4.  In support of this complaint Mr Lilley cited the statements issued by Mr Robinson and his solicitors on 29 November and 8 December (Annex B) supplemented by interviews given to the Observer, the Sunday Telegraph, the Express on Sunday and Sunday Times.[1] These sources, he claimed, revealed that Mr Robinson and his family were the discretionary beneficiaries of the Orion Trust; that the Trust owned 13 million shares in his company TransTec; that Mr Robinson suggested to the Trust that they should buy from him 10 million TransTec shares; and also buy shares in Coventry City Football Club. All this indicated a close involvement with the Trust which Mr Lilley thought must surely bring it within the rule requiring disclosure.

MR ROBINSON'S RESPONSE

5.  Mr Robinson replied on 17 December 1997 to an earlier letter of mine seeking comments on the substance of Mr Lilley's complaint. At the same time he submitted an opinion from Mr Michael Beloff QC on whether his interest (if any) in the Orion Trust ought to have been included in the Register. These documents are at Annex C.

6.  The Orion Trust (shorthand for the Robinson Family No 1 and No 2 Trusts) was established in Guernsey in January 1996, on the instructions of Madame Bourgeois, a foreign national formerly living abroad, who died in October 1994. The discretionary beneficiaries were Mr and Mrs Robinson, their children, other members of Mr Robinson's family and certain charities nominated by the trustees.

7.  Distributions from the Trust were entirely within the discretion of the trustees. Mr Robinson received irregular distributions prior to his Ministerial appointment but neither he nor his family had received distributions since that appointment. If the Trust fund were wound up, the trustees would determine the distribution of the assets to the beneficiaries.

8.  At the time the trust was established, Mr Robinson acted on the professional advice of his accountants who had told him that no specific disclosure in respect of the Orion Trust was required, a view which had subsequently been supported by Counsel. Essentially, as a discretionary beneficiary of the trust, he had no right to receive any benefit from the trust fund, but only a hope that the discretion would be exercised in his favour; there was no certainty that this would ever happen. Furthermore, from the beginning of May 1997 when he was appointed Minister, the trustees agreed at his request to exclude him from being a discretionary beneficiary during his tenure of office. Though no formal deed of exclusion was executed, in practice the trustees undertook to ensure that he received no distributions from the trust after that date.

9.  In his capacity as a discretionary beneficiary, he also had no right to information about the Trust's assets and the trustees had, with the following exceptions, never volunteered such information to him.

    (i)  Prior to May 1997, as chairman of the engineering company TransTec, Mr Robinson, together with his accountants, was informed of dealings in TransTec shares so that appropriate disclosures could be made for Companies Act purposes; but following his Ministerial appointment, that information was no longer provided.

    (ii)  He had recently requested, and obtained, details of share dealings in Coventry City Football Club to enable him to instruct Counsel, following press publicity.

10.  The trustees acted independently of himself and were not controlled or influenced by him. Indeed, under the Trust deed, all investment decisions had to be made by independent investment managers (in practice an international bank). There was, however, no reason, in Counsel's view, why a beneficiary should not make suggestions to the trustees about the possible acquisition of a particular investment, and Mr Robinson had done so in the case of the TransTec rights issue and the shares in Coventry City F.C. If and when the trustees acquired such holdings, he would have no right to further information from that source of any subsequent dealings in those shares.

11.  A year after the establishment of the trust, it was discovered by the settlors administering Madame Bourgeois' estate that a further £2.95 million TransTec shares ought to have been included in the original settlement, and these were added to the Orion Trust in April 1997. The settlors have confirmed in writing that the omission was an oversight on their part.

COUNSEL'S OPINION ON REGISTRABILITY

12.  Counsel's opinion on the registrability of the Orion Trust was based on the proposition, described above, that a discretionary beneficiary possessed no right to benefit from such a trust; `perhaps the true view is that the beneficial interest is in suspense until the trustees exercise their discretion'.

