Mr Gordon Brown - Standards and Privileges Committee Contents

Written evidence received by the Parliamentary Commissioner for Standards

1.  Letter to the Commissioner from Mr Greg Hands MP, 1 February 2008

I would like to draw your attention to a serious matter pertaining to the Code of Conduct for Members.

According to the published accounts of the Kirkcaldy and Cowdenbeath Constituency Labour Party for 1 January—31 December 2006, Rt Hon Gordon Brown MP receives rental income on a quarterly basis for the use of space in his Parliamentary Advice Centre. Please see documentation attached, which is downloaded from the Electoral Commission website.

However, according to the Register of Members' Interests, Rt Hon Gordon Brown MP has never declared any rental income from this source. I also believe that it was against the rules, which have been in place since 2002, to sublet an office which is paid for by parliamentary allowances.

In addition, Rt Hon Gordon Brown MP owns a property [in Westminster]. He has never declared any rental income from this property in the Register of Members' Interests.

According to the Land Registry records, Rt Hon Gordon Brown MP has recently transferred the ownership of this [Westminster] property to his wife.

These facts raise a series of serious questions that I believe need to be urgently investigated and clarified:

Under the terms of the Code of Conduct for Members, should Gordon Brown MP have declared this rental income from the Kirkcaldy and Cowdenbeath Constituency Labour Party in the Register for Members' Interests?

Has the income received by Rt Hon Gordon Brown MP through the sub-letting arrangement been offset against his parliamentary allowance for constituency office space?

Does Rt Hon Gordon Brown MP receive other rental income from the use of his Parliamentary Advice Centre? If so, should this income have been declared in the Register for Members' Interests? What action will be taken in light of the prima facie breaking of the strict parliamentary rules relating to the subletting of offices?

Does Gordon Brown MP currently receive rental income from the property he owns [in Westminster]? Has he received rental income from this property at any point since entering Parliament in 1983? If so, should this income have been declared in the Register for Members' Interests?

It has been reported that Gordon Brown MP has transferred the ownership of the [Westminster] property to his wife. Is any rental income received on this property since the transfer declarable in the Register for Members' Interests?

I look forward to receiving a response from you at the earliest possible opportunity.

1 February 2008

2.  Extract from the Accounts of the Kirkcaldy and Cowdenbeath Constituency Labour Party for 1 January to 31 December 2006

Income and expenditure:

…

We rent a space within the Parliamentary advice centre of Marilyn Livingstone MSP and Gordon Brown MP. We pay rent to the Scottish Parliament and Gordon Brown MP, quarterly.

…

3.  Letter to Rt Hon Gordon Brown MP from the Commissioner, 11 February 2008

I would be grateful for your comments on a complaint I have received from Mr Greg Hands MP in respect of rental income from the use of accommodation in your Parliamentary Advice Centre.

I attach a copy of Mr Hands's letter of 1 February (but not the downloaded information from the Electoral Commission website). In essence, Mr Hands's complaint is that you have sublet accommodation which you lease and pay for out of your parliamentary allowances contrary to the provisions of the Green Book relating to the Incidental Expenses Provision. He alleges that you have failed also to register any income received in the Register of Members' Interests.

I have decided that Mr Hands has not provided me with sufficient evidence to merit an inquiry into the references he makes to a property in [Westminster]. If he were subsequently to provide me with additional evidence, I would of course consider it.

As you know, the Code of Conduct for Members of Parliament provides in paragraph 14 as follows:

"Members shall at all times ensure that their use of expenses, allowances, facilities and services provided from the public purse is strictly in accordance with the rules laid down on these matters, and that they observe any limits placed by the House on the use of such expenses, allowances, facilities and services."

The Green Book on Parliamentary Salaries, Allowances and Pensions sets out in Section 5 the arrangements for the Incidental Expenses Provision. Paragraph 5.12.7 deals with sublets as follows:

"In view of the practical difficulties which may arise, you may not sublet accommodation which you lease and pay for out of the allowances. [Exceptions may be allowed for sublets existing in January 2002 when this restriction was introduced.]"

Paragraph 5.12.6 of the Green Book reads:

"Secure separate billing arrangements wherever possible. Where separate billing is not feasible you must lodge with the Department a copy of the agreement setting out how the costs will be divided. If one Member agrees to meet the costs in full initially, and to recover from the other parties to the arrangements you must lodge with the Department the agreement to do this. The sums recovered must be remitted to the Department for credit to the incidental expenses provision."

The Guide to the Rules relating to the conduct of Members sets out the provisions for the registration of Members' Interests. The general definition of the Register's purpose is in paragraph 9 as follows:

"The main purpose of the Register of Members' Interests is "to provide information of any pecuniary interest or other material benefit which a Member receives which might reasonably be thought by others to influence his or her actions, speeches or votes in Parliament, or actions taken in his or her capacity as a Member of Parliament." The registration form specifies ten Categories of registrable interests which are described below. Apart from the specific rules, there is a more general obligation upon Members to keep the overall definition of the Register's purpose in mind when registering their interests."

Category 8 of the Register covers:

"Any land or property—

a)  Which has a substantial value (unless used for the personal residential purposes of the Member of the Member's spouse or partner), or

b)  From which a substantial income is derived.

The nature of the property should be indicated."

Paragraphs 38 to 41 provide further information about this category.

Category 10 deals with miscellaneous registration as follows:

"Any relevant interest, not falling within one of the above categories, which nevertheless falls within the definition of the main purpose of the Register which is "to provide information of any pecuniary interest or other material benefit which a Member receives which might reasonably be thought by others to influence his or her actions, speeches, or votes in Parliament, or actions taken in his or her capacity as a Member of Parliament," or which the Member considers might be thought by others to influence his or her actions in a similar manner, even though the Member receives no financial benefit."

