MEDIA
PACKAGE
BACKGROUND
101. In its edition of 30 March 2009, the Daily
Mail reported[98]
that Ms Smith had submitted a bill "for blue movies watched
at her family home in Redditch, Worcestershire, as part of a £67
television package claimed under MPs' controversial second home
allowance." It reported that Ms Smith had said that "I
am sorry that in claiming for my internet connection, I mistakenly
claimed for a television package alongside it. As soon as the
matter was brought to my attention, I took immediate steps to
contact the relevant parliamentary authorities and rectify the
situation. All money claimed for the television package will be
paid back in full." Her husband was quoted as saying: "I
am really sorry for any embarrassment I have caused Jacqui. I
can fully understand why people might be angry and offended by
this."
THE COMPLAINT
102. On the same day, 30 March 2009, Mr Robert
Waterhouse wrote to me. He drew my attention to the Daily Mail
article, and asked me both to investigate its allegations and
to "consider making a thorough examination of her other
claims during her [Ms Smith's] employment in this Parliament,
so that the taxpayer can be reassured that this was—as is
suggested—an isolated case."[99]
I subsequently received a number of other complaints to the
same effect.
103. I responded to Mr Waterhouse on 3 April.[100]
I accepted his complaint that Ms Smith had claimed against the
ACA for films, the cost of which was not permitted under the rules
of the House. I did not, however, accept his suggestion that I
undertake examination of all Ms Smith's claims, on the grounds
that my role in this respect is confined to consideration of complaints
based on evidence of a breach provided by the complainant.
RELEVANT PROVISIONS OF THE CODE
OF CONDUCT AND THE RULES OF THE HOUSE
104. 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."
105. The rules in relation to Ms Smith's claims
against the Additional Costs Allowance for these films and the
related media package are set out in Section 3 of the July 2006
edition of the Green Book on Parliamentary Salaries, Allowances
and Pensions. Section 3.1.1 provides:
"The Additional Costs Allowance (ACA) reimburses
Members of Parliament for expenses wholly, exclusively and necessarily
incurred when staying overnight away from their main UK residence
(referred to below as their main home) for the purpose of performing
Parliamentary duties. THIS
EXCLUDES EXPENSES
THAT HAVE
BEEN INCURRED
FOR PURELY
PERSONAL OR
POLITICAL PURPOSES."
106. Section 3.2.1 provides:
"YOU
CAN CLAIM
ACA IF:
A You have stayed overnight in the UK away
from your only or main home, and
B This
was for the purpose of performing your Parliamentary duties,
and
C You have
necessarily incurred additional costs in so doing, and
D You represent
a constituency in outer London or outside London."
107. Section 3.3.1 of the Green Book provides:
"You must ensure that arrangements for your
ACA claims are above reproach and that there can be no grounds
for a suggestion of misuse of public money. Members should bear
in mind the need to obtain value for money from accommodation,
goods or services funded from the allowances."
108. The Green Book gives a number of examples
of expenditure which can and cannot be claimed under the Additional
Costs Allowance. Section 3.13.1 gives examples of expenditure
allowed, including:
- "Telecommunications charges
- Furnishings
- …
- electrical equipment
- …
- Other
- TV licence…"
Section 3.14.1 sets out expenditure which is not
allowable, including: "Living costs for anyone other than
yourself".
109. The July 2006 version of the Green Book
was superseded by a new version on 1 April 2009. This complaint,
however, relates to claims under the provisions of the July 2006
Green Book.
MY INQUIRIES
110. I wrote to Ms Smith on 3 April 2009.[101]
I noted that the essence of the complaint was that she had claimed
against the Additional Costs Allowance for films, the cost of
which was not permitted under the rules of the House. I also noted
that I had declined to accept the complainant's suggestion that
I undertake an examination of all her claims. I further noted
that I was aware of the comments she had made to the press, and
of her husband's statement. I asked Ms Smith specifically to let
me know the circumstances in which she came to include the film
items in the claim which had been publicised in the media; whether
there were similar claims which she had made for paid films against
the allowance; and the actions she had taken to rectify the position.
