Written evidence from Transparency International UK (LAN0007)

1. INTRODUCTION

1.1. Transparency International (TI) is the world’s leading non-governmental anti-corruption organisation. With more than 100 chapters worldwide, TI has extensive global expertise and understanding of corruption.

1.2. Transparency International UK (TI-UK) is the UK chapter of TI. We raise awareness about corruption; advocate legal and regulatory reform at local, national and international levels; design practical tools for institutions, individuals and companies wishing to combat corruption; and act as a leading centre of anti-corruption expertise in the UK. We are independent, non-political, and base our advocacy on robust research.

1.3. TI-UK welcomes the Committee’s inquiry into the Commons standards landscape. We would welcome the opportunity to provide oral evidence or further written briefings to this inquiry upon request.
 

2. WHAT DOES THE CURRENT LANDSCAPE OF BODIES AND PROCESSES REGULATING MPS (INCLUDING MPS WHO ARE ALSO MINISTERS) LOOK LIKE TO THE PUBLIC?

2.1. While the majority of MPs may enter politics to advance the public good, it is misconduct and political scandal that more often enter the public consciousness and shape public attitudes. Recent polling suggests the British public are unconvinced that the current system for regulating MPs and Ministers is effective in upholding standards in public life:

• Six in ten think our system of governing is rigged to the advantage of the rich and powerful, with 72% saying this system needs ‘quite a lot’ or ‘a great deal’ of improvement.[1]
• Only 35% trust the national government (lower than the OECD average of 41%).[2]
• 76% don’t trust MPs to take decisions that will improve their lives, while 73% don’t trust the Government on the same measure.[3]

2.2. These sentiments should not come as a surprise. The safeguards against abuse of office in Westminster are riven with loopholes that leave the door open to corruption and undue influence. Reliance on long-standing conventions to maintain ethical standards in public life has proven insufficient, while the mechanisms for ensuring accountability within the executive are particularly threadbare.

2.3. The Committee has led noble and welcome efforts to toughen the Commons’ code of conduct. And when tested, MPs have proven willing to hold those to account those who have exploited their privileged position for private gain. However, it is not a foregone conclusion that those abusing their power will be held to account, and it remains unclear how much the public recognise these attempts to restore propriety in politics. What is clear is that there is a duty on politicians to win back the public’s trust in our democratic institutions and change our political culture for the better.

2.4. Failure to respond to this challenge risks exacerbating an existential crisis in our democracy: low trust in public institutions in the UK has been associated with ‘anti-system’ sentiments and an openness to radical solutions that challenge democratic norms.[4]

2.5. While Britain has offered its unwavering support for democracy and the rule of law around the world, it should also do more to bolster it at home. Improving safeguards against abuse of office is crucial to this mission. In summary, we recommend this includes:

• a step change in ministerial accountability
• more robust policing of the revolving door between public and private sectors
• greater transparency over financial interests held by those in high office
• removing the corrosive influence of big money in politics
• bringing lobbying out of the shadows

2.6. Below we include more detail on these proposals and the issues they seek to address.

3. WHILST THE HISTORY OF THE STANDARDS SYSTEM IN PARLIAMENT AND GOVERNMENT IS PIECEMEAL, DOES THE SYSTEM HAVE COHERENCE? ARE THERE OBVIOUS ANOMALIES?

3.1. Transparency International UK has identified several anomalies in Westminster’s standards system, which manifest either as loopholes or rules being broken without consequence. We note enforcement is as essential as a robust set of rules and codes of conduct; without the former, the latter have little bearing on standards, resulting in an incoherent and ineffective system overall.

3.2. We have identified five key areas where these anomalies are present and pose a significant corruption risk:

Ministerial oversight

3.3. As the most senior figures in our government, ministers including the Prime Minister are rightfully held to high standards of conduct. However, to ensure high standards are more than words on paper, enforcement must be consistent and provide a credible deterrent to rule-breaking.

