Lord Knight of Weymouth
Introduction
1. The former Member for South Dorset, Jim Knight,
was raised to the peerage as Baron Knight of Weymouth on 23 June
2010.[1] On 8 November,
we received from the Parliamentary Commissioner for Standards
a memorandum, reporting on his investigation into a complaint
that, while still a Member of this House, Lord Knight used a risograph
(a type of printing machine), the purchase of which had been funded
by Parliamentary resources, to subsidise the production of party
political material. The material included newsletters and campaign
literature for Labour Party candidates in local elections held
in 2008 and 2009.[2] The
complaint was made by Mr Ian Bruce of Weymouth in March 2010.
2. The Commissioner's memorandum is published at
Appendix 1 to this Report. In accordance with our usual procedure,
we supplied Lord Knight with a copy of the Commissioner's memorandum
and invited him to give evidence. Lord Knight submitted written
evidence, which is published at Appendix 2.
The Commissioner's findings
3. The Commissioner identifies his task as being
to resolve whether Lord Knight's claims against Parliamentary
allowances for the purchase and use of a risograph when he was
the Member for South Dorset subsidised the costs of the South
Dorset Labour Party in the arrangements made with them for the
use of that machine. He points out that if there were such a subsidy,
Lord Knight would at the time have been in breach of the rules
of the House of Commons for having funded from Parliamentary allowances
expenditure which was not wholly, exclusively and necessarily
incurred on his Parliamentary duties, namely expenditure on party
political activities.[3]
4. The Commissioner's main findings of fact are as
follows:
- Lord Knight purchased a risograph
in January 2008, in his then capacity as the Member for South
Dorset.[4]
- The purchase price of £7,279 was funded
entirely from Lord Knight's Communications Allowance, spread over
two financial years (2007-08 and 2008-09).[5]
- The machine was located in an office rented by
the local Labour Party. Under the terms of a written agreement
between Lord Knight and the South Dorset Labour Party, Lord Knight
paid no rent to the Party for keeping the machine in its office.[6]
Lord Knight has estimated the notional cost to the Party of providing
the space necessary for accommodating the machine while in use
as £800 per annum.[7]
- Under the terms of the agreement, both the Party
and Lord Knight had use of the machine. The Party was to pay for
all maintenance costs but items such as paper and ink would be
paid for according to use.[8]
However, up to the end of 2009, with one exception, the cost of
all purchases of ink and masters for the risograph and of its
maintenance was met from Lord Knight's Parliamentary allowances.
The total paid from these allowances was £1,665. The total
paid by the South Dorset Labour Party was £106.[9]
Such evidence as there is suggests that the Party also provided
its own paper when it used the machine.[10]
- Although Lord Knight's evidence is that the agreement
was drawn up and signed by the Party Chair in January 2008, Lord
Knight has admitted to the Commissioner that he signed it in June
2010 and backdated his signature to January 2008. Lord Knight
has apologised unreservedly for what he accepts was a serious
error of judgment.[11]
- Lord Knight never discussed the agreement with
the Department of Resources.[12]
The Department has told the Commissioner that in its opinion such
agreements may be acceptable in principle, but they need to be
based on actual usage.[13]
- Lord Knight accepts that he should not have used
the risograph to produce a newsletter to constituents in January
2010, following a change to the rules, which prohibited such use.[14]
5. Lord Knight told the Commissioner that his intentions
regarding the purchase and use of the risograph were to communicate
effectively as a Member with his constituents and to minimise
expense for taxpayers. The agreement with the South Dorset Labour
Party to locate the machine in premises rented by it saved rental
costs which might otherwise have been claimed from Parliamentary
allowances.[15] Lord
Knight agreed that he should have sought advice from the Department
of Resources about drawing up and administering the agreement
with his local Labour Party and that he should have monitored
how it was working in practice. He told the Commissioner that
he would repay any sums which are found to have been claimed in
contravention of the rules.[16]
6. Lord Knight suggested to the Commissioner that
the notional rental cost for locating the machine in the Labour
Party's offices of £800 a year should be set off against
the purchase cost of the machine.[17]
The Commissioner describes this as "an unusual arrangement."[18]
7. Although there is no substantive evidence of the
extent to which the machine was used by Lord Knight as part of
his Parliamentary duties on the one hand, and by the Labour Party
for its party political activities on the other, the Commissioner's
view is that it would be reasonable to conclude that, at the time
of purchase, the use of the risograph might have been expected
over time to have been evenly split between both.[19]
On that basis, half the purchase price of the machine could reasonably
have been borne by the Labour Party and half the cost of accommodating
it should have been borne by Lord Knight. This would have meant
that the Labour Party should have reimbursed Lord Knight and his
Parliamentary account £3,640—that is, half the cost
of purchasing the machine. Given that the notional rent was £800
a year, it would have taken nine years for the Labour Party to
pay off half the purchase cost by offsetting its half-share of
the notional rent against it.
