5th Rpt HL 38 Journal version

The Conduct of Lord Bhatia

Introduction

The Sub-Committee on Lords’ Conduct has investigated the conduct of Lord Bhatia. The Sub-Committee’s report is printed as an Appendix to this Report.

The Sub-Committee’s investigation into the conduct of Lord Bhatia should be read in parallel with its investigations in the conduct of Lord Paul and Baroness Uddin. All three cases arise out of articles originally appearing in The Sunday Times, and each raises similar issues. Each of the Sub-Committee’s reports contains similar background analysis (for instance, of the rules governing the Members’ Reimbursement Scheme).

But, however similar the issues, the facts of each case are wholly distinct and have required separate consideration. The Sub-Committee, and we ourselves, have therefore prepared three separate reports.

Process

4.The process followed in this case is summarised in paragraphs 5–6 of the Sub-Committee’s report. The original allegations against Lord Bhatia appeared on 26 July 2009; a complaint was made the same day by Angus Robertson MP. Between 31 July 2009 and 25 March 2010, the Clerk of the Parliaments met and corresponded with Lord Bhatia, but ultimately he felt unable to reach a conclusion on the basis of the information with which Lord Bhatia had provided him. On 25 March 2010, he therefore asked the Sub-Committee “to investigate and determine the facts of the case”.

5.The procedure in these cases follows that agreed by the House in December 2008, whereby the Clerk of the Parliaments can request the assistance of the Sub-Committee in investigating complaints which he considers “complex or serious”. As a Sub-Committee of the Committee for Privileges and Conduct, the Sub-Committee on Lords’ Conduct normally reports to the parent Committee. But, as this case was referred to the Sub-Committee by the Clerk of the Parliaments, the Sub-Committee reported to the Clerk of the Parliaments. He, given the nature of the sanctions recommended by the Sub-Committee, forwarded the report in turn to this Committee.

The Sub-Committee, following an investigation which had been interrupted by the dissolution of Parliament, sent its report to the Clerk of the Parliaments on 28 July. The Sub-Committee also recommended that, in order to preserve confidentiality, the Clerk of the Parliaments should not disclose the report to any other person until late in the summer recess. He accordingly forwarded the report to the staff of the Select Committee in late September, and a copy was at once sent to Lord Bhatia, on 21 September. He was at the same time notified of his right to appeal against the Sub-Committee’s findings to the Committee for Privileges and Conduct.

The deadline given for submitting an appeal was noon on 5 October. On 29 September Lord Bhatia’s solicitor applied for an extension of the time allowed to prepare his appeal, until 15 November 2010. In reply, he was informed that a decision on such an application could only be taken by this Committee at its meeting on 11 October. On 4 October Lord Bhatia submitted a further application for an extension of time, this time under his own name. At the same time he submitted a paper outlining the grounds for his appeal, and indicated his wish to appear in person before the Select Committee at its meeting on 11 October.

At the meeting on 11 October, before considering the appeals submitted by the three Members, we considered Lord Bhatia’s application for an extension of time. We concluded that the time allowed to him to prepare his appeal was sufficient, and therefore rejected his application. In so deciding, we took into account that:

The Sub-Committee’s report is short (just under 8,500 words);

A large section of the report (paragraphs 15–45, almost half of the total) was shown to Lord Bhatia in draft in July;

All the written evidence was disclosed to Lord Bhatia before his appearance before the Sub-Committee;

The extension requested (until 15 November 2010) was wholly unreasonable;

The two other Members whose cases we have considered, Lord Paul and Baroness Uddin, submitted full appeals within the two-week deadline, without applying for more time;

The outline grounds of appeal submitted by Lord Bhatia, supplemented by his oral evidence, were sufficiently comprehensive to enable us to reach a fair and balanced view on the merits of his appeal.

Although the Sub-Committee’s report was forwarded to this Committee in its entirety, certain matters covered in it relate to the administration of the Members’ Reimbursement Scheme (for instance, the changes which the Sub-Committee indicates were made to the Scheme in April 2009, referred to in paragraphs 21 and 51–52 of the Sub-Committee’s report), rather than to the privileges of the House or the Code of Conduct. It is for the House Committee, as the body responsible for the Members’ Reimbursement Scheme, to take forward these matters, on which we make no recommendations.

Our responsibility is to address the conduct of Members who are alleged to have breached rules agreed by the House, and, where appropriate, to recommend sanctions to the House as a whole. The House has previously resolved that it “possesses the same disciplinary powers in respect of breaches of the Members’ Reimbursement Scheme as in respect of breaches of the Code of Conduct or of other rules of conduct adopted by the House”.

The Sub-Committee’s findings

The focus of the investigation has been Lord Bhatia’s use of the Members’ Reimbursement Scheme between 1 October 2007 and 1 January 2009. In particular, the Sub-Committee considered whether during this period Lord Bhatia correctly designated a two-bedroom flat in Reigate as his “main residence” for the purposes of the Scheme.

Lord Bhatia first leased the Reigate property in March 2006, through a company he owns. Under the tenancy agreement, there are three permitted occupants: Mr Sultan Bhatia (Lord Bhatia’s younger brother), Lord Bhatia himself, and Lord Bhatia’s wife. As well as leasing the property through his company, Lord Bhatia also paid council tax on the property and paid its utility bills.

Lord Bhatia has owned a family home in Hampton (just inside Greater London) for almost 20 years. He says that from March 2006 onwards he experimented with the Reigate property, with a view to moving there permanently. He says he was motivated by a desire to “downsize”, in view of his age and health. However, he retained the Hampton property throughout the period in question, and in January 2009 he again designated that property as his main residence. He also acknowledges that throughout the period he stayed in Hampton during the week.

The pattern of Lord Bhatia’s visits to Reigate is unclear—his answers to the questions put to him variously by the Clerk of the Parliaments and the Sub-Committee are summarised in paragraphs 41–43 of the Sub-Committee’s report. Lord Bhatia’s claims for travel expenses shed little light on the frequency of his visits: for the first five months of the period he claimed mileage allowance for regular travel to and from Reigate at weekends, while for the remaining 10 months he claimed nothing, describing the system as too cumbersome and inflexible.

In conclusion, the Sub-Committee accepted, on the balance of probabilities, that Lord Bhatia visited the Reigate property on 30 percent of weekends when the House was sitting, and to some extent during recesses. He therefore exceeded the minimum threshold for frequency of visits to a “main residence”, which the Clerk of the Parliaments, with the agreement of the House Committee, has incorporated in his assessment of cases where frequency of visits is an issue (paragraph 48 of the Sub-Committee’s report).

The Sub-Committee therefore accepted that, taken together with his financial responsibility for the property, the frequency of Lord Bhatia’s visits would be sufficient, other things being equal, to determine the case in his favour (paragraph 55). However, the House Committee agreed that there should be different and more stringent requirements in cases where a property is occupied by a relative other than a spouse or partner:

“[designation of a property occupied by a relative other than a spouse or partner] could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities”.

The Sub-Committee’s interpretation of this paragraph, and its application to Lord Bhatia’s case, are outlined in paragraphs 55–58 of the report. The Sub-Committee considered that “the strength of the member’s connection with the designated property must be such as to find that, irrespective of occupation by a relative ... the property remained Lord Bhatia’s ‘main residence’ within any natural meaning of those two words taken together” (paragraph 56). On the basis of various relevant factors (frequency of visits and/or overnight stays either by Lord Bhatia or his wife, financial responsibility, his continuing ownership of the house in Hampton, whether he made friends in Reigate, and so on), the Sub-Committee concluded that “Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of ‘main residence’ for the purpose of the members’ reimbursement scheme”.

It follows from the Sub-Committee’s conclusion regarding the designation of the Reigate property, that Lord Bhatia was not entitled to claim travel expenses to and from Reigate. The Sub-Committee, with the assistance of the Finance Department, calculated the total amount wrongly claimed by Lord Bhatia by way of night subsistence and travel expenses to be £27,446.

