Cabinet Secretary Report (Government Response)

Angela Eagle Excerpts

Wednesday 19th October 2011 Commons Chamber

[The Leader of the House of Commons (Sir George Young)]

With permission, Mr Speaker, I would like to make a statement on the Cabinet Secretary’s report on the allegations against my right hon. Friend the Member for North Somerset (Dr Fox). In the interests of transparency, the Prime Minister published the report in full yesterday afternoon and copies were made available to Members immediately after publication. The Government have come to the House at the earliest appropriate moment following the report’s publication. It is not usual for the Government to make an oral statement following the resignation of a Minister. However, given the wider implications of the Cabinet Secretary’s report, it is right that the House has an opportunity to consider the Government’s response.

Before coming to the report, I would like first to set out to the House the changes to the regulations governing Ministers which this Government have already introduced. In May 2010, the Prime Minister published a new ministerial code and committed the Government to an unprecedented level of transparency. The Government are publishing on a quarterly basis details of all Ministers’ meetings with external organisations, including lobbyists, and including meetings with senior media executives; all hospitality received by Ministers; all gifts given and received by Ministers over £140; all Ministers’ visits overseas; contracts over £25,000; special advisers’ salaries over £58,200, and estimated pay bill; special advisers’ gifts and hospitality received; spend on Government procurement cards over £500; and senior officials’ hospitality expenses and meetings with external organisations.

The Prime Minister also significantly tightened the rules regulating former Ministers when they leave office. Former Ministers are now barred from lobbying Government for two years, as well as having to get the advice of the independent Advisory Committee on Business Appointments for any appointments or employment they wish to take up for a period of two years after leaving office, and the code makes it clear that former Ministers must abide by the advice of the Committee.

Turning now to the matter in hand, following speculation in the media my right hon. Friend the Member for North Somerset requested that the permanent secretary at the Ministry of Defence investigate the allegations. The Prime Minister then asked the Cabinet Secretary to establish the facts of the case in relation to allegations in the context of the ministerial code. The interim report prepared by the permanent secretary found that

“there are areas where the current guidance on propriety and the management of Ministerial Private Offices needs to be strengthened”.

As the ministerial code makes clear, it is the Prime Minister’s duty to enforce the ministerial code, having consulted the Cabinet Secretary. My right hon. Friend the Prime Minister has therefore acted at all times in accord with the proper process.

Last week, my right hon. Friend resigned as Defence Secretary. As he said in his resignation letter to the Prime Minister:

“I mistakenly allowed the distinction between my personal interest and my government activities to become blurred”.

My right hon. Friend the Prime Minister accepted my right hon. Friend’s resignation from Government and his reasons for resigning while making it clear that he viewed him as a superb Defence Secretary, who had implemented fundamental changes that will help to ensure that our armed forces are fully equipped to meet the challenges of the modern era—and I wholeheartedly endorse that view.

The report by the Cabinet Secretary confirms that my right hon. Friend did indeed breach the ministerial code. The ministerial code requires Ministers to ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise. My right hon. Friend’s actions constituted a clear breach of the ministerial code which he has already acknowledged. However, as recognised in the Cabinet Secretary’s report:

“Dr Fox has stated to Parliament Mr Werritty had no access to classified documents and was not briefed on classified matters. There is nothing in the evidence we have taken to contradict this.”

The report also says that

“there is no evidence from this review that casts doubt on Dr Fox’s statement to Parliament that public funds were not misused”

or

“that Dr Fox gained financially in any way from this relationship”.

The permanent secretary at the Ministry of Defence has already accepted that there should have been much tighter procedures within the Department and is taking steps to strengthen them to ensure that the ministerial code is properly adhered to.

