House of Commons Committee on Standards and Privileges Mr Andrew Mackay and Ms Julie Kirkbride

Fifth Report of Session 2010–11

Report and Appendices, together with formal minutes

Ordered by The House of Commons to be printed 19 October2010

HC 540 Published on 21 October 2010 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 Kevin Barron MP (Labour, Rother Valley) (Chair) Sir Paul Beresford MP (Conservative, Mole Valley) Annette Brooke MP (Liberal Democrat, Mid Dorset and North Poole) Rt hon Tom Clarke MP (Labour, Coatbridge, Chryston and Bellshill) Mr Geoffrey Cox MP (Conservative, Torridge and West Devon) Mr Jim Cunningham MP (Labour, Coventry South) Mr Oliver Heald MP (Conservative, North East Hertfordshire) Eric Ollerenshaw MP (Conservative, Lancaster and Fleetwood) Heather Wheeler MP (Conservative, South Derbyshire) 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 Andrew Mackay and Ms Julie Kirkbride 1

Contents

Report Page Introduction 3 The Commissioner’s inquiry 3 The Commissioner’s findings: Mr Andrew Mackay 4 The Commissioner’s findings: Ms Julie Kirkbride 7 Conclusion: Ms Julie Kirkbride 9 Mr Mackay’s evidence 9 Conclusions and recommendation: Mr Andrew Mackay 10

Appendix 1: Memorandum from the Parliamentary Commissioner for Standards 12

Complaints against the Rt hon Andrew Mackay and Ms Julie Kirkbride 15

Oral and Written evidence received by the Parliamentary Commissioner for Standards 73

Appendix 2: Email to the Committee from Mr Andrew Mackay, 15 October, 2010139

Formal minutes 140

Mr Andrew Mackay and Ms Julie Kirkbride 3

Mr Andrew Mackay and Ms Julie Kirkbride

Introduction

1. Mr Andrew Mackay was the Member of Parliament for Berkshire East and then Bracknell from 1983 to 2010. His wife, Ms Julie Kirkbride, was the Member for Bromsgrove from 1997 to 2010. They had homes in Bromsgrove and in London. For Parliamentary allowance purposes, the Bromsgrove property was Mr Mackay’s declared main home and Ms Kirkbride’s second home; the London property was Ms Kirkbride’s declared main home and Mr Mackay’s second home.

2. In October 2009, the Parliamentary Commissioner for Standards received a complaint from Mr Michael Goggins, a constituent of Ms Kirkbride, about the Additional Costs Allowance (ACA) claims made by both Ms Kirkbride and Mr Mackay. The complaint against Mr Mackay was that he had wrongly identified the Bromsgrove property as his main home for the purposes of making ACA claims. The complaint against Ms Kirkbride was that she had wrongly claimed against ACA for the cost of building an extension to the same property.

3. The Commissioner has produced a single memorandum reporting on his investigation into the complaints against both Mr Mackay and Ms Kirkbride. This is published at Appendix 1 to our Report. Mr Mackay submitted written evidence, which may be found at Appendix 2.

The Commissioner’s inquiry

4. The Commissioner identifies two issues for him to resolve, as follows:

whether Mr Mackay was acting within the rules of the House in identifying as his main home the Bromsgrove property he shared with his wife and fellow Member of Parliament, Ms Julie Kirkbride, when he knew that she had identified that home as her second home and would claim parliamentary allowances on it.1 and,

whether Ms Kirkbride was within the rules of the House in claiming interest on the increased mortgage she took out in order to build an additional bedroom in her home in Bromsgrove when it was used by her brother principally to assist her with childcare and when no allowance was made by her for the cost of his use of the property.2

5. The Commissioner explains that, while he has considered the complaints against Mr Mackay and that against Ms Kirkbride separately and on their own merits, the two are linked, since, if Mr Mackay were within the rules in identifying the property in Bromsgrove

1 Appendix 1, paragraph 224 2 Appendix 1, paragraph 225

4 Mr Andrew Mackay and Ms Julie Kirkbride

as his main home, then he would need to consider whether Ms Kirkbride was within the rules in claiming for the interest on an additional mortgage to fund the cost of building works at what was, in fact, her husband’s main home.3

6. Both Mr Mackay and Ms Kirkbride argued that the Commissioner should not pursue the complaint, since to do so would put them in triple jeopardy, following the audit of Members’ allowance claims by Sir Thomas Legg and the subsequent appeals process carried out by Sir Paul Kennedy.4

7. Mr Mackay was judged by Sir Thomas Legg’s audit of Members’ ACA claims to have over-claimed in the period 2004–05 to 2008–09.5 Sir Thomas made the same finding in respect of Ms Kirkbride. Sir Thomas concluded that Mr Mackay and Ms Kirkbride jointly obtained a financial benefit by the designation of their main and second homes. He suggested that, had they made different designations, they might each have reasonably claimed up to two-thirds of the full allowance on a shared home. He therefore recommended that each repay one third of the sums they had claimed, £29,243.

8. In dismissing Mr Mackay’s and Ms Kirkbride’s appeals against the finding of Sir Thomas Legg, Sir Paul Kennedy wrote that Sir Thomas’s suggestion that Mr Mackay and Ms Kirkbride could reasonably have claimed up to two thirds of the full allowance was, if anything, generous. Sir Paul did not, however, have any power to increase the recommended repayment and Mr Mackay and Ms Kirkbride each repaid £29,243.

9. The Commissioner considers that, given the seriousness of the allegations, it was right that he should inquire into, and that the House of Commons should have an opportunity to decide on, whether two of its former Members (although they were Members at the time) breached the rules of the House and, if so, whether they should face Parliamentary sanction for their conduct.6 We agree with the Commissioner’s decision.

The Commissioner’s findings: Mr Andrew Mackay

10. The Commissioner’s memorandum shows that Mr Mackay claimed against his ACA for the full mortgage interest and other costs of his London home from 1997 onwards. In the five years from 2004–05 to 2008–09, he claimed and was paid for his mortgage interest a total of £49,230.7 His total claims against ACA during this period came to more than £100,000.8 Information for earlier years is no longer available.9

11. Mr Mackay’s evidence to the Commissioner was that in or around September 1997, shortly after he had married Ms Kirkbride, he held a discussion with the then Head of the Fees Office, who told Mr Mackay that he and his wife could each choose which property to

3 Appendix 1, paragraph 226 4 Appendix 1, paragraph 227 5 First Report from the Members Estimate Committee, Session 2009–10, Review of past ACA payments 6 Appendix 1, paragraph 228 7 Appendix 1, paragraph 140 8 Appendix 1, WE13 9 Appendix 1, paragraph 141

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nominate as their main home and which as their second home. Mr Mackay told the Commissioner that the former Head recommended that Mr Mackay should designate the Bromsgrove property as his main home and claim ACA on the London property and that Ms Kirkbride should designate their London property as her main home. The former Head of the Fees Office told the Commissioner that, while he did not recall what advice he gave, he did not accept that he would have given the advice which Mr Mackay has suggested he gave.10

12. The Commissioner has been unable definitively to resolve this conflict of evidence. Having weighed the evidence, he concludes that—whatever advice the former Head of the Fees Office believes that he gave—Mr Mackay believed, in 1997 and subsequently, that he (and his wife) were acting on the advice they had received from that official in the way they each designated their two homes. He also accepts that Mr Mackay did not at any stage seek to disguise this arrangement.11

13. The Department of Resources has been unable to discover any records which would cast light on Mr Mackay's discussions with the Fees Office in 1997.12 It accepts, however, that it would have been aware—certainly at a senior level—that Mr Mackay and Ms Kirkbride were married, but that it did not question the arrangement by which they funded both their homes from Parliamentary allowances. The Department also accepts that it was reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangement.13 The Department has expressed regret that its original advice, and its subsequent inaction, might have given Mr Mackay comfort in his claims.

14. The Commissioner accepts that, because the rules in 1997 did not seek to define a Member’s main home, Mr Mackay had a choice in the designation of his main home.14 However, he points out that if Mr Mackay had designated the London property as his main home, he could not have claimed ACA for the Bromsgrove property, because it was too far away from his constituency.15

15. Mr Mackay has defended the designation of the Bromsgrove property as his main home on a number of grounds: he was acting on advice from the then Head of the Fees Office; he spent more nights there than in London; and he had close links to, and significant family responsibilities in, the Bromsgrove area.16 He told the Commissioner that in his opinion the designation of his main and second homes was fully within the letter and spirit of the rules of the House.17

16. From June 2003, the rules relating to ACA were amended, to provide that the identification of a Member’s main home was normally a matter of fact, but where a

10 Appendix 1, paragraph 142 11 Appendix 1, paragraph 232 12 Appendix 1, paragraph 144 13 Appendix 1, paragraph 146 14 Appendix 1, paragraph 234 15 Appendix 1, paragraph 235 16 Appendix 1, paragraph 147 17 Appendix 1, paragraph 149

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Member had more than one home, their main home was normally the one where they spent more nights than anywhere else.18 Mr Mackay does not have full records of his overnight stays, but has estimated—and the Commissioner has accepted—that he spent marginally more nights in his main home (Bromsgrove) than in his second home (London).19 In accepting Mr Mackay’s estimate, the Commissioner points out that a small variation in the pattern of overnight stays could have produced a contrary result.20 He therefore considers that Mr Mackay should have taken account of other factors in reaching his decision.

17. Turning to those other factors, the Commissioner points out that Mr Mackay was living with his wife as a married couple and that, from 2000, they were bringing up their child, who was to start at school in London. Ms Kirkbride regarded the London home as her main home. The Commissioner’s view is that the pattern of their use of the two properties and the pattern of their lives does not sustain the argument that they lived separate lives with substantively different usage of each property. He finds it difficult to accept that Mr Mackay needed to maintain a main home in Bromsgrove in order to deal with family business or the affairs of his elderly relatives or to give much weight to Mr Mackay’s childhood links to the Bromsgrove area. The Commissioner concludes:

As an established couple living together, in my judgement the right course would have been for them to have decided together which was their main home and which their second home. I consider that the evidence suggests that the London property was Mr Mackay’s main home, as it was Ms Kirkbride’s, and that he was straining any reasonable interpretation of the rules to suggest otherwise. 21

The Commissioner thus upholds the complaint against Mr Mackay.

18. The Commissioner has thought it right to reach a separate view on whether Mr Mackay’s decision to make claims for his London home could be held to be above reproach—a requirement set out in successive editions of the Green Book, in line with paragraph 15 of the Code of Conduct. He has done this in case we were to disagree with his conclusion that Mr Mackay had wrongly identified the Bromsgrove property as his main home.22 His conclusion is that Mr Mackay’s decisions meant that his claims were not above reproach, because:

Mr Mackay should have recognised that it was not right, or defensible, to come to an arrangement which he knew would mean that parliamentary allowances would be used to cover costs incurred on both his homes. That was, in my judgement, clearly the wrong thing to do. The simple fact is that Mr Mackay’s claims meant that, with his wife, he had ensured that parliamentary allowances subsidised both of

18 Appendix 1, paragraph 237 19 Appendix 1, paragraph 141 20 Appendix 1, paragraph 239 21 Appendix 1, paragraph 240 22 Appendix 1, paragraph 242

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his homes. That was not the purpose of the allowance. It was not in the spirit of the Green Book. And it meant that his claims were not above reproach.

19. In the Commissioner’s view, Mr Mackay’s breach of the rules was founded on “a serious misjudgement which was sustained over more than 12 years.”23 He considers that “it is not acceptable to argue, as Mr Mackay has sought to argue, that he was only acting on the advice of the top official in the Fees Office.”24 Although the Fees Office did not question Mr Mackay’s arrangements, the Commissioner’s view is that it was unwise of Mr Mackay to assume that silence meant well-considered consent.

20. The Commissioner does not think it proportionate to find against Mr Mackay or Ms Kirkbride for failing to register formally with the Fees Office the fact that they shared the two properties. He points out that their arrangements should have been well known to officials, since they made no secret of their designation in their nominations or, since 2003, their individual claims forms.25 He also describes as “perhaps understandable” Mr Mackay’s failure to review his initial decision until it came to light in 2009, although he also describes this failure as unwise.26

The Commissioner’s findings: Ms Julie Kirkbride

21. The Commissioner points out that he received no complaint against Ms Kirkbride about her decision to identify London as her main home and make claims on her Bromsgrove property. He has therefore reached no conclusion on her conduct in this respect or on how far she, as opposed to Mr Mackay, bore some responsibility for what he describes as “the deeply flawed arrangement which existed.”27

22. The Commissioner also concludes that, having found that Mr Mackay broke the rules by designating the Bromsgrove property as his main home, it would be unreasonable to hold that Ms Kirkbride could not claim second home allowances for the same property. 28

23. In 2008, Ms Kirkbride and Mr Mackay extended their joint mortgage on the Bromsgrove property by £50,000, to cover the cost of an extra (third) bedroom.29 Ms Kirkbride claimed from ACA for the interest payments on the new loan, which she was only entitled to do if the extension to the property was necessary in order for her to perform her Parliamentary duties. Ms Kirkbride’s evidence is that the extra bedroom was required in order to provide overnight accommodation for a child carer, which was a legitimate expense to charge against ACA. The basis of Mr Goggins’ complaint against Ms Kirkbride is that her child carer, who is also her brother, was using the Bromsgrove

23 Appendix 1, paragraph 245 24 Appendix 1, paragraph 247 25 Appendix 1, paragraph 248 26 Appendix 1, paragraph 250 27 Appendix 1, paragraph 251 28 Appendix 1, paragraph 252 29 Appendix 1, paragraph 214

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property as his main home and that Parliamentary allowances were therefore being used to provide a benefit to a close adult relative, contrary to the rules.30

24. The Commissioner has found that Mr Kirkbride stayed from time to time in the Bromsgrove property and also in the London property. He provided childcare for the young son of Ms Kirkbride and Mr Mackay. Occasionally, Mr Kirkbride also stayed overnight at the Bromsgrove property by himself in order to assist Ms Kirkbride and her constituency staff with their IT.31 He notes that Mr Kirkbride was registered to vote in the Bromsgrove constituency and that in February 2001, the Bromsgrove property was given as Mr Kirkbride’s usual residential address on the registration form of a company registered for him at Companies House. Mr Kirkbride told the Commissioner that he had been unaware that his accountant had registered the Bromsgrove address with Companies House and that the company had never traded. He confirmed his sister’s evidence that he was on the electoral roll in Bromsgrove so that he could vote for her in elections, but he had a main home elsewhere.32

25. Ms Kirkbride told the Commissioner that her brother’s occasional stays in the Bromsgrove property assisted her with her Parliamentary duties. By providing childcare and IT support, he enabled her to reconcile the demands on her time as an MP with her responsibilities as a mother.33 The view of the Department of Resources is that Mr Kirkbride did not receive a benefit from his occasional use of the Bromsgrove property. Instead, the benefit was to Ms Kirkbride in her capacity as an MP, by enabling her to discharge her Parliamentary role.34

26. The Commissioner notes the conclusion of Sir Thomas Legg’s Review that the additional mortgage of £50,000 on the Bromsgrove property was “conflicted” because the payments “were used to provide accommodation for a non-dependent family member.”35 However, he also notes that Sir Paul Kennedy allowed Ms Kirkbride’s appeal against this finding, because the extra bedroom was to accommodate her child’s carer, and had been properly approved. Sir Paul saw no reason to prevent Ms Kirkbride from recovering the costs of the additional mortgage just because at the time it was envisaged that this child carer would normally be her brother.

27. The Commissioner notes that, from July 2006 to March 2009, the rules allowed Members to claim for the interest on a mortgage taken out to improve the second home.36 However, he points out that, as with any claim against ACA, the additional costs arising from such an improvement still needed to be necessary for the purpose of performing the Member’s Parliamentary duties.37 The Commissioner considers that Ms Kirkbride has established that she met that test, because she had a legitimate need to provide a separate

30 Appendix 1, paragraph 7 31 Appendix 1, paragraph 216 32 Appendix 1, paragraphs 217 and 218 33 Appendix 1, paragraph 221 34 Appendix 1, paragraph 220 35 Appendix 1, paragraph 219 36 Appendix 1, paragraph 254 37 Appendix 1, paragraph 255

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room for the person who looked after her child while she was fulfilling her Parliamentary duties. She also sought and gained approval from the Department of Resources.38

28. The Commissioner concludes, therefore, that Ms Kirkbride was within the rules in claiming interest on the additional mortgage.39 He considers that it would be “an unduly harsh interpretation of the rules” to require a Member to meet the living costs of having a person stay overnight in their home when that person was there to look after their dependent child so that they could perform their Parliamentary duties.40 In his judgment, the additional use of the property by her brother when Ms Kirkbride and her son were not there was not sufficiently regular to suggest that the cost of these stays should have been reflected in the claims Ms Kirkbride made on Parliamentary allowances. The Commissioner has not, therefore, upheld the complaint against Ms Kirkbride.41

Conclusion: Ms Julie Kirkbride

29. We agree with the Commissioner’s decision not to uphold the complaint made against Ms Kirkbride. That complaint related solely to her claims for the cost of building an extension to her second home. Like him, we therefore offer no comment on Ms Kirkbride’s role in the funding from Parliamentary allowances of the two homes she shared with Mr Mackay and we make no recommendation in respect of her.

Mr Mackay’s evidence

30. Mr Mackay sent us his views on the Commissioner’s memorandum by e-mail.42 He told us that he welcomed the following findings in the memorandum:

• that he did not seek, at any stage, to disguise his ACA arrangements;43

• that at all times he and his wife believed they were acting on the advice of the then Head of the Fees Office;44

• that when a Member has more than one home their main home is normally where they spend the most nights and that he spent slightly more nights in the Bromsgrove home;45

• that he has paid a high price for a misjudgement;46

• that it is perhaps understandable that as a busy politician he never reviewed the original decision;47

38 Appendix 1, paragraph 256 39 Appendix 1, paragraph 257 40 Appendix 1, paragraph 260 41 Appendix 1, paragraph 262 42 Appendix 2 43 Appendix 1, paragraph 232 44 Appendix 1, paragraph 232 45 Appendix 1, paragraph 237 46 Appendix 1, paragraph 250 47 Appendix 1, paragraph 250

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• that his arrangements were openly declared and the Department fairly accepted that it was reasonable that from their silence there was no problem.48

31. Mr Mackay also drew our attention to the factual section of the Commissioner’s memorandum and to his e-mail to the Commissioner of 12th September, where he set out why he believed he acted within the rules and in good faith.49

Conclusions and recommendation: Mr Andrew Mackay

32. We have to decide whether Mr Mackay was within the rules in designating his Bromsgrove property as his main home and claiming ACA for his London home. The Commissioner has concluded that Mr Mackay did breach the rules in designating his Bromsgrove home as his main home and that, regardless of this, his ACA claims in respect of his London home also broke the rules, because they were not beyond reproach. The Commissioner has attributed this breach to a “serious misjudgement” by Mr Mackay.

33. In summary, Mr Mackay’s defence is that he genuinely believed and still believes that he was acting in accordance with advice; that he was always open about his arrangements, which were not challenged at the time; and that his claims were consistent with both the letter and the spirit of the rules.

34. We do not accept that, if Mr Mackay was acting on advice from the then Head of the Fees Office, he must have been acting within the rules. Both the Commissioner and, before him, Sir Paul Kennedy have concluded that where, as in this case, a Member received flawed advice, the overriding responsibility for ensuring that his claims were within the rules still lay with the Member. As the Commissioner has suggested, it was unwise of Mr Mackay not to seek fresh advice between 1997 and 2009, as the rules changed.

35. We also note the force of the Commissioner’s conclusion that, if Mr Mackay had recognised that London was his as well as his wife’s main home and that it was not acceptable for him and his wife to claim ACA for both their shared homes, “The result would have been that only his wife, and not he, could have made claims from parliamentary allowances for their Bromsgrove home, a home which was in her constituency and well away from his.”50 Such an arrangement would, in our view, have been closer to the spirit as well as being consistent with the letter of the rules.

36. The matters considered by the Commissioner in his inquiry into this complaint have clearly overlapped with the audit of Members’ ACA claims carried out by Sir Thomas Legg and with the appeal heard by Sir Paul Kennedy. As noted earlier, Mr Mackay has described this as “triple jeopardy.” The Commissioner has pointed out that the audit and appeals process did not enable the House to form a view on whether the rules of the House had been breached.51

48 Appendix 1, paragraph 247 49 Appendix 1, WE56 50 Appendix 1, paragraph 245 51 Appendix 1, paragraph 228

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37. The outcome of the Legg review was that Mr Mackay and Ms Kirkbride each had to repay £29,243 because, in the view of both Sir Thomas Legg and Sir Paul Kennedy, the arrangement of their main and second homes benefited Mr Mackay and Ms Kirkbride as a couple. We regard the question of repayment as having been settled by Sir Thomas Legg and Sir Paul Kennedy in the course of the extremely thorough audit and review processes they undertook. Our task is to decide whether to recommend to the House a Parliamentary sanction.

38. Although many Members, including Mr Mackay and Ms Kirkbride, repaid sums of money which, the audit found, they should not have been paid, no Member received a Parliamentary sanction as a direct consequence of the review. On the other hand, both Mr Mackay and Ms Kirkbride lost their jobs. The effect on their political careers was as if they had been expelled. It remains important to establish whether the rules of the House were broken and, if so, where responsibility lies, but we need to remember that both former Members have paid what the Commissioner has called “a high price.”

39. We conclude that Mr Andrew Mackay breached the rules relating to second home allowances by wrongly designating his home in Bromsgrove as his main home for ACA purposes and because his claims against ACA for his London home were not beyond reproach. In our view, it should have been obvious to Mr Mackay that the arrangement whereby he and Ms Kirkbride each designated the other’s second home as their main home, allowing both to be funded from Parliamentary allowances, was fundamentally wrong. It went beyond the purpose of the rules, which was to reimburse Members for the additional cost of maintaining a second home for Parliamentary purposes. The flaws in the arrangement should have been no less obvious to the Department of Resources and its predecessors, who should not have allowed it. But although this failure on the part of the House authorities may help to explain why Mr Mackay made and never corrected a serious misjudgement, the responsibility remains with him.

40. We are very disappointed that, even after seeing the Commissioner’s full report, Mr Mackay maintains that he did not break the rules, when it is quite clear that he did. Mr Mackay has already paid a high price for making such a serious misjudgment. The very fact that Mr Mackay is no longer a Member of Parliament shows what a heavy political price he has paid. He has also repaid a considerable sum of money. Nonetheless, we expect Mr Mackay, having read our Report, to apologise for the breach in writing. Had Mr Mackay still been a Member of this House, we would have recommended that he apologise on the floor of the House by means of a personal statement and we would have recommended a period of suspension from the service of the House.

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Appendix 1: Memorandum from the Parliamentary Commissioner for Standards

Contents Page

Introduction 15 The Complaints 15 Relevant Rules of the House 17 My Inquiries: relationship to other inquiries 19 My Inquiries: Rt Hon Andrew Mackay 21 Findings of Fact: Rt Hon Andrew Mackay 43 My Inquiries: Ms Julie Kirkbride 46 Findings of Fact: Ms Julie Kirkbride 62 Standard of Proof 64 Conclusions 64 Introduction 64 Rt Hon Andrew Mackay 65 Ms Julie Kirkbride 69 1. Letter to the Commissioner from Mr Michael Goggins, 30 October 2009 73 2. Extract from article in the Guardian, 14 May 2009 74 3. Extract from article in the Birmingham Post, 25 May 2009 75 4. Extract from article in getbracknell newspaper, 14 May 2009 76 5. Extract from article in the Daily Telegraph, 28 May 2009 76

Rt Hon Andrew Mackay 77 6. Letter to Rt Hon Andrew Mackay from the Commissioner, 5 November 2009 77 7. Letter to the Commissioner from Rt Hon Andrew Mackay, 18 November 2009 80 8. Letter to Rt Hon Andrew Mackay from the Commissioner, 23 November 2009 80 9. Letter to the Commissioner from Rt Hon Andrew Mackay, 2 December 2009 81 10. Letter to Rt Hon Andrew Mackay from the Commissioner, 14 December 2009 81 11. Letter to the Commissioner from Rt Hon Andrew Mackay, 22 December 2009 81 12. Letter to the Commissioner from Rt Hon Andrew Mackay, 21 January 2010 82 13. Summary of Rt Hon Andrew Mackay’s ACA/PAAE claims 2004–05 to 2008–09 (figures from the Member) 83 14. Letter to Rt Hon Andrew Mackay from the Commissioner, 26 January 2010 83 15. Extract from the Report by Sir Thomas Legg on his ACA Review, 1 February 2010: Rt Hon Andrew Mackay 84 16. Extract from ACA Repayment Appeals by Sir Paul Kennedy, January 2010: Rt Hon Andrew Mackay 84 17. Letter to the Commissioner from Rt Hon Andrew Mackay, 12 February 2010 85 18. Letter to Rt Hon Andrew Mackay from the Commissioner, 15 February 2010 86 19. Letter to the Commissioner from Rt Hon Andrew Mackay, 8 March 2010 86 20. Letter to Director of Operations, Department of Resources, from the Commissioner, 10 March 2010 87

Mr Andrew Mackay and Ms Julie Kirkbride 13

21. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 17 March 2010 87 22. Letter to Rt Hon Andrew Mackay from the Commissioner, 24 March 2010 88 23. Letter to the Commissioner from Rt Hon Andrew Mackay, 25 March 2010 88 24. Letter to Rt Hon Andrew Mackay from the Commissioner, 29 March 2010 89 25. Summary of Rt Hon Andrew Mackay’s ACA/PAAE claims, 2004–05 to 2008–09 (figures from the Department of Resources) 89 26. Agreed Note of Interview with Rt Hon Andrew Mackay, 9 June 2010 89 27. E-mail from Rt Hon Andrew Mackay to the Commissioner, 9 June 2010 98 28. Letter to Rt Hon Andrew Mackay from the Commissioner, 10 June 2010 99 29. Letter to former Head of the Fees Office from the Commissioner, 10 June 2010 99 30. Agreed Note of evidence from former Head of Fees Office, 17 June 2010 100 31. Extract from e-mail to the Commissioner from Rt Hon Andrew Mackay, 17 June 2010 101 32. Letter to Rt Hon Andrew Mackay from the Commissioner, 23 June 2010 102 33. E-mail to the Commissioner from Rt Hon Andrew Mackay, 6 July 2010 102 34. Letter to Rt Hon Andrew Mackay from the Commissioner, 6 July 2010 103 35. E-mail to the Commissioner from Rt Hon Andrew Mackay, 13 July 2010 103 36. Letter to the former Head of the Fees Office from the Commissioner, 14 July 2010104 37. Letter to the Commissioner from the former Head of the Fees Office, 18 July 2010104 38. Letter to Rt Hon Andrew Mackay from the Commissioner, 21 July 2010 105 39. E-mail to the Commissioner from Rt Hon Andrew Mackay, 2 August 2010 105 40. Letter to Rt Hon Andrew Mackay from the Commissioner, 3 August 2010 106 41. Letter to the former Head of the Fees Office from the Commissioner, 3 August 2010 106 42. Letter to the Commissioner from the former Head of the Fees Office, 8 August 2010 107 43. Letter to the former Head of the Fees Office from the Commissioner, 12 August 2010 108 44. Letter to Rt Hon Andrew Mackay from the Commissioner, 12 August 2010 109 45. Letter to Director of Strategic Projects, Department of Resources, from the Commissioner, 12 August 2010 109 46. E-mail to the Commissioner from Rt Hon Andrew Mackay, 13 August 2010 110 47. Further e-mail to the Commissioner from Rt Hon Andrew Mackay, 13 August 2010111 48. Letter to the former Head of the Fees Office from the Office of the Commissioner, 20 August 2010 111 49. Letter to the Director of Strategic Projects, Department of Resources, from the Office of the Commissioner, 20 August 2010 111 50. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 24 August 2010 112 51. Agreed Note of evidence from the former Head of the Fees Office, 29 August 2010113 52. Letter to the former Head of the Fees Office from the Commissioner, 2 September 2010 114 53. Letter to the Director of Strategic Projects from the Commissioner, 2 September 2010 114 54. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 6 September 2010 114 55. Letter to Rt Hon Andrew Mackay from the Commissioner, 8 September 2010 114

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56. Letter to the Commissioner from Rt Hon Andrew Mackay, 12 September 2010 115

Ms Julie Kirkbride 116 57. Letter to Ms Julie Kirkbride from the Commissioner, 5 November 2009 116 58. Letter to the Commissioner from Miss Julie Kirkbride, 21 January 2010 119 59. Summary of Ms Julie Kirkbride’s ACA/PAAE claims 2004–05 to 2008–09 (figures from the Member) 121 60. Letter to Ms Julie Kirkbride from the Commissioner, 26 January 2010 121 61. Extract from the Report by Sir Thomas Legg on his ACA Review, 1 February 2010: Ms Julie Kirkbride 122 62. Extract from ACA Repayment Appeals by Sir Paul Kennedy, January 2010: Ms Julie Kirkbride 122 63. Letter to the Commissioner from Ms Julie Kirkbride, 11 February 2010 123 64. Letter to Ms Julie Kirkbride from the Commissioner, 17 February 2010 125 65. Extract from BBC News Article, 24 May 2009 126 66. Letter to Mr Ian Kirkbride from the Commissioner, 17 February 2010 126 67. Letter to the Commissioner from Mr Ian Kirkbride, 11 March 2010 128 68. Letter to Mr Ian Kirkbride from the Commissioner, 15 March 2010 130 69. Letter to the Commissioner from Mr Ian Kirkbride, 26 March 2010 130 70. Letter to the Commissioner from Ms Julie Kirkbride, 4 March 2010 130 71. Letter to the Director of Operations, Department of Resources, from the Commissioner, 15 March 2010 132 72. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 25 March 2010 133 73. Summary of Ms Julie Kirkbride’s ACA/PAAE claims, 2004–05 to 2008–09 (figures from the Department of Resources) 135 74. Letter to the Department of Finance and Administration from Ms Julie Kirkbride, 16 June 2008 135 75. Letter to Ms Julie Kirkbride from the Commissioner, 29 March 2010 135 76. Letter to Ms Julie Kirkbride from the Commissioner, 18 May 2010 136 77. Extract from article in the News of the World, 24 May 2009 136 78. Letter to the Commissioner from Ms Julie Kirkbride, 26 May 2010 138 79. Letter to Ms Julie Kirkbride from the Commissioner, 3 June 2010 138

Mr Andrew Mackay and Ms Julie Kirkbride 15

Complaints against the Rt hon Andrew Mackay and Ms Julie Kirkbride

Introduction

1. This memorandum reports on my inquiry into a complaint that Rt Hon Andrew Mackay, then the Member for Bracknell, wrongly identified a property he shared in Bromsgrove with his wife, Ms Julie Kirkbride, then the Member for Bromsgrove, as his main home for the purposes of claims against the Additional Costs Allowance (ACA).

2. This memorandum also reports on my inquiry into a complaint from the same complainant that Ms Kirkbride made claims against her ACA for the costs of an extension to the same Bromsgrove property, which she nominated as her second home, and that those claims were not wholly, exclusively and necessarily incurred for the purpose of performing her parliamentary duties.

3. I have taken the period covered by both complaints to be the financial years from 2004– 05 to 2008–09 inclusive.

The Complaints

4. On 30 October 2009 Mr Michael Goggins of Belbroughton in Worcestershire wrote to me regarding certain claims against the ACA made by Mr Mackay and his wife Ms Julie Kirkbride.1 Mr Mackay and Ms Kirkbride were at the time both Members of Parliament.

5. Mr Goggins drew my attention to an article published by the Guardian on 14 May 2009, which said that Mr Mackay had designated his London home as his second residence, allowing him to claim more than £1,000 a month in mortgage interest payments for the property from the ACA.2 The newspaper noted that this was “in line with many other MPs”.

6. The newspaper said that “[Mr Mackay’s] mistake was to designate as his main home a flat he shares with Kirkbride in a large listed building in her Bromsgrove constituency.” Mr Goggins noted that the newspaper reported that Mr Mackay had said there was nothing wrong with this because he had been brought up in the Midlands and had strong connections with the area. The report stated that Mr Mackay had designated no property in his Berkshire constituency.

7. In relation to Ms Kirkbride, Mr Goggins said, “the question arises as to what if any account should be given to the fact that since 2004 her brother Ian lived at the same address rent free.” Mr Goggins said: “That the same property was to all intents and purposes Ian Kirkbride’s main residence is evidenced by the fact that not only did his name appear on

1 WE 1. Mr Goggins had initially written to me about this matter on 23 October 2009, and had been asked by my office on 28 October to provide sufficient evidence to justify at least a preliminary inquiry. That exchange is not included in the written evidence. 2 WE 2

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Bromsgrove electoral roll since 2004 but that he also ran a business from the same address. Furthermore there is apparently evidence that he spent most of his time there even when Julie Kirkbride wasn't staying there ...” Mr Goggins said that he no longer had the relevant newspaper article.3 He said that in claiming her allowances Ms Kirkbride appeared to have taken no account of the fact that her brother was staying at the same property rent free and “that she was in fact subsidising his cost of living at the expense of the public purse ...”

8. In addition, Mr Goggins said, Ms Kirkbride had “recently” taken out a loan of some £50,000, part funded through the public purse by means of the ACA “in order to build a third bedroom at her constituency home so as her son and her brother no longer have to share the same bedroom when Julie Kirkbride and her family stay over.” Mr Goggins attached an article from the Daily Telegraph of 28 May 2009.4 The article claimed that Ms Kirkbride had “told the parliamentary authorities last year that she needed an extra bedroom to house her ‘growing family’. She was therefore given permission to increase her mortgage by £50,000, leaving the taxpayer to pay the higher interest costs on the loan. However, it emerged that her brother, Ian, lived at the flat and did not pay rent. Her family had not increased in size since 2000.”

9. Mr Goggins said that Ms Kirkbride’s constituency home “is two bedroomed and therefore sufficiently large enough to accommodate her needs and that of her son. It is not incumbent on the taxpayer to provide for the needs of her brother and the same is contrary to the principles contained in the Green Book for the claiming of Additional Costs Allowance.” In addition to the articles from the Guardian of 14 May and the Daily Telegraph of 28 May, Mr Goggins sent me an article from the Birmingham Post of 25 May.5 This made a number of allegations about Ms Kirkbride, and her brother’s use of her Bromsgrove property. He also sent me articles from the newspaper getbracknell of 14 May6 and the Daily Mail of 26 May.

10. Mr Goggins also said that, although Ms Kirkbride insisted that her brother stayed at her Bromsgrove home in order to look after her son, “it should be noted that the provision of childcare is not claimable against allowances.”

11. I wrote to Mr Goggins on 5 November 2009 to let him know that I had accepted his complaints.7 I noted that the essence of his complaint in respect of Mr Mackay was that Mr Mackay had wrongly identified his main home for the purposes of claims against the Additional Costs Allowance, contrary to the rules of the House. I noted that the essence of his complaint against Ms Kirkbride was that she had made claims against her Additional Costs Allowance for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing her parliamentary duties.

3 This was an article in the News of the World of 24 May 2009. See WE 77. 4 WE 5 5 WE 2, WE 3, WE 5 6 Relevant extracts are at WE 4 and WE 5 7 Not included in the written evidence

Mr Andrew Mackay and Ms Julie Kirkbride 17

12. In this memorandum I set out the relevant rules of the House in each case before turning first to some general issues related to my inquiries (beginning at paragraph 27), then to my specific inquiries in respect of Mr Mackay (beginning at paragraph 35) and, finally to Ms Kirkbride (beginning at paragraph 151).

Relevant Rules of the House

13. 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.”

14. The over-arching rules in relation to the ACA which are relevant to the first part of the period covered by this complaint were set out in Section 3 of the Green Book published in June 2003. In his Introduction to that edition of the Green Book, the Speaker wrote:

“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. The Finance and Administration Department is there to relieve Members of the bulk of the day to day administration of Parliamentary allowances whilst helping Members to provide the necessary accountability.”

15. The scope of the allowance was set out in Section 3.1.1 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 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.”

16. Eligibility was set out in Section 3.2.1 as follows:

“You can claim ACA if:

a You have stayed overnight away from your only or main home, and

b This was for the purpose of performing your Parliamentary duties, and

c You have necessarily incurred additional costs in so doing, and

d You represent a constituency in outer London or outside London.”

17. Section 3.3.1, dealing with the location of overnight stays, included the following:

“If your main home is in the constituency, you can claim ACA for overnight stays in London—or in another part of the constituency if reasonably necessary in view of the distance from your only or main home.

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“If your main home is in London you can claim for overnight stays in the constituency.

“If your main home is neither in London nor the constituency you can choose in which of these areas to claim ACA.”

18. Section 3.4.3 provided as follows:

“Please inform the Department if you are claiming ACA in respect of a property which you share with another Member.”

19. Section 3.9.1 included the following definition of ‘main home’:

“Main home

When you enter Parliament we will ask you to give the address of your main home for the purposes of ACA and travel entitlements. It is your responsibility to tell us if this changes. This will remain your main home unless you tell us otherwise.”

...

“The location of your main home will normally be a matter of fact. If you have more than one home, your main home will normally be the one where you spend more nights than any other. If there is any doubt about which is your main home, please consult the Department of Finance and Administration.”

20. The edition of the Green Book published in 2006 is most relevant to the complaint against Ms Kirkbride. In his introduction to that edition, the then Speaker wrote:

“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. In cases of doubt or difficulty about any aspect of the allowances or how they can be used, please contact the Department of Finance and Administration. The Members Estimate Committee, which I chair, has recently restated the Department's authority to interpret and enforce these rules.”

21. That edition also included the following principles in sections 3.3.1 and 3.3.2, which were not included in earlier editions:

“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.

“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.”

Mr Andrew Mackay and Ms Julie Kirkbride 19

22. The 2006 edition reproduced in similar form the provisions of sections 3.1.1, 3.2.1, 3.3.1 and 3.9.1 of the 2003 edition. The provisions on sharing arrangements were however slightly revised as follows in section 3.5.3:

“You must inform the Department if you are claiming ACA in respect of a property which you share with another Member.”

23. Section 3.7.3 of the 2006 edition set out the conditions under which re-mortgaging was permissible:

“Re-mortgaging is permissible if moving to different accommodation or if repairing or improving your existing ACA home.”

“Members should consult the DFA before making any major commitments.”

No such provision had been included in the 2003 Green Book.

24. Paragraph 3.13.1 listed expenditure which was allowable, including:

• “Increases to mortgage costs (ie: re-mortgaging) to pay for improvements to a property ...

• “Maintenance & service agreements

™ necessary repairs to make good dilapidations

™ decoration”.

25. Paragraph 3.14.1 listed expenditure which was not allowable, including the following:

• “Living costs for anyone other than yourself • Interest on any additional mortgages, advances or loans secured on the same property unless required for the repair or improvement of that property • The capital cost of repairs which go beyond making good dilapidations and enhance the property.”

26. Paragraph 3.14.1 also provided:

“Please seek advice on what is allowable before committing to building works of any sort”.

My Inquiries: relationship to other inquiries

27. I wrote separately to Mr Mackay and Ms Kirkbride on 5 November 2009, inviting their comments on the respective complaints.8

8 WE 6, WE 57. For a full summary of my letter to Mr Mackay, see below, paragraph 35. For a full summary of my letter to Ms Kirkbride, see below, paragraph 151.

20 Mr Andrew Mackay and Ms Julie Kirkbride

28. On 18 November, Mr Mackay replied on behalf of Ms Kirkbride and himself.9 He asked me whether I had considered “the serious issue of double jeopardy. We note that Sir Thomas Legg has not scrutinised the second home allowances of our colleagues who were being investigated by you so as to avoid double jeopardy.10 As we are in dialogue with Sir Thomas concerning his provisional findings on issues directly relating to the complaints you raise we would much appreciate your comments and advice.”

29. I replied to Mr Mackay on 23 November, saying that the dialogue he was in with Sir Thomas Legg was a matter for Sir Thomas to consider.11 I told Mr Mackay that he might, therefore, wish to write to Sir Thomas to set out his concerns and to seek his response.

30. Mr Mackay replied on 2 December.12 He said that the complaints had only been lodged with me at the end of October, by which time Sir Thomas had made his provisional findings on issues directly relating to these complaints. Mr Mackay said that he had since been in dialogue with Sir Thomas. Therefore, Mr Mackay said, the specific point was that, to avoid double jeopardy, “surely this matter should be left to Sir Thomas Legg and it is on that which we would appreciate your advice.”

31. I replied to Mr Mackay on 14 December.13 I said that I recognised his concern about going back over ground which he may already have covered in the course of Sir Thomas Legg’s audit. But I said I did not think it would have been reasonable for me to have refused to accept on these grounds complaints properly made to me in accordance with the procedures approved by the House. Nor did I think it would be reasonable in all the circumstances for me now to seek to abandon my inquiry, assuming it was possible under the rules of the House for me to do so.

32. I said that my reasons for this conclusion were as follows. My inquiries would relate solely to the complaints, and not to any other matters in relation to ACA claims made by Mr Mackay and Ms Kirkbride which may have been considered by Sir Thomas. I told Mr Mackay that if I were to uphold the complaints—and I said I had obviously formed no view at all on that—then, unlike Sir Thomas’s audit process, the Committee on Standards and Privileges and the House would have the opportunity to consider and decide if the rules had indeed been broken and, if so, what, if any, sanction to impose. In that event, I said I believed that the Committee would want to take full account of any repayments Mr Mackay had made as a result of Sir Thomas’s audit. I told Mr Mackay that the process was, therefore, different, as were the scope of the inquiry and the range of consequences.

9 WE 7 10 Sir Thomas Legg’s report on his review of the validity of payments of the Additional Costs Allowance from 2004–05 to 2008–09 was published on 4 February 2010 with the First Report of the Members Estimate Committee, Session 2009- 10 (Review of past ACA payments, HC 348). 11 WE 8 12 WE 9 13 WE 10

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33. I said that that I recognised Mr Mackay’s understandable concerns, but I asked, in the light of paragraph 18 of the Code of Conduct for Members of Parliament,14 that he and Ms Kirkbride co-operate with my inquiry and respond to my letters of 5 November.15

34. On 22 December Mr Mackay wrote to me, saying that he had been disappointed to read my letter of 14 December, as he and his wife still strongly believed that my decision “amounts to double jeopardy”.16 However, Mr Mackay told me, if this was my final decision he and his wife would naturally wish to co-operate by responding to my letters of 5 November “to explain why there is no case to answer”. I replied to Mr Mackay on 23 December and confirmed that I would like now to make progress with my inquiries.17

My Inquiries: Rt Hon Andrew Mackay

35. When I wrote to Mr Mackay on 5 November I told him that the essence of the complaint against him was that he had wrongly identified his main home for the purposes of claims against the Additional Costs Allowance, contrary to the rules of the House.18 I asked him about his arrangements for claiming the ACA on his second home from 2004– 05 to 2008–09 inclusive—including the location of his main and second homes and the dates of each designation. I also asked him to let me know the purchase costs of each home and the details of any mortgages which he held or had held on his first and second homes since 2004–05. I asked for information about the nature of the accommodation provided by his main and second homes and the reason why he had identified the property in question as his main home. I asked him to tell me the number of nights he had spent in his designated main home in each financial year from 2004–05 to 2008–09 inclusive, the number of nights he had spent in the home on which he claimed against his ACA, and the number of nights he had spent elsewhere, together with any documentary evidence, including diaries or travel records, which he had used to prepare these figures.

