The Conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn - Privileges Committee Contents

The Conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn

Introduction

THE COMMITTEE'S PROCEDURES

1.  The Committee have considered a report from the Sub-Committee on Lords' Interests on the conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn. The report arises out of allegations made against the four Members in The Sunday Times on 25 January 2009, which subsequently formed the basis of a complaint referred to the Sub-Committee by the Leader of the House. The Sub-Committee's report is reprinted as Appendix 2 to this Report.

2.  In summary, the Sub-Committee found that three of the four Members (Lord Snape, Lord Truscott and Lord Taylor) had breached the Code of Conduct, but found that Lord Moonie had not committed any such breach.

3.  In considering the Sub-Committee report we have followed the procedure described in our 4th Report of session 2007-08 (HL Paper 205), which was agreed by the House on 18 December 2008. In particular, we have been guided by paragraph 35 of that report, which states that "The Committee will not normally reopen the Sub-Committee's investigation. Rather the Members of the Committee will use their judgment to decide whether, on the balance of probabilities, they endorse the conclusions of the Sub-Committee."

4.  The relevant sections of the Sub-Committee's report were sent to the four Members on 23 April, and they were at the same time notified of their right to appeal against the Sub-Committee's findings to the Committee for Privileges. This right of appeal is provided for in paragraph 19(e) of the Code of Conduct.

5.  The three Members who had been found in breach of the Code of Conduct, Lord Snape, Lord Truscott and Lord Taylor, submitted written appeals against the Sub-Committee's findings. Lord Snape also accepted an invitation to appear before the Committee for Privileges to present his appeal in person; Lord Truscott and Lord Taylor declined similar invitations. The three written appeals, and Lord Snape's oral evidence to us, are at the back of the evidence volume which accompanies this report.

6.  We considered the Sub-Committee's report and the three appeals against it, and heard from Lord Snape in person, at our meeting on 11 May 2009. The three Members of the Sub-Committee who also sit on the Committee for Privileges (Lord Irvine of Lairg, Baroness Manningham-Buller and Baroness Prashar), along with the Leader of the House, who was the complainant in these cases, took no part in considering or deciding on the appeals.

7.  At the meeting, we first considered in general terms the Sub-Committee's interpretation of the relevant provisions of the Code of Conduct, and the conflicting interpretations advanced in the three appeals. We summarise below our conclusions with regard to these provisions, which we hope will be useful to Members.

8.  We then heard from Lord Snape in person, before considering, in turn and in detail, the cases of Lord Snape himself, Lord Truscott and Lord Taylor. Only when we had agreed our conclusions with regard to the Sub-Committee's findings on and the appeals of those three Members, did we consider what penalties to recommend.

9.  We have not in this report described the background to the case; the Sub-Committee have done this in the first part of their report. Nor have we duplicated the Sub-Committee's work of analysing in detail the transcripts of the conversations between the four Members and the undercover journalists. The Sub-Committee have conducted an exhaustive investigation, holding 18 meetings, many of them lasting a whole day or half a day. We are very grateful to the Members and staff of the Sub-Committee for performing this task with such thoroughness. It would be inconsistent with the procedures outlined in our 4th Report of 2007-08 for us to seek to replicate their work.

10.  Instead we have focused on the key points at issue between the Sub-Committee and the three Members who submitted appeals. These points cover both the meaning of the provisions within the Code, and points of fact and the interpretation of fact (which of these provisions, if any, the three Members breached).

11.  The standard of proof we have adopted in deciding whether to uphold or reject the Sub-Committee's findings has been the same as that applied by the Sub-Committee: in other words, while taking the civil standard of proof, the balance of probabilities, as the appropriate standard, we have, in the light of the seriousness of the allegations, taken the view that particularly strong evidence should be required before we may be satisfied that the allegations are proved.

ENTRAPMENT

12.  Our responsibility, and that of the Sub-Committee, is to investigate allegations of non-compliance by Members of the House with the Code of Conduct. As the Sub-Committee point out, it was not our role "to adjudicate on a conflict between The Sunday Times and the Lords concerned" (paragraph 28).

13.  No-one reading the transcripts of the conversations between the four Members and the undercover journalists can be left in any doubt that they were asked leading questions, designed to elicit apparently incriminating answers. At the time the story was published, on 25 January, no money had changed hands, and no contracts had been drawn up, still less signed. Nevertheless the newspaper chose to cut short its investigation and publish a story based on words, not decisive acts by any of the four Members. It follows that the headline used by the newspaper in publishing the allegations ("Revealed: Labour lords change laws for cash"), in implying improper acts by the four Members, was wilfully misleading.

14.  Despite these concerns, we conclude that it would not be appropriate to disregard any of the evidence by reason only of the manner in which it was obtained. We consider that the Sub-Committee were right to reject suggestions that they should not rely on some of the evidence, on the ground that it had been obtained by agents provocateurs. In our judgment, the integrity of the proceedings themselves—either before us or before the Sub-Committee—has in no sense been compromised by the conduct of the journalists in obtaining the evidence, which in our view did not amount to incitement to or instigation of a breach of the Code. It is the strength of the evidence itself which we regard as important for the purposes of our proceedings.

