House of Commons Committee on Standards and Privileges Mr Tony McNulty
Tenth Report of Session 2008–09
Report and Appendices, together with formal minutes
Ordered by The House of Commons to be printed 27 October 2009
HC 1070 Published on 29 October 2009 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 David Curry MP (Conservative, Skipton and Ripon) (Chairman) Rt Hon Kevin Barron MP (Labour, Rother Valley) Mr Andrew Dismore MP (Labour, Hendon) Nick Harvey MP (Liberal Democrat, North Devon) Rt Hon Greg Knight MP (Conservative, East Yorkshire) 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.
Committee staff The current staff of the Committee are Mr Steve Priestley (Clerk), Miss Rhiannon Hollis (Second Clerk) and Ms Jane Cooper (Committee Assistant).
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.
Mr Tony McNulty 1
Contents
Report Page
Mr Tony McNulty 3 Introduction 3 The Commissioner’s findings 3 Standard of Proof 6 Mr McNulty’s evidence 6 Conclusion 7 Recommendation 9
Appendix 1: Memorandum from the Parliamentary Commissioner for Standards 11
Appendix 2: Letter to the Clerk of the Committee from Mr Tony McNulty, 19 October 2009 68
Appendix 3: Letter to Mr McNulty from the Clerk of the Committee, 20 October 2009 71
Appendix 4: Letter to the Clerk of the Committee from Mr McNulty, 21 October 2009 71
Formal minutes 72
Mr Tony McNulty 3
Mr Tony McNulty
Introduction
1. We have received a memorandum from the Parliamentary Commissioner for Standards, reporting on the outcome of his inquiries into a complaint against the Rt hon Member for Harrow East, Mr Tony McNulty. The memorandum is appended to this Report.1
2. The complaint against Mr McNulty was made in March 2009 by Mr Greg Hands, the Member for Hammersmith and Fulham, following media reports that Mr McNulty had claimed against his Additional Costs Allowance (ACA) in respect of a property in his constituency where his parents lived. The property was only nine miles from Mr McNulty’s main home, in Hammersmith, and was just eleven miles from Parliament.2
3. The rules set out in the Green Book clearly state that:
The Additional Costs Allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight away from their main UK residence … for the purpose of performing parliamentary duties.3
The essence of Mr Hands’ complaint is that Mr McNulty claimed against ACA for expenditure that was not wholly, exclusively and necessarily incurred for the purpose of performing his Parliamentary duties.4
The Commissioner’s findings
4. The Commissioner has established that Mr McNulty lives with his wife in Hammersmith, West London. Mr McNulty also owns a house in his constituency, which he bought for £135,000 in 1998, putting down a £7,000 deposit and borrowing the remainder.5 The mortgage on the Harrow property is in Mr McNulty’s name. Since March 1998, this property has been the sole residence of Mr McNulty’s parents, who pay many of the household bills and who look after the house but who have paid no rent.6
5. Mr McNulty designated his Hammersmith residence as his main home in late 2001 or early 2002. He claimed against the ACA for costs relating to his second home, in Harrow, from that time until December 2008. Following a thorough investigation, the Commissioner has concluded that for the six financial years from 2002–03 to 2007–08, the best estimate is that Mr McNulty spent between 52 and 66 nights a year in his Harrow
1 Appendix 1 2 Appendix 1, WE1 3 Appendix 1, paragraph 7 4 Appendix 1, paragraph 13 5 Appendix 3 6 Appendix 1, paragraph 54
4 Mr Tony McNulty
home when on Parliamentary duties. The number fell to 33 nights for the 9 months from April to December 2008.7
6. The Commissioner notes that Mr McNulty’s claims against the ACA for the Harrow house in the four years from 2004–05 to 2007–08 were in the range £8,251 to £12,600 a year, which represented between 66% and 92% of the total estimated running costs of the Harrow house. These figures exclude sums later repaid. For the nine months from April to December 2008, Mr McNulty claimed £7,330, representing 46% of the estimated total running costs for the year 2008–09. Mr McNulty claimed mainly in respect of mortgage interest and council tax. The remaining running costs for the property were borne by him and his parents.8 The total claimed by Mr McNulty against ACA in the period 2002 to 2008 was £72,528.9
7. Mr McNulty ceased making ACA claims for his constituency property after December 2008.10 The Commissioner notes that in or around August 2009—that is, after the Commissioner had begun his investigation of Mr Hands’ complaint—Mr McNulty realised that he had claimed for twelve rather than ten monthly payments of full council tax in the years 2004–05, 2006–07 and 2007–08. Mr McNulty then made an immediate repayment of £444.31 in respect of the overclaimed sum and subsequently repaid a further £2,600 in respect of overclaims of mortgage-related payments for 2004–05 and 2006–07.11
8. The Commissioner concludes that there was nothing in the House’s rules to prevent a Member whose main home was within 20 miles of his or her constituency claiming ACA in respect of a second home, provided that the second home was needed in order to perform the Member’s Parliamentary duties. The Commissioner considers that it is:
… right that Members should be given a good deal of discretion in deciding how best to perform those duties, including the duties in their constituency. It would no doubt have been possible for Mr McNulty to have undertaken most, at least, of his constituency duties in Harrow from his Hammersmith base if he had been prepared to have undertaken regular late night or early morning journeys and to have allowed plenty of time for traffic hold-ups. But I consider that it was reasonable for Mr McNulty to decide not to do this and to decide instead that he needed a residence actually in his constituency where he could stay overnight to enable him to carry out his constituency duties in the way he thought fit.12
The Commissioner concludes that Mr McNulty was within the rules in establishing a second home within his constituency.13
7 Appendix 1, paragraph 55 8 Appendix 1, paragraphs 39 and 56 9 Appendix 1, paragraph 16 10 Appendix 1, paragraph 57 11 Appendix 1, paragraph 58 12 Appendix 1, paragraph 66 13 Appendix 1, paragraph 67
Mr Tony McNulty 5
9. In order to resolve the complaint, the Commissioner has considered whether the expenses for which Mr McNulty claimed against ACA in respect of his second home were wholly, exclusively and necessarily incurred by him for the purpose of performing his Parliamentary duties. The Commissioner notes that Mr McNulty has acknowledged that he breached the rules by mistakenly overclaiming for some of his mortgage-related payments, although it is not clear whether these were interest or capital repayments.14 Mr McNulty also breached the rules by claiming for twelve monthly council tax payments in 2004–05, 2006–07 and 2007–08, when he had made only ten. All these overclaimed sums, amounting to just over £3,000, have since been repaid.
10. The Commissioner also considers that Mr McNulty should not have claimed the full council tax because, had his parents not been in the home, he would have qualified for a discount. He points out that it was open to Mr McNulty to pay the full council tax if he wished to do so, and not to have re-claimed the full sum from Parliamentary expenses. But these appear to have been innocent mistakes, and overall the Commissioner considers that Mr McNulty’s claims in respect of his second home over the period covered by the complaint appear to have been reasonable and that the expenditure was necessarily incurred.15
11. Turning to the question of whether Mr McNulty’s claims related to expenditure that was wholly and exclusively incurred in connection with his Parliamentary duties, the Commissioner further concludes that, in order to avoid any appearance of a benefit being paid to him or his parents from public funds, Mr McNulty should have formally abated his claims to reflect his parents’ living costs. Over the period 2004 to 2008—which is the period for which a full breakdown of the claims is available—Mr McNulty claimed for well over two thirds of the costs of running his home. Most of the sums claimed related to mortgage interest payments.16
12. Although the Department of Resources has in the course of this inquiry expressed an opinion that ‘living costs’ do not include mortgage interest payments17—and the Commissioner accepts that Mr McNulty did not generally claim for utilities or for repairs and maintenance—it is the Commissioner’s view that mortgage interest, like rent, represents part of the cost of a person’s accommodation and is, therefore, a living cost. The Commissioner disagrees with the Department of Resources and considers that “the normal interpretation should be applied to Members for the operation of this rule.”18
13. On this basis, the Commissioner concludes that, in order to reflect in full the living costs of his parents arising from their rent-free use of the Harrow property as their sole residence, Mr McNulty should have made “a significant reduction in his mortgage interest
14 Appendix 1, paragraph 71 15 Appendix 1, paragraphs 71 to 73 16 Appendix 1, paragraph 39 17 Appendix 1, WE18 18 Appendix 1, paragraph 76
6 Mr Tony McNulty
claims.”19 The fact that Mr McNulty informally abated his claims against ACA by less than a third of the estimated overall cost of the property does not, in the Commissioner’s judgment, mean that Mr McNulty made a fair apportionment between his parents’ living costs and his own.20
14. The Commissioner goes on to note that:
… this was an informal and undocumented arrangement. It was not in my view an acceptable basis on which to claim public money. It provided no audit trail for the respective use of the property by him and his parents. It avoided the spirit of the Green Book rule that a Member should lodge tenancy agreements with the House authorities. Mr McNulty has recognised that a more formal arrangement which reflected the cost of his parents’ use of the house, including the mortgage cost, would have been desirable. I agree. By not fully and transparently excluding his parents’ living costs from his claims, I conclude that Mr McNulty was in breach of the rules of the House by claiming for the living costs of someone other than himself.21
15. The Commissioner further concludes that the arrangement Mr McNulty made in accommodating his parents rent-free in his constituency home, which was also their sole residence, provided an immediate benefit or subsidy from public funds to him and through him to his parents. Such a benefit was specifically prohibited by Section 3.3.2 of the Green Book Rules of July 2006 and it was against the spirit of the previous rules.22 The Commissioner therefore upholds the complaint, in that Mr McNulty and his parents obtained a benefit from Parliamentary funds to which he was not entitled.23
Standard of Proof
16. The Commissioner has adopted the civil standard of proof in the course of this inquiry—the balance of probabilities. We have done the same.
Mr McNulty’s evidence
17. Mr McNulty wrote to us on 19 October. His evidence is printed as Appendix 2 to this Report. Mr McNulty welcomes the Commissioner’s conclusion that he operated within the rules in establishing and claiming against ACA for his second home in his constituency. He further welcomes the Commissioner’s conclusion that, with the exception of mistakes later identified by Mr McNulty himself, these claims were for expenditure necessarily (but not wholly and exclusively) incurred in connection with his Parliamentary duties. Mr McNulty thanks the Commissioner for his “diligence and courtesy.”
19 Appendix 1, paragraph 77 20 Appendix 1, paragraph 78 21 Appendix 1, paragraph 79 22 Appendix 1, paragraph 81 23 Appendix 1, paragraph 93
Mr Tony McNulty 7
18. However, Mr McNulty takes issue with the Commissioner’s conclusion that mortgage interest payments are part of living costs, arguing that “this conclusion rests on a significant reinterpretation of the rules that the Department of Resources confirmed in July 2009—just three months ago.” Mr McNulty regards the Commissioner’s conclusion as “neither fair nor reasonable.” He invites us to judge his conduct against the advice of the Department of Resources and “not on the Commissioner’s redefinition.” He tells us that:
I sought to abate all claims other than council tax and mortgage interest as much as I considered appropriate, in line with the advice rendered and in recognition of the position of my parents, probity and the efficient use of public funds—and did so throughout the period concerned.
Finally, Mr McNulty suggests that:
If the re-interpretation of the advice from the Department of Resources is set aside, closer reading of the report leads me to believe that even the Commissioner would have agreed that I acted within the letter and spirit of the current rules and I would ask the Committee to judge me on that basis.
19. We later asked Mr McNulty for some further information concerning the original purchase of his Harrow home, which he provided on 21 October.24
Conclusion
20. We agree with the Commissioner that Mr McNulty had two homes. Mr McNulty bought his constituency home in 1998, with a 95% mortgage in his name.25 With his encouragement, his parents made it their sole residence shortly after. Although Mr McNulty made little use of this home once he established his main residence in Hammersmith, the use he did make of it appears to have been in connection with his Parliamentary duties. The figures provided in the Commissioner’s memorandum show that Mr McNulty was paid £75,528 from his ACA for living expenses in respect of his constituency home in the period 2002 to 2008.26 We agree with the Commissioner that on the balance of probabilities most of the expenditure on Mr McNulty’s second home was necessarily incurred in connection with his Parliamentary duties. The exception is Mr McNulty’s mistaken claims for mortgage interest and for council tax payments amounting to just over £3,000, which he has repaid and for which he has apologised.
21. The main point that has to be established, following the Commissioner’s thorough investigation of this case and Mr McNulty’s reply, is whether Mr McNulty’s claims in respect of his second home related to expenditure that was wholly and exclusively incurred in connection with his Parliamentary duties. The Commissioner has concluded that the informal arrangement into which Mr McNulty entered with his parents under which they
24 Appendix 3 25 Appendix 3 26 This total does not include £3,044 which was repaid by Mr McNulty in 2009
8 Mr Tony McNulty
looked after the house and paid most household bills but lived rent-free and made no contribution to mortgage or council tax meant that Mr McNulty effectively subsidised his parents’ living costs, and his claims against ACA reimbursed him for a significant part of that subsidy. Underpinning this conclusion is the Commissioner’s view that mortgage interest payments are commonly and rightly understood to be part of living costs. On that basis, both Mr McNulty and his parents derived a benefit from Mr McNulty’s ACA claims to which neither was entitled.
22. Mr McNulty disputes the Commissioner’s conclusion. He has told us that in making his claims against his ACA he appropriately, if informally, abated them to reflect his parents’ living costs rather than claim everything to which he was entitled.27 He also states that he acted throughout in accordance with Fees Office advice—although he only sought such advice once, in 1998. The crux of Mr McNulty’s case is that the Commissioner was wrong to substitute his own interpretation of living costs for that offered by the Department of Resources.28 We need to consider these points before reaching a conclusion of our own.
23. We note that Mr McNulty has consistently claimed less against his ACA than have most other Members and has chosen not to claim sums to which he would probably have been entitled.29 However, the fact that a Member has not claimed sums to which he may have been entitled does not excuse a breach of the rules. And the informality of Mr McNulty’s “abatement” of his claims was neither transparent nor did it provide proper accountability. If there was a real need for Mr McNulty’s parents to live in his second home, in respect of which he was claiming public money, there should have been a formal arrangement in place, whereby Mr McNulty would have charged his parents an economic rent. Mr McNulty has told us that he regrets his failure to recognise that making such an arrangement would have been the wise thing to do.30 It would surely have helped Mr McNulty to avoid much if not all of the difficulty that he now finds himself in.
24. As to the original Fees Office advice, we note that there is no record of it and that it appears to have been given at about the time Mr McNulty’s parents moved into his Harrow house. This was some years before Mr McNulty first claimed against ACA for using the house in connection with his Parliamentary duties. Although the Commissioner has concluded that, had Mr McNulty sought further advice from the Fees Office or its successors, the advice would probably have been consistent with Mr McNulty’s understanding of the rules, it is the case that Mr McNulty did not do this and instead relied on advice he received in 1998 or 1999. In our view, Mr McNulty could and should have sought advice, particularly on the lack of any formal arrangement for his parents’ contribution to the running costs of the house. Nonetheless, as the Commissioner has
27 Appendix 1, WE5 and WE25; Appendix 2 28 Appendix 2 29 Appendix 1, WE25 30 Appendix 2
Mr Tony McNulty 9
suggested, some weight needs to be given to the fact that Mr McNulty was apparently acting in accordance with the House authorities’ interpretation of the rules.31
25. This brings us to the substance of Mr McNulty’s evidence. In Mr McNulty’s view, the Commissioner’s “significant reinterpretation of the rules” is neither fair nor reasonable. However, the Department of Resources (formerly the Fees Office) does not make the rules; it interprets and administers them: Members remain responsible for ensuring that their conduct is at all times within the rules. It is also the case that an important part of the Commissioner’s role under the Standing Orders of the House is to advise on the interpretation of the code of conduct, which forms the basis of the rules.32 We agree with the Commissioner that most people would regard mortgage interest payments as part of a household’s living costs. If this is, as we believe, the correct, fair and reasonable interpretation, it follows that Mr McNulty’s claims did not relate wholly and exclusively to his Parliamentary duties. The advice of the Department of Resources was, in our view, mistaken, and the fact that Mr McNulty acted in accordance with that advice—although he did not seek to test it over a period of ten years—is a mitigating factor, rather than a reason to set aside the Commissioner’s conclusions.
26. In summary, we accept that there are mitigating factors in this case. However, these are matters for us to take into consideration when deciding what, if any sanction to apply. They do not have any bearing on the question of whether Mr McNulty was in breach of the rules. We conclude that Mr McNulty breached the rules of the House by claiming against his Additional Costs Allowance for expenses in respect of his second home that were not wholly and exclusively incurred in connection with his Parliamentary duties. This had the effect of subsidising the living costs of Mr McNulty’s parents from public funds.
27. Finally, we wish to recognise—as the Commissioner has recognised—that Mr McNulty has cooperated fully with the investigation of this complaint.33 We are grateful to him for doing so.
Recommendation
28. The difficulty in assessing any amount to be repaid is that there was no loss to the taxpayer, if we take into account what Mr McNulty could have claimed had he lived on his own. If Mr McNulty’s parents had not lived with him, such claims would have been entirely in order. The Commissioner has concluded that, had Mr McNulty sought further advice from the Fees Office or its successors, the advice would probably have been consistent with Mr McNulty’s understanding of the rules.
31 Appendix 1, paragraph 85 32 Standing Order No 150(2)(c) 33 Appendix 1, paragraph 92
10 Mr Tony McNulty
29. However, having concluded that Mr McNulty and his parents derived a financial benefit from his ACA payments, we need to consider the scale of that benefit. There is no ready-reckoner that can be applied to this calculation. One could take the view that three people lived in the house, and that the cost of running it should therefore have been split three ways. In our judgment, however, two households made use of the property and each should have contributed half of the costs. Most of these costs—those relating to mortgage interest payments and to council tax—were not directly related to frequency of use.
30. A breakdown of the running costs of Mr McNulty’s Harrow property and of his claims against ACA is available for the period 2004–05 to 2008–09, but not for the period 2002-04. Our recommendations have to be based on the evidence before us and we have not, therefore, taken into account the period 2002–04, in respect of which the evidence is incomplete. In the period 2004 to 2009, the total running costs of the property were £72,187.12. In the same period, Mr McNulty claimed £49,931 against his ACA, which is 69% of the property’s total running costs. In our view he should have claimed not more than half these costs: £36,093.56. The difference between what Mr McNulty did claim and what he should have claimed—£13,837.44—arguably represents the subsidy from public funds of Mr McNulty’s parents’ share of the running costs.
31. We recommend that Mr McNulty be required to apologise to the House and to repay the sum of £13,837.
Mr Tony McNulty 11
Appendix 1: Memorandum from the Parliamentary Commissioner for Standards
Complaint against Rt Hon Tony McNulty MP 13 Introduction 13 Background 13 The Complaint 13 Relevant Rules of the House 14 My Inquiries 15 Findings of Fact 27 Standard of Proof 28 Conclusions 28 Was Mr McNulty entitled to claim for a second home in his constituency? 28 Were Mr McNulty’s arrangements within the rules of the House? 29 Related issues 32 Overall conclusion 34
Written evidence received by the Parliamentary Commissioner for Standards 35 1. Extract from article in the Mail on Sunday, published 22 March 2009 35 2. Letter to the Commissioner from Mr Greg Hands MP, 23 March 2009 37 3. Extract from article in the Daily Mail, 23 March 2009 38 4. Letter to Rt Hon Tony McNulty MP from the Commissioner, 24 March 2009 39 5. Letter to the Commissioner from Rt Hon Tony McNulty MP, 21 April 2009 41 6. Letter to Rt Hon Tony McNulty MP from the Commissioner, 23 April 2009 44 7. Letter to the Commissioner from Rt Hon Tony McNulty MP, received 11 May 2009 44 8. Letter to Rt Hon Tony McNulty MP from the Commissioner, 12 May 2009 47 9. Letter to the Commissioner from Rt Hon Tony McNulty MP, received on 20 May 2009 47 10. Letter to Rt Hon Tony McNulty MP from the Commissioner, 11 June 2009 47 11. Letter from Rt Hon Tony McNulty MP to the Commissioner, 23 June 2009 48 12. Letter to Saroj Rawal from the Commissioner, 25 June 2009 49 13. Letter to Rt Hon Tony McNulty MP from the Commissioner, 29 June 2009 50 14. Rt Hon Tony McNulty MP's nights in constituency (reproduced in summary form) 50 15. Letter to Director of Operations, Department of Resources from the Commissioner, 29 June 2009 51 16. Letter to the Commissioner from Rt Hon Tony McNulty MP, 8 July 2009 51 17. Letter to Rt Hon Tony McNulty MP from the Commissioner, 9 July 2009 52 18. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 21 July 2009 52 19. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 22 July 2009 53 20. Letter to the Commissioner from Rt Hon Tony McNulty MP, 28 July 2009 54 21. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 30 July 2009 56 22. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 5 August 2009 57 23. Letter to the Commissioner from Rt Hon Tony McNulty MP, 26 August 2009 57 24. ACA Claims by Rt Hon Tony McNulty MP for his Harrow property as percentage of running costs eligible for reimbursement from ACA 58
12 Mr Tony McNulty
25. Agreed Note of Interview, 3 September 2009 58 26. Letter to Rt Hon Tony McNulty from the Commissioner, 7 September 2009 67 27. Letter to the Commissioner from Rt Hon Tony McNulty MP, 15 September 2009 67
Mr Tony McNulty 13
Complaint against Rt Hon Tony McNulty MP
Introduction
1. This memorandum reports my conclusions on a complaint that Rt Hon Tony McNulty, Member for Harrow East, wrongly claimed against the Additional Costs Allowance (ACA) for his constituency home which was also his parents’ sole residence.
