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Independent Adviser on Ministers’ Interests

– in Westminster Hall at 3:40 pm on 8th November 2016.

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[Mr Philip Hollobone in the Chair]

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering 4:00 pm, 8th November 2016

We now come to an important half-hour debate on the independent adviser on Ministers’ interests. I call Mr Paul Flynn.

Photo of Paul Flynn Paul Flynn Labour, Newport West

I beg to move,

That this House
has considered the Independent Adviser on Ministers’ Interests.

It is a pleasure to speak under your chairmanship for, I believe, the first time, Mr Hollobone. The office of independent adviser is now 10 years old. The story is one either of Ministers all behaving as saintly paragons of perfection or of the system not working, and I fear it is the latter. Since the office was set up, it has achieved virtually nothing and I would like to point out the way things have gone.

When the office was set up, the case of Shahid Malik was referred to it. He resigned from ministerial office when there were complaints about his behaviour. He was then found to be free of blame and restored to ministerial office. Since then we have had only one case, involving Baroness Warsi. She had already confessed to a venial sin: she had gone on an official trip to India and had taken with her a relative and a work partner. She agreed that there was a perception of impropriety in that, as did the adviser on Ministers’ interests. There was a mild reprimand but no action was taken. However, that was a tiny offence compared with other cases that have passed by without being referred to the adviser.

Possibly the least defensible one was in 2011 involving the then Secretary of State for Defence, who was accused of misconduct. There were well-publicised accusations of relationships with a Mr Werritty, and an extraordinary thing happened: in this case the then chief civil servant, on the advice of the then Prime Minister, decided to investigate the matter himself. That was against the ministerial code and the civil service code—the investigation was expressly forbidden by them—but it was the Prime Minister’s decision. The then holder of the office of independent adviser, Sir Philip Mawer, gave evidence to a Select Committee and said he should have been investigating the Member concerned, who promptly resigned from his post.

This was an extraordinary situation. We know that whatever that Member did was serious, because that is what the head of the civil service said. They said that it was so serious that he should resign. However, no information was given to the public about what he had done, how serious the offence was and whether he was fit for future office. He gained absolution by resignation and the public are in the dark. That is more serious now, given that that Member has been returned to office as one of three Brexiteers. We have no idea whether he is fit for office or if his past conduct suggests he is not fit for office. The first thing one would ask anybody seeking a new job is, “Why did you leave your last job?” We do not know. This case involves the sin of omission. The then Prime Minister should certainly have referred that matter to the adviser and he did not.

There have been further cases since. One involved Mr Hunt, who was accused of not being impartial in a BSkyB takeover. That case had a great deal of attention and certainly caused a considerable amount of public concern, yet it was not referred by the Prime Minister to the adviser.

Mrs May—the present Prime Minister—was alleged to have leaked ministerial correspondence on Islamic extremism in Birmingham schools. Again, that is a matter of great concern, yet the case was not referred to the adviser.

There were minor cases, too. A Minister had a meal—not a cheap one—at the Savoy, allegedly provided partly by a group that was seeking favours from his Department. Again, that is a matter of some seriousness and if it was true, it would have been a breach of the ministerial code. That Minister explained that he was there eating as a private person, not as a Minister—so his private stomach, not his ministerial stomach was digesting that day. That was accepted by the then Prime Minister and there was no investigation.

The most recent case is possibly the most telling. Two Ministers in the Cabinet Office—the right hon. Members for West Dorset (Sir Oliver Letwin) and for West Suffolk (Matt Hancock)—decided to give £3 million to Kids Company, which was run by Ms Batmanghelidjh. The brave civil servants in the Department put out a letter saying that that was a mistake and that it should not have been done. That was a courageous thing for the civil servants to do. Civil servants give their advice, and that is it, but they went public and said, “This is the wrong thing to do,” putting in peril their future careers, because they would be regarded as troublemakers. They did the right thing but the Government did not. What happened to the £3 million? It was given to Ms Batmanghelidjh at Kids Company and the company collapsed four days later.

There is a possible explanation. The charge against the Government is that Ms Batmanghelidjh was the poster girl of the big society. She attended a meeting in the Cabinet Office to launch the big society. A huge amount of political credibility was given to her company when the Prime Minister was promoting the big society—he was the first and probably the last fan, now he has left office, of that concept. Why were those two Ministers not reported to the adviser for losing £3 million of public money? The temptation is to believe that the Prime Minister was acting for party-political advantage to protect the reputation of the big society. However, the public lost £3 million.

There is no redress in this situation. Nobody holds the Prime Minister to account on this. I have raised these matters many times in the past few years, and it is said that we have a chance to raise these matters at Prime Minister’s questions, but we do not have a hope of raising them in any detail there. The Liaison Committee could raise them but they never have, because whether they do so depends on the disposition of the members of that Committee.