In the light of this information and Mr Hands's complaint, I would be grateful for your comments. It would be helpful in particular to know:

the date on which any current subletting arrangement for your Parliamentary Advice Centre was instituted; and information about any previous subletting;

to whom any sublet or lets have been made;

the basis of any rental agreement (e.g. was it at market rate?);

the use to which any income from the sublets has been put - in particular, if it has been received, whether it has been used to offset claims on your parliamentary allowances, in particular the Incidental Expenses Provision;

what consideration was given to the possible need to register income received as a result of any such sublets in the Register of Members' Interests, what advice you may have taken and reasons for the conclusion you reached.

Any other comments you may wish to make would be very welcome.

I enclose a Note setting out the procedure I follow. I have written to Mr Hands to let him know that I have written to you about the complaint in respect of rental income for your Advice Centre but not in respect of any [Westminster] property. If you wish to have a word about any of this, please contact me at the above address or by telephone.

I am copying this letter with Mr Hands's letter to the Department of Resources for information since I may need to consult them once I receive your response. I would be grateful for your help on this matter.

11 February 2008

4.  Letter to the Commissioner from Rt Hon Gordon Brown MP, 25 March 2008

I thought it would be helpful to set out all the facts, as well as addressing the specific questions you have raised.

From 31 May 2005 onwards, I became Member of Parliament for the Kirkcaldy and Cowdenbeath constituency following boundary changes and began renting an office under a joint lease with Ms Marilyn Livingstone MSP at 3 East Fergus Place, Kirkcaldy, Fife KY1 1XT, as a Parliamentary Advice Office.

This is a second office, in addition to the main constituency office in Cowdenbeath which I also rent, providing a service to the other part of my widely spread constituency.

The Kirkcaldy lease was organised by Marilyn Livingstone MSP working with my assistant [ ] on behalf of us both. The lease is entirely in line with the rules set by the Scottish Parliament. At all times there has been a scrupulous determination to ensure public funds are protected and used in the proper, as well as most cost effective, way

This has included:

Hiring an independent solicitor, that is, a solicitor who is not the solicitor of myself or Ms Livingstone, to draw up the lease with the Labour Party. He can provide verification of the independent process. His services were paid for by myself and Ms Livingstone.

Hiring an independent surveyor to calculate the right level of rent based on the office plans of the building.

It was on this basis that Ms Livingstone arranged that a portion of the Kirkcaldy office space which was not needed by my Parliamentary Advice Office or by herself, was then in turn paid for by the Kirkcaldy and Cowdenbeath Constituency Labour Party at the independently assessed rent amounting to a charge of £2,519.00 per annum. Through the work of the independent solicitor and the independent surveyor, the charge was based on the market rent for the number of square feet occupied by the Party. This allowed us to reduce the amount of rent sought from our respective Fees Offices and to ensure, to the benefit of public funds, the most cost-effective use of public money.

From the outset, my Parliamentary Advice Office was meticulous in ensuring that the share of the money received from the constituency party would be deducted from the amount which was then claimed from the Fees Office for the cost of running the constituency office. In each relevant statement to the Fees Office it was made explicit - in writing - that deducted from the claim for rent was £1259.49 per year 'paid from the Labour Party for rent of office'. So on all relevant claims the Fees Office was explicitly informed of the rental arrangement.

The portion of rent relating to that part of the office occupied by the constituency party was, of course, explicitly excluded from any financial claim on public funds. The Parliamentary Advice Office believed that this action would ensure that there was no question of this arrangement breaching the rules designed to prevent office accommodation funded from the public purse being sub-let for other purposes, since the portion of rent received was at all times explicitly not included in any claim made to the Fees office on public funds.

The lease itself was examined by and agreed only after discussion with the Scottish Parliament. Ms Livingstone was the principal organiser of the lease. She took the initiative in the detailed work and showed the lease to—and sought the advice of—the Scottish Parliament's officers for the arrangements made. Advice given was accepted by Ms Livingstone and my office assumed that, having followed the advice of these officials, all arrangements were in order. The office arrangement was also declared in the published accounts of the Labour Party and known to local people because the offices were a publicly advertised venue for parliamentary advice and for meetings.

In January 2006 the Fees Office requested a copy of the lease. This was duly sent to the Fees Office. However, at no time was my office advised that the arrangements were inappropriate. The submission of the lease came on top of the declaration in relevant claims forms made by my office, which stated in precise terms that it had had deducted from it '£1259.49 paid from Labour Party for rent of office'. Given this, and the fact that Ms Livingstone's arrangements were clearly acceptable to the Scottish Parliament, there seemed no reason to believe the arrangements which protected public funds were anything other than satisfactory.

In December last year, my office was contacted by a newspaper, wrongly alleging that public money was being diverted to the local Labour Party. In the course of correcting that allegation, contact was made with the Fees Office to seek a statement from them confirming their satisfaction with the arrangements.

At that point only, the Fees Office advised that, despite my office having deducted all rental income from the amounts previously claimed from them, the arrangements should be re-organised. My Advice Office acted on this advice immediately and terminated the lease. The future lessee of the Parliamentary Advice Office is Marilyn Livingstone MSP alone. The Scottish Parliament proposes to pay the rent and receive any income. The Scottish Parliament will now bill the Westminster Fees Office directly for my share of the payment. I believe these arrangements are acceptable.

