Let us move to the replacement of the Scotland Act 1998 (Transitory and Transitional Provisions) (Members' Interests) Order 1999. A considerable amount of material is before us, including a report on the consultation, in which we received 23 responses. That contrasts rather with the 54,000 responses that the Minister for Health and Community Care received in the consultation on a ban on smoking in public places. Perhaps the number of responses that we received reflects the greater priority that the public quite rightly give to the issue of smoking. Nonetheless, it is rather disappointing to have received so few responses and, indeed, that many of those came from a particular viewpoint. That said, we should be grateful that 23 people or groups took part in our consultation. Some of the comments are helpful and informative; they should help us to reach a view.
I am not particularly anxious to take further evidence, given that we have put the issues out for consultation and that we have received written evidence, which reflects a certain level of interest and a certain number of views. This is not the end of the story, because we still have to draft the bill, which will go out for consultation, so there will be plenty of room for debate and further evidence sessions on the bill itself.
We might need some clarification on that. The bill is a committee bill, the procedures for which are slightly different. It might be useful to receive some guidance from the non-Executive bills team on what exactly will happen next, after we have agreed what will go in the bill.
Standing orders require the committee to report to the Parliament and to obtain the Parliament's approval to draft and introduce a bill. The practice in relation to committee bills to date has been not to produce a draft bill for consultation, but to incorporate the decisions of the Parliament in the debate into the bill. The Parliament's decisions bind the committee. The committee cannot put matters in the bill that are not part of the report to the Parliament and thus part of the discussion. Similarly, the committee cannot miss things out that are part of the report to the Parliament. Given those two aspects, producing a draft bill would not achieve an awful lot, because, if the committee were then to change it, it would have to report back to the Parliament, have another debate and get permission to introduce a different committee bill.
I seek clarification. As I understand it, a bill is produced—I should not have used the term "consultation", because the bill does not go out for consultation. However, an ad hoc committee is set up and takes evidence. Therefore, there will be opportunities for people to make their views known and for the ad hoc committee to take oral or written evidence on each point. Perhaps I am wrong, but the ad hoc committee has the opportunity to amend the bill as it sees fit, after which it presents the bill back to the Parliament.
Yes, but stage 1 is truncated with a committee bill. No committee is set up to scrutinise the bill at that stage. The bill goes to the Subordinate Legislation Committee and the Finance Committee if appropriate, but it goes straight to the debate on the general principles at stage 1, after which the normal stage 2 amendment procedure occurs. The ad hoc committee that will be set up to consider the bill could, if it wanted to, take evidence, but it would do so at stage 2, not at stage 1.
In that sense, pre-legislative scrutiny primarily lies with us, although the ad hoc committee may listen to the views of outside people on the bill at stage 2, which would not normally happen with an Executive bill.
On none of the committee bills that went through Parliament in the first session was evidence taken at stage 2 by the ad hoc committee; the committees went straight to consideration of individual sections and amendments.
So if, on behalf of the Parliament, we wished external people to elaborate on anything that they had put in written evidence to us, or on areas that we felt we had not heard about but that we wished to hear about, it would be up to this committee to arrange that, as opposed to the ad hoc committee. Is your advice that that is the best approach?
I think that that is correct. In general, standing orders are written so that, in effect, stage 1 is carried out by the committee prior to the introduction of the bill.
I seek clarification on whether we are absolutely committed to introducing a bill, because I find it telling that we received only 23 submissions to our consultation exercise. That suggests to me that the vast majority of the population, bar 23, are fairly content with the current members' interests order. I am not convinced, having read the evidence that has been submitted, that there is a need to change it.
We must introduce a bill, because that is a requirement of the Scotland Act 1998. The act did not say that that had to happen in the first or the second session of the Parliament; it just said that it had to happen. Given that it was not possible to complete the process in the first session of the Parliament, we have a duty to do so now. What appears in the bill is, in the first instance, a matter for us.
Thank you for that.
I suggest that we address the questions individually and take a view on them—today, if that is possible. We can return to any of the questions on the way through, if we want to hear anything further. It is perfectly okay for us not to hear anything further; I am happy to be guided by the committee on that.
The gist of the responses is that MSPs should declare everything at all stages—in other words, that the threshold should be 0 per cent of an MSP's salary—but, to be honest, I do not think that that is practicable. Although I appreciated hearing that view, I do not necessarily share it. It reflects a cynical strand of opinion, which is perhaps based on a lack of trust in politicians. We must address that, but I do not think that we should start from the presumption that politicians are out to feather their nests. We should start from the basis that members' interests legislation is there to protect the Parliament's reputation and to promote its standards. There should not be a presumption that politicians take gifts willy-nilly, because I do not think that that is the case. The consultation responses express opinions, but there is no evidence to suggest that there is an underlying problem.
You have dealt with questions 1 and 2 at the same time, which makes sense.
