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Westminster Accounts: How the Owen Paterson scandal blew open the debate over MPs' second jobs

Three months before the general election in 2010, David Cameron declared British politics was "broken". 

The backdrop to the then-leader of the opposition's speech was the public outcry prompted by the expenses scandal a year earlier.

The leaked details revealed claims made by MPs ranging from the outlandish to the outright criminal - from the reimbursement for duck houses and moat cleaning to false accounting and fraud.

But the soon-to-be prime minister warned the rot in Westminster went far deeper.

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"If anyone thinks that cleaning up politics means dealing with [expenses] alone and then forgetting about it, they are wrong. Because there is another big issue that we can no longer ignore," Mr Cameron said.

"It is the next big scandal waiting to happen. It's an issue that crosses party lines and has tainted our politics for too long, an issue that exposes the far-too-cozy relationship between politics, Government, business and money."

Mr Cameron was talking about opaque lobbying and what he described as the "crony capitalism" at the heart of the political system.

Thirteen years on, and five prime ministers later, some things have changed - the Independent Parliamentary Standards Authority now publishes all MPs' expense claims, a register of consultant lobbyists has been established, and there is greater scrutiny of individual declarations of interests.

But despite numerous reports, reviews and recommendations, there remain major unresolved issues around the confluence of money, influence, and power - in particular, the question of MPs' outside interests, or in lay terms, second jobs.

Recommendations not implemented

As part of its 2009 inquiry in the wake of the expenses scandal, the Committee on Standards in Public Life said MPs should continue to be allowed to undertake paid external work so long as it remained within "reasonable limits" and, crucially, was made more transparent.

But in 2018, Lord Bew, the then chair of the Committee on Standards in Public Life, wrote to Prime Minister Theresa May saying it was "regrettable" that the government and parliament had not fully implemented the recommendations made nine years earlier.

Lord Bew said there remained "insufficient transparency to the public about what outside interests are held by some MPs" and that "there may be cases where outside interests can lead to undue influence on our political system".

He recommended parliament do more to "enable transparency", saying, "the Register of Members' Financial Interests must be more accessible, searchable and usable."

More than four years on, it has taken the Westminster Accounts project by Sky News and Tortoise Media to edge towards a solution to the problem he identified.

But Lord Bew's key recommendation was to update the rules around second jobs.

The report stated: "MPs should not accept any paid work to provide services as a Parliamentary strategist, adviser or consultant, for example, advising on Parliamentary affairs or on how to influence parliament and its members."

It called on parliament to debate and vote on the committee's proposal within nine months.

This did not happen.

As things stand, there are no rules against MPs being paid for advising external businesses provided they record it in their register of interests, and they refrain from lobbying the government directly on behalf of those businesses.

Despite Lord Bew's recommendations, the all-dominating rows over Brexit and the subsequent COVID pandemic saw the issue of MPs' second jobs slip down the political agenda.

That is until it exploded back into the spotlight in the autumn of 2021.

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The Owen Paterson scandal

On 26 October 2021, the Parliamentary Commissioner for Standards ruled that former Northern Ireland Secretary Owen Paterson had repeatedly breached lobbying rules on paid advocacy and recommended a 30-day suspension from the Commons for Mr Paterson.

The Conservative MP for North Shropshire had been paid for consultancy work for clinical diagnostics company Randox from 2015 and food processor Lynn's Country Foods from 2016.

The Commissioner said Mr Paterson had "repeatedly used his privileged position" to make multiple approaches to government departments and ministers on behalf of the companies.

The investigation found he had made three approaches to the Food Standards Agency (FSA) on behalf of Randox regarding the testing of antibiotics in milk in 2016 and 2017. He had also approached ministers at the Department for International Development four times about its blood testing technology.

On behalf of Lynn's Country Foods, Mr Paterson was found to have breached the rules by making seven approaches to the FSA between 2017 and 2018 and failing to declare he was working as a paid consultant for the company in four emails between 2016 and 2018.

