Jacqui Smith - Standards and Privileges Committee Contents



FINDINGS OF FACT

SECOND HOME

137.  When Ms Smith entered Parliament in 1997 she already owned a home in Redditch with her husband. She subsequently moved home in Redditch twice, in May 1998 and in May 2004. Her husband and two children are based in Redditch. Her current constituency home is a four bedroom detached house bought for £295,000, on which she and her husband have a joint mortgage.

138.  When Ms Smith entered Parliament she also established a London home, which—apart from a period between 1998 and 2001—has been shared with her sister. (During the first part of this period she was effectively on maternity leave, and then she moved to a flat on her own because her sister had moved to a job that meant she lived outside London.)

139.  The location of Ms Smith's London home has changed on a number of occasions: in 1997 it was a house which she rented jointly with her sister; at some point in 1998 she moved to a flat on her own; in 2001 she and her sister moved to a different address, and they moved again to her current London home in April 2008. In March 2009 Ms Smith sent to the Department of Resources a backdated notification of this change of address.

140.  Ms Smith's current London home is a three bedroom house in South London which she shares with her sister and her sister's partner. The house was bought for £450,000. Her sister has a mortgage on the home and Ms Smith guarantees the mortgage. Ms Smith also pays £700 per month in rent and contributes £150 a month towards food. She has bought furniture, fixtures and fittings and has contributed to other maintenance costs. Her sister pays the council tax.

141.  Members whose constituencies are outside London have (since 1971) been able to claim against the Additional Costs Allowance for the costs of overnight stays in a second home in their constituency or in London, their choice being restricted by the location of their main home. From 1997 to 1999, when she first became a Minister, Ms Smith identified her home in her constituency as her main home. At the time she became a Minister, all Ministers were deemed to have their main homes in London for ACA purposes. Ms Smith accordingly changed the nomination of her main home to London, and claimed against the Additional Costs Allowance for the cost of her overnight stays in the constituency.

142.  In early 2004, the Head of the Fees Office wrote to all Ministers to let them know that the rule which deemed that their London home was their main home for ACA purposes was to end. This ministerial requirement was taken out of the next edition of the Green Book in April 2005. Ms Smith left in place the designation of her residence in London as her main home. Accordingly, from 2001 Ms Smith has designated her main home as being a house she shares with her sister and currently her sister's partner in London.

143.  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. She has claimed in the categories of mortgage interest, utility bills, council tax, telephone, servicing and maintenance, repairs and cleaning.

144.  Ms Smith entered the Cabinet in May 2006 and on 28 June 2007 she became Home Secretary. In June 2007 Ms Smith sought advice from the Fees Office about whether her family home should automatically be her main home for the purposes of the Additional Costs Allowance. On the basis of the information she provided, she was advised that the location of a Member's main home might not always be where their family resided, and that it was reasonable for her to continue to claim the allowance against her Redditch home given her ministerial responsibilities required her to spend the majority of her time in Westminster.

145.  There are some differences of view between the witnesses as to the number of nights Ms Smith has spent in her London home since moving there in April 2008. Ms Smith's evidence is that she is present at her London address for the bulk of the week and that over the 2008 summer recess and the 2008 Christmas holiday period she spent a significant proportion of her time there. This is supported by her sister and her next-door neighbour. On the other hand, the complainant—who lives slightly further down the road—believes, on the basis of her recollection of the visible police presence in the road, that Ms Smith stays at her London address on Monday, Tuesday and Wednesday nights whilst Parliament is in session, and does not reside at the property for months and weeks during the summer, at Christmas or at other times when Parliament is in recess.

146.  Ms Smith believes that the best evidence of her overnight stays is derived from her ministerial diaries, supported by her personal recollections. The resultant figures, which take some account of the police evidence, are as follows:
FINANCIAL YEAR NIGHTS SPENT IN LONDON NIGHTS SPENT IN CONSTITUENCY DIFFERENCE
2005-06 (from 11 May 2005) 139128 11
2006-07 151131 20
2007-08 152151 1
2008-09 143161 -18

The police figures, taken with the diary estimates up to 27 June 2007, would suggest a difference of -12 nights in 2007-08 and -37 nights in 2008-09.

147.  The Director of Operations in the Department of Resources has confirmed that the cost of Ms Smith accommodating her family in her second home was, in the Department's view, acceptable under the rules. But it was open to Ms Smith to nominate her constituency home as her main home if the overall facts justified it. He has pointed out that while paragraph 3.11.1 of the Green Book sets out the presumption that a main home is where a Member spends more nights than any other, this is qualified by the word "normally" and Members are invited to consult the Department if in doubt.

148.  Ms Smith's view is that she made the best judgement she could: that she was likely to be spending more nights in London than in Redditch; that she had explicitly separated her family life in Redditch from her work life in London; that London was where she spent most of her time on her parliamentary and ministerial duties; that she would have been wrong to change the designation of her main home at any time from 1999, when she became a Minister, because nothing had qualitatively changed in her circumstances; and that it would have been more difficult to justify having her homes the other way around.

MEDIA PACKAGE

149.  In the course of the financial year 2008-09, Ms Jacqui Smith made claims against the Additional Cost Allowance for a total of 8 monthly payments for a Virgin Media broadband package supplied to her Redditch address. The basic package consisted of telephone line rental, and television and broadband services. In addition to the cost of the basic package, each of the claims also included charges for additional entertainment elements, including films and sport. The first such claim was submitted in May 2008 and included advance charges for April-May 2008. The last such claim was submitted in March 2009, and the last bill claimed for was dated 30 December 2008. Each claim was supported by a summary bill, except for the claim submitted on 4 June 2008, which was supported by an itemised bill, which included a detailed list of charges and which separately identified the costs of the basic package and of the additional entertainment elements. The claims covered eight months within the period from April 2008 to January 2009. There is no claim recorded for the months of June or November 2008. The total sum claimed by Ms Smith in respect of this package amounted to £553.20, of which some £185.20 was attributable to charges for the additional entertainment elements. All these claims were met. The Department of Resources did not identify the mistaken claim for film items in the claim submitted on 4 June 2008.

150.  The summary page of the bill submitted in support of the 4 June 2008 claim was re-submitted with the following two claims for September and October. The supporting documents subsequently requested by the Department of Finance and Administration in November 2008 were not supplied, since Ms Smith took the request to be in respect of future claims.

151.  The view of the Department of Resources is that Members may claim against the Additional Costs Allowance only for a basic subscription to digital suppliers, and that claims in respect of any additional services would not normally be appropriate. In its view, Ms Smith's basic Virgin Media package of telephone line rental, broadband connection and television services would be an acceptable claim against the Allowance. The Department takes the view that the additional cost of 'on demand' films, as included on the bill submitted in support of Ms Smith's Additional Costs Allowance claim submitted on 4 June, is not eligible expenditure against the Allowance.

152.  Ms Smith fully accepts that claims for entertainment are not allowed against the Additional Costs Allowance, has taken full responsibility for her mistake, and has apologised on several occasions for the fact that she wrongly claimed for the additional entertainment elements. On 28 March 2009, she repaid to the Department of Resources on her own initiative the sum of £400. This payment was made in recognition of her desire to repay her claims in respect of all television services supplied to her Redditch address through the Virgin Media package, namely, both the additional entertainment elements which she accepted should not have been claimed, and also the television element of the basic package, leaving the Additional Costs Allowance to meet the cost of only the most basic broadband and telephone package available.


 
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Prepared 12 October 2009