Hacker House

Matt Warman 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.

[Damian Collins (Folkestone and Hythe) (Con)]

I welcome what the Minister said about the review being conducted in the Department. He will know that the Secretary of State is due to give evidence to the Select Committee on Digital, Culture, Media and Sport on 16 October. Will he or the Secretary of State write to the Select Committee before then with an update on the terms of reference for the review and the results of the review so far, as well as the details of other awards made to other companies and how much was given under the same scheme?

[Matt Warman]

I thank the Chair of the Select Committee for that question. My right hon. Friend the Secretary of State assures me that we are more than happy to write to his Committee. Of course, the awards that were made to other companies are no secret. A press release was put out about these things. We are of course happy to provide him with more details of that.

[Tom Watson (West Bromwich East) (Lab)]

I welcome the Minister to his new role, and I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for her forensic questioning this morning. This company, Hacker House, got a grant of £100,000. I have looked at the stated aim of the fund, and it says that it is

“to increase the diversity and numbers of those working in the UK’s booming cyber security sector”

and

“developing a sustainable supply of home-grown cyber security talent”.

As I understand it, Hacker House is a company headquartered in California and the principal owners of the company live in the United States. The company claims to have employees in London, but refuses to reveal who they are or where they are.

It is very difficult to see how the company fulfilled the criteria for these grants, so will the Minister explain to us how Hacker House did so? Was the connection with the then Foreign Secretary, or any other MP in this House, declared when the application was made? Will all applications and paperwork relating to the Hacker House grant now be published in the Library or made available for public scrutiny? Did any MPs lobby on behalf of the company in regard to this or other grants granted by Government Departments?

The broader questions that the Minister has alluded to need answering, because they keep coming back to the current Prime Minister. The issue of whether he has represented the interests of the company or other companies requires scrutiny, as the Chair of the Digital, Culture, Media and Sport Committee alluded to. This is fundamentally a question of character and of suitability. Is the Prime Minister of sufficient character to occupy high office and disburse public funds? Is he suitable? Does he understand that the trappings and privileges of power come with restrictions and restraints? Is he capable of restraining himself?

The truth is that our Prime Minister does reckless things. He is a man whose character renders him unsuitable and unfit for the office he holds. I want answers to these questions, but we all know the broader essential truth. We can all see who Boris Johnson is.

[Matt Warman]

The hon. Gentleman said that it was a pleasure to see me in my place, and it is a pleasure to see him still in his, although I am not sure how many of his hon. Friends share that view.

I am, of course, happy to repeat what I said before. The Prime Minister has had no role whatsoever in this application, and it is, I think, important to bear in mind that this is a decision made by officials, including people from the National Cyber Security Centre, the Department for Education and the Department for Digital, Culture, Media and Sport. These are honourable people doing the right thing, and their reputation should not be impugned in the way the hon. Gentleman seeks to impugn it.

I have said that there was no lobbying, from either the Prime Minister or any other Member of Parliament, and we will seek to make public the bid submitted by Hacker House—I have it here—so long as there are no commercial sensitivities. The aim of the cyber skills immediate impact fund is to build our strength and depth in what is, as I know the hon. Gentleman will agree, a vital area. The Hacker House bid seeks to train people and to build a platform to train more people. That platform has already been built. He can check it out online for himself—he could even sign up—and we will seek to ensure it reaches hundreds of people. That is part of the bid and an important part of this country’s national cyber-security strategy. I would have hoped that he would have supported it, rather than raise a whole host of issues that are not relevant to this question.

[Margot James (Stourbridge) (Ind)]

I congratulate my hon. Friend on the assumption of his office. I quite agree that the cyber skills immediate impact fund is a crucial driver for Britain to upweight its skills in this vital and growing area. I commend the DCMS officials and those at the National Cyber Security Centre who have managed this fund, but I ask him to look closely at its performance in relation to the grant given to Hacker House in the light of the information shared with the House by the hon. Member for Oxford West and Abingdon. Close scrutiny of what it is doing with the money is of paramount importance.

