A year ago I wrote to my MP and the Parliamentary Commissioner for Standards.
Here is my first letter, which sets out the background:
_________________________________________________________________________________
03/03/18
Kathryn
Stone OBE
Parliamentary
Commissioner for Standards
House of
Commons
London
SW1A 0AA
cc Mr
Jacob Rees-Mogg MP
House of
Commons
London
SW1A 0AA
Dear Commissioner
Complaint regarding the
failure of Mr Jacob Rees-Mogg MP to declare his financial interest
This allegation relates
to three occasions on which Mr Jacob Rees-Mogg, MP for North East Somerset, has
spoken in Parliamentary debates without declaring his financial interest in the
matter under discussion.
His financial interest
In 2007, Mr Rees-Mogg helped to found Somerset Capital Management[1]
(SCM), and remains a major shareholder in the firm, which specialises in
emerging markets - that is, markets that are not yet fully developed, but are
expected to become so in coming years - for example markets in Brazil, Russia,
India and China.
Mr
Rees-Mogg received more than £178,000 in 2017 from SCM according to the
record in the Register of Members' Interests.
In
October 2017 SCM had more than $8.9 billion under management, of which $4 billion
was in emerging markets[2]. SCM is
managed through subsidiaries in the tax havens of the Cayman islands and
Singapore.
SCM
stands to gain significantly in the event of a hard Brexit (defined here as one
in which we leave the Single Market and any Customs Union with the EU) as
British traders in that event will find business harder to transact with the
EU, and many will choose to go instead into emerging markets[3].
It is frequently claimed by those in favour of leaving the EU that British
trade will flourish in the global market, of which emerging markets are an
important part at this time.
As a major shareholder in SCM Mr Rees-Mogg therefore stands to gain financially from a hard Brexit.
As a major shareholder in SCM Mr Rees-Mogg therefore stands to gain financially from a hard Brexit.
The Rules
Members of Parliament
are elected in order to serve the best interests of the people that they
represent.
They
must not use the power given to them by the people to benefit themselves or
their family.
This
principle is set out in the Code of Conduct for MPs[4].
“Holders of public office should take decisions solely in
terms of the public interest. They should not do so in order to gain financial
or other material benefits for themselves, their family, or their
friends". (IV Selflessness)
|
“Holders of public office have a duty to declare any
private interests relating to their public duties and to take steps to resolve
any conflicts arising in a way that protects the public interest”. (IV Honesty)
Members “shall always be open and frank in drawing attention
to any relevant interest in any proceeding of the House or its Committees, and
in any communications with Ministers, Members, public officials or public
office holders”. (Rules of conduct 13)
This means an oral declaration of interest at the time of
communication, since it is unreasonable to expect all Ministers, Members,
public officials or public office holders to be aware of every entry in the
Register of Members interests by the MP. (Guide to the Rules, Chapter 2.2 (“Members,
the public and others are made aware at the appropriate time, in proceedings of
the House and on other occasions, of any interest relevant to those proceedings
or to the actions or words of a Member. The requirement to declare an interest
complements the registration requirements”).
Three
occasions when these rules were broken
The Hansard record shows that Jacob
Rees-Mogg, MP for North East Somerset, has failed to declare his financial
interest orally at the appropriate time when debating in Parliament on Brexit
on three occasions.
First, Jacob Rees-Mogg is
recorded in Hansard in a debate on Exiting the European Union (26 Jan 2017) as
saying “selling into the single market is far preferable to being a member of it, because
it is a highly regulatory, bureaucratic mechanism on which 87% of British
businesses—the British economy—are not reliant”[5].
He is arguing that Britain should not be a member of the
single market. He does not at the time of speaking declare his financial
interest as a major shareholder of SCM, which would benefit as a result of
Britain leaving the single market. The test of relevance is satisfied in that
his interests might reasonably be thought by others to influence
his or her actions or words as a Member . Indeed the news report making the connection between his position as a
keen advocate of leaving both the EU single market and the EU Customs Union was
written because with this conflict of interest in mind.
Second, Jacob Rees-Mogg said in a debate on the Autumn
Statement (23 November 2016) “Might we be able to take a slightly more
optimistic tone and, with the freedoms that we have outside the customs union
and the single market, be able to solve the productivity problem?”[6].
He argues here for exiting both the customs union and the
single market. Again, he is in effect arguing for an outcome that will be to
the financial interest of SCM, and therefore of himself. Again the test of
relevance is satisfied as laid out above.
Third, he said (23 November 2017) “the real
opportunity that comes from Brexit is freely opening up our markets to the rest
of the world. We must remember that the customs union... is actually a protectionist union that stops people in the United
Kingdom from buying the cheapest available goods and that, by and large, it
protects industries that the UK does not have. The overwhelming majority of the
protections under the customs union are for things such as German coffee
processors or Spanish orange growers—the types of things that we are not doing.
Our industries receive marginal protection from the customs union, but at a very high cost to British
consumers—it is thought that the cost for food is 20%, and that the next
highest level of tariffs is on clothing and footwear”[7].