111. Ms Smith replied on 23 April.[102]
She commented:
"As I know you are aware from media reports,
I have made clear publicly on several occasions that as soon as
I became aware of the inclusion of film items in the expenses
claim in question I recognised that this claim should never have
been submitted. I apologised immediately and took immediate steps
to repay all monies relating to the television package at my Redditch
home."
112. Ms Smith attached a letter of 8 April from
the Director of Operations, Department of Resources, acknowledging
the repayment.[103]
The letter confirmed receipt of a cheque for £400 and noted:
"this reimburses the House for amounts paid towards a
Virgin Media package for your constituency home, less the cost
of the basic broadband package available from Virgin."
113. In response to my request for details of
the circumstances in which she came to claim the film items, Ms
Smith said that, as part of a claim in respect of 1 April-1 May
2008, she had submitted a claim for a Virgin Media package which
comprised telephone line rental, broadband connection and television
services. The bill she submitted in support of that claim set
out advance charges for the period 20 May-19 June (relating to
the provision of the basic services) and event charges for films
watched on demand. Ms Smith added that: "these event charges
should never have been claimed for and were inadvertently and
mistakenly included in the claim submitted for 1 May-1
June 2008, dated 4 June 2008."
114. As to similar claims made for paid-for films
against the allowance, Ms Smith stated that she had submitted
claims for the Virgin Media package in March, April, June, July,
September, October, November and December 2008. As to the action
she had taken to rectify the situation, Ms Smith commented that
she deeply regretted the mistake and took full responsibility
for it. She apologised as soon as she became aware of the mistake
and took immediate steps to pay back "all monies relating
to all television services provided by Virgin Media at my Redditch
home." Ms Smith sought and received confirmation from
the Department of Resources that the total amount claimed for
this media package including television and broadband was £553.20.
Excluding broadband services, the total was, she said, £393.20.
On 28 March 2009, she had written a cheque for £400 for the
Department of Resources to cover the cost of the television element
of the package in its entirety, thus reimbursing the House for
amounts paid towards a Virgin Media package, less the cost of
"the basic broadband
package available from Virgin",
provided to her Redditch home.
115. I responded to Ms Smith on 28 April,[104]
thanking her for her explanation and putting two further questions
to her. The first was whether, when paying back the cost of all
her Virgin Media television services for the financial year 2008-09,
she did so because she considered the claims for these services
were in breach of the rules; if not, which of the services, including
the film items, she considered were claimed for in breach of the
rules. The second was what claims, if any, she had made for films
and television services in each financial year from 1 April 2004
to 31 March 2008, and which of these, if any, she considered were
claimed for in breach of the rules.
116. I explained that the reason I needed this
information was that I would need to come to a view on the extent
of the breach of the rules in respect of these claims before I
decided how best to resolve the complaint. I also informed Ms
Smith that, once I had received her response, I was likely to
consult the Department of Resources for their advice on the interpretation
of the rules and on the actions she had taken to resolve the position.
117. Ms Smith replied to me on 30 April.[105]
In respect to my first question, she commented:
"The Green Book explicitly examples electrical
goods, TV licences and telecommunication services as allowable
claimable costs. I don't believe that basic cable or satellite
television packages are unreasonable related costs in that context.
The Fees Office didn't question the nature or extent of the Virgin
Media package that was claimed for at any time over several months."
118. She continued: "However, in considering
the scale of my repayment of claims I was guided by advice within
the Green Book that:
'You must ensure that arrangements for your ACA
claims are above reproach and that there can be no grounds for
a suggestion of misuse of public money.''[106]
"I wanted to be perfectly clear about the
settlement I was making— in conjunction with my immediate
apology for my mistake. I decided to pay back all that I had claimed
for in relation to Virgin Media's package except for the most
basic broadband and telephone package available."
119. In response to my second question, about
claims made for film and television services in each financial
year from 1 April 2004 to 31 March 2008, Ms Smith stated that,
apart from annual claims for a television licence, she had made
no claim for any such items beyond those identified in her letter
of 23 April.[107]
120. I wrote to the Director of Operations in
the Department of Resources on 7 May, seeking advice on the complaint.[108]
In particular, I asked if the Department considered Ms Smith to
be in breach of the rules in respect of any of the claims she
made for her Virgin Media package from March to December 2008
inclusive; to confirm both that she made no claims for any television
packages or films before March 2008, and that the only claim made
for paid-for films was that submitted in June 2008. I also said
it would be helpful if the Department could include copies of
the relevant claim forms and supporting documentation.
