HOUSE OF LORDS Committee for Privileges and Conduct 5th Report of Session 2010–11

The Conduct of Lord Bhatia

Ordered to be printed 14 October 2010

Published by the Authority of the House of Lords London : The Stationery Office Limited £price

HL Paper 38

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The Committee for Privileges and Conduct
The Committee for Privileges and Conduct is appointed each session by the House to consider questions regarding its privileges and claims of peerage and precedence and to oversee the operation of the Code of Conduct. Detailed consideration of matters relating to the Code of Conduct is undertaken by the Sub-Committee on Lords’ Conduct.

Current Membership
The Members of the Committee for Privileges and Conduct are: Baroness Anelay of St Johns Lord Bassam of Brighton Lord Brabazon of Tara (Chairman) Lord Brooke of Sutton Mandeville Baroness D’Souza Lord Eames Lord Graham of Edmonton Lord Howe of Aberavon Lord Irvine of Lairg Lord Mackay of Clashfern Lord McNally Baroness Manningham-Buller Baroness Royall of Blaisdon Lord Scott of Foscote Lord Shutt of Greetland Lord Strathclyde The Members of the Sub-Committee on Lords’ Conduct are: Lord Cope of Berkeley Lord Dholakia Lord Irvine of Lairg Baroness Manningham-Buller (Chairman) Baroness O’Neill of Bengarve The Code of Conduct and the up-to-date Register of Lords’ Interests are on the Internet at http://www.publications.parliament.uk/pa/ld/ldreg.htm.

General Information
General information about the House of Lords and its Committees can be found at http://www.parliament.uk/lords/index.cfm.

Contacts
General correspondence should be addressed to the Clerk of the Committee for Privileges and Conduct, House of Lords, London, SW1A 0PW (telephone 020 7219 8796). Correspondence relating to the work of the Sub-Committee on Lords’ Conduct should be addressed to the Clerk of the Sub-Committee on Lords’ Conduct, House of Lords, London SW1A 0PW (telephone 020 7219 8750).

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CONTENTS
Paragraph Page

The Conduct of Lord Bhatia Introduction 1 Process 4 The Sub-Committee’s findings 11 Lord Bhatia’s appeal 21 Burden of proof 22 Procedural inadequacies 23 The House Committee criteria 24 Facts of the case 25 Disproportionality 26 Evidence taken before the Committee for Privileges and Conduct 27 Repayment and apology 28 The views of the Committee 30 The standard of proof 30 Procedural inadequacies 37 The House Committee criteria 41 Facts of the case 43 Good faith 52 Sanction 57 Appendix: Report from the Sub-Committee on Lords’ Conduct EVIDENCE Evidence considered by the Sub-Committee on Lords’ Conduct Documents Relating to the Members’ Reimbursement Scheme House of Lords Journals 25 July 1991 House of Lords Journals 10 November 2004 Members’ Reimbursement Allowance Scheme General Guide Fifth Edition October 2005

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Members’ Reimbursement Allowance Scheme Quick Guide September 2005 14 The Clerk of the Parliaments’ Guidance on the Investigation of Complaints relating to Members’ Expenses published on 20 October 2009 15 Published Extract from the Minute of the House Committee Meeting of 26 January 2010 The Clerk of the Parliaments’ Report on Lord Rennard Published on 20 October 2009 The Clerk of the Parliaments’ Reports on Nine Members Published 9 February 2010 The Clerk of the Parliaments’ Reports on Four Members published 31 March 2010 16 17 18 21

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Lord Bhatia’s Claim Forms Calendars representing the days on which Lord Bhatia claimed for the reimbursement of travel Lord Bhatia’s Claim Forms Article from the Sunday Times Newspaper, 26 July 2009 Millionaire Lord Bhatia Claimed £20,000 on Small Flat Letter of Complaint Letter from Angus Robertson MP to Mr Brendan, Registrar of Lords’ Interests, dated 26 July 2009 Correspondence with the House Authorities Letter from Lord Bhatia to Mr David English, House of Lords Finance Department, dated 9 February 2004 Letter from Mr David English to Lord Bhatia dated 18 February 2004 Letter from Lord Bhatia to Mr David English dated 10 September 2007 Letter from Lord Bhatia to Ms Clare Hook, House of Lords’ Finance Department, dated 12 November 2007 Letter from Lord Bhatia to the House of Lords Finance Department dated 4 February 2009 44 44 44 44 44 43 41 24 27

Letter from Mr Michael Pownall, Clerk of the Parliaments to Lord Bhatia dated 31 July 2009 45 Memorandum by Lord Bhatia to the Clerk of the Parliaments dated 1 September 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 13 October 2009 45 47

Letter from Lord Bhatia to the Clerk of the Parliaments dated 4 November 2009 47 Letter from the Clerk of the Parliaments to Lord Bhatia dated 18 November 2009 48 Letter from the Clerk of the Parliaments to Lord Bhatia dated 30 November 2009 48 Letter from the Clerk of the Parliaments to Lord Bhatia dated 15 January 2010 Letter from Lord Bhatia to the Clerk of the Parliaments dated 8 February 2010 Letter from the Clerk of the Parliaments to Lord Bhatia dated 25 March 2010 49 49 71

Letter from the Clerk of the Parliaments to Baroness Manningham-Buller, Chairman of the Sub-Committee on Lords’ Interests, requesting the SubCommittee’s assistance, dated 25 March 2010 71 Email from Lord Bhatia to the Clerk of the Sub-Committee on Lords’ Conduct dated 22 June 2010 72

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Letter from Mr Matt Bosworth, Mssrs Russell Cooke Solicitors, to Lord Bhatia, dated 22 June 2010: Attached to the preceding email Letter from Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Conduct to Lord Bhatia dated 23 June 2010 Letter from Mr Brian Yates to Baroness Scott of Needham Market dated 28 July 2009 Letter from the Registrar of Lords’ Interest to Mr Angus Robertson MP dated 31 July 2009 Letter from Lord Bhatia to the Clerk of the Parliaments dated 21 August 2009 Email from Duncan Sagar, Private Secretary to the Clerk of the Parliaments, dated 26 August 2009 Email from Lord Bhatia to the Private Secretary to the Clerk of the Parliaments, dated 27 August 2009 Letter from Mr Jonathan Pearse, Office of the Leader of the House of Lords, to Mr Brain Yates dated 28 August 2009 Letter from Lord Bhatia to the Clerk of the Parliaments date 19 October 2009 Letter from Mr Frank Cannings to the Clerk of the Parliaments, dated 17 November 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 21 October 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 29 October 2009 Letter from Lord Bhatia to the Clerk of the Parliaments dated 2 March 2010 Letter from the Clerk of the Parliaments to Mr Angus Robertson MP dated 31 March 2010 Email from the Clerk of the Sub-Committee on Lords’ Interest to Mr Jonathan Smith, Head of Finance, House of Lords Finance Department, dated 10 May 2010 Correspondence with the Sunday Times Newspaper Letter from Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Interests to Mr John Witherow, Editor of the Sunday Times newspaper, dated 25 March 2010 Letter from Mr Jonathan Calvert and Ms Claire Newell of the Sunday Times newspaper to the Clerk of the Sub-Committee on Lords’ Conduct dated 7 April 2010 Transcript of a covert recording of an interview between Mr Jonathan Calvert of the Sunday Times newspaper and Lord Bhatia on Thursday 23 July 2009 at Lord Bhatia’s residence in Hampton

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Transcript of a covert recording of a n interview between Ms Claire Newell and Mr Jonathan Calvert of the Sunday Times newspaper and a woman neighbour of Mr Sultan Bhatia and Lord Bhatia on Thursday 23 July 2009 at Lord Bhatia’s residence in Reigate 84

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Transcript of a covert recording of an interview between Ms Claire Newell and Mr Sultan Bhatia on Thursday 23 July 2009 at the door of his and Lord Bhatia’s residence in Reigate Transcript of a covert recording of a telephone call made by Mr Jonathan Calvert to Lord Bhatia at his residence in Hampton on Friday 24 July 2009 Oral evidence, Friday 25 June 2010 Supplementary memorandum by Lord Bhatia Further supplementary memorandum by Lord Bhatia in response to the Sub-Committee’s draft account of the facts

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Evidence submitted to the Committee for Privileges and Conduct Letter from Christopher Johnson, Clerk of the Committee for Privileges and Conduct, to Lord Bhatia, dated 21 September 2010 123 Letter from Mr Matt Bosworth to Christopher Johnson, dated 29 September 2010 124 Letter from Christopher Johnson to Mr Matt Bosworth, dated 30 September 2010 124 Letter from Lord Bhatia to the Chairman of the Committee for Privileges and Conduct, dated 4 October 2010 Appeal by Lord Bhatia, dated 4 October 2010 Letter from Christopher Johnson to Lord Bhatia, dated 5 October 2010 Oral evidence, Monday 11 October 2010 125 125 128 129

THE CONDUCT OF LORD BHATIA Introduction 1. The Sub-Committee on Lords’ Conduct has investigated the conduct of Lord Bhatia. The Sub-Committee’s report is printed as an Appendix to this Report. The Sub-Committee’s investigation into the conduct of Lord Bhatia should be read in parallel with its investigations in the conduct of Lord Paul and Baroness Uddin. All three cases arise out of articles originally appearing in The Sunday Times, and each raises similar issues. Each of the SubCommittee’s reports contains similar background analysis (for instance, of the rules governing the Members’ Reimbursement Scheme 1). But, however similar the issues, the facts of each case are wholly distinct and have required separate consideration. The Sub-Committee, and we ourselves, have therefore prepared three separate reports. Process 4. The process followed in this case is summarised in paragraphs 5–6 of the Sub-Committee’s report. The original allegations against Lord Bhatia appeared on 26 July 2009; a complaint was made the same day by Angus Robertson MP. Between 31 July 2009 and 25 March 2010, the Clerk of the Parliaments met and corresponded with Lord Bhatia, but ultimately he felt unable to reach a conclusion on the basis of the information with which Lord Bhatia had provided him. On 25 March 2010, he therefore asked the SubCommittee “to investigate and determine the facts of the case”. The procedure in these cases follows that agreed by the House in December 2008 2, whereby the Clerk of the Parliaments can request the assistance of the Sub-Committee in investigating complaints which he considers “complex or serious”. As a Sub-Committee of the Committee for Privileges and Conduct, the Sub-Committee on Lords’ Conduct normally reports to the parent Committee. But, as this case was referred to the Sub-Committee by the Clerk of the Parliaments, the Sub-Committee reported to the Clerk of the Parliaments. He, given the nature of the sanctions recommended by the SubCommittee, forwarded the report in turn to this Committee. The Sub-Committee, following an investigation which had been interrupted by the dissolution of Parliament, sent its report to the Clerk of the Parliaments on 28 July. The Sub-Committee also recommended that, in order to preserve confidentiality, the Clerk of the Parliaments should not disclose the report to any other person until late in the summer recess. He accordingly forwarded the report to the staff of the Select Committee in late September, and a copy was at once sent to Lord Bhatia, on 21 September.

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All references in this Report to the Members’ Reimbursement Scheme refer to the Scheme that applied up until 30 September 2010. As a result of a motion agreed by the House on 20 July 2010, the day subsistence, night subsistence and office costs elements within the Scheme were combined in a new daily allowance, with effect from 1 October 2010. The Code of Conduct: procedure for considering complaints against Members, Committee for Privileges, 4th Report, session 2007–08 (HL Paper 205). Hereafter referred to as the “Report on procedure”.

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He was at the same time notified of his right to appeal against the SubCommittee’s findings to the Committee for Privileges and Conduct. 7. The deadline given for submitting an appeal was noon on 5 October. On 29 September Lord Bhatia’s solicitor applied for an extension of the time allowed to prepare his appeal, until 15 November 2010. In reply, he was informed that a decision on such an application could only be taken by this Committee at its meeting on 11 October. On 4 October Lord Bhatia submitted a further application for an extension of time, this time under his own name. At the same time he submitted a paper outlining the grounds for his appeal, and indicated his wish to appear in person before the Select Committee at its meeting on 11 October. At the meeting on 11 October, before considering the appeals submitted by the three Members, we considered Lord Bhatia’s application for an extension of time. We concluded that the time allowed to him to prepare his appeal was sufficient, and therefore rejected his application. In so deciding, we took into account that: The Sub-Committee’s report is short (just under 8,500 words); A large section of the report (paragraphs 15–45, almost half of the total) was shown to Lord Bhatia in draft in July; All the written evidence was disclosed to Lord Bhatia before his appearance before the Sub-Committee; The extension requested (until 15 November 2010) was wholly unreasonable; The two other Members whose cases we have considered, Lord Paul and Baroness Uddin, submitted full appeals within the two-week deadline, without applying for more time; The outline grounds of appeal submitted by Lord Bhatia, supplemented by his oral evidence, were sufficiently comprehensive to enable us to reach a fair and balanced view on the merits of his appeal. 9. Although the Sub-Committee’s report was forwarded to this Committee in its entirety, certain matters covered in it relate to the administration of the Members’ Reimbursement Scheme (for instance, the changes which the SubCommittee indicates were made to the Scheme in April 2009, referred to in paragraphs 21 and 51–52 of the Sub-Committee’s report), rather than to the privileges of the House or the Code of Conduct. It is for the House Committee, as the body responsible for the Members’ Reimbursement Scheme, to take forward these matters, on which we make no recommendations. Our responsibility is to address the conduct of Members who are alleged to have breached rules agreed by the House, and, where appropriate, to recommend sanctions to the House as a whole. The House has previously resolved that it “possesses the same disciplinary powers in respect of breaches of the Members’ Reimbursement Scheme as in respect of breaches of the Code of Conduct or of other rules of conduct adopted by the House”.1

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The conduct of Lord Clarke of Hampstead, Committee for Privileges, 4th Report, session 2009–10, HL Paper 112, paragraph 8.

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The Sub-Committee’s findings 11. The focus of the investigation has been Lord Bhatia’s use of the Members’ Reimbursement Scheme between 1 October 2007 and 1 January 2009. In particular, the Sub-Committee considered whether during this period Lord Bhatia correctly designated a two-bedroom flat in Reigate as his “main residence” for the purposes of the Scheme. Lord Bhatia first leased the Reigate property in March 2006, through a company he owns. Under the tenancy agreement, there are three permitted occupants: Mr Sultan Bhatia (Lord Bhatia’s younger brother), Lord Bhatia himself, and Lord Bhatia’s wife. As well as leasing the property through his company, Lord Bhatia also paid council tax on the property and paid its utility bills. Lord Bhatia has owned a family home in Hampton (just inside Greater London) for almost 20 years. He says that from March 2006 onwards he experimented with the Reigate property, with a view to moving there permanently. He says he was motivated by a desire to “downsize”, in view of his age and health. However, he retained the Hampton property throughout the period in question, and in January 2009 he again designated that property as his main residence. He also acknowledges that throughout the period he stayed in Hampton during the week. The pattern of Lord Bhatia’s visits to Reigate is unclear—his answers to the questions put to him variously by the Clerk of the Parliaments and the SubCommittee are summarised in paragraphs 41–43 of the Sub-Committee’s report. Lord Bhatia’s claims for travel expenses shed little light on the frequency of his visits: for the first five months of the period he claimed mileage allowance for regular travel to and from Reigate at weekends, while for the remaining 10 months he claimed nothing, describing the system as too cumbersome and inflexible. In conclusion, the Sub-Committee accepted, on the balance of probabilities, that Lord Bhatia visited the Reigate property on 30 percent of weekends when the House was sitting, and to some extent during recesses. He therefore exceeded the minimum threshold for frequency of visits to a “main residence”, which the Clerk of the Parliaments, with the agreement of the House Committee, has incorporated in his assessment of cases where frequency of visits is an issue (paragraph 48 of the Sub-Committee’s report). The Sub-Committee therefore accepted that, taken together with his financial responsibility for the property, the frequency of Lord Bhatia’s visits would be sufficient, other things being equal, to determine the case in his favour (paragraph 55). However, the House Committee agreed that there should be different and more stringent requirements in cases where a property is occupied by a relative other than a spouse or partner: “[designation of a property occupied by a relative other than a spouse or partner] could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities”. 17. The Sub-Committee’s interpretation of this paragraph, and its application to Lord Bhatia’s case, are outlined in paragraphs 55–58 of the report. The SubCommittee considered that “the strength of the member’s connection with

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the designated property must be such as to find that, irrespective of occupation by a relative ... the property remained Lord Bhatia’s ‘main residence’ within any natural meaning of those two words taken together” (paragraph 56). On the basis of various relevant factors (frequency of visits and/or overnight stays either by Lord Bhatia or his wife, financial responsibility, his continuing ownership of the house in Hampton, whether he made friends in Reigate, and so on), the Sub-Committee concluded that “Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of ‘main residence’ for the purpose of the members’ reimbursement scheme”. 18. It follows from the Sub-Committee’s conclusion regarding the designation of the Reigate property, that Lord Bhatia was not entitled to claim travel expenses to and from Reigate. The Sub-Committee, with the assistance of the Finance Department, calculated the total amount wrongly claimed by Lord Bhatia by way of night subsistence and travel expenses to be £27,446. The Sub-Committee then considered whether or not Lord Bhatia acted in good faith in making the designation and the related claims. Lord Bhatia’s stated purpose in acquiring the Reigate property was to downsize from the house in Hampton. The Sub-Committee’s view was that Lord Bhatia leased the property “for the benefit of his brother” rather than with a view to downsizing. It found that his designation of the Reigate property was a “deliberate misrepresentation of his domestic arrangements made with the intention of enabling Lord Bhatia to make use of the night subsistence element of the members’ reimbursement scheme” (paragraph 71). The SubCommittee concluded that his claims for mileage allowance were made “with the intention of adding verisimilitude to his designation” of the Reigate property (paragraph 77). In summary, the Sub-Committee’s view was that Lord Bhatia “did not act in good faith” in designating the Reigate property and claiming night subsistence and mileage allowance. Finally, the Sub-Committee recommended that “the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the sum of £27,446 wrongly claimed, whichever is the later.” Lord Bhatia’s appeal 21. Lord Bhatia’s appeal may be summarised under five broad headings. Burden of proof 22. Lord Bhatia points out that the Sub-Committee’s findings were reached “on the balance of probabilities”. He asserts that this was an error, in that the allegations “were tantamount to an allegation of criminal conduct”—in such a case, he argues, the Sub-Committee should have been satisfied “beyond reasonable doubt”. He also refers to the “heightened civil standard” of proof—that is to say, a point between the civil (on the balance of probabilities) and criminal (beyond reasonable doubt) standards. Procedural inadequacies 23. Lord Bhatia alleges procedural failures in the Sub-Committee’s examination of him, in that he was at one point refused permission to consult his solicitor.

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He also asserts that the questioning was “extremely hostile”, so that he was disadvantaged by not being able to consult his solicitor. The House Committee criteria 24. Lord Bhatia then refers to the House Committee criteria, describing them as an “objective test”, rendering his “individual motivation” irrelevant. He further alleges that, in judging his motivation, the Sub-Committee took insufficient account of his financial contribution to the property, and to evidence pre-dating his acquisition of the property that demonstrated his wish to downsize. Facts of the case 25. Lord Bhatia notes the Sub-Committee’s acknowledgement that the frequency of his visits to the Reigate flat (around 30 percent of weekends while the House was sitting) would have satisfied the criteria agreed by the House Committee, were it not for the fact that his brother also occupied the flat. He says that the Sub-Committee were wrong in fact to state that his brother had separated from his wife shortly before he acquired the property. He further states that his brother’s residence in the flat “reflected the cultural attitude of people of my ethnic background”, and that this cultural attitude should have been accepted as one of the “very specific circumstances” referred to in the House Committee criteria. Disproportionality 26. Finally, Lord Bhatia asserts that the recommended sanction is “disproportionate and excessive”, particularly given the Sub-Committee’s acknowledgement that, were it not for his brother’s occupancy of the Reigate property, he would have met the criteria set by the House Committee. Evidence taken before the Committee for Privileges and Conduct 27. Lord Bhatia appeared before the Select Committee on 11 October 2010. He read out what is, in effect, a more fully developed version of his written appeal. A full transcript of his evidence is printed in this volume (see p 129). Repayment and apology 28. As indicated above, the Sub-Committee recommended that Lord Bhatia be required to repay the sum of £27,466 to the House, and that he be suspended either for one year, or until the sum is repaid, whichever is longer. The day after submitting his appeal, on 5 October, Lord Bhatia transferred that sum to the House of Lords. The Sub-Committee’s recommendation regarding repayment therefore falls. The Sub-Committee also recommended that Lord Bhatia be required “to make a personal statement of apology to the House”. Lord Bhatia, in his appeal, states that as well as repaying the money wrongly claimed, “nor would I seek to avoid making a statement to the House”.

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The views of the Committee The standard of proof 30. Lord Bhatia’s appeal argues that the Sub-Committee should have applied (and, by implication, this Committee should apply) either the criminal standard of proof (“beyond reasonable doubt”), or a “heightened civil standard” (somewhere between “balance of probabilities” and “beyond reasonable doubt”) to this case. Instead, the Sub-Committee applied the test set out in the Report on procedure: “in order to find against a Member, the Sub-Committee requires at least that the allegation is proved on the balance of probabilities”. That Report, and the procedure it describes, was agreed by the House on 18 December 2008. The words “at least”, in the passage just quoted, indicate that there is an element of flexibility inherent within this standard of proof. This was confirmed in our Report on the conduct of Lords Moonie, Snape, Truscott and Taylor of Blackburn: 11. The standard of proof we have adopted in deciding whether to uphold or reject the Sub-Committee’s findings has been the same as that applied by the Sub-Committee: in other words, while taking the civil standard of proof, the balance of probabilities, as the appropriate standard, we have, in the light of the seriousness of the allegations, taken the view that particularly strong evidence should be required before we may be satisfied that the allegations are proved.1 This Report was agreed by the House on 20 May 2009. 33. Finally, the Guide to the new Code of Conduct, which came into force at the start of the present Parliament (and which will apply to any future investigations), states: 119. The civil standard of proof is adopted at all stages in the enforcement process, not only by the Commissioner, but by the SubCommittee on Lords’ Conduct and the Committee for Privileges and Conduct. Thus, in order to find against a Member, the Commissioner will require at least that the allegation is proved on the balance of probabilities. 2 This Report was agreed by the House on 16 March 2010. 34. In other words, the House has three times explicitly endorsed the principle that the civil standard of proof should be adopted in such investigations, while acknowledging that within the civil standard a degree of flexibility is allowed in judging the strength of evidence required to justify a finding against a Member. This is entirely appropriate: these are internal disciplinary proceedings, and the sanctions to which Members may be subject (including suspension from the House for a period not exceeding the lifetime of the

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The Conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn, Committee for Privileges, 2nd Report, session 2008–09 (HL Paper 88-I). The Guide to the Code of Conduct, Committee for Privileges, 2nd Report, session 2009–10 (HL Paper 81).

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current Parliament) are also internal in character. No criminal liability follows from such a finding. 35. 36. Our approach to the question of the appropriate standard of proof is also entirely consistent with the approach taken in the courts. 1 We reiterate the principle that the standard of proof adopted in investigations should be that set out in the Guide to the Code of Conduct, namely that the allegation should be proved at least on the balance of probabilities. We have therefore dismissed this element of Lord Bhatia’s appeal. Procedural inadequacies 37. Lord Bhatia’s asserted that the questioning to which he was subjected by the Sub-Committee was “extremely hostile”, and that he was disadvantaged by being refused permission to consult his solicitor. The questioning by the Sub-Committee appears to us to have been thorough, but entirely fair. Lord Bhatia is correct that at one point in the transcript of his evidence before the Sub-Committee (Q 94), a Member of the Sub-Committee told him that he could not ask his solicitor for help. This was a mistake, but it is clear from the transcript that this was an isolated occasion, reflecting what was, in our view, natural frustration at the difficulty encountered in getting clear answers to legitimate questions. We have no reason to believe that Lord Bhatia was significantly disadvantaged. In his evidence before this Committee, Lord Bhatia expressed his concerns still more forcefully. He claimed that the Sub-Committee had “predetermined” or “pre-formed” conclusions, and that he had been “ambushed”. There is nothing in the transcript to bear out these claims. In fact they are contradicted by his own remarks, towards the end of the meeting with the Sub-Committee: “Thank you for giving me this opportunity. It has not been trying. You have been very fair and straightforward in asking the questions in an appropriate manner”. (Q 269) 40. In summary, we consider that Lord Bhatia was subjected to fair, rigorous questioning, and was given every opportunity to explain his actions. We dismiss this element of Lord Bhatia’s appeal. The House Committee criteria 41. Lord Bhatia asserts in his written appeal that “designation of main residence is something noble peers were entitled to do under the rules if the criteria for designation was met”. This interpretation of the House Committee criteria as an “objective test” is wholly misconceived. The minimum requirement agreed by the House Committee in January 2010, and applied by the Clerk of the Parliaments in his investigations, was that “the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses” (see paragraph 48 of the

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See Lord Hoffmann in In re B (Children) (FC) [2008] UKHL 35. See also Lord Nicholls of Birkenhead in In re H (Minors)(Sexual Abuse: Standard of Proof) [1996] AC 563, 586D-H, and Lord Bingham of Cornhill in B v Chief Constable of Avon and Somerset Constabulary [2001] 1 WLR 340.

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Sub-Committee report). But that minimum requirement is not, and was clearly never intended to be, a definition of “main residence”, to be applied retrospectively to decisions taken in 2007 or 2008. It was intended to be incorporated “into [the Clerk of the Parliaments’] assessment of cases where frequency of visit was an issue” 1. Frequency of visit is not an issue in a case where no reasonable or defensible interpretation of the term “main residence” has been advanced. 42. We are therefore satisfied that the Sub-Committee’s application of the House Committee criteria was correct, and dismiss this element of Lord Bhatia’s appeal. Facts of the case 43. The crux of the case is the Sub-Committee’s interpretation of Lord Bhatia’s decision to designate the Reigate flat as his “main residence” between October 2007 and January 2009. The question is whether or not Lord Bhatia’s designation of this flat as his “main residence” was based on a tenable and genuinely held understanding of the meaning of that term. The underlying purpose of night subsistence payments was clear. They were intended to enable Members who lived outside London, but who, in order to attend sittings of the House, were required to stay within London (whether by staying in temporary accommodation or by acquiring a permanent residence), to recover some of the costs incurred in so doing:
4.4.1 Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London while away from their only or main residence ... 4.4.2 A Member whose main residence is outside Greater London and who maintains a residence in London for the purpose of attending sittings of the House may claim this allowance towards the cost of maintaining such a residence.

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These payments were not intended to enable Members who lived inside London to acquire properties outside London and designate these as their “main residences”, thereby establishing an entitlement to claim additional money from the House, while continuing to live inside London. It is a common element in the three cases we have been considering that in each case the Member concerned had a long-established London residence, in which they spent the bulk of their time, before acquiring a “main residence” outside London, in which they spent a much smaller portion of their time. Lord Bhatia has lived in a four bedroom detached house in Hampton, on the edge of Greater London, for nearly 20 years. His daughter lives in an adjoining property. There is no doubt that throughout this period the house has been, and remains, his main family home. In March 2006 Lord Bhatia leased a two bedroom flat in Reigate, some 15 miles away from Hampton, but outside Greater London. The permitted tenants of the flat were his brother, Mr Sultan Bhatia, himself and his wife. Sultan Bhatia has lived in

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House Committee minutes, quoted at paragraph 48 of the Sub-Committee’s report.

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the flat continuously since March 2006. However, Lord Bhatia is financially responsible for the flat, including the lease, utility bills and council tax. 47. Lord Bhatia claims that he acquired the Reigate flat with a view to “downsizing” from his house in Hampton, and that the period in which the flat was designated as his main residence coincided with an experiment in downsizing. The Sub-Committee acknowledged that such down-sizing could constitute “a legitimate reason to change one’s designated main residence”. The Sub-Committee’s reasons for rejecting Lord Bhatia’s account are set out in paragraphs 68–70 of its report, and are persuasive. We place particular weight on the fact that Lord Bhatia at no point put his house in Hampton on the market; that he continued to spend most of his time in Hampton throughout the period in question; that on 1 January 2009 he re-designated the house in Hampton as his “main residence”. At no point does he appear to have spent more than occasional days or weekends in Reigate; his wife was there less often than himself. The Sub-Committee’s interpretation of Lord Bhatia’s decision to acquire the flat in Reigate was as follows: We find that Lord Bhatia leased the property for the benefit of his brother: Mr Sultan Bhatia is the first-named permitted occupant on the tenancy agreement; he was the sole person on the electoral roll for the property; it is his sole residence; and shortly before Lord Bhatia leased the Reigate property Mr Sultan Bhatia separated from his wife and is now divorced. (paragraph 60) 49. Lord Bhatia has told us that the Sub-Committee was wrong to claim that his brother separated from his wife “shortly before” he acquired the flat. In his evidence before this Committee, he stated that the separation in fact occurred on 3 July 2004. We accept that the term “shortly before” is slightly inaccurate. However, we can draw no conclusions in Lord Bhatia’s favour from this inaccuracy. The fact that Lord Bhatia’s brother separated from his wife 20 months earlier does not invalidate the Sub-Committee’s judgement that the flat was leased “for the benefit of his brother”—the other factors mentioned, in particular the undoubted facts that Mr Sultan Bhatia is the first-named permitted occupant, that the flat is his sole residence, that he is the sole person on the electoral roll for the property, are in our view conclusive. Lord Bhatia further argues that his brother’s residence in the flat “reflected the cultural attitude of people of my ethnic background”, and that the SubCommittee should therefore have accepted his designation of the Reigate flat. However, the issue in this case is whether the Reigate flat could, within any natural meaning of the term, be regarded as Lord Bhatia’s “main residence”. If, as the Sub-Committee and we ourselves believe, Lord Bhatia acquired the flat for the benefit of his brother, that testifies to the strength of his sense of his cultural and family obligations; it does not justify him in designating that flat as his own “main residence”, and thereby claiming over £27,000 in expenses payments from the House. We therefore endorse the Sub-Committee’s conclusion that Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of “main residence” for the purpose of the members’ reimbursement scheme, and we dismiss this element of his appeal.

48.

50.

51.

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Good faith 52. Having concluded that Lord Bhatia wrongly designated the Reigate flat, the Sub-Committee then considered whether or not, in so doing, and in claiming money under the night subsistence and mileage allowances, he acted in good faith. The Sub-Committee’s analysis is set out in paragraphs 63–78; the SubCommittee’s conclusion was that he did not act in good faith. Lord Bhatia’s appeal against this finding is based in part on his interpretation of the House Committee criteria. For reasons set out above, we consider this element of his appeal misconceived. He further argued, in his evidence before this Committee, that “the Sub-Committee’s so-called ‘tests of good faith’ appear to be highly subjective and inappropriate” (Q 2, p 132E). The factors taken into account by the Sub-Committee in assessing whether or not Lord Bhatia acted in good faith are set out fully and fairly in paragraphs 69– 70 of the Sub-Committee’s report. They are not “tests”, and were not put forward by the Sub-Committee as tests. They are factors which, taken together, enabled the Sub-Committee to make a judgement, on at least the balance of probabilities, as to whether or not Lord Bhatia acted in good faith. We reject Lord Bhatia’s assertion that they are “subjective and inappropriate”; on the contrary, they are all highly relevant to his case and to his motivation, which is the key issue. Our responsibility, in reviewing the Sub-Committee’s findings, is to “decide whether, on the balance of probabilities, we endorse the conclusions of the Sub-Committee”. 1 We note that Lord Bhatia has a reasonable understanding of the term “main residence”, describing it in evidence to the SubCommittee as his “principal home” (Q263), “where I live” (Q262). It is clear to us that his Reigate flat never acquired such a character. Lord Bhatia continues to assert that he acted properly in designating the flat as his main residence. On 5 October 2010 he transferred £27,446, the sum calculated by the Sub-Committee as having been wrongly claimed, to the House. Yet he rejects any suggestion that in so doing he has implicitly acknowledged that he wrongly claimed the money in the first place. He told us that he had “repaid the sum on the advice of my legal advisers. I do not accept the three allegations or the sanctions against me. I have done this simply because I was advised to do so.” (Q 7) We therefore endorse the Sub-Committee’s finding that “Lord Bhatia did not act in good faith in designating the Reigate property as his main residence and in claiming night subsistence and the mileage allowance for journeys by car from and to that property”. Sanction 57. The Sub-Committee recommended that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the amount wrongly claimed, whichever is the later. Lord Bhatia has now repaid the money wrongly claimed, so this element of the recommended sanction falls.

53.

54.

55.

56.

1

Report on procedure, paragraph 35.

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17

58.

With regard to apology and suspension, we consider that the greater penalty, suspension, renders the lesser, apology, unnecesary. Nor would it be fair, in a case where the Member concerned has maintained his or her innocence, to require an apology immediately prior to suspension. Lord Bhatia told us that “even though I have grave misgivings about the case against me, [I] would if required be prepared to make a statement to the House”. He has not offered to apologise, and we do not believe that he should be required at this late stage to do so. We therefore confine our recommended sanction to suspension. In reviewing the Sub-Committee’s recommendation that Lord Bhatia be suspended for one year, we have taken into account the fact that he has now repaid the money wrongly claimed. We therefore recommend that Lord Bhatia be suspended from the service of the House for eight months, starting on the date on which any suspension motion is agreed by the House.

59.

60.

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APPENDIX: REPORT FROM THE SUB-COMMITTEE ON LORDS’ CONDUCT Members’ reimbursement scheme: the conduct of Lord Bhatia Introduction and summary 1. This report replies to a letter from the Clerk of the Parliaments dated 25 March 2010 which, following the Report from the Committee for Privileges on the procedure for considering complaints against members 1 (“the report on procedure”), invited the Sub-Committee on Lords’ Interests 2 to help him investigate a complaint about Lord Bhatia’s use of the members’ reimbursement scheme. 2. We find on the facts that the property in Reigate which Lord Bhatia designated as his main residence for the purpose of the members’ reimbursement scheme met the criteria endorsed by the House Committee on 26 January 2010 (p16E 3) in terms of frequency of visit, but that it did not meet the additional criterion for a main residence “occupied by a relative other than a spouse or partner” (which it was; his brother lived there) in terms of his “connection with the property”. This is because, in our opinion, the connection must establish that the designated property remained the member’s “main residence” within any natural meaning of those words. He wrongly claimed £27,446 and should be required to repay this amount. We further find that Lord Bhatia did not make his designation and claims for night subsistence away from that property and for the mileage allowance in good faith. We recommend that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the amount wrongly claimed, whichever is the later. The allegation, complaint and process of investigation Allegation and complaint 3. On 26 July 2009, the Sunday Times newspaper alleged that Lord Bhatia had designated as his main residence a flat occupied by his brother but in which he himself had not lived (p41): “A millionaire peer has claimed more than £20,000 in allowances from the House of Lords by saying that a small rented flat occupied by his brother is his main home. Last week he could not even remember its address ... Bhatia could not remember the address of the flat when repeatedly asked last week. He had to look it up and even then misspelt the name of the block. A neighbour could not recall him living there, but

1

The Code of Conduct: procedure for considering complaints against Members, 4th Report from the Committee for Privileges session 2007-08 HL Paper 205 paragraph 11 bullet 2. Report agreed to by the House on 18 December 2008. Hereafter referred to as “the report on procedure”. In the last Parliament, the Sub-Committee was styled the Sub-Committee on Lords’ Interests; it is now styled the Sub-Committee on Lords’ Conduct. The references in this report to the printed evidence are in the form “p16E” and “Q94”. The former refers to page 16 of the printed evidence at letter E; the latter to question number 94 in the transcript of oral evidence.

2

3

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19

Bhatia insisted he had spent many weekends at the flat and said he intended to move there with his wife when he sells his family home.” 4. Mr Angus Robertson MP complained about Lord Bhatia’s alleged conduct on 26 July 2009 (p43). Procedure for investigation of allegations about expenses 5. The House Committee is the principal domestic committee of the House and is responsible for the members’ reimbursement scheme (p5B). On 20 October 2009, the Committee endorsed a procedure for dealing with complaints relating to the scheme (p15H). It involved investigation by the Clerk of the Parliaments as Accounting Officer; reference to the Sub-Committee in “complex or serious”1 cases; report by the Clerk of the Parliaments to the House Committee; and sanctioning by the Committee for Privileges if appropriate (p16B). On 6 July 2010, the Clerk of the Parliaments and House Committee agreed to stand aside in this and two other cases where this Sub-Committee had been involved: thus this report goes via the Clerk of the Parliaments to the Committee for Privileges and Conduct, to whom lies Lord Bhatia’s right of appeal 2. Procedure in this investigation 6. Between 31 July 2009 and 25 March 2010, the Clerk of the Parliaments met and corresponded with Lord Bhatia (pp45-71). The Clerk felt unable to reach a conclusion on the basis of the information with which Lord Bhatia had provided him. On 25 March 2010, he asked the Sub-Committee “to investigate and determine the facts of the case” (p71E). Investigation by the Sub-Committee 7. The report on procedure says that we may not accept for investigation a complaint going back more than four years 3: we may thus examine conduct in this case from 26 July 2005. We have not limited our investigation to the allegation made by the Sunday Times newspaper but have instead generally investigated Lord Bhatia’s use of the members’ reimbursement scheme. We have focused on Lord Bhatia’s claims for night subsistence and travel. Lord Bhatia’s claims for day subsistence, office costs, and Select Committee expenses are not at issue. 8. Our investigation was interrupted by the dissolution of Parliament on 12 April 2010. The new House met on 18 May and appointed the Committee for Privileges and Conduct on 2 June. The Committee appointed this Sub-Committee on 7 June. We reported to the Clerk of the Parliaments on 28 July with the recommendation that, to retain confidentiality during the summer recess without affecting the timetable for any appeal, he should forward the report to the Chairman of the Committee for Privileges and Conduct only towards the end of the summer recess.

1

Report on procedure, paragraph 11 bullet 2: “Matters relating to the Members’ Reimbursement Allowance Scheme are the responsibility of the Clerk of the Parliaments, as Accounting Officer for the House of Lords. In exceptional circumstances he may request the Sub-Committee to assist him in investigating a complex or serious complaint”. House of Lords Code of Conduct, 2 July 2001, paragraph 19(e): “If after the investigation the SubCommittee finds the allegation proved, the Member complained against has a right of appeal to the Committee for Privileges”; the report on procedure paragraphs 32-37 sets out the appeal procedure. Report on procedure, paragraph 11 bullet 4.

2

3

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Evidence 9. The Sub-Committee had as written evidence the amounts claimed by Lord Bhatia since April 2003 and his claim forms since March 2006 1 (pp27-40); correspondence between the House authorities and Lord Bhatia (pp44-71); a letter from the Sunday Times and transcripts 2 of telephone conversations and interviews on which their article was based (pp79E-96). The officers of the SubCommittee corresponded with Lord Bhatia (pp72-8). We took oral evidence in private from Lord Bhatia (pp97-118), to whom we had earlier disclosed the written evidence. The report on procedure says3: “Procedural safeguards 25. The Code of Conduct states that “in the investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.” They may be accompanied to any meeting by a colleague, friend or legal adviser, but every effort is made to keep proceedings informal, and there is no expectation that they should be so accompanied. If they do choose to bring a friend or adviser, they will nevertheless be expected to answer for themselves (and not through their friend or adviser) any questions put to them.” 10. Lord Bhatia brought with him to the evidence session his solicitor, Mr Matthew Bosworth of Mssrs Russell Cooke. 11. We recommend that all of this evidence be published. 12. Unlike two other cases on which the Sub-Committee has recently reported, the Metropolitan Police Service did not investigate Lord Bhatia’s conduct so, in this case, there are no third-party witness statements on which we can draw. The facts 13. The report on procedure says4: “Assessing the evidence 26. When its investigation is concluded, the Sub-Committee assesses the evidence. In order to find against a Member, the Sub-Committee requires at least that the allegation is proved on the balance of probabilities. 27. If the investigation has uncovered material evidence that is at variance with the Member’s version of events, this will be put to the Member, who will have a chance to challenge it. Before reaching its conclusions, the Sub-Committee will also share with the Member a draft

1

The House of Lords Finance Department has retained the amounts claimed each month by members under each head since 2003 but has retained claim forms only from March 2006; all members’ earlier claim forms have been disposed of in accordance with the department’s disposal policy. The Sunday Times also supplied the Committee with the recordings on which their transcripts were based. We did not rely on the newspaper’s transcripts but commissioned our own. Those published as evidence were either corrected or created by the clerks. Report on procedure, paragraph 25. Report on procedure, paragraphs 26 to 28.

2

3 4

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21

of those parts of its report dealing with issues of fact, so that the Member has an opportunity to comment on them. 28. If there remain significant contested issues of fact, the SubCommittee will agree its own account of the facts of the case, while drawing to the attention of the Committee for Privileges and the House any challenge to this account made by the Member concerned.” 14. To fulfil these paragraphs, we showed Lord Bhatia a draft of our account of the facts set out in paragraphs 15 to 45. He challenged a number of points in our draft. We have taken account of some but not all of his points in the version below and we draw attention to the memoranda by Lord Bhatia printed at (pp118H; 119A). 15. The facts of the case are as follows. The members’ reimbursement scheme 16. The members’ reimbursement scheme is founded on resolutions of the House and is explained in a General Guide published by the Finance Department and in a Quick Guide set out on the reverse of the claim form. The Clerk of the Parliaments is responsible for administering the scheme, subject to direction by the House Committee on points of difficulty or doubt (p5B). The relevant resolutions and guidance are set out in full at pp1-15 of the printed evidence but we must here quote some relevant passages. The resolutions of the House and published guidance 17. The principal resolution of the House in relation to day and night subsistence is that of 25 July 1991 (p1D). It reads:
“(1) Members of this House, except any Lord who receives a salary under the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees, shall be entitled to recover (in addition to the costs of travel for which other provision is made) expenses certified by them as— (a) expenses incurred (otherwise than as mentioned in sub-paragraph (b) below) for the purpose of attendance at sittings of this House or of Committees of this House, or (b) expenses incurred in staying overnight away from their only or main residence where it is necessary to do so for that purpose.”

18. The principle that a member may claim an allowance towards the recovery of the cost of travel by car for the purpose of parliamentary duties was established by a resolution of the House of 17 May 1961 (p1A). The current resolution relating to travel by car is that of 10 November 2004 (p2C). It reads:
“That this House approves the following proposals with respect to payments of car, bicycle and motorcycle allowances to Lords for journeys which they have commenced on or after 10 November 2004— (1) The maximum allowance payable in respect of a journey by car, motorcycle or bicycle should be payable at the rate which is applicable to that kind of vehicle under subsection (2) of section 230 of the Income Tax (Earnings and Pensions) Act 2003, as amended from time to time.

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(2) For the purposes of paragraph (1), the reference in that subsection to “the first 10,000 miles” is to the total number of miles of travel by car by the Lord claiming the allowance, which is either— (a) undertaken for the purpose of attending this House for the purposes of his parliamentary duties, or (b) undertaken while on parliamentary duties within the United Kingdom.”

19. It is clear from the resolutions that the purpose of the scheme is the recovery of expenses necessarily incurred in attending the House. 20. As to the guidance, the 2005 edition of the General Guide read (pp2-14):
“1.2.1 Members of the House of Lords do not, in general, receive a salary in respect of their parliamentary duties. However, Members may be reimbursed actual expenses arising out of these duties, in accordance with the rules of the Members’ Reimbursement Allowance Scheme. The Members’ Reimbursement Allowance Scheme is governed by Resolutions of the House. Rules for the recovery of Members’ expenses are administered by the Clerk of the Parliaments who also has limited discretion to deal with matters that arise on claims. Points of particular difficulty or doubt may be referred to the House Committee, which supervises the arrangements for the reimbursement of expenses ... 1.3 Taxable status 1.3.1 All amounts paid in settlement of claims as detailed in this guide represent reimbursement of actual expenses arising out of unpaid parliamentary duty, rather than income from employment. Consequently, they are not subject to income tax, and need not be included on a tax return ... 4 ATTENDANCE AT SITTINGS AT WESTMINSTER 4.1 General - Expenses Related to Attendance 4.1.1 The basic principle underlying the scheme is that the entitlement to recover expenses arises only in respect of attendance at sittings of the House or its committees at Westminster … 4.1.3 Members who wish to claim attendance expenses must complete and sign the attendance expenses claim form and forward it as soon as convenient after the end of each month, or period of claim, to the Members’ Expenses Section. A Member’s signature effectively certifies that the amount claimed has been spent for the purposes of parliamentary duties as set out above. Receipts are not required ... 4.2 Travelling Expenses General 4.2.1 Claims may be made only for journeys over five miles between a Member’s main place of residence in the United Kingdom and Westminster. Claims for incidental travel costs (e.g. those arising from short distance journeys within a five mile radius of Westminster, tolls and car parking charges) are covered by the day subsistence allowance (4.5). 4.2.2 Members seeking to receive travel costs must register their main place of residence with the Members’ Expenses Section. Members with more than one main place of residence may register an alternative main residence with the

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23

Members’ Expenses Section for the purpose of claiming travelling expenses. Registration is subject to the approval of the Clerk of the Parliaments ... 4.2.4 Members may recover the cost of fares incurred by them for travel by any public railway, sea, and air or bus service, or the costs of journey made by private car ... Road 4.2.8 Claims in respect of journeys by private car are payable at: 40p per mile up to 10,000 miles in the year ending 31 March; and 25p per mile for mileage in excess of 10,000 miles in the same year. No other claims in respect of motoring expenses are reimbursable under the travelling expenses heading. Incidental travel costs such as tolls, congestion charges and car-parking charges can be claimed against the daily limit of the day subsistence allowance (4.5). 4.4 Night Subsistence 4.4.1 Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London while away from their only or main residence. The maximum daily limit is £154.50. 4.4.2 A Member whose main residence is outside Greater London and who maintains a residence in London for the purpose of attending sittings of the House may claim this allowance towards the cost of maintaining such a residence. 4.4.3 Claims for night subsistence are only permissible in respect of nights actually spent in London either immediately preceding or following attendance at a sitting or meeting described in paragraph 4.1.1 above. For example, a Member who necessarily travels to London on a Sunday and attends sittings of the House on Monday, Tuesday, Wednesday and Thursday and then returns home on Friday or later may claim night subsistence for a maximum of 5 nights at up to a maximum of £154.50 per night (i.e. a maximum of £772.50 for the week). However, if the Member returned home on the Thursday evening, the maximum claim for night subsistence would be 4 nights at up to a maximum of £154.50 per night (i.e. a maximum of £618 for the week). 4.4.4 Members who choose to travel home each night or whose main residence is within Greater London cannot claim the night subsistence allowance.”

21. The General Guide was updated in January 2007, October 2008 and April 2009. The language used to describe the scheme was materially the same in each edition until 2009, which left out the word “allowance” in several places, including in the title of the guide 1 and in paragraph 4.4.2 in relation to night subsistence. 22. The claim form used until October 2008 read (p27):
“I certify that during the month of ............ I have attended a sitting of the House or of a Committee of the House on the under-mentioned dates and claim reimbursement of:

1

Until April 2009, the guide was entitled “Members’ reimbursement allowance scheme general guide”.

