Select Committee on Standards and Privileges Minutes of Evidence

Examination of Witness (Questions 140 - 159)



  140.  What is your relationship with him as a journalist? Is it similar to how you felt about Alex Renton?
  (Mr Mandelson)  Paul Routledge—I 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 have been.
  (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 point—this would have been December—did 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 read it?
  (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 event—he did not tell me he was doing it at the time—he came into the office here and went through all my files and all my personal papers trying to find a copy of the application form.

  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 "phut"?
  (Mr Mandelson)  It did not matter, did it? I was incinerated.

Mr Levitt

  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 mortgage?
  (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.

Mr Bell

  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 the first?
  (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 properties—Herefordshire and Hartlepool—I 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 the time.

Mr Williams

  157.  You said that the area was too dear for you in one of your answers.
  (Mr Mandelson)  Hindsight is a great thing though, Alan.

  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 would help.
  (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.

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