MPs' Expenses: The story that changed politics

It was at 1.21pm on Thursday, May 8 that Downing Street got its first hint of what was to become one of the biggest parliamentary scandals in British history.

Michael Ellam, Gordon Brown's director of communications, had been expecting to spend much of that afternoon batting away press inquiries about Gurkhas' rights when he received a phone call from Robert Winnett, The Daily Telegraph's deputy political editor.

In a conversation lasting less than a minute, Winnett asked for a secure email address to which he could send a letter for Brown's personal attention, saying only that it concerned “expenses''.

Seconds later the email arrived in the Prime Minister's in-box, leaving Brown in little doubt that a political time bomb was about to blow up in his face.

For months, Westminster had been gripped by rumours that a newspaper had been shown computerised facsimiles of expenses receipts submitted by MPs since 2004.

Some of the material was due to be published in July under the terms of the Freedom of Information Act, but crucial details, including the addresses of MPs' second homes, were to be deleted, ensuring that some of the worst abuses of the system would remain hidden from public view.

The email to Brown made it clear that the Telegraph had seen uncensored copies of the expenses claims, including, in his case, receipts for £6,577 he paid his brother Andrew for a shared cleaner and a £153 plumbing bill he had claimed for twice.

Although Brown felt confident in his own ability to explain his claims, he knew that for scores of other MPs, those who had been looking over their shoulders for months, after years of milking the system, the nightmare scenario was about to be played out.

Within an hour, 12 members of the Cabinet, as well as John Prescott, the former deputy prime minister, had received emails from the Telegraph setting out details of material the newspaper intended to publish about them.

One after another, they rang Number 10 to warn Brown that they were about to be embarrassed. “It was like being on the deck of a ship and seeing a torpedo coming which you knew you couldn't stop,'' said one source close to events inside No 10.

Brown learned that several ministers, including Alistair Darling, Geoff Hoon and Hazel Blears, had kitted out more than one house at taxpayers' expense by switching their designated second home from London to their constituency — a process which everyone now knows as “flipping'' after the Telegraph coined the term the next day.

Jack Straw, the Justice Secretary, alerted the Prime Minister to the fact that he had claimed back twice the amount of council tax he had actually paid, and had sent the money back to the parliamentary fees office with a note admitting that “accountancy does not appear to be my strongest suit''.

Prescott proved a headline writer's dream yet again by claiming back the cost of having broken lavatory seats repaired twice in the space of two years, and submitting a bill for £312 to supply and fit three mock Tudor beams to a gable on the front of his house.

It also turned out that the former deputy prime minister, who has admitted suffering from bulimia, claimed the maximum possible amount for food — £4,800 per year.

Outrageous and surreal

The expense claims revealed when the Telegraph's first edition came out late that night ranged from the outrageous to the downright surreal.

They included jellied eels, dog food, eyeliner, Ginger Crinkle biscuits, Maltesers and a chocolate Father Christmas.

Harriet Harman, the Leader of the House, who, as a London MP, was unable to claim a second homes allowance and hence was one of the only Cabinet ministers not directly caught up in the scandal, was despatched to a BBC studio to carry out damage limitation.

She found herself being harangued on Newsnight about why one MP had claimed back the 5p cost of a carrier bag.

It was, she insisted, “all within the rules'' — a familiar refrain in the days to come which did nothing but infuriate taxpayers whose money had been converted into everything from plasma screen TVs to glittery lavatory seats.

Back in Downing Street, Gordon Brown was incandescent as he watched the Cabinet exposed to a toxic combination of outrage and ridicule as news channels cleared their schedules to follow the Telegraph's scoop.

“The Prime Minister felt that he was being persecuted,'' said one MP close to Brown. “There was genuine anger from him which didn't abate during the course of the day.''

For more than a week before the Telegraph published details of its investigation, a team of 10 reporters had been working in total secrecy in a back room at the newspaper's headquarters in Victoria, central London, piecing together evidence of systematic abuse within the parliamentary expenses system.

Even the most experienced journalists on the team were left incredulous by what emerged.

Not only were MPs claiming public money for such fripperies as home cinema systems, antique rugs, silk cushions and ride-on mower servicing, some were guilty of dreaming up scams which in some cases netted them tens of thousands of pounds.

