The Conduct of Baroness Morgan of Huyton
The Sub-Committee on Lords’ Conduct has investigated allegations against Baroness Morgan of Huyton, which were originally made in a Channel 4 Television documentary, broadcast in March 2010. Following the allegations, Lady Morgan referred herself to the Sub-Committee; a complaint was subsequently received from a member of the public. The Sub-Committee’s report, and accompanying evidence, are printed with this Report.
2.The Sub-Committee has dismissed the allegations against Baroness Morgan of Huyton, and we endorse this conclusion.
Report from the Sub-Committee on Lords’ Conduct
The conduct of Baroness Morgan of Huyton: allegations by Channel 4 Television
Summary
Channel 4 Television alleged that Baroness Morgan of Huyton had breached the 2001 Code of Conduct; the material with which they provided us raised a further issue of providing parliamentary services for reward which we felt important to investigate. After investigation, we find that Lady Morgan did not breach the Code of Conduct in any of these respects.
The 2001 Code of Conduct
The Code of Conduct in force at the time of the alleged breaches was that adopted by resolution on 2 July 2001 (p1A). Paragraph 4 of that Code reads (p1E):
Personal conduct
4. Members of the House:
must comply with the Code of Conduct;
should act always on their personal honour;
must never accept any financial inducement as an incentive or reward for exercising parliamentary influence;
must not vote on any bill or motion, or ask any question in the House or a committee, or promote any matter, in return for payment or any other material benefit (the “no paid advocacy” rule).
The allegations
On 22 March 2010, Channel 4 Television broadcast an edition of Dispatches entitled Politicians for Hire. The programme, in collaboration with the Sunday Times newspaper’s Insight team, had pretended to establish a public relations consultancy which sought to recruit members of the two Houses to an advisory board. The only member of the House of Lords who appeared in the programme was Lady Morgan of Huyton. Channel 4 made two allegations about Lady Morgan’s conduct.
In the language of the Code of Conduct, the first allegation was that Lady Morgan was prepared to accept financial inducement as an incentive or reward for exercising parliamentary influence (paragraph 4(c) of the Code) and so failed to act always on her personal honour (paragraph 4(b) of the Code).
The second allegation was that Lady Morgan a) may have asked a question in the House in return for financial inducement; and b) that she failed to declare a relevant interest when taking part in that debate. On 2 April 2009, Lady Morgan intervened during an oral question about diabetes tabled by Lord Harrison to ask “My Lords, are there any specific plans for dealing with diabetes in children, which is a growing problem and one that the health service at the moment sometimes overlooks?” without declaring her interest as a member of an advisory panel for Lloydspharmacy, a subsidiary of Celesio AG. Lady Morgan had registered that interest as regular remunerated employment (category 12(f)).
The second allegation, together with the transcript related to the first allegation, raised in our mind a further and more serious question (not raised by Channel 4), namely whether Lady Morgan had provided prohibited parliamentary services to Lloydspharmacy and potentially other interests; and whether she had breached the Code in other respects in relation to that or other interests.
Lady Morgan referred her own conduct to the Sub-Committee in advance of the initial broadcast (p18B). A member of the public also complained about Lady Morgan’s conduct in the light of the broadcast programme (p18J).
Evidence
After a little delay, Channel 4 Television provided the Sub-Committee with the records on which their broadcast was based: covert recordings of a telephone conversation and an interview with Lady Morgan together with a transcript. The conversation and interview were conducted by a journalist, Claire Newell, pretending to be “Claire Webster”, the London agent of an (fictitious) American public relations firm called Anderson Perry. A vertical line in the margin of the transcript indicates a passage which was broadcast in the Dispatches programme (e.g. p6F). The officers of the Sub-Committee corresponded with Lady Morgan. We recommend that the transcript and correspondence be published.
Interpretation of the Code: precedent
The Report from the Committee for Privileges on the conduct of Lord Moonie, Lord Snape, Lord Truscott and Lord Taylor of Blackburn (referred to hereafter as “the conduct report”) provides much precedent on the interpretation of the relevant passages of the 2001 Code of Conduct. It is necessary to set out the most relevant passages:
Report from the Committee for Privileges
Summary
35. In summary, we invite the House to endorse the following conclusions on the meaning of the Code of Conduct:
Paragraph 4(c) of the Code of Conduct describes one of the overarching principles governing Members’ conduct—that they must not exercise parliamentary influence, directly or indirectly, in return for financial inducement. Paragraph 4(d), the “no paid advocacy” rule, describes a specific application of this overarching principle; any breach of paragraph 4(d) is by definition also a breach of paragraph 4(c).
