Peterborough: Legal Action For MP

9 May 2013, 13:18 | Updated: 9 May 2013, 13:26

The expenses watchdog has started legal action to recover £54,000 from the Peterborough MP.

The legal action is over taxpayer money used to pay mortgage interest on a property in Stewart Jackson's constituency.

Conservative MP Mr Jackson [pictured - above] was one of 29 MPs told to hand over a total of almost £500,000 to the Independent Parliamentary Standards Authority (Ipsa) to cover a proportion of the increased value of properties funded by their expenses. 

Mr Jackson said he was mounting his own legal challenge against Ipsa, which he accused of over-estimating the capital gain on his family home in his Peterborough constituency and then rushing into "heavy-handed and disproportionate'' litigation to recover the sum. 

The other MPs involved have agreed to pay the sums demanded in full. 

The watchdog moved to ban the use of Commons expenses to pay mortgage interest in May 2010, in the wake of public fury over "flipping'' and other abuses. 

However, transitional arrangements were put in place permitting MPs elected before 2010 to keep claiming the money up to last August - as long as they agreed to return any potential capital gain. 

Some 71 MPs claimed almost £1 million between them over the 15-month period but the majority were not asked to make repayments, because surveyors' reports or sale prices showed that their properties had not gained in value. 

However, 29 of them were asked to make payments to reflect the increased value of houses and flats - many of them in London, which had bucked the sluggish housing market prevailing in the rest of the country at the time.

The largest repayments were made by Tory MP for Clwyd West David Jones, who returned £81,446, and DUP East Londonderry MP Gregory Campbell, who handed over £61,403, both for properties in London. 

In both of these cases - and that of Mr Jackson - the MPs were asked to repay more than they had received because the value of their property was calculated to have risen by more than the cost of the interest payments. 

In total, the 71 MPs claimed £926,159.75 of taxpayer cash to cover mortgage interest over the 15-month period, with the largest claims made by Labour's Michael Connarty - who received £34,168 relating to a property in London of which he has returned £6,833 - and Mr Jackson, who received £32,494. 

The properties were formally valued at the beginning and the end, and the 29 MPs were told to hand back a total of £484,828.49. 

Most have now paid in full, though in seven cases Ipsa has agreed to accept payments in installments, with the final repayments due in April 2015. 

Only Mr Jackson has refused to agree a repayment plan as he rejects the valuation placed on his property. 

In a statement, he said: "Ipsa's legal proceedings are heavy-handed and disproportionate, and are clearly intended to bully me into submission."

He said: "All British citizens are entitled to seek legal adjudication if the state's actions are unfair or possibly illegal, and so I will be forcefully resisting their precipitous litigation. 

The essence of the dispute is my challenge of the valuations of 2010 and 2012.

Ipsa are seeking a cash sum on a so-called capital gain 'profit' on my family home, in which I live and have not sold.

The money which Ipsa is demanding retrospectively is more than the total amount I received when I was claiming mortgage interest and the property is now valued at less than we purchased it for in 2005. 

Their assumption is that the value of my property rose by almost 20% over two years whilst house prices fell by 3% in my constituency in the same period.

At my own expense, I have paid for an accurate recent expert valuation and I have made a reasonable offer to Ipsa to settle the matter and reduce the legal costs which will have to be met by the taxpayer. 

My valuation recognises the need for proper recompense to be paid to the taxpayer to reflect their support for my housing costs between 2010 and 2012, in order to fulfil my duties as both a London-based legislator and a constituency MP. 

Ipsa have negotiated with 70 other MPs in a secretive and arbitrary manner but in respect of my case, regrettably, they have refused to negotiate. 

I am merely seeking fair play and consistency, and will pursue legal action to receive it.'' 

An Ipsa spokesman said: "One of the most damaging aspects of the expenses scandal was the practice where MPs got taxpayer support to own a second home. 

That is why we said we would stop this, and we have now done so. 

The final stage in bringing this to an end was our allowing a short transition period for MPs who were already committed to second mortgages. 

But in doing this we set the condition that the taxpayer would want its share of any increase in the value of the property. 

Today we are publishing that these capital gains are worth almost £500,000 to the taxpayer. 

MPs knew this was the deal and agreed to the conditions at the start. 

In valuing the property, it was important that we didn't rely on amateur valuations or guesses from the web. 

Instead, we demanded formal valuations at the start and end, from the Royal Institute of Chartered Surveyors - the most authoritative voice in this field. 

We would only accept valuations from RICS members or fellows - providing proper assurance on the value of the properties. 

We required all MPs to provide these independent valuations at the start and end of the claim period. 

And we published the way in which the capital gain would be calculated. 

The same method of calculation has been applied to all 71 cases. 

Stewart Jackson provided us with two RICS valuations. 

As he has been unwilling to pay the £54,000 due we have issued proceedings to recover the sum through the High Court.''