Appendix 1: Memorandum from
the Parliamentary Commissioner for Standards—Complaint concerning
Maria Miller MP
Background
1. Mrs Miller and her husband bought
their house in London in January 1996. Her parents and two brothers
came to live with them at that time as part of a single family
unit.By 2005 the family unit comprised Mr and Mrs Miller, their
three children and Mrs Miller's parents.When Mrs Miller was selected
as the candidate for Basingstoke in 2003, she rented a property
in that area. When she was elected in 2005 she declared her Basingstoke
home as her main home and her home in London as her second home
against which she claimed Additional Costs Allowances (ACA) for
the running costs.[73]The
issues considered by this report cover in essence Mrs Miller's
use of parliamentary allowances between May 2005 and April 2009
including
· The possible immediate financial
benefit to Mrs Miller's parents of living in a house for which
Mrs Miller claimed ACA and PAAE;
· The designation of Mrs Miller's
second home;
· The financial arrangements
for Mrs Miller's second home[74].
The Complaint
2. On 11 December 2012 the previous
Commissioner for Standards received a complaint from Mr John Mann
MP.[75]He raised two
issues in support of his complaint that Mrs Miller had allegedly
misused her parliamentary allowances. The first was that Mrs Miller's
parents had between 2005 and 2009 lived in a property which she
had designated as her second home and against which she was claiming
ACA to cover the costs of the accommodation. Mr Mann believed
that this arrangement was similar to that of Mr Tony McNulty[76]
who had been investigated in 2009 and found to be in breach of
the rules by accommodating his parents rent-free in his second
home.
3. Mr Mann also cited Mrs Miller's claims
for mortgage interest; he said that the property designated as
her second home was purchased in 1996 for £234,000 and the
mortgage was extended to £575,000 in January 2008.He said
that during the four year period specified Mrs Miller had claimed
only £115 less than the maximum permitted by the ACA system.[77]
Relevant Rules of the House
4. The Code of Conduct for Members of
Parliament approved by the House in July 2005 provides in paragraph
14 as follows:
"Members shall at all times
ensure that their use of expenses, allowances, facilities andservices
provided from the public purse is strictly in accordance with
the rules laid downon these matters, and that they observe any
limits placed by the House on the use of such expenses, allowances,
facilities and services."
The Code of Conduct in place before
that date made the following analogous provision:
"No improper use shall be made
of any payment or allowance made to Members for public purposes
and the administrative rules which apply to such payments and
allowances must be strictly observed."
5. The rules in relation to Members'
additional costs allowance (ACA) were set out in the Green Book.Section
3 of the Green Book for April 2005 provided in paragraph 3.1.1
for the scope of the 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."
Paragraph 3.2.1 sets out eligibility,
including the following:
"You can claim additional costs
allowance if:
a) You have stayed overnight in
the UK away from your only or main home, and
b) This was for the purpose of performing
your Parliamentary duties, and
c) You have necessarily incurred
additional costs in so doing, and
d) You represent a constituency
in outer London or outside London."
Paragraph 3.9.1 included the following
in defining a main home:
"The location of your main
home will normally be a matter of fact. If you have more than
one home, your main home will normally be the one where you spend
more nights than any other.
If there is any doubt about which
is your main home, please consult the Department of Finance and
Administration."
6. Paragraph 3.11.1 gave examples of
expenditure allowable under the additional costs allowance as
follows:
" …
· Mortgage costs—for
one additional home in either London or the constituency.This
is limited to the interest paid on repayment or endowment mortgages,
legal and other costs associated with obtaining (and selling)
that home (eg stamp duty, valuation fees, conveyance, land search,
removal expenses)
...
· Other food—reasonable
additional costs while you are away from your own home
· Service charges
· Utilities
· heat
· light
· water
· council tax
· Telecommunications
charges
· Furnishings
· Maintenance and service
agreements
...
· Cleaning
· Insurance
· ...Basic security measures
…
· Other
· TV licence, parking permit."
7. Paragraph 3.12.1 provided for expenditure
which was not allowable, including:
"Living costs for anyone other
than yourself
...
Interest on any additional mortgages,
advances or loans secured on the same property
...
Repairs which go beyond making good
dilapidations and enhance the property."[78]
8. The Green Book for July 2006 included
the following principle in paragraph 3.3.2:
"You must avoid any arrangement
which may give rise to an accusation that you are, or someone
close to you is, obtaining an immediate benefit or subsidy from
public funds or that public money is being diverted for the benefit
of a political organisation."
It also included the following provisions
relating to the reimbursement of the interest paid on Members'
mortgages:
Re-mortgaging is permissible
if moving to different accommodation or if repairing or improving
your existing ACA home. Members should consult the DFA before
making any major commitments.
3.8.1. Documentation needed
Please supply the following:
If you have a mortgage, a copy
of your last statement of interest—and future statements
at annual intervals. If this does not give enough information
about the mortgage, further evidence may be required
Any documentation relating to
changes to these arrangements"
The examples
Paragraph 3.14.1 included the following
examples of expenditure which was not allowable:
· "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
Please seek advice on what
is allowable before committing to building works of any sort"
9. From April 2009, the Additional Costs
Allowance became Personal Additional Accommodation Expenditure,
and the provisions listed above were superseded by the Green Book
issued in March 2009. This set out the principles which applied
to all Members' allowances, including the following:
"Claims should be above
reproach and must reflect actual usage of the resources being
claimed.
Claims must only be made for
expenditure that it was necessary for a Member to incur to ensure
that he or she could properly perform his or her parliamentary
duties.
Members must ensure that claims
do not give rise to, or give the appearance of giving rise to,
an improper personal financial benefit to themselves or anyone
else."
10. The scope of PAAE was broadly the
same as that for the ACA, but the rules provide in a definition
section the following definition of a main home:
"Main home is the term used
in the Green Book for the term 'only or main residence' as used
in the applicable Resolutions of the House and the relevant legal
provisions.It is for a Member to determine where his or her main
home is based on his or her circumstances.It must be in the UK."
There is no additional reference apart
from the general principles equivalent to the specific provision
for the additional costs allowance that "living costs
for anyone other than yourself"are not allowable.
Precedents
11. In addition to the rules set out
above, there are a number of cases determined by my predecessor
which have relevance to the issues contained within this complaint.
Indeed Mr Mann mentions one of them in his letter when he refers
to Tony McNulty. I have summarised some of these cases below for
ease of reference. With regard to the designation of Mrs Miller's
main home I have considered the findings of the Committee on Standards
and Privileges in relation to Jacqui Smith, and in relation to
Ed Balls and Yvette Cooper.
Jacqui Smith[79]
12. In 2009 the Commissioner inquired
into a complaint that Mrs Smith was spending fewer nights in her
designated main home than in her second constituency home and
that she had therefore made the wrong designation for the purposes
of the additional costs allowance.
13. The House's rules stated that a
Member's main home was normally a matter of fact and that if a
Member had more than one home, his or her main home would "normally
be the one where you spend more nights thanany other".As
a Minister from 1999 Mrs Smith had been required to designate
her London home as her main home until this requirement was removed
in 2004. She did not change her designation at this point. From
2004 to 2009 she designated as her main home a room which she
rented in her sister's London house.
14. The Commissioner found that until
May 2007 the Member had spent more nights in London than in her
constituency, but that since that date she had spent more nights
in her second home in her constituency than she did in London.
He concluded that the nature and use of the two properties, and
the balance of the nights the Member spent in each meant that
her designation of her main home from 2004 to 2007 was not in
accordance with the rules of the House. He said
"I consider the purpose of
the rule was to help the Member establish the location of their
main home. It did not require them to reach an unnatural interpretation
of that term... Mrs Smith focused on the nature and location of
her job and not the nature and location of her overnight accommodation..."
Her interpretation did not fit her personal
circumstances.
"She should have exercised
the discretion given in the rules to identify the residence she
shared with her family in her constituency as her main home."
15. The Committee recommended that Mrs
Smith apologise to the House, but did not recommend a repayment.
The Committee said that it could not be established with certainty
whether the taxpayer was better or worse off as a result of her
designation.
Ed Balls/Yvette Cooper[80]
16. This inquiry also focused on the
rules in the Green Book about Members' main homes.The two Members
were married to each other and had children. The identification
of their main home was not a simple matter of fact, since they
maintained two properties sufficient for them to conduct family
life: one in London and the other (which both designated as their
main home) in the constituency of one Member and near to that
of the second Member.
17. Members are normally required to
identify their main home as the place where they spend more of
their nights than anywhere else.The Commissioner noted that while
the constituency home did not meet this criterion, the two Members
had made reasonable decisions on the basis of their own circumstances
in designating their own main home, and he dismissed the complaint.
18. In endorsing the rule about the
identification of main homes, the Commissioner said that he considered
on balance that the number of nights remained a reasonable general
test, as long as it wasnot taken as a rigid rule.The Committee
agreed.The Commissioner acknowledged that this was a prospective
measure and that this could create difficulties particularly for
new Members who had yet to establish a pattern to their parliamentary
life.He also added that in cases of genuine doubt, where the considerations
are evenly balanced, the Member and the Department ought to give
particular weight to ensuring that the designation resulted in
a smaller claim on the allowances than would otherwise be the
case.
19. With regard to the position of Mrs
Miller's parents I have considered the precedents in the complaints
against Tony McNulty and Anne Main,
Tony McNulty[81]
20. The relevant allegation in this
case was that the Member had claimed against his allowances for
the costs of a home in which his parents lived. My predecessor
found that during the six financial years from 2002-03, the Member
had claimed over £75,500 in total while spending a maximum
of 66 nights a year in this property in the performance of his
parliamentary duties. His parents lived full time in the property
as their only home.
21. Mr McNulty's claims varied between
66% and 92% of the running costs of the house.The Commissioner
nevertheless concluded that Mr McNulty should have formally abated
his claims to reflect his parents' living costs. The Committee
endorsed this, saying:
"the fact that a Member
has not claimed sums to which he may have been entitled does not
excuse a breach of the rules. And the informality of Mr McNulty's
"abatement" of his claims was neither transparent nor
did it provide proper accountability. If there was a real need
for Mr McNulty's parents to live in his second home, in respect
of which he was claiming public money, there should have been
a formal arrangement in place."
Mr McNulty was required to apologise
and to repay the sum of £13,837.
Mrs Anne Main[82]
22. The relevant part of this complaint
was that the Member had breached the rules of the House in claiming
for the costs of this property while her adult daughter lived
there rent free.
23. The Commissioner found that the
Member's daughter had begun to stay regularly in the flat in September
2006 at her mother's invitation, initially for three or four nights
a week, later falling to one or two nights a week. She had stayed
on average more nights at the flat than the Member herself, and
had not contributed to the costs incurred. The Commissioner considered
that this amounted to a substantial, regular and sustained usage
of the flat by her. He noted that while the rules had been interpreted
as permitting a Member's partner and children to share the second
home with them, this could not be expected to apply regardless
of age. He said
"Public funds should not
have been expected to meet the living costs of Mrs Main's adult
daughter... That should have been a private matter for the family.
It should not have been a matter for public funds."
He also said
"costs are not wholly and
exclusively incurred for the purpose of performing a Member's
parliamentary duties if the Member's claim includes the living
costs of someone other than themselves, or if they or someone
close to them receive a personal benefit from the arrangement.
This latter prohibition was included for the first time in the
July 2006 rules, but is in my judgement implicit in the overarching
rule that Members may claim only for costs wholly and exclusively
incurred on parliamentary duties."
24. The Committee agreed with the Commissioner
in upholding the complaint, and recommended that the Member repay
£5,000 in respect of the period when her adult daughter stayed
in her second home, reduced by £1,500 to reflect evidence
that she had acted in accordance with the advice she had received
from the Fees Office.In response to my predecessor's finding that
Mrs Main should have abated her claims against the allowances,the
Committee commented that
"any abatement should have
been formal and should have been notified to the Department of
Resources as such ... it is not acceptable in our view to trade
off claims not made against those which should have been abated."
25. Regarding the claims for mortgage
interest I have considered the case of George Osborne.
George Osborne[83]
The relevant part of this complaint
was that the Member had claimed against his Additional Costs Allowance
for the interest on a mortgage which exceeded the purchase price
of the home which he had bought before entering the House in 2001.
