Shahid Malik - Standards and Privileges Committee Contents


Appendix 1: Memorandum from the Parliamentary Commissioner for Standards


Complaint against Mr Shahid Malik

Introduction

1. This memorandum reports on my inquiries into a complaint that Mr Shahid Malik, then the Member for Dewsbury, claimed against his Additional Costs Allowance (ACA) in March 2009 for costs which were not wholly, exclusively and necessarily incurred for the purpose of performing his parliamentary duties, namely the optional extra insurance cover he bought for a diamond engagement ring.  

The Complaint

2. On 14 December 2009, Mr Jonathan Scott of Earlsheaton, Dewsbury wrote to me "further to newspaper allegations and the examination of Mr Malik's ACA expenses for 2008-09" to complain against Mr Malik.[11] Mr Scott said that, according to his ACA expenses forms, Mr Malik had claimed £550 for buildings and contents insurance on his designated second home, and that £137 of the overall claim of £550 was a premium to cover "the diamond engagement ring that Mr Malik had purchased for his wife". Mr Scott said that "This part of the claim is clearly in breach of the rules and is in no way whatsoever an expense that Mr Malik incurred to ensure he could properly perform his parliamentary duties." Mr Scott attached copies of Mr Malik's claim form of 18 March 2009,[12] of what he described as "the unredacted insurance policy details"[13] and of a newspaper article from the Dewsbury Press of 11 December 2009.[14]

3. The policy summary which Mr Scott had sent[15] showed that Mr Malik had bought standard contents cover costing £160 for his additional home for 2009-10. This included replacement cover for valuables and personal belongings costing £1,500 or more where these were specified in the policy. Under this heading Mr Malik had specified a diamond ring to the value of £8,000. Mr Malik had also bought optional extra cover for this ring. This provided cover away from the home and, in addition, for accidental loss or damage. The additional premium was £137. The total cost of the insurance for both contents and buildings was £550.

4. The article in the Dewsbury Press[16] said that, according to expenses claims recently published by the House, Mr Malik had given his bride-to-be an £8,000 diamond engagement ring, and that "taxpayers are footing the bill for insuring the ring." The article said that the ring was itemised on Mr Malik's home contents policy for his second home, the cost of which he had claimed from his allowances, and that "the cost of insuring the ring is listed at £136.87."

5. The newspaper also reported that Mr Malik's office had issued the following statement: "Mr Malik is pleased that these latest figures have been released. He has consistently spoken (and voted) in favour of transparency and disclosure. Mr Malik is also pleased that Sir Thomas Legg has had the chance to audit these claims thoroughly. As you will remember Sir Thomas found that Mr Malik has acted fully within the ACA rules at all times, both in this year and in previous years. He concluded that Mr Malik has nothing to pay back, and nothing further to explain."

Relevant Rules of the House

6. 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."

7. The Green Book on Parliamentary Salaries, Allowances and Pensions set out the rules for the Additional Costs Allowance. As Mr Malik's claim for insurance for the period February 2009 to January 2010 was made against his Additional Costs Allowance for 2008-09, the relevant edition in this case is that of July 2006. In his introduction to the 2006 Green Book, Mr Speaker Martin wrote:

"Members themselves are responsible for ensuring that their use of allowances is above reproach. They should seek advice in cases of doubt and read the Green Book with care. In cases of doubt or difficulty about any aspect of the allowances or how they can be used, please contact the Department of Finance and Administration. The Members Estimate Committee, which I chair, has recently restated the Department's authority to interpret and enforce these rules."

8. Section 3.1.1 set out the scope of the Additional Cost Allowance as follows:

"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."

9. Section 3.2.1 set out the eligibility requirements as follows:

"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."

10. Sections 3.3.1 and 3.3.2 set out two of the principles applying to the Additional Costs Allowance. Section 3.3.1 provided:

"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."

Section 3.3.2 provided:

"You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is, obtaining an immediate benefit or subsidy from public funds or that public money is being diverted for the benefit of a political organisation."

11. Section 3.10.2 gave information on what qualified as allowable expenditure. It provided:

"Subject to paragraphs 3.1.1 to 3.10.1 you can claim reimbursement for the expenses listed provided that they are wholly, exclusively and necessarily incurred in the course of your parliamentary duties."

12. Paragraph 3.13.1 listed examples of expenditure allowable under the Additional Costs Allowance. One of these was buildings and contents insurance for a home in respect of which the allowance was claimed.

