Exclusive: Lord Paul responds to official report recommending his suspension

“I am disappointed that I seem to have been treated more harshly than others.”

For journalists, the parliamentary expenses scandal is the gift that never stops giving. Yesterday's Sunday papers – chief among them the Sunday Times and the Sunday Telegraph – led with claims that three peers face suspension from the House of Lords over their expenses claims: Baroness Uddin, Lord Bhatia and Lord Paul.

The report of the House of Lords committee for privileges and conduct to which the Sunday papers referred to has been published today, and it does indeed recommend suspending the three aforementioned peers from "service of the House".

In reference to Lord Paul, the well-known businessman, deputy Lords speaker and Labour Party donor, the committee says:

27. We do not feel justified in finding, on the balance of probabilities, that Lord Paul acted dishonestly or in bad faith. However, his actions were utterly unreasonable, and demonstrated gross irresponsibility and negligence. They therefore render him liable to sanction by the House.

28. In mitigation, Lord Paul has apologised and repaid the money wrongly claimed.

29. We recommend that Lord Paul be suspended from the service of the House for four months, starting on the date on which any suspension motion is agreed by the House.

In the past few minutes, I have been speaking to Lord Paul to get his response to the committee's conclusions. He said:

I welcome the publication of the report from the House of Lords committee for privileges and conduct. First and foremost, my honesty and integrity have been upheld. I have never tried to claim anything which I did not believe I was honestly entitled to claim at the time. I am pleased that the committee for privileges and conduct has come to the same conclusion and has found that my actions throughout the investigation have been transparent and consistent and that the claims were honestly made and not in bad faith.

It is worth remembering that I requested the Clerk of the Parliaments, Michael Pownall, to conduct an investigation into my expenses on 12 October 2009 – the day after the Sunday Times first published its allegations against me. I also voluntarily and immediately repaid the full amounts in question, about £40,000, which I had claimed from January 2005 to June 2006. In fact, I voluntarily repaid a greater sum than the House could have required me to pay, both in respect of night subsistence and in respect of mileage allowance. There is no question about the propriety of any other claim made by me during the 14-year period that I have been a member of the House of Lords. It should also be remembered that, back in March, the Metropolitan Police decided there was no case for me to answer.

But does he deny that he registered an Oxfordshire flat as his main home, despite never spending a single night there, while claiming money in overnight expenses for a London property?

I do not dispute the basic facts. I made claims which, with the benefit of hindsight, I should not have made. I may have been negligent, as the committee has said, and the commitee has accepted my apology. Before this matter was raised by a Sunday newspaper late last year, however, there was no definition in the House of Lords of residence and a large number of peers therefore fell into error when interpreting the meaning of residence in the rules. There was no guidance on the meaning of "main residence" until March 2010, and it was finally clarified in July 2010 – that is, ten months after the allegations first appeared in the press. During the time period in question, 2005/2006, there was no definition of "main residence", nor was there even guidance.

I do not believe that either the subcommittee or the full committee can in effect apply the perspectives and standards of 2010 to actions and rules operating in 2005. I believe that the provisions which applied then on the designation of principal residence were wholly unclear. I believe that the fact that they have been either amplified or modified since then, and finally dispensed with by the House, strongly underlines my position. Given the lack of clarity in the rules which applied at that point, I do not believe that my own conduct in any way merits the decisions which the subcommittee and now the full committee have reached.

He has a point. And guess what? The new rules on allowances, agreed by the Lords authorities earlier this year, and backed by the coalition government and the Labour Party, might make things worse.

As the Sunday Telegraph's Patrick Hennessy noted yesterday:

The new regime will allow all peers to claim a lump payment of £300 a day for "clocking in" at parliament. Critics have claimed it could be open to abuse as it offers no safeguards against peers "signing in and sloping off". Under the new scheme, which is based on proposals made by the Senior Salaries Review Body last November, no receipts, or proof of a second home or hotel stay, will be required to claim the payment.

This is madness. Have officials in the House of Lords lost their minds?

And on what grounds have they gone after Paul, Uddin and Bhatia and ignored or excused the false/inaccurate/dodgy claims of dozens of other peers uncovered in the press? From the Sunday Times, in May 2009:

– Baroness Thornton, a government minister, claimed up to £22,000 a year in expenses by saying that her mother's home in Yorkshire was her main home.

– Lord Ryder, a former acting chairman of the BBC, claimed more than £100,000 by saying that a converted stable on his parents' country estate was his main home.

Then there is Lord Clarke, the Labour peer and former chairman of the party, who admitted that he "fiddled" his expenses to make up for not being paid a salary and claimed for overnight stays in London when, in fact, he drove home. His punishment? From the privileges committee report in March:

Accordingly, having taken into account his repayment of £9,190 to the House, and his full co-operation with the investigation, we recommend that Lord Clarke make a personal statement of apology to the House, before the end of the present session of parliament, to apologise without reservation for his misuse of the scheme.

So Clarke got off with just an apology. Isn't that odd? What about Lord Colywn, the Tory peer who claimed £170,000 by designating a Cotswolds property as his main home? Here is the bizarre verdict of Michael Pownall, the Clerk of the Parliaments (from February):

He has assured me in writing that his claims are an accurate record . . . he has also assured me that he lives predominantly in Gloucestershire when the House is not sitting . . . Given Lord Colwyn's assurances, I consider that his designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against him.

