House of Commons - Maria Miller - Committee on Standards

Maria Miller - Committee on Standards Contents

1 Report

Introduction

1. This case deals with a complaint that Mrs Maria Miller, the Member for Basingstoke, misused parliamentary allowances between her election to Parliament in 2005 and April 2009. The original complaint related to the possible use of allowances to defray the living costs of Mrs Miller's parents, and to the size of her mortgage claims relative to the purchase cost of the property. The expenses claims in question were all made in the previous Parliament, under the old system for expenses. That system has now been completely reformedand rules are set and payments administered by an independent body.

2. The passage of time has meant that some documents are no longer held by either Mrs Miller or the House authorities. There may never have been records of some of Mrs Miller's conversations with the former House of Commons Department for Finance and Administration (DFA), not because of impropriety, but because such records were not customarily held at the time.

3. The rules against which Mrs Miller must be judged are those applying at the time, not those which currently apply. Those rules changed at various times over the period, and that must also be taken into account. We have nonetheless been able to come to clear conclusions. In dealing with this case, we have applied the standard of proof set out in the procedure for investigations approved by the Committee on Standards and Privileges in 2012, namely:

It should be noted that this is a lower standard than that for criminal cases.

The previous expenses system

4. The expenses system in 2005 recognised that Members of Parliament were expected to work and live in two places. The report of the Speaker's Conference on Parliamentary Representation gives some idea of the disruption that this can cause:

[…] when the House of Commons is sitting Members are generally required to be present at Westminster from Monday lunchtime until late afternoon on Thursday. Most Members will then return to their constituencies where they will work on local issues through Friday and the weekend, making themselves available to help constituents at times when the constituents themselves are free. When the House is not sitting, most Members expect to spend their time working in the constituency unless they are formally taking leave.

247. [...]

5. The cost of a second home was met through the Additional Costs Allowance (ACA). This covered rent or mortgage interest (but not capital repayment) of a second home. ACA could also be used for a range of costs, including council tax, utilities, insurance, cleaning, furnishings, necessary repairs, decoration, and the extra expense of food away from home. The total amount which could be claimed was capped as follows:

April 2005-March 2006 £ 21, 634

April 2006-March 2007 £ 22,110

April 2007-March 2008 £ 23,083[3]

Any costs above the cap were met by the Member personally.

6. There was no extra allowance for dependants. The rules provided that ACA should not be used to meet the living costs of anyone other than the MP personally but it was accepted that a Member's spouse and dependent children could share the second home.

7. The rationale for the ACA policy at the time was based on decisions made by the House many years earlier. In 1985 it was confirmed that mortgage interest could be reclaimed through ACA and that in "claiming this allowance the responsibility is upon Hon. Members to satisfy themselves that any moneys claimed have been necessarily incurred in pursuance of their Parliamentary duties and that they met all the other requirements set out in the resolution".[4] The rationale for allowing mortgage interest to be reclaimed was that it could be cheaper for the public purse to pay such interest rather than rent. The capital cost of the home would be met by the MP who would not only benefit from any gains, but would bear the loss if house prices fell, as they did in the early 1990s and after 2007.

8. The system since instituted from 2010 by the Independent Parliamentary Standards Authority (IPSA) has different rules for MPs in the London area and those outside it; the following describes the system for MPs whose constituency is outside the London area. Like the earlier system, total claims are capped, and some associated costs are covered, but only rent, not mortgage interest, may be claimed. Many things which could be claimed for under the former parliamentary arrangements, such as cleaning, are no longer chargeable. Unlike the previous scheme, under the IPSA Scheme MPs are entitled to an increase in allowance for each dependant living with them.[5]

9. Between 2005, when Mrs Miller entered the House, and 2008 very few of the complaints upheld by the Commissioner, or reported to the Committee even though not upheld, dealt with ACA payments. The first significant cases arose in June 2008. Even so, in the Committee's response to the Senior Salaries Review Body (SSRB) review of parliamentary pay, allowances and pensions the Chair of the Committee warned:

The time taken to deal with this case

10. As is well known, the complaint against Mrs Miller was made on 11 December 2012. The Commissioner was able to gather information about Mrs Miller's parents' situation, but there was subsequently protracted correspondence about other matters. The Commissioner submitted a memorandum to us on 23 January 2014. In the interval between the submission of that memorandum and the publication of this Report there has been a great deal of press speculation and comment, most recently on the weekend of 29 March.

11. The facts are as follows. Once received, the Commissioner's memorandum was shared with Mrs Miller on Monday 27 January, as is the Committee's invariable practice. Mrs Miller was invited to comment on it, if she wished. The memorandum is lengthy and did not reach Mrs Miller until Wednesday 29 January. She responded, as requested, by noon on 3 February. That response was also lengthy and raised procedural issues. At its meeting the next day, Tuesday 4 February, the Committee asked the Commissioner to respond in writing to the points raised by Mrs Miller. The Committee considered the documents in the case at its meeting on Tuesday 25 February and decided to request further information from Mrs Miller. That material took time to gather, and there have since been further exchanges, as set out in this Report and associated documentation.