36. I also asked Mr Mackay whether, and if so when, he had informed the Department that he was claiming ACA in respect of a property which he shared with another Member, for the size of his ACA claims in each financial year from 2004–05 to 2008–09 inclusive, together with the main categories under which he had claimed, identifying his mortgage interest claims and what proportion of his total mortgage they represented, and whether at any time he had consulted the then Department of Finance and Administration about his arrangements. I asked him for details of any such consultation, including any documentary evidence he might have.

37. Following our correspondence about the relationship between this and other inquiries,19 Mr Mackay replied to me on 21 January 2010.20 He said that after his marriage

14 The Code of Conduct for Members of Parliament provides at paragraph 18: “Members shall co-operate, at all stages, with any investigation into their conduct by or under the authority of the House.” 15 WE 6, WE 57 16 WE 11 17 Not included in the written evidence 18 WE 6 19 See paragraphs 27–34 above. 20 WE 12

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to Ms Kirkbride he had sought advice from the then Head of the Fees Office about their ACA. The Head of the Fees Office asked about their homes and was told they jointly owned a family house in Westminster and a large apartment in a listed building in Ms Kirkbride’s constituency. Mr Mackay said that he had explained that he had never had a home in his constituency. The Head of the Office had then advised that “as we had two proper homes with a joint mortgage and where we were both on the electoral roll either could be deemed a main home”. Mr Mackay said that the Head of the Fees Office had recommended that Mr Mackay should nominate the Bromsgrove property as his main home and claim ACA on the London home.

38. Mr Mackay told me that this arrangement had been put on file in the Fees Office and ACA payments had been made accordingly. He said that “At all times we declared our second and main home addresses to the Fees Office in a totally transparent way. This was never queried.”

39. The property in Bromsgrove was, said Mr Mackay, “a natural main home for me as I had close links to the Bromsgrove area where my family and friends still live. I was born and brought up in the next door constituencies and look after the interests of two close elderly relatives through our family's longstanding property portfolio based in the area.”

40. Mr Mackay noted that on 20 May 2009 the House rules had been changed with immediate effect to state: “Members who are married to each other must nominate the same main home and are limited to claiming one person’s PAAE between them”. Mr Mackay said that whilst the single claim did not affect him and Ms Kirkbride, as he had already elected to take up the London Costs Allowance due to a rule change for the new financial year, “the introduction of the rule on nominating the same main home confirms this was not previously in place.”

41. Mr Mackay said that during the period in question he had nominated the property in Bromsgrove as his main home and the London property as his second home. Ms Kirkbride and he had bought the London property for £850,000 in 1998,21 taking out a mortgage of £200,000 which they still maintained on an interest only basis. He said they had bought the Bromsgrove home in 1997 for £75,000 “in a very dilapidated state” and had spent more than double the purchase price on restoring it. They had taken out an interest-only mortgage of £180,000 on the Bromsgrove property in 2004. Mr Mackay said that they had further extended the mortgage by £50,000 in April 2008 to cover the cost of an extra bedroom to meet their family’s needs.

42. Mr Mackay said that the accommodation in the Bromsgrove home originally comprised a sitting room, dining room, kitchen, two double bedrooms and two bathrooms. He and Ms Kirkbride had then added a further bedroom to make it three. The London property was a three-bedroom terraced house with three reception rooms, two bathrooms and a study. Mr Mackay added that he rarely spent a night in his constituency “as on Fridays and weekends I prefer to commute between there and my main home which are linked by motorways or dual carriageways for virtually the whole journey. I also regularly

21 The correct date was September 1999. See para 64 and WE 26 below.

Mr Andrew Mackay and Ms Julie Kirkbride 23

visit my constituency from London during the week. As a result, I spend most Friday, Saturday and Sunday nights ... as well as most recesses at my main home.”

43. Mr Mackay said that the figures for where he spent his nights were likely to be estimates, particularly as he did not have an electronic diary or written records for the years in question. However, he said he could give a best estimate for the last calendar year which he believed would also broadly reflect his sleeping patterns in the financial years in question. Mr Mackay said that this estimate would indicate that he spent 155 nights in the Bromsgrove property, 139 nights at the London property, 54 nights on holiday, nine nights on parliamentary business abroad and eight nights in his constituency.

44. Mr Mackay said that he had not informed the Fees Office that he was sharing a property with another Member who was his wife. Mr Mackay said that he had made “the reasonable assumption” that the rule was to identify non-related Members who had come to private agreements to share properties and did not apply to those Members where it was public knowledge that they were married to each other. He said that the mortgage had always been interest-only and he attached a breakdown of his ACA claims, which he said were a best estimate as information provided by the Fees Office “is somewhat confusing”.22 This indicated that Mr Mackay claimed sums in respect of mortgage interest ranging from £8,439 in 2004–05 to £11,968 in 2007–08, a total of £49,230 over the five-year period covered by the complaint.

45. I wrote to Mr Mackay on 26 January.23 I asked him whether he had any documentary or other evidence to substantiate the estimates he had made of the number of nights he had spent in various locations in 2009. I also asked Mr Mackay for more detail about how he fitted his parliamentary duties into his family life. I said that it had been suggested in press reports that Mr Mackay’s son was at school in London. I asked Mr Mackay whether he had dependent children who lived with him; how that operated in terms of how he allocated his time between his two homes; and whether, in the light of his professional responsibilities, Mr Mackay’s living arrangements were significantly different from those of his wife. In particular, I asked Mr Mackay to explain how his main home was in Bromsgrove while his wife’s appeared to be in London.

46. I asked Mr Mackay to let me know the dates of the contacts he had had with the former Head of the Fees Office. I noted that Mr Mackay had reported that his arrangement had been put on file in the Fees Office, and asked whether he had any documents relating to the advice he had sought from that official and to the filed document to which he had referred.

47. I asked Mr Mackay to clarify my understanding of his statement that he did not inform the Fees Office that he was sharing a property with another Member, who was his wife. I said I was finding it difficult to reconcile that with the implication of Mr Mackay’s statement that he had told the then Head of the Fees Office that he jointly owned the two

22 A summary of the figures provided by Mr Mackay is reproduced at WE 13. Figures provided by the Department of Resources are at WE 25. 23 WE 14

24 Mr Andrew Mackay and Ms Julie Kirkbride

properties with Ms Kirkbride. I also asked him whether he had claimed from his ACA for the full mortgage interest on his second home in London.

48. On 4 February the findings of Sir Thomas Legg’s Review of past ACA payments24 and of Sir Paul Kennedy on ACA repayment appeals were published.25 In his conclusions and recommendations on Rt Hon Andrew Mackay, Sir Thomas said that the arrangements entered into by Mr Mackay and Ms Kirkbride “meant that, between them, the couple had no main home which was not funded by the ACA. Throughout the five years of the review period, they both claimed at or close to the full allowance to support their two homes. These arrangements obtained a financial benefit for the couple which appears unintended under the Green Book rules, and as such contrary to the principles governing it. Had they made different designations, each MP might reasonably have claimed up to two-thirds of the full allowance on a shared second home. On this footing, each of them was overpaid by one-third of the maximum ACA for each year of the review period. This is £29,243.” Sir Thomas recommended that Mr Mackay should make a repayment in respect of mortgage interest of that sum, and noted that it had been repaid. Sir Thomas also recommended that Mr Mackay repay other costs which are not the subject of my inquiry. Mr Mackay appealed against Sir Thomas’s findings. Sir Paul Kennedy dismissed his appeal, telling him: “You say that the way in which you and your wife designated your homes was in accordance with advice given by the Fees Office. If so it seems to me that the advice was plainly mistaken, and indeed that you should have recognised it to be mistaken.” Sir Paul said that the arrangements entered into by Mr Mackay and Ms Kirkbride had “lost sight of the purpose of ACA, which was to assist Members to fund the cost of accommodation when they needed a second home in order to fulfil their duties. It was never intended to relieve them of the costs of their main home, and you operated it in such a way as to achieve that result.”

49. On 12 February Mr Mackay responded to some of the questions I had put to him in my letter of 26 January.26 He said he would need a little more time to see if he could find any more information relevant to the remainder. Mr Mackay said that the only dependent child living with him and Ms Kirkbride was their son who attended school in London. The son would normally move with Ms Kirkbride between the London and Bromsgrove properties. Mr Mackay said that the estimated figures he had supplied to me showed that he spent slightly more nights in Bromsgrove than in London. There would be some Sunday nights and days in the September recess (when their son was back at school) when he would remain in Bromsgrove to attend to family commitments, whilst Ms Kirkbride had returned to the London property with their son.

50. Mr Mackay reiterated that he had taken advice about ACA arrangements from the then Head of the Fees Office soon after marrying Ms Kirkbride. However Members were only required to inform the Fees Office they shared accommodation with another Member at a much later date. He “could not believe” that this referred to married couples as it was self

24 Members Estimate Committee, First Report of Session 2009–10, Review of past ACA payments, HC 348, Appendix 1. The relevant extract is reproduced at WE 15. 25 Members Estimate Committee, First Report of Session 2009–10, Review of past ACA payments, HC 348, Appendix 2. The relevant extract is reproduced at WE 16.

26 WE 17, WE 14

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evident, so he did not register the fact at that time. Mr Mackay said that he had always claimed for the full mortgage interest on his second home.

51. I wrote to Mr Mackay on 15 February, asking him to confirm that I was right in taking it from his letters that his pattern of overnight stays was substantially the same as Ms Kirkbride’s except for September each year, when he spent some Sunday nights and, as I understood it, Monday to Thursday nights inclusive in Bromsgrove while Ms Kirkbride and their son were in London so that their son could go back to school.27 I said that presumably Ms Kirkbride returned to the constituency with their son on Friday before returning again to London on Sunday. I said I took it that this arrangement had continued for some three weeks in September/early October before the House returned.

52. On 8 March Mr Mackay replied, saying that what I had surmised was “nearly correct”.28 However “for the avoidance of any doubt” he stated that his pattern of overnight stays was broadly the same as his wife's except for some Sunday nights periodically around the year and some nights during the September recess when he would be at the Bromsgrove property attending to matters concerning his relatives, whilst Ms Kirkbride was in London as their son was attending school. “I would just add that from time to time I might be away on golfing trips when more often than not my wife and son would remain at the London property”.

53. Mr Mackay also answered the remaining questions I had put to him in my letter of 26 January.29 He said that Ms Kirkbride was first elected in May 1997 and they married on 1 August that year. He and Ms Kirkbride had purchased the Bromsgrove property in September 1997 so his best estimate of the date of his meeting with the then Head of the Fees Office would be around that time. Mr Mackay said he could “clearly recall [the then Head of the Fees Office] concluding that meeting by stating he would place this arrangement on file. It was not my experience that such matters were put in writing at that time. However at all times we declared our second and main home addresses to the Fees Office in a totally transparent way. This was never queried.” Mr Mackay said that the figures for the number of nights he had spent in various locations in 2009, which he had given to me in his letter of 21 January,30 were best estimates based on recent memory.

54. Having considered Mr Mackay’s evidence I decided that it would be helpful to have advice from the Department of Resources. I wrote on 10 March to the Director of Operations in that Department, attaching copies of the relevant correspondence and seeking his advice on the complaint.31 I asked the Director if he could advise me in particular on the discussion which Mr Mackay reported that he had had with the then Head of the Fees Office in September 1997, and I asked him for any written records relating to Mr Mackay’s discussions of his and his wife’s circumstances at that time. I also asked the Director whether the Department at any other time gave any consideration to the

27 WE 18 28 WE 19 29 WE 14 30 WE 12 31 WE 20

26 Mr Andrew Mackay and Ms Julie Kirkbride

arrangements under which Mr Mackay claimed for his second home in London, taking account of the claims which Ms Kirkbride was making for her second home in her constituency. I asked the Director whether, in all the circumstances, he considered that Mr Mackay was within the rules in claiming second home allowance for his London home.

55. On 17 March the Director of Strategic Projects at the Department wrote to me on the Department’s behalf.32 The Director told me that that the Department had not been able to discover any records which would cast light on Mr Mackay's discussions with the then Head of the Fees Office in 1997. That official had retired in 1998. Nor did the Department have any records which indicated that any later consideration was given within the Department to the elections which Mr Mackay and Ms Kirkbride made as to their main and additional homes.

56. The Director said the Department was “certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangements.” The Director noted that Mr Mackay's arrangements were the subject of a story in the Daily Telegraph in May 2009, but no action had then been taken by the Department because of the impending review conducted by Sir Thomas Legg.

57. The Director noted that Sir Thomas Legg had concluded that Mr Mackay and Ms Kirkbride had obtained a financial benefit unintended under the Green Book rules and therefore had acted contrary to the principles governing it, and that Sir Paul Kennedy had dismissed Mr Mackay’s appeal against Sir Thomas’s findings.33 The Director said, “I have no reason to dissent from Sir Thomas’s and Sir Paul’s conclusions that Mr Mackay was not within the rules in claiming second home allowance for his London home. I regret that the original advice of the Department, and its subsequent inaction, may have given Mr Mackay comfort in his claims.”

58. On 24 March I wrote to Mr Mackay, with a copy of the Department’s letter of 17 March.34 I attached to my letter the conclusions of Sir Thomas Legg’s review and Sir Paul Kennedy’s determination of Mr Mackay’s appeal.35 I invited Mr Mackay’s comments on the Department’s advice. At the same time, I considered whether I should seek evidence from the former Head of the Fees Office. I concluded that it was not necessary for me to do so. It had been 13 years since the original conversation and 12 years since the then Head of the Fees Office had retired from the service of the House. It might be difficult at that remove to expect him to recall the details of his meeting.

59. Mr Mackay replied to me on 25 March.36 He said, “I can only conclude that this correspondence now takes us back to square one and is proof of my original point that I am facing triple jeopardy on an issue that has already been adjudicated twice by Sir Thomas

32 WE 21 33 See WE 15 and WE 16. 34 WE 22 35 WE 15, WE 16 36 WE 23

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Legg and Sir Paul Kennedy.” Mr Mackay said that he would “for the record” state that he did not agree with their findings, but that he had, along with his wife, repaid £58,486 as they had been requested to do. Mr Mackay said that he had read with interest the response of the Director of Strategic Projects to my inquiries which, whilst accepting the outcome of “the official House of Commons inquiry”, nevertheless appeared sympathetic to his [Mr Mackay’s] case. Mr Mackay said that the Director acknowledged that Mr Mackay and his wife had been given this advice by his Department, that their declarations had been made openly, that it had been “reasonable for [him] to think that the Department had no difficulty with the arrangement and that their inaction gave [him] comfort in making the claims.” Mr Mackay concluded: “I would therefore assume that you will deem this matter concluded.”

60. I wrote to Mr Mackay on 29 March, noting that, to resolve the complaint against him, the issue I had to decide was whether he had been in breach of the rules of the House in the identification of the property near Bromsgrove as his main home.37 I told him that if I were to submit the matter to the Committee on Standards and Privileges, it would need to decide whether it accepted my conclusions and, if so, what, if any, action to take. The consideration of complaints and the consideration of what, if any, penalty was appropriate for a Member who had breached the rules were solely matters for the complaints process. They could not be resolved by the audit of Members’ expenses.

61. I told Mr Mackay that I had taken it from his letter that he did not accept that he had been in breach of the rules of the House in identifying the Bromsgrove property as his main home and, therefore, making claims on his London property. I said that while I had so far considered separately the complaint against Mr Mackay and the complaint against Ms Kirkbride, I believed it would be necessary for me to come to a view on the propriety of the identification of his main home before I could come to a conclusion on the complaint against Ms Kirkbride. I told Mr Mackay that this was because, if I were to find that the property in Ms Kirkbride’s constituency had indeed been his main home, then I would need to consider whether Ms Kirkbride was acting within the rules in claiming for the mortgage interest on the additional mortgage taken out in order to build an extension to that home.

62. I said that I would, therefore, need to explore with Mr Mackay why, despite the findings of the audit and the outcome of the appeal against the decisions from that audit, he considered that the identification of his main home was within the rules of the House. I told Mr Mackay that I thought that this might best be achieved by our meeting so that I could take oral evidence from him on this matter.

63. The Dissolution of Parliament on 12 April followed shortly after this letter. I arranged to meet Mr Mackay as soon as was convenient to him once Parliament had assembled on 18 May. On 3 June I received from the Department of Resources a summary detailing Mr Mackay’s ACA/PAAE claims from 2004–05 to 2008–09.38

37 WE 24 38 A table summarising these claims is at WE 25.

28 Mr Andrew Mackay and Ms Julie Kirkbride

64. I interviewed Mr Mackay on 9 June.39 He confirmed that he had bought his property in Bromsgrove in September 1997 and his current London property in September 1999. He also confirmed that he had bought both properties jointly with his wife, Ms Kirkbride, and that they had a joint mortgage on each property.

65. Mr Mackay also confirmed that around September 1997 he had designated his Bromsgrove property as his main home and had begun to claim against the ACA for his London home. He confirmed that at the same time his wife had designated the London property as her main home, and had begun to claim against the ACA for the Bromsgrove home. In the five years from 2004–05 to 2008–09, Mr Mackay confirmed that he had claimed at or near the maximum of his ACA allowance for his London home. In April 2009, he had ceased claiming ACA on his London property and claimed instead the London Costs Allowance.

66. Mr Mackay said that he had had another London home before purchasing his current London home in 1999; he had claimed ACA on that property “and then things just transferred to the other [London] property.” The additional mortgage for an extension in Bromsgrove had been a joint mortgage—not a new mortgage but an extension to the mortgage. “It was not taken out to meet the full cost of the extension to the flat, but a proportion of it.”

67. Mr Mackay confirmed that his pattern of overnight stays in Bromsgrove was “broadly the same” as his wife’s, except for some Sunday nights during the year and some other nights during the September recess. He told me that normally in September when there was a recess and their son was back at school his wife would be in London with their son. Mr Mackay said he would perhaps be there too or perhaps attending to the family duties relating to his two elderly relatives. He said that normally he and Ms Kirkbride had joint holidays. Each of them might have gone on parliamentary delegations, but these would approximately cancel each other out. He confirmed that he had spent “slightly more” nights in Bromsgrove than in his London property. For 2009, he agreed that he estimated that he had spent approximately 16 more nights a year in Bromsgrove than in London. Asked to confirm that this balance of nights between London and Bromsgrove was a consistent pattern from 2004–05 to 2008–09, Mr Mackay said that there was not a different pattern, although it was not exactly the same in each year.

68. Mr Mackay said that he had got to these figures by trying to work through his current diary. “I don’t have past diaries. But I could say roughly when I was on holiday in past years.” Asked whether the difference in the number of overnights he had spent in each property was marginal, in that, if his estimate had been wrong by only nine nights a year, he would have been spending more nights in London, Mr Mackay said, “That is an approximation I have given you. I am not sure that my definition of marginal is the same as yours. But I never set out to suggest that I stayed massively more in one place than in the other.”

39 WE 26

Mr Andrew Mackay and Ms Julie Kirkbride 29

69. On the relative values of the homes, Mr Mackay said that a London property was always going to be more valuable. He said, “Our London home is a town house with three and a half bedrooms, three reception rooms and two bathrooms. Our constituency home is in a listed building in which we have the largest apartment. We have two reception rooms and three bedrooms, including the extra one, and two bathrooms. They are about the same square footage but the valuation will be higher for the London home because central London prices are higher than North Worcestershire prices.”

70. Mr Mackay confirmed that their son went to school in London and that London was where his wife spent more nights than in Bromsgrove, since she had designated London as her main home. “When our son is at school she is always with him. I am normally with him and I like to be with him but there are times when I cannot be, for example in the month of September.” I asked Mr Mackay why, given the fact that his wife saw London as her main home, and given the nature of the property, the proportion of the nights he had spent there, and their son’s commitments at school there, he had nevertheless thought it right to designate Bromsgrove as his main home, in effect away from his family’s main base. Mr Mackay replied that it was based on the number of nights he had spent there, which had been the principal reason; and also on the advice given by the then Head of the Fees Office when he had gone to see him. “Also, unlike my wife, I was born in Birmingham and brought up in the Midlands.”

71. Mr Mackay said that having received London Costs Allowance from April 2009, he did not continue to designate Bromsgrove as his main home for his travel claims. He said, “I have only ever claimed for travel between Parliament and my constituency. I have never claimed travel to and from my main home. I felt it would be an unreasonable burden on the taxpayer.” Mr Mackay said that April 2009 had been his first opportunity to change when the new rules came in. The London Costs Allowance had increased to £7,500 (taxable). That had been sufficient to cover his mortgage and other costs. There had been a campaign in the local and regional press against Members within commuting distance of London receiving the second home allowance so he had elected to “swap over.”

72. Mr Mackay said that the Bromsgrove flat was at the time of the interview on the rental market, though without “any real interest in it. I don’t know whether we will continue to live in Bromsgrove. We have now both accepted private sector jobs within a short distance of our London home, and we will have to decide whether to retain our home in Bromsgrove. No decision has been taken.” Mr Mackay said that his responsibilities for elderly relatives in the Bromsgrove area were now slightly different. He did not have the same need to be in Bromsgrove as he had eighteen months previously. He said, “The property portfolio is now in the hands of a firm of chartered surveyors and one of my elderly relatives is now in residential care most of the time. I drive up to see them and back, which is difficult but do- able.”

73. I asked Mr Mackay about his contacts with the Fees Office and informed him that I had not yet thought it necessary to consult the then Head of the Fees Office, who had retired in 1998, about this matter. Mr Mackay said that his wife had not joined him in his meeting to discuss his arrangements with the then Head of the Fees Office in about September 1997. She had been a new MP just arrived in the House. He had explained to the then Head of the Fees Office that his circumstances had changed, as he was now married to an MP and

30 Mr Andrew Mackay and Ms Julie Kirkbride

“had no idea what to do with my second home allowance.” He had described the properties as he had described them to me, although there had been one less bedroom in Bromsgrove then. He said that “The Head of the Fees Office said it was straightforward and he told us what to put in place. That is what happened ever since.” His wife and he were “completely transparent. We did not feel we were doing anything wrong. We always filled in our forms correctly. That was why it was a very great shock when it was suddenly suggested that our arrangements were wrong.”

74. Mr Mackay said that he had no idea what arrangements he should have had. “I asked the Head of the Fees Office and the idea was entirely his. I have a very clear memory of the meeting. As far as I was concerned he put a note on the file.” Mr Mackay said that the Director of Strategic Projects had confirmed to me that the Fees Office had not questioned their arrangements, “which gave us comfort.” Mr Mackay said that he had been aware at the time that his wife would be claiming for the London property as her second home. He had gone to see the then Head of the Fees Office on behalf of them both. It had been that official’s suggestion that she should nominate one property and he should nominate the other.

75. Mr Mackay said that he had never thought about the point that, had he identified London as his main home, it would not have been possible for him to have claimed ACA for his Bromsgrove property. He had gone to see “the person in charge at the very top. I had had a number of contacts with him over the years. I asked him what I should do and I did it.” As far as he was concerned he had done everything transparently and correctly. If anything he had always erred on the cautious side. At one point he had been on the Committee on Standards and Privileges. He had always been meticulous about ensuring everything was in place correctly and done transparently.

76. Mr Mackay said that the then Head of the Fees Office had asked him questions about whether he had somewhere in his own constituency, and about the size of the properties, and then the then Head of the Fees Office had said “This is what you should do.” Mr Mackay said that he did not agree with Sir Paul Kennedy that if such was the advice he had been given, it had been “plainly mistaken”.40 Mr Mackay continued, “With respect it is easy to be wise after the event.” He said that he did not agree with Sir Paul because he had gone to get advice, to the Head of the Fees Office. “That advice was perfectly reasonable.” Mr Mackay said that he did not think then that the advice was wrong “and I don’t think so now.” He said that he did not recall saying, as he was quoted in the Guardian on 14 May 2009 as saying of his arrangements, “Looking back now, it does look strange”. On that day, when he had resigned as adviser to the Rt Hon David Cameron, “I was in the middle of a media scrum. If the Guardian say I said it, I accept that I did. There was a complete melee.” Mr Mackay said that “strange” was “not a bad word—better than the other descriptions.”

77. I said that the arrangements had ended up with neither Mr Mackay nor Ms Kirkbride paying for their main homes, and asked why he had not thought that strange at the time. Mr Mackay said he did not accept that it was strange. “I could have been married to a head of a company or a head teacher whose house was paid for separately, and I could still have

40 See WE 16.

Mr Andrew Mackay and Ms Julie Kirkbride 31

claimed for my second home.” Mr Mackay accepted that whatever advice he might have been given, it had been his personal responsibility to act within the rules of the House. “As a Member of Parliament, every claim is your responsibility.” He said that Members are busy people, and that is why he had taken advice. No warning bells had jangled when he had decided on this arrangement, and that was why what had happened on 14 May 2009 was so “horrendous”.

78. To the suggestion that his London home was his main home, Mr Mackay said that he did not accept that the London home was a more substantial property. Its square footage was probably smaller, and he said that I could not go on the valuation, as many MPs would have London flats which were worth more than their properties elsewhere in the UK. “Both are substantial homes and all three of us spent a lot of time in both.” He himself had spent slightly more time in Bromsgrove because he had the additional responsibilities to his two relatives and the property portfolio which he oversaw. He had not thought one way or the other about the possibility that he could have identified his main home differently, but he would not then have been able to claim for his Bromsgrove property. “The idea that Members spend ages thinking about these arrangements is wrong.” Mr Mackay said that he considered that he acted within both the letter and spirit of the rules. “I took advice from the Fees Office and I felt it was all straightforward.” Mr Mackay continued, “Our circumstances were unusual. We were the only married MP couple without coterminous seats. We were an ‘odd couple’ ... If you had coterminous seats you would have one home straddling the two constituencies and one in London.”

79. Mr Mackay said that he did not recall what he meant by his reported comment in the Guardian of 14 May 2009 that, “I have clearly made an error of judgement for which I profusely apologise...”41 He had done seven separate live interviews on that day. “I had a mass of journalists around me and I was asked lots and lots of things.” Looking back he did not feel that he had made an error of judgement. “There was no moment when I sat down and thought that I had made an error. The letter from the Director of Strategic Projects is very powerful. We had every reason to have comfort.” He said that he had had a busy parliamentary career. “I was a pairing whip, chief whip, a senior political and parliamentary adviser; I had a large and vibrant constituency and two families to look after. Did I have time to sit down and consider this and was it reasonable to have done so? Was it something I should have thought about? All my training was to seek advice on what to do from the person at the top. That is what I did.”

80. As to whether he considered that he had made a wrong decision, Mr Mackay said that “I didn’t manufacture a mortgage and claim for that; I didn’t claim for a house a hundred miles away and pretend to be ill. I kept my expenses in good order in every possible respect. Sir Thomas Legg found nothing wrong except this. I made sure I claimed the correct amounts for council tax and that I submitted receipts.” Mr Mackay said that he had believed, and still believed, that he had been acting correctly. To the argument that the Green Book could not have intended a Member to be relieved of the cost of their main home, Mr Mackay said that the Green Book was silent on that as on many other points. Mr Mackay said, “Would it

41 See WE 2.

32 Mr Andrew Mackay and Ms Julie Kirkbride

have been wrong for me to have claimed for a second home if I had been married to someone whose home was supplied by a wealthy relative or someone she worked for?” He said that he did not draw a distinction between that case and the claims he made. He did not accept that the taxpayer funded both his houses. “In our case, the taxpayer has assisted with the funding, with the mortgage interest. The taxpayer has not funded them.” Mr Mackay said he believed that his claims were above reproach.

81. Mr Mackay said that he did not believe that his actions had brought the House of Commons and its Members generally into disrepute, although the Telegraph’s expenses coverage had done so. “We have paid a very high price for what some people think is an error of judgement, both in career terms and in the substantial sum of money we repaid. In my wife’s case the appeal to Sir Paul Kennedy was rightly granted, but we still repaid the best part of £60,000. I don’t believe it was right. But I believe in the rule of law. I always said I would repay what I was asked to even if I didn’t believe I had done anything wrong.” He added that “We have been under double, now triple jeopardy. If this goes to a report to the Committee, I would like you to include in the evidence our correspondence on this.”

82. Mr Mackay said that he was “happy” to answer his wife’s case in respect of the claims which enabled them to have an additional bedroom added to what he considered to be his main home on the basis of his wife’s ACA claims. “She had taken advice from the most senior adviser in the Fees Office. It was quite clear that it was allowed to extend the property to allow a child to have his own bedroom after a certain age. We increased the mortgage to do this but there were greater costs that we incurred. Sir Paul did not uphold Sir Thomas Legg’s views on this.” To the question whether it worried him that he was making substantial improvements to his main home, Mr Mackay said that the arrangement was “entirely within the rules, it was clear that it was allowed to build an extension for this purpose. We had no reason to think of that.”

83. On 9 June, I received an e-mail from Mr Mackay.42 He noted that I had questioned whether it was legitimate for a Member to claim financial support from the taxpayer for both his homes. He suggested that I might wish to consider press reports that senior Ministers claimed ACA whilst also living in “grace and favour” accommodation entirely funded by the taxpayer. “It appears that in some cases there was ‘flipping’ and in others the ‘third’ home was sold. As a consequence in each case the taxpayer was funding both homes.”

84. I wrote to Mr Mackay on 10 June.43 I noted that when we met for the interview I had said that I had not taken evidence from the Head of the Fees Office who was in post in 1997, since I had not considered that necessary. I said that I had now reviewed Mr Mackay’s oral evidence, and had noted the emphasis which he had put on his discussion with this former Head of the Fees Office. I told Mr Mackay that I had concluded that I ought to put the points he had made to me at interview to this official, to see if he was able to confirm Mr Mackay’s recollection of the 1997 discussion.

42 WE 27 43 WE 28

Mr Andrew Mackay and Ms Julie Kirkbride 33

85. I also raised with Mr Mackay one further matter which had arisen from his oral evidence. He had confirmed that he had moved to his current Westminster home in September 1999. That had been some two years after his discussion with the Fees Office in September 1997. I said that Mr Mackay’s evidence was that during that meeting he had described the accommodation in his current London home; that would clearly not have been possible. I asked Mr Mackay to confirm that in fact he had described the accommodation in his previous London home, and to let me know what that accommodation was.

86. Mr Mackay responded to me in an e-mail of 17 June,44 saying that the house was, like his current home, also a townhouse in central London with three bedrooms, two bathrooms and two reception rooms.

87. Meanwhile I had written on 10 June to the official who had at that time been Head of the Fees Office, seeking evidence about the reported 1997 discussion.45 I asked him for his comments on the evidence which Mr Mackay had given me about the discussion, and which I summarised in my letter. I told him that Mr Mackay’s clear recollection was that he had then recommended that Mr Mackay should nominate the home in Mr Mackay’s wife’s constituency as his main home and claim ACA on the Westminster property. I said that I appreciated that this was now quite a long time ago and that he would have had many meetings with Members at that time. But in view of the emphasis that Mr Mackay had put on his meeting with him and the advice he had reportedly given, I asked him if he could confirm or otherwise modify Mr Mackay’s recollection of the meeting.

88. The former Head of the Fees Office responded by telephone to my office on 17 June, and agreed a transcript of that response on 18 June.46 He told me that he could confirm that Mr Mackay had sought his advice concerning his changed circumstances after his marriage to Ms Kirkbride in August 1997. He said that their meeting could have been early in September because he had been out of the country from 15 September to 10 October 1997, but he had no diary reference for Mr Mackay for 1997.

89. The former Head of the Fees Office said that he did, however, recall advising Mr Mackay that requirements for claiming ACA were dependent on which home was deemed to be the main home. Where a Member had more than one home, he said that this was “entirely based on the facts as to the nights spent in one home more than another, and then claiming for the other home on expenses incurred ‘wholly, exclusively and necessarily’ on overnight stays away from the main home...”

90. The former Head of the Fees Office said that Mr Mackay had always deemed his main home as London (Westminster) and could therefore claim for expenditure incurred in his constituency (Bracknell). The reference to being on the electoral roll would normally have determined the main home designation. He could not recall Mr Mackay informing him that he (Mr Mackay) should nominate the home in his wife’s constituency because he did

44 WE 31 45 WE 29 46 WE 30

34 Mr Andrew Mackay and Ms Julie Kirkbride

not believe that they had set up their home in [Bromsgrove] that early in their marriage. “Therefore I could not have advised him to claim Additional Costs Allowance for London (Westminster).”

91. The former Head of the Fees Office said that Ms Kirkbride had not been present at any meeting he had had with Mr Mackay. He had interviewed Ms Kirkbride on the morning of 2 June 1997 after she was elected at the General Election of 1 May 1997 and Ms Kirkbride had informed him that she would be marrying Mr Mackay in early August 1997. He said that “I emphasized, particularly, the requirements for the Additional Costs Allowance and if her home was to be in London then she could claim for expenditure incurred in her constituency (Bromsgrove). I recall highlighting the requirements of defining exactly what was to be the main home. I do not recall Ms Kirkbride even mentioning [the Bromsgrove property].”

92. The former Head of the Fees Office said that he knew that Ms Kirkbride’s induction interview paper had been filed in her personal file, signed by himself on 2 June 1997. He also said that it had been his habit to insert notes in Members’ personal files whenever he had had meetings with Members, or advised them during a telephone conversation as to whether or not a Member could change recorded information on any allowance he or she was claiming. “Unfortunately Members’ files were destroyed during the move from [one office to another] ... so my assertions cannot be confirmed.”

93. He said that he could not imagine that Mr Mackay and Ms Kirkbride would have had different main homes, and so Ms Kirkbride’s main home would also have been her constituency, “hence both would be entitled to claim for Additional Costs Allowance but for London, not each home separately.” The former Head of the Fees Office said that “my recollection of advice given to Mr Mackay, and Ms Kirkbride for that matter, does not concur with Mr Mackay’s as stated in his evidence to you.” He also said that “when the debacle of Members’ expenses broke last year, Mr Mackay rang me at home at 9.15am on the very day he gave an interview to the television (Sky I believe). He wanted me to provide authority (retrospectively) stating that I personally as Accountant (Head of the Fees Office) had advised him on his parliamentary allowances and that I had agreed with all his actions as being within the rules. I advised him that I was unable to do so and that I had retired in October 1998.”

94. I wrote to Mr Mackay on 23 June, attaching a copy of my letter of 10 June to the former Head of the Fees Office and a copy of his evidence, signed on 18 June.47 I noted that the former Head’s recollection of the advice he had given him and Ms Kirkbride did not accord with Mr Mackay’s evidence to me. I asked Mr Mackay when he had started to live in his Bromsgrove property, given the witness’s belief that it was not until 1998.

95. I also noted the reference of the former Head of the Fees Office to a telephone call in early May 2009 in which he said Mr Mackay had asked him to provide “authority (retrospectively)” to a statement that he had advised him on his parliamentary allowances and that he had agreed with his actions as being within the rules. I noted that the former

47 WE 32, WE 29, WE 30

Mr Andrew Mackay and Ms Julie Kirkbride 35

Head of the Fees Office had said that he had advised Mr Mackay that he was unable to do this, and I asked Mr Mackay for his recollection of the conversation, as well as confirmation of the date when it had taken place. I also asked Mr Mackay why he had not previously mentioned this telephone call and the response of the former Head of the Fees Office, which would appear to have been relevant to Mr Mackay’s evidence.

96. Mr Mackay responded to me on 6 July.48 He told me that he had rung the former Head of the Fees Office not to obtain “authority (retrospectively)” but “to have him confirm my very clear recollection of our conversation in September 1997.” The former Head had told him at that time that following evidence he had provided in other cases involving Members and the Parliamentary Commissioner he had been told by the “House Authorities” not to speak to Members. The former Head had also told Mr Mackay that as he had dealt with so many Members he could “no longer recall the details of our case but would have left instructions to be followed on file.” As this exchange had not thrown any further light on his case, Mr Mackay said, it had “never occurred to me to mention it to you. Perhaps I should have done so as it does clearly illustrate how I rightly relied on advice from the then Head of the Fees Office.”

97. Turning to the response to me from the former Head of the Fees Office, Mr Mackay said that he could confirm that he and Ms Kirkbride had moved into the Bromsgrove property immediately on completion and had lived there “in some discomfort” whilst refurbishment was carried out. He also confirmed that throughout the period in question they were both on the electoral rolls in Bromsgrove and Westminster.

98. I wrote to Mr Mackay on 6 July.49 I noted that I had now received two different recollections of his meeting with the then Head of the Fees Office in September 1997, and asked him, therefore, whether he wished to modify in any way his recollection of the discussion.

99. Mr Mackay responded to me in an e-mail of 13 July.50 He told me that he and Ms Kirkbride had moved into the Bromsgrove property immediately on legal completion which, as he recalled, was in September 1997, but that this could be confirmed in the Land Registry records as he no longer had the paperwork.51 He told me, “I do not wish to modify in any way my clear recollection of the discussion in light of what [the former Head of the Fees Office] has told you. However I would comment that there is only one clear factual disagreement. In the telephone call of May 2009, I vigorously dispute that I asked for ‘retrospective’ authority but instead asked him to confirm my very clear recollection of our conversation in September 1997.”

100. Mr Mackay also said that he believed that he had confirmed that the recollection of the former Head of the Fees Office had been mistaken in terms of when he and Ms Kirkbride had purchased the Bromsgrove property. Mr Mackay noted that the former

48 WE 33 49 WE 34 50 WE 35 51 My office confirmed this date through Land Registry records.

36 Mr Andrew Mackay and Ms Julie Kirkbride

Head had stated that he could not “imagine that they would have different main homes”. Whilst this was contrary to this official’s advice to him in September 1997, Mr Mackay said that he did accept that—as the former Head of the Fees Office had said to him during their telephone conversation in May 2009—”after such a passage of time he could no longer recall the details of our case. It could well be that now after lurid press reports of our case this is the view he holds today.”

101. On 14 July I sent the former Head of the Fees Office the responses I had received from Mr Mackay to his evidence about his meeting with Mr Mackay in September 1997 and his telephone conversation with Mr Mackay in May 2009, and sought his comments.52

102. The former Head of the Fees Office replied to me on 18 July.53 In respect of the phone call of May 2009, he said that “My inference of Mr Mackay's call was that he sought reassurance in 2009 of my advice to him of September 1997 and any authoritative letter I may have retained since that date—a period of 11 years plus and hence ‘retrospective’.” On the issue of Mr Mackay’s residence in the Bromsgrove property, the former Head of the Fees Office said that it appeared that the “critical date here is indeed September 1997 which should, therefore, be the commencement date of Andrew Mackay's claims for ACA expenditure incurred wholly, exclusively and necessarily on the Westminster home”. He continued that this would also mean that from the same date Ms Kirkbride should have claimed ACA for London as her main home was in her constituency. He recalled that he had spoken to Ms Kirkbride only on 2 June 1997—her induction interview—some three months before the Bromsgrove property had ever been mentioned. He concluded that “my earlier evidence does not need to be changed except, perhaps, for the deletion of the word ‘retrospectively’. In which case Andrew Mackay and I differ as to the advice I provided in 1997.”

103. I wrote to Mr Mackay on 21 July.54 I noted that the former Head of the Fees Office stood by the substance of his previous evidence. I said that while I would record that witness’s comments on his reference to “retrospectively”, I proposed to keep these words in his original evidence.

104. In an e-mail of 2 August Mr Mackay told me that he was pleased that the former Head of the Fees Office “now understands the date we moved into the Bromsgrove property which means, not surprisingly given the passage of time, that his recollection was incorrect. I also note that he thinks ‘perhaps the word “retrospectively” be deleted.’”55Mr Mackay said that he had a very clear recollection of the advice that official had given him in September 1997 “and that is precisely why my first reaction was to ring him on that crucial day in May 2009”. Mr Mackay noted that I had sent the former Head of the Fees Office only an extract from his e-mail of 13 July. He said that, if that did not include the paragraph concerning the evidence of the Director of Strategic Projects, he believed this might have affected his

52 WE 36, with an extract from WE 35 and WE 33 53 WE 37 54 WE 38 55 WE 39

Mr Andrew Mackay and Ms Julie Kirkbride 37

answer to my question, which referred to the suggestion that he had been influenced by the press coverage.

105. I wrote to Mr Mackay on 3 August, explaining that I had not sent to the former Head of the Fees Office the final paragraph of Mr Mackay’s e-mail to me of 13 July, referring to the advice of the Director of Strategic Projects, because I wanted the evidence of that witness about his conversations with him, rather than any comments on the views of the Director.56 But, in view of Mr Mackay’s suggestion that with that knowledge, the answer in that witness’s letter of 18 July might have been different, I said I was now putting the matter to him. I said that Mr Mackay’s e-mail of 13 July quoted only part of the relevant paragraphs of the Director’s letter of 17 March and that I was sending him the full relevant extracts.

106. I told Mr Mackay that the evidence from the then Head of the Fees Office had identified for my inquiry his May 2009 telephone call to him. I had not, of course, been aware of that telephone call before I had received the witness’s evidence and so did not raise it in interview with Mr Mackay. I asked Mr Mackay again why he had not told me about such an apparently important telephone conversation which, he would have known, did not corroborate his recollection of the advice he had received.

107. I wrote also to the former Head of the Fees Office on 3 August, enclosing copies of the responses I had received from Mr Mackay.57 I said that Mr Mackay’s e-mail of 13 July had quoted part of a letter from the Director of Strategic Projects in the Department of Resources.58 I told the witness that the full relevant quotation was:

“I am afraid that we have not been able to discover any records which would cast light on Mr Mackay's discussions with the then head of the Fees Office in 1997 (that official retired in 1998). Nor do we have any records which indicate that any later consideration was given within the Department to the elections which Mr Mackay and Ms Kirkbride made as to their main and additional homes.

“The Department was certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangements.”

108. In view of the remark in Mr Mackay’s e-mail to me of 2 August, I asked the former Head of the Fees Office whether the evidence from the Director of Strategic Projects which I had quoted above in any way caused him to modify his answer in his letter of 18 July,59 or indeed any other part of his evidence.

56 WE 40 57 WE 41 58 WE 35 59 WE 37

38 Mr Andrew Mackay and Ms Julie Kirkbride

109. The former Head of the Fees Office replied to me on 8 August.60 On the question of the evidence provided to me by the Director of Strategic Projects, and which I had shown him,61 the former Head said: “This evidence I had not seen previously so it could not have affected my evidence in any way”. He said that there had been a “disposal of all the Members’ personal files maintained by the Fees Office when they moved ... some time in 1999 or 2000. Hence there was no proper evidence of action taken regarding Members’ details— changes in addresses, travel arrangements, office and employees—which covered a period of more than 40 years.”

