Rules on MPs' expenses set to be rebuffed

(Oli Scarff/Getty Images)

Sir Thomas Legg's handling of the MPs' expenses review is set to be called into question tomorrow by the senior judge who has been considering appeals.

Sir Paul Kennedy will reject the principle of introducing retrospective rules and limits on claims for items such as gardening and cleaning, according to a source close to the inquiry.

A large proportion of the 80 MPs who appealed against the independent auditor's findings have apparently had repayments either overturned or significantly reduced.

"Many others will now be regretting that they did not fight," the source added.

A rift between the two senior figures would threaten to undermine the credibility of the audit of claims between 2004/8, which was ordered by Gordon Brown last May in a bid to draw a line under the damaging expenses scandal.

Sir Paul, a former appeal court judge, is understood to have written a foreword to his section of the report in which he rejects retrospective rules in principle. He also dismisses the idea that MPs should be punished now because claims were "tainted".

The text is said to contrast sharply with the foreword written by former Whitehall mandarin Sir Thomas to his part of the review. They are due to be published together by the House authorities tomorrow morning, alongside a list of MPs who have handed back money since the scandal broke last spring.

Commons sources expect the final figure for repayments to be well below the £1 million mark.

That would be less than the bill for Sir Thomas's work, which had hit £1.1 million by the beginning of last month - not including the costs of the appeal process.

The backlash against the audit process has been growing since the autumn, when Sir Thomas sent letters to hundreds of MPs spelling out how much he expected them to repay.

Many were angry that he had imposed limits for reasonable expenditure on items such as gardening and cleaning - even though none existed at the time.

The Prime Minister himself was hit with a demand for more than £12,000, some £10,000 of which related to "excessive" spending on cleaning.

The 80 MPs who decided to launch appeals learnt the results from Sir Paul last week.

Those who have already made the conclusions public include Tory backbencher Bernard Jenkin, who had been asked to return £63,250 after using the second home allowance to rent a property from his sister-in-law.

However, that sum has apparently been halved by Sir Paul after Mr Jenkin argued he should repay only the money claimed after 2006 - when Commons rules were changed to ban renting from relatives.

Conservative MP for Thanet North Roger Gale, who has been heavily critical of Sir Thomas, said the ex-judge had cleared him after accepting that some £2,100 claimed for mobile phone bills had been "permissible" under the rules at the time.

Others believed to have been cleared on appeal include Liberal Democrat frontbencher Jeremy Browne, and Labour MPs Ann Cryer and Frank Cook.

Along with the audit findings and repayments list, the Commons authorities are also due to publish a breakdown of expenses spending from last year tomorrow.

Mr Brown's spokesman told reporters today: "The Prime Minister supports fully the review of expenses and the way it has been handled.

"The Prime Minister feels very strongly that this is a time to move on to the new system. Legg has been about clearing up the old system and now we must move as quickly as possible to the new system."

The spokesman said Mr Brown continues to believe that the recommendations for a future allowances system drawn up last year by Sir Christopher Kelly should be "implemented in full as a package".

"How that works out in detail is not for the Prime Minister to get involved in," he added.

Sir Christopher yesterday indicated concern that some of his recommendations - such as a bar on second homes for MPs within commuting distance of Westminster - may be watered down by the new Independent Parliamentary Standards Authority, which is currently consulting on the implementation of the new system.