CONCLUSIONS
154. I deal first with my conclusions on the
complaint about Ms Smith's claims for her media package and then
my conclusions on the complaint about the identification of her
main home for the purposes of her claims against the Additional
Costs Allowance.
MEDIA PACKAGE
155. Ms Smith has readily accepted that she should
not have included claims for entertainment items, including paid-for
films, in the claims she made for her media package against her
Additional Costs Allowance. This was because such items were clearly
not provided or necessary for the performance of her parliamentary
duties. It was unfortunate that this mistake was not picked up
by the Department of Resources on the one occasion when Ms Smith
submitted a detailed bill showing these items with the claim.
156. But this claim for additional items was
not a one-off occurrence. Ms Smith made claims above the basic
package costs in each of the eight claims she made since signing
up to this media package. She failed to notice that additional
entertainment items were being claimed for. She did not see the
itemised bill when it was included with her claims, and by her
own admission, did not check that claim carefully enough. I recognise
that she had many heavy responsibilities at the time, but nevertheless
she clearly did not treat her claims with the care expected of
all those who look for reimbursement from the public purse. She
told me that she was now checking her claims more carefully.
157. Ms Smith has already paid a heavy price
for these lapses, in terms of her public standing and the intrusion
into her family life. She has also already paid back £400
of the £550 claimed over the period of the contract, which
is considerably in excess of the sums represented by the additional
entertainment items, which I assess to be about £185. She
has apologised.
158. I conclude that Ms Smith was clearly in
breach of the rules of the House in claiming for additional entertainment
items on her media package in eight separate months in 2008-09
since these items were not necessary in the performance of her
parliamentary duties. I therefore uphold the complaint.
SECOND HOME
159. I need to reach a conclusion on whether
Ms Smith acted within the rules of the House in deciding to identify
her residence in London as her main home from 2004 to 2009 for
the purpose of the claims she made for her constituency home in
Redditch.
160. The rules as they applied from April 2004
to April 2009 meant that Members could only claim for a home under
the ACA if they had more than one home. The location of their
main home was held normally to be a matter of fact; it was normally
the one where they spent the most nights in the year. But the
rules very clearly allowed for exceptions. The normal expectation
relating to the number of nights could be set aside, and this,
in my judgement, meant that the rules did not require a Member
to identify a residence as their main home when that was manifestly
not the case. They allowed the Member to take account of their
particular circumstances. In this respect they differed fundamentally
from the rule applicable to Ministers before April 2004, which
deemed them to have their main homes in London, whether or not
that accorded with the facts. The principle that Members should
take account of their own circumstances is confirmed in the current
rule, which first came into effect in April 2009.
161. In considering the decisions made by Ms
Smith, therefore, I need to answer two questions:
i. Did Ms Smith have two homes? and
ii. Did she correctly identify her main home?
DID MS SMITH HAVE TWO HOMES?
162. On the basis of all the evidence I have
received, I consider that, for the purposes of her ACA claims,
Ms Smith has two homes - a home which she shares with her sister
and her sister's partner in London; and a home which she shares
with her husband and children in her constituency. The arrangement
she has for sharing her sister's home in London is more than some
sort of temporary room in a stranger's house. With one break,
it has been a longstanding arrangement that Ms Smith lives with
her sister and shares her home when they are both in London. She
has the run of the house. She pays a monthly rent and contributes
to the household expenses. She has underwritten her sister's mortgage
application. While her sister owns the house, in any normal understanding
of the term it is Ms Smith's home when she is in London.
163. Ms Smith's constituency residence is clearly
also her home. She has a mortgage on the property. It is a substantial
property which she shares with her husband and their children.
It is the home which she lives in when she is in her constituency.
164. I conclude therefore, that for the purposes
of her ACA claims, Ms Smith had two homes - a home which she shares
with her sister and her sister's partner in London; and a home
which she shares with her husband and children in her constituency.
DID MS SMITH CORRECTLY IDENTIFY
HER MAIN HOME?
165. Since Ms Smith had more than one home during
the period in question—2004 to 2009—and given that
one was in the constituency and one was in London, she needed
to identify which was her main home, and which was her second
home on which she would make ACA claims. Ms Smith identified her
London residence as her main home. She made claims on her house
in Redditch.
166. Ms Smith believed that the identification
of her London home as her main home was consistent with her role
as a Minister; that it reflected where, as a Minister, she spent
and was likely to spend most of her time (including most of her
nights); that she would have been criticised if, as a Cabinet
Minister, she had sought to have her main home in her constituency
because it would imply she was a "part time Home Secretary".
And she considered that she should only have changed the identification
of her main home when the ministerial rules changed in 2004 if
there had been a qualitative change in her circumstances, which
in her view there had not been. Ms Smith has accepted that she
had a choice. She considers that the choice she made was fully
within the rules of the House as they were at the time, and that
this choice properly reflected her personal circumstances and
her ministerial commitments.
167. I agree that Ms Smith had a choice, but
I consider that the choice she made was not consistent with the
rules of the House. I consider that was because her decision gave
insufficient weight to the nature and use of her two homes and
the balance of nights she was to spend in London and in Redditch.