110. The former Head of the Fees Office noted that Mr Mackay had stated that both he and Ms Kirkbride “declared openly their positions in respect of claiming ACA and that the Director of Strategic Projects felt that, in the absence of any comment from any official, it was reasonable for Mr Mackay to infer that all was well. If those declarations were merely their separate monthly claims and in the absence of any knowledge of what was or not agreed in September 1997, plus the added absence of any prior audit (another change brought in by the Director-General of Resources ...) I fail to see how that inference could be made.” The former Head said that he did not even know whether anybody in the office responsible for “payments” would necessarily have known that Mr Mackay and Ms Kirkbride were indeed Mr and Mrs Mackay. “Nor do I know whether or not any subsequent examination of their particular ACA claims were carried out by the Compliance Section after their payments had been made.”

111. The former Head of the Fees Office continued by saying that Mr Mackay had asserted throughout that his main home and that of Ms Kirkbride had been the Bromsgrove property since September 1997. “It follows, therefore, that both should have stated so and claimed for the appropriate expenditure incurred on their London home. It seems to me that it is inconceivable for each of them to have separate ‘main homes’ and thus be entitled to claim for both of their homes. I do recall that at no time during the period October 1997 to September 1998 did either Member send their ACA claims to me personally to ensure that they were complying with whatever advice I may have given. ... In the light of all the evidence now supplied by me—and Mr Mackay’s comments thereon—it is inconceivable to even suggest that I could have—or would have— advised Mr Mackay to take the action he has taken.”

112. The former Head of the Fees Office said that the action taken by Mr Mackay and Ms Kirkbride reflected that whilst Mr Mackay’s claims could be accepted as correct, in his view Ms Kirkbride’s were incorrect, based on “the false premise that her main home is in London and that she is entitled to ACA in respect of the expenditure incurred on their home in ... her constituency. There is, therefore, no reason for me to change my evidence, for Mr Mackay is wrong in his recollection of my advice given in September 1997”.

113. I replied to the former Head of the Fees Office on 12 August.62 I said that in view of his comments on the extract from the evidence of the Director of Strategic Projects, I would be

60 WE 42 61 WE 21 62 WE 43

Mr Andrew Mackay and Ms Julie Kirkbride 39

asking the Director for his response to those points. I told the former Head of the Fees Office that his letter went beyond the matters which I had raised with him and, indeed, beyond the matters which I was considering in this complaint. I said that I had noted his comments on whether Mr Mackay and Ms Kirkbride each correctly identified their main home, but that I would need to form my own conclusions on whether Mr Mackay properly identified his main home on the basis of all the evidence I had received.

114. On the same day, 12 August, I wrote to the Director of Strategic Projects, attaching the evidence I had received from the former Head of the Fees Office.63

115. I wrote also to Mr Mackay on 12 August.64 I attached a copy of the response of 8 August from the former Head of the Fees Office.65 I noted that he had concluded that there was no reason for him to change his evidence, for Mr Mackay was “wrong in his recollection of my advice given in September 1997.”

116. Mr Mackay replied to me by e-mail on 13 August.66 He said that it would be best to respond now to “certain inconsistencies and inaccuracies” in the response to me from the former Head of the Fees Office. Mr Mackay said that he felt certain that he had not implied in his previous reply to me that the Bromsgrove property had been the main home for both him and Ms Kirkbride. It had never been set out that married couples should always have the same main home, hence the rule changes voted through in May 2009.

117. Mr Mackay said that it was “surprising” that the former Head of the Fees Office “during the full first year of our claims ... raised no queries”. Mr Mackay noted that the former Head of the Fees Office suggested his staff might not have been aware he and Ms Kirkbride had been married. “Surely this is inconceivable bearing in mind the nature of the ‘Westminster village’ and considerable publicity when we married...” Mr Mackay repeated that he was “absolutely clear what advice [the former Head of the Fees Office] gave me in September 1997 and would confirm this under oath. That is why when these issues were first raised with me I immediately contacted him to confirm that advice.”

118. On the same day, 13 August, Mr Mackay sent me a second e-mail in answer to my question why he had not told me about his conversation with the former Head of the Fees Office in May 2009.67 He said that when he had rung the former Head of the Fees Office in that month he had told Mr Mackay that after giving informal evidence in another case he had been told by “the House Authorities” not to speak to Members. Mr Mackay noted that the former Head had added that he could not recall what advice he had given to Mr Mackay but that afterwards he would have made a file note to assist his staff. Mr Mackay said that as this had made no material difference to his case it had never occurred to him to mention the conversation.

63 WE 45 64 WE 44 65 WE 42 66 WE 46 67 WE 47

40 Mr Andrew Mackay and Ms Julie Kirkbride

119. My office wrote to the former Head of the Fees Office on 20 August providing details of Mr Mackay’s e-mails of 6 July and 13 August and seeking the former Head’s comments.68 This letter noted that in his 6 July e-mail Mr Mackay had said: “He [the former Head of the Fees Office] told me that following evidence he had provided in other cases involving Members and the Parliamentary Commissioner he had been told by the House Authorities not to speak to Members. He added that anyway as he dealt with so many Members he could no longer recall the details of our case but would have left instructions to be followed on file.”69 Mr Mackay’s e-mail of 13 August read: “When I rang [the former Head of the Fees Office] in May 2009 he told me that after giving informal evidence in another case he had been told by the House Authorities not to speak to Members. He added he could not recall what advice he gave me but afterwards would have made a file note to assist his staff.”70

120. My office wrote also to the Director of Strategic Projects on 20 August, telling him of Mr Mackay’s comments on the statements made by the former Head of the Fees Office”.71 At my request they also asked the Director when it had become a requirement for Members to indicate their second homes on each relevant claim form and to sign a form designating their main and second homes.

121. The Director of Strategic Projects responded to me on 24 August.72 He said that he wished to correct some of the references made by the former Head of the Fees Office. He said that “There was no wholesale disposal of Members’ personal files, though it is possible that documents were not retained which ought to have been. This may explain the absence of any record of a conversation between Mr Mackay and [the former Head of the Fees Office].”

122. The Director told me that no policy of “absence of prior audit” had been introduced by the current Director General of Resources. The Director noted that in my letter to him, I had said that the former Head of the Fees Office had said that “he does not know whether anybody in the office would necessarily know that Mr Mackay and Ms Kirkbride were married.” In fact, the Director noted that the former Head of the Fees Office had said that he did not know “whether anybody in the office responsible for ‘payments’ would necessarily know that Mr Mackay and Ms Kirkbride” were married. This was an important difference. “The junior officials responsible for paying allowances may indeed not have known about such matters, but the framework within which allowances were authorised was set by more senior officials who would have known when Members were married to one another.”

123. The Director said that from the extract which I had sent him, he was not clear whether the former Head of the Fees Office contested Mr Mackay's recollection of their September 1997 discussion. But even if no such discussion had taken place, “it should have been incumbent upon senior managers in the then Fees Office to look at unusual circumstances

68 WE 33, WE 47, WE 48 69 WE 33 70 WE 47 71 WE 49 72 WE 50

Mr Andrew Mackay and Ms Julie Kirkbride 41

such as those of two Members married to one another so as to ensure that they were properly advised and that the purpose of ACA was being properly followed.”

124. He noted that Sir Paul Kennedy accepted (in relation to Ms Kirkbride) that “the Fees Office did know what was going on because it authorised payments in respect of your claims”. The Director said that he respectfully agreed with Sir Paul’s view.

125. The Director said I had referred to Mr Mackay’s evidence in my letter of 21st January 2010, that Mr Mackay had not informed the Fees Office that he had been sharing a property with another Member who was his wife. He said he had inferred that this statement had been made in response to a question asking Mr Mackay whether he had made a formal notification when the request to do so first appeared in the Green Book of 2003. “Despite him not having done so, the clear implication to me of the early part of his letter of 21st January is that he openly discussed his and Ms Kirkbride’s living arrangements with [the then Head of the Fees Office].”

126. The Director said that in sum, the evidence of the former Head of the Fees Office did not cause him to change his original conclusions that it had been reasonable for Mr Mackay to have inferred that the Department had no difficulty with the arrangements. He noted that I had asked for a response to the former Head’s suggestion about a Compliance Section check, and assumed that the former Head was referring to a section in the Department established in 2005 and known as the Quality Assurance Team. “During 2007 and 2008 this team was tasked to examine the claims of about a fifth of Members randomly chosen each year. Neither Mr Mackay nor Ms Kirkbride was among the Members checked during those years. The systematic examinations ceased in 2009.”

127. The Director concluded that it had become a requirement for Members to indicate their second homes on each relevant claim form after the publication of the 2003 Green Book. In 1997, Members had simply been required to provide details of their main home on a nomination form that had been completed when they were first elected. “However, if Members were concerned about their arrangements, they could and did discuss the issues which concerned them with senior managers in the Fees Office.”

128. On 29 August the former Head of the Fees Office gave me some more evidence in response to my office’s letter to him of 20 August.73 He noted that my letter included extracts from two e-mails from Mr Mackay,74 and said that he preferred the version of 13 August “which I believe is more accurate.”75 This version said:”When I [Mr Mackay] rang [the former Head of the Fees Office] in May 2009 he told me that after giving informal evidence in another case he had been told by the House authorities not to speak to Members. He added he could not recall what advice he gave me but afterwards would have made a file note to assist his staff.” The former Head of the Fees Office said that he could not recall the exact words he had used [in his conversation with Mr Mackay] in May 2009 but “I know that I told Mr Mackay that I had retained no papers.”

73 WE 51, WE 48 74 WE 33, WE 47 75 WE 47

42 Mr Andrew Mackay and Ms Julie Kirkbride

129. I wrote to the former Head of the Fees Office on 2 September.76 I noted that he had accepted as accurate the statement that he had told Mr Mackay that he had been told by the House authorities not to speak to Members. I also noted that the former Head could not recall what advice he had given Mr Mackay (presumably in 1997), although he would have made a file note of the conversation. I said that I would, of course, reflect this conclusion to the evidence he had given me, since, while he had stated that he knew what advice he would have given, and that he would not have given Mr Mackay the advice he recalled, it seemed clear that he was not able to recall the advice which in fact he gave him at the time.

130. I wrote to the Director of Strategic Projects on 2 September.77 I noted that from 1997 to 2003 Members had been required only to identify their main home on a nomination form completed when they were first elected. I asked whether Members identified the location and address of their main home or their second home in the regular claim forms they submitted against the ACA. If not, I said it would appear that while the Department might have seen in 1997 that Mr Mackay and Ms Kirkbride had different main home nominations, they would not have known from the nominations on their forms until 2003 that Mr Mackay had been making claims on a property which was also Ms Kirkbride’s main home (and vice versa). I asked the Director to confirm his understanding of the position.

131. The Director of Strategic Projects responded on 6 September, confirming that before 2003 Members had been required to identify where their Additional Costs Allowance had been incurred, but that they had not been required to identify the location or address of their main or second home in the regular claims they submitted.78 At the operational level, therefore, he said that departmental staff would not have been aware that Mr Mackay was making claims on a property which was also Ms Kirkbride's main home.

132. I wrote to Mr Mackay on 8 September enclosing copies of relevant correspondence.79 I noted that the Director of Strategic Projects had concluded that the evidence from the then Head of the Fees Office had not caused him to change his original conclusion that it was reasonable for him (Mr Mackay) to have inferred that the Department had no difficulty with his arrangements.

133. I also noted that the responses of the Department of Resources suggested that it was not fully accurate for Mr Mackay to say that from 1997 his (and his wife’s) second homes were put on each claim form. I said it would appear that this had become a requirement in 2003, and that before that, Members would have identified their second home on their nomination form, but had not been required to give the addresses of their main or second home on each of their regular claim forms. I said that it therefore seemed that it would not have been immediately apparent from the claim forms that Mr Mackay had been making claims for his second home on a property that was also his wife’s main home.

76 WE 52 77 WE 53 78 WE 54 79 WE 55

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134. Mr Mackay wrote to me on 12 September.80 He said that he was “heartened” that the Director of Strategic Projects had again “confirmed it was reasonable for us to infer that his Department had no difficulty with our arrangements. I accept his advice that it only became a requirement to put the second home address on claim forms from 2003”. Mr Mackay added that he recollected he and his wife submitting mortgage interest details and council tax demands prior to 2003, even though it was not then a Green Book requirement.

135. Mr Mackay said that he would rest his case on the following points. Notwithstanding responses from the former Head of the Fees Office, he was very clear that the former Head of the Fees Office had advised him that “my wife and I should declare different second homes. I believe my immediate reaction in May 2009 to contact him for confirmation adds considerable weight to the sincerity of my belief.” Mr Mackay said that as the Director of Strategic Projects had twice testified, “I assumed that as the Fees Office were fully informed of our main and second home arrangements—but never queried or challenged them—they must have been acceptable.” In addition Mr Mackay said that he had, of course, satisfied himself that these arrangements met with the criteria for claiming second homes set out in the Green Book. Finally “you have on a number of occasions asked whether I felt my arrangements met with the ‘spirit’ of the rules as they were meant to be applied. I did consider this matter and believed that as two Prime Ministers, the then Speaker of the House and a number of other MPs, claimed ACA on the only property they owned and maintained at their own expense—whilst having access to another property elsewhere—it was therefore an acceptable arrangement for the House Authorities.”

Findings of Fact: Rt Hon Andrew Mackay

136. Mr Mackay was elected as Member for Bracknell in May 1997, having been Member for East Berkshire since 1983. Ms Kirkbride was elected as Member for Bromsgrove in May 1997. They were married in August 1997. They both retired from the House at Dissolution in April 2010.

137. In 1997, Mr Mackay and Ms Kirkbride jointly owned a home in central London. In September 1999 Mr Mackay and Ms Kirkbride sold that property and jointly bought a terraced house in central London with three bedrooms, three reception rooms, two bathrooms and a study. Mr Mackay’s evidence is that the purchase price of that property was £850,000. At that time they took out in respect of that property an interest-only mortgage of £200,000 which they still maintain on that basis.

138. Mr Mackay never had a home in or near his own constituency. In September 1997 Mr Mackay and Ms Kirkbride jointly purchased a flat in Ms Kirkbride’s constituency for £75,000. The accommodation in that Bromsgrove property at that time comprised two double bedrooms, a sitting room, dining room, kitchen, and two bathrooms. In 2004, Mr Mackay and Ms Kirkbride took out an interest-only mortgage on the Bromsgrove property, which they still maintain on that basis. The Bromsgrove property was put on the rental market in the spring of 2010.

80 WE 56

44 Mr Andrew Mackay and Ms Julie Kirkbride

139. In late 1997 Mr Mackay designated the Bromsgrove property in his wife’s constituency as his main home, and designated his then London property as his second home. When Mr Mackay bought his new London property in 1999 he designated that as his second home. From 1997 Ms Kirkbride designated the London property she shared with Mr Mackay, her husband, as her main home and their Bromsgrove property as her second home.

140. From 1997 onwards Mr Mackay claimed against his ACA for the full mortgage interest and other costs, first on the London property he owned in 1997 and then on the London property he bought in 1999. The breakdown of his claims against the ACA provided by Mr Mackay indicates that in the five years from 2004–05 to 2008–09, he claimed and was paid for his mortgage interest a total of £49,230. Mr Mackay’s estimate of his pattern of overnight stays for the calendar year 2009, which he believes would also broadly reflect his sleeping patterns in the financial years in question, would indicate that he spent 155 nights in the Bromsgrove property, 139 nights at the London home, 54 nights on holiday, nine nights on parliamentary business abroad and eight nights in his constituency.

141. It became a requirement for Members to indicate their second homes on each relevant ACA claim form after the publication of the 2003 Green Book. In 1997, Members were simply required to provide details of their main home on a nomination form that was completed when they were first elected. Documentation was not required to support ACA claims and so, as a general rule, the Department had no knowledge of the location of Members' second homes.

142. Mr Mackay’s evidence is that in or around September 1997 he had had a discussion with the then Head of the Fees Office, who had recommended that he should designate the Bromsgrove property as his main home and claim ACA on the London property. Mr Mackay said that that official had recommended also that Ms Kirkbride should designate their Bromsgrove property as her main home. The former Head of the Fees Office has told me that his recollection of the advice given to Mr Mackay does not concur with Mr Mackay’s. While he does not recall what advice he gave, he does not accept that he would have given the advice referred to by Mr Mackay. The former Head’s view is that it was inconceivable for Mr Mackay and Ms Kirkbride to have had separate main homes and thus be entitled to claim for both of them.

143. In his Review of ACA claims Sir Thomas Legg found that, in making their arrangements, Mr Mackay and Ms Kirkbride had obtained a financial benefit unintended under the Green Book rules and Sir Thomas concluded that therefore they had acted contrary to the principles governing the rules.81 Sir Thomas recommended a repayment by Mr Mackay of £ 29,243 in respect of mortgage interest, and that sum was duly repaid. Sir Thomas's findings were subject to an appeal to Sir Paul Kennedy, who dismissed Mr Mackay’s appeal.82 Sir Paul Kennedy noted Mr Mackay’s statement that the way in which he and Ms Kirkbride designated their homes was in accordance with advice given by the

81 WE 15, WE 51 82 WE 16, WE 62

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Fees Office. Sir Paul commented that, if so, the advice was plainly mistaken, and that Mr Mackay should have recognised it to be mistaken. Sir Paul said that Mr Mackay and Ms Kirkbride had lost sight of the purpose of ACA, which was to assist Members to fund the cost of accommodation when they needed a second home in order to fulfil their duties. ACA was never intended to relieve Members of the costs of their main home, and Mr Mackay and Ms Kirkbride had operated it in such a way as to achieve that result.

144. The Department says that it has not been able to discover any records which would cast light on Mr Mackay's discussions with the Fees Office in 1997, although it was certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. The Department says that junior officials responsible for paying allowances may not have known that Mr Mackay and Ms Kirkbride were married, but the framework within which allowances were authorised was set by more senior officials, who would have known when Members were married to one another.

145. The Department says that, although there was no wholesale disposal of Members' personal files, it is possible that documents were not retained which ought to have been. They believe that this may explain the absence of any record of a conversation between Mr Mackay and the former Head of the Fees Office.

146. The view of the Director of Strategic Projects at the Department of Resources is that it was reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangements. The Department has said, however, that it has no reason to dissent from the conclusion of Sir Thomas Legg and Sir Paul Kennedy that Mr Mackay was not within the rules in claiming second home allowance for his London home. The Director of Strategic Projects has expressed his regret that the original advice of the Department on this point, and its subsequent inaction, might have given Mr Mackay comfort in his claims.

147. Mr Mackay considers that the Bromsgrove property was a natural main home for him. He believes that he was correct in making that designation because he was acting on advice from the then Head of the Fees Office and because of the number of nights he spent in the Bromsgrove property. Mr Mackay also argues that he has close links to, and significant family responsibilities in, the Bromsgrove area. Mr Mackay does not accept that the London home is a more substantial property than the Bromsgrove home, which is the largest apartment in a listed building and similar in square footage to the London property, although the valuation is higher for the London home because central London prices are higher than North Worcestershire prices.

148. Mr Mackay notes the acknowledgement of the Department that he and his wife made their declarations openly, that it was reasonable for him to think that the Department had no difficulty with the arrangement and that the Fees Office’s inaction gave him comfort in making the claims. Mr Mackay’s evidence is that, even though it was not required by the rules, prior to 2003 he sent the Department both mortgage interest details and council tax bills. The Department is not able to corroborate this since Mr Mackay’s records over this period have not been retained. Mr Mackay’s evidence is that he did not feel he was doing anything wrong in making his ACA arrangements, as he had taken the advice of the person in charge at the very top of the Department.

46 Mr Andrew Mackay and Ms Julie Kirkbride

149. Mr Mackay’s view is that as senior Ministers claimed ACA on the only property they owned and maintained at their own expense, whilst having access to “grace and favour” accommodation funded entirely by the taxpayer, and because he believes other Members claimed on the only property they owned and maintained while having access to another property elsewhere, his own arrangement should have been acceptable. He believed throughout the period, and believes now, that his arrangement was fully within the letter and spirit of the rules of the House.

150. Mr Mackay has said that he has faced triple jeopardy, as the issue has already been adjudicated twice, by Sir Thomas Legg and Sir Paul Kennedy. He considers that my inquiry into the complaint should not have been pursued.

My Inquiries: Ms Julie Kirkbride

151. When I wrote to Ms Kirkbride on 5 November 2009 I told her that the essence of the complaint against her was that she had made claims against her ACA for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing her parliamentary duties.83 I asked her which home she had identified as her main home, and which home as her second home for each financial year from 2004–05 to 2008–09, together with the relevant dates, the purchase costs of each home and the details of any mortgages which she held or had held on these homes since 2004–05, the nature of her accommodation in her second home in her constituency, and who had lived there during the period in question, together with dates.

152. I asked Ms Kirkbride what accommodation was available to anyone living at the property who was not her partner or her dependent children, what arrangements were made for her brother to live at the property, the reasons for doing so, and whether she had reflected the costs of his accommodation in the claims she had made against the ACA. I asked her whether she had lodged with the Department any agreement with her brother as her tenant or lodger. I asked for information about the ACA claims she had made for each financial year from 2004–05 to 2008–09 inclusive, together with the main categories against which she had claimed, identifying her mortgage interest claims and what proportion of her total mortgage they represented. I also asked her whether, and if so why, she had extended the property, whether this was on account of the presence of her brother living in the property, the total cost of this work and whether she had claimed for any of this from the ACA and, if so, how much. I asked whether, and if so when, she had informed the Department that she was claiming ACA in respect of a property which she shared with another Member, namely Mr Mackay, and whether she had consulted the then Department of Finance and Administration about any aspect of her arrangements. If so, I said it would be helpful to have details of that consultation, together with any documentary evidence she might have.

153. Following the correspondence I have already described, concerning the relationship between this and other inquiries,84 Ms Kirkbride wrote to me on 21 January 2010.85 She

83 WE 57 84 See paragraphs 27 to 34 above.

Mr Andrew Mackay and Ms Julie Kirkbride 47

said that since 2004 she had nominated the property in Bromsgrove as her second home and the London property as her main home. She and Mr Mackay had bought the London property for £850,000 in 1998 with a mortgage of £200,000, which they still maintained on an interest-only basis. They had bought the Bromsgrove property in 1997 for £75,000 and spent “more than double the purchase price” on restoring it. Along with Mr Mackay she had taken out an interest-only mortgage of £180,000 on that property in 2004, and had further extended that mortgage by £50,000 in April 2008 to cover the cost of an extra bedroom “to meet our family’s needs”.

154. Ms Kirkbride said that there was no separate accommodation in the Bromsgrove property for a tenant. It had three bedrooms “so that we can accommodate a child carer to allow me to carry out my parliamentary duties.” Ms Kirkbride said, “My brother does not live at [the Bromsgrove property], he stays in our home for the express purpose of providing childcare for our son. When he is not needed to look after [our son] he has other responsibilities elsewhere, including looking after our ... mother in [name of town]. I considered my brother’s care of [our son] entirely consistent with the Green Book’s definition of a necessary function to allow me to carry out my parliamentary duties and as such I did not factor in his presence in my ACA claims—after all, he was not receiving a benefit, he was not adding to the cost of the property and I could not carry on as an MP and be a fit and proper mother without his help!” Ms Kirkbride confirmed that she and Mr Mackay had an interest-only mortgage and she attached a breakdown of her ACA figures.86 This breakdown indicated that she claimed sums in respect of mortgage interest ranging from £8,988 in 2004–05 to £13,917 in 2008–09: a total of £54,344 over the five-year period.

155. Ms Kirkbride told me that she and Mr Mackay had bought the property before their son was born in 2000. When her son was very little her brother (and other child carers who had looked after her son when he was not available) shared a bedroom with him. She said that her husband and she felt it was inappropriate—”and particularly so for public figures who would attract interest/gossip—that our prepubescent child should continue to share his room with an adult.” As the family still needed childcare they had thought the best course of action was to move to a bigger property—”and of course, had we done so we would have attracted much less interest”. However, they had had the possibility of extending their existing apartment and so they did this instead, creating a third bedroom. Ms Kirkbride told me that in total they had spent in excess of £60,000 on the extension and took out a mortgage of £50,000 to fund the work. She said that she had discussed the matter with an official in the Fees Office and explained their reasons for needing a third bedroom. Ms Kirkbride said that the House of Commons rule at the time was that mortgages could not be extended to fund extensions to a property unless there were family reasons for doing so. Ms Kirkbride said that the Fees Office official had said that “my circumstances fitted the criteria in which an extension of the mortgage could be authorised and the Fees Office duly paid the interest on my new mortgage of £230,000 from my ACA. I wrote a note to the Fees Office which is lodged with them confirming this arrangement.” Ms Kirkbride said she wished to reiterate that this third bedroom was created to enable her to accommodate a flexible child carer who “happens to be my brother most of the time, but not all of the time. If

85 WE 58 86 A summary of the figures provided by Ms Kirkbride is reproduced at WE 59. Figures provided by the Department of Resources are at WE 73.

48 Mr Andrew Mackay and Ms Julie Kirkbride

my brother had stopped providing childcare, the bedroom would be used by somebody else. He did not live in the property all the time, but was there at the same time as we were there for the purposes of providing childcare. As such, I do not think it reasonable to say that this bedroom was built for my brother.”

156. Ms Kirkbride said that she had not informed the Fees Office that she was sharing a property with another Member who was her husband. She said she made “the reasonable assumption that this rule was to identify non-related MPs who had come to private agreements to share properties and did not apply to those Members where it was public knowledge that they were married to each other.” She confirmed that she had consulted the then Department of Finance and Administration about her arrangements and had “dropped a note to the Fees Office confirming our conversation.”

157. Ms Kirkbride said that she hoped I would be satisfied that she had no further case to answer with regard to the complaint about her brother's involvement in her childcare arrangements. She commented that “the House of Commons spends a great deal of time agonising as to why few women, and even fewer women with children, become MPs. I can tell them that one of the reasons is that it is massively difficult to reconcile the incredibly busy (and peripatetic) demands on one’s time as an MP with being a proper mother to children. In my case, I am faced with the need for six days and evenings a week childcare and as such, if my option had been to leave [my son] with bought in childcare all that time I would not have considered it fair to him to stand for Parliament.” As it was, she said she thought that she had been lucky to have Friday and Saturday covered by her own brother, who would give her son the care he needed in her absence and whose desire to care for her son she “did not need to question” whilst she was in Bromsgrove, giving her constituents the attention they had the right to expect. She concluded that as it had turned out, “what I thought were entirely appropriate arrangements have become fodder to a baying press and vexatious complainers and I can only hope that after many months of this same issue being considered by Sir Thomas Legg that you will finally allow the matter to rest and let me get on with my new life outside Parliament.”

158. On 26 January I wrote to Ms Kirkbride, asking her to clarify a number of points.87 I said I had noted the description of the help which her brother had given her in terms of childcare. Ms Kirkbride had referred to other carers, and I asked her the dates during which her brother (as opposed to other carers) provided the overnight childcare for her son. I also asked her where her brother had had his main residence and for an estimate of the number of nights a week which her brother had spent overnight in her constituency home. I asked Ms Kirkbride whether there was any basis to the suggestions in the press reports that her brother was registered to vote at her Bromsgrove address and that he gave it as his usual residential address to Companies House.88 If that were true, I asked her to explain why he had been registered to vote there and gave that address to Companies House, given the use that she had told me he made of the property. I also asked Ms Kirkbride to tell me whether her brother spent any time, including any overnight stays, in the Bromsgrove property when she and her son were not there.

87 WE 60 88 WE 3

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159. I asked Ms Kirkbride about the arrangements which she and her husband had made in staying overnight with their son in her constituency property. I said she had noted that her brother covered childcare on Friday and Saturday. I asked whether she or her husband were there with their son on other nights of the week and, if so, who covered childcare. Finally, I asked Ms Kirkbride, as requested in my letter of 5 November,89 whether she had claimed from her ACA for the full mortgage interest on her constituency home. If she had not done so, I asked her what proportion of that interest had been represented by her claims.

160. On 4 February the findings of Sir Thomas Legg’s Review of past ACA payments90 and of Sir Paul Kennedy on ACA repayment appeals were published.91 The conclusions of Sir Thomas on the arrangements entered into by Mr Mackay are set out in paragraph 48 above. Sir Thomas recommended that Ms Kirkbride should make a repayment in respect of mortgage interest of £29,243, and noted that this sum had been repaid.92 Sir Thomas also noted that in May 2008, “Ms Kirkbride extended the mortgage on her designated second home to fund the construction of an additional bedroom, mainly for the use of her brother to provide childcare for her family. The total interest paid under the ACA to fund the additional loan was £2,584.26.” Sir Thomas concluded that “As these payments were used to provide accommodation for a non-dependent family member, the transaction was conflicted”, and he recommended that Ms Kirkbride should repay that amount. In considering Ms Kirkbride’s appeal against Sir Thomas’s findings, Sir Paul Kennedy told Ms Kirkbride “The edition of the Green Book which was current at that time stated that ACA was not available to recover: ‘interest on any additional mortgages, advances or loans secured on the same property unless required for the repair or improvement of that property’. It seems to me that in your case there was no problem, because the additional loan was used to improve the property, and you tell me that before the work was undertaken you explained to a senior Accounting Officer in the Fees Office what you proposed to do and why. He then, as you put it, ‘authorised the extension of the mortgage’”.93

161. Sir Paul continued, “I accept that by 2008 there were restrictions on transactions with family members. ACA could not be used to meet the costs of a mortgage or for leasing accommodation from a partner or family member (see paragraph 3.3.3 of the Green Book), but I see no reason why that should have been extended to prevent you from recovering the costs of an additional mortgage required to enable you to provide a child carer’s bedroom just because at that time it was envisaged that the child carer would normally be your brother.”

162. Accordingly, Sir Paul said that he was “satisfied that there are special reasons in your individual case showing that it would not be fair and equitable to require repayment of £2,584.26 [in respect of interest on the additional mortgage]. I find no such reasons in relation to the sum of £29,243. As you have already repaid £1,811.64 the balance now

89 WE 57 90 Members Estimate Committee, First Report of Session 2009–10, Review of past ACA Payments, HC 348, Appendix 1. The relevant extract is reproduced at WE 61. 91 Members Estimate Committee, First Report of Session 2009–10, Review of past ACA Payments, HC 348, Appendix 2. The relevant extract is reproduced at WE 62. 92 WE 61 93 WE 62

50 Mr Andrew Mackay and Ms Julie Kirkbride

recommended for repayment is £27,431.36. To the limited extent indicated I would allow your appeal.”

163. Ms Kirkbride wrote to me on 11 February in response to my letter of 26 January.94 She told me that she had never kept notes in her diary as to who looked after her son whilst she was in Bromsgrove. She said that she would have someone resident in the Bromsgrove property to provide care for her son at the weekends and during House of Commons recesses so that she was free to carry out her parliamentary duties. This person had normally been her brother, but she had no record of the nights he had spent there, nor records of when another person fulfilled his child caring role. She told me her brother's main residence was in another town, which she identified. Her brother jointly owned this property and since 2000 had been elected, by the residents, onto the board of management for the flat complex in which it stood.

164. Ms Kirkbride said that she did not have records of the number of nights spent each week by her brother in her constituency home. As a normal rule, she would spend every weekend in the Bromsgrove property while the House was sitting and would spend parliamentary recesses there except for the time when she and her husband were away on holiday. Ms Kirkbride said that her brother was registered to vote in Bromsgrove. She noted that “any member of the public is eligible to register to vote anywhere in the country with the obvious restriction that they would need a postal address in that area to receive their polling cards. My brother registered to vote in Bromsgrove because he provided considerable voluntary support for me as the Member of Parliament (in the form of maintaining my website and other computer related services) and therefore wished to enjoy voting for his sister in parliamentary elections.” She said that the complainant was wrong to suggest that voter registration denoted someone’s main address (although she noted that it might do so). In the case of her brother there were obvious reasons why he might wish to register in a place that was not his main home, but where he did spend some of his time.

165. On the issue of registration at Companies House, Ms Kirkbride said that her brother had returned to the UK after living many years in the USA shortly before her son was born. He had started working as a lecturer for a computer company which offered residential courses across the country. Mr Kirkbride had offered to cover childcare for her at the weekends. In 2001 Mr Kirkbride’s accountant had suggested that he should set up a company in the UK and, without consulting her, Mr Kirkbride had put the Bromsgrove property as the address of this company “so that he would see any urgent paperwork at the weekend.” She accepted this should not have happened, but the reason was “entirely innocent”. No money whatsoever had been traded through the company, it had never been used, it had never had any employees and never had a liability for tax. It had remained completely dormant and had been closed in 2005.

166. Ms Kirkbride said that her brother would have spent occasional time, including nights, in the Bromsgrove property without the presence of herself or her son. This was because Mr Kirkbride had offered computer services to her and her staff in Bromsgrove on

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a voluntary basis. He had maintained her website and had offered training and support to her office staff on an ad hoc basis. Ms Kirkbride said that there would have been occasions when it was convenient for him to use the Bromsgrove property as a base, as she maintained an office in her home there. She continued, “It seems to me that in providing computer support services as a volunteer my brother was saving the taxpayer a considerable amount of money.” However, Ms Kirkbride said, her brother had other responsibilities to take care of during the week and this would be an occasional occurrence. Ms Kirkbride said that she and her husband had spent the parliamentary recesses in the Bromsgrove property, and due to the “unpredictable nature of our jobs” they liked to have someone to cover childcare whilst they were there. Ms Kirkbride said that she had claimed the full mortgage interest from the ACA.

167. Ms Kirkbride said she hoped that her answers would satisfactorily resolve the complaint. She said she recognised that I had conducted previous inquiries where a non- dependent person stayed at the second home of an MP. “However, I would hope that you will accept that my case involves a completely different principle, insofar as the person was staying at the property entirely for the purposes of enabling me to carry out my parliamentary duties. Moreover, to raise an official inquiry on the issue of childcare arrangements would have profound and unfortunate implications for the next generation of women MPs who we all hope will be entering parliament at the next election.”

168. Ms Kirkbride also said that she recognised that I had been given a job to do by Parliament, but noted the verdict of Sir Thomas Legg’s Inquiry and the appeal conducted by Sir Paul Kennedy into her expenses.95 She said she hoped I would accept that she had spent the previous nine months being investigated on precisely this issue—which finally concluded in her favour—”and that to face yet another inquiry would result in my being exposed to triple jeopardy. I was delighted when Sir Paul accepted my explanation and I hope that for my own peace of mind I can now look forward to your doing the same.”

169. I wrote to Ms Kirkbride on 17 February.96 I said that the issues I was to resolve included whether her brother had lived rent free in her Bromsgrove home as in effect his main residence, and whether the claims she had made for mortgage interest for the additional mortgage she had raised on her constituency home to build a third bedroom used by her brother were necessary for the purpose of enabling her to perform her parliamentary duties. These had been specific allegations raised by the complainant and, as explained in previous correspondence I considered that it would be right for me to resolve them. I said that in doing so I would be happy to take account of any considerations which she believed to be relevant in the auditing and appeal processes undertaken by Sir Thomas Legg and Sir Paul Kennedy.

170. I noted that Ms Kirkbride did not have information about the length of time her brother spent in her constituency property or about how often someone else performed that role, and that he spent occasional time, including nights, in that property when she was not there. I told Ms Kirkbride that I thought it would be helpful for me now to seek

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evidence from her brother and that I was accordingly writing to him. In the meantime, I asked Ms Kirkbride to clarify some points for me.

171. First, I noted that Ms Kirkbride had told me that her brother had covered childcare in her Bromsgrove home on Friday and Saturday. I asked her who had covered childcare on the other nights of the week during the recesses. I also asked whether she had paid her brother or any of her other child carers for their childcare work. I said that if so, I was unclear why she had no record of the childcare work undertaken for her. I noted that Ms Kirkbride had been reported by the BBC on 24 May 200997 as saying that she did not pay her brother, but I said I was not clear whether other child carers were paid.

172. I asked Ms Kirkbride what childcare arrangements she had had in place when her son was in London, where, as I understood it, he went to school. I noted from the BBC report of 24 May 2009 that she had been quoted as saying that her brother stayed in her London home from time to time to help look after her son. As far as I could see, I said that she had not so far referred to his staying in London in her evidence to me. I also asked Ms Kirkbride to let me know the normal pattern of her overnight stays in her London home, during term time and in the school holidays and parliamentary recesses. Finally, I asked Ms Kirkbride whether her brother had made any payments, in money or in kind, for the time he spent in her constituency property.

173. I wrote to Ms Kirkbride’s brother, Mr Ian Kirkbride, on 17 February.98 I asked Mr Kirkbride whether he could confirm the evidence which Ms Kirkbride had given me about his use of her homes, and which I summarised in my letter.99 I asked Mr Kirkbride for an estimate of the number of nights he normally spent in the constituency property, and of the normal pattern of his overnight stays in the Bromsgrove property over the course of each financial year from 2004–05 to 2008–09. I asked for his estimate of how many nights he had spent in the property over the course of each financial year in the same period at times when Ms Kirkbride and her son were not there. I also asked him why he had spent those nights there.

174. I asked Mr Kirkbride to explain why he had identified Ms Kirkbride’s constituency property as his usual residential address in completing the forms for Companies House, if that had not been his usual address. I also asked whether Mr Kirkbride had spent any nights in Ms Kirkbride’s London home and whether he had done so to look after her son. I asked him, if so, for an estimate of the normal pattern of his overnight stays in the London property over the course of each financial year from 2004–05 to 2008–09. I sought Mr Kirkbride’s view on whether he regarded his identified property in another location as his main home and whether there was any basis for the allegation that his main home had at any time from 2004 to 2009 inclusive been Ms Kirkbride’s constituency property in Bromsgrove. I also asked Mr Kirkbride for a description of how the arrangement for planning his overnight stays at the constituency property had worked out in practice. Had he made a standing arrangement to be there on the same nights a week and if so, did this

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vary between sitting weeks and parliamentary recesses; or had he arranged with Ms Kirkbride ad hoc each week the nights when he would need to be in the constituency property to look after her son?

175. Mr Kirkbride replied to me on 11 March.100 He said he generally concurred with the statements his sister had made and which I had outlined in my letter of 17 February. He said he had never found it necessary to maintain a formal diary and was therefore unable to give a figure for the number of nights he had been at the Bromsgrove property, either when his sister or her son were there, or on the occasions he might have been there alone. “Few of us are capable of remembering in detail events which have been a routine part of life going back over five years or more. As such any estimate would be a complete guess with all the inaccuracies that would involve.” What he said he could relate was “the normal pattern of my movements over that period.”

176. Mr Kirkbride said he would plan to be at the Bromsgrove property most weekends (typically Friday to Sunday) when his sister and her son were expected to be there. This had been a standing arrangement. He said that when his sister and her son were planning to be there during parliamentary recesses they would make arrangements, in so far as possible with any other obligations he may have had during the week, for him to be there to cover childcare for his nephew. Mr Kirkbride said he was also usually flexible enough to be able to be in London as needed to look after his nephew if for example Mr Mackay and Ms Kirkbride were going to be away and they wanted someone older to support their au pair. He said he would frequently drive his nephew up to the constituency home after school on Friday so that his sister could go early and spend more time on her parliamentary duties there. Mr Kirkbride said that he was self-employed and therefore had an irregular work pattern taking him to London and all over the country. However, he said he was very close to his family and cared not only for his nephew but also his elderly mother who lived in a property of which he [Mr Kirkbride] was a joint owner. He said that when his nephew and he were in the constituency property his main purpose was to look after him and “free up my sister for her constituency duties.”

177. On the occasions when he had been alone in the Bromsgrove property he had been there “at the express wish of my sister” to help her in the performance of her parliamentary and constituency obligations. He had offered to help her with any IT needs on a wholly voluntary basis since his work was in IT, networking, lecturing and training. He had maintained his sister’s website and she would often leave photographs with him as she departed for London at the end of the weekend so that he could update it. Mr Kirkbride said that he had also offered technical support to his sister’s staff and if he was doing this on Monday morning for example, it might make sense to stay the night before. He said he would help his sister’s secretaries with any IT problems, computer glitches, networking issues and the like, and had made himself available on the end of a phone for them. Mr Kirkbride said he would teach or help them with the electoral roll database maintained by Ms Kirkbride’s office, and with various software programs as needed. “For my own

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efficiency I would try as far as possible to do any and all of this around the weekend when I needed to be in Bromsgrove to look after my nephew.”

178. Mr Kirkbride said that the question of the identification of the Bromsgrove property as his “usual residential address” for Companies House purposes went back to the year 2001. He noted that he was self employed. Mr Kirkbride said that his accountant had been encouraging him to form a company. Mr Kirkbride had not been convinced but had reluctantly told his accountant to go ahead. His accountant had done all the paperwork and had not consulted him. At the time, Mr Kirkbride had given his accountant the Bromsgrove postal address for any time-sensitive contact as he had been elsewhere working during the week but knew that he was likely to be in Bromsgrove most weekends. Mr Kirkbride said he had only been told in the last year that the form asked for the usual residential address, and he continued, “Had I been aware of that I would have been able to give a different address.”

179. The company had been registered in February 2001. It had never been used. Mr Kirkbride said he had seen no reason to change his self employed status. The company had remained a dormant company with his accountant filing the annual paperwork. “I don't believe I saw any paperwork again until my accountant missed a filing deadline for dormant companies (he’d forgotten about it too!) and there was a penalty. I immediately closed the company. I applied to close in November 2004 and it was finalised in April 2005.” Mr Kirkbride said he had done no business in the Bromsgrove area and he had not worked out of the constituency property at any time. He said, “Setting up the company was a mistake. Having it held against me would compound that.”

180. Mr Kirkbride said that there had been no regular pattern of stay in London. His sister had had a series of au pairs and an agreed work pattern. There had been times when his sister and her husband would be away from home, or there was some school event when they had felt it would be appropriate for the au pair to have some adult backup. There had been times when the au pair went home for extended holiday periods and times when the au pair had fallen ill or had personal commitments. “Where I could fit it into my other commitments, I agreed to help. Au pairs tended to leave in early July and arrive in late September and there was often a need for childcare for parts of that period too.”

181. As to whether he regarded his property in another location as his main home and whether there was any basis for the allegation that between 2004 and 2009 his main home had been the Bromsgrove property, Mr Kirkbride said he had never been in the position of having to identify a main home. He said he was a part-owner of the property where his mother lived, where he had his own bedroom, kept his clothes, stored his personal things and received post. He had served on the management committee of the building for some ten years, being chairman for about six. He said that he would consider this his main home, although his schedule meant he spent a limited amount of his time there. As a single person with no family of his own “my work and lifestyle for some thirty plus years has been one of planes, cars and hotels.” He had always been a very visible “Uncle Ian” in Bromsgrove. Where possible they had taken his nephew to many constituency events where he kept an eye on him while his sister socialised. “Many people have assumed I was her husband. It does not surprise me that people also assumed I lived there.”