The Code of Conduct

15.  Before considering the Sub-Committee's findings on the four Members, we considered in general terms the Sub-Committee's interpretation of the relevant provisions of the Code of Conduct, which is set out in paragraphs 39-66 of their report.

16.  As the Sub-Committee have noted, the key provision in the Code is section 4, which states that Members of the House—

a)  must comply with the Code of Conduct;

b)  should act always on their personal honour;

c)  must never accept any financial inducement as an incentive or reward for exercising parliamentary influence;

d)  must not vote on any bill or motion, or ask any question in the House or a committee, or promote any matter, in return for payment or any other material benefit (the "no paid advocacy" rule).

17.  The Sub-Committee make several important points on the interpretation of this provision.

18.  First, the Sub-Committee state that "Paragraph 4(d) gives examples of the kind of activities falling under the no-paid-advocacy rule, which is more generally described by paragraph 4(c)" (paragraph 45). This interpretation is described by Lord Snape's lawyers in his appeal as "surely wrong"; they then argue that the no paid advocacy rule, as described in paragraph 4(d), envisages "overt or direct acts of promotion", while paragraph 4(c) "is concerned with actions on the part of the member which seek imperceptibly or by indirect means to alter the conduct of Parliament in some respect".

19.  We cannot accept the gloss put upon paragraphs 4(c) and 4(d) in Lord Snape's appeal: there is nothing in the wording of the Code to imply that the scope of paragraph 4(c) is limited to "imperceptible" or "indirect" acts. Indeed, the wording of paragraph 4(c) follows exactly that of the Resolution of the House of 7 November 1995, which set the requirements now contained in paragraphs 4(b) and 4(c) of the Code as the two overarching principles governing the conduct of Members. That general principle was in 1995, as in the current Code, supplemented by more specific examples: "Thus Lords who accept payment or other incentive or reward for providing Parliamentary advice or services [...] should not speak, vote, lobby or otherwise take advantage of their position as members of the House on behalf of their clients." It is clear from the report on the House of Lords by the Committee on Standards in Public Life in 2000 that the general principle set out in the 1995 resolution was at that time seen as embodying a "ban on paid advocacy".[1]

20.  We therefore agree with the Sub-Committee that the specific actions described in paragraph 4(d), which constitute breaches of the "no paid advocacy rule", are examples of the more general rule of conduct described in 4(c), namely that Members "must never accept any financial inducement as an incentive or reward for exercising parliamentary influence". But paragraph 4(c) also includes the kind of "indirect" exercise of parliamentary influence referred to in Lord Snape's appeal. Thus any breach of paragraph 4(d) (the "no paid advocacy" rule) is also a breach of paragraph 4(c); but not every breach of paragraph 4(c) is necessarily a breach of the rule in paragraph 4(d).

21.  The next important aspect of the Sub-Committee's interpretation of paragraph 4 of the Code is set out (with reference to the current case) in paragraph 65 of the report:

Any agreement to promote an amendment in return for a fee would in our view constitute a breach of the prohibition on exercising parliamentary influence for financial inducement in paragraph 4(c) of the Code of Conduct [...] and in negotiating or attempting to negotiate such an agreement the Lord in question would in our view also have failed to act on his personal honour in breach of paragraph 4(b) of the Code.

22.  In other words, the Sub-Committee are suggesting, in the first limb of paragraph 65, that an agreement to exercise parliamentary influence in return for financial inducement is itself a breach of paragraph 4(c), regardless of whether money actually changes hands or services are performed. This is, by implication, contested by Lord Snape's lawyer, who argues that "accepting" is used "in the sense of taking or receiving".

23.  We agree with the Sub-Committee's interpretation: paragraph 4(c) refers to "financial inducement", and an "inducement" can exert a powerful influence without money having to change hands. It follows that if an agreement is reached, to provide certain services in return for a fee, that agreement is in itself an "acceptance of financial inducement". Given the relationship between paragraphs 4(c) and 4(d), it must also follow that an agreement to engage in paid advocacy, contrary to paragraph 4(d), would also constitute a breach of paragraph 4(c), even if the Member concerned never actually, by voting, speaking or otherwise fulfilling this agreement, breached paragraph 4(d) itself.

24.  However, we acknowledge that this reasoning leaves open the question of exactly how formal such an "agreement" must be for a breach of paragraph 4(c) to occur. In the event, neither the Sub-Committee nor we ourselves have found it necessary to resolve this question in the current cases.

25.  The other limb of paragraph 65 is the Sub-Committee's statement that "in negotiating or attempting to negotiate" such an agreement, even if no such agreement is finally reached, a Member would "have failed to act on his personal honour", so breaching paragraph 4(b) of the Code.

26.  This is a crucial point, particularly in the context of the current cases, where no money changed hands, no services were provided, and no contracts were signed. Here too we are in complete agreement with the Sub-Committee.

27.  Much has been said about the meaning of "personal honour" in paragraph 4(b). As the Sub-Committee note, the term has been used for centuries, and "it has never been thought necessary to define" it (paragraph 43). This point is challenged in both Lord Snape's and Lord Taylor's appeals. Lord Snape contends that the lack of a definition "will not do in the modern era [...] It is a fundamental aspect of the duty of fairness in such circumstances that disciplinary 'offences' are clearly defined and certain." Lord Taylor's appeal goes further, describing personal honour as:

a quiet [sic] and arcane term, dating from a time when escutcheons were blotted and political life was lived in gentleman's [sic] clubs [...] The Sub-Committee simply states that the term 'personal honour' has 'been used for centuries.' Longevity is no substitute for legal certainty.

