Select Committee on Standards and Privileges Eighth Report

Annex D

Letter to the former Parliamentary Commissioner for Standards from Mr Ian Bruce

Further to my letter of the 2nd January I now understand that you have received a letter of complaint regarding Mr Archy Kirkwood. Would you please now action my original complaint but reading it in conjunction with this letter.

I have now had the opportunity to examine the accounts of Joseph Rowntree Trust Ltd from 1st January 1992 to 31st December 2000. I have also read the history of the Trust that was produced in 1998. The Trust is very open about its activities. It makes clear that it is not involved in Charitable work nor in providing funds for research but exclusively devotes its funds for "political purposes; to promote political reform and constitutional change as well as the interests of social justice. It does so by funding campaigning organisations and individuals who have reform their objective". In the past there was a fairly even handed distribution of funds to all parties when in opposition but that has not been the case under the Chairmanship of Mr Kirkwood.

During my research I have consulted the Register of Members' Interests, going back over the past decade. The Members' description of the monies they received from JRRT Ltd varies between inadequate and downright misleading. Further as Company accounts are not publicly available for up to two years after the donation has been made the information given in the Register needs to be transparent and up to date.

In Mr Kirkwood's case a reading of the register leads one to believe that he does some voluntary work for a charitable trust and is unremunerated. Further that from time to time this "charity" pays for research projects that Mr Kirkwood oversees and helps to defray expenses in running the Select Committee he chairs. Co­incidentally when elections come along they make a donation to his expenses. The reality is, I believe, very different.

Firstly Mr Kirkwood leaves off the "Ltd" at the end of the Trust's name. The casual Parliamentary reader might confuse this organisation with the Joseph Rowntree Foundation which is a non­party research organisation that publish papers free of charge to MPs. He does not mention that he is the prime mover in providing an average £750,000 to fund political activity and buy influence. He does not list the organisations and individuals that JRRT Ltd funds nor does he declare an interest when speaking in the House on issues where JRRT Ltd has directly funded campaigning.

Secondly Mr Kirkwood has not declared that he is Chairman of the Board of JRRT (Properties) Ltd (which owns commercially let properties in York, London and Salisbury) and JRRT (Investments) Ltd (which owns £24 Million of shares in quoted companies). He is also Chairman of the trustees of Joseph Rowntree Social Service Trust (a non Registered Charity). All the activities of these Companies and the Charity should be declared in the Register and Mr Kirkwood should declare an interest when speaking in the house.

Thirdly Mr Kirkwood says he is unremunerated. However he and his constituency party have consistently received direct support from JRRT Ltd as follows: 1992—£12,716; 1995—£4,467; 1996—£16,268; 1997—£17,069; 1998—£691; 1999—£9,118. In 1998 and 1999 Lord Smith of Clifton received £691 and £8,269 for so called "Research Assistance" which I believe was the other half of the funding of Mr Kirkwood's "Researcher". If this correct it would show a deliberate attempt to hide the extent of JRRT Ltd's support. Also Mr Kirkwood has control of £750,000 pa to spend on campaigns of his choosing and certainly since becoming Chairman there has been a marked change in the distribution of funds towards campaigns which are in line with his personal political objectives and are certainly "in support of his role as a Member of Parliament".

Fourthly Mr Kirkwood has received support for his 2001 election expenses but has not declared the amount of this benefit. He does so by relying on the general declaration that all MPs have to make about organisations that donate more than 25% to his election expenses. However the company reports and published history of JRRT Ltd make clear that they only contribute election expenses to MPs who work with JRRT Ltd. Also Mr Kirkwood receives higher support than any other MP. Therefore in addition to his existing declaration he should declare the amount of this support.

Fifthly the Register should include all regular donations made by an organisation to a Member's Constituency Association if those donations exceed £500. JRRT Ltd paid Roxburgh & Berwickshire Liberal Democrats £400 in 1995, £2,000 in 1997 and £850 in 1999. None of these payments have been declared and although JRRT Ltd have made donations to other MP's Constituencies no other Constituency has received so much or so regularly.

Sixthly Mr Kirkwood receives expenses on behalf of the Social Security (now Work & Pensions) Select Committee. This surely is improper. The Select Committee Members should not allow their Chairman to receive these expenses on their and their witnesses behalf. I suspect the Committee believes they are receiving money with no strings attached from a charity but they are, in reality, receiving money from a biased campaigning organisation. There is also the very important issue that some of the witnesses may also be in receipt of JRRT Ltd's donations and this surely can not be acceptable to Parliament. Indeed I believe Mr Kirkwood can not properly both be the Chairman of a Select Committee and the Chairman of a Political Lobbying organisation both dealing directly with Social Security reform. To continue to do both jobs surely brings Parliament into disrepute.

Seventhly the rules of the House make it clear that there is a "real" interest to be declared if there is the prospect of future personal reward. It should be noted that of the five Directors who have served with Archie Kirkwood over the decade in question no fewer than three of them have been elevated to the Lords including the former Chairman. Also people formerly associated with JRRT Ltd have gone on to receive substantial grants for their future activities.

The rules of the House are not simply designed to identify personal gain but to provide the transparency that would show where influence was being brought to bear from outside of the House and the Political Parties. Members are entitled to be assisted in their work but they must scrupulously declare that. More important is that the public have to be reassured that "moneyed interests" do not receive hidden benefits of greater access to the Government, Political Parties and MPs. The rules also require that a Member does not raise matters on the floor of the House or with Ministers that is of particular benefit to an organisation when he has been in receipt of any such benefit from that organisation. When a Member is not preventing from raising the matter because it is of general not specific interest they must still declare that interest in every relevant debate.