24

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(a) Night subsistence incurred in such attendance or in respect of the maintenance of a London residence (other than a main residence) used for the purpose of attending the House (see note (i)) ... (d) Travelling Expenses (please ensure all travel dates are entered) (see note (v))”

Thereafter paragraph (d) read (p37F):
“(d) Travelling Expenses see note (v)”

23. At the bottom of the form, the claimant has to print his name, sign, date the claim and enter his main place of residence. 24. Notes (i) and (v) refer to the Quick Guide printed on the reverse of the claim form which in 2005 read (pp14-15):
“(i) Night Subsistence – Members whose main residence is outside Greater London may claim expenses, within a daily limit of £154.50 (from 1 August 2005 to 31 July 2006), for nights spent away from their only or main residence for the purpose of attending sittings of the House a) where they have incurred expenses of overnight accommodation in London or; b) as a contribution towards the costs of maintaining a London residence in connection with their parliamentary duties. Claims can only be made in respect of days of attendance ... (v) Travelling Expenses - These may be claimed for journeys between main place of residence in the United Kingdom and London by any public railway, sea, air or bus service. Claims in respect of journeys by private car are restricted to an allowance of 40p per mile up to 10,000 miles then 25p thereafter. Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mile and by bicycle at the rate of 20p per mile.”

25. The rates changed over the period. In August 2006 paragraph (v) read:
“(v) Travelling Expenses - Claims may be made only for journeys over five miles between a Member’s main place of residence in the United Kingdom and Westminster by any public railway, sea, air or bus service. Claims in respect of journeys by private car are restricted to an allowance of 40p per mile up to 10,000 miles then 25p thereafter. Claims in respect of journeys undertaken by motorcycle are paid at the rate or 24p per mile and by bicycle at the rate of 20p per mile. Claims for incidental travel costs are covered by the day subsistence allowance (see section (ii)).”

26. In August 2009 paragraph (i) had a sentence added to the end: “When claiming Night Subsistence dates of travel must be shown on the claim form.” As did paragraph (v): “Members are required to provide receipts or vouchers when submitting claims for ticketed travel in excess of £50 per return journey (£25 per single journey).” 27. Although each edition of the Quick Guide said “Members are encouraged to contact the Finance Department, House of Lords for general assistance, or to discuss any particular points that arise from their claims”, in practice the onus on interpreting the scheme has fallen on the individual member. Save for the Lord President (Lord Soames) speaking of the member’s “usual residence” 1 when moving the motion which first set up the night subsistence regime in 1979, there

1

HL Deb 26 July 1979 col 1135-37.

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25

was no guidance on the meaning of “main residence” other than the two words themselves until March 2010 1. Lord Bhatia’s designated main residences, claims and circumstances Lord Bhatia’s designated main residences 28. Lord Bhatia successively designated two main residences in the period from 26 July 2005 to the end of the last Parliament on 12 April 2010. Until 1 October 2007 it was 22 Manor Gardens, Hampton, Middlesex. From 1 October 2007 to 1 January 2009 it was 31 Bancroft Court, Reigate, Surrey. On 1 January 2009 his designated main residence reverted to 22 Manor Gardens, Hampton, Middlesex. Facts relating to the Hampton property 29. The Hampton property is a post-war four bedroom detached house with a garden. It has been Lord Bhatia’s family home for nearly 20 years (p45K). His daughter, a medical doctor, lives in a house with an adjoining garden; the two gardens are shared (p89A). Before 1 October 2007, the Hampton property was Lord Bhatia’s only residence for the purpose of the members’ reimbursement scheme. Since 1 October 2007 it has been his London residence. Since 1 January 2009 it has been his designated main residence. 30. The House of Lords Finance Department has retained all members’ claim forms from March 2006: Lord Bhatia’s claims are reproduced at (pp24-40). Lord Bhatia claimed day subsistence, office costs and the mileage allowance for journeys by car for every day he attended the House in both periods for which Hampton was his main residence. Hampton is within Greater London and naturally falls outside the scope of the night subsistence scheme, the purpose of which is to reimburse members whose main residence is outside Greater London for the cost of accommodation in London when attending the House. Facts relating to the Reigate property: circumstances 31. Lord Bhatia and his wife are both in their seventies. Lord Bhatia says that he and his wife have wished to downsize since 2003 in order to reduce the burden for an ageing couple of maintaining a family home no longer occupied by a family (p45K; Q71). In 2004, he proposed to buy a house in Berkshire as his main residence while retaining the Hampton property for the purpose of attending the House (p44B). That purchase did not happen. In March 2006, Lord Bhatia leased the Reigate property through a company he owns, Casley Finance Limited (p51C). The property is a two-bedroom flat “at the end of the row, close to an underground car park” in “an unprepossessing 1970s block” as described by the Sunday Times newspaper (p79K). Lord Bhatia acknowledged to a journalist from the Sunday Times that the contrast with the Hampton property is “stark” but said that it reflected his circumstances: at 76 he could not maintain the Hampton house (p90H). 32. The tenancy agreement specifies the permitted occupants as Sultan Alibhai Bhatia (Lord Bhatia’s younger brother), Amirali Bhatia (Lord Bhatia) and Nurbanu Bhatia (Lord Bhatia’s wife) (p51D). Throughout the period, Lord

1

Financial Support for Members of the House: Declaration of Principal Residence and Publication, 3rd Report from the House Committee, session 2009-10, HL Paper 89. Report agreed to by the House on 22 March 2010.

26

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Bhatia paid undiscounted council tax on the property (pp54-6) and paid its utility bills (pp57-70). 33. From March 2006, Lord Bhatia says that he experimented with the Reigate property to see whether he wished to move to the area and that flat (Q94). He furnished the flat over the period to October 2007 both with newly bought furniture and items from Hampton (QQ106; 255); he kept some of his possessions in Reigate, including clothes, as he required (Q23). 34. The experiment concluded with Lord Bhatia deciding that he wished to live in the Reigate property (Q238). On 10 September 2007, Lord Bhatia wrote to the Finance Department to say that “As from 1 October 2007, I will be moving to my main residence at” the Reigate property and that “I will be using my Hampton House which I will use during weekdays and when attending the House of Lords” (p44G). That same September, Lord Bhatia was taken ill with a nasal condition which required a few days’ hospitalisation followed by continued medication and observation by a doctor close to Hampton (QQ78-94) but he informed the SubCommittee that that did not prevent him from spending every weekend in the months thereafter at the Reigate property as indicated by his claims for the mileage allowance for journeys by car (pp24-6). 35. We asked Lord Bhatia about his lifestyle at the Reigate property once he had decided that it should be his main residence. His wife was there “occasionally”, less frequently than himself (p88D), though they both wanted to downsize (Q7). Family gatherings continued to be held in Hampton (at his adjacent daughter’s home), never in Reigate (Q41; p119L). The Bhatias made no friends in Reigate (Q40) but knew their neighbours in Hampton well (Q38). Lord Bhatia and his wife remained on the electoral roll in Hampton; only his brother Sultan appeared on the roll in Reigate (see paragraph 37 below). When interviewed by the Sunday Times, Lord Bhatia could not recall the address of the Reigate property (pp81E, 81F; 83G). Despite his intention of downsizing, the Hampton property was not put on the market, we were told both due to Lord Bhatia’s need to use it as a London residence when attending the House (p44G) and because the property market was depressed (Q25). 36. Towards the end of 2008, Lord Bhatia reassessed his lifestyle in the light of a further medical diagnosis (p46E) which meant that he could not go to Reigate (p88E). Despite his continuing intention to downsize to the Reigate property (Q241; pp81D; 82E), he changed his designated main residence back to the Hampton property. 37. Lord Bhatia’s brother, Mr Sultan Bhatia, the first-named permitted occupant on the tenancy agreement (p51D), lived in the Reigate property throughout the period (Q70) and continues to do so (Q243). It is his sole residence (p89D). He occupies the smaller of the two bedrooms (p85F; Q74) with the purpose of looking after the property in Lord Bhatia’s absence (Q74). Shortly before Lord Bhatia leased the Reigate property, Mr Sultan Bhatia separated from his wife (pp85K; 86E) and is now divorced (p96B). Lord Bhatia denied that he had leased the flat for the benefit of his brother (Q73). Facts relating to the Reigate property: travel and frequency of visit 38. Lord Bhatia’s claims for the mileage allowance for journeys by car in the period when the Reigate property was his designated main residence (October 2007 to December 2008) may be divided into three (pp24-6): i) in the month of October 2007, Lord Bhatia claimed night subsistence,

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27

day subsistence and office costs. He also claimed the mileage allowance for daily journeys throughout the month from Hampton. On this being drawn to his attention by the Finance Department, he amended his claim by letter to claim for journeys each week from and to Reigate (pp 34A; 44J); ii) from 1 November 2007 to 29 February 2008, Lord Bhatia’s designated main residence remained in Reigate. He claimed night subsistence, day subsistence, office costs and the mileage allowance for weekly journeys by car from and to Reigate. The claimed days of travel to Reigate vary from week to week: for example the days of his return to Reigate in December 2007 were Saturday 1st, Thursday 6th, Friday 14th and Tuesday 18th. He usually travelled to London on a Monday; and iii) from 1 March 2008 to 31 December 2008, Lord Bhatia’s designated main residence remained in Reigate. He claimed night subsistence, day subsistence and office costs. He did not claim the mileage allowance. 39. The Clerk of the Parliaments felt unable to determine the complaint about Lord Bhatia because Lord Bhatia had been unable to estimate the number of occasions he had visited his Reigate main residence. 40. Lord Bhatia expressed himself to us only in general terms as to the frequency of his visits to Reigate and indeed presented us with contradictory evidence. 41. He maintained to the Clerk of the Parliaments and to us that he did not keep a log of his visits to Reigate and so was unable to confirm the dates on which he had been there (p49H; Q3). His brother said that he too had no record when doorstepped by a journalist (p86A). We consider this lack of record unlikely in the light of the fact that Lord Bhatia had sufficient a record to claim the mileage allowance by month in arrears (pp24-6); that he has a PA (QQ163; 170); and a diary showing his attendance in the House (QQ185; 188). He is also sufficiently well organised to have retained the utility bills for the Reigate property in accordance with company law since he first leased it in 2006 (pp57-70). In the understandable absence of a complete record, we would have hoped that his records and memory might have provided some specific illustrations of his visits, but they did not. 42. When questioned on frequency he told us that, in the period before the Reigate property was his designated main residence, he “visited and resided there occasionally”, 2 to 3 times a month (Q69), between 30-50% of the time (Q64). “Reside” included an overnight stay in his meaning (Q61). 43. Once the Reigate property was his designated main residence, Lord Bhatia told us that he was there “regularly” (Q3), “30 or 40% of the time” (Q113) (we take “time” in this context to mean weekends when the House was sitting) and that the same pattern applied to the recess (Q266), though he told the Sunday Times that he saw no reason to be in Reigate in the recess (p92B; p92G). He also said however that, although he travelled to Reigate once a week (Q218), he might have gone to Reigate in the morning and returned to Hampton in the evening (Q108): he did not necessarily stay the night (QQ154; 224). 44. Lord Bhatia’s claims for the mileage allowance for journeys by car for the first five months in which Reigate was his designated main residence show claims for journeys from and to Reigate at weekends. He travelled to London on Mondays (save for Tuesday 6 November 2007) and returned to Reigate on a Thursday, Friday or Saturday. Lord Bhatia admits that he did not necessarily travel on the days set out on the claim forms (QQ199; 213): he said that he may have travelled back and forth in a single day (QQ154; 224); and his journey might not have started in Reigate (Q228). He told us that he made these claims due to a

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misunderstanding of the requirements of the members’ reimbursement scheme (QQ161; 197; 211), an alleged misunderstanding we consider below. 45. Lord Bhatia did not claim the mileage allowance for journeys from and to Reigate for the remaining 10 months in which the property was his designated main residence (pp25C; 36A-38F). He gave two reasons for his decision to stop claiming. First, he described the system as “cumbersome” (p48K). Then, in oral evidence, he presented the system as inflexible and difficult for his circumstances (Q3). 46. We found Lord Bhatia’s account of the frequency of his visits to Reigate to be unconvincing. We are however required to determine this case at least on the balance of probabilities. On the available evidence, we accept that over the period of designation Lord Bhatia visited the Reigate property on 30% of weekends when the House was sitting; that some but not all of these visits included an overnight stay; and that this pattern continued to some extent in the recess. The issues 47. The case raises three issues: 1) whether Lord Bhatia’s designated main residence in Reigate met the criteria endorsed by the House Committee for these investigations; 2) whether Lord Bhatia correctly claimed for travel from and to that main residence; and 3) if the facts identify a wrongly designated main residence, whether Lord Bhatia acted in good faith in making his designation and claims for night subsistence and travel. Issue 1: whether Lord Bhatia’s designated main residence met the criteria endorsed by the House Committee 48. On 26 January 2010, the House Committee endorsed the Clerk of the Parliaments’ approach to determining allegations about the members’ reimbursement scheme, as recorded in the published extract of the minutes of that meeting (p16E): “He [the Clerk of the Parliaments] emphasised that he was operating under the current scheme, one of the weaknesses of which was that there was no clear definition of a main residence. He had however taken the view, within the context of the individual assessment of each case, that there needed to be a minimum threshold beyond which it would be inappropriate for a Member to designate a property as a main or only residence, and consequently claim overnight subsistence when staying in London. He sought the endorsement of the Committee of the criteria which he was incorporating into his assessment of cases where frequency of visits was an issue: i.e. that the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses. These factors would be taken into account, along with other evidence, when assessing the validity of the designation of a main residence. He drew the attention of the Committee to the fact that it was probable that more stringent requirements would be a feature of the new scheme for Members’ expenses. He also raised the issue of whether a property that was occupied by a relative other than a spouse or partner could in any circumstances be

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29

designated as a main residence under the current scheme. It was felt that this could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities.” 49. We consider the criteria endorsed by the House Committee to be binding on us: it is the principal domestic committee of the House and explicitly responsible for the members’ reimbursement scheme (p5A). 50. “Visit” is used in the criteria in the context of “weekend”. We consider that “visit” must include an overnight stay. We also consider that “one weekend per month” is not a minimum threshold set by the House Committee, but the minimum frequency of occupation when the House was sitting subject to “other evidence”. It is a necessary but not sufficient criterion. In the case of a property occupied by a relative other than a spouse or partner, “very specific circumstances” are required, “subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities”. 51. The Committee for Privileges’ and our own report on Lord Clarke of Hampstead’s use of the members’ reimbursement scheme, agreed to by the House on 6 April 2010, is also relevant 1. In that report, we found that: “17. It is clear to us that a member may only claim under the scheme i) if they have stayed overnight away from their main residence; and ii) they have attended the House. There is no ambiguity about these conditions ... 23. Our interpretation of the resolution, General Guide and Quick Guide taken together is that a member who maintained a residence in London for the purpose of attending the House could reasonably claim that the night subsistence provision was a flat rate allowance intended to reimburse the member for the costs of maintaining such a residence (General Guide paragraph 4.4.2). A member who did not maintain a residence in London was however entitled only to claim for the recovery of actual expenses (General Guide paragraph 4.4.1). The former is no longer the case as the word “allowance” was removed from the guidance in April 2009.” 52. The report from the Committee for Privileges was agreed to by the House and is binding. Recent cases 53. In the period since the House Committee endorsed the criteria for determining a main residence for the purpose of these investigations, the Clerk of the Parliaments has determined a number of complaints raising similar questions (pp17-23) and a further number of media allegations against members who were not subsequently complained about. These decided cases do not however form any precedent. Each of the Clerk’s published reports constitutes the application to

1

The conduct of Lord Clarke of Hampstead, 4th Report from the Committee for Privileges, session 2009-10, HL Paper 112.

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specific circumstances of the criteria endorsed by the House Committee: the questions the Clerk faced when deciding the cases he did, and the questions we face in deciding this case, are questions of fact. They establish no principle, rule or threshold. The Clerk’s several decisions are thus not statements of precedent and they do not bind us as we determine the facts of this case. We have proceeded on the basis that we may take into account any fact relevant to the circumstances, even if the Clerk did not take such a fact into account in the cases he decided. Opinion of the Sub-Committee Frequency of visit 54. On the available evidence, we accept that over the whole period of designation Lord Bhatia visited the Reigate property on 30% of weekends when the House was sitting; that some but not all of these visits included an overnight stay; and that this pattern continued to some extent in the recess. This meets the minimum threshold for frequency of visit in the criteria endorsed by the House Committee and by which we are bound. Criteria when a property is occupied by a relative other than a spouse 55. Frequency of visit is a necessary but not sufficient criterion, subject to “other evidence” under the criteria endorsed by the House Committee. Lord Bhatia was financially responsible for the property: his company was responsible for the rent and he paid the council tax and utility bills. According to the criteria, that would be sufficient to determine the case if it were not for the fact that Lord Bhatia’s brother, Mr Sultan Bhatia, lived in the property before, during and after the period in which it was designated as Lord Bhatia’s main residence. The House Committee set additional criteria for such circumstances (p16J): “[designation of a property occupied by a relative other than a spouse or partner] could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities”. Thus, frequency of visit remains essential but there is i) a further dominant criterion: “the detail of the Member’s connection with the property, including relevant financial responsibilities”; and ii) a subordinate criterion: “very specific circumstances”. Connection with the property 56. The criteria endorsed by the House Committee provide no guidance as to what constitutes a sufficient connection with the property for it appropriately to be designated as a main residence in these circumstances. We thus have to establish our own criteria to decide that fact. We consider that the strength of the member’s connection with the designated property must be such to find that, irrespective of occupation by a relative other than a spouse or partner, the property remained Lord Bhatia’s “main residence” within any natural meaning of those two words taken together. We accept that “main residence” is not defined either in the resolution establishing, or in the guidance on, the members’ reimbursement scheme. The consequence is that it would be unreasonable retrospectively to apply a single definition. It does not mean however that a designation which defies any natural meaning of those words may be allowed.

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31

57. In favour of a sufficiently close connection for the Reigate property to be his main residence is the fact that Lord Bhatia was financially responsible for it; and he kept some of his possessions there, including clothes, as he required. Against a sufficiently close connection is that Lord Bhatia visited the property on only 30% of weekends when the House was sitting; and that only some of these visits included an overnight stay. He was not there with any greater frequency or duration in the recess. His wife was there less frequently than himself, though they both wanted to downsize; his doctor remained in Hampton; the Bhatias made no friends in Reigate; and Lord Bhatia and his wife remained on the electoral roll in Hampton. We consider that Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of “main residence” for the purpose of the members’ reimbursement scheme, especially in the light of his continued ownership and use of the Hampton property. 58. We thus conclude that Lord Bhatia did not have a sufficient connection with the Reigate property to have designated it as his main residence given that it was occupied by a relative other than a spouse or partner. He was therefore wrong to have designated it as his main residence for the purpose of the members’ reimbursement scheme and to have claimed night subsistence when away from it. 59. With the assistance of the Finance Department, we have calculated that Lord Bhatia wrongly claimed £27,134 in night subsistence over the period. Lord Bhatia should be required to repay this amount. Specific circumstances 60. Our finding on Lord Bhatia’s “connection with the property” determines this issue because that criterion is dominant in the test. For completeness however we also address the question of “very specific circumstances”. Lord Bhatia claims to have leased the Reigate property for himself and his wife to downsize from Hampton. He says that his brother occupied the property only to look after it in Lord Bhatia’s absence. Had his connection with the property been sufficient, such circumstances would in our opinion have enabled Lord Bhatia to have designated the property as his main residence despite its occupation “by a relative other than a spouse or partner”. These were not however his circumstances. First, we find below that this was not an exercise in downsizing (paragraphs 68 to 70). Secondly, we find that Lord Bhatia leased the property for the benefit of his brother: Mr Sultan Bhatia is the first-named permitted occupant on the tenancy agreement; he was the sole person on the electoral roll for the property; it is his sole residence; and shortly before Lord Bhatia leased the Reigate property Mr Sultan Bhatia separated from his wife and is now divorced. Issue 2: whether Lord Bhatia should have claimed for travel from and to his main residence 61. Lord Bhatia should not have designated the Reigate property as his main residence. Claims for travel may only be made for journeys made between a main residence and Westminster in respect of parliamentary duties (pp6K; 15B). As Reigate was not his main residence, Lord Bhatia was not eligible to claim for travel from and to Reigate. We do not need to find whether he made the journeys for which he claimed in the five months of his designation in which he made travel claims, though he admits that he did not make the journeys either necessarily from and to his designated main residence or on the dates for which he claimed.

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62. With the assistance of the Finance Department, we have calculated that Lord Bhatia wrongly claimed £312 under the mileage allowance for journeys by car over the period. Lord Bhatia should be required to repay this amount. Issue 3: if the facts identify a wrongly designated main residence, whether Lord Bhatia acted in good faith in making his designation and claims 63. Having found that Lord Bhatia wrongly designated the Reigate property as his main residence and made claims for night subsistence and travel to which he was not entitled, we now turn to the issue of good faith. If Lord Bhatia did not act in good faith when making his designation and claims for night subsistence and travel, then he is liable to sanction. If however Lord Bhatia had good reason to believe that his designation and claims were valid, sanction might be inappropriate. 64. In correspondence with the Clerk of the Parliaments, Lord Bhatia says (p46D): “I have always acted in an open and transparent manner in relation to reimbursement of expenses for overnight accommodation as per the Guideline set out in the relevant Members’ Reimbursement Allowance Scheme General Guide that were in force at the relevant time ... All claims that I made... were properly made and I did so with the full knowledge of the House of Lords’ Accountants Office.” 65. In oral evidence, Lord Bhatia stressed several times that he acted in good faith throughout (Q3). 66. In testing Lord Bhatia’s good faith, we look separately at his designation of main residence and claims for night subsistence on the one hand and his claims for the mileage allowance on the other. Understanding of the scheme, designations and claims for night subsistence 67. Lord Bhatia relies on his understanding of “the rules in place at the time” (Q3). In terms of designation and night subsistence, he was clearly aware of the available guidance (Q3) and the extent of the scheme. In testing Lord Bhatia’s good faith, we are not assessing his conduct against the criteria endorsed by the House Committee but against any natural understanding of the scheme and “main residence” that might be held by a reasonable person. This is because the criteria endorsed by the House Committee were not designed retrospectively to define “main residence” for the purpose of the scheme but were designed only as criteria to be applied to the retrospective examination of certain members’ claims. We asked Lord Bhatia for his understanding of “main residence”. He described it as his “principal home” (Q263), “where I live” (Q262). Lord Bhatia’s two definitions of “main residence” are acceptable natural meanings of “main residence” for the purpose of the scheme: he was under no misapprehension of the terms of the scheme. 68. Lord Bhatia’s stated purpose in acquiring the Reigate property was to downsize from the Hampton property. This would be a legitimate reason to change one’s designated main residence. What we must now consider is whether the facts demonstrate a failed but genuine attempt at downsizing or a deliberate misrepresentation of the position. 69. In favour of a failed but genuine attempt at downsizing his principal home ‘where he lives’ are his age; his experimentation with the property for 18 months

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33

before he designated it as his main residence; that he furnished the property in part from Hampton; that he kept some of his possessions in Reigate, including clothes, as he required; and that his health deteriorated at the end of the period leading to redesignation. 70. Against this being a genuine attempt at downsizing is that Lord Bhatia made no concentrated attempt to live in the Reigate property despite his understanding of “main residence” and telling the Finance Department that he would be “moving to” the Reigate property: regular day-trips; infrequent weekends; and no greater residency in recess. His wife went there less frequently than he did. The property was furnished without reducing the scale of Lord Bhatia’s possessions (Q255) and with the intention of retaining the Hampton property for the purpose of attending the House (p44G). We have also already found that Lord Bhatia leased the Reigate property for the benefit of his brother. This was not an exercise in downsizing. 71. We find that Lord Bhatia’s designation of the Reigate property was a deliberate misrepresentation of his domestic arrangements made with the intention of enabling Lord Bhatia to make use of the night subsistence element of the members’ reimbursement scheme. Claims for the mileage allowance for journeys by car 72. We have set out above the facts of Lord Bhatia’s claims for the mileage allowance for journeys by car from and to Reigate (paragraph 38): for the first five months that Reigate was his designated main residence, he claimed for travel and, in particular, he claimed for journeys on days that he did not necessarily make them. 73. Lord Bhatia stopped claiming the mileage allowance at the end of February 2008 but continued to claim night subsistence until the end of the year. He stopped claiming the mileage allowance because the system was inflexible and did not meet his needs (QQ3; 213-14) and was too cumbersome (p48K). 74. Lord Bhatia suggested that his understanding of the scheme was that journeys to the main residence had to be claimed on a Friday and the return to London on a Monday (QQ161; 197; 211); and that he was entitled to a single return journey from and to his main residence irrespective of whether he had made the actual journey (Q190). He stressed this understanding of the rules (QQ156; 161; 163). He came to this understanding through his PA, who consulted the Finance Department (Q163) and prepared his claim forms for signature (Q170). He did not consult the Finance Department himself (Q169). 75. Lord Bhatia’s understanding of this element of the scheme is wrong. The wording of the Quick Guide is clear: “Members of the House of Lords... are entitled to recover the costs of travel... incurred in connection with their parliamentary duties... Travelling Expenses - These may be claimed for journeys between main place of residence in the United Kingdom and London” (p15B). The clarity of this provision is such that Lord Bhatia’s ostensible understanding of it was unreasonable. 76. In any event, Lord Bhatia’s claims do not bear out his ostensible understanding of the rules: he often claimed for journeys to Reigate on a day other than Friday (pp24-6; Q205) and he even did so in his own hand (p34E); he did not find the scheme so cumbersome as to deter him from claiming travel from Hampton (QQ249; 250). We thus consider that Lord Bhatia did not truly hold the understanding of the rules with which he presented us.

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77. We find that Lord Bhatia made the five months of claims for the mileage allowance for journeys by car from and to the Reigate property with the intention of adding verisimilitude to his designation of that property as his main residence. Conclusion 78. We find that Lord Bhatia did not act in good faith in designating the Reigate property as his main residence and in claiming night subsistence and the mileage allowance for journeys by car from and to that property. Sanction 79. In terms of his designated main residence and claims for night subsistence, Lord Bhatia deliberately misrepresented his position to take advantage of the members’ reimbursement scheme. In terms of the mileage allowance, not only did Lord Bhatia make false claims but he presented the Sub-Committee with an understanding of the scheme which no reasonable person could hold; and he did so in an attempt to disguise the deliberate nature of his deception. 80. Lord Bhatia maintained throughout that he had acted honestly and in good faith; so he has not yet either repaid money or apologised. 81. We recommend that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the sum of £27,446 wrongly claimed, whichever is the later. His apology must be unconditional, and agreed in advance with the Chairman of the Sub-Committee, to be sufficient. We consider that the suspension should be renewed in the next Parliament if Lord Bhatia has not repaid the money by the end of the current Parliament, but that can only be a matter for the next Parliament.

DOCUMENTS RELATING TO THE MEMBERS’ REIMBURSEMENT SCHEME
House of Lords Journal 17 May 1961
Peers’ Travelling Expenses: Resolution respg.

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It was moved by the Lord Glassary (Earl of Dundee) to resolve, “That this House “approves the proposals contained in the “answer made on behalf of Her Majesty’s “Government yesterday for enabling mem“bers of the House to recover the cost of “travel by rail, sea and air in attending “the House for the purposes of their par“liamentary duties and allowances in “respect of the cost of travel by road for “that purpose.” The same was agreed to. House of Lords Journals 25 July 1991

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18. Lords Expenses—It was moved by the Lord Privy Seal (Lord Waddington) that as from 1st August 1991: (1) Members of this House, except any Lord who receives a salary under the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees, shall be entitled to recover (in addition to the costs of travel for which other provision is made) expenses certified by them as— (a) expenses incurred (otherwise than as mentioned in sub-paragraph (b) below) for the purpose of attendance at sittings of this House or of Committees of this House, or (b) expenses incurred in staying overnight away from their only or main residence where it is necessary to do so for that purpose. (2) The amount which a Lord may recover under paragraph (1)(a) of this Resolution shall not exceed the maximum daily amount for each day of attendance at a sitting of this House or of a Committee of this House. (3) In paragraph (2) of this Resolution and this paragraph “the maximum daily amount” means— (a) for a day in the year beginning with 1st August 1991, £29, and (b) for a day in any subsequent year, the amount obtained by increasing what was the maximum daily amount for a day in July of the immediately preceding year by the percentage (if any) by which the rate of day subsistence allowance payable for an absence of more than ten hours in the case of a member of the Home Civil Service of the highest subsistence classification was increased as from the end of that July. (4) The amount which a Lord may recover under paragraph (1)(b) of this Resolution shall not exceed the maximum daily amount for— (a) each day of attendance at a sitting of this House or of a Committee of this House, and (b) each other day which falls immediately before a day of attendance at a sitting of a Committee of this House if the Lord incurs expenses in staying overnight away from his only or main residence before the sitting and it is necessary for him to do so for the purpose of attendance at the sitting. (5) In paragraph (4) of this Resolution and this paragraph “the maximum daily amount” means— (a) for a day in the year beginning with 1st August 1991, £68, and (b) for a day in any subsequent year, the amount obtained by increasing what was the maximum daily amount for a day in July of the immediately preceding year by the percentage (if any) by which the highest Inner London rate of night H G E

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subsistence allowance payable to a member of the Home Civil Service was increased as from the end of that July. (6) For the purposes of this Resolution— (a) any fraction of a pound in an amount obtained under paragraph (3)(B) or (5)(b) shall be treated as a whole pound if it is not less than fifty pence, but shall otherwise be disregarded. (b) references to a sitting of this House or of a Committee of this House do not include references to a judicial sitting, and

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(c) “year” means a year beginning with 1st August; after debate, the motion was agreed to. House of Lords Journals 10 November 2004

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15. Car, bicycle and motorcycle mileage expenses—It was moved by the Lord President (Baroness Amos) to resolve that this House approves the following proposals with respect to payments of car, bicycle and motorcycle allowances to Lords for journeys which they have commenced on or after 10th November 2004— (1) The maximum allowance payable in respect of a journey by car, motorcycle or bicycle should be payable at the rate which is applicable to that kind of vehicle under subsection (2) of section 230 of the Income Tax (Earnings and Pensions) Act 2003, as amended from time to time. (2) For the purposes of paragraph (1), the reference in that subsection to “the first 10,000 miles” is to the total number of miles of travel by car by the Lord claiming the allowance, which is either— (a) undertaken for the purpose of attending this House for the purposes of his parliamentary duties, or

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(b) undertaken while on parliamentary duties within the United Kingdom; the motion was agreed to. Members’ Reimbursement Allowance Scheme General Guide

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Fifth Edition October 2005 Contents INTRODUCTION Summary Table Background Taxable status HOW TO CLAIM The Finance Department GENERAL CONDITIONS RELATING TO CLAIMS AND ALLOWANCES Eligibility to claim expenses Time limit Publication of information relating to Members’ claims for expenses ATTENDANCE AT SITTINGS AT WESTMINSTER General—Expenses Related to Attendance Travelling Expenses Spouses’and Children’s Travel Night Subsistence Day Subsistence Office Costs Other Expenses TRAVEL ON UK PARLIAMENTARY BUSINESS Definition Industry and Parliament Trust and Armed Forces Parliamentary Scheme TRAVEL TO EU INSTITUTIONS Definition

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6.2 6.3 6.4 7 7.1. 7.2 7.3 7.4 7.5 7.6 8 8.1 8.2 8.3 8.4 8.5 8.6 9 9.1 9.2 9.3 10 10.1 10.2 10.3 11 11.1 12 12.1 12.2 13 13.1 14 14.1 14.2 14.3 14.4 15 15.1 16 17

Advance Notice Travelling expenses Subsistence expenses SELECT COMMITTEE VISITS Travel Day Subsistence Office Costs Accommodation Maintenance Allowance for Second Home Night Subsistence Insurance Costs PARLIAMENTARY DELEGATIONS Travel and Subsistence Office Costs Accommodation Maintenance Allowance for Second Home Night Subsistence Expenses of a Rapporteur Insurance Costs BRITISH-IRISH INTER-PARLIAMENTARY BODY(BIIPB) Travel and Subsistence Office Costs Accommodation Maintenance Allowance for Second Home TRAVEL AS A REPRESENTATIVE OF THE HOUSE Travel and Subsistence Accommodation Maintenance Allowance for Second Home Insurance Costs LAW LORDS Travelling Expenses MINISTERS AND PAID OFFICE HOLDERS Secretarial Expenses Spouses’ and Children’s Travelling TRAVELLING EXPENSES FOR BODIES NOT SUPPORTED Specific Bodies MEMBERS’ PERSONAL ACCIDENT INSURANCE Summary Cover on the Parliamentary Estate or travelling between home and Westminster Cover whilst Travelling Exemptions FREE POSTAGE Envelopes and Postcards BROADBAND COSTS FINANCIAL ASSISTANCE TO OPPOSITION PARTIES IN THE HOUSE OF LORDS “CRANBORNE MONEY”

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1. INTRODUCTION 1.1 Summary Table K

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Member category Travel Yes Yes Yes Yes max £77 per day max £77 per day max £67 per day max £67 per day No No max £103 max £103 max £67 per day No max £67 per day 6 journeys each per year No No

Types of claim

Overnight Subsistence

Day Subsistence

Office/Secretarial Costs

Spouse and Childrens’ Travel Yes Yes Yes Yes

Accommodation Maintenance Allowance for a Second Home

Insurance cover provided

Sittings of the House

Select Committee meetings at Westminster Select Committee Visits Members of parliamentary delegations met directly Foreign & Commonwealth Office rates N/A N/A No No N/A No No No No max 40 days w £67 per day No

Additional Office Costs

max £154.50 per night max £154.50 per night met directly Foreign & Commonwealth Office rates N/A N/A Yes Yes

N/A Yes Yes

Backbench Members

UK travel on parliamentary business No

Travel to EU Institutions

British-Irish Inter-Parliamentary Body Travel as a Representative of the House max £67 per day No max £5,025.50 pa max £5,025.50 pa No No No No No No

Foreign & Commonwealth Office rates from House of Commons met directly max £67 per day No No No

Foreign & Commonwealth Office rates from House of Commons met directly

max £103 max £103 No

No Yes Yes No Yes

Yes Yes Yes Yes Yes

Salaried Members !

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Minister

Office Holder

15 journeys each No per year 15 journeys each No per year

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1.2 Background 1.2.1 Members of the House of Lords do not, in general, receive a salary in respect of their parliamentary duties. However, Members may be reimbursed actual expenses arising out of these duties, in accordance with the rules of the Members’ Reimbursement Allowance Scheme. The Members’ Reimbursement Allowance Scheme is governed by Resolutions of the House. Rules for the recovery of Members’ expenses are administered by the Clerk of the Parliaments who also has limited discretion to deal with matters that arise on claims. Points of particular difficulty or doubt may be referred to the House Committee, which supervises the arrangements for the reimbursement of expenses. The Senior Salaries Review Body carries out regular reviews of parliamentary allowances. Its most recent report on the House of Lords was issued in October 2004 (Cm 6354). Subsistence allowances are updated on 1 August each year in line with the Retails Price Index. 1.2.2 Members not in receipt of a parliamentary salary are able to recover expenses for: — daily and overnight subsistence expenses, office costs and travel expenses incurred in attending a sitting of the House or a Committee meeting at Westminster—see section 4; — travel in the UK on Parliamentary Business—see section 5; — travel to EU Institutions—see section 6; — participation in select committee visits—see section 7; — participation in official Parliamentary delegations—see section 8; — certain limited expenses for participation in the British-Irish Inter-Parliamentary Body visits—see section 9; — travel as a representative of the House—see section 10. 1.2.3 Sections 11 and 12 provide information on the reimbursement allowances available to salaried Members of the House, ie the Law Lords, Ministers and paid Office Holders. 1.3 Taxable status 1.3.1 All amounts paid in settlement of claims as detailed in thisguide represent reimbursement of actual expenses arising out ofunpaid parliamentary duty, rather than income from employment. Consequently, they are not subject to income tax, and need not be included on a tax return. 2. HOW TO CLAIM 2.1 The Finance Department 2.1.1 The reimbursement scheme is administered by the Members’ Expenses Section in the Finance Department, House of Lords which also has access to a full record of Members’ attendances at the House. 2.1.2 The Members’ Expenses Section is housed in Room 645 on the sixth floor of Millbank House. The postal address is: Finance Department House of Lords London SW1A 0PW A dedicated telephone number for Members to contact the office is 020 7219 6096. The FAX number is 020 7219 2369 and the Finance Department’s generic email address is findeptwparliament.uk. 2.1.3 All forms are available from the Members’ Expenses Section (unless otherwise stated) and from the Finance Department’s Intranet page. 2.1.4 It would not be possible to incorporate in this guide every circumstance under which Members may be able to reclaim expenses. Members are therefore encouraged to contact the Members’ Expenses Section, on the above telephone number, for general assistance or to discuss any particular points that arise from their claims. L K J H F E D

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3. GENERAL CONDITIONS RELATING TO CLAIMS AND ALLOWANCES 3.1 Eligibility to claim expenses B 3.1.1 No Member may claim expenses unless they have taken the oath of allegiance or affirmed. Members on leave of absence are also ineligible to claim. 3.2 Time limit 3.2.1 Expenses claims should be submitted within three months of the expense arising. C 3.3 Publication of information relating to Members’ claims for expenses 3.3.1 Information on the expenses claimed by each Member is published annually on the Parliamentary website. 4 ATTENDANCE AT SITTINGS AT WESTMINSTER D 4.1 General—Expenses Related to Attendance 4.1.1 The basic principle underlying the scheme is that the entitlement to recover expenses arises only in respect of attendance at sittings of the House or its committees at Westminster. These are defined as: E — sittings of the House (excluding attendance at the State Opening of Parliament and sittings for judicial business) — meetings of committees and sub-committees of the House (except judicial business) — meetings as a member of the Board of the Parliamentary Office of Science and Technology (POST) — meetings as a member of the Parliamentary Broadcasting Unit Limited (PARBUL). F 4.1.2 Members travelling on parliamentary business away from Westminster may only be reimbursed their expenses under the specific arrangements set out in sections 5 to 10. Costs incurred in respect of an attendance at any other meeting, whether held at Westminster or not, cannot be recovered unless the Member attends a meeting falling within paragraph 4.1.1 on the same day. 4.1.3 Members who wish to claim attendance expenses must complete and sign the attendance expenses claim form and forward it as soon as convenient after the end of each month, or period of claim, to the Members’ Expenses Section. A Member’s signature effectively certifies that the amount claimed has been spent for the purposes of parliamentary duties as set out above. Receipts are not required. 4.1.4 Claims for subsistence (4.4 and 4.5) and office costs (4.6) must not exceed the daily maxima for that category of expenses aggregated over the period of the claim. For example, if a Member claims for 10 days’ office costs it is possible to claim more than the normal maximum of £67 for any specific day(s) providing that the overall maximum of £670 (10 x £67) is not exceeded. 4.1.5 The latest version of the attendance expenses claim form is always available from the Printed Paper Office and the Members’ Expenses Section. The form can also be found on House of Lords Intranet under Offices & Administration, Finance Department, Members’ Services. J 4.1.6 The reverse of the attendance expenses claim form contains a “quick guide”. This includes the current maxima of the allowances and the names of the staff to contact in the Members’ Expenses Section. The “quick guide” is updated regularly and whenever the maxima of the allowances are increased, currently in August of each year. 4.2 Travelling Expenses General 4.2.1 Claims may be made only for journeys over five miles between a Member’s main place of residence in the United Kingdom and Westminster. Claims for incidental travel costs (eg those arising from short distance journeys within a five mile radius of Westminster, tolls and car parking charges) are covered by the day subsistence allowance (4.5). 4.2.2 Members seeking to receive travel costs must register their main place of residence with the Members’ Expenses Section. Members with more than one main place of residence may register an alternative main residence with the Members’ Expenses Section for the purpose of claiming travelling expenses. Registration is subject to the approval of the Clerk of the Parliaments.

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4.2.3 If a Member’s main place of residence is outside the UK, travel costs may be reimbursed from the point of entry into the UK in accordance with 4.2.4 to 4.2.14. 4.2.4 Members may recover the cost of fares incurred by them for travel by any public railway, sea, and air or bus service, or the costs of journey made by private car.

B Rail and Air 4.2.5 Members are entitled to claim the cost of first class tickets when travelling by rail and business class tickets when travelling by air. However, Members are expected to take advantage of any available cheap ticket facilities. The cost of “rail cards”, for example a senior citizen rail card, can be reimbursed. The Travel Office (020 7219 4232) is available as a service for members of both Houses to book tickets, and significant discounts are available on many routes. 4.2.6 Claims for rail travel may include the cost of sleeping berths and seat reservations. Costs of meals and refreshments are redeemable as day subsistence. 4.2.7 Claims for air travel may include fares for travel by coach between the airport and air terminal. Road 4.2.8 Claims in respect of journeys by private car are payable at: — 40p per mile up to 10,000 miles in the year ending 31 March; and — 25p per mile for mileage in excess of 10,000 miles in the same year. No other claims in respect of motoring expenses are reimbursable under the travelling expenses heading. Incidental travel costs such as tolls, congestion charges and car-parking charges can be claimed against the daily limit of the day subsistence allowance (4.5). 4.2.9 In certain circumstances claims for double journeys will be admitted, eg when a Member’s car takes him or her to, or fetches him or her from, a railway station or airport and is thereby necessarily involved in a double journey. 4.2.10 Claims in respect of hired cars/taxis may only be made on the same basis as for a privately owned car, ie Members can be reimbursed the normal mileage allowance for the miles actually travelled in the hired car/taxi. 4.2.11 Travel by private car is considerably more expensive than by public transport and Members should therefore use public transport wherever practicable. 4.2.12 Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mile. 4.2.13 Claims in respect of journeys undertaken by bicycle are paid at the rate of 20p per mile. Recall of the House 4.2.14 Should the House be recalled during a Parliamentary recess, Members who are away from their main place of residence may recover the costs necessarily incurred in attending a sitting of the House, including the cost of travel from overseas. A separate claim form is available from the Members’ Expenses Section to recover travel costs in those circumstances. 4.3 Spouses’ and Children’s Travel 4.3.1 A Member may recover the costs incurred by a wife or husband for up to six return journeys per calendar year between home and Westminster to attend Parliamentary occasions. A Member may also recover the costs incurred by each of their children, up to the age of 18, on the same basis. Such costs are reimbursed on the same basis as those for Members travel (4.2). 4.3.2 Claims under this heading should be included on the Members’ claim form. The form should clearly indicate whether the claim relates to the spouse or a named child. 4.4 Night Subsistence 4.4.1 Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London while away from their only or main residence. The maximum daily limit is £154.50. K H E D

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4.4.2 A Member whose main residence is outside Greater London and who maintains a residence in London for the purpose of attending sittings of the House may claim this allowance towards the cost of maintaining such a residence. 4.4.3 Claims for night subsistence are only permissible in respect of nights actually spent in London either immediately preceding or following attendance at a sitting or meeting described in paragraph 4.1.1 above. For example, a Member who necessarily travels to London on a Sunday and attends sittings of the House on Monday, Tuesday, Wednesday and Thursday and then returns home on Friday or later may claim night subsistence for a maximum of 5 nights at up to a maximum of £154.50 per night (ie a maximum of £772.50 for the week). However, if the Member returned home on the Thursday evening, the maximum claim for night subsistence would be 4 nights at up to a maximum of £154.50 per night (ie a maximum of £618 for the week). 4.4.4 Members who choose to travel home each night or whose main residence is within Greater London cannot claim the night subsistence allowance. 4.5 Day Subsistence

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4.5.1 Members may claim day subsistence costs within a daily limit of £77.00 for each day of attendance. 4.5.2 This allowance is intended to cover such items as the cost of meals and incidental travel costs not separately recoverable (eg short distance journeys within a five mile radius of Westminster, taxi fares, tolls and car parking charges). It also includes an element to cover the costs of providing refreshments for a Member’s visitors to the House on official business. 4.6 Office Costs 4.6.1 Members may claim office costs within a daily limit of £67.00 for each day of attendance.

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4.6.2 Such claims may include the cost of secretarial help, research assistance, and additional expenses (eg domestic costs, purchase of books and periodicals and professional subscription charges that arise out of parliamentary duties). 4.6.3 Office costs may also be recovered in respect of a maximum of 40 days per year when the House is not sitting, or the House is sitting but a Member does not attend.

G 4.7 Other Expenses Disablement H 4.7.1 Members who are disabled may recover the additional expenses of attending the House incurred by them because of their disablement and not recoverable within the normal daily limits. This may include the additional cost of travel, specialist assistance or equipment etc. Each case is considered on its merits. Applications should be submitted to the Members’ Expenses Section, and are subject to the approval of the Clerk of the Parliaments. 5. TRAVEL ON UK PARLIAMENTARY BUSINESS 5.1 Definition 5.1.1 In addition to the normal travel arrangements, the cost of journeys made on parliamentary business elsewhere within the United Kingdom may also be recovered. Claims for such travel are subject to the prior approval of the Clerk of the Parliaments and to the following conditions: — the purpose of the visit is clearly related to the work of Parliament and does not include party political, personal or private business; — claims are subject to the limitations outlined in paragraphs 4.2.4–4.2.13; L — the expenses are not recoverable from any other source; — application for reimbursement must be submitted to the Members’ Expenses Section at least one week before the date of the proposed journey; — Members must confirm the actual travelling expenses incurred after the journey has been undertaken.

