Mr Jeremy Hunt - Standards and Privileges Committee Contents


Written evidence received by the Parliamentary Commissioner for Standards

1.  E-mail to the Registrar of Members' Financial Interests from Mr Jeremy Hunt MP, 1 June 2009

As a result of the scrutiny of MPs' expenses, something concerning the arrangements over my second home in Farnham has come to light which I would be grateful if you advise me on.

In the run up to the General Election of 2005 I was based in Surrey full time, and therefore declared my Farnham home as my main residence. Since the Spring of 2004, I had allowed my agent to stay there three to four nights a week free of charge.

After I had been an MP for a few months, I realised I was spending more nights every week in London. From November 2005 I therefore redesignated my Farnham home as my second home, and claimed for mortgage interest on it accordingly. However my agent continued to use a room there until she retired in June 2007.

I bought the house in 2003, before I was elected to Parliament. It cost £185,000, of which £35,000 was my own deposit. By the time I designated the home as my second home the mortgage for which my ACA paid the interest covered about 68% of the equity, with my share the remaining 32%.

It has been suggested to me that as my agent used half of the house for half of the week, she was benefiting from one quarter of the value of the house, which is less than the equity share that I personally owned. On the basis of that, there would be no question of taxpayers' funds being used for party political advantage.

However I would be very grateful for your independent view as to whether I have inadvertently broken the rules in any way. I understand that taxpayers' money should not be used for party political advantage, and in this case I must admit it did not occur to me that they were because the arrangement neither benefited me personally nor caused any additional cost to the taxpayer.

I would be grateful if you could let me know if I have made any mistakes and if so what I should do to rectify the situation.

1 June 2009

2.  Letter to the Commissioner from Mr Mike Simpson, 7 June 2009

I am writing to complain about the conduct of Jeremy Hunt, MP for South West Surrey. I have read the various documents provided by your office regarding the procedures and the guidance notes on how to make such a complaint. My complaint pertains to what I believe are breaches of the Code of Conduct for MPs, in particular relating to paragraph 14 which states, `Members shall at all times ensure that their use of expenses, allowances, facilities and services provided from the public purse is strictly in accordance with the rules laid down on-these matters, and that they observe any limits placed by the House on the use of such expenses, allowances, facilities and services.'

I have examined the Parliamentary 'Green Book' which sets out the rules on MPs' expenses. I note that current parliamentary rules say, 'Claims cannot relate to party political activity of any sort, nor must any claim provide a benefit to a party political organisation'. I note also that the 2006 rules said, 'You must ensure that arrangements for your ACA (second home) claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. You must avoid any arrangement which may give rise to an accusation that you are, or someone close to you is obtaining immediate benefit or subsidy from public funds or that public money is being diverted for the benefit of a political organisation.'

Constituents of South West Surrey brought to my attention that a number of people other than Mr Hunt had been registered on the electoral roll for his property at [his Farnham address]. In particular a woman by the name of [ … ] has been registered as an elector at the address. She was the Conservative Party constituency agent. She did not come off the electoral roll for Mr Hunt's property until October 2008. We have copies of Conservative Party literature for 2007, which name her as the agent. South West Surrey Conservative Party accounts (which can be viewed online) show that they paid her under the name [ … ] over several years. Their accounts for the year to 31st December 2007 say, The Association was contracted to [ … ] for the provision of an Agent and paid fees to it and others of £27,379'. Furthermore, the marked register shows that she voted from Jeremy Hunt's Farnham property on 3rd May 2007. As you may know, the marked register is something anyone can obtain to find out if people have voted but obviously not whom they voted for. Other people have also been registered as electors at the address including a prominent Conservative Party activist, although I understand she says that she left the property after the last General Election. She was however on the electoral roll at the property for a lot longer, at least up to the end of 2006. We are making further checks in respect of this person and may in due course provide evidence to support a second complaint.

In contrast local residents told a reporter that they "never see" Jeremy Hunt at the address. Jeremy Hunt has told the press that his [London] address is his main home. The address is [ … ]. He has owned this property since 30th October 1997. Mr Hunt says on his website that 'a few months' after the General Election in May 2005 he re-designated his "second home" to his home in Farnham and began claiming for a mortgage on that property under the Additional Costs Allowance. He told me that the re-designation was five months after the Election. It is thus clear to me that Mr Hunt claimed taxpayer-funded accommodation costs, which directly benefited the Conservative Party political agent and possibly other political activists. I contend that this is a breach of the rules, namely that:

1. "There are grounds for a suggestion of misuse of public money";

2. That Mr Hunt entered into an arrangement with the Conservative Party agent which gives rise to an accusation that she obtained "immediate benefit or subsidy from public funds";

3. That the arrangement gives rise to an accusation that public money was being "diverted for the benefit of a political organisation".

I raised these matters with Mr Hunt at a public meeting at 'The Maltings' in Farnham, Surrey on the evening of 29th May 2009. A digital film recording of the meeting was taken by […], a person unknown to me at the time, but who is known to Mr Hunt. [This person] appears to be an independent photographer. At some point on 30th May he put an edited version of the film on YouTube and then emailed Mr Hunt and I to inform us of this. A transcript of the relevant part of the edited film of the meeting is attached as Appendix 1.

On 30th May I emailed Mr Hunt to ask him about the contradiction between the statements which he made at the public meeting and the fact that [ … ] was on the electoral roll up to September 2008 (a copy of the email is attached as Appendix 2). The following day (31st May) Mr Hunt updated his `Blog' … His account of events changed in three respects:

1. He now claimed that [ … ] was a 'close friend', something he did not mention at the public meeting when he described her simply as "my agent".

2. He now said that she lived at the address for "3-4 nights per week as she had been doing since long

before the election" (at the public meeting he said that he allowed her to stay for "3 nights per week"

and this might well mean that she would not have been eligible to go on the electoral roll);

3. He now said, "She stayed there until she retired in June 2007 (longer I accept than the 7 months I said at the meeting". This admission means that she lived there at taxpayers' expense for at least 19 months after Mr Hunt had designated his Farnham property as his 'second home'. It also means that she was living there at the time when Mr Hunt first started claiming ACA on the property.

Mr Hunt has said to the press and on his blog (31st May entry) 'I have written to the parliamentary registrar to find out if there is any issue over the arrangements which I made in good faith'. It is not at all clear to me who precisely Mr Hunt has written to. I contacted your office only to find that Mr Hunt had not referred himself to you. A national newspaper political editor could not find any trace of Mr Hunt having written to any Parliamentary authorities. This in itself appears to have been a misleading statement from Mr Hunt, but I will enquire of him directly in this respect to determine if he has referred the matter to any other body. I will update your office if he gives me an answer.

I am happy to provide any further information you require to help you with your investigations into this matter or to attend any meeting for such a purpose. I look forward to hearing from you.

7 June 2009

Appendix 1 to letter of 7 June 2009 from Mr Mike Simpson: transcript of part of edited film of Mr Jeremy Hunt MP's public meeting at The Maltings, Farnham, 29 May 2009

Mike Simpson, addressing Mr Hunt: "Your second home is the home that's been funded by the taxpayer, which you've acknowledged earlier, so I have to ask this question — why did the Conservative Party Agent for South West Surrey live at that address and was on the electoral roll for nearly two years, voted from that address and also another Conservative Party activist (I won't give the names here but we can provide them) living at that address, because the Parliamentary 'Green Book', which is what governs this issue, says this, 'Allowances are reimbursed only for the purpose of a member carrying out his or her Parliamentary duties. Claims cannot relate to party political activity of any sort, nor must any claim provide a benefit to a party political organisation'?" Mike Simpson's words are cut off at this point by the editing, as is the first moment of Mr Hunt's response.

