Hidden world of MPs expense scams

The illegal diversion of taxpayers' money into party political funds is rife in the Commons, MPs have told The Independent.

But unless hard and fast evidence of the widespread sleaze is submitted to Sir Gordon Downey, the Parliamentary Commissioner for Standards, it is unlikely that any action will be taken. The Independent has been unable to find any MP with the courage to make a stand, and publicly blow the whistle on their own party.

At a meeting of the left-wing campaign group of Labour MPs on Wednesday night, one senior MP said that a regional office had sent a letter urging her to follow the lead given by two frontbenchers in making significant donations to the party from Commons expenses.

Those expenses are supposed to be used to finance parliamentary activities and as they are tax-free, using them for party or personal expenditure is a fraud against the taxpayer.

The Independent revealed on Wednesday that new Labour MPs had been asked to "contribute" pounds 5,000 to party funds from their tax-free pounds 47,568 Office Costs Allowance; to pay part of the salary of local party agents or organisers.

The initial request for a donation was made at a briefing meeting for all 178 new MPs by a senior party official. That was followed up by regional party offices, saying that the money should be paid from the tax-free, taxpayer-funded allowance.

Following The Independent exposure of the "sting", party leaders acknowledged that it had happened, and gave a guarantee that it would be stopped dead in its tracks. It now appears that the operation has been running for some years across both main political parties, and is likely to continue.

But as Labour MPs pointed out yesterday, The Independent report had not raised "one peep" of Commons protest - because the Conservative Party was running the same scam.

Chris Butler, former Conservative MP for Warrington South, told The Independent that Tory MPs had been under pressure for a number of years to pay part of their Office Costs Allowance towards the wages of an agent.

Mr Butler said he had been deeply unhappy about the pressure he was put under. "Since the agent undertook no discernible parliamentary work on my behalf, to have paid such money would have been illegal and I could have ended up in prison convicted of fraud," he said.

He said the taxpayer was being asked to fork out because the unpopularity of the party meant that it could no longer attract donations in conventional ways.

The former MP estimated that about 25 to 30 per cent of Tory MPs paid part of their tax-free allowance to their constituency association.

"It puts MPs in a dreadful position, open to blackmail from their agent or the party," he added.

Some MPs insist there is no problem because the money is spent legitimately on parliamentary activities. Andrew Robathan, MP for Blaby, pays pounds 200 a month to his party association.

"This goes towards secretarial, rent and travel expenses because they arrange all my surgeries and visits," he said. "It is all accepted by the Fees Office."

But another former MP, who paid over pounds 4,000 a year to his constituency association said: "I was very unhappy about it and not having to deal with this dilemma was the only pleasant aspect about losing.

"My association chairman was very nasty about it and insisted that I paid the money over."

He said there was pressure both from Conservative Central Office and from local party chairmen to pay over money, even in cases where "no allowable services were being provided by the association".

He added that one current MP paid more than pounds 10,000 a year to his constituency association and another who paid pounds 2,000 was a senior frontbencher.

The former MP said that he made the association itemise the expenses carefully, but said: "It is really impossible to define how much of office rent is down to constituency matters or party matters."

He said the Parliamentary Fees Office had sympathised with MPs under pressure and had co-operated in drawing up a standard agreement for contracts between MPs and their constituency associations.

Indeed, a letter written in 1991 by Paul Green, the then Legal Officer at Conservative Central Office, obtained by The Independent, says: "Quite a number of MPs do make a contribution from their secretarial allowances towards the costs of their local associations. The normal process by which an association can receive such financial help is by invoice to the Member for Constituency or Secretarial Services which is sufficient for the Fees Office to pay."

The Commons Fees Office does not require any detailed invoice from MPs because they have to sign a form confirming that the costs are being incurred for constituency, rather than political, purposes, and, as honourable Members, their word is naturally accepted.