The Conduct of Baroness Warsi - publications.parliament.uk · THE CONDUCT OF BARONESS WARSI 1. Annexed to this report are reports by the Sub-Committee on Lords’ Conduct and the

HOUSE OF LORDS

Committee for Privileges and Conduct

3rd Report of Session 2012–13

The Conduct of Baroness Warsi

Ordered to be printed 26 November 2012

Published by the Authority of the House of Lords

London : The Stationery Office Limited

HL Paper 72

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2 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

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 Brooke of Sutton Mandeville Lord Eames Lord Howe of Aberavon Lord Irvine of Lairg Lord Laming Lord Mackay of Clashfern Lord McNally Baroness Manningham-Buller Lord Newby Baroness Royall of Blaisdon Baroness Scotland of Asthal Lord Scott of Foscote Lord Sewel (Chairman) 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 1228).

http://www.publications.parliament.uk/pa/ld/ldreg.htm

THE CONDUCT OF BARONESS WARSI

1. Annexed to this report are reports by the Sub-Committee on Lords’ Conduct and the Commissioner for Standards relating to a complaint against Baroness Warsi.

2. The Commissioner has upheld the complaint in respect of Baroness Warsi’s failure to register rental income in the Register of Lords’ Interests. Baroness Warsi has accepted the Commissioner’s finding and apologised; the matter has therefore been dealt with by means of remedial action and is now closed.

3. The Commissioner has dismissed the complaint in respect of her claims for overnight subsistence.

4. We make this report for information.


ANNEX 1: REPORT FROM THE SUB-COMMITTEE ON LORDS’ CONDUCT

1. The Commissioner for Standards has submitted the attached report upholding one part of a complaint made against Baroness Warsi and a self-referral by Lady Warsi.

2. The complainant alleged that Lady Warsi failed to register her interest as a recipient of an income of more than £5,000 from her property. Lady Warsi’s self-referral was in respect of allegations that she had improperly claimed for overnight subsistence allowance.

3. In accordance with paragraph 103 of the Guide to the Code of Conduct, the sub-committee agreed that the Commissioner might start an investigation on the basis of Lady Warsi’s self-referral. The sub-committee concluded that the time limit imposed by paragraph 111 did not apply with self-referral.

4. The Commissioner found Lady Warsi to have breached the Code of Conduct in respect of not registering rental income. Lady Warsi accepted this finding and the Commissioner agreed with her remedial action in the form of a letter of formal apology to the chairman of the sub-committee (which is reprinted as an appendix to the Commissioner’s report).

5. The Commissioner found Lady Warsi not to have breached the Code in respect of her claims for overnight subsistence allowance.

6. We welcome Lady Warsi’s acceptance that she breached the Code of Conduct and her apology for that breach. We do not consider that any further sanction is appropriate.

7. We recommend that the Committee for Privileges and Conduct should make a report to the House on this case.

3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 5

ANNEX 2: REPORT FROM THE COMMISSIONER FOR STANDARDS

Summary of the complaint

1. Following an article in The Sunday Times on 27 May 2012, Mr John Mann MP wrote to me later the same day (appendix A) making a complaint about the conduct of Baroness Warsi. Specifically, “her failure to declare her income in 2010” and “other aspects of her overnight claims in 2008”.

2. Mr Simon Danczuk MP also wrote to me on 27 May 2012 (appendix B), referring to media stories and asked me to investigate unspecified allegations. The clerk who assists me emailed Mr Danczuk on 1 June 2012 (appendix C) requesting that he specify particular matters that he would like investigated, and asking if he would provide evidence to support his complaint. Mr Danczuk did not make further contact and so I disregarded his letter.

3. The media coverage about Baroness Warsi resulted in several members of the public contacting my office, to express their views on the integrity of members and the sanctions imposed on those who broke the Code of Conduct.

4. On 28 May 2012 Baroness Warsi wrote to me (appendix D) inviting me “to examine the substance of the allegations” made against her.

5. I liaised with the Metropolitan Police Service on 1 June 2012; they said they were not conducting a criminal investigation in to the allegations made against Baroness Warsi. Thus there was no bar to an investigation under paragraph 112 of the Guide to the Code of Conduct.

6. I sought agreement from the Sub-Committee on Lords’ Conduct to initiate an investigation on the basis of Baroness Warsi’s letter of self referral. Paragraph 103 of the Guide to the Code of Conduct permits a member to request an investigation against him- or herself in exceptional circumstances. The Sub-Committee gave me their agreement and also endorsed my view that the time limit imposed by paragraph 111 of the Guide did not apply in the case of a self referral.

7. I determined that on the basis of both Mr Mann’s letter of complaint and Baroness Warsi’s letter of self referral there were two areas which required investigation. First, whether Baroness Warsi had failed properly to register all relevant interests in compliance with the Code of Conduct. Secondly, whether she had failed to act in accordance with the rules agreed by the House in respect of financial support for members.

8. Mr Mann’s complaint covered the alleged failure properly to register relevant interests and enabled me to review the situation from 26 May 2008. Baroness Warsi’s self referral enabled me to review her use of the “Members’ Reimbursement Allowance Scheme” without regard to the four-year time limit set by paragraph 111 of the Guide. However, I was only able to secure claims paperwork from February 2008 onwards. The House of Lords Finance Department had disposed of documentation from earlier months in compliance with its records management policy.

Key facts

Registration of interest

9. The first issue I investigated was the alleged failure by Baroness Warsi to register a relevant interest in the Register of Lords’ Interests. The Sunday Times


article on 27 May 2012 claimed that Baroness Warsi owned a flat in Wembley. The paper stated that they conducted overt inquiries on 19 May 2012 and that on 21 May 2012 Baroness Warsi “updated her entry on the Lords’ register of interests to state that she has a “flat in London NW from which rental income is received”.”

10. Baroness Warsi wrote to the chairman of the Sub-Committee on Lords’ Conduct on 22 June 2012 (appendix E). In that letter she confirmed that she had altered her Register of Lords’ Interests entry on 21 May 2012. She outlined the background to that decision: she had contracted to purchase the Wembley flat in August 2007. She subsequently moved in to the flat in late March 2008 and continued to live there until June 2010. She stated that the flat was valued below the threshold for registration. In view of her status as a Minister of the Crown she sought advice on the letting of the flat and was advised that she could do so. The flat was let in late 2010. The flat generated an income of £6,937 but Baroness Warsi stated that this resulted in a net loss of £324 in the tax year 2010/11. In the tax year 2011/12 Baroness Warsi believed that what she described as the “net income” would be less than £5,000. She stated that the Guide is silent on the concepts of gross and net income and accepted that if one worked on gross income the flat should have been registered with effect from February 2011. Her letter included the following paragraphs—

Due to an oversight, for which I take full responsibility, I did not address the question of whether the property needed to be included on the Register of Lords’ Interests when the rent came to exceed the £5,000 threshold.

Throughout the process, I have endeavoured to ensure the relevant authorities have been notified at all times. The fact that I owned, and was letting out, the flat was known to Cabinet Office, the Leader of the House, and HM Revenue and Customs. As soon as I became aware that the flat was not included on the Register of Lords’ Interests, I immediately informed the Registrar.

Claims for night subsistence

11. The second issue which required investigation was the allegation that Baroness Warsi breached the Code of Conduct in relation to her claims for “Night Subsistence”.

12. In response to my letter of 7 June 2012 (appendix F) advising her that I was conducting an investigation on the basis of both her self-referral and Mr Mann’s complaint, Baroness Warsi provided me with a statement (appendix G).

13. The relevant chronology, based on her statement, is that Baroness Warsi was invited to accept nomination to the House of Lords in July 2007. She accepted that invitation and started to make appropriate domestic arrangements. She arranged to purchase a flat in Wembley, putting down a deposit and exchanging contracts on 31 August 2007. She was incurring expense as a result of that purchase from 31 August 2007, notwithstanding that she did not complete the purchase until 28 March 2008.

