POLITICS
19/10/2012 10:17 BST

MPs Expenses: Senior Politicians Among Those Renting Homes While Claiming Money

MPs were embroiled in a new expenses row today after it emerged that 27 are letting out London homes at the same time as claiming public money to rent in the city.

Former defence secretary Liam Fox, shadow ministers Andy Burnham, Jim Murphy and Chris Bryant, and Communities Minister Don Foster are among those listed as raking in income from properties while receiving up to £20,000 a year in expenses.

Although the practice does not break any rules, it will fuel concerns that politicians are still able to profit from Commons allowances.

The Independent Parliamentary Standards Authority's (Ipsa) blanket ban on MPs claiming mortgage interest came into effect this summer.

They are now only permitted to receive expenses for renting.

The move was intended to head off criticism after the scandal three years ago showed politicians had been using public money to build up property portfolios.

However, it also appears to have created an incentive for many to vacate homes they own.

Research by the Daily Telegraph identified Tory MPs David Amess and Peter Luff, and Liberal Democrat ex-defence minister Nick Harvey among those letting out properties in the capital while also claiming expenses for renting.

The names could only be deduced because Ipsa last night released partial postcodes of taxpayer-funded second homes - which could then be cross-referenced with the parliamentary register of interests.

The disclosure followed linked concerns that MPs are able to exploit a "loophole" in the rules to rent properties to colleagues, who then claim the costs on expenses.

It is understood that four MPs are currently renting from four other MPs - although there are no cases of home "swaps".

Linda Riordan, the Labour MP for Halifax, lets her London flat to fellow Labour MP Iain McKenzie for £18,720 a year, according to the Daily Mail.

Mr McKenzie told the paper: "If I had known beforehand that the flat was owned by an MP then I probably wouldn't have taken it.

"You've got to apply the test of how it looks to the man in the street, regardless of whether it's above board or not."

Yesterday, Commons Speaker John Bercow was accused of trying to suppress details of the matter after warning Ipsa that revealing the identities of politicians' landlords would be a "security risk".

The watchdog had been due to disclose the material in response to another Freedom of Information (FOI) request.

However, the process has now been put on hold in the wake of Mr Bercow's intervention.

In a letter to Ipsa, Mr Bercow insisted there was a "very real danger" that MPs' residential addresses could be discovered as a result of the planned publication.

Responding to the Speaker's letter last night, Sir Ian Kennedy, chairman of Ipsa, insisted the authority "would not, under any circumstances, release the full address" of an MP.

But he added: "The policy also makes clear that we would release, on request, the names of landlords and other suppliers of goods and services where this was in support of a claim made under the scheme for business costs and expenses."

Sir Ian said all affected MPs had been contacted, asking if they had concerns about the release of their landlord's details.

However, only a third - 110 - replied. Some 60 have indicated they have no problems with the disclosure, and 50 expressed reservations.

"We are therefore delaying our response to the FOI request and will be writing to those MPs concerned to give them a further two weeks to respond," he said.

Tory Sarah Wollaston said she had grave concerns about revealing MPs' addresses, having had her London flat and constituency home broken into.

The Totnes MP said she agreed with the need for transparency, but was worried about a tiny minority of people, including activists, using the information maliciously.

Dr Wollaston said: "I am very happy for everyone to know that I have no connection with my landlord in my London address - I have never met them and I don't think they even live in this country.

"But if they (Ipsa) publish politicians' home addresses then you are exposing them (MPs) to very difficult situations."

Matthew Sinclair, chief executive of the TaxPayers' Alliance, said: "If MPs are again found to have exploited the expenses system, it will be another stain on the reputation of Parliament.

"It was the cry that 'it's all within the rules' combined with attempts to suppress the publication of claims that made the MPs' expenses crisis three years ago so toxic. Whilst the rules may not technically prevent MPs from renting properties to one another, it is certainly against the spirit of those rules.

"The public's faith was left in tatters in 2009 and the latest allegations could endanger much of the work that has been done since then to restore public confidence in our politicians.

