Page last updated at 17:01 GMT, Wednesday, 20 May 2009 18:01 UK

Expenses: Options for reform

Britain's political leaders all now agree that MPs expenses need reform - but significant differences remain on what needs to be done. Here is what the three main UK parties have been proposing, as well as ideas from other politicians and campaigners - followed by some of your ideas.


On Tuesday all the party leaders agreed to some immediate reforms, to tide the system over until Sir Christopher Kelly's committee reports back.

• All MPs' expenses claim over the past four years are being re-examined and any deemed to have been outside the rules will have to be repaid.

• MPs will only be able to use the second homes allowance for rent, hotel bills, "overnight subsistence", mortgage interest, council tax, utility charges and insurance. Claims for cleaners, furniture, gardening and stamp duty have been heavily criticised.

• Claims for mortgage interest and rent payments will also be capped at £1,250 a month - previously MPs could choose to use their entire £24,000 a year second homes allowance on mortgage claims.

• MPs will also not be able to change the property they designate as their second home - which are eligible for expenses - in 2009/10. Several MPs are accused of "flipping" the designation several times - sometimes selling on properties after doing them up using taxpayers' money.

• MPs who are couples will be obliged to nominate the same main home and will only be able to claim one person's accommodation allowance between them.

• All claims will be published quarterly online.

• MPs selling homes will not be able to avoid capital gains tax by telling Revenue and Customs one thing and the Commons another about which is their second home

• Mortgage claims must be accurate, for interest only and on continuing loans.

• A clear test of "reasonableness" will be applied to all claims by the Department of Resources in an effort to "tighten up" allowances.

• Claims which are the subject of any doubts will be refused with no opportunity of appeal.

Gordon Brown, Labour leader

Prime Minister Gordon Brown had called for all MPs' expenses for the past four years to be independently reviewed - and those who have broken the rules to pay the money back. He has also called for a "radical" and swift overhaul of the system to make it "wholly fair".

He also wants the whole issue of MPs' allowances to be determined by an outside body and has called for an end to the Westminster "gentlemen's club" whereby MPs vote on their own remuneration.

The government wants an independent Parliamentary Standards Authority which would revise and update the code of practice for MPs, investigate complaints, take forward the eventual recommendations from the committee on standards in public life, authorise claims for payment, disallow them and issue financial penalties if necessary.

It would not have the power to suspend MPs - that would be left to the Commons standards committee. There seems to be broad cross-party agreement on the idea of a move away from self regulation but details are still being worked out and the government will have to set aside Parliamentary time to put forward the necessary regulation.

Commons leader Harriet Harman had asked the cross-party members' allowances committee, chaired by Labour MP Don Touhig, to draw up the proposals on the second homes allowance - which were among those agreed by other party leaders.

David Cameron, Conservative leader

Conservative leader David Cameron has backed Gordon Brown's call for an independent review of past expenses - but has called for action now on reforming the system.

Mr Cameron, who says the issue is whether claims were "morally, ethically" right rather than whether they were within flawed rules, has brought in new rules for his own MPs - and ordered key members of his frontbench team repay thousands of pounds in excessive expenses or face the sack.

The Tory leader:

• Plans to set up a scrutiny committee to examine Tory MPs' expense claims in the past and future. Those who refuse to repay excessive claims would be thrown out of the party.

• Reaffirmed existing Tory policy that in future only rent, mortgage bills and council tax bills will be claimed by Conservative MPs

• Ban "flipping" of homes for Tory MPs

He has also said that if a Tory MP sells a house for which they have claimed mortgage interest payments, they would have to pay capital gains tax.

He has also urged greater transparency. In future, Mr Cameron's frontbench team, and then all Tory MPs, will have to publish their expense claims online as they happen - something he wants to see extended to MPs of all parties.

He has also called for MPs' annual £10,000 communication allowance, brought in two years ago to help MPs stay in touch with their constituents, to be scrapped.

The Tories have backed Sir Christopher Kelly's independent review and said they will study the findings carefully when they are released later this year.

Nick Clegg, Lib Dem leader

Liberal Democrat leader Nick Clegg backs the reform of second homes allowances but is urging Gordon Brown to go much further.

He wants to stop taxpayer-funded mortgages to prevent MPs "playing the property market". MPs would instead be forced to rent accommodation if they needed a second home.

Lib Dem MPs who have profited from the sale of second homes have been ordered to pay the money back.

