Controversy builds over Lord Blencathra's Cayman Islands role

Controversy is brewing over the position of Tory peer Lord Blencathra, who is both the Cayman Islands representative in London and a member of the House of Lords.   Speculation is growing that he may face an investigation into whether he has breached parliamentary rules by accepting a paid position to lobby for Cayman’s financial services industry, as the issue has been referred to the Committee for Standards in Public Life by Labour MP Paul Flynn, a politician who is openly hostile to tax havens.  

As might be expected, the Cayman Islands Government and Lord Blencathra have strenuously denied that there is any problem with the arrangement, as they maintain that no rules were breached and that the Foreign and Commonwealth Office knew about the appointment.

However, the issue is fairly complex.  Guidance on the Code of Conduct for Members of the House of Lords says they may not accept any payment in return for parliamentary services, including "making use of their position to arrange meetings with a view to any person lobbying Members of either House, ministers or officials."  It has been reported by The Independent that Lord Blencathra had tried to introduce MPs who are hostile to tax havens to members of a Cayman delegation visiting London, and that he has lobbied Chancellor George Osborne to reduce the air passenger duty to the Cayman Islands.

Lord Blencathra does not believe that his actions breach the Code because he sees a distinction between lobbying Parliament (which he claims not to do), and lobbying the Government which he does admit to doing.  The Code of Conduct Committee will have to rule on whether Blencathra’s view is correct, but even if he is found not to have technically breached the Code his Cayman Islands role is an embarrassment to the Tory party, which is keen to be seen to be cracking down on tax avoidance.  

The Lib Dems, who are partners with the Conservatives in the UK's Coalition Government, are certainly angered by the row.  Tim Farron, the Lib Dem party president has said, "With all the controversy surrounding lobbying and tax at the moment, it's astonishing that a Tory peer is now the lead advocate in Britain for one of the world's biggest tax havens. While the Coalition is trying to make the rich pay their fair share, this exposes an element of the Conservative Party which wants to keep helping their wealthy friends hide their money from the taxman.”