The Conduct of Lord Blencathra - Privileges Committee Contents


ANNEX 2: REPORT FROM THE COMMISSIONER FOR STANDARDS


Summary of the complaint

1. On 11 July 2012 Mr Paul Flynn MP wrote to me requesting that I investigate Lord Blencathra on the basis of an article in The Independent on 17 April 2012 (appendix A). On 16 July 2012 I replied to Mr Flynn inviting him to identify in what respect he believed Lord Blencathra "may have breached the Code of Conduct" (appendix B). Mr Flynn supplied further information in a letter dated 17 July 2012 (appendix C) and specified that he believed Lord Blencathra had breached the prohibition on accepting payment in return for parliamentary services, contrary to paragraph 21 of the Guide to the Code of Conduct ("the Guide"). Mr Flynn identified five instances in which it is alleged that Lord Blencathra breached the Guide by providing parliamentary services on behalf of the Cayman Islands Government Office in the United Kingdom. I conducted a preliminary assessment of Mr Flynn's complaint and on 24 July 2012 wrote to Lord Blencathra advising him that I had decided to investigate the complaint and inviting him to provide a full and accurate account of the matters in question (appendix D).

Key facts

2. Lord Blencathra's entry in the Register of Lords' Interests shows that he has registered as a category 2 (remunerated employment) interest—

  • "Director, Cayman Islands Government Office in the United Kingdom."

This registration is in compliance with paragraph 10(a) of the Code of Conduct.

3. Mr Flynn in his letter of 17 July 2012 drew attention in particular to a press conference that Lord Blencathra had given whilst in the Cayman Islands. Mr Flynn supplied an article by the Bureau of Investigative Journalism dated 17 April 2012 containing extracts from a transcript of the press conference. In that press conference Lord Blencathra explains his role as the Director of the Cayman Islands Government Office in the United Kingdom.

4. In relation to Mr Flynn's complaint and paragraph 21 of the Guide, the following extract from the press conference is perhaps the most relevant—

Cayman, the financial industry here has to justify its existence, which it didn't really have to do before in political circles. I've been appointed because I have 27 years experience as a Member of Parliament, ten to twelve years experience in a British Government. I'm still a Parliamentarian in a different colour of the corridor in Westminster.

And the Government feels that because of the knowledge I have of how Whitehall works, Westminster works, that I can be a good representative to feed in to the correct authorities in the Government the views of the Cayman Islands and help defend our interests.

My role is to make sure that advice in to Government ministers, to the Civil Service, the Governor does it as his level, I do it at mine on behalf of the Cayman Islands Government.

5. Paragraph 17 of the Guide explicitly recognises that members have outside interests. However, members are prohibited from accepting payment in return for parliamentary advice or services.

6. On receipt of his response (at appendix E), I wrote to Lord Blencathra and requested that he advise me as to what notepaper he used when writing to the Chancellor, John Cryer MP and Angela Eagle MP (appendix F). I also invited him to advise me if he was content with the transcript supplied by Paul Flynn MP (appended to appendix C) and, if not, to provide clarifications as he saw fit. I felt the notepaper used was relevant as it would indicate the capacity in which he wrote and also might affect the impact of the letters on the relevant recipients. On 6 September 2012, Lord Blencathra replied (appendix G) addressing both points. He accepted the probable accuracy of the interview transcript but went on to provide further detail as to his role. He said that his answer must be placed in the context of a "hostile" interview and that the explanation contained in his letter to me of 28 July 2012 (appendix E) provided a fuller and more accurate picture of his role. Lord Blencathra is clear that his role as the Director of the Cayman Islands Government Office in the UK doesn't require him or, indeed, involve him in influencing Parliament or using his membership of the House of Lords to gain access for others to ministers or officials.

Findings

7. Mr Flynn's complaint is that Lord Blencathra contravened paragraph 21 of the Guide and its prohibition on accepting payment in return for parliamentary services. Paragraphs 20, 21 and 22 explain the application of paragraphs 8(c) and (d) of the Code of Conduct. I have considered the complaint and Lord Blencathra's response against the requirements of paragraphs 8(c) and (d).

8. The prohibition from accepting payment in return for parliamentary services means that members may not, in return for payment or other incentive or reward, assist outside organisations or persons in influencing Parliament. This includes seeking by means of participation in proceedings of the House to confer exclusive benefit upon the organisation (the "no paid advocacy rule"); or making use of their position to arrange meetings with a view to any person lobbying members of either House, ministers or officials. A member may never provide parliamentary services in return for payment or other incentive or reward.

9. Lord Blencathra in his response dated 28 July 2012 (appendix E) provides the general background to his role with the Cayman Islands Government Office in the United Kingdom and argues "that none of my work involves lobbying Parliament or seeking to influence either House". He then goes on to address the specific points made by Mr Flynn.

Writing to the Chancellor of the Exchequer on Air Passenger Duty

10. Mr Flynn's complaint drew attention to the allegation in The Independent that Lord Blencathra "Lobbied the Chancellor George Osborne to reduce the burden of air passenger transport taxes on the Caymans."

