House of Commons Committee on Standards and Privileges

Mr Harry Cohen Review by Sir Paul Kennedy

Thirteenth Report of Session 2010–11

Report and Appendix, together with formal minutes

Ordered by the House of Commons to be printed 15 March 2011

HC 883

Published on 17 March 2011 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) Tom Blenkinsop MP (Labour, Middlesbrough South & East Cleveland) 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) Matthew Hancock MP (Conservative, West Suffolk) Mr Oliver Heald MP (Conservative, North East Hertfordshire) 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 Harry Cohen — Review by Sir Paul Kennedy 1

Contents

Report Page

Mr Harry Cohen — Review by Sir Paul Kennedy 2

Appendix: Review by Sir Paul Kennedy 3

Appendices to the Review: 21 Appendix I 21 Extract from the Department of Resources EAT telephone log 21 Appendix II 22 Terms of reference for the review of the Seventh Report, 2009–10 22 Appendix III 23 (i) Submission by Mr Harry Cohen 23 (ii) Submission by the Department of Resources, House of Commons 34 (iii) Letter from the Secretary to the Trustees of the Parliamentary Contributory Pension Fund 42 (iv) Further Submission by Mr Harry Cohen 43

Formal Minutes 51

2 Mr Harry Cohen — Review by Sir Paul Kennedy

Mr Harry Cohen — Review by Sir Paul Kennedy

1. We append a report from the Rt hon Sir Paul Kennedy of his review of the recommendations made in the Committee’s Seventh Report of Session 2009–10, on Mr Harry Cohen, the former Member for Leyton and Wanstead. The Committee is grateful to Sir Paul and to all those who assisted him. We now regard this matter as closed.

Mr Harry Cohen — Review by Sir Paul Kennedy 3

Appendix: Review by Sir Paul Kennedy

Review by the Rt Hon Sir Paul Kennedy

of the conclusion of the Standards and Privileges Committee in its Seventh Report of Session 2009-10 on the case of Mr Harry Cohen, a former Member of the House of Commons

March 2011

4 Mr Harry Cohen — Review by Sir Paul Kennedy

TABLE OF CONTENTS

THE REVIEW Page

1. Introduction 5 2. Subsequent Developments 8 3. Terms of Reference 8 4. The Issue and the Material 9 5. The History 9 6. The Telephone Note of 27 March 2009 13 7. Loss of Resettlement Grant and Pension 16 8. Factual Conclusions 18 9. Culpability and Sanction 19

APPENDICES

I. Extract from Department of Resources Telephone Log 21

II. Terms of Reference 22

III. (i) Submission by Mr Harry Cohen 23

(ii) Submission by the Department of Resources, House of Commons 34

(iii) Letter from the Secretary to the Trustees of the Parliamentary Contributory Pension Fund 42

(iv) Further Submission by Mr Harry Cohen 43

Mr Harry Cohen — Review by Sir Paul Kennedy 5

Review by Sir Paul Kennedy

1. Introduction 1.(i) Mr Harry Cohen was a Member of Parliament from 1983 until May 2010. On 29 March 2009 the Mail on Sunday published an article in which it was alleged that Mr Cohen, as Member of Parliament for Leyton and Wanstead, had, over several years, claimed as expenses a second home allowance to which he was not entitled. On the same day a letter of complaint was written to the Parliamentary Commissioner for Standards (Mr John Lyon) drawing his attention to the newspaper article and inviting him to investigate. A copy of the letter was sent to the Metropolitan Police. Over the ensuing nine months the Parliamentary Commissioner conducted an investigation which is accepted to have been thorough. It included extensive correspondence and an interview with Mr Cohen, and fairly extensive correspondence with the House of Commons Department of Resources, which is the department responsible for dealing with claims for expenses made by Members of Parliament. On 13 January 2010 the Commissioner produced for the House of Commons Committee on Standards and Privileges a 45 page memorandum with 55 pages of exhibits containing most of the correspondence, and other documents to which the memorandum referred. The first 135 paragraphs of the memorandum set out the progress of the investigation and summarized the documentation. Then, at paragraphs 136 to168, the Commissioner sets out his conclusions. At paragraph 138 he asked himself three questions, namely: (1) Should Mr Cohen have registered his Colchester property in the Register of Members’ Financial Interests? (2) Did Mr Cohen have more than one home for the purposes of his claims against parliamentary allowances throughout the seven-year period? (3) If he had more than one home, did he correctly identify throughout the period which was his main home? 1.(ii) It is worth noting at the outset that question (3) only needed to be considered if question (2) was answered in the affirmative. The Colchester property has consistently been described by Mr Cohen as his main home, and he also, at all material times, owned a house in his constituency – initially in Leyton and later in Wanstead. 1.(iii) The Commissioner answered the first question at paragraph 143 thus: “Mr Cohen was in breach of the rules in relation to the registration of Members’ financial interests in not registering his Colchester house and the fact that he received substantial rental income from it in each year from 2004 to 2008 inclusive.” 1.(iv) That conclusion is not in issue. Mr Cohen accepts that he was in breach of the duty to register. I therefore turn to question (2) which the Commissioner answered at paragraph 154 : “Mr Cohen was in breach of the rules of the House in identifying for allowance purposes his house in Colchester as one of his two homes from April 2004 to August

6 Mr Harry Cohen — Review by Sir Paul Kennedy

2008 because his use of the property was constrained by regular and substantial periods when it was let to others.” 1.(v) That is a fundamental conclusion which was later adopted by the Committee, and approved by the House. It is based on facts which are not in dispute about the extent of the periods for which the Colchester house was not available for Mr Cohen’s use. It does not depend on Mr Cohen’s perceptions, or on any advice that he may have received. Such matters only arise for consideration in relation to sanction. 1.(vi) Despite the conclusion which he reached in relation to question (2) – and in case the Committee did not share that conclusion—the Commissioner did go on to consider question (3) and ended that consideration thus : “164. Mr Cohen has argued that he consulted the House authorities about his arrangements at various times in the last seven years. The Department of Resources accepts that he indeed regularly consulted them about expenses matters, but they have no record or recollection of discussions about whether it was within the rules for Mr Cohen to let out his main home, as he has suggested. It is not possible at this remove, and in the absence of documentary evidence, definitively to resolve this difference of recollection. I think it possible, on the balance of probabilities, that Mr Cohen may have made some mention to the House authorities about letting out his Colchester home. The fact that he registered the property in the Register of Members’ Interests in 2001 and again made a partial registration from 2005 to 2008 suggests that he was not attempting to disguise the arrangement. I am more doubtful whether any mention he made of these arrangements to the Department of Resources was sufficiently full or clear for the Department to have given considered advice. Whatever may have been their attitude at the time to temporary letting arrangements, Mr Cohen’s arrangements were manifestly not temporary. There is not therefore sufficient evidence for me to conclude that the Department gave Mr Cohen flawed advice and I think it unlikely that it did so. In any event, Members must be personally responsible for their actions under the rules. I do not believe that the Department has, as Mr Cohen has suggested, failed in their duty to him in not advising him until June 2008 that his arrangements for letting his Colchester home should be terminated. 165. My conclusion, therefore, is that Mr Cohen was in breach of the rules of the House from April 2004 to August 2008 in identifying his property in Colchester as his main home and so making claims against the Additional Costs Allowance for his home in his constituency. In respect of that period, therefore, I uphold this complaint.” 1.(vii) The Commissioner then set out his overall conclusion, and, at paragraph 168, moved on to deal with sanction, saying— “I consider that Mr Cohen’s arrangements for his properties represented a particularly serious breach of the rules of the House. It was a breach sustained over some four and a half years. Had Mr Cohen considered his position more objectively and had he more fully and explicitly consulted the House authorities, the breach could have been avoided. I recognize the difficult circumstances through which Mr Cohen has lived over this period, and I sympathize with his wife’s continuing episodes of ill-health,

Mr Harry Cohen — Review by Sir Paul Kennedy 7

which clearly put a heavy strain on them both. But the consequence of Mr Cohen’s decisions was that he continued making substantial claims against his Additional Costs Allowance for his constituency home. Those claims, in my view, were not in accordance with the rules of the House and they resulted therefore in his receiving payments to which he was not entitled.” 1.(viii) In response to the Commissioner’s memorandum Mr Cohen made a written statement for the attention of the Standards and Privileges Committee which considered both the memorandum and the statement in its report in relation to Mr Cohen, which was published on 22 January 2010. It accepted the conclusions of the Commissioner, saying at paragraph 16: “From April 2004 to August 2008 Mr Cohen’s house in Colchester could not be regarded as his home for the purposes of claiming Parliamentary Allowances.” At paragraph 17 the Committee said : “Mr Cohen’s constituency home was his main home—and for long periods his only home—throughout the four and a half years when he was making little use of the house in Colchester. In our view, Mr Cohen would have been well-advised to claim London Supplement during the period when the house was let.” At paragraphs 18 and 19 the Committee said :

“… Mr Cohen might have gained a clearer understanding of the rules if he had provided the House authorities with fuller information about his arrangements. 19. We calculate that during the period when his Colchester house was let between April 2004 and August 2008, Mr Cohen claimed and received more than £70,000 from his Additional Costs Allowance. Over the same period, as a Member for an outer London constituency with only one home, Mr Cohen could instead have claimed about £9,000 in London Supplement. Taking the latter sum from the former, we conclude that Mr Cohen received over £60,000 from Parliamentary allowances to which he was not entitled.” 1.(ix) When he ceased to be a Member of Parliament in 2010 Mr Cohen was due to receive a resettlement grant of about £65,000 and at paragraph 22 the Committee set out its recommendation— “We recommend that for committing a particularly serious breach of the rules on claiming Parliamentary allowances Mr Cohen be required to apologise by means of a personal statement on the floor of the House. We further recommend that the full amount of resettlement grant which would be payable to Mr Cohen when he leaves the House be withheld.” 1.(x) On 29 January 2010 Mr Cohen made his apology to the House of Commons saying – “I am here to apologise to the House. I do so without proviso. In my statement to the Members of the Standards and Privileges Committee I said that I would concur with whatever decision was made by them, and I stand by my word. There was no intention of wrong-doing on my part, and I am sorry for my assumption that I was eligible to claim as I did, which was wrong.”

8 Mr Harry Cohen — Review by Sir Paul Kennedy

1.(xi) On 1 February 2010 the House of Commons approved the report of the Standards and Privileges Committee and endorsed its recommendations, so Mr Cohen was deprived of the whole of his resettlement grant.

2. Subsequent developments 2.(i) After the House of Commons had made its decision, the police began to make enquiries, and those enquiries revealed an entry in a telephone log maintained by the Department of Resources. The entry, which had not been drawn to the attention of the Commissioner or the Committee, is dated 27 March 2009, and appears on a page dealing with telephone enquiries made by Mr Cohen. That page is reproduced as Appendix I to this Review. In the entry Mr Cohen’s query is recorded as follows : “Harry has a second home and a main home. He rents out some his main home. Does that break the rules?” That record of the query is preceded by the word “Charlie”, suggesting that the recipient had to consult someone else, and the advice given is noted as : “He is not claiming allowances on his main homes, he claims them on his second home. What he does with his main home has nothing to do with the allowances or the department.” 2.(ii) On 20 May 2010 Mr Cohen was advised that the police enquiry had been brought to an end. On 4 June 2010 Mr Cohen submitted a formal complaint to the Clerk of the House of Commons relating to the failure of the Department of Resources to find the log entry of 27 March 2009 in time to bring it to the attention of the Commissioner. The Department of Resources made its own enquiry as to how that failure had occurred and, in accordance with the recommendation of that enquiry, on 13 July 2010 the Clerk of the House sent a letter of apology to Mr Cohen who by then was no longer a Member of Parliament, having decided, as a result of the allegations made against him, not to stand for re-election at the General Election which took place in May 2010. 2.(iii) But Mr Cohen wanted more than an apology. He, and solicitors acting on his behalf, contended that the outcome of the parliamentary enquiry would have been different if the log entry of 27 March 2009 had been available to the Commissioner. But the Commissioner, having discharged his functions, could not re-open his enquiry, so at a meeting of the Committee on 16 November 2010 I was appointed legal adviser, pursuant to Standing Order 149 (5) with specific Terms of Reference.

3. My Terms of Reference 3.(i) My full Terms of Reference are attached to this Review as Appendix II. They invite me to review the conclusion of the Committee that Mr Cohen’s breach in treating his Colchester home as his main home for the purpose of the rules for claiming parliamentary allowances

Mr Harry Cohen — Review by Sir Paul Kennedy 9

was a particularly serious one. In other words I am concerned only with the seriousness of the breach, not with whether or not there was a breach. That has been decided. Having received written submissions (and oral evidence or representations if I considered that they would assist) I am required to reach findings of fact on the balance of probabilities, and to advise on the appropriateness of the Committee’s recommendations to the House.

4. The issue and the material 4.(i) The principal issue, as it seems to me, is the degree of culpability. If, in the light of the fresh evidence contained in the log entry of 27 March 2009, it can now be said that Mr Cohen acted as he did in the reasonable belief that what he was doing was within the rules, a belief, according to Mr Cohen, supported by assurances which he received from representatives of the Department of Resources over the years, then his culpability may be less than it has been considered to be by the parliamentary authorities thus far. In order to set the fresh evidence in its proper context it is necessary to look at the history examined by the Commissioner and set out in the Committee’s Report in the light of the helpful written submissions made to me by Mr Cohen, with the help of his solicitor, by the Department of Resources, and by the Secretary to the Parliamentary Contributory Pension Fund Trustees. Those submissions are attached to this review as Appendix III. In the event I did not conduct any oral hearing, as I considered that it would not add materially to the written submissions.