I do not have a problem with what Ken Macintosh has just said. I think that 0.5 per cent of a member's salary is a reasonable figure, which would save the need to uprate continually. It is good to see the strong opinion that people have but, by and large, it is very much a minority opinion. Although we should not completely discount that opinion, it is argumentative rather than evidence based. I recognise the trouble that people have taken in giving us their opinion, but I agree with Ken Macintosh that the rational thing to do is to adopt the 0.5 per cent threshold.
Can either Ken Macintosh or Bill Butler explain why, if it is perfectly feasible for members who have a ministerial role to declare every gift, no matter its size, we should discount some gifts that are given to ordinary members? I accept that we might want some kind of threshold.
With respect, convener, it is still open to members to register gifts if they so wish. By and large, I think that it is reasonable to set the threshold at 0.5 per cent of a member's salary rather than require members to declare every gift, which might include, for example, the small memento that a member might receive for the opening of a tenants organisation's hall. If people want to declare every bunch of flowers that they receive—I have never yet been given a bunch of flowers—that is fine. However, being realistic and practical, I think that setting the threshold at 0.5 per cent would meet the requirement.
Bill Butler makes a fair point, but the reality is that ministers who receive gifts in the course of their duties are unlikely to be given a commemorative mug or a bunch of flowers on the opening of new housing association houses. Those are not the kinds of gifts that are being registered—
They are.
We need to get the balance right. I know that MSPs who feel that they should register something below the current monetary value—as I have tried to do—are unable to do so. If we make everything registrable, including those things that have no real monetary value, we might simply create difficulties and set up a bureaucracy that will catch out MSPs without achieving anything.
So your argument is that a 0 per cent threshold would be an unreasonable administrative burden on individual members who may fall foul of the legislation inadvertently and that the criteria against which we ought to be judging this is whether it is possible to corrupt or influence members' decision making through gifts and whether there is a perception of that because of the declaration process. Is that a fair summation?
I strongly agree with what Karen Whitefield has said. There is logic to the argument that we should declare everything from a postage stamp upwards, but I take the point that that would make every MSP vulnerable to somebody who spent half their time going through the register of interests and spotted that Bill Butler's first-ever bunch of flowers was not registered. We are opening up a whole can of worms that is completely unnecessary. Nobody is ever going to convince me that Bill Butler's getting a bunch of flowers is going to influence his vote one way or another. I may be wrong about that, but I very much doubt it.
You are absolutely right.
Therefore, a figure of 0.5 per cent is reasonable. I receive very few gifts for doing things. This evening, I will open a new village pub, which is a rare event in rural Scotland nowadays, and I may well be given a half-pint of beer for doing so. To expect that to be registered—particularly if I am given more than one half-pint of beer—would be asking an awful lot.
You need to be careful what you are saying. It sounds as though you are touting for drink.
We can take declarations far too far. I strongly back the figure of 0.5 per cent. As Ken Macintosh said, it saves our having to revisit the matter every year to determine a financial amount.
Why have that as a threshold rather than the figure that is suggested in submission 2 from the registrar of the House of Commons, which is 1 per cent?
The figure of 0.5 per cent corresponds most nearly to the figure that we use now. To my knowledge, nobody has complained about what we have just now.
Well, what we have just now is what was given to us in advance by Westminster. Westminster has reviewed the figure since and now has a different threshold.
Westminster is allowed to have a different threshold, but we do things differently here. We are talking about what is reasonable for us. I would advise colleagues down south—if they ever look at the figure again—to return to 0.5 per cent.
I take it that there is general agreement that the present arrangement is satisfactory and that the threshold should be 0.5 per cent.
That would be reasonable and transparent. I think that we should do that.
Hear, hear.
Are members content that we have dealt with questions 1 and 2?
Is the non-Executive bills unit quite clear about the wishes of the committee with regard to those matters?
Question 3 concerns a requirement to register overseas visits when the cost has been met wholly or in part by a UK public body, a European Union agency or a foreign Government. Do members have a view on whether we should change the current practice of registering those visits irrespective of that fact or move into line with other practices?
I think that we ought to register them and keep the status quo. It is transparent and is absolutely the way in which we should be going on this. I do not see the need for any change.
I am slightly worried about this rule. It has never applied to me—to be honest, I am not sure how many members it will apply to—but I worry about rules that are designed to trip us up rather than help us. The whole point of these rules is to help us in our dealings. There is no problem with gifts of any size being declared by any of us. It is a question of judgment in many cases and of ensuring that the public are aware and the rules are there to help us to make judgments. In this case, I worry that we might end up with a situation in which anybody who does anything has to register it with two or three people. The most important thing is that something is public knowledge; whether it is kept on our register or someone else's register is not so important. I wondered whether having multiple registrations was almost designed to catch people out. I do not feel strongly about it, but I like simple rules that are easy to understand and follow.