12. As the Commissioner's memorandum makes clear, this is a difficult case, based on judgments about the rules as they were nearly a decade ago, which has also required an extensive exchange of correspondence. The barrage of speculation misreported as fact will shape public reaction to this Report and the Commissioner's memorandum. Our task is to set that aside and consider the matter on the information which has actually been put before us.

The Commissioner's inquiry: procedural points

13. The Commissioner considered three questions:

a) Was Mrs Miller's designation of her main and second homes correct?

b) Did Mrs Miller or her parents receive an immediate financial benefit from public funds by living in her designated second home, and if so, did Mrs Miller reflect this in her claims?

c) Were Mrs Miller's ACA claims made in accordance with the rules and guidance of the relevant period?

In the course of this inquiry Mrs Miller raised a number of procedural points about the scope of the Commissioner's investigation, which we consider should be dealt with before we set out our findings themselves.

14. The original complaint received was:

I wish to register a complaint regarding Maria Miller's misuse of Parliamentary allowances between her election to Parliament in 2005 and April 2009. I understand that Maria Miller's parents lived in the property she had designated as her second home and she claimed against ACA to cover the costs of funding this accommodation. I understand that the property was purchased in 1996 for £234,000 and the mortgage was extended to £575,000 in January 2008. During the four year period of claimed Mrs Miller claimed just £115 less than the maximum permitted for the period.

The then Parliamentary Commissioner for Standards, John Lyon, wrote to Mrs Miller on 12 December 2012 to initiate the inquiry, which he explained would be continued by his successor, Kathryn Hudson. He stated that:

He posed a series of questions, including questions about the mortgage arrangements for both Mrs Miller's London and constituency homes.

15. Ms Hudson first sought to establish the detail of Mrs Miller's living arrangements in the constituency and in London, and the expenses that she had claimed. Throughout this process Mrs Miller was invited to respond. On Monday 1 July 2013 Mrs Miller submitted an independent legal opinion giving a view of the scope of the original complaint and of the investigation itself. There was a difference of opinion as to whether the Director General of Human Resources and Change should be asked for a view on the propriety of Mrs Miller's claims, and as to the accuracy of a summary of key facts prepared by the Commissioner. On 10 October 2013, the Commissioner invited Mrs Miller to a meeting, but it proved impossible to identify a mutually convenient time. In October 2013 the Commissioner had gathered the information she initially considered necessary to prepare her report, but one outstanding question remained. On 23 October 2013 the Commissioner wrote to Mrs Miller:

Mrs Miller responded on Wednesday 6 November saying:

On Monday 11 November 2013 the Commissioner responded:

She set out the questions to which she still required answers:

· Whether you made claims against your additional costs allowance and personal additional accommodation expenditure from May 2005 to April 2009 which provided your parents with an immediate benefit and did not take full account of their living costs;

· Whether your designation of your Basingstoke properties as your main home was in accordance with the rules of the House from May 2005 to March 2009; and, overall;

· Whether the claims you made were, in accordance with the rules on the Additional Costs Allowance (ACA) from May 2005 to March 2009, for expenses wholly, exclusively and necessarily incurred when staying overnight away from your main residence for the purpose of performing your parliamentary duties (and from April 2009, that the expenses were necessarily incurred to ensure that you could perform your parliamentary duties).

I have so far reached no conclusions on these matters, and will not do so until I have finished collecting and reviewing evidence.

The Commissioner also requested specific information, including:

· the successive mortgage arrangements which you had from 1996 to 2009. Please also confirm whether, as alleged by the complainant, the purchase price of your London home was £234,000; and set out the size of the different mortgages or loans which you have held against the property.[...]

· how you calculated the figures you gave for mortgage interest in your table of 3 January for these years and the other years in question. You have quoted mortgage interest of £24,024 in 2005-06 and £25,701 in 2006-07, whereas the letters from RBS which were lodged with the Fees Office for those years gave mortgage interest figures of £17,638.09 and £24,880.82. [...]

The Commissioner noted that the questions about mortgage arrangements were not new:

16. There then followed further exchanges of correspondence, in which Mrs Miller repeatedly raised questions about the scope of the inquiry, and set out her view that these later questions went beyond the original complaint and had, in any event, been settled by the Legg inquiry,[13] which had found no issues in respect of her claims. Mrs Miller also gave the following information:

17. The Commissioner and Mrs Miller did not agree on the scope of the inquiry. No meeting was arranged between them. Mrs Miller was given the opportunity to comment on the factual sections of the report and the Commissioner completed her work on the basis of the information available to her and submitted it to us.

18. In her letter to the Committee on Monday 3 February 2014, Mrs Miller set out a number of procedural objections to the Commissioner's inquiry. She claimed the inquiry "was conducted without due regard for the core principles of a proper investigatory or adjudicatory process" and she also claimed that the questions about mortgage interest raised by the Commissioner in October 2013 were not within the scope of the inquiry.[16] Mrs Miller also questioned the Commissioner's reference to evidence beyond reasonable doubt in paragraph 140 of her memorandum, saying:

Mrs Miller also contended that it was wrong to inquire into expenses when the Legg inquiry had found that there were no issues.