Mr Hunt responds by saying, "Er my Agent [ … ] um worked for me and she also but not actually anything to do with the taxpayer but she was someone who lived in two places at once and she was generally in um Surrey for three nights a week and yes I let her use a room in [my Farnham property]. Um now that er period until er let me just er think about this - [my Farnham property] was my er was designated as my main home when I was elected so for the first 5 months of my election er [ … ] used a room for three nights a week, then I re-designated as my Parliamentary second home and she carried on using a room there for three nights a week and I urn you know I need to find out if that is within the rules. I didn't see a problem with it I have to say at the time but if there is anything there that is improper — she didn't pay me any rent — there was no profit being made — I just let her use the room for three nights a week. If there is anything that is not correct about those arrangements then I will rectify it in whatever way is is appropriate but you know I'm telling you that is what the arrangement is."

29 May 2009

Appendix 2 to letter of 7 June 2009 from Mr Mike Simpson: e-mail to Mr Jeremy Hunt MP from Mr Mike Simpson, 30 May 2009

Further to your public meeting last night I would be grateful if you would explain something to me.

Why was your South West Surrey Conservative Party Constituency Agent […] on the Electoral Roll at your "second home" [in Farnham] for nearly 2 years between 2006 and 2008, given that you said last night she only lived at the address for "about 7 months after the election"? Since the election was in May 2005 I would appreciate an explanation.

30 May 2009

3.  Letter to Mr Jeremy Hunt MP from the Commissioner, 11 June 2009

I would welcome your help on a complaint I have received from Mr Mike Simpson about your claims under the Additional Costs Allowance.

I attach a copy of Mr Simpson's letter of 7 June and enclosures.

In essence, the complaint is that you claimed expenses for a residence in your constituency which were not wholly, exclusively and necessarily incurred when staying away from your main home for the purpose of performing your parliamentary duties; and that these may have provided a benefit from public funds to a political organisation, contrary to the rules of the House.

I understand that you raised this matter with the Registrar of Members' Financial Interests at the beginning of this month. I attach a copy of the email exchange you had with her.[57]

The Code of Conduct for Members of Parliament provides in paragraph 14 as follows:

"Members shall at all times ensure that their use of expenses, allowances, facilities and services provided from the public purse is strictly in accordance with the rules laid down on these matters, and that they observe any limits placed by the House on the use of such expenses, allowances, facilities and services."

The relevant rules for the Additional Costs Allowance are set out in the Green Book published in April 2005. The Speaker's Introduction to the Green Book says:

"Members themselves are responsible for ensuring that their use of allowances is above reproach. They should seek advice in cases of doubt and read the Green Book with care."

Section 3.1.1 sets out 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."

Section 3.12.1 says:

"The following expenditure is not allowable:

  • Living costs for anyone other than yourself".

Sections 3.1.1 and 3.12.1 were included in similar terms in the July 2006 edition of the Green Book, which also includes the following section on Principles:

"3.3.1 You must ensure that arrangements for your ACA claims are above reproach and that there can be no grounds for a suggestion of misuse of public money. Members should bear in mind the need to obtain value for money from accommodation, goods or services funded from the allowances.

"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."

I would welcome your comments on this complaint, taking into account the relevant rules in respect of the Additional Costs Allowance. In particular, it would be helpful to know:

1. how long you have owned your constituency property and the circumstances which led you to designate it as your second home, together with any evidence you may have to substantiate this;

2. following the designation of this property, who has been living at the property, for what period or periods, and on what terms;

3. the nature of the accommodation and what accommodation and other facilities at the property were available for use by residents other than yourself;

4. the value and nature of the claims you have made for this residence under the Additional Costs Allowance for each financial year since you designated it as your second home;

5. your best estimate of the number of nights you have spent at this property in each of the last five years, together with any evidence you have to substantiate this;

6. whether, to the best of your knowledge, the terms on which your constituency agent was employed took any account of the availability of accommodation at your constituency residence, and any evidence you have to substantiate this;

7. whether your constituency home was used for party political activity at any time;

8. whether, and if so, why you consider the claims you made were within the scope of the Additional Costs Allowance taking account of the requirement that public money should not be diverted for the benefit of a political organisation;

9. what advice, if any, you have taken from the House authorities about these arrangements.

Any other points you would wish to make to help me with this inquiry would be very welcome.

I attach a note which sets out the procedure I follow. I am writing to the complainant to let him know that I have accepted this complaint and am writing to you about it. It would be very helpful if you could let me have a response within the next three weeks. If there is any difficulty about this, or you would like to have a word about the complaint, please contact me at the House.

I would be very grateful for your help on this matter.

11 June 2009

4.  Letter to the Commissioner from Mr Jeremy Hunt MP, 24 June 2009

Thank you for your letter of 11 June regarding the complaint you have received from Mr. Mike Simpson. I am pleased to have the opportunity to set the record straight regarding the issues raised by Mr. Simpson.

Mr. Simpson is the Prospective Parliamentary Candidate for the Liberal Democrats in my constituency of South West Surrey. He has understandably sought to publicise his complaint against me as much as possible. However in this letter I hope to demonstrate that far from being uncooperative I have sought to establish whether I have made a mistake as quickly and transparently as possible. I am therefore extremely grateful to you for looking into this issue.

From the outset I want to make clear that I may have made a mistake over the arrangements under which […] lived in my parliamentary second home. With the benefit of hindsight it is clear to me that it was an arrangement that has allowed accusations to be made about my use of parliamentary funds, something I would never wish to do regardless of the actual probity of the way funds were used.

If you determine that I have made a mistake, I will of course seek to rectify it in whatever way you believe to be appropriate.

Transparency

The issue was first brought to my attention by Mr Mike Simpson at a public meeting on 29 May. You will see my response in the transcript provided by Mr. Simpson.

When I held the public meeting on 29 May I was one of only around 20 MPs to have held such meetings. I was one of the first 11 to publish my expenses fully online.

The next working day, 1st June, on the advice of the Conservative Chief Whip, I sent an email to […] the Registrar, to try to establish whether I had done anything wrong. When she replied that neither she nor you could address the issue at that stage, I wrote to House Authorities as she suggested. I enclose the letter I wrote, which was written the following day.[58]

It is however true that when the issue was raised unexpectedly at the public meeting on 29th May I inadvertently made a mistake about the dates […] stayed with me. At the public meeting I stated she was with me for 7 months, when in fact it was 19 months. I knew she had retired after the Waverley Borough Council elections, but thought that they were in 2006 when in fact they were in 2007. I corrected the mistake on my blog as soon as I became aware of it.

Despite Mr. Simpson's suggestions, I therefore do believe I could not have been much more transparent over the whole issue of expenses.

Chronology

It may help if I outline broadly a chronology of what happened. I will then address in detail the questions you have asked me.

1. I purchased a small house in Farnham for £185,000 in November 2003, a year after I was selected as Prospective Parliamentary Candidate and 18 months before I was elected. It is a 2-up, 2-down small terraced house which you would be most welcome to inspect.

2. […] became my agent at around the same time, starting initially on a temporary basis. [My agent] was 64 years old at the time, and had actually retired as an agent, living either in […] with her husband or in […] where she has a cottage in […]. She rapidly became a close friend as well as someone with whom I worked professionally.

3. Because it was felt the commute from […] would be too tiring on a daily basis, a number of people offered her accommodation for the few nights a week she needed to be in South West Surrey. I was one of them and she chose to stay with me. She therefore had the use of a very small room free of charge during the week. This arrangement continued until she retired in May 2007.

4. After I was elected in May 2005 I initially designated my home in Farnham as my main home, having been based there in the months running up to the General Election. Following the summer recess it became clear to me that because of my parliamentary duties I was spending more nights every week in London, so from November 2005 I redesignated my Farnham home as my second home. This meant that the mortgage interest I claimed was reduced from around £1,400 per month to around £600 per month.

5. […] therefore had the use of the room free of charge for 19 months whilst the home was designated my parliamentary second home. There was no financial benefit to me or the Conservative Party.