28.  These objections are misplaced in the context of the House of Lords and the Code of Conduct. The term "personal honour" has been used within the House for centuries to describe the guiding principles that govern the conduct of Members; its meaning has never been defined, and has not needed definition, because it is inherent in the culture and conventions of the House. These change over time, and thus any definition of "personal honour", while it might achieve temporary "legal certainty", would quickly become out-moded. The House is self-regulating, and enjoys the privilege of exclusive cognisance over all aspects of its own affairs. So the term "personal honour" is ultimately an expression of the sense of the House as a whole as to the standards of conduct expected of individual Members.

29.  Lord Snape's appeal "contends that the key word in [paragraph] 4(b) is personal. A Member is thereby prohibited from doing something which s/he knows or believes to be dishonourable." This too is an over-simplification. Members cannot rely simply on their own personal sense of what is honourable. They are required to act in accordance with the standards expected by the House as a whole. "Personal honour" is thus not a term that requires objective definition or legal certainty, nor is it a matter purely for the conscience of the individual Member. It is a matter for individual Members, subject to the sense and culture of the House as a whole.

30.  The purpose of the Code of Conduct, which was agreed by the House by Resolution in July 2001, is set out in paragraph 1: "to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties". It follows, in our view, that any Member who demonstrated a clear willingness to breach the rules contained in the Code (for instance, by attempting to negotiate an agreement to promote an amendment in return for a fee) would have failed to act upon his or her personal honour, and would have thereby breached paragraph 4(b) of the Code.

31.  Finally, we turn to the Sub-Committee's conclusions on interests falling under paragraph 12(a) and (c) of the Code of Conduct, that is to say parliamentary consultancies and other remunerated services which Members provide by virtue of their position as Parliamentarians.

32.  The Sub-Committee state that where Members have interests falling under one of these categories, they are "restricted in their parliamentary activities to providing advice"; any attempt to exercise parliamentary influence would necessarily be perceived to be a breach of the no paid advocacy rule, as "it is impossible to prove that [the Member] is not being paid specifically to exercise his parliamentary influence for the benefit of those paying him" (paragraph 56).

33.  We fully endorse this interpretation, which is consistent with the longstanding practice of the House. In the words of the 1995 resolution, already quoted, "Lords who accept payment or other incentive or reward for providing Parliamentary advice or services [...] should not speak, vote, lobby or otherwise take advantage of their position as members of the House on behalf of their clients".

34.  There remains of course the question of what Members who have registered interests can legitimately do as part of their parliamentary activities. The Sub-Committee have not sought to answer this question, although Members will find the advice of a former Clerk of the Parliaments to the Committee on Standards in Public Life, quoted in paragraph 60 of the Sub-Committee's report, useful with regard to interests under paragraph 12 (a) to (c) of the Code.

35.  In summary, we invite the House to endorse the following conclusions on the meaning of the Code of Conduct:

•   Paragraph 4(c) of the Code of Conduct describes one of the overarching principles governing Members' conduct—that they must not exercise parliamentary influence, directly or indirectly, in return for financial inducement. Paragraph 4(d), the "no paid advocacy" rule, describes a specific application of this overarching principle; any breach of paragraph 4(d) is by definition also a breach of paragraph 4(c).
•   An agreement to act in breach of either paragraph 4(c) or 4(d) of the Code, is in itself a breach of paragraph 4(c), regardless of whether money changes hands or services are actually provided.
•   Members who express a clear willingness to breach the Code of Conduct thereby demonstrate a failure of "personal honour", and are thus in breach of paragraph 4(b) of the Code.
•   Members who have interests falling under paragraph 12 (a) or (c) of the Code should not seek in any way to exercise parliamentary influence so as to benefit these interests. To do so would constitute a breach of paragraph 4(c).

The conduct of Lord Moonie

36.  After considering the transcripts of Lord Moonie's conversations with the undercover journalists, and interviewing him personally, the Sub-Committee concluded that there was "insufficient evidence to establish to the standard of proof that we have adopted that Lord Moonie expressed a clear willingness to breach the Code" (paragraph 88). We endorse the finding of the Sub-Committee exonerating Lord Moonie of any breach of the Code of Conduct.

37.  However, we note the Sub-Committee's comments, in its concluding paragraph on Lord Moonie, to the effect that he made a number of "unwise" comments in the course of his conversations with the journalists. In particular, he told them that "the rules are being made as they go along" and that "there's virtually nothing they can do to you [if you break the rules]" (paragraph 90). We agree with the Sub-Committee that these comments demonstrated a "wholly inappropriate attitude to the rules". We therefore invite Lord Moonie to make a personal statement of apology to the House.

The conduct of Lord Snape

THE SUB-COMMITTEE'S CONCLUSIONS ON LORD SNAPE

38.  The Sub-Committee analysed the transcript of Lord Snape's meeting with the undercover journalists, and questioned Lord Snape himself.

