The Big Question: Will Parliament ever agree a means to stop the abuse of expenses?

Why are we asking this now?

In the last few years a string of scandals involving the inappropriate claiming of expenses by British politicians has brought public trust in our politics to a new low. Reforms are urgently needed but those proposed by the Prime Minister last week have already come unstuck. One week ago Gordon Brown set out a plan to replace MPs' second home allowances with a daily "attendance allowance" for "clocking in" to Parliament, but yesterday his office announced that the "allowance" was to be junked. The move comes after the idea met a tidal wave of criticisms from both opposition leaders and even members of his own Cabinet. As a result Parliament is still no closer to reaching consensus about how to reform second home payments, though a ray of hope has appeared in the unlikely guise of Liberal leader Nick Clegg – who had been demanding that MPs should be forbidden from buying them completely. He has now watered down his stance in an attempt to reach a cross-party agreement before a debate on the issue in two days time.

What is the problem with MPs expenses?

The widely publicised revelation that Home Secretary Jacqui Smith placed an expenses claim for two pornographic movies watched by her husband is just the most recent abuse of taxpayers' money. First came the humiliation, in 2007, of Tory MP Derek Conway who directed more than £40,000 of public money to his son Freddie, a student, for "Parliamentary research". A subsequent investigation by the Committee on Standards and Privileges found there was "no record" of the work Freddie had done, and his father was suspended from the House and ordered to pay back £13,000. The Conway case opened the floodgates to a series of investigations and freedom of information enquiries by journalists which have exposed an expenses system abused by MPs in grand style.

We now know that members claim tens of thousands of pounds for second homes while they rent out third ones; that ministers like Geoff Hoon and Margaret Beckett have claimed for second homes while living in so-called "grace and favour" properties paid for by the State; and that Mrs Smith has expensed everything from a new kitchen to a patio-heater for her sister's London home. Other MPs, including the Conservative backbenchers Sir Nicholas and Lady Winterton, have claimed rent for homes they already owned outright. And these abuses, almost all of which are acceptable within the rules laid down in Parliament, have cost taxpayers millions.

How much?

Last year the total expenses bill of Britain's 646 members of Parliament was a whopping £93m.

So what has Gordon Brown proposed?

His first proposal is that all MPs should file receipts for the expense they claim – something, bewilderingly, which is not required under the present system. He also wants MPs who represent constituencies in London or live in "grace and favour" accommodation to stop claiming for second homes – obvious abuses and necessary reforms. He also suggests that MPs publish all of their outside income, and that their staff should be employed by the House rather than members themselves. While these suggestions will be included in the debate on Thursday – the plan for an "attendance allowance" will not.

Why did he propose an "attendance allowance"?

The current "additional costs allowance" worth £24,006 for 2009-10 was designed, in the words of Parliamentary administrations, to "reimburse members for necessary costs incurred when staying overnight away from their main home for the purpose of performing Parliamentary duties". But in reality MPs have been taking advantage, racking up bills for everything from mortgages to Hi-fi's. A daily allowance, fixed at between £150 and £200, and given to MPs on those days they attend Parliament was designed to ensure that all MPs were treated fairly.

Could it have stopped the abuses?

No chance. In Europe, where the attendance allowance has operated for years, it is referred to by the acronym SISO – "Sign In, Sod Off". A recent investigation by Radio Télévision Luxembourg showed that MEPs arrive in Parliament on Friday mornings, sign the attendance register to claim the allowance before immediately turning tail for home. In Britain it would seem absurd for MPs to claim £150 for merely turning up to work – and to propose such a measure in the middle of a deep recession looks not unlike an act of political suicide. That is why neither David Cameron nor Nick Clegg would care to associate themselves with it.

So can MPs sort this out?

Parliamentarians, first discredited by the expenses scandals, have been further humiliated by their juvenile political wrangling over reform. Members from each of the three main parties have been exposed for taking advantage of their expenses so it is in all their interests to settle it. But despite this no one can agree – a point made best by the contents of a recently publicised telephone conversation about the "attendance allowance" plan between David Cameron and the Prime Minister. Mr Brown apparently said: "Take it or leave it. If you didn't keep raising it at Prime Minister's Questions we wouldn't be in this mess." To which Cameron replied, "You will get slaughtered. You cannot propose to give people the same amount of money but with no receipts". The prospect of a cross-party consensus does look somewhat bleak.

What other options are available?

Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, has stated that reform should be designed by an independent commission – it will have to be if MPs cannot agree. First though, the purpose of all these expenses should be clarified. They were originally introduced in 1969 to ensure that MPs in rural seats could stay for late debates and that secretaries could have pensions. Since then they have gradually escalated to give members a secret pay rise – because while salaries are made public, expenses are not. The more fundamental question of what members should earn remains unsolved. One answer, that parliamentarian's salaries should be linked to civil-servant pay is popular – though it was ignored when first proposed in the 1940s by Aneurin Bevan. After several years of scandal, one thing is obvious though – any new system will certainly require transparency.

Transparency? How so?

Parliamentarians have been able to access perks that most of us could only imagine - not least because we have rarely been allowed to scrutinise them. Currently, the Prime Minister has no plans to require the publication of receipts though this would obviously force them to behave better as misdeeds would be promptly exposed. Currently they are allowed to fester – humiliating our leaders and making the business of government more difficult. Before Jacqui Smith was exposed for claiming pornographic films she made a variety of moves towards curbing abuses in "adult industries". It is now unthinkable that she could speak on this issue with any moral authority again. So the policy work is wasted and reform is lost. Until the expenses issue is settled, our politics will continue to be undermined.

Can MPs be trusted to sort out their own affairs in this case?

Yes

*The fact that salaries are so low and that MPs offices are still poor by comparison to US Senators, for example, shows that the system works

*Members are empowered to vote on the Budget so they should be trusted to decide their wages

*Gordon Brown's retreat on the attendance allowance gives hope that all-party agreement can be reached

No

*MPs have failed to act responsibly, cloaking their perks in secrecy and fighting all attempts to find out what is going on

*The past week has proved that even basic reform can quickly turn into a childish slanging match between Labour and Conservatives

*No one should decide their own remuneration