When I read some of the responses, I was concerned that some respondents did not understand the present arrangements or the implications of changes. I seek guidance from our advisers on what is required to be registered under the current arrangements and the implications of the removal of the requirement to register overseas visits where the costs have been met by other public bodies.
Under paragraph 7 of the schedule to the members' interests order, where a member has made a visit outside the United Kingdom, there are exceptions to the requirement on the member to register the visit. Those are where the costs
If members of the Parliament were invited to observe elections, which is fairly common, or were invited on a visit by the Organisation for Security and Co-operation in Europe or a similar body or another democracy foundation that was funding the activities, would members have to declare the costs? The arrangements that you just described would not exempt such visits.
Yes, unless the costs were approved by the parliamentary corporation before the visit took place.
It depends what the purpose of the register is. If it is to be completely open and transparent and if all international trips are to be covered, that is simple and clear cut. However, if it is to deal with the perception of influencing members, that is a different matter. How do members feel about that? Should we continue with the present arrangements, move to a more relaxed sphere or insist that everything be declared?
What we have at present is reasonable. Someone might not be asked simply to observe elections; a particular foundation might ask them to go—as I did in the convener and deputy convener's stead—to Berlin for one day to talk about standards. It is quite right that such a visit should be registered, because even though I was talking about standards, people might think that I was on a jolly to Berlin, which I certainly was not—it was not jolly; it was very serious. What we have at the moment offers a reasonable way of proceeding and we should stick to it.
Is that the view of the committee? I think that Mr Butler is proposing that there be no change. Even visits that are currently sponsored by other public bodies, such as the European Union, UK public bodies or foreign Governments would require to be registered. If the answer to question 3 were yes, Mr Butler would no longer be required to register his visit to Berlin.
The visit was paid for by the Parliament. It would not have to be registered under the new or the old rules.
No, it was funded by an external body.
A foundation. Actually, Ken, I went to Berlin in your stead. I am suggesting that we stick with the status quo. It is in the exceptional cases, where visits are funded partly or wholly by external bodies, that we still require to register. That is a sensible way of making sure that members are seen to be acting in a transparent and above-board fashion.
I have one thing to check, but it is not a big issue and it might not be fair on the clerks, although Franck David might know. Has there been any confusion or difficulty with people registering such interests?
No. The reason for asking the question is to consider removing some of the administrative burden when a visit is being sponsored by another public body or Government and it might be reasonable to suggest that there is no possibility of the member being influenced. I am quite happy to get some formal advice on that.
One of the issues would be the translation of such a policy into the legislation. Unless there were a generic term that covered the bodies that could invite an MSP without the MSP having to declare it, the bodies would have to be listed, or there would have to be some mechanism for approval; otherwise it would just be open.
So the present arrangement is quite clear cut and administratively clear. If we were to change it, we would have to devise a set of criteria and an approval mechanism that would be transparent so that members of the public could check it.
Short of listing all the bodies that could invite MSPs without that requirement, there would have to be a mechanism for approval.
Thank you for that clarification. Is that satisfactory?
It certainly is.
In that case, I take it that the committee accepts that there is to be no change.
Some of the rules apply to members' families and to staff. Are we going to return to that at the end?
It comes up later.
I thought so, but I got lost. I do not want to go through the whole argument again if we are doing it at the end.
If you still have questions, I am happy to deal with them when we discuss question 18 in the consultation document. There was indeed a submission on how staff are dealt with, but staff have their own code. The question of families and spouses permeates the current code. If members want to see any change to that, they should indicate that as we are going through the questions or at the end.
In a word, yes. I cannot remember the case, but one member was inadvertently in breach of the members' interests order for a period of months while they were selling their house and buying a new one. We should not over-complicate things. This is about somewhere that has been a member's main dwelling and home but which is uninhabited for a temporary period while they are trying to sell it. It is a bit like the exemption in the rules for council tax on second homes. The rules are not designed to catch people out; they are there to help us to make judgments about what is an interest that we should declare and that may be judged to have an influence on us. I do not think that a member's own home comes into that category.
Are we talking purely about our own residential homes?
That is what I thought.
Yes—that is my understanding.
In that case, I agree with Kenneth Macintosh.
What about including a time limit on how long the situation might be ignored?
Could I ask whether David Cullum has a view on this? The Government recently issued guidance—but not legislation—on council tax exemption for second properties. It says that property that is unoccupied for less than 12 months, I think it is, comes into a certain category. That is not phrased in legal terms, however; it is just guidance for the benefit of local authorities. Would it be difficult to encapsulate that in legislation?
It would not be difficult to define a specific period, but it would be rather harder to deal with a floating period. Defining 12 months would be simple; if you wanted to relate the period to some other factor, it would be more difficult to get that into legislation. However, it might be possible to work something into the determinations.