Paragraph 5.12.7 of the Green Book refers to the possible issue of 'practical difficulties' in the event of a sub-let. I am not clear what were envisaged as the "practical difficulties" to which it refers. I can assure you that, in this case, no such difficulties have arisen. As I have explained, the amount charged to the constituency Labour party was independently determined by both an independent lawyer and an independent surveyor and set at a market level.

The appropriate amount was deducted from the claim made from the Fees Office. The Fees Office claim stated this in explicit terms. There was no question of any misuse of public funds and no question of the local Labour Party benefiting in any way from public funds. The arrangement was approved by the Scottish Parliament, who advised on it. The lease, with all the details of the arrangements, has been with the Fees Office since January 2006. For these reasons, no one involved in the arrangement at the time thought there had been any breach—and when the lease was sent to the Fees Office in January 2006 no one asked for a change to be made. All relevant claims also contained explicit declarations of the rental deduction. Again, there was no request to explain or re-examine the arrangement.

I hope this information makes clear that in all respects we sought to ensure that no improper use or diversion of public money occurred, and indeed that none has occurred. All those involved believed that the high standards of the House had been observed. I hope you will agree that the fundamental requirement—that there be no misuse of public funds—has at all times been met.

On a related matter, consideration was given, following internal discussion within the Parliamentary Advice Office, as to whether the rental income should be listed in the Register of Members' Interests. The view was taken that, because it was an arrangement resulting in no personal gain whatsoever, it need not be registered. Of course, no loss to public funds was involved either. Thus it was also quite apparent that the arrangement would have no influence on the way I carried out my parliamentary duties. In addition, as I have already said, the rent was recorded in the published accounts of the constituency Labour party and it was also explicitly included as a 'deduction' in claims made to the Fees Office. Following a further media enquiry on 1 February 2008, I asked that the position as to registration be ascertained. As a consequence, advice was taken from the Registrar on the telephone who confirmed that the interest was indeed not registrable.

I note also that you have decided not to inquire into the allegation around a property in [Westminster ] ….

I hope you have the information that you require. Please let me know if I can be of any further assistance.

25 March 2008

5.  Letter to the Acting Director of Operations, Department of Resources, from the Commissioner, 25 March 2008

I would welcome your comments on a complaint I have received in respect of the arrangements Mr Gordon Brown made in renting his Parliamentary Advice Office in Kirkcaldy, Fife. I sent you a copy of my letter to Mr Brown of 11 February with the letter from the complainant, at that stage for information. I attach a further copy of those letters, together with a copy of a letter of 25 March from Mr Brown responding to my letter.

I would welcome your comment on this complaint and, in particular, on Mr Brown's response. It would be helpful to have an account of the Department's reported involvement in discussions about the arrangements for the Kirkcaldy Advice Office from 2005, and the advice which was given. I would also welcome your views on whether the arrangement met the requirements of the Green Book in May 2005, in January 2006, and now. Your comment on the reported contact with the Department in December 2007 would also be welcome, as would your comments, of course, on any other aspect of the complaint or the arrangement in respect of Mr Brown's use of the Kirkcaldy Parliamentary Advice Office.

25 March 2008

6.  Letter to the Commissioner from the Director of Operations, Department of Resources, 25 April 2008

Thank you for your letter of 25 March 2008 addressed to [the Acting Director] about the above complaint. This has been passed to me for reply as I have retained responsibility for this particular case. I am sorry for the delay in replying.

You have asked for comments about the complaint itself and Mr Brown's response of 25 March 2008. In particular, you have asked about discussions had with, or advice given, by this Department about the leasing of the Kirkcaldy office, about the Members' arrangements compared to the requirements outlined in the Green Book, and about the contact between this Department and Mr Brown in December 2007.

Mr Brown began renting his second office in Kirkcaldy on 31 May 2005, which he did jointly with Ms Marilyn Livingstone MSP. At that time the rules were set out in a new Green Book issued to returning Members on 6 May, immediately following the 2005 General Election. The relevant rule in that edition stated that Members could not sublet accommodation to a third party (page 15, para. 5.12.7). Technically, this restriction had existed since July 2004 when the online version of the Green Book was amended accordingly. (We no longer update the online version without issuing a hard copy at the same time.) This was a change to the position that had existed since January 2002 at which time the Department had strongly advised against sub-letting, but it was not actually proscribed. The advice in the current edition of the Green Book (July 2006) remains the same as that available from July 2004.

Mr Brown breached the Green Book rules when he agreed to the sub-lease of his office organised by Ms Marilyn Livingstone MSP in September 2005. Neither he nor his staff consulted this Department prior to setting up his Kirkcaldy office.

Nonetheless it is clear that the arrangements for the sub-lease were carried out professionally and, from the documents we hold, it seems that the agreement properly reflected the space occupied by the Cowdenbeath Labour Party and that the rent was a true market value.

Mr Brown states that the money paid by the Labour Party in accordance with the sub-lease, were deducted from his own Incidental Expenses Provision claims thereby ensuring there was no subsidy to the Labour Party. I can confirm that this was the case and was indeed noted on the three C1 claim forms received from him in April 2006, April 2007 and January 2008.

Mr Brown further states that he submitted a copy of the lease in January 2006. Our files do not indicate that this was received, but we were conducting a special one-off exercise at that time requesting leases not held and I could not rule out that it went astray at some point. In January 2007 we re-contacted Mr Brown's office to request a copy of the Kirkcaldy lease; this was duly received and filed accordingly. Unfortunately the member of staff did not spot that the lease included a sub-lease with the Cowdenbeath Labour Party. Had it been spotted, Mr Brown would have been asked to take steps to remedy the position.

