House of Commons - Dr Liam Fox - Standards and Privileges Committee

Dr Liam Fox - Standards and Privileges Committee Contents

Dr Liam Fox

Introduction

1. In this Report we consider a memorandum from the Parliamentary Commissioner for Standards, reporting on his consideration of complaints against Dr Liam Fox, the Member for North Somerset, made by Mr John Mann, the Member for Bassetlaw. The complaints were that:

Dr Fox had permitted his friend Adam Werritty to stay rent-free in accommodation funded by the Additional Costs Allowance;
Adam Werritty reportedly ran a business from that address in 2002-03;
Mr Werritty had been "allowed to run an organisation called The Atlantic Bridge from Liam Fox's Parliamentary Offices."

2. The Commissioner's memorandum is appended to this Report. In accordance with the established procedure, we supplied Dr Fox with a copy of the Commissioner's memorandum and asked him if he wished to give evidence to the Committee, orally or in writing. Dr Fox has written to the Commissioner expressing his acceptance of the Commissioner's conclusions, and he has copied this letter to the Chair of the Committee. He also confirmed that he did not wish to give evidence. Dr Fox's letters are also appended to this Report.[1]

The Commissioner's findings

3. The Commissioner notes:

The issue I am to resolve is whether Dr Fox misused Parliamentary allowances and facilities first to accommodate a friend for a year in his Parliamentary funded flat in London from October 2002 to October 2003 and second to accommodate in his parliamentary office from 2003 to 2009 an organisation which he co-founded but which was unconnected to his Parliamentary duties.[2]

In resolving those issues he considered the following questions:

i. Was Dr Fox correct in continuing in 2002 and 2003 to designate as his main home his constituency property, thus enabling him to make claims against his parliamentary Additional Costs Allowance for his London flat?

ii. Should Dr Fox have recognised in his claims against the Additional Costs Allowance that these claims also met the living costs of the friend who was living in his flat from October 2002 to October 2003?

iii. Did Dr Fox's friend use the London flat for business purposes in 2002 and 2003 or subsequently?

iv. Should Dr Fox have permitted his Parliamentary offices to be used by staff to run The Atlantic Bridge organisation from September 2003 to June 2009?

DESIGNATION OF MAIN HOME

4. The Commissioner considered it was reasonable to accept that the constituency property was Dr Fox's main home.

USE OF ACA FUNDED ACCOMMODATION BY A FRIEND

5. The Commissioner found that in October 2002 Mr Werritty was allowed to stay in Dr Fox's London flat, rent-free, until he had a job and was able to find alternative accommodation. The Commissioner accepted Dr Fox's evidence that, in fact, Mr Werritty remained at the flat most weekdays until October 2003, and was away from the flat for about eight weeks in total over the period.

6. During this time, Dr Fox had not asked for or accepted any payment from Mr Werritty. He continued to claim ACA against the property without making any deductions to take account of Mr Werritty's use of the flat. Dr Fox considered that no additional costs to the public purse were incurred by Mr Werritty's use of the flat, nor was there any subletting of the property, which the Green Book advised against.

7. The Commissioner noted that the Rules introduced in June 2003 provided explicitly that the Additional Costs Allowance should not be used to meet the living costs of anyone other than the Member, and he accepted that this was a clarification of previous practice. He therefore considers that this principle should apply to the full period when Dr Fox's friend was living with him in the flat, October 2002 to October 2003.

8. The Commissioner notes:

Dr Fox's friend was not part of his family. He was not a child dependent on him. He was not a carer. By generously allowing his friend full use of his parliamentary supported flat between October 2002 and October 2003, Dr Fox was clearly, in my judgement, giving his friend a considerable financial benefit. I accept Dr Fox's evidence that in fact his friend was away from the flat for two months of that year and that would need to be taken into account in any consideration of the value of the benefit his friend received. I accept too Dr Fox's evidence that his friend paid for his own food, basic supplies and use of mobile telephone. But the largest part of people's living costs is their rent or equivalent and Dr Fox's friend lived in the London flat rent-free. The benefit his friend thus received was made possible because of the claims which Dr Fox made against his parliamentary allowances to support him in his parliamentary duties. As with the previous cases considered by the Committee, the result was that parliamentary allowances were helping to meet the living costs of someone other than the Member. That was, in my judgement, a clear breach of the rules.[3]

