Osborne facing sleaze probe over expenses

Shadow chancellor George Osborne is to be investigated by a sleaze watchdog over his second home allowance claims, it was revealed today.

Parliamentary Commissioner for Standards John Lyon said he would look into complaints lodged by a Labour activist related to his claims for mortgage interest.

In a letter to Laurie Burton, the chair of the local Labour Party in Mr Osborne's Tatton constituency, he said: "I have accepted your complaint and am inviting his comments."

In his letter, Mr Lyon said he would look into a claim that "Mr Osborne claimed for mortgage payments that were not necessarily incurred, contrary to the rules of the House".

It is alleged that Mr Osborne took out a mortgage of nearly £5,000 more than the reported price of his house and claimed Commons allowances to cover interest payments on the whole debt, rather than just the cost of buying the house.

"Since your complaint involves allegations relating to events of over seven years ago, I have consulted the House of Commons Committee on Standards and Privileges and they have agreed to me initiating an inquiry into this part of your complaint."

He said he put the claims to Mr Osborne, adding: "When I have received his response, I will consider best how to proceed."

The Commissioner said he would not launch an inquiry into Mr Burton's other complaint - that the shadow chancellor had "flipped" his second home and avoided paying capital gains tax.

"This is a matter for HMRC (HM Revenue and Customs)", he told him.