Great. Fantastic. That's OK, then. He "assured" the Clerk – and got off without a punishment. The whole process seems totally arbitrary and random. Unsurprisingly, perhaps, Lord Paul agrees:

I am disappointed that I seem to have been treated more harshly than others. Some of those peers accused of making incorrect claims were dealt with by the Clerk of the Parliaments, some by the privileges committee. Some have been subject to an inquiry, some have not; some have apologised, some have not; some have voluntarily repaid the sums incorrectly claimed, some have been asked to repay those sums; now, for the first time, three peers have been suspended while others have escaped suspension.

Despite the hurt that this has caused me, I accept the committee's decision in the best traditions of parliamentary democracy.

On a side note, some have suggested to me that part of the reason Paul has been the subject of such a severe sanction is that the five-member subcommittee on Lords interests, which investigated the three peers and recommended suspension, included Derry Irvine, the ardent Blairite. Paul is a prominent Brownite; in his own words, he has been a "steadfast friend and supporter of Gordon Brown whom I believe was a great prime minister".

A source present at Lord Paul's testimony to the House of Lords subcommittee in June tells me that Irvine's face blackened when Paul suggested he was being targeted by that committee because of his links to the former prime minister.

As Blair's Lord Chancellor, Irvine is (in)famous for having spent £650,000 of public funds on redecorating and refurbishing his official apartment in the House of Lords, including £59,000 on wallpaper. He refused to apologise for his acts at the time and described the spending as a "noble cause". That he now sits in judgement on the expenses claims of his fellow peers is, ahem, ironic.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Will Euroscepticism prove an unbeatable advantage in the Conservative leadership race?

Conservative members who are eager for Brexit are still searching for a heavyweight champion - and they could yet inherit the earth.

Put your money on Liam Fox? The former Defence Secretary has been given a boost by the news that ConservativeHome’s rolling survey of party members preferences for the next Conservative leader. Jeremy Wilson at BusinessInsider and James Millar at the Sunday Post have both tipped Fox for the top job.

Are they right? The expectation among Conservative MPs is that there will be several candidates from the Tory right: Dominic Raab, Priti Patel and potentially Owen Paterson could all be candidates, while Boris Johnson, in the words of one: “rides both horses – is he the candidate of the left, of the right, or both?”

MPs will whittle down the field of candidates to a top two, who will then be voted on by the membership.  (As Graham Brady, chair of the 1922 Committee, notes in his interview with my colleague George Eaton, Conservative MPs could choose to offer a wider field if they so desired, but would be unlikely to surrender more power to party activists.)

The extreme likelihood is that that contest will be between two candidates: George Osborne and not-George Osborne.  “We know that the Chancellor has a bye to the final,” one minister observes, “But once you’re in the final – well, then it’s anyone’s game.”

Could “not-George Osborne” be Liam Fox? Well, the difficulty, as one MP observes, is we don’t really know what the Conservative leadership election is about:

“We don’t even know what the questions are to which the candidates will attempt to present themselves as the answer. Usually, that question would be: who can win us the election? But now that Labour have Corbyn, that question is taken care of.”

So what’s the question that MPs will be asking? We simply don’t know – and it may be that they come to a very different conclusion to their members, just as in 2001, when Ken Clarke won among MPs – before being defeated in a landslide by Conservative activists.

Much depends not only on the outcome of the European referendum, but also on its conduct. If the contest is particularly bruising, it may be that MPs are looking for a candidate who will “heal and settle”, in the words of one. That would disadvantage Fox, who will likely be a combative presence in the European referendum, and could benefit Boris Johnson, who, as one MP put it, “rides both horses” and will be less intimately linked with the referendum and its outcome than Osborne.

But equally, it could be that Euroscepticism proves to be a less powerful card than we currently expect. Ignoring the not inconsiderable organisational hurdles that have to be cleared to beat Theresa May, Boris Johnson, and potentially any or all of the “next generation” of Sajid Javid, Nicky Morgan or Stephen Crabb, we simply don’t know what the reaction of Conservative members to the In-Out referendum will be.

Firstly, there’s a non-trivial possibility that Leave could still win, despite its difficulties at centre-forward. The incentive to “reward” an Outer will be smaller. But if Britain votes to Remain – and if that vote is seen by Conservative members as the result of “dirty tricks” by the Conservative leadership – it could be that many members, far from sticking around for another three to four years to vote in the election, simply decide to leave. The last time that Cameron went against the dearest instincts of many of his party grassroots, the result was victory for the Prime Minister – and an activist base that, as the result of defections to Ukip and cancelled membership fees, is more socially liberal and more sympathetic to Cameron than it was before. Don’t forget that, for all the worry about “entryism” in the Labour leadership, it was “exitism” – of Labour members who supported David Miliband and liked the New Labour years  - that shifted that party towards Jeremy Corbyn.

It could be that if – as Brady predicts in this week’s New Statesman – the final two is an Inner and an Outer, the Eurosceptic candidate finds that the members who might have backed them are simply no longer around.

It comes back to the biggest known unknown in the race to succeed Cameron: Conservative members. For the first time in British political history, a Prime Minister will be chosen, not by MPs with an electoral mandate of their own or by voters at a general election but by an entirelyself-selecting group: party members. And we simply don't know enough about what they feel - yet. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.