An agreement to act in breach of either paragraph 4(c) or 4(d) of the Code, is in itself a breach of paragraph 4(c), regardless of whether money changes hands or services are actually provided.
Members who express a clear willingness to breach the Code of Conduct thereby demonstrate a failure of “personal honour”, and are thus in breach of paragraph 4(b) of the Code.
Members who have interests falling under paragraph 12 (a) or (c) of the Code should not seek in any way to exercise parliamentary influence so as to benefit these interests. To do so would constitute a breach of paragraph 4(c).
Entrapment
14. Despite these concerns, we conclude that it would not be appropriate to disregard any of the evidence by reason only of the manner in which it was obtained. We consider that the Sub-Committee were right to reject suggestions that they should not rely on some of the evidence, on the ground that it had been obtained by agents provocateurs. In our judgment, the integrity of the proceedings themselves—either before us or before the Sub-Committee—has in no sense been compromised by the conduct of the journalists in obtaining the evidence, which in our view did not amount to incitement to or instigation of a breach of the Code. It is the strength of the evidence itself which we regard as important for the purposes of our proceedings.
Financial inducement and personal honour
23. We agree with the Sub-Committee’s interpretation: paragraph 4(c) refers to “financial inducement”, and an “inducement” can exert a powerful influence without money having to change hands. It follows that if an agreement is reached, to provide certain services in return for a fee, that agreement is in itself an “acceptance of financial inducement”. Given the relationship between paragraphs 4(c) and 4(d), it must also follow that an agreement to engage in paid advocacy, contrary to paragraph 4(d), would also constitute a breach of paragraph 4(c), even if the Member concerned never actually, by voting, speaking or otherwise fulfilling this agreement, breached paragraph 4(d) itself.
24. However, we acknowledge that this reasoning leaves open the question of exactly how formal such an “agreement” must be for a breach of paragraph 4(c) to occur. In the event, neither the Sub-Committee nor we ourselves have found it necessary to resolve this question in the current cases.
25. The other limb of paragraph 65 is the Sub-Committee’s statement that “in negotiating or attempting to negotiate” such an agreement, even if no such agreement is finally reached, a Member would “have failed to act on his personal honour”, so breaching paragraph 4(b) of the Code.
26. This is a crucial point, particularly in the context of the current cases, where no money changed hands, no services were provided, and no contracts were signed. Here too we are in complete agreement with the Sub-Committee.
30. The purpose of the Code of Conduct, which was agreed by the House by Resolution in July 2001, is set out in paragraph 1: “to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties”. It follows, in our view, that any Member who demonstrated a clear willingness to breach the rules contained in the Code (for instance, by attempting to negotiate an agreement to promote an amendment in return for a fee) would have failed to act upon his or her personal honour, and would have thereby breached paragraph 4(b) of the Code.
Provision of parliamentary advice and services (categories 12(a) and 12(b))
32. The Sub-Committee state that where Members have interests falling under one of these categories, they are “restricted in their parliamentary activities to providing advice”; any attempt to exercise parliamentary influence would necessarily be perceived to be a breach of the no paid advocacy rule, as “it is impossible to prove that [the Member] is not being paid specifically to exercise his parliamentary influence for the benefit of those paying him” (paragraph 56). [33.] We fully endorse this interpretation, which is consistent with the longstanding practice of the House.
Report from the Sub-Committee on Lords ’ Interests
Parliamentary influence
49. We understand “exercising parliamentary influence” to mean exercising influence in and over Parliament by virtue of membership of Parliament. It is not necessary for the purposes of determining these complaints to decide whether the expression has any wider meaning. Parliamentary influence should only be exercised in the public interest, which paragraph 6 of the Code insists must come first. Members of the House of Lords should never accept financial inducements, incentives or rewards from any individual or body to exercise parliamentary influence in the interests of that individual or body alone (for example, a particular retailer in the retail industry), or in the interests of a wider group which includes that individual or body (for example, the retail industry generally), even if they believe such action to be in the public interest. A Member who did so would breach the no-paid-advocacy rule.
