APPENDIX
Memorandum submitted by the Parliamentary
Commissioner for Standards
Complaints against Eighteen Members
1. On 7 March 2001, Mr John Cryer (Member
for Hornchurch) wrote to me (Annex A) making complaints against
the following 18 Members:
| Rt Hon Kenneth Clarke
Mr Geoffrey Clifton-Brown
Mr Michael Fallon
Mr Howard Flight
Mr Edward Garnier
Mr Christopher Gill
Mr John Hayes
Rt Hon David Heathcoat-Amory
Rt Hon Michael Jack
| | Mr Tim Loughton
Rt Hon Sir Geoffrey Johnson-Smith
Mr John Maples
Mr Archie Norman
Mr Richard Page
Sir Michael Spicer
Mr Robert Syms
Mr Ian Taylor
Mr Nicholas Winterton
|
| | |
2. The thrust of Mr Cryer's complaint in
each case was that the named Member had pecuniary interests which
he had failed to declare on one or more occasions. Mr Cryer's
letter of complaint was supplemented by 26 Hansard extracts of
the debates in which the individual Members took part. In each
case Mr Cryer highlighted the passages to which he wished to draw
attention as evidence in support of his complaint. Mr Cryer also
provided notes in relation to each extract indicating the subject
matter of the remarks by the Member concerned and the registered
interests which he (Mr Cryer) considered to be relevant.
3. In his letter of 7 March, Mr Cryer explained
the background to his complaints as follows:
"Can I assure you that I am not in any way seeking
to be vexatious in making these complaints? I am aware of the
hearings of the Committee last week when the issue of vexatious
and 'tit for tat' complaints was raised. I must stress that this
is not my intention in submitting these complaints.
These complaints follow upon publication of the 17th
Report of the Committee of Standards and Privileges.[7]
Their report followed upon your report and dealt with a complaint
on a failure by a Member[8]
to declare relevant interests in four manufacturing companies
during various debates between 1992 and 2000. The complainant
in that case specified a number of debates related to "the
economy in general and more specifically to manufacturing industry,
small businesses and exchange rates". The complainant maintained
that the Member's "contributions touched on issues of direct
relevance to" the Member's "business interests"
and that accordingly the Member "ought to have made an appropriate
oral declaration". "
4. Mr Cryer then quoted three passages from
my memorandum in relation to the complaints against Mr Sheldon:
"The key point in any case is that the companies
represent business interests held by [the Member] which are affected
by economic conditions in general and arguably by government policy
towards small business and the exchange rate in particular".
"By contributing to a debate a Member seeks
either to change the law or to influence the Government or the
wider climate of opinion in the House or outside. The House and
public are entitled to know of any financial interests which may
have helped to shape his or her standpoint in the relevant proceeding".
"There was therefore in the spirit of the rules
a presumption in favour of making a declaration in the circumstances"
of the debates listed by the complainant.
5. Mr Cryer's letter concluded:
"In paragraph 61 [of my memorandum on the complaints
against Mr Sheldon] you upheld the complaint.
With this judgement in mind, I am submitting to you
the 26 complaints referred to relating to speeches made by 18
Members. It seems to me that they are similar in nature and, in
some cases, replicate the case you upheld in paragraph 61 of the
Committee's 17th Report. Whilst they are submitted
collectively, can they be treated as individual complaints?"
6. In view of their common source and the
similarity of the alleged breaches of the rules relating to the
declaration of interests, I thought it appropriate, and for the
convenience of the Committee, to deal with all eighteen complaints
in a single memorandum. They remain, however, separate complaints
against different Members and I have treated them accordingly.
Complaints in relation to which no further inquiry
was warranted
7. Paragraph 68 of the Code of Conduct and
Guide to the Rules relating to the Conduct of Members states that
if the Commissioner decides that a complaint lacks sufficient
"substance to merit further inquiry", [she] "may
at [her] discretion reject the complaint without further reference
to the Committee." The paragraph continues: "The receipt
of a complaint by the Commissioner is not to be interpreted as
an indication that a prima facie case has been established."
8. In exercise of this discretion I carefully
considered each of the Hansard extracts provided by Mr Cryer,
together with his supporting notes. I concluded in the case of
the complaints against 13 of the Members (and in the case of certain
of the complaints against the remaining five) that no further
investigation by me was warranted. At the same time, I decided
to make preliminary enquiries in relation to the outstanding complaints
against the other 5 Members, namely: Mr Clifton-Brown, Mr Fallon,
Mr Hayes, Sir Michael Spicer and Mr Syms.
9. The criteria I applied in reaching these
decisions were no different from those which I have followed in
any other case of alleged non-declaration of interests, including
that mentioned by Mr Cryer involving Mr Sheldon.
10. In a letter to Mr Cryer dated 22 March 2001
(Annex B), I informed him of my decision not to pursue further
the complaints against 13 of the Members, as follows:
"I have looked carefully at the complaints which
you have made about the [... ] 13 Members and I am not of the
view that the pecuniary interests, in these instances, were sufficiently
relevant to the debate in question for it to be reasonably thought
by others to have influenced the speech."
11. On the same date I wrote to each of the 5
remaining Members asking for their comments in response to Mr
Cryer's complaints.
12. On 2 April, Mr Cryer wrote to me again (Annex
C) questioning my decision in relation to 13 of the 18 Members
in the following terms:
"I have to say I can see no difference in the
complaints I made about the five members who are now the subject
of your preliminary enquiries and the remaining thirteen.
I would be grateful if you could let me have an explanation
as to why the complaints against the thirteen have been dismissed."
