Tory MPs broke rules on second home payments

David Cameron was rocked by a fresh sleaze scandal today when two senior Conservative MPs were found to have breached rules on taxpayer-funded second homes.

The all-party standards and privileges committee ordered a stop on payments of up to £21,600 a year to SirNicholas and Ann Winterton to rent a London flat they had already bought and put into a family trust.

The Tory couple are said to have claimed around £165,000 to rent the property, having paid off the mortgage.

The two MPs and a solicitor are trustees of the trust, which benefits the Wintertons' three children.

The verdict is a fresh blow to Mr Cameron, who is struggling to shrug off a string of sleaze allegations facing his party, as well as to the increasingly discredited additional cost allowance system, which permits MPs to claim up to £23,000 a year for a second home.

The committee concluded: "The Wintertonsarrangements have been in breach of the rules applying to the ACA since July 2006, a fact of which they were officially made aware in February 2007. This should have been addressed at an earlier stage."

The Wintertons bought the flat in the early Nineties, paying off the mortgage after Sir Nicholas got a legacy and an insurance policy matured. They put the property into trust and since February 2002 have occupied it as tenants.

The Tory couple had insisted that their arrangements were cleared by Commons authorities in the late Nineties, although the report said there was no evidence to prove this.

Sir Nicholas and his wife also argued that responsibility for their "unusual" use of taxpayer's funds should be shared with the Commons department for resources, which administers the payments, especially as officials had failed to respond to a letter from Lady Winterton on the issue.

But the standards and privileges committee, chaired by senior Tory MP Sir George Young, dismissed their argument. "Final responsibility rests with members for ensuring that their use of allowances is above reproach," it said.

Parliamentary commissioner John Lyon, who investigated the case, concluded that the trust arrangement benefited "the family, their estate and assisted their personal inheritance tax planning".

The committee said the couple were "arguably" in breach of the rules following changes to expenses rules in 2003, which banned MPs from using additional costs allowance to rent from themselves. But the position was "unequivocal" after more changes in July 2006, because members of the family benefited directly from payment of rent to the trust, which was "explicitly prohibited".

The couple had claimed that the arrangement was approved by the Fees Office and should not be affected by subsequent changes to the rules.