My Inquiries

13. I wrote to Mr Malik on 14 January.[17] I asked him why he had purchased this extra cover from the contents insurance of his additional home; why he had put the extra cover on the insurance policy for his second home; and who owned the ring in question. I also asked Mr Malik whether and if so why he considered that his claim against the Additional Costs Allowance in respect of the extra cover for this jewellery was for a cost wholly, exclusively and necessarily incurred in the performance of his parliamentary duties. I asked him whether he had previously claimed for optional extra insurance cover for such jewellery, and if so for how much. In this context, I noted from his redacted claim of 19 December 2008[18] that Mr Malik had also claimed for a premium for extra cover for his 2008-09 home contents insurance.[19] Finally I asked Mr Malik whether he had had any discussions with the House authorities about claims for his contents insurance, together with copies of any related documentation.

14. Mr Malik replied on 19 January.[20] He said that he had written to the Fees Office in the previous week and had repaid the amount of £137.[21] Mr Malik went on to say, "I was unaware of the second amount until I received your letter ... I am checking with Finance and Admin this morning to establish what the second insurance item might be and if it is linked with the repayment I have already made then I will voluntarily repay a further £97.97." He continued, "I note however that Mr Scott's letter of complaint relates to the £136.87 which has been repaid and as such that matter is resolved. With respect to the element (£97.97) that you have highlighted in your letter I will deal with that today, although it is not the subject of the complaint."

15. Mr Malik went on to say, "With respect to the amount I have repaid voluntarily, although it had been accepted, processed, and paid as legitimate and also externally audited and accepted as being within the rules, I do not feel comfortable. Rather than putting forward a powerful argument and explanation I felt that the best course of action was to voluntarily repay money and avoid any doubt whatsoever in relation to my ACA."

16. Mr Malik sent me a copy of his letter to the Fees Office of 14 January.[22] In that letter he said that the sum of £137 had been "approved and paid by the House authorities as part of an insurance bill in 2008-09 and was subsequently successfully audited against the rules by Sir Thomas Legg's audit". However, Mr Malik went on to say that he intended to repay the amount to the House. He commented, "As stated, although it was accepted, paid and audited as legitimate, I feel slightly uncomfortable and would rather repay the amount to avoid any doubt whatsoever. I know that this is probably quite a unique case in that the bill has been approved at all levels of the House, including external audit, but I hope you will nonetheless respect my decision."

17. I replied to Mr Malik on 22 January.[23] I asked him to let me know as soon as possible about the second insurance item, which was included in the claim he had submitted on 19 December 2008. I also asked if, in responding to this point, Mr Malik could respond specifically to a number of matters I had previously asked him about in my letter of 14 January.[24] These were why he had put the extra cover on the insurance policy for his second home and who owned the ring in question and whether he had had any discussions with the House authorities about the claim for his contents insurance. I also asked for any comment that Mr Malik might have about the application of the rules to this particular part of his claim. I also told Mr Malik that, once I had his response, I would need to seek information and advice from the Department of Resources, and would then need to come to my own view on whether he was in breach of the rules in making these claims, while noting that he had already paid them (or at least one of them) back.

18. Despite a number of reminders from my office and undertakings to respond by particular dates, Mr Malik did not in fact reply until 7 April.[25] In his e-mailed response, Mr Malik apologised for the delay in responding, and said that the second insurance item, as with the first, related to his wife's engagement ring. He commented, "As I recollect the insurance was initiated over the phone where I was asked if I had any items in the home worth £1,500 plus. The only item worth that much that needed to be in my second home was the ring, as obviously it came with my wife. I do not recollect any discussion about extra cover but I would have been anxious to simply answer the questions asked honestly and to give full disclosure." Mr Malik said that he had received the insurance bill, paid it and sent it to the Department of Resources for processing. He added, "They duly processed it and it was later cleared by Sir Thomas Legg's audit. When I became aware of the extra cover, in December I think, I felt the best course of action was to pay back the extra cover amount to avoid any doubt whatsoever." Mr Malik also said that he "did not have any discussions with the House authorities nor did they ever question the payment and as stated it was also cleared by Sir Thomas Legg." Mr Malik continued, "Irrespective of the outcome of your deliberations I have no intention of claiming the money back."

