Page last updated at 12:04 GMT, Wednesday, 9 September 2009 13:04 UK

MPs expenses: What might change?

The independent Committee on Standards in Public Life has held a series of hearings and gathered evidence over the summer about a revised system of MPs' expenses. Emma Griffiths reports on what form next month's reforms might take.

SECOND HOMES
Olympic Village artist's impression
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The most controversial allowance, which gave rise to some of the more eye-catching MPs' expenses controversies, looks certain to be reformed in some way. One option the committee has looked at during their hearings is whether MPs should be stopped from claiming mortgage interest payments - allowing them to pocket any profit from selling on a taxpayer-funded property. Instead they would be restricted to claiming for rent. Some MPs have sent submissions arguing that supporting mortgage interest is the cheaper option for the taxpayer but committee chairman Sir Christopher Kelly said in practice, those claiming mortgage interest "tend to claim more than those who claim rent". The committee made several references to the Ministry of Defence, which uses a rental agency to allocate its staff properties in London. They get a choice of three. Another option popular with the public but less so with MPs was the "barracks" option - where instead of an allowance Parliament buys a block of flats which MPs can live in. MPs were keen to stress the importance of the "constituency link" and having a second home, they also asked that, if mortgage payments are banned, it be done gradually to ease the blow for those who already own properties supported by public funds. There is also a question about whether the taxpayer should support larger flats for MPs with families - so as not to put women and others off running for Parliament.

LONDON COSTS ALLOWANCE

This is the expense MPs who represent inner London seats get rather than a second homes allowance - it went up this year from £2,916 to £7,500. Might it be coming back down again? Sir Christopher said that "appears on the face of it to be rather larger than most people's London allowances" and asked MPs to explain why that was an "appropriate figure". The chairman of the Senior Salaries Review Board (SSRB) - which makes recommendations on pay and allowances - Bill Cockburn, was rather more blunt. He told the committee the hike had been "outrageous" and "totally unjustified", as his board had recommended it be increased to £3,500. He said the Commons Members' Estimate Committee had argued it should include compensation for "unsociable hours".

SUBSISTENCE ALLOWANCE
Tony Blair holding a cup of coffee

This £25-a-night allowance caused a rash of headlines in July when it emerged MPs could still claim it, for things like food, without submitting receipts when away on Parliamentary business. Labour MP Sir Stuart Bell said it was based on "comparisons with other professions" and had been "considered appropriate" - as it also covered constituents or others who come to join MPs. Sir Christopher queried whether those other professions had access to subsidised meals. DUP MP Gregory Campbell said his party did not claim it on principle: "We see no reason for that claim procedure remaining. It should be dispensed with, in our view."

RESETTLEMENT ALLOWANCE

Paid to those who step down or lose their seat at a general election, some MPs can expect payoffs in excess of £60,000 - the first £30,000 of which is tax free. But should MPs who plan to quit a year ahead receive what is effectively severance pay? The SSRB had previously recommended it be stopped for MPs who resign or retire but MPs had rejected that. The committee said public opinion was strongly against the "golden goodbye" and that many urged them to axe it before the next election. Several MPs said the reason retiring MPs got it was due to the case of Willie Hamilton, the late Labour MP who chose to stand for re-election in a Tory stronghold rather than retire, thus making him eligible for the grant. Harriet Harman said there had been concern axing it would mean there was a "perverse incentive" for MPs not to retire. Others suggested that there is much uncertainty around when a general election will be called, so MPs cannot properly plan their retirement.

COMMUNICATIONS ALLOWANCE

Politically divisive, this £10,400-a-year payout is also controversial as it is thought to be the only expense voted through by MPs, without first having been recommended by the SSRB. The body was asked after the vote if £10,000 was considered appropriate - it had consultants do some costings and decided it was "reasonable" but also said another allowance, the incidental expenses provision, should be reduced as a result. It was not. Most Labour MPs and some Lib Dems tend to back it while the Tories are against it. Professor Anthony King, a member of the original Nolan committee, said it encouraged MPs to send "personal propaganda to their constituents at taxpayers' expense". There is an argument it was introduced to limit huge amounts that had been spent on House of Commons stationery. But others say, even though it is not supposed to be used for party political purposes, it benefits the incumbent MP. One option the committee explored was replacing it with a taxpayer-funded annual report, to include details like voting and attendance records.

