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I welcome this independent study of an issue that is doing so much damage to the reputation of all politicians. I voted against some of the interim changes made in the House on 30th April because I fear they have not been fully considered and I believe they risk tying your hands - even though I suspect some of them have merit.

I take as given the need to minimise the cost of politics and to have the maximum possible practical level of transparency and audit. I will not therefore address those issues in this document.

My underlying concerns are four-fold:

1. The role of the MP has expanded and changed out of all recognition in recent years and is not properly understood by the public; the expenses we receive to perform this role must reflect the new realities of an MP’s life
2. As the vast majority of MPs no longer have private means or large outside earnings, the overall package they receive must balance the concept of public service with reasonable reward to ensure able people from many walks of life are not deterred from standing for election
3. Each MP will interpret his or her role differently to reflect the different constituency and personal circumstances that help to shape the role; we must not have a system of expenses that constrains those different needs and ways of working
4. I am not entirely convinced that your Committee can do its job properly without also looking at pay and pensions. The combination of these, together with our expenses, will determine the appropriateness of the overall terms and conditions of employment of MPs.


I generally support the tone and content of the “Issues and Questions” document published by the committee. In particular I welcome the “Guiding principles and presumptions” in section 1.10, but, in the light of my third point above, I particularly want to emphasise one of these;

Arrangements should be flexible enough to take account of the diverse working patterns and demands placed upon individual MPs, and should encourage representation from all areas of society, or at least not discourage any individual from becoming an MP.

The hugely varying nature of each MP’s situation is something that must be borne in mind throughout the committee’s work. We cannot and must not be fitted into corporate models of governance and working; I explore this at greater length below.


This leads me to one of my major concerns about the issues the Committee raises. MPs have immensely varied lives and patterns of work and central procurement cannot easily accommodate such variety. On page 4 the Committee asks:

Is there a case for more centralised procurement through the House of Commons authorities? If so in which areas might such procurement take place?

I strongly caution the Committee against this approach which repeats paragraph 19 of Annex A (Wherever practical and economic, such resources should be centrally procured, and subject to occasional audit to ensure propriety and value for money.).

At a practical level, the central procurement of IT equipment for MPs has been wasteful but such central procurement also runs counter to the principle I have highlighted and welcomed above and, I believe, reflects an incomplete understanding of the reality of MPs’ lives.

The committee must hold fast to its guiding principle that “Arrangements should be flexible enough to take account of the diverse working patterns and demands placed upon individual MPs”.


My one major disagreement with the Committee comes in paragraph 3.24:

It is possible to use Staffing Expenditure to employ family members and a number of MPs do so. This would be regarded as a very unusual arrangement in many other walks of life ….

I discuss below the advantages employing a family member, particularly a spouse, brings, but it is simply untrue to say that such arrangements are unusual outside the Commons. MPs’ offices are, in effect, self-contained small businesses dedicated to servicing their constituents. A high proportion of small businesses are husband and wife partnerships. So, far from being “very unusual”, such arrangements are very widespread. I appreciate that, because public money is involved in the case of MPs, special care must be taken to ensure propriety. However, as I will explain below, I am convinced that this entirely normal relationship brings great advantages to the work of MPs and so to their constituents, as well as helping to sustain their family relationships which are put under great strain by an MP’s lifestyle.




The traditional understanding of an MP’s role as a relatively remote national legislator and scrutiniser of government policy on the larger national and international issues has been in retreat for many years. Only a generation ago an MP could make relatively infrequent visits to his or her constituency and still be thought of as a good constituency MP, but no longer. For those MPs with constituencies beyond reasonable commuting distance of London this inevitably means that they need two homes and, probably, two offices to fulfil the legitimate expectations of their constituents.

The factors at work include:

• Increased constituency expectations on both casework and more rapid and detailed responses to policy issues
• A more complex state requiring more regular interventions to protect the vulnerable and victims of maladministration
• Easier access to MPs, first through increased telephone and then fax contact and now the torrent of e-mails
• Increased local promotion of the work of MPs through local radio and television and constituency newsletters
• Websites actively encouraging correspondence with MPs

In many senses the MP is now seen more as a local ombudsman, able and willing to address any issue brought to him or her, even when the issue would have been capable of resolution by intervention with another authority or organisation, very often a local council.

