Tories veto Nolan 'sleaze' report

THE government is facing a 'double whammy' over political sleaze and greed in the boardroom.

Tory members of a Commons committee set up to implement the Nolan report on standards in public life have vetoed the recommendation to make MPs disclose how much they earn from jobs outside parliament.

The Select Committee on Nolan will make its findings public tomorow, triggering a fresh row over political morality, while next week the Greenbury Committee on Executive Pay will propose that lavish share options awarded to privatised utility bosses should be taxed as income.

The Opposition is furious that Conservative MPs have used their weight of numbers to block disclosure of members' business earnings, and will try to reverse the veto when the Commons debates the issue on 19 July.

The Shadow Chancellor Gordon Brown will also denounce the Greenbury Report, drawn up by a group of top CBI bosses, as inadequate to meet public disapproval of the 'help yourself' mentality in the boardrooms of the privatised monopolies.

'If what we are learning about Greenbury proves to be true, it is clear that his inquiry has failed to address seriously the abuses of the privatised utlities,' said Mr Brown. 'It does not tackle the scandal of the pounds 100 million share options handed out to a couple of hundred executives.'

The Select Committee's refusal to carry out Lord Nolan's recommendation for immediate action on the disclosure of earnings from outside consultancies and the like will almost certainly bring to a precipitate end John Major's 'honeymoon' following his leadership re-election and Cabinet reshuffle.

The Tory majority on the committee, with the aid of the lone Liberal Democrat, decided that the Nolan proposals require 'further discussions and deliberation.' Nothing will happen before the autumn, and probably not even then, MPs believe.

Instead of acting on MPs' outside earnings, the Commons will be asked to establish a Commission on Public Standards to monitor members' behaviour, and set up a new Select Committee on Standards and Privileges. It would replace two existing committees on members' interests and privileges.

The Nolan Select Committee, set up by the Prime Minister amid concern that the Government wanted to kick the anti-sleaze measures into the long grass, has confirmed some of Labour's worst fears. Nolan wanted MPs to be compelled to disclose in the Commons Register of Interests their earnings from consultancies and other outside work within certain financial bandings.

But Conservative MPs fought a strong rearguard action against being forced to divulge their finances, and mobilised their numbers on the Select Committee to frustrate Nolan.

Labour will move an amendment calling for the Nolan recommendations to be implemented in full, without very much expectation that it will be carried.

The Nolan Inquiry was set up in the wake of the 'cash for parliamentary questions' scandal last summer, and its first report heightened public expectations of a curb on MPs "second jobbing.''

The Greenbury report on executive remuneration will be published on 17 July. The CBI inquiry was set up in January with the support of John Major to investigate executive pay in the light of Labour disclosures about share option 'scams' in the privatised utilities.

Its recommendation that all future share options should be taxed as incomes instead of capital gains would yield the Government income of at least pounds 60 million a year. The true figure is nearer pounds 200 million, says the Shadow Treasury team.

However, the Chancellor, Kenneth Clarke, has hitherto set his face against closing this lucrative tax loophole, which in some cases involves giving share options to executives' wives so the tax liability is even further diminished.