Home loan rebuke for Mandelson

PETER MANDELSON will be rebuked by a powerful Commons committee today for failing to list his pounds 373,000 home loan from Geoffrey Robinson in the Register of Members' Interests. But the former minister will escape further punishment over the affair that led to his resignation and the sale of his home in Notting Hill, west London.

Sources said the Committee on Standards and Privileges' report would highlighterrors of judgement that would cast doubt on the former secretary of state for trade and industry's early return to government.

Meanwhile, at a union conference, in his first major public speech since his resignation, Mr Mandelson spoke of how he felt "disorientated" and "a little awkward" since the scandal broke.

It is known that he MPs committee was split over a finding by Elizabeth Filkin, the Parliamentary "watchdog", which showed that Mr Mandelson's dealings with his building society fell below the standards expected of an MP. After a deadlock over 10 meetings, members reached a compromise, which allowed them to water down the ruling without being seen to reject it.

Ms Filkin found that Mr Mandelson should have informed the Britannia Building Society about the loan. When he applied for a mortgage, he is believed to have said his family would cover part of the pounds 465,000 asking price for the house in Northumberland Place.

Although Mr Mandelson did not tell Britannia about his arrangement with Geoffrey Robinson, Paymaster General at the time, the building society issued a statement in January saying it was taking no further action and that it was satisfied the information in the mortgage application was correct.

However, a subsequent biography of Mr Mandelson by The Independent's chief political commentator, Donald Macintyre, said the MP and Mr Robinson discussed the loan during the summer of 1996. Mr Robinson, a multi-millionaire, told Mr Mandelson he could "tide" him over until he inherited about pounds 500,000 from his mother. The two men went house hunting together, driven around by Mr Robinson's chauffeur.

Today's report will uphold a complaint from the Conservative MP John Redwood that Mr Mandelson should have registered the loan because he had received a preferential interest rate. Mr Mandelson has entered the loan in the register, and has sold the house to move temporarily to a rented flat. Mr Redwood argued that Mr Mandelson could not have borrowed the money commercially on an MP's salary, which was pounds 43,000 at the time.

Three complaints were made in January to Ms Filkin about the loan, and she reported to the committee in April.

Mr Mandelson has been at the centre of speculation over his possible return to government in a cabinet reshuffle expected later this month. However, a party job, helping a newly appointed party chairman run elections campaigns, seems a more likely prospect for the immediate future.

Yesterday, speaking at the policy conference of the Amalgamated Engineering and Electrical Union in Jersey, Mr Mandelson spoke of how he had felt "disorientated" and "a little awkward". Conscious of his reputation among detractors as a cold-blooded Machiavelli, Mr Mandelson exuded human frailty to an audience of initially sceptical trade unionists.

He said: "You can imagine how I felt these last six months, a bit disorientated, a little awkward, not knowing quite what to do with myself. When John Monks [TUC general secretary, speaking about the relationship between New and Old Labour] made his recent remarks about embarrassing elderly relatives, I wondered if he had me in mind."

To the humility, Mr Mandelson added humour. He did not miss the trappings of power, "but I've only just got out of the habit of jumping into the back of cars and wondering why they don't move off". What he missed most, he said, "was the chance to make a difference".

Despite the denials of his friends, his first major public speech was seen as a comeback. He has spent the past six months, publicly and behind the scenes, working on his political rehabilitation.

He turned down lucrative offers from City firms and media companies and instead carried out unpaid work for Voluntary Services Overseas in its campaign to recruit more volunteers. The VSO work, with help for an NSPCC publicity campaign, helped to soften his image and enabled him to reveal that he had spent time in his youth as a volunteer in Africa. To the bemusement of some colleagues and Tories who had felt the effects of his spinning, Mr Mandelson told the conference that he had a "passion for compassion".

More importantly, he retained his key role as the Labour party's main liaison with the German Social Democrats in negotiating a new European "Third Way" manifesto.

The document, jointly published last month by Tony Blair and the German Chancellor, Gerhard Schroder, committed the left-of-centre parties to a tax-cutting, pro-business agenda and proved that Mr Mandelson retained his close association with the Prime Minister.

His charm offensive seemed to work. Just one delegate clapped his appearance on stage at the Fort Regent conference centre, but by the end there was generous applause.