Following Bureau investigation Lord Blencathra is ordered to apologise for signing lobbying contract with tax haven

Lord Blencathra (left, in wheelchair) at the US Embassy in London with Cayman ministers and Premier, November 2013. (Image: US Embassy at Flickr)

Conservative peer Lord Blencathra – formerly known as David Maclean – has been ordered to apologise to the House of Lords for signing a contract with the Cayman Islands government under which he pledged to lobby both Houses of Parliament.

The move follows a two-year investigation by the Bureau of Investigative Journalism into the former Tory Chief Whip’s activities as director of the Cayman Islands Government Office in London.

Related story: Conservative peer hired as tax haven lobbyist

The Standards Commissioner for the House of Lords ruled today that by signing the contract Lord Blencathra broke the House of Lords Code of Conduct and ordered an apology.

But the Commissioner, Paul Kernaghan, accepted the peer’s assurances that despite signing the £12,000 per month contract, Lord Blencathra had not intended to lobby either House and did not do so.

Lord Blencathra’s apology is likely to take place on Thursday July 17, after the report into his conduct is formally considered by the House of Lords.

Two complaints

The apology follows two complaints to the Standards Commissioner about the peer’s conduct by the Labour MP Paul Flynn. The investigation into the first of these complaints found Lord Blencathra had not lobbied Parliament or ministers for gain and therefore had not breached the Code.

A second inquiry was opened in March 2014 after the Bureau revealed that under his contract the peer was required to promote the Caymans’ interests to peers, MPs and the government.

In the latest report published today, the Standards Commissioner for the House of Lords concludes that “by agreeing to a contract which would involve the provision of parliamentary services Lord Blencathra breached paragraph 8(d) of the Code of Conduct (which prohibits members from accepting or agreeing to accept payment or other reward in return for providing parliamentary advice or services).

“Although the Commissioner finds that there is no evidence that Lord Blencathra in fact provided such services, the mere existence of that contractual term put him in breach of the Code.”

Lord Blencthra’s contract was terminated by mutual agreement in April 2014 after the Premier of the Cayman Islands decided the contract’s terms were incompatible with new British rules on lobbying by peers.

A Bureau investigation

The Bureau revealed in April 2012 that Lord Blencathra’s role as director of the Cayman Islands Government Office in the UK included lobbying and that he had written to the Chancellor George Osborne to complain about air passenger taxes on flights to the Cayman.

He had also approached MPs who had criticised the Islands.

At the time he had told the Bureau: “You have confused lobbying Parliament, which I do not do, with lobbying the Government, which I do.”

In response to the Commissioner’s first inquiry, Lord Blencathra insisted he did not lobby Parliament and would not do so.

“None of my work involves lobbying Parliament or seeking to influence either House. I made that clear when I took on the role that I would not do that,” he said. He added that his job did not involve “using my position to influence Parliament”.

He added:”‘I have never sought to gain advantage for the Cayman Islands Government in Parliament nor with MPs nor peers.”

Mr Kernaghan subsequently concluded, in November 2012, that there was “no evidence that Lord Blencathra exercised parliamentary influence on behalf of the Cayman Islands Government Office in the UK.”

The Commissioner added: “Equally, no evidence has been presented that he provided parliamentary advice or services.”

Peer’s contract was not examined

But the evidence scrutinised by the Commissioner as part of the 2012 investigation did not include Lord Blencathra’s contract with the Cayman Islands Government. The Commissioner had the power to request a copy, but this did not form part of the evidence.

Today’s report reveals Lord Blencathra did not share his 2011/12 contract with the Commission when he conducted his 2012 investigation. The report adds: “In submission to this investigation he [Lord Blencathra] said he did not do so as it was irrelevant to the specific allegations made against him.”

The Commissioner concludes that “the contract should have been considered potentially relevant so should have been disclosed.”

The Bureau obtained a copy of the contract in April. The contract was signed in November 2011 between Lord Blencathra’s company, Two Lions Consultancy Ltd, and the Finance Ministry of the Cayman Islands Government.

Under the contract, the company’s responsibilities included: “Promoting the Cayman Islands’ interests in the UK and Europe by liaising with and making representations to UK ministers, the FCO (Foreign and Commonwealth Office), Members of Parliament in the House of Commons and Members of the House of Lords.”

Lord Blencathra said his contract required him to provide 14 services but several of them were never acted upon.

“This was the first time a contract of this nature was drawn up and the [then] Premier wanted every possible item included. I made clear that I would not be lobbying Parliament or MPs…that was firmly understood between us.”

Following the Standards Commissioner’s decision in November 2012 the contract was amended.

Under the changed contract he was still responsible for “promoting the Cayman Islands’ interests with respect to financial services in the UK and Europe by liaising with and making representations to key governmental stakeholders”.

A second new clause required him to “assist with lobbying efforts on financial services arising out of EU directives”.

Related story: Lord Blencathra’s contract with Cayman Islands stated he would lobby MPs and Lords 

The Commissioner today accepted that the peer never intended to lobby Parliament despite the contract stipulating that he would do so.

“Lord Blencathra’s evidence… was that when he took on this consultancy role he made it clear to the Cayman Islands Government that he would not lobby Parliament and, he states, this express qualification of his ostensible commitments was firmly understood between him and his client,” his report says.

The Commissioner stated that there was “no evidence to dispute this, nor to show that Lord Blencathra ever actually provided such services (which could be thought indicative of his never in fact having undertaken to do so)”.

Paul Flynn MP said: “I think the sub-committee have been very lenient with Lord Blencathra as he didn’t reveal to the first investigation that he had signed a contract in which he had agreed to lobby. The sub-committee would be justified in suspending him from the House and this would be in line with previous decisions. I believe he has got off lightly. The danger of future scandals from lobbying is as serious now as when David Cameron warned in March 2010 that lobbying would be the next major scandal.”

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