The Times: Lib Dem plan to make MPs sell second homes to benefit taxpayer (Shepway Liberal Democrats)

The Times: Lib Dem plan to make MPs sell second homes to benefit taxpayer

April 9, 2009 8:50 AM

From the Times: MPs should be forced to sell their second homes and return most of the profits to the taxpayer, under plans to be put forward by Liberal Democrat leader Nick Clegg.

Under Mr Clegg's proposals, to be put forward at a meeting with the Labour and Conservative leaders, MPs would no longer be able to claim mortgage interest payments on expenses and would be compensated only for rental payments.

MPs who already have properties would be given 36 months before Parliament refused to fund their mortgage interest payments. MPs who then sold their second homes would be forced to return to the taxpayer a proportion of the mortgage interest they had claimed, out of the profit. The precise formula to determine how much MPs should return has yet to be finalised, with party officials still examining how best to deal with houses in negative equity.

The Liberal Democrat leader is determined, however, to lay down the principle that MPs should not continue to profit from huge capital gains at the taxpayers' expense. Research in 2006 by House of Commons authorities found that 485 MPs - three quarters of the total - claimed mortgage interest payments. MPs have benefited considerably from the tripling of property prices since 1997, which have pushed up the average price of a Westminster flat from £171,000 to £543,000 last year. Despite being able to claim more than £20,000 a year for mortgage interest payments, MPs can keep any profit from second home sales when they leave Parliament.

Furniture, building work and taxis could no longer be claimed under Mr Clegg's proposals. Claims would be limited to utility bills and council tax. The second home allowance limit would be "substantially" reduced, with cohabiting couples able to claim only half each.

Ministers with grace and favour accommodation, such as the Prime Minister and Chancellor, would not be allowed to claim rental on any additional property. On travel, MPs would be permitted standard open return tickets when travelling to and from their constituencies. MPs' salaries would not be raised while the country is still in recession.

Shepway Liberal Democrats