Privileges and Conduct Committee: Fourth Report

Lord Brabazon of Tara Excerpts

Thursday 21st October 2010 Lords Chamber

Moved by

[The Chairman of Committees]

That the Report from the Select Committee on the Conduct of Lord Paul (4th Report, HL Paper 37) be agreed to.

[The Chairman of Committees (Lord Brabazon of Tara)]

My Lords, I beg to move that the fourth report from the Committee for Privileges and Conduct be agreed to.

The House is being invited today to agree three reports from the Committee for Privileges and Conduct and three consequential suspension Motions. We are debating these reports together, which I hope will be convenient for the House, but I should emphasise that these are three separate reports, relating to three separate cases, and the Motions are entirely free-standing. On the other hand, the three suspension Motions are consequential upon agreement to the relevant reports, as they simply implement the committee’s main recommendation in each case.

This is a difficult day for the House, and the task before us in considering these Motions is not one that I—or, I am sure, any noble Lord—will relish. It is made no easier by the fact that the contents of the reports now before your Lordships’ House were leaked to the media over the weekend in advance of publication. I can assure the House that we took all reasonable steps to prevent any leak, and I deeply regret that there was a leak, particularly in so far as it caused any distress to the three noble Lords who are the subjects of the reports.

The three reports all relate to claims for expenses made under the Members’ reimbursement scheme. In each case the Member concerned designated one or more properties outside Greater London as his or her main residence and, as a result, claimed money under the night subsistence and travel expenses headings in the scheme. The key question in each case, which both the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct have considered in turn, is whether the Member correctly designated the property or properties in question as his or her main residence.

I wish at this point to pay tribute to the members and staff of the Sub-Committee on Lords’ Conduct. They have taken on a vital, hugely difficult and, frankly, painful task. They have done their job with efficiency, rigour and fairness. I put on the record my personal thanks to the chairman, the noble Baroness, Lady Manningham-Buller, and her colleagues on the sub-committee.

In the three cases before us, the sub-committee concluded, in each case, that the noble Lord concerned had wrongly designated the property in question as his or her main residence, and had wrongly claimed sums varying from £27,000, in the case of the noble Lord, Lord Bhatia, to £125,000, in the case of the noble Baroness, Lady Uddin. In each case the sub-committee concluded that the noble Lord concerned had made these claims in bad faith. All three noble Lords appealed against these findings to the Committee for Privileges and Conduct, which I chair. We considered the appeals on Monday 11 October. Our reports speak for themselves but it may be useful if I briefly summarise our most important conclusions, first on points of principle and finally on the specifics of each of the three cases.

First, on the points of principle, we accept entirely the sub-committee’s conclusion that in each case money was wrongly claimed, and its calculations as to the amount of money wrongly claimed. However, we regard the repayment of this money as a matter of restitution rather than sanction, and therefore concluded that the length of suspension should not be linked to repayment. Secondly, the appeals contained a number of complaints as to the procedural fairness of the investigations. Although the sub-committee acted entirely properly throughout, and in full accordance with the procedure agreed by the House, we accepted that the procedure itself presents some difficulties.

As we say in our report on the noble Baroness, Lady Uddin, there is a tension between ensuring that noble Lords under investigation enjoy appropriate procedural safeguards and preserving the informal and parliamentary nature of such proceedings. I believe that the House would not wish to turn internal disciplinary hearings into full-blown, adversarial court proceedings, with prosecution and defence lawyers and the cross-examination of witnesses. In fact, the House has explicitly agreed, more than once, that proceedings should be kept relatively informal. On the other hand, we need to ensure, in accordance with the principles of natural justice and fairness, that all evidence is properly tested and that no noble Lord is found guilty on the basis of hearsay.

I should at this point remind noble Lords that these three investigations were all initiated in the previous Parliament, and so were conducted in accordance with the procedures agreed in December 2008. They are the last investigations to be conducted under these procedures. We now have a new Code of Conduct and a new set of procedures. The independent Commissioner for Standards, Mr Paul Kernaghan, will conduct any future investigations and present his findings to the sub-committee, which will, where appropriate, recommend a sanction to the main committee. This is, I believe, a better and clearer procedure. It separates the investigative and sentencing functions, and allows for an appeal against both elements to the main committee. The commissioner will have considerable freedom of action, and will be able to test all relevant evidence thoroughly. At the same time, I am sure that the sub-committee, along with the commissioner, will wish to reflect on the findings in these reports in the coming weeks, and consider whether our procedures could be improved still further.