5. The History 5.(i) It was in 1998 that Mr and Mrs Cohen purchased their house at Colchester as a private retreat from the pressures of living in their constituency home, but fairly soon Mrs Cohen began to have health problems which meant that they were unable to use the Colchester house as much as they had hoped. Mrs Cohen’s health problems were not all attributable to one condition. They were also episodic, but they did mean that she often needed to have someone at home with her, and that she needed to be near to the hospital that was treating her. That hospital was normally in London, not Colchester. When interviewed by the Commissioner Mr Cohen said that his wife’s health problem in 2001 was atrial fibrillation and that it was because of that health problem that they decided for the first time to rent out the Colchester house. Normally the tenancy was for six months, with provision as to the length of notice required to bring the tenancy to an end. Although the point does not appear to have been expressly canvassed until now, it is relevant to note that six months was the shortest period for which a property could be let if the landlord was to avail himself of the automatic right to possession after six months under the Landlord and Tenant Act 1996, so Mr and Mrs Cohen may well have been advised to let for six months at a time if they wished to retain the right to resume possession. 5.(ii) As both Mr and Mrs Cohen placed considerable reliance on her health problems to explain the decisions which they made in relation to the Colchester house, I set out here what Mrs Cohen said in her statement to the Commissioner of 12 May 2009 about her health problems prior to 2009, by which date letting had come to an end.

10 Mr Harry Cohen — Review by Sir Paul Kennedy

“I have suffered atrial fibrillation since late 2000 with occasional complications besides other non-related complaints. In 2002 I underwent a five hour operation under local anaesthetic to repair a diseased lower jaw damaged during a previous implant procedure. Next, I had cataracts removed one at a time each year under local anaesthetic. I couldn’t drive for some time. In 2004 my cardiologist at Whipps Cross Hospital referred me to a neurologist when I developed blinding headaches. I actually suffered an attack during my appointment and was diagnosed with serious migraine. New medication plus heart tablets were heavy duty and put me out all day. In 2005 I suffered a stroke whilst at the Colchester Buddhist Centre and was hospitalized in Colchester General Hospital for eight days. I was strongly recommended to continue treatment with my existing London cardiologist. I was prescribed Warfarin as a lifelong medication and have, fortunately, suffered no stroke or migraine subsequently. The effects of my stroke were loss of memory and loss of balance. For a year I could not drive a car, or leave home without leaving a message as to my whereabouts. The following year I lost my balance and broke my right arm. The high risk from general anaesthetic ruled out the pin required to restore full elbow function. The following year I lost balance again and broke the other arm. I was also admitted twice to hospital due to high blood pressure. In 2008 despite several medication changes I still suffered high blood pressure and bouts of extreme fibrillation. My cardiologist referred me to a fibrillation specialist at Barts. I also suffered a series of massive nose bleeds and extensive bruising involving repeated visits to A & E, ENT, Cardio Clinic and my GP.” That history of ill health was supported to some extent by an extract from Mrs Cohen’s medical records, which was supplied to the Commissioner by Mr Cohen with his letter of 14 December 2009. Clearly, Mrs Cohen’s health problems were long-running and extensive. 5.(iii) On 14 May 2002 Mr Cohen, for the first time, registered his Colchester house, and the rental income he received in 2001, in the Register of Members’ Financial Interests. The Commissioner found no reason to doubt that he did so following a discussion with the then Registrar of Members’ Interests, and that clearly he was not concealing what he had done. The Registry was physically separate from the Department of Resources (known then as the Fees Office), but Mr Cohen said in his letter to the Commissioner of 12 May 2009 that he “gave notice when the initial rental was done at the same time as I registered the interest”. The Department of Resources has no record of any contact with Mr Cohen at that time or at any subsequent time prior to 2008, in relation to letting out his Colchester home. To some extent that is not surprising because at that time the Department of Resources maintained limited, if any, records of oral contacts from Members, particularly with junior officials. Nevertheless, it is somewhat surprising that, before for the first time letting out for six months the property which he regarded as his main home, Mr Cohen did not, for his own protection, seek written guidance from the Department of Resources, or at least clear oral guidance from an identifiable senior official as to the impact of the proposed letting on his entitlement to ACA. And there is no evidence, either from the Department of Resources or from Mr Cohen of that having occurred. Furthermore, as is pointed out by the Director General of Resources in his submission to me, it would be normal to seek approval before letting, not when registering a financial interest in the following year. In this context it is not tenable for Mr Cohen to imply, as he did in his submission to me, that the Fees Office should have been aware of his living circumstances through his Register

Mr Harry Cohen — Review by Sir Paul Kennedy 11

entry. The Register and the Fees Office fulfil quite distinct functions and there is no reason why there should be any cross-fertilisation between them. 5.(iv) In his letter to the Commissioner of 12 May 2009 Mr Cohen said: “My belief is that I notified the Fees Office on three or four occasions of the renting and it was always accepted verbally. I was never asked to put it in writing and that was not deemed a necessity in those days.” In his amended Response of 7 February 2011 Mr Cohen says to me :

“It seems that what I was saying was not considered important enough to document – which is completely consistent with the fact my practice was being treated as conforming to the rules.” That is not, to my mind, a persuasive observation, particularly since the Fees Office’s lack of systematic procedures for recording conversations with Members made it unwise to assume that silence meant approval. 5.(v) In the financial year 2003–04 Mr and Mrs Cohen rented out their Colchester home for nine weeks, and in November 2003 Mr Cohen completed form ACA 1 which identified that house as his main home for the purposes of ACA, his Leyton house being identified as his constituency home. 5.(vi) Until 2003 there was no definition in the Green Book, which deals with parliamentary salaries, allowances and pensions, as to the meaning of “main home” for the purposes of ACA, but from December 2003 for several years the section of the Green Book dealing with ACA contained this definition : “The location of your main home will be normally a question 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.” 5.(vii) Mr Cohen recognizes the relevance of that definition, but he has repeatedly said that over the years his circumstances were not normal. Because of his wife’s illnesses they were exceptional, and so, he argues, he was entitled to treat the Colchester house as his main home, even during periods when it was let so that he had no access to it. 5.(viii) In the financial year 2004–05 Mr and Mrs Cohen rented out the Colchester house for 39 weeks, and in the following financial year 2005-06 they rented it out for the entire 52 weeks. 5.(ix) In his introduction to the Green Book for 2003 the Speaker wrote: “Members themselves are responsible for ensuring that their use of allowances is above reproach. They should seek guidance in cases of doubt and read the Green Book with care.”

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5.(x) Mr Cohen recognizes that personal obligation, but relies on the approval of his arrangements which he says that he received from the Department of Resources, and upon his belief that his wife’s health problems were transitory, so that each period of letting was seen by them as a temporary expedient to overcome, in particular, the security problem which would arise if the Colchester house were left unoccupied for a long period of time. 5.(xi) That is all very well, but, as it seems to me, Mr Cohen had a clear duty to review his position from time to time—both retrospectively and prospectively. If he had considered his position in April 2006 he would have realized that over the previous 12 months he had claimed £21,634 as ACA (the full available allowance) in respect of his “second home” when in reality he only had one home because his Colchester house had been let for the entire year. In the course of his interview the Commissioner asked Mr Cohen : “Is not the normal interpretation of “home” a place where you live? When it was let did that property not become the tenant’s home? How could you have had two homes given that for substantial periods you were unable to use one of them?” 5.(xii) Mr Cohen answered : “It was allowed”. In other words, he sought to rely exclusively on the approval he maintained he had received from the Department of Resources. He made no attempt to assert that he had discharged his personal responsibility to abide by the letter, and—just as importantly—the spirit, of the rules. 5.(xiii) It was in November 2005, during the year when the Colchester house was let for all 52 weeks, that Mr Cohen re-registered his Colchester house, but not the rental income, in the Register of Members’ Financial Interests, and he repeated that process for each of the next three years. In the same month he completed another form ACA 1, in which he identified Colchester as his main home and, having by now moved from Leyton to Wanstead, nominated the latter as his constituency home. 5.(xiv) For the next three financial years Mr Cohen continued to rent out his Colchester house for substantial periods: 2006–07 22 weeks 2007–08 37 weeks 2008–09 17 weeks. 5.(xv) In May 2008 he consulted the Registrar of Members’ Financial Interests and made the following entry in the Register under category 8 (Land and Property): “House in Colchester from which occasional rental is received.” 5.(xvi) I find the use of the word “occasional” surprising. Over the previous three financial years Mr and Mrs Cohen had let the house for a total of 111 weeks out of a possible 156, and had received rental income totalling £18,955 gross.

Mr Harry Cohen — Review by Sir Paul Kennedy 13

5.(xvii) Mr Cohen says in his letter to the Commissioner of 11 September 2009 that in mid- 2008 (he has been inconsistent about the month) he met Andy Gibson, a regular contact of his at the Department of Resources, and was verbally advised against continuing to rent “as public perceptions were becoming negative”. He acted on that advice and stopped renting out the Colchester house in August 2008. Mr Gibson did not initially recall any such meeting, but, when identified as the person whom Mr Cohen claimed to have met, Mr Gibson did accept that a meeting may well have taken place in June 2008 at which Mr Cohen was advised not to rent out his main home. Mr Gibson apparently claims not to have said anything to indicate that it had ever been acceptable to do so, but I have not received any information directly from Mr Gibson. And the information provided to the Commissioner by the Department of Resources in the letter of 24 December 2009, and summarized above, has to be read in the light of the information given to me by the Director General of Resources in his submission of 13 January 2011, where he points out that Mr Gibson was subsequently sentenced to nine months imprisonment for offences of obtaining money by deception during the course of his employment. The Department cannot therefore rely on his veracity and has not sought to do so. That means that Mr Cohen’s account of the meeting in mid- 2008 is unchallenged, and for present purposes I accept it. I also take note of the Director General’s acknowledgement, in the same submission, of the possibility that a member of staff in the department might wilfully have chosen to advise a Member in a way that did not conform to the rules, but which was perceived as helpful to the Member. That comment, however, cannot be taken too far, because, again in the same submission, the Director General says : “The rule about number of nights spent was from 2003 a cardinal principle for judging whether a home was a main home. The rule was well known to all the staff of the Department who dealt with Members on these issues, and for this reason I cannot believe that any member of the Department from 2003 onwards would have believed that he or she could properly give advice that a home which was consistently let out for substantial periods could constitute a main home. On the other hand, if a Member had said that he or she was obliged to rent out a main home for a short period because of a temporary illness, then I accept that he or she might have been told that this was acceptable.” A critical word in that paragraph is the word “consistently”.

6. The Telephone Note of 27 March 2009 6.(i) Mr Cohen attaches great importance to the telephone note of 27 March 2009 since, he argues, it supports his contention that the renting out of the Colchester house was known to, and approved by, the Fees Office. And, indeed, it was the belated discovery of this note which led to my review of Mr Cohen’s case. I therefore need to deal with it in some detail. 6.(ii) On 27 March 2009, two days before the article appeared in The Mail on Sunday, Mr Cohen telephoned the Department of Resources Enquiry and Advice Team to make the enquiry to which I have already referred, which is recorded in Appendix I, and which did not come to light during the parliamentary investigation. As can be seen from the log, Mr Cohen posed

14 Mr Harry Cohen — Review by Sir Paul Kennedy

a variety of questions to the Department of Resources at different times, but on 27 March 2009 the record of his query is plainly incomplete: “Harry has a second home and a main home. He rents out some his main home. Does that break the rules?” 6.(iii) When the entry of 27 March 2009 was discovered the Clerk of the House asked the Director of Service Delivery to investigate Mr Cohen’s complaint that it should have been disclosed earlier. In his report of 9 July 2010 the Director of Service Delivery says that he asked the staff member who took the telephone call if she could explain the question, but she only vaguely remembered the call and could shed no further light on it. Obviously two interpretations are possible. Either “he rents out some of his main home” or “he rents out his main home some of the time”. The Director General of Resources submits to me that the first interpretation is much more likely, but Mr Cohen submits that the second interpretation is correct. “I truly did ask about the practice of renting out our main home some of the time”. For present purposes, let me assume that Mr Cohen is correct. It seems difficult to resist the inference that Mr Cohen was only asking that question at that time because he knew of the media interest in his ACA claims. By that time he had ceased renting out the house at Colchester. In response to Mr Gibson’s advice it had ceased being rented out about six months earlier (ie in August 2008). So Mr Cohen must have been looking for re-assurance about what had happened in the past, and if that was what he was doing, the question as recorded suggests that he was being economical with the truth. He did not, for example, say that between April 2004 and August 2008 he had rented out his main home for a total of 167 weeks without ever ceasing to claim the maximum available second home allowance and ask if that broke the rules. Had he done so I find it difficult to imagine that anyone in the Department of Resources would have said : “What he does with his main home has nothing to do with the allowances or the Department.” 6.(iv) In any case, even if the advice which Mr Cohen claims he was given on 27 March 2009 is taken at face value, it is clearly predicated on the assumption that the Colchester house had been correctly designated by Mr Cohen as his main home. But this was not so, given the heavy use made by the Cohens during the relevant period of their home in the constituency, when viewed in the light of the explicit reference in the ACA rules since late 2003 to the pattern of overnight stays as the determining factor. 6.(v) On 30 March 2009, the day after the newspaper published its article, Mr Cohen issued a statement in which he challenged a number of assertions made in the article and added this: “In the mid 1980s, Conservative backbenchers pressurized Mrs Thatcher to increase their salaries. She instructed Treasury Minister John Moore to meet their demands without an outright salary increase. He did this via allowances, particularly the Additional Costs Allowance, which he confirmed would be a light system as far as receipts were concerned. As such, the Allowance was meant to be a salary addendum.”

