Advisory Committee on Business Appointments

Debate between Bernard Jenkin and Christian Matheson

Thursday 28th June 2018 Commons Chamber

[Christian Matheson (City of Chester) (Lab)]

I congratulate the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) on his recent knighthood, richly deserved after many years’ service in this place, and on the work of the Committee and the dogged way in which he and his Committee have gone after this particular issue. It is a lesson to all in the House about the value and the strength of Select Committees when they are well led and follow the evidence with robust questioning. I pay tribute to him and his Committee.

[Sir Bernard Jenkin]

I am most grateful to the hon. Gentleman for his tribute, but may I echo the comments of the hon. Member for Inverclyde (Ronnie Cowan)? We really do owe much of our work to the persistence of our absent friend, the hon. Member for Newport West (Paul Flynn), who has always contributed and motivated the Committee on this matter.

[Christian Matheson]

I am most grateful for that clarification and the House will have noted it.

The Advisory Committee on Business Appointments is entirely necessary, but, to use the phrase of the moment, not at all fit for purpose. The clue is in the name. The A in ACoBA stands for “advisory” and it is clear that the committee is just that: it has no teeth and if its harshest sanction is to embarrass—well, that is scarcely a sanction at all. I wonder whether, as currently constituted, it is even designed to make a difference with a very narrow remit. As far as I can tell, ACoBA has never actually refused an appointment.

ACoBA is appointed by the Government to provide independent advice to senior Crown servants and to all former Ministers of the UK, Scottish and Welsh Governments on any appointments they wish to take up within two years of leaving public or ministerial office. ACoBA applies the business appointment rules, which are largely procedural and set by the Government. They have no statutory basis and there are no sanctions for non-compliance. The rules apply for up to two years after leaving office and they are applied with inconsistency.

It is a clear failure of ACOBA that it cannot adequately distinguish between different types of post-ministerial appointment, for example paid as opposed to unpaid work. One former senior civil servant recounted to me the story of when they left the civil service. They took a position on the board of trustees of a community group. It took months upon months for this voluntary position to be approved. Part of the delay was down to due diligence, because the trust was a charity. If charities and the Charity Commission can undertake due diligence and prevent an appointment pending such checks, why can ACOBA not do that?

Meanwhile, as we have heard, the former Chancellor George Osborne can take a job with BlackRock in the City of London and not even tell ACOBA that he was taking a job editing the London Evening Standard. I understand the same applies to the former head of GCHQ, Robert Hannigan, who was appointed to the European advisory board for a new US cyber-security firm, BlueteamGlobal, and did not even tell ACOBA. Because it is set up as an advisory and non-statutory committee, ACOBA finds enforcement difficult. I suspect that this is the reason it does not attempt to enforce. Indeed, it may be the reason it was set up in this way in the first place.

In addition to ACOBA’s toothlessness, there are further problems, for example with conflicts of interest. There are numerous, multiple examples of members of the committee declaring interests in firms to which the applicants were being appointed, but not recusing themselves from those cases. This included Mary Jo Jacobi, who has financial interests in BP but did not recuse herself from Vernon Gibson’s application, and John Wood, who has interests in BT, did not recuse himself from Keith Bristow’s commission with them.

ACOBA was also criticised by the former Public Administration Committee for having an “establishment” make-up—the hon. Member for Harwich and North Essex raised this point. ACOBA is chaired by a Baroness and former Conservative Minister, who also works as a consultant for a company that looks very much like a lobbying firm. Other members of the committee include two Lords, a knight, a former general secretary of the First Division Association, lawyers and former senior civil service grandees. I go back to the evidence cited by the Chair of the Public Administration and Constitutional Affairs Committee about bus drivers or hairdressers. As he says, there seems to be no sight of them.

Public Administration and Constitutional Affairs Committee

Debate between Bernard Jenkin and Christian Matheson

Thursday 25th January 2018 Commons Chamber

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

It is the role of the Public Administration and Constitutional Affairs Committee to oversee the UK’s changing constitution and the efficacy of the civil service and the machinery of government. Within that, PACAC covers matters of ethics and propriety in Whitehall, overseeing the work of the Committee on Standards in Public Life, the ministerial code, the special advisers code, the civil service code and the work of the Advisory Committee on Business Appointments, which oversees the rules governing departing Ministers and Crown servants when they take up outside appointments.

PACAC has defined its overriding purpose as being

“to conduct robust and effective scrutiny in order to help create conditions where the public can have justified confidence in public services/government.”

In that context, just before the election, in April 2017, PACAC published a new report on ACOBA, entitled “Managing Ministers’ and officials’ conflicts of interest: time for clearer values, principles and action”. That followed a report published in 2012 by our predecessor Committee, which recommended replacing the existing business appointment rules with a statutory system. The main recommendations of that report, and of our more recent 2017 report, have been flatly rejected by the Government. I am afraid that many people believe that to be hopelessly complacent. PACAC is therefore announcing in its supplementary report, published today, that we intend to hold a further inquiry into these matters.

