As published onopendemocracy.net, Thursday 15 July, 2021.
More than 40 members of the House of Lords may be in breach of transparency rules, for failing to declare details of private companies that they run. This would make it one of the most wide-scale breaches of transparency rules ever reported in Westminster.
The peers include Eric Pickles, the chair of Westminster’s lobbying watchdog, who owns a consultancy business with his wife.
Rules say that, if a lord is a company director, then they should “give a broad indication of the company’s business, where this is not self-evident from its name”. But apart from stating that his business, Oakworth Services Ltd, is a “consultancy”, Pickles has not disclosed what area of work the firm is involved with.
Many other peers have included no description at all of the private companies they run – including Conservative donor Lord Bamford, the entrepreneur Baroness Mone, and Labour peer Lord Carter of Coles.
Carter runs an offshore company called Primary Group Limited, based in the tax haven of Bermuda.
Although he has declared his directorship, he has not said what the company does. Primary Group Limited was named in the Paradise Papers leak, relating to secretive offshore investments, although there is no suggestion of any wrongdoing.
Another peer, Lord Brennan, is chairman of a private business development firm which offers to “develop and maintain our clients’ relations with governments, both in the UK and overseas”, according to its website. But the register of interest gives no details about the nature of the firm’s work.
Lord Polak is said to have run “the most effective lobbying operation at Westminster”, and claimed he has an “encyclopedic knowledge” of Conservative donors. He is the director of a firm called Morpheus III Limited, but does not give any indication of what it does.
Several major political donors, such as Lord Bamford, also face questions about the way they have declared their financial interests.
Bamford owns the digger firm JCB and has given millions to the Conservative Party, personally and through his company. But his register of interests also lists a directorship in a company called Editallied Limited, without providing any further details.
Meanwhile, Margaret Thatcher’s former adviser, Lord Powell of Bayswater, now sits on the board of directors for the Paris-based Financière Agache which owns the luxury fashion house, Christian Dior. He provides no description of the company on the official Register of Interests.
In total, openDemocracy has identified 54 financial interests from 42 peers that may be in breach of the rules.
They also include the Conservative hereditary peer Viscount Trenchard, who says he is chairman and director of a firm called Stratton Street PCC Limited. He gives no further information, although it appears to be an investment firm based offshore in the tax haven of Guernsey.
But the companies of other peers have very little online presence, and it is impossible to tell what work they do.
For instance, Conservative Baroness Mone lists a directorship at a firm called MMI Global Unlimited. But as well as her register of interests not providing any description, there also seems to be very little information online. According to Companies House, it is based in London and describes its work as “other business support service activities not elsewhere classified”.
Margaret Hodge, the former chair of the Public Accounts Committee, said: “The rules state clearly that if a peer is a director of a company, they are expected to explain what that company does.
“Failure to do so is of course not itself an indicator of wrongdoing, but the sheer scale of the problem shows that there is a problematic lack of transparency in the Lords. It’s especially concerning to see major Tory party donors or close pals of the PM on this list. The whole thing leaves a bad taste in the mouth.”
The Labour MP added: “This important investigation by openDemocracy raises serious questions over the veracity of some entries in the register of interests in the Lords.”
Tommy Sheppard, the SNP's Constitutional Affairs spokesperson, said peers’ failure to properly declare their financial interests highlights how “undemocratic” and “utterly unaccountable” the House of Lords is.
“These latest findings on the shocking lack of transparency around financial interests adds to the growing list of reasons for why this outdated institution needs to be scrapped,” he said.
A recent ruling by the House of Lords Commissioner for Standards has confirmed that failure to provide details of private companies can be a breach of the rules. An investigation into Lord Stevens of Kirkwhelpington last year said that he “did not indicate the nature of the consultancy or advice given as required” in relation to a consultancy business. The peer did not contest the allegations and issued a “formal and wholehearted apology”.
Sue Hawley, senior director at Spotlight on Corruption, said that parliamentarians should be leading by example with standards and integrity.
“The constant drip-feed of scandals about politicians breaching rules is seriously corroding trust in politics and government,” she said.
“Meeting basic transparency rules in financial interest declarations is a fundamental aspect of a healthy democracy, and there need to be much stronger sanctions for those that consistently fail to do so."
Responding to openDemocracy’s investigation, Lord Pickles said his company, Oakworth Services Ltd, has not received any income since he started chairing Westminster’s lobbying watchdog, the Advisory Committee on Business Appointments, and that he has given up all paid outside interests.
Lord Powell of Bayswater claimed there was “adequate information” available online about the company he directs. “It is simply an intermediate financial holding company in the control chain between the Arnault family and LVMH (Louis Vuitton Moet-Hennessy) on whose board I also sit, and similarly declare in my interests,” he said.
Lord Polak said: “Morpheus III ltd was formed to look after future possible collaborations in professional, scientific and technical services. It has never traded and is a dormant company.”
A spokesperson for Baroness Mone said she was not aware that details of her company were omitted from the register of Interests. She said her declarations had now been updated as a result of openDemocracy’s inquiry and explained that the company in question is “an app fully funded by Baroness Mone to help start-up entrepreneurs”.
Viscount Trenchard also said he would update his Register of Interests to reflect his company’s investment work.
The other peers named in this article were also approached for comment.