Mr Harry Cohen — Review by Sir Paul Kennedy 15

6.(vi) This is a serious misstatement of the position. The Green Book, which was updated and re- published at regular intervals, does not suggest that the ACA could ever properly be regarded as “a salary addendum”. That Mr Cohen argues otherwise is perhaps an indication of his attitude towards the use of the second homes allowance. 6.(vii) On 2 April 2009 the Commissioner wrote his first letter to Mr Cohen, seeking Mr Cohen’s help in relation to the complaint which the Commissioner had received. On the following day Mr Cohen again telephoned the Department of Resources EAT Team, which can be seen from the log entry at Appendix I, an entry which was brought to the attention of the Commissioner. Once again the note in the log is incomplete. The record of the enquiry reads: “My wife has been very ill and requires my care at most times which has forced me to stay in my ACA home more often than my allocated main home, which is contrary to what is stated in the green book section 3.11.1. I wish to report my situation to the DR as I ..” The advice given is recorded thus: “According to section 3.12.1, the Green Book 2006 also states that you promptly inform the department of any changes in you circumstances. On this note, I advise that you make aware you living arrangements to the department via letter, so that any change ..” 6.(viii) Mr Cohen’s version of the telephone call which he made to the Department of Resources on 3 April 2009 is set out in his letter to the Commissioner of 11 September 2009 : “This followed a letter from me to them on the previous day in which I requested the Department to confirm that I had never claimed expenses for my Colchester main home or caravan as the Mail on Sunday alleged. The Press Association required this information to back up my rebuttal. Therefore, when a female member of the Department phoned me to ask me to confirm in writing my arrangements I felt I was in a Kafka novel and told her this was nonsense given that it was I who needed the information from the Department.” 6.(ix) I accept that Mr Cohen did write to the Department of Resources on 2 April 2009 seeking the confirmation to which he refers, because that letter is mentioned by the Director of Operations in his reply to Mr Cohen dated 22 July 2009, but nevertheless I cannot accept Mr Cohen’s interpretation of the log entry dated 3 April 2009. As the entry shows, it was he who initiated the call, and the content, as recorded, speaks for itself. What seems to be common ground is that Mr Cohen did not do as advised and write to the Department of Resources setting out his living arrangements, either past or present. 6.(x) During the period between May 2009 and September 2009 the Commissioner pursued his enquiry by corresponding both with Mr Cohen and the Department of Resources. The correspondence is annexed to the Commissioner’s memorandum, and I have read it all. In September 2009 Mr Cohen met the Assistant Director of Operations at the Department of Resources, but I have seen no record of that meeting, and need say no more about it.

16 Mr Harry Cohen — Review by Sir Paul Kennedy

6.(xi) Mr Cohen was interviewed by the Commissioner on 11 November 2009, and the memorandum of the Commissioner exhibits a transcript of that interview which I have read. 6.(xii) On 25 November 2009 Mr Cohen had a further discussion with the Registrar of Members’ Financial Interests, and then made this entry in the Register : “House in Colchester from which rental income was received from 2003–04 until August 2008.” This was apparently intended to put right Mr Cohen’s previous omissions in relation to the registration of the rental income from the Colchester house.

7. Loss of Resettlement Grant and Impact on Pension 7.(i) In his submissions to me Mr Cohen asked me to take into consideration the fact that the entitlement to the resettlement grant which he would otherwise have received accrued over a long period of time. It is, he asserts, akin to a redundancy payment, and he submits that the serious errors made over a four year period should be balanced against his 27 years of service as a Member of Parliament. 7.(ii) Mr Cohen also points out that had it not been for the ACA enquiry he would have stood for re-election in May 2010. He had already been adopted as his party’s candidate, and it is reasonable to assume that he would have been re-elected. That would have enabled him to earn an increased pension. 7.(iii) In December 2005 Mr Cohen received a letter from the then Head of Pensions at the Parliamentary Contributory Pension Fund stating that he would reach the maximum pension limit of two thirds of final salary on 5 October 2009, and would then cease to make payments. Unfortunately the information in that letter was incorrect. If Mr Cohen had remained a Member of Parliament and continued to make contributions he would have reached his maximum pension limit in September 2010, but even if Mr Cohen had been given correct information in December 2005 he could not have altered his pension accrual rate until 2009, when the pension scheme rules changed, allowing Members a one-off opportunity to revise their pension accrual rate and back- date the revision to April 2008 or April 2009, subject to appropriate increased contributions being paid. Members were advised of that opportunity in letters from the Pension Unit in December 2009. Mr Cohen then discussed his own position with the Pension Unit on 12 March 2010. He was offered the opportunity to pay £5,214.03 gross (£3,128.42 net of tax relief) to increase his accrual rate from fiftieths to fortieths from April 2008. He said he could not afford to do that. Parliament had by then decided not to pay his resettlement grant.

Mr Harry Cohen — Review by Sir Paul Kennedy 17

7.(iv) In the summer of 2010 Mr Cohen complained to the Pension Fund about the misleading information he had been given in 2005, and in a letter of 24 June 2010 to the Chairman of the Fund he wrote as follows : “I want to bring this matter to a conclusion. I could still take the matter to the pensions ombudsman and I actually think it would be reasonable to call upon your Committee to grant me some form of compensation, perhaps an ex gratia payment toward the loss. However, as stated before I will accept a proper, full, unmodified, genuine apology. Please place this matter before your Fund Committee. I want that genuine unequivocal apology and I want to see it in the minutes of your Committee. If this does not happen I shall refer the matter to the pensions ombudsman to try to get the matter finished properly. Please do the decent thing as requested.” 7.(v) The Committee considered that letter at its meeting on 14 October 2010 and on 27 October 2010 the Chairman wrote to Mr Cohen: “The Trustees wish to offer you their own personal apology in relation to the matters you raised. I can confirm that this will be minuted by the Trustees in the record of their meeting. I very much hope that this will now draw the matter to a close.” 7.(vi) Nonetheless Mr Cohen submits that I should have regard to his “loss of pension rights”. He says— “In addition to the loss of my job at least five years earlier than I had hoped, and substantial legal fees incurred (e.g. in connection with the police investigation which resulted from the Commissioner’s and Committee’s report), I have suffered a loss of pension rights.” Mr Cohen’s submission continues— “Against the background of the withholding of my resettlement grant, which I would otherwise have received after the election, and the ongoing legal costs which I continue to incur, to fight my case since the police investigation commencement, I was simply not in a position to pay this money. I have therefore lost my entitlement to receive an additional £10/week (index-linked), for life and my wife, should I die first, to more than half of that additional sum as a consequence of the decision about the resettlement grant.” 7.(vii) In further submissions to me Mr Cohen says that after 2005 he did not consider it necessary to take up other savings options available as part of the pensions scheme because of the assurance he had received.

18 Mr Harry Cohen — Review by Sir Paul Kennedy

7.(viii) I have no difficulty in accepting that the investigation commenced in March 2009 has caused losses to Mr Cohen in addition to the loss of his resettlement grant. As he says, he lost the opportunity to continue as a Member of Parliament for another five years because he felt it necessary to stand down, he incurred legal expenses, and he lost the opportunity to improve his pension rights. But the accrued pension rights remain unimpaired.

8. Factual conclusions 8.(i) I am satisfied that during the period when his Colchester house was let between April 2004 and August 2008 Mr Cohen claimed and received more than £70,000 from the ACA to which, according to the rules of the House of Commons, he was not entitled. Over the same period as a Member for an outer London constituency with only one home he could instead have claimed about £9,000 in London Supplement. Those figures, set out in paragraph 19 of the Report of the Committee on Standards and Privileges, have not been challenged in the submissions made to me, and I accept them. The net amount claimed by Mr Cohen to which he was not entitled is therefore about £61,000. 8.(ii) Entitlement to ACA does not depend in any way upon a claimant’s perception . Mr Cohen has emphasized that he acted in good faith, and that neither the Commissioner nor the Committee has said otherwise. Good faith is not an issue which I need to address. If it were necessary for me to do so I would have given Mr Cohen the opportunity to give oral evidence. But, as Mr Cohen accepts, throughout the relevant period, every Member had a personal duty to ensure that their claims for, and their use of, expenses were above reproach. For the reasons set out above I am satisfied that, over an extended period, Mr Cohen did not discharge that duty. Whatever advice he may have received from any member of the staff of the Department of Resources Mr Cohen, if he had applied his mind to his own situation in the light of the clear guidance set out year by year in the Green Book, could not have come to the conclusion that what he was doing was acceptable. 8.(iii) As to the exact nature of the advice which Mr Cohen received, I have more difficulty. In the light of the fresh evidence, and in the light of what I have been told about Mr Gibson, my conclusions are not quite the same as those reached by the Commissioner in paragraphs 164 and 168 of his memorandum (which paragraphs I have set out at the beginning of this Review), conclusions which appear to have been accepted by the Committee in its Report. As indicated above, I accept Mr Cohen’s account of his meeting with Mr Gibson in June 2008. On the balance of probabilities it seems likely that Mr Cohen had previously told Mr Gibson something about letting his Colchester house, but I have serious doubts as to the extent of Mr Cohen’s disclosure. Even if it was complete, in other words if Mr Cohen revealed to Mr Gibson that between April 2004 and August 2008 he had been letting his Colchester house for 75 per cent of the time, and at one stage for a whole year continuously, and if, having received that information, Mr Gibson advised Mr Cohen that what he was doing was acceptable, then, in my judgement, Mr Cohen has no excuse for not knowing that the advice he was receiving was wrong. It was plainly contrary to the Green Book, and no member of staff could authorize a Member to completely disregard the rules. As to what Mr Cohen may have said to members of the

Mr Harry Cohen — Review by Sir Paul Kennedy 19

staff of the Department of Resources other than Mr Gibson I find myself in the same position as the Commissioner. I recognize that initially Mr Cohen did not conceal what he was doing. In May 2002 he registered not only his financial interest but also the rental income which he had received in 2001. But what happened thereafter in relation to registration supports my general conclusion, on the balance of probabilities, that from 2004 onwards, if Mr Cohen did seek advice from any member of staff other than Mr Gibson, he did not set out his position as fully as he should have done if he was to receive properly considered advice. That conclusion is supported by the documentation, namely : (1)Mr Cohen’s entry in the Register of Financial Interest in June 2008, which referred to occasional rental being received, at a time when the flow of income was continuous and significant. (2)The EAT log entry of 27 March 2009, the new evidence, where the question, even if interpreted as Mr Cohen suggests, indicates a lack of full disclosure. (3)The EAT log entry of 3 April 2009. Despite what has been said by Mr Cohen, it seems to me probable that the entry is accurate so far as it goes, and if so it is clear that Mr Cohen was attempting to report his situation in relation to his restricted use of his “main home”. If the situation was already well known to the Department of Resources, why was it necessary to report it again? 8.(iv) In summary, Mr Cohen had a personal obligation to obey the rules by not claiming ACA when, for the purposes of ACA, he had only one home – and therefore, inescapably, no second home. If on the basis of full disclosure he was advised by Andy Gibson that what he was doing was acceptable, then that advice was clearly flawed and Mr Cohen should have recognized it to be so. On the balance of probabilities it is unlikely that he made sufficient disclosure to any other member of the staff of the Department of Resources to enable that member of staff to give properly considered advice.

9. Culpability and Sanction 9.(i) It follows that, in my view, the level of Mr Cohen’s culpability is high, and that what he did should still be regarded as a particularly serious breach of the rules of the House, notwithstanding the new evidence which was the trigger for my review. It was, in my view, entirely appropriate for him to have been required to apologise by means of a personal statement on the floor of the House. 9.(ii) As to the Committee’s recommendation that the full amount of Mr Cohen’s resettlement grant should be withheld, it seems to me to be important to start by recognizing that, regardless of culpability or personal mitigating circumstances, Mr Cohen is shown to have received from public funds £61,000 net in the form of ACA payments to which he was not entitled, and that this money should be recovered from him. That leaves only the question of the balance of about £4,000, the full amount of the resettlement grant, being, I understand, about £65,000. The Committee recommended that the full amount of the resettlement grant be withheld because it regarded Mr Cohen’s breach as being particularly serious, and involving a large sum of public money. That seems to me to have been

20 Mr Harry Cohen — Review by Sir Paul Kennedy

entirely appropriate. If interest on the money wrongly claimed were to be taken into account the total debt shown to be recoverable would be well in excess of £65,000. 9.(iii) Like others who have considered this matter before me I accept that Mrs Cohen’s health problems were serious, and I have no doubt that it was because of those problems that Mr and Mrs Cohen began to let the Colchester house. I recognize that Mr Cohen had a long period of service as a Member of Parliament, and I have no reason to doubt that, as he claims, the whole investigation process has had a devastating effect upon himself and his wife. It has, I accept, cost him his job and indirectly deprived him of the opportunity to achieve an increased pension. He has also incurred legal costs, but none of that renders the Committee’s recommendation in relation to the resettlement grant disproportionate. For the reasons I have given it seems to me to be unassailable.

Mr Harry Cohen — Review by Sir Paul Kennedy 21

Appendices to the Review:

Appendix I

Extract from the Department of Resources EAT telephone log

22 Mr Harry Cohen — Review by Sir Paul Kennedy

Appendix II

Terms of reference for the review of the Seventh Report, 2009–10

A. Pursuant to House of Commons Standing Order No 149(5) you are invited to conduct an independent review of the conclusion of the Seventh Report (Mr Harry Cohen) of the House of Commons Standards and Privileges Committee for Session 2009-10 to the effect that his breach, in treating his Colchester home as his main home, of the rules for claiming Parliamentary allowances was a particularly serious one. B. The reason why the review is commissioned is that the Committee considers there is a real possibility that it would have come to a different conclusion about the seriousness of the breach in the light of new information now available. C. The review shall be conducted in private. D. Mr Cohen, if he so requests, may make written representations to the review, and produce any documents and witness statements which he considers to be relevant. He will be given an opportunity to comment upon any written material which is placed before the review from any other source, other than material which he has already seen. It is not anticipated that any evidence will be given or representations will be made orally unless the reviewer is persuaded that oral evidence or oral representations would assist. E. The review should reach findings of fact on the balance of probabilities. F. Otherwise it will be for you to determine the procedures of the review. G. You are requested to provide advice as soon as possible to the Committee— • As to the appropriateness of its recommendations that—

o Mr Cohen should be required to apologise by means of a personal statement on the floor of the house, and o the full amount of the resettlement grant otherwise repayable to him be withheld, and • in so far as any inappropriateness is found, as to the action (if any) that the Committee might be invited to recommend the House to take.