The Sub-Committee then considered whether or not Lord Bhatia acted in good faith in making the designation and the related claims. Lord Bhatia’s stated purpose in acquiring the Reigate property was to downsize from the house in Hampton. The Sub-Committee’s view was that Lord Bhatia leased the property “for the benefit of his brother” rather than with a view to downsizing. It found that his designation of the Reigate property was a “deliberate misrepresentation of his domestic arrangements made with the intention of enabling Lord Bhatia to make use of the night subsistence element of the members’ reimbursement scheme” (paragraph 71). The Sub-Committee concluded that his claims for mileage allowance were made “with the intention of adding verisimilitude to his designation” of the Reigate property (paragraph 77). In summary, the Sub-Committee’s view was that Lord Bhatia “did not act in good faith” in designating the Reigate property and claiming night subsistence and mileage allowance.

Finally, the Sub-Committee recommended that “the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the sum of £27,446 wrongly claimed, whichever is the later.”

Lord Bhatia’s appeal

Lord Bhatia’s appeal may be summarised under five broad headings.

Burden of proof

Lord Bhatia points out that the Sub-Committee’s findings were reached “on the balance of probabilities”. He asserts that this was an error, in that the allegations “were tantamount to an allegation of criminal conduct”—in such a case, he argues, the Sub-Committee should have been satisfied “beyond reasonable doubt”. He also refers to the “heightened civil standard” of proof—that is to say, a point between the civil (on the balance of probabilities) and criminal (beyond reasonable doubt) standards.

Procedural inadequacies

Lord Bhatia alleges procedural failures in the Sub-Committee’s examination of him, in that he was at one point refused permission to consult his solicitor. He also asserts that the questioning was “extremely hostile”, so that he was disadvantaged by not being able to consult his solicitor.

The House Committee criteria

Lord Bhatia then refers to the House Committee criteria, describing them as an “objective test”, rendering his “individual motivation” irrelevant. He further alleges that, in judging his motivation, the Sub-Committee took insufficient account of his financial contribution to the property, and to evidence pre-dating his acquisition of the property that demonstrated his wish to downsize.

Facts of the case

Lord Bhatia notes the Sub-Committee’s acknowledgement that the frequency of his visits to the Reigate flat (around 30 percent of weekends while the House was sitting) would have satisfied the criteria agreed by the House Committee, were it not for the fact that his brother also occupied the flat. He says that the Sub-Committee were wrong in fact to state that his brother had separated from his wife shortly before he acquired the property. He further states that his brother’s residence in the flat “reflected the cultural attitude of people of my ethnic background”, and that this cultural attitude should have been accepted as one of the “very specific circumstances” referred to in the House Committee criteria.

Disproportionality

Finally, Lord Bhatia asserts that the recommended sanction is “disproportionate and excessive”, particularly given the Sub-Committee’s acknowledgement that, were it not for his brother’s occupancy of the Reigate property, he would have met the criteria set by the House Committee.

Evidence taken before the Committee for Privileges and Conduct

Lord Bhatia appeared before the Select Committee on 11 October 2010. He read out what is, in effect, a more fully developed version of his written appeal. A full transcript of his evidence is printed in this volume (see p 129).

Repayment and apology

As indicated above, the Sub-Committee recommended that Lord Bhatia be required to repay the sum of £27,466 to the House, and that he be suspended either for one year, or until the sum is repaid, whichever is longer. The day after submitting his appeal, on 5 October, Lord Bhatia transferred that sum to the House of Lords. The Sub-Committee’s recommendation regarding repayment therefore falls.

The Sub-Committee also recommended that Lord Bhatia be required “to make a personal statement of apology to the House”. Lord Bhatia, in his appeal, states that as well as repaying the money wrongly claimed, “nor would I seek to avoid making a statement to the House”.

The views of the Committee

The standard of proof

Lord Bhatia’s appeal argues that the Sub-Committee should have applied (and, by implication, this Committee should apply) either the criminal standard of proof (“beyond reasonable doubt”), or a “heightened civil standard” (somewhere between “balance of probabilities” and “beyond reasonable doubt”) to this case.

Instead, the Sub-Committee applied the test set out in the Report on procedure: “in order to find against a Member, the Sub-Committee requires at least that the allegation is proved on the balance of probabilities”. That Report, and the procedure it describes, was agreed by the House on 18 December 2008.

The words “at least”, in the passage just quoted, indicate that there is an element of flexibility inherent within this standard of proof. This was confirmed in our Report on the conduct of Lords Moonie, Snape, Truscott and Taylor of Blackburn:

11. The standard of proof we have adopted in deciding whether to uphold or reject the Sub-Committee’s findings has been the same as that applied by the Sub-Committee: in other words, while taking the civil standard of proof, the balance of probabilities, as the appropriate standard, we have, in the light of the seriousness of the allegations, taken the view that particularly strong evidence should be required before we may be satisfied that the allegations are proved.

This Report was agreed by the House on 20 May 2009.

Finally, the Guide to the new Code of Conduct, which came into force at the start of the present Parliament (and which will apply to any future investigations), states:

119. The civil standard of proof is adopted at all stages in the enforcement process, not only by the Commissioner, but by the Sub-Committee on Lords’ Conduct and the Committee for Privileges and Conduct. Thus, in order to find against a Member, the Commissioner will require at least that the allegation is proved on the balance of probabilities.

This Report was agreed by the House on 16 March 2010.

In other words, the House has three times explicitly endorsed the principle that the civil standard of proof should be adopted in such investigations, while acknowledging that within the civil standard a degree of flexibility is allowed in judging the strength of evidence required to justify a finding against a Member. This is entirely appropriate: these are internal disciplinary proceedings, and the sanctions to which Members may be subject (including suspension from the House for a period not exceeding the lifetime of the current Parliament) are also internal in character. No criminal liability follows from such a finding.

Our approach to the question of the appropriate standard of proof is also entirely consistent with the approach taken in the courts.

We reiterate the principle that the standard of proof adopted in investigations should be that set out in the Guide to the Code of Conduct, namely that the allegation should be proved at least on the balance of probabilities. We have therefore dismissed this element of Lord Bhatia’s appeal.

Procedural inadequacies

Lord Bhatia’s asserted that the questioning to which he was subjected by the Sub-Committee was “extremely hostile”, and that he was disadvantaged by being refused permission to consult his solicitor.

The questioning by the Sub-Committee appears to us to have been thorough, but entirely fair. Lord Bhatia is correct that at one point in the transcript of his evidence before the Sub-Committee (Q 94), a Member of the Sub-Committee told him that he could not ask his solicitor for help. This was a mistake, but it is clear from the transcript that this was an isolated occasion, reflecting what was, in our view, natural frustration at the difficulty encountered in getting clear answers to legitimate questions. We have no reason to believe that Lord Bhatia was significantly disadvantaged.

In his evidence before this Committee, Lord Bhatia expressed his concerns still more forcefully. He claimed that the Sub-Committee had “predetermined” or “pre-formed” conclusions, and that he had been “ambushed”. There is nothing in the transcript to bear out these claims. In fact they are contradicted by his own remarks, towards the end of the meeting with the Sub-Committee:

“Thank you for giving me this opportunity. It has not been trying. You have been very fair and straightforward in asking the questions in an appropriate manner”. (Q 269)

In summary, we consider that Lord Bhatia was subjected to fair, rigorous questioning, and was given every opportunity to explain his actions. We dismiss this element of Lord Bhatia’s appeal.