He is arguing that Britain should not be a member of the
customs union. He does not at the time of speaking declare his financial
interest as a major shareholder of SCM, which would benefit as a result of
Britain leaving the single market. The test of relevance is satisfied in that
his interests might reasonably be thought by others to influence
his or her actions or words as a Member . Indeed the news report making the connection between his position as a
keen advocate of leaving both the EU single market and the EU Customs Union was
written because with this conflict of interest in mind.
All three of these interventions satisfy the test for
relevance, (Guide to the Rules, Chapter 2, 4(c) ), since he is at “the stage where the Member has a reasonable expectation
that a financial benefit will accrue”.
Public perception is important: (Guide to the Rules, 5 )
“The test of relevance is whether those interests might reasonably be
thought by others to influence his or her actions or words as a Member”.
Conclusion
These three
instances show that Mr Rees-Mogg has, in the course of Parliamentary debate, advocated that the UK
should withdraw from both the single market and the customs union, and in doing
so did not declare his own particular financial interest in the matter under discussion.
This is a
matter of great importance. The MP expenses scandal of 2009 has greatly lowered
the esteem of all MPs in the eye of the public, even though only about 10% of
MPs were found guilty. There is a widespread cynicism among the public based on
the idea of MPs being “only in it for themselves”, that leads to nihilism and
withdrawal from the electoral process, which is not good for the health of
democracy in our nation.
It may be
argued in response to this allegation that if MPs were to adhere religiously to
the Rules, Parliamentary debate would be held up by overly frequent
declarations of interest. Such an objection misses the point made about the
principles at the beginning of this complaint. It is the correct perception of
the common person that MPs should be there to represent the interests of their
constituents, not to grow their business empires. If MPs find these rules too
onerous, they can choose either to drop their business interests or choose not
to stand for Parliament. In the view of the common people, strict application
of the Rules of Conduct can only serve to improve the way we are governed.
It is not
suggested here that Mr Jacob Rees-Mogg is the only, nor even an egregious
example of this kind of conduct by MPs, but his case is taken as a clear and
concrete example for the Parliamentary Commissioner for Standards to
comment and act upon.
I look
forward to your favourable response to this case.
Yours
sincerely
Dr Richard
Lawson MB BS, MRCPsych
[1] Register of Members interests
https://www.parliament.uk/mps-lords-and-offices/standards-and-financial-interests/parliamentary-commissioner-for-standards/registers-of-interests/register-of-members-financial-interests/
Open the 2017 link, and search “Mr Jacob Rees-Mogg”
[3]
https://www.thelondoneconomic.com/news/jacob-rees-mogg-line-huge-personal-windfall-britain-exits-single-market/07/02/
[5] https://hansard.parliament.uk/Commons/2017-01-26/debates/082F22CA-E500-4EF4-B780-20CFFB345477/SingleMarketAccess?highlight=%22single%20market%22#contribution-ADD1F17F-B3DB-46FC-ACC7-8A1C501EAC41
[6] https://hansard.parliament.uk/Commons/2016-11-23/debates/4F39F2C9-583D-407B-A529-3956F6A927F1/AutumnStatement?highlight=%22single%20market%22#contribution-574FC8F1-BF65-4974-9661-9912B51020C5
[7] https://hansard.parliament.uk/Commons/2017-11-22/debates/8945A0FD-E24C-4584-B180-0E309B69E555/BudgetResolutions?highlight=%22customs%20union%22#contribution-E423424E-4069-40A8-B3A8-049251EF216D
Kathryn Stone replied "In Confidence", so I cannot put up her replies, but I wrote four more times.
Here is the last letter that I sent:
____________________________________________________________________________
08/06/18
Kathryn Stone
OBE
Parliamentary
Commissioner for Standards
House of
Commons
London SW1A
0AA
Your
reference PCS 875(4) 2017-18
Thank you for
your letter of 4th June.
I understand
that you are asking me to provide evidence relating to something that will
happen in the future. I have pointed out that it is impossible to provide
conclusive evidence about a matter that lies in the future.
Allow me to
set out the evidence in a numbered sequence:
1.
Jacob Rees-Mogg MP (JRM) is a major shareholder
in Somerset Capital Management (SCM)
2.
SCM operates in emerging markets
3.
Emerging markets will become an active focus for
British businesses in the event of a hard Brexit
4.
SCM is a well-run company
5.
SCM will therefore benefit financially from a
hard Brexit
6.
JRM will therefore benefit financially from a
hard Brexit (see 1).
7.
JRM should therefore declare his interest when
he speaks in favour of a hard Brexit.
To a
reasonable observer, the logic of these seven steps is unassailable. The only
weakness that I can see is in (4). If I provided evidence on this point, would
this be enough for you to open an inquiry?
Let me ask
this question: If, after a hard Brexit, it is clear that SCM (and therefore
JRM) has prospered from increased
activity in emerging markets, will this constitute evidence that JRM
should have declared his interest? In this case, what sanctions would you apply
to JRM?
I apologise
for what you may perceive as importunity. Please accept that I genuinely do not
understand what evidence you need for an event that lies in the future. I have
been a District Councillor, and thought that I understood declaration of
interest, but it seems to operate differently in Parliament. Your answers to
the three questions I have put in this letter will I hope assist in my
understanding.
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