the conduct of lord paul

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H OUSE OF LORDS

Committee for Privileges and Conduct

4th Report of Session 2010–11

The Conduct of Lord Paul

Ordered to be printed 1 October 20108

Published by the Authority of the House of Lords

London : T he Stationery Office Limited£17.50

HL Paper 37



2 4TH RPT FROM TH E COMMITT EE FOR PRIVILEGES AND COND UCT

The Committee for Privileges and Conduct T he C omm ittee for Privileges and C ondu ct is appointed each session by the H ouse to considerquestions regarding its privileges and claims of peerage and precedence and to oversee theoperation of the Code of Con duct. D etailed consideration of matters relating to the Code of

Cond uct is undertaken by the Sub-Com mittee on Lords’ Cond uct.

Current M embershipT he Members of the Committee for Privileges and Conduct are:Baroness Anelay of St JohnsLord Bassam of BrightonLord Brabazon of Tara (Chairman)

Lord Brooke of Sutton MandevilleBaroness D’SouzaLord EamesLord Graham of EdmontonLord Howe of Aberavon

Lord Irvine of LairgLord Mackay of ClashfernLord M cNallyBaroness Manningham-Buller

Baroness Royall of BlaisdonLord Scott of FoscoteLord Shut t of GreetlandLord Strathclyde

T he Memb ers of the Sub-Committee on Lords’ Cond uct are:Lord Cope of BerkeleyLord DholakiaLord Irvine of Lairg

Baroness Manningham-Buller (Chairman

)Baroness O’Neill of Bengarve

The Code of Conduct and the up-to-date Register of Lords’ Interests are on the Internet athttp://www.publications.parliament.uk/pa/ld/ldreg.htm .

General InformationGeneral information about the House of Lords and its Committees can be found at

Contacts

http://www.parliament.uk/lords/index.cfm.

General correspondence should be addressed to the C lerk of the Comm ittee for Privileges and

Cond uct, Hou se of Lords, London, SW1A 0PW (telephone 020 7219 8796).

Correspondence relating to the work of the Sub-Committee on Lords’ Conduct should beaddressed to the Clerk of the Sub-Committee on Lords’ Conduct, House of Lords, London SW1A0PW (telephone 020 7219 8750).



4TH RPT FROM TH E COMMITT EE FOR PRIVILEGES AND COND UCT 3

CONTENTS

Paragraph Page

The Conduct of Lord Paul 7

Introduction 1 7

Process 4 7

The Sub-Commit tee’s findings 9 8

Lord Paul’s appeal 18 10

The views of the Commit tee 21 10

Appendix: Report from the Sub-Comm it tee on Lords’ Conduct 13

EVIDENCE

Evidence considered by the Sub-Comm it tee on L ords’ Conduct

Documents Relating to the M embers’ Reimbursement Scheme

House of Lords Journals 25 July 1991 1

House of Lords Journals 10 N ovember 2004 2

M embers’ Reimbursement Allowance Scheme General Guide Fifth

Edition October 2005 2

M embers’ Reimbursement Allowance Scheme Quick Guide September 2005 14

The Clerk of the Parliaments’ Guidance on the Investigation of Complaintsrelating to M embers’ Expenses published on 20 October 2009 15

Published Extract from the M inute of the House Committee Meeting of 26

January 2010 16The Clerk of the Parliaments’ Report on Lord Rennard Published on 20

October 2009 17

The Clerk of the Parliaments’ Reports on N ine M embers Published 9

February 2010 18

The Clerk of the Parliaments’ Reports on Four M embers published 31

M arch 2010 21

Lord P aul’s Claim F orms

Table showing the pattern of Lord Paul’s claims for reimbursement of

travel expenses between January 2005 and July 2006 24Calendars representing the days on which L ord Paul claimed for the

reimbursement of travel 25

Lord Paul’s Claim Forms 29

Article from the Sunday T imes Newspaper 11 October 2009

Gordon B rown’s M illionaire and £ 38,000 expenses 38

Letter of Complaint

Letter from M r Angus Robertson M P to M r Brendan Keith, Registrar of

Lords’ Interest, dated 11 October 2009 39




Correspondence between Lord Paul, the House Authorities and theChairman of the Sub-Committee

Letter from M r Michael Pownall, Clerk of the Parliaments to Lord Paul

dated 13 October 2009 40

Letter from Lord Paul to the Clerk of the Parliaments dated 19 October

2009 40

Letter from the Clerk of the Parliaments to Lord Paul dated 23 October 2009 41

Letter from the Clerk of the Parliaments to Baroness M anningham-B uller,Chairman of the Sub-Committee on Lords’ Interests, requesting the Sub-

Committee’s assistance, dated 5 March 2010 41

Letter from the Registrar of Lords’ Interest to Lord Paul dated 11 M arch

2010 42

Letter from Lord Paul to the Registrar of Lords’ Interest dated 26 M arch

2010 43

Correspondence with the Sunday T imes Newspaper

Letter from M r Andrew M ackersie, Clerk of the Sub-Committee on Lords’

Interests to M r John W itherow, Editor of the Sunday Times newspaper,dated 10 M arch 2010 45

Letter from M r Jonathan Calvert and M s Claire N ewell of the SundayTimes newspaper to the Clerk of the Sub-Committee on Lords’ Interestsdated 24 M arch 2010 45

Transcript of a covert recording of a telephone conversation between M s

Claire N ewell of the Sunday Times newspaper and M s Prenusha Chetty,a manager at Bignell Park Hotel on Friday 2 October 2009 46

Transcript of a covert recording of a second telephone conversation between

M s Claire Newell and M s Prenusha Chetty on Friday 2 October 2009 46

Transcript of a covert recording of a telephone conversation between M s

Claire N ewell and M r Mark S tevens, the manager at Bignell Park Hotel

between 2002 and 2006 on T hursday 7 October 2009 47

Transcript of a covert recording of a second telephone conversation between

M s Claire N ewell and Mr Mark S tevens, the manager at Bignell Park Hotel between 2002 and 2006 on T hursday 7 October 2009 48

Transcript of a covert recording of a telephone conversation between L ord

Paul and Jonathan Calvert of the Sunday Times newspaper Friday 2October 2009 49

Transcript of a covert recording of a telephone conversation between M r

Jonathan Calvert Lord Paul Thursday 8 October 2009 54

Correspondence with the Metropolitan Police Service

Letter from M r Andrew M ackersie, Clerk of the Sub-Committee on Lords’

Interests to Sir Paul S tephenson, Commissioner of the M etropolitan Police

Service, dated 19 M arch 2010 57

Letter from Detective Chief Superintendent N igel Mawer, Economic and

Specialist Crime Unit, M etropolitan Police Service to the Clerk of theSub-Committee on Lords’ Conduct dated 27 May 2010 57




W itness Statements taken by the Metropolitan Police Service 58

W itness statement of M aureen Buck, M ember Services Manager, House of Lords Finance Department dated 20 October 2009 58

W ritten statement of Jonathan S mith, H ead of Finance, H ouse of Lords

Finance Department, dated 19 January 2010 61

W itness statement of Detective Constable Kirsty de St-Denis dated 2

February 2010 61

W itness statement of Detective Constable Kirsty de St-Denis dated 12

February 20101 62

W itness statement of Maureen Buck, M ember Service M anager, House

of Lords Finance Department dated 2 February 2010 62

W itness statement of Ms Shanaaz A li, sometime clerk in the House of

Lords Finance Department, dated 10 February 2010 64

W itness statement of M s Christine Dale, sometime clerk in the House of

Lords Finance Department, dated 17 February 2010 67

W itness statement of Jonathan S mith, H ead of Finance, H ouse of Lords

Finance Department undated 70

W itness statement of Y vonne Mabs Francis, Landlord, dated 22 December 2009 71

W itness statement of Prenusha Chetty, Hotel M anager, Bignell Park Hoteldated 12 January 2010 73

Letter from M ark S ly, S ubpoena Unit, Companies House to DC Kirstyde St-Denis, M etropolitan Police dated 12 January 2010 74

W itness statement of M ark S ly, S ubpoena Unit, Companies House, dated 12 January 2010 74

Summary of exhibits provided by M r Mark S ly, S ubpoena Unit,

Companies House 74

W itness statement of Mr Erling Sorenson, H otelier, dated 15 February

2010 78

Oral evidence, T hursday 17 June 2010 94

Supplementary memorandum by Lord Paul dated 19 July 2010 106

Evidence submit ted to the Commit tee for Pr ivi leges and Conduct Letter from Christopher Johnson, Clerk of the Committee for Privileges and

Conduct, to Lord Paul, dated 21 S eptember 2010 107

Appeal by Lord Paul, dated 29 September 2010 108

Letter from Christopher Johnson to Lord Paul, dated 30 September 2010 109

Oral evidence, Monday 11 October 2010 110



TH E CONDUCT OF LORD PAUL

Introduction

1. T he Sub-Committee on Lords’ Conduct has investigated the conduct of

Lord Paul. The Sub-Committee’s report is printed as an Appendix to thisReport.

2. T he Sub-Committee’s investigation into the conduct of Lord Paul should beread in parallel with its investigations in the conduct of Lord Bhatia andBaroness Uddin. All three cases arise out of articles originally appearing inThe Sunday Times, and each raises similar issues. Each of the Sub-Committee’s reports contains similar background analysis (for instance, of the rules governing the Members’ Reimbursement Scheme 1

3. But, however similar the issues, the facts of each case are wholly distinct andhave required separate consideration. The Sub-Committee, and we

ourselves, have therefore prepared three separate repor ts.

).

Process

4. T he process followed in this case is summ arised in paragraphs 5–6 of theSub-Committee’s report. The original allegations against Lord Paul appearedon 11 October 2009; a complaint was made the same day by AngusRobertson MP. The initial investigation was conducted by the Clerk of theParliaments as Accounting Officer, but was then suspended while a separateinvestigation was conducted by the Metropolitan Police Service. On 3March 2010 the Metropolitan Police Service notified the Clerk of theParliaments that a decision had been made “to not proceed with theinvestigation at this time”. The Clerk of the Parliaments resumed his owninvestigation, and on 5 March asked the Sub-Committee “to investigate anddetermine the facts of the case”.

5. T he procedure in these cases follows that agreed by the House in December2008 2

6. T he Sub-Comm ittee, following an investigation which had been interruptedby the dissolution of Parliament, sent its report to the Clerk of theParliaments on 28 July. The Sub-Committee also recommended that, inorder to preserve confidentiality, the Clerk of the Parliaments should notdisclose the report to any other person until late in the summer recess. He

, whereby the C lerk of the Parliaments can request the assistance of theSub-Committee in investigating complaints which he considers “complex orserious”. As a Sub-Committee of the Committee for Privileges and Conduct,the Sub-Committee on Lords’ Conduct normally reports to the parentCommittee. But, as this case was referred to the Sub-Committee by theClerk of the Parliaments, the Sub-Committee reported to the Clerk of the

Parliaments. He, given the nature of the sanctions recommended by the Sub-Committee, forwarded the report in turn to this Committee.

1 All references in th is Report to the M embers’ Reimbursement Scheme refer to the Scheme that app lied u p

until 30 September 2010. As a result of a motion agreed by the House on 20 July 2010, the day

subsistence, night subsistence and office costs elements within the Scheme were combined in a new dailyallowance, with effect from 1 October 2010.

2 The Code of Conduct: procedure for considering complaints against M embers, Committee for Privileges, 4th

Report, session 2007–08 (H L P aper 205). H ereafter referred to as the “ Report on procedu re”.




accordingly forwarded the report to the staff of this Committee in lateSeptember, and a copy was at once sent to Lord Paul, on 21 September. H ewas at the same time notified of his right to appeal against the Sub-Committee’s findings to the Committee for Privileges and Conduct. Hesubmitted his appeal on 29 September, also indicating his wish to appear inperson before the Select Committee at its meeting on 11 October.

7. Although the Sub-Committee’s report was forwarded to this Committee inits entirety, certain matters covered in it relate to the administration of theMembers’ Reimbursement Scheme (for instance, the changes which the Sub-Committee indicates were made to the Scheme in April 2009, referred to inparagraphs 20 and 42–43 of the Sub-C ommittee’s report), rather than to theprivileges of the House or the Code of Conduct. It is for the HouseCommittee, as the body responsible for the Members’ ReimbursementScheme, to take forward these matters, on which we make norecommendations.

8. Our responsibility is to address the conduct of Members who are alleged to

have breached rules agreed by the House, and, where appropriate, torecommend sanctions to the H ouse as a whole. T he House has previouslyresolved that it “possesses the same disciplinary powers in respect of breachesof the Members’ Reimbursement Scheme as in respect of breaches of theCode of Conduct or of other rules of conduct adopted by the House”.1

The Sub-Commit tee’s findings

It is aMember’s responsibility to ensure that claims for expenses are properlymade, which includes an obligation to take reasonable steps to ensure thatamounts being claimed are properly payable under the Scheme and thatinformation provided in connection with claims is complete and accurate. AMember who makes a claim without taking such steps may be found to beliable to sanction by the H ouse.

9. T he focus of the investigation has been Lord Paul’s use of the Members’Reimbursement Scheme from late 2005 onwards. In particular, the Sub-Committee considered whether during this period Lord Paul correctlydesignated two successive properties (until the end of July 2006, TheCottage, Bignell Park Hotel, Chesterton, Oxfordshire, and from August 2006The Grange, Beaconsfield, Buckinghamshire) as his “main residence” for thepurposes of the Scheme.

10. Notwithstanding its name, the Oxfordshire property is a one-bedroom flat in

the Bignell Park Hotel, which is owned by Lord Paul’s company, CaparoH oldings. T he minimum requirement endorsed by the House Committee fordetermining whether a property could be designated as a Member’s “mainresidence” under the Scheme is the requirement that it be visited for aminimum of one weekend per month over the year when the House wassitting and for periods during recesses. The Sub-Committee interpreted theterm “visit” in this context as requiring an overnight stay. Lord Paul hasfreely admitted that he never spent a night at The Cottage. The Sub-Committee therefore concluded that Lord Paul wrongly designated TheCottage as his main residence.

1 The conduct of Lord Clarke of Hampstead , C omm ittee for Privileges, 4th Report, session 20 09–10, H L P aper

112, paragraph 8.




11. T he Grange in Buckinghamshire is a family home, which Lord Pau lcontracted to buy in March 2006, designating it as his main residence inAugust of that year. Since that time Lord Paul has regularly spent weekendsat The Grange, and the Sub-Committee accepted that Lord Paul’sdesignation of T he Grange as his main residence through the period inquestion met the minimum requirement endorsed by the House Committee.

12. As a result of his designation of the Oxfordshire property as his “mainresidence”, Lord Paul was able to claim sums under two separate headingswithin the Scheme. He claimed night subsistence in respect of overnightaccommodation in London while away from his “main residence”; he alsoclaimed travel expenses in respect of journeys between his “main residence”and Westminster.

13. Immediately after the original allegations appeared, Lord Paul referredhimself to the C lerk of the Parliaments for investigation, and at an early stagein this investigation he offered to repay any money wrongly claimed. Withthe assistance of the Finance Department, Lord Paul calculated that he had

claimed £ 41,982 in night subsistence and travel expenses over the periodfrom January 2005 (when he first designated The Cottage as his mainresidence) to July 2006. He repaid this sum (a greater sum than the Housecould have required him to repay, given that the investigation was only ableto go back four years, to 11 October 2005) to the House in late 2009; there isno further money owing to the House.

14. As the Sub-C omm ittee acknowledged, as well as repaying the money LordPaul has also apologised, in his oral evidence, for his mistake in wronglydesignating the Oxfordshire property and claiming money on that basis (Q150, p 103). At no stage since he was first contacted by The Sunday Times

has Lord Paul claimed that he ever spent a night in The Cottage.15. T hus far there is broad agreement between the Sub-Com mittee and Lord

Paul. The difficulties in this case arise in determining the third issueaddressed by the Sub-Committee, namely whether, given that theOxfordshire property was wrongly designated, Lord Paul acted in good faithin making his designation and claims.

16. T he Sub-Comm ittee’s view was that Lord Paul did not act in good faith.The Sub-Committee stated that “no reasonable person could hold LordPaul’s understanding of ‘main residence’ in relation to the scheme”. TheSub-Committee therefore concluded “that Lord Paul’s designation of theOxfordshire property was a deliberate misrepresentation of his domesticarrangements made with the intention of enabling Lord Paul to make use of the night subsistence element of the members’ reimbursement scheme”(paragraphs 57-58). With respect to travel expenses, the Sub-Committeeconcluded that “Lord Paul made the claims for the mileage allowance for

journeys by car from and to the Oxfordshire property with the intention of adding verisimilitude to his designation of that property as his mainresidence” (paragraph 60).

17. On the basis of these conclusions, the Sub-C omm ittee’s recommendat ionwas “that the H ouse sanction Lord Paul by requiring him to make a personalstatement of apology to the House and thereafter suspending him from the

service of the House for six mon ths.” (paragraph 63) .




Lord Paul’s appeal

18. Lord Pau l has appealed against the Sub-Committee’s findings only on thethird issue, namely that he acted in bad faith. He states that, given hisapology, his co-operation with the investigation, and his prompt repaymentof the money, the Sub-Committee’s sanction is based solely upon the finding

that he acted in bad faith.19. Lord Paul points to the absence of guidance during the period in question as

to the meaning of “main residence”; to his prompt and voluntary repaymentof the amount wrongly claimed and subsequent co-operation with theinvestigation; and to his apology. He maintains that in the absence of anagreed definition of “main residence”, and given his cultural background , hisinterpretation was at the time a reasonable one; he further states that even if his interpretation were to be found to be “unreasonable”, this would be a“wholly inadequate basis” for the Sub-Committee’s finding that he acted inbad faith, or engaged in “deliberate misrepresentation”. Finally, he compareshis case with that of Lord Clarke of Hampstead (as indeed does the Sub-

Committee at paragraph 62), from whom only an apology was required, andargues that he is being treated harshly in comparison. He asserts that “thereare a number of [other cases], involving in some cases much greater amountsof money, which have I believe not even been investigated”.

20. Lord Paul appeared before the Select Committee on 11 October 2010. A fulltranscript of his evidence is printed in this volume (see p 110). The essenceof his appeal is set out in his opening statement :

“The basic facts are not in dispute. I made claims which, with thebenefit of hindsight, I should not have made. For that I apologise. Assoon as I appreciated my error, I volunteered and made repayments. I

never pretended to anyone that, in the event, I spent nights at theproperty in question. It was, however, a residential property of mine thatwas available to me. It is all a matter of interpretation as to whatconstitutes a main home—a matter of interpretation that may differbetween persons with, for example, different cultural backgrounds. I amnow one of those who disagrees with my interpretation at the time bothin relation to the main residence and in relation to the journeys. But Imost steadfastly maintain that these were entirely honest interpretationson my part.” (Q 2)

The views of the Commit tee

21. We agree with Lord Paul that the Sub-Committee’s finding that he acted inbad faith is the key issue in the appeal and in the Sub-Committee’s report.T here is no question that Lord P aul should not have designated T he Cottageas his main residence, and that he was wrong to claim night subsistence andmileage allowances in respect of that p roperty.

22. T hus Lord Paul’s motivation lies at the heart of the case and his Appeal. T heSub-Comm ittee’s analysis of his motivation is set ou t in paragraphs 54–58 of the report. T he key conclusions are as follows:

57. Even if Lord Paul’s definition of “residence” were reasonable, his

lack of regard to “main” is unreasonable. We consider that noreasonable person could hold Lord Paul’s understanding of “mainresidence” in relation to the scheme.




58. We find that Lord Paul’s designation of the Oxfordshireproperty was a deliberate misrepresentation of his domesticarrangements made with the intention of enabling Lord Paul to

make use of the night subsistence element of the members’

reimbursem ent scheme.

23. In oral evidence before us, Lord Paul repeated his claim that “I genuinelybelieve that a place that is available to me for living is my residence” (Q 7).Such an understanding essentially empties the term of meaning.Nevertheless, Lord Paul went so far as to apply this understanding even tohis current “main residence” in Buckinghamshire, which the Sub-Committee, and we, accept satisfies the minimum criteria for designation: “Istill do not consider in real terms that my house in Beaconsfield is a mainresidence. T o me, it is a place where I love to go whenever I can and I like tospend time with my children and grandchildren, but I do not differentiatebetween my London home and that residence.” (Q 7) If this were true, itwould seem that Lord Paul’s designation of one or other residence as his

“main residence”, properly or improperly, is a matter largely of chance.24. Lord Paul explained his interpretation of the term “main residence” by

reference to his cultural background. He insisted that “anyone coming out of India would not understand what main residence means” (Q 8) . H e acceptedthat he had “not once” looked at the guidance on the back of the claim forms(Q 22). Yet he clearly had a good understanding of domiciliary status (QQ11–17).

25. In summary, Lord Paul’s understanding of the term “main residence” isbarely an understanding at all; it demonstrates rather a continuing failure tounderstand that the term has any specific meaning that may be applied to his

personal circumstances. We therefore endorse the Sub-Committee’sconclusion that “no reasonable person could hold Lord Paul’s understandingof ‘main residence’ in relation to the scheme”. The Sub-Committee’s furtherconclusion that Lord Paul’s designation of the Oxfordshire property as hismain residence must have been done in bad faith is entirely understandable.We therefore dism iss his appeal, e xcept to the e xtent indicated below.

26. It is our responsibility, in reviewing the Sub-Comm ittee’s find ings, not onlyto consider specific grounds of appeal, but to “decide whether, on thebalance of probabilities, we endorse the conclusions of the Sub-Committee”.1

1 Report on procedure, paragraph 35.

On this occasion we have borne in mind, on the one hand, thefact that Lord Paul’s definition of “main residence” was and is inherently

unreasonable, and that, as a Member of the House and a successfulbusinessman, he must be presumed to act as a reasonable person. On theother hand, we are aware that he has at no stage since the allegations firstappeared sought to misrepresent his connection with the Oxfordshireproperty, for instance to pretend that he ever stayed there. It is a matter of fact that he immediately referred his case to the C lerk of the Parliaments andhas co-operated with the investigation throughout; that he has repaid allmoney wrongly claimed (a larger sum than that covered by the Sub-Comm ittee’s investigation); that he has repeatedly apologised for h is mistake;and that he persists in applying the term “main residence” in ways that couldbe interpreted unfavourably to himself. Lord Paul’s actions throughout the

investigation have been consistent and, so far as we can tell, honestly meant.




27. We do not feel justified in finding, on th e balance of probabilities, thatLord P aul acted dishonestly or in bad faith. However, his actions wereutterly unreasonable, and demonstrated gross irresponsibility and

negligence. They therefore render him liable to sanction by the

House.

28. In mitigation, Lord Paul has apologised and repaid the money wronglyclaimed.

29. We recommend that Lord Paul be suspended from the service of theHouse for four m onths, starting on the date on which any suspension

m otion is agreed by the House.




APPENDIX : REPORT FROM T HE SUB-COMM IT TEE ON LORDS’CONDUCT

M embers’ r eim bursement scheme: the conduct of Lord Paul

Introduction and summary

1. This report replies to a letter from the Clerk of the Parliaments dated 5 March2010 which, following the Report from the Committee for Privileges on theprocedure for considering complaints against members1 (“the report onprocedure”), invited the Sub-Committee on Lords’ Interests2

2. We find on the facts that the Oxfordshire property designated by Lord Paul ashis main residence for the purpose of the members’ reimbursement scheme from11 October 2005 to the end of July 2006 did not meet the criteria endorsed by theHouse Committee on 26 January 2009 (p16E

to help himinvestigate a complaint about Lord Paul’s use of the members’ reimbursementscheme.

3

The allegation, complaint and process of investigation

); and that Lord Paul did not makehis designation and claims for night subsistence away from that property and forthe mileage allowance in good faith. We recom m end that, despite Lord Paul’sswift repayment of the whole am ount wrongly claime d (£41,982), the H ouse

sanction Lord Paul by requiring him to make a personal statement of

apology to the House and thereafter suspending him from the service of the House for six m onths.

A llegation and complaint 3. On 11 October 2009, the Sunday Times newspaper alleged that Lord Paul haddesignated as his main residence a flat in which he had never spent the night(p38):

“A multi-millionaire ally of Gordon Brown pretended that a small flatoccupied by one of his employees was his main home so he could claim£ 38,000 in expenses from the Lords. Lord Paul, one of Labour’s biggestdonors and a friend of the prime minister, has admitted he never evenslept in the flat, despite stating it was his main residence. The one-bedroom flat was occupied by a manager from one of Paul’s hotels who

confirmed last week that the peer had never lived there while claimingthe expenses. Paul, who has a family fortune of £ 500m, was actuallybased in London, where he has lived for more than 40 years.”

4. Mr Angus Robertson MP complained about Lord Paul’s alleged conduct thesame day (p39); and Lord Paul referred himself to the Clerk of the Parliaments forinvestigation on 12 October (p40B).

1 The Code of Conduct: procedure for considering complaints against Members, 4th Report from the C omm ittee for

Privileges, session 2007-08, HL Paper 205, paragraph 11 bullet 2. Report agreed to by the House on 18

D ecember 2008. H ereafter referred to as “the report on procedure”.

2 In the last Parliament, the Sub-Committee was styled the Sub-Committee on Lords’ Interests; it is now

styled the Sub-Committee on Lords’ Conduct.3 The references in this report to the printed evidence are in the form “p16E” and “Q114”. The former

refers to page 16 of the printed evidence at letter E; the latter to question number 114 in the transcript of

oral evidence.




Procedure for investigation of allegations about expenses

5. T he H ouse Committee is the principal domestic committee of the House and isresponsible for the members’ reimbursement scheme (p5B). On 20 O ctober 2009,the Committee endorsed a procedure for dealing with complaints relating to thescheme (p15H). It involved investigation by the Clerk of the Parliaments as

Accounting Officer; reference to the Sub-Committee in “complex or serious”

1

cases; report by the Clerk of the Parliaments to the House Committee; andsanctioning by the Committee for Privileges if appropriate (p16B). On 6 July2010, the C lerk of the Parliaments and H ouse Committee agreed to stand aside inthis and two other cases where this Sub-Committee had been involved: thus thisreport goes via the Clerk of the Parliaments to the Committee for Privileges andConduct, to whom lies Lord Paul’s right of appeal2

Procedure in this investigation

.

6. After 11 October 2009, Lord Paul met and corresponded with the Clerk of theParliaments, correspondence which concluded with his repaying £ 41,982 to the

House (p41D 3

Investigation by the Sub-Committee

).The Metropolitan Police had meanwhile decided to investigatewhether Lord Paul had committed an offence under section 17 of the Theft Act1968 or the Fraud Act 2006. The Clerk of the Parliaments suspended his owninvestigation into Lord Paul until the criminal process had concluded. On 3March 2010 a joint Crown Prosecution Service / Metropolitan Police Servicepanel decided not to prosecute Lord Paul and the Clerk of the Parliamentsresumed his own investigation. On 5 March 2010, he asked the Sub-Committee“to investigate and determine the facts of the case” (p41E).

7. The report on procedure says that we may not accept for investigation acomplaint going back more than four years4

8. Our investigation was interrupted by the dissolution of Parliament on 12 April2010. T he new House met on 18 M ay and appointed the Committee for Privilegesand Conduct on 2 June. The Committee appointed this Sub-Committee on 7June. We reported to the Clerk of the Parliaments on 28 July with the

recommendation that, to retain confidentiality during the summer recess without

: we may thus examine conduct in thiscase from 11 O ctober 2005. We have not limited our investigation to the allegationmade by the Sunday T imes newspaper bu t have instead generally investigated LordPaul’s use of the members’ reimbursement scheme. We have focused on LordPaul’s claims for night subsistence and travel. Lord Paul’s claims for daysubsistence, office costs, and Select C ommittee expenses are not at issue.

1 Report on procedure, paragraph 11 bullet 2: “M atters relating to the M embers’ Reimbursement Allowance

Scheme are the responsibility of the Clerk of the Parliaments, as Accounting Officer for the House of

Lords. In exceptional circumstances he may request the Sub-Committee to assist him in investigating a

complex or serious complaint”.

2 House of Lords Code of Conduct, 2 July 2001, paragraph 19(e): “If after the investigation the Sub-

Committee finds the allegation proved, the Member complained against has a right of appeal to the

Com mittee for Privileges”; the report on procedure paragraphs 32-37 sets out th e appeal procedure.

3 T he C lerk of the P arliaments’ letter to Lord Paul of 23 O ctober 2009 refers only to the repayment of night

subsistence. Lord P aul then volunteered a further payment of £ 2,535 for the rep ayment of travel expenses;

the amount calculated by him and confirmed by the Finance Department. We have no correspondencerelating to this latter payment though the Finance Department assures us that the full amount has been

paid.

4 Report on procedure, paragraph 11 bu llet 4.




affecting the timetable for any appeal, he should forward the report to theChairman of the Committee for Privileges and Conduct only towards the end of the summer recess.

Evidence

9. T he Sub-C ommittee had as written evidence the amounts claimed by Lord Paulsince April 2003 1 (p24) and his claim forms since March 2006 2 (pp29-37);correspondence between the House authorities and Lord Paul (pp40-4); a letterfrom the Sunday Times and transcripts3 of telephone conversations and interviewson which their article was based (pp45F-56); and witness statements taken by theMetropolitan Police Service in the course of their investigation of Lord Paul(pp58-93). We welcome the constructive approach of the police in taking thedifficult decision to release to u s the m aterial they gathered. T he officers of theSub-Committee corresponded with Lord Paul. We took oral evidence in privatefrom Lord Paul (pp94-105), to whom we had earlier disclosed the writtenevidence. T he report on procedure says4

“Procedural safeguards

:

25. The Code of Conduct states that “in the investigation andadjudication of complaints against them, Members of the House havethe right to safeguards as rigorous as those applied in the courts andprofessional disciplinary bodies.” They may be accompanied to anymeeting by a colleague, friend or legal adviser, but every effort is madeto keep proceedings informal, and there is no expectation that theyshould be so accompanied. If they do choose to bring a friend or adviser,they will nevertheless be expected to answer for themselves (and notthrough their friend or adviser) any questions put to them.”

10. Lord Paul co-operated fully with the investigation. He brought with him to theevidence session his secretary, Ms Elizabeth Allan.

11. We recommend that all of this evidence be published, subject only to

giving the police sufficient time to allow them to inform those from whom

they took statem ents.

