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Q&A: The MP expenses row Q&A: MP expenses row explained
(6 days later)
The Daily Telegraph has published expenses claims made by Cabinet ministers, shadow ministers and backbench MPs from all parties under the terms of the controversial second homes allowance. Revelations in the Daily Telegraph about exactly what MPs have been claiming on expenses has prompted a public outcry and a pledge to reform the "gentlemen's club" at Westminster:
It is the latest development in a long-running row over the much-criticised system. WHAT HAS HAPPENED?
WHAT HAS BEEN REVEALED? Most MPs have to live in two places - in their constituencies and in London where they attend Parliament. They are allowed to claim expenses to cover the cost of running a second home. Details of what has been claimed on second home expenses have never been revealed before the Daily Telegraph got hold of a leaked copy of all the claims. Many MPs have been accused of extravagance, of over-claiming and avoiding tax on home sales. class="inlineText" href="/1/hi/uk_politics/8039273.stm">MP-by-MP: Expenses claims
Each day for the past week, the Daily Telegraph has published extensive details of expense claims made by MPs over the past four years under the controversial second homes allowance. It began with government ministers, before going on to reveal details of the spending habits of leading Conservative and Liberal Democrat MPs and backbenchers. The claims have ranged from the relatively trivial - such as loo seats and trouser presses - to major home improvements and expensive electrical goods such as TVs, DVDs and coffee makers. Each of the major party leaders - Gordon Brown, David Cameron and Nick Clegg - has had their expenses splashed across the newspaper's pages. HOW MUCH CAN THEY CLAIM?
WHY WAS THE INFORMATION SECRET? The "additional costs allowance" is worth up to £24,006 in 2008/9 for MPs representing seats outside central London. They used to be able to file claims for up to £250 without providing a receipt but that was reduced to £25 last year and is being cut to zero. It covers things like mortgage interest payments on second homes and utility bills - but officials also allowed claims for items of furniture, electrical goods like televisions, refurbishments and food. Those representing inner London seats were entitled to a much lower allowance, which until 2009 had been worth £2,916. class="inlineText" href="/1/hi/uk_politics/8039590.stm">What MPs can claim
Parliament has never published details of how much MPs claim back on expenses. But that was about to change after it lost a long-running court battle with Freedom of Information campaigners. The Daily Telegraph obtained the details early. SO, WHAT HAVE THEY BEEN CLAIMING FOR?
The most eye-catching claims include ones for clearing a moat, maintaining swimming pools, a £1,645 "duck island" and a claim to fit mock Tudor beams to the front of a house. One MP claimed for a house that was neither in London, nor her constituency. Two MPs continued to claim for mortgage interest payments, after the mortgages had been paid off - they blamed that on accounting errors. Claims for small items have also been ridiculed - including a trouser press, a bath plug and some Hob Nob biscuits. And there is some annoyance at large food bills - some charged even when Parliament was in recess.
DID THEY BREAK ANY RULES?
All MPs had to sign a declaration with every claim to the effect that "I confirm that I incurred these costs wholly, exclusively and necessarily to enable me to stay overnight away from my only or main home for the purpose of performing my duties as a Member of Parliament".
SO THAT'S A YES?
You might think that would be the case but no, all MPs have said they acted within the rules and seem to be basing much of their defence on the fact that their claim was paid out by the fees office. It does seem that the rules were rather vague or lax. But it is also the case that the UK's Parliament has worked for centuries on the basis of MPs being "honourable members" so in most cases the fees office was, perhaps not surprisingly, unlikely to challenge an MP if they had given their signed word that the claim was legitimate. 'Lax' MP expenses rules condemned
WHAT'S ALL THIS ABOUT FLIPPING?
MPs have to tell Commons fees staff which home is their "main home" and which home is their "second home" - on which they can claim expenses. The rule book states "the location of your main home will normally be a matter of fact". But they have been allowed to change it. This means some have claimed for refurbishment or mortgage interest on one property, then changed the designation and proceeded to claim for costs on another one. Some have then changed it back again or on to a third property. In some instances the MP has sold a property shortly after claiming the costs of doing it up - they are allowed to keep any profit. Some MPs have said there were good reasons for changing the designation for example when they moved their families to London from the constituency.