This reform was intended to restore confidence in public life, because we went through the great screaming nightmare of the expenses scandal and our reputation was at rock bottom. I believe that now it is even worse than that—it is subterranean. We have not improved our standing with the public. It has probably gone down and we know what happens: if politics falls into disrepute, we end up with an obscenity like Trump, or something even worse; people look for alternatives.

Let me turn to another matter of considerable interest. An application was made to serve on the Committee for Standards in Public Life by Tony Wright. One could hardly imagine a better candidate for that than the man who gave his name to the Wright reforms. He was interviewed by the Chair of the Committee and found to be a splendid candidate. A decision then had to be taken about whether Tony Wright should be on that Committee, but he was turned down by the right hon. Member for West Suffolk. Why on earth should a matter like that be a ministerial decision? That was very interesting. The decision should certainly be taken by people who are independent and outside this place. It just so happens, of course, that that Member might be seen to have had a vested interest as someone likely to be accused by the person responsible—the adviser himself. It is rather like a defendant in a court case being able to choose his own judge. The last person who should have been allowed to blackball Tony Wright was the right hon. Member for West Suffolk. That is the highly unsatisfactory situation we have now.

For all these years, the adviser has been there doing his job, getting paid a considerable salary, but with virtually nothing to do. On any basis, it is a waste of public money to continue to keep him in office. When the Select Committee on Public Administration and Constitutional Affairs had a pre-appointment hearing, we were unanimous in saying that the present holder of the office was not the right one to take on the job because he has had a lifetime of public service, saying, “Yes sir, no sir, three bags full sir” as a civil servant. Was he the right man to provide that independence of thought and decision making? As a cross-party Committee with a Conservative majority, we decided that he was not, but that recommendation was ignored and overruled by the then Prime Minister. The whole idea of reform, which was a good one—that there must be some kind of surveillance of ministerial behaviour—was a waste and a failure. We are in a position to drive the public’s knowledge of politics, but their appreciation, and their trust in this place and in politics generally is gravely damaged.

There are problems in other areas, too, including with the completely futile group, the Advisory Committee on Business Appointments, which has absolutely no power. Abuses take place through the revolving door, whereby people who leave Parliament are prepared to hawk around, and to prostitute their insider knowledge and contacts to the highest bidder. There is no way that can be stopped, as we have no mechanism for interfering with it. When people breach the few rules that do exist, there is no way of bringing them to book. We are in a position, in public life, that is extremely dangerous, and I would like the Minister to explain why the cases I have mentioned were not referred to the independent adviser. What plans do the Government have to ensure that the neglect of the office by a Prime Minister over the past five years is not allowed to continue?

In March 2010, David Cameron made a rousing speech about how he was going to clean up politics and get rid of lobbying, but he came into office and things now are worse than they were then. The Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 ignored the corporate lobbyists but made life a bit uncomfortable for charities and trade unions. He was dabbling with the minnows in the shallows while the great fat salmon swam by unhindered.

We look with some trepidation to our future and the future of politics. The great debate going on at the moment is very much along the lines of the political class having been brought into disrepute. The Government should look seriously at our own reputations, and ensure that we have mechanisms here that work and are not subject to the bias and political interests of Prime Ministers.

Photo of Chris Heaton-Harris Chris Heaton-Harris Assistant Whip (HM Treasury) 4:14 pm, 8th November 2016

It is a pleasure to serve under your chairmanship, Mr Hollobone. The reason why the two Ministers responsible for this matter are not standing here is that one is on paternity leave after the birth of his second son, Aubrey Valentine Hamilton, and the other is on a ministerial visit outside London. I spoke to Paul Flynn last week to express their sorrow that they could not be here to respond to the debate. I hope that he finds me a suitable stand-in who does not say the word “transparency” too many times.

I thank the hon. Gentleman for his contribution, and I congratulate him on securing this debate and on speaking so fluently. The Public Administration and Constitutional Affairs Committee, of which he is a member, has been looking into the matter for some time, so the debate is timely. As always, I have listened to him and considered, as carefully as I can, what he said. I will try my best to respond to as many of his points as possible.

As the hon. Gentleman rightly said, the office of the independent adviser was set up by a Labour Government. It has a purpose that everybody knows about, and it is important to start by reiterating the lines of ministerial accountability. The very first section of the ministerial code makes it clear that:

“Ministers must...comply at all times with the requirements which Parliament itself has laid down in relation to the accountability and responsibility of Ministers.”

That is incorporated into a resolution of Parliament, as he well knows.

The code states what to all of us in politics is the blindingly obvious, which is that

“Ministers only remain in office for so long as they retain the confidence of the Prime Minister.”

