Examination of Witness (Questions 140
TUESDAY 18 MAY 1999
140. What is your relationship with him
as a journalist? Is it similar to how you felt about Alex Renton?
(Mr Mandelson) Paul RoutledgeI have not
read his book, nor would I. It is not a serious piece of work.
It is a very unpleasant, highly libellous hatchet job, which is
motivated purely by Mr Routledge's political views. He is extremely
hostile to me personally. I should think that his hatred of me
is only exceeded by his hatred of the Prime Minister, and that
is only exceeded by his hatred of the whole concept of New Labour,
and I do not intend to read his book. He has absolutely no regard
for the truth whatsoever, as you will discover when you read what
he writes about me in the Daily Mirror.
141. You say it is libellous. Would you
consider taking action against him?
(Mr Mandelson) No, I would not, absolutely not.
I would not give him that satisfaction.
142. Have you ever taken out a libel action
against any newspaper? You were saying earlier how your neighbours
are being pursued a lot and some of the scurrilous reports there
(Mr Mandelson) I have never made a move to sue
for defamation of me, although I have had plenty of reason and
opportunity to do so. I have not done so, partly because I do
not want to get into that sort of fight with the press, partly
because it is prohibitively expensive and partly because you end
up giving much more publicity to the allegations of the libel
than they would have had if you had not taken any action against
them, although one day I might.
143. Finally, Peter, when all these stories
broke at the end of last year, certainly a lot of the press were
bringing up the subject of the mortgage and how you got the money,
the house in Hartlepool and so on. I can recall one newspaper
showing pictures of every house you ever seem to have lived in
in your entire life. At that pointthis would have been
Decemberdid you not think at that point to try and get
hold of a copy of the mortgage application form just to see what
was in it, because you said that at the time you did not actually
(Mr Mandelson) It never occurred to me to want
to see the application form. The application form has never loomed
in my mind at all from the moment I walked out of the building
society. There is no question about it. No issue has ever arisen
in my mind about it.
144. Even though in the press stories in
December last year some reporters were saying that you had not
been truthful on that mortgage application form? Would you not
for peace of mind want to get hold of a copy of it just to reassure
yourself that everything was correct?
(Mr Mandelson) My research assistant, Ben, told
me after the eventhe did not tell me he was doing it at
the timehe came into the office here and went through all
my files and all my personal papers trying to find a copy of the
145. This is in December?
(Mr Mandelson) This was on the Monday evening.
When was the article? Tuesday, so it was Tuesday night and he
came in here, he told me subsequently, in the middle of the night
to try and find the application form so that I could refute what
was being alleged at the time. He did not find it. He did not
find it because I had never taken a copy of it and by then it
was just too late. I decided to resign and I decided to resign
that night and the following morning.
146. So obviously after that it just went
(Mr Mandelson) It did not matter, did it? I was
147. Three very quick ones, if I may. How
long have Wegg-Prosser and Farmer been your solicitors, roughly?
(Mr Mandelson) Three years.
148. So they have not done a house conveyance
for you before three years ago?
(Mr Mandelson) No.
149. But they would have known of the Hartlepool
(Mr Mandelson) Not necessarily because they did
not act for me when I bought Hartlepool and they would not have
known of my circumstances there necessarily unless they asked
me and unless I told them, but I do not recall that. I do not
recall a conversation about that.
150. Was a copy of the application form,
as far as you know, ever in the possession of your solicitors?
(Mr Mandelson) No.
151. Finally, what was your reaction, possibly
this morning when you saw it, to the Herbert Smith statement:
"There is no doubt that the firm let the Society down"
and Wegg-Prosser and Farmer "are in breach of their duties".
This is on page 7 of that report. They are fairly critical of
the way in which Wegg-Prosser and Farmer handled themselves. I
understand there were mitigating circumstances in this situation
but what was your reaction when you saw that sort of criticism?
(Mr Mandelson) I am afraid I did not read this
section to be honest, I cannot claim that I did. I think it is
unfair on Stephen Wegg-Prosser because he is a very fastidious
man, he is a conscientious man. He has a lot of loyalty to me.
He was loyal to me personally but I think he also felt that he
was doing almost a political job, he was carrying me. He is a
member of the Labour Party. I think he felt in a sense that he
was carrying me at a time when I was otherwise distracted and
properly focusing on the election and everything. I think he felt
that the least he could do was to make sure that this all ran
smoothly. I am talking about the house purchase now in the middle
of 1996 and that I did not have to be bothered with it. I think
that was an entirely laudable attitude for him to have. He is
a very nice man.
Mr Levitt: Thank you.