121. The Director of Operations responded on
27 May.[109] He noted
that the July 2006 Green Book stated that "telecommunication
services" were an eligible expense against the ACA, and added
"beyond this it is silent".
He went on to say that the telecommunications
product market was relatively complex with a variety of products
and packages available to the consumer. The advice the Department
gave to Members when guidance was requested was that they might
claim only for a basic subscription to digital suppliers, which
might include, for example, BBC News 24, Sky News, Bloomberg,
etc. The Department would further advise that any additional services,
such as access to Sky Movies or Sky Sports "would not
be appropriate". However, the Director noted that additional
services such as these could sometimes be rolled into a single
low value package, with the marginal cost of the additional subscription
becoming relatively inexpensive, if not zero.
122. The Director also commented that, "In
administrative terms, it has not seemed a good use of staff time
to investigate in detail the digital package in use by an individual
Member unless we had cause for concern." He noted that
it was often unclear from Members' claims whether additional subscription
charges were included, and it could also be difficult to distinguish
between telephone, mobile, broadband and digital packages.
123. In relation to Ms Smith's letter to me of
23 April,[110] the
Director noted that she had had a Virgin Media package which comprised
telephone, line rental, broadband connection and television services.
He commented, "As a basic package this would be an acceptable
claim against her ACA." He went on to say: "However,
in common with many Members, we received from Ms Smith only the
monthly summary bill for payment, apart from one month which included
an extra page in respect of 'on demand' items."
124. In response to my request for details of
Ms Smith's claims for telecommunications services, the Director
reported that she had claimed
for her Virgin Media package during 2008 only.
The claims had covered eight months and she sought reimbursement
for a total of £553.20. They were all paid in full.
125. The Director reported that the Department
held only summary invoices for all months apart from the claim
for May 2008. This claim had with it supporting documentation
that identified the cost of 'on demand' films. He
commented,
"In my view, this is not eligible
expenditure against ACA, a point Ms Smith has accepted in her
letter to you of 23 April 2009."
126. The Director included with his response
a list of the five ACA claims which had included claims for the
Virgin Media package and copies of those claims. The first, dated
4 May 2008, covered the period 1 April to 1 May 2008. The front
page of a Virgin Media bill dated 28 March, which gave the total
amount due and was to be paid by direct debit around 21 April
2008, was submitted in support of the claim for £68. The
second claim, received on 6 June 2008, covered the period 1 May
to 1 June 2008. A complete bill dated 25 April 2008, due for payment
around 20 May and which included a detailed breakdown of advance
charges (for telephone line rental, broadband, and television
services) and event charges in arrears (for on-demand and other
events) was submitted in support of a claim for £67.
127. The third claim, submitted on 6 October
2008, covered the period 1 September to 1 October 2008. A copy
of the front page only of the 25 April bill was submitted in support
of a claim for £67. The fourth claim, submitted on 4 November
2008 and covering the period 1 October to 1 November 2008, was
also for £67 and was also supported by a copy of the front
page of the 25 April bill.
128. The fifth and final claim, submitted on
5 March 2009, covered the period 1 April 2008 to 1 March 2009.
It included a claim for telephone and telecommunications, which
included £284.20 in respect of the Virgin Media package.
The claim was supported by copies of the front pages of bills
dated 25 June 2008 (£77.45), 25 July 2008 (£73.50),
26 November 2008 (£76.00) and 30 December 2008 (£57.25).
129. The Director commented that a member of
staff had written to Ms Smith in November 2008 pointing out that
her claims for September and October had been made with the same
supporting invoice received with her May claim.[111]
The letter asked Ms Smith to submit "updated
documents, i.e. a direct debit schedule or a bank statement showing
monthly payments."
It went on to say that on this occasion the claim had been paid
in full and added, "we look forward
to receiving the relevant documents in the near future."
130. Finally, the Director noted that he had
written to Ms Smith on 8 April 2009 confirming repayment by her
of the full cost of television services previously reimbursed.