Since part of the complaint related to events of more than seven
years earlier, my predecessor consulted the Committee on Standards
and Privileges before initiating this inquiry.
26. In 2003 the Member extended the
mortgage to cover the costs of the purchase transaction for this
property and of the initial repairs he had undertaken, as well
as the costs of the property itself, although he did not in practice
claim against his allowances for these additional elements of
the mortgage until the mortgage was further extended at the end
of 2005. While the increased claims following the 2005 remortgage
had not formed part of the original complaint, since it had been
brought to his attention, my predecessor did consider whether
they fell within the rules of the House.
27. Members were able to claim against
their allowances for the interest on mortgages used to finance
their purchase of a designated second home, but they were not
able to claim for interest incurred on any part of a loan relating
to other expenditure, such as the costs of the purchase transaction,
or any other expenditure incurred before they entered the House.
The Commissioner therefore concluded that that Mr Osborne was
in breach of the rules in 2005-06 and 2006-07 when he claimed
for the interest on the costs of the initial purchase transaction
and repairs incurred before he entered the House. The Committee
commented in relation to the 2003 increase:
"While it was perfectly
acceptable for Mr Osborne to borrow the extra sum, it would not
in our view have been acceptable for him to claim his interest
payments on it, however small such claims may have been."
28. The Member also increased his mortgage
in December 2005 in order to meet the costs of further repairs
on his second home, and later claimed, when funds allowed, for
the interest on his extended mortgage.The Committee said
"Although, as with the 2003
mortgage, Mr Osborne was free to borrow such sums as he saw fit,
he was not permitted to claim for the interest payments on borrowings
that related to costs incurred before his election, other than
the purchase price of the property."
The Committee agreed that the breaches
were unintended and relatively minor, and recommended that Mr
Osborne repay £1,936, less £270 which he had already
repaid.
29. In relation to matters covered by
the Legg review I have considered the case of Mackay/Kirkbride.
Andrew Mackay/Julie Kirkbride[84]
The relevant allegation concerned the
second Member's claims for the mortgage interest costs of building
an extension to the property which was her designated second home
for the purpose of her parliamentary allowances, but also her
husband's main home. This extension was used by a family member
to assist her with childcare.
30. The couple alleged that they would
be placed in triple jeopardy if this matter was investigated as
they had both already been audited by Sir Thomas Legg and had
appealed to Sir Paul Kennedy concerning the outcome of that audit.
Each had been ordered to repay one third of their claims and this
decision had been upheld by Sir Paul. The Commissioner considered
that given the seriousness of the allegations it was right that
he should inquire into them and that the House of Commons should
have the opportunity to decide on whether the now former Members
of Parliament had breached the rules of the House, and should
face a Parliamentary sanction for their conduct. The Committee
agreed with the Commissioner's decision.
31. My predecessor found that in 2008,
after Miss Kirkbride and Mr Mackay extended their joint mortgage
by £50,000 to cover the cost of an extra bedroom, Miss Kirkbride
claimed from the ACA for the interest on the new loan. She was
entitled to do this only if the extension to the property was
necessary in order to perform her parliamentary duties. The bedroom
was needed to provide overnight accommodation for a child carer.
The Committee agreed that the additional use of the property by
the family member, in the absence of Miss Kirkbride and her son,
was not sufficiently regular to suggest that the costs of these
stays should have been reflected in the claims by Miss Kirkbride.
Alan Duncan[85]
32. It was alleged that the Member had
breached the rules of the House by claiming between 1992 and 2004
for the mortgage interest on a constituency property which he
owned outright. The Member himself asked my predecessor to investigate,
which he did. Before opening his inquiry my predecessor obtained
the agreement of the Committee on Standards and Privileges, since
this was a self referral and the inquiry went back more than seven
years.
33. In the course of his inquiries my
predecessor obtained information about events before the Member
had entered the House. He found that the Member had bought a London
property in 1986, which he later nominated as his main home for
parliamentary purposes when he entered the House in 1992. He thenused
that home as collateral for the mortgage on his constituency property
which he bought later that same year.But when he took out a new
mortgage on the constituency property in 2004, he secured it on
that property. My predecessor concluded that the rules of the
House from 1992 to 2004 did not preclude a Member, when buying
a home for which they intended to claim parliamentary allowances,
from raising a mortgage secured on another property. He therefore
dismissed the complaint. The Committee agreed that there was nothing
in Mr Duncan's mortgage arrangements which was in breach of the
rules.
34. Some of these cases in fact cover
more than one aspect of the matter now under consideration.
All of these reports and any others
to which I refer are in the public domain, published on the web
pages of the Standards and Privileges Committee between 2007 and
2010
My Inquiry
35. In the course of my inquiry I have
sought information from;
1. Mrs Miller
2. The Director-General of HR and
Change
3. Two chairmen of the Basingstoke
Conservative Association
4. Two estate management companies
5. The Director of Operations and
Member Services in the Parliamentary ICT service
My predecessor sought permission from
the Standards and Privileges Committee to investigate the whole
period of the complaint which extended beyond the usual time limit
of seven years by a few months. This permission was granted and
he wrote to Mrs Miller on 12 December 2012[86]
setting out the issues he was considering.He asked her
1. "why you designated
the constituency property as your main home and the London property
as your second home;
2. on average, how many nights
a week you spent at each property in each financial year from
May 2005 to April 2009.It would be helpful to know if the pattern
of your overnight stays varied over time or according to the Parliamentary
calendar and the basis on which you have made these estimates
(e.g. a regular fixed pattern, diary entries etc);
3. the arrangements you had
for the constituency home—including its location, whether
it was rented or owned by you with or without a mortgage, how
long you have had the property, the nature of the accommodation,
and who else, if anyone, lived there whether permanently or otherwise;
4. the arrangements you had
for the London home—including its location, how long you
have lived there, the mortgage arrangements, the nature of the
accommodation and who else lived there whether permanently or
otherwise;
5. the accommodation arrangements
for your parents at the London home and the financial contribution,
if any, they made to the purchase, the mortgage repayments, the
council tax and utilities, or any of the other costs of living
in the property;
6. a breakdown of the claims
you made each year against your additional costs allowance to
meet the costs of the London home and, if less than the full cost
of running that home, approximately what proportion of the costs
these claims represented;
7. what led you to decide
to cease making claims on your London home in April 2009;whether
you still own that property and, if so, who now lives there, and
what claims, if any, you made for your additional accommodation—and
where it is located—after that date;
8. whether you at any time
consulted the House authorities about any aspect of your living
arrangements, including the designation of your main home, the
mortgage on your London home and the living arrangements of your
parents and others in that home and, if so, when you consulted
them, about what and what was their response."
36. Mrs Miller replied on 3 January.[87]She
enclosed a note on her family circumstances, which I summarise
here, as well as her responses to the above questions (which included
a schedule of accommodation costs "in rough terms"for
her London home) and a short note on the distinction between her
circumstances and those of Mr McNulty.
37. In her enclosed note Mrs Miller
told me that her parents and twin brothers lived in Wales until
1996, when, following her father's redundancy, they moved to live
with Mr and Mrs Miller and their first child. Her parents did
not contribute to the cost of the property. Since that time (nine
years before she was elected to Parliament) her parents have been
part of her family. Her brothers moved away in 1998 and her second
child was born in that year. Mrs Miller had a third child in 2002.
While initially her parents were able to provide support to her
and care for the children, in recent years the situation has changed
and Mrs Miller now has caring responsibilities for them. She has
also at various times from 2006 had an au pair or home help living
with the family. Mrs Miller argued that her situation was not
similar to that of Mr McNulty because of her carer responsibilities
towards her parents.
38. Mrs Miller explained that as a family
she and her husband had had two homes since July 2003, one in
Basingstoke and one in London. She said that from the time that
she was elected in 2005
"I spent most time in Basingstoke.
I spent 3-4 nights per week in Basingstoke when parliament was
sitting and the majority of my time when parliament was in recess.
To ensure that I had designated the property correctly I consulted
the Fees Office to ask their advice which was I should designate
my main home as the one where I personally spent the most time
... there was no financial advantage as to which home was designated.
... When Parliament was in recess I was in Basingstoke full time
except in September when parliament did not usually sit and my
younger children were then at school in London."
39. Mrs Miller said that her constituency
home was originally a three bedroomed house rented in 2003. After
being elected in May 2005 she remained there until July 2005 and
she then moved to a larger four bedroomed house, subsequently
moving again in February 2009 to a larger fourbedroomed house
nearby which the family occupied until autumn 2010.
40. Mrs Miller told me that her home
in London is a five bedroomed terraced house, purchased with a
mortgage in 1996. Mrs Miller told me
"The mortgage and other
costs associated with the property were paid for by me and my
husband. The property is a single dwelling and we lived as a family
unit with my parents."
Between May 2005 and April 2009, when
she ceased to claim, Mrs Miller made claims against her allowances
for the costs of the house in London.
41. Mrs Miller told me that she ceased
to claim in April 2009because
"it was clear to me that
MPs' expenses claims had become toxic.I therefore decided to cease
making claims until a new more credible regime had been put in
place."
She nevertheless continued to maintain
the same homes in both Basingstoke and London as she considered
that it was necessary for her to perform her parliamentary duties.
She said"My family circumstances have remained the same
throughout." Mrs Miller also told me that she became
a Minister in May 2010 and that, as a Minister, and latterly a
member of the Cabinet, her work now requires her to spendthe majority
of her time in Westminster, both when Parliament is sitting and
in recess.Mrs Miller said "I now claim accommodation costs
in Basingstoke under the IPSA rules."
42. Mrs Miller told me that she hadfully
consulted the House authorities in relation to her living circumstances
when she was first elected, drawing their attention to her parents
living with her; and thattheir clear advice was that she should
designate the London house as a second home. She also consulted
the House authorities when she employed a home help in August
2006. They advised that this did not change the position.
43. On the basis of this response, I
considered that, before I could determine whether Mrs Miller or
her parents had obtained an immediatefinancial benefit by living
ina home for which Mrs Miller claimed against her allowances,
I needed to consider whether her designation of her main and second
homes was in accordance with the rules of the House. On 17 January
I wrote to her requesting information about the background to
her designation of her homes, and about other matters.[88]For
ease of reading, I have set out the course of my inquiries thematically
under the following headings:
· The designation of Mrs Miller's
second home;
· The possible immediate financial
benefit to Mrs Miller's parents of living in a house for which
Mrs Miller claimed ACA and PAAE;
· The financial arrangements
for Mrs Miller's second home.
The designation of Mrs Miller's second
home
44. In my letter of 17 January 2013
I asked Mrs Miller about the basis of the average number of nights
she had told me that she spent in each of her homes; about her
use of the London home in the months of September and how many
nights she spent away from either home in each of the relevant
financial years, and how much time her parents spent in her Basingstoke
home.
45. Mrs Miller responded to me on 18
February.[89] She explained
that her parliamentary diary was no longer available and had been
deleted from the system. The information she provided was based
on her recollection. She said that when she was elected she had
two homes. She asked the Fees Office on what basis she should
make a designation and was advised by them to designate the place
she spent fewer nights as her second home. She said that both
homes cost in excess of the accommodation budget and there was
no financial advantage to her in which place she designated her
primary or secondary accommodation.
46. Mrs Miller said she "spent
around 3 nights a week for three weeks of September"in
London (her figures are set out below).
"12 May 2005-30 April 2006
(50 weeks, 350 day period)
19 weeks recess, 31 weeks sitting
A maximum
of 133 nights in London, minimum of 217 nights in Basingstoke.
May 2006-April 2007 (364 day
period)
19 weeks recess, 33 weeks sitting
A maximum of 141 nights in London,
minimum of 223 nights in Basingstoke.
May 2007-April 2008 (364 day
period)
20 weeks recess, 32 weeks sitting
A maximum of 139 in London, minimum
of 225 nights in Basingstoke.
20 weeks recess, 32 weeks sitting
A maximum of 139 nights in London
(based on 4 nights a week), minimum of 225 nights in Basingstoke."
47. Mrs Miller said that she took around
two weeks' annual leave abroad during recess and attended party
conference for two nights in October. She said that it was usual
for herparents to stay in Basingstoke when she was on two weeks'
leave. She had an au pair from September 2006, who would normally
come to Basingstoke every weekend and stay there for a number
of the holidays. She had consulted the Fees Office about this
in August 2006.
