Select Committee on Standards and Privileges First Report


VI. SUMMARIZING THE EVIDENCE - Continued

7) ALLEGATIONS RELATING TO NON-DECLARATION OF INTERESTS

  658. The rules on declaration were set out in some detail earlier in the report.[307] The crucial provision is that the requirement to declare a relevant interest applies, in addition to proceedings in the House, to any "transactions or communications which a Member may have with other Members or with Ministers or servants of the Crown".

  659. Two main allegations have been made to the effect that interests which ought to have been declared in dealings with Ministers and officials were not so declared. The first relates to the lobbying operation conducted by Mr Greer on behalf of House of Fraser and the second to the campaign in the mid- and late 1980s to influence Government policy towards Skoal Bandits. These are examined in turn below.

a) The Lobbying Operation on behalf of House of Fraser

  660. As has been established,[308] the lobbying group promoting the interests of House of Fraser consisted of: Mr Smith, Mr Hamilton, Sir Michael Grylls, Sir Andrew Bowden (albeit for a shorter period), and Sir Peter Hordern. The distinction between Sir Peter's role and that of the rest of the group has also been described.[309]

  661. From the departmental files - both those obtained on discovery for the libel action and others made available to me - it is clear that the minimum level of lobbying activity undertaken, principally with the Department of Trade and Industry but including other Departments also, during the period in question was as follows:


1986

    -    August:  Mr Smith and Sir Michael Grylls make written representations to the Secretary of State for Trade and Industry, urging a reference to the Office of Fair Trading of Lonrho's proposal to increase its stake in the Today newspaper.


1987
    -    March:   Sir Peter Hordern leads a delegation to the Secretary of State for Trade and Industry, accompanied by Sir Michael Grylls and Mr Smith;

    -    Sir Andrew Bowden writes to the Secretary of State for Trade and Industry urging an inquiry into allegations against Lonrho;

    -    Sir Andrew writes to the Home Secretary on a Lonrho-related matter;

    -    April:   Sir Peter Hordern writes to the Secretary of State for Trade and Industry alleging a conflict of interest on the part of one of the DTI Inspectors appointed to examine House of Fraser;

    -    May:   Sir Peter Hordern leads a delegation to the Secretary of State for Trade and Industry, accompanied by Sir Michael Grylls, Mr Smith and Mr Hamilton;

    -      Sir Peter Hordern and Mr Smith write to the Secretary of State for Trade and Industry about points raised at the recent meeting;

    -    July:   Sir Peter Hordern leads a delegation to the Secretary of State for Trade and Industry, accompanied by Mr Hamilton and Mr Smith;

    -    November:  Sir Peter Hordern writes to the Secretary of State for Trade and Industry about the Inspectors' inquiry;

    -      Mr Hamilton and Mr Smith write separately in similar vein to the Secretary of State for Trade and Industry;

    -    December:   Sir Peter Hordern leads a delegation to the Secretary of State for Trade and Industry accompanied by Sir Michael Grylls and Mr Smith;

    -      Mr Smith writes to a junior Minister at the DTI seeking inquiries into various Lonrho subsidiaries;


1988
    -    January:  Mr Hamilton writes to the Secretary of State for Trade and Industry about allegations against Lonrho;

    -      Mr Smith sends the Secretary of State for Trade and Industry papers purporting to be evidence of malpractice by Lonrho;

    -      Sir Peter Hordern writes to the Secretary of State for Trade and Industry about the conduct of the Inspectors' inquiry;

    -    July:   Sir Michael Grylls writes to the Secretary of State for Trade and Industry alleging deficiencies in the Inspectors' procedures;

    -      Mr Hamilton writes in similar vein to the Secretary of State for Trade and Industry;

    -    August:   Sir Peter Hordern and Mr Smith write separately to the Secretary of State for Trade and Industry raising doubts about the fairness of the Inspectors' findings;

    -    September:   Sir Peter Hordern accompanies the Al Fayeds on a delegation to the Secretary of State for Trade and Industry;


1989
    -    January:   Sir Peter Hordern writes to the Secretary of State for Trade and Industry about the publication of the Inspectors' report;

    -    April:   Mr Hamilton writes to the Minister of State at the DTI about Lonrho and alleged links with Libya.

  662. This list is unlikely to be exhaustive. In particular, there may well have been other contacts between individual Members and the relevant Departments concerning, for example, the arrangements for proposed meetings.

  663. The interests which, it was alleged, these Members ought to have declared are:

    -    Sir Peter Hordern: a paid consultancy with House of Fraser;

    -    Mr Smith: cash payments and other benefits from Mr Al Fayed;

    -    Mr Hamilton: cash payments from Mr Al Fayed (denied); other benefits from Mr Al Fayed (eg. the Ritz stay); commission payments from Mr Greer;

    -    Sir Andrew Bowden: cash payments from Mr Al Fayed (denied); donation to election funds from Mr Al Fayed, via Mr Greer;

    -    Sir Michael Grylls: commission payments from Mr Greer; fees from Mr Greer (related to the Unitary Tax Campaign).

  664. It was further alleged that, even in the case of those Members where the benefits were derived in the first instance from Mr Greer, the fact that a financial relationship existed with Mr Al Fayed's paid lobbyist was pertinent to the departments concerned in deciding what weight to attach to the representations they were receiving on behalf of House of Fraser. As such, this was information which they were entitled to have disclosed to them.

