Page last updated at 19:41 GMT, Tuesday, 19 May 2009 20:41 UK

MPs face cap on mortgage claims

Michael Martin outlines new rules on MPs expenses

Mortgage interest and rent claims will be capped at £1,250 per month under interim reforms to MPs' expenses, Speaker Michael Martin has said.

He said all parties had agreed on an immediate ban on second homes claims for furniture, cleaning and stamp duty.

Additionally, MPs will not be allowed to "flip" the designation of their second home during 2009/10.

The statement came after Mr Martin said he would step down amid pressure over his handling of the expenses issue.

'Substantial changes'

Mr Martin told a packed House of Commons that the "fundamental reform" of allowances would result in the system shifting from self-regulation to regulation by an independent body.

The days of MPs being judge and jury of their own pay, judge and jury of their own expenses, are over
Lib Dem leader Nick Clegg

He said all parties were now committed to accepting the recommendations from Sir Christopher Kelly's Committee on Standards in Public Life, provided they met certain tests.

"We have today agreed a robust set of interim measures which will take effect at once and do not pre-empt any more substantial changes to be put forward by the Kelly Committee," he added.

Other measures announced by the Speaker included:

  • 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
  • Members will have to be "completely open" with the tax authorities about whether properties are second homes and liable to capital gains tax
  • With regards to accommodation, only rent, hotel bills, overnight subsistence, mortgage interest, council tax, utility charges and insurance will be allowed
  • 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.

Mr Martin sat down to applause from MPs.

Leader of the Commons Harriet Harman will make a statement on the reforms on Wednesday and allow MPs a chance to "air their views".

The announcement came just hours after Mr Martin told MPs he intended to stand down, so becoming the first Commons Speaker to be effectively forced out of office for 300 years.

In a brief statement, he said he would resign on 21 June, with a successor set to be elected by MPs the next day.

Mr Martin will also step down as an MP, prompting a by-election in his constituency of Glasgow North East.

'Judge and jury'

Earlier, Prime Minister Gordon Brown told a press conference that Westminster could not continue to "operate like some gentlemen's club" in which MPs were "judge and jury" of "pay and rations".

Mr Brown added: "If MPs continue to set their own codes and rules, however objectively they try to do so, the public will always question the transparency and the standards that they rightly demand."

But Mr Cameron said changing the rules and forcing MPs to pay back wrongfully-claimed expenses was not enough.

"What people really want is the chance to go out and put their cross in a box for the politicians they want to represent them in this parliament," he said.

"That's why we say let's have a general election."

Lib Dem leader Nick Clegg welcomed the changes, but said the public was looking at Westminster with "disgust and with dismay".

He added: "The days of MPs being judge and jury of their own pay, judge and jury of their own expenses, are over."

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