Mr Andrew Mackay and Ms Julie Kirkbride 55

182. As to how the arrangement worked in practice, Mr Kirkbride said that shortly after his nephew was born and while he was helping out it had become clear to him that his sister would have difficulty when she was alone in the constituency with her child. “Although I was busy much of the working week I was generally free at weekends and I offered to give her a guarantee of a babysitter in the constituency at the weekend ... It was therefore a standing arrangement. As time went by babysitter became child minder.” He said he had seen the difficulty of “juggling nannies, of changes of schedule, of nannies cancelling, of events running over time, of getting nanny taxis and the headache that added to organising a weekend in the constituency.” He said that “an ad hoc arrangement for childcare” was exactly what an MP did not want as it meant a constant distraction each week as to the arrangements for the weekend. He had taken that burden off his sister. Mr Kirkbride said that his flexibility, being single, and their sibling relationship, had removed most of those obstacles and it had seemed to be an ideal and eminently sensible arrangement. He said that the arrangement had worked well and there was a mutual desire for it to continue in parliamentary recesses, but then it had to work around his schedule. “However the pace of work was more relaxed in a recess and if I could not help then it was often possible for my sister to take her son with her or easier to find someone else to cover since it tended to be during daylight hours only.”

183. Mr Kirkbride said that his sister, being married to another MP with constituency obligations of his own, had been effectively a single-mother MP. “She could not have the customary support of her husband when she was undertaking her parliamentary duties.” Mr Kirkbride said that a single MP with a child needed a lot of quality support and backup if she were to do a good job in her constituency. “I was that guaranteed reliable backup. The communication and understanding between siblings beats that of any childminder. She could be sure her son had the best of care.” He had lost count of the number of times someone said to him “I don’t know what Julie would do without you”. Everyone had said she was an excellent constituency MP and, he said, “I like to think I played some part in that.”

184. I wrote to Mr Kirkbride on 15 March, seeking some more information about his overnight stays in the constituency when he was not there for childcare purposes but was preparing to support Ms Kirkbride and her staff on IT matters, including the maintenance of her website.101 I asked Mr Kirkbride how often in a month, or a year, he would spend the day or the overnight in the property for this additional purpose. On 26 March, Mr Kirkbride wrote to me to say that he would characterise his time in the Bromsgrove property as “occasional”.102

185. Meanwhile, Ms Kirkbride had written to me on 4 March,103 in response to my letter of 17 February.104 She said that the complainant’s claim that her brother lived in her constituency property was “based on two pieces of ‘evidence’ he supplied which I addressed in my previous correspondence and to which the answers, I believe, demolish the vexatious accusation that is being made.”

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186. Ms Kirkbride said that the issue of the additional mortgage she had claimed to build a third bedroom to be used by a child carer which might—or might not—be her brother at any one time was “precisely the issue addressed by Sir Thomas Legg and Sir Paul Kennedy.” She said she hoped I would note the conclusion reached by Sir Paul Kennedy which was as follows:

“I accept that by 2008 there were restrictions on transactions with family members. ACA could not be used to meet the costs of a mortgage or for leasing accommodation from a partner or family member, but I see no reason why that should have been extended to prevent you from recovering the costs of an additional mortgage required to enable you to provide a child carer’s bedroom just because at that time it was envisaged that the child carer would normally be your brother. Accordingly, I am satisfied that there are special reasons in your individual case...”105

187. Ms Kirkbride said that she felt strongly that she was being subjected to triple jeopardy and she hoped that in the light of this adjudication by Sir Paul I would feel that this particular issue of the extension of her mortgage had been decided.

188. Ms Kirkbride said that “... few busy working mothers keep a detailed note about who is looking after their child at any one time—life just isn't like that. I also hope that you noted that if there were any occasions when my brother did stay in my constituency property in my absence it was in order that he could use the office equipment located there to maintain my website (an activity he did for free and which is charged to the taxpayer by most MPs) or because he was helping my Bromsgrove staff with ICT support.”

189. On the question of the provision of childcare on other nights of the week during the recesses, Ms Kirkbride reiterated that she would have someone resident in the Bromsgrove property to provide care for her son at the weekends and during House of Commons recesses so that she was free to carry out her parliamentary duties. On the issue of payment, Ms Kirkbride said that she had never paid her brother in cash or in kind, for the care of her son. “He looks after my son because he loves us both and he has the time to do it. When my brother cannot help me in Bromsgrove I ask my mother-in-law or friends I have made in the Bromsgrove Conservative Association to step in. I normally repay their kindness with a box of chocolates or a bunch of flowers.” In London she paid their au pair a cash sum each week.

190. Ms Kirkbride said that the main carer for their child in London was an au pair who “similarly offers a flexible arrangement given the unpredictability of our working life.” However, her brother also came to London to help. Ms Kirkbride said that if she and her husband were going abroad they felt it inappropriate to leave an inexperienced au pair in charge of their son for a prolonged period. Equally, it was unfair to ask their au pair to work seven days a week without a break. “It might also be the case that our au pair would wish to return home (before Christmas or in the summer) before the start of the parliamentary recess and so I might ask my brother if he would cover childcare in London during these periods when he was in a position to do so given his other commitments.”

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191. Ms Kirkbride said that the normal pattern of her overnight stays was for her to be in London during the week when the House was sitting, travelling to Bromsgrove on Friday night and returning to London on Sunday to ensure her son could be at school on Monday morning. Where parliamentary recesses and school holidays were coterminous she and her husband would be in Bromsgrove when not on holiday.

192. Ms Kirkbride said, “I find the question that my brother should pay me—either in cash or kind—for the time he spent at my constituency property to enable me to perform my parliamentary duties bizarre. Just for the record, can I make clear that he certainly did not pay me in cash or kind for anything, but I do not see how anyone would think that it might be appropriate for him to do so in the circumstances.”

193. In conclusion, Ms Kirkbride said that as a female MP, married to another Member, who had had a child whilst a Member of Parliament, she had found herself “... in a somewhat unique position. I had an inexhaustible and unpredictable demand for childcare and a duty to my child to act in his best interests as his mother. I therefore felt fortunate that my brother was able to help me to look after my son which obviated the inevitable guilt I would otherwise have felt about the amount of time I was able to spend with him. Indeed, had it not been for my brother’s help I would have felt that it was not in my child's best interests for me to carry on as the MP for Bromsgrove.”

194. Having considered the evidence up to this point I wrote on 15 March to the Director of Operations at the Department of Resources, attaching copies of relevant correspondence and seeking his advice on the complaint.106 I asked him for his comments, taking account, as necessary, of the findings of Sir Thomas Legg’s audit and the appeal made to Sir Paul Kennedy.107 In particular, I asked him whether the Department considered that the use of the accommodation by Ms Kirkbride’s brother to provide childcare support (and some IT support) had been within the Green Book rules, taking account of the rule that claims might not be made for the living costs of anyone other than the Member. I asked him how the Department would normally expect to apply this provision in the case of people supporting a Member with childcare. I also asked the Director whether, in the circumstances described by Ms Kirkbride and her brother, it was within the rules of the House for Ms Kirkbride to claim for the interest on a mortgage increased to enable her to build a third bedroom in the constituency property, taking account of the relevant Green Book rules at the time.

195. I also asked the Director to provide some factual information about Ms Kirkbride’s claims, including her ACA claims from 2004–05 to 2008–09 inclusive by category, and if he could identify when Ms Kirkbride began to claim for the interest on the additional mortgage for the work on the additional bedroom. Finally, I asked for details of any discussions which the Department had had with Ms Kirkbride, or someone on her behalf, about her childcare arrangements or her plans for extending her constituency property.

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196. The Director of Strategic Projects wrote to me on behalf of the Department of Resources on 25 March.108 He said that the Department had not been aware that Mr Kirkbride had stayed at the constituency home. In the Green Books which were in force from 2005 to 2009, Members had been “strongly advised” against subletting or renting out any part of a property on which ACA was claimed (this rule had applied also to paying guests). The Director said that if they did so, they were required to notify the Department, who would reduce their claims by the amount of their rental income. They were not permitted to claim for the mortgage costs of any part of the property occupied by a lodger or paying guest unless this was offset against their claim. However, where no rent was paid, there was no rule which governed who might or might not live in, or stay at, a home on which ACA was claimed.

197. At the time, the Department “would not therefore have been concerned if someone other than the Member used an ACA-funded property for occasional stays. If the Department had become aware of a more regular arrangement, it might have sought more information from the Member. But it would have been unlikely to have been concerned if the person staying in the property from time to time was not paying rent but was providing a function that enabled the Member to carry out his or her duties more effectively.”

198. The Director said that, from the precedents of recent cases considered by the Committee on Standards and Privileges, it was clear that the test which should be applied to cases when another person occupied a second home was whether the expenditure for which claims were made was wholly and exclusively incurred in connection with the Member's parliamentary duties. Where another person's living costs were subsidised by ACA/PAAE payments made to a Member, or that person received a benefit, it was also clear that this was outside the rules. In the case considered in the Committee's Eighth Report of the (then) current session, the Committee had concluded that, even though it had been the Member who had received a personal benefit (in that case, emotional support) from a family member staying in their second home, the Member should nevertheless have repaid a proportion of the amounts she had received (although in that case, the family member's use of the second home had been “substantial, regular and sustained”).109

199. The Director said “There seem to me to be special elements in the current case.” First, Mr Kirkbride's living costs did not seem to the Director to have been reduced to any substantial degree by his occupation of Ms Kirkbride's second home. Mr Kirkbride had told me that his lifestyle was peripatetic, but that he was part-owner of another property which he regarded as his main home. There would have been some savings to Mr Kirkbride at the margin because of the utilities and so on that he used at Ms Kirkbride's property, and it would have been possible to argue that she should have abated her claims in respect of the times he was present. “But if one pursued this argument to its logical conclusion, every Member ought to have abated his or her ACA/PAAE claims for every guest who stayed at his or her second home—or indeed for every visitor. I would therefore view the

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element of Ms Kirkbride's claims which met the costs of accommodating Mr Kirkbride as being only at the margin claims in respect of his living costs.”

200. The Director said that it was also clear that it had been Ms Kirkbride who had received the benefit from Mr Kirkbride's presence in her second home, and that this was a benefit which had enabled her to discharge her parliamentary role: his presence had enabled her to perform her constituency duties. The Director’s view was that Mr Kirkbride had thus performed a service rather than obtaining a benefit. That he stayed overnight was directly related to the service he had performed. The Director said that he would be surprised if other Members had not regularly asked babysitters to stay overnight in their second homes or had had nannies who had done so. Others might have employed residential staff such as housekeepers. “Mr Kirkbride’s kinship with Ms Kirkbride can be disregarded for these purposes, except that it meant that the consideration which Mr Kirkbride received for his services was not a material one and, as both she and he have said, there would have been no perceived need for any formal record of the arrangements they came to as brother and sister.”

201. The Director said that the complainant was correct in asserting that the provision of childcare was not claimable against parliamentary allowances. However, he said it was relevant to mention in this context that the recent Speaker's Conference on Representation had concluded that more needed to be done to attract parents with young children to the House. In particular, the Conference had concluded that “Decisions on childcare are a matter of personal choice and for many MPs their arrangements will be essential to their ability to carry out their parliamentary duties. Parents will choose to have their children looked after in their homes (in the constituency and/or in London) by other family members, by nannies or registered childminders, or in a nursery or creche. All of these choices are equally valid and should be equally respected by the parliamentary authorities.” 110

202. The Director noted that Mr Kirkbride had also stayed occasionally at Ms Kirkbride’s additional home [the home in her constituency] in order to help her with her parliamentary ICT needs. He said that there had perhaps been one difference between these stays and the stays for childcare purposes: in the case of childcare, overnight stays had been intrinsic to the help offered, whereas overnight stays in order to help with constituency ICT had been incidental. “However, if Mr Kirkbride had charged his sister for his ICT services (no such charges were made), he could have claimed for accommodation as part of those charges and Ms Kirkbride could have claimed these charges against her IEP [Incidental Expenses Provision]. In that sense, providing overnight accommodation could be regarded as having saved public funds.”

203. On the question of the ACA claims made by Ms Kirkbride in respect of her extended mortgage, the Director noted that the 2006 version of the Green Book stated that “re- mortgaging is permissible if moving to different accommodation or if repairing or improving your existing ACA home. Members should consult the DFA before making any major commitments.” (para 3.7.3). The Director attached to his letter a copy of a letter written by

110 Speaker’s Conference on Parliamentary Representation, Final Report of Session 2009-10, HC 239-I, para 271. Ms Kirkbride was a member of this Conference.

60 Mr Andrew Mackay and Ms Julie Kirkbride

Ms Kirkbride to the Department on 16 June 2008.111 This said that, following advice from an official in the Fees Office, she was attaching a new mortgage interest statement for her ACA. Ms Kirkbride said in the letter that the extended mortgage had been taken out to pay for the building of an extra bedroom at the Bromsgrove property, “accommodating the needs of our growing family” and that she would be making claims accordingly. The Director said that there would have been no reason not to permit claims in respect of an extended mortgage to allow for extra accommodation for the needs of a Member's dependent child. There was no correspondence from the Department to Ms Kirkbride to confirm the arrangement, although Ms Kirkbride referred to the advice given to her in her letter to the Department of 16 June 2008.112 The Director said that it appeared likely that the agreement had been made orally, and the absence of any comment on Ms Kirkbride's letter implied that the Department had agreed with her.

204. The Director noted that Sir Thomas Legg had regarded the additional mortgage as conflicted because the payments “were used to provide accommodation for a non-dependent family member”.113 However, Sir Paul Kennedy had regarded claims in respect of the extension of the mortgage as permissible because it had been an extension to permit an improvement to the property which was allowed under the rules, and because it was not relevant that the carer for whom the extra room had been provided would normally be the brother of Ms Kirkbride.114

205. The Director told me that no claims had been made in respect of the property from any allowance other than ACA/PAAE. Furthermore, no claims had been made for services provided by Mr Kirkbride, either in respect of childminding or for ICT support. Some ICT equipment, software and peripherals had been bought by Mr Kirkbride and delivered to him at Ms Kirkbride's second home. Ms Kirkbride had subsequently claimed back the relevant costs from her IEP. This took place sporadically between 2004–05 and 2008–09. The Director said that the Department had no details on file of any discussions which the Department had with Ms Kirkbride, or someone on her behalf, about her childcare arrangements or plans for extending her constituency property. A summary detailing Ms Kirkbride's ACA/PAAE claims from 2004–05 to 2008–09 was attached.115

206. I wrote to Ms Kirkbride on 29 March, attaching my correspondence with the Department and asking for her comments116 I noted also that Mr Kirkbride had told me that he would characterise his time in Ms Kirkbride’s constituency property as “occasional”.

207. I said that I needed now to consider how best to proceed. While I had considered this complaint separately from that of the complaint against her husband, I said I thought I had reached the point where I had to recognise that there was a relationship between Ms

111 WE 74 112 Ibid. 113 WE 61 114 WE 62 115 WE 73. These figures differ marginally in some years from those provided by Ms Kirkbride (see WE 59). 116 WE 75

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Kirkbride’s arrangements and Mr Mackay’s. This had been recognised in the findings of Sir Paul Kennedy on their appeals.117 I said that in particular, if I were to find that Ms Kirkbride’s constituency home had also been her husband’s main home, then I would need to address the question of whether it was within the rules, including the spirit of the rules, that parliamentary resources should have been used, in effect, for an extension to his main home.

208. I told Ms Kirkbride that I regretted, therefore, that, subject to any points she might wish to put to me, I would need to resolve these complaints in tandem and at the same time. I said I had not reached the point of resolution in respect of the complaint against Mr Mackay, but that I would let Ms Kirkbride know as soon as that point was reached.

209. I wrote to Ms Kirkbride again on 18 May, the day on which the new Parliament assembled, to resume my inquiry.118 I told her that I had reviewed the evidence which I had collected in relation to this complaint. I noted that in the complainant’s initial letter of 30 October he had referred to evidence in an unidentified newspaper article which suggested that there was a witness who believed that her brother was a permanent resident at her Bromsgrove property.119 The complainant could not identify the press report. I told Ms Kirkbride that I had subsequently identified it as being an article from the News of the World of 24 May 2009, which I attached.120 This article referred to comments reported to have been made by a gardener at the Bromsgrove property.

210. I said that I recognised that this evidence was directly contrary to the evidence which she and her brother had provided. I told Ms Kirkbride that, having identified the article referred to by the complainant, I needed to check, if at all possible, with the reported evidence of the gardener. I therefore asked Ms Kirkbride if she could provide me with the name and address of that potential witness so that I could write to him about it.

211. Ms Kirkbride wrote to me on 26 May.121 She said that she was particularly pleased by the response from the Fees Office122 to the allegations made against her. “It seemed to me that the thoughtful and sympathetic reply from [the Director of Strategic Projects] entirely vindicates my position and even draws attention to the fact that my brother's help for me as a Member of Parliament actually saved the taxpayer money!”

212. Turning to my questions about the claims made about her brother by an unnamed “gardener” in the News of the World, Ms Kirkbride said that her Bromsgrove property was described as a “country estate” in the article, with the connotation that there was a team of gardeners managing extensive grounds, when in fact it was a large old house, divided into flats, surrounded by a not very large garden. “Moreover, the fact that the ‘gardener’ is unnamed would suggest to me that the quote is made up. I am sure that in the course of your other inquiries you will have come across situations in which reports in newspaper articles

117 WE 16, WE 62 118 WE 76 119 WE 1 120 WE 77 121 WE 78 122 WE 72

62 Mr Andrew Mackay and Ms Julie Kirkbride

have been found to be not entirely accurate, or even true.” The position with regard to gardening at the Bromsgrove property was that the bulk of it was done by the residents in order to keep the service charge as low as possible. Ms Kirkbride said that a contract existed for the cutting of the grass at the Bromsgrove property when necessary, “but even I, as a resident, am not aware of a recognisable ‘gardener’ figure.”

213. I replied to Ms Kirkbride on 3 June.123 I said that I would take it that she had no comments to make on her brother’s further letter to me of 26 March, and that she was unable to identify anyone corresponding to the “gardener” described by the News of the World who might offer me further evidence on her brother’s stays in the Bromsgrove property.

Findings of Fact: Ms Julie Kirkbride

214. Ms Kirkbride was elected as Member for Bromsgrove in May 1997. From 1997 Ms Kirkbride and her husband Mr Mackay jointly owned properties in London and in her constituency, Bromsgrove. From 2004 to 2010 Ms Kirkbride nominated the constituency property in Bromsgrove as her second home and their London property as her main home. She and Mr Mackay had taken out an interest-only mortgage of £180,000 on the Bromsgrove home in 2004, and further extended the mortgage by £50,000 in April 2008 to cover the cost of an extra bedroom. The cost of that work was in excess of £ 60,000.

215. Ms Kirkbride wrote to the Department of Resources on 16 June 2008, to tell them that, following advice from an official in the Department, she was attaching a new mortgage interest statement for her ACA, reflecting the extended mortgage she had taken out to pay for the building of an extra bedroom at the Bromsgrove property, “accommodating the needs of our growing family” and that she would be making claims accordingly. There was no correspondence from the Department to Ms Kirkbride to confirm the arrangement. The breakdown of Ms Kirkbride’s mortgage interest claims against the ACA provided by the Department of Resources indicates that she claimed and was paid £53,700 over the five-year period covered by the complaint, from 2004–05 to 2008–09. In his Review of past ACA payments, Sir Thomas Legg found that the total interest paid under the ACA over the same period to fund the extended mortgage was £2,584.

216. Ms Kirkbride’s brother, Mr Ian Kirkbride, stayed from time to time in the Bromsgrove property, where he provided childcare for the young son of Ms Kirkbride and Mr Mackay. Mr Kirkbride would also stay overnight at the Bromsgrove property by himself in order to assist Ms Kirkbride and her constituency staff with their IT. The evidence of Ms Kirkbride and her brother was that his overnight stays by himself for this purpose were occasional.

217. Mr Kirkbride was registered to vote in the Bromsgrove constituency. Ms Kirkbride’s evidence is that this did not show that Bromsgrove was necessarily her brother’s main home: he registered there because he wanted to support her in any election. In February

123 WE 79

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2001 the Bromsgrove property was given as Mr Kirkbride’s usual residential address in the registration form of a company registered for him at Companies House. Mr Kirkbride’s evidence is that the registration was undertaken by his accountant; he was not aware of the “usual residential address” requirement and provided the Bromsgrove address because he was there at weekends; the company never traded and it was wound up in April 2005.

218. The evidence of Ms Kirkbride and her brother is that, when Parliament was sitting, he normally stayed overnight to look after her son in the constituency property at the weekends. Mr Kirkbride’s evidence is that during parliamentary recesses, he stayed overnight at the Bromsgrove property at other times to look after the son when Mr Mackay and Ms Kirkbride were also present. Mr Kirkbride says that this was dependent on his other obligations. The evidence of Mr Kirkbride is that from time to time he stayed when needed overnight in the London property to care for his nephew, for instance to support the au pair when Mr Mackay and Ms Kirkbride were away. Mr Kirkbride’s evidence is that he regarded as his main home the home he jointly owned and shared with his mother in another town, although he spent a limited amount of time there.

219. Sir Thomas Legg’s Review concluded that the additional mortgage of £50,000 on the Bromsgrove property was “conflicted” because the payments “were used to provide accommodation for a non-dependent family member”. However, in considering appeals against Sir Thomas’s findings, Sir Paul Kennedy concluded that Ms Kirkbride’s claims in respect of the extension of the mortgage did not represent a problem, because it was an extension to permit an improvement to the property of an extra bedroom to accommodate her child’s carer, and Sir Paul notes Ms Kirkbride’s evidence that, before the work was undertaken, she explained to a senior Accounting Officer in the Fees Office what she proposed to do, and why. He also notes Ms Kirkbride’s evidence that the senior official authorised the extension of the mortgage. Sir Paul saw no reason to prevent Ms Kirkbride from recovering the costs of the additional mortgage just because at the time it was envisaged that this child carer would normally be her brother. He allowed Ms Kirkbride’s appeal on this point.

220. The Department of Resources considers that it would have been unlikely to have been concerned about a Member’s arrangements if a person staying from time to time in the second home was providing a function that enabled the Member to carry out their duties more effectively. There would have been no reason to refuse claims in respect of an extended mortgage to allow for extra accommodation for the needs of a Member’s dependent child. The Department’s view is that Mr Kirkbride's living costs did not seem to have been reduced to any substantial degree by his occupation of Ms Kirkbride's second home, and that he therefore did not receive a benefit from the arrangement. The Department says that it was Ms Kirkbride who received the benefit from Mr Kirkbride's presence in her second home, and that this was a benefit which enabled her to discharge her parliamentary role: his presence enabled her to perform her constituency duties. Mr Kirkbride’s overnight stays for childcare were directly related to the service he performed. The Department’s view of Mr Kirkbride’s overnight stays when he assisted Ms Kirkbride and her staff with their IT is that such stays were incidental to that assistance. However, the Department believes that if Mr Kirkbride had charged his sister for his ICT services (no such charges were made), he could have claimed for accommodation as part of those charges and Ms Kirkbride could have claimed these charges against her Incidental

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Expenses Provision. In the Department’s view, providing overnight accommodation could, in that sense, be regarded as having saved public funds.

221. Ms Kirkbride considers that it was reasonable for her brother to stay overnight in her constituency property to look after her son, and occasionally to stay there by himself in order to help with constituency IT matters. She believes that she did not need to reduce her ACA claims to reflect her brother’s living costs, because her brother was there only to assist her with her parliamentary duties. Ms Kirkbride considers that she acted within the rules in making these arrangements, which enabled her to reconcile the demands on her time as an MP with her responsibilities as a mother.

222. Ms Kirkbride believes that in my inquiry she was subjected to triple jeopardy; she feels that the particular issue of the extension of her mortgage had already been decided by Sir Paul Kennedy.

Standard of Proof

223. With one exception, the standard I have adopted in considering the evidence in relation to these inquiries is the normal civil standard of proof, the balance of probabilities. The exception has been because it has been necessary to form a judgement based on the conflicting recollections of Mr Mackay and the former Head of the Fees Office about the advice which the former Head of the Fees Office may have given Mr Mackay when they met in September 1997. Given the importance attached to this communication in assessing Mr Mackay’s conduct, and the seriousness of the complaint against him, I have come to my conclusion on that matter against the standard that the evidence against Mr Mackay would need to be significantly more likely to be true than not true.

Conclusions

Introduction

224. The first issue I am to resolve is whether Mr Mackay was acting within the rules of the House in identifying as his main home the Bromsgrove property he shared with his wife and fellow Member of Parliament, Ms Julie Kirkbride, when he knew that she had identified that home as her second home and would claim parliamentary allowances on it. The effect of these decisions was that parliamentary allowances funded both of their homes.

225. The second issue I am to resolve is whether Ms Kirkbride was within the rules of the House in claiming interest on the increased mortgage she took out in order to build an additional bedroom in her home in Bromsgrove when it was used by her brother principally to assist her with childcare and when no allowance was made by her for the cost of his use of the property.

226. The complaints into which I inquired did not extend to Ms Kirkbride’s designation of the London property as her main home and the Bromsgrove property in her constituency as her second home. But, while I have considered the complaint against Mr Mackay and that against Ms Kirkbride separately and on their own merits, the two are linked, since, if Mr Mackay were within the rules in identifying the property in Bromsgrove as his main

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home, then I would need to consider whether Ms Kirkbride was within the rules in claiming for the interest on an additional mortgage to fund the cost of building works at what was, in fact, her husband’s main home.

227. Mr Mackay and Ms Kirkbride argued from the outset of this inquiry that I should not pursue the complaint, since to do so would put them in double jeopardy. This was because their arrangements had been audited by Sir Thomas Legg. Subsequently they argued triple jeopardy, since their appeals against Sir Thomas Legg’s findings had been considered by Sir Paul Kennedy.

228. I recognise that I have considered issues which were also considered by Sir Thomas Legg and, on appeal, Sir Paul Kennedy. But these complaints contained serious allegations against both Members raised with me by a member of the public. Given the seriousness of the matters, I considered it right that I should myself inquire into them following the complaint I had received. It is, in my judgement, right also that, in a matter of this seriousness which has, under the rules of the House, generated a complaint supported by the necessary evidence, the House of Commons should have an opportunity to decide on whether the Members—or former Members—breached the rules of the House and, if so, whether they should face parliamentary sanction for their conduct. The audit process undertaken by Sir Thomas Legg enabled Members to pay back the sums of money that they were found to have over-claimed for the years covered by the audit (2004–05 to 2008– 09), as both Mr Mackay and Ms Kirkbride have paid back some sums of money. But that process did not enable the House to form a view on whether the rules of the House had been breached, whether that breach extended beyond the audited years, and, if so, what action to take in respect of the Member or Members concerned. The complaints process approved by the House enables that action to be taken. This is particularly germane, since both Mr Mackay in respect of his identification of his main home, and Ms Kirkbride in respect of her extension, deny any breach of the rules of the House.

229. I come now, therefore, to my conclusions on the complaint against Mr Mackay.

Rt Hon Andrew Mackay

230. The issues I have had to consider in respect of this complaint are:

a) Was Mr Mackay within the rules in identifying the Bromsgrove property he shared with his wife as his main home?

b) Was Mr Mackay’s decision to make claims for his London home above reproach?

Was Mr Mackay within the rules in identifying the Bromsgrove property he shared with his wife as his main home?

231. Mr Mackay’s evidence is that he designated as his main home the Bromsgrove property in his wife’s constituency in or around the autumn of 1997, following a discussion with the then Head of the Fees Office. In Mr Mackay’s recollection, the Head of the Fees Office had told him that he could identify either property as his main home and had advised him to select his Bromsgrove property. He had also advised Mr Mackay that Ms Kirkbride should select the London property as her main home. Mr Mackay’s firm

66 Mr Andrew Mackay and Ms Julie Kirkbride

recollection, which he has said he would repeat under oath, was that the then Head of the Fees Office was fully in possession of all the relevant facts in relation to his and Ms Kirkbride’s properties, and gave clear advice on the designation of their main and second homes. The former Head of the Fees Office strongly disputes this evidence. He has accepted that he does not now recall the details of the discussion, but he is adamant that he would not have given the advice which Mr Mackay recalls.

232. At this remove, it is not possible definitively to resolve this conflict of evidence. But, in my judgement, the standard of proof I have adopted in assessing this evidence (see paragraph 223) has not been met. In this regard, it is fair to say that the former Head of the Fees Office does not recall the conversation and that his recollections of Mr Mackay’s domestic arrangements were not wholly accurate. Mr Mackay argues with some persuasiveness that he would not have telephoned the former Head of the Fees Office in May 2009, when the highly critical reports of his arrangements had started to appear in the press, if he had thought that he had been acting against the advice of that official. I think it reasonable, therefore, to conclude that, whatever advice the former Head of the Fees Office believes that he gave, Mr Mackay believed, in 1997 and subsequently, that he (and his wife) were acting on the advice they had received from that official in the way they each designated their two homes. I accept also that Mr Mackay did not seek at any stage to disguise this arrangement.

233. I regret that Mr Mackay decided not to tell me about his telephone conversation with the former Head of the Fees Office in May 2009, even though I specifically asked him about the dates of his contacts with that official in my letter of 26 January.124 That conversation was relevant to my inquiry and had I not sought evidence from that official, and if he had not offered that information, it would not have come to light.

234. It is correct that, in 1997, the rules did not seek to define a Member’s main home— although, in my view, the ordinary interpretation of the term should be assumed. Given that Mr Mackay had two homes and was planning to spend a significant amount of time in each, I accept that he had a choice in the designation of his main home.

235. Equally, it should have been evident to Mr Mackay, as it should have been evident to the Department, that Mr Mackay would only have been able to make a claim on parliamentary allowances if he had designated his Bromsgrove property as his main home. Had he designated the London property as his main home, he (unlike Ms Kirkbride) would not have been able to claim for the Bromsgrove property because it was too far away from his constituency.

236. In the event, Mr Mackay decided to designate the Bromsgrove property as his main home and to claim from the Additional Costs Allowance for his property in London. That designation was made towards the end of 1997 or early in 1998. It remained in place until April 2009. I need to decide whether Mr Mackay was objectively within the rules in making that designation.

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237. The rules in relation to the identification of a Member’s main home became more specific in June 2003. From then, until they changed again in April 2009, the rules noted that the identification of a Member’s main home was normally a matter of fact, but where a Member had more than one home, their main home was normally the one where they spent more nights than anywhere else.

238. In considering, therefore, whether Mr Mackay was within the rules in identifying his Bromsgrove property as his main home, I have taken account both of the rules as they were before 2003 and the more specific provisions after that date. I have recognised too that the more specific rules do allow for exceptions by the use of the word “normally”. That does allow the Member’s particular circumstances to be taken into account.

239. I consider that Mr Mackay was wrong to designate the Bromsgrove property as his main home for the purpose of his claims from parliamentary allowances. I accept his estimate that he spent slightly more nights in his Bromsgrove property than he did in his London property, although his estimate was for one year only and was not produced in any detail. The difference, however, was not substantial. A difference in his pattern of overnight stays between London and Bromsgrove of just nine nights a year would have tipped the mathematical balance.

240. Mr Mackay should, therefore, have taken account of other factors in reaching his decision. He was living with his wife as a married couple and, from 2000, they were bringing up their child. During the period, his son was to start at school in London. His wife considered that the London home was her main home. The former Head of the Fees Office provided no grounds to substantiate his assertion that Ms Kirkbride’s main home was in her constituency. While Mr Mackay’s evidence is that he spent some additional nights in Bromsgrove on private business, the family (Mr Mackay and Ms Kirkbride and their son) operated as a unit. They lived together. They normally holidayed together. The pattern of their use of the two properties and the pattern of their lives does not sustain the argument that they lived separate lives with substantively different usage of each property. It is difficult to accept that Mr Mackay needed to maintain a main home in Bromsgrove in order to deal with family business or the affairs of his elderly relatives. It is equally difficult to give much weight to Mr Mackay’s childhood links to the Bromsgrove area. As an established couple living together, in my judgement the right course would have been for them to have decided together which was their main home and which their second home. I consider that the evidence suggests that the London property was Mr Mackay’s main home, as it was Ms Kirkbride’s, and that he was straining any reasonable interpretation of the rules to suggest otherwise.

241. I conclude that, on a proper interpretation of Mr Mackay’s circumstances, he was in breach of the successive rules of the House in identifying from 1997 to 2009 his Bromsgrove property as his main home, thus enabling him to claim from parliamentary allowances for his London home. I therefore uphold the complaint. I note that Mr Mackay would not have been able to claim from parliamentary allowances for the Bromsgrove property had he designated his London property as his main home.

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Was Mr Mackay’s decision to make claims for his London home above reproach?

242. I have considered additionally whether Mr Mackay’s decision to make claims for his London home could be held to be above reproach. I have done so in case the Committee were to consider that Mr Mackay, contrary to my conclusions, had correctly identified the Bromsgrove property as his main home.

243. The introductions by the Speaker to the editions of the Green Book from 2003 require that Members’ claims should be above reproach. A similar requirement was included in the general principles in the Green Book from April 2009. I consider that these were articulations of an expectation which has been fundamental to Members’ expenses claims for many years and is consistent with the provision in the Code of Conduct for Members of Parliament that they should “never undertake any action which would bring the House of Commons, or its Members generally, into disrepute” (paragraph 15 of the Code).

244. I consider that Mr Mackay’s decisions meant that his claims were not above reproach. The reason I have come to this conclusion is because I consider that Mr Mackay should have recognised that it was not right, or defensible, to come to an arrangement which he knew would mean that parliamentary allowances would be used to cover costs incurred on both his homes. That was, in my judgement, clearly the wrong thing to do. The simple fact is that Mr Mackay’s claims meant that, with his wife, he had ensured that parliamentary allowances subsidised both of his homes. That was not the purpose of the allowance. It was not in the spirit of the Green Book. And it meant that his claims were not above reproach.

Overall conclusion: Mr Mackay

245. My overall conclusion, therefore, is that Mr Mackay was in breach of the rules of the House in wrongly designating his Bromsgrove property, in his wife’s constituency, as his main home from 1997 to 2009. In my judgement, on the basis of all the evidence, it was not his main home. I consider also that the result of the arrangement was that his claims were not above reproach. This was a serious misjudgement which was sustained over more than 12 years. It resulted in very significant sums of public money being paid to Mr Mackay. It could very easily have been avoided at the outset by Mr Mackay recognising that London was his as well as his wife’s main home. And it could have been avoided if Mr Mackay had recognised that it was anyway not acceptable for him and his wife to receive payments from parliamentary allowances for both their shared homes. The result would have been that only his wife, and not he, could have made claims from parliamentary allowances for their Bromsgrove home, a home which was in her constituency and well away from his.

246. Mr Mackay has drawn attention to the rule introduced in May 2009 and included for the first time in the July 2009 edition of the Green Book. This required Members who were married to each other to nominate the same main home and claim the maximum of only one person’s allowance. He has argued that this is evidence that married couples could nominate different main homes before then. I do not agree. I accept that the rule clearly tightened the previous arrangement (it restricted the couple to sharing the one allowance). But in respect of the main home nomination, I consider that it made explicit what I believe was already implicit in the rules: Members who were sharing their lives and their two homes could not acceptably claim in a way which had the effect of relieving them of the costs incurred on both those homes.

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247. It is fair to note that Mr Mackay believed that he was only acting on the advice of the then Head of the Fees Office, given to him in 1997. But I agree with Sir Paul Kennedy that, if that was the advice, it was clearly mistaken and Mr Mackay should have recognised that. I consider also that Members have a personal responsibility in respect of all their decisions in relation to their allowances, and that it is not acceptable to argue, as Mr Mackay has sought to argue, that he was only acting on the advice of the top official in the Fees Office. Even if his instinct had not told him that it was wrong for him and his wife to make claims on both their homes, he would have been well-advised to have consulted the Department again in the period from 1997 to 2008, as the various editions of the Green Book, and the expectations on Members, changed. While his arrangements were openly declared in his nomination and, since 2003, his claim forms, and the Department has fairly accepted that it was reasonable for him to infer from the Department’s silence that there was no problem, it was unwise of him to assume that silence meant well considered consent.

248. While neither he nor his wife formally registered that they were sharing their properties with each other, and I consider that it would have been sensible for them to have done so, I do not think it proportionate to find against Mr Mackay or Ms Kirkbride on this account. Their arrangements should have been well known to the Fees Office, since they made no secret of their designation in their nominations or, since 2003, their individual claims forms.

249. Mr Mackay has pointed out reports of certain Ministers and a former Speaker claiming for a second home while living in funded accommodation (grace and favour homes). I do not consider that such a practice—which I believe has now been ended—can be used as a basis for justifying Mr Mackay’s arrangements, which I consider on their merits to be in breach of the Green Book rules and the Code of Conduct. Had such an arrangement been intended to have been available to Members married to each other, then the Green Book would have needed to have made provision for this. Mr Mackay was only able to have such an arrangement because of the way he identified his main and second homes.

250. It is perhaps understandable that, with the pressure of other business, Mr Mackay seems never to have reviewed his initial decision until it came to light in 2009. He was unwise not to have done so. Had he done so, however, his decision may not have been any different. I regret that, even now, and after extensive independent reviews, Mr Mackay has not recognised or accepted what I consider to be his serious misjudgement. He has already paid a high price for that misjudgement. But it is, I believe, unfortunate that he continues to believe he was in the right.

Ms Julie Kirkbride

251. I have received no complaint against Ms Kirkbride in respect of her decision to identify London as her main home and make claims on her Bromsgrove property. She will have known that that property, which she shared with her husband, had been identified by him as his main home for the purpose of his allowance claims on the London home. I draw no conclusion on her conduct in this respect or on how far she, as opposed to Mr Mackay, bore some responsibility for the deeply flawed arrangement which existed.

70 Mr Andrew Mackay and Ms Julie Kirkbride

252. My view on Ms Kirkbride’s decisions which are the subject of the complaint against her, are influenced by whether the claims she made were made for her second home, or whether they were made for what was in reality her husband’s main home. I have concluded that Mr Mackay was wrong to designate the Bromsgrove property as his main home. Given that, it would be unreasonable to hold that Ms Kirkbride could not make legitimate claims from parliamentary resources for the home in her constituency which she had identified as her second home.

253. The questions I have considered in relation to this complaint, therefore, are:

a) Was Ms Kirkbride within the rules in claiming interest on an additional mortgage to pay for an extension to her Bromsgrove property?

b) Should Ms Kirkbride have taken account of her brother’s presence in the property in the claims she made against parliamentary allowances?

Was Ms Kirkbride within the rules in claiming interest on an additional mortgage to pay for an extension to her Bromsgrove property?

254. Ms Kirkbride added to the joint mortgage she shared with Mr Mackay in April 2008. She used that extension to the mortgage to improve the Bromsgrove property by building a third bedroom for it. The rules at the time allowed Members to claim for the interest on a mortgage taken out to improve the property. That was a change from the previous rules. The rules introduced in 2009 no longer allowed this. The window for such improvement claims lasted, therefore, from July 2006 to March 2009. I have considered Ms Kirkbride’s claims against the rules as they were at the time.

255. As with any claim against the ACA, the additional costs arising from such an improvement still needed to be necessary for the purpose of performing the Member’s parliamentary duties. I consider that Ms Kirkbride has established that she met that test. The Member needed a room for the person who looked after her child while she was fulfilling her parliamentary duties. It was not reasonable to expect the child carer— whoever they might be—to share a bedroom with the growing child. It was, therefore, in my judgement within the rules as they were at the time for Ms Kirkbride to have claimed the interest costs of the extended mortgage necessary for this addition to her property.

256. The rules provided that Members should “seek advice on what is allowed before committing to building works of any sort” (Green Book for 2006, paragraph 3.14.1). Ms Kirkbride appears to have sought the agreement of the Department, at least orally, sometime before June 2008. That was in my judgement likely to have been sufficiently close to her extending her mortgage in April 2008 to have met the requirement to seek prior agreement.

257. I conclude, therefore, that Ms Kirkbride was within the rules in claiming interest on the additional mortgage which she, with her husband, took out in April 2008 to extend her Bromsgrove constituency property by building a third bedroom for it so that she had somewhere for her child carer to stay while she was busy on her parliamentary duties.

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Should Ms Kirkbride have taken account of her brother’s presence in the property in the claims she made against parliamentary allowances?

258. The rules require that Members should not claim for the living costs of anyone other than themselves. It is necessary, therefore, to consider whether the additional costs incurred as a result of building the third bedroom, and other costs claimed under the Additional Costs Allowance, should have taken account of the use of the property by Ms Kirkbride’s brother.

259. The evidence from Ms Kirkbride and her brother is that he stayed overnight at the property principally to look after Ms Kirkbride’s young son. Occasionally, he would stay overnight in order to assist her and her constituency staff with their IT. The evidence from Ms Kirkbride and her brother is that the use of the address in registering with Companies House was a mistake and that in fact the company so registered never did business. Their evidence is that Mr Kirkbride was eligible to register to vote in the constituency; it did not need to be his main home.

260. I consider that it would be an unduly harsh interpretation of the rules to require a Member to meet the living costs of having a person stay overnight in their home when that person was there to look after their dependent child so that they could perform their parliamentary duties. Ms Kirkbride’s son was at an age when it was essential that someone should be with him in the evening and overnight. The arrangement enabled Ms Kirkbride to continue with her constituency duties as a Member of Parliament. Her husband had his own parliamentary duties. In general, Ms Kirkbride’s brother was there only when she and her son were staying there. The additional use of the property by her brother when Ms Kirkbride and her son were not there was not, in my judgement, sufficiently regular to suggest that the cost of these stays should have been reflected in the claims Ms Kirkbride made on parliamentary allowances.

261. The circumstances which led to the overnight stays of Ms Kirkbride’s brother in her constituency home were, therefore, in my judgement, significantly different from those which I found in the case of the adult daughter of Mrs Anne Main, the Member for St Albans.125 They were significantly different in terms both of the reasons for the overnight stays and the arrangements for such stays. I have found that Mr Kirkbride’s stays were properly in support of Ms Kirkbride’s parliamentary duties. Ms Kirkbride was, therefore, within the rules in treating Mr Kirkbride’s living costs in her constituency home as having been incurred for the purpose of performing her parliamentary duties and not for personal purposes. I did not find this in respect of the use Mrs Main’s adult daughter made of Mrs Main’s constituency property.

Overall conclusion

262. My overall conclusion in respect of the complaint against Ms Kirkbride, therefore, is that Ms Kirkbride was within the rules of the House as they were at the time in claiming interest on the extension to her joint mortgage which she used for the improvement of her

125 Committee on Standards and Privileges, Eighth Report of Session 2009–10, HC 353

72 Mr Andrew Mackay and Ms Julie Kirkbride

Bromsgrove property, in order to enable her to conduct her parliamentary duties in her constituency. I conclude also that she was within the rules in not reflecting in her claims the cost of her brother staying overnight in the house, principally to look after her son when she and he were staying there so that she could continue to carry out these duties. I do not, therefore, uphold the complaint against her.

7 October 2010 John Lyon CB

Mr Andrew Mackay and Ms Julie Kirkbride 73

Oral and Written evidence received by the Parliamentary Commissioner for Standards

1. Letter to the Commissioner from Mr Michael Goggins, 30 October 2009

Further to my letter of 23 October126 regarding the Right Honourable Andrew Mackay, Member of Parliament for Bracknell, and his wife the Right Honourable Julie Kirkbride, Member of Parliament for Bromsgrove, and their respective claims under the Additional Costs Allowance.