9. The Commissioner also notes previous decisions by our predecessor Committee which held that the provision that ACA should not be used to cover "living costs for anyone other than yourself" should be interpreted as requiring the Member to make sure that he or she did not make a claim which had the effect of subsidising the living costs of anyone other than themselves (other than partners, dependent children or carers), and that claims should be reduced to take account of any such benefit.[4]

10. The Commissioner concludes:

I therefore find that Dr Fox was in breach of the rules of the House from October 2002 to October 2003 in that his claims against his Additional Costs Allowance for his flat in London did not take account of the living costs of his friend who was living there. When his friend was away from the property for significant periods (perhaps for more than a week or two at a time) then it would, in my judgement, have been reasonable for Dr Fox to have reflected his absence in the claims which he made and to have reverted to the full amounts for those periods. This does not, however, justify Dr Fox making no allowance at all for his friend's living costs in the claims which he made that year.[5]

USE OF THE LONDON FLAT FOR BUSINESS PURPOSES

11. The Commissioner finds that when Mr Werritty registered his Directorship of a health company with Companies House in October 2002 he gave his address as Dr Fox's London property. The company's registered address in the period was at a different address. Dr Fox's evidence is that Mr Werritty had listed Dr Fox's London flat as his residential address in October 2002 as it was his only predictable residential address at that time. The Commissioner saw no evidence that the flat was used for business purposes. The registered address for the business itself was elsewhere, and although during the period in question the friend was developing a business plan, much of that work was done elsewhere. The Commissioner also notes "drafting a business plan is not the same, in my view, as running a business."[6]

USE OF PARLIAMENTARY OFFICES BY THE ATLANTIC BRIDGE ORGANISATION

12. The Commissioner found that between September 2003 and June 2009 The Atlantic Bridge was located in Dr Fox's parliamentary offices, and four successive employees of the charity had worked there.[7] We note the Commissioner's memorandum states Dr Fox's evidence is that "Mr Werritty did not at any point work for The Atlantic Bridge from the House of Commons."[8]

13. On 16 May 2006 Dr Fox wrote to the House authorities informing them that a telephone line in his office was to be used for business pertaining to The Atlantic Bridge, and requesting a separate bill for this line be sent so that he might pay separately for any outside costs incurred. In April 2009 he wrote two letters to the House authorities; one requesting a separate bill for the phone line in question dating back to 16th of May 2006, and the other seeking "to reconfirm the continued use of parliamentary office space for business pertaining to my charitable organisation, The Atlantic Bridge".

14. Dr Fox received no response to his letter of 16 May 2006, although it gave rise to internal discussion. Dr Fox's letter of 7 April 2009 to the Telecomms Manager did result in the issue of a bill which Dr Fox paid in June 2009. The Commissioner consulted the Director-General of Human Resources and Change. The Commissioner's memorandum notes:

With the notification of that bill the House authorities noted that this was not a service they normally provided and suggested that Dr Fox get in touch with the Head of Policy in the Resources Directorate "to discuss the use of this line in future for business pertaining to The Atlantic Bridge." There was no record of any subsequent correspondence or discussion between Dr Fox and the Head of Policy. Dr Fox's letter of 7 April 2009 to the Serjeant at Arms was received and forwarded to the relevant office but the Director-General's evidence is that unfortunately there was no record of a response to Dr Fox on file and no recollection of one having been made. The rules on acceptable and unacceptable use of parliamentary accommodation were first set out unequivocally in the 2010 Members' Handbook. The Director-General's evidence is that before then, it could have been argued from first principles that the House's budget which pays for accommodation (the Administration Estimate) was for parliamentary purposes only; but that might not have been made clear to all Members.[9]

15. The Commissioner concludes that:

I consider that Dr Fox's use of his parliamentary office for The Atlantic Bridge was serious. It continued for some six years. It is a matter of some concern that a Member should think it acceptable to use parliamentary resources for non-parliamentary purposes.

