Conduct of Sir Nicholas and Lady Winterton
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House of Commons Committee on Standards and Privileges Conduct of Sir Nicholas and Lady Winterton Twelfth Report of Session 2007-08 Report and appendices, together with formal minutes Ordered by The House of Commons to be printed 17 June 2008 HC 744 Published on 18 June 2008 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Committee on Standards and Privileges The Committee on Standards and Privileges is appointed by the House of Commons to oversee the work of the Parliamentary Commissioner for Standards; to examine the arrangements proposed by the Commissioner for the compilation, maintenance and accessibility of the Register of Members’ Interests and any other registers of interest established by the House; to review from time to time the form and content of those registers; to consider any specific complaints made in relation to the registering or declaring of interests referred to it by the Commissioner; to consider any matter relating to the conduct of Members, including specific complaints in relation to alleged breaches in the Code of Conduct which have been drawn to the Committee’s attention by the Commissioner; and to recommend any modifications to the Code of Conduct as may from time to time appear to be necessary. Current membership Rt Hon Sir George Young Bt MP (Conservative, North West Hampshire) (Chairman) Rt Hon Kevin Barron MP (Labour, Rother Valley) Rt Hon David Curry MP (Conservative, Skipton & Ripon) Mr Andrew Dismore MP (Labour, Hendon) Nick Harvey MP (Liberal Democrat, North Devon) Mr Elfyn Llwyd MP (Plaid Cymru, Meirionnydd Nant Conwy) Mr Chris Mullin MP (Labour, Sunderland South) The Hon Nicholas Soames MP (Conservative, Mid Sussex) Mr Paddy Tipping MP (Labour, Sherwood) Dr Alan Whitehead MP (Labour, Southampton Test) Powers The constitution and powers of the Committee are set out in Standing Order No. 149. In particular, the Committee has power to order the attendance of any Member of Parliament before the committee and to require that specific documents or records in the possession of a Member relating to its inquiries, or to the inquiries of the Commissioner, be laid before the Committee. The Committee has power to refuse to allow its public proceedings to be broadcast. The Law Officers, if they are Members of Parliament, may attend and take part in the Committee’s proceedings, but may not vote. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at: www.parliament.uk/sandp. A list of Reports of the Committee in the present Parliament is at the back of this volume. Committee staff The current staff of the Committee are Dr Christopher Ward (Clerk), Mr Keith Neary (Second Clerk) and Miss Michelle Owens (Secretary). Contacts All correspondence should be addressed to The Clerk of the Committee on Standards and Privileges, Journal Office, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 6615. Conduct of Sir Nicholas and Lady Winterton 1 Contents Report Page Conduct of Sir Nicholas and Lady Winterton 3 Introduction 3 Background 3 Conclusions 4 Appendix 1: Memorandum from the Parliamentary Commissioner for Standards 8 Appendix 2: Letter to the Clerk of the Committee from Lady Winterton, 12 June 2008 37 Formal minutes 38 Reports from the Committee on Standards and Privileges in the current Parliament 39 Conduct of Sir Nicholas and Lady Winterton 3 Conduct of Sir Nicholas and Lady Winterton Introduction 1. We have received a memorandum from the Parliamentary Commissioner for Standards on the outcome of his investigation of complaints against Sir Nicholas Winterton, the Member for Macclesfield and Ann Winterton, the Member for Congleton, (‘the Wintertons’) by Mr Gary Poole and Mr Michael Barnbrook. The complaints related to claims against their respective Additional Costs Allowances (ACAs) made by the Wintertons in respect of the rental of a property in London. 2. The Commissioner’s report is reproduced at Appendix 1. In accordance with our usual practice, we have shown the Wintertons copies of the Commissioner’s report. A copy of their response is reproduced at Appendix 2. Background 3. The complaints relate to the Wintertons’ use of a flat in London which they purchased on a mortgage in the early 1990’s and have occupied since then as their ‘second home’.1 Initially they claimed the mortgage interest against the ACA.2 Subsequently they paid off the mortgage from their own resources, following advice about their likely Inheritance Tax liability. The Wintertons were further advised to put the flat into a trust, of which they are two of the three trustees. 