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George Osborne denies expenses greed over 'flipping' allegations
Joe Murphy, Political Editor11.06.09
George Osborne today denied milking his Commons expenses after claims he "flipped" homes after taking out a £450,000 mortgage.
The shadow chancellor insisted he made no personal gain from an arrangement that saw him buy a large Cheshire farmhouse as a second home.
Mr Osborne bought the farmhouse as a constituency home 10 months before winning Tatton at the 2001 general election.
However, instead of taking out a mortgage on it, he funded the purchase by increasing the mortgage on his London home where he and his wife had lived full-time since 1998.
On taking his seat, Mr Osborne designated his London family home as a second home, even though it was effectively still his main residence, and was thereby able to claim for mortgage interest payments on it.
The farmhouse was listed as his main residence at the time.
Two years later Mr Osborne reversed the arrangement. He took out a £450,000 mortgage on the farmhouse, Harrop Fold Farm, and designated it as a second home, allowing him to claim interest on the loan.
He has since claimed up to £100,000 on the property, which is on the edge of Peak District National Park. Asked why he needed such a large property as a constituency home, his spokesman said: "It is his second home. No rules have been broken."
The Times reported that Mr Osborne was able to reduce the loan on his London home, which he sold for £1.45million in 2006, to less than £200,000.
Mr Osborne denied he had made any extra money from the arrangement and that, therefore, it was unfair to accuse him of flipping. The shadow chancellor is independently wealthy, being heir to the Osborne & Little wallpaper founder, Sir Peter Osborne.
In a statement his office said: "George has never switched designation for personal advantage. There has been absolutely no impropriety and any suggestion of such is wrong.
"His actions have been entirely reasonable as all the costs are associated with his need to have a second home in Cheshire, and his arrangements have always sought to minimise the interest costs to the taxpayer."
A Commons official had approved the original arrangement, which was intended to be a stop-gap until a mortgage on the farmhouse had been sorted. Mr Osborne said that his interest claims on the Cheshire home were "now close to zero" because he took out a tracker mortgage.
However, the disclosures opens Mr Osborne at least to claims that he was willing to bend the rules for the sake of convenience. Labour MP John Mann went further: "George Osborne has some very serious questions to answer here. What was the capital-gains tax position of the home that he sold?"
Mr Osborne is not in the category of serial flipping occupied by figures such as Hazel Blears, who was accused of refurbishing different properties.
He was advised to claim on his London home because the mortgage on it was paying for the true second home, the farmhouse. In 2003 he was allowed to change the loans without incurring penalty fees. He then claimed against the new farmhouse mortgage payments.
The shadow chancellor largely escaped the expenses furore. But the Daily Telegraph reported that he was rebuked by the Commons authorities for using public money to fund his "political" website and that he claimed money for a chauffeur-driven car which he has agreed to repay. Tory leader David Cameron has said that it was "not good enough" for MPs to say they abided by the much-criticised rules on expenses. He has banned "flipping", where MPs repeatedly change the designated second home.
Mr Osborne's mortgage arrangements did not emerge in the recent reports on MPs' expenses because the receipts dated back to only 2004.
Reader views (25)
MP's/ Politicians or whatever you want to call them are BIG TIME FRAUDSTERS.All political parties need a wake up call from the voters via the next general election.
The majority of tax payers are trying to keep the only roof they have over their head with a struggle. It is a bitter pill to swallow when MP's are fiddling the taxpayers to fund/decorate their second homes.
- Hazel, london,UK
Stephen,yes, let us have a General Election,lets rid ourselves of this gang of scoundrels,and elect a different gang.
- Patrica Jane Felix, Hampstead
I don't know how David Cameron can be so sanctimonious when he is independently wealthy to the tune of £30 million, yet used £75,000 of taxpayers' money to pay off some of the mortgage on one of his properties. There should be a mass-clear out with by-elections if necessary, and then an election. The one of the few who has consistently come out of this scandal with any credibility is old sage Vince Cable.
- Sonia M., St Albans, Herts
Jacqui in Peterborough- WHAT? talk about a stream of blinkered drivel!
- Fresh, London
Cameron arranged his affairs so as to get the maximum £24,000 a year allowance for a second home mortgage. So David Cameron was also playing the MPs expenses game to the max.
What a hypocrite when he criticises and censures other MPs!