Background
2. On 22 March 2009, the Mail on Sunday published an article alleging that Mr McNulty had “been wrong to claim £60,000 of taxpayers’ money” through the Additional Costs Allowance (ACA) for a property which was his parents’ main home in his constituency in Harrow, north London.1 The article said that Mr McNulty had claimed these sums despite the fact that his main home was in Hammersmith, three miles from Westminster and eleven miles from Harrow. Mr McNulty was quoted in the Mail on Sunday article as saying that he had “always felt some discomfort in claiming the money, to be frank”, and as acknowledging that the arrangements appeared “odd”.
The Complaint
3. Mr Greg Hands, Member for Hammersmith and Fulham, wrote to me on 23 March to complain that Mr McNulty had claimed ACA for a property in which his parents lived and that it was not clear whether Mr McNulty ever stayed there overnight. Mr Hands also raised the question whether Mr McNulty needed to claim under the Incidental Expenses Provision (IEP) if he used the property purely for constituency work during the day. 2
4. In his letter Mr Hands referred to an article which had appeared in the Daily Mail of 23 March 2009. The article alleged that since 2002 Mr McNulty had claimed £60,000 in expenses on a house in his Harrow constituency in which his parents lived, where he was rarely seen by his neighbours, and which was only a few miles from his main home in Hammersmith.3 A retired newsagent was quoted in the Daily Mail as saying, “I’ve never seen Tony McNulty, not even at election time.” Mr McNulty was reported to have said “I was probably spending one or two nights a weekend there early on when I was an MP. It probably is less now,” and that he had stopped claiming the allowance in January 2009 because interest rates had fallen so far that he was able to meet his mortgage commitments from his parliamentary salary.
1 WE 1 2 WE 2 3 WE 3
14 Mr Tony McNulty
Relevant Rules of the House
5. The Code of Conduct for Members of Parliament provides in paragraph 14 that:
“Members shall at all times ensure that their use of expenses, allowances, facilities and services provided from the public purse is strictly in accordance with the rules laid down on these matters, and that they observe any limits placed by the House on the use of such expenses, allowances, facilities and services.”
6. Mr Speaker Martin’s introduction to the edition of the Green Book published in July 2006 states:
“Members themselves are responsible for ensuring that their use of allowances is above reproach. They should seek advice in cases of doubt and read the Green Book with care.”
7. The rules for the ACA are set out in Section 3 of the Green Book. For the purposes of this complaint the most relevant edition is that published in July 2006. Section 3.1.1 sets out the scope of the allowance as follows:
“The Additional Costs Allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight away from their main UK residence (referred to below as their main home) for the purpose of performing parliamentary duties. This excludes expenses that have been incurred for purely personal or political purposes.”
8. Section 3.3.1 sets out the following principles:
“You must ensure that arrangements for your ACA claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. Members should bear in mind the need to obtain value for money from accommodation, goods or services funded from the allowances.”
9. Section 3.3.2 continues:
“You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds …”
10. Section 3.14.1 says:
“The following expenditure is not allowable
• Living costs for anyone other than yourself.”
11. Section 5.3.1 of the Green Book identifies allowable expenditure from the IEP:
“The IEP may be used to meet the following expenses:
• Accommodation for office or surgery use – or for occasional meetings … ”
Mr Tony McNulty 15
12. Sections 3.1.1 and 5.3.1 were included in similar terms in the April 2002, June 2003 and April 2005 editions of the Green Book, but section 3.3 on principles in relation to the ACA was not included before the July 2006 edition.
My Inquiries
13. I wrote to Mr McNulty on 24 March,4 attaching both the Daily Mail article of 23 March and the Mail on Sunday article of 22 March, to invite his comments on the allegation. I noted that the essence of the complaint was that he had claimed expenses for a residence in his constituency, and that those expenses were not wholly, exclusively or necessarily incurred when staying overnight away from his main home for the purpose of performing his parliamentary duties, contrary to the rules of the House. I asked him to let me know how he came to establish his arrangements for making claims under the ACA for property in his constituency; the arrangements he had had for that residence, including mortgage arrangements, any income he received from it, its use when he was not himself there, and his estimate of the number of nights he had spent in that residence in each of the seven previous financial years; the value and nature of the claims he had made for that residence under the ACA for each of the previous seven financial years; confirmation of when he ceased making claims for that residence under the ACA and his reasons for doing so; whether he had made any claims for an office in that residence under the IEP, if so, what they were, and if not, his reasons for not doing so; whether, and if so, why he considered the claims he made were within the scope of the ACA, taking account of the requirement that the costs should be wholly, exclusively and necessarily incurred when staying overnight away from his main home, and the importance of obtaining value for money for accommodation funded from allowances; and whether he considered that there was any immediate benefit or subsidy from public funds to himself or anyone close to him arising from the reported use of the accommodation by his parents. I acknowledged that I was asking for factual information which went back some years and said that I would understand if the information he gave me was based on his own best estimates.
14. Mr McNulty replied on 21 April.5 He said he had in 1998-99 discussed the arrangements for the property with the Fees Office, who had advised him that it was “perfectly permissible” for his parents to share his second home. He had not had cause to return to the Fees Office to discuss these matters further. The mortgage on the property was solely his and he had never received any income from the property. He confirmed that his parents lived in the property, both when he was there and when he was not.
15. Mr McNulty said “the rules do not specify a minimum requirement in terms of the frequency or regularity with which a Member should actually use the second home.” He had not therefore kept a record of the number of nights he had spent in the Harrow property over each of the last seven years. Having looked however at his constituency and
4 WE 4 5 WE 5
16 Mr Tony McNulty
departmental diaries for the previous four years, Mr McNulty estimated that he had spent, on average, at least one or two nights a week in the Harrow property in order to carry out parliamentary duties when not on holiday or away on ministerial business. That figure did not include overnight stays for solely political or personal reasons. The pattern of overnight stays had changed in the context of his ministerial duties: when he had been first a Whip and then a Parliamentary Under-Secretary of State, between 1999 and 2004, he had been able to spend more days and nights in his constituency when the House was not sitting.
16. His claims under the ACA for the Harrow property had been as follows: 6
2002-03 £13,997 (including payments from the previous year)
2003-04 £8,600
2004-05 £9,350
2005-06 £8,251
2006-07 £12,400
2007-08 £12,600
2008-09 £7,330
17. Mr McNulty told me that he had sought to limit his claims under the Additional Costs Allowance for the Harrow property to mortgage interest payments and the council tax. In only two of these years − in 2004-5 and 2005-6 − were claims submitted for sundry bills, utilities and service/maintenance. He had stopped claiming for council tax in April 2008.
18. Mr McNulty said that, as well as overnight stays in pursuance of his parliamentary duties, he used his Harrow property extensively during the day, at weekends and during recess, and often spent time there between various events and functions. He said that his last claim on this residence under the Allowance was in December 2008, and that his overnight use of the property had been considerably less since September/October 2008. Much of the reason for this was his assumption of a new ministerial role in October 2008. Over the Christmas recess he estimated that only four or five overnight stays between October and December 2008 had been for purely parliamentary duties. He had concluded that this level of usage did not reflect good value for money and had decided that he would not claim the allowance from January 2009 onwards. He had never claimed for an office in the Harrow property under the Incidental Expenses Provision because he had excellent office provision elsewhere in the constituency.
19. Mr McNulty believed that his use of the Harrow property had been entirely compliant with the rules of the House, and that there was no subsidy from public funds to his parents arising from their use of the property. He had been advised that there was no rule
6 Mr McNulty sent me on 26 August a table identifying separately the sums he had repaid in 2009 in respect of overclaims for mortgage interest and council tax: see WE23.
Mr Tony McNulty 17
preventing the use of a second home by other family members. In recognition of the potential perception of benefit, he had sought to keep his claims to a minimum. He believed his claims had ranged from 31% to 56% of the maximum permitted under the ACA. He noted that “beyond mortgage interest and council tax (which I stopped claiming in April 2008), I believe that the pattern of claims has complied with the rules concerning value for money.” He and his parents had met from their own resources all the other running costs for the property, which he could have claimed from the ACA but had not. He said that he had “never sought to maximise my claims, or use the allowance system for any financial advantage.”
20. Having considered Mr McNulty’s reply, I decided that I needed further information about his overnight stays in his Harrow property. I wrote to him on 23 April7 and asked for his best estimates, for each of the seven years in question, of the nights he had spent there for the purposes of his parliamentary duties, together with any factual corroboration of that information. In that letter I also asked Mr McNulty why it was necessary for him to spend one or two nights a week in his constituency home for parliamentary duties when his main home was a comparatively short distance from his constituency.
21. I received Mr McNulty’s reply on 11 May.8 With his letter, he provided me with a confidential memorandum, which gave a summary for each year from 2004-05 to 2007-08 of the time he spent away from home on ministerial or political business or on holiday; his best estimate of the nights spent in his constituency home for each of the years concerned, and his constituency schedules and ministerial diaries so that his activities could be corroborated.
22. Mr McNulty said that his constituency in Harrow was approximately 10 or 11 miles from his main home in Hammersmith and that the journey by car could take anything from 45 minutes to “more like an hour and a half or longer”. Constituency events on a Friday, Saturday or Sunday involved others relying on his attendance at the appropriate times, and he had no desire to let them down. If he had duties in the constituency on the following day, he would usually stay in Harrow on the Thursday night to prepare for constituency events, rather than setting out from his main home on the Friday morning. Mr McNulty said, “I am entirely convinced that I am able to do my job as a Member of Parliament much more effectively because I have the ability to stay overnight in my home in the constituency and use it as a base when I need to in pursuit of my parliamentary duties...” The change in his ministerial duties in October 2008 had led to his spending more time on Fridays and at weekends on ministerial work. While his constituency work had continued, he had stayed overnight less and less because of the pressures on his time. Concern about value for money had been central to his decision to cease claiming the ACA.
23. I wrote to Mr McNulty on 12 May, thanking him for the information he had provided and reminding him that I also needed figures for overnight stays in 2002-03, 2003-04 and
7 WE 6 8 WE 7
18 Mr Tony McNulty
2008-09 to enable me to work through all the documents.9 Mr McNulty wrote back to me, in a letter received on 20 May, with further information covering the years 2002-03 (based on an office diary), 2003-04 (based on his constituency schedule), and 2008-09 (based on his constituency schedule and his ministerial diary).10 I examined the diaries which Mr McNulty had provided by way of corroboration, which highlighted the numbers of evening engagements or morning engagements (or both) which he had undertaken in his constituency.
24. On 11 June I wrote to Mr McNulty to tell him that I had now completed work on his diaries and other material. I attached a table showing his own estimate of his overnight stays in his constituency home along with the figures I had produced and some questions related to these.11 I noted that the figures were indicative rather than conclusive, because the diaries did not specifically identify where Mr McNulty had spent the nights, and because the distance between his two homes was such that it would have been possible for him to have returned to his main home had he wished to do so. In the light of this I suggested that it would be helpful if I could have any witness evidence about the general patterns of his overnight stays in the constituency.
25. I also asked Mr McNulty when, and in what circumstances, his parents had come to occupy the property; whether his parents had any other property where they stayed or whether that was their sole residence; whether they met any of the running costs of the property and, if so, how these were apportioned, and how the arrangement worked in practice – including any entertaining or other meetings Mr McNulty had at the house
26. In his reply of 23 June12 Mr McNulty said that he was perplexed by my request for witness evidence. He said: “I would be astonished if any of my neighbours could either challenge or corroborate my private comings and goings with any validity or anything approaching accuracy.” He did not know the retired newsagent who had been quoted in the Daily Mail. Mr McNulty said that his parents were the only people who could testify with absolute certainty to the pattern of his overnight stays, but even they would not be able to attest to the balance between personal, political and parliamentary uses of the property. He suggested some small amendments to my figures for the number of nights he had spent in his constituency home.
27. In his letter Mr McNulty also said that, at his request, his parents had moved into the Harrow property soon after he bought it, as he felt the house would be more secure with someone resident at all times. This was his parents’ sole residence. His parents generally paid for all the running costs and basic utility bills except for the mortgage and council tax. Larger outlays such as refurbishment, decoration or improvements to the property were shared between Mr McNulty and his parents, and not claimed on the ACA, as he would
9 WE 8 10 WE 9 11 WE 10 12 WE 11
Mr Tony McNulty 19
have been entitled to do under the rules. For example, in 2008-09 he had claimed £7,330 for mortgage interest from the period from April 2008 until he ceased claiming in December 2008. The total mortgage payments had been £11,282. He had paid the remaining £3,952, and the council tax of about £1,800, himself. The total cost of the house in that year had been about £17,082, of which £9,752 had been met by either him or his parents.13 He said he used the second home when he needed to for parliamentary business both day and night, and meetings required in pursuit of his parliamentary duties were generally held at his constituency office. He regarded his second home as principally a private home and a base from which he could do his job better as an MP.
28. Having considered Mr McNulty’s letter, I decided it would be helpful if possible to see if I could secure some evidence from the neighbour identified in the Daily Mail report of 23 March14. I therefore wrote on 25 June15 to the retired newsagent who had been quoted in that newspaper. Despite a reminder on 23 July I received no response. I wrote finally to him on 12 August to tell him that that I had to assume that he was not able to help me with my inquiry and that I would now proceed without his evidence.
29. Meanwhile on 29 June I had written to Mr McNulty 16 attaching what I hoped was an agreed summary estimate of the number of nights he had spent in his constituency home, reflecting the various pieces of information I had received from him. 17 The table is reproduced in part below:
Table A: Estimates of nights spent in constituency, 2002-03 to 2008-09
Year Member's original estimate of nights Amended estimate of number of nights spent in constituency spent in constituency
2002-03 52 52
2003-04 69 66
2004-05 66 63
2005-06 59 55
2006-07 67 65
2007-08 60 59
2008-09 26 33
Totals 399 393
Note: The figures for 2008-09 are derived from the nine months from April to December.
13 Mr McNulty set out these figures again, with one small change, in his letter of 28 July: see WE 20. 14 WE 3 15 WE 12 16 WE 13 17 WE 14
20 Mr Tony McNulty
30. I noted also that I believed I was now in a position to seek the views of the Department of Resources. Mr McNulty wrote back to me on 8 July, agreeing that my summary estimate of 29 June was a reasonable representation of his overnight stays. He also expressed surprise that I had not previously consulted the Department of Resources in this matter. 18 I wrote back to him on 9 July explaining that I was independent of the Department and needed to come to my own views. 19 I thought it reasonable for me to seek information from them at any stage, and to seek their comments and advice which I normally did, as on this occasion, towards the end of my inquiry.
31. I had written to the Director of Operations in the Department of Resources on 29 June.20 I asked what contacts Departmental staff had had with Mr McNulty about the arrangements for his Harrow home, and in particular about the use by Mr McNulty’s parents of the house as their sole residence, and the advice they had given; whether he considered that it was within the rules of House at the time for a Member to make claims for a constituency property which was also the sole residence of another person, in this case his parents; and if so, whether he considered, in the light of the evidence now available, that the nature and size of the claims which Mr McNulty made were within the rules of the House, given that the home was his parents’ sole residence. In my letter I also sought the Department of Resources’ view on one further point on the interpretation of the rules. Mr McNulty’s main home in Hammersmith was less than 20 miles from his constituency home in Harrow. The Green Book rules defined overnight stays in a Member’s constituency home, for the purpose of the ACA, as being overnight stays within 20 miles of the Member’s constituency boundary. I asked the Director of Operations whether, on one reading of that rule, it could be held that Mr McNulty’s Hammersmith home was also his constituency home for ACA purposes, and that therefore the claims on his Harrow home were not permissible. I recognised that this raised wider issues, and might be difficult to align with Section 3.2.1 of the Green Book, which allowed Members from outer London constituencies the choice of opting to receive the ACA instead of the London Supplement.
32. The Director of Strategic Projects replied on 21 July.21 He said the Department had no records of its discussions with Mr McNulty about the arrangements for his Harrow home, although this did not mean that such discussions had not taken place. Although the Green Books which were in force from 2003 to 2009 “strongly advised” Members against renting out a property on which ACA was claimed, if no rent was paid to the Member – as it was not in Mr McNulty’s case – there was no rule which governed who might or might not live in, or stay at, a home on which ACA was claimed. In those circumstances he did not believe that Mr McNulty’s parents’ occupancy of the house was outwith the rules.
33. The Director noted that Mr McNulty was correct in saying that there was “no minimum number of nights which a Member must spend in his or her additional home for it
18 WE 16 19 WE 17 20 WE 15 21 WE 18
Mr Tony McNulty 21
to qualify as an [ACA] home.” As far as value for money was concerned, the Director’s calculations based on Mr McNulty’s ACA claims indicated that the cost to the ACA of his Harrow home was around £185 per night, which did not appear to him to be excessive. However, the Director added that the Green Book made it clear that Members could not claim under the ACA for the living costs of anyone other than themselves. It appeared that Mr McNulty might not have abated the costs which he charged to the House in respect of his parents’ occupation of the property. In the Director’s view, it would have been appropriate for him to have done so in respect of “sundry bills, utilities and service/maintenance, and also of council tax if Mr McNulty would otherwise have been eligible for single occupancy discount”. On the other hand the Director considered that the question of mortgage interest was different, since its level was unaffected by Mr McNulty’s parents’ occupation of the house. He noted, however, that it appeared from Mr McNulty’s letter of 23 June that he might not in fact have charged the whole cost of mortgage interest to his ACA.
34. In his letter, the Director of Strategic Projects agreed that the drafting of that section of the previous edition of the Green Book which set out the position on overnight stays was not ideal. “Essentially,” he said, “ the rule was (and is) that eligible Members could claim for overnight stays either at a home within 20 miles of the Palace of Westminster, or at a home within the constituency (or within 20 miles of the constituency boundary). Under this rule, many Members could in theory have houses which simultaneously fulfilled both location criteria.”
35. I wrote to Mr McNulty on 22 July22 enclosing copies of my correspondence with the Department of Resources, drawing his attention to the Department’s views that the occupancy of the house by his parents was not outside the rules, that his claims did not appear to be excessive, but that some of his claims ought to have been abated. I also drew his attention to the Department’s reference to the statement in the Green Book that living costs for anyone else could not be claimed from the ACA. I said that I would need now to come to my own view on these matters. But I would first welcome any comments he might wish to make. I also referred to the Department’s suggestion that Mr McNulty might not have charged the whole cost of his mortgage interest, and to the figure for 2008-09 which Mr McNulty had given in his letter of 23 June. I asked, for each of the previous six years, to know the mortgage interest charged to him for each year, what part of that interest he had charged against his ACA, what the council tax had been, and whether he had charged the full cost of that tax against his ACA.
36. Mr McNulty replied on 28 July.23 He noted that the Department had confirmed that his parents’ occupancy of his house in Harrow complied with the rules, and that his allowance claims were far from excessive. He said that since he had rarely claimed against the ACA for anything except mortgage interest and council tax, he would argue that the overall costs had been abated to take account of his parents’ presence in the house. He had deliberately
22 WE 19 23 WE 20
22 Mr Tony McNulty
sought to abate all other costs to reflect the letter and spirit of paragraph 1.14.1 of the July 2006 Green Book. He had claimed for utilities, services and maintenance in only two of the previous five years: in 2004-05 he had claimed £350 and in 2005-06 £550, when the total costs had been (at a conservative estimate) at least £1,200 each year for bills and £1,000 for service and maintenance. As a married man he would not have claimed the single person discount on council tax even if his parents had not lived there. The abatement he had made of other costs in 2004-05 and 2005-06 more than reflected the value of the single person discount (which had risen from £389.65 in 2004-05 to £446.83 in 2007-08). He had claimed from the ACA for the full amount of council tax for each year up to 2007-08, but had made no claim in 2008-09. He had not claimed for the full amount of mortgage interest. He had borrowed an additional sum of £30,000 in 2003, that he had always maintained should not be claimed through the ACA, even though it was technically possible under the rules to have made claims for some of it. In his letter Mr McNulty provided a series of tables setting out his calculations of total running costs and the proportion funded by the ACA in the years from 2004-05 to 2008-09.