13. In my reply to Mr Cryer, dated 9 April 2001
(Annex D), I told him:
"I am not required to explain the exercise of
this discretion either to complainants or to the Standards and
Privileges Committee and it is not my usual practice to do so.
Suffice it to say that I considered each of the relevant Hansard
extracts very carefully and formed a view in each case whether,
having regard to the subject matter of the debate, the Member's
remarks, and the nature of any interest held by him I had grounds
for conducting any preliminary inquiries."
14. In the following paragraphs I deal in turn
with the complaints against the five Members in relation to which
I decided, in the light of the Rules relating to the Conduct of
Members, to conduct further inquiries.
The Rules relating to the Declaration of Interests
15. The rule relating to declaration of interests,
as set out in the Code of Conduct and Guide to the Rules relating
to the Conduct of Members (page 16), is:
"In any debate or proceeding of the House or
its Committees or transactions or communications which a Member
may have with other Members or with Ministers or servants of the
Crown, he shall disclose any relevant pecuniary interest or benefit
of whatever nature, whether direct or indirect, that he may have
had, may have or may be expecting to have."
To which the following note on the test of relevance
is appended:
"It is the responsibility of the Member, having
regard to the rules of the House, to judge whether a pecuniary
interest is sufficiently relevant to a particular debate, proceeding,
meeting or other activity to require a declaration. The basic
test of relevance should be the same for declaration as it is
for registration of an interest; namely, that a pecuniary interest
should be declared if it might reasonably be thought by others
to influence the speech, representation or communication in question.
A declaration should be brief but sufficiently informative to
enable a listener to understand the nature of the Member's interest."
a) Complaints against Mr Geoffrey Clifton-Brown
16. The complaints against Mr Clifton-Brown relate
to his participation in three debates— on 5 July 2000 and
on 7 and 8 December 2000.
17. Mr Clifton-Brown's relevant Register entries
as at 31 January 2000 were:[9]
"2. Remunerated employment, office,
profession etc
Farming in the UK
Associate of the Royal Institute of Chartered Surveyors.
8. Land and Property
Agricultural holdings in Norfolk and Gloucestershire.
Small amount of forestry in Scotland.
9. Registrable shareholdings
(a) Alder Investment Ltd; investment management."
Case 1: Debate on 5 July 2000
18. On 5 July 2000 Mr Clifton-Brown initiated
and took part in a debate in Westminster Hall on the Euro (Annex
A attachment 1). Mr Cryer maintained that, given the subject matter
of the debate, Mr Clifton-Brown ought to have declared relevant
interests in: investment management; forestry; agricultural holdings;
and farming.
19. In his response, dated 4 April 2001 (Annex
E), Mr Clifton-Brown said:
"Three of my declared interests, namely forestry,
agriculture and farming are thought to have a conflict of interest
with the entire speech that I made on the Euro in Westminster
Hall on the 5th July 2000, in which I did not mention
any of these interests.
Whilst it could be perceived by some that agriculture
might have something to gain by the United Kingdom joining the
European Monetary System (EMS), as far as I am aware this is not
the official view of the major farming organisations and indeed,
there is not unanimity within the industry that this is so. In
any case my speech was critical of the Government's position on
the United Kingdom joining the EMS.
However, may I suggest that if the requirement to
declare an interest is interpreted so widely as to link an interest
in agriculture with issues relating to the Euro, then there will
be a great many Members who will inadvertently transgress the
rules and consequently the whole system could be brought into
disrepute?"
Analysis
20. I should perhaps first deal with two misconceptions
in Mr Clifton-Brown's response to this aspect of the complaints
against him.
21. The first is that Mr Clifton-Brown appears
to believe that the requirement to make a declaration implies
a conflict of interest. This is not so. A conflict of interest
is normally held to arise when a Member's private interest is
at odds with the public interest—in which case the Member
is expected, under the Code of Conduct, to resolve that conflict
in favour of the public interest. The duty to declare an interest
does not necessarily call in question a Member's motives in raising
an issue but is designed to alert the House, and the public, to
any matter which might reasonably be thought by others
[10]to
influence his or her actions in Parliament or dealings with Ministers
or officials.
22. The second misconception on the part of Mr
Clifton-Brown is that, for the purposes of declaration, an interest
is only relevant to the subject matter of a debate if it is directly
referred to by a Member in his speech. Again, this is not necessarily
the case. For example, a Member may use a speech to canvass the
arguments for (or against) a policy which is of prime concern
to an industry in which he has an interest. Even though the Member
does not specifically mention that industry in support of his
case, the House is entitled to know about his interest in it so
that it can judge what weight to attach to that factor when considering
the Member's arguments.
23. As regards the debate on 5 July 2000, there
is no doubt that the level of the exchange rate, and hence the
desirability or otherwise of the United Kingdom joining the Euro,
is a matter of considerable importance to the agriculture sector,
principally because of the way in which commodity prices are calculated
under the Common Agricultural Policy and the effect on exports.
Mr Clifton-Brown has a registered interest in farming—which
I assume is also covered by his separate entry relating to agricultural
holdings under Category 8. (I do not consider that Mr Clifton-Brown's
interests in investment management or forestry were sufficiently
relevant to require declaration in this debate.)
24. Given the salience to agriculture of Government
policy towards the Euro—which is greater than for most sectors
of industry—there was undoubtedly a case for Mr Clifton-Brown
to make a declaration of his interest in farming. But, on balance,
I do not consider that this was a serious omission on his part.