14. In the period between being introduced to the House of Lords and moving in to her Wembley flat in late March 2008, she stayed at various locations in London, including hotels and a spare room of Mr Naweed Khan at .. Birkbeck Road, W3 6BQ.


15. Once Baroness Warsi moved in to her flat in Wembley there are no allegations that she incorrectly claimed reimbursement of expenses arising from her parliamentary duties. Thus, the focus of my investigation was the period October 2007 to March 2008. However, as highlighted above the only available documentary record of her claims was limited to the period February to March 2008. This period is also when it is alleged that she incorrectly made claims arising out of her overnight stays at .. Birkbeck Road.

16. The guidance approved by the House and available to members which applied during the period in question is contained in the Members’ Reimbursement Allowance Scheme General Guide – Sixth Edition – January 2007.

17. It is necessary to quote extensively from that document and associated material both to establish exactly what guidance was available to members and also, where appropriate, to highlight deficiencies. Paragraph 1.1.1 of the General Guide states—

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.

I would suggest that the above text is clear, in that members may be reimbursed actual expenses. Paragraph 1.2.1 states—

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.

The above paragraph makes it clear that reimbursement of actual expenses results in the amount claimed being free from income tax. Paragraphs 4.4.1 and 4.4.2 state—

Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London whilst away from their only or main residence ...

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.

18. The General Guide to my mind is quite clear, in that members can reclaim actual expenses but in relation to maintaining a residence in London they can claim the allowance in its entirety. However, when I turn to form ME1 (August 2007 edition), which was the relevant form filled in by members, including Baroness Warsi, at this time to claim expenses, the picture becomes less clear. Note (i) in the “Quick Guide” which was printed on the reverse of form ME1 states—

Night Subsistence – Members whose main residence is outside Greater London may claim expenses, within a daily limit of £165.50 (from 1 August 2007 to 31 July 2008), 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.

The word “actual” does not appear before “expenses” in the “Quick Guide”.

19. Baroness Warsi sets out her understanding of the Members’ Reimbursement Scheme in her statement. In particular she says, “I was informed during my induction about my entitlement to claim for overnight subsistence and other allowances ... I was told that it was accepted and standard practice to claim the full amount and to meet expenses from this. I was told that peers regularly found themselves out of pocket on a day by day basis and it was for this reason that everybody was encouraged to claim the full daily amount because the amounts claimed could be aggregated and averaged over a period of time.”

20. In response to Baroness Warsi’s statement, I wrote to her on 12 July 2012 (appendix H) seeking clarification on several points, including a request that she identify those individuals who provided the advice on “accepted and standard practice.” Baroness Warsi replied on 17 July 2012 (appendix I) and on this point commented—

I refer you back to paragraphs 7–9 of my statement. Lord Strathclyde, Baroness Anelay and other peers were involved in the induction process, as well as the House of Lords Finance Department. I cannot recall precisely which parts of the advice were received from which individual, but the overall advice I was given was clear and is detailed in my statement.

On the specific issue mentioned in para 8 of my statement, having worked all my life in the private sector, I thought it unusual that there was no requirement, nor any provision, to submit receipts. On this issue, I recall seeking advice from the Finance Department. I was told that no receipts, logs or records were required to be kept or submitted. Had I been required to retain such records, or been advised to retain such records, I would have done so.

21. I am conscious that this is not the first case to involve allegations that night subsistence was incorrectly claimed which has come before the Sub-Committee on Lords’ Conduct. In particular, the report on The Conduct of Lord Clarke of Hampstead in March 2010 (Committee for Privileges, 4th report (session 2009–10), HL Paper 112) seems especially relevant as it dealt with allegations that a member claimed for more overnight expenses than he had actually incurred.

22. In that case the Sub-Committee acknowledged the widespread uncertainty about whether the scheme was a reimbursement scheme or one which provided flat-rate amounts. The Sub-Committee received evidence that advice, in very similar terms to that cited by Baroness Warsi, was received by the member in question. In essence, the Sub-Committee determined that paragraph 4.4.1 of the Members’ Reimbursement Allowance Scheme General Guide (quoted above) permitted members to claim for reimbursement of expenses. However, paragraph 4.4.2 and the Quick Guide could be interpreted to allow a member to claim a flat-rate allowance in respect of the costs of maintaining a residence in London. The Sub-Committee concluded that in all the circumstances it could not find the member personally culpable of breaching the scheme.

23. I found the Sub-Committee’s decision and reasoning of great assistance. My starting point in this case was that the scheme was a reimbursement scheme and I looked for evidence of expenditure incurred. However, it is clear that from 31


August 2007 Baroness Warsi took on financial commitments in connection with the purchase of the flat in Wembley. That flat was purchased for the purpose of attending sittings of the House. Thus, there is an arguable case that she was entitled to a flat-rate allowance in connection with her commitment to purchase and maintain a residence in London.

24. I pursued the allegations about her nights spent at .. Birkbeck Road by means of interviews with both the owner of those premises (Dr Moustafa (appendix J)) and the individual (Mr Naweed Khan (appendix K)) whom she paid for the disruption occasioned by her nights at that address. However, in the light of the precedent set in the case of Lord Clarke of Hampstead and Baroness Warsi’s evidence, I came to the view that she had not breached the Code of Conduct.

Findings

Registration of interest

25. I am satisfied that Baroness Warsi was in breach of the Code of Conduct by reason of her failure properly to register the Wembley flat as a category 5 interest: that is, a property from which an income of more than £5,000 a year is derived. This failure is contrary to paragraph 10(a) of the Code of Conduct. Baroness Warsi has accepted that she should have registered this interest when the income derived exceeded £5,000.

26. The Guide to the Code of Conduct is clear that property from which an income of more than £5,000 a year is derived must be registered. There is no mention of gross or net income, but I am clear that gross income is the correct test and would be understood to be so by a reasonable member of the public. Baroness Warsi has acknowledged her failure to comply with the Code of Conduct but has highlighted her registration of the same property with other bodies, including the Cabinet Office. I have accessed the relevant Cabinet Office records and can confirm that she fully registered the flat with them. Thus, Baroness Warsi was not engaged in any comprehensive scheme to obscure her property interests and it should be noted that her failure to register her rental income did not result in any financial loss to the taxpayer, or additional monetary gain to herself. Nevertheless, the Code seeks to promote openness and accountability and the absence of monetary gain does not absolve members of the requirement properly to register relevant interests.

27. I am of the view that Baroness Warsi’s letter dated 22 June 2012 to the chairman of the Sub-Committee on Lords’ Conduct, together with her amended entry in the Register of Lords’ Interests, meet the requirement for remedial action as per paragraph 123 of the Guide. I respectfully recommend that no further action is required in respect of this breach.

Claims for night subsistence

28. In relation to the allegation that Baroness Warsi wrongly claimed night subsistence allowance, I am satisfied that she did not breach the rules of the scheme as it then was. I therefore dismiss this aspect of the complaint against her. The considerations which led me to this decision are as follows.

29. The scheme under which she made her claims was unclear—this judgement has been endorsed not only the Sub-Committee on Lords’ Conduct but also by the Review Body on Senior Salaries in its Review of parliamentary pay, pensions and allowances 2007 (Cm 7270-1, in particular paragraphs 6.9 and 6.10). I am unable


to differentiate between the case of Baroness Warsi and that of Lord Clarke of Hampstead, in which the Sub-Committee on Lords’ Interests (as it then was) did not find personal culpability, a view subsequently endorsed by the Committee for Privileges. In the case of Baroness Warsi, there is an arguable case that she was entitled to claim a “Night Subsistence” allowance towards the cost of maintaining a residence in London from the point where she took on contractual liability for her flat in Wembley and incurred financial costs by reason of paying a deposit. She has also put forward evidence of expenditure in relation her interim accommodation arrangements, even if some of that expenditure might not always be viewed as necessarily incurred. In any event, I cannot be satisfied that on the balance of probabilities that she breached the Code of Conduct.

