Appendix 1: Memorandum from the Parliamentary
Commissioner for Standards |
Complaint against Mr Shahid Malik
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
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.
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,
of what he described as "the unredacted insurance policy
and of a newspaper article from the Dewsbury Press of 11
3. The policy summary which Mr Scott had sent
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
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
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
"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
"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
c) You have necessarily incurred additional costs
in so doing, and
d) You represent a constituency in outer London or
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
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.
13. I wrote to Mr Malik on 14 January.
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
that Mr Malik had also claimed for a premium for extra cover for
his 2008-09 home contents insurance.
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.
He said that he had written to the Fees Office in the previous
week and had repaid the amount of £137.
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.
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.
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.
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.
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.
I told him that I had written to the Department of Resources to
invite their comments and advice on this matter.
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.
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
21. As mentioned in paragraph 19, I had also written
on 7 April to the Director of Strategic Projects at the Department
of Resources. 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.
On 26 April, after the House had dissolved on 12 April, I wrote
to the Director again,
and sent him a copy of Mr Malik's e-mail of 17 April,
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. 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.
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.
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),
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."
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
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.
He said that my letter to him of 26 April
had crossed with his letter to me of the same date,
and confirmed that nothing in that letter, or in the e-mail from
Mr Malik which I had sent with it,
would cause him to change the advice he had given in his letter
of 26 April.
27. I wrote again to Mr Malik on 18 May, the day
the new Parliament assembled.
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,
and of their responses of 26 and 27 April.
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
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).
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. 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]
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,
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.
I said that my letter of 18 May
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,
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.
He referred me to his email to my office of 21 May.
He commented that this "clearly demonstrates that an
extra premium was required for items over £1,500 at the timealthough
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
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 "
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.
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
until 7 April. 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
19 July 2010 John Lyon, CB
11 WE 1. Mr Scott's letter was incorrectly dated 14
Not included in the written evidence. Back
WE 2 Back
WE 3 Back
WE 2 Back
WE 3 Back
WE 4 Back
Not included in the written evidence Back
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
WE 5 Back
WE 6. See paragraph 16 below. Back
WE 6 Back
WE 7 Back
WE 4 Back
WE 8 Back
WE 9 Back
WE 11, summarised in paragraph 22 below. Back
WE 10 Back
WE 11 Back
Mr Malik had telephoned me on 7 April, shortly before sending
me his e-mailed response, to ask about this. Back
WE 12 Back
WE 10 Back
WE 13 Back
The Department has since confirmed that these payments were recorded
on 18 January and 21 January respectively. Back
First Report of the Members Estimate Committee, Session 2009-10,
HC 348. Back
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
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
WE 8 Back
WE 14 Back
WE 12 Back
WE 13 Back
WE 10 Back
WE 12 Back
WE 15 Back
WE 11 and WE 12 Back
WE 13 and WE 14 Back
WE 16 Back
WE 17 Back
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
The payment for 2009-10 was recorded on 18 January and that for
2008-09 on 21 January. Back
WE 18 Back
WE 15 Back
WE 17 Back
WE 19 Back
WE 16 Back
WE 7 Back
WE 8 Back