Mr Fallon, the deputy chairman of the Treasury select committee, claimed for the mortgage repayments on his Westminster flat in their entirety. MPs are only allowed to claim for interest charges.
Between 2002 and 2004, Mr Fallon regularly claimed £1,255 per month in capital repayments and interest, rather than the £700-£800 for the interest component alone. After his error was noticed by staff in the Commons fees office in September 2004, he said: “Why has no one brought this to my attention before?”
Mr Fallon, the MP for Sevenoaks, who fiercely criticised the excesses of bankers earlier this year, repaid £2,200 of the over-claim. However, he was allowed to offset the remaining £6,100 against his allowance.
After realising they had failed to notice the excessive claims, Commons staff suggested that Mr Fallon submit fresh claims which would “reassign” the surplus payments to other costs he had legitimately incurred.
One official said Mr Fallon should claim for fees he paid when he bought the flat, in south-west London, months earlier.
In an email, the official wrote: “There was also no claim by Mr Fallon for his purchase costs i.e. stamp duty, solicitors fees, land search etc. This may be something to bear in mind”.
The MP retrospectively claimed £3,521 for legal fees and hundreds more for mortgage interest charges and utility bills — all personally authorised by the head of the fees office. Mr Fallon had previously claimed £1,000 a month in second home expenses to rent a property in Pimlico, south west London.
Mr Fallon said: “This was an inadvertent mistake for which I accept responsibility. The fees office proposed that the overpayment should be offset by other claims.”
The MP said that all his other claims “were routine costs properly authorised and allowable at the time”.
He began making the excessive claims after buying the Westminster flat for £243,000 in June 2002 and designating it as his second home.
Various other household expenses he claimed for after September 2004 included a £250 per month cleaning bill, which Mr Fallon reduced from £300 after being asked for a receipt.
At the time, MPs did not need to provide receipts for claims up to £250. In a letter to the fees office in March 2005, he said: “My cleaner has never provided receipts”.
In May 2005, he claimed £499 for a television, £69.50 for a digital box and £35 for a radio. Mr Fallon sold the flat in December 2006 for £295,000, making a profit of £52,000. He claimed £1,774.50 in legal fees relating to the sale. In the two months before the sale, he claimed £126 for boiler repairs, £170 for repairs to bathroom tiles, £282 for electrical repairs and £225 for carpet cleaning.
He then bought another flat in Westminster for £728,000. Soon after moving in, he claimed £1,795 for a bed, £1,500 for curtains and almost £1,000 for a freezer, washer-dryer and deep cleaner. The claim for the bed was reduced to £1,000.
He then began claiming the interest on the mortgage for his new flat, which came to about £2,100 per month — almost three times as much as at his previous property. Mr Fallon also shares a large house in his Kent constituency with his wife, Wendy. The house, which the couple bought in 1997, is about 28 miles away from Westminster. It is not mortgaged.
Mr Fallon is also paid as a director of three companies. His salary from one, a money broker, is reportedly £45,000. He also pays his wife from his taxpayer-funded office expenses to work as his secretary.
He is expected to become chairman of the Treasury committee when its present chairman, John McFall, steps down at the general election.
Michael Fallon
Job: backbench Conservative MP
Salary: £64,766
Total second home claims
2004-05: £16,825
2005-06: £16,882
2006-07: £22,110
2007-08: £22,853
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