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Gordon Brown calls for inquiry into MPs allowances

posted 23 Mar 2009, 14:34 by Dilwoar Hussain   [ updated 23 Mar 2009, 14:41 ]
By Andrew Porter, Political Editor
Last Updated: 8:54PM GMT 23 Mar 2009

A formal public inquiry into the system of MPs expenses is to be launched, the official public standards watchdog announced.

The admission by Tony McNulty, the employment minister, that he used taxpayer-funded expenses to help pay the mortgage on a house where his parents live, is understood to have prompted the full-scale inquiry.

Gordon Brown also personally intervened to urge The Committee for Standards in Public Life to look at the allowances system. He also unexpectedly urged the committee to look at whether MPs should have second jobs.

That will raise the political temperature as Mr Brown has been under pressure by some of his own supporters to legislate against MPs having outside interests. Many high profile Tory MPs have second, highly paid jobs in addition to their commitments at Westminster.

The Committee will hold a series of public hearings and draw up detailed plans for reform of the discredited system after the next election.

A statement released by the Committee, set up in the wake of the cash-for-questions scandal in the 1990s, said that major reform was now necessary to "restore public confidence".

The Committee, headed by Sir Christopher Kelly, does not believe that reforms proposed by MPs are sufficient.

Sir Christopher said: "The Committee has been monitoring the situation with MPs' allowances for some time.

"The changes that are due to come into effect in April are significant steps towards greater transparency and - for the first time - a proper system of audit.

"But these changes, by themselves, will not satisfy current concerns about the way MPs are supported to do their jobs. Nor will they restore public confidence."

Mr Brown wrote to Sir Christopher: "I would welcome a review of MPs' support and remuneration, including outside interests as it offers the opportunity to consider the full picture. For example, you will have greater freedom to consider issues such as the impact of MPs holding second jobs and their roles outside of Parliament."

David Cameron recently looked at whether his front bench team should forego their outside interests but in the face of opposition from his own MPs he decided they should not.

But by making his statement, albeit not directly saying MPs should not have second jobs, Mr Brown is trying to provoke a political row in the run up to the election.

The inquiry has been launched following a series of scandals involving MPs' expenses including Mr McNulty; Caroline Spelman, the Conservative minister; Jacqui Smith, the Home Secretary; and, Derek Conway, a backbench MP.

MPs have been accused of abusing the system under which they can claim more than £20,000 a year for second homes. There are also concerns over the millions of pounds paid to spouses of MPs for administrative work.

Mr McNulty is facing an official inquiry after claiming more than £60,000 in Parliamentary expenses for the home where his parents live.

The Conservatives yesterday made a formal complaint to John Lyon, the Parliamentary Commissioner for Standards, claiming the minister had broken the rules.

The employment minister is under pressure to repay the money after admitting that he lives in another house owned by his wife in west London.

If he is found to have broken the rules, the minister may have to repay the money and could even be suspended from the House of Commons. Mr McNulty denies having broken the rules but admitted that he felt "uncomfortable" claiming the allowances.

The formal complaint was made by Greg Hands, a shadow Treasury minister, who said: "£60,000 of taxpayers' money has been claimed in expenses on Mr McNulty's parents' home in Harrow - clearly something has gone wrong here.

"He's the MP from Harrow and living in Hammersmith - neither place is particularly far from Westminster and clearly I just don't think his arrangement is defensible."

In his letter of complaint to Mr Lyon, Mr Hands wrote: "He has claimed the second home allowance for a property in which his parents live. This is in apparent breach of the guidance.

"In addition, Mr McNulty has not been clear on exactly how much work he does at his parents' property and whether he actually stays there overnight."

Sir Alistair Graham, the former chairman of the Committee for Standards in Public Life, said that Mr McNulty had "questions to answer". "He talks about using it as a base to do constituency work, but he didn't say that he stayed overnight there," he said.

"If he was not staying overnight there, and the claim is probably a bit dodgy anyway, there probably should be some money repaid."

Nick Clegg, the Liberal Democrat leader, added: "Anyone reading about this on the train to work will be baffled as to why MPs are allowed to spend taxpayers' money on a second home when they could travel to Parliament within an hour using public transport.

"Until all parties vote to bring much needed transparency to the system of MPs' allowances, taxpayers will continue to be deeply suspicious about what exactly we are spending their money on."

The Work and Pensions Minister insists that he has not broken the rules over the claims made on the house in his Harrow constituency, which is 11 miles from the House of Commons.

He lived there until 2002, when he married his second wife, Christine Gilbert, and moved into her home, eight miles away in Hammersmith, west London.

Mr McNulty admitted that he felt uncomfortable with his own allowances, and, after the recent falls in interest rates reduced the level of his mortgage payments, decided to stop the claims.

While he acknowledged that he did not often stay the night at his parents' house, he claims that he did use it to a "considerable" extent as a base to work on constituency matters.

The row has shone a fresh spotlight on MPs' second home allowances, with particular attention on claims by members representing seats in outer London and the surrounding suburbs, who are entitled to the payments even though many are a short commute from Westminster.