50. The distinction between receiving a financial inducement to influence the parliamentary process and having a financial interest as a result of employment or otherwise in a particular area is essential to understanding the no-paid-advocacy rule.
Parliamentary advice and services
56. Where a Member of the House of Lords has a financial interest that arises from his membership of the House, as is the case with interests under paragraphs 12(a) and 12(c), it is impossible to prove that he is not being paid specifically to exercise his parliamentary influence for the benefit of those paying him, thereby breaching the no-paid-advocacy rule. Members who hold an arrangement under paragraph 12(a) or 12(c) are therefore restricted in their parliamentary activities to providing advice and never advocacy.
57. Where a Member has an interest in a firm that offers commercial lobbying, paragraph 12(b) of the Code prevents him from participating in parliamentary business relating to his personal clients. This is for the reason set out in paragraph 56, namely, that it would be impossible to prove that he was not exercising his parliamentary influence on behalf of those clients. But a Member involved with such a firm is not disqualified from taking part in parliamentary business relating to the firm’s other clients, with whom he has no direct connection, because there can be no suggestion of paid advocacy.
60. Examples of what is permitted and what is prohibited were given to the Committee on Standards in Public Life by a previous Clerk of the Parliaments. Although the Clerk was speaking in the context of the House’s rules of November 1995, what he said remains in our view applicable to the present Code. He said:
“A parliamentary consultancy is an arrangement reflecting a two-way relationship. On the one hand the client/firm receives information from the employee/peer (A below); and on the other hand, the peer is given instructions to undertake certain activities in Parliament in the interests of the client (B below).
(A) The information which the client might expect to receive would include:
information about the progress of legislation
information about debates and opinions expressed in the House which might be of interest to the client
information as to which members of the House might be sympathetic to the interests of the client
indications as to which are the appropriate Ministers to approach for purposes of furthering the interests of the client and how such approaches might be made.
(B) The services which the peer might be expected to perform on behalf of the clients might include:
speaking in debates
tabling, supporting and moving amendments
asking Parliamentary Questions
lobbying Ministers and other members of the House
acting as host at functions in the Palace of Westminster.”
61. The Clerk of the Parliaments said that a Member of the House was entitled to give advice as set out at (A); but was debarred from carrying out the services set out at (B).
62. A helpful rule of thumb was given by Lord Griffiths to the Committee on Standards in Public Life in the same inquiry:
“There is no reason why you should not have a consultancy. However, if you have taken a position as a consultant, you cannot speak for your clients; you cannot lobby on behalf of your clients, nor can you act politically for your clients ... You can say, ‘Well, I think we might get that amendment through’. But, what you cannot do is take any part in helping to get the amendment through.”
63. We have concluded that it is consistent with the Code for Members of the House, in return for payment, to approach other Members, MPs, Ministers, officials and civil servants to gain information. But it is not consistent with the Code for Members to seek to influence such people themselves in return for payment, including to ‘soften up’ such individuals for a later approach by a client or his representatives, or to make introductions.
64. The distinction between advocacy and advice is crucial. Inevitably, however, there are borderline issues. These may place too great a burden on the judgment of the individual Member and may lead him to cross the boundary between what is legitimate and what is not. Members willing to take money in return for parliamentary services place themselves in great danger of crossing the boundary, knowingly or inadvertently. Even when a Member’s intention is limited to obtaining information, the very fact of approaching, on behalf of paying clients, MPs, other Lords, Ministers and civil servants, may give rise to a perception of advocacy and lobbying. The impression can easily be given that not only advice but also advocacy has been bought by the client. Whether or not a Member has indeed crossed the boundary from the permissible depends on the facts of each case.
Commentary
Entrapment
In the conduct report, the Committee for Privileges took the view that “it would not be appropriate to disregard any of the evidence by reason only of the manner in which it was obtained”. The covert recordings of a telephone conversation and an interview with Lady Morgan are admissible.
The Code of Conduct and its provisions
The first question is whether Lady Morgan breached the Code of Conduct in her interview with “Anderson Perry”.