48. With Mrs Miller's agreement I wrote
to the Director-General of Human Resources and Change on 19 February[90]
asking for information and documentation relating to her parliamentary
allowances. He responded to me on 8 March enclosing[91]
· a breakdown of all ACA and
PAAE claims received from her until April 2009;[92]
· mortgage documentation relating
to ACA/PAAE claims;
· a form signed by Mrs Miller
on 27 June 2005 which gave the address of her main and second
home at the time, which remained unaltered throughout the whole
period covered by this complaint; and
· correspondence between Mrs
Miller and the Department related to her mortgage.
49. The Department's files do not now
hold any forms indicating the change of Mrs Miller's main homes
when she moved within the Basingstoke area, any records of discussions
with her, nor any information about the increase in her mortgage
at the end of 2007.It is possible that such records may have been
held at some time and have now been deleted.
50. I sent this information to Mrs Miller
on 19 March, at the same time asking her for some more information;
for example about the pattern of her overnight stays in Basingstoke;
about her family's travel arrangements; about her arrangements
in September recesses; about the pattern of her parents' and her
husband's overnight stays in Basingstoke and whether the London
house was closed and unused between the rise of the House in July
and the beginning of the school term in September. I also asked
if Mrs Miller could identify any witnesses who could provide evidence
about the time she and her parents spent in each home; or any
Fees Office officials from whom she took advice.
51. Mrs Miller replied on 10 April[93].
In response to my first question she said "The general
pattern is as you have described." In response to my
question about her overnight stays in September she said
"My constituency based duties
dominated in September over this period but my children were also
at school. To maintain a family life I spent some nights with
them in London."
She said
"It has always been my priority
to maintain a family life as much as possible notwithstanding
my role as an MP. My husband therefore lived with me in London
during the week and travelled to our Basingstoke home on Fridays
for the weekend. To assist me in being able to undertake my duties
as an MP my husband usually remained in London on Thursday night
to care for our children in my absence."
In relation to the use of the house
in the summer months, she said
"I am not sure I understand
the meaning of'closed' in this context. Yes the London house was
unused during the summer as I have already indicated."
52. In relation to my request for witness
evidence, Mrs Miller said
"I am not sure that I fully
understand the basis of this question. It would be a concern to
me if anyone observed my family's daily movements, and kept records
over a 4-year period, to the extent of being able to provide witness
statements."
The Fees Office had not issued a letter
confirming her telephone conversation with them in 2005, and she
did not keep a note of the name of the person she spoke to. She
said that she did inform the House when she moved to her second
and third constituency properties,[94]
but she did not recall being asked to complete an additional form
to record the change to her nominated homes.
53. I replied to Mrs Miller on 25 April.[95]
I set out some detailed questions about the reason for designation
of her homes for ACA purposes; and about the cost of her homes
and the claims relating to them.I also asked Mrs Miller to be
more specific about the general pattern of her stays in London
and Basingstoke. I asked her to give as full an account as she
was able of the two conversations she had with the Fees Office,
in 2005 and in August 2006.I also asked her to explain more about
how her London house was left during the school summer holidays
during this period. At the end of this letter I asked again if
she would consider giving the names of any witnesses who could
give evidence of the general pattern of use of her homes; and
if members or staff of her constituency association might be able
to provide an account of the general pattern of her presence in
the constituency.
54. In her response of 9 May[96]
Mrs Miller said
"Since 2003 my family has had
two homes; one in London and one in Basingstoke. ... As a family
both houses in Basingstoke and London were seen as home. We all
spent a lot of time in both places. In 2005 when I was elected
the Fees Office required me to designate one place as a prime
residence and the other as a secondary residence. Clearly in my
case this was a fine balance. But the Fees Office were clearly
already well aware that MPs could have more than one home. The
Green Book specifically dealt with this circumstance... At the
time of the 2005 Election I gave a great deal of thought as to
how to balance my role as an MP with my family life. My view was,
in light of my existing experiences, the best way to achieve this
was for our Basingstoke home to be the centre of family life at
weekends and holiday. It was where I would clearly spend most
of my nights. After speaking to the Fees Office, it was based
on this thinking that I chose to designate my main home... I would
have been running contrary to the Green Book guidance and the
guidance provided from the Fees Office if I had designated London
as my main home."
She said
"The sentence 'The location
of your main home will normally be a matter of fact' was not clear
to me hence I called the Fees Office for further guidance. I explained
that I had a large family comprising of my parents, three children
and husband who all spent time in London and time in Basingstoke.
I was clearly told that where a Member had two homes they should
designate the one where the Member spent most nights, specifically
that should be where I spent most nights... I did not reconsider
the designation because the only change in myliving pattern over
this period was to spend more time in Basingstoke as a result
of my son moving to school in Hampshire in 2008."
55. She said that in the second conversation
with the Fees Office she informed the administrator of the fact
that an au pair would be living at the London property and asked
if this affected her position.
"The answer was no.As I was
dealing with the Fees Office direct I had no reasonto believe
it was necessary to keepa written record of my conversation. The
response I received from the Fees Office did not give me tobelieve
that the situationwasunusualand requiringfurther detaileddocumentation."
56. Mrs Miller concludes,
"My difficulty with providing
witness statements is that you seem to want evidence that goes
to the detail of my family's movements over a four year period.
...I don't think anyone outside of my family can provide the sort
of evidence that you are looking for."
57. In my letter of 16 May to Mrs Miller[97]
I asked her to clarify some aspects of her evidence. I asked her
to let me know the month and the year when each of her younger
children moved to schools in Hampshire. I asked her whether her
son's change of school in 2008 had affected the amount of time
which her family spent in Basingstoke. I also said that while
I had understood from her letter of 20 April that her London home
was unused between the rise of the House in July and the beginning
of the school term in September, her letter of 9 May seemed to
suggest that the house was entirely unused while Mrs Miller was
on annual leave, but was used from time to time by her family
at other times during the holiday, and I asked for clarification
of this.
58. In relation to documentary evidence,
I asked Mrs Miller for the contact details of the chair of her
local association so that I could seek evidence from him. I asked
whether Mrs Miller's office staff maintained a record of her appointments
and if so if this was still available; and I asked her to consent
to my writing to the Parliamentary ICT service to ask if any record
remained of her electronic diary.
59. In answer to my questions, Mrs Miller
said[98] that her eldest
child took up a place at a school in Hampshire in September 2005.Her
middle child was at school in London until September 2008, when
he moved to become a chorister. Her youngest child remained at
school in London throughout the period. She told me
"the schooling of the elder
two children did not make a material change in this particular
regard, as we also had to continue to reflect the needs of the
youngest child whose schooling was in London in the relevant period."
She said that during the period when
she was on annual leave from the House,
"it was usual for me and the
family including my parents to live and remain in Basingstoke
... There was not, however, a formal closing down of the London
house in the sense of putting it under dust sheets. As mentioned
in my letter of 9 May ... my husband and I did use the London
accommodation if and when required over the summer by one or other
or both of us (including potentially with other members of our
family unit)..."
She said that the London house was not
used as the family home during the school summer holidays. In
response to my request for witnesses Mrs Miller provided me with
the names and address of two chairmen of her local party association.
She said that she had had four au pairs in a period up to seven
and a half years ago; they were not family friends and she did
not remain in touch with any of them.
60. With Mrs Miller's consent I wrote
to the two chairmen of the Basingstoke Conservative Association[99]
asking them
1. "to the best of your
knowledge and recollection, what was the usual pattern of Mrs
Miller's presence in the constituency? It would be helpful to
know how this varied throughout the year—for example, when
the House of Commons was in recess;
2. whether there was a regular
pattern (for example, weekly or monthly) of constituency events
at which Mrs Miller was present; and
3. whether any records of Mrs
Miller's constituency engagements between May 2005 and April 2009
are still held by you or by the Association. If so, it would be
helpful to have copies of these.
It would also be helpful if you
could let me know the dates of your Chairmanship of the Association."
61. The first chairman, who was in post
from March 2006 to September 2009 and whose wife was also Mrs
Miller's landlord, responded on 10 June[100]
and was able to tell me about a number of local events which Mrs
Miller attended a few times per year each. He says
"Shewasalways in Basingstoke
on a Friday forher Surgery meetings...I would see her mostweekends
at her home on my property , with her children ... Igot the impression
that shewas intheconstituency formost oftheyear.
Ihave no records of MrsMiller'sconstituency
engagementsbetween May 2005 and April 2009."
The second chairman, who was in post
from March 2002 until March 2006 and again from September 2009
to March 2013, responded to me on 14 June[101].He
waschairman during two periods covered by this complaintand told
me
"Maria was, and is, an extremely
conscientious MP and was (and is) in the Constituency on almost
every Friday and weekend on Constituency business. She attended
numerous events...mostly in the evenings.
On Friday afternoons she held Advice
Bureaus [sic] which were
attended by constituents, by appointment,
The Association does not, and never
has, kept Marie's [sic] diary....".
Two Estate Management Companies
62. In order to obtain information about
the cost of the three homes which Mrs Miller had designated as
her main homes for the purposes of the parliamentary allowances,
I wrote on 6 June[102]to
an estate management company in connection with Mrs Miller's first
constituency home and received a reply on 11 June[103]
saying that the rental for that property had been £1,700
per month and enclosing a copy of the Assured Shorthold Tenancy
Agreement which in fact ended on 24 January 2004.The tenancy had
then "continued as a statutory periodic until the property
was vacated on 2 August 2005."
63. I wrote to a second estate manager
also on 6 June[104]
asking for details of Mrs Miller's second and third constituency
homes during the relevant period, which they had rented from,
respectively,August 2005 and February 2009.I also asked whether
they held any records of any additional rental agreements or related
contracts, apart from the rental agreement for the second property.The
estate manager replied to me on 10 June[105]
explaining that offices had moved and records been archived. However,
she was able to tell me that Mrs Miller moved out of her second
constituency home in December 2008. She confirmed that there had
been a deposit of £2,250 on that property and monthly rental
of £1,600 as stated in the Short Term Tenancy Agreement.
She said
"They had been very good tenants
and I think we may have decided that there was no particular reason
to have another Short Term Tenancy Agreement for [constituency
home 3], particularly as their original deposit on [constituency
home 2] had been passed over to us, but I cannot remember.
The rent that they paid for [constituency
home 3] was £2,300 per month commencing in January 2009".
The Director of Operations and Member
Services
64. I wrote to the Director of Operations
and Member Services in the Parliamentary ICT service on 6 June
2013[106]to ask whether
it would be possible to access records of Mrs Miller's electronic
diary on the parliamentary system for all or part of the period
between May 2005 and April 2009 and if so whether copies of this
could be made available to me.Some copies were retrieved but were
not of sufficient detail to be useful in determining the balance
of nights spent between Basingstoke and London and I have not
relied upon them.
The Director-General of HR and Change
65. When I wrote to the Director-General
of HR and Change for the second time, on 12 September[107],I
asked him whether, on the basis of the evidence available, he
considered that Mrs Miller was correct to designate her London
home as her second home. He replied in his letter of 27 September[108]:
"The Green Book published in
2005 and 2006 stated that "the location of your main home
will normally be a matter of fact. If you have more than one home,
your main home will be the one where you spend more nights than
any other". The Department recognised that, where time was
divided broadly equally between two locations, the decision as
between main and second home was not always straightforward. In
such cases, other factors could be taken into account to facilitate
a reasoned decision. Such factors could include where children
went to school or where recesses were spent.
In her letter to you of 18 February
2013, Mrs Miller provides information that indicates that around
two-thirds of her time was spent at her nominated main home in
Basingstoke. In addition to this, she states in her letter of
9 May 2013 that two of her children moved their schooling to Hampshire
in the period after she was elected and that weekends and recesses
were predominantly spent at the constituency home. This would
have been sufficient information to allow my Department to agree
that it was correct for Mrs Miller to nominate her Hampshire property
as her main home, with the consequence that her London property
was her second home for ACA purposes. I agree, therefore, that
the designation of the homes was correct."
