My submission to the 'Kelly Review' on
The following is my submission to the Committee on Standards in Public
Life's review on MPs Expenses, chaired by Sir Christopher Kelly. I am informed that
it will be published on the Committee's
website in due course.
Response to the Committee on
Standards in Public Life's Review of MPs Expenses
I would like to comment on some of the issues and questions to be addressed as
laid down in Section 1.15 of the consultation document.
As a general principle, MPs should be able to appoint a body accountable to them
which is the main forum through which MPs can collectively make recommendations to a truly
independent body which decides on remuneration and allowances for MPs. The independent
body should have appropriate experience and expertise but should also have lay
representation. After ensuring appropriate consultation (including with individual
MPs), the recommendations of the independent body should be binding.
The recommendations of the Baker Review seem to me to be a
reasonable basis for assessing MPs pay, so as to ensure that it is not necessary to
periodic catch-up reviews.
1. Second homes
I do not agree there is any need for a substantial uplift in
parliamentary salaries to deal with the problems that have been experienced with
Additional Costs Allowance, recently redesignated as Personal Additional Accommodation
Expenditure (PAAE) but there are grounds for a small increase to cover the additional
personal expenditure that is common to all members who are not able to commute between
parliament and their constituency on a daily basis and for whom it is necessary to have a
second home either in London or in their constituency. I have in mind ongoing
repairs and maintenance, once the Member has set up their first second home
following their election as an MP (see below).
Rules should be laid down as to which of the two homes (in
London or in or very near to the constituency) are the main and second home based on
factors such as the time spent in each averaged over the year and the location of close
family members e.g. where children attend school or where a partner works. It would
not be fair to insist that the constituency home was always the main home e.g. in the case
of someone based in London prior to their election to parliament. Equally, it would
not be appropriate to be able to cIaim for the costs of a family home based in London when
a second constituency home could be acquired at a lower price. It would be
reasonable to expect that a second home would usually be smaller that the main home.
Any home purchased with the benefit of any parliamentary allowance should be
subject to capital gains tax, irrespective of its designation as main or second home at
the time of sale.
Recalling the difficulties I experienced after my election in
1992 in trying to establish a base in London that would be a comfortable place for me to
stay whilst working in Westminster and also have sufficient facilities to enable my young
family to stay with me from time to time, I think care needs to be taken to ensure that
the new arrangements are fair to new members. On the other hand, it is unacceptable
for longstanding members to still be able to claim the maximum allowances. I would
therefore advocate that the interim measures that limit claims for the PAAE should largely
be continued for existing members. Members should be able to claim the following
costs for their designated second home:
- Capped mortgage interest or rent;
- Unavoidable charges such as service charges, ground rent and Council Tax;
- Utility bill such as gas, electricity, water and telecommunications charges
(broadband charges to enable use of the parliamentary intranet should be organised
centrally as is possible at present).
Reasonable additional costs (e.g. to
cope with fair wear and tear) should be incorporated into a small flat rate allowance or
addition to the salary (in the latter case it would be taxable but would also be
pensionable). There should be no subsistence allowance or payments for food, though
the additional costs of eating out due to late night working could be taken into account
in the level of the additional costs allowance or salary increase. This would not be
payable to new members in their first term. (They should instead benefit from special
arrangements as detailed below.) This allowance would be payable as of right.
Such an arrangement would be fair,
would prevent trading up to maximise expenses claims and would also have the
benefit of being much simpler to administer, once the initial parameters (see below) were
For new members only, there should be
a setting up allowance payable over 2 or 3 years for the furnishing, equipping and
refurbishing to a reasonable standard of any unfurnished accommodation as well as
reasonable costs in connection with the acquisition of such accommodation. This
allowance should be updated in advance of a general election. It should be lower in
the case of part furnished rented accommodation and minimal for fully furnished
accommodation. The permitted capped rent would necessarily be higher in such
circumstances. Payments for temporary accommodation based on the actual costs
incurred but limited to say, the cost of the equivalent of a three star hotel, should be
permitted for up to 6months, extendable in exceptional circumstances.
There should be a cap on the capital
value and (thus associated interest only repayments) or rental costs of the second home
and this should reflect the cost of acquiring accommodation within reasonable travelling
distance of Westminster or in or near the constituency and of a reasonable size (not
larger than 3 bedrooms) except in exceptional circumstances (such as the household being
large or having a member with a disability) which would need to considered on their
merits. For established members, the cap on the payment of mortgage interest should
be updated (up or down) in line with changes in interest rates. The cap on allowable
rental costs should be changed in line with general changes in rents in the area the
property is located. Members would be permitted to designate a more expensive
property as their second home but would be required to meet the difference in costs from
their own resources.
If a Member subsequently wishes to
change the location of the second home, this should be permissible but the cap on the
mortgage interest or rent payable would be that associated with the first property and
other charges would have to be reasonable having regard to those associated with the first
property. There would be no payment of moving or setting up costs.
In this way, though new members would
benefit from the reimbursement of the full costs associated with the acquisition of a
reasonable second home at the prevailing rates, costs rechargeable should, over time,
reduce considerably for established members, particularly those who have purchased their
second home with a mortgage. The arrangements would also prevent large windfall
gains from increases in the value of property and what gains were made would then be
properly shared between the member and the taxpayer through the application of capital
2. Office costs
As far as I am aware, the present
arrangements are largely acceptable but for care needed in paying for office expenditure
in a property owned by the MP. Costs of food and drink etc for staff consumption
should not be allowable.
Recent changes limiting the
constituency mileage dependent on the physical size of the constituency are welcome and
should be further refined. There should be a limit on the number of journeys between
the constituency and Westminster to reflect the parliamentary calendar with an allowance
of one journey per week plus say a maximum of an additional, say 10 journeys, to take
non-regular event/exceptional circumstances into account.
4. Employment of staff
I have never personally employed a
relative, though, due to the nature of the work, can envisage there are circumstances when
it is reasonable to do so. However, all posts should be openly advertised with
detail of the location of the workplace and the salary scale which should be in line with
published guidance rates for the job described in the advertisement. Records should
be kept to justify any decision to employ a family member.
5. Communications expenditure
I did not support the creation of the
Communications Allowance and I believe it has largely been used to promote the work
of individual MPs rather than as a means of genuinely communicating with constituents.
On the other hand, the rules regarding the use of House stationary were
and are over-restrictive e.g. preventing pro-active communications with constituents about
important issues of direct relevance to them and their community. Apart from
discretion for a small amount of personal and office use, my understanding is that House
stationary is only permitted for responsive communications with constituents. This
should change to allow pro-active use of the parliamentary post but within a total limit,
not out of line with the current limit. This was, quite rightly, imposed after
suspicion of widespread flouting of the rules.
6. Outside Remuneration
This should be allowed but limited
(e.g. to no more than any parliamentary salary receivable) and the remuneration received
and the hours of work involved should be published.
LYNNE JONES MP
5 June 2009