37. I wrote to Mr McNulty on 30 July24 seeking clarification as to the nature of the additional sum of £30,000 borrowed on the mortgage secured on the house in 2003. On 5 August I wrote again to Mr McNulty, asking why there was a difference between the figures for his ACA claims given in his letters of 21 April and 28 July.25
38. On 26 August Mr McNulty wrote back to me in response to my letters of 30 July and 5 August, explaining that the extra £30,000 borrowed in 2003 was an extension to the mortgage and confirming that the costs of this mortgage were paid for out of his personal funds.26 He attached a table explaining the differences between the figures for ACA claims in his letters of 21 April and 28 July. He noted that he had inadvertently claimed for 12 rather than ten months of council tax in the years 2004-05, 2006-07 and 2007-08 and on discovering this he had immediately paid this back in full.27 After discovering this mistake, he had wanted to make sure that there were no other errors and took the details of his claims to his accountants. They checked the mortgage interest claims in detail and discovered that he had made errors of assessment (some under and some over) in some of the years involved. He repaid the over-claim of £2,600 in full as soon as it was identified. He enclosed a table setting out the position as regards his overclaims and repayments, and his claims once these errors had been rectified.
39. I arranged to interview Mr McNulty to discuss the issues arising out of this inquiry. In the course of preparing for that interview, and subsequently, Mr McNulty agreed the following table (Table B) summarising the estimated costs of running his Harrow home, and the proportion of these costs met from his parliamentary allowances. The figures did
24 WE 21 25 WE 22 26 WE 23 27 The sum repaid was £444.31.
Mr Tony McNulty 23
not reflect the repayments Mr McNulty made in 2009 for the overpayments he had identified.
Table B: ACA Claims by Rt Hon Tony McNulty MP for his Harrow property as percentage of running costs eligible for reimbursement from ACA
A. Total B. Council C.Bills D.Services E: Total F: Total % of total eligible Tax (estimate) (estimate) eligible claimed eligible mortgage running from ACA running costs interest costs costs claimed from incurred (A+B+C+D) ACA (ie col F as % of col E) 2004-05 £6,363.29 £1,558.60 £1,200.00 £1,000.00 £10,121.89 £9,350.00 92% 2005-06 £8,679.00 £1,583.88 £1,200.00 £1,000.00 £12,462.88 £8,251.00 66% 2006-07 £10,419.55 £1,657.09 £2,500.00 £1,500.00 £16,076.64 £12,400.00 77% 2007-08 £11,769.88 £1,739.09 £2,500.00 £1,500.00 £17,508.97 £12,600.00 72% 2008-09 £10,229.40 £1,787.34 £2,500.00 £1,500.00 £16,016.74 £7,330.00 46%
TOTALS £47,461.12 £8,326.00 £9,900.00 £6,500.00 £72,187.12 £49,931.00 69%
Mr McNulty made no claims for ACA for the Harrow property after December 2008
“Eligible mortgage interest costs” refers to costs which exclude the interest on the additional mortgage Mr McNulty took out in 2003
These figures exclude the repayments for council tax and mortgage interest which Mr McNulty made in 2009. These payments were £2,600 in respect of mortgage overpayments and £444.31 in respect of council tax..
40. When we met on 3 September,28 Mr McNulty said that he had bought the Harrow house in March 1998. For two years before that he had been living with his parents in their house in Eastcote near Harrow, after the end of his first marriage. His wife lived in the marital home, and when it was sold he had used the capital to buy his new Harrow home. He told me: “When my parents had to sell their house they had not much equity which partly prompted me to say ‘Come and stay with me’. ” He had recently become an MP and it was bought as his one and only home. He had spoken to the Fees Office about it and they had said there was no problem.
41. The move to Hammersmith happened gradually. From March 1998 he had needed a “bolthole” when he was up in town. At the time he had known his present wife as a friend and stayed with her at her house in Hammersmith – purchased by her in 1994 – “a couple of times”. By late 1999 he was staying in Hammersmith up to three nights a week. Six or nine months before he married in September 2002, he said that he “was more or less there more than in Harrow”. The Hammersmith home had become his main home for ACA purposes at the end of 2001 or in early 2002. Mr McNulty subsequently confirmed that, from 1998 until identifying Hammersmith as his main home, he had made claims against his ACA for his accommodation there.
28 WE 24
24 Mr Tony McNulty
42. Mr McNulty said that his parents had moved in to his Harrow home in March 1998, “pretty much at the start” of his time there. He was in the process of divorce and it made sense for them to come to stay with him. They had sold their previous house and did not have enough to live on by themselves. The house had substantial living space and was therefore big enough for three people to “rattle around in”. If his parents were there he could cut himself off in the front room to prepare for meetings. He commented that this was “what attracted me to the house”. Security was an issue, he told me. “…I knew I would be spending a long time away from home and I didn’t want to leave the house empty. It is not good for the house or the neighbourhood.” However, security was not the sole reason for these arrangements; he commented: “It is broader than that. It is about family circumstances, what I was comfortable with, what I thought was the right thing to do…”
43. At the start of the arrangement, Mr McNulty said, his parents were not dependent on him. They paid the bills and made a significant contribution. He paid the mortgage but, for example, when the boiler went they shared the cost. Over the ten years, as his parents had worked less and less, they had become to a greater extent dependent on him and the rest of the family.
44. I asked why he had claimed for mortgage interest and council tax, but not in general for other costs. Mr McNulty said: “I was keenly aware of probity issues even ten years ago. I was always clear that I should claim fixed costs and no more. It was what I thought was a fair deal, a notion I had in my head.” In 2004-05 and 2005-06 he had felt he had been at the house enough to warrant claiming for utilities and services. However after 2005-06 he stopped claiming as “It got to the stage when I felt it would be fairer and tidier to claim just mortgage interest and council tax. I decided to make up the difference and to do so without claiming.” He commented that “Overall my approach was to be as parsimonious as possible.” He said that between them, he and his parents had paid for everything except council tax and mortgage interest. The costs were broadly split according to what was needed. To the suggestion that, in hindsight, it would have been helpful to have had a little more formality about the financial arrangements for accommodating his parents, given that he was claiming for the house from the ACA, Mr McNulty replied, “The arrangement worked. In part I felt that I had achieved a sensible split by keeping my claims simple, claiming only for fixed costs. For the early years I claimed only for about 70% of the overall costs. But it wasn’t formalised. Potentially that would have been useful.”
45. He noted that in his letter of 28 July he had said that he had not reduced his council tax claims because he was married. His wife did not spend any appreciable time in the Harrow house. But it did not seem right, for him, as a senior local politician, to claim the discount.
46. I asked whether, at any time after his contact with the Fees Office in 1998, he had felt he needed further discussion with the office about his arrangements. Mr McNulty said “My circumstances did change, but I reflected on the advice that was given to me.” The discussions in 1998 had been around the options open to him, among which were lodging with the woman who later became his wife; possibly in “term time” only. He had of course no idea how his role as an MP was likely to develop. Mr McNulty said he was not sure whether he had told the Fees Office in terms in 1998-99 that his Harrow home would be
Mr Tony McNulty 25
his parents’ permanent home and their sole residence. Mr McNulty noted in his subsequent comments of 15 September that it was “certainly implicit” in his discussions with the Fees Office that the Harrow home would be his parents’ permanent home which they would be sharing. . He commented in the interview “I can say sincerely that I asked myself what would make my role work best. The facility was afforded to us and I asked ‘Do I need that?’”
47. I asked Mr McNulty how his overclaims for mortgage interest and council tax had come about. He said he had been “horrified” to find the “silly mistake” in his ACA claims in respect of mortgage interest and council tax; there had been both under- and over-claims. He had claimed for the interest on his additional loan of £30,000. He noted in his subsequent comments of 15 September that it was possible that he had claimed instead for some capital repayment of the mortgage. He said in the interview that he should have been more careful, continuing “I accept that there was potentially a breach of the rules. But it was technical, it wasn’t deliberate, I was within the maximum I could have claimed overall.” He had repaid the over-claims of his own volition.
48. I asked whether, given that a constituency home was defined as being one within 20 miles of the constituency, he had ever considered serving his constituents from his Hammersmith home. Mr McNulty responded that the implication of my conversation with the Department of Resources had been that no Member within 40 miles of London could or should claim the allowance. However, he said, “…at the time, the allowance was available to outer London Members. I knew the rules and I checked them. I asked myself ‘Will this help me to do my job?’ I took advice. When I read about the 20 mile limit on claiming I took that to pertain to huge constituencies outside London. I like the layered approach we have. Once it was made clear that outer London Members could use the allowance, I availed myself of it.”
49. Mr McNulty said that his expenses for his Harrow home were necessarily incurred because they were used for parliamentary purposes and enabled him to do his job better because of this arrangement. He believed that they were also wholly and exclusively incurred because he had claimed “just fixed costs that would have been incurred anyway.” He or his parents met any other costs. His claims for council tax and mortgage interest would have been incurred “even if there was no one in the house”. The occupancy by his parents of the home had not impeded him in his use of the property. Since there was no income or rental from the arrangement, it was not prohibited by the rules. I asked whether he should have taken account of the full costs of his parents’ occupancy, and not the marginal cost. Mr McNulty took the point, but noted that there had been a significant contribution from him to the costs. They were not marginal costs. He did not believe anything he claimed contradicted the then Green Book. He did not believe that the arrangements could give rise to an accusation that he or someone close to him was obtaining an immediate benefit from public funds. His parents contributed as fully as they could. He noted that “given my pattern of claims I have claimed as little as possible.” He believed he had got the balance right given the rules at the time. His parents were not living there for free, since they made a significant contribution through their services. They helped him with the upkeep, running costs and maintenance. They helped him by being
26 Mr Tony McNulty
housekeepers. “It was a very big contribution, not just financial.” He had made a significant contribution: “I claimed only for mortgage interest and council tax in most years. All my claims were limited to the fixed costs incurred. My parsimony reflected a concern about their accruing a benefit.”
50. Mr McNulty noted that, to reflect his parents’ contribution, he could have “formalised a deduction from the mortgage interest and council tax, only for me to set it against a larger claim for other services.” Mr McNulty recognised that the press coverage could have left him open to the accusation that someone close to him obtained an immediate benefit: “but if people take into account the deductions I have made, my parsimony, the fact that I claimed only for fixed costs, and my parents’ contribution, I don’t think the arrangement transgresses.”
51. Mr McNulty said he had reached his decision to stop claiming in December 2008, when he asked himself the question “Have I stayed enough nights there?” He “started to feel the danger of non-compliance with the rules.” And interest rates meant he could afford not to claim. He made a conscious decision not to carry on and intended to formalise it at the end of the financial year. He wrote to the Department of Resources in April 2009 to do so. He would not claim again, since the House had decided that the allowance would not be available to outer London Members from 2010.
52. Following the interview, I sent a letter to Mr McNulty on 7 September, seeking clarification of one aspect of his arrangements for claims against the Additional Costs Allowance.29 In his letter of 24 March he had said “I established the nature of my arrangements with the Fees Office in 1998-99.” At our interview he had said that he had bought his Harrow home in 1998, that his parents moved in soon afterwards, that it was his “one and only” home [and thus ineligible for claims against the allowances]; and that Hammersmith did not become his main home until “the end of 2001 or early 2002”. I said in my letter that it would be helpful if he could therefore confirm that the discussions which he had with the Fees Office in 1998-99 were about the options open to him, and that he did not implement any of these options or make claims against the Additional Costs Allowance until he established his main home in Hammersmith. If this was the case, it would be helpful to know what action he took in the light of the 1998-99 discussions before he changed his arrangements in 2001 or 2002.
53. Mr McNulty replied on 15 September.30 He said that his discussion with the Fees Office in 1998 had covered all the accommodation options that were available to him, including renting or buying in inner London, the balance in terms of nights between any main home and second home, and the position of his parents sharing. He had been “absolutely clear” with the Fees Office that he was intending to rent in inner London to assist him in his parliamentary duties. Subsequently he had made claims against the ACA for Hammersmith as his second home since it was where he spent nights during the week
29 WE 25 30 WE 26
Mr Tony McNulty 27
in pursuit of his parliamentary duties. This had continued until Hammersmith became his main home for ACA purposes in 2001. He also confirmed that throughout the period covered by the complaint, 2002-2009, Hammersmith had been his main home.
Findings of Fact
54. Mr McNulty was elected Member for Harrow East in 1997. About a year before that he had moved out of his marital home and taken up residence with his parents in their home in Eastcote near Harrow. Using the proceeds of the sale of his marital home he purchased a property in Harrow in March 1998. His parents sold their Eastcote house and, at Mr McNulty’s suggestion, moved in with Mr McNulty at his Harrow home. Since March 1998 the Harrow home has been their sole residence. The mortgage on the property is solely in his name. His parents have paid no rent.
55. From around March 1998 onwards, Mr McNulty stayed an increasing number of nights in the Hammersmith home of a friend, who was later to become his wife. At that stage his main home was in Harrow and he made claims against the ACA for the costs of his accommodation in Hammersmith. By late 1999 Mr McNulty was spending up to three nights a week at the Hammersmith house, and by September 2002 he was staying there more than he was staying in Harrow. The Hammersmith house, 10-11 miles from his Harrow property, became his main home for ACA purposes at the end of 2001 or in early 2002. The Harrow home then became his second home, and he claimed against the ACA for its costs from that time until December 2008. For the six financial years from 2002-03 to 2007-08, the best estimate is that Mr McNulty spent between 52 and 66 nights a year in his Harrow home when on parliamentary duties. The number fell to 33 nights for the 9 months from April to December 2008.
56. Mr McNulty claimed against the ACA for the Harrow house for the mortgage interest on the property – excluding the interest on an additional loan taken out in 2003 – and (up to April 08) for the full council tax. He also made claims in respect of utilities, services and maintenance in 2004-05 (£350) and in 2005-06 (£550). For the six years from 2002-03 to 2007-08 Mr McNulty claimed between £8,251 and £12,600 a year against his ACA. This represented between 66% and 92% of the total estimated running costs of the Harrow house. These costs comprised mortgage interest, council tax, bills and services, but excluded the interest on the additional mortgage Mr McNulty took out in 2003. For the nine months from April to December 2008, Mr McNulty claimed £7,330, representing 46% of the estimated total running costs for that year. The remaining running costs for the property were borne by him and his parents.
57. Mr McNulty’s evidence was that he decided to cease making ACA claims for his constituency property after December 2008, because, from September/October 2008 onwards, his overnight use of the property had decreased as a consequence of his new ministerial role. His evidence is that he intended to inform the Department of Resources of this decision at the end of the financial year in March 2009.
28 Mr Tony McNulty
58. In April/May 2009, Mr McNulty reviewed his ACA claims and noted that he had claimed for twelve rather than ten months of full council tax in the years 2004-05, 2006-07 and 2007-08. He made an immediate repayment of £444.31 in respect of the overclaimed sum. Following this, he reviewed past claims and made a further repayment of £2,600 in respect of overclaims of mortgage interest for 2004-05 and 2006-07.
59. The Department of Resources consider that since Mr McNulty’s parents were not paying rent, their occupation of the Harrow property was not outwith the rules: there was no rule which governed who might or might not live in a home on which ACA was claimed. But it appeared to them that Mr McNulty might not have abated the costs of his parents’ occupation of the property. In their view, he should have abated these costs, except in relation to mortgage interest, which was not affected by his parents’ occupancy.
60. Mr McNulty considers that his claims did in effect take account of his parents’ use of the house since for most years he claimed only for mortgage interest costs and, up to April 2008, for council tax. He accepts that he overclaimed for some mortgage and council tax costs and he has repaid these sums. He considers otherwise that his arrangements were within the rules as they stood at the time, that his claims were parsimonious, that they were necessary for his parliamentary duties, that he and his parents contributed significantly to the other costs of this home, and that his parents provided valuable support to him in his work.
Standard of Proof
61. I have adopted the civil standard of proof in the course of this inquiry, the balance of probabilities. Most of the facts are not in dispute. In the absence of firm independent evidence, it has been necessary, however, to form a judgement in establishing the facts in relation to Mr McNulty’s overnight stays. I think it is reasonable that the standard of proof I have adopted is the normal civil standard, the balance of probabilities.
Conclusions
62. The principal issue which I am to determine is whether Mr McNulty was within the rules in establishing his parents rent-free in a constituency home on which he claimed parliamentary allowances.
63. In coming to my conclusions, I have considered the following issues:
— Was Mr McNulty entitled to claim for a second home in his constituency?
— Were the arrangements within the rules of the House?
Was Mr McNulty entitled to claim for a second home in his constituency?
64. Mr McNulty’s main home was in Hammersmith. It is within 20 miles both of the Palace of Westminster and of his constituency. Paragraph 3.11.1. of the Green Book provides that: “for the purpose of the ACA, overnight stays within 20 miles of your
Mr Tony McNulty 29
constituency boundary are regarded as overnight stays within your constituency.” On this definition, it could be argued that Mr McNulty was staying overnight in his constituency when he was staying in his main home in Hammersmith. In that case, it could be argued, he should not have claimed for a second home in his constituency since he already had one.
65. But that is not how in practice the Rule has been interpreted. It has been used to identify whether a Member can claim for a second home, either in the constituency or in London, where they have already established the location of their main home, which may be anywhere in the United Kingdom. While the drafting of the Rule is not ideal since it is at best ambiguous, the way it has been interpreted seems to me a reasonable reflection of the policy which, at the time, the House of Commons had agreed.
66. But the Member must still establish that a second home is needed in order to perform their parliamentary duties. I consider it right that Members should be given a good deal of discretion in deciding how best to perform those duties, including the duties in their constituency. It would no doubt have been possible for Mr McNulty to have undertaken most, at least, of his constituency duties in Harrow from his Hammersmith base if he had been prepared to have undertaken regular late night or early morning journeys and to have allowed plenty of time for traffic hold-ups. But I consider that it was reasonable for Mr McNulty to decide not to do this and to decide instead that he needed a residence actually in his constituency where he could stay overnight to enable him to carry out his constituency duties in the way he thought fit.
67. I conclude that Mr McNulty was within the rules in establishing a second home within his constituency.
Were Mr McNulty’s arrangements within the rules of the House?
68. The questions I have considered in relation to the relevant rules are as follows:
— Were the expenses which Mr McNulty claimed “wholly, exclusively and necessarily incurred” by Mr McNulty for the purpose of performing his parliamentary duties?
— Did the claims include living costs for anyone other than Mr McNulty?
— Did the claims avoid any arrangement which might give rise to an accusation that Mr McNulty or someone close to him obtained an immediate benefit or subsidy from public funds?
Were the expenses wholly, exclusively and necessarily incurred for the purpose of performing parliamentary duties?
69. Mr McNulty claimed over the five financial years from 2004-05 to 2008-09 the full interest on his mortgage. (He excluded an additional mortgage loan secured on the property in 2003.) He claimed the full council tax for all but the last year. He claimed for certain of his utilities, maintenance and other bills for the first two years, 2004-05 and 2005-06.
30 Mr Tony McNulty
70. The question is whether these expenses were wholly, exclusively and necessarily incurred by Mr McNulty for the purpose of performing his parliamentary duties.
71. By far the largest proportion of Mr McNulty’s claims was in respect of his mortgage interest. I consider those payments were necessary in order to provide him with a home in his constituency from which he could serve his constituents. I note that he took an extra mortgage out in 2003 of £30,000, but I accept Mr McNulty’s evidence that he made no claims – or at least intended to make no claims – for the interest on that mortgage. In checking his claims very recently, Mr McNulty identified some over-claims (as well as under-claims) of mortgage interest caused by the difficulty of separating out the interest on his additional loan. Alternatively he may have wrongly claimed for an element of the capital repayment. Either way, Mr McNulty was in breach of the rules in making these over-claims, but as soon as he identified the problem, he paid back the sums involved (£2,600).
72. It may be that some of the utilities and other bills claimed for in 2004-05 and 2005-06 were incurred through Mr McNulty’s parents’ use of the home. It is not possible to say what that sum might have been, but Mr McNulty’s evidence is that he charged no more than 20 per cent of his bills for those years. On this basis, his claim for utilities and other bills over that period appear reasonable.
73. Mr McNulty was also in breach of the rules in claiming for twelve months of council tax payments each year, when the payments were spread over only ten months. This over- claiming amounted to £444.31. Mr McNulty has paid back this sum to the House authorities. I also consider that Mr McNulty should not have claimed the full council tax because, had his parents not been in the home, he would have qualified for a discount. It was open to Mr McNulty, of course, to pay the full council tax if he wished to do so, and not to have re-claimed the full sum from parliamentary expenses. My conclusion, therefore, is that, with the exception of some of his claims for the council tax charge on the home, and some mistaken overclaiming of mortgage interest, Mr McNulty’s expenses claims for his constituency property were necessarily incurred.
74. But the rule requires not only that the expenditure should be necessary – it requires that it should also be wholly and exclusively incurred for the purpose of performing a Member’s parliamentary duties. That part of the rule needs to be considered in the context of other rules relating to a Member’s claims under the Additional Costs Allowance, namely that the Member should not claim for the living costs for anyone but themselves; and that a Member or someone close to them should not obtain an immediate benefit or subsidy from public funds. If either of those rules is breached, then, in my judgement, the expenditure is not wholly and exclusively for a Member’s parliamentary duties. It is to those two rules I now turn.
