House of Commons - Jacqui Smith - Standards and Privileges Committee

Jacqui Smith - Standards and Privileges Committee Contents

MS SMITH'S NOMINATION OF HER MAIN HOME

6. During the period covered by the complaint from Mrs Taplin, the House's rules stipulated that unless the identity of a Member's main home was a matter of fact (because the Member had only one home in the United Kingdom), the main home would "normally be the one where you spend more nights than any other."[4] From 1971, a Member who was also a government Minister and who had more than one home in the United Kingdom was obliged to designate his or her London residence as the main home. This requirement was removed in February 2004, from when Ministers were subject to the same rules as other Members and were asked to make a fresh nomination of their main home.[5]

7. In nominating her main home from 2004 onwards, Ms Smith was therefore expected to have regard to the number of nights she spent in each of her two homes, one of which was in London, the other in her constituency of Redditch. Having designated her main home, Ms Smith, like other Members, was able to claim against Additional Costs Allowance (ACA) for certain expenses relating to her use of her second home which were "wholly, exclusively and necessarily incurred … for the purpose of performing Parliamentary duties."[6]

8. As the Commissioner notes, the House put in place new rules relating to the designation of main homes with effect from April 2009.[7] However, the complaint against Ms Smith relates to the period February 2004 to March 2009 and, like the Commissioner, we have considered this case against the rules and guidance in place at that time.

THE COMMISSIONER'S FINDINGS

9. When first elected to the House in 1997, Ms Smith identified her constituency home as her main home.[8] As a Minister in the Government from July 1999, Ms Smith was required to designate her London residence as her main home. When this requirement was removed in 2004, Ms Smith left in place the designation of her London home as her main home.[9] She asked the House of Commons Department of Finance and Administration (DFA) in June 2007 to confirm that this was reasonable, given that her family was based in Redditch but that she spent the majority of her time in Westminster. The DFA agreed with Ms Smith's assertion that it was reasonable for her to continue to claim the allowance against her constituency home given her ministerial responsibilities required her to spend the majority of her time in Westminster.[10]

10. The Commissioner has established that Ms Smith had two homes during the period in question. At different times, Ms Smith lived both in her family home in the constituency and in the house owned by her sister in London. Ms Smith was the guarantor of the mortgage of the London property, where she had sole use of a room and shared use of the remainder of the house. Ms Smith also paid her sister rent and contributed to household bills The Commissioner concludes that Ms Smith used her sister's house as a home in the normal sense in which that term is understood. It was "more than some sort of temporary room in a stranger's house."[11]

11. The Commissioner notes that Ms Smith's claims against the Additional Costs Allowance for her Redditch home were £22,110 in 2006-07; £22,948 in 2007-08 and £19,182 in 2008-09. Ms Smith claimed for mortgage interest, utility bills, council tax, telephone, servicing and maintenance, repairs and cleaning.[12]

12. On the evidence available, the Commissioner has concluded that Ms Smith spent more nights at her London home than at her constituency home between 11 May 2005 and 27 June 2007. He has also concluded that Ms Smith spent more nights at her constituency home than at her London home between 28 June 2007 and 31 March 2009. Ms Smith has agreed with this conclusion.[13] The figures which underlie it are based on a reconciliation between witnesses'—including Ms Smith's—personal recollections, the evidence provided by Ms Smith's personal and ministerial diaries, and the evidence of police records (ie, records of the protection provided to Ms Smith by the police when she was Home Secretary).[14]

13. As noted above, the rules of the House at the time stated that "the location of a Member's main home is normally a matter of fact."[15] The Commissioner and Ms Smith agree that she had a choice as to which of her homes to identify as her main home for the purposes of claiming ACA.[16] It is clear, then, that the location of Ms Smith's main home was not an objective "fact".

14. The Commissioner notes that the rules provided that when the location of a Member's main home was not a simple matter of fact, the objective test was normally one of where the Member spent more nights.[17] However, the term 'normally' implies that there will be exceptions. We discuss this point in our conclusion, below.

