Select Committee on Standards and Privileges Second Report


Memorandum submitted by the Parliamentary Commissioner for Standards
Complaint against Dr John Reid and Mr John Maxton



Mr Kevin Reid

38.  Mr Paul McKinney, the Labour Party`s Director of Communications in Scotland in April and May 1998, told me he recalled attending a series of strategy meetings during that period, the purpose of which was to plan the Party`s approach to the following year`s Parliamentary elections (Annex 164). A recurrent theme was the lack of staff and resources for the campaign. In the margins of one such meeting, according to Mr McKinney, Dr Reid had offered his son`s assistance to the Party using words along the lines of "My boy Kevin isn`t doing anything; he could come and help" (Annex 165, Q 3 and 4).

39.  Mr Nelson supplied me with his notes of a conversation he had with Mr McKinney in which the latter claimed that Dr Reid`s offer of his son`s services was coupled with a promise to provide the necessary funding. According to Mr Nelson, Mr McKinney`s exact words were: "I think his dad [Dr Reid] said `I will help you out. You can have my boy and I will pay for him`" (Annex 2). Later in the same conversation, again according to Mr Nelson, Mr McKinney ascribed to Dr Reid the words "... my boy`s not doing anything, he can come in and I will find a way of paying him". Mr Nelson provided me with a transcript of a subsequent taped conversation with Mr McKinney in which the latter confirmed the substance of his previous statement to Mr Nelson (Annex 169).

40.  Dr Reid`s response to Mr McKinney`s evidence on this point (Annex 8) was that there was nothing sinister in his offer of his son`s services to the Party. He had quite openly indicated to Party officials that his son would be prepared to work on media monitoring and that his existing employment arrangements with the House of Commons allowed ample flexibility for this. Dr Reid challenged the attribution to him of the statement that his son had nothing to do. It was more likely (though he could not remember his comments word for word at that distance in time) that he had referred to Kevin having time to spare. This was because he had, by then, concluded his academic studies, not because he had abandoned working for his father as a researcher.

41.  At all times, Dr Reid told me, he had sought to observe the necessary proprieties and, for that reason, had insisted that a part-time contract with the Party should be drawn up for his son. He had undertaken to find the necessary funds to pay for his son`s full-time salary from Party sources, and this had been successfully achieved.

42.  Mr Kevin Reid`s involvement with the Party overlapped with Mr McKinney`s for only 3 or 4 weeks, during which time Mr McKinney said he had the impression Mr Reid was an unpaid volunteer. He knew nothing of Mr Reid`s employment arrangements and only discovered much later from the press that in fact, Mr Reid was at that time being paid by his father as a Parliamentary researcher.

43.  Mr Alex Rowley, the then General Secretary of the Scottish Labour Party, referring to the decision to switch Kevin Reid onto a full-time contract with the Party in October 1998, explained that this had been done at Dr Reid`s request (Annex 129, Q 5). This followed several telephone conversations between Mr Rowley and Dr Reid in which the latter expressed concern at press articles criticising the Conservative Party for allegedly allowing Parliamentary researchers to be used for campaigning purposes whilst being paid from public funds. (Indeed, Dr Reid had faxed Mr Rowley one such article). Dr Reid, according to Mr Rowley, had been worried that unless his son were placed on a formal full-time footing with the Party, he might be vulnerable to similar accusations. In answer to my question "Did John Reid tell you that his resource of a part-time research salary would still be available to take on another person for campaign work?" Mr Rowley replied as follows: "Yes, he made it clear that he wanted his son to be on the Party books full-time but that his researcher`s salary would be available to continue working on the campaign" (ibid Q 6)

44.  Mr Rowley also stated that both Ms Annmarie Whyte (the office manager at Scottish Labour Party headquarters) and Mr Jonathan Upton (Director of Personnel at Labour Party headquarters in London) had been party to this arrangement and that the campaign budget had been adjusted accordingly. As Mr Rowley put it: "I discussed employment with Jonathan Upton when creating the budget. I told Jonathan Upton that these staff were funded partly from Westminster research funds and I did explain to Jonathan Upton why Kevin Reid needed to be put on to a full-time salary. I told him what John Reid was concerned about".

45.  As indicated earlier, Mr Rowley stated that Dr Reid had made clear to him that, after Mr Kevin Reid had been made a full-time Party employee, "his researcher`s salary would be available to continue working on the campaign". Mr Rowley added that Dr Reid had expressly raised with him in relation to his son the regulations prohibiting the use of funds paid through the Fees Office for party political purposes (Annex 129, Q 7).

46.  Ms Whyte told me that she had not been aware of any discussions relating to the employment of Kevin Reid, or of either of the other two researchers (Annex 184). She also denied (Annex 186B) ever having had a conversation with Mr Rowley about the researchers` salaries, except for one occasion on which Mr Winslow`s pay from "his other job" was discussed, in order to ensure—Ms Whyte claimed—that Mr Winslow was taxed correctly.

47.  Mr Upton supplied me with copies of the letters sent to Mr Reid and Mr Winslow offering them employment with the Party, together with copies of subsequent letters offering them improved terms (Annex 188). He also authenticated copies of two out of three Scottish Labour Party budget documents sent to me, at my request, by Mr Rowley containing projected salary payments for the period in question (Annex 129A). These documents are described separately[64]. Mr Upton said that he had agreed to release this information although, he maintained, it had "nothing to do with the House of Commons or Members of Parliament".

