Select Committee on Standards and Privileges Minutes of Evidence

Examination of Witness (Questions 180 - 199)



  180.  When you borrowed the ten per cent——
  (Mr Mandelson)  Perhaps it would have been helpful if he had. Perhaps if he had said "For crying out loud, what the hell are you doing getting involved in that", but he did not. It was not his responsibility to do so, it was my responsibility.

  181.  So your first real commitment was to just the ten per cent. Did you realise, and please correct me if I have got this wrong, some of my colleagues know much more about the law than I do, once you had committed the ten per cent you stood to lose that ten per cent if the deal fell through? Before you accepted the cheque for ten per cent did you make sure that the other 90 per cent was there otherwise you could have lost the ten per cent and had no security to pay it back?
  (Mr Mandelson)  But it was there.

  182.  How did you know?
  (Mr Mandelson)  Because either I was going to be able to persuade my mother or Geoffrey's offer was always there. Geoffrey did not say "I will give you the money for the deposit but not for the completion". That conversation never took place between us.

  183.  A final point, one quick question, something Peter referred to and we have been a bit puzzled over. Switching back to the letter from Herbert Smith, the second paragraph on the second page of the deposition which has been referred to, where it says "Had he not reached this conclusion", that you still believed your mother was going to help you with the balance, "we are instructed that he would not have exchanged contracts." You say you did not say that. I think that fits in with the whole pattern of the paragraph. If you look at the paragraph it says "Mr Mandelson confirmed... Mr Mandelson explained... Mr Mandelson believed..." When we come to this sentence, which is a very important sentence, it says, "...we are instructed", in other words we are advised, "that he would not have exchanged contracts." You said in reply to Peter that you did not say that.
  (Mr Mandelson)  I do not recall saying that to them. If I said something that yielded that interpretation, although I am not absolutely sure what that would have been—— Herbert Smith were extremely thorough in this.

  184.  Was it, in fact, a correct statement? This is advice your solicitor, we think, gave to the building society's solicitor. It seems important in conditioning their thinking later on. Was it correct to say that?
  (Mr Mandelson)  I am not sure what the importance is of this.

  185.  It is the answer I want, I do not need to explain the importance to you because I will not know until I get the answer.
  (Mr Mandelson)  Could you put the question to me again.

  186.  Yes. What it says is had you not reached this conclusion, ie that your mother's change of mind was only temporary, "we are instructed", that is the building society's solicitor by, we believe, your solicitor, "that he would not have exchanged contracts". Was that a correct statement for your solicitor to make to their solicitor or not?
  (Mr Mandelson)  Do you mean that I would have pulled out of the sale having paid the deposit, having given the £40,000.

Mr Bottomley:  No, at the time of exchanging contracts.

Mr Williams

  187.  It says "...would not have exchanged contracts." "...we are instructed that he would not have exchanged contracts." What they are saying is that unless you were convinced that your mother was going to change her mind again you would not have got as far as the exchange and that was what they told the building society's solicitor. Is that the correct conclusion?
  (Mr Mandelson)  I do not see how it can be I am afraid.

  188.  That is fine. I am not disputing your honesty, I promise you.
  (Mr Mandelson)  What that seems to suggest is that unless I knew my mother was going to finance this I would not have exchanged.

  189.  Yes.
  (Mr Mandelson)  How can that be true because I did exchange and the deposit was made possible by Geoffrey Robinson?

  190.  Yes, but what they say is that "Despite his mother's change of mind, Mr Mandelson believed this to be only temporary and concluded that at completion she would put up the necessary monies."
  (Mr Mandelson)  What that means is that whilst Geoffrey put down the money for the deposit, it was still possible that my mother would provide the balance for the purchasing price, yes.

  191.  But it then goes on to say "Had he not reached this conclusion,..." which you clearly did, "he would not have exchanged contracts". That is not true, is it?
  (Mr Mandelson)  At what stage would I have——

Mr Williams:  What they are saying is——

Mr Campbell-Savours:  I wonder if we could let Peter read the paragraph himself, I think it would help him.

Mr Williams

  192.  Yes, please do, and take all the time you need.
  (Mr Mandelson)  Which page?

  193.  It is sheet three, the second paragraph. It is the second half of that paragraph that is the relevant bit.
  (Mr Mandelson)  No, what they are saying there is that before exchanging contracts I believed my mother would finance it and she wobbled but I was convinced I could persuade her back into her original position and if I had thought that I was unable to persuade her I would not have proceeded with the exchange of contracts.

  194.  That is what they are saying, yes.
  (Mr Mandelson)  I do not think that is true.

  195.  Neither do I. I do not mean that you have said anything wrong. I just wanted to clarify it. Peter made it earlier, because what it boils down to here is that your solicitor, acting on your behalf, gave them advice which was actually inaccurate. It was based on no advice you had given them and, indeed, is contrary to the whole stream of what you have been arguing, which was that you always knew Geoffrey was in the background and, therefore, you would have been able to able to go and exchange?
  (Mr Mandelson)  And that is right.

  196.  So all I wanted to clarify for my own satisfaction there is that whoever said this—and it looks as if it must have been your solicitor—must knowingly have misled the building society's solicitor. It is not your fault, it is nothing to do with you?
  (Mr Mandelson)  I do not accept that my solicitor would knowingly mislead anyone.