We need to take a view on this. We do not have to express our final view today, but if we do not do so, we will have to revisit the matter at some point. Do any other members have views on exempting homes that are for sale? I remind members that the issue was drawn to our attention because of a particular circumstance that arose. Does anybody object to exempting homes that are for sale?
What is the present situation?
At present, if a member has two properties, they must register one of them. One of them will be their principal residence, which they do not have to register, but they must register any second property. In the situation that Ken Macintosh describes, in which a person has put up their principal home for sale, has bought a new property, has moved into that new property and is still seeking to sell the original property—now their second property—they should register that second property.
Which is what happened in the case that we are alluding to. That is why I know about it. That happened in the previous session. The member in question was inadvertently in breach. Sorry—in fact, they were not. In any case, they did sell the property in the end.
It depends on what test we apply. I think that the test is to be whether someone gains advantage or is perceived to gain advantage as a consequence of having a second home and being a member. I find it hard to see where there would be any advantage. I know that the present climate in the property market is still relatively buoyant, but some of us around this table will remember when it was not so buoyant. I think that a period of up to 12 months is quite reasonable. Are members content with that?
Are our advisers happy that it would be reasonable to draft the bill to reflect that?
Just for clarification, is the decision that we exempt the member's main residential home for a period of up to 12 months?
Yes—if it is for sale.
I think that it was me who flagged up the matter, because of my circumstances.
Indeed; I recall why it came up.
I am minded to accept a degree of banding, not because I want to cover up how much income any MSP gains from heritable property, but because I think that MSPs' tenants are entitled to some privacy. It is not their fault that they are renting from an MSP; they might have been renting from that person for many years before he or she became an MSP. There would still be an obligation to declare such an interest, but banding would offer some privacy to the tenants in question. We could introduce such a system without being seen to be hiding anything.
Let us have some technical advice.
It might be helpful to point out to the committee that although the draft bill that its predecessor committee attached as an annex to its report on replacing the members' interests order does not mention banding, it certainly allows for banding. The Parliament determines the detail of what is to be registered, but the committee would have input into that process and would undoubtedly be instrumental in deciding the policy behind the determination. However, that is a matter for another day if the committee is happy with the way in which the issue was dealt with in its predecessor committee's draft bill. The committee does not have to set out banding in any bill that it proposes now.
So if we were to use the existing draft bill, we would be able to offer the protection that we had in mind when we drafted our consultation, without having to specify the banding at this stage.
Yes. In effect, the draft bill would engage a registration requirement in respect of the second property—the rental property—the income from which exceeded a certain amount. It would not determine the detail of what should be registered, as that determination is made by Parliament. On the basis of the draft bill, Parliament could determine that registration should be made according to bands, which would mean that bands rather than figures would be specified.
Are you saying that the bands would be determined by secondary legislation? How would the Parliament determine them? The parallel would be ministers acting under regulations but, as far as I am aware, the Parliament does not have a mechanism for doing that. How would that happen?
It would need to happen through the Parliament approving the committee's recommendation on the code of conduct.
So the matter would come back for the committee to issue guidance.
Yes, indeed.
Are members content to proceed along the route agreed in principle that income should be declared but that it will be left to Parliament and, in all likelihood, this committee to determine whether and how it is banded, or would they prefer to see that set out in the bill? The disadvantage of setting all this out in the bill is that we would have to specify the bands and to put in place a review mechanism for them. If we have to establish such a mechanism, we are as well taking the advice that we just received, because it will need to be reviewed from time to time.
My slight quandary is that such an approach seems a bit indecisive and buck-passing, if I may use that expression. If we agree that banding should be introduced or that income should be declared on a banding basis, are we not better to grasp the matter and declare in the bill what we think the bands should be? Presumably, that would be open to amendment as the bill progressed through the parliamentary procedures. I have no great difficulties either way, but if we have decided to go down this route, why do we not just say so in the bill?
I am aware that, in drafting legislation, one should pay heed to those who have to deal with the consequences of the legislation. I think that I would like to hear again whether there would be any great problem with setting out the mechanism in the bill.
I do not see any great difficulty with setting the bands out in the bill. There would not necessarily be any need to amend them in future. If we had bands from, say, £1 to £5,000, £5,000 to £10,000 or whatever figure, they would probably stand the test of time. We could also have open-ended, incremental bands. Our slight reservation is that, in doing so, you would put detail into the bill when similar detail does not appear anywhere else. That said, what you suggest is perfectly doable. It would not present any drafting difficulties or any on-going problems with uprating, because I do not think that there would be any need to uprate the bands.
I do not want to put words into your mouth, Mr Fergusson, but are you looking for technical advice on how we could set out in the bill the principle of banding and then specify how that would operate?