But the seriousness with which I view the breach is substantially mitigated by the fact that Dr Fox specifically raised his use of his parliamentary office with the House authorities in May 2006 (and repeated in unequivocal terms in April 2009). While the Department's evidence is that Dr Fox's letter of May 2006 was "the subject of discussion" between several Departments of the House, including whether the use of a parliamentary telephone line for business purposes was acceptable, the matter was not pursued by the Department. Nor was Dr Fox given a specific answer to his request 3 years later to "reconfirm the continued use of parliamentary office space for business pertaining to my charitable organisation". While it is to his credit that during the course of this inquiry Dr Fox has not sought to criticise the House authorities in any way, or to seek to shift responsibility on to them, I consider that Dr Fox was not well served by the House authorities by their failure to respond in 2006 or again in 2009 to his reporting to them the use of his parliamentary office by The Atlantic Bridge. Dr Fox made no secret of the fact that the organisation was run from his parliamentary office and the House authorities should have given him clear advice about the propriety of this when he first approached them in April 2006. Had they done so, Dr Fox should have been able to take the necessary corrective action and so have prevented the breach continuing for another three years.[10]

The Committee's conclusions

16. We agree with the Commissioner's findings. We now need to consider what action is appropriate in respect of the two breaches of the rules which the Commissioner has identified.

USE OF ACA FUNDED ACCOMMODATION BY A FRIEND

17. In his letter to the Commissioner of 6 March, Dr Fox states:

I naturally regret that I did not take more care when allowing someone to stay in my flat, but I am grateful for your recognition that there is no evidence of significant extra costs being incurred and of the state of the rules in place at the time, a decade ago.[11]

In evidence to the Commissioner, Dr Fox stated:

It is true that my friend Mr Werritty temporarily stayed in a spare bedroom at my second home address funded under the Parliamentary expenses system for several months in 2002-03. The Green Book 2003, section 3 on Additional Cost Allowance, paragraph 3.5.1 Subletting, lodgers, paying guests etc, page 9 states: "You are strongly advised to avoid subletting or renting out any part of a property for which you claim the additional costs allowance." I define subletting as the act of leasing or renting all or part of a leased or rented property. As I neither accepted, nor asked for, any payment from Mr Werritty in return I did not violate the rules as outlined in the 2003 version of the Green Book.[12]

18. We accept that the rules referred to "subletting, lodgers, paying guests etc" and did not explicitly refer to cases in which a person made significant use of ACA funded accommodation without making any payment. Nevertheless, as the Commissioner notes, "The rules introduced in June 2003 provided that the Additional Costs Allowance should not be used to meet the living costs of anyone other than the Member". Although these rules were a clarification of existing practice, not a new departure, they were first set out clearly in section 3 of the Green Book in June 2003.[13]

19. As the Commissioner notes, the Committee has dealt with several analogous cases in the past.[14] The closest is that described in our Fourth Report of Session 2009-10, in which a Member had permitted someone to use his ACA funded property for about three nights a week between November 2003 and June 2007. This arrangement continued after the Member was elected in 2005. In essence, in that case the Commissioner considered that even though the use of the accommodation was short of full-time occupancy, it was more than occasional use. In this case, the use was still more extensive.

20. In the previous case, we considered it appropriate to accept the offer to repay half the sums claimed over the relevant period. We consider that sets a useful precedent for the current case. The rules were not explicit until June 2003. When they had been clarified it was incumbent on Dr Fox to seek advice; he did not do so. We consider Dr Fox should repay half of his ACA claims for the months from June 2003. As time has elapsed, it is impossible to be exact about the breakdown in spending; we therefore propose repayment of £3,000. Although it is not possible to determine the precise breakdown of the figures, we consider it is reasonable to expect Dr Fox to pay this sum, since the use of the property was more extensive than in the previous case.