It was when Mr Brown's office contacted us in December 2007 about the allegations made by the press that it became apparent to us that the lease contained a sub-lease. I can confirm Mr Brown's statement that discussions then took place with Departmental officials, including myself, and that he and his staff took swift action to put the matter right. Ms Marilyn Livingstone MSP is now the sole lessee, with Mr Brown being charged, via the Scottish Parliament and this Department, for the accommodation and services that he utilises in Kirkcaldy. Similarly, it is my understanding that the Labour Party will have an arrangement to reimburse Ms Livingstone for the space they occupy. In other words the position has been fully regularised.

It is worth recording that the 2004 Green Book rule proscribing subletting is a little unusual. The Green Book generally permits working with political parties or other politicians provided the arrangements are transparent and the costs fairly divided to avoid cross-subsidy. For example, Members can themselves sublet offices from a political party, share the costs of a newsletter with another elected politician and use their offices during a general election. However paragraph 5.12.7 was changed to its current formulation following a high-profile case which created adverse publicity for the House. I can therefore understand how, having overlooked the rule change, Mr Brown or his staff might, having met the transparency and fair cost criteria, reasonably have thought everything was in order when agreeing the sub leasing arrangement in 2005. They would have been further reassured of the position because the Department did not raise concerns when the lease was sent (or resent) in January 2007 or when the claims were submitted showing a deduction of monies received.

In my view this was an inadvertent mistake by Mr Brown, no personal gain or gain by any party was involved and the Member acted quickly to put it right. I am satisfied that no further action is required by this Department. I can also confirm that Mr Brown and his staff have been helpful throughout and have acted on our advice at all times.

I enclose extracts from the relevant Green Books and a copy of the circular sent to Members in January 2002 [not included in the written evidence]. If you require any further information or clarification please let me know.

25 April 2008

7.  Letter to Rt Hon Gordon Brown MP from the Commissioner, 30 April 2008

I have received the attached response of 25 April from the Director of Operations in the Department of Resources about the complaint made against you by Mr Hands in respect of your subletting of your Parliamentary Advice Centre in Kirkcaldy.

As you will see, his conclusion is that, in his view, you breached the Green Book rules when you agreed to the sub-lease of your office organised by Ms Marilyn Livingstone MSP in September 2005. He notes that he believes the position has since been fully regularised.

I have decided that I should prepare a memorandum for the Committee on Standards and Privileges about the complaint. I should say that no inference should be drawn from this decision about my likely conclusions. Before preparing my memorandum, the factual sections of which I would show to you, I would welcome any further comments you may wish to make on the complaint or on the Director's letter.

In particular it would be helpful to know whether you accept his conclusion that the rules were breached. It would be helpful also for me to know the date on which the new arrangements you have implemented came into effect.

I am grateful to you for your continued help in this matter.

30 April 2008

8.  Letter to the Director of Operations, Department of Resources, from the Commissioner, 30 April 2008

Thank you for your letter of 25 April responding to the complaint against Mr Gordon Brown in respect of his subletting of his Parliamentary Advice Centre in Kirkcaldy.

I was most grateful to receive this. I have sent a copy of your letter to Mr Brown inviting any further comments and informing him that I propose to prepare a memorandum for the Committee on Standards and Privileges about this complaint.

I have also asked him to let me know when the new arrangement he has implemented came into effect. It would however be helpful to know whether Mr Brown has informed the Department of the implementation date of the new arrangement and when the new billing arrangements started or are expected to start.

Thank you again for your help on this matter.

30 April 2008

9.  Agreed Note of Meeting with Rt Hon Gordon Brown MP, 14 July 2008

Present: Rt Hon Gordon Brown, MP (GB), Mr John Lyon (JL), Parliamentary Commissioner for Standards; Political Secretary to the Prime Minister and Registrar of Members' Interests

GB referred to his previous letter to the Parliamentary Commissioner of 25 March 2008. He apologised if he had inadvertently breached the House's rules.

GB explained that he had two constituency offices and that the one in Kirkcaldy was the secondary one, opened following the 2005 boundary changes. He had himself made the arrangements in respect of his first, main office. While, he was, of course, a party to the arrangements for the Kirkcaldy office, the lease had been organised by the Member of the Scottish Parliament (MSP) with whom he jointly held it. The situation in respect of this office was probably unusual in that it involved a joint lease.

It had never occurred to GB that there was an issue in respect of subletting the office.

GB stressed that he did not believe there had been any impropriety or attempt to breach the spirit or letter of the law. His office had meticulously ensured there was no call on public funds or personal gain involved.

GB had provided the Fees Office (now known as the Department of Resources) with the lease and with regular statements showing the deduction from the rental claimed of the payments in respect of the sublet. He would have expected to be informed if there had been a problem. He believed he had sent them the lease in January 2006, and was puzzled that there appeared to be a debate about when it had been received. The Director of Operations in what was now the Department of Resources appeared to accept that it had been sent in January 2006, but that it might have gone astray. The Department had re-contacted GB in January 2007 asking him to provide a copy of the lease, and this had been sent and received. Only when asked in December 2007 did the Fees Office suggest there might be an issue with the arrangements, and he had acted quickly to change the lease.

GB pointed out that the MSP had checked the rules of the Scottish Parliament, which did not prohibit sub-letting.

GB suggested that the Green Book provision about subletting was not quite clear. He suggested that the wording might be clarified.

