Nicol Stephen makes £110,000 profit on flat bought with taxpayers’ help

FORMER Scottish Lib Dem leader Nicol Stephen has made almost £110,000 on a house that was partly paid for by the taxpayer, leading to calls that he and other MSPs should hand over any profits from the now defunct Holyrood housing allowance.

Lord Stephen, who stepped down as an MSP last year and soon after became a member of the House of Lords, is now the biggest known beneficiary of the scheme, which saw the mortgages on MSPs homes paid in Edinburgh.

The previous record had been held by SNP infrastructure secretary Alex Neil who made £105,505 before tax in 2010 by selling a flat he bought with a deposit of just £4,720, for which he received £87,000 of taxpayer funding.

Following a review in 2008, the Edinburgh Accommodation Allowance scheme was changed to support only rent after claims that some MSPs allegedly played the lucrative Edinburgh property market with public subsidies.

With the scheme officially ending in May 2011, it has led to a spate of house sales from current and former MSPs. Lord Stephen is the latest in a line of MSPs who have made a huge profit. SNP finance secretary John Swinney made a pre-tax profit of £75,000 from his home in Morningside; former Lib Dem deputy first minister Jim Wallace made £69,400 before tax; Tory MSP Alex Johnstone £60,000; SNP MSP Gil Paterson £50,000; and former SNP homelessness minister Stewart Maxwell £34,500.

Green co-convenor Patrick Harvie, who never used the scheme, has led calls for the subsidies from the Edinburgh Accommodation Allowance scheme to be paid back by MSPs from the profits of sales.

Mr Harvie said: “This flawed scheme came to an end last year but all MSPs who’ve made a profit on the back of Scottish taxpayers must do the decent thing and hand back the cash. The public will have no sympathy for politicians seen on board any gravy train at a time when housing benefits and the housing budget are being cut.”

Lord Stephen bought his two bedroom property in Lower Morningside for £193,333 in February 2002, using a deposit of just £31,533.

Until May 2001, he claimed more than £70,000 in parliamentary allowances on the property, including more than £50,000 for the interest payments on his Bank of Scotland mortgage, and almost £20,000 for council tax, TV licence fees, insurance and utility bills.

Yesterday Lord Stephen was unavailable for comment. However, a Lib Dem spokesman said that Lord Stephen would be paying capital gains tax on the property, but said there was “nothing to add”.

The Lib Dems have been under pressure to pay back profits on taxpayer subsidised homes following the Westminster expenses scandal.

Deputy Prime Minister Nick Clegg last year paid back the Westminster parliamentary authorities £38,750 from the profit he made on his Sheffield constituency home, which was also subsidised by the taxpayer.