13.  Category 9 of the Register deals with interests in shareholdings above a certain value held by a Member either personally or with or on behalf of the Member's spouse or dependent children. Counsel argued that, once the Orion Trust had acquired the TransTec and Coventry City shares, `neither the client nor his family had any interest in them unless and until the trustees exercised discretion in their favour'. A hope is not an interest, and therefore no registration of it could be required under category 9.

14.  Category 10 enables a Member to register any relevant interest which is not covered by the preceding nine categories of benefit but which `nevertheless falls within the definition of the main purpose of the Register which is "to provide information of any pecuniary interest or other material benefit which a Member receives which might reasonably be thought by others to influence his or her actions, speeches, or votes in Parliament, or actions taken in his or her capacity as a Member of Parliament, or which the Member considers might be thought by others to influence his or her actions in a similar manner, even though the Member receives no financial benefit."' Here Counsel contended that, for the reasons adduced above, neither Mr Robinson nor his family derived any material benefit from or held any pecuniary interest in the assets of the Orion Trust. Even if it were held that category 10 embraced any relationship which could give rise to the reasonable possibility of influence on a Member's actions, he considered that no question of potential influence could arise if a discretionary beneficiary had no knowledge of or control over the assets administered by the trustees.

15.  In the Register of Members' Interests dated 31 March 1996 and 31 January 1997 Mr Robinson had duly disclosed his shareholdings in TransTec, Coventry City and the New Statesman Ltd. In the first Register of the new Parliament, as at 31 October 1997, he had entered holdings in TransTec, the New Statesman Ltd and Stenbell Ltd and had indicated that each such holding was `held in trust', ie his own personal settlement rather than the family discretionary trust. He had felt no need to continue to register the Coventry City shares nor to make any separate reference to those TransTec shares which formed part of the Orion Trust.

ANALYSIS AND CONCLUSIONS

16.  I have now discussed these issues with Mr Robinson and his professional advisers and my conclusions are as follows.

17.  The complaint has to be judged by the criteria set out in the `Guide to the Rules relating to the Conduct of Members'. But the Guide does not pretend to cover all contingencies: and the circumstances surrounding the Orion Trust have not arisen before.

18.  It was, in my view, a mistake for Mr Robinson to rely on advice on registration matters from his professional advisers. As Counsel has recognised, the Guide is not a legal instrument and Members are specifically invited, when in doubt, to seek advice from me (or the Registrar) since we are in a better position to interpret the intentions of the Committee.

19.  Registration under Category 9 (Shareholdings) - even if desirable - would not have been possible since Mr Robinson was not informed of the shareholdings held within the Trust when the Register was being compiled.

20.  The case for registration under Category 10 (Miscellaneous) is more persuasive. Mr Robinson argues, through Counsel, that there is no case for registration since he has no right to receive a "pecuniary interest or other material benefit"; that distributions will certainly not be made to him during his tenure of office; and that, without knowledge of the underlying shareholdings, he could not "reasonably be thought by others" to be open to influence in his capacity as a Member.

21.  Against this, it can be argued that, given the purpose of the Trust, and the way it has operated in the past, Mr Robinson's hope of future distributions might reasonably be regarded as an expectation; and that, measured against the underlying intentions of the rules, this could be regarded as a "pecuniary interest or other material benefit". Moreover, the trustees' decision to suspend distributions applied to him, but not his wife. In these circumstances it can be argued that, even without knowledge of the underlying shareholdings, the existence of the Trust itself might "reasonably be thought by others" to be a source of potential influence. This is not just because Mr Robinson is a Treasury Minister: the same could be said of any Member who may wish to participate in proceedings in Parliament affecting the position of overseas trusts.

22.  On balance my conclusions are:

-  that there is no case for saying that Mr Robinson has breached a rule of the House on registration

-  that, nevertheless, his potential interest in the Orion Trust would have been better registered under Category 10

-  that this would have been my recommendation had my advice been sought.

23.  If the Committee agrees with these conclusions, it would be desirable to make it clear that potential or actual interests in overseas trusts should, in future, be registered either under Category 9 (where relevant shareholdings can be identified) or under Category 10, where they cannot.

13 January 1998