66. In the legal advice which Mrs Miller
forwarded to me on 1 July[109],
it is stated that
"In a letter dated 25
February 2013 to the Commissioner,
Mrs Miller sought to give an estimate of the average number of
nights she had spent in each home through the year, in respect
of each of the years in question on inquiry. Exact figures are
not available after all this time and the computerised Parliamentary
diary can no longer be accessed for the period... In any event,
the approach at the time would have been required to be a forward-looking
one of how many nights Mrs Miller reasonably expected to be ineach
home in the year and so inherently based on estimation. Mrs Miller's
estimate now is therefore in keeping with the exercise that would
have been required at the time.
Applying the clear test laid down
by the Green Book, where there was and is no doubt that Mrs Miller
spent more nights in Basingstoke than in London in the course
of each year, Mrs Miller was mandated by the Green Book to designate
Basingstoke as her main home. What should be added is that the
odd occasion when the pattern might have been different in a given
week and the absence of exact numbers of nights in each year are
nothing to the point.
Mrs Miller...voluntarily and appropriately
took every prudent step in consulting with the House authorities
to ensure that she had approached the matter correctly; and she
was assured that she had."
The possible immediate financial
benefit to Mrs Miller's parents of living in a house for which
Mrs Miller claimed ACA and PAAE
67. In my letter of 17 January 2013[110]
I had asked Mrs Miller, to the best of her recollection, how her
parents divided their time between her Basingstoke and London
homes in each of the relevant financial years. Mrs Miller responded
in her letter of 18 February[111].
She told me
"Over this period my parents
divided their time as we all did between our Basingstoke and London
homes mirroring the younger two children's schooling; bringing
them to Basingstokefor the weekend and staying in recess time...
It was usual for my parents to remain in Basingstoke when I was
on annual leave."
68. I wrote to Mrs Miller on 19 March[112],
enclosing the documents supplied by the Director-General. I asked
Mrs Miller whether she travelled with her parents to Basingstoke
each weekend, or whether they had separate arrangements; and if
the au pair who began work in 2006 travelled with her and her
parents each time.I also asked whether Mrs Miller's parents stayed
in Basingstoke while she was away from home on other business
during the school holidays.
69. Mrs Miller replied on 10 April[113].
She told me that as her children were of school age they had to
remain in London on Thursday and Friday. She had already indicated
that she travelled to Basingstoke on Thursday so by necessity
they travelled to Basingstoke separately. Normally her parents
would bring the children down on Friday evening by car. Mrs Miller
said that over this period the whole family divided their time
between Basingstoke and London mirroring the younger two children's
schooling.
70. I replied on 25 April.[114]
I asked Mrs Miller to confirm that her parents made no contributions
to the running costs of the London property; whether she had considered
abating her claims to take account of her parents' use of the
house; and whether she had any formal or informal agreement with
them about their use of the house.
71. In her reply of 9 May[115]
Mrs Miller said
"The running costs associated
with both homes were covered by my husband and me... I have never
claimed the full cost of the accommodation in London, the presence
of my parents in the house meant that I did not claim the full
running costs of the house".
She said that as there were no financial
transactions involved they did not feel the necessity to have
a legal agreement in place between her husband and herself and
her parents. While over the summer recess the family was based
in Basingstoke, she, her husband and her parents used the London
house as required over the summer.
72. I responded to Mrs Miller on 16
May[116]. I asked her
what she meant when she said "the presence of my parents
...meant that I did not claim the full running costs of the house".
In the summary of the facts which I sent her on 18 July[117]
I therefore noted that she did not abate her claims to take account
of her parents' living costs.Mrs Miller asked me to explain this,
and I did so in my letter of 8 August[118].In
her response of 4 September[119]
she said
"I do appreciate your agreement
that abatement should form no part of the factual background of
this matter. The costs I had to incur were of course much higher
than the expenses claimed and so the claims were a reduced percentage
of the actual cost.Because of my responsibilities as a mother,
I in fact had to subsidise at my own expense the cost of being
an MP and having to have a second home..."
73. I wrote a second time to the Director-General
on 12 September[120]
enclosing the correspondence which I had had with Mrs Miller and
asking for his comments and advice on the following issues:
"1. whether you consider that
it was within the rules of the House at the time for a Member
to make claims for a second home in which his or her parents also
lived, in the way described by Mrs Miller;
2. whether you consider that the
rules of the House at the time required Mrs Miller to take account
of her parents' living costs when making claims against her allowances,
and whether any guidance was available to Members on how this
should be done;
3. whether I am right to understand
from your letter of 8 March that your Department has no records
of the conversations between Mrs Miller and the Fees Office, to
which she refers in her evidence. If so, it would be helpful if
you could let me know what advice would have been given to Members
at the time; and
4. whether, on the basis of the
evidence available, you consider that Mrs Miller was correct to
designate her London home as her second home."
74. The Director-General responded in
detail on 27 September[121].
He said:
"Thank you for your letter of 12 September
2013 in which you asked for further information relating your
inquiry into the complaint you have received about Rt Hon Maria
Miller MP.
I will deal with each of your questions
in turn.
1. The
versions of the Green Book that were published in 2005 and 2006
stated that Members were strongly advised to avoid subletting
or renting out any part of a property on which the Additional
Costs Allowance (ACA) was claimed. If they did so, they were required
to notify the Department, who would reduce their claims by the
amount of their rental income. However, where rent was not paid,
there was no rule which governed who might or might not live in,
or stay at, a home on which ACA was claimed.
Additionally, the principles set out in
the 2006 Green Book stated that Members "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".
It was accepted that Members would stay
at their second home with a spouse or partner and young children,
recognising the need to allow Members to combine their parliamentary
work with family responsibilities. However, it was not to the
best of my knowledge a regular occurrence for a Member's parents
to live with him or her on a permanent basis and Mrs Miller sets
out the personal circumstances in her correspondence as to why
this was necessary in her case. I know of no reason per se which
would prevent a Member claiming ACA for a second home in which
their parents also lived. The key question about how much could
be claimed is addressed below.
Mrs Miller says she raised the question
of her parents living with her in her second home with the Fees
Office in 2005. I have no reason to doubt her account; but most
of our records and correspondence have now been destroyed under
the House's Authorised Records Disposal Practice, so I cannot
comment on whether specific consideration was given to the matter.
The issue of parents living with a Member
is not addressed in the guidance issued by my Department. If this
issue had been brought to my attention as Head of Department,
I would probably have referred the matter to the Advisory Panel
on Members' Allowances for guidance. (This cross-party panel of
Members was a subcommittee of the Members Estimate Committee,
and oversaw the allowances system and the guidance that we issued.)
In general terms, the Panel accepted that Members needed to have
a family life and, given that the living arrangements were in
place prior to Mrs Miller being elected as an MP, this case would
probably have been treated sympathetically. While I cannot now
say how the Panel would have advised, my Department's advice to
them—if
the facts had been drawn to our attention—might
have been on the following lines:
· The
guidance available to Members between 2005 and 2009 stated that
the ACA could not be used to meet "living costs for anyone
other than yourself".
· That
said, there was no objection as such to a second home housing
a larger -than-usual extended family; but there was a case for
some degree of proportionality so that the public purse was not
chargeable for unrestricted lifestyle choices of
Members;
· Account
should be taken of the rule adopted in 2006 that there should
be an abatement of the ACA where part of a second home was sublet.
In this case, there was no subletting and no rent was received
from Mrs Miller's parents, so no abatement of the quantum of the
overall allowance would be appropriate; but there was a case for
saying that the costs attributable to the parents should not be
borne by the public purse;
·
An equitable outcome would be to apportion the ongoing costs attributable
to the second home between those relating to a) Mr & Mrs Miller
and their children, and b) Mrs Miller's parents. There was no
guidance that stated how costs should be apportioned but, given
that there were seven people in the family unit, a broad-brush
reduction of two-sevenths would have been a reasonable approach
to take.
This analysis of what might have happened
is inevitably hypothetical; but—if
the Advisory Panel had accepted advice along these lines—it
is clear from the table below that Mrs Miller's annual claims
would still have been less than five-sevenths of the overall costs
in each year.
| Year
| costs claimed
| costs incurred
| 5/7 of total costs
|
| 2005/06 |
£21,634 |
£35,734 |
£25,524 |
| 2006/07 |
£22,110 |
£37,654 |
£26,895 |
| 2007/08 |
£23,083 |
£42,348 |
£30,249 |
| 2008/09 |
£24,482 |
£34,689 |
£24,778"
|
75. The author of the independent legal
advice which Mrs Miller forwarded to me on 1 July[122]
said
"... the real issue in this
complaint is whether, by reason of the fact that Mrs Miller's
parents lived together with her, as they had done for many years
before she was a Member of Parliament, and stayed together with
her in her second home (moving between homes in line with her
Parliamentary timetable), Mrs Miller was thereby not permitted
to claim expenses for a second home, in circumstances where it
was essential she had both homes if she was to be able to fulfil
her Parliamentary and constituency duties and where her parents
received no benefit or advantage whatsoever from Mrs Miller's
having a second home and from having to travel to Mrs Miller's
second home. ...The question is thus in reality whether Mrs Miller
was entitled to have her parents live together with her as part
of one family unit or one household as she had done for almost
a decade before she became an MP. What manifestly cannot be said
is that Mrs Miller changed the living arrangements for her parents
as a result of being an MP or because of and to take advantage
of the Parliamentary expenses scheme."
The author of the paper also said
"The rules provided that
Mrs Miller should not claim living costs for anyone other than
herself, and after July 2006, that she or someone close to her
should not receive an immediate benefit or subsidy from public
funds. There is no sustainable argument that this rule or principle
was breached.
The correct analysis is that
Mrs Miller had one household. This happened to include her dependent
parents as well as her husband and her children. Where a Member
had one household but necessarily also had two homes to fulfil
Parliamentary duties, one of the two homes had to be regarded
as the main home for which no expenses could be claimed. Since
no expenses were claimed in respect of that main home, there is
no question that anyone in it was receiving any benefit from public
funds. This is why spouses and children are not regarded as receiving
a public benefit, because their home is the main home for which
no expenses are claimed. If, so that a family life can be maintained,
a spouse and children travel to and also stay in a second home
which the MP must have, that is no benefit at public expense because
their actual home is considered and must be the one provided at
private expense. They do not need the second home so cannot be
said to be being subsidised in any way by the necessity of its
existence.
The position is no different
at all when elderly and dependent parents are included. It makes
no difference that they travelled between the homes and were with
Mrs Miller. The fact is, as is undeniably demonstrated by the
nine years of living there before Mrs Miller was an MP, that Mrs
Miller's parents had a permanent home with Mrs Miller that was
provided exclusively at private cost and not subsidised in any
way and not provided at public expense. That home was wherever
Mrs Miller's home was. The fact that Mrs Miller's parents also
went to the second home does not in any way at all mean that those
people were being subsidised or provided for by public funds.
On the contrary, they were travelling only to maintain family
life and notwithstanding the burden and disruption for them. The
second home was not for them or their benefit and was not anything
they wanted or needed or had any financial advantage to them whatsoever,
nor was it somewhere in which they were installed as a result
of or subsequent to Mrs Miller's becoming an MP."
The author concluded "The only
proper resolution of the complaint is that it should not be upheld."
FINANCIAL ARRANGEMENTS FOR MRS MILLER'S
SECOND HOME
76. Mrs Miller had provided me on 3
January 2013 with a schedule "in rough terms"
of the accommodation costs of her London home[123].
In my letter of 17 January[124]
I asked for a breakdown of the costs and claims associated with
her London home and specifically for documents to support her
evidence. Mrs Miller replied on 18 February[125]
that the Fees Office had received all the documentary evidence
they require. She was happy for me to see all the documentation.
77. At my request, on 8 March 2013 the
Director-General of HR and Change provided copies of the evidence[126].I
shared the Director-General's letter and its enclosures with Mrs
Miller on 19 March.[127]
I asked for some additional information about the mortgage, which
was increased in 2007. I also asked Mrs Miller about the level
of electricity consumption in her London home, why a particular
bank was named as mortgagee on the insurance invoice held by the
Fees Office and supplied to me by the Director-General; and why
the property was remortgaged on 14 November 2007.
78. Mrs Miller said that she had not
considered the level of electricity consumption to be high for
the type of property. In relation to her mortgage, this had originally
been taken out with the bank named on the insurance invoice. She
said
"The mortgage changed in the
normal course of events.As you will be aware, these matters were
the subject of the audit carried out by Sir Thomas Legg. I enclose
a copy of the letter received from Sir Thomas at the conclusion
of his investigations."That letter states'Mrs Miller has
no issues.'"[128]
She said that there was no financial
advantage to her in designating her London home as her second
home.
