Select Committee on Standards and Privileges Ninth Report

Further letter to the Parliamentary Commissioner for Standards from the Rt Hon Peter Mandelson MP

Thank you for your letter of 25 February. I am happy to give you further information to enable you to report to the Committee. Taking your questions in order:

Flights accepted from Ms Wachner

i)    3 September 1996. I joined Ms Wachner for a holiday at her home on Long Island and she detoured in her plane to pick me up at Cape Cod as there was no other easy means of travelling between these locations.

22 December 1996. I was concluding a visit to Washington DC where she was also conducting business and she invited me to join her for a weekend break at her home at Aspen. I travelled with her on her return flight to New Jersey (the most convenient airport for her home in New York) and I travelled on at my own expense to London on a scheduled flight.

22 August 1998. I spent my summer holiday with Ms Wachner at her home on Long Island and during this period we travelled to spend the weekend again at Aspen, returning to New York (New Jersey) on 24 August. Subsequently, she was committed to spending some days on holiday in Venice and she invited me to accompany her (26 August). I stayed in Venice at my own expense and I then travelled on with her to London as she was conducting business in Europe (31 August).

ii)    The plane is owned by Warnaco but Ms Wachner pays for any guest accompanying her. I have asked the Company Secretary to write to you separately to confirm this.

iii)  Warnaco.

iv)  Warnaco has a small manufacturing plant in Northern Ireland and a distribution facility in Nottingham. I know of no reason why her business interests should fall within the responsibilities of the DTI and no conversation between us touched on any such overlap of interests. I have asked the Company Secretary to write to you about any request for government financial aid to the company (I do not know of any) and, needless to say, had any such requests arisen while I was at the DTI I would have naturally informed my officials of my connection with Ms Wachner.

v)    I can think of no other matter bearing on this complaint. Ms Wachner and I remain good friends having been introduced at a social function by mutual acquaintances in 1994. We see each other half a dozen or more times a year.

The loan from Mr Robinson

This was a concessionary loan (i.e., it was not made on normal commercial terms) provided by Mr Robinson who is a friend of seventeen years standing. He has always been personally supportive towards me and he wanted to see me settled and give me peace of mind after a drawn out process of searching for a new home in west London. He did not give me the loan because I was a MP or to help me in anyway to do my job as a MP and, therefore, I did not believe it was registrable because it was not a material or financial benefit received by me from an outside interest in my capacity as a MP. As you may know, other loans and gifts made previously between Members had not been registered. I believed a convention had been established, notwithstanding Mr Thomason's case which was more complicated and had other dimensions, that transactions between Members were outside the terms of the rules of the House.

Mr Robinson's loan was not secured on the property and never put at risk the mortgage provided by the building society. The terms were agreed in a telephone conversation made by Mr Robinson to my conveyancing solicitor on 15 October 1996 and the loan was made on 21 October in time for completion on 23 October. The loan was to be repaid at a time to be agreed between Mr Robinson and myself (he could not simply call in the loan without my agreement) together with simple interest accruing and calculated by reference to the base rate of Midland Bank plc (or any successor of that bank). The loan was not to be registered at the Land Registry without the consent of both of us unless Mr Robinson gave 90 days notice of his intention to do so. This action did not mean that Mr Robinson was at liberty, then, to call in the loan but was to protect his interest if I ever got into financial difficulty. It was agreed between us that, in the event of my selling the house, the loan and accrued interest would be repaid by me unless a further substitute agreement was made between us. My solicitor made a memorandum of his conversation for Mr Robinson which he copied to him confirming the above terms. I have asked my solicitor to write to you separately to confirm this. As I have stated previously, because the unsecured loan from Mr Robinson was agreed after exchange of contracts in order to enable me to complete the purchase and was on a confidential basis between us the Britannia were not, at the time, informed of the loan. As you will know, the Britannia have confirmed that they are satisfied that there was no financial risk to the Society.

The loan from the Britannia Building Society

I received the mortgage from the building society on October 23 1996. I have provided to you—for your personal information only as this is a private financial document—a copy of my original mortgage application.[14] This was not a concessionary loan. Mr Robinson's unsecured loan was agreed subsequently, as I have explained, and was not entered on the form. The planned contemporaneous sale of my flat and purchase of my house did not take place as intended, for simple market reasons, as I have explained to the society. I sold my flat three months later on February 28 1997. At the time, I also had an outstanding mortgage on my constituency home in Hartlepool. Having maintained these two homes (and mortgages) since entering Parliament I did not think that this information affected my application to the Britannia and I was not questioned about it by the Britannia branch manager when I filled in the form with him. I intended, in any case, to discharge the Hartlepool mortgage when I sold my London flat and did so on February 28 1997, leaving me with the single mortgage in London. All my repayments were properly made and no suggestion has been made to me since by the society that I had insufficient funds available to cover the mortgage payments. In fact, my mother helped me financially during this limited period. I am attaching a copy of the statement made by the Britannia on January 8 1999 indicating their satisfaction with the information I provided to them and stating that the building society's interests were never put at risk by me.

I hope that, with this full information, you will be able to make a satisfactory report to the Committee. I do not believe that I have received other gifts which should have been registered although I will keep under review any further gifts that should be registered. Perhaps you could let me know if you need more information arising from this letter.

24 March 1999

14  See Annex I. Back

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