25. I do not generally think it sensible to consider
one complaint by reference to another which has already been dealt
with, although of course it is important that both I and the Committee
act consistently and even-handedly as between different Members.
However, in view of the fact that Mr Cryer has sought to make
a direct comparison between the cases included in his complaints
and the Committee's findings in the case of Mr Sheldon, I should
perhaps address that point briefly in the context of this part
of the complaint against Mr Clifton-Brown.
26. In my memorandum in relation to Mr Sheldon,[11]
I indicated that there ought to have been a general presumption
in favour of his making a declaration in all but one of the cases
included in the complaint against him. And I concluded that in
eight of those cases, Mr Sheldon definitely should have declared
his interests.
27. The key difference between the example involving
Mr Sheldon and Mr Clifton-Brown's comments on the Euro is, in
my view, that Mr Clifton-Brown was raising a major policy issue
which had (and has) implications for business generally but is
of particular concern to a sector of industry in which he had
a pecuniary interest. Mr Sheldon, in the examples I have referred
to, was seeking either assistance for, or help in alleviating
the particular problems of, industry, in the health of which,
as a major shareholder in a company producing textiles, he had
a personal financial interest.
28. These are, of course, difficult and sensitive
judgments to make, both for me and for the Committee. We might
not be called upon to do so with such frequency if Members' first
impulse was to ask themselves whether there was any reason not
to declare a relevant interest—an approach which is standard
practice in local government, other public authorities and business—rather
than adopting the reverse approach. I should make it clear that
this observation is not directed at Mr Clifton-Brown personally,
but applies to all Members.
29. Although it did not form part of Mr Cryer's
complaint, I should also address the issue of advocacy, particularly
as Mr Clifton-Brown initiated the debate on 5 July 2000. After
considering this issue carefully, I do not believe that the proceedings
in question "related specifically and directly to the affairs
and interests" of the body from which Mr Clifton-Brown derived
a pecuniary benefit (in this case the farming industry), as required
by paragraph 58 of the Code of Conduct. Although, as I have indicated,
Government policy on the Euro has a direct bearing on agriculture,
its importance is not confined to the farming sector.
Case 2: Debate on 7 December 2000
30. On 7 December 2000, Mr Clifton-Brown intervened
in another Member's speech in the debate on the Queen's Speech
to refer to the issue of cigarette smuggling (Annex A, attachment
2). Mr Cryer drew attention to the fact, as recorded in Mr Clifton-Brown's
Register entry, that on 13 October 1999, he had attended a shoot
as the guest of the Tobacco Manufacturers Association. This interest
was registered on 17 December 1999.
31. In his response (Annex E), Mr Clifton-Brown
said:
"On 7 December 2000, during a debate on the
Address, I intervened on our Shadow Health Secretary regarding
tobacco. The substance of that intervention called for better
enforcement of action against cigarette smuggling. Bearing in
mind that this was a brief intervention, in the heat of the debate
I did not consider that a declaration would be appropriate. May
I also add that the hospitality that I received from the Tobacco
Manufacturers Association took place on 13 October 1999. Therefore
well over a year had elapsed before my intervention. I wonder
therefore whether a declaration is required under the rules?
May I again say, with humility, that if interventions
are to be so carefully scrutinised in future, the whole House
should be made more widely aware of this fact and the Speaker
will need to take this into account in calling for short interventions."
Analysis
32. I am in no doubt that the subject of measures
to counteract cigarette smuggling are of direct concern to the
tobacco industry and that the hospitality which Mr Clifton-Brown
had received from the industry's trade association might reasonably
have been thought by others to have influenced him in making his
intervention.
33. I cannot agree with Mr Clifton-Brown that
a declaration would unduly prolong an intervention. A Member's
first duty is to declare his interests briefly but accurately,
where this is appropriate; the remainder of his remarks, even
in an intervention, must be tailored to the remaining time available.
34. The only other question for me to consider
is Mr Clifton-Brown's contention that a declaration was not called
for because the hospitality was provided by the tobacco industry
association in October 1999, some fourteen months before the debate
in which he intervened. The relevant rule (paragraph 38 of the
Code of Conduct and Guide to the Rules) states that past interests
must also be declared. Although in practice this refers to interests
held "in the recent past", that definition includes
interests "contained in the current printed edition of the
Register". Mr Clifton-Brown's entry relating to hospitality
from the tobacco industry association appeared in the January
2000 edition of the printed Register—the most recent available
in December 2000. I cannot therefore agree that Mr Clifton-Brown's
interest with the tobacco industry had ceased to be relevant.
Case 3: Debate on 8 December 2000
35. On 8 December 2000, during a debate on the
Queen's Speech which dealt with a number of different issues,
Mr Clifton-Brown referred briefly to the state of agriculture,
which he described as being "in utter crisis" (Annex
A, attachment 3). He then said that the industry "needs help
now" and accused the Government of failing to provide it.
Mr Cryer drew attention to what he saw as the connection between
this plea for assistance to agriculture and Mr Clifton-Brown's
own farming interests.
36. In his letter of 4 April 2001 (Annex E),
Mr Clifton-Brown responded in the following way:
"On 8 December I made an entire speech on education
and industry. This was a wide-ranging speech raising problems
in my constituency relating to health, education and police. There
was one short paragraph requesting help for farmers. I have a
particular problem in that I represent a very large rural constituency
in which (mainly stock) farming is the second largest industry.
I have declared [ie registered] my farming interests in Norfolk.