GB stressed that no-one had benefited financially from the arrangement. There was no financial benefit to him and therefore nothing for him to register in the Register of Members' Interests. There had been no loss to public funds or any diversion for a party political purpose. The solicitor and surveyor used had been entirely independent. If JL wished he could be provided with the names of the independent solicitor and surveyor involved in reaching the terms of the sub-lease.

GB thought that this case was quite different from the case which had given rise to the rule against subletting, in which the argument was about whether money had been returned to the public purse. He had always been meticulous in his efforts to protect public funds.

JL asked whether he was right in thinking that in making the arrangements GB's office and the MSP had overlooked the requirement to check the various iterations of the Green Book. Had anyone checked the Green Book or had the need to check it been overlooked?

GB said that his MSP colleague had led the work. As far as he was aware, the need to check the Green Book had been overlooked. The Scottish Parliament had no similar rule over subletting; many of its rules were borrowed from Westminster, but this was not one of them. The Department of Resources had not questioned the arrangement until December 2007, following which action had been instituted immediately to change the arrangement.

In 25 years as an MP he had never had such an issue. He had always meticulously protected public funds.

JL asked from whom the accommodation was leased. [The political secretary] said that it was leased through solicitors. He would confirm the ultimate ownership.

JL confirmed that he had all the information he needed on the question of registration in the Register of Members' Interests. He did not need to ask GB for further clarification on that issue.

GB asked if JL was satisfied that the situation had been rectified. JL said that he had taken careful note of the actions GB had taken to ensure the current arrangements complied fully with the rules of the House. He understood that the first claim to the Department of Resources under the new arrangements was to be submitted, and the payment made, in June 2008. He would need to check that that had been done.

The Commissioner explained the process he followed in the handling of complaints and its application to this complaint.

GB repeated that he apologised if there had been any inadvertent breach of the rules in the arrangements.

It was agreed that [the political secretary] would provide the name of the ultimate owner of the property and confirm that the first payment under the new arrangement had been made by the Department of Resources.

14 July 2008

10.  Letter to the Commissioner from the Director of Operations, Department of Resources, 25 July 2008

We spoke about the above case in April and I e-mailed information to you on 22 April. You subsequently asked that I confirm the matter in writing. Your need for confirmation was overlooked by me and I am very sorry that I am only now doing so.

The Department received the revised lease for 3 East Fergus Place, Kirkcaldy on or just before 22 January 2008. I then sought legal advice to assure myself that the requirements of paragraph 5.12.7 of the Green Book were met. The Legal Services Office was able to provide this assurance.

I indicated to you in April that the next payment due was for the quarter beginning 1 April 2008. Payment on Mr Brown's behalf to the Scottish Parliament was made on 2 June for that period. I can confirm that Mr Brown has claimed the proportion of the rent that I would have expected taking account of the interests of Ms Livingstone MSP and the Cowdenbeath Labour Party as set out in the lease.

Please let me know if you need further information.

25 July 2008

11.  Letter to the Commissioner from the Director of Operations, Department of Resources, 2 September 2008

Thank you for your letters of 29 July and 12 August. The second of these enclosed a copy of the lease document for Mr Brown's constituency office. You sought information about the Department of Resources holdings of similar documents and any other advice we could offer about the landlords in this arrangement.

The Department holds what appears to be a near final draft of the lease document for 3 East Fergus Place. It is substantially the same as the one you have received from the Political Secretary at No10. I have spotted a few minor differences between the final version and the one we hold, including: extra addresses of the Head Landlords; actual dates included in your version where in ours they were to be added; a minor variation to the commencement of the rental payments under this agreement; and deletion of a clause concerned with limitation of liability. There may be some other small changes but my judgement is that sight of this final document does not affect eligibility for reimbursement of costs under the rules in the Green Book.

You have also asked about any knowledge we may have about ownership of the property in question and whether this may affect eligibility for reimbursement under the rules. When I received the draft lease document I sought advice from the Legal Services Office in the House, principally about whether the provision in 5.12.7 of the Green Book—which provides that a Member may not sublet office accommodation paid for from the parliamentary allowances - was met. The Legal Services Office were able to provide that assurance (a copy of their memo to me is attached[30]). Neither the LSO nor I had cause to consider at any time whether the Head Landlord or Landlord of the property had any link to the constituency Labour party: there was nothing to indicate this might be so. From the documentation the Department holds and from our discussions with Mr Brown's staff we have no reason at all to suspect any such relationship; there was nothing to put the LSO on inquiry as to this aspect when they reviewed the lease. With this in mind and on the basis of the documentation held, I think it would have gone beyond what was necessary for the Department to do to verify eligibility for payment to make such enquiries of the Member.

2 September 2008

12.  Letter to Rt Hon Gordon Brown MP from the Commissioner, 23 September 2008

I am writing to let you have a copy of the advice I have received from the Director of Operations in the Department of Resources in the House of Commons in respect of the lease of your constituency office in Kirkcaldy.

As you know, I am considering a complaint against you in respect of the arrangements you made from May 2005 to early 2008 for subletting accommodation you used for your constituency office in Kirkcaldy. I was grateful for the opportunity of our discussion on 14 July and for your help in agreeing the note of that meeting. I have now written to Ms Marilyn Livingstone MSP asking her to confirm your understanding that the need to check the Green Book had been overlooked.

You kindly gave me a copy of the current lease for your Kirkcaldy office. I have shown this to the Department of Resources and they have checked it against the draft which they received from you in January 2007. I also asked them to confirm that the head-landlord and landlord of the property do not appear to have any link to your constituency Labour party.