Under the Lib Dem scheme:

• An immediate ban on MPs using their allowances to buy property

• A period of 36 months after which no further expenditure will be permitted in support of mortgage interest payments

• Accommodation allowances would be restricted to rental agreements, utility bills, and council tax only

• Payment of personal accommodation expenditure would be on the basis of the production of bills and rental agreement only.

Designation of first and second homes would be independently approved to ensure that payments reflect the necessary circumstances of MPs in fulfilling their parliamentary duties and value for money to the tax payer.

Like the other two party leaders, Mr Clegg backs Sir Christopher Kelly's independent review.

George Reid

George Reid, former presiding officer at the Scottish Parliament, led an overhaul of the expenses system there. He believes Westminster should follow Holyrood's lead.

"Learning from the Scottish experience, transparency is everything," he says.

"Here, all individuals' claims are posted on a website where the public can then see them.

"Knowing that their claims will be seen by the public concentrates members' minds wonderfully when they are submitting them."

Derek Wyatt

Derek Wyatt, MP for Sittingbourne and Sheppey, feels the solution to the issue is higher wages.

"I've always thought the idea of a salary and then expenses was fundamentally flawed," he argues.

"MPs should be paid an inner London and an outer London salary and no expenses. The current expenses should be wrapped up into an enhanced, taxable salary, but that portion should not be allowed to be added to our pensions."

Mr Wyatt adds that a starting salary of "over £100,000" would mean MPs could "pay all expenses - accommodation, office rental, staff salaries - out of it" and then have those accounts "signed off and put in the public domain".

Dr Richard Taylor

Dr Richard Taylor, who represents Wyre Forest in Worcestershire, has published all of his expenses for 2004 to 2008 online. Last year, only four MPs claimed less than him and he has a number of suggestions for reform.

"The distance an MP should be expected to commute should be defined by time and a time of one hour seems typical for most people who work in London," he said.

"The accommodation allowance should be restricted to rent for a second home in London and only basic furniture and equipment.

"If mortgage interest is to be allowed, then somehow the taxpayer should have a share of any capital gain.

"Personally, I do not think that a £25 daily allowance for food is necessary in any way. If this remains, it can only be acceptable if paid on the production of receipts."


The Taxpayers' Alliance has demanded that police look into the issue of expenses and pursue prosecutions if they are appropriate. Mark Wallace is from the campaign group.

"No matter what system is adopted the lynchpin has got to be transparency," he says. "This is the taxpayer's money and every single penny of it should be open to scrutiny.

"The second thing that has to be done is that MPs have got to start living by the same rules as the rest of us.

"You can only claim for something you've actually incurred, anything you claim for must be backed up by receipts and any other benefit you receive should be taxed."


Neil O'Brien is director of think tank Policy Exchange. He campaigned against efforts by some MPs to try to block the publication of all expenses details under the Freedom of Information Act.

"Expenses were being used in an attempt to pay MPs more, without actually raising the basic salary," he said.

"The real problem is the second home allowance. Pre-expenses scandal, it was widely assumed that it would be consolidated into higher pay, but the Telegraph's last 11 days of revelations has closed off that avenue.

"A radical alternative might be a means test. Most MPs would reject this out of hand as humiliating - but why should MPs be treated differently than people on benefits?

"Why would we want to pay the same to a multimillionaire and a former postie?"

Shoppers in London

Thanks for all of your many suggestions. Here is a selection of the more eye-catching ideas:

The expenses need to be sorted as part of a wider review of parliament.

1. Reduce number of MPs by 1/3.

2. Remaining MP's to get a 15% pay rise.

3. Taxpayers contribution to MP's pensions reduced to 10% from current 30% with increased contributions by MP's.

4. Travel costs to be reimbursed based on receipts up to a maximum value equivalent to standard walk on rail fare.

5. Accomodation costs to be met (either rental or mortgage interest) up to a maximum of £20,000 pa for time away from constituency.

6. Parliament to designate second homes.

7. Any MP who claims for mortgage interest on property would have to repay monies claimed from capital gain upon sale in addition to CGT on sale of property.

8. No expenses claims allowed for furnishings, food, sky tv etc.
Andy, Wakefield, UK

Firstly, changes to the MPs expenses does not need to be an extended process. We are only talking about 600 odd people so this isn't anything like on a par with multi-nationals who employ thousands of staff. This could be sorted out in a few hours by the leaders of each party sitting down and deciding on a common sense approach.