DO MPs PAY CAPITAL GAINS TAX ON THESE PROPERTIES?
Some do, some have not. The tax is usually paid when someone sells a home that is not considered, by HM Revenue and Customs, to be their "principal residence". It amounts to 18% of the profit. However several MPs have not paid the tax when they have sold properties they had designated their "second home" with the Commons authorities. This is not illegal and some have argued that the definition of a main residence by the Commons is different from that by HMRC. But critics say it is wrong to tell the Commons one thing and tax authorities another and benefit from taxpayer-funded expenses without paying back any tax in return. Gordon Brown has said it is "totally unacceptable" and it is being tightened up. Blears will pay tax on flat sale
HAVE THEY PUT A STOP TO ALL THIS?
The whole system is being reviewed by the independent committee on standards in public life, which is expected to recommend sweeping changes. But as that's not due to report back for months, some interim measures have been agreed. "Flipping" the designation of second homes is banned in most cases for 2009/10, claims for furniture, cleaning, gardening etc have been stopped. Mortgage interest and rent payments have been capped at £1,250 a month. Expenses: Options for reform
HOW HAS ALL THIS INFORMATION COME OUT?
The Daily Telegraph is remaining tight-lipped about its source, although it has not denied paying for the information. It says it has acted in the public interest. All the receipts were being prepared for publication anyway in July. The Commons authorities had long resisted attempts to reveal the details but were ordered to publish by the High Court, under the Freedom of Information Act. But the Telegraph says many of the key details - such as the "flipping" of second homes - would have remained hidden as addresses would have been blanked out before publication. Police were asked to investigate the leak but chose not to - having concluded that a public interest defence would be a "significant hurdle" to any successful prosecution.
WHAT DO THE MPs SAY?WHAT DO THE MPs SAY?
They say they were acting within the rules and in some cases were encouraged to spend up to the maximum allowed - about £20,000 a year - by the Commons fees office. But they say the system is in urgent need of reform.They say they were acting within the rules and in some cases were encouraged to spend up to the maximum allowed - about £20,000 a year - by the Commons fees office. But they say the system is in urgent need of reform.
WHAT DOES THE TELEGRAPH SAY? WHY IS THE SPEAKER QUITTING?
It claims there has been widespread abuse of the second homes allowance - which reimburses MPs with constituencies outside London. Some MPs have been maximising their financial gain by regularly "flipping" their designated second home, the newspaper alleges. This has allowed them to claim back the cost of renovating properties, which they have then sold off at a profit. Some MPs have also been accused of avoiding capital gains tax on home sales and of over-claiming for mortgage payments and other expenses. Commons Speaker Michael Martin has been seen by many as the driving force behind efforts to stop details of expenses claims coming out - such as by taking the Freedom of Information case to the High Court. His supporters say that is not fair and his committee had proposed reforms in 2008 - which were promptly voted down by MPs. But his class="inlineText" href="/1/hi/uk_politics/8044411.stm">angry outburst at MPs who had criticised him over his handling of the issue in the Commons prompted class="inlineText" href="/1/hi/uk_politics/8054657.stm">calls for him to go - and his failure to announce a date for him to step down a week later prompted open challenges. He said he would relinquish the role to class="inlineText" href="/1/hi/uk_politics/8057203.stm">maintain "unity" in the House.
class="bodl" href="/1/hi/uk_politics/8039273.stm">Leading politicians' claims and reactions ANY LABOUR RESIGNATIONS?
WHAT HAS BEEN THE IMPACT ON THE GOVERNMENT? Justice minister class="inlineText" href="/1/hi/uk_politics/8051091.stm">Shahid Malik has stepped down pending an inquiry by into whether his failure to declare a preferential rent deal on his constituency home broke the ministerial code. Former Agriculture Minister class="inlineText" href="/1/hi/uk_politics/8049096.stm">Elliot Morley and backbencher class="inlineText" href="/1/hi/uk_politics/8053084.stm">David Chaytor have been suspended by the Parliamentary Labour Party. They both reportedly claimed for mortgage interest months after the mortgages had been paid off. They blamed sloppy accounting. Mr Morley also lost his job as Gordon Brown's climate change envoy.