By way of illustration of how I believe Mr Kirkwood is not keeping to these rules let me illustrate with reference to the last general speech he made on the Floor of the House. The occasion was just after the General Election on 20th June 2001 starting at the bottom of Column 79 of Hansard. Mr Kirkwood made no declaration of interest. The speech followed one by Peter Mandelson that dealt with the peace process in Northern Ireland. Mr Kirkwood praised Mr Mandelson's speech and pledged the Liberal Democrats to work with the Government to support their efforts to secure peace. He did not mention that since Mr Mandelson had ceased to be a Minister that JRRT Ltd had started to fund his campaigning work. He also did not mention the role that Mr Mandelson had played in other organisations funded by JRRT Ltd prior to Labour coming to power or his role in obtaining money from JRRT Ltd to fund the offices of the Labour Shadow Cabinet. More importantly, as the subject raised was Northern Ireland, Mr Kirkwood failed to declare the JRRT Ltd funding to the UDP (£22,500), SDLP (£45,000), UUP (£72,935), PUP (£39,l66), NI Women's Coalition (£32,500), David Trimble (£40,000), Dr (now Lord) John Alderdice (£21,000) or the Alliance Party (£10l,333).

Mr Kirkwood's speech then turned to a claim that the Liberal Democrats would be the effective opposition. He should of that point declared the funding of the Liberal Democrats by JRRT Ltd (£l,745,575 over 7 years) and his role in his first year as Chairman in 1999 of increasing that year's contribution to £800,000. This was three times more than ever given in a single year before. He also should have declared the funding for the Labour Shadow Cabinet (£l78,462) to help them into power, the "Labour Initiative on Cooperation" (£86,250) which I assume was to organise the secret Lib-Lab pact prior to the 1997 election, the Labour Campaign for Electoral Reform (£l23,371) to work for proportional representation to help the Liberal Democrats share power with Labour and the Make Votes Count Campaign (£208,680 up to 2000) which Stephen Twigg, MP resigned from as he became Deputy Leader of the House. A declaration would certainly have shown his remarks in a different light.

In his third paragraph Mr Kirkwood dealt with Opinion Polls. He should have declared the "State of Nation opinion poll" JRRT Ltd financed in the year 2000 (£52,128). A major part of his speech then dealt with Europe and the need for a campaign to sell the advantages of a single currency. Here he did not declare the JRRT Ltd funding of Britain in Europe (£12,500), or the Conservative pro Euro entry groups Conservatives for Europe (£67,000) and the McCleod Group and it's successor Conservative Mainstream (£261,250). It is of course important for Parliament and the public to know how minority causes within a party can afford high profile campaigning and of particular interest to know when political opponents are funding dissent within a Party.

Mr Kirkwood finished his speech with a plea to give more power to Select Committees. He did not declare the interest that he was receiving expenses from a lobbying organisation in his role as a Chairman. Indeed he did not raise any problems in the work of Select Committees that involved a lack of funding for expenses which is the alleged reason for him receiving help from JRRT Ltd.

I have not produced an analysis of any other of Mr Kirkwood's speeches but I believe they all follow the same pattern of non declaration of interests.

Although the above information is well documented in Mr Kirkwood's case you, as Commissioner for Standards in reviewing the accounts of JJRT Ltd will no doubt note that the amount of information regarding political influence is not exhaustive. Prior to the 1998 accounts JJRT Ltd were able to list hide the recipients of approx one third of their grants under the general headings of "other purposes" and "Trust Projects". In the latest year 2000 accounts £1,214,600 worth of grants were approved but because they had still to be paid the recipients were not listed. We will not know what they were spent on until the 2001 accounts which are not due for almost a year.

However we can find some interesting additional information in the published accounts. We can see for instance that two people, John Burnett (£46,041) and David Heath (£34,167) received money for themselves and their constituencies in the run up to election as Liberal Democrat MPs in 1997. We are left to guess why these individuals were paid and if they were working directly for MPs during this time. Individuals are named in the accounts (Mary Southcott, David Ward, Cllr Peter Hunter, Hugh Simpson, Tom Nairn, Neil Sherlock and Peter Wilkinson) with no note of why they are receiving money from JRRT Ltd. It may be that JRRT Ltd are sponsoring potential Lib Dem MPs in advance. Under the present rules new MPs may think they do not have to declare these payments. However I suggest these payments should surely be declared when a new MP arrives and if the individuals had been working with existing MPs those MPs should be brought to account for not declaring JRRT Ltd support.

In summary I believe the case is overwhelming that Mr Kirkwood is not making a proper declaration of interests in the register or during debates. I do not believe someone can properly be both the Chairman of a Political Lobbying Company and retain two high level House of Commons positions as Chairman of a Select Committee and Spokesman for the House of Commons Commission. The House authorities should make a special ruling on how an outside body like JRRT Ltd should publish it's donations so that Members during debates will know what influence has been brought to bear. Political Parties now have to declare the source of substantial donations and it would be anomalous if JRRT Ltd were able to continue to operate in its present mode that requires years of waiting and weeks of research to track down who is being influenced by them.

The House of Commons Library has recently obtained the accounts of JRRT Ltd for the years 1992-2000 for Mr Flook and I assume you can obtain a copy from them. JRRT Ltd have published a history of their organisation which tells the story up to 1998. This is available from their headquarters in York or on their web site

lf you require any further information please let me know.

21 January 2002

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