Did he claim for living costs for anyone other than himself?
75. The Department advised me that, in accordance with the rules, Mr McNulty should have abated his claims to reflect his parents’ living costs. They exclude mortgage interest from those living costs. Mr McNulty believed he had sought to abate all costs other than
Mr Tony McNulty 31
mortgage interest and council tax. The evidence does not allow me to conclude that Mr McNulty abated these costs in any planned or premeditated way. But I accept that the claims he made had that effect: he did not generally claim for his utilities or for repairs and maintenance.
76. I consider, however, that the Department has offered too narrow an interpretation of the living costs rule. Mortgage interest, like rent, represents part of the cost of a person’s accommodation. The cost of that accommodation is, in my view, a living cost. For most people, the cost of putting a roof over their heads forms a significant part of their outgoings and, in any normal interpretation of the term, would be seen as comprising a significant part of their living costs. I consider that the normal interpretation should be applied to Members for the operation of this rule.
77. Mr McNulty charged no rent to his parents for their use of the property. Neither he nor they made any personal contribution to meeting the mortgage interest on the property (excluding the additional mortgage which Mr McNulty took out in 2003). As a result, Mr McNulty did not fully reflect the living costs of his parents arising from their use of the property as their sole residence. To have done so, Mr McNulty should have had to have made a significant reduction in his mortgage interest claims.
78. It is true that Mr McNulty did not usually claim any of the running costs of the property, as he could have done. Mr McNulty has argued that this, in effect, offset his parents’ mortgage contribution. But, with the exception of 2008-09, Mr McNulty claimed for between 66 per cent and 90 per cent of the estimated overall cost of the property. Even in the final year, when Mr McNulty stopped claiming three months early, the ACA met nearly half the cost. That does not in my judgement represent a fair apportionment between his parents’ living costs and his own.
79. In any event, this was an informal and undocumented arrangement. It was not in my view an acceptable basis on which to claim public money. It provided no audit trail for the respective use of the property by him and his parents. It avoided the spirit of the Green Book rule that a Member should lodge tenancy agreements with the House authorities. Mr McNulty has recognised that a more formal arrangement which reflected the cost of his parents’ use of the house, including the mortgage cost, would have been desirable. I agree. By not fully and transparently excluding his parents’ living costs from his claims, I conclude that Mr McNulty was in breach of the rules of the House by claiming for the living costs of someone other than himself.
Was there an immediate benefit to Mr McNulty and his parents?
80. The Green Book of July 2006 introduced an additional rule which remained in force until April 2009. It required Members to avoid any arrangement which could give rise to an accusation that they or someone close to them was receiving an immediate benefit or subsidy from public funds. If my interpretation of the living costs rule is accepted, then I consider this was a clarification of that rule rather than a departure from the previous Green Book. It also, in my judgement, clarified the overall requirement that expenses should be wholly and exclusively as well as necessarily incurred. While, therefore, the
32 Mr Tony McNulty
specific rule did not come into force until July 2006, the principle was, I believe, well established by earlier rules.
81. For the reasons I have given in the previous section, I consider it incontrovertible that the arrangement Mr McNulty had made in accommodating his parents in his constituency home as their sole residence provided an immediate benefit or subsidy from public funds to him and through him to his parents. I consider it impossible to argue that someone has not received an immediate benefit or subsidy from public funds if they live in a property whose mortgage interest is substantially met from public funds. Neither Mr McNulty nor his parents paid the market rate for his parents’ accommodation. Meeting the full running costs — but not the fixed costs — of the property from their own resources was neither sufficient nor sufficiently transparent. I accept that his parents provided Mr McNulty’s home with some security and that they were able to offer him company and some housekeeping. But this was not formalised and in my judgement was a by product of their residence there. It did not justify their rent free status. I conclude that Mr McNulty’s parents received an immediate benefit from the arrangement. It was a benefit specifically prohibited by Section 3.3.2 of the Green Book Rules of July 2006 and against the spirit of the previous rules.
82. The rule is more wide ranging than simply requiring a Member not to obtain an immediate benefit or subsidy from public funds. It is an injunction to avoid any arrangement which may give rise to an “accusation” that the Member or someone close to them is obtaining such a benefit. It would be unreasonable to suggest that any Member who is subject to any such accusation, however unsubstantiated, would fall foul of this rule. But a Member whose arrangements would permit such a credible accusation to be made would, in my judgement, be in breach of the rule.
83. In my view, Mr McNulty’s arrangements exposed him to just such a credible allegation and, as a result, it had the sort of outcome the rule was no doubt intended to avoid— damaging both the Member’s reputation and the standing of the House. I conclude, therefore, that Mr McNulty was in breach of the rules of the House in respect of his arrangements for accommodating his parents in his constituency home because those arrangements provided an immediate benefit or subsidy from public funds to him, and through him to his parents, because he did not avoid an arrangement which could give rise to a credible accusation that he or someone close to him was obtaining such a benefit.
Related issues
84. I recognise my conclusion is at odds with the advice I received from the Department of Resources. In my judgement, however, they have not given sufficient weight to the implications of the overall requirement that expenses should be wholly, exclusively and necessarily incurred, and they have too narrowly interpreted the provision excluding others’ living costs.
85. I accept that Mr McNulty had a discussion with the Fees Office in 1998-99. There is no record of that discussion and it took place at least two years before Mr McNulty started to
Mr Tony McNulty 33
claim for his Harrow house. I have no reason, however, to believe that the Department raised any objection to the idea of his parents living in his Harrow home while he claimed against the ACA. I consider it unwise of Mr McNulty to have put so much reliance on a conversation about options he was not to realise for some years. Nevertheless, given the interpretation the Department has made of the rules in this current case, it is unlikely they would have advised against the arrangement which he finally made, and that needs to be given some weight in considering Mr McNulty’s actions in this case.
86. It might be argued that the rules I have identified should not apply to parents who are dependent on a Member. After all, a Member’s partner and a Member’s children are able to share the home for which a Member claims the Additional Cost Allowance. But the relationship between an adult and their dependent child, and between them and a dependent adult relative, is not the same, important though those responsibilities are. It does not, in my judgement, carry with it an expectation that dependent parents should be able to share a property funded in whole or in part from public funds without at least the full value of that benefit being reflected in the Member’s claims.
87. Mr McNulty’s evidence was that he did take some account of his parents’ costs. But the apportionment of costs was at best a haphazard arrangement. It varied year on year. They lived there rent-free and paid no council tax. There was no clear principle established. Given that his parents were living in a home on which claims were being made from parliamentary allowances, Mr McNulty would have been wise to have established a more formal arrangement with them, setting out in writing the way the costs of living in the property were to be apportioned. Had he done so, he might himself have identified much earlier the unsatisfactory nature of the arrangement.
88. It is fair to ask what options were available to Mr McNulty. The first and perhaps the simplest would have been not to have accommodated his parents in his parliamentary- funded second home, but to have made alternative arrangements with them for their accommodation. I recognise why Mr McNulty decided to continue the arrangement of sharing the house which he had started before he became a Member of Parliament: it suited his parents and it was convenient to him to have his parents living there. But it exposed him to the risk which eventually materialised and which he would have been well-advised to have acted to avoid.
89. The second option, therefore, would have been to have made no claims on his second home – which is the conclusion Mr McNulty reached at the end of 2008.
90. A third option might have been to have charged his parents an actual or notional market rent and to have made clear arrangements for the proper apportionment of their other costs. Under the Rules, Members are “strongly advised to avoid sub-letting or renting out any part of a property” for which they claim the Additional Cost Allowance [Rule 3.6.1]. But under the rules as they were in the period under consideration, it was not completely out of the question. The rules made provision for such arrangements. They provided that if a Member did sub-let or rent out a portion of their property, then they had to produce to the Department a copy of the relevant Agreement [Rule 3.8.1]. And a later
34 Mr Tony McNulty
Rule makes clear that rental or mortgage for any part of the property occupied by “a lodger, paying guest etc” is not an allowable expense unless the rent received is offset against the Member’s claim [Rule 3.14.1].
91. Mr McNulty would have been well-advised to have made alternative arrangements. But if he had decided that his parents needed to be accommodated in his constituency home, then it would have been possible for him to have charged them a market rent, and to have drawn up and lodged with the Department a formal Agreement. Whether he or they met the cost would then be a matter for them. He would also have been well-advised to have consulted the Department in advance and to have made clear on the record why he was establishing such an arrangement.
92. I should finally record that Mr McNulty has been open and full in the assistance he gave me with this inquiry. He has himself identified and immediately paid back some over- payments which he claimed. He has consistently claimed significantly below the maximum allowed under the Additional Costs Allowance. And he appears in 1998-99 to have discussed his options with the Fees Office, who did not raise any difficulties. Nevertheless, I believe that he failed to identify the impact that his parents’ use of his constituency house as their sole residence should have had on his ACA claims. That was a mistake. And it was a mistake which led to him being in breach of the rules of the House.
Overall conclusion
93. My conclusion, therefore, is that Mr McNulty was within the Rules in establishing and claiming against parliamentary allowances for his constituency home in Harrow. He was in breach of the rules in some overclaims of mortgage interest and council tax. And he was in breach of the rules in not offsetting all the living costs of his parents who lived there as their sole residence, including their rental costs or equivalent, in the claims he made for his Harrow property. As a result, in my judgement, Mr McNulty and his parents obtained a benefit from parliamentary funds to which he was not entitled, and he left himself open to this complaint being made. In that respect, I uphold this complaint.
14 October 2009 John Lyon CB
Mr Tony McNulty 35
Written evidence received by the Parliamentary Commissioner for Standards
1. Extract from article in the Mail on Sunday, published 22 March 2009
ANOTHER Labour Minister has been caught out in an expenses scandal after effectively admitting he had been wrong to claim £60,000 of taxpayers' money for a property which is his parents' main home - not his.
Employment Minister Tony McNulty performed a dramatic U-turn and announced he had stopped claiming the controversial MPs' second-home allowance after being challenged by the Mail on Sunday.
Even more astonishingly, he said that 132 MPs who, like him, live within 60 miles of Westminster should be banned from getting the £24,000-a-year handout.
Mr McNulty and his wife, chief schools inspector Christine Gilbert, have a combined annual income of a third of a million pounds and between them own two London homes worth £1.2million.
They live together in a house she owns just three miles from Westminster. Yet he has been claiming up to £14,000 a year in parliamentary expenses to help pay for the second house in Harrow where his parents live, 11 miles from the Commons.
The MP has been able to obtain the money because the house he owns is in his Harrow constituency and so qualifies him for the second home allowance. Initially, when Mr McNulty was approached by this newspaper on Friday he pointed out: “It is all within the rules.”
But later, he changed his tune. When it was put to him, “Do you accept it all looks very odd?”, he replied: “I do.”
He then compared his own unconvincing defence with that made by Nazi war criminals at the Nuremberg trials, who said they were “only obeying orders”.
“It's not against the rules - though I suppose you might say that is the Nuremberg defence,” he observed.
He then suddenly announced that he had decided to stop claiming the allowance, which he has benefited from ever since becoming an MP in 1997. He said he had “reflected” on the issue and stopped claiming the grant, officially called the Additional Costs Allowance (ACA), in January.
Asked if he had informed anyone in authority of his decision, either at the Commons or in the Labour Party, he replied: “No, no one.”
The only person he had told was his wife, he said. He was adamant that it was not a spur-of-the-moment decision forced on him by this newspaper's investigation.
As if to emphasise how much he regretted his actions, Mr McNulty, who is also Minister for London and tipped to run against Boris Johnson for London Mayor in 2012, made an impromptu call for a major purge of MPs' expenses.
He said those who live within 60 miles of the capital should be forced to commute every day like any other worker, and lose their second-home allowance. Currently 157 MPs live within that radius. Twenty-six Inner London MPs already cannot claim the ACA - worth up to £24,000 a year - and of the remaining 132, 105 do claim. Mr McNulty's proposal could save taxpayers about £2million a year.
[ … ]
36 Mr Tony McNulty
This is how Mr McNulty has cashed in on the ACA. Shortly after becoming Harrow East MP in 1997, he bought a house in Harrow, which is now worth an estimated £300,000.
He divorced his first wife, fellow Labour activist […] and moved into the house with his parents, […]. By 2001, he had moved to Hammersmith to live with former headteacher Christine Gilbert. Ms Gilbert, also a divorcee, had bought the house - now worth about £900,000 - in 1994.
The couple married in September 2002. On their wedding certificate, both gave their address as the Hammersmith house, although in a Commons debate on data protection in 2005, Mr McNulty appeared to suggest his main home was in Harrow.
“I have no copyright on ‘Tony McNulty’.” he said. “I have no copyright on November 3, 1958 [his birthday]. I have no copyright on . . . [he then gave the Harrow address].”
In addition, he is on the electoral register in Harrow, not Hammersmith, where his wife is registered.
MPs can claim ACA on the mortgage interest payments on a second home - which means those Members who have paid off their mortgage can receive nothing.
According to Land Registry documents, Ms Gilbert did not have a mortgage on the property when they moved in together, but Mr McNulty disputed this and insisted Ms Gilbert did have a mortgage at the time.
However, after they set up home together, both took out mortgages on their respective homes. Land Registry records show Ms Gilbert took out a loan on the Hammersmith property with the Bank of Scotland later in 2001, while Mr McNulty took out a fresh loan on his Harrow house with the same bank in 2003.
Mr McNulty said he used the loan to “pay off some debts”. His wife had used hers to buy a maisonette beneath the Hammersmith home to make it bigger. Around the same time, Mr McNulty's second-home expenses nearly doubled - from £7,400 in 2001 to £14,000 in 2002.
Mr McNulty confirmed his wife is still the sole owner of the home, but he pays half the cost of her mortgage.
The weakness of Mr McNulty's second-home allowance is laid bare by a 'golden triangle of expenses' map which shows how close they are to each other - nine miles - and to the Commons. The Hammersmith home is nine London Underground stops from Westminster, the Harrow house just eight stops from the Commons.
Since 2001/02, the first year for which figures are available, Mr McNulty has claimed a total of £59,998 in second-home allowances. In the past five years he has claimed £52,598.
Assuming he claimed a similar amount from 1997 to 2001 and in the current financial year, he is likely to have claimed up to £100,000 in second-home allowances in total.
Asked if he had told the Commons Fees Office, which pays MPs' expenses, of his decision to stop claiming the ACA, Mr McNulty said: “I haven't . . . I have been too busy. I was planning to do so at the end of the financial year.” Had he told Labour Whips or Party officials? “I'm not sure it's a matter for party officials.”
Asked what had brought about his change of heart, he said: “I have always felt some discomfort in claiming the money, to be frank. I decided that it's simply time that I stopped - partly because mortgage interest rates have gone down and partly because I can do without it.”
Asked if he planned to pay back the money, he indicated he would not. “It's not that I shouldn't be claiming. I just feel a lot happier in myself in trying to make sure that I am as sensible as I can be with taxpayers' money, and that is what I have done.”
He pointed out he had never claimed the maximum £24,000 a year ACA. When he became a Minister and acquired the use of a chauffeur-driven limousine, he stopped claiming for travel to and from his constituency. Nor did he claim goods for his Harrow home using the notorious “John Lewis list”, nor for the council tax there.
Mr Tony McNulty 37
Mr McNulty said the Commons should consider following the lead set by Members of the Scottish Parliament. Those who live within 90 minutes of the Edinburgh Parliament, roughly 60 miles, cannot claim for a second home. But MPs have been resistant to such reforms. Last July, they threw out an independent review body's proposal to cut £10,000 from the second home allowance for outer London MPs such as Mr McNulty.
The Commons “Green Book” which sets out the rules on expenses makes it clear that ACA claims must be “above reproach” and that MPs “must avoid any arrangement which may give rise to an accusation that you are, or someone close to you” is benefiting from public funds.
MPs are also “strongly advised” to avoid subletting or renting out any property on which they claim ACA.
[…]
22 March 2009
2. Letter to the Commissioner from Mr Greg Hands MP, 23 March 2009
I am writing to you regarding the claims made by Tony McNulty under the Additional Costs Allowance (ACA).
Mr McNulty appears to have breached the guidance contained in the Green Book 2006 in a number of respects.
First, he has claimed the second homes allowance for a property in which his parents live. This is in apparent breach of the guidance outlined in the Green Book 2006 on the propriety of claims and on how claims can affect the reputation of Parliament and its Members:
"You must ensure that arrangements for your ACA claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. Members should bear in mind the need to obtain value for money from accommodation, goods or services funded from the allowances." (Page 10)
• “You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds." (Page 10)
In addition, Mr McNulty has not been clear on exactly how much work he does at his parents' property and whether he actually stays there overnight. This is a crucial criterion when claiming ACA. Mr McNulty has claimed that he "probably" stayed overnight occasionally, whereas neighbours assert he rarely works from his parents' home:
• "I use it [the property] considerably. I work there at weekends when I am in the constituency… I have said clearly that I was probably spending one or two nights a weekend there early on when I was an MP. It probably is less now." (Daily Mail, 23 March 2009)
• Yet the same newspaper cites retired newsagent Saroj Rawal who lives opposite McNulty's parents' property, who said: "I've never seen Tony McNulty, not even at election time." Another neighbour claimed: "I've seen Mr McNulty on a couple of occasions over the last few years. I know what car he drives, and he never stays overnight. I doubt very much whether he does much work from there."
As you know, the Green Book states:
• Members can claim, "Only those additional costs wholly, exclusively and necessarily incurred to enable you to stay overnight away from your only or main UK residence, either in London or in the constituency." (Page 9)
If Mr McNulty used the Harrow house purely for constituency work during the day, it is unclear whether he would need to make a further claim under the Incidental Expenses Provision (IEP), which provides for
38 Mr Tony McNulty
“Equipment and supplies for the office or surgery" in relation to, "Accommodation for office or surgery use - or for occasional meetings" (Green Book 2006, Page 15).
I believe these potential breaches warrant further investigation and would be grateful if you could take this matter up. Please do not hesitate to contact me if you require any further information.
23 March 2009
3. Extract from article in the Daily Mail, 23 March 2009
A LABOUR minister faces a sleaze inquiry after claiming £60,000 from the taxpayer in expenses on his parents' home.
Employment minister Tony McNulty was forced to admit that he rarely stays at the house in his constituency despite claiming around £14,000 a year in parliamentary expenses.
Mr McNulty claimed the money under rules which are meant to help MPs fund a second home if they have to travel a long way to Westminster from their constituency. But Mr McNulty's constituency is Harrow East - around 11 miles from Westminster.
He lives with his wife Christine Gilbert, the chief inspector of schools, at his main home in Hammersmith, itself only three miles from the House of Commons.
When confronted by the Mail on Sunday, Mr McNulty called for any MP within 60 miles of Westminster to be banned from getting the handout, in a bizarre bid to deflect criticism. Instead, he said, MPs should be paid a “proper” salary.
Commons rules mean he can use public money to help pay the mortgage on the second house which he owns, but where his parents [ …. ] live.
Since 2001-02, the first year for which figures are available, Mr McNulty has claimed a total of £59,998 in second home allowances. The real cost could be as much as £100,000 when backdated to 1997, when he became an MP.
Mr McNulty insisted he had not broken the rules, but he acknowledged that his arrangements appeared 'odd' and confirmed that had stopped claiming the controversial Additional Costs Allowance in January.
However, he refused to hand back the money after insisting that he worked at the house at weekends when he was in the constituency.
Neighbours yesterday said they rarely saw the minister, if at all.
Retired newsagent Saroj Rawal, who lives opposite, said: “I've never seen Tony McNulty, not even at election time.”
Another neighbour, who asked not to be named, said: “I've seen Mr McNulty on a couple of occasions over the last few years. I know what car he drives, and he never stays overnight. I doubt very much whether he does much work from there.”
Commons rules make it clear that Additional Costs Allowance claims must be “above reproach” and that MPs “must avoid any arrangement which may give rise to an accusation that you are, or someone close to you” is benefiting from public funds.
Tory MP Greg Hands will today call on John Lyon, the Parliamentary Commissioner for Standards, to investigate Mr McNulty's claims.
Mr Hands said: “He says that he uses the house for constituency work but his office is just round the corner.”
Mr McNulty lived with his parents in the Harrow house before his 2002 marriage to Christine.
Mr Tony McNulty 39
After moving into her home in Hammersmith he claimed the second home allowance on the Harrow property while his parents continued to live there.
This January he stopped claiming the allowance because interest rates had fallen so far that he was able to meet his mortgage commitments from his MP's salary. Mr McNulty earns £104,050 a year, while his wife is on £225,000 as head of Ofsted.
Asked on Sky News' Sunday Live why he was claiming expenses on a property where his parents live, Mr McNulty said: “I use it considerably. I work there at weekends when I am in the constituency.”
“I have said clearly that I was probably spending one or two nights a weekend there early on when I was an MP. It probably is less now.
“But I think I can do my job more effectively by having that base in the constituency.”
