ROOF Blog

MPs would be banned from receiving taxpayers’ money to pay the mortgage interest on their second homes, under proposals to be published next week.

Sir Christopher Kelly, the chairman of the Committee on Standards in Public Life, has briefed opposition party leaders about his report, which says that in future MPs will have to rent, not buy, their second home if they wish to receive taxpayer support.

Kelly is also to make it more difficult for MPs living in the south-east to claim for a second home, so more of them will have to commute to and from parliament.

It is possible he will rule that MPs living within a 60-minute commuting radius will not be able to claim for a second home, joining the small group of London MPs that are already banned from receiving a second home allowance.

Previously MPs could claim as much as £24,000 a year in mortgage interest payments on their second home, often allowing them to live in homes which were much larger than they required.

Which? magazine has called for the Financial Services Authority to ‘name and shame’ lenders charging customers with exorbitant mortgage arrears charges. Which? wants the list submitted to judges hearing repossession cases and the culprits fined, with the revenue going to help borrowers access independent debt advice, and it has submitted a Freedom of Information request asking for the names of the lenders. It also wants lenders to provide an itemised breakdown of additional costs, the suspension of arrears charges where consumers have made agreements to pay off the debt, and a review of charges by the FSA.

The rising cost of fuel, food and public transport has hit the poor hardest. The Joseph Rowntree Foundation calculates that the cost of living for those on a minimum household budget is rising faster than inflation. The costs for a single household on a low-income budget were up 5.3 per cent this year, followed by 5 per cent up for pensioners and couples with children.

Squatters have taken over the home of married Labour MPs Ann and Alan Keen, who have recently come under fire for claiming hundreds of thousands of pounds in expenses on a second home located a few miles away. The squatters said they moved in after a neighbour said the house had been empty for more than a year, and say they have the support of local residents. The BBC say they have obtained a letter from the local council telling the couple that ‘urgent action’ is required from them to explain why their main house is unoccupied.

Borrowers with tracker or variable rate mortgages have benefited from a 17 per cent fall in the cost of owning a home in the past year. However, everyone else including tenants and those on fixed rate deals, have faced an increase of 4.5 per cent in the cost of household expenses. Energy costs rose by 13 per cent, water by 5 per cent, council tax and domestic rates by 3 per cent and the cost of repair work by 5 per cent, but for borrowers whose mortgage repayments have fallen these increases have not be enough to offset the 47 per cent they saved on interest repayments, the average mortgage rate falling to 3.62 per cent in April this year, from 5.8 per cent at the same time last year.

Ahead of today’s debate in the Commons, party leaders have agreed to proposals for interim changes to MPs’ expenses. Mortgage interest and rent claims will be capped at £1,250 a month, claims for furniture, cleaning and stamp duty will be banned, and they will not be allowed to flip the designation of their second home. An independent review of allowances is expected by autumn.

There are growing calls for an investigation into some of the MPs’ expenses claims. The Taxpayers’ Alliance and Daily Mail newspaper are said to have joined forces to raise money to fund a private criminal prosecution if police do not act into the alleged misuse of parliamentary funds. Scotland Yard has said they have received and are ‘currently considering’ a number of complaints in relation to the expenses.

MPs representing seats in outer London will be stopped from claiming the full £24,000 second home allowance from next year and all claims, no matter how small, will have to be supported by receipts, MPs voted in a Commons debate last night. Parliamentarians will also have to declare details of their earnings from second jobs and how much time they work on these jobs, and will no longer be responsible for employing staff directly. The changes are interim reforms pending a report from the chairman of the committee on standards in public life, Sir Christopher Kelly.