H. Your review and the evidence on which it is based, subject to any advice you provide to the contrary, will be included in a report made by the Committee. I. The review is to be conducted in the parliamentary estate, and your costs (and a secretariat) will be provided by the House of Commons, and you will have access to any House of Commons papers and staff members that you consider relevant.

Mr Harry Cohen — Review by Sir Paul Kennedy 23

Appendix III

(i) Submission by Mr Harry Cohen

SUBMISSIONS FROM MR HARRY COHEN TO SIR PAUL KENNEDY, TH 15 DECEMBER 2010

1. I have noted your terms of reference, and the fact that you have been asked to conduct an independent review of the conclusion of the Seventh Report of the Committee on Standards and Privileges, that my breach of the rules for claiming Parliamentary allowances, in treating my Colchester home as my main home, was a “particularly serious one”. I note that you are also asked to provide advice to the Committee upon the appropriateness of the recommendations made, upon the apology made to the House of Commons and the withholding of the resettlement grant that would otherwise have been payable to me. 2. A focus of your view will no doubt be upon the effect of the telephone attendance note of 27.3.2009 and the letter of 13 July 2010 from the Clerk and Chief Executive of the House, Dr Malcolm Jack, which followed its discovery. However, the terms of reference do not limit you to considering the impact of this attendance note only, and I would ask you to consider, in full, all the issues raised by the conclusions of the Seventh Report. 3. Outcome of Police Investigation. First, I would like you to note that on 20 May 2010, the police concluded their investigations into the allegation that is currently under review, with a decision that no further action was to be taken (copy enclosed). I appreciate that this may not be directly relevant to your review of the Committee’s deliberations, but it forms part of the back-drop and it is important to note there were no criminal offences committed by me. 4. The relevant context. It may be useful if I identify those parts of the Committee’s report of 19 January 2010 which may be of central relevance to the new material now being considered. 5. The Green Book. From July 2003–2009, the Green Book has advised Members that the identification of a main home would normally be a matter of fact. Where a Member had more than one home, the main home was normally where a Member spent most nights. “The Commissioner notes—as Mr Cohen has pointed out and as this Committee has previously accepted that the term “normally” implies that there may be exceptions.” (Report paragraph 5). 6. The Committee’s Comments. It also seems appropriate to note the Committee’s view in its fifteenth report in session 2007–8 The Green Book states that the location of a Member’s main home is normally a matter of fact. The Green Book implicitly recognises that there may be circumstances where this simple objective test may not be the right one to apply, and we agree with the Commissioner that, in cases of doubt, it is reasonable to take account of a much wider range of factors. In such cases, the Commissioner suggests that the Member’s decision should reflect their particular circumstances.

24 Mr Harry Cohen — Review by Sir Paul Kennedy

7. Letter of 14 July 2009 from the Director of Strategic Projects, Department of Resources: “Mr Cohen is a frequent visitor to the Department of Resources where he discusses many aspects of his allowances with a variety of staff, mainly those in the Enquiry & Advice Team (EAT). Staff have been asked if they recall any conversations about Mr Cohen’s altered arrangements and the rental of his Colchester home; none of them recall any such discussion. We have no written correspondence....” 8. Letter of 22 July 2009: “I confirm that it is the Department’s view that there is a presumption that having the ability to occupy a main ... home is an essential element of it being a main .... home (save possibly in circumstances such as the impossibility of occupation by reason or flood or fire...)”. 9. Letter of 24 September 2009: “While there is no record of this [conversation of April 2008] or any other conversation with Mr Cohen on renting out the main home, it is conceivable that a Member might well have been advised that there was no rule which prevented him or her from renting out their main home on a temporary basis. But I remain of the view that no-one in the Department would have thought it right to have advised Mr Cohen that it was appropriate for him to designate as his main home a residence that he had no right to occupy for any period other than a strictly temporary one.” 10. You will also note the previous evidence which I have provided about conversations with the Fees Office, eg Report page 18, paragraph 25 (Memorandum from the Parliamentary Commissioner for Standards):— “Mr Cohen said that he had notified the Fees Office about his housing arrangements. ... “In fact, in 2008 on the last occasion when it was agreed that I was not outside the rules, because my circumstances were not normal, it was only then recommended that I end occasional renting because public perceptions had changed. I immediately acted on that advice.” He believed he had notified the Fees Office of the renting of his Colchester property on “three or four occasions.... and it was always accepted verbally. I was never asked to put it in writing, and that was not deemed a necessity in those days. I gave notification when the initial rental was done at the same time as I registered the interest. Other verbal notifications would have been during some of my not infrequent sojourns to the Fees Office to discuss matters of (then) greater crisis. However, the discussions would have been in the context of my circumstances not being normal.....” (emphasis added). 11. See, to substantially the same effect, my evidence summarised at paragraphs 72–73 of the Memorandum from the Parliamentary Standards Commissioner, Appendix1, (page 32), paragraph 76 (p33), paragraph 90, first sentence (p37), paragraph 109 (p42), paragraph 115 (p44). 12. With regard to the Department of Resources’ advice to myself, the Commissioner concluded, after summarising the differing evidence of what had or might have occurred (p56, paragraph 164):— “ ... It is not possible at this remove, and in the absence of documentary evidence, definitively to resolve this difference of recollection. I think it

Mr Harry Cohen — Review by Sir Paul Kennedy 25

possible, on the balance of probabilities, that Mr Cohen may have made some mention to the House authorities about letting out his Colchester home. The fact that he registered the property in the Register of Members’ Interests in 2001 and again made a partial registration from 2005 to 2008 suggests that he was not attempting to disguise the arrangement. I am more doubtful whether any mention he made of these arrangements to the Department of Resources was sufficiently full or clear for the Department to have given considered advice. Whatever may have been their attitude at the time to temporary letting arrangements, Mr Cohen’s arrangements were manifestly not temporary. There is not therefore sufficient evidence for me to conclude that the Department gave Mr Cohen flawed advice and I think it unlikely that it did so. In any event, Members must be personally responsible for their actions under the Rules ....” 13. The Commissioner found, and the Committee agreed (paragraph 16) that from April 2004 to August 2008, Mr Cohen’s home in Colchester could not be regarded as his home for the purposes of claiming Parliamentary allowances”. This refers to my constituency home. The Committee went on to state that “The Commissioner and the Department of Resources are right, in our judgment, to take the view that a property which for long periods is wholly inaccessible to the Member cannot be a designated home for the purpose of claiming Additional Costs Allowance.” The Committee did not accept (paragraph 18) that the Rules were being applied retrospectively and observed that “Mr Cohen might have gained a clearer understanding of the Rules if he had provided the House authorities with fuller information about his arrangements.” 14. The telephone attendance note of 27.3.2009. Turning to the note of 27.3.2009, I would make the following points: This note is of a conversation which is one of a number of conversations I had with the Fees Office in early 2009. Now, almost two years later, I do not have a detailed memory of these conversations, but I was actively seeking further information and guidance about my ACA claim at a time when I had already ended the temporary lets of our Colchester house (from August 2008). I had also met with the Registrar to make more accurate the Register of Members’ Interests entry. Both of these events happened well before the complaint made against me. At the same time, there was also further interest in my claims from a journalist on a national newspaper. This was the first intimation I had that my main home was being questioned. That interest led ultimately to the newspaper reports of 29 March 2009 and subsequent ones. 15. The note is, of course, rather ambiguous or muddled in recording “Harry has a second home and a main home. He rents out some his main home. Does that break the rules?” However, I can confirm that when making this enquiry, I was asking about renting out the main home “sometimes” or for “some period of time”. I would not have asked questions about renting out “some of” my main home; that has never been an option and is simply irrelevant to my situation. (It would be practically impossible. The Colchester house is a converted Dame School, with one large main living room, a ground floor bedroom and a mezzanine bedroom above;

26 Mr Harry Cohen — Review by Sir Paul Kennedy

it would not be feasible to separate off a part of the house to let, and it would never have occurred to us to attempt it—the house was our private home). So the answer must have related to the factual scenario of renting out a main home at times, or “sometimes”. I appreciate that the note is an imperfect record of the conversation that must have taken place, but it was not, of course, sent to me to check. 16. If there is any doubt about this note, I would ask for an oral hearing so that I can respond further to any questions which you may have about it. However, I would point out that my word and good faith have never, in the course of this investigation, been doubted. 17. In any event, it is the response from the EAT which is significant—significant whatever interpretation is adopted of the query to which the response was given, I would suggest. The answer was that: “He is not claiming allowances on his main home. He claims them on his second home. What he does with his main home has nothing to do with the allowances or the department.” (emphasis added). 18. I have always maintained that I kept the Fees Office informed throughout of my circumstances, and the rental agreements made in respect of my Colchester home. I have told the Committee and Commissioner that throughout the period from 2002 onwards, I was regularly in touch with the staff at the Fees Office. See the references to my previous evidence, paragraphs 9 and 10 above. When I attended, I was open about the situation caused by my wife’s sequential and unpredictable bouts of ill-health and that this had led us to rent out the Colchester house. There were no concerns expressed about this information—it was never suggested that this raised concerns or needed further investigation. 19. Although the Department has accepted that I was a frequent attendee at the Department of Resources, and frequently sought advice from the Enquiry and Advice Team (EAT), it has maintained that no one from the Office would have advised me that it was appropriate for me to treat as a main home, a place that I had no right to occupy “for any period other than a strictly temporary one.” (letter of 24.9.2009, paragraph 9 above). 20. But the attendance note of 27.3.2009 is an EAT record, and it supports the evidence that, as I have previously told the Committee, I was given to understand that the arrangements which I had made were acceptable ones at the time, and required no further explanation or investigation. If as late as March 2009, a member of the fees office staff could say that “He is not claiming allowances on his main home. He claims them on his second home. What he does with his main home has nothing to do with the allowances or the department,” it is surely even more likely that a similar, if not greater, lack of interest would have been shown in information about lets of that house, when raised from 2003 onwards. There is no suggestion in the March 2009 memo that a decision to let out the “main home” means that a member must reconsider whether the house is genuinely his (or her) main home. The attitude is that since no public money is being claimed in respect of that home, no questions need be asked. In my view, this throws the reliability or certainty of the views expressed by the Director of Strategic Projects in (eg) the letter of 24 September 2009 into serious doubt. The views about what staff “would have” said had never been based on any real evidence as to what staff actually said; they have always represented an account of what it was thought staff ought to have said. The

Mr Harry Cohen — Review by Sir Paul Kennedy 27

March 2009 note shows that this is very unreliable way of judging past conversations. I would urge you to accept my own recollection of the conversations which I had with staff, instead. The confirmation of my meeting with Andy Gibson, initially denied by the Director, and the EAT attendance note, does not fit with what the Director maintained. 21. In addition, the note is also consistent with the evidence which I have already given the Commissioner and Committee, that when I asked Andy Gibson for advice in April 2008, I was advised to end the practice of renting out the Colchester home not because it was wrong or contrary to the rules, but because “public perception was changing”. There was no suggestion that the past claims had been wrong or that I should not have made them. That this meeting could have taken place was initially denied by the Director in his evidence but had to be confirmed by him later after checking with Andy Gibson. 22. Overall, I would suggest that the conclusions of the Commissioner about the advice offered (or the lack of concerns or queries raised) by the Department of Resources, set out in paragraph 164 of the Memorandum, require reconsideration in the light of the note of March 2009. I would urge you to accept the account that I have given of my dealings with the EAT, instead. 23. If the attitude of the staff of the Fees Office was that “What he does with his main home has nothing to do with the allowances or the department”, this helps to explain why no concerns were raised at the time. This in turn directly helps to explain why I did not appreciate the need—which the Committee has found to have existed -to review my arrangements in more detail, or to stop letting out my Colchester house at an earlier date. It is apparent that when given advice (eg in April 2008, or upon the Register of Members’ Interests), I acted on it immediately. If concerns had been raised at an earlier date, I would have done the same then, and this situation would have been avoided. 24. The relevance of incomplete or flawed advice or information from the Fees Office. In making these points about the advice I received, or the EAT’s failure to raise queries about the situation I discussed with them, I do recognise that the Committee’s approach to allowances’ claims has always been that the ultimate responsibility for a claim made lies with the Member of Parliament concerned. I fully accept this and am not seeking to avoid that responsibility, although I am perplexed at how one can be perceived to be within the rules, with no advice contrary upon consultation, but then it be, retrospectively, determined not to be so. However, the input of the Fees Office—its failure to query my arrangements or to raise concerns with me—does help to explain the prevailing understanding of the rules at the time. My own, I believe understandable error to handle the matter differently is more excusable, I suggest, against that background. 25. In the circumstances, I would urge you to reconsider the judgement that it represented a “particularly serious breach” of the rules. 26. Temporary arrangements. The previous decision of the Committee and the Commissioner were based on the judgment that by April 2004 I should have recognised that the letting of the Colchester house was no longer a temporary situation.