For the purposes of claiming Additional Costs Allowance towards their family home in Westminster Andrew Mackay registered their residence in Bromsgrove as his main home, while at the same time Julie Kirkbride claimed Additional Costs Allowance towards the same Bromsgrove property, the same being in her constituency, and registered as her main home their family home in Westminster. I refer your attention to the attached article published by the Guardian newspaper dated 14 May 2009.127

For the purposes of claiming the Additional Costs Allowance the Parliamentary Green Book, I refer your attention to the same as published in July 2006 which applied at the time and which I'm sure you have at your disposal, states under Section 3.3.1. Principles that:

“Members must ensure that arrangements for their ACA claims are above reproach and that there can 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.

3.3.2. Members must avoid any arrangement which may give rise to an accusation that they are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds...

3.11.1. Definitions

Main Home. That a Member must register a main home which will be a matter of fact or in cases of doubt a place where a Member spends most nights.”

The introduction by the Speaker of the House Michael Martin reminds Members that it is their responsibility for ensuring that their use of allowances is above reproach.

It would appear the rationale behind Andrew Mackay registering their residence in Bromsgrove as his main home was because “he was brought up in the Midlands and has strong connections in the area” and furthermore he alleges he was advised to do so and not by reason of the fact that it was in reality his main home as required by the rules. That Andrew Mackay spent more time at their Westminster home as opposed to their Bromsgrove residence is evidenced by the fact that not only is Westminster the principal family home and from where their child attends school (see article from the Birmingham Post dated May 25th 2009128) but also Andrew Mackay has admitted to spending most weekends and a considerable amount of parliamentary recess time in his constituency of Bracknell (see article ... from a newspaper getbracknell dated May 14th 2009129) thereby severely restricting the remaining amount of time which he would have available to spend at their Bromsgrove residence. In declaring the family home in Westminster as her main home for the purposes of claiming ACA Julie Kirkbride has to all intents and purposes admitted that the main family home is in fact Westminster and not Bromsgrove and it would be prove strange indeed if when taking account of how much

126Mr Goggins had initially written to me about this matter on 23 October, and had been asked by my Office on 28 October to provide sufficient evidence to justify at least a preliminary inquiry. That exchange is not included in the written evidence. 127 WE 2 128 WE 3 129 WE 4

74 Mr Andrew Mackay and Ms Julie Kirkbride

time Andrew Mackay spends at his family home in Westminster and his constituency of Bracknell he is nevertheless in a position to satisfy the requirements contained in the rules for claiming allowances that his main home was in fact their residence in his wife's constituency of Bromsgrove.

Contained in the same article [from getbracknell] is an apparent admission by Andrew Mackay that his claim for expenses were unreasonable and therefore not beyond reproach and although Andrew Mackay goes on to state that he intended to pay the money back there is as far as I'm aware no media coverage of him actually paying the money back.

In relation to Julie Kirkbride claiming Additional Costs Allowance for her constituency home in Bromsgrove the question arises as to what if any account should be given to the fact that since 2004 her brother Ian lived at the same address rent free. See an article from the Telegraph dated 28th May 2009.130

That the same property was to all intents and purposes Ian Kirkbride's main residence is evidenced by the fact that not only did his name appear on Bromsgrove electoral roll since 2004 but that he also ran a business from the same address. Furthermore there is apparently evidence that he spent most of his time there even when Julie Kirkbride wasn't staying there. Unfortunately I am no longer in possession of the newspaper article.

The rule book for claiming Additional Costs Allowance states that allowances claimed must be wholly, exclusively and necessary for a Member to carry out their duties and that close family members should not financially gain from any arrangement whereby such an allowance is claimed.

No account appears to be given by Julie Kirkbride in claiming her allowances for the fact that her brother was staying at the same property rent free and that she was in fact subsidising his cost of living at the expense of the public purse; the Commissioner for Standards having recently stated in the case of Tony McNulty that the cost of living necessarily includes mortgage interest payments.131

In addition Julie Kirkbride has recently taken out a loan of some £50,000 part funded through the public purse by means of Additional Costs Allowance in order to build a third bedroom at her constituency home so as her son and her brother no longer have to share the same bedroom when Julie Kirkbride and her family stay over.

Julie Kirkbride's constituency home is two bedroomed and therefore sufficiently large enough to accommodate her needs and that of her son. It is not incumbent on the taxpayer to provide for the needs of her brother and the same is contrary to the principles contained in the Green Book for the claiming of Additional Costs Allowance.

Although Julie Kirkbride insists that her brother stays at her Bromsgrove home in order to look after her son it should be noted that the provision of childcare is not claimable against allowances.

30 November 2009

2. Extract from article in the Guardian, 14 May 2009

MPs’ expenses: Why Andrew Mackay had to resign

...

[Mr] Mackay had designated his London home as his second residence, allowing him to claim more than £1,000 a month in mortgage interest payments for the property from the annual £24,006 Additional Costs Allowance (ACA). That was in line with many other MPs.

His mistake was to designate as his main home a flat he shares with Kirkbride in a large listed building in her Bromsgrove constituency. Mackay says there is nothing wrong with this because he was brought up in the Midlands and has strong connections with the area. He designated no property in his Berkshire constituency.

130 WE 5 131 Standards and Privileges Committee, Tenth Report of Session 2008–09, HC 1070

Mr Andrew Mackay and Ms Julie Kirkbride 75

Kirkbride designates the Bromsgrove flat as her second property, on the basis that their London flat is her main home. This allows her to claim more than £900 a month for the mortgage interest on her constituency flat.

...

... the leadership pointed out to Tories that MacKay's resignation marked a significant moment in setting out the parameters for the committee which will examine the expenses of all Tory MPs with questionable claims. This is because Mackay's arrangements were entirely within the rules, and had been approved by the most senior officials in the Commons Fees Office. Mackay and Kirkbride's arrangements date back around nine years following their wedding in 1997. They went to the Fees Office and asked what they should do about designation of their homes. The most senior official in the office approved the arrangement.

“This was all transparent, it was all approved and frankly until it was drawn to my attention it did not occur to me it didn't pass the ‘reasonableness’ test,” Mackay said. “Looking back now, it does look strange, I have clearly made an error of judgment for which I profusely apologise and I’ve done what I think is the right thing.”

...

14 May 2009

3. Extract from article in the Birmingham Post, 25 May 2009

Calls grow for Bromsgrove MP Julie Kirkbride to resign

Pressure is mounting on Bromsgrove MP Julie Kirkbride to resign after it was revealed that her brother was allowed to live rent-free at her taxpayer-funded home in Worcestershire.

The Conservative Member and her husband have already been criticised for both claiming for different second homes—despite sharing properties.

But calls for her to follow Andrew MacKay out of office grew when it was claimed that her 59-year-old brother, Ian Kirkbride, had been listed on the electoral register as living at their home since 2004. He had also registered a business at the property’s address.

Conservative Party leader David Cameron said that Ms Kirkbride had questions to answer but said her case was different to that of her husband.

“Julie does live in London, that's where her son goes to school and she does have a genuine constituency home in Worcestershire,” he said. “She will have to answer those questions but I do think the two cases are quite different.”

Party sources said Ms Kirkbride did not appear to have broken any rules, although her claims would be scrutinised internally, in common with those of all Conservative MPs.

Ms Kirkbride claimed that her brother had stayed at her home to provide childcare and said she could not cope without his help. He has been living at the couple's apartment ... near Bromsgrove, and was registered on the electoral roll as far back as 2004.

Under House of Commons rules, only an MP's spouses and children are supposed to share the second home.

Last June, Ms Kirkbride wrote to Parliament’s Fees Office telling them she had been forced to extend the apartment “accommodating the needs of our growing family.”

Bracknell MP Mr MacKay said on Saturday that he would leave Parliament at the next general election. He claimed a second homes allowance on the couple's London flat, which Ms Kirkbride declared as her main residence so that she could claim expenses on their Bromsgrove residence. This meant the taxpayer was effectively subsidising both of their homes.

...

76 Mr Andrew Mackay and Ms Julie Kirkbride

Ms Kirkbride released a statement which said her brother stayed at both homes but insisted that she had nothing to apologise for. “I claim no expenses for my brother, neither do I pay him or claim for his help. He also acts as a volunteer in helping me with my office work and administration,” said the statement.

“Up and down the country, families have relatives stay and get them to help with things like child care. There is no cost to the taxpayer in the arrangement and nothing for me to apologise for. To describe this as my brother living rent-free is a total distortion.”

4. Extract from article in getbracknell newspaper, 14 May 2009

Andrew Mackay: 1 don't have a Bracknell constituency home

Bracknell MP Andrew Mackay does not have a home in his constituency, he confirmed today.

“No I don't have a home in the constituency, that's the whole point. And I’ve never claimed that I have, that’s a matter of public record,” he said.

“Most Fridays and Saturdays I'm here doing walkabouts and meeting constituents and during recess I try to spend as much time as I physically can here,” he exclusively told the Bracknell Forest Standard and getbracknell.

Mr MacKay has been MP for Bracknell for 25 years.

He made the admission after he sensationally quit as parliamentary aide to Tory boss David Cameron this morning over “unacceptable” second-home expenses claims.

Mr MacKay, who is married to fellow Tory MP Julie Kirkbride, claimed mortgage interest on their London home while she did the same on their constituency house in the West Midlands. This meant the couple effectively had no main home but were claiming for two second properties, funded by the taxpayer. He said: “As senior adviser to David Cameron who has been involved with the very tough work we've been doing with MP's expenses, I was one of the first to volunteer to submit my claims and receipts to internal party examiners yesterday immediately after I spoke to you.

“They came back very late last night to say that they felt my claim was not within the bounds of what would be considered reasonable.

“Very early this morning I had a phone conversation with David Cameron where I said I wished to resign from the job, he said he thought that was the right thing to do.

“Since then I have been inundated with supportive e-mails and calls. I feel that this judgement is something that lets people down, but I'm grateful from the support from my constituents it's been truly heart-warming.

“Julie and I, we have a family home near the House of Commons and a family home near Bromsgrove where our family has been brought up and we have family and friends.

“The Fee Commission told us this was all right and as far as I was concerned, I was doing what I was advised to do.

“Yesterday I told you in completely good faith that I was confident in my expenses, that regarded all the items and receipts and I had claimed for over the last four years.

“What I didn't look at or think about was whether it was an unreasonable claim on our house. I intend to pay the money back of the amount decided by the Commission.”

14 May 2009

5. Extract from article in the Daily Telegraph, 28 May 2009

MPs’ expenses: Julie Kirkbride “considering stepping down” over taxpayers’ cash scandal

Mr Andrew Mackay and Ms Julie Kirkbride 77

Julie Kirkbride, the Conservative MP, is considering standing down after it was disclosed that she had used her MP's expenses to fund a £50,000 extension to her constituency flat for her brother.

...

It came days after she admitted her brother lived in constituency home rent free and she employed her sister to do constituency work from a house 125 miles from her Bromsgrove seat.

...

Mr Mackay, 59, and Ms Kirkbride, 48, have claimed a total of £170,000 in expenses for second homes— covering both their properties—over the past four years.

...

Miss Kirkbride was granted permission by the parliamentary Fees Office to increase her taxpayer-funded mortgage to build an extra bedroom.

Despite her insisting that the taxpayer faced no extra costs over her brother staying rent-free in her constituency home, the arrangement added an extra £250 a month to her expenses.

...

In a radio interview, she said it never crossed her mind that she was doing anything wrong by claiming taxpayers' money to part-fund the extension.

...

Writing in the Times, she said: “I’m not looking for sympathy.” But she added: “Because of the size of our home in Bromsgrove, [her son] had been sharing a bedroom with his uncle. We felt that, as a growing boy, he'd soon want his own space—so we needed to remortgage to build another bedroom.

“I’ve laid out these details to show my constituents and everyone else why I have involved my family in my professional arrangements. It's not about profit.”

According to copies of documents seen by the Daily Telegraph, Ms Kirkbride told the parliamentary authorities last year that she needed an extra bedroom to house her “growing family”.

She was therefore given permission to increase her mortgage by £50,000, leaving the taxpayer to pay the higher interest costs on the loan. However, it emerged that her brother, Ian, lived at the flat and did not pay rent. Her family had not increased in size since 2000.

Ms Kirkbride said the “arrangement” had “no cost to the taxpayer” but that claim was undermined when she admitted that she claimed for the costs of building the extra bedroom so that her brother and son did not have to share a room.

...

28 May 2009 Rt Hon Andrew Mackay

6. Letter to Rt Hon Andrew Mackay from the Commissioner, 5 November 2009

I would welcome your help on a complaint I have received from Mr Michael Goggins about the identification of your main home for the purposes of your claims against the Additional Costs Allowance.

78 Mr Andrew Mackay and Ms Julie Kirkbride

I attach a copy of the relevant parts of letters of 23 and 30 October from the complainant, together with the relevant press cuttings appended. I enclose also a copy of the Registrar’s letter of 28 October to which the complainant refers.132

In essence, the complaint is that you have wrongly identified your main home for the purposes of claims against the Additional Costs Allowance, contrary to the rules of the House. I take the period of the complaint to cover the financial years from 2004–05 to 2008–09 inclusive. You will see that the complainant has also raised a complaint against Ms Julie Kirkbride MP.

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 in relation to the Additional Costs Allowance which appear to be relevant to the main period covered by this complaint are set out in Section 3 of the Green Book published in July 2006.

In his introduction to that edition of the Green Book, the Speaker wrote:

“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. In cases of doubt or difficulty about any aspect of the allowances or how they can be used, please contact the Department of Finance and Administration. The Members Estimate Committee, which I chair, has recently restated the Department's authority to interpret and enforce these rules.”

The rules in relation to the Additional Costs Allowance are set out in Section 3. The scope of the allowance is provided in Section 3.1.1 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.”

Eligibility is set out in Section 3.2.1 as follows:

“You can claim ACA if:

a You have stayed overnight in the UK away from your only or main home, and

b This was for the purpose of performing your Parliamentary duties, and

c You have necessarily incurred additional costs in so doing, and

d You represent a constituency in outer London or outside London.”

The principles include the following in Sections 3.3.1 and 3.3.2:

“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.

“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.

132 The letters of 23 and 28 October are not included in the written evidence – see WE 1

Mr Andrew Mackay and Ms Julie Kirkbride 79

Section 3.4.1 deals with the location of overnight stays as follows:

“If your main home is in the constituency, you can claim ACA for overnight stays in London—or in another part of the constituency if reasonably necessary in view of the distance from your only or main home. Please contact the Department of Finance and Administration for information on such arrangements.

“If your main home is in London you can claim for overnight stays in the constituency.

“If your main home is neither in London nor the constituency you can choose in which of these areas to claim ACA.

“If on your journey to London or your main home you cannot practicably reach your destination on the same day as your day of departure, you may claim the cost of an overnight stay en route to your destination. Any such arrangements must be cleared in advance with the Department of Finance and Administration.

“See section 3.10.1. for definition of your main home.”

Section 3.5.3 provides as follows:

“You must inform the Department if you are claiming ACA in respect of a property which you share with another Member.”

Section 3.11.1 provides the following definitions:

“Main home

When you enter Parliament we will ask you to give the address of your main UK home on form ACA1 for the purposes of ACA and travel entitlements. Members are expected to locate their main homes in the UK. It is your responsibility to tell us if your main home changes. This will remain your main home unless you tell us otherwise.

“The location of your main home will normally be a matter of fact. If you have more than one home, your main home will normally be the one where you spend more nights than any other. If there is any doubt about which is your main home, please consult the Department of Finance and Administration.

“Constituency

For the purpose of the ACA, overnight stays within 20 miles of your constituency boundary are regarded as overnight stays within your constituency.

“London

Similarly, for the purposes of the ACA, overnight stays within 20 miles of the Palace of Westminster are deemed to be overnight stays within London.”

Similar provisions were set out in the Green Book for June 2003, except that the principles set out in paragraphs 3.3.1 and 3.3.2 of the July 2006 Green Book were not included, nor were the references to the boundary provisions for a constituency and London home as provided in paragraph 3.11.1 of the July 2006 Green Book.

I would welcome your comments on this complaint in the light of this summary of the rules. In particular, it would be helpful to know:

1. Your arrangements for claiming the ACA on your second home from 2004–05 to 2008–09 inclusive— including the location of your main and second home and the dates of each designation.

2. The purchase costs of each home and the details of any mortgages which you hold or have held on your first and second homes since 2004–05.

80 Mr Andrew Mackay and Ms Julie Kirkbride

3. The nature of the accommodation provided by your main and second homes and the reason why you identified the property in question as your main home.

4. The number of nights you spent in your designated main home in each financial year from 2004–05 to 2008–09 inclusive; the number of nights you spent in the home on which you claimed against your ACA; and the number of nights you have spent elsewhere. It would be helpful to have any documentary evidence, including diaries or travel records, which you have used to prepare these figures. I appreciate that these figures are likely to be estimates, but it would be helpful if you could give the best estimates you can, setting out the information on which they are based.

5. Whether, and if so when, you informed the Department that you were claiming ACA in respect of a property which you shared with another Member, namely Ms Julie Kirkbride MP.

6. The size of your ACA claims in each financial year from 2004–05 to 2008–09 inclusive, together with the main categories under which you claimed, identifying your mortgage interest claims and what proportion of your total mortgage they represent.

7. Whether at any time you consulted the then Department of Finance and Administration about your arrangements. If so, it would be helpful to have details of that consultation, including any documentary evidence you may have.

Any other points you may wish to make to help me with this inquiry would, of course, be most welcome.

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 his complaint and am writing to you about it.

It would be most helpful if you could let me have a response to this letter within the next three weeks. If there is any difficulty with this or you would like a word about any other matter, please get in touch with me at the House.

I would be very grateful for your help on this matter.

5 November 2009

7. Letter to the Commissioner from Rt Hon Andrew Mackay, 18 November 2009

Further to the letters that you recently sent me and my wife Julie Kirkbride we were wondering whether you have considered the serious issue of double jeopardy. We note that Sir Thomas Legg has not scrutinised the second home allowances of our colleagues who were being investigated by you so as to avoid double jeopardy. As we are in dialogue with Sir Thomas concerning his provisional findings on issues directly relating to the complaints you raise we would much appreciate your comments and advice.

18 November 2009

8. Letter to Rt Hon Andrew Mackay from the Commissioner, 23 November 2009

Thank you for your letter of 18 November which you have written on behalf of yourself and your wife, Ms Julie Kirkbride MP, in respect of the inquiries I have made of you in relation to the complaint against you which I have received from Mr Michael Goggins.

You ask about the dialogue you are in with Sir Thomas Legg. This is a matter for Sir Thomas Legg to consider. You may, therefore, wish to write to him to set out your concerns and to seek his response. If any of this leads either of you to have to ask for a little more time before sending me your response to my letters to each of you of 5 November, do let me know.

23 November 2009

Mr Andrew Mackay and Ms Julie Kirkbride 81

9. Letter to the Commissioner from Rt Hon Andrew Mackay, 2 December 2009

Thank you for your response of the 23rd November. I apologise for not explaining our concerns about double jeopardy clearly.

As we previously noted Sir Thomas Legg has not scrutinised the second home allowances of our colleagues who were being investigated by you so as to avoid double jeopardy. The complaint against us was only lodged with you at the end of October by which time Sir Thomas had made his provisional findings on issues directly relating to these complaints and we have since been in dialogue with him. Therefore our specific point is to avoid double jeopardy surely this matter should be left to Sir Thomas Legg and it is on that which we would appreciate your advice.

2 December 2009

10. Letter to Rt Hon Andrew Mackay from the Commissioner, 14 December 2009

Thank you for your further letter of 2 December responding to mine of 23 November in which you raise again the question of the inquiry which I have instigated following separate complaints against you and Ms Julie Kirkbride MP.

I recognise your concern about going back over ground which you may already have covered in the course of Sir Thomas Legg’s audit. But I do not think it would have been reasonable for me to have refused to accept on these grounds a complaint properly made to me in accordance with the procedures approved by the House. Nor do I think it would be reasonable in all the circumstances for me now to seek to abandon my inquiry, assuming it was possible under the rules of the House for me to do so.

My reasons for this conclusion are as follows. My inquiries will relate solely to the complaint and not to any other matters in relation to your or Ms Kirkbride’s Additional Costs Allowance claims, which may have been considered by Sir Thomas. If I were to uphold the complaint—and I have obviously formed no view at all on that—then, unlike Sir Thomas’s audit process, the Committee on Standards and Privileges and the House would have the opportunity to consider and decide if the rules have indeed been broken and, if so, what, if any, sanction to make. In that event, I believe that the Committee would want to take full account of any repayments you had made as a result of Sir Thomas’s audit. The process is, therefore, different, as is the scope of the inquiry and the range of consequences.

While recognising your understandable concerns, in the light of paragraph 18 of the Code of Conduct for Members of Parliament I do ask that you and Ms Kirkbride agree to co-operate with my inquiry and respond to my letter of 5 November. I would be most grateful for your help.

I am copying this letter to Ms Julie Kirkbride MP, since I know you have written on behalf of you both.

14 December 2009

11. Letter to the Commissioner from Rt Hon Andrew Mackay, 22 December 2009

Thank you for your letter of the 14th December, the contents of which we were very disappointed to read as we still strongly believe that your decision amounts to double jeopardy.

However, if this is your final decision we would naturally wish to co-operate by responding to your letter of the 5th November to explain why there is no case to answer.

As we will be leaving Westminster for the recess today and not returning until the 12th January I hope you will understand that it will be a little time before we can comprehensively answer all the questions you put to us. We will, therefore, be back in touch in mid January.

22 December 2009

82 Mr Andrew Mackay and Ms Julie Kirkbride

12. Letter to the Commissioner from Rt Hon Andrew Mackay, 21 January 2010

As agreed I am responding to your inquiries concerning the complaint made by a Mr Goggins. You asked seven specific questions which I have answered below. However let me first make four brief factual points which I hope will assist with your deliberations.

Firstly after I married Julie Kirkbride I sought advice from the then Head of the Fees Office [...] about our ACA. He asked about our homes and was told we jointly owned a family house in Westminster and a large apartment in a listed building in Julie's constituency. I explained that I never had a home in my constituency. [The Head of the Fees Office] then advised that as we had two proper homes with a joint mortgage and where we were both on the electoral roll either could be deemed a main home. He recommended that I nominate [the Bromsgrove property] as my main home and claim ACA on [the London property].

Secondly this arrangement was put on file in the Fees Office and ACA payments were made accordingly. At all times we declared our second and main home addresses to the Fees Office in a totally transparent way. This was never queried.

Thirdly [the Bromsgrove property] was a natural main home for me as I had close links to the Bromsgrove area where my family and friends still live. I was born and brought up in the next door constituencies and look after the interests of two close elderly relatives through our family's longstanding property portfolio based in the area.

Fourthly on 20 May last the rules were changed with immediate effect to state:

“Members who are married to each other must nominate the same main home and are limited to claiming one person's PAAE between them.”

Whilst the single claim did not affect us, as I had already elected to take up the London Costs Allowance due to a rule change for the new financial year, the introduction of the rule on nominating the same main home confirms this was not previously in place.

My answers to your questions are as follows:

1. During this period I nominated [the Bromsgrove property] as my main home and [the London property] as my second home. We bought [the London property] for £850,000 in 1998 taking out a mortgage of £200,000 which we still maintain on an interest only basis. We bought [the Bromsgrove property] in 1997 for £75,000 in a very dilapidated state and spent more than double the purchase price on restoring it. We took out an interest only mortgage of £180,000 on it in 2004. We further extended the interest-only mortgage by £50,000 in April 2008 to cover the cost of an extra bedroom to meet our family's needs.

3. The accommodation in [the Bromsgrove property] originally comprised a sitting room, dining room, kitchen, two double bedrooms and two bathrooms. We then added a further bedroom to make it three. [The London property] is a three bedroom terraced house with three reception rooms, two bathrooms and a study. My earlier points above explain my designations.

4. Whilst my points above largely cover this question I would just add that I rarely spend a night in my constituency as on Fridays and weekends I prefer to commute between there and my main home which are linked by motorways or dual carriageways for virtually the whole journey. I also regularly visit my constituency from London during the week. As a result, I spend most Friday, Saturday and Sunday nights (I attend to previously mentioned family business on Monday morning) as well as most recesses at my main home.

As you point out, the figures for where I spend my nights are likely to be estimates, particularly as I do not have an electronic diary or written records for the years in question. However, I can give a best estimate for the last calendar year which I believe would also broadly reflect my sleeping patterns in the financial years in question. This estimate would indicate that I spent 155 nights at [the Bromsgrove property], 139 nights at [the London property], 54 nights on holiday, nine nights on parliamentary business abroad and eight nights in the constituency.

Mr Andrew Mackay and Ms Julie Kirkbride 83

5. I did not inform the Fees Office that I was sharing a property with another Member who was my wife. I made the reasonable assumption that this rule was to identify non-related MPs who had come to private agreements to share properties and did not apply to those Members where it was public knowledge that they were married to each other.

6. The mortgage has always been interest only and I attach a breakdown of my ACA claims which is a best estimate as information provided by the Fees Office is somewhat confusing.133

7. I refer you to points two and three in my initial comments above.

I conclude by hoping you will agree this is a vexatious complaint, lodged late in the day after Sir Thomas Legg's inquiries were near conclusion and there is no case to answer.

21 January 2010

13. Summary of Rt Hon Andrew Mackay’s ACA/PAAE claims 2004–05 to 2008–09 (figures from the Member)

Year Mortgage Interest (£) Other items (£) Total (£) 2004–05 8,439 9,554 17,993 2005–06 9,565 11,134 20,699 2006–07 10,434 11,655 22,089 2007–08 11,968 10,607 22,575 2008–09 8,824 14,532 23,356 Source: Letter to the Commissioner from Rt Hon Andrew Mackay, 21 January 2010.134

14. Letter to Rt Hon Andrew Mackay from the Commissioner, 26 January 2010

Thank you for your letter of 21 January responding to the letter which I sent you on 5 November, about this complaint in respect of the identification of your main home for the purposes of your claims against the Additional Costs Allowance.

I was grateful to receive this response. It would be very helpful if you could help me on the following points which arise from this information:

1. Do you have any documentary or other evidence to substantiate the estimates you have made of the number of nights you spent in various locations in 2009?

2. Could you give me a little more detail about how you fitted your parliamentary duties into your family life? It has been suggested from press reports that your son is at school in London. It would be helpful to know: whether you have dependent children who live with you; how that operates in terms of how you allocate your time between your two homes; and whether, in the light of your professional responsibilities, your living arrangements are significantly different from those of your wife. In particular, it would be helpful if you could explain how your main home is in Bromsgrove while your wife’s appears to be in London. I appreciate that these are personal questions and I would not ask them unless I considered it necessary for me to resolve satisfactorily this inquiry.

3. Could you let me know the dates of the contacts you had with the then Head of the Fees Office? You report that your arrangement was put on file in the Fees Office. It would be helpful if you had any documents relating to the advice you sought from the then Head of the Fees Office and to the filed document to which you refer.

133 Not included in the written evidence. The information given by Mr Mackay about his mortgage interest claims is reproduced at WE 13 below. 134 WE 12

84 Mr Andrew Mackay and Ms Julie Kirkbride

4. Could you clarify my understanding of your answer to point 5, where you say that you did not inform the Fees Office that you were sharing a property with another Member, who was your wife? I am finding it difficult to reconcile that with the implication in point 1 of your initial comments, where you report that you told the then Head of the Fees Office that you jointly owned your two properties.

5. Could you let me know, as requested in my letter of 5 November, whether you claimed from your ACA for the full mortgage interest on your second home in London? If you did not, what proportion of that interest was represented by your claims?

If you could let me have a response to this within the next two weeks, I would be most grateful. If there is any difficulty about this, do let me know. Subject to your response, I would propose to consult the Department of Resources. I would then be back in touch to show you their advice, and it may be that we should meet for an interview at that point so that I can resolve this matter.

26 January 2010

15. Extract from the Report by Sir Thomas Legg on his ACA Review, 1 February 2010: Rt Hon Andrew Mackay 135

Mr Mackay is married to another MP. He designated his London flat as his second home, while his wife nominated it as her main home. He designated his constituency home as his main home while his wife nominated it as her second home. This meant that, between them, the couple had no main home which was not funded by the ACA. Throughout the five years of the review period, they both claimed at or close to the full allowance to support their two homes. These arrangements obtained a financial benefit for the couple which appears unintended under the Green Book rules, and as such contrary to the principles governing it. Had they made different designations, each MP might reasonably have claimed up to two-thirds of the full allowance on a shared second home. On this footing, each of them was overpaid by one-third of the maximum ACA for each year of the review period. This is £29,243.

He was also paid £9,950 for cleaning over the four years 2004–05 to 2007–08, thus exceeding the allowable maximum by a total of £1,950.

Total repayment recommended: £31,193.00

Total repayments received since 1 April 2009: £31,193.00

Balance recommended to be repaid: £0.00

16. Extract from ACA Repayment Appeals by Sir Paul Kennedy, January 2010: Rt Hon Andrew Mackay 136

The ACA Review points out that you are married to another MP, Julie Kirkbride. You designated your London flat as your second home. She nominated it as her main home, and the constituency home, which you also shared, as her second home. For you it was designated as your main home. That enabled you, as a married couple, to claim the expenses relating to both properties against ACA, and you did so. Your claims being at or close to the full annual allowance. The Review describes this “a financial benefit for the couple which appears unintended under the Green Book rules, and as such contrary to the principles governing it”. It is said that had you made different designations each of you might have reasonably claimed up to 2/3 of the full allowance on a shared second home. The Review has therefore concluded that each of you was overpaid by 1/3 of the maximum ACA for each year of the review period, a total of £29,243.

135 Published as Appendix 1 to the First Report of the Members Estimate Committee, Session 2009-10 (HC 348) 136 Published as Appendix 2 to the First Report of the Members Estimate Committee, Session 2009-10 (HC 348)

Mr Andrew Mackay and Ms Julie Kirkbride 85

The Review also states that you were paid £9,950 for cleaning over the 4 years April 2004 to April 2008, thus exceeding the maximum of £2,000 per annum set by the Review by a total of £1,950.

You are therefore recommended to repay a total of £31,193.

In your Grounds of Appeal to me you emphasise the position of the Fees Office as a source of advice, especially where circumstances are unusual. It has, and throughout the relevant period has always had, authority to interpret and enforce the rules. Thus far I agree with you, but the conclusions which you seek to draw seem to me to be, in certain respects, mistaken. I accept that Members were and are entitled to rely on advice given by the Fees Office and its officials, but only if they have no reason to believe that it is wrong. If they do rely on such advice in good faith they cannot be said to have acted improperly even if, in the end, the advice tendered turns out to be mistaken. But all of this has nothing to do with the law of agency, or Estoppel. We are concerned here with admissible claims against public funds, and, as the Speaker wrote in his introduction to the Green Book (April 2005 edition), “Members themselves are responsible for ensuring that their use of allowances is above reproach”. You say that the way in which you and your wife designated your homes was in accordance with advice given by the Fees Office. If so it seems to me that the advice was plainly mistaken, and indeed that you should have recognised it to be mistaken.

As I have said in my letter to your wife, the fundamental reason why the arrangements which you made cannot be regarded as acceptable is that they lost sight of the purpose of ACA, which was to assist Members to fund the cost of accommodation when they needed a second home in order to fulfil their duties. It was never intended to relieve them of the costs of their main home, and you operated it in such a way as to achieve that result.

I agree that the basis of the overall approach adopted by the Review to calculate what you and your wife might reasonably have claimed on a shared second home is difficult to discern, but if anything it seems to me to be generous, and you do not contend otherwise. I therefore find no special reasons in your individual case showing that it would not be fair and equitable to require repayment of £29,243.

I turn to the costs of cleaning. I agree that the limit of £2,000 per annum was not in place when the costs were incurred, and that is unfortunate. But I am sure that you would agree that anyone considering what sum it would be reasonable to ask the public to pay towards the cost of cleaning a second home would have to draw a line somewhere. The Review has drawn it at £2,000 per annum for all Members. My Terms of Reference (a copy of which I enclose)137 only permit me to intervene if I can find special reasons in your individual case showing that it would not be fair and equitable to require repayment either at all, or at the level recommended. I can find no such reasons.

I would therefore dismiss both parts of your appeal.

17. Letter to the Commissioner from Rt Hon Andrew Mackay, 12 February 2010

Thank you for your response of 26th January raising some additional questions. As you will appreciate I have needed to devote time to the Legg recommendations and subsequent appeal which have now been published. I will therefore require a little more time to see if I can find any more relevant information to answer questions one and three. Meanwhile it might be helpful if I answered the remaining questions as follows:-

Two. The only dependent child living with us is our nine year old son [name] who attends school in London. He would normally move with his mother between [the London and Bromsgrove properties]. As mentioned in my initial response it is easy to commute between [the Bromsgrove property] and my constituency with the route being virtually all motorway or dual carriageway. The estimated figures I supplied to you show that I spend slightly more nights in [the Bromsgrove property] than [the London property]. There would be some Sunday nights and days in the September recess (when [our son] is back at school) that I remain in

137 Not reproduced here.

86 Mr Andrew Mackay and Ms Julie Kirkbride

[Bromsgrove] to attend to family commitments, mentioned in my previous reply, whilst my wife has returned to the London property with [our son].

Four. This is quite straightforward. As previously mentioned in my last reply I took advice about ACA arrangements from [the then Head of the Fees Office] soon after marrying Julie Kirkbride. However MPs were only required to inform the Fees Office they shared accommodation with another MP at a much later date. As I answered in my last response I could not believe this referred to married couples as it was self evident so I did not register the fact at that time.

Five. I have always claimed for the full mortgage interest on my second home.

I will revert back to you on the remaining two questions after I return from the half term recess.

12 February 2010

18. Letter to Rt Hon Andrew Mackay from the Commissioner, 15 February 2010

Thank you for your letter of 12 February responding to mine of 26 January about this complaint in respect of the identification of your main home for the purposes of your claims against the Additional Costs Allowance.

I was most grateful for this response to three of my follow-up questions. I hope I am right in taking it from your two letters that your pattern of overnight stays was substantially the same as your wife’s except for September each year, when you spent some Sunday nights and, as I understand it, Monday to Thursday nights inclusive in Bromsgrove while your wife and son were in London so that he could go back to school. Presumably Ms Kirkbride returned to the constituency with your son on Friday before returning again to London on Sunday. I take it that this arrangement continued for some three weeks in September/early October before the House returned. If I have misinterpreted this, please let me know.

I look forward to hearing from you after the recess about this and about the remaining two matters. Thank you for your help.

15 February 2010

19. Letter to the Commissioner from Rt Hon Andrew Mackay, 8 March 2010

Further to your response of 15th February what you surmise is nearly correct. However for the avoidance of any doubt let me confirm that my pattern of overnight stays is broadly the same as my wife's except for some Sunday nights periodically around the year and some nights during the September recess when I would be at [the Bromsgrove property] attending to matters relating to my aforementioned elderly relatives whilst my wife is in London as our little boy is attending school. I would just add that from time to time I might be away on golfing trips when more often than not my wife and son would remain at the London property.

Turning to Question Three in your letter of 26th January let me refer you back to the second and third paragraph of my letter to you dated 21st January. Julie was first elected in May 1997 and we were married on 1st August that year. We purchased [the Bromsgrove property] that September so my best estimate of the date of my meeting with [the then Head of the Fees Office] would be around that time. I clearly recall him concluding that meeting by stating he would place this arrangement on file. It was not my experience that such matters were put in writing at that time. However at all times we declared our second and main home addresses to the Fees Office in a totally transparent way. This was never queried.

Finally in respect of Question One as previously mentioned these were best estimates for 2009 based on recent memory.

8 March 2010

Mr Andrew Mackay and Ms Julie Kirkbride 87

20. Letter to Director of Operations, Department of Resources, from the Commissioner, 10 March 2010

I would welcome your advice and comments on a complaint I have received against the Rt Hon Andrew Mackay MP in respect of the identification of his main home for the purpose of his claims against his Additional Costs Allowance.

I attach a copy of the relevant parts of the letters of 23 and 30 October from the complainant, together with the relevant press cuttings which he included. I enclose also a copy of the Registrar’s letter of 28 October to which the complainant refers. I attach a copy of Mr Mackay’s response of 21 January (which was delayed after Mr Mackay had raised with me his concerns about double jeopardy with Sir Thomas Legg’s audit) my response of 26 January; his reply of 12 February; my letter to Mr Mackay of 15 February; and his response of 8 March.

In essence, the complaint is that Mr Mackay wrongly identified his main home for the purposes of claims against his Additional Costs Allowance, contrary to the rules of the House. I have taken the period of the complaint to cover the financial years from 2004–05 to 2008–09 inclusive.

I would welcome your comments and advice on this matter. In particular, it would be helpful if you could advise me on the discussion which Mr Mackay reports he had with the then Head of the Fees Office in September 1997: it would be helpful to have any written records relating to Mr Mackay’s discussions of his and his wife’s circumstances at that time. It would also be helpful to know whether the Department at any other time gave any consideration to the arrangements under which Mr Mackay claimed for his second home in London, taking account of the claims which Ms Julie Kirkbride MP was making for her second home in her constituency.

Finally, I would welcome your views on whether, in all the circumstances, you consider that Mr Mackay was within the rules in claiming second home allowance for his London home. Any other points you may wish to make to help me with this inquiry would, of course, be very welcome.

I would be very grateful if it were possible to let me have a response to this letter within the next three weeks. Thank you for your help.

10 March 2010

21. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 17 March 2010

Thank you for your letter to [the Director of Operations] of 10 March. I am replying on behalf of the Department of Resources.

I am afraid that we have not been able to discover any records which would cast light on Mr Mackay's discussions with the then head of the Fees Office in 1997 (that official retired in 1998). Nor do we have any records which indicate that any later consideration was given within the Department to the elections which Mr Mackay and Ms Kirkbride made as to their main and additional homes.

The Department was certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangements.

Mr Mackay's arrangements were subject to a story in the Telegraph in May 2009, but no action was then taken by the Department because of the impending review conducted by Sir Thomas Legg.

As you know, Sir Thomas concluded that Mr Mackay and Ms Kirkbride had obtained a financial benefit unintended under the Green Book rules and therefore had acted contrary to the principles governing it. Sir Thomas's conclusion was subject to an appeal to Sir Paul Kennedy. Sir Paul's conclusion was that, if the advice given by the Fees Office was as Mr Mackay suggests, then that advice “was plainly mistaken” and that Mr Mackay should have recognised it as mistaken. Sir Paul also suggests that Mr Mackay's arrangements had lost sight of the purpose of ACA.

88 Mr Andrew Mackay and Ms Julie Kirkbride

I have no reason to dissent from Sir Thomas’s and Sir Paul’s conclusions that Mr Mackay was not within the rules in claiming second home allowance for his London home. I regret that the original advice of the Department, and its subsequent inaction, may have given Mr Mackay comfort in his claims.

17 March 2010

22. Letter to Rt Hon Andrew Mackay from the Commissioner, 24 March 2010

I last wrote to you on 10 March about this complaint to let you know that I was consulting the Department of Resources on the basis of the information you have given me.

I have now heard back from the Department. I enclose a copy of my letter of 10 March to the Department, and a copy of their response of 17 March.

As you will see, the Department has no record of the discussions you report you had with the then Head of the Fees Office in 1997. They conclude that they have no reason to dissent from the conclusions that Sir Thomas Legg and Sir Paul Kennedy came to that you were not within the rules in claiming second home allowance for your London home.

I attach the conclusions from Sir Thomas Legg’s review and Sir Paul Kennedy’s determination of your appeal.138 As you know, Sir Thomas Legg said that the arrangements that you had with your wife meant that you obtained a financial benefit for both of you which appeared unintended under the Green Book rules, “and as such contrary to the principles governing it.” Sir Paul Kennedy concluded that you and your wife “lost sight of the purpose of ACA, which was to assist Members to fund the cost of accommodation when they needed a second home in order to fulfil their duties. It was never intended to relieve them of the costs of their main home.” Sir Paul Kennedy concluded that “you operated it in such a way as to achieve that result.”

I would welcome your comments on the Department of Resources’ letter and their conclusion that they have no reason to dissent from the findings of Sir Thomas Legg and Sir Paul Kennedy in relation to whether your claims for your London home were within the rules of the House from April 2004 to March 2009.

I appreciate that we are now coming near to the Dissolution of Parliament, but it would be very helpful if you could let me have a response to this either before Dissolution or as soon as Parliament is re-established. I will wish to continue with this inquiry, with your cooperation, through the new Parliament and hope to bring it to a conclusion before too long.

Thank you again for your help.

24 March 2010

23. Letter to the Commissioner from Rt Hon Andrew Mackay, 25 March 2010

I write to acknowledge receipt of your letter of the 24th March with its enclosures. I can only conclude that this correspondence now takes us back to square one and is proof of my original point that I am facing triple jeopardy on an issue that has already been adjudicated twice by Sir Thomas Legg and Sir Paul Kennedy.

I will for the record state that I do not agree with their findings, but have, along with my wife, repaid £58,486 as we were requested to do following their interpretation of the rules.

I read with interest [the Director of Strategic Projects’] response to your inquiries which, whilst accepting the outcome of the official House of Commons inquiry, nevertheless appeared sympathetic to my case. [The Director] acknowledges that we were given this advice by his Department, that our declarations were made

138 WE 15, WE 16

Mr Andrew Mackay and Ms Julie Kirkbride 89

openly, that it was reasonable for me to think that the Department had no difficulty with the arrangement and that their inaction gave me comfort in making the claims.

I would therefore assume that you will deem this matter concluded.

25 March 2010

24. Letter to Rt Hon Andrew Mackay from the Commissioner, 29 March 2010

Thank you for your letter of 25 March responding to mine of 24 March with the advice from the Department of Resources.

I was most grateful for this prompt response. To resolve the complaint against you, the issue I have to decide is whether you were in breach of the rules of the House in the identification of the property near Bromsgrove as your main home. If I were to submit the matter to the Committee on Standards and Privileges, it would need to decide whether it accepts my conclusions and, if so, what, if any, action to take. The consideration of complaints and the consideration of what, if any, penalty is appropriate for a Member who has breached the rules are solely matters for the complaints process. They cannot be resolved by the audit of Members’ expenses.

I have taken it from your letter that you do not accept that you were in breach of the rules of the House in identifying the Bromsgrove property as your main home and, therefore, making claims on your London property. While I have so far considered separately the complaint against you and the complaint against your wife, Ms Julie Kirkbride MP, I believe it will be necessary for me to come to a view on the propriety of the identification of your main home before I can come to a conclusion on the complaint against Ms Julie Kirkbride. This is because, if I were to find that the property in her constituency was indeed your main home, then I would need to consider whether she was acting within the rules in claiming for the mortgage interest on the additional mortgage taken out in order to build an extension to that home.

I will, therefore, need to explore with you why, despite the findings of the audit and the outcome of the appeal against the decisions from that audit, you consider that the identification of your main home was within the rules of the House. I think that this may best be achieved by our meeting so that I can take oral evidence from you on this matter. I am, therefore, asking my office to get in touch with yours to arrange a suitable date. I will write to you in advance of our meeting to let you know a little more about the procedure for such an interview and the main areas I suggest we cover. I look forward to meeting you to take your views on these matters.