  665. The departmental papers, including notes on meetings, do not indicate that any declaration - either in correspondence or during delegations - was made by any of the Members concerned, with the exception of Sir Peter Hordern at a meeting with the Secretary of State in March 1987.

  666. So far as the Department of Trade and Industry was concerned, the Permanent Secretary, Mr Michael Scholar, stated in a letter to the inquiry that if a Member of Parliament had declared a financial interest in the course of dealings with Ministers or the Department, that fact "would normally be mentioned in our papers, because it would be relevant information which might affect the way in which Ministers or the Department responded to the Member".

  667. The responses of the individual Members to the allegations were expressed in the following terms.

  668. Sir Peter Hordern's recollection was that he had in fact declared an interest on most occasions, and always in meetings with Ministers. He added that in any case his interest in House of Fraser was well known and was recorded in the Register[311] and that it would therefore have been otiose to make a formal declaration in every possible instance.

  669. Mr Smith accepted that, in any dealings with Ministers or officials after the first payment he received from Mr Al Fayed, he should have declared his interest and regretted not having done so.[312] Asked whether he could provide any explanation for his omission, Mr Smith replied "I am not sure I am able to answer that question".

  670. Pressed further, Mr Smith denied any deliberate intention to conceal a financial interest, but he accepted that a possible reason for his non-declaration was a feeling that his representations might be more effective if they were thought to come from the Conservative Party backbench Trade and Industry Committee rather than from a paid lobbyist for Mr Al Fayed.

  671. Mr Hamilton's position was set out in his statement of rebuttal[313], in which he said, with reference to the meetings with DTI ministers: "I was not paid by Mr Ian Greer, Ian Greer Associates, Mr Al Fayed or the House of Fraser for attending these meetings ... I attended the meetings and expressed views in accordance with the duties and obligations conferred upon me as a Member of Parliament". He added: "I further and specifically deny any deliberate or dishonest intent in omitting to declare or register any interest". The two payments he had received from Mr Greer "had no connection with Mr Al Fayed".

  672. Sir Andrew Bowden appeared to be relying on the same reasons he had given[314] for not registering his £5,319 election campaign donation from Mr Greer to explain the fact that he did not declare any interest in correspondence with Ministers on House of Fraser-related matters. These were that he did not know that the payment originated with Mr Al Fayed and that it could not properly be regarded as a contribution to election expenses.

  673. Sir Michael Grylls said in oral evidence[315] that whilst he had a financial relationship with Mr Greer through the Unitary Tax Campaign fees and, arguably, through the commission payments, this had been registered "well or not so well". But there was "no financial connection directly or indirectly" with Mr Al Fayed. He had attended meetings with Ministers in his capacity as chairman of the backbench Trade and Industry Committee partly to raise matters of public importance and partly in order to keep himself informed.

  674. It was also alleged that in addition to a failure to declare relevant interests there were cases in which Members had given a particularly misleading description of the basis upon which they were making representations on behalf of House of Fraser.

  675. The following are examples of such alleged cases:

    -    in August 1986 Sir Michael Grylls wrote to the Secretary of State expressing the concern of the backbench Trade and Industry Committee about certain matters relating to Lonrho;

    -    in the introductory paragraph to his letter of 28 January 1988 to the Secretary of State for Trade and Industry, Mr Hamilton wrote: "As you will know, along with other officers of the backbench Trade and Industry Committee, I have taken a close interest in the feud between House of Fraser and Lonrho";

    -    in letters to the Secretary of State for Trade and Industry, dated 29 July 1988, and to the Home Secretary, dated 6 December 1989, Mr Hamilton used a similar formulation.

  676. In response, Mr Hamilton denied that the way in which he had introduced his written representations had conveyed a misleading impression. In invoking his position as an officer of the backbench Trade and Industry Committee he was simply seeking to "bolster [his] status as a means of achieving the objective which the letter intends ... this is something which is a commonplace of political life".

  677. A further example was cited of an allegedly inaccurate statement made by a Member in explaining representations to a Minister. In his letter of 23 March 1987 to the Secretary of State for Trade and Industry, Sir Andrew Bowden began: "I am writing as a result of a letter from one of my constituents [Mr Land][316] ... who was employed in a senior executive position by Lonrho plc from [sic] some years and the letter sent to you by Mr Mohamed Al Fayed dated 2 February 1987".

  678. When it was put to Sir Andrew that his letter to the Secretary of State had in reality been prompted by Mr Greer and Mr Al Fayed, Sir Andrew replied:[317] "I also had a letter from Mr Land" (a fact confirmed by Mr Land in general terms, though without reference to a specific date).

  679. Mr Greer had no reservations about his own role in the sending of the letter. Asked whether Sir Andrew had written it "because he was part of the lobbying operation arranged by you", Mr Greer agreed: "I think that is fair comment".[318]



307  See paras 106-7, and Annex 5. Back

308  See para 175. Back

309  See para 175. Back

310  So far as the letter to the Home Secretary is concerned, see para 401. Back

311  See Appendix 66. Back

312  Q 1158-1166. Back

313  See Appendix 34, para 10. Back

314  See Appendix 62. Back

315  Q 2612. Back

316  See para 133. Back

317  Q 1282. Back

318  Q 1411. Back


 
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