MPs’ expenses – the key questions

How did the furore over MPs’ expenses begin?

In 2009, MPs’ detailed expenses claims were leaked to the Daily Telegraph, provoking a public backlash against politicians that endures today, even though the rules have now been changed.

The abuse revealed by the Telegraph in daily instalments led to several MPs losing their jobs, with some hauled before the courts and prosecuted, and others repaying what they had claimed.

Some of the items they claimed for – Sir Peter Viggers’ £1,645 duck house was a striking example – caused outrage and amusement in almost equal measure.

But the big ticket item that led to the most impassioned debate was the cost of MPs’ accommodation: their second homes, funded by the taxpayer. It was up to MPs which of their properties they designated their second home, allowing them to avoid stamp duty and capital gains tax.

To quell public anger, the then Labour government announced the creation of the Independent Parliamentary Standards Authority (Ipsa), ending the practice of MPs regulating themselves.

What were the old rules?

MPs, except those representing seats in inner London, were able to claim up to £24,000 a year for buying and furnishing a second home in the capital.

They could claim for mortgage interest, as well as energy, cleaning and gardening bills, and when their properties were sold, they made the profit – rather than the taxpayer, who had been subsidising their mortgage.

MPs could also employ members of their own families – at the taxpayer’s expense – while those who lived together were able to claim the maximum £24,000 allowance each.

Travel costs between an MP’s constituency and parliament were also covered, with politicians and their families entitled to first-class rail tickets.

Politicians standing down or losing their seats were entitled to a resettlement grant of up to 100 per cent of their salary, depending on their length of service as an MP, with a proportion of this tax free.

Receipts were not needed for spending of less than £250.

What are the new rules?

New rules were introduced by IPSA after the 2010 election.

These stipulated that MPs could claim up to £1,450 a month to rent – not buy – a second home, with cleaning and gardening claims outlawed. This amounted to the end of MPs’ second homes allowance, but those who owned tax-payer funded homes were able to continue to claim for them until 2012.

But Channel 4 News can reveal that MPs can claim for rent or hotel stays in London despite owning a property in the capital. We found that 46 MPs were doing this, many of them beneficiaries of the previous system that allowed them to claim expenses for mortgage repayments.

MPs' expenses: 46 claim in London despite owning a property

Under the new rules, MPs were also allowed to employ one relative, although MPs living together could no longer claim as much as £24,000 each.

Journeys between an MP’s constituency and parliament were covered, but first-class rail travel was only allowed if it was cheaper than standard class.

Resettlement grants remained in place, but receipts were required for all spending.

What has happened since 2010?

One big change since 2010 is that MPs who decide to stand down are no longer entitled to resettlement grants, although those who lose their seats at an election will continue to receive this payment, capped at six months’ salary.

After the May election, MPs will also be banned from claiming for evening meals before 11pm.

With MPs’ pay and pensions determined independently, along with reforms to their expenses, Ipsa says their cost to the public purse is now lower in real terms than under the previous regime.

Where there was murkiness, there is now transparency: 30,000 individual claims are now published every two months, with annual spending published once a year.

But MPs are in line for inflation-busting salary increases of 10 per cent, increasing their pay from £67,000 to £74,000.