Hospitality could save taxpayers millions if hotels replaced MPs' second-home allowances

20 May 2009 by
Hospitality could save taxpayers millions if hotels replaced MPs' second-home allowances

The hospitality industry has called on the Government to save taxpayers millions of pounds each year by switching MPs' second-home allowances to hotel stays.

As the fallout from the expenses scandal continued, Travelodge suggested MPs could save at least £5m each year by cutting their second home allowance and staying at its property in Southwark, near the House of Commons.

Rival budget hotel group Premier Inn said that research found that switching all public sector hotel stays to its hotel could save taxpayer more than £20m.

Peter Hancock, chief executive of Pride of Britain Hotels, said the current second-home allowance works out to around £192 a night, on the basis MPs spend 120 nights at the House of Commons - more than enough for dinner, bed and breakfast at a reasonable London hotel.

"MPs would then be free of any dealings with landlords or mortgage companies, they would have no laundry, housekeeping or catering worries and those with sufficient private means could, of course, upgrade to larger suites and better vintages at their own expense if they wanted to," he said.

"Most importantly, they would come into daily contact with the people who work in this industry and might think twice before enacting regulations and tax measures that harm our ability to stay in business."

Peter Davies, senior manager at business advisory firm Vantis, highlighted another potential controversy in the current system, with MPs receiving tax relief if a payment is described - by themselves - as "legitimate".

"It's interesting that - and this won't come as a surprise - MPs have managed to write themselves a separate piece of legislation that allows them to receive the majority of these expense payments tax-free, whereas you and I would be clobbered if our employers did the same," he said.

Taxpayers subsidising MPs' bars to the tune of £5.5m >>

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By Kerstin Kühn

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