8. The Commissioner describes this as "a bad
deal." He writes:
Even were the Labour Party to have paid off the
price in half the time, it would still have been a questionable
deal. When the risograph was purchased, Lord Knight would have
known that the General Election was, at best, just over two years
away. There was no assurance that he would be returned to Parliament
(as, in the event, he was not). And, of course, by the risograph
being in their office and not in his, the Labour Party had the
benefit of direct access to it.[20]
The Commissioner continues:
I conclude that the arrangements for the purchase
and location of the risograph provided bad value for money for
the public purse. And they had the effect of providing a benefit
arising from parliamentary resources to a political party. The
use of those resources was not, therefore, wholly, necessarily
and exclusively incurred for parliamentary purposes, since this
subsidised the South Dorset Labour Party's political activities.
I conclude, therefore, that Lord Knight, while a Member of the
House of Commons, was in breach of the rules of the House in the
arrangements he made with the South Dorset Labour Party for the
purchase and location of this machine.[21]
9. The Commissioner also concludes that Lord Knight's
claims for the running costs of the risograph met some of the
costs of the Labour Party for their use of the machine. "Parliamentary
resources were therefore used for costs which were not wholly,
exclusively and necessarily incurred on parliamentary duties,
namely in support of the South Dorset Labour Party's political
activities."[22]
10. Although the Commissioner thanks Lord Knight
for his cooperation, he notes that the informal nature of the
arrangements for the location and use of the risograph has meant
there is a lack of reliable evidence, which has hampered his inquiry.
The Commissioner suggests that, where facilities are shared between
a Member and his or her political party, "very great care
needs to be taken that the way these shared resources are used
can be fully accounted for. That is not the position in this case."[23]
11. The Commissioner has found no evidence to suggest
that Lord Knight intended to provide the significant benefit to
the South Dorset Labour Party which they obtained through their
use of this risograph. Lord Knight was, however, careless. The
Commissioner welcomes Lord Knight's apology for the laxness of
the arrangements he made for sharing the machine and his offer
to repay in full any sums paid to him from Parliamentary allowances
which should more properly have fallen to the Labour Party.[24]
Lord Knight's evidence
12. In his written evidence, Lord Knight unreservedly
repeats his apology for the breach of the rules in respect of
his use of Communications Expenditure, which he describes as "inadvertent",
"due to an understandable misreading of the Department's
[advice]" and which he suggests "did not result in any
political advantage."[25]
13. Lord Knight also repeats his acceptance that
he should have monitored more carefully the Labour Party's purchase
of supplies for the risograph. He apologises for his carelessness
in not securing approval from the Department for Resources and
then not monitoring the agreement he had entered into with the
Labour Party. Although Lord Knight remains of the view that his
use of the machine in connection with his Parliamentary duties
was greater than the Labour Party's use, he states that he is
committed to ensuring that Parliament is reimbursed for whatever
proportion of the total claimed from allowances the Committee
sees fit.
