Standards - Minutes of EvidenceHC 806

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Oral Evidence

Taken before the Standards Committee

on Tuesday 15 October 2013

Members present:

Mr Kevin Barron (Chair)

Sir Paul Beresford

Mr Robert Buckland

Mr Christopher Chope

Mr Tom Clarke

Mr Geoffrey Cox

Sharon Darcy

Sir Nick Harvey

Peter Jinman

Fiona O'Donnell

Walter Rader

Heather Wheeler

Dr Alan Whitehead

________________

Kathryn Hudson, Parliamentary Commissioner for Standards, was in attendance.

Examination of Witness

Nadine Dorries MP, examined.

Q1 Chair: Sorry about the wait, Ms Dorries. We have been having a discussion around some of the issues relating to this case. May I first thank you for coming along and helping the Committee with its current inquiry following the publication of the Commissioner’s memorandum, which I understand you have seen?

Nadine Dorries: Yes.

Q2 Chair: I will open up the questioning and then other members may want to join in. Was Averbrook Ltd a way of concealing earnings from media appearances and articles?

Nadine Dorries: Absolutely not. In fact, that is probably evidenced by the fact that on the very day that Averbrook existed, the first thing that I did was ring the Registrar to say that I wanted the company to be registered. My business partners, who have nothing to do with me personally-he is just a business partner, with his wife-were very clear that, in going into business, they did not want to be brought into the public domain via my political position. I was very keen, however, that everything was done properly, so I rang the Registrar. I did not know at the time what my shareholding was in the company. I said, "I want to be registered," and was told, "You can’t be." At the time, I thought it was going to be a minimal shareholding. I was told, "You can’t be, because you haven’t got"-I remember insisting and wanting the company to be registered and for it to be out there, so that I could follow the rules exactly and have it open and there for everybody to see. It is not a means for me to conceal my earnings, because it is not just about me.

Q3 Chair: Did Averbrook have any other sources of income other than earnings from your media appearances?

Nadine Dorries: The business belonged to my business partner, *****, before it was transferred to me. Actually, it was a transfer for both of us, but the first set of accountants made an error. They thought it was a company that he was transferring to me, but I was actually being included in the company. There was an error for a few months where only my name was on the company when both should have been. On the earnings that go into Averbrook, Andy is a copy editor and I have now produced two books and Andy is part of that. It is not just me; two of us are part of the project. Although the earnings to Averbrook come as a result of projects with my name on the headline, I am not the only person in the team.

Q4 Chair: Does it get any income from any sources other than your media appearances?

Nadine Dorries: No. Andy does not invoice. My agents do not invoice for work that Andy has produced. They invoice for work that I produce, but Andy is a part of the production team that is invoiced for in my name.

Q5 Chair: Do any of your contracts contain any legal provisions for payments for media appearances to be kept confidential?

Nadine Dorries: Yes.

Chair: They do?

Nadine Dorries: Absolutely.

Q6 Chair: So on this issue about what you were paid for media appearances, you would say that that payment goes into the company and is a matter for Companies House and not for the public?

Nadine Dorries: I might have misunderstood your question. Did you ask whether the contracts that I have with media companies are confidential?

Q7 Chair: Are they confidential?

Nadine Dorries: Absolutely. In fact, some of the contracts I sign contain a clause saying that I will not disclose to any third party the contents of the agreement.

Q8 Chair: So if I were to ask, "What were your payments for media appearances?" how would you respond to that?

Nadine Dorries: I cannot tell you. That is why I was slightly surprised at the basis of the letter that was submitted to the Standards Committee by Mr Mann, which said that he was making the complaint on the basis that I had been overheard saying that I had been paid a large fee or something along those lines. I have never discussed, not even with my children, any earnings that I get from any of my-I do not think that anybody here has been so bad mannered as to ask me what I get paid for the projects that I work on.

Q9 Chair: In the past you have, because it has been registered in the Register of Members’ Financial Interests.

Nadine Dorries: In the past, yes. Absolutely. I suppose that that was before I signed contracts with publishers and TV companies.

Q10 Fiona O'Donnell: Ms Dorries, the contract between ITV and Averbrook contained a confidentiality clause?

Nadine Dorries: Yes.

Q11 Fiona O'Donnell: Did you ever think that, given your role as a Member of Parliament, you should not have confidentiality clauses in those kinds of agreements?

Nadine Dorries: Actually, I have signed other agreements since and they all have the same. It is all standard as part of their procedure. Companies such as ITV and publishing houses pay advances to have other acts or people on contract and their negotiations for those contracts are very sensitive. It is their right as organisations to decide whether they want that information to be in the public domain. I do not have the choice about whether I have that removed from a contract; that has to be in there.

Q12 Fiona O'Donnell: So you could not have insisted-you are saying that there is no way that you could have appeared on that television programme without agreeing that the fee paid to Averbrook was kept confidential?

Nadine Dorries: No, and I think if I were ever to disclose and to say, "This is the amount of money that I am paid by ITV," I would fall foul of that contract and would be at the mercy of ITV.

