Far too little is known about one aspect of the closeness of connections between MPs and private companies: the stake of the former in the latter. This is because parliamentarians’ investments in firms have been rendered largely secret. That was until this week when the Guardian revealed that more than 50 members of parliament have owned stakes in publicly listed companies, raising questions about possible conflicts of interest. MPs have only to register holdings greater than 15% of a company, or those valued at more than £70,000. Below those limits, the test for MPs to consider is whether their interests might reasonably be thought by others to influence them. But there is no duty on MPs to declare such stakes in companies affected by legislation going through parliament. This can only be bad for democracy.
Voters are mostly left ignorant of the tension that almost certainly exists for such MPs between shielding financial interests and advancing the public good. Can it be right for a former Tory minister to criticise windfall taxes on oil and gas companies, including BP, without declaring his wife’s shares in the company, worth more than £50,000? The answer is, surely, no. Parliamentarians could argue that such ethical dilemmas don’t occur. But the system is such that the perception of these quandaries never arises.
Two layers of secrecy shroud shareholdings. The first, under Commons rules unchanged since 2015, concerns the size of the declarable corporate stake. Second, since 2006 shareholder registers have not been made public but only handed out on request. The Guardian could lift this veil because the law was drawn up to allow a distinction to be made between inquiries from “legitimate investigative” journalists and “extremist thugs” who might use the information for their “illegitimate haranguing”. Those words are revealing. Dissent about the practices of capital was viewed by the then Labour government as a threat to its owners.
The share registers are vast and computer code had to be written to format the data into interrogable form. While the companies have historic records of share ownership, there’s no legal obligation to share them. Hence the Guardian can establish that Andrea Leadsom held shares in Barclays in 2012 when questioning the bank’s ex-boss, but not the extent of her interest. This state of affairs has all the makings of a much bigger parliamentary scandal. There is nothing to stop a wealthy MP from taking up stakes of £69,999.99 in numerous companies and never having to declare the holdings. Even if the disclosure requirements were tightened to match those of the Scottish or Welsh parliaments, it would still allow for shareholdings of about £34,000 to be kept secret.
There are also ways for MPs to evade detection. Stakes could be held for MPs by nominee companies who trade on their behalf and without their names appearing on registers. Blind trusts suggest steps have been taken to manage conflicts of interests without requiring a financial divestment. But as the case of former Tory minister Jonathan Djanogly shows, that suggestion stretches credulity until it snaps. Britain should adopt US-style disclosure requirements: members of Congress have to declare within 45 days any trade in stocks over $1,000. We should make share registers public. MPs are not being denied interests and associations. But public trust in politics rests on MPs being crystal clear about their relationships with outside firms.
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