I am sorry; I do not particularly want to make a big issue out of this. However, I do not quite see why we cannot grasp the matter. As for putting detail into the bill, we did not say in relation to question 1 that we should state the principle of having a percentage above which the value of gifts should be declared but then simply leave it to Parliament to decide what that percentage would be. Instead, we said that the threshold should be 0.5 per cent and that what the figure really means should be published annually. As I have said, I do not want to make a big issue out of this; if the correct way forward is not to specify the bands in the bill, so be it. However, if we are agreed that we should have a banding mechanism, I do not see any difficulty with setting it out in the bill.
Does the committee feel that the income that MSPs receive from heritable property ought to be declared but that, in order to protect tenants' privacy, the exact amount of income should not be published?
That is the committee's unanimous view. Is it the committee's view that the bill should lay out clearly the mechanism for achieving that? Do members want banding in the bill, or will we take the draftsmen's advice that we can achieve that through another mechanism?
We should take the draftsmen's—or draftspeople's—advice.
Are members content with that?
Yes.
That is fine.
I have one supplementary question. At the moment, the trigger for declaring rental income is any amount that is greater than £4,000. Is that figure to remain?
Would it help to express the amount as a percentage of our salary?
That would be roughly 8 per cent.
I suggest that £4,000 is a fairly substantial sum. To go some way towards recognising the concerns that have been expressed, the figure should be lower.
We have agreed to propose the principle of banding, and bands will be set later. It was said that the first band could cover £1 to £5,000—I suggest that that should be nought to £5,000. Banding means that we can leave the decision to later. The downside of all the banding is that those who wish to use the figures will always assume that an item in the nought to £5,000 banding is worth £4,999 rather than £10.50.
In effect, Mr Fergusson says that all rental income will need to be declared.
If it is unearned income.
We will not go for a percentage figure.
I am hesitant about the matter. I do not know how many people rent property temporarily or have a small rental income, but the rules should not over-complicate matters. The figures are arbitrary. Whether the threshold is £250 for a gift or £4,000 for rental income, it is arbitrary. Any figure could be plucked. We are just trying to obtain a figure that helps our judgment. Some people may rent property temporarily or have a small rental income. I do not think that we should include them; that is not the point of the legislation.
Some would suggest that £4,000 is not an insignificant sum.
Exactly—that is why £4,000 is the threshold. However, £4,000 does not represent a large annual rent for a property. How much is that per month? I am trying to work it out, but my maths is not quick enough.
That is about £330 a month.
I suppose that that is a fair amount.
It is £80 a week, which is quite a lot.
The threshold is quite high. If we are to have a threshold, it should be lower. We can have that or go along with the view that has been expressed fairly strongly that all rental income should be registered. I see no technical reason why we should not register all rental income. People are aware of having rented property. The chances of renting a property for one day for 10 quid are remote.
I agree. If we go for banding in principle, we can take the suggested approach. The figure is £4,000 at the moment, but we are saying that we agree the principle of banding. The advice that we have had is that it will be up to the Parliament to designate the bands.
That task may well return to us.
That could happen.
If we take Mr Butler's advice—
My advice echoes your advice, convener.
Fair enough. If we follow that advice, we can return to that point without delaying the bill. Is that correct?
Yes.
The question is whether or not we need a threshold.
We do not have to have a threshold in the bill, because if we adopt banding, the threshold of £4,000 will disappear. Is that correct?
It is entirely for yourselves to decide.
In that case, so that we can proceed, I suggest that we dispose of the threshold and leave it to the Parliament to determine whether to have banding and how it will be dealt with. That will be a matter that we will not have to deal with in terms of the members' interests order, but we have agreed in principle that we will offer to protect the privacy of individual tenants while extending the range of financial income that MSPs receive that will be in the public domain, although an exact figure may not be given. That is consistent with some other parts of the existing members' interests order, where other sources of income are banded. We will leave it to the discretion of the Parliament to determine what the bands might be. Is that reasonably clear?
It is still unclear to me. Are you saying that we could reintroduce a threshold? Or, if we agree that there will be no threshold, will there be no threshold?
The effect of that decision would be that there would be no threshold unless the Parliament decided to reintroduce one.
We started off by suggesting that the members' interests order has been working successfully for five years. There has never been an issue over the threshold in the past and I do not think that there is currently an issue over it; however, getting rid of the threshold might create issues and problems. We know that the threshold has been working at the level of £4,000, which I agree is a completely arbitrary figure that we might want to reduce or increase. Getting rid of it would not be helpful and could create anomalies and problems. Nobody has said that there is a problem with having a threshold, so there is no point in creating one.
No one has said that there is a problem with not having a threshold.
But we know, from experience, that the threshold has worked for five years.
I suggest that we resolve the issue here and now, rather than return to it. Mr Macintosh has moved that we continue with the threshold—does he have a seconder?
No.
That is democracy in action.
Absolutely.
In democracy, a threshold has to be achieved.
You are invited to record your dissent, if you so wish.
No, it is all right.
I did not think that you would. I thought that you did not feel so strongly about it.