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5.2 Industry and Parliament Trust and Armed Forces Parliamentary Scheme 5.2.1 The costs of journeys on business connected with the Industry and Parliament Trust (IPT) or Armed Forces Parliamentary Scheme (AFPS) may be claimed, so long as they meet the terms scheme set out above. All other claims should be addressed to the IPT or AFPS. B 6 TRAVEL TO EU INSTITUTIONS 6.1 Definition 6.1.1 Members are able to recover the costs of travelling on parliamentary duties between the United Kingdom and any European Union institution in Brussels, Luxembourg or Strasbourg or the national parliament of a European Union state or a candidate country. This is subject to a limit of two return journeys in any year from 1 April to 31 March. 6.2 Advance Notice 6.2.1 Members seeking reimbursement must obtain advance approval for the visit from the Clerk of the Parliaments. Applications should be submitted at least one week in advance of the visit, giving details of: (i) the visit’s purpose; (ii) its destination(s); (iii) its duration; and (iv) the persons or organisations to be met. Application forms are available from the Members’ Expenses Section or the Clerk of the Parliaments’ Office. 6.2.2 The Members’ Expenses Section will advise the Member whether or not the visit has been approved by the Clerk of the Parliaments, enclosing a claim form to be submitted after the visit. Claim forms should be completed and returned to the Members’ Expenses Section together with bills and receipts for any travel expenses incurred. 6.3 Travelling expenses 6.3.1 The amount payable in respect of travel, by any means, out of and into the United Kingdom is restricted to a maximum of the business class return fare between a station or airport serving London or the area of the Member’s main residence and a station or airport serving the city visited. Travel costs to and from the point of exit from and entry to the UK can be claimed on the same terms as for expenses in attending sittings of the House. 6.4 Subsistence expenses 6.4.1 Members are entitled to a subsistence allowance limited to two nights (48 hours) calculated at the Foreign and Commonwealth Office Class A standard subsistence rate current at the time of the visit. The standard subsistence rate is deemed to cover all costs for accommodation, taxis, meals and refreshments. Information on these rates is held by the Members’ Expenses Section. 6.4.2. Subsistence is calculated from the time that a Member leaves Westminster or their main residence until their return. Subsistence rates are set in the local currency of the country being visited, but reimbursement will be paid in sterling. 7 SELECT COMMITTEE VISITS 7.1. Travel 7.1.1 Travel arrangements for select committee meetings held away from Westminster, in the UK or overseas, are made by the Committee Office, which meets the costs directly. Costs of travel from home to the starting point for a visit (see 4.2 above), and of any necessary overnight stay at the start or end of the visit (see 7.5.1 below), should be reclaimed through the committee clerk. Travel and subsistence claim forms are available from the Committee Office. L J F E C

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7.2.1 Day subsistence costs for select committee meetings held away from Westminster are met directly by the Committee Office or paid at standard Government subsistence rates appropriate to the location. Members are not entitled to claim their subsistence costs under the arrangements in place for attendance at Westminster. B 7.3 Office Costs 7.3.1 Office costs are recoverable on the same basis as for attendance at the House (4.6). C 7.4 Accommodation Maintenance Allowance for Second Home 7.4.1 Members who maintain a second residence in London for the purpose of attending sittings of the House may claim an allowance of up to £103 per night whilst on a committee visit away from Westminster for continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2). D 7.5 Night Subsistence 7.5.1 If a Member needs to spend a night in London immediately before or after a committee visit and is not able to attend the House on that day a claim for night subsistence in the terms set out in Section 4.4 may be made. Such claims are subject to the prior approval of the clerk of the committee. Claims for reimbursement should be made on Travel and Subsistence forms available from the Committee Office. E 7.6 Insurance Costs 7.6.1 Details of the group personal accident insurance covering Members are given in section 14. As this cover is limited Members are advised to also make their own private insurance arrangements for losses not provided by the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed to the Member who should submit the claim to the clerk of the committee for approval. Claims for reimbursement should be made on Travel and Subsistence forms which are available from Committee Office. 8 PARLIAMENTARY DELEGATIONS G 8.1 Travel and Subsistence 8.1.1 The payment of travel and subsistence costs incurred in the United Kingdom or overseas by members of the official parliamentary delegations to the parliamentary assemblies of the Council of Europe, the Western European Union, NATO and the Organisation for Security and Co-operation in Europe, is administered by the House of Commons Overseas Office in accordance with the rules agreed by both Houses. Full details of these arrangements are set out in the Administrative Guide for Members of the United Kingdom Delegations, a copy of which is provided, on the appointment of a delegate, by the Overseas Office in the House of Commons. Parliamentary Delegation claim forms are available from the House of Commons. 8.1.2 Whilst travelling on or participating as a member of a parliamentary delegation, Members are not entitled to claim their subsistence costs under the arrangements in place for attendance at Westminster. J 8.1.3 For meetings held away from Westminster, in the UK or overseas, travel is arranged by the Delegation Secretary. Costs are normally met directly by the House of Commons Overseas Office. Costs of travel from home to the starting point for a visit may be claimed as detailed in 4.2 above. Claims for reimbursement should be made on Parliamentary Delegation claim forms which are available from the House of Commons Overseas Office. 8.2 Office Costs 8.2.1 Office costs are recoverable from the House of Lords on the same basis as for attendance at the House (4.6). L 8.3 Accommodation Maintenance Allowance for Second Home 8.3.1 Members who maintain a second residence in London for the purpose of attending sittings of the House may claim an allowance of £103 per night whilst on a Parliamentary Delegation away from Westminster for continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2).

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8.4 Night Subsistence 8.4.1 If a Member needs to spend a night in London immediately before or after a delegation visit and is not able to attend the House on that day a claim for night subsistence in the terms set out in Section 4.4 may be made. Such claims are subject to the prior approval of the Clerk of the Overseas Office. Claims for reimbursement should be made on Travel and Subsistence forms available from the House of Commons Overseas Office. 8.5 Expenses of a Rapporteur 8.5.1 If a member attends a delegation in the capacity of Rapporteur then only office costs and the accommodation maintenance allowance for a second home may be claimed (8.2 to 8.3) above. Other expenses are met by the organisation which appointed the Rapporteur. 8.6 Insurance Costs 8.6.1 Details of the group personal accident insurance covering Members are given in section 14. As this cover is limited Members are advised to also make their own private insurance arrangements for losses not provided by the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed to the Member who should submit the claim to the Clerk of the Overseas Office (020 7219 3130) for approval prior to the visit. Claims for reimbursement should be made on Travel and Subsistence forms which are available from the House of Commons Overseas Office. 9 BRITISH-IRISH INTER-PARLIAMENTARY BODY (BIIPB) 9.1 Travel and Subsistence 9.1.1 The House of Lords has no responsibility for meetings and visits organised by the BIIPB and claims for travel and subsistence expenses are dealt with by the House of Commons. Contact details are available via the Parliamentary Intranet Index page. 9.2 Office Costs 9.2.1 Office costs are recoverable on the same basis as for attendance at the House (4.6). 9.3 Accommodation Maintenance Allowance for Second Home 9.3.1 Members who maintain a second residence in London for the purpose of attending sittings of the House may claim an allowance of £103 per night whilst attending meetings of the BIIPB away from Westminster for continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2). 10 TRAVEL AS A REPRESENTATIVE OF THE HOUSE 10.1 Travel and Subsistence 10.1.1 All expenses are met by the Overseas Office which has responsibility for travel by Members overseas as representatives of the House. Details may be obtained from the Clerk of the Overseas Office (020 7219 3130). 10.2 Accommodation Maintenance Allowance for Second Home 10.2. Members who maintain a second residence in London for the purpose of attending sittings of the House may claim an allowance of £103 per night whilst travelling as a representative of the House away from Westminster for continuing accommodation costs incurred, on the same basis as the Night Subsistence Allowance (4.4.2). 10.3 Insurance Costs 10.3.1 Details of the group personal accident insurance covering Members are given in section 14. As this cover is limited Members are advised to also make their own private insurance arrangements for losses not provided by the group policy. Any relevant insurance cost incurred for a specific visit may be reimbursed to the Member who should submit the claim to the Clerk of the overseas Office for approval. Claims for reimbursement should be made on Travel and Subsistence forms which are available from the Overseas Office. L K J G F D C

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11.1.1 Lords of Appeal in Ordinary (the “Law Lords”) are able to claim travel expenses between their main residence and Westminster at any time during the law term. 12 MINISTERS AND PAID OFFICE HOLDERS 12.1 Secretarial Expenses

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12.1.1 Ministers and other paid Office Holders in the House of Lords are able to recover expenses for secretarial assistance certified as incurred by them in the performance of Parliamentary duties. The maximum amount recoverable in the twelve month period commencing 1 August 2005 is £5,025.50. 12.1.2 A certificate should accompany the evidence of expenditure. Templates of documents required are provided by the Members’ Expenses Section.

D 12.2 Spouses’ and Children’s Travelling 12.2.1 A Lords’ Minister or paid Office Holder who maintains a permanent home outside Greater London may claim for the cost of journeys undertaken between home and Westminster by his or her spouse and dependant children, up to a limit of 15 return journeys for each spouse or child per calendar year. E 13 TRAVELLING EXPENSES FOR BODIES NOT SUPPORTED 13.1 Specific Bodies F 13.1.1 The House of Lords does not have any responsibility for visits organised by the Commonwealth Parliamentary Association (CPA) or Inter-Parliamentary Union (IPU). Any claims for expenses should be addressed to the appropriate organisation. 14 MEMBERS’ PERSONAL ACCIDENT INSURANCE G 14.1 Summary 14.1.1 The House maintains an insurance policy to cover Members for accidents whilst on the Parliamentary Estate, whilst travelling between home and the House and whilst travelling on official parliamentary business. For insurance purposes, official parliamentary business is defined as trips, visits or attendance at events where the House has paid Members’ travelling expenses. Currently, this includes: H — Travel under the UK Parliamentary Business travel scheme (section 5) — Travel to EU Instritutions (section 6) — Select Committee visits (section 7) — Parliamentary Delegations (section 8) J — BIIPB (section 9) — Travel as a representative of the House (section 10). A brief overview of cover provided is shown below. Members should consult the full details of the policy to ascertain if this provides sufficient personal cover. The policy can be viewed on the Finance Department’s intranet page. 14.2 Cover on the Parliamentary Estate or travelling between home and Westminster 14.2.1 The following benefits are provided: L Accidental death (benefit may vary subject to existing medical conditions)—£175,000 Permanent total disablement and or disabling injuries (up to age 75)—up to a maximum of £175,000 Temporary total disablement (up to age 75)—£200 per week for up to 104 weeks Accident medical expenses—maximum of £10,000 per person

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14.3 Cover whilst Travelling 14.3.1 In addition to the benefits shown above, the following cover is provided for Members whilst travelling within the UK (where the trip involves an overnight stay away from London or includes air travel) or overseas on official parliamentary business: Medical Expenses Rescue Personal Belongings Money Personal Liability Hijack Legal Expenses Supplementary Travel Expenses 14.4 Exemptions 14.4.1 The following terms and exemptions apply: (a) Cover is not automatic in respect of travel to certain countries. Currently, the Finance Department must give prior notification to the insurer for journeys to Afghanistan, Chechnya, Iraq, Israel and the Occupied Territories, Saudi Arabia, and Yemen. The list of countries and cover available may vary from time to time: if in doubt please consult the Finance Department. (b) Whilst travelling, an aircraft accumulation limit of £2 million applies. Based on the maximum sum insured of £175,000, this will allow a group of 11 Members to travel together. (c) For travel in single engine aircraft (and helicopters), the accumulation limit is reduced to £525,000 or full cover for three Members. (d) Additional restrictions apply and Members should consult the Finance Department or the policy for full details. 14.4.2 The Finance Department should be notified of any claims. G 15 FREE POSTAGE 15.1 Envelopes and Postcards 15.1.1 Postage-paid envelopes and postcards are available from the Printed Paper Office (PPO) for Members’ correspondence on Parliamentary business. Supplies may be collected by Members in person, or by Members’ staff if authorised in advance by the Member concerned. Those collecting envelopes and postcards will be asked to sign for them. 15.1.2 A maximum of 100 of each type of envelope or postcard may be issued to a Member on any one day. Small quantities (up to 50 in total with a maximum of 10 of each type) may be sent by post to Members’ private addresses on receipt by the PPO of a signed order form. 15.1.3 For further details or forms please contact the PPO (tel: extension 3960 or 3038, or email to quingwparliament.uk). 15.1.4 Members are reminded that prepaid envelopes and postcards may not be used: — For correspondence of a business, commercial or personal nature; — For the correspondence of a parliamentary group which includes persons other than parliamentarians; — In connection with party political fund raising or campaigning; — For issuing circulars of any description (ie an unsolicited letter sent in identical or near identical form to a number of addresses); — For internal mail (mail within the Parliamentary estate); or — For overseas mail (including Europe and the Republic of Ireland). L K H F £2,500,000 unlimited £2,500 (single article limit £1,500) £5,000 (cash limit £1,000) £2,000,000 £15,000 £25,000 £15,000 (for travel and accommodation expenses of family visiting) B

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15.1.5 Members are also asked to recognise the need to avoid wastage of prepaid envelopes and postcards, on which the House will have already paid the postal charge. In particular, envelopes and cards should not be used for making notes or for internal mail of any kind; nor should they be left unused and forgotten in an office. Although there is no formal limit on the number of prepaid envelopes available to Members, Members are nevertheless asked to keep their requests to modest numbers. 16 BROADBAND COSTS 16.1 A Member who has borrowed an official laptop computer is entitled to apply for an ASDL connection for which no charge is made. If this is not technically possible then a Member can be reimbursed the cost of installation and rental of an ISDN line. Further details and forms are available from the Computer Office (020 7219 6061). 17 FINANCIAL ASSISTANCE TO OPPOSITION PARTIES IN THE HOUSE OF LORDS “CRANBORNE MONEY”

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17.1 A scheme for providing financial assistance to the Official Opposition and the second largest opposition party in the House of Lords to assist them in carrying out their parliamentary business was introduced in October 1996. A similar scheme known as “Short money” has been in operation in the House of Commons since 1975. The scheme was extended in October 1999 to include assistance for the Convenor of the CrossBench Peers. 17.2 The amounts payable are uprated annually in April in line with the retail prices index. The sums paid to the parties and the Convenor are subject to independent audit. 17.3 Each party is responsible for the allocation of its individual entitlement and any matters concerning financial assistance should be referred to the Leader of the Party concerned or to the Convenor.

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The Members’ Reimbursement Allowance Scheme Quick Guide, September 2005 [This guide is printed on the reverse of the claim form. The front of the claim form is printed at p27.] This “quick guide” provides brief details of the reimbursement allowances available to Members of the House of Lords. It includes the current maxima of the allowances and the staff to contact in the Finance Department. The “quick guide” will be updated regularly and whenever the maxima of the allowances are increased. Full details of the scheme are set out in the “General Guide”, which is available in the Printed Paper Office and which can also be found on the House of Lords Intranet under Offices & Administration, Finance Department, Members’ Services.

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H Members of the House of Lords, who are not in receipt of a salary as a Minister, Office Holder or Lord of Appeal in Ordinary are entitled to recover the costs of travel, subsistence and secretarial assistance incurred in connection with their parliamentary duties, as set out below. J (i) Night Subsistence—Members whose main residence is outside Greater London may claim expenses, within a daily limit of £154.50 (from 1 August 2005 to 31 July 2006), for nights spent away from their only or main residence for the purpose of attending sittings of the House a) where they have incurred expenses of overnight accommodation in London or; b) as a contribution towards the costs of maintaining a London residence in connection with their parliamentary duties. Claims can only be made in respect of days of attendance. (ii) Day Subsistence and Incidental travel—Only claimable on days of attendance. This allowance is intended to cover such items as the cost of meals and incidental travel costs (e.g. short distance journeys within a five mile radius of Westminster, taxi fares, tolls and car parking charges) not separately recoverable. Daily limit £77.00 (from 1 August 2005 to 31 July 2006). Claims can only be made in respect of days of attendance. (iii) Office Costs—Claims may include the cost of secretarial help, research assistance and where appropriate, the cost of providing and maintaining necessary equipment together with the cost of certain additional expenses, including telephone, internet, computer and IT costs (e.g. domestic costs, purchase of books and periodicals and professional subscription charges that arise out of parliamentary duties) within a limit of £67.00 (from 1 August 2005 to 31 July 2006), for each day of attendance at the House, plus an additional 40 days for which a separate claim form is available.

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(iv) Claims for subsistence ((i) and (ii)) and office costs (iii) must not exceed the daily maxima for that category of expenses aggregated over the period of the claim. For example, if a Member claims for 10 days’ office costs it is possible to claim more that the normal maximum of £67 for any specific day(s) providing that the overall maximum of £670 (10 x £67) is not exceeded. (v) Travelling Expenses—These may be claimed for journeys between main place of residence in the United Kingdom and London by any public railway, sea, air or bus service. Claims in respect of journeys by private car are restricted to an allowance of 40p per mile up to 10,000 miles then 25p thereafter. Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mile and by bicycle at the rate of 20p per mile. Members who wish to claim any of the expenses detailed above should complete and sign the claim form and forward it as soon as convenient after the end of each month, or period of claim, to the Accountant, House of Lords. Claims are not admissible retrospectively for more than three months prior to the month in which the claim is made. Other Expenses—Members may also claim reimbursement for expenses incurred in respect of: Spouse and Children’s Travel, Travel on UK Parliamentary Business, Travel to EU Institutions, Select Committee Visits, Travel as Representative of the House and Parliamentary Delegations. Details of these schemes can be found in the ‘General Guide’ (see above). If in doubt please contact the Finance Department.

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The scheme is administered by the Finance Department, House of Lords which also has access to the full record of Lords’ attendances. Members are encouraged to contact the Finance Department, House of Lords for general assistance, or to discuss any particular points that arise from their claims. The Finance Department is based on the sixth floor of Millbank House. Members’ Reimbursement Allowances are dealt with in Room 645. The postal address is “The Finance Department, House of Lords, London, SW1A 0PW”. A dedicated telephone number for Peers to contact the office is 0207 219 6096. The members expenses supervisor is Maureen Buck. In the autumn of each year, the House publishes information relating to the expenses claimed by each Member for the preceding financial year.

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The Clerk of the Parliaments’ Guidance on the Investigation of Complaints Relating to Members’ Expenses Published 20 October 2009 Guidance on complaints relating to Members’ expenses The Clerk of the Parliaments is the Accounting Officer for the House of Lords and is responsible for ensuring that public money is used properly. In that capacity he will take steps to investigate Members’ expenses claims if he is concerned that there may have been a breach of the rules. Any complaints relating to expenses claims by Members of the House of Lords should be addressed to the Clerk of the Parliaments. All complaints made will be considered by the Clerk of the Parliaments in the first instance. In June 2009, the House of Lords House Committee endorsed the following procedures for the Clerk of the Parliaments in dealing with complaints relating to Members’ expenses: a) The Clerk of the Parliaments will give consideration to all complaints he receives. He is able to dismiss a complaint after initial consideration if he deems it to be vexatious, frivolous or outside his remit. b) If he decides to proceed with an investigation, the Clerk of the Parliaments will put the substance of any allegations to the Member concerned, and ask that Member for a written response. The investigation process would normally include examination of the claim forms in question and an interview with the Member concerned. The Clerk of the Parliaments is able to call on the advice of a small sub-group of members of the House Committee to consider the preliminary findings of his investigations on individual complaints. As recommended by the Committee for Privileges in November 2008, the Clerk of the Parliaments is also able to call upon the assistance of the SubCommittee on Lords’ Interests in complex cases.

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c) If, following his investigation, the Clerk of the Parliaments decides not to uphold a complaint, he informs the complainant at this point. The results of his investigation are published on the parliamentary website. Normally the Clerk of the Parliaments seeks to respond to complaints within a period of three months. d) In any instances where it is not possible for the Clerk of the Parliaments to come to any clear conclusion on a complaint; or where he considers that a Member has been found in breach of the rules, he would make a report to the House Committee, which is responsible for the supervision of the Members’ Expenses Scheme. If, in a particular instance, the House Committee considers that a sanction against a Member may be appropriate, it would refer the matter to the Committee for Privileges. e) If, at any point in his investigation of a complaint, the Clerk of the Parliaments considers that there are sufficient prima facie grounds to justify reporting a matter to the Police for them to consider a possible criminal investigation, he will proceed accordingly and suspend his own investigation of a complaint until the question of possible criminal proceedings has been resolved.

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Published Extract from the Minute of the House Committee Meeting of 26 January 2010 Members’ expenses: investigation of complaints The Clerk of the Parliaments spoke to his memorandum (H/09-10/8) [RESERVED].

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As detailed in the paper, he reported that he had already come to decisions on a number of complaints. He emphasised that he was operating under the current scheme, one of the weaknesses of which was that there was no clear definition of a main residence. He had however taken the view, within the context of the individual assessment of each case, that there needed to be a minimum threshold beyond which it would be inappropriate for a Member to designate a property as a main or only residence, and consequently claim overnight subsistence when staying in London. He sought the endorsement of the Committee of the criteria which he was incorporating into his assessment of cases where frequency of visits was an issue: ie that the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses. These factors would be taken into account, along with other evidence, when assessing the validity of the designation of a main residence. He drew the attention of the Committee to the fact that it was probable that more stringent requirements would be a feature of the new scheme for Members’ expenses. He also raised the issue of whether a property that was occupied by a relative other than a spouse or partner could in any circumstances be designated as a main residence under the current scheme. It was felt that this could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities. The Committee considered the extent to which the Clerk of the Parliaments should rely on written assurances given by Members in respect of his enquiries, especially when there was significant disparity between the assurances given by Members and the allegations made against them. The Committee acknowledged the limitations on the investigative powers of the Clerk of the Parliaments and concluded that the Clerk was justified in relying on explicit written assurances from Members, noting that the consequences for a Member found to have misled the Clerk would be serious. If, however, a Member was not able to give the Clerk the assurances he sought, it would be appropriate to refer the case to the Sub-Committee on Lords’ Interests. There were still a number of outstanding complaints but the Clerk of the Parliaments now proposed to publish in the near future his conclusions on all the cases on which he had reached decisions. The Committee took note.

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The Clerk of the Parliaments’ Report on Lord Rennard Published 20 October 2009 Letter from Mr Michael Pownall, the Clerk of the Parliaments, to Mr Christopher Galley dated 20 October 2009 Complaint against Lord Rennard I am writing in connection with your complaint concerning Lord Rennard’s claims for reimbursement of expenses. I can report that I have completed my investigation. At the outset, I asked Lord Rennard to respond to your complaint and I have discussed it with him. So far as your complaint about Lord Rennard’s participation in the work of the House of Lords—in particular over the period April 2007 to March 2008—is concerned, this has no bearing on the designation of his main residence. The number of times that Lord Rennard spoke and voted in the House is a matter for him. In fact, Lord Rennard’s record over the period in question shows that he was far from inactive in the House and these statistics do not necessarily reflect the wider contribution which a Member makes to the work of the House. I should explain that claims for expenses arising from overnight subsistence can only be authorised for days on which a Member’s attendance at the House is recorded. Your allegation that Lord Rennard did not attend on all the days for which he claimed overnight subsistence is not, therefore, well-founded; and I accordingly do not uphold this aspect of the complaint. Turning to your complaint about the designation of Lord Rennard’s main residence, the direct answer to the question why he did not claim overnight subsistence between 2003 and 2007 is that during this period his only residence was in Stockwell. So far as Lord Rennard’s re-designation of his main residence in 2007 is concerned, he has explained to me that his circumstances changed in 2007 when his wife took early retirement and he made significant changes to his lifestyle. He bought a flat in Eastbourne in October 2007 and registered this as his main residence with the House of Lords’ Finance Department. Taking up some of the detailed points which you made, he has explained to me that he and his wife are on the electoral register for both residences and that they had voted in Eastbourne in the recent European and County Council elections; that they were automatically deemed to be members of the Stockwell Park Residents Association; and that his Liberal Democrat party membership had remained in London since party rules provide for membership to be held where you live or where you work. He explained that he is, nonetheless, actively involved with the local party in Eastbourne. He stressed too that he and his wife pay council tax for the Eastbourne property. I have also reviewed some of Lord Rennard’s recent claim forms. These confirm that he travels to and from his Eastbourne address quite regularly at weekends (perhaps two out of three). He indicated that he normally resides there in recess periods (i.e. he stays there more than in his London property whilst recognising that he would often also be away from both homes through other work or holidays.) He also indicated that until recently his employment had entailed extensive periods of work and travel around the country of weekends. In view of the assurances by Lord Rennard about the change in his circumstances and the time he spends in Eastbourne, and in the absence of any definition of main address in the current guidance to the House of Lords’ Members Expenses Scheme, I have come to the conclusion that I should not uphold the complaint. It may be helpful to point out that the Senior Salaries Review Body is currently undertaking a review of the whole system of financial support for Members, and in June of this year they were asked by the House of Lords’ House Committee to consider the need for possible definitions of main residence. In these circumstances and after due consideration, I have decided not to uphold your complaint: I have concluded that Lord Rennard’s claims for expenses were in accordance with the rules and guidance on Members’ expenses applicable at the time. In line with our publication policy, we will make this letter available on the Parliamentary website. 20 October 2009 K F

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The Clerk of the Parliaments’ Reports on Nine Members Published 9 February 2010 Letter from the Clerk of the Parliaments to Mr Frank Cannings dated 9 February 2010 B I am now in a position to respond to a number of the complaints which you made about certain Members of the House of Lords on 17 November 2009 and the further complaint which you made on 20 January 2010. The complaints all related to newspaper allegations that certain Members had made inappropriate use of the Members’ reimbursement scheme. I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities include supervision of the system of financial support for Members) took the decision to refer the current system of financial support for Members, who as you will be aware are unsalaried, for external review by the independent Review Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)— http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lords debated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the current scheme will, therefore, be replaced by a new scheme with clearer definitions and rules. I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on 30 November 2009 and which will take effect from 1 April 2010, complaints about Members’ expenses will be considered by an independent House of Lords Commissioner for Standards. My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administered in accordance with the resolutions of the House on which it is founded, taking account of decisions by the House Committee. It is not for me retrospectively to devise rules for the current scheme which have not been in place to-date. The current scheme entitles Members to claim for travel and overnight subsistence in London when attending the House if “their main or only residence” is outside London. The principal complaint, both of the newspapers and yourself, has been that some Members have designated as their main residence a property which is not in practice their main residence in order to claim overnight subsistence. A feature of the current scheme is that it operates without any clear definition of “main residence”. However, I have taken the view that there must be a minimum threshold below which it would be inappropriate for a Member to designate a property as a “main or only residence” and consequently to claim overnight subsistence when staying in London. Bearing this in mind, I have sought to establish some essential criteria against which the case of each individual Member can be considered. At my request, the House Committee has accordingly agreed a basis on which a threshold could be set below which the current scheme should not permit a claim bearing in mind any natural meaning of the term “main or only residence”. The threshold set by the Committee is that the main residence has to be visited with a degree of frequency: in the order of at least once a month, over the year, when the House is sitting. Time spent at the main residence when the House is in recess is also a relevant factor. Ownership is not a requirement but is a factor in each case. I should point out that some of the designations of main residence which have been acceptable under the current scheme may not meet the criteria of a new scheme. J I have sought and received confirmation from the House Committee of the principal that there will be circumstances in which it is appropriate to designate as a main residence a property which is occupied by a relative, other than a spouse or partner. Such a designation can be made properly under the current scheme, subject to the thresholds set out above, and dependent on the Member’s connection with the property, including their financial contribution to the running costs. For every Member about whom a complaint has been submitted, I have examined the expenses claim forms from the date from which the House of Lords’ Administration retain them (April 2006) to the start of the summer recess in 2009 (July 2009). Those forms show clearly when the Member claimed overnight subsistence and reimbursement of travel costs from and to the main residence. Where I have written to Members, I have sought to obtain answers to certain standard questions about their circumstances, including: (i) whether the Member owns or leases the main residence; L (ii) where the Member was resident in each recess; (iii) what factors led the Member to designate the residence as the main residence; (iv) whether the pattern of journeys indicated by the Member’s claim forms accurately represents the frequency of residency at the main residence.

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In each case, I have relied on the Member’s explicit written assurances; in particular the assurance that the pattern of journeys indicated by the Member’s claim forms accurately represents the frequency of stays at the main residence. I have not upheld the following complaints, listed in alphabetical order, for the reasons given:

B Baroness Barker Baroness Barker claimed night subsistence and travel reimbursement from a designated main residence in Sussex. According to her pattern of travel claims, she was resident in Sussex about three weekends in four in term-time (i.e. periods when the House is sitting). She has assured me in writing that her claims are an accurate record of her journeys and that she was resident in Sussex for more of the recesses in question than she was in London. She did not own the Sussex property but paid rent for her use of it and met some expenses. Given Baroness Barker’s assurances, I consider that her designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against her. Lord Colwyn Lord Colwyn claimed night subsistence and travel reimbursement from a designated main residence in Gloucestershire. According to his pattern of travel claims, he was resident in Gloucestershire more than three weekends in four in term-time. He has assured me in writing that his claims are an accurate record of his journeys and has provided me with evidence of them; he has also assured me that he lives predominantly in Gloucestershire when the House is not sitting. He owns his Gloucestershire property and rents his London property for the purpose of attending the House. 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. Lord Haworth Lord Haworth claimed night subsistence and travel reimbursement from a designated main residence in Ross & Cromarty. According to his pattern of travel claims, he was resident in Ross & Cromarty twice a month and occasionally more frequently in term-time. I have evidence of each of his journeys: he travelled by air and vouching is required for reimbursement of air travel. I consider that his designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against him. Baroness Hayman Baroness Hayman claimed night subsistence and travel reimbursement from a designated main residence in Norfolk from the start of our retained records in April 2006 until her election as Lord Speaker in July 2006; thereafter she has not been eligible to claim for overnight subsistence from the Members’ reimbursement scheme and has been paid the office-holder’s allowance under section 5 of the Ministerial and Other Salaries Act 1971. Baroness Hayman’s travel claims under the Members’ reimbursement scheme for the period April to July 2006 show that she was resident in Norfolk about three weekends in four during term-time. In September 2009 she made a full statement to the Sunday Times newspaper which I have seen and, in light of which, the article in the newspaper acknowledged that there was no question of the rules of the scheme having been broken. Baroness Hayman and her husband own their home in Norfolk and it is quite clear to me that they live there in recesses and at weekends, when pressure of work permits. I consider that her designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against her. Baroness Morgan of Drefelin Baroness Morgan of Drefelin claimed night subsistence and travel reimbursement from a designated main residence in Cardigan from the start of our retained records in April 2006 until she joined the Government in January 2007. According to her pattern of travel claims, she was resident in Cardigan one or two weekends a month in term-time. She has assured me in writing that her claims are an accurate record of her journeys; that she made further journeys from and to Cardigan for which she did not claim; and that she was resident in Cardigan for the Easter, Whitsun and summer recesses of 2006. She and her husband own the Cardigan property. L H F D

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Given Baroness Morgan’s assurances, and the specific guidance to me from the House Committee that occupation of a residence once a month and for periods of the recess is sufficient for designation of a main residence, I consider that her designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against her. Lord Morris of Manchester Lord Morris of Manchester claimed night subsistence and travel reimbursement from a designated main residence in Manchester from the start of our retained records in April 2006 until May 2008 when, due to illhealth, he re-designated his main residence to London. According to his pattern of travel claims, he was resident in Manchester about three weekends in four in term-time and occasionally more frequently. I have evidence of each of his journeys: he usually travelled by train and bought his tickets using the Members’ Travel Card. I consider that his designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against him.

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Baroness Northover Baroness Northover claimed night subsistence and travel reimbursement from a designated main residence in Sussex. According to her pattern of travel claims, she was resident in Sussex every weekend in term-time. She has assured me in writing that her claims are an accurate record of her journeys; she has further explained to me that the Sussex property was the family farm, owned in her and her mother’s names, for which she has been solely responsible since her father’s death in 2006. At the time the farm was being wound-up. She has provided me with evidence of her residency and involvement with the farm during the period in question. I consider that her designation met a test of main residence under the current scheme and accordingly do not uphold the complaint against her.

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Baroness Thornton Baroness Thornton was appointed a Minister in January 2008. The period during which claims were submitted under the Members’ reimbursement scheme with which I am concerned is therefore confined to the period April 2006 to January 2008.

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In 2001 Baroness Thornton designated as her main residence a property in Shipley, Yorkshire. The present property in Shipley was purchased in 2005. According to her pattern of travel claims for the period with which I am concerned, she visited the residence very frequently: every weekend in term-time, with a few visits not including overnight stays (ie, a return trip to Shipley within a day). She has confirmed her pattern of travel claims to me and that she continued to visit Shipley regularly at weekends during recesses. The property was owned and is occupied by Baroness Thornton’s elderly and disabled mother. Baroness Thornton has met the mortgage and other costs of the property. Her legal interest in, and the financial contributions of the two parties to, the property where recorded in 2007 in a private Declaration of Trust, which updated a Declaration of Trust for the property owned prior to 2005. Baroness Thornton’s solicitor has confirmed this in writing. The Declaration was recorded at the Land Registry in July 2009. In addition, Baroness Thornton has family and political connections in Shipley. She is registered to pay council tax in Shipley and is on the electoral roll there. As I have already mentioned, the House Committee has indicated that there will be circumstances in which it is appropriate to designate as a main residence a property which is occupied by a relative, other than a spouse or partner. Taking into account Baroness Thornton’s well-established connection with the property in Shipley and the frequency of her visits, I have decided that this designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against her. Baroness Whitaker Baroness Whitaker claimed night subsistence and travel reimbursement from a designated main residence in Sussex. According to her pattern of travel claims, she was resident in Sussex about three weekends in four in term-time. She has assured me in writing that her claims are an accurate record of her journeys and that she wsa usually resident in Sussex in recess. She and her husband rent the Sussex property and her husband spends most of the week in Sussex, irrespective of sittings of the House. Given Baroness Whitaker’s assurances, I consider that her designation meets a test of main residence under the current scheme and accordingly do not uphold the complaint against her.

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Other Complaints I have yet to complete my investigations into complaints about a number of other Members. As with the investigations covered in this letter, the outcome of each will be made public. I have suspended my investigation into certain other Members pending the conclusion of police investigations. On Friday 5 February 2010 the Director of Public Prosecutions announced that Lord Clarke of Hampstead would not face prosecution. As I regard this case as complex and serious, I have today referred the complaint relating to Lord Clarke to the Sub-Committee on Lords’ Interests for examination. This letter has not convered two other Members who were the subject of your complaint. A member of the public complained about Lord Rennard on 16 June 2009 and I dismissed that complaint, with reasons, on 20 October 2009. I enclose a copy of my report to the complainant in that case. In addition, I have not considered your complaint about Baroness Scotland of Asthal because she was a Minister throughout the period for which we hold records and so not entitled to claim under the Members’ reimbursement scheme. 9 February 2010 The Clerk of the Parliaments’ Reports on Four Members Published 31 March 2010 Complaints Relating to Members’ Expenses This document includes my responses to four complaints over Members’ expenses claims. The responses cover: Lord Bhatia Viscount Falkland Baroness Goudie Lord Sheldon 1. Lord Bhatia—Reponse to Angus Robertson MP On 26 July 2009 you submitted a complaint to me about the expense claims of Lord Bhatia. The Committee for Privileges has agreed that in complex or serious cases I may refer complaints about expense claims to the Sub-Committee on Lords’ Interests. This letter is to inform you that I have conducted an initial investigation and have now referred the complaint to the Sub-Committee for further investigation. In line with our publication policy, we will make this letter available on the Parliamentary website. H 2. Viscount Falkland—Reponse to a Member of the Public On 17 November 2009 you submitted a complaint to me about the expense claims of Viscount Falkland. I have investigated the complaint and I am now in a position to inform you of my conclusion. In line with our publication policy, we will make this letter available on the Parliamentary website. I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities include supervision of the system of financial support for Members) took the decision to refer the current system of financial support for Members, who as you will be aware are unsalaried, for external review by the independent Review Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)— http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lords debated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the current scheme will, therefore, be replaced by a new scheme with clearer definitions and rules. I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on 30 November 2009 and amended on 30 March 2010 which will take effect from the start of the new Parliament, complaints about Members’ expenses will be considered by an independent House of Lords Commissioner for Standards. My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administered in accordance with the resolutions of the House on which it is founded, taking account of decisions by the House Committee. It is not for me retrospectively to devise rules for the current scheme which have not been in place to-date. J G E D C B

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As with my investigations into other complaints, I have examined Viscount Falkland’s expense claim forms from the date from which the House of Lords’ Administration retains them (April 2006) to July 2009, when he stopped claiming night subsistence and travel reimbursement in respect of a designated main residence in Kent. According to his pattern of travel claims, Viscount Falkland was resident in Kent every weekend during Parliamentary terms over this period. He has assured me in writing that his claims are an accurate record of his stays in this property; and that he also spent part of each Easter and Summer recess in Kent. He neither owned nor leased the Kent property (which is owned by a relative) but he had sole use of it in the period in question and was partly responsible for its furnishing. In coming to a conclusion on this complaint, I am relying on the assurances which Viscount Falkland has given me about the frequency of his stays in Kent as reflected in his travel claims. I should also indicate that when the allegation was made that the residence was not a proper main residence, Viscount Falkland, in a statement, accepted that the absence of criteria for what constituted a main residence had enabled him to claim overnight subsistence for the Kent property, and he accepted that this might be seen as a loop-hole in the system. This has caused me some concern. However, for me the key factor in determining this complaint has been the frequency of stays in the property—every weekend without exception in term time. With this in mind, I have decided that the complaint should not be upheld. 3. Baroness Goudie—Reply to a Member of the Public On 29 October 2009 you submitted a complaint to me about the expense claims of Baroness Goudie. I have investigated the complaint and I am now in a position to inform you of my conclusion. In line with our publication policy, we will make this letter available on the Parliamentary website. I have made a report of my investigation to the House Committee (a Committee whose responsibilities include supervision of the system of financial support for Members). I have decided that the complaint should be upheld in part; and the House Committee has agreed that Baroness Goudie should be asked to repay some of the expenses claimed for overnight subsistence. Baroness Goudie has agreed to do so. It is for the Committee for Privileges and Conduct to consider Baroness Goudie’s conduct; and it will consider the complaint and my finding early in the new Parliament. The Committee will ultimately produce a report, which I will make available to you. 4. Lord Sheldon—Reply to Chris Galley, Sunlight Centre for Open Politics

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On 10 August 2009 you submitted a complaint to me about the expense claims of Lord Sheldon. I have investigated the complaint and I am now in a position to inform you of my conclusion. In line with our publication policy, we will make this letter available on the Parliamentary website. I should first indicate that in June 2009 the House Committee (a Committee whose responsibilities include supervision of the system of financial support for Members) took the decision to refer the current system of financial support for Members, who as you will be aware are unsalaried, for external review by the independent Review Body on Senior Salaries (SSRB). The SSRB published its report on 26 November 2009 (Cm 7746)— http://www.ome.uk.com/Parliamentary Pay Allowances.aspx. On 14 December 2009 the House of Lords debated and agreed to take forward the proposals submitted by the SSRB. In the course of 2010, the current scheme will, therefore, be replaced by a new scheme with clearer definitions and rules. I should also indicate that under a new Code of Conduct, which was agreed by the House of Lords on 30 November 2009 and amended on 30 March 2010 and which will take effect from the start of the new Parliament, complaints about Members’ expenses will be considered by an independent House of Lords Commissioner for Standards. My responsibility as Accounting Officer is to ensure that the Members’ reimbursement scheme is administered in accordance with the resolutions of the House on which it is founded, taking account of decisions by the House Committee. It is not for me retrospectively to devise rules for the current scheme which have not been in place to-date. As with my investigations into other complaints, I have examined Lord Sheldon’s expenses claim forms from the date from which the House of Lords’ Administration retains them (April 2006) to April 2009 when he stopped claiming night subsistence and travel reimbursement from a designated main residence in Manchester.

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Lord Sheldon designated a property in Manchester as his main residence until April last year—a property he and his wife had owned for many years. He indicated that he is still involved in the family business in the Manchester area; is still on the electoral roll there; and still involved in local politics. His immediate family regularly use the Manchester house as “an extended family home“. In 2003 he transferred the title of the property to his son, although he has retained a contractual entitlement to dwell there.

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In November 2007 Lord Sheldon’s wife suffered a serious illness and he therefore travelled less regularly to Manchester until in April 2009 he decided to designate his London flat as his main residence. He indicated that until April 2006 he had travelled to Manchester three or four times a month; and thereafter two or three times a month until November 2007. In fact, his travel claims for 2007 (for rail travel) suggest that he travelled rather less frequently, and I accordingly asked him to comment on this apparent discrepancy. I also asked him whether the utility bills relating to the Manchester property, which he had previously indicated had been in his name, had been paid by him. On frequency of travel, Lord Sheldon replied that on occasions when he travelled with his son to Manchester he did so without claiming the costs from the House. He therefore confirmed the frequency of his stays as previously indicated. On payment of utility bills, Lord Sheldon confirmed that they were paid directly by his business and subsequently charged to his personal account. The House Committee has endorsed my view that where a property is occupied by a relative other than a spouse of partner there could be specific circumstances in which it could be designated as a main residence depending on the frequency of stays and the Members’ connection with the property. I am satisfied that Lord Sheldon’s connections with the property, including some financial responsibility for it, were sufficiently strong. On the frequency of stays, he stayed in Manchester less often after his wife’s illness in November 2007 and until he designated his London flat as his main residence in April 2009. However, his travel claim forms and the subsequent assurances I received about the frequency of his stays indicate a frequency around or above the minimum threshold which I have established and which the House Committee has endorsed. With the benefit of hindsight, it may have been appropriate for Lord Sheldon to have designated his London residence as his main residence rather earlier than April 2009, but I accept that it was difficult for him to anticipate his further circumstances at the time. I have accordingly decided that the complaint should not be upheld. 31 March 2010

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LORD BHATIA’S CLAIM FORMS
Lord Bhatia’s claim forms for the period March 2006 to July 2009 are reproduced at pp27 to 40. Prefaced to those forms are: calendars representing the days on which Lord Bhatia claimed the mileage allowance for journeys by car between January 2007 and July 2009. The data are taken directly from Lord Bhatia’s claim forms. (i) Calendars representing the days on which Lord Bhatia claimed the mileage allowance for journeys by car C

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Key:
Days on which the mileage allowance was claimed Months during which night susistence was claimed Recess

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JANUARY 2007 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 APRIL 2007 HAMPTON MO TU WE TH FR SA SU FEBRUARY 2007 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MAY 2007 HAMPTON MO TU WE TH FR SA SU 1 7 8 2 3 4 5 6 4 5 6 9 10 11 12 13 MARCH 2007 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 JUNE 2007 HAMPTON MO TU WE TH FR SA SU 1 7 8 2 3 9 10

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11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

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JULY 2007 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

AUGUST 2007 HAMPTON MO TU WE TH FR SA SU 1 8 2 3 4 5 3 4

SEPTEMBER 2007 HAMPTON MO TU WE TH FR SA SU 1 5 6 7 8 2 9

9 10 11 12

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OCTOBER 2007 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

NOVEMBER 2007 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

DECEMBER 2007 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9

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10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

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MARCH 2008 REIGATE

JANUARY 2008 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

FEBRUARY 2008 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

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APRIL 2008 REIGATE MO TU WE TH FR SA SU 1 7 8 2 3 4 5 6 5 6 9 10 11 12 13

MAY 2008 REIGATE MO TU WE TH FR SA SU 1 7 8 2 3 4 2 3

JUNE 2008 REIGATE MO TU WE TH FR SA SU 1 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

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In October, Lord Bhatia claimed overnight subsistence from his main residence in Reigate, but daily travel throughout the month from Hampton. On this being brought to his attention, he claimed weekly mileage from Reigate.

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OCTOBER 2008 REIGATE

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NOVEMBER 2008 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 FEBRUARY 2009 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECEMBER 2008 REIGATE MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 MARCH 2009 HAMPTON MO TU WE TH FR SA SU 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

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APRIL 2009 HAMPTON

MAY 2009 HAMPTON MO TU WE TH FR SA SU 1 4 5 6 7 8 2 3 9 10 4 5

JUNE 2009 HAMPTON MO TU WE TH FR SA SU 1 8 2 3 4 5 6 7 9 10 11 12 13 14

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ARTICLE FROM THE SUNDAY TIMES NEWSPAPER, 26 JULY 2009
MILLIONAIRE LORD BHATIA CLAIMED £20,000 ON SMALL FLAT A MILLIONAIRE peer has claimed more than £20,000 in allowances from the House of Lords by saying that a small rented flat occupied by his brother is his main home. Last week he could not even remember its address. Lord Bhatia, a businessman and philanthropist, has lived with his wife in a £1.5m home in southwest London for 20 years. Almost two years ago he decided to “flip” the designation of his primary residence to a twobedroom flat in Reigate, Surrey, which has been his brother’s home for three years. The town is a mile beyond the M25 motorway, a boundary used by peers to define whether they live outside London for expenses purposes. By saying the Reigate flat was his main home, Bhatia was able to claim lucrative “overnight” allowances from the Lords. Peers whose main home is outside the capital are able to collect £174 a night as reimbursement for the cost of a hotel or maintaining a second home while attending parliament. Bhatia could not remember the address of the flat when repeatedly asked last week. He had to look it up and even then misspelt the name of the block. A neighbour could not recall him living there, but Bhatia insisted he had spent many weekends at the flat and said he intended to move there with his wife when he sells his family home. Angus Robertson, the SNP leader at Westminster, said he would be writing to the police and the Lords asking for an investigation into Bhatia’s claims. “These reports warrant full investigation by the House of Lords authorities and the police. This seems to be a misuse of parliamentary money to fund private or family arrangements,” he said. In recent months the Sunday Times has highlighted the need for an overhaul of the Lords’ expenses system. Unlike the Commons no new legislation is being introduced to change Lords’ allowances, despite a series of scandals. The police are already investigating the overnight allowance claims made by Baroness Uddin and Lord Clarke of Hampstead following inquiries by this newspaper. Uddin faces fresh questions about her travel expenses as it emerged that she claimed for 89 round trips to a flat at which her neighbours had never seen her. Bhatia is a 77-year-old Labour party donor who sits as a crossbencher. He is a successful businessman who has been prominent in several charities. After being made a peer by Tony Blair in 2001, he went on to lead the Edutrust Academies Charitable Trust which was formed to open and run city academies. He quit the board of the trust after a government inquiry found evidence of financial and governance mismanagement at the charity. The Sunday Times began looking into his allowance claims after examining his record in the Lords. Although his attendance record is high, he has taken part in only 15% of votes since becoming a peer and has not spoken in the House for four years. Some peers are known to “clock in” frequently, securing a daily attendance allowance without staying to do any work. Bhatia lives in a family home in Hampton, southwest London, estimated to be worth £1.5m. It is flanked by long lawns that lead to a second house he used to own, now the home of his daughter. It is 15 miles from Westminster. In March 2006, Casley Finance, a company owned by Bhatia, began renting a two-bedroom flat in a modest 1970s apartment block in Reigate, 23 miles from Westminster. His brother, Sultan, who is company secretary of Casley Finance, moved into the flat at around the same time. Sultan, who works for a charity, had left his family home after a marriage break-up. Casley Finance continued to pay the rent, service charges and utility bills. In October 2007, Bhatia informed the Lords authorities that he had changed his main address from “London to Surrey”. In the next six months he claimed £12,247 in overnight allowances. Although the figures have not yet been published, he was entitled to claim at least as much again before he changed his main address back to London in January this year. Last week Bhatia said he rented the Reigate flat because his Hampton home was too big and he and his wife wanted to downsize to a smaller property. He said his allowance claims were justified even though he continued to live in Hampton. He said he spent 40%–50% of his weekends while the Lords was sitting sharing the flat with his brother, although his wife occasionally came with him. There was little evidence that the flat was where he normally lived. He has always given Hampton as his main address to Companies House and the electoral register. K J F D B

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Bhatia admitted he stayed in Hampton during last year’s recess but said he went to Reigate when he “needed to go there”. He said he did not need to stay at the flat during recess because these were not periods when he could claim expenses. “During the parliamentary period when you’re sitting... you claim the night allowance. Outside the parliamentary period, during recess... it’s entirely up to me to decide to stay in either of the two houses.” On Thursday Sultan told a reporter he “looked after” the flat for his brother who stayed at the property “from time to time”. The flat’s only next-door neighbour said of Sultan: “He has lived there for about two or three years. He lives alone and rents the place.”

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Bhatia said he redesignated his main address back to Hampton earlier this year because he became ill and could no longer get to Reigate at weekends. He said he had acted within the rules, as he believed the flat had been his main home. “I rent it and I intend to move there,” he said. “I’m negotiating with the owner to sell the flat so we could then move there and dispose of this house, because I need to sell this house and move out to a smaller place.”