The Cabinet Secretary’s report concludes that my right hon. Friend’s close and visible association with Mr Werritty in the UK and overseas, and the latter’s use of misleading business cards, has fuelled a general impression that Mr Werritty spoke on behalf of the UK Government. The risks of my right hon. Friend’s associations with Mr Werritty were raised with him by both his private office and the permanent secretary. My right hon. Friend took action in respect of business cards, but clearly made a judgment that his contact with Mr Werritty should continue. This may have been a reasonable judgment had the contacts been minimal and purely personal and had not involved Mr Werritty’s frequent attendance at meetings in the MOD main building and on overseas visits. The damage arose because the frequency, range and extent of the contacts were not regulated as well as they should have been, and that was exacerbated by the fact that the Department was not made aware of all the various contacts.

The Cabinet Secretary also concluded that the links and a lack of clarity in the roles meant that the donations given to Mr Werritty could give rise to the perception of a conflict of interests. He went on to say that there was an inappropriate blurring of the lines between official and personal relationships. Mr Werritty should not have been provided with access to my right hon. Friend’s diary and itinerary. Nor should he have been allowed to participate in the social elements of the then Defence Secretary’s overseas trips in a way that might have given rise to the impression that he was part of the official party. He should not have had meetings in the MOD with such frequency, as that access may have provided others with a belief that Mr Werritty was speaking for Government and was part of an official entourage. That impression was, of course, reinforced by the business cards that Mr Werritty provided to people.

The Cabinet Secretary has recommended further strengthening of procedures across Government. There are five specific recommendations in his report and it is worth setting those out in full. The first is:

“Where discussions take place with external organisations which raise substantive issues relating to departmental decisions or contracts and where an official is not present Ministers should inform their department.”

The second is:

“On Ministerial visits, whether in the UK or abroad, departments should make sure there is no confusion about who is and is not a member of the Ministerial party”,

and the third states:

“Officials should accompany Ministers to all official visits and meetings overseas at which it is expected that official matters may be raised, and should seek guidance from the FCO if there is any uncertainty about the status of such meetings or the attendance of non-officials at them.”

The fourth is:

“Permanent Secretaries should discuss with Ministers at the time of their appointment and regularly thereafter whether any acquaintances or advisers have contractual relationships with the department or are involved in policy development. The Minister and the Permanent Secretary should take action as necessary to ensure there can be no actual or perceived conflict of interest in line with the principles of the Ministerial Code.”

Finally:

“Permanent Secretaries should take responsibility for ensuring departmental procedures are followed, and for raising any concerns with Ministers, advising the Cabinet Secretary and ultimately the Prime Minister where such concerns are not resolved.”

The Prime Minister has accepted those recommendations in full and the Cabinet Secretary is writing to permanent secretaries today to set out the processes that now need to be followed.

Finally, I will turn briefly to wider action that the Government already intend to take to ensure greater transparency between Ministers and external organisations. The coalition agreement committed us to regulating lobbying through introducing a statutory register of lobbyists, ensuring even greater transparency. It is worth noting from the Cabinet Secretary’s report that:

“Whilst Mr Werritty was not a lobbyist, the Government’s commitment to consult on a statutory register of lobbyists will bring further transparency to this area.”

We intend to produce a consultative document setting out our proposals next month, with an aim of legislating next year. This work is being taken forward by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and my hon. Friend the Deputy Leader of the House.

At the end of the last Parliament, public trust in Parliament was at an unprecedented low. This Government are committed to working to rebuild confidence in our political and democratic institutions and we will continue to put in place any measure necessary to ensure that the highest standards rightly expected of our elected representatives are met.

I commend this statement to the House.

[Ms Angela Eagle (Wallasey) (Lab)]

I thank the Leader of the House for his statement, but what a condemnation it was of the way in which government is being run in this country. It is a matter of deep regret that the Prime Minister has chosen not to deal with this statement himself. It is the Prime Minister and not the Leader of the House who is the guardian of the ministerial code, and who has the final say on who is fit to be in his Government. Today, he has ducked those responsibilities.

When news of the potential wrongdoing at the Ministry of Defence first surfaced, the former Secretary of State for Defence announced an inquiry into himself, but only after he had called the allegations “baseless”. As the revelations mounted daily, the Prime Minister belatedly announced this limited inquiry by the Cabinet Secretary. By then, it was apparent to everyone that the ministerial code had been breached. The Secretary of State admitted as much. Why then did the Prime Minister not refer this case to the independent adviser on Ministers’ interests, Sir Philip Mawer?

