Breaking the Code and the Healthcare Chain

'In the conduct of their parliamentary duties, Members of the House shall base their actions on consideration of the public interest, and shall resolve any conflict between their personal interest and the public interest at once, and in favour of the public interest.' - the Lord's Code of Conduct

The Lords have spoken. The coalition with a little help from Labour Peer, Lord Warner chose to vote in favour of the government to keep section 75 regulations of the Health and Social Care Act in place. In doing so, they imposed increased legal pressures on the new commissioners to put out services to tender, which will fragment the NHS into the hands of private companies.

The Members’ financial interestsrepresent every stage of the healthcare value chain: from private equity firms that fund private healthcare companies, to holding shares in those same companies. They are Chairmen of companies who run NHS estates, are involved in PFI deals, are partners in legal firms that seal those deals, advisers to private hospitals, they also represent companies in pharmaceutical media, medical equipment, care homes, lobbying, and health insurance.

You name it, the corporations have it covered; and the list of vested interests in both the House of Commons and the Lords is so great, it is effectively a healthcare coup d’état against our parliamentary institutions (see partial list below). Yet all of the peers with such vested interests were able to vote on the Health and Social Care bill and the section75 Regulations, that now threatens to hand over large chunks of the NHS into private company hands.

The public, once again were placed in a situation whereby the future direction of the NHS was in the hands of unelected individuals who have vested interests in the outcome of their vote. One in four ConservativeLords have these interests, as well as one in six LabourLords, one in six CrossbenchLords and one in tenLiberal Democrats. This is democracy today in Britain.

The position they hold blurs the line between public and private duty. Some of the companies who employ Lords have already won contracts in the new NHS since the health bill became an Act; in some casesat the very samemoment the bill was being debated. The outcome of the vote has been made, but the institutional corruption remains.

Below, I have a list of unelected Peers from the upper chamber who represent the corporations that cover every part of the healthcare chain – they have it all wrapped up.

A selection of interests

Frontline services: Lord Nash

When Chairman of Care UK, John Nash – a Conservative Donor – made a donation of £21,000 to then-shadow health secretary, Andrew Lansley, co-author of the Health and Social Care bill. Nash now sits on the free market board of the Centre for Policy Studies, which has produced several papers on dismantling the NHS. Voted to reject the removal of the Section 75 regulations.

PFI: Lord Blackwell

Chairman of Interserve, consultancy to NHS and private healthcare firms. Involved in PFI hospitals. Company has enterednew avenues within the care industry made possible by the Health and Social Care bill and by his vote on the bill. Voted to reject the removal of Section 75 regulations.

Private Equity: Lord Patten of Barnes and BBC Chief - Adviser to private

equity firm Bridgepoint, who purchased Care UK – Have been involved in 17 healthcare deals over recent years – did not vote. See his article here.

Management consultancy: Lord Hamilton of Epsom - Has a directorship with MSB Ltd (managing consultancy), who have NHS, Bupa, Nuffield Health and CareUK listed as their clients. Quotes: 'My Lords, surely one of the problems of the National Health Service is the wall of money that was thrown at a totally unreformed NHS by the last Government? Do we not need management consultants now to show us the way forward.’ See article on him here. Voted to reject the removal of the Section 75 regulations.

Legal: Lord Clement-Jones

Managing partner with global law firm DLA Piper who provide lobbying services to clients in the health and social care sectors. Lord Clement-Jones nominated Lord Hameed for his peerage. Lord Hameed sits on the board of Alpha hospitals, part of the Alpha Healthcare (C&C Alpha/C&C business solutions) group. The Alpha group has made significant donations to the Liberal Democrat party. Voted to reject the removal of Section 75 regulations.

Shares: Baron Higgins

Holds in excess of £50,000 of shares in Lansdowne UK Equity Fund, backers of private hospital group Circle Holdings. Circle won the first contract to run a NHS hospital – they are advised by Conservative MP Mark Simmonds. Voted to reject the removal of Section 75 regulations.

Litigation: Lord Lang of Monkton

Conservative – Director of Marsh & McLennan Companies that “help hospitals, insurers, pharmaceutical companies and industry associations understand the implications of changing policy environments”. Head of ACOBA – a so-called independent body that advises on business appointments. See article on him and them here. Voted to reject the removal of Section 75 regulations.

Care Homes: Lord Popat

Founder of TLC group Ltd, who run private care homes. Lord Popat gave David Cameron a donation, as a gift, of £25,000 a week after the Conservatives’ unveiled their health ‘reforms’. David Cameron made the businessman a peer shortly after getting into 10 Downing street. Voted to reject the removal of Section 75 regulations.



Pharmaceutical Communications – Lord Chadlington Chief Executive of Huntsworth Communications group – have major pharmaceutical companies as clients. Company gave £15,000 to Conservatives in August 2011, has given money every year since 2008. Labour’s Lord Puttnam is a director. Liberal Democrat’s Lord Alliance has shares. Neither member voted. For more on Lord Chadlington and Lord Alliance – see hereand here.

Pathology:Lord Warner

An adviser to Pathology company, Synlab Ltd. He is a former adviser to Apax Partners, one of the leading global investors in the healthcare sector. Chose to vote against his party and with the coaltion (Labour).

Insurance: Lord Sharman

Chairman of Aviva, has directorship and Shareholdings in Aviva plc. Baroness McDonagh: Non Executive Director of Standard Life plc, which offers private health insurance. Did not vote.