3.4. Our analysis has highlighted that in the past five years, there have been at least 40 potential breaches of the Ministerial Code that have not been investigated.[5] These findings highlight a significant accountability gap in ministerial oversight and raise questions as to the independence of the Independent Adviser on Ministers’ Interests, which exists – and conducts investigations into alleged impropriety – at the whim of the Prime Minister. This role experiences a degree of precarity as the post of the Adviser is not required to exist in any legislation. Without a statutory basis, and in requiring the permission and patronage of the Prime Minister of the day,[6] this role cannot reliably fulfil its primary function, which is to conduct impartial investigations into potential breaches of the Ministerial Code.

3.5. Recommendation: The Independent Adviser on Ministers’ Interests should be put on a statutory footing and be truly independent, with the ability to initiate investigations. They should have the resources and powers to do so properly, and the ability to report findings and recommend sanctions without the Prime Minister’s permission.

3.6. Even when breaches of the ministerial code are proven, this has too often had little, if any, serious consequence for those involved. This shows a major flaw in our current arrangements for deterring impropriety in high office. So long as the Prime Minister remains the sole enforcer of their code – a code which also depends on their whim – egregious behaviour can become normalised in the absence of serious consequence.

3.7. We note above that the Commons has proven more adept at holding MPs to account for similar behaviour, and would suggest that this is largely attributable to the independence of the Parliamentary Commissioner for Standards and this Committee.

3.8. In the absence of both enforcement and robust rules in the executive, we have a perverse situation whereby there is an inverse relationship between the amount of power and responsibility a politician has and the degree to which they are held accountable.

3.9. While the Prime Minister should retain the right to form their government and impose a range of sanctions for breaches of the Ministerial Code, there should also be an alternative avenue for redress to prevent Prime Ministers consistently failing to sanction ministers for serious breaches of the Code. This ‘backstop’ could be a Parliamentary committee that has the power to call in a sanction should the PM prove unwilling to enact consequences for breaches of the Code of Conduct.

3.10.                   Recommendation: There should be an alternative avenue for redress when the Prime Minister is not enforcing the Ministerial Code.

Post-public employment

3.11.                   There are clear benefits to the movement of people between government and other areas of work. Those outside government coming in bring vital technical expertise to policymaking, while a government can more easily find well-rounded candidates if they have a real prospect of returning to another form of work when their career in government comes to an end. However, the revolving door between the public and private sectors can generate conflicts of interest, which risk distorting government policy in favour of private interests over the public good. This can pose a significant risk to taxpayers’ money, as evidenced by the Greensill affair,[7] and severely damage public confidence in government.

3.12.                   While the Advisory Committee on Business Appointments (ACOBA) was designed to help mitigate this risk by advising former Ministers and very senior civil servants about the suitability of post-public employment, this arrangement has proven insufficient. ACOBA’s rulings are frequently ignored, if they are even sought to begin with,[8] and as a purely advisory body ACOBA has had no teeth with which to enforce its rulings.

3.13.                   As a result, there has been very little control on the movement of Ministers between the public and private sectors. While the Government’s recent commitment to require Ministers to sign a ‘deed of undertaking’ that binds them to the Business Appointment Rules is welcome,[9] the revolving door will continue to be beset by scandal so long as the body responsible for regulating politicians’ post-public employment exists outside of any statutory framework. Its lack of a legislative footing, like so many elements of executive oversight, leaves it vulnerable to the whim of those it regulates.

3.14.                   Recommendation: The Advisory Committee on Business Appointments (ACoBA) should be replaced with a statutory body responsible for preventing the abuse of the revolving door.

3.15.                   Given the pace of ministerial changeover in recent years, the scale of risk associated with the revolving door has increased significantly. The restrictions on former ministers lobbying their past colleagues in government also remains too limited, covering only two years after leaving office. As recognised by the CSPL, this may be insufficient in some cases with a longer period needed. [10] We agree with their analysis that the post-public employment restrictions on lobbying should be extended to at least five years.

3.16.                   We also note that the Greensill scandal exposed the risks associated with allowing some of the most senior ministers in government to lobby former colleagues beyond five years. The authority and familiarity they may have, even after such a passage of time, can allow them to secure privileged access and potential influence over decisions involving substantial amounts of public money.

3.17.                   Recommendation: The post-public restrictions on lobbying by former ministers and senior officials should be extended to at least five years, with an option to impose much longer restrictions on lobbying for the most senior roles, such as former Prime Ministers and Chancellors of the Exchequer.