30. I note that the House has agreed a new regime of financial support for members that is now in place. It cannot be satisfactory that any expenses scheme is widely perceived to be uncertain in its provisions. Thus, the current regime of financial support is, in my opinion, a major step forward. It is essential that members can operate under the financial support arrangements with confidence and that their operation command appropriate public confidence.

Paul Kernaghan CBE QPM

Commissioner for Standards

Appendix A: Letter from John Mann MP to the Commissioner, 27 May 2012

I am requesting an investigation into the behaviour of Baroness Warsi in 2007-08 with regard to her expenses.

Considering her failure to declare her income since 2010, an investigation is required into the other aspects of her overnight claims in 2008.

During this time the Lords had an overnight attendance allowance for sittings. This allowance was only payable for expenses necessarily occurred.

Having analysed the evidence from her landlord, it is clear that she never paid him. It is also significant that she does not identify which hotels she stayed in- citing two.

Considering that her expenses claim would constitute around 60 nights of hotel accommodation, her failure to identify the hotel indicates a possibility that she did not stay in hotels for the vast majority of this period.

If this is the case a clear fraud has been committed.

Any investigation on this is extremely simple: evidence of hotel payments for the appropriate dates and verification from the two hotels.

The second issue is her claim to have paid a special advisor for accommodation. Under HMRC rules, payments to a non landlord are not tax exempt and her advisor Naweed Khan would have had to declare this income in his income tax returns. Again this is verifiable. I have today written to HMRC on this matter.

You have a clear public interest duty to investigate: one minor discrepancy has undoubtedly occurred; one major issue remains unresolved.


Appendix B: Letter from Simon Danczuk MP to the Commissioner, 27 May 2012

Following stories currently in the media regarding Baroness Warsi and her expenses claims for accommodation.

I would like to formally ask you to investigate these allegations.

Appendix C: Email from the clerk assisting the Commissioner to Simon Danczuk, 1 June 2012

This is to acknowledge your letter to the House of Lords Commissioner for Standards, Paul Kernaghan, of 27 May 2012 about Baroness Warsi.

The Commissioner asks whether you would like to specify particular matters that you would like investigated, and whether you would like to provide evidence to support your complaint.

Appendix D: Letter from Baroness Warsi to the Commissioner, 28 May 2012

You will be aware of allegations in a number of newspapers this weekend that I made improper claims for overnight subsistence allowance in 2008 when staying in property owned by Naweed Khan, a member of the Conservative Party staff, and owned by Dr Wafik Moustafa.

I strongly reject any suggestion that my claims for House of Lords allowances were in any way improper. My claims reflected the fact that as a peer whose main home was outside London, I incurred costs when staying in London overnight to attend the House of Lords. These included payments to Naweed Khan for the inconvenience and additional expenses to which he was put when I stayed with him.

Nonetheless, in order to provide reassurance to the public that this matter had been considered dispassionately or independently, I would like to invite you to examine the substance of the allegations.

I assure that I, my staff and the Conservative Party will co-operate fully with any investigation.

Appendix E: Letter from Baroness Warsi to the chairman of the Sub-Committee on Lords’ Conduct, 22 June 2012

I am writing to you in response to press allegations concerning the registration of my ownership of a flat in North West London. You may be aware that I wrote to the Registrar of Lords’ Interests on 21 May 2012 to enter this flat on the Register of Lords’ Interests, six days before its omission from the Register featured in the press. I enclose a copy of that correspondence.

I contracted to purchase the flat for £270,000 in August 2007, shortly after being appointed to the Shadow Cabinet and invited to join the House of Lords. The flat was in the process of being built, and I was not able to complete on the purchase and move into the flat until the end of March 2008. From then until June 2010, the flat was my London residence, where I stayed in order to enable me to undertake duties in the House.

Shortly after becoming a Minister in 2010, upon security advice, I moved to another address. Due to depreciation, the value of the North West London flat at that time was below the threshold for registration (and remains so: I have received


professional advice that the property would currently sell for between £240,000 and £245,000).

After moving out in June 2010, and being informed that a sale of the property would result in a £30,000 loss, I sought advice from the Leader of the House of Lords on whether it would be permissible to let the property, and whether I would need to seek permission from any other Lords officials. The Leader suggested that as a Minister I should address these matters to the Cabinet Office, which I did, and obtained their agreement that I could let the property. Copies of this email exchange and the relevant entry on the register of Ministerial interests can be provided.

The property was first let in late 2010. At that time, both the value of the property and the income received were below the threshold for registration. In the tax year 2010/11, the net income derived from the flat, as included on my tax return, was a loss of £324, and the gross rent received £6,937. Although I have not yet submitted my tax return for 2011/12, I am confident that the net income from the flat will be less than £5,000. However, I appreciate that the guide to the rules is silent on whether the threshold for disclosure refers to net income derived or gross rent received. If it is the latter, then the flat became registrable in or around February 2011.

Due to an oversight, for which I take full responsibility, I did not address the question of whether the property needed to be included on the Register of Lords’ Interests when the rent received came to exceed the £5,000 threshold.

Throughout this process, I have endeavoured to ensure that relevant authorities have been notified at all times. The fact that I owned, and was letting out, the flat was known to Cabinet Office, the Leader of the House, and HM Revenue and Customs. As soon as I became aware that the flat was not included on the Register of Lords’ Interests, I immediately informed the Registrar.

I would sincerely like to apologise for any failure to disclose my personal interests in accordance with the rules of the House. If I can provide any further information please do not hesitate to contact me.

Appendix F: Letter from the Commissioner to Baroness Warsi, 7 June 2012

My letter to you dated 29 May 2012 refers.

Your letter to me dated 28 May 2012 invited me to investigate allegations that you had made improper claims for overnight subsistence. I liaised with the Sub-Committee on Lords’ Conduct and advised you that they had agreed that I could start an investigation on the basis of your request. I subsequently received a letter of complaint from Mr John Mann MP (copy attached) in which he alleges that you committed the offence of fraud in relation to subsistence claims.

I now intend to investigate your claims for overnight subsistence during the period October 2007 to March 2008. I also feel that it would be in everyone’s interest for me to investigate relevant entries in the Register of Lords’ Interests connected with your accommodation needs/ownership. I note your own reference to newspaper allegations and the Sunday Times specifically suggested that your Register entries were not always accurate and up to date. In particular they highlighted income from a property you rented out in London.

Paragraph 111 limits my remit to complaints made within four years of the conduct complained about. However, the Sub-Committee on Lords’ Conduct


have agreed with my interpretation that the time limit does not apply to matters self-referred to me.

In addition to Mr Mann’s attached letter of complaint, I also attach for your information and ease of reference copies of your expense claims (February, March and April 2008), together with a copy of “Members’ Reimbursement Allowance Scheme General Guide Sixth Edition – January 2007”. Copies of your expense claims prior to February 2008 were not retained by the Finance Department. If you hold copies of the relevant documents, it would be helpful if you copied them to me.

I should advise you that I have also received a letter of complaint from Mr Simon Danczuk MP (copy attached). However, I have written to Mr Danczuk highlighting that his letter contains no specific allegations or evidence. I have invited him to consider resubmitting his complaint in a more appropriate form. I am not taking any further action on the basis of his letter to me.

It appears to me that on the basis of the complaint and of your own invitation that you may have breached the following provisions of the “Code of Conduct for Members of the House of Lords”—

8. Members of the House:

(a) must comply with the Code of Conduct;

(b) should act always on their personal honour ...