I now turn to the three cases. In each case we found that the so-called “main residences” designated by the noble Lords were not appropriately designated. They were properties outside London, designated as main residences by noble Lords who, before, during and after the periods in question, resided substantially inside London. They did not reflect any natural interpretation of the term “main residence”. No entitlement to public money should have been claimed on such a basis.

In the case of the noble Lord, Lord Paul, we disagreed, on the balance of probabilities, with the sub-committee’s conclusion that he had acted in bad faith in wrongly claiming amounts under the expenses scheme. However, as paragraph 8 of our report states, noble Lords have a duty to take reasonable steps to ensure that any money claimed from public funds is properly payable. We consider that the noble Lord, Lord Paul, was grossly irresponsible and negligent in this regard. For that reason, and bearing in mind that he repaid a total of £42,000 to the House at the start of the investigation, we recommend that he be suspended from the service of the House for four months.

In the case of the noble Lord, Lord Bhatia, we dismissed his appeal and upheld the sub-committee’s finding that he wrongly claimed over £27,000, and that in so doing he did not act in good faith. In judging the relative severity of sanction in the noble Lord’s case, we took into account the relatively short period within which he made his claims, and the fact that, after receiving the sub-committee’s report and shortly before the committee met, he repaid the money to the House. However, he has not apologised or acknowledged that he acted wrongly. We therefore recommend that he be suspended from the service of the House for eight months.

Finally, I turn to the sixth report, on the conduct of the noble Baroness, Lady Uddin. I have already indicated our concerns over the status of untested third-party evidence, such as the statements made to the police by her neighbours in Maidstone. We decided, after careful consideration and without intending any reflection on the quality of the evidence, that it would not be fair in her case to attach any weight to it. We then considered the noble Baroness’s own evidence, her letters, written statements, oral evidence and her appeal. It was clear to us that she had not advanced any reasonable interpretation of the term “main residence”. As the sub-committee points out, in so far as she attempted to offer an interpretation, it was one in which the word “main” had no meaning. She chose, over a period of years, to designate as main residences properties which she repeatedly described as “bolt-holes”. A bolt-hole is not a main residence, and the noble Baroness’s designations were wholly unreasonable. We therefore upheld the sub-committee’s finding that she wrongly claimed just over £125,000 over a four-year period, and that she should repay this money to the House. It will be for the Clerk of the Parliaments to arrange repayment.

We further found that in making these claims, the noble Baroness, Lady Uddin, did not act in good faith. She has not acknowledged that she claimed the money wrongly; nor has she apologised in terms. In view of the length of time over which these claims were made, and the sums involved, we recommend that she be suspended from the service of the House for the remainder of the current Session of Parliament—in other words, until Easter 2012.

In conclusion, we cannot ignore what has happened in these cases. It is clear that there was abuse of the Members’ reimbursement scheme and that the House has a duty to act in those cases where such abuse occurred. I therefore commend these three reports to the House.

[The Chancellor of the Duchy of Lancaster (Lord Strathclyde)]

My Lords, I support the Motion in the name of the Chairman of Committees. As the noble Lord said, we find ourselves on an extremely difficult and sad day for this House. The allegations made against the three Members of this House were serious, and the findings of the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct are serious. Their recommendations and the reports speak for themselves.

I join the noble Lord, Lord Brabazon of Tara, in expressing gratitude to the members of the Sub-Committee on Lords’ Conduct, chaired by the noble Baroness, Lady Manningham-Buller, for the thoroughness with which they conducted their investigations. I should also like to express my thanks to the Clerks of the House for the exemplary service given to the sub-committee and to the Committee for Privileges and Conduct.

As a member of the Privileges and Conduct Committee, I believe that all three Peers concerned fell short of the standard of conduct that the House and the public are entitled to expect, and we must as a House act decisively. The public expect us to react with firmness and unity to demonstrate our abhorrence at wrongdoing.

The one light in this sorry situation is that the House has already taken decisive action to reform an outdated system of expenses. As from the start of October, we introduced a new transparent system of daily allowance based on attendance. I firmly hope that, as a result, this will be the last time that we as a House find ourselves in this position.

The committee’s findings are disturbing and the conclusions reached are grave, but they are, in my judgment, fair and just. I commend the reports to the House and hope that noble Lords on all sides will join me in supporting the Motions before us.

