House of Commons - The Code of Conduct and the Guide to the Rules

The Code of Conduct and the Guide to the Rules - Committee on Standards Contents

Annex 2: Relationship between the new Guide and GRECO recommendations

MEMBERS' STAFF

GRECO recommends that, pending any introduction of an accountability system for staff conduct, it should be made clear that Members of the House of Commons and Members of the House of Lords can be responsible for the conduct of their staff when carrying out official duties on behalf of the Member and that, unless otherwise specified, the conduct of the staff should be judged against the standards expected of the Members.

25. There are already accountability systems for Members' staff. Members' staff are individually employed by the Member concerned and are accountable to that Member. The Independent Parliamentary Standards Authority (IPSA) has provided model contracts and job descriptions. If approved, the new rules will put beyond doubt that Members must register gifts and benefits staff receive because of a link to a Member. Members' staff who hold parliamentary passes themselves already have to register:

Any occupation or employment for which they receive over £329 from the same source in the course of a calendar year, if that occupation or employment is in any way advantaged by the privileged access to Parliament afforded by their pass.

This requirement will continue while the thresholds for registering such interests are linked to those in the Guide to the Rules; and will be updated to reflect changes in the current Guide.

26. Moreover Members of the House of Commons have already been held responsible if through the actions of their staff the registration rules are breached, or documents leaked. The first paragraph of the proposed revised Guide to the Rules contains a footnote to make this clear: "Members are personally responsible for their adherence to the Code even when breaches may have been caused by the actions of a member of staff."[79] We will continue to hold MPs responsible for the actions of their staff, when it is appropriate to do so.

THRESHOLDS FOR REPORTING FINANCIAL HOLDINGS

GRECO recommends that consideration be given to lowering the thresholds for reporting financial holdings (such as stocks and shares).

27. Although the proposed Guide to the Rules, if approved, would include a reduction in the thresholds for reporting some registrable interests, the proposed threshold for reporting financial holdings follows the recommendation of the Parliamentary Commissioner for Standards and is broadly unchanged. The threshold for holdings of 15 per cent or less of a company's issued share capital will be reformulated from "greater in value than parliamentary salary" to greater in value than £70,000. Holdings remain registrable if they are greater than 15% of the company's issued share capital, whatever their value.[80]

28. The Committee on Standards and Privileges considered the threshold for registration carefully. The rationale the evaluation team gave for its recommendation did not appear to be the limit per se but the possibility that:

an MP could have an investment of £60,000 (approximately 76,000 EUR) in each of 10 mobile phone service providers and none would appear on his or her registration statement under the category of shareholdings.

While small share holdings are not automatically registrable, paragraph 57 of the current Guide notes that "it is sometimes appropriate to register shareholdings" falling outside the relevant categories, if they meet the test of relevance,[81] and the new Guide similarly notes that shareholdings falling below the threshold should be registered in the miscellaneous category "if the Member nevertheless considers that it meets the test of relevance; in other words, that it might reasonably be thought by others to influence his or her actions or words as a Member".[82]

29. Moreover the requirement to declare interests goes beyond the registration requirements to "non-registrable interests of a financial nature when these are affected by the proceedings in question".[83] Although the substantive position remains unchanged, the revised Guide makes it even clearer that this requirement extends to

Members should be aware that the requirement to declare interests such as shareholdings extends to matters which need not be registered.

30. Although the Evaluation Team recognised that such interests would have to be declared, it considered:

Given the range of matters regularly before the House, all interests, however small, might be thought to influence a Member's conduct. The purpose of the Register is to:

In such matters, the issue is what might be reasonable. There is a choice between making public all possible conflicts of interest, regardless of their likelihood and a system in which only significant interests are declared.[87] If full disclosure is not required, there are balances between privacy and openness, which also involve consideration about what interests would be reasonably considered significant, and how declaration should be made. The balance can be struck in many ways. For example, in France, members of the Assemblée Nationale have to declare their interests (and those of family and close associates) to the equivalent of the Parliamentary Commissioner for Standards, but these declarations are kept private.[88]

31. In the United Kingdom, the House has decided that the Register should be a public document but that it should not be a full wealth declaration. Registration is limited to significant holdings. That means there will be a theoretical possibility that a series of holdings under the registration limit might in aggregate influence conduct. This is a matter which must be regularly reviewed, but the Committee on Standards and Privileges considered that the current balance was broadly correct. Leaving aside questions of privacy, we believe too low a threshold could obscure significant matters in a blizzard of trivial details.

32. Regulation has to be proportionate. We acknowledge the Evaluation Team's fear that "a Member may be more influenced by the effect of a matter on his/her stocks than by the receipt of a payment for a speech" but we consider that danger is not so great that it alters the balance of interests described above. Not only do relevant shareholdings need to be registered, individual Members are not in the position to influence share prices directly by their own actions, even if the effect of an intervention on share prices could be predicted reliably. Significant decisions are taken not by a single Member, but by the House as a whole, or by a Committee, or by Ministers. As we note above, the Member concerned would be required to declare interests even if they were not registrable, so his or her intervention would be assessed in the light of those interests.

GIFTS

GRECO recommends (i) providing clearer guidance for Members of the House of Commons and the House of Lords concerning the acceptance of gifts, and (ii) that consideration be paid to lowering the current thresholds for registering accepted gifts.