He added that the whole system needed to change, saying there could be a flat rate 'proper' pay increase for all MPs in return for giving up ACA.
However, fellow London MP Sarah Teather said: “People are going to find it very hard to understand how MPs are allowed to accept tens of thousands of pounds from the taxpayer when they only live about half an hour from Westminster.”
4. Letter to Rt Hon Tony McNulty MP from the Commissioner, 24 March 2009
I would welcome your help on a complaint I have received from Mr Greg Hands MP about your claims under the Additional Costs Allowance.
I attach a copy of Mr Hands’ letter of 23 March together with a copy of the on-line version of a Mail on Sunday article of 22 March and a copy of the online version of a Daily Mail article of 23 March referred to by Mr Hands.
In essence, the complaint is that you claimed expenses for a residence in your constituency and those expenses were not wholly, exclusively or necessarily incurred when staying overnight away from your main home for the purpose of performing your parliamentary duties, contrary to the rules of the House.
The Code of Conduct for Members of Parliament provides in paragraph 14 as follows:
“Members shall at all times ensure that their use of expenses, allowances, facilities and services provided from the public purse is strictly in accordance with the rules laid down on these matters, and that they observe any limits placed by the House on the use of such expenses, allowances, facilities and services.”
The rules for the Additional Costs Allowance are set out in the Green Book published in July 2006. Section 3.1.1 sets out the scope of the allowance as follows:
“The Additional Costs Allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight away from their main UK residence (referred to below as their main home) for the purpose of performing parliamentary duties. This excludes expenses that have been incurred for purely personal or political purposes.”
Section 3.3.1 sets out the following principles:
“You must ensure that arrangements for your ACA claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. Members should bear in mind the need to obtain value for money from accommodation, goods or services funded from the allowances.”
And in 3.3.2:
40 Mr Tony McNulty
“You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds or that public money is being diverted for the benefit of a political organisation.”
Section 5 of the Green Book sets out the Incidental Expenses Provision. Section 5.3.1 identifies allowable expenditure, including the following:
“The IEP may be used to meet the following expenses:
• Accommodation for office or surgery use - or for occasional meetings…”
Sections 3.1.1. and 5.3.1. were included in similar terms in the April 2002, June 2003 and April 2005 editions of the Green Book, but section 3.3. on principles was not included before the July 2006 edition.
I would welcome your comments on this complaint, taking into account the relevant rules in respect of the Additional Costs Allowance. In particular, it would be helpful to know:
1. how you came to establish your arrangements for making claims under the Additional Costs Allowance for property in your constituency;
2. the arrangements you have had for this residence, including mortgage arrangements, any income you receive from it, its use when you are not yourself there, and, in particular, your estimate of the number of nights you have spent in this residence in each of the last seven financial years;
3. the value and nature of the claims you have made for this residence under the Additional Costs Allowance for each of the last seven financial years;
4. confirmation about when you ceased making claims for this residence under the Additional Costs Allowance and your reasons for doing so;
5. whether you have made any claims for an office in this residence under the Incidental Expenses Provision; if so what they were and, if not, your reasons for not doing so;
6. whether, and if so, why you consider the claims you made were within the scope of the Additional Costs Allowance taking account of the requirement that the costs should be wholly, exclusively and necessarily incurred when staying overnight away from your main home, and the importance of obtaining value for money for accommodation funded from the allowances;
7. whether you consider that there was any immediate benefit or subsidy from public funds to yourself or anyone close to you arising from the reported use of the accommodation by your parents.
Any other points you would wish to make to help me with this inquiry would be very welcome.
I appreciate that I am asking for factual information which goes back some years and would obviously understand if the information you give me is based on your own best estimates.
I attach a note which sets out the procedure I follow. I am writing to the complainant to let him know that I have accepted this complaint and am writing to you about it. It would be very helpful if you could let me have a response within the next four weeks. If there is any difficulty about this, or you would like to have a word about the complaint, please contact me at the House.
I would be very grateful for your help on this matter.
24 March 2009
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5. Letter to the Commissioner from Rt Hon Tony McNulty MP, 21 April 2009
Thank you for you letter of the 24th March informing me of the complaint from Greg Hands MP. I fully appreciate that there should be as much transparency as possible in these matters and welcome the opportunity to set out my circumstances clearly.
You have asked me a series of seven separate questions concerning the claims that I have made against the Additional Costs Allowance (ACA). 1. How you came to establish your arrangements for making claims under the Additional Costs Allowance for property in your constituency.
My arrangements for making claims under the Additional Costs Allowance for my house in the constituency were discussed with the Fees Office in 1998-99. I was advised by the Fees Office that it was perfectly permissible for my parents to share my second home. They confirmed that the rules do not stipulate that the property designated as the second home should be for the exclusive use of the Member. You will know that there is no dispute about the designation of my Harrow property as my second home and the property in Hammersmith as my main home. As there were no issues or doubts arising from either my designation of the Harrow property as my second home, nor about the shared use of the second home by my parents, both of which I was very clear about, then I had no cause to return to the Fees Office to discuss these matters further.
2. The arrangements you have had for this residence, including mortgage arrangements, any income you receive from it, its use when you are not yourself there, and, in particular, your estimate of the number of nights you have spent in this residence in each of the last seven financial years.
As Harrow is designated as my second home, and I established the nature of my arrangements with the Fees Office in 1998-99, then I have, quite properly, sought to make sure that any claims made on the property reflected the rules for the Additional Costs Allowance as set out in the Green Book, especially Section 3.1.1 :-
"The Additional Costs Allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight away from their main UK residence (referred to below as their main home) for the purpose of performing parliamentary duties. This excludes expenses that have been incurred for purely personal or political purposes."
The mortgage on the property in Harrow is mine and mine alone. I have never received any income from the property. My parents do live in the house — both when I am there and when I am not there. As I have indicated, the rules do not say that the property should be exclusively used by the Member.
In terms of your request about the number of nights that I have spent in this residence in each of the last seven financial years, I note that you say in your letter that you will understand if these can only be estimates. You will be aware that the rules do not specify a minimum requirement in terms of the frequency or regularity with which a Member should actually use the second home. Furthermore, in no part of the rules does it indicate that there would be a need to account for the number of nights spent in the second home, on either a predictive or retrospective basis. I have, therefore, not kept a record of the number of nights that I have spent in the Harrow property over each of the last seven years. In establishing what can only be, therefore, my best estimates of the number of nights in each year, I am also mindful that, for ACA purposes, these are nights just for parliamentary duties, and I have sought to exclude those that were for political or personal purposes. It is not always possible, though, to make such a clear distinction. For instance, a fairly typical routine might entail, arriving late to stay overnight in my Harrow home on the Thursday and then carrying out visits to schools during the day on the Friday, a political meeting in the evening on the Friday, staying overnight on Friday in order to start Saturday with a morning surgery with constituents, returning to my home for a break for lunch, then out again for some political campaigning in the afternoon, back to the house to shower and change for another constituency event in the evening.
Although there are these difficulties and there is no rule specifying a minimum requirement in terms of the regularity and frequency for overnight use, I have tried to discern my best estimate of the patterns of stays by looking, for example, at my departmental and constituency diaries for the last four years. On this basis, I estimate that I have spent, on average, at least one or two nights a week in the Harrow property in order to
42 Mr Tony McNulty
carry out my parliamentary duties when not on holiday or away on ministerial business. I have also excluded overnight stays for solely political or personal reasons.
You will appreciate that this figure of between one to two nights can only be an estimate as I am looking at my diaries in retrospect and no-one can be expected to recall with absolute accuracy their daily whereabouts for the last seven years. I believe that the pattern of overnight stays has also changed in the context of my ministerial duties. I certainly remember when I was a Government Whip — until 2002 — that my duties were very much related to the House when it was in session and that I did not have 2-3 further weeks of ministerial business in recess and was able to spend more days and nights in the constituency. This was particularly the case in September and more broadly during the recesses. This pattern continued while I progressed to a Parliamentary Under-Secretary (2002-2004), but the best estimate of one or two nights a week when not on holiday or ministerial, business relates to my time as a Minister of State (2004-2008).By this time the month of September, and the recesses more generally, were more and more balanced between parliamentary duties in the constituency and ministerial activity, except at weekends.
3. the value and nature of the claims you have made for this residence under the Additional Costs Allowance for each of the last seven financial years.
The figures for each of the seven years are as follows : 2002-3, £13,997; 2003-4 £8,600; 2004-5 £9,350; 2005-6 £8,251; 2006-7 £12,400; 2007-8 £12,600; and 2008-9 £7,330. When the Additional Costs Allowance totals were published for the first time, I queried the 2002-3 figure and was told that it included at least 2/3 months payments from the previous year.
I have sought to limit my claims under the Additional Costs Allowance for the Harrow property to mortgage interest payments and the council tax. In only two of these years — 2004-5 and 2005-6 — were claims submitted (£550) for sundry bills, utilities and service/maintenance. I should also add that I stopped claiming for the council tax in April 2008.
4. confirmation about when you ceased making claims on this residence under the Additional Costs Allowance and your reasons for doing so.
I can confirm that the last claim that I made on this residence under the Additional Costs Allowance was in December 2008. Although I am clear, as I have said, that there is nothing in the rules or the Green Book that relates to who should stay in the property or a stipulation on the minimum number of nights that a member should use the second home. I am equally aware that section 3.3.1 refers to achieving value for money from accommodation, goods and services funded from the allowances. I have been mindful that since last September/October 2008, my overnight use of the property has been considerably less. Much of the reason for this is that in October 2008, I assumed a new ministerial role which entailed attendance at Cabinet and responsibilities for both Employment and London. Both of these latter roles generated an increase in ministerial and other Party duties, particularly in terms of media work at the weekends. This has meant, for example, instead of staying overnight in Harrow after a constituency event on a Saturday evening, I would travel back to Hammersmith so that I had time to prepare for and attend TV and radio studios on the Sunday morning.
During the Christmas recess I estimated that only 4-5 overnight stays between October and December had been for purely parliamentary duties. I determined that this level of usage did not reflect good value for money and decided that I would not claim the allowance from January 2009 onwards.
5. whether you have made any claim for an office in this residence under the Incidental Expenses Provision (IEP) ; if so what were they and, if not, your reasons for not doing so.
I have never claimed for an office in the Harrow property under the provision of the Incidental Expenses Provision principally because I have excellent office provision at 18 Byron Road, Wealdstone. I rent these premises from the Harrow East Labour Party and all of the appropriate documentation for this is lodged with the Fees Office and sits entirely properly within the rules of the House. I have never said that I use the Harrow property as an office. I have said that, as well as overnight stays in pursuance of my parliamentary duties, I use the Harrow property extensively during the day at weekends and during recess and often spend time there between various events, duties and functions. I may, of course, do some work there during this time — generally it is reading papers and preparing comments and speeches for that day's meetings and functions. I
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have never suggested that I use the Harrow property as an office, nor have I claimed any allowance for doing so under the Incidental Expenses Provision (IEP).
6. whether, and if so, why you consider the claims you made were within the scope of the Additional Costs Allowance taking account of the requirement that the costs should be wholly, exclusively and necessarily incurred when staying overnight away from your main home, and the importance of obtaining value for money for accommodation funded from the allowances.
I consider that my use of the Harrow property has been entirely compliant with the rules of the House. I was clearly advised that there was no rule preventing the use of the second home by other members of the family — but have sought to keep my claims to a minimum to reflect the additional use. There is no provision in the rules for a minimum number of overnight stays in pursuit of parliamentary duties — but I believe that I have complied not only with the letter but also the spirit of the rules on overnight stays. In my best estimates of use, I have been careful to include only those overnight stays which have been exclusively for parliamentary duties and to exclude those which have been more for political or personal reasons.
I have also complied with the rules regarding value for money, and, as already indicated above, ended claiming when I felt that my changed circumstances and responsibilities meant I might no longer comply with spirit of the rules on a value for money basis. I have never claimed anything like the total amount I was permitted to under the Additional Costs Allowance — my claims have ranged from 31% of the ACA (2008-9), 38% (2005¬6), 42% (2003-4), 44% (2004-5), 54% (2007-8) and 56% (2006-7). Whilst I could have claimed for all bills, utilities, service and maintenance costs and other sundry items for the Harrow property, quite appropriately within the rules as laid out in 2.1.3.1 to 2.1.3.6, I chose not to do so. So, essentially, beyond mortgage interest and council tax (which I stopped claiming in April 2008), I believe that the pattern of claims has complied with the rules concerning value for money.
7. whether you consider that there was any immediate benefit or subsidy from public funds to yourself or anyone else arising from the reported use of the accommodation by your parents.
As I have said, there is no prohibition in the rules against sharing the use of the second home with your family and this point was explained to me when I outlined my circumstances to the Fees Office in 1998-99— so I do not believe that either the spirit or the letter of the rules in the Green Book has been breached in this regard. Nonetheless, in recognition of the potential perception of benefit, I have sought to keep my claims to a minimum and have not claimed all of the other running costs and expenditure for maintaining the Harrow property that I could have legitimately done under the rules. Having opted, as most Members do, to utilise the ACA to maintain a second home for the purpose of the provision of overnight stays in the constituency in pursuit of parliamentary duties, I could have claimed all of the running costs, bills and maintenance from the ACA and had the property standing empty, save for the times when I was there. I have, however, never sought to maximise my claims, or use the allowance system for any financial advantage. In other words, the rules allowed for costs to the public purse that would have been far greater than the claims that I have made. Instead, in compliance with the rules, I share the property with my parents, claim minimal costs — having opted to utilise the ACA for a second home — and together with my parents meet all other running costs and bills without recourse to public funds.
I have and will maintain strong links with my constituency having lived there since I was nine years old, gone to school and college there and represented the area as a Councillor and as the MP for the last twenty two years. I will continue to maintain my second home there and will continue to use it both during the day and on an overnight basis for personal and political reasons as well as in pursuit of my parliamentary duties
I have attempted to answer each of your questions in turn in the fullest way possible, but, as you have intimated yourself, it is not easy to recollect with any degree of accuracy, matters which go back some years, and, at best, can only be estimated. I also understand entirely that these matters should be, and be seen to be, above reproach. I know and appreciate that there is considerable discussion about the whole allowances system for Members of Parliament, not least in terms of accommodation. However, I sincerely believe that, within the rules as they currently stand, I have complied with both their letter and spirit, and that the use of a second home in my constituency has helped me considerably in the role that I am able to play as a Member of Parliament. I am clear, therefore, that the arrangements for my ACA claims conform entirely to the rules of the House, as I hope I have demonstrated.
44 Mr Tony McNulty
I look forward to a speedy resolution of this matter.
21 April 2009
6. Letter to Rt Hon Tony McNulty MP from the Commissioner, 23 April 2009
Thank you for your letter of 21 April responding to mine of 24 March about this complaint in respect of the expenses claims for your constituency home.
It was most helpful to have this response. I am grateful too for the work you have done in identifying your overnight stays in the constituency. But I would be most grateful if you could show me the figures on which you base the general estimates given in your letter. What would be particularly helpful would be a table showing for each week, over the years you examined, your best estimates of the nights you believe you spent in your constituency home for the purposes of your parliamentary duties. It would be helpful too if you could provide me with any factual corroboration of that information. The most obvious way of doing that might be relevant extracts from your diaries. If you were concerned about confidentiality, I would be very happy to look at the relevant evidence and take no copies.
Since your evidence is that you have regularly spent one or two nights a week in your constituency home, it would be helpful if you could also let me know why it was necessary for you to spend these nights there for the purpose of performing your parliamentary duties when your main home, as I understand it, is a comparatively short distance from your constituency.
I appreciate, as you say in your letter, that there is no question at issue about the identification of your main home and therefore no need to examine the balance of your overnight stays between your main home and elsewhere. But the number of nights you have spent in your constituency home and the reasons for doing so could be relevant to the key points at issue in this complaint, which is that the expenses were not wholly, exclusively or necessarily incurred for the purpose of performing your parliamentary duties when staying overnight away from your main home; that they did not represent value for money given the allegedly limited overnight use you made of that accommodation and its proximity to your main home; and that you or your family obtain an immediate benefit or subsidy from those expenses claims.
I hope you could let me have this information and your response within the next two weeks. I apologise for the extra burden, but hope I am right in assuming that you collected this information in order to give me the general estimates you have made. If there is any difficulty about this or you would like a word, please contact me at the House.
23 April 2009
7. Letter to the Commissioner from Rt Hon Tony McNulty MP, received 11 May 2009
Many thanks for your letter of the 23 April responding to mine of the 21 April about the complaint in respect of the expenses claim on my constituency home. I particularly appreciate the speed of your response for which I am very grateful. You are correct in assuming that much of the information that you require from me in order to answer your further enquiries is at hand, as I have had to review such information in order to answer your original enquiries.
I have sought to answer your further enquiries in as clear a way as possible, but you will appreciate that the information required is rather complex. I further acknowledge your sensitivity in terms of the confidential nature of much of this information especially my ministerial diaries and constituency schedules. I have prepared a confidential memorandum [not reproduced here] for your consideration that, hopefully, will provide, in detail, the further information that you seek. However, it may be helpful to meet so I can talk you through the memorandum, diaries and schedules.
The memorandum presents the information in three parts for the four years 2004–05 to 2007–08. Firstly, it consists of a summary for each year of the time that I have spent away from home on ministerial or political
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business and the time spent away on holiday. Secondly, the memorandum gives an indication of my best estimate of nights spent in my constituency home for each of the years concerned. Thirdly, the memorandum includes my constituency schedules and my ministerial diaries for each week of each year so that, as you suggest, my activities can be corroborated. I hope that you can appreciate that these three key elements of my activities over these years are inextricably interlocking and are best looked at together in context rather than separately. Taken together, I believe that three parts of the memorandum will answer the enquiries that you have set out in the second paragraph of your letter of the 23 April 2009.
I am sorry that this approach means that there is a good deal of paperwork for you to review, but I have tried to provide as full an answer to your enquiries as possible. I do, as you suggest, have some real concerns about the issue of confidentiality, especially concerning my ministerial diaries and constituency schedules, so I very much appreciate your offer of reviewing this evidence on a confidential basis without taking any copies. Indeed, the copy of the constituency schedules and ministerial diaries that I am submitting as part of the memorandum is the only copy that I have to hand. It is on this basis, that I submit the confidential memorandum.
You have also asked if I could let you know why it was necessary for me to spend nights in my constituency for the purpose of performing my parliamentary duties when my main home is 'a comparatively short distance' from my constituency. This is an entirely fair question and needs to be put in the context of the rules of the Green Book that make clear that the use of the Additional Costs Allowance (ACA) for securing the provision of a property for overnight stays in the constituency is a permissible use, as at 2.1.1., and that the allowance has been available to Outer London members, as at 2.1.2.
My constituency is approximately 10–11 miles from my main home and, depending on the time of day that the journey is made, can take anything from 45 minutes by car to more like an hour and a half or longer. In a normal parliamentary week, beginning on a Monday, I will have already worked 55–60 hours by the Thursday evening. If I have parliamentary duties in the constituency on the following day, which I invariably do, then I would usually stay over in Harrow on the Thursday evening. This has allowed me to take time on the Thursday night to prepare for the constituency events or, if I do not have an early start, on the Friday morning, rather than setting out from my main home on the Friday morning. It also enables me to devote more time to constituents rather than waste it on travel.
You can see from my constituency schedules that the nature of the events that I have in the constituency on a Friday, Saturday or Sunday, involve other people relying on my attendance at the appropriate time and I have no desire to let them down. The advantage of staying overnight in Harrow before events the following morning is that I can prepare properly for these events. For example, as I am sure is the case for other MPs, a number of the people who come to see me at my surgery advice centre will have already submitted detailed paperwork on their particular cases, or the case will be ongoing and there will be various correspondence to read about the latest position and staying overnight affords me the time and the space to review this paperwork in detail before the surgery.
As you can see, the nature of the events in my constituency are very often early in the morning, especially events in schools—visits, assemblies, discussions with school councils, or meetings with Heads and teachers— all of which require me both to be on time and be prepared. The same is true of my surgeries and other constituency events. Whether the day consists of meeting constituents individually, having meetings with Council or other public officials, meetings with residents groups or associations, visiting businesses, attending various fetes or fairs, Remembrance or other civic events and services, or other general site visits to discuss issues relating to areas such as planning, transport, traffic or general development—all require me to take the time to prepare for all such activities and, I believe, this is best achieved by staying overnight and concentrating on the events ahead, rather than worrying about how to get to these events or be concerned about the traffic.
The same is true, I believe, in the context of meetings or events in the evening in the constituency—whether a cultural event, a dinner, a religious function, a charity event, a meeting with residents or other groups, a celebration of some aspect of constituency life or a meeting with one or other amenity group in Harrow to discuss their concerns or merely to catch-up with them. I am able to serve my constituents in a far more effective way by knowing that 1 can stay at the evening event for as long as I need to precisely because I am staying overnight in Harrow.
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I am entirely convinced that I am able to do my job as a Member of Parliament much more effectively because I have the ability to stay overnight in my home in the constituency and use it as a base when I need to in pursuit of my parliamentary duties as I have sought to describe above.