We are seen less as remote representatives reflecting on the great issues of the day and more as the local vicar or CAB volunteer, dealing with the minutiae of peoples’ lives; this may partially explain the resentment about our earnings and expenses – such people normally do their work for little or no reward, but MPs are not only simply dispute resolvers and social workers – we are also required to engage with complex and important national and international issues; indeed this part of our work should probably take a higher priority than is often possible given the other pressures we now face.

Typically our working lives are seven day weeks of 70-80 hours when parliament is sitting, with the weekends busy on constituency and local political work, nearer 40-50 hours in recesses. Our work is generally rewarding and fascinating, but it makes huge demands on us as individuals and so on our families.

Democracy demands that people of sufficient quality seek election as Members of Parliament. The current controversy over our pay and expenses, coming on top of a period of sustained scrutiny of other aspects of our lives, risks deterring adequate numbers of able people from doing so.


If both roles are to be performed well by individuals and by parliament as a whole, MPs must have a wide range of qualities and experience that will not be found in sufficient quantity among the wealthy and the noble few who are prepared to make large financial sacrifices to do the job. Indeed, in a democracy, the system must enable all citizens to stand for elected office. This includes those who must abandon their careers at precisely the period of their potentially highest earnings.

The combination of remuneration and expenses necessarily incurred in fulfilment of an MP’s duties must therefore achieve the following objectives:

• Ensure that the MP can perform his or her duties on behalf of constituents
• Provide proper compensation for earnings forgone among a wide range of individuals of different ages and qualifications, but also
• Recognise the role is vocational and ensure that people are attracted to it out of a desire to serve, not to profit
• Acknowledge that there is little or no career progression for backbenchers who draw the same basic salary for all their time in Parliament with no opportunity for promotion or bonuses as in the private or public sectors – an MP’s starting salary is, in effect, also the final salary, even after thirty years or more service
• Enable all MPs beyond daily commuting distance to live in two places and to travel – with their families if necessary - between them.
• Not add to the huge pressures on marriages and family lives that an MP’s job already creates.

It is vital that MPs are attracted from all walks of life, especially those in the middle of their careers who bring experience of the real world and the energy and commitment to work effectively. Typically these will be professional people who will make real financial and life-style sacrifices to become MPs; if the overall package is too generous it will attract people for the wrong reasons, if too low it will diminish the quality of representation in the Commons.

The current combination of pay, pensions and expenses probably strikes broadly the right compromise; significant sacrifice is normally demanded of an MP entering the House after any professional job; this is right when choosing public service, and the total level of compensation (including the expense for second homes and travel to and from constituencies) is reasonable. Adjustments within the total need to be made to address public concern, but any significant reduction in the total sum would further deter the kind of people needed from becoming MPs.


There is growing, unwelcome and undemocratic pressure on MPs to fit into a single, almost corporate model of working;

• The provision of centrally purchased IT equipment and the systems that run on it was an early example.
• The adoption of a Communications Allowance puts pressure on us to issue annual reports and ever more sophisticated websites.
• The growing use by many MPs of high-profile constituency offices, and the explicit funding for them in the expenses system, creates an expectation we all will.

Some of this pressure probably should not – and indeed, cannot - be resisted. But it must not be encouraged by the expenses system. Take just one example – the most contentious expense – the provision for a second home.

MPs must not be forced into a corporate model of one method of housing provision in London:

– Single MPs have more modest needs more easily met
– some married MPs will want to leave families settled and educated in either London or the constituency, some to move them every week,
– some must make long journeys to and from London, some short ones,
– some have Parliamentary roles that demand them spending many more nights in London than others,
– while others have differing views of the amounts of time they should spend in their constituencies.

The second home essential for those beyond commuting distance of the Commons must therefore be permitted to allow all members of an MPs' family to live there too. For us to seek to make the hours of Parliament more "family friendly" but not to make the housing arrangements equally "family friendly" would be cruel in the extreme. "Family friendly" arrangements that were, in effect, limited to those MPs lucky enough to have private means or constituencies close to the Commons would be unacceptable.

