MPs Expenses – the missing mortgage money issue

So – MPs expenses are back, but this time with a slightly more complex plot.

Former civil servant Sir Thomas Legg has been accused of retrospective re-writing of the rules in calling on MPs to repay anything above certain set limits for things like cleaning their second homes.

MPs certainly have a point. This retrospection is doubly unfair in that it applies rules that didn’t exist at the time and arbitrarily invents rules that seem to have little logic to them. The £2,000 ceiling on cleaning bills, for example, amounts to a couple of hours cleaning a week if proper wages, NI, etc are paid. That’s pretty miserly.

Leaving that aside, Sir Thomas’ biggest error is not this retrospection but the complete failure to tackle the second home mortgages issue. Under the old rules an MP can buy a house – either in their Constituency or in London – and have the mortgage interest on the property paid by the taxpayer.

Most attention has focussed on “flipping” – where an MP changed their ‘main residence’ to maximise gains from a sale, or avoid capital gains tax, or both. Whilst this is a disgrace, it ignores the MPs who are making a small fortune without flipping.

David Cameron, the Tory leader, has claimed over £140,000 to cover the mortgage of the very nice little cottage he bought in his Oxfordshire constituency. Gordon Brown has claimed over £110,000. Each of these ‘innocents’ stand to make a tidy sum when they eventually sell these properties, heavily subsidised by the taxpayer. Neither has been challenged about it by our media, or apparently by Sir Thomas Legg. We can only assume he doesn’t think it’s important or possibly just a bit too sensitive (he is an ex-Mandarin after all – Sir Humphrey always knows when to sidestep the elephant traps).

Nick Clegg appears to be calling for the review of past expenses to be expanded to include mortgages – but his wording has been careful. He seems to only be calling for an investigation into flipping. This is hardly surprising, because he has claimed nearly £67,000 on his second home in just 3 years – more than either Cameron or Brown in the same years (Clegg only became an MP in 2005).

All three leaders are competing to be seen as tough on delinquent MPs and force them to repay whatever Sir Thomas, however unreasonably, asks them to. David Cameron, especially, has tried for the moral high ground whilst having carefully milked the system for maximum personal benefit and in the process effectively pocketed far more than any of those he now threatens with sacking as Tory MPs.

When David, Gordon and Nick volunteer to repay a large chunk of the more than a third of a million pounds they have between them had out of the taxpayer, perhaps their tough stance might seem just a little more justified.

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