Conduct Committee

Viscount Goschen Excerpts

Tuesday 20th April 2021 Lords Chamber

[Viscount Goschen (Con) [V]]

My Lords, I start by declaring my interest as an employee of a large multinational executive search and consulting company. In that capacity, I work alongside the boards and leadership teams of a range of corporations and organisations, primarily supporting them in the appointment of board members, chief executives and other senior executives.

I fully support the declaration of material interests in the register and in the Chamber when addressing the House. The proper declaration of interests is an important part of the structure that provides transparency, gives the public confidence in their lawmakers and protects the integrity of the House. Furthermore and specifically, I, along with the rest of the House, take extremely seriously the spectre of influence by foreign Governments, be that perceived or actual. I therefore welcome the vigour with which the Conduct Committee has approached the issue. I should state that the great majority of the work that I undertake is for publicly listed or privately owned companies and not for government-owned or controlled organisations. The specific effects of these measures on me personally would therefore be extremely limited indeed.

However, the reason for my contributing to this debate is that I am concerned about the direction of travel that the House is taking regarding the declaration of Members’ interests. It is a central tenet of this place that we are an unpaid House, unlike another place. Members are not salaried, although an attendance allowance is available to those who wish to claim. It is therefore important, if we are to avoid a membership consisting solely of those who do not need to work or who are retired, that Members should be able to conduct their legitimate professional activities, provided—this is important—that those activities do not conflict with their duties to Parliament.

If the measures before the House today were to be seen as a precedent, it would then extend in future to commercial as well as governmental clients, and I can see very major problems indeed. I would draw a very clear distinction between, on the one hand, lobbying activities, which are particularly sensitive, especially those undertaken through some sort of personal service arrangement, and, on the other, entirely commercial activities, which have really very little bearing on public life, if any at all, and the business of Parliament. Although the experience I have is in a relatively specialist consulting field, the implications would be very similar for activities such as investment banking, for example.

In my own field, having a requirement to publish the identity of one’s clients, and, indeed, fees charged, sounds superficially attractive as a governance measure. But the consequence would be the imposition of a serious obstacle to the ability of an individual to undertake his or her legitimate business, and in the commercial example, the transparency benefit would be minimal. I will take these points in turn.

First, the very fact that a firm has been commissioned by a company such as the one for which I work, together with the identity of the consultant managing an assignment, could be very sensitive information in the public arena to that client, both internally and externally, particularly in the context of a listed company, where, quite rightly, there are very strict legal governance requirements regarding the disclosure of sensitive and privileged information. If, faced with a choice between a firm whose involvement would have to be declared and one which would not, it is straightforward to see what the outcome would be.

Then there is the question of the quantum of fees; there are a number of arguments around this field. The first, in my mind, is that there is a world of difference between the fee that a corporate consulting company is paid and the remuneration that an individual employee may receive; it is a complex issue. The second is that the quantum of the fee may give a strong indicator as to the type of assignment being undertaken, which may well in itself be confidential. The third point is that this would be revealing highly commercially confidential information to the great disadvantage of the firm making that disclosure. The fourth is that the client itself may find that sensitive, specific information.

We must tread carefully here, and we should err on the side of caution, and disclosure, where that would help maintain confidence in the integrity of the House, which is its most precious asset. However, we should also be cautious not to set in train a disclosure regime that could prevent legitimate commercial activity with nothing whatever to do with Parliament or national debate. I feel that the emphasis should be on ensuring that Members do not take on work which would compromise them, their reputations or that of this House, in particular with regard to foreign Governments. I do not feel that disclosing a questionable relationship should give any sort of cover whatever, and Members should exercise and demonstrate their own judgment, and act on their personal honour.

There is danger in overdisclosure, and I am concerned that the really important issues may get hidden behind a swarm of irrelevant disclosures. My noble and learned friend Lord Garnier has done the House a great service by having the courage to raise these issues and bring to its attention that there could be significant unintended consequences of overprescriptive regulation.

I think the House should understand clearly that to adopt this measure would essentially mean that people in the type of environment that I am in would not work for foreign Governments. That is fine and I fully accept that but, if that measure were extended to commercial clients, the implication is that people in a consulting and, very possibly, a legal environment would not be able to undertake commercial work. It is very important that the House realises the consequences of what it is adopting.

The ship has sailed in the sense that we have asked the committee to go away and consider these matters and it has reverted to the House, having heard representations, including from me, and given its judgment. I support the thrust of what my noble and learned friend Lord Garnier is trying to do, but I think that that ship has now sailed. However, we need to keep this under close review and should be very cautious about putting forward a situation which means that Members cannot undertake commercial work.