It should not be for the expenses system to determine their decisions on these issues. It should be for individual MPs to determine how best to do their jobs and then be accountable to their constituents for those decisions – and to their families too, for that matter; the price our spouses, partners and children pay for our demanding careers should not be ignored.



I have already explained that the assumption by the Committee in its “Issues and Questions” paper that the employment of wives or husbands by their spouses is in any way unusual is fundamentally mistaken.

I repeat that each MP must conduct his or her life in the appropriate way reflecting their personal, political and constituency circumstances. This includes the employment of spouses. For some it is by far the most practical way to arrange their lives, for others a very desirable way of doing so, while for others it would be singularly inappropriate.

The system must of course be fully transparent – and with the introduction of scale rates for salaries and the need to deposit contracts with the Fees Office, it is very largely so already. The House has voted to employ all staff centrally and I can see this final safeguard might make the arrangements for the employment of spouses even more robust, although some important detailed questions remain to be answered. Before the committee decides to endorse this decision, I hope it will first consult with representatives of staff to ensure they are content with this change.

My account is necessarily personal, as for each MP it will be different. I start, though, with the observation that my wife wanted to return to work, but also needed to because of the large salary drop I took to become an MP. The question was whether she worked with me as part of my life, or was separate from it. Because she had the necessary skills, derived in part from her personality and in part from her training as a journalist, including typing and shorthand, a good telephone manner, a persistence with authority (for casework) and a shared commitment to both my party and my constituents, she was the ideal candidate to become my secretary.

For me, the ability to employ my wife was central to my decision to become an MP and I would seriously consider leaving the House if I were no longer allowed to do so.

First any such prohibition would carry the implication that we have been behaving improperly for the last seventeen years. Second, and more importantly, it would make it almost impossible for me to both serve my constituents as I think appropriate and, if my wife wishes or needs to work (as she does) for us to live together as a couple.

There is no doubt that my constituents feel they receive an excellent service from my office. They know that when they are talking to Mrs Luff (who answers the vast majority of calls to my office) they are talking to someone who speaks with the authority of the MP, they feel their confidences are genuinely secure and her personal and professional commitment to me is communicated in all her dealings with them. I am sure that many other MPs whose spouses do not work for them have devoted and loyal secretaries too, but there can be no question about the devotion of spouses to the work and even reputations of their husbands. In short, because my wife is well qualified for her role as my private secretary and committed to my work as an MP, my constituents rightly feel that their concerns are taken very seriously and dealt with in an effective and sincere way.

I am hugely encouraged by the strong support she enjoys locally. As one constituent wrote to me this month:

One thing that you should be proud of and should defend to the death is any payment that has been made in recognition of Julia's contribution to your effectiveness as an MP.

So I believe my constituents gain. But there is also a personal dimension.

One of the causes of what I believe to be the high levels of divorce and separation in the Commons is that the life we lead, especially where our constituencies are beyond commuting distance of London, is very destructive of relationships.

During the first fourteen years of my life as an MP, my wife worked in Worcestershire; this enabled her to be a good mother to our young children while remaining closely involved in my life as an MP in London. Although for much of the time we lived apart, most days we spoke many times; Julia shared in my life much more fully as a result and we both found this of immense importance and help.

More recently, with the children grown-up, my wife has come to work in London during the Parliamentary session; we have offices in both locations enabling Julia to work in Worcestershire on Fridays, at weekends and in recesses. We return to London on a Sunday evening and go the constituency on a Thursday evening. If my wife, who I repeat both wishes and needs to work, were to work in either London or Worcestershire, we would again have to be separate for many days each year. MPs whose spouses work in other jobs (perhaps except , to an extent, careers such as teaching) cannot have the geographical flexibility that we enjoy and which now enables us to live together most of the time (after fourteen years of separation) and so sustain our relationship.

I know the families of service personnel and travelling salesmen, to take two very different examples, also experience much separation, but the separation experienced by political families continues for their entire Parliamentary career – unless they are able to make the kind of arrangements we have made. And always remember, an MP is on duty 7 days a week; for us weekends are not time off to spend time together to do the chores, but, to a significant extent, a continuation of the working week in a different place.

In summary, I believe MPs who employ their spouses offer their constituents an outstanding service and reinforce their personal family relationships. Our constituents and the taxpayer both gain.


