Ministers of the Crown (Financial Interests) (Hansard, 2 July 1991)

§ Mr. Bob Cryer (Bradford, South)

I beg to move, That leave be given to bring in a Bill to prevent Ministers of the Crown from having outside financial interests; and for connected purposes. I hope that the Government support the Bill because it will demonstrate that they are setting their face against the prevailing greed in the boardrooms of privatised companies and that they are setting an example. So far, they have done nothing about this.

The May edition of the monthly bulletin "Labour Research" drew attention to the fact that 56 Conservative Members—it was not quite accurate because the figure is 62—are members of the Lloyd's insurance club. The 62 include 15 Ministers, among whom are four Cabinet Ministers—the Secretaries of State for Energy, for Northern Ireland, for Scotland and for Wales. On Wednesday 29 May that information appeared in a diary column in the London Evening Standard and an anonymous junior Minister was asked to comment. He said: There's no conceivable conflict of interest. Names are non-working members of Lloyds. In the past, "non-working" meant that it was usual for the names to receive their profit and loss account, called a bordereau, and regularly pick up fat cheques. But losses have been incurred, so the claim of no conflict of interest for Ministers clearly did not, does not and will not hold true.

The chairman of Lloyd's sent a letter dated 17 May to members of Lloyd's making clear his attempts to influence the Government to obtain massive tax concessions for this rich elite, who, I remind the House, have to pledge £250,000, as a minimum, to join the club. Apparently, the chairman had abandoned belief in the marketplace, the unique advantages of Lloyd's and the sturdy independence and judgment of Lloyd's members—all of which were advanced as reasons for special powers and privileges to be given in a Bill which was passed by the House in 1982, against the Labour party's opposition.

The letter stated: I have been pursuing with the Government for some time certain aspects of the tax arrangements for Names. I had a meeting with the Chancellor last week when I received a sympathetic hearing. We discussed both reserving and the extension of a relief proposed in the Budget to Names. The letter continued: The benefit to Names of such a carry-back of relief is clear. Extending the period of carry-back from one year, as at present, to three would increase the amount of income against which relief could be sought and repayment claimed. It would increase the likelihood that losses at Lloyd's would be relieved in full. That could amount to more than £100 million. That was the claim that the chairman was seeking by attempting to influence the Government. He concluded his letter by saying: When I met the Chancellor I put to him in some detail the case for the provision to apply to the underwriting losses of Names. I received, as I have said, a sympathetic hearing and I hope that I shall be able to report a successful outcome to you in my June address. In case hon. Members think that Lloyd's is at a disadvantage, it should be made clear that Lloyd's underwriters are, in effect, entitled to the same relief' for a 185 trading loss as any other trader, including premiums of £3,000 a year for stop-loss policies which eradicate losses of more than £40,000.

The rules governing the conflict between Ministers' public duty and their private interests are set down in a confidential document called "Questions of Procedure for Ministers". A resume was sent to the Salmon royal commission on standards of conduct in public life, but curiously the commission did not include it as an appendix. The relevant section is paragraph 76 in the document issued by the former Prime Minister, Lord Callaghan, but the principles set out were summed up as follows: Ministers must so order their affairs that no conflict arises, or appears to arise, between their private interests and their public duties. Paragraph 76, which is headed "'Names' at Lloyds", states: A Minister cannot properly continue to be a 'name' at Lloyds while holding office as Prime Minister, Chancellor of the Exchequer or Secretary of State for Trade … All Ministers are therefore required, on appointment whether to their first or to any subsequent Ministerial office, to obtain the permission of the Prime Minister before continuing a connection with Lloyds, however nominal, which they had established before appointment or establishing any such connection during their term of appointment. Clearly, successive Prime Ministers have allowed the 15 Ministers to retain their holdings in Lloyd's after the Ministers had approached them under the rules.

For the avoidance of doubt, the Bill would require all Ministers to resign from Lloyd's. It may be argued that the Prime Minister's rules are adequate, but they are secret and we do not know how strictly they are applied. I have received many letters about the matter since it was raised in the House. One constituent said that he has been making a loss on the pools and if tax concessions are given to members of Lloyd's, he too deserves one.

I want to read one letter in particular which shows that the conflict of interests does not stop at the Prime Minister, the Chancellor and the Secretary of State for Trade and Industry. The writer said: I would only add that, if such an approach can be justified by Lloyd's in respect of current Names, then one is entitled to ask why no such effort was made on behalf of victims of the PCW scandal … who had ultimately to bear the full brunt of Cameron-Webb's dishonesty, without receiving even an expression of sympathy, let alone any form of monetary contribution, from the Government. The whole business stinks, the more especially as it looks very much as if the Names who are Ministers are taking advantage of their political offices for their private gain. In this context I cannot forget how different was this 186 Government's reaction to the Cameron-Webb affair, when the then Attorney-General not only refused to take any steps to have that criminal extradited from the United States but even threatened to enter a 'nolle prosequi' if any private person were to attempt to institute any proceedings against him. I shall read another section of the letter in case anyone thinks that it was written by a left-wing critic of Lloyd's. The writer said: I am in no way a man of the far Left—I was, indeed, a Tory MP for a long time". I leave it to the House to guess which one.

There is a long history of trying to prevent Government Ministers from legislating for their own benefit. Campbell-Bannerman made a statement in 1906, as did Neville Chamberlain in 1939 and Winston Churchill in 1952. Those statements followed conflicts of interests among Ministers.

My Bill would provide a remedy for the present conflict over Lloyds by requiring Ministers to divest themselves of membership of Lloyd's. It would incorporate the relevant rules as currently applied by the Prime Minister and would provide powers for him to extend prohibitions by the affirmative resolution. It would be public and certain and it would, I hope, ensure legally that conflicts of interest could not occur in the future.