The House Committee criteria

Lord Bhatia asserts in his written appeal that “designation of main residence is something noble peers were entitled to do under the rules if the criteria for designation was met”. This interpretation of the House Committee criteria as an “objective test” is wholly misconceived. The minimum requirement agreed by the House Committee in January 2010, and applied by the Clerk of the Parliaments in his investigations, was that “the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses” (see paragraph 48 of the Sub-Committee report). But that minimum requirement is not, and was clearly never intended to be, a definition of “main residence”, to be applied retrospectively to decisions taken in 2007 or 2008. It was intended to be incorporated “into [the Clerk of the Parliaments’] assessment of cases where frequency of visit was an issue”. Frequency of visit is not an issue in a case where no reasonable or defensible interpretation of the term “main residence” has been advanced.

We are therefore satisfied that the Sub-Committee’s application of the House Committee criteria was correct, and dismiss this element of Lord Bhatia’s appeal.

Facts of the case

The crux of the case is the Sub-Committee’s interpretation of Lord Bhatia’s decision to designate the Reigate flat as his “main residence” between October 2007 and January 2009. The question is whether or not Lord Bhatia’s designation of this flat as his “main residence” was based on a tenable and genuinely held understanding of the meaning of that term.

The underlying purpose of night subsistence payments was clear. They were intended to enable Members who lived outside London, but who, in order to attend sittings of the House, were required to stay within London (whether by staying in temporary accommodation or by acquiring a permanent residence), to recover some of the costs incurred in so doing:

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

4.4.2 A Member whose main residence is outside Greater London and who maintains a residence in London for the purpose of attending sittings of the House may claim this allowance towards the cost of maintaining such a residence.

These payments were not intended to enable Members who lived inside London to acquire properties outside London and designate these as their “main residences”, thereby establishing an entitlement to claim additional money from the House, while continuing to live inside London. It is a common element in the three cases we have been considering that in each case the Member concerned had a long-established London residence, in which they spent the bulk of their time, before acquiring a “main residence” outside London, in which they spent a much smaller portion of their time.

Lord Bhatia has lived in a four bedroom detached house in Hampton, on the edge of Greater London, for nearly 20 years. His daughter lives in an adjoining property. There is no doubt that throughout this period the house has been, and remains, his main family home. In March 2006 Lord Bhatia leased a two bedroom flat in Reigate, some 15 miles away from Hampton, but outside Greater London. The permitted tenants of the flat were his brother, Mr Sultan Bhatia, himself and his wife. Sultan Bhatia has lived in the flat continuously since March 2006. However, Lord Bhatia is financially responsible for the flat, including the lease, utility bills and council tax.

Lord Bhatia claims that he acquired the Reigate flat with a view to “down-sizing” from his house in Hampton, and that the period in which the flat was designated as his main residence coincided with an experiment in down-sizing. The Sub-Committee acknowledged that such down-sizing could constitute “a legitimate reason to change one’s designated main residence”. The Sub-Committee’s reasons for rejecting Lord Bhatia’s account are set out in paragraphs 68–70 of its report, and are persuasive. We place particular weight on the fact that Lord Bhatia at no point put his house in Hampton on the market; that he continued to spend most of his time in Hampton throughout the period in question; that on 1 January 2009 he re-designated the house in Hampton as his “main residence”. At no point does he appear to have spent more than occasional days or weekends in Reigate; his wife was there less often than himself.

The Sub-Committee’s interpretation of Lord Bhatia’s decision to acquire the flat in Reigate was as follows:

We find that Lord Bhatia leased the property for the benefit of his brother: Mr Sultan Bhatia is the first-named permitted occupant on the tenancy agreement; he was the sole person on the electoral roll for the property; it is his sole residence; and shortly before Lord Bhatia leased the Reigate property Mr Sultan Bhatia separated from his wife and is now divorced. (paragraph 60)

Lord Bhatia has told us that the Sub-Committee was wrong to claim that his brother separated from his wife “shortly before” he acquired the flat. In his evidence before this Committee, he stated that the separation in fact occurred on 3 July 2004. We accept that the term “shortly before” is slightly inaccurate. However, we can draw no conclusions in Lord Bhatia’s favour from this inaccuracy. The fact that Lord Bhatia’s brother separated from his wife 20 months earlier does not invalidate the Sub-Committee’s judgement that the flat was leased “for the benefit of his brother”—the other factors mentioned, in particular the undoubted facts that Mr Sultan Bhatia is the first-named permitted occupant, that the flat is his sole residence, that he is the sole person on the electoral roll for the property, are in our view conclusive.

Lord Bhatia further argues that his brother’s residence in the flat “reflected the cultural attitude of people of my ethnic background”, and that the Sub-Committee should therefore have accepted his designation of the Reigate flat. However, the issue in this case is whether the Reigate flat could, within any natural meaning of the term, be regarded as Lord Bhatia’s “main residence”. If, as the Sub-Committee and we ourselves believe, Lord Bhatia acquired the flat for the benefit of his brother, that testifies to the strength of his sense of his cultural and family obligations; it does not justify him in designating that flat as his own “main residence”, and thereby claiming over £27,000 in expenses payments from the House.

We therefore endorse the Sub-Committee’s conclusion that Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of “main residence” for the purpose of the members’ reimbursement scheme, and we dismiss this element of his appeal.

Good faith

Having concluded that Lord Bhatia wrongly designated the Reigate flat, the Sub-Committee then considered whether or not, in so doing, and in claiming money under the night subsistence and mileage allowances, he acted in good faith. The Sub-Committee’s analysis is set out in paragraphs 63–78; the Sub-Committee’s conclusion was that he did not act in good faith.

Lord Bhatia’s appeal against this finding is based in part on his interpretation of the House Committee criteria. For reasons set out above, we consider this element of his appeal misconceived. He further argued, in his evidence before this Committee, that “the Sub-Committee’s so-called ‘tests of good faith’ appear to be highly subjective and inappropriate” (Q 2, p 132E). The factors taken into account by the Sub-Committee in assessing whether or not Lord Bhatia acted in good faith are set out fully and fairly in paragraphs 69–70 of the Sub-Committee’s report. They are not “tests”, and were not put forward by the Sub-Committee as tests. They are factors which, taken together, enabled the Sub-Committee to make a judgement, on at least the balance of probabilities, as to whether or not Lord Bhatia acted in good faith. We reject Lord Bhatia’s assertion that they are “subjective and inappropriate”; on the contrary, they are all highly relevant to his case and to his motivation, which is the key issue.

Our responsibility, in reviewing the Sub-Committee’s findings, is to “decide whether, on the balance of probabilities, we endorse the conclusions of the Sub-Committee”. We note that Lord Bhatia has a reasonable understanding of the term “main residence”, describing it in evidence to the Sub-Committee as his “principal home” (Q263), “where I live” (Q262). It is clear to us that his Reigate flat never acquired such a character.

Lord Bhatia continues to assert that he acted properly in designating the flat as his main residence. On 5 October 2010 he transferred £27,446, the sum calculated by the Sub-Committee as having been wrongly claimed, to the House. Yet he rejects any suggestion that in so doing he has implicitly acknowledged that he wrongly claimed the money in the first place. He told us that he had “repaid the sum on the advice of my legal advisers. I do not accept the three allegations or the sanctions against me. I have done this simply because I was advised to do so.” (Q 7)

We therefore endorse the Sub-Committee’s finding that “Lord Bhatia did not act in good faith in designating the Reigate property as his main residence and in claiming night subsistence and the mileage allowance for journeys by car from and to that property”.

Sanction

The Sub-Committee recommended that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the amount wrongly claimed, whichever is the later. Lord Bhatia has now repaid the money wrongly claimed, so this element of the recommended sanction falls.

58.With regard to apology and suspension, we consider that the greater penalty, suspension, renders the lesser, apology, unnecesary. Nor would it be fair, in a case where the Member concerned has maintained his or her innocence, to require an apology immediately prior to suspension. Lord Bhatia told us that “even though I have grave misgivings about the case against me, [I] would if required be prepared to make a statement to the House”. He has not offered to apologise, and we do not believe that he should be required at this late stage to do so.

We therefore confine our recommended sanction to suspension. In reviewing the Sub-Committee’s recommendation that Lord Bhatia be suspended for one year, we have taken into account the fact that he has now repaid the money wrongly claimed.

