Defence minister says he did not expect taxpayer to foot entire bill and was simply asking fees office to help him with calculations

• Polly Curtis
• guardian.co.uk, Thursday 10 December 2009 14.57 GMT
• Article history

The defence minister Quentin Davies bore the brunt of the expenses row today after it emerged he had submitted a £20,700 bill for repairs to the roof and bell tower of his stately home.

The MP for Grantham and Stamford made the claim, then appeared to retract it in a letter to fees officials 10 days after the Telegraph first began reporting on details of the expenses scandal, documents included in the 40,000 released today show.

Davies, who defected to Labour from the Conservatives in 2007, denied that he intended the taxpayer to fund the refurbishment of his bell tower, saying he had only been provided with a single invoice, which he submitted expecting only £5,000 – roughly half the cost of the roofing repairs – to be reimbursed.

But his bell tower threatened to become the "duck island" of the latest expenses row. When the Daily Telegraph began reporting leaked details of expenses in May, the Tory MP Sir Peter Viggers's claim for his £1,645 duck island became a focal point of public anger.

A Downing Street spokeswoman insisted the prime minister had "full confidence" in Davies, saying it was up to the defence minister to decide whether to repay the claim. "The prime minister has in the past and would continue to encourage all MPs to repay any expenses which were excessive or indeed contravened the guidelines set out," the spokeswoman said.

The work was carried out on the roof of Davies's 18th-century home in Lincolnshire in December 2008. It included restoration work using handmade York bricks and lead guttering.

Davies's office wrote to officials in February requesting that the claim – which took the annual total claim on his second home way above the annual limit – be allowed in the interest of "transparency", arguing that he would otherwise have to engineer the bill to fit within the £24,006 cap on claims for second homes. The letter makes it clear that he expected fees office officials to reduce the payment to the official limit.

"I would be grateful if you could credit me with the amount claimed, duly reduced to take account of the allowance limit," it says.

He subsequently wrote to the officials on 18 May as pressure was mounting on parliament after the Daily Telegraph revelations, claiming he was "emphatically not seeking reimbursement" for the bell tower. Instead, he provided a further quote claiming £5,380, which brought the total claim for the year exactly to the £24,006 limit.

Davies said he had only submitted the total bill for £20,700, which was also handwritten into the expenses form, because he had received one invoice covering the roof and bell tower repairs.

"I knew perfectly well there wasn't £20,000 available to me. The letter instructs the fees office to pay only the amount available to me. I certainly didn't withdraw the claim. I sent them the quote to make it clear that this was in relation to the repairs to the roof and that was around £10,000, of which I was claiming half. That seemed reasonable," he said.

"Of course I wasn't trying to claim that [the full £20,700]. I couldn't possibly have claimed that."

He later added: "The bell tower is an integral part of the roof. If it had collapsed, as it would have done if it had not been repaired, it would have smashed through the roof. I did not claim, however, in respect of it and I never had any intention of doing so. Moreover, I never intended my claim to be for more than a portion (around 50%) of the roof repairs alone. This seemed to me – and seems to me – reasonable.

Six MPs and peers may soon face criminal charges of fraud following investigations by Scotland Yard into the abuse of the Parliamentary expenses system. 

By Robert Winnett and Richard Edwards
Published: 10:00PM GMT 18 Nov 2009

Clockwise from top left: Lord Clarke of Hampstead, Baroness Uddin, Lord Hanningfield, Elliot Morley, David Chaytor, Jim Devine

The Daily Telegraph understands that detectives will imminently pass files on Labour MPs Elliot Morley, David Chaytor and Jim Devine, and peers Baroness Uddin, Lord Hanningfield and Lord Clarke of Hampstead to the Crown Prosecution Service.

Keir Starmer, the country’s top prosecutor, is expected to make a decision on whether to prosecute the politicians as early as January, before a General Election.

The Director of Public Prosecutions will decide whether the MPs and peers face court on counts of fraud, which carries a maximum sentence on conviction of 10 years, or false accounting, for which the maximum penalty is up to seven years.

