Page last updated at 14:13 GMT, Thursday, 10 December 2009

MPs who break expenses rules to lose resettlement grant

Houses of Parliament
The government says the new regime will be in place by the start of the next Parliament

MPs who break expenses rules could lose their right to lucrative resettlement grants under planned new laws.

MPs who stand down can get up to £65,000 in resettlement grants, often described as redundancy payments.

The plan is one of a string of reforms recommended by Sir Christopher Kelly which the government says it will bring into law by the next election.

It comes as the latest details of expenses claimed by MPs under the second homes allowance are published.

In a written ministerial statement, Commons leader Harriet Harman said MPs who break the rules could already have their pay docked but the government would now legislate to extend this to allowances.

Sir Christopher recommended scrapping resettlement grants for MPs retiring or standing down voluntarily, suggesting they should receive eight weeks' pay instead but there is no legislation planned to implement this before the next election.

Compliance officer

Other reforms that will be put into law before polling day include giving the new Independent Parliamentary Standards Authority (IPSA) the power to set and administer MPs' pay, based on recommendations from the Senior Salaries Review Body.

This House of Commons has yet to fully resolve this damaging episode
Harriet Harman, commons leader

The Parliamentary Standards Bill, the emergency legislation drawn up in the wake of the expenses scandal, will also be amended to allow IPSA to appoint a compliance officer to investigate alleged breaches of the rules.

IPSA will also be given the power to force MPs to pay money back and impose fines on MPs who break the rules - something that was removed during the bill's passage through Parliament.

The government came under fire from the opposition after reforms to the MPs' expenses regime were left out of the Queen's Speech setting out Gordon Brown's legislative programme.

There were also reports of a clash between Sir Christopher and the man appointed by MPs to implement his proposals, Prof Sir Ian Kennedy.

'Public anger'

Sir Ian, chairman of IPSA, was said to be unhappy with Sir Christopher's proposal to compel MPs to return any capital gains made from the sale of second homes to the taxpayer.

He was also reportedly concerned about the proposal to ban MPs from employing relatives on their payroll.

But a joint statement issued by Justice Secretary Jack Straw and Commons leader Harriet Harman, said the two men had been in discussions and were both in agreement with the proposed approach.

Ms Harman said: "This House of Commons has yet to fully resolve this damaging episode.

"But with clear acknowledgement of the public anger, with firm action already taken, with the Kelly report and the establishment of the Independent Parliamentary Standards Authority - this will be resolved."

Mr Straw said the new independent regulatory system would be "in place for the start of the next Parliament".

Other proposed reforms in Sir Christopher Kelly's report include ending claims for mortgage interest payments on second homes - instead MPs will only be able to claim for rent or hotel stays.

He also called for a ban on the "flipping" of residences and an end to the right to claim for gardening and cleaning costs and a requirement for any MP able to commute to do so.

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