I attach a copy of the Director of Operations' letter of 2 September responding to these points. (I have not enclosed the legal advice received by the Department.) I would welcome any comments you may wish to make on this matter. I appreciate the pressures on your time and suggest that unless I hear from you or your office within the next three weeks, I may take it that the Director of Operations' assumption is correct that neither the head-landlord nor landlord of the property has any links with your constituency Labour party.

I am grateful for your help and that of your office on this matter.

23 September 2008

13.  Letter to Ms Marilyn Livingstone MSP from the Commissioner, 18 September 2008

I would welcome your help on one point which has arisen during the course of my inquiry into a complaint against Mr Gordon Brown MP in respect of the arrangements he made with you from May 2005 for subletting the accommodation you both use for your constituency offices in Kirkcaldy.

In essence, the complaint is that Mr Brown has sublet accommodation which he leases and pays for out of his Parliamentary allowances contrary to the rules of the House of Commons.

At this stage, and up until the time I conclude any work, my inquiries are conducted on a personal and confidential basis and the information I receive is subject to Parliamentary privilege. I would ask therefore that you treat the information which follows in the strictest confidence.

The House authorities here have advised me that the arrangements Mr Brown made for subletting the accommodation in Kirkcaldy were a breach of the rules of the House (although I understand that they did not breach the rules of the Scottish Parliament). Mr Brown has told me that while he was party to the arrangements for the Kirkcaldy office, the lease was organised by yourself. I understand from him that as far as he is aware, the requirement to check that the arrangements for subletting part of the property were consistent with the House of Commons Green Book on Parliamentary Salaries, Allowances and Pensions was overlooked. He has noted that the Scottish Parliament has no similar rule over subletting: many of its rules are borrowed from Westminster but this was not one of them.

I would be very grateful if you could confirm Mr Brown's understanding of the position. Any other comments you wish to make would, of course, be very welcome.

I attach a note on the procedures I follow when seeking evidence from witnesses. It is likely in this case that your response will need to be included in an annex to the memorandum which I shall be preparing for the House of Commons Committee on Standards and Privileges and that memorandum with all the evidence I have received is likely to be published as an appendix to the Committee's Report. Until then, as I say, please treat this matter as in confidence and not refer to it any more widely.

I am nearing the completion of my inquiry and it would, therefore, be very helpful if you could let me have a response to this letter as soon as convenient, and I would hope within the next two or three weeks.

If you would like a word about any of this, please contact my office at the House of Commons. I will be very grateful for your help on this matter.

18 September 2008

14.  Letter to the Commissioner from Ms Marilyn Livingstone MSP, 9 October 2008

Thank you for your recent correspondence regarding the above.

I can confirm Mr Brown's statement that I was involved with the arrangements of the lease and sub-lease in full consultation with a local independent Solicitor. Both the lease and sub-lease were at all stages discussed and agreed with the Scottish Parliament.

I hope this addresses the points you have raised, but in the meantime, if I can be of any further assistance, please do not hesitate to contact me.

9 October 2008

15.  Letter to the Commissioner from Ms Marilyn Livingstone MSP, 22 October 2008

Thank you for your recent correspondence regarding the above.

I can confirm that I agree with Mr Brown's understanding that the arrangements for subletting part of the property were consistent with the House of Commons Green Book was inadvertently overlooked. As soon as this error was brought to our attention the necessary steps were taken to rectify the position.

I hope this answers the question you have raised with me. However in the meantime if you require any further information please do not hesitate to contact me.

22 October 2008

16.  Letter to the Commissioner from the Director of Member Liaison Services, Department of Resources, 4 November 2008

Thank you for your letter of 30 October 2008 requesting copies of Mr Brown's 2005 office lease and claims relating to his reduction in the costs claimed.

I am enclosing a copy of the Kirkcaldy office lease and three C1 claims. These show that Mr Brown reduced his claim for payments made to [the Group Insurance and Risk Management Company] by £629.75 in the 2005/2006 financial year, by £1,259.48 in 2006/2007 and £1,259.49 in 2007/2008.

I hope this is the information you require.

4 November 2008

17.  Letter to the Director of Member Liaison Services from the Commissioner, 11 November 2008

Thank you for your letter of 4 November with copies of Mr Brown's 2005 lease, his claim forms, together with a letter setting out the agreement between Mr Brown and Ms Livingstone and the constituency Labour party.

I see from the terms of the sub-lease which you sent me that Clause 4(2) provides for a period of three calendar months commencing with the date of entry for which no rent would be payable. Nevertheless, it appears that the sub-tenant is required to pay rent on the date of entry for the period of three calendar months following the rent-free period. It may be that any financial benefit accrued from this rent-free period only becomes due at the end of the period of the lease. I would welcome your advice and guidance on how you interpret this rent-free period and whether the Department gave any consideration at any time to whether Mr Brown was receiving a benefit as a result of it.

You will have seen also that there is a rent-free period identified in the letter from Mr Brown and Ms Livingstone to the Treasurer of the Kirkcaldy and Cowdenbeath Constituency Labour Party which you sent me. That period is reported to allow for help with necessary works as outlined in the mid-lease agreement (which I have not seen). It would be helpful to know whether you have a copy of the mid-lease agreement and whether you have any information in the claims you have received from Mr Brown which suggests that any allowance was made in his claims for any rent-free period netted off by any necessary works. It would be helpful to know whether you consider that this provision raises any question in relation to the claims which Mr Brown made.

It would also be helpful if you could advise me from the papers the Department holds of the precise dates when Mr Brown began using his Kirkcaldy constituency office, and the date when part of the accommodation began to be used by his constituency Labour party.

