Mark Hollingsworth, 24 May 2006
Tony
Benn, who, in the 1980s and 1990s, challenged
financial relations between ministers, lobbyists and corporations |
Ministers must so order their affairs
that no conflict arises, or appears to arise, between their private
interests and their public duties.
'Questions of Procedure for Ministers', Confidential Cabinet
Office rules
'I don't see why my private affairs should be anything to do with you at all.'
Nicholas Ridley, Observer, 13 April 1986
For the past decade, the Labour MP and former Cabinet minister Tony
Benn has been valiantly trying to publish a Cabinet Office document
which details the rules governing ministers' financial interests. It
has been a forlorn task. Letters to the Speaker and repeated requests
to the House have been met with the stubborn resistance of the
parliamentary establishment. The document 'Questions of Procedure for
Ministers' has been classified as 'Confidential'. This means, according
to the official definition, that its release would be 'prejudicial to
the interests of the nation.
When Benn was asked to give evidence before a Commons Treasury and
Civil Service select committee inquiry in 1986, he planned to issue the
secret handbook as part of his submission. But two days before he was
due to appear before the committee, its chairman, Terence Higgins, told
him that the document remained 'confidential and subject to the
thirty-year rule'.[1] Unperturbed, Benn appeared before the inquiry and
presented 'Questions of Procedure' as part of his evidence. The
committee reacted by refusing to publish the document and went into
closed session, excluding the public.
Benn's campaign for publication was backed by an unlikely ally in James
(now Lord) Callaghan, who was Prime Minister when the document was
updated in 1976. In January 1986, Callaghan wrote to Mrs Thatcher: 'I
see no reason why its contents need now be regarded as
confidential.'[2] Downing Street was unimpressed and has continued to
suppress its disclosure. 'It has been the practice of suc-cessive
governments,' said Mrs Thatcher in 1988, 'not to make Cabinet documents
public or to release them to Parliament.'[3]
The government's refusal to publish the rules is a measure of the
sensitivity of ministers on the subject of their retaining any form of
commercial stake. When an MP becomes a minister, even the appearance of
a conflict of interests is extremely damaging. The offence is more
serious and the political stakes much higher. As the former Labour
Chancellor of the Exchequer, Sir Stafford Cripps, once told the House:
'It is not merely a question of whether there is a conflict, but
whether anybody may think there is a conflict.'[4]
An assembly of rich men
The notion of government ministers retaining financial interests while
remaining in office was born in the commercial quagmire of the period
1895-1905. It was a time of intense political activity by shipping,
railway and cotton companies. Commerce was king, and this climate was
reflected in Parliament. As The Economist reported in the summer of
1898:
It is undeniable that during the session just ended there had been an
atmosphere of money in the lobby and precincts of the House of Commons
scarcely known before. All manner of 'interests' have gathered there as
they gather in Washington More attempts to influence the votes of
members have been made than has been known before.[5]
The government at the time did nothing to discourage public servants
becoming what one MP memorably described as 'the decoy ducks of
fraudulent finance'.[6] This was almost certainly due to their own
ministers being sucked into the same murky pond. In 1895, twenty-four
ministers of the new Conservative administration held between them
sixty directorships in private corporations.[7] By 1905 this had
increased to seventy-one in public companies alone.[8] The inevitable
consequence was a saga of financial scandal and corruption. It reached
such a pitch that one MP claimed the country was being 'governed by the
forty thieves'.[9] The Liberal leader Herbert Asquith warned that no
minister should, be in a position where 'his public duty and private
interest come into collision'.[10] This advice was extravagantly
ignored. Lord Selborne was Under-Secretary at the Colonial Office while
remaining a director of the P and 0 Steamship Company. Not only did P
and 0 conduct business with the Colonial Office, they also received
substantial government subsidies.[11]
Senior Cabinet ministers tried to deflate criticism of corruption. The
Chancellor, Sir Michael Hicks-Beach, said; 'We all have some private
affairs to which we are entitled . .. The First Lord of the Treasury
[Prime Minister] takes recreation at golf. I take mine by a walk along
the Embankment and by a short attendance at a meeting of
directors.'[12] But the agitation for reform was bolstered by
allega-tions against the Chamberlain family.
In 1899 Joseph Chamberlain was Colonial Secretary when the government
adjudicated on the amount of compensation due to share-holders of the
Royal Niger Company. The firm's charter had been abolished and there
was criticism over too favourable terms for the investors. Joseph
Chamberlain was the responsible minister but was unable to make the
decision. The reason, he told the Prime Minister, was that he had
£3,000-worth of shares in a certain firm - the Royal Niger Company.[13]
The Boer War brought more charges against Joseph Chamberlain, who
remained Colonial Secretary. His brother Arthur was chairman of Kynoch
and Co., a Birmingham-based engineering firm. During the war Kynoch was
awarded a large number of contracts to supply ammunition and explosives
to the government. They were also allowed to revise earlier tenders - a
privilege not granted to competitors and an unprecedented act of
favouritism. Arthur Chamberlain strongly denied that he used his
brother's influential position in the government to win contracts. But
it then emerged that Joseph had earlier spoken out on behalf of Kynoch
in a Commons debate while an MP and not declared his interest. More
damning was the use of the Colonial Secretary's name in the letter of
introduction used by Kynoch's sales representatives.[14]
Joseph Chamberlain angrily denied that he had any direct or indirect
interest in companies receiving arms contracts for the war. Yet his
family owned £140,000 worth of shares in Kynoch. More pertinent was the
connection with Hoskins and Sons Ltd, which supplied fittings to the
Royal Navy. This was virtually the family firm. His second son,
Neville, was the company's managing director and his wife, his other
son and two daughters were all major share-holders. Even more startling
was a £3,000 stake held by the Colonial Secretary's brother Austen, who
was at the same time the Civil Lord of the Admiralty.[15]
Joseph Chamberlain survived the subsequent debate and motion of censure
as MPs voted on party lines. His final riposte to his critics was:
'Every man in every government who has saved money must invest it
somewhere. It is difficult to see what form the investment, English or
foreign, would not lay him open to such scandalous imputations.'[16]
Dealing with Marconi
One of Sir Henry Campbell-Bannerman's first acts on becoming Liberal
Prime Minister in 1905 was to try and disinfect the stench of
corruption from public life. The Premier asked his new Cabinet for
details of their directorships. He did not want, he said, the
government's Front Bench to become 'a sty for guinea pigs'.[17] This
was a reference to the popular nickname for tame politicians acquiring
easy directorships.
