Sunday, 12 October 2008

Peter Mandelson and conflicts of interest under the Ministerial Code

I think this is absolutely fascinating.

The EU rule book decrees that Mandelson, who left his job as Trade Commissioner last week before completing his five-year term, will be eligible for about £78,000 a year for each of the next three years in 'transitional payments'. A total of £234,000 will be paid in instalments of £6,500 a month until the end of 2011. It will be subject to preferential tax rates devised for EU officials.

So he'll be paid by the European Union for the next three years, eh? While he's in the Cabinet? I thought there were very strict rules about what outside interests a Minister could have. For example, they don't get paid if they write for a newspaper, they can't publish a book and get royalties.

There's more here and here.

The cash cushion will be taxed at only 26 per cent under special ‘community rates’ open to EU officials. A tax expert said yesterday that a similar payment in the UK would be subject to tax at the higher rate of 40 per cent.

And he pays tax at a lower rate than everyone else. Rather dangerous, that, don't you think? That the political rulers don't have to pay the taxes they set for everyone else?

But more than that, here's the Ministerial Code. That's what the extract at the top is from.

Here's the way I read it. Ministers should not have such outside financial interests. However, sometimes these are indeed allowed (one can imagine someone with a family firm for example). When they are allowed they must be declared. And if they are declared then that Minister must abstain from dealing with matters concerning that interest, up to and including the point that certain documents should be withheld from them.

So if all that is followed, Mandelson must a) declare his interest in continuing to receive money from the EU and b) not deal with EU matters, to the point of not even seeing the documents.

Which, given that the EU provides some 80% of our legislation is really quite a lot that he won't be able to do as the new Business Secretary.

Are we all sure that this is a good idea?

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