15. The Commissioner considers that "the choice [Ms Smith] made was not consistent with the rules of the House."[18] He reaches this judgment on the basis of his conclusion that:

Ms Smith did not give sufficient weight either to the objective overnights test or to the need to consider whether she was an exception to the rule. … Ms Smith's emphasis on her ministerial jobs as the determining factor in identifying her main home led to her drawing a conclusion that was both contrary to the rules and inconsistent with a normal understanding of the term "main home".[19]

16. The Commissioner further concludes:

I consider therefore that the difference between the nature of the two properties and the use to which they were put by Ms Smith, including the balance of nights she spent in both properties, is such as to require me to conclude that Ms Smith's decision to identify as her main home from April 2004 to March 2009 the home which she shared with her sister and her sister's partner in London was not in accordance with the rules of the House at the time.

I come to this conclusion because I consider the purpose of the rule was to help the Member establish the location of their main home. It did not require them to reach an unnatural interpretation of that term. In my judgement, Ms Smith misdirected herself by focusing on the nature and location of her job (where she spent her long working day) and not the nature and location of her overnight accommodation (where she went whenever her working life allowed). As a result, Ms Smith reached a mistaken interpretation of the term 'main home' which, on any objective view, did not fit her personal circumstances and which was therefore contrary to the purpose as well as to the letter of the rule.[20]

17. In the Commissioner's judgment, Ms Smith should have identified her constituency home as her main home throughout the period covered by the complaint.

She should have exercised the discretion given in the rules to identify the residence she shared with her family in her constituency as her main home. This would have reflected properly her personal circumstances, the nature and use of her accommodation, and the pattern of her overnight stays, in particular from May 2007, from when she spent more nights in her Redditch home than she did in London. I therefore uphold the complaint.[21]

MS SMITH'S EVIDENCE

18. Ms Smith has told us that for the most part, the Commissioner's memorandum reflects her position accurately.[22] In particular, she welcomes the Commissioner's conclusion that her London home is a real home, contrary to views expressed in some sections of the media. However, Ms Smith makes clear that she disagrees with the Commissioner's conclusions in several important respects. These can be summarised as follows:

The Commissioner's report "appears to be heavily influenced by subjective judgements about my personal circumstances."
The decisions Ms Smith took when designating her main home "could only have been taken on the basis of the rules as they were then and advice that I received about those rules, on objective measures of my circumstances and the best estimate of what future circumstances were likely to be."
The Commissioner's conclusion that Ms Smith did not give sufficient weight to the objective overnight test is based on a retrospective judgment.
The rationale of the old rule requiring Ministers to have their main home in London was sound and provides an important precedent.
Changing the designation of the main home from London to the constituency could have been criticised as 'flipping'.
The Commissioner's interpretation of the rules differs from that of the Department of Resources, which advises Members on how to comply with the rules.
The Commissioner has given undue emphasis to the fact that Ms Smith owns her constituency home but rents her London home.

19. Ms Smith summarises her position thus:

As the Commissioner reports in Para 100, my argument is that I stuck by the spirit of the pre 2004 rules; tested them by checking with the Department; fulfilled their objective requirements and made a reasonable judgement that prospectively I was likely to spend more nights in London than in Redditch.

She concludes: "I am disappointed that this process has not led to a fairer set of conclusions, based on objective and consistent application of the rules as they were at the time."

CONCLUSIONS

20. The Commissioner has concluded that Ms Smith was in breach of the rules from 2004 to 2009. Ms Smith argues that her actions were reasonable and defensible. In reaching our own conclusions, we need first to consider the relative weight that should be given to the overnight test and to other tests, such as the location of the Member's family and the nature of the accommodation. We then need to reach a view on the extent to which it is fair for us to judge retrospectively Ms Smith's actions, which, she argues, depended on a prospective judgment she made in the circumstances at the time. We also need to have regard to value for money considerations.