19. I responded to Mr Malik on the same day, 7 April.[26] I told him that I had written to the Department of Resources to invite their comments and advice on this matter.[27] I asked Mr Malik to confirm that he had repaid £98 for 2008-09 (as well as £137 for 2009-10). I asked him also for confirmation that that was the first year in which he had taken out (and subsequently claimed for) that particular item of insurance.

20. Mr Malik e-mailed my office on 17 April.[28] In this e-mail, he confirmed that he had repaid the premium for 2008-09, and that 2008-09 had been the first year in which he had taken out (and subsequently claimed for) that particular item of insurance.

21. As mentioned in paragraph 19, I had also written on 7 April to the Director of Strategic Projects at the Department of Resources.[29] I asked him if the Department could confirm whether Mr Malik had repaid the insurance premium of £98 for the optional extra cover for the year 2008-09, as well as the sum of £137 for 2009-10. I also asked for any information available to the Department about whether this matter had been considered in the course of Sir Thomas Legg's audit; whether there was any record in the Department of this particular part of Mr Malik's invoice being considered before the payment had been made; and for the Director's views on whether, in the light of the information now available, he considered that the claim was eligible under the Additional Costs Allowance, taking into account that it appeared that the cover was to insure valuables while the holder was away from the home, as well as against accidental loss or damage. Finally, I told the Director that Mr Malik had asked whether it would be possible for me to have resolved this complaint before the Dissolution of Parliament, and that I had told him that it must be likely that it would not be possible for me to do so.[30] On 26 April, after the House had dissolved on 12 April, I wrote to the Director again,[31] and sent him a copy of Mr Malik's e-mail of 17 April,[32] so he could take it into account when preparing the Department's advice on the complaint.

22. The Director of Strategic Projects responded on 26 April.[33] The Director said he had first seen my letter on 9 April, that Mr Malik had contacted the Department the same day, and that he had spoken to him. The Director said that he had explained to Mr Malik that he would not be able to respond before the Dissolution of Parliament and that Mr Malik "understood this". He said that Mr Malik had repaid both the extra insurance premium of £137 for 2009-10 and the premium of £98 for 2008-09.[34] He also said that the Department had no knowledge of the issues considered during Sir Thomas Legg's inquiry, other than those referred to in the published report.[35]

23. As to whether Mr Malik's claim for insurance cover for a diamond engagement ring had been eligible under the Additional Costs Allowance or its successor, the Personal Additional Accommodation Expenditure (PAAE)[36], the Director commented, "The purpose of ACA/PAAE was to reimburse Members for the additional expenses necessarily incurred in staying overnight away from their main home. Insurance was an eligible cost. It was also always understood that spouses were entitled to stay at a Member's additional home and that the marginal extra costs of doing so would be an acceptable charge on ACA/PAAE." The Director continued, "It would be possible therefore to argue that, if Mr Malik's wife had an engagement ring of which the value was not covered against perils arising in the additional home without an additional premium, the cost of that premium ought to be an eligible expense. Engagement and wedding rings are symbolic of marriage and regarded differently from other jewellery, and it might be thought to be unreasonable to expect Mrs Malik not to wear the ring when she stayed with Mr Malik at the home, or for the ring to be uninsured when she wore it there. Otherwise, if Mr and Mrs Malik had paid for the insurance themselves, they would thus personally have incurred a cost in respect of additional expenses necessarily incurred in staying overnight away from their main home when Mr Malik performed his parliamentary duties."

24. However, the Director also said that he "would have expected the Department to have spotted that an extra premium was being charged in respect of the ring, and to have asked Mr Malik why it was not possible for the risk to be borne on the insurance for his main home and thus paid for from his private funds. They should also have noticed that the cover extended to perils away from the home and to accidental loss or damage. Since this element would not have been eligible for reimbursement under ACA/PAAE, they should have questioned whether Mr Malik could not have opted out of the elements of cover which extended beyond perils in the additional home and paid a lower premium." The Director continued, "If Mr Malik had demonstrated that his main home insurer would not insure the ring against perils such as theft while it was in the additional home, then insurance for this particular risk might have been regarded as allowable."[37] The Director added that there was "no record that the part of Mr Malik's invoice relating to insurance cover for the engagement ring was specially considered by the Department, and we agree with Mr Malik's statement in his e-mail to you of 7th April[38] that the matter was not discussed with the Department and the payment was not questioned. Therefore there is no evidence that the process of reasoning and due diligence which the Department should have shown did, in fact, occur."