168. The rules provided that when the location
of a Member's main home was not a simple matter of fact (because
the Member had more than one home), the objective test was that
their main home was normally the one where the Member spent more
nights than any other. Ms Smith has said that she judged that,
as a Minister, she would be spending more nights in her London
home than in her Redditch home. On the evidence I have seen, this
proved to be a correct prediction for the period until she was
appointed Home Secretary in May 2007. But even so, she had the
option of identifying Redditch as her main home had she considered
the normal expectation did not fit her personal circumstances.
She did not do so. She also had the option of changing her designation
once it became clear to her, as it would seem likely to have become
clear some time towards the end of 2007, that as Home Secretary
she was spending more nights with her family in Redditch than
she was spending in her London home. That would have meant accepting
the objective test as meeting her personal circumstances. She
did not do so. In my view, this was because 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.
169. Instead, Ms Smith seems to have put her
main emphasis on where she felt she was spending most of her time
as a Minister, which was clearly London. This conclusion is reinforced
by Ms Smith's telling me after our concluding interview that,
if she could, she would now identify Redditch as her main home
because she had ceased to be Home Secretary. That decision is,
in my judgement, right, but, I believe, for the wrong reasons.
It is not the change of job which should count, but the nature
and use of the Member's accommodation and the pattern of their
overnight stays. 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".
The question is not where a Member spends their working life.
It is where the Member spends most time when they are at home
and whether that location is, in reality, their main home. The
nature of the accommodation and how it is used, are both significant
factors in determining where a Member's main home is situated.
170. In coming to a conclusion, therefore, on
this matter, Ms Smith's pattern of overnight stays is an important
factor, but not the sole consideration. Had it been, then she
would have been in breach of the rules from some point after she
became Home Secretary in May 2007 because from then she started
to spend more nights in Redditch than she did in London.
171. The police figures suggest a considerably
greater use of the Redditch home for overnight stays than the
estimates based on Ms Smith's diaries. I have accepted the diary
based figures as being, on the balance of probabilities, the
most likely reflection of her overnight stays. But since these
were not the sole determining factor, I do not believe the choice
of figures substantially affects my conclusions. The direction
is clear. After becoming Home Secretary, Ms Smith spent more nights
in her home in Redditch than she did in her home in London.
172. Since the number of nights is not the sole
determining factor, it is necessary to consider whether the exception
provided by the rules should have been used by Ms Smith to reflect
more accurately her personal circumstances. And it is to that
I now turn.
173. The home Ms Smith owned is the home in Redditch,
not the home in London. Her husband lives in Redditch. Her children
are being brought up there. They are a close-knit nuclear family.
When her ministerial duties and her parliamentary duties in London
allowed, she returned to Redditch overnight. She was able to spend
a substantial number of nights there throughout the period in
question. From 2007, she started to spend more nights there than
in her London home.
174. On the other hand, the London home is not
owned by Ms Smith, but by her sister. It is the full-time residence
of her sister and her sister's partner. She lives there when she
has to stay overnight for her work in London, but not substantially
or frequently for other reasons. While clearly Ms Smith is close
to her sister, her life outside her work (limited though I am
sure it had to be) is not based in her sister's home in London;
it is based in her family home in Redditch. The gravitational
pull in terms of family and property is, on the basis of all the
evidence I have seen, Redditch and not London.
175. 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.
176. 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.
177. I add the following postscripts to my conclusion:
1. Ms Smith should have identified to the Department
of Resources the change in the address of her main home in London
when she and her sister moved in 2008. She did not do so until
after this inquiry began. Failing to notify the Department properly
of such a change was a breach of the rules. Ms Smith has accepted
that she breached the rules in this regard. I have no evidence,
however, that it would have made a material difference to any
of her expenses claims.
2. Ms Smith has argued that, when the rule for Ministers
changed in 2004, there was no reason for her to change her designation
since there had been no change in her circumstances. There was,
of course, a change in her circumstances on becoming Home Secretary,
since, importantly, the pattern of her overnight stays changed
and she should have responded to that. In any event, when rules
change (as they now have with the new Green Book for 2009) then
Members do need to check their circumstances against the new rules,
even if those circumstances have not changed, to ensure that they
remain compliant. It is imprudent for Members to assume that the
changes in the rules will not affect them as long as their own
circumstances do not change.
3. Ms Smith has argued that her expenses claims for
her Redditch property provided better value for money than her
likely claims for her London home. I have no way of knowing what
Ms Smith's claims might have been, although it might be difficult
to see how they could, under the current ownership arrangements
for the London home, match those for Redditch, since Ms Smith
could not have claimed for mortgage interest or rent on that home.
But in any event, given that until 2008-09 Ms Smith's Redditch
claims were near the maximum amount available each year, it is
difficult to see how these could have been significantly exceeded
by her claims on a London property.
178. I conclude, therefore, 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.
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. Ms Smith was also in
breach of the rules in failing to notify the House authorities
promptly of the change of her address in London in April 2008.
11 September 2009 John Lyon CB
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