9. Members of the House should observe the seven general principles of conduct identified by the Committee on Standards in Public Life. These principles will be taken into consideration when any allegation of breaches of the provisions in other sections of the Code is under investigation:

(a) Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.

(b) Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.

(c) Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.

(d) Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.

(e) Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.

(f) Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.


(g) Leadership: Holders of public office should promote and support these principles by leadership and example.

10. In order to assist in openness and accountability Members shall:

(a) register in the Register of Lords’ Interests all relevant interests, in order to make clear what are the interests that might reasonably be thought to influence their parliamentary actions ...

(c) act in accordance with any rules agreed by the House in respect of financial support for Members or the facilities of the House ...

13. Members are responsible for ensuring that their registered interests are accurate and up-to-date. They should register any change in their relevant interests within one month of the change.

In essence, the allegations against you suggest that you claimed overnight subsistence when either you had no basis for your claim, or that you claimed more than was appropriate. In addition, you failed to register your interests in an accurate and up-to-date manner as required by the Code of Conduct.

I now invite you to respond in writing with a full and accurate account of the matters in question. A response by 29 June 2012 would assist me in expeditiously progressing my investigation.

Appendix G: Statement from Baroness Warsi, 22 June 2012

I, SAYEEDA WARSI, the Right Honourable the Baroness WARSI, of the House of Lords, the Palace of Westminster, London WILL SAY:

1. I make this statement pursuant to my referral of 28 May 2012 to the Commissioner for Standards in the House of Lords, and which is set out in my letter to the Commissioner on that date. The matter which I have referred is my stay in part of a property occupied by Naweed Khan, at the relevant period a member of the Conservative Party staff, and which was owned by Wafik Moustafa. I occupied part of that property from time to time around February to March 2008. This statement is therefore confined to that period. This statement is also provided to the Commissioner for Standards for only one purpose, which is set out above. It, and the media on which it is produced, remain my property and I exercise my rights over them.

2. The facts in this statement are within my own knowledge and, I believe they are true; they are based on my recollection of events which took place over four years ago, and so I must state that they are accurate to the best of my recollection.

3. My principal residence, which is my family home, has always been in West Yorkshire. Before I entered politics, I qualified as a solicitor of the Supreme Court and after a period in private practice, I worked in the family business, a furniture manufacturer in Dewsbury.

4. In July 2007, I was invited by the Leader of the Opposition to be Shadow Minister for Community Cohesion and to become a member of the House of Lords. I accepted this invitation and was informed in due course that I was to be introduced in the House of Lords on 15 October 2007.

5. I began to look for a flat in London because it would have been impossible to travel to London from Yorkshire every day, and impractical to stay in hotels indefinitely. I found a flat in Wembley which was in the process of being built. I was told it would be ready by early 2008. I put down a 10% deposit of £27,000, made arrangements for a mortgage and exchanged contracts on 31 August 2007. I


paid for the deposit on the flat with money drawn down on a facility on the mortgage on my home in Dewsbury. I was therefore put to expense (interest) from that time onwards. I was incurring that expense during the period 31 August 2007–28 March 2008.

6. My normal pattern was to drive from Yorkshire on Sunday, stay in London until Thursday and drive back to Yorkshire.

7. I received no salary from my post in the Shadow Cabinet or the House of Lords. I was informed during my induction about my entitlement to claim for overnight subsistence and other allowances. I was informed that the purpose of the allowance scheme was to meet expenses associated with staying in London. I was told that it was the accepted and standard practice to claim the full amount and to meet expenses from this. I was told that peers regularly found themselves out of pocket on a day by day basis and it was for this reason that everybody was encouraged to claim the full daily amount because the amounts claimed could be aggregated and averaged over a period of time.

8. I was told that it was not necessary to keep logs, details, receipts or any other documentation of expenses incurred as these were neither required nor expected.

9. I used the overnight allowance as a contribution towards my costs for overnight accommodation and related expenses such as taxis, meals, dry cleaning, overnight parking and other miscellaneous expenses. I am confident that my aggregated spending on accommodation and other costs associated with staying overnight in London exceeded my claims for overnight subsistence allowance.

10. The completion date for my new flat kept being pushed back by the developers. Around early February 2008, Mr Naweed Khan who was a member of staff at Conservative Campaign Headquarters (he worked as Deputy Head of Cities and Diversity), told me that I could stay in the spare room at his place at .. Birkbeck Road, Acton, W3 6BQ, as and when I needed it. I accepted this offer, which was helpful. However, I was aware that it caused him some personal inconvenience. I felt it was only appropriate to make a payment which reflected this, and insisted that he accept payment, which he agreed to do. Legally speaking, I was his licensee, in the same way as I would have been if I had stayed in a hotel.

11. .. Birkbeck Road is a house on three floors: a ground floor, first floor and a top floor. Naweed occupied the top floor. The owner, Wafik Moustafa, occupied the ground floor and first floor. Naweed’s bedroom had an en-suite shower room, which was the only washing facility on that floor. Naweed had two spare rooms. The second floor had its own separate toilet, which was used exclusively by Naweed and his guests. From what I understand, he was allowed to use Wafik Moustafa’s kitchen, which was on the ground floor.

12. The only part of the house I used was Naweed’s part (that is, the top floor) and, very occasionally the shared kitchen. I did not cook there and never had my evening meal there. Naweed gave me a front door key to the house. I was not a tenant of Wafik Moustafa and had no agreement with him to occupy any other part of the house. At no point did Wafik Moustafa suggest to me that he objected to my staying with Naweed. Wafik Moustafa never asked me for rent and I never paid him any. We never discussed rent and he never treated me as a tenant.

13. Whilst at the property, I would occasionally see Wafik Moustafa, and on a number of occasions, when he was aware that I was in the house, he would invite me downstairs and introduce me to his friends; I obliged him as it would have been rude to ignore them. I formed the distinct impression that he called friends


round specifically when he was aware that I was staying with Naweed and liked to tell people that I was staying in the house.

14. I believe that I stayed in the Acton flat a total of twelve nights, over a period of around six to eight weeks. Although I cannot be absolutely sure, as I am dealing from memory, the reason that I think it was twelve nights is because I recall that the amount that I paid to Naweed was a total of £1,200. To the best of my knowledge, this was two cash payments of £500 and one of £200. I recall paying him £100 per night. The reason I paid this amount is because I had other expenses associated with staying overnight in London. I did not obtain any receipts because, as I have said, there was no need for me to do so.

15. My recollection is that some of these nights were during a recess period and that although I paid Naweed for each occasion that I stayed during recess, I was unable to claim any allowance from the House of Lords as the House was not sitting. The reason I recall this is because at the time I was a single parent, my daughter was on holiday from school, and I had no option but to bring her to London with me.

16. I did not stay in Acton every night I was in London during the relevant period. Sometimes, for example, I stayed in hotels.

17. When staying in Acton, I incurred the cost of taxis, evening meals, overnight parking, dry cleaning and other expenses on top of the accommodation amount. As already noted, I was also during this period and earlier, incurring interest charges for the deposit that I had put down on a flat which was not yet complete but was intended to become my London base.

18. I am confident that at all times, when aggregated over the relevant period, I incurred expenses associated with staying overnight to attend the House in excess of the amount I claimed as overnight subsistence allowance.

19. On Friday 28 March 2008, the purchase of my flat in Wembley completed and I moved in over the course of that weekend.

Dated this 22nd day of June 2012.

Appendix H: Letter from the Commissioner to Baroness Warsi, 12 July 2012

My letters to you dated 7 June 2012 and 27 June 2012 refer.

I have now obtained additional information relevant both to your self-referral and to Mr Mann’s complaint. I felt it would be appropriate to set out in some detail the issues which form the core of my investigation and to invite you to address directly these matters.

