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From The Sunday Times

August 2, 2009

MPs’ easy way to net £300,000 via petty cash

Marie Woolf

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John Bercow

Sixty MPs received almost £300,000 in expenses transferred directly to banks each month without having to submit a single receipt.

In a previously unknown arrangement, the MPs received up to £12,000 each over four years in “no questions asked” petty cash payments from the House of Commons authorities.

The MPs, including John Bercow, the new Speaker, arranged for a fixed amount of up to £250 to be paid to them every month for up to four years, without having to say how it would be spent.

Bercow, who chairs the Commons committee that oversees expenses policy, had £4,800 in cash wired to him between 2004 and 2008, which he spent on “hospitality”.

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• MPs petty cash claims paid by direct debit 2004-08

Richard Caborn, the former Labour sports minister, had £12,000 paid directly from the Commons over the four-year period. He said he used his £250-a-month petty cash mainly to buy drinks for guests visiting him in the Commons.

“Meeting constituents and people from voluntary organisations is part of my parliamentary work and I need to be able to offer them drinks, mainly coffees and teas. I will justify every penny of that as a good investment,” he said.

Until April last year, MPs were allowed to claim £250 petty cash each month without submitting receipts. Few MPs claimed the maximum amount and most put in smaller claims through their main expenses forms, with many providing receipts.

Sixty MPs, however, asked the Commons authorities to wire a set amount of cash to them or their offices each month. Between 2004 and April 2008 they received £288,727 between them.

The arrangements would have remained secret were it not for a request made by The Sunday Times under the Freedom of Information Act.

Ministers, who are paid at least £96,000 a year in salary, were among the recipients of the highest payments.

Wayne David, the Wales minister, claimed £12,000 between 2004 and 2008. The money was used for “running costs of his constituency office”, he said.

Des Browne, the former defence secretary, claimed £12,000 by this method while he was a minister. Paul Goggins, the Northern Ireland minister, received £9,600; Jack Straw, the justice secretary, £2,000; and Pat McFadden, the business minister, £5,800.

A spokesman for McFadden said the money was used solely for his office, including buying a computer and broadband access. “There was no personal gain,” he said.

Sadiq Khan, the transport minister, received payments of £7,750. He said the money was used by “a number of offices” that he runs.

“It’s for teas/coffees and the administration side of the offices. We also have interns as well who have expenses, like the Tube and Oyster cards,” he said.

Yesterday the Speaker said the practice of wiring taxpayers’ money to MPs with no receipts was inappropriate and should be stopped.

In his case, Bercow said, “the money was used solely for the provision of tea, coffees, soft drinks etc within the Palace of Westminster for individuals or groups who came to petition me on some aspect of public policy. If my guests were constituents or friends I always paid directly out of pocket.

“Although the arrangement was simple and convenient I recognise that the climate of opinion has changed and, as Speaker, hold the view that claims without receipts should not longer occur.”

Jeremy Browne, the frontbench Liberal Democrat MP, received £7,250 and said it was used for office materials.

“None of the petty cash has been paid into my personal account,” he said. “My office has an entirely separate account and the money is spent on routine but essential small items that make the office function effectively. The fact that I’ve claimed that amount doesn’t mean I have spent that amount,” he said.

The payments were condemned by the TaxPayers’ Alliance, a pressure group that monitors public spending. It said whole families were living off less in a month than some MPs claimed as petty cash.

“The amount of money being claimed as petty cash is astounding. This practice is completely unacceptable. The public want to see complete transparency,” said Matthew Elliott, its chief executive.

The practice of setting up direct payment systems was encouraged by the Commons authorities, who have been sharply criticised for failing to control expenses spending by MPs. Last April the £250 petty cash limit was reduced to £50 per month. All items over £25 have to be claimed for with receipts.