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November 23, 2012 / politicsbitesize

MPs’ expenses scandal rumbles on

It transpired this week that MPs are still not playing fair.  Instead of claiming for duck houses and moats, this time round some MPs are claiming rent for houses that they are then subsequently letting.

It has emerged that 30 MPs who bought properties in London with the help of the taxpayer are now letting those properties out while, at the same time, claiming rent from the taxpayer for another property.  Under the pre-2009 expenses scheme, MPs could claim back mortgage interest payments, but in August 2011 the Independent Parliamentary Standards Authority (IPSA) ended this perk.  Now, MPs must claim for rent or hotels instead and it is because of this that the ‘renting and letting’ loophole has appeared.

A report from IPSA divulges the rental allowance of 300 MPs and from whom they are renting.  Other than the 30 mentioned above, it has highlighted that another six former MPs (who would have benefited from the pre-2009 scheme) are renting properties to serving Members who are in turn receiving rental income from the taxpayer.

In effect, what this loophole means is that taxpayer’s money is providing past and present MPs with free accommodation.  IPSA have claimed they are ‘looking at the issue’ and that it could ban the practice in the future.  On Monday, 19th November, it launched the fourth edition of its consultation on the MPs’ Scheme of Business Costs and Expenses.

Chapter four of the document outlines the current rules on accommodation expenditure for MPs working in two locations.  It states that, ‘Accommodation Expenditure is designed to meet costs necessarily incurred on overnight accommodation which is required for the performance of an MP’s parliamentary functions’.  This definition seems reasonable and reads as though the expense would only be claimed for a night or two. Yet the document goes on to reveal (and this needs to be quoted at length) that:

Accommodation Expenditure may be claimed for the following costs: a. hotel accommodation; or b. rental payments and associated expenditure; or c. for MPs who own their property but who are not claiming mortgage interest subsidy;  or d. exceptionally, in the case of MPs receiving payments for mortgage interest on 7 May 2010, continued payment of mortgage interest and associated expenditure.’

The above suggests that the rental payments and associated expenditure (see below) received by eligible MPs can be claimed for a considerable period of time and NOT just the ‘overnight’ stay that the expense is ‘designed’ to meet.  This is confirmed by what the associated expenditure includes: ‘utility bills (gas, electricity, other fuel and water); council tax; ground rent and service charges; home contents insurance; purchase, installation and maintenance of routine security measures; installation of a landline telephone line, line rental and usage charges; installation of a broadband connection and usage charges; connection to a basic, free to air television broadcast package; and the purchase of a television licence.’  If you are claiming all of these, it can be assumed that you are staying in the accommodation for more than one night!

Sir Ian Kennedy, chairman of IPSA, said that, ‘The Scheme is operating well, but it has been suggested that minor adjustments are needed … I’ve always said that the public’s voice needs to be heard on these issues.’  According to IPSA’s website the consultation document is designed to provoke debate and provide a platform for the public to air their views on this issue.

Politics:bitesize would like to tell IPSA that it believes it is a scandal that well paid Members of Parliament, who are employed to serve the people, are allowed to claim accommodation expenses to such a degree that it seems almost ludicrous that they even get paid at all! If we are to believe the rhetoric that we ‘are all in it together’ then the scheme needs to be changed with immediate effect.  ALL MPs should use their very generous salaries to pay their OWN mortgage/rent, utility bills, household insurance, broadband, TV, etc. just like the rest of us.  Surely it is time to tell them that enough is enough!

 ***

 IPSA want to hear what people think about this issue.  The consultation runs until 18 January 2013. The consultation document is available at http://parliamentarystandards.org.uk/Pages/Scheme-Review.aspx and people can respond to the consultation questions by email to schemeconsultation@parliamentarystandards.org.uk, by post, or by completing IPSA’s online survey.

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