"It is vital that there is total transparency in all matters relating to MPs' taxpayer-funded expenses and allowances."

In a statement on his website, Mr Luff insisted that Ipsa's rules had forced him to move out of his home and rent.

"In July 2009 I purchased, with a mortgage, a small London flat to live in when performing my parliamentary duties," he said.

"I had hoped to be allowed to remain in this flat for as long as I remained an MP. Mortgage interest was claimed for this property for approximately eight months until the 2010 election.

"The new Ipsa expenses scheme did not allow MPs to claim the cost of mortgage interest.

"I could not, therefore, afford to live in my London flat and I had no choice but to sell it or to rent it out.

"Having only recently purchased it, I chose to rent it out and this information has been in the public domain for two years, it having been properly declared in the Register of Members' Interests.

"Ipsa specified that when MPs are away from home they must live in rented property or stay in a hotel. When I am in London, I now therefore live in a rented flat.

"This is not my preference - I would have preferred to continue to live in the flat I own, but Ipsa's well-meaning rules, designed to safeguard the taxpayers' interests and promote transparency, oblige me to do so.

"Ironically, the costs to the taxpayer would have been lower had I been allowed to continue with my previous arrangements."

A spokesman for Mr Burnham declined to comment on his arrangements.

Asked whether David Cameron was concerned about MPs renting out their flats, a Downing Street spokeswoman said: "Clearly the Prime Minister is committed to transparency, and this Government has done more than any other in terms of ensuring transparency, but in this particular instance it is a matter for Ipsa.

"Ipsa has been established to deal with these sorts of issues, so it is a matter for them."

Ipsa later insisted that MPs letting out properties was "an issue of their own private financial affairs over which we rightly have no authority".

But it said the question of whether they should be allowed to rent from other MPs would be considered as part of a regular review of the rules next month.

"We ended the practice of MPs getting a taxpayer subsidy to own a second property. It is clear this is what the public wanted and MPs can no longer claim for a mortgage from the taxpayer," the statement said.

"Instead we have a system of clear rules for renting, capped budgets limiting how much MPs can claim, and transparency - we regularly publish details of who claims what and when - for their rent and all other claims.

"On the point of MPs having properties they rent out - this is an issue of their own private financial affairs over which we rightly have no authority.

"We cannot say an MP should not own a property or properties, or restrict what they do with those properties on the open market."

The statement went on: "The next public consultation on the rules will launch in November 2012. As part of this we will consider the issue of MPs renting from other MPs."

Asked about the disclosures at an EU Council meeting in Brussels, Mr Cameron said people should take any complaints to Ipsa.

"The previous government set up an entirely independent body to deal with this issue," he said. "Transparency should be at the heart of the system , but we should let Ipsa get on with this."

Sir Christopher Kelly, chairman of the Committee on Standards in Public Life, said: "The principles here are clear - MPs should be properly reimbursed for costs they incur but not obtain personal financial advantage from the system.

"If it is established that is what has been happening here, it is clearly against the spirit of the new arrangements even if it is not technically against the rules.

"The security issues relating to publication of addresses cannot be insurmountable. Transparency is a key factor in maintaining public confidence in the new system."

Conservative MP Mark Field told BBC Radio 4's World at One: "I am a great supporter of John Bercow as Speaker, but I think he has got it wrong on this matter.

"If there is one lesson we should have learnt from the expenses scandal of 2009, it is that we have now to be open and transparent on all these matters.

"I think the lesson is quite straightforward. If MPs want their affairs to be private, they shouldn't be claiming any public money.

"The idea that they are going to go into a protracted battle over a Freedom of Information request as a result - the worry is that trust will be further undermined in MPs."

Communities Minister Brandon Lewis claims expenses to rent a property in his Great Yarmouth constituency, while letting out the house he owns there.

The Tory MP, who was elected in May 2010, said he had decided to let his property instead of selling because it was in negative equity.

"It costs the taxpayer around £8,000 a year less because I claim rent for my constituency rather than in London," he added.