Select Committee on Standards and Privileges Minutes of Evidence

Examination of Witness (Questions 20 - 39)



  20.  When did you first discuss the loan for that £40,000, or whatever it was? When did you first discuss that you would be needing a loan for that deposit?
  (Mr Mandelson)  It was right when the Party Conference was going. Whenever the Party Conference began, just at that period. September 27th, or something. I do not know. I cannot say the precise date but it was whenever the Party Conference began in the autumn.

  21.  Very well, October.
  (Mr Mandelson)  Yes, end of September, beginning of October.

  22.  But when you exchanged contracts you were unsure at that time whether you would be getting money from your mother?
  (Mr Mandelson)  I was unsure.

  23.  Was that still a possibility?
  (Mr Mandelson)  There was a possibility, but I was unsure.

  24.  So at what point did you approach Mr Geoffrey Robinson for the balance? Did you do so on the basis this was going to be a substantial sum, which you knew, presumably, and you had to decide whether it was going to be a short-term loan or a long-term loan?
  (Mr Mandelson)  What happened was that the woman I was buying it from—the house—became pressing. She could see that property prices were moving up quite considerably in that area and she was saying to me that unless I just did it and made clear I was going to put down a deposit and buy it—she wanted a fairly swift completion after the exchange of contracts—then she would withdraw the house from the market and reject my offer and sell it on elsewhere. She believed it was a positive market, from her point of view. That rush of events took place—I am sorry, I cannot be more precise on the dates—but that rush happened in the period around the Party Conference and just after.

  25.  Just to finish on the involvement of Geoffrey Robinson at this stage, when you started looking for a flat did Geoffrey Robinson join you in your search at any time?
  (Mr Mandelson)  I am sorry, I did not hear.

  26.  When you started looking for a flat, or a house, did Geoffrey Robinson join you in your search?
  (Mr Mandelson)  That was much earlier.

  27.  I am trying to finish it off the Geoffrey Robinson comment that I want from you. Did he join you in your search?
  (Mr Mandelson)  Yes, he did.

  28.  On how many occasions?
  (Mr Mandelson)  Not many. Three or four.

  29.  So he visited various properties with you?
  (Mr Mandelson)  Yes.

  30.  That would be, presumably, before August?
  (Mr Mandelson)  Long before August. That was July.

  31.  So he, presumably, was aware that you may be calling on him for some funds?
  (Mr Mandelson)  He had offered to make funds available. He had done that right at the beginning.

  32.  So you went around looking at property knowing that you had a fall-back position as far as funds were concerned. Is that the situation?
  (Mr Mandelson)  That is the situation.

  33.  Just about the flat in Clerkenwell. Did you originally tell the Britannia that you intended to complete on the sale of your London flat at the same time as you completed on the purchase of your house in Northumberland Place?
  (Mr Mandelson)  Yes. My firm intention was to have a contemporaneous sale of my flat in Wilmington Square in Clerkenwell, discharge my mortgage in Hutton Avenue, Hartlepool and the purchase of Northumberland Place.

  34.  When did you become aware that the flat would not be sold in time?
  (Mr Mandelson)  Pretty late on. I had had a number of offers and one looked like a very firm offer, which I had accepted. I was going to go ahead with the sale (it was the sale that finally took place) but the people who were going to buy the flat in Clerkenwell found they were unable to sell their own property in the time that they wanted and expected. They were then unable to proceed at the same pace and in the timetable that I was working on. They had also offered me under the asking price. My estate agent at the time said I would be unwise to accept that asking price because he said the property market was rising and that I could at least get my asking price, if not a bit more. But the people who had originally made an offer then came back. I cannot remember what precisely happened but all I know is that I decided that I would accept their offer and I would not accept my estate agent's advice. They were able to proceed quite quickly and I agreed, fairly smartly, to proceed with them. I have to say there was a slight benefit for me in the delayed sale of Wilmington Square because work needed to be done at Northumberland Place which meant I could not move into it straight away, so I was not losing any sleep over it, except that it was a slightly expensive thing for me because I had to finance three mortgages at the same time. They were not very substantial mortgages, obviously, in the case of Clerkenwell and Hutton Avenue, and I was able to do that. I had the income and the savings to cover it, but also my mother helped me in that bridging period in meeting the expense of maintaining the mortgages. It was not that long a period. I cannot remember, but it was over the Christmas and New Year—from one year to the next.

  35.  But the bridging would just be interest charges.
  (Mr Mandelson)  What would be interest?

  36.  Interest charges.
  (Mr Mandelson)  On what?

  37.  How did you get the money for the bridging?
  (Mr Mandelson)  I did not get a bridging loan for it, I was able to pay for the mortgage payments from my own income and my savings. Also, from money that my mother gave me for that purpose.

  38.  Those would not be very substantial sums.
  (Mr Mandelson)  No.

  39.  Final question: why did you not tell Britannia that the flat would not be sold in time?
  (Mr Mandelson)  I am afraid it never occurred to me to do so. Did I need to? I do not know why. They were not unsecured in it; they were not put in any financial risk, I was paying their mortgage. I did not feel that it was a problem for them. I did not think it was of concern or relevance to them. But, anyway, it was not as if I was drifting on. It was a very short period after the completion of Northumberland Place that I think, certainly, I agreed the sale and, I suspect, exchanged contracts on the sale of Wilmington Square. I am afraid I cannot remember precisely when it was. The extended period was, I think, between accepting their offer and, I believe, the exchange of contracts and the completion. They wanted a delay because they had to sell their property finally, and, to be honest, I did not mind a delay because I needed somewhere to live whilst Northumberland Place was being rebuilt a bit.

Chairman:  Thank you.

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