Mr Denis MacShane - Standards and Privileges Committee Contents

3  The Commissioner's findings

Cooperation with the Commissioner's inquiry

33.  The Code of Conduct provides that members "shall cooperate at all stages with any such investigation by or under the authority of the House." The Commissioner concludes:

I appreciate the pressures on Mr MacShane, but that cannot, in my judgment, justify refusing what I consider to be reasonable requests to attend an interview at a time convenient to him and to answer a specific question. If Members were to feel an interview when sought by the Commissioner was optional it would considerably hamper the Commissioner's inquiries. So too would a view that Members could decline to clear up ambiguities in their evidence. With regret, therefore, I find that Mr MacShane was in breach of the Code of Conduct in deciding to withdraw his cooperation in this final stage of my inquiry.[33]

Claims for computer equipment

34.  The Commissioner concludes that:

Mr MacShane was clearly within the rules of the House in claiming for computers additional to those loaned by the Parliamentary Information and Communications Technology service. But, as the Department of Resources has implied, Mr MacShane's claims would appear to have been excessive. In the course of just under three years, he obtained 14 computers: 6 provided by the House and 8 bought from his allowances. Even allowing for the two which he said had broken down and for essential upgrades, that could not in my judgment be justified. While I believe that Members should expect to have a considerable degree of latitude in deciding, within the limits of any allowance, what provision they need in their offices to support them in their parliamentary duties, Mr MacShane's computer purchases appear to go well beyond that reasonable expectation. They reflect a cavalier approach to the use of public resources and, in some cases, at least, it appears that Mr MacShane allowed an outgoing intern to take away with them a parliamentary-funded laptop, and then bought a new one for his or her successor. In my judgment, the result was that, for part of the lifetime of the equipment, these computers were not being used solely in support of Mr MacShane's parliamentary duties and there were, in any case, just more than any reasonable person would think necessary. [...] On both counts, therefore, I find that the expenditure was not wholly, exclusively and necessarily incurred on parliamentary duties. As a result, Mr MacShane was, in my judgment, in breach of paragraph 5.1.1 of the Green Book.

146. Mr MacShane was also in breach of the rules in submitting the same invoice twice for a computer he bought in December 2007 for £498.95. I fully accept that this was a mistake on his part and agree with Mr MacShane that it is unfortunate that this was not picked up by the Fees Office at the time.[34]

Claims relating to invoices from the European Policy Institute

35.  The Commissioner notes that the incidental expenses provision allowed for Members to claim for work commissioned and bought-in services, including interpreting and translation services and research and recruitment services. Members could also claim for subscriptions to newspapers and periodicals. The Commissioner considers that:

139. Some of Mr MacShane's expenditure in support of his European activities was, in my judgment, an allowable claim under the incidental expenses provision. That included those research and position papers which Mr MacShane commissioned and which were clearly in support of his parliamentary duties, in particular his contributions to debates. It properly covered the translation of those documents which again he felt he needed for his parliamentary duties. And it included the purchase of magazines and periodicals for these purposes.

140. But Mr MacShane's claims went far beyond these provisions, and, in my judgment, far beyond what was allowable under the rules. In particular, over four financial years he claimed for the costs of his own extensive travel across Europe. This included his own air fares, his hotel accommodation where required and his meals. Mr MacShane suggested that this was necessary so he could conduct his own "face to face" research. Given what Mr MacShane has said about the visits, which covered a wide range of activities, that may be stretching the definition of research. But in any event, since expenditure on research was specifically associated in the rules with "work commissioned and bought in services" it was clearly outside that provision. The definition of commissioned and bought in services cannot be extended to a Member who commissions himself and who buys in his own services.

The Commissioner notes:

It might have been possible for a few of the costs of Mr MacShane's European visits to have been met by claims against the European travel entitlement, but, as Mr MacShane knew, the number of trips per year, and their destination, was limited. They also required prior authorisation by the Department of Finance and Administration. Mr MacShane never sought such authorisation for his extensive European travel. Indeed, the House authorities never knew until my investigation that that was what a significant part of his claims for research and translation services was being spent on.[35]

That being the case, the Commissioner considers the following costs were not allowable:

1. All Mr MacShane's personal travel, hotel and food bills for his visits to Europe. [...] They [...] breached paragraph 5.3.1 of the Green Book.

2. Payments for travel to Paris for meetings related to the European Book of the Year award, which, as well as including travel and subsistence costs which fell outside the rules, was in my view clearly not a parliamentary duty. This was a breach of paragraph 5.1.1 of the Green Book.

3. Payments for travel to Paris to interview candidates for Mr MacShane's Personal Assistants—which, as well as being prohibited travel, was not, in my view, justifiably proportionate expenditure solely, exclusively and necessarily incurred on account of Mr MacShane's parliamentary duties. A trip to Paris cannot, I believe, reasonably be justified by a wish to interview PAs. It was a breach of paragraph 5.1.1 of the Green Book.

4. The costs of a report in Mr MacShane's name on the position of Labour's sister parties in the EU. This went beyond what Mr MacShane fairly accepted might have been "some overlap between parliamentary and political involvement in European affairs". It was in my judgment a report in support of party political activities and so contrary to paragraph 5.1.1 of the Green Book.

5. Mr MacShane's claims for some of the hospitality he provided to his academic and political contacts which appeared to go beyond remuneration in kind for a commissioned service. Mr MacShane appears to have been using parliamentary funds to entertain his European contacts. This is not allowable expenditure under paragraph 5.13.4 of the Green Book.