We therefore recommend that Lord Bhatia be suspended from the service of the House for eight months, starting on the date on which any suspension motion is agreed by the House.

Appendix: Report from the Sub-Committee on Lords’ Conduct

Members’ reimbursement scheme: the conduct of Lord Bhatia

Introduction and summary

This report replies to a letter from the Clerk of the Parliaments dated 25 March 2010 which, following the Report from the Committee for Privileges on the procedure for considering complaints against members (“the report on procedure”), invited the Sub-Committee on Lords’ Interests to help him investigate a complaint about Lord Bhatia’s use of the members’ reimbursement scheme.

We find on the facts that the property in Reigate which Lord Bhatia designated as his main residence for the purpose of the members’ reimbursement scheme met the criteria endorsed by the House Committee on 26 January 2010 (p16E) in terms of frequency of visit, but that it did not meet the additional criterion for a main residence “occupied by a relative other than a spouse or partner” (which it was; his brother lived there) in terms of his “connection with the property”. This is because, in our opinion, the connection must establish that the designated property remained the member’s “main residence” within any natural meaning of those words. He wrongly claimed £27,446 and should be required to repay this amount. We further find that Lord Bhatia did not make his designation and claims for night subsistence away from that property and for the mileage allowance in good faith. We recommend that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the amount wrongly claimed, whichever is the later.

The allegation, complaint and process of investigation

Allegation and complaint

On 26 July 2009, the Sunday Times newspaper alleged that Lord Bhatia had designated as his main residence a flat occupied by his brother but in which he himself had not lived (p41):

“A millionaire peer has claimed more than £20,000 in allowances from the House of Lords by saying that a small rented flat occupied by his brother is his main home. Last week he could not even remember its address ... Bhatia could not remember the address of the flat when repeatedly asked last week. He had to look it up and even then misspelt the name of the block. A neighbour could not recall him living there, but Bhatia insisted he had spent many weekends at the flat and said he intended to move there with his wife when he sells his family home.”

Mr Angus Robertson MP complained about Lord Bhatia’s alleged conduct on 26 July 2009 (p43).

Procedure for investigation of allegations about expenses

The House Committee is the principal domestic committee of the House and is responsible for the members’ reimbursement scheme (p5B). On 20 October 2009, the Committee endorsed a procedure for dealing with complaints relating to the scheme (p15H). It involved investigation by the Clerk of the Parliaments as Accounting Officer; reference to the Sub-Committee in “complex or serious” cases; report by the Clerk of the Parliaments to the House Committee; and sanctioning by the Committee for Privileges if appropriate (p16B). On 6 July 2010, the Clerk of the Parliaments and House Committee agreed to stand aside in this and two other cases where this Sub-Committee had been involved: thus this report goes via the Clerk of the Parliaments to the Committee for Privileges and Conduct, to whom lies Lord Bhatia’s right of appeal.

Procedure in this investigation

Between 31 July 2009 and 25 March 2010, the Clerk of the Parliaments met and corresponded with Lord Bhatia (pp45-71). The Clerk felt unable to reach a conclusion on the basis of the information with which Lord Bhatia had provided him. On 25 March 2010, he asked the Sub-Committee “to investigate and determine the facts of the case” (p71E).

Investigation by the Sub-Committee

The report on procedure says that we may not accept for investigation a complaint going back more than four years: we may thus examine conduct in this case from 26 July 2005. We have not limited our investigation to the allegation made by the Sunday Times newspaper but have instead generally investigated Lord Bhatia’s use of the members’ reimbursement scheme. We have focused on Lord Bhatia’s claims for night subsistence and travel. Lord Bhatia’s claims for day subsistence, office costs, and Select Committee expenses are not at issue.

Our investigation was interrupted by the dissolution of Parliament on 12 April 2010. The new House met on 18 May and appointed the Committee for Privileges and Conduct on 2 June. The Committee appointed this Sub-Committee on 7 June. We reported to the Clerk of the Parliaments on 28 July with the recommendation that, to retain confidentiality during the summer recess without affecting the timetable for any appeal, he should forward the report to the Chairman of the Committee for Privileges and Conduct only towards the end of the summer recess.

Evidence

The Sub-Committee had as written evidence the amounts claimed by Lord Bhatia since April 2003 and his claim forms since March 2006 (pp27-40); correspondence between the House authorities and Lord Bhatia (pp44-71); a letter from the Sunday Times and transcripts of telephone conversations and interviews on which their article was based (pp79E-96). The officers of the Sub-Committee corresponded with Lord Bhatia (pp72-8). We took oral evidence in private from Lord Bhatia (pp97-118), to whom we had earlier disclosed the written evidence. The report on procedure says:

“Procedural safeguards

25. The Code of Conduct states that “in the investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.” They may be accompanied to any meeting by a colleague, friend or legal adviser, but every effort is made to keep proceedings informal, and there is no expectation that they should be so accompanied. If they do choose to bring a friend or adviser, they will nevertheless be expected to answer for themselves (and not through their friend or adviser) any questions put to them.”

Lord Bhatia brought with him to the evidence session his solicitor, Mr Matthew Bosworth of Mssrs Russell Cooke.

We recommend that all of this evidence be published.

Unlike two other cases on which the Sub-Committee has recently reported, the Metropolitan Police Service did not investigate Lord Bhatia’s conduct so, in this case, there are no third-party witness statements on which we can draw.

The facts

The report on procedure says:

“Assessing the evidence

26. When its investigation is concluded, the Sub-Committee assesses the evidence. In order to find against a Member, the Sub-Committee requires at least that the allegation is proved on the balance of probabilities.

27. If the investigation has uncovered material evidence that is at variance with the Member’s version of events, this will be put to the Member, who will have a chance to challenge it. Before reaching its conclusions, the Sub-Committee will also share with the Member a draft of those parts of its report dealing with issues of fact, so that the Member has an opportunity to comment on them.

28. If there remain significant contested issues of fact, the Sub-Committee will agree its own account of the facts of the case, while drawing to the attention of the Committee for Privileges and the House any challenge to this account made by the Member concerned.”

14. To fulfil these paragraphs, we showed Lord Bhatia a draft of our account of the facts set out in paragraphs 15 to 45. He challenged a number of points in our draft. We have taken account of some but not all of his points in the version below and we draw attention to the memoranda by Lord Bhatia printed at (pp118H; 119A).

The facts of the case are as follows.

The members’ reimbursement scheme

The members’ reimbursement scheme is founded on resolutions of the House and is explained in a General Guide published by the Finance Department and in a Quick Guide set out on the reverse of the claim form. The Clerk of the Parliaments is responsible for administering the scheme, subject to direction by the House Committee on points of difficulty or doubt (p5B). The relevant resolutions and guidance are set out in full at pp1-15 of the printed evidence but we must here quote some relevant passages.

The resolutions of the House and published guidance

The principal resolution of the House in relation to day and night subsistence is that of 25 July 1991 (p1D). It reads:

“(1) Members of this House, except any Lord who receives a salary under the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees, shall be entitled to recover (in addition to the costs of travel for which other provision is made) expenses certified by them as—

(a) expenses incurred (otherwise than as mentioned in sub-paragraph (b) below) for the purpose of attendance at sittings of this House or of Committees of this House, or

(b) expenses incurred in staying overnight away from their only or main residence where it is necessary to do so for that purpose.”

The principle that a member may claim an allowance towards the recovery of the cost of travel by car for the purpose of parliamentary duties was established by a resolution of the House of 17 May 1961 (p1A). The current resolution relating to travel by car is that of 10 November 2004 (p2C). It reads:

“That this House approves the following proposals with respect to payments of car, bicycle and motorcycle allowances to Lords for journeys which they have commenced on or after 10 November 2004—

(1) The maximum allowance payable in respect of a journey by car, motorcycle or bicycle should be payable at the rate which is applicable to that kind of vehicle under subsection (2) of section 230 of the Income Tax (Earnings and Pensions) Act 2003, as amended from time to time.