It also sets out that it is the Prime Minister who

“is the ultimate judge of the standards of behaviour expected of a Minister”.

It is also he—I should say she; I must get that right now, in the new regime—who decides

“the appropriate consequences of a breach of those standards.”

She makes the decisions, and is accountable to Parliament and the public for those decisions. The independent adviser is someone outside Government who can provide the Prime Minister with independent advice. There has been no change to that approach, which has existed under every Government since the role was established under Labour in 2006.

There are two key aspects to the role, both of which are important and one of which the hon. Gentleman almost completely ignores. First, the independent adviser provides Ministers and their departmental private secretaries with advice on handling Ministers’ private interests in order to avoid any conflict between those interests and their ministerial responsibilities. That is set out in section 7 of the ministerial code and prevents any problems from occurring in the first place, helping to explain why fewer investigations are carried out by the independent adviser than perhaps the hon. Gentleman would like.

The second element of the job is to investigate when the Prime Minister, advised by the Cabinet Secretary, decides that allegations that an individual Minister may have breached the ministerial code of conduct are appropriate for investigation. Section 7 of the code sets out the adviser’s role with respect to ministerial interests, making it clear that:

“It is the personal responsibility of each Minister to decide whether and what action is needed to avoid a conflict or the perception of a conflict, taking account of advice received from their Permanent Secretary and the independent adviser”.

Again, that is a check to prevent problems from occurring in the first place, which helps to explain why so few investigations are carried out by the independent adviser.

Ministers are required on appointment to each new office to provide their permanent secretary and the independent adviser with a full list, in writing, of their interests that might be thought to give rise to conflict. Where appropriate, the independent adviser will advise Ministers and permanent secretaries on any action necessary to avoid a conflict or potential conflict of interest, removing future problems at the earliest stage. Ministers must then record in writing what action has been taken and provide the independent adviser with a copy of that record. The work is all behind the scenes, but it is crucial.

Photo of Paul Flynn Paul Flynn Labour, Newport West

I did not use all the time available to me, so that I could give the Minister a chance to reply. Although I appreciate that he has difficulty in filling a quarter of an hour, it is not good enough just to repeat the situation and the rules of the code. He should answer the specific points I raised. Will he, for instance, tell us why the case of Dr Fox, the then Secretary of State for Defence, was not referred to the independent adviser, as Sir Philip Mawer said it should have been?

Photo of Chris Heaton-Harris Chris Heaton-Harris Assistant Whip (HM Treasury)

I happily took the hon. Gentleman’s intervention, but he has intervened on me with 10 minutes to go in my prepared speech, and I have plenty to tell him about all that if he will please wait for that particular passage.

I emphasise that this is behind-the-scenes work because it is so crucial, and by doing it we address a lot of problems before the issues might arise. The hon. Gentleman can hardly complain about the independent adviser being impotent when the independent adviser is doing so much work to prevent problems from occurring in the first place. Most importantly, the Government are as transparent as possible about the process. The Cabinet Office publishes a list of Ministers’ relevant interests twice a year, which enables external scrutiny of any potential conflicts. It is an ongoing process, not a one-off. The most recent list was published in July 2016, and the updated list will be published in a few weeks, when the hon. Gentleman will be able to enjoy the slim pickings in my first ever entry.

The pickings are slim because every Minister I know takes the ministerial code seriously from the first time they look at it. I wanted to continue being a trustee of a local charity in my constituency, but I took advice that I was not allowed to do so because it would be in conflict with the ministerial code. I could have continued with the trusteeship but, being in conflict, I would no doubt have been referred—happily, in the hon. Gentleman’s eyes—to the independent adviser for investigation. That is the process. The independent adviser’s job is to try to prevent problems from happening by giving sensible advice at key points in time.

The independent adviser, at the request of the Prime Minister and having consulted the Cabinet Secretary, investigates alleged breaches of the ministerial code. The decision on whether an individual Minister will remain in office is ultimately for the Prime Minister, who will take into account the facts established by the independent adviser. The results of any investigation by the independent adviser are made public.

As the ultimate judge of the standards of behaviour expected of a Minister, it is rightly for the Prime Minister, in consultation with the Cabinet Secretary, to decide whether an alleged breach of the ministerial code merits investigation by the independent adviser. In some cases, the Prime Minister may conclude that there is no need for such advice—the facts will already be clear. In other cases, she may decide that there is a need for further investigation before she can make a decision. In those instances, she may refer the case to the independent adviser. It is not the role of the independent adviser to initiate his own investigations. He is there to advise the Prime Minister on allegations of breaches of the ministerial code. He gives the advice; the Prime Minister makes the decision.