--- Later in debate ---

[Baroness Flather]

My Lords, I, too, want to say a few words, but they are rather different from those of the noble Lord, Lord Alli. This is a very sad day for me personally, because the three Peers are all Asians. When you are a member of a minority and you read in the press that three members of the same minority have been found to have cheated on their expenses, it is hard to bear. I do not say this to suggest that the committee and sub-committee behaved in any way incorrectly; I do not mean that. I have looked at the reports and I have no complaint to make.

What I want to say is how distressing it is for me personally to find the 80th richest man, the noble Lord, Lord Paul, saying that he did not understand what “main” and “residence” meant. When I made my submission to the SSRB, I said that perhaps he did not understand the English language and the meaning of “main” and “residence”. Those words are fairly straightforward; we all know what they mean. If we do not, I suggest that we should not be sitting in this Chamber, as all the proceedings are conducted in the English language.

The noble Lord, Lord Alli, says that the noble Baroness, Lady Uddin, has been treated badly and that things have not been looked at properly. As far as I remember, the Chairman of Committees said that she had herself admitted that the two places that she called her main residence were bolt-holes. The basis on which the decision was taken was possibly what she herself admitted about that.

We ought to let this matter rest. I think that it is very sad. Frankly, I do not have any sympathy for the two very rich gentlemen, the noble Lords, Lord Bhatia and Lord Paul. I do have sympathy for the noble Baroness, Lady Uddin, but this is how things have come out. I have looked at the reports fairly carefully. They are clear and readable and they answer nearly all the questions for me.

We call ourselves “noble Lords”. When I came here in 1990, the behaviour of Members of the House of Lords was expected to be above this kind of thing; we were not expected to do this sort of thing. I remember clearly that, if I did not understand anything, I went to the finance department or to the clerks to the Parliament and asked them what I should do. They were always available to us to give advice. If we are in doubt, clearly we should take advice. We should not just carry on and say that we did not understand. I do not accept that someone cannot understand that, if they never stay somewhere, that place is not their main residence.

I am disappointed and distressed and I am sad that this involves three Asian Peers. The noble Lord, Lord Paul, said something about Indian culture. I do not know which Indian culture he was speaking of; I do not know of that culture. The only Indian culture that I know of in this regard is buying honours, which certainly is Indian culture. I hope that it does not apply to him.

[The Chairman of Committees]

My Lords, the noble Lord, Lord Alli, asked me a number of questions, to which I hope I can reply and give him and the House some assistance. He asked whether the findings of the review would be published. Indeed they will be. Any changes to the procedure that were agreed by the Committee for Privileges and Conduct would of course require a report to the House and the agreement of the House. I think that that answers that point. He also referred to the letter in the Uddin report from the noble Baroness, Lady McDonagh. I refer him to the letter that followed from the noble Baroness, Lady Manningham-Buller, which is on pages 216 and 217 of the report. I and the other members of the Privileges and Conduct Committee were satisfied by that letter.

The main question raised by the noble Lord, Lord Alli, was why these three Peers were referred to the sub-committee for investigation whereas most other Peers facing allegations of wrongdoing were cleared by the Clerk of the Parliaments. Under the procedure agreed by the House in 2008, the Clerk of the Parliaments investigated complaints about alleged abuses of the system of financial support, resolving them himself where possible. He was able to do so in the vast majority of cases. However, the House also agreed that he could request the Sub-Committee on Lords’ Conduct to assist him in investigating a complex or serious complaint. The Clerk of the Parliaments took the view that cases that had been subject to formal police investigation were, by definition, of a serious nature. This is why he referred the cases of the noble Lord, Lord Paul, and the noble Baroness, Lady Uddin, to the sub-committee. In addition, the House Committee in January discussed the extent to which the Clerk of the Parliaments in conducting these investigations should rely on written assurances from Members. The committee agreed that he would be,

“justified in relying on explicit written assurances”.

In the case of the noble Lord, Lord Bhatia, no such written assurances were provided, and the Clerk was therefore unable to reach a conclusion on the case. He therefore had no option but to refer the case to the sub-committee. I can give the noble Lord an absolute assurance that it was not in the least bit because the three Peers were Asians. I do not think there is anyone on the committee or the sub-committee who would not endorse that completely. I hope that helps the noble Lord, Lord Alli, on the points that he made.

Motion agreed.