25. Summing up, the Director commented, "In essence, while it is conceivable that a case may have been made that the additional insurance for the ring was allowable, there should have been careful and documented consideration of the issues involved. Even then, I suspect that it is unlikely that the full cost of insurance for the ring would have been regarded as eligible for reimbursement under ACA/PAAE. I therefore believe that it was right for Mr Malik to reimburse the Department."

26. The Director wrote to me again on 27 April.[39] He said that my letter to him of 26 April[40] had crossed with his letter to me of the same date,[41] and confirmed that nothing in that letter, or in the e-mail from Mr Malik which I had sent with it,[42] would cause him to change the advice he had given in his letter of 26 April.[43]

27. I wrote again to Mr Malik on 18 May, the day the new Parliament assembled.[44] I told him that I did still need to resolve this complaint even though I recognised that he had not been successful in the recent General Election. I enclosed copies of my letters of 7 and 26 April to the Department,[45] and of their responses of 26 and 27 April.[46]

28. I told Mr Malik that I needed now to consider how best to resolve this complaint. Having carefully considered the matter, including the Department's advice, I said that I was minded to conclude that he should not have claimed the full amount for the optional extra cover for his wife's engagement ring against the parliamentary allowances and that he was, therefore, in breach of the rules for having done so. I also told Mr Malik that I was minded also to conclude that he had taken the necessary and appropriate action to rectify the matter by reimbursing the Department for the two sums involved, at a total cost of £235. I said that if he agreed with these conclusions, it would be open to me to rectify the complaint on this basis. If I did so, I would write to the complainant, setting out the facts of the case and my conclusions on it. I told Mr Malik that the Committee on Standards and Privileges would also expect in such circumstances that he would have apologised. I said to Mr Malik that, on that basis, I would close the complaint and, in due course, report the outcome to the Committee on Standards and Privileges.

29. I also told Mr Malik that if he did not agree to my conclusion that the matter could be resolved by way of rectification, then, subject to any further points he might wish to put to me, I would need to consider, despite the nature of the breach, preparing a full memorandum to the Committee on Standards and Privileges so that it could consider the matter and make any appropriate recommendations to the House.

30. Mr Malik emailed my office on 21 May to say that he had spoken to a call centre for an insurance company (different to the one who insured his second home at the time).[47] Mr Malik told my office that the call centre had said that there would be an extra premium today for anything named in the household above £2,000 but if it was for home cover only and not cover outside the home then the extra premium would be less. Mr Malik added, "This clearly demonstrates that it is possible to disaggregate the premium and indeed it is the everyday business of [the insurer] to do so."

31. Mr Malik replied on 7 June to my letter of 18 May.[48] He said that, as stated by the Department of Resources, he "had attempted to bring the matter to a conclusion in April but they felt there was insufficient time", a view he said he "respected". He said that prior to this he "was unable to give the matter the time [he] would have liked between [his] ministerial and MP roles and while giving consideration to [my] substantive inquiry."[49]

32. Mr Malik said that, "In essence the Department's response states firstly, that the extra insurance premia of £97.97 (2008-09) and £136.87 (2009-10) [were] fully or at least partially eligible. Secondly, the Department concedes that had it dealt with the matter in an appropriate manner with due diligence and provided the necessary advice on two separate occasions then the current situation would not have arisen." He continued, "If the premia [are] only partially eligible, as the letter from the Department of Resources suggests, then this matter should have been picked up not only by the Department but also by Sir Thomas Legg's audit team. Had his team raised the matter while conducting their audit, then like some 400 other MPs, I would simply have repaid the amount in question. For my part, I am pleased that there is a consensus that I did at all times act honestly, openly and in good faith. In addition, even though at least part of the insurance premia [have] been deemed as eligible, and insurers have confirmed that they could disaggregate the premia, I have no intention of asking for any money back. I unilaterally took the decision to pay the money to Parliament to show leadership and for the avoidance of any doubt. The Department's retrospective judgement, although obviously very welcome, will not alter that decision."

