Hacker House

Layla Moran Excerpts

Wednesday 25th September 2019 Commons Chamber

[Layla Moran (Oxford West and Abingdon) (LD)]

(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if she will make a statement on payments made by her Department to Hacker House, and on how her Department manages possible conflicts of interest.

[The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Matt Warman)]

I thank the hon. Lady for raising this question today. I am answering it because it is part of my portfolio.

As hon. Members may know, the Department runs a programme known as the cyber-security immediate impact fund. It is one of a range of programmes designed to increase the number and diversity of people who pursue careers in the cyber-security profession. Through the fund, we want to support new, creative and innovative projects that are delivered by a range of organisations, including start-ups and small and medium-sized enterprises.

We have supported a variety of initiatives, awarding grants of between £20,000 and £500,000 since March 2018. Hacker House is one of the businesses that was awarded a £100,000 grant in February 2019 as part of our second funding round. To date, it has been paid around £47,000 for work completed. The grant was awarded by officials from DCMS, the Department for Education, techUK and, indeed, people from the National Cyber Security Centre. If the hon. Member for Oxford West and Abingdon (Layla Moran) wishes to impugn the motives of those officials, I invite her to think carefully before she does so.

To date, we have awarded 11 companies grants to deliver 12 initiatives. More than 400 people have benefited from support through the fund. Our objective is that even more people will benefit as the businesses with which we partner further invest in a sector that I know the hon. Lady agrees is vital to the future of our security and our economy. That is part of our mission as a Department to identify untapped talent and help a broader range of individuals who have the capabilities and aptitude to develop their careers in cyber-security. I assure the House that all grants are awarded through an open, transparent and competitive process. Each grant is judged on specific assessment criteria and is approved by the panel I referred to earlier, with cross-departmental and industry representation. We are, of course, aware of the claims raised recently by The Sunday Times, and the Department is reviewing the decision that was taken, but we monitor all initiatives that have been awarded grant funding and we treat any allegations of impropriety with the utmost seriousness. As soon as I have any further information to share on this matter, I will, of course, update the House at the earliest possible opportunity.

[Layla Moran]

I thank the Minister for his reply. I should make it clear that I care very little about the personal life of the Prime Minister, but I care a lot about how this Government manage conflicts of interest and how they spend taxpayers’ money. On that basis, I am concerned that the Department appears to have given Hacker House a £100,000 grant in January 2019 as part of the cyber skills immediate impact fund, a grant that was open to initiatives based in, and that operate from, Britain. Furthermore, these grants should not exceed 50% of the company’s revenue.

We now know that Hacker House is not based in the UK. The Sunday Times reports that its owner, Jennifer Arcuri, moved back to the USA in June 2018. The grants were not open for application until November. The registered address of the company is in fact a house in Cheshire that she used to rent, and the current occupant apparently sends any post addressed to Ms Arcuri back to the sender.

Where is the due diligence? What steps did the Department take to ensure that Hacker House was indeed based in and operating in the UK? Why did officials waive the rule that the grants could not exceed 50% of the company’s collective income? How many of the other companies that we now find have had these grants have had this kind of preferential treatment? Did the Prime Minister, then a Back Bencher, make any representations, official or otherwise, to the Department recommending Hacker House for the funding? The Department says that it will investigate the award of the grant, but will the Minister tell us when will that review conclude and will it be made fully public?

The misuse of public funds and conflicts of interest in relation to Ms Arcuri run deeper than just this matter. I appreciate that the Minister will not be able to speak for the actions of the Prime Minister when he was the Mayor of London, but would he, on behalf of the Government and the Prime Minister, ensure that all Departments fully co-operate with the investigation being launched by the London Assembly’s oversight committee into how the Mayor’s office handled conflicts of interest?

We are back in the Commons today because the Prime Minister has been shown to ride roughshod over the laws of this land. It would indeed be disappointing if we were to find that the Prime Minister has form in bending the rules for personal or political gain.

[Matt Warman]

I want to start by saying that the Prime Minister and his staff have had absolutely no role in the award of this grant; I suspect I will be saying that a number of times, but it will remain the case.

In answer to the hon. Lady’s other questions, the review will report by the end of next month, and I have said that I will update the House where necessary. Of course, we will fully co-operate with any other inquiry. She raises the matter of the match funding of 50%. The officials involved in awarding such grants scored the application very highly in all other aspects; as they routinely do in a number of other situations, they decided that the other aspects more than outweighed that particular criterion.

On the question of where the company is based, the officials have done the usual due diligence on the company. The hon. Lady herself mentioned the address where it is based. It will, of course, be a part of the review that we are doing, but, as I say, this is a company that is based in Britain as far as Companies House is concerned. It is a company with a British phone number. We will review that, but we have no reason to think that there is anything untoward in this particular matter.

Finally, to address the range of issues that the hon. Lady raised at the end of her question, if she wants to raise matters about a grant that was awarded by officials through the proper process, this is of course a completely legitimate forum for her to do so. If she wants to use this opportunity to try to spread tittle-tattle that is much more about politics, she should think very carefully before doing so.