19. We invited the Commissioner to respond to Mrs Miller's letter point by point, which she did on Thursday 13 February 2014.[18] Mrs Miller's letters and the Commissioner's response are printed with this Report and accordingly so we see no need to deal with the procedural points raised in them in great detail here.

20. We are satisfied that the scope of the Commissioner's inquiry was appropriate. While complainants are expected to produce some evidence that a matter should be investigated, it is the Commissioner's task, once a subject has been accepted for investigation, to examine it thoroughly. That investigation may reveal closely related matters which should also be investigated. The original complaint identified the size of the mortgage claimed by comparison with the original purchase cost of the property as a potential issue and the Commissioner was right to consider it. Moreover, the Procedure for Investigations states at the outset that "if the Commissioner thinks fit, [he or she] investigates specific matters which have come to his or her attention relating to the conduct of a Member".[19]

21. The Commissioner is an investigator; her final report sets out her view on the interpretation of the rules, and on whether or not they have been broken. It is for the Committee to adjudicate. The Committee on Standards and Privileges and this Committee as its successor share a concern to ensure the procedure used by the Commissioner and the Committee is fair. We have already set out the standard of proof required in investigations, "namely, that they [allegations] are more likely than not to be true", which we have observed.[20] The question whether Mrs Miller was entitled to claim more than original costs of purchasing her home is one we turn to in the substantive part of this Report. We are satisfied that Mrs Miller did claim more than the original costs of purchasing her home. The amount claimed in interest is a matter of record, and is beyond that which could have been claimed on the original mortgage.

22. Nor do we agree that a Member can rely on the Legg inquiry as a shield against further investigations. Mrs Miller's contention is that in the case of Andrew MacKay and Julie Kirkbride the Commissioner and the Committee were not revisiting the Legg findings, and that:

We do not see the basis for this interpretation. Indeed the Committee considered the triple jeopardy point in that case and concluded without qualification:

The matter which the Committee considered closed by the "the extremely thorough audit and review processes"[23] was not whether or not the Code had been breached, but the quantum of repayment.

The Commissioner's findings

Like the Commissioner we take each of the key questions in turn:

a) Was Mrs Miller's designation of her main and second homes correct?

b) Did Mrs Miller or her parents receive an immediate financial benefit from public funds by living in her designated second home, and if so, did Mrs Miller reflect this in her claims?

c) Were Mrs Miller's ACA claims made in accordance with the rules and guidance of the relevant period?

Was Mrs Miller's designation of her main and second homes correct?

23. During the period under review, Mrs Miller and her family had a house in London, owned by Mrs Miller and her husband, and a house in Basingstoke, rented by Mrs Miller, which was designated as her main home for the purposes of ACA. Mrs Miller rented three different properties over the period in question.

24. The Commissioner finds that Mrs Miller should have designated the London property rather than the Basingstoke one as her main home. Her reasons for coming to this finding are:

a) The London house was that which she and her husband had bought with a mortgage in 1996.

b) She had welcomed her parents and brothers to live with her towards the end of the same year.

c) London was also where her husband worked and where each of her children in turn went to school.

d) Mrs Miller's London home would have been maintained in any case, even had she not been an MP.[24]

25. Mrs Miller challenges this finding on the grounds that the designation of Basingstoke was correct because:

a) It was where I spent the most nights.

b) It was the centre of my family life.

c) There was no financial benefit to me in the designation.

d) I received clear advice from the Department of Finance and Administration as to which home I should designate, and this advice has been confirmed as correct by the Director General of HR and Change.[25]

26. The previous Commissioner's findings in other cases indicates that while the number of nights has been held to be a significant factor, it has not always been the determining one. For example, in the case of Ed Balls and Yvette Cooper the Commissioner considered that the couple had been correct in designating an address away from London as their main home, even though they spent slightly fewer nights there than they did in London, as that was the centre of their family life, and they spent more days there than elsewhere. His view remained that the number of nights spent in a particular place was a "reasonable general test" but that:

The Commissioner's reasoning takes account of these factors in this case. We note that the Commissioner goes on to say:

fair and reasonable throughout

27. The matter was, as the Commissioner says, "finely balanced". At the time Mrs Miller first designated Basingstoke as her main home, there was no case law or guidance beyond that available from the DFA. The Committee on Standards and Privileges did not report on the case of Mr Balls and Ms Cooper until October 2008, and its report contained the following paragraph:

We agree with the Commissioner in this conclusion.

While the then Commissioner's reasoning on the particular complaint gave a more nuanced account of the residence test, only the most attentive Member would have realised this. The Committee's subsequent report on the designation of main homes indicated that the test of the number of nights spent at a property should normally be the appropriate one, but acknowledged that this was a general rule and there might be cases in which it was not appropriate. It went on to discuss the role of value for money in making a designation.[29]

28. In her analysis the Commissioner was able to consider cases which were resolved after Mrs Miller had made her designation. We note the Commissioner's helpful analysis of living costs claimable against the Basingstoke property where she concludes that even after abating for her parents' living costs, Mrs Miller's "claims would have been at or around the ceiling of the relevant allowance from May 2005 to March 2009".[30]We agree with the Commissioner that Mrs Miller should properly have designated London as her main home rather than Basingstoke. Nonetheless, we consider that Mrs Miller's designation was reasonable in the light of the guidance available at the time, given that the matter was finely balanced. Accordingly we make no criticism of Mrs Miller for her error and we will treat this case as if the designation of the London property for ACA purposes had been correct.