At several points in the transcript, Lady Morgan makes clear that there is a Code of Conduct and that it restricts what she is allowed to do (p10J; p12K; p17A):
Ms Webster: Yes, and is that something you would be able to help us with, get, be able to, I don’t know, touch base with, either ministers or civil servants?
Baroness Morgan of Huyton : Yeah I mean obviously in the, you need to be careful, I mean you’ll get the same answer from anybody who’s, who’s in the Lords or in the Commons, but I don’t, I mean I presume it’s only, you don’t want to use MPs I would think on the whole.
Ms Webster: No.
Baroness Morgan of Huyton : No, it’s too close you know. As a peer you’ve got to be careful, you’ve got to be careful that you’re not lobbying, so there’s a kind of, there’s codes .
Ms Webster: Oh right.
Baroness Morgan of Huyton : that you have to, you know, so in a sense it’s, you can make, what I, I mean how do I describe it? I mean I can have conversations with people without pushing my client necessarily, but I can push a direction of travel on policy, I can find out what’s happening, I can, I can, I can, I certainly with Lloyds, for example, I remember saying, I mean I got Lloyds round the table in terms of policy discussions, but only by, but in a sense being very clear, by being completely upfront that I’m on their advisory committee, and I think this guy’s good, but you may want somebody from Boots instead, but it’s really important pharmacies are represented round your table for these discussions. So I’m, I’m, I mean I am very careful you know, in a sense, because I mean some people are less careful, if you like, than I am, but I think in the end that’s foolish, because actually that can be damaging to clients as well as anything else.
...
Ms Webster: And would you be willing to speak to people on our behalf, though I know you said you had to be careful about doing that?
Baroness Morgan of Huyton : Yes, yes, I, I would, I mean, you know, look I would, what I would do, I mean if, and as I say, I think, if you want any politician, any peers involved I would guess everybody would say the same to you, or if they don’t they’re foolish. You know, in a sense I would give you the code and say this is what I can do and this is what I can’t do and then we all know where we are. And in a sense my view is, I do anything as long as I’m transparent, reasonably transparent about it.
...
Baroness Morgan of Huyton : ... you may come to the view that you want somebody who can lobby in a more traditional sense, and I suppose I’m just anxious that you, that you’re clear that I can’t do that.
In the light of the Committee for Privileges’ view in the conduct report that:
32. The Sub-Committee state that where Members have interests falling under one of these categories, they are “restricted in their parliamentary activities to providing advice”; any attempt to exercise parliamentary influence would necessarily be perceived to be a breach of the no paid advocacy rule, as “it is impossible to prove that [the Member] is not being paid specifically to exercise his parliamentary influence for the benefit of those paying him” (paragraph 56). [33.] We fully endorse this interpretation, which is consistent with the longstanding practice of the House.
and the Sub-Committee’s view that:
[57.] Where a Member has an interest in a firm that offers commercial lobbying, paragraph 12(b) of the Code prevents him from participating in parliamentary business relating to his personal clients. This is for the reason ... that it would be impossible to prove that he was not exercising his parliamentary influence on behalf of those clients.
we find that Lady Morgan was correct that the provision of parliamentary advice was acceptable, but influencing Parliament was not (p14D; p14H):
Ms Webster: And also which, what piece of legislation’s coming up.
Baroness Morgan of Huyton : Oh that’s, I mean that’s, that’s very straightforward, yeah, that’s very straightforward.
Ms Webster: Because if you know this piece of legislation is coming up, then it’s much easier for you to be able to start trying to influence it, bluntly.
Baroness Morgan of Huyton : Absolutely, absolutely, and there’s very little, I mean I don’t think, there is no reason to presume that any of the sort of leading civil servants will change ...
Baroness Morgan of Huyton : ... what I categorically could never do, and, you know, nor could anybody else, is suggest that we would influence, that I could influence, that I could influence legislation on behalf of a client, because that’s, you know, absolutely a no. But in terms of saying to your clients, this is the legislation that’s coming down.