[Matt Warman]

I pay tribute to the hon. Lady for her work as my predecessor. It is an honour to follow her at the Dispatch Box. She is completely right. She will know that we as a Department routinely talk to those in receipt of grants and ensure as much oversight as possible, and that process will continue. As I have said, there is a review into this particular grant to make sure it delivers maximum value for money for the taxpayer.

[Hannah Bardell (Livingston) (SNP)]

I too welcome the Minister to his place. I wonder if when he was discussing accepting the job he knew he would be doing the Prime Minister’s bidding in cleaning up his mess.

It is fair to thank and to pay tribute to the bravery and determination of those who fought through the courts to ensure we could be back here today and able to hold the Government to account: my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry), Gina Miller and Jo Maugham of the Good Law Project. We thank and salute them.

The blame and bluster that has come out of this Government over this issue and the matter of what happened in the Supreme Court is outrageous. The Prime Minister is under significant pressure to declare what interests and relationship he had with Jennifer Arcuri. There is no disputing that the work is important—I agree with the Minister on that—but, despite what he says about other Members impugning her character, in reality it is the Prime Minister who is impugning her character because of the lack of transparency and his unwillingness to answer questions about their relationship.

The Minister will be aware that Hacker House received £100,000 from the DCMS. Members have already raised the matter of where that business is domiciled. Given the huge amount of public money spent, does he think it appropriate that his Department is investigating itself in those discussions and in that process? I would suggest that that is highly inappropriate and that there should be an independent—

[Mr Speaker]

Order. I am extremely grateful to the hon. Lady, but she has exceeded her time by 50% already, so that’s the end of that I’m afraid.

[Matt Warman]

I am glad that the hon. Lady welcomes the importance of this work. This process, like all Government grant-giving processes, is conducted in a transparent way. The review will not be the Department marking its own homework, and as I said, we will put any further updates to the House as they become available, which will be by the end of next month.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I understand that Ms Arcuri’s mother has described the Prime Minister as her daughter’s sponsor? What kind of sponsorship does he provide?

[Matt Warman]

I struggle to see how that question is directly relevant to the one that I am here to answer, but I would say, as I have said before—[Interruption.] I am not here to answer for anyone’s mother. As I have said before, the Prime Minister had no role whatsoever in the application, but none the less we are reviewing the process.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

I welcome my hon. Friend to his place. I also welcome the support he is providing to small and medium-sized enterprises in this area. Can he confirm that clear criteria are applied in the awarding of these grants and that grants are made on the basis of a business case and adherence to those criteria? Does he agree that Opposition Members should probably learn from the past and suspend making wild allegations until a proper review has taken place?

[Matt Warman]

I thank my hon. Friend for his kind words. He is absolutely right that supporting SMEs in such a sector is particularly important. It is something we will continue to do. On the process, I referred to the bid earlier. I have the form here—several dozen pages—that must be provided to access Government funding. That is right and proper. He is right also that we should all shy away from making unsubstantiated allegations.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Many of us will have constituents who represent companies that might bid for Government funding and constituents with concerns about this place and the probity of anything that happens. It was a former Prime Minister who said that sunlight was the best disinfectant. The Minister has already said he is looking to publish the details of the bid, which might contain commercially sensitive information. If he wants to defend the Prime Minister’s reputation, why does he not save us all the freedom of information request and commit to publishing all the documentation regarding the bid, including anything his officials received? I am sure some of those trainers could show him how to do it online today if he wanted.

[Matt Warman]

As I have said, we are doing a review into the decision, and I hope we will be able to publish as much as possible as a result. She is right that sunlight is the best disinfectant in many cases. It is a policy the Government apply very widely, including in this Department.

[Wes Streeting (Ilford North) (Lab)]

Probity and ethics seem to have gone out the window with this Government, so can the Minister assure us that the Prime Minister will co-operate fully with the Department’s inquiry and with the Greater London Assembly’s inquiry? If not, is it not only right that the Metropolitan police open an inquiry into whether there has been any misconduct in public office?

[Matt Warman]

The hon. Gentleman is obviously right to ask the question, but the review will go wherever it needs to, and I have had no indication that anyone is not going to co-operate, be it the Prime Minister or anyone else.