33. The proposals for a revised Guide lower the thresholds for registering gifts by over a half. The current requirement is to register any gift of a value greater than one per cent of the current parliamentary salary (over £660) from a single source in a calendar year. The new requirement will be to register gifts of over £300 received from a single source in a single year. The definition of gifts is wide, and includes hospitality and material benefits.

34. This Committee, like its predecessor, considers that Members should use their judgment in deciding whether to accept gifts or hospitality. Members should be aware that acceptance of a gift could engage the lobbying rules described in the Guide to the Rules. Gifts also need to be declared in relevant proceedings and the revised Guide to the rules sets out the declaration rules. Given the range of individual circumstances, general guidance is impracticable, but Members should consider carefully the proportionality and appropriateness of any gifts or hospitality they receive, bearing in mind the requirements of the Code and Guide.

LOBBYISTS

GRECO recommends that the Codes of Conduct and the guidance for both the Commons and the Lords be reviewed in order to ensure that the Members of both Houses (and their staff) have appropriate standards/guidance for dealing with lobbyists and others whose intent is to sway public policy on behalf of specific interests.

35. As the Committee on Standards in Public Life has said:

The challenge is to ensure that such representations are properly made, and do not give rise to impropriety. This is not simply a matter of the rules relating to lobbying, but of the entire system. Individual members and indeed committees may have some private meetings with interest groups, but in the United Kingdom the emphasis is on transparency. Proceedings on legislation presented to Parliament take place in public. Submissions to scrutiny committees and the evidence taken by those Committees is similarly public.

36. The principle of transparency extends to informal All Party Groups, which need to adhere to the House's requirements if they are to be registered. We are currently conducting an inquiry into such groups following the publication of the Speakers' Working Group last year, and will be considering whether to recommend reforms to the House in future.

37. At present, we consider that if Members conscientiously abide by the requirements of the Code and the Guide to the Rules about registration and declaration they will deal appropriately with lobbyists. The revised Guide will increase transparency still further by:

· Clarifying the rules on the registration of gifts and hospitality, including benefits given to third party organisations;

· Requiring Members to register family members involved in lobbying the public sector;

· Extending the requirement to register interests when functions are held in dining rooms to all occasions when significant hospitality is offered at a function in a room booked on the Parliamentary Estate.

SANCTIONS

38. Unlike the situation in some other jurisdictions, MPs do not enjoy immunity from the criminal law. MPs can be, and have been, prosecuted for criminal offences, including offences related to parliamentary expenses. The Committee on Standards and Privileges considered that criminal proceedings against Members should take precedence over the House's own disciplinary proceedings, and agreed to refer cases to the police, when appropriate.[90] The House's sanctions are directed at breaches of the Code of Conduct, not criminal corruption.

39. The Government has proposed a new system to allow constituents to open a recall petition for Members who are found to have "committed serious wrongdoing" either by the courts or by the House. The House will have to consider the merits of those proposals in due course. Opinion is divided. The Government still considers that recall would provide an additional disciplinary power for the House.[91] The Political and Constitutional Reform Committee has contested this:

40. Without prejudice to the House's decision on recall, we consider that the current sanctions are appropriate given:

· The House does not deal with criminal conduct;

· The standard of proof used is lower than in criminal cases;

· The elected status of Members; and

· The need for some consistency between cases over time, while recognising that each case must be taken on its own merits.

41. The Guide has been revised in a way which we consider sets out the sanctions available far more clearly than before, and we are grateful to the Commissioner for this.

42. There is one omission from the list of penalties. The revised Guide should have also referred to the possibility that a Member's salary could be withheld without any suspension. This sanction was agreed by the House on 26 June 2003. The resolution is included in the concordance of resolutions relating to salaries etc published by the Members' Estimate Committee.

43. The penalty of withholding salary without suspension has never been used. While it might be used to recover money claimed inappropriately, in practice such repayments have usually been made promptly, frequently even before the Committee concluded its work. The Committee will use its power to make minor changes to the Guide to the Rules to reflect decisions of the House[93] to insert a footnote into the Guide drawing attention to the provision to withhold salary and the fact it has not been used. We consider this sufficient at this stage, as the Committee does not expect to recommend this penalty in future. Suspension (which also entails loss of salary) is the appropriate penalty for any Member who commits a breach of the rules so great that a monetary penalty is appropriate. Failure to comply with a recommendation to repay money would also warrant suspension. Suspension makes clear that standards matter to the House as a whole, and are a collective as well as an individual responsibility.

78 http://www.publications.parliament.uk/pa/cm/cmsecret/130124/130124.pdf Back

79 HC (2012-13) 636, p 25 Back

80 HC (2012-13) 636, p 43 Back

81 Code of Conduct together with the Guide to the rules relating to the Conduct of Members, HC 1885, para 57 Back

82 HC (2012-13) 636, p 44 Back

83 HC (2010-12) 1885, para 73 Back

84 HC (2012-13) 636, p 48 Back

85 Corruption prevention in respect of members of Parliament, judges and prosecutors, Evaluation Report, p 15 Back

86 First Report from the Select Committee on Members' Interests, Session 1991-92, Registration and Declaration of Financial Interests, HC 236, para 27. Back

87 See HC (2012-13) 636, Ev 31, para 126 Back

88 http://www.assemblee-nationale.fr/presidence/presse/decision_bureau_deontologie.pdf Back

89 Sixth Report from the Committee on Standards in Public Life, Reinforcing Standards: review of the First Report of the Committee on Standards in Public Life, Cm 4557-I, para 7.10 Back