28 Mr Harry Cohen — Review by Sir Paul Kennedy

27. It has however been recognised by both that this was not a case in which I reviewed the situation in which my wife and I were in, and took a knowing or even reckless decision not to comply with the letter or the spirit of the rules. It was found, rather, that my error lay in failing to carry out a sufficiently thorough and objective assessment of my family situation. According to the previous report, had I done this I would have recognised that what was “exceptional” had become normal, and that we were no longer, and could not expect to be, based in Colchester (eg, Memorandum paragraph 161). 28. When looking at the issue of whether the breach of the rules was “particularly serious”, I would urge you to assess my actions or decisions, and the seriousness of any mistakes made, without the benefit of hindsight. It is, perhaps, easy to see that when the period from 2003–August 2008 is considered as a whole, retrospectively, we were unable to spend significant amounts of time in our Colchester house. However, this is not how it appeared at the time, when it was hoped and expected that each 6 month let would be the last. I have previously made the point that my wife’s health was not subject to any kind of steady deterioration, but to a series of unexpected crises that would have been impossible to predict. We thought that every crisis was the last one. When the hope that each recovery would be permanent together with the stresses caused by my wife’s further unforeseen medical problems, plus demanding parliamentary duties, as well as the factors about the attitude of the EAT discussed above, I do feel that the judgment that the breach was “particularly serious breach” is unduly harsh and disproportionate. It gives no real weight to the circumstances which applied at the time, and which are extenuating ones. 29. Response of the Department to the discovery of the attendance note (Dr Jack’s letter of 13 July 2010). I am grateful for the acknowledgment that the search of the Enquiries and Advice Team (EAT) database was not thorough enough, and that this relevant record should have been found and passed to the Commissioner. I am grateful for the apology for this omission offered in this letter (copy enclosed). Nevertheless, I find it hard to understand how such a plainly relevant record was not found or overlooked, and that it should have taken a police investigation for it to be produced (my letter of 4 June 2010 refers). The fact that this has led to a prolonging of the distress and stress caused by this whole matter should also, I would suggest, be taken into account by you in your review of any appropriate penalty. 30. More generally, I have already paid a very high price for any errors in my handling of ACA claims. Before this story broke in March 2009, I had been reselected unopposed as the Labour Party candidate for the next election. The adverse publicity created—in part by completely misleading stories, such as the suggestions that I had claimed the second homes allowance for a caravan or had declared the caravan as my main home as well as being informed from within the Commissioner’s office that my request for the complaint to be dismissed was not agreed but matters about which the Commissioner remained concerned would be raised. I was politically in a very difficult if not impossible position that meant that I had to consider urgently whether or not to not contest the general election. I took the decision that I could not ask my party to fight the general election with a

Mr Harry Cohen — Review by Sir Paul Kennedy 29

candidate who would be associated with any scandal about election expenses. I therefore stood down in the summer, 2009, although it had been my firm intention to seek to serve for this forthcoming Parliamentary term. The decision had to be made early due to the proximity of the general election (which could have been earlier than it actually was) because a General Election could have been called at any time and the need for any new candidate to become known locally. It was only after the general election that the police concluded their investigation. Effectively, I have lost my job, at least five years earlier than I would otherwise have hoped. It was certainly not a dignified or decent end to twenty seven years as an M.P. and at a personal level both myself and my wife has suffered abuse from the public. My good name and reputation is I believe irrevocably damaged after a lifetime of public service. 31. Accrual of Resettlement Grant. I recognise the power of the Committee to determine that a resettlement grant not be paid, and the fact that the Committee’s recommendations of January 2010 were based upon a desire to ensure that the public purse received back a sum roughly equivalent to the monies which it was judged had been inappropriately claimed. Nevertheless, I would ask you to take into consideration the fact that the entitlement to the resettlement grant which I would otherwise have received, accrued over a long period of time. The grant is akin to a redundancy payment. I was a Member of Parliament for 27 years before I retired, and the right to the grant accrued over that period as a whole. I have been judged to have made serious errors in the claims made recently, over a 4 year period. I do not seek to minimise the importance of those findings, although as can be seen from this submission I believe that verdict should be revised, but I would ask that the Committee balance that period against the longer period of service which I have given, and which is reflected in the resettlement grant at stake. 32. Pension Entitlement. There have been further losses to my wife and myself. In addition to the loss of my job at least 5 years earlier than I had hoped, and substantial legal fees incurred (e.g. in connection with the police investigation which resulted from the Commissioner’s and Committee’s report), I have suffered a loss of pension rights. I enclose correspondence relating to this matter. You will see that on 9 December 2005, I was specifically told that I would reach my maximum pension on 5 October 2009. It was not until February 2010 that I was told that this was not correct, and on 12 March 2010 I was told that if I wanted to receive the full pension, I would need to pay £5,214.03 (£3128.42 net of tax relief) into the pension fund before the General Election. Against the background of the withholding of my resettlement grant, which I would otherwise have received after the election, and the ongoing legal costs which I continue to incur, to fight my case since the police investigation commencement, I was simply not in a position to pay this money. I have therefore lost my entitlement to receive an additional £10/week (index linked), for life, and my wife, should I die first, to more than half of that additional sum, as a consequence of the decision about the resettlement grant. 33. I received an apology from the Trustees on 27 October 2010, but of course that does not reinstate the ‘lost’ payments. 34. Conclusions. The Committee has previously accepted that I acted in good faith at all times, and that I never sought to conceal the lets of the Colchester house. In

30 Mr Harry Cohen — Review by Sir Paul Kennedy

summary, my continued designation of that house as my “main home” was based on my and my wife’s attachment to, and links with, the house and the area, coupled with our belief that our inability to live in the house ‘full-time’ was a temporary expedient as a result of my wife’s ill-health It, as our “main home” was, for us, a matter of fact. My belief that the arrangements were fully in order was supported by the conversations which I had with the Fees Office. It has always been accepted that “it is conceivable that a Member might well have been advised that there was no rule which prevented him or her from renting out on a temporary basis”. The note of 27.3.2009 demonstrates that it is not merely “conceivable” but highly probable that advice was actually given, but there was a more general attitude that the use made of the main home was not a concern for the Fees Office since no claims for public funds were being made against it. Furthermore, this attitude was a material factor in the situation which developed. My errors in failing to give further consideration to the situation caused by my wife’s ill-health have now to be seen in that light (as well as in the light of the other stresses on me caused by my wife’s ill- health, in particular). 35. That said, I recognise that a Member is ultimately responsible for the claims made. I have already made a full apology to the House, as recommended by the Committee. But in assessing culpability, that responsibility has to be balanced against all the ‘mitigating’ factors which I have tried to set out above. 36. In all the circumstances, I would suggest, first, that the circumstances enable you to reassess the judgment formed on the severity of the breach. It was completely inadvertent, and it cannot properly be characterised as “particularly serious” one. 37. Second, given all the circumstances discussed above, I would respectfully suggest that the sanctions applied, and in particular, the withholding of my resettlement grant in full, was unduly harsh and disproportionate. I would suggest that the desire to ensure that the public purse does not suffer as a result of any errors should be balanced against all the extenuating factors I have tried to set out above, including the fact that I have always acted honestly and in good faith. The fact that my entitlement to the resettlement grant has accrued over 27 years, and that I lost any prospect of re-election as a result of this affair is also highly material. I have also pointed out that another error of the House’s authorities, this time about my pension rights, has recently cost me dear. 38. In the light of all the matters I have mentioned, I would urge you to follow any reassessment of the circumstances of this matter by concluding that the recommendation to withhold the resettlement in grant in full, was too severe. I would ask you to reinstate it in its entirety; or, failing that, to recommend that a substantial proportion be restored to me. 39. May I also request that you affirm that I acted in good faith so that I may regain some of the respect which I have lost due to this case, a loss I feel particularly keenly and that what I thought (and indeed what the Fees Office staff thought) was proper, throughout, in all the circumstances. Encs. 1. Met Police 20th May 2010 2. Pension correspondence—

Mr Harry Cohen — Review by Sir Paul Kennedy 31

9th Dec 2005 12th March 2010 4th May 2010 15th June 2010 24th June 2010

Letter from [***], Detective Superintendent, Specialist Crime Directorate, Metropolitan Police to Mr Harry Cohen, 20 May 2010 As you are aware the Metropolitan Police Service requested copies of the expense claims submitted by you to the House of Commons in order that allegations of inappropriate claims relating to ACA allowances could be investigated. Further to the verbal notification via your solicitor [***], this letter is to inform you that this police investigation has concluded. This outcome only relates to the specific allegations that you inappropriately c1aimed allowances for your constituency address when you were unable to occupy your primary residence, as it was occupied by a third party. If new information comes to light or if further allegations are made then I will be duty bound to consider them.

Letter from [***], Head of Pensions, The Parliamentary Contributory Pension Fund to Mr Harry Cohen, 9 December 2005 The Parliamentary Contributorv Pension Fund (PCPF) Transfer of Pension Benefits—Local Government Pension Scheme

I write to confirm that you have been credited with 6 years 18 days service in the PCPF, and a cheque for £81,004.57 has been received from Haringey Council. This will be minuted at the next meeting of the Trustees of the PCPF. You purchased this service at a 50ths-accrual rate. Any subsequent changes to the scheme accrual rate may result in a subsequent change to the number of years and/or days that you have been credited. Any such change would not alter the monetary worth of your pension. You should also note that current scheme regulations do not utilise transferred-in service for the purposes of an ‘abated’ (reduced) pension. It is only actual service in the basic parliamentary scheme that counts in this case. As a serving member it has been calculated that you will reach the maximum pension limit of 2/3rds final salary on 05 October 2009 and will cease to make payments into the PCPF as from 06 October 2009. Appropriate steps will be taken nearer this date to cease deductions from your salary in respect of your basic scheme service and you will be informed by letter nearer the time. You may telephone me on 0207 219 [***] if you would like to discuss any aspect of your pension with me.

32 Mr Harry Cohen — Review by Sir Paul Kennedy

Letter from [***], Pension Officer, Parliamentary Contributory Pension Fund to Mr Harry Cohen, 12 March 2010 Parliamentary Contributory Pension Fund (PCPF) Change of Pension Build Up Rate

Thank you for your phone call earlier this week. I have now spoken to [***], Head of Pensions, and confirm that if you decide to switch to 1/40ths pension build up rate, you will have to pay £5,214.03 gross (£3128.42 net assuming tax relief at 40%) owing to the PCPF, before you cease to serve as an MP, at the General Election. If you elect to switch, but do not pay the arrears owed, we would not be in a position to start payment of your pension until this money was paid. If you decide you want to switch your pension build up rate in March, I would need you to complete and return the attached Switching Form by Monday 15 March. You can then repay the entire gross amount by cheque, making the cheques payable to the Trustees of the PCPF'. You will then be able to claim tax relief from HRMC when you complete your tax return. If you have any questions about this letter or your PCPF pension please contact me.

Letter from Mr Harry Cohen to [***], Pensions Unit, Department of Resources, House of Commons, 4 May 2010 I appreciated the recent meeting with yourself and [***]. After his comments, as you know I do not intend to take my complaint any further. However, in clearing my manual files I came across this letter from [***] (copy enclosed), then Head of Pensions, dated 9 December 2005. You will note the fourth paragraph “As a serving member it has been calculated that you will reach the maximum pension limit of 2/3rds final salary on 5 October 2009 and will cease to make payments into the PCPF as from 6 October 2009.” Please will you tell me when that situation changed and for what reason(s). Also, my file record shows that it was thought that my transfer from Haringey into the PCPF would be about 7 years. The actual transfer of 6 years 18 days was well short of that. Also, my record shows that I was eligible to receive the Haringey pension at age 60, not 65. I wonder if this was taken into account in the transfer calculation. These factors make me wonder if the transfer-in calculation was correct. Do you, or [***], have any comment on that.

Letter from [***], Pensions Unit, Department of Resources, House of Commons to Mr Harry Cohen, 15 June 2010 Parliamentary Contributory Pension Fund Further to my letter dated 27 May 2010, I have now received your file from rpmi. Unfortunately there are no calculations to back up the data in [***]'s letter dated 9 December 2005 regarding the date at which you would reach your 2/3rds limit. As such I

Mr Harry Cohen — Review by Sir Paul Kennedy 33

can only assume that this was a typing error. I am sorry for any inconvenience the incorrect information has caused you. With regards to your transfer from Haringey, I confirm that the retirement age under the Haringey County Council pension scheme would have been taken into consideration by them when calculating the transfer value. Previous correspondence on your file confirms that you were originally advised that you would receive 6 years and 18 days service for transferring your pension, copies of correspondence are enclosed.

Letter from Mr Harry Cohen to the Chairman, Parliamentary Contributory Pension Fund, House of Commons, 24 June 2010 I enclose, for your perusal, self-explanatory recent correspondence regarding my Parliamentary pension. Having worked 27 years as an MP and adding my previous employment pension monies, I expected to be able to retire on the full pension from the Parliamentary Contributory Pension Fund like so many other MPs in a similar position. I draw your attention, specifically, to the 9 December 2005 letter to me from [***], then Head of Pensions. It indicated that I would reach the maximum pension limit on 5 October 2009. Only in February of this year was any written indication given that this was not, apparently, the case and a large sum of money would have to be paid by me to achieve the full pension. I was not in a position to pay this large sum at such short notice. Email and written correspondence failed to elicit a written apology for what I consider a poor level of service in failing to communicate vitally important information to me in reasonable time. Email correspondence of mine received an inaccurate response that not only had no idea of the substance of [***]’s letter, but also of the effect of the transfer across. When I personally visited the Pensions Department (to ensure that I received my pension, which was actually being threatened to be paid on time, because I had complained) I did elicit an apology of sorts to my face. At the time it I felt begrudging, but (despite losing the equivalent of £10 a week for the rest of my life) I accepted it rather than take the matter to The Pensions Regulator (Ombudsman) which I had in mind to do. You will now note from the latest correspondence, that [***]’s letter is “assumed” to be a “typing error”. I do not believe or accept that at all. It adds to my belief that the apology was begrudging and not a proper one. Even in this latest letter, I have suffered more than “inconvenience” due to so-called “incorrect information”. I want to bring this matter to a conclusion. I could still take the matter to the pensions ombudsman and I actually think it would be reasonable to call upon your Committee to grant me some form of compensation, perhaps an ex gratia payment toward the loss. However, as stated before, I will accept a proper, full, unmodified, genuine apology. Please place this matter before your Fund Committee. I want that genuine, unequivocal apology and I want it to see it in the minutes of your Committee. If that does not happen I will refer this matter to the pensions ombudsman to try to get the matter finished properly. Please do the decent thing as requested.