Did Mrs Miller or her parents receive an immediate financial benefit from public funds by living in her designated second home, and if so, did Mrs Miller reflect this in her claims?

29. The Commissioner distinguishes between Mrs Miller's case and previous cases in which ACA funded properties were used by MPs' family members:

The current IPSA rules allow Members increased support for each person for whom they have caring responsibilities.[32] In this respect they are more generous than the previous system, in which there was simply a cap on total claims. The rules in force in 2005 prohibited the use of allowances to meet other people's living costs: they did not prohibit family members other than spouses and dependent children sharing ACA funded property, providing that they were not subsidised to do so. We are satisfied that Mrs Miller in fact had caring responsibilities for her parents,[33] but even if she did not have such responsibilities, there was nothing in the previous rules to demand that on election she should break up her family unit, which had been formed nearly a decade earlier. We agree with the Commissioner that:

There can be no criticism of [Mrs Miller] in relation to her personal, caring responsibilities and her desire to combine these with the role of an elected representative.

30. The Commissioner then turns to analyse whether ACA was in fact used to meet the living costs of Mrs Miller's parents. The advice of the Director General of Human Resources and Change was that in the circumstances it would have been reasonable to have abated the total costs of Mrs Miller's second home by two-sevenths to take account of her parents' living costs. His analysis of Mrs Miller's costs, based on the amounts claimed, shows that the real costs of running the London property were significantly higher than the claims, and such an abatement had in fact occurred, although informally. The Commissioner's rough analysis of the Basingstoke costs suggests those too were so high that Mrs Miller's parents' costs were not met by ACA payments. We note that Mrs Miller considers the use of abatement as flawed "as it leads to outcomes that amount to discrimination and which are contrary to the public interest in encouraging parliamentary diversity".[34]

31. While on this analysis Mrs Miller's claims were not excessive, Mrs Miller made no formal abatement, and although she indicates that she described her arrangements to the Fees Office on two separate occasions, it does not seem that there was extensive discussion about how they should be managed. A similar lack of clarity was noted in other cases.[35] We share the Commissioner's regret that "Mrs Miller did not make any formal arrangements by which she could demonstrate transparently that she was not claiming for their costs".[36]

32. Election as an MP did not require Mrs Miller to change her long standing family arrangements, in which her parents were an integral part of her household. In such circumstances, it was entirely proper for Mrs Miller's parents to share both London and Basingstoke homes. Parliamentary allowances were not used to defray the costs of a separate parental home, which Mrs Miller rarely used. Mrs Miller's claims were significantly below the total costs of either home, which supports the judgment that parliamentary allowances were not used to cover her parents' living costs.

Were Mrs Miller's ACA claims made in accordance with the rules and guidance of the relevant period?

33. As we have set out, the Commissioner and Mrs Miller failed to agree over the scope of this question, so the Commissioner decided to submit a memorandum to us based on the information that she had been able to collect. That information was incomplete, and where Mrs Miller had provided answers they were general.

34. There are two potential issues here: the first is whether Mrs Miller was entitled to claim any payments for interest over and above those related to the price of the house in London at the time she first purchased it. The second is whether even if she were so entitled, her claims remained legitimate in the light of her arrangements after she became an MP.

MRS MILLER'S CLAIMS IN RELATION TO THE ORIGINAL PURCHASE COSTS OF HER PROPERTY

35. In 2003 the Green Book provided that claims for mortgage costs were limited to:

In 2005 this was changed to:

The Commissioner considers this change as significant; in her analysis she compares the rules in 2003 to those in 2005 which were set out as:

and

"associated with obtaining (and selling) that home"

and

the interest paid on repayment or endowment mortgages]

and

[other costs associated with obtaining (and selling)that home" (My emphasis)

The Commissioner also notes that in 2006 the rules were relaxed to allow for interest on advances to improve a property, providing that Members consulted the House before making any commitments.

36. In reading the rules of the House as they applied in 2005 to prohibit claims for mortgage interest over and above the original purchase price of the property the Commissioner is also guided by the case of Mr George Osborne.[40] The Committee on Standards and Privileges' findings in that case are interpreted differently by the Commissioner and Mrs Miller. The case is complicated, since it relates to claims that the cost of a mortgage required to purchase a constituency home were initially secured on a different property and which was increased in value when transferred to the property to which it actually related. Mrs Miller contends that:

e) It is an important feature of Mr Osborne's case that it concerned additional borrowing made once he was an MP and that it is only borrowing after he became an MP which could properly be regarded as a transaction to which the rules applied.

f) Critically, the borrowing after he became an MP was relied on, as regards the rules, in respect of property costs in fact incurred before he became an MP. The Committee considered that borrowing taken out for the first time in 2003 (once Mr Osborne was an MP and when that borrowing was subject to ACA rules) could not be justified by reference to expenditure prior to 2001.

g) A further feature of the case (and of Mr Duncan's case which you also mention) is that the borrowing was secured on a property other than the second home.

