Select Committee on Standards and Privileges Minutes of Evidence

Examination of Witness (Questions 120 - 139)



  120.  So when he said, "What position do you now hold?"——
  (Mr Mandelson)  I would have said Member of Parliament.

  121.  And he writes the word "MP" on the form and then above it "Minister of Parliament". You do not know how it came about that he changed it?
  (Mr Mandelson)  I do not. I have no idea. I never took away the application form. I never saw the application form until I went into Herbert Smith to be interviewed by them earlier this year. I had never seen it.

  122.  Are you quite certain that when you got to the end of the interview, did he then say, "This looks okay," or "Sign here"? Can you remember what sort of words he used at that point?
  (Mr Mandelson)  They were comforting, they were very friendly. There was never— There was not even a, "Well, this may be difficult" or, you know—nothing. It was so matter of fact. It was almost in and out except that it took about 40-45 minutes.

  123.  Forty-five minutes is actually a very long time. Are you wedded to that?
  (Mr Mandelson)  I felt it was. I do not know how long it was. I felt it was a thorough meeting. I felt it was quite long but it is my guess that it was about 40 minutes. I suppose it could have been half an hour but it just seemed a long enough period to do what we needed to do. There was no question of my saying, "Look, I'm terribly sorry, I've only got 10 minutes because I have to get back to the office." I did not say that. There was no question of that.

  124.  They used the word "rushed" in the report. Where do you think that could possibly have come from?
  (Mr Mandelson)  I think because he may have felt rushed but I do not really see any reason for him to have felt rushed because I was not saying to him, "I'm sorry, I have a fixed period of time and I have to leave at the end of it." I was not saying that. It is true that Ben came in towards the end and he might have been slightly sort of impatient and wanting to get me out and on to what I had to do next. I am not sure whether "rushed" is the right word. I think possibly he was a bit—I was going to say flustered but he was not flustered in the sense that he was not coherent, kind of thing.

  125.  There was a change of circumstance between 30 August and when you completed. We all know that now, that is a fact. Did you at any time feel you had an obligation to tell the lenders of that change of circumstance or did you regard it as irrelevant?
  (Mr Mandelson)  I regarded it as irrelevant. I did not realise that it was of concern to them. It never occurred to me, nor did anyone suggest to me, that it was a matter of relevance to them.

  126.  Your solicitor, we all know from the papers, did have an obligation to bring that change to the building society's attention. Did he ever discuss that with you?
  (Mr Mandelson)  He never discussed it with me. I think both of us felt that as it would make no material difference to the building society—it was not as if I was replacing one unsecured loan or gift for a mortgage or a charge on the property—that never arose and I do not believe it ever occurred to my solicitor, who is a fairly fastidious person. I do not think that it would have occurred to him "I should tell them but I am not", he is just not that sort of person.

  127.  Of course it may be irrelevant what he thought but as far as you are concerned are you satisfied that he knew about the change, the solicitor obviously knew about the change?
  (Mr Mandelson)  He knew about it.

  128.  And he did not advise you to tell the society?
  (Mr Mandelson)  No, he did not.

Mr Forth

  129.  Peter, some of us anyway are struggling with this whole process. I find it quite difficult in a sense to justify what we are doing here but we are all on the Nolan-Neill treadmill now and it seems that we are forced to go through the process and it is very much in that spirit that I believe we have got to do it. What fascinates me and what I need putting in perspective is how the scale of the financing came about. If we go back to the original discussions that I think you had with Geoffrey in May with the idea in mind that you wanted to move and the brief discussion about the loan and then the involvement of your mother and so on, how did you end up looking at houses in that sort of price bracket? What did you have in your mind in terms of financing at that stage?
  (Mr Mandelson)  That is a very, very good question. I looked at flats. The first thing "what was I doing in that area in the first place", it is an expensive area and it was too expensive for me. I was there because of the original desire having been introduced to the area by my friends, having originally intended to rent their flat during the week but then when that did not happen, because Gill became pregnant and they had another kid and did not want to take on a flat in London, I continued to want to live in that area. The area was expensive, not nearly as expensive as it is now. Considering what prices are now it was almost modest by Notting Hill standards. I looked at flats. The flats were incredibly expensive for what they were and they were not in great shape. I did look at a whole lot of flats. I made an offer for one flat, had the offer accepted, then I was gazumped and I lost it. That happened on at least two occasions. By July/August I was getting worried because I was running out of time. I did not want to be involved in looking for a house or a flat or moving in the autumn because that to me was the election period. I wanted to do it during the summer. I wanted to do it before we got intensely under way in the autumn. Partly because flats were so expensive, and actually the houses were not that much more expensive than some of the flats I was looking at, partly because I was not being shown any flats that I wanted, although I very much wanted the original flat that I tried to buy and if I had been able to buy it none of this would ever have happened, partly because—and this is a personal thing—I was a bit reluctant to live in a flat where there were going to be other people. That is an entirely personal thing.

