Clegg calls for ban on second-home profits

Nick Clegg, the Liberal Democrat leader, called yesterday for MPs to be banned from making a profit from selling second homes which they bought using their Commons allowances.

He will prevent Liberal Democrat MPs making money out of selling such a property after having their mortgage interest paid by the taxpayer – and wants the rule extended to all MPs. Any profits from the sale of a property would be handed back to the Exchequer.

Mr Clegg said MPs had made hundreds of thousands of pounds out of property speculation and should "get out of the property game altogether". He added: "There is a really simple principle at stake here: we are here to serve our constituents, not make a fast buck on the property market."

His proposal will be considered by the Committee on Standards in Public Life. But some MPs in other parties doubt it will be workable, pointing out that the figures would be difficult to calculate if a home were sold many years later – possibly after the owner was no longer an MP. Mr Clegg said Westminster should follow the Scottish Parliament's example and "stop any taxpayer-funded mortgages altogether".

Andrew George, the Liberal Democrat MP for St Ives, demanded an apology from The Daily Telegraph after it alleged he claimed expenses for a flat in Rotherhithe, London, in which his student daughter Morvah lived. Calling it a "mendacious and vindictive" story, he said: "The only payback here is the apology I'm owed by the Telegraph insinuating that I bought a home for my daughter. This story is a complete fabrication, there is no basis to it whatsoever. They've been stalking my daughter, they've been extremely unpleasant to my family. Is there something wrong with having one's family with them when one's away from home?"

Mr George said his daughter was staying with him in his second home and he wished she were staying longer. He said the home insurance on it was in her name because "we were given no option other than to put someone other than my wife or my name on the insurance policy", as the same name could not be put on two properties.

Five other Liberal Democrat MPs agreed to repay some of the expenses they claimed after being exposed. Former leader Sir Menzies Campbell, who claimed almost £10,000 to redecorate his London flat, agreed to return £1,490 he paid to an interior designer. Julia Goldsworthy, the local government spokesman, will repay the £1,005 she spent on a chair for a London flat.

Mr Clegg, who claimed slightly more than the permitted second homes allowance, will repay £80 for overseas telephone calls, while Chris Huhne, the home affairs spokesman, will pay back £119 he claimed for a trouser press.