79. In my letter of 25 April[129]
I asked whether Mrs Miller's parents made contributions to the
running costs of the London property and whether she had any agreement
with them about their use of the house.I asked whether she had
abated her claims to take account of their use of the house. I
asked again about the mortgage increase.
80. In her response of 9 May[130]
Mrs Miller gave me additional information about the rent and running
costs for her houses in Basingstoke and agreed to my contacting
the landlords for confirmation.Mrs Miller also told me that "The
running costs associated with both homes were covered by my husband
and me."
81. In relation to her London home,
Mrs Miller said
"The mortgage varied based
on changing interest rates and when we changed mortgage providers
we decided to increase the mortgage value. I have already forwarded
to you a copy of the letter to me from Sir Thomas Legg who has
already looked at the matter of mortgages in detail and found
there to be no issues."
82. In a following letter of 4 June[131]
she explains
"the cost of the London
property was significantly in excess of the amount claimed under
the ACA. ....Given the rules, my approach was to do what was fair
and reasonable, which was what I sought to do throughout."
83. Having been unsuccessful in arranging
a meeting I said in my letter of 23 October,
"In view of the difficulties
and to avoid further delay I suggest ... I now put together my
draft report and sent it to you with the evidence I hold ... If
I find there are gaps in the evidence ... we could meet at that
stage ."
I go on to say that I do have one question
which I had first asked on 19 March regarding the reason why the
mortgage was increased in March 2007. While saying that this might
not be relevant to my inquiry I asked for a response on this issue.
84. On 6 November Mrs Miller replied
on this point
"I am not sure I am able
to assist you further. The matter was over 6 years ago and I am
reluctant to speculate without attempting to locate any documents
on the subject if I still have any."[132]
85. On 11 November, having begun my
consideration of the evidence, I wroteto Mrs Miller[133],
enclosing the letter from the Director-General and asking some
very specific questions in relation to the mortgage arrangements
on her London home, including some discrepancies in the amounts
of her claims.I asked her to locate the documents on this and
to make an appointment to see me.Mrs Miller asked for time to
respond to the questions and I said that I would contact her again
at the beginning of December.
After a further exchange of letters,
Ms Miller wrote to me on 12 December raising issues about the
scope of my inquiry which she considered should be resolved before
further investigations could be pursued into these matters. Those
arguments are considered in the section on the inquiry process
below. In relation to my questions about her mortgage, she said,
"With regard to the property,
we purchased it in January 1996 for, as far as I can recall, £237,500.
The mortgage was I believe about 90% of the then value. The property
had not been occupied by the previous owners for some time and
they had let out individual rooms within the property so that
it was a house of bedsits … the property itself had not been
modernised for a number of years. Over the subsequent years we
necessarily set about carrying out work at the property. This
was done on a piecemeal basis. This work was substantial and related
to every part of the house. As property prices rose from the mid
1990s onwards, we were able to fund this from further advances
on the mortgage."
THE INQUIRY PROCESS
86. Mrs Miller wrote to me on 1 July[134]
stating that she had taken some legal advice and enclosing a document[135]
which set out her overall response to the complaint in more detail.She
argued that the complaint was unfounded and should not be upheld.
The author of the enclosed document said that
"The complaint about Mrs
Miller was in relation purely and simply to the residence of her
parents .... it is important, in the interests of fairness for
an enquiry not to be unduly expanded from the original complaint
or to become too diffuse...There is neither contrary evidence
nor any good reason at all to doubt Mrs Miller's explanation.
As such her evidence of the facts should be accepted."
87. The document then sets out the facts,
with more detail concerning Mrs Miller's parents' situation. Its
author argued that the costs of maintaining a second home were
greater than the expenses which Mrs Miller was able to claim,
so she was not housing members of her family at public expense,
and in fact her family were worse off financially as a result
of having two homes. The author considered the designation of
Mrs Miller's main home and suggested that the designation of the
home made no material difference to her claim.He/she asserted
that
"The expenses claimed were
plainly all for allowable expenditure within the Additional Costs
Allowance as set out in Section 3 of the Green Book during the
relevant period."
He/she concludes that the complaint
is groundless and there is no substance in it.
88. When I wrote to Mrs Miller on 18
July[136] I said that
I intended to seek the advice of the House authorities on the
complaint. I summarised the factual information she had given
and asked her to let me know if the summary was accurate. Mrs
Miller responded on 5 August[137]
saying that she was
"not sure why this further
stage should have been necessitated by my document when that document
sought clearly to show why the complaint is unwarranted. Indeed
given the clear explanation set out in that document as to why
the complaint made is without proper foundation, is not the right
course now for the inquiry to be concluded?"
She objected that the consultation would
mean more time elapsed and said she was not content with the summary
of facts in my letter.She asked me instead to send to the House
authorities her document sent on 1 July.
89. After further exchanges Mrs Miller
wrote on 12 September[138]
to give consent to my sending the papers to the House authorities,
albeit with some continued reservations and again raising issues
of procedure. I replied the same day[139]
to say that once I had the advice of the House authorities I would
meet with her and would discuss the issues of procedure with her
at that stage as well as the advice I had received.
90. I then wrote to Mrs Miller on 10
October[140] to make
arrangements to see her.Since I was not able to meet her on the
only date which was possible for her, I wrote to her on 23 October.[141]
I said that I would begin to draft the report and then arrange
a meeting if necessary; or else I would send her the draft report
together with the evidence. I asked again about the increase in
the mortgage. On 6 November Mrs Miller wrote to me asking me to
send her a copy of the Director-General's letter at that stage.[142]
In response to my question about the mortgage advance she said,
"I am not sure I am able
to assist you further. The matter was over 6 years ago and I am
reluctant to speculate without attempting to locate any documents
on the subject if I still have any. My point in relation to Sir
Thomas Legg's report is that his remit was 'to determine the validity
of payment of the additional costs allowance (ACA) made to Members
of Parliament during the period April 2004 to March 2009...' He
had the same principal documents you have and the remortgage was
something on the face of the papers which was under his consideration
and was within his remit. In contrast, as your letter indicates,
it does not seem that this is a matter which is relevant to your
inquiry."
91. I replied on 11 November.[143]
I explained that the questions I was considering were:
· Whether she made claims against
her additional costs allowance and personal additional accommodation
expenditure from May 2005 to April 2009 which provided her parents
with an immediate benefit and did not take full account of their
living costs;
· Whether her designation of
her Basingstoke properties as her main home was in accordance
with the rules of the House from May 2005 to March 2009; and,
overall,
· Whether the claims she 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 her
main residence for the purpose of performing her parliamentary
duties (and from April 2009, that the expenses were necessarily
incurred to ensure that she could perform her parliamentary duties);
92. I also asked Mrs Miller about the
successive mortgage arrangements which she had from 1996 to 2009
and to confirm whether, as alleged by the complainant, the purchase
price of her London home was £234,000. I asked her to set
out the size of the different mortgages or loans which she had
held against the property. I said that I realised that this might
require her to locate the documents relating to these mortgages
or loans, but since I presumed she had referred to some of them
when producing the figures which she sent me on 3 January, I hoped
this would not be too time consuming.
93. I also asked Mrs Miller how she
calculated the figures she gave for mortgage interest in her table
of 3 January. I noted that these differed from those given in
the letters from RBS which were lodged with the Fees Office for
those years. I asked her to explain how she arrived at her figures
and the reasons for the discrepancy. I also asked Mrs Miller about
the nature of the accommodation she had in London and to set out,
for each of the years from May 2005 to April 2009, who lived in
the house and when they would have been in residence; and how
the house was used and by whom, with estimates of the frequency
of use. I noted that Mrs Miller had told me that the house was
not closed during the summers from 2005 to 2009 when she and her
family lived in Basingstoke, but that she, her husband and family
used it "as required", and I asked her to explain this.
94. I noted that I had not previously
emphasised the question about the mortgage advance in my last
letter. I said that my concerns were not new. I reminded Mrs Miller
that in his initial letter to her on 12 December 2012[144]
my predecessor had asked her in detail about the arrangements
for her London home, including the mortgage arrangements, the
nature of the accommodation and who else lived there whether permanently
or otherwise.
95. Mrs Miller wrote to me in some detail
on 26 November.[145]
She said that the Director-General's letter vindicated her approach
and that it was clear that my inquiry should be concluded on the
basis of the analysis which she had sent to me in July. She said
that there seemed to be an implication that she had not sufficiently
assisted my inquiry, and "Any such implication would be
entirely untrue."
96. She disputed the validity of the
third question I said I was considering, which related to her
claims against the allowances from 2005 to 2009, which she said
was outside the scope of my original inquiry. She asserted that
there was no justification for reopening matters covered by the
Legg inquiry.She also said that
"If I were to self-refer
my ACA claims between 2005 and 2009 to you, pursuant to paragraph
8 of the Procedure for Inquiries you would have no jurisdiction
to consider this question unless (a) there were exceptional circumstances
and (b) the Committee authorised the inquiry ...If the Committee
were to be asked for authorisation, I would have to set out for
the Committee why there are no circumstances that could begin
to justify the inquiry."
97. Mrs Miller said
"The actual inquiry commenced
as long ago as 12 December 2012. It has therefore been ongoing
for a year. As such, I have been exposed to considerable prolonged
speculation, repeated adverse and inaccurate comment, and injurious
and untrue accusations. These are both hurtful and damaging ...
After all this time, the public and I must now be entitled to
a resolution.
No complaint can conceivably
be sustained on either of [the] issues [raised in the original
complaint] and both of those issues can permit of only one answer,
for the complaint to be not upheld ... I would respectfully ask
that you bring your enquiry on those issues to a conclusion."
98. In response to my questions about
the 2007 increase to her mortgage, Mrs Miller said
"I cannot see how this fits
in with the complaint made against me or the proper scope of the
inquiry which has been under way over the last year."
She concluded
"If you do not agree with
the way forward that I have proposed, I should be grateful if
you would let me know, setting out why. I shall of course consider
any explanation and any alternative proposals from you. It may
be that I shall need to refer this to the supervisory jurisdiction
of the Standards Committee but I hope that this can be avoided."
99. I responded to Mrs Miller's letter
on 5 December[146]
setting out the reasons why I considered that my additional questions
were relevant to the original complaint and why they had arisen
at this stage. I offered Mrs Miller two appointments to see me
or the option of contacting my office to make another arrangement
and said that if I did not hear from her I would finish my memorandum
to the Committee to the extent that I was able and would then
follow the usual processes to conclude my work.
100. Mrs Miller responded on 12 December[147]
and said that the issue of whether my further questions were within
the proper scope of my inquiry needed to be resolved first before
further investigations could be pursued into those matters.She
argued that the original complaint was not about her mortgage;
but only stated that her position was identical to that of Mr
McNulty.She said that I was proposing a novel interpretation of
the rules which had never previously applied and which would in
effect create a form of retrospective legislation. Mrs Miller
said
"I did not seek to gain
an improper advantage from the expenses systemor to apply it other
than properly, and of course you are aware that the Director-General
has vindicated my approach in relation to my family circumstances
... In the light of the matter set out in this letter and my previous
letter surely we have now reached the point where the investigation
should come to an end."
101. Mrs Miller finished her letter
by saying
"However, if you still wish
to pursue the new matters which I consider are manifestly outside
the terms of your investigation and beyond the scope of the inquiry
... I cannot agree to [a meeting] unless it has been considered
and formally sanctioned by the Standards Committee. If we are
in the position where you wish to pursue the new matters, therefore,
I think it is for me to write to the Standards Committee setting
out my concerns.I should be grateful if you could let me know
at the earliest opportunity as to whether it is necessary for
me to do this."
102. I replied to Mrs Miller on 20 December[148],
thanking her for the additional information on the original mortgage
and expressing concern that we were still not in agreement about
the scope of the inquiry. I explained that in the light of her
concerns I had again reviewed my recent letters and the procedural
note approved by the Standards and Privileges Committee.I explained
the process again but said that in fairness to her I thought that
I should advise her that I had been considering precedents in
relation to the issues concerning her and that I thought I should
make her aware of this at this stage.I listed for her a number
of cases determined by the previous Commissioner which I thought
were relevantand said that I would include brief summaries of
relevant cases in the factual part of my report so that she would
be fully aware of the issues I was addressing.I told Mrs Miller
that while I remained willing to see her I would now conclude
my report as quickly as possible and advised her that if she had
concerns about my authority to investigate her mortgage claims
she should raise them with the Standards Committee as soon as
possible so that they could be considered before I presented my
findings.