ii) Secondly, it is important for your report to note the proposition for which the Osborne case stands. The whole and only point of the Osborne case is that it is not permissible to take out additional borrowing once an MP and justify it by reference to costs in fact incurred before that borrowing and before being an MP. Once an MP, the justification has to be contemporaneous with the borrowing. If Mr Osborne was to justify the additional interest, that was perfectly possible but the usage had to be forward-looking in respect of costs after the borrowing. In other words, retrospective justification is not allowed. This is of course of no relevance in my case.

iii) Thirdly, it is therefore important to be clear about what the Osborne case does not suggest.

a) In particular, Mr Osborne's case does not and cannot lead to a conclusion that it would be a breach of the rules for an MP to claim under the ACA any amount in respect of mortgage interest over and above the original purchase price of the property. On the contrary, the ACA rules are clear that mortgage interest above the purchase price is in principle allowable.

37. We do not agree with this analysis. The Committee on Standards and Privileges stated definitively:

The Committee did not differentiate between the legitimacy of the inclusion of initial repairs in the claim made in 2001, and in subsequent mortgages. The then Commissioner and the Committee on Standards and Privileges found that Mr Osborne's claims exceeded the amount Mr Osborne was entitled to claim for only some of the seven year period under investigation (2001 to 2008).[43] That finding was simply because for much of the time the amounts claimed were lower than the overall cost of Mr Osborne's borrowings, it was not because of the timing of the claims in relation to his changing mortgage arrangements. The Committee's calculations were consistently made on the basis of the original purchase price, stripping out other costs.

38. We note that the Commissioner herself points out that hers is "a strict interpretation of the rules as they stood in 2005 which impacts significantly on Mrs Miller's unusual situation".[44]As Mrs Miller says, the rule has serious flaws:

39. We have the advantage of having among our members Sir Nick Harvey, who was a member of the relevant committees at the time. When the rules were formulated the intention was to prevent MPs withdrawing equity from their property for non-housing purposes. No thought was given to the effect of the rule on newly elected Members who might claim ACA on a property owned for decades, where the mortgage had increased over the years. Nor was thought given to the reasonableness of a rule which could retrospectively bite on decisions made before someone was elected, or even before they had contemplated standing for election. As Mrs Miller pointed out, no attempt was made to ensure that newly elected Members only made claims against the original purchase price of the property. In these circumstances, imposing a strict interpretation of the rule would not be appropriate. Whatever the strict construction of the rule, it was reasonable for Mrs Miller to claim the interest on her mortgage as it was when she entered the House, rather than as it was when she first purchased the property.

OTHER MATTERS RELATING TO MRS MILLER'S ACA CLAIMS

40. While we agree that it is questionable whether it would be fair or just to impose the strict interpretation of the rules relating to claimable mortgage interest on the mortgage as was the case when Mrs Miller was first elected, the Commissioner's investigation also revealed that in 2007 Mrs Miller increased her mortgage by £50,000. The rules at the time stated:

3.14.1. The following expenditure is not allowable:

[...]

Repayments of the capital element of your mortgage

[....]

Interest on any additional mortgages, advances or loans secured on the same property unless required for the repair or improvement of that property

[....]

The capital cost of repairs which go beyond making good dilapidations and enhance the property

41. Despite repeated inquiries, Mrs Miller did not explain the reason for this particular mortgage increase. She asserted that it was irrelevant, given that, as she claimed, she did not claim for the interest on the extra £50,000.

42. The Commissioner notes that the full information is not available:

I accept [...] that (bearing in mind the offset) she did not claim the full amount of interest she paid on the extended loan. During the period November 2007 to March 2008, mortgage interest statements show that Mrs Miller paid £10,991.57 in mortgage interest [...] and claimed £7,335 from her allowances. For the year 2008-09 mortgage interest statements are incomplete, but Mrs Miller says that her mortgage costs were £21,530. She claimed £19,264.63.

did

The Committee's inquiries on Mrs Miller's mortgage arrangements

43. The answers given by Mrs Miller to the Commissioner's inquiries about her mortgage arrangements were not clear and the Committee felt it appropriate to ask her to supply further details, so that we could assess her claims. We asked:

1) Did you increase your mortgage on the London home between the time you were selected as candidate for Basingstoke and the re-mortgage in November 2007? If you did increase the mortgage in this period, the Committee wishes for information, supported by documentation as far as possible, on:

· the date of any increase;

· the amount of any such increase; and

· the purpose for which any additional money advanced was used.

2) With regard to the increase in your mortgage in November 2007, did you notify the Department of Finance and Administration of the change in your arrangements and seek their agreement in advance? If so, please give details.

3) In your response, dated 10 April 2013, to the letter from the Commissioner of 19 March 2013 inquiring about the reason for the mortgage increase in 2007 you say "The mortgage changed in the normal course of events." The Committee would like to know why you increased this mortgage and the use to which the money was put, with supporting documentation.

4) The Committee wishes to confirm the mortgage companies used during the period 2005-2009. The records available indicate that the mortgages were held by the RBS followed by Coventry Building Society. The Committee needs to know the effective rates of interest (with changes and applicable dates) for the period. Documents held by the House are incomplete. The Committee suggest you ask lenders for any information they may hold relating to your mortgage arrangements and payment.

