Members’ Paid Directorships and Consultancies

Lord Hague of Richmond Excerpts

Wednesday 25th February 2015 Commons Chamber

[Ms Angela Eagle]

I beg to move,

That this House believes that, as part of a wider regulatory framework for hon. Members’ second jobs, from the start of the next Parliament no hon. Members should be permitted to hold paid directorships or consultancies.

I wonder whether the Leader of the House could indicate—he could even shout over the Dispatch Box—before I begin my speech whether, in the light of the attempts by the new chair of the parliamentary Labour party to give the Prime Minister what he said he wanted at Prime Minister’s questions today, it is his intention not to move his amendment to today’s motion.

[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

I will most certainly move the Government amendment today. It is an excellent amendment. It is not my role to facilitate the Opposition’s making up their policy as they go along throughout the afternoon.

[Ms Eagle]

I want to make it clear that we are actually trying to facilitate what the Prime Minister said he wanted during Prime Minister’s questions. We are not making up our policy as we go along; we are trying to include all views in it. It is in that spirit that I want to open the debate and move the motion in the name of the Leader of the Opposition, which proposes that this House bans MPs from holding paid directorships or consultancies.

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[The First Secretary of State and Leader of the House of Commons (Mr William Hague)]

I beg to move an amendment, to leave out leave out from “House” to the end of the Question and add:

“reminds hon. Members of their commitment to uphold the Code of Conduct, not least that Members should act on all occasions in accordance with the public trust placed in them, that they should always behave with probity and integrity, including in their use of public resources, that no Member should act as a paid advocate in any proceedings of the House and that the acceptance by a Member of a bribe to influence his or her conduct as a Member, including any fee, compensation or reward in connection with the promotion of, or opposition to, any Bill, Motion, or other material submitted, or intended to be submitted to the House, or to any Committee of the House, is contrary to the law of Parliament.”

As the hon. Member for Wallasey (Ms Eagle) has acknowledged, the Opposition have moved their motion today because of the questions raised concerning the right hon. Member for Blackburn (Mr Straw) and my right hon. and learned Friend the Member for Kensington (Sir Malcolm Rifkind). It is entirely proper that our two colleagues have referred themselves to the Parliamentary Commissioner for Standards, and we should await the outcome of those proceedings. However, as Leader of the House, I can say that, given the high regard in which those two Members have always been held, these circumstances are the cause of some sadness across the House. In the meantime, I hope that the whole House will join me in paying tribute to the contribution that the right hon. Member for Blackburn and my right hon. and learned Friend the Member for Kensington have made to the House, to our national life and to international relations over many years.

It is vital for the health and strength of our democracy that the public have confidence in the integrity of—

[Sir Gerald Howarth]

Will my right hon. Friend give way?

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[Mr Hague]

I will just start my argument, then I will give way to my hon. Friend.

It is vital for the health and strength of our democracy that the public have confidence in the integrity of the democratic process and in the standards of conduct of all Members of this House. We live in an age of greater accountability and transparency, and the House of Commons has to live up to that. Transparency is an absolutely fundamental need in a democracy, and it would not be acceptable for Government policy to be influenced from outside by anybody in a way that was deliberately out of sight.

[Sir Gerald Howarth]

I should like to put on record that my interests are declared in the Register of Members’ Financial Interests in the usual way—[Interruption.] And I am proud of those interests, too.

Does my right hon. Friend not agree that it smacks of extraordinary opportunism on the part of the Opposition to take a whole afternoon to debate this issue? Have they nothing to say about the OECD congratulating the United Kingdom on managing the recovery of our economy after Labour destroyed it? Should not that be the subject of today’s debate?

[Mr Hague]

This is a week of remarkable economic news and good international endorsement of the Government, and that is no doubt partly why the Opposition have chosen to debate other matters today. Nevertheless, the issues of transparency and the reputation of the House are important at all times.

[Ian Murray (Edinburgh South) (Lab)]

Will the right hon. Gentleman give way?

[Mr Hague]

I will give way in a moment.