33. Mr Malik commented, in light of the Department's letter, that "there has undoubtedly been a failure to provide a duty of care when processing my two claims. In addition, it stands to reason that Sir Thomas Legg's audit team didn't raise the issue either because they felt it was eligible or because they were part of a collective failure in terms of a duty of care. The result is a wholly unnecessary and completely avoidable situation which diverts you from much more important work and causes me unwarranted anxiety and anguish. This type of situation can do nothing to help restore public confidence in Parliament's ability to understand and follow its own procedures, nor the confidence of MPs in getting fair and competent advice and audit services. I deeply regret the current scenario and can only hope relevant lessons have been learnt that help to rebuild confidence ... In conclusion, having unilaterally and swiftly repaid the premia to show leadership and avoid any doubt in December,[50] on payments which were twice approved by Parliament and then successfully audited by Parliament, will I hope now bring this matter to a close."

34. I wrote to Mr Malik again on 8 June.[51] I said that my letter of 18 May[52] had set out the circumstances in which I was ready to resolve this complaint through the use of the rectification procedure. I told Mr Malik that I had carefully considered the points he had set out in his e-mail of 7 June,[53] but had concluded that his arguments were not such as to enable me to come to a different view on this matter. I also told Mr Malik that, like him, I did not consider, on the merits, that resolution of this matter should require submission to the Committee on Standards and Privileges, but on the assumption that he was not prepared to accept rectification on the basis I had proposed, I would now need to submit the matter formally to the Committee when it had been appointed. I added that, as well as commenting on the need for this course of action, I would clearly need also to draw attention to the length of time it had taken Mr Malik initially to respond to this complaint, a point which I acknowledged he had addressed in his letter and which I undertook clearly to note. I therefore asked Mr Malik to confirm by close on 10 June my understanding that he did not accept rectification on the lines set out in my letter of 18 May, for the reasons set out in his letter of 7 June.

35. Mr Malik did not respond. I therefore proceeded to prepare the factual sections of this memorandum, which I sent to him on 21 June, so he could comment if necessary on its factual accuracy. Mr Malik responded by e-mail on 2 July.[54] He referred me to his email to my office of 21 May.[55] He commented that this "clearly demonstrates that an extra premium was required for items over £1,500 at the time—although the extra premium would be less if cover outside the home were not included." He said that, using the logic of the Department of Resources, this showed that the claim was "at least partially eligible".

36. Mr Malik said that if he had thought there was a problem then he "would have discussed the matter or if there had been a problem then I would correctly have expected the Department to make me aware on either of the two occasions they potentially could. I did not hide any facts nor attempt to mislead in any way, I simply gave full information in an open and completely transparent format to the Department." He said that it was "quite obviously the role of the Department to scrutinise [his] claims". If the Department had felt they were inappropriate in any way he would have expected them to make him aware, and he would then have followed their guidance. "The undeniable fact is that they have failed me not the other way around yet it is I who appear to be in the dock. They were the experts paid to scrutinise and if in this case there is a potential partial breach it is fair and proper to put it down to their negligence." He added that he had no doubt that many other MPs would fall foul of this breach if their claims were scrutinised.

37. Mr Malik added that "…the alleged partial unwitting breach took place after twice transparently and fully submitting my insurance bills and it subsequently also being cleared by external auditors brought in precisely to look into compliance. These were not any old auditors but Legg was charged with helping restore public confidence in our democracy and as such was to take a tooth and comb approach…" He said that if his claim had been a problem for Sir Thomas Legg, Sir Thomas would have asked him to pay it back, "nothing more", and Mr Malik would have done so. Mr Malik said he believed that fairness dictated that the same should apply equally now. He noted that he had already repaid the money.

38. Mr Malik concluded by saying that "There is a belief in parts of this country that nothing is too bad for MPs, but your job must surely be to stand up against this lynch mob pressure and to deliver fairness in your findings and to uphold and promote decent honest standards."

Findings of Fact

39. Mr Malik claimed against the ACA for an insurance policy in respect of the buildings and contents of his additional home. In relation to the cover for both 2008-09 and 2009-10, Mr Malik took out and claimed for optional extra cover for a diamond engagement ring with a declared value of £8,000, at an additional cost of £98 for 2008-09 and £137 for 2009-10. This additional premium provided cover for the ring whilst away from his additional home, and in addition cover against accidental loss or damage. The ring was already covered under the standard contents cover for perils within his additional home, for which the total premium was £110 for 2008-09 and £160 for 2009-10. Any additional cost under the standard cover on account of the value of the ring would have been included in the premium for that cover. Mr Malik did not discuss with the Department his claims for the optional extra cover before making them. Both claims were met by the Department of Resources in full and without comment. Mr Malik voluntarily repaid the 2009-10 premium of £137 on 18 January and the 2008-09 premium of £98 on 21 January, a total sum of £235.

