MPs' Expenses and Allowances: Supporting Parliament, safeguarding the taxpayer

MPs should always act in accordance with the Seven Principles of Public Life. Any future changes to MPs’ expenses should be underpinned by the elaboration of those principles set out in the executive summary and repeated in Chapter 3 of the full report.

The independent regulator should annually review the maximum amounts claimable in light of inflation. It should undertake comprehensive reviews of the whole scheme at least once every Parliament.

MPs should no longer be reimbursed for the cost of mortgage interest payments or any other costs associated with the purchase of a property. No new arrangements for support of mortgage interest should be allowed from the date of this report. In future only rent or hotel costs should be reimbursed. (Transitional arrangements are dealt with in recommendations 12 to 14).

The independent regulator should commission a commercial agency to provide and maintain rented accommodation for new MPs entering Parliament at the next election along the lines of the MOD scheme for service personnel. If it proves successful, the scheme should be extended to all MPs.

The expenses scheme should continue to cover additional costs incurred wholly, exclusively and necessarily in pursuit of MPs’ parliamentary duties in respect of council tax, water, electricity, gas, and other fuels, telephone line rental and calls, security, contents insurance and removal at the beginning and end of a tenancy. The costs of cleaning, gardening, furnishings and any other items should not be reimbursed or otherwise covered.

The designation of main and second homes should be determined according to an objective test, consistently applied and robustly enforced by the independent regulator. Any changes in designation should be scrutinised with particular care.

The recent removal of the right to claim additional accommodation expenses from MPs with constituencies wholly within 20 miles of Westminster should be extended to those whose constituency homes fall within a reasonable commuting distance. The independent regulator should draw up a revised list of constituencies to which this principle applies.

The London costs allowance should be reduced from the beginning of 2010-11 to the level recommended by the SSRB in 2007, uprated in line with the Public Sector Average Earnings Index to allow for the passage of time.

The independent regulator should determine an appropriate level of London costs allowance for MPs outside the Greater London area who do not receive taxpayer-funded accommodation.

Only MPs who stay in a hotel should in future be entitled to claim for the costs of food, currently up to a maximum of £25 per night and within the overall ceiling for accommodation expenses. Reimbursement should be on the basis of receipted expenditure only.

The independent regulator should have the discretion to respond appropriately to requests from MPs for assistance to address particular needs.

MPs with existing mortgages supported through the expenses scheme should continue to be entitled to claim the cost of mortgage interest on their current property until the end of the next Parliament, or for five years if that Parliament does not continue for a full term. They should not, however, be able to amend their mortgage agreement in any way which would increase the amount they are able to claim.

Any capital gains after the date of this report in the value of accommodation purchased with the help of public funds should be surrendered to the Exchequer. The amount to be surrendered should be proportionate to the extent of public funding during the transitional period.

MPs who share second home accommodation as partners should be entitled between them to claim up to a limit of one individual cap on rent or mortgage payments, plus one-third.

MPs should no longer be able to appoint members of their own families to their staff and pay them with public funds. Those currently employing family members should be able to continue to do so for the life of one further Parliament or five years, whichever is the longer.

The work of MPs’ staff, both in Parliament and in their constituencies, should be subject to robust independent audit as part of the new assurance arrangements. This will ensure that resources provided out of public funds are being used only for the purpose intended and not to support party political activities. Should any MPs or their staff be found to be abusing the system other than inadvertently, they should face strict penalties.

A code of conduct for MPs’ staff should be developed by the House of Commons, setting out appropriate restrictions on party political activities. Responsibility should rest with individual MPs to ensure that their staff abide by the code. MPs should sign an annual declaration confirming that they have abided by the code of conduct and used resources intended for parliamentary purposes appropriately.

Subject to the outcome of the House of Commons Commission Report on central employment, MPs should continue to be able to select and directly appoint their own staff. Appointments should be made on the basis of merit and open recruitment. The House of Commons authorities should issue binding guidance, accompanied by a code of practice, setting out the processes to be followed by MPs when recruiting staff (including those working in constituencies) and on other matters of good employment practice, including disciplinary and grievance procedures. MPs should receive appropriate training and HR support.

MPs’ staff should no longer receive redundancy pay from the winding-up allowance. Redundancy pay should be paid centrally by the House of Commons authorities, and the size of the winding-up allowance reduced accordingly.

Particular attention should be paid in the more robust audit now being introduced to ensure that the administrative and office expenditure allowance is not being used to provide benefit to a party political organisation. Should the audit show it to be necessary, the independent regulator should ban payments from expenses to party political organisations.

Equipment purchased through the administrative and office expenditure budget should be regarded as public property. The independent regulator should issue guidance putting this principle into practice in a pragmatic way.

MPs should no longer be entitled to claim for accountancy costs to help fill out tax returns.

The communications allowance should be abolished. MPs should continue to be able to communicate proactively with their constituents, but the cost should be met from within the reformed administrative and office expenditure allowance. The current cap on postage and stationery, and the rules regarding proactive communications, should remain in place.

MPs should meet the cost of normal commuting journeys themselves, as do most of their constituents. MPs whose constituencies are beyond daily commuting distance should continue to be reimbursed for the cost of travel between their constituencies and London residences.