The government immediately announced that ministers must relinquish all
directorships, except of a philanthropic nature. But legal sanction was
ruled out. 'I hope that legislation will not be necessary,' said
Campbell-Bannerman. 'A good example has been set.'[18] However, the
failure to ban share dealing resulted in one of this century's major
political scandals. It revolved around the Marconi Wireless Telegraph
company and investments by senior Cabinet ministers.
In July 1912 the Liberal administration awarded a contract worth
£6o,ooo to Marconi for a network of eighteen wireless stations, linking
different parts of the British Empire. The company's shares immediately
shot up in value. Four months earlier, Marconi's Ameri-can parent
company had announced a substantial shares issue of £1.4 million. But
before the shares were offered to the public, Marconi's managing
director, Godfrey Isaacs, secretly sold 1,000 each to his brother Sir
Rufus Isaacs, the Attorney-General, Lord Murray, Government Chief Whip,
and Lloyd George, then Chancellor of the Exchequer. The shares were
bought in their own names at the pre-issue price of £2 At the end of
the first day's trading on the stock market, the shares closed at £4. A
few days later Lord Murray and Lloyd George sold half of their shares
and then purchased another 3,000 between them.[19] Hence senior
ministers had made a financial killing, using their public position for
private profit. It was a case of insider dealing and, by virtue of
their office, a conflict of interests. But had they also helped Marconi
win the wireless contract four months later to produce a profit for
their shareholdings? After all, Godfrey Isaacs was managing director of
Marconi's British contractor.
Lloyd George was evasive, and blustered in the House about 'sinister
rumours passed from one foul lip to another'.[20] Isaacs denied buying
shares in the British Marconi company. Lord Murray fled to South
America. A select committee inquiry was set up, and its Liberal
majority cleared the ministers of corruption, although a minority
report did criticise them for 'grave impropriety'.[21] In June 1913,
Lloyd George and Rufus Isaacs made a very limited apology. But this was
further diluted by the government's final act in the Marconi affair.
Four months later, in October 1913, Isaacs was promoted to become Lord
Chief Justice, the highest legal officer in the land.
Keeping it private
At the climax of the Marconi affair in June 1913, the Prime Minister,
Herbert Asquith, made what appeared to be a definitive declaration on
ministers' interests:
Ministers ought not to enter into any transactions whereby their
private pecuniary interest might, even conceivably, come into conflict
with their public duty. . . Ministers should scrupulous1y avoid
speculative investments in securities in which, from their position and
their special means of early or confidential information, they have or
may have an advantage over other people in anticipating market
changes.[22]
As this principle had been breached by Asquith's own Chancellor,
Attorney-General and Chief Whip, it was hardly surprising such a ruling
was ignored after the First World War - even at the highest level.
During the 1926 coal dispute and general strike, Stanley Baldwin was
able to combine being Prime Minister with holding 194,000 ordinary
shares and 37,000 preference shares in Baldwin's Ltd - owner of several
collieries.[23]
The main discrepancy in the official rules was that ministers were
barred only from taking seats on the boards of publicly quoted
companies. They could continue as directors of private firms. This
meant that in 1926 Neville Chamberlain could retain his directorship of
Hoskins Ltd when he entered the Cabinet. Hoskins was a major government
contractor and in 19 25-6 was awarded several Admiralty contracts.[24]
Viscount Walter Runciman was also able to take advantage of the system.
From 1931 until 1937 he was President of the Board of Trade. At the
same time he was a shareholder 21,000 £1 shares) and director of the
shipping firm Moor Line Ltd. His other directorships included the
Runciman Shipping Company, the London, Midland and Scottish Railway and
three other shipping corporations. Part of Runciman's ministerial
responsibility was to introduce in Parliament and then administer a £2
million subsidy to the merchant shipping industry. One of the
recipients of that grant was Moor Line Ltd.[25] In 1939 Neville
Chamberlain, by then Prime Minister, reluctantly responded to the
outcry over the Runciman case. He closed the loophole on directorships
of private companies being exempt from the rules. But it was not until
1952 that Winston Churchill issued a statement that proved to be the
basis for today's rules.
The confidential 'Questions of Procedure' document is a classic British
compromise. Ministers want to avoid a scandal but at the same time they
are keen to preserve their financial investments. Consequently, the
regulations are clear, but there are enough loop-holes to keep
ministers happy. The document states:
It is a principle of public life that ministers must so order their
affairs that no conflict arises, or appears to arise, between their
private interests and their public duties.
Such a conflict may arise if a minister takes an active part in any
undertaking which may have contractual or other relations with a
government department, more particularly with his own department. It
may arise, not only if a minister has a financial interest in such an
under-taking, but also if he is actively associated with any body ...
which might have negotiations or dealings with the government.[26]
As a safeguard, ministers are required to resign all their
directorships and divest themselves of any controlling shareholding in
a company. But the enforcement of the guidelines is weakened by secrecy
and the lack of any independent arbiter, even inside Parliament. If
there is a potential conflict of interests: 'Each minister should
normally decide for himself how the principles apply to him. . . Where
there is a doubt it will almost always be better to surrender the
interest but in such cases the Prime Minister of the day must be the
final judge.'
There are several interests not covered by 'Questions of Pro-cedure'.
They include the use of trustees to enable a shareholding to be put
aside while ministers retain a general stake in the future of a
company. There is also no provision for the interests of their close
family, while ministers who are lawyers and farmers are immune from the
rules. Hence the presence of wealthy farmers James (now Lord) Prior
(1970-72), Peter Walker (1979-83) and Michael Jopling (1983-7) in the
Cabinet as Secretarys of State for Agriculture.
Thus many ministers remain judges in their own cause.
Speculating in the market
The most lucrative loophole lies in the guidelines governing share-holdings:
Ministers cannot be expected, on assuming office, to dispose of all the
investments they may hold. But if a minister holds a controlling
interest in any company. . . and, if there is any danger of a conflict
of interest, the right course is for the minister to divest himself of
his controlling interest in the company.
There may also be exceptional cases where, even though no controlling
interest is involved, the actual holding of particular shares in
concerns closely associated with a minister's own department may create
the danger of a conflict of interest. Where a minister considers this
to be the case, he should divest himself of the holding.[27]
This enables ministers to buy and sell shares - either in their own
name or through brokers - and then decide for themselves whether there
is a problem.