The reinforcement of transparency and accountability need constant effort, and that is part of what has been happening in recent years. At the end of the last Parliament, as the House knows, agreement was reached on the Parliamentary Standards Act 2009. Since then, more has been done than ever before in Parliament and in government on transparency. We have created a statutory register of lobbyists and appointed the registrar; we are legislating for the recall of MPs; and we have strengthened the rules governing the appointment of Ministers after they leave office to business appointments to cover all appointments or employment they wish to take up within two years of leaving office—there has been a very substantial increase in transparency on Ministers and former Ministers.

[Ian Murray]

rose—

[Andrew Gwynne]

rose—

[Mr Hague]

I shall give way to the hon. Member for Edinburgh South (Ian Murray), who asked first.

[Ian Murray]

The Leader of the House rightly talks about transparency, but may I just push him on that? Can he, and his Government, be wholly transparent with the House and the country by telling us how many jobs, additional to being an MP, he thinks it is acceptable for people in this House to have?

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[Mr Hague]

I am coming to the details of the motion in a moment. Clearly, right hon. and hon. Members make their own judgments about that, on both sides of the House, and find it entirely possible to do the work of a Member of Parliament.

[Mark Field (Cities of London and Westminster) (Con)]

Does the Leader of the House share my concern that, understandably perhaps, 10 weeks before an election this rather opportunistic motion is put forward? These issues are not for this House; they are for IPSA. After the expenses scandal, we set up IPSA to look at this and other issues. If we want to unravel what IPSA has done, either on this matter or on the issue of salaries, we do so at our peril.

[Mr Hague]

Salaries and allowances are for IPSA, but there have been independent reports on this issue. Again, I will come to that in a moment, but I just want to finish the point about the substantial increase in transparency that has rightly taken place in recent years. That does not mean we have finished the job of making Parliament more responsive to public concerns. The shadow Leader of the House has said some things about what will be in the Labour manifesto on this, but there will be matters about Parliament in the Conservative manifesto, including reducing the size of the House of Commons, and equalising the size of constituencies, thereby being fair to all parties and all constituencies, and saving money in the process.

[Andrew Gwynne]

But surely the right hon. Gentleman understands, when he talks about transparency, that it is also about how we as Members of Parliament and this House of Commons are viewed from outside. Does he therefore agree with his colleague and former Conservative Deputy Prime Minister Lord Heseltine that being an MP is

“not a full-time job”?

[Mr Hague]

I was about to agree with something the Leader of the Opposition said, so I hope the hon. Gentleman will let me go on to that. Certainly I found when I was Foreign Secretary, for instance, that I still performed the functions of a Member of Parliament, even though I spent probably 90% of my time on being Foreign Secretary.

On Monday, the Leader of the Opposition wrote to the Prime Minister and said:

“I believe MPs are dedicated to the service of their constituents and the overwhelming majority follow the rules.”

The shadow Leader of the House said a similar thing just now, and I believe that is right, across all parties—I hope I can say that as Leader of the House. The Leader of the Opposition went on to say that

“the British people need to know that when they vote they are electing someone who will represent them directly, and not be swayed by what they may owe to the interests of others.”

He wrote that without a hint of irony, having been elected entirely dependent on trade union votes and having presided over the most union-dominated Labour party in 30 years. Of all the candidates selected under his leadership, 61% are union-linked, and more than half of those come from a single union. He did not see the irony in what he was writing.

[Several hon. Members]

rose—

[Mr Hague]

Let me just develop this point. There are four very revealing points about the Opposition motion that I want to challenge. It is not a motion to ban second jobs—that would not be its effect—and it is not entirely clear what it would ban and what it would not ban. As one of my hon. Friends said, would it ban someone from being a partner of a professional firm? The motion does not mention that. Are lawyers, accountants and management consultants therefore in a different category, according to the Opposition? There is some discussion now taking place on the Opposition Front Bench about whether it would ban a partner of a professional firm, but there is no clarity here. The motion just asked us to make a decision. It is helpful when making a decision to know what is being put to the House. Does it ban someone from owning their own business? Are they banned from owning their own business if they are a director of that business, but not if they are not a director of that business? Have the Opposition thought that out? Does it mean—and this is an important question—that someone who sets up their own business, succeeds with it, creates jobs and contributes to the British economy is then to be barred from the House of Commons because they are a director of that business? That would be the effect. There are three-quarters of a million more businesses in this country after the past four years, and more of the people who created those businesses need to come into the House of Commons and not be discouraged from doing so. One suspects that, after a short examination, this motion shows as much understanding of business as the shadow Chancellor does on a bad night on “Newsnight”.