Answers to questions raised in your letter

I will now seek to address the questions you ask in your letter:

1."In essence the complaint is that you claimed expenses for a residence in your constituency which were not wholly, exclusively and necessarily incurred when staying away from your main home for the purpose of performing your parliamentary duties."

I find it difficult to know how that could be the case. All the expenses claimed were for my — and only my - use of the cottage in Farnham. Many MPs allow family and friends to stay in their second homes, and there is no suggestion in the Green Book that you are not allowed to do this.

2. "The ACA ...excludes expenses that have been incurred for purely personal or political purposes"

The cottage was not used for political campaigning apart from the occasional meeting (by "occasional" I would estimate no more than once or twice a year). Indeed it is much too small to be used for campaigning - there is not even room for a proper table downstairs.

I accept that the arrangement probably strengthened the excellent working arrangement that I had with […]. However by the time my Farnham home became my parliamentary second home, it was in essence a social arrangement with someone with whom a deep friendship had been forged in the previous two years and for whom I wished to reduce the stress of commuting mid-week.

For the expenses to be used for political purposes, it seems to me Mr Simpson would need to demonstrate:

a) financial advantage to the Conservative Party or my campaign

b) taxpayers money being diverted to fund a political party

Neither happened. Had […] not stayed with me she would have stayed with other friends locally. The Conservative Party did not benefit financially from the arrangement and would have been unaffected had the arrangement not taken place.

The arrangement was one that had been in place for two years prior to the Farnham home becoming my parliamentary second home. The decision that led to it becoming my second parliamentary home reduced the cost to the taxpayer by nearly £10,000 per annum. I do not therefore believe it can be said in any way that this was an arrangement set up to divert funds from the taxpayer to the Conservative Party.

A further consideration might be the equity that I own in the house. At the time it became a parliamentary second home, I owned around 30% of the equity in the house.

As […] used half the house for half the week, it could be said that I was giving her a quarter of the use of the property — less than the equity share I own.

3. Section 3.12.1 "The following expenditure is not allowable: Living costs for anyone other than yourself"

[…] did indeed use electricity and gas during her period staying in Farnham. As it happens the standing order that pays those bills did not go down when she left, so in practice there was no additional cost to the taxpayer. However this is probably more of a billing fluke than anything else, and I accept that in practice the ACA did cover some of […] living costs in Farnham.

In doing so I followed parliamentary norms that dictate that it has always been acceptable for friends and family to stay at parliamentary second homes and for the ACA to cover their costs, even if they are not involved in work relating to an MP's parliamentary duties.

It would be a significant change to the interpretation of the rules if MPs were only allowed to charge for their own personal element of the costs of second homes and not for other people who are staying there. I therefore believed I was following normal practice in undertaking the arrangement in the way I did.

4. Sections 3.3.1 and 3.3.2 "You must ensure that arrangements for your ACA claims are above reproach and there can be no grounds for a suggestion of a misuse of public money ...you must avoid any arrangement which may give rise the an accusation that ...public money is being diverted for the benefit of a political organisation"

This is the area in which I am most uncertain. I do not believe public money was "diverted for the benefit of a political organisation." But with the benefit of hindsight I do accept that the arrangements did allow political opponents to make accusations along those lines. However it should be noted that during the period in question from November 2005 to June 2007 no such accusations were made even though [my agent]'s use of the property was well-known.

Further answers to the questions on page 2 of your letter

1. I purchased the constituency property in November 2003. In the run up to the General Election of 2005 I was in South West Surrey more or less full time. Following my election I initially designated my home there as my main home. After 6 months I realised that parliamentary duties meant I was spending more time in London, so from November 2005 redesignated my constituency home as my second home. As indicated previously, this led to a substantial drop in the mortgage interest I was able to claim.

I was not aware of any formal mechanism to demonstrate a change of designation, although on reading the Green Book carefully I accept that I should have written to the parliamentary authorities to notify them that I had done this.

2. During the period my Farnham home was designated as my second home I lived there around 2 nights a week (essentially coming down to the constituency for constituency work on Fridays and for part of the weekend). […] stayed there for around 3 nights a week from November 2005 until June 2007. No one else stayed there on a regular basis.

3. The house is extremely small. Downstairs there is a living room with a sofa and two chairs and a small kitchen and bathroom. Upstairs are two small bedrooms. […] and I shared the use of the kitchen, bathroom and living room.

4. I have claimed the following on the ACA for [my Farnham property] in the period that […] lived there:

1st November 2005 to 31st March 2006:  £4,911.27

April 2006 to March 2007:      £12,172.94

April 2007 to May 2007:      £2,032.93

5. I have not kept a log of where I have spent every night in the period that it was my second home. However I have checked my electronic diaries and enclose print outs from the relevant period. I have highlighted the nights I believe I stayed in Farnham. As these print outs contain personal information I would be grateful if they could be kept confidential.

6. […]'s employment did not include a guarantee or even an offer of accommodation at my constituency home. I enclose a copy of her contract.

7. My constituency home is too small to be used for political activity. However I have occasionally met constituents there and had the odd meeting with local volunteers on my campaign — the latter probably no more than once or twice a year. During the general election campaign I also had a few campaigning meetings there, although its size generally made that impractical.

8. I believe that the money I claimed from the ACA for my parliamentary second home was wholly, exclusively and necessarily incurred when staying away from home for the performance of my parliamentary duties. Had the arrangement with […] not taken place, there would have been no less cost to the taxpayer. Nor did the Conservative party or my campaign receive any additional benefit as a result of her staying there as she could easily have stayed elsewhere.

9. I have not taken advice from the House Authorities until the issue was brought to my attention at the public meeting on 29 May.

Finally you asked me to explain the circumstances concerning […], the other person on the electoral roll for my Farnham address. […] was my press officer until December 2005. She spent time in the cottage in Farnham until the General Election of 2005. Following that election she did not stay there on a regular basis — having spoken to her I believe it was on no more than a couple of occasions. She was removed from the Electoral Roll in the year after she left my employment.

In conclusion I do not believe there has been any material way in which taxpayers funds have benefited either the Conservative Party or my campaign in South West Surrey. It would not have affected Conservative Party activity if […] had not stayed in my Farnham home, nor do I believe the cost to the taxpayer has been any more than the normal costs allowed to MPs when friends and families stay at their parliamentary second homes.

… I am happy to answer any other questions or assist your enquiry in any way.

24 June 2009

5.  E-mail to the Director-General of Resources from Mr Jeremy Hunt MP, 3 June 2009

As a result of the scrutiny of MP's expenses, something concerning the arrangements over my second home in Farnham has come to light which I would be grateful if you, as Director General of the Department of Resources, could advise me on.

In the run up to the General Election of 2005 I was based in Surrey full time, and therefore declared my Farnham home as my main residence. Since the Spring of 2004, I had allowed my agent to stay there three to four nights a week free of charge.

After I had been an MP for a few months, I realised I was spending more nights every week in London. From November 2005 I therefore redesignated my Farnham home as my second home, and claimed for mortgage interest on it accordingly. However my agent continued to use a room there until she retired in June 2007.

I bought the house in 2003, before I was elected to parliament. It cost £185,000, and around £35,000 of this was my own equity at the time I designated it my second home.

It has been suggested to me that as my agent used half of the house for half of the week, she was benefiting from one quarter of the value of the house, which is less than equity share that I personally owned. On the basis of that, there would be no question of taxpayers' funds being used for party political advantage.

However I would be very grateful for your independent view as to whether I have inadvertently broken the rules in any way. I understand that taxpayers' money should not be used for party political advantage, and in this case I must admit it did not occur to me that they were because the arrangement neither benefited me personally nor caused any additional cost to the taxpayer.

I would be grateful if you could let me know if I have made any mistakes and if so what I should do to rectify the situation.