We also find however that Lady Morgan was wrong that she could speak in debates related to her clients’ interests if she had been providing those clients with parliamentary advice (p14K):
Baroness Morgan of Huyton: ... But there’s no problems speaking, you know, there’s no problem speaking, I mean basically, you know, there’s an accepted view, that you, unlike the House of Commons, being in the House of Lords is obviously a part time job, therefore there’s an expectation you’re bringing knowledge from outside in
In the light of our view that:
[63.] it is consistent with the Code for Members of the House, in return for payment, to approach other Members, MPs, Ministers, officials and civil servants to gain information. But it is not consistent with the Code for Members to seek to influence such people themselves in return for payment, including to ‘soften up’ such individuals for a later approach by a client or his representatives, or to make introductions
we find that Lady Morgan was also wrong that she could in any circumstances approach ministers, special advisers or civil servants on behalf of an outside interest (p13A):
Ms Webster: So what things, I’m not really familiar with the code, but what things would you be able to do? Would you, for instance, be able to, I don’t know, if we said, oh, we need to be speak to this minister, would you be able to contact them and say, look these guys would like to meet you to discuss this? Is that something you’d feel comfortable with that, or?
Baroness Morgan of Huyton: I think you can, I think you can do that. I mean I think you have to choose your time and not do it very often, I mean for me or anybody else actually, so in a sense you need to.
Ms Webster: Can’t be always on the phone.
Baroness Morgan of Huyton: You get, you almost get one chance to really pitch your stuff and very often the better person to talk to is a special advisor
Ms Webster: Right
Baroness Morgan of Huyton: and have some initial meetings and get some feedback.
Ms Webster: Right. So you’d be able to contact them?
Baroness Morgan of Huyton: Yeah, yeah, yeah.
Agreement
The Committee for Privileges found that:
[35.] An agreement to act in breach of either paragraph 4(c) or 4(d) of the Code, is in itself a breach of paragraph 4(c), regardless of whether money changes hands or services are actually provided.
We find that Lady Morgan ’ s interview, while indicative of the areas and ways in which she would be prepared to work, did not amount to an agreement to provide services. Indeed her statement that (p12L):
Baroness Morgan of Huyton: ... I would give you the code and say this is what I can do and this is what I can’t do and then we all know where we are.
suggests that Lady Morgan would have studied the Code before entering into any contract with Anderson Perry. Lady Morgan’s conduct was that of a person keen not to deter a new and possibly lucrative client but also conscious of the Code and the need to ensure that her client was also aware of the Code.
Conclusion
In relation to her interview with “ Claire Webster ” of “ Anderson Perry ” , Lady Morgan ’ s understanding of the Code of Conduct was imperfect. She was wrong to suggest that she could speak in debates related to her clients ’ interests if she had been providing those clients with parliamentary advice; and wrong to suggest that she could in any circumstances approach ministers, special advisers or civil servants for anything other than information. All members should have a better understanding of the rules than that which Lady Morgan exhibited in this transcript.
We find however that Lady Morgan did not breach the 2001 Code of Conduct in her interview with “ Claire Webster ” . First, it did not amount to an agreement to breach the 2001 Code of Conduct; and secondly, despite her imperfect understanding of its provision, she made clear that the Code of Conduct existed and that she would be bound by its provision in any agreement.
The second allegation: Lloydspharmacy: parliamentary services and declaration of interest
The second allegation made by Channel 4 was that Lady Morgan a) asked a question in the House in return for financial inducement; and b) that she failed to declare a relevant interest when taking part in that debate. On 2 April 2009, Lady Morgan intervened during an oral question about diabetes tabled by Lord Harrison. She asked “My Lords, are there any specific plans for dealing with diabetes in children, which is a growing problem and one that the health service at the moment sometimes overlooks?” without declaring her interest as a member of an advisory panel for Lloydspharmacy, a subsidiary of Celesio AG. Lady Morgan had registered that interest as regular remunerated employment (then category 12(f)).
In correspondence, Lady Morgan says that a) Lloydspharmacy did not ask her to ask the question and indeed had no interest in it; Lady Thornton, then a Government Whip, had invited her to intervene in the debate and Lady Morgan had agreed to do so because the topic interested her (p27K); and b) she had no interest to declare because the question did not relate to pharmacies and Lloydspharmacy does not offer diabetes testing to under 18s (p28C).
Lady Morgan did not breach the 2001 Code of Conduct in her intervention in this oral question.