The way we manage conflicts of interest arising where former Ministers and Crown servants leave the Government to take up jobs elsewhere really matters. There is a constant stream of embarrassing stories in the media about the so-called revolving door between employment in the public and private sectors, suggesting that people misuse the advantage of a job in Government to get lucrative jobs outside. Although many of these stories may be unfair, the situation is deeply corrosive of public trust in our system of democracy and Government because the present system of oversight fails to provide adequate assurance.

For example—I will name only one Department as an example, but this includes every Department—a constant flow of Ministry of Defence civil servants, and of senior officers from the armed forces, finish up working in the defence industry. A similar situation occurs in other Departments. No one should assume that there is automatically anything wrong with that, but there needs to be an adequate system of assurance that there is, indeed, nothing wrong, and that we are not fostering an over-permissive attitude. The expectation of many people—even of some Ministers—is that this is the new normal and that everybody does it.

We acknowledge, and I pay tribute to, the hard work of the ACOBA board—the chair and the secretariat—but PACAC’s 2012 and 2017 reports can be described only as excoriating. In 2017, PACAC concluded:

“ACoBA, in its current form is a toothless regulator which has failed to change the environment around business appointments.”

That is because ACOBA lacks power and resources, and its remit is much too limited. It is not a regulator—it is merely advisory, with no sanctions for non-compliance—and there are regular instances of the business appointment rules being ignored.

Furthermore, serious gaps exist in ACOBA’s monitoring process, so while we know about some high-profile cases, we have little idea about the scale of non-compliance. That has got worse since the Government removed ACOBA’s responsibility to monitor and report applications from Crown servants below SCS3 in 2010. Departments are meant to post half-yearly data on their websites to show when advice has been given to applicants at SCS2 and 3 levels, but this data has become patchy. We just do not know how many civil servants below SCS3 level who have performed important roles in respect of policy formation and commercial relationships end up in a position to draw on inside information or their Government contacts after they leave the civil service.

In the period between PACAC’s two reports, the challenge has escalated, with increased numbers of public servants and Ministers moving between the public and private sectors. There have also been a number of high-profile cases, leading to declining public trust in a system that was designed to promote public confidence. A personal observation is that the magazine Private Eye, from which we took evidence, frequently appears to do a better job of policing the business appointment rules than does the advisory committee itself.

It is essential that steps are taken to ensure that the ACOBA system is swiftly improved. In PACAC’s more recent report, we set out a number of new recommendations in relation to how that could be done without resort to statute, although we recommend that a cost-benefit analysis of statutory regulation should be conducted. The Government have rejected statutory regulation on the basis that it would be too costly, but they refuse to do the cost-benefit analysis.

PACAC recommended that the Government provide ACOBA with the powers and resources necessary to actively monitor and enforce compliance with the rules. There should also be a substantial increase in transparency regarding ACOBA’s decisions, and that should be done by Department. Applications should be published on receipt and not just when they are approved. That might reduce a lot of ACOBA’s unnecessary workload.

Most importantly, the business appointment rules should be fundamentally changed. A system to manage conflicts of interest needs to be more than just a code of rules and declarations. A principles-based system, if it is effectively taught by leaders and learned by everyone so that it is intrinsic to public service, would create a new and different expectation that individuals will act with integrity, encouraging people to regulate their own behaviour and attitudes according to those principles.

Our report recommends a substantial change of emphasis in the ministerial code and the civil service code to highlight the values and principles that should guide attitude and behaviour. We need to instil an expectation of integrity in individuals’ decisions. That, combined with independent checks, could effectively foster a substantial improvement in attitudes and behaviours. Evasively, the Government responded that the essence of those principles and values is already embedded in the code, but they are not explicit enough. We need a change of heart, and we need a stronger system—otherwise public confidence will continue to be eroded.

[Christian Matheson (City of Chester) (Lab)]

I thank the hon. Gentleman and his Committee for their powerful report and for the statement he has just made. The Opposition are committed to bringing this issue to the top of the political agenda and to seeking reform, as not a week seems to go by without the exposure of some conflict of interest in the heart of Government. Bearing in mind his statement and his report, does the Chair of the Select Committee agree that the report raises serious questions of governance and confirms that this is a Government of the few, by the few and for the few?

[Mr Jenkin]

I will leave aside the soundbite that came at the end of the hon. Gentleman’s question, but the substance of his remarks is correct. The system is inadequate and needs to be strengthened and reformed, and I am delighted that Her Majesty’s official Opposition are taking an interest in the matter.