Paid Directorships and Consultancies (MPs)

John Hemming Excerpts

Wednesday 17th July 2013 Commons Chamber

[John Hemming (Birmingham, Yardley) (LD)]

I would like to apologise to the House for the fact that I was doing a second job earlier. I had to pop off and sit on a statutory instrument Committee. I shall have another second job in a bit, which involves sitting on the Joint Committee on Statutory Instruments. The quorum is two Members of Parliament and I believe that I am needed, so I shall pop over there for two minutes later on. All sorts of conflicts exist in the demands on Members’ time, but, to pick up on the demand made by the hon. Member for Derby North (Chris Williamson), I do not believe that having a “political class” is the solution.

I refer the House to my entry in the Register of Members’ Financial Interests. The motion is badly drafted, in that it would trap one of the businesses that I have created, but not the other. I shall talk a bit about my history. I first fought a general election in 1983, when I was the youngest Liberal candidate in the country. Later that year, I founded a business called John Hemming and Company. I fought the general election in 1987, and I was elected to Birmingham city council in 1990. I became the group leader and deputy leader of the council in 2004. During all that time, I have also chaired my business, which is now called JHC.

Speaking of conflicting demands on Members’ time, I went to chair my board meeting yesterday. It took two hours. I came into the House of Commons early, at about 7.30 in the morning, and at about 10 o’clock I got on the tube and went to my office. I chaired the meeting and was back here by noon. I have to ask: what is the big danger in my popping off to London Bridge for two hours, once a month? What mischief is created by that?

[Paul Flynn]

If there were a crisis in one of the hon. Gentleman’s businesses involving large sums of money, and he had to make a choice between dealing with that and an important constituency matter here, which way would he go? That illustrates the problem of dual loyalties and dual wages.

[John Hemming]

I am lucky, in that I am able to arrange things so that that does not happen. I am in control of the timing in the business. Obviously, my priority is with Parliament. My duty is to Parliament, as is quite clear under our constitution and, like most hon. Members, I work seven days a week performing that duty. Admittedly I only did half a day on Sunday, and I might finish by 4 o’clock on a Saturday, but I do work the standard 60, 70 or 80 hours a week, depending on what is going on.

It has been suggested that it would be reasonable to pay people like me who have large external earnings a lower rate of pay here. I do not mind that, as long as no one says that I am not a full-time MP. This is what I resent about the motion. Its argument is that I am not doing this job correctly for my constituents because I happen also to chair a business that I have run for many years.

[Chris Williamson]

Would the hon. Gentleman accept that there is an issue of perception involved? The perception is that hon. Members’ directorships or consultancies could influence the way in which they vote on certain issues. As I mentioned in my speech, people feel that certain Members voted for the national health service reorganisation so that they could gain financially from it.

[John Hemming]

I accept that this is about conflicts of interest, and there is a problem when external bodies control what Members of Parliament do. I am a member of a trade union, so I am not anti-trade union, but if the unions are controlling what the Labour party is doing, that is not a good environment.

Similarly, there is a problem with having a second job as a Minister. That really creates a conflict of interest, because Ministers can lose their ministerial salary if they do not vote along party lines in Parliament. We accept that as part of our constitution, but it clearly involves a conflict of interest, in that Ministers have to support the Government. I am lucky as a Back Bencher; people say that I can afford to be independent. I will not lose any income if I happen to rebel against the party.

[Oliver Colvile]

Does the hon. Gentleman remember that, at the beginning of the 20th century, people had to resign their seat if they wanted to become a Cabinet Minister? That must have been pretty devastating at the time.

[John Hemming]

The last such resignation was in the 1960s, when the practice went against the then Government and was brought to an end. The second job of being a Minister is clearly demanding, and it undermines that Member’s constituency activity.

The wording of the motion is absolutely dreadful in that it would pick up one of my businesses but not the other. Why is that? What is the sense in picking up one structure of ownership and not another? The Opposition are also suggesting that we should not take the earned money, but they have no problem with those Members who are shareholders taking unearned income. Traditionally, Labour Members thought that earned income was more acceptable than unearned income, but they now seem to be arguing that we should have our unearned income. That is easy enough for me to structure, as I am in control of my corporate structures, but it is difficult for other people in other circumstances. The whole thing is frankly absurd. It drives us on again to what I think the hon. Member for Derby North was arguing for—the development of a political class. He did say that. He said that the Labour party wants a political class—a concept according to which we work only in politics and do not have any experience outside it.