44. Mrs Miller needed some time to collect the additional information requested, and indeed, has been unable to provide all the information that the Committee requested. This is in part due to the fact that this inquiry covers matters which go back many years.

45. When Mrs Miller responded she confirmed that she had a variable current account mortgage with the RBS—the papers available to us show that this was an offset flexible mortgage. This was subsequently changed to an offset mortgage with the Coventry Building Society. Mrs Miller told the Committee that the CBS mortgage was interest only and offset.[48]Offset mortgages can be complex. We note the Green Book guidance from 2006 onwards that: "We strongly encourage Members to keep any mortgage arrangements for ACA purposes as straightforward as possible".[49] Nonetheless, this should not have resulted in any increase or intrinsic impropriety in Mrs Miller's claims. At times when Mrs Miller claimed less than the total costs, offsetting should have had no effect on the total charged to ACA; if she ever charged the entire costs to expenses, it might have actually reduced the amount paid by the House.

46. In response to the Committee, Mrs Miller explained that during the period before her election:

As far as the mortgage increase after election was concerned:

47. In the light of the Committee's inquiries, Mrs Miller sought additional information from RBS about her mortgage when she was first elected.That documentation made it apparent that in May 2005 Mrs Miller had a variable mortgage with a facility of £425,000 and the amount of the facility utilised was £419,034.77.[52] Mrs Miller has concluded that in the light of this information no claim should have been made for interest over and above the capital debt of £419,034.77. By her calculations there was an inadvertent overclaim in the financial year 2008-09, at a time when mortgage rates were dropping rapidly.

48. Mrs Miller considers that she did not speak to the DFA about the £50,000 increase in her mortgage facility when she remortgaged with the Coventry Building Society (CBS) in November 2007, but emphasises that "I had no intention of making any claims in respect of any additional borrowing".[53]

49. We agree that it would have been improper for Mrs Miller to claim mortgage interest for a mortgage facility larger than that at the time of her election. There is no indication that either of the mortgage increases after Mrs Miller's election was sanctioned by the DFA, and by Mrs Miller's own account the expenditure was not clearly linked to essential building work which might have been allowable.

50. The question then is whether Mrs Miller did claim more in mortgage interest than she should have done. The passage of time means that the Department of Finance and Administration does not have a complete set of records for Mrs Miller, but it was able to supply copies of many documents dating from the time when the claims were made, together with a breakdown of the expenses claimed. Careful study of interest claims and contemporaneous documentation from Mrs Miller's mortgage has allowed us to make the comparison between interest paid on the mortgage with the interest claimed from ACA.

51. The complexity of Mrs Miller's arrangements make it difficult to ascertain the way in which the amount of the capital borrowed changed over the period. We can identify that from some time after her election up until November 2007 the capital outstanding on Mrs Miller's mortgage was up to £100,000 greater than it had been when she entered the House and by April 2009, the capital outstanding was £157,767 greater than it had been when she entered the House four years earlier.

52. Clearly for most of the period Mrs Miller's claims for mortgage interest were significantly lower than the interest actually incurred. In addition, for part of the period she did not make claims for matters such as cleaning and maintenance. Given that ACA was capped, it was common for MPs simply to submit claims for only as much of their expenses as brought them close to the cap.

53. Mrs Miller's view is that with the exception of the year 2008-09, her claims for mortgage interest were below what would have been allowable. We have examined the figures carefully to establish whether this is correct. As we have set out, up until 2008-09, the documentation is patchy. While Mrs Miller provided the Commissioner with figures drawn from bank statements, we have chosen to use the material provided to us by the House. This has the advantage that no one could consider that the figures were in some way carefully selected by Mrs Miller, or manipulated to support her case. They are as close to a random sample as is possible. This has allowed us to make a reliable assessment of Mrs Miller's claims.

54. Mrs Miller's mortgage facility in April 2005 was £425,000; it rose to £525,000 sometime between then and September 2007, and subsequently rose to circa £575,000 in November 2007. In effect the additional borrowing was roughly one-fifth of the total cost incurred up to the beginning of December 2007; thereafter it rose to around one-quarter.

55. In June 2005 the RBS mortgage interest was £2,002 a month; Mrs Miller's monthly claims were £1,439, considerably below four-fifths of the total interest. Indeed, since Mrs Miller cannot access online bank statements earlier than December 2005, and RBS has not confirmed the date at which the facility was increased, it is possible that the mortgage facility for the year 2005-6 remained at £425,000, and there was no question of a possible overclaim. Mrs Miller's claims remained at £1,439 even when the RBS interest rose to £2,455 per month in February 2007, and four-fifths of that sum would have been £1,964. Since Bank of England Base rates only fluctuated between 5.25 and 5.75 per cent between February and November 2007[54] it is reasonable to consider that Mrs Miller's claims must have remained well below four-fifths of her total mortgage interest costs up until November 2007.