[A] Alleged failure properly to register property interest

I have obtained copies of your “ministerial interests return” documentation completed on 24 May 2010 and 19 April 2011. You also supplied me with a copy of your letter to the chairman of the Sub-Committee on Lords’ Conduct dated 22 June 2012. However, the copy letter supplied to me was not accompanied by the documents mentioned in the text (that is, a copy of your correspondence with the Registrar dated 21 May 2012). I also note your current entry (12 July 2012) in the Register of Lords’ Interests under category 5.

I should be grateful if you would supply the documentation mentioned in your letter of 22 June 2012 and also confirm whether the flat you locate in north-west London is the same flat as that located in Wembley.


I note that your Cabinet Office interests return dated 24 May 2010 shows a main residence in Wakefield and a second home in Wembley, London. It also shows one property valued at below £100,000 which was not then rented.

The return dated 19 April 2011 shows the same main residence but an amended second home in central London. The “Section 3: Investment Property” entry suggests there are two properties, both rented but only one address in Wembley is given. The Cabinet Office confirms that the entry is meant to show two properties are rented.

I would be grateful if you would supply the address of the other property and confirm that its purchase price was below £250,000 and that an income of less than £5,000 a year is derived from it.

I should highlight that I am conscious of personal security issues and any report I produce will have sensitive address information redacted.

In essence, I need to establish if you failed to register a property which should have been registered. I can deduce from your letter to the chairman of the Sub-Committee on Lords’ Conduct that you recognise that you did fail to register such a property but rectified the position on 21 May 2012. You state that whilst you failed to make the appropriate House of Lords’ registration you made a full declaration to both the Cabinet Office and Her Majesty’s Revenue and Customs. The information requested above will help establish the facts.

[B] Alleged improper claims for overnight subsistence

This issue was specifically raised by in your self-referral letter dated 28 May 2012. You mentioned allegations in the media about improper claims for overnight subsistence allowance in 2008. You then went on to strongly reject any suggestion that your claims were improper. You subsequently provided me with a statement in June 2012.

The Sub-Committee on Lords’ Conduct agreed that I could start an investigation on the basis of your request and that the normal four-year time limit doesn’t apply in cases of self referral. You have advised me that on 28 March 2008 you completed the purchase of a flat in Wembley and moved in over that weekend. Thus, the relevant period during which the question of improper claims for overnight subsistence commences in January 2008 and terminates at the end of March 2008.

The records management policy of the House of Lords Finance Department means that the only documentation I have been able to access is that in respect of your night subsistence (and allied matters) claims from February 2008 onwards.

The rules (applicable in 2008) covering the relevant aspects of financial support to members are set out in “Members’ Reimbursement, Allowance Scheme, General Guide, Sixth Edition (January 2007)” (hereafter referred to as the “Rules”).

Paragraph 1.1.1 of the Rules states—

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. The scheme rules are applied by the Clerk of the Parliaments who 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 reimbursement of expenses…

Paragraph 1.1.2—

Unsalaried Members 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 at Westminster – see section4.

Paragraph 1.2.1—

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.

Paragraph 4.4.1—

Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London whilst away from their only or main residence.

Paragraph 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.

I attach for your information and ease of reference copies of the claim forms (ME1) which were completed and submitted by you in respect of February and March 2008.

Mr Mann in his complaint makes reference to the use of hotels, as mentioned in newspaper articles.

Did you retain any records, or do you have any recollection, of which hotels you stayed in, the dates you stayed there and the amounts you paid to those establishments?

In your statement you say that you believed you “stayed in the Acton flat a total of twelve nights,” although, you could not be absolutely sure. The flat being located at .. Birkbeck Road, Acton. You go on to say that you use the figure of 12 nights on the basis that you recall having paid Mr Naweed Khan the sum of £1,200. You recall paying him on the basis of £100 per night.

I have spoken with Mr Naweed Khan about your stay at .. Birkbeck Road and he recalls receiving around £1,500 from you. His recollection is not precise. He indicated that from his perspective the payments which you made to him were in recognition and compensation for the inconvenience of your living at .. Birkbeck Road and the impact on his working hours and domestic routine. He made no payments to the owner of the house (Dr Moustafa), either generally or when you were staying. Thus, your presence did not impact on him in terms of rental or utilities charges.

I have also spoken with Dr Moustafa and, whilst he provides a different account of how you came to be living at .. Birkbeck Road, he also confirms that he received


no money from either Naweed Kahn or yourself arising from your individual occupation of .. Birkbeck Road.

In the light of paragraphs 1.1.1 and 1.2.1 of the Rules governing reimbursement of actual expenses, I invite you explain fully how payments made by you to Naweed Khan justify claims submitted by you. It would be helpful if you could, in addition to listing your nights in hotel accommodation, also list the nights you stayed at .. Birkbeck Road and for which you made payments to Mr Khan.

You mention at paragraph 7 of your statement that you were told about “accepted and standard practice” in relation to claiming full amounts of financial support and also “that everybody was encouraged to claim the full daily amount”. It would be helpful if you could identify the individuals (and/or the offices) who provided this advice, and the context in which it was provided. Equally, it would be helpful to know who provided the advice you mention at paragraph 8.

In relation to paragraph 17 of the same statement, a breakdown or estimate of the amounts spent on the headings mentioned would assist. In addition, what was the monthly interest charge associated with the deposit on your flat purchase? A prompt response would be most helpful.

Appendix I: Letter from Baroness Warsi to the Commissioner, 17 July 2012

Further to your letter of 12 July, you have asked for responses to specific requests detailed in your letter.

Page 1, para. 3

I enclose the exchange of emails with the Registrar of Lords’ Interests and can confirm that the flat in north-west London is that located in Wembley.

Page 1, para. 6

The address of the property is ..................................................... It was purchased in 2005 for £76,000. I can confirm that it is valued at less than £250,000 and the current gross rent is less than £5,000pa.

However with reference to para. 2, p. 2, to obtain a clearer position, I refer you back to my letter of the 22 June 2012, specifically para. 5. Given that the value of the property was below the relevant threshold, the issue turns on the matter on which the Guide to the Rules is silent, i.e. whether the income threshold refers to net income derived and received or gross rent.

Page 3, para. 4

Unfortunately, I do not have a recollection of precisely which dates I stayed in hotels, or indeed precisely which dates I stayed in Acton, but these would predominantly align with my attendance dates at the House of Lords, of which you have records.

I do not have an exact recollection of precise amounts paid, but the room rates were generally in the region of £70-110 per night, excluding breakfast, overnight parking and other miscellaneous expenses.

As detailed in my statement, I was specifically advised that there was no need or requirement to retain records, logs or receipts. If I had been required to retain these I would have done so.


Page 3, para. 8

Naweed Khan was a member of staff at Conservative Campaign Headquarters. The rationale for paying him was based on what I was paying at the time to stay in hotels. My stays at .. Birkbeck Road were therefore on a par with staying commercially anywhere else. I considered that it would have been inappropriate to do otherwise.

As I have said previously, I felt that it was important to compensate Naweed Khan for the inconvenience and additional expense to which he was put as a result of having a guest stay. To do otherwise could have been seen as taking advantage of a member of staff. I considered myself to be his licensee, and I therefore considered that it was appropriate to put these stays on a commercial arm’s length basis.

I was not aware of the financial arrangements between Naweed Khan and Wafik Moustafa and neither did I consider it my business to enquire into them. In any event, my payments to Naweed Khan were based on what I felt was appropriate and reasonable as a paying guest. I did not consider my overnight stays there as akin to staying with family or friends, but as an arm’s length commercial arrangement for which I was grateful at a difficult time when the completion of my flat had been delayed.