However I discussed with the Registrar yesterday that greater
clarity in potential conflict of interests could be provided by
redefining my interest to include the word arable.[12]
However, I fully accept that I should have declared
this interest before making my statement and I apologise to you
and the Committee for not doing so."
37. Mr Clifton-Brown's letter concluded as follows:
"I have enclosed as an appendix the references
to ten speeches that I have made where I have declared an interest.[13]
This illustrates that it is my normal practice to make a declaration
when it is necessary to do so."
Analysis
38. I agree with Mr Clifton-Brown that he ought
to have declared an interest in agriculture during the passage
of his speech relating to farming, particularly in view of the
fact that, however, briefly, he was seeking Government assistance
for the industry.
39. I do not, on balance consider that this constituted
advocacy on Mr Clifton-Brown's part. He did not initiate the relevant
proceedings. Moreover, although the source of Mr Clifton-Brown's
benefit is agriculture- the subject of his pleas for assistance-
his specific interest is arable farming. It is true that
Mr Clifton-Brown only subsequently amended his entry to reflect
this fact, but it remains the case that the narrower definition
was a correct description of his interest at the point when he
made his speech.
40. I should add that in none of the three cases
involving Mr Clifton-Brown do I consider that the failure to declare
an interest was wilful.
b) Complaints against Mr Michael Fallon
41. The complaints against Mr Fallon related
to his participation in three debates—on 24 November 1999,
23 March 2000 and 7 December 2000.
42. Mr Fallon's relevant Register entries for
the period in question were:
"Register of Members' Interests as at
31st January 1999
1. Remunerated directorships
Just Learning Ltd; nursery schools
2. Remunerated employment, office, profession
etc.
Adviser on business development to Tamaris PLC; nursing
homes (resigned 23 December 1997)
Fees from occasional market research, journalism
and lecturing.
Economic adviser (no parliamentary involvement) to
Kleinwort Benson Private Bank.
9. Registrable shareholdings
(a) Just Learning Ltd.
Metermaster Ltd.; automated metering
Register of Members' Interests as at 31st
January 2000
1. Remunerated directorships
Just Learning Ltd; nursery schools.
Bannatyne Fitness Ltd.; fitness clubs.
2. Remunerated employment, office, profession
etc.
Fees from occasional market research, journalism
and lecturing.
9. Registrable shareholdings
(a) Just Learning Ltd.
Metermaster Ltd.; automated metering."
Case 1: Debate on 24 November 1999
43. On 24 November 1999 Mr Fallon took part in
a debate on the Queen's Speech. In the course of his remarks he
made two separate references to the needs of small businesses,
with particular reference to taxation and regulation, including
rights to family leave (Annex A, attachment 4). Mr Cryer argued
that Mr Fallon ought to have declared his interests as a director
of (i) Just Learning Ltd, a company providing nursery education
and (ii) Bannatyne Fitness Ltd, a company involved in running
fitness clubs. The first directorship appeared in the printed
Registers for both January 1999 and January 2000; the second was
recorded only in the latter. (But this might still have been a
relevant interest when Mr Fallon spoke on 24 November 1999 if
it had been acquired before that date or if Mr Fallon had "a
reasonable expectation"[14]
of acquiring it).[15]
44. In his response, dated 2 April 2001 (Annex
F), Mr Fallon said in relation to this part of the complaints
against him:
"I was not a director of Bannatyne Fitness Ltd
at that time. In the passage of which Mr Cryer complains, I referred
twice to small businesses in my constituency (cols. 674 and 675).
Just Learning Ltd is not a small business and does not operate
in my constituency. Nonetheless, I did not declare my registered
interest in Just Learning Ltd, and I apologise for this oversight."
45. My office telephoned Mr Fallon to check with
him when Bannatyne Fitness Ltd had first proposed to him that
he should become a director. Mr Fallon said that he could give
an exact date, because the suggestion had emerged during the course
of a dinner he had had with the Chairman of the company, Mr Duncan
Bannatyne on 22 December 1999. Mr Fallon added that the Companies
Act statement of his appointment as a director was dated 29 December
1999.
Analysis
46. I agree with Mr Fallon that he ought to have
declared his business interests when talking about issues of company
taxation and regulation and that on the dates in question those
interests included his directorship of Just Learning Ltd.
47. I do not think it is necessary for me to
enter into detailed argument about whether or not Just Learning
Ltd is a small business—not least because Mr Fallon has
not sought to rely on this point in his response. Moreover, there
are various definitions of this term. I believe in any case that
those listening to Mr Fallon, and the wider public would have
assumed from the description of the company (and that of Bannatyne
Fitness Ltd in which Mr Fallon acquired an interest shortly afterwards)
that these were companies which could be adversely affected by
the sort of regulation criticised by Mr Fallon.
48. There is more uncertainty over whether Mr
Fallon, when he spoke on 24 November 1999, had a reasonable expectation
of acquiring, or of being offered, a directorship of Bannatyne
Fitness Ltd. Mr Fallon said that the matter was not raised until
he met Mr Bannatyne on 22 December 1999. The appointment certainly
seems to have been agreed and put into effect with considerable
speed over the Christmas period of 1999. Nevertheless, in the
absence of evidence to the contrary I accept Mr Fallon's assurance
that when he spoke in the House of Commons he was not expecting
to be made a director the company.
Case 2: Debate on 23 March 2000
49. On 23 March 2000 Mr Fallon spoke in a debate
on the Budget (Annex A, attachment 5) and referred in the course
of his remarks to business regulation and taxation. Mr Cryer drew
attention to Mr Fallon's registered interests in Just Learning
Ltd and Bannatyne Fitness Ltd.