The facts

12. T he report on procedure says5

“ A ssessing the evidence

:

26. When its investigation is concluded, the Sub-Committee assesses theevidence. In order to find against a Member, the Sub-Committeerequires at least that the allegation is proved on the balance of probabilities.

1 Printed in evidence are the amounts from January 2005, when Lord Paul first designated a property

outside London as his main residence.

2 The House of Lords Finance Department has retained the amounts claimed each month by members

under each head since 2003 but has retained claim forms only from March 2006; all members’ earlier

claim forms have been disposed of in accordance with the department’s disposal policy.

3 The Sunday Times also supplied the C omm ittee with th e recordings on which their transcripts were based.

We did not rely on the newspaper’s transcripts but commissioned our own. Those published as evidencewere either corrected or created by the clerks.

4 Report on procedure, paragraph 25.

5 Report on procedure, paragraphs 26 to 28.




27. If the investigation has uncovered material evidence that is atvariance with the Member’s version of events, this will be put to theMember, who will have a chance to challenge it. Before reaching itsconclusions, the Sub-Committee will also share with the Member a draftof those parts of its report dealing with issues of fact, so that theMember has an opportun ity to comment on them.

28. If there remain significant contested issues of fact, the Sub-Committee will agree its own account of the facts of the case, whiledrawing to the attention of the Committee for Privileges and the Houseany challenge to this account made by the Member concerned.”

13. To fulfil these paragraphs, we showed Lord Paul a draft of our account of thefacts set out in paragraphs 14 to 37 below. He ac cepted the account of the factsbut m ade a further point to which we draw attention ( p106).

14. T he facts of the case are as follows.

The members’ reimbursement scheme15. T he members’ reimbursement scheme is founded on resolutions of the Houseand is explained in a General Guide published by the Finance Departm ent and in aQuick Guide set out on the reverse of the claim form. T he Clerk of the Parliamentsis responsible for administering the scheme, subject to direction by the HouseCommittee on points of difficulty or doubt (p5B). The relevant resolutions andguidance are set out in full at pp1-15 of the printed evidence but we must herequote some relevant passages.

The resolutions of the H ouse and published guidance

16. The principal resolution of the House in relation to day and night subsistenceis that of 25 July 1991 (p1D). It reads:

“(1) Members of this House, except any Lord who receives a salary under the

Ministerial and other Salaries Act 1975 and the Chairman and Principal

Deputy Chairman of Committees, shall be entitled to recover (in addition to

the costs of travel for which other provision is made) expenses certified by

them as—

(a) expenses incurred (otherwise than as mentioned in sub-paragraph (b)

below) for the purpose of attendance at sittings of this House or of

Committees of this House, or

(b) expenses incurred in staying overnight away from their only or mainresidence where it is necessary to do so for that purpose.”

17. The principle that a member may claim a separate allowance towards therecovery of the cost of travel by car for the purpose of parliamentary duties wasestablished by a resolution of the House of 17 May 1961 (p1A). The currentresolution relating to travel by car is that of 10 November 2004 (p2C). It reads:

“That this House approves the following proposals with respect to payments of

car, bicycle and motorcycle allowances to Lords for journeys which they have

commenced on or after 10 N ovember 2004—

(1) T he maximum allowance payable in respect of a journey by car,

motorcycle or bicycle should be payable at the rate which is applicable to

that kind of vehicle under subsection (2) of section 230 of the Income

T ax (Earnings and Pensions) Act 2003, as amended from time to time.




(2) For the purposes of paragraph (1), the reference in that subsection to

“the first 10,000 miles” is to the total number of miles of travel by car by

the Lord claiming the allowance, which is either—

(a) undertaken for the purpose of attending this House for the

purp oses of his parliamentary duties, or

(b) undertaken while on parliamentary duties within the UnitedKingdom.”

18. It is clear from the resolutions that the purpose of the scheme is the

recovery of expenses necessarily incurred in attending the H ouse.

19. As to the guidance, the 2005 edition of the General Guide read (pp2-14):

“1.2.1 Members of the House of Lords do not, in general, receive a salary in

respect of their parliamentary duties. However, Members may be reimbursed

actual expenses arising out of these duties, in accordance with the rules of the

Members’ Reimbursement Allowance Scheme. The Members’ Reimbursement

Allowance Scheme is governed by Resolutions of the House. Rules for the

recovery of Members’ expenses are administered by the Clerk of the

Parliaments who also has limited discretion to deal with matters that arise on

claims. Points of particular difficulty or doubt may be referred to the House

Committee, which supervises the arrangements for the reimbursement of

expenses ...

1.3 Taxable status

1.3.1 All amounts paid in settlement of claims as detailed in this guide

represent reimbursement of actual expenses arising out of unpaid

parliamentary duty, rather than income from employment. Consequently, they

are not subject to income tax, and need not be included on a tax return ...

4 ATTEND ANCE AT SITTINGS AT WESTMINSTER

4.1 General - Expenses Re lated to Attendance

4.1.1 The basic principle underlying the scheme is that the entitlement to

recover expenses arises only in respect of attendance at sittings of the House or

its comm ittees at Westminster …

4.1.3 M embers who wish to claim attend ance expenses mu st complete and sign

the attendance expenses claim form and forward it as soon as convenient after

the end of each month, or period of claim, to the Members’ Expenses Section.

A Member’s signature effectively certifies that the amount claimed has been

spent for the purposes of parliamentary duties as set out above. Receipts arenot required ...

4.2 Travelling Expen ses

General

4.2.1 Claims may be made only for journeys over five miles between a

Member’s main place of residence in the United Kingdom and Westminster.

Claims for incidental travel costs (e.g. those arising from short distance

journeys within a five mile radius of Westminster, tolls and car parking

charges) are covered by the day subsistence allowance (4.5).

4.2.2 M embers seeking to receive travel costs must register their m ain place of residence with the Members’ Expenses Section. Members with more than one

main place of residence may register an alternative main residence with the




Members’ Expenses Section for the purpose of claiming travelling expenses.

Registration is subject to the approval of the C lerk of the Parliament s ...

4.2.4 Members may recover the cost of fares incurred by them for travel by any

public railway, sea, and air or bus service, or the costs of journey made by

private car ...

Road

4.2.8 Claims in respect of journeys by private car are payable at:

40p per mile up to 10,000 miles in the year ending 31 March; and

25p per mile for mileage in excess of 10,000 miles in the same year.

No other claims in respect of motoring expenses are reimbursable under the

travelling expenses heading. Incidental travel costs such as tolls, congestion

charges and car-parking charges can be claimed against the daily limit of the

day subsistence allowance (4 .5).

4.4 Night Subsistence

4.4.1 Members whose main residence is outside Greater London may claim for

expenses of overnight accomm odation in London while away from their only or

main residence. T he maximum d aily limit is £ 154.50.

4.4.2 A Member whose main residence is outside Greater London and who

maintains a residence in London for the purpose of attending sittings of the

House may claim this allowance towards the cost of maintaining such a

residence.

4.4.3 Claims for night subsistence are only permissible in respect of nights

actually spent in Lond on either imm ediately preceding or following attendance

at a sitting or meeting described in paragraph 4.1.1 above. For example, aMember who necessarily travels to London on a Sunday and attends sittings of

the House on Monday, Tuesday, Wednesday and Thursday and then returns

home on Friday or later may claim night subsistence for a maximum of 5

nights at up to a m aximum of £ 154.50 per night (i.e. a maximum of £ 772.50

for the week). However, if the Member returned home on the Thursday

evening, the maximum claim for night subsistence would be 4 nights at up to a

maximum of £ 154.50 per night (i.e. a maximum of £ 618 for the week).

4.4.4 Members who choose to travel home each night or whose main residence

is within Greater London cannot claim the night subsistence allowance.”

20. The General Guide was updated in January 2007, October 2008 and April2009. The language used to describe the scheme was materially the same in eachedition un til 2009, which left ou t the word “allowance” in several places, includingin the t itle of the guide 1

21. T he claim form used un til October 2008 read (p29):

and in paragraph 4.4.2 in relation to night subsistence.

“I certify that during the month of ............ I have attended a sitting of the

House or of a Committee of the House on the under-mentioned dates and

claim reimbursement of:

(a) N ight subsistence incurred in such attendance or in respect of the

maintenance of a London residence (other than a main residence) used

for the purpose of attending the House (see note (i)) ...

1 Un til April 2009, th e guide was entitled “M embers’ reimbu rsement allowance scheme general guide”.




(d ) Travelling Expenses (please ensure all travel dates are entered) (see

note (v))”

T hereafter paragraph (d) read (p35F ):

“(d) T ravelling Expenses see note (v)”

22. At the bottom of the form, the claimant has to print his name, sign, date theclaim and enter h is main place of residence.

23. Notes (i) and (v) refer to the Quick Guide printed on the reverse of the claimform which in 2005 read (pp14-15):

“(i) Night Subsistence

(v)

– Members whose main residence is outside Greater

London m ay claim expenses, within a daily limit of £ 154.50 (from 1 August

2005 to 31 July 2006), for nights spent away from their only or main residence

for the purpose of attending sittings of the House a) where they have incurred

expenses of overnight accommodation in London or; b) as a contribution

towards the costs of maintaining a London residence in connection with their

parliamentary dut ies. C laims can only be made in respect of days of attendance

.. .

Travelling Expenses

24. The rates changed over the period. In August 2006 paragraph (v) read:

- These may be claimed for journeys between main

place of residence in the United Kingdom and London by any public railway,

sea, air or bus service. Claims in respect of journeys by private car are restricted

to an allowance of 40p per mile up to 10,000 miles then 25p thereafter. Claims

in respect of journeys undertaken by motorcycle are paid at the rate of 24p per

mile and by bicycle at the rate of 20p per mile.”

“(v) Travelling Expenses

25. In August 2009 paragraph (i) had a sentence added to the end: “Whenclaiming Night Subsistence dates of travel must be shown on the claim form.” Asdid paragraph (v): “Members are required to provide receipts or vouchers whensubmitting claims for ticketed travel in excess of £ 50 per return journey (£ 25 per

single journey).”

- Claims may be made only for journeys over five

miles between a Member’s main place of residence in the United Kingdom andWestminster by any public railway, sea, air or bus service. Claims in respect of

journeys by private car are restricted to an allowance of 40p per mile up to

10,000 miles then 25p thereafter. Claims in respect of journeys undertaken by

motorcycle are paid at the rate or 24p per mile and by bicycle at the rate of 20p

per mile. Claims for incidental travel costs are covered by the day subsistence

allowance (see section (ii)).”

26. Although the Quick Guide says “Members are encouraged to contact theFinance Department, House of Lords for general assistance, or to discuss anyparticular points that arise from their claims”, in practice the onus on interpretingthe scheme has fallen on the individual member. Save for the Lord President(Lord Soames) speaking of the member’s “usual residence” 1 when moving themotion which first set up the night subsistence regime in 1979, there was noguidance on the meaning of “main residence” other than the two wordsthemselves until March 2010 2

1 H L D eb 26 July 1979 col 1135-37.

.

2 Financial Support for Members of the House: Declaration of Principal Residence and Publication, 3rd Rep ort from

the House Committee, session 2009-10, HL Paper 89. Report agreed to by the House on 22 March 2010.




Lord Paul’s designated main residences

27. Lord Paul successively designated two main residences in the period from 11October 2005 to the end of the last Parliament on 12 April 2010. U ntil the end of July 2006, it was The Cottage, Bignell Park Hotel, Chesterton, Oxfordshire. SinceOctober 2006 it has been The Grange, Beaconsfield, Buckinghamshire.

Facts relating to the Oxfordshire property

28. Lord Paul’s company, Caparo Holdings, bought the Bignell Park Hotel,Chesterton, Oxfordshire in July 2001 (p40J). In January 2005, Lord Pauldesignated The Cottage, Bignell Park Hotel as his main residence (p40L). We mayexamine conduct back to 11 October 2005, four years before the complaint of 11October 2009.

29. The House of Lords Finance Department has retained the amounts claimedeach month by members under each head since 2003 but has retained claim formsonly from March 2006; members’ earlier claim forms have been disposed of in

accordance with the department’s disposal policy. Lord Paul’s claims for the shortperiod March to July 2006 show claims for night subsistence away from hisdesignated main residence for every day’s attendance at the House and the m ileageallowance for journeys by car from and to the main residence every weekend whenthe House was sitting with the exception of 29-30 April 2006 (p24H). Theamounts claimed indicate a similar pattern of claims since designation of theOxfordshire property as his main residence in January 2005 (p24D), a positionconfirmed by Lord Paul (Q114). He claimed £ 39,447 in night subsistence and£ 2,535 in travel expenses throughout the period that the Oxfordshire property washis designated main residence (i.e. January 2005 to July 2006) , a total of £ 41,982.

30. The Oxfordshire property is a one bedroom flat within the hotel, with a

separate entrance (p73D) but without a separate postal address (p73E). It wasoccupied throughout the period by the manager of the hotel (p73J; p47D). LordPaul was financially responsible for the hotel in so far as he owns the companywhich owns the hotel. The running costs, including utilities, were subsumed intothose of the hotel (QQ 111-12).

31. The manager of the hotel recalls Lord Paul visiting the hotel for boardmeetings (p47F); the assistant manager recalls him visiting 6-7 times a year for aday at a time (p73H). Lord Paul did not confirm how often he visited the hotel(Q76 et seq). We do not need to find how often Lord Paul visited the Oxfordshireproperty because he admits that he never spent a night at the property (Q35) or at

the hotel (p73L; Q35). Nor did he stay overnight in the area (QQ101-3). This isdespite claiming for journeys to the main residence usually on a F riday or Saturdayand a return journey to London on a Sunday (pp25-8).

32. In relation to the journeys, Lord Paul admits that he did not make the journeyson the days stated on his claim forms (QQ36, 90-1; 171-2) though he says that hedid travel to the hotel and/or surrounding area most weekends when the Housewas sitting (p44C; QQ37; 98-9). Indeed, he may have made more journeys thanthose for which he claimed, but he only claimed for one return journey a week (Q93).

33. Defending the designation, Lord Paul says that having bought the hotel in

2001 he wanted first to test whether he wished to live in the country or remain inLondon (Q79); then considered developing part of the hotel as a residence for hisfamily, making use of the hotel amenities (p40K; QQ80-1; 145). Having decided




in favour of the country but against such a development, he used the hotel as abase for looking for a country house closer to London (QQ83-4; 106).

34. He found the desired country house on 28 February 2005, namely TheGrange, Beaconsfield, Buckinghamshire. He contracted to buy theBuckinghamshire property in March 2006; and designated it as his main residence

in August 2006 (p41B). Having contracted to buy the Buckinghamshire property,he stopped house hunting but continued to travel to and from that property (notthe Oxfordshire property) each weekend (QQ128-9; 166-7). TheBuckinghamshire property is 30 miles closer to London than the Oxfordshireproperty. The Oxfordshire property remained his designated main residence andsubject to claims for n ight subsistence and t ravel unt il August 2006.

Facts relating to the Buckinghamshire property

35. In August 2006, Lord Paul designated the Buckinghamshire property as hismain residence and claimed night subsistence away from that main residence forhis attendance at the House from when it resumed in October. His claim forms

show claims for every day’s attendance and the mileage allowance for journeys bycar from and to the main residence every weekend when the House was sittingwith the exception of 4-5 November 2006, 17-18 March 2007 and 2-3 N ovember2007. The property is a 250 acre estate in Buckinghamshire (p44E).

36. In correspondence with the Registrar, Lord Paul says that “I spend a lot of time at the Grange (almost every weekend) with my wife and family” (p44E). Heowns the Buckinghamshire property personally and no one other than his familyuses it. He says that he spent part of the Easter, Whitsun and summer recesses of 2007-09 at the property but cannot confirm the exact periods (p44F). As far as hecan recall, he travelled as indicated by his claim forms and stayed overnight at the

property.

Lord Paul’s residence in London

37. When in London, Lord Paul lives in a flat in a block of flats on Portland Placein which he and his wife have lived since 1966 (Q11); he owns the bu ilding (Q15);other members of his family live in other of the flats (Q14) but about half of theflats are rented by private tenants (Q21). We have not asked and he has notvolunteered what expense he incurs in maintaining that residence.

The issues

38. T he case raises three issues: 1) whether Lord Paul’s two designated mainresidences in the period under investigation meet the criteria endorsed by theHouse Committee for these investigations; 2) whether Lord Paul correctly claimedfor travel from and to those main residences; and 3) if the facts identify one ormore wrongly designated main residences, whether Lord Paul acted in good faithin making his designations and claims for night subsistence and travel.

Issue 1: w hether Lord Paul’s d esignated m ain residences in the period under investigation m et the criteria endorsed b y the House Com m ittee

39. On 26 January 2010, the House Committee endorsed the Clerk of theParliaments’ approach to determining allegations about the members’reimbursement scheme, as recorded in the published extract of the minutes of thatmeeting (p16E):




“He [the Clerk of the Parliaments] emphasised that he was operatingunder the current scheme, one of the weaknesses of which was that therewas no clear definition of a main residence. He had however taken theview, within the context of the individual assessment of each case, thatthere needed to be a minimum threshold beyond which it would beinappropriate for a Member to designate a property as a main or only

residence, and consequently claim overnight subsistence when staying inLondon.

He sought the endorsement of the Committee of the criteria which hewas incorporating into his assessment of cases where frequency of visitswas an issue: i.e. that the main residence had to be visited for aminimum of one weekend per month over the year when the House wassitting and for periods during recesses. These factors would be takeninto account, along with other evidence, when assessing the validity of the designation of a main residence. He drew the attention of theCommittee to the fact that it was probable that more stringent

requirements would be a feature of the new scheme for Members’expenses.

He also raised the issue of whether a property that was occupied by arelative other than a spouse or partner could in any circumstances bedesignated as a main residence under the current scheme. It was felt thatthis could in very specific circumstances be appropriate, subject to thethresholds established and depending on the detail of the Member’sconnection with the property, including relevant financialresponsibilities.”

40. We consider the criteria endorsed by the House Committee to be

binding on us: it is the principal domestic committee of the House andexplicitly responsible for the m em bers’ reim burseme nt schem e (p5B).

41. “Visit” is used in the context of “weekend”. We consider that “visit”

must include an overnight stay. We also consider that “one weekend perm onth” is not a minimum threshold set by the House Com m ittee, but the

minimum frequency of occupation when the House was sitting subject to

“other evidence” : it is a nec essary but not sufficient criterion.

42. The Committee for Privileges’ and our own report on Lord Clarke of Hampstead’s use of the members’ reimbursement scheme, agreed to by the Houseon 6 April 2010, is also relevant 1

“17. It is clear to us that a member may only claim under the scheme i)if they have stayed overnight away from their main residence; and ii)they have attended the House. There is no ambiguity about theseconditions ...

. In that report, we found that:

23. Our interpretation of the resolution, General Guide and Quick Guide taken together is that a member who maintained a residence inLondon for the purpose of attending the House could reasonably claimthat the night subsistence provision was a flat rate allowance intended toreimburse the member for the costs of maintaining such a residence(General Guide paragraph 4.4.2). A member who did not maintain aresidence in London was however ent itled only to claim for the recovery

1 The conduct of Lord Clarke of Hampstead , 4th Report from the Committee for Privileges, session 2009-10,

HL P aper 112.




of actual expenses (General Guide paragraph 4.4.1). The former is nolonger the case as the word “allowance” was removed from the guidancein April 2009.”

43. The report from the Committee for Privileges was agreed to by the

House and is binding.

Recent cases

44. In the period since the H ouse Committee endorsed the criteria for determininga main residence for the purpose of these investigations, the Clerk of theParliaments has determined a number of complaints raising similar questions(pp17-23) and a further number of media allegations against members who werenot subsequently complained about.

Opinion of the Sub-Committee

Oxfordshire

45. The fact that Lord Paul admits that he never stayed overnight at the

Oxfordshire property is sufficient for us to find that his des ignation did not

meet the criteria endorsed by the House Committee. Lord Paul wrongly

designated the Oxfordshire property as his m ain residence.

46. With the assistance of the Finance Department, Lord Paul calculated that heclaimed £ 39,447 in night subsistence in respect of nights away from theOxfordshire property from January 2005 to July 2006. He has voluntarily repaidthis sum to the House. This is a greater sum than the House could have requiredhim to repay, as we may only investigate the four years of conduct back to 11October 2005.

Buckinghamshire

47. The Buckinghamshire property is a home owned by Lord Paul and

regularly used by Lord Paul and his wife when the Ho use was sitting and inthe recess. Lord Paul’s designation meets the criteria endorsed by the

House Com m ittee.

London

48. In terms of the amount of night subsistence claimed by Lord Paul for hisaccommodation in London, our report on Lord Clarke of Hampstead (agreed toby the House on 6 April 2010) made clear that the scheme provided a flat rateallowance intended to reimburse the member for the costs of maintaining aresidence in London until April 2009 when the word “allowance” was removedfrom the guidance (General Guide paragraph 4.4.2); since then it has been areimbursement scheme. Lord Paul legitimately claimed the full amount of available night subsistence as an allowance when away from the Buckinghamshireproperty until 6 April 2010. Since that date, Lord Paul should only have claimedreimbursement of the actual cost of maintaining his London residence. Lord Paulclaimed the full amount of night subsistence in April 2010 but has not yetsubmitted a claim in the new Parliament.




Issue 2: w hether Lord Paul should hav e claim ed for trav el from and to his m ain residence

Oxfordshire

49. Lord Paul should not have designated the Oxfordshire property as his main

residence. Claims for travel may only be made for journeys made between a mainresidence and Westminster in respect of parliamentary duties (pp6K; 15B). As the

Oxfordshire property was not his main residence, Lord Paul was not

eligible to claim for travel from and to Oxfordshire. We do not need to findwhether he made the journeys for which he claimed, though he admits that he didnot make them either from or to his designated main residence or on the dates forwhich he claimed.

50. Lord Paul calculated that he had claimed £ 2,535 under the mileage allowancefor journeys by car from and to Oxfordshire from January 2005 to July 2006 1

Buckinghamshire

andhe has voluntarily repaid this sum to the House. Again, this is a greater sum thanthe House could have required him to repay, as we may only investigate the four

years of conduct back to 11 October 2005.

51. Lord Paul confirmed that he travelled from and to the Buckinghamshireproperty as indicated by his claims for the mileage allowance for journeys by car(p44F). He was entitled to make those claims.

Issue 3: if the facts identify one or m ore w rongly d esignated m ain residences, w hether Lord Paul acted in good faith in m aking his designation and claim s

52. Having found that Lord Paul wrongly designated the Oxfordshire property ashis main residence and that he made claims for night subsistence and travel towhich he was not entitled, we now turn to the issue of good faith. If Lord Paul didnot act in good faith when m aking his designation and claims for night subsistenceand travel, then he is liable to sanction. If however Lord Paul had good reason tobelieve that his designation and claims were valid, sanction might beinappropriate.

53. In correspondence with the Clerk of the Parliaments, Lord Paul says (p41B):

“I recognise that claiming during the Bignall interlude has beenperceived as having been on the wrong side of the line. I acted on entire

good faith throughout.”

Understanding of the scheme, designations and claims for night subsistence

54. In testing Lord Paul’s good faith, we are not assessing his conduct against thecriteria endorsed by the House Committee but against any natural understandingof the scheme and “main residence” that might be held by a reasonable person.This is because the criteria endorsed by the House Committee were not designedretrospectively to define “main residence” for the purpose of the scheme but weredesigned only as criteria to be applied to the retrospective examination of certainmembers’ claims.

1 T he Finance D epartment con firmed his calculation.




55. Lord Paul makes his assertion of good faith on the basis of his understandingof the rules. In relation to “main residence”, Lord Paul says (p43L):

“At the time there was no definition of “main” or “principle” [sic]residence and it was my understanding (which prevailed in the Housefrom 2004 to 2009) that if one owned a second home outside of London

a claim could be made for overnight subsistence in London when theHouse was sitting and also for travel to and from the second home. Iaccept now, that due to the lack of guidance at the time, myunderstanding may have been mistaken.”

In Lord Paul’s account, it was ownership not residence that was essential (QQ 61to 65; 69; 147); indeed there was no need to reside (Q155). The word “main” in“only or main residence” had no effect on the definition (Q161).

56. Such a misconception might still be justified if Lord Paul had studied theguidance and come to such a conclusion, but he had not. He never read the Quick

Guide on the reverse of the claim form, telling us that he often signed forms

without reading the detail (Q141). He did not consider his obligation when hehimself completed his claim form each month (Q113) and signed his name abovethe address he had filled in as his “main place of residence” (Q153). Nor did heseek anything other than very general advice from colleagues (QQ70; 107-10;143). He did not even read the rules when certain of his claims were rejected(QQ 148-9). We find this attitude to the making of a claim upon public funds to beinexcusable.

57. Even if Lord Paul’s definition of “residence” were reasonable, his lack of regard to “main” is unreasonable. We consider that no reasonable person couldhold Lord Paul’s understanding of “main residence” in relation to the scheme.

58. We find that Lord Paul’s designatio n of the Oxfordshire property was a

deliberate m isrepresentation of his domes tic arrangem ents m ade with the

intention of enabling Lord Paul to make use of the night subsistenceelement of the m em bers’ reimbursement schem e.

Claims for the mileage allowance for journeys by car

59. In relation to travel, Lord Paul suggested that he was entitled to the mileageallowance for a return journey from and to his main residence irrespective of whether he had made the journey (QQ91-3). The wording of the Quick Guide isclear: “Members of the House of Lords... are entitled to recover the costs of travel... incurred in connection with their parliamentary duties... Travelling

Expenses - T hese may be claimed for journeys between main p lace of residence inthe United Kingdom and London” (p15B). The members’ reimbursement schemedid not exist to subsidise Lord Paul’s weekend house-hunting (Q106) but tofacilitate his attendance in the House if that involved him being away from hismain residence. We consider that no reasonable person could believe that thescheme enabled a member to claim for journeys he did not make and for purposesunconnected with attendance at the H ouse.

60. On the balance of probabilities, we consider that Lord Paul did not truly holdthe understanding of the provision for the mileage allowance for journeys by carwith which he presented us. Not only could no reasonable person hold such an

understanding, but the fact that he claimed for journeys to the main residenceusually on a Friday or Saturday and a return journey to London on a Sunday,when he admits that (a) the journeys were not made on the days stated; and (b) henever stayed overnight in the Oxfordshire property, the hotel or in the surrounding




area, indicates to us that Lord Paul made the claims for the mileageallowance for journeys by car from and to the Oxfordshire property withthe intention of adding verisim ilitude to his designatio n of that property as

his main residence.

Conclusion

61. We find that Lord Paul did not act in good faith in designating the

Oxfordshire property as his main residence and in claiming night

subsistence and travel expenses from and to that property.

Sanction

62. We are conscious that this case is similar to that of Lord Clarke of Hampstead(in which an apology was sufficient) in that both members deliberately made falseclaims over a sustained period of time; referred their own conduct forinvestigation; quickly repaid the wrongly-claimed money; cooperated with theinvestigation; and apologised. Lord Paul’s case is however different from that of Lord Clarke. Lord Clarke wrongly claimed for 61 days’ night subsistence when hehad in fact returned to his main residence, but his (only) residence was genuinelyin Hertfordshire. Lord Paul’s wrong is greater in scale: he did not have a mainresidence outside London; none of his claims for night subsistence away from thatresidence was valid; he did not make the journeys for which he claimed on thedays claimed; and the quantum wrongly claimed is greater. In addition, despite hisapology to the Sub-Committee, Lord Paul has continued to present his case as areasonable interpretation of the scheme honestly held. It was not. Not only did hemake false claims bu t he presented the Sub-C ommittee with an understanding of the scheme which no reasonable person could hold in an attempt to disguise thedeliberate nature of his deception.

63. We recom m end that the House sanction Lord Paul by requiring him tomake a personal statement of apology to the House and thereafter

suspending him from the service of the Hous e for six m onths. His apology

must be unconditional, and agreed in advance with the Chairman of theSub- Com m ittee, to be sufficient.



DOCUMENTS RELATING TO THE MEMBERS’ REIMBURSEMENT

SCHEME

House of Lords Journals 17 May 1961

Peers’It was moved by the Lord Glassary (EarlTravelling

Expenses: of Dundee) to resolve, “That this HouseResolution

respg. “approves the proposals contained in the

“answer made on behalf of Her Majesty’s“Government yesterday for enabling mem-“bers of the House to recover the cost of “travel by rail, sea and air in attending“the House for the purposes of their par-“liamentary duties and allowances in“respect of the cost of travel by road for“that purpose.”

The same was agreed to.

House of Lords Journals 25 July 1991

18. Lords Expenses—It was moved by the Lord Privy Seal (Lord Waddington) that as from 1st August1991:

(1) Members of this House, except any Lord who receives a salary under the Ministerial andother Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees,shall be entitled to recover (in addition to the costs of travel for which other provision is made)expenses certified by them as—

(a) expenses incurred (otherwise than as mentioned in sub-paragraph (b) below) forthe purpose of attendance at sittings of this House or of Committees of thisHouse, or

(b) expenses incurred in staying overnight away from their only or main residencewhere it is necessary to do so for that purpose.

(2) The amount which a Lord may recover under paragraph (1)(a) of this Resolution shallnot exceed the maximum daily amount for each day of attendance at a sitting of this House or

of a Committee of this House.(3) In paragraph (2) of this Resolution and this paragraph “the maximum daily amount”

means—

(a) for a day in the year beginning with 1st August 1991, £29, and

(b) for a day in any subsequent year, the amount obtained by increasing what wasthe maximum daily amount for a day in July of the immediately preceding yearby the percentage (if any) by which the rate of day subsistence allowance payablefor an absence of more than ten hours in the case of a member of the Home CivilService of the highest subsistence classification was increased as from the end of that July.

(4) The amount which a Lord may recover under paragraph (1)(b) of this Resolution shallnot exceed the maximum daily amount for—

(a) each day of attendance at a sitting of this House or of a Committee of this House,and

(b) each other day which falls immediately before a day of attendance at a sitting of a Committee of this House if the Lord incurs expenses in staying overnight awayfrom his only or main residence before the sitting and it is necessary for him todo so for the purpose of attendance at the sitting.

(5) In paragraph (4) of this Resolution and this paragraph “the maximum daily amount” means—

(a) for a day in the year beginning with 1st August 1991, £68, and

(b) for a day in any subsequent year, the amount obtained by increasing what wasthe maximum daily amount for a day in July of the immediately preceding year

by the percentage (if any) by which the highest Inner London rate of night

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2 p r i v i l e g e s a n d c o n d u c t : e v i d e n c e

subsistence allowance payable to a member of the Home Civil Service wasincreased as from the end of that July.