39.  The Sub-Committee's account of Lord Snape's defence identifies two "pillars". The first of these is his contention that as a Member of the House of Lords he "can act in Parliament for the benefit of his employer/client provided it is not for their exclusive benefit but also benefits the wider industry or public interest".

40.  So far as Lord Snape's motives are concerned, the Sub-Committee quote at length his assertion, in evidence, that he believed in the merits of the proposed amendments, and would have been prepared to pursue them "without any payment" (Q203). However, they do not ultimately accept this description of his motives, concluding that: "money was an important part of the picture for Lord Snape [...] he knew that [...] he would be promoting the amendment [...] in return for payment" (paragraph 111).

41.  The Sub-Committee also address the wider issue raised by this pillar of Lord Snape's defence, namely the relationship between public and private interests. They describe his belief that "he was permitted to exercise influence in Parliament on behalf of a client or employer provided the action was not for the exclusive benefit of that client or employer." However, the Sub-Committee conclude, on the basis of their analysis of the Code of Conduct in paragraphs 40-50 of their report, that "Lord Snape was mistaken in this belief" (paragraph 119).

42.  The second "pillar" of Lord Snape's defence identified by the Sub-Committee is his assertion that he would have taken no steps without first consulting the Registrar of Lords' Interests. If this pillar of Lord Snape's defence is accepted, it follows that he cannot be said to have concluded an "agreement" with the undercover journalists, as any such agreement would have been conditional on getting the all-clear from the Registrar. The Sub-Committee acknowledge that Lord Snape referred very early in the conversation to the need to seek advice from the Registrar, but also that later in the discussion he did (as he acknowledges) explicitly use the language of "agreement". The Sub-Committee do not ultimately take a view on whether or not Lord Snape had concluded a formal "agreement": instead they conclude:

We believe that the point is not whether Lord Snape had concluded a legally binding agreement with MJA but what he said he could do for them and his intentions in his conversations with them. Although he made the point about consulting the Registrar early in the conversation with MJA, the rest of his conversation revealed few misgivings about what he could do for MJA, and Lord Snape felt sufficiently comfortable about what he was saying that he rang Mrs Lynda Waltho MP during the meeting with the journalists to raise the subject of the Business Rate Supplements Bill. His professed belief in the importance of the Registrar seems to us to be undermined by his eagerness to impress MJA and win the contract (paragraph 116).

43.  The Sub-Committee's final paragraph on Lord Snape states only that "We find that Lord Snape expressed a clear willingness to breach the Code of Conduct" (paragraph 125). The Sub-Committee do not specify which provisions within the Code Lord Snape was willing to breach, so to some extent we have had to read between the lines. From the words already quoted, that "the point is not whether Lord Snape had concluded a legally binding agreement with MJA but what he said he could do for them and his intentions in his conversations with them", we conclude that the Sub-Committee did not finally come to a view on whether or not Lord Snape had reached an "agreement" with the undercover journalists, thus breaching paragraph 4(c). However, the Sub-Committee did conclude that he had expressed a clear willingness to breach the Code, and this necessarily implies that he was in breach of paragraph 4(b). We have therefore treated the Sub-Committee's finding on Lord Snape as a finding that he breached paragraph 4(b) of the Code.

LORD SNAPE'S APPEAL

44.  Setting out the grounds for Lord Snape's written appeal, his lawyer notes, with some justification, that "Given the lack of clarity in the Sub-Committee's findings, it is not easy to formulate an appeal". However, given that his arguments rightly focus on the Sub-Committee's implied conclusion that Lord Snape, by expressing willingness to exercise parliamentary influence in return for financial inducement, had breached paragraph 4(b), we do not consider that any such lack of clarity in the Sub-Committee's findings materially affected the appeal.

45.  The appeal focuses on the question of Lord Snape's motivation, accusing the Sub-Committee of "ducking" the question of "whether he did honestly believe that he would be acting legitimately if he advocated the amendment, believing it to be in the public interest". As we have previously noted, the appeal argues that the key word in paragraph 4(b) is "personal": in essence, Lord Snape's contention is that because he personally believed that what he was proposing to do was within the rules, he acted honestly and honourably according to his own conscience, and cannot therefore be found in breach of paragraph 4(b).

46.  The appeal then addresses the second "pillar" of Lord Snape's defence, his stated intention to consult the Registrar, arguing that Lord Snape would not have made this point so early in his conversation with the journalists, potentially discouraging them from pursuing their proposals, if it had not genuinely "been his intention to go to the Registrar for advice".

47.  Lord Snape's appeal is then summarised in the following paragraphs:

53. It follows that no finding can properly be made that, in speaking to the journalists, Lord Snape did anything he knew or believed to be dishonourable in the context of the Code and his membership of the House. He formed a view about what he could legitimately do. If it was mistaken he may be criticised for this but this is not a breach of Code para 4(b).

54. In short, Lord Snape did honestly believe that he would be acting legitimately if he advocated the time-limited exemption for the benefit of all new businesses, believing it to be in the public interest. He did intend to check this with the Registrar before acting. So he was not doing or saying anything he knew or believed to be dishonourable in the meeting with the journalists.

