MPs told to repay profits from taxpayer-funded second homes

Scarborough and Whitby MP Robert Goodwill, a Tory whip, and Penistone and Stocksbridge MP Angela Smith, a Labour backbencher, are among a group of almost 30 MPs who have agreed to pay back capital gains on their second homes after continuing to claim mortgage interest on their expenses since 2010.

There is no suggestion any of the MPs have acted improperly, but the repayments are indicative of the clampdown on MPs’ expenses since the scandal that erupted at Westminster four years ago.

The tough new watchdog, the Independent Parliamentary Standards Authority (Ipsa), banned MPs from using their second home expenses to pay mortgage interest in May 2010, in the wake of public fury over “flipping” and allegations of profiteering.

However, transitional arrangements were put in place permitting MPs to keep claiming the money up to last August – as long as they agreed to return any potential capital gain on their home.

Figures released by Ipsa yesterday showed 71 MPs claimed almost £1m over the 15-month period, but most were not asked to make repayments, because surveyors’ reports showed their properties had not gained in value.

However, 29 were asked to make payments to reflect the increased value of their homes.

Ms Smith has paid back almost £8,500, while Mr Goodwill has paid back almost £5,000.

Both said yesterday they had always understood any capital gain would need to be repaid, and that they were happy to do so.

Ipsa has begun High Court action against one Tory MP who is refusing to pay up. Peterborough MP Stewart Jackson said he was mounting his own legal challenge in response, accusing Ipsa of over-estimating the value of his home and then rushing into “heavy-handed and disproportionate” litigation.

Comment: Page 12.