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Flagrant misconduct: UK Lord forced to apologize for signing lobbying contract with overseas tax haven

Published time: July 17, 2014 22:20
House of Lords in London.(AFP Photo / Toby Melville)

House of Lords in London.(AFP Photo / Toby Melville)

Conservative peer, Lord Blencathra, has apologized to the House of Lords for signing a contract under which he agreed to lobby both Houses of Parliament on behalf of Cayman Island government officials. The lucrative contract generated £12,000 per month.

The Standards Commissioner for the House of Lords ruled on Monday Blencathra had breached the Code of Conduct by which he was bound, and ordered the former Tory chief whip to apologize.

The Conservative peer subsequently apologised on Thursday to the House for his “misjudgement”, admitting his conduct was “wrong”.

Blencathra who holds the position of director of the Cayman Islands Government Office in London, claims he had no intention of lobbying the UK Parliament despite the fact he signed a contract which obliged him to do so.

“I misled myself into thinking that, since it was understood that I would not be making representations in reality, then the wording did not matter,” he said.

“But words do matter; I was wrong and I apologise to the House for that misjudgement,” he concluded.

Paul Kernighan, the Standards Commissioner, accepted Blencathra had no intention of lobbying his peers and so concluded an order to issue a formal apology was a fitting response to the Lord's misconduct. Kernighan’s decision proved controversial among certain MPs, however, prompting Labour’s Paul Flynn to file an early day motion on Tuesday.

The motion stated the House “is astonished that the Lords Commissioner for Standards - at a second hearing held when the contract details were leaked - accepted Lord Blencathra's assurance that although he had signed a contract for lobbying he had no intention of carrying out lobbying on behalf of the tax haven”.

Lord Blencathra’s breach of the regulation that forbids the hiring out of legislators’ services was initially exposed by a joint investigation carried out by the Bureau of Investigative Journalism (BIJ) and the Independent.

Following the leak of Blencathra’s lobbying deal with Britain’s famed tax haven, the former chief whip referred himself to Kernighan’s office. On the same day, Labour MP Paul Flynn, issued a formal complaint about the lucrative lobbying arrangement Blencathra was implicated in. Kernighan subsequently launched an investigation into Blencathra’s conduct.

While effectively being paid to represent the interests of the Cayman’s government in the UK, Blencathra wrote a letter in 2012 to George Osborne requesting taxes for air passengers to the Caribbean island be lowered, according to the BIJ.

The Conservative peer admitted to the Bureau at the time he had lobbied the Government, but denied lobbying his fellow parliamentarians.

In February 2014, a legislative shift in Westminster banned the lobbying of ministers by peers for financial gain. Approximately four weeks later, the BIJ received a copy of the contract Lord Blencathra had signed following his 2011 appointment to the position of director of the Cayman government office in London.

The contract’s terms obliged him to promote the Cayman’s interests in the UK and Europe by “liaising with and making representations to UK Ministers, the FCO, Members of Parliament in the House of Commons, and Members of the House of Lords, Members of the European Parliament, European Governments, and the EU Commission, the Commonwealth Countries Association and the Overseas Territories Association,” the leaked document revealed.

The motion tendered by Paul Flynn condemned Lord Blencathra’s misconduct as “an egregious breach of the rule that forbids legislators from hiring out their services”. It also expressed serious concern that a failure to suspend Blencathra from the service of the Lords would further entrench the public’s cynical view of parliamentarians’ conduct.