USE OF PARLIAMENTARY OFFICES BY THE ATLANTIC BRIDGE ORGANISATION

21. The Commissioner finds Dr Fox's breach of the rules in permitting his office to be used by The Atlantic Bridge was serious, and we agree. As we have explored in other reports, Members have complex, multifaceted roles. Each case has to be judged on its own merits. In this case we note that Commissioner accepted that "Dr Fox's evidence that the work of this organisation was separate from his parliamentary work: it did not therefore form part of Dr Fox's parliamentary duties."[15] There may be occasions on which a Member can do some limited amount of charitable work from his or her office with complete propriety. This does not extend to providing office space for a charity. As the Commissioner says:

the organisation had the significant benefit of free office accommodation in central London. This included heating and lighting as well as access to the facilities on the parliamentary estate. Those benefits were provided from public resources. They were benefits to which, in my judgement, the organisation was not entitled.[16]

22. In his letter to the Commissioner, Dr Fox says:

I also accept your conclusion on the use of my office for the Atlantic Bridge charity. I regret that the rules were breached, but again I am appreciative of your view that the breach was substantially mitigated by the lack of advice from the House Authorities.[17]

As the Commissioner notes, Dr Fox raised the position with the House authorities in 2006, and again in April 2009. He received no guidance. We agree with the Commissioner that Dr Fox "was not well served by the House authorities by their failure to respond in 2006 or again in 2009 to his reporting to them the use of his parliamentary office by The Atlantic Bridge."[18] It is particularly disappointing that the Director-General for Human Resources and Change indicates Dr Fox's request was the "subject of discussion between several departments of the House, both in terms of the production of a separate bill and whether the use of a Parliamentary phone line for business purposes was acceptable"[19] but that no response was given. Against that must be set the fact that Dr Fox had simply raised the question of the telephone line, which he said "is now also to be utilised by both the fax machine and a handset. It will be used not only for House of Commons business but also business pertaining to my organization", rather than explicitly asking for advice. Moreover, between 2003 and 2006 Dr Fox used Parliamentary facilities for Atlantic Bridge without even raising the question.

23. In a memorandum to the Committee in 2006-07 the then Commissioner noted:

I am advised by the Serjeant at Arms that no rules relating to permitted uses of Members' offices have been promulgated. It is, however, a fundamental principle underpinning the provision of Parliamentary facilities, services, expenses and allowances to Members that they are provided to enable Members to carry out their responsibilities as Members of the House, that is they are provided for Parliamentary rather than for party purposes.[20]

The Committee warned Members that:

We nonetheless take this opportunity to remind all Members of the importance of the fundamental principle that Parliamentary facilities, services, expenses and allowances are provided for Parliamentary purposes, and that it is incumbent on them to check regularly the relevant rules.[21]

24. Dr Fox's evidence was that The Atlantic Bridge was a particularly small organisation with only one part time employee, which had long periods of inactivity. The facilities Dr Fox received from the House were no different than they would otherwise have been. For the period in question, the organisation was a registered charity. While that organisation doubtless benefited from use of Dr Fox's Parliamentary facilities, it is impossible to quantify that benefit.

Recommendation

25. We recommend that Dr Fox repay £3,000 to cover the period in which his friend was staying in his ACA funded accommodation after the revised Green Book had put the rules beyond doubt. We also recommend that Dr Fox apologise in writing for his breaches of the rules in permitting his friend to use his ACA funded flat for a year and in permitting The Atlantic Bridge to use his parliamentary offices. We would have proposed a heavier penalty if Dr Fox had not raised the use of his office with the House Authorities.

1 Appendix 2 Back

2 Appendix 1, paragraph 78 Back

3 Appendix 1, paragraph 87, see also paragraph 19 Back

4 Appendix 1, paragraph 86 Back

5 Appendix 1, paragraph 90 Back

6 Appendix 1, paragraph 91 Back

7 Appendix 1, paragraph 75 Back

8 Appendix 1, paragraph 29 Back

9 Appendix 1, paragraph 76 Back

10 Appendix 1, paragraphs 101 and 102 Back

11 Appendix 2 Back

12 Appendix 1, Letter to the Commissioner from Rt Hon Dr Liam Fox MP, 12 October 2011 Back