One area that has proved even worse than the luxury items and services claimed on expenses is the question of MPs making capital gains on property purchases. The most egregious and high profile abuses of the allowances system all involve the second homes allowance, and home purchases have been by far the most costly. MPs have claimed for mortgages that didn’t exist, have not provided receipts for rental and mortgage claim, and have been engaged in the morally questionable practice of “flipping”. Tellingly, the only bit of expenses information that will apparently remain secret is the address of those homes – information which is crucial to finding out whether flipping has gone on.
And, whereas there is cross party consensus on how to fix the expenses system, party leaders are curiously quiet about how to solve the quandary of what to do about MPs’ second homes. It is clear that we can’t go on as we have been, that haemorrhaging taxpayers’ cash to pay for MPs’ mortgages at a time when they can’t pay their own is neither financially sustainable nor morally justifiable.
So today the TaxPayers’ Alliance today released a report that outlines a permanent solution to the problem, for good. It’s right that accommodation is provided for people forced to work away from home, but it is time to put an end to MPs being allowed to keep and profit from that accommodation. Our proposal is to provide taxpayer-owned accommodation for those MPs whose constituencies are outside commuter range. That would prevent a recurrence of scandals when MPs make profits from selling homes financed with taxpayers’ money. MPs would not be obliged to take the flats, if they wish to make their own arrangements they are welcome to do so, but they have no further claim on the taxpayer. This system operates well in Sweden, Denmark and Japan. In Sweden, 250 flats were purchased in Stockholm after allowances scandals similar to those we have seen here led to public outcry.
We’re in a recession, and money is tight. There is no public appetite to spend a fortune on buying swanky new accommodation for errant MPs, many of whom have already spent a large proportion of their time fleecing taxpayers. Therefore the best solution is to house them in the Olympic Village once the games are complete. The Village 2012 Games will leave behind a legacy of over 3000 homes. The Olympic Village has not attracted the level of private sector investment that was anticipated and as a result has largely been nationalised. This means there will not have to be any significant extra capital expenditure to purchase the property, and will save taxpayers around £11.5 million in Additional Costs Allowance every year.
More than just purely financial considerations, this proposal will provide MPs with a key opportunity to increase their standing with the public. This option is cost effective, straightforward, voluntary and transparent. It is a veritable gift to shamed MPs – let’s hope they take it.
Susie Squire is Campaign Manager of the Taxpayers' Alliance.