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Jonathan Calvert, Claire Newell and Solvej Krause

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LETTER OF COMPLAINT
Letter from Mr Angus Robertson MP to Mr Brendan Keith, Registrar of Lords’ Interests, dated 26 July 2009 Investigation into Parliamentary Allowances of Lord Bhatia You will be aware of recent reports in the media raising serious questions in respect of expense claims made by Lord Bhatia of Hampton, and I am writing to ask you to investigate whether a breach of the rules has been committed. An article in the Sunday Times today (26 July 2009) alleges that Lord Bhatia claimed more than £20,000 in parliamentary allowances by designating a small flat outside London, and apparently occupied by his brother, as his main home. According to the Sunday Times report, Lord Bhatia actually spent most of his time at a home in London, and could not recall the address of the small flat in Reigate that he had designated as his main home. If these facts are correct I know you will share my concerns that such actions would represent a serious misuse of public money. On consideration, I would ask you to investigate these allegations with a view to establishing whether an offence has been committed. I look forward to hearing from you in due course. 26 July 2009 E C B

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CORRESPONDENCE WITH THE HOUSE AUTHORITIES
Letter from Lord Bhatia to Mr David English, House of Lords Finance Department, dated 9 February 2004 B I am likely to buy a house in Berkshire which will be my main residence. However, I will retain my current house in Hampton which I will use during weekdays and when attending the House of Lords. Could you please confirm that it is proper for me to claim the night allowance for the days I attend the House of Lords sessions and when I stay in my London residence at Hampton. C Please also confirm the current per night allowance. 9 February 2004 D

Letter from Mr David English to Lord Bhatia dated 18 February 2004 Thank you for your letter dated 9 February 2004 regarding the proposed change of your main residence. I can confirm that members who maintain a second residence in London for the purpose of attending sittings of the House may claim the overnight allowance towards the cost of maintaining such a residence. For your information, the current overnight allowance per night is £128. 18 February 2004

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Letter from Lord Bhatia to Mr David English dated 10 September 2007 As from 1 October 2007, I will be moving to my main residence at 31 Bancroft Court Regiate Surrey RH2 7RW I will be using my Hampton House which I will use during weekdays and when attending the House of Lords.

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10 September 2007

Letter from Lord Bhatia to Ms Clare Hook, House of Lords’ Finance Department, dated 12 November 2007 J Re: Account No: 30052—October Claim Thank you for clarifying the Members’ Expense details to my PA and I confirm that I have claimed Night Subsistence as detailed in the claim form. Please deduct the inadvertently claimed mileage for London journey. I would like to submit a mileage claim from Reigate to Westminster (26 Miles coming to Westminster and 26 miles journey back home over weekend) for weeks beginning 8th, 15th, 22nd, and 29th totalling 208 miles % £83.20. Please adjust the claim accordingly and let me have the new forms to be filled. I very much appreciate your assistance. 12 November 2007 L Letter from Lord Bhatia to the House of Lords Finanace Department dated 4 February 2009 Please note that as from 1 January 2009, I have changed my residence from Reigate, (31 Bancroft Court, Reigate, Surrey RH2 7RW) to 22 Manor Gardens, Hampton, Middlesex TW12 2TU.

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I enclose my claim for expenses during the month of January 2009 made of travelling and other costs totalling £2,405.00 including two non sitting days. 4 February 2009 Letter from Mr Michael Pownall, Clerk of the Parliaments, to Lord Bhatia dated 31 July 2009 Members Expenses I thought it right to let you know that I have been asked to investigate a complaint which has been made against you concerning the Members’ Reimbursement Scheme. I should explain that it is my responsibility, both as Accounting Officer and as Clerk of the Parliaments (as set out in paragraph 1.1.1 of the current Guide to the Members’ Reimbursement Scheme) to ensure that the rules of the Scheme are properly applied; and my responsibility to investigate complaints about expenses was recognised and endorsed by the Committee for Privileges in paragraph 14 of its 4th Report of Session 2007–08. The substance of the complaint is that you designated a flat outside London, which was apparently occupied by your brother, as your main home but in fact spent most of your time at a home in London. The complainant alleges that such actions represent a misuse of public money. I should stress that in the above paragraph I am simply summarising the complaint submitted; and not making any allegation or criticism of my own. I would, however, be grateful for your comments on this complaint; and any relevent information on how you have determined your main place of residence. It would be helpful to have any comments in writing but you would be welcome to discuss this matter with me if you wish. I should explain that I will be away from the office from Monday 3 August until Wednesday 26 August. 31 July 2009 Memorandum by Lord Bhatia to the Clerk of the Parliaments dated 1 September 2009 Prepared statement of Lord Bhatia 1. Allegations/Complaint I am aware of allegations made in an article that appeared in the Sunday Times on 26 July 2009 and that as a result of this article there has been a complaint made against me concerning the Members’ Reimbursement Scheme. I am aware that the substance of the complaint is that I designated a flat outside London, in Reigate, as my main residence but that I spent most of my time at a residence within London and that it was my younger brother’s residence. I am aware that the complainant alleges that such actions represent a misuse of public money. I also note that in your letter to me of 31 July 2009 you requested my comments on this complaint and also for any relevant information on how I have determined my main place of residence. I would like to make it clear at this point that I refute any allegations or complaint made against me in relation to the reimbursement of expenses in respect of my main residence. The fact is that my brother looked after my apartment when I was away on business. 2. Main Residence Upon entering the House of Lords in 2001 my main residence was 22 Manor Gardens, Hampton, Middlesex TW12 2TU. My main residence was within the area of Greater London and therefore I made no claim for overnight subsistence. From the period of about 2003 onwards my wife and I were actively looking to “down size” our domestic residence. We have lived in the house in Hampton for almost 20 years and my family, including my grandchildren, have grown up and moved to their own homes. The House of Lords will be aware from correspondence entered into in February 2004 that at one point I was looking to buy a residence in Berkshire and I enquired whether it would be right and proper for me to claim the nightly allowance for the days that I attended the House of Lords’ sessions and for when I stayed at my London residence in Hampton.

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You will also be aware that I was written to by Mr David English of the Accountants Office of the House of Lords who confirmed that Members who retain a second residence in London for the purposes of attending sittings of the House may claim the Overnight Allowance towards the cost of maintaining such a residence. I actually did not go through with the purchase of the residence in Berkshire and therefore did not claim, or attempt to claim, any overnight allowance under the reimbursement scheme. We did continue to look at alternative residences and finally chose an apartment namely 31 Bancroft Court, Reigate, Surrey RH2 7RW. I actually secured the property in March 2006—but did not designate this as my main residence until October 2007.

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Had I done so, I could have claimed from that period—and not from the period in question now. As you will be aware I notified Mr English at the Accountants Office at the House of Lords of my moving my main residence to this address on 10 September 2007 by letter. I received his confirmation by email on 3 October 2007 that my residence records were being amended.

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At no point was I told that I could not claim for the reimbursement of my expenses by an Officer of the Accountants Office of the House of Lords and as you can see I have always acted in an open and transparent manner in relation to reimbursement of expenses for overnight accommodation as per the Guideline set out in the relevant Members’ Reimbursement Allowance Scheme General Guide that were in force at the relevant time. For the period October 2007 to December 2008 my main residence was the apartment in Reigate. All claims that I made at that time were properly made and I did so with the full knowledge of the House of Lords’ Acountants Office. In September 2007 I unexpectedly contracted a serious illness which incapacitated me and necessitated hospitalisation and continued treatment. During the latter part of 2008 and early 2009 I was also diagnosed as having hypertension and was told in March 2009 that I may have diabetes—this led to a complete review of my lifestyle and so following a difficult year with my health, in December 2008, I reverted to my residence in Hampton and ceased to claim overnight subsistence. I continue to receive treatments for my conditions and will have to take the advice of my Doctors, and family, before deciding whether or when to move from my Hampton residence.

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3. Expenses/Reimbursement/Registration The House of Lords will be aware through all of my time in attending the House that there have on occasions been a handful of requests from the House to confirm whether or not I have attended. The House will be aware that whenever I have been mistaken as to my attendance at the House I have immediately notified the Finance Office. On the converse whenever the House of Lords has been mistaken— for instance when I have been missed by those that register attendances at the House during busy sessions— I have also notified the relevant authority of their error. I would also like to take this opportunity to point out that there have been many occasions when I have attended House of Lords’ business either in the House, on overseas commissions, Parliamentary missions, or other sites within the United Kingdom when I have not claimed for expenses that I could properly have claimed for had I indeed been able to attend. There have also been many occasions when I had not attended the House of Lords Sessions as I have been involved in charities work in the UK and abroad—thereby forfeiting my allowance. I have always considered my contribution to the charities I chair as an important part of my life, my work and as a Peer. I simply put this to show my attitude towards the claiming of expenses—I understand that this is funded from the public purse and only claim what is right and proper. 4. Lord Bhatia—Character

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The House of Lords will be aware that I have served—and continue to serve—on the Boards of many charities and have always actively participated in the business of the House. I would like to point out that the Journalist Marie Woolf who formerly worked for the Independent reported on 23 October 2004 about me as follows: “Not all the 14 Peoples Peers have poor attendance records and both Baroness Howe of Idlicote and Lord Bhatia play active roles”

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I view the complaint and the newpaper article as an attack both on my personal character and also the character of my family. My family have also taken this unwarranted recent media interest extremely badly. We are a close and tight-knit family that care deeply for one another and this has obviously led me to feel deep sadness that they too should be drawn into such a state of affairs. I would like to point out that the article is not a true reflection of my two conversations with him. Conclusion I claimed for overnight expenses for a fixed period between October 2007 and December 2008 to be reimbursed as per the Guidelines set out in the Members’ Reimbursement Allowance Scheme General Guide and with the full knowledge of the House of Lords’ Accountants Office. All of the claims that were made regarding overnight expenses reimbursement were only made when I had attended the House of Lords sessions. I trust that the House of Lords will review the documentation and come to the conclusion that there is nothing of substance here to support the complaint that has been made about me and I look forward to the House of Lords confirming that the matter has been closed. 1 September 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 13 October 2009 Members’ Expenses I am writing to you further to the submission of your written statement in response to my letter of 31 July, informing you of the complaint I had received regarding your claims under the Members’ Reimbursement Scheme, and to my meeting with you and your solicitor, Mr Bosworth, on 1 September. I am grateful to you for your statement, and for your initial explanation of the circumstances which led you to designate your main residence as your property in Reigate from October 2007 to December 2008. I would be grateful if you could let me have a little more information as follows. In discussion on 1 September and in a quotation which appeared in the Sunday Times on 26 July, you mentioned that you had intended to move to the Reigate property full time. The Sunday Times also reported that you had said that you did not stay at the Regiate property during recess periods because these were not periods when you could claim the night subsistence allowance. Whilst I accept that you did not maintain a log of the times when you stayed in Reigate, and that you were not under any obligation to do so, I would be grateful if you could give me an estimate of how regularly you stayed there during the period when you designated it as your main residence. I would also be grateful if you could confirm whether you stayed at the Reigate property at any time during recess periods. If so, I would be grateful for an estimate of the number of days. 13 October 2009

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J Letter from Lord Bhatia to the Clerk of the Parliaments dated 4 November 2009 Thank you for your letter of 13 October 2009. You have raised a number of points in your letter to which I respond as follows: 1. At our meeting on 1 September 2009, I had informed you that I have rented the apartment in Reigate since March 2006 and was negotiating with the owner to purchase the property. In my written statement, I also stated that because of my health since September 2007, for which I continue to receive treatment, I will have to take advice of my doctors and family, before deciding whether or when to move from my Hampton residence. 2. During our meeting, I informed you that there were occasions when I stayed at Reigate during nonsitting days, weekends and holidays. As both Reigate and Hampton are my homes, I did not keep a log of how many days I spent in Reigate. Neither was this required under the House of Lords rules. I am therefore unable to give you an estimate of the number of days that I stayed in Reigate as I would not wish to misinform you. L K

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Finally, I would like to state that in the absence of any definition about the “main residence” in the current guidance to the House of Lords Members’ Expenses Scheme and there being no requirement to keep a log of how often one stayed at any residence during the recess or otherwise, I am unable to provide any further information on this matter. 4 November 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 18 November 2009 I am grateful to you for your statement on 1 September, which you left with me when we met, and for your letter of 4 November. I am grateful for your explanation that, for reasons of health, you decided in January 2009 to change your main residence back to the Hampton address. Before I can dispose of the complaint made against you, I need to invite you to respond to some further questions, particularly about the period from March to December 2008. My questions are as follows:

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(i) Do you own or lease the Reigate address or is it owned or leased by a third party? Does anyone else use that address? (ii) Could you confirm where you resided in the Easter and summer recesses of 2008? (iii) Your claim forms show that you claimed for weekly travel by car from and to Reigate from November 2007 to February 2008. Thereafter you did not claim for travel but continued to claim for night subsistence. Can you confirm that you stayed in Reigate every weekend between November 2007 and February 2008? Were you resident at any time in Reigate between March and September 2008? I appreciate that you have not retained detailed records of the occasions when you stayed in Reigate, but it would be helpful to have a general reply on this point. (iv) Could you clarify what factors led you to designate your Reigate address as your main residence for the period January 2007 to December 2008? It might be helpful to confirm that the overnight subsistence scheme is founded on resolutions of the House; the current resolution being that of 25 July 1991. It entitles Members to recover “expenses incurred in staying overnight away from their only or main residence where it is necessary to do so” for the purpose of attending sittings of the House or its Committees: only expenses actually incurred in attending Parliamentary business may be recovered. In relation to my question (iv), I am conscious that the scheme does not expand on what is a “main residence” but it would nonetheless be helpful if you could set out the reasoning behind the Reigate designation. It would be helpful to have your response to this letter in writing but you would be most welcome to discuss the matter with me further if you wish. 18 November 2009 Letter from Lord Bhatia to the Clerk of the Parliaments dated 30 November 2009

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Thank you for your letter dated 18 November 2009. Please see below my responses to your four questions as set out in that letter. (1) The Regiate address is leased by Casley Finance Limited a company that is owned by myself. The property in Reigate is also used by my brother, Sultan, who looks after the property for me in my absence.

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(2) As I mentioned in my letter to you of 4 November 2009, during the Easter and summer recesses of 2008 I resided in both properties (or elsewhere if away from London) and am unable to give you an estimate of the number of days that I stayed in Reigate. (3) I stopped claiming for my travel allowance in February 2008 as I found the system employed by the House of Lords to be cumbersome and I felt rather than continue with making the claims for the travel I would simply cease to do so. Again, I cannot confirm that I stayed in Reigate every weekend between November 2007 and February 2008 as I do not wish to mislead you—I simply do not have the records to confirm whether I was there or at my Hampton residence; or indeed away on Parliamentary or private business. The same applies to period between March and September 2008.

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(4) As I have already explained to you from the period of about 2003 onwards my wife and I were actively looking to “downsize” our domestic residence. We had lived in my house in Hampton for almost 20 years and my family had grown up and moved away. We began looking for alternative residences in February 2004 and decided to upon the apartment in Reigate in March 2006. I trust that the information I have supplied assists you in concluding the matter. 30 November 2009 Letter from the Clerk of the Parliaments to Lord Bhatia dated 15 January 2010 Thank you for your letter of 30 November 2009. I am grateful to you for your explanation of the ownership arrangements of the Reigate address. In your letter, you indicate that “you cannot confirm that [you] stayed in Reigate every weekend between November 2007 and February 2008”. Examination of your claim forms shows that you claimed the cost of car travel to and from Reigate for all of the weekends when the House was sitting. Can you please confirm that these claims represented actual journeys on each occasion, i.e. every weekend in the period? You also indicate in your letter that you cannot confirm the occasions during the period when you did not claim travel—from March 2008 to September 2008—but continued to designate the Reigate address as your main residence. I feel I must press you on this matter. If I am to reach a conclusion on your complaint, I need an assurance from you of the frequency with which you stayed in Reigate during the period. If you are unable either to confirm that you made the journeys for which you claimed the costs of travel from November 2007 to February 2008, or that you stayed regularly at the Reigate address from March 2008 to September 2008, I will not be able to reach a conclusion on your complaint. In those circumstances, I feel that I would have no option but to refer the complaint to the Sub-Committee on Lords’ Interests for further consideration, as envisaged by the complaints procedure set out by the Committee for Privileges in its 4th Report of Session 2007–08. As previously, it would be helpful to have your response to this letter in writing but you would be most welcome to discuss the matter with me further if you wish. 15 January 2010 Letter from Lord Bhatia to the Clerk of the Parliaments dated 8 February 2010 Thank you for your letter dated 15 January 2010 and our meeting on 1 February at your office. I can confirm that I made the journeys for which I claimed the cost of travel from November 2007 to February 2008. I can also confirm that I stayed regularly at the Reigate address from March 2008 to September 2008. Having gone through my records again, I am unable to confirm the exact dates on which I stayed at the Reigate residence as I did not keep a log of those dates. I am attaching a number of documents which demonstrate that the Reigate flat was my residence. These documents are listed in the attached appendix. I hope and trust that this information enables you to reach a conclusion on the complaint received by your office and that this matter can be brought to a conclusion. If you require anything further from me, please do not hesitate to contact me. If you feel that another meeting would be beneficial I am more than happy to see you at any time. 8 February 2010 Appendix 1. Tenancy Agreement for 31 Bancroft Gardens, Surrey dated 1 March 2006. 2. Letter confirming statutory period tenancy dated 31 August 2006. 3. Council Tax Bill in the name of Amir Bhatia received from Reigate and Banstead Borough Council dated 9 March 2007. 4. Council Tax Bill in the name of Amir Bhatia received from Reigate and Banstead Borough Council dated 3 March 2008. 5. Council Tax Bill in the name of Amir Bhatia received from Reigate and Banstead Borough Council dated 10 March 2009.

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6. Water services bill in the name of Amir Bhatia received from Sutton and East Surrey Water dated 4 September 2007. 7. Water services bill in the name of Amir Bhatia received from Sutton and East Surrey Water dated 18 February 2008. For period April 2008 to March 2009.

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8. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 17 July 2006. 9. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 13 September 2006. 10. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 23 November 2006. 11. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 20 March 2007.

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12. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 27 June 2007. 13. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 21 December 2007. 14. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 4 March 2008. 15. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 2 September 2008. 16. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 19 December 2008. 17. Electricity Bill in the name of Amir Bhatia received from EDF Energy dated 16 March 2009.

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Letter from the Clerk of the Parliaments to Lord Bhatia dated 25 March 2010 Thank you for your letter of 8 February, together with the additional information enclosed for which I am grateful. I am now in a position to inform you of how I intend to proceed with the complaint about your claims for overnight subsistence. In your letter of 8 February, you again stated that you were unable to give me an estimate of the number of occasions when you visited your Reigate residence during the time when you designated it as your main residence between October 2007 and December 2008. This was the information which I originally sought in my letters of 13 October and 18 November 2009. The frequency of visits by Members to their main residences is an important factor in my consideration of complaints about Members’ expense claims. In the circumstances, as you have not been able to provide me with this information, I have decided to refer the complaint to the Sub-Committee on Lords’ Interests for further investigation. The Privileges Committee in its 4th report of session 2008–09 confirmed that I am able to make such a reference in complex cases. I reported this decision to the House Commmittee on 22 March and the Committee noted my decision. You have, of course, already submitted a good deal of information about the residence in Reigate; and this information will be made available to the Sub-Committee. 25 March 2010 E Letter from the Clerk of the Parliaments to Baroness Manningham-Buller, Chairman of the Sub-Committee on Lords’ Interests, requesting the Sub-Committee’s assistance, dated 25 March 2010 Complaint relating to Lord Bhatia I am writing to request that the Sub-Committee should investigate a further complaint which I have received concerning a Member’s expense claims. As with similar requests in recent weeks, it may be helpful if I set out the background in some detail. On Tuesday 28 July 2009, following media allegations on 26 July about Lord Bhatia’s expenses claims, I received a formal complaint relating to Lord Bhatia from a Member of the House of Commons. I received further formal complaints from members of the public on 28 August and 19 November 2009. As a result of these complaints, I have conducted a formal investigation into the complaint. This investigation has resulted in extensive correspondence with Lord Bhatia and the following paragraphs set out the facts insofar as I have been able to establish them to date. Lord Bhatia’s designated main residence was in Hampton, Middlesex until October 2007. In March 2006 he rented an apartment in Reigate with a view to a later purchase. The apartment was leased by a company which Lord Bhatia owns, and was also occupied by his brother who looked after the property. Lord Bhatia designated this as his main residence in October 2007, and began then to claim overnight subsistence in respect of the Hampton property. Hampton is within the boundary of Greater London whereas Reigate is not. After certain health difficulties in 2008, Lord Bhatia decided to return to Hampton full-time and in January 2009 re-designated it as his main address. As to the frequency of Lord Bhatia’s visits to Reigate, I have had little help or corroboration from his travel claims. He regularly claimed the costs of travel (by car) between Reigate and Westminster from November 2007 to January 2008 but from March 2008 he stopped claiming travel altogether on the grounds that he found the system cumbersome. Lord Bhatia has not been able to answer my questions about the frequency of his visits to the Reigate property, indicating that he “simply did not have the records to confirm whether [he] was there or [his] Hampton residence or indeed away on Parliamentary or private business.” I have pressed Lord Bhatia several times on this, but he has not been able to provide any further information. As indicated above, Lord Bhatia claimed travel in respect of every weekend between Reigate and Westminster for a short period from November 2007 to February 2008, which may cast some doubt on his inability to provide any information about the frequency of visits. Also, I should indicate that, although Lord Bhatia’s designation of the Reigate residence was within the letter of the expenses scheme, I have had some doubt whether it was within the spirit of the Members’ reimbursement scheme to claim overnight subsistence in respect of an established home in Hampton following a move of some 15-20 miles to an apartment in Reigate. K F C B

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In these circumstances, I have decided the complaint relating to Lord Bhatia falls into the “complex” category and that I have no alternative but to refer the complaint to the Sub-Committee on Lords’ Interests. I have already undertaken a good deal of investigatory work. I met Lord Bhatia and his solicitor early in the investigation; and in the correspondence which has followed he has submitted a good deal of relevant data, although not on the frequency of stays in Reigate. I have taken the view that the Sub-Committee may be better placed to press Lord Bhatia on the designation of the property and the frequency of his visits. I would be grateful, therefore, if the Sub-Committee could further investigate and determine the facts of the complaint relating to Lord Bhatia so as to enable me to submit a report to the House Committee.

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As you will know, Members’ expenses and complaints relating to them do not fall within the Code of Conduct, nor within the remit of the Privileges Committee. This, of course, will change from the new Parliament. For the time being, however, the procedure is for me to request the assistance of the Sub-Committee and for the Sub-Committee to submit a report to me which I can then refer to the House Committee with its responsibility for the supervision of arrangements for the Members’ Reimbursement Scheme. Thereafter, it would be for the Privileges Committee to recommend any sanction to the House. This is clearly a somewhat complicated procedure, but, as I have suggested in earlier references to the Sub-Committee, I see no reason why some of the steps should not be speeded up. For example, I for one would not wish to add anything of substance to a report from the Sub-Committee before submitting it to the House Committee. As before, I will, of course, make available to the Sub-Committee all the relevant material in the possession of the Administration.

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25 March 2010 Email from Lord Bhatia to Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Conduct, dated 22 June 2010 Sub Committee on Lords Conduct meeting on 25 June

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As advised earlier, I will be attending the above meeting with my legal representative, Mr Matt Bosworth. I am attaching a letter I have just received from him and will appreciate it if the information requested is sent to me as a matter of urgency to enable me to deal with any points arising. 22 June 2010

G Attached to preceding email: Letter from Mr Matt Bosworth, Mssrs Russell Cooke Solicitors, to Lord Bhatia, dated 22 June 2010 Regulatory Enquiries H I write further to our meeting of 18 June 2010 in relation to the hearing before the Sub-Committee on Lords’ Conduct. The hearing arises from an original complaint from the Sunday Times investigation into Parliamentary expenses. After investigation by Mr Pownall, the Clerk to the Parliaments, the matter was referred to the SubCommittee on Lords’ Conduct on 22 March 2010. J By letter of 10 June 2010 Mr Mackersie, Clerk to the Sub-Committee wrote to you disclosing a bundle of documents that would be before the Sub-Committee at the hearing. The letter high-lighted Paragraph 19(d) of the HOL Code of Conduct 2002 that states: “In the investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.” The covering letter went on to state that you have been asked to attend the Sub-Committee on Lords’ Conduct on Friday 25 June 2010 at 10.00 to give oral evidence. The letter referred to the issues that the Sub-Committee would be concerned with: “In the evidence session, the Sub-Committee will ask you questions about the material in the bundle directed principally at two issues: (i) With what frequency you stayed at the flat in Reigate, taking into account the changing nature of your claims for the reimbursement of travel; and (ii) Whether you acted in good faith in designating the flat in Reigate as your main residence and in making claims for night subsistence and travel from and to that residence.”

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It is presumed that the Sub-Committee approach is one that is inquisitorial, as opposed to adversarial, in nature and those findings in respect of the above matters will be made by the Sub-Committee following the oral hearing and any further documentation that they may review as a part of the process. Ahead of that hearing you requested I set down the areas of concern over the process that has taken place so far in respect of this matter. Areas of Concern: 1. Disclosure Issues: (a) No material from the original investigation into the complaint by the Clerk to the Parliaments has been made available to you. There has to be correspondence between that office and the Sunday Times and also notes of the original interviews between you and Mr Pownall. These should be disclosed to you as they are relevant; as would any correspondence with any third party. Therefore that material should be disclosed to you ahead of the 25 June hearing. (b) Transcripts: The material contained in the bundle includes transcripts of covert recordings made by the journalists investigating your expense claims. The journalist, Mr Calvert, gained entry to your premises by falsely stating to your cleaner that he had an appointment with you. This led to the first of the now disclosed covert recordings. These recordings were not relied upon—or raised by Mr Calvert (lead investigating journalist) in his original complaint to the House. As far as we are aware they were not disclosed to Mr Pownall during his investigation of the matter. The transcripts are now before the Sub-Committee without any form of verification. No opportunity has been given to you, or the House of Lords authorities to review the “originals” of the transcripts and there has been no notification from the Sub-Committee that any verification process has been undertaken to date. It would appear that Mr Calvert has been selective in putting material before both you and the Clerk to the Parliaments. (c) It is clear from the documentation that there is further correspondence between the Sunday Times and the House of Lords (for instance document reference CP/10-11/LC 3F) that has not been disclosed to you. This material has to be relevant to the complaint being investigated by the Sub-Committee and should be disclosed to you as a matter of due process and fairness. (d) Other documentation between both Mr Pownall and Mr Mackersie and the Sunday Times (and any other party) that arises from the complaint should also be disclosed to you as a matter of due process and fairness ahead of any oral hearing as it has to be relevant to the proceedings. 2. Letter of J Calvert dated 7 April 2010: (a) The contents of the letter cause concern—especially as it now forms a part of the disclosed evidence in relation to the matters being adjudicated upon by the Sub-Committee. Mr Calvert, relying upon covert recordings, has asserted several findings as though they were fact. Mr Calvert is not, as far as is known, being called to give evidence before the Sub-Committee and yet now appears to have moved from the role of complainant to that of prosecutor/informant. (b) The contents of the letter—especially around the area of choice of housing—are entirely subjective and yet are placed upon the bundle of papers before the Sub-Committee. Clarification as to what weight is being given to the contents of that letter and why it appears in the bundle without you having any recourse to questioning the covert nature of the investigation by Mr Calvert and his subjective findings would not be affording you the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies. 3. Sub-Committee Terms of Reference: (a) The Sub-Committee have confirmed that the only areas of evidence that they require to hear from you are those contained in the letter from Mr Mackersie dated 10 June 2010.

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(i) What is the breakdown of roles between the investigative function and the adjudicatory role? Is it the case that the investigatory function comes down solely to the covert investigation of the Sunday Times and their subsequent subjective findings? (ii) The allegations: It is noted from the published findings of other Members of the House (see Lord Clarke in the disclosed bundle) refer to “allegations”. The letter from Mr Mackersie of 10 June is the only document that refers to any specific areas of concern for the SubCommittee. Are there to be formal allegations put at the hearing on 25 June 2010, and will they be specified before the hearing? (iii) The hearing is to be on the Civil basis in relation to the standard and burden of proof, can the Sub-Committee confirm that this is to be based on the highest level as is the norm in professional disciplinary bodies? 5. Preparation for Oral Hearing:

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(a). You were first able to review the documents disclosed on your return to the United Kingdom on 14 June 2010. Because of my professional engagements we were only able to meet to review that documentation on the 18 June 2010. This has left you only with a week to prepare for the hearing on the 25 June 2010 which you have indicated you wish to attend to continue your ongoing co-operation with all parties in this matter. If I can be of any further assistance please do not hesitate to contact me.

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22 June 2010 Letter from the Clerk of the Sub-Committee on Lords’ Conduct to Lord Bhatia dated 23 June 2010

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Members’ Reimbursement Scheme I am replying to the email which you sent me yesterday, which itself attached a letter from your solicitor to which you invited my reply. This letter responds to each of the issues raised in your solicitor’s letter under his headings and numbering.

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1. Disclosure Issues (a) There is no correspondence between the Clerk of the Parliaments or his office and the Sunday Times newspaper. There is no record of any meeting between Lord Bhatia and the Clerk of the Parliaments. I enclose some correspondence with the complainants, the only third party correspondence which exists [printed at pp75–8].

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(b) I should have made clear in my earlier letter that the Sunday Times provided the Sub-Committee with the audio recordings of their interviews and conversations, as well as their working transcripts. The House authorities, including the clerks and the Editor of the Official Report, have created or approved the transcripts in the circulated bundle. I enclose a USB stick with the audio files; you are welcome to suggest corrections to the transcripts. Please tell me if you have reason to believe that the Sunday Times has not disclosed to the Sub-Committee all of the material they gathered. (c) I enclose a letter from me to the Editor of the Sunday Times [printed at p79A]. That is the only correspondence between the Sub-Committee and the newspaper. (d) I enclose other correspondence from the file which was not included in the circulated bundle [printed at pp75–8]. 2. Letter of J Calvert Dated 7 April 2010 The Sub-Committee understand the difference between allegation and fact.

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3. Sub-Committee Duties at Law The Sub-Committee is a Select Committee of the House not a court of law. It is operating in this case under the report from the Committee for Privileges on The Code of Conduct: procedure for considering complaints against members, a copy of which you have [not printed]. In this case, the Sub-Committee is responding to a request for assistance from the Clerk of the Parliaments under paragraph 11 of that report. The

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Sub-Committee is not limited to investigating the allegations made by the Sunday Times newspaper but is considering the use Lord Bhatia and certain other members made of the members’ reimbursement scheme. The report on procedure stresses that “every effort is made to keep proceedings informal” (paragraph 25) and that “the Sub-Committee’s proceedings should not acquire the formality of a court of law” (Appendix, paragraph 23). This is reflected in the standard of proof required in an investigation, which is “on the balance of probabilities” (paragraph 26). The new Code of Conduct, which came into force on 18 May 2010 requires the Sub-Committee “to act in accordance with the principles of natural justice and fairness” (paragraph 19). Although that Code does not apply to this inquiry, the Sub-Committee will apply those principles to this investigation. 23 June 2010 Appendix: enclosures with the preceding letter Letter from Mr Brian Yates to Baroness Scott of Needham Market dated 28 July 2009 I am a retired CID Officer having spent many years in the Fraud Squad. On reading a daily newspaper today, I was saddened to read that the corruption in the Lower House had for some time been breeding in the House of Lords. I was pleased to hear of the two Labour Peers being suspended for corrupt practice a little while ago. I did feel after reading the article in respect of Bhatia that on the face of it, if only 50% were to be true, this man is a manipulator of the Lords expense system, if not a fraudster. In my working life as a CID officer I have gained convictions on far less fraudulent activity. I therefore lodge a formal complaint to you, in respect of Bhatia and his expense claims. That a formal enquiry should take place within the House of Lords Authorities, as this is public money paid by people like me, who are still paying tax on their pensions after years of careful care. If no steps are taken I will place a formal complaint to the Metropolitan Police under the Theft Act and current Fraud Act. “A person who gains or attempts to gain a pecuniary advantage by deception”. 28 July 2009

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G Letter from the Registrar of Lords’ Interests to Mr Angus Robertson MP dated 31 July 2009 This is in reply to your letter to me of 26 July complaining about Lord Bhatia. Complaints about alleged abuse of the House of Lords expense claims do not fall to me as Registrar or to the Sub-Committee on Lords’ Interests. They come within the jurisdiction of the Clerk of the Parliaments as Accounting Officer for the House of Lords, and so I have passed your letter to him. I expect that he will be writing to you in due course. 31 July 2009 Letter from Lord Bhatia to the Clerk of the Parliaments dated 21 August 2009 Thank you for your letter of 31 July 2009. I am more than happy to meet with you to give all the information you require to complete your inquiry. September and early October is an exceptionally busy month for me as I am out of the country on various parliamentary missions to India, China and Tanzania in the company of representatives of both the Houses of Parliament. I was also going to attend a longstanding family holiday in North America from 28 August to 4 September but have had to cancel this as I have been ensuring that I have as much information as possible to assist you in your inquiry. Could I therefore request that our meeting take place on Tuesday 1 September 2009 before I leave for India on 4 September 2009? I would also wish my legal adviser, Matthew Bosworth of Russell-Cooke LLP, to attend as he has been assisting me in preparing my records to assist us. K J

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The matter of expenses and the accompanying media interest has been extremely upsetting both for me, but more importantly my family, and I would want to ensure that this matter is resolved as soon as possible. I look forward to hearing from you upon your return from holiday. 21 August 2009

B Email from Duncan Sagar, Private Secretary to the Clerk of the Parliaments, to Lord Bhatia dated 26 August 2009 I am writing to you in response to your letter of 21 August to the Clerk of the Parliaments. Michael Pownall would be happy to see you on Tuesday 1 September, and is content that you should be accompanied by your legal adviser should you wish. Might I suggest a meeting at 2pm on 1 September? Please do let me know if this would be convenient. I should perhaps add that I think it likely that Mr Pownall will ask you to let him have your response to the complaint in writing, as indicated in his letter to you of 31 July. D 26 August 2009 Email from Lord Bhatia to the Private Secretary to the Clerk of the Parliaments, dated 27 August 2009 Thank you for your email dated 26 August 2009. I write to confirm that 2 pm on Tuesday 1 September 2009 is convenient to meet with the Clerk of the Parliaments, Mr Pownall. E Please pass on to Mr Pownall that I will have a written response to the complaint as requested in his letter of the 31 July 2009. 27 August 2009 F Letter from Mr Jonathan Pearse, Office of the Leader of the House of Lords, to Mr Brian Yates dated 28 August 2009 Thank you for your letter to Lady Scott who has passed it on to Baroness Royall, the Leader of the House of Lords. I have been asked to reply on Baroness Royall’s behalf. G Formal complaints about Peers’ expenses are looked at by the House Authorities and we have passed a copy of your letter on to them. 28 August 2009 Letter from Lord Bhatia to the Clerk of the Parliaments dated 19 October 2009 Thank you for your letter dated 13 October 2009. H I am out of the country on business until the 2 November 2009 can we please arrange for another meeting to take place to discuss the issues that you raise in your letter at a suitable date after the 2 November? I look forward to hearing from you. 19 October 2009 J Letter from Mr Frank Cannings to the Clerk of the Parliaments, dated 17 November 2009 Members of the Lords are not accountable to the voter, ie the taxpayer who funds the public purse. However, their very title suggest honourable behaviour, beyond reproach that ordinary mortals would revere and aspire to. K Yet I frequently read in the Sunday Times (ST) what, if correct, I can only term as shabby conduct bordering on the dishonest, involving the claiming of expenses that to the layman appear totally unjustified and which are frequently not chicken feed, up to six times the average UK salary, and which are tax free. Apparently, and I quote from the 18 October edition: L “At least 20 peers whose expenses have been called into question have so far escaped any disciplinary action because of failings in the investigation system of the House of Lords.” A list of many of those named in the ST, in no particular order is set out below: — Baroness Whitaker claimed £150,000 on expenses, by renting a country cottage in Sussex and saying it was her main home.

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— Lord Morris, a former Labour minister, claimed £100,000 by declaring his small house in Salford as his main address, despite owning a house in Dulwich for 27! years, and “his neighbours” in Salford not being able to recall seeing him there. — Lord Falkland, a hereditary peer, claimed £140,000 by designating a converted oast house as his main residence, yet neither he nor his wife owned the property. — Baroness Uddin claimed £180,000 on an empty, unfurnished flat in Maidstone she said was her main home, although she has lived with her family in a house in east London since the early 1990s. — Baroness Scotland of Astal claimed £170,000 for living outside London despite owning a family home, worth £2 million, in the capital for 15 years where she actually lived and since 2001 has consistently declared in her Lords expense forms as her main residence. — Baroness Morgan of Drefelin has lived in London for the first 42 years of her life, but five years ago she bought a small cottage near Cardigan and designated the property as her main residence even though she continued to live in the family home in London, and has claimed either £47,000 or £38,280 a year tax free in “night subsistence” because her designated home is in Wales. — Lord Clarke of Hampstead, former Labour party chairman, has confessed according to the ST of 31 May 2009 of milking his expenses, claiming allowances for staying in London when he was not even in the capital and also when staying in a cost-free London flat, owned by a fellow peer. His claims amount to “tens of thousands of pounds”. — Baroness Northover, a Liberal Democrat, has lived with her family in a terraced house in north London for almost two decades. However, she claims ca. £20,000 a year in overnight subsistence allowances having declared her main address is her mother’s home in Worthing. — Lord Paul of Marylebone, Labour peer, has admitted not spending one night in a one-bedroomed flat in Oxfordshire he claimed was his main home and £38,000 in “dodgy” expenses between 2004 and 2006, even though he never stayed there. He also claimed £100,000 in expenses for living outside London despite owning property in Westminster in which he has kept a family home for the past 43 years, then five years ago started claiming accommodation costs by saying his main home was outside the capital. — Baroness Barker (Liberal Democrat) has claimed £70,000 in expenses although living in London for the past 20 years, currently in a house bought for £313,000 in 2002, simply stating her main residence was elsewhere, somewhere in the “south-east”. — Baroness Hayman—the Lord Speaker—switched the designation of her main home from London to Norfolk while maintaining the same family home in the capital, enabling her to claim £200,000 in night subsistence allowances. — Baroness Goudie has a £1.5 million home in London where she lives with her husband, but has claimed £230,000 in expenses by saying a flat in Glasgow is her main home although not been seen there for some time, according to a neighbour. — Lord Rennard, a Liberal Democrat, with a home in Stockwell claimed £41,000 when he designated a flat in Eastbourne as his main home. — Lord Colwyn, a Tory, has claimed ca. £150,000 by declaring his Cotswold retreat as his main home. He has rented the same Chelsea town house for more than 30 years, operated a nearby dental practise and said he “lived in the area”. — Baroness Thornton declares her main home to be a bungalow where her mother lives in Yorkshire, rather than the £1 million family house near Hampstead Heath gaining £130,000. — Lord Taylor of Warwick declared his main home was his mother’s house in Solihull even though it was sold to someone outside the family when she died several years ago and thereby pocketed £70,000. — Lord Sheldon has claimed £130,000 by designating his main home to be his former house in Manchester which he gave to his son six years ago. — Lord Bhatia declared his main home to be one rented by his brother and occupied by him, the address of which he could not remember and pocketed £20,000. This is a long list, I can’t vouch for the truth in the ST’s allegations, but as far as I know no peer has taken legal action over the disclosures. The ST obtained the information using the Freedom of Information Act.

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Because there are so many instances, surely someone in authority has to investigate whether transgressions and breaches of the Rules has occurred allowing the peers to benefit by duplicity at the expense of the public purse. Are you in a position to act on this matter? If not who is? 17 November 2009

B Letter from the Clerk of the Parliaments to Lord Bhatia dated 21 October 2009 Thank you for your letter of 19 October. I would, of course, be happy to meet with you when you return after 2 November. However, I would be grateful for a written response to my letter of 13 October ahead of that meeting and as soon as convenient. There are, as I am sure you appreciate, particular sensitivities about my investigations at the present time; and I am anxious to make progress. I am sending a copy of this letter to your email address. 21 October 2009 D Letter from the Clerk of the Parliaments to Lord Bhatia dated 29 October 2009 Just to confirm that I very much look forward to hearing from you by way of a response to my letter of 13 October and with a view to meeting with me in the course of next week. 29 October 2009 E Letter from Lord Bhatia to the Clerk of the Parliaments dated 2 March 2010 I refer to our meeting on 1 February 2010. Subsequent to our meeting I wrote to you, as discussed, on 8 February 2010 with some documents. F I shall be very grateful if you could please let me know whether you require any more information or indeed wish to meet with me. I look forward to hearing from you. 2 March 2010 G Letter from the Clerk of the Parliaments to Mr Angus Robertson MP dated 31 March 2010 On 26 July 2009 you submitted a complaint to me about the expense claims of Lord Bhatia. The Committee for Privileges has agreed that in complex or serious cases I may refer complaints about expense claims to the Sub-Committee on Lords’ Interests. This letter is to inform you that I have conducted an initial investigation and have now referred the complaint to the Sub-Committee for further investigation. H In line with our publication policy, we will make this letter available on the Parliamentary website. 31 March 2010 Email from the Clerk of the Sub-Committee on Lords’ Interests to Mr Jonathan Smith, Head of Finance, House of Lords Finance Department, dated 10 May 2010 The Sub-Committee is looking at Lord Bhatia’s use of the members’ reimbursement scheme. Lord Bhatia, in a statement, refers to correspondence between himself and David English of your office in the autumn of 2007 about his designation of his main residence. Do you have that correspondence or any record of it? If so, may we please see it. 10 May 2010

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CORRESPONDENCE WITH THE SUNDAY TIMES NEWSPAPER
Letter from Mr Andrew Mackersie, Clerk of the Sub-Committee on Lords’ Interests, to Mr John Witherow, Editor of the Sunday Times newspaper, dated 25 March 2010 I am writing on behalf of the Sub-Committee on Lords’ Interests. The Clerk of the Parliaments, who is responsible as Accounting Officer for the administration of the members’ reimbursement scheme in the House of Lords, has asked the Sub-Committee to investigate Lord Bhatia’s use of the members’ reimbursement scheme in the light of your newspaper’s report about him of 26 July 2009. Although the matter does not fall within the normal jurisdiction of the Sub-Committee, the Clerk of the Parliaments has sought the Sub-Committee’s assistance pursuant to the report from the Committee for Privileges on The Code of Conduct: procedure for considering complaints against members (4th Report 2007–08, a copy of which you already have [not printed]).1 The Clerk of the Parliaments has referred this case to the Sub-Committee because he considers it complex. The Sub-Committee would be grateful for any assistance that you might be able to give them. I am therefore writing to ask whether you would send to the Sub-Committee the records on which your report of 26 July 2009 was based and any other material relevant to the Sub-Committee’s investigation. The Sub-Committee intends to begin work on the investigation immediately, but it recognises that Parliament is likely soon to be dissolved and a general election called. At dissolution, all Committees of the two Houses cease to exist until reappointed in the new Parliament. If the Sub-Committee’s investigation is interrupted by dissolution, it will be continued in the new Parliament. 25 March 2010 Letter from Mr Jonathan Calvert and Ms Claire Newell of the Sunday Times newspaper to the Clerk of the Sub-Committee on Lords’ Interests dated 7 April 2010 We are happy to provide you with the material collected during our research into Lord Bhatia’s claims for night subsistence expenses. You will find enclosed a copy of our article, the recordings (downloaded from digital voice recorders) and two transcripts. The recordings have not been changed. However, the transcripts are our working copies and only the passages used in the newspaper would have been thoroughly rechecked. Therefore, they may have parts missing or the odd word out of place. The recordings and transcripts can be found on the computer disk we have supplied with this letter. We came across Lord Bhatia in the course of researching a series of articles on peers’ overnight expense claims. He first attracted our attention because his attendance in the Lords was high but he rarely contributed to debates and had a low voting record. We saw that he had moved from London to Surrey in October 2007, according to the published expenses list. However, there was no record of this move on any other publicly available document. His home still appeared to be in Manor Gardens, Hampton, Middlesex, a property which he had bought in 1989. His wife lived there and his daughter owned a separate home backing onto his garden. We could find no evidence that Lord Bhatia owned a place in Surrey or lived there. However, we could see that his brother Sultan had listed his address at Companies House as Reigate in Surrey. We visited Lord Bhatia at his home on the morning of Thursday 23 July 2009 (tape recording “Bhatia thurs 230709.WMA” and “Bhatia transcript.doc” on the computer disk). He said he had designated a flat in Bancroft Court, Reigate as his main home between October 2007 and December 2008. This was the flat his brother was living in. Lord Bhatia explained that his Hampton house was too big and he had been hoping to sell it and move to the flat in Reigate. He had been renting the flat since March 2006 and his brother was just looking after the property for him. He said he stayed at the flat with his brother at weekends during the period he declared it to be his main residence. However, he altered his plans after becoming ill and changed his main home address back to Hampton. When asked for the address, he had to go away and look it up because he couldn’t remember it. We went to the flat later that day. It was an unprepossessing 1970’s block which, in property market terms, would have been a considerable step down from his home in Hampton. There was only one next door neighbour, and she seemed convinced that Sultan Bhatia lived there on his own (tape recording “Bhatia brother neighbour” on the computer disk). None of the other neighbours we spoke to knew Lord Bhatia or could recall seeing him. (Please note, we did not give as much weight to the other neighbours’ statements as we had, say, while researching Baroness Uddin. Uddin lived in a block of six closely connected flats which shared a common corridor and doorway, and it was inconceivable that none of her neighbours ever saw her. The
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The Clerk provided a copy of the report in similar correspondence relating to the conduct of Lord Paul.