Reporting requirements

3.18.                   Upon entering Downing Street in 2019, then-Prime Minister Boris Johnson set out to refurbish his new residence. For this undertaking, Conservative backbench peer and then-Conservative Party Vice-Chair Lord Brownlow paid the Prime Minister’s decorators, directly and indirectly, a total sum of £112,549.12, which the Prime Minister later reimbursed.[11] After a text exchange between Boris Johnson and Lord Brownlow surfaced, in which the two discussed Lord Brownlow’s payment for the Downing Street wallpaper and Boris Johnson’s interest in Lord Brownlow’s Great Exhibition 2 project,[12] questions arose as to whether the loan could be understood as part of a quid pro quo.
 

3.19.                   While the Independent Adviser on Ministers’ Interests determined there was no conflict of interest, questions remain about how these funds were accounted for. Although the Electoral Commission found the Conservative Party in breach of donation declaration rules, and fined the party a total of £17,800, there has been no equivalent investigation or sanction for the de facto loan received by Boris Johnson for these works. Despite him being the principal beneficiary of the renovations, and seemingly the person ultimately liable for paying the invoices, he has not reported the financial support he received.
 

3.20.                   Under the Political Parties, Elections and Referendums Act 2000 (PPERA), any holder of elective office or party member must report substantial donations or loans they receive if they are ‘in connection with their political activities’.[13] Undoubtedly, if the Prime Minister had invoices paid for him by others that he later himself paid in full, this would be reportable. He is both a holder of elective office and a member of a political party, and his position as Prime Minister (and by extension his residence) is unquestionably in connection with his political activities. The money would also be a donation (non-commercial loan) or a regulated transaction (commercial loan). Confusion arises as to where he should have reported this information, and who is responsible for investigating and sanctioning any breaches of these rules.
 

3.21.                   Feasibly this could have either been reported to the Electoral Commission directly, or to the Registrar of Members’ Financial Interests under arrangements to end the dual reporting of donations and loans to both authorities.[14] So far it has not been reported to, or published by, either. Claims that this was a ministerial matter and therefore not subject to these rules does not have a foundation in law. There needs to be clarity about where this benefit should have been reported, and who is responsible for investigating and sanctioning any breach of these rules.
 

3.22.                   Recommendation: The Parliamentary Commissioner for Standards and the Electoral Commission should confirm how Boris Johnson should have accounted for benefits he received in relation to the refurbishment of his Downing Street flat while Prime Minister. Learnings from this exercise should be codified into Memorandums of Understanding (MoUs) between the Electoral Commission, the House of Commons, and the UK Government outlining how benefits received by ministers are to be treated and reported under PPERA.
 

3.23.                   As the Committee has noted in its previous report on the Code of Conduct, the reporting of ministerial interests is both slower and less detailed than that of MPs.[15] This is both perverse and counterintuitive – those with more power should be subject to higher standards of disclosure and accountability. Were the UK Government to dramatically improve its publishing of transparency disclosures in a timely manner, with more independent oversight over compliance of a strengthened ministerial code, there could be an argument to maintain two separate reporting regimes. However, in the absence of such progress, we continue to agree with the Committee’s view that benefits received by MPs in their ministerial capacity should be reported to the Commons Register of Members’ Financial Interests (RMFI).
 

3.24.                   Recommendation: Benefits received by MPs in their ministerial capacity should be reported to the Commons Register of Members’ Financial Interests (RMFI).

Restrictions on foreign money entering UK politics

3.25.                   A key intention of the rules controlling political donations and loans is that they come from sources with a genuine connection to the UK; for example, an individual on the UK electoral register or a UK registered trade union. However, there are some clear loopholes in the current law which undermine this intention.
 

3.26.                   Currently, there are no controls on who can pay for overseas trips taken by MPs, party members and other holders of elective office. It is not uncommon for foreign governments to fund these visits, either directly or indirectly, including many with questionable records on corruption and human rights.[16] These practices risk members falling foul of the paid advocacy rule[17], burnishing the reputations of corrupt and repressive regimes, and undermining confidence in the integrity of our representatives and our democratic institutions.
 

