Interesting bit in an Observer article on Sunday detailing how it all came about:
When Lloyd George decided in 1911 that MPs should first be paid a wage, there were dire warnings of bringing "salaried agitators" to the Commons. He defended the £400 allowance as ensuring that those not wealthy enough to treat politics as a hobby could still serve: 26 years elapsed before MPs had their first pay rise.
Even as late as 1970, there were no regular salary reviews and the only extra allowance was £500 for a secretary. MPs had to make their own arrangements for attending overnight votes. Those who could not afford hotels slept in their offices, rinsing yesterday's shirts in the sink. "There used to be a code that, if you left your wastepaper bin across the door, the cleaners didn't disturb you because they knew you were asleep," recalls Nick Harvey, a Liberal Democrat MP and chairman of the House of Commons commission, who was elected in 1992.
But by the mid-1970s, with a more socially mixed Commons, a consensus that legislators should not be dossing on floors prompted the introduction of an allowance for overnight hotel costs. When MPs argued they could get a flat for the same price, it was extended to cover rent and, in the mid-1980s, mortgage payments. The second home allowance was born.
I must admit that although I agree that the system needs reform, I can't summon a sense of outrage about this - I'm sure there are far greater wastes of public money going on daily!