34 Mr Harry Cohen — Review by Sir Paul Kennedy

(ii) Submission by the Department of Resources, House of Commons

Memorandum from the Director General of Resources, 13 January 2011 Case of Mr Harry Cohen Introduction 1. Thank you for inviting the Department of Resources to comment on the submission which you have received from Mr Harry Cohen. In this Memorandum I address three issues: what record exists of any notification Mr Cohen gave of his circumstances to the Department; the telephone log of 27 March 2009; and whether Mr Cohen’s circumstances were regarded as exceptional. Mr Cohen also raises concerns about the pensions advice he was given. As this is a matter for the Trustees to the Members’ Pension Scheme (the PCPF), I have passed Mr Cohen’s submission to the Secretary to the PCPF for him to respond to you directly.1 I offer no comment on whether the penalty imposed on Mr Cohen was proportionate. What notification of his circumstances did Mr Cohen give to the Department? 2. Mr Cohen said in his letter to the Commissioner of 12 May 2009 that he notified the Department about his renting out of his Colchester home when he first did so in 2001 (at the time he registered the interest); that he did so again orally on one or two further occasions; and that he did so in April 2008. In his submission to you,2 he implies that there may have been other occasions when the issue was mentioned to the Department. I shall return later to the April 2008 occasion. As far as the earlier alleged notifications are concerned, I can confirm that we have again thoroughly checked our records and can find no records of such discussions. 3. As far as any notification in 2001 is concerned, there were then no rules on what could properly constitute a main home, and few Members consulted the Department for advice on their main home. However, if advice had been sought, I would be surprised if any member of staff at the time had advised that a home which was rented out so that it could not be occupied by the Member could constitute his or her main home. 4. I am also a little puzzled by Mr Cohen’s statement that the 2001 notification to the Department about the rental occurred at the same time as the registration of the interest. Registration of interests does not take place in the Department of Resources but with officials of a different department and in a different building. Furthermore, registration normally takes place after the event to which it relates has occurred (in this case, presumably after the rental had been received). Any advice as to whether it would be proper to rent out a main home could be expected to have been sought before the rental took place. However I do not know when Mr

1 The Secretary is [***].He was formerly Director of Operations in the Department, but is no longer a House employee, though he remains Secretary of the PCPF. 2 Paras 18 and 19

Mr Harry Cohen — Review by Sir Paul Kennedy 35

Cohen rented out his property in 2001, and I do not have access to the records which show the date on which Mr Cohen registered the interest.3 5. The 2003 edition of the Green Book tightened the rules on main homes. It told Members that the location of their main home would normally be a matter of fact, and that “your main home will normally be the one where you spend more nights than any other”. Members were also encouraged to contact the Department in the case of any doubt. The rule about number of nights spent was from 2003 a cardinal principle for judging whether a home was a main home. The rule was well known to all the staff of the Department who dealt with Members on these issues, and for this reason I cannot believe that any member of the Department from 2003 onwards would have believed that he or she could properly give advice that a home which was consistently let out for substantial periods could constitute a main home. On the other hand, if a Member had said that he or she was obliged to rent out a main home for a short period because of a temporary illness, then I accept that he or she might have been told that this was acceptable.4 6. Mr Cohen was a frequent visitor to the Department. I gather that his demeanour and conversation were generally informal. I do not doubt that he mentioned his wife’s illnesses and the problems these posed for him. However, that is very different from a formal request for advice about renting out a main home. The Commissioner’s conclusions that the mentions Mr Cohen made of his arrangements were neither sufficiently full nor clear to constitute a request for advice5 are regarded by those who dealt with him as an accurate reflection of Mr Cohen’s way of doing business. 7. Mr Cohen has not suggested that he ever wrote to the Department for advice or that he sought advice from a senior official of the Department. It would have been reasonable to expect him to have done so on a matter such as this where to allow his claims to continue so clearly involved a. a substantial departure from the rules which normally prevailed; and b. a significant amount of money.

If he relied on oral advice from junior officials, this was at the very least unwise. I am absolutely confident that senior officials would have recorded any decision they took. I accept, however, that this was not the universal practice among more junior officials. In retrospect I very much regret that departmental officials were not much more scrupulous in taking notes and recording precisely the advice they offered. 8. It would be wrong for me not to acknowledge the possibility that a member of staff in the Department might wilfully have chosen to advise a Member in a way that did not conform to the rules but which was perceived as helpful to the Member. The member of staff to whom Mr Cohen spoke in April 2008 did not recall having

3 All that can be deduced from the published record is that this occurred between the date of the 2001 election and November 2001.I understand that the Registrar may have more precise information. 4 See the Director of Strategic Projects’s letter to the Commissioner of 24 September 2009. 5 Para 164

36 Mr Harry Cohen — Review by Sir Paul Kennedy

spoken to Mr Cohen about his Colchester rental when first questioned,6 but did recall the April 2008 conversation when Mr Cohen identified him as the person to whom he had spoken. That staff member and Mr Cohen then recall somewhat different versions of their discussions. The staff member concerned was subsequently sentenced to nine months imprisonment for offences of obtaining money by deception during the course of his employment, and the Department can no longer rely on his veracity, either in respect of his recollection of the April 2008 conversation or other matters. It is also possible that he gave Mr Cohen incorrect or misleading advice at some other time between 2003 and 2008: he was the member of staff in regular contact with Mr Cohen identified in the report reproduced as an Appendix to this Memorandum.7 Telephone log of 27 March 2009 9. It is most regrettable that the telephone log of 27 March 2009 did not come to light in time for it to be made available to the Commissioner and to the Committee. An inquiry into the reasons for this was instituted by the Clerk of the House, and its conclusions are attached as an Appendix.8 I have no reason to dissent from these. The Clerk has apologised to Mr Cohen, and I re-iterate that apology. 10. As to what may be deduced from the telephone log, I do not think Mr Cohen is correct to argue from his circumstances that the record of the query (see Mr Cohen’s paragraph 15) can only mean that the query should be interpreted as one about renting out his main home “some of the time”. “He rents out some his main home” seems to me to be much more likely to be an orthographical error for “He rents out some of his main home” rather than an attenuated way of saying “He rents out his main home some of the time” or “He sometimes rents out his main home”. The member of staff who dealt with this query was new and inexperienced, and is highly unlikely to have known about Mr Cohen’s personal circumstances and therefore whether or not it was practicable to rent out part of the Colchester property. 11. If the query is given its most natural interpretation, then the answer, rather than being entirely contrary to the cardinal principle about occupation in the Green Book to which I referred earlier,9 makes sense and accords perfectly with the acceptance that a Member could rent out part of his or her main home without having an effect on his or her claim for allowances. The rental income from Mr Cohen’s Colchester home was of no concern to the Department in as much as its level was irrelevant to his claims for allowances. By contrast, if a Member rented out part of his or her additional home, then the allowances paid for that additional home would be abated and what a Member did with that home therefore did concern the Department.

6 The Director of Strategic Projects did not “deny” that this official had spoken to Mr Cohen as Mr Cohen suggests in para 21 of his memorandum to you.The official denied that he had spoken to Mr Cohen until prompted by Mr Cohen’s identification of him 7 See para 9 below, and para 8 of the Appendix. 8 Mr Cohen has not pursued with you the issue of the Director of Strategic Projects’s suitability for communicating with the Commissioner, but that is included for completeness. 9 See para 5 above

Mr Harry Cohen — Review by Sir Paul Kennedy 37

12. I do not mean to suggest that Mr Cohen was purporting to ask for advice about circumstances other than his own—the telephone log occurred two days before the Mail on Sunday story appeared, and his request to the Department is likely to have been occasioned by the journalist’s notice of the story the paper intended to run. I understand that this will have been a stressful time for Mr Cohen, but I am sure that he would have been asking about his real circumstances. However, my own reading of the record is that the departmental official who dealt with the call misinterpreted the query which had been made, presuming that it was a query about renting out a part of a main home. I note that when Mr Cohen again contacted the Department a few days later on 3 April 2009 about his wife’s illness and his ACA claims, he was advised to put his query in writing. 13. The Director of Strategic Projects tells me that, if he had seen the telephone log of 29 March before he wrote to the Commissioner, he would of course have disclosed it to the Commissioner, and that he would have spoken to the official who made the log entry. He would also have asked whether this was evidence of advice having been offered that the Department was indifferent to what Members did with their main home. But he does not believe that the existence of that entry would have affected his conclusion about the rules of the House at the time of Mr Cohen’s claims. Whether Mr Cohen’s circumstances were regarded by the Department as exceptional 14. In Mr Cohen’s view, the circumstances in which he found himself as a result of his wife’s episodic succession of serious illnesses were not normal and therefore the rule which the Green Book contained from 2003 onwards that a Member’s main home should normally be the one where he or she spent the most nights should not apply to him. That this rule should apply in the “vast majority of cases” was restated in the Fifteenth Report of the Committee on Standards and Privileges of Session 2007–8.10 Nevertheless, both the rule and the Committee’s subsequent report imply that exceptions to the normal rule do exist. 15. The Department was prepared to accept that the Committee might take the view that Mr Cohen’s circumstances were indeed of this exceptional nature.11 It was the judgement of the Commissioner, endorsed by the Committee, that Mr Cohen did not in fact occupy the Colchester property to the extent necessary for it to constitute a main home for the purposes of the allowances between April 2004 and August 2008. Having now studied the facts which have come to light in this case, the Department has no reason to disagree with that conclusion. 16. Nevertheless, (if, as I think is reasonable, the assumption is made that Mr Cohen did not in fact fully disclose all the facts about his letting arrangements to the Department) it is important to note that the Department did not come to a contemporaneous judgement (or at the very least, a contemporaneous judgement based on full knowledge) about whether Mr Cohen’s circumstances were exceptional and therefore whether his Colchester home could be regarded as his main home during the periods it was let out.

10 HC 1127 para 6.This report is quoted selectively in Mr Cohen’s submission to you. 11 See final sentence of Director of Strategic Projects’s letter to the Commissioner of 24 September 2009.

38 Mr Harry Cohen — Review by Sir Paul Kennedy

17. As part of his inquiry, the Commissioner asked the Department to make a retrospective judgement about Mr Cohen’s arrangements. The Department first expressed the view that it was “difficult to understand how a property which was rented out could constitute a Member’s main home”.12 When pressed by the Commissioner, the Department expressed the view that there was a presumption that a Member needed to be able to occupy a home for it to qualify either as a main or an additional home for the purposes of allowances (though there were exceptions such as inability to occupy because of circumstances such as flood or fire).13 18. I therefore partially agree with Mr Cohen’s argument that what the Department said about the rules in response to the Commissioner was a statement about how officials ought to have interpreted the rules. The difference between my view and that of Mr Cohen is as to whether officials were asked for an interpretation at the time based on a full disclosure of the facts and, if so, if they interpreted the rules in a different way from the way they ought to have done. Conclusion 19. I hope this commentary is useful. I am very happy to assist your inquiry in any way I can. APPENDIX INQUIRY FOR THE CLERK OF THE HOUSE REPORT BY THE DIRECTOR OF SERVICE DELIVERY, DIS, 9 July 2009 Complaint from Mr Harry Cohen

1. You asked me to conduct an inquiry into a complaint from Mr Harry Cohen about the provision of information to the Parliamentary Commissioner for Standards in connection with his case, which was reported on in the Seventh Report from the Committee on Standards and Privileges 2009–10 (HC 310). In a letter to you dated 4 June, Mr Cohen complains that the Director of Strategic Projects, was negligent and incompetent, resulting in inaccurate information being provided to the Commissioner for Standards. 2. I should say at the outset that, having worked in the House for nearly 34 years, I know some—but not many—of the staff in the Department of Resources, certain of whom I have learned were involved in this particular chain of events. I have never myself worked in that department and have only general ‘lay’ knowledge of the processes by which it works. I assure you, and Mr Cohen, that I have not allowed any personal considerations or prior knowledge to affect my investigation of Mr Cohen’s complaint. Background 3. Mr Cohen makes two specific complaints, which I deal with separately below.

12 Director of Strategic Projects’s letter to the Commissioner of 14 July 2009. 13 Director of Strategic Projects’s letter to the Commissioner of 22 July 2009.