Chairman:  I think that concludes it unless there is some further supplementary. I would prefer if you keep them brief. We have had Peter here for well over two hours, which is a long time.

Mr Campbell-Savours

  197.  Chairman, I have one little thing to ask. Just to be fair to you as a witness, is there anything that you feel you want to say more about the Commissioner's report?
  (Mr Mandelson)  As far as the question of registration is concerned, I must say I feel pretty strongly that our understanding of registration and the rules governing registration is that they do relate to outside interests. I know the part of the Code that the Commissioner quotes about financially material benefits but the point is that Geoffrey Robinson did not give me this loan as a Member of Parliament, he gave it to me as a friend. If I had not been a Member of Parliament he would still have given me this loan, and I think with a new Commissioner coming in, as she is fully entitled to do and I entirely respect her position in this, making an interpretation of the Code which is tougher and harder than the previous interpretation and previous convention that is related to Member-to Member-transactions is not fair on me. I do not think it is right that I should be retrospectively censured or penalised. After all, when I discussed this with Mr Willoughby earlier this year he was quite clear in his view that Member-to-Member transactions of this sort did not need to be registered. It was only when the Commissioner wrote to me saying that I should, that I did. Secondly, the Commissioner in her report says that doubt existed about the registration of Member-to-Member transactions. In fact, the Commissioner, when she wrote to me on 19 January this year, said: "I accept that there is considerable doubt about this." We know that there have been other— I know because I have been told, for obvious reasons, that there were previous examples when Conservative Members of Parliament received perfectly legitimate loans from colleagues, from other Tory MPs. They did not register those and the Thomason case is not a precedent for this. That is quite different, as Mr Willoughby explained to me when I saw him earlier in the year. I think, having accepted that there is considerable doubt about the need to register, then to elide the Ministerial Code in with the House of Commons Code in order to catch me I just do not think is fair. I think at least it is highly arguable that you should elide the Ministerial Code with the House of Commons Code in the way that the Commissioner has done. After all, I am not being judged by this Committee in relation to the Ministerial Code. I am being judged in relation to the Commons Code. I have already said that I accept what my actions should have been in relation to the Ministerial Code but to transfer that to the Commons I just think is not reasonable. I do not think it is fair to be punished retrospectively and I think the Commissioner, in writing to me, using the words "considerable doubt" should continue to use the words "considerable doubt" and not lose the "considerable" in her report. As far as the building society is concerned, I would just want to emphasise three things. First of all, there is no evidence, there is no logic really, that the Britannia mortgage was anything other than a purely commercial loan. It was not a concession made to me and indeed, no evidence has been supplied by the complainant. In fact, no evidence has been supplied by any of the complainants. If you look at their letters all their letters are based on media reports, nothing else, nothing other than that, but there is no evidence that the building society acted in anything other than a commercial way and they assert that very vigorously indeed, and I would draw your attention to what Herbert Smith said on their behalf. The second is that I would draw your attention again to my answer to question No. 5, D5. It relates to a borrowing on the security of the property. The answer I gave, the information I supplied, in relation to that question is absolutely correct. It was correct at the time of completing the application form and my signing that and it has been true ever since. It was always unsecured. Thirdly, in relation to the Hartlepool property, the idea that I should knowingly not tell them about my constituency home—and it is so obvious and so well-known that I had a constituency home, that I should have imagined that I could hold that information from them, having had two mortgages perfectly happily in Hartlepool and London for all that time, I should think that if I did give them that information it might affect their judgment as to whether they should give me a loan or mortgage or not, it just does not stand up, and I think when you look at the facts surrounding the Hartlepool home, which are not set out in the Commissioner's report, incidentally—I do think that context might have been spelled out as I went into it in some detail—the fact that I was not asked a question, the fact that the building society form is not designed in a way to elicit that information, as they themselves have acknowledged to me, I think counts for something. It certainly does not mean that because I did not tell them about Hartlepool the building society were granting me a mortgage on favourable terms. That just does not stand up, not least because, as I said before, they did not have that information, so how could they be making an exception for me? I think that if anyone were alleging—and I notice the Commissioner is not alleging this—that I misled the building society, that I was dishonest in my actions, that I tried to cheat or defraud the building society in some way, then I think that would be a very serious charge, a very serious offence, which I would expect you to take very seriously and if you found it were true, then obviously I would have to be very severely censured and punished. But nobody is suggesting that I did knowingly mislead anyone or that I did act in any dishonest way. In effect, what the Commissioner is doing in her report, if I may say so—and I respect her right and role to do it, it is her job, not a nice job—is to try and trip me up or to knock me out on a technicality, and I think considering the price I have paid so far in losing my job in the Cabinet, in selling my house and all the ignominy that I have gone through, to find me again guilty of a technicality with all the consequences that would have, the media treatment of me and my standing in the House, I think would be very unjust.

Mr Bottomley

  198.  Are you aware that during your time here you have accused the Commissioner of both saying that you were dishonest and of saying that she has not.
  (Mr Mandelson)  I am sorry, I thought that I had said I acknowledged that the Commissioner had said that she was not saying that I knowingly misled people and that I had been dishonest. That was the basis of my remark to you.

  199.  Do you think that the mortgage application at the time you filled it in was complete and accurate?
  (Mr Mandelson)  Yes, it was.

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