Lord Knight of Weymouth - Standards and Privileges Committee Contents


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


 
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