House of Commons - Anthony Wright - Standards and Privileges Committee

Anthony Wright - Standards and Privileges Committee Contents

Anthony Wright

Referral

1. In March 2010 our predecessor Committee published its report on the case of six Members who had accepted payments from the new owners of the Dolphin Square estate in London, where they were tenants, in return for giving up certain favourable tenancy conditions and rights. The Committee found that four had made serious misjudgements, having accepted payments from £8,000 to £18,000 in return for accepting less favourable tenancy conditions. The Committee recommended that each of these Members should apologise and should pay the House a proportion of the sum received from the landlord, after tax. The Committee found that the remaining two, who had each rejected an initial cash offer but accepted a smaller offer of £5,000 in return for giving up family tenancy rights, made misjudgements but had intended to act in the public interest. No sanction was recommended in these cases.[1]

2. On 22 March, following the publication of that report, the Commissioner received a complaint from Councillor Barry Stone regarding Mr Anthony Wright, then Member of Parliament for Great Yarmouth. The complaint said that Mr Wright had accepted a similar payment from the owners of Dolphin Square, and that in the opinion of the complainant, Mr Wright had breached the Code of Conduct for Members of Parliament.[2] We received the Commissioner's memorandum reporting on his investigation of this complaint on 20 January 2011. Mr Wright, who is no longer a Member of Parliament, was given the opportunity to submit oral as well as written evidence to the Committee. He submitted written evidence.[3]

The Commissioner's findings

3. In his memorandum, the Commissioner explains the sequence of events that took place when the head lease of the Dolphin Square flats was sold. As our predecessor Committee heard, the Dolphin Square flats had been run by the Dolphin Square Trust, a non-profit making body, which had held down rents to a low level. Many Members found the flats a useful and low-cost place to stay when in London.[4] Whilst living at Dolphin Square, Mr Wright claimed Additional Costs Allowance (ACA) which covered the cost of his rent at Dolphin Square, except for periods when Parliament was dissolved.[5]

4. In 2005, Westminster City Council sold the head lease of the flats. In October of that year, letters were sent to all tenants making them a number of different offers. As the Commissioner explains, the aim of the new owners appears to have been to encourage existing tenants, many of whom were on long leases which guaranteed advantageous terms, to give up their right to those terms.[6]

5. The three offers are summarised in the Commissioner's memorandum, as follows:

Option A, "Cash and Go" version, which would involve the current tenant being paid a sum of money by the new owners of Dolphin Square, who would secure vacant possession of the flat;
Option A, "Cash and Stay" version, which would involve the current tenant being paid a sum of money by the new owners of Dolphin Square, and staying in their flat at a higher rent, on an assured shorthold tenancy, with no security of tenure on expiry of the fixed term;
Option B, a fixed term lease that could run until June 2034, starting with a rent the same as the current rent but gradually increasing year on year.[7]

6. Solicitors retained by the Dolphin Square Trust sent advice to tenants of the flats. The advice explained the three main offers being made to tenants, and gave indications about which offer tenants might find most beneficial, depending on their future plans.[8]

7. The House of Commons service, and specifically the then Department of Finance and Administration, was aware at the time that the Dolphin Square offers were being made to Members. The Commissioner has been told that a decision was taken to prepare advice, which would be given to any Member staying in Dolphin Square who asked for guidance on what to do about the offered payments. This advice was produced on 1 November 2005, about three weeks before the deadline set by Dolphin Square's owners for tenants to respond to the offers. For reasons which are not clear, it was decided not to send the advice out proactively to Members who were tenants in Dolphin Square.[9] Our predecessor Committee, in its Eleventh Report of Session 2009-10, agreed with the Commissioner that the decision not to send this advice to Members was "deeply unfortunate" and "regrettable."[10]

8. The DFA's advice was reproduced in full in the Commissioner's memorandum to our predecessor Committee. In summary, it stated that there was "potential awkwardness" in accepting the payments because of the use of "public money ... to meet past rental costs either in part or in full." It advised Members who had claimed the whole of their rent from ACA to pass on to the House any money they decided to accept, because it would be "inappropriate to gain a personal benefit." Arrangements could be made to set the amount against future rental payments. Members who had claimed only a part of their rent would be advised that they could keep part of the payment.[11]