Almost. We understand that the committee wants the minimum threshold to be removed. We could draft the bill in such a way that Parliament could reintroduce a threshold without the need for primary legislation.
Yes, is the answer to that. I think that is the view of the committee.
I wonder whether that is necessary. We have left the detail of the banding for further deliberation, and the detail of the banding could well reintroduce a threshold.
That is exactly what David Cullum is saying.
Sorry. I beg your pardon.
We are agreed on that, with the exception of Mr Macintosh—but that is neither here nor there.
When it comes to declaring an interest in shares, much of what we are trying to do is describe areas where a member's interests may have or appear to have an influence on their public behaviour. Many of these matters are private, and although we put ourselves forward for public office, we are still entitled to some degree of privacy. Determining where to draw the line between our private and public lives is difficult. We all agree that we abandoned some degree of privacy when we stood for public office.
Are you proposing the status quo?
The status quo has its weaknesses. On the question of market value and nominal value, if we use £25,000 as the threshold over which an interest in shares should be declared, market value is far more important than nominal value. The nominal value could bear no relation to the market value.
But market value fluctuates.
Yes, but we could have an annual declaration. I think we have one now, or maybe it is once every four years. However, we could have a duty to make a declaration annually, rather than every time the market goes up or down. I do not know if members agree with my suggestion that we need to frame the measures in such a way that we do not include pensions, mortgages and so on, because that is not the point.
That relates to question 8, on other forms of investment or financial arrangements, including mortgages and pensions, and some of the other interesting and innovative financial vehicles that are constantly being made available, but which would not necessarily lead to an individual MSP having influence over a company or having an interest in promoting legislation that will benefit that company. Are members content that we do not extend the range of financial vehicles that would be caught by the legislation? That would also cover question 7. Does anyone wish to express a contrary view?
As the only avowed capitalist on the committee—as I understand it, anyway—I can safely say that I do not have a stock or a share, so I do not actually understand half of those things. I think that the market value would have to be assessed on a fixed date every year, because it is my understanding that stocks and shares go up and down faster than yo-yos, if that is possible. Ken Macintosh has referred once or twice to simplicity and that share declarations must be kept simple if the system is to be workable. Should Bill Butler be fortunate enough to hit the dotcom bubble, it would be ludicrous to expect him to declare on a daily basis the differences that might come about. An annual date is the only way in which that could practicably be done.
I agree.
What would the threshold be? I may be in a minority on this point, but I suspect that there are technical problems around that point. However, I accept that that is not the majority view of the committee.
Indeed. They seem to work.
Do members have any concerns about an absolute value being placed on the threshold without including a mechanism for uprating or reviewing it? Would it be possible to put something into the bill that would allow a review mechanism in relation to the threshold value and the capital value?
The short answer is yes. We could, for example, say that 50 per cent of someone's salary was the threshold. That would make it simple.
Are members content with that suggestion?
That is a reasonable suggestion.
I think that we have arrived at a reasonably clear answer. Do we need to give you the date?
The existing date is 5 April, which is for tax reasons. Those who have shares do tax returns anyway.
That takes us to question 9. Are you content with the guidance that we have given you for questions 5 to 8? We are interested only in what is caught by the current legislation in terms of shareholdings, and we have agreed that we shall move from the nominal value to the market value, that the threshold will continue to be 1 per cent of the issued share capital, that we shall uprate the threshold for the monetary value on an annual basis, that that threshold should be 50 per cent of an MSP's salary, and that the assessment should be made annually on 5 April.
That is all fine. Can I just be clear on question 7, which is the definition of shareholdings? I understand that you want to exclude mortgages and pension-related holdings. Question 7 possibly goes a bit wider than that.
I asked the members whether they wanted to include Government securities, fixed-interest bonds, fixed-interest securities or unit trusts. I did not get any response other than that they are content to continue to exclude them on the basis that we discussed. Since they do not involve single companies, there is no prospect of there being a benefit to the member in terms of influence one way or the other. I take it that members share that view.
We move on to non-pecuniary interests. We had much more in the way of detailed response about this area; members have that before them. Almost all the concerns related to membership of organisations that might be regarded as secret. How do members feel about whether MSPs should be required to register non-financial interests? That is a rather wider concept than the narrow one that is taken from many of our submissions today, which relates to membership of the freemasons. How do members feel about that?
For clarification, is it correct that under the status quo it is the duty of any member to declare an interest, pecuniary or non-pecuniary, if he or she believes that that will influence their work as an MSP?
No.
That is not the case?
No. There is a series of specific things where members are required to register an interest. There is no general requirement to register financial or non-financial interests where there might be a public perception of influence or interest. There is no general principle. Some of the submissions before us would impose into the code an onus to disclose membership of organisations. However, the current code does not have that requirement. Rather than have me make that assertion from my safe position as convener, will our advisers confirm that that is right?