152. I will be very brief, Peter. Before
you thought of moving to West London you had these two properties
each with a mortgage on. When you bought the second can you remember
if on your mortgage application you mentioned the existence of
(Mr Mandelson) I am sorry, Martin, I cannot remember
how I filled in that form in 1991. Let me just think back. Where
was I coming from and where was I going to? In December 1989,
when I was selected, I owned one property and that was my home
in Herefordshire which I had owned, lived in and been devoted
to since 1984. In December 1989 I was selected. In January 1990
I started looking for a house to buy in Hartlepool. I found my
house, I bought that house. I would have referred, I assume, to
the existing property I had in Herefordshire. I did not need to
sell Herefordshire to buy Hartlepool. I needed though to sell
Herefordshire when I came to buy Wilmington Square. That was in
the autumn of 1990. I had two propertiesHerefordshire and
HartlepoolI sold Herefordshire in the autumn of 1990 in
order to buy Wilmington Square.
153. For most people, you and me included,
£150,000 is quite a lot of money so it was a considerable
transaction you were entering into. You would accept that you
did not fill in this form or allow it to be filled in in a casual
or offhand manner?
(Mr Mandelson) I do not think I was casual or
offhand, no, I do not think so.
154. I am not saying that you were. Was
this done with all seriousness as you knew what you were getting
into here, it was a lot of money?
(Mr Mandelson) It was a lot of money but then
I received a lot of comfort from people at the time who were my
cushion and my support. One of the reasons I resigned
The technical reason why I resigned was because in terms of the
Ministerial Code I had allowed the appearance of a conflict of
interest to be created. The Ministerial Code is quite clear on
this, it is not simply a conflict of interest, it is the appearance
of a conflict of interest. That was technically why I resigned
even though my Permanent Secretary was prepared to put his hand
up and say "No, Peter stepped aside from Geoffrey Robinson's
affairs, he was entirely insulated from Geoffrey Robinson's affairs
in the Department and there was no conflict of interest".
I put it to him that was not the point, the point was the appearance.
The underlying reason why I resigned was because I had a misjudgment
in getting into this in the first place. I do not believe I did
anything wrong in the sense that I do not think I broke any rule.
I certainly did not knowingly mislead. I did not engage in any
contact with the building society with an intention to mislead
them. I certainly do not believe that I transgressed the Code
in the sense that you should at all times be as open as possible
in your affairs. I am open in my affairs. Actually I think possibly
I have been prised open quite enough, thank you. I do not go around
misleading people or withholding information from them. That is
why I strongly refute the conclusion that the Commissioner has
reached in her report that I should be censured because I did
not tell the truth and because I was not open in my affairs. I
entirely refute that and vigorously so and I will defend myself
against that. Nonetheless, although I did not do anything wrong
in what I did, it was a misjudgment. I got into a situation that
involved too much money. It was too much above my means and it
placed me under an obligation in a sense which I should not have,
not as a politician, not as a Member of Parliament, not as a Minister
but just as an ordinary person, as a human being. Okay, Geoffrey's
loan to me was entirely unsecured. He said to me "Don't worry,
this money is nothing at all to me. You can pay it back when you
get into your inheritance or you write your memoirs". I remember
him saying that to me. All that is true and I could have done,
and I might do. It was just too big a situation to get into.
155. I have only one other question. Do
you yourself personally believe that how a Member of Parliament
fills in a mortgage application form is a matter of legitimate
interest to anyone other than the borrower and the lender?
(Mr Mandelson) For an ordinary member of the public,
no, I do not think it is.
156. For a Member of Parliament?
(Mr Mandelson) For a Member of Parliament? You
could make a technical case in terms of the Code, as the Commissioner
has, that a Member of Parliament has to be as open as possible
in the conduct of all their affairs. I do think it is stretching
it a bit in relation to the filling out of a mortgage application
form where I did not knowingly mislead the building society, I
was not dishonest with the building society and, most importantly,
I did not say anything or not say anything to the building society
that would make any material difference to whether or not they
would give me a mortgage. That was the case. They have said so
and they have made it absolutely clear. When they got the information
about my loan from Geoffrey they went back and reviewed both their
procedures and the conclusion they reached in giving me a mortgage
and they concluded that they would have done exactly the same
in giving me that mortgage even if they had that information at
157. You said that the area was too dear
for you in one of your answers.
(Mr Mandelson) Hindsight is a great thing though,
158. I would know it was too dear for me
before I bought it, I must admit, and I think most people would
if they were paying that much money for a house. Half a million
pounds is a lot of money. One would have expected a degree of
trepidation early on. I would have been quivering at the thought
of paying that much money for a property. You had a discussion
with your mother back at Easter, you told us, but you did not
discuss how much the property would cost and she agreed that she
(Mr Mandelson) I had discussions with my mother.
It was not just one discussion. I was telling her what I was doing.
I go to visit her.
159. That is where I am going next, in fact,
because that is helpful, because in your initial comment you told
us that, I gather, your first discussion with your mum was at
the Easter and what you said was: "We did not discuss how
much the property would cost but she would agree to help,"
which is what a family would try to do. You then went on to say,
"There was no idea of the scale needed." That was at
Easter. My question was going to be, and in a way it is still
going to be but it is, interestingly, more relevant to what you
have just sai: did you not, therefore, alert her before going
ahead to what you now discover to be the scale of buying a property
in an area that was too dear for you?
(Mr Mandelson) No, I did not.