[Grahame M. Morris (Easington) (Lab)]

May I restate the concerns of the public and highlight the fact that someone who is the director of a private health care company—as many Conservative Members are—may participate in legislation that brings a direct benefit? That is appalling.

[Mr Hague]

If I understand the hon. Gentleman correctly, he is saying that being a director of one sort of company is not acceptable, but being a director of other sort might be. That is not at all clear in the Opposition motion before us tonight.

[Several hon. Members]

rose—

[Mr Hague]

Let me continue, because I am talking about the motion. We only have to examine it for a moment to see that it is calculated to create a headline rather than to solve a problem. The next most revealing point about it is that it is different from the policy the Opposition state outside the House. That policy was described to the Guardian newspaper earlier this week—therefore it must be accurate. It said:

“The opposition Labour leader is expected to put the ban on MPs’ second jobs in his manifesto and say he will consult on proposals to limit the amount of money MPs could earn from outside parliament to 10% or 15% of their salary – in effect, limiting outside earnings to about £10,000.”

It will not have escaped the attention of the House that there is no mention of this cap in the Opposition motion, although it may be part of the wider strategy referred to in the motion. Could this be because there are Opposition Members, including in the shadow Cabinet, who currently earn more than 15% of their salaries outside the House of Commons? I will come to them in a moment.

[Sir Bob Russell (Colchester) (LD)]

As a graduate of the university of life and the school of hard knocks, I can say that this is the best job I have ever had. If a Member of Parliament is doing his or her job properly here and in their constituency, where do they find the time to have other jobs?

[Mr Hague]

Members will have different views about that. The views of the right hon. Member for Greenwich and Woolwich (Mr Raynsford) were given a few years ago when these matters were discussed. He was a Minister at the time. He said:

“My interests do not adversely affect my ability to discharge my public responsibilities. On the contrary, I believe they help me to be a more effective MP precisely because they sustain my practical experience in the relevant fields.”

Members are entitled to hold that view, just as they are entitled to hold the view expressed by my hon. Friend.

[Conor Burns]

May I use this intervention to do what I probably should have done when I intervened on the hon. Member for Wallasey (Ms Eagle), which is to draw the House’s attention to my declarations in the register? My right hon. Friend has written a couple of very successful and enjoyable books while serving in this House. Does he feel that he was not serving his constituents during that period? He probably spent less of his spare time with his wife when he was writing those books, but continued to serve his constituents very well.

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[Mr Speaker]

The hon. Gentleman has no need to apologise to me. [Interruption.] Come on—let us try to preserve some decency of spirit in these matters. I say genuinely to the hon. Gentleman that he sought advice on this matter and he has tried to do the right thing. What he has just said is the right thing and I thank him for it.

[Mr Hague]

If I do not get on with this speech, no one will be declaring any interests because time will run out for the debate. When the points of order started, my hon. Friend the Member for Bournemouth West (Conor Burns) was being very kind about the books that I wrote.

That takes me to the point that I was going to make, which I have let the hon. Gentleman’s office know I would make: the hon. Member for Stoke-on-Trent Central (Tristram Hunt), the shadow Education Secretary, according to the register, earns substantial sums from articles, lecturing and book fees, and those are very good books, on which I congratulate him. Does the Labour party propose to apply this cap to earnings from books? Let me explain the import of that. The only way to ensure that sales from such a book remained under Labour’s cap would be to write an unsuccessful book, of which there are also examples on the Opposition Benches.