(2) For the purposes of paragraph (1), the reference in that subsection to “the first 10,000 miles” is to the total number of miles of travel by car by the Lord claiming the allowance, which is either—

(a) undertaken for the purpose of attending this House for the purposes of his parliamentary duties, or

(b) undertaken while on parliamentary duties within the United Kingdom.”

It is clear from the resolutions that the purpose of the scheme is the recovery of expenses necessarily incurred in attending the House.

As to the guidance, the 2005 edition of the General Guide read (pp2-14):

“1.2.1 Members of the House of Lords do not, in general, receive a salary in respect of their parliamentary duties. However, Members may be reimbursed actual expenses arising out of these duties, in accordance with the rules of the Members’ Reimbursement Allowance Scheme. The Members’ Reimbursement Allowance Scheme is governed by Resolutions of the House. Rules for the recovery of Members’ expenses are administered by the Clerk of the Parliaments who also has limited discretion to deal with matters that arise on claims. Points of particular difficulty or doubt may be referred to the House Committee, which supervises the arrangements for the reimbursement of expenses ...

1.3 Taxable status

1.3.1 All amounts paid in settlement of claims as detailed in this guide represent reimbursement of actual expenses arising out of unpaid parliamentary duty, rather than income from employment. Consequently, they are not subject to income tax, and need not be included on a tax return ...

4 Attendance at sittings at Westminster

4.1 General - Expenses Related to Attendance

4.1.1 The basic principle underlying the scheme is that the entitlement to recover expenses arises only in respect of attendance at sittings of the House or its committees at Westminster …

4.1.3 Members who wish to claim attendance expenses must complete and sign the attendance expenses claim form and forward it as soon as convenient after the end of each month, or period of claim, to the Members’ Expenses Section. A Member’s signature effectively certifies that the amount claimed has been spent for the purposes of parliamentary duties as set out above. Receipts are not required ...

4.2 Travelling Expenses

General

4.2.1 Claims may be made only for journeys over five miles between a Member’s main place of residence in the United Kingdom and Westminster. Claims for incidental travel costs (e.g. those arising from short distance journeys within a five mile radius of Westminster, tolls and car parking charges) are covered by the day subsistence allowance (4.5).

4.2.2 Members seeking to receive travel costs must register their main place of residence with the Members’ Expenses Section. Members with more than one main place of residence may register an alternative main residence with the Members’ Expenses Section for the purpose of claiming travelling expenses. Registration is subject to the approval of the Clerk of the Parliaments ...

4.2.4 Members may recover the cost of fares incurred by them for travel by any public railway, sea, and air or bus service, or the costs of journey made by private car ...

Road

4.2.8 Claims in respect of journeys by private car are payable at:

40p per mile up to 10,000 miles in the year ending 31 March; and

25p per mile for mileage in excess of 10,000 miles in the same year.

No other claims in respect of motoring expenses are reimbursable under the travelling expenses heading. Incidental travel costs such as tolls, congestion charges and car-parking charges can be claimed against the daily limit of the day subsistence allowance (4.5).

4.4 Night Subsistence

4.4.1 Members whose main residence is outside Greater London may claim for expenses of overnight accommodation in London while away from their only or main residence. The maximum daily limit is £154.50.

4.4.3 Claims for night subsistence are only permissible in respect of nights actually spent in London either immediately preceding or following attendance at a sitting or meeting described in paragraph 4.1.1 above. For example, a Member who necessarily travels to London on a Sunday and attends sittings of the House on Monday, Tuesday, Wednesday and Thursday and then returns home on Friday or later may claim night subsistence for a maximum of 5 nights at up to a maximum of £154.50 per night (i.e. a maximum of £772.50 for the week). However, if the Member returned home on the Thursday evening, the maximum claim for night subsistence would be 4 nights at up to a maximum of £154.50 per night (i.e. a maximum of £618 for the week).

4.4.4 Members who choose to travel home each night or whose main residence is within Greater London cannot claim the night subsistence allowance.”

The General Guide was updated in January 2007, October 2008 and April 2009. The language used to describe the scheme was materially the same in each edition until 2009, which left out the word “allowance” in several places, including in the title of the guide and in paragraph 4.4.2 in relation to night subsistence.

The claim form used until October 2008 read (p27):

“I certify that during the month of ............ I have attended a sitting of the House or of a Committee of the House on the under-mentioned dates and claim reimbursement of:

(a) Night subsistence incurred in such attendance or in respect of the maintenance of a London residence (other than a main residence) used for the purpose of attending the House (see note (i)) ...

(d) Travelling Expenses (please ensure all travel dates are entered) (see note (v))”

Thereafter paragraph (d) read (p37F):

“(d) Travelling Expenses see note (v)”

At the bottom of the form, the claimant has to print his name, sign, date the claim and enter his main place of residence.

Notes (i) and (v) refer to the Quick Guide printed on the reverse of the claim form which in 2005 read (pp14-15):

“(i) Night Subsistence – Members whose main residence is outside Greater London may claim expenses, within a daily limit of £154.50 (from 1 August 2005 to 31 July 2006), for nights spent away from their only or main residence for the purpose of attending sittings of the House a) where they have incurred expenses of overnight accommodation in London or; b) as a contribution towards the costs of maintaining a London residence in connection with their parliamentary duties. Claims can only be made in respect of days of attendance ...

(v) Travelling Expenses - These may be claimed for journeys between main place of residence in the United Kingdom and London by any public railway, sea, air or bus service. Claims in respect of journeys by private car are restricted to an allowance of 40p per mile up to 10,000 miles then 25p thereafter. Claims in respect of journeys undertaken by motorcycle are paid at the rate of 24p per mile and by bicycle at the rate of 20p per mile.”

The rates changed over the period. In August 2006 paragraph (v) read:

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

In August 2009 paragraph (i) had a sentence added to the end: “When claiming Night Subsistence dates of travel must be shown on the claim form.” As did paragraph (v): “Members are required to provide receipts or vouchers when submitting claims for ticketed travel in excess of £50 per return journey (£25 per single journey).”

Although each edition of the Quick Guide said “Members are encouraged to contact the Finance Department, House of Lords for general assistance, or to discuss any particular points that arise from their claims”, in practice the onus on interpreting the scheme has fallen on the individual member. Save for the Lord President (Lord Soames) speaking of the member’s “usual residence” when moving the motion which first set up the night subsistence regime in 1979, there was no guidance on the meaning of “main residence” other than the two words themselves until March 2010.

Lord Bhatia’s designated main residences, claims and circumstances

Lord Bhatia’s designated main residences

Lord Bhatia successively designated two main residences in the period from 26 July 2005 to the end of the last Parliament on 12 April 2010. Until 1 October 2007 it was 22 Manor Gardens, Hampton, Middlesex. From 1 October 2007 to 1 January 2009 it was 31 Bancroft Court, Reigate, Surrey. On 1 January 2009 his designated main residence reverted to 22 Manor Gardens, Hampton, Middlesex.

Facts relating to the Hampton property

The Hampton property is a post-war four bedroom detached house with a garden. It has been Lord Bhatia’s family home for nearly 20 years (p45K). His daughter, a medical doctor, lives in a house with an adjoining garden; the two gardens are shared (p89A). Before 1 October 2007, the Hampton property was Lord Bhatia’s only residence for the purpose of the members’ reimbursement scheme. Since 1 October 2007 it has been his London residence. Since 1 January 2009 it has been his designated main residence.

The House of Lords Finance Department has retained all members’ claim forms from March 2006: Lord Bhatia’s claims are reproduced at (pp24-40). Lord Bhatia claimed day subsistence, office costs and the mileage allowance for journeys by car for every day he attended the House in both periods for which Hampton was his main residence. Hampton is within Greater London and naturally falls outside the scope of the night subsistence scheme, the purpose of which is to reimburse members whose main residence is outside Greater London for the cost of accommodation in London when attending the House.

