FactCheck: did McNulty break the rules?
Updated on 30 October 2009
Former minister Tony McNulty apologised in parliament after wrongly claiming £13,837 in expenses for a house in which his parents lived. But does his claim to have obeyed the rules, as they applied at the time, stand up?
The claim
"If you read all of the report in detail you'd know that the commissioner says, quite fairly, that within the advice and the rules that pertained at the time, I was within the rules."
Tony McNulty MP, BBC Radio 4 World at One, 29 October 2009
The background
Labour MP Tony McNulty fell deep into the expenses fire in March, when it was revealed that he had been claiming taxpayers' money for a second home in his Harrow constituency in which his parents lived rent-free. The former minister's main home, where he lived with his wife, was nine miles away in west London.
Yesterday he made an apology in the House of Commons, and promised to pay back more than £13,800, following a report by parliamentary watchdog the Commons standards and privileges committee.
The former minister said he accepted the report, but when interviewed he seemed to deny that he had broken the rules.
How so? "If you read all of the report in detail you'd know that the commissioner says, quite fairly, that within the advice and the rules that pertained at the time, I was within the rules," he said.
It was only if you retrospectively changed your mind about advice he had been given, he said, that he would be caught out, although he accepted the committee's findings.
MPs have reacted angrily to the retrospective demands from the separate auditor, Sir Thomas Legg, that they pay back claims for gardening and claiming which he held to be excessive.
So what did the parliamentary watchdog say about McNulty's case? Has the MP simply been tarred by a retrospective brush?
The analysis
First, the rules. According to the Green Book, which sets out the rules on what MPs can and can't claim, all expenses claimed must be "wholly, exclusively and necessarily incurred on parliamentary duties".
This is something highlighted in the ruling by the parliamentary commissioner for standards, John Lyon, who investigated McNulty's case.
The commissioner found that McNulty was entitled to have a second home in his Harrow constituency, although it was close to his main home, and to claim expenses for it. The amount McNulty claimed was reasonable, and "necessarily" incurred - in fact, McNulty often claimed less than half of the amount he was entitled to under the second home's allowance.
But the commissioner took issue with the way in which McNulty's parents' living costs had been excluded - or not - from the claims.
MPs should only claim for their own living costs, rather than those of their family.
McNulty claimed for mortgage interest from 2004-9, he claimed for the full cost of the council tax (although had he lived alone, he could have been entitled to a 25 per cent discount) until 2008, and claimed for some other bills from 2005-6. This added up to between two-thirds and 90 per cent of the yearly total costs of running his home between 2004 and 2008 (the period for which full receipts are available).
The committee found he should have only claimed for half, as there were two households living there (him, and his parents) - hence the £13,800 repayments.
But McNulty pointed out to the committee that he had sought advice from the fees office in 1998 or 1999 (two years before he started to claim for the Harrow house).
Here's where it gets complicated - the fees office also said that McNulty should have claimed only for his proportion of the living costs.
However, they exclude mortgage interest (the biggest part of McNulty's claim) in the calculation of his living costs - on the basis that it's a fixed cost regardless of how many people happen to live in the property.
The commissioner disagrees with this interpretation of the rule - he reckons that mortgage interest counts as a living cost; had, for example, McNulty charged his parents the market rent, he would have been able to reduce the cost of his mortgage interest claims accordingly.
So here's where McNulty's "retrospective" defence comes in - he says the commissioner is now contradicting advice he was given 10 years ago.
Although McNulty only checked things out with the Fees Office once, 10 years ago, the report does accept that, had he sought advice again, he would have been told the same thing.
But in the watchdog's eyes, this advice still doesn't trump the rules. The report points out that the fees office "does not make the rules; it interprets and administers them: members remain responsible for ensuring that their conduct is at all times within the rules".
Regardless of the disagreement over exactly how his parents' claims should have been offset, the commissioner found the whole thing was done far too informally. McNulty should have set out exactly how he was reducing his claims in order to discount his parents' costs.
"By not fully and transparently excluding his parents' living costs from his claims, I conclude that Mr McNulty was in breach of the rules of the House by claiming for the living costs of someone other than himself," said the commissioner.
He also found McNulty to have broken a rule introduced in July 2006, which required MPs to avoid any arrangement which could give rise to a reasonable accusation that "they or someone close to them was receiving an immediate benefit or subsidy from public funds".
He found it "incontrovertible" that McNulty, via his parents, had received a public subsidy in the form of a home where they did not pay the market rate.
Retrospective? This was implemented while McNulty was still claiming (although not right at the start). But the Commissioner also argues that it's a tightening up of the spirit of the previous rules rather than an entirely new creation, so should not have come as a shock.
Finally, during the investigation it transpired that McNulty had accidentally over-claimed for council tax and mortgage interest to the tune of £3,000, which he repaid straight away.
The verdict
The commissioner does conclude that McNulty breached the rules.
He found that not all of McNulty's second home claims were "wholly" and "exclusively" incurred for his parliamentary duties - part of a guiding principle in the MPs' rule book, although admittedly one that would seem to have been tested to the full by the likes of duck houses and moat-cleaning.
He also found McNulty had breached a rule formalised in 2006, which said that MPs and those close to them should not be seen to be getting a public benefit or subsidy. The commissioner found this impossible to square up with the fact that McNulty's parents were living rent-free with him.
The commissioner takes a different view, however, from advice McNulty was given in the past by the fees office about whether he should treat mortgage interest payments as a fixed cost he could claim in full, or something he should split with his parents. This is significant in deciding how much McNulty should have claimed.
But this mitigating factor doesn't seem to undo the commissioner's conclusion that McNulty breached the rules, albeit unintentionally, by not setting out completely transparently how much he divided his living costs claims between himself and his parents.
FactCheck rating: 3
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The sources
Standards and privileges committee report
McNulty on World at One
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