Mr Harry Cohen — Review by Sir Paul Kennedy 39

• That the Director of Strategic Projects was not the right person to correspond with the Commissioner. Mr Cohen notes that he is not on the Department of Resources letter heading as an officer with practical responsibility for the operations of the department and its relations with Members and says that he was “arrogant to assume this role”, with the result that—in Mr Cohen’s case—he presented “a theoretical attitude of what the Department’s position was, not what it actually was”. • That the Director of Strategic Projects omitted from his correspondence with the Commissioner an important piece of evidence and thereby misrepresented the Department’s true position as regards Mr Cohen’s Additional Costs Allowance claim. The evidence referred to here is an EAT (Enquiries and Advice Team) log dated 27 March 2009 which came to light when the police asked to look at Mr Cohen’s expenses records. The Director of Strategic Projects’s status 4. In respect of the first complaint, I have spoken to both the Director of Strategic Projects and to the Director General, Resources, who heads that department. The Director of Strategic Projects is a senior and very experienced official of the Department of Resources but is not listed on the department’s headed notepaper because he is not part of the departmental management team. He was asked by the Director General to take some of the workload of the Director of Operations during the extremely busy period last year when the department was dealing with large numbers of cases and questions and took the lead on all cases involving the Commissioner’s investigations after the Director of Operations left the House Service, and all ACA cases prior to that. The Director General, Resources, told me that he had full confidence in the Director of Strategic Projects carrying out this work and that the Director of Strategic Projects is “a rational and sensible interlocutor.” I therefore conclude that it was legitimate for the Director of Strategic Projects to correspond with the Parliamentary Commissioner on these matters and that there was no ‘arrogance’ on his part in assuming the role. Indeed he did not assume the role—he was asked to carry it out by the head of the department, who is a member of the House’s Management Board. The missing EAT log 5. The core of Mr Cohen’s complaint is the second issue noted above: Mr Cohen says that “my complaint is totally focussed on the omission and failure to refer to the relevant EAT log.” I have looked carefully into this. The background is that, on 9 June 2009, the Commissioner wrote to the Director of Operations and said “It would also be useful to know about any discussions Mr Cohen had with your staff about these matters in the light of his comment in his letter of 12 May that he contacted you about his arrangements.”14 The substantive reply to this was from the Director of Strategic Projects in a letter dated 14 July,15 in which he said

14 Seventh Report of Standards and Privileges Committee 2009-10, HC 310, Written Evidence (WE) 16. 15 WE 18.

40 Mr Harry Cohen — Review by Sir Paul Kennedy

Mr Cohen states that he had a number of conversations about his arrangements with staff in this Department over a period of time, the last being during 2008; he also states that he was told more recently that this arrangement was no longer acceptable. Mr Cohen is a frequent visitor to the Department of Resources where he discusses many aspects of his allowances with a variety of staff, mainly those in the Enquiry & Advice Team (EAT). Staff have been asked if they recall any conversations about Mr Cohen's altered arrangements and the rental of his Colchester home; none of them recall any such discussion. We have no written correspondence which formalises such an agreement. It would be helpful to know who Mr Cohen spoke to on these occasions. The EAT log of telephone calls does show that Mr Cohen spoke to one of that team on 3 April 2009 concerning his ACA designation and his wife's ill health. The log is not a complete record of the conversation as there is limited space available for comment; however it is clear that Mr Cohen was advised to detail his arrangement in a letter to the Department. No letter has been received. 6. As Mr Cohen points out, the EAT log of 27 March was not referred to in this reply. 7. I have spoken to several Department of Resources staff about how the department responded to the Commissioner’s request to know about any discussions the department had had with Mr Cohen in the relevant period. It should be noted that this was a year or more ago, and that all staff were very busy indeed, over a sustained period. One of the staff I spoke to described it as “absolutely manic” because there was a limited number of staff who were sufficiently knowledgeable to deal with all the demands that were being made of them. What I have learned is based on their memories and therefore cannot be assumed to be the complete story; nonetheless I believe that the main elements are as described in the following paragraphs, though some of the finer detail may not be precisely as things were at the time. 8. The Director of Strategic Projects delegated the task of finding out whether there had been discussions with Mr Cohen to [staff member 1]. He has, however, confirmed to me that he takes full responsibility for the actions that were taken and for the statements he had made in his letters to the Commissioner. [Staff member 1] is a very experienced official in the department. She carried out the task in two main ways. First, she asked a member of the team, whom she knew was a regular contact of Mr Cohen’s, whether he could remember speaking to Mr Cohen in the period in question; he said that he did not recall any questions on the subject of his ACA claim. She also asked three or four other staff a similar question; none of them could recall any such contact. She did not, however, ask all staff who might have had such a conversation with Mr Cohen; one, she recalls, was on sick leave at the time and she does not think that she spoke to some others. I asked her specifically whether she spoke to [staff member 2] who had recorded the EAT log of 27 March. She thought that she had probably not done so. That impression has been confirmed by [staff member 2] who does not remember [staff member 1] asking her if she had had any conversations with Mr Cohen.

Mr Harry Cohen — Review by Sir Paul Kennedy 41

9. As well as asking various members of staff, [staff member 1] also asked for a search of the EAT log to be carried out, because any conversations that broadly provided advice should have been recorded there. Not all calls are recorded on the EAT log; just those where advice is provided. The ability to search the EAT database is limited to the EAT team and their manager, so [staff member 1] asked [staff member 3], one of the EAT team, to do this for her. He did this under her supervision. 10. Searching on the EAT log brings up results in reverse chronological order, and displays the records one at a time. In other words, there is not a single display which shows a number of EAT records. When [staff member 3] searched the database, he found the record of the call from Mr Cohen on 3 April that was referred to in the Director of Strategic Projects’s letter of 14 July—a call which [staff member 3] remembered. Precisely why the search did not then continue is now unclear in the memories of both [staff member 1] and [staff member 3]—it may have been that finding the 3 April record somehow jogged their memories and was seen to be sufficient—but it is clear that the search that was carried out was not an exhaustive search for any record of contact with Mr Cohen over the period in question. 11. I am satisfied that the EAT log in question was not deliberately suppressed. Indeed, I have been assured that, had it been found, it would have been referred to in the Director of Strategic Projects’s correspondence with the Commissioner for Standards, most probably with a rider that the record was not consistent with departmental policy and observing that the log was ambiguous—it is unclear whether “he rents out some his main home” means “he rents out some of his main home” or “he rents out his main home some of the time.” I asked [staff member 2], who took the call, about this. She only vaguely remembers the call and does not remember precisely what the question was. She had been in the department for only a short time on 27 March and would have asked the advice of a more experienced member of staff at a nearby desk before replying to the caller phoning on behalf of Mr Cohen. Conclusion and recommendation 12. In respect of Mr Cohen’s second, and central, complaint, I conclude that, while some attempts were made to respond to the Commissioner’s request to know about any discussions between Mr Cohen and Department of Resources staff, these were not comprehensive. Not all the staff who might have had such a conversation were spoken to, and the search of the EAT database, which should have produced the record in question, was not thorough. It is not for me to judge how material this log is to the Commissioner’s investigation of Mr Cohen’s case, but I recommend that (i) the EAT record of 27 March should now be drawn to the attention of the Parliamentary Commissioner for Standards and to the Committee on Standards and Privileges; and (ii) an apology should be made to Mr Cohen.

42 Mr Harry Cohen — Review by Sir Paul Kennedy

(iii) Letter from the Secretary to the Trustees of the Parliamentary Contributory Pension Fund

Letter to the Rt hon Sir Paul Kennedy from [***], Secretary to the Parliamentary Contributory Pension Fund, 13 January 2011 As Secretary to the Trustees of the Parliamentary Contributory Pension Fund (PCPF) I have been asked to write to you about the pension position of Mr Harry Cohen, the former Member of Parliament for Leyton and Wanstead. I have been shown a submission to you from Mr Cohen, which in paragraph 32 mentions his pension entitlement and the ‘loss’ he considers arose as a result of advice provided by the Pensions Unit. The Trustees very much regret that incorrect information was given to Mr Cohen in December 2005 by the then Head of Pensions, [***]. [***] advised Mr Cohen that he would reach his maximum pension entitlement in October 2009, whereas Mr Cohen would not have reached that position unless he remained an MP until September 2010. However, any loss to Mr Cohen is not entirely obvious for reasons explained below. In 2002 Mr Cohen had the choice whether to change his pension accrual rate from fiftieths to fortieths, which would have had the effect of bringing the date at which reached his maximum entitlement forward. He chose to remain on fiftieths. From 2002 until December 2009, under the pension scheme rules, it was not possible for any scheme member to alter their pension accrual rate (and the associated contribution rate). Hence, even if Mr Cohen had noticed immediately in 2005 that [***]’s letter was incorrect, he could not have changed his PCPF pension arrangement to hasten reaching his maximum pension entitlement. The pension scheme ruled changed in 2009 to allow existing Members a one-off opportunity to revise their pension accrual rate and to backdate this to either April 2008 or April 2009, subject to the appropriate increased contributions being paid. In December 2009 the Pensions Unit wrote to all Members to advise them that as a result of these changes, it was possible to increase (or reduce) their pension accrual rate in exchange for the payment of a higher (or lower) pension contributions. This letter prompted Mr Cohen to ask to meet staff from the Pensions Unit to discuss the changes. At the meeting, Mr Cohen was presented with options for increasing his pension accrual rate in order to increase his PCPF pension on retirement. One option would have required his to pay some £5000 (gross) in order to increase his accrual rate from fiftieths to fortieths from April 2008. Mr Cohen said that he could not afford to top-up his pension. Mr Cohen also said that he had not been provided with sufficient information to enable him to top-up his pension in previous years. It was pointed out to Mr Cohen that there had been no facility to change his pension accrual rate since 2002. It was also drawn to his attention that his annual benefit statements gave information on his pension entitlement and that it was apparent from these statements that his estimated pension in May 2010 would be less than the maximum pension (ie that he ought to have considered his overall pension position if his estimated income in retirement was a matter of concern). It was after this meeting that Mr Cohen discovered the earlier correspondence from [***] and drew it to the attention of the Pensions Unit and the Trustees.

Mr Harry Cohen — Review by Sir Paul Kennedy 43

Turning to the question of the loss Mr Cohen Attributes to the incorrect information provided in 2005, arguably, this could arise in the event of one of the following circumstances i. That the incorrect pension advice in 2005 significantly influenced his decision to stand down as a Member of Parliament in 2010. This seems improbable. ii. That the incorrect advice led him to discount entirely the idea of making any other provision for his retirement, notwithstanding the information that was sent to him over the intervening period. It is my opinion that the Trustees took the view that Mr Cohen had had opportunities to improve his final PCPF pension. Any such decision by him would have involved the payment of increased contributions into the pension fund. For whatever reason, Mr Cohen chose not to avail himself of these opportunities. The incorrect advice was nonetheless regrettable. It is not clear from the documentation provided to what use he put the money that he would otherwise have had to pay by way of additional contributions. I can confirm that he did not take up any other savings options that are available as part of the pension scheme, such as the Additional Voluntary Contribution (AVC) scheme within the PCPF, to increase his income in retirement. Mr Cohen raised the matter of the incorrect advice directly with the Trustees, who considered his case in October 2010. His letter informed the Trustees that if he received an apology he would not raise the matter with the pension ombudsman. The then Chairman of Trustees sent his a personal apology that same month. I hope that this explains the position.

(iv) Further Submission by Mr Harry Cohen

Amended Response to the Memorandum from the Director General of Resources and the letter from [***], 7th February 2011 1. Thank you for the opportunity to comment on the Memorandum from the Director General of Resources and the letter from [***]. I will address each in turn. Memorandum from the Director General of Resources 2. I will comment following the paragraph numbering of that Memorandum before adding some more general observations. 3. Paragraph 2: a. Mr Walker implies that my evidence about the number of oral conversations with staff members between 2001 and April 2008 may be inconsistent. I am not seeking to alter what I told the Commissioner in my letter to him of 12 May 2009, when I wrote of notifying the Fees Office “on three or four occasions of the renting.” In the interview of 3 November, I spoke of a conversation in 2001 and another in 2004 but also of other conversations with the Fees Office on

44 Mr Harry Cohen — Review by Sir Paul Kennedy

other occasions (see the Committee’s report, Evidence Items 7 and 41, under “The Rules”). b. In relation to the statement that the Department has “again thoroughly checked our records and can find no record of such discussions”, if this is thought to suggest that such conversations did not in fact take place, I would point out: (i) the Department has previously indicated that it no longer keeps records relating to claims before April 2004 (see letter to the Commissioner from the Director of Strategic Projects, Department of Resources of 14 July 2009); and (ii) in any event, Mr Walker acknowledges at paragraph 7 that junior officials, at least, would not have had a “universal practice” of documenting the advice given or decisions made. It seems that what I was saying was not considered important enough to document—which is completely consistent with the fact my practice was being treated as conforming to the rules. 4. Paragraph 3: the assertion made by Mr Walker (“I would be surprised ...”) is not (as he of course acknowledges) based on actual knowledge of any advice given at the time, or the advice that was given in March 2009. Moreover, it fails to take into account the point he makes at paragraph 5, in relation to the period after 2003: that temporary lets would have been treated on a different basis. There is no reason to suppose that the same qualification should not be made in respect of the earlier period. If anything, the absence of a formal definition of a “main home” until 2003 strengthens the case that notification of a temporary let of a main home would not have been queried or treated as a cause for concern. 5. Paragraph 4 . Whilst it is true that the Department of Resources and the Registration of Members’ Interests are physically separate departments, there is often a practical connection between the two for Members, as the issues they deal with may overlap. Invariably, in my experience and in my case, consulting one gives a reminder to do so with the other. If the notification of my circumstances that I gave was not considered important enough for staff to record at that time that must be a reflection of the existing culture or attitude to the propriety of the claim at that time. 6. Paragraph 5. I did properly notify the Department of the lets made from 2003 onward in my discussions with officials, and received no indication that they were not proper. If I had I would have acted on it immediately. When Andy Gibson advised, in 2008, that I should terminate the rental arrangement, because of changing public perception, I did so straight away. 7. The Director General again confirms that it was acceptable to rent out a main home for a short period because of a temporary illness. My wife and I most certainly thought of her illness as temporary, and the lets as short-term. It should be noted that practically it is next to impossible to let for less than a six month period, and this is what I did, reviewing at the end of each period. In the circumstances, these lets, therefore, were temporary. We certainly thought they were, and the plans we had at the time were based on that belief. This is a key factor in my case, and I have always maintained that the ‘episodic’ nature of my wife’s illness (to use Mr Walker’s phrase, paragraph 14) has not been truly recognised. (For details of her condition, please see her statement of 12 May 2009).

