Friday, November 12, 2010

Wholly, exclusively and necessarily incurred

It seems that Christina Hemming has decided that if she is going down for catnapping, she is determined to cause damage to her (current) husband, John Hemming, so is exhuming some of the bodies. The Times on Wednesday carried a three-quarter page report, sadly hidden behind a paywall, but I made the effort to actually buy a copy and here's a summary.

John claims that this is mostly based on an earlier posting of his own from May last year. It may also be worth repeating that John was not found to have any issues with his expenses as part of the Legg report in February this year. It is certainly worth remembering that John also has an extra-parliamentary income of over £200,000 a year (one of the highest in the House), meaning that his combined income is in excess of a poverty-busting quarter of a million quid before any expenses are taken into account (alongside his properties in Birmingham and London and the farmland in Devon). It can certainly be said that all the affairs in his life are complicated.

The article claims that John bought a two-bedroomed flat in Fletcher Buildings in Covent Garden in 1993 and paid off the mortgage on the property two weeks prior to his election in 2005. He also owns another flat in Brixton, which was initially rented out, but was subsequently occupied by his older daughter. Seven months after his election, he took out another mortgage from Coutts on the Covent Garden flat for £200,000, arranged by his wife Christina. The fees and legal costs for this mortgage were also passed on to the taxpayer, to the tune of £1500, including valuation and arrangement fees. This new mortgage was then used to pay off another mortgage on a property called Osmond House on the Alcester Road in Birmingham - a property well outside his constituency, but close to his Birmingham home. This mortgage was maintained for the next three years, until the start of 2009, when claim against the allowance ceased, but netted almost £30,000 in payments over those three years.

For clarity, the Additional Costs Allowance is scoped as follows, according to the 2005 Green Book (applicable to the remortgage in January 2006).

The additional costs allowance (ACA) reimburses Members of Parliament for expenses wholly, exclusively and necessarily incurred when staying overnight
away from their main UK residence (referred to below as their main home) for
the purpose of performing Parliamentary duties. This excludes expenses that
have been incurred for purely personal or political purposes.
That rubric is also reproduced in terms on the form (ACA2) that every MP had to sign to claim under the Additional Costs Allowance on a monthly basis in arrears. Examples of John's redacted forms are here.

Osmond House is home for a number of companies (defunct, according to the Times - and loss-making, according to John's under the John Hemming Trading banner and is also the home of Ernie Hendricks, a Liberal Democrat councillor in Moseley, who lives rent-free in the top-floor flat. Cllr Hendricks is one of five Liberal Democrat councillors apparently employed by John Hemming. The others are Cllr Carol Jones, Stechford & Yardley North, Cllr Emily Cox, also Moseley and Kings Heath, Cllr Neil Eustace, Stechford & Yardley North and Cllr Daphne Gaved, John's successor as councillor in South Yardley. The property is also the registered address of the Birmingham Liberal Democrat Group - which is increasingly resembling a wholly-owned subsidiary of John Hemming Trading. Cllr Cox has also lived in the the top-floor flat, but has since moved to a property bought for her by John Hemming - the father of her child and bringer of cats.

Mention is also made of the property at 1772 Coventry Road, which is used as a constituency headquarters and houses one individual, who was oddly named on the electoral roll a little while back as being resident at both 1772 and 1772a, a fact that can be reasonably ascribed to human error rather than anything genuinely sinister.

The Times claims that Mrs Hemming asked her husband to move out in September this year following the purchase of this property, a request she made as

a birthday present to herself
It is also reported that John Hemming had
previously replaced his wife as the company accountant with Cllr Cox
The article also mentions the curiosity that one of John's parliamentary staff, Tony Smith, is paid by Birmingham City Council and is allowed to lobby on the parliamentary estate on behalf of the City, something that is against the current ruling of the House of Commons Administration Committee and also against government policy - as Eric Pickles said
Taxpayer-funded lobbying and propaganda on the rates weakens our democracy... Local activism and localism don't need lobbyists. If local politicians want to change the way government operates, their council should send a letter or pick up the phone. Councillors can campaign for change at a personal or party political level, rather than throwing away other people's council tax on the corrosive and wasteful practice of government lobbying government
It should be pointed out that Birmingham has ten paid lobbyists in Parliament - we call them MPs. One of them is a current Secretary of State, no less and we had a succession of senior ministers during the Labour years, all close to the centre of government. 

EDIT: I actually now take the view that Tony's role in Westminster is rather different - he has a pass provided through John's office, but carries out a supportive role for Birmingham City Council. 

John stopped claiming for the Covent Garden flat in January 2009, apparently because he recognised that Britain was going through a recession - although his blog post at the time didn't mention this laudable self-restraint.

However, I have told the department of resources that I will make no further claims for a second home. That means also no claims for food as they go in as part of the second home claim. I went into politics to help others rather than to help myself to a cash cow. I haven't actually used the expenses system as a cash cow, but it is now tainted. There is no sense muddying the waters as to my motivations for about £10,000 a year
Coincidentally, this is around the time that it became apparent that the details of parliamentary expenses would have to be made public under a Freedom of Information Request.

John told The Times that he had to

'reorganise my finances because my income was going down. So I needed to raise cash to clear a debt and I got that agreed by Parliament, which is entirely within the rules.'
Just a reminder of the rules that applied at the time and of the statement that John personally signed whenever he claimed under the Additional Costs Allowance for:
expenses wholly, exclusively and necessarily incurred... for the purpose of performing Parliamentary duties. This excludes expenses that have been incurred for purely personal or political purposes.
John's defence, repeated in the Birmingham Post, is that
You have to look at whether it is a good deal for the taxpayer. Did it cost the taxpayer more than would otherwise have been the case? Look at how my expenses compared to other MPs in Birmingham.
He also claims that this was all approved by the parliamentary authorities at the time, which may be true, but it is a defence worn thin by all the other MPs who have buried their noses in the public trough and used parliamentary approval as a cover. I wrote earlier this week about some MPs being seriously out of touch with the reality of the public mood and it appears that we have another one with a tenuous grasp on reality. Will the public consider it appropriate for their MP to borrow money against a flat he already owned with the explicit intention of paying off a mortgage on another property unrelated to his parliamentary work? Will they consider it milking the cash cow or not?

In the Daily Mail today, he comments

It was cost-effective, because the alternative was for me to sell my Covent Garden flat to free up capital to pay the Birmingham mortgage and move into rented accommodation in London, which would have cost the public more

It was certainly cost-effective for him. The alternative might have been to sell the Alcester Road property and live in the Covent Garden flat - which would have cost the public nothing. Strangely, that thought doesn't seem to have entered his head.


Andy Howell said...

Tony Smith is Birmingham City Council's Officer in Birmingham. Hemming has just given him a pass for Westminster. On this (at least) you should not see anything sinister in this. Tony is a good comrade!

john said...

I personally did not benefit. The Constituents of Yardley benefited by the extra subsidy I put towards constituency activities.

This was explicitly cleared by the house officers and is in accordance with the 2004 Green Book which is on the website still.

PoliticalHack said...

I think I've been quite clear in rephrasing and adding to the story from the Times.

Surely, you should have applied the 2005 Green Book, which applied to the loan you took out?

john said...

It fits 2005 as well. This was all checked out directly with the authorities.

Other MPs simply pocketed the cash. I have recycled it into constituency support.