MP defends living arrangements

By Emily Pearce

Thursday, November 15, 2012

 

MP ANDREW Turner has denied claims he was milking the system by profiting from his living arrangements.

Since he was named by the Daily Telegraph as one of 27 MPs who claim expenses to rent homes in London while simultaneously letting property in the capital, Mr Turner has been accused of exploiting a loophole in the system.

As reported by the County Press, he claims expenses to rent a one-bedroom flat in Victoria and owns a one-bedroom flat in Kennington, which is let to a tenant.

But Mr Turner said he had not profited from the Kennington flat and costs such as ground rent, maintenance and agency fees paid since the 2010 election had actually exceeded the income by more than £11,000.

This was confirmed by his financial adviser, Michael Ward of Ward House Financial Services in Ryde.

In response to concerns raised by the Isle of Wight Conservative Association about potential profits from the future sale of the flat, Mr Turner said it would be 'some years' before the deficit was made up.

Under parliamentary rules he would have to pay capital gains tax on the sale of any property he owned and had claimed allowances for, he added.

Mr Turner previously used the Kennington flat while at Westminster, before the system was changed following the expenses scandal. MPs are no longer permitted to claim for mortgage interest payments, only for rent and associated expenses of up to £20,000 a year.

The change in the system led him to find a tenant for the Kennington property and he moved into a rented property in Victoria, which he could claim for under the new rules.

However, Mr Turner said he could have continued to claim for mortgage interest payments on property he owned for two years under transitional arrangements — before the new rules were introduced — but had not done so because it was against the wishes of the electorate.

He and his partner, Carole Dennett also own a flat in Cowes, which is let, and a house in Newport, formerly registered as his second home and subject to expenses claims of more than £80,000 in the four years prior to the scandal.

The Victoria flat is the only property Mr Turner now claims expenses on.

Reporter: emilyp@iwcpmail.co.uk

See his statement full below and a letter from his financial advisor Michael Ward here.

"I jointly own a leasehold one-bedroom flat in London, which I bought in 2002 for the purpose of staying in London in order to represent Islanders. The flat is mortgaged and there are other costs including service charges, ground rent and maintenance and repairs payable to the management company.

"I have made no profit on renting out the flat (as has been alleged recently in Keith Newbery's column and the letters' page in the County Press) as those expenses have far exceeded the rental income. In addition I pay fees to a rental agency for finding a tenant and managing the tenancy.

"Since the election in 2010, the total outgoings have exceeded the income by more than £11,000. It will be some years before that deficit is made up.

"I have made all my personal financial records relating to the flat available to Michael Ward, of Ward House Financial Services in Ryde, a long standing and well respected independent financial advisor, and asked him to comment on them.

"MPs re-elected in 2010 could continue to claim mortgage interest and other payments on their own property for two years before moving to the new expenses system. However, during the election I promised Island electors that I would move to the new arrangements as soon as possible, and I did so immediately after being elected.

"In answering some questions raised recently, I have looked for the first time at the details of those transitional arrangements (which I never took advantage of and never intended to). Because they were put in place to support MPs in carrying out their parliamentary duties in Westminster I assumed that they would be payable only in respect of London properties. I was surprised to find that if I had taken advantage of those arrangements I would have been able to claim for mortgage interest and other expenses on my home in Newport until September this year. In my view it was right to move away from the old scheme of claiming money on property I own in 2010 and it was certainly what many electors told me they wanted.

"In respect of any long term increase in property values, David Cameron announced in 2009 that all Conservative MPs must agree to pay Capital Gains Tax on any property they owned and on which allowances had been claimed. That decision was subsequently confirmed by the parliamentary authorities and now applies to all MPs. That will provide a return to the taxpayer for mortgage interest and other payments that were supported by public funds. I have undertaken to make the appropriate declarations and payments to HMRC and for clarity I can confirm that no public funds have gone towards the purchase price of any property I own.

"I now stay in a rented one-bedroom flat in London and this is the only property on which any public money is spent. I do not rent from or to another Member of Parliament.

"For the record I also own a share of a small flat in Cowes; that property is also mortgaged and rented out, and no public money has ever been claimed on it. I jointly own my home in Newport and the mortgage and all other costs are paid personally except for the period from 2005 to 2010. During that time expenses were claimed on that property in accordance with the rules in force then. I will therefore also be liable to pay Capital Gains Tax on my home as well. These property interests are fully declared on the Register of Members’ Interests which is a public document.

"I am a full-time Member of Parliament and I am not engaged in any other employment, although related to my job I am sometimes asked to complete opinion surveys for which I am paid sums which range from £25 and occasionally, up to £250. That money is donated to charity.

"It is also widely known that MPs have many opportunities to travel abroad at public expense. That includes up to three trips a year to EU destinations, and frequently much further afield. I choose not to take advantage of those opportunities. I travelled to Lisbon once in 2002 to meet Portugal’s Minister for Tourism. That trip was for a serious purpose (although it was cut short by the recall of Parliament following the death of the Queen Mother), but I decided afterwards that it would be easy for such journeys to be misrepresented and have turned down all subsequent opportunities and invitations to travel outside the UK at public expense.

"There have also been recent reports that some MPs are claiming expenses for first class travel between their constituencies and London. I do not.

"I fully accept that there were shocking abuses of the old system of MPs allowances. Little evidence (and often none) was required to claim them. I was never comfortable with that situation and always voluntarily submitted receipts in order to reclaim expenditure, even for small amounts paid through petty cash. Some MPs 'flipped’ the designation between properties at will for allowance purposes and set up their living arrangements in order to maximise claims against their allowances. I never did so and never would.

"MPs expenses are now overseen and administered by an independent body, the details are published every two months and can be inspected on-line. I am very glad that the new rules about expenses are so much clearer than under the old system of allowances and I respect and abide by them at all times."

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