Standards Committee, 10 Feb 2004

Meeting date: Tuesday, February 10, 2004

Official Report 134KB pdf

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Members' Interests Order

The next item is on replacing the members' interests order. We have received considerable correspondence on the matter and we will have the benefit of the presence of members of the non-Executive bills unit, in case we require them. We are being asked today to decide in principle what we wish to do with the members' interests order. A number of options are available to us: one is that we will not proceed with a members' interests order; another is that we will accept the work that was done by the previous Standards Committee and proceed with its draft bill. We can start from scratch or we can revisit the subjects on which there was discussion—or at least those on which there was not unanimity of views—and consult on them. I throw the subject open to members to express their views. I welcome David Cullum from the non-Executive bills unit and Mark Richards from the Parliament's directorate of legal services, who are available to answer any technical questions that members have.

We should go ahead with our proposal to introduce a committee bill. It would be unwise to start from scratch, especially given that the previous Standards Committee did a considerable amount of work on the subject. All new members of the committee should want to consider carefully the previous committee's conclusions and the work that it did, which will help us. We might want to revise some of its proposals, but I suggest that we use that work as the basis for what we want to include in a committee bill, and that we use it as a helpful starting point rather than start from scratch. The clerks provided a helpful paper outlining a timetable for us. We have to be mindful that it would be helpful for the next session of Parliament if such legislation were in place. If we want that to happen, starting with a blank sheet of paper to reinvent the wheel will only delay us and will not be particularly constructive.

Is that suggestion agreed?

Members indicated agreement.

Are there any items in particular that you would like us to look at again?

There are quite a number.

To give guidance to the clerks and, indeed, to ensure that we get the support that we require from our legal advisers and the non-Executive bills unit, perhaps those views should be expressed now. That would be helpful for our preparatory work.

I will run through the main provisions. My first point relates to gifts. I have my doubts about the switch to a percentage of the MSP's salary, for presentational reasons if nothing else. It seems to me that if we have to register a gift that is 0.5 per cent of an MSP's salary, we will have to register something that is not a hell of a big gift. The public would understand a figure like £250, £500 or whatever much more easily than they would 0.5 per cent of an MSP's salary.

We have to remember that the bill has two purposes. The first is to ensure the highest standards among MSPs in relation to, in this case, gifts. The bill also aims to build public confidence in the standards of MSPs. Therefore, the easier that the bill is made for people to understand and the simpler it is, the greater the chance of achieving the second objective without endangering the first.

I am quite happy to lower the £250 figure although it is not a huge sum of money. A figure such as that is easy for people to understand. There is also less chance of members accidentally not registering a gift if they know the exact monetary value of gifts that they have to register instead of an amount that is a percentage of a figure that is in itself a moving target.

My second point relates to interest in shares and is a question rather than a point. Obviously, and quite rightly, we are interested in shareholdings that might influence our decision making. However, if I am the holder of a Standard Life policy that has a with-profits bonus attached to it, I have as much financial interest in what happens to Standard Life as I would in Marks and Spencer if I were a shareholder of that company. I understand that the provisions, as they are drafted, would not cover my interest in Standard Life because technically it is not a shareholding as I am part of a mutual organisation. However, if we are asking for details on shareholdings, is there not also a need for a broader definition?

My question arises because we are discussing the matter at a time when issues such as the mutuality of Standard Life are at stake. I am a Standard Life policyholder. Although I will vote against demutualisation, I will be a beneficiary if Standard Life demutualises. As I understand it, under the provisions as they stand, I am not required to record that interest. That seems a bit unfair.

Can I stop you at that point, Alex? Are you looking for an answer or some advice on those points?

I am just raising them as issues that need to be addressed.

Okay. That is fine.

My next point relates to election expenses. It seems to me that the rules that the Electoral Commission imposes on all parties more than adequately cover the question of election expenses. I do not think that any additional bureaucracy that we suggested would add anything to the subject. We would not find out anything that the Electoral Commission does not require us to declare at the moment.

The final couple of points relate to future interests. I have to say that the proposals could be difficult to implement.

So do I.

Absolutely. Quite frankly, I do not see how anyone can be asked to predict a future interest. If a member is also involved in a business that they are conducting legitimately, openly and transparently, it is clear that the business has to trade. For members to have to declare anticipated activities would be a complete breach of their commercial responsibilities. If they are a director of the company, theoretically it might even breach the requirement under the Companies Acts to act in the interests of the company. This whole section of the paper is a nonsense and should be deleted.

My final point is on whether interests that are disposed of by members shortly before their election should be registrable. I do not think so because, quite frankly, that is an intrusion too far. Where do we stop? How far back do we go? The whole issue becomes absurd. Not only that, if we are going to do that, why not then register interests for, say, two or three years after a member leaves the Parliament, because who is to know whether an MSP, knowing that they were going to retire, did something that they would benefit from six months, 12 months or two years later?

