Standards Committee, 21 Nov 2001

Meeting date: Wednesday, November 21, 2001

Official Report 142KB pdf

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Members' Interests Order

Agenda item 2 is our work on the Scotland Act 1998 (Transitory and Transitional Provisions) (Members' Interests) Order 1999. Today, we are considering a paper on the declaration of interests.

The first section of the paper examines the situations in which a member must declare his or her interests. The current legislation requires MSPs to declare relevant interests when participating in parliamentary proceedings. The paper asks whether MSPs should also be required to declare relevant interests when communicating with ministers, MSPs or civil servants outwith parliamentary proceedings, for example in correspondence. The rules at Westminster currently provide for that, but the committee may consider that such a measure would be disproportionate. We must also consider whether MSPs should be required to declare a relevant registrable interest to a constituent if the interest could be seen as prejudicing the member's handling of the constituency case.

We will tackle those issues before considering whether an MSP's participation in proceedings directly related to his or her interests should be curtailed. The floor is open to examine those points. I would appreciate hearing members' views.

Do we have to agree on the three bullet points in paragraph 6?

Yes.

The issues are not black and white. My inclination is that members should declare their interests. If they declare them in Parliament, they should declare them when they deal with others in writing. I am not clear how onerous the responsibility would be on MSPs, but I think that that is a practicable solution.

I disagree entirely with the idea of banning members from speaking or voting on matters from which they might benefit. There are already restrictions on paid advocacy. We should be against paid advocacy. Trying to define direct benefits could be tricky. The paper states that the Nolan committee of the House of Commons said that we should not discourage members of Parliament from having outside interests. So long as people declare their interests, that is sufficient. If a member feels that they are going to receive a direct benefit and that that benefit might affect their judgment, it is up to them to abstain from proceedings, rather than being banned from voting or participating.

Finally, on declaring relevant interests to constituents, if we declare interests in parliamentary proceedings, we should declare them in all circumstances, although I accept that the issue is tricky.

I refer to the narrative before the bullet points in paragraph 6. Partner libraries would allow the public to have access to the information.

The suggestion in the third bullet point is unwieldy. We should not presume that members can declare relevant interests to constituents when dealing with a constituency case because, on first impressions in some cases, there is not an understandable connection. That is not to say that members are withholding anything; they might not see the connection until later. A constituent could say later that a member did not mention something the first time that they met. The suggestion is fraught with so many complexities for everyone concerned—not just the member—that it is just daft.

On the second bullet point, I believe that members should declare their interest in an issue from which they might benefit. That would make proceedings more transparent and would allow members to observe how they argue and how they conduct themselves when discussing that issue.

Local government often discussed whether a councillor who was a tenant should vote on fixing rent increases, as it was demonstrably in their interest not to go for such an increase. The suggestion that those councillors should not vote was a daft scenario. It would have excluded many people from the decision-making process. I therefore oppose the suggestion that members who might benefit from proceedings of Parliament should not participate. There would be an army of lawyers defining potential benefit and there would be an industry making money from that.

I do not have a strong view on whether we should be required to declare interests outwith parliamentary proceedings. I would need to hear more discussions on that, but I have made my case clear on the second and third bullet points in paragraph 6.

There is a danger in being too prescriptive. I agree with what Frank McAveety said. It would be ludicrous to say that a miner would not be allowed to vote on or talk about mining issues. A miner would know most about that subject. Parliament would be deprived if a miner, farmer, accountant, lawyer or representative of whatever profession were not allowed to contribute.

Are we saying that it would be too cumbersome to declare interests outwith parliamentary proceedings?

I was trying to argue that if interests are already registered—as the narrative of paragraph 6 states—that is legitimate. Members could fail to declare an interest because of volume of correspondence, carelessness or accidental omission. Someone who is tenacious might then ask why we did not mention it. If we accept the suggestion that we declare interests outwith parliamentary proceedings, the matter would become more of an issue than it should be. The interests are on the public record already.

I am inclined to agree. The suggestion is too cumbersome and it would lay us open to all kinds of problems if we did not mention an interest because we forgot or it did not seem relevant at the time. If the interest is registered, that should be sufficient.

I do not think that there is any support for the suggestion that a member be prevented from voting or speaking on a matter from which they could benefit. I think that we should leave it open for people to participate in voting.

We would lose a lot of expertise if we did not allow people to speak on the subject that they knew most about.

We move on to paragraph 8, which is on determining a declarable interest. I refer particularly to the bullet points, which ask:

"? Should the Committee's proposals for replacement legislation set out how the test for determining whether a Member has a registrable interest should be applied? Should the requirement to declare be limited by reference to the Member's state of knowledge?

? In determining whether a Member has a declarable interest, how far should the Member be required to research organisations/individuals with which he/she holds a registrable interest?"

We have experience of those issues. I am interested to hear members' comments on those points. Should the test be a test of reasonableness? That is a difficult question.

