A millionaire peer with significant business interests in the Black Country should be suspended from the House of Lords for four months, a parliamentary sleaze inquiry has ruled.
The Lords Privileges and Conduct Committee found that Lord Paul “demonstrated gross irresponsibility and negligence” in breaking rules governing second home expenses.
It said the Labour peer had named a property in Chesterton, Oxfordshire, as his “main residence” even though he never spent a night there.
This meant he could claim expenses for travel to London, and overnight stays in the capital, when the Lords was sitting. But the committee also concluded that he had not been dishonest - and had already repaid £41,982 in expenses, which was more than he had wrongly claimed.
Lord Paul of Marylebone is the founder and Chairman of Caparo Group, a steel, automotive, engineering and property group, which has its major regional office in Oldbury and a technology division on Wolverhampton Science Park.
It has other Midland facilities in West Bromwich, Stourbridge and Warwick.
The committee found that Lord Paul had breached the rules around the designation of his main residence, and wrongly claimed night subsistence and travel expenses.
It stated in a report: “We do not feel justified in finding, on the balance of probabilities that Lord Paul acted dishonestly or in bad faith.
“However his actions were utterly unreasonable, and demonstrated gross irresponsibility and negligence”.
The recommendation that he be suspended for four months will now be debated in the House of Lords itself, although the finding is very unlikely to be rejected.
Lord Paul said: “First and foremost, my honesty and integrity have been upheld. I have never tried to claim anything which I did not believe I was honestly entitled to claim at the time.
“I am pleased that the Committee for Privileges and Conduct has come to the same conclusion and has found that my actions throughout the investigation have been transparent and consistent and that the claims were honestly made and not in bad faith.”
He added: “I do not dispute the basic facts. I made claims which, with the benefit of hindsight, I should not have made. I may have been negligent, as the Committee has said, and the Committee has accepted my apology.”
The Lords Privileges and Conduct Committee also found that Labour peer Baroness Uddin and crossbencher Lord Bhatia “did not act in good faith” by incorrectly declaring their main homes in order to claim generous overnight allowances.
It recommended Baroness Uddin be suspended until Easter 2012 and should repay £125,349.10, and that Lord Bhatia be suspended from the House for 8 months.