Page last updated at 20:28 GMT, Thursday, 7 January 2010

Expenses chief denies backing away from key reforms

Sir Ian Kennedy
Sir Ian said he was not convinced taxpayers should fund payoffs for retiring MPs

The man in charge of running a new system of MPs' expenses has denied watering down radical reforms proposed after a six-month inquiry.

Sir Ian Kennedy is consulting the public on whether key changes, such as a proposed ban on MPs employing relatives, should come into force.

He said he agreed with the ban but felt opposing arguments should be discussed.

He also suggested tougher action in some areas, such as ending generous pay-offs to retiring MPs.

The BBC's Deputy Political Editor James Landale said while Sir Ian had endorsed some proposals agreed by party leaders last year, he had also raised the prospect of significant changes in some areas.

This meant, said our correspondent, that the future shape of the expenses regime was effectively "in flux".

Sir Ian, chairman of the Independent Parliamentary Standards Authority (Ipsa), was appointed to run the new system of MPs' expenses following a public outcry over leaked expenses claims last year.

No mortgage claims

Gordon Brown, Tory leader David Cameron and LibDem leader Nick Clegg all endorsed proposed expenses rules unveiled by Sir Christopher Kelly's Committee on Standards in Public Life.

The proposed rules included a ban on MPs employing relatives and an end to their right to claim mortgage interest payments on second homes.

But Sir Ian, who was selected to head the new body by a committee of long-serving MPs, was given the power to decide which ideas go forward and form part of the new system, due to come into effect after the general election.

James Landale
BBC deputy political editor James Landale

The Independent Parliamentary Standards Authority is flexing its statutory muscles.

It accepts the broad principle of new rules on expenses recommended last year - such as MPs not being able to own publicly funded second homes.

But chairman Sir Ian Kennedy is suggesting some changes at the start of a brief public consultation.

He leaves open the door to MPs employing family members.

He says only MPs within London's Tube network should be banned from claiming rent for a second home.

MPs should be able to claim for security measures, not just rent and utilities.

And he says it is for Parliament to decide whether any capital gain made on second homes before the new rules apply is paid back to the Treasury.

But he does recommend tightening some rules, include scrapping entirely a resettlement grant for MPs leaving Parliament.

In a consultation document published on Thursday, Sir Ian backed Sir Christopher's recommendation that, in future, MPs only claim for rent or hotel stays - not towards mortgage payments on second homes.

He said he was giving "detailed consideration" to a suggestion that Parliament use a rental agency to find MPs properties.

But Sir Ian's report suggested MPs should be allowed to claim for "approved security measures" - something that was not backed by Sir Christopher's inquiry.

The report agreed that MPs with existing mortgages who keep their seats at the general election should continue to get support for a "transitional period" and that any profit from house price rises during that time should be surrendered to the exchequer.

However the document said "it is for Parliament to decide whether to take steps to recover gains" - opening the possibility of MPs voting on whether profits from second home sales should be returned.

Sir Ian said that was because it might be necessary to change tax law to allow HM Revenue and Customs to recover the money but he was committed to the idea that profits should be returned.

"I don't recognise the notion that we were watering down on capital gains," he said.

'Starting point'

MPs who represent inner London seats have not been allowed to claim for a second home and that was extended to MPs with seats within 20 miles of Westminster last year.

The expenses inquiry recommended that be extended slightly further to cover MPs within "reasonable commuting distance" of Westminster.

But Sir Ian suggested that only those with constituencies with stations in the London transport zones one to six should be stopped from claiming.

We feel it is right to allow an opportunity to hear considered views on whether prohibiting the employment of family members is necessary and proportionate
Ipsa consultation

That means MPs from places outside the M25 with good transport links to Westminster - such as Guildford - might be able to claim second home allowances.

Sir Ian told BBC Radio 4's World at One the inquiry had left it to Ipsa to "work out the details" and the suggestion was "only a starting point" as the body had not yet decided on the distance.

He said that about a third of the Kelly recommendations were not within Ipsa's scope anyway, adding: "To say that we are there to implement Sir Christopher's recommendations is somewhat lazy.

He added: "We have tried to translate the invitation from the committee on standards in public life to develop a notion of 'reasonable commuting distance' into something that can be understood, is practical and is workable."

More than 200 MPs employ relatives but Sir Christopher's inquiry said the practice should be phased out.

Sir Ian insisted he agreed, telling the BBC: "We agree with everybody else ...that family members should not be employed."

Golden goodbyes

But his consultation document said Ipsa has already heard "very strong views" expressed that in practice family members might be the best qualified applicants for the posts.

Sir Ian said to "be fair" Ipsa wanted to "air those arguments" so had invited views on various options.

His consultation document suggested MPs with children and those with "caring responsibilities" might claim higher expenses so as not to "unduly deter" any group of people from standing for election.

Sir Christopher's inquiry recommended a cut to the generous "golden goodbye" payoffs for MPs who step down or lose their seats at a general election.

Currently they can get pay-offs of up to £65,000 - depending on how long they have been an MP - the first £30,000 of which is tax-free.

Sir Ian's paper suggested he might go further, adding: "We remain unconvinced of the need for payments to MPs on leaving parliament."

He pointed out that some professions "where there is a risk of unexpected job losses" people can take out their own insurance policy.

And his report added Ipsa does not believe "there is a clear-cut case that the taxpayer should bear the cost of supporting those arrangements".

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