Controversial MPs’ group shuts down after Israeli arms cash probe

Exclusive: “Glaring” loophole in lobbying rules allowed Tory ex-MoD advisor to set up parliamentary group funded by the arms industry

Defence Tech APPG co-chair Labour MP Fred Thomas and ex-Tory advisor James Clark (right) (Source: LinkedIn.)

By Lucas Amin, Niamh McIntyre and Peter Geoghegan

A cross-party group of MPs and Lords set up by a former Conservative adviser to the defence secretary has shut down while under investigation for taking money from a state-owned Israeli arms company, Democracy for Sale and the Bureau of Investigative Journalism can reveal.

The defence technology all-party parliamentary group (APPG) was created in November 2024 by James Clark, who until the general election was a special adviser to Grant Shapps at the Ministry of Defence (MoD).

Parliament’s standards commissioner had been investigating the group after Declassified UK revealed it accepted funding from RUK Advanced Systems Limited, a subsidiary of Israeli arms giant Rafael. Rules ban APPGs from being funded directly or indirectly by a foreign government.

The defence tech APPG offered companies “opportunities to network with MPs and policymakers,” at events in Parliament that included Labour ministers. MPs in the group tabled dozens of parliamentary questions advocating for the industry.

Now, a spokesperson has confirmed the APPG has been dissolved. Its former co-chairs, Labour MP Fred Thomas and Conservative MP Neil Shastri-Hurst, declined to comment.

Our joint investigation also found that the APPG for defence tech had benefited from a “glaring inconsistency" in the lobbying rules designed to regulate the “revolving door” between government and industry.

James Clark, a serial failed Conservative parliamentary candidate, was able to set up the group just six months after leaving the MoD, even though rules normally restrict ex-advisers from lobbying for at least a year.

In response to a freedom of information request, the MoD said no restrictions applied because Clark’s role was deemed to be “within central government” because it was “directly in support of a parliamentary body” and “industry sponsors had no role in the appointment”.

But APPGs, which bring together MPs, Lords and outside interests, are not official parliamentary bodies. APPGs are defined on Parliament’s own website as “informal cross-party groups that have no official status.”

And, contrary to the MoD’s rationale, industry backers seem to have been deeply involved in the defence tech APPG from the beginning.

On November 19, 2024, the APPG registered receiving more than £60,000 to administer the group, from a host of arms companies including Lockheed Martin and Leonardo. The money was paid to a company called ‘APPG Secretariat Services Ltd’, which Clark had set up as the sole shareholder just two weeks earlier.

There’s more. Clark was listed as its co-founder online and his telephone number was the group’s public contact point.

Questions have been raised about APPGs before. Many serve legitimate purposes, but critics say they are used to sidestep lobbying rules and wield influence with minimal oversight.

Reforms introduced in 2023 required greater funding disclosure and banned foreign government money. But, as our investigation shows, gaps remain.

There is no central government guidance specifying whether APPGs should be considered inside or outside central government for business appointment rule purposes.

“This case exposes a glaring inconsistency in the government’s revolving door rules and creates a convenient loophole that undermines cooling-off periods,” said Steve Goodrich of Transparency International.

“When an APPG is funded by major defence contractors and explicitly aims to ‘promote engagement’ with the industry, it’s functionally operating as a lobbying vehicle – regardless of its classification. Labour promised to strengthen lobbying oversight, but cases like this show we need immediate action to close regulatory loopholes before they become established practice.”

As special adviser to Shapps at the MoD, Clark “provided ministers with expert advice on defence policy and strategy” and “delivered the Defence Industrial Strategy”, according to his LinkedIn profile. He had previously set up the Conservative Friends of the Armed Forces.

He left government in May 2024, and subsequently stood in the general election as Conservative candidate for Great Yarmouth, where he lost to Reform UK’s Rupert Lowe, having previously twice failed to unseat Jeremy Corbyn in Islington North. Clark went on to set up the APPG in November.

The MoD imposed restrictions on another role Clark later took – as a director at consultancy firm Flint Global – including bans on lobbying or advising firms with MoD contracts. But no such restrictions were applied to his APPG work.

Corporate sponsors of the APPG were offered two levels of membership. For £1,499 firms in Tier 1 - including Israeli-owned RUK Advanced Systems Ltd - were given “opportunities to network with MPs and policymakers,” according to an archived version of the APPG’s website, which was recently taken down.

The “tailored” tier 2 membership for “prime contractors, venture capital firms and major stakeholders seeking more substantial involvement” cost £5,000.

MPs in the group have frequently advocated for the interests of defence tech companies, meeting ministers and asking numerous parliamentary questions on everything from defence spending and space policy to procurement and autonomous weapons.

The defence tech group’s first parliamentary reception, held in March, was addressed by veterans minister Alistair Carns and attended by various MPs and peers, according to a post from the APPG’s LinkedIn account, which is also now offline.

The group’s agenda has dovetailed with government priorities. Britain’s defence review in June stressed the growing importance of autonomy and AI, and ministers have pledged record increases in defence spending.

In July, the government announced changes to the rules for ministers and advisers leaving office, scrapping Acoba – the watchdog long derided as toothless – and promising tougher oversight.

Last month, Acoba was criticised for allowing Shapps to become chair of defence firm Cambridge Aerospace, provided he steered clear of direct defence work.

In Clark’s case, an MoD spokesperson told us they drew on Acoba’s principle that “parliamentary roles funded by MPs or groups of MPs do not require clearance” while also conceding that his role did “not fall into this specific category”.

Campaigners say only stronger powers for a new ethics commission will prevent abuses.

“Without substantial reforms, the revolving door between public sector and private interests will keep spinning freely,” said Peter Munro of the UK Anti-Corruption Coalition.

“If the government is serious about closing loopholes, it should empower its new ethics and integrity commission to regulate lobbying across parliament – and hold those who abuse the system accountable.”