MPs hope to stop details of their expense claims being made public by changing the system so that they do not have to submit receipts.

Days after the High Court ordered the publication of every receipt submitted by MPs, a committee reviewing parliamentary expenses is proposing that they should be able to claim the full £23,000 second-home allowance automatically as an annual “block grant”.

This would end the principle whereby MPs are compensated only for “costs incurred” and give nearly 250 MPs who claim less than £23,000 a substantial tax-free income boost.

MPs are also preparing to reopen the battle over salaries, arguing that it is unfair that they are paid £10,000 less than head teachers and £40,000 less than equivalent roles in the private sector. A report on parliamentary pay commissioned by Gordon Brown should be submitted by the end of next month. Senior MPs on the House of Commons Commission have recommended a salary rise from £61,820 now to about £75,000 after the next general election, expected in 2010.

Both issues are likely to prove awkward for the Prime Minister since the public would react with anger to an above-inflation rise for MPs after the 10p tax debacle. But Mr Brown does not want to provoke further confrontation with his backbenchers before the vote on 42 days detention without trial, and a looming rebellion on car taxes.

The proposals from the Speaker’s committee come after it promised to consider “radical options” for creating “a robust and transparent process for claiming allowances and auditing them”. MPs have faced huge embarrassment over the second-home allowance after it emerged that they were claiming for plasma televisions, air-conditioning, window clearning and removing moss from the garden.

Although MPs will have four options on which to vote, the “block grant” proposal that would remove the need for receipts is emerging as the committee’s favourite. MPs will also be able to vote for a daily allowance of £175, although there are fears that this will generate adverse publicity if they claim the money while away from Westminster.

A third option is to add money to salaries, though many Labour MPs say that this would be difficult to justify to constituents. The final option is to keep the current system.

MPs will vote on the options in July.

A source close to the deliberations said: “Receipted reimbursement is used almost universally for short-term and ad hoc work away from home overnight. For longer-term or more regular work, a daily rate is the norm. If it’s going to extend for more than two years, the norm is a lump sum.”

Discussions are continuing over what to do about London MPs, who cannot claim the allowance if they live in inner London but can if they live outside and within reasonable commuting distance of Parliament.

The proposals include a tougher system of audit and a tightening of rules surrounding the communication allowance to prevent it being used for political purposes.

The changes are likely to run into trouble with the Committee on Standards in Public Life, which said: “The system for claiming costs incurred by Members of Parliament should be based on the reimbursement of actual expenses, not on entitlement to ‘allowances’. Members of Parliament should be as open and transparent as possible about their expenditure and the claims they make on public funds.”

What they get now

— Annual salary £61,820
— Second-home allowance £23,083 (maximum)
— Travel 40p per mile for up to 10,000 miles; 25p after that
— Pension 1/40th of salary
— Resettlement grant up to 100 per cent of final salary, with first £30,000 tax free

Source: House of Commons

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