Speaker Michael Martin's expenses overhaul is 'not enough'

An overhaul of MPs expenses fails to tackle some of the most controversial elements of the taxpayer-funded allowances, Westminster's sleaze watchdog warned today.

Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, said plans drawn up by Commons Speaker Michael Martin 'do not address every aspect of the arrangements which have been questioned over the last few months'.

There are also no plans to ban MPs employing relatives on the public payroll and MPs will still be able to cash in on the property market by getting taxpayers to fund mortgage costs.

In a letter being circulated among MPs, Sir Christopher pointedly refuses to give his wholehearted endorsement of the package.

And he warned that he will continue to monitor 'whether there are in practice continuing public concerns or clear and obvious deficiencies' under the new arrangements.

His intervention comes as MPs prepare to vote on Thursday on new ways to fund second homes and living costs proposed by Mr Martin's Members' Estimate Committee.

It is particularly significant because Sir Christopher has repeatedly threatened to conduct his own probe of MPs' allowances if the internal review failed to win back public confidence after a string of recent controversies.

'It must be for the House in the first instance to determine whether the proposals are likely to be sufficient to secure the objective of restoring public confidence,' Sir Christopher wrote.

'But we note that, as the report acknowledges, the proposals focus on audit and assurance rather than structural change and that they do not address every aspect of the arrangements which have been questioned over the last few months.

'My committee will therefore want to continue to monitor the position carefully to see whether there are in practice continuing public concerns or clear and obvious deficiencies in the new arrangements or in their implementation.'

However, he does welcome a 'number of aspects' in the review.

Among the recommendations are that MPs should no longer use expenses to carry out home improvements or buy white goods under the so-called 'John Lewis list'.

They will also have to provide receipts for all expenses, face spot checks on their claims by the National Audit Office and a full external audit once per Parliament.

'Taken together, these seem to us to be significant steps towards the establishment of the robust regime that MPs and the taxpayer have the right to expect,' Sir Christopher concluded.

The additional costs allowance - used to cover the cost of running a second home - would be replaced by two different allowances amounting to a maximum of £23,800 a year - £206 less than the current limit.

However, this includes a £30-a-day 'subsistence allowance' on the 140 days on which Parliament sits with no need for receipts - raising fears that they could pocket £4,200 a year in a 'sign on and sod off' system.

MPs currently claim an average of £135,850 on expenses, including living, office and staffing costs, on top of their pay. Allowances have been in the spotlight following a string of scandals highlighting sharp practices and alleged dishonest claims.

They included backbencher Derek Conway, who was kicked out of the Tory party after being caught paying his son Freddie £40,000 of public money while he was a full-time student.

Tory MP couple Nicholas and Ann Winterton also used £66,000 of taxpayers' cash to rent a London flat they had already bought.