MPs should not be allowed to claim for the cost of travel to or from a home which is neither in nor close to their constituency.

Travel expenses should only be claimed for journeys where the primary purpose and predominant activity are the fulfilment of parliamentary duties.

MPs should continue to be permitted to claim for first class train travel for longer journeys where issues of space or privacy in which to work make this appropriate. However, MPs should always ensure that value for money for the taxpayer is provided when making travel arrangements. The audit arrangements should include proportionate checks to ensure that this is happening in practice.

MPs who represent constituencies beyond a reasonable commuting distance from Parliament should continue to be entitled to claim for travel for family members. Reimbursement should only be claimable for travel between the constituency and London, and vice versa. Best value for money should always be pursued in purchasing these tickets and only the cost of standard class tickets should be claimable. Claims for family travel when Parliament is not sitting should only be permitted in exceptional circumstances.

Receipts and explanations of the purpose of the journey should be required for all travel claims. Where mileage is claimed, details of the distance and purpose of each journey should be provided. Details of individual travel claims by MPs should be available online.

The resettlement grant should be retained for MPs who lose their seats at a general election, as the result of deselection or because of boundary changes. MPs who voluntarily stand down at a general election should no longer receive the grant. They should instead receive eight weeks’ pay from the date of the general election.

The resettlement grant should be paid at a rate of one month’s salary for each year of service as an MP up to a maximum of nine months’ salary, as proposed by the SSRB.

The new arrangements for the resettlement grant should not apply at the next general election, but should come into force immediately after that.

Where an MP is found to have seriously abused the expenses system or otherwise seriously breached the Code of Conduct, the Standards and Privileges Committee should always consider recommending that the House reduce or remove the resettlement grant from that MP as part of any sanctions to be imposed and should be prepared to do this for past as well as for future breaches of the rules. The new statutory scheme should empower the House of Commons to impose such a sanction by resolution.

MPs should remain free to undertake some paid activity outside the House of Commons, provided it is kept within reasonable limits and there is transparency about the nature of the activity and the amount of time spent on it.

Consideration should be given to ways of increasing the accessibility and usability of the Register of Members’ Financial Interests.

MPs should be required to register positions of responsibility in voluntary or charitable organisations, even if unpaid, together with an indication of the amount of time spent on them.

All candidates at parliamentary elections should publish, at nomination, a register of interests including the existence of other paid jobs and whether they intend to continue to hold them, if elected. The Ministry of Justice should issue guidance on this in time for the next general election. Following the election, consideration should be given as to whether the process should become a statutory part of the nominations process.

The MPs’ Code of Conduct should be revised to allow complaints to be made against an MP who is a former minister and who takes on outside paid employment but does not follow advice provided by the Advisory Committee on Business Appointments (ACOBA).

Any MP whose presence in London on business related to their parliamentary role is infrequent should be expected to stay in hotels rather than claim the cost of permanent accommodation in London.

The practice of permitting a Westminster MP simultaneously to sit in a devolved legislature should be brought to an end, ideally by the time of the elections to the three devolved legislatures scheduled for May 2011.

The independent regulator should have a statutory duty to support MPs efficiently, cost- effectively and transparently in carrying out their parliamentary functions.

Responsibility for maintaining the register of financial interests and the associated code of conduct should be removed from the independent regulator and returned to the House of Commons.

The independent determination of MPs’ pay and pensions should be entrenched in primary legislation in the same way as expenses. The independent regulator should therefore be given statutory responsibility for setting MPs’ pay levels and overseeing MPs’ pensions as well as for dealing with expenses.

Responsibility for investigating allegations about breaches of the rules on expenses should be vested in the independent regulator, which should be able to appoint its own compliance officer for this purpose. The compliance officer should be able to conduct an investigation on his or her own initiative, at the request of the independent regulator, or in response to a complaint from a member of the public or an MP.

The independent regulator’s enforcement regime should be strengthened by giving it the power to: „„ Compel MPs to cooperate with the new body, including through the provision of relevant information. „„ Require the repayment of wrongly paid or misclaimed sums, with associated costs if appropriate. „„ Impose, subject to the procedural safeguards laid out in the Act, its own non- parliamentary sanctions for breaches of the expenses regime (including where necessary of a financial nature) analogous to those available to HMRC and DWP, without the need to report to the Commissioner for Parliamentary Standards.

The appointments of the chair and members of the regulatory body should be carried out with the involvement of an independent panel, following the Commissioner for Public Appointments Code of Practice, to advise the Speaker’s Committee.

The chair of the new regulatory body should be appointed for a single, non-renewable five year term. The other members of the new body should in principle be appointed on the same basis. But some flexibility may need to be shown in relation to those appointed in the first round.

The Speaker’s Committee on the independent regulator should include three lay members drawn from outside Parliament who have not previously been MPs or peers. They should be chosen through the official public appointments process and formally approved by the House.

The independent regulator should be placed under a general duty to act openly and transparently, to give reasons for any revisions to the expenses scheme, and to report, and take account of, the views of the general public as well as the House of Commons.

The Parliamentary Commissioner for Standards should be able to conduct investigations without waiting for a formal complaint and should include in any report to the Standards and Privileges Committee an indication of the seriousness of any breaches in the rules or code of conduct which have occurred. The Commissioner’s reports should continue to be published.