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Bhatia’s flat, however, is at the end of the row, close to an underground car park, and only his nearest neighbours would have seen anyone going in and out). We spoke to Sultan Bhatia as he was returning home that evening (tape recording “Bhatia brother.WMA and “Bhatia brother transcript.doc” on the computer disk). He explained that he had moved to the flat to “pick the pieces” after separating from his wife. He said there were two bedrooms in the flat and he occupied one of them (although, as far as we could see from the rear of the flat, it appeared that only one of the rooms had a bed in it). Bhatia’s brother said he “looked after” the flat for his brother who stayed there from “time to time.” In a telephone call the following day, Lord Bhatia was unable to fully explain why he switched his main home to Reigate approximately 18 months after he says he began renting it (tape recording “Bhatia call 2.MP3” on the computer disk). He cast further doubt on the notion that the flat had been his main home when he admitted that he didn’t spend time at the property during the recess. He also disclosed that the rent and bills for the flat were paid for by a company he owns called Casley Finance. Sultan Bhatia became Casley Finance’s company secretary three months after Lord Bhatia says he began renting the flat in March 2006. There are further peculiarities about his claims for travel expenses. Copies of Lord Bhatia’s expense forms going back to April 2006 show that he has always been meticulous in claiming for every journey. When he first changed his address to Reigate, he claimed to be travelling there from the Lords almost every weekend. However, from March 2008 to the end of December 2008 he did not make any travel claims for journeys to and from his main home. Yet when his address reverted back to Hampton in January 2009, he began claiming for every journey once again. It is also worth noting that it is not clear when Lord Bhatia stopped claiming Reigate was his main home. The change appears to be made on the expense form for January 2009 which was signed on 4 February and received by the Lords on 11 February. The Sunday Times wrote an article on 8 February pointing out that Lord Truscott had claimed £70,000 in overnight expenses using an unlikely looking flat in Bath as his main address. There had been renewed scrutiny on peers generally since our story about Truscott and the others on 25 January. Of course, we don’t know if Lord Bhatia notified the Lords of his change of address before that date. When we reviewed the available evidence, Lord Bhatia’s account did not seem plausible. Would Lord Bhatia and his wife leave their spacious and comfortable home in Hampton every weekend to share a small twobedroom flat in Reigate with Lord Bhatia’s brother? A more obvious explanation was that the flat was rented to help Lord Bhatia’s brother when he was forced to leave his family home because of his marriage difficulties. The flat is nine miles (20 minutes drive by car) from where Sultan Bhatia’s family now live. Lord Bhatia’s £27,000 claims for night subsistence would have covered the cost of his brother’s accommodation. Furthermore, Lord Bhatia had no reason to claim expenses for living in London when he already had an established home in Hampton which is within commutable distance to the Lords. This last criticism, admittedly, could be levelled against many other peers who are not before the Sub-Committee on Lords’ Interests, but we believe it is valid nonetheless. Please let us know if we can be of any further assistance. 7 April 2010 Sunday Times Transcripts

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1. Transcript of a covert recording of an interview between Mr Jonathan Calvert of the Sunday Times newspaper and Lord Bhatia on Thursday 23 July 2009 at Lord Bhatia’s residence in Hampton Mr Calvert: I’m sorry to arrive unannounced. I’m Jonathan Calvert. I’m from the Sunday Times. Lord Bhatia: I got your message very late last night. Mr Calvert: Oh did you? I live locally, so I thought I’d pop in on my way. Actually I often do triathlons and that in… Lord Bhatia: Where do you live? Mr Calvert: Oh, in Kew. Lord Bhatia: Near Richmond.

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Mr Calvert: Yeah. Lord Bhatia: OK. Mr Calvert: So I thought I might as well pop in and see you in the morning. Lord Bhatia: I got your message very late last night. I was going to phone you this morning anyway.

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Mr Calvert: That’s fine. In fact, I often park just outside here on Easter Bank Holiday, or most bank holidays during the summer, there’s a triathlon club.. I don’t know whether you’ve noticed lots of people with bicycles parking in your road. I just wanted to check something. You’re probably aware that we have done a lot of things about Lords and allowances. We’ve been though a lot of people asking various people different questions about various things and we noticed that obviously your home is here in Hampton, yes, but we noticed that in 2007 your home, your main residence became Surrey. Lord Bhatia: Let me explain to you. I have lived here— Mr Calvert: Do you mind if I take a note? Lord Bhatia: I’ve lived here for 20 years now. The house is too big now for me and my wife. All my three children have flown the nest as it were. Mr Calvert: I see. Lord Bhatia: And I’ve been wanting to move away from here to a much smaller place that I can manage. Mr Calvert: I see. Lord Bhatia: So it was sometime in 2006 that I took a flat in Reigate. Rented it. And I still have that flat in my name to this day. Mr Calvert: So you rent it? Lord Bhatia: I rent it and I intend to move there—I’m negotiating with the owner to sell the flat so we could then move there and dispose of this house because I need to sell this house and move out to a smaller place. Mr Calvert: Is there—where is it in Reigate? Lord Bhatia: Reigate—I can give you the address in a minute. Reigate in Surrey. Mr Calvert: Do you have a brother called Sultan? Lord Bhatia: Yes. Mr Calvert: Ah I thought so because when I did a Companies House… Lord Bhatia: That is right. He lives there and looks after the house when I’m not there. Mr Calvert: Ah so it’s him at that one—I can’t remember what the actual address was—can you remember the address? Lord Bhatia: I’ll give you the address, I’ve written it down somewhere. Mr Calvert: And that’s now your main address is it? Lord Bhatia: No. I took it in 2006 and I wanted to get used to the idea—is this the right place for us to move. I did want to move away from here since 2006. It’s not until 2007—late 2007—that I decided to declare that as my main residence. We spent the weekends there as often as we could and I fell ill—I had to be hospitalised until the end of 2007. I did not have good health and [inaudible]. Mr Calvert: Ooh! I’m sorry to hear that. Lord Bhatia: It’s because of age I suppose and I moved from 2007/2008. December, I said, I’m no longer able to travel because my daughter is next door and the next house is hers and she’s a GP here. She looks after me, my health and everything else and anything that goes on so… I thought I should let you know [inaudible]. I think I shall stop declaring that as my main residence. Mr Calvert: I see. When did you stop declaring it as your main residence? Lord Bhatia: December 2008. Mr Calvert: December 2008. Lord Bhatia: It’s all in the public records. Mr Calvert: So you claimed it as your main residence between, it would have been about October 2007 and December 2008? Lord Bhatia: December 2008. But I continued to have the flat in Reigate. Mr Calvert: You rent it? Lord Bhatia: Yes. Mr Calvert: How much does it cost to rent, do you know? Lord Bhatia: The rent is I think £800, plus rates. Mr Calvert: £800 a month? So it must be quite a nice flat then?

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Lord Bhatia: I wanted to test out to see whether I and my wife, two of us only, can live there. Mr Calvert: I see. It is an area you like, Reigate? Lord Bhatia: Yes Mr Calvert: Because you’ve obviously got a very lovely home here. Lord Bhatia: Well, lovely home that you can’t manage. 20 years I have lived here. I’ve been very happy. The children were here and now they’ve all moved and married and gone. Mr Calvert: Is this where your children grew up? Lord Bhatia: Partly, yes.

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Mr Calvert: You came to the London around about 1970? Lord Bhatia: I came here in 1971/72. I lived in the Barbican as well for 18 years or so. Mr Calvert: Were your children grown up when you first came here? Lord Bhatia: My youngest daughter came with me because she was only four or five, but the other two had gone to boarding school here. Mr Calvert: Do they all live in this sort of area? Lord Bhatia: No, no, no. One is in America now, she lives in California, and the one lives next door, she is a GP here.

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Mr Calvert: Oh so she lives— Lord Bhatia: Yes. Mr Calvert: And do you now intend to stay here as your main residence? Lord Bhatia: As soon as I can purchase in Surrey I will move— Mr Calvert: Move to Surrey. Lord Bhatia: And sell this house. Mr Calvert: So during that time 2007 to 2008, do you think it was your main home? Lord Bhatia: During the week days when Parliament was open I come would stay here, in the weekends, Saturday and Sunday, I would go back and live there.

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Mr Calvert: But wasn’t your brother living there? Lord Bhatia: It is a reasonably large flat with two bedrooms and living room and all the rest of it. Mr Calvert: And then you and your wife would be in the other room? Lord Bhatia: [Inaudible]. My main went there for a while [inaudible] Parliament [inaudible].

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Mr Calvert: I see. Lord Bhatia: But, I thought that until I am able to own the property and move there lock stock and barrel and sell this house… Mr Calvert: What’s your connection with Reigate?

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Lord Bhatia: Nothing at all. I like the area. Went around looking at various places. Mr Calvert: Is Reigate any further away from Parliament than here? Lord Bhatia: Probably an hour way or 45 minutes away or something like that from here. Mr Calvert: Oh is it? From here to the Lords would take you about an hour wouldn’t it?

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Lord Bhatia: On a good day it could take one or on a bad day it could take an hour and a half or two hours. Mr Calvert: Do you drive? Lord Bhatia: Yes. These last two years because of my health conditions, I have … high blood pressure, my doctors, my body itself says don’t take any risk with driving or anything else, going on public transport and everything else. Be safe where you are. And the recent scare with swine flu doesn’t help. Mr Calvert: But you are off now in terms of the Lords aren’t you? The Lords is in recess at the moment so you don’t have to go out. So this was just too big for you. How big is it? Lord Bhatia: Four bedrooms. Living room, dining room. Mr Calvert: Does it have a big garden as well?

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Lord Bhatia: Yes. Mr Calvert: Yes I can see if it is just you and your wife then you don’t need four bedrooms any longer do you? Lord Bhatia: It’s not only that, it’s not the four bedrooms, it’s maintaining everything, cleaning, I and my wife are 75, 76. Mr Calvert: You are a former donor to the Labour party aren’t you? Are you still a donor to the Labour Party? Lord Bhatia: I am a crossbencher. Mr Calvert: Did you use to donate to the Labour party? Lord Bhatia: Yes I did once and I was a member for a few months probably. 1999 or 2000. Mr Calvert: And you did a lot of good work for the city academies as well as I understand it? Did you meet Cyril Taylor, was it? Lord Bhatia: Yes I met him. Mr Calvert: Just so I understand, in around about, when did you start renting the flat in Reigate? Lord Bhatia: It must have been March 2006 I think Mr Calvert: And since then your brother has been living there to look after it. Lord Bhatia: Yes. Mr Calvert: Then in October 2007, you think it’s around about then, or it might have been earlier— Lord Bhatia: I think it is October 2007. Mr Calvert: You started to claim it as your main residence? And then you think something like December 2008— Lord Bhatia: I stopped. Mr Calvert: You stopped doing that and sent your main residence back to here? Yeah? And during that period, October 2007 and 2008 you would spend weekends there? Lord Bhatia: As often as I could. I was travelling a great deal. Mr Calvert: Would you say that you spent more time here than there? Lord Bhatia: I couldn’t hand on heart tell you that. Mr Calvert: Er, you can’t quite remember the address? Lord Bhatia: I can give you the address in a minute if you want. Mr Calvert: But off the top of your head you can’t remember it? Lord Bhatia: I don’t know how old you are but when you get older, your memory becomes… If you give me a minute I can go and get it? Mr Calvert: Please do. [2 minutes of silence on the recording.] Mr Calvert: Oh I think I saw that because your brother gives that as his address in Companies House. Lord Bhatia: That’s right. Mr Calvert: Reigate, Surrey. Your brother is quite a lot younger than you isn’t he? About 15 years younger than you? Lord Bhatia: Born in 1948 I think. Mr Calvert: And he looks after all your companies and things? Lord Bhatia: [Inaudible] youngest brother [inaudible] Mr Calvert: Are you still fairly active in business at the moment? Lord Bhatia: No Mr Calvert: Not any more right. Mr Calvert: Is there a telephone number I could contact you on if there is anything else I wanted to ask you? Lord Bhatia: The one that you’ve got there. Mr Calvert: Oh, your office number. OK, brilliant.

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Lord Bhatia: Usually I’d give you my home number if you wanted to call me here any time, but there’s a . You’ve got my office number. machine if I’m not around. It’s Mr Calvert: Yes, I’ve got your office number. And there’s nothing else you’d like to add. It was just that you obviously had decided to change because you wanted to move to somewhere smaller. And you were in the process of deciding whether to or not— Lord Bhatia: If I move from here then I need to buy the house and not rent it. I’ve been there since March 2006. I still continue to hold the house is in my name and all the rates and services, electricity, water, everything are paid in my name. Mr Calvert: Do you pay the rent?

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Lord Bhatia: Yes. Mr Calvert: I see. Lord Bhatia: Rent, rates… [the recording ends but the interview continued]

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2. Transcript of a covert recording of an interview between Ms Claire Newell and Mr Jonathan Calvert of the Sunday Times newspaper and a woman neighbour of Mr Sultan Bhatia and Lord Bhatia on Thursday 23 July 2009 at Lord Bhatia’s residence in Reigate Knocking on door Ms Newell: Hello, really sorry to bother you. I was just looking for your next door neighbour, number 31. They don’t seem to be in and I just wanted to make sure that I had the right house. Do you know the person that lives there. Neighbour X: Er, he’s called Sultan. Ms Newell: Oh yes. OK, I have got the right house, then. Is it just him that lives there? Neighbour X: Yes. Ms Newell: Does he live there by himself? Neighbour X: Yes. Ms Newell: Oh, OK. Neighbour X: He rents the place. Ms Newell: Does he? How long has he been living here for? Neighbour X: I don’t know. Probably about … I’ve been here … probably about two or three years, something like that. He’s probably, I mean he is obviously at work. Mr Calvert: That’s probably where he is. What time does he get back?

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Neighbour X: I don’t know, because I don’t have anything really to do with him. We’re on good terms, but it’s typical of neighbours, you don’t really see much of them, especially when he’s at work. I’m shutting myself in for the night, so I don’t see him coming back or anything. Ms Newell: All right, well hopefully he’ll be here soon. I’m sorry to have bothered you. Mr Calvert: His brother doesn’t live here as well, does he? Neighbour X: Brother doesn’t live here? Ms Newell: I was a bit confused whether he has a brother, you see, and I thought he and the brother might live together there.

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Neighbour X: No, I think his brother lives abroad. I seem to remember seeing him once and he said that this was his brother. This was some months ago. I think he was just over on a visit. He just lives there on his own. Ms Newell: Oh, OK. Sorry to have bothered you. Thanks. Bye bye. 3. Transcript of a covert recording of an interview between Ms Claire Newell and Mr Sultan Bhatia on Thursday 23 July 2009 at the door of his and Lord Bhatia’s residence in Reigate

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Ms Newell: Hello. You live at number 31 do you? You’re Mr Bhatia? Mr Bhatia: Yes Ms Newell: Hello. I am Claire Newell, I’m from the Sunday Times. Mr Bhatia: Oh gosh.

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Ms Newell: Yes, that’s such a coincidence. I was just dropping by to come and see you. I was looking for your brother actually. I didn’t know whether you lived here or— Mr Bhatia: I live here. Ms Newell: You live here? Does he live here sometimes? Mr Bhatia: Yes, er, why? Ms Newell: The reason I am asking is, sorry to, let me see if I have something. I’m sorry, I just caught you as you were walking home. Let me see if I can find you a card. Mr Bhatia: What are you doing here? Ms Newell: I was nearby, actually, I have a meeting and I was coming through Reigate. And as I was coming through Reigate … I don’t know if I’ve got a business card, but there’s my work card so you can see who I am. Mr Bhatia: You haven’t got a card? Ms Newell: I don’t think so. I think I’ve run out. I might have one in my handbag. I’ll have a look in a minute. The reason I am asking is because I noticed that your brother put that his main home was in Surrey between 2006 and— Mr Bhatia: You will have to ask him. Ms Newell: We’ve spoken to him already. Let me just shut my phone up. He said that he spends a lot of time here, with you. But I thought that you lived here? Mr Bhatia: I look after this place. Ms Newell: He doesn’t own it though does he? Mr Bhatia: No. Ms Newell: OK. Why do you look after it for him? Mr Bhatia: Why shouldn’t I? Ms Newell: I don’t know. I’m just trying to make sense of it. This is your home as far as I can see. Mr Bhatia: I’m just occupying a room here. Ms Newell: Oh, right, when we first spoke you told me that you live here. Mr Bhatia: Well, I live here. Please- [goes inside] Ms Newell: It’s quite important for me to— Mr Bhatia: It may be for you, but I can’t talk to you on my doorstep like this. Ms Newell: Why not? Mr Bhatia: Why? If I came to your house would you talk to me? Ms Newell: Yeah, I probably would. Mr Bhatia: Probably. Ms Newell: Well, I’m sure I would. Before you go, I’m sorry I caught you just on your way back and I didn’t mean to … Mr Bhatia: I am really tired. I’ve had a long day. I’ve got my dinner there. Ms Newell: OK, well I don’t want to take up too much of your time, but one thing I wanted to know is why you moved here? Mr Bhatia: That’s my business. Ms Newell: OK, well your brother has told us that the reason you moved here is because you split up with your wife. Mr Bhatia: Yes I have. Yes. Ms Newell: I’m really sorry about that. He said that he came here a lot. Does he stay here, your brother? Mr Bhatia: Yes, sometimes, certainly does. Ms Newell: Really? He says that this place is his main home you see. Mr Bhatia: Yes, yes. I only occupy one room. Ms Newell: Are there two rooms? Mr Bhatia: Yes.

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Ms Newell: And the other room is a bedroom is it? Mr Bhatia: Yes. Ms Newell: And how often is he here? If he is saying it’s his main homeMr Bhatia: I have no record of that. I can’t tell you. Ms Newell: Do your neighbours see your brother here a lot? Mr Bhatia: I don’t know. You’ll have to ask them. Ms Newell: OK. Mr Bhatia: I have to go. I really can’t help you. This is most peculiar. Ms Newell: I’m really sorry if it’s peculiar. If I can find a card in my handbag I’ll put it through your letterbox, otherwise I’ll leave you my number. The reason I am asking is that your brother has said that this is his main home. His main home is in Hampton as far as I can see. Mr Bhatia: You will have to ask him. Ms Newell: Can you tell me why he bought this place? Mr Bhatia: He hasn’t bought it. Ms Newell: Why he is renting this place? Mr Bhatia: Ask him.

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Ms Newell: Final question. Is it your name on the tenancy or is it his? Mr Bhatia: It’s not my name on the tenancy at all. Ms Newell: It’s his name on the tenancy agreement? Mr Bhatia: I don’t know. It’s his affair. I’m his brother. I just occupy a room. I split up with my wife and I’m here picking up the pieces, as it were. Ms Newell: I’m sorry. You occupy a room so do you pay your brother rent to live here? Mr Bhatia: No. Ms Newell: You don’t. Do you pay the bills or does he pay the bills? Mr Bhatia: He does. Ms Newell: Telephone bill, water bills, everything? Mr Bhatia: Yes. Ms Newell: All right, well that’s very kind of you. I’ll see if I can find a card and if I can I’ll put it through. Mr Bhatia: This is most unusual. Ms Newell: I’m sorry. But you can see who I am. You can see that I work for the Sunday Times and my name’s Claire Newell. That’s my press card and there’s me. Mr Bhatia: Shall I write this down? Ms Newell: Yes. Mr Bhatia: I have to inquire with your bosses whether this is regular. You shouldn’t harass people like this. Ms Newell: Well, I don’t know if it’s harassment. Mr Bhatia: It feels very much like it. I have just finished work and you almost pounce on me, as it were. Ms Newell: Well, not really. I think I was walking in front of you when I realised you were behind me. Let me see. If you like, do you want me to write it down for you on a piece of paper. Mr Bhatia: Yes please. And if you can tell me who I can speak to, you must have a … Ms Newell: Yes, I can tell you my boss if you like. I’ll give you my mobile number. And you want my boss’s name and telephone number too. I’m just trying to write it as clearly as possible. My writing isn’t particularly clear sometimes. That’s my name. Claire Newell, the Sunday Times. There’s my mobile number. Managing Editor news. There’s his telephone number. Mr Bhatia: There’s something else on your card. Ms Newell: Reporter. All it says is Claire Newell. It doesn’t say anything else. Mr Bhatia: It does.

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Ms Newell: OK, investigations reporter. On my normal card that I give out I think it just says reporter. I am sorry to have bothered you so late. I didn’t realise you were walking behind me. Mr Bhatia: You were hoping to see me this evening. Ms Newell: I was hoping to see you, yes. Mr Bhatia: I am sorry, I don’t take very kindly to … Ms Newell: I am sorry if you were surprised about it. OK. I am sorry to have bothered you. 4. Transcript of a covert recording of a telephone call made by Mr Jonathan Calvert to Lord Bhatia at his residence in Hampton on Friday 24 July 2009 Lord Bhatia: Hello. Mr Calvert: Hello Lord Bhatia. Thanks very much for getting back to us very quickly. Lord Bhatia: I’m sorry I was out and couldn’t call you earlier. Mr Calvert: Am I right in describing you as a philanthropist? Is that correct? Lord Bhatia: Sorry? Mr Calvert: Am I correct in describing you as a philanthropist? Somebody who has given quite a lot of money to charity. Lord Bhatia: Well, I don’t measure what is a lot and what is less, but yes, I have given money to charities. Mr Calvert: And you are obviously a multi-millionaire, obviously. Lord Bhatia: I am not. Mr Calvert: Are you just a millionaire, then? Lord Bhatia: I don’t think in those terms at all. Mr Calvert: But you are a man of substantial wealth who has done well out of business. Lord Bhatia: Well, I don’t consider myself as rich. I have never put myself forward as a big-time philanthropist. I’ve done my bit, whatever I can to help communities and the right causes, et cetera. Mr Calvert: I have seen you previously described as a multi-millionaire in pieces. Lord Bhatia: People describe me. What do I do? Mr Calvert: Do you think that’s wrong? Lord Bhatia: I don’t want to deny that and neither do I want to question that. Newspaper and media write what they feel like writing. I have always expressed that I want to put back into the community in which I have arrived here since 40 years ago. That is what has been my theme and what I have done. Mr Calvert: OK. There were just a couple of questions I wanted to ask you, because we had a quick conversation in the morning and you may wish to reflect on the conversation. Lord Bhatia: We had the conversation yesterday, you mean? Mr Calvert: Yesterday morning. You started renting the flat in March 2006. Lord Bhatia: I think that’s about right, yeah. Mr Calvert: And from that moment on, your brother moved in. Lord Bhatia: Yes. Maybe at that time or slightly later. I can’t remember the date, but yes, that is about right. Mr Calvert: And that would be about the time that your brother left his marital home. Lord Bhatia: Probably, yes. Mr Calvert: But you didn’t really live there until October 2007. Lord Bhatia: Yes. What I wanted to do, as I mentioned to you yesterday, was I wanted to see whether, research whether this is the right area to go to. Let’s rent the place and see how I feel about the place. So, around October 2007 I arrived at a situation to say, yes this is the right place to establish my home, as soon as I am able to dispose of my home in Hampton, because it has become too large, as we talked yesterday. That’s where I thought it was necessary to put my name forward as this is my residence, because that is where I want to go, and at the same time we started to think about buying out the flat and that’s where I am. Mr Calvert: Who did you buy the flat from? Lord Bhatia: From the owners.

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Mr Calvert: Right. Who were the owners? Lord Bhatia: I haven’t got the name in front of me. Some kind of a trust, I think. Mr Calvert: Why the gap between, why did you rent it in March 2006 if you didn’t then decide to go and try living in there until October 2007?

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Lord Bhatia: That’s what I’m telling you. I wanted to get the feel of it for a few months to see how I felt about it. That’s how it has travelled that way. Mr Calvert: I see. This is a funny question, but obviously your brother was there in one bedroom. Lord Bhatia: That’s right.

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Mr Calvert: And my understanding of that property is that they all have very, very small second bedrooms and that your brother’s got an office in it. There doesn’t seem to be a second bed there. Lord Bhatia: Well, there are two bedrooms there. There is one large double bedroom that is mine and the second is a small one that he occupies. That’s what it is. There is a large living room there. Mr Calvert: I see. And you were saying yesterday that your wife didn’t really go there.

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Lord Bhatia: She occasionally came there, but I was essentially visiting there as often as I can. Mr Calvert: And you would go at weekends. Lord Bhatia: I would, as often as I could make it. Because I was travelling a lot during that period, as well as not well during 2007 and 2008. It’s all part of that, but I went there as often as I can. I wish I had kept a log of how often I went and which dates I went, but it was never in my mind in that aspect. Mr Calvert: And you changed back to your main address on January 1st 2009. Lord Bhatia: Yes, because I just could not go there. I had reached a stage where my health was deteriorating, still is deteriorating, as I mentioned to you yesterday, but this is the right time, now I am negotiating the purchase of the property and once that is done I have to put my house on sale here in Hampton and it will take its course and once I have moved there then I will get back into taking a decision that that will be my permanent home. Mr Calvert: When did you notify the Lords about the change of address? Was that some time after January? Around about February?

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Lord Bhatia: About what? Mr Calvert: When did you actually notify the Lords that you had changed the address? Lord Bhatia: Must have been in the last quarter of 2008 or early January 2009, I suppose. Mr Calvert: Because you’ve got three months to claim your expenses, haven’t you? Lord Bhatia: What do you mean by three months to claim my expenses? When? Mr Calvert: What I mean is that after an expense has been incurred, you’ve got within three months to actually claim it. Lord Bhatia: But from January I have not claimed any night allowance for my residence there in Reigate at all. Mr Calvert: I just wondered, because presumably the way you tell the House of Lords that your main address has changed is when you fill in an expense form. Lord Bhatia: Absolutely. Mr Calvert: And presumably you wouldn’t need to fill in an expense form on January 1st. Lord Bhatia: No, it’s done monthly, Jonathan.

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Mr Calvert: So, the end of January, was it? Lord Bhatia: Every month you submit your expense claim, et cetera. From January I stopped asking for the Reigate address as my residence. I notified them accordingly. Mr Calvert: Looking at where you live, obviously your daughter lives in the white house on the entrance. Lord Bhatia: Not white house, the next-door house. It’s number 20 Meadow Gardens. Mr Calvert: Yes, number 20. Isn’t that white? I seem to remember it being white. Lord Bhatia: Probably. Mr Calvert: No, it’s not called The White House. I wasn’t suggesting that was its name. You sort of share the gardens, don’t you?

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Lord Bhatia: Well, part of the garden is hers; part of it is mine. It is clearly demarcated in terms of two separate plots. Mr Calvert: I see. And your grandchildren live there as well. Lord Bhatia: The children grew up and moved away again themselves. Mr Calvert: Oh, they’ve gone, have they? Lord Bhatia: Yes. Mr Calvert: From the outside, to us, it does look inexplicable that you, as a wealthy philanthropist, should choose to live in a small flat in Reigate. It looks far more understandable that what you were trying to do was help out your brother by giving him somewhere to live in Reigate. Lord Bhatia: That is not true Jonathan. I vehemently deny that. When you reach that age yourself you realise that you can’t look after a huge house with four bedrooms and living room and everything else, with a garden at the back. You need to rearrange your life. Both I and my wife have clearly decided we cannot continue to live in that house, maintain it, look after it, have it cleaned and all the rest of it. We need to go into a much smaller place. I think it is similar if you ask anybody else at that age that people want to move out from where they were to a smaller place to manage. That’s how I’ve come to that conclusion. It’s nothing to do with my brother, but I needed someone to look after that house because I’m not there every day in Reigate, et cetera. I allowed him to stay there. If he decides to move from there, that’s his prerogative when I finally take a decision to move there permanently, if I am able to buy that flat, he would have to find another premises and I will find it for him at that time. Mr Calvert: Because in the mean time you pay the rent. Lord Bhatia: Absolutely. Mr Calvert: And do you pay all the things such as the gas bill? Lord Bhatia: All the services. Mr Calvert: All the electric bills and things like that. What does he do for a living? Lord Bhatia: He works for a charity. One of those I mentioned to you yesterday. Mr Calvert: He works for a charity. Ah, I see. So he presumably doesn’t have a substantial income, which is why you help him out with all this. Lord Bhatia: He’s my younger brother, 15 years younger than me. I think he’s the baby of the family. In my culture, the way we are brought up, we look after our own in whichever way we can. It has nothing to do with money and nothing to do with anything else. A family member is a family member who you care for and he cares for you. It’s all of that that goes together. Mr Calvert: But you can see why, from our point of view, that’s all very laudable and I agree with you that’s true, but it does look as if that’s exactly the reason why you started renting the flat in the first place, to help your brother out. Lord Bhatia: No, I really vehemently, and I beg you to believe me on this, this is the truth. This is the truth. Because we want to move there. I needed somebody to look after that house because otherwise you rent a place, you keep it there and keep it vacant doesn’t make any sense. Somebody has to be there. I’m not there all the time, as you know, during weekdays. Please, Jonathan, it is your prerogative to believe me or not believe me, write whatever you want to write, but I have to say this to you, that this is how I have travelled that route over the last two or three years. It’s a genuine desire to move from a huge house into a more manageable space. At my age you don’t need all this, you know. Over the last 20 years I have enjoyed living there. My children, my grandchildren were there, it was a family home, et cetera, but you know, everybody has to make a change. You may like it, you may not like it, but that’s what you make a change. I genuinely want to impress on you, or whatever it is, I hope that I can convince you in this, it is your judgment to say whatever you want to say on this, but it is genuinely the reason. The decision we have made very clearly. We are going to move out of this house as soon as I can sell it and as soon as we buy an alternative place in Reigate or somewhere there. If I can’t buy the existing flat I will buy something else, but that is the desire. Mr Calvert: Obviously, for that time, October 2007 through to January 2009, you were obviously continuing to live in your main house. Do you think that maybe it was a mistake to designate the flat in Reigate at that stage as your main home? Lord Bhatia: You asked me the same question yesterday. I do not consider that as a mistake. I genuinely was doing that, I was well within the rules of the House of Lords for expenses, et cetera. And I did that in a very clear way, as clearly as I can, as I am articulating to you. Yesterday you asked are you sorry for it. What answer can I give you about that?

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Mr Calvert: One thing I was going to ask you was, do you think, that, as you probably saw, many MPs do, about a month or two ago, that you should pay that money back? Lord Bhatia: Please, Jonathan, help me. You are a journalist of great repute. You have done a lot of work on this. I know what you have done. In theory, if I want to pay the money back I am proving myself to be guilty, I have done something wrong. I genuinely haven’t done anything wrong. I have genuinely done everything openly. All the declarations have been made and everything has been done properly. I really have to give you my side of it. Mr Calvert: Yes, but you’ve got to remember that it’s hard for us to believe that you were really living in that flat as your main home when it is in fact your brother who was living there and you could only ever pop in at weekends at best. Lord Bhatia: But that was precisely what it is. I have never denied that fact that during weekdays when I was attending Parliament, during weekends I would go there and live there. That is what I have told you. My only mistake, if any mistake that could be considered a mistake, is that I haven’t logged which nights I didn’t go there because I was travelling, I was not well. It’s really, at the end of the day, how much you believe in what I am saying. The last thing I want is being tarred with the same brush as anybody else. I have a lot of respect for most of the Members of the House of Lords and House of Commons. They are good people. I have followed all my rules absolutely implicitly, in my view. I explained to you the reason why I took that flat, why I want to buy it, why I want to move. The only thing I can request is to say, please, this is the position, don’t see it in any different way, because there isn’t any other motivation in that. Mr Calvert: You have maintained your Hampton address at Companies House and the electoral roll. Lord Bhatia: Absolutely. Mr Calvert: And you don’t show up at all at the Reigate address on either of those things. Lord Bhatia: I didn’t because, it doesn’t belong to me, but at the right place in the House of Lords I have registered that. If you rent a property you don’t have to register it with Companies House or whatever we are talking about. Mr Calvert: But by its very nature, on the one hand you have got a very small rented place where you go occasionally at weekends and on the other hand you’ve got your family home where you have lived for 20 years, which is very substantial, and that would be a multi-million pound house.

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Lord Bhatia: I don’t think so, but if that’s your view, that’s your view. I don’t care if properties are multimillion or anything. I don’t think so. Mr Calvert: Well, it’s got quite substantial grounds as well. Lord Bhatia: It may have substantial grounds, but you are making an assumption that it is a multi-million house; it isn’t.

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Mr Calvert: But the contrast between the two and the definition of which your main home is, it’s quite stark, isn’t it? Lord Bhatia: Well, it may be stark, but that is where I am. At 76 I cannot upkeep that house that I have got. I think all of us at our age have got to make the decision to say…

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Mr Calvert: That would be a purer thing if, for example, you had sold your house and moved into the flat with your wife, but that’s not what happened. What happened is that your brother has always lived there. Your brother regards it as his home and you go there occasionally rather than … Lord Bhatia: No, please, I do beg you to listen to me. My brother has always maintained, he knows that this is my home. I invited him to stay there to look after the house. He is to all intents and purposes a family member looking after the house while I am not there. There is a period and process through which you dispose of the house at Hampton. You’ve got to, for 20 years you’ve got to bring it up to date because it’s worn out, you need to do a lot of repairs, et cetera. Put it on the market, sell it at … the last two years, probably, or year and a half, it’s not been easy to sell anything because of the economic conditions. I don’t know when I will be able to sell the house. I first went through the process of maintenance and repairs and then putting it into shape, then put it on the market at the right time. It may end up that I may be owning lots of properties at the same time, when the time comes, but the intention is definitely to move out of Hampton. I just cannot manage that house and neither can my wife at our age, and I don’t think it is an unusual phenomenon, Jonathan, you must know that. Mr Calvert: I know, but it is quite unusual for someone to move from where you are, where you know people locally… Lord Bhatia: Why is it unusual?

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Mr Calvert: Your daughter is there as well … to Reigate, where you have not got any association. Lord Bhatia: I understand that, but the decision is to move from Hampton. We have chosen to live in Surrey, in Reigate or somewhere in that area. We have chosen the Reigate flat that is there. To me it looks very suitable for what I require. Who knows, tomorrow my daughter may decide to move, because she has been living there for over 20 years. She may decide to move, because she is getting on in her life. She is about 55 or 56 or something. Her children have moved away from there. She may want to be near her children. I do not know what her plans are. You cannot dictate yourself to your children and your grandchildren and your brothers and everybody else. I think we all look after each other, and yet we respect each other’s independence and all the rest of it. Really, it is not unusual. I vehemently say this to you, that our desire to move from Hampton is purely because we cannot manage that house. Neither is it multi-million pounds worth of property. If you gave me that kind of money, I would sell it tomorrow morning, but I don’t think it’s the case. Mr Calvert: You’d get £2 million for that at least. Lord Bhatia: Give me £1.5 million and I will move tomorrow morning. Put it on the table and I will sell it to you. I don’t think that is the value of that property. This is a very different time of property values. You know it more than I do, probably. The value of properties have flown all over the place at different times, but the last two years have been very, very difficult in terms of property prices and have gone down everywhere. I think it is not right for you to say that I live in a multi-million pound house. It is not of that value. It never was of that value, frankly speaking. Mr Calvert: I suppose it is because you never sold it, but … Lord Bhatia: No, but you are aware of the property market. Houses are being sold around that area. You know what the property markets are like. Mr Calvert: I don’t actually. I haven’t looked at that particular area. South-west London obviously is a very expensive place to live and obviously the properties are considerably higher than the rest of the country. Lord Bhatia: Sure, well if you really want to look at property that is going up in value, it is Kensington and Chelsea and all those areas. Mr Calvert: I know they are more expensive. Lord Bhatia: Hampton has also social housing and all the rest of it. It is a very mixed area. I live there, I know the area, believe me you said that you don’t know much about property values. I do because I live there, you have a comparison and you have a sense of what is going on around you, you read about it in the papers, there are all kinds of estate agents leaflets that drop into your box unsolicited. Values are not what you are talking about, far from it. I would jump at any offer that you give me of £1.5 million or £2 million. We are not talking of that kind of thing. But really the crux of the whole thing is not the property value; the crux of the whole thing is that I cannot manage that big house now, as I used to be able to do for 20 years when I was younger, my family were around me, my children were growing up, my grandchildren were growing up. It is a different story from where we are today. You have got to ask any elderly person like me, and I believe that I am elderly at 76, I think I find everybody younger than me, bizarre sense, but that is what it is. Mr Calvert: The real crux of the matter is that you were claiming an allowance for people who didn’t have a home in London so that they could attend the Lords, when you did have a home inside London to attend the Lords. Lord Bhatia: No, but if I have taken the decision to move out of that house, which is no longer in London, that is what it is, and I have done it very openly, transparently and clearly. I have made all the right declarations. I don’t think I have anything to hide. Mr Calvert: But you didn’t move out of the house. You stayed in your own house. Lord Bhatia: But I declared that also. During the long Parliament days of sitting and at the weekends usually, that’s where I am living. These are all declarations made very, very openly and clearly. Mr Calvert: The neighbour, who is right next door, has never seen you living there. Lord Bhatia: Which neighbour are you talking about? Mr Calvert: The woman who lives next door. Lord Bhatia: The woman in number 20, in number 18, you mean? And 22, 24? Mr Calvert: We are talking about Reigate here. Lord Bhatia: And who are you talking about. Mr Calvert: We are talking about the flat in Reigate. Number 31 is the end one.

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Mr Calvert: The one next door, there is a neighbour there who says that your brother has only ever lived there on his own. B Lord Bhatia: She wouldn’t know. That area is so quiet in that aspect that she wouldn’t know that I am there at the weekends or not there. She wouldn’t even know. She’s not a very communicative person. She’s a single woman, as I understand it. Mr Calvert: But if it was your main home you’d have been there more than just at the weekends. You’d have been there during the recesses. C Lord Bhatia: No, Jonathan, why do I want to go there during recesses if I’ve got other travels to do, other work to do. I have a home there. I am not claiming for anything for that over the recess period. Mr Calvert: So you lived in your Hampton home during the recess period? Lord Bhatia: Yes. Also when I felt that I needed to go there, I went there. D Mr Calvert: The whole point of allowances is for people who live outside London to find somewhere in London, which is quite expensive and you’ve got to keep it going all year round. It is supposed to compensate them for that. It is not supposed to be for people who live in their London house during the recess, et cetera, because it is their main home. Lord Bhatia: But, no I think I do not agree with those rules. I do not agree with what you are saying, sorry, the rules are the rules which are there. During a Parliamentary period where you are sitting, for which you claim the night allowance. Outside the Parliamentary period, during recess or during holidays or whatever the case may be, it is entirely up to me to decide to stay in either of the two houses. I think that is absolutely clear and open. I do not claim for night allowances during the Parliamentary period that is off. Neither do I claim for anything during that period because the House is in recess, as you know. This month or the next 32 weeks, or whatever the period that we are in recess, I don’t claim anything. And I continue to pay the rent in Reigate. I continue to live here and pay expenses for it. I live in the places when I want to feel like doing that. Mr Calvert: So just so I am clear, during that year that you were claiming it was your main home, yesterday you told me you went there 30 to 40%… Lord Bhatia: I said I haven’t kept a log, yes it is 40 to 50% and that is what it is. G Mr Calvert: So you would go there 40 to 50% of weekends when the House was sitting, but during recess you would be either at your Hampton home … Lord Bhatia: Either of the two places. Mr Calvert: I thought you just said you would be at your Hampton home then. Lord Bhatia: I would be at my home address, but I have a place in Reigate and I want to go there if I wanted to. H Mr Calvert: I suppose because your brother is living there. Lord Bhatia: No, my brother is occupying a small bedroom. I am occupying the large bedroom there, which is mine. Mr Calvert: The small bedroom’s got a desk and an office in it. J Lord Bhatia: Yes, it’s a small bedroom. He is looking after the house for me. Mr Calvert: But it hasn’t got a bed in it. Lord Bhatia: There is a bed. How do you know there is no bed? You haven’t even come into the house. Mr Calvert: You can see it from the back. K Lord Bhatia: You can see it from the back, there are two bedrooms; there is one large bedroom and one small bedroom. The large bedroom is mine; the small one is his. He is a single person. I don’t know what younger people than me and my brother would be doing. He merely looks after my house during weekdays. Weekends occasionally he may be there, he may not be there, I do not know. I don’t rule his life that way. I support him. He is doing me a favour by looking after the house when I am not there during parliamentary days. That’s what it is. Jonathan, really it is entirely up to you to take my word for what I am saying, but this is sincerely open, I have done it completely transparently as best as I can, as I understand it. I think I am doing the right thing. I have done the right thing. That’s where I am coming from. There is a genuine desire for me to move from Hampton as quickly as possible, as soon as I can manage it and that is what I intend to do in the coming months. I hope that I am able to buy something suitable in Reigate. Really, I like that flat. It is very nicely placed. It is quiet. It is near the town. Everything is right in that. I chose it with a great deal of care. If I really wanted to claim my night allowance, I could have done it from March 2006. I didn’t do that.

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Mr Calvert: I am still not quite clear why you didn’t do that. Lord Bhatia: Well, I didn’t do that because I was not sure that that is where I want to live. That is the reason why I rented it to start with. I wanted to see how I felt about it. Is this the right place to go to? And then I took a decision that yes, this is the right place for me to live after staying and renting that place for about 18 months, however long it is, March 2006 to 2007. One has to feel that if I am going to move permanently from where I have been living for the past 20 years, it is a difficult decision, a hard decision. It is heartbreaking to leave the house in which you’ve had your children and grandchildren grow up. My grandson died there in that house. Funeral ceremonies took place there. There have been some traumatic events in that house. But the reality at my age, you have got to take those hard decisions. I could leave a problem for my children. I am disposing of a lot of things. There are past papers going back years that I could put in that house, no longer will be possible, that is the reality. And I genuinely am telling you this as the honest, straightforward truth, that is the direction in which I am going and don’t read it any differently, please. Mr Calvert: But then you decided it wasn’t your main address in January, obviously. Lord Bhatia: Because I am now saying, from January onwards, I cannot go there simply because of my health and everything that I described to you. I am under tremendous healthcare at the moment. I have had to shed almost a stone and a half within the last three months. I have had high blood pressure that I am being treated for by two doctors. I have the nasal problem that I told you about. I need to be near my daughter, near my doctors and everybody else to make sure that I bring myself up to a proper health situation. And again, that doesn’t help with my present health. I cannot maintain this house. My wife does not have very good health herself. All these are multiple questions that people at my age have got to face. That is the reality. It is a difficult decision, but it has to be taken. Mr Calvert: I can understand that in times when one is feeling of ill health, that one would wish to be at your home, which is why I again come back to the idea that it seems very strange to us that you would ever regard the Reigate flat as your home, above your home in Hampton. It doesn’t feel right, does it? Lord Bhatia: Jonathan, I think it is absolutely right if you see the direction from which I am coming. What I am telling you is when your health is not very good and you are getting it better, you cannot maintain a large house of that nature. Your children and grandchildren have moved away. You are now no longer able to maintain a large house with 30 or 40 years of archives and papers. I am disposing of everything as much as I can. You need to shorten your life because if you don’t deal with that now, you will leave a problem for your children and your grandchildren who will succeed you in whatever you have. I don’t want to leave a problem for them in terms of, ownership, belonging now is no longer the issue. It is really simplifying your life. You don’t need all of that that you needed 20 years ago. When you are young you are much younger and you can do lots of things that you want to, but it is no longer important for me. Claiming more money or less money is irrelevant in that context to me. Really, drawing that allowance for 15 months or something is neither here nor there for me, but if you are asking am I sorry for doing that, I don’t know how to answer that question, because I have done it with total clarity and complete openness, declaring what I needed to declare. Mr Calvert: But, you see, normally your house is where you and your wife life and the natural place where all your things are. It’s your home. Your home is not somewhere where… Lord Bhatia: Jonathan, I have not hidden that. You keep bringing back my brother into it. My brother is looking after it. At the moment we decide to move there permanently, which I intend to do as soon as I am able to buy that flat, my brother will not be able to live with us. I will have to find something suitable, he will have to find something suitable, and we will make it happens as a family member. I have got six sisters and this one remaining brother. We look after each other in that aspect. That is nothing unusual in my culture and the background from where I come. I do a lot for many other people from my community and my family as well as the wider community. Mr Calvert: I can see that, but it does really look as if your brother was in a bit of a fix because he had to move out of his house and you found him a place to live. Lord Bhatia: What is wrong with that? I want an answer. Mr Calvert: Because what it then suggests is that your motivation is really, and this is how it has actually turned out in the last three years… Lord Bhatia: No it hasn’t. Mr Calvert: … is that you wanted to rent this place so that your brother has somewhere to live. Lord Bhatia: No, I totally deny this. I totally deny this. I totally refuse that. Mr Calvert: But that has been the outcome.

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Lord Bhatia: Well, I don’t think that is the outcome. I do not think that is an outcome. That is how you choose to see it. That is fine. I am giving you my side of it as I see it very, very openly, very, very clearly. I have made declarations of everything. If it was necessary for me to register in the Land Registry or whatever that I had rented a place, I would have done that, but that is not the case. This has been done very openly and very clearly. I want to ask you one question. I understand from my brother that somebody from your office had been to see him yesterday. Mr Calvert: Yes, that’s right. Lord Bhatia: I wish that you had told me that. I would have arranged for you or for her to meet with him properly. He phoned me late last night when he had just recovered, about 9 o’clock or something at night, he found a lady standing there or walking there and he inquired and he was told that she came from your office. Fine, that’s quite OK by us. Mr Calvert: She’s not very threatening. Lord Bhatia: Please, she is very polite, she is very correct. This is how my brother described it to me. But he needed to phone to say who is this person who came. I would have been quite happy if you had phoned to tell me you were sending somebody there to meet my brother, or you wanted to go there yourself. We agreed when you left yesterday to say if there is any more information you want, anything else you want, please feel free to phone. Mr Calvert: Which is what I did do today. Lord Bhatia: Absolutely, I appreciate that, but before that, if you send somebody late at night there…

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Mr Calvert: I think the problem was that it was not that she arrived late at night, the problem was that he came home from work late at night. Lord Bhatia: I understand that, but I would like to believe, Jonathan, it is not because we are having this very difficult conversation, you are a journalist and you have a good name, I do not have anything to hide from you. I respect what you are doing. I think without the freedom of the press this country, this democracy would not work. I firmly believe what you are doing, but with that freedom of expression, freedom of writing, whatever you want to write, comes the responsibility that you have got to judge people and I hope that I am able to convey to you that what I have described to you today is absolutely open truth. Please do not see this, however much you would like to spin a story if you would like to do that and you want to do that, that is your prerogative, I would deny that this flat was not purchased, or, sorry, rented, for my brother. I genuinely want to move there. I have travelled there. It would have been very easy for me to have declared that flat as my permanent residence in March 2006. Why didn’t I do that? I am not looking for money. At the end of the day that is not my motivation at all. Mr Calvert: Which is why you did in October… Lord Bhatia: Because I wanted to be sure of that area, that house. I felt comfortable. Only then I could begin to do that. Mr Calvert: But something happened to you in October that made you feel that that place was your main home as opposed to before, when … Lord Bhatia: Well, I felt comfortable that this is where I want to live permanently. I had made that choice, I had tested it out after 15 months or whatever period from March 2006 when I took the place. I could have asked for that money by declaring that. I didn’t do that because I was not sure at that point in time. I wanted to be 100% sure that that was the right time to do that, and that is what I did. Really, in saying it any differently by you, I know that I could be damaged by what you write. I beg you please to listen to me to say what I am telling you is absolutely the truth. You have a responsibility as a responsible journalist to say that is what I am telling you. You believe me or you don’t believe me. I am an honest person that way. I don’t look for pennies of this nature. I have done it genuinely with the rules with proper declarations and I will be making those declarations as soon as I am able to buy that house, and if I am not able to buy that house I will find something else in a similar area and move there. I cannot, cannot, cannot, and I keep saying this to you, I cannot continue to live in this large house. I do not need it, I cannot maintain it. I need to see the reality. Mr Calvert: When you were looking for properties, what made you look at Reigate? Lord Bhatia: I wanted to look at Surrey, and this is the area. I travelled a great deal in that area to find the right place. I needed to be sure that there are properties available to rent. That is what I started with. And I found this property. We talk about four years ago or three and a half years ago. I promise you one thing, that you don’t take these decisions very lightly, to find the right place. It takes time and you finally zero in on something and think, yes, that’s right, let’s test it out and see what it looks like and then take it forward. I am in the lucky position that I can afford to pay the rent first to make sure that it’s the right place to go to, make

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sure that it’s the flat that you want to purchase, and you travel in that direction. And, Jonathan, please treat me fairly. You have a responsibility to be fair as well as to be objective. You have got to listen to my reasoning. There is nothing untoward, more than what I have told you, and no other intentions at all. I have told you truthfully exactly what the position is, and I made all those declarations openly everywhere. Mr Calvert: OK, well I think we have gone through all that. Presumably you would have evidence that you’ve paid the rent, would you? Lord Bhatia: Yes, every month money is being paid. Mr Calvert: Do you pay it by cheque or do you pay it by … Lord Bhatia: No, there is a bank order from my company that I control, ultimately I am the owner of that company. The rent is paid from that company. Mr Calvert: I see. Which company is this one? Lord Bhatia: Casley Finance Limited. Mr Calvert: And your brother is a director of Casley Finance? Lord Bhatia: The company secretary, if I recall properly. Mr Calvert: Wouldn’t that be regarded as a benefit in kind that ought to be declared to the taxpayer? Lord Bhatia: I am quite absolutely certain that my accountants will have dealt with that. You are probably trying to compare it with people flipping their homes, buying and selling and all the rest of it. This is far from it. Mr Calvert: Casley Finance is a company that you wholly own, isn’t it? Lord Bhatia: Yes, ultimate beneficiary of that. Mr Calvert: And it’s a company that offers loans and things like that, is that right? Lord Bhatia: Yes, at the moment for the past two years there is very little activity because of the property market and everything else. The business has been almost at a standstill for the past couple of years. Mr Calvert: What is the business worth, do you think? Lord Bhatia: Nothing. If you don’t have any loan book, and that is where we are more or less today, it’s got nothing. Mr Calvert: Whereas Forbes you don’t own, as I understand it. Lord Bhatia: Forbes Campbell International, again I am in the same situation. I am the ultimate beneficiary of that. Mr Calvert: Oh, are you? Because there are two, aren’t there? Forbes Campbell and Forbes… Lord Bhatia: Forbes Campbell Limited and Forbes Campbell International Limited. Mr Calvert: So they are both yours. Lord Bhatia: Yes. Mr Calvert: And are they in a similar state? Lord Bhatia: There is no activity. All these companies are really doing the same work, one way or the other. We are completely at a standstill. There is virtually no business. Mr Calvert: I read somewhere that what you did was you loaned for importers and exporters. Lord Bhatia: That is a long time ago. Mr Calvert: Now it is more sort of general loaning? Lord Bhatia: Yes, and you know the markets change over a period of 30, 40 years. Businesses have changed. You change accordingly. I have done a lot of business in my time and the time has come in the last eight or ten years I have been steadily reducing my interest in the business. Mr Calvert: So, sorry, just for completeness, Casley Finance, do they pay the rent and all the other bills, service charge, the heating and electricity. Lord Bhatia: Absolutely. Everything. Mr Calvert: The water rates. Lord Bhatia: Everything. Mr Calvert: Right, OK. I think that’s, I think we’ve gone over everything, unless there anything else.

