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Shadow chancellor George Osborne is being investigated over his expenses, it was announced today.
Parliament's standards commissioner John Lyon agreed to mount a formal probe into claims that he milked the system when he bought a second home.
His decision is a major blow to Mr Osborne, who has denied the allegations. As the man who aims to take charge of the nation's purse, any question over his probity is damaging, even if he is cleared.
The charges against Mr Osborne cover the purchase of a large Cheshire farmhouse in the Peak District national park shortly before he became MP for Tatton.
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 his main residence. By doing do, he was able to claim for the monthly mortgage interest bills on it, effectively funding the Cheshire property.
The farmhouse was listed as his main residence at the time. Under Commons rules, a main residence cannot be claimed for.
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.
The key allegation was that this mortgage was for £4,995 more than Mr Osborne paid for the property. Land Registry documents record he paid £445,000 for it.
Following press reports, a formal complaint was made by the Labour Party branch chairman in Tatton, Laurie Burton. In a letter to Mr Burton, Mr Lyon said: “I have accepted your complaint and am inviting his comments.”
In his letter of complaint, Mr Burton said Mr Osborne owned the Cheshire property outright and should not have claimed for his London home. He wrote: “It seems hard to believe that Mr Osborne would find it necessary to take a mortgage on his second home that was worth more than he paid for the home if the taxpayer was also contributing £36,000 to the cost of this home.”
Mr Osborne has claimed up to £100,000 on the farmhouse. He denied he had made any extra money from the arrangement and said that it was unfair to accuse him of “flipping” addresses.
The shadow chancellor is independently wealthy, being heir to the Osborne & Little wallpaper founder, Sir Peter Osborne. He became caught up in the expenses scandal when he voluntarily admitted overclaiming on his mortgage last month. He paid back £99 claimed for interest, plus two other overclaims of £440.62 and £654.91.
Reader views (27)
I wonder if the Tax Payers Alliance (aka Tory Paty in Opposition) will be taking out a Private Prosecution against Mr Osborne. After all of the fuss they made about Alastair Darling you would have thought they would be foaming at the mouth.
- Shirley Canton, Alton England, 03/07/2009 09:16
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I don't think I will bother to vote anymore.
- Shallotman, Basildon
Please rethink your decision. Your vote is the only thing you have to tell Parliament what you think.
You don't have to vote for one of the main three parties. Look at the smaller parties who will be putting forward candidates. There will be a fair few 'special interest' parties but there may be one or two candidates who are more mainstream and feel as fed up as you.
Gordon, Dave and Nick keep bleating about change. The only people who can effect real change are us. Parliament needs shaking up to it's core. The main parties think they have a right to be elected every now and then, they don't.
Please vote.
- Man In The Street, London, UK, 03/07/2009 04:48
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maybe its now time that the decent citizens of this country showed all the politicians of all parties just how disgusted they are by voting for independents at the next general election.surely this country should be governed by the kind of people who the locals know and not just who they see come election time.theres plenty of community minded people out there who are more in touch with whats what than the people presently in parliament.maybe they are too busy feathering their own nest to notice and its about time the british people use the democracy we have to change things for the better
- Owen Mulhall, london uk, 03/07/2009 01:40
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Being an MP shouldn't be a birthright. Politicians should get there after years of working in industry, followed by entrance into Westminster. Moneyed career MPs just don't understand the world at large. How could they, when they've never had to struggle through years of working in industry. Money doesn't buy a wealth of experience or years of struggle to get there. Neither does it buy sincerity or understanding the plight of others.
The Front Bench should make room for those MPs already in the party who have worked their socks off in business before entering the Commons. At the moment, some of the Tories are beginning to look like a rum bunch of sly sixth-formers who are desperate for power without the good intent or convictions for people that go with that.
Sadly, the Conservative Front Bench is becoming a nasty club on its own. Essentially, they are alienating themselves from the rest of their party by craving power for themselves. Many Tories are now saying they are Conservative, but "not Cameronite".
The Tory "high command" is creating divides, when they should be uniting and being inclusive. It's become a club for wealthy, oily, titled and dismissive men of unfortunate breeding.
- Bloke In Sheer Tights, Westminster, UK, 03/07/2009 01:27
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The worst of the greedy MPs are those who are rich and could easily afford their claims from their own wealth but wish to milk the taxpayer. They should be severely castigated.
- Edwin Underhill, beaconsfield buckinghamshire, 02/07/2009 22:12
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Dave couldn't give a fig about public opinion. George is his best mate and can screw the Taxpayer on expenses and also claim to be committed to cutting Government Waste. No bets 0n where the tory cuts will hit though and it won't be on Bankers and Second jobs.
- Shirley Canton, Alton England, 02/07/2009 21:12
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Perhaps what we need now is a real crook as a Tory Chancillor. Hopefully he could bundle up our National Debt and sell it to a number of brain-dead Old Etonian Bankers as assets and save the Nation.