9. Mr Wright told the Commissioner he had accepted a lump sum of about £14,500 from the new owners of Dolphin Square; he took the "Cash and Stay" option outlined above.[12] After he accepted the payment and the old arrangements ended, the rent on his flat increased by 30% over a thirteen-month period.[13] Mr Wright told the Commissioner that the rent had in the past increased year on year; however, he accepted it would not have risen as quickly under the previous arrangements.[14] From May 2008, Mr Wright terminated his lease at Dolphin Square and switched to using hotels when in London, following a demand for a further increase in rent which he deemed would make the tenancy insufficient value for money.[15] His ACA claims then fell considerably, as did the figure within that sum which was claimed for accommodation costs. His ACA claims had been for £18,493 in ACA in 2004-05, and £21,631 in 2005-06; they fell to £12,770 in 2008-09 and £11,567 in 2009-10.[16]

10. Mr Wright told the Commissioner that he had sought advice from the DFA "by phone query" at the time when he became aware that the head lease of the Dolphin Square flats was to be sold, in late 2004 or early 2005. This was some time before the Department prepared its agreed advice, produced on 1 November 2005. Mr Wright said that during the conversation he had been advised that "the lease was signed by me and therefore it was my responsibility as to what I did."[17] When questioned by the Commissioner, the Department of Resources said that it had no record of any advice being given to Mr Wright on that subject. Mr Wright supplied the first name of the member of staff who he said had advised him. The Department of Resources told the Commissioner that, at the relevant time, it had two members of staff with that first name. One had since left the Department; the remaining staff member had no recollection of advising Mr Wright.[18] The same first name was shared by the staff member who, during the course of our predecessor Committee's inquiry, had been named by two of the six Members as having spoken to a third Member (not Mr Wright).[19] The Commissioner notes that he has "no reason to doubt" that Mr Wright did seek advice.[20]

11. The Commissioner has set out the relevant rules of the House.[21] As he noted in his memorandum on the previous case of the six Members, the rules relating to Members' expenses deal primarily with the propriety of Members' claims against allowances; the detailed rules cannot easily be applied to a case such as this which concerns the receipt of payments.[22] However, the Code of Conduct states that Members must avoid conflict between their personal interest and the public interest, and must "resolve any conflict between the two, at once, and in favour of the public interest."[23] The Commissioner notes that Mr Wright was only in a position to benefit from the payment made by the new owners of Dolphin Square because of the claims he had made from ACA which had covered the full costs of his tenancy (except during General Election periods).[24] He concludes that the public purse, which had funded the ACA, should have benefited from the payment; and that, in deciding to keep the payment, Mr Wright put his own interest before the public interest. The Commissioner finds that in accepting and keeping the payment Mr Wright breached the Code of Conduct for Members of Parliament and committed a serious misjudgement.[25]

12. In addition, the Commissioner discovered during his investigation that Mr Wright had made an additional claim for £3,050 for the second quarter of 2005-06, making five quarterly claims for that year.[26] Mr Wright's evidence was that the extra claim had not been intentional. He told the Commissioner one possible explanation for the mistake was that he might have assumed that his April 2005 claim for rent had been reduced to exclude the period following the dissolution of Parliament; this would have meant he would need to put in an extra claim to recoup the amount that covered the period after the House re-assembled. Mr Wright has told the Commissioner that he will repay the extra money which he mistakenly claimed.[27] The Commissioner finds that the error was a serious one, although there is nothing to suggest that it was deliberate. He also notes that the House authorities, and the later review of Members' claims by Sir Thomas Legg, failed to identify the double claim.[28]

13. During the early part of the Commissioner's investigation, there were long delays before Mr Wright replied to the Commissioner's letters. It took nearly six months for him to respond to the Commissioner's first letter, sent before the General Election of 2010, although the Commissioner had sent a number of reminders.[29] He told the Commissioner that after losing his seat at the General Election, his "priorities [were] different."[30] When the Commissioner wrote to Mr Wright with further questions, Mr Wright did not respond for almost two months.[31] Although Mr Wright later co-operated more promptly with the investigation, the Commissioner says that the early delays "unnecessarily prolonged and complicated the conduct of this inquiry." He says he regrets that Mr Wright "initially responded so sporadically to [the Commissioner's] requests."He notes that "Members—and, by analogy, former Members—are required under the Code of Conduct for Members of Parliament to co-operate at all stages with any investigation into their conduct,"[32] and judges that "Mr Wright failed to meet this requirement until the final stages of [the] investigation."He does not accept Mr Wright's explanation that the delays arose solely because of difficulties in picking up letters that had to be signed for. He notes, however, that Mr Wright has "voluntarily apologised for the delay".[33]

