People can see that corporations and the wealthy elites fund major political parties and many individual legislators to advance their economic interests.

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

In the July 2024 UK general election, only about 60% of the registered voters bothered to vote. Some eight million eligible adults were not even on the electoral register. Altogether, this suggests a disdain for institutions of government. There is a strong feeling that corporations and the rich have hijacked democracy and no matter how the people vote, they always win.

People can see that corporations and the wealthy elites fund major political parties and many individual legislators to advance their economic interests. Whilst most members of parliament (MPs) serve the people, too many use it as a stepping stone for personal enrichment. Conflicts of interests are normalised.

Personal enrichment comes in the form of spurious consultancies or second jobs for MPs. In return, the dutiful legislators shape laws and regulations best suited to the interests of their paymasters. Many MPs are company directors or partners in various firms and use their position to craft or obstruct laws that serve them best. Then there are former MPs and ministers, who run consultancies to advance the interests of their paymasters by nobbling senior policymakers and current ministers, with the sole aim of reducing public choices and getting rich.

Evidence of legislators for hire isn’t hard to find. In the last parliament one-in-five MPs, mostly Conservative, had second jobs. Between December 2019 and early 2023, MPs spent 89,000 hours on second jobs. One MP pleaded with a fixer to help him secure work with a Saudi firm. A senior MP collected £300,000 for just three weeks work for a company. Another MP received £500,000 for lobbying on behalf of two companies. A former chancellor and a former health secretary demanded £10,000 a day to further the interests of a company.  A senior Conservative MP, who was a partner in an investment firm, vigorously supported Brexit but privately moved his business to Ireland ahead of the legislation to ensure that its fortunes would not be affected by post-Brexit trade restrictions. Some MPs neglect their public duties as they chase extra money from hosting TV shows or appearing in reality shows.

The current rules on second jobs are contained in the Code of Conduct for MPs and state that “Members must not provide, or agree to provide, paid parliamentary advice, including undertaking, or agreeing to undertake services as a Parliamentary strategist, adviser or consultant”. Parliamentary rules require MPs to register income from certain forms of employment and earnings. Such rules have not prevented MPs from being hired by the highest bidder. Reforms are needed.

Labour’s 2024 manifesto said that “some constituents end up with MPs who spend more time on their second job, or lobbying for outside interests, than on representing them. Therefore, as an initial step, Labour will support an immediate ban on MPs from taking up paid advisory or consultancy roles”. 

Labour manifesto also promised to “task the Modernisation Committee to take forward urgent work on the restrictions that need to be put in place to prevent MPs from taking up roles that stop them serving their constituents and the country”.

It has now initiated that task. However, the government will not undertake a comprehensive review of the hiring and enrolment of legislators. The Minister told parliament: “I am proposing a tightening of the rules on second jobs for Members of this House in the first instance”.  This hints at tweaking the rules rather than banning second jobs for MPs.

Being an MP is a full-time job and all second jobs should be banned. In response, defenders of status-quo say that “the best and brightest could be put off from wanting to join the Commons.” This smacks of greed and self-interest. All MPs receive an annual salary of £91,346 plus expenses to cover the costs of running an office, employing staff, a second home in London or their constituency, and travel between Parliament and their constituency.  That isn’t enough for some. Former Chancellor Sajid Javid demanded that MP salary should be doubled. In comparison, the median pre-tax wage is £28,584. If MPs can’t live on £91k, they shouldn’t enter politics and can be replaced by plenty of good capable people.

Some claim that a total ban on second jobs will harm the legislative process as MPs will have less familiarity with business matters. Well, being a MP does not discourage anyone from taking interest in worldly matters or speaking to people or businesses. MPs are free to talk to the poor, homeless, dispossessed and victims of the Post Office and Grenfell scandals to learn of business practices, but there is no money in it. In fact, they want to work directly for corporations.

Another claim is that the tenure of an MP can be short and after that they would need to return to their professional careers. Therefore, they need to be permitted to continue with second jobs within ‘reasonable limits’, which have been interpreted as 10, 15, or 20 hours per week. This is equivalent to 500-1,000 hours a year. Such an exception would make virtually no difference to the current state of affairs. An hours-based approach takes no account of money, favours or cognitive capture, and will not reduce financial dependence, conflict of interests or the auction of MPs. Any ban with ‘reasonable limits’ will encourage determined MPs to pursue creative strategies to comply with the letter and not the spirit of regulation. Many are likely to form companies and partnerships to conceal consultancy contracts rather than have a direct relationship with their rich and corporate clients.

If a total ban on second jobs for all MPs is not feasible then there should be a total ban on MPs receiving any financial benefit from second jobs. All of the money from second jobs should be paid directly into a newly created Foundation for Democracy. The accumulated funds would be under the control of the Electoral Commission and be used to educate people about democracy and increase voter participation. The receipt of any personal benefit from second jobs should be a criminal offence. Each year, MPs shall declare that they have not received any personal benefit from second jobs. MPs should also be prevented in their post-legislative career from working for these employers for ten years after leaving parliament.

Labour’s proposals do not fully deal with political sleaze. For example, former MPs form consultancies or secure directorships with companies to monetise their inside knowledge and links with civil servants, policymakers and current ministers. The aim is always to secure unfair advantages for their paymasters. For example, former Prime Minister David Cameron used his contacts inside the government to secretly secure government finance for Greensill. He was unsuccessful. In his capacity as part-time adviser, Cameron received a salary of £720,000 and also made £3.29m from the sale of company’s shares given to him. The current rules are that “On leaving office, Ministers will be prohibited from lobbying Government for two years. They must also seek advice from the independent Advisory Committee on Business Appointments about any appointments or employment they wish to take up within two years of leaving office. Former Ministers must abide by the advice of the Committee.” The two year limit needs to be extended to ten years.

Corporate funded lobbyists and think-tanks routinely influence public polices, and government isn’t proposing any limits, transparency or amendments to the ineffective Lobbying Act 2014. All lobbyists need to be registered. Secrecy always breeds corruption and public sunlight is the biggest antidote. So, transcripts of ministerial and civil servants’ meeting with professional lobbyists must be made publicly available within 48 hours. There are also related questions about the penetration of politics by corporate-funded lobbyists. In the July 2024 general election over 100 professional lobbyists were chosen by leaders of major parties to stand as their preferred candidates.

The government’s drive on second jobs is entirely focused on members of the House of Commons. It needs to apply to the House of Lords too where numerous peers are mired in conflict of interests as evidenced by the Register of Interests.

Corporate money always corrupts as it seeks competitive advantage. It buys influence and power by disenfranchising normal people who can’t hand large sums of money to legislators. Politics can’t be cleansed without a total ban on donations to political parties and individual legislators. Political parties preach competition to the masses. So, let them compete by developing good policies that can attract mass membership and related fees. That ought to be the sole source of their funding. If they are not attracting mass membership, they need to reformulate policies.

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