Q13 Fiona O'Donnell: In answer to the Chair, you said that the setting up of Averbrook had nothing to do with you trying to hide your earnings, but can you understand the public perception of your decision to operate in this way? If you had earned this as an individual and received the payment, you could not have appeared on the programme, because it would have appeared in the Register of Members’ Financial Interests; it could not have been kept confidential.

Nadine Dorries: There is another side to this. I had to have a means by which to pay tax. I can just say that the "I’m a Celebrity" thing is absolutely minuscule. I have just been paid a major six-figure advance for a book that I have written, but I need to have a proper procedure by which that is accounted. I cannot just have sums of that magnitude paid to me personally without having a proper accounting vehicle through which to disclose them to the Inland Revenue. It is not a self-assessment thing; it is too complicated for that. Book sales, appearances-that is all too complicated for me to deal with in a self-assessment form. It has to go through a proper procedure.

Could I just say that I have always wanted to disclose fully what I was required to disclose? In fact, I telephoned the Registrar and had a conversation with her about it. I asked her "What do I need to do?", taking into account what other Members do who have businesses, of which there are many on both sides of the House. I asked, "What is the proper procedure for doing this?" She said to me, "I advise that you register every payment that goes into your company." I knew from other Members that that is not what Members do, so I said, "Do I have to do this?" She said, "No, you don’t have to. I advise that you do."

I thought that that was ambiguous advice, so I sought a further layer of legal advice on top of that-an interpretation. The advice that I got was, "Yes, you have to disclose any remuneration that you receive-any payment that you personally receive-but you do not have to disclose any payment that goes into the company." I spoke to other colleagues-lots of them-who have businesses, and they all said exactly the same thing. They have also taken advice, and that has always been the interpretation of the rules; you disclose and you register what you take personally as payment, not what the company receives.

Q14 Fiona O'Donnell: Just again on confidentiality, are you saying that no Member of Parliament can be involved in a media appearance and make their earnings from that public-that there is always a confidentiality clause?

Nadine Dorries: It depends. If I go on "Have I Got News For You", I don’t sign a contract to go on the programme; I just sign a waiver agreement, which waives the rights that I would have if I were in a contract. Media appearances-things that I do not even charge for, actually. So, no. But if you are in an established programme I am shortly going to be hosting a political TV programme, and that will be under contract. I will have to sign a contract to say that I will not disclose, because there will be other presenters and they will be paying different fees. Because of their negotiations, the company who is commissioning that will not allow people to discuss with each other or with a third party what they are being paid.

Q15 Walter Rader: As a lay member of the Committee, would you assist me in understanding? It has been very clear that you have an agent-representing you, or representing the company?

Nadine Dorries: The company. Everything is in the name of Averbrook, and everything is paid to Averbrook.

Q16 Walter Rader: So am I right in construing that any contracts or legal documentation or arrangements-whatever the appropriate phrase is-regarding that agent are with Averbrook, and that when that agent seeks to place a person in a particular role or seeks to attract involvement in some projects they are acting on behalf of the company? What relationship does that then give you with the company?

Nadine Dorries: My relationship with my agent is very clear. We have a contract, and the contract is between Averbrook and the agent. Any contract that the agent secures with publishers or anybody else is between Averbrook and the publishers. That is how everything is done. I sign and Andy signs for and on behalf of Averbrook. So it is all done through the company.

Q17 Walter Rader: And your relationship with that company, as is clear from the documentation, is that you are a shareholder in that company?

Nadine Dorries: It is, yes.

Q18 Walter Rader: With the right to receive dividends as and when those might become available?

Nadine Dorries: Yes, if I wish to take any.

Q19 Sharon Darcy: I am interested in how the case fits alongside the "Seven Principles of Public Life". One of those is openness; indeed, we all know that the purpose of the code is openness. When you were having your correspondence with the Commissioner, it was made clear to you that if you gave information that was requested that information could be kept confidential. Can you help us to understand why you didn’t share that information?

Nadine Dorries: That is not the case, actually. There was no absolute degree of confidentiality. I think it depended upon the Committee. There was no sense that, "You will provide this information and it will be confidential;" it was, "You can provide this information and then it is dependent upon the Committee whether it is confidential." I am afraid that was putting me in a legal position where it was not guarantee enough. If I had had the guarantee that, "You provide this information and it will be 100% confidential and will not be put in the public domain; therefore you are safe under your legal undertakings," I would have provided further information.

Q20 Mr Cox: Was there any exception in the overall confidentiality clause in your contract for the Commissioner?

Nadine Dorries: No.

Q21 Mr Cox: So had you imparted that information to any third party, you would have been in breach of contract, wouldn’t you?

Nadine Dorries: Absolutely. I have just signed an agreement with a publisher: I would be in breach of that as well.

Q22 Dr Whitehead: Are there circumstances where, as a Member of Parliament, you might look at a contract and say, "I am a Member of Parliament and there are requirements in this contract that are potentially difficult in relation to that role," particularly in relation to the question of the "Seven Principles of Public Life"? Under those circumstances, would you say, "Well, that has a clause that may cause some difficulty; I ought to think about that carefully" or, "I ought to discuss that with the company concerned"?

