Whispered over tea and cake: price for a peer to fix the law (in favour of smart metering). Times January 25, 2009

 

“He went on to describe how he had previously worked to ensure the Energy Bill was favourable to a client that sells smart meters for electricity and gas supplies. The bill has created a huge market for smart meters — which give consumers more detail on energy usage — by making it law that every household and business must have one”

http://www.timesonline.co.uk/tol/news/politics/article5581570.ece

 From The Sunday Times January 25, 2009

Whispered over tea and cake: price for a peer to fix the lawInsight: Jonathan Calvert, Claire Newell and Michael Gillard BARON TRUSCOTT of St James’s took a bite of his teacake before explaining to the two lobbyists in front of him just how much it would cost to hire a peer of the realm.

“Rates vary between £1,000 and £5,000 a day,” he said quietly, his voice almost drowned by the chatter in the House of the Lords dining room. It was a question, he agreed, of getting the right person rather than haggling over the money.

Truscott — a former Labour MEP who was a government minister until 18 months ago — made it clear he had exactly the right credentials.

In the course of their short tea-time conversation he agreed to help them amend a government bill that was harmful to their client, in return for cash. He said he had done similar work before. He said he had intervened on the Energy Bill — a piece of legislation he had been responsible for as a minister only months earlier. His fee was seemingly modest by peers’ standards, but probably not for most people outside the house. He charged £2,000 a day, which would have added up to £72,000 for the three-day-a-month one-year contract he later proposed.

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However, he confided to the lobbyists, he had to be a “bit careful” and could not table the amendment himself. “There are ways to do these things, but there is a degree of subtlety . . . work behind the scenes,” he said.

What he didn’t know was that the two lobbyists were both undercover Sunday Times reporters. One of them had been in a very similar situation in the dying days of the last Conservative government, when he posed as an investor and offered MPs £1,000 to table a question in the Commons. This newspaper’s cash for questions exposé caused an outcry that led to a tightening of the rules on paid consultancies for members of both Houses of Parliament.

But now, 15 years on, we were investigating allegations that peers were flouting those rules and could be hired to change laws — arguably an even more serious misdemeanour than simply asking a question.

The House of Lords is supposed to be an important check on the power of the Commons, where mature and independent peers bring their experience to bear on proposed legislation.

However, we found that four Labour peers were willing to help amend laws for a fee. All four said they were acting within the rules as they would not personally be tabling the amendment. Yet their code of conduct says peers “must never accept any financial inducement as an incentive or reward for exercising parliamentary influence”.

Yesterday Baroness Royall of Blaisdon, leader of Lords, said: “I am deeply concerned about these allegations. I have spoken to the members who are the subject of them, and I shall be pursuing these matters with the utmost vigour.”

Our inquiries began with Lord Taylor of Blackburn, a well-connected Labour peer who is a close friend of Jack Straw, the justice minister, and several other members of the cabinet.

In October, Taylor was forced to make a public apology after he asked a question in the house without declaring its relevance to a paid client.

Taylor, a peer since 1978 and a former education adviser to Margaret Thatcher, was only too happy to meet our undercover reporter who had phoned seeking a “political consultant”. The meeting took place in the peers’ guest room overlooking the Thames on the last day before the Christmas recess.

Within earshot of Lord Ashdown, the former leader of the Liberal Democrats, and Lord Lawson, a chancellor of the exchequer under Thatcher, Taylor bellowed: “There’s more business done in here than what’s done in most government offices, or most offices.”

Taylor’s private business is certainly thriving: he is a paid consultant to seven businesses and has another four non-executive directorships. He said some of his companies paid him £100,000, adding: “That’s cheap for what I do for them.”

He explained how he used the guest room for his business. “If I want to get a point over to a minister or a civil servant, this is the place where I would do it . . . I can speak better and they will speak more freer over a cup of coffee or a pie and a pint . . . rather than a boardroom table or a ministerial desk where everything is being written down.”

The dining room across the corridor is also used to impress his private clients. “ You can buy a lunch at the Dorchester or the Ritz, but you can’t here, and it’s good for people to be seen here and to be working here,” he said. This was clearly what the reporter would be buying into if he hired Taylor. The reporter explained he was from a lobbying company that was representing a Hong Kong businessman who wanted some help in parliament.

The businessman, Lou Li Jiang (a made-up name), was setting up 30 retail outlets across the UK in the next 18 months as part of a consortium with a Taiwanese firm. Lou, the reporter said, was concerned that the Business Rate Supplements Bill, which was then between first and second readings in the Commons, would impose extra taxes on his business.

After explaining that he was willing to pay for Taylor’s services, the reporter asked him whether he would help introduce an amendment to the bill that would exempt new businesses from having to pay the tax. “Well, these are things where I can come in quite well,” Taylor replied. He said he had changed legislation before on behalf of Experian, the credit-check company, which pays him for consultancy work.

Taylor: I’ve been working with them on amending a statute that’s coming out, or was coming out, because I’ve got it delayed now, whereby it was going to be difficult for them to get certain information and so on. So I’ve got that amended and you do it quietly behind the scenes, you see.

Reporter: How did you manage to do that? Do you actually put in an amendment yourself?

Taylor: No, no, no. You don’t do things like that. That’s stupid. What you do is you talk to the parliamentary team who drafts the statute . . . you meet the minister, you meet the various people.