I am even less clear about this matter than I was about the previous issue, particularly in the light of the case that we have dealt with. Although the member concerned held the view that there was no connection in that case, others may have seen one.

If a member has a declarable interest or an involvement in a company, they should make it their business to know exactly what that company is about. However, many large global companies have interests that extend far and wide and that vary from time to time, and members cannot know about them all. That is a tricky commitment, and yet the defence that a member did not know is not plausible in certain situations. Ignorance is no defence in many cases.

If one were an extensive dabbler in the stock market, how could one know whether one was engaging with certain shareholders? Incidentally, I do not dabble extensively in the stock market.

You disappointment me.

One could even pursue an ethical investment strategy that did not turn out the way that one wanted it to. People should declare the companies that they work with, but a company's offshoots could end up being involved in things that the investor did not appreciate that they would be involved in and would not have known about at the outset. Why should the investor be culpable in that context?

It is important that people know whether members who speak on a subject have a declarable interest in that area. Members should be aware that that is the important part of the debate, as opposed to having to go through Companies House to investigate the connections between organisations, which places an unfair burden on members.

I was going to raise the issue of investments. Quite often, people have no idea what they are investing in. For example, unit trusts can involve a range of different investments. It would be impossible to police that.

I agree with Ken Macintosh that the test should be one of reasonableness and common sense.

I get the impression from members that they want to stick with the current rules rather than change them.

I suggest that changing the rules would be too difficult. The test is one of using our judgment in relation to each member's circumstances. I would be happy for the adviser, the commissioner or the committee to decide the merits of each individual case and to apply our judgment to such cases.

Using a test of reasonableness?

Exactly, rather than trying to define, in a members' interests order, something that is extremely difficult to define. We should leave it at that.

Do members have comments on any of the other issues that are raised in paragraphs 7 and 8? Are members content with that section?

Members indicated agreement.

The final section of the paper deals with ceased and future interests and details the recommendations made by a working group of the consultative steering group and the rules at Westminster, Cardiff and Belfast. Should members be required to declare relevant ceased interests? If so, how far back should he or she go? The members' interests order is silent on that point, but the code of conduct suggests that members should consider the issue. Should members be required to declare future or expected interests?

Let us imagine that a member has been asked to become a company director in the private sector—the announcement is about to be made and the member knows that they are going to be appointed. If that member speaks in the chamber in a related debate, an interest should be declared, in my view. However, if they are merely under consideration for such an appointment and have no idea whether an announcement is going to be made, the situation is different. This is a grey area. I think that a member would be wiser not to speak if they knew that they were under immediate consideration for such an appointment. The requirement to make a declaration should apply only to those who know that they are going to be appointed.

When I first read the paper, I thought that the provision was slightly daft, although I am someone who lives in hope, rather than in expectation, of such an appointment.

Just like me.

Exactly.

I was quite taken by the quotation in paragraph 11, which comes from the House of Commons code of conduct and refers to the definition of when "reasonable expectation" exists. It makes it clear when a member has a real interest to declare and it is a reasonable test to apply. On that basis, we should declare express interests.

On ceased interests, the 12-month rule—for when an interest comes off the register—is fine. However, proportionality is again an issue. If an interest was major, such as a financial interest, the fact that it expired 12 months ago does not necessarily mean that it is no longer perceived as an interest. Again, members should apply a test to their own interests. If they have a previous declared interest that was major, they should continue to declare it for the duration of the parliamentary session. After that there should be a threshold, after which events and payments that happened years ago should no longer be declared.

The key is the word "relevant" in the phrase "relevant ceased interests". Members should instinctively know what is relevant regardless of how long ago it was. They should know whether an interest will colour their judgment.

Do we have examples?

I suppose that if a member had received a gift, say, 18 months before the occasion from which the interest issue could arise and he or she had taken that entry out of the register, they might want to consider declaring it, if it was a substantial gift. The current rules as expressed in the code basically leave it to the member to consider whether he or she wants to declare a ceased interest.

Probably much of this discussion is about grey areas and that is why it is difficult to have a hard and fast rule. However, it is worth sustaining the rule. The phrase "future and expected interests" is right because that is important in terms of consequences.

I love the line in the House of Commons code of conduct that says:

"Where a Member's plans or degree of involvement in a project have passed beyond vague hopes and aspirations and reached the stage where there is a reasonable expectation that a financial benefit will accrue".

That is a lovely way of saying that you are getting paid. If that is the case, we should leave a reasonable test to suggest that.

I support what Frank McAveety has said. My recollection is that, in the House of Commons, most members did not declare relevant ceased interests. However, if the relevant ceased interest was a huge one, it would probably come out because someone would raise it. Generally, most members did not mention minor ceased interests.

That is reasonable.

Are members content with that?

Members indicated agreement.

We will take on board the issue about future interests. When we next meet to consider the members' interests order we will consider a paper on paid advocacy.