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Do MPs gain directly from the decisions they push through? We just don’t know Do MPs gain directly from the decisions they push through? We just don’t know
(3 months later)
The investigation into Tory election fraud – centred around undeclared campaign spending – is another stark reminder of MPs’ troubled relationship with money. Stories of sleaze, greed, corruption and entitlement seem to emerge from Westminster so frequently that we’ve almost grown used to it.The investigation into Tory election fraud – centred around undeclared campaign spending – is another stark reminder of MPs’ troubled relationship with money. Stories of sleaze, greed, corruption and entitlement seem to emerge from Westminster so frequently that we’ve almost grown used to it.
Related: Why is there so little noise about the Tory election fraud claims? | Michael White
We’ve had the expenses scandal, the cash-for-peerages scandal, an array of lobbying scandals, and the Panama Papers. But each time, these issues are treated as unfortunate aberrations in an otherwise functioning system. Pretty soon, they blow over and we get back to business as usual. But if we want to live in a healthy democracy, we need to ask deeper questions about politicians’ finances and how they are regulated.We’ve had the expenses scandal, the cash-for-peerages scandal, an array of lobbying scandals, and the Panama Papers. But each time, these issues are treated as unfortunate aberrations in an otherwise functioning system. Pretty soon, they blow over and we get back to business as usual. But if we want to live in a healthy democracy, we need to ask deeper questions about politicians’ finances and how they are regulated.
For months, I’ve been investigating MPs’ money and business affairs for my book Parliament Ltd. But of all I’ve seen, one thing struck me the most: the level of transparency in Westminster is utterly pathetic.For months, I’ve been investigating MPs’ money and business affairs for my book Parliament Ltd. But of all I’ve seen, one thing struck me the most: the level of transparency in Westminster is utterly pathetic.
There will always be some rotten apples, of course. No matter how honest and hardworking most politicians may be, some will always fall short. But if Westminster were more transparent, at least it would be easier to keep track of the finances. The truth is, however, that authorities actively help MPs to keep things under wraps.There will always be some rotten apples, of course. No matter how honest and hardworking most politicians may be, some will always fall short. But if Westminster were more transparent, at least it would be easier to keep track of the finances. The truth is, however, that authorities actively help MPs to keep things under wraps.
How many of our representatives stand to gain directly from the decisions they push through? How many could profit from NHS privatisation, housing policies or even military action? We have no idea.How many of our representatives stand to gain directly from the decisions they push through? How many could profit from NHS privatisation, housing policies or even military action? We have no idea.
With the help of business intelligence firm DueDil, though, I began building a database of all the UK companies that had MPs and peers on their board of directors. It was a mammoth task – and never done before – but the results were staggering. We identified about 2,800 active directorships, linked to almost 2,500 companies. Together, these firms employ at least 1.2 million people – equivalent to one in 20 of the UK’s full-time workforce. And they bring in more than £220bn of revenue annually.With the help of business intelligence firm DueDil, though, I began building a database of all the UK companies that had MPs and peers on their board of directors. It was a mammoth task – and never done before – but the results were staggering. We identified about 2,800 active directorships, linked to almost 2,500 companies. Together, these firms employ at least 1.2 million people – equivalent to one in 20 of the UK’s full-time workforce. And they bring in more than £220bn of revenue annually.
But here’s the kicker. A rough analysis of the data (it’s not an exact science because parliament’s records are so shoddy) shows that about 40% of these businesses have not been fully declared in the official register of members’ financial interests. Many are exposed for the first time in my book.But here’s the kicker. A rough analysis of the data (it’s not an exact science because parliament’s records are so shoddy) shows that about 40% of these businesses have not been fully declared in the official register of members’ financial interests. Many are exposed for the first time in my book.
This doesn’t necessarily mean MPs have broken any rules – although some have. But that’s exactly the point. The system itself fails to enforce transparency in politics. That’s why David Cameron can legitimately claim he didn’t break any rules when he failed to declare his stake in his father’s offshore Panama fund. The system allowed him to dodge transparency. Indeed, often the rules actually force MPs to hide information. One line says: “Members should not specify the value of the shares, or the percentage of shares in a company that are owned.”This doesn’t necessarily mean MPs have broken any rules – although some have. But that’s exactly the point. The system itself fails to enforce transparency in politics. That’s why David Cameron can legitimately claim he didn’t break any rules when he failed to declare his stake in his father’s offshore Panama fund. The system allowed him to dodge transparency. Indeed, often the rules actually force MPs to hide information. One line says: “Members should not specify the value of the shares, or the percentage of shares in a company that are owned.”