As someone with only nugatory outside earnings I hope I can be objective about this. Transparency is clearly and rightly very important for our constituents, but I believe the rules prior to the vote on 30th April were an adequate protection. I do, though, have some sympathy for the idea that MPs – including ministers -should provide an indication of the amount of time they spend on any paid work in addition to their constituency and Parliamentary duties.

. Some of the objections to restricting outside work include:

• It is important to recognise the strength of the old adage that, if you want a job done, you should give it to a busy person; someone without outside interests could well be less effective as an MP than someone with them.

• Ministers have the most demanding “outside jobs” of all, working hours in addition to their parliamentary and constituency duties far in excess of those worked by any backbench MP on his or her “outside” work, but no one appears to challenge these enormous demands.

• Whatever the more general arguments, single MPs without families can spend the time they would have spent on those families on outside interests without compromising their commitment to Parliament in any way.

• A backbench MP’s financial sacrifice when elected could be mitigated if allowed to continue in outside employment, improving the quality of representation in the House overall; the House and constituents get better quality MPs without having to pay the full price.

• MPs find it increasingly difficult to find work after leaving the House, either voluntarily or involuntarily; remaining in touch with your “old world” during your time in the House should make it easier to find employment when you leave.

The conclusion of the Committee in 1995 quoted in the report remains valid:

The House of Commons would be less effective if all MPs were full-time professional politicians, and MPs should not be prevented from having outside employment.

The decision on outside interests should be left to individual MPs and to the judgement of their constituents. It would be wrong for the House to prescribe their working lives but both it and the electorate have a right to expect full transparency.



Putting it bluntly, having two homes is, for me, a pain, not a perk. I don’t want to have two homes – I’d much rather go back to the same bed every night and not lose two evenings every week travelling between London and Worcestershire. Of course, to be only slightly flippant, we could move Parliament to Birmingham – I would happily commute from Worcestershire and have just one home.

However, the simple facts are:

• The increasing expectations of MPs means we must genuinely live and work in two places – I have two places of work and two offices 130 miles apart and so need two homes.
• For most of us, spending half the year living in a hotel (or even a hostel, as some have suggested) is just not an option conducive to working effectively, and would be both expensive for the taxpayer and impossible for families
• Most MPs on both sides of the House cannot afford two homes out of one salary.

The principle must be that we pay for our main home entirely out of taxed income in the normal way, exactly as our constituents do. The second home should, by some means, be paid for as a legitimate and indeed essential business expense. Living in London is expensive – the current £24,000 limit on our expenditure sounds high to those unused to the cost of the Capital, but it is realistic.

Incidentally, having two homes makes both of them more expensive to run. Because, like many of MPs, I lose two evenings a week travelling to and from my constituency and have work commitments at weekends, I have to pay for gardening and cleaning at my main home (out of my taxed income, of course) – expenses I would not have if we were both living at one address permanently. Also, the visits from cleaners and the gardener act as a valuable level of security and protection for an otherwise empty property.

Alternative mechanisms that would both meet the various principles set down by the Committee and the practical realities of MPs’ lives are elusive.

A per diem solution would incentivise particular behaviour and discriminate against those who give a higher priority to activity in the constituency or, for example, to those who participate in schemes like the Armed Force Parliamentary Scheme. And if we vote for shorter recesses, instead of being praised for our diligence, we will be attacked for wishing to increase our incomes!

I also reject the idea of a hostel for MPs or the provision of blocks of flats – such ideas fail the vital test of flexibility your committee rightly sets out, would discriminate against MPs with families and would probably involve significant and unacceptable capital cost.

By far the best solution – but the most politically challenging in the short term – is simply to pay all MPs a higher salary and abolish the expense for a second home entirely. Any such increase should not be pensionable, but it would be taxable. An increase on basic salary of £30,000 would attract tax of around £12,000 and so cost £18,000 net – significantly less than the current maximum and, I believe, less than the current average claim. It would offer complete flexibility to MPs to establish a pattern of working appropriate to their individual needs and constituencies while also massively reducing the bureaucracy for administering claims with further significant cash saving. It is a proposal steadily gaining support among the more thoughtful commentators and I strongly commend such a course to the Committee.