3.27.                   Recommendation: Parliamentarians should be prohibited from accepting paid foreign travel costing over £500 other than from prescribed organisations. Prescribed organisations should be:

• acting in the UK national interest;
• those of which the UK or UK Parliament is a full member, for example, the InterParliamentary Union;
• or an organisation that would otherwise be sufficiently regulated to provide this safeguard, for example political parties.
   

3.28.                   It is also far too easy to move money of unknown or questionable provenance into our political system through companies and Limited Liability Partnerships (LLPs). To make a donation, businesses only have to be registered in the UK and ‘carrying on business’ – a very low threshold that does not take into account a company’s genuine economic activity here.
 

3.29.                   For example, Aquind Limited is a UK registered company which has recently been involved in a bid to build a power interconnector between Normandy and Portsmouth worth £1.2 billion.[18] The company itself has donated to six MPs directly, and nine local constituency associations.[19] Together with a connected company, they have donated to 34 MPs in total since the project began.[20] Two Ministers within the Department for Business, Energy and Industrial Strategy (BEIS) recused themselves from making a decision on the pipeline because their local party association had received donations from Aquind and connected companies.[21]
 

3.30.                   Aquind’s accounts filed with Companies House reveal that it runs at a loss and is funded by loans from a parent company, OGN Enterprises Ltd. In 2019 alone, Aquind received loans of £11,410,079 from OGN.[22] OGN Enterprises is registered in the British Virgin Islands, where there is no requirement to publish annual accounts and the listed ‘Controlling party’ is a company based in Luxembourg.[23] This means it is very difficult to establish where the money that finances Aquind, and is eventually used as political donations, is really coming from. What is clear from its accounts is that its donations have not derived from profit generated in the UK.
 

3.31.                   The CSPL also recognises this issue, and agrees there is a need to tighten the law so that legal entities can only make donations out of profit they generate from activities within the UK.[24]
 

3.32.                   Recommendation: Donations made by UK companies and limited liability partnerships (LLP) should only come from sources generated by profits made from genuine commercial activity carried out within the UK.

Lobbying transparency

3.33.                   We contend that the UK’s framework for disclosing the lobbying of decision-makers is inadequate and unfit for purpose. It does little to help the public understand who is lobbying, when, for what purpose and how. The current framework relies on a hypothetical connection between the statutory register of consultant lobbyists and quarterly departmental disclosures. However, on closer scrutiny, meaningful linkages between the two datasets and their solving of the problem – the opacity of attempts to influence policy, procurement, planning and other major decisions – are a fiction. It is hard to disagree with the CSPL’s assessment that ‘[t]ransparency around lobbying is poor’.[25]
 

3.34.                   The UK needs a more comprehensive and meaningful lobbying transparency register. We provide a more detailed breakdown of the current arrangement’s flaws elsewhere[26] along with detailed solutions, and would be happy to provide more details to the Committee upon request.
 

3.35.                   Recommendations: Lobbying should be made more transparent through a reformed lobbying register, which is more comprehensive and meaningful, and allows the public to understand who is lobbying decision-makers, when, how and for what purpose.
 

4. IS THERE ANY SCOPE FOR SIMPLIFICATION OR CONSOLIDATION? WHAT WOULD BE THE BENEFITS AND WHAT WOULD BE THE RISKS?
    

4.1. We can see there could be potential benefits for simplifying and/or consolidating the current patchwork of advisory, supervisory and regulatory bodies in politics. Having a one-stop-shop for allegations and complaints would provide a level of simplicity and clarity for those outside of Westminster who do not know or understand its nuances. However, this also risks creating a single point of failure and potential political capture, and would not recognise the particular reasons and contexts for establishing these bodies.
 

5. HOW DO POLITICAL PARTY PROCESSES AND FORMAL REGULATORY PROCESSES INTERACT? SHOULD THERE BE GREATER CONSISTENCY IN INTERNAL PARTY PROCESSES?
    

5.1. The practice of soliciting substantial donations, often from a relatively small donor base, significantly increases the risk, perception, and ostensibly the reality of corruption within our democracy.
 

