MPs face expenses reforms

The review team charged with coming up with proposals following recent abuses is set to meet to sign off a package of reforms to be presented to colleagues on Wednesday.

It follows months of heightened scrutiny of the expenses regime since MP Derek Conway was caught overpaying his son out of his Parliamentary staffing allowance.

That prompted the current "root and branch" review of the system which is being undertaken by senior MPs on the Members' Estimate Committee, chaired by Speaker Michael Martin.

As well as reform of the £90,000-a-year staffing kitty, MPs are under severe pressure to tighten up their second homes allowance after it emerged they can spend more than £20,000 a year on household goods.

There is also anger that MPs can use the so-called additional costs allowance (ACA) to cover the cost of mortgage interest payments and pocket any capital gains.

Tory MPs Nicholas and Ann Winterton were rebuked by the Standards and Privileges Committee last week for buying a Westminster flat outright using their ACA, then effectively renting it from themselves, still using the allowance.

The expenses review has been considering replacing the ACA, now worth £24,000 a year, with a tax-deductible salary top-up. Other options are to scrap it and introduce a per diem daily allowance for attendance in the Commons or to retain the ACA but reforming some of the rules governing its use and increasing checks.

Figures reported in The Sunday Times, suggesting the proposed salary top-up would be about £40,000 a year, worth £24,000 after tax, were not recognised by a source close to the committee.

Any such move would be certain to face fierce opposition by campaigners and even many MPs, who have been embarrassed and angry at the excesses of some of their colleagues.