3 June 2009

6.  Letter to Mr Jeremy Hunt MP from the Commissioner, 30 June 2009

Thank you for your letter of 24 June in response to mine of 11 June. I am most grateful for the information you have provided.

I shall now be seeking the advice of the Department of Resources.

On the printout of your electronic diaries you indicated, for each week, the number of nights you believe you spent in your Farnham home. Unfortunately in many cases it is not clear to me which night of the relevant week you have in mind, nor which engagement you are relying on as corroboration; nor is it clear whether the engagement is of a parliamentary character rather than personal or party political. I would be grateful if you could look at the questions I have prepared, a copy of which I enclose [not reproduced here], and where further information is requested I would be grateful if you could provide it.

It would be very helpful if you could let me have a response to this within the next three weeks. If there is any difficulty about this, or you would like to have a word about the complaint, please contact me at the House.

I would be very grateful for your help on this matter.

30 June 2009

7.  Letter to the Commissioner from Mr Jeremy Hunt MP, 1 July 2009

Thank you for your letter, dated 30 June 2009. Please find enclosed the requested information relating to my diary.

Do let me know if you have any further questions.

1 July 2009

8.  Letter to Mr Jeremy Hunt MP from the Commissioner, 6 July 2009

Thank you for your letter of 1 July in response to mine of 30 June about this complaint. I am most grateful for the further information you have provided about your diary.

I attach a schedule showing the summary of nights in your constituency based on your original estimate and the slight revisions based on the further information you have helpfully provided. As you will see, there is very little difference between the two. I have identified 60 nights over 2006-07, since, unless you disagree, I think the evidence for three of the nights is not sufficient to justify their inclusion. I have also taken three nights out of 2007-08, if you agree, since these related to local elections. Please let me know if you disagree with any of this.

As you know, I have already written to the Department of Resources for their advice, based on your original estimate. I am copying the new schedule to them so that they are aware of the position, although it has not changed in any material respect. I will let you know when I have their response.

Thank you again for your help.
YearPreliminary estimate Latest estimate
2005-06 (from 1 November 2005) 31 34
2006-07 61 60
2007-08 (until May 2007) 10 9
TOTALS 102 103

6 July 2009

9.  Letter to the Director of Operations, Department of Resources, from the Commissioner, 30 June 2009

I would welcome your advice and comments on a complaint I have received against Mr Jeremy Hunt MP in respect of the claims he made for his constituency home in Farnham, Surrey.

I attach the complainant's letter of 7 June and enclosures; an exchange of emails between Mr Hunt and the Registrar of Members' Financial Interests; my letter of 11 June to Mr Hunt; and his response of 24 June and enclosures. I also enclose a note of the number of nights Mr Hunt, relying on his private diaries, has identified that he spent in his constituency home. I am checking with Mr Hunt some of the details about the over night stays, but I suggest you work on the attached schedule: if it were to change substantially, I would let you know.

In essence, the complaint is that Mr Hunt claimed expenses for a residence in his constituency which were not wholly, exclusively and necessarily incurred when staying away from his main home for the purpose of performing his parliamentary duties; and that these may have provided a benefit from public funds to a political organisation, contrary to the rules of the House.

I would welcome your comments and advice on this matter. In particular, it would be helpful to know:

1. when Mr Hunt notified the Department of the change in the designation of his main home to London, a change which he has told me he made in November 2005;

2. whether in the circumstances described by Mr Hunt it was within the rules of the House for the property against which he made ACA claims to be regularly used by another person, in this case his constituency agent who is also a close friend;

3. whether in these circumstances, it was within the rules of the House for the Member to make in his claims no allowance for the benefit in terms of accommodation and outgoings received by that other person, taking into account among other provisions Section 3.1.1 and 3.3.2 of the Green Book for April 2005 and taking account of the extent to which he and his agent respectively made use of the house.

Any other points you may wish to make to help me with this inquiry would, of course, be most welcome.

I would be most grateful if it were possible to let me have a response to this within the next three weeks.

Thank you for your help.

30 June 2009

10.  Letter to the Director of Operations, Department of Resources, from the Commissioner, 6 July 2009

I wrote to you on 30 June about this complaint in respect of Mr Hunt's claims for his constituency home in Surrey.

This is just to let you know the outcome of the more detailed checks against Mr Hunt's diary, which I referred to in that letter.

I attach a revised schedule. As you will see, the figures have not significantly changed.

I look forward to receiving your advice and comments in response to my earlier letter.

6 July 2009
Summary of Mr Jeremy Hunt MP's nights in constituency (19 months in total)  
Year
Preliminary estimate
Latest estimate
2005-06 (from 1 November 2005)
31
34
2006-07
61
60
2007-08 (until May 2007)
10
9
TOTALS
102
103

6 July 2009

11.  Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 20 July 2009

Thank you for your letters of 30th June and 6th July to [the Director of Operations]. I am replying on behalf of the Department of Resources.

I deal in turn with the questions you ask.

Mr Hunt claimed ACA against his London home from 5 May 2005 to 31 October 2005 and against his Farnham home from 1 November 2005. His amended designation form (ACA1) was signed and dated 6 January 2006.

You ask whether it was within the rules of the House for the property for which Mr Hunt made his ACA claims to be regularly used by another person, and in the particular case of Mr Hunt by his constituency agent who is also a close friend […].

Members were "strongly advised" against subletting or renting out any part of a property on which ACA was claimed (this rule applied also to paying guests). 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. I note that […] had the use of a room free of charge. In these circumstances, I do not believe that her occupancy of the house was outwith the rules.

As to […]'s position as Mr Hunt's agent, as you note, Members were required to ensure that there could be no suggestion that public money was being diverted for a political purpose. However, from the evidence you have received, there appears to be no evidence that […]'s occupation of the house was either part of her emolument or was for the purpose of political activity.

Finally, you ask whether it was within the rules of the House for Mr Hunt to make no account in his claims for the benefit in terms of accommodation and outgoings received by […], taking account of the provisions of the Green Book and of the respective use which Mr Hunt and […] made of the house.

The Green Book made it clear that Members could not claim under the ACA for the living costs of anyone other than themselves. The implication in Mr Hunt's letter to you of 24th June is that he did not abate the costs which he charged to the House in respect of […]'s occupation of the property. In my view, it would have been appropriate for him to do so in respect of such charges as fuel consumed. The question of fixed costs is a different one. In the case of mortgage interest, Mr Hunt's mortgage interest costs were unaffected by […]'s

occupation of the house. This principle applies to other fixed costs (though possibly not to council tax if Mr Hunt had been eligible for single occupancy discount).

Please let me know if we can provide any further assistance.

20 July 2009

12.  Letter to Mr Jeremy Hunt MP from the Commissioner, 22 July 2009

I have now heard back from the Department of Resources with their advice on this complaint about the claims for your constituency home in Surrey.

I attach a copy of my letters to the Department of 30 June and 6 July, and a copy of their letter to me of 20 July.

As you will see, the Department considers that the occupancy by your constituency agent and friend was not outside the rules of the House. They have found no evidence that your agent's occupancy of the house was part of her emolument or was for the purpose of political activity. But they consider that it would have been appropriate for you to have reduced certain costs, other than fixed costs, which you claimed, reflecting her occupation of the property.

I will now need to come to my own view on these matters. I would, however, first welcome any comments you may wish to make on the Department's advice and on any other matters relating to this complaint.

I am minded to submit a memorandum to the Committee on Standards and Privileges about this complaint, although you should draw no inferences from that.

I think it may be helpful for us to have a formal meeting to discuss matters arising from this complaint. When I receive your response, I will be in touch to arrange a date for our interview which is convenient to you and to let you know more about the process, including the main areas which I suggest we might cover.

I appreciate we are now in the recess and that you have other commitments over the next few weeks, but if you could let me have a response to this letter within the next three weeks, I would be most grateful. If there is any difficulty about this, do let me know.

