11 May 2009

Though reports that The Telegraph may have paid a high sum for the computer disk containing details of MPs' expenses, which appears to have been stolen from the parliamentary fees office, cast the newspaper in a very bad light, I realise that the information on MPs' changing addresses to maximise their gains from the parliamentary allowance system would not have come to light without the newspaper having access to the address details that would have been removed in the information to be made public.  As such a public service has been done.

Whilst I have not changed my mind about the need to prevent the general publication of MPs’ addresses for security reasons, I feel uneasy that another motive for keeping them secret may have been to prevent the disclosure of the practise of "flipping" the designation of second homes to avoid capital gains tax and of the serial refurbishment of different properties.  I am appalled that the House authorities apparently sanctioned such practises which would never have occurred to me as being within the spirit of the "rules".  I have always been open about the capital gain I am likely to make from the rise in value of my own flat in London since I bought it in 1992 and questioned why such gains should not be subject to some clawback in addition to capital gains tax. Though I make no apologies for claiming the second home allowance to enable me to stay in London 3 to 4 nights a week and to kit my (one-bedroom) flat out to a similar standard to that of my family home in Birmingham, I fully understand the public’s outrage at the revelations in The Telegraph that have cast all MPs in a bad light by association. 

I also wonder why it has taken our well-paid journalists so long to wake up to this issue.  Even with the broad data that has been available for many years it was possible to see that, whilst some MPs' claims were reducing year on year, others continued to claim the maximum (or near to it).  I have advocated a tapering of the allowance so that it reduces the longer an MP has been in post - this would stop re-mortgaging and claiming for repairs and renovations on several properties. I raised these points during a debate on Member's allowances in July last year: 

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Mr. Deputy Speaker: Order. I am loth to intervene on the right hon. Gentleman, but he should perhaps come back a bit more to the motion before the House.

Mr. Spellar: Thank you for that, Mr. Deputy Speaker. But if there are, as we know, attempts to say that those who do not fill in the expenses forms as required by the party leader on a retrospective basis might be removed from the list of prospective Members of the European Parliament standing in the next election, it is possible to query whether that is just to do with their expenses or whether it is an attempt to purge the list of MEPs who might be an obstacle to the Conservative leader’s rather crazy idea of tying them up with a group of very dodgy fringe parties in Europe, which would reveal it as a rather nasty party indeed.

There is also a questionable motivation on MPs’ expenses. Again, nearly all the complaints about breaching the rules relate to Tory MPs. I stress that that does not apply to the vast majority of Tory Members, who rightly claim what they are entitled to and who are being unfairly tarnished by those who behave badly. I also note the way in which the issue has been stirred up by Conservative Front Benchers in—I presume—a vain attempt to curry favour with the BBC, an organisation that is remarkably reticent about its own salaries and expenses. Who knows whether that will become more of an issue later in the year?

Lynne Jones (Birmingham, Selly Oak) (Lab): I do not know about the John Lewis list, but the last time I made an expenses claim was when I had to replace my iron and bought a new one for £15.99 from Harry Tuffins. If the media are really concerned about Members’ claims, perhaps they should look at the claims of those who have been Members for many years and are still claiming the maximum allowances. When I entered the House in 1992, the mortgage on the first and only flat that I bought was £250 a month, or £3,000 a year. What about Members who are able to pay huge mortgages, some of whom refinance their mortgages by letting out their original properties, buying more expensive ones and claiming the maximum allowances? They do not even have to worry about the John Lewis list.

Mr. Spellar: My hon. Friend is right: those of us who entered the House some time ago tend to make lower claims. In fact, I note that mine are substantially lower than hers.

Mr. Spellar: Thank you, Mr. Deputy Speaker. Is it not slightly odd, however, that—as has already been said a number of times—what is essentially a matter of House business should be raised in Opposition time and thus become a matter of party business, especially given the considerable number of issues raised, quite legitimately, by the Leader of the Opposition at Prime Minister’s Question Time?

Is it not also slightly odd that the motion should have been tabled now, given that there are very good Conservative members of both the Members Estimate Committee—including the right hon. Member for Maidenhead—and the advisory panel? The Conservative leadership will know that the Members Estimate Committee is due to meet on Monday to consider a recommendation from the panel for a tightening of the audit—involving the National Audit Committee—and a rewriting of the green book. Is this a variation of the old Liberal Democrat trick of finding out which streets are to be repaired, issuing a focus leaflet demanding that repairs be made, and claiming the credit afterwards? By definition, both those bodies will have to present their findings to the House in the autumn. What was the rush for the motion?

