Page last updated at 16:29 GMT, Wednesday, 14 October 2009 17:29 UK

Clegg wants more expenses repaid

"MPs have converted themselves, in some cases, ... into spivvy property speculators"

Lib Dem leader Nick Clegg has said the MPs' expenses audit should be widened to force those who "flipped" homes or avoided capital gains tax to pay up.

Both practices were heavily criticised during the expenses scandal although they had been allowed under the rules.

An audit of claims since 2004 has introduced retrospective caps on some, angering MPs who have been asked to pay back money that was previously cleared.

But there there was no mention of the issue at prime minister's questions.

However, Mr Clegg was loudly jeered as he stood up to ask his questions of Prime Minister Gordon Brown.

BBC deputy political editor James Landale said the Labour and Conservative leadership were desperate to draw a line under the affair but Mr Clegg was asking for auditor Sir Thomas Legg to go further.

'Property speculators'

The Lib Dems have long called for changes to the expenses system to stop MPs profiting from taxpayer-funded homes and have called for them to pay back any profits when they are sold.

Writing in the Telegraph Mr Clegg, who has been asked to repay £910 of the £3,900 he claimed for gardening between 2006 and 2009, said Sir Thomas had not dealt with MPs who accrued large sums through property deals.

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He said to "rebuild faith in politics, there can be no half measures" and said people "expected the worst offences to come under the toughest scrutiny".

He added: "Every single MP who flipped, avoided capital gains tax or claimed for non-existent mortgages must be forced to repay the money and held to account."

Under the rules MPs were allowed to tell Commons officials that one property was their "second home", on which they could claim expenses - but tell the taxman it was their "main home" on which they did not have to pay capital gains tax when they sold it.

Angry MPs

Several were accused of "flipping" their second home - by changing the designation of the property they claimed expenses on, sometimes several times, which allowed them to refurbish several homes at public expense. Others are being investigated for claiming for a mortgage after it was paid off.

This week about 600 MPs received letters from Sir Thomas, the independent auditor appointed by Downing Street in the wake of the expenses furore, who has been through all the claims made over five years.

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However, many are furious that they are being asked to repay claims for some services, saying they were within the rules when the claims were made, and approved.

Sir Thomas has applied his own annual limits of what he thinks was reasonable to claim - £1,000 a year for gardening and £2,000 a year for cleaning - and has asked those who exceeded these amounts more to repay the difference.

There is also concern he has asked for paperwork to back up mortgage interest and rental agreements and has warned that those who fail to do so will be "recommended to repay the whole of the allowance granted for the mortgage etc".

'Profoundly wrong'

Gordon Brown and David Cameron have urged their reluctant MPs to obey Sir Thomas and pay up, but some are believed to be preparing to refuse to pay.

Labour backbencher Alan Simpson told BBC Radio 4's Today programme Sir Thomas had got it "profoundly wrong".

"If he thinks that the principle of him coming in and retrospectively re-writing the rules would stand up before the courts, then I think he should test it before the courts," he said.

Commons leader Harriet Harman told BBC Radio 4's Today programme the issue would not be "sorted out by a competition between the political leaders" or in the courts.

"This is an issue for the whole House of Commons to do what is necessary to restore public confidence," she said.

She said the "payback" being requested was "another step on the important path to ensuring the public know once and for all that we've sorted this system out."

Business Secretary Lord Mandelson said Sir Thomas had "clearly gone way beyond" what he was asked to do but a process had been started with which MPs had to engage and "take on the chin".

But he added MPs felt a "huge sense of unfairness in the damage that has been done, in many cases quite needlessly and excessively, to the reputations of members of Parliament" throughout the expenses crisis.

Shadow Commons leader Sir George Young, the former chairman of the Commons standards and privileges committee, said he believed, by the time Sir Thomas finished his review, "there will be very few MPs who will hold out and defy what their party leaders want them to do".

Meanwhile, Conservative Eleanor Laing has repaid £25,000 in parliamentary allowances.

The Epping Forest MP faced widespread criticism for not paying £180,000 capital gains tax on the sale of two Westminster flats by telling tax authorities they were her principal residence, when they were designated her second home for expenses purposes.

Sir Thomas had not asked her to repay any money, she said.



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