Thank you again for your help.

22 July 2009

13.  E-mail to the Commissioner from Mr Jeremy Hunt MP, 25 July 2009

Thank you for your letter regarding the advice you have received from the Department for Resources on the complaint by Mr Mike Simpson. May I apologise for replying by email but I am currently abroad and wanted to get back to you as soon as I could.

I am broadly happy with what they say. I do perhaps have a small question over the suggestion that I should have reduced the bills. This is not really over the principle. It is more that the rules do not mention this as something that should be considered and the norm is clearly for MPs to have friends and family to stay in their second homes without refunding any of the additional costs incurred. It would therefore be useful to have clarification as to when this should or should not be a consideration.

I would of course be very happy to meet again to discuss this and the complaint in general. I am next back in Westminster on Wednesday 26th and Thursday 27th August and available anytime in the afternoons of those days if it is convenient for you.

25 July 2009

14.  Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 20 August 2009

We have looked further at the papers we hold in relationship to the Mr Hunt, and I am writing in consequence further to my letter to you of 20 July.

On 11 May 2005, Mr Hunt nominated his London address as his second home. This was repeated on a nomination form of August 2005. On 6 January 2006, Mr Hunt signed two nomination forms: one gave the address of his main home as his London address and the address of his second home as his Farnham address. The other form gave the address of the main home as the Farnham address and the address of his second home as his London address. It appears that the second of these nominations was regarded by the Department as made in error.

As far as his claims were concerned, Mr Hunt made claims on 6 January 2006 for mortgage interest against his London home until 31 October 2006 (this was the date on the form, but can be assumed to be an error for 31 October 2005). On the same date, he made claims for mortgage interest (and other costs) against his Farnham home from 1 November 2005 to 6 January 2006. However, Mr Hunt also submitted on 8 November 2005 a claim against his Farnham address for utilities, council tax, telephones and food (but no mortgage) for the period May to October 2005. If this was a claim for this period, it should have been in respect of his nominated second home - his London address. There is no evidence that this issue was picked up at the time.

There appear to be some matters here which should be taken up with Mr Hunt. I should be grateful for your view on whether you would want to do this yourself, or whether we should refer the matter to Sir Thomas Legg for his review.

20 August 2009

15.  Letter to the Director of Strategic Projects from the Commissioner, 1 September 2009

Thank you for your letter of 20 August identifying an additional matter in relation to the ACA claims which Mr Jeremy Hunt MP made in 2005.

I have decided that I do need to deal with this matter in the context of my inquiry into the complaint against Mr Hunt since it deals with a period during which his Farnham home was being used by his friend and constituency agent, and because it raises some potential uncertainties about the timing and intentions of Mr Hunt in changing the designation of his second home from London to Farnham.

I have, therefore, written to Mr Hunt to show him a copy of your letter, together with the published version of his ACA claim form for the period from 5 May 2005 to 31 October 2005. Once I have his response, I may need to be back in touch.

1 September 2009

16.  Letter to Mr Jeremy Hunt MP from the Commissioner, 1 September 2009

I have received a further letter from the Department of Resources which raises questions about the ACA claims you made in 2005 and on which I would be grateful for your help.

I attach a copy of the Department's letter to me of 20 August. As you will see, there would appear to be some uncertainty about the forms you submitted in January 2006 in relation to your decision to change the nomination of your second home to your Farnham property from the end of October 2005. It would seem also that you made claims for your Farnham property for utilities, council tax, telephones and food (but not mortgage) for the period May to October 2005 when that property was still your main home and your London property was your second home for ACA purposes. I attach a copy of the published version of your claim form, which shows that that claim amounted to £1995.64.

I think I do need to resolve this matter as an adjunct to the complaint against you, since it affects the factual description of the claims you have made for your Farnham property during a period when it was also being used by your friend and constituency agent. I would be grateful, therefore, to have your comments on this ACA claim, including how it came about and whether you consider it to have been a mistake. It would also be helpful to have some clarification on why you submitted two forms in January 2006, one identifying London as your main home and the other, Farnham.

It would helpful if you could let me have a response to this letter by 22 September. In view of this additional matter, I think we should defer our interview until I have your response and any further advice I may need from the Department.

1 September 2009

17.  Letter to the Commissioner from Mr Jeremy Hunt MP, 10 September 2009

Thank you for your letter of 1 September. I am happy to explain what happened.

As I explained to you in my original letter dated 24 June, I changed the designation of my second home from 1 November.

I did not submit any expense claims until that point, and - something that was not, with hindsight, wise - I asked my staff to prepare all my expenses claims for me without scrutinising them closely.

One of the mistakes made, as identified correctly by the Fees Office, is that the date for mortgage interest claimed said 2006 when it should have said 2005.

The other mistake was for the period from May to October, I claimed for utility expenses at my Farnham home instead of my London home, which was during that period my designated second home. I think the reason this happened was when my staff member prepared the claim I had already changed the designation of the second home from London to Farnham and so he was confused. It is a mistake that I should have picked up but did not before the claim was signed off.

Because the Farnham house is considerably smaller than the London house the utilities bills would have been lower in Farnham so this mistake actually benefited the taxpayer rather than myself. Nonetheless, I have decided to repay the amount in full and a cheque has been sent to the Fees Office.

I have always taken the view that it is important to be as transparent as possible about any mistakes in my expenses. For that reason, I published [a] webpage [not reproduced here] in the last week of June, following contact from a constituent alerting me to the issue on 27th June. At that stage, I thought it may have been a clerical mistake with the wrong address being listed. However, I do now believe a claim was made for the wrong home, and have updated my website accordingly [not reproduced here] ...

I hope this clarifies what happened. I have also written to the Fees Office explaining what I have explained to you in this letter.

I am happy to arrange our further meeting at your convenience.

10 September 2009

18.  Letter to Mr Jeremy Hunt MP from the Commissioner, 22 September 2009

Thank you for your letter of 10 September responding to mine of 1 September about the ACA claims you made in 2005 in respect of your Farnham home, the use of which is the subject of a complaint I am considering.

I am afraid your letter seems to have got lost in the post, but I am grateful to your office for having sent me a copy which I received on 22 September.

I was most grateful for this explanation. There was a further point, however, in my letter of 1 September which I hoped you could respond to before we meet. You will see from that letter that I said it would be helpful to have some clarification of why you submitted two forms in January 2006, one identifying London as your main home and the other Farnham. It would be very helpful if you could let me have a response to this within the next week. Meanwhile, I will ask my office to arrange a convenient date for our interview and I will write to you in advance of that to let you know about the process and the main areas I suggest we might cover.

I look forward to hearing from you.

22 September 2009

19.  Letter to the Commissioner from Mr Jeremy Hunt MP, 24 September 2009

Thank you very much for your letter of 22 September. I am so sorry my earlier letter got lost in the post but am pleased you received the second copy.

Regarding the query you raised, I think the two claims you are referring to are those I enclose with this letter [not reproduced here]. In which case the explanation is that although they were submitted on the same date in January one refers to the period for which London was my designated second (from May to October) and the other refers to the period for which Farnham was my second home (from November to January).

If these are not the claims you are referring to please let me know and I would be happy to supply any further information you require.

24 September 2009

20.  Letter to the Director of Strategic Projects, from the Commissioner, 30 September 2009

I have now heard back from Mr Hunt following your letter to me of 20 August about Mr Hunt's claims against his Farnham home in 2005 and about the two nomination forms that he submitted on 6 January 2006.

I attach a copy of my letter to Mr Hunt of 1 September; Mr Hunt's response of 10 September; my letter to him of 22 September; and his response of 24 September.

As you will see, Mr Hunt has accepted that he mistakenly claimed for utilities for his Farnham home from May to October 2005 and has written to the Director General of Resources about it. Mr Hunt does not believe, however, that he has made an error in the nomination of his homes on the two claim forms submitted on 6 January 2006 since he believed that one claim related to the period when Farnham was his main home and the other London. If however these are not the forms to which you referred in your letter of 20 August, it would be very helpful if you would let me have copies of the correct ones as soon as possible.

