British MPs React to Rules That Curtail Outside Fees

BRITISH parliamentarians who have been acting as paid consultants and lobbyists for companies and other organizations are suddenly facing a lean financial future.

Days after the passage of new rules regarding such consulting work, one Conservative member of Parliament (MP) was already under investigation for allegedly using his influence in return for shares in a British company. The ban on direct advocacy of commercial interests, and compulsory disclosure of earnings from outside consultancies, mean that many of the 651 MPs at Westminster will have to get by on a House of Commons salary of a mere 35,000 ($54,407) a year. By some reports, some senior Conservative MPs hold consultancies worth as much as 50,000 a year.

In light of the new rules, many British lobbying companies have already decided to drop MPs from their books. Most of the MPs affected are Conservatives, and several are bitter that a lucrative source of income is about to dry up. Some are blaming Prime Minister John Major, who generally supported the measure, for their misfortune.

A smaller number of opposition Labour MPs earn fees as parliamentary advisers, but all have said they are ready to declare the details.

Labour has accused Patrick Nicholls, a former government minister, of agreeing to take a 5 percent shareholding in a water company as payment for trying to persuade the government to buy its products. He denies that he did anything wrong.

The watershed vote in the House of Commons on Nov. 6, when the new rules were approved, is already transforming long-established links between key political figures and big business.

Some Conservative members have threatened to defy the will of Parliament and keep information about what they earn as consultants and advisers a secret.

The Commons voted for the reforms by a convincing majority of 51 despite pleas by Mr. Major that details of payments for outside consultancies be kept private.

In the wake of what is widely acknowledged to be a massive political setback for the prime minister, several companies now say MPs are unlikely to be useful to them.

Tom McNally, a director of Shandwick Consultants, which kept former Cabinet ministers on its team of advisers, says: ''In the light of the new parliamentary rules, such arrangements are no longer worth the candle.''

More than 100 Conservative MPs (about a third of the ruling party) are believed to earn fees from outside consultancies. By next April, when the new rules begin to bite, they will either have to declare their earnings in detail or give up their consultancies.

The sweeping reforms were prompted by a series of scandals in the past two years in which it emerged that some members were willing to ask questions in the House of Commons in return for a fee. Major set up a permanent commission on parliamentary ethics. The commission recommended a ban on commercial advocacy by MPs and full disclosure of outside earnings.

At first Major supported the recommendations, but a month ago he changed his mind about disclosure and urged Conservatives to vote against it. Tony Blair, the Labour opposition leader, greeted the Commons vote rejecting Major's stance as ''a humiliation'' for the prime minister.

Vernon Bogdanor, a leading constitutional expert at Oxford University, says the reforms mean that Britons ''can now be proud of our Parliament again.'' He adds: ''The public are entitled to an assurance that the outcome of legislation is determined by MPs' perception of the public interest, not by their own financial interests. That assurance can only be obtained through disclosure.''

The impact of the new rules, which will be enforced by a parliamentary ethics committee and supervised by a newly appointed parliamentary commissioner for standards, is likely to be felt immediately. The rules will prevent MPs who receive consultancy fees from tabling questions, motions or amendments to bills, or introducing bills on behalf of a client. Mr. Bogdanor says this will ''transform the way Parliament operates.''

MPs are banned from direct advocacy of commercial interests and must disclose all earnings from outside consultancies.

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