40. The Department of Resources accepts that it did not spot that an extra premium was being charged in respect of the ring, and that the cover provided extended to perils away from the home and to accidental loss or damage: this element would not have been eligible for reimbursement. The overall judgement of the Department is that it is unlikely that the full cost of insurance for the ring would have been regarded as eligible for reimbursement. The Department therefore considers that Mr Malik had been right to repay the premiums.

41. Mr Malik takes the view that the Department of Resources now accepts that the extra premiums were at least partially eligible for reimbursement from the allowances. Both payments had at the time been accepted by the Department of Resources, and subsequently by Sir Thomas Legg's audit of Members' expenses. Nonetheless, when he became aware of the extra cover he had felt that the best course of action was voluntarily to repay the premiums both to show leadership and to avoid any doubt whatsoever. He says that there is a consensus that he at all times acted honestly, openly and in good faith. He nonetheless feels that the Department failed in its duty of care to him when processing the two claims, and that Sir Thomas Legg's audit team had not raised the issue, either because they felt the expenses were eligible, or because they were part of a collective failure in terms of a duty of care. Mr Malik believes that he had no reason himself to consult the Department since he did not believe there was a problem with his claim. He provided full details of his claim on two separate occasions and considers that it was the Department's responsibility to raise any issues with him. If there was any breach, it was down to their negligence. He believes that the Department and Sir Thomas Legg's audit team should shoulder the weight of responsibility in this case. He considers the matter should have been ended by his repayment of the sums concerned without the necessity for me to make a finding in respect of any breach of the rules.

Conclusions

42. The issue I am to resolve is whether Mr Malik was in breach of the rules in claiming in 2008-09 and 2009-10 from parliamentary resources for the cost of optional extra insurance cover on his wife's diamond engagement ring. This insurance provided cover when the ring was away from their second home and, in addition, for accidental loss or damage.

43. I consider this element of Mr Malik's claims to have been a clear-cut breach of the rules. The claim for the cost of this optional extra cover was not necessary in order to meet the costs of Mr Malik's overnight stays away from his main home on parliamentary duties. Mr Malik's standard insurance cover for the second home was an acceptable expense. And that already covered the ring for the specific perils provided by the standard contents cover. The cost of this was thus included in the premium for which Mr Malik was entitled to receive reimbursement. The additional premium for the optional extra cover added some 70% to the cost of the contents cover for both 2008-09 and 2009-10. It was cover which specifically related to the ring when it was away from Mr Malik's second home. It could not therefore be part of the cost of Mr Malik staying overnight in that house. It also made provision for accidental loss or damage to the ring. It was self-evidently an extension of the standard cover. In my judgement, it was not necessary for the additional cost of any of this optional extra cover to be met from parliamentary resources.

44. Mr Malik's evidence is that he did not remember any discussion with the insurers about the extra cover. He simply received the insurance bill, paid it, and sent it to the Department for reimbursement. While anybody would be wise to check an insurance policy before accepting it, I consider that Mr Malik had a particular responsibility to check carefully the cover he was offered before seeking to have it funded from parliamentary allowances. The Department of Resources has accepted that they too should have checked the claims more closely, but I do not believe that that absolves Mr Malik from the primary responsibility.

45. Mr Malik has criticised both the Department and Sir Thomas Legg's audit for not picking up any problems with these claims. But he does not appear to have recognised or accepted his own responsibility for these errors. I believe it would have been right for him to have done so, both because he should have checked the cover offered and because any perceived shortcoming by others does not, under the rules, absolve Members of their personal responsibility for their use of parliamentary allowances.

46. Mr Malik has argued, bolstered by his interpretation of the Department's comments, that he would have been entitled to claim for insurance for accidental loss or damage to the ring within his second home, which formed part of the optional extra cover. If it was an error, it was therefore only a partial one. The Department itself makes a number of interesting hypothetical points, including that this additional cost should have been part of the Member's main home insurance. But the fact is that this extra cover was a package, and a major element of the package was cover for the ring whilst it was away from Mr Malik's second home. That particular package could not in my view be justified as necessary in order to meet the costs of Mr Malik's overnight stays away from his main home on parliamentary duties.