Recruitment: Baroness Bottomley

Chair of Odgers Berndtson – recruitment company providing people for NHS Management positions. Shares in Broomco Ltd, a holding company of International Resources Group Ltd, which owns Odgers Berndston. Richard Boggis-Rolfe, the chairman of Odgers Berndtson, has given £207,500 in donations to the Conservative party between 28/09/2006 to 03/03/2010. Voted to reject the removal of Section 75 regulations.

Out of Hours: Lord Filkin (Labour)

Adviser to outsourcing giant Serco. Serco run out of hours services and were caught fiddling their data. Continue to be given contracts despite this. Did not vote.

Complaint to Lords standards commissioner rejected

The Commissioner for Standards for the House of Lords has responded to a complaint I made about Lord Chadlington, the founder and chairman of a communications company Huntsworth plc. My complaint suggested his position in a company, which he founded, and which lobbies government in tamdem with pharmaceutical companies and which donates to the political party that is introducing a bill that could benefit his company, is in breach of the Lords rules of conduct.

More fool am I.

The context of the letter sent back to me has clearly defined how biased the rules are in favour of the unelected peers, who are allowed to vote on the Health and Social Care bill despite having a clear financial interest in its outcome.

We were told in the letter; ‘you have not supplied any evidence to suggest that any of Lord Chadlington’s votes in connection with this Bill, were designed to confer exclusive benefit on, as you suggest, Huntsworth plc.’

‘The “exclusive benefit” principle would mean, for instance, that a Member who was paid by a pharmaceutical company would be barred from seeking to confer benefit exclusively upon that company by parliamentary means.’ This could be done in various ways including:

• tabling a motion or an amendment to legislation;

• voting in a division;

• speaking in debate;

So why did Lord Chadlington not ‘exclusively benefit’ from his voting in the Health and Social Care bill?

‘The Bill may or may not, if passed in to law, affect the business activities of Huntsworth plc but not on an exclusive basis. I would suggest that they would have to compete for business against their competitors in the context of any new legislative framework.’

Oh really! So how come Huntsworth plc has given donations to the Conservative party since 2008, if it were not for a nudge, nudge, wink, wink? Donations to parties unfortunately, lie outside of the remit for the Commissioner of Standards, and are dealt with by the Electoral Commission instead. Come on! Why does any company give money to a political party if it isn’t to expect future return? Why do so many companies ask Lords to sit on their boards, become chairman and advisors if it isn’t to access the highest levels of government and acquire exclusive benefit? Who knows perhaps one day they can vote on a bill that will open up new markets for them. Unlikely I know.

So no, I can’t provide ‘evidence’ that Huntsworth plc will ‘exclusively benefit’ through their founder’s vote. There is no document I can lay my hand on that says the Prime Minister’s constituency party chairman Lord Chadlington will benefit from his own vote but I’d be very surprised if the company didn’t.

What I can be sure of is this: Any set of rules that allows a Lord to vote on a bill that will potentially benefit the company of which he is the founder and chairman, which has donated money to the party that is bringing in the bill is not fit for purpose.

What is the point of a complaints procedure that doesn’t hold such conflicts of interest to account? After all if you are a if you are a councillor at local government level, with financial interest, then they must declare 'prejudicial interest, which includes they 'may' benefit int he future. Voting in these circumstances would be forbidden.

We are being taken for fools; they are robbing us of our NHS and our unelected peers are voting for their own gold rush. To date 100 Lords have financial links to companies involved in private healthcare, and there will be more. It is a merry-go-round of self-interest, which looks increasingly like institutional corruption; it is wrong and it must be stopped.

Below is the Full letter:

Dear Mr Robertson

I am writing in response to your letter dated 5 March 2012, which was brought to my attention on 8 March.

I note your complaint against Lord Chadlington and your specific reference to Paragraph 14 of the Code of Conduct for Members of the House of Lords.

I have conducted an initial assessment of your complaint and in the absence of evidence sufficient to establish a prima facie case that the code has been breached, I have decided that your complaint does not merit investigation.

Lord Chadlington, according to your complaint, voted against a proposal to consider the Health and Social Care Bill by means of a Special Select Committee. That is his right and the procedure, if it had been adopted, may or may not have had the impact outlined in your letter.

Turning to the issue of ‘exclusive benefit’, you have not supplied any evidence to suggest that any of Lord Chadlington’s votes in connection with this Bill, were designed to confer exclusive benefit on, as you suggest, Huntsworth plc. The Bill may or may not, if passed in to law, affect the business activities of Huntsworth plc but not on an exclusive basis. I would suggest that they would have to compete for business against their competitors in the context of any new legislative framework. You will note that Paragraph 25 of the Guide to the Code of Conduct makes it clear that the nature of ‘exclusive benefit’ should be interpreted narrowly.

I note that Lord Chadlington has registered his interest in Huntsworth plc.

Turning to the issues of political party funding and the potential use of such funding to seek exclusive benefit, which you raised. Such matters are very clearly outside of my remit. However, the Electoral Commission have a specific remit in respect of the funding of political parties and they are therefore better placed to assist you.

I trust that my reasoning/explanation is clear but if you have or obtain evidence, I stand ready to review my decision not to investigate your complaint at this juncture.

I look forward to hearing from you.

Yours sincerely

Paul Kernaghan CBE QPM

Commissioner for Standards