The register of interests contains some of the most crucial information to our democracy. It doesn’t stop corruption in itself – but it does give a clue about whether MPs are speaking on behalf of voters or a private company they work for. Yet this vital document is scrutinised by no one. MPs’ declarations are only ever investigated if other people make an official complaint about someone. The whole thing is based on trust. And the result is that tons of stuff gets missed off – whether intentionally or not.The register of interests contains some of the most crucial information to our democracy. It doesn’t stop corruption in itself – but it does give a clue about whether MPs are speaking on behalf of voters or a private company they work for. Yet this vital document is scrutinised by no one. MPs’ declarations are only ever investigated if other people make an official complaint about someone. The whole thing is based on trust. And the result is that tons of stuff gets missed off – whether intentionally or not.
A rough analysis of the data shows about 40% of these businesses have not been fully declared in the official registerA rough analysis of the data shows about 40% of these businesses have not been fully declared in the official register
Here’s an example. When I interviewed Gisela Stuart in January, she told me: “It’s always openness that matters.” The Labour MP now co-chairs the Brexit campaign – calling for a leave vote in order “to stop big businesses from avoiding tax”. So you might think that openness about her own financial affairs would be pretty important. “We have a regularly updated register of interests, so people know exactly where our money comes from,” she explained. Any MP who failed to declare something would be “an absolute idiot”.Here’s an example. When I interviewed Gisela Stuart in January, she told me: “It’s always openness that matters.” The Labour MP now co-chairs the Brexit campaign – calling for a leave vote in order “to stop big businesses from avoiding tax”. So you might think that openness about her own financial affairs would be pretty important. “We have a regularly updated register of interests, so people know exactly where our money comes from,” she explained. Any MP who failed to declare something would be “an absolute idiot”.
But it turned out that Stuart might be one of the “idiots” herself. After listening to her preach about transparency for 20 minutes, I asked her a simple question: “What is Vestra Wealth?”But it turned out that Stuart might be one of the “idiots” herself. After listening to her preach about transparency for 20 minutes, I asked her a simple question: “What is Vestra Wealth?”
“Is that on the register?” she spluttered, looking panicked.“Is that on the register?” she spluttered, looking panicked.
“No,” I said. “It’s not.”“No,” I said. “It’s not.”
But according to documents I’d uncovered from Companies House, Stuart has a stake in Vestra Wealth LLP. It offers clients “offshore and international planning for non-domiciled and non-resident clients”. These clients are the very “non-doms” that Labour campaigned against at the last election.But according to documents I’d uncovered from Companies House, Stuart has a stake in Vestra Wealth LLP. It offers clients “offshore and international planning for non-domiciled and non-resident clients”. These clients are the very “non-doms” that Labour campaigned against at the last election.
Yet Stuart had never declared this in the register of interests. Not even when she ran to be chair of the public accounts committee, promising to focus on a tax system that “eliminates aggressive avoidance”. The public were never told about Vestra until I confronted her about it. Later she updated her declarations.Yet Stuart had never declared this in the register of interests. Not even when she ran to be chair of the public accounts committee, promising to focus on a tax system that “eliminates aggressive avoidance”. The public were never told about Vestra until I confronted her about it. Later she updated her declarations.
Related: What is the Tory election expenses story and why isn't it bigger news?
Because the system fails on transparency, it’s easy to see how financial controversies can brew undetected; not noticed until it’s too late. It’s a similar story with expenses. After the 2009 scandal we were promised a complete reform, yet the stories keep coming. For instance, one set of documents I found reveals how a peer claimed nearly £9,000 for a business-class return flight from New York, just to make a four-minute speech in parliament. Why had this not been discovered before? Because the files were buried in an archive, only retrievable through protracted freedom of information requests. What’s more, many of the worst abuses of the 2009 scandal would still be completely untraceable under the current system because key details are often redacted by the authorities.Because the system fails on transparency, it’s easy to see how financial controversies can brew undetected; not noticed until it’s too late. It’s a similar story with expenses. After the 2009 scandal we were promised a complete reform, yet the stories keep coming. For instance, one set of documents I found reveals how a peer claimed nearly £9,000 for a business-class return flight from New York, just to make a four-minute speech in parliament. Why had this not been discovered before? Because the files were buried in an archive, only retrievable through protracted freedom of information requests. What’s more, many of the worst abuses of the 2009 scandal would still be completely untraceable under the current system because key details are often redacted by the authorities.
We will never cut out financial controversies altogether – whether it’s business links, expenses or election spending. But if we’re ever going to clean up politics at all, transparency must be the first step.We will never cut out financial controversies altogether – whether it’s business links, expenses or election spending. But if we’re ever going to clean up politics at all, transparency must be the first step.