[Melanie Onn (Great Grimsby) (Lab)]

The Minister insists on calling this a review. Why is he shying away from referring to it as an inquiry? What will the scope and terms of the review be?

[Matt Warman]

I have already said to the Chair of the Select Committee, who is no longer in his place, that we will write to him with more information on that. All I can say now is that the review will leave no stone unturned.

[Bill Wiggin (North Herefordshire) (Con)]

I congratulate my hon. Friend on his new position. I am sure he will also thank you, Mr Speaker, for choosing this UQ from the 44 that were submitted. Can my hon. Friend tell the House how long ago this took place and for how long we have had a Labour Mayor of London who could have investigated this before now?

[Matt Warman]

I am grateful to you, Mr Speaker, for providing me with my Dispatch Box debut, as my hon. Friend alluded to. He is right to refer to the fact that this matter concerns a company that was founded in 2016 and that the Government did not hide anything—we put out press releases. Perhaps the Mayor of London does not check the gov.uk website as often as we might like.

[Wera Hobhouse (Bath) (LD)]

Some £47,000 of the £100,000 grant money has now been awarded to Hacker House. Will the remaining £53,000 be withheld until a review has been concluded?

--- Later in debate ---

[Matt Warman]

As with all such processes, while the review is ongoing that process will be paused, but I should like us to get on with ensuring that the good work done under this fund continues as rapidly as possible.

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

The Times revealed today that the Prime Minister previously planned to set up a £100 million fund with the owner of Hacker House. May I remind Members that, as Mayor of London, the Prime Minister oversaw the Garden Bridge project, which was the subject of allegations of corruption and was riddled with conflicts of interest? Will the Minister reassure the House that there will be no further examples of “friends with benefits” funding from the Department for Digital, Culture, Media and Sport or any other Department?

[Matt Warman]

Of course I speak for the DDCMS, but, as I have said, this is a process that is scrupulously transparent, it is a process that is rigorous, and it is applied equally to all. The hon. Lady mentioned something about the Garden Bridge; perhaps she was pre-empting the Secretary of State for Transport, who will be here shortly.

[Anna Turley (Redcar) (Lab/Co-op)]

The Minister has said that this whole process has been rigorous, open and transparent, and he is rightly making the bid available and accessible to all MPs in the Library. However, if he is completely confident that there have been no issues with this process, and if he does indeed believe in its being open and transparent, why does he not put all correspondence relating to the bid in the Library so that we can see it, instead of hiding behind his own governmental review? Show us the evidence!

[Matt Warman]

That is, of course, part of the point of having the review. As I said earlier in answer to another question, I will encourage those conducting the review to make as much of its material as is commercially possible in any circumstances as public as possible. The hon. Lady shakes her head, but I have agreed to the premise of her question, and we will do it.

[Alison Thewliss (Glasgow Central) (SNP)]

This is not just about money. It is also about influence, because it has been alleged that the Prime Minister and former Mayor of London obtained access to trade missions for Jennifer Arcuri, despite her apparently not meeting the criteria for those trips. Can the Minister tell me on how many other occasions the Prime Minister has intervened to secure junkets for his pals?

[Matt Warman]

As I have said repeatedly, there is no input from the Prime Minister at any stage in this process. Opposition Members can say it as often as they like, but that will not make it true.

[Tracy Brabin (Batley and Spen) (Lab/Co-op)]

Last week’s open letter from the Committee on Standards in Public Life to all public office holders describes the

“long-established principles of selflessness, integrity, objectivity, accountability, openness, honesty and leadership”

as “a personal responsibility”. Given the Prime Minister’s seeming disregard for conflicts of interest and his refusal to answer questions, does the Minister agree that he has not the character to lead this country?

--- Later in debate ---

[Matt Warman]

The hon. Lady has talked about the Prime Minister. He will be here later, and she can put that question to him herself. She has also talked about the principles of public life. What I think the public cannot get their heads around is how they can have a Parliament that is blocking the will that they expressed in a referendum.

