Holyrood bosses scrap expenses claim scheme
By Paul Hutcheon Scottish Political Editor

AROUND 30 MSPs will have to sell their taxpayer-funded Edinburgh homes if they want to make future expenses claims for staying in the capital.

Holyrood bosses have ruled that the abolition of the discredited mortgage interest scheme should be accompanied by MSPs disposing of their Edinburgh properties.

The decision means that just less than one-quarter of MSPs will benefit from a near six-figure windfall if they sell their subsidised flats before 2011 - when the new expenses rules kick in.

Some MSPs are entitled to claim around £10,000 a year in mortgage interest payments under the controversial Edinburgh Accommodation Allowance (EAA).

However, an independent review of the expenses system backed abolition of the scheme after MSPs were found to have abused the spirit of the allowance.

Not only were some politicians pocketing the profits made after selling their taxpayer-funded properties, but some MSPs used the post-sale gains to "trade up" and buy lucrative family homes.

The review, chaired by Dundee University principal Sir Alan Langlands, recommended MSPs be restricted to renting or staying in hotels after 2011.

The parliament's corporate body, which runs Holyrood, has backed the proposal and has moved to close off loopholes. The group was worried MSPs currently claiming mortgage interest could rent a new home after the rule change while at the same time letting their existing property bought through EAA.

It has been decided MSPs who claim mortgage interest will only be allowed to bill the taxpayer for rent or hotels if they first sell their Edinburgh homes.

A parliament source said: "MSPs will have to break the link with their existing property."

Such an outcome means it is highly likely that 27 MSPs will pocket large windfalls by selling their taxpayer-funded flats within the next three years.

The biggest winners are likely to be SNP finance secretary John Swinney and LibDem deputy leader Tavish Scott, each of whom could make a £150,000 profit. Presiding officer Alex Fergusson could make £125,000 if he sells up. A parliament spokesman said: "The report concluded that the payment of an allowance to meet mortgage interest payments should be abolished. The corporate body has taken account of the implications of this when preparing a new scheme. Ahead of the scheme being published and debated, it would be inappropriate to comment on speculation about its contents."