6. Mr MacShane's extensive purchase of books in the course of his travels which went, in my judgment, well beyond the scope of a provision allowing claims for subscriptions to newspapers or periodicals. [...] while it would be disproportionate to have prevented claims for some books being made against the incidental expenses provision, Mr MacShane's claims went way beyond what was reasonable and, in my judgment, seemed to border on him using parliamentary resources to build his personal European library. They breached paragraph 5.13.4 of the Green Book.[36]


36.  The Commissioner concludes there were very substantial failures in the way in which Mr MacShane submitted his claims.

37.  First, the invoices did not properly describe what the money claimed was spent on; and this was not an isolated occurrence: 19 misleading invoices were presented over the course of just over three years.[37] "By purporting to use the EPI as the provider or commissioner of the relevant service, Mr MacShane avoided any requirement for specific invoices to be provided."[38] Mr MacShane considered that many of his claims would not have needed invoices, since individual items were below the £250 threshold required or could have been taken out of the could have been taken out of the £250 monthly petty cash provision. The Commissioner does not accept these arguments:

It is hard to see how much of his European expenditure could reasonably have been funded from a petty cash provision and even claims without invoices had to be itemised, described and costed. Had Mr MacShane claimed for reimbursement of the costs in this way, the unacceptable nature of his expenditure should very quickly have been exposed.[39]

38.  Second, the invoiced claims were in fact no more than broad estimates of what Mr MacShane has in fact spent in support of his European work, and were prepared "according to what I judged to have expended". While the Commissioner notes there is no evidence that at any time Mr MacShane made a personal profit from his claims he concludes:

that is not an acceptable basis on which to submit claims against parliamentary resources. The Green Book provides that the incidental expenses provision "is available to meet costs incurred on Members' parliamentary duties." But those costs have to be the costs which have actually been incurred. Mr MacShane's claims were not prepared in this way. It is difficult to avoid the conclusion that he spent as he felt necessary and put in rounded claims to the Department when the account he used for his European work was running low.[40]

39.  The Commissioner's final conclusion on this matter relates to the nature of the invoices themselves:

153. Thirdly, Mr MacShane made claims purporting to be based solely on invoices submitted to him by the European Policy Institute, authenticated by the EPI's letterhead and signed by the General Manager of the Institute. But by the time he started making these claims, the Institute in this form did not exist; the notepaper on which the invoices were produced was obsolete, and there was no General Manager—the General Manager's signature was provided by Mr MacShane himself or someone else under his authority. The sum claimed was not a sum determined by the General Manager of the EPI to meet the cost of services commissioned on Mr MacShane's behalf. It was the sum of money entered on his computer by Mr MacShane himself. In effect, he was sending the invoice to himself and writing his own cheque. The claims were paid out unchallenged by the House authorities and the money put into a separate bank account which Mr MacShane controlled. He used the money as he thought fit, in support of his European activities.

154. Mr MacShane has sought to argue that the name of the General Manger was in effect a "nom de plume". Mr MacShane told me that his staff regularly sign his letters in his name and seemed to imply that this arrangement was no different. But of course it was. The name used was that once used by Mr MacShane's brother: if it was anyone's "nom de plume" it was his—and Mr MacShane's evidence is that his brother was not involved in any way with his claims during this period. Nor was this a "nom de plume" used by the Member for an activity disassociated from Parliament. It was used to receive monies from Parliament. And the vehicle was the invoices produced by Mr MacShane and signed in someone else's name. Those paying out the money were never told that the "nom de plume" was in fact being used by the Member himself. The effect was that, unbeknown to the Department, Mr MacShane was submitting invoices to himself and asking the parliamentary authorities to pay.

155. The result was that the invoices misled the House authorities; they provided no check, balance or restraint on Mr MacShane's claims; they ensured there was no means of checking their accuracy or admissibility, and, when they came to light, they put unwelcome pressure on a member of Mr MacShane's own family.

40.  The Commissioner's overall judgement is:

158. Taken together, I consider these breaches to be a particularly serious violation of the Code of Conduct. Wrongly claiming from the incidental expenses provision for his European activities was itself serious, more so than for his computer claims. But the seriousness was very substantially compounded by Mr MacShane's wrongdoing in his presentation of the highly misleading and inaccurate invoices which helped to fund his European activities.

159. I recognise that Mr MacShane was under personal pressure throughout much of the period covered by his claims. I recognise too that the police investigation, followed by the resumption of my inquiry, had the effect of continuing that pressure. Mr MacShane is an acknowledged parliamentary expert on European affairs and, having lost his post as Minister for Europe, it was understandable that he would have wished to have continued with the work to which he has been committed for many years. He has also repaid the cost of his European claims of his own volition and has offered to repay whatever else is required. He has apologised. I have no evidence that Mr MacShane received any personal profit from his claims. All this needs to be weighed in the balance. But in my judgment, it cannot absolve Mr MacShane from his responsibility for the extremely serious way in which he breached the House of Commons Code of Conduct and its expenses rules over a period of some four financial years. On reflection, I hope he might recognise that overall his conduct fell far below the standards of integrity and probity expected of every Member of the House.


33   Appendix 1, paragraph 136 Back

34   Appendix 1, paragraphs 145 and 146 Back

35   Appendix 1, paragraph 141 Back

36   Appendix 1, paragraph 143 Back

37   Four financial years were involved. Back

38   Appendix 1, paragraph 150 Back

39   Appendix 1, paragraph 151 Back

40   Appendix 1, paragraph 152 Back

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Prepared 2 November 2012