14. Lord Knight then considers the question of whether
a subsidy was gained by the Labour Party from the arrangement
whereby the Party made no contribution to the purchase cost of
the machine but accommodated it in its offices rent-free. He disagrees
with the Commissioner's conclusion that the arrangement was "a
bad deal." He tells us that he personally paid about £1,500
in tax on the machine and he estimates that by purchasing and
using it he made an annual saving of between £1,500 and £2,000.
If the machine had not been accommodated by the Labour Party free
of charge, Lord Knight estimates that the annual saving would
still have been between £700 and £1,200. In Lord Knight's
view, therefore,
... the deal with the Labour Party meant the
machine was affordable and then reduced pressure on my communications
allowance, as demonstrated by the total claimed from that allowance
reducing from £10,007 in 2008/9 to £3,340.43 in 2009/10.
... By incurring £800 worth of additional cost the Labour
Party would have effectively paid for 50% of the cost, ignoring
any depreciation, after four and a half years. Again, I remain
of the view that this was reasonable and a good attempt to provide
value for money to the taxpayer for the use of the Communications
Allowance.
Conclusions and recommendation
15. We welcome Lord Knight's acceptance of the majority
of the Commissioner's conclusions. There is no doubt that Lord
Knight should have taken greater care to ensure that the arrangements
for the purchase, location and running costs of the risograph
were beyond reproach. This does not mean that Lord Knight was
wrong when, as a Member of this House, he entered into an agreement
with the local Labour Party relating to the machine; but the agreement
should have been more tightly drawn and based on actual usage;
it should have been sent to the Department for Resources for approval;
and it should have been properly implemented.
16. Lord Knight has disputed two aspects of the Commissioner's
conclusions: the split between Lord Knight's use of the machine
in connection with his Parliamentary duties and the Labour Party's
use of the machine; and the question of whether the Labour Party
received a benefit from Parliamentary allowances.
17. On the first of these points, in support of his
view that his use of the machine was greater than that of the
Labour Party, Lord Knight refers in his evidence to "the
surge of use of consumables in the autumn of 2009." This
reflects his evidence to the Commissioner that, although in 2008
the Labour Party made greater use of the machine than he did,
in 2009 he accounted for 70% of its use.[26]
In considering that evidence, the Commissioner concluded that
it was based on "no more than judgements made by Lord Knight
after what he told me were discussions with staff and checking
computer records which are no longer available."[27]
Lord Knight has brought forward no fresh evidence in support of
his contention. In the absence of substantive evidence of the
actual split between Lord Knight's use of the machine and that
of the Labour Party, we take the view that the Commissioner's
estimate of a 50:50 split is fair and reasonable.
18. We turn now to Lord Knight's comments on the
Commissioner's conclusion that the Labour Party received a significant
benefit from its use of a machine funded largely from Parliamentary
allowances. We note that, although Lord Knight introduces his
comments as relating to the question of "whether a subsidy
was gained by the Labour Party," he has in fact directed
his evidence to the question of whether the arrangement provided
good value for money. Lord Knight has sought to demonstrate that
the agreement to locate the machine rent-free in the Labour Party's
offices and to share costs produced a substantial saving to public
funds.
19. Whether there was or was not a net saving to
the public purse is a question in its own right. We share the
Commissioner's concern about the paucity of evidence on the use
of the machine and on the source of supplies.[28]
This makes it very difficult to determine the extent of any saving.
Lord Knight has suggested there was a gross annual saving from
his use of the machine of between £1,500 and £2,000.
He bases this largely on the cost of producing his newsletter
before he purchased the machine.