LORD SNAPE'S ORAL EVIDENCE

48.  We took oral evidence from Lord Snape on 11 May 2009. The transcript is printed in the accompanying evidence volume. He opened the meeting by making a personal statement, which covered similar ground to his appeal. He then answered questions from Members of the Committee.

49.  The most telling point made by Lord Snape emerged in his reply to a question from Lord Graham of Edmonton, who asked him why, given his stated intention to consult the Registrar, he had not done so before the allegations appeared in the Sunday Times. In reply Lord Snape said:

Q3: Lord Snape […] I saw them on the Thursday of the week the story appeared in the Sunday Times. They came to see me and spent an hour or so in my office on the Thursday. The House was sitting on the Friday that week and on my way back from the House the following day another journalist from the Sunday Times rang me and put these accusations to me, and the Sunday Times printed on the Saturday night for Sunday.

50.  In other words, Lord Snape, having said good-bye to the undercover journalists at around lunchtime on Thursday, was faced within 24 hours by the prospect of the allegations being published in that weekend's Sunday Times. There was no time for second thoughts, for follow-up emails and/or conversations, or for seeking the advice of the Registrar.

CONCLUSIONS AND RECOMMENDATIONS ON LORD SNAPE

51.  It follows from our own analysis of the Code, set out in paragraphs 15-35 above, that we uphold the Sub-Committee's conclusions with regard to the meaning of the Code of Conduct. We therefore reject the propositions put forward in Lord Snape's appeal, for instance with regard to the meaning of "personal honour". We cannot accept that, because a Member personally believes that what they are proposing to do is within the rules, and that they are acting honestly and honourably according to their own conscience, they cannot therefore be found in breach of paragraph 4(b). Members have a responsibility to act in accordance with the proper meaning of the Code of Conduct as well as their own personal conscience.

52.  However, in order to find Lord Snape in breach of paragraph 4(b), we would have to be satisfied that the evidence amply supported the Sub-Committee's conclusion that he expressed clear willingness to exercise parliamentary influence in return for financial inducement. We are not so satisfied. We note, for instance, that the first time an improper suggestion was made, and he was asked whether he would be willing to accept "a retainer as a consultant to, in effect, help us amend the Bill", Lord Snape's reaction was perfectly clear: "I don't think I would" (pp SH5-6). This refusal was repeated several times in the course of the conversation.

53.  Nor do we have reason to doubt Lord Snape's assertion that his intention to consult the Registrar before taking any steps was genuine. The fact that the story was published so quickly that he never had a chance to consult the Registrar must count in his defence, since it meant that he was simply not given the opportunity to act in such a way as to demonstrate his compliance with the Code of Conduct. In our view, the Sub-Committee did not give sufficient weight to this point in reaching their conclusions.

54.  Lord Snape was clearly keen not to deter a new and possibly lucrative client, and in so doing he spoke carelessly and on occasion inappropriately. For instance, he acknowledged, in the course of his oral evidence to the Sub-Committee, that the word "agreement" (p SH17) was "not a sensible word to use". But the truth is that he was being asked a series of leading questions by undercover journalists, and carelessness in his replies is not in itself sufficient to justify a finding against him, given the strength of evidence that we have resolved to require. We are therefore not persuaded, on the balance of the probabilities, that he expressed a clear willingness to breach the Code of Conduct.

55.  Accordingly we disagree, on the balance of probabilities, with the findings of the Sub-Committee in respect of Lord Snape, and uphold his appeal. We conclude that he did not express clear willingness to exercise parliamentary influence in return for financial inducement, and so fail to act on his personal honour, in breach of paragraph 4(b) of the Code of Conduct. However, we consider that many of the remarks made by him in the course of his conversation with the journalists demonstrated an inappropriate attitude to the rules governing the conduct of Members. We therefore invite Lord Snape to make a personal statement of apology to the House.

The conduct of Lord Truscott

THE SUB-COMMITTEE'S CONCLUSIONS ON LORD TRUSCOTT

56.  Before analysing Lord Truscott's conversations with the undercover journalists, the Sub-Committee consider his understanding of the Code of Conduct itself. On the basis of several remarks made in the course of his conversations (for instance his comment that "I would not be comfortable myself being paid by the company to put amendments directly myself. What I could do is advise on the process"), the Sub-Committee conclude that he "had a good knowledge of the rules governing paid advocacy" (paragraph 139).

57.  The Sub-Committee then consider a number of occasions on which Lord Truscott might be thought to have crossed the line between offering legitimate advice to lobbyists and himself exercising parliamentary influence on their behalf:

·  First, they consider whether or not Lord Truscott expressed a willingness to make introductions, or "smooth the way" for the supposed lobbyists (paragraphs 141-144).

·  Second, the Sub-Committee analyse exchanges in which Lord Truscott referred to "influencing Members" in the House of Lords (paragraphs 145-152).

·  Third, the Sub-Committee consider a passage in the transcript in which Lord Truscott appeared to offer to set up meetings involving himself, the lobbyists, and other Members with an interest in the Bill (paragraphs 153-157).

·  Fourth, the Sub-Committee consider whether or not Lord Truscott offered to seek to persuade another Member to move amendments on behalf of the lobbyists (paragraphs 158-162).