29 March 2010

25. Summary of Rt Hon Andrew Mackay’s ACA/PAAE claims, 2004–05 to 2008–09 (figures from the Department of Resources)

Year Mortgage interest (£) Other items (£) Total (£) 2004–05 9,324 9,696 19,020 2005–06 9,565 11,980 21,545 2006–07 10,434 11,638 22,072 2007–08 11,938 10,607 22,545 2008–09 8,824 14,715 23,539

Department of Resources 3 June 2010

26. Agreed Note of Interview with Rt Hon Andrew Mackay, 9 June 2010 Present:

90 Mr Andrew Mackay and Ms Julie Kirkbride

Rt Hon Andrew Mackay (AM)

John Lyon, Parliamentary Commissioner for Standards (JL)

Note-taker

Introduction

JL Thank you for coming in. This is the note-taker. She will take a note of our discussion and show it to you afterwards so that you can be satisfied as to its accuracy. It will not be a verbatim note, but it will be reasonably full.

The note will be included in the memorandum I propose to submit to the Committee on the complaint, and you can expect it to be published with the Committee’s Report.

I wrote to you on 2 June to set out the procedures and to give you the main areas I wanted us to cover.

Are you content for me to go ahead?

AM Absolutely.

Factual background

JL May I first summarise the facts? You bought your property in Bromsgrove in September 1997 and your current London property about a year later.

AM That is correct. But it might have been 1999 rather than 1998.

JL I will ask you about that in a minute.

You bought both properties jointly with your wife, Ms Kirkbride, and you have a joint mortgage on each property.

AM Yes.

JL Around September 1997 you designated your Bromsgrove property as your main home and began to claim against the ACA for your London home.

AM Yes.

JL At the same time, your wife designated your London property as her main home, and began to claim against the ACA for your Bromsgrove home.

AM Yes.

JL In the five years from 2004–05 to 2008–09, you claimed at or near the maximum of your ACA allowance for your London home.

AM Roughly yes. You have the figures.

JL Since April 2009, you ceased claiming ACA on your London property and claimed instead the London Costs Allowance.

AM Yes, for the reasons I have previously outlined.

JL Is that a reasonable summary of the key facts?

AM Absolutely. There is no dispute there.

Mr Andrew Mackay and Ms Julie Kirkbride 91

Ownership arrangements

JL You raised the question of the dates when you took on your London property. Information from the Land Registry suggests that you bought it in September 1999. Is that correct?

AM I would agree with that. I have had to compile the information for you without records. But I can remember that we bought the property well after we married but before the millennium.

JL So did you have another London home earlier?

AM Yes. I claimed ACA on that and then things just transferred to the other property.

JL And can you confirm that the additional mortgage for the extension in Bromsgrove was a joint mortgage?

AM Yes. It was not a new mortgage but an extension to the mortgage. It was not taken out to meet the full cost of the extension to the flat, but a proportion of it. My wife has explained to you how she approached a senior official in the Fees Office about the extension.

Use of the properties

JL May I ask you about the use of the two properties? Your evidence is that your pattern of overnight stays in Bromsgrove was “broadly the same” as your wife’s, except for some Sunday nights during the year and some other nights during the September recess.

AM That is correct. Normally in September when there was a recess and our son was back at school my wife would be in London with him. I would perhaps be there too or perhaps attending to the family duties relating to my two elderly relatives.

Normally we had joint holidays. Each of us might have gone on parliamentary delegations, but these would approximately cancel each other out.

JL In effect, you estimate that you spent, and I quote, “slightly more” nights in Bromsgrove than in your London property. For 2009, you estimate 16 more nights a year in Bromsgrove than in London.

AM Yes, approximately.

JL Can you confirm that this balance of nights between London and Bromsgrove was a consistent pattern from 2004–05 to 2008–09?

AM Yes, there wasn’t a different pattern, although it wasn’t exactly the same in each year.

JL How did you get to these figures?

AM I tried to work through my current diary. I don’t have past diaries. But I could say roughly when I was on holiday in past years.

JL Do you accept that the difference in the number of overnights you spent in each property was marginal? Put it another way, if your estimate was wrong by only nine nights a year—that’s just over one night’s difference in every six weeks—you would have been spending more nights in London? Do you accept that?

AM That is an approximation I have given you.

I am not sure that my definition of marginal is the same as yours. But I never set out to suggest

92 Mr Andrew Mackay and Ms Julie Kirkbride

that I stayed massively more in one place than in the other.

JL Can I now ask you about your London home? Do you accept that it is larger and more substantial—and considerably more valuable—than your Bromsgrove property?

AM A London property is always going to be more valuable. Our London home is a town house with three and a half bedrooms, three reception rooms and two bathrooms. Our constituency home is in a listed building in which we have the largest apartment. We have two reception rooms and three bedrooms, including the extra one, and two bathrooms. They are about the same square footage but the valuation will be higher for the London home because central London prices are higher than North Worcestershire prices.

JL Your son goes to school in London. Is that right?

AM Yes.

JL Would I be right in assuming that London is where your wife spent more nights than in Bromsgrove, since she designated London as her main home?

AM Yes. When our son is at school she is always with him. I am normally with him and I like to be with him but there are times when I cannot be, for example in the month of September.

JL Given that your wife saw London as her main home, the nature of the property, the proportion of the nights you spent there, and your son’s commitments at school there, can you help me on why you nevertheless thought it right to designate Bromsgrove as your main home, in effect away from your family’s main base?

AM It was based on the number of nights I spent there, which was the principal reason; and also on the advice given by the then Head of the Fees Office when I went to see him. Also, unlike my wife, I was born in Birmingham and brought up in the Midlands.

JL I note that you received London Costs Allowance in April 2009. Did you continue to designate Bromsgrove as your main home for your travel claims?

AM No. I have only ever claimed for travel between Parliament and my constituency. I have never claimed travel to and from my main home. I felt it would be an unreasonable burden on the taxpayer.

April 2009 was my first opportunity to change when the new rules came in. The London Costs Allowance increased to £7,500 (taxable). That was sufficient to cover my mortgage and other costs. There was a campaign in the local and regional press against Members within commuting distance of London receiving the second home allowance so I elected to swap over.

JL I understand from media reports139 that your Bromsgrove flat is on the rental market. Is that true, and do you plan to continue to live in Bromsgrove?

AM Yes, it is on the market, although without any real interest in it. I don’t know whether we will continue to live in Bromsgrove. We have now both accepted private sector jobs within a short distance of our London home, and we will have to decide whether to retain our home in Bromsgrove. No decision has been taken.

JL How will you manage your responsibilities for your elderly relatives if you no longer have a base in Bromsgrove?

AM Those responsibilities are now slightly different. I don’t have the same need to be in Bromsgrove

139 Not included in the written evidence.

Mr Andrew Mackay and Ms Julie Kirkbride 93

as I did eighteen months ago. The property portfolio is now in the hands of a firm of chartered surveyors and one of my elderly relatives is now in residential care most of the time. I drive up to see them and back, which is difficult but do-able.

Fees Office

JL Let me ask you about your contacts with the Fees Office. Your evidence is that you discussed your arrangements with the then Head of the Fees Office in about September 1997. That person retired in 1998 and I have not thought it necessary to consult him separately about this matter. The Department have no record of a note on the file from him at the time. Did your wife come with you to the meeting?

AM No, I went. She was a new MP just arrived in the House. I went to see the Head of the Fees Office. I explained that my circumstances had changed, I was now married to an MP and I had no idea what to do with my second home allowance. I described the properties as I have described them to you, although there was one less bedroom in Bromsgrove then.

The Head of the Fees Office said it was straightforward and he told us what to put in place. That is what happened ever since.

JL Did you think it was straightforward?

AM My wife and I were completely transparent. We did not feel we were doing anything wrong. We always filled in our forms correctly. That was why it was a very great shock when it was suddenly suggested that our arrangements were wrong.

I had no idea what arrangements I should have. I asked the Head of the Fees Office and the idea was entirely his. I have a very clear memory of the meeting. As far as I was concerned he put a note on the file.

The Director of Strategic Projects has confirmed to you that the Fees Office had not questioned our arrangements, which gave us comfort.

JL Were you aware at the time that your wife would be claiming for the London property as her second home?

AM Yes. I went to see the Head of the Fees Office on behalf of us both. It was his suggestion that she should nominate one property and I should nominate the other.

JL Were you aware at the time or subsequently that, had you identified London as your main home, it would not have been possible for you to have claimed ACA for your Bromsgrove property?

AM I never thought about it. I went and saw the person in charge at the very top. I had had a number of contacts with him over the years. I asked him what I should do and I did it.

As far as I was concerned I was doing everything transparently and correctly. If anything I had always erred on the cautious side. At one point I was on the Committee on Standards and Privileges. I was always meticulous about ensuring everything was in place correctly and done transparently.

JL Did the Head of the Fees Office tell you that you couldn’t claim for your Bromsgrove property if you nominated your London property as your main home?

AM No. He asked questions such as did I have somewhere in my own constituency, about the size of the properties and then said “This is what you should do.”

94 Mr Andrew Mackay and Ms Julie Kirkbride

JL Do you agree with Sir Paul Kennedy that if such was the advice you were given, it was “plainly mistaken”?140

AM No. With respect it is easy to be wise after the event.

JL Why do you not agree?

AM I went to people to get advice, to the Head of the Fees Office. That advice was perfectly reasonable. We were both separate MPs and we were the only MP couple who did not have coterminous constituencies.

JL But that doesn’t mean that the advice couldn’t be wrong.

AM No, but I didn’t think so then and I don’t think so now.

JL You are quoted in the Guardian on 14 May 2009 as saying, “Looking back now, it does look strange”. Is that an accurate quotation?141

AM I don’t recall saying that.

But on the day when I resigned as adviser to David Cameron I was in the middle of a media scrum. If the Guardian say I said it, I accept that I did. There was a complete melee.

JL Do you still think that it looks “strange”?

AM It is not a bad word—better than the other descriptions.

But as I have said we were the only MP couple without coterminous constituencies.

JL But the arrangements ended up with neither of you paying for your main homes. Why did you not think that strange at the time?

AM I don’t accept that.

I could have been married to a head of a company or a head teacher whose house was paid for separately, and I could still have claimed for my second home.142

JL Do you accept that, whatever advice you may have been given, it was your personal responsibility to act within the rules of the House?

AM Yes. As a Member of Parliament, every claim is your responsibility.

JL Do you accept your responsibility for this, and do you think the advice you took was correct advice?

AM MPs are busy people. That is why I took advice.

JL Did any warning bells jangle when you decided on this arrangement?

AM No bells jangled, and that is why what happened on 14 May was so horrendous.

140 WE 16 141 See WE 2 142 Later on 9 June Mr Mackay e-mailed me to say “It occurs to me you may wish to consider press reports stating that senior Ministers claimed ACA whilst also living in "grace and favour" accommodation entirely funded by the taxpayer. It appears that in some cases there was "flipping" and in others the "third" home was sold. As a consequence in each case the taxpayer was funding both homes.”

Mr Andrew Mackay and Ms Julie Kirkbride 95

The rules

JL Can I now apply the Green Book rules to your situation? From June 2003 to March 2009, the Green Book said that a Member’s main home will normally be a matter of fact. What do you say to the suggestion that as a matter of fact Bromsgrove was not your main home: London was your main home? It was your wife’s main home, where your son went to school, it is by far the more valuable and substantial property, where you spent only slightly fewer nights than you estimate you did in Bromsgrove?

AM I don’t accept that the London home was a more substantial property. Its square footage was probably smaller, and you can’t go on the valuation as many MPs will have London flats which are worth more than their properties elsewhere in the UK. Both are substantial homes and all three of us spent a lot of time in both.

I spent slightly more time in Bromsgrove because I had the additional responsibilities to my two relatives and the property portfolio which I oversaw.

JL The rules also say that where a Member has more than one home, their main home is normally where they spend more nights than any other. Do you accept that this rule did allow for exceptions, and that it was open to you, under the rules as they were from 2003 to 2009, to designate your London property as your main home, despite spending slightly fewer nights there?

AM It is up to others to interpret the rules. I didn’t think about it one way or the other.

JL But the Green Book says “normally”. Do you accept that that left it open to you to do something different?

I thought that the Head of the Fees Office said that you had a choice?

AM No, he made a recommendation. We abided by that.

JL And when the rules were clarified in 2003?

AM I checked. I worked out in my head the number of nights I spent there normally and asked did that add up. I thought that seemed fine. I would have paid no attention to the “get out clause”.

JL Even though the difference in your pattern of overnight stays was “slight,” to use your word, did it go through your mind that you could identify your main home differently, but you would not then be able to claim for your Bromsgrove property?

AM No. The idea that Members spend ages thinking about these arrangements is wrong.

JL Why do you consider that you acted within both the letter and spirit of the rules?

AM As I have explained, it was my main home, I took advice from the Fees Office and I felt it was all straightforward.

JL Do you still feel it was straightforward?

AM Our circumstances were unusual. We were the only married MP couple without coterminous seats. We were an “odd couple”.

JL Why did it follow that it was right to designate different main homes if you didn’t have coterminous seats, but it would not have been right for Members with coterminous seats?

AM If you had coterminous seats you would have one home straddling the two constituencies and

96 Mr Andrew Mackay and Ms Julie Kirkbride

one in London.

JL But the principal reason for your designation was that you spent more nights in one place. Could that not have been the case for MPs with coterminous constituencies, allowing them too to claim on both homes?

AM Maybe.

JL You are reported in the Guardian of 14 May 2009 to have said, “I have clearly made an error of judgement for which I profusely apologise.” If that is an accurate quote, what did you mean by it?

AM I don’t recall.

I did seven separate live interviews on that day. I had a mass of journalists around me and I was asked lots and lots of things.

JL So, looking back, do you feel there was an error of judgement?

AM Looking back, I don’t. There was no moment when I sat down and thought that I had made an error. The letter from the Director of Strategic Projects is very powerful. We had every reason to have comfort.

JL Looking back now, do you think you made an error of judgement?

AM I had a busy parliamentary career. I was a pairing whip, chief whip, a senior political and parliamentary adviser; I had a large and vibrant constituency and two families to look after. Did I have time to sit down and consider this and was it reasonable to have done so? Was it something I should have thought about?

All my training was to seek advice on what to do from the person at the top. That is what I did.

JL All of these things could be seen as extenuating circumstances. But do you accept that it doesn’t mean that it was the right advice or the right decision?

AM MPs including myself are very busy. They don’t sit around and consider these decisions.

JL Do you now consider that you made a wrong decision?

AM I didn’t manufacture a mortgage and claim for that; I didn’t claim for a house a hundred miles away and pretend to be ill.

I kept my expenses in good order in every possible respect. Sir Thomas Legg found nothing wrong except this. I made sure I claimed the correct amounts for council tax and that I submitted receipts.

JL Looking back do you believe you should have done anything differently?

AM I believed I was acting correctly.

JL Do you still believe that?

AM I do.

JL What would you say to the argument that the Green Book rules could not have intended a Member to be relieved of the cost of their main home?

AM The Green Book is silent on that as on many other points. Would it have been wrong for me to have claimed for a second home if I had been married to someone whose home was supplied by a wealthy relative or someone she worked for?

Mr Andrew Mackay and Ms Julie Kirkbride 97

JL Do you draw a distinction between that case and the claims you made?

AM No.

JL But is not this money all coming from parliamentary resources? In effect, the taxpayer funded both homes?

AM I don’t agree.143

JL Do you not accept that the taxpayer funded both your houses?

AM In our case, the taxpayer has assisted with the funding, with the mortgage interest. The taxpayer has not funded them.

JL Do you think that is acceptable?

AM I do. That is my distinction. And there will be other people who are not paying for their homes themselves.

JL The rules also say that Members’ claims should be above reproach. Do you believe that your claims were above reproach?

AM I do.

JL The Code of Conduct requires that Members should maintain and strengthen the public’s trust and confidence in the integrity of Parliament and never undertake any action which would bring the House of Commons or its Members generally into disrepute. Do you believe that your actions have had this effect?

AM I believe that the Telegraph’s expenses coverage has had that effect.

We have paid a very high price for what some people think is an error of judgement, both in career terms and in the substantial sum of money we repaid. In my wife’s case the appeal to Sir Paul Kennedy was rightly granted, but we still repaid the best part of £60,000. I don’t believe it was right. But I believe in the rule of law. I always said I would repay what I was asked to even if I didn’t believe I had done anything wrong.

We have been under double, now triple jeopardy. If this goes to a report to the Committee, I would like you to include in the evidence our correspondence on this.

JL I will certainly take account of that request.

The claims you made with your wife avoided either of you paying for a main home. They enabled you to have an additional bedroom added to what you considered to be your main home on the basis of your wife’s ACA claims. Why do you consider that your actions here were above reproach?

AM That is my wife’s case but I am happy to answer. She took advice from the most senior adviser in the Fees Office. It was quite clear that it was allowed to extend the property to allow a child to have his own bedroom after a certain age. We increased the mortgage to do this but there were greater costs that we incurred.

Sir Paul did not uphold Sir Thomas Legg’s views on this.

143 See previous footnote.

98 Mr Andrew Mackay and Ms Julie Kirkbride

JL Did you think, “This is my main home. Why am I building an extension with parliamentary resources?” Did it worry you that you were making substantial improvements to your main home?

AM It was entirely within the rules, it was clear that it was allowed to build an extension for this purpose. We had no reason to think of that.

JL Thank you. Is there anything further you would like to add?

AM Only to ask you to include in the report the correspondence about our disagreement in respect of the triple jeopardy which followed your decision to accept this complaint.

Conclusion

JL Thank you. I will certainly be considering the inclusion of that correspondence in my memorandum.

The note-taker will now prepare a note of our discussion and show it to you so you can confirm its accuracy.

I am minded to prepare a memorandum for the Committee. You should draw no inference from that. It will also deal with the complaint against your wife. The note of this discussion will be subsequently published with the report.

Once I have the note of the meeting, I shall prepare the factual sections of my memorandum, which again I would show you to check their accuracy.

I will then add my conclusions and submit the full memorandum to the Committee. The Clerk will show you it and invite any comments you want to make about it. Any such comments will be submitted to the Committee with my memorandum, and published.

Do you have any further questions?

AM No. I am familiar with the basic procedure, although a little out of date.

JL Thank you for coming in.

The interview concluded at 11am.

9 June 2010

27. E-mail from Rt Hon Andrew Mackay to the Commissioner, 9 June 2010

I appreciated the opportunity to further answer your queries at today's meeting.

You will recall you questioned the legitimacy of a Member claiming financial support from the taxpayer for both his homes. It occurs to me you may wish to consider press reports stating that senior Ministers claimed ACA whilst also living in “grace and favour” accommodation entirely funded by the taxpayer. It appears that in some cases there was “flipping” and in others the “third” home was sold. As a consequence in each case the taxpayer was funding both homes.

9 June 2010

Mr Andrew Mackay and Ms Julie Kirkbride 99

28. Letter to Rt Hon Andrew Mackay from the Commissioner, 10 June 2010

Thank you for coming to our interview meeting on 9 June. I was most grateful for your help with this inquiry. The note-taker will be sending you the draft note of the meeting as agreed.

I said when we met that I had not taken evidence from the then Head of the Fees Office since I did not consider that necessary. Having reviewed your oral evidence, however, and noted the emphasis which you have put on your discussion with him, I have concluded that I ought to put the points you made to me to the then Head of the Fees Office to see if he is able to confirm your recollection of the discussion.

I will show you his response when I receive it.

There was one further matter which also arose from your evidence. You confirmed that you moved to your current Westminster home in September 1999. That was some two years after your discussion with the Fees Office in September 1997. Your evidence is that during that meeting you described the accommodation in your current London home. That would have clearly not have been possible. Could you confirm that in fact you described the accommodation in your previous London home, and can you let me know what that accommodation was?

If you could let me have a response to this within the next two weeks, that would be most helpful.

10 June 2010

29. Letter to former Head of the Fees Office from the Commissioner, 10 June 2010

I would be very grateful for any help you can give me in providing your recollection of a meeting which you reportedly held with the Rt Hon Andrew Mackay in about September 1997 when Mr Mackay was the Member for Bracknell.

I need to ask for your help on this in the course of an inquiry I am conducting into a complaint against Mr Mackay. I enclose a note which sets out the procedure I follow in taking evidence from witnesses. As you will know, my inquiries are subject to parliamentary privilege and I ask, therefore, that you do not disclose this letter or your response to anyone else. I expect to show your response to Mr Mackay in the course of this inquiry and you can expect it to be published with the other evidence I have collected and with the memorandum which I may submit to the Committee on Standards and Privileges.

In essence, the complaint which I am inquiring into is that Mr Mackay wrongly identified his main home for the purpose of his claims against his Additional Costs Allowance, contrary to the rules of the House.

Mr Mackay’s evidence to me is as follows:

1. He had a meeting with you shortly after he married Ms Julie Kirkbride, who was then the Member of Parliament for Bromsgrove. He dates this meeting in about September 1997. He reports that he asked you for advice. He explained that his circumstances had changed; he was now married to an MP; and he had no idea about what to do with his second home allowance. Mr Mackay recalls that you asked if he had a property in his own constituency, and about the size of their properties. He told you that they jointly owned a family home in Westminster and that they had an apartment in a listed building in his wife’s constituency. He described the accommodation each offered. Mr Mackay explained that he had never had a home in his constituency [Bracknell]. Mr Mackay says that you then advised that as the couple had two “proper” homes with a joint mortgage and where they were both on the electoral roll, either could be deemed a main home.

2. Mr Mackay’s clear recollection is that you then recommended that Mr Mackay should nominate the home in his wife’s constituency [address] as Mr Mackay’s main home and claim ACA on his Westminster property. Mr Mackay believes that this arrangement was put on the file in the Fees Office, but the Department’s evidence is that there is no current record of that.

100 Mr Andrew Mackay and Ms Julie Kirkbride

3. Mr Mackay’s evidence is that Ms Kirkbride was not present at this meeting. He says that nevertheless, you advised that Ms Kirkbride should nominate the couple’s Westminster property as her main home and so claim ACA on her constituency property [address], which was to be his own main home.

4. Mr Mackay’s evidence is that at all times he and his wife declared their main and second homes to the Fees Office in a totally transparent way.

The effect of this arrangement was that the Members were able to claim against parliamentary allowances for both of their homes.

I appreciate that this is now quite a long time ago and you will have had many meetings with Members at that time. But in view of the emphasis that Mr Mackay has put on his meeting with you and the advice you reportedly gave, it would be very helpful if you could confirm or otherwise modify Mr Mackay’s recollection of the meeting, as recorded above.

It would be very helpful if you could let me have a response to this letter within the next two weeks. If you would like a word about any of this, please contact me or my office at the House. I would be most grateful for your assistance on this matter.

10 June 2010

30. Agreed Note of evidence from former Head of Fees Office, 17 June 2010

I am responding to the letter of 10 June 2010 from the Parliamentary Commissioner for Standards.

Regarding Mr Mackay’s evidence to you, I shall comment thereon on the points listed seriatim.

1. I can confirm that Mr Mackay sought my advice concerning his changed circumstances after his marriage to Ms Kirkbride in August 1997. Our meeting could have been early in September because I was out of the country from 15 September to 10 October, but I have no diary reference for Mr Mackay for 1997.

I do, however, recall advising him as to requirements for claiming ACA were dependent on which home was deemed to be the main home. Where a Member had more than one home, this is entirely based on the facts as to the nights spent in one home more than another, and then claiming for the other home on expenses incurred “wholly, exclusively and necessarily” on overnight stays away from the main home i.e. de facto.

Mr Mackay had always deemed his main home as London (Westminster) and could therefore claim for expenditure incurred in his constituency (Bracknell). The reference to being on the electoral roll would normally determine the main home designation.

2. I do not recall Mr Mackay informing me that he should nominate the home in his wife’s constituency because I do not believe that they had set up their home in [Bromsgrove] that early in their marriage. Therefore I could not have advised him to claim Additional Costs Allowance for London (Westminster).

3. Ms Kirkbride was not present at any meeting I had with Mr Mackay.

I interviewed Ms Kirkbride on the morning of 2 June 1997 after her becoming an MP at the General Election of 1 May 1997. Ms Kirkbride informed me that she would be marrying Mr Andrew Mackay in early August 1997. I emphasized, particularly, the requirements for the Additional Costs Allowance and if her home was to be in London then she could claim for expenditure incurred in her constituency (Bromsgrove). I recall highlighting the requirements of defining exactly what was to be the main home. I do not recall Ms Kirkbride even mentioning [the Bromsgrove property].

4. Mr Mackay asserts that he and Ms Kirkbride declared their main and second home to the Fees Office in a totally transparent way.

Mr Andrew Mackay and Ms Julie Kirkbride 101

I am in no position now to say whether or not that happened as I retired from the House of Commons Fees Office on 31 October 1998.

I know that Ms Kirkbride’s induction interview paper was filed in her personal file signed by me on 2 June 1997.

I also know that it was my habit to insert notes in Members’ personal files whenever I had had meetings with Members, either in my office in 3 Dean’s Yard, in their own offices, or anywhere in the House, or had advised them during a telephone conversation as to whether or not a Member could change recorded information on any allowance he or she was claiming.

Unfortunately Members’ files were destroyed during the move from [one office to another] on the orders of the Director of Finance and Administration so my assertions cannot be confirmed.

May I suggest that references to Members’ changes of addresses should be held somewhere in Members’ records as Members are duty bound to inform the Resources Department—in the absence of the Fees Office since 2006—of any changes.

My feeling is that some time, perhaps as early as 1998, Mr. and Mrs Mackay set up homes in both Westminster and [Bromsgrove] (in Ms Kirkbride’s constituency). Either then, or indeed subsequently, their main homes may well have changed, but nonetheless, requirements for Additional Costs Allowance would need to be correctly stated: that is wherever they spent most nights, either in London or Bromsgrove. (Mr Mackay stated that it was indeed his main residence in this decade.)

I cannot imagine that they would have different main homes and so Ms Kirkbride’s main home would also be [the Bromsgrove property] in her constituency, hence both would be entitled to claim for Additional Costs Allowance but for London, not each home separately.

As you can see from my above comments, my recollection of advice given to Mr Mackay, and Ms Kirkbride for that matter, does not concur with Mr Mackay’s as stated in his evidence to you, referred to in your letter to me of 10 June 2010.

May I just add that when the debacle of Members’ expenses broke last year, Mr Mackay rang me at home at 9.15am on the very day he gave an interview to the television (Sky I believe). He wanted me to provide authority (retrospectively) stating that I personally as Accountant (Head of the Fees Office) had advised him on his Parliamentary allowances and that I had agreed with all his actions as being within the rules. I advised him that I was unable to do so and that I had retired in October 1998.

I hope that I haven’t been too long but I have written fully of my memory of events of 1997 and 1998 in the light of the General Election of 1997. If you do need any more information please do not hesitate to contact me.

Signed 18 June 2010

31. Extract from e-mail to the Commissioner from Rt Hon Andrew Mackay, 17 June 2010

...

... let me confirm that my previous London home from the time of my meeting with [the then Head of the Fees Office] was [address]. This was also a townhouse with three bedrooms, two bathrooms and two reception rooms...

17 June 2010

102 Mr Andrew Mackay and Ms Julie Kirkbride

32. Letter to Rt Hon Andrew Mackay from the Commissioner, 23 June 2010

When I wrote to you on 10 June, I said that in the light of what you had said at our interview on 9 June, I was writing to the official who was head of the Fees Office in 1997 to check with him your recollection of your discussion with him in September 1997.

I enclose a copy of my letter of 10 June to the then Head of the Fees Office (who as you know retired in 1998) and a copy of his signed response of 18 June.

As you will see, his recollection of the advice he gave you and Ms Kirkbride does not concur with your evidence to me, as it was set out in my letter of the then head of the Fees Office of 10 June.

The witness has said that he could not have advised you to claim ACA for your London home because, at that stage, he believed you had not yet set up your home in Bromsgrove. And he says that he “cannot imagine” you and your wife would have had different main homes.

I would welcome your comments on this conflicting evidence. It would be helpful also to know when you started to live in your Bromsgrove property and whether, as the then Head of the Fees Office suggests, that was not until 1998.

Finally, you will see the reference in his evidence to a telephone call in early May 2009 in which the then Head of the Fees Office says you asked him to provide “authority (retrospectively)” to a statement that he had advised you on your parliamentary allowances and that you had agreed with all his actions having been within the rules. The then Head of the Fees Office says that he advised you that he was unable to do this. I would be grateful if you could let me have your recollection of the conversation. Could you also confirm the date when it took place? And could you let me know why you have not previously mentioned this telephone call and the response of the then Head of the Fees Office which would appear to be relevant to your evidence that you and your wife acted solely on the recommendations of that official?

If you could let me have a response to this letter within the next two weeks, I would be most grateful. I may need then to consult further the then Head of the Fees Office. Thank you for your continued help with this.

22 June 2010

33. E-mail to the Commissioner from Rt Hon Andrew Mackay, 6 July 2010

Thank you for your letter of 23 June enclosing your correspondence with [the former Head of the Fees Office].

Let me first deal with my telephone conversation with [the former Head of the Fees Office] which took place early on the morning in May 2009 when I resigned as Senior Political and Parliamentary Adviser to the Leader of the Opposition and ahead of a series of media interviews. I rang him not to obtain “authority (retrospectively)” but to have him confirm my very clear recollection of our conversation in September 1997. He told me that following evidence he had provided in other cases involving Members and the Parliamentary Commissioner he had been told by the “House Authorities” not to speak to Members. He added that anyway as he dealt with so many Members he could no longer recall the details of our case but would have left instructions to be followed on file.

As this exchange did not throw any further light on my case it never occurred to me to mention it to you. Perhaps I should have done so as it does clearly illustrate how I rightly relied on advice from the then Head of the Fees Office.

Turning to [the former Head of the Fees Office’s] response to you I can confirm that we moved into [the Bromsgrove property] immediately on completion and lived there in some discomfort whilst refurbishment was carried out. I can again also confirm that throughout the period in question we were both on the electoral rolls in Bromsgrove and Westminster.

Mr Andrew Mackay and Ms Julie Kirkbride 103

Please let me know if you require any further information.

6 July 2010

34. Letter to Rt Hon Andrew Mackay from the Commissioner, 6 July 2010

Thank you for your e-mail of 6 July responding to my letter of 23 June with the correspondence from the former Head of the Fees Office.

I was grateful for this response. In view of what you say about the telephone conversation in May 2009, I will need to show your letter to the former Head of the Fees Office for any comments he may wish to make.

As you will know, I now have two different recollections of your meeting in September 1997. I will need to reflect on this in my memorandum to the Committee. I would be grateful to know, therefore, whether you wish to modify in any way your recollection of the discussion in the light of what the former Head of the Fees Office has told me. Once I have your response to this request, I will then write to him.

Could you also confirm that the completion date for your Bromsgrove property [address] was September 1997?

I look forward to hearing from you, I hope within the next week.

6 July 2010

35. E-mail to the Commissioner from Rt Hon Andrew Mackay, 13 July 2010

Thank you for your response of 6th July. We moved into [the Bromsgrove property] immediately on legal completion which as I recall was in September 1997 but this can be confirmed in the Land Registry records as I no longer have the paperwork.

I do not wish to modify in any way my clear recollection of the discussion in light of what [the former Head of the Fees Office] has told you. However I would comment that there is only one clear factual disagreement. In the telephone call of May 2009, I vigorously dispute that I asked for “retrospective” authority but instead asked him to confirm my very clear recollection of our conversation in September 1997.

I believe I have confirmed that [the official’s] recollection was mistaken in terms of when we purchased [the Bromsgrove property].

[The former Head of the Fees Office] states: “I cannot imagine that they would have different main homes”. Whilst this is contrary to his advice to me in September 1997, I do accept—as he said to me during our telephone conversation in May 2009—that after such a passage of time he could no longer recall the details of our case. It could well be that now after lurid press reports of our case this is the view he holds today.

Finally, in respect of the transparency issue, I refer to the evidence of the Director of Strategic Projects who informed you that “the Department were certainly aware of the arrangements in the sense that both Mr MacKay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr MacKay to have inferred from this that the Department had no difficulty with the arrangements”.

Please let me know if I can be of any further help.

13 July 2010

104 Mr Andrew Mackay and Ms Julie Kirkbride

36. Letter to the former Head of the Fees Office from the Commissioner, 14 July 2010

I am writing to show you the responses I have received from Rt Hon Andrew Mackay to the evidence which you provided on 18 June about a meeting with Mr Mackay in September 1997 and a telephone conversation with him in May 2009.

I enclose a copy of Mr Mackay’s e-mail to me of 6 July and an extract from his e-mail of 13 July. As you will see, he has not modified his recollection of your meeting in September 1997 in the light of your evidence. He has, however, made clear that he and his wife moved into the Bromsgrove property on completion (according to the Land Registry the sale date was September 1997) and lived there whilst refurbishment was carried out, rather than setting up home there sometime in 1998 as you suggested. He has also said that you told him in the telephone conversation of May 2009 that you could no longer recall the details of their case. He disputes that he asked you for “retrospective” authority but instead, asked you to confirm his “very clear” recollection of your conversation in September 1997. He said that the statement you made that “I cannot imagine that they would have different main homes” was contrary to the advice you gave him in September 1997, although it could well be the view you hold today.

I would be grateful to know whether you wish to comment on Mr Mackay’s response or in any way modify the evidence you gave me on 18 June. It would be very helpful if you could let me have any comments within the next two weeks. I will, of course, copy your response to Mr Mackay.

I would greatly appreciate your continued help on this matter.

14 July 2010

37. Letter to the Commissioner from the former Head of the Fees Office, 18 July 2010

Thank you for your letter of 14 July including comments by Andrew Mackay on my evidence to you of 18 June.

My comments thereon are as follows:

a) Phone call of May 2009

My inference of Mr Mackay's call was that he sought reassurance in 2009 of my advice to him of Sept 1997 and any authoritative letter I may have retained since that date—a period of 11 years plus and hence “retrospective”.

b) Reference to the press reports of 2009

The implication here is that I could have changed my views by being swayed by the criticism in the Press shows how little he knows me. I have only ever given advice to MPs based on the facts as presented to me, the authenticity of those facts and how they were to be used in line with Resolutions of the House and the rules for allowances appertaining at the time of any claim. ACA was one of the easiest, clear-cut allowances to be administered by the Fees Office during previous decades to the current one.

c) Residence at [the Bromsgrove property]

It appears that the critical date here is indeed September 1997 which should, therefore, be the commencement date of Andrew Mackay's claims for ACA expenditure incurred wholly, exclusively and necessarily on the Westminster home (on overnight stays away from the main home in Miss Kirkbride’s constituency of Bromsgrove). These would have been the first time Andrew Mackay claimed for London expenditure having previously stated that his main home was Westminster—a memorable date in my view.

This would also mean that from the same date Miss Kirkbride should have claimed ACA for London as her main home was in her constituency.

Mr Andrew Mackay and Ms Julie Kirkbride 105

As stated in my earlier evidence I only spoke to Miss Kirkbride on 2 June 1997—her induction interview—some three months before [the Bromsgrove property] was ever mentioned.

As you can see from the above my earlier evidence does not need to be changed except, perhaps, for the deletion of the word “retrospectively”.

In which case Andrew Mackay and I differ as to the advice I provided in 1997. If you do need any more information please do not hesitate to contact me.

18 July 2010

38. Letter to Rt Hon Andrew Mackay from the Commissioner, 21 July 2010

I am writing to let you know that I have now heard back from the former Head of the Fees Office following the comments you made to me in your e-mail of 13 July about his initial evidence.

I enclose a copy of my letter to this witness of 14 July and his response of 18 July. As you will see, he does not accept your suggestion that his views on the application of the rules have been affected by press coverage, and, while he accepts that you moved into your Bromsgrove property in September 1997, he stands by the substance of his previous evidence. While I will record his comments on his reference to “retrospectively”, I propose to keep these words in his original evidence.

As the then Head of the Fees Office says, it is clear that you and he differ on the advice he provided you in 1997. I will need to address this in my conclusions to this inquiry.

If you wish to comment further, please do so. Otherwise, I consider that I have completed my inquiry and will now prepare the draft factual sections of my memorandum to the Committee on Standards and Privileges. This memorandum will also cover the complaint against Ms Julie Kirkbride. I will show you the factual sections of the memorandum which relate to the complaint against you so that you may comment if you wish on their factual accuracy. I will then add my conclusions and submit the full memorandum to the Committee on Standards and Privileges, once it is appointed. The Clerk to the Committee will then send you a copy of the full memorandum for any comments you may wish to make before the Committee come to consider the matter.

It would be helpful, therefore, if you could let know in the next week whether you would like to comment further on the response from the then Head of the Fees Office. In the meantime, I will continue work on the draft memorandum.

Thank you for your help.

21 July 2010

39. E-mail to the Commissioner from Rt Hon Andrew Mackay, 2 August 2010

As promised on my return I have now considered [the former Head of the Fees Office’s] response.

I am pleased that he now understands the date we moved into [the Bromsgrove property] which means, not surprisingly given the passage of time, that his recollection was incorrect. I also note that he thinks “perhaps the word ‘retrospectively’ be deleted”.

I have a very clear recollection of the advice he gave me in September 1997 and that is precisely why my first reaction was to ring him on that crucial day in May 2009. I note you only sent him an extract from my e-mail of 13 July. If that did not include the paragraph concerning the evidence of the Director of Strategic Projects I believe this might have affected answer b) [from the former Head of the Fees Office].

Please let me know if I can be of further help.

106 Mr Andrew Mackay and Ms Julie Kirkbride

2 August 2010

40. Letter to Rt Hon Andrew Mackay from the Commissioner, 3 August 2010

Thank you for your e-mail of 2 August responding to my letter to you of 21 July with the letter of 18 July from the former Head of the Fees Office.

You note that I did not send to that witness the final paragraph of your e-mail to me of 13 July, referring to the advice of the Director of Strategic Projects. This was because I wanted the evidence of the then Head of the Fees Office about his conversations with you rather than any comments on the views of the Director. But, in view of your suggestion that with that knowledge, the answer in part b) of this witness’s letter of 18 July might have been different, I am now putting the matter to him. Your e-mail of 13 July quoted only part of the relevant paragraphs of the Director’s letter of 17 March. I am sending him the full relevant extracts, namely paragraphs 2 and 3 of that letter.

The evidence from the then Head of the Fees Office has, as you know, identified for my inquiry your May 2009 telephone call to him. I was not, of course, aware of that telephone call before I received his evidence and so did not raise it in interview with you. It would be helpful if you could let me know why you did not tell me about such an apparently important telephone conversation which, you would have known, did not corroborate your recollection of the advice you received in your meeting with the then Head of the Fees Office in about September 1997. It might have been expected that you would have considered it relevant and so would have referred to that conversation in your written evidence or when, in oral evidence, you were describing your very clear memory of your 1997 meeting.

I will let you see the response I receive from this witness. I would hope then that I can bring this inquiry to a conclusion so that the matter can be resolved before too much longer. I would be very grateful, therefore, if you could let me have a response to the one remaining point about your telephone conversation in May 2009 within the next week.

Thank you for your help.

3 August 2010

41. Letter to the former Head of the Fees Office from the Commissioner, 3 August 2010

When I wrote to you on 21 July, I said that I was copying your letter of 18 July to Mr Mackay in case he wanted to comment on it further.

I have now heard back from Mr Mackay. Mr Mackay has written in respect of your response as follows: “I am pleased that he now understands the date we moved into [the Bromsgrove property] which means, not surprisingly given the passage of time, that his recollection was incorrect. I also note that he thinks ‘perhaps the word “retrospectively” be deleted’.

“I have a very clear recollection of the advice he gave me in September 1997 and that is precisely why my first reaction was to ring him on that crucial day in May 2009. I note you only sent him an extract from my e-mail of 13 July. If that did not include the paragraph concerning the evidence of the Director of Strategic Projects I believe this might have affected answer b) [from the former Head of the Fees Office].”

In respect of the e-mail of 13 July from Mr Mackay to which he refers, that quoted part of a letter from the Director of Strategic Projects in the Department of Resources. The full relevant quotation is:

“I am afraid that we have not been able to discover any records which would cast light on Mr Mackay's discussions with the then head of the Fees Office in 1997 (that official retired in 1998). Nor do we have any records which indicate that any later consideration was given within the Department to the elections which Mr Mackay and Ms Kirkbride made as to their main and additional homes.

Mr Andrew Mackay and Ms Julie Kirkbride 107

“The Department was certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr Mackay to have inferred from this that the Department had no difficulty with the arrangements.”

In view of the statement in Mr Mackay’s e-mail to me of 2 August, I would be grateful to know whether the evidence from the Director of Strategic Projects which I have quoted above in any way causes you to modify your answer at b) in your letter of 18 July, namely the section headed “Reference to the Press Reports of 2009” and indeed any other part of your evidence. Any other final points you may wish to make would be very welcome.

I attach a typed copy of the manuscript letter you sent me on 18 July and a copy of the full e-mail of 13 July from Mr Mackay for convenience. I would be very grateful if you could let me have a response to this letter within the next week so that I can conclude my work on this inquiry. I am most grateful for your continued help.

3 August 2010

42. Letter to the Commissioner from the former Head of the Fees Office, 8 August 2010

Thank you for your letter of 3 August including further comments by Mr Andrew Mackay on my evidence to you of 18 July.

May I firstly supply additional information of what would have influenced any advice given by me to Mr Mackay.

My introduction to ACA was during the period May 1976 to April 1978 whilst I was a member of the Exchequer and Audit Department (later to become the National Audit Office, on 1 January 1984) and personally responsible for the audit of both House of Commons and House of Lords.

I recall ACA very vividly because I raised an “Audit Query” quite early on in my examination whereby, when for example the ACA maximum was £3,000 p.a. MPs—who were so entitled to claim—were claiming £250 p.m. and merely certifying that they were claiming “reimbursement of expenditure incurred wholly, exclusively and necessarily on overnight stays from their main home.” The months were given and the certificates were duly dated and signed. No other information was supplied.

The consequence was that steps were taken subsequently by the Fees Office so that additional information was acquired such that the auditor could pursue a better audit trail.

When I was appointed as an Assistant Accountant in the Fees Office in October 1980, the claims had been improved, with further improvements in the pipeline such that by the time the first Green Book was presented in time for the 1992 General Election the claims were showing much more information, supported by documents where necessary.

However, the nub of the ACA was the declaration of “main home” as being the home, where a Member had more than one, where the Member spent most nights, i.e. where he or she laid their heads at night.

Evidence supplied by the Director of Strategic Projects

This evidence I had not seen previously so it could not have affected my evidence in any way—thank you for the copy but I will comment on it.

The position of the Director of Strategic Projects was created in the wake of my successor’s retirement in September 2004 when he was holding the position of Director of Operations in the Finance and Administration Department. The Director of Strategic Projects was to be part of the Resources Department headed by the Director General, who had previously been the Director of the Finance and Administration Department since his appointment in January 1997.

108 Mr Andrew Mackay and Ms Julie Kirkbride

It was he who was responsible for the disposal of all the Members’ personal files maintained by the Fees Office when they moved from [address] to [address] some time in 1999 or 2000, I believe.

Hence there was no proper evidence of action taken regarding Members’ details—changes in addresses, travel arrangements, office and employees—which covered a period of more than 40 years.

