'Ban MPs from improving homes on expenses'

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Indy Politics

MPs must be banned from using public money to buy furniture and renovate their homes, a Commons review recommended today.

But they should still be able to claim up to £19,600 tax-free every year to cover the cost of running a second home.

Parliamentarians should also be entitled to £30 a day for subsistence without receipts, up to a maximum of £4,200 every year.

The conclusions came in a long-awaited report from the Members Estimates Committee, which has been considering how to restore public trust in MPs' expenses after a string of scandals.

As well as effectively spelling the end of the so-called "John Lewis List", the committee called for better auditing procedures.

At least one in five MPs would face "spot checks" on their claims and, except for the subsistence allowance, all claims "however small" would require receipts from 2009/10.

The committee said: "Our overriding conclusion is that we must introduce a robust system of scrutiny for parliamentary allowances as a matter of urgency in order to build public confidence.

"We recommend that, with immediate effect, Members should no longer be able to claim reimbursement for furniture and household goods or for capital improvements."

The committee, led by Commons Speaker Michael Martin, said MPs should be permitted to keep profits from selling on properties funded by the taxpayer.

"Property values can go down as well as up, and some MPs who left Parliament at the 1992 general election - after a property crash - faced losses.

"The property market is currently looking rocky once again, so the same could happen. An MP who chooses to buy not rent is taking a risk."

The report rejected other options for replacing the Additional Costs Allowance (ACA), under which MPs can claim up to £24,006 towards running their second homes.

It branded the idea of buying or building Parliamentary flats in central London as "neither feasible nor affordable" in "one of the most densely populated, expensive and mature property markets in the world".

Scrapping the allowance altogether and boosting salaries from around £61,000 to more than £102,000 had attracted "both strong support and firm opposition".

But the plan would be extremely complex, requiring major adjustments to pensions and income tax arrangements, according to the committee.

Giving MPs a daily "flat rate" of £30 subsistence and £140 for accommodation - up to a maximum of 140 days per year - was also "not recommended".

The Commons is due to vote on the recommendations on July 3 - the same day as they decide their pay rises.

An accommodation allowance of £19,600 plus £4,200 subsistence would mean MPs could claim a maximum of £23,800 - just £206 less than the ACA top limit now.

The committee also proposed a pay hike specifically for inner London MPs - who are not currently eligible for ACA and instead receive just over £2,900 in taxable "weighting".

That London Supplement should be boosted to £7,500 a year to recognise the "extra costs of living and working in London, combined with the unsocial hours on at least two days a week".

The figure is more than double the £3,623 recently suggested by Parliamentary salary reviewer Sir John Baker.