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Conduct Committee Report

Volume 808: debated on Wednesday 2 December 2020

Motion to Agree

Moved by

That the Report from the Select Committee Registration of members’ foreign interests (7th Report, HL Paper 182) be agreed to.

My Lords, we are ready to start if the noble and learned Lord could unmute. I do not think that he can hear.

My Lords, I should start by explaining that I am moving this Motion as a member of the Conduct Committee on behalf of my noble and learned friend Lord Mance, because this particular report raises matters in which he personally has interests and has therefore recused himself from deliberations upon it.

This report builds upon an earlier report that the House approved in July about Members’ dealings with foreign Governments. It is, indeed, the latest in a series of changes that we are proposing to the House in order to increase transparency around Members’ overseas interests, reflecting increasing levels of concern about foreign state influence on our politics. Not least, your Lordships will recall, such concerns were raised by the long-awaited ISC report in July. After a good deal of deliberation, the committee is now proposing that Members should be required on an annual basis to disclose their earnings—I quote paragraph 9 of the report —from

“governments of foreign states (including departments and agencies), organisations which may be thought by a reasonable member of the public to be foreign state-owned or controlled, and individuals with official status (whether executive, legislative or judicial) in foreign states when acting in that capacity”.

One of our key challenges was to find such a definition that properly caught all that we wanted and thought we needed to capture.

Although the registrar may be consulted, Members will be responsible for judging whether an organisation or individual in fact meets that definition. In case of doubt, they should err on the side of registration. Members will be able to disclose the exact amount that they have been paid or simply indicate into which of the several bands set out in paragraph 12 of the report their earnings fall.

The committee is aware that in some professions there is a clear duty of confidentiality that would prevent some Members from disclosing all the information required. Obviously, they may include doctors, arbitrators or perhaps other lawyers. Rather than try now to come up with a definitive list of such professions in the code, we propose that Members should apply for an exemption as far as necessary. To do that, they will be asked to consult the registrar, who will provide advice on the basis of detailed guidance, which we, the Conduct Committee, shall give him. The committee is currently drawing up such guidance, with a view to publishing it early next year.

If the House agrees this report, the registrar will email Members to explain these changes, which will then take effect from 1 January 2021. Registerable earnings between then and the end of the financial year, 5 April 2021, would need to be disclosed no later than 31 January 2022. Registerable earnings in the next financial year would then need to be disclosed by 31 January 2023, and so on. All that is set out in paragraphs 10 and 11 of the report.

Finally, we propose also to add to the guide some cautionary wording for Members with regard to their dealings with foreign Governments and entities. Paragraph 17 deals with that. I beg to move.

My view is that all money received by Members of the House of Lords should be declared. This report tries to do what is virtually impossible, which is to lay down a code of conduct that, by its own nature, is vague. I have a number of questions.

As regards the guidance on dealing with lobbyists, the report states:

“Members should be especially cautious when coming into contact with representatives of corrupt or repressive regimes”.

The noble and learned Lord who introduced the report is a lawyer. He will know that the word “representatives” is certainly capable of challenge. What is a representative? What is a corrupt regime? What is a repressive regime? Is Hungary a repressive regime? If someone is in contact with a representative of the Hungarian Government, at what level does the rule apply? Is the ambassador of Hungary a representative of a repressive regime? This report is shot through with problems.

The next page covers the level of remuneration in respect of the interests falling within this category that need to be disclosed only where they are received from the Governments of foreign states. What do we mean by “foreign states” or “controlled by”? Is Huawei controlled by the Chinese Government, as is alleged by some, or is it not controlled by them, as is said by the Chinese Government? What about what I would call “parastatal” regimes—in other words, bodies that are set up at arm’s length by Governments such as the British Government to provide services? Is Serco a parastatal regime and company, or is it not? This is just not good enough.

On applying for exemptions, how will we explain to the British public that Members of the House of Lords can take earnings from organisations and not declare them? That is what this says: earnings do not have to be declared because of confidentiality. We can have confidential agreements made by legislators who can subsequently intervene on legislation, but there is no public record of that. It is not good enough.

My final point is about

“disposing once in respect of each financial year.”

If I visit Turkey, which I did not so long ago, I have to declare that within two months. Why, if we have this system, could someone earn money in May 2021 and not have to declare it until January 2023? Why the sudden difference? I do not think that this is acceptable.

I will not vote against the report because that is not the done thing, but I do not think that it answers the question that was put before it, which is to make the proceedings of this House and the activities of its Members more transparent. I am sorry to rock the boat again, but these things need to be said.

My Lords, I am grateful to the noble and learned Lord, Lord Brown of Eaton-under-Heywood. I have two points: both have been touched on by the noble Lord, Lord Balfe, but in a slightly different way. I have a query about paragraph 16 of the report which states:

“Members should be especially cautious when coming into contact with representatives of corrupt or repressive regimes, ensuring that they uphold the integrity of the parliamentary process and the reputation of the House of Lords at all times.”

That is a bit unclear—I am not sure what it means or who would make that decision.

My other point is on the paragraph about confidentiality, which might more appropriately be called exemptions. The noble and learned Lord might be able to help me to understand this. The report states:

“We are aware that in a small number of professions there is a duty of confidentiality”—

I can think of only one, which is the medical profession, and I am not sure whether the others might possibly be to do with the legal profession. The report goes on

“which would make it difficult for members to disclose the identity of the government”

but then proposes that

“members … would be able to apply for an exemption from the registration requirement.”

