London MPs pay bonanza

The MPs of inner London constituencies were today in line for a £4,584 pay rise - an inflation busting seven per cent.

It is on top of the £2,916 London allowance they were going to get anyway and means their income could go up by £7,500. Their basic salary is currently £61,820.

The £4,584 rise was recommended by a Commons review of expenses which said current Westminster pay scales failed to recognise the cost of living in the capital and anti-social hours.

It will go to MPs including Westminster's Mark Field, Vauxhall's Kate Hoey and Sir Malcolm Rifkind of Kensington& Chelsea.

But some MPs said the rise was too steep at a time when most people are being told to keep their pay rises to two per cent.

One senior MP said: "I support this proposal but the Government may well step in to block it." For outer London MPs, the review proposes that their right to claim £23,000 for a second home is abolished and replaced with an allowance to stay overnight in London of £10,000 - effectively a cut of £13,000 in income.

The cut reflects the fact that the Commons only sits late for two nights a week - so MPs in the suburbs have no real need for a second home.

The changes were proposed in a far-reaching shake up of Commons pay and perks, drawn up in the wake of a string of scandals about MPs milking the system.

Among major changes, MPs will no longer be allowed to dip into public money to buy furniture or renovate their second homes.

MPs outside London will, however get up to £19,600 a year tax-free, to buy and run a second home, plus £30 a day in "subsistence" for coming to Westminster.

The subsistence payment takes the place of the £400 a month no-questionsasked food allowance.

For the first time, external inspectors and auditors will check that MPs are telling the truth in their claims for expenses and staff payrolls.

"The days of the gentlemen's club in the Commons are over," said one of the authors of the report, Labour MP Sir Stuart Bell.

"From now on, we will go beyond an MP's signature to make checks."

The proposals will be voted on next week. They came from a panel set up by Speaker Michael Martin after cases such as Derek Conway who paid his son thousands of pounds of taxpayers' money for a non-job.

It means the end of expenses being paid without receipts or proper paperwork. Receipts will have to be be shown for all claims in future, said the report.

The effect will be to cut the ability of MPs having expensive new kitchens installed at the taxpayers' expense.

But MPs such as David Cameron, who spend almost all their allowances on mortgage interest payments, will be unaffected. The TaxPayers' Alliance chief executive Matthew Elliott said: "None of the options will restore the public's faith in the House of Commons because the system will still operate behind closed doors, away from the gaze of taxpayers and voters. "It is all very well saying that MPs won't be allowed to claim for top-ofthe-range kitchens and expensive TVs, but without full transparency this will undoubtedly creep back in." Gordon Brown's spokesman said the Prime Minister would study today's report before making a full response. He said: "We welcome the move towards greater transparency in today's report and the move towards more rigorous audit and their rejection of a significant increase in MPs' salaries."

INNER LONDON MP

MARK FIELD: £2,916

AS the Tory member for Westminster, Mr Field is an inner London MP and cannot claim for a second home. Instead, he is paid a London allowance of £2,916 on top of his MP's salary of £61,820.

Effect of changes: The London allowance goes up to £7,500, making him more than £4,500 better off. The extra is supposed to reflect the cost of living in London and antisocial hours worked.

OUTER LONDON MPs

ANN AND ALAN KEEN - Total claimed for second homes: £38,515

Mrs Keen is Labour MP for Brentford & Isleworth while her husband Alan is MP for Feltham & Heston. Although they have a constituency home in Brentford, just nine miles from Westminster, they keep a flat near Covent Garden at the taxpayers' expense, without breaking any rules. Both are entitled to claim, even though they live in the same second home. In 2006/7, Mr Keen claimed £19,814 and Mrs Keen claimed £18,701.

Effect of changes: As outer London MPs, the total they can each claim on second homes is around £10,000. However, both will get £30 a day (up to £4,200) a year for food and subsistence. A further review may decide to cut the amount that cohabiting MPs can claim in total.

END OF THE 'JOHN LEWIS LIST'- HOW THE CHANGES WORK

Second Homes

MPs will get £30 a day "subsistence allowance" for working away from home to cover meals and the occasional taxi home - to a maximum of £4,200 a year. No receipts will have to be shown to claim it and they need not declare which days they are claiming for.

They will get a £19,600 allowance for the cost of overnight stays, worth £140 a night, which can be put towards interest payments on a flat they own and running repairs. But they will no longer be allowed to completely refurbish a tatty home, which some have done to make big profits.

Married couple MPs - such as Ed Balls and Yvette Cooper - face a cut in the amount they can claim together, the level to be decided later.

Furnishings

The so-called John Lewis list of goods from flat screen TVs to new kitchens that can be bought with public money is to be scrapped, meaning MPs will have to buy their own furniture. Cleaning and maintenance will be claimable with receipts.

Fraud

For the first time an MP's word will not be taken for granted when they claim expenses. Receipts will have to be shown for all items, ending the system where up to £250 could be claimed in petty cash.

External professionals will carry out "financial health checks" on MPs' office spending, including staffing.

Sample checks will be made on expenses claims by the National Audit Office, whose officials will aim to examine at least one item of spending a year for a randomly chosen fifth of MPs.

Staffing

Staff contracts and full job descriptions to be provided for all employees paid with public money. The aim is to crack down on those allegedly paying relatives for "non-jobs" following the Derek Conway scandal. Office rents will be paid by the Commons rather than reclaimed.

The review rejects calls for MPs to employ staff in constituency offices, rather than at costly Westminster.

London MPs

Ten inner London MPs get a £4,584 rise, from £2,916 a year to £7,500, to reflect better the cost of living and working in the capital;
Outer London MPs, however, lose half of the second home allowance - equivalent to a £10,000 cut. It will be phased in, beginning with new MPs after the next election.