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Parliamentary standards authorities are set to investigate whether a former Conservative minister who sits as a peer while simultaneously lobbying on behalf of a Caribbean tax haven has broken House of Lord rules.

Labour yesterday wrote to the Independent Commissioner for Standards asking him to investigate whether Lord Blencathra had breached regulations designed to stop lords taking on paid advocacy roles which could interfere with their job as legislators.

The intervention is likely to trigger a full inquiry which if it finds he has broken the rules could result in Lord Blencathra being censured. The move follows an investigation by the Bureau of Investigative Journalism and The Independent, which revealed that the Conservative peer had lobbied on behalf of the Cayman Islands while claiming thousands of pounds in House of Lords attendance allowances.

In the six months since he was appointed by the islands' Government, he has lobbied George Osborne to reduce the burden of air passenger transport taxes on the Caymans, facilitated an all-expenses-paid trip for three senior MPs over the Easter recess, and intervened over an Early Day Motion in the Commons calling for the Caymans to be closed down as a tax haven. Last night Paul Flynn, MP for Newport West, accused the Tory peer of abusing the system and said he would refer him to the Committee for Standards in Public Life.

Guidance on the Code of Conduct for Members of the House of Lords says they may not accept payment in return for parliamentary services. This includes a ban on peers "making use of their position to arrange meetings with a view to any person lobbying Members of either House, ministers or officials". When asked whether he thought he had breached the Code, Lord Blencathra, formerly known as David Maclean, said: "You have confused lobbying Parliament, which I do not do, with lobbying the Government which I do. I am very clear that if there was a measure before The House of Lords on any matter relating to the Cayman Islands then I would not lobby Lords on it nor speak nor vote on it."

Mr Flynn, a member of the Constitutional Reform Select Committee, said the response was "extraordinary". "I was mystified by Lord Blencathra's concept of a distinction between Parliament and Government when it comes to the prohibition on paid lobbying this is an entirely novel excuse for abusing the system," he said.

The President of the Liberal Democrats has also attacked the peer's activities. Tim Farron said: "With all the controversy surrounding lobbying and tax at the moment, it's astonishing that a Tory peer is now the lead advocate in Britain for one of the world's biggest tax havens. If Lord Blencathra is using his very privileged position in the House of Lords to lobby for a government that wants to see money that should be for our schools, hospitals and our armed forces sailing off in luxury yachts to be stored on the Cayman Islands, it is yet another mockery of the Parliamentary system, and reinforces a need for an elected upper chamber."

Jon Trickett, Shadow Cabinet Office minister, welcomed the call to investigate Lord Blencathra. "It is clear that an investigation into any impropriety is urgently needed. There needs to be clarity over whether the nature of Lord Blencathra's dual role, as both a parliamentarian and lobbyist, has breached the Lords Code of Conduct.

"With almost daily revelations of Tory sleaze along with a significantly watered down consultation paper on lobbying it is clear this Government is unwilling to make bold decisions in the national interest but rather maintain the influence of a small circle of elites."

http://www.thebureauinvestigates.com/

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Watchdog set to investigate Lord Blencathra over lobbying for Cayman Islands