Page last updated at 14:25 GMT, Monday, 29 March 2010 15:25 UK

Q&A: MP expenses row explained

The final scheme to overhaul MPs' expenses, designed to restore trust in Parliament, is to be revealed. Here is a guide what the expenses furore was all about.

HAVEN'T WE ALREADY HAD AN EXPENSES REVIEW?

Yes, there was a seven-month inquiry last year in the wake of the expenses scandal. It came up with a lot of proposals to radically change the system and restore trust last November. The Independent Parliamentary Standards Authority was set up to run the new system and, after consulting over the proposed changes, has decided what they will be.

WHAT'S CHANGED?

Quite a lot. MPs will no longer be able to buy second homes then claim back mortgage interest payments on expenses. Instead those who are eligible will only be able to claim to rent the equivalent of a one-bedroom flat, up to £1,450 a month. Travel claims have also been reduced - only fares equivalent to standard travel will be allowed and all claims will require receipts. But MPs will still be allowed to employ their spouse - although only one relative/co-habitee will be allowed. All expenses claims will also be routinely published on a "rolling" basis.

REMIND ME - WHY DO WE NEED A NEW MPs' EXPENSES SYSTEM?

Basically the old system is widely regarded as having been discredited. From the case of Derek Conway, who lost the Tory whip after being heavily criticised for paying his sons too much from public funds, to former Labour Home Secretary Jacqui Smith, who apologised for mistakenly claiming for an adult film, to MPs claiming for mortgages on homes that relatives live in, MPs' expenses have been making headlines for nearly two years.

SO, IS THIS THE LAST OF THE EXPENSES REVIEWS?

Theoretically yes, this is the expenses scheme which will be in place for new MPs after the general election. It does not need to be voted through by MPs. Those who keep their seats will also be subject to changes, although they will be able to keep claiming towards existing second homes until August 2012. They will have to give up some of the profits, Sir Ian said.

WHY DO WE PAY FOR MPs' HOMES?

Most MPs say they have to live in two places - in their constituencies and in London where they attend Parliament. They have been allowed to claim expenses to cover the cost of running a second home. What was known as the "additional costs allowance" was worth up to £24,006 in 2008/9 for MPs representing seats outside central London. It covered things like mortgage interest payments on second homes and utility bills - but officials also allowed claims for items of furniture, electrical goods like televisions, refurbishments and up to £400 each month for food. It was just one of several allowances available to MPs. What MPs can claim

SO, WHAT WENT WRONG?

Details of claims under the second homes allowance used to be kept secret, but Freedom of Information campaigners won a High Court case to get them released after years of battling Commons authorities. There was uproar in May 2009 when claims for expensive TVs and furniture emerged alongside stories about MPs who claimed for more than one property by "flipping" their designated second home , or did not pay capital gains tax on sales of second homes or over-claimed for mortgages. Constituents were so angry at the revelations in the Daily Telegraph - which had obtained details of all expenses claims - that many MPs announced they would be repaying claims and some have said they will stand down at the general election.

DID THEY BREAK ANY RULES?

MPs have said they acted within the rules and some seemed to base much of their defence on the fact that their claim was paid out by the fees office. It does seem that the rules were rather vague or lax . But it is also the case that the UK's Parliament has worked for centuries on the basis of MPs being "honourable members" so in most cases the fees office was, perhaps not surprisingly, unlikely to challenge an MP if they had given their signed declaration "that I incurred these costs wholly, exclusively and necessarily to enable me to stay overnight away from my only or main home for the purpose of performing my duties as a Member of Parliament" - some critics say this shows they had the ultimate responsibility to ensure claims were reasonable demands on the public purse.

DID THEY REPAY ANY MONEY?

Yes, some did so voluntarily in the face of public anger, others were ordered to do so by their party leader. But many more were told to by Sir Thomas Legg, the expenses auditor tasked with going over past claims dating back five years. He ordered MPs to repay a total of £1.12m which he judged to have been wrongly paid out in second homes expenses. He actually asked for £1.3m to be paid back by 390 MPs but a separate appeals process was set up and some were successful in challenging the requests.

HOW MANY MPS WOULD BE AFFECTED BY EXPENSES REFORM?

In theory a lot, about 415 MPs have claimed for mortgage interest payments through the second homes allowance, but not all of them will still be MPs after the general election. About 200 MPs employ relatives, according to the official Parliament register of employed relatives , they will have to look at new guidelines. Moves to stop all MPs with London seats claiming for a second home were also confirmed - now 128 constituencies will not qualify, although some MPs who live within commuting distance always chose not to claim.

WILL WE KNOW WHAT MPS ARE CLAIMING IN FUTURE?

Yes. Until recently claims were only published on an annual basis under general headings and Commons' authorities fought efforts to make more public. After the scandal that was increased to quarterly publications and now Ipsa says all claims will be published on a "rolling" basis - including those that are rejected. There was much criticism of the amount of key details that were blacked out when receipts were published in June 2009. You can check your MP's claims on the Parliament website.

WERE ALL MPS ACCUSED OF ABUSING EXPENSES?

No, many were not. Many take exception to suggestions they padded out their salaries with the allowance. Others vehemently resent being accused of wrongdoing over expenses when they were acting on the advice of officials in the House of Commons fees office. Some MPs who were entitled to claim the allowance because they had constituencies outside inner London, chose not to. Others made modest claims.

SO, IS THIS THE END OF NEWS ABOUT MPs' EXPENSES?

Probably not, The new system will be in place by the start of the next Parliament - when more than 100 existing MPs will have stood down and others will have lost their seats - and with the general election looming, expenses is likely to remain high profile. There MPs, who all deny wrong-doing, have been charged in connection with their expenses.



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