Labour's opinion poll ratings have sunk to their lowest level ever in the wake of the scandal.
ANY RESIGNATIONS?
Justice minister Shahid Malik has stepped down pending an inquiry by into whether his failure to declare a preferential rent deal on his constituency home broke the ministerial code. Former Agriculture Minister Elliot Morley has been suspended by the Parliamentary Labour Party pending an investigation into his expense claims by the parliamentary standards commissioner and has lost his job as Gordon Brown's climate change envoy. Mr Morley claimed for £16,000 towards mortgage interest costs even though he had paid his mortgage off 18 months before. Mr Morley blamed "sloppy accounting" and has apologised.
WHAT ABOUT THE OTHER PARTIES?WHAT ABOUT THE OTHER PARTIES?
Andrew MacKay, a Parliamentary aide to Conservative leader David Cameron, has quit his post after the party ruled his second home claims were "unacceptable". Mr MacKay and his wife Julie Kirkbride, who is also a Tory MP, had been claiming second home allowances on two properties. class="inlineText" href="/1/hi/uk_politics/8049614.stm">Andrew MacKay, a Parliamentary aide to Conservative leader David Cameron, has quit his post after the party ruled his second home claims were "unacceptable". Mr MacKay and his wife Julie Kirkbride, who is also a Tory MP, had been claiming second home allowances on two properties. The former Conservative minister class="inlineText" href="/1/hi/uk_politics/8057579.stm">Douglas Hogg has said he will not seek re-election - he repaid the £2,200 of clearing his moat, which was submitted with his claims. class="inlineText" href="/1/hi/uk_politics/8060563.stm">Sir Peter Viggers, whose most eye-catching claim was for a £1,645 "duck island" is also to retire "at the direct request of David Cameron". Totnes MP class="inlineText" href="/1/hi/england/devon/8060423.stm">Anthony Steen, said to have claimed more than £87,000 over four years for his country home, is also standing down at the next election.
HAVE ANY MPs PAID THE MONEY BACK?HAVE ANY MPs PAID THE MONEY BACK?
Yes. MPs from all parties are falling over themselves to write cheques, although none have admitted breaking the rules. So far more than £120,000 has been returned to Parliament. Yes. MPs from all parties are falling over themselves to write cheques, although none have admitted breaking the rules. class="inlineText" href="/1/hi/uk_politics/8050351.stm">Who's repaying expenses?
DO MPs REALISE HOW BAD IT LOOKS?DO MPs REALISE HOW BAD IT LOOKS?
There is genuine concern among MPs that Parliament has never been held in lower regard by members of the public. Even MPs who have done nothing wrong are reported to be considering quitting as they are considered "crooks" by the public. Some fear Parliament may take years to recover from the furore while others warn that voters may take out their anger with the main parties by backing fringe and extremist parties at next month's local and European elections. Yes. There is genuine concern among MPs that Parliament has never been held in lower regard by members of the public. Even MPs who have done nothing wrong are reported to be considering quitting as they are considered "crooks" by the public. Some fear Parliament may take years to recover from the furore while others warn that voters may take out their anger with the main parties by backing fringe and extremist parties at next month's local and European elections.
SO WHAT ARE THEY DOING ABOUT IT? WHAT ARE THE PARTIES DOING INDIVIDUALLY?
The party leaders have been coming down on hard on those accused of the most serious abuses. Prime Minister Gordon Brown has also called for an audit of all MP expenses claims going back four years. All parties are also calling for reform of the system - but have yet to reach full agreement on the best way to do it. A series of interim measures - banning home "flipping", the purchase of furniture and tax avoidance - are expected to be agreed by MPs. But the parties will probably have to wait for the result of a review by Sir Christopher Kelly's committee on standards in public life, before wholesale reforms can be agreed. class="inlineText" href="/1/hi/uk_politics/8046287.stm">Gordon Brown says any Labour MP who "defied" the rules will not be able to stand again. The party's ruling NEC is setting up a panel to quiz MPs whose claims have been scrutinised. Tory leader class="inlineText" href="/1/hi/uk_politics/8044998.stm">David Cameron has set up his own scrutiny panel and warned that any Tory MP refusing to return money excessively claimed could be sacked. The class="inlineText" href="/1/hi/uk_politics/8047028.stm">Lib Dems say no MP should be able to make a profit on the sale of a home which was subsidised by the taxpayer.
