A NEW perk is to be given to MPs that will let them use taxpayers’ money to help to fund extensions on their second homes worth hundreds of thousands of pounds.

The new rules, due to be announced in July, will enable MPs to re-mortgage their second homes and claim back interest payments. The loans can then be used to fund improvements on their houses.

Norman Baker, the Liberal Democrat MP who has campaigned against parliamentary perks, said: “I think the public have made it very plain that they want MPs to be properly accountable for money they spend on themselves.

“It seems that some members of the Commons, rather than looking to tighten loopholes are making them even wider. It is not a responsible way to act.”

The Commons Green Book rules allow MPs to claim for decoration and “necessary” repairs to make good wear and tear. Until now they could not claim for improvements that increase the value of a property.

The changes to the rule book, revealed after a Freedom of Information request, were agreed in February by the members estimate committee. The House of Commons finance and administration department said in a statement: “A decision has been taken in principle by the members estimate committee to allow re-mortgaging in certain circumstances.” It was not disclosed during last week’s Commons debate on MPs’ salaries.

A source close to the committee said the move was designed to benefit young families who might otherwise be forced to move to a bigger house and make claims against a larger mortgage. “If they want to improve the property as an alternative to trading up they can’t take out the additional costs and pay it to the builder. But they can extend the mortgage to cover it and claim the interest,” the source said.

Matthew Elliott, of the Taxpayers’ Alliance, a campaigning group, said the loophole would open the way to bigger claims by more MPs living outside London. “Some politicians may not like it but it’s completely wrong for them to rip off taxpayers by voting themselves massive pay increases and gold-plated expenses packages. MPs should lead the way in giving value for money because it’s our money,” he said.

Commons regulations allow MPs to claim an “additional costs allowance” for staying overnight away from home to a maximum of £20,902. The rules allow MPs to claim for mortgage interest payments or rent, council tax, heat, light, water and other smaller costs. Last year 165 MPs claimed the full amount, costing the taxpayer nearly £3.5m.

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