Let us also be clear that Ministers are personally responsible for deciding how to act and conduct themselves in light of the ministerial code, and they are responsible for justifying their actions and conduct to Parliament and the public. We also have an independent and robust free press in this country, which plays an important role in holding individual Ministers and the Government as a whole to account.

There have been suggestions in the past that the ministerial code should be ratified by Parliament. The Government’s view is that that would blur the lines between the Executive and Parliament. The ministerial code is the Prime Minister’s guidance to her Ministers on how they should conduct themselves in public office. Parliament already has a powerful range of mechanisms to hold the Government to account, some of which I enjoyed as a Back Bencher. The Government see no reason to change that well established approach and believe that the current model works well.

Photo of Paul Flynn Paul Flynn Labour, Newport West

Will the Minister explain how the system worked well in the case of Kids Company? The accusation was of largesse, with huge amounts of money being given to the then Prime Minister’s project. The person who stopped the investigation of the obvious waste of £3 million was the then Prime Minister. How can a system be fair and reasonable, and how can it work, when the Prime Minister acts as judge and jury when he himself is accused?

Photo of Chris Heaton-Harris Chris Heaton-Harris Assistant Whip (HM Treasury)

There has been absolutely no suggestion of any breach of the ministerial code in that particular case. There have been a number of investigations, including one by the Select Committee on Public Administration and Constitutional Affairs, of which the hon. Gentleman is a member, and one by the Public Accounts Committee. The latter recommended a number of outcomes and lessons to be learned, and obviously those lessons will be learned, but there has been absolutely no suggestion of any breach of the ministerial code in that case.

The Government are confident that the role of the independent adviser, along with the broader commitment to transparency, will create a framework that is more robust and significantly stronger than the one that applies to the public sector. Publishing the list of Ministers’ interests is just one part of the Government’s commitment to transparency. The list, alongside the Register of Members’ Financial Interests, ensures that information about Ministers’ interests that are relevant to their Government role is in the public domain. Measures have been put in place, where necessary, to avoid any conflict of interest. The Government are proud to be one of the most transparent in the world, and we have taken steps to publish more information than ever before, including details of ministerial gifts over £140, overseas travel and any hospitality received.

The hon. Gentleman raised specific questions today about the role of the independent adviser, and he has raised questions about the independence of the role on numerous occasions. I have already made it clear that this is a personal appointment by the Prime Minister of the day. The post holder must be outside party politics and must provide his own independent views on the issues that are referred to him. The Prime Minister makes the appointment on the basis of an assessment of the post holder’s ability to provide such an independent perspective. It is our judgment that the current post holder, Sir Alex Allan, has the experience and necessary skills and judgment to make him ideally suited for the role. He has expertise, experience and ability to provide confidential and trusted advice to Ministers and their permanent secretaries from an independent, non-party political point of view.

I re-emphasise the process. If there is an allegation about a breach of the code and the Prime Minister, having consulted the Cabinet Secretary, feels that it warrants further investigation, she will refer the matter to the independent adviser on Ministers’ interests. Ministers are responsible for deciding how to conduct themselves in light of the code and for justifying their actions to Parliament and the people. The code makes it clear that Ministers only remain in office as long as they retain the confidence of the Prime Minister. The Prime Minister is the ultimate judge of the standards of behaviour expected of a Minister, and the appropriate consequences come from her if there is a breach of those standards.

I know that the hon. Gentleman will be slightly disappointed by my reply. He comes across as slightly —I don’t know—Trumpist in looking for conspiracy everywhere, where perhaps none exists. Proper investigations have taken place. It is important for us to realise that the Government take transparency very seriously, and we will not blur the lines between the Executive and Parliament. Parliament already has mechanisms to hold the Government to account.

Today’s debate has demonstrated remarkably strongly held views on this subject. My remarks will not have pleased the hon. Gentleman.

Photo of Paul Flynn Paul Flynn Labour, Newport West

I recall the words of Chaucer:

“That if gold ruste, what shal iren do?”

He spoke of:

“A shiten shepherde and a clene sheep”.

What we have here is an accusation that if the head is behaving in a partial way, and if the Head of Government is rotten, the whole flock will be rotten.

Photo of Chris Heaton-Harris Chris Heaton-Harris Assistant Whip (HM Treasury)

The hon. Gentleman has gone on a bit about how the standing of politics and how this place is viewed by the public has gone down. Those who look at his Twitter feed will see that he does not particularly like his voters and how they voted on Brexit. Maybe that is a disparity that he would like to examine slightly more closely than this issue.

I hope my remarks today have made it clear how the Government take issues of ministerial conduct very seriously, but we remain of the view that the appointment and dismissal of Ministers is a matter for the Prime Minister. We are satisfied with how the current model works.

Question put and agreed to.