47. It is, I believe, artificial and unconvincing to try retrospectively to fillet out parts of the package. I therefore come to no conclusion on any alternative, other than to recognise that it might have been possible to have developed a different package, as Mr Malik has sought to demonstrate by retrospectively checking possible options with insurers. But the fact is that, at the time, Mr Malik did not seek different cover. He accepted the optional extra cover package offered by the company in respect of the ring, and claimed the additional cost thus incurred against his allowances. In doing so, he was in my judgement in breach of the rules, and that breach related to the total optional extra package which he bought for the ring.

48. This complaint has taken far too long to resolve. The primary reason is that, despite regular reminders and a series of undertakings from Mr Malik, he failed to respond to the questions in my letter of 22 January[56] until 7 April.[57] This was shortly before the Dissolution of Parliament on 12 April. The result has been that this comparatively straightforward matter has taken much longer to conclude than it need have done had Mr Malik responded more promptly.

49. Mr Malik is right, in my view, to point out that he was open in submitting his claims to the Department of Resources, and it was unfortunate that they did not spot the nature of the extra cover bought and challenge it. And it is to Mr Malik's credit that he decided quickly to repay the cost of the premiums for both years, a total cost of £235. I think that he was also right to have felt uncomfortable about these costs once they were drawn to his attention. But he was mistaken in thinking that, following my receipt of a substantiated complaint, the matter could have rested there. It is my responsibility in accepting a complaint to form a judgement about whether on the basis of the evidence, the Member was in breach of the rules of the House. It is, in my view, therefore, unfortunate that Mr Malik did not recognise this and demonstrate the same dispatch in responding to the complaint as he did in making the repayment. I think it is also unfortunate that Mr Malik has declined to recognise his personal responsibility, even for that part of the error which he appears to have accepted. As a result of both his lack of timeliness and his avoidance of responsibility, in my judgement he made more serious what would otherwise have been an unfortunate but not serious error.

19 July 2010  John Lyon, CB



11   WE 1. Mr Scott's letter was incorrectly dated 14 November. Back

12   Not included in the written evidence.  Back

13   WE 2 Back

14   WE 3 Back

15   WE 2 Back

16   WE 3 Back

17   WE 4 Back

18   Not included in the written evidence Back

19   According to the policy summary that had accompanied this claim (not included in the written evidence), the additional premium charged was £98, and the cost of the standard contents cover was £110. Back

20   WE 5 Back

21   WE 6. See paragraph 16 below. Back

22   WE 6 Back

23   WE 7 Back

24   WE 4 Back

25   WE 8 Back

26   WE 9 Back

27   WE 11, summarised in paragraph 22 below. Back

28   WE 10 Back

29   WE 11 Back

30   Mr Malik had telephoned me on 7 April, shortly before sending me his e-mailed response, to ask about this. Back

31   WE 12 Back

32   WE 10 Back

33   WE 13 Back

34   The Department has since confirmed that these payments were recorded on 18 January and 21 January respectively. Back

35   First Report of the Members Estimate Committee, Session 2009-10, HC 348. Back

36   As Mr Malik's claim for insurance for 2009-10 was made against his 2008-09 Additional Costs Allowance, the rules on PAAE (which was effective from 1 April 2009) did not apply.  Back

37   Insurance against perils such as theft arising in the additional home appears to have been included in the standard contents cover. The ring was disclosed in the policy as a valuable item (see WE 2). Back

38   WE 8 Back

39   WE 14 Back

40   WE 12 Back

41   WE 13 Back

42   WE 10 Back

43   WE 12 Back

44   WE 15 Back

45   WE 11 and WE 12 Back

46   WE 13 and WE 14 Back

47   WE 16 Back

48   WE 17 Back

49   The expression "substantive inquiry" used by Mr Malik is a reference to a complaint against him that I investigated and did not uphold. The essence of the complaint was that Mr Malik had made claims against his Incidental Expenses Provision for a second constituency office which were not wholly, exclusively and necessarily incurred for the purpose of performing his parliamentary duties and whose proceeds may have been used to meet his personal costs. On reading this footnote when commenting on the accuracy of the factual sections of this memorandum, Mr Malik asked on 2 July that I should record that the inquiry took ten months. He has told me that he considers that it "cleared him of any wrongdoing." Back

50   The payment for 2009-10 was recorded on 18 January and that for 2008-09 on 21 January. Back

51   WE 18 Back

52   WE 15 Back

53   WE 17 Back

54   WE 19 Back

55   WE 16 Back

56   WE 7 Back

57   WE 8 Back


 
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