By what logic, according to Labour, is it acceptable for a Member to write an unsuccessful book but not a successful one? By what logic is it okay to write an unsuccessful book but not to engage in some other activity no more threatening to the public interest than an unsuccessful book?

[Emily Thornberry]

That was a good joke, but may I bring the right hon. Gentleman back to the motion, which, whatever debate there may be about what may or may not be the policy of the next Labour Government, is what we ought to be looking at. It is narrowly about paid directorships or consultancies. Does the right hon. Gentleman agree that if the motion were passed, we would not have the enormous embarrassment of what has happened in the past few days? Surely, on the most minimal change to the status quo, this is a first step. Why are those on the Government Benches against it?

[Mr Hague]

I am discussing the motion and what it means or does not mean. It is difficult to speculate about what would happen or not happen in the future if we pass a motion, the meaning of which is not clear. In any case, the burden of the motion is one with which we disagree. It was not a joke about books. I was making, through a bit of humour, admittedly, a serious point: the Opposition do not know how they would apply a cap to somebody who writes a book, including a member of the shadow Cabinet, or to a farm.

One of my hon. Friends mentioned a farm. A distinguished Labour Prime Minister, Lord Callaghan, owned a farm. How is someone with a farm meant to restrict their income to a fixed percentage of their salary? Would Lord Callaghan have had to resign from the House every time there was a good harvest and then try to return to it when the crops failed?

[Jon Trickett (Hemsworth) (Lab)]

Is the Leader of the House not aware that that precise system, though much more rigorous, is already applied in Washington, the home of free enterprise?

[Mr Hague]

I am also aware that we make our own rules in the United Kingdom. The United States is no longer our colony and we are not theirs, and we are entitled to make our own rules.

[Several hon. Members]

rose—

[Mr Hague]

I will give way again in a moment, but in the interests of the whole House I must make some progress.

The issue was considered in full by an independent and expert body, the Committee on Standards in Public Life, which said that it considered it

“desirable for the House of Commons to contain Members with a wide variety of continuing outside interests. If that were not so, Parliament would be less well-informed and effective than it is now, and might well be more dependent on lobbyists.”

I agree. I am leaving this House in five weeks’ time, as hon. Members know—[Hon. Members: “Shame!”]—and I fear for the future of the House of Commons if rules are adopted that risk it consisting entirely of people who are rich or who are professional politicians throughout their lives. That is the danger of the course that the Opposition suggest.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Everybody has been amused by the points that the right hon. Gentleman has been making, quite rightly, but I do not think the public will be particularly amused. The public’s real concern is not about people with a continuing interest; it is about people who become Members of Parliament and then obtain directorships and consultancies and who are perceived as being in something like a system of outdoor relief for grasping MPs.

[Mr Hague]

The right hon. Gentleman is trying to make a distinction between different circumstances, as another Member did earlier, but that distinction is not made in the Opposition motion, and the debate is on the motion. That suggests that if he disagrees to some extent with the Opposition’s policy—

[Gregory Barker]

Does my right hon. Friend agree that he is exposing the fact that this is not a genuine, sincere motion addressing the governance of the House, but a cheap, opportunistic way of expressing the prejudice of Labour Members? They are anti-business, anti-enterprise and anti-aspiration, and they would trash the economy if they ever got their hands on it again.

[Mr Hague]

I agree with all of that; my right hon. Friend spoke extremely well.

[Andy McDonald (Middlesbrough) (Lab)]

Is the Leader of the House aware of Government Ministers putting the emoluments from outside directorships into trust so that they escape any scrutiny, and if so, is he content with those arrangements?

[Mr Hague]

There are very clear rules about all that—rules not only on the declarations of Members of Parliament but on ministerial interests. Those rules are very rigorously observed and enforced, in my experience in government, and I hope that they have been under Governments of all parties. Transparency about ministerial interests and the interests of people who have left office as Ministers has been greatly strengthened in recent years. This is not a static situation; constant improvements have been made.

