Labour Minister’s £60,000 expenses for parents’ home.
Another Labour Minister has been caught out in an expenses scandal after effectively admitting he had been wrong to claim £60,000 of taxpayers’ money for a property which is his parents’ main home – not his.
Employment Minister Tony McNulty performed a dramatic U-turn and announced he had stopped claiming the controversial MPs’ second-home allowance after being challenged by The Mail on Sunday.
Even more astonishingly, he said that 133 MPs who, like him, live within 60 miles of Westminster should be banned from getting the £24,000-a-year handout.
Mr McNulty and his wife, chief schools inspector Christine Gilbert, have a combined annual income of a third of a million pounds and between them own two London homes worth £1.2million.
They live together in a house she owns just three miles from Westminster. Yet he has been claiming up to £14,000 a year in parliamentary expenses to help pay for the second house in Harrow where his parents live, 11 miles from the Commons.
The MP has been able to obtain the money because the house he owns is in his Harrow constituency and so qualifies him for the secondhome allowance. Initially, when Mr McNulty was approached by this newspaper on Friday he pointed out: ‘It is all within the rules.’
But later, he changed his tune. When it was put to him, ‘Do you accept it all looks very odd?’, he replied: ‘I do.’
He then compared his own unconvincing defence with that made by Nazi war criminals at the Nuremberg trials, who said they were ‘only obeying orders’.
‘It’s not against the rules – though I suppose you might say that is the Nuremberg defence,’ he observed.
He then suddenly announced that he had decided to stop claiming the allowance, which he has benefited from ever since becoming an MP in 1997. He said he had ‘reflected’ on the issue and stopped claiming the grant, officially called the Additional Costs Allowance (ACA), in January.
Asked if he had informed anyone in authority of his decision, either at the Commons or in the Labour Party, he replied: ‘No, no one.’
The only person he had told was his wife, he said. He was adamant that it was not a spur-of-the-moment decision forced on him by this newspaper’s investigation.
As if to emphasise how much he regretted his actions, Mr McNulty, who is also Minister for London and tipped to run against Boris Johnson for London Mayor in 2012, made an impromptu call for a major purge of MPs’ expenses.
His plan received a mixed response from Labour MPs who would be affected. Crawley MP Laura Moffatt said: ‘It doesn’t affect me because I don’t have a second home.’ Asked how she squared that with her claim of £61,457 between 2002 / 03 and 2006/07, she hung up.
Dagenham Labour MP Jon Cruddas was more positive. ‘This idea should be kicked around, it’s a discussion which should be had.’
He said those who live within 60 miles of the capital should be forced to commute every day like any other worker, and lose their second-home allowance. Currently 159 MPs live within that radius. Twenty-six Inner London MPs already cannot claim the ACA – worth up to £24,000 a year – and of the remaining 133, 107 do claim. Mr McNulty’s proposal could save taxpayers about £2million a year.
Mr McNulty said: ‘There are senior Shadow frontbench figures who live five miles further away from Westminster than me who claim the lot…’ before quickly adding: ‘… and that is entirely appropriate.’
Asked if he would be happy to sacrifice the £103,117 he claimed between 2002 and 2007, he said: ‘If that is the agreed view of Parliament.’
But one MP who asked not to be named, said: ‘Just because Tony McNulty has been rumbled does not give him the right to lecture those of us who need the money.’
Asked on Sky News’ Sunday Live why he was claiming expenses on a property where his parents live, Mr McNulty said: ‘I use it considerably. I work there at weekends when I am in the constituency.
‘I have said clearly that I was probably spending one or two nights a weekend there early on when I was an MP. It probably is less now.
‘But I think I can do my job more effectively by having that base in the constituency. I think I can do my ministerial job more effectively by having a place in London.’
He explained why he stopped claiming the allowance in January: ‘By Christmas, I decided – not least with the direction mortgage rates have gone in and a whole range of other factors – I reflected on it and thought I could probably do without claiming it.’
Mr McNulty said he believed there were ‘anomalies’ in the ACA system for MPs’ second homes and thought it should be looked at.
But he insisted he was not casting aspersions on the second-home claims made by 130 other MPs whose constituencies are within 60 miles of London. The ‘overwhelming’ majority of claims were entirely legitimate, he said.
Any review of the system could look at the Scottish system, under which MSPs with constituencies within commuting distance of Holyrood cannot claim second home allowances, or a flat rate pay increase for all MPs in return for giving up ACA, he suggested.
It is the latest in a series of rows over MPs’ expenses. Earlier this year, The Mail on Sunday revealed how Home Secretary Jacqui Smith claims £20,000-a-year expenses by arguing her London ‘digs’ at a house owned by her sister is her main home, not the substantial house in her Midlands constituency where she lives with her husband and young children.
Until October, Mr McNulty was Ms Smith’s deputy at the Home Office. He denied his change of heart had anything to do with widespread condemnation of her conduct.
This is how Mr McNulty has cashed in on the ACA. Shortly after becoming Harrow East MP in 1997, he bought a house in Harrow, which is now worth an estimated £300,000.
He divorced his first wife, fellow Labour activist Gillian Travers and moved into the house with his parents, James and Eileen. By 2001, he had moved to Hammersmith to live with former headteacher Christine Gilbert. Ms Gilbert, also a divorcee, had bought thehouse – now worth about £900,000 –in 1994.
The couple married in September 2002. On their wedding certificate, both gave their address as the Hammersmith house, although in a Commons debate on data protection in 2005, Mr McNulty appeared to suggest his main home was in Harrow.
‘I have no copyright on “Tony McNulty”.’ he said. ‘I have no copyright on November 3, 1958 [his birthday]. I have no copyright on . . . [he then gave the Harrow address].’
In addition, he is on the electoral register in Harrow, not Hammersmith, where his wife is registered.
MPs can claim ACA on the mortgage interest payments on a second home – which means those members who have paid off their mortgage can receive nothing.
According to Land Registry documents, Ms Gilbert did not have a mortgage on the property when they moved in together, but Mr McNulty disputed this and insisted Ms Gilbert did have a mortgage at the time.
However, after they set up home together, both took out mortgages on their respective homes. Land Registry records show Ms Gilbert took out a loan on the Hammersmith property with the Bank of Scotland later in 2001, while Mr McNulty took out a fresh loan on his Harrow house with the same bank in 2003.