I appreciate that you accept that there is not an issue about the identification of my main home and therefore no need to examine the balance of overnight stays between my main home and elsewhere. I also appreciate that the number of nights that I have spent in my constituency home and the reasons for doing so could be relevant to the key points at issue in this complaint. I hope that I have shown clearly that my use of the ACA has been, as with other MPs including many Outer London members, wholly, exclusively and necessarily incurred in pursuit of my parliamentary duties when staying overnight away from my main home; that it does represent value for money, given the use of the accommodation as I have outlined above, in the memorandum and in my previous letter to you; and that the use of the ACA has complied with the rules in the Green Book and has not amounted to an immediate benefit or subsidy for me or my family. As I have made clear in my previous letter, although there is no prohibition on who can use the property, nor any clear rule specifying a minimum requirement in terms of the frequency or regularity with which the Member should use the second home, I sincerely believe that both my use of the second home and the frequency and regularity of that use, both comply with the spirit as well as the letter of the rules.
I do understand your concerns about value for money and, as I have already indicated, this concern was central to my decision to stop claiming the ACA in December 2008. The nature of my new ministerial duties since October 2008 has meant a much more intensive role in terms of media activities and in terms of reading and preparation. This has meant much more of my time on Fridays and at weekends is given over to ministerial work and whilst my constituency work continues, I have not been able to devote quite as much time to it and stayed overnight less and less because of the pressures on my time. I believe that my decision to stop claiming the ACA in December 2008, and the manner in which I have used the ACA over recent years, have shown how I am fully mindful of the issue of value for money as well as all other aspects of the rules within the Green Book.
I have attempted to provide you with the details that you have asked for in full, both in terms of the additional information identifying, to my best estimates, my overnight stays in the constituency and the reasons why I believe that these overnight stays were necessary for the purpose of performing my parliamentary duties. I know that you appreciate, as you remarked in your first letter, that these details can only represent my best estimates of matters that go back some years as it is not easy to recollect with absolute accuracy, as you have made clear.
As I have indicated previously, I have and will maintain very strong links with my constituency and I will continue to maintain my second home there. I will continue to use it both during the day and overnight in pursuit of my parliamentary duties as well as for wider political and personal reasons. I hope that I have responded in full to your enquiries and, once again, appreciate your alacrity in responding to my first letter. I trust I have demonstrated I have at all times acted in good faith and within both the spirit and letter of the rules that pertained at the time.
One small point, if I may. As I understand the complaints investigation procedure, the complainant should have copied the letter of complaint to me personally, but this did not happen. The first I heard of the complaint was from a story in a newspaper on Monday 23 March. Further, as I understand the process, the complainant is supposed to refrain from passing public comment on the complaint, once lodged, although there was a quote from the complainant in the same story in a newspaper. You may seek to look into these matters.
Many thanks once again for the manner in which you have treated this matter to date and I look forward to speedy resolution.
Received 11 May 2009
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8. Letter to Rt Hon Tony McNulty MP from the Commissioner, 12 May 2009
Thank you for very much for the material which you delivered to my office on 11 May in response to my letter to you of 23 April asking for some further information in resolving this complaint.
I was most grateful to you for producing such a clear response. You have covered the years 2004-05, 2005-06 and 2006-07. As you know, I need similar figures for 2008-09, and, if you can provide them, for 2002-03 and 2003-04. I appreciate that if earlier diaries from your time as a Parliamentary Under-Secretary or as a Whip are not available, you may need to fall back on your own best estimates, as you suggested in your letter of 21 April, and I will treat such figures accordingly; but it would nevertheless be helpful to have figures for the full seven years.
Thank you for your suggestion that we meet so that you can take me through the memorandum, diaries and schedules. I would be very happy to do that so that I can see the basis on which you identified your nights in your constituency, but I am also mindful of your parliamentary and ministerial duties.
If you agree, therefore I suggest that I first work through the documents you have provided, in particular the supporting material, so that I can identify any points of difficulty or possible misunderstanding. If there are such points, then I am sure it would be helpful for us to meet so that they can be clarified. In the meantime I hope you would be able to send me the outstanding figures and supporting documentation.
You mention also that Mr Hands did not copy his letter to you. As you know, this is a courtesy expected by the House. Until I have accepted a complaint for investigation, the evidence I receive is not subject to Parliamentary privilege. I do not propose to initiate an inquiry into this matter, although I shall consider whether to refer to the courtesy point in any memorandum I prepare for the Committee.
Thank you again for your help on this. I look forward to receiving the further information about the remaining years.
12 May 2009
9. Letter to the Commissioner from Rt Hon Tony McNulty MP, received on 20 May 2009
Many thanks for your letter of the 12th May responding to mine of the 11th May. I have tried to comply with your request for further information concerning the years 2002-03, 2003-04 and 2008-09. You will appreciate, as you allude to in your letter, that much of this information for the earlier years can only be based on partial information, but I have tried to secure as much information as I am able. Notwithstanding this, all of these figures are based on best estimates, as you have agreed before.
I hope that this further information is helpful.
Many thanks once again for the manner in which you have treated this matter to date and I look forward to speedy resolution.
20 May 2009
10. Letter to Rt Hon Tony McNulty MP from the Commissioner, 11 June 2009
I have now completed work on your diaries and other materials which I received from you on 11 and 20 May. I am returning the documents with thanks. I have not taken copies.
I attach a table [not reproduced here] showing your estimate of your overnight stays in your constituency home; and the figures I have produced. As you will see, there is very little difference between them. I have also appended some questions on the diaries which could affect the figures. It would be very helpful if you could let me have a response to these – or, if you would prefer, come and talk me through them.
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These figures are not, of course, other than indicative of the evidence you have given me about your overnight stays. That is partly, of course, because the diaries do not specifically identify where you spent the nights, and partly because the distance between your constituency home and your main home is such as to have allowed you to have got back to your main home overnight if you had so wished—although I recognise what you say in your letter of 11 May about how you handle your constituency business.
In the light of this, however, I think it would be helpful if I could have any witness evidence about the general patterns of your overnight stays in your constituency. The initial press report referred to Mr Saroj Rawal, your local newsagent, and I would propose to write to him. I may also later need to write to your parents. Could you perhaps let me have the names and addresses of Mr Rawal and any near neighbours or anyone else who may be able to help me with this aspect of my inquiry?
In the light of this evidence about your stays in your constituency home, I think I also need to explore further how this worked in relation to your parents’ use of the property. In particular, I would be grateful if you would let me know when, and in what circumstances, your parents came to occupy the property; whether your parents have any other property where they stay or whether this is their sole residence; whether they meet any of the running costs of the property and, if so, how they are apportioned; how the arrangement works in practice—including any entertaining or other meetings you have at the house.
Do, therefore, let me know if you would like a word about the interpretation of your diaries. Otherwise, I look forward to hearing from you, I would hope within the next three weeks, with a response on the diary points; suggestions for neighbours or other witnesses of your residence in the constituency and for your help on the arrangements with your parents.
11 June 2009
11. Letter from Rt Hon Tony McNulty MP to the Commissioner, 23 June 2009
Many thanks for your letter of the 11 June 2009 and the return of my diaries and other materials. I will respond to your queries in the order in which you have raised them.
I have addressed the questions that you have posed on some of the dates of estimates of overnight stays, and, for clarity, have presented further answers in a separate document attached to this letter. I have also suggested how your summary table might be amended to reflect my answers to your questions. You will see that there is very little difference to any of the figures.
I am perplexed by your request for witness evidence about the general patterns of my overnight stays in the constituency. My parents are the only people who could testify with absolute certainty to the pattern of my overnight stays in the constituency, but even they would not be able to attest to the balance between personal, political and parliamentary uses. I would be astonished if any of my neighbours could either challenge or corroborate my private comings and goings with any validity or anything approaching accuracy. I do not see how this would be possible, one way or the other. I could not do it myself for neighbours in Harrow, or indeed, Hammersmith and nor could anyone else I have asked. I do not know Mr Rawal nor do I believe I have ever met or spoken to him at all. While he is perfectly entitled to his assertions about my movements, they are simply that, assertions. I exchange the usual courtesies with my closest neighbours, but I do not know any of them well. My closest neighbours were door-stepped by the media in March and, although they refused to speak to them, they were upset by the whole experience. I have no desire to impose upon my neighbours further in the way you suggest as I do not believe that soliciting such information would serve any value— whether, frankly, in support of me or otherwise.
My parents came to live with me soon after I bought the house in Harrow and did so at my request as I felt that the house would be more secure with someone resident at all times. They have no other property where they stay, this is their sole residence and, as substantiated by the Fees Office, there is no prohibition in the rules on who can or cannot stay in the home. My parents do meet many of the running costs for the property.
Generally they pay for all of the running costs and basic utility bills except for the mortgage and the council tax, and together we pay for major outgoings (e.g. the recent replacement of the central heating system). As
Mr Tony McNulty 49
you are aware, until fairly recently, I claimed some mortgage interest and council tax on the ACA. I have always paid the rest of the mortgage and, since April 2008, the council tax—but all other regular running costs have been met by my parents or me personally. Larger outlays such as refurbishment, decoration or improvements to the property have been shared between us—and not claimed on the ACA as I would have been entitled to do under the rules. By way of a rough example, I claimed £7,330 mortgage interest on the ACA for nine months during 2008–09—from April until I ceased claiming in December. The total mortgage payments for 2008-09 were £11,282 — I paid the remaining £3,952 and the council tax—£1,800 approx. The estimated other running costs were roughly, and conservatively, £4,000 for the year—gas, electricity, water, phone and other sundries—repairs, maintenance etc. So the total cost of the house in 2008-09 was approximately £17,082 , of which £9,752 was met by either me or my parents. You will appreciate that much of this could have been claimed on the ACA but was not. I have never made any claims at all for many of the items and issues that have most annoyed people given the recent revelations. In fact, as I have already said, the most I claimed on the ACA represented only 56% of the allowance (2006–7)—and in other years has ranged from 31% (2008–09), 38% (2005–06), 42% (2003–04), 44% (2004–05) and 54% (2007–08). The Times recently reported—on the 19.6.09—that 86% of MPs claiming ACA claimed 61% or more, with 64% claiming 91– 100%. In 2007–08, I was ranked 523rd out of 645 MPs in terms of ACA claims, 534th out of 645 MPs in 2006- 07 and 573rd out of 659 MPs in 2003–4.
In practice, I use my second home when I need to for parliamentary business both day and night, as outlined in my previous correspondence, and my parents work around this. I do not, as a rule, entertain nor have meetings in pursuit of parliamentary business—although I have done so occasionally for personal and political reasons. Those meetings required in pursuit of parliamentary duties would generally be held at my constituency office. I cannot emphasise enough how much I regard my second home as principally a private home and a base from which I can do my job better as a constituency MP.
As I have already stated, I do not believe that I have breached either the letter or spirit of the rules and would be absolutely mortified if my actions had brought the House into disrepute in any way. I have had to endure an entirely distorted account of my circumstances in parts of the media, but have not responded out of respect for parliamentary processes and the guidance relating to your enquiries. I have resigned as a Government Minister, from a position that I thoroughly enjoyed and was privileged to hold, out of respect for these parliamentary procedures and so that the Government was not placed in a position where the actions and integrity of one of its Ministers could be constantly called into question.
I hope that this matter can be resolved at the earliest opportunity and am happy to meet you to discuss these matters further, if that would be useful.
I hope that this is helpful
23 June 2009
12. Letter to Saroj Rawal from the Commissioner, 25 June 2009
I am writing to you in confidence to invite you to give me any evidence you may have about your knowledge of the presence of the Rt Hon Tony McNulty in his home which, I understand, is opposite yours.
I am currently conducting an inquiry into allegations that Mr McNulty claimed expenses on his property in Harrow which were not wholly, exclusively or necessarily incurred by his stays there. A particular issue is the number of overnight stays by Mr McNulty at the house
You are quoted in the Daily Mail on 23 March as follows: “Retired newsagent Saroj Rawal, who lives opposite, said: ‘I have never seen Tony McNulty, not even at election time.’”
In correspondence with Mr McNulty, he has told me that he does not believe he has ever met or spoken to you.
It would be very helpful to me if you could let me know whether you were accurately quoted in the Daily Mail; why you believed that you could or should have known of Mr McNulty’s overnight stays at his house in
50 Mr Tony McNulty
Harrow, and whether you have seen or know other residents at that address. Any other information you could give me about Mr McNulty’s likely overnight stays at the house would, of course, be most welcome.
I enclose a note which sets out the procedures I follow. As you will see, this letter and your response is confidential to my inquiry and subject to parliamentary privilege. It should not be disclosed to others. If I decide that I need in due course to prepare a memorandum for the House of Commons Committee on Standards and Privileges, then I may include your response with my memorandum as evidence. Then I would expect it subsequently to be published by the Committee with any report that it produces. If I decide not to prepare a memorandum, then I would retain your response for my records.
Could you let me have a response to this request within the next three weeks? I would be most grateful for your help.
25 June 2009
13. Letter to Rt Hon Tony McNulty MP from the Commissioner, 29 June 2009
Thank you very much for your letter of 23 June about this complaint. I was very grateful for the further work you have done on your diaries and for your helpful response.
I attach a table setting out the position which I hope is agreed. This gives a best estimate of the number of nights which, on the basis of your diaries, you have spent in your constituency home for each of the last seven years. Unless you have any further comments on it, I hope that now concludes the work on your diaries.
On witnesses, since Mr Rawal was quoted by name in the press, I have written to him to give him the opportunity to give me a statement. I have let him know, however, that you do not believe you have ever met or spoken to him.
I thought it right to offer you the opportunity of identifying other witnesses who may have seen you in your home, but in the light of what you say, I will not press the point further.
I think I am now at the position when it would be helpful for me to seek the view of the Department of Resources. I am, therefore, now writing to them for their advice.
When I receive a response from the Department of Resources—and any response from Mr Rawal—I will be back in touch. I think it may be that at that stage it is likely that a meeting and interview would be helpful in bringing this matter to a conclusion.
Thank you again for your help.
14. Rt Hon Tony McNulty MP's nights in constituency (reproduced in summary form)
Year Member's original estimate of nights Estimated number of nights spent in spent in constituency constituency
2002-03 52 52
2003-04 69 66
2004-05 66 63
2005-06 59 55
2006-07 67 65
2007-08 60 59
Mr Tony McNulty 51
2008-09 26 33
TOTALS 399 393
Note: The figures for 2008-09 are derived from the nine months from April to December.
29 June 2009
15. Letter to Director of Operations, Department of Resources from the Commissioner, 29 June 2009
I would welcome your advice and comments on a complaint I have received against the Rt Hon Tony McNulty in respect of the claims he made for his constituency home in Harrow.
I attach the complainant’s letter of 23 March together with an online version of the Daily Mail article of the same date on which he relies; my letter of 24 March to Mr McNulty with the additional enclosure of a Mail on Sunday article of 22 March; Mr McNulty’s response of 21 April; my letter to him of 23 April; his response which I received on 11 May; my letter to him of 12 May; his response which I received on 20 May; my letter to him of 11 June; his response of 23 June; and my letter to him of 29 June.
I would welcome your comments and advice on this matter. In particular, it would be helpful to know:
1. what contacts Departmental staff had with Mr McNulty about the arrangements for his Harrow home, in particular about the use by his parents of the house as their sole residence, and the advice they gave;
2. whether you consider that it was within the rules of the House at the time for a Member to make claims for a constituency property which was also the sole residence of another person, in this case his parents;
3. if so, whether you consider, in the light of the evidence now available, that the nature and size of the claims which Mr McNulty made were within the rules of the House, given that the home was his parents’ sole residence.
There is one further point on the interpretation of the rules on which I would welcome your guidance. Mr McNulty’s main home was less than 20 miles from his constituency home. The Green Book rules define overnight stays in a Member’s constituency home, for the purpose of the ACA, as being overnight stays within 20 miles of the Member’s constituency boundary. On one reading of that rule, would it not be the case that Mr McNulty’s Hammersmith home was also his constituency home for ACA purposes and that therefore the claims on his Harrow home were not permissible? I raise this as a separate point because I recognise that this raises wider issues, and may be difficult to align with rule 3.2.1, which allows Members from outer-London constituencies the choice of opting to receive the ACA.
Any other points you may wish to make to help me with this inquiry would, of course, be most welcome.
I would be most grateful if it were possible to let me have a response to this within the next three weeks.
Thank you for your help.
29 June 2009
16. Letter to the Commissioner from Rt Hon Tony McNulty MP, 8 July 2009
Thank you for your speedy response to my letter of the 23rd June. I agree that the summary of my best estimate of overnight stays in the constituency home for parliamentary business is a reasonable representation and concludes the work on the diaries.
Two quick points, if I may. I am surprised you are now about to seek the view of the Department of Resources as I assumed that it would have been consulted throughout this process as necessary. It would be helpful to have a copy of the communication with the Department and any response.
52 Mr Tony McNulty
I note what you have said about Mr Rawal and will not repeat what I said in my last letter about the value of this course of action. I am slightly troubled by your reference in the letter of the 29th June to "identifying other witnesses who may have seen you in your house." There are numerous people who would have seen me in my house but this is not what you previously requested. You asked for "any witness evidence about the general patterns of your overnight stays.", and, as I said, the only people able to give this are my parents. I wondered why your letter of the 29th June gives this different emphasis?
I would also ask if you have set any time limit on the responses from those you have written to as I am anxious, as I am sure you will understand, to bring this matter to a conclusion as soon as possible.
Thanks again for your help and expedition in this matter.
8 July 2009
17. Letter to Rt Hon Tony McNulty MP from the Commissioner, 9 July 2009
Thank you very much for your letter of 8 July. I am glad that we have concluded work on the overnight stays.
On your first point, I do not keep the Department of Resources regularly briefed about my complaints inquiries. I am, of course, independent of the Department and need to come to my own views. Equally, I think it is reasonable for me to seek information from the Department at any stage in my inquiry and to invite their comments and advice on the evidence and interpretation of the rules, which I normally do towards the end of my inquiries, as I have on this occasion. I will, of course, copy to you both my letter to them and their reply, and give you an opportunity to comment on their response when I receive it. I have set a target date – which is three weeks from when I wrote to them, which would be about 20 July. But it is fair to say that they currently have quite a heavy workload and I cannot guarantee that they will respond within that deadline, although I know that they will do their very best.
In respect of Mr Rawal, I will, of course, copy to you my letter to him and any response, for any comments which you may wish to make, when I receive that response. I have asked him to reply in three weeks from when I wrote, which would be about 16 July.
I am sorry to have unnecessarily troubled you about the way I referred to other witnesses in my letter to you of 29 June. That reference was intended to be no wider than the specific reference you quote from my letter of 11 June.
I appreciate that you would like this matter resolved as soon as possible and I am working hard to that end. The next step once I have received responses from the Department of Resources and any response from Mr Rawal is to give you an opportunity to comment on those responses. I will at the same time be coming to a view about whether I will need to submit a memorandum to the Committee on Standards and Privileges, although you should draw no inferences from that. It may also be helpful for me to have a formal interview with you before concluding this work, and, of course, I am very ready to take any further points you may wish to make at any time.
I hope that has helped clarify the position.
9 July 2009
18. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 21 July 2009
Thank you for your letter of 29th June to [the Director of Operations]. I am replying on behalf of the Department of Resources.
I deal in turn with the questions you have posed.
Mr Tony McNulty 53
The Department has no records of any discussions or correspondence with Mr McNulty about the arrangements for his Harrow home. This does not mean, however, that such discussions did not take place.
You ask whether it was within the rules of the House for the property for which Mr McNulty made his ACA claims to be the sole residence of another person, and (in the particular case of Mr McNulty) of his parents.
In the Green Books which were in force from 2003 to 2009, Members were "strongly advised" against subletting or renting out any part of a property on which ACA was claimed (this rule applied also to paying guests). If they did so, they were required to notify the Department, who would reduce their claims by the amount of their rental income. However, where rent was not paid, there was no rule which governed who might or might not live in, or stay at, a home on which ACA was claimed. I note that Mr McNulty has said in his letter to you of 21st April that he has never received any income from the Harrow property. I take that to mean that Mr McNulty's parents did not pay Mr McNulty for their occupation of the property. In these circumstances, I do not believe that their occupancy of the house was outwith the rules.
You ask whether the nature and size of the claims Mr McNulty made were within the rules of the House, given that the house was his parents' sole residence. Mr McNulty is correct in saying that there is no minimum number of nights which a Member must spend in his or her additional home for it to qualify as an additional home. So far as value for money is concerned, the total amount claimed by Mr McNulty under the ACA divided by the total number of nights spent at the property from 2002-3 to 2008-9 suggests a cost of around £185 per night. This does not seem to me to be excessive.
