Sir Thomas Legg may have exceeded his brief and injected a controversial retrospectivity into his findings, but he has done so in an odd way that misses the key point. If a limit can be placed retrospectively on payments for cleaning and gardening on grounds of what he calls ‘overriding principles’ of reasonableness and proportionality, it is very strange that he has not sought to impose a similar reasonable and proportional limit on the vastly bigger and more important issue of mortgage payments. Where some MPs like Cameron and Osborne have used almost all of their £24,000 annual additional costs allowance to pay the mortgage interest (or part of the mortgage interest), it suggests that the value of their second home is half a million pounds or more – rather in excess one would have thought of what Sir Thomas would consider was strictly necessary for a pied-a-terre for occasional nights in one’s constituency. He seems oddly to be focussed on the mote whilst missing the beam in his eye. But that’s not the only, or even the most significant, misreading of the issues in the Legg report. Extraordinarily he has omitted two others.

One is the ‘flipping’ of home designations – switching between properties as to which is the main home and which is the second home so as to maximize financial gain. This was done several times over the course of 3-4 years (and even in a few cases within a single year) by several MPs, including a significant number on both Front Benches. This is is infinitely more serious than gardening or cleaning claims not only because of the size of the personal gains accrued – running into several tens of thousands of pounds in many cases – but also because of the deliberate artifice involved aimed at maximizing personal profit at public expense. Many people would consider this tantamount to fraud or embezzlement on a substantial scale. So why hasn’t Legg got this in perspective and focused big time on what is a far more serious offence? If the argument is that this was a practice allowed by the Fees Office at the time, that hasn’t stopped him imposing retrospective limits on far smaller gardening and cleaning claims on grounds of what is reasonable and appropriate, so why not over ‘flipping’ homes where it really matters?
Second, he has also turned a blind eye to another form of personal enrichment for which there can be no justification. When an MP buys a second home in the constituency with an interest-only mortgage, the taxpayer pays the interest, but when in due course the MP sells the property, the capital gain (which can be very considerable) accrues as an uncovenanted benefit to the MP. What Legg should be laying down is that if the MP takes out a repayment mortgage and pays the capital element of this himself, then he is entitled to the capital gain according to how much of the capital has been paid off. But if, as is the case in the vast majority of second homes, it is simply an interest-only mortgage, then the capital gain at the sale should revert to the party that paid the interest on the loan up to that point, i.e. the State.

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