Inevitably, ministers who retained their investments on taking office
ran into trouble. Henry Hepburne-Scott, the tenth Lord Polwarth, became
embroiled in such a row soon after becoming a minister of state at the
Scottish Office in April 1972 In 1973 Lord Polwarth was given
responsibility for North Sea oil developments as chairman of an
interdepartmental task force. These new duties came into conflict with
his private interests in the shape of oil-related investments. They
were held in a series of trusts, notably the British Assets Trust and
Second British Assets. The 17,000 shares were worth just under £20,000,
with 8-15 per cent of the trusts' portfolios invested in oil or
oil-related companies. A third trust, Atlantic Assets, had links with a
corporation purchasing land for on-shore development.[28]
When these investments were disclosed the Prime Minister, Edward Heath,
defended his colleague. He told the Commons that as there was no direct
financial stake in any oil company, there was no conflict of interests.
Heath argued that the Scottish minister s shareholding was too small to
warrant any action: 'I do not regard Lord Polwarth's shareholdings in
these trusts as rightly to come in conflict with his duties and I do
not see how it could be seriously argued that they might.'[29] However,
Polwarth decided to sell the shares in order to continue in office
'unhampered by a continuing campaign of unfounded innuendos'.
The Opposition took the matter more seriously. Robert Hughes, Labour MP
for Aberdeen North, said: 'Anyone who believes no conflict of interest
arises is incredibly naive. The Prime Minister is saying that if a
conflict of interest were to arise, Lord Polwarth would take no part in
government discussions. If that is so, it negates the whole purpose of
his appointment.'[30]
In Lord Polwarth's case the public were given some glimpse of what was
happening. But Cecil Parkinson's investment activities were not made
public.
When Parkinson, MP for South Hertfordshire, was appointed Minister of
State for Trade in 1979, he handed over control of his share portfolio
to his stockbrokers - Walter Walker, now known as W. I. Carr
Investments. The Minister's shares were registered in Walker's nominee
company name: Ferlim Nominees (named after the racehorse Millreef in an
approximation of his name spelt backwards). Stock was then bought and
sold at the broker's discretion.
One of Parkinson's first duties as a minister was to pass legislation
making insider share dealing illegal. In October 1979 he told the
Commons: 'It is essential that small shareholders develop confidence in
the market and do not feel that they are at the mercy of the
unscrupulous. Therefore, there is general agreement that insider
deal-ing should now be made a criminal offence.'[31] The problem for
Parkinson was that from 1979 until 1981, while he was the responsible
minister, his own stockbrokers were involved in his depart-ment's first
major investigation into suspected insider dealing. This was conducted
under the new insider-dealing law introduced by Par-kinson. Indeed,
according to a documentary by FulcruMProductions for Channel 4, some
other share dealings through Walter Walker's nominee company were
already under scrutiny, in a separate investi-gation by Trade
Department inspectors.[32]
At the heart of the insider-dealing inquiry were a number of share
transactions in the company Suter Electrical, including those by
clients of Walter Walker. The problem was accentuated because early in
1980 Walker had bought, on Parkinson's behalf, 30,000 shares in Suter.
Seven months later the stock was sold for a profit of £2,800 This share
purchase which was not part of the insider-dealing inquiry - created an
apparent conflict of interests. While Parkinson held this stake, Suter
was negotiating to buy Prestcold, a subsidiary of British Leyland, then
a nationalised industry and the responsibility of the Trade and
Industry Department.[33] Parkinson was not informed about this
investment in advance of its purchase because his account was operated
on a discretionary basis.
There is no suggestion of any wrongdoing by the minister. But Parkinson
was, after all, the minister ultimately responsible for an inquiry
which included the activities of his own stockbroker. Indeed, according
to the FulcruMProductions programme, the Stock Exchange's detailed
report, which included a schedule of share deal-ings by clients of
Walter Walker, was sent to Parkinson's department.
What should Parkinson have done to avoid the appearance of a conflict
of interests? Christopher Hird, a former stockbroker and one of those
who made the Fulcrum documentary, argues the minister could easily have
resolved the issue. He could have changed his broker and hired an
independent fund manager. But Parkinson retained Walker, and Walker
continued to deal in speculative shares for his client. In May 1982
Parkinson, then in the Cabinet as the Conservative Party chairman,
bought and sold 15,000 shares in Tilbury Construction for a profit of
£3,500. In 1986, by now a back-bencher, he purchased 50,000 shares in
Newman Industries, which brought a profit of £8,000. The following year
the acquisition of 40,000 shares in the transport group Mitchell Cotts
resulted in an £8,000 profit.[34]
The Cabinet Office rules state that 'ministers should scrupulously
avoid speculative investments'. As the minister responsible for
regulating the City, and later a Cabinet minister, Parkinson needed to
be particularly careful with his private holdings. He should have
avoided even the slightest perception of a conflict between his public
duty and private financial interests. To achieve that, he needed to do
only three things: sell his shares, dismiss his broker and stop
dealing. Another option was to confine himself to orthodox
non-speculative investments like unit trusts. Instead, he retained
Walter Walker, mak-ing at least £37,000 profit in the process.
The Parkinson example also illustrates the weakness and
ineffec-tiveness of the regulations. As the 'Questions of Procedure'
document was confidential and ministers' share deals can be hidden
behind nominees, it is not easy for the circumstances to be examined by
Parliament or the public. Instead, it was left to the minister to
'decide for himself' whether he had breached the rules. And, as we have
seen, discretionary procedures are not the most secure systems.
If in the early 1980s Parkinson had believed his share deals created a
conflict of interests, he would have been obliged to visit his
long-standing friend in 10 Downing Street, Margaret Thatcher. As Prime
Minister, she was the final judge and jury on the matter. Yet this
would have been an occasion of some discomfort and embarrassment for
Mrs Thatcher. For there is evidence that she may have contravened the
spirit of the regulations for which she was responsible.
In 1971 Mrs Thatcher, then a Cabinet minister as Education Secretary,
bought 348 shares for £2,142 in Broken Hill Proprietary, an Australian
oil and steel conglomerate. By joining the company's dividend
reinvestment scheme, her holding increased to 1,327 shares. Over the
next fourteen years the stock, bought in her own name, increased in
value through rights and dividend issues to £4,47O.[35] She retained
the shares when she became Prime Minister in 1979, and they appeared in
Broken Hill's company register as 'The Hon. Mrs M. Thatcher, c/o Miss
J. Robillard [her constituency secretary], 10 Downing Street, London
SW1'. It was not until 1985 that the Prime Minister transferred her
holding and other shares to nominee discretionary accounts, to be
controlled by a firm of investment fund managers.[36] Thus for six
years Mrs Thatcher held a direct stake in a company that was quoted on
the London Stock Exchange. As Prime Minister and First Lord of the
Treasury, she could theoretically have had access to a great deal of
sensitive economic and industrial information. It was a potential
conflict of interests, because she kept the shares under her own name
from 1979 until 1985.