50. In his response (Annex F) Mr Fallon said:
"I did declare my interests at col 1153. My
comments about the effect of the budget on business were entirely
general."
Analysis
51. Mr Fallon is correct in stating that at the
beginning of his speech, he made a declaration of interests. The
words he used were:
"I declare the business interests recorded in
the register."
52. Although this technically met the requirements
of the rules relating to declaration, I would draw to the attention
of Mr Fallon (and all Members) the following guidance contained
in paragraph 39 of the Code of Conduct and Guide to the Rules:
"A declaration should be brief but sufficiently
informative to enable a listener to understand the nature of the
Member's interest."
53. One of the main purposes of establishing
rules for declaration additional to those for registration is
to enable the House to be informed during proceedings, without
the need for recourse to the Register, of any relevant interest
held by a Member. A declaration of interests, where required by
the rules, arises directly from a Member's remarks and must be
immediately intelligible in that context. It must be doubtful
whether Mr Fallon's declaration met that test, although his formulation
is one frequently used by Members.
Case 3: Debate on 7 December 2000
54. On 7 December 2000 Mr Fallon took part in
a debate on the Queen's speech. During the course of his speech
(Annex A, attachment 5A) Mr Fallon referred to the adverse effects
on businesses of excessive bureaucratic and regulatory burdens.
Mr Cryer again pointed to Mr Fallon's registered interests in
Just Learning Ltd and Bannatyne Fitness Ltd.
55. Owing to a misunderstanding in my office,
for which I apologise to Mr Fallon, Mr Fallon did not receive
a copy of the Hansard extract for 7 December 2000 with my letter
of 22 March 2001. He therefore included his response to this part
of the complaints against him in his comments on my memorandum
in draft.[16]
I am grateful to Mr Fallon for agreeing to deal with this matter
at relatively short notice.
56. In his response in two letters dated 2 May
2001 (Annexes L and M), Mr Fallon said:
"I have now checked the speech of 7th December.
Again, though I was speaking about small businesses, it could
be argued that I should have declared my interest in Just Learning
Ltd and I apologise to you and the Committee for this oversight."
Analysis
57. I agree with Mr Fallon that in the debate
on 7 December 2000 he should have declared his interest in Just
Learning Ltd, for the reasons given earlier in relation to the
case involving the debate on 24 November 1999, which is very similar.
I would add, however, that the same applies with equal force to
Mr Fallon's interest in Bannatyne Fitness Ltd, which he had acquired
in December 1999.
58. I am not of the view that Mr Fallon's failure
to declare his interests on any of these three occasions was a
deliberate omission.
59. Nor do I do not consider that any of Mr Fallon's
remarks in the three debates raise issues of advocacy, particularly
in view of the fact that he did not initiate any of the debates.
c) Complaint against Mr John Hayes
60. The complaint against Mr Hayes relates to
a debate on the Budget in which he took part on 21 March 2000
(Annex A, attachment 6). Part of Mr Hayes's speech was devoted
to methods of encouraging small and medium sized businesses to
invest in, and make more effective use of, information technology
(IT). He also made a brief reference to the proposed change in
the tax treatment of personal service companies (IR 35), of particular
application to the IT sector. Mr Cryer pointed to Mr Hayes's registered
interest in The Database (Nottingham Ltd), an IT company.
61. Mr Hayes's relevant Register entries at 31
January 2000 were:
"1. Remunerated directorships
The Database (Nottingham) Ltd; information technology
company.BES Assured Tenancy companies:
Cloverspa Ltd
Walldale Ltd
Costwell Ltd
9. Registrable shareholdings
(a) Cloverspa Ltd
Walldale Ltd
Costwell."
62. Mr Hayes telephoned me on 5 April to discuss
the complaint and to give me an indication of his likely reply.
63. In his formal response, dated 11 April (Annex
G), Mr Hayes explained the position as follows:
"At the time of my speech on the 2000 budget
I had no relevant remunerated directorships or other any other
employment, other than my employment as a Member of Parliament.
Indeed, I have had no professional involvement with the IT industry
since 7 December 1999 when I resigned as a director of The Data
Base—the company for which I worked for many years before
my election to Parliament. The company was sold in January 2000.
As I was not a shareholder I had no involvement with and received
no benefit from the sale. I have no professional relationship
with the new owner and I have no current or past professional
involvement with any other IT company.
In fact I had done no work for the company for many
months before 7 December 1999 and in the whole of 1999 worked
for The Data Base for only a few days. So although I know that
the advice to Members is to declare "recent past" interests,
my remunerated employment with the industry cannot be said by
the time of my speech on 21 March 2000 to have been "recent".
Considering my speech itself, even if none of the
above applied, I suggest that a declaration of interest would
have been perverse. I argued in the relevant part of the speech
a case against IR 35, which applies only to individual self-employed
IT consultants. Neither my former company nor I fell, at any time,
into this category. So, not only did I "neither seek preferential
treatment for or seek to promote the interests of" IT supplies
like The Data Base, I actually made a case against them. I argued
in my speech against the acquisition of IT products and services
in favour of the better use of existing, already purchased, IT
equipment and for the employment of the kind of individual private
IT consultants against whom The Date Base competed. The equivalent
would be an MP who was also a taxi driver promoting the case for
trains and buses and being accused of doing so because of a pecuniary
interest!