I have informed Mr Hunt that I am sending you copies of the correspondence in case there are any matters on

which you wish immediately to comment. If so, could you let me have your comments within the next week? After then, I will be arranging to see Mr Hunt before what I hope will be the conclusion of this inquiry.

30 September 2009

21.  Letter to the Commissioner from the Director of Strategic Projects, Department of Resources, 1 October 2009

Thank you for letter of 30 September.

I enclose copies of the two forms signed by Mr Hunt on 6 January 2006 [not reproduced here]. These are the forms to which my earlier letter refers.

I can understand how Mr Hunt may have thought that he needed to submit these notifications to complement the claims which he submitted on the same day in respect of the two addresses.

1 October 2009

22.  Letter to Mr Jeremy Hunt MP from the Commissioner, 1 October 2009

When I wrote to you on 30 September, I noted that I was sending our exchanges of correspondence to the Department of Resources in case they wished to comment, including on the two claim forms which you submitted on 6 January. I have now heard back from them and this letter is to let you see what they have told me about your nomination forms signed on 6 January 2006 and to invite your comments.

I attach a copy of my letter of 30 September to the Department of Resources, and a copy of their response of 1 October to which they attach copies of the two notification forms (ACA1) which you signed and submitted on 6 January 2006. As you will see, these are different from the ACA2 forms which you attached to your letter to me of 24 September.

As you will also see, the Department of Resources suggest how you might have come to submit these two forms identifying differently your main and second homes. It would be very helpful, however, if you could let me know how you think this came about. We are due to meet on 20 October, so it would be very helpful if you could let me have a response to this before we meet, say by 16 October if at all possible.

Thank you for your help.

1 October 2009

23.  E-mail to the Commissioner from Mr Jeremy Hunt MP, 2 October 2009

Thank you for your letter dated 1st October 2009. I am away from my office for the next week because of the Conservative party conference and so am not able to sign letters. I hope it is all right to send an email instead.

The two notification forms referred to by the Department of Resources are, I think, easily explained. On 6th January 2006, as explained in my letter of 24 September 2009, I submitted two claims relating to two different properties from two different periods. On this same date I therefore submitted two notification forms, citing differing addresses for my second home. This was to highlight the fact that the claims submitted on 6 January 2006 referred to different properties since between these periods I had changed the designation of my main home from [my Farnham property] to [my London property].

I hope that this clarifies the situation but if it does not please do not hesitate to get in touch. I look forward to meeting you on 20th October.

2 October 2009

24.  Agreed Note of Interview with Mr Jeremy Hunt MP, 12 November 2009
Present:

John Lyon (JL)

Jeremy Hunt MP (JH)

Note taker

Introduction

JLThank you for coming in.
This is [the note taker]. She will take a note of our discussion and show it to you so that you can be satisfied as to its accuracy. It will not be a verbatim record, but it will be reasonably full.

The note will be included in the memorandum I will submit to the Committee on Standards and Privileges on this complaint and you can expect it to be published with the Committee's Report.

I sent to you on 5 November a letter setting out the procedure and giving you the main areas I suggested we cover. Other matters may arise during the course of the interview.

May I first confirm that you have seen the Committee's report into the complaint against Mr McNulty? [59]

JHYes, I have.
JLThank you. I shall come to the issues raised there during the course of our interview. Are you content for me to go ahead?
JHYes.
Background
JLLet me first clarify the facts. You bought your Farnham property in November 2003 for £185,000.
JHCorrect.
JLYou initially financed the purchase by increasing the mortgage on your London home. My understanding is that you then in November 2005 transferred £150,000 of your mortgage to your Farnham home.
JHCorrect.
JLFrom November 2003, before you were elected, your constituency agent spent around three nights a week in the property.
JHCorrect.
JLI have taken the start date of November 2003 and the three nights a week from your letter to me of 24 June. Your email to the Director-General of Resources suggests a start date of spring 2004 and three to four nights a week. Am I right in preferring your letter of 24 June as definitive?
JHMy agent started working on a two month temporary employment contract in November/December 2003. She was employed for only two months because she hadn't wanted to come out of retirement. But we really liked her so we persuaded her to start again in the spring.

My agent had stopped living at the house when she ceased working for us, then she started again.

On the number of nights, I think around three nights a week is the right way to put it.

JLYour agent continued to stay in the property for around three nights a week after your election in May 2005, and after it became your second home in November 2005, until May 2007, when she retired.
JHCorrect.
JLYour email to the Director-General of Resources suggested she retired in June 2007. I am preferring your letter of 24 June saying that her retirement was in May 2007. Is this right?
JHLet's call it June. She stayed until the Waverley elections in May 2007 but then she came back for our final AGM and a farewell in June. Her formal retirement was in June.
JLYou yourself spent on average between one and two nights a week in the property over this period. I have preferred the evidence in the table which I sent you on 6 July to your initial evidence in your letter of 24 June of around 2 nights a week. Am I right to do so?
JHYes. I apologise for any mistakes.
JLYou designated your Farnham property as your second home with effect from 1 November 2005, after which you made ACA claims on the property.
JHYes.
JLYou mistakenly claimed for food, utilities, council tax and telephone charges on your Farnham property for the period May to October 2005 when it was in fact your main home.
JHYes.
JLYou repaid the full cost of this claim (£1995.64) in September this year.
JHYes.
JLYou made no charge to your agent to stay in your home. It was rent free. And no charge was made for her share of utilities, council tax or phone.
JHYes.
JLYour claims from the allowance made no abatement for your agent's use of the property - neither mortgage interest, nor council tax, nor utilities nor phone.
JHYes.
JLYou claimed full council tax for this property.
JHYes.
JLAre you content with this summary of the facts?
JHYes.
Sharing Arrangements
JLCould I clarify with you the arrangements you had for your agent living in your constituency home? Your evidence is that you spent between 1 and 2 nights a week in Farnham. Your agent spent around three nights a week there. In other words, your agent was there about twice as much as you. Do you accept that?
JHYes, that is correct.
JLDid your agent leave her personal possessions there—for example, clothes, books and such like?
JHIf she did it would be very few. She used to pack up her suitcase when she left each week. She might have left some small items, perhaps in the little cupboard in her room - I didn't look in there - but nothing in the rest of the house.
JLDid she provide additional furniture and decorate her room?
JHNot at all. Nothing like that.
JLDid she entertain her own friends and/or have them to stay?
JHNot ever to my knowledge.
JLHow did you sort out catering and food buying?
JHI was there at the end of the week and she was there in the middle of the week, so we didn't often coincide.

If we did, she might buy a supermarket ready meal which we shared. I don't think she ate any of the food I bought - I ate more of her food than she did of mine.

The Rules
A. 'necessarily incurred'
JLCan I now apply the various Green Book rules to your situation? First: the rule in paragraph 3.1.1. of the 2005 Green book that your expenditure must be "wholly, exclusively and necessarily incurred … for the purpose of performing your Parliamentary duties." Can you explain to me how you believe your expenditure was necessarily incurred in support of your Parliamentary duties?
JHThis is a very active constituency. I calculate the number of hours I work as more than 65 a week. Had I spent ten or twelve hours a week commuting, I would have spent less time on constituency work. I point out that my predecessor had a second home.

This constituency wants a very active local MP, someone who they hope is going to be a government Minister. They want both. I want to deliver this and it would be a lot harder if I had to commute.

My constituency is 50-55 minutes away by train - longer than that from door to door - so we are right on the cusp of the boundary line where, under the Kelly proposals,[60] Members will not be entitled to reimbursement for overnight stays. It is one of those constituencies where IPSA will have to make a determination. But having the second home meant that I did more work for my constituents.

