The man who would hold UK purse strings is told to repay £1,666

Published on Thursday 21 January 2010 21:35

SHADOW chancellor George Osborne has been rebuked and ordered to pay back £1,666 in expenses after he took out a mortgage for more than the value of his home.

He had been accused of over-claiming nearly 5,000 in mortgage interest payments for his Cheshire house and of incorrectly claiming expenses for his London property.

The Commons standards and privileges committee also found he had breached the rules when he increased his mortgage by 25,000 in 2005 to pay for repairs to the Cheshire property and part of the original purchase cost, as some of the expenses he claimed related to the period before he was elected in 2001.

MPs concluded his breaches were "unintended and relatively minor" but the errors are still embarrassing for the man who hopes to balance the nation's finances after the general election.

Standards Commissioner John Lyon said Mr Osborne had acted throughout on advice from parliamentary officials and had not sought to make extra gain.

An investigation was launched into Mr Osborne's claims after complaints from Labour activists that he had claimed for the interest on a 450,000 mortgage on his Cheshire farmhouse when it cost him only 445,000.

The Tatton MP was overpaid a total of 1,936, of which he has already repaid 270. The report by the standards and privileges committee recommended he should hand back the rest.

Mr Osborne bought the Cheshire house in 2000, before entering parliament, taking out an increased mortgage on his London home to fund it.

Mr Osborne said yesterday he was happy the committee had recognised the breaches did not give him any significant financial benefit and were unintentional.

"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," he said.

Lord Oakeshott, of the Liberal Democrats, said Mr Osborne's expense claims were the "height of hypocrisy". He went on: "It's extraordinary that George Osborne should be lecturing the public on the perils of debt while manipulating his own finances to obtain a mortgage of over 100 per cent."

HAUNTING

WHEN the heir to a soft-furnishings empire lectured consumers on the dangers of racking up large debts, George Osborne probably did not think the words would come back to haunt him.

In a speech last year, he said: "The unsustainable debts in our banks are a reflection of unsustainable debts in our households, our companies and our government."

Despite his privileged background, Mr Osborne has had to take out a 100 per cent-plus mortgage to fund his second home. He is the heir of Sir Peter Osborne, 17th Baronet and co-founder of the luxury fabric and wallpaper designers, Osborne & Little, which lost 7.5 million last year.