With this in mind, no reasonable person could conclude
that "financial interests could have shaped" my "standpoint"
in these proceedings or "influenced the performance"
of my public duty (I draw the key phrases from previous reports
of your committee). Indeed, it might reasonably be estimated that
such past interests as I had would have led me to express the
opposite point of view. A reasonable person, on the other hand,
might come to the conclusion that, in the best traditions of parliament,
I was drawing on past experience—without regard to private
interests—to add value to the debate. If Members cannot
behave thus I suggest that they can barely contribute meaningfully
to the business of Parliament at all.
Mr Cryer cites three other companies with which I
was once associated. These had no connection whatsoever with the
IT industry, IR 35 or any of the content of my speech. They were
BES companies the sole business of which was renting properties
which they acquired many years ago.
The current register shows that I no longer hold
an IT company directorship, but—due to an oversight on my
part—the 2000 Register did not do so. The Register was compiled
in December 1999, shortly (a couple of weeks) after I ceased to
be, nominally, involved with my old company. I acknowledge that
I should have updated my entry sooner. I respectfully suggest,
however, that in respect of changes to Members' entries the Code
of Conduct (1.10) is targeted more at those acquiring interests
than those surrendering them (1.11 clearly suggests this); particularly
when, as in my case, the Member gains no advantage from not amending
the Register.
Given my employment status, the absence of a pecuniary
interest at the time of the speech concerned or recently before
it and paragraphs 4 and 5 above, Mr Cryer's criticisms of me are
groundless."
Analysis
64. Mr Hayes's connection with the IT industry
was plainly relevant to his remarks in the debate on 23 March
2000. Given that Mr Hayes resigned his directorship of the The
Data Base (Nottingham) Ltd on 7 December 1999—although the
relevant item was not removed from the Register until 10 May 2000—the
question which arises is whether his previous interest was still
sufficiently recent to require a declaration.
65. The fact that Mr Hayes's directorship of
The Data Base (Nottingham) Ltd was still registered when he spoke
in the debate on 21 March 2000 is not strictly relevant since,
according to Mr Hayes, the entry no longer accurately reflected
his registrable interests. Had Mr Hayes deleted the entry as soon
as he was entitled to, it would not have appeared in the printed
edition of the Register current on 21 March 2000 (that is to say
the edition dated 31 January 2000)—which is the criterion
for declaring relevant past interests mentioned in paragraph 38
of the Code.
66. This criterion must not, however, be applied
too literally otherwise anomalies could arise. A Member could,
for example, otherwise claim that an interest relinquished, and
removed from the Register on the last possible date for changes
to be included in the next edition, was not a relevant past interest
for the purposes of a debate on the day after the new edition
was published.
67. In this case, Mr Hayes gave up his directorship
some 3½ months before the debate on 21 March 2000. In my
view this was sufficiently recent to have required Mr Hayes, at
the very least, to have seriously considered making a declaration.
68. It is not correct, as Mr Hayes suggested,
that for a declaration to be necessary, a Member's participation
in proceedings must take the form of arguing for something of
benefit to the organisation (or individual) with whom the Member
has a pecuniary interest.
69. I have no reason to believe that Mr Hayes's
failure to declare his interests was deliberate. Nor do I regard
Mr Hayes's remarks as having infringed the advocacy rule, particularly
since he did not initiate the debate in question.
70. Although Mr Hayes, in his response, referred
to three assured tenancy companies in which he had an interest
(since relinquished), these did not form part of Mr Cryer's complaint
and I do not see any need to make any comment on them.
d) Complaint against Sir Michael Spicer
71. The complaint against Sir Michael Spicer
relates to a debate on the Budget on 21 March 2000 (Annex A, attachment
7), in which he criticised the regulatory burdens imposed on the
public utilities, including a specific reference to the views
of the former electricity industry regulator. Mr Cryer drew attention
to Sir Michael's registered interest as the remunerated non-executive
president of the Association of Electricity Producers.
72. The relevant part of Sir Michael's Register
entry as at 31 January 2000 was:
"1. Remunerated
directorships
Non-executive President of the Association of Electricity
Producers."
73. Sir Michael responded to the complaint in
a letter, dated 26 March 2001 (Annex H). He said:
"The speech to which Mr Cryer refers was one
of two very similar speeches I made around the same time in which
I argued for greater competition and less regulation for industry
as a whole. The first speech, made on 17 November 1999 was criticised
in your report of 23 May 2000. Although I had previously registered
and, where I thought appropriate, had declared the interest in
Parliament, I have been meticulous since your report, where there
has been the slightest possibility of any indirect read across,
to re-declare the interest. I would consider any attempt further
to pursue this matter by a Labour controlled Committee to be politically
vindictive. Indeed it would be outrageously unbalanced taking
into account other cases of a far more serious nature brought
against Labour MPs and which have been largely dropped by the
Committee. The whole process in now in danger of being brought
into great disrepute."
Analysis
74. Sir Michael's speech on 21 May 2000 was very
similar in scope and content to that of 17 November 1999 in relation
to which the Committee upheld a complaint of non-declaration in
its Thirteenth Report of Session 1999-2000.[17]
In both cases a wide-ranging analysis of various economic issues
included a passage relating to the regulation of public utilities.
As the remunerated non-executive president of the Association
of Electricity Producers Sir Michael plainly had a relevant pecuniary
interest which might reasonably have been thought by others to
have influenced him in his decision to raise the issue in the
way that he did.
75. Since I believe they are equally applicable
to the current case, I repeat here the relevant observations in
my memorandum on the previous complaint against Sir Michael:
"Although these remarks by Sir Michael were
neither lengthy nor particularly detailed, they represented more
than merely passing references. At the time of the debate, Sir
Michael was a paid officer of the trade association for an industry
which was directly affected by [regulation issues] and of which
he made at least one specific mention in his speech.