5.2. The way in which political parties offer privileged access to political elites in return for substantial donations gives the overwhelming impression that this also confers others benefits; for example, access to privileged information or preferential treatment to a connected company. These practices increase the risk of behaviour that breaches the parliamentary and ministerial codes of conduct, and possibly even criminal law. Similarly, the almost certain[27] practice of rewarding major donors with peerages is a criminal offence, even if it is one that is very difficult in practice to prove beyond reasonable doubt.
 

5.3. To help reduce the perception and reality of quid pro quos such as the above, parties should seek to diversify their donor base. We recognise this is not an easy task, and general scepticism about politicians and their parties provides strong headwinds against fundraising campaigns. However, failing to tackle the root cause of so many scandals over the past decades is likely to further erode public trust.
 

5.4. This should be coupled with legislative change that not only limits how much any individual or organisation can donate in any year – and therefore how much potential leverage they may have with senior politicians – but also tempers the demand for this money in the first place. The controls on campaign spending, especially at major national elections, are far too loose and do not control political expenditure effectively. These should go alongside higher levels of disclosure – equalising the permissibility and reporting thresholds – and transitional arrangements to ensure parties can adjust to this new system. Previous recommendations from the CSPL echo these sentiments and form the core of a package of reforms to curb the corrosive influence of big money in politics.[28]
 

5.5. Recommendation: Political spending and donations should be capped in line with recommendations by the Committee on Standards in Public Life, alongside greater transparency over the source of these funds, to mitigate the structural corruption risks associated with big money in politics.
 

6. ARE THERE WAYS IN WHICH DIFFERENT PROCESSES, OR THE RELATIONSHIP BETWEEN DIFFERENT BODIES, COULD BE STREAMLINED FOR MPS?
    

6.1. The Committee has taken the welcome and positive step to move the system for publishing members’ financial interests into the digital age. While implementation of these changes remain pending, consideration should be given on how this provides an opportunity to increase the speed and efficiency at which MPs can report their financial interests, and how this information can be forwarded on to the Electoral Commission where relevant. There are significant potential administrative efficiencies that can be gained here, and we continue to offer our support to clerks and those delivering these reforms.
 

7. COULD THE ROLE AND REMIT OF DIFFERENT BODIES BE BETTER EXPLAINED OR PROMOTED?
    

7.1. Given the frequency with which MPs have fallen foul of parliamentary rules, it seems prudent to require them to take mandatory top-up training on the Code of Conduct during their terms in office. This could be coordinated with other standards bodies to provide them with a holistic view of their obligations.
 

8. COULD THERE BE AN EASIER WAY FOR MEMBERS OF THE PUBLIC TO MAKE COMPLAINTS OR RAISE CONCERNS ABOUT CONDUCT, WHERE THEY ARE NOT SURE WHICH BODY HAS OVERSIGHT?
    

8.1. Potentially; with so many different bodies with different remits, it may not be clear to the public who to talk to. A chat bot or phone system that can help advise members of the public as to how to lodge a complaint or concern could ultimately save time and money.
 

9. DOES THE RECALL OF MPS ACT 2015, AND OTHER LEGISLATION RELATING TO THE DISQUALIFICATION OF MEMBERS, OPERATE SATISFACTORILY? HOW COULD IT BE IMPROVED?
    

9.1. Recall petitions have the potential to act as a deterrent against impropriety, and enable the public to hold elected representatives to account between elections. In some instances, those who would be subject to a recall petition have resigned before this process has started. However, there are others where a recall petition was triggered yet the MP who committed an egregious breach of parliamentary rules still remains in office. This highlights the tension between seeking a democratic mandate for removing a member from Parliament and providing a firm deterrent against serious misconduct. Parliament may wish to consider whether there are some forms of impropriety that are so egregious that they merit expulsion without recourse to recall.
 

10. WHAT CAN BE LEARNED FROM PARALLEL PROCESSES IN OTHER PARLIAMENTS/ASSEMBLIES WITHIN THE UK AND ELSEWHERE?
     

10.1.                   We note that lobbying registers in the US, Canada, Ireland and even Scotland are all more comprehensive in scope and operation that the UK’s. We attach below an Annex containing a summary cross country comparison, and would be happy to provide a supplementary including more detail if the committee desires.

Annex 1 - Lobbying Registers: An International Comparison

25 September 2023