As well as the numerous MPs who were guilty of “flipping'' their homes, others had climbed the property ladder by buying and selling houses which they renovated at the taxpayers' expense, or of furnishing two houses by claiming items for their “second'' home but having it delivered to their first.

Even Gordon Brown himself had “flipped'' his address from his London flat to his Scottish constituency house when he took up residence in Downing Street, enabling him to continue claiming expenses.

Sir Alistair Graham, the former chairman of the committee on standards in public life, said that ministers had displayed a “lack of moral leadership'' but neither the Prime Minister nor the ministers themselves would apologise.

As Brown appeared at a memorial service for a murdered policewoman, Sharon Beshenivsky, dark shadows under his eyes and his eyelids red-rimmed with tiredness, his press officers mounted a sustained defence of his expenses claims, releasing details of the cleaner's contract of employment to prove there was no wrongdoing. Brown also repaid his over-claimed plumber's bill.

But if Brown thought the worst was out of the way after the Telegraph's exposure of senior Cabinet members, he couldn't have been more wrong. Day two of the investigation focused on junior members of the Government but uncovered even worse abuses.

Barbara Follett, the Tourism Minister and wife of the multi-millionaire author Ken Follett, had claimed £25,000 for security patrols outside her London home, saying she didn't feel safe in the capital of the country she is supposed to promote to the world.

Where Gordon Brown had been furious at the Telegraph for questioning his personal expenses claims, David Cameron was furious with his shadow cabinet.

As he came out of his house in west London, he made no attempt to conceal his anger as he was stopped by a Sky TV reporter, saying: “I am angry about what has happened and I am going to deal with it,'' as he got into his car and drove off for a showdown with his entire parliamentary party, many of whom were summoned back to London from their constituencies to face their leader's wrath.

By 3.30pm Cameron was live on TV, saying he was “sorry'' and announcing that his front bench team would be repaying the money they had claimed for furniture, gardens and fripperies.

Anyone who refused would be finished as a Tory MP, he said. Even Cameron himself would be repaying a £680 bill for having wisteria cleared from his chimney.

Increasingly isolated

Where Brown had dithered, Cameron was decisive and ruthless, leaving Labour's worst offenders looking increasingly isolated.

Before long, Labour's stonewall refusal to admit any wrongdoing began to crumble, with Hazel Blears brandishing a cheque for £13,332, made payable to HM Revenue & Customs in lieu of the capital gains tax she should have paid when she sold her second home, and Margaret Moran announcing she would pay back the £22,500 dry rot money in full.

By the following day Labour's resistance had collapsed entirely, with ministers and backbenchers queuing up to pay money back, most notably Phil Hope, who appeared close to tears as he announced he was going to return £41,709 for furniture he had crammed into his tiny London flat.

Others hastily repaid money before the Telegraph had a chance to “out'' them, including Ronnie Campbell, the Labour MP for Blyth Valley, who repaid £6,000 of expenses used to buy furniture.

Nor were the Liberal Democrats immune to the snowballing scandal: Nick Clegg, who claimed the maximum possible second homes allowance, repaid £80 for foreign phone calls; Chris Huhne repaid £119 for a Corby trouser press; and Sir Menzies Campbell handed back £1,400 he had paid to an interior designer who was also a family friend.

The expenses scandal was now so all-encompassing that politicians from all parties began to question whether the public's trust in Parliament could ever be restored.

Norman Baker, the Lib Dem MP, warned that the public's relationship with the Mother of Parliaments might have been “irrevocably damaged''. But even as MPs from all parties searched deep within their consciences, one man refused to repent.

Michael Martin, the Speaker, who had for so long opposed the release of MPs' expenses claims to the public made it clear he regarded the Telegraph as the real villain of the piece.

When the Labour MP Kate Hoey defended the newspaper for publishing the expenses details and handling the information “very sensitively'', Martin, who had approved a decision to call in police to investigate the leak, rounded on her and said it was “easy'' for her to go on TV and give “pearls of wisdom'' but suggested “private data'' should remain private. Hoey later suggested that Martin had “lost it''.

Calls for him to resign gathered pace as the week progressed, with politicians of all stripes suggesting that Martin's behaviour had eroded his authority and demeaned the most senior post in the Commons.

In newspaper offices and television studios across the country, it was by now clear from the reaction of the public that the Telegraph's MPs' expenses investigation had become one of the biggest stories in decades.