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).
2. Lord Blencathra's entry in the Register of Lords'
Interests shows that he has registered as a category 2 (remunerated
- "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
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.
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
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
Facilitating a visit by three MPs to the Cayman
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.
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
- acting as host at functions in the Palace
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."
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
Ibid., p. 33. Back