Secondly, why can't MPs who have excessive commuting requirements be allocated residential apartments in the London area at a purpose built cluster. This could provide substantial job gains for the local area - remember we have MPs who are currently commuting comfortably from Reading so this doesn't even have to be within the M25 but within easy access. Furniture requirements for each MP could come from a central store and be returned if an MP loses his seat, resigns etc. Each MP would only be able to get furniture from this central repository.

Thirdly, if MPs have purchased for White Goods and furniture on expenses then surely if they lose their seat this stuff should revert to the common purse and could be then used for charitable purposes. A few dozen TVs at the best part of 1 thousand pounds a pop could work wonders in hostels, hospitals etc.
Chris Hill, Wallingford, UK

There's quite a lot of military accommodation in central London, most of it unused because the occupants are elsewhere at the moment. If MPs used that then we could solve the problems of sub-standard military accommodation, security and MPs expenses all in in one go.
Andrew Watson, Milton Keynes, UK

Scrap all allowances for "second homes" immediately. Reimburse for overnight accommodation for those unwilling/unable to commute - though in today's age of high speed rail links most of their journeys woul appear very reasonable. They only attend parliament two or three times a week which certainly does not justify buying "second homes" at tax payers expense.
R.F.Yorks, Yorks, UK

I think they should build a high rise for the MPs to stay in when they are in london then all they need to claim for would be travel. Their staff should be employed through the same ways and means that the public are employed by offices etc.
Becci, southport

What needs to happen now:

1) Give the MP's a comparable wage based on industry/business standards. Director level. £100k ?

2) Ministers rates should be based on CEO levels. £150k ?

3) The Prime Ministers rate should be set at 20% above the Ministers rates. £200k ?

Expenses: and they ARE expenses not an allowance.

A model exists within the Civil service and among council staff to claim reimbursements within a set of strict guidelines, that model should be used until such time as the rules have been set, agreed and brought into use.

Second home allowances should be ended regardless.

Expenses should be paid for the average cost of a 3 star Hotel in central London, the Government could negotiate a special rate with the major hotel chains the same as large business does.

Grace and Favour homes should be accounted for by a separate body and under a completely separate set of rules. Any Minister with a Grace and Favour residence should not be allowed any expenses for hotel stays in London.

MP's inside the M25 should not be allowed any Hotel expenses for their nights in London, unless it is incurred due to late work,a conference (committee) or a late sitting of the House.

Receipts should be required for all expense claims.
Stewart Dunbar, Bardford Yorkshire

I think it is impossible to improve on our current system: you can claim whatever you want as an MP, you will be reimbursed on anything you claim, and then under FoI we -- the public -- get to decide whether it was justified. If it wasn't, then the money is repaid.

Simple, cheap, and very, very, effective!

So, receipts for everthing, and no redaction, and publication on the parliamentary website and the MP's personal website within one month of the claim being submitted.

David Lester, Manchester

Use standard HMRC rules for payment of expenses. Provide accommodation (the 2012 Olymic Village once the athletes have gone would be ideal) for anyone who lives too far away to commute. Office costs including secretarial support to be provided in Westminster centrally rather than by an allowance. And the fundemental rule: if your employer buys something you need to do your job, that thing remains your employer's property when you leave that job.
Megan, Cheshire UK

Whatever they do get in future should be the same as awarded to Nurses, Teachers, etc - nothing more. If they can 'grab' extra allowance, then everyone else should be allowed to - treat them the same as everyone else in the country. As for paying family to do admin work, it should be capped at realistic levels, some currently get more than a Teacher earns just for opening letters!
Dave Evans, Carlisle

Move Parliament to Corby, lock stock and barrel. It is in the centre of the UK and it has reasonable rail and road links. All MPs can have a one bedroom penthouse in a communal block near the new parliament building. (If they want some other alternative accommodation in Corby for their children/spouses etc they can find and pay for it themselves). Such an arrangement will help the economy of Corby and free up valuable land space and accommodation in London for the needy. After all the European Parliament is in Strasbourg, and works perfectly well for Europe. Why not have the UK Parliament in Corby?
Moosa, London

Cut the number of MPs and give them a Hall of residence to use when in London and Full video and Computer link from their constituency, Stop council tax refunds, and give them a set ring fenced Budget to cover expenses.