What the parties want
WILL THAT BE ENOUGH?
Tory leader David Cameron and Lib Dem leader Nick Clegg are urging more rapid reform. Mr Cameron has set up his own scrutiny panel and warned that any Tory MP refusing to return money excessively claimed could be sacked. The Lib Dems say no MP should be able to make a profit on the sale of a home which was subsidised by the taxpayer.
WHERE DID THE TELEGRAPH'S INFORMATION COME FROM?
The paper is remaining tight-lipped about its source, although it has not denied paying for the information. It says it has acted in the public interest.
WASN'T THE INFORMATION GOING TO BE PUBLISHED ANYWAY?
Yes. Millions of receipts were due to be published by the Commons authorities in July. But the Telegraph says many of the key details - such as the "flipping" of second homes - would have remained hidden as addresses would have been blanked out before publication. Some MPs are angry about the unauthorised publication and the Commons authorities have asked the police to investigate, a request they are considering. The Commons says there are "reasonable grounds to believe a criminal offence may have been committed". Some MPs have questioned whether a police probe is necessary or justified, leading to angry exchanges in the Commons.
WHAT HAPPENS NEXT?WHAT HAPPENS NEXT?
MPs are braced for further revelations in the Telegraph in the coming days. At the same time, some are urging the police to investigate the claims made by some MPs on the grounds of possible fraud. The Daily Mail has launched a campaign for private prosecutions to be brought against some MPs. Meanwhile, the leaders of the three main parties are struggling to come up with a solution for reforming the expenses system to begin to win back confidence in Parliament. Gordon Brown has called for an end to the class="inlineText" href="/1/hi/uk_politics/8056747.stm">"gentlemen's club" of Parliament and wants an independent Parliamentary Standards Authority to oversee MPs' pay and expenses. MPs are braced for further revelations in the Telegraph and when the details are officially published. At the same time, some are urging the police to investigate the claims made by some MPs on the grounds of possible fraud. The Daily Mail has launched a campaign for private prosecutions to be brought against some MPs. Individually many MPs are holding meetings in their constituencies to explain their claims.
WHY DO MPs NEED A SECOND HOME?
Not all MPs have one - only those who have to spend part of their week working in their constituency and part of it in Westminster. The second homes allowance is designed to allow them to do that.
HOW DOES THE CURRENT SYSTEM WORK?
MPs are asked to select either their constituency or London home as their "second home", for which they can claim reimbursements for costs incurred "wholly, exclusively and necessarily incurred from the purpose of performing your Parliamentary duties".
HOW MUCH CAN THEY CLAIM AND FOR WHAT?
The "additional costs allowance", worth up to £24,006 in 2008/9 for MPs representing seats outside central London, has been targeted by Freedom of Information campaigners who believe it is the expense most open to abuse. Before reforms began last year, MPs could use it to claim any item under £250 without providing receipts - that has been reduced to £25. It covers things like mortgage interest payments on second homes and utility bills - but officials also allow claims for items of furniture, electrical goods like televisions, refurbishments and food. Those claims have proven some of the most controversial with MPs claiming for items as small as bath plugs.
What MPs can claim?
Expenses across Europe
HAVE ALL MPs BEEN ACCUSED OF ABUSING THE ALLOWANCE?HAVE ALL MPs BEEN ACCUSED OF ABUSING THE ALLOWANCE?
Not at all. Many take exception to suggestions they padded out their salaries with the allowance. The Telegraph highlights Energy Secretary Ed Miliband, Health Secretary Alan Johnson and Environment Secretary Hilary Benn for their "modest" claims. Not at all. Many take exception to suggestions they padded out their salaries with the allowance. Some MPs who were entitled to claim the allowance because they had constituencies outside inner London, chose not to. Others made modest claims. class="inlineText" href="/1/hi/uk_politics/8048215.stm">Which MPs didn't claim expenses?