Osborne guilty of overclaiming mortgage

George Osborne is to repay £1,666 to the Commons authorities after being found guilty of overclaiming for his mortgage under the MPs' expenses system.

Although the decision by Parliament's anti-sleaze watchdog is embarrassing, the shadow Chancellor took comfort from its ruling that his mistakes were "unintended and relatively minor" and that he had been wrongly advised by Commons officials.

Mr Osborne took out a £450,000 mortgage on a house in his Tatton constituency in Cheshire, £5,000 more than he paid for it, and claimed for mortgage interest by designating it as his "second home". He later increased the value of his mortgage to pay for repairs worth £10,000 and cover other costs worth £25,000. In 2005-06 and 2006-07, he used his Commons expenses to claim for some of the interest on the new part of the loan.

In a report yesterday, the Commons Standards and Privileges Committee said Mr Osborne received £785 and £1,151 in those two financial years which he was not entitled to claim, but that he was following "flawed" advice from the Commons authorities. He had previously repaid £270.

The inquiry into Mr Osborne's arrangements followed a complaint by Laurie Burton, the chairman of Tatton Labour Party, about the way the shadow Chancellor used his "second home" allowance. The committee found Mr Osborne had received "no significant financial benefit" from the way the rules were breached and accepted that he had tried to minimise the cost of his claims.

Mr Osborne said: "Last year I offered to pay back any money that had been inadvertently overclaimed due to the flawed advice I received, and the committee has accepted that offer. 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." His allies said Labour had failed in an attempt to damage Mr Osborne by securing a severe rebuke. Some ministers are angry that wealthy Tory MPs such as Mr Osborne and David Cameron have been relatively unscathed from the row over MPs' expenses even though they claimed up to the £24,000-a-year limit on their mortgages.

Labour has targeted the shadow Chancellor, claiming he is the "weak link" in the Cameron project but surveys among businessmen have shown that his ratings have improved since last autumn.