Page last updated at 20:07 GMT, Wednesday, 22 April 2009 21:07 UK

Leaders deadlocked on MP expenses

There has been a long-running row over MPs' expenses

Party leaders have failed to reach an agreement on changes to MPs' controversial second homes allowances.

Gordon Brown met David Cameron and Nick Clegg to discuss his plans to replace them with a daily attendance allowance.

But both the Tory and Lib Dem leaders say that would be less transparent as it would not require receipts.

Mr Clegg said the PM "won't budge" on the idea, which MPs will vote on next week. Mr Brown said earlier action was needed immediately to restore trust.

His proposal to end the second homes allowance, worth up to £24,000 a year for MPs outside central London, had been cautiously welcomed by Mr Cameron and Mr Clegg but both had raised concerns about the idea of replacing it with a flat-rate daily attendance allowance.

'No more bathplugs'

They said Mr Brown had been unable to give them a figure on what the daily allowance would cost.

The Conservatives want to replace the second homes allowance with one that would let MPs claim mortgage interest payments - subject to a cap - rent, utility bills, council tax but not for furniture, TVs or home decorations. The overall amount paid out would be lower, they say.

"No more furniture, no more redecoration, no more bathplugs and certainly no pornography - that's what people want, a cleaned up system," Mr Cameron said after the meeting.

"In the end the prime minister is saying: 'Let's have a system that is about giving you cash with no receipts and no transparency' - that can't be right."

We are putting forward proposals that deal with this problem and deal with it now
Gordon Brown

Mr Clegg told the BBC: "Gordon Brown won't budge. He wants to have this system where MPs would be given cheques for turning up to work."

He said it was a shame they had not reached an agreement, but he would put forward his own "more radical" proposals to change expenses in the vote next week. The Liberal Democrats want to stop MPs claiming mortgage interest payments, forcing them to claim rent instead.

A Downing Street spokesman said the three party leaders had a "constructive discussion" but sources close to the prime minister said tinkering with the second home allowance would not bring back public trust.

Mr Brown's proposal surprised many at Westminster on Tuesday as he had previously appeared to rule out any changes before an independent committee finished its review of pay and expenses at the end of the year.

'Less generous'

At prime minister's questions on Wednesday Mr Mulholland stood up to ask him: "Why on earth are you proposing a system whereby allowances are not based on actual receipts and need? We are going towards a system of daily allowances where the public would believe it was another example of snouts in the trough."

Mr Brown replied his proposals "deal with this problem and deal with it now".

He said: "This is a decision for the House itself. The one thing that is absolutely clear is that the present system does not work. The one thing that is absolutely clear is the present system needs to be changed and the one one thing that is absolutely clear is that action has got to be taken immediately."

Later, in a debate on the Budget, the Conservative former Cabinet minister John Redwood suggested the PM's proposals might well cost even more than the current system. Mr Brown has said he wants a "less generous" system.

MPs are expected to vote on proposed changes next week and Mr Brown wants changes in place by July - the same month detailed expenses claims by all MPs, including receipts, dating back to 2004 are due to be published after a lengthy Freedom of Information battle.

Home Secretary Jacqui Smith and work minister Tony McNulty are both being investigated over their claims under the current second homes allowance - both say they acted within the rules. Ms Smith has apologised for "mistakenly" claiming £10 for two adult films watched by her husband.

Sir Christopher Kelly, who is leading the independent review of MPs' expenses, said he had been assured that the changes were only interim measures, ahead of his findings.

Details of the proposed flat rate allowance are not known - Downing Street says the rate would be set independently by the Senior Salaries Review Board.

MPs may not know how much the rate should be when they vote, the SSRB usually takes up to a year to calculate pay rises for MPs, which are based on public sector deals.

The BBC's political correspondent Carole Walker said she understood the stipend would be more than £140 a day and could be checked by the swipe card MPs use to enter Parliament.

Other proposed changes are that the House of Commons, rather than MPs, would take over responsibility for employing MPs' staff - addressing concerns about MPs who employ relatives such as Conservative MP Derek Conway who was reprimanded for overpaying his two sons for work as researchers.

MPs would also be obliged to give more details of income they receive for work outside Parliament.

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