THE COST TO THE PUBLIC PURSE

14. The payment that Mr Wright accepted was not itself funded by the taxpayer, although he was offered the payment as a result of his tenancy which had been largely funded from Parliamentary allowances. As a result of his decision to accept the payment, his rent at Dolphin Square increased. The Commissioner notes that he has no evidence of what the rent would have been if Mr Wright had not accepted the payment, but that after the tenancy changed "the annual rental did indeed increase significantly—by £3,050 in 2006-07 (some 24%), and by £780 in 2007-08 (a further 5%)."[34] The total amount Mr Wright claimed from ACA did not increase significantly, perhaps because the amount he claimed was already close to the maximum allowed.[35] However, in 2008 Mr Wright stopped renting in Dolphin Square after a further rent increase was demanded. He switched to using hotels when in London. The result was that his ACA claims dropped significantly, to a level lower than in the years before he accepted the payment. The Commissioner invites us to "weigh the history of Mr Wright's accommodation claims" in reaching our conclusions.[36]

Mr Wright's evidence

15. With regard to his acceptance of the payment from the new owners of Dolphin Square, Mr Wright told the Committee that following the publication of the previous Committee's report on the six Members he had himself written to Sir Malcolm Rifkind, then Chairman of the Committee, asking for his own case to be looked at.[37] He told us:

I do understand the committee has to reach the same conclusion as it has previously even though circumstances are possibly different and when I wrote to Sir Malcolm Rifkind I stated I would abide by the ruling of the committee.

16. He noted that he had sought guidance from the Department of Finance and Administration before the offer was made, and that "in hindsight [he wished he had] done so again on receipt of the offer later in 2005." With regard to the propriety of his actions, Mr Wright noted that he felt there was a clear analogy between his own situation and that of a Member purchasing a property using ACA to fund the mortgage. He told us he understood that Members could no longer purchase properties using allowances, and that new guidance had been issued to Members making clear what they should do if they had claimed for mortgage interest under the old system, requiring them to repay profits. He said:

[...] whilst I understand the ruling that a member must not put themselves before the public with regard to any financial gain made I would have been doing the same had I purchased a property and subsequently sold it!

He pointed out that because he moved out of Dolphin Square and switched to staying in hotels, his claims fell considerably, resulting in "an overall saving to the public purse taking into account the new tenancy".

17. With regard to his extra claim for rent, Mr Wright said that it was "not intentional" and that he had sought, in correspondence with the Commissioner, to explain why it might have happened. He noted that although he believed the Department of Finance and Administration had queried the claim internally at the time, he had not been informed. He said:

On looking at the facts presented to me by the commissioner I have without question agreed to repay that amount. [...] If I had been contacted about this at the time [of the internal query] then there is no question that this would have been cleared up [and repaid] then and subsequent to that, had it been picked up in the audit, again it would have been cleared up.[38]

Conclusions and Recommendations

18. It is clear that there are considerable similarities between this case and those of the six Members who were the subject of the report of our predecessor Committee. Our predecessor Committee said in its report that:

[...] circumstances are likely to vary, substantially, from individual to individual. In our view, it would be grossly unfair to seek to apply by analogy the findings in this Report to the cases of other Members, in the absence of a thorough examination of the facts in each such case.[39]

We agree with that view, and we have reached our conclusions based on the particular circumstances of Mr Wright's case as presented by the Commissioner.

19. We agree with the Commissioner's view that the question of whether or not Members should have accepted the offer made to them as tenants of Dolphin Square and kept the proceeds is primarily an ethical question. The Code of Conduct provides that "Members shall base their conduct on a consideration of the public interest, avoid conflict between personal interest and the public interest and resolve any conflict between the two, at once, and in favour of the public interest."[40] Unlike any of the six Members whose cases were considered by our predecessor Committee, Mr Wright told us that he had sought advice from the House authorities. His evidence is that he was told it was up to him what he should do, and we see no reason not to accept his account.

