A HEREDITARY peer whose ancestor gave his name to the Falkland Islands has admitted “exploiting a loophole” in the rules to claim more than £140,000 in expenses from the House of Lords.

Lord Falkland, the 15th viscount, designated a converted oast house in Kent as his main residence so he could collect allowances. Yet neither he nor his wife owns or rents the property. It actually belongs to his wife’s aunt, who also pays the utility and telephone bills.

By saying his main residence was outside London, he was able to claim £174 a night for accommodation in the capital.

Last Friday Falkland said that on entering the Lords he had been encouraged by fellow peers “to find an address” outside London which he could use to claim allowances.

He acknowledged this was “nonsense” but said it had been thrust upon him because peers do not receive a salary and he would otherwise have been “out of pocket”.

Falkand, a Liberal Democrat, added: “I am quite prepared to accept the fact that a loophole has been here and a number of us have exploited it, there’s no doubt about that.”

He has not claimed the allowance since the summer when the whips’ office flagged up problems with his expenses. The Lib Dems had been carrying out a review of peers’ expenses prompted by disclosures in this newspaper.

“The chief whip said to me . . . you would find it hard pushed, wouldn’t you, to claim you spent more time in what you declare as your main residence. I couldn’t deny that,” he said.

When asked whether he was prepared to repay the taxpayer, he replied: “If somebody said to me, ‘in the spirit of things would you give some of the money back because you have been exploiting a loophole?’ I would say I would certainly try to contribute to that if it were the right thing to do.”

Falkland inherited the title but not the wealth of his illustrious ancestors. The 74-year-old former theatrical agent and company chief executive describes himself as an “impoverished peer”.

He was a front-bench spokesman for the Lib Dems until

four years ago. Although he no longer works, his wife Nicole Mackey is managing director

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