Facts relating to the Reigate property: circumstances

Lord Bhatia and his wife are both in their seventies. Lord Bhatia says that he and his wife have wished to downsize since 2003 in order to reduce the burden for an ageing couple of maintaining a family home no longer occupied by a family (p45K; Q71). In 2004, he proposed to buy a house in Berkshire as his main residence while retaining the Hampton property for the purpose of attending the House (p44B). That purchase did not happen. In March 2006, Lord Bhatia leased the Reigate property through a company he owns, Casley Finance Limited (p51C). The property is a two-bedroom flat “at the end of the row, close to an underground car park” in “an unprepossessing 1970s block” as described by the Sunday Times newspaper (p79K). Lord Bhatia acknowledged to a journalist from the Sunday Times that the contrast with the Hampton property is “stark” but said that it reflected his circumstances: at 76 he could not maintain the Hampton house (p90H).

The tenancy agreement specifies the permitted occupants as Sultan Alibhai Bhatia (Lord Bhatia’s younger brother), Amirali Bhatia (Lord Bhatia) and Nurbanu Bhatia (Lord Bhatia’s wife) (p51D). Throughout the period, Lord Bhatia paid undiscounted council tax on the property (pp54-6) and paid its utility bills (pp57-70).

From March 2006, Lord Bhatia says that he experimented with the Reigate property to see whether he wished to move to the area and that flat (Q94). He furnished the flat over the period to October 2007 both with newly bought furniture and items from Hampton (QQ106; 255); he kept some of his possessions in Reigate, including clothes, as he required (Q23).

The experiment concluded with Lord Bhatia deciding that he wished to live in the Reigate property (Q238). On 10 September 2007, Lord Bhatia wrote to the Finance Department to say that “As from 1 October 2007, I will be moving to my main residence at” the Reigate property and that “I will be using my Hampton House which I will use during weekdays and when attending the House of Lords” (p44G). That same September, Lord Bhatia was taken ill with a nasal condition which required a few days’ hospitalisation followed by continued medication and observation by a doctor close to Hampton (QQ78-94) but he informed the Sub-Committee that that did not prevent him from spending every weekend in the months thereafter at the Reigate property as indicated by his claims for the mileage allowance for journeys by car (pp24-6).

We asked Lord Bhatia about his lifestyle at the Reigate property once he had decided that it should be his main residence. His wife was there “occasionally”, less frequently than himself (p88D), though they both wanted to downsize (Q7). Family gatherings continued to be held in Hampton (at his adjacent daughter’s home), never in Reigate (Q41; p119L). The Bhatias made no friends in Reigate (Q40) but knew their neighbours in Hampton well (Q38). Lord Bhatia and his wife remained on the electoral roll in Hampton; only his brother Sultan appeared on the roll in Reigate (see paragraph 37 below). When interviewed by the Sunday Times, Lord Bhatia could not recall the address of the Reigate property (pp81E, 81F; 83G). Despite his intention of downsizing, the Hampton property was not put on the market, we were told both due to Lord Bhatia’s need to use it as a London residence when attending the House (p44G) and because the property market was depressed (Q25).

Towards the end of 2008, Lord Bhatia reassessed his lifestyle in the light of a further medical diagnosis (p46E) which meant that he could not go to Reigate (p88E). Despite his continuing intention to downsize to the Reigate property (Q241; pp81D; 82E), he changed his designated main residence back to the Hampton property.

Lord Bhatia’s brother, Mr Sultan Bhatia, the first-named permitted occupant on the tenancy agreement (p51D), lived in the Reigate property throughout the period (Q70) and continues to do so (Q243). It is his sole residence (p89D). He occupies the smaller of the two bedrooms (p85F; Q74) with the purpose of looking after the property in Lord Bhatia’s absence (Q74). Shortly before Lord Bhatia leased the Reigate property, Mr Sultan Bhatia separated from his wife (pp85K; 86E) and is now divorced (p96B). Lord Bhatia denied that he had leased the flat for the benefit of his brother (Q73).

Facts relating to the Reigate property: travel and frequency of visit

Lord Bhatia’s claims for the mileage allowance for journeys by car in the period when the Reigate property was his designated main residence (October 2007 to December 2008) may be divided into three (pp24-6):

i) in the month of October 2007, Lord Bhatia claimed night subsistence, day subsistence and office costs. He also claimed the mileage allowance for daily journeys throughout the month from Hampton. On this being drawn to his attention by the Finance Department, he amended his claim by letter to claim for journeys each week from and to Reigate (pp 34A; 44J);

ii) from 1 November 2007 to 29 February 2008, Lord Bhatia’s designated main residence remained in Reigate. He claimed night subsistence, day subsistence, office costs and the mileage allowance for weekly journeys by car from and to Reigate. The claimed days of travel to Reigate vary from week to week: for example the days of his return to Reigate in December 2007 were Saturday 1st, Thursday 6th, Friday 14th and Tuesday 18th. He usually travelled to London on a Monday; and

iii) from 1 March 2008 to 31 December 2008, Lord Bhatia’s designated main residence remained in Reigate. He claimed night subsistence, day subsistence and office costs. He did not claim the mileage allowance.

The Clerk of the Parliaments felt unable to determine the complaint about Lord Bhatia because Lord Bhatia had been unable to estimate the number of occasions he had visited his Reigate main residence.

Lord Bhatia expressed himself to us only in general terms as to the frequency of his visits to Reigate and indeed presented us with contradictory evidence.

He maintained to the Clerk of the Parliaments and to us that he did not keep a log of his visits to Reigate and so was unable to confirm the dates on which he had been there (p49H; Q3). His brother said that he too had no record when door-stepped by a journalist (p86A). We consider this lack of record unlikely in the light of the fact that Lord Bhatia had sufficient a record to claim the mileage allowance by month in arrears (pp24-6); that he has a PA (QQ163; 170); and a diary showing his attendance in the House (QQ185; 188). He is also sufficiently well organised to have retained the utility bills for the Reigate property in accordance with company law since he first leased it in 2006 (pp57-70). In the understandable absence of a complete record, we would have hoped that his records and memory might have provided some specific illustrations of his visits, but they did not.

When questioned on frequency he told us that, in the period before the Reigate property was his designated main residence, he “visited and resided there occasionally”, 2 to 3 times a month (Q69), between 30-50% of the time (Q64). “Reside” included an overnight stay in his meaning (Q61).

Once the Reigate property was his designated main residence, Lord Bhatia told us that he was there “regularly” (Q3), “30 or 40% of the time” (Q113) (we take “time” in this context to mean weekends when the House was sitting) and that the same pattern applied to the recess (Q266), though he told the Sunday Times that he saw no reason to be in Reigate in the recess (p92B; p92G). He also said however that, although he travelled to Reigate once a week (Q218), he might have gone to Reigate in the morning and returned to Hampton in the evening (Q108): he did not necessarily stay the night (QQ154; 224).

Lord Bhatia’s claims for the mileage allowance for journeys by car for the first five months in which Reigate was his designated main residence show claims for journeys from and to Reigate at weekends. He travelled to London on Mondays (save for Tuesday 6 November 2007) and returned to Reigate on a Thursday, Friday or Saturday. Lord Bhatia admits that he did not necessarily travel on the days set out on the claim forms (QQ199; 213): he said that he may have travelled back and forth in a single day (QQ154; 224); and his journey might not have started in Reigate (Q228). He told us that he made these claims due to a misunderstanding of the requirements of the members’ reimbursement scheme (QQ161; 197; 211), an alleged misunderstanding we consider below.

Lord Bhatia did not claim the mileage allowance for journeys from and to Reigate for the remaining 10 months in which the property was his designated main residence (pp25C; 36A-38F). He gave two reasons for his decision to stop claiming. First, he described the system as “cumbersome” (p48K). Then, in oral evidence, he presented the system as inflexible and difficult for his circumstances (Q3).