·  Fifth, the Sub-Committee consider whether or not Lord Truscott offered to approach ministers on behalf of the lobbyists in order to persuade them of the merits of the amendment (paragraphs 163-168).

·  Sixth, the Sub-Committee discuss whether Lord Truscott was willing to lobby officials (paragraphs 169-172).

58.  On all these points, the Sub-Committee conclude that Lord Truscott offered services that amounted to breaches of the prohibition in the Code on "exercising parliamentary influence" in return for financial inducement. They reject his defence, that throughout these conversations he was maintaining a clear distinction between the legitimate provision of advice to lobbyists, and personal involvement amounting to "paid advocacy". They conclude that throughout his conversations he was motivated by his desire "to win a lucrative contract with the lobbyists" (paragraph 172).

59.  The Sub-Committee then turn to sections in the transcripts in which Lord Truscott appeared to suggest that he had influenced the 2008 Energy Bill in favour of a paying client with interests in "smart metering". The Sub-Committee's conclusion is not that Lord Truscott did in fact influence the Bill, but that he sought to convey the impression that he had done so, in order to attract a potential client: "Lord Truscott did not choose to make plain to MJA what he had or had not personally achieved for the benefit of his smart metering client, and he did not dispel the strong impression he gave that he had advocated that client's case for payment" (paragraph 184).

60.  The Sub-Committee then consider whether or not Lord Truscott reached an agreement with the undercover journalists. They quote a remark made by Lord Truscott in his second meeting with the journalists, in which he said that "you just need to give me, er, draw up a draft contract and then take it from there", a remark that he then followed up in an email, in which he offered to give the lobbyists "three days per calendar month for the duration of the contract (with a 12 month review)" (paragraph 186). The Sub-Committee conclude "that Lord Truscott's intentions were plain and that Lord Truscott came to an oral agreement with MJA that would require him to undertake on their behalf lobbying that he knew was prohibited by the Code of Conduct" (paragraph 188).

61.  Finally, the Sub-Committee address one of the key points of Lord Truscott's defence—that he habitually used "wrong words" (for instance, a mannerism of saying "yeah" as a conversation filler), and also that he was by nature very "diplomatic", and not inclined to say "no" to people. These traits were, according to Lord Truscott's defence, exploited by the journalists as part of the "entrapment" techniques. However, the Sub-Committee reject this defence, concluding that "in order to win a lucrative contract, he was agreeing to do things, or seeking to give the impression that he was willing to do things" that he knew were in contravention of the Code (paragraph 193).

62.  The Sub-Committee's final conclusion on Lord Truscott's conduct is set out in paragraph 197: "The evidence against Lord Truscott is so clear and so plentiful that we have little doubt that Lord Truscott was advertising his power and willingness to influence Parliament in return for a substantial financial inducement. We conclude that Lord Truscott expressed willingness to breach the Code of Conduct's prohibition on paid advocacy, and failed to act on his personal honour, as required by paragraphs 4(c) and 4(b) of the Code."

63.  The Sub-Committee have thus made a clear finding that Lord Truscott was in breach of paragraph 4(b) of the Code of Conduct, in failing to act on his personal honour. Notwithstanding the reference to an "oral agreement" in paragraph 188, the question of whether he breached paragraph 4(c) by agreeing to exercise parliamentary influence in return for financial inducement is left open, in light of the Sub-Committee's decision not to specify the degree of formality required for such an agreement.

LORD TRUSCOTT'S APPEAL

64.  In his appeal, Lord Truscott's dismisses the Sub-Committee's analysis of his conduct and motives as "outrageous and slanderous". He bases his appeal on five separate grounds. These can be summarised under three broad headings:

·  First, he states that the Sub-Committee "decided to short-circuit" its own procedures. These procedural objections are made in more detail in his letter to the Sub-Committee of 16 April which is printed as evidence alongside this Report.

·  Second, Lord Truscott's second, third and fourth grounds for appeal all relate to the interpretation of the relevant provisions of the Code of Conduct. He contends that the Sub-Committee's interpretation of the Code is overly broad, and that the Sub-Committee would, in effect, be imposing this interpretation retrospectively, with the result that many Members who have hitherto considered themselves to be acting legitimately would find themselves in breach of the Code. He argues that such a change should only be made following a proper review of the Code.

·  Finally, Lord Truscott raises the possibility of suspension, arguing that "Any new sanctions should be agreed by the House, and not made retrospective, as this would be a clear breach of the principle of natural justice".

65.  We do not accept the first of these grounds for appeal. We believe that the Sub-Committee made every effort, given the exceptional circumstances of the case, to operate fairly and to follow as closely as possible the agreed procedures.

66.  Nor is the final ground for appeal relevant: the Sub-Committee make no reference to sanctions, so there is nothing in the Sub-Committee's report to appeal against. The matter of sanctions is one that this Committee has considered very carefully in recent months, and if Lord Truscott wishes to make representations on this point, he must make them to the House as a whole.

67.  The core of Lord Truscott's appeal, therefore, is found in his second, third and fourth grounds, which all relate to the interpretation of the Code of Conduct. This is discussed in more detail earlier in the appeal, for instance his claim that "In effect, to arrive at their guilty verdict, the Sub-Committee had to re-define the rules, and then apply them retrospectively." He compares the Sub-Committee's approach to that of political committees in Stalin's Russia.