If it were possible to let me have a response to this letter within the next week or so, that would be much appreciated since I would like to resolve this complaint as soon as I can.

11 November 2008

18.  Letter to the Commissioner from the Director of Member Liaison Services, Department of Resources, 13 November 2008

Thank you for your letter of 11 November.

Under the terms of the sub-lease between [the Group Insurance and Risk Management Company] and Mr Brown and Ms Livingstone, it appears that no rent was payable by Mr Brown and Ms Livingstone for the period of three months commencing from the date of entry (4th July 2005). However, on the date of entry Mr Brown and Ms Livingstone were required to pay for the three months following that rent-free period. The amounts claimed by Mr Brown are in accordance with these provisions. We assume that the practical effect of the provisions will be that the final three months of the lease will be rent-free and that therefore there will be no claimable expenditure at that time.

Additionally Mr Brown and Ms Livingstone agreed a sub-lease with the Kirkcaldy and Cowdenbeath Labour Party. The letter which you have seen from Mr Brown and Ms Livingstone to the Treasurer of Kirkcaldy and Cowdenbeath Labour Party represents the full extent of our knowledge of the arrangements: we have not seen the Sub-Under-Lease Agreement to which that letter refers. The letter outlines an agreement about payment which was in force from 1st September 2005. The agreement also provides that payment was to commence on 20th December 2005 "allowing a rent-free period for help with necessary works as outlined in the mid-lease agreement." We have no document described as a mid-lease agreement, nor do we know who the parties to the mid-lease agreement were. Neither do we have any knowledge of what the necessary works were or of the way in which the property was occupied during this time (including the extent to which - if at all - the Kirkcaldy and Cowdenbeath Labour Party were able to occupy the property or the date on which their full or partial occupancy began). You will, however, be aware that Clause Six (8)(b) of the sub-lease between [the Group Insurance and Risk Management Company] and Mr Brown and Ms Livingstone refers to the tenants' entitlement to undertake certain works.

As [the Director of Operations] has previously said in his letter to you of 25 April, the existence of a sub-lease with the Kirkcaldy and Cowdenbeath Labour Party was not picked up by us when we received the documents. A priori we did not raise questions about the terms of that sub-lease.

There is no evidence from Mr Brown's claims that any allowance was made for any rent-free period netted off by any necessary works. However, no claims were made by Mr Brown for any works during the period mentioned in the letter from him and Ms Livingstone to the Treasurer of Kirkcaldy and Cowdenbeath Labour Party as being rent-free in order to allow necessary works to be done.

You ask when Mr Brown began using his Kirkcaldy office. From the lease, it appears that the date of entry was July 4th 2005. However, certain claims were legitimately made in respect of these premises before that date.

13 November 2008

19.  Letter to Rt Hon Gordon Brown MP from the Commissioner, 18 November 2008

I am writing because I need your help on a point which has arisen in relation to the complaint about the arrangements for your Kirkcaldy constituency office. The point arises from references to a rent-free period in the 2005 sub-lease to yourself and Ms Livingstone and in the associated sub-under lease to the constituency Labour party.

I wrote to you last on 23 October to let you know that I was preparing the factual sections of my Memorandum to the Committee on Standards and Privileges about this complaint. In preparing that draft, I asked the Department of Resources to let me have a copy of your 2005 sub-lease and copies of the claims you made in respect of the lease from your Incidental Expenses Provision. The Department sent me a copy of the sub-lease and three of your claim forms. They also sent me a letter setting out the agreement between you and Ms Livingstone and the constituency Labour party in respect of the sub-under-lease agreement. It appeared from the documents that there was a three month rent-free period both for you and the constituency Labour party. I therefore asked the Department for their interpretation of these references and how far any rent-free period was identified in your IEP claims. I asked them to let me know the dates when you began using the Kirkcaldy office and when the Labour party did so.

The Director of Member Liaison Services in the Department of Resources wrote to me on 13 November to let me know that on 4 July 2005, the date of your entry to your Kirkcaldy office, you were required to pay rent for the three months following the rent-free period. The amounts you have claimed are, according to the Director, in accordance with these provisions. He assumes that the practical effect is that the final three months of the lease will be rent-free and that therefore there will be no claimable rent at that time.

The Director notes that the letter about the sub-under lease with the constituency Labour party refers to an agreement that payment was to commence on 20 December 2005 after a three month rent-free period granted for help with necessary works as outlined in the mid-lease agreement. The Department does not appear to have a copy of that agreement, nor do they have any knowledge of any necessary works undertaken. They have no evidence from your claims that any allowance was made for any rent-free period netted off by any necessary works. Equally, the Department has no claims from you for any necessary work done during the rent-free period.

I enclose copies of the relevant correspondence - my letter to the Director of 30 October; his response of 4 November (to which I attach the enclosures to his letter); my letter to the Director of 11 November; and his response of 13 November.

I would be very grateful if you could help me with the following information or confirmation in order to enable me to complete the factual sections of my Memorandum:

Confirmation that you took up occupancy of these offices on 4 July 2005, and the Kirkcaldy and Cowdenbeath Constituency Labour Party took up occupancy on 1 September of that year.

Confirmation that any financial benefit from the three month rent-free period given to you in your sub-lease with the Group Insurance and Risk Management Company will not accrue to you until the final three month period of the lease. (If that is the position, then you would at that stage need to consider registering the benefit in the Register of Members' Interests.)

If that is not the position in respect of the rent-free period in your sub-lease, then I would need to know how far, if at all, any initial three month rent-free period was reflected in the claims you made under the Incidental Expenses Provision, and what consideration you gave to registering any such benefit in the Register of Members' Interests.