Mr Mackay has stated that both he and Miss Kirkbride declared openly their positions in respect of claiming ACA and that the Director of Strategic Projects felt that, in the absence of any comment from any official, it was reasonable for Mr Mackay to infer that all was well.

If those declarations were merely their separate monthly claims and in the absence of any knowledge of what was or not agreed in September 1997, plus the added absence of any prior audit (another change brought in by the Director General of Resources of payment of Members’ claims first before any checking of the contents of those claims), I fail to see how that inference could be made.

I do not even know whether anybody in the office responsible for “payments” would necessarily know that Mr Mackay and Miss Kirkbride were indeed Mr and Mrs Mackay. Nor do I know whether or not any subsequent examination of their particular ACA claims were carried out by the Compliance Section after their payments had been made.

Further comments on all the evidence

Mr Mackay has asserted throughout that their main home has been [the Bromsgrove property] since September 1997.

It follows, therefore, that both should have stated so and claimed for the appropriate expenditure incurred on their London home.

It seems to me that it is inconceivable for each of them to have separate “main homes” and thus be entitled to claim for both of their homes.

I do recall that at no time during the period October 1997 to September 1998 did either Member send their ACA claims to me personally to ensure that they were complying with whatever advice I may have given. Many other Members took advantage of taking this action in order to ensure that both parties were in agreement to advice I had given whether by phone or by an interview throughout my whole time in the Fees Office (18 years).

In the light of all the evidence now supplied by me—and Mr Mackay’s comments thereon—it is inconceivable to even suggest that I could have—or would have— advised Mr Mackay to take the action he has taken.

The action that they have taken, however, reflects that whilst Mr Mackay’s claims could be accepted as correct, Miss Kirkbride’s are incorrect based on the false premise that her main home is in London and that she is entitled to ACA in respect of the expenditure incurred on their home in [Bromsgrove] in her constituency.

There is, therefore, no reason for me to change my evidence, for Mr Mackay is wrong in his recollection of my advice given in September 1997. I note that there is no evidence supplied by Miss Kirkbride—with whom I had only spoken on 2 June 1997—whose claims should never had been accepted for payment.

In conclusion, I shall merely state a phrase which is most apt in considering Mr Mackay’s evidence—RES IPSA LOQUITUR.

I am, of course, available if you require any further information.

8 August 2010

43. Letter to the former Head of the Fees Office from the Commissioner, 12 August 2010

Thank you for your letter of 8 August responding to mine of 3 August about the comments which I have received from Mr Mackay in respect of the discussion you had with him in or about September 1997.

Mr Andrew Mackay and Ms Julie Kirkbride 109

I was grateful for this further explanation. Your letter goes beyond the matters which I had raised with you and, indeed, beyond the matters which I am considering in this complaint. In view of your comments on the extract from the evidence of the Director of Strategic Projects, however, I will be asking the Director for his response to those points.

I have noted your comments on whether Mr Mackay and Ms Kirkbride each correctly identified their main home, but I know you will appreciate that I will need to form my own conclusions on whether Mr Mackay properly identified his main home on the basis of all the evidence I have received and which, of course, I have not needed to copy to you.

I hope that this now concludes the questions I need to put to you. I am most grateful for all your help.

12 August 2010

44. Letter to Rt Hon Andrew Mackay from the Commissioner, 12 August 2010

When I wrote to you on 3 August, I said that I was writing to the former Head of the Fees Office to meet your request that that witness should see the final paragraph of your e-mail to me of 13 July. As you will know from that letter, I sent that witness paragraphs 2 and 3 of the Director’s letter of 17 March.

I have now received a response of 8 August from the former Head of the Fees Office. I attach a copy. As you will see, he has taken the opportunity to provide more information about matters which he believes would have influenced any advice which he gave you; he has commented on the evidence from the Director of Strategic Projects; and he has offered some further comments reflecting his views on the designations both by you and Ms Kirkbride. As you will see, he has concluded that: “There is, therefore, no reason for me to change my evidence, for Mr Mackay is wrong in his recollection of my advice given in September 1997.”

In view of this witness’s comments on the evidence which you asked me to show him from the Director of Strategic Projects, I have written to the Director to show him this witness’s comments and to invite any response he may wish to make. I have also written to the witness to let him know that, while I have noted his own views on the designations made by you and Ms Kirkbride, he has not seen the evidence which you have provided in relation to your designations. These were not matters which I had put to him.

There is clearly a difference in the recollections which you and the then Head of the Fees Office have of your discussion in or about September 1997. I will need to reflect this in the memorandum which I am preparing for the Committee on Standards and Privileges and in preparing my conclusions on this matter.

You are, of course, welcome to let me have any further factual points you may wish to make on the witness’s response, although I suspect that we are now at the point where the evidence from you and the other witness has been fully explored. I will, however, let you have a copy of the Department’s response when I receive it. And I look forward to receiving your response to the one remaining point I put to you in my letter of 3 August.

12 August 2010

45. Letter to Director of Strategic Projects, Department of Resources, from the Commissioner, 12 August 2010

I am writing to show you the evidence which I have received from the person who was then Head of the Fees Office in September 1997, when Rt Hon Andrew Mackay met him to discuss matters relating to the identification of his main and second homes.

I have taken evidence from the then Head of the Fees Office in relation to that meeting. In responding to that evidence, Mr Mackay asked that I should refer to that witness parts of your letter to me of 17 March. I therefore copied to the then Head of the Fees Office the second and third paragraphs of that letter.

110 Mr Andrew Mackay and Ms Julie Kirkbride

I attach an extract from the response of 8 August which I have received from the then Head of the Fees Office addressed to that part of your evidence. As you will see, the witness comments on your own statements that “The Department was certainly aware of the arrangements in the sense that both Mr Mackay and Ms Kirkbride made their declarations openly. I think that it is reasonable for Mr Mackay to have inferred from this that the Department had not difficulty with the arrangements.” He says that he fails to see how that inference could be made. He says that he does not know whether anybody in the office would necessarily know that Mr Mackay and Ms Kirkbride were married. And he does not know whether any subsequent examination was made of their ACA claims by the compliance section after payment had been made.

As you will know from Mr Mackay’s evidence in his letter of 21 January 2010, Mr Mackay did not inform the Fees Office that he was sharing a property with another Member who was his wife.

I would be grateful for any comments you may wish to make on this evidence from the then Head of the Fees Office in relation to the statements you made in your letter of 17 March about whether it was reasonable for Mr Mackay to have inferred from their declarations that the Department had no difficulty with the arrangements. Could you also let me have a response to the witness’s suggestion about a Compliance Section check?

If you could let me have a response to this letter by the end of this month, I would be most grateful.

12 August 2010

46. E-mail to the Commissioner from Rt Hon Andrew Mackay, 13 August 2010

Thank you for your e-mail which I have received whilst on family holiday .... whilst I do not have my files to hand, I think to avoid delay, it would be best to respond now to certain inconsistencies and inaccuracies in [the] long response [from the former Head of the Fees Office] to you notwithstanding I am sure you are right to say “I suspect that we are now at the point where the evidence .... has been fully explored.”

I feel certain I did not imply in my previous reply to you that [the Bromsgrove property] was main home for both of us. As previously mentioned it was never set out that married couples should always have the same main home hence the rule changes voted through in May 2009.

[The former Head of the Fees Office] makes much of his auditing experience so it is surprising that under his watch during the full first year of our claims he raised no queries. I can only assume that is because he had put a note on file, as he indicated in his May 2009 telephone conversation with me, which his staff worked from. It is worth recalling that year and subsequently our second homes were on each claim form and separately we would have signed a form designating our main and second homes. This of course is the transparency referred to by the Director of Strategic Projects. [The former Head of the Fees Office] suggests his staff might not have been aware we were married. Surely this is inconceivable bearing in mind the nature of the “Westminster village” and considerable publicity when we married. [My son] and Julie were assaulted during a break-in at our London home. I note [the former Head of the Fees Office] confirms that he gave MPs advice by interview and telephone. Sadly for me it was only after his retirement that such business was also confirmed by both sides in writing.

Finally I repeat I am absolutely clear what advice [the former head of the Fees Office] gave me in September 1997 and would confirm this under oath. That is why when these issues were first raised with me I immediately contacted him to confirm that advice.

You mention me not responding to one final point from your 3 August letter. I thought I had responded to everything but as I cannot see that letter here in [address] perhaps you can send me this point so I can deal with it.

13 August 2010

Mr Andrew Mackay and Ms Julie Kirkbride 111

47. Further e-mail to the Commissioner from Rt Hon Andrew Mackay, 13 August 2010

Thank you for sending me a copy of your further question which I clearly remember and thought I had answered. As I cannot check for two weeks let me answer anyway.

When I rang [the former Head of the Fees Office] in May 2009 he told me that after giving informal evidence in another case he had been told by “the House Authorities” not to speak to Members. He added he could not recall what advice he gave me but afterwards would have made a file note to assist his staff.

As this made no material difference to my case it never occurred to me to mention the conversation. In retrospect as since mentioned to you twice I now see it adds to my case as on a traumatic morning my first thought was to gain confirmation from [the former head of the Fees Office]. I completely refute that there was anything in this conversation to weaken my case there was just not the confirmation I had hoped for.

13 August 2010

48. Letter to the former Head of the Fees Office from the Office of the Commissioner, 20 August 2010

The Commissioner has asked me to thank you again for your letter of 8 August, which he has shown to Mr Mackay. Mr Mackay has replied as follows in his e-mail of 13 August:

“When I rang [the former Head of the Fees Office] in May 2009 he told me that after giving informal evidence in another case he had been told by the House Authorities not to speak to Members. He added he could not recall what advice he gave me but afterwards would have made a file note to assist his staff.”

In his e-mail of 6 July he said:

“He told me that following evidence he had provided in other cases involving Members and the Parliamentary Commissioner he had been told by the House Authorities not to speak to Members. He added that anyway as he dealt with so many Members he could no longer recall the details of our case but would have left instructions to be followed on file.”

The Commissioner has asked me to say that he would welcome any comments you may wish to make on these recollections of Mr Mackay about what you said to him in May 2009. Thank you once more for your help with this.

20 August 2010

49. Letter to the Director of Strategic Projects, Department of Resources, from the Office of the Commissioner, 20 August 2010

The Commissioner wrote to you on 12 August to ask for your advice on his inquiry into this complaint. With that letter he enclosed an extract from the e-mail of 8 August from the former Head of the Fees Office. Mr Mackay has since commented on that e-mail. He has said in his e-mail of 13 August:

“...it is surprising that under [the former Head of the Fees Office’s] watch during the full first year of our claims he raised no queries. I can only assume that is because he had put a note on file, as he indicated in his May 2009 telephone conversation with me, which his staff worked from. It is worth recalling that year and subsequently our second homes were on each claim form and separately we would have signed a form designating our main and second homes. This of course is the transparency referred to by the Director of Strategic Projects.”

The Commissioner has asked me to say that he would welcome your comments on this. Specifically, he would be grateful for your comments on when it became a requirement for Members to indicate their second homes on each relevant claim form and to sign a form designating their main and second homes. It would be most helpful if you were able to incorporate your advice on this in your response to the Commissioner’s letter of 12 August.

112 Mr Andrew Mackay and Ms Julie Kirkbride

Thank you again for your help.

20 August 2010

50. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 24 August 2010

Thank you for your letter of 12th August and for showing me an extract from the evidence which you have received from [name], the then Head of the Fees Office, whom Mr Mackay has said that he met in September 1997 to discuss matters relating to the identification of his main and second homes.

Perhaps I can first correct some of the references [the former Head of the Fees Office] makes. It is understandable that his recollection of events is blurred by the passage of time since he left the House's service in 1998, and, of course, he has no direct knowledge of events after that time.

To deal with the points in order:

• The position of Director of Strategic Projects was created as a personal appointment in 2007. I believe that [the former Head of the Fees Office] may be confusing this post with that of Director of Operations, as held by [name] from his appointment in 2004 until he left the House earlier this year

• The Department of Resources was created in January 2008 after Sir Kevin Tebbit's Report on the House service. It replaced the Department of Finance and Administration

• The then Department of Finance and Administration moved from Dean's Yard to 7 Millbank in September 2001

• The passage of the Freedom of Information Act 2000 was the stimulus to many public bodies to adopt a more considered and rigorous policy on the retention of records. This was implemented in the House. Old records were sorted into those which had a current utility, those which should be archived and those which could be destroyed. There was no wholesale disposal of Members' personal files, though it is possible that documents were not retained which ought to have been. This may explain the absence of any record of a conversation between Mr Mackay and [the former Head of the Fees Office]

• No policy of “absence of prior audit” was introduced by the current Director General of Resources, though as part of wider development work consideration was given at one stage to the option of replicating in respect of allowances the Inland Revenue approach of post-event checking of taxation liabilities. Such a policy was never implemented.

I turn to your specific questions. In your letter to me, you say that [the former Head of the Fees Office] said that “he does not know whether anybody in the office would necessarily know that Mr Mackay and Ms Kirkbride were married.” In fact, he said that he did not know “whether anybody in the office responsible for “payments” would necessarily know that Mr Mackay and Ms Kirkbride” were married. This is an important difference. The junior officials responsible for paying allowances may indeed not have known about such matters, but the framework within which allowances were authorised was set by more senior officials who would have known when Members were married to one another.

From the extract which you have sent me, I am not clear whether [the former Head of the Fees Office] contests Mr Mackay's recollection of their September 1997 discussion. But even if no such discussion had taken place, it should have been incumbent upon senior managers in the then Fees Office to look at unusual circumstances such as those of two Members married to one another so as to ensure that they were properly advised and that the purpose of ACA was being properly followed.

I note that Sir Paul Kennedy accepted (in relation to Ms Kirkbride) “of course that the Fees Office did know what was going on because it authorised payments in respect of your claims”. I respectfully agree with Sir Paul's view.

Mr Andrew Mackay and Ms Julie Kirkbride 113

You refer to Mr Mackay's evidence in his letter of 21st January 2010, that he did not inform the Fees Office that he was sharing a property with another Member who was his wife. I have not seen the question to which Mr Mackay was here responding. However, I inferred that it was a question asking him whether he had made a formal notification when the request to do so first appeared in the Green Book of 2003. Despite him not having done so, the clear implication to me of the early part of his letter of 21st January is that he openly discussed his and Ms Kirkbride's living arrangements with [the then Head of the Fees Office].

In sum, [the former Head of the Fees Office’s] evidence does not cause me to change my original conclusions that it was reasonable for Mr Mackay to have inferred that the Department had no difficulty with the arrangements.

Finally you ask for a response to [the then Head of the Fees Office’s] suggestion about a Compliance Section check. I assume that [he] is referring to a section in the Department established in 2005 and known as the Quality Assurance Team. During 2007 and 2008 this team was tasked to examine the claims of about a fifth of Members randomly chosen each year. Neither Mr Mackay nor Ms Kirkbride was among the Members checked during those years. The systematic examinations ceased in 2009.

I now turn to the letter [from your office] of 20th August.

It became a requirement for Members to indicate their second homes on each relevant claim form after the publication of the 2003 Green Book. In 1997, Members were simply required to provide details of their main home on a nomination form that was completed when they were first elected. Documentation was not required to support ACA claims and so, as a general rule, the Fees Office had no knowledge of the location/address of Members' second homes.

However, if Members were concerned about their arrangements, they could and did discuss the issues which concerned them with senior managers in the Fees Office. Notes of conversations, together with other background notes, were normally kept in a general file (there was one for each Member). These files were not referred to at a day-to-day operational level, though operational staff would have been instructed not to make any payments which were regarded as in principle irregular.

Please let me know if I can help further.

24 August 2010

51. Agreed Note of evidence from the former Head of the Fees Office, 29 August 2010

This letter [to the former Head of the Fees Office from the Commissioner’s office]144 includes extracts from two e-mails from Mr Mackay. I prefer the version of 13 August which I believe is more accurate.

In all honesty I could not be expected to remember what I said, verbatim, in September 1997. But I know, however, what advice I would have given in September 1997 and what advice I could not have possibly given. There is no way I could concur with Mr Mackay's view.

I cannot recall the exact words I used in May 2009 but I know that I told Mr Mackay that I had retained no papers. I know I did not mention the Parliamentary Commissioner, as Mr Mackay said in his e-mail of 6 July.

In relation to the Commissioner's letter of 12 August I am fully appreciative that the Commissioner must come to his own conclusions on this inquiry.

I confirm that this is an accurate record of my evidence.

29 August 2010

144 WE 48

114 Mr Andrew Mackay and Ms Julie Kirkbride

52. Letter to the former Head of the Fees Office from the Commissioner, 2 September 2010

Thank you for your signed response of 29 August to my office’s letter of 20 August with Mr Mackay’s evidence to me about his telephone conversation with you in May 2009.

I have noted that you have accepted as accurate the statement that you told Mr Mackay that you had been told by the House authorities not to speak to Members, and that you could not recall what advice you had given Mr Mackay (presumably in 1997), although you would have made a file note of the conversation. I will, of course, reflect this conclusion to the evidence you have given me, since, while you have stated that you know what advice you would have given and that you would not have given Mr Mackay the advice he recalls, it seems clear that you are not able to recall the advice which in fact you gave him at the time.

As you know, your evidence will be included along with all the other evidence I have received in the course of my inquiries into this complaint, and you can expect it to be published. In the meantime, I will copy your latest response to Mr Mackay. Thank you again for your help. I hope I need not to trouble you further on this matter.

2 September 2010

53. Letter to the Director of Strategic Projects from the Commissioner, 2 September 2010

Thank you for your letter of 24 August responding to my letter of 12 August and to the letter from my office of 20 August.

I was most grateful for this response. Before copying it to Mr Mackay I would be grateful for clarification on one point. I note that from 1997 to 2003 Members were required only to identify their main home on a nomination form completed when they were first elected (although I believe they may have been required also to identify whether their additional expenses were incurred in London or their constituency). But is it the case that Members did not identify the location and address of their main home or their second home in the regular claim forms they submitted against the ACA? If so, it would appear that while the Department might have seen in 1997 that Mr Mackay and Ms Kirkbride had different main home nominations, they would not have known from the nominations on their forms until 2003 that Mr Mackay was making claims on a property which was also Ms Kirkbride’s main home (and vice versa). It would be very helpful if you could confirm your understanding of the position within the next week so that I can then show your response to Mr Mackay.

2 September 2010

54. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 6 September 2010

Thank you for your letter of 2nd September.

I confirm that before 2003 Members were required to identify where their Additional Cost Allowance was incurred, but that they were not required to identify the location or address of their main or second home in the regular claims they submitted. At the operational level, therefore, departmental staff would not have been aware that Mr Mackay was making claims on a property which was also Ms Kirkbride's main home.

Please let me know if I can help further.

6 September 2010

55. Letter to Rt Hon Andrew Mackay from the Commissioner, 8 September 2010

Thank you for your two e-mails of 13 August responding to my letters to you of 3 and 12 August.

Mr Andrew Mackay and Ms Julie Kirkbride 115

I was grateful for these responses. As you will know from the e-mail from my office of 20 August, I asked that parts of each of your e-mails should be copied respectively to the former Head of the Fees Office and to the Department of Resources.

I have now heard back both from the former Head of the Fees Office and from the Department of Resources.

I enclose a copy of my letter to the Department of Resources of 12 August, my office’s letter to the Department of 20 August, and their response of 24 August. I enclose also a copy of my letter of 2 September to the Department clarifying one point in their evidence, and their response of 6 September.

As you will see, for the reasons he gives, the Director of Strategic Projects has concluded that the evidence from the then Head of the Fees Office has not caused him to change his original conclusions that it was reasonable for you to have inferred that the Department had no difficulty with your arrangements.

You will see, too, from the responses of the Department of Resources, that your statement is not fully accurate that from “that year” (by which I take it to mean 1997) and subsequently your second homes were put on each claim form and that you and your wife would each have signed claim forms designating your main and second homes. It would appear that this became a requirement in 2003. Before that, Members would have identified their second home on their nomination form, but they were not required to give the addresses of their main or second home on each of their regular claim forms. So it seems that it would not have been immediately apparent from the claim forms that you were making claims for your second home on a property that was also your wife’s main home.

I attach also a copy of my office’s letter of 20 August to the former Head of the Fees Office identifying the evidence you gave me on 13 August and 6 July about your telephone conversation with that official in May 2009. I enclose also a signed transcript of that official’s response of 29 August. And I enclose a copy of my response to him of 2 September.

I would welcome any comments you may wish still to make on the enclosed correspondence. Subject to that, I believe that I have concluded this inquiry. As soon as I hear from you—which I would hope might be within the next week—I will complete work on the factual sections of the draft memorandum inasmuch as they relate to the complaint against you (as you know the memorandum is also covering the complaint against Ms Julie Kirkbride) and will let you have a copy of the relevant sections so that you can comment if necessary on their factual accuracy. I would then add my conclusions to the memorandum and submit the full memorandum to the Committee on Standards and Privileges. The Clerk to the Committee would let you have a copy of the memorandum so that you can comment, if necessary, on it in advance of it being considered by the Committee.

I am most grateful for your help on this matter and look forward to your response to this letter within the next week so that I can conclude work on this inquiry.

8 September 2010

56. Letter to the Commissioner from Rt Hon Andrew Mackay, 12 September 2010

Thank you for your response of 8th September with enclosures. I am not quite clear if the transcript dated 29th of August is [the then Head of the Fees Office’s] full response. If not and you believe it to be relevant I would appreciate seeing the remainder.

I am heartened that [the Director of Strategic Projects] has again confirmed it was reasonable for us to infer that his Department had no difficulty with our arrangements. I accept his advice that it only became a requirement to put the second home address on claim forms from 2003. However, like him, I do not believe this fundamentally changes the position. I assume I had in my mind this went back to 1997 because we had at that time designated in writing our main and second homes which was then repeated periodically at the Fees Office's request. I also recall us both submitting both mortgage interest details and council tax demands prior to 2003 even though this was not then a Green Book requirement.

116 Mr Andrew Mackay and Ms Julie Kirkbride

I am pleased you believe your inquiry is near conclusion and can shortly be submitted to the Standards and Privileges Committee as we would appreciate this matter being resolved. In conclusion I would rest my case on the following points:-

• Notwithstanding [the then Head of the Fees Office’s] responses, I am very clear that he did advise me that my wife and I should declare different second homes. I believe my immediate reaction in May 2009 to contact him for confirmation adds considerable weight to the sincerity of my belief.

• As [the Director of Strategic Projects] has twice testified, I assumed that as the Fees Office were fully informed of our main and second home arrangements—but never queried or challenged them—they must have been acceptable.

• In addition I did, of course, satisfy myself that these arrangements met with the criteria for claiming second homes set out in the Green Book.

• Finally you have on a number of occasions asked whether I felt my arrangements met with the “spirit” of the rules as they were meant to be applied. I did consider this matter and believed that as two Prime Ministers, the then Speaker of the House and a number of other MPs, claimed ACA on the only property they owned and maintained at their own expense—whilst having access to another property elsewhere— it was therefore an acceptable arrangement for the House Authorities.

Please let me know if I can be of further help.

12 September 2010

Ms Julie Kirkbride

57. Letter to Ms Julie Kirkbride from the Commissioner, 5 November 2009

I would welcome your help on a complaint I have received from Mr Michael Goggins about the claims you made against the Additional Costs Allowance for your constituency home.

I attach a copy of the relevant extracts from the complainant’s letters of 23 and 30 October, together with a copy of the relevant press reports he has appended. I enclose also a copy of the Registrar’s letter of 28 October to which the complainant refers. 145

In essence, the complaint is that you made claims against your Additional Costs Allowance for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing your parliamentary duties. I take the period of the complaint to cover the financial years from 2004–05 to 2008–09 inclusive. You will see that the complainant has also raised a complaint against Rt Hon Andrew Mackay MP.

The Code of Conduct for Members of Parliament sets out in paragraph 14:

“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 provisions in relation to the Additional Costs Allowance which appear to be of most relevance to the period of this complaint were set out in the Green Book published in July 2006.

In his introduction, the Speaker wrote:

145 Not included in the written evidence

Mr Andrew Mackay and Ms Julie Kirkbride 117

“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. In cases of doubt or difficulty about any aspect of the allowances or how they can be used, please contact the Department of Finance and Administration. The Members Estimate Committee, which I chair, has recently restated the Department's authority to interpret and enforce these rules.”

The provisions in relation to the Additional Costs Allowance are set out in Section 3 of that Green Book. Paragraph 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.”

Paragraph 3.2.1 sets out eligibility as follows:

“You can claim ACA if:

a You have stayed overnight in the UK away from your only or main home, and

b This was for the purpose of performing your Parliamentary duties, and

c You have necessarily incurred additional costs in so doing, and

d You represent a constituency in outer London or outside London.”

Paragraphs 3.3.1 and 3.3.2 set 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.

“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.”

Paragraph 3.5.3 provides:

“You must inform the Department if you are claiming ACA in respect of a property which you share with another Member.”

Paragraph 3.6.1 deals with subletting, lodgers and paying guests as follows:

“You are strongly advised to avoid subletting or renting out any part of a property for which you claim the additional costs allowance. However, if you have such an arrangement you should send a copy of the agreement with your tenant or lodger to the Department. We will reduce the ceiling on your claims for that year by the rental income for that year.”

Paragraph 3.7.3 deals with re-mortgaging as follows:

“Re-mortgaging is permissible if moving to different accommodation or if repairing or improving your existing ACA home.

“Members should consult the DFA before making any major commitments.”

Paragraph 3.11.1 provides the following definitions:

“Main home

When you enter Parliament we will ask you to give the address of your main UK home on form ACA1 for the purposes of ACA and travel entitlements. Members are expected to locate their main homes in the

118 Mr Andrew Mackay and Ms Julie Kirkbride

UK. It is your responsibility to tell us if your main home changes. This will remain your main home unless you tell us otherwise.

“The location of your main home will normally be a matter of fact. If you have more than one home, your main home will normally be the one where you spend more nights than any other. If there is any doubt about which is your main home, please consult the Department of Finance and Administration.

“Constituency

For the purpose of the ACA, overnight stays within 20 miles of your constituency boundary are regarded as overnight stays within your constituency.

“London

Similarly, for the purposes of the ACA, overnight stays within 20 miles of the Palace of Westminster are deemed to be overnight stays within London.”

Paragraph 3.13.1 gives examples of expenditure allowable under the ACA, including:

• “Maintenance & service agreements

• necessary repairs to make good dilapidations

• decoration”

Paragraph 3.14.1 lists expenditure which is not allowable, including the following:

• “Living costs for anyone other than yourself

…

• The capital cost of repairs which go beyond making good dilapidations and enhance the property.”

The Green Book for June 2003, which covers some of the period of this complaint, is broadly similar to the July 2006 version, except that it does not include the principles provided in paragraphs 3.3.1 and 3.3.2 of the July 2006 Green Book, nor were there boundary provisions for a constituency and London home provided in paragraph 3.11.1 of the July 2006 Green Book.

I would welcome your comments on this complaint in the light of this summary of the rules. In particular, it would be helpful to know:

1. Which home you identified as your main home, and which home as your second home for each financial year from 2004–05 to 2008–09, together with the relevant dates.

2. The purchase costs of each home and the details of any mortgages which you hold or have held on your first and second homes since 2004–05.

3. The nature of your accommodation in your second home in your constituency, and who has lived there during the period in question, together with dates.

4. What accommodation is available to anyone living at the property who is not your partner or your dependent children.

5. What arrangements were made for your brother to live at the property, the reasons for doing so, and whether you have reflected the costs of his accommodation in the claims you have made against the Additional Costs Allowance.

6. Whether you have lodged with the Department any agreement with your brother as your tenant or lodger.

Mr Andrew Mackay and Ms Julie Kirkbride 119

7. The ACA claims you have made for each financial year from 2004–05 to 2008–09 inclusive, together with the main categories against which you have claimed, identifying your mortgage interest claims and what proportion of your total mortgage they represent.

8. Whether, and if so why, you have extended the property; whether this was on account of the presence of your brother living in the property; the total cost of this work and whether you claimed for any of this from the Additional Costs Allowance and, if so, how much.

9. Whether, and if so when, you informed the Department that you were claiming ACA in respect of a property which you shared with another Member, namely the Rt Hon Andrew Mackay MP.

10. Whether you consulted the then Department of Finance and Administration about any aspect of your arrangements. If so, it would be helpful to have details of that consultation, together with any documentary evidence you may have.

Any other points you may wish to make would, of course, be very welcome.

I enclose a note which sets out the procedure I follow. I have informed the complainant that I have accepted his complaint and am writing to you about it.

It would be very helpful if you could let me have a response to this letter within the next three weeks. If there is any difficulty about this, or you would like a word about any other matter relating to this complaint, please get in touch with me at the House.

I would be very grateful for your help on this matter.

5 November 2009

58. Letter to the Commissioner from Miss Julie Kirkbride, 21 January 2010

I write in response to your inquiries following the complaint by Mr Goggins. I answer below the ten points you raise in your letter.

1. Since 2004 to the present day I have nominated [address] in Bromsgrove as my second home and [the London property] as my main home.

2. We bought [the London property] for £850,000 in 1998 taking out a mortgage of £200,000 which we still maintain on an interest only basis. We bought [the Bromsgrove property] in 1997 for £75,000 in a very dilapidated state and spent more than double the purchase price on restoring it. We took out an interest only mortgage of £180,000 on it in 2004. We further extended the interest only mortgage by £50,000 in April 2008 to cover the cost of an extra bedroom to meet our family's needs.

3. The accommodation in [the Bromsgrove property] originally comprised a sitting room, dining room, kitchen, two double bedrooms and two bathrooms. We then added a further bedroom to make it three. Since 1997 only my husband and I have lived at [the Bromsgrove property], along with our son [name] who was born in 2000.

4. There is no separate accommodation in [the Bromsgrove property] for a tenant. We have three bedrooms, however, so that we can accommodate a child carer to allow me to carry out my parliamentary duties.

5. My brother does not live at [the Bromsgrove property], he stays in our home for the express purpose of providing childcare for our son. When he is not needed to look after [our son] he has other responsibilities elsewhere, including looking after our ... mother in [name of town]. I considered my brother's care of [our son] entirely consistent with the Green Book's definition of a necessary function to allow me to carry out my parliamentary duties and as such I did not factor in his presence in my ACA claims—after all, he was not receiving a benefit, he was not adding to the cost of the property and I could not carry on as an MP and be a fit and proper mother without his help!

120 Mr Andrew Mackay and Ms Julie Kirkbride

6. In light of the above answers question six is not relevant.

7. I confirm that we have an interest only mortgage and I attach my ACA figures.146 These are only reliable estimates as the information provided by the Fees Office is a little confusing.

8. As I have mentioned above, we bought the property in 1997 before [my son] was born in 2000. When [my son] was very little my brother (and other child carers who looked after [my son] when he was not available) shared a bedroom with him. My husband and I felt it was inappropriate—and particularly so for public figures who would attract interest/gossip—that our prepubescent child should continue to share his room with an adult. As we still needed childcare we thought the best course of action was to move to a bigger property—and of course, had we done so we would have attracted much less interest. However, we had the possibility of extending our existing apartment and so we did this instead, creating a third bedroom. In total we spent in excess of £60,000 on the extension and took out a mortgage of £50,000 to fund the work. I discussed the matter with [an official] in the Fees Office and explained our reasons for needing a third bedroom. As you will be aware, the House of Commons rule at the time was that mortgages could not be extended to fund extensions to a property unless there were family reasons for doing so. [The official] said that my circumstances fitted the criteria in which an extension of the mortgage could be authorised and the Fees Office duly paid the interest on my new mortgage of £230,000 from my ACA. I wrote a note to the Fees Office which is lodged with them confirming this arrangement. Can I reiterate that this third bedroom was created to enable me to accommodate a flexible child carer who happens to be my brother most of the time, but not all of the time. If my brother had stopped providing childcare, the bedroom would be used by somebody else. He did not live in the property all the time, but was there at the same time as we were there for the purposes of providing childcare. As such, I do not think it reasonable to say that this bedroom was built for my brother.

9. I did not inform the Fees Office that I was sharing a property with another Member who was my husband. I made the reasonable assumption that this rule was to identify non-related MPs who had come to private agreements to share properties and did not apply to those Members where it was public knowledge that they were married to each other.

10. As mentioned above, I did consult [an official in the Department of Finance and Administration] over my arrangements and dropped a note to the Fees Office confirming our conversation. I do not have a copy of the note, but I know it exists in the records as it was reproduced by the Daily Telegraph.

I hope my answers are helpful and that you will be satisfied that I have no further case to answer with regard to Mr Goggins’ complaint about my brother's involvement in my childcare arrangements. I would like to add that the House of Commons spends a great deal of time agonising as to why few women, and even fewer women with children, become MPs. I can tell them that one of the reasons is that it is massively difficult to reconcile the incredibly busy (and peripatetic) demands on one's time as an MP with being a proper mother to children. In my case, I am faced with the need for six days and evenings a week childcare and as such, if my option had been to leave [my son] with bought in childcare all that time I would not have considered it fair to him to stand for Parliament. As it was, I thought that I was lucky to have Friday and Saturday covered by my own brother who would give [my son] the loving care he needed in my absence and whose desire to care for [my son] as lovingly as a father would I did not need to question whilst I was in Bromsgrove giving my constituents the attention they had the right to expect from their MP. As it has turned out, what I thought were entirely appropriate arrangements have become fodder to a baying press and vexatious complainers and I can only hope that after many months of this same issue being considered by Sir Thomas Legg that you will finally allow the matter to rest and let me get on with my new life outside Parliament.

21 January 2010

146 Not included in the written evidence. For a summary of the information relating to mortgage interest claims, see WE 59 below.

Mr Andrew Mackay and Ms Julie Kirkbride 121

59. Summary of Ms Julie Kirkbride’s ACA/PAAE claims 2004–05 to 2008–09 (figures from the Member)

Year Mortgage Interest (£) Other items (£) Total (£) 2004–05 8,988 11,684 20,672 2005–06 9,288 12,175 21,463 2006–07 10,121 11,543 21,664 2007–08 12,030 11,100 23,130 2008–09 13,917 9,271 23,188 Source: Letter to the Commissioner from Ms Julie Kirkbride, 21 January 2010.147

60. Letter to Ms Julie Kirkbride from the Commissioner, 26 January 2010

Thank you for your letter of 21 January responding to the letter which I sent you on 5 November in respect of this complaint about the claims you made against the Additional Costs Allowance for your constituency home.

I was grateful to receive this. In the light of this helpful information, I would be most grateful if you could clarify the following points:

1. I have noted the description of the help which your brother gave you in terms of childcare. You refer to other carers. It would be helpful to know the dates during which your brother (as opposed to other carers) provided the overnight childcare for your son.

2. Could you let me know where your brother has his main residence?

3. Could you give me an estimate of the number of nights a week which your brother spent overnight in your constituency home?

4. Could you let me know whether there is any basis to the suggestions in the press reports that your brother was registered to vote at your Bromsgrove address and that he gave it as his usual residential address to Companies House? If it is true, could you explain why he was registered to vote there and gave that address to Companies House, given the use that you have told me he made of the property?

5. Could you let me know whether your brother spent any time, including any overnight stays, in the Bromsgrove property when you and your son were not there?

6. Could you help me on the arrangements which you and your husband, Mr Andrew Mackay MP, had in staying overnight with your son in your constituency property? You noted that your brother covered childcare on Friday and Saturday. It would be helpful to know whether you or your husband were there with your son other nights of the week and, if so, who covered childcare. I appreciate that these are personal questions, but I do need to have responses to them if I am satisfactorily to resolve this matter. You may also wish to discuss your response to this question with your husband.

7. Could you let me know, as requested in my letter of 5 November, whether you claimed from your ACA for the full mortgage interest on your constituency home? If you did not, what proportion of that interest was represented by your claims?

It would be helpful if you could let me have a response to this letter within the next two weeks. Subject to that response, I would propose to consult the Department of Resources, including asking them for further details about the discussions you report with a member of the then Department of Finance and Administration. I would then show you their response for any comments you may wish to make. It may be that then we should meet for an interview before I resolve this matter.

147 WE 58

122 Mr Andrew Mackay and Ms Julie Kirkbride

26 January 2010

61. Extract from the Report by Sir Thomas Legg on his ACA Review, 1 February 2010: Ms Julie Kirkbride148

Ms Kirkbride is married to another MP. She designated her constituency home as her second home, while her husband nominated it as his main home. She designated her husband's second home, a flat in London, as her main home. This meant that, between them, the couple had no main home which was not funded by the ACA. Throughout the five years of the review period, they both claimed at or close to the full allowance to support their two homes. These arrangements obtained a financial benefit for the couple which appears unintended under the Green Book rules, and as such contrary to the principles governing it. Had they made different designations, each MP might reasonably have claimed up to two-thirds of the full allowance on a shared second home. On this footing, each of them was overpaid by one-third of the maximum ACA for each year of the review period. This is £29,243.

In May 2008, Ms Kirkbride extended the mortgage on her designated second home to fund the construction of an additional bedroom, mainly for the use of her brother to provide childcare for her family. The total interest paid under the ACA to fund the additional loan was £2,584.26. As these payments were used to provide accommodation for a non-dependent family member, the transaction was conflicted.

Total repayment recommended: £31,827.26

Reduced on appeal by: £2,584.26

Total repayments received since 1 April 2009: £29,243.00

Balance recommended to be repaid: £0.00

62. Extract from ACA Repayment Appeals by Sir Paul Kennedy, January 2010: Ms Julie Kirkbride149

The ACA Review points out that you are married to another MP, Andrew MacKay. You designated your constituency home as your second home. He nominated it as his main home, and the flat which you shared in London as his second home. That enabled you to claim the expenses relating both properties against ACA, and you did so, your claims being at or close to the full annual allowance. The Review describes this as “a financial benefit which appears unintended under the Green Book rules, and as such to the principles governing it”. It is said that had you made different designations each of you might reasonably have claimed up to 2/3 of the full allowance on a shared second home. The Review has therefore concluded that each of you was overpaid by 1/3 of the maximum ACA for each year of the review period, a total of £29,243.

The Review goes on to point out that in May 2008 you extended the mortgage on your designated second home (your constituency home) to fund the construction of an additional bedroom, mainly for the use of your brother to provide childcare for your family. The total interest recovered under ACA in relation to the increase on the mortgage amounted to £2,584.26, and the Review states that as the accommodation was for a non-dependant family member the transaction was conflicted. It is clear from paragraph 8 of the Review that such a transaction would be regarded as conflicted because it involved a close family relative.

In your Grounds of Appeal to me you take a number of points in relation to your choice of designated home. You say, rightly, that nowhere in the Green Books during the review period was it suggested that married couples should consider their ACA claims as joint, and capped at a lower level than the maximum amount. It was only in May 2009 that the Rules were changed to require Members married to each other to nominate the same main home, and restricted them to claiming one person's Personal Additional Accommodation

148 Published as Appendix 1 to the First Report of the Members Estimate Committee, Session 2009-10 (HC 348) 149 Published as Appendix 2 to the First Report of the Members Estimate Committee, Session 2009-10 (HC 348)

Mr Andrew Mackay and Ms Julie Kirkbride 123

Expenditure (the successor to ACA) between them. You submit that it can be inferred that you and your husband were not acting contrary to the rules until that change was made. You also say that what you did was done openly and with the knowledge of the Fees Office. When you married your husband he took advice from the Head of the Fees Office, and you, as a new Member, acted on that advice. You refer to the doctrine of Estoppel, but it has nothing to do with the issues with which I am concerned. Even if the Fees Office gave bad advice, it cannot have rendered valid and acceptable an invalid claim. I accept of course that the Fees Office did know what was going on, because it authorised payments in response to your claims, and I accept that in one sense the Review decision is retrospective, but I find it a little difficult to accept your suggestion that your choice of designation represented reality because your husband's family live in or near your constituency, hence making it his natural home, whereas you are based in London as the principal carer for your child.

To my mind the fundamental reason why the arrangements which you made cannot be regarded as acceptable is that they lost sight of the purpose of ACA, which was to assist Members to fund the cost of accommodation when they needed a second home in order to fulfil their duties. It was never intended to relieve them of the costs of their main home, and you operated it in such a way that you achieved that result. Although you have challenged the approach adopted by the Review, I do not understand you to challenge the figures if that approach is found to be correct.

I turn now to your appeal in relation to mortgage interest on your extended mortgage. You explain that your second home (your constituency home) had only 2 bedrooms. By 2008 you needed an extra bedroom to accommodate your child's carer, and at that time you were lucky enough to be able normally to call upon your brother to provide that service at week-ends and in the holidays. The edition of the Green Book which was current at that time stated that ACA was not available to recover -

“interest on any additional mortgages, advances or loans secured on the same property unless required for the repair or improvement of that property”.

It seems to me that in your case there was no problem, because the additional loan was used to improve the property, and you tell me that before the work was undertaken you explained to a senior Accounting Officer in the Fees Office what you proposed to do and why. He then, as you put it, “authorised the extension of the mortgage”.

I accept that by 2008 there were restrictions on transactions with family members. ACA could not be used to meet the costs of a mortgage or for leasing accommodation from a partner or family member (see paragraph 3.3.3 of the Green Book), but I see no reason why that should have been extended to prevent you from recovering the costs of an additional mortgage required to enable you to provide a child carer's bedroom just because at that time it was envisaged that the child carer would normally be your brother.

Accordingly, I am satisfied that there are special reasons in your individual case showing that it would not be fair and equitable to require repayment of £2,584.26. I find no such reasons in relation to the sum of £29,243. As you have already repaid £1,811.64 the balance now recommended for repayment is £27,431.36.

To the limited extent indicated I would allow your appeal.

63. Letter to the Commissioner from Ms Julie Kirkbride, 11 February 2010

I write in response to your letter of 26th January and would offer the following response to your further questions.

1. I never kept notes in my diary as to who looked after my son whilst I was in Bromsgrove. As I said before, I would have someone resident in [the Bromsgrove property] to provide care for my son at the weekends and during House of Commons recesses so that I was free to carry out my parliamentary duties. This person was normally my brother, but I have no record of the nights he spent there, nor records of when another person fulfilled his child caring role.

2. My brother's main residence is [address]. My brother jointly owns this property and since 2000 has been elected, by the residents, onto the board of management for the flat complex.

124 Mr Andrew Mackay and Ms Julie Kirkbride

3. I do not have records for this and refer you to my answer to point one. As a normal rule, I would spend every weekend in [the Bromsgrove property] whilst the House is sitting and would spend parliamentary recesses there except for the time when we would be away on holiday.

4. My brother is registered to vote in Bromsgrove. I am sure that you will be well aware that any member of the public is eligible to register to vote anywhere in the country with the obvious restriction that they would need a postal address in that area to receive their polling cards. My brother registered to vote in Bromsgrove because he provided considerable voluntary support for me as the Member of Parliament (in the form of maintaining my website and other computer related services) and therefore wished to enjoy voting for his sister in parliamentary elections. Mr Goggins is wrong to suggest that voter registration denotes someone's main address (although it may do so). In the case of my brother there are obvious reasons why he might wish to register in a place that was not his main home, but where he did spend some of his time.