20. The Commissioner's view is that the arrangement
represented "bad value for money for the public purse,"
although he was not required to consider whether it represented
bad value for money in Lord Knight's Parliamentary communications,
because the latter point did not form part of the complaint.[29]
In our view, the question of whether there was a saving to public
funds has no bearing on the question of whether the Labour Party's
political activities received a subsidy from Lord Knight's claims
against Parliamentary allowances when he was a Member of this
House. It is clear from the evidence that there was such a subsidy
and that Lord Knight was therefore in breach of the rules when
he was the Member for South Dorset.
21. We have considered whether, if there was a saving
to public funds, that saving can properly be considered in mitigation
of this breach. We have concluded that it cannot, as any such
saving attributable to Lord Knight's use of the machine would
have accrued regardless of whether the Labour Party derived a
benefit from its own use of it.
22. The Commissioner has calculated the Labour Party's
share of the cost of purchasing the machine as 50%, which comes
to £3,640.[30] Setting
off against this sum half the notional annual rent, £400,
for the two-year period following the purchase of the machine
in January 2008 brings it down to £2,840.
23. We note that nowhere in his evidence to us has
Lord Knight mentioned the misjudgment he accepted in evidence
to the Commissioner he made in signing in June 2010 a document
dated January 2008. In our view, this was a very serious misjudgment,
albeit one made when Lord Knight was a Member of neither House.
Lord Knight was right to apologise unreservedly to the Commissioner
for making it; we would have welcomed a repeat of that apology
in his evidence to us. Had Lord Knight made such a misjudgment
when he was a Member of this House, it would in our view have
constituted a breach of paragraph 15 of the Code of Conduct.[31]
24. Lord Knight has also omitted from his evidence
to us any reference to the breach of the rules which he accepts
he made when he used the risograph to print a newsletter after
the rules changed, in January 2010. We note that there are no
separately identifiable costs associated with the production of
this newsletter.
RECOMMENDATION
25. We recommend that Lord Knight repay half the
sum paid to him from Parliamentary allowances for the purchase
of a risograph, minus £800 (half two years' notional rent
for the location of the machine in Labour Party offices): that
is, £2,840. We further recommend that Lord Knight repay £780,
which is half the sum paid to him from Parliamentary allowances
for supplies for and maintenance of the risograph. The total to
be repaid by Lord Knight is thus £3,620. This sum represents
the benefit to the Labour Party of its use of the machine.
1 In this Report, we refer to Lord Knight throughout
as "Lord Knight" Back
2
Appendix 1, paragraph 2 Back
3
Appendix 1, paragraph 80 Back
4
Appendix 1, paragraph 65 Back
5
Appendix 1, paragraph 65 Back
6
Appendix 1, paragraph 66 Back
7
Appendix 1, paragraph 69 Back
8
Appendix 1, paragraph 66 Back
9
Appendix 1, paragraph 76 Back
10
Appendix 1, paragraph 78 Back
11
Appendix 1, paragraph 68 Back
12
Appendix 1, paragraph 70 Back
13
Appendix 1, paragraph 77 Back
14
Appendix 1, paragraph 72 Back
15
Appendix 1, paragraph 78 Back
16
Appendix 1, paragraph 79 Back
17
Appendix 1, paragraph 83 Back
18
Appendix 1, paragraph 84 Back
19
Appendix 1, paragraphs 85 and 86 Back
20
Appendix 1, paragraph 87 Back
21
Appendix 1, paragraph 89 Back
22
Appendix 1, paragraph 93 Back
23
Appendix 1, paragraph 94 Back
24
Appendix 1, paragraph 96 Back
25
Appendix 2 Back
26
Appendix 1, paragraph 26 Back
27
Appendix 1, paragraph 85 Back
28
Appendix 1, paragraph 94 Back
29
Appendix 1, paragraphs 88 and 89 Back
30
Appendix 1, paragraph 86 Back
31
"Members shall at all times conduct themselves in a manner
which will tend to maintain and strengthen the public's trust
and confidence in the integrity of Parliament and never undertake
any action which would bring the House of Commons, or its Members
generally, into disrepute." Back
| 
