Page last updated at 19:41 GMT, Wednesday, 4 November 2009

MPs' mortgage claims 'should end'

Sir Christopher Kelly: "In future MPs should only be reimbursed for cost of rent"

MPs should stop claiming for mortgages and employing relatives with public money, an expenses review recommends.

Both should be phased out over the next Parliament and any profits made on properties until then should go to the taxpayer, it says.

Party leaders urged MPs to accept the findings but a new standards body will decide whether to implement them.

Inquiry chairman Sir Christopher Kelly told the BBC he was "fairly reassured" but they had left some "wriggle room".

'Valuable asset'

Launching the report by the committee for standards in public life, he said it had taken a "cold, hard look at what went wrong" before the expenses scandal broke.

It has recommended that generous resettlement grants for MPs who voluntarily step down be stopped - but not until the election after next.

KEY PROPOSALS
MPs to claim for rent not mortgages
Ban on employing relatives
Ban on MPs near London claiming for second home
Reduced resettlement grants

If accepted by the new Independent Parliamentary Standards Authority (IPSA), MPs would get eight weeks' pay instead - currently long-serving MPs can get a payoff of up to £64,000.

The committee pointed out that the Commons standards committee could already remove the grant from misbehaving MPs and said it "should always consider recommending" it as a sanction.

On mortgages, he said MPs should not expect "to acquire a valuable asset at public expense".

Capital gains

Claims for mortgage support should continue for the lifetime of the next Parliament but any "capital gains" on the property over that time should be "surrendered to the taxpayer".

Other recommendations include axing the £10,400 a year communications allowance and getting a commercial rental agency to find properties for MPs.

POLITICAL ANALYSIS
Ross Hawkins
From political correspondent Ross Hawkins:
Sir Christopher Kelly urged MPs to accept his ideas as an entire package, not a menu of options. He won't have heard much from the front benches to worry him. His work is being praised from all sides. But the real work will fall to the university professor who is to take charge of the new Independent Parliamentary Standards Authority - Sir Ian Kennedy. MPs jeered when they heard he would be paid up to £100,000, which is much higher than their salaries. But with a fair few members fuming about the expenses reform - some quietly, some noisily - Sir Ian will be working hard for his money. And the real debate won't now take place against the Commons Green benches, but in submissions to him.

An interim rule already in place, that MPs within 20 miles of Parliament do not claim for a second home, should be extended to include about 12 MPs who live a little further out but actually have quicker journeys to Westminster.

On other issues, the report said MPs should not be banned from taking outside employment but it should be restricted to "reasonable limits".

It also suggested IPSA's powers be strengthened and that it might in future also look at MPs' pay and pensions.

Sir Christopher said the proposals were "reasonable and fair" and would ensure MPs were "properly supported" while providing stronger safeguards for the taxpayer.

He said party leaders' demands that his recommendations reduced costs, increased transparency and increased accountability "have all been met".

And he warned against anyone "distancing themselves from earlier expressed determination to implement" his report.

'Backsliding' warning

In a letter to Sir Christopher, the prime minister says he "accepts" the report but it will be for the new standards body IPSA to implement.

KELLY REPORT

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Lib Dem leader Nick Clegg and Tory leader David Cameron have said the recommendations should be accepted "in full".

Mr Clegg warned against "backsliding" and said it was "ludicrous" to leave it to IPSA to decide what to implement.

Mr Cameron said it was important that MPs accept the proposals in full, adding: "Isn't that an essential part of restoring faith in Parliament, in politics and in this House of Commons, that all of us care about?"

'Wriggle room'

The prime minister said public trust must be restored adding: "That is why we should accept the Kelly recommendations and make sure they are implemented as quickly as possible."

But asked if he was reassured that the proposals would be accepted, Sir Christopher told BBC Radio 4's World at One he was "fairly reassured" but there was "always wriggle room" with politicians.

Leaders agree on expenses reforms

He also rejected claims that cuts to expenses would mean only wealthy people would become MPs and said if that was a risk, it should be addressed through pay.

He told the BBC the proposals would simply "reimburse MPs for expenses properly incurred doing their important job" adding: "I don't accept that doing that would have the effect of discouraging people from becoming members of Parliament."

Solicitor General Vera Baird suggested MPs' pay could be looked at when the proposals are examined.

She told the BBC if there was a danger "ordinary" people on poorly paid jobs were going to be "priced out" of Parliament "then of course pay will have to be looked at, but that's far from clear at the moment."

Commons leader Harriet Harman and her Tory shadow Sir George Young said IPSA must work within employment law - some spouses have said they may challenge any effort to ban them from working for MPs.

But Ms Harman said the Kelly report "should be taken as a whole" and said IPSA had already started work and a new system would be in place for the next election.

In a brief debate on the expenses proposals, several MPs warned Ms Harman it would be wrong to "cherry pick" recommendations they liked.

The union Unite is considering whether it can seek a judicial review of any decision to ban spouses and partners working for MPs.

But it said it would not take any action until hearing how IPSA wants to implement Sir Christopher Kelly's proposals.



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