  130.  Okay. Can we go back to our friend, section D, because you very interestingly talked about D5. I am actually more interested in D3 because it strikes me that there the question "Have you any further outstanding commitments including maintenance payments?" is a much more all-embracing open sort of question of the kind that one might expect would sweep up almost anything. That might have been the point at which going through it at whatever pace was happening at the time might have sparked off a different response. After all, you went through the mortgage process in 1990 with Hartlepool, you went through another mortgage process in Clerkenwell, and here you were going through this mortgage process. Did that question not spark any different responses at all?
  (Mr Mandelson)  I am afraid it did not. I do not know how he explained "maintenance payment". I do not know what he said to me a maintenance payment was. It is like number one. If you look at D1 "Have you any hire purchase/loan agreements?" I have asked myself many times since in relation to Hutton Avenue because of the question that has been raised about it there, why did I not see Hutton Avenue as a loan agreement and I am afraid I did not.

  131.  Or as an outstanding commitment?
  (Mr Mandelson)  To me a hire purchase or a loan agreement is when you want to buy something and you put it on the "never never". If it had said "Have you any hire purchase or other mortgages", it would have immediately said to me Hutton Avenue, but it did not I am afraid and I did not relate the two.

  132.  One of the things you said which intrigued me at one stage was that there was no reason for Britannia not to agree a mortgage. That leaves me wondering what the now increasingly famous Mr McDermott had in his mind when this discussion was taking place because he knew what your income was, he knew by now what you were and, as you have said, you wanted to see what the maximum was you could borrow against that background. What do you think he thought was going to fill the difference between the sort of property value that you were looking at and what was visibly there?
  (Mr Mandelson)  He thought it was going to come through personal resources and personal arrangements.

  133.  That was the extent of his interest, he was satisfied that was it?
  (Mr Mandelson)  He never asked me any follow-up questions. He never asked me any searching series of questions at all about how I would pay the balance of the purchase price.

  134.  Just in passing, and this will sound like a debating point but I must make it, you said that you cannot possibly have been treated specially by Britannia to whom you were just like any other member of the public. You did say earlier that he had come in especially on his day off. There was a factor there, I am not saying it would have been a material factor.
  (Mr Mandelson)  I think there was a factor there but I do not think it yields the interpretation or the conclusion or the construction that the Commissioner has placed on it. I most vigorously think that is just not logical, it is not true, and there is no evidence to support it at all, that the building society had made an exception for me in some way or had given me favourable treatment that led them to vary their normal procedures or criteria. Put it this way: if the building society did not know of this information which I had not provided them with they did not know that anything was exceptional that would cause them to give me a favourable or concessionary mortgage. You cannot have it both ways, with respect. Either the building society had this information and decided that they would overlook it or they would make an exception because I am an MP, or they did not have the information because I withheld it from them, in which case they were not making any exceptional arrangement for me. You cannot have it both ways I would suggest.

Shona McIsaac

  135.  Like others I find going over your personal financial details particularly difficult. First of all I want to begin with just a couple more questions about this filling in of the mortgage application form with Mr McDermott. Having now seen the application form is it your recollection that in relation to the questions, and there are an awful lot of them where he has written that things are not applicable, etc., did he read them verbatim would you say now you have seen the form?
  (Mr Mandelson)  Did he, Mr McDermott, read it verbatim?

  136.  Yes. Is your recollection that because——
  (Mr Mandelson)  He did put the questions to me. He did say— He did ask me. He asked me questions. He did not read out all these words, no, because we would have been there probably half the morning. No, he did not do that but he did put the questions to me.

  137.  Also the timing of this, 30 August, which I think you have said was a Friday. I know from one of the other complaints that we have before us about the flights that you, in fact, went to Long Island just a couple of days after this, 2/3 September, something like that?
  (Mr Mandelson)  I may well have done. What happens is that—or what happened then, not now, was that in August other people go away for their holidays. The Leader of the party goes away, his press secretary goes away, everyone goes away in August. I stay at home in August. I then deal with whatever it was that summer and I cannot quite remember what awful things were happening that summer. I think Clare Short gave an interview to the New Statesman in which she denounced people living in the dark and saying that New Labour was just a fabrication and it was not real and then, as I say, that was one week's stuff that I dealt with and then the Conservative Party followed up with the devil's eyes advertisement, which produced another ten days of furore, all of which I dealt with by myself. Nobody else was there to deal with it. I dealt with it all. They then come back from their holiday, fit and tanned. I then go away, and this happened on three summers in a row, including the summer by which time I was a minister in 1997, when my over-active defence of the Government and lust for publicity led me to push myself forward time and time again, which apparently robbed me of my seat in the NEC elections of that year. All I can say is that when people go off on holiday and leave somebody to sweep everything up and cope with everything, it is very intensive, it is very pre-occupying, and you have a lot to juggle, you have a lot on your plate, and if I was overly pre-occupied with that rather than the detail of my mortgage application, then I am sorry. I do not excuse myself for it but that was the context.

  138.  But we have got this report, the report from Herbert Smith, saying it could be rushed. Obviously here you are at the end of August, you were going away in September and you were away for a fortnight or so?
  (Mr Mandelson)  I doubt very much if it was a fortnight. I am afraid I cannot remember the dates of my holidays.

Chairman:  Can we just disclose that it says "rushed towards the end". In their summary they just use the word "rushed" but in the full description it is "rushed towards the end".

Shona McIsaac

  139.  Moving on from that, you have made it perfectly clear what you thought of Alex Renton. Also a lot has been written in the press and certain allegations have been made about the mortgage in the book by Paul Routledge.
  (Mr Mandelson)  I have not read that book.

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