However, the Green Book made it clear that Members could not claim under the ACA for the living costs of anyone other than themselves. It appears that Mr McNulty may not have abated the costs which he charged to the House in respect of his parents' occupation of the property. In my view, it would have been appropriate for him to do so in respect of sundry bills, utilities and service/maintenance, and also of council tax if Mr McNulty would otherwise have been eligible for single occupancy discount. The question of mortgage interest is a different one since its level was unaffected by Mr McNulty's parents' occupation of the house. However, it appears from Mr McNulty's letter to you of 23rd June that he may not, in fact, have charged the whole cost of mortgage interest to his ACA.
Finally, you point out that Mr McNulty's main home in Hammersmith was less than 20 miles from his constituency home. You draw attention to the statement in the Green Book of the time that "For the purpose of the ACA, overnight stays within 20 miles of your constituency boundary are regarded as overnight stays within your constituency." You point out that this statement could be read as implying that the Hammersmith home was also Mr McNulty's constituency home, and that claims on the Harrow home were therefore not permissible. I agree that the drafting of this part of the Green Book was not ideal. Essentially the rule was (and is) that eligible Members could claim for overnight stays either at a home within 20 miles of the Palace of Westminster, or at a home within the constituency (or within 20 miles of the constituency boundary). Under this rule, many Members could in theory have houses which simultaneously fulfilled both location criteria. From April 2010, there will be many fewer Members in this position. The current Green Book does not repeat the ambiguity of the previous version.
Please let me know if we can provide any further assistance.
21 July 2009
19. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 22 July 2009
I have now heard back from the Department of Resources with their advice on this complaint about the claims you made for your constituency home in Harrow.
I attach a copy of my letter of 29 June to the Department and a copy of their letter of 21 July.
As you will see, the Department’s view is that the occupancy of the house by your parents was not outside the rules, that the claims you made do not appear to the Department to be excessive, but that some of your claims for the costs arising from your parents’ occupancy should have been abated. You will note also the
54 Mr Tony McNulty
Department’s response to whether your main home was too close to the constituency to allow you to make a claim for your Harrow home.
You will see that, in the second paragraph on the second page of their letter, the Department refers to the section of the July 2006 edition of the Green Book which says, in paragraph 3.14.1:
“The following expenditure is not allowable
• Living costs for anyone other than yourself.”
A similar reference is in the Green Book published in April 2005. That edition did not, however, include the reference in Section 3.3.2 of the 2006 Green Book which I referred to in my initial letter to you of 24 March.
I will need now to come to my own view on these matters. I would first, however, welcome any comments you may wish to make on the Department’s advice and on the application of successive versions of the Green Book rules to your arrangements.
The Department’s letter also notes that you may not have charged the whole cost of your mortgage interest to your ACA. You refer to your costs for 2008-09 in your letter of 23 June. It would be very helpful if you could give me a similar breakdown for each of the previous six years, back to 2002-03 or as much as you have available. Ideally, it would be helpful to know the mortgage interest charged to you for each year, what part of that interest you charged against your ACA, what the council tax was, and whether you charged the full cost of that tax against your ACA.
I am minded to prepare a memorandum to the Committee on Standards and Privileges about this complaint. You should draw no inference from this decision. Before preparing the memorandum, I think it would be helpful for us to have a meeting to go through some of the issues which have been raised. Once I receive your response to this letter, and any comments you may have, I will arrange a convenient time for the interview and write to you again in advance to let you know the interview procedure and the main areas I suggest we cover.
I appreciate we are in the recess, but if you could let me have a response to this within the next three weeks, that would be most helpful.
22 July 2009
20. Letter to the Commissioner from Rt Hon Tony McNulty MP, 28 July 2009
I am grateful for your letter of the 22nd July and the enclosed letters. I note that the Department of Resources has confirmed that the occupancy of my house in Harrow by my parents complies with the rules and that my allowance claims were far from excessive. I also note the wider point made by the Department about the various interpretations of the rules especially rule 3.2.1. and that there is no suggestion that this or any other rule was transgressed.
You will know from our previous correspondence that I have rarely claimed anything beyond mortgage interest and council tax. I would argue, therefore, that the overall costs have been abated to take account of my parents' presence in the house. Over the last five years, I have claimed for utilities, services and maintenance in only two of these years. In 2004/05, I claimed £200 for utilities and £150 for services and maintenance and in 2005/06, I claimed £350 for utilities and £200 for services and maintenance. I made clear in my first letter to you that I have deliberately sought to abate all costs other than mortgage interest and council tax to reflect the letter and spirit of paragraph 1.14.1 in the July 2006 Green Book and 3.3.2 of the earlier 2006 Green Book. Having reviewed the running costs of the house, I estimate that in 2004/05 and 2005/06 these were approximately, and conservatively, £1,200 in bills (£400 gas, £450 phone, £300 electricity and £116 water) and £1000 per year for services and maintenance. In this context, I would argue strongly that the respective claims of £550 and £350 in each year, indeed only in these two years, reflect a significant abatement of the costs claimed.
Mr Tony McNulty 55
I do take the point from the Department that although mortgage interest would be a fixed cost regardless of occupancy, I could have claimed single person discount on the council tax if I had sole occupancy. I think, however, that, as I am married, I would not have claimed the single person discount even if my parents had not lived there and certainly did not think to abate this cost, given the absence of claims on other costs. I believe that the abatement of costs on bills, sundries and services in 2004/05 and 2005/06 more than reflects the value of the single person discount on council tax (£389.65 and £395.97 respectively). From 2006/07 I made no claims at all for bills, sundries and services at all and think that this more than mitigates not abating the cost of the council tax by applying for the single person discount for these years - £432.92 for 2006/07 and £446.83 for2007/08. In 2008/09, I made no claims at all for council tax and my only ACA claim was for mortgage interest.
I did not claim the whole cost of the mortgage interest to the ACA, but this is because I borrowed an additional sum of £30,000 in 2003 that I have always maintained should not be claimed through the ACA, even though it was technically possible under the rules to make claims for some of it. I set out the complete picture below:-
Mortgage Payments Year Total Mortgage Total Mortgage Total Mortgage Interest Interest Claimed — ACA
2004/05 £8,556 £6,363.29 £5,700
2005/06 £11,536 £8,679 £6,117.12
2006/07 £12,556 £10,419.55 £9,500
2007/08 £13,200 £11,769.88 £10,800
2008/09 £11,284 £10,229.4 £7,330
In terms of council tax, I have claimed the full amount for each year until 2008/09 when I ceased to do so.
You have also asked for a rough breakdown of my overall costs as I have already set out for 2008/09. I am not able to do this for all seven years as I have no information to hand for 2002/03 and 2003/04. For the remaining years, I have set this information out in the tables below:-
Total Running Costs Year Mortgage Council Tax Bills Services Total
(est.) (est.)
2004/05 £8,556 £1,558.6 £1,200 £1,000 £12,314.60
2005/06 £11,536 £1,583.88 £1,200 £1,000 £15,319.88
2006/07 £12,556 £1,657.09 £2,500 £1,500 £18,213.09
2007/08 £13,200 £1,739.09 £2,500 £1,500 £18,939.09
2008/09 £11,284 £1,787.34 £2,500 £1,500 £17,072.34
56 Mr Tony McNulty
Mortgage Council Bills Year ACA Interest Tax Services
2004/05 £7,608.60 £5,700 £1,558.6 350
2005/06 £8,251 £6,117.12 £1,583.88 550
2006/07 £11,157.09 £9,500 £1,657.09 0
2007/08 £12,540 £10,800 £1,739.09 0
2008/09 £7,330 £7,330 0 0
To summarise, I set out below my best estimates of total running costs, broken down between the ACA and personal costs — met between my parents and me.
Total Running Costs and ACA claims Year Total ACA Personal Costs
2004/05 £12,314.60 £7,608.6 £4,706
2005/06 £15,319.88 £8,251 £7,068.88
2006/07 £18,213.09 £11,157.09 £7,056
2007/08 £18,939 .09 £12,540 £6,399
2008/09 £17,072.34 £7,330 £9,742
I hope that this now gives you all the information you need. I am about to go on leave and have presumed to ask my secretary to contact your office to arrange a meeting in the week beginning 24th August, if this is convenient for you. However, should you wish to see me earlier than this, please be assured I am prepared to fly back from France for such a meeting.
28 July 2009
21. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 30 July 2009
Thank you for your letter 28 July responding to mine of 22 July, with your comments on the letter of 21 July from the Department of Resources and with the further information I had requested. I am most grateful for this and for such a timely response. I do appreciate it.
As you will know from my previous letter, I will need to come to my own conclusion on this complaint. I will not do so until after we meet, when we can discuss the issues which arise. I will write to you in reasonable time to let you know the main areas I propose we cover. Meanwhile, I look forward to arranging an interview date that is convenient to you.
Could I ask for two points of clarification on the mortgage arrangements which you described in your letter? You say that you borrowed an additional sum of £30,000 in 2003. This is not reflected in the mortgage figures which you have provided. I appreciate that you have not claimed interest on this loan, but could you clarify the nature of the loan – was it in effect an additional and separate mortgage secured on the property?
Finally, could you also explain the total mortgage figures given in your table under mortgage payments. The normal assumption on anything other than an interest-only mortgage is that the total mortgage reduces as the capital is paid off. Your mortgage, however, would appear to have increased in each of the three years after 2004-05. Could you help me on why that is?
Mr Tony McNulty 57
I would be very content to receive a response to this letter, of course, when you return from leave. Thank you again for your help, and I look forward to meeting you so that we can conclude work on this matter.
30 July 2009
22. Letter to the Rt Hon Tony McNulty MP from the Commissioner, 5 August 2009
I am very sorry to have to trouble you with one further point which arises from your letter of 28 July, on which I have been reflecting.
On the last page of your letter you set out your ACA claims for 2004–05 to 2008–09. The figures you give there are not the same as those you originally gave me in your letter of 21 April. Could you explain these differences for me, please?
I think, however, that I have resolved the difficulty I raised in the fourth paragraph of my letter of 30 July about what I took to be your total mortgage figures. The heading clearly referred to mortgage payments, so these payments will increase to reflect increases in mortgage interest rates. Unless I hear from you, therefore, I shall assume that is the explanation for the variations in the total mortgage column in this Table.
It would be very helpful if you could let me have a response on your ACA claim figures by the end of the month so that the facts are clear in advance of our meeting. I will be writing to you nearer the time about the arrangements for our meeting on 3 September.
Thank you again for your help.
5 August 2009
23. Letter to the Commissioner from Rt Hon Tony McNulty MP, 26 August 2009
Thank you for your letters of 30 July and 5 August 2009, responding to my letter of 28 July.
You are correct in your interpretation of the increased mortgage costs queried in the fourth paragraph of your letter of 30 July. In terms of your query about the additional sum borrowed, I can clarify that this was an extension of £30K on the mortgage and paid for from my personal funds.
With reference to your query in the letter of 5 August 2009, I enclose a table showing the accurate position upon reviewing my ACA claims in detail and rectifying the errors that had emerged. I had assumed you would have picked this up in references in the press and apologise for any confusion caused.
Firstly, I noted that I had inadvertently claimed for twelve rather than ten months of Council Tax in the years 2004-05, 2006-7 and 2007-8 and I immediately paid this back in full – a total of £443.31 pence. After discovering this mistake, I wanted to make sure that there were no other errors and took the details of my claims to my accountants. They checked the mortgage interest claims in detail and discovered that I had made errors of assessment (some under and some over) in some of the years involved. Again, I repaid the identified over claim of £2,600 in full as soon as it was identified.
I hope this clarifies matters and I look forward to seeing you on 3 September 2009.
ACA CLAIMS Original ACA Mortgage Council Tax Total Revised ACA Interest overclaim overclaim overclaim
04-05 £9,350 £1,500 £241.40 £1,741.40 £7,608.60
58 Mr Tony McNulty
05-06 £8,251 £8,251.00
06-07 £12,400 £1,100 £142.91 £1,242.91 £11,157.09
07-08 £12,600 £60.00 £60.00 £12,540.00
08-09 £7,330 £7,330
Total £2,600 £444.31 £3,044.31
The original ACA column contains the same figures as the letter of 21st April. The revised ACA column refers to the figures in the letter of the 28th July.
26 August 2009
24. ACA Claims by Rt Hon Tony McNulty MP for his Harrow property as percentage of running costs eligible for reimbursement from ACA
A. Total B. Council C.Bills D.Services E: Total F: Total % of total eligible Tax (estimate) (estimate) eligible claimed eligible mortgage running from ACA running costs interest costs costs claimed from incurred (A+B+C+D) ACA (ie col F as % of col E) 2004-05 £6,363.29 £1,558.60 £1,200.00 £1,000.00 £10,121.89 £9,350.00 92% 2005-06 £8,679.00 £1,583.88 £1,200.00 £1,000.00 £12,462.88 £8,251.00 66% 2006-07 £10,419.55 £1,657.09 £2,500.00 £1,500.00 £16,076.64 £12,400.00 77% 2007-08 £11,769.88 £1,739.09 £2,500.00 £1,500.00 £17,508.97 £12,600.00 72% 2008-09 £10,229.40 £1,787.34 £2,500.00 £1,500.00 £16,016.74 £7,330.00 46%
TOTALS £47,461.12 £8,326.00 £9,900.00 £6,500.00 £72,187.12 £49,931.00 69%
Mr McNulty made no claims for ACA for the Harrow property after December 2008
“Eligible mortgage interest costs” refers to costs which exclude the interest on the additional mortgage Mr McNulty took out in 2003
These figures exclude the repayments for council tax and mortgage interest which Mr McNulty made in 2009. These payments were £2,600 in respect of mortgage overpayments and £444.31 in respect of council tax..
Agreed 3 September 2009
25. Agreed Note of Interview, 3 September 2009
Present:
Mr John Lyon CB (JL)
Rt Hon Tony McNulty MP (TM)
Notetaker
Introduction
JL Thank you for coming. [The notetaker] is here to take the note of our interview. It will not be a verbatim note, but will be fairly full. Once she has done the note she will send it to you can comment on its accuracy. It would then form part of my evidence to the Committee, which you can expect to be
Mr Tony McNulty 59
published.
I have been grateful for all your help with this inquiry. Could I also thank you for your letter of 26 August, for which I was most grateful. Your letter clarified your mortgage interest payments, and if you agree I will append to the note of this meeting a revised version of the table which I sent to you on 25 August.
TM I am content with that.
JL You have my letter setting out the process. Are you content with this, and ready to start?
TM Yes.
Harrow home
JL I’d like to ask you first about your Harrow home. When did you buy it?
TM I bought it in March 1998.
JL Was that then your only home?
TM The situation is slightly complicated. For two years I was living with my parents in their house after my first marriage failed. My then wife had the marital home.
I can’t remember the order of when we sold the marital home, but that gave me the capital to buy my Harrow home. When my parents had to sell their house they had not much equity which partly prompted me to say “Come and stay with me.”
I had recently become an MP and, when bought, this was my one and only home. I spoke to the Fees Office about the options open to me31 and they said there was no problem.
JL Where were your parents before?
TM Near Harrow, in Eastcote.
JL Could you describe the accommodation in Harrow?
TM It is a three-bed semi, of which there are any number in Harrow. It has a shared drive with two garages at the back. At the front it has a porch leading to a hallway and a galley kitchen; there is a lounge at the front and an extension to the separate room at the back. It is therefore larger than the original house had been: the back room is twice the original size. Many of the other houses just have a living room which has been put through.
Upstairs there is a bathroom and two reasonably sized bedrooms and a much smaller bedroom at the front.
Hammersmith house
JL How long had you been in Harrow before you moved to Hammersmith?
TM This is complicated, so forgive me if my memory gets a bit cloudy.
From March 98 I needed a bolthole when I was up in town. At the time I knew my present wife as a friend and I stayed with her a couple of times. She was someone I knew, one of my friends who lived
31 In his comments of 15 September on the note of this interview, Mr McNulty said that he spoke to the Fees Office about “the options open to me in terms of two homes and my parents sharing one.”
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closer in and offered me somewhere to stay. By late 1999 I was staying up to three nights a week and by the time it got to six or nine months before we married in September 2002, I was more or less there more than in Harrow.
The move to Hammersmith happened gradually. When she allowed me to stay there in March 1998 I didn’t know that we were going to get married in four years’ time.
JL When and who first bought the Hammersmith house?
TM My wife bought it in 1994.
JL When did Hammersmith become your main home in ACA terms?
TM It would have been in about 2001, reflecting a shift towards spending as much time there as in Harrow. That really started in May 2002, when I became a Minister.
On reflection it would have been the end of 2001 or early 2002.
JL Could you describe the accommodation in Hammersmith?
TM It is a Victorian terraced house in a cul de sac. It was a maisonette when my wife first bought it. It had two bedrooms and another one in a loft conversion with a bathroom and toilet. In 2003 the basement flat underneath came up for sale and we bought that and reconverted it as part of the main house. We have two studies down there and access to the garden.
Parents
JL I’d like to ask you about your parents’ use of the Harrow home. I should make clear that, following your letter to me of 23 June, I decided I had sufficient information without needing to take evidence from your parents.
When did they move in?
TM In March 1998, pretty much at the start. I had already asked them on the back of the success of the two years when they gave me a billet. They had more or less retired and it felt like the right thing to do. I had a notion about security – although I don’t want to make too much about that – and it fitted in with my family circumstances.
JL Had they lived in their previous house a long time?
TM Quite a long time; they had moved to Wiltshire then returned to London to Eastcote. It wasn’t the best period of their working life and they didn’t have a lot of equity when they came to sell.
Sadly I was in the process of divorce and it made sense for them to come to stay with me. They had sold their previous house and didn’t have enough to live on by themselves.
JL How do you share the accommodation with them?
TM We have the run of the place really. It is big enough for three people to rattle around in. There is a substantial living space. There is a computer and TV in the front room. My parents sleep in one bedroom and I sleep in the other. And the smaller bedroom can be utilised as well. We have good facilities in the kitchen and a long garden.
JL And you spend time there, preparing for meetings?
TM Yes. If my parents are there I can cut myself off in the front room to prepare. It is what attracted me to the house.
In many houses, although they look okay from the front, there is no extension and they have just
Mr Tony McNulty 61
knocked through the living area to create more space.
JL Who chooses the decorations?
TM We arrive at it together really.
For example, my father has been ill recently. I was already half thinking of changing the back extension as the top end of the room is dark with not much natural light, and then we thought that we would reconfigure it when he was in hospital. So we put in wooden floors and shifted the television to the end with the natural light. We managed it while he was in hospital and he first saw the alterations when he came out.
JL What about things like the sofa and television?
TM I replaced the television in my Hammersmith home. The older one was a bit heavy but I put it in the Harrow house, where it goes well in the corner.
JL Why is security of your property such an issue for you?
TM This was long before I went to the Home Office. Whatever happened subsequently I knew I would be spending a long time away from home and I didn’t want to leave the house empty. It is not good for the house or the neighbourhood.
Don’t forget that every three or four years my address is on 80,000 ballot papers. I wanted the property lived in. That was my security concern, that kind of notion.
JL Is security the sole reason your parents are living in your home in Harrow?
TM No, it is broader than that. It is about family circumstances, what I was comfortable with, what I thought was the right thing to do. It wasn’t the paramount factor.
JL What was the paramount factor in your mind?
TM It was my parents’ circumstances, my circumstances, I didn’t want to live on my own, it was the right thing to do, and security and avoiding the house being empty.
JL Before Hammersmith where was your main home?
TM It was in Harrow. I had only that home until I moved into Hammersmith. Earlier I had the marital home. In between I lived in Eastcote and then in Harrow.
JL Are your parents in fact dependent on you?
TM They didn’t want to be absolutely dependent at the start. They were doing bits and pieces of work at that stage. They paid the bills and made a significant contribution. I paid the mortgage, but when the boiler went, for example, we paid between us.
Over the ten years as my parents have worked less and less they have become to a greater extent dependent on me and my brother and the rest of the family. But they weren’t dependent at the start.
Costs
JL May I ask you now about your ACA claims? You have claimed for mortgage interest and council tax. Why did you claim for these and not in general for other items?
TM I was keenly aware of probity issues even ten years ago. I was always clear that I should claim fixed costs and no more. It was what I thought was a fair deal, a notion I had in my head. For example from May 2002 when I had a ministerial driver, I said that if the taxpayer paid for a driver during the week I would pay any travel costs incurred at weekends. So I never claimed travel expenses from my
62 Mr Tony McNulty
allowances throughout my time as a Minister...
JL For two years, you claimed respectively £350 and £550 for utilities, service maintenance and, I think, sundry bills. That was in 2004-05 and 2005-06. The overall claim, however, was less than for most of the other years. Why did you claim for these additional items for those two years?
TM In 2004-5 and 2005-06 I felt I was at the house enough to warrant claiming for some utilities and services.
The Department of Resources has suggested that I should claim the single person discount on the council tax. I didn’t even think about this. But I abated every other claim.
JL As I understand it, you claimed for the full mortgage interest except for the interest on the additional £30,000 you raised in 2003. Is that right?
TM Yes. In my last letter I sent you figures for the interest I did claim.
