Minister faces inquiry into second home cash claims

MPs from across the political divide last night joined the backlash against London colleagues and called for a ban on claiming expenses of up to £24,000 a year for a second home when living just a few miles from Westminster.

Sweeping reforms to their pay and allowances are now anticipated by many MPs after it was revealed that the Employment minister, Tony McNulty, had claimed £60,000 for staying at his parents' home in his Harrow constituency, 11 miles from the Commons.

Westminster's independent sleaze watchdog has confirmed it will launch an inquiry into the use of expenses, which could see the system scrapped in favour of a pay increase for MPs. Gordon Brown has also written to Sir Christopher Kelly, chairman of the Committee on Standards in Public Life, asking for his inquiry to examine whether MPs should be allowed to hold second jobs.

Since the 1970s MPs' pay has been held down to avoid public criticism and they have been encouraged – they say – to use their generous allowances. But many MPs now believe that anger over expenses means they should "bite the bullet" and opt for a one-off pay hike and a more transparent expenses system.

While MPs representing 25 inner London constituencies are barred from claiming the Additional Costs Allowance (ACA) – designed to help cover the costs of staying away from home on parliamentary business – those commuting to Westminster from 49 outer London seats can claim it. In 2006-07, the last year for which figures are available, 23 outer London MPs claimed the allowance.

Vince Cable, the Liberal Democrat Treasury spokesman whose Twickenham constituency is in outer London, said there was "no justification" for colleagues living in London to claim the ACA. "It's perfectly feasible to commute by train, as I do, and since almost invariably parliamentary business finishes before 11pm, it is always possible to take the last train home," he said. "I certainly do not think there is any justification for the ACA in outer London given the current parliamentary hours."

His plea was supported by John McDonnell, the Labour MP for Hayes and Harlington."Most of my constituents will either work locally or commute into London," he said. "They would be gobsmacked if I claimed for a second home in Westminster. Claiming the second home allowance might have been justified in the age of the horse, but there is no justification now." Lee Scott, the Tory MP for Ilford North who does not claim the allowance, said: "I made the decision to come home every evening, and that is what I do." A rule change "should be looked at," he added.

The Parliamentary Standards Commissioner, John Lyon, has been asked to investigate Mr McNulty's use of the expenses system after receiving a formal complaint from the Tory MP Greg Hands. Mr McNulty maintains he has not broken any rules and stopped claiming the allowance in January.

The Committee on Standards in Public Life investigation will begin before the end of the year. Sir Christopher said reforms in the allowances regime were needed to restore public confidence. The committee's former chairman, Sir Alistair Graham, said a new system needed to be overseen by an independent group, but added that introducing a pay increase for MPs would be politically difficult during a recession.

"We have got to the problems we have because MPs have determined their own allowances," he said. "It is not a good time to be thinking about a big pay increase [for MPs] when unemployment is rising fast and MPs are seen as having very generous pensions that the rest of us can only dream of."

Second homes: Biggest-claiming London MPs (Claims since 2002)

Harry Cohen (Labour) Leyton & Wanstead £104,701

Andrew Rosindell (Tory) Romford £104,699

Derek Conway Old Bexley & Sidcup* £104,651

Mike Gapes (Labour) Ilford South £104,650

Jon Cruddas (Labour) Dagenham £103,117

Richard Ottoway (Tory) Croydon South £101,808

Andrew Love (Labour) Edmonton £100,303

Joan Ryan (Labour) Enfield North £95,932

Jacqui Lait (Tory) Beckenham .£93,469

John Austin (Labour) Erith & Thamesmead £87,328

Alan Keen (Labour) Feltham & Heston £87,325

Ann Keen (Labour) Brentford & Isleworth £87,325

Barry Gardner (Labour) Brent North £86,687

Angela Watkinson (Tory) Upminster £82,886

Gareth Thomas (Labour) Harrow West £79,579

Tony McNulty (Labour) Harrow East £52,598

Andrew Dismore (Labour) Hendon £42,967

Dawn Butler (Labour) Brent South £37,245

John Horam (Tory) Orpington £34,583

Rudi Vis (Labour) Finchley & Golders Green £32,211

* Independent since losing Tory Whip over expenses paid to his family