Officials 'gave MP mortgage advice'

MPs get help paying for London homes

Parliament's officials advised a Tory MP over his mortgage, it has emerged.

Conservative MP Michael Trend, who faces suspension from Parliament over "muddled" allowances claims, says he was advised on what sort of mortgage to take out.

MPs from constituencies outside London can claim the rent or mortgage interest payments for accommodation in the capital.

In theory, endowment mortgages would allow someone to buy a home for less money over the life of the mortgage - although more than half of such policies are now showing shortfalls.

Advice assertion

Mr Trend gave details of the advice to the parliamentary standards commissioner, Sir Philip Mawer.

He said: "The Fees Office advised me that, because mortgage interest was an expense properly chargeable against the allowance, I should go for an endowment mortgage rather than a repayment mortgage."

Archie Cameron, director of operations in the Commons Finance and Administration Department, told Sir Philip he was unable to say whether or not the advice had been given.

Mr Cameron told Sir Philip none of his staff were qualified to give financial advice and realised that restriction.

In his report, Sir Philip says: "Mr Trend has made clear to me ... that he never intended to imply that he had received financial advice in this sense from the department's staff.

"What they did do, in an attempt to be helpful, was advise Mr Trend on what would be reclaimable under the allowance.

"Mr Cameron accepts that a conversation of that nature and about what might have been most convenient for the member, would not have been inappropriate and could have happened."

Wrong

Liberal Democrat MP Norman Baker said the Fees Office tried to be as helpful as possible to MPs - something which deserved praise.

It was also up to MPs to decide whether they acted on such advice, he said.

"I personally think it's wrong that MPs should be allowed to buy properties with the London allowance," Mr Baker told BBC News Online.

He suggested such London homes instead should be rented.

Checks system

But it was perfectly legal for allowances to be used for mortgages, said Mr Baker.

That meant it was not improper for the Fees Office to give such advice - instead the system was wrong, he added

On the details of the case of Mr Trend, who has paid back wrongly claimed more than £90,000 worth of expenses, the Commons standards and privileges committee raised other concerns.

It was worried the case was not picked up by the normal scrutiny system. It came to light through newspaper reports.

MPs on the committee backed Sir Philip's suggestions for strengthening the system for ensuring allowance claims are accurate.