I chose not to claim any of the interest on the extra £30,000 which I borrowed. I felt it was cleaner not to. I claimed the utilities bills only because I was in the house rather more. Of course there are other costs: the ACA is there to pay for overnight stays, but you aren’t just there overnight and there are other costs incurred through daytime use.
JL You didn’t claim for utilities after 2005-06.Why did you stop claiming then?
TM It got to the stage when I felt it would be fairer and tidier to claim just mortgage interest and council tax. I decided to make up the difference and to do so without claiming.
JL Did you decide to stop claiming because you were financially more able to cope, or because you were using the property less, or what?
TM I was using it as much after 2005-06, but some of the use was for personal and political purposes as well as parliamentary purposes.
It is hard to unravel. Life became more complex when I became a Minister of State in the Department of Transport in 2004, and afterwards a Minister of State in the Home Office, with responsibility for the police and counter terrorism. This dragged me into town more at weekends; I was in the media more.
So from 2005-06 I was using the house less. I stuck to claiming mortgage interest and council tax only. Overall my approach was to be as parsimonious as possible.
JL In your letter of 28 July you said that you did not reduce your council tax claims because you were married. Does your wife spend any appreciable time in the Harrow house?
TM No, she has never spent extended periods there. It was a foible of mine: it didn’t seem right, as a senior local politician, to claim the discount.
JL Can you tell me why you stopped claiming for council tax in April 2008?
TM That was the point when everything over £25 required a receipt. I reflected on my usage and I decided to stop claiming rather than dig out the receipts.32
JL How did you decide what costs you and your parents should meet and what costs the ACA should meet? They were there when you weren’t. Was there any understanding about who paid for what?
32 Mr McNulty said in his comments of 15 September on the interview note that these receipts were “easily to hand”.
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TM Between us, we paid for everything except council tax and mortgage interest. The costs were broadly split according to what was needed.
JL Do you consider, in hindsight, that it would have been helpful to have had a little more formality about the financial arrangements for accommodating your parents, given that you were claiming for the house from the ACA?
TM The arrangement worked.
In part I felt that I had achieved a sensible split by keeping my claims simple, claiming only for fixed costs. For the early years I claimed only for about 70% of the overall costs. But it wasn’t formalised.
Potentially that would have been useful.
JL Did you at any time after your initial discussion with the Fees Office in 1998-99 consider seeking further advice from them about your arrangements, taking account of Green Book rule changes?
TM No, that was the only discussion I had with the Fees Office. I am not sure if there was a formal meeting, but I have no record of this.
I am not sure whether this was before or after buying the Harrow house; it was probably after.
JL Did you feel you needed further discussion at any time?
TM No, my circumstances did change, but I reflected on the advice that had been given to me. I regret that I have no copy or record of this. The discussion then was around the options open to me.
JL Can you tell me what options were considered?
TM They included lodging with the woman who later became my wife; possibly in “term time” only.
Of course I had no idea how my role as an MP was likely to develop. And my relationship flourished and I changed from a lodger to a husband.
JL Did you tell the Fees Office in terms in 1998-99 that your Harrow home would be your parents’ permanent home – their sole residence?
TM I am not sure.33 I can say sincerely that I asked myself what would make my role work best. The second home facility was afforded to us and I asked “Do I need that?”
JL May I ask you about the overclaims you have identified, for mortgage interest and council tax? How did these mistakes come about?
TM I was horrified to find these. I was going through the complaint and I went to the Fees Office to get information about my claims. I found the mistakes with the council tax and then got my accountants to go through my claims. They worked through the numbers and found the mistakes in the mortgage interest claimed in two of the years. There were both under- and over-claims. I have now repaid the overclaims of my own volition. I wanted to be as parsimonious as I could with the allowance.
JL Can you tell me how it came about? How did that happen?
TM It was a silly mistake to make. I used to submit a claim more or less every month. I claimed for twelve
33 Mr McNulty said in his comments of 15 September on the note of this interview that it was “certainly implicit” in his discussions with the Fees Office that his Harrow home would be his parents’ permanent home, and that he was clear about them sharing this property.
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months for council tax, when there were only ten payments.
I also discovered after I worked through the Fees Office claims and double checked them that although I had intended to claim only for the interest on the main part of my mortgage, I had claimed also for the interest on the £30,000. 34 Because of the way the mortgage figures were presented, it wasn’t that clear. But I had made an overclaim. I should have been more careful.
JL Did you send the supporting documents with your claims?
TM I sent in supporting documents every year but the split was not clear in these documents.
JL Do you accept that while you have paid the money back these mistakes were technically a breach of the rules since you claimed for expenditure you did not incur for your parliamentary duties?
TM I accept that there was potentially a breach of the rules. But it was technical, it wasn’t deliberate, I was within the maximum I could have claimed overall.
Rules
JL Given that a constituency home is defined as being one within 20 miles of the constituency, did you ever consider serving your constituents from your Hammersmith home?
TM The brief discussion you had with the Department of Resources was interesting. I believe that the implication was that no Member within 40 miles of London could or should claim the allowance.
But at the time, the allowance was available to outer London Members. I knew the rules and I checked them. I asked myself “Will this help me to do my job?” I took advice. When I read about the 20 mile limit on claiming I took that to pertain to huge constituencies outside London. I like the layered approach we have. Once it was made clear that outer London Members could use the allowance, I availed myself of it.
JL The rules require that expenses must be wholly, exclusively and necessarily incurred for the purpose of performing Parliamentary duties. Are you satisfied that these expenses were necessarily incurred?
TM As you know from looking at my diaries, I have tried to discount all other uses of my home – I took account of just the parliamentary uses. I asked “Am I able to do my job better because of this arrangement?” The answer is yes.
The allowance was wholly exclusively and necessarily used for parliamentary duties – but I used the home for other things as well – for personal and political purposes.
JL Given that your parents were living in your house as their sole residence, why do you think that your expenses were wholly and exclusively incurred on your Parliamentary duties?
TM Having availed myself of the ACA facilities in the first place, I claimed just fixed costs that would have been incurred anyway. Any other costs they or I would pay for.
JL Without your ACA claims, your parents would have had to have met their mortgage costs. So how could your expenses be said to be wholly or exclusively for your Parliamentary duties?
TM In the end the expenses of the second home were related to the function of that second home. They related solely to the fact that I was an MP. If not then other circumstances would have prevailed.
The claims for council tax and mortgage interest were fixed. They would have been incurred even if there was no-one in the house. I would say the claims related solely to my parliamentary duties.
34 Mr McNulty said in his comments of 15 September on the note of this interview that it was possible that he had claimed instead for some of the capital repayment of the mortgage.
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JL But what about ‘exclusively’? If someone else was living in the house surely the expenses were not exclusively incurred for your parliamentary duties. If I were told that I had exclusive use of a room , for example, I would not expect someone else to be using it as well. Is that a fair analogy?
TM If there was another usage it did not impinge.
Looked at the other way round, has the occupancy by my parents impeded me in my use of the property? No, my claims were wholly, exclusively and necessarily for my parliamentary duties.
I was very, very clear that I should claim only for the fixed costs. I could have claimed £23,000 or £24,000 but I didn’t. If I was there on my own my claims for certain costs would have been legitimate.
JL The rules also require that you must not claim for the living costs of anyone else. I have noted the views of the Department that this does not cover mortgage interest – just marginal costs. But what do you say to the alternative argument that mortgage interest – or rent – is a significant part of most people’s living costs and, by claiming the mortgage interest, you were claiming for the living costs of your parents?
TM To be clear, if there is no income or rental then there is no prohibition. The allowances accrued to me under the ACA system and I chose to avail myself of that facility.
JL But what do you say to the view that you should have taken account of the full costs of your parents’ occupancy, not the marginal costs?
TM I take the point.
But has there been a significant contribution from me, not from the ACA? The answer is yes. They were not marginal costs.
I don’t think anything I claimed contradicts the Green Book as it was.
JL In 2006, the rules were added to by specifically providing that you must avoid any arrangements which may give rise to an accusation that you or someone close to you is obtaining an immediate benefit or subsidy from public funds. What do you say to those who suggest that living without paying mortgage interest or council tax (or rent) as your parents did, represents an immediate benefit to them?
TM No. my parents contributed as fully as they could. Given my pattern of claims I have claimed as little as possible. I believe I got the balance right given the rules at the time.
JL But they were living rent free?
TM They were not living there for free. They made a significant contribution through their services. They did a significant good by being there. They helped me with the upkeep and running costs and maintenance. On balance having them there made me able to do my job far better. They helped me by being housekeepers. It was a very big contribution, not just financial.
JL So financially, was their contribution equal to what the rent would have been, on top of their own costs?
TM Maybe, although I hadn’t thought about it that way. They made a significant contribution, and I claimed only for mortgage interest and council tax in most years. All my claims were limited to the fixed costs incurred. My parsimony reflected a concern about their accruing a benefit.
JL Would it have been tidier and cleaner if your parents had made a contribution to the rent?
TM Maybe. I could have formalised a deduction from the mortgage interest and council tax, only for me to set it against a larger claim for other services.
66 Mr Tony McNulty
JL What about the suggestion that your arrangements have indeed given rise to the accusation that someone close to you obtained an immediate benefit – even if you believe it not to be justified? Do you consider that you should have avoided opening yourself to that accusation?
TM I don’t think so. Taking some of the press coverage at face value I can see how it could be seen. But if people take into account the deductions I have made, my parsimony, the fact that I claimed only for fixed costs, and my parents’ contribution, I don’t think the arrangement transgresses.
JL You say in the enclosure to your letter of 20 May that you decided to stop claiming in December 2008 because you had only stayed overnight three or four nights since September. You decided it was “simply time” that you stopped. Why was that?
TM I asked myself “Have I stayed enough nights there?” I was Minister for London and Employment and, for example, for four or five weekends I was always on the television. All that time over the weekend when I might have been in the constituency, I was elsewhere. I just started to feel the danger of non- compliance with the rules. And interest rates meant I could afford not to claim. December 2008 was the last claim I made.
By 2008-09 I was claiming more or less monthly, and I made a conscious decision not to carry on and I intended to formalise it at the end of the financial year. I wrote to the Department of Resources in April to do so. I took account of the Ministerial pay rise and the London allowance.
JL Does the fact that you stayed in Harrow so little last autumn suggest you could have undertaken your constituency duties without a second home?
TM I hope I have made clear throughout the discussion that I had a strict interpretation of parliamentary duties. I was trying to do my job given the change of circumstances.
I changed how I did things then – it doesn’t mean I could have done so for the last ten years. As well as availing myself of the ACA I have had a Ministerial and constituency role, and I have cut my cloth accordingly.
In part it reflects what may be a lesser service to my constituents at the time, reflected by the absence of overnight stays. I was never sure if this reflected a pattern that would continue into the future but I thought I would step away and try out not claiming. It has been a funny year.
JL Do you think you will return to claiming against the ACA for your home again?
TM No, I will not claim again. The House has decided that the allowance will not be available to outer London MPs from 2010. So if that is Parliament’s decision, I will not get back on that horse now.
JL Finally, what do you say to the suggestion that you should have made different arrangements for your constituency home to avoid the accusation that your expenses were not wholly and exclusively for parliamentary purposes because they supported your parents and that your arrangements left you open to the accusation that your parents were receiving an immediate benefit from the arrangement?
TM I don’t accept this, because of my pattern of claims and all the elements I have described in the last 90 minutes. I viewed my role as an MP against the ACA and asked what helps me to do my job in the best way I can in Westminster and the constituency. I complied with the letter and the spirit of the rules in the Green book throughout.
JL Thank you. [The note taker]will write up the note and send it to you to check for its accuracy. This note will be included in my memorandum with all the other evidence I have received. Once I have prepared the factual sections of that memorandum, I shall show it to you. I will then prepare my conclusions and submit the full memorandum to the Committee. I have been most grateful to you for the way you have responded fully and promptly throughout this inquiry.
Is there anything else you want to say?
Mr Tony McNulty 67
TM No, thank you.
Interview concluded at 4pm
3 September 2009
26. Letter to Rt Hon Tony McNulty from the Commissioner, 7 September 2009
Thank you again for coming in for interview on 3 September. You should by now have received a copy of the note of your interview for you to check for factual accuracy.
Following that interview I should be grateful if you would clarify one aspect of your arrangements for claims against the Additional Costs Allowance. In your letter of 24 March you said “I established the nature of my arrangements with the Fees Office in 1998-99.” When we met last week you said that you bought your Harrow home in 1998, that your parents moved in soon afterwards, that it was your “one and only” home [and thus ineligible for claims against the allowances]; and that Hammersmith did not become your main home until “the end of 2001 or early 2002”.
It would be helpful if you could therefore confirm that the discussions which you had with the Fees Office in 1998-9 were about the options open to you, and that you did not implement any of these options or make claims against the Additional Costs Allowance until you established your main home in Hammersmith. If this is the case it would be helpful to know what action you took in the light of the 1998-9 discussions before you changed your arrangements in 2001 or 2002.
I would be most grateful if you could clarify these points as soon as convenient.
7 September 2009
27. Letter to the Commissioner from Rt Hon Tony McNulty MP, 15 September 2009
Many thanks for your letter of the 7/9/09. I have received a copy of the note of the interview and enclose it with my comments.
The discussions I had with the Fees Office covered all the options that were available to me including renting or buying in inner London, the balance in terms of nights between any main home and second home, and the position of my parents sharing. I was absolutely clear with the Fees Office that I was intending to rent in inner London to assist me in pursuit of my parliamentary duties. Subsequently I made claims against the ACA for Hammersmith as the second home where I spent nights during the week in pursuit of my parliamentary duties. This continued until Hammersmith became my main home for ACA purposes in 2001.
I can also confirm that throughout the period of the complaint before you, 2002-2009, Hammersmith has been my main home and the arrangements have been as described in our correspondence.
15 September 2009
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Appendix 2: Letter to the Clerk of the Committee from Mr Tony McNulty, 19 October 2009
I refer to your letter of the 15th October and the copy of the memorandum from the Parliamentary Commissioner for Standards. Thank you for the opportunity to submit a short note of written evidence for the consideration of the Committee.
I welcome the Commissioner’s acceptance that I was within the rules in establishing a second home in my constituency and claiming against parliamentary allowances for this home (paras.66, 67 & 93).
I welcome the Commissioner’s agreement that my expenses for the constituency home were necessarily incurred, except for the over-claims on mortgage interest and council tax (paras. 71 & 73) which I identified back in April/May 2009 and repaid immediately. I would take this opportunity to apologise wholeheartedly to the Committee for these errors.
I note that the Commissioner agrees that, generally, I abated all costs other than mortgage interest and council tax in recognition of my parents’ presence in the home (para.75). I also note his acceptance that the Department of Resources had informed me in 1998-99, and relayed to him in July 2009, the same advice, namely that mortgage interest was a fixed cost and should not form part of any abatement (paras. 75 & 85). I am reassured that the Commissioner acknowledges that this “needs to be given some weight in considering Mr.McNulty’s action in this case.” (para. 85)
I accept the Department of Resources view, set out in July 2009, that the only other way that I could have abated my claims was in terms of the 25% single person discount on the council tax and by not claiming for bills, repairs and maintenance (WE18). I note that the Commissioner concludes that my “claims for utilities and other bills over that period appears reasonable.”(para. 72)
I further accept, as I said in my interview with the Commissioner (WE25, p.59), that a more formal arrangement reflecting the costs of my parents use of the house would have been wise to avoid, as the Commissioner points out, the possibility of an ‘accusation’ of receiving benefit (paras. 79, 82 & 87), but I was also very clear about the arrangement and my abatement, generally, of all remaining costs other than mortgage interest and council tax. I believe that my actions achieved the same ends as a formal agreement and the imposition of a notional or actual market rent. Had I imposed some notional or actual market rent, it would have probably matched the value of my abatements and I would possibly have claimed more in bills and utilities as a consequence of rent being paid (para. 90).
I am grateful that the Commissioner recognises that his conclusion on mortgage interest is “at odds with the advice that I have received from the Department of Resources” (para.84). I sought advice in 1998/99 and sincerely acted within that advice. The same clear advice has again been given to the Commissioner in July 2009 – that mortgage interest is a fixed cost regardless of occupancy. The Commissioner recognises that had I sought further
Mr Tony McNulty 69
advice from the Department of Resources – they would not have advised against my arrangements (para.85). I am clear that I complied with this advice and the rules that pertained at the time and that have been re-iterated by the Department of Resources as recently as July 2009.
I am grateful to the Commissioner for his recognition that my claims were always significantly below the maximum allowed under the ACA and that I have been open and full in my assistance with this enquiry. I am also appreciative of his use of the word ‘mistake’ in para.92. However as I followed the consistent advice from the Department of Resources I respectfully suggest it was not a mistake and that I abated costs as fully as I considered appropriate to keep within the letter and spirit of the rules and this consistent advice.
In conclusion :-
1. I am grateful that the Commissioner has recognised I was within the rules in establishing and claiming against parliamentary allowances for my constituency home;
2. I welcome the Commissioner’s acceptance that my expenses for the constituency home were necessarily incurred except for the careless errors at 5). below;
3. The Committee will note that at all times I have acted within the rules and advice given by the Department of Resources in 1998/99 and re-iterated to the Commissioner in the letter of July 2009 (WE18) ;
4. I have abated all costs other than mortgage interest and council tax in recognition of my parents occupancy of my second home and to offset their living costs, but I accept that I could have gone further in terms of the 25% single person discount on the council tax, as suggested by the Department of Resources ;
5. I accept that I made careless mistakes with claims on both council tax and mortgage interest, repaid as soon as I identified them myself in April/May 2009 and for which I apologise wholeheartedly;
6. I regret that I did not recognise that a more formal agreement would have been wise and preferable to my arrangements so as to avoid the risk of an ‘accusation’ of benefit, but I firmly believe that this would not have saved public money as I abated as fully as I thought appropriate, albeit informally ;
7. I believe that it is neither fair nor reasonable to conclude as the Commissioner has done, given that this conclusion rests on a significant reinterpretation of the rules that the Department of Resources confirmed in July 2009 – just three months ago. I sought to abate all claims other than council tax and mortgage interest as much as I considered appropriate, in line with the advice rendered and in recognition of the position of my parents, probity and the efficient use of public funds – and did so throughout the period concerned.
As the only substantive breach of the rules cited by the Commissioner relies on a complete redefinition of the accepted advice of the Department of Resources relayed as recently as July 2009, I would respectfully ask the Committee to judge me against this advice and not
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on the Commissioner’s redefinition. I have, at all times, acted within the spirit and letter of that advice and the rules more generally, notwithstanding my point about the possibility of further abatement around the 25% single person discount on council tax.
If the re-interpretation of the advice from the Department of Resources is set aside, closer reading of the report leads me to believe that even the Commissioner would have agreed that I acted within the letter and spirit of the current rules and I would ask the Committee to judge me on that basis.
I thank the Committee for the opportunity to comment on the Commissioner’s memorandum and would like to thank the Commissioner for his diligence and courtesy throughout the investigation process.
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Appendix 3: Letter to Mr McNulty from the Clerk of the Committee, 20 October 2009
Thank you for your letter of 19 October.
The Committee met this morning and considered both the Commissioner's memorandum and your evidence. The Committee has asked me to request further information from you regarding your Harrow home.
Specifically, the Committee desires clarification of the purchase arrangements for the Harrow home. It has noted your statement in interview with the Commissioner that "I can’t remember the order of when we sold the marital home, but that gave me the capital to buy my Harrow home. When my parents had to sell their house they had not much equity which partly prompted me to say “Come and stay with me.”." The Committee wishes to have as full as possible a breakdown of the capital contributions to the purchase of your Harrow home.
I would be most grateful to receive a reply on this point as soon as possible and in any event not later than Noon on Monday 26 October.
Appendix 4: Letter to the Clerk of the Committee from Mr McNulty, 21 October 2009
Thank you for your letter of 20 October 2009.
I purchased my Harrow home in 1998 for £135,000 with a £7,000 deposit and the rest on a mortgage.
Please let me know if you require any further information.
Formal minutes
Tuesday 27 October 2009
Members present:
Mr David Curry, in the Chair
Mr Andrew Dismore Mr Chris Mullin Nick Harvey Mr Paddy Tipping Mr Greg Knight Dr Alan Whitehead Mr Elfyn Llwyd
Draft Report [Mr Tony McNulty], proposed by the Chairman, brought up and read.
Ordered, That the Chairman’s draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 19 read and agreed to.
Paragraph 20 read, amended and agreed to.
Paragraphs 21 and 22 read and agreed to.
Paragraph 23 read, amended and agreed to.
Paragraphs 24 to 27 read and agreed to.
A paragraph—(Mr Dismore)—brought up, read the first and second time, amended and inserted (now paragraph 28).
Paragraphs 28 to 30 (now paragraphs 29 to 31) read, amended and agreed to.
Several Papers were appended to the Report.
Resolved, That the Report, as amended, be the Tenth Report of the Committee to the House.
Ordered, That the Chairman make the Report to the House.
[Adjourned till Tuesday 3 November at 9.30 am