Examination of Witness (Questions 20 -
TUESDAY 18 MAY 1999
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
21. Very well, October.
(Mr Mandelson) Yes, end of September, beginning
22. But when you exchanged contracts you
were unsure at that time whether you would be getting money from
(Mr Mandelson) I was unsure.
23. Was that still a possibility?
(Mr Mandelson) There was a possibility, but I
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 fromthe housebecame 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 itshe
wanted a fairly swift completion after the exchange of contractsthen
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 placeI
am sorry, I cannot be more precise on the datesbut that
rush happened in the period around the Party Conference and just
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
(Mr Mandelson) Yes, he did.
28. On how many occasions?
(Mr Mandelson) Not many. Three or four.
29. So he visited various properties with
(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 Yearfrom one year to the next.
35. But the bridging would just be interest
(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
38. Those would not be very substantial
(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.