68.  Throughout Lord Truscott's appeal there seems to be a confusion between two concepts which are fundamental to the Code of Conduct: on the one hand legitimate interests, financial or non-financial, which Members must register and declare as appropriate, but which do not inhibit them from certain kinds of parliamentary activity; and on the other direct financial inducements, as described in paragraph 4(c) of the Code, in respect of which Members must not exercise any parliamentary influence. As the Sub-Committee acknowledge, it is essential, and clearly in the public interest, that "Parliament should be able to benefit from the broad expertise of its Members: for example, the expert knowledge of education of Members with academic posts, and of industry of Members with business directorships" (paragraph 51). But one of the fundamental purposes of the Code is to set up arrangements that ensure that such legitimate interests do not give rise to public perception that the actions of Members are "driven or directed" by financial interests (paragraph 52).

69.  Lord Truscott's interpretation of the Sub-Committee's report is that "Any Member with an outside financial interest (particularly where this has been newly acquired) speaking or acting in any capacity in Parliament whatsoever, can be accused of paid advocacy, and can be declared in breach of the Code under the Sub-Committee's interpretation of paid advocacy". Lord Truscott's interpretation is misplaced.

70.  There is no doubt that the dividing line between a legitimate interest and a prohibited inducement will in some cases be difficult to draw. But it has to be drawn, and the onus is on Members, acting on their personal honour, and if they so wish with the help and advice of the Registrar, to draw it. The question for this Committee, therefore, has been to assess whether Lord Truscott's conduct, in his conversations with the undercover journalists, meant that he fell on the wrong side of this dividing line.

CONCLUSION ON LORD TRUSCOTT

71.  The Sub-Committee describe the evidence against Lord Truscott as "so clear and so plentiful" as to leave no doubt that he had breached the Code. We agree. His remarks about his relationship with the minister, John Healey MP (p TrH35), his stated willingness to "smooth the way" with other Members or "coach" them, and many other examples, show clearly that in order to secure a lucrative consultancy he was willing at the very least to hold out the prospect that he would be willing and able to exercise improper parliamentary influence.

72.  We therefore uphold the finding of the Sub-Committee that Lord Truscott, in his conversations with the undercover journalists, failed to act on his personal honour, in breach of paragraph 4(b) of the Code of Conduct.

The conduct of Lord Taylor of Blackburn

THE SUB-COMMITTEE'S CONCLUSIONS ON LORD TAYLOR

73.  Before considering the Sub-Committee's conclusions on Lord Taylor, and his appeal against them, we make two general points about the case.

74.  First, the Sub-Committee's consideration of Lord Taylor's conduct is framed by an acknowledgement that much of what he said in his conversations with the undercover journalists defies rational explanation: "His conversations with the journalists were so exaggerated and his conduct so irrational that it may well be thought that no genuine lobbyist would have taken much time with Lord Taylor". Lord Taylor himself, in his Statutory Declaration, describes himself as "a loquacious old man with an advanced degree of self satisfaction but one who is easily confused and who rambles on, not always to the point". However, the Sub-Committee conclude that "as an active Member of the House of Lords he must be judged on his behaviour and on the meaning of his words and on his intentions" (paragraph 202). We have had no option but to adopt the same approach.

75.  Second, Lord Taylor declined three invitations to appear in person before the Sub-Committee. Instead he submitted a Statutory Declaration. As a result, the Sub-Committee at no stage had the opportunity to question him on the detail of his defence. Of less significance is the fact that while he submitted, through his lawyers, a lengthy appeal in writing against the Sub-Committee's findings, he again declined an invitation to appear in person before this Committee. It follows that the Sub-Committee have been forced to balance, on the one hand, the contents of the transcripts of Lord Taylor's conversations with the journalists, with, on the other, a clearly stated line of defence. There has been no opportunity to seek to reconcile any inconsistencies between the two sets of documents: the Sub-Committee have simply had to decide between them.

76.  As for the Sub-Committee's analysis of the evidence, and of Lord Taylor's defence in his Statutory Declaration, it is so comprehensive that we see no need to replicate it. Instead, we shall address particular points in the Sub-Committee's analysis in the process of evaluating Lord Taylor's appeal.

77.  The conclusion reached by the Sub-Committee is that "Lord Taylor's conversations with the journalists display his clear willingness to breach the Code of Conduct by engaging in paid advocacy, and by failing to act on his personal honour, as required by paragraphs 4(c) and 4(b) of the Code" (paragraph 281). We interpret this conclusion as meaning that he expressed clear willingness to breach paragraph 4(c) of the Code, and that in so doing he failed to act on his personal honour, and so directly breached paragraph 4(b). This leaves open the question of whether Lord Taylor's willingness to breach paragraph 4(c) amounted to an "agreement" to exercise parliamentary influence in return for financial inducement, an agreement that would have constituted a breach of paragraph 4(c) itself. We have therefore interpreted the Sub-Committee's findings as limited to a breach of paragraph 4(b) of the Code of Conduct.