For this purpose it is not relevant, contrary to
what Sir Michael appears to believe,[18]
whether the remarks in question can be construed as favouring,
or otherwise, the organisation from which the Member receives
a benefit. The test is whether the nature of the interest, whether
direct or indirect, is such that, given the subject matter of
the Member's remarks, the House should be made aware of it.
I do not believe that Sir Michael had a conflict
of interest in the sense implied by the complainant. But he had
a relevant interest which the House was entitled to know
about, so that it could attach whatever weight it saw fit to Sir
Michael's comments."[19]
76. Sir Michael is right to point out in his
letter of 26 March 2001 that the Committee's report on the previous
complaint against him was published on 23 May 2000, in other words
after his speech on 21 March 2000 which forms the subject
of the current complaint.
77. I have no reason to believe that Sir Michael's
failure to declare an interest on this occasion was anything other
than an oversight on his part. Nor do I take the view that Sir
Michael's remarks about utility regulation constituted advocacy,
particularly in view of the fact that he did not initiate the
debate concerned.
e) Complaint against Mr Robert Syms
78. The complaint against Mr Syms relates to
a speech he made on 22 March 2000 in the debate on the Budget
(Annex A, attachment 8), in which he made three references to
Government policy towards the construction industry, taxes on
road users, and investment in the roads system, respectively.
Mr Cryer drew attention to Mr Syms's registered interest in a
family business involved in property, building and road haulage.
79. The relevant part of Mr Syms's Register entry
as at 31 January 2000 was:
"1. Remunerated directorships
Marden Holdings Ltd.; family business with interests
in property, building and road haulage.
9. Registrable shareholdings
(a) Marden Holdings Ltd."
80. Mr Syms came to see me on 26 March 2001 to
discuss the issues raised by the complaint.
81. Mr Syms's formal response to the complaint
was set out in a letter of the same date (Annex I), which read
as follows:
"Thank you for your recent letter concerning
the complaint you have received about my contribution to the Budget
Debate on 22 March 2000. Having re-read my contribution I am happy
with my speech except for the section when I mention the Construction
Industry Scheme, when I should have drawn Members' attention to
my interests in the Register.
On this occasion I was called to speak at 9.22 pm
as the last back bench speaker and only had a few minutes to compress
a long speech before the Front bench wind up. So under the pressure
of time constraints I did not use my written speech and spoke
without notes resulting in my omitting to mention my interest,
for which I apologise.
When the House next debated the construction industry
in Westminster Hall on Thursday 18 May 2000 you will see from
the record that I did declare my interest at the beginning of
my contribution (column 121 WH)[20]
and I hope you will accept that my failure to declare during the
earlier debate was a genuine error."
82. In a further letter, dated 9 April 2001 (Annex
J), Mr Syms drew my attention to another case in which he accepts
that he had omitted to make the necessary declaration of his interest
in the construction industry:
"Following our meeting and my letter of 26 March
2001 I have been looking through my speeches, interventions and
questions to make sure that there are not other instances [in
which] I have failed to declare an interest.
I have found one more occasion which was a question
I tabled to the DETR (155297) on cash retentions in the building
industry which was answered on 23 March 2001 where I omitted to
tick the ® box.
I thought it best to bring this matter to your attention
and hope that you will be in no doubt that I am dealing with the
complaint in a honest and open manner."
Analysis
83. Mr Syms has acknowledged that, in the debate
on 22 March 2000, he should have declared his interests, through
the family business, Marden Holdings Ltd, in property matters
and the construction industry. In my view, there was also a strong
case for a declaration covering the other issues Mr Syms raised
to which the business activities of Marden Holdings Ltd were relevant,
namely the level of taxation on, and investment in, the road system—matters
of direct concern to the road haulage industry.
84. Mr Syms has explained the circumstances in
which he came to omit a declaration of his interests in the debate
on 22 March 2000, in particular the pressure caused by the need
to compress his prepared speech into a much shorter time. No doubt
this caused a problem for Mr Syms but I would be reluctant to
accept the proposition that such factors could absolve a Member
from his first duty to the House, which is to inform it of any
relevant pecuniary interests he or she holds. Nevertheless, I
have no reason to think that Mr Syms's failure to make a declaration
was anything other than inadvertent.
85. I should also add that Mr Syms displayed
commendable openness and candour in pointing out to me a further
example of non-declaration on his part, which was not subsumed
in Mr Cryer's complaint. Mr Syms's action in this regard is consistent
with, and supportive of, the system of self-regulation which has
been adopted by the House of Commons in order to ensure high standards
of conduct by its Members.
86. For the record, having checked the relevant
Hansard extract, I agree with Mr Syms that a declaration on this
occasion would also have been appropriate.
Conclusions
87. I sent my memorandum in draft form to each
of the five Members who were the subject of Mr Cryer's complaints
to enable them to suggest any corrections of fact or to make more
substantive comments. Mr Clifton-Brown and Mr Syms came to see
me and I received written responses to my memorandum in draft,
dated 2 and 3 May 2001, from Mr Clifton-Brown (Annex K), Mr Fallon
(two letters, Annexes L and M), Mr Hayes (Annex N), and Mr Syms
(Annex O). In addition, I had telephone conversations with Sir
Michael Spicer and Mr Hayes in which they gave me their observations
on the draft memorandum before submitting their formal responses.
