Sunday, May 24, 2009

Q & A : MP EXPENSES ROW EXPLAINED !

Revelations in the Daily Telegraph about exactly what MPs have been claiming on expenses has prompted a public outcry and a pledge to reform the "gentlemen's club" at Westminster:

WHAT HAS HAPPENED?
Most MPs have to live in two places - in their constituencies and in London where they attend Parliament. They are allowed to claim expenses to cover the cost of running a second home. Details of what has been claimed on second home expenses have never been revealed before the Daily Telegraph got hold of a leaked copy of all the claims. Many MPs have been accused of extravagance, of over-claiming and avoiding tax on home sales. MP-by-MP: Expenses claims
HOW MUCH CAN THEY CLAIM?
The "additional costs allowance" is worth up to £24,006 in 2008/9 for MPs representing seats outside central London. They used to be able to file claims for up to £250 without providing a receipt but that was reduced to £25 last year and is being cut to zero. It covers things like mortgage interest payments on second homes and utility bills - but officials also allowed claims for items of furniture, electrical goods like televisions, refurbishments and food. Those representing inner London seats were entitled to a much lower allowance, which until 2009 had been worth £2,916. What MPs can claim
SO, WHAT HAVE THEY BEEN CLAIMING FOR?
The most eye-catching claims include ones for clearing a moat, maintaining swimming pools, a £1,645 "duck island" and a claim to fit mock Tudor beams to the front of a house. One MP claimed for a house that was neither in London, nor her constituency. Two MPs continued to claim for mortgage interest payments, after the mortgages had been paid off - they blamed that on accounting errors. Claims for small items have also been ridiculed - including a trouser press, a bath plug and some Hob Nob biscuits. And there is some annoyance at large food bills - some charged even when Parliament was in recess.
DID THEY BREAK ANY RULES?
All MPs had to sign a declaration with every claim to the effect that "I confirm that I incurred these costs wholly, exclusively and necessarily to enable me to stay overnight away from my only or main home for the purpose of performing my duties as a Member of Parliament".
SO THAT'S A YES?
You might think that would be the case but no, all MPs have said they acted within the rules and seem to be basing much of their defence on the fact that their claim was paid out by the fees office. It does seem that the rules were rather vague or lax. But it is also the case that the UK's Parliament has worked for centuries on the basis of MPs being "honourable members" so in most cases the fees office was, perhaps not surprisingly, unlikely to challenge an MP if they had given their signed word that the claim was legitimate. 'Lax' MP expenses rules condemned
WHAT'S ALL THIS ABOUT FLIPPING?
MPs have to tell Commons fees staff which home is their "main home" and which home is their "second home" - on which they can claim expenses. The rule book states "the location of your main home will normally be a matter of fact". But they have been allowed to change it. This means some have claimed for refurbishment or mortgage interest on one property, then changed the designation and proceeded to claim for costs on another one. Some have then changed it back again or on to a third property. In some instances the MP has sold a property shortly after claiming the costs of doing it up - they are allowed to keep any profit. Some MPs have said there were good reasons for changing the designation for example when they moved their families to London from the constituency.
DO MPs PAY CAPITAL GAINS TAX ON THESE PROPERTIES?
Some do, some have not. The tax is usually paid when someone sells a home that is not considered, by HM Revenue and Customs, to be their "principal residence". It amounts to 18% of the profit. However several MPs have not paid the tax when they have sold properties they had designated their "second home" with the Commons authorities. This is not illegal and some have argued that the definition of a main residence by the Commons is different from that by HMRC. But critics say it is wrong to tell the Commons one thing and tax authorities another and benefit from taxpayer-funded expenses without paying back any tax in return. Gordon Brown has said it is "totally unacceptable" and it is being tightened up. Blears will pay tax on flat sale
HAVE THEY PUT A STOP TO ALL THIS?
The whole system is being reviewed by the independent committee on standards in public life, which is expected to recommend sweeping changes. But as that's not due to report back for months, some interim measures have been agreed. "Flipping" the designation of second homes is banned in most cases for 2009/10, claims for furniture, cleaning, gardening etc have been stopped. Mortgage interest and rent payments have been capped at £1,250 a month. Expenses: Options for reform
HOW HAS ALL THIS INFORMATION COME OUT?
