Politicians and their money: 2 The House of Lords
Recently I described my long expedition in search of ex-politicians’ money, especially Lord Mandelson’s, and its fruitless start in the barren fields of ACOBA (the Advisory Committee on Business Appointments).
Having learnt nothing from ACOBA, I turned to the Register of Lords Interests. Mandelson’s entry did not reveal anything about his earnings or the clients who provided them. Nor was it required to. Unlike MPs, peers do not have to give any indication of the scale of their outside earnings or reveal any specific clients to whom they give politically relevant advice. Mandelson’s entry lists him simply as Chairman of Global Counsel LLP (described as a “strategic advice consultancy”) and Senior Adviser to Lazard Ltd (described as an “international financial advisory firm”). It adds the directorship of a company which handles his public speaking and writing commitments, but again gives no indication of how much he earns from these or from whom. Mandelson also declares a trip toChina and the unpaid Presidency of Hartlepool Football Club.
I emphasize that this declaration is in no way inadequate or improper. It is simply one of many demonstrations that the Lords rules about registration of interests, and their general Code of Conduct, are of no value to the inquiring public. They are pernickety about inessentials and relaxed about vital issues. Peers are therefore required to list gifts of £500, and honorific appointments, but they do not have to list the people or companies who might be paying them hundreds of thousands of pounds for advice, and giving them a lifestyle which would otherwise be unobtainable.
Like ACOBA, the House of Lords is happy for politicians to go into business (and vice versa). Its Code and its rules on registration and declarations of interest refer approvingly to the experience and expertise which peers can contribute from business and other activities outside Parliament. Indeed these come close to suggesting that the House is lucky to get them. It is worth remembering that all peers get a Writ of Summons. In beautiful ancient language it reminds them that their first duty is to be counsellors to the sovereign on weighty affairs of state and imminent perils. They are asked to attend the House “waiving all excuses”. Arguably, all peers who receive the Writ should give the House and its business priority over their outside lives, and peers with valuable strategic or other advice to give should offer it to their sovereign and their Parliament rather than selling it to outsiders.
The Lords rules are especially muddled about peers being paid for political advice. Rule 8 of the Code of Conduct puts an absolute and lifetime bar against peers taking any money to exercise parliamentary influence or for providing parliamentary advice or services. Rule 14 says that they cannot act as paid advocates in any Lords proceedings (which would include committee work or questions as well as legislation.) They are allowed to carry out “the types of services … falling under the broad heading of public affairs advice and services”. That would suggest that peers can get paid for lobbying on any issue, unless and until it comes to the House of Lords in any form. (So if you want to stop a peer from lobbying on an issue, try to persuade a rival peer to table a Lords Question about it.)
If peers do give public affairs advice, paragraphs 57-59 of the guidance to the Code tell them to declare all their individual clients. But there is no definition of “public affairs”, and if any peers decide to call themselves a “strategy adviser” instead of a public affairs consultant they do not have to reveal any clients.
The House of Lords does not define “strategic advice”. It might care to ask itself why hard-headed people and businesses in the toughest of times would pay a bundle of money to any of its members – not for fluffy “strategic” advice but for advice of direct commercial value. That might mean professional advice from peers with a recognized qualification. But for peers whose background is exclusively in politics and government, it is more likely to mean the know-how they have gained from office, especially knowledge which would assist clients in any dealings with governments, international bodies or regulators. Any such know-how was paid for by taxpayers and if peers are going to exploit this for their own gain, they should, in all decency, tell taxpayers where they are selling it.
Then there is paragraph 9 of the Code. Quoting the general principle of Integrity in public life, this warns peers against placing themselves “under any financial obligation to outside individuals or organizations that might influence them in the performance of their … duties.” If any peers become dependent on the income they receive from advising any client, they are at risk of a breach of paragraph 9. But it is up to peers to decide how they interpret this. The Lords Code does not guide peers on how much they can earn from any single source or when they should regard themselves as dependent on it.
My expedition through ACOBA and the House of Lords was a total failure. At a personal level, it satisfied none of my fevered but legitimate curiosity about the sources of Peter Mandelson’s money. But what do these bodies say about our political system? Taken together, their rules ensure that virtually anyone can pay for the services of ministers, or top civil servants or advisers, after they leave office, with the minimum of scrutiny or control. Ex-ministers and their paymasters can ignore without penalty any conditions which have been attached to their relationship. Any ex-minister who leaves the House of Commons can give advice through a company without telling anyone who pays for it and how much he or she gets for it. Ministers used to stay on in the House of Commons after defeat or retirement from government. Now they have powerful incentives to desert their constituents to make money.
If we continue with the present rules we will slide into the American system, where politicians and public servants move effortlessly between government and corporate life. If we want this, we might as well scrap ACOBA and let peers do what they please. If we do not want the American system, we need clear rules which get enforced, which allow us to know all those who have paid for an ex-minister or a peer or a top civil servant, what services they are buying and how much they are paying for them.