- Bill Sykes, Alton England, 02/07/2009 21:07
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It is sad to say it but the Bullingdon Club was right. Osborne is a sanctimonious creep from a minor Public School on the make who deserves to have his head stuck down a toilet.
- Bill Sykes, Alton England, 02/07/2009 21:01
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I don't think I will bother to vote anymore.
- Shallotman, Basildon, 02/07/2009 18:17
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If its a smear (not that Labour would do that of course (NOT!)), expose it as such. If its true, smack him down like the rest.
- Rogan, Irving, 02/07/2009 18:15
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Resign Osborne.
- Dave Davies, Basingstoke, Hants, 02/07/2009 18:11
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Desperate Dan, London UK
Is the government now responsible for Osborne's Greed? You seem to want it both ways. Do you usually see everything through blue tinted glasses? Desperate Dan indeed, your political ranting could come straight out of the Beano.
- James, Manchester England, 02/07/2009 17:56
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One law for the rich it would seem under the would-be Tory administration. Doubles all round
- Steve S, London, 02/07/2009 17:36
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These pitiful displays of vindictiveness demonstrate beyond all doubt that the Labour Party is not fit to govern. Its never been easy to take them, or their claims to integrity, seriously and now its become completely impossible. They are an international joke.
- Desperate Dan, London, UK, 02/07/2009 17:23
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Conservative,Liberal,Labour, the crooks from these parties should all be sacked, how can anyone vote for anyone who appears dishonest, lets have a clean sweep of the whole system, "now, not later", they foolishly think the public is going to forget this,the leaders of these parties are just as guilty, as they seem to condone what there members have been up to, after being a Conservative voter for many years, I now "VOTE UKIP", and I will carry on, until things change for the better.
- David Crocket, Bradford , UK., 02/07/2009 17:21
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Roger,
Why particularly on the government side? All of them should be treated the same, the conservative party and labour are equally up to their necks in the stench of fraudulence. If it was any other job they would be dismissed, it is a shame that it will most likely come as a mild embarrassment to both parties and the world will move on, all will be forgotten.
- James, London, Maida Vale, 02/07/2009 17:19
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"Amazing. The day after he upsets Lord Voldemort he gets investigated. What about the rest of those who flipped, particularly on the government side?
- Roger, Winchester, England"
Oh yeah? And what about Cameron's other "front bench flippers", Gove and Lansley?
- Robert C, London UK, 02/07/2009 16:58
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Shame that should happen but if he is found guilty then we all know what MUST happen.
- Albert Hall, hove england, 02/07/2009 16:56
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I have written to Mr Osborne asking when he will pay his capital gains tax; he ignores my emails. Mr Cameron ignores them too.
- Neil, London, London UK, 02/07/2009 16:55
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- Roger, Winchester, England
Ironic that Roger exactly the same thought crossed my mind. Lord Voldemort; lord sleaze more like it. Mandy makes my skin crawl.
- Gary, Brentwood, 02/07/2009 16:54
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Osborne should have stepped down after it was revealed he was on the same yacht as Lord Vermin and a very dodgy Russian Mafia boss, for a 'holiday'.
But then all Russians who made multi-millions in the post cold war days are crime bosses.
- Frank, Home Counties, England., 02/07/2009 16:51
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It is necessary to clear this matter up. Cameron appears to have been kind to some of the freeloaders that he hopes to be in his Cabinet as opposed to being tough with others whom are not to be given positions in his Government. His clique of "toffs" gives out the wrong message. Why has he not given David Davis a job? The man stands head & shoulders above Osborne who gives the impression of a little boy tagging on to the big boys in the gang. Osbourne does not measure up as shown by this escapade & his stupid holiday gaffe with Mandelson.
- Mordwinoff, Lisle France., 02/07/2009 16:47
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I wonder if Honest Dave will ditch him as quickly as he has got rid of the Tory Bed-blockers. It seems the Shadow Cabinet have been protected so far by the Leader of the Old Etonian Take-over movement. If it gets press coverage then Boy George will get more time to spend with his Russian Oligarchs.
- Bill Sykes, Alton England, 02/07/2009 16:46
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NOBODY IS SURPRISED.
What puzzles Joe Public acutely is...WHY have not any of these parasites been ARRESTED, HANDCUFFED, CHARGED AND THROWN INTO A PRISON CELL?
On second thoughts - knowing just how devious MP's are, they would certainly claim the prison cell as their THIRD home and slap it onto expenses.
- Reuben Camara, Republic of Morecambe, UK, 02/07/2009 16:44
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Come on! Where is the photo of George wobbling along on his bike behind Dave, loathing every second of it?
- Carl, London, 02/07/2009 16:40
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If the mortgage was £5,000 more than he paid for ti what does that say about Blair who took out a mortgage ten times what he paid for his constituency home and then used this to fund a series if property speculations. At least Osborne was living there.
- C Chapman, corridonia italy, 02/07/2009 16:39
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Amazing. The day after he upsets Lord Voldemort he gets investigated. What about the rest of those who flipped, particularly on the government side?
- Roger, Winchester, England, 02/07/2009 16:22
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