John Baron MP: MEC Report

In his review of MP’s second home allowances, Sir Thomas Legg questioned John Baron’s extension of his mortgage in June 2004 by £34,035. He suggested John should repay £8821.10 – this representing the added mortgage interest costs since then. John appealed against this decision to Sir Paul Kennedy but this was turned down.

John’s reasons for contesting these findings were as follows:-

• There has been no financial benefit to John. The arrangement with the Parliamentary Fees Office was that he increased his original mortgage in order to personally fund many expenses and allowances to which he was entitled to claim without receipts. For example, in eight years as the MP John has never claimed the £250 unreceipted monthly petty cash allowance available to MPs to cover their incidental costs, despite his costs often exceeding this figure.
• The expenses system lacked transparency and was often confusing. John therefore sought advice from the Parliamentary Fees Office as was recommended. The arrangement was agreed with the Fees Office at the time and was regularly confirmed since. John wanted to simplify his expenses and minimise expenses claimed without receipt. This arrangement achieved both objectives. In particular, a significantly higher proportion of expenses were receipted as the Fees Office had copies of annual mortgage interest statements.

John showed he sought advice at the time as the rules were confusing, and that this arrangement was agreed with the Parliamentary Fees Office as a result of that advice and confirmed regularly since. Perhaps more importantly, he showed there was no financial benefit to him as he did not claim many expenses and allowances to which he was entitled. But these facts were not considered because the Fees Office and John did not pick up on new written guidance.

Increases in mortgages were allowable where the increased loan was obtained for the improvement of property. But because John didn’t use it to renovate or extend his house – which would have increased its value – it has not been allowed.

John appealed because guidance stated Members should seek advice and the arrangement came about as a result of that advice, because of the retrospective changes to the arrangement, and because John did not financially benefit. However, this is not a courtroom but a process covered by Parliamentary privilege, which means it cannot be challenged legally. John has therefore repaid the £8821.10.