Carry on claiming: Whitewash storm as new expenses watchdog proposes to rip up reforms and return power to the MPs who milked the system

Published 08th Jan 2010

MPs were given licence to carry on milking expenses yesterday as the man charged with cleaning up the system was accused of a whitewash.

Sir Ian Kennedy, the head of the Independent Parliamentary Standards Authority, was attacked for 'watering down' the tough proposals already drawn up to prevent members cashing in.

Under his plan:

* MPs will have the last say on whether to ban members from keeping capital gains made on taxpayer-funded second homes. That could see MPs making profits at taxpayers' expense for another five years.
* Those from the Home Counties would be allowed to go on claiming the second homes allowance, with only MPs in London banned.
* MPs could continue to employ relatives as staff.
* Sir Ian refused to say how much MPs could claim in rental costs - another weakening of the Kelly Report's call for a cap of £1,250 a month.

All four measures represent a dramatic watering down of the toughest rules drawn up by Sir Christopher Kelly, chairman of the Committee on Standards in Public Life, who issued his blueprint for reform in November.

Last night Labour MP John Mann branded the new proposals 'outrageous'.

He said: 'This is a watered down version of Kelly. There's a lot of tinkering. What it does is create an opportunity for MPs to take this into the next parliament and mess it up.

'He's not done the research Kelly did but he has concluded that someone who commutes 20 minutes to Waterloo Station is worthy of a second home.'

Tory MP Douglas Carswell said: 'It is quite wrong for the taxpayer to continue paying for homes which MPs can sell on to make a profit. MPs should not be able to make any
private gain using public money.'

Liberal Democrat MP Norman Baker said: 'This looks like a weakening of the Kelly proposals which were accepted by the main party leaders. This would not be sensible for Parliament and would not be welcome by the public.'

Gordon Brown, David Cameron and Nick Clegg have all said the Kelly Report should be 'implemented in full'.

IPSA was created to police the new system. Its paper published yesterday will now be subject to a public consultation that runs until February 11. IPSA will then draw up final rules which will come into force in the next Parliament.

Sir Ian, a close friend of Tony Blair's former spin doctor Alastair Campbell, adopted Sir Christopher's plans to ban MPs from claiming on second homes within five years - forcing MPs into rental accommodation instead.

But he torpedoed the Kelly Report's flagship measure to force MPs with existing mortgages on their second homes to repay any capital gains they make after November last year to the taxpayer.

IPSA's document concludes: 'It is for Parliament to decide whether to take steps to recover gains arising from the payment of mortgage interest from public funds. This might be achieved by a resolution of the House of Commons or by legislation.'

Either method would give MPs a chance to throw out the proposal. IPSA staff admit that the rule will not be in place in time for the new Parliament, and that it might never happen.

IPSA is duty bound to consult MPs, Speaker John Bercow and various Parliamentary committees, giving MPs a chance to further water down the plans.

That could be most significant regarding the employment of relatives as staff - which the Kelly Report banned. Remarkably, Sir Ian said IPSA favoured a ban but then effectively invited MPs to overturn the decision.

The document says 'we have heard very strong views' that family members should be allowed to work as staff and invited views 'on whether prohibiting the employment of family members is necessary and proportionate'.

The Kelly Report said no MP within reasonable community distance of London should be allowed to claim for a second home. Sir Christopher defined that as anyone within an hour's train ride of London.

The IPSA paper said MPs should still be eligible if they have a seat outside London Transport zones 1 to 6, which would enable dozens of MPs with seats in Kent, Surrey and the outskirts of the capital to carry on claiming for five more years.

Crucially, Sir Ian said MPs would be able to decide whether they will claim expenses on their constituency or London home. And he refused to say how much MPs could claim in rental costs.

He admitted that MPs may end up getting more money from the public purse. MPs could also keep claiming for the costs of security, payments banned by Kelly.

In a very few areas, Sir Ian was tougher than the Kelly Report. IPSA called for a total ban on 'golden goodbye' payments to retiring MPs and called for restrictions on them claiming first class rail travel.

Sir Ian said: 'I don't recognise the notion that we were watering down on capital gains.

Source: ' Daily Mail '

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