Shadow chancellor denies any wrongdoing as investigation into mortgage claims begins

The shadow chancellor George Osborne has denied any wrongdoing after an inquiry into his expenses claims was launched by the Parliamentary Standards Commissioner.

The investigation was launched after a complaint from by his constituency's Labour Party chairman. Osborne is alleged to have claimed for a mortgage worth £5,000 more than the price of his house. He also stands accused of “flipping” his second home to avoid paying capital gains tax.

Last night, Laurie Burton, the chair of the local Labour party in Osborne's Tatton constituency, who made the complaint, said that he believed Osborne had “manipulated the rules to his own advantage”.

He added: “I share the outrage and anger of the great majority of people in this country, of all political persuasions, who have seen what has gone on in Parliament, who don't like what they see and like even less the fact that some MPs just refuse to accept what they have done and refuse to pay any money back.”

In a statement issued after the inquiry was launched, a spokesman for Osborne said: “This is a political complaint by the local Labour party. We note that one has been made against Alistair Darling as well. George is relaxed about it and has always been very open in answering questions about his expenses.”
He added that Osborne had never “flipped” his home for personal gain and insisted that his actions had always aimed to minimise the costs to the taxpayer.

The spokesman said: “When George Osborne became an MP in 2001 he sat down with a representative from the fees office. He explained that Harrop Fold Farm in Cheshire was his second home but that he had increased the interest-only mortgage on his existing home in London to cover the cost of purchasing and moving into it.

“The representative of the fees office advised him to claim ACA [the additional costs allowance] against that mortgage until he could change the mortgage arrangements. In 2003, when he was able to change the mortgage arrangement without incurring penalty charges, he secured a mortgage against Harrop Fold Farm – and from then on claimed ACA against it.

“Since he became an MP, George Osborne has always made it clear to the House of Commons authorities and the Inland Revenue that he regarded his home in Cheshire as his second home.”

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