21. In October 2008, we reported on the Commissioner's investigation and dismissal of a complaint against the identification of their main home by two Members (both of whom were Ministers).[23] In the light of questions raised by the Commissioner in the course of that investigation, we produced a further Report, in which we set out our views on the criteria that should apply when a Member nominates his or her main home.[24]

22. In relation to the overnight test, we concluded in that further Report that:

The Green Book implicitly recognises that there may be circumstances where this simple objective test may not be the right one to apply, and we agree with the Commissioner that, in cases of doubt, it is reasonable to take account of a much wider range of factors. In such cases, the Commissioner suggests that the Member's decision should reflect their particular circumstances and, having due regard to these, provide value for money for public funds. This latter test reflects one of the overall principles set out in the Green Book as applying to all ACA claims.[25]

We think it right to take this statement as our starting point in considering the case before us. Accepting that the identification of Ms Smith's main home was not a straightforward matter of fact, we need to establish whether her circumstances made it reasonable to expect her to have taken account of factors in addition to the overnight test.

23. On being elected to Parliament in 1997, Ms Smith nominated her family home in Redditch as her main home and claimed ACA in respect of her London home. Ms Smith and her husband took an early decision to separate her work home from their family home.[26] On becoming a Minister in 1999, she was obliged to regard her home in London as her main home. Other than becoming a Minister, however, it appears there was no substantial change in Ms Smith's circumstances between 1997 and 2009. Ms Smith's family continued to be based in Redditch and she continued to base herself in London whenever work required. We agree with the commissioner's finding that, contrary to some speculation, Ms Smith did have two homes.[27]

24. Ms Smith told the Commissioner that she did not change the designation of her main home following the rule change in 2004 because there had been no qualitative change in her circumstances.[28] As a busy Minister, she was spending more time in London than in Redditch; and she felt it would have been difficult to justify designating her constituency home as her main home.[29]

25. We accept that it appears that Ms Smith spent more time in London than in Redditch, even during the period 2007-09, when she spent more nights in Redditch than in London. We also accept that the question of where Ms Smith spent her days was relevant to the nomination of her main home, albeit less relevant than the question of where she stayed overnight.

26. In his investigation of the complaint against two Members in 2008, the Commissioner concluded that "In cases of doubt, I think it is reasonable to take account of a much wider range of factors, including where a Member spends their days … ."[30] However, this sentence continued by listing a number of other factors: "… how long they have been in each property or location, the nature of the accommodation, their personal and domestic circumstances and what their links are to the communities in which their two properties are located."

27. Taking this wider range of factors into account, we understand why the Commissioner concluded that "The gravitational pull in terms of family and property is, on the basis of all the evidence I have seen, Redditch and not London."[31] We agree with the commissioner's conclusion that Ms Smith's constituency home is her main home.[32]

28. Ms Smith had an opportunity following the rule change for Ministers in 2004 to designate her house in Redditch as her main home.[33] She did not take up this opportunity. In June 2007, however, Ms Smith did seek advice from the DFA. The advice stated:

I can confirm therefore that the location of a Member's main home may not always be where their family reside. I agree with your assertion that is reasonable to continue to claim the allowance against your constituency home given your ministerial responsibilities require you to spend the majority of your time in Westminster.[34]

On the basis of this advice, Ms Smith appears to have concluded that the bias towards Westminster of her working life as a Minister and MP outweighed the other factors.

29. In our view, the DFA's advice was flawed, because in referring to "time" spent in London rather than to "nights" it underplayed the importance of the overnight test. The DFA's advice regarding the weight to be given to the location of a Member's family home was accurate in so far as it went, but it was neither as clear nor as complete as it should have been. The advice that "the location of a Member's main home may not always be where their family reside" is consistent with the view that a Member's main home would normally be where the family reside, but it failed to make this clear.

30. The advice given to Ms Smith did not live up to the statement in the letter to the Commissioner of 15 May from the current Director of Operations that "my office would always advise that where a Member's family lives is a relevant consideration."[35] In our view, the DFA also went too far in agreeing with Ms Smith's assertion that it was reasonable for her to continue to claim ACA in respect of her constituency home on the basis of the time she was spending on her Ministerial duties in London, without also inviting her to take into account other factors. Nonetheless, it remains a Member's personal responsibility to ensure that his or her decisions are soundly based on all the relevant criteria.

