Revealed: ‘out of touch’ Scottish Office in line to earn huge private incomes

The new Scotland Office ministers have been accused of being “out of touch” after a Scotland on Sunday investigation revealed they were in line to earn private incomes reaching tens of thousands of pounds that do not appear on the MPs’ register of interests.

By Paris Gourtsoyannis and Chris McCall Sunday, 4th August 2019, 10:30 am

Scottish Secretary Alister Jack leaves 10 Downing Street following the first cabinet meeting with Boris Johnson. Picture: Chris J Ratcliffe/Getty

Scottish Secretary Alister Jack has been paid £300,000 in dividends by his self-storage company over the past three years, while investments held by junior Scotland Office minister Colin Clark distributed profits of nearly £2m last year.

Under parliamentary rules, MPs are not required to declare dividends from shareholdings on the official register of financial interests.

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But the revelations have prompted fresh calls for parliamentary authorities to review the rules around shareholdings, so the public have a clear understanding of the scale and source of MPs’ wealth. Earlier this year, the new Leader of the House of Commons, Jacob Rees-Mogg, refused to comment on reports that the investment fund which he owns at least 15 per cent of had shared profits of £47m over the past two years among its 23 members.

None of the new Scotland Office ministers has any regular outside income recorded on their register of interests.

However, analysis carried out by Scotland on Sunday comparing parliamentary records with accounts published by Companies House found that last year, both were eligible for payments running into tens of thousands of pounds – potentially matching their salaries as MPs and ministers.

Neither David Mundell, former secretary of state for Scotland, nor under secretary Ian Duncan had declared any shareholdings at the time of their departures.

Shadow secretary of state for Scotland Lesley Laird said: “Trust in politicians, governments and the wider political process is, arguably, at an all-time low, and these revelations will do nothing to change that.

“Alister Jack and Colin Clark appear to be raking in far more cash from their private holdings alone than most people in Scotland earn.

“Many people in Scotland will think there’s simply no way that compares to their own daily experience after almost a decade of Tory austerity.

“This will obviously raise questions about the need to address the current lack of clarity on outside earnings.”

And the SNP’s Scotland Office spokesperson Tommy Sheppard MP said: “It is clear the Scotland Office is not in touch with the ordinary Scot, nor does the department have Scotland’s best interests at heart, as the Tories continue to sideline Scotland’s needs.”

But a UK government source hit back, saying: “The people who are really out of touch with the majority of Scots are the SNP and Labour.

“It’s ridiculous to suggest business experience is a bad thing. Most people see it as an advantage to have people in parliament with an understanding of business and experience of life beyond politics. The important thing is they declare their interests in accordance with the rules.”

Drawing attention to SNP MP Ian Blackford’s paid roles as chairman of two companies, the source added: “Politicians on all sides with a business background, such as the SNP leader in the Commons, would surely not disagree with that.”

The latest company accounts indicate that in 2018, Jack was paid a dividend of £150,000 by Edinburgh Self Storage Ltd. He continues to own up to 50 per cent of shares in the company. Accounts indicate the same sum was paid as a dividend in 2016.

As a cabinet minister, the Scottish Secretary is expected to earn a salary of £149,605 per year.

Jack resigned as a director of Edinburgh Self Storage on 1 June, 2017, shortly before the general election, and was replaced on the same day by his wife Ann, who is described in Companies House records as an “interior designer”. She remains one of three directors of the company, who according to the accounts were entitled to pay totalling £48,000 in 2018, as well as a share of company contributions to a defined pension scheme totalling £40,000.

On 1 June, 2017, Ann Jack also replaced her husband as one of four directors of Mollin HEP Ltd, a company set up to manage the sale of renewable electricity generated on the family farm. The latest set of accounts indicate that Mollin HEP paid dividends totalling £20,000 to directors.

Clark, who was named the parliamentary undersecretary of state at the Scotland Office, owns at least three quarters of the shares in Nessgro Ltd, an agricultural produce marketing company.

His register of interests states that his position as one of two directors of the company is unpaid. However, the company’s latest annual accounts report that dividends of £40,000 were payable in the year ending 31 May, 2018.

Clark is also a member of a number of limited liability partnerships that manage investments including property holdings.

According to the latest set of accounts, one of the companies, Maven Capital (Llandudno) LLP – which manages a Travelodge hotel in Wales – generated profits of £366,890 which were available for distribution among 22 active members.

Another company, Maven Capital (Telfer House) LLP – which manages a Georgian office block in Glasgow – reported profits of £1,554,350 in its latest set of accounts, for distribution among its 27 active members.

It is not possible to determine Clark’s share of any payout. However, an equal share of the profits from both companies would total well over £70,000 – nearly matching Clark’s salary as an MP.

A UK government spokesperson said: “We do not recognise these figures.

“Our ministers are clear that their financial interests are wholly and properly declared according to the rules, which are designed to ensure transparency and protect standards in public life.

“Mr Jack and Mr Clark have set up businesses which employ hundreds of people across Scotland and the UK. They understand how important it is to support businesses and industry in Scotland, to keep people in jobs and contribute to our economic growth.”

The spokesperson added: “When Mr Jack became an MP he stepped back from a number of business interests to allow him to concentrate on parliamentary matters. Some of these were roles in private family businesses, which were taken over by his wife. There is nothing improper in this.”

The register of interests does record details the extensive property and shareholdings owned by Mr Jack and Mr Clark, who both enjoyed successful business careers before entering parliament in 2017.

On his Dumfries and Galloway estate, Mr Jack has declared agricultural land, two cottages and a salmon fishery. Mr Clark’s register of interests includes his house in Inverurie, which he co-owns with his wife, and a farm with agricultural land in Aberdeenshire which includes three cottages that are rented out.