Monday, 13 October 2014

Anything to declare?

"Financial interests" and "politicians" in the same sentence is always combustible,
though proposed changes to National Assembly rules will dampen the fires a bit.
Last week, the National Assembly's Standards Committee and Standards Commissioner, Gerard Elias QC, reported back on possible changes to how, when and why Assembly Members report their personal and financial interests (pdf).

A consultation with AMs began in January 2014, and a preliminary report was prepared by the Standards Commissioner in July 2014.

It's said five (of ten) categories of financial/personal interests were of particular concern:
  • Remuneration, Employment, Office, Profession etc.
  • Remuneration for other material benefit
  • Financial Sponsorships
  • Shareholdings
  • Public Bodies

The Committee made 15 recommendations in total, which would mostly result in changes to the National Assembly's Standing Order 2 (pdf, latest version). All changes will need to be approved by the Assembly before coming into force.

Employment status of dependent children

At the moment, AMs need to declare the employment status/job of partners, as well as children aged 16-19 (where applicable). The Standards Commissioner considers the requirement relating to children as "intrusive" as it would drag the personal life of AMs' children into the public domain. Currently, the National Assembly is the only legislature in the UK that requires this information to be formally declared.

There are obvious exceptions to this – like an AM employing their own child, and that's dealt with under a separate set of Standing Orders – but the Committee believes AMs should instead make an oral declaration of a "family interest" of this kind where relevant.

The Committee therefore recommended that the requirement to register the employment status of a dependent child aged over-16 be removed.

Receipt of public funds

A separate registration category for "receipt of public funds" was considered, but rejected as it would be a duplication. The Committee agreed that receipt of public funds (grants etc.) should be registered by AMs, but that clear guidance was needed on what would count as "public funds".

They also agreed that pensions should no longer be considered a registrable form of remuneration.
Assembly Contracts

AMs need to register an interest where any company they, or their immediate family, receive money from (including, presumably, things like shareholder dividends) are tendering for, or has won, a contract to provide services to the National Assembly.

The Committee believe this was unfair, as AMs might not always have knowledge of what companies are bidding for what. So the rules will be changed so AMs only have to register an interest when they know for absolute certainty that a company they're involved with has won a contract or is tendering for one.


There's a general duty on AMs to register shareholdings they, or their family, hold that are worth more than 1% of the total shares issued by a company. There's a recommendation that share options (shares offered to employees in lieu of/in addition to pay) are included as registrable.

The big concern here relates to so-called "blind trusts" where the beneficiaries have no idea what investments are made or where as control is handed over to independent experts. This is an obvious advantage to politicians, who can gain financially from these schemes without attracting scrutiny, as any decisions would be independent of their political careers or unaffected by their political decisions. The recommendation is that AMs declare any "blind trusts" they hold.

Membership of an Assembly-funded body

The issue here was about clarity, specifically what "membership" means. Not declaring memberships of this sort is a potential criminal offence, so some AMs are registering memberships of organisations like the WRU and National Trust to be on the safe side.

The Commissioner believed it was more appropriate to focus on memberships of organisations where the AM's presence would, in itself, "put them in a position to promote a cause" – this includes being a patron of a charity, memberships of governing bodies, trustee positions and any sort of paid executive or administrative role.

The Committee recommended that Standing Orders be changed to narrowly-define what "membership" means, and require AMs to register "where they knew or ought to have known" about Assembly funding.

Financial Sponsorship

The Electoral Commission already requires elected representatives to declare sponsorship or financial donations, so requiring AMs to register again with the National Assembly was "double declaration" and a needless duplication. The Committee recommended that this "double declaration" be removed, and it's suggested they work with the Wales Office, Electoral Commission and Assembly Commission to get this underway – but it might take some time.

Oral declarations

There are rules already in place setting out when AMs need to make an oral declaration in Assembly proceedings if they, or their family, have a financial interest or would be set to gain financially by any decisions made in the meeting.

The Commissioner proposed changing the wording to ensure AMs declare an interest if they would benefit financially from any decision "to a greater extent than the electorate generally". An example's given where an AM who's a landlord might benefit from decisions made with regard rent regulations.

Dealing with breaches

It's a criminal offence for an AM to take part in Assembly proceedings without declaring personal or financial interests as outlined by Standing Orders – this includes both accidental/delayed omissions and deliberate omissions.

The Commissioner believes relations between AMs and the Assembly Commission would sour if 
"accidental"/"trivial" cases were referred to the the Director of Public Prosecutions (DPP) straight away, as set out in Standing Orders.

It was recommended, therefore, where there's a breach of Standing Order 2, the case first be referred directly to the Standards Commissioner, who would then decide – as an independent adjudicator – whether a case needs to be either referred to the DPP, be subject to code of conduct investigations or dealt with informally.


You would've thought having "financial interests" and "Assembly Members" in the same sentence would've got the Western Mail salivating, but this was too boring even for them, and only warranted around 100 words from BBC Wales.

This is an important post, just to underline how strict the rules are so people don't get the impression AMs are routinely "on the take". It takes some accounting gymnastics and whopping big lies to get away with it.

I know you all loves a bit of intrigue and scandal, but the reality is that AMs are well-behaved and understand what they should or shouldn't do here. I can't remember any cases where an AM has come a cropper of these particular rules, and I don't believe there's a threat of that happening either.

Most of the recommendations here seem largely about making things clearer, adding the requirement about declaring receipt of public funds, and you could even say the rules have been relaxed a little bit or simplified. Why would we need to know if an AM's son or daughter is flipping burgers, for example?

It's worth pointing out that the consultation with AMs began before the Alun Davies sacking, and it's just very timely that it covers declaration of financial interests.

I don't believe this vindicates Alun at all (as touched on by National Left).

Although it's absolutely right AMs declare all financial and personal interests, it was the manner by which Alun handled it – some tu quoque political posturing which dragged in the civil service (after being warned not to) - that turned what was a perfectly legitimate point into a scandal.

"Keep cooly cool, boy".


Post a Comment