Mrs Thatcher denied that she had breached the Cabinet Office rules.
'Under those conventions,' she said, 'there is nothing which requires
me, on assuming office, to dispose of my shares or to transfer them
into a trust or in the name of investment managers.'[37] But 'Questions
of Procedure' states: 'There may be less clear-cut cases where a
minister would feel it appropriate to place his holding in the hands of
trustees.'
A share of the spoils
When in 1986 the Observer wrote to nineteen Cabinet ministers asking
them about their share dealings, the response was less than
enthusiastic. Nine refused to discuss the matter and four did not even
reply. Another four - Norman Tebbit, Lord Young, Kenneth Clarke and
Malcolm Rifkind - said they did not own any shares. Only John Biffen,
then Leader of the Commons, was forthcoming. He said he entrusted his
'depressingly small portfolio' to financial managers who administered
his account without telling him the nature of the investments.[38]
However, one Cabinet minister told the paper that he had specifically
ordered his stockbrokers not to buy shares in companies privatised by
his government. This instruction was a measure of the sensitivity felt
by some when ministers purchase stock in privatised corporations,
particularly as they had promoted denationalisation in Cabinet.
Nicholas Ridley, a Cabinet minister from 1983 until 1990, arranged for
his shares to be bought and controlled by his stockbroker. Hence he was
unaware of any deals at the time of the transactions. But he was told
after his broker bought 2,000 shares in the Jaguar car company just two
months after its privatisation. Ridley was at the time the Secretary of
State for Transport, having been Financial Secretary to the Treasury
from 1981 until 1983. His broker had paid £4,300 for the holding at
£2.15p a share on i October 1984. Fifteen months later Ridley's stock
was sold at £4.15p a share for a profit of about £4,000.[39]
The Transport Secretary said that he was aware of the Jaguar investment
only after it was made. When questioned by the Observer's Paul Lashmar,
he reacted angrily and said it was an unwarranted intrusion into his
privacy:
I find it extremely annoying and offensive. I don't see why my private
affairs should be anything to do with you at all . I really think it is
intolerable to suggest that I should in any way be influenced by these
sort of things.
I didn't buy these shares and I didn't sell them - my stockbroker did.
What am I supposed to do with my tiny bit of money? Am I supposed to
keep it on deposit in the bank in case you ask questions?[40]
Ridley did disclose that he asked his broker to sell all his shares to
'give me some cash' as he was buying a property. But he maintained that
he could not control what investments his stockbroker procured:
'There are certain shares I'm not allowed to buy, but I can't actually
stop him buying them . Supposing there is a privatisation issue and I
told him not to buy it and then he went ahead and bought it, I can't
stop him.'
That is debatable. A fellow Cabinet minister avoided this problem by
instructing his broker not to buy stock in any privatised company. But
perhaps a significant issue is why the Transport Secretary did not sell
his Jaguar shares as soon as he was informed of their existence.
Three months after the Jaguar flotation, the shares of British Tele-com
were also offered to the public. Like the Jaguar sale, the BT stock was
offered at the remarkably low price of £1.3 op. Among the 2.3 million
who took advantage were five government ministers, including one member
of the Cabinet. None of them was in a department involved in
negotiating the privatisation, and so there was no direct conflict of
interests, But the nature of Cabinet, with its burden of collective
responsibility, must at least raise questions of ministers making money
out of government policy.
The most senior minister of the five was Nicholas Edwards, the
Secretary of State for Wales, who received 8oo shares. 'Like all
Cabinet ministers,' he later said, 'all my investments are made without
reference to me and at the complete discretion of my investment
advisers.'[41] The Foreign Office minister Timothy Kenton bought,
through his stockbroker, 8oo shares when British Telecom was
priv-atised and another 1,700 later on the open market.[42] David Hunt,
then a junior Energy minister, secured 800 shares before selling them
in June 1986. Two government whips also bought the maximum 800. They
were Peter Lloyd and Robert Boscawen.[43]
In 1986 another four ministers played the stock market, this time for
the British Gas privatisation. They included John Lee, parliamen-tary
under-secretary at Employment, who owned 2,300 shares;
Rhodes Boyson, a junior Environment minister, with 1,200; John Gummer
at Agriculture, who bought I,400; and two government whips, Tony Durant
(with his wife Audrey) and Wyn Roberts, who picked up 300 and 800
respectively.[44]
The problem with ministerial shareholdings is that they are speculative
investments either to make some easy money or for long-terMProfit. This
accentuates any conflict of interests that arises. Ministers argue that
they hand over their investments to outside fund man-agers. This is not
always the case, but where it is true it fails to resolve the issue of
the perception of a conflict of interests. The ministerial rules state:
'Ministers cannot be expected, on assuming office, to dispose of all
the investments they may hold.'[45]
One may reasonably ask: Why not?
Your company needs you, minister
When one experienced Cabinet minister left the government in 1990, a
fellow Tory MP wryly referred to his resignation letter as akin to a
'Situations Wanted' advertisement.[46] The jibe was made only
half-jokingly, as that year was dominated by a trail of Cabinet
ministers leaving Whitehall for a clutch of lucrative directorships.
Suddenly the explanation of 'spending more time with the family' was
being greeted with raised eyebrows.
The concern about the exodus from the Cabinet room to the boardroom is
based on three premises. First, that ministers are enriching themselves
in the private sector as a result of their public duties on behalf of
the voter and taxpayer. Second, that they are joining companies with
which they had direct dealings as a minister, eithet awarding them
contracts or through privatisation. Third, that corporations are hiring
ex-ministers to exploit their inside infor-mation and contacts in their
bid for government-related business.
For many years it has been the recruitment of Ministry of Defence civil
servants by defence contractors which has caused concern. Certain MOD
officials possess confidential commercial information and expertise
which is invaluable in the competitive world of defence procurement.
Consequently, the potential for corruption is immense - either by
favouring the contractor just before leaving Whitehall or by exerting
influence after joining the company.
In Britain, this is known as 'The Revolving Door' (in one side as a
civil servant, out the other as a businessman). The Japanese
expression. for it is 'amakudari', or 'descent from 1-leaven', while in
France the defection from the public to the private sector is known as
'pantouflage', or 'parachuting'.[47]
In recent times British ministers who have fastened on Golden
Parachutes have landed in lush and prosperous pastures. A survey of
thirty-one former Cabinet ministers who held office at some point
between 1979 and 1990 reveals that nineteen secured a total of
fifty-nine company directorships an average of three each.[48]
The politics of the pork barrel
The aim of privatisation and deregulation policies in recent years has
been to roll back the bureaucratic frontiers of the state and lay to
rest the active role of government in commerce. However, the
medium-term consequence of this process has created a new
business-government complex. The dismantling of the industrial public
sector has, ironically, generated fresh regulatory powers and
responsibilities.
