MPs hold down own pay, but keep 'John Lewis list'

MPs today bowed to Government demands for restraint and awarded themselves a 2.25 per cent pay rise for this year.

But they also voted by a majority of 28 to keep the so-called John Lewis list, which allows MPs to use taxpayers' money to buy furniture and household goods for their second homes.

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Voting was 172 to 144 for an amendment by Labour former minister Don Touhig that will retain the Additional Costs Allowance (ACA) and subject it only to internal audit - rather than external audit.

The pay decision was taken without a vote after a backbench move to raise salaries by up to 2.3 per cent this year and about 4.7 per cent next year was rejected by 196 votes to 155, majority 41.

A move to boost salaries with £650 a year "catch-up" payments over the next three years was also rejected by 224 to 123, majority 101.

It will be the last time MPs debate and vote on their own pay rise after they agreed to link future increases to those given to other public sector workers like doctors and teachers.

Earlier today, the Prime Minister underlined the need for restraint among MPs who are paid £61,181 a year.

Speaking ahead of the debate, Mr Brown said: "I hope that MPs today will recognise that the settlements in the public sector for key workers have been around 2.3 per cent, 2.4 per cent, 2.5 per cent when they vote on this year's pay in the House of Commons."

In the Commons, Ms Harman said she hoped that after today's votes on pay and expenses, MPs would be able to get on with their work "free from the innuendo and misrepresentations about pay, which have hung over this House too long".

Ministerial salary increases have already been scrapped in a bid to set an example at a time of inflationary pressures, stoked by big rises in fuel and food costs.

Ms Harman said that as MPs were paid from the public purse "we should show the same discipline in our pay increases as we expect from the public sector.

"And, for the future .... like everyone else (we) should not decide on our own pay and should not vote on our own pay increases."

MPs also backed a move to keep their home addresses private from Freedom of Information requests although a final vote on the issue will be taken before the summer recess.

In the allowances debate, Nick Harvey, speaking on behalf of the Members Estimates Committee (MEC), urged MPs to back the findings of their "root and branch" review to "restore the reputation" of MPs following a series of scandals and revelations about the expenses system.

He proposed a package of reforms which would see an end to the use of public funds to furnish second homes and would require MPs to produce receipts for all purchases, insisting: "We need a more rigorous system of audit and assurance."

The MEC investigation was carried out in the wake of the scandal surrounding Derek Conway (Old Bexley and Sidcup), who was subsequently stripped of the Tory whip and suspended from the Commons for 10 days, having overpaid his son out of his expenses.

The MEC's recommendations included:

* Receipts to be provided for all claims - rather than those over £25, as at present;

* Staff contracts and job descriptions to be provided for all employees paid with public money;

* Payments for furniture, household goods - the so-called John Lewis list - and capital improvements on MPs' second homes to be halted;

* A new Overnight Expenses Allowance, capped at £19,600, to cover the cost of staying away from constituency home on parliamentary business, replacing the £24,006 Additional Costs Allowance;

* MPs in outer London to lose half of the second home allowance to which they are now entitled;

* Supplement for inner London MPs to rise from £2,916 a year to £7,500, to reflect the cost of living and working in the capital;

The MEC also recommended the National Audit Office should be given the same access to the House as any other public body.

Mr Harvey warned against defeating this proposal: "If we vote that down then we knowingly vote to have our accounts on a less adequate basis than those accounts of the rest of the public sector.

"In my view, in the light of the challenges we have experienced to the reputation of this House, it would be an utterly catastrophic thing for us to do that."

But Mr Touhig (Islwyn), who said he supported "robust scrutiny" and was not against transparency, called for the ACA to be retained and subject to internal audit.

"What we are proposing is a very through internal audit system performed by an in-house team ... working at arm's length from House authorities - rather than outside auditors from big City firms costing the taxpayer millions of pounds," he said.

"If we accept all the recommendations of the report we are committing ourselves to employing hundreds of accountants who will travel Britain, at great cost to the taxpayer, checking on whether a Member in the north of Scotland has spent too much on paper clips ....

"The amendment that I have tabled supports the continuation of the ... ACA to meet the necessary costs of MPs living away from home.

"I think most fair-minded people would accept that the extraordinary situation of an MP needing to live both in his or her constituency and London requires an allowance to support that cost."