Ministers may need to be more transparent about their financial interests after a “significant ruling” that found Rishi Sunak failed to declare his wife’s interest in a childcare agency, the MP who triggered the inquiry has said.
Catherine McKinnell, the Labour MP who first asked him about the potential conflict of interest, said the ruling set a precedent that meant ministers were likely to have to make greater disclosures in relation to their interests when questioned in parliament.
She said it confirmed that ministers were bound by the same rules as all other MPs when speaking in parliament and needed to declare relevant financial holdings – even if these are not public on the register of ministers’ interests.
The parliamentary standards commissioner, Daniel Greenberg, concluded on Wednesday that Sunak had breached the code of conduct by failing to declare that his wife, Akshata Murty, has an interest in a childcare firm called Koru Kids, when asked if he had any potential conflicts of interest in relation to his government’s new budget policies on childcare.
The prime minister had declared Murty’s stake to the cabinet secretary, and this was later published in the ministerial register of interests. However, he failed to mention it when being questioned by McKinnell on the liaison committee in March.
McKinnell told the Guardian: “Whether ‘inadvertent’ or a result of ‘confusion’, the commissioner’s findings make it very clear that the rules which apply to members of parliament … apply equally to government ministers, including the prime minister.
“Government ministers should be held to a higher level of transparency and scrutiny, not less.
“This also begs the question as to whether government ministers have other relevant financial interests that should be declared. After the damage caused by successive Conservative prime ministers and ministers behaving as though the rules do not apply to them, this is a significant finding that should result in greater transparency from government.”
Angela Rayner, Labour’s deputy leader, said it was “further evidence that the system needs a full overhaul”.
“Despite his apology and repeated promises of change, Rishi Sunak recently ditched a key recommendation from parliament’s standards committee, which Labour supported, to tighten the rules around declaring interests and hospitality,” she said.
“Labour will toughen up the system, increase transparency and introduce an independent ethics and integrity commission that will clean up our politics and restore standards to public life.”
In his ruling, Greenberg concluded that the breach had arisen out of the prime minister’s “confusion” around the rules on declaration.
He decided to close the inquiry without the need for further action after finding the error to have been made inadvertently.
Greenberg said: “In accordance with the code, Ms Murty’s shareholding was a relevant interest that should have been declared during the liaison committee meeting on 28 March 2023.”
He said he was satisfied that Sunak had “confused” the concept of registration relating to arrangements for ministers with the concept of declaration of interests under the code of conduct for MPs.
“I formed the view that the failure to declare arose out of this confusion and was accordingly inadvertent on the part of Mr Sunak,” he concluded.
“During a meeting with Mr Sunak on 30 June 2023 I acknowledged that he may not have been aware of Ms Murty’s shareholding at the time of the liaison committee meeting, but he had a duty to correct the record.
“However, Mr Sunak was aware of the interest when he subsequently wrote to the chair of the liaison committee, Sir Bernard Jenkin MP, on 4 April 2023, and he failed to declare the interest at that stage or correct the record.”
In a letter to the commissioner, Sunak said: “Should this scenario arise again, I have acknowledged that I have a duty to write to the committee after my appearance to correct the record.
“I accept and once again apologise that my letter to the liaison committee on 4 April 2023 was not sufficiently expansive, as it confused the language of registration and declaration.”