Expenses scandal of Corbyn aide 'Lord Swampy' is revealed: How the squatter turned Labour peer pocketed £41,000 in travel fares AND £260,000 for a 'home' that doesn't exist

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Lord Bassam, Labour’s Chief Whip in the Lords, admitted that he had been wrong to claim tens of thousands of pounds in taxpayers’ money

A senior aide to Jeremy Corbyn was plunged into a major expenses scandal last night.

Lord Bassam, Labour’s Chief Whip in the Lords, admitted that he had been wrong to claim tens of thousands of pounds in taxpayers’ money after The Mail on Sunday investigated his travel expenses.

He faces further questions over another £260,000 ‘second home’ allowance that he has pocketed since 2010 – despite not having one.

Lord Bassam last night promised to pay back up to £41,000 in expenses he claimed for commuting between Westminster and his Brighton home.

If he was forced to pay back the housing allowance instead, the total would greatly exceed anything refunded by an MP in the 2009 Commons expenses scandal.

The 64-year-old peer has been nicknamed ‘Lord Swampy’ – a reference to the New Age eco-warrior of the 1990s – because of his background as a squatters’ leader when he was plain Steve Bassam in the 1970s. He now lives with wife Jill in a £1 million townhouse in Brighton’s fashionable Kemptown district.

Because of his position as Chief Whip, and because his main home is not in London, he is one of a handful of Lords’ frontbenchers entitled to a Lords Office Holders Allowance (LOHA), currently £36,366 a year (worth about £22,000 after tax).

Lord Bassam faces further questions over another £260,000 ‘second home’ allowance that he has pocketed since 2010 – despite not having one. Pictured is his home in Brighton

The top-up – paid as part of his salary – is to cover peers’ ‘expenses in staying overnight away from their main or only residence’.

But instead of spending the extra cash on a second home in London or hotel bills, Lord Bassam pockets it and joins commuters on the hour-long, 55-mile train trip between Brighton and the capital.

Astonishingly, he also claims about £6,400 a year in expenses to pay for those train tickets and cab fares, despite the LOHA payments that assume he stays in London.

The expenses scandal is particularly embarrassing for Mr Corbyn because, as Chief Whip, Bassam is in charge of maintaining discipline among Labour peers.

Since taking that position following the 2010 General Election, he has received £260,000 in LOHA and claimed £40,900 in travel expenses – a total of more than £300,000.

Following this newspaper’s investigations, the peer last night admitted he was wrong to claim travel expenses – and vowed to have urgent talks with parliamentary officials about paying it back.

He told The Mail on Sunday: ‘I will not be submitting any further claims in this way. I will also discuss the steps necessary to repay previous travel claims including those made since the [2017] Election.’

Asked to justify claiming the £36,366 ‘second home’ allowance, he would only say: ‘Regarding the Office Holders Allowance, I have not been advised that any breach of the rules has taken place.’

The 64-year-old peer has been nicknamed ‘Lord Swampy’ – a reference to the New Age eco-warrior of the 1990s – because of his background as a squatters’ leader when he was plain Steve Bassam in the 1970s

However, Sir Alistair Graham, former chairman of the Commons Committee on Standards in Public Life, said Bassam should pay back the larger amount instead. He said: ‘It is clearly indefensible that he should take the extra allowance designed to cover accommodation in London. He should pay that back in full rather than the travel expenses.

‘It is extraordinary that such a situation has arisen after the great MPs’ expenses furore. He should have learned a lesson from that.’

Lord Bassam made his reputation as a Left-winger in the 1970s when he set up the Squatters’ Union, which campaigned for the rights of squatters to occupy empty properties. He was once thrown out of a court for wearing a red nose.

He became leader of Brighton council in 1987 and was appointed a life peer in 1997 by Tony Blair, who made him a Minister in 1999. Gordon Brown promoted him to Chief Whip in 2008 and the following year he joined the Privy Council, giving him the formal title of The Rt Hon The Lord Bassam of Brighton PC.

Lord Bassam is now a key aide of Jeremy Corbyn. Last night, there were signs Mr Corbyn was distancing himself from the embattled peer

He is now a key member of Mr Corbyn’s inner circle. As Labour Chief Whip in the Lords, Bassam gets a basic £63,537 salary. His LOHA of £36,366 – approximately based on the Lords previous £165 a day ‘overnight subsistence’ allowance multiplied by a nominal 220 number of sittings per year – brings the total salary up to £99,903.

No receipts are required as the allowance is paid as part of his overall salary. Last night Lord Bassam’s spokesman admitted the peer ‘rarely’ stays in London.

In addition to his Lords salary, Lord Bassam declares income from a rental property he owns in Eastbourne, not far from Brighton.

Last night, there were signs Mr Corbyn was distancing himself from the embattled peer. An ally pointed out that the Lords Chief Whip is ‘chosen by Labour peers not the party leader’.

A Labour spokesman said ‘Although Lord Bassam hasn’t been advised he’s broken any rules, it is right that he will repay previous travel claims.’