Examination of Witness (Questions 160
TUESDAY 18 MAY 1999
160. So on the basis of an Easter discussion
with a nebulousthat sounds trivial, I am sorry, I do not
mean it in that waybut 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
162. No, I used your words. I wrote them
(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
(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
(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
nowI know this, it is very fresh in my mind because I have
just gone through exactly the same experience all over againI
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 endbut 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
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
(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
(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
(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.