Select Committee on Standards and Privileges Ninth Report

Reply to the Parliamentary Commissioner for Standards from Mr Duncan Wiggetts of Herbert Smith Solicitors


As you are aware from our previous discussions, the principal concern of our client, Britannia Building Society, is the duty of confidentiality it owes to its members, which prevents it from revealing any information concerning its customers. We would stress that our client is treating Mr Mandelson in this respect no differently from any other member.

In your original letter of 29th March, we were informed that you had been asked to investigate whether Mr Mandelson had received a concessionary mortgage from the Society. As we stated in reply and I repeat now, Mr Mandelson was not given a concessionary mortgage nor was he afforded any special or preferential treatment whatsoever in his dealings with our client. His application was dealt with commercially at all times.

So far as our client is concerned, that should be the end of the matter and we cannot understand why we are being asked to provide any further information or how this comes within the remit of the relevant Committee particularly when, in providing the information requested, our client would be acting in breach of its obligation to maintain confidence over its dealings with customers.

Nevertheless, in order to assist the Committee and to bring this matter to an early close, so far as our client is concerned, we have sought the consent of Mr Mandelson to provide answers to the questions raised and he has agreed that we can do so.


1.      The Branch Manager asked Mr Mandelson only the questions stated on the mortgage application form which the Branch Manager filled out in accordance with Mr Mandelson's instructions and which Mr Mandelson then signed. Mr Mandelson's replies were recorded in full on the form:—

"D1  Have you any HP/loan agreements?      No

 D3  Have you any further outstanding commitments

including maintenance payments?        No

 D5  Do you propose to borrow any other money upon security of

the property to assist in the purchase?      No"

2.      Beyond the questions on the mortgage application form, Mr Mandelson was not asked anything else.

3. & 4.  Mr Mandelson told us at interview that he thought he had mentioned this as there was no reason for him not to reveal it (as it was going to be paid off out of the sale proceeds of his Wilmington Square flat). The Branch Manager told us at interview that he would have recorded the Hartlepool mortgage if he had been told about it, as it would have been relevant to underwriters.

5.      No (see answers to 3 & 4).

6.      The Branch Manager did not recall specifically informing Mr Mandelson of his ongoing duty to keep the Society informed of material changes in his circumstances. However, the 'Instructions to Solictors' form contained an express provision for the Society's Solicitors to inform it if there had been any material change in the circumstances of the transaction (a duty which is implied in any event). The reply to question number 9 also refers.

7.      The Branch manager assumed so.

8.      (a)  In a reply from Wegg-Prosser & Farmer on 19th January 1999 to the Society's ongoing enquiries.

(b)  The Society first knew of the loan when the story broke in the media—22nd December 1998. However, it was not aware of the terms of the loan until, again, the letter from Wegg-Prosser & Farmer of 19th January.

9.      Yes, for all matters connected with this mortgage. To the best of the Society's knowledge this was the first time Wegg-Prosser & Farmer had been instructed. It is the Society's usual practice to instruct the applicant's Solicitor to act for it in connection with the mortgage. As a result of our review of this matter for the Society, Wegg-Prosser & Farmer have been removed from the Society's panel.

Finally, we should re-confirm that we were instructed to carry out a thorough review of this matter for our client and that we found there to have been no deliberate intention on the part of Mr Mandelson to mislead our client in respect of this mortgage transaction. Furthermore we reported that there was no risk to our client at any time. Our recommendations were accepted by our client which has now closed its file on this matter.

5 May 1999


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