Select Committee on Standards and Privileges Third Report


Conduct of Mr Tony Baldry



Introduction

1. The Parliamentary Commissioner for Standards has submitted a memorandum to us relating to a complaint made in March 2005, in the last Parliament, by the Rt Hon George Foulkes, then Member for Carrick, Cumnock and Doon Valley, against Mr Tony Baldry, Member for Banbury. This memorandum is reproduced as the Appendix to this report.

2. At the heart of the complaint lies correspondence between Mr Baldry and the Secretary of State for International Development in respect of activities of Milestone Trading Limited (Milestone) in Sierra Leone. Mr Baldry's letters, it was alleged, had been written on House of Commons notepaper, and Mr Baldry had not declared an existing financial interest in Milestone. Mr Foulkes also subsequently drew attention to correspondence between Mr Baldry and the Vice-President of Sierra Leone, also written on House of Commons notepaper, and asked the Commissioner also to look at similar issues relating to this. Both approaches to the Commissioner from Mr Foulkes followed the publication of articles in the Sunday Times which made a number of allegations about Mr Baldry's conduct in this respect.

3. Mr Foulkes also raised the question of Mr Baldry's position as the remunerated Chairman of the International Development Committee, and whether this did, or should, place particular obligations on him in relation to outside interests.

4. Having been shown a copy of the Commissioner's report, Mr Baldry asked to appear before us. He did so on 19 July and his evidence is published with this report.

5. When we took evidence from Mr Baldry, one of our members, Mr Kevin Barron, was attending a meeting of another select committee of which he is also a member. He accordingly decided to play no part in our proceedings on this report.

The issues

6. As the Commissioner states in his memorandum,[1] the issues raised by Mr Foulkes' complaint fall into a number of distinct groups, four of which fall to us to consider. These are whether Mr Baldry had fully declared the relevant interests in the Register of Members' Interests; whether he properly and fully declared relevant interests in his correspondence with the President and Vice-President of Sierra Leone and the Secretary of State for International Development; whether his approach to the Secretary of State had been in breach of the advocacy rule; and whether he had breached any obligations or restrictions placed on him by virtue of his chairmanship of the International Development Committee. We examine each in turn.

Registration issues

7. The Commissioner concluded that Mr Baldry has properly registered his relevant interests, with the exception, up to 5 April 2005, of his shareholding in Red Eagle Resoures plc. The House was, however, aware that he had some financial interest in the company, because he had properly registered his non-executive chairmanship, but was not aware of its full extent and nature. We agree with the Commissioner that Mr Baldry was in breach of the Code by failing to register his shareholding in this company.

Declaration issues

8. In relation to the correspondence which Mr Baldry conducted regarding Milestone's operations in Sierra Leone with the President and Vice-President, the Commissioner concluded that Mr Baldry did not breach the rules of the House in respect of declaration of interests. At the time of the correspondence, Mr Baldry had no financial interest in Milestone. The Commissioner also concluded that Mr Baldry's financial interests in other companies relevant to the correspondence were known to the President and Vice-President. We agree with the Commissioner on both points.

9. As the Commissioner points out, the situation had changed by the time Mr Baldry wrote to the Secretary of State in January 2005. By then, Red Eagle Resources plc, in which Mr Baldry had both a shareholding and was non-executive chairman, had entered into a partnership agreement with Milestone and had already received a payment from that company for services rendered. There had also been discussions between Mr Baldry and Milestone about the possibility of him becoming its chairman, as and when the company went public, as it planned to do in due course. In the correspondence, Mr Baldry mentioned the possibility of the chairmanship, but omitted any references to the existence of the partnership agreement.

10. We agree with the Commissioner that Mr Baldry should have declared his existing financial interest in Milestone through the partnership agreement and that, as a result, the Secretary of State was not aware of the full scope of his financial links with Milestone. While we share the Commissioner's view that this omission is unlikely to have influenced the nature of the Secretary of State's response, given its terms, we agree with the Commissioner that Mr Baldry did not fully comply with the House's requirements in respect of the declaration of interests in his correspondence with the Secretary of State.

The advocacy rule

11. The Commissioner concludes that, in writing to the Secretary of State in terms that he did, Mr Baldry breached the advocacy rule. At the root of this conclusion lies the question of how the word 'exclusively' is intended to be interpreted in this context.