In these circumstances the inside knowledge, contacts and poten-tial
influence of a recently departed minister is invaluable to any
ambitious corporation. An ideal recruit would be from the Depart-ment
of Trade and Industry, which is at the sharp end of negotiations.
One of the DTI's most important roles is to review contentious
take-over bids. From 1983 until 1985 Sir Alex Fletcher was the DTI
Minister for Corporate Affairs, responsible for scrutinising
take-overs. In September 1985, the Argyll Group launched a £1.2 billion
bid for the drinks company Distillers. That month Sir Alex left the DTI
as part of the autumn reshuffle. Despite reservations by the City's
Take-Over Panel, the Argyll bid was given the green light in early
December 1985 and the lobbying began. Two weeks later Sir Alex was
hired by Argyll as its 'political adviser' just three months after
leaving the DTI. David Webster, the company's finance director, denied
there was a conflict of interests. He said the former minister was
assisting 'in a general advisory role. I would not want to comment on
the length of the appointment.'[49]
Sir Alex's Secretary of State at the DTI was Norman Tebbit, MP for
Chingford, who also left the DTI in September 1985, but remained in the
Cabinet as the Conservative Party chairman and Chancellor of the Duchy
of Lancaster.
In June 1987 Tebbit left the Cabinet, and four months later joined the
board of the employment agency Blue Arrow PLC (now known as Manpower).
He was paid £17,500 a year, held 8,8oo shares and was also entitled to
an all-expenses-paid chauffeur-driven Jaguar, secretarial support and
membership of the company's private health plan.[50] Tebbit was by no
means a passive, non-executive director. He was a key figure in a
boardroom coup which unseated the chairman Tony Berry.
On 2 November 1987, Tebbit also joined the board of the industrial
conglomerate BET PLC. His salary is at least £10,000, with 2,000 shares
worth £5,000. In January 1990 this directorship created problems for
Tebbit when BET bought an employment agency called Hestair. As Hestair
was a direct competitor to Manpower in America, this produced a
conflict of interests the MP being on the board of both BET and
Manpower at the same time. The situation was exacerbated, as Manpower
was planning to shift their corporate base to the United States, and
Tebbit eventually resigned in July 1990, citing the 'potential conflict
with his board position in another company with parallel interests.[51]
In November 1987 Tebbit also became a director of the retail company
Sears PLC, replacing Cecil Parkinson. He was paid at least £10,000 a
year and held 3,500 shares worth £5,000. Two months later he joined the
board of J. C. Bamford Excavators Ltd, the earth-moving equipment
manufacturer. In November 1990 he acquired a fifth directorship as
chairman of the Onix Construction Group, the north-east leisure,
construction and manufacturing company.
Tebbit's most controversial appointment was his directorship of British
Telecom. He joined the company on 3 November 1987 and acquired an
annual salary of £16,500 plus 2,000 shares worth £6,ooo. It was Tebbit
who, as Trade and Industry Secretary, privatised BT in November 1984.
The former Cabinet minister responded in characteristically venomous
fashion to criticism that he was being rewarded for past services: 'If
anyone believes I denationalised British Telecom and three years later
gave up a £50,000-a-year Cabinet post just to get a £16,500-a-year job
as a non-executive director, he must be either daft or too full of
political spite, malice, spleen and envy to be rational.'[52] This
missed the point, as the con-cern was the choice of company, not his
salary. But even if we apply the cash test, Tebbit's argument is
flawed. A conservative estimate of his directors' fees since leaving
the Cabinet is that he has been earning at least £80,000 a year.
Together with his MP's wages of £28,970, he has more than doubled his
minister's salary. He also owns £20,000 worth of shares.
British Telecom's chief commercial competitor is Cable and Wire-less (C
& W), the ambitious international telecommunications group. In
recent years C & W have gradually nibbled away at BT's mon-opoly.
The strategy has been to invest profits from its Hong Kong operation
into its wholly-owned subsidiary, Mercury Communi-cations, and steadily
gnaw away at BT's share of the market. How-ever, in such a tightly
regulated industry, C & W is increasingly reliant on the good will
of the D TI. Licences are awarded and competition policy is monitored
by that department. Consequently, as the stakes are higher, the
lobbying is more intense. In these circum-stances the appointment in
1990 of Lord Young, Secretary of State for the DTI from 1987 to 1989,
as executive chairman of C & W was bound to cause controversy.
Young, a former property developer, had been a devoted disciple of Mrs
Thatcher's government. For two years he was an unpaid special adviser
to Keith (now Lord) Joseph, then Trade and Industry Secretary. In 1981,
with Young at his elbow, Joseph initiated and authorised the
privatisation of C & W. Five years later Joseph left the Cabinet
and became a consultant to the company.
It was not until after the 1987 general election that Lord Young
returned to the DTI as Secretary of State. For the next two years he
was directly involved in negotiations with C & W, its subsidiary
Mercury, BT 'and other cable companies like Racal.
One of the most competitive markets at the time was mobile tele-phones.
In June 1989, Lord Young awarded Mercury a licence to act as Personal
Communications Network (PCN) operators. The PCN was the new generation
of personal and mobile phones. It was a major coup for Mercury and
bitterly opposed by BT who com-plained of 'favouritism'.
The decision to grant the licence was made on the recommendation of Sir
Bryan Carsberg, director-general of OFTEL, the industry's regulators. A
month later, on 24 July 1989, Lord Young resigned from the government.
Within four weeks the Mercury licence was confirmed and authorised by
his successor Nicholas Ridley[53]
Six months after leaving the Cabinet, Young became a director of
Salomon Inc., the American merchant bank, and chairman of its
international executive committee. But it was his public appointment as
C & W executive chairman on 13 June 1990 barely eleven months after
his departure from the DTI that caused a political row.