The final question that must be asked is “Does this matter?” It is true that the memory of a half-baked motion rather inadequately moved just before the recess will soon fade, although it will undoubtedly revive some doubts in the Opposition ranks about the judgment of the Leader of the Opposition. However, it does not do justice to Members who make reasonable claims arising from the nature of the job. Gone are the days when it was strongly demanded of a Sheffield Member that he visit his constituency at least once a year—although the requirement was waived when he became a Minister.

Our constituents rightly want to see much more of us than they used to, and to hear from us as well. That is true not only in the United Kingdom but around the world—throughout the Anglo-sphere. The hon. Member for South Staffordshire was wrong in that regard. The balance has changed: although it is right to say that we have considerable parliamentary duties, constituency representation and constituency duties are an increasingly important part of the job. That is the way things are nowadays, and we must face up to it. It means that the great majority of Members must have two residences, and, as we all know and as was pointed out by my hon. Friend the Member for Birmingham, Selly Oak (Lynne Jones), the cost has risen considerably. Indeed, the cost to new Members has probably reached the limit. We sensibly decided not to opt for an eastern-Europe-style barracks block for Members of Parliament, on grounds of cost and security quite apart from any other considerations.

Lynne Jones: I recall that, as a new Member, I was out of pocket for the first few years. Is there not a case for a higher allowance for new Members and an attenuated allowance for those who have been here longer?

Mr. Spellar: I think that that proposal should be considered. The Leader of the House spoke of a possible 10 per cent. limit, although I do not know whether the percentage would change according to the initial setting-up expenses. One of the issues that the panel is examining is the considerable up-front cost of setting up an office and a home and what can be done to help with cash
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flow, particularly just after an election when often people have not been paid. I hope that the panel will look favourably on the idea of giving such help. It must also be borne in mind that we have to live in our second residences for a fairly long period, and it is proper for them to be furnished.

Another aspect that we should bear in mind is the social change that has taken place in the House. Not only are there many more women here; there are many more younger Members. As I said on, I believe, 3 July, for the first time all three leaders of the main political parties have young families….

Mr. Kevan Jones: Does the right hon. Gentleman agree that what the majority of Members want are clear rules that they can understand and then implement? Is not one of the biggest problems the old Fees Office, because inconsistent advice was given to both Members and their staff? We learned a few weeks ago that MPs were employing staff who had not lodged contracts with the Fees Office, but I and others had always been told that people could not get paid until that had been done.

David Maclean: Yes, that is true; there has been inconsistent advice, and that was one of the purposes of the practice audit teams that we wanted to set up. They would go round to help colleagues get things right. I say to Members of all parties that if we do not have that and instead have only a toughened up NAO going round, I suspect that all it will be able to do is report on our errors—our genuine errors and mistakes. When that is in the public domain, those genuine errors and mistakes will be regarded as crimes against humanity. Our internal practice assurance teams were able to go round and say, “David, you put it in the wrong column,” or as the Fees Office informed me in a note two weeks ago, “You’ve transposed the figures 3 and 5; it should be 53 instead of 35.” A tiny amount of expenditure was involved, but I had made a mistake in transcribing some figures on to my form.

When the NAO finds such mistakes, they will be reported as, “MP makes a mistake”, and that will be referred to the Standards and Privileges Committee the next day. We wanted something intermediary to hold our hands and help us get things right. There are 650 Members claiming the different allowances at different times of the year in different ways. We have our interpretation and, over the years, the interpretation of the Fees Office has changed, too. A Member said that when he arrived here in 1992 he went to the Fees Office, where someone said, “Oh, why haven’t you got a mortgage, old boy? You can claim for it.” The rules have been tightened up only when various things were exposed as wrong, or when genuine mistakes were made, or we had reports from the Standards and Privileges Committee saying, “This was an abuse.” We have been trying as a House to tighten these rules, not on a systematic basis but as problems occurred. Of course, in those circumstances, advice has sometimes been inconsistent.

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Lynne Jones: However, is it not still within the rules for Members to acquire new mortgages and let out the first home they claimed for, and then claim a larger mortgage? Also, can they not at a later date transfer what was a second home into a primary home and thereby make huge capital gains on the basis of taxpayer contributions, while nothing is done about that? That represents a huge amount of profiteering. The John Lewis list and new Members having to set up their homes pales into insignificance in comparison with such abuses.

David Maclean: If the hon. Lady has evidence of such abuses, they should be recorded. Such allegations were made by external people. I think Sir Christopher Kelly was worried about that. We said point the finger at someone who has got a third home somewhere that is a holiday home and who is claiming additional costs on that. We went into the mortgage issue very carefully. Let me say with all the authority I can muster that the cheapest and best deal for the taxpayer and for Parliament is for colleagues who are elected to buy a property and have a mortgage on it and get the mortgage interest paid by this House. That is a good bargain for the taxpayer at the end of the day.

A useful website is theyworkforyou.com, which gives a breakdown by category of all MPs' expenses since 2001/02. 

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