Select Committee on Standards and Privileges Ninth Report

Further letter to the Parliamentary Commissioner for Standards from the Rt Hon John Redwood MP

The question at issue over Peter Mandelson's loan is whether the loan was a soft one or not. As I think you have said, if an MP receives a loan which is not available commercially then the favourable terms warrant registration. Indeed, this was the finding in the Thomason case.

Mr Mandelson borrowed a very large sum of money from Mr Robinson. Could he have borrowed this in the usual way from a Bank or Building Society? Is it correct that he also borrowed £150,000 commercially from the Britannia, and still had a mortgage on his flat before he sold it? If so, would any financial institution have lent so much money to someone on an MP's pay?

Had any commercial enterprise so lent him the money, would they have done so at such a fine rate of interest? Was Mr Mandelson paying regular monthly interest on the £373,000? If not, did the interest waiver amount to favourable terms in itself? If he was paying interest on all these borrowings, did he declare all the income that made these payments possible?

It appears that the loan was well outside normal commercial practise and that is why it came from a colleague and friend rather than from a financial institution. If this is so, surely it should have been registered? This had been clearly established by the Thomason case. I never remember any rider which said that if an MP borrowed from another MP the usual rules were suspended.

28 January 1999

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