this week.

"This is too important an issue to solve with a political deal; I don't think the public will accept that," he said.

"If public confidence is going to be restored, what is required is... a proper, independent, fundamental look at the issue and at all the issues, not just those identified in the statement.

"I have warned on numerous occasions that this is not something that can be solved by a quick fix."

But there were concerns the system would continue to favour ministers, who could claim for turning up to their London departments, rather than having to clock in to parliament.

A senior Labour MP, Michael Connarty, said MPs were being punished for abuse of the second home allowance by ministers.

"This is a stupid idea. It is desperate. It is an attempt to grab some popularity. You have got ministers, including the Prime Minister, all claiming for a second home in their constituencies, which is the real problem. The first thing the Prime Minister could do is take away the second home allowance for ministers on big salaries, including himself."

Alistair Carmichael, the Liberal Democrat MP for Orkney and Shetland, said the reforms would make the system less transparent.

"This is a bad idea and a Labour party fix." It would punish MPs who lived further away.

"If I have to get to a meeting in constituency for Friday morning, I have to leave at Thursday lunchtime."

Others warned that it would give MPs a "blank cheque" without having to account for what they spent the day rate on.

Angus Robertson, the SNP's Westminster leader, accused Mr Brown of trying to distract from today's Budget.

"Reform of parliamentary allowances is long overdue, but Gordon Brown's timing looks like a cynical attempt to distract attention away from Labour's 15 billion budget cuts bombshell," he said.

David Cameron, the Conservative leader, welcomed Mr Brown's "U-turn" but also warned the day rate could be a problem.

MPs are expected to vote on the expenses reform next week.

HOW THE WESTMINSTER GRAVY TRAIN OPERATES

MPs currently receive around 135,000 each in allowances and expenses, on top of their basic salary of 64,766.

But much of the money – around 90,000 – typically is taken paying the wages of their staff, based at both the House of Commons and in their constituency offices.

Under the rules, which are laid out in the "green book" and apply equally MPs, a staffing allowance of up to 100,205 can be claimed. However, this has been discredited by the habit of many MPs paying family members as their staff.

The Additional Costs Allowance is the most controversial as it has been subjected to the greatest apparent misuse.

It allows MPs to claim up to 24,006 a year for the cost of running a second home, which is normally their property in London. But some MPs have designated their London home as their "main" home – meaning the allowance can be claimed to subsidise their constituency home.

MPs are also entitled to free first-class rail travel, air travel, travel for spouses and staff and 40p per mile car travel (25p after 10,000 miles). Up to 10,400 can be spent on constituency newsletters.

BACKGROUND

THE furore over expenses was sparked by Derek Conway, then a Tory back-bench MP, at the beginning of last year. He was found to have used his allowances to pay his son 43,964 for carrying out little or no work. He has been kicked out of the Tory party and will stand down at the next election.

Then came revelations about the "John Lewis list", which was used to determine the acceptability of claims from MPs to furnish their second homes. It was scrapped last year after a public outcry that 10,000 could be spent on a new kitchen, 1,000 on a bed and 750 on a TV.

John Lyon, the parliamentary standards commissioner, is currently investigating two ministers – Home Secretary Jacqui Smith and employment minister Tony McNulty.

Ms Smith designated a London home shared with her sister as her main home, allowing her to claim up to 24,006 on her family constituency home a year.

Mr McNulty, who lives six Tube stops away from Westminster, claimed for a property in his Harrow constituency used by his parents.

Analysis: Exes action dissolves into another fine mess

GERRI PEEV

IF this is Gordon Brown's bid to clean up politics, he has inadvertently left a big mess.

At first reading, the proposals sounded sensible and populist: scrap the second home allowance, ban ministers from claiming housing costs if they live in grace-and-favour flats, order politicians to list all their private sources of income.

But then the bombshell: MPs would be paid a "bonus" just to turn up to work. This comes at a time when many constituents would be grateful for any job and the government is threatening to legislate to rein in bonuses for bankers.

Despite the Prime Minister's insistence that the scheme will be "less generous", there are concerns about the transparency of a scheme that pays MPs just for turning up, without any regard for their genuine housing expenses.

It will further entrench the favourable perks given to ministers, who are already on higher salaries, as they will just have to turn up to their department in London to obtain the allowance.

MPs – even some who have never said a cross word about Mr Brown – are furious.

The way the proposal was rushed out on Downing Street's version of YouTube has dismayed them.

One Labour MP said: "I am a trade unionist. I believe you have to consult the workers first. Why wasn't this raised at the Parliamentary Labour Party meeting this week?"

There are also rumours that the government wants to reduce the bill of the average MP by 2,000 to 3,000 in the hope that this stops the damaging headlines about expenses.

The overall expenses bill can be easily reduced with the scrapping of the second home allowance for MPs who live within commuting distance of the Commons. But some bills could ostensibly go up.

The Prime Minister has also appeared to undermine the independent inquiry he has ordered into the expenses controversy by pre-empting its conclusions with his own ideas.

Yesterday's Downing Street briefing was dominated by discussions about MPs' expenses. This was on the eve of what is tipped to be the most important Budget for half a century. That Mr Brown should find the will to bring up MPs expenses rather than discussing the fundamentals of the economy indicates there could be nasty surprises in the Budget.