The Daily Telegraph is remaining tight-lipped about its source, although it has not denied paying for the information. It says it has acted in the public interest. All the receipts were being prepared for publication anyway in July. The Commons authorities had long resisted attempts to reveal the details but were ordered to publish by the High Court, under the Freedom of Information Act. But the Telegraph says many of the key details - such as the "flipping" of second homes - would have remained hidden as addresses would have been blanked out before publication. Police were asked to investigate the leak but chose not to - having concluded that a public interest defence would be a "significant hurdle" to any successful prosecution.
WHAT DO THE MPs SAY?
They say they were acting within the rules and in some cases were encouraged to spend up to the maximum allowed - about £20,000 a year - by the Commons fees office. But they say the system is in urgent need of reform.
WHY IS THE SPEAKER QUITTING?
Commons Speaker Michael Martin has been seen by many as the driving force behind efforts to stop details of expenses claims coming out - such as by taking the Freedom of Information case to the High Court. His supporters say that is not fair and his committee had proposed reforms in 2008 - which were promptly voted down by MPs. But his angry outburst at MPs who had criticised him over his handling of the issue in the Commons prompted calls for him to go - and his failure to announce a date for him to step down a week later prompted open challenges. He said he would relinquish the role to maintain "unity" in the House.
ANY LABOUR RESIGNATIONS?
Justice minister Shahid Malik has stepped down pending an inquiry by into whether his failure to declare a preferential rent deal on his constituency home broke the ministerial code. Former Agriculture Minister Elliot Morley and backbencher David Chaytor have been suspended by the Parliamentary Labour Party. They both reportedly claimed for mortgage interest months after the mortgages had been paid off. They blamed sloppy accounting. Mr Morley also lost his job as Gordon Brown's climate change envoy.
WHAT ABOUT THE OTHER PARTIES?
Andrew MacKay, a Parliamentary aide to Conservative leader David Cameron, has quit his post after the party ruled his second home claims were "unacceptable". Mr MacKay and his wife Julie Kirkbride, who is also a Tory MP, had been claiming second home allowances on two properties. The former Conservative minister Douglas Hogg has said he will not seek re-election - he repaid the £2,200 of clearing his moat, which was submitted with his claims. Sir Peter Viggers, whose most eye-catching claim was for a £1,645 "duck island" is also to retire "at the direct request of David Cameron". Totnes MP Anthony Steen, said to have claimed more than £87,000 over four years for his country home, is also standing down at the next election.
HAVE ANY MPs PAID THE MONEY BACK?
Yes. MPs from all parties are falling over themselves to write cheques, although none have admitted breaking the rules. Who's repaying expenses?
DO MPs REALISE HOW BAD IT LOOKS?
Yes. There is genuine concern among MPs that Parliament has never been held in lower regard by members of the public. Even MPs who have done nothing wrong are reported to be considering quitting as they are considered "crooks" by the public. Some fear Parliament may take years to recover from the furore while others warn that voters may take out their anger with the main parties by backing fringe and extremist parties at next month's local and European elections.
WHAT ARE THE PARTIES DOING INDIVIDUALLY?
Gordon Brown says any Labour MP who "defied" the rules will not be able to stand again. The party's ruling NEC is setting up a panel to quiz MPs whose claims have been scrutinised. Tory leader David Cameron has set up his own scrutiny panel and warned that any Tory MP refusing to return money excessively claimed could be sacked. The Lib Dems say no MP should be able to make a profit on the sale of a home which was subsidised by the taxpayer.
WHAT HAPPENS NEXT?
Gordon Brown has called for an end to the "gentlemen's club" of Parliament and wants an independent Parliamentary Standards Authority to oversee MPs' pay and expenses. MPs are braced for further revelations in the Telegraph and when the details are officially published. At the same time, some are urging the police to investigate the claims made by some MPs on the grounds of possible fraud. The Daily Mail has launched a campaign for private prosecutions to be brought against some MPs. Individually many MPs are holding meetings in their constituencies to explain their claims.
HAVE ALL MPs BEEN ACCUSED OF ABUSING THE ALLOWANCE?
Not at all. Many take exception to suggestions they padded out their salaries with the allowance. Some MPs who were entitled to claim the allowance because they had constituencies outside inner London, chose not to. Others made modest claims. Which MPs didn't claim expenses?

BBC NEWS REPORT.

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