56. There is also documentation for Mrs Miller's total mortgage costs between November 2007 and March 2008, which we can compare with ACA claims. Here, too, the total claimed was significantly less than three-quarters of the actual costs.[55]Even though the figures available are incomplete, we are satisfied that there is sufficient independent evidence to support Mrs Miller's assertion that up until the year 2008-09 she did not claim for the interest on any increases to her mortgage after her election.

MRS MILLER'S CLAIMS FOR MORTGAGE INTEREST IN 2008-09

57. The documents available from the DFA are incomplete, but show that Mrs Miller's mortgage claims for January to March 2009 were those of the total mortgage interest, and in some months were very slightly above that, rather than for three-quarters of it. In her first response to our inquiries, Mrs Miller told us that: "This was inadvertent" and was probably caused by the sudden drop in interest payments, following the financial crisis.[56] It is a matter of record that Bank of England Base Rates fell from 5% in April 2008 to 0.5% in March 2009.[57] Mrs Miller has apologised for this error and offered to quantify that sum if it was separately relevant.

58. When the Committee Clerk wrote to Mrs Miller, requesting details of how she had calculated the payments, Mrs Miller told us:

I think the correct approach is to start from the point that I was not able to claim beyond the interest on £419,034.77 that was the amount of borrowing when I entered Parliament, and any borrowing beyond that after I entered Parliament was additional borrowing, for the interest in respect of which I have never suggested I was entitled to claim. A straightforward approach is then to captivate available interest by applying to the overall interest payable the percentage of the allowable principle that any additional borrowing. In other words, if the level of the mortgage was £575,000 a year, the maximum claimable was £419,034 .77/£575,000 = 72.9% of the interest payable in that year.

Taking that approach, as set out in my letter of 60s March 2014, I believe the only overclaim is in the 2008-9 year. The overclaim in that year is about £5,800, reducing to about £4000, when the 2/7 adjustment is made.

Mrs Miller has since provided us with redacted copies of her bank statements for the financial year 2008-9. These tally with the figures which appear on the Coventry Building Society Statements still held by the DFA. For this year, at least, we now have complete information.

59. The statements show that for much of the year the actual interest was only a hundred pounds or so above the interest claimed, not enough to offset the unauthorised mortgage increase. The £5,800 which Mrs Miller has identified as an overclaim is a little larger than our own calculation of the difference between Mrs Miller's total mortgage costs and the allowable costs, but reasonably close to it given that our apportionment of the mortgage interest is more approximate than that used by Mrs Miller. We do not understand how Mrs Miller considers that this should be reduced to take account of her parents' costs, and so we reject the proposed reduction.

MORTGAGE COSTS AND MRS MILLER'S PARENTS

60. There is a further aspect to Mrs Miller's claims for mortgage interest. As we have described above the rules on ACA had in effect two limbs; the first was a cap on the total which could be claimed, the second was a prohibition on claims relating to additional mortgages on the same property which were not approved by the House, regardless of whether or not that cap had been reached. The intention was to prevent equity being withdrawn from the property and being used for other purposes, with the interest costs being met by the taxpayer. The effect of Mrs Miller's arrangements was to increase the mortgage costs she had incurred in housing herself and her family in London above the level that they would have been at the time of her election.

61. The admittedly approximate figures available to us suggest that even if the figures are adjusted to take account of what the mortgage cost "should" have been, for the years up to 2008-09, Mrs Miller's claims still fell significantly short of her total costs, and so her parents' living costs were not being met by the taxpayer.[58] If the Commissioner's analysis about the main home is correct, Mrs Miller's figures for the costs of running her Basingstoke home indicate that she would have been properly entitled to make claims equivalent to those she did in fact make. We have examined various bases for calculating the overclaim. Mrs Miller considers that she overclaimed on her mortgage by £5,800 in 2008-09. We have examined the figures carefully and accept that that is a reasonable assessment of the amount that she overclaimed. We recommend this sum should be repaid.Mrs Miller's assessment of her overclaim is such that we do not think there needs to be any separate finding in relation to her parents' living costs.

Mrs Miller's adherence to the Code of Conduct

62. We now turn to a matter which was not raised by the Commissioner, namely, whether Mrs Miller has complied with the stipulation in paragraph 19 of the Code of Conduct that "Members shall cooperate, at all stages, with any such investigation by or under the authority of the House".[59] The seven principles of public life have always formed part of the Code of Conduct. One of those principles is Accountability: "Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office".[60] Another is Openness: "Holders of public office should be as open as possible about all the decisions and actions that they take. They should [...] restrict information only when the wider public interest clearly demands".[61] Another is Leadership: "Holders of public office should promote and support these principles by leadership and example".[62] All are relevant to the rule in paragraph 19.

63. Mrs Miller consistently responded to the Commissioner's inquiries with lengthy procedural challenges. We consider it reasonable for a Member to request information about the Commissioner's work, and to draw attention to evidential or procedural difficulties, but such challenges do not excuse failure to respond properly to the questions posed.