(6) For the purposes of this Resolution—

(a) any fraction of a pound in an amount obtained under paragraph (3)(B) or (5)(b)shall be treated as a whole pound if it is not less than fifty pence, but shallotherwise be disregarded.

(b) references to a sitting of this House or of a Committee of this House do notinclude references to a judicial sitting, and

(c) “year” means a year beginning with 1st August;

after debate, the motion was agreed to.

House of Lords Journals 10 November 2004

15. Car, bicycle and motorcycle mileage expenses—It was moved by the Lord President (Baroness Amos) toresolve that this House approves the following proposals with respect to payments of car, bicycle andmotorcycle allowances to Lords for journeys which they have commenced on or after 10thNovember 2004—

(1) The maximum allowance payable in respect of a journey by car, motorcycle or bicycle should bepayable at the rate which is applicable to that kind of vehicle under subsection (2) of section 230

of the Income Tax (Earnings and Pensions) Act 2003, as amended from time to time.

(2) For the purposes of paragraph (1), the reference in that subsection to “the first 10,000 miles” isto the total number of miles of travel by car by the Lord claiming the allowance, which is either—

(a) undertaken for the purpose of attending this House for the purposes of his parliamentaryduties, or

(b) undertaken while on parliamentary duties within the United Kingdom;the motion was agreed to.

Members’ Reimbursement Allowance Scheme General Guide

Fifth Edition October 2005

Contents

1. INTRODUCTION

1.1 Summary Table

1.2 Background

1.3 Taxable status

2. HOW TO CLAIM

2.1 The Finance Department

3. GENERAL CONDITIONS RELATING TO CLAIMS AND ALLOWANCES

3.1 Eligibility to claim expenses

3.2 Time limit

3.3 Publication of information relating to Members’ claims for expenses

4 ATTENDANCE AT SITTINGS AT WESTMINSTER4.1 General—Expenses Related to Attendance

4.2 Travelling Expenses

4.3 Spouses’and Children’s Travel


4.5 Day Subsistence

4.6 Office Costs

4.7 Other Expenses

5. TRAVEL ON UK PARLIAMENTARY BUSINESS

5.1 Definition

5.2 Industry and Parliament Trust and Armed Forces Parliamentary Scheme

6 TRAVEL TO EU INSTITUTIONS

6.1 Definition



3p r i v i l e g e s a n d c o n d u c t : e v i d e n c e

6.2 Advance Notice

6.3 Travelling expenses

6.4 Subsistence expenses

7 SELECT COMMITTEE VISITS

7.1. Travel

7.2 Day Subsistence

7.3 Office Costs

7.4 Accommodation Maintenance Allowance for Second Home7.5 Night Subsistence

7.6 Insurance Costs

8 PARLIAMENTARY DELEGATIONS

8.1 Travel and Subsistence

8.2 Office Costs

8.3 Accommodation Maintenance Allowance for Second Home


8.5 Expenses of a Rapporteur

8.6 Insurance Costs

9 BRITISH-IRISH INTER-PARLIAMENTARY BODY(BIIPB)


9.2 Office Costs9.3 Accommodation Maintenance Allowance for Second Home

10 TRAVEL AS A REPRESENTATIVE OF THE HOUSE



10.3 Insurance Costs

11 LAW LORDS


12 MINISTERS AND PAID OFFICE HOLDERS

12.1 Secretarial Expenses

12.2 Spouses’ and Children’s Travelling

13 TRAVELLING EXPENSES FOR BODIES NOT SUPPORTED

13.1 Specific Bodies14 MEMBERS’ PERSONAL ACCIDENT INSURANCE

14.1 Summary

14.2 Cover on the Parliamentary Estate or travelling between home and Westminster

14.3 Cover whilst Travelling

14.4 Exemptions

15 FREE POSTAGE

15.1 Envelopes and Postcards

16 BROADBAND COSTS

17 FINANCIAL ASSISTANCE TO OPPOSITION PARTIES IN THE HOUSE OF LORDS

“CRANBORNE MONEY”

1. INTRODUCTION

1.1 Summary Table

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A c c o m m o d a t i o n

S p o u s e a n d

M a i n t e n a n c e

I n s u r a n c e

M e m b e r

O v e r n i g h t

D a y

O f f i c e / S e c r e t a r i a l

C h i l d r e n s ’

A l l o w a n c e f o r a

c o v e r

c a t e g o r y

T y p e s o f c l a i m

S u b s i s t e n c e

S u b s i s t e n c e

C o s t s

T r a v e l

S e c o n d H o m e

T r a v e l

p r o v i d e d

S i t t i n g s o f t h e H o u s e

m a x £ 1 5 4 . 5 0 p e r

m a x

£ 7 7 p e r d a y

m a x £ 6 7 p e r d a y

6 j o u r n e y s e a c h

N o

Y e s

Y e s

n i g h t

p e r y e a r

S e l e c t C o m m i t t e e m e e t i n g s a t

m a x £ 1 5 4 . 5 0 p e r

m a x

£ 7 7 p e r d a y

m a x £ 6 7 p e r d a y

N o

N o

Y e s

Y e s

W e s t m i n s t e r

n i g h t

S e l e c t C o m m i t t e e V i s i t s

m e t d i r e c t l y


m a x £ 6 7 p e r d a y

N o

m a x £ 1 0 3

Y e s

Y e s

M e m b e r s o f p a r l i a m e n t a r y

F o r e i g n &

F o r e i g n &

m a x £ 6 7 p e r d a y

N o

m a x £ 1 0 3

Y e s

Y e s

d e l e g a t i o n s

C o m m o n w e a l t h


O f f i c e r a t e s

O f f i c

e r a t e s

A d d i t i o n a l O f f i c e C o s t s

N / A

N / A

m a x 4 0 d a y s w

£ 6 7 p e r

N / A

N / A

N / A

N / A

d a y

B a c k b e n c h

U K t r a v e l o n p a r l i a m e n

t a r y b u s i n e s s

N o

N o

N o

N o

N o

Y e s

Y e s

M e m b e r s

T r a v e l t o E U I n s t i t u t i o n s

F o r e i g n &

F o r e i g n &

N o

N o

N o

Y e s

Y e s



O f f i c e r a t e s

O f f i c

e r a t e s

B r i t i s h - I r i s h I n t e r - P a r l i a m e n t a r y

f r o m H o u s e o f

f r o m

H o u s e o f

m a x £ 6 7 p e r d a y

N o

m a x £ 1 0 3

N o

Y e s

B o d y

C o m m o n s

C o m m o n s

T r a v e l a s a R e p r e s e n t a t i v e o f t h e



m a x £ 6 7 p e r d a y

N o

m a x £ 1 0 3

Y e s

Y e s

H o u s e

S a l a r i e d

L a w L o r d

N o

N o

N o

N o

N o

Y e s

Y e s

M e m b e r s !

M i n i s t e r

N o

N o

m a x £ 5 , 0 2 5 . 5 0 p a

1 5 j o u r n e y s e a c h

N o

N o

Y e s

p e r y e a r

O f f i c e H o l d e r

N o

N o

m a x £ 5 , 0 2 5 . 5 0 p a

1 5 j o u r n e y s e a c h

N o

Y e s

Y e s

p e r y e a r




1.2 Background

1.2.1 Members of the House of Lords do not, in general, receive a salary in respect of their parliamentaryduties. However, Members may be reimbursed actual expenses arising out of these duties, in accordance withthe rules of the Members’ Reimbursement Allowance Scheme. The Members’ Reimbursement AllowanceScheme is governed by Resolutions of the House. Rules for the recovery of Members’ expenses areadministered by the Clerk of the Parliaments who also has limited discretion to deal with matters that ariseon claims. Points of particular difficulty or doubt may be referred to the House Committee, which supervises

the arrangements for the reimbursement of expenses. The Senior Salaries Review Body carries out regularreviews of parliamentary allowances. Its most recent report on the House of Lords was issued in October 2004(Cm 6354). Subsistence allowances are updated on 1 August each year in line with the Retails Price Index.

1.2.2 Members not in receipt of a parliamentary salary are able to recover expenses for:

— daily and overnight subsistence expenses, office costs and travel expenses incurred in attending asitting of the House or a Committee meeting at Westminster—see section 4;

— travel in the UK on Parliamentary Business—see section 5;

— travel to EU Institutions—see section 6;

— participation in select committee visits—see section 7;

— participation in official Parliamentary delegations—see section 8;

— certain limited expenses for participation in the British-Irish Inter-Parliamentary Body visits—seesection 9;

— travel as a representative of the House—see section 10.

1.2.3 Sections 11 and 12 provide information on the reimbursement allowances available to salaried Membersof the House, ie the Law Lords, Ministers and paid Office Holders.

1.3 Taxable status

1.3.1 All amounts paid in settlement of claims as detailed in thisguide represent reimbursement of actualexpenses arising out ofunpaid parliamentary duty, rather than income from employment. Consequently, theyare not subject to income tax, and need not be included on a tax return.

2. HOW TO CLAIM

2.1 The Finance Department

2.1.1 The reimbursement scheme is administered by the Members’ Expenses Section in the FinanceDepartment, House of Lords which also has access to a full record of Members’ attendances at the House.

2.1.2 The Members’ Expenses Section is housed in Room 645 on the sixth floor of Millbank House. Thepostal address is:

Finance Department House of Lords London SW1A 0PW

A dedicated telephone number for Members to contact the office is 020 7219 6096.

The FAX number is 020 7219 2369 and the Finance Department’s generic email address isfindeptwparliament.uk.

2.1.3 All forms are available from the Members’ Expenses Section (unless otherwise stated) and from theFinance Department’s Intranet page.

2.1.4 It would not be possible to incorporate in this guide every circumstance under which Members may beable to reclaim expenses. Members are therefore encouraged to contact the Members’ Expenses Section, on the

above telephone number, for general assistance or to discuss any particular points that arise from their claims.

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3. GENERAL CONDITIONS RELATING TO CLAIMS AND ALLOWANCES

3.1 Eligibility to claim expenses

3.1.1 No Member may claim expenses unless they have taken the oath of allegiance or affirmed. Members onleave of absence are also ineligible to claim.

3.2 Time limit

3.2.1 Expenses claims should be submitted within three months of the expense arising.

3.3 Publication of information relating to Members’ claims for expenses

3.3.1 Information on the expenses claimed by each Member is published annually on the Parliamentarywebsite.

4 ATTENDANCE AT SITTINGS AT WESTMINSTER

4.1 General—Expenses Related to Attendance

4.1.1 The basic principle underlying the scheme is that the entitlement to recover expenses arises only inrespect of attendance at sittings of the House or its committees at Westminster. These are defined as:

— sittings of the House (excluding attendance at the State Opening of Parliament and sittings for

judicial business)

— meetings of committees and sub-committees of the House (except judicial business)

— meetings as a member of the Board of the Parliamentary Office of Science and Technology (POST)

— meetings as a member of the Parliamentary Broadcasting Unit Limited (PARBUL).

4.1.2 Members travelling on parliamentary business away from Westminster may only be reimbursed theirexpenses under the specific arrangements set out in sections 5 to 10. Costs incurred in respect of an attendanceat any other meeting, whether held at Westminster or not, cannot be recovered unless the Member attends ameeting falling within paragraph 4.1.1 on the same day.

4.1.3 Members who wish to claim attendance expenses must complete and sign the attendance expenses claimform and forward it as soon as convenient after the end of each month, or period of claim, to the Members’Expenses Section. A Member’s signature effectively certifies that the amount claimed has been spent for thepurposes of parliamentary duties as set out above. Receipts are not required.

4.1.4 Claims for subsistence (4.4 and 4.5) and office costs (4.6) must not exceed the daily maxima for thatcategory of expenses aggregated over the period of the claim. For example, if a Member claims for 10 days’office costs it is possible to claim more than the normal maximum of £67 for any specific day(s) providing thatthe overall maximum of £670 (10 x £67) is not exceeded.

4.1.5 The latest version of the attendance expenses claim form is always available from the Printed PaperOffice and the Members’ Expenses Section. The form can also be found on House of Lords Intranet underOffices & Administration, Finance Department, Members’ Services.

4.1.6 The reverse of the attendance expenses claim form contains a “quick guide”. This includes the currentmaxima of the allowances and the names of the staff to contact in the Members’ Expenses Section. The “quickguide” is updated regularly and whenever the maxima of the allowances are increased, currently in August of

each year.


General

4.2.1 Claims may be made only for journeys over five miles between a Member’s main place of residence inthe United Kingdom and Westminster. Claims for incidental travel costs (eg those arising from short distance journeys within a five mile radius of Westminster, tolls and car parking charges) are covered by the daysubsistence allowance (4.5).

4.2.2 Members seeking to receive travel costs must register their main place of residence with the Members’Expenses Section. Members with more than one main place of residence may register an alternative mainresidence with the Members’ Expenses Section for the purpose of claiming travelling expenses. Registration

is subject to the approval of the Clerk of the Parliaments.




4.2.3 If a Member’s main place of residence is outside the UK, travel costs may be reimbursed from the pointof entry into the UK in accordance with 4.2.4 to 4.2.14.

4.2.4 Members may recover the cost of fares incurred by them for travel by any public railway, sea, and airor bus service, or the costs of journey made by private car.

Rail and Air

4.2.5 Members are entitled to claim the cost of first class tickets when travelling by rail and business classtickets when travelling by air. However, Members are expected to take advantage of any available cheap ticketfacilities. The cost of “rail cards”, for example a senior citizen rail card, can be reimbursed. The Travel Office(020 7219 4232) is available as a service for members of both Houses to book tickets, and significant discountsare available on many routes.

4.2.6 Claims for rail travel may include the cost of sleeping berths and seat reservations. Costs of meals andrefreshments are redeemable as day subsistence.

4.2.7 Claims for air travel may include fares for travel by coach between the airport and air terminal.

Road

4.2.8 Claims in respect of journeys by private car are payable at:

— 40p per mile up to 10,000 miles in the year ending 31 March; and

— 25p per mile for mileage in excess of 10,000 miles in the same year.

No other claims in respect of motoring expenses are reimbursable under the travelling expenses heading.Incidental travel costs such as tolls, congestion charges and car-parking charges can be claimed against thedaily limit of the day subsistence allowance (4.5).

4.2.9 In certain circumstances claims for double journeys will be admitted, eg when a Member’s car takes himor her to, or fetches him or her from, a railway station or airport and is thereby necessarily involved in adouble journey.

4.2.10 Claims in respect of hired cars/taxis may only be made on the same basis as for a privately owned car, ieMembers can be reimbursed the normal mileage allowance for the miles actually travelled in the hired car/taxi.

4.2.11 Travel by private car is considerably more expensive than by public transport and Members shouldtherefore use public transport wherever practicable.

4.2.12 Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mile.

4.2.13 Claims in respect of journeys undertaken by bicycle are paid at the rate of 20p per mile.

Recall of the House

4.2.14 Should the House be recalled during a Parliamentary recess, Members who are away from their mainplace of residence may recover the costs necessarily incurred in attending a sitting of the House, including thecost of travelfrom overseas. A separate claim form is available from the Members’ Expenses Section to recovertravel costs in those circumstances.

4.3 Spouses’ and Children’s Travel

4.3.1 A Member may recover the costs incurred by a wife or husband for upto six return journeys per calendaryear between home and Westminster to attend Parliamentary occasions. A Member may also recover the costsincurred by each of their children, up to the age of 18, on the same basis. Such costs are reimbursed on thesame basis as those for Members travel (4.2).

4.3.2 Claims under this heading should be included on the Members’ claim form. The form should clearlyindicate whether the claim relates to the spouse or a named child.


4.4.1 Members whose main residence is outside Greater London may claim for expenses of overnight

accommodation in London while away from their only or main residence. The maximum daily limit is £154.50.

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4.4.2 A Member whose main residence is outside Greater London and who maintains a residence in Londonfor the purpose of attending sittings of the House may claim this allowance towards the cost of maintainingsuch a residence.

4.4.3 Claims for night subsistence are only permissible in respect of nights actually spent in London eitherimmediately preceding or following attendance at a sitting or meeting described in paragraph 4.1.1 above. Forexample, a Member who necessarily travels to London on a Sunday and attends sittings of the House onMonday, Tuesday, Wednesday and Thursday and then returns home on Friday or later may claim night

subsistence for a maximum of 5 nights at up to a maximum of £154.50 per night (ie a maximum of £772.50for the week). However, if the Member returned home on the Thursday evening, the maximum claim for nightsubsistence would be 4 nights at up to a maximum of £154.50 per night (ie a maximum of £618 for the week).

4.4.4 Members who choose to travel home each night or whose main residence is within Greater Londoncannot claim the night subsistence allowance.

4.5 Day Subsistence

4.5.1 Members may claim day subsistence costs within a daily limit of £77.00 for each day of attendance.

4.5.2 This allowance is intended to cover such items as the cost of meals and incidental travel costs notseparately recoverable (eg short distance journeys within a five mile radius of Westminster, taxi fares, tolls andcar parking charges). It also includes an element to cover the costs of providing refreshments for a Member’s

visitors to the House on official business.

4.6 Office Costs

4.6.1 Members may claim office costs within a daily limit of £67.00 for each day of attendance.

4.6.2 Such claims may include the cost of secretarial help, research assistance, and additional expenses (egdomestic costs, purchase of books and periodicals and professional subscription charges that arise out of

parliamentary duties).

4.6.3 Office costs may also be recovered in respect of a maximum of 40 days per year when the House is notsitting, or the House is sitting but a Member does not attend.

4.7 Other Expenses

Disablement

4.7.1 Members who are disabled may recover the additional expenses of attending the House incurred by thembecause of their disablement and not recoverable within the normal daily limits. This may include the

additional cost of travel, specialist assistance or equipment etc. Each case is considered on its merits.Applications should be submitted to the Members’ Expenses Section, and are subject to the approval of theClerk of the Parliaments.

5. TRAVEL ON UK PARLIAMENTARY BUSINESS

5.1 Definition

5.1.1 In addition to the normal travel arrangements, the cost of journeys made on parliamentary businesselsewhere within the United Kingdom may also be recovered. Claims for such travel are subject to the priorapproval of the Clerk of the Parliaments and to the following conditions:

— the purpose of the visit is clearly related to the work of Parliament and does not include partypolitical, personal or private business;

— claims are subject to the limitations outlined in paragraphs 4.2.4–4.2.13;

— the expenses are not recoverable from any other source;

— application for reimbursement must be submitted to the Members’ Expenses Section at least oneweek before the date of the proposed journey;

— Members must confirm the actual travelling expenses incurred after the journey has been undertaken.




5.2 Industry and Parliament Trust and Armed Forces Parliamentary Scheme

5.2.1 The costs of journeys on business connected with the Industry and Parliament Trust (IPT) or Armed

Forces Parliamentary Scheme (AFPS) may be claimed, so long as they meet the terms scheme set out above.All other claims should be addressed to the IPT or AFPS.

6 TRAVEL TO EU INSTITUTIONS

6.1 Definition

6.1.1 Members are able to recover the costs of travelling on parliamentary duties between the UnitedKingdom and any European Union institution in Brussels, Luxembourg or Strasbourg or the national

parliament of a European Union state or a candidate country. This is subject to a limit of two return journeys

in any year from 1 April to 31 March.

6.2 Advance Notice

6.2.1 Members seeking reimbursement must obtain advance approval for the visit from the Clerk of the

Parliaments. Applications should be submitted at least one week in advance of the visit, giving details of:

(i) the visit’s purpose;

(ii) its destination(s);

(iii) its duration; and

(iv) the persons or organisations to be met.

Application forms are available from the Members’ Expenses Section or the Clerk of the Parliaments’ Office.

6.2.2 The Members’ Expenses Section will advise the Member whether or not the visit has been approved by

the Clerk of the Parliaments, enclosing a claim form to be submitted after the visit. Claim forms should becompleted and returned to the Members’ Expenses Section together with bills and receipts for any travel

expenses incurred.

6.3 Travelling expenses

6.3.1 The amount payable in respect of travel, by any means, out of and into the United Kingdom is restricted

to a maximum of the business class return fare between a station or airport serving London or the area of the

Member’s main residence and a station or airport serving the city visited. Travel costs to and from the point

of exit from and entry to the UK can be claimed on the same terms as for expenses in attending sittings of

the House.

6.4 Subsistence expenses

6.4.1 Members are entitled to a subsistence allowance limited to two nights (48 hours) calculated at theForeign and Commonwealth Office Class A standard subsistence rate current at the time of the visit. The

standard subsistence rate is deemed to cover all costs for accommodation, taxis, meals and refreshments.

Information on these rates is held by the Members’ Expenses Section.

6.4.2. Subsistence is calculated from the time that a Member leaves Westminster or their main residence until

their return. Subsistence rates are set in the local currency of the country being visited, but reimbursement willbe paid in sterling.

7 SELECT COMMITTEE VISITS

7.1. Travel

7.1.1 Travel arrangements for select committee meetings held away from Westminster, in the UK or overseas,

are made by the Committee Office, which meets the costs directly. Costs of travel from home to the starting

point for a visit (see 4.2 above), and of any necessary overnight stay at the start or end of the visit (see 7.5.1

below), should be reclaimed through the committee clerk. Travel and subsistence claim forms are available

from the Committee Office.

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Day Subsistence

7.2.1 Day subsistence costs for select committee meetings held away from Westminster are met directly by theCommittee Office or paid at standard Government subsistence rates appropriate to the location. Members arenot entitled to claim their subsistence costs under the arrangements in place for attendance at Westminster.

7.3 Office Costs

7.3.1 Office costs are recoverable on the same basis as for attendance at the House (4.6).


7.4.1 Members who maintain a second residence in London for the purpose of attending sittings of the House

may claim an allowance of up to £103 per night whilst on a committee visit away from Westminster for

continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2).


7.5.1 If a Member needs to spend a night in London immediately before or after a committee visit and is not

able to attend the House on that day a claim for night subsistence in the terms set out in Section 4.4 may be

made. Such claims are subject to the prior approval of the clerk of the committee. Claims for reimbursement

should be made on Travel and Subsistence forms available from the Committee Office.

7.6 Insurance Costs

7.6.1 Details of the group personal accident insurance covering Members are given in section 14. As this cover

is limited Members are advised to also make their own private insurance arrangements for losses not provided

by the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed to the Member

who should submit the claim to the clerk of the committee for approval. Claims for reimbursement should bemade on Travel and Subsistence forms which are available from Committee Office.

8 PARLIAMENTARY DELEGATIONS


8.1.1 The payment of travel and subsistence costs incurred in the United Kingdom or overseas by membersof the officialparliamentary delegations to the parliamentary assemblies of the Council of Europe, the WesternEuropean Union, NATO and the Organisation for Security and Co-operation in Europe, is administered by

the House of Commons Overseas Office in accordance with the rules agreed by both Houses. Full details of

these arrangements are set out in the Administrative Guide for Members of the United Kingdom Delegations,

a copy of which is provided, on the appointment of a delegate, by the Overseas Office in the House of

Commons. Parliamentary Delegation claim forms are available from the House of Commons.

8.1.2 Whilst travelling on or participating as a member of a parliamentary delegation, Members are not

entitled to claim their subsistence costs under the arrangements in place for attendance at Westminster.

8.1.3 For meetings held away from Westminster, in the UK or overseas, travel is arranged by the Delegation

Secretary. Costs are normally met directly by the House of Commons Overseas Office. Costs of travel from

home to the starting point for a visit may be claimed as detailed in 4.2 above. Claims for reimbursement shouldbe made on Parliamentary Delegation claim forms which are available from the House of CommonsOverseas Office.

8.2 Office Costs

8.2.1 Office costs are recoverable from the House of Lords on the same basis as for attendance at the

House (4.6).


8.3.1 Members who maintain a second residence in London for the purpose of attending sittings of the House

may claim an allowance of £103 per night whilst on a Parliamentary Delegation away from Westminster for

continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2).





8.4.1 If a Member needs to spend a night in London immediately before or after a delegation visit and is notable to attend the House on that day a claim for night subsistence in the terms set out in Section 4.4 may bemade. Such claims are subject to the prior approval of the Clerk of the Overseas Office. Claims forreimbursement should be made on Travel and Subsistence forms available from the House of CommonsOverseas Office.

8.5 Expenses of a Rapporteur

8.5.1 If a member attends a delegation in the capacity of Rapporteur then only office costs and theaccommodation maintenance allowance for a second home may be claimed (8.2 to 8.3) above. Other expensesare met by the organisation which appointed the Rapporteur.

8.6 Insurance Costs

8.6.1 Details of the group personal accident insurance covering Members are given in section 14. As this coveris limited Members are advised to also make their own private insurance arrangements for losses not providedby the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed to the Memberwho should submit the claim to the Clerk of the Overseas Office (020 7219 3130) for approval prior to the visit.Claims for reimbursement should be made on Travel and Subsistence forms which are available from theHouse of Commons Overseas Office.

9 BRITISH-IRISH INTER-PARLIAMENTARY BODY (BIIPB)


9.1.1 The House of Lords has no responsibility for meetings and visits organised by the BIIPB and claims fortravel and subsistence expenses are dealt with by the House of Commons. Contact details are available via theParliamentary Intranet Index page.

9.2 Office Costs

9.2.1 Office costs are recoverable on the same basis as for attendance at the House (4.6).


9.3.1 Members who maintain a second residence in London for the purpose of attending sittings of the Housemay claim an allowance of £103 per night whilst attending meetings of the BIIPB away from Westminster forcontinuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2).

10 TRAVEL AS A REPRESENTATIVE OF THE HOUSE


10.1.1 All expenses are met by the Overseas Office which has responsibility for travel by Members overseas as

representatives of the House. Details may be obtained from the Clerk of the Overseas Office (020 7219 3130).


10.2. Members who maintain a second residence in London for the purpose of attending sittings of the Housemay claim an allowance of £103 per night whilst travelling as a representative of the House away fromWestminster for continuing accommodation costs incurred, on the same basis as the Night SubsistenceAllowance (4.4.2).

10.3 Insurance Costs

10.3.1 Details of the group personal accident insurance covering Members are given in section 14. As thiscover is limited Members are advised to also make their own private insurance arrangements for losses notprovided by the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed tothe Member who should submit the claim to the Clerk of the overseas Office for approval. Claims for

reimbursement should be made on Travel and Subsistence forms which are available from the Overseas Office.

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11 LAW LORDS


11.1.1 Lords of Appeal in Ordinary (the “Law Lords”) are able to claim travel expenses between their mainresidence and Westminster at any time during the law term.

12 MINISTERS AND PAID OFFICE HOLDERS

12.1 Secretarial Expenses

12.1.1 Ministers and other paid Office Holders in the House of Lords are able to recover expenses forsecretarial assistance certified as incurred by them in the performance of Parliamentary duties. The maximumamount recoverable in the twelve month period commencing 1 August 2005 is £5,025.50.

12.1.2 A certificate should accompany the evidence of expenditure. Templates of documents required areprovided by the Members’ Expenses Section.

12.2 Spouses’ and Children’s Travelling

12.2.1 A Lords’ Minister or paid Office Holder who maintains a permanent home outside Greater Londonmay claim for the cost of journeys undertaken between home and Westminster by his or her spouse anddependant children, up to a limit of 15 return journeys for each spouse or child per calendar year.

13 TRAVELLING EXPENSES FOR BODIES NOT SUPPORTED

13.1 Specific Bodies

13.1.1 The House of Lords does not have any responsibility for visits organised by the CommonwealthParliamentary Association (CPA) or Inter-Parliamentary Union (IPU). Any claims for expenses should beaddressed to the appropriate organisation.

14 MEMBERS’ PERSONAL ACCIDENT INSURANCE

14.1 Summary

14.1.1 The House maintains an insurance policy to cover Members for accidents whilst on the ParliamentaryEstate, whilst travelling between home and the House and whilst travelling on official parliamentary business.For insurance purposes, official parliamentary business is defined as trips, visits or attendance at events wherethe House has paid Members’ travelling expenses. Currently, this includes:

— Travel under the UK Parliamentary Business travel scheme (section 5)

— Travel to EU Instritutions (section 6)

— Select Committee visits (section 7)

— Parliamentary Delegations (section 8)

— BIIPB (section 9)

— Travel as a representative of the House (section 10).

A brief overview of cover provided is shown below. Members should consult the full details of the policy toascertain if this provides sufficient personal cover. The policy can be viewed on the Finance Department’sintranet page.

14.2 Cover on the Parliamentary Estate or travelling between home and Westminster

14.2.1 The following benefits are provided:

Accidental death (benefit may vary subject to existing medical conditions)—£175,000

Permanent total disablement and or disabling injuries (up to age 75)—up to a maximum of £175,000

Temporary total disablement (up to age 75)—£200 per week for up to 104 weeks

Accident medical expenses—maximum of £10,000 per person




14.3 Cover whilst Travelling

14.3.1 In addition to the benefits shown above, the following cover is provided for Members whilst travellingwithin the UK (where the trip involves an overnight stay away from London or includes air travel) or overseason official parliamentary business:

Medical Expenses £2,500,000

Rescue unlimited

Personal Belongings £2,500 (single article limit £1,500)Money £5,000 (cash limit £1,000)

Personal Liability £2,000,000

Hijack £15,000

Legal Expenses £25,000

Supplementary Travel Expenses £15,000 (for travel and accommodation expenses of family visiting)

14.4 Exemptions

14.4.1 The following terms and exemptions apply:

(a) Cover is not automatic in respect of travel to certain countries. Currently, the Finance Departmentmust give prior notification to the insurer for journeys to Afghanistan, Chechnya, Iraq, Israel andthe Occupied Territories, Saudi Arabia, and Yemen. The list of countries and cover available mayvary from time to time: if in doubt please consult the Finance Department.

(b) Whilst travelling, an aircraft accumulation limit of £2 million applies. Based on the maximum suminsured of £175,000, this will allow a group of 11 Members to travel together.

(c) For travel in single engine aircraft (and helicopters), the accumulation limit is reduced to £525,000 orfull cover for three Members.

(d) Additional restrictions apply and Members should consult the Finance Department or the policy forfull details.

14.4.2 The Finance Department should be notified of any claims.

15 FREE POSTAGE

15.1 Envelopes and Postcards

15.1.1 Postage-paid envelopes and postcards are available from the Printed Paper Office (PPO) for Members’correspondence on Parliamentary business. Supplies may be collected by Members in person, or by Members’staff if authorised in advance by the Member concerned. Those collecting envelopes and postcards will beasked to sign for them.

