Select Committee on Standards and Privileges Minutes of Evidence

Examination of Witness (Questions 160 - 179)



  160.  So on the basis of an Easter discussion with a nebulous—that sounds trivial, I am sorry, I do not mean it in that way—but a very generalised commitment to help, you then felt able to go all the way from that to assuming help in buying a £0.5 million house without ever mentioning to her or revealing to her, softening her reaction possibly, by telling her the scale of the property you were looking at, so surely you would be wasting your time, your and Geoffrey's time, in wandering around and looking at properties?
  (Mr Mandelson)  I cannot remember precisely the conversations that took place between myself and my mother, but I have with my mother a good enough relationship for me to say to her, "This process is just endless," or, "I have just gone in and out trying to find places and I cannot find anywhere," or "Everything is incredibly expensive," or "All these flats that I have seen are on very busy bus routes which stop in front of the window." I would tell her things like that.

  161.  Would you tell her that the area was too dear for you? Would you tell her that sort of thing?
  (Mr Mandelson)  I would not say it was too dear for me because that is a judgment, with respect, that you are forming.

  162.  No, I used your words. I wrote them down.
  (Mr Mandelson)  I have said to you, Alan, that with hindsight I regarded the whole thing as too expensive now. I am afraid I did not think that at the time. If I had thought that at the time, if I had had any idea what would flow from this, I would never for one moment have embarked on it. If I had thought that I was going——

  163.  No, we accept that.
  (Mr Mandelson)  But the scale of the thing is an integral part of that.

  164.  No, we understand how one gets immersed. Looking at property, one does.
  (Mr Mandelson)  It is very easy to talk with hindsight now about the situation, but anyway, you say, "Didn't you feel it was too dear that you were taking on a £0.5 million house?" When I embarked on this, and, indeed, right up until the August, it was not a £0.5 million house that I was buying.

  165.  So did you not then in the August think, "My gosh, I am thinking of buying a £0.5 million house. I had better tell mum because it might be too much"?
  (Mr Mandelson)  I did not tell her in those terms what the price was. I have already answered that question. I cannot answer it any differently.

  166.  Let us go to the conversation with Geoffrey. You had a discussion with Geoffrey about the purchase and, as you indicated, the meeting was not to discuss that. This arose in conversation and you told how you hoped to pay and he, you said, quite casually said if you needed any help he would be willing to help you. That again was one of your early remarks. That was before the two of you started going around looking at properties, was it?
  (Mr Mandelson)  Absolutely.

  167.  It was?
  (Mr Mandelson)  It was very early on when he said that he would— Yes, he did say that.

  168.  Yes, it is what you said he said and I am sure you have given us as accurate a recall as possible after this time?
  (Mr Mandelson)  After three years.

  169.  Yes, I recognise that. Do not worry, no-one is trying to trap you. All I was trying to find out was when about this might have been. Was this soon after the discussions with your mother? You now were going to start exploring the possibilities and Geoffrey agreed to look around with you. So would this also have been around the Easter/Whitsun sort of time?
  (Mr Mandelson)  The discussion with my mother?

  170.  You had a discussion with your mother at Easter and then at some time you told Geoffrey, as we know.
  (Mr Mandelson)  I went to see Geoffrey. I went to have dinner with Geoffrey. I am afraid I cannot remember the date. It was certainly round about May time. It would have been after the local government elections because I would not have done anything up until then. The period after then was sort of house period. I went to see Geoffrey, not about the house, it was about something else.

  171.  I accept that. You have made that clear and I think I made the point as well in the question I put to you. You and he then looked around. Now you must have been somewhat disappointed in liking the area to find that you were having to look at properties which you felt you might not be able to afford? Did not this arise at all in conversation between you as you were going round looking? Did you not say, "Gosh, look at the price of these. Who on earth can afford a place like that?"
  (Mr Mandelson)  I may well have done.

  172.  But that never triggered a repeat of the offer?
  (Mr Mandelson)  From Geoffrey?

  173.  Yes, the offer if you need any help?
  (Mr Mandelson)  Geoffrey's offer was there throughout.

  174.  No, but you said you went around on several occasions with him?
  (Mr Mandelson)  Yes.

  175.  All I am asking is, when you were going around together did you not then casually in conversation, as you would between friends, long-standing friends, say, "By God, this stuff is dear around here. I'm not sure I can afford it," or anything like that?
  (Mr Mandelson)  It was not like that. It was just— I should think I did say— I remember Geoffrey saying on more than one occasion, "These properties are very dear for what you are getting." You saw extraordinary flats for which they were asking a ridiculous sum of money. As it happens, I have now—I know this, it is very fresh in my mind because I have just gone through exactly the same experience all over again—I have decided not to move from Notting Hill, partly because I like it, partly because that is where I have my habits and my routines during the week when I am not in Hartlepool, and probably because there is a sort of mild bloodymindedness on my part. I have now bought, because I have sold the house in Northumberland Place, a flat in such a dilapidated state that it will take months to put right. Yes, I can afford it because it is obviously being sold at a rather knock-down price given its state, and yes, I shall be very careful to ensure that I can cover everything. Of course, in selling my house in Northumberland Place, because the market has just completely changed, I can pay back Geoffrey plus interest, I can pay back the Britannia and I can nearly buy my flat. I am very conscious of this, Alan. I really am very conscious of it, but I think the mistake I made was not choosing to live in the area, was not choosing to look for places to live and persisting in that. It was in the end—but this is a personal thing, it is not something which I think is a matter for the Ministerial Code or the Code of Conduct of the House of Commons, because I did not do anything wrong, in my view, in relation to either of those Codes, apart from the Ministerial Code and the appearance of conflict of interest, which I have already referred to. It was a personal thing. I did not think about it enough. I just got carried away by it. I also became impatient, wanting to deal with this and get settled before the run-up to the General Election started.

  176.  May I in passing then do, I hope, a favour to an old colleague, based on experience we have had in this House. Dale will remember it involved a Member no longer here on the other side. If you bought a knock-down house, a fall-down house at a knock-down price, the next thing they will be doing is chasing the local authority to see if you are getting any grants. I will give you that as a warning, just as a gratuitous, friendly hint.
  (Mr Mandelson)  I am not receiving a grant.

  177.  Geoffrey made this general and generous offer, and I can imagine it of Geoffrey, but there was nothing substantive until the Party Conference, there was this long, long gap.
  (Mr Mandelson)  He always made clear to me, not every day and not whenever I saw him obviously, and I was aware throughout that period that his offer was there, his money was there, he wanted to help if I needed it.

  178.  You have told us, and again from what I understand, when you went for your mortgage £150,000 was a lot of money. Did you not feel that it might be a bit presumptuous to think that you could impose on a friend for a third of a million pounds?
  (Mr Mandelson)  Yes, it did.

  179.  But you felt you could do that?
  (Mr Mandelson)  I did wonder whether it was too presumptuous which was why ideally I would not have borrowed the money from Geoffrey. Not because Geoffrey is not a good friend, not because he cannot afford it, obviously he can afford it, and not because his money is bad money. Whatever problems this Committee has had with Geoffrey, he is a very kind person and a very generous person and he is very supportive to his friends. On the other hand, if you say "what would you rather do, borrow from your family or borrow from anyone outside your family", however close Geoffrey is I would always say that I would prefer to borrow from within my family, and I did. But when we reached that stage it did not seem a lot of money to Geoffrey, it just did not seem a lot of money to him. He never quibbled about the money, not for a moment. The sum of it he never, never quibbled about.

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