Kinnock in EU perks row

Neil Kinnock was at the centre of a row yesterday over perks he took as Vice-President of the European Commission which have been declared illegal.

The controversy is likely to prove deeply embarrassing to the former Labour leader, who was made responsible for cleaning up the Brussels bureaucracy after a corruption scandal three years ago. Mr Kinnock was one of only four of the 19 commissioners allowed to return after the body resigned en masse in 1999.

Mr Kinnock had been taking advantage of an entitlement to draw a £30,000 supplement to his £140,000 salary when he transferred part of his pay back to a British bank account. He was forced to put a stop to the payments earlier this month after the community's financial watchdog body, the Court of Auditors, ruled that there has never been any legal basis for the entitlement.

An investigation for BBC Radio 4's File on 4, to be broadcast on Tuesday, uncovered the payments. Mr Kinnock confirmed he had benefited from the supplement, though he says he did not take the full amount.

Under an arrangement which existed for decades, senior Eurocrats could transfer up to a third of their salaries back to their home countries and receive a weighting designed to ensure they were not hit by differences in exchange rates. Because of the strong pound British officials had been receiving far more than others – £1.64 for every pound they transferred. The maximum Mr Kinnock could have transferred each year on his current salary was £46,600, to which £29,800 would have been added as a weighting. He remains entitled to a further £25,000 on top of his salary for his residence and other expenses, and he receives generous allowances if he has to leave Brussels on business.

Critics of the scheme, however, say that Mr Kinnock should have been aware of the uncertainty over its legal status, especially as he has repeatedly trumpeted the need for financial rigour and probity.

Mr Kinnock said that despite the ruling he still believed the payments were legal. He admitted he had benefited personally from the transfers but said he had not transferred the full amount to which he was entitled.

"Because of the doubt, we said the only thing an accountable commission could do in the circumstances was to suspend the system unless and until there was a very precise legal base," he said. "There will be discussions between all the institutions affected to see whether a legal base should be developed, whether it can be developed and if so what form it should take."

Mr Kinnock brushed off suggestions that the payments could be seized on by Eurosceptics as one more example of the lavish perks enjoyed by Eurocrats. "Eurosceptics would use the purchase of a bus ticket in Brussels as evidence of a gravy train," he said.

Mr Kinnock revealed the payments had been suspended in a Parliamentary answer to Gabriele Stauner, a German MEP who sits on the Parliament's Budgetary Control Committee. "I am very disappointed about Mr Kinnock," Mrs Stauner said. "I think it is hypocrisy of the first order that he says he is fighting against fraud and yet they grant this addition to his salary."

Mrs Stauner said a European Court of Justice ruling in 1998 had proved there was no legal basis for such payments, which were also available to other senior EU officials, but nothing had been done about it until now. Mr Kinnock, for his part, countered that the court's hierarchy had now said the payments were legal, and that the judges in the courts would continue to receive them even though they had been stopped for commissioners.