Finally, of course,David Cameron is a very rich man and so never actually needed a mortgage to buy property in the first place.
- Esther, Brighton
You can't trust ther Tories whatever else they tell you. Leopards don#t change their spots overnight
- Keith Price, Luton, England
I think John Mann would do well to look at his own party what about Hoon made himself a millionaire Beckett Brown he flipped and hid the cost of a kitchen so that it did not look so bad what about Hain money laundering and having two second homes trying to claim for two and employing his 88 year old mother what about Becket too employing her husband and Smith employing her husband to look after her children should not Mandelson be investigate how he managed to get the property he has done even Blair he too should be investigate so Mr Mann look at your own you are very good at covering your own mess up are you not. and yess while we are at it what about the Kinnocks they made a career of it all and a family business
- Jacqui Williams, peterborough cambs
BOB, CHEAM. I second that.
- Alex., brighton
What an amateur. He only changed his second residence once. He should ask the current chancellor, Allistair Darling, for tips. he flipped four times in four years, that's more like it! And Gormless hasn't even got the bottle to deal with him. I have never been on a demonstration in my life, but when can I join one to demand a general election?
- Stephen, Stephen
What! He claimed for a second home which turned out to be HIS SECOND HOME! He probably even had receipts for the transaction, and I bet the second home even actually existed! Is Zanulabor this desperate to distract from Mr Malik's story?
- Jamal Akhbar, Edinburgh
it looks like Cameron got rid of Hogg for less than Osborne has done.
john F
- John Francis, East Grinstead, UK
Is this the real reason David Cameron only wanted the release of expenses from 2004? I wonder what other snippets are awaiting release by The Times. Perhaps they are trying to recover ground from the DT.
- Val Daniels, Mijas Costa, Spain
The idea that this man could be the future Chancellor makes me sick to the bottom of my stomach.
Frankly these people have no shame otherwise they would at least immediately announce that they will stand down at the next election.
I think its long overdue that the police should be called in to investigate these 'expenses claims'.
Well done for the press reporting this otherwise we would never have found out what our 'Honourable Members of Parliament' have been up to !!
- Sam, London
Of course he's going to deny it, we're used to lying politicians, it comes with the job!
- Goggs, London
crikey, who'd of thought it, a Tory with his fingers in the till!
Wake up people, this is what you will get when Dodgy Dave and his rich cronies are voted in. daisy take note.
- Kerry, Purley
And we are expected to vote in this clown as Chancellor, I don't think so.
- Jane Ramsden Walker, Epsom
And herein lies the problem, none of the 3 main parties are competent or trustworthy, they're all parasites, give me something decent to vote for and I will, until then I'll vote loony independents in protest.
- Bob, Cheam
So, Osbourne claims expenses for a second home which turns out to be, shock horror, his SECOND HOME!!!
If Labour feel the desperate need to start asking "serious questions" they might more usefully start by addressing the expense claims of Smith, McNutter, Malik, Blears, wossername - the member for Dry Rot, and those honourable members of their own party who claimed for entirely fictional mortgages. Not to forget the Prime Minister, with his lightbulbs, Sky TV subscription and claim that his one and only family home is an additional expense arising solely as a result of his employment as an MP.
- Daisy, Peterborough
The only ones not milking the public are the public. What are the police doing NOWT and we all know what they will find NOWT. crooks the lot of em
- Ge, Kernow
A large farmhouse as second home, and this is to help him as an MP.
Who does he think he is trying to fool?
No wonder his pal Mr Cameron wanted to rush an election, before the maggots started showing up from the hidden filth under the glossy veneer.
- Nabil H, London, UK
Cameron needs to sack him promptly to show the voters he's nothing like Brown the ditherer
- David, SOUTHAMPTON
NOTHING CHANGES. ANOTHER PARASITE EXPOSED.
WHERE ARE THE POLICE?
WHERE ARE THE HANDCUFFS?
ONE LAW FOR JOE PUBLIC AND A DIFFERENT LAW FOR MP's.
- Reuben Camara, Morecambe UK
If there is just ONE
MP who has a single grain of integrity and decency left, would they please make themselves known to the British public?
- Joannie, London, England
Flipping eck more sleeze from the party that invented it...No wonder they want to increase Inheritence Tax thresholds!!!
- Melvyn Windebank, Canvey Island, Essex
If this is true, he should stand down now.
- Dave Davies, Basingstoke