I believe I made a right judgement when I set up a home in the constituency, but I am not the best person to say whether it is value for money for the taxpayer, as that would involve setting a cost on my own services. I am not the best person to do that.

JLDid you feel that the house gave you good value?
JHYes, it was an absolute godsend. I have a dispersed constituency and although we have an office I don't have a computer and desk there. So if I was in the constituency I would often spend about an hour and a half in my home there in the middle of the day seeing to my emails.

It is a modest house; you don't get a large house in Farnham for £185,000. It was a modest house that helped me to do a lot more for my constituents.

B. Living Costs of another person
JLAs you will know from the report into Mr McNulty,[61] I consider that whether the costs were wholly and exclusively incurred are, in these sorts of cases, determined by the more detailed rules covering the living costs of other people and possible personal or political benefit. Paragraph 3.1.1. of the 2005 Green Book says you may not claim for expenses that have been incurred 'for purely personal or political purposes'. Paragraph 3.12.1. of that Green Book says that it is not allowable to claim for 'the living costs for anyone other than yourself'.

So let me turn to those rules. First, the living costs of your agent. Do you accept that your expense claims included your agent's share of these living costs - utility, phone and council tax?

JHYes I do.

My agent used electricity and hot water while she was there, even though there was no increase in the electricity bills. I think I made a wrong judgement in not reducing claims for the utility bills and the mortgage. I don't seek to justify myself but I would like to explain why I did it.

When you look at the requirement for expenses to be 'wholly, exclusively and necessarily incurred', if taken literally that would mean that no spouses or children could ever use a Member's second home funded by the allowances, or use the electricity or water. It would mean that I couldn't give someone a lift if my travel was paid for by Parliament, or share a bottle of milk. I took it that it was not meant to be taken absolutely literally, but that there was some leeway.

I treated my Farnham house as my home. I believed that the Green Book allowed family and friends to stay on an occasional basis, equivalent to the way they could stay in my main home. I recognise that this wasn't occasional, but there was no definition of what was and was not acceptable. Indeed from what my colleagues have said I think that having people to stay may have been a pretty normal thing to do, even common practice.

I now believe my judgement was wrong. I have explained why I made it.

I would like to say a few things about the similarities to one of your recent inquiries. [62]

You have recently reported on your inquiry into a complaint about a Member's parents living in a second home funded by his allowances. There are some similarities to my own case. For example, the people staying in his house were close to him but not immediate family. That was the same as with me and my agent. There is a distinction between one's spouse and children and others if there is a regular arrangement to stay.

The Member did not abate the mortgage costs charged to the allowances. I did not abate living costs, but I would agree that if you abate the costs there is a strong argument for including the mortgage costs in the abatement.

The argument about whether the expenses claimed were 'wholly, exclusively and necessarily incurred' is relevant to both complaints.

The differences are that my second home was not the main home of the person who stayed in it. My agent had a home in [another county] where she paid council tax and other costs. Then there was no financial benefit to my agent, to me or to the local party. Although my agent received a benefit, had we known the outcome she would have stayed with someone else; there were plenty of offers. So there was no financial benefit. This did not cost the taxpayer any extra except perhaps my agent's share of the utility bills.

I would not like to comment on the motives of others, but I can say that this was not set up as an arrangement to take advantage of parliamentary expenses. It started in 2003, before I was elected, so it predated my use of those allowances.

Finally, I thought I was doing the right thing when I transferred my mortgage and designated the smaller house as my second home, as it would cost the taxpayer less.

My agent is an older lady and she would have been horrified at the suggestion that she was trying to get something she was not entitled to from the taxpayer.

JLLet me reassure you that this inquiry is not about her.

But am I right in taking from your evidence that the use of your house enabled her do her job more easily?

JHYes, but others offered her the use of their homes nearer her office. It was immaterial where she stayed.
JLWould you have been eligible for a council tax discount if you lived there by yourself?
JHYes, and I should have claimed it from the start. I could have had a single person's reduction even when my agent was staying there. I have now had a share of my council tax refunded and I have passed the money to the Fees Office. I will let you know the size of the repayment.[63]
C. Equity
JLIn the light of what you say, how far do you wish to pursue the argument you made about equity? In your letter of 24 June you said that, since by the time the house became your second home you owned around 30 per cent equity in it, you could in effect give your agent up to 30 per cent use of the property? 30% of the original purchase price of £185,000 would be just over £55,000.

In your email of 3 June to the Director-General you said that your equity was £35,000 at the time you designated Farnham as your main home. Could you help me to reconcile these statements?

JHI had equity of £35,000 when I bought the property. By the time I made it my main home its value had increased.
JLWhen you say in your letter of 24 June than your agent used half the home, did she not have access to the whole home - with the exception of your own room? Is that not nearer three quarters of the home?
JHYes, she had access to the whole house for half the week; she had shared use of it.

I am not going to pursue the equity argument. But it does reflect that fact that even though Members may claim reimbursement of mortgage interest, they still have to put money into a house purchase. You cannot buy a house without that.

JLWhat do you say to the argument that just as the mortgage company retains a charge on the property as a whole until the mortgage is discharged and, since the House pays the interest on that mortgage, it is reasonable to expect its rules to cover the whole property?
JHI would agree that is reasonable. I do not seek to labour the point.
D. 'Personal benefit'
JLCan I now ask you about the rule which deals with someone close to you obtaining immediate benefit from public funds? You will see that the rules were clarified in July 2006 to provide that "You must avoid any arrangement which may give rise to an accusation that … someone close to you is …obtaining an immediate benefit or subsidy from public funds". I have suggested in a previous report that that was clarification of the existing rule rather than a wholly new rule.

Were you aware of that clarification at the time or subsequently?

JHNo. I accept I was at fault in that.
JLWhat do you say to the suggestion that your arrangement in fact clearly represented an immediate benefit or subsidy from public funds to your agent? She was living there rent free.
JHI made a wrong judgement on that. The reason was that I looked at the Green Book rules and thought they should not be interpreted literally, because otherwise no-one apart from the Member could stay in a parliamentary second home.

It was the wrong judgement, not least because it gave rise to the possibility of an accusation - even if in reality there were no additional costs. It allowed the accusation to be made.

I can say that we never hid this arrangement. My agent appeared on the electoral roll. It was quite public. The previous Liberal Democrat candidate was aware of it and hadn't mentioned it at all.

But I accept it allowed accusations to be made.

JLOn reflection do you think there was in fact a personal benefit?
JHI am hesitating. The reason is that while there was a benefit in being given a bed for the night, I am resiling from saying that there was a financial gain because if my agent had not stayed with me, she would have been able and happy to stay elsewhere.

I thought it was within the latitude allowed for her to stay with me. That was clearly wrong.

JLIs it your argument that even if she had a benefit from public funds, she could have had the same benefit from private funds? Do you accept that there is a distinction between a benefit from public funds and a benefit from private funds?
JHYes, I recognise that.

But I am worried that if you say that there was a benefit from public funds people who are not familiar with the detail will make the assumption that there was a transfer of public funds. That would be completely different. There was no transfer of funds and no taxpayers' money went to my agent.

E. Political Benefit
JL Can I now ask you about possible political benefits from this arrangement? Could I confirm, that had your agent not lived in your constituency home, you believe that she would have been accommodated elsewhere in the constituency at no cost to her?
JHYes.
JLYou have suggested that this shows that there was no political benefit to her staying with you. Can you explain that a little more?
JHIs there a political benefit from having discussions with a close friend about your political career? That would be a heavy handed use of the phrase. No public funds were used to give a benefit to the Conservative Party. The accounts of the constituency association were completely unaffected.

Is there benefit in spending time together in this way? Of course there is - but political benefit? No. Socially, yes I did benefit.

JLAre you saying that because your agent could have stayed elsewhere there was no political benefit in the arrangement?
JHMaybe.