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Lord Bhatia: I don’t have anything else I want to ask. Is there anything else you want me to do to help you to get the right picture for you, because I have told you everything I need. I understand also that the lady who came last night also went this morning to my brother’s wife’s home. Mr Calvert: I think she may have, yes. Lord Bhatia: You know, Jonathan, I hope that between two of us that I have talked to you yesterday openly and clearly, that somebody should have told me that, whoever you want to talk to, I can arrange all that for you. It is very distressing because my brother got phoned by his ex-wife to say that somebody came and said that we have been separated, we have divorced each other, why do I want to be asked these questions? I am not blaming you at all, you are doing your job, but please, if there is anything you want from me or my brother or anybody, just tell me. I will not hesitate to give you any information that you require. I genuinely want to tell you this. Mr Calvert: Is there another number I can contact you on. I’ve got your home number, haven’t I. Lord Bhatia: I have given you two numbers. I have given you this number here, my office, from where I am speaking and I have given you my home number. Those are the two numbers on which I am available all the time. Mr Calvert: Right, so either one or the other. Lord Bhatia: Absolutely. Mr Calvert: But obviously not the Reigate flat number. Lord Bhatia: If you want that flat number, I can quite easily get it for you. That isn’t a problem. That is what I am saying. If you want anything, please tell me. Mr Calvert: I will, OK. Lord Bhatia: Can I ask you one last question? What is the intent now? Mr Calvert: We will write a story and obviously we will reflect fully your comments within it. I have to say that, from the outside, I can see your explanations, but it is up to the reader to make up their own mind, isn’t it? Lord Bhatia: Largely, their opinions are shaped by what you write, really. What I am trying to express to you and what I am telling you is, please, mine is a very different story, a very different position than most others that you have written about, whether they are in the House of Commons or the House of Lords. Mine is a very, very different position. That is what makes the difference. I have not bought that property as yet. I have declared it in the right way, openly and absolutely transparently. If you choose to give a different meaning to it, people will read what you write. You shape the opinions of people. I have a good name in my communities, internally, externally, in my charity work that I do. I hope that you will keep that in mind when you report, because you need to ultimately believe me, what I am saying to you. That is the genuine truth. There is nothing that I want to hold back or hide from you. But don’t plaster me with what you see elsewhere. Mine is a very different case, done very openly and transparently. I hope that you will at least bear this in mind when you write. You have a responsibility to do that. Mr Calvert: Yes, of course. OK. Look, I will come back to you if there is anything further. Lord Bhatia: Would you do that for me. Mr Calvert: I appreciate you talking at length to me about it.

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Lord Bhatia: I am not shirking for a second in speaking to you whenever you want to speak to me between now and the next 24 to 48 hours. I know you have a deadline to meet, but any other question that comes to your mind, please do ask me. I will readily ring you. Just call on the phone and I will be there. If I am not around, then I will call you back immediately I get the message from you. Mr Calvert: All right. Well thank you very much. Lord Bhatia: All right Jonathan. Thanks very much. Bye bye.

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Minutes of Evidence
TAKEN BEFORE THE SELECT COMMITTEE FOR PRIVILEGES AND CONDUCT (SUB-COMMITTEE ON LORDS’ CONDUCT) FRIDAY 25 JUNE 2010
Present Cope of Berkeley, L Dholakia, L Irvine of Lairg, L Manningham-Buller, B (Chairman) O’Neill of Bengarve, B Bhatia, L

Examination of Witness Witness: The Lord Bhatia OBE, a Member of the House, examined accompanied by Mr Matthew Bosworth, solicitor Q1 Chairman: Thank you for allowing us to start early; that is good of you. I would like to first of all introduce you to the members of the Committee, then I will give a brief introduction, and then we will start. I am Eliza Manningham-Buller and I am the Chair of the Committee. Lord Irvine, Lord Cope—I think you probably know most of us—Lady O’Neill and Lord Dholakia. Lord Dholakia, if I may speak on his behalf, wishes to put on the record that he once visited your house in Hampton at your invitation to meet a visiting Indian educationalist. The purpose of our inquiry is to investigate your use of the Members’ Reimbursement Scheme and to report to the Clerk of the Parliaments. The process is set out in a report from the Committee for Privileges, which you have seen, on the procedure for considering complaints against Members. Our report will first of all go to the Clerk of the Parliaments; he will then pass it to the House Committee and, if our report finds against you in any way, it will then go to the Committee for Privileges, to which you would have the right of appeal. This session is being held in private and these proceedings are entirely confidential at this stage and remain so until published by the Committee for Privileges. A transcript is being taken which we will make available to you for correction before publication. You will see from the report on procedure that this Sub-Committee is not the same as a courtroom. The report on procedure requires the allegations to be proved on the balance of probabilities. You have brought Mr Bosworth with you, but you understand that you have to answer for yourself. In that, I would remind you of the Code of Conduct and your duty to act always on your personal honour, which of course applies to us all. We are now going to ask you questions. If at the end of our interview you have things which you would wish to say or add or correct, I will give you an opportunity to do so, but what the Committee would find helpful now is if we could focus on answering the questions we wish to put to you. Lord Bhatia: Thank you, My Lord Chairman. I have a request to make. It has all been very helpful and I understand exactly what you have said. I have prepared a statement that I would like to read out for seven or eight minutes responding to some of the matters and some of the past matters, if you would allow me to do so, because it might set the stage for your questioning. Q2 Chairman: Yes, we have time, you may do so. Have you brought copies with you? Lord Bhatia: I will give copies to all of you. I have brought ten copies with me. [The same are handed in at the bar. Not printed.] Q3 Chairman: Could we have it while you are reading it through; that would be helpful. Lord Bhatia: Thank you. The context in which I want to speak is I want to thank the Sub-Committee first of all for taking time to meet with me in person. As a Member of the House, I am as concerned as you are to ensure that the standards of the House rules are adhered to. As you can well imagine, the allegations that have been made about me and the ensuing investigations, have been very distressing for my family and myself. I am keen to resolve this matter as soon as possible. As I hope you recognise, I have been co-operative with every stage of the investigation and will do my utmost to assist the Sub-Committee with its work. I am accompanied today by my legal representative, Matt Bosworth, who has been advising me at every stage of this matter. In preparation for this meeting, I have reviewed all the information you have sent to me, my discussions with Mr Pownall and all the materials I have sent you. I can well understand that the key issue in your minds is whether I can provide any corroboration for my travel and visits to Reigate. I can confirm that I have provided the Sub-Committee with all the

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The Lord Bhatia OBE Casley Finance Ltd. Full evidence of this has already been submitted to Mr Pownall. I am still considering what changes I want to make in my living arrangements but due to changes in my health, my family have asked me to put everything on hold. I ceased to designate Reigate as my main residence in January 2009. I would point out that my claims for travel and night allowances related to only a part of the duration of my possession of the Reigate flat. Let me deal with the two allegations made by the Sunday Times, which are relevant to the issue of my good faith. Firstly, it is clear that the Sunday Times has complained on the basis that my brother lives on the premises and that this can only lead to a conclusion that there has been wrong-doing on my part. I would point out that he does so to take care of the property in my absence. In addition, it is very normal in my culture for my brother to live in my home. I would point out that the rules do not provide for any exclusion on who can live in a property. As importantly, the whole bias of the Sunday Times’ complaint has relied on factually inaccurate information about my political affiliations, the value of my personal wealth and the house in Hampton thus casting aspersions on my character and integrity. Secondly, the Sunday Times alleges that my ceasing to claim the night allowance after January 2009 was manipulative and there is some suggestion that I did this after becoming aware of the Truscott inquiry. This is not the case—and in fact if you examine the detail you will note that I ceased to claim in December 2008 (before any ruling was made) and that my claim for January 2009, along with my letter designating Hampton as my main residence, was received by the House on 6 February 2009 and not 11 February 2009, as stated by Mr Calvert in his letter of April 2010. I would also ask the Sub-Committee to look at the covertly recorded transcript of Mr Calvert and myself (Tab G, page 11, lines 10–30 inclusive) (p89H)1 as this shows my taking every effort to ensure any expenses claim was made in good faith and within the rules as they stood at that time. I would make one final point on the issue of my “good faith”. I have always taken my responsibilities to the House and my charitable work with the utmost seriousness and have given willingly of my time and resources— financial remuneration has never been a motivation for the work I have undertaken in the House or for the charities that I have actively supported and worked for in a voluntary capacity for 40 years. After I have spoken I will distribute my CV of the work that I have been doing in this country for the past 40 years. In conclusion: I would like to express some sadness at the false allegations and complaints that have been made about me. I fully accept that the House should
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information I have. I understand that this will, in the end, come down to whether you can accept my assurances. I can only reiterate that I have acted in good faith throughout. The two issues that you have posed in your letter dated 10 June. These issues have been raised before and my responses to them have already been given substantially in person and in writing. I will happily cover this ground again. The frequency of my stays in Reigate, taking into account the changing nature of my claims for travel reimbursement. Between October 2007 and February 2008, I travelled to Reigate during weekends and claimed transport costs from Reigate to Westminster on Mondays and from Westminster to Reigate on Fridays or Saturdays (depending on whether the House was in session for four days or five days during a particular week). I ceased to claim the travel costs between March 2008 and December 2008 although Reigate continued to be designated as my main residence. The reason for this is that my travel arrangements, given my commitments both in the House of Lords and private matters, were frequently more complex than a trip to and from Reigate. I felt that the system of claiming transport allowance was itself inflexible and difficult for my particular circumstances. The financial reimbursement was not a motivation and making a claim for travel was not a mandatory requirement. In those circumstances, I therefore ceased claiming for my travel. In my two meetings with Mr Pownall on 1 September 2009 and 1 February 2010, I was asked to give an assurance as to whether I was in Reigate at any time from March 2008 and December 2008 when this House was in session and during recess and in general the frequency in Reigate. This question was also posed to me his letters of 13 October 2009, 18 November 2009 and 15 January 2010. In his report to the Baroness Manningham-Buller of 25 March 2010, Mr Pownall has stated that I have not been able to answer his questions about the frequency of my visits to Reigate. During the two meetings, as well as in my responses to his letters, I have always maintained that I did indeed visit Reigate regularly. Having not kept a log of dates of the same I am simply unable to give the House any more detail than that and I am not willing to mislead the House by making an inaccurate statement. Whether I acted in good faith in designating Reigate as my main home and in making claims for travel and subsistence. I have given written and verbal assurances to the Clerk of Parliaments that I designated Reigate as my main residence in good faith and in accordance with the rules in place at the time. Wishing to move from Hampton to smaller accommodation is something I have been considering since 2004. I have had the lease on the Reigate property since March 2006 and have been responsible for paying the rent, council rates and services since then via my wholly-owned company

The sub-committee and the witness had before them tabulated bundles containing copies of original documents. The references in brackets cross-reference these bundles to the printed evidence.

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25 June 2010 The Lord Bhatia OBE Lord Bhatia: Yes.

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investigate the matter, but I would like to make a few observations about the process to date and the materials that you have sent me. I would like to point out that the original article in the Sunday Times contained serious allegations based on substantial inaccuracies about my political affiliations, personal wealth and family circumstances. Moreover, these allegations were made on the basis of a covert recording taken without my knowledge, by a journalist who gained entry by insinuating to our cleaner that he had an appointment with me. It is not the custom in my culture to be discourteous to visitors who come to my home, but I was perhaps naive and taken unawares. I have co-operated fully for the past 12 months or so with the investigation so that this matter can be put to rest. It has been of great distress to my family, my broader community and myself. I therefore request that the Sub-Committee reaches a conclusion on the basis of the information it now has, which from my standpoint is complete. I also trust that the Sub-Committee will conclude this matter based on a consistent application of the rules in place at the time and with reference to other similar cases. At all times I have acted in absolute good faith when making any claim for expenses—and would not act in any other way when making such claims. I would say in conclusion that my interest at this stage is in assisting the House to ensure that the rules are respected and in clearing my family name. I cannot overstate the stress that this has caused me—a price that cannot be measured in financial terms. Chairman: Thank you for that statement, Lord Bhatia, and I would like to assure you that we will be reaching our decisions on the basis of the rules that were applicable at the time. The rules on main residence have changed and we know that. I am going to start by asking Lord Irvine to ask you some questions and then other members of the Committee will at some stage chip in. Q4 Lord Irvine of Lairg: Lord Bhatia, you have in front of you, do you, a bundle of document divided by tab numbers? Lord Bhatia: Yes. Q5 Lord Irvine of Lairg: From time to time I will point you to references within these documents and you should take your time to find the place that I am pointing to in the documents and, if necessary, to read any section of the document before you answer my question and, if you need time and you feel you are being unduly pressed at any point, just say that you need time. Would you go to tab H? We have a slight difficulty because the document I am taking you to is on page 2 of the bundle but it is numbered within itself 1 (p45F). Do you see it? It is the statement of Lord Bhatia.

Q6 Lord Irvine of Lairg: And if you turn over to page 3 of the letter itself you will see that it is your statement dated 1 September 2009. Lord Bhatia: Yes. Q7 Chairman: If you go to page 2 within the document itself, if you go to the second paragraph under “Main Residence”, you read that (p45K): “From the period of about 2003 onwards my wife and I were actively looking to “down-size” our domestic residence. We have lived in the house in Hampton for almost 20 years and my family, including my grandchildren, have grown up and moved to their own homes.” So plainly Hampton, if I may just call it Hampton, was your main residence for the 20 years that you are referring to there? Lord Bhatia: Yes. Q8 Lord Irvine of Lairg: And the answer is yes. Lord Bhatia: Yes. Q9 Lord Irvine of Lairg: But then during the period October 2007 to December 2008, you designated as your main residence the flat at 31 Bancroft Court, Reigate, that is right, is it not? If you go to page 3 in the bundle you can see the paragraph which reads (p46D): “For the period October 2007 to December 2008 my main residence was the apartment in Reigate.” Do you see that? Lord Bhatia: Yes. Q10 Lord Irvine of Lairg: And then that is the position, is it not? Yes? If you nod it does not go down on the transcript. Lord Bhatia: Yes. Q11 Lord Irvine of Lairg: I can well understand how you would have regarded 22 Manor Gardens, Hampton as your principal or main residence. Lord Bhatia: Yes. Q12 Lord Irvine of Lairg: There is no difficulty there. Presumably you kept there, and perhaps still keep there, the belongings that have permanence in your life, is that right? Lord Bhatia: That is my house. I own the house. My belongings are there and I have always dictated it as such. Q13 Lord Irvine of Lairg: Yes quite, but do you keep there the belongings that have a permanence in your life? Let me give you an example. Family photographs? You are nodding; you mean yes?

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The Lord Bhatia OBE even to this date, was to say I have got to shift from this house, I can only shift from this house when I sell the Hampton property and move lock, stock and barrel to Reigate. Q22 Lord Irvine of Lairg: To a property of similar size or smaller? Lord Bhatia: It is a much smaller flat because we are down-sizing. I do not need four bedrooms and the huge establishment that I have. I have a huge garden, which I cannot manage. It was always related to my age and that of my wife as well, and that has been recorded. I do not know what the ages are of the respective Members of the House of Lords here, and I do not want to even ask, but at 76/77 it is very difficult to deal with a huge house, keep it clean, manage it properly, et cetera, et cetera. That is the reason why. Q23 Lord Irvine of Lairg: Could I assure you, Lord Bhatia, that I, and I am sure all of my colleagues, totally understand the sentiments that you are expressing, but I have been asking you a specific question, where do you keep the bulk of your clothes? Lord Bhatia: The bulk of my clothes are in Hampton, but my clothes are in Reigate as well, as and how I require it. The idea was to move everything once I had sold my house in Hampton and move there for good. Everything will go there; quite a lot of stuff will be disposed of, thrown away, whatever the case may be. Q24 Lord Irvine of Lairg: Did you ever put Hampton on the market? Lord Bhatia: I have been enquiring about the markets. Q25 Lord Irvine of Lairg: The answer is no, then? Lord Bhatia: No, I have not put the house on the market, simply for one reason, that since 2007, as all of us probably know, the market price of Hampton properties and of properties generally has been steadily going down and this is not the time to sell. I may end up, if I may say so Lord Irvine, holding both the homes in my hands once I move to Reigate, if I do, subject to the price being right and all the rest of it. I may end up holding the Hampton house in my hands for quite some time before I can sell it at a reasonable price. Q26 Lord Irvine of Lairg: However, I was asking you much more mundane questions about where you keep the bulk of your clothing. The short answer to that is Hampton. Lord Bhatia: At the moment. Q27 Lord Irvine of Lairg: Hampton at the moment. Could I ask you the same question of your wife?

Q14 Lord Irvine of Lairg: Family records? Lord Bhatia: Yes. Q15 Lord Irvine of Lairg: Anything of sentimental value to you? Lord Bhatia: Yes. Q16 Lord Irvine of Lairg: Do you have a coat of arms? Lord Bhatia: I do not have a coat of arms. Q17 Lord Irvine of Lairg: You do not have a coat of arms. So you are completely without pride! Lord Bhatia: I nod here. Chairman: What does that imply for the rest of us? I do not have one either! Q18 Lord Irvine of Lairg: Where do you keep the bulk of your clothes? Lord Bhatia: If I may answer this in a slightly different way, Lord Irvine. Hampton had been my house, my main residence, for 20 years until October 2007. During that period, the family was reducing in numbers, my daughters had flown the nest, as it were, my grandchildren, who were there, had also flown the nest. A house with four bedrooms, with a huge living room and all the rest of it, the facilities were becoming too large for myself and my wife to manage and handle. Since 2004, long before 2007, we had been considering down-sizing to an apartment at our age. Q19 Lord Irvine of Lairg: We have read the documents and we know that. Lord Bhatia: In fact, I am on record as having written to the Finance Department in the House of Lords to say I was thinking of moving to Berkshire, so since that time I have been thinking, we have been researching as to where we move to a smaller apartment. It was only in October 2007 after a lot of research—the Berkshire property fell away for whatever reasons, I cannot remember now—we went to Reigate and we decided that was the flat that we would like to take over as the best place to go to. You asked me the question, Lord Irvine, and rightly so, where do I keep my belongings. Q20 Lord Irvine of Lairg: That is quite right and the answer is presumably the Hampton property? Lord Bhatia: I have not finished answering that question, if I may, Lord Irvine. Q21 Lord Irvine of Lairg: No, no, you go on as long as you like. Lord Bhatia: It is a transitional situation for me. I am also trying to sell my house. The idea of taking the Reigate property on a rental basis, which is the case

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25 June 2010 Lord Bhatia: The same. Q28 Lord Irvine of Lairg: Does she keep any clothing in Reigate? Lord Bhatia: She did as and how required, as I did. Q29 Lord Irvine of Lairg: Does she now? Lord Bhatia: We do not go there since October. I am trying to recollect the date. Since January 2009 we have not been going there because of health issues and all the rest of it2. Q30 Lord Irvine of Lairg: Do you have furniture or paintings that have a permanent importance in your life? Lord Bhatia: Yes. Q31 Lord Irvine of Lairg: Are they all at Hampton? Lord Bhatia: Yes. Q32 Lord Irvine of Lairg: Do you have a music collection? Are you interested in music? Lord Bhatia: Yes. Q33 Lord Irvine of Lairg: Is that kept in Hampton? Lord Bhatia: It is kept in my pocket here as well as in Hampton and everywhere else. Q34 Lord Irvine of Lairg: Do you have a library of books? Lord Bhatia: Yes. Q35 Lord Irvine of Lairg: Is that kept in Hampton? Lord Bhatia: It is at the moment in Hampton. Q36 Lord Irvine of Lairg: Do you have any interest in sport? Do you play golf? Lord Bhatia: I wish I did but I do not. Q37 Lord Irvine of Lairg: Are you a fisherman? Lord Bhatia: I wish I could be but I am not. Q38 Lord Irvine of Lairg: Are you well-known in the local community in Hampton? Lord Bhatia: Not particularly. I know my neighbours quite well. Q39 Lord Irvine of Lairg: You have friends there? Lord Bhatia: No, my neighbours are my friends. Q40 Lord Irvine of Lairg: Do you have friends in Reigate?
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The Lord Bhatia OBE Lord Bhatia: No. Q41 Lord Irvine of Lairg: Where does your family gather for special family occasions? Lord Bhatia: At Hampton at the moment. Q42 Lord Irvine of Lairg: Never in Reigate? Lord Bhatia: Never in Reigate, never. Q43 Lord Irvine of Lairg: So that would be for birthdays or any other occasions of family significance, these gatherings would occur in Hampton and never in Reigate? Lord Bhatia: No, the gatherings would happen at Hampton as well as my daughters’ homes. I have two daughters who live in London and we regularly meet at their homes as well. Q44 Lord Irvine of Lairg: But never Reigate? Lord Bhatia: Reigate, no. Q45 Lord Irvine of Lairg: Then returning to the Reigate flat, you had leased it from March 2006 through a company that you own called Casley Finance Ltd. Lord Bhatia: Yes. Q46 Lord Irvine of Lairg: You refer to that at paragraph 1 in your letter to Michael Pownall of 30 November 2009 and you will find that within tab H at page 31 (p48J). And would you please go there. There you say: “The Reigate address is leased by Casley Finance Limited, a company that is owned by myself. The property at Reigate is also used by my brother, Sultan, who looks after the property for me in my absence.” So you confirm all that obviously? Lord Bhatia: Yes. Q47 Lord Irvine of Lairg: You leased it from 1 March 2006, correct? Lord Bhatia: Yes. Q48 Lord Irvine of Lairg: But you did not designate it as your main residence until October 2007. Lord Bhatia: Yes. Q49 Lord Irvine of Lairg: That is correct. We can see the lease at page 7 within tab H (p51) so shall we go there please. Have you got it? Lord Bhatia: Getting there. Q50 Lord Irvine of Lairg: It is headed up “Agreement—Company Tenancy”. Lord Bhatia: It is the lease agreement. Q51 Lord Irvine of Lairg: All I want to draw your attention to is clause 7 where we see the terms there.

When invited to comment on the draft transcript, Lord Bhatia added: This is a factual error. Both my wife and I have not been to the Reigate property since December 2008 and not October 2008 as stated.

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The Lord Bhatia OBE Lord Bhatia: Yes. Q62 Lord Irvine of Lairg: It is quite a substantial period. It is from March 2006 to October 2007 so it is the best part of a year and a half. You say you have resided occasionally. Can you give us a little bit more assistance, how frequently do you think you resided there? Lord Bhatia: Lord Irvine, this has been a problem not only up to the period in October when I declared this as my main residence but throughout the case that I do not know. Q63 Lord Irvine of Lairg: That was one of the problems, if I may say so to you Lord Bhatia, that Mr Pownall had. You said you could not recall, but I find it very difficult to accept that you do not have some impression—a general impression—of how many nights you may have spent in this year and a half period, 1 March 2006 until October 2007, stayed in the sense of stayed overnight. You must have some impression of it. Lord Bhatia: Lord Irvine, if you ask me do I have some impression, and that is the question that is being asked, yes, I have stayed there regularly, I said that to Mr Pownall myself and I think I put in it writing somewhere along the line. If you ask me to tell you— Q64 Lord Irvine of Lairg: Pause—what do you mean by “regularly”? Lord Bhatia: Regularly means regular, it could be 30 per cent, 40 per cent, 50 per cent of my time of the weekends all during the period. Q65 Lord Irvine of Lairg: During that period, that is to say the period during which it was not designated as your main residence— Lord Bhatia: No, sorry, Lord Irvine, I think we are talking about two periods simultaneously, it is my mistake. The first period is from March 2006 until October 2007. Q66 Lord Irvine of Lairg: That is what I am asking you about at the moment. Lord Bhatia: Let us stay on that for a minute. Q67 Lord Irvine of Lairg: That is what I have been trying to do. Lord Bhatia: I am sorry if I have pulled away somewhere else. Q68 Lord Irvine of Lairg: So, give us an impression, during that year and a half period of how frequently you stayed there.

Lord Bhatia: If I may get to the document, please. Lord Irvine of Lairg: Of course, certainly. Chairman: Do you want us to repeat again where it is? Lord Irvine of Lairg: Page 7 within tab H (p51). Chairman: It says “Agreement—Company Tenancy” at the top. Q52 Lord Irvine of Lairg: You can use your solicitor’s copy if you can find it. Lord Bhatia: We have both got the same copy but there is so much paperwork. Q53 Lord Irvine of Lairg: I know; it is the bane of all our lives. Lord Bhatia: That appendix to my first statement was sent later on as a replacement; that was the problem I think. It was missed out on the first lot that came to us. Q54 Chairman: Yes, have you brought it with you? Lord Bhatia: We have it here now. Q55 Lord Irvine of Lairg: It is just a very small purpose that we are going there for. We pick up there that the terms of the tenancy, in the first instance, it was for six months and it was from 1 March 2006. We then see at clause 5 the permitted occupancy. Will you read these out to us please? Lord Bhatia: “Sultan Alibhai Bhatia . . .” Q56 Lord Irvine of Lairg: Pausing there, that is your brother? Lord Bhatia: That is my brother. “Amirali Bhatia . . .” Q57 Lord Irvine of Lairg: That is you? Lord Bhatia: Yes. And Nurbanu Bhatia, that is my wife. Q58 Lord Irvine of Lairg: Thank you. So Sultan is the first named and is your brother? Lord Bhatia: Yes, my brother. Q59 Lord Irvine of Lairg: The second named is yourself and the third is your wife? Lord Bhatia: Yes. Q60 Lord Irvine of Lairg: Could I ask you this: did you in fact ever reside there during the period 1 March 2006 until October 2007? Lord Bhatia: I visited and resided there occasionally. Q61 Lord Irvine of Lairg: When you say you resided there occasionally, do you use the word “reside” to mean stay overnight?

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Lord Bhatia: I would not want to say how often I stayed there because that was a trial period for me to acquaint myself to say, “Do I like this place? Do I like these surroundings?” Q69 Lord Irvine of Lairg: I am not asking you to quantify it precisely. I know that you cannot state a number of nights, but you have to be able to give us some general impression of the frequency of your overnight stays during that period of one and a half years prior to its designation as your main residence. Lord Bhatia: Probably two or three times a month. Q70 Lord Irvine of Lairg: Two or three times a month, thank you. Now then, Sultan stayed there throughout that entire period, did he? Lord Bhatia: Yes. Q71 Lord Irvine of Lairg: What was your reason for leasing it in March 2006? Lord Bhatia: I thought I mentioned this earlier on. We wanted to down-size. That is the reason why I got that flat. Q72 Lord Irvine of Lairg: But Sultan lived there full time for the year and a half that I have been asking you about and Sultan was the first named as a permitted occupant in the lease. Yes? Lord Bhatia: It is there but— Q73 Lord Irvine of Lairg: It is there so my question to you is: had it been leased by you in the first instance for the benefit of your brother Sultan? Lord Bhatia: No. Q74 Lord Irvine of Lairg: But he stayed there for a year and a half full-time and you stayed there only two or three times a month. Lord Bhatia: Lord Irvine, I have said repeatedly in my writing and in my statements that he stayed there to look after the property for me. He occupied one small bedroom and the other bedroom was occupied by me. This has been the case even up to now. Q75 Lord Irvine of Lairg: Now then, we have dealt with the period of the year and a half prior to your designating it, and Sultan lived there full time and you stayed there about three nights a month, correct, that is what you said? Lord Bhatia: Yes. Q76 Lord Irvine of Lairg: Now then, concentrating again on that period, did your wife spend a night there? Lord Bhatia: Yes, she did, but not as frequently as I did.

Q77 Lord Irvine of Lairg: Now then, would you go again to your statement within tab H and if you go to your statement you will find that it begins at page 2 of the bundle, and if you go to page 3, you will see a paragraph that begins, “In September 2007 . . .” (p46E) Do you see that? I will read it to you if you want but I would like you to find it first. Page 3 of the bundle, page 2 of your statement and it starts, “In September 2007 . . .” Lord Bhatia: Yes. Q78 Lord Irvine of Lairg: I will read it to you, if I may: “In September 2007 I unexpectedly contracted a serious illness which incapacitated me and necessitated hospitalisation and continued treatment. During the latter part of 2008 and early 2009 I was also diagnosed as having hypertension and was told in March 2009 that I may have diabetes. This led to a complete review of my lifestyle and so following a difficult year with my health, in December 2008, I reverted to my residence in Hampton and ceased to claim overnight subsistence.” So the period during which you had designated Reigate as your main residence, that is to say October 2007 to December 2008, fell within your period of ill-health? Lord Bhatia: Yes, during that period I was not well. Q79 Lord Irvine of Lairg: Yes. And where were you hospitalised? Lord Bhatia: Guy’s Hospital. Q80 Lord Irvine of Lairg: In London? Lord Bhatia: For five days. Q81 Lord Irvine of Lairg: So you were there for five days? Lord Bhatia: Yes. Q82 Lord Irvine of Lairg: And where did you receive the continued treatment to which you referred? Lord Bhatia: Both at Guy’s as well as with my GP. Q83 Lord Irvine of Lairg: Do you mind telling me what the nature of the treatment was? Lord Bhatia: It is very technical, let me try and explain to you. Q84 Lord Irvine of Lairg: Basically what I want to know is for how long you received this treatment? Lord Bhatia: Absolutely. I think the treatment continues to this day. I have polyps in my nose. I have to go into the technical terms that have been explained to me by my experts, if I may, as to how serious it is. When I was rushed to the hospital in September the whole of my face had swollen up. My nose was probably three and a half times the size it exists at the moment. I could hardly open my eyes. I

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The Lord Bhatia OBE within tab H, you see that the paragraph after the one I have just read to you says (p46F): “I continue to receive treatments for my conditions and will have to take the advice of my Doctors and family, before deciding whether or when to move from my Hampton residence.” Lord Bhatia: Yes. Q90 Lord Irvine of Lairg: So that implies to me, and you could confirm this perhaps, that your Hampton residence was relevant to your on-going treatment. Is that right? Lord Bhatia: No, I do not agree with you. This statement was signed on 1 September 2009. Q91 Lord Irvine of Lairg: So you would say that— Lord Bhatia: My illness was in September 2007. It is a totally different period that you are referring to. Q92 Lord Irvine of Lairg: It is a different period but the condition is a continuous one. Lord Bhatia: Not as seriously as it was then. Q93 Lord Irvine of Lairg: But you continued during this period of ill-health primarily to reside in your Hampton residence? Lord Bhatia: Yes I did because it was nearer to my doctor’s. Q94 Lord Irvine of Lairg: Exactly so. You see, what I find very puzzling, but no doubt you can help us, is how the flat in Reigate could have become your main residence during this period of serious ill-health that you described. Can you help us with that? You cannot ask your solicitor for help. Lord Bhatia: No, no I am not asking him to answer. If you allow me to think about how to answer your question, that is what I am trying to do. In 2007 for a period of two weeks/three weeks I was seriously ill and I was taken to hospital and then I was being treated at home. That does not mean that I cannot designate a flat that I have already leased since 2006 because that was the intention and we had been testing out that house in Reigate for the previous 17 months, or whatever the period was, and we decided that we wanted to make that into our permanent residence. This was the time to do that and it happened simultaneously, but there was no question in my mind that is where we wanted to be. Q95 Lord Irvine of Lairg: Wanted to go in the future maybe— Lord Bhatia: No, permanently. Q96 Lord Irvine of Lairg: Permanently but in the future. Lord Bhatia: Not in the future. That was simultaneously.

was taken to the hospital on an urgent basis and admitted there. I think I got admitted, if I remember correctly, some time at 8 o’clock or 9 o’clock in the evening. This was a weekend, as far as I can remember. There was a specialist on ENT—“N” stands for “Nose”—who was in residence there, but he was working under the main consultant for ENT who was not present there over that weekend. I remember I was taken to the x-ray department at around midnight for a scan to examine the status of my polyps. A full scan was taken. The consultant who was there looking after me said, “I have to take a decision whether I want to remove those polyps straight away, but I cannot do so unless I have talked to the main consultant who is not around here today.” He apparently, I think, phoned, as I was told later on, the main consultant, who advised that he should put me on to some medication overnight until he came back to see me on Monday morning. When the main consultant came to see me, he called me to his offices in Guy’s Hospital in another block. He looked at me, examined the scan and he said, “Mr Bhatia, you have got a problem here. This is a very dangerous triangle. Your brain is there, your eyes are there and your nose is here. If I try to remove the polyps and if there is any slight mishap, you could be blinded or your brain could be damaged. At your age, my advice is not to touch it. I will not operate on you. I will not remove the polyps. I will continue to treat you on a continuous basis for that.” Q85 Chairman: Which is what is happening now? Lord Bhatia: Absolutely. Every six months he calls me. I am on constant medication for that purpose. Chairman: Thank you very much. Q86 Lord Irvine of Lairg: Did you really reside at all at the Reigate flat during this period of serious illhealth? Lord Bhatia: I think the six or seven days or 15 days around that period I could not be. Q87 Lord Irvine of Lairg: But I would have thought, from the rather serious picture that you have painted for us, which we understand, that you would not have wished to move far from your doctors at any time. Lord Bhatia: That is what I am saying, Lord Irvine. Q88 Lord Irvine of Lairg: Well then— Lord Bhatia: I came back from Guy’s Hospital to stay in Hampton, where my daughter lives next door to me, who is a GP. My GP is in the area and can help. Q89 Lord Irvine of Lairg: Yes, but what really surprises me—and that is a comment that I would like you to comment on—is that you could have been residing at all in Reigate during this period because if you go through your statement, which is page 3

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Q97 Baroness O’Neill of Bengarve: Can I ask a very small question about the dates? The point of designation is October 2007 and that is in the month after you contracted the illness, which was September 2007? Lord Bhatia: That is right. Baroness O’Neill of Bengarve: So upon having your diagnosis and knowing that you needed treatment that moment you decided was the moment to make Reigate your main residence? Lord Irvine of Lairg: That’s correct, is it not? Q98 Baroness O’Neill of Bengarve: I am just trying to check. Lord Bhatia: Baroness, you are being very helpful in this. The decision to declare my house as my main residence in Reigate had been taken previously. We decided that this was the time to declare that as my main residence because that is where we wanted to move. Q99 Lord Irvine of Lairg: Lord Bhatia, what I still find very puzzling is how the flat in Reigate could have been designated as your main residence in October 2007 a month after you had contracted a serious illness which required continued treatment, and you have told us earlier that you wanted to be close to your doctors, so why did you choose that month to designate the flat as your main residence? Lord Bhatia: As I said, the decision had already been taken well before September that is the place we want to go and make it into a permanent residence. Q100 Chairman: I just want to say that you actually sent to the Accountant’s Office a letter on 10 September saying “I will be moving . . .” Lord Bhatia: Yes, that is right. Q101 Chairman: “. . . on 1 October to Reigate.” Lord Bhatia: That is right. Q102 Chairman: Now you said “at some time in the future”. Sorry, you said in that letter: “I will moving from 1 October 2007 to Reigate.” Lord Bhatia: That is right. I wrote to him in September. Q103 Chairman: But you did not move? Lord Bhatia: No, I advised in writing to the Accountancy Department that I would be moving, designating Reigate as my permanent home. Q104 Chairman: It is at tab E (p44F). It is letter from you to David English dated 10 September 2007: “As from 1 October I will be moving . . .”

Q105 Chairman: “. . . to my main residence in Reigate.” Lord Bhatia: That is right. Q106 Baroness O’Neill of Bengarve: Can you tell us a bit about the move. It must have been a stressful thing as you had just got ill. At that point you moved to Reigate. How much of your personal belongings did you move to Reigate? Lord Bhatia: The move had already taken place in bits and pieces over the previous 17 months, as I mentioned earlier on. I had been living there already. It was just a formal letter this is going to be my home because the decision had been taken. When I went to the hospital, I came out, three or four weeks I stabilised myself, and I must not forget the fact that four days during any given period I was in Hampton, I was attending the House of Lords whenever I could during that period. I was basically spending the night in Hampton as I was expected to because I was claiming at the House for that. I was staying in Hampton every night3. Q107 Lord Irvine of Lairg: Would you not want during weekends, since you suffered from this serious condition which required continued treatment— Lord Bhatia: Yes – Q108 Lord Irvine of Lairg: Let me finish --- would you not want over the weekends to be close to your doctors? Lord Bhatia: Lord Irvine, I have total freedom. I have both the premises in my hands. I go and visit Reigate, I can go and stay there. I do not have to stay there, I can go there in the morning and come back in the evening. Q109 Lord Irvine of Lairg: That is not my question. I accept that they are both your properties and therefore you can do what you like with them. We are trying to test whether Reigate was truly your main residence, and I have asked you first of all did you reside there at all during this period of serious illness and you said no, I think.
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When invited to comment on the draft transcript, Lord Bhatia added: The decision to move my main residence had been made sometime during the summer recess of 2007 and the House had been notified of the same in writing on 10 September 2007 (p44F). On the dates of my hospitalisation in September 2007 the House of Lords was in recess. I was hospitalised on 16 September 2007 with an unexpected illness and discharged on 20 September 2007. I spent the rest of September and the first week of October at my Hampton residence recovering from the illness and resumed my pre-illness work levels from the second week of October 2007. Since my hospitalisation I have been on medication and visit my specialist hospital as required.

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The Lord Bhatia OBE claimed for weekly travel by car from and to Reigate from November 2007 to February 2008. That is what he is pointing out to you. Lord Bhatia: Yes. Q117 Lord Irvine of Lairg: Incidentally, do you say you were the driver on these occasions or did somebody drive you? Lord Bhatia: I drove; my wife drove; my brother drove. Q118 Lord Irvine of Lairg: Could we go again to your statement within tab H (p45F). Maybe we have got it well in our heads so we do not need to read it but you contracted a serious illness in September 2007 and immediately following this serious illness, did you ever drive yourself? Lord Bhatia: Yes. Q119 Lord Irvine of Lairg: You did? Lord Bhatia: Yes. Q120 Lord Irvine of Lairg: Now then, going back to Mr Pownall at page 29 (p48B), he asked you if you could confirm that you stayed in Reigate every weekend during that period. Your reply is in your letter of 30 November 2009, which is at page 31 (p48H). Lord Bhatia: Yes. Q121 Lord Irvine of Lairg: If you just go there and if you look at numbered paragraph (3), I will read it to you but I am going to concentrate on the second paragraph under paragraph (3): “Again, I cannot confirm that I stayed in Reigate every weekend between November 2007 and February 2008 as I do not wish to mislead you—I simply do not have the records to confirm whether I was there or at my Hampton residence or indeed away on Parliamentary or private business. The same applies to the period between March and September 2008.” So the position is, is it not, that you said that you could not give the confirmation that Mr Pownall had sought? That is correct, yes? Lord Bhatia: I could not give the confirmation of the dates on which I stayed there. That is the question that he is putting to me. Q122 Lord Irvine of Lairg: Yes, and in fact you could not confirm at which of these two residences you might have been staying during the weekends, is that right? Lord Bhatia: Dates. I could not give the dates when I stayed there in Reigate.

Lord Bhatia: Yes, that is right, I said no. Q110 Lord Irvine of Lairg: You said no. Immediately after the period of serious illness when you required continued treatment, my question to you is: would you not at the weekends want to remain close to the hospital that had treated you? Lord Bhatia: Not necessarily. Q111 Lord Irvine of Lairg: Not necessarily but what did you actually do? Lord Bhatia: Whether I went to Reigate, whether I stayed in Hampton, both are my homes. Q112 Lord Irvine of Lairg: You are free to do it but we are looking to see what you actually did do. Lord Bhatia: Lord Irvine, you are asking me a question to say what did I do. I do not keep a log of how many nights I spent where. Q113 Lord Irvine of Lairg: You must have an impression. Lord Bhatia: I gave you the impression I might have been there 30 or 40 per cent of the time. I did mention that. Q114 Chairman: Throughout this period? Lord Bhatia: Throughout the period. Except while I was sick in the hospital probably for one or two weeks, I may not have gone there at all. Q115 Lord Irvine of Lairg: But my question to you, and I have asked you now three times, I cannot ask you any more: did you not feel at the weekends, when you suffered from this serious condition that required continued treatment, that you should not move far from the doctors who were there to treat you? Lord Bhatia: I did not feel that way at all because I had medication. I was being treated properly. I had medication to be taken and I was doing that. I did not need to go to the hospital or to a doctor. Q116 Lord Irvine of Lairg: Now then, staying within tab H and if you go to Mr Pownall’s letter to you of 18 November 2009 at page 29 (p48B), can I read to you his paragraph (iii), he says this: “Your claim forms show that you claimed for weekly travel by car from and to Reigate from November 2007 to February 2008. Thereafter you did not claim for travel but continued to claim for overnight subsistence. Can you confirm that you stayed in Reigate every weekend between November 2007 and February 2008? Were you resident at any time in Reigate between March and September 2008? I appreciate that you have not retained detailed records of the occasions when you stayed in Reigate, but it would be helpful to have a general reply on this point.” What he is pointing out to you is that you

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25 June 2010 Q123 Lord Irvine of Lairg: Or indeed— Lord Bhatia: Beyond that. Q124 Lord Irvine of Lairg: Or indeed you could not confirm whether you might have been at neither of your two residences during these periods because you might have been away on private or parliamentary business? Correct? Lord Bhatia: Yes. Q125 Lord Irvine of Lairg: Now then, when you said “away” what did you mean by away, away abroad? Lord Bhatia: Abroad, within England, in London. Q126 Lord Irvine of Lairg: Either abroad or within England? Lord Bhatia: Yes, any possibilities exist. Q127 Lord Irvine of Lairg: These were very specific questions from Mr Pownall and do you agree that you intended to give considered responses in writing? Lord Bhatia: Yes. Q128 Lord Irvine of Lairg: Under your signature? Lord Bhatia: Yes. Q129 Lord Irvine of Lairg: But your claim forms show that you claimed for weekly travel by car from and to Reigate from November 2007 to February 2008. Lord Bhatia: Yes. Q130 Lord Irvine of Lairg: And you will find that graphically illustrated in blue at tab D (pp24–6), if you could go there. You see the references to these? You see the calendar for November 2007? Lord Bhatia: Yes. Q131 Lord Irvine of Lairg: And a blue mark signals a journey for which you claimed. Lord Bhatia: Yes. Q132 Lord Irvine of Lairg: And December likewise. Lord Bhatia: January and February. Q133 Lord Irvine of Lairg: Then going over January and February. Lord Bhatia: Yes. Q134 Lord Irvine of Lairg: So these were claims for car journeys to and from Reigate during weekends. Lord Bhatia: Yes. Q135 Lord Irvine of Lairg: When you were not able to confirm to Mr Pownall that you had stayed at Reigate during every weekend in that period. That is right, is it not? The Lord Bhatia OBE

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Lord Bhatia: Lord Irvine, I need to explain to you— Q136 Lord Irvine of Lairg: Is that right? Lord Bhatia: No, you are not—I do not want to say you are not right, forgive me, please. Q137 Chairman: You must answer, please, Lord Bhatia, if you think Lord Irvine is not right then say that. Answer his question and say it because we want to make sure the transcript catches all of this. Lord Bhatia: The question that was put to me by Mr Pownall and now by Lord Irvine is, “Did you stay in Reigate?” Q138 Chairman: In the flat. Lord Bhatia: In the flat. If you see my reply, it is very important to see what my reply is to that letter. Lord Irvine of Lairg: Yes, let us go to it then. Chairman: It is page 31 (p48H). You are talking about your reply of 30 November which Lord Irvine just read out, and where you said you did not have the records to confirm it. Q139 Lord Irvine of Lairg: There you say, and I have already read this to you, Lord Bhatia, in your letter to Mr Pownall of 30 November 2009 at page 31 of tabH you say (p48L): “Again, I cannot confirm that I stayed in Reigate every weekend between November 2007 and February 2008 as I did not wish to mislead you—I simply do not have the records to confirm whether I was there or at my Hampton residence; or indeed away on Parliamentary or private business. The same applies to the period between March and September 2008.” So there you are saying that you just cannot tell; you do not know; you do not have the records. Lord Bhatia: Give me a moment. The letter that Mr Pownall wrote to me and the reply that I gave him. Q140 Chairman: We are talking about Mr Pownall’s letter of 18 November, paragraph (iii) and we are talking about your reply of 30 November, the second half of (iii) which Lord Irvine has already, I think, drawn your attention to once, which can be summed up by you saying that you did not have the records to be able to confirm this. That is indeed what you said in your statement. Lord Bhatia: That is right. Chairman: Thank you. Q141 Lord Irvine of Lairg: But my point to you, which I would like you to focus on Lord Bhatia, is that your claim forms, which I have already shown you, summarised graphically in the colour blue in the calendar, show that you claimed for weekly travel by car from and to Reigate from November 2007 to February 2008.

