last updated: Tuesday 24 March 2009, 11:44am

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Shake-up of MPs' expenses planned

Tony McNulty

A wide-ranging review of MPs' expenses is on the cards amid a fresh row over their allowances.

Prime Minister Gordon Brown has written to Sir Christopher Kelly, the chairman of sleaze watchdog the Committee on Standards in Public Life, to look into the issue as well as that of MPs' pay.

It follows the case of Tony McNulty, the minister for Employment and Welfare Reform, who claimed a second home allowance on the house where his parents live in his Harrow constituency in northwest London, despite his main residence being just a few miles away in Hammersmith.

Tory MP Greg Hands has confirmed he submitted a formal complaint to the Parliamentary Commissioner for Standards, John Lyon.

Mr McNulty has claimed about £60,000 in allowances since 2001 for staying in his parents' home. A spokesman insists the MP is entirely within Parliamentary rules as he uses the house as a base two or three days a week for constituency work.

However, Mr McNulty's constituency office is less than two minutes' drive away.

Sir Christopher Kelly 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.'

He went on: 'The Committee will be talking to interested parties and will publish an Issues and Questions paper setting out the scope of the inquiry in due course.

'In our usual way, we will ask for written evidence and hold public hearings. We intend to start the inquiry towards the end of year and will report early in the life of the new Parliament.'

Mr McNulty said he stopped claiming for the property in January and believed there were 'anomalies' in the system for claiming for second homes.

The Additional Costs Allowance, worth up to £24,000 a year, is paid to MPs from outside inner London to cover the cost of staying overnight away from their main home for the purpose of performing parliamentary duties.

Most MPs use the money to pay for a base in central London near to Westminster, though some, including Mr McNulty, opt - entirely within the rules - to claim for the cost of running a constituency home.

The controversy broke at a time when Home Secretary Jacqui Smith was already under fire for claiming thousands of pounds in allowances for staying in her sister's south London home.

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