Over the course of the meeting, and at a lunch earlier this month, Taylor agreed to attempt to amend the bill “behind the scenes” and negotiated an annual fee of £120,000.

His aim was to change the legislation without putting any formal amendment down. He admitted: “I will work within the rules, but the rules are meant to be bent sometimes.” He said he would tap up his ministerial contacts such as Lord Mandelson, the business secretary, and Yvette Cooper, the chief secretary to the Treasury, as well as civil servants drafting the bill. “I’ve always got somebody in the department that knows people that know people. I’m telling you too much.”

So if the peers’ tearooms were such a hive of business activity as Taylor described, how many other peers were offering similar services? Our reporters approached more lords to find out.

A flick through the Lords register of interests shows many peers have paid “consultancies”. At the first meeting with Truscott in mid-January, he claimed as many as 60% now had outside interests. “With most people in the Lords it’s part-time. . . We meet at 2 or 3 three o’clock in the afternoon and go on until 10. . . Most people have outside interests as a result.”

Peers are not paid for their work in the house. They receive an attendance allowance of £330 a day — generous but relatively insignificant for some of the ex-ministers, captains of industry and former quangocrats who fill the Lords. Their speeches may be thinly attended but they exert real power in shaping legislation. Truscott was quite optimistic a campaign to amend the law for the reporter’s fictional Far East client would be successful.

He explained: “You start in the Commons, but it’s easier to amend things here. The government has lost two votes in the Commons since 1997 and 400 votes in the Lords. Because of the inbuilt governmental majority in the Commons, it’s a lot easier to amend things here.”

While stopping short of offering to put down an amendment himself, he said he would identify and talk to people who could be persuaded to change the legislation. He offered to talk to MPs, Lords, civil servants and John Healey, the minister in charge of the legislation, in return for the consultancy fee.

Since leaving government 18 months ago, Truscott has acquired seven consultancies and four non-executive directorships. As a former energy minister, he has been helping Gazprom, the Russian gas giant, in the UK and recently hosted a dinner in the Lords for the company’s executives.

After the first meeting, Truscott was so keen to take up the work he e-mailed his CV to the reporters. At a London hotel last week, he made his position clear: “I can work with you over it . . . identifying people and following it . . . meeting people, talking to people to facilitate the amendment and making sure the thing is granted.”

He went on to describe how he had previously worked to ensure the Energy Bill was favourable to a client that sells smart meters for electricity and gas supplies. The bill has created a huge market for smart meters — which give consumers more detail on energy usage — by making it law that every household and business must have one.

Truscott: Bringing it back to the Energy Bill. I had meetings with the bill team and the relevant minister and the head of policy at . . . BERR (the department for business).

Reporter: And did you manage to get the amendment in that instance?

Truscott: They (his smart meter client) got the result they wanted . . . They wanted a commitment that smart metering would be in the bill and that it would be rolled out . . .

Reporter: Were they in the bill originally?

Truscott: There was some debate about whether they would be in, and there was certainly no government commitment to when or over what period (it would be rolled out).

Reporter: So you managed to get that changed so that it would be in there?

Truscott: Yes, yes . . .

His client was probably Landis+Gyr, a Swiss-based company that sells smart meters. This is registered as “non- parliamentary” consultancy in his entry to the register of interests. If Truscott had been paid by the company to do work in parliament then it should have been declared as “parliamentary lobbying”, which means he would have had to make public the amount he is paid.

Indeed, Truscott told the reporters he would register their payments as non-parliamentary, even though the work he had been asked to do initially was directly related to the Lords. “It wouldn’t be exclusively parliamentary work . . . it might be that the next one has a broader remit,” he said.

On Thursday, Lord Snape, a former Labour whip, also indicated he would be willing to help the reporters amend the bill for a fee of up to £24,000 a year. “Depending on who is on the Commons committee, if I had a chat I could see if I could get them to table an amendment in committee. It would be better if you could get a government person to do it, purely in political terms.”

He also offered to make representations to Healey. “I can approach him behind the scenes to say, ‘You know this is the purpose behind the amendment, look at it’.”

Lord Moonie, a former defence minister, also offered to assist in return for an annual fee of £30,000. Moonie said he would contact Healey and offered to identify people who could put down an amendment.

Moonie is a social friend of Gordon Brown and was ennobled in 2005. He gave up his parliamentary seat reportedly so that Brown could keep his in a boundary change.

The peer said the rules in the Lords were lax. “The thing with the Lords is that there’s virtually nothing they can do with you, unless you break the law . . . Even if you don’t declare, there’s nothing they can do but jump up and down.”

On Friday, Taylor claimed that he had known he was dealing with undercover reporters from the beginning and had “played them along”. He said the Experian amendment was done through a trade agency.

Truscott denied any wrongdoing. He said: “All I was going to do was to assist (the reporters) to make their case so they could lobby to make amendments.” He said he had not amended any legislation on the Energy Bill.

Snape issued a statement saying he had made it clear to the reporters that he was unable to “initiate or amend any legislation on behalf of an individual or a company”. However, he said he did think the reporters’ proposed exemption might be “beneficial” and undertook to “investigate” further.

Moonie said on Friday: “I did not agree to amend the legislation. I agreed to seek to help to find a way of trying to amend the legislation.”

Landis+Gyr and Experian said they employed peers to give advice and not to change legislation. L+G said smart meters already had the support of Brown before the firm hired Truscott.

A statement relating to Lord Snape is available here

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