We found Lord Bhatia’s account of the frequency of his visits to Reigate to be unconvincing. We are however required to determine this case at least on the balance of probabilities. On the available evidence, we accept that over the period of designation Lord Bhatia visited the Reigate property on 30% of weekends when the House was sitting; that some but not all of these visits included an overnight stay; and that this pattern continued to some extent in the recess.

The issues

The case raises three issues: 1) whether Lord Bhatia’s designated main residence in Reigate met the criteria endorsed by the House Committee for these investigations; 2) whether Lord Bhatia correctly claimed for travel from and to that main residence; and 3) if the facts identify a wrongly designated main residence, whether Lord Bhatia acted in good faith in making his designation and claims for night subsistence and travel.

Issue 1: whether Lord Bhatia’s designated main residence met the criteria endorsed by the House Committee

On 26 January 2010, the House Committee endorsed the Clerk of the Parliaments’ approach to determining allegations about the members’ reimbursement scheme, as recorded in the published extract of the minutes of that meeting (p16E):

“He [the Clerk of the Parliaments] emphasised that he was operating under the current scheme, one of the weaknesses of which was that there was no clear definition of a main residence. He had however taken the view, within the context of the individual assessment of each case, that there needed to be a minimum threshold beyond which it would be inappropriate for a Member to designate a property as a main or only residence, and consequently claim overnight subsistence when staying in London.

He sought the endorsement of the Committee of the criteria which he was incorporating into his assessment of cases where frequency of visits was an issue: i.e. that the main residence had to be visited for a minimum of one weekend per month over the year when the House was sitting and for periods during recesses. These factors would be taken into account, along with other evidence, when assessing the validity of the designation of a main residence. He drew the attention of the Committee to the fact that it was probable that more stringent requirements would be a feature of the new scheme for Members’ expenses.

He also raised the issue of whether a property that was occupied by a relative other than a spouse or partner could in any circumstances be designated as a main residence under the current scheme. It was felt that this could in very specific circumstances be appropriate, subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities.”

We consider the criteria endorsed by the House Committee to be binding on us: it is the principal domestic committee of the House and explicitly responsible for the members’ reimbursement scheme (p5A).

“Visit” is used in the criteria in the context of “weekend”. We consider that “visit” must include an overnight stay. We also consider that “one weekend per month” is not a minimum threshold set by the House Committee, but the minimum frequency of occupation when the House was sitting subject to “other evidence”. It is a necessary but not sufficient criterion. In the case of a property occupied by a relative other than a spouse or partner, “very specific circumstances” are required, “subject to the thresholds established and depending on the detail of the Member’s connection with the property, including relevant financial responsibilities”.

The Committee for Privileges’ and our own report on Lord Clarke of Hampstead’s use of the members’ reimbursement scheme, agreed to by the House on 6 April 2010, is also relevant. In that report, we found that:

“17. It is clear to us that a member may only claim under the scheme i) if they have stayed overnight away from their main residence; and ii) they have attended the House. There is no ambiguity about these conditions ...

23. Our interpretation of the resolution, General Guide and Quick Guide taken together is that a member who maintained a residence in London for the purpose of attending the House could reasonably claim that the night subsistence provision was a flat rate allowance intended to reimburse the member for the costs of maintaining such a residence (General Guide paragraph 4.4.2). A member who did not maintain a residence in London was however entitled only to claim for the recovery of actual expenses (General Guide paragraph 4.4.1). The former is no longer the case as the word “allowance” was removed from the guidance in April 2009.”

The report from the Committee for Privileges was agreed to by the House and is binding.

Recent cases

In the period since the House Committee endorsed the criteria for determining a main residence for the purpose of these investigations, the Clerk of the Parliaments has determined a number of complaints raising similar questions (pp17-23) and a further number of media allegations against members who were not subsequently complained about. These decided cases do not however form any precedent. Each of the Clerk’s published reports constitutes the application to specific circumstances of the criteria endorsed by the House Committee: the questions the Clerk faced when deciding the cases he did, and the questions we face in deciding this case, are questions of fact. They establish no principle, rule or threshold. The Clerk’s several decisions are thus not statements of precedent and they do not bind us as we determine the facts of this case. We have proceeded on the basis that we may take into account any fact relevant to the circumstances, even if the Clerk did not take such a fact into account in the cases he decided.

Opinion of the Sub-Committee

Frequency of visit

On the available evidence, we accept that over the whole period of designation Lord Bhatia visited the Reigate property on 30% of weekends when the House was sitting; that some but not all of these visits included an overnight stay; and that this pattern continued to some extent in the recess. This meets the minimum threshold for frequency of visit in the criteria endorsed by the House Committee and by which we are bound.

Criteria when a property is occupied by a relative other than a spouse

Frequency of visit is a necessary but not sufficient criterion, subject to “other evidence” under the criteria endorsed by the House Committee. Lord Bhatia was financially responsible for the property: his company was responsible for the rent and he paid the council tax and utility bills. According to the criteria, that would be sufficient to determine the case if it were not for the fact that Lord Bhatia’s brother, Mr Sultan Bhatia, lived in the property before, during and after the period in which it was designated as Lord Bhatia’s main residence. The House Committee set additional criteria for such circumstances (p16J):

Thus, frequency of visit remains essential but there is i) a further dominant criterion: “the detail of the Member’s connection with the property, including relevant financial responsibilities”; and ii) a subordinate criterion: “very specific circumstances”.

Connection with the property

The criteria endorsed by the House Committee provide no guidance as to what constitutes a sufficient connection with the property for it appropriately to be designated as a main residence in these circumstances. We thus have to establish our own criteria to decide that fact. We consider that the strength of the member’s connection with the designated property must be such to find that, irrespective of occupation by a relative other than a spouse or partner, the property remained Lord Bhatia’s “main residence” within any natural meaning of those two words taken together. We accept that “main residence” is not defined either in the resolution establishing, or in the guidance on, the members’ reimbursement scheme. The consequence is that it would be unreasonable retrospectively to apply a single definition. It does not mean however that a designation which defies any natural meaning of those words may be allowed.

In favour of a sufficiently close connection for the Reigate property to be his main residence is the fact that Lord Bhatia was financially responsible for it; and he kept some of his possessions there, including clothes, as he required. Against a sufficiently close connection is that Lord Bhatia visited the property on only 30% of weekends when the House was sitting; and that only some of these visits included an overnight stay. He was not there with any greater frequency or duration in the recess. His wife was there less frequently than himself, though they both wanted to downsize; his doctor remained in Hampton; the Bhatias made no friends in Reigate; and Lord Bhatia and his wife remained on the electoral roll in Hampton. We consider that Lord Bhatia’s connection with the Reigate property was insufficient for it to meet any natural meaning of “main residence” for the purpose of the members’ reimbursement scheme, especially in the light of his continued ownership and use of the Hampton property.

We thus conclude that Lord Bhatia did not have a sufficient connection with the Reigate property to have designated it as his main residence given that it was occupied by a relative other than a spouse or partner. He was therefore wrong to have designated it as his main residence for the purpose of the members’ reimbursement scheme and to have claimed night subsistence when away from it.

With the assistance of the Finance Department, we have calculated that Lord Bhatia wrongly claimed £27,134 in night subsistence over the period. Lord Bhatia should be required to repay this amount.

