Public Institutions

Lord Fairfax of Cameron Excerpts

Thursday 30th June 2016 Lords Chamber

Moved by

[Lord Fairfax of Cameron]

That this House takes note of the role of openness and transparency in reinforcing confidence in public institutions.

[Lord Fairfax of Cameron (Con)]

My Lords, it is an obvious truth that openness and transparency are desirable attributes of public institutions. As far as this House is concerned, one of the places that is recognised is in paragraph 10 of the Code of Conduct, which sets out the general obligations of a Member to register and declare their interests and then goes on to say:

“The test of relevant interest is whether the interest might be thought by a reasonable member of the public to influence the way in which a Member of the House of Lords discharges his or her parliamentary duties … The test of relevant interest is therefore not whether a Member’s actions in Parliament will be influenced by the interest, but whether a reasonable member of the public might think that this might be the case”.

The importance of the Code of Conduct is recognised in the first sentence of the report of the Committee for Privileges dated 13 April 2016, which is ironically entitled Undermining Public Confidence in the House. It reads as follows:

“A central purpose of the Code of Conduct is to provide the openness and accountability necessary to reinforce public confidence in the House of Lords”.

The relevance of this, and the reasons that I balloted for this short debate on this important topic of public interest, is that while it may have a topical EU context, I believe that the principles at stake are of much wider relevance. Since rejoining this House eight months ago, I have had a particular, personal experience of a public institution apparently rejecting the principles of openness and transparency. This is a matter of concern to me and I thought it only right to draw it to the attention of this House and, therefore, the public. I apologise if some of my remarks are rather specific and detailed.

This came about after I spoke last autumn in the first debate on the referendum. Having myself just completed that lengthy and exhaustive declaration of interests, with which all your Lordships will be familiar and which all new Members of this House have to complete, I was surprised to note that some Members speaking in that debate who were former EU Commissioners did not, when speaking, declare the pensions that they receive from the EU. I looked into this further and discovered that there was a specific exemption from the Committee for Privileges and in the code exempting such Members from declaring such pensions and that the committee had confirmed this exemption on several occasions. This resulted in my writing a letter, co-signed by 30-odd Members of this House, to the committee in March this year setting out the reasons why we thought this exemption was, in 2016, inappropriate and, frankly, wrong. A copy of this letter is in the Library for those noble Lords who would like to look at it later.

That letter made a number of points. I have another quote, if your Lordships will forgive me. Paragraph 58 of the Code of Conduct for Members of the House of Lords and Guide to the Code of Conduct states:

“Members are not required to register pension arrangements”—

I think that we are all familiar with that—

“unless conditions are attached to the continuing receipt of the pension that a reasonable member of the public might regard as likely to influence their conduct as parliamentarians”.

And here is the important sentence:

“Such conditions attaching to pensions from European Union institutions do not normally require the pension to be registered or declared in proceedings in the House”.

In other words, as we wrote in our letter, a Member is not at the moment normally required to register or declare a pension from EU institutions, even if the receipt of that pension by such a Member is subject to conditions that a reasonable member of the public might regard as likely to influence their conduct as parliamentarians.

My next point that I draw to your Lordships’ attention is very important and is contained in Article 213 of the treaty of Rome. This, in my submission, makes this situation different from all other pensions that are exempted from the normal obligations of disclosure. It states:

“The Members of the Commission shall refrain from any action incompatible with their duties ... When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom … In the event of any breach of these obligations, the Court of Justice may … rule that the member concerned be … deprived of his right to a pension”.

That is key, because the nuisance that I am trying to point out here is not only that, if a former EU Commissioner and Member of this House is speaking, the fact of his or her being in receipt of an EU pension needs not be disclosed, but that this financial sword of Damocles is also unknown. In this era of transparency, I submit that this is inappropriate.

My third point is that this matter was considered, I have found out, about 10 years ago by the Sub-Committee on Lords’ Interests under the noble and learned Lord, Lord Woolf, who is, as many noble Lords will know, a very distinguished Law Lord. He looked into this exemption and his report contained a very simple conclusion—please forgive me for another quote; it is only one sentence, recommending that,

“Members of the House in receipt of pensions from the European Union should as a matter of course declare such pensions as a financial interest when taking part in debates, Statements and Questions on European Union matters”.

The curious thing is that is an unequivocal recommendation, but the committee rejected it and has done so ever since.

As noble Lords have heard, normal pensions are exempted from obligations of disclosure. For the reasons I hope I have set out, we consider this situation to be different. However, the Committee for Privileges disagrees with us. As a new Member of this House, albeit the second time round, I was genuinely surprised—

[Lord Watson of Richmond (LD)]

Is there a scintilla of evidence that the receipt of pensions from the European institutions has ever influenced the position of a Member of this House or that the European authorities have threatened such a Member for expressing a view?

[Lord Fairfax of Cameron]

Anyone who listened to that question will realise that I cannot say that there has been but, as the noble Lord heard, in the Code of Conduct the question is whether a reasonable member of the public might think that such was the case if they knew the facts.