88. I have made certain corrections of fact proposed
in the responses and I have carefully considered all the various
comments and taken them fully into account before drafting these
conclusions.
a) Complaints against Mr Clifton-Brown
(i) Debate on 5 July 2000
Mr Clifton-Brown ought to have declared an interest
in farming when taking part in a debate on the Euro. He did not
do so.
Complaint upheld.
(ii) Debate on 7 December 2000
89. When, during a debate on the Queen's Speech,
Mr Clifton-Brown made an intervention about cigarette smuggling
he should have mentioned his interest in the form of hospitality
he had received from the Tobacco Manufacturers' Association. The
intent was sufficiently recent at the time of the debate to require
declaration. Mr Clifton-Brown did not declare it.
Complaint upheld.
(iii) Debate on 8 December 2000
90. During a debate on the Queen's Speech Mr
Clifton-Brown made a brief reference to the difficulties facing
agriculture and called for increased Government assistance. He
ought to have disclosed his interest in farming. He did not do
so. He has apologised for his omission.
Complaint upheld.
b) Complaints against Mr Michael Fallon
(i) Debate on 24 November 1999
91. When taking part in a debate on the Queen's
Speech Mr Fallon referred to the problems facing small businesses,
including the issues of taxation and regulation. His interest
as a director of Just Learning Ltd, a company involved in the
provision of nursery schools was relevant to his remarks about
business regulation and should have been declared. Mr Fallon did
not do so. He has apologised for this omission.
Complaint upheld.
92. So far as Mr Fallon's subsequent appointment
as director of Bannatyne Fitness Ltd is concerned, there is no
evidence to indicate that at the time of the debate Mr Fallon
had a reasonable expectation of acquiring this benefit, such as
would have required him to declare it.
Complaint not upheld.
(ii) Debate on 23 March 2000
93. Contrary to Mr Cryer's assertion, Mr Fallon
did draw the House's attention to his registered business interests
at the beginning of a speech on the Budget in which he spoke about
business regulation and taxation. It would, however, have been
more helpful, and in keeping with the requirements of paragraph
39 of the Code of Conduct and Guide to the Rules relating to the
Conduct of Members, if Mr Fallon's declaration had been more specific
and therefore immediately intelligible to the House without recourse
to the Register.
Complaint not upheld.
(iii) Debate on 7 December 2000
94. In a debate on the Queen's Speech Mr Fallon
touched on the regulatory and bureaucratic burdens imposed on
businesses. As in the case of his speech on 24 November 1999,
Mr Fallon ought to have declared the fact that he had business
interests relevant to the subject matter of his remarks. He did
not do so. He has apologised for this omission.
Complaint upheld.
c) Complaint against Mr John Hayes
95. When Mr Hayes referred, during a debate on
the Budget on 21 March 2000, to methods of encouraging small and
medium sized businesses to expand their use of information technology
(IT) he had a registered interest as a remunerated director of
The Data Base (Nottingham) Ltd, an IT company. Although Mr Hayes
had, in fact, relinquished this directorship some 3½ months
before the debate (but had not amended his Register entry accordingly),
this interest was sufficiently recent to have warranted a declaration.
Mr Hayes did not declare it.
Complaint upheld.
d) Complaint against Sir Michael Spicer
96. At the time of his speech on the Budget on
21 March 2000, during which he referred to the regulatory burden
imposed on the public utilities, Sir Michael was a paid officer
of the Association of Electricity Producers. This fact ought to
have been disclosed to the House in the form of a declaration
of interest. Sir Michael did not do so.
Complaint upheld.
97. Sir Michael has correctly pointed out that
the debate on 21 March 2000 took place before the Committee's
Report on the earlier complaint against him was published (in
May 2000).
e) Complaint against Mr Robert Syms
98. When he took part in the debate on the Budget
on 22 March 2000, in which he referred to Government policy towards
the construction industry, taxation on road users and investment
in the road system, Mr Syms had a relevant interest in the form
of his remunerated directorship of a family business specialising
in property, building and road haulage. This interest ought to
have been declared since it was relevant to Mr Syms's remarks
on all three of the matters listed above. He did not do so.
Complaint upheld.
99. Mr Syms has apologised for failing to declare
his interest in relation to his remarks about the construction
industry. Mr Syms also volunteered the fact that he had omitted
to declare an interest when tabling a written question about the
building industry which was answered on 23 March 2001. He is to
be commended for his openness and candour.
100. In none of these cases involving the five
Members is there any evidence that the failure to declare an interest
(where that has been established) was anything other than inadvertent.
101. Nor did any of the five Members infringe
the advocacy rule in any of their interventions or speeches which
formed the subject of Mr Cryer's complaints.
102. I should also record the fact that all five
Members co-operated fully in providing me with information in
relation to the complaints.
3 May 2001 Elizabeth
Filkin
7 HC (1999-2000) 916. Back
8
Rt Hon Robert Sheldon, Member for Ashton under Lyne. Back
9
Mr Clifton-Brown has since amended this entry by inserting the
word "arable" before the word "farming" under
Category 2. Back
10
Emphasis added. Back
11
HC (1999-2000) 916 paragraphs 42 to 52. Back
12
See paragraph 17 and footnote. Back
13
Not appended to this memorandum. Back
14
Code of Conduct, paragraph 38. Back
15
See paragraph 48 Back
16
See paragraph 87 Back
17
HC (1999-2000) 524. Back
18
ie in his response to the earlier complaint against him. Back
19
Ibid, p. vii (paragraphs 11-12). Back
20
Not attached to this memorandum. I can confirm that the information
provided by Mr Syms is correct. Back
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