103. In the event Mrs Miller decided
not to write to the Committee but wrote again to me on 4 January[149].
She argued that my predecessor's questions about the mortgage
were to "establish a factual background with regard
to a specific allegation"and continued to maintain that
I have been attempting to start a new inquiry.She suggested that
she had understood from my previous letter, in which I said I
did not need to pursue further factual inquiries, that I was no
longer maintaining my position and she therefore did not need
to "trouble the Standards Committee" unless she
was incorrect.Mrs Miller discussed the precedents which I had
advised her might be relevant and asked me to be more specific.
104. I responded to Mrs Miller on 9
January[150] expressing
concern about her approach and advising her that I had now completed
the draft of the factual part of my Memorandum.I sent this and
the evidence compiled at the beginning of January. I asked Mrs
Miller to respond to me with any comments on factual accuracy
by 20 January which she did. I have considered and accepted many
of her amendments and all the recent letters have now been added
to the evidence.[151]With
regard to Mrs Miller's concerns about the scope of my inquiry
she has asked me to highlight to the Committee the letters in
which she sets out her position in detail. I accept that she may
feel that my necessarily brief summaries in the context of this
report do not do full justice to her arguments and am happy to
do this. The relevant letters are the report of 1 July,[152]
and the letters of 26 November, 12 December, 6 January and 17
January.[153]
Statement of Facts
i) In 1996, Mrs Miller and her husband
bought a house in London for around £237,500 with a mortgage
of approximately 90% of the value, i.e. around £215,000.
Between 1996 and 2005 as property prices rose Mr and Mrs Miller
increased the mortgage on the house. When Mrs Miller entered Parliament
it stood at around£525,000 (an increase of over £300,000).
The mortgage was increased by a further £50,000 to £575,000
in November 2007;
ii) Since 1996, Mrs Miller's parents
have lived with her and her husband and children. During the period
from May 2005 to April 2009 they were financially dependent on
her and made no financial contribution to the household;
iii) In 2003, Mrs Miller was selected
as a candidate for the Basingstoke constituency. She began to
rent a house in that constituency in June 2003. Her family has
had two homes since that time;
iv) Mrs Miller was elected in May
2005. In July 2005 she moved to a different home in her constituency.
She moved again in February 2009;
v) From the time ofher election
in 2005 until 2009, Mrs Miller designated Basingstoke as her main
home for the purposes of the allowances. Since 2010 she has claimed
costs in relation to her Basingstoke home.;
vi) Between May 2005 and April 2009
Mrs Miller claimed against her parliamentary allowances for the
cost of her London home. In each financial year the costs of her
second home were greater than the amount she was able to claim;
vii) When the House of Commons was
sitting, Mrs Miller would usually spend Monday to Wednesday nights
in her London home and Thursday to Saturday nights in her Basingstoke
home, although this did vary from time to time depending on her
duties in the House and on her appointments in her constituency.
Some Sunday nights were spent in London, and some in Basingstoke;
viii) During the recess, Mrs Miller
spent the majority of her time in Basingstoke. In three weeks
of September, she spent about three nights a week in London;
ix) Mrs Miller's parents, husband
and children also divided their time between London and Basingstoke.
During the school term, the rest of the family usually travelled
to Basingstoke on a Friday evening and spent the weekend there.
During the school holidays, the family was based in Basingstoke.
When Mrs Miller was on annual leave, her parents remained in Basingstoke;
(There is no evidence to corroborate
the above description of how the family moved between the two
houses but neither have I any reason to doubt it.)
x) All Mrs Miller's children began
their education in London. Mrs Miller's eldest child moved to
boarding school in Hampshire in September 2005. In September 2008
her second child, who had been at school in London, moved to a
different boarding school in Hampshire. Her third child remained
in school in London at the end of this period.
xi) In 2005, after she had been
elected, Mrs Miller sought advice from the Fees Office about the
designation of her main home. She explained that she had a large
family, which comprised her parents, husband and three children,
and that the whole family spent time in both the London and Basingstoke
homes. The Fees Office advised that she should designate as her
main home the home where she spent more nights than any other.
xii) Mrs Miller considers the statement
of facts set out under the heading "The Relevant Facts"
in her report of 1 July 2013 to be more complete and important
to consider[154].
Mrs Miller's case
105. Mrs Miller's letters, particularly
those from 1 July onwards, set out her arguments in detail. I
have summarised here the enclosure attached to her letter of 1
July. The full text of this is included in the evidence[155].
106. It is very clear from her evidence,
and not disputed, that Mrs Miller's situation is not the same
as that of Tony McNulty and that the complaint is inaccurate in
alleging this. Mrs Miller's parents lived together with her and
the remainder of her family as one family unit in the same house
and had done so for nine years before she entered Parliament.
She has not maintained two homes in order to provide housing for
her parents in a second home. Mrs Miller suggests the real issue
is whether because her parents were living with her in her second
home she was therefore not permitted to claim expenses for that
home.She says that all the expenses claimed were plainly for allowable
expenditure within the ACA as set out in the relevant Green Books
for the period.
107. Mrs Miller says that the complaint
is purely and simply about the residence of her parents and not
directly about the designation of her homes, and she has been
concerned that in the interests of fairness the inquiry should
not be unduly expanded or become too diffuse. Mrs Miller contends
that her evidence has been given in good faith and is plainly
and incontestably true, and that as such, her evidence of the
facts should be accepted.
108. Mrs Miller has given detailed information
about the way in which her family divided its time between the
two homes.She designated her Basingstoke home as the main home
because she normally spent more nights there than any other. She
twice consulted the Fees Office about her designation, including
specific reference to her parents living with her and was told
the designation was correct and in accordance with the rules.She
considers that it was mandated by the Green Book. There was no
financial advantage to her as to which home was designated as
her main home and the cost of maintaining each home was above
the ACA limit for claims.Mrs Miller had looked after her parents
for many years and her claims were in no way increased to look
after them. They received no financial benefit from her expenses.The
issue is therefore only whether Mrs Miller's claims were wrong
because her family unit included her parents. In this situation
an adverse finding would be retrograde and discriminatory.
109. Mrs Miller also makes the point
that she had family and caring responsibilities long before her
election as an MP. It would be wrong for this to be held against
her and if her parents had not been allowed to travel and stay
with her she could not have fulfilled her public duties. The IPSA
consultation paper of January 2010 recognises this and says
"Nobody should be deterred
from becoming an MP because it could not be combined with the
duties of a parent or carer. We believe this is sufficiently important
to justify the use of public funds to allow MPs with responsibilities
for caring for others, to allow them to rent accommodation which
is more spacious than would be necessary if they lived alone."
110. Mrs Miller concludes that the complaint
should not have been made. It is groundless andthere is no substance
in it.Once the true facts are known it becomes clear that the
complaint is empty. The only proper resolution is that it should
not be upheld.
Process Issues
111. Towards the end of my inquiry Mrs
Miller raised procedural issues and was unwilling to answer my
questions about her mortgage interest claims until these were
resolved. She argued that;
· The level of mortgage interest
against which she claimed ACA was not part of Mr Mann's complaint
and that I should not extend my inquiry to cover it because it
is an entirely new issue.
It is clear from Mr Mann's original
letter for complaint that this issue is part of the matters into
which he wished me to inquire.[156]He
could not however have been expected to give me the detailed information
revealed by this investigation. The mortgage issues are also raised
in the Daily Telegraph article which my predecessor mentions and
encloses with his letter to Mrs Miller[157].
· The information required
to address this issue involves matters which date back some 17
years and nine years before she became a Member.I have no authority
to ask questions about that time and if such an analysis were
applied generally I might need to look back into the affairs of
some Members for 30 to 40 years.
112. The original value of Mrs Miller's
house is a matter of public record following the media coverage
in late 2012 and is stated in the original letter of complaint.
The evidence I have used in this memorandum is derived from Mr
Mann's letter and records of Mrs Miller's ACA claims held by the
House, which she gave me permission to seek from the Director-General
of Human Resources and Change[158]The
information retained in Mrs Miller's ACA records confirms that
when she was elected her mortgage stood at £525,000 and that
at the end of 2007 she increased it to £575,000. Bank statements
are available covering the months from November 2007 to March
2008, which show that during this period, after offsetting the
interest received on another, smaller, savings account, she continued
to claim for interest on a loan equivalent to around £525,000.
This information has been sufficient to enable me to determine
this issue beyond reasonable doubt.
113. In addition to this, there are
precedents in relation to the Commissioner's consideration of
the purchase of property and the level of mortgage interest claimable,
when these date back to before the time that a Member was elected
to the House. In particular the previous Commissioner, in the
course of his inquiries, considered the arrangements made by Alan
Duncan[159] to purchase
a house six years before he became a Member, and the mortgage
arrangements made by George Osborne shortly before his election.
· Sir Thomas Legg has already
reviewed her expenses and has concluded that there were no issues.
I have no remit to reopen this matter
114. There are already precedents for
the Commissioner to investigate matters which were in part considered
by the Legg review. In particular in the matter of Mackay and
Kirkbride the Committee agreed with the Commissioner that the
audit and appeal process followed by the Legg review did not enable
the House itself to form its own view on whether the rules of
the House had been breached and it was therefore appropriate for
the Commissioner to inquire.
115. Some of the matter which I am setting
out here would not have been clearly apparent to Sir Thomas from
examining the papers available to the Fees Office without the
additional information of the amount of the original mortgage.
· In looking at these matters
I am proposing a new interpretation of the rules on which there
has been no guidance. I am introducing retrospective requirements
and penalising members for matters not contrary to the rules at
the relevant time.
116. The guidance contained in the Green
Books for 2005 and 2006 is clear on this matter. When Mrs Miller
entered the House in 2005 she was entitled to claim against interest
payments on her original mortgage but not for subsequent additions
to that mortgage. From 2006 she was entitled to claim for the
mortgage interest repayments on any increase agreed by the House
authorities, for example for repairs. However, she increased her
mortgage by a further £50,000 in 2007 and there is no evidence
that she informed the Fees Office of this or requested their permission.Wider
rules also cover the need to ensure the proper use of allowances
and the limitations on what is allowable are clear.
Conclusions
117. Throughout my inquiry it has been
difficult to establish information and evidence to the standard
of proof which I would have wished. This is in part because of
the length of time since some of the relevant events took place.
There is also a lack of supporting evidence. It is not clear whether
some documents which might have provided have ever existed.For
example there are no notes of conversations between Mrs Miller
and the Fees Office in 2005 or 2006, no forms designating Mrs
Miller's second and third homes in Basingstoke as her main homes,
no correspondence applying for permission to claim the interest
on the increase in her mortgage in 2007, and no rental agreement
for her third property in Basingstoke.
118. It has also been difficult to find
evidence to corroborate information provided by Mrs Miller. For
example, despite sustained efforts I have not been able to find
evidence to support the information she has given me about the
number of nights she spent at each of her properties. Mrs Miller
relies heavily on this number as the reason for her decision to
designate her Basingstoke home as her main home.Equally, it is
true that I have found no evidence to gainsay what she has told
me; and this should not be held against her.However, I should
add that many of her responses to my questions have been very
general and required repeated probing. This has added considerably
to the length of my inquiry.I have reached a conclusion in relation
to Mrs Miller's designation of her home on the balance of probabilities,
and in the event this does not rely on a determination of the
number of nights which she spent in her Basingstoke home.
119. I have 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?
I consider each of these issues in turn:
a) Was Mrs Miller's designation
of her main and second homes correct?
120. While no record exists of Mrs Miller's
discussions with the Fees Office at the time she was elected,
I have no reason to doubt that she did discuss the designation
of her homes with them, or that she told them that she anticipated
at that time that she would spend more nights in Basingstoke than
in London and that she had a large family.The Director-Generalof
HR and Change has told me that
"this would have been sufficient
information to allow my Department to agree that it was correct
for Mrs Miller to nominate her Hampshire property as her main
home, with the consequence that her London property was her second
home for ACA purposes.I agree, therefore that the designation
of the homes was correct."