He also breached the rules on using parliamentary facilities by using his Commons office 16 times for business meetings with clients between 2016 and 2020 and sending two letters relating to his business interests on House of Commons headed notepaper.

Backlash against Boris Johnson

The then-prime minister, Boris Johnson, initially wanted Mr Paterson to be saved from a Commons suspension pending a review of the appeals procedures in the standards process.

But after a significant backlash, Mr Johnson was forced to U-turn.

Mr Paterson, who denied breaking the rules and said he was raising important issues around food contamination, resigned as an MP before a vote on his suspension could be imposed.

But that did not stop debate raging about whether certain outside roles were compatible with being an MP, with some arguing that politicians should be banned from second jobs altogether.

However, critics of such a move said arbitrarily deciding which roles were acceptable would be problematic.

Others pointed out that a blanket ban on second jobs would deprive politics of individuals with valuable outside experience, such as in the world of business and the NHS.

But the tide was turning and, pre-empting change that might be on the way, several MPs chose to quit their lucrative outside roles unilaterally in the wake of the scandal.

Julian Smith, a Conservative former cabinet minister, quit all his private sector advisory roles, which had been earning him £144,000 per year.

Sir Iain Duncan Smith, the former Conservative leader, ended his membership of Tunstall Health Group's international advisory board, a role that had been earning him £20,000 per year.

Mr Johnson's stance left some in Westminster bemused

Amid calls for something to be done and attempts from Labour to force the government's hand, Mr Johnson decided to act.

Setting out the government's stance in November 2021, Mr Johnson said the government would back Lord Bew's 2018 recommendation that MPs be banned from taking paid work as parliamentary strategists, advisers, or consultants.

The then prime minister said the government would back "cross-party work" to update the MPs' code of conduct, but backtracked on comments he had made a day earlier in which he suggested MPs who prioritise outside interests would be subject to punishment.

Work to change the rules begins

Later that same month, the Committee on Standards launched a consultation to weigh up the pros and cons of changing the rules around second jobs.

The report that followed, which was published in May 2022, repeated the recommendation that MPs be banned from working as parliamentary strategists, advisers or consultants but also went further.

It proposed a new requirement for MPs to sign contracts with their outside employers, setting out the work that was expected of them and specifying that the duties would not include lobbying ministers.

It also suggested extending a rule that prevents MPs who receive money from an external source from initiating parliamentary proceedings where there may be a conflict of interest to banning them from participating in such proceedings altogether.

On 12 December, the Government finally put forward a motion for a vote, which was approved by MPs.

The new rules - including the ban on undertaking paid work as a parliamentary strategist, adviser or consultant - are due to take effect from 1 March 2023.

It is not clear exactly how many MPs will be affected by the changes, as it will depend on how strictly the rule is enforced, but some involved in drafting the changes say it could be as many as 30.

Labour pledge to go further

The Labour Party has said it will ban second jobs for MPs if it wins the next general election.

A Labour review of the constitution by former prime minister Gordon Brown, published last month, recommended banning second jobs but with an exemption for MPs who need to work to maintain professional qualifications such as doctors and lawyers.

Mr Brown also recommended a new integrity and ethics commission be created to investigate alleged breaches of the ministers' code of conduct.

Sir Keir Starmer endorsed the recommendations.

In 2021, Sir Keir told Sky News he was "in discussion" with top law firm Mishcon de Reya about working there on top of his MP role in 2017 "but nothing happened".

He declared more than £25,000 for legal work carried out before he became Labour leader but while he was an MP, including almost £10,000 for advising Gibraltar's government.

But in 2021, he told Sky News: "I have given written pieces of legal advice since I've been an MP, but I have now given up my legal certificate. I gave it up the best part of two years ago.

"That means I'm no longer qualified to give legal advice, and my job is to represent people in Holborn and St Pancras and to bring down this awful government."