With reference to page 3, para. 6 of your letter, I would reiterate that I was not “living at” .. Birkbeck Road; I was staying intermittently over a period of around six to eight weeks. Having not had sight of Wafik Moustafa’s evidence, I am unable to comment on his account of how I came to be staying at .. Birkbeck Road, but by way of context, I would draw your attention to the widely-reported breakdown of the relationship between Wafik Moustafa and the Conservative Party earlier this year, which triggered these, and other, allegations.

Page 3, para. 9

I refer you back to paragraphs 7-9 of my statement. Lord Strathclyde, Baroness Anelay and other peers were involved in the induction process, as well as the House of Lords finance department. I cannot recollect precisely which parts of the advice were received from which individual, but the overall advice I was given was clear and is detailed in my statement.

On the specific issue mentioned in para. 8 of my state, having worked all my life in the private sector, I thought it unusual that there was no requirement, nor any provision, to submit receipts. On this issue, I recall seeking advice from the Finance Department. I was told that no receipts, logs or records were required to be kept or submitted. Had I been required to retain such records, or been advised to retain such records, I would have done so.

Page 4, para. 1

As you are aware, the overnight subsistence allowance is intended to cover expenses incurred in staying overnight in London and the headings referred to in my statement cover the same.

Working from memory and from recent enquiries, my calculations are as follows:

Room-rate: £70 – 110 / night Breakfast: £8 – 10 / day


Taxis to/from overnight accommodation: £25 (morning), £30 (evening) Evening meal: £10 – 20 / night Overnight parking: £8 – 20 / night Dry cleaning, including formal wear: £30 / week Interest on deposit on flat: £150-175 / month

(The interest rate used to calculate this figure is based on the rates charged by my then mortgage provider on the facility I used to pay the deposit and related purchase costs.)

As previously stated, I am confident that at all times, when aggregated over the relevant period, I incurred expenses associated with staying overnight to attend the House in excess of the amount I claimed in overnight subsistence allowance.

I look forward to receiving your response.

Appendix J: Transcript of the Commissioner’s interview with Dr Wafik Moustafa, 25 June 2012 1. The Commissioner for Standards (Mr Paul Kernaghan): Once again, Dr Moustafa, thank you very much for coming here this afternoon. I would be very grateful if you could give me your full name and address please. 2. Dr Wafik Moustafa: My name is Dr Wafik Moustafa. My home address is: .. Birkbeck Road, Acton, W3 6BQ. 3. Mr Kernaghan: Thank you very much. Is it correct that you featured in several newspaper articles concerning the London accommodation used by Baroness Warsi, that on 13 June you wrote to me stating that you would be happy to be interviewed by me and that I then contacted you and arranged today’s interview—namely, Monday 25 June at 1500 hours? 4. Dr Moustafa: That is correct. 5. Mr Kernaghan: I now invite and would welcome you to give your account of your dealings with Baroness Warsi in so far as they relate to accommodation owned by yourself. 6. Dr Moustafa: That is fine. I met Baroness Warsi in late ’06 or early ’07. I knew her vaguely before that because she stood for Parliament the same year as myself in 2005. I met her through Naweed Khan, who knew her a bit more. Naweed Khan at that stage was living at Lord Mohamed Sheikh’s house. I was not aware where he was living then, but I knew that he was fairly close. Naweed Khan was looking for a place to stay instead of going to Croydon where Lord Sheikh lives. I offered to him and said that he would be welcome. It was meant to be short-term¬—just a bit of help—but it became about one and a half years. 7. During that period, he asked me if we can invite Baroness Warsi—Sayeeda—to stay at my house. I said that I would welcome her. I met Sayeeda through bits and pieces—at party events and functions—and I welcomed her. She came to my


house and I offered her a room upstairs on the second floor. I offered her the key for my house. Indeed, the key is still with her, actually. I did not take it back. There was a reason for that. She left my house in March 2008 because she moved to her new flat in Wembley, for which I helped her with bits and pieces to move to the flat. 8. At that time, Naweed Khan was living as a guest free of charge—he was not being charged or asked to pay anything. The same rule applied to Sayeeda. She was not asked to pay anything, nor did she offer to pay anything. Sayeeda was free like myself or like Naweed Khan: she had got her key; she could invite people to meet in my house; she could please herself—I did not have any control over what she did. Occasionally, she would ring me or we would meet or I would take her out for dinner. She asked me to take her to a halal meat shop, a place in Hammersmith—I forget what it is called. It is near the cinema in King Street. It is called al-Mahdi or something. It is an Iranian halal restaurant. That is really about it. 9. Mr Kernaghan: That is fine. That is very helpful. I am going to ask you a series of specific questions, but they relate very much to what you have told me. I apologise in advance if they appear very simple, but they are quite important. 10. Dr Moustafa: I am very happy. 11. Mr Kernaghan: From what you have said, you are the owner of .. Birbeck Road? 12. Dr Moustafa: Yes. 13. Mr Kernaghan: And you lived there at the time Baroness Warsi was there and you still live there today? 14. Dr Moustafa: Yes. 15. Mr Kernaghan: Thank you. From what you have said, the only tenants you had, or people who were in the house other than yourself, were Naweed Khan and Baroness Warsi. 16. Dr Moustafa: Yes. There was a Chinese lady who stayed for a while as well, but that was nothing to do with them, actually. I always have people. As it happens, I have a large Victorian house and I always have guests in my house—before Sayeeda, after Sayeeda. I invite people I feel comfortable with. She was not an exception. 17. Mr Kernaghan: I appreciate that. You have said that you did not take any money from Naweed Khan. Let us just deal with him initially. So there was no tenancy agreement in terms of a written document. There was no rent book. It was just, as you have said, people come and go. You allowed him to live in your house. 18. Dr Moustafa: There was no tenancy agreement or anything of that nature. 19. Mr Kernaghan: I am assuming then that that would be exactly the same arrangement—or informal arrangement—with Baroness Warsi.


20. Dr Moustafa: Exactly the same. 21. Mr Kernaghan: Great. Thank you. When you gave your account, you highlighted that no money was received from Naweed Khan or offered. I think you equally said that no money was received from Baroness Warsi or offered. 22. Dr Moustafa: No money was received or offered from either Naweed Khan or Baroness Warsi. 23. Mr Kernaghan: Did either of them make any contribution in terms of the electricity or the hot water that they were using? 24. Dr Moustafa: Neither of them made any contribution. 25. Mr Kernaghan: In essence, you are the owner of the house and you were paying for all the utilities. Naweed Khan and Baroness Warsi at a certain stage occupied rooms in your house, but they did not contribute to the running of the house financially. 26. Dr Moustafa: Not at all. 27. Mr Kernaghan: Great. Thank you. I was going to ask you what you considered your relationship to be with Baroness Warsi in the context of her living in your property, but I think you are saying that you are very fortunate to own quite a large house and that, from your own generosity et cetera, you have allowed people to stay in your house at various stages. 28. Dr Moustafa: Exactly. It was not for any other reason. 29. Mr Kernaghan: Did you consider Baroness Warsi to be a sub-tenant or a licensee of Naweed Khan? 30. Dr Moustafa: No. I found that written in the newspapers, but I do not believe the story. 31. Mr Kernaghan: Let us ignore stories et cetera in the media. At the end of the day, you are the owner of that house. You have recounted that Naweed Khan approached you about inviting Baroness Warsi to live there, but the relationship was that you had a relationship with Naweed Khan¬—he had permission to live in your house. Do you think that Baroness Warsi accepted his invitation to live in that house, or did she accept your invitation? 32. Dr Moustafa: It was at my invitation. He just gave me the introduction. That was not over a day or two but probably over two weeks or so. It was purely my invitation. 33. Mr Kernaghan: Thank you for that. You have very kindly answered all the questions that I have. Are there any last comments or thoughts that you would like to share with me? 34. Dr Moustafa: The only thing I know is that Baroness Warsi is aware that Naweed did not pay any rent to me.