LORD TAYLOR'S APPEAL

78.  Lord Taylor's appeal, prepared for him by his legal advisers, combines criticism of the Sub-Committee's interpretation of the Code, accusations of procedural unfairness and bias, and detailed analysis of the evidence of the transcripts.

79.  Much of the appeal is simply misplaced. In particular, the lengthy allegations of procedural unfairness (paragraphs 117 ff.) demonstrate a misunderstanding of the nature of parliamentary proceedings and the constitutional principles underlying parliamentary self-regulation.

80.  We consider, in contrast, that the Sub-Committee has, throughout, sought to handle Lord Taylor's case fairly and considerately. This is a parliamentary, not a court process, and is a manifestation of the House's historical power to set standards of conduct for its Members and to discipline those who fall short. Acceptance of this power is implicit in membership of the House.

81.  Lord Taylor's case was given the most careful consideration by a Sub-Committee comprising five distinguished Members of this House, who are charged with investigating, on behalf of the House as a whole, allegations of breaches of the Code of Conduct. Instead of expressing confidence in the integrity of this Committee, and engaging candidly in their attempts to discover the truth of the allegations against him, Lord Taylor has, through his lawyer, chosen to impugn the integrity of those involved in this process, accusing the Sub-Committee of bias in favour of The Sunday Times (bias which he claims may be corruptly motivated, describing an alleged leak to that paper as having been committed "possibly for reward"). This breakdown in trust between a long-serving Member of the House and the Sub-Committee charged by the House with investigating his conduct is one of the most unfortunate aspects of the entire case.

82.  Lord Taylor's appeal contains detailed analysis of the contents of the transcripts, criticism of the Sub-Committee's findings and frequent references to Lord Taylor's sworn Statutory Declaration. We do not summarise the appeal, which, like the other documents in this case, have to be read and considered in their entirety. They speak for themselves.

83.  However, we must comment on what seems to us to be the key element in Lord Taylor's original defence and subsequent appeal. It is claimed that Lord Taylor realised early on in his conversations with the journalists that they were not genuine, and that his subsequent conversations with them were intended to expose their "sting".

84.  Thus the appeal states (in paragraph 56), that in his second conversation with the journalists Lord Taylor "was making increasingly extravagant and outlandish claims in an effort to 'flush out' the truth of the sting operators' game". Later, quoting from Lord Taylor's Statutory Declaration, it uses the same argument to explain those exchanges in the transcripts in which Lord Taylor appeared to imply that he had concluded an agreement and was eager to start acting on behalf of his new clients: "So I thought I would bring them to the crunch, pretend we had an agreement and see what they did. That is why I pretended at page 51: 'we've agreed that we're doing the deal... when do we officially start? When do you want to start? Just name a figure. We've said 10 are you happy about that?'" (paragraph 91)

85.  This line of defence is developed at considerable length in both Lord Taylor's Statutory Declaration and his appeal (see particularly paragraphs 99 ff.). Implicit within it is an acknowledgement that Lord Taylor said many things that, if taken at face value, would necessarily include actions which would constitute breaches of the Code of Conduct. Indeed, this must be the case in some respects: for example, Lord Taylor boasted of having already discussed the issues with senior ministers—meetings which never took place.

86.  The question that we and the Sub-Committee have had to face, is whether this key argument put forward in Lord Taylor's defence, and by himself in his sworn Statutory Declaration, is sufficiently plausible to persuade us that the many ostensibly incriminating statements he made in the course of his conversations were never intended to be taken at face value, but were deliberate fabrications intended to "flush out" the pretend lobbyists.

CONCLUSION ON LORD TAYLOR OF BLACKBURN

87.  Lord Taylor's defence is full of internal contradictions. It acknowledges his tendency to "ramble" and describes him as "easily confused", but explains his more outrageous or incriminating comments by asserting that they were an attempt to "flush out" the fraudulent lobbyists. His appeal seeks to divert attention from the shortcomings of his defence, and his own reluctance to co-operate fully with the investigation, by casting the blame on the alleged bias or unfairness of the Sub-Committee's Members and staff.

88.  We acknowledge that significant influence should normally be accorded to sworn evidence in a Statutory Declaration. But the content of Lord Taylor's Declaration is inherently so implausible that we do not find ourselves able to attach much weight to it, particularly when it is set alongside the strength of the evidence to be found so abundantly in the transcripts of his meetings with the undercover journalists.

89.  We therefore uphold the finding of the Sub-Committee that Lord Taylor of Blackburn, in his conversations with the undercover journalists, failed to act on his personal honour, in breach of paragraph 4(b) of the Code of Conduct.

Sanctions

90.  We have in our First Report set out our reasons for concluding that the House has the power to suspend its Members. We have therefore given careful consideration to the appropriate sanctions in the cases of Lord Truscott and Lord Taylor of Blackburn.

91.  In view of the seriousness of the findings we have made in respect of Lord Truscott and Lord Taylor of Blackburn, we propose that along with this Report, the House be invited to agree the following resolutions:

·  That Lord Truscott be suspended from the service of the House until the end of the current session of Parliament.

·  That Lord Taylor of Blackburn be suspended from the service of the House until the end of the current session of Parliament.

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1   Committee on Standards in Public Life, Standards of Conduct in the House of Lords (2000, Cm 4903)-see for instance Paragraph 6.12. Back