1.    Mr David Heathcoat-Amory, Member for Wells, wrote to me on 13 March 2000 (Annex A) alleging that Mr John Prescott, Member for Kingston Upon Hull East, had not registered a benefit.

2.    This complaint was supported by Mr Terence Sullivan of Morden, Surrey in a letter of 20 March 2000. Mr Sullivan added a further complaint, namely that Mr Prescott had an undeclared and unresolved conflict of interest arising from the same benefit (Annex B) .

3.    I subsequently received a letter of 5 April 2000 from Mr Andrew Robathan, Member for Blaby, supporting both of these complaints and attaching some background material (Annex C)

THE COMPLAINTS

4.    A.  The complaint relating to alleged non-registration is that—

(i)  Mr Prescott had received a material benefit provided to him or his family in the form of a flat let to him by the Rail Maritime and Transport Union (RMT) at below market rent;


(ii)  the value of the benefit exceeded the 0.5 per cent of a Member's salary which is the threshold for registering a material benefit;


(iii)  the RMT was clearly interested in the decisions made by Mr Prescott as a Minister and the provision of the benefit therefore might reasonably be thought by others to influence Mr Prescott's actions and votes in the House of Commons;


(iv)  the benefit was registrable and Mr Prescott had failed to register it.

B.  The complaint relating to an alleged conflict of interest is that—

(i)  Mr Prescott, as Secretary of State for the Environment, Transport and the Regions, enacted the Rent Acts (Maximum Fair Rent) Order 1999, which limited rent increases on regulated tenancies to 7.5% above the rise in the retail price index (RPI) on first re-registration and to 5% above the RPI increase on subsequent re-registration; and


(ii)  Mr Prescott, as a regulated tenant of the RMT, was a direct beneficiary of the Order and therefore had a conflict of interest which he had neither disclosed nor sought to resolve.

A.  THE COMPLAINT RELATING TO ALLEGED NON-REGISTRATION

BACKGROUND

5.    The flat referred to in the complaints is part of a building called Maritime House in Clapham, London SW4. The building consists of 31 flats and 2 annex flats. With the exception of those which have been sold on long leases, all the flats in the building are let by the RMT on the basis of statutory secure controlled tenancies. The rents are set by the Rent Officer, subject to periodic reviews, which may be requested by the landlord (Annex D).

MR PRESCOTT'S RESPONSE

6.    Mr Prescott provided me with a detailed response (Annex E) and told me that he had stayed in the Maritime House flats as a Union researcher before he was elected to Parliament. When he was elected he applied for a tenancy and was granted one within a year of becoming a Member. The flats in Maritime House were allocated by the Union to a variety of people in the Labour Movement who needed long or short term London accommodation. The flat was allocated to Mr Prescott for the same reason and on the same basis as to others who satisfied these criteria. He took up residence in one flat at Maritime House in 1970, before moving to another flat in 1974. The flats were originally rented from the National Union of Seamen (NUS) and subsequently from the successor trade union, the RMT, by each of whom Mr Prescott had been sponsored in turn as a Member of Parliament. Mr Prescott has registered these sponsorships from 1975, when registration was first required, but since he considered renting the flat to be a quite separate transaction and no part of the sponsorship arrangement he had made no mention of it in the Register.

7.    Mr Prescott added that his son had moved into the flat in 1995; that he himself had moved out to take up residence in Ministerial accommodation in Admiralty House at the end of 1997, but that his son had stayed on at Maritime House. Mr Prescott has continued, however, paying the rent direct to the RMT, although he told me that he does not regard the flat as a second home. Mr Prescott does not charge his son a rent.

8.    At the time when Mr Prescott became a Minister in 1997 he had asked the RMT whether he could retain the tenancy even though he was occupying separate Ministerial accommodation, so that he would have a home in London to return to when he moved to a role which provided no official residence. The RMT acceded to this request. Mr Prescott also confirmed that an offer by him to purchase the flat had not been accepted.

9.    In summary, Mr Prescott said that the complaint was unfounded on the grounds that:

—  the rent on the flats at Maritime House was fixed independently on a statutory basis, could not be influenced by the RMT and was therefore not concessionary; the rent had, in fact, been increased periodically;


—  he was treated no differently from the other tenants in the block, either in terms of allocation or rent;


—  there was no direct connection between the renting of the flat and his sponsorship as a Member by the RMT;


—  there was accordingly no registrable benefit to him.

