Watchdog could step in on McNulty expense claims

A sleaze watchdog may launch a wide-ranging inquiry into MPs expenses after another minister became embroiled in a row over their claims.

The Committee on Standards in Public Life is considering a probe as employment minister Tony McNulty faces criticism for receiving around £60,000 since 2001 for staying at his parents' home in his Harrow East constituency.

Mr McNulty said he uses the house as a base two or three days a week while working in the constituency, and slept there at weekends when he first entered Parliament.

He dismissed calls to repay some of the money - but confirmed that he had now stopped claiming the allowance.

News of the arrangement drew an angry response from the Tories, who pointed out that the minister's constituency office, where he holds regular weekly surgeries, is less than two minutes' drive from his parents' home.

Shadow Commons Leader Alan Duncan said it was "not clear" that Mr McNulty had operated within the rules.

"The allowance is for a second home, it is not for a constituency office," he told BBC Radio 4's Today programme. "There he is brazenly trying to bat this away by saying 'Oh well, the system is not very good but I didn't do anything wrong'.

"There are some serious questions still to be answered."

The former chairman of the Committee on Standards in Public Life, Sir Alistair Graham, also joined in the criticism.

"I think he has a few questions to answer and if he was not staying overnight there, and the claim is probably a bit dodgy anyway, there probably should be some money repaid," Sir Alistair told Today.

"I think the important thing is that it has been left to MPs to sort out their own arrangements and I think that is a slightly absurd arrangement."

He went on: "I don't think the public feel they can trust them in this area."

The current Committee on Standards in Public Life is understood to be considering carrying out a wide-ranging inquiry into MPs' allowances.

Last month the committee decided against a probe in this parliamentary session, after holding talks with Commons Leader Harriet Harman about proposed reforms. However, it did not rule out holding a review in the next session, which begins in the autumn.

Sources stressed an inquiry had already been under discussion before the latest controversy erupted.

Mr McNulty lived with his parents in the Harrow house, which he owns, before his 2002 marriage to second wife Christine.

After moving into her home in Hammersmith, west London, he claimed the second home allowance on the Harrow property while his parents continued to live there.

In January this year he decided to stop claiming the allowance as interest rates had fallen so far that he found he was able to meet his mortgage commitments from his MP's salary.

The Additional Costs Allowance (ACA), worth up to £24,000 a year, is paid to MPs from outside inner London to cover the cost of staying overnight away from their main home for the purpose of performing parliamentary duties.

Most MPs use the money to pay for a base in central London near to Westminster, though some, including Mr McNulty, opt - entirely within the rules - to claim for the cost of running a constituency home.

Asked on Sky News' Sunday Live why he was claiming expenses on a property where his parents live, Mr McNulty said: "I use it considerably. I work there at weekends when I am in the constituency.

"I have said clearly that I was probably spending one or two nights a weekend there early on when I was an MP. It probably is less now.

"But I think I can do my job more effectively by having that base in the constituency. I think I can do my ministerial job more effectively by having a place in London."

He explained why he stopped claiming the allowance in January: "By Christmas, I decided - not least with the direction mortgage rates have gone in and a whole range of other factors. I reflected on it and thought I could probably do without claiming it."

Mr McNulty's spokesman told the Press Association: "Tony is completely compliant with all the regulations around the allowances for second homes.

"There is absolutely nothing irregular in Tony's situation. Tony is entitled, like all MPs, to an allowance allowing him to maintain a property in central London. He chose to claim the allowance with respect to the cheaper of the two properties."

Mr McNulty said he believed there were "anomalies" in the ACA system for MPs' second homes and thought it should be looked at.

But he insisted he was not casting aspersions on the second-home claims made by 130 other MPs whose constituencies are within 60 miles of London. The "overwhelming" majority of claims were entirely legitimate, he said.

Any review of the system could look at the Scottish model, under which MSPs with constituencies within commuting distance of Holyrood cannot claim for a second home, or a flat rate pay increase for all MPs in return for giving up ACA, he suggested.

The controversy come after Home Secretary Jacqui Smith was condemned for claiming thousands of pounds in ACA for staying in her sister's south London home.

As well as criticising Mr McNulty, Mr Duncan suggested that the second home allowance should be scrapped and MPs' salaries boosted instead.

"The (allowance) that causes all the trouble is this second home allowance," he said. "And I think that one day - you can't do it now because it would look like an increase in MPs' salaries - one day we are going to have to get rid of this allowance and probably roll it into salary, and say people can look after their own housing accommodation and not have a special allowance for it.

"I am not saying that is our policy, I'm not saying that's going to happen immediately, but this is the allowance that causes all the difficulty."

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