15.1.2 A maximum of 100 of each type of envelope or postcard may be issued to a Member on any one day.Small quantities (up to 50 in total with a maximum of 10 of each type) may be sent by post to Members’ privateaddresses on receipt by the PPO of a signed order form.

15.1.3 For further details or forms please contact the PPO (tel: extension 3960 or 3038, or email to

quingwparliament.uk).15.1.4 Members are reminded that prepaid envelopes and postcards may not be used:

— For correspondence of a business, commercial or personal nature;

— For the correspondence of a parliamentary group which includes persons other thanparliamentarians;

— In connection with party political fund raising or campaigning;

— For issuing circulars of any description (ie an unsolicited letter sent in identical or near identical formto a number of addresses);

— For internal mail (mail within the Parliamentary estate); or

— For overseas mail (including Europe and the Republic of Ireland).

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15.1.5 Members are also asked to recognise the need to avoid wastage of prepaid envelopes and postcards, onwhich the House will have already paid the postal charge. In particular, envelopes and cards should not beused for making notes or for internal mail of any kind; nor should they be left unused and forgotten in anoffice. Although there is no formal limit on the number of prepaid envelopes available to Members, Membersare nevertheless asked to keep their requests to modest numbers.

16 BROADBAND COSTS

16.1 A Member who has borrowed an official laptop computer is entitled to apply for an ASDL connectionfor which no charge is made. If this is not technically possible then a Member can be reimbursed the cost of installation and rental of an ISDN line. Further details and forms are available from the Computer Office (0207219 6061).

17 FINANCIAL ASSISTANCE TO OPPOSITION PARTIES IN THE HOUSE OF LORDS

“CRANBORNE MONEY”

17.1 A scheme for providing financial assistance to the Official Opposition and the second largest oppositionparty in the House of Lords to assist them in carrying out their parliamentary business was introduced inOctober 1996. A similar scheme known as “Short money” has been in operation in the House of Commonssince 1975. The scheme was extended in October 1999 to include assistance for the Convenor of the Cross-Bench Peers.

17.2 The amounts payable are uprated annually in April in line with the retail prices index. The sums paid tothe parties and the Convenor are subject to independent audit.

17.3 Each party is responsible for the allocation of its individual entitlement and any matters concerningfinancial assistance should be referred to the Leader of the Party concerned or to the Convenor.

Members’ Reimbursement Allowance Scheme Quick Guide,

September 2005

[This guide is printed on the reverse of the claim form. The front of the claim form is printed at p29.]

This “quick guide” provides brief details of the reimbursement allowances available to Members of the Houseof Lords. It includes the current maxima of the allowances and the staff to contact in the Finance Department.The “quick guide” will be updated regularly and whenever the maxima of the allowances are increased. Full

details of the scheme are set out in the “General Guide”, which is available in the Printed Paper Office and whichcan also be found on the House of Lords Intranet under Offices & Administration, Finance Department,Members’ Services.

Members of the House of Lords, who are not in receipt of a salary as a Minister, Office Holder or Lord of Appeal in Ordinary are entitled to recover the costs of travel, subsistence and secretarial assistance incurredin connection with their parliamentary duties, as set out below.

(i) Night Subsistence —Members whose main residence is outside Greater London may claim expenses,within a daily limit of £154.50 (from 1 August 2005 to 31 July 2006), for nights spent away from theironly or main residence for the purpose of attending sittings of the House a) where they have incurredexpenses of overnight accommodation in London or; b) as a contribution towards the costs of

maintaining a London residence in connection with their parliamentary duties. Claims can only bemade in respect of days of attendance.

(ii) Day Subsistence and Incidental travel —Only claimable on days of attendance. This allowance isintended to cover such items as the cost of meals and incidental travel costs (e.g. short distance journeys within a five mile radius of Westminster, taxi fares, tolls and car parking charges) notseparately recoverable. Daily limit £77.00 (from 1 August 2005 to 31 July 2006). Claims can only bemade in respect of days of attendance.

(iii) Office Costs —Claims may include the cost of secretarial help, research assistance and whereappropriate, the cost of providing and maintaining necessary equipment together with the cost of certain additional expenses, including telephone, internet, computer and IT costs (e.g. domestic costs,purchase of books and periodicals and professional subscription charges that arise out of parliamentary duties) within a limit of £67.00 (from 1 August 2005 to 31 July 2006), for each day of

attendance at the House, plus an additional 40 days for which a separate claim form is available.




(iv) Claims for subsistence ((i) and (ii)) and office costs (iii) must not exceed the daily maxima for thatcategory of expenses aggregated over the period of the claim. For example, if a Member claims for 10days’ office costs it is possible to claim more that the normal maximum of £67 for any specific day(s)providing that the overall maximum of £670 (10 x £67) is not exceeded.

(v) Travelling Expenses —These may be claimed for journeys between main place of residence in theUnited Kingdom and London by any public railway, sea, air or bus service. Claims in respect of journeys by private car are restricted to an allowance of 40p per mile up to 10,000 miles then 25p

thereafter. Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mileand by bicycle at the rate of 20p per mile.

Members who wish to claim any of the expenses detailed above should complete and sign the claim form andforward it as soon as convenient after the end of each month, or period of claim, to the Accountant, Houseof Lords. Claims are not admissible retrospectively for more than three months prior to the month in which theclaim is made.

Other Expenses —Members may also claim reimbursement for expenses incurred in respect of: Spouse andChildren’s Travel, Travel on UK Parliamentary Business, Travel to EU Institutions, Select Committee Visits,Travel as Representative of the House and Parliamentary Delegations. Details of these schemes can be foundin the ‘General Guide’ (see above). If in doubt please contact the Finance Department.

The scheme is administered by the Finance Department, House of Lords which also has access to the fullrecord of Lords’ attendances. Members are encouraged to contact the Finance Department, House of Lords forgeneral assistance, or to discuss any particular points that arise from their claims. The Finance Department isbased on the sixth floor of Millbank House. Members’ Reimbursement Allowances are dealt with in Room645.

The postal address is “The Finance Department, House of Lords, London, SW1A 0PW”. A dedicatedtelephone number for Peers to contact the office is 0207 219 6096. The members expenses supervisor isMaureen Buck.

In the autumn of each year, the House publishes information relating to the expenses claimed by eachMember for the preceding financial year.

The Clerk of the Parliaments’ Guidance on the Investigation of Complaints

Relating to Members’ Expenses

Published 20 October 2009

Guidance on complaints relating to Members’ expenses

The Clerk of the Parliaments is the Accounting Officer for the House of Lords and is responsible for ensuringthat public money is used properly. In that capacity he will take steps to investigate Members’ expenses claimsif he is concerned that there may have been a breach of the rules.

Any complaints relating to expenses claims by Members of the House of Lords should be addressed to theClerk of the Parliaments. All complaints made will be considered by the Clerk of the Parliaments in the firstinstance.

In June 2009, the House of Lords House Committee endorsed the following procedures for the Clerk of theParliaments in dealing with complaints relating to Members’ expenses:

a) The Clerk of the Parliaments will give consideration to all complaints he receives. He is able to dismissa complaint after initial consideration if he deems it to be vexatious, frivolous or outside his remit.

b) If he decides to proceed with an investigation, the Clerk of the Parliaments will put the substance of any allegations to the Member concerned, and ask that Member for a written response. Theinvestigation process would normally include examination of the claim forms in question and aninterview with the Member concerned. The Clerk of the Parliaments is able to call on the advice of a small sub-group of members of the House Committee to consider the preliminary findings of hisinvestigations on individual complaints. As recommended by the Committee for Privileges inNovember 2008, the Clerk of the Parliaments is also able to call upon the assistance of the Sub-

Committee on Lords’ Interests in complex cases.

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c) If, following his investigation, the Clerk of the Parliaments decides not to uphold a complaint, heinforms the complainant at this point. The results of his investigation are published on theparliamentary website. Normally the Clerk of the Parliaments seeks to respond to complaints withina period of three months.

d) In any instances where it is not possible for the Clerk of the Parliaments to come to any clearconclusion on a complaint; or where he considers that a Member has been found in breach of the

rules, he would make a report to the House Committee, which is responsible for the supervision of the Members’ Expenses Scheme. If, in a particular instance, the House Committee considers that asanction against a Member may be appropriate, it would refer the matter to the Committee forPrivileges.

e) If, at any point in his investigation of a complaint, the Clerk of the Parliaments considers that thereare sufficient prima facie grounds to justify reporting a matter to the Police for them to consider apossible criminal investigation, he will proceed accordingly and suspend his own investigation of acomplaint until the question of possible criminal proceedings has been resolved.

Published Extract from the Minute of the House Committee Meeting

of 26 January 2010

Members’ expenses: investigation of complaints

The Clerk of the Parliaments spoke to his memorandum (H/09-10/8) [RESERVED].

As detailed in the paper, he reported that he had already come to decisions on a number of complaints. Heemphasised that he was operating under the current scheme, one of the weaknesses of which was that therewas no clear definition of a main residence. He had however taken the view, within the context of the individualassessment of each case, that there needed to be a minimum threshold beyond which it would be inappropriatefor a Member to designate a property as a main or only residence, and consequently claim overnightsubsistence when staying in London.

He sought the endorsement of the Committee of the criteria which he was incorporating into his assessmentof cases where frequency of visits was an issue: ie that the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses. Thesefactors would be taken into account, along with other evidence, when assessing the validity of the designationof a mainresidence. He drew the attention of the Committee to the fact that it was probable that more stringentrequirements would be a feature of the new scheme for Members’ expenses.

He also raised the issue of whether a property that was occupied by a relative other than a spouse or partnercould in any circumstances be designated as a main residence under the current scheme. It was felt that thiscould in very specific circumstances be appropriate, subject to the thresholds established and depending onthe detail of the Member’s connection with the property, including relevant financial responsibilities.

The Committee considered the extent to which the Clerk of the Parliaments should rely on written assurancesgiven by Members in respect of his enquiries, especially when there was significant disparity between theassurances given by Members and the allegations made against them. The Committee acknowledged thelimitations on the investigative powers of the Clerk of the Parliaments and concluded that the Clerk was justified in relying on explicit written assurances from Members, noting that the consequences for a Memberfound to have misled the Clerk would be serious. If, however, a Member was not able to give the Clerk theassurances he sought, it would be appropriate to refer the case to the Sub-Committee on Lords’ Interests.

There were still a number of outstanding complaints but the Clerk of the Parliaments now proposed to publishin the near future his conclusions on all the cases on which he had reached decisions.

The Committee took note.




The Clerk of the Parliaments’ Report on Lord Rennard

Published 20 October 2009

Letter from Mr Michael Pownall, the Clerk of the Parliaments, to Mr Christopher Galley

dated 20 October 2009

Complaint against Lord Rennard

I am writing in connection with your complaint concerning Lord Rennard’s claims for reimbursement of expenses. I can report that I have completed my investigation. At the outset, I asked Lord Rennard to respondto your complaint and I have discussed it with him.

So far as your complaint about Lord Rennard’s participation in the work of the House of Lords—in particularover the period April 2007 to March 2008—is concerned, this has no bearing on the designation of his mainresidence. The number of times that Lord Rennard spoke and voted in the House is a matter for him. In fact,Lord Rennard’s record over the period in question shows that he was far from inactive in the House and thesestatistics do not necessarily reflect the wider contribution which a Member makes to the work of the House.I should explain that claims for expenses arising from overnight subsistence can only be authorised for dayson which a Member’s attendance at the House is recorded. Your allegation that Lord Rennard did not attendon all the days for which he claimed overnight subsistence is not, therefore, well-founded; and I accordinglydo not uphold this aspect of the complaint.

Turning to your complaint about the designation of Lord Rennard’s main residence, the direct answer to thequestion why he did not claim overnight subsistence between 2003 and 2007 is that during this period his onlyresidence was in Stockwell.

So far as Lord Rennard’s re-designation of his main residence in 2007 is concerned, he has explained to methat his circumstances changed in 2007 when his wife took early retirement and he made significant changesto his lifestyle. He bought a flat in Eastbourne in October 2007 and registered this as his main residence withthe House of Lords’ Finance Department.

Taking up some of the detailed points which you made, he has explained to me that he and his wife are on theelectoral register for both residences andthat they had voted in Eastbourne in the recent European and County

Council elections; that they were automatically deemed to be members of the Stockwell Park ResidentsAssociation; and that his Liberal Democrat party membership had remained in London since party rulesprovide for membership to be held where you live or where you work. He explained that he is, nonetheless,actively involved with the local party in Eastbourne. He stressed too that he and his wife pay council tax forthe Eastbourne property.

I have also reviewed some of Lord Rennard’s recent claim forms. These confirm that he travels to and fromhis Eastbourne address quite regularly at weekends (perhaps two out of three). He indicated that he normallyresides there in recess periods (i.e. he stays there more than in his London property whilst recognising that hewould often also be away from both homes through other work or holidays.) He also indicated that untilrecently his employment had entailed extensive periods of work and travel around the country at weekends.

In view of the assurances by Lord Rennard about the change in his circumstances and the time he spends in

Eastbourne, and in the absence of any definition of main address in the current guidance to the House of Lords’ Members Expenses Scheme, I have come to the conclusion that I should not uphold the complaint.

It may be helpful to point out that the Senior Salaries Review Body is currently undertaking a review of thewhole system of financial support for Members, and in June of this year they were asked by the House of Lords’ House Committee to consider the need for possible definitions of main residence.

In these circumstances and after due consideration, I have decided not to uphold your complaint: I haveconcluded that Lord Rennard’s claims for expenses were in accordance with the rules and guidance onMembers’ expenses applicable at the time.

In line with our publication policy, we will make this letter available on the Parliamentary website.

20 October 2009

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The Clerk of the Parliaments’ Reports on Nine Members

Published 9 February 2010

Letter from the Clerk of the Parliaments to Mr Frank Cannings dated 9 February 2010

I am now in a position to respond to a number of the complaints which you made about certain Members of the House of Lords on 17 November 2009 and the further complaint which you made on 20 January 2010.The complaints all related to newspaper allegations that certain Members had made inappropriate use of the

Members’ reimbursement scheme.I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities includesupervision of the system of financial support for Members) took the decision to refer the current system of financialsupport for Members, who as youwill be aware are unsalaried, for external review by the independentReview Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)—http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lordsdebated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the currentscheme will, therefore, be replaced by a new scheme with clearer definitions and rules.

I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on 30November 2009 and which will take effect from 1 April 2010, complaints about Members’ expenses will beconsidered by an independent House of Lords Commissioner for Standards.

My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administered

in accordance with the resolutions of the House on which it is founded, taking account of decisions by theHouse Committee. It is not for me retrospectively to devise rules for the current scheme which have not beenin place to-date.

The current scheme entitles Members to claim for travel and overnight subsistence in London when attendingthe House if “their main or only residence” is outside London. The principal complaint, both of thenewspapers and yourself, has been that some Members have designated as their main residence a propertywhich is not in practice their main residence in order to claim overnight subsistence.

A feature of the current scheme is that it operates without any clear definition of “main residence”. However,I have taken the view that there must be a minimum threshold below which it would be inappropriate for aMember to designate a property as a “main or only residence” andconsequently to claim overnight subsistencewhen staying in London. Bearing this in mind, I have sought to establish some essential criteria against whichthe case of each individual Member can be considered. At my request, the House Committee has accordinglyagreed a basis on which a threshold could be set below which the current scheme should not permit a claimbearing in mind any natural meaning of the term “main or only residence”. Thethreshold set by the Committeeis that the main residence has to be visited with a degree of frequency: in the order of at least once a month,over the year, when the House is sitting. Time spent at the main residence when the House is in recess is alsoa relevant factor. Ownership is not a requirement but is a factor in each case.

I should point out that some of the designations of main residence which have been acceptable under thecurrent scheme may not meet the criteria of a new scheme.

I have sought and received confirmation from the House Committee of the principal that there will becircumstances in which it is appropriate to designate as a main residence a property which is occupied by arelative, other than a spouse or partner. Such a designation can be made properly under the current scheme,subject to the thresholds set out above, and dependent on the Member’s connection with the property,

including their financial contribution to the running costs.For every Member about whom a complaint has been submitted, I have examined the expenses claim formsfrom the date from which the House of Lords’ Administration retain them (April 2006) to the start of thesummer recess in 2009 (July 2009). Those forms show clearly when the Member claimed overnight subsistenceand reimbursement of travel costs from and to the main residence. Where I have written to Members, I havesought to obtain answers to certain standard questions about their circumstances, including:

(i) whether the Member owns or leases the main residence;

(ii) where the Member was resident in each recess;

(iii) what factors led the Member to designate the residence as the main residence;

(iv) whether the pattern of journeys indicated by the Member’s claim forms accurately represents the

frequency of residency at the main residence.




In each case, I have relied on the Member’s explicit written assurances; in particular the assurance that thepattern of journeys indicated by the Member’s claim forms accurately represents the frequency of stays at themain residence.

I have not upheld the following complaints, listed in alphabetical order, for the reasons given:

Baroness Barker

Baroness Barker claimed night subsistence and travel reimbursement from a designated main residence inSussex. According to her pattern of travel claims, she was resident in Sussex about three weekends in four interm-time (i.e., periods when the House is sitting). She has assured me in writing that her claims are an accuraterecord of her journeys and that she was resident in Sussex for more of the recesses in question than she was inLondon. She did not own the Sussex property but paid rent for her use of it and met some expenses.

Given Baroness Barker’s assurances, I consider that her designation meets a test of main residence under thecurrent scheme and accordingly do not uphold the complaint against her.

Lord Colwyn

Lord Colwyn claimed night subsistence and travel reimbursement from a designated main residence inGloucestershire. According to his pattern of travel claims, he was resident in Gloucestershire more than threeweekends in four in term-time. He has assured me in writing that his claims are an accurate record of his

journeys and has provided me with evidence of them; he has also assured me that he lives predominantly inGloucestershire when the House is not sitting. He owns his Gloucestershire property and rents his Londonproperty for the purpose of attending the House.

Given Lord Colwyn’s assurances, I consider that his designation meets a test of main residence under thecurrent scheme and accordingly do not uphold the complaint against him.

Lord Haworth

Lord Haworth claimed night subsistence and travel reimbursement from a designated main residence in Ross& Cromarty. According to his pattern of travel claims, he was resident in Ross & Cromarty twice a monthand occasionally more frequently in term-time. I have evidence of each of his journeys: he travelled by air andvouching is required for reimbursement of air travel.

I consider that his designation meets a test of main residence under the current scheme and accordingly do notuphold the complaint against him.

Baroness Hayman

Baroness Hayman claimed night subsistence and travel reimbursement from a designated main residence inNorfolk from the start of our retained records in April 2006 until her election as Lord Speaker in July 2006;thereafter she has not been eligible to claim for overnight subsistence from the Members’ reimbursementscheme and has been paid the office-holder’s allowance under section 5 of the Ministerial and Other SalariesAct 1971. Baroness Hayman’s travel claims under the Members’ reimbursement scheme for the period Aprilto July 2006 show that she was resident in Norfolk about three weekends in four during term-time. InSeptember 2009 she made a full statement to the Sunday Times newspaper which I have seen and, in light of which, the article in the newspaper acknowledged that there was no question of the rules of the scheme havingbeen broken. Baroness Hayman and her husband own their home in Norfolk and it is quite clear to me that

they live there in recesses and at weekends, when pressure of work permits.

I consider that her designation meets a test of main residence under the current scheme and accordingly donot uphold the complaint against her.

Baroness Morgan of Drefelin

Baroness Morgan of Drefelin claimed night subsistence and travel reimbursement from a designated mainresidence in Cardigan from the start of our retained records in April 2006 until she joined the Government inJanuary 2007. According to her pattern of travel claims, she was resident in Cardigan one or two weekends amonth in term-time. She has assured me in writing that her claims are an accurate record of her journeys; thatshe made further journeys from and to Cardigan for which she did not claim; and that she was resident inCardigan for the Easter, Whitsun and summer recesses of 2006. She and her husband own the Cardigan

property.

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Given Baroness Morgan’s assurances, and the specific guidance to me from the House Committee thatoccupation of a residence once a month and for periods of the recess is sufficient for designation of a mainresidence, I consider that her designation meets a test of main residence under the current scheme andaccordingly do not uphold the complaint against her.

Lord Morris of Manchester

Lord Morris of Manchester claimed night subsistence and travel reimbursement from a designated main

residence in Manchester from the start of our retained records in April 2006 until May 2008 when, due to ill-health, he re-designated his main residence to London. According to his pattern of travel claims, he wasresident in Manchester about three weekends in four in term-time and occasionally more frequently. I haveevidence of each of his journeys: he usually travelled by train and bought his tickets using the Members’Travel Card.

I consider that his designation meets a test of main residence under the current scheme and accordingly do notuphold the complaint against him.

Baroness Northover

Baroness Northover claimed night subsistence and travel reimbursement from a designated main residence inSussex. According to her pattern of travel claims, she was resident in Sussex every weekend in term-time. Shehas assured me in writing that her claims are an accurate record of her journeys; she has further explained to

me that the Sussex property was the family farm, owned in her and her mother’s names, for which she hasbeen solely responsible since her father’s death in 2006. At the time the farm was being wound-up. She hasprovided me with evidence of her residency and involvement with the farm during the period in question.

I consider that her designation met a test of main residence under the current scheme and accordingly do notuphold the complaint against her.

Baroness Thornton

Baroness Thornton was appointed a Minister in January 2008. The period during which claims were submittedunder the Members’ reimbursement scheme with which I am concerned is therefore confined to the periodApril 2006 to January 2008.

In 2001 Baroness Thornton designated as her main residence a property in Shipley, Yorkshire. The presentproperty in Shipley was purchased in 2005. According to her pattern of travel claims for the period with which

I am concerned, she visited the residence very frequently: every weekend in term-time, with a few visits notincluding overnight stays (ie, a return trip to Shipley within a day). She has confirmed her pattern of travelclaims to me and that she continued to visit Shipley regularly at weekends during recesses.

The property was owned and is occupied by Baroness Thornton’s elderly and disabled mother. BaronessThornton has met the mortgage and other costs of the property. Her legal interest in, and the financialcontributions of the two parties to, the property where recorded in 2007 in a private Declaration of Trust,which updated a Declaration of Trust for the property owned prior to 2005. Baroness Thornton’s solicitor hasconfirmed this in writing. The Declaration was recorded at the Land Registry in July 2009.

In addition, Baroness Thornton has family and political connections in Shipley. She is registered to pay counciltax in Shipley and is on the electoral roll there.

As I have already mentioned, the House Committee has indicated that there will be circumstances in which it

is appropriate to designate as a main residence a property which is occupied by a relative, other than a spouseor partner. Taking into account Baroness Thornton’s well-established connection with the property in Shipleyand the frequency of her visits, I have decided that this designation meets a test of main residence under thecurrent scheme and accordingly do not uphold the complaint against her.

Baroness Whitaker

Baroness Whitaker claimed night subsistence and travel reimbursement from a designated main residence inSussex. According to her pattern of travel claims, she was resident in Sussex about three weekends in four interm-time. She has assured me in writing that her claims are an accurate record of her journeys and that shewsa usually resident in Sussex in recess. She and her husband rent the Sussex property and her husband spendsmost of the week in Sussex, irrespective of sittings of the House.

Given Baroness Whitaker’s assurances, I consider that her designation meets a test of main residence under

the current scheme and accordingly do not uphold the complaint against her.




Other Complaints

I have yet to complete my investigations into complaints about a number of other Members. As with theinvestigations covered in this letter, the outcome of each will be made public.

I have suspended my investigation into certain other Members pending the conclusion of police investigations.

On Friday 5 February 2010 the Director of Public Prosecutions announced that Lord Clarke of Hampsteadwould not face prosecution. As I regard this case as complex and serious, I have today referred the complaint

relating to Lord Clarke to the Sub-Committee on Lords’ Interests for examination.This letter has not convered two other Members who were the subject of your complaint.

A member of the public complained about Lord Rennard on 16 June 2009 and I dismissed that complaint, withreasons, on 20 October 2009. I enclose a copy of my report to the complainant in that case.

In addition, I have not considered your complaint about Baroness Scotland of Asthal because she was aMinister throughout the period for which we hold records and so not entitled to claim under the Members’reimbursement scheme.

9 February 2010

The Clerk of the Parliaments’ Reports on Four Members

Published 31 March 2010

Complaints Relating to Members’ Expenses

This document includes my responses to four complaints over Members’ expenses claims.

The responses cover:Lord BhatiaViscount FalklandBaroness GoudieLord Sheldon

1. Lord Bhatia —Reponse to Angus Robertson MP

On 26 July 2009 you submitted a complaint to me about the expense claims of Lord Bhatia. The Committee

for Privileges has agreed that in complex or serious cases I may refer complaints about expense claims to theSub-Committee on Lords’ Interests. This letter is to inform you that I have conducted an initial investigationand have now referred the complaint to the Sub-Committee for further investigation.

In line with our publication policy, we will make this letter available on the Parliamentary website.

2. Viscount Falkland —Reponse to a Member of the Public

On 17 November 2009 you submitted a complaint to me about the expense claims of Viscount Falkland. I haveinvestigated the complaint and I am now in a position to inform you of my conclusion. In line with ourpublication policy, we will make this letter available on the Parliamentary website.

I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities includesupervision of the system of financial support for Members) took the decision to refer the current system of financialsupport for Members, who as youwill be aware are unsalaried, for external review by the independentReview Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)—http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lordsdebated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the currentscheme will, therefore, be replaced by a new scheme with clearer definitions and rules.

I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on 30November 2009 and amended on 30 March 2010 which will take effect from the start of the new Parliament,complaints about Members’ expenses will be considered by an independent House of Lords Commissioner forStandards.

My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administeredin accordance with the resolutions of the House on which it is founded, taking account of decisions by theHouse Committee. It is not for me retrospectively to devise rules for the current scheme which have not been

in place to-date.

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As with my investigations into other complaints, I have examined Viscount Falkland’s expense claim formsfrom the date from which the House of Lords’ Administration retains them (April 2006) to July 2009, whenhe stopped claiming night subsistence and travel reimbursement in respect of a designated main residence inKent. According to his pattern of travel claims, Viscount Falkland was resident in Kent every weekend duringParliamentary terms over this period. He has assured me in writing that his claims are an accurate record of his stays in this property; and that he also spent part of each Easter and Summer recess in Kent. He neitherowned nor leased the Kent property (which is owned by a relative) but he had sole use of it in the period inquestion and was partly responsible for its furnishing.

In comingto a conclusion on this complaint, I am relying on the assurances which Viscount Falklandhas givenme about the frequency of his stays in Kent as reflected in his travel claims. I should also indicate that whenthe allegation was made that the residence was not a proper main residence, Viscount Falkland, in a statement,accepted that the absence of criteria for what constituted a main residence had enabled him to claim overnightsubsistence for the Kent property, and he accepted that this might be seen as a loop-hole in the system. Thishas caused me some concern. However, for me the key factor in determining this complaint has been thefrequency of stays in the property—every weekend without exception in term time. With this in mind, I havedecided that the complaint should not be upheld.

3. Baroness Goudie —Reply to a Member of the Public

On 29 October 2009 you submitted a complaint to me about the expense claims of Baroness Goudie. I haveinvestigated the complaint and I am now in a position to inform you of my conclusion. In line with our

publication policy, we will make this letter available on the Parliamentary website.

I have made a report of my investigation to the House Committee (a Committee whose responsibilities includesupervision of the system of financial support for Members). I have decided that the complaint should beupheld in part; and the House Committee has agreed that Baroness Goudie should be asked to repay some of the expenses claimed for overnight subsistence. Baroness Goudie has agreed to do so. It is for the Committeefor Privileges and Conduct to consider Baroness Goudie’s conduct; and it will consider the complaint and myfinding early in the new Parliament. The Committee will ultimately produce a report, which I will makeavailable to you.

4. Lord Sheldon —Reply to Chris Galley, Sunlight Centre for Open Politics

On 10 August 2009 you submitted a complaint to me about the expense claims of Lord Sheldon. I haveinvestigated the complaint and I am now in a position to inform you of my conclusion. In line with our

publication policy, we will make this letter available on the Parliamentary website.

I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities includesupervision of the system of financial support for Members) took the decision to refer the current system of financialsupport for Members, who as youwill be aware are unsalaried, for external review by the independentReview Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)—http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lordsdebated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the currentscheme will, therefore, be replaced by a new scheme with clearer definitions and rules.

I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on30 November 2009 and amended on 30 March 2010 and which will take effect from the start of the newParliament, complaints about Members’ expenses will be considered by an independent House of LordsCommissioner for Standards.

My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administeredin accordance with the resolutions of the House on which it is founded, taking account of decisions by theHouse Committee. It is not for me retrospectively to devise rules for the current scheme which have not beenin place to-date.

As with my investigations into other complaints, I have examined Lord Sheldon’s expenses claim forms fromthe date from which the House of Lords’ Administration retains them (April 2006) to April 2009 when hestopped claiming night subsistence and travel reimbursement from a designated main residence in Manchester.

Lord Sheldon designated a property in Manchester as his main residence until April last year—a property heand his wife had owned for many years. He indicated that he is still involved in the family business in theManchester area; is still on the electoral roll there; and still involved in local politics. His immediate familyregularly use the Manchester house as “an extended family home“. In 2003 he transferred the title of the

property to his son, although he has retained a contractual entitlement to dwell there.




In November 2007 Lord Sheldon’s wife suffered a serious illness and he therefore travelled less regularly toManchester until in April 2009 he decided to designate his London flat as his main residence. He indicatedthat until April 2006 he had travelled to Manchester three or four times a month; and thereafter two or threetimes a month until November 2007. In fact, his travel claims for 2007 (for rail travel) suggest that he travelledrather less frequently, and I accordingly asked him to comment on this apparent discrepancy. I also asked himwhether the utility bills relating to the Manchester property, which he had previously indicated had been in hisname, had been paid by him.

On frequency of travel, Lord Sheldon replied that on occasions when he travelled with his son to Manchesterhe did so without claiming the costs from the House. He therefore confirmed the frequency of his stays aspreviously indicated. On payment of utility bills, Lord Sheldon confirmed that they were paid directly by hisbusiness and subsequently charged to his personal account.

