How MPs’ second jobs fail to gain them experience of the UK economy

Almost three times more British MPs declared earnings from financial services companies than from manufacturing, FT analysis has revealed — one of many imbalances that may complicate Tory efforts to defend legislators’ right to pursue part-time careers.

MPs’ right to hold second jobs, which spurred a political row this month, has been defended by Jacob Rees-Mogg, leader of the House of Commons. He told Parliament that it was “a historic strength . . . that MPs should have a wider focus than the Westminster bubble”.

The government has now proposed changes to the rules to bar MPs from doing too many hours of outside work or acting as political consultants — but to preserve their right to have other income. A report on how the new rules might operate is set to be published by a cross-party committee next week.

In declarations made since the last election in 2019, some of which relate to the year before the vote, 37 MPs have registered income of various kinds from financial services companies — the largest such bloc of corporate income. The sector accounts for 8.1 per cent of UK GDP.

These include longstanding contractual relationships as well as one-off payments — such as the £160,000 paid to Theresa May, the former prime minister, by JPMorgan Chase in April 2020. The sum was an “advance payment” for two speeches that were postponed by the pandemic; she has yet to give one of them.

By contrast, just 13 MPs have received income from manufacturers, which contribute 9.9 per cent of GDP. Just 8 MPs have financial links to retailers, which contribute 4.9 per cent. Public relations or lobbying companies have employed 30 MPs.

Hannah White, deputy director of the Institute for Government who previously ran the independent Committee on Standards in Public Life, said: “If the point of second jobs is to ensure that MPs can bring real life experience to parliament, then it is deeply problematic that the experience MPs are actually getting is so unrepresentative of the UK economy”.

This has become a partisan issue because of an imbalance in who holds these posts: the positions listed above were held by 68 Tory MPs and just 18 legislators from all the other parties combined.

The issue was also brought to public attention by the actions of Owen Paterson, a Conservative former minister, who was found by a bipartisan committee to have “repeatedly used his position as a member to promote the companies by whom he was paid” in a manner not permitted by the rules. The government whipped its MPs to save him from proposed sanctions — only to be forced to retreat in the face of a public backlash.

Some forms of outside income are more bipartisan: 155 MPs received additional funds from filling in surveys for pollsters — receiving between £30 and £275 for each survey, which typically takes less than an hour.

Meanwhile 105 MPs declared earnings from the media, largely for writing articles (including for the FT Group) or TV appearances. Another 63 have held paid roles in local government. An additional 23 have declared income from book publishing.

Westminster MPs are allowed to lobby ministers on behalf of companies that have given them money or gifts, and to advocate for them in debates so long as they do not “initiate” conversations or debates. Clients must also not “exclusively” benefit from anything they propose. They also must not use parliamentary facilities for business.

These rules are weaker than in the UK’s devolved parliaments, and markedly weaker than those in the US House of Representatives — where there is a cap on some kinds of earned income and outright bans on others.

Members of the House of Representatives are banned from practising law to prevent them from having conflicting public and private duties.

In the UK, lawyer-MPs are allowed to practise and are not required to disclose their ultimate clients. The 30 MPs declaring income from law — mostly as barristers — include some of Parliament’s biggest earners, such as Sir Geoffrey Cox, the former attorney-general. Cox, whose large volume of outside work helped fuel the outrage over MPs’ second jobs, told the FT that barristers were hired “to advise and represent . . . on a specific issue or in litigation”, not for general representation.

Lawyers are heavily represented in parliament, but together with accountancy, from which 7 MPs declared earnings, the legal sector contributes just 2.7 per cent of GDP.

In the US, members of the House are banned from accepting most gifts — with a particular prohibition on gifts from lobbyists or anyone who also engages a lobbyist. No such bar exists in the UK, where 26 MPs have registered gifts from betting companies and their lobbying body. A total of 111 MPs have taken gifts or hospitality from sports businesses.

The largest gift went to Tracey Crouch, who has just completed a review of the regulation of English football on behalf of the UK government. She declared a £4,560 hospitality package from the Football Association, the sport’s English body, to watch a football match.

“It turns out to be only a small set of businesses that are most interested in paying and entertaining MPs,” said Duncan Hames, a former MP and director of policy at Transparency International UK. “That these companies are often heavily regulated suggests more interest in their parliamentary role than prior experience they might bring.”

MPs are allowed to hold up to £70,000 of shares in a company without registering the holding, so long as the stake constitutes less than 15 per cent of the equity. They are not required to list participation in any funds. In the US, members of the House of Representatives must declare shareholdings over $1,000, as well as any other investments.

One person involved in administering the current UK system told the FT they were “very sceptical” about comparisons to the US — “not least because of [US politicians’] need to raise campaign finance”. This, they said, led to US politicians being “more in hock to big business”.

Campaigners are calling for much more sweeping reforms than are currently being considered. Hames said: “There are still too many blind spots for mischief to hide . . . It could save a lot of trouble if, like in many other workplaces, those wanting to take on second jobs or other contractual relationships first sought authorisation from an independent body, just as former ministers are expected to do.”

Christopher Lewis

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