George Osborne was today ordered to repay £1,666 after a House of Commons watchdog ruled he had committed an "unintended and relatively minor" breach of expenses rules over claims for the mortgage on his second home.
It came after the Parliamentary Standards Commissioner found that the Shadow Chancellor breached the rules in two years in the claims he made for mortgage interest on his property in Cheshire.
But he also found that the mistake was not intended. Overall Mr Osborne over claimed by £1936. He has already paid back £270.
The report is a slight embarrassment for Mr Osborne, particularly given his current job and the prospect of him becoming the next Chancellor.
Commissioner John Lyon conducted an investigation into Mr Osborne’s claims after complaints that he claimed for the interest on a £450,000 mortgage on his farmhouse in Cheshire when the property cost him only £445,000.
However, the commissioner did find that Mr Osborne did break the rules over his decision in 2001 to nominate his property in Cheshire as his main home because he was making claims on his London property to meet the mortgage interest costs of his Cheshire property. He was not allowed to claim those costs because he had identified that property as his main home.
But the Commissioner accepted that Mr Osborne had made the arrangement on the basis of advice from the Fees Office which was "flawed." There was also no evidence that Mr Osborne personally benefited from the arrangement and concluded it would be "unfair to see this as serious breach of the rules." In a letter to the committee chairman earlier this week, Mr Osborne said he was happy to accept Mr Lyon’s conclusions and made clear he had already offered to return the overpayment in full.
Responding to today’s ruling, the shadow chancellor said: "I am happy to accept the Committee’s report. I am glad that they acknowledge that any breaches of the rules were not intentional, not major, and did not provide me with any significant financial benefit. "As the Committee appreciate, I always sought to minimise the cost of my expenses to the taxpayer, and followed the advice I was given. The Committee has now decided that advice was flawed.
"Last year I offered to pay back any money that had been inadvertently over claimed due to the flawed advice I received, and the Committee has accepted that offer."I understand the damage the expenses crisis has done to Parliament, and the paramount importance of restoring trust in our politics. I want to ensure that the claims I have made are entirely beyond reproach."
Mr Osborne was found to have committed another breach of the rules, although again the commissioner accepted it was not he basis of "flawed" advice.
Mr Osborne pointed out that he had also taken out an increased mortgage in 2005, to cover £10,000 for repairs to the Cheshire house and £25,000 for costs related to the original purchase.
It was in relation to this increased borrowing that the commissioner found he breached the rules, which did not allow him to claim for interest payments in relation to the costs of the original purchase. It was also not permitted at that point for MPs to claim interest on the cost of repairs added to their existing mortgage, though this rule was changed soon afterwards.
Again, Mr Lyon found that the shadow chancellor was "acting in accordance to flawed advice given by the House authorities when he added these costs to his borrowing".
Following his six-month investigation, which was sparked by a complaint from the chairman of the Tatton constituency Labour Party, Mr Lyon concluded: "I do not regard as particularly serious the breaches of the rules which I have identified.
"Mr Osborne has been consistent in pointing out that he took advice at all times from the House authorities and acted on that advice.
"The breaches were not major ones, were not intentional and did not provide Mr Osborne with any significant financial benefit. He has offered to pay back the excess sums he claimed for and received in 2005-06 and 2006-07. These amount to £1,936, less the sums he has already repaid."