[Brendan O’Hara (Argyll and Bute) (SNP)]

The Minister will realise that this is not going to go away any time soon. Does he agree that only a full independent inquiry will be able to remove the stench of sleaze and scandal that is currently engulfing the Prime Minister, and that any inquiry must investigate the circumstances of this use of public funds to check that it was legal and appropriate, that there was no conflict of interests, and that at no time did the now Prime Minister abuse his position or misuse public funds? If that does not happen, the stench of sleaze and scandal that currently engulfs the Prime Minister will linger long.

[Matt Warman]

It will not surprise the hon. Gentleman to learn that I do not accept the vast majority of the premise of his question, but he says that this is not something that will go away, and he is right. We are having a review. We are not seeking to make it go away, and we will leave no stone unturned.

[Emma Hardy (Kingston upon Hull West and Hessle) (Lab)]

The Minister has given assurances that no Member of the House of Commons was involved in lobbying for Hacker House, but can he give the same reassurances about the House of Lords?

[Matt Warman]

As I have said, we are having a review. I have no indication whatsoever before me that there is a positive answer to the hon. Lady’s question, but we are having a review, and we will make sure that that is covered.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

A great number of people out there are trying to get start-up businesses off the ground, and to those people a grant would be hugely welcome. Can the Minister at least see that the impression—I use my words carefully—of money being dished out to mates is corrosive to public confidence in the grant system, and that that, in turn, is damaging to the reputation of any Government?

[Matt Warman]

I agree that that impression is, in part, why we are having the review, but I would also say very gently to the hon. Gentleman that one of the things that is corrosive to public confidence in that process is people repeatedly making allegations when we have not had that review, and have not yet had any proof.

[Dr Paul Williams (Stockton South) (Lab)]

There have been reports that the Prime Minister, when Mayor of London, had a close relationship with Jennifer Arcuri, which included receiving personal, one-to-one technology lessons from her. Can the Minister assure us that, even if no representations were made directly by the now Prime Minister, no representations were made on his behalf?

[Matt Warman]

I have said that, and I am happy to say again that there was no undue lobbying to the best of my knowledge. As I have said, we are having a review and we will make that public, but I think that the hon. Gentleman’s attempt to broaden the scope of this will not change the fact that there is no evidence whatsoever that the Prime Minister sought to do anything improper.

[Mr Gavin Shuker (Luton South) (Ind)]

Has this company, or its directors, applied for any other Government funds? If so, over what period, and successfully or unsuccessfully?

[Matt Warman]

The two other companies that are related to Miss Arcuri have not made any applications whatsoever to this Department. Of course we will be double-checking that as part of the review, and I am sure that the review will also look at other Departments, but, as I have said, this is a process that is scrupulous, transparent, and rigorous in its independence, whichever company is in receipt of Government money.

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

I am sorry that the Minister is rattled, as evidenced by his dismissal of questions about the Prime Minister’s possible conflict of interests when he was London Mayor as “tittle tattle”. That is contemptible, and sadly shows—as did yesterday’s announcement of the result of the court case—the staggering sense of entitlement that is at the heart of this Government, with a Prime Minister who thinks that he can do as he pleases. Will the Minister confirm that he believes that this Parliament and the public are perfectly entitled to hold the Prime Minister and his Government to account, and that any hints or suggestions to the contrary about “tittle tattle” only show yet more disrespect for the democratic process?

[Matt Warman]

The hon. Lady tells me that I am “rattled”. I am enjoying this debut rather more than I expected, but none the less, it is always a pleasure to answer pre-written questions. [Interruption.] The hon. Lady shows me that it was pre-written; that is very good to see.

To be fair, the hon. Lady has raised an important constitutional principle. It is an important constitutional principle that this Government absolutely respect, and will continue to do so.

[Tom Watson (West Bromwich East) (Lab)]

On a point of order, Mr Speaker.

--- Later in debate ---

[Matt Warman]

It is, of course, a part of the Department’s processes that we will make sure that the services we procure are properly delivered. We are very happy to have a look at that, and we will continue to do so.