Does that mean that they would not have to register anything at all, not even having received any money if that was the case? I can understand that there might be an element of confidentiality, although I struggle to understand whether that is essential, but I do not see why that should completely exempt Members from the registration requirement.

I also have concerns about the personal services company element because I am not clear about how it will work. The report states that Members

“need to register the type of client involved but without naming the particular client in question.”

I am not convinced that that is 100% helpful to the House or to those looking at this, but my main question is who makes the decision. In paragraph 9 under definitions, it states:

“Although the Registrar may be consulted, members will be responsible for judging whether an organisation or individual meets this definition, and in case of doubt they should err on the side of registration.”

The noble and learned Lord, Lord Brown, helpfully said that the Conduct Committee will issue guidance for the registrar, but I am not clear who will make the decision that an exemption is appropriate. Given that exemption brings with it the opportunity not to make any form of registration at all or to provide any information, I would like some clarity on who will make the decision. If it is the same as in paragraph 9, which states that the individual Member can make that decision, that seems somewhat unhelpful to this House and to the issue of transparency.

I will not seek to divide the House or to vote against the Motion because it is an important step forward and there are a lot of areas in which the report is helpful, but I would like clarity on those points if the noble and learned Lord is able to give them to me.

My Lords, I am most grateful to the noble Lord, Lord Balfe, and the noble Baroness Lady Smith, not least because, if I may say so, they have effectively confirmed that there are real difficulties in reaching the necessary degree of definition in this highly complex area of our code—[Inaudible.]

My Lord, I am sorry, but we cannot hear you again. Could you try and press your unmute button? They are working on trying to get the audio back so we can hear you.

I apologise, although I do not believe it to have been my fault. As I was saying, the noble Lord, Lord Balfe, and the noble Baroness, Lady Smith, have established what we have long felt—that this is an extremely problematic area of our code on which we have deliberated long and hard to try to achieve these definitions.

On the main question raised by both speakers, of course there are difficulties in deciding whether a particular organisation is controlled by the Government. These matters are dealt with in Paragraph 9 of the report. But as the report is at pains to show, there are two guiding principles. The first is that what reasonable members of the public might suppose to be the position here, along the lines of Huawei and so forth. If it may be thought by the public that an organisation is foreign state-owned or state-controlled, there is a clear and categoric obligation to disclose that fact. However, there is always the power of consulting the registrar, so there is help from that quarter. There is also the enduring obligation that in case of doubt, a Member should err on the side of registration.

We have not felt able to be more specific than that. If anyone feels that they have a clear solution to this riddle, we would be delighted to hear it. In the meantime, we feel that this is the best that we can offer.

With regard to corrupt and repressive regimes, your Lordships will see that this was dealt with in an earlier report. Paragraph 1 of the report points that out. We are trying to help further, in paragraph 17. Of course, these are highly difficult concepts, but this is open to Members—and one hopes that they will avail themselves of this—to consult the registrar and, if in doubt, an obvious course would be to effect the registration. As to the date of earnings, we have tried to be helpful and to minimise the administrative burden on Members by taking the same date and concept for declaration of earnings as one uses for one’s tax returns annually, to 31 January—to do one’s earnings in relation to the tax year. That is why the first proposed registration is for 1 January to 5 April 2021.

I hope that deals with most points. Your Lordships will have seen that we continue to consult on this and deliberate in this field. On the question of guidance for the registrar, it is the registrar whose decision ultimately rules on the question of exemptions. Again, it is difficult to see how one could improve on that. To address a point made by the noble Lord, Lord Balfe, I hope this is not an absurd, fanciful and unhelpful suggestion, but if we assume that one of our enormously distinguished doctors in the House, who contributes greatly to the proceedings of the House, has as a patient some foreign head of state, Prime Minister or whatever, and is consulted by him professionally—that must surely be confidential. He cannot possibly say: “I’ve been treating that king for piles” or whatever it is. It would be a gross abuse of professional privilege and confidentiality. That is the sort of situation one could get into. Therefore, if you had this report without the possibility of exemption, you would require somebody such as that doctor to take leave of absence and cease to participate in the House. I am not sure that I can do any better than that. I fear that nothing I can say will entirely satisfy all the questions that such a report inevitably raises.

My Lords, I have listened carefully to the noble and learned Lord, Lord Brown. He has tried to answer, and he has hit the nail on the head when saying that it explains the difficulties. However, the committee must look again at two things that he referred to as a matter of urgency. This report takes us some way forward, but not far enough. The point he made about a medical person who contributes to the work of this House but who is treating somebody in confidence does not explain why there cannot be any registration at all. Surely the registration could be declared. The confidentiality of who is being treated might be an issue, but who makes that decision? That is the central point. At present, the person who makes that decision is the Peer. When we talk about exemptions, that is not acceptable. I do not intend to divide the House against the report, which takes us a step further forward, but there are inadequacies in it which I hope the noble Lord will take back to the committee and address as a matter of urgency.

We will certainly take back and consider all the points that have been made. On the substantive question that the noble Baroness raises, I have no doubt whatever that the Member would say that he practices as a doctor in a given field for clients internationally as well as at home. I do not know whether that would be regarded by her as satisfying that aspect of the register of interests. Subject to that, of course, we will look afresh in the light of all the helpful comments made by Members.

Motion agreed.