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MPs may not face family jobs ban Expenses plans 'not watered down'
(about 2 hours later)
The man in charge of overhauling MPs' expenses has suggested they might not have to stop employing relatives. The man in charge of running a new system of MPs' expenses has denied watering down the radical reforms proposed after a six-month inquiry.
More than 200 MPs employ relatives but a six-month inquiry said the practice should be phased out. Sir Ian Kennedy has launched a fresh consultation on the plans which include a ban on MPs claiming mortgage payments or employing their relatives.
But Sir Ian Kennedy, who decides what plans go forward, said he wanted to give people the chance to argue against a ban as he launched a consultation. But he told the BBC he agreed with both those rules being changed.
But he also said generous "golden goodbyes" should end and suggested MPs take out employment insurance. He also suggests MPs with children may be able to claim more and generous pay-offs to retiring MPs should end.
In the consultation document on changes to the expenses system, he also suggests MPs with children - those with "caring responsibilities" could get the right to claim higher expenses. Sir Ian is chairman of the Independent Parliamentary Standards Authority (Ipsa) which will run a new system of MPs' expenses - it is being overhauled following public outcry over leaked expenses claims last year.
'Golden goodbyes' No mortgage claims
There had been concerns that reducing expenses could mean fewer people with children applying to be MPs. There has already been a six-month inquiry by Sir Christopher Kelly's Committee on Standards in Public Life into the system and a series of proposed reforms, which party leaders say they back.
The proposals say any changes must not "unduly deter" any group of people from standing for election. But Sir Ian, who was selected to head the new body by a committee of long-serving MPs, has been given the power to decide which ideas go forward and form part of a new system of expenses - due to come in after the general election.
Sir Ian - the man appointed to head up the external regulator which will introduce and enforce a new expenses system - is consulting on proposals drawn up after Sir Christopher Kelly's inquiry into the much-criticised expenses system. There is also an argument that the tenure of an MP is inherently uncertain, such that MPs should not have locked themselves into long term mortgage arrangements dependent on public funding Ipsa consultation class="" href="http://mpexpensesconsultation.org.uk/">The consultation paper in full
There is also an argument that the tenure of an MP is inherently uncertain, such that MPs should not have locked themselves into long term mortgage arrangements dependent on public funding Ipsa consultation In a consultation document on changes published on Thursday and lasts until 11 February, Sir Ian backs Sir Christopher's recommendation that, in future, MPs only claim for rent or hotel stays - not towards mortgage payments on second homes.
That inquiry proposed ending MPs' mortgage claims, stopping them employing relatives and reducing generous "golden goodbye" payoffs to retiring MPs or those who lose their seats. The practice had led to criticism MPs could act as property speculators at public expense.
The consultation document confirms that Sir Ian backs proposals to stop MPs buying taxpayer-funded second homes - something that had led to criticism MPs could act as property speculators at public expense. The document points out that as the time spent as an MP is "inherently uncertain" there was an argument MPs "should not have locked themselves into long-term mortgage arrangements dependent on public funding".
Instead of being allowed to claim for mortgage interest, they should claim for rent and hotel stays, utility bills and insurance, the document says. And it says it is giving "detailed consideration" to a suggestion that Parliament use a rental agency to find MPs properties.
Security measures Profits
Several MPs have raised concerns they may lose money if forced to sell properties earlier than expected to comply with new rules. But it suggests MPs should be allowed to claim for "approved security measures" - something that was not backed by Sir Christopher's inquiry.
But the document points out: "There is also an argument that the tenure of an MP is inherently uncertain, such that MPs should not have locked themselves into long term mortgage arrangements dependent on public funding." It agrees that MPs with existing mortgages who keep their seats at the general election should continue to get support for a "transitional period" - but also that any profit from house price rises during that time should be surrendered to the exchequer.
But it also suggests MPs should be allowed to claim for "approved security measures" - something that was not backed by Sir Christopher Kelly's six-month inquiry. However the document says "it is for Parliament to decide whether to take steps to recover gains arising from the payment or mortgage interest from public funds" - opening the possibility of MPs voting on whether profits should be returned.
Sir Ian said he was not convinced taxpayers should fund payoffs for retiring MPsSir Ian said he was not convinced taxpayers should fund payoffs for retiring MPs
And while Sir Christopher Kelly had said MPs within "reasonable commuting distance" of Westminster should not be able to claim for a second home - Sir Ian narrows that down by suggesting only those in the London transport zones one to six should be stopped from claiming. 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.
The document says Ipsa, the external regulator set up by Parliament to introduce a new expenses system, is giving "detailed consideration" to a suggestion that Parliament use a rental agency to find MPs properties - as the Ministry of Defence does to allocate its staff London homes. "I don't recognise the notion that we were watering down on capital gains," he said.
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.
'Starting point'
Sir Ian narrows that down by suggesting only those with constituencies with stations in the London transport zones one to six should be stopped from claiming.
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.
But he told BBC Radio 4's World at One the inquiry had left it to Ipsa to "work out the detail" and the suggestion was "only a starting point" as the body had not yet decided on the distance.
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 in Wales, Scotland and Christopher Kelly's committee that family members should not be employed."
But his consultation document says Ipsa has already heard "very strong views" expressed that in practice family members might be the best qualified applicants for the posts.
MPs' pay-offs
"On that basis, 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," it said.
The consultation document suggests MPs with children - those with "caring responsibilities" could get the right to claim higher expenses so as not to "unduly deter" any group of people from standing for election.
The inquiry into the expenses system recommended a cut to the generous "golden goodbye" payoffs for MPs who step down or lose their seats at a general election.The inquiry into the expenses system 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 payoffs of up to £65,000 - depending on how long they have been an MP - the first £30,000 of which is tax-free. 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 suggests he might go further, adding: "We remain unconvinced of the need for payments to MPs on leaving parliament."Sir Ian's paper suggests he might go further, adding: "We remain unconvinced of the need for payments to MPs on leaving parliament."
It points out that some professions "where there is a risk of unexpected job losses" people can take out their own insurance policy. It points out that some professions "where there is a risk of unexpected job losses" people can take out their own insurance policy and says Ipsa does not believe "there is a clear-cut case that the taxpayer should bear the cost of supporting those arrangements".
"MPs voluntarily accept a career with a high level of uncertainty and we understand that many would want arrangements in place to help mitigate that uncertainty.
"We do not believe, however, that there is a clear-cut case that the taxpayer should bear the cost of supporting those arrangements."
All the party leaders want sweeping changes proposed by Sir Christopher Kelly's inquiry to be fully implemented in light of abuses by many MPs.
But Sir Ian has suggested he does not feel bound to enact all the recommendations and will decide after the consultation which closes next month.