ANALYSIS

The Rules

10.  The rules to be considered here relating to registration are as follows -

A Member should register:

—  any gift or other benefit which in any way relates to membership of the House and which is given gratis, or at a cost below that generally available to members of the public, provided that the value of the benefit (in the case of intangibles) exceeds 0.5 per cent of the Member's salary. (There is no definition of members of the public for this purpose); (paragraph 24, page 11)


—  any other form of sponsorship or financial or material support as a Member of Parliament which involves any personal payment, benefit or advantage; (paragraph 20, page 10)


—  the provision of free or subsidised accommodation. (paragraph 23, page 11)

11.  On the basis of the information available to me it is clear that the difference between the controlled rent paid by Mr Prescott (£220 per month) and the market rent payable for similar properties not subject to statutory arrangements would substantially exceed the 0.5 per cent threshold and that in the allocation of the flat the Union took into account that he was a Member of Parliament. However, I have seen no evidence which indicates that either the Union or Mr Prescott regarded the tenancy as part of the sponsorship arrangement. Moreover, the flat was not subsidised by the Union and was not available to the Union to let at a higher rent because of Mr Prescott's secure tenancy. Therefore the Union provided no concession to Mr Prescott in terms of the level of the rent when he took up residence.

12.  It is true that, in theory, the RMT might have applied to the Rent Officer for a rent increase at any point since the levels were last fixed in 1992. In practice, however, the information I have received from the rent officer suggests that because of the need to complete a programme of refurbishment before an increase could be justified, an approach to the Rent Officer has only recently become a realistic prospect.

13.  I am satisfied that Mr Prescott did not receive more favourable rental treatment from the RMT than other tenants at Maritime House or tenants of other comparable property subject to statutory rent control. However, if a wider definition of "generally available to members of the public" is taken the matter is less straightforward. There is little doubt that Mr Prescott received a benefit at a cost not generally available to members of the public and, since the tenancy is secure, and could not be withdrawn by the RMT, the benefit was considerable. In addition, the Union agreed to a request from him to keep on the tenancy for an undefined, maybe lengthy, period during the time he had moved to a London residence provided by way of his Ministerial post.

14.  In my view the allocation process allowed Mr Prescott to benefit from a rent below market level. The allocation was agreed because as a Member of Parliament he was seen as meeting the allocation criteria set by the Union. Members of the general public would not be able to meet these criteria.

15.  Mr Prescott has registered his financial sponsorship from the Trade Union from 1975, when this was first required, and in the circumstances of this tenancy it is understandable that he did not regard the flat as an additional benefit since the low rent was not specific to him but resulted from a controlled tenancy.

16.  However, since the allocation was restricted and he fell within the relevant criteria because he was a Member of Parliament, I am of the view that he would have been wise to register the flat since it provided him with a considerable benefit not available to the general public.

17.  In the circumstances which obtained until 1997 there was some reason for Mr Prescott to assume that his tenancy was not separately registrable from his sponsorship by the RMT, although as I have indicated, it would have been better had Mr Prescott's Register entry been more specific. But the position changed in 1997 in a material way, in that Mr Prescott decided to move out of the flat into the Ministerial accommodation provided for him at Admiralty House. This changed the terms of Mr Prescott's tenancy and, as I understand it, may have placed the Union in a position to reconsider its continuation.

18.  It is clear that Mr Prescott, in approaching the RMT on this matter, saw himself, at least in some sense, as seeking a special arrangement because of his new personal circumstances, which it was within the Union's discretion to grant or not. As Mr Prescott put it in his letter to me of 20th March: "... I discussed with Jimmy Knapp the possibility of retaining my tenancy at Maritime House so that I still had a home to return to when I finished my term in Government. This Jimmy agreed to and also agreed for David [his son] to remain." I believe that Mr Prescott was given a considerable personal concession in 1997 when the Union agreed that he could retain the tenancy after he had moved out. In my view he should certainly have registered the benefit obtained from his tenancy of the flat at that point.

19.  Mr Prescott's offer to purchase the flat is not relevant to the complaint since the RMT rejected the approach.

B.  THE COMPLAINT RELATING TO AN ALLEGED CONFLICT OF INTEREST

BACKGROUND

20.  The Rent Acts (Maximum Fair Rent) Order 1999 was laid before Parliament on 11 January 1999. It was considered in a Standing Committee on Delegated Legislation on 9 March 1999, on a Motion to annul the Order moved by the official Opposition. Mr Prescott was not a member of the Committee and took no part in the debate. There were no proceedings on the Order in the House.

MR PRESCOTT'S RESPONSE

21.  So far as the allegation of a conflict of interest is concerned, Mr Prescott (Annex F) replied that the introduction of the 1999 Order owed nothing to his personal position. The Order had been made, following full consultation, as a collective decision by the Government.