No second homes allowed, and no husband and wife team allowed to claim twice, on any costs Use computor technology to perform voting in the house there is no need to be there now adays, and this will cut attendance costs to the tax payer.
jim evans, brighton

The MP's are obviously not up to submitting expenses that are wholly for their work (as laid out in the rule book). The fees office is clearly not up to the job either, so scrap all allowances, when they are in London, they can stay in a hotel (like most business people do when away from home). Review their salary to establish that enough people can be MP's and not just the independently wealthy. Then call an election and let the people decide who they want to sort the rest of the mess out!
Chris, Axminster UK

Whilst I applaud David Cameron's swift action he has not gone far enough, and I like the Lib Dem's proposal that MPs should not profit at all from capital gains where they have had their mortgage interest paid. As for GB - forget it!!

The answer is that property should only be rented - with a cap on the amount of rent (my son pays about a grand a month for a reasonable place in a decent part of Dulwich).

Better would be, so that MPs can communicate easily with each other, a central London building which can be converted into units - the government must have some spare properties. This would mean that there would not be the need for claims for second property utility bills, council tax, rent, furnishings (all would be furnished to a reasonable standard with "office" needs).

This would mean that the constituency house would always be the "main residence".

Food should not be payable. They'd be buying it at home anyway.
Bob, Kent

Comfortable furnished and serviced 'courtesy' apartment for qualifying MPs within a short distance of Westminster. Purchased, managed and maintained to a defined standard by an accountable property management company. Fixed furnishing and equipping allowance on occupancy. Or a hotel room to a defined maximum.

First class rail, standard class flights, 'regular' private hire taxi or AA/RAC recommended mileage allowance for own cars for travelling on constituency or parliamentary duties only. Local (constituency or Westminster) public transport or 'black cab' fares.

Modest daily food and drink (not alcohol) subsistence when working away from constituency.

That's basically all they need and what most of us who travel for work get and shouldn't leave them out of pocket. Anything else, they pay.

If they want and use a 2nd purchased or mortgaged home, nothing.
Tony T, Southampton

First of all, the MPs earn a salary that should be sufficient to pay their cable, internet, etc, bills. The only expenses that should be allowed to be recovered are rental agreements, utility bills, and council tax. Why they have to buy properties? A hotel should be designated just in case that they have to go to London.
Peter, Hampshire

Save money by not having Scottish MPs at Westminster. You could also include all the extra expenses with the MPs pay and the thy would at least be paying the correct amount of tax. Thus back to the general public whare the money came from in the first place. Mr Brown does not seem to remember that.
David, North Hykeham

Let's have fewer MPs. Give them a digital link to parliament so they stay and work 95% of the time in their constituency. Lets hear less braying from the House of Commons - if they want to speak their microphone connection is made by the Speaker's staff - so we don't hear the yobs. If they need to attend the House (why?) then they can occasionally stay in a hotel.
Frank, Wellington, Shrops England

Why has no-one asked an MP why expenses need to exist at all. MPs who need to be in London can stay in designated hotels on a bed and breakfast and evening meal basis and rail fares can be paid to and from London. Hotel Bills would be submitted to the fees office direct by the hotel. This seems a perfectly reasonable suggestion and I would be interested in hearing arguments for and against this proposal.
Alan, Preston

Make use of the Olympic Village flats which we own. Similar to Alan of Preston's suggestion, except a second home would be offered at a standard rent, rather than hotel accomodation. No modifications allowed - only reasonable repairs, itemised and scrutinised. Easy travel to Westminster, not subsidised as it should be seen as reasonable MP's pay something for their travel. This way there would be no profits made at all.
Mike, Portsmouth

Regarding the expenses row an intelligent solution would be to remove expenses allowances altogether and have purpose built accommodation for 'second home' purposes. Salaries to be properly evaluated on the basis of actual responsibility levels and what they measurably achieve for the tax payer.
Steve, Bristol

Put them all on the dole and housing benefit for 3 months, then pay them £20,000 for the rest of the year - then they might be able to empathise with the majority of people in the country and actually start doing something to help real people
Martin, London

I live in Widnes and work in Manchester. Therefore can I start submitting all my out of pocket costs? I haven't got a moat to clean unfortunately! What a disgrace. They should have an allocated "home" or flat in London paid for by their constituency and that's it. That way the constituency profits if it wants to sell and relocate the property, not the individual.
Danny, Widnes

I agree with Steve from Bristol, let's have purpose-built accommodation for those who have to stay over in London. Most people who travel for their companies and have to stay over, get a basic cost of staying over allowance, we don't get an extra home allowance and neither should MP's. A bed to sleep in plus breakfast is all that is needed, we shouldn't be paying to redecorate their homes etc. Talk about fat cats, these must be the fattest of all.
Shirley, Tunbridge Wells

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