The House Committee has endorsed my view that where a property is occupied by a relative other than aspouse of partner there could be specific circumstances in which it could be designated as a main residencedepending on the frequency of stays and the Members’ connection with the property. I am satisfied that LordSheldon’s connections with the property, including some financial responsibility for it, were sufficiently strong.On the frequency of stays, he stayed in Manchester less often after his wife’s illness in November 2007 anduntil he designated his London flat as his main residence in April 2009. However, his travel claim forms andthe subsequent assurances I received about the frequency of his stays indicate a frequency around or abovethe minimum threshold which I have established and which the House Committee has endorsed. With thebenefit of hindsight, it may have been appropriate for Lord Sheldon to have designated his London residence

as his main residence rather earlier than April 2009, but I accept that it was difficult for him to anticipate hisfurther circumstances at the time.

I have accordingly decided that the complaint should not be upheld.

31 March 2010

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LORD PAUL’S CLAIM FORMSLord Paul’s claim forms for the period March 2006 to July 2009 are reproduced at pp29 to 37. Prefaced tothose forms are:

(i) A table showing Lord Paul’s travel patterns between January 2005 and July 2006 (the period forwhich the Oxfordshire property was his main residence). The data from January 2005 to February2006 are from the Finance Department’s residual records; the claim forms for that period have beendestroyed. The data from March 2006 onwards are taken directly from Lord Paul’s claim forms.

(ii) Calendars representing the days on which Lord Paul claimed the mileage allowance for journeys bycar between March 2006 and July 2006. The data are taken directly from Lord Paul’s claim forms.

(i) Table showing the pattern of Lord Paul’s claims for the mileage allowance for journeys

by car between January 2005 and July 2006

Travel every

Amount Number of Number of weekend in term

Month Reimbursed single journeys return journeys time?

January 2005 £78 3 1.5 No

February 2005 £104 4 2 Yes

Oxfordshire: no March 2005 £182 7 3.5 Yesclaim forms April 2005 £52 2 1 No

available; before May 2005 £156 6 3 Yes

period in which June 2005 £208 8 4 Yes

Sub-Committee July 2005 £104 4 2 Yes

can investigate August 2005 — — — —

September 2005 — — — —

October 2005 £130 5 2.5 Yes

November 2005 £182 7 3.5 Yes

December 2005 £182 7 3.5 Yes

Oxfordshire: no claim January 2006 £182 7 3.5 Yes

forms available; within February 2006 £117 4.5 2 Yes (it is

period of investigation unclear how half a journey was

claimed for)

March 2006 £234 9 4.5 Yes

Oxfordshire: April 2006 £52 2 1 No

claim forms May 2006 £156 6 3 Yes

available; within period June 2006 £208 8 4 Yes

of investigation July 2006 £208 8 4 Yes




(ii) Calendars representing the days on which Lord Paul claimed the mileage allowance

for journeys by car

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MARCH 2006

OXFORDSHIRE

APRIL 2006

OXFORDSHIRE

MAY 2006

OXFORDSHIRE

JUNE 2006

OXFORDSHIRE

SEPTEMBER 2006

BUCKINGHAMSHIRE

AUGUST 2006

BUCKINGHAMSHIRE

JULY 2006

OXFORDSHIRE

OCTOBER 2006BUCKINGHAMSHIRE

NOVEMBER 2006BUCKINGHAMSHIRE

DECEMBER 2006BUCKINGHAMSHIRE

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Key:

Days on which the mileage allowance was claimed

Months during which night susistence was claimed

Recess

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MARCH 2007

BUCKINGHAMSHIRE

APRIL 2007

BUCKINGHAMSHIRE

MAY 2007

BUCKINGHAMSHIRE

JUNE 2007

BUCKINGHAMSHIRE

SEPTEMBER 2007

BUCKINGHAMSHIRE

AUGUST 2007

BUCKINGHAMSHIRE

JULY 2007

BUCKINGHAMSHIRE

OCTOBER 2007

BUCKINGHAMSHIRE

NOVEMBER 2007

BUCKINGHAMSHIRE

DECEMBER 2007

BUCKINGHAMSHIRE

JANUARY 2007

BUCKINGHAMSHIRE

FEBRUARY 2007

BUCKINGHAMSHIRE

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31

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BUCKINGHAMSHIRE

APRIL 2008

BUCKINGHAMSHIRE

MAY 2008

BUCKINGHAMSHIRE

JUNE 2008

BUCKINGHAMSHIRE

SEPTEMBER 2008

BUCKINGHAMSHIRE

AUGUST 2008

BUCKINGHAMSHIRE

JULY 2008

BUCKINGHAMSHIRE

OCTOBER 2008

BUCKINGHAMSHIRE

NOVEMBER 2008

BUCKINGHAMSHIRE

DECEMBER 2008

BUCKINGHAMSHIRE

JANUARY 2008

BUCKINGHAMSHIRE

FEBRUARY 2008

BUCKINGHAMSHIRE

1 2 3 4 5 6

8 9 1011 12 13 14 15 16 17

4 5 67 8 9 10 11 12 13

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MARCH 2009

BUCKINGHAMSHIRE

APRIL 2009

BUCKINGHAMSHIRE

MAY 2009

BUCKINGHAMSHIRE

JUNE 2009

BUCKINGHAMSHIRE

JULY 2009

BUCKINGHAMSHIRE

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BUCKINGHAMSHIRE

FEBRUARY 2009

BUCKINGHAMSHIRE

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(iii) Lord Paul’s Claim FormsA

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ARTICLE FROM THE SUNDAY TIMES NEWSPAPER,

11 OCTOBER 2009

GORDON BROWN’S MILLIONAIRE AND £38,000 EXPENSES

A multi-millionaire ally of Gordon Brown pretended that a small flat occupied by one of his employees washis main home so he could claim £38,000 in expenses from the Lords.

Lord Paul, one of Labour’s biggest donors and a friend of the prime minister, has admitted he never even sleptin the flat, despite stating it was his main residence.

The one-bedroom flat was occupied by a manager from one of Paul’s hotels who confirmed last week that thepeer had never lived there while claiming the expenses.

Paul, who has a family fortune of £500 million, was actually based in London, where he has lived for morethan 40 years.

By saying his main home was his manager’s flat in Oxfordshire, he was able to claim cash allowances whichare available only to peers who live outside the capital.

Last week Paul argued that he had been entitled to claim the flat was his home as it was “available” for hisuse. He said he could have moved the manager out for the night if he stayed there, but he never did so. “I don’tsay that I stayed the night—I said that it was available to me”, he said.

Yesterday Angus Robertson, the Scottish National leader in Westminster, said he would write to the police

and the Lords authorities requesting an investigation. “It is outrageous to claim somewhere is your main homeif you have never slept there”, he said.

It comes as more than 100 MPs are to be asked questions about their expenses by an auditor appointed by theCommons. There has been no audit in the Lords despite a series of disclosures in the Sunday Times that haveled to police inquiries into three peers.

Paul, 78, a deputy speaker of the Lords, is a friend of Brown and his wife Sarah. He contributed £45,000 toBrown’s leadership campaign and is reported to have given more than £400,000 to Labour.

The questionable expenses claims were made between 2004 and 2006 when Paul was living in a Londonapartment block where he and his family own property worth £14 million. But he told the lords his main homewas a flat at the three-star Bignell Park hotel, Oxfordshire, owned by his company. This enabled him to claimmore than £20,000 a year.

The flat has for years been the live-in quarters of the hotel’s manager. Prenusha Chetty, the current manager,could not recall Paul ever staying in the flat or the hotel. Her predecessor, Mark Stevens, said he had lived inthe flat for the entire period that Paul was calling it his main home. He said: “I don’t think he ever had a nightat the hotel”.

On Friday Paul said the flat had been his main home because he spent time there while deciding whether tobuy a country home.

He said: “The manager lives there and I always had the opportunity to tell him to go and sleep in the hotel—if I wanted to sleep. Or I slept in the hotel. But I didn’t spend that many nights there”.

When pressed on whether he actually spent a night in his main home, he replied “no”. He added: “It didn’thappen. But I never told you I slept there”.




LETTER OF COMPLAINT

Letter from Mr Angus Robertson MP to Mr Brendan Keith, Registrar of Lords’ Interests,

dated 11 October 2009

Investigation into parliamentary allowances of Lord Paul

You will be aware of recent reports in the media raising serious questions in respect of expense claims madeby Lord Paul of Marylebone, and I am writing to ask you to investigate whether a breach of the rules has beencommitted.

An article in the Sunday Times today (11 October 2009) alleges that, for the purposes of parliamentaryallowances, Lord Paul claimed £38,000 in expenses for a flat in Oxfordshire which he said was his main home—however, according to the Sunday Times, Lord Paul has admitted that he has never slept in the flat which isoccupied by one of his employees. The newspaper goes on to confirm that Lord Paul’s main home is actuallyin London—meaning he is ineligible to receive these allowances. For your reference I attach a copy of thearticle feature in the Sunday Times.

If these facts are correct I know you will share my concerns that such actions would represent a serious misuseof public money.

On consideration, I would ask you to investigate these allegations with a view to establishing whether anoffence has been committed.

I look forward to hearing from you in due course.11 October 2009

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CORRESPONDENCE BETWEEN LORD PAUL, THE HOUSE

AUTHORITIES AND THE CHAIRMAN OF THE SUB-COMMITTEE

Letter from Mr Michael Pownall, Clerk of the Parliaments, to Lord Paul dated 13 October 2009

Members’ Expenses

Following our telephone conversation on Monday 12 October, I can confirm that, at your request, I will

investigate the allegations which have been made against you concerning the Members’ ReimbursementScheme.

I should explain that it is my responsibility, both as Accounting Officer and as Clerk of the Parliaments (as setout in paragraph 1.1.1 of the current Guide to the Members’ Reimbursement Scheme) to ensure that the rulesof the Scheme are properly applied; and my responsibility to investigate complaints about expenses wasrecognised and endorsed by the Committee for Privileges in paragraph 14 of its 4th Report of Session 2007–08.You have yourself referred the allegations to me for investigation and I will conduct the investigation in thesame way as I would investigate a complaint made by a third party.

The substance of the allegations, recently made in the media, is that between 2004 and 2006, you claimed forreimbursement of night subsistence expenses on the basis that your designated main residence outside Londonwas a flat in Oxfordshire, but you did not in practice stay overnight at the flat during the period in question.

I should stress that in the above paragraph I am simply summarising the allegations; and not making anyallegation or criticism of my own. I would, however, be very grateful for your comments on the allegations atthis stage; and any relevant information on how you have determined your main place of residence.

It would be helpful to have any comments in writing but you would be welcome to discuss this matter withme if you wish.

13 October 2009

Letter from Lord Paul to the Clerk of the Parliaments dated 19 October 2009

Members’ Expenses

Thank you very much for your letter of 13 October. Here is my response to the recent allegations in the press.

I have been a member of the House since 1996. I have throughout my time in the House been, and I remain,a regular attender. I have necessarily spent many nights in London.

So far as my main residence is concerned, however, there are three periods to consider. The first period wasfrom 1996 until January 2005. During that period my main residence was in London. This was sonotwithstandingthat since 1979 my company hadowned a hotel andapartments in Torquay at which membersof my family and I did stay.

The second period was from January 2005 until August 2006. That is the period with respect to which theallegation relates, albeit that they erroneously allege a starting time in 2004.

The third period has been since August 2006. My main residence has been The Grange in Beaconsfield.

The second and third periods came out in the following way. My wife and I decided that we would like to finda place in the country in which to live, so that we could spend more time in peaceful surroundings. This

eventually came to fruition with The Grange.However, since July 2001 my company had owned the Bignall Park Hotel in Chesterton near Bicester inOxfordshire. The Hotel had a separate cottage, which the Hotel’s previous owner had occupied.

We planned to enlarge the Hotel and add more rooms. I also thought that we could make it a family residencefor ourselves, subject to getting planning permission for more accommodation.

I found it a very pleasant place. We considered the possibility that, instead of developing the Hotel itself, wewould instead use part of the Hotel as a residence for my family and myself. That would have made it an idealplace, because of all the Hotel amenities.

Indeed that was the route that I sought to go down, not developing the Hotel as such, but rather investingtime and money in creating a country home there. I confidently expected to be living there. It was in thosecircumstances that I registered the address with the House in January 2005. I believed that I was entitled to

claim it as my home.




At the same time, we used Bignall as a base to look at other properties in the area and, on 28 February 2005,found The Grange in Beaconsfield. We started discussions with the owner almost immediately andnegotiations to purchase began soon afterwards.

I expected to live at The Grange quite soon. However, in the event time drifted by. The sale took longer thanexpected. The contract was signed in March 2006. In August 2006 I informed the House of my change of address.

As matters developed I claimed only those allowances to which at the time I believed I was entitled. Now of

course I am able to look back with the benefit of hindsight. I recognise that claiming during the Bignallinterlude has been perceived as having been on the wrong side of the line. I acted on entire good faiththroughout but, nonetheless, in present circumstance I intend to make full and immediate repayment withrespect to that period. I shall of course be happy to assist you further in any way I can.

19 October 2009

Letter from the Clerk of the Parliaments to Lord Paul dated 23 October 2009

I undertook to come back to you about your wish to repay expenses paid to you for overnight subsistence.The Finance Department has now calculated the amount and come up with a total of £39,447. If this isacceptable to you, you will wish to send a cheque to the Department (made out to the House of Lords) forthis sum. If you would like to hand in the cheque to my office, I will ensure it gets to the Finance Department.

23 October 2009

Letter from the Clerk of the Parliaments to Baroness Manningham-Buller, Chairman of the

Sub-Committee on Lords’ Interests, requesting the Sub-Committee’s assistance, dated 5 March 2010

Complaint Relating to Lord Paul

I am writing to request that the Sub-Committee should investigate another complaint which I have receivedconcerning a Member’s expense claims. It may be helpful if I set out the background in full, although Irecognise that the Sub-Committee is already seized of much of it.

On Monday 12 October, following media allegations on 11 October about Lord Paul’s expenses claims, LordPaul referred the allegations to me to investigate as Accounting Officer. Further to this, I received furtherformal complaints relating to Lord Paul from a Member of the House of Commons and from a member of

the public.

I suspended my investigation into the complaint because the Metropolitan Police Service informed me on 12November that they had begun an investigation into the allegations relating to Lord Paul. On 3 March 2010,the Metropolitan Police Service informed me that they had decided not to proceed with the investigation intothe allegations at this time.

As the Sub-Committee will be aware, my investigations into complaints about Members’ expenses are carriedout in accordance with the procedure set out by the Committee for Privileges in its fourth Report of session2007–08. According to the Report, in “exceptional circumstances” I “may request the Sub-Committee to assist[me] in investigating a complex or serious complaint.”

As you know, I have in recent months investigated a significant number of these complaints and allegations;and in one case, I have referred the complaint to the Sub-Committee. As in that case, the allegations relating

to Lord Paul raised the possibility of criminal prosecution and questions have arisen over the availableevidence. This, in my view, places the allegations in the complex and serious category; and I believe the Sub-Committee will be able to investigate them in a way which goes beyond my own role and capability asAccounting Officer.

I would be grateful, therefore, if the Sub-Committee could investigate and determine the facts of the complaintrelating to Lord Paul so as to enable me to submit a report to the House Committee.

As you will know, Members expenses and complaints relating to them do not fall within the Code of Conduct,nor within the remit of the Privileges Committee. This, of course, will change from the new Parliament. Forthe time being, however, the procedure is for me to request the assistance of the Sub-Committee and for theSub-Committee to submit a report to me which I can then refer to the House Committee with its responsibilityfor the supervision of arrangements for the Members’ Reimbursement Scheme. Thereafter, it would be for thePrivileges Committee to recommend any sanction to the House. This is clearly a somewhat complicated

procedure, but as I suggested in referring the first complaint to the Sub-Committee, I see no reason why some

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of the steps should not be speeded up. For example, I for one would not wish to add anything of substance toa report from the Sub-Committee before submitting it to the House Committee.

As before, I will, of course, make available to the Sub-Committee all the relevant material in the possessionof the Administration.

5 March 2010

Letter from Mr Brendan Keith, Registrar of Lords’ Interests, to Lord Paul dated 11 March 2010

Members’ reimbursement scheme

The Clerk of the Parliaments has asked the Sub-Committee on Lords’ Interests to investigate your use of themembers’ reimbursement of expenses scheme. The Sub-Committee has agreed to his request, in the light of the fact that you referred yourself to him for investigation on 12 October 2009, and given the subsequentcomplaints against you by an MP and a member of the public. The procedure for considering complaintsagainst members of the House is set out in a report from the Committee for Privileges and I enclose a copy of that report for your information. The report deals specifically with breaches of the Code of Conduct: your caseis not about the Code of Conduct but I expect that the Sub-Committee will follow a similar procedure in itsinvestigation.

The first step is for me to put to you the allegations and to invite you to provide the Sub-Committee with afull and accurate written account of the matter. On 11 October 2009 the Sunday Times newspaper reported

you as having designated “a flat at the three-star Bignell Park Hotel, Oxfordshire, owned by [your] company”as your main residence between 2004 and 2006, which enabled you to claim night subsistence, but that you“had never lived there while claiming the expenses”. Although the Sub-Committee will take the reportedallegations as the starting point of their investigation, they must consider your use of the scheme in general.

The House holds records about your claims from April 2006 and the Sub-Committee may not investigateconduct more than four years previous to the complaint. A preliminary look at your claim forms shows thatyour main residence from January 20051 until the summer recess of 2006 was The Cottage, Bignell ParkHotel, Chesterton, Oxfordshire; thereafter it was The Grange, Beaconsfield, Buckinghamshire. The forms alsoshow that you claimed reimbursement for travel by car from andto your main residence every weekend in termtime almost without exception.

On 19 October, you wrote to the Clerk of the Parliaments to set out your response to the allegations and said“I recognise that claiming during the Bignall [sic] interlude has been perceived as having been on the wrong

side of the line . . . I intend to make full and immediate repayment with respect to that period.” You invitedthe Finance Department to calculate the appropriate sum for repayment for night subsistence and travelclaims from January 2005 to July 2006; they calculated £41,982 (£39,447 for night subsistence and £2,535 fortravel), which you have repaid.

While I acknowledge that certain money has been repaid by you, I believe nevertheless that the Clerk of theParliaments’ request to the Sub-Committee that they investigate your use of the expenses scheme requires meto invite you to answer a number of questions not limited to the period during which your main residence wasin Oxfordshire. Therefore, may I please invite youto answer the following questions. It would be of the greatestassistance to the Sub-Committee if you could deal with each question in turn, and give a specific answer inrelation to it rather than general answers covering more than one question. This should help the Sub-Committee resolve the matter swiftly.

In relation to your Oxfordshire main residence:

1. What factors led you, on 7 January 2005, to designate The Cottage as your main residence? I enclosethe Minutes of the House Committee meeting on 26 January 2010, which sets out their interpretationof a “main residence“ under the current scheme [ printed at p 16E ].

2. Did you own or lease The Cottage or was it owned or leased by a third party? Did anyone else usethat address while it was designated as your main residence?

3. Where and for what periods did you reside in the Easter, Whitsun and summer recesses of 2005and 2006?

4. Did you travel, as indicated by your claim forms, from and to The Cottage every week in term-timefrom March to August 2006? Did you stay overnight at The Cottage on those weekends? If so, howdo you reconcile this with the statements in the Sunday Times newspaper of 11 October 2009?

1

The House has retained your letter of 7 January 2005 in which you designate The Cottage as your main residence.




5. Your claims for the reimbursement of travel costs are for journeys by car for which vouching is notrequired. Would you be able to provide any readily available evidence that helps to indicate thefrequency of your journeys?

6. What recollection do you have of your pattern of residence at, and travel from and to, The Cottagein the period from January 2005 to March 2006, i.e. the period during which The Cottage was yourmain residence but for which the House no longer holds your claim forms?

In relation to your Buckinghamshire main residence:

7. What factors led you, on 31 July 2006, to designate The Grange as your main residence?

8. Do you own or lease The Grange or is it owned or leased by a third party? Does anyone else usethat address?

9. Where and for what periods did you reside in the Easter, Whitsun and summer recesses of 2007, 2008and 2009?

10. Did you travel, as indicated by your claim forms, from and to The Grange every week in term-timefrom October 2006 to July 2009, with the exception of the weeks of 12 March and 29 October 2007and 8 June 2009? Did you stay overnight at The Grange on those weekends?

11. Would you be able to provide any readily available evidence that helps to indicate the frequency of your journeys?

In relation to your accommodation in London away from your main residence:12. The night subsistence scheme exists to reimburse members for the expense of overnight

accommodation in London away from their main residence for the purpose of attending the House.What arrangements did you make to stay in London away from your main residence for the purposeof attending the House between March 2006 and today? Did you “maintain a residence in London”or did you make other arrangements?

I enclose a copy of the resolution of the House on which the members’ reimbursement scheme is founded anda copy of the General Guide to that scheme [ printed at pp1–2 and pp2–14].

I should be grateful for your response by 26 March. The Sub-Committee intends to begin work on itsinvestigation immediately, but it recognises that Parliament is likely soon to be dissolved and a general electioncalled. At dissolution,all Committees of the two Houses cease to exist until reappointed in the new Parliament.If the Sub-Committee’s investigation is interrupted by dissolution, it will be continued in the new Parliament.

11 March 2010

Letter from Lord Paul to the Registrar of Lords’ Interests dated 26 March 2010

Members’ reimbursement scheme

Thank you for your letter dated 11 March (which I received on 16 March).

This allegation has been addressed by me in a letter to the Clerk of the Parliaments dated 19 October 2009 (afurther copy is attached) and has also been fully investigated by the Metropolitan Police Service (and resolvedin my favour). As you acknowledge, I have also voluntarily repaid in full and at the earliest opportunity, allmonies received for travel and overnight allowances between January 2005 and July 2006. In an effort tospeedily resolve this matter I address your questions below (using your paragraph headings and numbering).It is important to say at the outset that my claims for the period January 2005 to July 2006 (when Bignell ParkHotel was designated as my main residence) were over four years ago and due to the passage of time I haveno recollection of the detail of the claims and very little documentation to assist me in this respect and so Iapologise in advance if my response may appear a little vague in places.

Oxfordshire main residence

1. Firstly and for the avoidance of doubt “The Cottage” is annexed to and is part of Bignell Park Hotel (whichhas been owned by my company since 2001). I came to designate Bignell Park Hotel as my main residence inthe circumstances as set out in detail in my letter dated 19 October 2009 to Michael Pownall.

I would like to add that at the time there was no definition of “main” or “principle” residence and it was myunderstanding (which prevailed in the House from 2004 to 2009) that if one owned a second home outside of London a claim could be made for overnight subsistence in London when the House was sitting and also for

travel to and from the second home. I accept now, that due to the lack of guidance at the time, my

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understanding may have been mistaken hence the reason why, by my own volition, I immediately repaid theamount claimed in full.

2. As referred to above, Bignell Park Hotel is owned by my company. Whilst it was designated as my mainresidence I did allow managers to use The Cottage.

3. Due to the passage of time (four years) I regret to say that I can no longer confirm where I resided in theEaster, Whitsun and summer recesses of 2005 and 2006. I can say however that I rarely stay in the UK duringholiday periods.

4. I have reviewed my claim forms for the period March 2006 to July 2006. Due to the passage of time I cannotnow categorically confirm that I travelled to Bignell Park Hotel on each of those occasions although I cancategorically say that at no time did I make a claim for travel expenses that I did not believe that I was entitledto make. Each and every claim was made in good faith. It is right that I did not stay at the Hotel during thisperiod but I did travel to the Hotel and/or the surrounding area most week-ends in term time. Whilst all myclaims were made in good faith, as stated in my answer at 1. above, I took the view that if it was the case thatI may have misunderstood the Rules in any way, that I should immediately repay all money received by me inrespect of my claims for the period January 2005 to July 2006 and indeed all money has now been repaid.

5. I am unsure what sort of evidence I can provide and again, I regret to say that due to the passage of time,it is doubtful that any such evidence would be available.

6. Again I refer to my letter dated 19 October 2009 and my answer at 4. above.

Buckinghamshire main residence7. Whilst I had decided to develop the Hotel as a country residence, we subsequently found The Grange andcontracts were exchanged in March 2006 and we moved in thereafter. I spend a lot of time at The Grange(almost every weekend) with my wife and my family.

8. The Grange is owned by me. Nobody else uses the address. The estate covers 250 acres and has two cottageswhich are rented out from time to time but which have separate addresses.

9. I did spend some time at The Grange over the Easter, Whitsun and summer recesses between 2007–09. Iam not able to confirm the exact period. For the rest of the time in these periods I would have been abroad.

10. As far as I can recall, I did travel as indicated on my claim forms and stayed overnight.

11. I am unsure what evidence I can provide, for example, I very rarely use public transport now and so donot have travel receipts.

Accommodation in London

12. Whilst in London I reside in my flat which I have owned since 1966.

I hope that this assists and that this matter can be swiftly concluded. I repeat that I have at all times acted inentire good faith in making the claims and voluntarily repaying the amounts in full at the earliest opportunity.

26 March 2010




CORRESPONDENCE WITH THE SUNDAY TIMES NEWSPAPER

Letter from Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Interests, to Mr John

Witherow, Editor of the Sunday Times newspaper, dated 10 March 2010

Sunday Times 11 October 2009—Lord Paul

I am writing on behalf of the Sub-Committee on Lords’ Interests.

The Clerk of the Parliaments, who is responsible as Accounting Officer for the administration of the members’reimbursement scheme in the House of Lords, has asked the Sub-Committee to investigate the conduct of LordPaul alleged in your newspaper’s report of 11 October 2009. Although the matter does not fall within thenormal jurisdiction of the Sub-Committee, the Clerk of the Parliaments has sought the Sub-Committee’sassistance pursuance to the report from the Committee for Privileges on The Code of Conduct: procedure forconsidering complaints against members (4th Report 2007–08, copy enclosed [not printed ]). As you may know,the matter was until recently under investigation by the Metropolitan Police who have now announced thattheir investigation is at an end and that they will be taking no further action. It is therefore only now that theClerk of the Parliaments has been able to make this reference to the Sub-Committee.

The Sub-Committee would be grateful for any assistance that you might be able to give them. I am thereforewriting to ask whether you would send to the Sub-Committee the records on which your report of 11 October2009 was based and any other material relevant to the Sub-Committee’s investigation.

The Sub-Committee intends to begin work on the investigation immediately, but it recognises that Parliamentis likely soon to be dissolved and a general election called. At dissolution, all Committees of the two Housescease to exist until reappointed in the new Parliament. If the Sub-Committee’s investigation is interrupted bydissolution, it will be continued in the new Parliament.

10 March 2010

Letter from Mr Jonathan Calvert and Ms Claire Newell of the Sunday Times newspaper to the Clerk of

the Sub-Committee on Lords’ Interests dated 24 March 2010

We are happy to provide you with the material we collected during our research into Lord Paul’s expenseclaims for night subsistence allowance. I have enclosed all the articles produced by the Sunday Times relatingto this case and one from the Guardian, which carried an interview with Lord Paul the day after our first story.

The articles are self-explanatory but, broadly, the case against Lord Paul is as follows: For 18 months untilthe summer of 2006, Lord Paul claimed £38,000 by saying his main home was in Oxfordshire. We understandthat he actually wrote on his form “Bignell Cottage” in Chesterton, near Bicester. There is no “BignellCottage”. When we spoke to Lord Paul (recordings of two conversations between Jonathan Calvert and LordPaul are enclosed) he said that his main home had been a flat at the back of Bignell Park hotel, a business whichis owned by his company.

The one-bedroom flat he referred to was the permanent home of the hotel’s manager. At that time that LordPaul made the expense claims, the manager was Mark Stevens who no longer works for Lord Paul’s company.He confirmed (Claire Newell’s interview with Mark Stevens is also included) that he, and not Lord Paul, hadlived in the flat and said Lord Paul would occasionally visit the hotel for board meetings, but he couldn’t evenrecall Lord Paul spending a night in the hotel. Indeed, Lord Paul admitted that he had never slept in theproperty but argued that he was entitled to call it his main home because it was always available for his use iehe could turf the manager out of his bed if need be. He made similar comments in an interview with the

Guardian the following day.

We clearly felt this was wrong and the police decided it was a matter worthy of investigation for fraud.However, when a new definition of “main home” was agreed between Michael Pownall, the Clerk of Parliaments, and the House Committee, the police felt their chances of a prosecution had been undermined.Mr Pownall had applied a very loose interpretation of the rules: that a peer only had to “visit” a property oncea month for it to qualify as a main home. By this definition, Lord Paul could just about say he had compliedbecause he did visit for board meetings, and he may also claim he did so on other occasions. However, afterthe case against Lord Paul was shelved, Mr Pownall published a statement saying that he had intended thedefinition to mean at least one over-night stay a month. By his own admission, Lord Paul does not even meetthis benign interpretation of the rules.

We have included ourworking transcripts on the computer disc. Please let me know if we can be of further help.

24 March 2010

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Sunday Times Transcripts

1. Transcript of a covert recording of a telephone conversation between Ms Claire Newell of the Sunday

Times newspaper and Ms Prenusha Chetty, a manager at Bignell Park Hotel, on Friday 2 October 2009

The first part of this conversation wasn’t recorded. According to the Sunday Times, Prenusha Chetty has juststated that Lord Paul doesn’t have a flat in the hotel and the conversation continues as follows:

Ms Newell: Ok, has he ever had a flat there?

Ms Chetty: No.

Ms Newell: Oh ok. Does he stay there sometimes—does he maybe have a suite that’s for him?

Ms Chetty: No.

Ms Newell: Oh ok, well my information must be wrong. Are you the receptionist?

Ms Chetty: Ah yes I’m one of the managers.

Ms Newell: Oh ok, what’s your name?

Ms Chetty: Prenusha.

Ms Newell: Oh ok Prenusha. What’s your surname Prenusha?

Ms Chetty: It’s Chetty.

Ms Newell: How do I spell that?

Ms Chetty: C-H-E-T-T-Y.

Ms Newell: And how do I spell Prenusha?

Ms Chetty: It’s Prenusha.

Ms Newell: Oh Prenusha.

Ms Chetty: P-R-E-N-U-S-H-A,

Ms Newell: Thanks very much, sorry to bother you.

2. Transcript of a covert recording of a second telephone conversation between Ms Claire Newell and Ms

Prenusha Chetty on Friday 2 October 2009

Ms Chetty: Good afternoon, Bignell Park, can I help you?

Ms Newell: Hello is that Prenusha?

Ms Chetty: Yes it is.

Ms Newell: Hi Prenusha, sorry it’s me again. I’m sorry to call you back but I’m just a bit confused, becauseI understood that Lord Paul had a flat in the hotel between 2004 and 2006. Is it just possible that you didn’twork there back then?