11. In his response, Lord Blencathra says that he clearly stated his interest to the Chancellor and that he was writing in his capacity as the "Political Director of the Cayman Islands Government office in London." He accepts that he was urging the Chancellor to support two items in a Caribbean submission about Air Passenger Duty which would help the Cayman Islands. He did not believe he was prohibited from writing in the terms he did but if he had misinterpreted the guidance, he then would apologise profusely for that misunderstanding. He also reiterated his policy of not raising matters such as this in Parliament.

12. I have come to the view that his letter to the Chancellor urging action favourable to the interests of the Cayman Islands did not breach the Code of Conduct. Lord Blencathra in his letter was open about his status with the Cayman Islands Government Office in the United Kingdom. The letter was not sent on House of Lords headed paper (see Lord Blencathra's letter to me of 6 September 2012 at appendix G) and its contents in no way suggest that it was sent in his capacity as a peer. There is thus no evidence that he sought to use his membership of the House of Lords to influence the Chancellor. A reasonable member of the public would, I suggest, take the view that the letter was clearly sent on behalf of the Cayman Islands Government and that the Chancellor would know what weight to accord it, having been advised of Lord Blencathra's interest.

Facilitating a visit by three MPs to the Cayman Islands

13. Mr Flynn's complaint drew attention to the allegation in The Independent that Lord Blencathra "Facilitated an all-expenses-paid trip to the Caymans for three senior MPs with an interest in the islands."

14. Lord Blencathra acknowledges that in 2011 three MPs were invited by the Cayman Islands Government (CIG) to visit the islands. He states that the Cayman Islands Office in London administered the visit. He says that the matter could have been managed by his deputy but that for reasons of protocol he played an active role in organising the visit.

15. I have taken the view that, in the absence of evidence to the contrary, Lord Blencathra administered this visit by reason of his role as Director of the Cayman Islands Government Office in the United Kingdom. His status as a member of the House of Lords was irrelevant. His point that the visit could have been administered by his deputy is well made. Thus, I am satisfied that Lord Blencathra did not breach the Code of Conduct in connection with this visit.

Attempted meeting with John Cryer MP

16. Mr Flynn's complaint drew attention to the allegation in The Independent that Lord Blencathra "Followed an Early Day Motion in the Commons calling for the Caymans to be closed down as a tax haven by trying to introduce the MP responsible ... John Cryer, to members of a Cayman Islands delegation in London. (The meeting never took place.)"

17. Lord Blencathra in his account states that this proposed meeting originated in a request by three members of the Cayman Islands Legislative Assembly (MLAs), whom he describes as being opposed to some actions of the of CIG. They submitted a request, via the Governor of the Cayman Islands, seeking a meeting with Mr Cryer MP as part of a visit to London. Lord Blencathra claims that the Foreign and Commonwealth Office decided that they would arrange some meetings for this group but requested that he should handle the parliamentary request. He supplied a copy of his subsequent letter to Mr Cryer as an attachment to appendix E. Lord Blencathra argues that although the three MLAs were not ministers he saw nothing wrong in a group of parliamentarians seeking to meet another parliamentarian.

18. A narrow interpretation of paragraph 21 of the Guide might suggest that seeking to arrange such a meeting is prohibited. However, that would only apply if a member sought to make use of their position to arrange meetings with a view to any person lobbying members of either House, ministers or officials. In this case, Lord Blencathra made Mr Cryer aware that he was writing in his "capacity as Director of the Cayman Islands Government in the United Kingdom". The letter was written on Caymans Islands Government Office in the UK headed paper. There is, thus, no evidence that Lord Blencathra was using his position as a member of the House of Lords to provide a parliamentary service on this occasion.

Approaching the International Bar Association

19. Mr Flynn stated that Lord Blencathra approached the International Bar Association before they launched a task force on human rights and illicit financial flows.

20. Lord Blencathra in his response noted that one of the task force members publicised her role on the internet prior to the task force being officially launched. He met the IBA and promised them full cooperation with their work. He questioned how these matters could constitute a breach of the Code of Conduct as the IBA has nothing to do with Parliament or the Government. I am clear that Lord Blencathra's dealings with the IBA or any member of its taskforce did not, on the basis of the information available to me, constitute a breach of the Code of Conduct.

Letter to Angela Eagle MP

21. Mr Flynn referred to Lord Blencathra writing to Angela Eagle MP after she raised a question in the House of Commons about his appointment.

22. Lord Blencathra in his response stated that he felt Ms Eagle's question misrepresented the facts from his perspective and that he wrote to her "to put the record straight". I note that his letter went on from seeking to correct what he felt was inaccurate information to appearing to provide a general defence of the "Cayman Islands' status and practice as one of the most important financial centres in the world." Again, the letter was written on Caymans Islands Government Office in the UK headed paper.