121. The guidance given to Members concerning
the designation of their homes for the purpose of ACA,in the Rules
relevant from May 2005 to March 2009, was that
"The location of your main
home will normally be a matter of fact. If you have more than
one home, your main home will normally be the one where you spend
more nights than any other."
In other words, the location of the
main home would normally be a matter of fact and the question
of nights only became relevant if it was not.If the Fees Office
were in full possession of all the relevant information when they
advised Mrs Miller to designate her Basingstoke home as her main
home on the basis of where she expected to spend her nights, they
were, in my view, wrong for the following reasons.
122. The Basingstoke home, which Mrs
Miller designated as her main home, was not a permanent base for
her and her family; the tenancy agreement for the property which
she had rented in 2003 while campaigning in the constituency had
already expired.Mrs Miller moved to a second property at the end
of July 2005, and to a third in February 2009. The first rented
property had three bedrooms and the second and third properties
had four, which suggests that the accommodation they provided
for Mrs Miller's extended family was less spacious than that of
her five bedroomed London home.
123. Before she first rented a home
in Basingstoke in 2003, Mrs Miller's home was in London, in the
five bedroomed house which she and her husband had bought with
a mortgage in 1996. She had welcomed her parents and brothers
to live with her towards the end of the same year, and her parents
have continued to live with her since that time. She and her husband
had over the years undertaken a number of repairs and improvements
to the property. London was also where her husband worked and
where each of her children in turn went to school.In 2010, having
claimed no costs for about a year, she decided to claim for the
costs of staying in Basingstoke under the IPSA scheme.
124. In my view Mrs Miller's London
home would have been maintained in any case, even had she not
been an MP.The statement provided by Mrs Miller's legal advisersaid
that she had to have a second home"exclusively and necessarily
for herparliamentary duties". It cannot be said that
her London home was established or maintained"exclusively
and necessarily for her parliamentary duties". I consider
it more likely than not that Mrs Miller's London home was her
main home, as a matter of fact, and that the expenses which she
incurred on staying away from her main home in order to perform
her parliamentary duties were those associated with the Basingstoke
properties.On the balance of probabilities I find therefore that
Mrs Miller should have used her discretion to nominate her London
home as her main home for ACA purposes from May 2005 to
March 2009.[160]
125. Although it is not a matter on
which I need to reach a conclusion, I also think it unlikely that
any of the Basingstoke properties were the main home for Mrs Miller's
family. I think it likely that Mrs Miller's main family home remained
in London, and that this was the home exerting the "gravitational
pull" including during the summer months, when she initially
told me that her London home was "unused".When Mrs Miller's
two elder children moved to schools in Hampshire, it was to boarding
school, and throughout this period she had at least one child
at school in London.Mrs Miller's estimates of the utility and
other bills incurred at her London home over the period, and the
invoices provided for 2008-09, do not support the idea of a house
that was (except for the month of September and the occasional
exception at other times) unused during the 19 to 20 weeks of
Parliamentary recess each year, and from Friday to Sunday evenings
during sitting periods.
126. If my conclusion about the designation
of Mrs Miller's home is accepted by the Committee, and I fully
accept that the matter is finely balanced, it follows logically
that her claims for her London home were not valid. I have received
no evidence that Mrs Miller designated her main home other than
in good faith, or that she was motivated by financial gain. Mrs
Miller has informed me, and I accept, that the costs of the Basingstoke
properties, had she designated them as her second homes, would
also have been above the ACA limits.If, as she has told me, the
Fees Office advised her to designate her Basingstoke properties
as her main home, that is a mitigating factor, although I do not
agree that she was bound to follow their advice. I also accept
her assurances that she sought to do what was "fair and
reasonable throughout."
127. However, the Committee may equally
take the view that in all the circumstances Mrs Miller's designation
of her homes was reasonable, and I have for this reason also considered
the second and thirdissues raised by the complainant.
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?
128. The complaint made by Mr Mann was
that Mrs Miller had put herself in the same position as Tony McNulty
in 2009-10.He said;
"the arrangement Mr McNulty
made in accommodating his parents rent-free... provided an immediate
benefit or subsidy from public funds to him and through him to
his parents. Such a benefit was specifically prohibited by section
3.2.2 of the Green Book Rules of July 2006 and it was against
the spirit of the previous rules."
129. The circumstances of the two Members
are not similar. Mr McNulty[161]
permitted his parents to live in a house inwhich heoccasionally
stayedovernight,but whichwas theirpermanent home.As has already
been made clear, Mrs Miller's parents moved to London to live
with her in 1996.She tells me that they are fully part of the
family unit and her evidence on this point is supported by the
family history. I do not doubt it.
130. It is clear from the Committee
on Standards and Privileges' discussions of other cases that that
Committee has accepted that it could be appropriate for family
members to live with a Member in that Member's second home for
which they were claiming ACA, provided that this was not at the
public expense.I agree with the principles set out in the IPSA
paper quoted by Mrs Miller.However, Mrs Miller's actions must
be judged against the rules which applied at the relevant time,
which was before IPSA was established. The need for transparency
in any such arrangement becomes significant.
131. My predecessor noted that Mr McNulty
did not claim against his allowances for the full costs of his
second home, but reduced the costs which he claimed. The Commissioner
said about this reduction,
"there was an informal and
undocumented arrangement. It was not in my view an acceptable
basis on which to claim public money. It provided no audit trail
... It avoided the spirit of the Green Book Rules ... By not fully
and transparently excluding his parents' living costs from his
claim ... I conclude that Mr McNulty was in breach of the rules
of the House by claiming for the living costs of someone other
than himself."
132. In the case of Mrs Main, the Standards
and Privileges Committee agreed that,
"any abatement should have
been formal and should have been notified to the Department of
Resources as such..."
133. Should arrangements such as this
be made to accommodate members of the extended family, it was
important that they were discussed very specifically with the
Fees Office and that clear financial accounting procedures were
in place to ensure that claims were appropriately reduced and
that the Fees Office was aware of this. Mrs Miller told me that
she informed the Fees Office about the presence of her parents
in the household, but there is no evidence that she asked for
advice, or that it was ever given, about the question of reducing
her claims, and no record of any discussion.As my predecessor
has said, this is not an acceptable basis on which to claim public
money.
134. The Director-General suggests that
if a formal arrangement were made an abatement of 2/7 of the overall
costs of the household would have been appropriate.In Mrs Miller's
case, it appears that if she had abated the costs of her London
home, and reduced them by 2/7 from May 2005 to April 2009, she
would still have been able to claim allowances to the maximum
permitted because the household expenses[162]
were above the ACA ceiling in each year:
| Year
| 2005-06
| 2006-07
| 2007-08
| 2008-09
|
| Maximum ACA
| £21,634
| £22,110
| £23,086
| £24,006
|
| Estimated expenses
| £35,734
| £37,654
| £42,348
| £34,689
|
135. However, in reviewing Mrs Miller's
expense claims over the period in question there is another matter
to be considered.
c. Were Mrs Miller's ACA claims
made in accordance with the rules and guidance of the relevant
period?[163]
136. In her letter to me of 12 December
2013, Mrs Miller provided the following additional explanation
of the increase in her mortgage since the original purchase in
1996:
"Over the subsequent years
we necessarily set about carrying out work at the property. This
was done on a piecemeal basis. This work was substantial and related
to every part of the house. As property prices rose from the mid1990s
onwards, we were able to fund this from further advances on the
mortgage."
Mrs Miller was of course entitled to
make whatever arrangements she saw fit in respect of her mortgage
before she entered the House. This investigation is concerned
only with the claims for mortgage interest that she made against
the ACA following her election in May 2005.
137. Paragraph 3.11.1 of the 2005 Green
Book, which was in force when Mrs Miller entered the House, made
plain that the mortgage costs which could be claimed were
"limited to the interest
paid on repayment or endowment mortgages, legal and other costs
associated with obtaining (and selling) that home (eg stamp duty,
valuation fees, conveyance, land search, removal expenses)"
and that Members could not claim for
"interest on any additional mortgages, advances or loans
secured on the same property". Between May 2005and June
2006, Mrs Miller was therefore not entitledto claim for interest
on a mortgage in excess of the original £215,000.
138. In July 2006 these rules were changed
and Members were permitted to claim, subject to prior consultation
with the Fees Office, for "increases to mortgage costs
(ie: re-mortgaging) to pay for improvements to a property."
A similar rule was included in the Green Book which applied from
April 2009.
139. Mrs Miller moved her mortgage to
a different lender at the end of 2007, and at the same time she
increased it by £50,000 to £575,000. Although when she
signed the ACA1 nomination form in June 2005 Mrs Miller had certified
that
"I understand that I must
tell the Members' Allowances Section in advance about any substantive
change to the financial arrangements for these homes, such as
changes to the value of mortgages and bank loans,"
there is no evidence that Mrs Miller
discussed these changes with the House authorities and she has
not suggested that she did so. The interest on the additional
£50,000 is therefore not an allowable claim.
140. Even if Mrs Miller had consulted
the Fees Office, the rules would not in my view have permitted
claims for the interest on a loan which partly or wholly paid
for improvements undertaken in the years before she became a Member.
I therefore conclude that during the period from July 2006 to
April 2009 she was not entitled to claim for interest on any of
the mortgage in excess of the original £215,000. I believe
the evidence that she did so is beyond reasonable doubt.
141. I have considered Mrs Miller's
concerns about my investigation of her claims for interest on
her mortgage very carefully and believe that these claims are
an intrinsic part of the complaint put to me by Mr Mann and that
my interpretation is consistent with the rules set out in the
Green Books of 2005 and 2006. Precedents determined by the Committee
on Standards and Privileges support my interpretation but it is
a matter for the Committee as to whether they wish to be bound
by these.
142. On the basis of the information
available about the mortgage interest charged by Mrs Miller's
lender in three of the five years covered by the complaint, which
relate to a loan of approximately £525,000, it is possible
to calculate on a rough basis the interest which she would have
been charged on a mortgage of around £215,000, the approximate
size of her original mortgage. My figures are set out below: Estimate
of mortgage interest payable on loan of £215,000[164]
| Year
| 2005-06
(11 months)
| 2006-07
| 2007-08
| 2008-09
| 2009-10 (April 2009 only)
| Total
|
| Mortgage interest claimed
| £15,829.00
| £17,268.00
| £17,788.00
| £19,264.63
| £164.68
| £70,314.31
|
| Mortgage interest paid by Mrs Miller
| £16,168.25
| £24,880.82
| £30,736.00*
| £21,530.00*
| £164.68
| £93,479.75
|
| Mortgage interest which would have been claimable, assuming loan of approx £215,000
| £6,621.28
| £10,189.29
| £12,587.12
| £8,817.05
| £67.44
| £38,282.18
|
*Complete interest statements are
not available for these years. In my calculations, I have therefore
relied on Mrs Miller's own estimates of the mortgage interest
paid.
143. This table suggests that ifMrs
Miller had claimed the interest on a loan of this size, she would
have been able to claim around £38,000 instead of the £70,314
she actually claimed from 2005-06 to 2009-10. On this basis, over
the period covered by the complaint, Mrs Miller claimed around
£32,000 in interest payments to which she was not entitled.
(In view of the time which has elapsed since these costs were
incurred, and the information available, it would not be realistic
to attempt calculations in more precise terms.) If these figures
are accepted, Mrs Miller's costs then fall below the ACA ceiling
and abatement in respect of her parents' living costs becomes
an issue.
The living costs of Mrs Miller's parents
144. I now return to the issue of the
amount by which Mrs Miller's claims should have been abated to
take account of her parents' costs. The Director-General has suggested
that it would have been right for Mrs Miller to have reduced her
claims by 2/7 to take account of her parents' presence in the
household. I accept this.
145. The only costs associated with
Mrs Miller's constituency homes which I have been able to establish
with reasonable certainty are the rental costs. The table below
shows that if she had designated her constituency homes as her
second homes from May 2005 to March 2009[165]
and if she had reduced her claims by 2/7 to take account of her
parents' presence in the household, she could have claimed around
£54,000 for rent over the period. I have not been able to
establish the other costs associated with these properties, but
I consider it likely that if Mrs Miller had claimed for these,
also reduced by 2/7, her claims would have been at or around the
ceiling of the relevant allowance from May 2005 to March 2009.