Ms Chetty: Probably yeah, I wasn’t here then so I wouldn’t know.

Ms Newell: Oh . . . how long have you been there?

Ms Chetty: Oh for the last couple of years.

Ms Newell: Ah, so you weren’t there in 2006?

Ms Chetty: No.

Ms Newell: Oh, ok, sorry.

Ms Chetty: Did you want me to give him a message, or . . .?

Ms Newell: Oh no it’s ok, I was just a bit confused by something really, but it’s ok, I’ll contact him another way.

Ms Chetty: Ok.

Ms Newell: Thanks, bye.




3. Transcript of a covert recording of a telephone conversation between Ms Claire Newell and Mr Mark

Stevens, the manager at Bignell Park Hotel between 2002 and 2006, on Thursday 7 October 2009

Mr Stevens: The Hideaway, Mark speaking.

Ms Newell: Hello is that Mark Stevens?

Mr Stevens: Yes.

Ms Newell: Hi, my name’s Claire Newell, I’m calling from the Sunday Times in London. A slightly strange call.

I’m looking for the Mark Stephens who used to be the manager at Bignell Park Hotel, and I was wondering if it was you?

Mr Stevens: It is I, yes it is.

Ms Newell: It is you! Oh that’s a piece of luck then I managed to find you [ laughter]. That’s very funny. Whenwere you the manager in the hotel? When did you leave?

Mr Stevens: Um . . . just trying to think now . . . um . . . I left in 2006.

Ms Newell: Oh right, were you there for a long time?

Mr Stevens: I was there for . . . um . . . three or four years.

Ms Newell: Oh ok. That’s really interesting. One thing I was just trying to get to the bottom of, um, is whostayed in the manager’s flat—there’s a flat there isn’t there? And I’m presuming that you stayed there withinthat period?

Mr Stevens: Yes I did, yes.

Ms Newell: Well that’s very interesting. One thing I wanted to ask you, there was a guy called Lord Paul whoowns the hotel now and did do when you were there I think . . .

Mr Stevens: That’s right.

Ms Newell: Did he stay at the hotel very much?

Mr Stevens: Did he stay at the hotel very much? No, no, not once I don’t think.

Ms Newell: He didn’t stay there once when you were manager?

Mr Stevens: No, no. He used to come up for, er, board meetings now and again, but, um, no I don’t think heever st . . . I don’t think he ever had a night at the hotel.

Ms Newell: Really? That’s very interesting because he said that he was staying there for a while. In fact it was

his main home, the hotel. And I was just looking into that. Because it seemed a bit strange to me that you’dsay that your main home was the hotel.

Mr Stevens: It could be prior to my arrival—I really don’t know.

Ms Newell: When did you start working there?

Mr Stevens: Um . . . 2000 . . . 2000 . . . 2002

Mr Newell: So you were there 2002 to 2006?

Mr Stevens: Yeah.

Ms Newell: When did you leave in 2006?

Mr Stevens: Right at the end.

Ms Newell: Oh right at the end, so December time?

Mr Stevens: Yes.

Ms Newell: Ok, well you would know then. That’s very useful. Listen, that’s very kind of you. What are youdoing now? You’re running a bed and breakfast are you, or a hotel in South Africa?

Mr Stevens: Yes.

Ms Newell: I didn’t recognise, um, where it was in South Africa. What area is it in?

Mr Stevens: Um, on the Western cape just outside Cape Town.

Ms Newell: Sound very pleasant. What’s the weather like there now at the moment?

Mr Stevens: It’s [inaudible] . . . baking, so I’m lying outside in the garden.

Ms Newell: Oh are you? [laughter] That’s very nice. It sounds [inaudible] . . . And is business going well?

Mr Stevens: Yeah, no, I can’t complain.

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Ms Newell: Good.

Mr Stevens: Can’t complain. Where did you say you were calling from?

Ms Newell: The Sunday Times, a newspaper in London. I’m doing a piece about, um, well actually we’ve beenlooking at a number of Lords over the past six months who say that their main home is outside of London,and that enables them to claim quite a lot of money—sometimes as much as £30,000 a year. And we noticedthat Lord Paul had said that his main home was in Oxfordshire, and we asked him where it was and he said“oh, it’s, um, in the hotel I own—I stayed in the flat there”. There was no other flat there was there, when you

were there?Mr Stevens: No, not that I’m aware of.

Ms Newell: It’s rather a curious thing to say, so I just wanted to check up. You were the manager there? I’mright in saying that aren’t I?

Mr Stevens: I was yes.

Ms Newell: Yeah ok. Well thank you—I really appreciate your help, I’m sorry to have bothered you. Ok, havea nice time in the garden. Speak to you later. Bye.

Mr Stevens: Bye.

4. Transcript of a covert recording of a second telephone conversation between Ms Claire Newell and Mr

Mark Stevens, the manager at Bignell Park Hotel between 2002 and 2006, on Thursday 7 October 2009

Mr Stevens: Mark Stevens speaking.

Ms Newell: Hello Mark, it’s Claire here from the Sunday Times. We spoke earlier.

Mr Stevens: Hello.

Ms Newell: Hello. When we got off the phone I realised I hadn’t left you my telephone number, and, um, Ithought you might like to take a note of it just so you’ve got it.

Mr Stevens: Yeah, I thought that afterwards.

Ms Newell: Have you got a pen and paper?

Mr Stevens: [Inaudible]

Ms Newell:

Mr Stevens: What’s your surname please?

Ms Newell: Newell. N-E-W-E-L-L.


Ms Newell: What really? My voice does on the telephone?


Ms Newell: Oh really. No, it’s me! I was wondering actually, was there anyone else who worked there at thesame time as you, a chef or did you have a deputy manager or anything?

Mr Stevens: Um . . . [Inaudible]

Ms Newell: Oh, what the deputy manager is now manager there?

Mr Stevens: She is.

Ms Newell: Oh, she was there at the same time as you was she?Mr Stevens: She was, yes.

Ms Newell: Oh ok, that’s useful to know. It seems like quite a small place actually, were there many staff?

Mr Stevens: Um . . . [Inaudible] 10 permanent staff.

Ms Newell: Oh yeah, that is pretty small. Do you know who the chef was at the time?

Mr Stevens: Um, I can’t remember his name if I’m honest.

Ms Newell: Oh don’t worry, it’s ok. Something I wanted to ask you about actually, looking at the time therewere 23 rooms available to rent I think when you were manager there, so I don’t know where Lord Paul wassuggesting he stayed if you were in the manager’s flat for the entire time you were there.

Mr Stevens: I don’t know.

Ms Newell: It’s strange really.




Mr Stevens: I really don’t know [inaudible].

Ms Newell: No, yeah, I spoke to the previous owner as well actually. I gave him a call and he said that therewas only one flat and that, you know, he thought it was a funny thing as well. Also, I just wanted to make youaware as well, sometimes when we write articles about this the police occasionally look into it so there is achance they might contact you in future. But, I’m presuming you’d only say to them what you said to me so—

Mr Stevens: Yeah, of course.

Ms Newell: Yeah, I just wanted to let you know [inaudible]. But you’ve got my telephone number so do give

me a call at any time.

Mr Stevens: Alright.

Ms Newell: If you want to talk about anything. Ok, alright, thanks for your time. Speak to you later.


Ms Newell: Bye.

5. Transcript of a recording of a telephone conversation between Lord Paul and Mr Jonathan Calvert of

the Sunday Times newspaper, on Friday 2 October 2009

Receptionist: Can I speak to Jonathan Calvert please?

Mr Calvert: Speaking.

Receptionist: Hello Jonathan, it’s Jessica here from Lord Paul’s office.

Mr Calvert: Hello Jessica.

Receptionist: He wishes to speak to you if that’s convenient.

Mr Calvert: Yes okay.

Receptionist: I’ll just connect you.

Unidentified voice: Lord Paul’s office. One moment please.

Lord Paul: Hello.

Mr Calvert: Hello Lord Paul.

Lord Paul: I am sorry we have been . . . yesterday I was waiting for your call in and the telephone got busy.

Mr Calvert: It got very, yes, I could tell it was busy I just couldn’t get. Apparently you were abroad somewhere.

Lord Paul: I was in Geneva. You see, I had to present at the IPU on the WTO.

Mr Calvert: Is that part of your work for the Lords?

Lord Paul: Yes that’s right I’m a Lords member of the IPU.

Mr Calvert: Oh, I see. Lord Paul, did your assistant explain to you what it was?

Lord Paul: Yes.

Mr Calvert: I suppose the point that we were getting at was that, you’re obviously somebody who has manyproperties that you own, you and your family own many properties in that block . . .

Lord Paul: I will tell you Jonathan. My family have lived in that block for a long long time. I have bought thehouse because I wanted to stay there and because in the flat I have four children in the block and grandchildrenand I can’t even get together with them because the flat is not a thing for a joint family. I bought the house,

which I am enjoying because I see the children, I see the grandchildren, we are a family of 16 people.Mr Calvert: 60 people?

Lord Paul: 16. Eight grandchildren, four children. Then this thing, the flat, I thought I would give it to mygrandchildren, because they are now coming into work, so I bought this house and then I found it was reallynot practical for me to make it everyday and I mean I am too old for that. It was just too much. So I had tomaintain both the properties for my grandchildren, I had to buy them some new flats. That is why.

Mr Calvert: So you are living in both basically aren’t you?

Lord Paul: I am living in both.

Mr Calvert: And is it the same flat that you have owned since 1966?

Lord Paul: Oh yes.

Mr Calvert: Is it? Right.

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Lord Paul: Right from 1966.

Mr Calvert: And so you never . . . once you came here, at that stage, you never moved out of that at all?

Lord Paul: That’s right. I may not have moved but for the fact that I was that getting together withgrandchildren was impossible in a flat.

Mr Calvert: Yes. Yes I can see that. And so, you still have the flat there, and as I understand it, the way it worksis that your company owns the head lease to all 25 flats.

Lord Paul: That’s right.Mr Calvert: And you sub-let some of them, but not all of them?

Lord Paul: No, when I bought it, the flats used to belong to all the tenants who had bought a long lease.

Mr Calvert: Yes.

Lord Paul: But then when the children started growing up, they bought a flat each. We wanted to be all neareach other. They all have flats. Now the grandchildren have bought into the second thing, because they havegrown up and two of them are working in the family business already. And my idea was that I will give my flatto the children, the grandchildren, but then I found it was not practical for me because it was not possible tocome from there on a daily basis.

Mr Calvert: No.

Lord Paul: So my home for all purposes is Beaconsfield.

Mr Calvert: Right.

Lord Paul: And, I mean, I tried communting, but I am finding it a little bit too old for myself, travelling withthe trains a little bit, so that is what I have been happening, and I do take the work of the Lords very seriously.

Mr Calvert: You attend a lot, don’t you?

Lord Paul: By and large, whenever I am in London I attend every day. And then, as perhaps you know, I ama Deputy Speaker, I sit on three Committees, and on a fourth Committee, on the Finance Bill, which only lastsfor three months a year, I sit on that. And I genuinely believe that you don’t go into the Lords for staying athome or using the title. I don’t introduce myself as LordPaul; I introduce myself as Swraj Paul. So that’s whereI am.

Mr Calvert: And so, your property in Beaconsfield seems to have a lot of houses with it. Are your family livingthere too?

Lord Paul: No, no, there is just one house.

Mr Calvert: Just one house.

Lord Paul: There are some cottages.

Mr Calvert: Oh, I see, they are all cottages, are they?

Lord Paul: No, there are two cottages, which, one of them I have rented; one, unfortunately, I haven’t beenable to find recently a tenant, because of the property market, but it will be rented. It used to be rented. Sothat is the property. Two cottages outside the house.

Mr Calvert: There seemed to be more on the Land Registry than that. There seemed to be about four or five,actually. South Lodge and . . .

Lord Paul: Yes, South Lodge is one, and Bridleway Cottage is the other.

Mr Calvert: Oh, there were some other names as well that came up.Lord Paul: Like what? You are telling me? [laughter]

Mr Calvert: Um, Grange Farm.

Lord Paul: Grange Farm?

Mr Calvert: Mmm.

Lord Paul: There is no Grange Farm. My property has . . . farming is done, which I have contracted to afarmer.

Mr Calvert: Oldfield House.

Lord Paul: No, that’s, not that I know of. If you want to hand me over that property, I will be delighted.

Mr Calvert: No, it is not essential, I was just intrigued, because when you bought it, it was obviously quite an

expensive house and I assumed, when you look at the Land Registry, it seems to be that they are all . . .




Lord Paul: No, no, I bought a house really keeping in mind, and which I am enjoying because all the familycan get to it, we are a very closely knit family, and even in the flats, trying to get children to come and eat withus, it’s just not practical having that many.

Mr Calvert: The point we were making was that obviously you are somebody who has had a home in Londonfor all these years, and yet you are claiming, well since 2006 you have claimed around about £100,000 worthof allowance, which is intended for Peers who live outside the capital.

Lord Paul: Yeah, that’s where I live now.

Mr Calvert: But all I am trying to say is that you don’t need to claim that too, because you already have ahouse, have a home here.

Lord Paul: No, but this is where I had to buy property for my grandchildren.

Mr Calvert: I see. What, in the same block?

Lord Paul: In the same block. As tenants, some of the tenants were leaseholders, because it was all leaseholdersup to 2006. So I have spent a lot of money since then, otherwise I would have given this flat to one of thechildren. That was the idea, which I still will once I stop going to the House of Lords. I will give it to one of the children to have it.

Mr Calvert: Oh, so have the grandchildren now got them?

Lord Paul: Oh yes. I have eight grandchildren between 24 to one and a half years old—six between 18 and 24,and two at one and a half and three, but from the same wife of 53 years. Let me put it this way. This was the

intention, but I just found that I could not do it every day.

Mr Calvert: So what you did was you bought other places from your grandchildren in that block.

Lord Paul: Yes, I am still buying. I still have to buy four more.

Mr Calvert: Four more. Gosh. So as I count it, there are 25 in all in that block, and you—

Lord Paul: I have four children staying.

Mr Calvert: You have four children, but there are also, there seem to be, I’d say, in total there seem to be 10that aren’t sublet to somebody who is not in your family. Some of them are just owned by your company,both sublet.

Lord Paul: No, the er

Mr Calvert: So, Ambika House Properties, or whatever it is called.

Lord Paul: No, the two properties we just bought last year, two flats, which we bought last year, we had to dothem up because they are in a bad condition.

Mr Calvert: Oh, I see.

Lord Paul: And then they will be either leased out or given to grandchildren.

Mr Calvert: Right, I see.

Lord Paul: And we will pay for it, one big house [Inaudible] And each property where we live is owned by us.

Mr Calvert: Right.

Lord Paul: I mean, for example, I am in two flats here, which I combine. They are very small flats, 1,100square feet.

Mr Calvert: Oh, I see, so you have two.

Lord Paul: I combine the two.

Mr Calvert: I couldn’t work out which ones yours were. Which ones . . .?

Lord Paul: 5 and 6.

Mr Calvert: 5 and 6. Oh. I see.

Lord Paul: Which we converted into one flat really, because . . .

Mr Calvert: But according to my . . .

Lord Paul: Go ahead. You are very welcome to come and see me any time.

Mr Calvert: But it says here that Barker Handles Ansalt has the lease on 5 and 6.

Lord Paul: Yeah, that’s right, because I had a nominee company.

Mr Calvert: Oh, is that who they are?

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Lord Paul: But I am the owner.

Mr Calvert: Oh, I see, so that means that you must have 12 which you are not letting out at the moment.

Lord Paul: What do you mean not letting out? Every flat other than these two is sold to individuals. There areno let outs from the company.

Mr Calvert: But the way it works is that Anghad is in penthouse flat.

Lord Paul: Anghad is in penthouse flat.

Mr Calvert: Akash is in Flat No 3.

Lord Paul: Yes.

Mr Calvert: And Akash is in Flat No 4 as well.

Lord Paul: That’s right, he has just bought the 4.

Mr Calvert: You’re in 5 and 6. Anghad is in 9.

Lord Paul: No, Anghad is not in 9. My daughter has just bought it for her son.

Mr Calvert: Oh, right.

Lord Paul: Which is my grandson. No 9. No 16 is my daughter’s daughter.

Mr Calvert: Anjlipour. And 18 is one that you have bought but you haven’t sublet as yet. Ambika House.

Lord Paul: No, 18 is not Ambika House. 18 is this thing, my other son, who lives in 19 and 18.

Mr Calvert: Oh, that’s Ambarpour.

Lord Paul: Ambarpour.

Mr Calvert: I see.

Lord Paul: None of them are let. They are all owned by these individuals now.

Mr Calvert: And then Flat 24, oh this is one that you bought last year, isn’t it?

Lord Paul: Flat 24, and I think 11 and 12. They are very derelict, unfortunately, a lot of work has . . .

Mr Calvert: 11 and 12, yes you’re right, so they’re all the derelict ones.

Lord Paul: Yes, it has to be done and then given to the, either the grandchildren will buy it or this thing is just . . .

Mr Calvert: So between you, you must own, gosh, I don’t know, something like 12 flats in all.

Lord Paul: Yes the family, don’t forget we are 16 in all.

Mr Calvert: Oh yes, 16 family.

Lord Paul: 16-member family.

Mr Calvert: So you own 12 out of the 25.

Lord Paul: I don’t own.

Mr Calvert: But you bought quite a lot of them, didn’t you.

Lord Paul: No, they own. The children. I gave them the money and they own.

Mr Calvert: I see. So they bought it using your money. I see. And is that what happens when you give it to

your grandchildren?

Lord Paul: Yes. What I told grandchildren, that as they finish and start work, I will buy each of them a flat.

Mr Calvert: In the block.

Lord Paul: In the block. So that the whole family remains in the same block.

Mr Calvert: Do you think one day you might have the whole block to your family?

Lord Paul: If the family grows up in my living time, I hope so.

Mr Calvert: You know that there are quite a lot of wealthy people in the Lords and if you look at the 12wealthiest, according to your Rich List, only you and Lord Grantchester claim allowances.

Lord Paul: But how many of them come?

Mr Calvert: Well, they come, but they don’t come as frequently as you.




Lord Paul: No, no, you tell me how many of them come. You know, it’s, if I lived in Beaconsfield and, forexample, if I am not able to come to the Lords, then there is no reason for me to come and so there won’t bea claim.

Mr Calvert: Yeah, no, I see. I am not saying you are not entitled to it, I’m just . . .

Lord Paul: I appreciate what you have to say, but what I am saying is, for someboy to come 10 days in thewhole year is very different from a person who attends every day, because you can’t commute that much atmy age, and a lot of them with whome you perhaps are referring to are much younger people. While I

appreciate what you people are trying to do in the press, you’ve got to look at each individualsMr Calvert: Circumstances.

Lord Paul: Circumstances. I mean, I genuinely thought that I would be able to commute, but I couldn’t do it.

Mr Calvert: But you’re not, I mean presumably you’re not considering whether you might reconsider claimingthis allowance.

Lord Paul: Oh, I don’t think so. There’s no reason for me to stop it.

Mr Calvert: No, that’s fine. I mean, actually the allowance is likely to change anyway because the SeniorSalaries Review Body is looking at it at the moment.

Lord Paul: Look, basically, this used to be the same question from your colleagues on my [??]. I have alwaysmaintained that I don’t make the law; I follow the law. And if there is any revision, I’ll do exactly what therevision is.

Mr Calvert: Yeah, no, that’s a fair point.

Lord Paul: But the person who attends almost every day when he is in Britain, I don’t think, I found it, at myage, not practical to commute from Beaconsfield, in spite of the fact that it is very convenient, because I justcan’t get myself to do the communting train every day.

Mr Calvert: I read somewhere that your son had insisted that you take a chauffeur-driven car everywhere.

Lord Paul: I have a chauffeur a lot of times because I don’t drive myself, but don’t forget sitting in the trafficis not my way of living.

Mr Calvert: I don’t think it’s anyone’s way of living, coming into central London like that. It’s a fair point.

Lord Paul: I would like to stay at Beaconsfield, but unfortunately it hasn’t been practical. As soon as I findthat my age comes where I can’t attend, that’s where I will be.

Mr Calvert: Yes.

Lord Paul: However, it is costing me two places. That is not a pleasant thing.

Mr Calvert: Okay, well, that’s a good explanation.

Lord Paul: No, no, it’s an expensive business. I have to have a housekeeper because my wife and I can’t managewithout in that house. I have to have another housekeeper in the flat, because again I can’t manage without.We are at an age where it’s just not practical.

Mr Calvert: No. Do you think you spend more time in London than you do in Beaconsfield?

Lord Paul: In what way?

Mr Calvert: Just, I mean, presumably in the number of nights you sleep places, I guess.

Lord Paul: I am normally here from Sunday evening to the day after the Lords is not working.

Mr Calvert: Which is Saturday, or is it Friday, depending on which it is.

Lord Paul: No, it is Friday.

Mr Calvert: And then you go back to Beaconsfield for the weekend.

Lord Paul: Yes. No, no, rather I wish that I found it practical to commute every day.

Mr Calvert: But wouldn’t you have had to maintain a home in London anyway because your office is quitenear to your . . .

Lord Paul: But don’t forget, I don’t do that much. I am chairman, but very non-executive. My three sons andnow two grandsons manage it. They run the business; I don’t. I come to this office because it’s a nice office tobe there. So I come in the morning here, then I go to the Lords, but I don’t look after business. I am chairman,but my children said, “But Papa, why do you want us to bring a chairman from outside? Why don’t you staychairman? We won’t vex you.”

Mr Calvert: Incidentally, there is a curious thing I saw on the rich list which suggests that . . .

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Lord Paul: First of all, may I request you one thing?

Mr Calvert: Yeah.

Lord Paul: Don’t believe any rich list.

Mr Calvert: That’s interesting.

Lord Paul: I always tell Philip Beresford, “Philip, you have ruined more people than I know, I think, with RichLists and such”.

Mr Calvert: Well, I was going to ask you about that because I noticed that according to the Rich List you arenow valued at £500 million. And you are a billion down on your position last year, which sounds rather, sortof, the figures are too round, really, aren’t they?

Lord Paul: You pay me £500 million and you’ll be my greatest hero. And you can have everything I have. I’llgive you a discount on that if you want.

Mr Calvert: Oh really?

Lord Paul: No, I think it’s the perception. I wish I had that kind of money. And I have never looked at moneyas something which belongs to me. I look at it as trust money.

Mr Calvert: Right.

Lord Paul: And that is how I look. I live a very ordinary life, never wasting money because I just can’t affordto do that. And that’s my style. That’s why I tell you that God has been very kind to me and that is what my

life is all about. One day you must come and talk to me on this, and you are very welcome, I mean my officeis always open.

Mr Calvert: No, we have always found you very approachable and we do appreciate it.

Lord Paul: I know that all this expenses business has become a big issue, which is very sad, but believe me Ihate living in two places. Since 1966 I have lived in one place.

Mr Calvert: Yes, okay, well that’s all very clear and thank you very much for talking that through with me.

Lord Paul: You’re very welcome. Fine. Thanks a lot.

Mr Calvert: Thank you, Lord Paul. Okay. Bye.

6. Transcript of a covert recording of a telephone conversation between Mr Jonathan Calvert and Lord

Paul on Thursday 8 October 2009

Lord Paul: Hello.

Mr Calvert: Lord Paul?

Lord Paul: Yes.

Mr Calvert: Lord Paul, hello. It’s Jonathan Calvert here from The Sunday Times newspaper. Thank you foryour help last week—I know it’s probably not the article you would have liked us to write but we felt it wasfair comment. Now, there was one other extra thing I wanted to ask you.

Lord Paul: Yes.

Mr Calvert: You know last week you told us that between 2004 and 2006 you were living in a flat in —

Lord Paul: I, I said I was spending a lot of time there just to check, whether I want the country life.

Mr Calvert: Yes Bignell Park Hotel.

Lord Paul: Yeah, that’s right.

Mr Calvert: Yeah. And that’s why that was your main address?

Lord Paul: That was my main address, because I was spending time there. Yup.

Mr Calvert: Yeah. You’ll forgive me, but because we’re so thorough we decided to—

Lord Paul: No no no I know.

Mr Calvert: —check that point and . . .

Lord Paul: Yeah, yeah I know that because you have been trying on that, snooping arts.

Mr Calvert: Right, You are correct, there is a flat there, at the back end of um . . .

Lord Paul: Yeah, that’s right.

Mr Calvert: It’s the one on the ground floor, connected to the building?




Lord Paul: Yeah.

Mr Calvert: The thing we don’t understand is that that’s where the manager lives.

Lord Paul: [Inaudible]. The manager lives there, and I always had the opportunity to tell him to go and sleepin the hotel. If I wanted to sleep. Or I slept in the hotel. But I didn’t spend that many nights there because like Itold you that I was spending time in the Bignell Park in the weekends especially, to see if I liked the country life.

Mr Calvert: Yeah.

Lord Paul: Because I do not want to make a big investment—buying a house, and then, my wife is still gettingused to Beaconsfield. After living 40 years in the West End. You know how difficult it is. So that is what I wassaying—I never told you I lived in the flat all the time. There’s no way I could have lived in that flat.

Mr Calvert: The problem, the problem, we’ve talked to the manager . . .

Lord Paul: Yeah I know that.

Mr Calvert: But the manager who was there at the time.

Lord Paul: Yeah I know that.

Mr Calvert: And he says that you never stayed a night there.

Lord Paul: Yeah I don’t say that I stayed the night—I said that it was available to me.

Mr Calvert: Oh I see. So you didn’t actually stay a night in the flat?

Lord Paul: No.Mr Calvert: Oh I see.

Lord Paul: All I knew was that I had the er, the er, if I wanted to sleep there he could go to the hotel room.

Mr Calvert: Yeah.

Lord Paul: He was a bachelor anyway.

Mr Calvert: Yes, but I mean, that didn’t actually happen.

Lord Paul: Yeah. It didn’t happen. But I never told you that I slept there.

Mr Calvert: No, oh I see. So, so—

Lord Paul: And don’t forget my allowances are paid on the basis of when I am in London not on the basis of when I am there.

Mr Calvert: No but, it seems to us quite an odd state of affairs that your main address could be somewherewhere you have actually never slept a night.

Lord Paul: Jonathan, I really don’t know why you are wasting my time and your time. Because you can writewhat you want to write. As far as I’m concerned, there is nothing wrong which has been done. And this thing,about the allowance, about all these figures—I know what my position. If you want to write, please go ahead.I, we, you people might have an agenda, I don’t.

Mr Calvert: No we don’t, we do have an agenda in so far as quite a lot of people in the House of Lords havetreated this er allowances as an entitlement when they shouldn’t really have been claiming it. It’s very hard forus to see the . . .

Lord Paul: No, no.

Mr Calvert: … main address could be somewhere which notionally you might stay in one day if you wish to—

Lord Paul: If I keep the place available to me, that is what I was talking. It makes no difference. Even todayif every very night I don’t sleep at Grange, that doesn’t mean I am not entitled to it. That is my interpretationof the rules. And I am entitled to get a night allowance when I stay in London.

Mr Calvert: Hmmm.

Lord Paul: Not whether I stay in Timbuktu. All I am saying is—

Mr Calvert: Yes but it’s all based on the fact that you’re, that’s because you live as your main address outsideLondon.

Lord Paul: That place was available to me whenever I want it to and—

Mr Calvert: But you didn’t live there.

Lord Paul: It makes no difference. I don’t live there even in Grange every day. And look—

Mr Calvert: Sorry, sorry, can I just explain. You never lived at Bignell Park Hotel.

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Lord Paul: I lived at Bignell Park Hotel whenever I wanted to.

Mr Calvert: But as you say it never happened because you never slept there.

Lord Paul: That’s not your business whether I slept there or in Timbuktu.

Mr Calvert: But, but, the manager say, he recalls you coming for the occasional meeting—

Lord Paul: Who the hell is manager to tell you what I am doing—and a manager who lived in there and wenta long time ago?

Mr Calvert: No but he was the manager at the time.Lord Paul: I couldn’t care less. The manager is not going to satisfy my bloody living.

Mr Calvert: He would remember if you’d said to him—

Lord Paul: No listen, you can write what you want to write. Please don’t waste your time and my time.

Mr Calvert: Ok.

Lord Paul: You are absolutely at liberty to write what you want. You have an agenda. You go ahead with it.And you can quote me on that.

[phone hangs up]

Mr Calvert: Alright, well thank you for talking to me.




CORRESPONDENCE WITH THE METROPOLITAN POLICE SERVICE

Letter from Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Interests, to Sir Paul

Stephenson, Commissioner of the Police of the Metropolis, dated 19 March 2010

Lord Paul: House of Lords members’ reimbursement scheme: evidence

The Clerk of the Parliaments, who is responsible as Accounting Officer for the administration of the members’

reimbursement scheme in the House of Lords, has asked the Sub-Committee on Lords’ Interests to investigateLord Paul’s use of the members’ reimbursement scheme in the light of the Sunday Times newspaper’s reportabout him of 11 October 2009 and subsequent complaints. Although the matter does not fall within the normal jurisdiction of the Sub-Committee, the Clerk of the Parliaments has sought the Sub-Committee’s assistancepursuant to the report from the Committee for Privileges on The Code of Conduct: procedure for consideringcomplaints against members (4th Report 2007–08, enclosed [not printed ]). It is only now that the Clerk of theParliaments has been able to make this reference to the Sub-Committee because the policy of the House is tosuspend parliamentary investigations while the same matter is under investigation by the police. Your officersrecently announced that the police will be taking no further action in this case.

The Sub-Committee on Lords’ Interests is a Select Committee of the House of Lords with the power to sendfor persons, papers and records. Its Chairman is Baroness Manningham-Buller. The Sub-Committee hasdirected me to invite the Metropolitan Police to send to the Sub-Committee the material which the policegathered about this case during its investigation for the Sub-Committee to consider in its own investigation.

The only question before the Sub-Committee is whether Lord Paul made legitimate use of the members’reimbursement scheme.

It would be helpful to receive your reply by 30 March. The Sub-Committee has already begun its work on thiscase, but recognises that Parliament is likely soon to be dissolved and a general election called. At dissolution,all Committees of the two Houses cease to exist until reappointed in the new Parliament. If the Sub-Committee’s investigation is interrupted by dissolution, it will be continued in the new Parliament.