35. Mr Kernaghan: You are saying that she was aware that he had no financial relationship with you. 36. Dr Moustafa: Yes, she is aware of that. 37. Mr Kernaghan: How was she aware, or why do you say that? 38. Dr Moustafa: Because we discussed it. 39. Mr Kernaghan: So you have had a discussion with Baroness Warsi and she was aware that Naweed Khan was making no financial contribution to the house. 40. Dr Moustafa: Yes. 41. Mr Kernaghan: Thank you very much indeed, Dr Moustafa. Thank you for coming in and sparing the time.

Appendix K: Transcript of the Commissioner’s interview with Mr Naweed Khan, 3 July 2012 1. The Commissioner for Standards (Mr Paul Kernaghan): Mr Khan, just for the record, I am taping this interview and, as I have said, I will supply you with a full transcript of the interview. I am now going to invite everyone in the room to identify themselves for the purposes of the tape. It sounds very formal, but it helps the people who are preparing the transcript. My name is Paul Kernaghan. I am the Lords Commissioner for Standards. 2. Mr Nicolas Besly (clerk): I am Nicolas Besly, and I am the clerk who assists the Commissioner. 3. Mr Khan: I am Naweed Khan. I am currently the special adviser at the Cabinet Office. 4. Ms Jessica Cunniffe: I am Jessica Cunniffe and I am a colleague from Conservative Central Office. 5. Mr Kernaghan: Thank you very much. At the outset, let me say that I am grateful to you, Mr Khan, for agreeing to come in and speak to me. Just to set the scene, although I know you will be very familiar with this, a complaint has been received in respect of Baroness Warsi in relation to the House of Lords Code of Conduct and, indeed, Baroness Warsi has herself self-referred to me, and the Sub-Committee on Lords’ Conduct has agreed that I can investigate on the basis of both her self-referral and, indeed, the complaint. The issue seems to relate to a particular area, where I am looking for assistance from you, in relation to property and accommodation in London. I have a series of questions which I would be very grateful if you could address. Equally, if at any stage you want to clarify or expand, I am grateful for that information. But it is a fairly narrow investigation. I am not looking for the full background, just information related to specific points.


You have identified yourself as Naweed Khan. Can I ask you whether you have lived at .. Birkbeck Road, Acton, W3 6BQ? 6. Mr Khan: Yes, I did. 7. Mr Kernaghan: Thank you. Can I ask you: what was the basis of your occupation in terms of rent, a rent book or a rental agreement? 8. Mr Khan: I did not have a rental agreement. I did not have a rent book. The owner was a friend of mine who I had met in 2005 during the general election. We developed a friendship and he invited me to come and stay with him in early 2007, and I eventually moved in in mid-2007. 9. Mr Kernaghan: And that friend, the owner of the property, was Dr Moustafa. 10. Mr Khan: Yes. 11. Mr Kernaghan: Thank you. I am sorry, when did you say you moved into the house? 12. Mr Khan: In the middle of 2007, possibly June or July. 13. Mr Kernaghan: Thank you. When did Baroness Warsi move into the house? 14. Mr Khan: She did not “move in”. She stayed a few days. Again, it would have been in 2008. I am going to be really honest and say that I cannot be specific on dates and stuff like that, but it was probably a couple of weeks before Valentine’s Day or something. But, again, it could have been the back end of January, or it could have been February. 15. Mr Kernaghan: Right, I see. From the best of your recollection, it could have been late January or early February. That is the time window. Interestingly, when I asked, “When did she move in?”, I think you in a sense queried that and said, “Well, she stayed a few days”. What I mean by “moved in” is: when was the first time she occupied a room in the house? 16. Mr Khan: Yes. When someone says “move in”, I expect them to bring their luggage in and to move in. That certainly was not the case. 17. Mr Kernaghan: How often did she live there? 18. Mr Khan: I would say, some weeks, maybe one or two days, or some two or three days. It was an irregular pattern. 19. Mr Kernaghan: I understand that. Did she make any payments to you or to the owner, Dr Moustafa, for staying there? 20. Mr Khan: I do not know what conversations she had with Wafik, but she did make payments to me. 21. Mr Kernaghan: Right. Can I ask you about the quantum of those payments?


22. Mr Khan: It was certainly less than £2,000, maybe around £1,500. I cannot be absolutely saying to you that it was this pound and that pence, but it was definitely less than £2,000—maybe around £1,500, maybe a bit less, maybe a little bit more. I do not know. 23. Mr Kernaghan: Right. I think what you are saying, but please correct me if I am putting words into your mouth or I am misinterpreting what you have said, is that you cannot give a precise figure. You seem reasonably happy that it was less than £2,000, probably around £1,500, but again you cannot be precise. 24. Mr Khan: I cannot be precise. 25. Mr Kernaghan: Right. Can I ask you: what was the basis or rationale for those payments? 26. Mr Khan: She stayed for a few days and she offered. She said, “Please take some money for my stay.” I did not ask for it. I said “No”, but she insisted. She said, “I have put you out for the last few days. This is what I would have spent anyway. Please take it.” 27. Mr Kernaghan: Right. Can I ask you, what did you use those payments for? What did you use that approximately £1,500 for? 28. Mr Khan: Going back, when she came to stay with me, it completely changed everything that I would do. So she would normally tell me, “Can I stay tonight and tomorrow?”, but it meant that I had to stay in Westminster to go back with her because it is in Acton and nowhere near the tube station. It is probably not the safest place from the tube station to the house. You know, in the context, she was probably having a really difficult time anyway. But it meant I would have to stay, even though I finished work at 5 pm or 5.30 pm, I would have to stay until she finished in the Lords and then travel back with her. So that was five or six hours extra of staying in Westminster for myself—drinks and hanging out around here. Subsequently, when we got back, we would—she would retire, but she would leave in the morning. She would knock on my door to use the shower because she used my shower in my room. I would have to leave my room for her to do that and go downstairs. So where I normally would wake up at half past seven, I now had to do that at six. I was then leaving the room and going downstairs. Maybe, I usually thought, you know, extra breakfast and things. It completely affected my routine. 29. Mr Kernaghan: Can we just pause for a moment? We have started to talk about late January or early February 2008. What was both Baroness Warsi’s status at that point in time and, specifically, what was your status in terms of employment? 30. Mr Khan: I worked for the department for external relations and I was the— 31. Mr Kernaghan: I am sorry. The department for external relations. I take it you mean as part of the Conservative Party? 32. Mr Khan: Yes. I worked for the Conservative Party. I was a full-time member of the Conservative Party. I was deputy head of a department called cities and diversity. She—as in Sayeeda, Baroness Warsi—was the vice-chairman of the


Conservative Party. One of her portfolios was cities and diversity. That was the relationship. She was a political boss but not a line manager. 33. Mr Kernaghan: She was the vice-chairman of the Conservative Party and you were a full-time, paid employee of the Conservative Party. That is fine and helpful. When I asked you about the rationale, you gave an example of going back late in the evening because you were not particularly confident that she should be walking back in that part of London in the evening. I think that is what you have indicated. What did you use those payments for? What did you use that £1,500 for? 34. Mr Khan: I mean, I cannot—you know—I genuinely cannot remember exactly how I spent that money, but then again I could not tell you how I spent £200 last week, as an example. It would have been to pay for food for myself, to pay for drinks with friends and things like that. Maybe there would be a bit of food in the house. 35. Mr Kernaghan: That is fine. Can I ask you: did you make any payments in turn to Dr Moustafa? 36. Mr Khan: No, I did not. 37. Mr Kernaghan: Right. 38. Mr Khan: Wafik, as I said at the outset, was a friend of mine at the time. He treated me like his younger brother. He always said he was there to help and support me and made me feel as an honoured guest. He got very uncomfortable and he refused to talk about money. He was genuinely a friend. 39. Mr Kernaghan: Who covered the additional—it may have been marginal, but it was obviously additional—heating and lighting costs when you have somebody else in the house? Were there any payments or transactions to cover that additional cost? 40. Mr Khan: I did not pay Wafik, no. 41. Mr Kernaghan: Ok. 42. Mr Khan: But he never at any point asked for any money. He made it very clear that he treated me like a younger brother. We went on holiday together in April 2008 and I lived in the house for another seven months after that. I did not move out until November 2008. It was not just this period. It was from about June or July 2007 through to November 2008, the back end of November 2008. We ate together, we holidayed—you know—we were friends. 43. Mr Kernaghan: That is helpful. Thank you for that. Did you declare any of these payments to HMRC? 44. Mr Khan: I did not see the need to at the time, but I have subsequently spoken to HMRC and written to them saying when is it an appropriate moment. 45. Mr Kernaghan: So you subsequently highlighted the payments to HMRC.