If we open it up to the period before someone becomes an MSP or after they stop being an MSP, the whole system becomes unimplementable, and if it becomes unimplementable, it becomes incredible, which is the last thing that we want if we are trying to achieve our target of public confidence in the system.

Do you think that we ought to examine those issues?

Yes.

And should we consult on them?

Absolutely.

I have a couple of words in support of Alex Neil. He spoke of the need for the public to understand and for there to be absolute clarity about this issue. The gifts paragraph states:

"The draft Bill proposes that Members be required to register gifts in excess of 0.5% of an MSP's salary if they are received in connection with their Parliamentary duties."

That is a subjective judgment that individual MSPs will have to make. I do not argue against the need for a bill, but it must not include things that require subjective judgments by MSPs.

Similarly, I agree with Alex Neil that the section on future interests should be deleted, because it talks about

"where there is ‘a reasonable expectation'",

but who is to say what is a reasonable expectation? If we are to go down this route, let us focus on absolute clarity so that the public have confidence in the system.

I have considerable reservations about the registration of spouses' or partners' interests. Why stop there? Why not include mothers, fathers, grandparents, children or cousins? I do not understand why we should stop at spouses and partners. I may return to those reservations when we discuss the bill.

One question that I would like to be answered is whether a legacy is a gift.

At this stage we are deciding whether we will go down the bill route, and which questions we wish to be answered. Your question is reasonable.

I do not disagree with the points that have been flagged up, but I think that the reason why we refer to 0.5 per cent of an MSP's salary is to ensure that the legislation is always current and reflects any changes to MSPs' salaries over the years. Could the bill be worded in such a way that a figure is indicated along with whichever percentage, so that flexibility is built into the system to reflect any changes over the years and ensure that we do not have to revise the legislation constantly?

Perhaps that could be done by regulations that require publication of the figure on an annual basis.

Or at the start of each session; 0.5 per cent of the difference between the salary at the start of a session and the salary at the end of it would be negligible. The irony is that because of even limited inflation of 2 per cent or 3 per cent, with a figure of £250 the reins are tightened over the four-year period. That works in the right direction, as far as public confidence is concerned, and it keeps it simple for people to understand.

We are now getting into a debate that we do not need to have now. However, Karen Whitefield's point is valid.

I welcome Alex Neil's comments on the success of the Labour Administration in keeping inflation low during the past few years—which is why we are having this discussion. We could not have had this discussion under previous Administrations.

For the record, I did not say that.

It was implicit in everything that you said.

We all have different points of view on the merits of the key elements of the bill, but the question is which ones we should be discussing and when.

Can I ask those who advised on the production of the draft bill whether there are any technical points that they feel that we ought to bear in mind while visiting the issues?

I note that the background material on the standards commissioner for the National Assembly for Wales refers to criminal defences in relation to breaches of the order. I note that we are advised that including such a defence might be technically difficult.

Is there anything that you want to share with the committee at this stage?

Not at this stage. You highlighted the fact that the criminal defences issue that the previous committee was keen on addressing in the bill is difficult, to say the least. There is certainly the question whether putting such a provision in a bill might be a modification of the Scotland Act 1998, which is not permitted under that act. That would appear to be a barrier.

There might be other issues, but none of them would be insurmountable. There are matters on which the committee might have to make policy decisions, but none of those would stop the committee from proceeding with its policy intention.

Would I be right in saying that it is the committee's view that we should go ahead with the bill and that we want to reconsider a limited range of issues, including all those that were in the clerk's list? I do not think that any fresh issues were brought up today. Does the committee agree that we should try to adhere to the timetable?

Members indicated agreement.

The only issue that no one has touched on—although I suspect that we or those whom we consult will—is the issue of non-financial interests. That provoked a certain amount of discussion during the previous parliamentary session but I assume that we will revisit that issue to give new members of the committee and of the Parliament an opportunity to express a view on that, and to allow the wider public to give us their advice.

There is one other minor issue that the committee will have to consider. At the moment, the bill deals with paid advocacy and it contains an exemption for work on members' bills and on amendments. The committee might want to think about whether that provision is wide enough and whether the same exemptions should apply to, for example, dealing with statutory instruments, and whether there is anything else of that ilk that should be exempt.

You are talking about paid advocacy for any legal process, not just members' bills.

There might be other areas that members will want to cover.

The committee will welcome any advice that you can give on that area so that we can investigate it properly and then put it out to consultation. If any members or our advisers have further thoughts, they should make them available to the committee clerk.

I thank David Cullum and Mark Richards very much for coming along and advising us today. No doubt we will be relying on you in the coming months as we try to get the bill right. I hope that we will get the bill to a point where it will be enacted in time for the next session.