MPs may keep homes allowances

The chairman of the Independent Parliamentary Standards Authority (Ipsa), Sir Ian Kennedy, said he was determined to make a "clear and clean break with the past".

However, a consultation document published yesterday by the authority included significant differences from the blueprint for reform drawn up by the chairman of the Committee of Standards in Public Life, Sir Christopher Kelly.

The Ipsa recommendations open up the possibility that MPs living just outside London would still be able to claim.

MPs would vote on whether the Treasury should be able to recover any profits they make on the sale of homes they bought with taxpayer-funded mortgages.

The consultation document also potentially reopens the issue of whether MPs should be able to employ members of their own families – a practice the Kelly report said should be banned.

Sir Ian's paper does back some of Sir Christopher's main recommendations, including a ban on MPs claiming mortgage interest payments on second homes. In future, they would have to rent.

It also goes further on the issue of MPs' resettlement allowances when they leave Parliament, which the Kelly report recommended should be cut back, suggesting that they could be scrapped altogether.

On the contentious issue of profits made on the sale of taxpayer-funded second homes, the paper said that it was for "Parliament to decide" whether to take action to enable them to be recovered for the taxpayer. Sir Ian insisted that he remained strongly committed to the principle that the money should be paid back, although he acknowledged that his paper could be seen as a weakening of the Kelly report proposals.

"These are interpretations that some might seek to put out. I don't recognise the notion that we were watering down on capital gains," he said.

He said Ipsa was committed to the principle that "no one should use public money for private gain".

But he said they needed to ensure that the Treasury had the powers to recover the money for the public purse.

The Kelly report also recommended that MPs with constituencies "within a reasonable commuting distance of Parliament" should not be able to claim for second homes. Currently only those in inner London are barred.

The Ipsa paper said MPs should still be eligible if they had a seat outside London Transport zones one to six, which would enable those in the Home Counties and on the outskirts of the capital to carry on claiming.

Although Ipsa broadly backs the Kelly report's recommendation that MPs should not be able to employ family members with public funds because of the potential for abuse, it said it was prepared to reconsider the issue.

The paper said they had heard "very strong views" expressed that in practice family members might be the best qualified applicants for the posts.

"On that basis, we feel it is right to allow an opportunity to hear considered views on whether prohibiting the employment of family members is necessary and proportionate," it said.