[Helen Goodman]

No, no, no, no—the hon. Gentleman completely misses the point. It is perfectly possible to do as I did and have three different jobs before entering this House. That gave me more than 20 years of working experience in different institutions, which I can bring to bear on the politics—without having another paid job alongside being a Member of Parliament.

[John Hemming]

The point I am making is a very simple one: I do not think we should have a political class. An Opposition Member has called for a political class—he said those words, and I see nods around the Chamber—but I think that is very dangerous. It is dangerous to have a situation where external bodies beyond the Government, who do control votes in Parliament, control people in Parliament. Apart from being extremely badly drafted, the motion drives things further towards a political class. Thus people who have not had real jobs go through the special adviser process and all that sort of thing, ending up not being in the real world. That moves against the concept of people being able to be Members of Parliament for a short period of time, and what do we gain from it? Nothing.

--- Later in debate ---

[Paul Flynn (Newport West) (Lab)]

This is hardly a spasm on my part. I greatly respect the hon. Member for South Swindon (Mr Buckland), but may I tell him that it was 16 years ago that I wrote in a book that all MPs’ additional earnings should be put into a charitable fund or used elsewhere? I repeated that in another splendid book that I published a short while ago. All the considerable royalties from that book go to charity—why not, because I already get a full-time wage for what I do?

I am sorry that I picked on the hon. Gentleman during his speech, but for five weeks last year I could not act as an MP. I did not receive any salary during that time—quite rightly so. We forget that we live in a little bubble with a system that we are used to, but people watching the debate and tweeting are baffled that anyone can say, “I have a job paying £65,000, but other jobs get my priority and attention at certain times.” If Members have to perform outside work, it would be easy—and absolutely right—to deduct the money earned from their parliamentary salary.

[John Hemming]

Should unearned income also be deducted from a Member’s salary?

[Paul Flynn]

The hon. Gentleman makes an interesting point, but it is part of a different argument.

The public will not see this subject in subtle tones or have regard to the lawyers’ arguments we are hearing. In 2009, after the great screaming nightmare of the expenses scandal, our reputation was at rock bottom, but now it is even worse—it is subterranean. We saw the reaction to the suggestion that MPs’ salaries should be increased: all the old resentment was churned up.

The Daily Telegraph did democracy a reasonable turn by submitting a freedom of information request that demanded to know the most popular book that wicked MPs were borrowing from the Commons Library. I am sure that its journalists were desperate for another negative story about MPs and that they prayed in their offices that that book would be “Fifty Shades of Gray”, “How to Keep a Moat”, or “Duck House Owning for Beginners”. However, the book in greatest demand at the Library was the improving tract that I wrote, which recommends that MPs live off their salary.

We must look at this from the perspective of outsiders, not by considering subtle points about what is unearned income and what is a salary. If Members want to get outside experience, there are splendid institutions in the House through which we can go off to join the Army, Navy or Air Force, or secure a fellowship with a commercial firm over many months. Those experiences are marvellous, but the important point is that they are not paid. The great resentment among the public arises because we receive a full-time wage and so we should be doing full-time work.

--- Later in debate ---

[Ian Lucas]

I will make a little progress and if I have time, I will give way.

It has always amazed me that some Members of Parliament continue to do other jobs. Why would someone become a Member of Parliament if they wanted to be a company director or a consultant? They could be a company director or a consultant without being a Member of Parliament. Becoming an MP is not a route to becoming a company director or a consultant—or is it? I always ask myself why it is that companies want MPs as consultants or directors. Is it for their unique insights on the world? Even the cleverest of MPs—and there are some very self-regarding MPs on the Government Benches today—should not flatter themselves. It is clear why such posts are offered to Members of Parliament. It is not because of their unique intelligence, but because they are Members of Parliament. It is because of the influence that Members of Parliament have and the access that that buys.

[John Hemming]

Does the hon. Gentleman accept that I appointed myself to that job and that when I did so, I was not a Member of Parliament, although I had stood for Parliament? It was therefore not a factor in the consideration.

[Ian Lucas]

As interesting as the hon. Gentleman thinks he is, I was not talking about him.

No one should have privileged access to an MP. Even more importantly, no one should be able to secure access to an MP by paying them. For that reason, I welcome the proposal of the Leader of the Opposition that MPs should be prevented from holding paid directorships and consultancies. Such arrangements give those who pay for it unique access to MPs.

It was interesting that the Leader of the House referred to a job offer that he received after he became a Member of Parliament. I would be interested to know why that company decided he was the person they wanted to give a job to. Does he know? Can he tell us? I would be delighted to take an intervention. Let me tell him the reason: it is because he is an MP and the company wanted access to him.