Specific circumstances

Our finding on Lord Bhatia’s “connection with the property” determines this issue because that criterion is dominant in the test. For completeness however we also address the question of “very specific circumstances”. Lord Bhatia claims to have leased the Reigate property for himself and his wife to downsize from Hampton. He says that his brother occupied the property only to look after it in Lord Bhatia’s absence. Had his connection with the property been sufficient, such circumstances would in our opinion have enabled Lord Bhatia to have designated the property as his main residence despite its occupation “by a relative other than a spouse or partner”. These were not however his circumstances. First, we find below that this was not an exercise in downsizing (paragraphs 68 to 70). Secondly, we find that Lord Bhatia leased the property for the benefit of his brother: Mr Sultan Bhatia is the first-named permitted occupant on the tenancy agreement; he was the sole person on the electoral roll for the property; it is his sole residence; and shortly before Lord Bhatia leased the Reigate property Mr Sultan Bhatia separated from his wife and is now divorced.

Issue 2: whether Lord Bhatia should have claimed for travel from and to his main residence

Lord Bhatia should not have designated the Reigate property as his main residence. Claims for travel may only be made for journeys made between a main residence and Westminster in respect of parliamentary duties (pp6K; 15B). As Reigate was not his main residence, Lord Bhatia was not eligible to claim for travel from and to Reigate. We do not need to find whether he made the journeys for which he claimed in the five months of his designation in which he made travel claims, though he admits that he did not make the journeys either necessarily from and to his designated main residence or on the dates for which he claimed.

With the assistance of the Finance Department, we have calculated that Lord Bhatia wrongly claimed £312 under the mileage allowance for journeys by car over the period. Lord Bhatia should be required to repay this amount.

Issue 3: if the facts identify a wrongly designated main residence, whether Lord Bhatia acted in good faith in making his designation and claims

Having found that Lord Bhatia wrongly designated the Reigate property as his main residence and made claims for night subsistence and travel to which he was not entitled, we now turn to the issue of good faith. If Lord Bhatia did not act in good faith when making his designation and claims for night subsistence and travel, then he is liable to sanction. If however Lord Bhatia had good reason to believe that his designation and claims were valid, sanction might be inappropriate.

In correspondence with the Clerk of the Parliaments, Lord Bhatia says (p46D):

“I have always acted in an open and transparent manner in relation to reimbursement of expenses for overnight accommodation as per the Guideline set out in the relevant Members’ Reimbursement Allowance Scheme General Guide that were in force at the relevant time ... All claims that I made... were properly made and I did so with the full knowledge of the House of Lords’ Accountants Office.”

In oral evidence, Lord Bhatia stressed several times that he acted in good faith throughout (Q3).

In testing Lord Bhatia’s good faith, we look separately at his designation of main residence and claims for night subsistence on the one hand and his claims for the mileage allowance on the other.

Understanding of the scheme, designations and claims for night subsistence

Lord Bhatia relies on his understanding of “the rules in place at the time” (Q3). In terms of designation and night subsistence, he was clearly aware of the available guidance (Q3) and the extent of the scheme. In testing Lord Bhatia’s good faith, we are not assessing his conduct against the criteria endorsed by the House Committee but against any natural understanding of the scheme and “main residence” that might be held by a reasonable person. This is because the criteria endorsed by the House Committee were not designed retrospectively to define “main residence” for the purpose of the scheme but were designed only as criteria to be applied to the retrospective examination of certain members’ claims. We asked Lord Bhatia for his understanding of “main residence”. He described it as his “principal home” (Q263), “where I live” (Q262). Lord Bhatia’s two definitions of “main residence” are acceptable natural meanings of “main residence” for the purpose of the scheme: he was under no misapprehension of the terms of the scheme.

Lord Bhatia’s stated purpose in acquiring the Reigate property was to downsize from the Hampton property. This would be a legitimate reason to change one’s designated main residence. What we must now consider is whether the facts demonstrate a failed but genuine attempt at downsizing or a deliberate misrepresentation of the position.

In favour of a failed but genuine attempt at downsizing his principal home ‘where he lives’ are his age; his experimentation with the property for 18 months before he designated it as his main residence; that he furnished the property in part from Hampton; that he kept some of his possessions in Reigate, including clothes, as he required; and that his health deteriorated at the end of the period leading to redesignation.

Against this being a genuine attempt at downsizing is that Lord Bhatia made no concentrated attempt to live in the Reigate property despite his understanding of “main residence” and telling the Finance Department that he would be “moving to” the Reigate property: regular day-trips; infrequent weekends; and no greater residency in recess. His wife went there less frequently than he did. The property was furnished without reducing the scale of Lord Bhatia’s possessions (Q255) and with the intention of retaining the Hampton property for the purpose of attending the House (p44G). We have also already found that Lord Bhatia leased the Reigate property for the benefit of his brother. This was not an exercise in downsizing.

We find that Lord Bhatia’s designation of the Reigate property was a deliberate misrepresentation of his domestic arrangements made with the intention of enabling Lord Bhatia to make use of the night subsistence element of the members’ reimbursement scheme.

Claims for the mileage allowance for journeys by car

We have set out above the facts of Lord Bhatia’s claims for the mileage allowance for journeys by car from and to Reigate (paragraph 38): for the first five months that Reigate was his designated main residence, he claimed for travel and, in particular, he claimed for journeys on days that he did not necessarily make them.

Lord Bhatia stopped claiming the mileage allowance at the end of February 2008 but continued to claim night subsistence until the end of the year. He stopped claiming the mileage allowance because the system was inflexible and did not meet his needs (QQ3; 213-14) and was too cumbersome (p48K).

Lord Bhatia suggested that his understanding of the scheme was that journeys to the main residence had to be claimed on a Friday and the return to London on a Monday (QQ161; 197; 211); and that he was entitled to a single return journey from and to his main residence irrespective of whether he had made the actual journey (Q190). He stressed this understanding of the rules (QQ156; 161; 163). He came to this understanding through his PA, who consulted the Finance Department (Q163) and prepared his claim forms for signature (Q170). He did not consult the Finance Department himself (Q169).

Lord Bhatia’s understanding of this element of the scheme is wrong. The wording of the Quick Guide is clear: “Members of the House of Lords... are entitled to recover the costs of travel... incurred in connection with their parliamentary duties... Travelling Expenses - These may be claimed for journeys between main place of residence in the United Kingdom and London” (p15B). The clarity of this provision is such that Lord Bhatia’s ostensible understanding of it was unreasonable.

In any event, Lord Bhatia’s claims do not bear out his ostensible understanding of the rules: he often claimed for journeys to Reigate on a day other than Friday (pp24-6; Q205) and he even did so in his own hand (p34E); he did not find the scheme so cumbersome as to deter him from claiming travel from Hampton (QQ249; 250). We thus consider that Lord Bhatia did not truly hold the understanding of the rules with which he presented us.

We find that Lord Bhatia made the five months of claims for the mileage allowance for journeys by car from and to the Reigate property with the intention of adding verisimilitude to his designation of that property as his main residence.

Conclusion

We find that Lord Bhatia did not act in good faith in designating the Reigate property as his main residence and in claiming night subsistence and the mileage allowance for journeys by car from and to that property.

Sanction

In terms of his designated main residence and claims for night subsistence, Lord Bhatia deliberately misrepresented his position to take advantage of the members’ reimbursement scheme. In terms of the mileage allowance, not only did Lord Bhatia make false claims but he presented the Sub-Committee with an understanding of the scheme which no reasonable person could hold; and he did so in an attempt to disguise the deliberate nature of his deception.

Lord Bhatia maintained throughout that he had acted honestly and in good faith; so he has not yet either repaid money or apologised.

We recommend that the House sanction Lord Bhatia by requiring him to make a personal statement of apology to the House and thereafter suspending him from the service of the House for one year or until he has repaid the sum of £27,446 wrongly claimed, whichever is the later. His apology must be unconditional, and agreed in advance with the Chairman of the Sub-Committee, to be sufficient. We consider that the suspension should be renewed in the next Parliament if Lord Bhatia has not repaid the money by the end of the current Parliament, but that can only be a matter for the next Parliament.

House of Lords Journal

The Conduct of Lord Bhatia

Introduction

Process

The Sub-Committee’s findings

Lord Bhatia’s appeal

Repayment and apology

The views of the Committee

Sanction