A third issue: parliamentary services
Lady Morgan’s comments in the transcript raised in our minds a further issue, not mentioned by Channel 4 Television, namely whether she had provided parliamentary services to the bodies in which she had financial interests, something prohibited by the Code of Conduct.
Lady Morgan’s registered interests
At the end of the last Parliament, Lady Morgan’s registered interests were as follows:
12(d) Non-parliamentary consultant
Four days’ consultancy work for Acorn Care 4 Limited (invoiced February 2010)
12(e) Remunerated directorships
Non-executive Director of Carphone Warehouse
Non-executive Director of Southern Cross Healthcare Group plc
12(f) Regular remunerated employment
Member of Advisory Panel for Lloyds pharmacy which is a subsidiary of Celesio AG
Member of Advisory Panel for Humana Europe
Advisor to the Board of the charity ARK (Absolute Return for Kids)
15(a) Membership of public bodies
Board, Olympic Delivery Authority
15(d) Office-holder in voluntary organisations
Chair, “Future Leaders” charity (headteacher training)
Member, Advisory Board of Centre for Human Rights, Institute of Education
Trustee of Mayor’s Fund for London
Board Member, ‘Teaching Leaders’
16(b) Voluntary organisations
Membership of Labour Party and GMB Trade Union
The Sub-Committee, in interpreting the 2001 Code in the conduct report, said:
[63.] it is consistent with the Code for Members of the House, in return for payment, to approach other Members, MPs, Ministers, officials and civil servants to gain information. But it is not consistent with the Code for Members to seek to influence such people themselves in return for payment, including to ‘soften up’ such individuals for a later approach by a client or his representatives, or to make introductions.
In her interview with “Claire Webster”, Lady Morgan said (p8B):
Baroness Morgan of Huyton: ... one of the things we’ve been able to do is, is make sure that through various people, you know, in a sense through having reasonable contracts, that, that pharmacies are represented better around the tables where conversations are taking place.
This would appear to be a breach of paragraph 4(c) of the Code as interpreted by paragraph 63 of the Sub-Committee’s report.
However, in correspondence Lady Morgan explained her position as follows (p25H):
The background to this comment was this: Two or three years ago I was invited by a senior civil servant to have a confidential and wide-ranging conversation about health service reform and other issues. The invitation was certainly not prompted by my membership of the House of Lords. Nor did the invitation have any connection to my role in LP. LP was unaware of the fact of my meeting, either before or after the meeting took place.
In the course of the discussion with the official I observed that I thought community pharmacies could play a useful role in the provision of a reformed and cost-effective system of primary care. I also mentioned that it could be sensible to have a community pharmacist involved in the Heath Service review such as the Chief Pharmacist at LP or Alliance Boots. I know that the official concerned knew of my involvement in LP. Nevertheless, having made this comment specifically I reminded the official of my involvement with LPHAP to ensure that there could be no suggestion that my remarks were prompted by an undisclosed improper motive. I was aware that I was under an obligation to declare my interest pursuant to paragraph 8(b) of the Code of Conduct, (31st March 2002).
It is important to stress that I had not instigated the conversation with the civil servant. I had not been asked by LP to have a conversation or to raise this issue with government. I was not asked by the company to make any representations to government. Nor did LP apply any pressure or encouragement, whether subtly or impliedly, to make any representations to government on their behalf or on behalf of the industry.
My advice was intended solely to help strengthen the government’s health reforms. I was not seeking to assist LP or the pharmacy industry.
We considered it important to know the identity of the senior civil servant, to add credibility to Lady Morgan’s account. In further correspondence, she identified him by name and position. We are not responsible for civil service conduct but we see no reason for criticism of his conduct.
Lady Morgan did not breach the 2001 Code of Conduct in her conversation with the senior civil servant.
We also invited Lady Morgan to set out what advice and services she had provided to the other organisations in which she held a financial interest. Lady Morgan set out the nature of her interests without mentioning parliamentary services (p26B) and confirmed that she had not provided any of the prohibited services in return for reward (p26K). We accept her account.
Conclusion
Lady Morgan did not breach the 2001 Code of Conduct in relation to any of the current allegations. In the light of the publicity surrounding the allegations, we recommend that this report be made to the House for information.