Page last updated at 21:17 GMT, Wednesday, 28 October 2009

MPs 'facing major expenses cuts'

The House of Commons chamber
MPs insist they must have a say on the proposed reforms to their expenses

MPs face wide-ranging cuts to their second homes and other expenses, under proposals from an independent inquiry.

The BBC has learned it will propose an end to mortgage claims, MPs employing relatives and so-called "golden goodbyes" to retiring MPs.

First-class travel and London travel costs would be reduced and a £25-a-day "subsistence" allowance would end.

Sir Christopher Kelly's committee will publish its findings next week but some MPs and staff may challenge them.

However, the prime minister's spokesman said there was no plan to put the recommendations to a vote of MPs.

One Labour MP said there would be a "mutiny" if MPs were not given a say on the proposals.

Separately, the BBC understands former minister Tony McNulty will be rebuked for his expenses claims on Thursday following an investigation by the parliamentary standards watchdog.

It is expected Mr McNulty, who claimed £60,000 towards a second home in which his parents lived, will be asked to repay some money and apologise to Parliament.

Changes phased in

Sir Christopher's committee on standards in public life carried out a series of public hearings and has been studying hundreds of submissions from MPs and the public in the wake of the expenses scandal.

On Tuesday the BBC learned it would recommend major changes to the most controversial allowance - the £24,006 a year second homes payment.

Sources said the committee would recommend MPs only be allowed to claim towards rent, rather than towards mortgage interest as at present - an arrangement currently used by about 415 MPs.

Labour MP Austin Mitchell predicts expenses 'mutiny'

And more than 200 MPs who currently employ relatives would be stopped from doing so under the proposals.

It is is understood that the report will propose some changes should be phased in over five years.

It has now emerged that several other allowances will be reduced - including the resettlement grant to MPs who stand down or lose their seats at a general election.

Criticised by some as a "golden goodbye", it is intended to help outgoing MPs adjust to the costs of non-Parliamentary life and can range from between £32,383 and £64,766, depending on age and time served. The first £30,000 is tax free.

The BBC understands Sir Christopher's report will recommend this be replaced with a small fixed sum, possibly a couple of months' salary.

The £10,400 a year communications allowance - which was the only allowance voted through by MPs without a recommendation from the senior salaries review board - is expected to be axed entirely.

No vote?

And it will recommend an end to the £25-a-day "subsistence allowance" - which allows MPs to claim for food and other items without a receipt - as well as cutbacks to claims for first class rail travel and travel within London.

It will also propose that MPs living within an hour's journey of London should not be able to claim for a second home, and also call for a reduction in the allowance for London MPs.

map of London and south east showing areas within 60 mins travel time of Westminster

Current rules on claiming a second home allowance exclude all constituencies within 20 miles (32km) of Westminster. This is a new rule - three months ago only Inner London MPs could not claim it.

New rules due to be published on 4 November are expected to extend the limit to MPs living within 60 minutes' train journey of Westminster. Exactly how journey times will be judged is still not clear. This map is based on leaving home at 0800 to arrive at Parliament by public transport by 0900 on one day in October 2008.

Prime Minister Gordon Brown told MPs he hoped a new system would be brought in "as quickly as possible".

He said the findings of the review would be announced in a Commons statement on 4 November and given to the Independent Parliamentary Standards Authority to implement.

His spokesman said later there was no plan to put it to a vote of MPs, arguing that MPs had accepted the Parliamentary Standards Act, which took the power to set expenses out of their hands.

But that appears to contradict comments made in June by Justice Secretary Jack Straw who told MPs that the recommendations would be "subject to approval by this House", during a debate on the Bill.

Labour's Austin Mitchell said MPs must be given an opportunity to consider the proposals.

"If we don't have a say, there is bound to be a mutiny," he told the BBC. "You just can't impose them. That would be ridiculous".

Whether it is unfair dismissal or discrimination law we will offer our members whatever protection we can

Dan Whittle
Unite union

All the main parties have committed to accepting the proposals in full, as long as they met three tests of improving transparency, accountability and reducing costs.

Labour MP Sir Stuart Bell, a member of the Commons Members Estimate Committee which carried out its own review of MPs' expenses last year, said MPs would debate the proposals and "have the opportunity if they so wish to amend them".

Conservative MP Roger Gale said the reported proposals were "not realistic".

"I've heard one comment, which I think is absolutely ludicrous, to the effect that apparently somebody living an hour's train ride from London will not be allowed to have a base in London," he said.

'Road to ruin'

But Tory chairman Eric Pickles told the BBC that unpicking the proposals would be the "road to ruin": "It's no use saying 'what about the communications allowance, what about relatives?' - it's a package, we accept it, we move on."

Lib Dem leader Nick Clegg said he looked forward to seeing the report in full and hoped it would recommend a "radical, total overhaul of this rotten system of expenses".

His party has long supported an end to mortgage interest claims.

The Unite union's Parliamentary staff branch has invited spouses and other relatives to a special meeting on the day the report is published.

Chairman Dan Whittle said: "Whether it is unfair dismissal or discrimination law we will offer our members whatever protection we can. Family members of MPs staff save the taxpayer money by working many hours in unpaid overtime."

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