Members of the House of Lords will face tougher requirements for declaring their financial interests, following an openDemocracy investigation.
In September, 24 peers, including Tory donor Lord Bamford and ‘The Apprentice’ star Alan Sugar, were found to have broken rules by failing to provide details of businesses that they run.
The ruling, by the House of Lords standards commissioner, was prompted after openDemocracy exposed the breaches earlier this year.
Now, the House of Lords Conduct Committee has decided to tighten the rules so that peers must also give details about any company that they have significant control over – even if they are not a director.
In company law, persons of significant control either own more than 25% of shares or voting rights in the company, or have the right to appoint or remove the majority of the board of directors.
Until now, lords did not have to give any details about these businesses – other than providing the company’s name.
More than 150 members of the House of Lords have declared themselves persons of significant control in private companies, according to the latest register of financial interests.
Lord Mance, the chair of the Conduct Committee, said that the changes will be made when the Guide to the Code of Conduct is next updated.
The change comes after a formal complaint to the Lords Standards Commissioner by Tom Brake, the former Liberal Democrat MP who is now director of Unlock Democracy.
Brake also filed a complaint in relation to openDemocracy’s original investigation, which resulted in 24 peers being found in breach of the rules.
The breach is thought to be one of the largest ever exposed. In response to the ruling, the Lords Commissioner for Standards, Martin Jelley, said that all financial declarations will be audited to make sure peers are providing descriptions of the companies they have declared an interest in.
"This is an outstanding result for Unlock Democracy and openDemocracy," Brake said. "Not only have scores of peers amended the register to improve the public's understanding of their business, but the Code of Conduct will be changed too.
"This change will close down a loophole for peers who might have significant, but undocumented control over a company."
