Peer accused of £100k fiddle escapes prosecution but faces Lords inquiry

The decision not to prosecute Lady Uddin, who claimed more than 100,000 after designating a flat that she rarely used as her "main" home, triggered a row between the House of Lords authorities and the Director of Public Prosecutions.

The peer faces allegations that she claimed overnight allowances for staying in London on Lords business, after designating a flat in Maidstone, Kent, as her main home.

Britain's first female Muslim peer is alleged to have normally stayed at a house in the East End of London, just four miles away from parliament.

Director of Public Prosecutions Keir Starmer said neighbours in Maidstone had provided prosecutors with evidence about her occupancy of the Kent flat, as had the companies supplying water, gas and electricity.

But Mr Starmer said the wording of the Lords guidelines had presented prosecutors with a "very real difficulty" in bringing a case.

Mr Starmer's remarks led to the Clerk of the Parliaments, Michael Pownall – the most senior official in the upper House – insisting that the guidance was intended for purely internal use and did not relate to any possible breach of the criminal law.

Mr Pownall said the House of Lords would now be reopening its own inquiry into Lady Uddin's expenses, which was suspended last year while Scotland Yard carried out its investigation.

Mr Starmer argued that there was no definition in either legislation or in the House of Lords expenses scheme of a peer's "only or main residence". He said Mr Pownall had explained in November it was up to peers themselves to designate their main home "as they see fit".

Further guidance issued in February suggested that if a peer visited a property once a month while the House of Lords was sitting, that was sufficient to qualify it as a main home.

"On that interpretation, in any criminal proceedings, it would almost inevitably be necessary for the prosecution to prove, to the criminal standard, that any peer in question had not even visited the address they deemed their 'only or main' residence once a month," Mr Starmer said.

"That presents a very real difficulty and we considered whether it would be open to the Crown Prosecution Service to advance a different definition of 'only or main residence' in any criminal proceedings. However, after careful consideration, we concluded that such a course would not be open to us."

Earlier, Lady Uddin expressed her relief that the threat of prosecution had been lifted in a statement to reporters outside her house in Shadwell, east London.

"I am relieved this ordeal has finally come to an end and I only wish now to say thank you to everyone who supported me through a very difficult time and I now wish to return back to my professional life," Lady Uddin said.

Members of the House of Lords are not paid but they are entitled to claim a 174-a-night subsistence allowance if their "only or main residence" is outside London. House of Lords records show Lady Uddin had claimed between 24,023 and 29,675 a year since the 2005-6 financial year.

Yesterday's decision came the day after three Labour MPs and a Conservative peer appeared at a magistrates' court in Westminster to face charges over their parliamentary expenses.

Labour MPs David Chaytor, Elliot Morley and Jim Devine, along with Tory peer Lord Hanningfield, were remanded to appear at Southwark Crown Court where a judge will decide whether their case should be tried by a jury.

It was also reported this week that a fourth Labour MP, Harry Cohen, was being investigated by police after claiming more than 70,000 in second homes allowance when for much of the time his designated main home was being rented out.