Nadine Dorries: No, because I am absolutely prepared to abide fully by the rules as they stand. I am absolutely prepared to register any personal payment that I take out of Averbrook.

I would like to say that I did not just seek interpretation of the rules; I also got legal advice on the rules, and I spoke to many, many colleagues to ask them what the rules were that pertained to their businesses. Without exception, everyone said, "I will register when I take something out of the business, because that is what the rules are." I did not just speak to one person. I spoke to a large number of people. All I would say is that, if the interpretation of the rules is now going to be different-if it is now going to be not that you register when you take a payment but that you register when the company receives a payment-then I understand that and I will be perfectly obliged to comply with those rules. There would be different restrictions, obviously, on what contracts and work I could take on in the future; I’d probably be very limited in taking work in the future. I would be prepared to abide by that.

The point I want to get across is that there is one understanding of the rules today, which every Member in the House with a business is abiding by, because we understand that to be the interpretation of the rules. What I am seeing in my report is that there is a new interpretation of the rules. I ask the Committee: do you not think it might be slightly unfair that, as a high-profile figure, I might be being used to announce to other Members that the rules now have a different interpretation?

Q23 Dr Whitehead: Forgive me; that was not quite the question I asked. The question was: would there be circumstances under which you might say to yourself, slightly aside from a strict interpretation of the rules, "I am a Member of Parliament and I have a contract in front of me that requires me to do something in order to accept it, which could be in conflict, or might be considered to be in conflict in some way, with the wider rules that relate to my role as a Member of Parliament"? At that point, would you say, "Oh yes, I will go forward with this-that is not a problem," or would you say, "I might have a look at that, because I am a Member of Parliament" and perhaps discuss that with the company that has offered the contract to indicate to them that you have a particular difficulty in the relationship because of your perception, as a Member of Parliament, of what you ought to be doing in terms of transparency of activities?

Nadine Dorries: Well, we have two situations. We have the interpretation of the rules as everybody understands them to this point, which is that to sign a contract where a payment was being made to your company presents no problem. Also, I am not signing contracts to decipher nuclear codes; these are contracts for media appearances and, obviously, if I were ever in a DCMS situation, I would disclose my interest.

Up until this point, my understanding has been that I register payments that I receive. There is no bar to my taking a contract because there is no requirement to register what is paid to the business. If you are saying that, going forward from here, there will be a new interpretation of the rules, which is that everybody has to declare every payment made into their business, obviously if I were signing contracts that said that I could not register that payment, I would have to negotiate. That would probably preclude me from taking work, but I would have to take that because I would no longer be able to sign contracts of confidentiality. But I would just say that a large number of Members, on both sides of the House, do sign contracts with their businesses, which have similar confidentiality clauses, I am sure, in all walks of life. It is not just relevant to media.

Q24 Chair: Any further questions? May I say two things? One is that, obviously, we will give you a transcript of this evidence session so that you can okay that. Finally, is there anything else that you would like to say to the Committee in relation to our deliberations?

Nadine Dorries: I would like to say two things, really. First, just because there are members of the Committee who may not know the situation, I want to put into context my appearance on that programme. Although the media put out one huge story, in fact I did not miss any Government votes and Parliament was not sitting for much of the time, and it was the only time away I had from Parliament in the year. And I did have permission to go, so I want to put it into that context.

The other thing I want to mention to the Committee is that, as somebody who is quite high profile, I get investigated about four times a year. I am permanently reported to the Information Commissioner, the Standards Commissioner, IPSA and the police. My life is not free of investigation-there are at least two a year. I am cleared from all of them, but they all cause a media furore and this will do exactly the same.

There is one thing I would like the Committee to know: there was one investigation last year by the police. I was investigated by the Standards Commissioner and cleared completely. The person who reported me to the Standards Commissioner then reported me to the police. The police would not take into consideration anything that the Standards Commissioner had found. They would not talk to me, other than through a lawyer. I had to employ a lawyer and, at the end of that investigation, it was also found that there was nothing to investigate, but I had a bill for £62,000 for representing myself, which I am still trying to pay. That is a piece of information I would like the Committee to know.

Q25 Mr Cox: May I ask you one question? When you signed the contracts, plainly it can’t have eliminated the legal duty on your company to account to Companies House and to publish accounts. We see the accounts in the document that is before us and the company’s turnover for the year and various figures for capital and reserves. If all the contracts are concluded with Averbrook, it looks as though somebody could find out what Averbrook had been paid simply by consulting the annual accounts.

Nadine Dorries: Absolutely. The Mail have already done a story on it.

Q26 Mr Cox: Quite.

Nadine Dorries: The day the accounts were filed.

Q27 Mr Cox: So commercial confidentiality can’t prevent a company from complying with the law?

Nadine Dorries: Absolutely not, no. I am the one in the difficult position. Richard Kay of The Daily Mail did a half-page story on my company accounts the day they were published. They are there in the public domain to be seen.

Chair: Thank you very much for coming along and helping us with our inquiries.

Nadine Dorries: Thank you.