Select Committee on Standards and Privileges Eleventh Report


Letter to the Parliamentary Commissioner for Standards from Mr Harry Barnes MP

  I ask you to investigate what seems to me to be a violation of Section 58, sub-section 1 of "the Guide to the Rules relating to the Conduct of Members" (see page 2 of HC Paper 688) by Mr Howard Flight, the Hon Member for Arundel and South Downs in an Oral Question to the Prime Minister on 17 December (see column 325 of Hansard).

  The Register of Members' Interests (HC291) records Mr Flight as being Deputy Chairman of Guinness Flight Hambro Asset Management Ltd and one of its registered shareholders.

  Mr Flight's question to the Prime Minister involved advocacy against the Government's proposals on Individual Savings Accounts (ISAs). These proposals were issued by the Inland Revenue as a Consultative Document earlier this month. I enclose an extract from that document, showing the Government's proposals.

  As its title indicates, the Company for which Mr Flight is a remunerated director and shareholder is involved in asset management and its operations will be directly affected by the Government's proposals. He is also a Director of 18 of its subsidiary and associated companies.

  So although Mr Flight is receiving a pecuniary benefit from Guinness Flight Hambro Asset Management Ltd, he initiated a parliamentary proceeding in a matter relating to the interest of that body. It is on the above grounds that I ask you to investigate this matter.

  In Section 58, sub-section 1 of "the Guide to the Rules relating to the Conduct of Members" there is a note on what the initiating of a parliamentary proceeding includes. In relation to Parliamentary Questions it covers the tabling and asking of such questions.

  The Questions which Mr Flight tabled was on the Prime Minister's Engagements for that day, but his supplementary question, which under the new procedure for Prime Minister's Questions, was the only one Mr Flight asked and had answered was on the new ISAs.

  As it was clearly Mr Flight's intention to raise the ISAs issue as a proceeding in the House (and he succeeded in this objective), then I believe that he was in violation of the requirements of the House's Code of Conduct.

  I enclose relevant documentation on this matter, including copies of Points of Order which I raised in the House on Mr Flight's conduct, following Prime Minister's Questions.

18 December 1997

Guidelines on the application of the advocacy rule

"58. If a financial interest is required to be registered in the Register of Members' Interests, or declared in debate, it falls within the scope of the advocacy rule. The Committee on Standards and Privileges has provided the following Guidelines to assist Members in applying the rule:

      1.  Initiating a parliamentary proceeding: When a Member has received, is receiving or expects to receive a pecuniary benefit from a body (or individual) outside Parliament, the Member may not initiate any parliamentary proceeding which relates specifically and directly to the affairs and interests of that body (or individual); any client of such a body (or individual); any group, sector, category or organisation whose affairs and interests are substantially the same of those of the outside body (or individual).

      [Note: "Initiating a parliamentary proceeding" includes:
      - presenting a Bill;
      - presenting a Petition;
      - tabling and asking a Parliamentary Question;
      - initiating, or seeking to initiate an adjournment (or other) debate;
      - tabling or moving any Motion (eg an "Early Day Motion", a Motion for leave to introduce a Bill under the "Ten Minute Rule" or a Motion "blocking" a Private Bill;
      - tabling or moving an Amendment to a Bill;
      - proposing a draft Report, or moving an Amendment to a draft Report, in a Select   Committee;
      - giving any written notice, or adding a name to such notice, or making an application for and introducing
        a daily adjournment debate, or an emergency debate.]" [Extract from The Guide to the Rules relating
        to the Conduct of Members, HC 688]

Extracts from Hansard, 17 December 1997

Cols. 325-6

"Q7. [19636] Mr Flight: Does the Prime Minister regret the lack of consideration given to the proposals for individual savings accounts and the way they were handled? Does he realise the fierce resentment that he has aroused in Middle England, not only because the playing field has been changed but because people in middle England who have completed their tax planning will be hit with a £50,000 limit? [Laughter] Labour Members might laugh, but middle England's fury towards the Government is considerable. Does the Prime Minister realise that it will be impossible to regulate individual savings accounts because they fall into three different areas and, as all regulators will tell him, there cannot be three different financial products in one? Does the Prime Minister further realise that ISAs offer nothing to the lower income groups that was not available through personal equity plans and tax-efficient special savings accounts? [Hon. Members: "Hurry up."] Will the Government reconsider their proposals and the Minister responsible for them?

The Prime Minister: First, the proposals amount to £50,000 worth of tax-free saving for an individual, and £100,000 for a couple. These are quite significant sums of money. First, just to correct the hon. Gentleman on two points, that is the amount of money that people can pay into the fund: it is not necessarily the value of the fund, which can rise to far more than that. Secondly, the proposals are not retrospective, as the hon. Gentleman suggests.