You referred to financial interests and I would take issue with that, but not to any great degree. The members' interests order requires financial interests to be registered where they meet the various thresholds set out in the members' interests order. There is no requirement to register non-financial interests.
Financial interests are only declarable when they are on the list in the code.
Yes.
Mr Fergusson's question related to the broad question of financial and non-financial interests where there might be a perception of possible influence.
To that extent, I agree with what you said. There is no requirement to register non-financial interests. There is a power to register them, but no requirement.
The current situation is that there is no requirement to register non-financial interests. However, we have placed a requirement on members of local authorities to do so. Elsewhere in the United Kingdom, there are requirements on people in public office—not necessarily elected office—to do so. If we continue not to have a register of non-financial interests, it might be perceived that we wish to retain more privacy ourselves than we allow others. I appreciate that there are two sides to the argument. Despite the detailed information that we sent out, we received a very limited number of responses. That suggests to me that—other than among a limited number of people—there is no great public debate on the issue.
We introduced a bill that required councillors to declare their non-pecuniary interests, so there is quite a strong argument that we, too, should declare such interests. It is a grey area. I do not think that it is a big issue, and I do not want to create problems unnecessarily, but there are certain organisations that some people are very concerned about. I do not think that we should declare our attendance at or membership of church groups or the Boys Brigade or the Rotary Club. However, the Ethical Standards in Public Life etc (Scotland) Act 2000 said that a person should register non-financial interests if other people might consider those interests to have an influence on the person. Would such a definition cover concerns about supposedly private or secret organisations, without covering the kind of voluntary community organisations that we are all active in, although not necessarily members of?
To be consistent with the requirements for financial interests, we would require non-financial interests to be declared if they might reasonably be considered
That covers the point that Mr Fergusson made. If something like that were included in the bill, it would put the onus on the individual.
We should proceed as the convener and Kenneth Macintosh have suggested. I think that we are in agreement that this is something that we should include in the bill, if only to engender discussion.
If we are to engender such discussion, it is a question of where, when and how. Given the advice that we received earlier, does the committee think that the matter should be left until stage 2 or ought we to resolve it before we produce a report to go to Parliament?
I do not think that I am in any doubt about people's views on the matter, in the sense that some people are very passionate about certain issues, particularly about membership of the freemasons.
One issue.
Yes, it is one issue, but people on both sides feel very passionately about it. I do not think that it has ever been an issue in the Parliament, but people feel very strongly about it. I am not sure how much further forward receiving evidence would take us. As far as I understand it, the issue would be covered by the legislation that we are framing. The legislation is not designed to pick on any one organisation, but it would cover the matter and it is fair to all.
My concern—it is why I raised the issue—is that I think that there should be an opportunity for those who might be affected by such legislation to respond to it in advance or at a stage when it might be possible to influence the legislation. I am not sure exactly when in the process that ought to happen. I would rather that we were open and up front about the issue, which is one of the reasons for my suggesting that we ought to at least consider what we should do, before we go to the Parliament.
Given the fact that we are talking, basically, about one organisation, you can take it that the views of those who are most likely to be affected—who have been named in some of the evidence that is before us—are to be found in paragraph 17 of page 35 of the document that we are discussing. The final sentence of the paragraph probably encapsulates their views.
In essence, you are saying that the view of the freemasons would be that there should be no change.
Let me declare, for the sake of the discussion, that I am not a member of the freemasons—I never have been and I suspect that I never will be—but I suspect that that is probably fair comment.
Nevertheless, the freemasons have not expressed a view. However, it is a matter of record that we wrote to them, among other organisations, and invited them to give their view. I am happy to be guided by the committee. If members feel that they have had every opportunity to comment, I will accept that that is the case.
I am inclined to agree with you that, at an appropriate time, we should hear evidence from both sides on the issue. The Parliament has operated in a transparent and accessible fashion in the past and should continue to do so. We should give both sides the opportunity to give evidence at an appropriate time. I think that such an evidence session would be interesting.
I must dissent from that view. By holding such a session, we would simply reinforce the possibility of the exercise almost becoming a witch hunt against one specific organisation. I am keen to avoid that. That is why I very much approved the wording that David Cullum read out to us. I am perfectly happy with that wording. If we go into too much detail, we will put the focus on to the one organisation that we have been talking about, which is unfair.
I am anxious that we should be fair.
We all want to be fair on the issue. I am not sure that we would be conducting a witch hunt against the organisation by giving it an opportunity to speak to the committee. We would be giving it a proper opportunity to express its views and to engage with the committee. At the end of that process, we would know that we had not been a party to a witch hunt, but that we had given the organisation an opportunity to engage with the committee.
What Karen Whitefield said is helpful. The freemasons' silence might well be their view, but I would like to give them an opportunity, and I suggest that we write to them and offer them such an opportunity. If they choose not to take it, we will have heard the other side, which is before us, and our decision can go with the other side of the argument, which is, in essence, that there should be a declaration. If the freemasons choose not to take the opportunity to come and talk to us, we should proceed on the basis that the wording of the previous draft bill will be the line that we take. We should give them whatever period of time to respond.