I want to avoid the suggestion that if she had not stayed with me, the Conservatives would have put her up in a hotel. That is not the case.

JLYou say in your letter of 24 June that the cottage was not used for the purpose of political campaigning, apart from the occasional meeting, probably no more than once or twice a year. What were those meetings?
JHI may have said to councillors, "Let's have coffee or a discussion in my house, to talk about the forthcoming election campaign."
JLWhy did you hold these discussions in the cottage?
JHIt was just a place to meet.
JLWhat assurances do you have that your agent did not use the property for political purposes in your absence?
JHYou are welcome to ask her.
JLSubject to your evidence, I do not think I need to invite her to give separate evidence.
JHShe didn't view the place as her own house; she treated it as a borrowed home and she packed up her things each week when she went home. She was punctilious.

Of course I don't know exactly what she did, but she worked very long hours in her office in Hindhead until 9 or 10 pm. Then she would come home and crash out. She did not work in the cottage.

JLDid she tell you what she had been doing during the day?
JHShe never hid anything, but our meetings were in the office in Hindhead, not at home. She would only be in the house to get her head down for the night.
JLDid constituents or members of your party or association call or ring you at your home?
JHNot much. The house is not big enough. I have had other meetings, not party political ones, with constituents there. But it was only a handful of meetings. It is the same now: it is not really practical to hold them there.
JLYou say in your letter of 24 June that your arrangements did allow political opponents to accuse you. You say that this was the area in which you were most uncertain: "but with the benefit of hindsight I do accept that the arrangements did allow political opponent to make accusations along those lines."

Given that the Green Book says that Members must avoid arrangements giving rise to an accusation of diverting public money for the benefit of a political organisation, do you on reflection, think that you were in breach of this part of the rules?

JHYes. I accept that I made the wrong judgement.


Your Claims
JLCould I now cover the administration of the designation of your home and your claims?

First, on designation. The Green Book states that you should let the Department know promptly if you change the location of your main or second home. Your letter of 24 June accepts that you did not notify the Department of the change of your main home from Surrey to London until January 2006, even though you made the move at the beginning of November 2005.

Why did it take two months for you to inform the Department that London was now your main home?

JHI accept that a lot of mistakes were made, and they have caused me a lot of embarrassment. I have explained them on my website.

In that six month period I came from running my own company where I didn't do my own administration. I arrived in Parliament where I had no secretary and no office for the first two months, and I had to deal with all the letters, including everyone who writes to congratulate you. Claims were the last thing on my mind at that stage.

I had a lot of turmoil as I assembled a team around me, and some of my staff worked for me only for a short period. Admin is not my strongest point, so I made no claims until November. I left it until January to submit my change of designation.

JLYou sent at the same time a notification of the designation of your Farnham property as your main home and explained that this covered an earlier claim. Am I right in assuming that this was your claim for mortgage interest on your London home up to October 2005?
JHYes.
JLThe Department's letter of 20 August confirms that you had nominated your London home as your main home on 11 May 2005 and again in August 2005. If you had made that designation, why did you need to do it again in January 2006?
JHI don't know. I suspect I thought I had to because I was making a late claim. My office would have assembled the claim.

Let me explain the reason why I repaid the mistaken claim for May to October 2005 only in September this year. After London had became my main home, through a clerical mistake I claimed for Farnham not London for the earlier period in 2005 when Farnham was my main home. I found out about the mistake this summer but I let it go then because the claim was lower than it would have been had I claimed for London as my second home. So the taxpayer has benefited. The Fees Office agreed that I saved the taxpayer money. But the climate has changed, and I felt that if the claim was not absolutely right then it needs to be repaid.

JLSo you didn't claim those utilities for your second home in the same period?
JHNo, I didn't.
JLYou told me in your letter of 10 September that the reason you wrongly claimed for utilities at your Farnham home was because when your staff member prepared the claim, you had already changed the designation from London to Farnham and he was confused. I am still a little puzzled how that confusion occurred. Do all your utility bills and other bills come to your parliamentary office, whether they relate to your London or your Farnham homes?
JHYes, I have them all, as many as possible, sent to my office. My staff have access to them.
JLWhat are you doing to avoid this happening again?
JHI go through them like a hawk. This is public money and we should take great care over it. I have new staff in my office and we now have much stricter procedures. We are much more careful about submitting claims.
JLThe notes from your website which you sent to me on 10 September rather suggest that since there was no loss to the public purse, you initially did not intend to repay the claim. Is that a fair interpretation?
JHI wasn't sure whether the expenses were for the right home but with the wrong address written on the claim form. As it just so happens my council tax bills in London and Farnham are the same to within £1. So initially, when I was alerted to the problem with the form, I thought that maybe these were expenses for my London house, but the form had the wrong address on it. It was just coincidence that the sums were similar.

I have now repaid the money.

JLIn view of the importance of making correct claims, did you make any further effort to get to the bottom of what had happened and confirm that a mistake had indeed been made?
JHI thought I had established that these were expenses for my London house. But when you raised the issue, I looked more closely at them.
Conclusion
JLFinally, how would you answer the suggestion that from November 2005 if it had been necessary for your agent to live there, you should have reduced your ACA claim to reflect the living costs of your agent's use of your Farnham home and by not doing so she received a personal and immediate benefit from public funds?
JHI accept that I made a wrong judgement. That is clear from reading the Committee's ruling on another recent complaint. They took an overview. I believe that there is a difference between parents or others and a spouse or children. I did not pro rata the living costs, including mortgage costs, for which I claimed, according to the number of nights in the house.

I am willing to repay half the entire living and mortgage costs for which I claimed during the entire period.

JLThank you. It will, of course, be for the Committee to decide what the response to your proposals for repayment should be once I submit to them my memorandum. Are there any other points you would like to make?
JHI would be grateful if you would acknowledge that there has been no financial benefit to me. This was a misinterpretation of the rules made in good faith. I was stupid to assume a latitude which there wasn't. In some respects it is different to the way others are alleged to have behaved.
JLThank you. The note-taker will now prepare a note of our discussion and show it to you so you can comment on its accuracy. As you know, you can expect the note to be included with the memorandum I will prepare for the Committee and it will be subsequently published with the report.

Once I have the note of the meeting I shall prepare the factual sections of my memorandum which again I would show you to check its accuracy. I will then add my conclusions and submit the full memorandum to the Committee. The Clerk will show you it and invite any comments you want to make about it and any comments you make will be submitted to the Committee with my memorandum.

JLAny further points you would like to make?
JHNo, thank you.
JLThank you for coming in, and for your help with this inquiry.
Interview finished at 3.30pm on Thursday 12 November 2009

12 November 2009

25.  Letter to the Commissioner from Mr Jeremy Hunt MP, 18 November 2009

I am writing to ask you to convey my apologies to the Committee for the mistakes I made in my claims for ACA between November 2005 and June 2007.

As you know I allowed my agent … to stay in my parliamentary second home in Farnham for around three nights per week. It was an arrangement designed to save her having to commute daily to her main home in ….

I interpreted the rules to mean that I did not need to reduce the amount I claimed for council tax, utilities and mortgage interest while this arrangement took place. However, following my discussions with you, I accept that I was wrong to do so. I apologise unreservedly for the mistake.

I would like to thank you for your cooperation in investigating this matter.

18 November 2009


57   WE 1 Back

58   WE 5 Back

59   Committee on Standards and Privileges, Tenth Report of Session 2008-09, HC1070 Back

60   MPs' Expenses and Allowances, Committee on Standards in Public Life, November 2009, Cm7724 Back

61   Committee on Standards and Privileges, Tenth Report of Session 2008-09, HC1070 Back

62   Committee on Standards and Privileges, Tenth Report of Session 2008-09, HC1070 Back

63   Mr Hunt subsequently confirmed in an email that on 20 July 2009 he had repaid £466 to the Fees Office. Back


 
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