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The Lord Bhatia OBE for journeys that in truth you had not made, that would have been dishonest, would it not? Lord Bhatia: No. Q151 Lord Irvine of Lairg: It would not be dishonest to claim expenses for journeys that you had not made? Lord Bhatia: But I have never said that I have not made the journeys. Q152 Lord Irvine of Lairg: Would it have been dishonest of you to have claimed travel expenses for journeys that you had not made? Lord Bhatia: Yes, I agree with you. Q153 Lord Irvine of Lairg: And you would have been aware in your consideration of the correspondence by this stage that that was the point that Mr Pownall was pressing you on? Lord Bhatia: Yes, yes. Q154 Lord Irvine of Lairg: May I explain to you, Lord Bhatia, my difficulty with your answer confirming that you had in fact made these journeys, and let me put it to you straightforwardly, is since you had been unable to confirm that you had actually been staying in Reigate every weekend during the period November 2007 to February 2008, how could you confirm that you had in fact made the weekly car journeys to and from Reigate for which you had claimed? Just pausing there, this is a very important question that I am putting to you. I want you to be sure that you understand it and to take great care in your answer to this question. Lord Bhatia: Lord Irvine, I have supplied all the letters that came to me from Mr Pownall ending on 8 February that you have just quoted to me. Claims for transport are made at the end of every month, not in advance. When my claim is submitted the House of Lords Finance Department, if there is a claim of February 2008 it would be made in the early days of March. It is in that respect that you are paid for the number of days you have attended the House and you are paid for the number of trips you have taken. This is the true record of what journeys I had made. The journeys that I have made to Reigate from Westminster are journeys that I have made. It does not mean that I stayed the night there. I may have gone to Reigate and come back. Q155 Lord Irvine of Lairg: What are you saying the position was? Lord Bhatia: If I have claimed for it that is exactly what it would be, that I had been there and had to come back. Q156 Lord Irvine of Lairg: So that is your answer, is it?

Q142 Lord Irvine of Lairg: What you claimed for— and I would like you to agree with me about this—is for car journeys to and from Reigate during weekends where you were not able to confirm to Mr Pownall that you stayed in Reigate every weekend during that period. Pause there—that is accurate, is it not, what I have said is accurate? Lord Bhatia: Yes. Q143 Lord Irvine of Lairg: Would you go to Mr Pownall’s letter to you at page 32 (p49B)? Lord Bhatia: Letter dated? Lord Irvine of Lairg: Page 32 in tab H. Q144 Chairman: It is 15 January. It is straight on from your reply that we have just been looking at. Lord Bhatia: 15 January, yes, I have got it. Q145 Lord Irvine of Lairg: I am going to read the second paragraph to you. Mr Pownall says: “In your letter you indicate that you cannot confirm that you stayed in Reigate every weekend between November 2007 and February 2008. Examination of your claim forms shows that you claimed the cost of car travel to and from Reigate for all of the weekends when the House was sitting. Can you please confirm that these claims represent actual journeys on each occasion, i.e. every weekend in the period”? Lord Bhatia: Yes. Q146 Lord Irvine of Lairg: You would agree with me that this is a very clear question, is it not? Lord Bhatia: Yes. Q147 Lord Irvine of Lairg: Basically what he is saying to you is, “Look here, you claimed for travel expenses for specific car journeys; had you actually made these journeys?” That is basically what he said. Lord Bhatia: If you refer to my reply of 8 February. Q148 Lord Irvine of Lairg: You agreed with me that this was a very clear question. Lord Bhatia: Yes. Q149 Lord Irvine of Lairg: If we go to the next page, page 33 (p49G), you will see what your answer is in the second paragraph, and I will read it. That is your letter of 8 February 2010, second paragraph: “I can confirm that I made the journeys for which I claimed the cost of travel from November 2007 to February 2008.” Lord Bhatia: Yes. Q150 Lord Irvine of Lairg: You would by now in your consideration of this correspondence have appreciated that if you had claimed travel expenses

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Lord Bhatia: That is my answer. Could I elaborate one thing on the Finance Department’s ruling on the transport costs because I think it is very important in this discussion that we are having. Under the rules that have been explained to me and to my office, if the House is sitting in session from Monday to Thursday, four days a week (it could be sitting for five days occasionally but four days is the typical week) I am allowed to make four claims for overnight allowances to stay in Hampton, including Thursday night. I cannot claim for transport from Westminster to Reigate except on Friday morning. When I am not in Westminster I am expected to make a claim for transport from Reigate to Westminster on Monday morning only. I may not be in Reigate on Sunday night. I may be somewhere else. Q157 Lord Irvine of Lairg: In Hampton. Lord Bhatia: I may be in Hampton, I may be somewhere else. Wherever I may be, I may be in Hampton, how do I make that claim? This is the whole problem about the claims for transport. That has been baffling me for four months when I reviewed the whole thing. This does not fit with my requirements or my schedules of travel and everything else. That was my difficulty, Lord Irvine. Q158 Lord Irvine of Lairg: Lord Bhatia, I really do not understand that. If you go to page 31 (p48H), which is your letter. Lord Bhatia: The letter dated? Q159 Lord Irvine of Lairg: The letter dated 30 November 2009. You say in that letter—“Again, I cannot confirm that I stayed in Reigate every weekend between November 2007 and February 2008 as I do not wish to mislead you—I simply do not have the records to confirm whether I was there, or at my Hampton residence; or indeed away on parliamentary or private business.” Lord Bhatia: Yes. Q160 Lord Irvine of Lairg: Since that is your position, how could you claim in respect of weekends that you cannot confirm where you were that you had made these very specific travel journeys for which you had claimed money? Lord Bhatia: Lord Irvine, can I reply to this. I think there is a play of words there. “Stayed” means you spent the night there; “visit” means you went there and came back, and that is what I have done. I have been to Reigate on a given weekend and come back the same day. Q161 Lord Irvine of Lairg: You have given that answer already, but you do not know in respect of these weekends whether you stayed at your Hampton residence during that weekend or whether you were

away on parliamentary or private business, so since you do not know that, how can you claim for specific journeys to and from Reigate? Lord Bhatia: Lord Irvine, you have got to start the period from Thursday evening right up to Monday morning for going and coming. There is only one journey allowed according to the rules. To go from Westminster to Reigate you can only claim it on a Friday morning. Q162 Lord Irvine of Lairg: But what if you were away on parliamentary business, you could not claim it, could you? Lord Bhatia: If I am away on parliamentary business, I am sure that if I made the claim I would have travelled there. I am absolutely certain. I would not make a claim in retrospect at the end of the month or the beginning of the following month to say I have travelled to Reigate definitely; that is the reason I am making that claim. Q163 Chairman: Could I just read you a quotation from a guide (p6K): “Claims may only be made only for journeys over five miles between a Member’s main place of residence in the United Kingdom and Westminster.” I am looking but I cannot see anything about it having to be a Monday or a Friday nor about it being an entitlement. Lord Bhatia: Baroness, I struggled with this rule. My PA regularly made enquiries with the Finance Department and the person dealing with it there, and it was explained to us very clearly that you can only claim for one journey during a Parliament sitting week from Westminster to Reigate. Q164 Lord Irvine of Lairg: To your main residence? Lord Bhatia: To your main residence, on a Friday morning if the House is sitting for four days. Q165 Chairman: A minute ago you were saying that the rules did not fit your circumstances. Lord Bhatia: That is right. Q166 Chairman: Can you give us an explanation? Lord Bhatia: I can, yes. Thank you for asking that question because therein lies my dilemma. That is the reason why I had to stop claiming for allowances because I was being asked to conform to a system that was so rigid that I could not move from it when things were happening differently. On a Thursday evening I may not have gone back to Hampton, I may not have gone back to Reigate; I may have gone outside. The rule indicated to me and as explained to my office is that I can only claim for a trip from Westminster to—

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The Lord Bhatia OBE Q178 Chairman: But it is for attendance at the House. The point is that you get expenses paid for attending the House away from your main residence. Lord Bhatia: As a follow-up to that. I think the way I interpret this, and I think it is a correct interpretation, is that if you are in London at your Hampton house from Monday to Thursday night, you are given one day travel from Westminster to Reigate once a week which can only be claimed on Friday. Now if you refer to the details of—4 Q179 Chairman: I assure you that is wrong. I might go home on a Thursday and I can claim travel. Lord Bhatia: I must accept your view on that but this is what has happened to me. I want to say one thing to you, Baroness. If you refer to my October claim, the actual claim, my secretary—this is how the compounding process was taking place—my first claim for October 2008 claimed for a journey from Westminster to Reigate. Q180 Chairman: Sorry, I am listening. Lord Bhatia: The first claim in October was made for Westminster to Reigate on Thursday for three nights. I think it is there in the records. The Finance Department decreed that in that case I could not get the night allowance for three nights. Q181 Chairman: We are talking about a different thing, night allowance. Lord Bhatia: Because I had by mistake claimed transport costs from Westminster to Reigate. Q182 Chairman: Have you found that on other allowances you have made mistakes? Lord Bhatia: I have made mistakes and they have been corrected always. Chairman: Lord Dholakia wanted to come in. Q183 Lord Dholakia: Can I just confirm, Lord Bhatia, when these claim forms are submitted, are the actual details filled in by you or are they filled in by your secretary?
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Q167 Chairman: Your main residence. Lord Bhatia: My main residence. Q168 Chairman: If you make it. Lord Bhatia: If I make it, on a Friday morning. I can only make a claim for my main residence in Reigate to Westminster on a Monday morning. Q169 Chairman: Did you speak to the Finance Department? Lord Bhatia: No, I did not, unfortunately. Q170 Chairman: Because I frequently travel from my main residence on a different day and claim for travel. This brings up a broader point, you mentioned your PA and filling in your claim. Did she perhaps fill in your claim forms for you? Lord Bhatia: She compiled the claim; I signed it. Q171 Chairman: So did she have a diary which she used as a basis for knowing where you were that helped her to fill in those forms?. Lord Bhatia: Not necessarily. I had to tell her what it was. Sorry, please go on. Q172 Chairman: But did you make an effort to really read through what the rules say in order to give her guidance on what you were legitimately allowed to claim for? Lord Bhatia: Baroness, the rules are only two lines, if you read the rules. Q173 Chairman: I have got them in front of me. Lord Bhatia: They are only two lines or three lines. You read it out. I can read it out again. It is at the back of one of the claim forms. Q174 Chairman: “Travel expenses may be claimed between the main place of residence in the United Kingdom . . .” Lord Bhatia: Yes. Q175 Chairman: Main place of residence. Lord Bhatia: Yes. Q176 Chairman: “. . . and London”, and then it goes on to tell you by how much. That is the general thing at the beginning. Later on it repeats that and says if you do incidental travel in London, for example, that comes under your day’s subsistence, or you claim it under that. Lord Bhatia: But I am claiming against the first paragraph that you read out. It is only one journey. Q177 Chairman: Well, it just says journeys between your main residence and London. Lord Bhatia: And Westminster, that is right. If you take it in terms of your transport claim—

When invited to comment on the draft transcript, Lord Bhatia added: My understanding at all relevant times in the period for which I was being asked questions by the Sub-Committee was that (as long as I attended the House when it was in session) I could only claim for one journey from Westminster to Reigate after the House had finished sitting for the week and a return journey from Reigate to Westminster on Monday. To me this meant that when the House finished its business for the week on Thursday and I was claiming the night allowance for Thursday, I could only make the travel claim from Westminster to Reigate on Friday—irrespective of the fact that I may or may not have gone to Reigate on Friday but at some other time during that weekend. The same dilemma was for travel on Monday from Reigate to Westminster as I may have travelled from Hampton to Westminster, having returned to Hampton from Reigate during the weekend.

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Lord Bhatia: By my secretary. She knows what the distances are and she puts in the figures. Q184 Lord Dholakia: The signature will be yours but she will put the details in? Lord Bhatia: Yes. Q185 Lord Dholakia: Have you in the past had any claims rejected by the Accounts Office and how do you deal with that particular matter because you refer to this one in your evidence, you have referred to paragraph 3 on page 2 (p46G) of your prepared statement where you say: “The House will be aware that whenever I am mistaken as to my attendance at the House I have immediately notified the Finance Office.” So there must be somebody keeping your diary? Lord Bhatia: On a continuous basis. That is the reason why I mentioned it in my statement. I would not want to use the word “rejected”. There would be a discussion between my PA and the person in the Finance Department to say, I am going by memory now, there would be a phone call to say, “Our records do not show that Lord Bhatia attended the House on such-and-such a day. Is that correct? We may have missed him,” and I would check my diary again and look at everything and try and remember what had happened and I would say, “Yes I was there.” On some occasions they came back and said, “No, you did not attend that day, would you check again?” and I would check again and say, “Yes, I have made a mistake in claiming that.” Q186 Lord Dholakia: So you would have a note of your diary arrangements of when you come to the House and when you do not? What I am trying to do is to help you here. Lord Bhatia: Yes, I understand that. Q187 Lord Dholakia: In the sense that you can identify the errors that you made. I think there are discrepancies floating around that you do not have a record against and here you do have a record. Lord Bhatia: If I attended the House there would be a record somewhere in my diaries. Q188 Lord Dholakia: So there will be a record? Lord Bhatia: Yes, there would be a record because I would not be making the claim unless I was sure that I had been. Q189 Lord Irvine of Lairg: What I want to put to you fair and square, Lord Bhatia, for your comment— and it is not a very pleasant suggestion I have got to make to you, but I have to make it—is that what you did during the critical period, November 2007 to

February 2008, is you automatically claimed for car journeys to and from Reigate to give verisimilitude, the appearance of truth, to your claim that Reigate was your main residence, and I would like you to comment on that. Lord Bhatia: I totally refute it. I do not agree with your comment. Q190 Lord Irvine of Lairg: Have you anything in detail to say? Lord Bhatia: All I can say is that I have claimed my transport allowance to go to Reigate once a week which I have done during that week. Q191 Lord Irvine of Lairg: Even although you might have been abroad, at the weekends especially? Lord Bhatia: If I have made the claim I was not abroad definitely. If I have made a claim I would be making sure that I was there. Q192 Lord Irvine of Lairg: Could we go back to your letter at page 3 within tab H (p48H). Lord Bhatia: The letter of what date? Q193 Lord Irvine of Lairg: 30 November 2009 at page 31 within tab H (p48H). Lord Bhatia: Yes. Q194 Lord Irvine of Lairg: Can we look at the first paragraph within numbered paragraph 3: “I stopped claiming for my travel allowance in February 2008 as I found the system required by the House of Lords to be cumbersome and I felt rather than continue with making the claims for the travel I would simply cease to do so.” Lord Bhatia: Yes. Q195 Lord Irvine of Lairg: So you say you stopped claiming travel allowance in February 2008 since you found the system employed by the House of Lords to be cumbersome? Lord Bhatia: Yes. Q196 Lord Irvine of Lairg: What was cumbersome about it? All that you had to do was to give dates and distances of actual journeys and claim a specified amount per mile? What on earth is cumbersome about that? Lord Bhatia: Can I explain that please? Chairman: Yes, please. Q197 Lord Irvine of Lairg: That is what you are being invited to do. Lord Bhatia: I explained to you earlier, Lord Irvine, that the system was so rigid that it asked me, because I understood it and as my office was explained by the

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The Lord Bhatia OBE other days and had the claims accepted on other days5. Q202 Lord Irvine of Lairg: Are you agreeing with that? Lord Bhatia: I am getting a little confused with this questioning. Please, I am not trying to avoid the question or not give the answer. Baroness O’Neill of Bengarve: Lord Bhatia, I may have put the question very badly. We seemed to me to be getting on to a discussion as to whether you were constrained to the Monday return to London and the Thursday or the Friday departure depending on when the House was sitting, and I was wondering whether you were really so constrained because your actual journey dates were much more flexible than what you were saying about the rigidity of Monday and Friday. Lord Irvine of Lairg: I think it might help if you were taken to the relevant page within tab D at page 1 (p25A). Baroness O’Neill of Bengarve: Page 1, tab D, November 2007 (p25A). Q203 Lord Irvine of Lairg: Could you go there. Go to tab D, page 1 (p25A)? Lord Bhatia: Can I request that these tabs are connected with the actual claims which are there at the bottom. Q204 Lord Irvine of Lairg: Yes, we can give you an assurance that they are? Lord Bhatia: They refer to the claims I have made because they are very specific for the mileage and the place. Q205 Lord Cope of Berkeley: If you look some pages later the actual claim form is shown there. I cannot actually see a number on it.
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Finance Department, that I could only claim for a journey from Westminster to Reigate on a Friday morning for the day of Friday and not for Thursday. Q198 Lord Irvine of Lairg: Pausing there— Lord Bhatia: If I may finish, Lord Irvine. Q199 Lord Irvine of Lairg: Yes, of course. Lord Bhatia: Conversely, I could only claim for transport from Reigate to Westminster on a Monday morning. It had been going on from October, November January, December, January, February. My PA was telling me that these are the kind of discussions that are taking place, we have got to make these adjustments, and I said, “What is the total sum of transport costs that I am claiming during these five months?” and she said it was about £300 or something. I said, “Why do I need to get into that kind of a situation where on a Monday morning I may not have travelled from Reigate to Westminster; I may have travelled from Hampton to Westminster, or I may not have gone to Reigate from Westminster on a Friday morning, when I have not been to Westminster on a Friday morning, the House is not sitting.” It just did not make any sense to me. Q200 Lord Irvine of Lairg: But, Lord Bhatia, you could only claim, as you have agreed with me earlier, for a journey that you actually made. Lord Bhatia: I understand that. Q201 Lord Irvine of Lairg: That is the simple point and there is in fact no requirement that these journeys should be on any particular day of the week provided that they are journeys from and to your principal residence in aid of your attendance at the House. Lord Bhatia: But, Lord Irvine, what I am saying is in a given week, Monday to Thursday, I think the rules are very clear that I can make a claim for one journey only to Reigate to my main residence. Baroness O’Neill of Bengarve: Lord Bhatia, I think you cannot have been very inhibited by the Monday/ Friday thing because in fact during November you did make, very reasonably, if this is a proper claim, a claim for coming up on Tuesday 7 November and, equally, a claim for going down on Saturday 1 December. This is in the blue tab, tab D (pp24–6), the calendar, where it is marked in blue. I feel that this discussion about Monday and Friday is actually not part of the rules and not part of what your practice was. Chairman: It is the rules where it is fitting with whether you are claiming overnight allowance. That is the point. It is not a rule of transport alone. As Lady O’Neill says, you were not actually constrained in the sense you did travel on other days and claim for

When invited to comment on the draft transcript, Lord Bhatia added: On Monday 5 November I did not attend the House of Lords and therefore returned on 6 November, for the State Opening of Parliament, hence the claim. On the second date in question the House of Lords sat on Friday 30 November 2007 and that was the reason for the claim made on Saturday 1 December. Further explanation is also provided in my response to question 211 in this transcript. The Sub-Committee should also note from the calendar with blue highlights (3D), that I have claimed for transport from Reigate to Westminster on all of the Monday during the period October 2007 to February 2008 except on Monday 5 November when the House was closed or when the House was in recess. It was the rigidity of the system as I understood it (and as it had been explained to my PA by the Finance Department) since on any of those Mondays I may have travelled to Westminster from Hampton or elsewhere having returned back from Reigate on the night before. Furthermore, also under Tab D is it is illustrated that the claims for October 2007 and December 2007 (the November claim having been submitted late) both raised queries from the Finance Department because of the difficulties I was encountering in claiming according to my patters of travel over the weekends in question.

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Lord Bhatia: The month I have given, Lord Cope. Lord Cope of Berkeley: It is the bottom right-hand corner, November 2007 (p34G). The claim form is one of the ones in the bottom right-hand corner. The dates of travel there, you came from Reigate to Westminster on the 6th, which was the Tuesday, and returned London to Reigate on the 9th, which was the Friday. The following week you came from Reigate to Westminster on the 12th, the Monday, and returned to Reigate on the Tuesday. Presumably, you did not attend the House, fair enough, Wednesday 14 November and Thursday 15 November. That is fair enough, but you did travel on different days. Q206 Lord Irvine of Lairg: You have not got an answer. He has not answered you. Lord Bhatia: If I can go to my specific claim which I copied out to everybody, there is a claim dated October 2007. In fact, there are two copies of the same. I am just trying to look at it because I think one is a revision that we were asked to make. Q207 Lord Cope of Berkeley: But the travel there, although your main residence is given as Reigate, is entirely to Hampton. Lord Bhatia: That is right, that is right. Now if you see the right-hand side claim form, which is marked 5 November 2007, the claim form is from Hampton. Please, I beg you to remember that this is the first month that we were submitting the claim for transport and for overnight allowance. The claim says on every day that we have claimed the night allowance the transport cost is from Hampton to Westminster. Q208 Chairman: Can I help you, Lord Bhatia? As I understand it, what happened in October is this is the month very shortly after you have had your major health problems. Lord Bhatia: Yes. Q209 Chairman: You claimed overnight subsistence for your residence in Reigate but you claimed travel from Hampton and that inconsistency caused the finance section to ask you to re-do it. Lord Bhatia: Yes, and the adjustment was made accordingly6. Q210 Chairman: Can I just come back to the “cumbersome” point?
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Q211 Chairman: Actually your pattern shows that you did move and travel and claim on other days and those travel claims were allowed. I wonder if you could just recap why therefore you really thought it was so cumbersome that you would give up doing this? Lord Bhatia: Baroness, simply for the reason that the rule as we understood it in my office was that I can only claim for one trip from Westminster to Reigate and that claim has to be made on a Friday, and only one claim coming back from Reigate to Westminster on a Monday. If a Monday happened to be a holiday it would be Tuesday then, whatever the case may be. Q212 Chairman: That understanding was a misunderstanding, as is actually shown by your own claims that were accepted on Tuesdays and Saturdays for example. Lord Bhatia: Yes. Q213 Chairman: We can see that from tab D (pp24–6), the blue dots, where there were several occasions, admittedly around weekends on Saturdays, and on Tuesdays, where you were able to claim. So that makes your answer about it being cumbersome because of that rigidity, in practice your office or you were claiming for a much more flexible system. Lord Bhatia: Baroness, all I can say is that my understanding was that I could claim one way to Reigate and back again to Westminster once a week, if I went to Reigate and came back to Westminster on Monday. The fact is that I may not be in Reigate on a Monday morning when I claimed the allowance because I had come back from Reigate to Hampton on a Sunday evening, I may have travelled from Hampton to Reigate. If that is the case then that is the discomfort part that I had in my mind that I was being asked to make a claim. Journeys that I had made I was being asked to make a claim that was— Q214 Chairman: Lord Bhatia, you were not being asked to make a claim. The way the expenses system works is that we all on our honour look at the rules and make claims for the expenses incurred for attendance at the House for which we think we are eligible. We do acknowledge that those rules have changed and we are going on the rules as they were at the time, so you were not forced to claim. Lord Bhatia: I understand that. Baroness, that is the reason why, I was not forced and I said I had better not make any claims from now on because it was not working for me properly. I think it would be useful, Baroness, if maybe after this meeting we asked the Finance Department what was said to my office to say I could only claim for transport costs on—

When invited to comment on the draft transcript, Lord Bhatia added: The Sub-Committee should be aware from the documentation provided that there are two claim forms for October 2006 (see question 180) in the hearing bundle. I submitted the first one and the second document is the same form that was submitted but shows corrections made by the House of Lords’ Authorities after discussions with my office. It therefore follows that I did not “re-do” the form.

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The Lord Bhatia OBE the same day, not having stayed the night there. On Monday morning, I am starting my journey from Hampton to Westminster for which I am claiming because that is my understanding of it, but I have to put the claim in saying from Reigate to Westminster. Q225 Chairman: Even if you did not go from Reigate? Lord Bhatia: I went from Hampton having returned from Reigate to Hampton. Or another variation could be that I may be outside London. Q226 Chairman: Are you saying that the system was forcing you to lie by saying you came from Reigate when you came from Hampton? Lord Bhatia: Baroness, I really would not want to use the words “forcing me to lie” because I do not think that was the— Q227 Chairman: It is the way you are describing it and I am trying to be fair, Lord Bhatia. Lord Bhatia: I understand that. Q228 Chairman: I think you are saying that your interpretation of the system was putting you into a position where you had to perhaps, if you do not like the word lie, fudge about where you travelled from. Lord Bhatia: But the fact is that I did travel to and from. Chairman: Somewhere to Westminster. Thank you. Lord Dholakia? Q229 Lord Dholakia: Can I take you, Lord Bhatia, to the statement you made to us this morning. You mentioned here that following the articles in the Sunday Times “information about my political affiliations, the value of my personal wealth and my house in Hampton thus casting aspersions on my character and integrity.” Could you give us some indication, first of all, of what you actually mean by political affiliations, you being an independent peer, and the second thing is did you respond to the Sunday Times in terms of the article that was published with your own interpretation of what you told us today? Lord Bhatia: The first question is what did I mean by political, what is the word you used? Q230 Lord Dholakia: Affiliations. Your word. Lord Bhatia: I think the article or the letter from the Sunday Times stated that I was appointed by Tony Blair, indicating that I was appointed by the Labour Party and the Prime Minister. The fact is I was appointed by the independent House of Lords Appointments Commission as a crossbencher. the Sunday Times was trying to connect up the two things together by saying that I am a Labour supporter; that is the reason why Tony Blair appointed me there. That is completely not true. Secondly, we are sitting

Q215 Chairman: I think the best thing is really to look at the rules themselves. Lord Bhatia: The rules are very clear. Q216 Chairman: I think they are. Lord Bhatia: Yes. Q217 Lord Irvine of Lairg: What I am putting to you, Lord Bhatia, is it is pretty obvious that you can only honestly claim for a journey that you actually made and you agreed with that? Lord Bhatia: Yes, and I did make those journeys. Q218 Lord Irvine of Lairg: And it is not very difficult, is it, there is nothing cumbersome about giving dates and distances of actual journeys and claiming a specified mileage amount and working out what the figure is? There is nothing difficult or cumbersome about that; it is simplicity itself. Lord Bhatia: I am not denying that fact at all. What I am saying is I made a claim for one journey from Westminster to Reigate and back once a week, which I did. Q219 Lord Irvine of Lairg: You claimed allowances for journeys between November 2007 and February 2008. Did you find that cumbersome? Lord Bhatia: Yes. Q220 Lord Irvine of Lairg: You did? Lord Bhatia: Cumbersome? The travel or the claim? Q221 Lord Irvine of Lairg: The claim. Lord Bhatia: Yes, for the reasons that I have already explained two or three times earlier on. Q222 Lord Irvine of Lairg: Well, I really do not understand what is cumbersome about it. Lord Bhatia: If you accept the premise that I am allowed one trip from Westminster to Reigate. Q223 Lord Irvine of Lairg: Provided you made it. Lord Bhatia: Yes, please, if I may finish, Lord Irvine. I am allowed one trip only according to the rules to go from Westminster to Reigate and back from Reigate to Westminster once a week. Q224 Chairman: That is your interpretation of the rules; that is not accurate. Lord Bhatia: I think we need to enquire from the Finance Department whether that was the understanding that was given to my office. But be that as it may, the question Lord Irvine is asking is why does it become difficult, why does it become cumbersome? Let me give you an example to illustrate why it is difficult and cumbersome. I have definitely gone to Reigate on Saturday morning or on Sunday morning and I have come back to Hampton

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at a time and age when newspapers write things and if you begin a conversation with them to say this is wrong, this is wrong, this is wrong, you are entering into a futile battle with them, as I see it. That is the reason; I did not want to find that they published and published it. Lord Dholakia: One other thing that just came to mind for the record as well is that you and I served on the Policy Research Institute on Ageing and Ethnicity some years ago. I just remembered. It should be noted for the record. Q231 Lord Irvine of Lairg: I want to wrap up the questions about the cumbersomeness issue with you in this way: I want to suggest to you that you stopped claiming for travel expenses not because it was cumbersome but because you had come to appreciate that you were claiming for journeys that you had not actually made and you therefore concluded that you had better stop doing it. Lord Bhatia: I totally refute that. Q232 Lord Irvine of Lairg: Right, let us move to another issue then. Can we go back to your statement which is in tab H. Let us go to page 2 in the bundle, page 1 in the statement, you say at the very bottom of the page (p46B): “We did continue to look at alternative residences and finally chose an apartment, namely 31 Bancroft Court, Reigate, Surrey RH2 7RW. I actually secured the property in March 2006—but did not designate this as my main residence until October 2007.” And continuing at the top of the next page: “Had I done so, I could have claimed from that period—and not from the period in question.” What I am trying to understand here, Lord Bhatia, is your thinking. Was it that you only had to designate somewhere outside London as your main residence in order to qualify for the overnight allowance regardless of whether it was truly your main residence? Lord Bhatia: No. Q233 Lord Irvine of Lairg: What was your thinking? Lord Bhatia: My thinking was, as I said to you right at the beginning, I wanted to down-size, I wanted to move away from Hampton, sell my house and downsize into a smaller apartment, which I found in Reigate. Q234 Lord Irvine of Lairg: What I am pointing you to here is that you say you could have designated the Reigate flat earlier, in which case you could have drawn the overnight allowance for longer. Is that you saying yes? Lord Bhatia: Yes, I could have, and I did not because I wanted to try out that flat between March 2006 and October 2007 to see whether that was the right base to go to.

Q235 Baroness O’Neill of Bengarve: So that period was a period when you were trying out how you liked Reigate? Lord Bhatia: Exactly. Q236 Baroness O’Neill of Bengarve: But you actually began to live in it as your main residence in November 2007 and moved your things? Lord Bhatia: Yes. Q237 Baroness O’Neill of Bengarve: What changes did you make in your life when you actually began to make it your main residence in October 2007? Lord Bhatia: I went there regularly, as I stated earlier on. I stayed there as often as I wanted to. I was feeling comfortable that that was the place that I would go to and some time during that period I opened up the negotiations with the owners of the flat to say I wanted to buy this flat. Q238 Lord Irvine of Lairg: But would it be fair to say that it had not become your main residence, that you were wanting to try it out to see whether you would like it to become your main residence? Lord Bhatia: That was the position between March 2006 and October 2007. By that period I had made up my mind this is the right place that I would want to go and live in and that is the place that I would move to. Q239 Chairman: And you are negotiating to buy it? Lord Bhatia: I am negotiating to buy it. Q240 Chairman: You are now or you were then? Lord Bhatia: I was negotiating then. Because of all the press and media and everything else came up, the owners began asking for ridiculous prices for that flat. I have just kept everything on hold and then will decide to buy there or somewhere else, in Reigate, or somewhere else. Q241 Lord Irvine of Lairg: Then could you help me with this, what happened in December 2008 to cause you to cease designating it as your main residence? Lord Bhatia: I mentioned to you my health and my family circumstances dictated that we just halt and take a decision as to what we should do later on. I still have kept the Reigate flat in my hands. I may decide to go there when we are able to buy it or I will seek another property and move there. One thing is certain, Lord Irvine, I am very clear and very determined, I have to down-size. I cannot at my age, my wife’s age, maintain a house with four bedrooms and the huge other facilities that are there. Q242 Lord Irvine of Lairg: Could I ask you this: you still rent the flat, correct?

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The Lord Bhatia OBE Q252 Lord Irvine of Lairg: Can I put one general point to you and then I am done with questions, Lord Bhatia. You know of course, as every peer does, that you have always to act on your honour. Yes? Are you saying yes? Lord Bhatia: Yes. Q253 Lord Irvine of Lairg: Do you assert that you acted honourably in the expenses that you claimed arising out of designating your Reigate flat as your principal residence? Lord Bhatia: Absolutely. Lord Irvine of Lairg: Are there any considerations you would wish us to take into account in considering whether you have acted honourably in addition to those which we have already discussed? Q254 Chairman: And in addition to your statement this morning? Lord Bhatia: Except what I have stated in my two statements, the one on 1 September 2009 and the one of today. Lord Irvine of Lairg: Thank you very much. Chairman: Lord Cope? Q255 Lord Cope of Berkeley: I am sorry, Lord Bhatia, but I still have difficulty understanding what occurred in early September of 2007 to cause you to say that your main residence had changed. You said earlier on that you had some possessions, clothes and one thing and another, that you had been taking gradually to Reigate, but am I right in thinking that you did have a move of furniture and the normal things that happen when anyone moves house at that stage? Lord Bhatia: Lord Cope, when I took the flat in 2006 it had to be furnished, there was no furniture there. We had been furnishing that house throughout that period. Some of the furniture may have come from Hampton, some of the furniture may have come from outside but the flat was furnished as required by me. I was moving things as and how I required and that is what has happened. Q256 Lord Cope of Berkeley: So there was no specific event? Lord Bhatia: No. Q257 Lord Cope of Berkeley: I realise it was obviously complicated by your being ill a bit later in September. Lord Bhatia: That was much later, that was much later but really the period of 17 or 18 months that I did not claim it as my main residence was merely to be sure that is where I wanted to go. After 17 or 18 months it felt comfortable, everybody was happy that was the place to go to and that is where I went.

Q243 Lord Irvine of Lairg: And Sultan still lives there? Lord Bhatia: Yes. Q244 Lord Irvine of Lairg: He has lived there throughout? Lord Bhatia: And he looks after the house. Q245 Lord Irvine of Lairg: He has lived there throughout? Lord Bhatia: And I go there as well. Q246 Lord Irvine of Lairg: Finally on travel expenses, you remember we were discussing a moment ago, and you say that you stopped claiming them because the House of Lords’ system was cumbersome. However, you resumed claiming the travel allowance in January 2009 when your designation of your main residence reverted to Hampton? Lord Bhatia: Yes. Q247 Lord Irvine of Lairg: We can see that if we go to the calendar at D for January 2009 (p26C). Lord Bhatia: Yes. Q248 Lord Irvine of Lairg: You will see that you resumed claiming it then. Lord Bhatia: Yes. Q249 Lord Irvine of Lairg: And you did. Lord Bhatia: I did. It was very straightforward. Q250 Lord Irvine of Lairg: So it was not cumbersome? Lord Bhatia: It was absolutely straightforward as I was doing before I switched to, started to claim for the Reigate flat. Before that it was very simple, very straightforward. If I went to Westminster on any given day, transport costs were claimed. I had been claiming that since 2001 when I entered the House of Lords. I did not even have to blink my eyes when signing that form because it was very straightforward. I do not think there have been any enquiries from the Finance Department on those issues. Q251 Lord Irvine of Lairg: But do you not accept that it is equally straightforward to claim in respect of journeys to and from Reigate? Lord Bhatia: Lord Irvine, you keep on asking this question and my answer will be the same. It was complicated; it was too cumbersome for me. It was not worth my while to be worrying about it. That is the only reason why I stopped claiming.

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Q258 Lord Cope of Berkeley: Similarly, in December 2008, there was no move back again, as it were? Lord Bhatia: The flat is furnished there. I still own it. Q259 Lord Cope of Berkeley: Sultan is still there? Lord Bhatia: Yes. Q260 Lord Cope of Berkeley: So there was not much change? Lord Bhatia: There was not much change. I told Mr Pownall I wanted to go on the record and I want to go on the record, please, even at this point in time, if any one of you want to go and see that flat in Reigate you are very welcome. Q261 Chairman: Can I just ask you about the term “main residence” because, as you know, you signed every claim form saying signature and then underneath it says your main residence and you give the address. Lord Bhatia: Yes. Q262 Chairman: We acknowledge that the definition of a main residence has recently been revised by the House Committee. What was your understanding of it as a term in October 2007 when you designated Reigate as your main residence? Lord Bhatia: That is my main residence where I live. I designated it as my main residence and that is the definition, as I understand it to be. Q263 Chairman: Your principal home? Lord Bhatia: Yes. Q264 Chairman: You still believe that your pattern of claims fitted the definition that Reigate was your principal home? Lord Bhatia: Yes. Chairman: Thank you. Do you have some more? Q265 Lord Dholakia: Just one small point, Lord Bhatia, if I may take you there. The last few minutes we have talking about the process being very cumbersome, particularly when you made the arrangement for your main home being in Reigate. If you remember, I asked you earlier on, when there have been errors in your claim forms, et cetera, you said you rectified them in terms of the Accounts Office. Did you not feel on the basis of the information that you have that you should have checked whether you could have actually claimed from Reigate into Westminster when you may not have done that particular trip? It was your understanding that was the only trip you could make. Would you therefore not have felt that this is something you should have checked with the accounts section and actually, if they were right, repaid this money?

Lord Bhatia: Lord Dholakia, you are going back probably 12 or 15 months now. This is such a small part of everything else that I was doing that I genuinely beg the Committee to understand this. One thing I did not want was the constant to-ing and fro-ing between myself and the Finance Department. I said to myself and I told my PA, “Why do we want to claim for anything? If that is the issue of transport costs, why claim it at all, so there is no discussion of that nature taking place because I am not sure whether I am claiming correctly or not, where I am going from, whether I am allowed one trip; let’s forget it.” That was genuinely the reason why I stopped claiming. I want the Committee to believe me, claiming a transport allowance, even if you took it all the way, the whole year, for 30 or 40 weeks. Q266 Chairman: Can I ask you one other question. In the recess where did you go and spend weekends? Would the pattern for the recess be the same as the pattern as when Parliament was sitting? Lord Bhatia: Yes, during recess as well. Q267 Chairman: You earlier said in answer to Lord Irvine that 30, 40 or 50 per cent of your time was spent at Reigate. Lord Bhatia: Yes. Q268 Chairman: That is obviously a pretty broad span if you take the minimum of that, 30 per cent, would you still say that was accurate? Lord Bhatia: I would. I would. Q269 Chairman: Lord Bhatia, I think the Committee has probably finished its questions. I know it has been a long and no doubt tiring session for you. We have very much noted what you have said. We have got the correspondence and the statement you read out at the beginning, but I would like to give you the opportunity at this stage to say was there anything else you wanted to add, retract, change, because now is your opportunity to say it. Lord Bhatia: Thank you for giving me the opportunity. It has not been trying. You have been very fair and straightforward in asking the questions in an appropriate manner, and I hope that I have been able to give all the right answers that are within my powers. The intention has never been to give wrong information or deny information that I may have. I just want to make one statement. I have been in this country for 40 years. I have been very, very heavily involved in the charity and the voluntary sector. I want to have permission to circulate my CV which denotes all my 40 years of work in this country and beyond. [The CV is handed in at the bar. Not printed.] I have been involved in major institutions of this country, Oxfam, the National Lottery Charities Board. For the last four years I have been heavily

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The Lord Bhatia OBE inquiry that is taking place—rightly, I am not blaming it on you, if you receive a complaint from a member of the public or from the press, you have got to follow it through, and I fully accept that—but it has been a very, very distressing period, for me, my wife, my family, my children and my grandchildren. I cannot measure it in money terms. Q270 Chairman: Yes, I can well understand, Lord Bhatia: I do wish you as a Committee to take a view that I have acted in good faith according to the rules as I saw them properly. There is no question of misuse of public funds in the way the press and media have made out. Any day I would uphold the rights of the press and media for freedom of speech and writing, or whatever it may be, but at the same time I feel that there is a darker side to the press and media’s freedom which has affected me a great deal because I am at the receiving end for the wrong reasons. Q271 Chairman: Some of the rest of us have suffered from that. Lord Bhatia: I cannot speak for any one of you, but I do not think any one of you have been placed in the position that I have been placed recently, and it is extremely, extremely distressing. For me to talk about my travel allowances of £320, I cannot believe that that is where I am at the moment. So all I can say is thank you for giving me time to speak whatever I have said. I leave it to your good senses and your good judgment to decide, hopefully, that the complaints that have been made against me are not correct. Chairman: Thank you very much.

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engaged in promoting academies, which was a major and still is a major government initiative. In the last two years, certainly 2009 and now 2010, I have been promoting a new foundation in India dealing with poverty and equality issues and all the rest of it. All these endeavours over the years have taken a great deal of my time. Many times, and I do not have a record of that, but I can compile a record if necessary but it is not the intention, quite often I have had to go to do my charity work and not attend the House of Lords and I have not claimed any money for that purpose. I have spent whatever I can on my charitable work which runs into a large sum of money. I want the Committee to understand that in making these claims, whether it is travel or overnight claims, money has never been the motivation. It has never been the issue. I genuinely believe that if I have done all that work (and that is the reason why I want you to see my CV) why would I want to get into this kind of a situation? I claimed money which I consider 100 per cent to be valid and correct and proper according to the rules. Why would I want to be placed in this position? It has been very distressing over the past 12 months. I have felt I was not part of the House of Lords. I could feel it. If any one of you is unfortunate enough to be in that position, you will feel that the eyes of people are on you. Everybody is looking at you. Maybe you are misunderstanding it, but people read the reports in the press and media and make their conclusions. Today the press and media is the prosecutor, is the judge, is the executor and all the rest of it. We sit there without any defence. Part of my health problems, part of my other work that I have been doing has been hugely affected by this kind of

H Supplementary memorandum by Lord Bhatia Lord Bhatia wishes to refer the Sub-Committee to Tab 2E (pp17–23). J In designating Reigate as his main residence he did this in good faith and in accordance with the rules at the time. He has given his written and oral assurances on this whenever he has been asked both by the Clerk of the Parliaments and to the Sub Committee on Lords’ Conduct. In reviewing the bundle of information that has been supplied before the hearing, Lord Bhatia and his legal adviser observe from the detailed information provided that a number of similar cases against other peers have not been upheld, their personal written and verbal assurances being accepted. Many similarities exist between these cases and Lord Bhatia’s, in particular: 1. Relatives who may have been residing at the Main Residence. 2. The frequency of stay at the main residence. L 3. The pattern of travel including the absence of travel claims to and from the main residence. Lord Bhatia maintains his written and oral assurances to the House of Lords and requests that the information he has provided be accepted by the Sub-Comittee on Lords’ Conduct. 12 July 2010

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Further supplementary memorandum by Lord Bhatia in response to the Sub-Committee’s draft account of the facts All comments below are given with the understanding that the Sub-Committee has been able to review the documents I served on the Clerk to the Sub-Committee on Monday 12 July 2010 (by email at 14:11 hours with a hard copy that was also delivered later the same afternoon) that included: 1. Minor changes in the transcript marked in red ink as required. 2. A separate 2 page note of the Footnotes. 3. A memorandum. I received the document entitled “Members reimbursement scheme investigation by the Sub-Committee on Lords’ Conduct Draft report: Facts” by email also on 12 July 2010. The draft report was therefore presumably completed before the documents above had been reviewed. [The paragraph numbers in this memorandum have been adjusted to correspond with the report made to the Clerk of the Parliaments.] Paragraph 27 The Finance Department was made aware of any change in Main Residence that I made. I was not made aware that my designation of Reigate as my main residence was in any way different to that of many other members of the House. I would also refer the Sub-Committee to the response given by the Clerk to the Parliaments in his report to the House Committee of 9 February 2010 that visiting at an address “at least once a month over the year” would qualify an address as a “main residence”. I have given written and verbal assurances throughout the past year that if I have claimed the travel allowance to the Reigate residence, then I did visit my residence in Reigate. F Paragraph 31 Stating that “Lord Bhatia acknowledges that the contrast with the Hampton property is ‘stark’ but says that it reflects his circumstances.” (3Gp12l14) is reading too much into the response I gave to a journalist that I had given having been “door stepped” by him. If you are to draw a reference to this response please note that the circumstances you refer to are stated clearly to the journalist: “At 76 I cannot upkeep that house that I have got. I think all of us at our age have got to make the decision to say . . .” (3Gp12l14) I also find it regrettable that this paragraph seeks to make an issue of the description of the Reigate residence attributed to it by the Sunday Times journalist when no questions were put to me in relation to the covert recordings made by him by the Sub-Committee during the hearing I attended. I should also point out that no questions were asked by the Sub-Committee in respect of the inaccuracies in the Sunday Times article (Tab B) that appeared on 26 July 2009 that I high-lighted to the Clerk of the Parliaments in my prepared statement of 1 September 2009 (Tab H). No questions were put to me about the contents of the transcript of the covert recording at Tab G of the hearing bundle. J Paragraph 35 Firstly the responses to the questions in this paragraph are taken out of context in that they refer to the period before my changing my main residence to Reigate and ignore other responses I have given that are directly linked to those responses relied upon. My response to Question 76 is directly linked to Question 75 where Lord Irvine states “Now then, we have dealt with the period of the year and a half prior to your designating it . . .” In Question 76 he states: “Now then, concentrating again on that period . . .” These questions did not refer to my lifestyle once Reigate became my main residence—but the period prior to that i.e. 1 March 2006 to 30 September 2007. Question 7 is where Lord Irvine asks if I was looking to downsize from 2003—to which I respond yes. Again this had nothing to do with the period of the Reigate residence being my main residence. Question 41 is where Lord Irvine asks where my family gather for special family occasions to which I responded “At Hampton at the moment.” And such family gatherings take place at my daughter’s residence in Hampton. As you can see from my response to question 43 I have two daughters living in London, one of whom lives in Hampton the other in Chelsea who both host family gatherings. K G E C

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Question 40 refers to my making no friends in Reigate—no reference is made to my response at Questions 38 or 39 where I responded that I have no friends in Hampton, despite having had a property there for over 20 years—save for my neighbours. Reference is made again to the Sunday Times covert recordings—again I am surprised at their inclusion given that no questions were asked of me at the Sub-Committee hearing in reference to those covert recordings. Reference is made to my not being able to remember the Reigate address. I would like to point out to the SubCommittee that this was not an “interview” in the usual sense with a pre-arranged time and some idea of the area of interest. The references are to a covert recording made by a journalist after “door stepping” me (3Gp1l1). It is stated that in the covert recording (3Gp1l35, l42) that I “could not recall the address of the Reigate property”. The actual responses were: At 3Gp1l35 I say: “Reigate—I can give you the address in a minute. Reigate in Surrey.” At 3Gp1l42 I say: “I’ll give you the address, I’ve written it down somewhere.”

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I also note that the draft report has not noted that the journalist conducting the covert recording (presumably in pursuit of a headline) changed the subject after each of those responses. He did not give me the opportunity to give him the address. To which I respond at 3Gp4l12: “I don’t know how old you are but when you get older, your memory becomes . . . If you give me a minute I can go and get it?”