I am not against that suggestion, but a full evidence-taking session is not even needed—there could simply be a written submission. Giving them another opportunity is clearly a separate matter from any suspicion that there is a witch hunt. We would all wish to dissociate ourselves from such a suspicion. The suggestion would simply give that organisation another opportunity to put its side of the case. It may or may not take up the offer if we proceed on that basis, but that is entirely a matter for that organisation.
Would Mr Fergusson and Mr Macintosh be content to proceed along those lines? I would prefer not to go to a vote on the matter, if we can avoid doing so.
I want to clarify what I said earlier. When we started the conversation, I assumed that we were referring to MSPs who had been drawn into the argument on previous occasions. I make it clear that my earlier remarks referred to those individual MSPs and not to the freemasons themselves. I do not want the impression to be given that the Scottish Conservative and Unionist Party speaks for the freemasons—it does not. I think that I might have given the impression that it does so, and I want to clarify matters.
I certainly did not think that.
I still think that there is a danger. If we invite the freemasons to give evidence—written or otherwise—I do not see why we should not ask cricket clubs, church organisations and many others to give evidence, too. I do not want to go down that route, but there is a danger that, if we focus on one organisation, the discussion will move in a direction in which I do not think that any of us particularly wants it to go. However, I will not stand in the way of the course that you suggest.
I would like to introduce something new at this stage. The Public Petitions Committee sent members a copy of petition PE761 for information. Are members content to consider the petition as part of our discussions on the matter? There is no requirement on us to consider the petition, but given that there is division in the committee, I suggest that we do so.
Does the fact that we have received an envelope marked "private and confidential" allow us to discuss the matter in public?
The information was sent to members on that basis, but if you read it you will see that it has been provided for the committee. I am aware that the petitioner is anxious that we consider the matter. The matter is not on the agenda today and there was no requirement to include it. I could have chosen to put it on the agenda but I did not do so. However, given the direction that the discussion has taken, it might be helpful to consider the matter. If members have not had the opportunity to read the petition, I am happy not to consider it at this stage.
We received a private and confidential paper, but if we decide to discuss the matter we should bring it back as a public paper, not for the benefit of the committee but for the benefit of the public. I am in sympathy with Alex Fergusson. What we do about non-pecuniary interests should be driven by the principles of the Parliament and what we are trying to do to maintain the probity of the Parliament and confidence in the Parliament. We are trying to protect, secure and promote the Parliament as an upholder of standards in public life. We should not allow ourselves to be driven by other people's agendas or hobby-horses. Everything that we do should follow a certain set of principles.
Will Mr Butler comment?
I have changed my view. Ken Macintosh makes a sensible suggestion. We can consider the matter through the vehicle of the petition, by discussing the petition in public as a separate agenda item. There would be no harm in making a call for further comments from organisations that have a view on the principle towards which we are moving, which is that we should require MSPs to register non-financial interests in the way in which officials described. That would be the best way forward. We can still discuss the freemasons in the terms of the petition at a future meeting.
If the committee is content with that approach, I make a specific suggestion. Assuming that this is the only matter that is unresolved, I suggest that we deal with it at our next meeting on 9 November. We can pursue the matter through the correspondence that has been suggested, and we should leave it to the clerks to draft the appropriate letter to the appropriate people. My concern—and the reason for my raising the subject of the petition—is that all the submissions that we have received on the issue have come from only one direction. There is no question of holding a witch hunt, but I think that there should be a further opportunity for the freemasons to respond.
Okay. That is question 9 dealt with. Is David Cullum content with the way in which we have parked the issue or temporarily disposed of it?
That is fine. However, inevitably, I have a supplementary question in relation to non-financial interests. The Scotland Act 1998 requires that breaches of the requirement in the bill on financial interests will be criminal offences. However, it does not require breaches of non-financial interests to be criminal offences. What does the committee want to do in relation to non-financial interests?
We will have the opportunity to consider that at our next meeting, on 9 November. I will be looking for some background material on the consequences of breaches of non-financial interests from whoever wishes to submit it to the committee sufficiently far in advance. We will deal with question 10 as part of that.
I am sorry to interrupt, but I know that Bill Butler has to leave fairly soon and I, too, am under time pressure. The committee is in danger of becoming inquorate. I do not wish to seem awkward, but I wonder whether we should postpone further discussion of this item until the next meeting, on 9 November.
If that is the wish of the committee, I am happy for us to do that.
It is not what anyone would wish, but time constraints dictate that course of action. The decision is up to you and the deputy convener, but the committee might wish its meeting on 9 November to start a little earlier if that helps.
I will bear that in mind. We will deal with the rest of the members' interests order at that meeting.
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