Alternatively, detailed discussion could be had with HMRC about a lower basic salary increase than I suggest above and a new system of tax allowances for expenses wholly, necessarily and exclusively incurred on second homes in connection with our Parliamentary duties. This may appeal to electors who express a desire to see greater involvement by HMRC in our affairs, but I am not qualified to examine the complexities of this alternative suggestion.

If this optimum solution does not commend itself to the Committee, my alternative recommendation is both to reduce the total sum payable under Personal Additional Accommodation Expenditure and to restrict the claimable part of our expenses for a second home to the basics – mortgage interest, rent or hotel bills, subsistence, service charges, council tax, utility bills, cleaning, repairs and maintenance. However, it is also challenging for MPs who are already paying for the costs of one home out of taxed income also to pay for all those other essential items, (e.g. furniture, personal items, televisions, white goods, carpeting etc) in their second home. The public are clearly angered by some of the claims that have been made in respect of these general items under the past system, so I suspect the only answer is to award a modest increase in basic salary to pay for these items. I suggest of the current £24,000 of, £20,000 could be on the specific claimable items I have identified under the current tax arrangements and £4,000 – fully taxable – could be added to salary.

Both solutions have three advantages. They:
• meet your Committee’s principles
• simplify the system and
• reduce its overall cost, both in sums dispersed and in administration.


I understand the superficial political attraction of ending the ability of MPs to claim mortgage interest. However, apart from the practical implications of requiring MPs to terminate straightforward arrangements entered into in good faith, there are other questions.

First, and I speak from personal experience, it must be emphasised that it can be difficult for MPs without private means to obtain mortgages in the first place because
• a deposit is generally required and
• mortgage companies are often reluctant to permit second mortgagees to MPs.
Indeed I rented for the first eight or nine years after my election because I could not find a mortgage; had I purchased a flat when elected in 1992, the taxpayer would now be substantially better off as I explain next.

Second, if you purchased a property some years ago, the mortgage interest claimed is significantly lower than the rental that would now be for a similar property – in my case a modest flat. As long as appropriate safeguards against what has become known as “flipping” of addresses are in place, the taxpayer normally saves money as a result of decisions by MPs to buy, not rent.

Third, I do not think it is appreciated that the repayment of the capital cost is, and must rightly remain, the responsibility of the MP; no aspect of that can or should be claimed from the taxpayer.

Fourth, it is of course true that MPs can eventually make a profit on the capital, but MPs elected in 2005 who purchased a property and lose at the next election will prove there is also risk attached to the property market. (In equity, any requirement for MPs to pay back any gains would have to be accompanied by a totally unacceptable provision that the taxpayer should also make good any losses.)

Fifth, of course MPs must pay Capital Gains Tax on any gain made on a second home. However, there appears to be a need for the Fees Office to provide clearer guidance on the definition of main and second homes and for HMRC to re-examine the rules on capital gains tax - but my understanding has always been that CGT was due on my second home as defined by them and irrespective of where the rules of the Fees Office obliged me to claim my housing expenditure.

Sixth, although the superficial political attractions of a populist move to ban MPs from taking the profit from their second homes are obvious, the intellectual logic would drive to a conclusion that no one should make profit from the use of taxpayers’ money – including the landlords who own the flats we would rent and the hotel chains whose rooms we occupy.

With appropriate safeguards against what has become known as “flipping” homes and clarification of both the criteria to be used when defining main and second homes and of the capital gains tax treatment, the ability to claim mortgage interest actually offers taxpayers a better deal than renting and should be allowed to continue.


I believe the introduction of the Communications Allowance was a serious error.
It is probably necessary for an MP to promote his or her surgeries (for this purpose I advertise extensively in parish magazines, on parish council notice boards and in libraries) to maintain a modest website and possibly to communicate in a non-partisan way with first-time voters. These are items that could be accommodated within the general allowance for the costs of running offices – but we are now obliged to claim such items using the Communications Allowance.

The fact that MPs are now funded to such a high level that they can produce and distribute Annual Reports (as I now do) means that a kind of arms race has developed and that we all feel under an obligation to join in. (The reasonable requirement of the Fees Office that we should take pains to distribute any such report to as many of our constituents as possible means that distribution costs in rural areas such as mine are very high and much cheaper in urban areas – here is another example of the need for flexibility.)

