HC Deb 28 January 1960 vol 616 cc371-3

The following Question stood on the Order Paper:

52. Mr. MELLISH

To ask the Prime Minister what conditions govern the relationship of Ministers with firms likely to obtain official contracts; and if he will make a statement.

Mr. R. A. Butler

With permission, I will now answer Question No. 52.

The directions given to Ministers on matters of this kind are set out in a statement made by my right hon. Friend the Member for Woodford (Sir W. Churchill) in this House on 25th February, 1952. It may be for the convenience of the House if I circulate the text of this statement again in the OFFICIAL REPORT.

The general principle is that Ministers must so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties.

Mr. Mellish

I thank the right hon. Gentleman for that reply. Is he aware that there has been a Press report, which I am unable to confirm or deny, that the Minister of Transport was in fact the senior partner of a firm of contractors which has obtained a contract worth £250,000 and that we understand, according to this Press report, that the right hon. Gentleman is now trying to dispose of the shares he has. In a case of this kind, does not the right hon. Gentleman think it most improper, at any rate, that any Minister of the Crown should be associated with any company with which such a contract is placed?

Mr. Butler

I think that the best thing would be for the House to permit my right hon. Friend the Minister of Transport to make a personal statement which he desires to make. I think that would be the best answer to the hon. Gentleman's supplementary question.

Following is the statement:

  1. 1. 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.
  2. 2. 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 the Minister has a financial interest in such an undertaking, but also if he is actively associated with any body, even of a philanthropic character, which might have negotiations or other dealings with the Government or be involved in disputes with it. Furthermore Ministers should be free to give full attention to their official duties, and they should not engage in other activities which might be thought to distract their attention from those duties.
  3. 3. Each Minister must decide for himself how these principles apply to him. Over much of the field, as is shown below, there are established precedents; but in any case of doubt the Prime Minister of the day must be the final judge, and Ministers should submit any such case to him for his direction.
  4. 4. Where it is proper for a Minister to retain any private interest, it is the rule that he should declare that interest to his colleagues if they have to discuss public business in any way affecting it, and that he should entirely detach himself from the consideration of that business.
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  5. 5. Ministers include all members of the Government except unpaid Assistant Government Whips.

Directorships

6. Ministers must on assuming office resign any directorships which they may hold, whether in public or in private companies and whether the directorship carries remuneration or is honorary. The only exception to this rule is that directorships in private companies established for the maintenance of private family estates, and only incidentally concerned it trading, may be retained subject to this reservation—that if at any time the Minister feels that conflict is likely to arise between this private interest and his public duty, he should even in those cases divest himself of his directorship. Directorships or offices held in connection with philanthropic undertakings should also be resigned if there is any risk of conflict arising between the interests of the undertakings and the Government.

Shareholdings

7. Ministers cannot be expected, on assuming office, to dispose of all their investments. But if a Minister holds a controlling interest in any company considerations arise which are not unlike those governing the holding of directorships 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.

8. Ministers should scrupulously avoid speculative investments in securities about which they have, or may be thought to have, early or confidential information likely to affect the price of these securities.