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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How should Labour's disgruntled moderates behave?

The price for loyalty looks like being long-term opposition. Sometimes exiting can be brave.

When Albert O. Hirschman was writing Exit, Voice, Loyalty: Responses to decline in Firms, Organizations, and States he wasn’t thinking of the British Labour Party.  That doesn’t mean, though, that one of the world’s seminal applications of economics to politics can’t help us clarify the options open to the 80 to 90 per cent of Labour MPs who, after another week of utter chaos, are in total despair at what’s happening under Jeremy Corbyn.

According to Hirschman, people in their situation have essentially three choices – all of which stand some chance, although there are no guarantees, of turning things around sooner or later.

The first option is simply to get the hell out: exit, after all, can send a pretty powerful, market-style signal to those at the top that things are going wrong and that something has to change.

The second option is to speak up and shout out: if the leadership’s not listening then complaining loudly might mean they get the message.

The third option is to sit tight and shut up, believing that if the boat isn’t rocked it will somehow eventually make it safely to port.

Most Labour MPs have so far plumped for the third course of action.  They’ve battened down the hatches and are waiting for the storm to pass.  In some ways, that makes sense.  For one thing, Labour’s rules and Corbyn’s famous ‘mandate’ make him difficult to dislodge, and anyone seen to move against him risks deselection by angry activists.

For another, there will be a reckoning – a general election defeat so bad that it will be difficult even for diehards to deny there’s a problem: maybe Labour has to do ‘déjà vu all over again’ and lose like it did in 1983 in order to come to its senses. The problem, however, is that this scenario could still see it stuck in opposition for at least a decade. And that’s presuming that the left hasn’t so effectively consolidated its grip on the party that it can’t get out from under.

That’s presumably why a handful of Labour MPs have gone for option two – voice.  Michael Dugher, John Woodcock, Kevan Jones, Wes Streeting and, of course, John Mann have made it pretty clear they think the whole thing’s a mess and that something – ideally Jeremy Corbyn and those around him – has to give.  They’re joined by others – most recently Stephen Kinnock, who’s talked about the party having to take ‘remedial action’ if its performance in local elections turns out to be as woeful as some are suggesting.  And then of course there are potential leadership challengers making none-too-coded keynote speeches and public appearances (both virtual and real), as well as a whole host of back and frontbenchers prepared to criticise Corbyn and those around him, but only off the record.

So far, however, we’ve seen no-one prepared to take the exit option – or at least to go the whole hog. Admittedly, some, like Emma Reynolds, Chuka Umunna, Dan Jarvis, Yvette Cooper, and Rachel Reeves, have gone halfway by pointedly refusing to serve in Corbyn’s Shadow Cabinet.  But nobody has so far declared their intention to leave politics altogether or to quit the party, either to become an independent or to try to set up something else.

The latter is easily dismissed as a pipe-dream, especially in the light of what happened when Labour moderates tried to do it with the SDP in the eighties.  But maybe it’s time to think again.  After all, in order to refuse even to contemplate it you have to believe that the pendulum will naturally swing back to Labour at a time when, all over Europe, the centre-left looks like being left behind by the march of time and when, in the UK, there seems precious little chance of a now shrunken, predominantly public-sector union movement urging the party back to the centre ground in the same way that its more powerful predecessors did back in the fifties and the late-eighties and nineties. 

Maybe it’s also worth wondering whether those Labour MPs who left for the SDP could and should have done things differently.  Instead of simply jumping ship in relatively small numbers and then staying in parliament, something much bolder and much more dramatic is needed.  What if over one hundred current Labour MPs simultaneously declared they were setting up ‘Real Labour’?  What if they simultaneously resigned from the Commons and then simultaneously fought scores of by-elections under that banner?

To many, even to ask the question is to answer it. The obstacles – political, procedural, and financial – are formidable and forbidding.  The risks are huge and the pay-off massively uncertain.  Indeed, the whole idea can be swiftly written off as a thought-experiment explicitly designed to demonstrate that nothing like it will ever come to pass.

On the other hand, Labour MPs, whether we use Hirschman’s three-way schema or not, are fast running out of options.  The price for loyalty looks like being long-term opposition.  Voice can only do so much when those you’re complaining about seem – in both senses of the word – immovable.  Exit, of course, can easily be made to seem like the coward’s way out. Sometimes, however, it really is the bravest and the best thing to do.

Tim Bale is professor of politics at QMUL. His latest book, Five Year Mission, chronicles Ed Miliband's leadership of the Labour party.