23. On the basis of Lord Blencathra's letter to Ms Eagle dated 27 November 2011 I am satisfied that he was seeking to respond to what he considered inaccurate comment made by Ms Eagle in the Commons, rather than seeking to exercise parliamentary influence. Thus he did not breach the Code of Conduct.

General

24. I have found that in respect of each of the points raised by Mr Flynn, that Lord Blencathra did not breach the Code of Conduct. However, I note that Lord Blencathra at a press conference on the Cayman Islands, as reported by the Bureau of Investigative Journalism, stated that he had been appointed as Director of the CIG Office in the United Kingdom on the basis of his political experience, as a Member of Parliament and government minister. He also mentioned his current status as a parliamentarian. He further added that his role was "to make sure I can feed advice in to Government ministers, to the Civil service, the Governor does it as his level, I do it at mine on behalf of the Cayman Islands Government." Prima facie, this account of his appointment and role appears incompatible with the provisions of paragraph 20 of the Guide. The second bullet point of that paragraph states that a member may exceptionally give parliamentary advice to an organisation with whom the member has a financial interest, providing that the member can demonstrate that—

The payment or benefit which the member does receive is not substantially due to membership of the House, but is by reason of personal expertise or experience gained substantially outside Parliament; and that the member was, or would have been, appointed to the position without being a member of the House.

25. I find that formulation somewhat difficult to apply. On the basis of his own reported explanation, it seems that that Lord Blencathra was appointed on the basis of his expertise and/or experience gained whilst a Member of Parliament. However, his membership of the House of Lords was not a prerequisite for appointment. There is no evidence before me to suggest that Lord Blencathra has provided parliamentary advice in return for payment.

26. I am conscious that the Committee for Privileges has previously considered what a member who has registered an interest can legitimately do as part of their parliamentary activities, albeit in cases subject to the previous Code of Conduct, which did not have a bar on providing parliamentary advice. The Committee cited the advice of a former Clerk of the Parliaments to the Committee on Standards in Public Life and which was quoted in a report of the Sub-Committee on Lords' Interests (as it then was). He said:

A parliamentary consultancy is an arrangement reflecting a two-way relationship. On the one hand the client/firm receives information from the employee/peer (A below); and on the other hand, the peer is given instructions to undertake certain activities in Parliament in the interests of the client (B below).

(A) The information which the client might expect to receive would include:

  •   information about the progress of legislation
  •   information about debates and opinions expressed in the House which might be of interest to the client
  • information as to which members of the House might be sympathetic to the interests of the client
  •   indications as to which are the appropriate Ministers to approach for purposes of furthering the interests of the client and how such approaches might be made.

(B) The services which the peer might be expected to perform on behalf of the clients might include:

  •   speaking in debates
  •   tabling, supporting and moving amendments
  •   asking Parliamentary Questions
  •   lobbying Ministers and other members of the House
  •   acting as host at functions in the Palace of Westminster.[1]

27. The Sub-Committee on Lords' Interests in that case stated, "The distinction between advocacy and advice is crucial. Inevitably, however, there are borderline issues. These may place too great a burden on the judgment of the individual Member and may lead him to cross the boundary between what is legitimate and what is not. Members willing to take money in return for parliamentary services place themselves in great danger of crossing the boundary, knowingly or inadvertently. Even when a Member's intention is limited to obtaining information, the very fact of approaching, on behalf of paying clients, MPs, other Lords, Ministers and civil servants, may give rise to a perception of advocacy and lobbying. The impression can easily be given that not only advice but also advocacy has been bought by the client. Whether or not a Member has indeed crossed the boundary from the permissible depends on the facts of each case."[2]

28. I reiterate my view that there is no evidence that Lord Blencathra engaged in any of the services which a "peer might be expected to perform on behalf of clients". Lord Blencathra himself recognised that his letter to the Chancellor might possibly constitute a breach of the Code of Conduct and it was clearly an attempt to lobby the Chancellor. However, on the facts of the case I do not believe it constituted a breach of the Code of Conduct. It was clearly sent in Lord Blencathra's role as Director of the CIG Office and merely reiterated a case already submitted to the Chancellor by the Caribbean Tourism Organisation and endorsed by the Cayman Islands Government. The letter might have been ill-advised given the restrictions in the Code of Conduct but I do not feel it would justify my finding Lord Blencathra in breach. He was open and transparent and his position was self-evident to the Chancellor.

29. I am satisfied that there is no evidence that Lord Blencathra exercised parliamentary influence on behalf of the Cayman Islands Government Office in the United Kingdom. Equally, no evidence has been presented that he provided parliamentary advice or services. On the basis of the current complaint and supporting evidence, I am satisfied that Lord Blencathra has not breached the Code of Conduct and I therefore dismiss the complaint.

Paul Kernaghan CBE QPM

Commissioner for Standards


1   Committee for Privileges, 2nd report (2008-09), The Conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn (HL Paper 88-I), pp 32-33. Back

2   Ibid., p. 33. Back


 
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