Effect of 2/7 reduction on constituency
home rental
| Year
| 2005-06
(11 months)
| 2006-07
| 2007-08
| 2008-09
| Total
|
| Rental |
£17,100.00
| £18,000.00
| £19,200.00
| £21,000.00
| £75,300.00
|
| 5/7 of rental
| £12,214.29
| £12,857.14
| £13,714.29
| £15,000.00
| £53,785.71
|
146. Since the Committee may take the
view that Mrs Miller was correct in her designation of her home
for ACA purposes I have also estimated the amount Mrs Miller could
legitimately have claimed against her allowances, if reduced by
2/7, assuming it was thought that she was within the rules to
claim for the interest on her original, £215,000 mortgage
on her London home. I have also considered what she could have
claimed for council tax on that home, had she reduced her claims
by 2/7 to take account of her parents' presence in the house.The
figures are set out below.
Effect of 2/7 reduction on mortgage
interest and council tax claimable
| Year
| 2005-06
(11 months)
| 2006-07
| 2007-08
| 2008-09
| 2009-10
(April only)
| Total
|
| Effect of 2/7 reduction on mortgage interest claimable
|
| (a) Mortgage interest actually claimed
| £15,829.00
| £17,268.00
| £17,788.00
| £19,264.63
| £164.68
| £70,314.31
|
| (b) Mortgage interest which would have been claimable, assuming loan of approx £215,000
| £6,621.28
| £10,189.29
| £12,587.12*
| £8,817.05*
| £67.44**
| £38,282.18
|
| (c) 5/7 of interest on original £215,000 mortgage ((b) above)
| £4,729.49
| £7,278.06
| £8,990.80
| £6,297.89
| £48.17
| £27,344.42
|
| (d) costs claimed in excess of 5/7 of mortgage interest on £215,000 loan (excess of (a) over (c))
| £11,099.51
| £9,989.94
| £8,797.20
| £12,966.74
| £116.51
| £42,969.89
|
| Effect of 2/7 reduction on council tax claimable
|
| (a) Council tax: costs claimed
| £1,650.00
| £1,800.00
| £1,800.00
| £2,101.52
| Not claimed
| £7,351.52
|
| (b) Council tax: actual rate
| £1,900.42
| £2,171.05
| £2,257.34
| £2,335.52
| | £8,664.33
|
| (c) 5/7 of council tax rate
| £1,357.45
| £1,550.75
| £1,612.39
| £1,668.23
| |
£6,188.81 |
| (d) costs claimed in excess of 5/7 (excess of (a) over (c))
| £292.55
| £249.25
| £187.61
| £433.29
|
| £1,162.71
|
*Complete interest statements are
not available for these years. In my calculations, I have therefore
relied on Mrs Miller's own estimates of the mortgage interest
paid.
**The figure quoted for 2009-10 is
based on the interest Mrs Miller paid in April 2009, to which
were added any credits for interest received on another account.
147. If my arguments are accepted, Mrs
Miller could properly have claimed just over £27,000 for
mortgage interest, and just over £6,000 for council tax:
a total of £33,500 under these two headings, as opposed to
the £77,665.83 which she did claim. She should have reduced
her council tax claim by around £1,000 to take account of
her parents' presence in the household, and her mortgage interest
claim by approximately £43,000 to take account of the extensions
to her mortgage as well as her parents' presence in the household:
a total reduction of around £44,000.[166]
148. I have insufficient evidence to
be able to set out with certainty the other running costs of Mrs
Miller's London home. However, in January 2012 she provided her
own estimates of these, which suggest that in each year from 2005-06
to 2008-09, the amounts she claimed under the headings of utilities,
cleaning, maintenance/repairs/furnishings/ insurance and telecoms
were less than 5/7 of the total costs incurred.The only cost which
she claimed in full was a £80 parking permit in 2005-06.
149. In 2009-10 Mrs Miller did not claim
for anything other than the mortgage interest for the month of
April. She has also said that she would have been entitled to
claim for her food costs in each relevant year, to a total of
£480 a year.
Concluding Summary
150. This report has considered three
interrelated issues at some length and arrived at what are potentially
very serious conclusions relating to a matter which continued
over the space of four years.Since a very early initial meeting
to discuss the process it has not been possible to arrange to
meet Mrs Miller and the Standards Committee may think that it
would be helpful to take more evidence from Mrs Miller at this
stage, if they consider that there are unresolved issues.
151. The first issue was the designation
of Mrs Miller's main home, which was a decision for her to make.It
is my view on the balance of probabilities that Mrs Miller should
have used her discretion to nominate her home in London as her
main home between May 2005 and the end of March 2009, when the
rules changed.If Mrs Miller had decided that her London home was
her main home she would have been entitled to claim against the
ACA in respect of the rent and other costs of the Basingstoke
homes.She herself says this would have made little financial difference.
152. The decision Mrs Miller made impacts
upon the second issue. Throughout the period 2005-09 Members were
not allowed to claim for "Living costs for anyone other
than yourself". In addition, the Green Book for July
2006 included the following principle in paragraph 3.3.2:
"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 ..."
153. This Memorandum supports the view
that the rules in place for Members should not discriminate against
certain groups by making it more difficult for them to enter the
House. Members may have caring responsibilities and may have wider
family living with them. This was Mrs Miller's position and the
arrangements she had made with her parents were already long-standing
when she became a Member of the House. There can be no criticism
of her in relation to her personal, caring responsibilities and
her desire to combine these with the role of an elected representative.
However, as with any other career, she could not expect her employer,
or in this case the public purse, to contribute to the living
costs of her parents, and this was specifically contrary to the
rules in place at that time. Mrs Miller did not make any formal
arrangements by which she could demonstrate transparently that
she was not claiming for their costs.I accept that the practices
in relation to Members' claims in 2005 fell short of what would
be expected in 2014, but the lack of abatement resulted in the
inappropriate use of public money.
154. Finally, I have established beyond
reasonable doubt that between June 2005 and April 2009 Mrs Miller
claimed for mortgage interest against a mortgage significantly
larger than the one required to purchase her property; that she
further increased her mortgage without the knowledge or agreement
of the House authorities in 2007; and that she then made continued
claims for interest against the new amount, albeit offset by interest
generated by another account.
155. I recognise that the matters which
are the subject of this report are now old, some dating back nearly
nine years. Some of the mortgage increases may have occurred several
years before Mrs Miller was elected. However, once she was elected,
it was Mrs Miller's responsibility as a Member making claims against
the ACA to ensure that she was familiar with, and abiding by,
the rules relating to Members' claims set out in the Green Books.
She should also have sought advice if she was in doubt about the
interpretation of those rules or their application to her circumstances.
My comment about transparency relates to this issue as well. In
particular I find it difficult to believe that Mrs Miller genuinely
thought she was entitled to make the additional claim for her
extended mortgage in 2007 without any consultation with the House
authorities or agreement from them. If the Committee agrees with
my interpretation of the rules, the total amount by which Mrs
Miller has over-claimed in relation to her mortgage interest would
be around £44,000[167],
to which should be added a further £1,000 to take account
of the reduction which she should have made to her claims for
council tax to take account of her parents' presence in the home.
Her apparent misuse of the allowances system continued for four
years from May 2005 to the end of April 2009 and seems to have
been brought to an end only by the expenses scandal of 2009-10
when she abruptly ceased to claim.
156. As I have already said, the Committee
may not agree with me that the designation of Mrs Miller's home
was wrong on the balance of probabilities, but other matters are
apparent beyond reasonable doubt. I recognise that I have offered
a strict interpretation of the rules as they stood in 2005 which
impacts significantly on Mrs Miller's unusual situation. However,
these issues are very serious and continued over a number of years.
I have not been able to discuss some of the detail in relation
to the abatement and mortgage issues with Mrs Miller because of
her insistence that I had no remit to investigate them. I therefore
cannot offer a full explanation of the circumstances surrounding
those matters.
73 In fact Mrs Miller and her husband rented three
different properties in the Basingstoke area over the period covered
by this complaint, which was from May 2005 to April 2009. Back
74
Mrs Miller considers that this matter is not within the scope
of the complaint WE42,44,46 Back
75
WE2 Back
76
Committee on Standards and Privileges, 10th Report
2008-09 Back
77
MrsMillerdoesnotagreethatMrMannraisedtwoissuesWE42,44,46 Back
78
MrsMillerobjectsthatIhaveincludedmoredetailthanMrLyon'soriginalletterhere:WE48andmyresponseWE49 Back
79
CommitteeonStandardsandPrivileges,9thReport2008-09
Back
80
CommitteeonStandardsandPrivileges,14thReport2007-08 Back
81
CommitteeonStandardsandPrivileges,10thReport2008-09.MrsMillerhasofferedananalysisoftherelevanceofthisreporttohersituationatWE48 Back
82 CommitteeonStandardsandPrivileges,8thReport2009-10 Back
83
CommitteeonStandardsandPrivileges,6thReport2009-10MrsMilleroffersacommentonthiscaseatWE48 Back
84
CommitteeonStandardsandPrivileges,5thReport2010-11 Back
85
CommitteeonStandardsandPrivileges,11thReport2008-09 Back
86
WE3 Back
87
WE4 Back
88
WE6 Back
89
WE8 Back
90 WE7 Back
91
WE9and10 Back
92
OriginalandunredactedcopiesofclaimsbeforeApril2009arenolongerheldalthoughredactedcopiesareavailableonParliament'swebsite. Back
93
WE12 Back
94
In,respectively,July2005andFebruary2009. Back
95
WE14 Back
96
WE15 Back
97
WE16 Back
98
WE17 Back
99
WE18 Back
100
WE23 Back
101
WE23 Back
102
WE19 Back
103
WE24 Back
104
WE20 Back
105
WE22 Back
106
WE21 Back
107
WE35 Back
108
WE36 Back
109
WE26 Back
110
WE6 Back
111
WE8 Back
112
WE11 Back
113
WE12 Back
114
WE14 Back
115
WE15 Back
116
WE16 Back
117
WE28 Back
118
WE30 Back
119
WE31 Back
120
WE35 Back
121
WE36 Back
122
WE26 Back
123
WE4 Back
124
WE6 Back
125 WE8 Back
126 WE10 Back
127
WE11 Back
128
WE12 Back
129
WE14 Back
130
WE15 Back
131
WE17 Back
132
WE40 Back
133
WE41 Back
134
WE25 Back
135
WE26 Back
136
WE28 Back
137
WE29 Back
138
WE33 Back
139
WE34 Back
140
WE37 Back
141
WE39 Back
142
WE40 Back
143
WE41 Back
144
WE3 Back
145
WE42 Back
146
WE43 Back
147
WE44 Back
148
WE45 Back
149
WE46 Back
150
WE47 Back
151
WE48,WE49 Back
152
WE25and26 Back
153
WE42,44,46and48 Back
154
WE26 Back
155
WE26 Back
156
WE2 Back
157
WE3 Back
158
WE10 Back
159
CommitteeonStandardsandPrivileges,11thReport2008-09 Back
160
TheruleschangedfromApril2009.TheMarch2009GreenBookallowedMembersfreedomtodesignateanyUKresidenceastheirmainhome. Back
161
CommitteeonStandardsandPrivileges,10thReport2008-09 Back
162
MrsMiller'sestimatesWE5 Back
163
FigureshavebeenamendedtoreflectinformationprovidedbytheCommissionerinherletterof13February2014,theamendmentsrelatespecificallytoparagraphs142,147and155.TheCommissioner'sletterisavailableatAppendix2 Back
164
SomefiguresinthetablehavebeenamendedtoreflecttheCommissioner'samendmentsinherletterof13February2014.ThisletterisavailableatAppendix2 Back
165
IdonotfindthatMrsMiller'sdesignationofherhomeswasagainsttherulesinApril2009,followingthechangeintheruleswhichtookeffectthatmonth. Back
166
TheamountbywhichclaimsshouldhavebeenreducedbyhasbeenamendedtoreflecttheCommissioner'samendmentsinherletterof13February2014.ThisletterisavailableatAppendix2 Back
167
TheamountoverclaimedhasbeenamendedtoreflecttheCommissioner'samendmentsinherletterof13February2014.ThisletterisavailableatAppendix2 Back
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