131. Following receipt of the Director's letter,
I wrote again to Ms Smith on 2 June.[112]
I noted from the itemised bill dated 25 April that the total service
charge of £67 was made up of £46 advance charges and
£21 event charges, and that the claims for other months varied
between £57.25 and £77.45. I asked her to clarify why
there was this difference between the advance charges and total
service charges, if possible by submitting copies of the itemised
bills for the other months. I also asked, since it appeared that
the summary page of the April invoice from Virgin Media was re-presented
with the two subsequent claims, if these claims were revised following
the Department of Resources' letter of 11 November 2008.[113]
132. Ms Smith replied on 22 June.[114]
She explained that the charges varied because
the Virgin Media package comprised a basic package and then additional
charges for events such as films. She did not have copies of the
itemised bills. As to the submission of a duplicate of the 25
April 2008 bill in the two subsequent months, she commented:
"I had thought that providing a recurring
copy of an invoice for a typical month would be acceptable. However,
the Fees Office contacted me by letter on 11 November to say that
they needed month by month invoices so any further claims were
made against individual invoices. No adjustment was asked for
and I am afraid I took the request for 'receiving the relevant
documents in the near future' to refer to subsequent claims not
those covering duplicated months. In hindsight, this led to claims
in these two months that may not have exactly matched the actual
expenditure. It is, of course, not clear as to whether it resulted
in a lower or higher claim than would otherwise have been submitted."
133. I wrote again to Ms Smith on 25 June.[115]
I told her that I was considering whether I should submit the
matter to the Committee on Standards and Privileges, and I set
out my understanding of the facts of this case and invited her
to agree with my summary. I also asked how the mistaken inclusion
of the event items in the eight months claims occurred, including
whether she checked each month's claim before signing it and how
far she checked the supporting documents; whether she accepted
that, had she claimed only for the package of advance charges,
there would have been no variation in her claims and thus no uncertainty
about whether she had under-claimed or over-claimed; and whether
she accepted that her claims for event charges which totalled
£185.20 were in breach of the rules of the House.
134. Ms Smith replied on 5 July 2009.[116]
As to my summary of the facts, Ms Smith commented:
"In the main your understanding is correct.
The one point of clarification would be that, as I understand
it, not all of the 'event' charges made in the eight months were
'namely films'. There were occasions when pay-per-view sport was
purchased. I think a description of "charges for additional
entertainment elements including films and sport" would be
more accurate. Such a description would also echo wording in the
Green Book where it prohibits ACA claims for entertainment."
As to how event charges came to be included in the
claims, she commented:
"I am afraid I did not see the supporting
documents setting out the make up of the charges. If I had I hope
that I would have picked up on their unsuitability.
"I accept that there should have been no
variation in the amounts claimed had I simply claimed for the
basic broadband Virgin services. Variations month by month were
reasonably small, typically by less than £11. However that
there were any differences should have set alarm
bells ringing. I am afraid it did not."
As to whether Ms Smith accepted that the events were
claimed in breach of the rules of the House, she commented:
"I have accepted that claims for entertainment
are not allowed against the ACA. I am, of course, sorry that such
claims were made and sorry that they were not picked up by the
Fees Office when they first occurred. It is a matter of great
regret and embarrassment to me that I did not check this element
of my claims in more detail."
135. I replied to Ms Smith on 9 July, accepting
her clarification of the description of the event charges.[117]
136. When I met Ms Smith for our interview on
1 September,[118] she
repeated her acceptance that she had breached the rules; she had
made a mistake which she had rectified as soon as she became aware
of it. The entertainment items, which had not been used by her,
should not have been claimed in any event. The mistake had occurred
on a number of occasions as a result of her not looking at the
breakdown of the bills when submitting the summaries in support
of her claims; she commented "I didn't look at the claim
carefully enough". She had not noticed that the claims
varied monthly, and had thus not thought about the potential significance
of this. She said that, as a result of her experience, she was
ensuring that she was more careful with future claims, for example
with office costs from the Incidental Expenses Provision. As to
the repayment she had made, this deliberately went beyond the
entertainment items as she wanted to avoid arguments about other
parts of the package that were used by her family.
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