ANNEX B
Letter
to the Parliamentary Commissioner for Standards from Mr Howard
Flight MP
Thank you for your letter
of 22 December, which I have received on my return to London this
week.
First of all, my understanding
was, per Madam Speaker's response to Mr Barnes's first point of
order, that the custom of the House was that Members did not declare
an interest during Prime Minister's Question Time, when asking
a supplementary question. If I am mistaken here, please accept
my apologies; but I also feel the relevant rules should be clarified
if a declaration of interest at PMQ is required.
Otherwise, when speaking
or asking a question on matters related to the Investment Management
Industry I have to date declared an interest, either verbally
or when tabling a question.
In both his second point
of order and letter to you, I consider Mr Barnes mistaken in alleging
that the advocacy rule was relevant to the points which I raised
in my supplementary question, having regard to the definition
of the advocacy rules in Section 3 and the principles behind them.
The three general points I raised in my supplementary question
to the Prime Minister concerning the ISA proposals, as set out
in the Inland Revenue consultative document, were not specifically
or directly relevant to Guinness Flight Hambro or its clients:
viz the unhappiness of many of the seven million PEP and TESSA
investors with the proposed £50,000 limit on the amount of
their existing PEP and TESSA investments which they will be able
to roll over under the new ISA proposals; the problem that unless
the present regulatory arrangements are changed, it will not be
possible to regulate a mixture of cash, insurance product and
security investments together, as they have separate regulatory
regimes and rules for the three different asset classes; and that
ISAs offer nothing to lower income groups which could not also
have been provided under the existing PEP and TESSA structures.
I am not entirely clear
as to the meaning of the last sentence in Mr Barnes's second point
of order - "he has clearly been involved in advocacy on behalf
of those bodies (ie Guinness Flight Hambro companies) because
PEPs and ISAs are in direct opposition to their interest".
Guinness Flight is a PEP manager and, along with all other Investment
Management businesses who are PEP managers, should become an ISA
manager, once the new ISA arrangements are finalised and in place.
Guinness Flight Hambro is not a TESSA manager, but under the
ISA proposals Guinness Flight could, in principle, as an ISA manager,
provide an ISA cash Fund, investment option. The new ISA arrangements,
when they are finalised, are likely to have little or no net effect
on Investment Managers such as Guinness Flight Hambro (ie compared
with the present PEP and TESSA regime).
By analogy, under Mr Barnes's
interpretation of the advocacy rule, a Member who is a practising
Chartered Accountant could not initiate any Parliamentary proceeding
relating to any fiscal matters, nor could any other Member employed
as a professional in another walk of life raise matters in Parliament
of general relevance to their particular area. The inclusion
of the words "specifically and directly" in Section
3 58,1, make it clear that such is not the intent.
To conclude, other than
when asking a supplementary question at Prime Minister's Question
Time, where per Madam Speaker's response to Mr Barnes, I had understood
that Members did not declare an interest, I would otherwise have
declared an interest, ie as relevant to the Investment Management
industry: otherwise I do not think that the three general points
I raised in my supplementary question at all amounted to advocacy
as defined in the rules.
8 January 1998
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