What we have today is a far cry from such a full, independent, external inquiry. The Cabinet Secretary has been forced to rely on the word of Adam Werritty and the former Defence Secretary, whose explanations have repeatedly unravelled at the first hint of scrutiny. This report merely scratches the surface of potential misconduct in government. Consequently, it raises more questions than it answers.

Even in its narrow and limited form, the Cabinet Secretary’s report is damning. It finds the former Defence Secretary’s conduct

“not appropriate and not acceptable”.

It reveals, in stark detail, multiple breaches of the ministerial code. The former Defence Secretary has knowingly circumvented the long-established rules that are in place to prevent conflicts of interest from arising. The report shows that wealthy individuals funded Adam Werritty. He was, in effect, a privately funded special adviser. The former Secretary of State’s shadow political operation routinely undermined our civil service structures and their accountability. The report fails to expose the full facts about the money trail. There is no investigation into the benefits that Adam Werritty received. There is no full disclosure of his funders and the purpose behind the donations. Given the Prime Minister’s failure to answer this question earlier today, can the Leader of the House give the House a categorical assurance that no similar practices are taking place anywhere else in this Government?

I turn now to the details of the report. We need answers on the following issues. The role of the Sri Lanka Development Trust is not considered in the report. Mr Werritty’s presence in Iran, Washington and Israel remains unexplained. We do not know whether Mr Werritty profited from his association with the former Defence Secretary, although we do know about the five-star nature of his taste in flights and hotels. We do not know what those secretive donors, who were in effect Mr Werritty’s paymasters, were promised for their money, nor indeed if they got it. We do not know whether the former Defence Secretary commissioned any work from the MOD as a result of the offline and irregular meetings brokered by Mr Werritty. We do not know which other Ministers and senior staff have met Mr Werritty, because the Prime Minister has refused to publish a full list. That is totally unacceptable. A full list must be published. In order to deal with all those issues, will the Leader of the House agree that further investigation is both essential and urgent?

Will the Leader of the House also tell the House whether he has initiated an inquiry into the use by the former Defence Secretary of his parliamentary office to run Atlantic Bridge as a charity, and whether he is satisfied that that was proper under parliamentary rules? Some of the key funders of Atlantic Bridge were the key funders of Adam Werritty. They are also the key funders of the Conservative party. The links are complex, but they are deep and well-established.

We learned yesterday of the meeting between Adam Werritty and two members of the existing Defence team. They must give the House a full explanation of the details of those meetings and their connections to Adam Werritty.

We also learned in the report that the risks of the former Defence Secretary’s association with Mr Werritty were raised with him by his private office, the permanent secretary, a former permanent secretary and a former Chief of the Defence Staff. He chose to ignore those warnings. Why was he allowed to make that choice? What did the permanent secretary at the MOD then do? Were any of those concerns raised with the Cabinet Secretary and, if so, did the Cabinet Secretary raise them with the Prime Minister? Why was this situation allowed to continue for so long? Why was the former Defence Secretary allowed to treat the ministerial code as if it was an optional extra?

The report recommends that senior civil servants have greater oversight of ministerial behaviour. Yet the fact remains that it is Ministers who are responsible for their own conduct and the Prime Minister who is the guardian of the ministerial code. He is expected to enforce it, not allow it to be broken multiple times.

Before the last election, the Prime Minister promised to end the

“cosy relationship between politics, government, business and money”.

That promise has now been broken. This scandal has only damaged public confidence in the Government further. Meetings without civil servants; money off the books; luxury social visits in between visits to our brave servicemen and women; and today, the Prime Minister’s contempt on the matter was revealed. Simply saying that the Defence Secretary has resigned is not good enough. The Government need to take responsibility for this self-inflicted crisis. The House needs answers to the unanswered questions, or people will only conclude that this Government have something to hide.

[Mr David Anderson (Blaydon) (Lab)]

On a point of order, Mr Speaker.