ABSENT MPS
House of Commons benches

Sinn Fein MPs do not take their seats in the House of Commons - as Republicans, they will not swear allegiance to the Queen and say they have a 100-year-old tradition of abstentionism. In that case should they be getting an attendance allowance? The issue came up again and again in the hearings but some were not keen to address it. Ms Harman said, on the issue of Northern Ireland, "there is always much more than meets the eye". She did not want to offer any solution. Many thought it should be stopped. Lib Dem frontbencher David Heath cautioned: "Northern Ireland politics is difficult enough without other members making up policy as they go along." The committee mentioned one solution might be to find a way around the oath of allegiance problem. But MLA Alex Maskey, who represented Sinn Fein at the hearings, said abstentionism was also a long-standing tradition of the party. As Irish Republicans, they saw no reason for taking part in the affairs of a British Parliament. He said Sinn Fein MPs were in London "regularly", that the party advertises itself to be "abstentionist", is elected on that basis but is "very active" and offers an "outstanding constituency service" to those they represent, both in Northern Ireland and in London. He also said that Sinn Fein MPs do not get salaries nor a £100,000 a year policy development grant.

OFFICE COSTS

Much was made of whether MPs should be getting public money to fund constituency offices, if those offices were rented from their political party. Was it a way of subsidising party funds - and could the general public be reassured there was a proper division between non-political constituency staff and party activists - particularly at election time? Several MPs argued that as long as they were not paying above the market rate, often taxpayers got a very good deal from party-owned buildings.


SECOND JOBS
Dentist

Are the days of MPs having multiple directorships or working as barristers and dentists over? Opinions were split roughly, although not exclusively along party lines. Labour's Harriet Harman did not explicitly say they should be banned but said second jobs dated "back to the days when there was not so much expectation" on MPs from their constituents. Lib Dem Nick Harvey said MPs should "not be making caboodles" on the Stock Exchange but added that banning all outside earnings risked narrowing the group of people who wanted to become MPs. Sir Stuart Bell pointed out that several MPs wrote diaries or novels in their spare time and suggested a total ban on outside interests was not "feasible". Tory Ann Widdecombe, whose outside jobs have included appearing on TV's Celebrity Fit Club, said they were important as MPs were more independent and not financially dependent on the party whips. Many were concerned banning second jobs might mean a Commons filled with professional politicians who had little real experience of how legislation affected businesses and others.

EMPLOYING RELATIVES

Should MPs be allowed to employ wives, husbands and in some cases children at public expense to do their office work? Sir Christopher noted that "looks odd". Even if jobs were advertised widely there was the problem that MPs would be interviewing their own spouses. The committee said it heard some evidence from other MPs' staff that there was a difficulty if they had a complaint about a colleague who happened to be related to the MP. But many MPs - including Alan Duncan and Ann Widdecombe who do not employ any relatives themselves - defended their colleagues' right to do so. Many are "absurdly high calibre", the committee heard, taking pay cuts to support their spouse and working all hours. Sir Stuart Bell said it was impossible for MPs to work without the help of someone "extraordinarily close" - although he said MPs should be limited to employing just one member of staff. The committee pointed out other legislatures had moved to ban the practice and "probably a majority" of submissions said it should be banned entirely. Roger Gale MP, who appeared before the committee with his wife Suzy, who works for him, said that was not fair as other legislatures were "very different".

MPs' SALARY
Money

This is not, strictly speaking, an area the committee will make recommendations on. But there was much suggestion during the expenses scandal that MPs had been relying on their expenses because their salaries had not been raised in line with other professions, because of political expediency. Among MPs suggesting a pay hike was the veteran Tory Patrick Cormack who suggested the £65,000 salary should be doubled and all allowances scrapped. The SSRB - which makes recommendations on MPs' pay - told the committee its assessment was that, relative to other public sector comparators and taking into account pensions, MPs got about 10% less. It is due to look again at the issue in 2010/11. Mr Cockburn said the SSRB would not suggest that all allowances which are removed are simply included in an expanded pay packet but would consider "what is the appropriate level of pay that is justified?"



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