20. However, we agree with the Commissioner that such advice cannot absolve Mr Wright from blame for breaching the Code. In taking his decision he was personally responsible for ensuring that he followed the Code and that any conflict between his own and the public interest was resolved at once in favour of the public interest. He had received allowances which had covered almost all of the costs of his tenancy and so the correct course of action when offered a cash payment in exchange for tenancy rights, and which would result in a higher rent, was not to keep the money for himself. Had the Department of Finance and Administration disseminated its agreed advice to all Members living in Dolphin Square, then it is likely that Mr Wright, and other Members, could have avoided breaching the Code. We agree with the assessment of our predecessor Committee that the Department's failure to take that step was deeply unfortunate and regrettable.

21. Mr Wright told the Commissioner that he saw his own position as similar to that of a Member who had bought a property using an interest-only mortgage funded through the ACA. He pointed out that such a Member would have been entitled under the rules to keep any proceeds from selling the property. We share the view of the previous Committee that the analogy is not close enough to be persuasive. A person buying a property may use an interest-only mortgage, but must usually provide a deposit, meaning he or she has a share of the equity in the property; he or she must also take responsibility for repaying the amount borrowed when the mortgage ends. A tenant does not have that responsibility.

22. We agree with the Commissioner that Mr Wright made a serious misjudgement in accepting and keeping the payment in exchange for giving up favourable tenancy rights on the flat he rented in Dolphin Square. We note that the money he received did not in fact come from the public purse, and that some of the costs of the tenancy, such as rent during periods of dissolution, were borne by Mr Wright. We also note that, perhaps because he was already claiming close to the maximum amount of ACA, the misjudgement did not result in an increased cost to public funds; and that after Mr Wright left Dolphin Square, his ACA claims fell considerably for his remaining two years in the House. We consider this a mitigating factor in deciding on a recommendation.

23. We consider that Mr Wright was correct to seek advice from the House authorities about what he should do. This is another mitigating factor, although the responsibility for his decision remains Mr Wright's.

24. We recommend that Mr Wright should pay to the House one fifth of the sum he received from the new owners of Dolphin Square, after deducting any capital gains tax he may have paid on the sum. We further recommend that he should apologise to the House in writing, through this Committee, within seven days of the publication of this Report.

25. We also agree that Mr Wright's error in making an extra claim for £3,050 in ACA was a serious one. We note that neither the Department of Finance and Administration nor the review by Sir Thomas Legg brought the mistake to light. We are pleased that Mr Wright has agreed to repay the £3,050 and on the assumption that he will do so without further delay we make no further recommendation in respect of that breach.

26. We note that there were significant delays on Mr Wright's part in responding to the Commissioner's inquiry. The Code of Conduct for Members of Parliament requires Members to co-operate with any inquiry by the Commissioner. In our view, a former Member who is the subject of a complaint which is being investigated by the Commissioner is under just as much obligation to comply with this aspect of the Code as a sitting Member. It is of great importance for the reputation of the House of Commons and its Members that the Commissioner is able to carry out his work effectively and without impediment. We take this opportunity to remind both Members and former Members of the importance of prompt and full co-operation with the Commissioner's inquiries. We welcome Mr Wright's apology to the Commissioner for delaying his investigation.

1 Standards and Privileges Committee, Eleventh Report of Session 2009-10, John Barrett, Sir Alan Beith, Sir Menzies Campbell, Sandra Gidley, Paul Holmes and Richard Younger-Ross, HC 491 Back

2 Appendix 1, para 12 Back

3 Appendix 2 Back

4 Appendix 1, para 2, and HC (2009-10) 491, para 4 Back

5 Appendix 1, paras 23-26 Back

6 Appendix 1, para 3 Back

7 Appendix 1, para 4 Back

8 Appendix 1, para 5 Back

9 Appendix 1, paras 6-7 Back

10 HC (2009-10) 491, para 19 Back

11 HC (2009-10) 491, Appendix, para 24 Back

12 Appendix 1, para 63 Back