Monday, May 18, 2009

The Monday morning blog: equity release for MPs - all within the rules of course

I was late to bed on Saturday evening, and just before I decided to call it a day, I caught the news on Sky that Fraser Kemp and David Clelland were the next features of the Telegraph's rolling campaign to out the more interesting details of MP expenses.

Having suggested to colleagues for a few weeks that the expenses of one MP in particular would make interesting reading, I ended up receiving a string of phone calls on Sunday morning, some of them before I was fully awake and out of bed, congratulating me on my prediction and urging me to get a copy of the Sunday Telegraph. So off I went to Sunniside Chapel Stores, via the allotment to open the greenhouse window, and bought a copy of the Telegraph for the first time in my life. And for good measure, I bought a copy of our regional newspaper, the Sunday Sun, which was featuring David Clelland, MP for Tyne Bridge (which is mainly in Gateshead) on the front page.

I am not going into detail at this point about Mr Clelland's expenses other than to outline them. He bought out his then partner's share of their jointly owned flat in London, allowing her to realise a substantial capital gain. Mr Clelland paid for this gain by increasing the mortgage on the flat and then passing the increased costs on to the Fees Office. I presume that Brenda paid capital gains tax on the substantial gains she made on this investment in the "booming" London property market, as Mr Clelland described it. Shortly afterwards, Brenda became Mrs Clelland.

Well, what an interesting equity release scheme for MPs! And of course, it's on expenses. I hope Mrs Clelland invested the money wisely.

Meanwhile, Fraser Kemp must have been three sheets to the wind when he bought 16 sheets for his one bedroom flat in London, all on expenses. It is mind boggling to think of what he needed so many sheets for. The quantity outstripped the requirements of a modest bed and breakfast establishment or a hospital ward! No doubt he turned as white as a sheet when he was exposed.

And finally to mortgages. Having gone through the reverse of equity release last year by paying off a chunk of our mortgage on our house, it is definitely a day to remember! (For us it was made more memorable when our bank temporarily went AWOL with our cash.) MPs Chaytor and Morley must have been on interest only or endowment mortgages (the figures for interest payment claims were just too high for a repayment mortgage that was about to be paid off). To pay off an interest only or endowment mortgage, the mortgagee has to hand over the money for the outstanding loan. Interest of £800 a month (which was what was claimed by Morley) equated back then to a mortgage in the region of £150,000. I can't imagine any circumstances in which a person will forget about having written out a cheque or carrying out a bank transfer for such a huge sum of money. So I find their explanation that it was all a mistake and they hadn't been aware that they had paid off their mortgages a bit hard to swallow.

No doubt, I will be returning to MP mortgage arrangements and equity release in the not too distant future.

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Andy Swaddle said...

It seems like Nigel Farage of UKIP has blew the party out of the water too. He has claimed £2,000,000 pounds in expenses in 10 years in the European parliament. No wonder they don't really want to leave Europe. They may sound like they do. But just another false flag party to secure the protest vote away from the BNP. Whilst keeping their other euro chums from the other 3 in power there also.

Andy Swaddle.

Anonymous said...

18 May 2009

"Noses in troughs"...