Police and criminal lawyers are confident that charges will be brought.

A team of detectives have been assessing and investigating cases for the past five months since The Daily Telegraph’s Expenses Files investigation disclosed widespread abuse of parliamentary allowances.

They are now on the verge of finalising their files to send to prosecutors.

A Westminster source said: “We have heard that things are about to come to a head”. A spokesman for the Crown Prosecution Service said that they had not yet received files, but it is understood that there are expected imminently.

Police are liaising with Sir Thomas Legg, who is carrying out a full audit of MPs expenses, and are believed to have taken witness statements from senior civil servants and members of the Fees Office who processed the suspected claims. Witnesses, including constituency workers and banking officials, have also been interviewed by police as detectives build up a file of evidence.

A small team of officers who specialise in financial investigations have carried out a low profile inquiry, with no arrests. It is believed that MPs and peers have co-operated with requests from them for evidence from their emails and bank statements.

The most serious suspected frauds are considered to be those of Mr Morley and Mr Chaytor who both claimed thousands of pounds for “phantom” mortgages that they had already paid off.

Mr Morley, the former agriculture minister, claimed £16,800 for a mortgage that did not exist and also admitted wrongly claiming £20,000 for mortgage capital repayments in contravention of rules.

Mr Chaytor admitted making an “unforgiveable error” in “accounting procedures” when claiming almost £13,000 in interest for a mortgage that he had paid off. Police will also be interested in why the Bury North MP also claimed almost £5,000 under his office allowances to pay his daughter, Sarah Chaytor, under an assumed name of “Sarah Rastrick’’.

Mr Devine, a Scottish Labour MP, submitted invoices for electrical work worth £2,157 from a company with an allegedly fake address and an invalid VAT number.

Detectives from the Metropolitan police have made several trips to Mr Devine’s constituency of Livingstone to interview witnesses.

Lord Hanningfield, the Conservative peer who is also the leader of Essex County Council, claimed £100,000 over seven years for staying in London despite living just 46 miles from the capital. He has been investigated over whether he was returning to his home in Essex while claiming “overnight allowances’’ for staying in London.

He has a full-time chauffeur provided by the local authority at taxpayers’ expense and his claims from both parliament and the council are being studied.

Lord Clarke, a former Labour Party chairman, admitted his “terrible error” in a newspaper interview after claiming up to £18,000 a year for overnight subsistence when he often stayed with friends in the capital or returned to his home in St Albans, Herts.

Baroness Uddin allegedly claimed £100,000 in parliamentary allowances by registering as her main home a property in Maidstone, Kent, that was apparently barely occupied.

MPs Shahid Malik and Tony McNulty will face no further action, and police have ruled out criminal investigations into the practices of “flipping” or avoiding capital gains tax.

However HM Revenue and Customs has launched the inquiries into 27 MPs.

MPs could avoid tax on their expense claims on the basis that they were “wholly, necessarily and exclusively’’ incurred in relation to the performance of their parliamentary duties.

MPs found to have claimed for non-essential items now face a tax bill of up to 40 per cent on their value. They may also have to pay interest and fines on the back-dated tax bills.

In May, HMRC wrote to all MPs asking if they wished to come forward and make voluntary payments. The authorities said last night they had opened formal inquiries into 27 MPs.

It is thought that they are also scrutinising MPs who avoided capital gains tax when selling second homes; those who claimed for personal tax advice; and travel claims for journeys between their homes and office if they did not live in their constituencies or London, where they are working.

Mr Devine and Mr Chaytor denied last night that they had been formally questioned by police. Lord Clarke refused to comment.

Mr Morley said: “I have always made it clear that I am not guilty of any offence and that I am very happy to co-operate with the police, and the parliamentary authorities and procedures. I have been advised not to comment on press reports particularly when they are based more on speculation than fact.”

Baroness Uddin and Lord Hanningfield were unavailable for comment.

A Met police spokesman refused to comment on the ongoing investigations.