[Lord Pearson of Rannoch (UKIP)]

My Lords, perhaps I can help the noble Lord on that question. There is no doubt that the European Commission has threatened people with the loss of their pension if they do not toe the EU line. One of those people is the redoubtable and wonderful Marta Andreasen, who noble Lords may remember was the chief accountant of the European Union and as such refused to sign its fraudulent accounts. She was threatened with the loss of her pension. Another is the former French Prime Minister, Madame Édith Cresson, who had an arrangement with her dentist which was less than wholly proper. When she came to trial in front of the Commission, it decided not to take her pension away because she had gone through enough suffering. I wanted to help the noble Lord with his interjection, which supports our side of the argument rather more than his.

[Lord Fairfax of Cameron]

As I was saying, I, as a new Member of this House—albeit the second time round—was genuinely surprised when I received the letter of rejection from the committee, because I honestly thought that the arguments we had set out in our letter in this day and age were frankly unanswerable, and there are further reasons for so saying. This is of course now 2016, after the expenses scandal and the seven Nolan principles of public life. What once may have been acceptable, if it ever was, no longer is. This exemption, in my submission, is now out of date. To paraphrase my noble friend Lord Lexden, who spoke in the previous debate, it does not pass muster any longer.

Secondly, I refer to the Survey of Public Attitudes Towards Conduct in Public Life 2014 contained in the briefing pack provided by the Library for this debate. It contains two quite telling sentences:

“Overall, the survey suggests that the public continue to have a very poor valuation of the current standards in public life”;

and,

“Overall, the survey paints a fairly bleak picture of the public’s perceptions of standards in public life”.

In its April 2016 letter in reply to ours, the committee simply stated that it had previously considered this matter on three occasions and that it,

“could not identify a material development since it last considered the matter which should cause it to reconsider its position”.

There we have it: a particularly important committee of this House, comprised, as noble Lords will see when they look at its composition, of some very senior and distinguished Members, professes to respect openness and accountability while at the same time by some of its decisions apparently rejecting the principle of transparency. I am led to go on to say that it is no wonder that the public have the low regard for standards in public life that is noted in the briefing pack, as noble Lords have just heard.

As soon as I heard that this debate had come up in the ballot and I got the date for it, I gave notice to the chairman of the committee and implicitly invited him and any of his committee members to attend but, as far as I am aware, none of them is in the Chamber today.

[Baroness Hayter of Kentish Town (Lab)]

Will the noble Lord tell us whether he also notified about this debate all the people against whom certain aspersions are being cast?

[Lord Fairfax of Cameron]

If I heard that correctly, I think that this is a matter of public interest and I am simply ventilating a decision made by the committee.

[Baroness Hayter of Kentish Town]

Do I take that as a no?

[Lord Fairfax of Cameron]

Yes. I am obviously not casting personal aspersions. I think that the court of public opinion will judge this matter.

[Baroness Hayter of Kentish Town]

I am sorry to hassle the noble Lord. I am sure he heard that what I asked him was whether he had alerted the people who might be caught by this accusation to the nature of this debate. I think that most people thought it was about something quite different, and I am asking whether he had alerted the people who might have an interest in the case he is making to the content of this debate.

[Lord Fairfax of Cameron]

I had not alerted those people on all sides of the House who might be caught by this, but my comments are not directed at them; they are directed at the decisions of the committee.

Notwithstanding what the noble Baroness has just said and what other Members of this House who are listening may feel, I believe that this is a matter on which the court of public opinion will draw its own conclusions. As to the subject of this debate, I took advice about how to frame the ventilation of my concern on this topic, and I think it was the Table Office that advised me to address it in this way. While it is rather specific, I think that it raises general principles of transparency, openness and perhaps accountability.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am grateful to the noble Lord for letting me intervene. I am in receipt of a pension from a Civil Service trade union and I regularly participate in debates relating to employment. I observe that there are scientists in receipt of pensions who participate in debates in this House. I notice, too, that there are people in receipt of health service pensions. In general, rather than specific, terms, which the noble Lord has just come to, is he arguing that this debate is about a general application right across the board, or is he focusing solely on the EU?

[Lord Fairfax of Cameron]

In my submission, this situation is different because of the provision about forfeitability. That is the key point because, as I understand it, there is an exemption for most other pensions. The key point here is that any member of the public who was listening would not know that one of the noble Lords taking part in the debate was in receipt of a pension that they were not obliged to disclose but, more particularly, that if they said one word that the ECJ objected to, they could have that pension forfeited. That is the mischief that I am talking about and it is utterly different from the situation that the noble Lord has referred to.

I think that I have made myself clear. I have genuine concerns. I am raising this subject at an interesting time, but in fact it has come up because I am a new Member and had not come across it before. Although it is curious that it should come up now, in the era of transparency and openness in which we live it is a matter that is worthy of debate. Unless it be thought that this is a party matter, I am authorised to say that several Members of this House who countersigned the letter that we wrote have expressed their agreement with my words, including the noble Baroness, Lady Jones of Moulsecoomb. I beg to move.

--- Later in debate ---

[Lord Fairfax of Cameron]

I thank all noble Lords who spoke in this debate for their varied contributions and the Minister for her comprehensive reply. Although I admittedly majored on one aspect of transparency in this House, I am glad also to have stimulated a wider debate on this important topic. I am sure we will return to it in the future. I beg to move.

Motion agreed.