[Duncan Hames (Chippenham) (LD)]

If the Leader of the House were to have a change of heart, I am sure that he would be warmly welcomed by the Conservative association in Kensington. Does he agree that if we are concerned to establish, and to give the public confidence in, the independence of MPs in serving the public, then it is not just their earnings that are of relevance but the source of all financial support they have, including that which goes towards their re-election?

[Mr Hague]

That could be a valid point, and I want to address it in closing my speech.

[Karl Turner (Kingston upon Hull East) (Lab)]

rose—

[Mr Hague]

I will try to fit in the hon. Gentleman before I finish.

There are two other revealing aspects of this motion. First, the Opposition make the proposal now, when the issue is in the news, but have done nothing to enforce it in their own party in the meantime. Labour Members—I make no criticism of them for this—are directors of building supply companies and investment companies, and non-executive directors of mining companies and breweries. They are paid as everything from expert advisers to executive mentors, no less. It must be nice to be an executive mentor. Does an executive mentor fall within the definition of “director”?

[Ms Angela Eagle]

rose—

[Mr Hague]

Perhaps the hon. Lady could clarify that.

[Ms Eagle]

To make it clear again, the parliamentary Labour party will change its rules and its standing orders so that from the start of the next Parliament no Labour MP will have remunerated directorships or consultancies. All our candidates and all our existing Members of Parliament will have to change their arrangements in order to comply with this change of rules. Will the right hon. Gentleman now commit to his party doing the same?

[Mr Hague]

No, as is very clear from my speech. I have made the point that the Committee on Standards in Public Life made. The hon. Lady has said what the Labour party will do in the next Parliament, but I hope she will admit that she has to deal with the points I have been making about how to define these responsibilities, because they are not dealt with at the moment. There is no clear answer from the Opposition even about what their policy is.

[Several hon. Members]

rose—

[Mr Hague]

I will give way two last times. I promised to give way to the hon. Gentleman, and I will then give way to one of my hon. Friends.

[Karl Turner]

The Leader of the House has been very generous in giving way. He made a point that he thought was funny—frankly, the electorate would not think it was funny—about the former Prime Minister Jim Callaghan. My hon. Friend the Member for Middlesbrough (Andy McDonald) made it clear that Ministers, which would of course include the former Prime Minister, have to put directorships into trust while serving as Ministers. The right hon. Gentleman’s point was not funny, and it was not correct, was it?

[Mr Hague]

Yes, it was correct. It is not for me to say whether it was funny; others will be the judge. I was making a point about the Opposition motion. If such a motion is so easy to make fun of, it may not have much chance of being a serious policy. The public would not find it funny if we adopted rules that could not be enforced, were confusing or damaged the future of Parliament, which is the central point.

[Mr Raab]

rose—

[Mr Hague]

Let me give way to my hon. Friend. This will have to be the last intervention.

[Mr Raab]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests. My interests all relate to writing columns for newspapers and suing one of them.

Is it my right hon. Friend’s view that the definition of consultancies would include drawing a six-figure salary for being a BBC guest presenter? It would, first, relate to public money; and secondly, hardly draw in outside experience from beyond the Westminster bubble.

[Mr Hague]

Whether that would come under the definition of consultancy is another interesting question for the Opposition to consider. They have to define such things if they are to present their policy more clearly. I hope that they will be able to do so the next time they present it.

The final revealing point about the Opposition motion is that it talks about some forms of outside income, but as my hon. Friend the Member for Chippenham (Duncan Hames) has just said, it does not address the direct influence on Members of trade union sponsorship and support at elections and between elections. If the Labour party gains more seats at the coming election, it will have to address that issue at the beginning of the next Parliament. For the 106 target seats it has named, it has selected 105 candidates, of whom 83 are union linked, including 49 who are linked to Unite. It is by far the greatest single outside influence on Members of Parliament —securing their selection as candidates, supporting their election as MPs, paying for their election, dictating the policies of their party—yet they are breathtakingly silent on that issue. We would not enhance the reputation of Parliament by adopting a motion put forward in a hurry to grab a headline, but which does not address that fundamentally important issue about our Parliament and democracy.

[Several hon. Members]

rose—