Mr Harry Cohen — Review by Sir Paul Kennedy 45

To date, judgments have been made on the basis of her suffering permanent, gradual ‘deterioration’. Hence, the judgment that I should have reassessed the situation at the beginning, and that her new condition could be deemed ‘normal,’ not ‘exceptional’. Recognition of the ‘episodic’ nature of her ill-health, I believe, challenges these assumptions. I return to this point below. 8. Paragraph 6 . I was always polite and courteous to staff, as they were to me. I am surprised my courtesy is characterised in the Memorandum as “informality”, and held against me. As far as I was aware, both I, and the Department’s staff, considered this way of dealing with issues affecting Members (not in a formal manner) was custom and practice, and was not merely “my way” of “doing business”. 9. Whilst the Commissioner’s conclusion that my discussions did not “constitute a request for advice” is highlighted by Mr Walker, he does not acknowledge that it was never suggested to me that I should request advice in another, more formal fashion. It is worth noting that Speaker Martin, strongly reiterating earlier Speakers’ advice to Members, said members should regularly consult with the Department of Resources, including for advice. He did not say this had to be done formally or with senior staff. I would suggest that what the Director General implies should have been done was never seen as necessary, at the time of the events we are discussing, and represents the judgment of hindsight. 10. If I was not asked to seek advice more formally, in my view that was for two reasons: (a) because it was not the practice of the time (see paras 7 and 8, above) and (b) because what I was telling the Department about my circumstances was not seen as untoward or as raising issues which required further exploration. 11. Paragraph 7. I repeat the same points in relation to Mr Walker’s argument that I should have sought written advice, or asked a senior official for advice. What he suggests was “clear” is, with respect, the judgment of hindsight. The suggestion that the claims “clearly involved .. a substantial departure from the rules which normally prevailed” does not allow: (i) for my own belief at the time, that the arrangements we made were temporary ones; (ii) the absence of queries from officials; and (iii) the evidence of the note of March 2009, of the Department’s expressed view that “what he does with his main home has nothing to do with the allowances or the department”. 12. Mr Walker acknowledges that junior officials, at least, did not always record the advice and decisions they took. It would appear that it is highly likely that this was an important factor in my case (or at least in the difficulties which are now being experienced in getting to the bottom of what advice or information I was given at the time). However, I would point out that these officials were, presumably, operating in accordance with what was the accepted practice at the time, and in accordance with whatever training they were given. Junior staff appear to have had considerable autonomy. Furthermore, whilst Mr Walker stresses the junior status of such staff members, it was reasonable for me to assume that they were operating within their authority; or, if a staff member was uncertain about any matter, they would seek advice and help from a more senior member (as happened when I called in March 2009). It cannot be the case that only a written request to a senior member of staff would have been good enough.

46 Mr Harry Cohen — Review by Sir Paul Kennedy

13. Paragraph 8. This is a key paragraph, and leads to the conclusion, I would suggest, that there is no reason whatsoever to disbelieve the account which I have given of the advice I received. Mr Walker helpfully acknowledges that possibility at the conclusion of paragraph 8, in speaking about the reliability of a staff member with whom I was in regular contact. Personally, I do not believe that any member of staff I spoke to was giving “wilfully misleading” advice; but speculation about staff’s motives is probably fruitless. 14. One of the aspects of this paragraph that is interesting is that it confirms how I might remember a conversation (which was important to me) when the staff member in question forgot it, as it was no more than one of many encounters with MPs. Thus, initially Mr Gibson, to whom I spoke in April 2008, did not remember the conversation or denied that he had spoken to me; it was only when I identified him that he remembered the conversation. This demonstrates, in my view, that my memories of interactions with staff are far more likely to be reliable than theirs are now. 15. Paragraph 9. I am grateful for, and accept, the apology of the Director General. 16. Paragraphs 10–13. The contents of paragraphs 10 and 11 have to be read with paragraph 12, in which Mr Walker accepts that I was indeed enquiring about my own circumstances. I have previously made the point I would never have asked about renting out a “part” of our home; it would not have been a practical possibility given the layout of the home (see my submissions of 15.12.2010, paragraph 15), and we never contemplated any such action. So it appears to be accepted that I truly did ask about the practice of renting out our main home “some of the time”. The question is whether my question was misinterpreted by one or both of the two officials involved in replying (a senior official was consulted) or whether the answer given accurately related to my query. 17. Mr Walker’s reply is based upon extrapolations from the log records, not on additional evidence from the staff members concerned (see paragraph 11 of the Appendix; the official who took the call could not add further details about the call). There is no plausible explanation of why it should be that a query about renting out the whole house sometimes/some of the time should have been mistaken for a query about renting out some or part of a house—they are fundamentally different situations and I do not believe that it is plausible to suggest that even a new staff member could have misunderstood the query. I believe that I should be given the benefit of any doubt about this exchange. Essentially, Mr Walker puts forward an explanation of the log records which is consistent with his understanding or interpretation of the rules, but that does not allow for the possibility that the practical understanding of their application in the Department had in fact been otherwise, and less exacting, than the interpretation which is now sought to be applied. Nor do I accept that his linguistic construction of the log book record is more plausible than one which accurately reflects the query which was in fact made. 18. Paragraphs 14–18. Whilst the Director General accepts that the “Department was prepared to accept that the Committee might take the view that Mr Cohen’s circumstances were indeed [exceptional]”, in effect he defers to the view that the Committee and Commissioner reached. I have always maintained that, with

Mr Harry Cohen — Review by Sir Paul Kennedy 47

respect, these conclusions gave insufficient weight to the circumstances of my wife’s illness and the fact that the set-backs were indeed “episodic”, to adopt the word used by Mr Walker at paragraph 14. 19. I do not accept, as Mr Walker does, that it is “reasonable” to assume that full disclosure was not made by me about my letting arrangements. I have tried throughout to explain that I was open and above-board with the office. Mr Walker has acknowledged (para 6) that I was a frequent visitor at the Department; that junior officials at least did not take the notes or make the records they should have done (para 7), and that there is at least a “possibility” that one of the members of staff with whom I was in regular contact between 2003–2008 gave me incorrect or misleading advice. There is also the matter of the advice contained in the March 2009 log. Against that background, the evidence which I have given about what I said, and the absence of any query or request for further details, should be accepted. It is not fair to judge me on the basis of the interpretation which the Department would now wish place on events, at this remove, and when the nature or duration of my wife’s illnesses is being judged with the benefit of hindsight. 20. I make some more general observations at paragraphs 34–36 below. However, I would urge you to take the view that, with the benefit of the new evidence, Mr Walker’s acknowledgment of the possibility of staff giving advice that he would disagree with, (and also with the police having dismissed any criminal case), my evidence of my interactions with the Fees Office should now be accepted and the gravity of any errors made should be fundamentally reassessed. 21. In his opening para, [***] refers to ‘the loss I consider arose as a result of advice provided by the Pensions Unit.’ He does, it seems, acknowledge that there was indeed a loss. The point I have been seeking to make is two-fold: a. I did lose as a consequence of wrong or inadequate information at crucial times; b. that I was in no position to rectify the situation, in March 2010, in the short timeframe possible to do so, when just six weeks before a penalty of £65,000 was imposed on me.

22. Whilst I respond to his letter below at some length (since it is a detailed one), the essential point, at (b) above, is a fairly simply one. I am not trying to claim that there was no opportunity given to me to make good the loss suffered; I am just pointing out that I was unable to do so because of the fact that the timing coincided with the judgment on my ACA claims, so that the two are closely linked. 23. [***] says that in 2002, I had the choice to change my pension accrual rate from fiftieths to fortieths. I chose to remain on fiftieths. That was a logical decision, based on the understanding that I was getting to the full pension level in good time; in this respect, before the May 2010 likely election date. If I had switched to fortieths, I would have reached the maximum soon, then for a considerable period of time not paid contributions at all. It seemed better for me to spread out my contributions. I was given no advice on what was for the best in this matter, other than [***]’s indication that I was likely to be paid up fully in good time by

48 Mr Harry Cohen — Review by Sir Paul Kennedy

continuing on fiftieths. This was communicated to me verbally, as well as via the letter, a copy of which I have included in my submission. 24. [***] says even if I had noticed [***]’s letter was incorrect, I could not have changed my pension arrangements. This is incorrect. He himself later refers to the possibility of additional voluntary contributions. I also could have made other specific pension saving arrangements. Unfortunately, I did not believe the information from [***] (the then Head of the Pensions Department) was incorrect, and so did not consider these options at an earlier date. 25. [***], in his 4th para, refers to the 22 December 2009 letter to members. I enclose a copy. This was a general letter, without personalised information as to how it related to my position. It was reasonable, on my part, I believe, to think [***]’s information still applied to me (it had not been corrected) and so the possible change was not thought necessary. The letter was confusing too, and gave no indication why I should change if I wanted maximum pension when I understood that I was well within the time for it with my existing arrangements. In any event, we are now discussing events at the time of the Select Committee investigation (their report was published on 19 January 2010), and the meeting which followed. Crucially, I was now in no position to make changes to my pension arrangements. 26. The meeting that I had with pension officials was after the March 2010 letter, but the principle meeting held, which should have provided relevant figures for achieving a full pension, but did not, was in July 2009. The ‘early 2010’ meeting [***] refers to in his 5th paragraph seems to be the one after the March 2010 letter which told me for the first time the relevant figure needed to get the full pension. That meeting only took place because I went across to complain about the subsequent description of [***]’s 2005 letter, which I had forwarded, as a typing error. 27. In his 6th para, [***] maintains that I was told at the meeting I had not been able to change my arrangements since 2002. However, this does not take account of AVCs or other pension arrangements. He refers to the annual statements, but they were more generalised in the information given that [***] implies. I enclose a copy of the September 2009 statement —you will see that it is not apparent when the pension would reach the maximum level and/or contributions cease. He states that after this meeting, I “discovered” [***]’s letter. I do not see how he is in a position to make such an assertion; I always had it in mind and believed its contents to be factually correct. 28. Turning to his 7th para, he is inaccurate in saying the loss could arise in the event of only one of the two circumstances he lists. My point has been that, effectively, I was given no time to rectify the situation one way or another because of the effect of the £65,000 penalty upon me that had been imposed just weeks before. [***]’s suggestion that my belief in my pension arrangements did not influence my decision to stand down as an MP in 2010 is pure speculation on his part. Of course, I grant that it was not the main factor (the main factor was the effect of the expenses investigation), but it most certainly was a factor; i.e. that I would be able to retire on a full pension with nothing more to pay to achieve that.

Mr Harry Cohen — Review by Sir Paul Kennedy 49

29. In his 8th para, I am surprised that [***] feels able to offer an opinion about the Trustees’ view. That was not recorded as such in any communication with me. The Trustees apologised for the wrong information given to me. There was no other point made in the Chairman’s letter, and it seems regrettable that [***] seeks to undermine the spirit in which it was offered. 30. Then in his 9th para, [***] says “it is not clear … to what use I put the money that I would otherwise have had to pay by way of additional contributions.” Of course I accept that I have not paid the additional contributions. But [***] implies here that as a result I should have had large, or at sufficient, cash savings to have paid the £5,000 to get the maximum pension at the time, when the opportunity was offered. I did not, in the circumstances of the Committee’s penalty regarding my resettlement allowance. 31. [***] says that I did not take up other savings options available as part of the pension scheme. But why should I have done, on the basis of [***]’s information which I believed to have been correct? This is a red herring. 32. However, as I have acknowledged throughout, the principal reason that the pension error could not be rectified in the very short time span available to do so, was because of the £65,000 penalty imposed on me just before that time. The expectation of receiving this allowance, or even a proportion thereof, would have enabled me to release an amount from my small cash savings to pay the £5,000 needed to secure a full pension in retirement. 33. Overall, I regret to say that I do not consider [***]’s letter, alters my view of his Department’s management of my pension arrangements. I am suffering loss as a consequence which will be ongoing (should I and my wife live that long) for a long time. Proportionality 34. You have been asked to look again at whether the breaches of the rules found amounted to a “particularly serious” breach, and at the proportionality of the sanction applied. In looking at both of these matters, I would ask you to take account of the following factors: a. The fact that I have acted honestly and in good faith throughout. This, and the fact that I never sought to conceal the lets of my Colchester house, have previously been accepted. The fact that there has never been any ‘finding’ of dishonesty against me has now been underlined by the dropping of the police investigation. This aspect of the matter deserves, in my submission, much greater weight. b. Linked to this are the extenuating circumstances in my case. First, it cannot be doubted that my wife’s succession of illnesses or accidents, coupled with my Parliamentary duties, both placed me under strain but also help to explain how we hoped at every stage that each set-back was temporary. It is against that background that the failure not to reassess our circumstances, at the earliest possible stage, must be judged. Second, the absence of any ‘warning lights’ from the Fees Office staff until 2008, despite my conversations about my circumstances, is also an essential part of the

50 Mr Harry Cohen — Review by Sir Paul Kennedy

narrative which developed. I will not repeat again the points made above, or in my previous submissions. My responsibility for what occurred (see paragraph 35 of my submissions of December 2010) must be judged against that background. c. My length of service as an MP (27 years). The entitlement to the resettlement grant built up over that long period of years; the errors of judgment found span the relatively limited period of 2003/2004 – 2008. See paragraph 31 of my original submissions. d. The devastating effect that this matter has had upon me and my wife. The timing of the Select Committee inquiry and police investigation forced me not to stand for re-election, although I had been re-selected unopposed. See paragraph 30 of my submission of 15.12.2010. In general, the effect of this whole matter on my reputation has been devastating. It was only after the General Election that the police confirmed that there would be no criminal prosecution; and only after the General Election that this current re-consideration of the Select Committee’s sanction has taken place. In addition, the long-drawn out process, now spanning two stressful years, has imposed serious strains on the wellbeing of my wife and me. e. The loss of the pension entitlement, which has been discussed above. 35. Conclusion. In all the circumstances, I would urge you to find that these circumstances do not warrant being deemed “a particularly serious breach of the rules by Mr Cohen”, and/or that the sanction was disproportionate. 36. Next steps. I hope that it would now be possible to bring this matter to a conclusion. If there are any matters in this letter which require clarification by me, I am of course happy to assist. I note that your terms of reference envisage that it may be unlikely that you will feel it necessary to hold any oral hearings. If you are minded to disbelieve any aspect of my evidence, I would like to be heard and I am of course willing to attend any meetings if you think they will be helpful. However, unless this is the case I hope that you now have the material in your possession to bring this matter to a conclusion.

Mr Harry Cohen — Review by Sir Paul Kennedy 51

Formal Minutes

Tuesday 15 March 2011

Members present: Mr Kevin Barron, in the Chair Sir Paul Beresford Matthew Hancock Tom Blenkinsop Mr Oliver Heald Annette Brooke Heather Wheeler

Draft Report (Mr Harry Cohen — Review by Sir Paul Kennedy), proposed by the Chair, brought up, read the first and second time and agreed to.

One Paper was appended to the Report.

Resolved, That the Report be the Thirteenth Report of the Committee to the House.

Ordered, That the Chair make the Report to the House.

[Adjourned till Tuesday 29 March at 9.30 am