At a salary of at least £400,000 a year, Young's post involved the
day-to-day running of the company. From 1 October 1990, the first day
in his new job, he would be negotiating with the government department
he had left the previous summer. 'His experience of nego-tiating at the
highest level is a rare talent,' said Lord Sharp, C & W's outgoing
chairman.[54]
The potential for a conflict of interests was raised almost
immediately. A month later, in November 1990, the government launched
its review of telecommunications policy. According to the Financial
Times: 'The main item on the agenda will be whether Mercury
Communications, C & W's subsidiary, should be allowed to maintain
its position as the only mainstream rival to British Telecom or whether
new competitors should be licensed.'[55]
As the former Cabinet minister recently responsible for
telecom-munications policy, Lord Young was a unique asset for C &
W. He had extensive detailed knowledge not just of the DTI but also of
C & W's competitors. But Young angrily denied there was any
impropriety in his appointment: 'It is total British hypocrisy when
people say I should have waited more than fifteen months before taking
my first full-time job. It is not a question of going on to a board as
non-executive to peddle any information I might have. I am going to
steer the whole company.'[56]
Young was indignant that Ted Short, now Lord Glenamara, had become
chairman of C & W in 1976, just six months after retiring as
Labour's Deputy Prime Minister. Short was also a former
Postmaster-General. But this is a weak argument. First of all, Short
had been moved froMPostmaster-General in 1968 eight years before
jbining C & W. Second, C & W was a nationalised industry.
Consequently, Short's knowledge and expertise were being used on behalf
of the taxpayer. This contrasts with the potential use of privi-leged,
contemporary information for the benefit of a relatively small band of
private shareholders.
Banking on the Chancellor
There is a little doubt that a minister in Her Majesty's Treasury is
privy to commercially useful information, ranging from up-to-date data
on interest and currency rate policy to detailed knowledge on
privatisations. The recruitment of a resigning Treasury minister gives
merchant and clearing banks a potentially critical edge over
com-petitors.
The pilgrimage of ministers to the City is not a new development.
Anthony (now Lord) Barber, Chancellor of the Exchequer in the Heath
government of 1970-74, became chairman of the merchant-banking group
Standard Chartered soon after the Conservatives lost the election.
Peter (now Lord) Rees was Chief Secretary to the Treasury with a seat
in the Cabinet from 1983 until 1985. The following year he became
deputy chairman of the merchant bank Leopold Joseph Holdings PLC and a
consultant to the investment fund man-agers Touche Ross. He also joined
the board of international finan-ciers James Finlay PLC.
Rees's Chancellor was Nigel Lawson, who resigned on 26 October 1989,
the longest-serving Chancellor of the Exchequer since Lloyd George. He
left the Treasury with an incomparable contacts book, particularly in
the overseas financial scene. His close working relationship with, for
example, Alan Greenspan, chairman of the US Federal Reserve Board, made
him a valuable commodity. Equally beneficial was his intimate and
contemporary knowledge of the mechanics of the UK and international
economies, based on six years as Chancellor.
It was not-long before Lawson attached himself to the Golden Parachute
and jumped in the direction of the Square Mile. Three months later 'he
landed in the opulent surroundings of Ebbgate House, Swan Lane, with an
office overlooking the Thames. This was the headquarters of Barclays De
Zoete Wedd, the investment banking and securities subsidiary of
Barclays Bank PLC.
Lawson had been hired as a non-executive director of Barclays Bank,
working two days a week primarily for De Zoete Wedd. He was paid at
least £100,000 a year £1,000 a day). A month after his appointment the
former Chancellor bought 715 shares at £5.76p each a total investment
of £4,118.[57] Apart from attending board meetings on the first
Thursday of every month, Lawson's main res-ponsibility is to advise De
Zoete Wedd's clients. 'We think he'll give us the benefit of his advice
on how Barclays is affected both in the UK and overseas,' said a bank
spokesperson. 'He will be able to help us identify new business
opportunities. It's bringing extra expertise to the board.'[58] Lawson
said: 'This part-time job with a leading British financial house, which
I am delighted to join, fits in well with my plans to write a book and
remain in politics.'[59]
The reaction of the City indicated the benefit of recruiting the former
Chancellor. dn the afternoon his appointment was announced, Barclays'
stock-market value rose by nearly £90 million, Not everyone was so
delighted with his directorship, however. According to Paddy Ashdown,
leader of the Liberal Democrats: 'It is a corruption of the ideals on
which Parliament ought to be based . . . for ministets to march out of
office and straight into fat, salaried jobs, often short-changing
constituents by taking days off while drawing an MP's salary.[60]
Lawson was attacked from all sides. The Queen's Chaplain, the Reverend
John Grimwade, criticised his salary as excessive.[61] Reg Hales,
leader of the Conservative group on Birmingham City Council, withdrew
his account from Barclays in protest. He described the former
Chancellor's salary as 'almost obscene'.[62] More significantly, a
number of Barclays' own shareholders were unhappy with the appointment.
At the bank's annual general meeting on 26 April 1990, some twenty
investors raised their hands to object to Lawson's re-election to the
board.
'Has Barclays' board become a rest home for discredited chan-cellors?' asked one shareholder.
'The Barclays board has never been a rest home for anyone,' replied Sir Martin Jacomb, the bank's deputy chairman.
The platform then faced a barrage of questions. Why was he appointed,
how much work did he actually do and why was he paid so much?
'Mr Lawson does not receive an extravagant salary, nor does he expect
one,' responded Sir Martin. The deputy chairman added that Barclays was
'tossing Mr Lawson a thin crust' because it was only what he was used
to after ten years of public service.[63]
Lawson, sitting impassively on the rostrum during these exchanges, may
have reflected that his fee was, in fact, four times what he was used
to as a Cabinet minister. But he had no cause for concern. He was
re-elected to the board. In April 1991 Lawson resigned as a consultant
to Barclays De Zoete Wedd but retained his directorship of Barclays.
The former Chancellor did indeed seem immune to criticism. The day
after he started work at Barclays, Tuesday 6 February 1990, he joined
the board of Guinness Peat Aviation, the world's largest aircraft
leasing company. He also became chairman of GPA Financial, a new
subsidiary which plans to sell interests in the aircraft industry
direct to investors and which originally approached Lawson in December
1989. 'Mr Lawson is one of the world's foremost econ-omic and financial
thinkers. His experience will contribute enormously to the development
of GPA,' said the chairman.[64] Lawson works a minimum two days a month
on a daily rate of £1,000
Seven months later, in September 1990, the former Chancellor became
executive chairman and a shareholder in the Central Europe Trust
Company, a London-based firm of management consultants which had just
been set up to advise clients on investing in newly liberated Eastern
Europe. Central Europe Trust Company has among its clients GE C. It is
also part of a consortium which will receive Treasury funding to help
Poland with its privatisation programme. According to Lawson: 'CET
provides a valuable link between the newly emerging market economies of
Eastern Europe and successful corporate investors in the West.'[65]
Like his fellow former Cabinet colleagues leaving Whitehall for the
City, Nigel Lawson reacted angrily to the criticism of his
direc-torships. He described it as 'the politics of envy',
'sanctimonious humbug' and 'a nauseating form of demagoguery', and
concluded:
I obviously am now earning a substantial amount but I sacrificed far
more financially during those ten years with the government. Now, it
would be a terrible thing if people went into politics, as they do in
some countries where corruption is rife, for what they could get out of
it. But there's quite a large gap between that state of affairs and
what we have in Britain today.[66]
Selling the gas
After British Telecom, the next major sale of a nationalised industry
was British Gas in 1986. The Secretary of State for Energy who
authorised and made all the key decisions for this share flotation was
Peter Walker.