19 March 2010

Letter from Detective Chief Superintendent Nigel Mawer, Economic and Specialist Crime Unit,

Metropolitan Police Service, to the Clerk of the Sub-Committee on Lords’ Interests, dated 27 May 2010

I write further to my letter dated 26 March 2010 and in response to your formal request for investigation

material relating to Lord Paul contained in your letter to the Commissioner of 19 March 2010.Having carefully considered the requests from the House Sub Committee of Lords’ Interests I am now in aposition to provide you with most of the material.

I know that you are aware that I wrote to Lord Paul inviting him to make any representations in relation tothe committee’s request. Furthermore my officers have sought to contact all of the witnesses that providedstatements to police in the course of our investigation.

The MPS has always sought to assist the House Committee. The process of disclosure has required carefulconsideration of the legal basis by which this material can or should be supplied. The starting point that acriminal investigation is confidential has been something that has underpinned our decision making but,having sought representations from the interested parties our decision is that disclosure of the material to theSub Committee is in the wider public interest.

I can inform you that it is our intention to provide you with the majority of statements. Whilst the statementswill show the names of the witness, no further details, such as their address or date of birth, will be suppliedat this stage. Should you wish to make contact with the witnesses directly I will ensure that further requestsare made of them on your behalf.

Two witness statements will not be supplied at this stage: one from a witness who has asked that their statementis not provided and one from a witness who has yet to be contacted.

In the first case it is our intention to provide you with a summary of the statement whilst respecting the wishesof the witness to remain anonymous. In the second case it is believed that the witness has been abroad but hasvery recently returned to the UK. Our intention is to allow a short period of time and seek any representationsthat this witness may make upon contact.

If I can be of any further assistance please do not hesitate to contact me.

27 May 2010

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Witness Statements taken by the Metropolitan Police Service

All of the statements taken by the Metropolitan Police Service were signed and dated by the witnesses under the following rubric—

This statement (consisting of:… pages each signed by me) is true to the best of my knowledge and belief and I make it knowing that, if it is tendered in evidence, I shall be liable to prosecution if I have wilfully stated anything in it which I know to be false, or do not believe to be true.

Witness statement of Ms Maureen Buck, Member Services Manager, House of Lords Finance

Department, dated 20 October 2009

I am currently employed by the House of Lords Finance Department as the Member Services Manager withinthe Members’ Expenses Section and I have held this position since 2006. Prior to promotion, I was theMembers’ Expenses Supervisor between 2005 and 2006, and before this a Members’ Expenses Clerk from 2003until 2004. The Members’ Expenses Section is responsible for administering the claims made by Peers underthe House of Lords Members’ Reimbursment Scheme.

My immediate supervisor is Richard GEE who is the Deputy Head of Finance, who in turn works under theHead of Finance Jonathan SMITH.

I am responsible for Clare HOOK, the Members’ Expenses Supervisor and two Members’ Expenses Clerks,Patricia YOUNG and Sally NICHOLAS. This represents the normal staffing compliment for the Members’

Expenses Section, although staff members have changed over the years. I refer to a flowchart showing thecurrent staff within the Finance Department as MAB/1. The following people: Christine DALE, MargoHOPKINS, Mark SEALEY, and Shanaaz ALI were all previously employed as clerks and have either retired,moved departments or changed employment.

The Members’ Expenses Section processes on average approximately 600 claim forms per month. The volumeis greatest towards the beginning of the month and towards the end of a parliamentary session. We aim toprocess a claim form within seven days from the date it is received to the date of payment. We receive andvalidate the claims before releasing payment instruction to the Payments Section on a bi-weekly basis.

I will describe the process by which claims progress through the Members’ Expenses Section. Claim forms haveto be received in a signed hard copy format and arrive at our offices at 14 Tothill Street, SW1 by external postor internal post from the Central Post Depot at the Palace. Sometimes Peers choose to deliver claim formspersonally at our address.

Together with the supervisor, we will deal personally with any correspondence that accompanies the claimforms. More often than not this would be a request for advice or seeking clarification on some aspect.Although I frequently make a written note as an aid memoire of dealings with peers on the telephone aboutmatters which I believe might have future relevance, I do this from personal choice rather than as a result of any policy that is in place. It is done on an ad hoc basis and I will destroy these notes when they cease to haveany value.

The claim forms go immediately to Clare HOOK, the Members Expenses Supervisor. She will performtechnical checks ensuring the claim form is original and not a photocopy, and that the period for claims fallswithin the last three months. If it is outside the time frame, Clare will write to the peer asking them to give awritten explanation for the delay to the Clerk of The Parliaments who will then consider authorising payment.Clare will also ensure the name and address have been completed and if these have been mistakenly omitted;we can often identify the peer from handwriting or using the travel database. The form clearly says that the

address to be written by the peer is the “Main Place of Residence”. We take it on face value that the addressentered is the peer’s main place of residence.

The claim forms are then passed to the clerks who will sort them into alphabetical order before confirming thedates for which claims are made coincide with dates recorded on the Attendance Database. This databasewhich is maintained by the Journal and Information Office, records dates when peers attend a sitting in theChamber of The House, attend a Select Committee meeting, vote in a Division or attend a Grand Committeein the Moses room. The clerk will tick to confirm each date claimed on the form and add up the total numberof days attended. If a claim has been made for a date when the peer does not appear on the AttendanceDatabase, a letter is sent asking for the peer to confirm their attendance. The claim form will not be processedfurther until the matter has been resolved. If the peer confirms his attendance, this has been accepted on facevalue and the Clerk will send an email to the Journal and Information Office asking for the records to beamended. However since July 2009 the situation has changed and a peer may only “self certificate” his

attendance in this way on one occasion within each Parliamentary session. If it happens again they are required




to submit an explanation to Philippa TUDOR, the Finance Director who in turn will refer the matter toMichael POWNALL, the Clerk of the Parliaments if necessary.

The clerks will then do calculations in relation to the categories of claim. Any travel claims will be referencedagainst the Travel Database. This computer system which is linked to the accounting system shows an accountnumber for each peer and where they make car mileage claims, the declared journey between their mainresidence and the Palace. If they travel by train; it will show the railway station used and the car mileage fromtheir main residence to the railway station. The Travel Database does not contain the address of the mainhome. (However, a computer accounting system called “AGRESSO” does have the main address whenprovided. TheAGRESSO system was introduced in 2006 and replaced the SUN system). The journeys claimedwill be scrutinsed to ensure they fit in with the travel information held. If there is any uncertainty over themileage of a journey, we will resolve it using the AA route map on their web site.

At this stage I should point out that no formal check is made to confirm the main place of residence recordedon the claim form is the same as on previous claim forms. This would only come to light if (A) a mileage travelclaim on the recent submission between main residence andthe House of Lords was significantly different fromthe distance held on the travel database for the same journey from the former main residence, or (B) if themode of transport changed from that shown on the travel database ie costs for air travel being claimed whenno record existed. It is possible that if the new main residence was a similar distance to the House of Lordsthis change would not be picked up.

The clerk will then check to make sure that any claims for air, rail or boat travel are corroborated with receiptswhere necessary. From April 2007 any single fare in excess of £50 or return fare in excess of £100 had to be

receipted if the Members Travel Credit Card was not used. From December 2008 these figures were reducedto £25 and £50 respectively. If a claim is not supported by a correctly dated receipt as required that portion of the claim will not be paid. The clerk will complete the travel claim totals at the bottom of the columns on theform less any disputed amount.

Some members choose to purchase rail, air, coach or boat tickets using a corporate Barclaycard. In such cases,they will make all of their claims including travel, night subsistence, day subsistence and office costs on adifferent form—“AETC” which has a very similar format. They are required to show details of journeys wheretickets have been purchased using this facility, but not to claim a monetary value, and once the clerk hascompleted the checks described below in relation to the other types of claim, a copy of this claim form will bepassed to Neil JACKSON, Operations Manager who will reconcile the information concerning travel with thecorporate card statement, and raise queries with the Member if necessary.

The clerk will consider claims for Night Subsistence in relation to the attendance database ensuring that it is

claimed on nights preceding or following a sitting and in relation to the stated travelling dates. The main homeaddress recorded on the “AGRESSO” computer system and on the claim form will be checked to confirm itis outside Greater London and therefore the peer is eligible to claim the allowance. The scheme allows thoseMembers whose main residence is outside Greater London to claim for expenses of overnight accommodationin London while away from their only or main residence within a specified daily limit. A Member whose mainresidence is outside Greater London and who maintains a residence in London for the purpose of attendingsittings of the House may claim the Night Subsistence within the specified daily limit. Claims for the NightSubsistence are only permissible in respect of nights spent in London either immediately preceding orfollowing attendance at a sitting or meeting described earlier. For example, a Member who travels to Londonon a Sunday and attends sittings of the House on Monday, Tuesday, Wednesday and Thursday and thenreturns home on Friday or later may claim the Night Subsistence for a maximum of five nights up to the limitof the specified daily limit. However, if the Member returned home on the Thursday evening the maximumclaim for Night Subsistence would be four nights up to the limit of the specified daily limit. Members who

choose to travelhome each night cannot claim the Night Subsistence. Where the clerk declines a claim for nightsubsistence, because the stated travel dates indicate that the Member travelled home that night, they will adda note to this effect to the payment remittance advice sent to the peer.

Where a member claims night subsistence and travel expenses, but does not state the travel dates, the wholeclaim will be declined and returned to the member for the travel dates to be inserted. However, there are a veryfew Members who do not claim travel expenses to or from their mainplace of residence on a weekly or monthlybasis and in these cases night subsistence can be reimbursed for the nights claimed before and after a sitting.

The AGRESSO computer system records a Members’ declared main home into one of three categories. Firstly,those members whose main home is within five miles of The Palace of Westminster, which precludes them frommaking separate claims for travel costs or night subsistence. Secondly, those whose main home is greater thanfive miles from The Palace of Westminster yet within Greater London who are therefore ineligible to claimnight subsistence, but may claim travel costs. Thirdly, those whose main home is outside Greater London and

who may therefore claim both night subsistence and travel costs. This acts as a safeguard when validated

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claims are subsequently loaded onto the computer system. For example, if a claim is inadvertently acceptedby a clerk for night subsistence, and the member’s main home is placed within a category on AGRESSO whichprecludes claims for night subsistence, the system will then refuse to accept the claim. In the case of a new peer,who has yet to supply the Members Expenses Section with details of their main residence, they willautomatically be placed into the category of having a main home within five miles of The Palace of Westminster and as a consequence the system will refuse any claims for travel and night subsistence. This isdone to prevent a new peer from inadvertently making incorrect claims through a lack of understanding of the Members’ Expenses Scheme, in circumstances where we do not have the necessary information to validate

the claims.

The clerk will check that the night subsistence does not exceed the maximum daily rate before adding up thetotals at the foot of the columns.

Any day subsistence claims will be reconciled against days attended at the House and again checked to ensurethey are within the daily maximum limit. The columns will then be totalled.

Any Office Costs claims will be reconciled against days attended at the House and again checked to ensurethey are within the daily maximum limit. The columns will then be totalled.

Additional Office Costs may also be claimed in respect of up to 40 days at the same rate of the Office Costslimit from 1 August to 31 July when the House is not sitting, or the House is sitting but a Member does notattend. Forms for Additional Office Costs may be submitted at any time during the relevant year and may beclaimed in increments or in one sum provided that 40 non sitting days have elapsed since 1 August. The clerk

will check with AGRESSO to confirm the member’s running total has not exceeded the maximum figure.In rare circumstances, Members are allowed to make claims for additional assistance because of disability. Thismight reflect a need for specialised equipment or the need to travel by taxi. Such allowance is agreed in advanceby the Clerk of the Parliaments and details of agreed amounts are included on the travel database. Again theclerk will ensure claims made do not exceed the agreed limit.

On the claim form there is a box marked “End date of this Claim”. This refers to the last date on the form forwhich a claim has been made. When the claims are ultimately loaded onto the AGRESSO system, thecomputer will bring up a duplicate-claim report if dates for current claims have previously been processed.

Having totalled the columns, the clerk will initial the box marked “Checked”. If the clerk is new andinexperienced another clerk will double check the process and initial another box marked “Counter-Checked”.New staff are always trained by the supervisor who is currently Clare HOOK.

At this point, the Clerks will input the claims onto the AGRESSO system and a print out will be producedwhich lists the total claim payment for each peer. Some peer titles are sufficiently similar for input errors tobe made awarding payment to the wrong peer. The two clerks now swap their claim forms and will check thatthe correct peer is receiving the correct payment as listed on the print out.

At this point at least 10% of the claim forms will be checked in all aspects by either the Supervisor or myself for accuracy by the clerks andthe boxmarked “EO Spot-Check” will be initialled signifying this has happened.

The Supervisor then “posts” the claims on the AGRESSO system to the Payments Section who will then effectpayment usually by BACS. The Payment Section will receive reports and paper work from the Supervisorauthorising them to effect payments to the Members.

If in the course of doing the above checks, a clerk discovers a claim has been incorrectly made under the rules,they will add a note to the payment remittance advising that this sum has been deleted from the claim and willnot be paid. This will be an end to the matter unless the peer was to raise the issue and show that the claim

was in fact within the rules. Such a matter would normally be referred to the Supervisor or me. The staff withinmy section are clearly instructed in their training not to accept any claims that do not fully comply with therules of the Members’ Reimbursement Scheme. Any such queries would be discussed, in the first instance withthe Supervisor for further guidance. There has never been a situation where a claim identified as beingincorrect has been suspected to be deliberately false or misleading. There is no written policy in place on howsuch a situation would be dealt with. The clerks would bring such a matter to the attention of their Supervisorwho in turn would bring it to my attention. I would immediately inform Richard GEE and I imagine he wouldpass it to Jonathan SMITH who would discuss the matter with Michael POWNALL the Clerk of theParliaments. I can say that the clerks would not validate any claim where there was reason to believe it wasfalse. I have never been aware of any circumstances where peers have made false claims. There has been variousrumours in the past that some peers might not have made legitimate claims under the MembersReimbursement Scheme, but not anything of substance which would support the fact false claims had actuallybeen made. I can only say that neither I nor my staff would entertain authorising a claim which was suspected

to be false.




The claim forms are individually paginated by the clerks and stored in running order. Consequently a peer’sclaim forms will be dispersed throughout the filing system. The forms are kept for a period of three years inaddition to the current financial year before destruction. The paginated reference number is recorded on theAGRESSO system.

All correspondence between the Members Expenses Section and a peer is stored in a file and retained for anindefinite period. Some may be kept with the claim.

I have alluded earlier to the fact the checking clerks are always trained by the supervisor.

Although there is no formal training manual, staff constantly refer to the Members’ Reimbursement SchemeGuide as their main source of written guidance. This is supported by additional guidance and procedural noteswhich are updated as and when necessary.

Written statement of Mr Jonathan Smith, Head of Finance, House of Lords Finance Department,

dated 19 January 2010

On 27 November 2009 I handed to acting DI Gibb, correspondence to or from the Finance Department insupport of night subsistence, including claim forms retained by the finance department in relation to Lord Paulof Marylebone. The claim forms go back as far as April 2006, which was the process date and other documentsrelate to 2004 and later. I refer to these documents as JPS/12.

On Friday 15 January 2010 I handed further documents to DC De St Denis, which I refer to as JPS/13. Thesecomprised, claim forms and correspondence relating to travel costs and day subsistence and office secretarialcosts not previously requested in relation to the same peer. The claim forms go back to May 2006 and otherdocuments go back to 2004.

[Exhibits JPS/12 and JPS/13 not printed.]

Witness statement of Detective Constable Kirsty de St-Denis dated 2 February 2010

This statement refers to the splitting of exhibits from the standing file for Lord Paul of Marylebone (exhibitsJPS/12 and JPS/13).

Between 27 November 2009 and 2 February 2010 the following exhibits were split from JPS/12 and JPS/13and given there own exhibit numbers as follows:

Exhibit JPS/12/1—Copy of a letter from Lord Paul advising of his place of residence.

Exhibit JPS/12/2—Copy of a letter from Lord Paul advising of his address details from 1 August 2006.

Exhibit JPS/12/3—Copy of reimbursement summary for the year 1 April 2004 to 31 March 2005.

Exhibit JPS/12/4—Copy of reimbursement summary for the year 1 April 2005 to 31 March 2006.

Exhibit JPS/12/5—Copy of Claim for Repayment of Travelling and Other Expenses for March 2006.

Exhibit JPS/12/6—Copy of Claim for Repayment of Travelling and Other Expenses for April 2006.

Exhibit JPS/12/7—Copy of Claim for Repayment of Travelling and Other Expenses for May 2006.

Exhibit JPS/12/8—Copy of Claim for Repayment of Travelling and Other Expenses for June 2006.

Exhibit JPS/12/9—Copy of Claim for Repayment of Travelling and Other Expenses for July 2006.

Exhibit JPS/12/10—Copy of Peers’ claim for Travelling, Subsistence and Incidental Expenses for CommitteeVisits dated 9 May 2006.

Exhibit JPS/12/11—Copies of receipts issued by Swiss Cottage Car Service and Executive Carriage.

Exhibit JPS/13/1—Copy of Peers’ claim for Travelling, Subsistence and Incidental Expenses for CommitteeVisits dated 5 June 2006.

Exhibit JPS/13/2—Copy of Committee Visits Claim for Reimbursement of Office and OvernightAccommodation Costs dated 9 May 2006.

These exhibits were then given to DC Cummings the exhibits officer.

[Exhibits not printed.]

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Witness statement of Detective Constable Kirsty de St-Denis dated 12 February 2010

This statement refers to the opening of exhibits from the standing file for Lord Paul of Marylebone (exhibitsJPS/12 and JPS/13).

On Thursday 21 January 2010 I attended the House of Lords Member’s Expenses Section at 14 Tothill Street,London in order to obtain a statement from Maureen BUCK the Member Services Manager. I took exhibitsJPS/12 and JPS/13 with me in order for her to be able to comment on individual documents within the exhibits.

JPS/12 was sealed in Police Exhibit Bag seal number MPSD40998285. I opened this bag in order to be able toshow the contents to Maureen BUCK. Upon completion of the statement I resealed the bag and its contentsin another bag serial number MPSD40715093.

JPS/13 was sealed in Police Exhibit Bag seal number MPSD40998284. I opened this bag in order to be able toshow the contents to Maureen BUCK. Upon completion of the statement I resealed the bag and its contentsin another bag serial number MPSD40715092.

These exhibits were then handed to the exhibits officer DC CUMMINGS.

On Thursday 4 February 2010 I attended the Member’s Expenses Section again to obtain statements fromShanaaz ALI and Christine DALE in relation to documents they had signed within JPS/12.

After opening exhibit JPS/12 I resealed it using signature seals which I signed and dated. Christine DALE andShanaaz ALI also signed the exhibit bag as witnesses.

This exhibit was then given to A/DS NOAKES who returned it to the exhibits officer DC CUMMINGS.

Witness statement of Ms Maureen Buck, Member Services Manager, House of Lords Finance

Department, dated 2 February 2010

Further to my earlier statement where I described the procedure adopted by the Members’ Expenses Sectionin processing the claims made by peers under the Members’ Reimbursement Scheme; I have been asked toreview claim forms in relation to Lord PAUL of MARYLEBONE which have been supplied to police.

The claim forms relating to Lord PAUL of MARYLEBONE are part of exhibits JPS/12 and JPS/13.

The claim form for March 2006 has my initials as checking it. No one counter checked the forms or did EOspot checks.

The April and May 2006 claim forms have Shanaaz ALI’s initials as the checking clerk and my initials as theclerk who counter checked or spot checked them. On the May 2006 form a travel expense on 6 May isdisallowed as Lord PAUL had already claimed for the travel on 5 May under his Committee Visit claim form.I will go into this further, later on in my statement.

The June 2006 claim form has Shanaaz ALI’s initials as the checking clerk, Christine DALE’s initials as theclerk who counter checked it and my initials as the EO spot checking it.

The July 2006 claim form has Shanaaz ALI’s initials as the checking clerk and Christine DALE’s initials asthe clerk who counter checked it. No one has signed as spot checking it.

Also within the collection of forms supplied to the police are Peers’ Claim Forms for Travelling, Subsistenceand Incidental Expenses used in connection with Committee/Sub-Committee visits.

The form dated 09.05.06, signed by Lord PAUL and stamped with the number 0061282 shows the initials of

Shanaaz ALI checking it and it is stamped as received by us on 25 May 2006.

The form dated 05.06.06 and signed by Lord PAUL shows the initials of Shanaaz ALI and a comment that ithas been agreed by Meg HAWKINS in the Committee Office.

The form dated 26.06.06 and signed by Lord PAUL does not show anyone’s initials as checking it and it isstamped as received by us on 18 July 2006.

The form dated 05.07.06 and signed by Lord PAUL does not show anyone’s initials as checking it.

The reverse of these forms is entitled House of Lords Invoice Authorisation Form A. This is signed andauthorised by someone in the committee office before it reaches us. We then make the payment if it has beenauthorised, but the money comes out of the Committee Office Budget which is separate.

Also within the collection of forms supplied to the police are forms which are entitled Committee Visits Claim

for Reimbursement of Office and Overnight Accommodation Costs. This is Form ME6.




The form signed and dated by Lord PAUL on 09/05/06 and stamped 0061148 shows the initials of ShanaazALI as checking and my signature as authorising. I made amendments to this claim as it was incorrect. LordPAUL tried to claim for night subsistence but was incorrect in his claim. I will explain this later. This was fora trip to Italy.

The form signed by Lord PAUL for a meeting in York on 23 June 2006 was not dated. It shows the initials of Shanaaz ALI as checking but no signature as authorising. Amendments were made to this claim as it wasincorrect. Lord Paul tried to claim for night subsistence but was incorrect in his claim.

The form signed by Lord PAUL for a meeting in Reading on 30 June is dated 11/07/06. It shows the initialsof Shanaaz ALI as checking but no signature as authorising. Amendments were made to this claim as it wasincorrect. Lord PAUL tried to claim for night subsistence but was incorrect in his claim.

The forms and rules for Select Committee visits are slightly more complicated than the usual claim forms. Onthe form ME6, members can claim Office Costs, Accommodation Maintenance Allowance for Second Home(AMA) and Night Subsistence.

As far as attendance goes, being at a committee meeting in the Palace of Westminster is as good as being inthe Chamber. TheClerk of the relevant committee produces an attendance list in the same way as it is producedfor attendance in the Chamber.

If a committee meeting takes place outside of the Palace of Westminster, whether in the UK or abroad, this isnot classed as an attendance so is not recorded as such. Therefore if a member does not attend the Chamberor a committee meeting within the Palace, no attendance is recorded and they cannot claim expenses under

the usual reimbursement scheme.

Accommodation Maintenance Allowance (AMA) can only be claimed for the night of the Meeting. If themember is put up in a hotel this is paid by the committee office. The member can then also claim AMA forthe second home that they maintain in London for the purpose of attending the House. They receive two thirdsof the amount they would usually receive for night subsistence. This is only available if a second home inLondon is maintained. The computer system would not allow a payment to go through if there was no secondhome registered, even if it was overlooked by a clerk.

If a member stays overnight in London before the day of travel in order to make the travel connection thefollowing day they can claim the full amount, ie three thirds, in the same way that they can claim for stayingin London overnight the night before attending the House. If this is the case they fill out the shaded area onthe form ME6 entitled Night Subsistence. This section is then also signed and authorised by the Clerk of theCommittee. The same also applies for the night that they return to London if it is too late for them to return

to their main residence and they have to stay in London. If they are staying in London purely to attend theHouse the following day then this would be claimed under the usual Reimbursement Scheme.

Going back to the ME6 form submitted on 9 May 2006 by Lord Paul for his trip to Italy, and theReimbursement Scheme claim for May 2006 I will now explain why certain claims were disallowed.

Lord Paul states at the top of the form that he left home/London on 2 May 2006 and the meeting was on 2–5May. He then returned to London/home on 5 May.

Therefore under AMA he is only entitled to claim for the nights of the Meeting ie 2nd, 3rd and 4th. He cannotclaim for the 5th under this heading as he has already returned to London/home. The AMA at this time was£103 per night so he was entitled to £309.

Under Committee Visit Night Subsistence he is entitled to claim for staying in London the night before hetravelled in order to make the connection ie the night of 1 May. He is not entitled to claim for 5 May unlesshe can show that it was too late to return home, which it could not have been because he went on to claim formileage from London to Home. Also the 5th May 2006 was a Friday so he would not have to attend the Housethe following day as they do not sit on a Saturday. He is therefore entitled to claim £154.50 for that one night of 1 May. Added together with his Committee Visit office costs claim of £268.00 he received £731.50 for that visit.

Lord PAUL claimed for 65 miles from London to Home (Oxford) on 5 May 2006 under his Committee Visitexpenses. He cannot then claim for the same mileage and same journey on 6 May 2006 under Reimbursement.That was disallowed.

On the Form ME6 for a visit to York on 23 June 2006 Lord PAUL tried to claim for Committee Visit NightSubsistence for the night of 23 June 2006. Again this was a Friday and the House would not have been sittingthe next day so it was disallowed.

On the Form ME6 for a visit to Reading on 30 June 2006, LordPAUL tried to claim for Committee Visit NightSubsistence on the night of 30 June 2006. Again this was a Friday and the House would not have been sitting

the next day. Lord PAUL could not have returned to London too late to be able to get back home as I received

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an e-mail from Meg HAWKINS in the Committee Office confirming that he “ caught the 11 something train,so was back in London by lunch time.” Therefore it was also disallowed. This e-mail dated 19 July 2006 isincluded within the documents provided to police under exhibit numbers JPS/12 and JPS/13.

It became apparent that Lord PAUL did not have a complete understanding of the Committee Visit claimsprocess so the Finance Director at the time wrote to him on 20 July 2006 to explain further.

The Committee Visit forms are submitted as and when they are completed rather than at the end of the monthwhen the monthly Reimbursement Scheme forms are submitted. This invariably means that the forms all get

to us at different times. If the Committee Visit form reaches us first that would be paid first and we would thencheck what has been claimed on this form against the monthly Reimbursement form when it is received toensure nothing is paid twice. If the forms arrive at the same time any mistake would be taken off of theCommittee Visit Budget first.

If the Committee Visit takes place in London these claims do not come into play. If the meeting is in Londonand the member does not go into the Chamber that day they are not entitled to claim for any day subsistenceexpenses.

Also within the exhibit JPS/12 is a letter from Lord PAUL dated 7 January 2005 advising the Accounts Officeof his place of residence. This letter bears my initials and the reference number 1PAU001-2 which was hisreference number on our old system.

There is then a form ME20 Member’s Details dated 31 July 2006 advising of his main residence from 1 August2006. This form bears my initials twice showing that I received it on 4/08/06 and then went on to input it into

the system.

I can say that I have never had any reason to suspect that any of Lord PAUL’s claims under the MembersReimbursement Scheme have been deliberately false or misleading. Nor have any staff within the FinanceDepartment brought any such suspicions to my attention. If I or anyone else formed a suspicion that he hadknowingly misrepresented his main place of residence or any other fact in his claims, or made a claim forexpenditure which he had not incurred, then the claim would not be validated and payment would not bemade. The matter would be referred to Richard GEE for further consideration. I believe that any errors in hisclaims were down to him misunderstanding the process and were not deliberate.

Witness statement of Ms Shanaaz Ali, sometime clerk in the House of Lords Finance Department, dated

10 February 2010

Further to my statement dated 19 November 2009, I have been asked to consider and describe my involvementin the validation of claim forms under the House of Lords Members’ Reimbursement Scheme for Lord Paulof Marylebone.

Between January 2006 and January 2007 I was employed as a Members Expenses Clerk within the MembersExpenses Section of the House of Lords Finance Department. I then worked within the Payroll Section fromFebruary 2007 until September 2008, and currently work in the Refreshment Section.

I have been asked to describe my employment as a Members Expenses Clerk. The staff within the MembersExpenses Section comprised the supervisor, Maureen BUCK, and two clerks, Christine DALE and me.

My role was to check claim forms submitted by peers under the House of Lords Members ReimbursementScheme to ensure they were accurate. Initially I was given on the job training for about a week, by MaureenBUCK. There was no training manual as such, and I made notes on what Maureen said so I could refer tothem later if necessary.

The claim forms would arrive by post and Maureen would check to ensure the forms were correctly signed anddated by the peers. She would then divide the claim forms and pass them to the two clerks to be processed.

First of all I would check the claim dates on the form to ensure the peer had attended the House of Lords onthose particular days. This was done by making reference to the Peers Attendance database, which holds arecord of attendance at either a sitting of the House of Lords or a select committee. I would tick alongside eachdate on the form once it had been confirmed and write the total number of days at the foot of the column. If a particular date wasn’t on the database I would first ascertain that it didn’t relate to a Saturday, Sunday, anon-sitting day or recess when the House didn’t sit which would indicate an error by the peer. If it was a weekday, I would write a letter to the peer asking them to confirm that they attended on the day in question. Theform would not be processed further until a response was received either by letter or phone. I would make anote of any telephone response. If they confirmed their attendance, the claim would be accepted and continueto be processed. I cannot remember whether the Attendance database was updated to reflect the new

attendance date and if so who was responsible for doing it.




I would then add up the total claims for night subsistence putting a total at the foot of the column, having firstmade sure the claim was for a night immediately before a sitting. I cannot remember now if they could claimfor a night after a sitting. I would check that the dates pertaining to travel claims on the form coincided withthe dates claimed for night subsistence. If they did not, or there was no date shown for the travel claim, I wouldwrite to the peer asking for clarification and the claim form would remain on hold until it was resolved.

I cannot remember if I ever dealt with claims for night subsistence where travel costs were not also claimed.

In the case of travel costs I would check the particulars of each journey and if the journey was by car, the

mileage claimed, against the peers profile held on the database. This database showed where the peer lived andthe distance between their home and the House of Lords. I understood the address on the database to be theone where the peer commuted from to the House of Lords. I would then check that the claim dates for travelcosts related to when the peer attended the House of Lords and do the same for day subsistence and officecosts. I would then total the monies claimed for day subsistence, office costs and travel costs at the foot of each column.

Some peers would claim Additional Office Costs on the same form, albeit a specific form existed for thispurpose. In these circumstances I would refer to a spreadsheet which showed a running total for the AdditionalOffice Costs claimed in the current year, which ran from 1 August to 31 July to ensure the maximum allowancehadn’t been reached. I would then enter the figure in the “Addt Office” box at the foot of the form.

I cannot remember what action I took in relation to spouse travel claims.

