MPs 'using office allowances to line their own pockets'

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An investigation is to be launched into how MPs spend their £50,000-a-year office allowances amid concern that the system is being abused.

Proposals to overhaul the secretarial allowance have been drawn up following fears that backbenchers are using public money to line their own pockets or to fund political campaigns.

An increasing number of MPs are employing their wives, partners or members of their family as part-time office staff, prompting the charge that they are effectively using taxpayers' cash to subsidise their household incomes.

John Prescott, the Deputy Prime Minister, is leading a Labour Party drive to allow the House of Commons authorities to tightly control the administration of the Office Cost Allowance (OCA).

The Conservatives have agreed that reform is needed and have called for Whitehall's Senior Salaries Review Body to investigate.

Sir Archie Hamilton, chairman of the Tory backbench 1922 Committee, revealed that his committee's executive shared Labour's concern that abuses of the OCA "should be thoroughly investigated".

In a letter to Clive Soley, the chairman of the Parliamentary Labour Party, Sir Archie states that it would bring Parliament into disrepute if MPs decided the issue themselves.

The SSRB had originally set up the office allowance system and as an independent authority outside Parliament would be perfectly placed to launch an investigation, he said.

However, it was important that any review reduced rather than increased the £50,000 allowance as the cost of Government had risen by some £2 billion a year, Sir Archie added.

Discussions on the issue have already taken place between the parties, but until now the Conservatives have failed to be persuaded of the case for scrapping most of the allowance.

The OCA is worth £50,264 and is paid to MPs in addition to their annual salary of £47,008 so that they can hire staff and set up offices in their constituencies and in Westminster.

Because the OCA is a flat rate, its critics claim that it benefits London MPs most of all as it allows them to combine their constituency and office base in the Commons, saving thousands of pounds a year. Northern MPs say the system is "barmy".

In a move that could upset many of its backbenchers, Labour wants the office cost funds to be transferred to the House of Commons authorities.

Under the proposal, MPs would still choose which secretary or researcher to hire, but the staff would be formally employees of the Commons.

The only money MPs would receive would be for buying office equipment such as computers or printers, a sum that will come to a fraction of the £50,000 currently available.

Nearly all MPs have the use of an office in Westminster, with furniture and the perk of free first class postage and free phone calls from within the Commons.

The new system would help MPs by making it easier to find cover for staff who fall ill and offer extra help with mailbags from constituents.

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