MINISTERS (SHARES AND DIRECTORSHIPS) (Hansard, 20 March 1980)

§ The Prime Minister

The rules are based on the principle that Ministers must so order their affairs that no conflict arises, or appears to arise, between their private 293W interests and public duties. The detailed rules are as follow:— Ministers must on assuming office resign any directorships which they may hold, whether in public or in private companiees 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 in 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 of there is any risk of conflict arising between the interests of the undertakings and the Government. 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. There may also be less clearcut cases where a Minister would feel it appropriate to place his holding in the hands of trustees. 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 those securities.

The background to these rules and their historical development are described in detail in a memorandum submitted to the Royal Commission on Standards of Conduct in Public Life by the then Secretary of the Cabinet in March 1975. There is a copy in the Library.