The expenses reforms announced by the Speaker are pretty tough. MPs would have saved themselves a lot of trouble by unveiling them a few weeks ago. No more furniture claims, tax dodges, gardening, decorations or televisions. The future for expenses muckrakers looks bleak. But what about past claims? Surely some reforms should be applied retrospectively?
Take capital gains tax. MPs selling a property will have to be “completely open” with the tax authorities from now on. No more telling the tax man one thing and the Commons fees office another. Here are the new rules:
Members selling any property must be completely open with the tax authorities about whether they have claimed additional costs allowance on that property as a second home and are liable for capital gains tax.
Members should make a declaration in respect of any property on which they claim for expenditure that it is not—and will never be—their main residence for capital gains tax purposes. Whether such a declaration has been made will be made public.
Fine. But if this is necessary in future, why not address bad practice in the past? Uncovering dubious claims for furniture or fittings is relatively hard; there is only a patchy record of conversations with the fees office. But capital gains is easy. We know what tax MPs paid on property transactions and we know whether they classified the property as a “second home” for expenses.
Sure, some MPs would fund it hard to pay up (although Hazel Blears found the £13,000 pretty fast). But collective repentance on capital gains could be enforced with a degree of equity.
This issue of “just punishment” is causing a lot of grief for the party leaders. Gordon Brown effectively sacked Blears on Tuesday by convicting her of “totally unacceptable behaviour”. But what basis is this on? Where do you stop? She did not break the rules. Other cabinet ministers and dozens of MPs failed to pay capital gains on their expenses “second home”. Blears even paid the money back.
If Brown decides to cast her from the cabinet, he will need a good explanation for why other ministers are in the clear.