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At that time I was genuinely concerned not to give a journalist, asking questions about my personal affairs, incorrect information given the background with the investigations under way in respect of Members of the House of Lords and House of Commons. I wanted to ensure the information that he was given was correct—therefore I went to every length to ensure that the post code that he was given, along with the address, was correct. I should also point out that this covert recording was made nine months (in September 2009) after I had ceased staying at the Reigate address. Paragraph 38 Paragraph 22 (i) is factually wrong. It was the Finance Department that amended the claim form for October 2007 and not me, or my office. Paragraph 39 Although the Clerk of the Parliaments referred to his letter of 25 March 2020 to my being unable to give him an “. . . estimate of the number of occasions when you visited your Reigate residence . . .” it should be pointed out that in all other correspondence between myself and the Clerk of the Parliaments reference was made to the number of times I “stayed” at the Reigate residence, hence the responses from me (Tab H). I would invite the Sub-Committee to review that correspondence where the Sub-Committee will see the Clerk of the Parliaments refers to “stay” until the final letter where he refers to “visited”. Paragraph 40

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I have maintained consistent responses to questioning about this complaint from the Clerk of the Parliaments through to the hearing in front of the Sub-Committee on Lords’ Conduct; this matter has now lasted for a period of almost one year and, as stated before, my answers to all have remained consistent throughout this period. I do not understand what “contradictory evidence” was presented to the Sub-Committee. I would also point out that I have two prepared statements that have been submitted to both the Clerk of the Parliaments and the Sub-Committee both of which have been consistent with the information that they have contained. Paragraph 41 The response of my brother, to questions covertly recorded by a Sunday Times journalist, is totally out of context. The response was given whilst being questioned outside the Reigate property where the journalist had obviously been waiting to intercept him on his way home. It cannot be something that the Sub-Committee rely on as being probative to the issue of my residence. I would point out the legislation in England and Wales states that Casley Finance, my wholly owned company, must retain copies of the utility bills in relation to the Reigate property. That is why I was able to produce them to the Clerk of the Parliaments.

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I cannot state strongly enough that had I known that records and independent verification of my presence at my Reigate residence would have been required by the House Sub-Committee—or for me to contemplate transferring the main residence from Hampton to Reigate, a process that started over four years ago, I would have kept such records meticulously. I stress again that I would never mislead the House and that all claims made by me in respect of my residence were done so in good faith and in accordance with the Rules in place at that time and as referred to by the Clerk of the Parliaments in his report of 9 February 2010 that I have quoted under paragraph 11 above. Paragraph 42 I would ask the Sub-Committee to review the documentation they have before them from the Clerk of the Parliaments. You will see that the terminology referred to by the Clerk of the Parliaments refers to different interpretations to that of his report of 9 February 2010 above. Paragraph 43 At the time that I made my claims there was no definition of “main residence“—and I would refer you to the report from the Clerk of the Parliaments of 9 February 2010 to this Sub-Committee—as already confirmed at Paragraph 11 of this draft report. I therefore fail to see the relevance of the inclusion of the covert recording at 3Gp13l42 or 3Gp14l15 as I was not questioned on the covert recording. I request that the Sub-Committee refers to the response of the Clerk given by letter of 23 June 2010. The reference to the covert recordings throughout the draft document does not reinforce that statement. It has all the appearance of the recordings being used as “fact”. Paragraphs 44 and 45 I have already informed the Sub-Committee of my understanding of the rules surrounding the issue of claiming for travel expenses. I have already stated that I, and my office, came to the understanding of these rules following conversations with the Finance Department of the House of Lords. Any claim made was done so in good faith. I have asked before that the Finance Department clarify the information that they passed on to me in my response to Question 214 at page 48 of the transcript of the Sub-Committee hearing. I am not able to discuss the “alleged misunderstanding” any further as that part of the draft report has not been disclosed to me. Please note that the Clerk of the Parliaments states in his letter of 9 February 2010 (Tab E2 Ref: CP/10-11/LC 2E) that: “A feature of the current scheme is that it operates without any clear definition of ‘main residence’. However I have taken the view that there must be a minimum threshold below which it would be inappropriate for a Member to designate a property as a ‘main or only residence’ and consequently to claim overnight subsistence . . . At my request, the House Committee has accordingly agreed a basis on which the threshold could be set below which the current scheme should not permit a claim bearing in mind any natural meaning of the term ‘main or only residence’. The threshold set by the Committee is that the main residence has to be visited with a degree of frequency: in the order of at least once a month, over the year, when the House is sitting. Time spent at the main residence when the House is in recess is also a relevant factor. Ownership is not a requirement but is a factor in each case.” “I have sought and received confirmation from the House Committee of the principle that there will be circumstances in which it is appropriate to designate as a main residence a property which is occupied by a relative, other than a spouse or partner. Such designation can be made properly under the current scheme, subject to the threshold set out above, and dependent on the Member’s connection with the property, including their financial contribution to the running costs.” The report goes on to state that the Clerk of the Parliaments has sought to obtain answers to certain standard questions about the circumstances of the Members in question including: 1. Whether the Member owns or leases the main residence; 2. Where the Member was resident in each recess; 3. What factors led the Member to designate the residence as the main residence; and 4. Whether the pattern of journeys indicated by the Member’s claim forms accurately represents the frequency of residency at the main residence.

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The Clerk of the Parliaments has relied upon the Member’s “explicit written assurances; in particular the assurance that the pattern of journeys indicated by the Member’s claim forms accurately represents the frequency of stays at the main residence.” The Sub-Committee will be aware that I provided the Clerk of the Parliaments on more than one occasion with verbal and written assurances that he refers to above. I therefore request that the Sub-Committee concludes that I have complied with all the above criteria that were in force at the relevant time. 16 July 2010

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EVIDENCE SUBMITTED TO THE COMMITTEE FOR PRIVILEGES AND CONDUCT
Letter from Christopher Johnson, Clerk of the Committee for Privileges and Conduct, to Lord Bhatia, dated 21 September 2010 Committee for Privileges and Conduct Enclosed with this letter is a copy of the report of the Sub-Committee on Lords’ Conduct, following its investigation into the complaint against you. Also enclosed is a copy of the accompanying evidence. The purpose of this letter is to notify you of your right to appeal against the Sub-Committee’s findings, and to explain how any such appeal would be conducted. As you know, the Sub-Committee’s investigation was conducted in accordance with the Code of Conduct, agreed by the House in 2001, and the procedure described in the 4th Report of the Committee for Privileges of 2007–08 (“the 4th Report”), which was agreed by the House in December 2008. I draw your attention in particular to the following paragraphs: Appeal to the Committee for Privileges 32. Paragraph 19(e) of the [2001] Code of Conduct states that “If after investigation the Sub-Committee finds the allegation proved, the Member complained against has a right of appeal to the Committee for Privileges”. To give the Member an opportunity to make such an appeal, at the same time as the Sub-Committee’s report is forwarded to the Chairman of the Committee for Privileges, the Registrar will give the Member concerned a copy, indicating at the same time the deadline by which an appeal should be made . . . 34. If the Member decides to make an appeal, he or she should do so in writing, setting out the grounds for the appeal, and enclosing such supporting material as the Member thinks appropriate. The Committee will then meet to hear the appeal, and in so doing it will have before it the SubCommittee’s report, along with any annexes, and the Member’s written appeal. As a courtesy, the Member will be given an opportunity to appear in person, if he or she so wishes. 35. The Committee will not normally reopen the Sub-Committee’s investigation. Rather the Members of the Committee will use their judgment to decide whether, on the balance of probabilities, they endorse the conclusions of the Sub-Committee. It is thus your right to appeal against the Sub-Committee’s findings. If you choose to exercise this right, you should submit your appeal in writing (if possible, also by email) to me not later than noon on Tuesday 5 October. In so doing you should set out the grounds for your appeal in full, and may enclose such supporting material as you think appropriate. However, when deciding on the scope and terms of any appeal, you should bear in mind the wording of paragraph 35 above. Whether or not you decide to appeal the Sub-Committee’s findings, you are of course free to comment on the Sub-Committee’s recommended sanction, for instance by drawing attention to any relevant mitigating factors. The Committee for Privileges and Conduct will consider the Sub-Committee’s Report, along with any appeal which has been lodged, at a meeting starting at 3.30 pm on Monday 11 October. Paragraph 34 of the 4th Report, quoted above, states that any Member who decides to make an appeal is “as a courtesy . . . given the opportunity to appear in person, if he or she so wishes”. I would therefore be grateful if, at the same time as you notify me of your decision whether or not to appeal, you could also let me know if you wish to appear in person before the Committee. I will then contact you to confirm detailed arrangements. If you do exercise your right to appear in person, you will first be invited to make an oral statement, and this may be followed by brief questions for clarification. However, the Committee will not seek to reopen the SubCommittee’s investigation by means of detailed questioning. The meeting will be held in private, but a verbatim transcript will be taken, and will be published as evidence. In accordance with paragraph 25 of the 4th Report, you may bring a friend or adviser to the meeting; this person may sit next to you, and you may consult him or her in the course of the meeting. However, you will be expected to speak and answer any questions for yourself. I should point out that under Standing Order 66 Select Committees cannot “hear parties by Counsel unless so authorised by Order of the House”. L J B

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Members of the Sub-Committee who also sit on the Select Committee (that is to say, Baroness ManninghamBuller and Lord Irvine of Lairg) will take no part either in considering the Sub-Committee’s Report or hearing any appeal. Once the Committee has considered the Sub-Committee’s report and heard any appeal, all the relevant documents will be published as a Report, with recommendations, by the Committee for Privileges and Conduct. The Report will be published as soon as possible after the meeting on 11 October. Any final decision will be for the House as a whole when it comes to consider the Report. The Report and all evidence submitted to the Sub-Committee on Lords’ Conduct are privileged, and must remain confidential until such time as the Committee publishes them. I draw your particular attention to paragraphs 15 and 16 of the 4th Report, concerning privilege and contempt of the House, particularly in relation to disclosure before publication. If you have any questions regarding the procedure that will be followed by the Committee for Privileges and Conduct, please don’t hesitate to contact me. My email address and telephone number are given above; if I do not answer my telephone, email, rather than voicemail, is normally the best way to reach me. 21 September 2010 Letter from Mr Matt Bosworth, Mssrs Russell Cooke Solicitors, to Christopher Johnson, dated 29 September 2010 Re: Lord Bhatia Thank you for your letter dated 21 September 2010 containing the report to the Clerk of the Parliaments in relation to the Sub-Committee on Lords’ Conduct Report. We would ask the Committee for Privileges & Conduct for an extension to Monday 15 November 2010, in which to submit formal grounds of appeal on behalf of our client, Lord Bhatia. The extension is required in order to ensure that Lord Bhatia has full legal advice from Russell-Cooke LLP and Queen’s Counsel instructed in relation to the appeal and any subsequent proceedings that may also arise from the decision of the Sub-Committee on Lords’ Conduct, pending the outcome of the appeal. You will of course be aware that the Sub-Committee submitted the report to your office on 28 July 2010 and that Lord Bhatia was sent the report on September 21, almost two months later. He was informed that he would only have 10 working days to respond with full grounds of appeal on the matter. Given the serious nature of the issues and the sanctions being sought, it has to be in the interests of justice and fair representation in this matter that an extension is granted. We look forward to hearing from you that an extension has been granted. Given the timescales involved, we would be most grateful for your urgent response. If you require any further information please do not hesitate to contact Matt Bosworth of this firm.

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29 September 2010 Letter from Christopher Johnson to Mr Matt Bosworth, dated 30 September 2010

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Re: Lord Bhatia Many thanks for your letter of 29 September 2010, in which you asked for the time allowed for the submission of Lord Bhatia’s appeal to be extended to 15 November. It is for the Committee for Privileges and Conduct itself to decide whether or not to grant an extension, and I am therefore not personally in a position to offer you any assurance. The Select Committee, as you know, will meet on 11 October, to consider the Sub-Committee’s Report and any appeal against it. It is of course open to Lord Bhatia to submit, in his own name, a written request for an extension of time. I would be grateful to receive any such request not later than the deadline stated in my letter of 21 September, namely 12 noon on Tuesday 5 October.

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I cannot anticipate the Committee’s response to such a request, and you should be aware that the Committee may, having considered Lord Bhatia’s application, decide not to grant an extension. In that event, the Committee might decide to proceed without further delay to consider the Sub-Committee’s Report. 30 September 2010

B Letter from Lord Bhatia to the Chairman of the Committee for Privileges, dated 4 October 2010 My Lord, I have forwarded to the Committee a document prepared by my lawyers seeking an extension of time to put forward my appeal and setting out in general terms the grounds that I would rely on. I would like to add a personal plea to the Committee. I have devoted most of my adult life to the service of the community and charity work starting when I was a young man in East Africa and continuing until the present day. I have worked with many different charities over the years and have always regarding service to the community as something that I not only wanted to do by was obliged to do. I am proud to be a member of this House and regard membership as both an honour and a privilege. I wish to state unreservedly that I deeply regret the fact that the House had to undertake this process on my behalf. I have found the whole investigation by the Sub-Committee an exhausting and deeply upsetting experience. I want, more than anything, to be able to put this whole episode behind me and return to serving this House again and taking up my charitable work again which has suffered as a result of the time and worry this investigation has caused me. I hope you will allow me more time to make my case, or even on the basis of this letter and attachements, conclude that the sanctions are too extreme. 4 October 2010 F Appeal submitted by Lord Bhatia, dated 4 October 2010 APPLICATION FOR FURTHER TIME TO PREPARE APPEAL On the 21st September 2010 I was sent the report of the Sub-Committee on Lords’ Conduct following its investigation into a complaint against me. I wish to appeal against the Sub-Committee’s findings and against the proposed sanctions. The investigation into the complaint against me was considered by the Sub-Committee following receipt of a letter by them from the Clerk of the Parliaments dated the 25th March 2010, the investigation was concluded on the 28th July 2010 when the Sub-Committee reported to the Clerk of the Parliament. I acknowledge that a general election was called in May 2010 necessitating the suspension of work by the Sub-Committee between the 12th April 2010, when Parliament was dissolved, until the 7th June 2010, when the Sub-Committee was reappointed. Nonetheless the Sub-Committee took some 17 weeks to report, including the time when the investigation was interrupted by the dissolution of Parliament. I was not sent a copy of the report when it was sent to the Clerk of the Parliaments and only received a copy of the report on the 21st September 2010 this delay was apparently because of a desire to “retain confidentiality.” I have been asked to provide by noon on the 5th October 2010 my appeal in writing setting out the grounds of my appeal in full and enclosing any supporting material that I think is appropriate. On the 29th September 2010, solicitors instructed by me applied to the Clerk to the Committee for Privileges and Conduct for an extension of time to prepare for my appeal against the findings of the Sub-Committee, until the 15th November 2010, to enable them to draft with leading counsel, whom I have now retained, William Clegg Q.C., grounds of appeal and supporting material on my behalf. My solicitors were informed, by the Clerk to the Committee for Privileges and Conduct, by email on the 30th September 2010, that he was not personally in a position to grant an extension and that the decision on whether to grant an extension of time would need to be made by the Select Committee on the 11th October 2010. My solicitors were warned that the Select Committee may not grant an extension and proceed without further delay. In support of my application for an adjournment may I draw the attention of the Select Committee to the following relevant facts: 1. The Sub-Committee sat for some seventeen weeks considering the complaint made against me, I have been allowed thirteen and a half days in which to respond including two week-ends. G C

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2. I consider the report of the Sub-Committee one of the most important events, if not the most important event, in my public life which has extended over many years. The conclusions of the SubCommittee have been devastating and the conclusion that I have been guilty of bad faith in making claims for night subsistence and for mileage allowance is, effectively, a conclusion that I have acted dishonesty. 3. I have always strongly denied any impropriety or dishonesty in relation to my claims for night subsistence and mileage allowance. I have devoted many years of my life to public service and have always regarded my reputation for honesty and integrity as the most important yardstick by which my conduct should be judged. 4. If permitted the extension of time requested in this application then I will vigorously contest the conclusions of the Sub-Committee. 5. I have been given preliminary advice by leading counsel that I have good grounds upon which to challenge the findings of the Sub-Committee. I have been further advised that a refusal to grant me a reasonable time to prepare for this appeal would be unreasonable and irrational.

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6. While I am unable to properly advance those grounds now I am informed that it appears that the SubCommittee fell into error when making the investigation into my conduct. At paragraph 119 in the Guide to the Code of Conduct for members of the House of Lords it provides that “the civil standard of proof is adopted in all stages in the enforcement process . . . thus in order to find against a Member, the Commissioner will require at least that the allegation is proved on the balance of probabilities.” It is further provided in paragraph 19 of the Code itself that “the Sub-Committee on Lord’s conduct . . . shall act in accordance with the principles of natural justice and fairness.” It is yet further provided in paragraph 25 of the Report on Procedure (reproduced at paragraph 9 of the Report from the SubCommittee) that “in the investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.” It is therefore clear that in its adjudication of the complaint against me I was entitled to have that adjudication conducted according to the principles of natural justice and fairness and ought to have been accorded all the safeguards that I would have applied in the courts or disciplinary bodies. I have received preliminary advice to the effect that I was not accorded these protections. 7. The report of the Sub-Committee at paragraph 13 reproduces the Report of Procedure, paragraphs 26–28, which state that “the Sub-Committee requires at least the allegation is proved on the balance of probabilities.” At paragraph 46, when determining the frequency with which I had visited the Reigate property, then the subject of investigation by the Sub-Committee, they reminded themselves of the standard of proof to be applied namely “at least on the balance of probabilities.” No further reference to the standard of proof was made in the report of the Sub-Committee and it is therefore safe to assume that they consistently applied that test to their determinations at paragraphs 57–8, 62 and 71 of the report. Although the Sub-Committee referred in terms to “at least . . . the balance of probabilities,” in the absence of any higher standard of proof being mentioned in the Report, it must be assumed that the Sub-Committee only considered my case on the balance of probabilities which is the lowest standard known to the courts of England and Wales. Despite the qualification in the words “at least” to be found in the Report of Procedure no higher threshold was applied in my case. I am advised that the Sub-Committee fell into error in not considering the allegations against me to a higher threshold because those allegations were tantamount to an allegation of criminal conduct. The overriding principle which ought to underlie the considerations of the Sub-Committee are the principles of natural justice and fairness. I am advised that it has long been a principle of English law that the more serious the allegation the more cogent will be the evidence required to prove the allegation giving rise to what lawyers refer to as “a heightened civil standard.” It is clear that the SubCommittee was alert to the possibility of the need to apply a standard above that of the balance of probabilities but they nowhere state that they did apply any higher standard and, in the absence of any clear statement to that effect, it must be assumed that they determined the issues of fact against me applying the lowest standard of proof. I am advised that the Sub-Committee fell into error in not considering the complaint against me to a higher standard, indeed I am advised that, as the complaint effectively amounted to an allegation of crime, the criminal standard of proof, namely that of being satisfied beyond reasonable doubt, ought to have been applied. 8. I am also advised that the Sub-Committee fell into error when it refused me the opportunity to seek advice from my legal representative who attended with me when I was questioned by the committee. Obviously the only purpose of having a lawyer present is to advise me as and when necessary and the procedural safeguards, reproduced at paragraph 9 of the Report to the Clerk of the Parliaments, clearly states that I can have an adviser present during the proceedings. Such an adviser would be

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present, not to answer for me, but to advise me as and when I felt the need for advice, during the evidence I gave to the Sub-Committee on the 25th June 2010. I had an adviser with me, Mr Bosworth, a solicitor instructed by me to advise me in the proceedings, yet contrary to the clear procedural safeguard cited in paragraph 9 I was not allowed to take advice from Mr. Bosworth when I was questioned by the Sub-Committee. I would refer the Committee to page 104 of the Report question 94 where Lord Irvine of Lairg told me that I could not ask my solicitor for help. I am advised that the noble Lord was wrong in so ordering and that not only was I entitled to ask my solicitor for help but that the procedural safeguards expressly so provided. The questioning of me was extremely hostile and I felt that I needed advice from my solicitor and felt that I was disadvantaged as a result of being wrongly denied that help. I am advised that the denial of legal advice in these circumstances was wrong and that the Sub-Committee again fell into error. 9. I am further advised that the conclusions on the Sub-Committee are themselves open to challenge. In relation to issue one, having concluded that over the period of designation I had visited the Reigate property on 30% of weekends (para.46 & 54) it was inconsistent of the Sub-Committee to conclude that the designation failed to meet the criteria endorsed by the House Committee. Had it not been for the fact that my brother also resided at the property it was accepted that my designation would have met the criteria (para.55.) The fact that my brother also resided at the property reflected the cultural attitude of people of my ethnic background where it is common to have the extended family sharing the same residence. The Sub-Committee fell into error when concluding that my brother had separated from his wife shortly before I leased the Reigate property [para. 37] He had not and the references at pages 85K—86E cannot be read in a way that entitled the Sub-Committee to conclude as it did. The proper application of the House Committee criteria ought to have resulted in my designation being accepted. The “very specific circumstances” required by the House Committee ought properly to include my cultural obligations to my brother. In all the circumstances the rules ought not to operate to exclude me from designating the Reigate premises as my main residence when, apart from sharing the accommodation with my brother, all other criteria were met. 10. Obviously in relation to issue two my travel to and from the designated residence is contingent upon the conclusion reached in relation to issue one. 11. The conclusion on issue three is one that I strongly challenge as unreasonable and irrational on the facts as found by the Sub-Committee themselves. Having concluded that the designation of the Reigate property would have met the criteria endorsed by the House Committee had it not been for the fact that my brother shared the premises, this ought to have been a powerful factor in my favour. However it was expressly ignored by the Sub-Committee in circumstances that I would suggest were inconsistent and illogical. (para. 67.) The Sub-Committee appears to have confused the decision to designate with the question of bad faith. Designation of main residence is something noble peers were entitled to do under the rules if the criteria for designation were met. Where noble peers reside in more than one residence then it is frequently the case that two separate residences would qualify, under the criteria then applied, as capable of being a designated residence. If the criteria were met then designation was allowed and the individual motivation of noble peers irrelevant, it was an objective test. The criteria may have been unclear, but that was no fault of mine, and when the criteria was applied to my designation it met all the criteria identified by the House Committee subject only to the issue of my sharing the premises with my brother. I was not alone in sharing my designated residence with a relative, other noble peers did likewise. The error the Sub-Committee made was to ignore the fact that the reasons for designation, when properly made, were irrelevant and hence in seeking to determine bad faith on my part they confused the issue by seeking to focus on my motivation for designation. Further, no sufficient account was taken of the fact that I paid, through a company that I own, all the outgoings of the Reigate premises, although acknowledged in paragraph 69 this was not given the weight it ought to have been. Furthermore the Sub-Committee appears to have ignored my evidence to the effect that Reigate was the second property to be considered by my wife and myself as a new home. (see question 19 page 100 of report) The evidence in relation to the proposed move to Berkshire was strong confirmation of the intention to downsize and ought to have been expressly considered by the Sub-Committee. 12. I would further appeal against the sanction passed, confined to the period of suspension from the House, which I would argue was disproportionate and excessive. When considering the question of sanction I would ask that the Committee take into account the fact that it was agreed by the SubCommittee that the designation of the Reigate property met all the criteria of the House Committee and had it not been for my act of family obligation towards my brother in allowing him to stay at the

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premises then the principle complaint against me would have been dismissed. Furthermore the rules in relation to designation were far from clear, as has been demonstrated by the allegations over the claims of other noble peers who were wrongly suspected of making incorrect claims in relation to night subsistence. 13. I have never considered the repayment of the sums claimed as an issue and have already repaid the sum requested of £27,446, nor would I seek to avoid making a statement to the House, but I would submit that the sanction of suspension is disproportionate and excessive. 4 October 2010

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Letter from Christopher Johnson, Clerk of the Committee for Privileges and Conduct, to Lord Bhatia, dated 21 September 2010 Committee for Privileges and Conduct Many thanks for your letter of 4 October, and the accompanying appeal documents. I note that you have applied for an extension of the time allowed for preparation of your appeal; and also that you have submitted a document outlining the grounds for your appeal. I shall ensure that the Members of the Committee for Privileges and Conduct have these papers before them when the Committee meets on 11 October. You have also indicated that you wish to appear in person before the Committee at its meeting on 11 October. The meeting will be held in Committee Room 2A. The meeting will start at 3.30, and I expect the Committee, as a preliminary step, to meet in private to consider your application for an extension of time. I expect the Committee therefore to be ready to see you at 4.30 pm. I would be grateful if you could come to the Committee Corridor at that time; a Doorkeeper will be in attendance in the corridor, and when the Committee is ready I will come out of the Committee Room in order to show you in. I hope it will be useful if I remind you of what I said in my letter to you dated 21 September, regarding the conduct of the meeting. You will first be invited to make an oral statement, and this may be followed by brief questions for clarification. However, the Committee will not seek to reopen the Sub-Committee’s investigation by means of detailed questioning. The meeting will be held in private, but a verbatim transcript will be taken, and will be published with the Committee’s report. You have indicated your wish to bring both your solicitor (Mr Bosworth) and counsel (Mr William Clegg QC) to the meeting. Although the rules of procedure set out in the 4th Report of the Privileges Committee of session 2007–08, under which this appeal is to be conducted, refer only to “a friend or adviser”, the Chairman is content in the present case for you to bring two advisers, if you so wish. However, as I noted in my previous letter, Standing Order 66 of the House of Lords states that Select Committees “shall not hear parties by Counsel unless so authorised by Order of the House”. It is therefore not possible, in the absence of an Order of the House, for your legal representatives to make oral representations to the Committee. Your advisers may sit next to you, and you may consult them in the course of the meeting, if necessary seeking a short suspension of proceedings to allow you to do so in private. However, I must reiterate that under the rules of the House you will be expected to speak and answer any questions for yourself. 5 October 2010

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Minutes of Evidence
TAKEN BEFORE THE COMMITTEE FOR PRIVILEGES AND CONDUCT MONDAY 11 OCTOBER 2010
Present Baroness Anelay of St Johns Lord Bassam of Brighton Lord Brabazon of Tara (Chairman) Lord Brooke of Sutton Mandeville Baroness D’Souza Lord Eames Lord Graham of Edmonton Lord Howe of Aberavon Lord McNally Baroness Royall of Blaisdon Lord Scott of Foscote Lord Shutt of Greetland Lord Strathclyde B

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D Examination of Witness Witness: Lord Bhatia, a Member of the House of Lords, examined. Q1 The Chairman: Lord Bhatia, thank you for coming to this meeting, and I am sorry that we are running a little bit behind. You probably know all the members of the Privileges and Conduct Committee, but in case you do not we have provided name plates for them. You should also be aware that the two members of the Committee who also sit on the SubCommittee—that is, Lord Irvine and Lady Manningham-Buller—have excused themselves from taking part in any hearing or consideration of your appeal. You were, I believe, told that there would be a Hansard reporter present for today’s meeting. We are of course meeting in private, but they will be preparing a transcript for publication with the report. I see that you have brought your solicitor and counsel with you. You are welcome to consult them in the course of the meeting before answering your questions but, as you are aware, you will be expected to speak on your own behalf. The Committee is not empowered to hear parties through counsel. Would you like to introduce your advisers to the Committee? Lord Bhatia: Thank you, Lord Chairman. On my right is Mr William Clegg QC. On my left is my solicitor, Mr Matt Bosworth. Q2 The Chairman: Thank you. We have your written application for an extension of time, to which is annexed the grounds of your appeal. Earlier in this meeting we discussed your application for more time. We are of course conscious of the need to act fairly towards you, but after careful consideration we came to the view that two weeks was not an unreasonable amount of time in which to prepare an appeal, given the length of the report before us. We have therefore decided not to grant an extension of time. We are also conscious that the grounds for your appeal, though you may feel that they have not been developed as fully perhaps as they might have been with more time, are nevertheless set out very clearly and helpfully. We consider that we will therefore be able to come to a fair decision on your appeal with the documents we have before us today. So we will proceed with hearing your appeal. As you know, the purpose of this meeting is not to cross-examine you in detail but to give you a chance to present your appeal in person and to give members of the Committee the opportunity to clarify any uncertainties that they may have as to your grounds for appealing. I hope this meeting will not be too long, but there is of course no strict time limit. Would you like to begin by making any opening remarks? Lord Bhatia: Thank you, my Lord. I have a statement to make which I have prepared. If you will allow me to speak, I would like to do so. The Chairman: Please do so. Lord Bhatia: Lord Chairman, my Lords, thank you for inviting me to make a statement before your Committee. You will have seen my letter and a document prepared by my legal advisers on my behalf, setting out the grounds of my formal appeal. I am very concerned that if my application for extension of time to appeal is not granted, this may now be my last opportunity to set the record straight, so I am grateful to you for giving me the opportunity to make this statement. The last 15 months have been extremely difficult for me and my family. I have faced very distressing allegations by the Sunday Times about my conduct. These allegations are untrue. They are completely at odds with my conduct during my entire working life. They are also at odds with my core values and the principles by which I have always lived my life. My immediate and extended family, in particular my wife, and I have faced the public stress of inaccurate reports and suffered the very real strain of these proceedings. I deeply regret the fact that the House has had to undertake such a lengthy investigation into this matter. I would like to stress that I have always co-operated with the proceedings E

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Lord Bhatia 2. The proceedings of the Sub-Committee. You will have read the report of the Sub-Committee, and I am assuming you will be in possession of, and have read, the transcript of the proceedings which took place on 25 June 2010. I have grave misgivings as to the nature of these proceedings, which I believe to have denied me a fair hearing. To begin with, the hearing was described as an informal hearing. I was informed that I would be allowed to have my legal adviser present, but that he would not be allowed to speak on my behalf. There are some observations I would make about these proceedings. The process was extremely adversarial. I now refer to paragraph 8 on page 4 of the application for extension of time. In this paragraph, I have stated that, “the questioning of me was extremely hostile”. I would like to state that I was being polite in using these words. I was subjected to a two-hour ordeal in which 273 rapid-fire questions were asked, led substantially by the former Lord Chancellor. I had a feeling of being ambushed with a pre-planned set of questions designed to set me up for pre-formed conclusions. It would appear that this is not the first time the Sub-Committee has handled an investigation in this manner. I refer to the hearing on Lord Snape’s case on 11 May 2009. The transcript for that case shows that he makes a similar complaint: “my attendance at the Sub Committee, a 2-hour cross examination by the former Lord Chancellor, did not in my opinion or experience mean an informal crossexamination by any stretch of the imagination”. I was not accorded the normal rights of fair legal representation at such a hearing. The former Lord Chancellor is an eminent QC and I had to face a series of questions amounting to an interrogation, quite unsupported despite the presence of my legal adviser. I refer to my oral evidence transcript. Under question 94 on page 23, Lord Irvine asked me a question and as I turned to my solicitor sitting next to me to consult before I could reply, Lord Irvine said: “You cannot ask your solicitor for help”. I was astounded and shocked for two reasons: even as a layman I knew that I was being denied my rights, by a person no less than the former Lord Chancellor; but what was additionally surprising was that the chair of the SubCommittee did not intervene. From there on I felt very vulnerable and concerned and, to say the least, was shell-shocked. I felt at a considerable disadvantage in responding to the remaining questions that were put to me. I felt angry, upset and insulted that I was being treated in this manner. After the hearing was over, my legal adviser Mr Bosworth also expressed great surprise that the Sub-Committee would have allowed itself to fall into such a lack of fairness. I believe that the Sub-Committee had predetermined conclusions in its mind or, at the very least, did not consider any new facts. This is evident upon reading the transcript, but this mindset is also revealed by the surprising process that followed the

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of this investigation and will continue to do so until the matter is finally concluded. I met on two occasions with the Clerk of The Parliaments, Mr Michael Pownall, to respond to the complaints made against me by the Sunday Times, and was very perplexed that my case was referred to the SubCommittee while apparently similar complaints against other noble Peers were not upheld on the basis of their own assurances. I must stress my further dismay and disappointment at both the findings of the Sub-Committee and the process by which it arrived at its conclusions. There are six points I wish to cover. I will address them each in turn. 1. The response to my request for an extension of time to appeal. The sub-Committee met on 25 June 2010 and it appears that their report was finalised and submitted to the Committee on 28 July 2010. I received this report on 21 September 2010, almost two months later, and have been given just 13 days, including two weekends, to respond. When I corresponded with Mr Johnson, the Clerk to the Committee, about an extension of time to mount an appeal, he informed me that this was a decision for the Committee to make, and that if my request were denied, the Committee may well make a decision immediately. The report of the Sub-Committee was held for two months apparently for reasons of confidentiality, though I cannot see why it could not have been sent to me earlier. I refer to the Clerk of the Committee’s letter to my legal adviser, Mr Bosworth, dated 30 September 2010 in which he stated, “I cannot anticipate the Committee’s response to such a request and you should be aware that the Committee may, having considered Lord Bhatia’s application, decide not to grant an extension. In that event the Committee might decide to proceed without further delay to consider the Sub-Committee’s Report.” I feel very concerned that the allegations that have been made and the conclusions of the Sub-Committee are extremely serious and will have a devastating impact on me. I would only suggest that it ought to be in the interest of fairness and justice that I be given sufficient time to respond, unless of course this Committee were not to uphold the findings of the Sub-Committee based on my statement today. As I am sure you will understand, my legal advisers and I have reviewed precedents in terms of appeals and timings. We are aware that Lord Snape, in a different case, also complained about the limited time given to him to submit an appeal. I therefore believe I have no option but to supplement the grounds for my appeal already submitted and my covering letter with the statement today. I trust, my Lords, that you will have read my appeal documents and all the relevant papers, and your deliberations will be considered and not rushed. This process has been harrowing enough, so I welcome the opportunity to set the record straight.

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hearing itself, about which I still remain very concerned. After the oral evidence was taken from me on 25 June 2010, a transcript of the proceedings was sent to me for my comments and corrections. I forwarded my corrections and comments on 12 July 2010 by email at 14:10 hours to Mr Mackersie. There were a number of areas that needed correction. Surprisingly, the Sub-Committee sent me by email at 12:08 on 12 July 2010—that is, before my response had reached them—a document entitled “Members reimbursement scheme Investigation by the Sub Committee on Lords Conduct Draft report: Facts”. This implies to me that the Sub-Committee had already drawn their conclusions, based on their version of the facts without waiting for my comments or considering any corrections, some of which were very material to the case. This suggests that the SubCommittee could have drawn its conclusions without properly examining all the facts. I believe that I was not accorded the rights or safeguards outlined within the sub- committee’s own code of conduct, both in terms of recourse to legal support and, as clearly outlined in my grounds of the appeal, the standards applied as to the burden of proof. 3. The standard of proof applied to my case. I refer you to paragraph 7 on pages 3 and 4 of my application for extension of time. It is stated that, “as the complaint effectively amounted to an allegation of crime, the criminal standard of proof, namely that of being satisfied beyond reasonable doubt, ought to have been applied”. In my case the Sub-Committee, as evidenced in the report, has throughout the report based its conclusion on only the “balance of probabilities” threshold. This threshold seems inappropriately low. The Sub-Committee has already conceded that I had been at the Reigate property more than 30% of the time, at paragraphs 46 and 54, which exceeds the once-a-month threshold that the House Committee has already ruled is required. I do not see how the Sub-Committee could meet the standard and burden of proof in its findings against me in this matter. The House Committee has addressed this issue before. I refer to the transcript of the minutes of evidence taken before your Lordships’ Committee in the matter of Lord Snape on 11 May 2009. On the first page Lord Snape stated: ”The Sub-Committee in paragraph 19, my Lords, made it clear that its findings were based on a higher standard, and I quote, ‘falling just short of the criminal standard’ which they described as a ‘very high standard of proof’”. This inconsistent application of the standard of proof is a material error and amounts to a denial of justice for me. 4. The proceedings conducted by the Clerk of the Parliaments. I have, as you would expect, attempted to inform myself on other relevant cases. I have grave

misgivings as to the process conducted by the Clerk and the consistency with which the rules have been applied in my case. My legal adviser and I met with the Clerk twice. He was accompanied by his assistant at both the meetings. We had assumed, given the seriousness of the allegations, that notes would be kept by the Clerk. In the disclosure bundle supplied to us by the Sub-Committee, there were no notes of the two meetings. Bearing in mind that this was a serious allegation that he was investigating, keeping no record of the meetings casts doubt on whether the process was consistent and rigorous to enable him to draw the conclusion that mine was a serious and complicated case, which required him to pass the matter on to the Sub-Committee. A letter from Mr Pownall dated 21 October 2009, which was not included in the bundle of evidence and which alluded to the considerable pressures brought about by media interest that there was in progressing these complaints, stated—I shall quote part of the letter—“There, as I am sure you appreciate, are particular sensitivities about my investigations at the present time; and I am anxious to make progress.” If Mr Pownall had misgivings about the facts, these were supplied, including evidence that I have paid the rental and all the outgoings for the entire period. If he had concerns as to whether I had acted within the rules, I have met the threshold that he set and that the House Committee has itself endorsed, namely visiting the property more than once a month. I am perplexed as to why Mr Pownall felt it necessary to send my case to the Sub-Committee. I acknowledge that there have been considerable pressures on the House to investigate and conclude these complaints, but these cannot justify an inconsistent application of the rules. Similar complaints against the following noble Peers were not upheld, and were concluded by the Clerk on the basis of their own assurances on their honour that the declaration of their main residence was correct and that they had visited the same regularly: Baroness Barker, Baroness Morgan, Baroness Northover, Baroness Whittaker, Viscount Falkland, Lord Sheldon and Lord Rennard. Although their cases appear rather similar to mine, I have been subjected to a very stressful further investigation. I was asked the same questions by the Clerk as to whether I visited Reigate regularly, and I said yes. He asked me whether it was a minimum of one visit a month, and I said yes. He asked me whether I was saying this on my honour, and I said yes. I therefore remain concerned that inconsistent standards have been applied. 5. The application of the rules to the facts of my case and the issue of “good faith”. Given the seriousness of the allegations being made, I think it is important that the process considers the facts accurately and that subjective tests, introduced after the rules were initially put in place, are applied

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Lord Bhatia Reigate property and had previously been in communication with the House in relation to a move to Berkshire in confirmation of my intention to downsize. Finally, I draw the Committee’s attention to some of the highly subjective and new criteria that the Sub-Committee chose to apply in my case to establish good faith—for instance, the fact that I have no friends in Reigate, the fact that I have not changed my GP or chose to remain on the electoral roll in Hampton. These criteria are not relevant and, I might say, a little culturally biased. I am a man in my late 70s who came to the UK in my 40s. Many of my friends reside all over London or abroad or, indeed, have passed away. I have a reasonable attachment to my GP, who is known to my family, and did not wish to change this. I have to designate one place as my voting residence. Moreover, the last few years have not been the time to put homes on the market. All in all, I find that the Sub-Committee’s so-called “tests of good faith” appear to be highly subjective and inappropriate. It is not apparent that the status of friendships of other noble Peers was taken into account when disposing of their complaints. 6. The conclusions and recommendations of the SubCommittee’s report. I appeal against the conclusions and sanctions imposed, in particular the suspension from the House. I ask the Committee to take into account the fact that the Sub-Committee agreed that the designation of the Reigate property met all the prevailing criteria of the House Committee, save the fact of my act of my family obligation towards my brother in allowing him to stay there, in which case the principal complaint against me would have been dismissed. The sanctions in themselves are no small matter. Before applying them, I suggest that the House Committee must be sure of the following: that the rules have been applied in a consistent manner across similar cases, and that there is adequate evidence to this, and that undue weight has not been given to inappropriately acquired “facts” by unscrupulous journalists nor other external pressures; that the process I have had to undergo has been fair and has given me the protections and access to legal representation set out in the House rules; that the burden of proof applied to this situation is appropriate; that the material facts have been clarified so that conclusions cannot be drawn from them if they are in fact inaccurate. As some noble Lords may know, I am an active person who contributes to many community causes and charities. I refer you to my letter of 4 October 2010, Lord Chairman, in which I have stated my work in charities and communities over the past four decades in East Africa and the United Kingdom. My curriculum vitae, which I submitted to the Sub-Committee, has unfortunately not been part of the final report. I therefore wish to present it to your Lordships for your perusal, if you

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very carefully. This does not appear to have been the case. There are a number of points to be made here. First, the Sub-Committee concluded that I went to Reigate 30% of the time—paragraphs 46 and 54 refer to this. This more than meets the threshold put in place and endorsed by the House Committee. Secondly, it would appear that the Sub-Committee’s final conclusions were based in part on the premise that the Reigate apartment was for the benefit of my brother, Sultan Bhatia. They based this conclusion on an inaccurate fact. In paragraph 37 of the SubCommittee’s report, it says, “shortly before Lord Bhatia leased the Reigate property, Mr Sultan Bhatia separated from his wife and is now divorced”. The words “shortly before” are important words and reflect an inaccuracy upon which the Sub-Committee chooses to base its conclusion. The lease was taken from 1 March 2006. The divorce court papers of Sultan Bhatia show that he was separated from his wife on 3 July 2004, some 20 months prior to my taking up of the lease of Reigate property. The Sub-Committee sought to make a temporal link between the two events that simply is not there. It is mainly on this inaccurate assumption or information that the SubCommittee has declared that the Reigate property was leased solely for Sultan Bhatia. Surely if that be the case, and coupled with the fact that the SubCommittee has accepted that I spent 30% of the time in Reigate, which is above the minimum threshold of once a month, then the Sub-Committee has erred in coming to the conclusion that I did not meet the requirements. Having concluded that over the period of designation I had visited the Reigate property on 30% of weekends, the Sub-Committee then concluded that the designation failed to meet the criteria endorsed by the House Committee only because my brother also resided there. In any case, the proper application of the Sub-Committee ought to have considered my cultural and family obligations to my brother, which should have resulted in my designation being accepted and ought not to have excluded me from designating the Reigate property as my main residence when my brother stayed at the address to look after the property in my absence. Thirdly, I have grave concerns about the findings on issue three—the question of whether I have acted in good faith. Having concluded that the designation of the Reigate property met the criteria, had it not been for the fact that my brother shared the premises, a fact that ought to have been in my favour, the SubCommittee chose to ignore this. Furthermore, designation of a main residence is something noble Peers were entitled to do under the prevailing rules if the criteria were met. This was an objective test and the individual motivation of noble Peers is irrelevant. I also draw the Committee’s attention to the fact that insufficient account was taken of the fact that I paid, through a company I own, all the outgoings on the

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will allow me to do so. A negative outcome from this investigation will, as I am sure you know, negatively affect my reputation beyond the damage that has already been done. It may well affect my ability to continue this work and any other. I would strongly request and plead that before you apply such devastating conclusions and sanctions to my case, you consider whether the rules and proceedings of this House have been applied fairly to my case and whether I have been accorded the standard of justice this House could support. I have always acted in good faith and in accordance with the rules of the House in place at the time. I was not, and am not, motivated by financial gain. I have already taken steps to repay all the monies in question and, even though I have grave misgivings about the case against me, would if required be prepared to make a statement to the House. I ask the Committee to review the third sanction of a period of one year’s suspension as being disproportionate. I would wish to avoid any further protraction of this very harrowing process, and I therefore appeal to you to review the conclusions and sanctions that the Sub-Committee has chosen to impose on me. I reiterate my sadness at these circumstances and thank you once again for permitting me to make this statement. Q3 The Chairman: Thank you very much, Lord Bhatia. I hope we can have a copy of that statement. Lord Bhatia: I have brought copies of this for all the members. Q4 Baroness D’Souza: I understand that you have procedural concerns, but looking at the transcript of the Sub-Committee’s questions, it seems to me that the bulk of them were concerned with trying to establish facts that would allow them to understand that Reigate was your main residence. One of the things that still puzzles me in the transcript is that while you were able to give dates of travel to and from Reigate, you seem to be unable to give dates of your residence at Reigate, and that there was a continual confusion between those two. I wondered whether you could help explain to us how that confusion arose. If you have one set of data, maybe you should also have the other. Lord Bhatia: Thank you for bringing this to my attention. It is something that has focused my mind as well. I was trying to explain to the Sub-Committee that I found the rules governing travel allowances, in my view, not very clear and cumbersome. I am on record as saying that constantly my office and I—not me personally, because I have a PA who was constantly in touch with the Finance Committee of the House to check which rules applied for which purpose, et cetera—were guided throughout the proceedings by the staff of the Finance Committee. In the transcript you will have seen that I suggested

that the best way to understand what is going on here is to please refer to the Finance Committee and find out whether I was given that guidance or not. The Sub-Committee unfortunately just glossed over this and did not even ask me further questions or agree to go to the Finance Committee to find out what the facts were and whether I had been advised on what I had done. Q5 Baroness Royall of Blaisdon: Lord Bhatia, thank you very much. I am sure we all understand that this is a deeply harrowing process. I was very interested in what you said about your brother and the fact that his divorce came through in 2004. Lord Bhatia: No, I beg your pardon, his separation. Q6 Baroness Royall of Blaisdon: I beg your pardon, his separation took place in 2004. Obviously, much of the report from the Sub-Committee focuses on the fact that your brother looked after, or shared, your flat. Could you remind me, when you bought the property, did your brother live with you immediately? I well understand that you have a cultural obligation to look after your brother, but I wonder whether he lived with you immediately or was there some time lapse? Lord Bhatia: He did live with me immediately at the residence, but there were two reasons why I asked him to come there, both of which I articulated in the Sub-Committee proceedings. One was that somebody had to look after that flat while I was away, five days a week or four days a week, sometimes six days a week, sometimes all the weekends as well. It was really important for someone to be there. He actually did me a favour in looking after the flat for me. Secondly, it is a family obligation on all sides that requires my culture to look after our own. If I may add this, although it is nowhere in the Committee’s remit, in going through this harrowing experience I have realised the value of a united family, which has come together to support me. Most of the presentation that I am making to you is the work of my children who are professionals and have been working on this day and night over the past few days to be able to put together the documents before you today, simply because my solicitors and my QC did not have time to compile the procedures properly. Q7 The Chairman: Can I ask one question, Lord Bhatia? We are aware, and you have said again today, that you have transferred over £27,000 to the House of Lords—in other words, you have repaid the sum calculated by the Sub-Committee. Of course we welcome the fact that you have repaid the money and we have no wish to hold it against you in any way, but you will appreciate that by repaying the money, you might appear to have accepted the Sub-Committee’s

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Lord Bhatia for what it says. Thank you once again for coming to see us this afternoon. Q8 Lord McNally: Lord Chairman, are we going to receive Lord Bhatia’s statement now? The Chairman: Yes, we are. If you would like to give copies to the Clerk, he will pass them round. Lord Bhatia: Lord Chairman, do you wish me to give you my CV, which has been excluded from the bundle of documents given to you? The Chairman: Yes, we will take copies. We guarantee to print the statement that you have made just now, but we do not guarantee to print the CV. We will have to take a view on that. Lord Bhatia: I am completely in your hands on that, Lord Chairman. The Chairman: We will pass those round at some point, but I do not think we need to do that now. Lord Bhatia: Lord Chairman, may I be permitted to leave now, or do you want me to stay here? The Chairman: No, unless you have anything further to say, please leave. I thought I had said that, but thank you for coming anyway.

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findings on the first of these two important issues— namely, that you misdesignated the Reigate flat. Can I be clear, then, whether you continue to challenge the Sub-Committee’s finding as indicated in your appeal at paragraph 9, or have you, by repaying the money, accepted this finding? Lord Bhatia: Lord Chairman, could I ask my legal adviser? The Chairman: Yes, of course. Feel free. Lord Bhatia: I have repaid the sum on the advice of my legal advisers. I do not accept the three allegations or the sanctions against me. I have done this simply because I was advised to do so. The Chairman: Understood, thank you. Are there any other questions from members of the Committee? It appears not. Thank you for your detailed statement. The plan now is that we aim to publish our report setting out our conclusions and recommendations to the House later this week. The Clerk of the Committee will be in touch to make arrangements to provide you with an embargoed copy of the report an hour or two before publication so that you can have some time to prepare yourself

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