What arrangements were made in respect of the rent-free period given to the constituency Labour party from 1 September 2005 to 31 December 2005. In particular, it would be helpful to see a copy of the mid-lease agreement and the relevant reference in it; the information and evidence you have for the costs of any necessary work carried out during that rent-free period; who paid for any such work; and how far any benefit given to the constituency Labour party on account of this arrangement was reflected in the claims you made under the Incidental Expenses Provision.

It would be very helpful if you or, with your authority, a senior member of your parliamentary office, could let me have a response to these questions in the next two weeks so that I can conclude my work on this complaint. If you or your office would like a word about any of this, please contact me at the House. I would very much welcome your continuing help on this matter.

18 November 2008

20.  Letter to the Commissioner from the constituency manager to Rt Hon Gordon Brown MP, 16 December 2008

I am writing in response to your letter of 18th November to address your questions concerning the lease of constituency offices at 3 East Fergus Place, Kirkcaldy.

All matters relating to the lease arrangements were negotiated with the property Landlords, on behalf of Mr Brown and Ms Livingstone, "the tenants", by Solicitors in Kirkcaldy.

At a meeting with the solicitors on the 20th May 2005 (at which I represented Mr Brown), I was provided with proposed Heads of Terms to cover a range of matters including rent, Landlords' Works, Tenants' Works etc. The Heads of Terms reflected that significant works would be required throughout the premises to upgrade the accommodation, and make it fit for purpose. This included refurbishment, appliance and electronic installation and redecoration throughout. The draft Heads of Terms provided for an initial rent free period of four months in which the Tenants would undertake necessary works.

This rent free period formed part of a commercial negotiation with the Landlords, and was designed to compensate the Tenants for those Tenants' Works being carried out which improved the accommodation and therefore the benefit of which would ultimately accrue to the Landlord.

The Landlords countered with further adjusted Heads of Terms which included a reduction of the rent free period to one month. There followed negotiations about who was to carry out what works to the building and the resulting cost impact. Part of the works were identified in a Disability Discrimination Act Audit which was obtained by the Tenant. In addition there was the cost of demolition of partition, decoration, installation of a meter, new alarm, new intercom and the installation of a sink unit.

The final outcome of these commercial negotiations was that a three month rent free period was agreed, as is common and consistent with tenancy arrangements of this kind. As is also common, notwithstanding the agreement that there be a rent free period, the Landlord wished an upfront payment from the Tenants, at entry. It was therefore agreed that, at entry, three months' rent would be paid which would relate to the three month period following the first three months of possession by the Tenant.

The Tenants therefore had access, during the first three months of the Lease, from 4th July 2005 in order to carry out works to the offices. However, occupancy for use by the tenants was not possible until September.

During the three month free rental period, works were conducted by the Tenants (shared equally) to a total value of £4229.87. The rent free agreement negotiated with the Landlord reflected the necessary costs of this work, however these works were in excess of the rental cost for the three months in question. Mr Brown's 50% share of these costs were reclaimed, in the normal way, by Mr Brown's constituency secretary via a C1 Reimbursement claim made against the IEP for the period July-September, on 6th October 2005. The tenants are currently in credit with the landlord for the difference between the costs of repairs and the rent. This will be picked up by way of an adjustment in the rent to be paid to the landlord. There will thus not be a need to register an interest.

As far as the sub-tenants, the constituency party, are concerned the rent free period was to be passed on, to reflect the works conducted to the shared office facility, to the sub-tenants as per the sub-under-lease. However, in the event, the sub-tenants did not require access until after September 1st, which was the commencement of the quarter following that in which the works and the negotiated rent free period occurred. As a result, the sub-tenants paid rent in full for the September-December 2005 and January-March 2006 quarters, and thereafter. In conclusion, the sub-tenants did not in fact receive a rent free period of occupancy as they moved in to the building later than initially anticipated.

Enclosed with this letter, as requested, are copies of the mid lease agreement and of the relevant invoices for the works undertaken during the rent free period.

I hope that this information has been helpful. If there is anything more that I can do to assist you, please do not hesitate to contact me. The constituency office will be open until 23rd December.

16 December 2008

21.  Letter to the constituency manager to Rt Hon Gordon Brown MP from the Commissioner, 23 December 2008

Thank you for your letter of 16 December responding to my questions to the Rt Hon Gordon Brown MP about the lease of Mr Brown's constituency office in Kirkcaldy.

I was most grateful to receive this helpful explanation of the position and to have copies of the relevant leases drawn up in 2005-6.

I am copying your letter and attachments to the House of Commons Department of Resources for any advice or comments they may wish to make. Subject to their comments, I take from what you have told me that Mr Brown's rent for the period July to September 2005 was waived in exchange for payment for necessary works, which were then claimed from the IEP, and that the overpayment involved will be taken into account in the rent paid to the landlords later in the rental period. Mr Brown's first rent payment, in respect of the period October to December 2005, was made in July 2005. Both this and the rent payments for subsequent rental periods were claimed back from the IEP.

I take it from your letter that there was no rent free period granted to the Kirkcaldy and Cowdenbeath Labour Party in respect of their renting of parts of the property because in the event the necessary works were carried out before they took possession of their accommodation. The claims Mr Brown made against the IEP did not therefore need to reflect a rent free period for the Labour Party since none was granted.

If this summary is inaccurate in any respect please let me know as soon as possible and in any event by 9 January. I am most grateful for your help with this inquiry.

I am copying this letter to the Rt Hon Gordon Brown MP.

23 December 2008

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Prepared 26 February 2009