46. Mr Khan: Yes, saying how do I draw down from expenditure as a result of it and what is it classified as. I think the advice I got was about rent relief anyway because that was the place I was living in most of the time. I have written to them and, depending on what they write back, will subsequently pay any penalties. 47. Mr Kernaghan: I— 48. Mr Khan: I just want to put it into context— 49. Mr Kernaghan: Yes, please. 50. Mr Khan: Sayeeda is one of the most generous people that I know. We love it when it comes to Christmas. We absolutely get loads of presents, both members of her team, both us in the Government and her team at Conservative headquarters. We have a joke in our office: “Please make sure we have our meetings around lunchtime or dinnertime near the House of Lords Bar because she will buy coffees”. It was unsurprising for her not to be very generous and offer things. Again, I would not—it became, when she offered, I said, “No, no, it is fine,” and she insisted. It was very difficult for me to— 51. Mr Kernaghan: I think you have been very open and transparent. Obviously I would put it to you that there was money that came from Baroness Warsi to you, and you have highlighted her generosity et cetera. Equally, you have highlighted that there was a degree—I use the word advisedly—of inconvenience for you when she was also residing in the house. You had to vacate your room so that she could use the shower facilities. 52. Mr Khan: At six o’clock in the morning rather than getting up at 7.30 am. 53. Mr Kernaghan: I was not even going to highlight the hour of the day, but equally— 54. Mr Khan: And also waiting for five hours in Westminster. 55. Mr Kernaghan: Yes, but what I am trying to say is that the payment appeared to be for your support—be it the escort, be it inconveniencing your domestic routine—as opposed to being in respect of actually occupying the accommodation. 56. Mr Khan: Well, she did, because she had said, you know, “This is what I would end up paying at a hotel, so please just take it. I am sorry that I have put you out. Please take it.” I chose to use that money to buy dinner for friends and stuff like that, but it was because she said, “Look, I would have used that money wherever I was going to stay, so please just take it.” That is why she made the offer. It was very difficult for me to say no. 57. Mr Kernaghan: I appreciate that it is very difficult for you to know the answer to this, but do you think she felt under an obligation to you because she was occupying a room in the same house as you? 58. Mr Khan: That is something you would have to ask her. I do not know. She made an offer saying, “Look, I have stayed here this many nights. Please take this money.” I accepted it. I mean, in hindsight—


59. Mr Kernaghan: As I say, I just want your honest account. It is very helpful. So then, if I have it correctly, Baroness Warsi subsequently left the room in the house, a separate room she had, and then I think you have told me that around November 2008 you left the house as well. 60. Mr Khan: Yes. 61. Mr Kernaghan: Did you get your own flat? 62. Mr Khan: Yes. I moved to Kennington where I have been ever since. I am with my mates. It is a 15-minute walk to Parliament, CCHQ and the Cabinet Office. No one-hour tubes, no nothing, although it takes a big toll on your shoes. 63. Mr Kernaghan: I appreciate the joys of living in inner London, with its convenience for Westminster. I think it is sometimes referred to as the Westminster village. 64. Mr Khan: It means that when you are working and it is 10.30 at night or you go for a drink after work—because inevitably you drink at the Marquis of Granby; Nick probably knows this—it is easy and you can walk home. It is cheaper than cabs. 65. Mr Kernaghan: That has covered the areas that I was seeking your assistance on. Is there anything else you would like to tell me that you think would be helpful? Equally, you may not think that anything else is relevant, but I would like to give you a final opportunity to supply any information you feel is relevant. 66. Mr Khan: I did not know about—I did not deal with Sayeeda’s—because I did not work for her. I work for the Conservative campaign headquarters. I was not employed to work for her, so I did not know anything about the Lords, how it worked or anything like that. I was doing a very political job on cities and our urban renewal policy and stuff like that. The other thing is, Sayeeda was around for a lot longer after she had moved in 2009/2010 in terms of because I had friends in the area and stuff like that. So from, I would say, her being in London from July 2007 from the Ealing by-election—the Ealing Southall by-election onwards—she was around the area and stuff like that. We would have dinners and stuff like that with friends. It is not, you know—her period in the house is only a small part of the period that she was around the area. 67. Mr Kernaghan: I recognise that. My remit is very narrow and I will be very clear with you. I am looking at issues of accommodation et cetera. The wider context is outside my remit. 68. Mr Khan: Yes. The reason I say that is because, you know, Dr Wafik Moustafa joined us for dinner and stuff like that. What I am saying is that her friendships—you know, with the Ismaili community in particular and the Aga Khan community—is not relevant, but it is wider than her relationship there. 69. Mr Kernaghan: You have just explained in your remarks that you were a full-time official in the Conservative Party. What was the process of moving from that to become a special adviser?


70. Mr Khan: When I moved out in November to December 2008, there was restructuring within the Conservative Party— 71. Mr Kernaghan: We do not need to know the party secrets, I can assure you. 72. Mr Khan: There was restructuring. I left my job as deputy head of cities and diversity in one department and moved across to the Conservative research department, where I became a desk officer or special adviser in the Conservative research department. I covered a wide brief which included immigration, home affairs and DCLG. So I worked, in opposition, on policy and everything and on our manifestos for our Shadow Home Secretary, who at that time was Chris Grayling, I think, and Caroline Spelman in DCLG, and then all the subsequent Shadow Cabinet Ministers. So my relationship on a professional level remained with Sayeeda, because she was one of the Ministers that sat both as a member of the Cabinet and as a member of the shadow home affairs and DCLG team. So I still maintained a professional relationship and subsequently wrote speeches and policy documents. I went and met police officers and talked about what they thought we should be doing. Obviously not all of it was being delivered at that time. Then subsequently, after the general election, I was a full member of the Conservative research department with colleagues like Sheridan Westlake, who is now at DCLG, or Denzil Davidson, who is now at the Foreign Office. Lots of us in the Conservative research department were offered jobs in government that either mirrored our portfolios in opposition or subsequently other portfolios. I was one of the lucky ones. I mean, I had worked for the Conservative Party since 2003, so I had done seven years—the general election in 2005 and the general election in 2010—and I was one of the, I would say, fortunate ones. Hopefully, to anyone who is still there. 73. Mr Kernaghan: That is interesting. Thank you for that. Nick, are there any questions or points you would like to make? 74. Mr Besly: No, I do not think so. Thank you. 75. Mr Kernaghan: Thank you. At this point I will turn off the tape.

Documents

The Conduct of Baroness Warsi - publications.parliament.uk · THE CONDUCT OF BARONESS WARSI 1. Annexed to this report are reports by the Sub-Committee on Lords’ Conduct and the