I would welcome the abolition of this allowance and its replacement with either a rule
• prohibiting the production and distribution of material at public expense
• or one which recognised that both maintaining a constituency office and producing reports reinforce incumbency and that, therefore, MPs should be resourced to do either one or the other, but not both.

I therefore advocate strongly the abolition of this allowance, but there will be consequences for the rules governing Administrative and Office Expenditure.


This aspect of our system works well (apart from issues relating to the Communications Allowance) and I propose no change.
I do, however, query the meaning of this observation by the Committee:

The Committee is interested in views and evidence on what other office and administrative support is required, on how should it provided and on whether there should be an abatement of any expenses limit where an MP's home is used as an office.

There are already, rightly, major constraints on claiming the costs of using an office at home; as it is, no element of rent, mortgage or council tax may be claimed. This means that there is a kind of subsidy to office costs paid by MPs who, like me, have an office at home. I make no complaint about this and believe the rules are appropriate as they stand. They guarantee an MP can not profit from them personally and that is as it should be.


MPs have to travel more than most people. Our travel patterns depend upon our constituencies, and I feel able only to comment on the needs of MPs like me who represent larger rural areas beyond a daily commuting journey. We need to:

• Travel between our two homes/places of work, often with members of our family
• Undertake occasional other journeys in the course of our Parliamentary or constituency duties
• Travel around our constituencies by car to do our work and
• Commute between our London home and the Commons.

I believe that we should pay for the last of these – the daily commute – but that the other three are the kind of journeys any other private or public sector employee would be recompensed by his or her employer for undertaking.

The current arrangements work well although by my calculation the mileage allowance is now too low to cover the full costs of motoring; most MPs need a second car to perform their duties and therefore subsidise the cost of their motoring. However this is an argument about the rates set down by HMRC for tax purposes (the rate rightly used by the Commons) and affects many more people other than MPs.

I am concerned that the allowance for travel by family members is modest if public transport has to be used, but in practice most MPs who choose to live with their families in two places can travel by car. I would make no change to the arrangements.

I do not understand the reference to “family friendly” hours (paragraph 3.37) which - in as much as they exist at all – seem to me to be an irrelevance in this context.


An MP’s life is often precarious; unless you are lucky enough to have what is described as a “safe seat” you run the risk of losing your job roughly every four years – and even “safe seats” are looking more precarious these days. Given how very difficult it is now for MPs (other than former senior ministers) to find new jobs after leaving the Commons, some form of resettlement arrangement seems entirely proper.

Similarly, if we wish younger MPs to consider retirement and return to the “real world” rather than keeping on in Parliament until retiring age, some kind of resettlement arrangement seems appropriate.

Beyond these general principles I make no comment of detail.


I am deeply concerned about the arbitrary nature of the disciplinary processes now in place for any breach of the roles and by the ponderously slow pace of the necessarily painstaking investigations into any allegations made against MPs.

I hope that clearer, simpler rules on our expenses will emerge from your committee’s work and that MPs accused of wrongdoing will have their names cleared or the complaint upheld much more quickly in the future.


It is almost impossible for anyone who has not been an MP to imagine what the work involves; its variety and challenges, while being a major part of the attraction of the role, make for a heavy work load. The committee must be confident it has fully understood the extent and character of our work before proposing any radical changes to the regime. In summary, I believe:

• Attracting MPs of sufficiently high calibre and ensuring that our constituents get the service they have a right to expect means that the total cost of Parliament can be reduced only modestly through reform of the expense system;
• Larger savings can only be made by reducing the number of MPs or radically redefining their role.
• Whatever system is recommended by your committee it must recognise the need for great flexibility by individual MPs in the interest of their constituents and, not unimportantly, the families of MPs as well.

Reform of the expenses regime for MPs has become an essential building block in the vital task of restoring faith in our parliamentary democracy. My colleagues in the Commons should commit in principle to accepting your recommendations and to being prepared to overturn any recent decisions the Commons may have made if necessary. Only in the unlikely event that it becomes apparent that your committee has seriously misunderstood some part of an MP’s curious and demanding life should we reject your timely and much needed independent advice.

Peter Luff MP (Mid Worcestershire), 19th May 2009

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