LORD TRUSCOTT, one of four peers named in the “lords for hire” scandal, has taken at least £70,000 in allowances for overnight accommodation in London while staying at his home in the capital.

Truscott, 49, now receives £28,000-a-year tax free by telling House of Lords’ authorities that his main residence is a modest flat in Bath, Somerset.

He uses the allowance to maintain a £700,000 flat he owns in Mayfair, central London, with his Russian wife, Svetlana. He bought the property in Bath months after becoming eligible to claim the allowance.

Lord Paul of Marylebone, the billionaire steel magnate and Labour donor who is nondomiciled, is one of a number of other peers who take advantage of the perk.

Truscott was elevated to the peerage in June 2004. At the time he lived in a £950,000 flat in Westminster, which made him ineligible for the House of Lords’ overnight subsistence allowance. Four months later he paid £156,500 for a small flat in Bath, which he then claimed was his main residence.

In December 2006 he sold his Westminster flat and bought a flat in Mayfair a year later. In the four years up to April 2008 he claimed £100,645, of which £72,000 was in the years he owned his properties in Westminster and Mayfair.

The overnight subsistence allowance is designed to help those whose main residence is outside London and who have to pay for accommodation when they are in the capital.

Neither of the peers has broken any rules. They are entitled to use the allowance to cover mortgage payments, utility bills and other overheads. Both Truscott and Paul have mortgages on their properties.

However, Norman Baker, the Liberal Democrat MP, said: “The allowance system is set up to recompense MPs and peers for expense that has been incurred, no more, no less. It is not an opportunity to develop an income stream and increase one’s bank balance.”

Lord Paul, the Indian-born tycoon who promised to bank-roll Labour’s election campaign, has owned a penthouse apartment in Mayfair since 1984. In August 2006, however, he and his wife bought a £6.5m Georgian mansion on the edge of the Chilterns and not far from Chequers, the prime minister’s rural retreat.

Despite still owning the Mayfair penthouse, he now claims nearly £28,000 for the cost of accommodation in London. He said: “Beaconsfield is my main home. In the end you want to retire, you want to buy a house, you want to have your children and grandchildren come there.

“You can’t do that in your own flat. You don’t go and buy a big house in the country just for these expenses. They wouldn’t even meet the costs of looking after my place.”

The Sunday Times revealed two weeks ago that lords were prepared to help undercover reporters posing as lobbyists change legislation in return for consultancy fees of between £24,000 and £120,000.

The House of Lords subcommittee on peers’ interests is now studying our taped conversations with four peers: Lord Taylor of Blackburn, a former education adviser to Downing Street, Lord Snape, a former whip, and former ministers Lord Truscott and Lord Moonie.

Insight: Steven Swinford, Jon Ungoed-Thomas, Claire Newell, Jonathan Calvert

Reform chief under investigation

ABOUT a dozen peers – including the four named in the lords for hire scandal – are under investigation by the House of Lords for alleged breaches of parliamentary rules.

One of the peers under investigation is Lord Cunningham, who chaired a committee on House of Lords reform. He provided advice to the City of London Corporation, but did not disclose it in his register of interests.

He also provided strategic advice for it on the Crossrail Bill and tried to arrange ministerial meetings, but in the latest register still declares it as a “nonparliamentary” consultancy.

Cunningham did not respond to messages left at his House of Lords office.

Smith claims allowance lodging with sister

JACQUI SMITH, the home secretary, has claimed more than £116,000 in Commons expenses for a “second home” while effectively lodging with her sister, writes Jonathan Oliver.

Smith claims the maximum second-home allowance of £24,006 a year on her £300,000 house in her Midlands constituency where her husband and two young children live. She has told the Commons authorities that her principal residence is a house in London owned by her sister Sara, where she stays some weekdays.

Smith is not breaking rules on expenses, which allow MPs to decide which property is their “main home”. But opposition politicians said Commons allowances needed to be reviewed.

“It seems extraordinarily bad value for the taxpayer,” said Norman Baker, the Liberal Democrat MP.

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