As for the lower income groups, it is estimated that around 6 million more people could get the chance to save. The hon. Gentleman talked as though ISAs were a bad deal for TESSA holders. There are 4.5 million TESSA holders, but the limit on TESSAs is £9,000 and the money has to be tied up for a considerable period. Under our proposals, the sum can rise to £50,000 and the money can be withdrawn at will. There is also an ability to put cash in, too. I suggest that that is rather a good deal for low-income savers."

Col. 330

"Mr Harry Barnes (North-East Derbyshire): On a point of order, Madam Speaker. It relates to Prime Minister's questions. The hon. Member for Arundel and South Downs (Mr. Flight) asked a lengthy question about personal equity plans and individual savings accounts. However, the Register of Members' Interests declares that he is deputy chairman of Guinness Flight Hambro Asset Management Ltd. It lists associate companies such as Guinness Flight Global Strategy Fund Ltd among others. He has clearly been involved in advocacy on behalf of those bodies, because PEPs and ISAs are in direct opposition to their interests.

Madam Speaker: As the hon. Member and the House are aware, no Member has to declare an interest during Question Time. If he has some point to make - it seems that he has - he should approach the Parliamentary Commissioner for Standards about the matters."

Col. 332

"Mr Barnes: On another point of order, Madam Speaker. The point that I am attempting to make may have been missed. The problem is not about an hon. Member needing to declare an interest when asking a question. It is a question of advocacy. Interests are recorded in the Register of Members' Interests. The matter is for you, because you may stop an hon. Member proceeding if advocacy is being engaged in.

Madam Speaker: I do not enforce the regulation. It is for the Parliamentary Commissioner for Standards to carry out such duties and for any hon. Member - in this case Mr Barnes - to inform the Commissioner of the information he has. It is not for the Chair."

Mr Flight's entry in the Register of Members' Interests
as at 31st October 1997

FLIGHT, Howard (Arundel and South Downs)

1. Remunerated directorships

  Deputy Chairman, Guinness Flight Hambro Asset Management Ltd.
  Director of the following subsidiary and associated companies:
    Guinness Flight Global Strategy Fund Ltd (Guernsey)
    Guinness Flight International Accumulation Fund Ltd (Guernsey).
    (Director's fees for the above two companies are credited to Guinness Flight     Hambro, not to myself personally).
    Guinness Flight Fund Managers (Ireland) Ltd. (Ireland) (unremunerated).
    Guinness Flight Select Funds PLC (Ireland) (unremunerated)
    First India Asset Management Ltd (India) (unremunerated)
    Guinness Flight (Mauritius) Ltd (Mauritius) (unremunerated)
    Guinness Flight Fund Managers Ltd (unremunerated)
    Guinness Flight Hambro Investment Management Ltd (unremunerated)
    Guinness Flight Hambro Portfolio Management Ltd (unremunerated)
    Finistere Life Assurance Company Ltd. (Guernsey) (unremunerated)
    Guinness Flight and Calder S.a.r.l. (Guernsey), re-named Guinness Flight Trustees (unremunerated)
    Guinness Flight Asia Ltd (Cayman Islands) (unremunerated)
    Guinness Flight Fund Managers (Guernsey) Ltd (Guernsey) (unremunerated)
    Guinness Flight Worldwide Umbrella Fund Limited (Guernsey)
    Plough Court Fund Management Limited (unremunerated)
    Guinness Flight Hambro Global Fund Managers Limited (unremunerated)
    Guinness Flight Hambro Pacific Fund Management Limited (Hong Kong) (unremunerated)

  Director, Halliday Flight Halliday Ltd.;, family company, for receipt of income from any articles and broadcasting activities.

2. Remunerated employment, office, profession etc.

  Member of Political Opinion Panel of BPRI (Business Planning and Research International). (£1-£1,000). Fees received are donated to Arundel and South Downs Conservative Association.

8. Land and Property

  House and 70 acres of mixed rented farmland in Worcestershire, including approximately an acre of land with planning permission, owned by my wife.

  50% interest in a small farmhouse in the Tarn area in France (pending disposal).

9. Registrable shareholdings

  (a)  Guinness Flight Hambro Asset Management.

      Halliday Flight Halliday Ltd.

Extract from the Inland Revenue's Consultative Document:
The new Individual Savings Account
, December 1997

"5.  Investors will be able to choose the make-up of their account and invest up to a specified amount each year within an overall investment limit. This consultative document assumes an annual limit of £5,000 (of which no more than £1,000 may be in cash and £1,000 in life insurance) and an overall limit of £50,000."

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1998
Prepared 21 January 1998