ANALYSIS

22.  The substance of the complaint relating to an alleged conflict of interest was that Mr Prescott, as a regulated tenant himself, was a direct beneficiary of the Rent Acts (Maximum Fair Rent) Order 1999 and that, by implication, he should have accordingly taken no part in its enactment.

23.  Although neither Mr Sullivan nor Mr Robathan specifically alleged that Mr Prescott had breached the advocacy rule in introducing the 1999 Order, I have found it necessary to consider this point since the complaint carries with it the implication that Mr Prescott initiated a matter in Parliament directly concerned with the interests of an outside body from which he was receiving a pecuniary benefit.

24.  The Code of Conduct for Members states:

"Members shall base their conduct on a consideration of the public interest, avoid conflict between personal interest and the public interest and resolve any conflict between the two, at once, and in favour of the public interest."

25.  There is no doubt that, as the holder of a regulated tenancy of the kind covered by the 1999 Order, Mr Prescott was a potential beneficiary of its provisions. Moreover, in strict constitutional terms, Mr Prescott was responsible for the introduction of the Order and it was laid before Parliament under his name. On the other hand, like any other item of Government legislation this formed part of the overall policy of the Government at the time. I have seen no evidence to suggest that Mr Prescott personally promoted the Order nor that he took any more active part in its enactment than the usual formal role for a Secretary of State as the Minister in charge of a Government department. In these circumstances, it would be harsh, in my view, to argue that, where a Minister is implementing a change in the law as a matter of general public policy, from which he incidentally stands to benefit like any other member of the same class of people, he has a conflict of interest of the sort intended to be covered by the Code of Conduct. I would, however, have expected Mr Prescott to have made some mention within his Department of his interest in the subject matter of the Order. But that is not a matter for me as Parliamentary Commissioner for Standards.

26.  I turn to the advocacy rule as it affects this case. The rule debars any Member from advocating or initiating "any cause or matter on behalf of any outside body or individual" or from urging any other Member of either House, including Ministers, to do so, in return for any payment or benefit, direct or indirect from that body. Since Mr Prescott did not participate in the Standing Committee debate on the Order, it is only the question of possible initiation which arises. (Though if he had taken part in the debate he would certainly have been required to declare his interest.)

27.  The guidance on the advocacy rule stipulates that where a Member receives a pecuniary benefit from a body outside Parliament, he may not "initiate any parliamentary proceeding which relates specifically and directly to the affairs and interests of that body (or individual); any client of such a body (or individual); any group, sector, category or organisation whose affairs and interests are substantially the same as those of the outside body (or individual)."

28.  The note to the guidance lists a number of actions which are included in the definition of a Parliamentary proceeding. The list does not contain any mention of the making of a statutory instrument or its laying before Parliament. Nor would I expect it to do so. The making by a Minister of a statutory instrument is an executive act, not a proceeding in Parliament and so is not covered by the advocacy rule. Laying a statutory instrument before Parliament, while arguably more akin to a Parliamentary proceeding, is in all but a few rare cases a formal requirement, usually imposed by the statute under which the instrument is made. There is accordingly not the degree of discretion on the part of Ministers in deciding whether or not to lay an Order before Parliament which could lead to an allegation that a Member had breached the advocacy rule by initiating a proceeding.

29.  I conclude that, neither in making the 1999 Order nor in laying it before Parliament, did Mr Prescott initiate proceedings within the meaning of the advocacy rule. I have not therefore needed to address the question of whether, for the purposes of that rule, the subject matter of the Order was specifically and directly related to an outside body from which Mr Prescott was in receipt of a pecuniary benefit.

CONCLUSIONS

A.  COMPLAINT RELATING TO NON-REGISTRATION

30.  It would have been better if Mr Prescott had mentioned the flat allocated to him by the RMT in his Register entries up to 1997 in addition to his sponsorship by the RMT, which was properly recorded. However, for the reasons given earlier, I do not find this aspect of the complaint against Mr Prescott upheld.

31.  Mr Prescott should, however, certainly have registered the flat in 1997 in the light of the new circumstances created when he moved out and, by a concession—which was personal to him—from his landlord, the RMT, he was allowed to retain the tenancy, which may otherwise have lapsed. Complaint upheld.

B.  COMPLAINT RELATING TO ALLEGED CONFLICT OF INTEREST

32.  In making the 1999 Order Mr Prescott did not have a conflict of interest within the meaning of the Code of Conduct for Members, nor did he initiate a Parliamentary proceeding within the terms of the advocacy Rule. Complaint not upheld.

18 April 2000

Elizabeth Filkin