After he resigned from the Cabinet in March 1990, Walker acquired a
chain of three directorships which were linked to the British Gas
privatisation. On 11 May 1990, just twelve days after leaving the
government as Welsh Secretary, Walker joined the board of Smith New
Court PLC. The annual salary was £15,000. A City-based securities firm,
Smith New Court has been anxious to build up its client list as
corporate finance advisers. The appointment was secured through its
chairman, Sir Michael Richardson, a long-standing associate of the
minister and a veteran broker on the interface between government and
business. 'I would rather have him [Walker] as a businessman than any
other Cabinet minister,' said Sir Michael. 'If Peter brought in a
stunning piece of business, I'm not saying we wouldn't pay him a
bonus.'[67]
Sir Michael had also worked for the merchant bank that handled the
British Gas share flotation for the government N. M. Rothschild and
Sons. Three weeks after the Smith New Court appointment, Peter Walker
became a director of the Welsh board of Rothschild (NMR), which also
owns 30 per cent of Smith New Court. Having been the Secretary of State
for Wales and Energy, he was seen as a useful asset. 'He has an
unparalleled knowledge of the Welsh economy and we will be able to draw
on his many skills and accumulated knowledge in banking and industrial
development,' said Glynne Clay, managing director of NMR Wales.[68] The
perceived potential for a conflict of interests occurred within months
of his appointment. As Welsh Secretary Walker had encouraged Rothschild
to open an office in Wales. 'I persuaded them to come,' he said. During
that period Rothschild's Welsh parent company was selected by the
government as the financial advisers to the Cardiff Bay Development
Corporation. In late 1990, the role of the Corporation became
con-troversial because of its plan to dam up Cardiff bay as a 'scenic
waterscape' for a property development. Now Walker was on the board of
the company that would profit from the scheme, but he denied helping
Rothschild as Welsh Secretary. 'I had nothing to do with the Cardiff
bay appointment of Rothschild,' he said. 'I was not involved in any
way. '[69]
The final link in the British Gas/privatisation chain was connected on
the day Walker took his seat on the board of Rothschild. That morning,
1 June 1990, the former Energy Secretary became a director of British
Gas PLC the company he had privatised with Rothschild's help.
There was an immediate outcry. Political opponents recalled that Walker
had been criticised at the time of the British Gas sale for not
breaking up its monopoly or replacing the management team.[70] Walker,
who was paid a £10,000 annual fee and held 10,000 shares worth £22,000
accused his critics of 'talking a load of nonsense. He said British Gas
had been a private company for four years and that he was hired for his
knowledge of international oil and gas markets.[71]
Walker's third directorship on 1 June 1990 was the Worcester Group PLC,
the central-heating specialists. He is also a substantial shareholder
and has had a long association with the company. Other directorships
picked up by Walker since leaving the Cabinet include Dalgety PLC,
Thornton and Co., DC Gardner Group PLC, CBC UK Ltd, Tate and Lyle PLC
and the chairmanship of Maxwell Communication Corporation.
Judges of their own propriety
In the midst of the furore over former Cabinet ministers joining
privatised companies in 1990, a cartoon was published in the London
Evening Standard, a paper not known for its radical outlook. The
cartoon depicted a board of a company waiting to start a meeting. One
of the directors was shown on his feet saying: 'I am very sorry. We
have just had a telephone message from the chairman. He has not yet
quite resigned from the government.'[72]
It was an indication of the wide-ranging, if cynical, concern about
ministers accepting 'golden handshakes' froMPrivate companies they
helped to create while in Cabinet. Sir Geoffrey Howe, then leader of
the Commons, responded that 'it has never been the practice, under
successive governments of either party, to prevent former ministers
from accepting appointments in areas where they have expertise'. He
said it was 'difficult to see the distinction in principle' between the
appointments to privatised companies and top jobs awarded to ex-Labour
ministers in public-sector corporations.[73]
There is a difference between moving sideways to a nationalised
industry and joining the board of several private companies while
remaining in Parliament, but Sir Geoffrey's argument does have some
validity. For example, from 1976 to 1978 Edmund (now Lord) Dell was
Secretary of State for Trade in the Labour government. A year after his
resignation, Dell became chairman and chief executive of the Guinness
Peat Group, the merchant bank and financial services conglomerate. That
year, 1979, he also joined the board of Shell. Another Labour Cabinet
minister was Eric (now Lord) Varley, Secretary of State for Energy and
then Industry from 1974 to 1997. In 1984 he became chairman and chief
executive of the Coalite Group, the coal and fuel distribution company.
The real issue is that there are no rules whatsoever for ministers
joining private companies they dealt with whilst in public office. In
1962. Harold Macmillan, then Prime Minister, was asked to introduce a
law preventing ministers moving to executive positions in such firms.
'I do not think that such legislation would be wise or necessary,' he
replied. 'It is desirable and beneficial to the country that men of
considerable experience should be available, when they leave the
government, to the service of industry and commerce.'[74] This has
remained the position. In Sir John (now Lord) Hunt, then Cabinet
Secretary, said 'it has generally been thought to be impracticable to
apply rules to former ministers'.[75]
In 1990 Mrs Thatcher stated:
Formal rules have never been applied to former ministers considering
whether to accept appointments in industry or commerce, whether in the
public or private sector. They are public figures and both they and the
companies have a powerful motivation to protect their good name.
It is valuable for this country to have people of experience in public
affairs putting their talents at the service of industry and commerce
when they leave government.[76]
Nobody would argue against a greater cross-fertilisation between
business and government. But senior Tory and Labour MPs main-tain there
is a need for accountability and regulation, pointing to the fact that
civil servants joining companies with whom they had dealings are
subject to stringent rules. According to Cabinet Office guidelines,
officials can be banned from accepting private jobs for up to two years
after leaving Whitehall. For Elizabeth Symons, general secretary of the
First Division Association, 'there is one rule for civil servants and
another for ministers'.[77]
This was recognised by, of all people, Norman Tebbit. The former Tory
Cabinet minister said: 'I think it is right that former ministers, like
civil servants, should leave a decent interval - say two years -
between holding responsibilities which affect particular businesses and
taking up posts with them.'[78] His former Cabinet colleague John
Biffen, a one-time Chief Secretary to the Treasury, agreed: 'In these
matters, where you have a relationship between government and industry,
you need to be particularly cautious and careful to dispel any
suggestion of an underhand pay-off situation.'[79]
Senior Labour figures took the same view. In 1990 John Cunningham,
Shadow Leader of the Commons, wrote to Mrs Thatcher calling for the
civil service guidelines to be applied to ministers. He also argued
that privatisation had made tougher rules even more necessary:
In the case of your former ministers, the relationship between them and
the companies which now pay them was far more substantial. These former
ministers took responsibility in Cabinet and in Parliament for the
entirety of the creation, legal existence, financial status and trading
position of these companies . . . That responsibility was unique to
privatisation.
