Backbench expenses rebellion gathers pace

Gordon Brown was accused of cowardice by a Labour MP over his handling of the expenses controversy yesterday as the backbench rebellion over-repayment demands deepened.

Ministers admitted that the Prime Minister had become the focus of backbench discontent after he urged MPs to accept the repayment demands of Sir Thomas Legg, the independent auditor combing through their past five years' claims.

MPs warned that the revolt would become even bigger if they are sent backdated tax bills by HM Revenue and Customs, which is investigating whether furniture and fittings bought under the "second homes" allowances should be regarded as a taxable benefit. "That would mean hitting us twice – one repayment for Legg, another for the tax man," one Labour MP said.

Sir Paul Stephenson, the Metropolitan Police Commissioner, said yesterday that only a "handful" of MPs were currently under police investigation, but that the number could "change significantly at any time" as inquiries flush out more suspicious claims.

Asked when files of evidence might be passed to prosecutors, Sir Paul said: "We will do it as soon as possible."

Up to five Labour MPs have reportedly threatened to stand down and provoke by-elections if they are ordered to refund expenses claims to Parliament. Although Labour whips played down the prospect last night, the threat will worry the Government.

The five are said to be among those MPs who have already decided to quit the Commons at the general election, so they will be able to defy pressure from the whips. When Ian Gibson stood down after being barred as a general election candidate over his expenses claims, Labour lost the resulting by-election in his Norwich North constituency.

Brown allies said the Prime Minister was trying to bring "closure" to the expenses controversy. They said the public would not understand resistance to the paybacks ordered by the Legg review.

But Barry Sheerman, Labour chairman of the Children's, Schools and Families Select Committee, branded Mr Brown "cowardly" over his response to the crisis and complained that innocent MPs were being "thrown out of the lifeboat".

He confirmed he was considering running as a "Brown must go" candidate against Tony Lloyd, a Brown loyalist whose post as chairman of the Parliamentary Labour Party comes up for re-election next month. He said someone needed to "look the leadership of the party in the eye and say, 'This isn't good enough.'"

Ed Balls, the Schools Secretary, accused Mr Sheerman of "playing politics" after the MP branded him a "bit of a bully" for vetoing the select committee's recommendation on the choice of a new Children's Commissioner for England. Mr Balls appointed Maggie Atkinson, director of children's services in Gateshead, to the post even though the committee declared her unsuitable for it.

Mr Sheerman said she was "very competent" but added: "We just didn't think she had the independence of mind to stand up to a secretary of state who loves to get his own way."

Mr Balls told the Commons the integrity of the "independent and highly respected" Ms Atkinson was being "impugned" and the post of children's commissioner was being undermined. He added: "I've accepted the unanimous recommendation of an independent selection process, which said she would be the best champion of children and young people in this country. She will be no patsy at all."

An uncivil law? Why MPs must pay up

*Frank Field's comparison between an MP who faces a retrospective charge for over-claiming on parliamentary expenses and a speeding motorist is, on the face of it, a good one. The MP for Birkenhead has likened Sir Thomas Legg's application of the rules on expenses to the scenario of a motorist who drives at 25mph in a 30mph limit then five years later, once the speed limit has been changed to 20mph, discovers that he is going to be fined under a back-dated law on speeding.

Retrospective legislation is very rare as it offends the notion of natural justice. It tends to be reserved for war criminals and murderers. But Sir Thomas's interpretations of the rules are not akin to a retrospective change in the criminal law. They are more comparable to the closing of tax loopholes or windfall charges on corporations that benefited from the unintended consequences of legislation. In these areas of the civil law retrospective reform is much more common. For the most serious allegations against MPs the criminal law in play is fraud and the police and Crown Prosecution Service are not seeking a retrospective change upon which to bring prosecutions.

Robert Verkaik