3 The beneficiaries of the trust are their three children.4 The trust came into existence in February 2002. Since then, the Wintertons have continued to occupy the property as tenants of this trust, paying a market rent based on an independent valuation,5 and they have each charged half of the rent against their respective ACAs. 4. For the duration of the period following the purchase of the property up to the creation of the trust, the Wintertons held both the legal title to the property and the beneficial interest. Following the establishment of the trust, the three trustees held the legal title on trust for those who held the beneficial interest, in this case the Wintertons’ three children. This is relevant to the question of whether and to what extent the arrangements fell within the scope of what was permissible for reimbursement under successive revisions of the ACA rules. 1 The property has throughout been designated by each of them as the property in respect of which they are eligible to claim against the ACA. 2 WE 7, p. 28. 3 WE 8, p. 29. 4 WE 17, p. 35. 5 WE 7 and WE 8, p. 28. and 29. 4 Conduct of Sir Nicholas and Lady Winterton 5. Before entering into the arrangements described above, the Wintertons contacted the Fees Office6 to ascertain whether these would be acceptable as they wished to continue living in the flat (and, by inference, meeting the cost from their ACAs). They say that they would not have gone ahead if the proposed arrangements had not been acceptable to the Fees Office.7 No written record exists of the terms of the assurance or the basis on which it was sought, but from a record of discussions between the Wintertons and the Department of Resources in March 2008, it appears to derive originally from advice given no later than 1998 that paying a market rent, albeit under a family trust arrangement, was not against the rules set down by the House. Likewise, no written record exists of these discussions.8 6. Since the Wintertons established their trust, there have been two relevant changes in the rules in the Green Book. In June 2003, a provision prohibiting claims for “the cost of leasing accommodation from yourself” was introduced both in respect of the ACA and the Incidental Expenses Provision (IEP). The second relevant change was in July 2006, when a provision was introduced explicitly prohibiting the use of the ACA to meet the cost of “leasing accommodation from….any organisation…in which you or a….family member— have an interest; or [from] a…..family member.”9 Conclusions 7. As the Commissioner has pointed out,10 the arrangement entered into by the Wintertons in February 2002 by which they transferred their interest in their London property to a family trust and thereafter continued to occupy the property as tenants of the trust is an unusual use of the ACA. He also pointed out that it benefited the family, their estate and assisted their personal inheritance tax planning. We agree with the Commissioner that, given their substantial personal interest in the arrangements, it would therefore have been prudent for the Wintertons, once having gone ahead with the arrangements, to have checked to ensure that charging the rent to the ACA remained consistent with the rules, particularly when these were changed. 8. We accept the Wintertons’ assurances that they discussed with the Fees Office the likely acceptability of their proposed arrangements before they entered into them. We note, though, that the key assurance on which they apparently relied was given at least three years before the trust was established. It would have been prudent for them to have taken the initiative of checking again when they were finally ready to proceed that their proposed arrangements remained acceptable for ACA purposes. 9. As the Commissioner recognises, the complaints raise two specific questions: 6 The Fees Office was part of the Department of Finance and Administration, now incorporated in the Department of Resources. 7 WE 7, p. 28. 8 WE 9, p. 30. 9 WE 6, p. 27. 10 Appendix 1, para. 37. Conduct of Sir Nicholas and Lady Winterton 5 • did the arrangements made by the Wintertons fall foul of the 2003 prohibition on Members meeting from the ACA the cost of renting from themselves; and • did the arrangements fall foul of the 2006 prohibition on meeting from the ACA the costs of leasing accommodation directly or indirectly from a family member? 10. The Commissioner considers it ‘arguable’ that the change to the Green Book in 2003 put the Wintertons’ arrangements outside the scope of the rules, but does not consider it productive or necessary at this remove to attempt to resolve this issue.11 We agree, but also share the Commissioner’s view that it was unfortunate that there was no recognition that the Wintertons’ arrangements might need to change.