31. Ms Smith clearly feels that she was entitled to rely on the DFA's advice. Ms Smith could, however, have taken a broader view of her situation than she did. She could have taken into account factors in addition to where she spent her time, and she could have given greater weight to the fact that the difference between the number of nights she spent at each home was quite small. Had Ms Smith done this, she may have concluded that her 'main home' in the sense that most people would understand the term was the house she shared with her family, where she spent as many nights as she could—and not the house she shared with her sister and her sister's partner, where, with few exceptions, she stayed only when the onerous demands of her work as Home Secretary required her to.

32. We agree with the Commissioner that Ms Smith was in breach of the rules of the House from 2004 to 2009 in identifying the London residence she shared with her sister as her main home, and that she should have exercised the discretion given in the rules to identify the residence she shared with her family in her constituency as her main home. However, we regard this breach in so far as it relates to the period February 2004 (when the rule relating to Ministers' main homes was changed) until June 2007 (when Ms Smith began to spend more nights in Redditch than in London) as being less obvious than it later became. Applying the overnight test, it should also have become clear to Ms Smith at some point towards the end of 2007 that the test had not been met in the period since she became Home Secretary in June 2007.

33. Ms Smith now fully accepts that after becoming Home Secretary she was spending fewer nights in her designated main home than in her second home, although at the time she "didn't count up the nights."[36] Ms Smith makes the point that in nominating her main home she had to make prospective judgments about how many nights she was likely to spend in London, whereas those who now sit in judgment on her are able to reach their view with retrospective (albeit approximate) knowledge of the nights she actually did spend in London and elsewhere in the period May 2005 to March 2009. This objection misses the point that it was the nature and the use made by Ms Smith of her two homes that provide the evidence of which was her main home. She should have given greater weight to the fact that the quite small difference between the number of nights spent at each home rendered that evidence inconclusive—until the point in late 2007 when it lined up behind the other evidence. From that point on there was little room for doubt, but it should have been sufficiently clear to Ms Smith even before then that she was probably an exception to the rule. That is not a retrospective judgment for us or for anyone else to reach; it is one that Ms Smith could reasonably have been expected to reach, although we recognise that she was poorly advised.

34. The question arises as to whether Ms Smith's nomination of her London home as her main home cost the taxpayer more than the alternative courses that were open to her. If Ms Smith had nominated her Redditch home as her main home, she could not have claimed for the rent she paid to her sister because the House rules prevent a family member from benefiting from allowances. However, she could have bought her own home in London; she could have rented a home in London from a non-relative; or from June 2007 she could presumably have used a taxpayer-funded grace and favour residence in central London, as many previous Home Secretaries have done. Any of these courses could have resulted in a different claim on Additional Costs Allowance, but it is impossible to quantify what the difference in such claims might have been. We do not believe it can be established with any certainty whether the taxpayer is any worse or any better off as a result of Ms Smith's nomination of her main home and subsequent claims against Additional Costs Allowance than would otherwise have been the case.

35. Like the Commissioner, we have applied the normal civil standard of proof—the balance of probabilities—to our consideration of this case.[37] We are entirely satisfied that the commissioner has reached a balanced judgment on the basis of his objective evaluation of the evidence. However, we also conclude that the fact that in 2007 ms smith sought and then acted in accordance with the advice of the house authorities is a significant mitigating circumstance.

RECOMMENDATION

36. Whilst we acknowledge that there are mitigating circumstances, ms smith clearly breached the rules of the house by wrongly designating her main home from 2004 to 2009. We recommend that ms smith apologise to the house by means of a personal statement.

37. Ms Smith accepts that she also breached the rules by failing to notify the house authorities for one year that she had changed the address of her designated main home. Ms Smith gained nothing from this lapse, and the public interest was not harmed. We therefore recommend no further action. The incident may, however, serve as a reminder to all Members of their duty to inform the House authorities promptly of any relevant change in their circumstances.

4 Appendix 1, para 18 Back

5 Appendix 1, WE6 Back

6 Appendix 1, para 14 Back

7 Appendix 1, para 22 Back

8 Appendix 1, para 141 Back

9 Appendix 1, para 142 Back

10 Appendix 1, para 144 and WE7, WE8 Back

11 Appendix 1, para 162 Back

12 Appendix 1, para 143 Back

13 Appendix 1, para 72 Back

14 Appendix 1, para 145 and 146 Back

15 Appendix 1, para 18 Back