Let me also address the issue you raise about the registration at Companies House. My brother returned to the UK after living many years in the USA shortly before my son was born. He started working as a lecturer for a high tech computer company which offered residential courses across the country. He offered to cover childcare for me at the weekends. In 2001 his accountant suggested that he set up a company in the UK and without consulting me he put [the Bromsgrove property] as the address of this company so that he would see any urgent paperwork at the weekend. I accept this should not have happened, but the reason is entirely innocent. No money whatsoever was traded through the company, it was never used, it never had any employees and never had a liability for tax. It remained completely dormant and was closed in 2005.

5. My brother will have spent occasional time, including nights, in [the Bromsgrove property] without the presence of myself or my son. This is because he offered computer services to me and my staff in Bromsgrove on a voluntary basis. He maintained my website and he offered training and support to my office staff on an ad hoc basis. There will have been occasions when it was convenient for him to use [the Bromsgrove property] as a base—as I maintain an office in my home there. It seems to me that in providing computer support services as a volunteer my brother was saving the taxpayer a considerable amount of money. However, as I noted in my previous correspondence, my brother has other responsibilities to take care of during the week and I would therefore stress that this would be an occasional occurrence.

6. As I have explained above, my husband and I spent the parliamentary recesses in [the Bromsgrove property] and due to the unpredictable nature of our jobs we liked to have someone to cover childcare whilst we were there.

7. I claimed the full mortgage interest from the ACA.

I hope that the above answers satisfactorily resolve the complaint. I recognise that you have conducted previous inquiries where a non dependent person stayed at the second home of an MP. However, I would hope that you will accept that my case involves a completely different principle, insofar as the person was staying at the property entirely for the purposes of enabling me to carry out my parliamentary duties. Moreover, to raise an official inquiry on the issue of childcare arrangements would have profound and unfortunate implications for the next generation of women MPs who we all hope will be entering parliament at the next election.

On a further note, I recognise that you have been given a job to do by Parliament, but you will also have seen the verdict of Sir Thomas Legg's Inquiry and the appeal conducted by Sir Paul Kennedy into my expenses. As such, I hope you will accept that I have spent the last nine months being investigated on precisely this issue— which finally concluded in my favour—and that to face yet another inquiry would result in my being exposed to triple jeopardy. I was delighted when Sir Paul accepted my explanation and I hope that for my own peace of mind I can now look forward to your doing the same.

11 February 2010

Mr Andrew Mackay and Ms Julie Kirkbride 125

64. Letter to Ms Julie Kirkbride from the Commissioner, 17 February 2010

Thank you for your letter of 11 February responding to mine of 26 January in respect of this complaint about the claims you made against the Additional Costs Allowance for your constituency home.

I was most grateful to receive this. The issues I am to resolve include whether your brother lived rent free in your Bromsgrove home as in effect his main residence and whether the claims you made for mortgage interest for the additional mortgage you raised on your constituency home to build a third bedroom used by your brother were necessary for the purpose of enabling you to perform your parliamentary duties. These were specific allegations raised by the complainant and, as explained in previous correspondence I consider that it would be right for me to resolve them. In doing so, of course, I would be happy to take account of any considerations which you believe to be relevant in the auditing and appeal processes undertaken by Sir Thomas Legg and Sir Paul Kennedy.

I note that you do not have any information about the amount of time your brother spent in your constituency property in order to provide childcare for your son or how often someone else performed that role. I note too that your brother spent occasional time, including nights, in your constituency residence when you and your son were not there.

In view of the information you have provided, I think it would be helpful for me now to seek evidence from your brother and I am accordingly writing to him. I will let you know when I have received his response and show it to you.

In the meantime, it would be helpful if you could clarify the following points for me:

1. You have told me that your brother covered childcare in your Bromsgrove home on Friday and Saturday. It would be helpful to know, as requested at point 6 of my letter of 26 January, who covered childcare on the other nights of the week during the recesses.

2. Did you pay your brother or any of your other child carers for their childcare work? If so, I am unclear why you have no record of the childcare work undertaken for you. (I see you are reported by the BBC on 24 May 2009150 as saying that you do not pay your brother—but I am not clear whether other child carers are paid.)

3. What childcare arrangements you have for when your son is in London, where, as I understand it, he goes to school? I see from the BBC report of 24 May that you are quoted as saying that your brother stays in your London home from time to time to help look after your son. As far as I can see, you have not so far referred to his staying in London in your evidence to me.

4. Could you also let me know the normal pattern of your overnight stays in your London home, during term time and in the school holidays and parliamentary recesses?

5. Could you let me know whether your brother made any payments, in money or in kind, for the time he spent in your constituency property?

It would be helpful if you could let me have a response to this letter within the next two weeks. I will be back in touch anyway when I hear from your brother.

Subject to those responses, I hope I will then have enough information and understanding of the position to seek the advice of the Department of Resources. Like you, I would like to bring this inquiry to a conclusion as soon as I fairly can.

17 February 2010

150 WE 65

126 Mr Andrew Mackay and Ms Julie Kirkbride

65. Extract from BBC News Article, 24 May 2009 Expenses row MP faces more claims

Tory MP Julie Kirkbride has been accused of allowing her brother to live rent free in her taxpayer-funded home.

The News of the World alleges Ian Kirkbride, 49, registered a business to the flat in a Bromsgrove stately home.

The Bromsgrove MP said her brother was sometimes there to look after her son and the claims were a “distortion”.

[ ... ]

The newspaper says Ms Kirkbride has been claiming over £1,000 a month in mortgage payments on the apartment in Bromsgrove, Worcestershire—plus thousands of pounds for maintenance.

Family support

But in a statement, she said: “My brother, Ian, stays in my Bromsgrove apartment and in my London home from time to time to help look after my son.

“I claim no expenses for my brother and neither do I pay him or claim for his help. He also acts as a volunteer in helping me with my office work and administration.

“Up and down the country families have their relatives stay with them and get them to help with things like childcare.

“Ian has his own home but prefers to stay with me and help me.

“There is no cost to the taxpayer in the arrangement and there is nothing for me to apologise for.

“To describe this arrangement as my brother living rent-free is a total distortion.”

[ ... ]

66. Letter to Mr Ian Kirkbride from the Commissioner, 17 February 2010

I would welcome your help on a complaint I have received against Ms Julie Kirkbride MP in respect of certain claims she made against parliamentary allowances for the extension of her constituency property in Bromsgrove.

I enclose a note which sets out the procedure I follow in inviting evidence from witnesses. As you will see, my inquiries are subject to parliamentary privilege and I would be grateful, therefore, if you did not disclose this letter, or its contents, or your response to anyone else. I am likely to show your response to Ms Kirkbride for any comments she may wish to make. Your response is likely to form part of the evidence I have received for this inquiry and once my inquiries are concluded, it may be published. In any publication, I would identify your name and your relationship to Ms Kirkbride, but not your address.

In essence, the complaint I have received against Ms Kirkbride is that she made claims against her Additional Costs Allowance for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing her parliamentary duties. The complaint is that the Bromsgrove property was, in effect, your main residence, that you lived there rent free, and that additional claims were made by Ms Kirkbride to cover the costs of a mortgage loan which was necessary to provide you with your own bedroom at the property.

In her evidence to me, Ms Kirkbride has said that you did not live at her Bromsgrove property all the time, but were there at the same time as she and her husband were there for the express purpose of providing childcare for their son. When you are not needed to provide childcare, you have other responsibilities elsewhere, including looking after your mother in [name of town]. Ms Kirkbride has said that when her son was very

Mr Andrew Mackay and Ms Julie Kirkbride 127

little, you shared a bedroom with him. She and her husband felt that that arrangement was inappropriate as their son got older. As they still needed childcare, they created a third bedroom in Ms Kirkbride’s constituency property.

Ms Kirkbride has told me you jointly own your [name of town] property and since 2000 you have been elected by the residents on to the board of management for the complex. You are registered to vote in Bromsgrove because you provided voluntary support to Ms Kirkbride and wished to vote for your sister in parliamentary elections. Your accountant suggested in 2001 that you set up a company in the United Kingdom and, without consulting Ms Kirkbride, you put her constituency property as the address of this company so that you could see any urgent paperwork at the weekends. Ms Kirkbride has said that no money was traded through the company, it was never used, it never had any employees and never had any liability for tax. It remained completely dormant and was closed in 2005.

Ms Kirkbride has said that she had someone resident (normally you) in her Bromsgrove property to provide care for her son at the weekend and during House of Commons recesses. Ms Kirkbride has also said that you have spent occasional time, including nights, in the constituency property without the presence of either herself or her son. This is because you offered computer services to her in her capacity as a Member of Parliament and to her staff on a voluntary basis. You maintained a website and offered training support to her office staff. There were occasions when it was convenient for you to use the constituency property as a base as she maintains an office in her home there. She has stressed that this would have been an “occasional occurrence.”

I would be grateful to know whether you can confirm, or whether you would wish to modify in any way the evidence which Ms Kirkbride has given me about your use of her homes. It would also be helpful to have:

1. your estimate of the number of nights you normally spend in the constituency property. Ms Kirkbride has said she has no record of these, but I hope that you will be able to help me with this. I appreciate that you may not have detailed records, but it would be most helpful to have an estimate of the normal pattern of your overnight stays in the constituency property over the course of each financial year from 2004–05 to 2008–09;

2. your estimate of how many nights you spent in the property over the course of each financial year in the same period, when Ms Kirkbride and her son were not there—and if you could confirm why you spent those nights there;

3. an explanation of why you identified Ms Kirkbride’s constituency property as your usual residential address in completing the forms for Companies House, if that was not your usual address (I believe the form requires you to identify your usual residential address);

4. information about whether you spent any nights in Ms Kirkbride’s London home and whether you did so to look after her son. If so, could you give me an estimate of the normal pattern of your overnight stays in the London property over the course of each financial year between 2004–05 to 2008–09 (Ms Kirkbride has not so far referred to you undertaking childcare duties in London, but is quoted in the press as saying that you stayed there from time to time to look after her son. I am checking the position also with her);

5. your view on whether you regard your [Gloucestershire] home to which this letter is addressed, as your main home and whether there is any basis for the allegation that your main home was any time from 2004 to 2009 inclusive Ms Kirkbride’s constituency property in Bromsgrove;

6. a description of how the arrangement for planning your overnight stays at the constituency property worked out in practice. Did you make a standing arrangement to be there on the same nights a week and if so, did this vary between sitting weeks and parliamentary recesses; or did you arrange with Ms Kirkbride ad hoc each week the nights when you would need to be in the constituency property to look after her son?

Any other points you would like to make to help me with this inquiry would be very welcome.

I know that Ms Kirkbride would like this inquiry to be concluded as soon as possible, so if you could let me have a response within the next two weeks, I would very much appreciate it.

128 Mr Andrew Mackay and Ms Julie Kirkbride

Thank you for your help.

17 February 2010

67. Letter to the Commissioner from Mr Ian Kirkbride, 11 March 2010

I write in response to your letter of 17th February.

[Comments which the witness asked not to be included and which have not been taken into account in this inquiry]

In response to the particulars of your letter ...

Statements by my sister:

I generally concur with the statements my sister has made and which you outline in your opening paragraphs.

Questions 1 & 2

I have never found it necessary to maintain a formal diary. As such I am unable to give a figure for the number of nights I have been at the constituency property, either when my sister or her son were there, or on the occasions I might have been there alone. Few of us are capable of remembering in detail events which have been a routine part of life going back over five years or more. As such any estimate would be a complete guess with all the inaccuracies that would involve.

What I can relate is the normal pattern of my movements over that period.

I would plan to be at the constituency property most weekends (typically Friday to Sunday) when my sister and her son were expected to be there. This was a standing arrangement. When my sister and her son were planning to be there during parliamentary recesses we would make arrangements, in so far as possible with any other obligations I may have during the week, for me to be there to cover childcare for my nephew.

I was also usually flexible enough to be able to be in London as needed to look after my nephew if for example his parents were going to be away and they wanted someone older to support their au pair. I would frequently drive my nephew up to the constituency home after school on Friday so that my sister could go early and spend more time on her parliamentary duties there.

I am self-employed and therefore had an irregular work pattern taking me to London and all over the country. However, I am very close to my family and care not only for my nephew but also my elderly mother who lives in [name of town] in a property of which I am a joint owner.

When my nephew and I were in the constituency property my main purpose was to look after him and free up my sister for her constituency duties.

On the occasions when I was alone in the property I was there at the express wish of my sister to help her in the performance of her parliamentary and constituency obligations. I had offered to help her with any IT needs on a wholly voluntary basis since my work was in IT, networking, lecturing and training.

I maintained my sister's website and she would often leave photographs with me as she departed for London at the end of the weekend so that I could update it. I also offered technical support to her staff and if I was doing this on Monday morning for example, it might make sense to stay the night before. I would help her secretaries with any IT problems, computer glitches, networking issues and the like. I made myself available on the end of a phone for them. I would teach or help them with the electoral roll database we maintained. I would teach or help them with various software programs as needed.

For my own efficiency I would try as far as possible to do any and all of this around the weekend when I needed to be in Bromsgrove to look after my nephew.

Question 3

Mr Andrew Mackay and Ms Julie Kirkbride 129

This issue goes back to the year 2001. I am self employed. With questions raised over IR35 my accountant was encouraging me to form a company. I was not convinced but reluctantly told him to go ahead.

My accountant did all the paperwork and did not consult me. At the time, I had given him the Bromsgrove postal address for any time-sensitive contact as I was elsewhere working during the week but knew that I was likely to be in Bromsgrove most weekends. I have only been told in the last year that the form asks for your usual residential address. Had I been aware of that I would have been able to give a different address.

The company was registered in February 2001. It was never used. I saw no reason to change my self employed status. It remained a dormant company with my accountant filing the annual paperwork. I don't believe I saw any paperwork again until my accountant missed a filing deadline for dormant companies (he'd forgotten about it too!) and there was a penalty. I immediately closed the company. I applied to close in November 2004 and it was finalised in April 2005. As my sister has said, HMRC accepted it was a dormant company, never used, never had any employees and never had any liability for tax.

I did no business in the Bromsgrove area and I did not work out of the constituency property at any time. Setting up the company was a mistake. Having it held against me would compound that.

Question 4

I believe I have part answered this question in Q1 & Q2 above. There was no regular pattern of stay in London. My sister had a series of au pairs and an agreed work pattern. There were times when my sister and her MP husband would be away from home, or there was some school event when they felt it would be appropriate for the au pair to have some adult backup. There were times when the au pair went home for extended holiday periods and times when the au pair fell ill or had personal commitments. Where I could fit it into my other commitments, I agreed to help. Au pairs tended to leave in early July and arrive in late September and there was often a need for childcare for parts of that period too.

Question 5

I have never been in the position of having to identify a main home. I am a part owner of the property in [name of town] where my mother lives, where I have my own bedroom, keep my clothes, store my personal things and receive post. I have served on the management committee of the building for some ten years, being chairman for about six. I would consider this my main home although my schedule means I spend a limited amount of my time there. As a single person with no family of my own my work and lifestyle for some thirty plus years has been one of planes, cars and hotels.

I have always been a very visible “Uncle Ian” in Bromsgrove. Where possible we have taken my nephew to many constituency events where I kept an eye on him while my sister socialised. Many people have assumed I was her husband. It does not surprise me that people also assumed I lived there.

Question 6

Shortly after my nephew was born and while I was helping out it was clear to me that my sister would have difficulty when she was alone in the constituency with her child. Although I was busy much of the working week I was generally free at weekends and I offered to give her a guarantee of a babysitter in the constituency at the weekend. [Comments which the witness asked not to be included and which have not been taken into account in this inquiry] It was therefore a standing arrangement. As time went by, babysitter became child minder.

I had seen the difficulty of juggling nannies, of changes of schedule, of nannies cancelling, of events running over time, of getting nanny taxis and the headache that added to organising a weekend in the constituency. An ad hoc arrangement for childcare was exactly what an MP did not want as it meant a constant distraction each week as to the arrangements for the weekend. I took that burden off my sister. My flexibility being single and our sibling relationship removed most of those obstacles and it seemed to be an ideal and eminently sensible arrangement.

The arrangement worked well and there was a mutual desire for it to continue in parliamentary recesses but then it had to work around my schedule. However the pace of work was more relaxed in a recess and if I could

130 Mr Andrew Mackay and Ms Julie Kirkbride

not help then it was often possible for my sister to take her son with her or easier to find someone else to cover since it tended to be during daylight hours only.

[Comments which the witness asked not to be included and which have not been taken into account in this inquiry]

My sister, being married to another MP with constituency obligations of his own, was effectively a single mother MP. She could not have the customary support of her husband when she was undertaking her parliamentary duties.

A single MP with a child needs a lot of quality support and backup if she is to do a good job in her constituency. I was that guaranteed reliable backup. The communication and understanding between siblings beats that of any childminder. She could be sure her son had the best of care. I lost count of the number of times someone said to me “I don’t know what Julie would do without you”. Everyone has said she was an excellent constituency MP and I like to think I played some part in that.

[Comments which the witness asked not to be included and which have not been taken into account in this inquiry]

11 March 2010

68. Letter to Mr Ian Kirkbride from the Commissioner, 15 March 2010

Thank you for your letter of 11 March, responding to mine of 17 February, with your assistance in my consideration of this complaint. I was most grateful for your help and for this response.

There was one point on which I hope you may be able to help me a little further. It relates to your overnight stays in the constituency when you were not there for childcare purposes but were preparing to support Ms Kirkbride and her staff on IT matters, including the maintenance of her website. I appreciate that you did not keep detailed diaries and so cannot give me precise figures. But it would be very helpful if I could have some sense of how often in a month, or a year, you would spend the day or the overnight in the property for this additional purpose. For example, would it have been one Sunday night a month, or was it less frequent than that? I need to ask you because it may be helpful to me, in coming to a conclusion on this matter, to know whether you regularly used this property for this purpose, or whether it was occasional, or even very occasional.

It would be very helpful if you could let me have a response to this final point within the next week or so. In the meantime, I will be showing your letter to Ms Kirkbride and including it with the papers on which I am consulting the House authorities. In due course, as you know, this correspondence is likely to be published once my inquiry is completed.

Thank you again for your help and I look forward to hearing from you.

15 March 2010

69. Letter to the Commissioner from Mr Ian Kirkbride, 26 March 2010

Having recently returned to [name of town] I am now in receipt of your letter of 15 March.

On the point that you raise, I would characterise my time in the constituency property as “occasional”.

...

26 March 2010

70. Letter to the Commissioner from Ms Julie Kirkbride, 4 March 2010

I write in response to the further information you seek in your letter of 17th February.

Mr Andrew Mackay and Ms Julie Kirkbride 131

I note the reprise of the issues you seek to resolve in your second paragraph as a result of [this] complaint. [The complainant’s] claim that my brother lived in my constituency property was based on two pieces of “evidence” he supplied which I addressed in my previous correspondence and to which the answers, I believe, demolish the vexatious accusation that is being made.

Furthermore, the issue of the additional mortgage I claimed to build a third bedroom to be used by a child carer which may—or may not be—my brother at any one time was precisely the issue addressed by Sir Thomas Legg and Sir Paul Kennedy. I hope you will note the conclusion reached by Sir Paul Kennedy which was as follows:

“I accept that by 2008 there were restrictions on transactions with family members. ACA could not be used to meet the costs of a mortgage or for leasing accommodation from a partner or family member, but I see no reason why that should have been extended to prevent you from recovering the costs of an additional mortgage required to enable you to provide a child carer's bedroom just because at that time it was envisaged that the child carer would normally be your brother.

“Accordingly, I am satisfied that there are special reasons in your individual case...”

As you know, I feel strongly that I am being subjected to triple jeopardy and I hope that in the light of this adjudication by Sir Paul that you will feel that this particular issue of the extension of my mortgage has been decided.

In relation to your third paragraph, I think that few busy working mothers keep a detailed note about who is looking after their child at any one time—life just isn't like that. I also hope that you noted that if there were any occasions when my brother did stay in my constituency property in my absence it was in order that he could use the office equipment located there to maintain my website (an activity he did for free and which is charged to the taxpayer by most MPs) or because he was helping my Bromsgrove staff with ICT support.

I will now turn the specific questions you ask.

Firstly, you ask who covered childcare on other nights of the week during recesses. I answered that point in my response to your letter dated January 26th. I quote: “As I have said before, I would have someone resident in [the Bromsgrove property] to provide care for my son at the weekends and during House of Commons recesses so that I was free to carry out my parliamentary duties. This person was normally my brother, but I have no record of the nights he spent there, nor records of when another person fulfilled his childcaring role.”

Secondly, you ask about payment. I have never paid my brother in cash or in kind, for the care of my son. He looks after my son because he loves us both and he has the time to do it. When my brother cannot help me in Bromsgrove I ask my mother-in-law or friends I have made in the Bromsgrove Conservative Association to step in. I normally repay their kindness with a box of chocolates or a bunch of flowers.

In London I pay our au pair a cash sum every week.

Thirdly, in London the main carer for our child is an au pair who similarly offers a flexible arrangement given the unpredictability of our working life. However, my brother also comes to London to help. If my husband and I are going abroad we feel it inappropriate to leave an inexperienced au pair in charge of [our son] for a prolonged period. Equally, it is unfair to ask our au pair to work seven days a week without a break. It might also be the case that our au pair would wish to return home (before Christmas or in the summer) before the start of the parliamentary recess and so I might ask my brother if he would cover childcare in London during these periods when he was in a position to do so given his other commitments.

Fourthly, the normal pattern of my overnight stays were to be in London during the week when the House was sitting, travelling to Bromsgrove on Friday night and returning to London on Sunday to ensure [our son] could be at school on Monday morning. Where parliamentary recesses and school holidays were coterminous we would be in Bromsgrove when not on holiday.

Fifthly, I find the question that my brother should pay me—either in cash or kind—for the time he spent at my constituency property to enable me to perform my parliamentary duties bizarre. Just for the record, can I make clear that he certainly did not pay me in cash or kind for anything, but I do not see how anyone would

132 Mr Andrew Mackay and Ms Julie Kirkbride

think that it might be appropriate for him to do so in the circumstances. We do buy each other Christmas presents which seems a reasonable thing for a brother and sister to do!

In conclusion, can I repeat that as a female MP, married to another, who had a child whilst a Member of Parliament, I found myself in a somewhat unique position. I had an inexhaustible and unpredictable demand for childcare and a duty to my child to act in his best interests as his mother. I therefore felt fortunate that my brother was able to help me to look after my son which obviated the inevitable guilt I would otherwise have felt able to spend with him. Indeed, had it not been for my brother's help I would have felt that it was not in my child's best interests for me to carry on as the MP for Bromsgrove.

I hope my letter now fully answers your outstanding inquiries and that I can look forward to your dismissing the complaint.

4 March 2010

71. Letter to the Director of Operations, Department of Resources, from the Commissioner, 15 March 2010

I would welcome your advice and comments on a complaint I have received against Ms Julie Kirkbride MP in respect of the use by her brother of her constituency property in Bromsgrove against which she made claims from the Additional Costs Allowances.

In essence, the complaint is that Ms Kirkbride made claims against her Additional Costs Allowance for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing her parliamentary duties. I have taken the period of the complaint to cover the financial years from 2004–05 to 2008–09 inclusive.

I attach a copy of the relevant extracts from the complainant’s letters of 23151 and 30 October, together with a copy of the relevant press reports he appended. I enclose also a copy of the Registrar’s letter of 28 October152 to which the complainant referred; a copy of the response from Ms Kirkbride of 21 January (which was delayed after Ms Kirkbride raised with me concerns about double jeopardy with Sir Thomas Legg’s audit); my letter to her of 26 January; her response of 11 February; my letter to her of 17 February; her response of 4 March; and my letter to her of 9 March. In addition, I enclose a copy of my letter to her brother of 17 February, his response of 11 March, and my letter to him of 15 March. (I will send you his response to this when I receive it.)

I would welcome your comments and advice on the this complaint, taking account, as necessary, of the findings of Sir Thomas Legg’s audit and the appeal made to Sir Paul Kennedy, the results of which have, of course, been published. In particular, it would be helpful to know whether the Department considers that the use of the accommodation by Ms Kirkbride’s brother to provide childcare support (and some IT support) was within the Green Book rules, taking account of the rule that claims may not be made for the living costs of anyone other than the Member. How would the Department normally expect to apply this provision in the case of people supporting a Member with childcare?

Secondly, it would be helpful to know, in the circumstances described by Ms Kirkbride and her brother, whether it was within the rules of the House for Ms Kirkbride to claim for the interest on a mortgage increased to enable her to build a third bedroom in the constituency property, taking account of the relevant Green Book rules at the time this initial mortgage was claimed for.

Thirdly, it would be helpful if you could give me some factual information about Ms Kirkbride’s claims, including her ACA claims from 2004–05 to 2008–09 inclusive by category, and if you could identify when Ms Kirkbride began to claim for the interest on the additional mortgage for the work on the additional bedroom.

151 Not included in the written evidence – see WE 1 152 Not included in the written evidence – see WE 1

Mr Andrew Mackay and Ms Julie Kirkbride 133

Finally, it would be helpful if you could let me know of the details of any discussions which the Department has had with Ms Kirkbride, or someone on her behalf, about her childcare arrangements or her plans for extending her constituency property.

Any other points you may wish to make would, of course, be very welcome.

If you could let me have a response to this letter within the next three weeks, I would be most grateful. Thank you for your help.

15 March 2010

72. Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 25 March 2010

Thank you for your letter of 15 March to [the Director of Operations]. I am replying on behalf of the Department of Resources.

I deal first with the use of Ms Kirkbride's additional home by her brother. The Department was not aware that Mr Kirkbride stayed at the constituency home. In the Green Books which were in force from 2005 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. They were not permitted to claim for the mortgage costs of any part of the property occupied by a lodger or paying guest unless this was offset against their claim. However, where no rent was paid, there was no rule which governed who might or might not live in, or stay at, a home on which ACA was claimed.

At the time, the Department would not therefore have been concerned if someone other than the Member used an ACA-funded property for occasional stays. If the Department had become aware of a more regular arrangement, it might have sought more information from the Member. But it would have been unlikely to have been concerned if the person staying in the property from time to time was not paying rent but was providing a function that enabled the Member to carry out his or her duties more effectively.

From the precedents of recent cases considered by the Committee on Standards and Privileges, it is clear that the test which should be applied to cases when another person occupies a second home is whether the expenditure for which claims are made is wholly and exclusively incurred in connection with the Member's parliamentary duties. Where another person's living costs are subsidised by ACA/PAAE payments made to a Member, or that person receives a benefit, it is also clear that this is outside the rules. In the case considered in the Committee's Eighth Report of the current Session, the Committee concluded that, even though it was the Member who had received a personal benefit (in this case, emotional support) from a family member staying in their second home, the Member should nevertheless repay a proportion of the amounts she had received (although in this case, the family member's use of the second home was “substantial, regular and sustained”).153

There seem to me to be special elements in the current case. First, Mr Kirkbride's living costs do not seem to me to have been reduced to any substantial degree by his occupation of Ms Kirkbride's second home. He tells you that his lifestyle was peripatetic, but that he was part-owner of another property which he regarded as his main home. Of course, there will have been some savings to him at the margin because of the utilities and so on that he used at Ms Kirkbride's property, and it would be possible to argue that she should have abated her claims in respect of the times he was present. But if one pursued this argument to its logical conclusion, every Member ought to have abated his or her ACA/PAAE claims for every guest who stayed at his or her second home—or indeed for every visitor. I would therefore view the element of Ms Kirkbride’s claims which met the costs of accommodating Mr Kirkbride as being only at the margin claims in respect of his living costs.

153 Committee on Standards and Privileges, Eighth Report of Session 2009–10, HC 353, para 9

134 Mr Andrew Mackay and Ms Julie Kirkbride

It is also clear that it was Ms Kirkbride who received the benefit from Mr Kirkbride's presence in her second home, and that this was a benefit which enabled her to discharge her parliamentary role: his presence enabled her to perform her constituency duties. Mr Kirkbride thus performed a service rather than obtaining a benefit. That he stayed overnight was directly related to the service he performed. I would be surprised if other Members have not regularly asked babysitters to stay overnight in their second homes or have had nannies who have done so. Others may have employed residential staff such as housekeepers. Mr Kirkbride's kinship with Ms Kirkbride can be disregarded for these purposes, except that it meant that the consideration which Mr Kirkbride received for his services was not a material one and, as both she and he have said, there would have been no perceived need for any formal record of the arrangements they came to as brother and sister.

I should add that the complainant is correct in asserting that the provision of childcare is not claimable against parliamentary allowances. However, it is relevant to mention in this context that the recent Speaker's Conference on Representation has concluded that more needs to be done to attract parents with young children to the House. In particular, the Conference concluded that “Decisions on childcare are a matter of personal choice and for many MPs their arrangements will be essential to their ability to carry out their parliamentary duties. Parents will choose to have their children looked after in their homes (in the constituency and/or in London) by other family members, by nannies or registered childminders, or in a nursery or crèche. All of these choices are equally valid and should be equally respected by the parliamentary authorities.” (para 271)154

Mr Kirkbride also stayed occasionally at Ms Kirkbride's additional home in order to help her with her parliamentary ICT needs. There is perhaps one difference between these stays and the stays for childcare purposes: in the case of childcare, overnight stays were intrinsic to the help offered, whereas overnight stays in order to help with constituency ICT were incidental. However, if Mr Kirkbride had charged his sister for his ICT services (no such charges were made), he could have claimed for accommodation as part of those charges and Ms Kirkbride could have claimed these charges against her IEP. In that sense, providing overnight accommodation could be regarded as having saved public funds.

You also ask about the claims Ms Kirkbride made in respect of her extended mortgage. An additional loan of £50,000 was taken out in May 2008 to cover improvements to Ms Kirkbride's additional home. This was reflected in increased claims for mortgage interest from June 2008. The 2006 version of the Green Book states that “re-mortgaging is permissible if moving to different accommodation or if repairing or improving your existing ACA home. Members should consult the DFA before making any major commitments” (para 3.73).

There would have been no reason not to permit claims in respect of an extended mortgage to allow for extra accommodation for the needs of a Member's dependent child. There is no correspondence from the Department to Ms Kirkbride to confirm the arrangement, although she refers to the advice given to her in her letter to the Department of 16th June 2008, which we have on file. It appears likely that the agreement was made orally, and the absence of any comment on Ms Kirkbride's letter implies that the Department agreed with her.

You will be aware that Sir Thomas Legg regarded the additional mortgage as conflicted because the payments “were used to provide accommodation for a non-dependent family member”. However, Sir Paul Kennedy regarded claims in respect of the extension of the mortgage to be permissible because it was an extension to permit an improvement to the property which was allowed under the rules, and because it was not relevant that the carer for whom the extra room was provided would normally be the brother of Ms Kirkbride.155

You may also want to know that there have been no claims made in respect of the property from any allowance other than ACA/PAAE. Furthermore, no claims were made for services provided by Mr Kirkbride, either in respect of childminding or (as I mention above) for ICT support. Some ICT equipment, software and peripherals were bought by Mr Kirkbride and delivered to him at Ms Kirkbride's second home. Ms Kirkbride subsequently claimed back the relevant costs from her IEP. This took place sporadically between 2004/2005 and 2008/2009.

154 Speaker’s Conference on Parliamentary Representation, Final Report of Session 2009-10, HC 239-I, para 271. Ms Kirkbride was a member of this Conference. 155 WE 61, WE 62

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We have no details on file of any discussions which the Department had with Ms Kirkbride, or someone on her behalf, about her childcare arrangements or plans for extending her constituency property.

A summary detailing Ms Kirkbride’s ACA/PAAE claims from 2004/5 to 2008/9 is attached.156

Please let me know if I can help further.

25 March 2010

73. Summary of Ms Julie Kirkbride’s ACA/PAAE claims, 2004–05 to 2008–09 (figures from the Department of Resources)

Year Mortgage interest (£) Other items (£) Total (£) 2004–05 8,950 11,951 20,901 2005–06 9,288 12,325 21,613 2006–07 10,121 11,623 21,744 2007–08 11,427 11,656 23,083 2008–09 13,914 9,518 23,432

25 March 2010

74. Letter to the Department of Finance and Administration from Ms Julie Kirkbride, 16 June 2008

Following advice from [an official] in the Fees Office, please find enclosed a new mortgage interest statement for my ACA.

The extended mortgage was taken out to pay for the building of an extra bedroom at our property [in Bromsgrove], accommodating the needs of our growing family. I trust this is all in order. I will be making claims accordingly.

16 June 2008

75. Letter to Ms Julie Kirkbride from the Commissioner, 29 March 2010

I last wrote to you on 15 March about this complaint in respect of certain aspects of your ACA claims for your constituency home. I said then that I was seeking the advice of the Department of Resources.

I have now heard back from the Department. I attach a copy of my letter to them of 15 March, and their response of 25 March.

As you will see, the Department analyses Departmental policy in respect of the use of a parliamentary-funded home by others, and in respect of the mortgage interest you claimed on your additional mortgage to fund the extension of the property.

I would welcome any comments you may wish to make on the Department’s letter, and enclosure.

I have also heard back from your brother on the further follow-up point I put to him on 15 March about his pattern of use of your constituency home in relation to his work to support you and your staff on IT matters. I enclose a further copy of my letter to him, and a copy of his response of 26 March.

156 Not included in the written evidence. A summary is at WE 73.

136 Mr Andrew Mackay and Ms Julie Kirkbride

As you will see, your brother has responded by saying that he would characterise his time in your constituency property as “occasional”. I would welcome any comments you may wish to make on your brother’s further letter.

I need now to consider how best to proceed. While I have considered this complaint separately from that of the complaint against your husband, the Rt Hon Andrew Mackay MP, I think I have reached the point where I have to recognise that there is a relationship between your arrangements and his. This was recognised, I think, in the findings of Sir Paul Kennedy on your appeals. In particular, if I were to find that your constituency home was also your husband’s main home, then I would need to address the question of whether it was within the rules, including the spirit of the rules, that parliamentary resources should have been used, in effect, for an extension to his main home.

I regret, therefore, that, subject to any points you may wish to put to me, I will need to resolve these complaints in tandem and at the same time. I have not reached the point of resolution in respect of the complaint against Mr Mackay, but I will let you know as soon as that point is reached.

29 March 2010

76. Letter to Ms Julie Kirkbride from the Commissioner, 18 May 2010

Now that the new Parliament has assembled, I am writing to confirm that I am resuming my work on this complaint, and to ask whether you could give me the name and address of the gardener at your Bromsgrove property.

During the Dissolution of Parliament, I reviewed the evidence which I have collected in relation to this complaint. I see from the complainant’s initial letter of 30 October that he refers to evidence in an unidentified newspaper article which suggests that there is a witness who believes that your brother was a permanent resident at your Bromsgrove property. The complainant could not identify the press report. I have subsequently identified it as being in the attached article from the News of the World of 24 May 2009.157

I recognise that this evidence is directly contrary to the evidence which you and your brother have provided. I think that, having identified the article referred to by the complainant, I do need to check, if at all possible, with the reported evidence of the gardener. I would, therefore, be grateful if you could as soon as possible provide me with the name and address of that potential witness so that I can write to him about it.

Finally, when I wrote to you about this on 29 March, I noted that I would need to consider this complaint alongside the complaint against your husband, Mr Andrew Mackay. I will be seeing Mr Mackay early next month, and hope that that will be enable me to bring both inquiries to an conclusion. I will be in touch with you after I have seen Mr Mackay.

If you could let me have the information about your gardener within the next few days, I would be most grateful.

18 May 2010

77. Extract from article in the News of the World, 24 May 2009

Double dipping MPs in another dodgy deal

THE husband and wife Tory MPs who have been “double-dipping” expenses so the taxpayer funds BOTH their homes were last night caught up in a new scandal.

Julie Kirkbride and Andrew Mackay are letting her brother live rent-free in their mansion flat that WE pay for, the News of the World can reveal.

157 WE 77

Mr Andrew Mackay and Ms Julie Kirkbride 137

And the brother, Ian Kirkbride, is even listed as running a BUSINESS from the apartment in a stately home near Bromsgrove, Worcs.

Last night, as Mackay, 59, agreed to stand down at the next election after a talking-to from party leader David Cameron, his wife spluttered: “Ian spends a lot of time there because he's the carer of my child.

“I couldn't cope without that help.”

She insisted her 59-year-old brother does not pay any rent and only uses the property when her son is home.

Rules

But a gardener at the country estate says he's there ALL the time . . . and son [name], aged nine, is at school all week 116 miles away in London.

When questioned, Ms Kirkbride, 48, admitted: “There are times when Ian's there and not looking after my son.” And she revealed she also has an au pair.

Last night the MP claimed she had done nothing wrong and her brother only stayed with her from “time to time”.

But in two interviews with the News of the World she failed to explain why he filed the address as his main residence on forms he submitted to Companies House for his business.

He is also listed there not as a child carer, but a director and IT consultant.

Meanwhile, Ms Kirkbride has been claiming more than £1,000 a month in mortgage payments on the apartment which she named as her second home—plus thousands more for maintenance.

Under Commons rules only an MP's direct family—spouses and children—are supposed to share the second home. Last June she wrote to Parliament’s Fees Office telling them she had been forced to extend the apartment “accommodating the needs of our growing family.”

Ms Kirkbride told us: “If you want more women with children to go into Parliament we can't manage without carers and that’s who Ian is. He does it mainly in Bromsgrove.”

There was no sign of son [name] in her [car] when she left the property yesterday morning. The schoolboy is also listed as a shareholder in his uncle's company [name].

But Mrs Kirkbride claimed: “It was a paper company, it never traded.” However, she did confirm her brother had two other directorships in companies based in another county and also looked after her aged mother in [name of town].

...

The couple bought the three-bedroom apartment [address] near Bromsgrove, in 1997. Commons expenses files show that, in 2005, Ms Kirkbride declared the flat her second home and collected £21,613 in expenses.

Her husband—MP for Bracknell, Berks—told the Fees Office it was his MAIN home. Under Commons rules, MPs are supposed to pay for one home themselves, while the taxpayer picks up the tab for their second. But between 2005 and 2008 Ms Kirkbride claimed £66,763 on the exclusive [Bromsgrove] apartment.

At the same time Mr Mackay received £66,192 for their London house, claiming that as his SECOND home.

In one year alone Ms Kirkbride claimed £2,169 for cleaning, £2,466 for service charges, £1,545 on food, £501 on curtains, £639 on a bed and £828 for carpets at their converted Georgian flat.

Her husband claimed more than £1,000 a month in mortgage interest payments on their joint Westminster flat.

138 Mr Andrew Mackay and Ms Julie Kirkbride

Ms Kirkbride used her Additional Costs Allowance to claim more than £900 a month on paying off the mortgage for their family home near her constituency. That went up last year after she increased their mortgage by £50,000 to pay for an extension.

They even claimed for each other's travel costs, with Kirkbride claiming £1,392 under the category “spouse travel” while Mackay claimed £408.

Scrutiny

Last year, the Bromsgrove MP took out another £50,000 mortgage on the property and her mortgage interest claims on the home loan increased from £900 to £1,171.

When she wrote to the Fees Office to explain her increased mortgage charges, they replied saying the letter “suggests her designated second home is in fact her primary residence.” But in all her correspondence she failed to mention her brother was living there.

When initially confronted over double-dipping, Ms Kirkbride defended her expenses as “both permissible and reasonable.” She added: “I believe that I was operating perfectly properly within the system.”

24 May 2009

78. Letter to the Commissioner from Ms Julie Kirkbride, 26 May 2010

I write to acknowledge receipt of your letters of the 29th March and the 18th May 2010.

Can I begin by saying that I was particularly pleased by your letter of the 29th March in which you enclosed a response from the Fees Office to the allegations made against me. It seemed to me that the thoughtful and sympathetic reply from [the Director of Strategic Projects] entirely vindicates my position and even draws attention to the fact that my brother's help for me as a Member of Parliament actually saved the taxpayer money!

Turning now to your recent letter of the 18th May in which you ask about the claims made about my brother by an unnamed “gardener” in the News of the World. I would begin by pointing out that the property, [address], is described as a “country estate” in the article—with the connotation that there are a team of gardeners managing extensive grounds—when in fact it is a large old house, divided into flats, surrounded by a not very large garden. Moreover, the fact that the “gardener” is unnamed would suggest to me that the quote is made up. I am sure that in the course of your other inquiries you will have come across situations in which reports in newspaper articles have been found to be not entirely accurate, or even true.

The position with regard to gardening at [address] is that the bulk of it is done by the residents in order to keep the service charge as low as possible. A contract does exist for the cutting of the grass when necessary, but even I, as a resident, am not aware of a recognisable “gardener” figure.

As such, I cannot help your inquiries any further.

26 May 2010

79. Letter to Ms Julie Kirkbride from the Commissioner, 3 June 2010

Thank you for your letter of 26 May in response to mine of 29 March and 18 May. I am most grateful for such a prompt reply.

I shall take it that you have no comments to make on your brother’s further letter to me of 26 March, and that you are unable to identify anyone corresponding to the “gardener” described by the News of the World who might offer me further evidence on your brother’s stays in the Bromsgrove property.

3 June 2010

Mr Andrew Mackay and Ms Julie Kirkbride 139

Appendix 2: Email to the Committee from Mr Andrew Mackay, 15 October, 2010

Thank you for sending me the Parliamentary Commissioner’s Memorandum. Whilst not wishing to give formal evidence I would appreciate the Clerk ensuring Members of your Committee see this e-mail.

I am pleased to note that in his conclusions the Commissioner:—

• accepts that I did not seek, at any stage, to disguise my ACA arrangements.(231)

• states it is reasonable to conclude that at all times my wife believed we were acting on the advice of the then Head of the Fees Office.(231)

• states that when a member has more than one home their main home is normally where they spend the most nights and he accepts my estimate that I spent slightly more nights in our Bromsgrove home. (237)

• believes I have paid a high price for a misjudgement (250)

• states it is perhaps understandable that as a busy politican I never reviewed the original decision.(250)

• notes that my arrangements were openly declared and the Department fairly accepted that it was reasonable that from their silence there was no problem. (247)

I would finally draw the Committee’s attention to the Factual Section of the Commissioner’s Memorandum and my e-mail to him on 12th September where I have set out why I believe I acted within the rules and in good faith.

140 Mr Andrew Mackay and Ms Julie Kirkbride

Formal minutes

Tuesday 19 October 2010

Members present: Mr Kevin Barron, in the Chair Sir Paul Beresford Mr Jim Cunningham Annette Brooke Mr Oliver Heald Mr Tom Clarke Heather Wheeler

Draft Report (Mr Andrew Mackay and Ms Julie Kirkbride), proposed by the Chair, brought up and read.

Ordered, That the Chair’s draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 10 read and agreed to.

Paragraph 11 read, amended and agreed to.

Paragraphs 12 to 29 read and agreed to.

Paragraph 30 read, amended and agreed to.

Paragraphs 31 to 33 read and agreed to.

Paragraph 34 read, amended and agreed to.

Paragraphs 35 to 40 read and agreed to.

Two Papers were appended to the Report.

Resolved, That the Report, as amended, be the Fifth Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

[Adjourned till Tuesday 2 November at 9.30 am