64. Mrs Miller's exchanges with the Commissioner repeatedly show a failure to provide information asked for, or to respond adequately to the Commissioner's questions. As the current Commissioner notes, the previous Commissioner requested information about the mortgage arrangements for the London home in December 2012, indicating that the documentation would be much appreciated. Mrs Miller's response on January 2013 indicated that the London home was bought on a mortgage by Mr and Mrs Miller alone, and included a schedule of accommodation costs extrapolated from bank statements. There was no supporting documentation. In at least one case the figures given do not match with other available documentation. On 19 March 2013 the Commissioner wrote asking:

The response was simply that "the mortgage changed in the normal course of events".[64] On Wednesday 23 October 2013 the Commissioner again asked about the increase in the mortgage.[65] Mrs Miller responded "I am not sure I am able to assist further. The matter was over 6 years ago and I'm reluctant to speculate without attempting to locate any documents on the subject if I still have any".[66] This was a totally inadequate response. On Thursday 12 December 2013, after further exchanges with the Commissioner, Mrs Miller explained that:

65. When the Committee asked for similar details, Mrs Miller told us that in relation to her borrowing before her election:

This is not wholly inconsistent with her response to the Commissioner, but significantly fails to mention or quantify any building work.

66. Much of the delay and difficulty in this case has arisen from incomplete documentation and fragmentary information. Mrs Miller has to carry significant responsibility for that. She should have attempted to provide the explanation and documentation requested by the Commissioner to the Commissioner at the outset rather than requiring us to seek the information directly. We recognise that Mrs Miller may put procedural points to the Commissioner and the Committee but we regret that she did not also provide the Commissioner with the substantive information and supporting documentation she required.

Conclusion

67. We are concerned that Mrs Miller did not pay as close attention to the rules of the House as she should have done. As we have seen, after her election she increased the facility on her mortgage on at least two occasions without consulting the House, despite the fact that in both the 2005 and 2006 Green Book the advice given to those who wished to change their mortgage was: "Please consult us in advance. There are strict rules on the costs that can be claimed, and you may need to change the nomination of your main home".[69] While Mrs Miller has consistently told us that she never intended to claim the interest on the £50,000 mortgage increase revealed by the Commissioner's initial investigation, there is no documentation as to how she apportioned her claims, and towards the end of the period in some months she not only claimed for the entire mortgage interest charged, but appears to have claimed slightly more than that interest. There is no indication that she considered whether or not her variable mortgage or the increase clearly shown in the RBS documentation from a facility of £425,000 to £525,000 might have engaged the prohibition against additional mortgages.

68. The documentation that is available of Mrs Miller's interactions with the House tends to show a pattern in which officials would press her for information and the information that was provided appears to have been the minimum necessary.[70] This pattern was repeated in both the Commissioner's inquiry, and our own investigation.That said, Mrs Miller did not subsidise her parents' living costs from public funds. Her claims up until 2008-09 did not include claims for mortgage interest on any increase above the facility when she entered the House. Indeed, for much of that period her claims were significantly below that figure, although close to the overall cap on expenses. We accept Mrs Miller's contention that her overclaim in 2008-09 was inadvertent and caused by the rapid reduction in interest rates. The Code of Conduct from 2002 stipulated that: "No improper use shall be made of any payment or allowance made to Members for public purposes".[71] We have seen no evidence to suggest that Mrs Miller failed to abide by this part of the Code. The 2002 rule had a second part stipulating that "the administrative rules which apply to such payments and allowances must be strictly observed".[72] Mrs Miller failed to observe this.

69. The main thrust of the original complaint, namely that Mrs Miller was providing an immediate benefit from public funds to her parents, has not been upheld. The Commissioner accepts, and the Committee agrees, that the designation of the main home was finely balanced. As we have set out, most of Mrs Miller's mortgage claims were justified. If the Commissioner had been able swiftly to establish the facts relating to Mrs Miller's mortgages, and had been able to gather the documentation which would have allowed her (and has allowed us) to judge the relationship between the changes in bank base rate and the interest charged to Mrs Miller, this might have been a relatively minor matter. As we have set out, Mrs Miller has also breached the current Code of Conduct by her attitude to this inquiry. That is more serious. The system relies on Members responding to the Commissioner's inquiries fully and frankly, rather than trying to argue a case in a legalistic way. It should not have required our intervention to produce the material and explanations required to complete the investigation.

70. We have already recommended that Mrs Miller repay the £5,800 which she has identified as an overclaim. She should also apologiseby personal statement on the floor of the House for her attitude to the Commissioner's inquiries.

1 Procedure note: Parliamentary Commissioner for Standards, Procedure for Inquiries, April 2012 Back

2 Speaker's Conference (on Parliamentary Representation), Report of Session 2009-10, Final Report, HC 299, paras 246-248 Back

3 At the beginning of February 2008, the then Speaker announced a fundamental review of Members' Allowances, and in 2009 ACA was replaced by Personal Additional Accommodation Expenditure (PAEE). Back

4 HC Deb, 8 February 1985, cols 696w-697w Back

5 Independent Parliamentary Standards Authority, Annual Review of the MPs' Scheme of Business Costs and Expenses, March 2013, HC 1032, para 4.30 Back

6 Committee on Standards and Privileges, First Report of Session 2006-07, Evidence to the SSRB Review of parliamentary pay, pensions and allowances, HC 330, para 12 Back

7 WE 02 Back

8 WE 03 Back

9 WE 39 Back

10 WE 40 Back

11 WE 41 Back

12 WE 41 Back