The Prime Minister replied: 'I do not believe it would be appropriate
to extend the business appointment rules which apply to civil servants
to former ministers. Their positions are not analogous.'[80] She
referred back to Sir John Hunt's 1975 assertion that it was
'impracticable' to implement any guidelines and quoted with approval a
com-ment by a predecessor, Harold (now Lord) Wilson. With just one
remark the former Labour Prime Minister was able to capture the
attitude of the parliamentary establishment on the whole issue of
ministers' commercial interests. 'I think,' he reflected, 'that these
matters are better left to the discretion and good sense of the
individuals concerned.'[81]
Notes
1.Letter to Tony Benn, 15 January 1986.
2 Letter to Mrs Thatcher, 21 January 1986.
3 House of Commons, Hansard, 15 January 1988, col. 410
4 Ibid., 3 June 1937, col. 1229.
5 The Economist, 30 July 1898.
6 House of Commons, Hansard, 14 February 1899, col. 971. Quoted
in D.C.M. Platt, The Commercial and Industrial Interests of Ministers
of the Crown, Political Studies, vol. ix,1961
7 House of Commons, Hansard, 16 August 1895, cols. 171-2..
8 Ibid., August 1896, col. 148.
9 Ibid., 14 April 1896, col. 879.
10 Ibid., 15 February 1899, col. 202..
11 D.C.M. Platt, Commercial and Industrial Interests.
12 House of Commons, Hansard, vol. 66, cols. 987-8.
13 G. R. Searle, Corruption in British Politics, pp. 48-9.
14 Ibid., p. 59.
15 Ibid., pp. 56-7.
16 Ibid.
17 Ibid., p. 103.
18 House of Commons, Hansard, 20 March 1906.
19 Alan Doig, Corruption and Miscondyct, p. 101.
20 House of Commons, Hansard, 11 October 1912..
21 Alan Doig, Corruption and Misconduct, p. 102..
22. House of Commons, Hansard, 19 June 1913, cols. 556-7.
23 Simon Haxey, Tory MP, p. 36.
24 G. R. Searle, Corruption in British Politics, p. 413.
25 Simon Haxey, Tory MP, p. 32..
26 Questions of Procedure for Ministers, Cabinet Office Document, p. 15, paras. 67-9.
27 Ibid., p. 16, para. 74.
28 Alan Doig, Corruption and Misconduct, p. 224.
29 Ibid.
30 House of Commons, Hansard, 25 June 1973, col.
31 Ibid., 22 October 1979, col. 63.
32. 'At the Mercy of the Unscrupulous', FulcruMProductions for Channel 4, 23 November 1989.
33 Ibid. No action or charges have been brought against any individual.
34 FulcruMProductions for Channel 4, 23 November 1989.
35 Daily Telegraph, 24 March 1986.
36 Mail on Sunday, 23 March 1986.
37 House of Commons, Hansard, 25 March 1986, col. 781.
38 Observer, 13 April 1986.
39 Ibid.
40 Interview, Paul Lashmar, Observer, 13 April 1986.
41 House of Commons, Hansard, 27 April 1987, col; 6.
42. The Times, 31 March 1987.
43 Labour Research, April 1987.
44 Ibid., June 1987.
45 Questions of Procedure for Ministers, p. 16
46 Daily Mirror, 17 May 1990.
47 Guardian, 27 August 1990.
48 Labour Research, October 1990.
49 Guardian, 21 December 1985.
50 Report to the US Securities and Exchange Commission by Blue Arrow PLC, May 1989.
51 The Times, 1 August 1990.
52.London Evening Standard, 13 June 1990.
53 Financial Times, 14 June 1990.
54 Guardian, 14 June 1990.
55 Financial Times, 14 June 1990.
56 Observer, 17 June 1990.
57 Independent, 7 March 1990.
58 The Times, 22. March 1990.
59 Guardian, 2. February 1990.
6o Daily Telegraph, 3 February 1990.
61 Independent, 6 February 1990.
62. The Times, 7 February 1990.
63 Financial Times, Daily Telegraph and The Times, 27 April 1990.
64 The Times, 7 February 1990.
65 Daily Telegraph, 11 September 1990.
66 The Times, i3 February 1990.
67 The Times, 15 May 1990.
68 Press release by N. M. Rothschild and Sons, 29 May 1990.
69 Paul Foot, Daily Mirror, i8 January 1991.
70 The Times, 2. June 1990.
71 Guardian, 4 June 1990.
72. London Evening Standard, 15 June 1990.
73 House of Commons, Hansard, 14 June 1990, col. 470.
74 Ibid., 20 November 1962., col. 999.
75 Evidence to the Royal Commission on Standards of Conduct in Public Life, 1974-6, Command Paper 6524.
76 Letter to John Prescott, Shadow Cabinet Minister, 13 June 1990.
77 Independent, 14 June 1990.
78 London Evening Standard, 13 June 1990.
79 Guardian, 14 June 1990.
80 Correspondence quoted in Tbe Times, 30 July 1990.
81 House of Commons, Hansard, 20 June 1968, col. 171.
Mark Hollingsworth is an investigative journalist who is also the author of Thatcher's Fortunes - The Life and Times of Mark Thatcher (with Paul Halloran, Mainstream, 2005) and Saudi Babylon - Torture, Corruption and Cover-up Inside the House of Saud
(with Sandy Mitchell, Mainstream, 2005) Among his other books
is The Ultimate Spin Doctor: Life and Fast Times of Tim Bell
(Coronet Books, 1997).
This is an extract (Chapter 7) from Mark's book MPs for Hire, (Bloomsbury,
1991). The book is now out of print, so Spinwatch is
reproducing it as a contribution to the continuing debate on
the regulation of lobbyists at the Scottish, UK and European
Parliament's.
This chapter is reproduced with the permission of the author. Spinwatch will publish a further extract in the near future.
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