The peer enters an address on the form described as “Main Place of Residence”; I cannot remember exactlywhat this denotes but it probably refers to the address from which they travel to the House of Lords. I wouldcheck that the main place of residence recorded on the form matched the one shown on the AGRESSO system.If it did not match, I would have brought it to the attention of Maureen, although I cannot remember if thissituation ever arose. However, if they had omitted to write their main place of residence on the form we wouldstill process the claim.

I would put the total claimed for travelling in the “Travelling Expenses” box having added the claims fordifferent forms of travel.

I would add the totals for night subsistence, day subsistence and office costs and put the total in the “TravellingExpenses” box and having done this, I would sign the “Checked” box.

After stamping each claim form with a unique number, I would put details on the AGRESSO computersystem. I remember entering the total numbers of night subsistence, day subsistence and office costs. Rates

were already uploaded on AGRESSO and would automatically work out the total.I and the other clerk would then swap our claim forms and check the name and amounts against the computerprint out, before signing the “Counter checked” box on the claim form as well as the print out.

Maureen would do a spot check on some of the claim forms and sign the box marked “EO Spot-Checked”.At the conclusion she would set up a payment run which notified the Payments Section of the amounts thathad to be paid to the peers.

I am not sure why, but the claim forms went to David English in the Payments Section before being returnedto the clerks. We would then file them in numerical stamped order and they were retrievable should they berequired at a later date to answer a query.

Any correspondence that might be generated or received in relation to a claim form would be attached to itbefore filing. For instance, this might include letters sent to a peer who had forgotten to add their name, or

sign or date a form or if there was a query over their attendance on a certain day or if dates of travel had notbeen included.

I have been asked if I ever dealt with a claim form where I suspected the peer had deliberately made a false ormisleading claim and I can say I did not. If that situation had arisen, I would have referred the matter toMaureen and put the claim on hold.

I have been shown claim forms made by Lord Paul of Marylebone and contained within JPS/12 and asked tocomment on my involvement with those dated March 2006 to July 2006 when Lord Paul designated his mainplace of residence as The Cottage, Bignell Park Hotel, Chesterton, Bicester, Oxon OX26 1UE.

I can say first off that I have no recollection of ever having answered any enquiries from Lord Paul of Marylebone or of having given him any advice.

The March 2006 claim form was checked by Maureen BUCK. It was not counter-checked or spot-checked

by anyone.

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The April 2006 claim form was checked by me and Maureen BUCK has signed as counter-checking and spot-checking.

The May 2006 claim form was checked by me and Maureen BUCK has signed as counter-checking and spot-checking.

The June 2006 claim form was checked by me and counter-checked by Christine DALE. Maureen BUCK isshown as spot-checking. Some changes were made due to his attendance at a select committee visit on 23 Juneand a non-sitting day on 30 June.

The July 2006 claim form was checked by me and counter-checked by Christine DALE.

I have also been shown committee visit expense claim forms in relation to Lord Paul of Marylebone containedwithin JPS/12 and asked to comment on my involvement with them.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 09.05.06 for Lord Paulattending a Science and Technology Sub Committee visit to Italy has been checked by me. The reverse of theform entitled House of Lords Invoice Authorisation Form A does not show anybody entering the details onthe computer. It is possible that this wasn’t entered onto the system. If there was a problem I would probablytake it to Maureen BUCK.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 05.06.06 for Lord Paulattending a Science and Technology Sub Committee visit to Italy has also been checked by me. I also addeda note at the side stating that Meg HAWKINS in the Committee Office has okayed the travel by phone at3.10 pm on 21/6/06. The reverse of the form entitled House of Lords Invoice Authorisation Form A shows thecomputer entries being entered by me on 21/6/06 and Christine DALE checked them.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight AccommodationCosts Form ME6 for the Science and Technology Sub Committee visit to Italy, which is signed and dated byLord Paul on 09/05/06, has been checked by me and authorised by Maureen BUCK.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 26.06.06 for Lord Paulattending a Science and Technology Sub Committee visit to York does not show anymembers expenses sectionsignatures on the front. The reverse of the form entitled House of Lords Invoice Authorisation Form A showsme as having entered the details on the computer on 24/7/06. It would appear that I have filled in theaccounting period and period adjustments row. This is usually already done when we receive the form. PeriodAdjustments refers to claims being made for a different month.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight Accommodation

Costs form ME6 for the Science and Technology Sub Committee visit to York, which is signed but not datedby Lord Paul, has been checked by me but is not shown signed as authorised.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 05.07.06 for Lord Paulattending a Science and Technology Sub Committee visit to Reading does not show any members expensessection signatures on the front. The reverse of the form entitled House of Lords Invoice Authorisation FormA shows me as having entered the details on the computer on 24/7/06. It would appear that I have filled in theaccounting period and period adjustment rows. There is no invoice number shown which would be needed tobe able to input it on the computer. I can only assume that the visit code was used instead.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight AccommodationCosts form ME6 for the Science and Technology Sub Committee visit to Reading, which is signed and dated11/7/06 by Lord Paul, has been checked by me but is not shown signed as authorised.

A file is kept of who is on which committee visit. As long as the form is signed by the clerk it is okay. I would

then input the figure onto the computer system. If it was not signed it would go to the clerk to be signed. If there is a stamped number on the form that means it was paid.

Office Costs claimed on an ME6 can be claimed for every day that the member is involved in the committeemeeting.

Accommodation Maintenance Allowance as claimed on the Form ME6 is only valid for nights that themember spends away in a hotel.

As far as committee visit night subsistence is concerned, I can’t remember exactly what this covers but Iremember that you have to check the dates to make sure they were entitled to it.

I never had any reason to suspect that the claims made by Lord Paul were deliberately misrepresented ormisleading or related to expenditure that had not been incurred by him. If I had at any time suspected this tobe the case, then I would not have processed the claim form and would have referred the matter to

Maureen BUCK.




Witness statement of Ms Christine Dale, sometime clerk in the House of Lords Finance Department,

dated 17 February 2010

Further to my statement dated 19 November 2009, I have been asked to consider and describe my involvementin the validation of claim forms under the House of Lords Members’ Reimbursement Scheme for Lord Paulof Marylebone [sic].

In May 2005 I started employment as a clerk within the House of Lords Finance Department Members’Expenses Section. I retired on 11 June 2008 but do occasionally come back to assist when they are short staffed

and have worked 35 days since retiring.When I first started, the Members Expenses Section comprised Maureen BUCK who was the supervisor andone other clerk named Jason POWELL.

I was given a copyof the General Guide to the Members’ Reimbursement Scheme. Therewas no training manualas such, but I was given on the job training by Maureen over a period of weeks. However about three years agowhen a new computer system called AGRESSO was introduced, I do remember everyone within the MembersExpenses Section was asked to write down how they carried out their job and from this Maureen and Clareproduced a policy document based on best practice.

The incoming post is opened by the secretary and stamped with the date. The peers’ claim forms go initiallyto Maureen or Clare, who will deal with any enquiries which might accompany the claims. I play no part inanswering those enquiries.

Maureen or Clarke HOOK would then divide the claim forms and pass them to the two clerks.

Initially I would ensure that the claim form had the original signature of the peer although this was somethingMaureen or Clare would check before giving us the forms. In cases where it was missing it was sometimespossible to work out who the form related to either from the handwriting or from the nearest town to the peer’shome which is recorded on the Travel database. If the peer was identified, the form would be returned to themfor signing, if not it would be pinned to a board until such time as the originating peer contacted the office.

Next I would check the dates of claim correspond with the dates recorded on the Attendance database of whenthe peer attended a sitting or Committee Meeting at the House of Lords. I would place a tick alongside eachdate on the form as it was confirmed. If a date didn’t correspond, I would put a cross against the date andwrite a letter to the peer asking them to confirm their attendance on that day. The claim form would not beprogressed until a response was received either by phone or in writing. If a response was by phone, then I wouldmake a handwritten note on a copy of the letter sent out and this would be attached to the claim form. In acase where the peer confirmed his attendance then I would send an email to the Journal office asking them to

include this date on the database. The same procedure would be adopted if the situation arose again with thepeer on a future claim form. If it was the case they accepted making a mistake the day and the amount claimedwould be removed from the period of claim. I would add up the number of confirmed attendance days andwrite the total at the bottom of the attendance column, and initial it.

I would then consider claims for night subsistence and ensure that they were only made for a night eitherimmediately before or immediately after an attendance at a sitting at the House of Lords or a Select Committeemeeting. In cases where claims for night subsistence were accompanied by claims for travel, I would also checkto ensure that dates of travel were included with the claim and that they were not inconsistent with days onwhich night subsistence was claimed. This was to ensure night subsistence wasn’t being claimed for a nightpreceding a day in which travel was claimed for a journey to the House of Lords; and also that nightsubsistence wasn’t being claimed on a day in which a travel claim was being made for a journey from the Houseof Lords to the peer’s main residence. I would also make sure each claim didn’t exceed the permittedmaximum.

I would then write the total number of days claimed at the bottom of the night subsistence column and addthe total sum claimed. If different amounts were claimed for night subsistence I would not total the numberof nights claimed, merely the total sum claimed. This was to prevent an error occurring later when theinformation was inputted onto the AGRESSO database.

I would then check that day subsistence claims coincided with attendance at sittings or Select Committeemeetings at the House of Lords and did not exceed the daily maximum allowed. Again I would write the totalnumber of days claimed at the foot of the column if the maximum had been claimed on each occasion and addthe total claimed for this expense in the total box. I would then do the same for office costs.

In relation to travel costs, these would be checked with reference to the Travel database, which shows thenearest town to the peer’s main place of residence. If applicable it shows which train station and/or airport thepeer uses to make the journey from their home to the House of Lords, together with the distance if the journey

is made by car. The journeys claimed would be checked to ensure they coincided with the details recorded. In

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the past, peers had to provide receipts for return journeys by rail, boat or air that exceeded £100 but morerecently this figure was reduced to £50. I would therefore check to see if a receipt was required and had beenattached. A failure to provide a receipt would result in me striking out this amount and I would add a note tothe payment slip advising the peer of the deduction.

If car mileage was being claimed two different rates applied. The first 10,000 miles claimed in the year attracteda rate of 40 pence per mile and above this the rate dropped to 25 pence per mile. I would refer to a spreadsheetproduced by the SUN computer database, which was later superseded by the AGRESSO database, which

showed the aggregated mileage claimed for the year. This allowed me to work out the correct mileage claimrate. Having done this I would total the separate claims for rail/coach/air fares and car mileage and then puta total in the boxes at the bottom of the columns on the right of the form. I would add the claims for nightsubsistence, day subsistence and office costs and put the total in the “Other Expenses“ box, and I would addthe sub-totals in the three travel columns and enter the total in the Travelling Expenses box.

A separate claim form exists for Spouse travel, but often peers would claim for this on the same form. I wouldrefer to the AGRESSO database to ensure the annual maximum limit hadn’t been exceeded before adding thetotal claimed in the “Spouse’s Travel” box. On the SUN database system, we had an Excel spreadsheet forspouses’ travel.

Some peers were authorised to claim a predetermined annual limit to assist with extra costs incurred throughdisability. The details are held on the Travel database, again to allow us to check limits are not exceeded. Oncesatisfied the claim was in order, I would add the total to the “Disabled Extra” box.

A separate form existed for peers to claim Additional Office Costs, but yet again peers would use the sameform to make this claim. They are allowed to claim up to 40 days per year at the office costs rate. Such a claimwould be checked against the AGRESSO report to make sure the limit had not been exceeded. Once I hadentered a total for additional office costs I would add together all of the totals at the bottom of the form, andenter the grand total in the “Total amount” box.

Before stamping each claim form with a unique reference number, I would enter the last date of claim on theform in the box provided. I would then add my initials to the “checked” box.

The next stage would be to input information on the AGRESSO system. This would include the figure fornight subsistence, day subsistence, office costs, rail/air and car travel, Spouse’s Travel, Disabled costs, andAdditional Office costs. The AGRESSO system would then produce a final claim figure which I would checkagainst my figure in the “Total Amount” box on the form.

When I had input all of the form, I would obtain an AGRESSO input report. I would then swap claim formswith the other clerk and check that the final AGRESSO figure matched the Total Amount figure calculatedby the other clerk on their forms. I would also check that the AGRESSO report showed the correct peer wasdue to receive payment. When the SUN system was in place, the procedure after swapping claim forms withthe other clerk was different. We would actually repeat the entire validation process already completed by theother clerk in order to double check the claims were correct.

Having checked the other clerk’s claim forms I would initial each form in the box provided to show it had beencounter-checked and they would do the same to mine.

The forms would then go to Maureen or Clare together with the AGRESSO print outs and she would thencarry out spot checks before adding her initials to the “EO Spot-Check” box. She would then run the paymentreport. After all of the claims had been posted for payment, the forms would be returned to one of the clerksfor filing in numerical order according to the stamp number. I am aware that there was a separate alphabetical

filing system for other correspondence with peers.

I have been asked to give my understanding of what I consider “Main Place of Residence” to mean. I havenever seen a written definition but as far as I am concerned, it means where a peer lives. This address had tobe completed on the claim form and I cannot think of an example where a form was passed to me without one.I have also been asked was action I would have taken had I suspected that a claim form submitted by a peercontained a deliberately false or misleading claim. I can say that I never encountered such a situation, but hadI done so, I would not have processed the claim and would have referred the matter to Maureen or Clare.

I have been shown claim forms in relation to Lord Paul of Marylebone contained within JPS/12 and asked tocomment on my involvement with those date March 2006 to July 2006 when Lord Paul designated his mainplace of residence as The Cottage, Bignell Park Hotel, Chesterton, Bicester, Oxon OX26 1UE.

I can say first off that I have no recollection of ever having answered any enquiries from Lord Paul of

Marylebone or of having given him any advice.




The March 2006 claim form was checked by Maureen BUCK. It was not counter-checked or spot-checkedby anyone.

The April 2006 claim form was checked by Shanaaz ALI and Maureen BUCK has signed as counter-checking.

The May 2006 claim form was checked by Shanaaz ALI and Maureen BUCK has signed as counter-checking.

The June 2006 claim form was checked by Shanaaz ALI and I counter-checked. Maureen BUCK is shown asspot-checking.

The July 2006 claim form was checked by Shanaaz ALI and I counter-checked.

When these forms were checked they were always done in red and always counter-checked in a different colour.

I have also been shown committee visit expense claim forms in relation to Lord Paul of Marylebone containedwithin JPS/12 and asked to comment on my involvement with them.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 09.05.06 for Lord Paulattending a Science and Technology Sub Committee visit to Italy has been checked by Shanaaz ALI. Thereverse of the form entitled House of Lords Invoice Authorisation Form A does not show anybody enteringthe details on the computer.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 05.06.06 for Lord Paulattending a Science and Technology Sub Committee visit to Italy has been checked by Shanaaz ALI. The

reverse of the form entitled House of Lords Invoice Authorisation Form A shows the computer entries beingentered by Shanaaz ALI on 21/6/06 and I have checked them.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight AccommodationCosts Form ME6 for the Science and Technology Sub Committee visit to Italy, which is signed and dated byLord Paul on 09/05/06, has been checked by Shanaaz ALI and authorised by Maureen BUCK.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 26.06.06 for Lord Paulattending a Science and Technology Committee visit to York does not show any members expenses sectionsignatures on the front. The reverse of the form entitled House of Lords Invoice Authorisation Form A showsShanaaz ALI as having entered the details on the computer.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight AccommodationCosts Form ME6 for the Science and Technology Sub Committee visit to York, which is signed but not datedby Lord Paul, has been checked by Shanaaz ALI but not shown signed as authorised.

The Peers’ Claim for Travelling, Subsistence and Incidental Expenses form dated 05.07.06 for Lord Paulattending a Science and Technology Sub Committee visit to Reading does not show any members expensessection signatures on the front. The reverse of the form entitled House of Lords Invoice Authorisation FormA shows Shanaaz ALI as having entered the details on the computer on 24/7/06.

The House of Lords Committee Visits Claim for Reimbursement of Office and Overnight AccommodationCosts Form ME6 for the Science and Technology Sub Committee to Reading, which is signed and dated11/7/06 by Lord Paul, has been checked by Shanaaz ALI but not shown signed as authorised.

The committee visit claim forms are already signed by the committee office when we receive them. If they aren’tsigned we would send them back to the committee office. They cannot be accepted without a signature. Aslong as the form is signed as authorised by the committee office I would accept it as they are responsible forwhat it allowed to be paid from their budget. If there were receipts attached I would always check them against

what has been authorised to ensure that they add up.

Whichever claim form is received by us first is the one that is paid, whether it is the committee visit budget orthe usual attendance budget. If a duplicate claim is then received it would be sent back stating it had alreadybeen claimed.

For the Form ME6 I would check to see if the dates are correct against a list that is produced of who is onwhich committee visit. I would still check it even if it has been signed by the committee clerk.

Accommodation Maintenance Allowance as claimed on the Form ME6 is only valid for nights that themember spends away and they receive two-thirds of the full amount claimed under the normal attendancebudget. This comes from our budget.

As far as committee visit night subsistence is concerned, I can’t remember exactly what this covers but I think

it is for the day before and the day after a visit if a member cannot get home.

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If I was unsure whether it was correct I would check it with Maureen Buck. If it was incorrect there would bean explanatory note or remittance advice sent to the member.

I vaguely remember a rule coming in regarding weekends but can’t remember it exactly.

There were a few of Lord Paul’s claims that had to be altered but I think this was down to him not having readthe guide book properly. It was sometimes the claim for night subsistence that had to be changed.

Witness statement of Mr Jonathan Smith, Head of Finance, House of Lords Finance Department,undated

Further to my earlier statement, I have been asked to provide details of payments made by the House of LordsFinance Department to Lord PAUL of MARYLEBONE for expenses claimed under the Members’Reimbursement Scheme covering the period from January 2005 to July 2006 inclusive.

Payments made prior to 1 April 2006 were processed via the SUN accounting system; post April 2006payments were processed using the Agresso system. The information I will supply is taken from records heldon computer. The information placed on the system was done so by persons employed within the FinanceDepartment and will have been added in the ordinary course of their work. I have no reason to suspect thatthe information is incorrect for any reason or that the systems malfunctioned, resulting in the records beingdistorted.

The process for making the payments to Members has been the same for both systems for the period January

2005 to July 2006. The Members Expenses Section check and process the expense claims and prepare themfor payment. Once authorised, either by the Members Expenses Supervisor or the Members Expenses SectionManager, the pending claims stay on the system until payment is made by the Payments Section—this is thefinal stage of the process which makes the physical payment to the Member. Payments may be made by theissuing of a payable order, similar to a cheque, or a direct transfer into a nominated bank account. When thePayments Section makes a payment to a peer it is on the understanding the Members Expenses Section hasauthorised the payment and it is therefore not within the remit of the Payments Section to validate orapprove claims.

In the course of making a payment to a peer, the Payments Section produces a payment remittance note whichis forwarded to the clerks who in turn will send it by post to the peer.

Some of the listings are from the Agresso system and show:

In the column headed “Claim number” this shows the unique claim number that will have been put on eachclaim form by the Members’ Expenses Section, followed by a computer generated automatic general paymentnumber. Sometimes the automatic general payment number will relate to more than one claim form number.The “Date Rec’d” column refers to the date the claim form was received by the Finance Department. The“Trans type (T)” column shows the term “posting Expenses”. This simply means it relates to members’ expenseclaims. Another term in this column is “Update GL with payments” which refers to the general ledger beingupdated as part of accounting for the payments process. The column “Accounts period (T)” refers to therelevant accounting period for the claim. The “Text” column gives a limited description of the expense. The“Claim/trans date” is the last date for which a claim is made on the relevant claim form. The “Amount”column shows figures in red and black which refer to a double entry book keeping system. The negative redfigures are what is owed by the Finance Department in relation to a claim form(s). The black figure representsthe sum paid to the peer to balance out the red figures. The “Pay method” column refers to the method bywhich the peer is paid and shows the term “IP” which means payment by bank transfer. The “Payment date”

column shows the date the payment is made to the peer.

A number of payments were paid via the SUN system. The listings relating to these are provided and containsimilar information but in a different format. The “Account” column is a unique account number for eachpeer. The “Period” column refers to the accounting period. The “Trans Date” column refers to the last dateof claim on a claim form. The “Jrnal No” and “Jrnal Line” columns refers to when the transaction wasinputted on the computer system as this is done in batches and relate to claims by a number of different peers.The “Amount” column is the same as for the Agresso system. The “Jrnal Type” column refers to the type of input screen. The “Jrnal Srce” column shows the person who put the entry on the system and the term“PAYMT” is generated when a payment batch is run. The “Treference” column shows the unique claim formpaginated reference number and another longer number in this column is automatically generated when apayment is made to the peer. The“Description” columngives a brief account of the expense. The “Entry Date”is the date the entry is put on the system. The “Entry Perd” refers to the period in which it was entered onto

the system. The “Posting Date” column refers to the date the entry was posted.




The bank account operated by the House of Lords Finance Department from which payments were made toLord PAUL of MARYLEBONE in relation to his expense claims under the Members Expenses Scheme isas follows:

In relation to Lord PAUL of MARYLEBONE, I can confirm that during the relevant period all paymentswere made by bank transfer to: I producecomputer printouts detailing the payments made to Lord PAUL of MARYLEBONE as JPS/15 which cover

the period January 2005 to July 2006.I can say that had the Payments Section been made aware by the Members Expenses Section or from any othersource that a claim made by a peer was false, then the payment would not have been made to that individual.

Witness statement of Ms Yvonne Mabs Francis, Landlord, dated 22 December 2009

I am the above named person and I live at Bignell Cottage, Chesterton, Bicester, Oxfordshire OX26 1UE.

I am making this statement in connection with an investigation being conducted by the Metropolitan Police.I have been asked to comment on my address Bignell Cottage.

I live here with my partner Philip Jones and have lived here for 30 years. My son also lives here at the momentand my daughter is staying here at the moment as well.

It is my family home and my old business Mabs Francis Ltd is also registered here. It is a family business with

no one else involved. Nobody else has lived here other than family members.I own the house with a small mortgage and it is freehold.

The Bignell Park Hotel shares the same postcode as us and my daughter worked there in the holidays whenshe was a student. There is no other connection between this house and that hotel and we are far enough awayfrom it to have no connections.

We have never head of Lord Paul or received any mail for him. He has no connection to this house that I amaware of.

We have received mail today for someone with a foreign sounding name who probably works or lives at thehotel but never had anything for Lord Paul.

I would never use the line Bignell Park Hotel in my address as we are on completely the opposite side of theroad and some distance away.

I can think of no reason why Lord Paul or anyone else would give this as their address and I have not givenmy consent for this address to be used by anyone else.

I have previously given my address as Bignell Cottage, Bignell Park, Chesterton but stopped doing that sometime ago. Some old correspondence still arrives addressed that way occasionally, but I have never used BignellPark Hotel in my address as it is somewhere different altogether.

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Witness statement of Ms Prenusha Chetty, Hotel Manager, Bignell Park Hotel, dated 12 January 2010

I am the above named person and I am the manager of Bignell Park Hotel, Chesterton, Oxfordshire. I havebeen the manager of the hotel since October 2008, prior to that I was the deputy manager and prior to that,the assistant manager.

I first started working for the hotel on 19 May 2003 as the restaurant supervisor and have worked my way upsince then.

When I started in May 2003 the manager was a man by the name of Mark Stevens. He left in January 2007and moved to South Africa.

The next manager was a man by the name of Jean-Louis Jegard. He sadly passed away in October 2008 whichled to me being promoted to hotel manager.

I have been asked about the period between January 2005 and July 2006.

At this time I would have been the assistant manager and deputy manager. Duting this time I was responsiblefor conferences and weddings and also the restaurant. I didn’t have much to do with the front of house. I didn’tstart becoming really involved in the reception area until I became manager.

The hotel itself has 22 rooms and the manager’s flat which has one bedroom, kitchen, lounge, bathroom andpassage. It is a self-contained flat and can be accessed via the hotel or outside door.

I currently live in the manager’s flat and have done since March 2008.

The previous manager, Jean-Louis did not live on site as he was also managing another hotel. Mark Stevenslived in the flat when he was the manager.

There is no separate address for the flat; my mail just comes addressed to me at the hotel. I have been askedif I have ever heard it referred to as “The Cottage”; I haven’t. It is just a ground floor flat with a single storey.It is the only staff quarters on site.

I have been asked if I know Lord Paul. I have only known hime since I came to work for the hotel in 2003. Iknew that he was the man that owned the hotel above the managing director. Sometimes he would eat in therestaurant and I would speak to him. I never readily questioned whether he was staying here or had just cometo eat.

As I said, I didn’t have anything to do with the front of house as such but there is one occasion that I recalltaking tea to a bedroom and he was staying in that room. I can’t be sureexactly when it was but it was definitelywhen Mark was here. I used to see Lord Paul here more often when Mark was here. I haven’t seen him much

in the past couple of years. I don’t know why that is as I don’t really get involved with anything like that.

I used to see him from time to time around the hotel if he was going to Blenheim Palace or for a board meeting.It would only be about six or seven times a year roughly and would only be for a day at a time. I’m not surehow he would travel here because I didn’t really pay any attention.

The flat is not included in my contract and it is not stipulated that I must live there. I have never been toldthat I would have to move out on short notice or anything like that.

If we are told that a manager is coming up we would make sure that there is a room for them to stay here evenif it means moving a guest to a different hotel. After all it is the management and there are only 22 rooms.

I am not aware of Mark Stevens ever being told that he would have to move out on short notice.

I do not have access to the historical guest records to see if Lord Paul ever registered here as a guest. They arekept on the server by our sister hotel The Osborne Hotel in Torquay. I will try to find out if there is a record

of Lord Paul staying here as a guest.

I am not aware of Lord Paul ever having any mail delivered here or keeping any belongings here.

Police summary of exhibit provided by Prenusha Chetty, Hotel Manager, Bignell Park Hotel

Prenusha Chetty provides an exhibit (PC-1) which is a list of guests who stayed at The Bignell Park Hotelbetween 1 July 2005 and 31 June 2006. This document has been examined and Lord Paul was not recordedduring this period as staying at the hotel.

[Exhibit PC-1 not printed.]

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Letter from Mr Mark Sly, Subpoena Unit, Companies House to Detective Constable Kirsty de St-Denis,

Metropolitan Police Service, dated 12 January 2010

Dear Kirsty,

CAPARO HOTELS LIMITED

Please find enclosed Witness Statement as requested.

For your information my date of birth is , and place of birth is .

I hope everything is to your satisfaction but should you have any problems please do not hesitate to contactme. Please quote our reference as shown above if you have any query onthis matter or in the event of a “furtherto” statement being required.

Your sincerelyMark SlySubpoena Unit

Witness statement of Mark Sly, Subpoena Unit, Companies House, dated 12 January 2010

I am employed in the office of the Registrar of Companies at Companies House, Crown Way, Cardiff. Inaccordance with section 1080 of the Companies Act 2006 the Registrar has custody of statutory documentsrelating to companies which are registered in England and Wales.

When documents are submitted to Companies House they are examined to ascertain whether they areacceptable for registration. Those that are acceptable are registered on the Registrar’s computer records,scanned and their images are stored electronically. Documents which are registered are stored in theCompanies House archives by reference to the date upon which they were received.

Documents that are not acceptable are returned to their “presenter” (ie the individual or organisationdelivering the documents on the company’s behalf) or the company’s registered office, as appropriate.Documents which are returned to their presenter are not scanned but a record of the rejection is recorded onthe Registrar’s internal computer records.

The following information given in exhibits marked MS/1 and MS/2 has been extracted from the computerdatabase records held at Companies House. The persons registering the information from the documentsreceived would have no reason to update the records incorrectly. However, there is a remote possibility thatthe computer records may contain data capture errors.

I have examined the computer records kept by the Registrar relating to CAPARO HOTELS (previouslyknown as OSBORNE HOTEL (TORQUAY 1918) LIMITED and OSBORNE HOTEL TORQUAYLIMITED), company number 149618. According to that record, it shows that it was incorporated on 14February 1918.

I produce the following exhibits relating to the above company:

I produce (marked MS/1) a computer printout listing “Company Details”.

I produce (marked MS/2) a computer printout detailing “Company Appointments”. This printout only showsthe appointments of those officers that were in situ from 24/06/1991 onwards which was the date theappointments database was compiled. Therefore, it is not possible to give the exact appointment date for theofficers who were appointed as at 24/06/1991.

I produce (marked MS/3) a true document image of the Certificate of Incorporation on Change of Name dated1 August 2001 together with a Special Resolution passed on 26 July 2001 notifying of a change of companyname from Osborne Hotel Torquay Limited to Capara Hotels Limited.

The above exhibits, marked MS/1 and MS/2, were created on 12/10/2010 using data extracted from thecomputer database records held at Companies House.

Police summary of exhibits provided by Mr Mark Sly, Subpoena Unit, Companies House

MARK SLY from the Office of the Registrar of Companies at Companies House produces three exhibits inrelation to Lord Paul. MS-2 is a list of former and current directors and officers of CAPARO Hotels Ltd oneof which is The Hon Ambar PAUL. This record shows that Lord Paul was appointed on 22/04/1997 as adirector and that appointment was current as of 12/01/2010.

[Exhibit MS-2 not printed.]




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Witness statement of Mr Erling Sorenson, Hotelier, dated 15 February 2010

I am the above named person and I am currently the owner of Amberfold Hotel in Midhurst, West Sussex.

This statement refers to my ownership of the Bignell Park Hotel, in Chesterton, Oxfordshire.

I originally bought the Bignell Park Hotel in 1991 and it was called Wood’s Restaurant. It had some roomsbut was really just a restaurant.

In 1995 we obtained planning permission to extend and had extra rooms built and an owners’ cottage. The

owners’ cottage was built in 1997 or 1999. It was a one storey cottage attached to the end of the building. Itcould be accessed via the hotel corridor and had its own private lane and front door. It was an ideal set up forowner occupiers.

It was a one-bedroom cottage. At one time we were thinking of building another extension onto the hotel butdidn’t get round to doing it in the end.

I lived inthe cottage for about two years before we sold the hotel in 2001 to Caparo. The owner of the companywas Lord Paul and his family. I met his accounts team but I never met him. He had a manager who was goingto come in.

We physically left the hotel on 5 July 2001 and I have only been back on one occasion since then.

I have no idea who lived in the cottage after we left or what Lord Paul’s arrangements with the hotel were.

When we first bought Wood’s Restaurant it was one building. There were no other buildings attached.




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