12. It is clear from the correspondence that Mr Baldry was specifically seeking some sort of reassurance from the Secretary of State as to the probity of Milestone's operations in Sierra Leone. It is also clear that he was not doing so at the behest of the company. Mr Baldry maintains that his motive in raising this matter was twofold: concern to protect the commercial position and reputation of Milestone (in which he had an indirect existing interest and a prospective direct interest) and a wider concern to protect the reputation of British business more generally in the context of inward investment in Sierra Leone. The latter motive was, he maintained one of general public interest. He also maintained that his approach to the Secretary of State would not necessarily be favourable to Milestone; it was possible that it might incur remedial costs if it was found not to be fully compliant.

13. Mr Baldry's argument that his approach to the Secretary of State did not constitute advocacy turns on an acceptance of the proposition that, although the correspondence related exclusively to the affairs of Milestone, the benefits would accrue to a wider constituency. The Commissioner did not accept this proposition, and argues instead that the test to be applied is the scope of the intended immediate beneficiaries of the approach. He put the case for this approach in the following terms: [2]

    "In my view, the question of exclusiveness or otherwise needs to be looked at in terms of the scope of the intended immediate beneficiaries of the approach rather than the distribution of the overall benefit. To take a specific example, a Member might write to a Minister to seek Government financial assistance for a specific company in which he or she had a personal financial interest. There would undoubtedly be benefit to the company from the request being granted, but arguably also wider benefits to the workforce and the economy generally. However, to interpret such an approach as falling outside the scope of the advocacy rule on the grounds that the benefit of the financial assistance sought would extend beyond the direct benefit to the company itself would, in my view, render the rule entirely ineffective. I do not believe that either the Committee on Standards in Public Life or the House intended it to be applied in this way. I am fortified in this belief by the terms of the guidance on the application of the advocacy rule already approved by the House."

14. We agree with the Commissioner that this is the correct approach. We also therefore agree with him that Mr Baldry's approach to the Secretary of State constituted a breach of the advocacy rule.

Mr Baldry's chairmanship of the International Development Committee

15. Mr Foulkes raised the question as to whether this case revealed any grounds for imposing new rules on chairmen of select committees in relation to both declaration of interests and over making representations now they are paid.

16. The Commissioner states that he found no indication whatsoever, in the course of his inquiry, that Mr Baldry had sought to exploit his position as Chairman of the International Development Committee to further his private interests. We agree with the Commissioner on this point, and can see no grounds, based on this case, for recommending any change to the House from the guidance put forward by our predecessors in their Sixth Report of Session 2002-03,[3] and subsequently approved by the House.

17. Notwithstanding this general guidance, we believe it would be prudent for select committee chairmen to think very carefully before taking up individual cases or taking on outside financial interests where there is a risk that their chairmanship may be perceived, or presented, as representing an undue advantage.

Overall conclusion

18. We accept that Mr Baldry has a genuine and long-standing public interest in the development of Sierra Leone. He also has, and continues to have, significant commercial interests in that country. It is important in such circumstances for Members not only to ensure that they properly distinguish these two interests, but also that they distinguish their public role and their private business interests properly, and are seen to do so. We agree with the Commissioner that, in this case, Mr Baldry has not exercised sufficient care in separating these two categories of interest.

19. In essence, in relation to both the registration and declaration of interests, Mr Baldry's omissions meant that the House and the Secretary of State respectively, while aware of the existence of the interests, were not aware of their full scope and potential extent.

20. In relation to the breach of the advocacy rule, Mr Baldry should have realised that he was making an approach to the Secretary of State that related exclusively to a company in which he had an existing indirect financial interest and that any clean bill of health might have been perceived by others as providing him with reassurance over the probity of the company should its chairmanship come his way. Such considerations ought to have alerted him to the possibility that such an approach might be in breach of the advocacy rule.

21. We also note that Mr Baldry has accepted that he should not have used House stationery for his correspondence and has apologised unreservedly for this.

22. We agree with the Commissioner that this case illustrates the importance, not least in terms of public perception, of Members scrupulously separating, and being seen to separate, their public role from any private business interests.

23. Mr Baldry has fully accepted the conclusions of the Commissioner, all of which we have endorsed. He has breached the requirements of the Code of Conduct in a number of respects, most seriously in relation to the advocacy rule. We consider that he should apologise to the House for these by way of a personal statement.


1   Appendix, para 70-71. Back

2   Appendix, para 98. Back

3   HC 1150. See also Seventh Report, Session 2002-03 (HC 1292). Back


 
previous page contents next page

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

© Parliamentary copyright 2005
Prepared 21 July 2005