48.  Describing the background to the decision in October 1998 to upgrade his contract with the Party, Kevin Reid stated that the sole reason for this change was the increased demand by the Party for media monitoring services (Annex 88, pp. 2 to 4). No considerations of impropriety or the need to avoid press criticism had been adduced, although he had personally been aware of stories in the media about the Conservative Party`s alleged misuse of Parliamentary researchers. The justification for the move to a full-time contract had not been discussed with anyone other than his father and Mr Rowley, although the details would also have been arranged with Ms Whyte.

49.  Dr Reid accepted that in arranging for his son to be put on a full-time Party contract to reflect his increased workload he had been mindful of public perceptions (Annex 8). But this was because he recognised that it would have been "wrong in principle" not to make the change, not out of anxiety that the press might uncover any actual malpractice.

50.  Ms Hilliard, from her experience with the Party, told me she was unaware of any concerns about Kevin Reid`s employment status of the kind mentioned by Mr Rowley in his evidence (Annex 111, pp. 7 and 8).

Ms Suzanne Hilliard

51.  Both Mr Rowley and Mr Sullivan understood Ms Hilliard to be receiving payment for the Party work. Mr Rowley told me he believed "that Dr Reid`s research money was being used for someone else after Kevin Reid had gone full-time", though he could not recall the specific arrangements put in place for Ms Hilliard (Annex 129, Q 14). Mr Sullivan believed that Ms Hilliard`s salary was "made up from different sources as well", but he, too, was unable to remember the details. Mr Sullivan said that his understanding was that, from Christmas 1998 until the end of the election campaign, she worked full-time for the Labour Party in a paid post. After the election campaign he believed she worked for someone else (Annex 172, pp. 3 and 4).

52.  Ms Hilliard said in her statement to me that she "did not really advertise" the fact that from November 1998 onwards she was employed by Dr Reid (Annex 108, p. 4). She added: "When I was doing my work in Delta House [the Labour Party`s offices in Glasgow], I think a few people knew what I was doing, but not very many". In answer to a specific question from me, she denied that she had received any bonus from the Labour Party and she said she was prepared to say on oath that she had never been paid by the Labour Party during hours for which she had been paid by the Fees Office (Annex 111, p.16).

Mr Chris Winslow

53.  Mr Rowley told me (Annex 148A) that the first offer of help with staff for the Party`s election campaign was made by Mr Maxton to Ms Whyte—before Dr Reid had indicated that Kevin Reid was available for that purpose. Mr Rowley added that the offer from Mr Maxton had been reported to him in terms of a suggestion that Mr Winslow would work full-time for the Party but that part of his salary would be paid from the OCA. As Mr Rowley put it (Annex 148): "We had already agreed that Chris would work for the Party on a full-time basis and that this would be funded in part by the Party and in part by John Maxton MP."

54.  Mr Rowley added: "He [Mr Winslow] was paid part-time by the Party and part-time by John Maxton. This agreement was made between me and Annmarie Whyte, and the budget papers which I was party to took account of the researcher`s money. I arranged for his [Mr Winslow`s] wage to be made up to the level of Kevin Reid`s when he was taken on full-time by the Labour Party" (Annex 129, Q 3).

55.  The Labour Party`s Scottish Campaign Co-ordinator between January and May 1999, Mr John Rafferty, told me he was aware that Mr Winslow was working for Mr Maxton whilst simultaneously employed by the Party, although he saw nothing, in principle, irregular in that arrangement. But since during the last four weeks of the election campaign, in particular, it was doubtful whether Mr Winslow could have performed his Parliamentary duties in his spare time, Mr Rafferty believed that Mr Winslow could, during that period, be seen as having been paid in part from the Office Costs Allowance for carrying out work on behalf of the Labour Party (Annex 154A, Q 6-9).

56.  Mr Sullivan supported this analysis; his understanding at the time had been that Mr Winslow`s Party salary "was made up from different sources" (Annex 172, pp. 6 and 7). But he had not assumed that the source was the Fees Office since he was aware of the rules prohibiting the use for party political purposes of Parliamentary researchers paid through the OCA (ibid, p. 11).

57.  Mr Rafferty confirmed that shortly after the Scottish Parliamentary elections in May 1999, he had brought together in a conference call all the special advisers in the newly formed Scottish Executive to brief them on some impending adverse press coverage of allegations concerning lobbying activities in relation to the Scottish Parliament[65] (Annex 153, pp. 3 to 9).

58.  During the course of the conference call, Mr Winslow had expressed the hope that the media would not "start making mischief" with the fact that he and Kevin Reid had for a while been simultaneously employed by the Labour Party and by Members of the House of Commons as researchers (ibid, p.4). In his initial interviews with me, Mr Rafferty distanced himself from the suggestion that Mr Winslow`s concern stemmed from the fear that real misconduct on his part might be uncovered (Annexes 151 and 153). However, during subsequent questioning, the purpose of which was to clarify his earlier responses more precisely, Mr Rafferty confirmed that he had been left with the "clear impression" from the degree of anxiety shown by Mr Winslow that "there may have been misuse of public funds" (Annex 154A, Q 15 and 16).

59.  Mr Rafferty reported the gist of this conversation to the First Minister, Mr Dewar. He said that the First Minister had taken the view that, given the problems already being experienced with critical press coverage of other matters relating to the Scottish Parliament and Executive, it might not be helpful for those involved to engage in public speculation or gossip on the matter (Annex 153, p. 7). That conclusion was conveyed by Mr Rafferty to all the special advisers. Mr Dewar told me that he had no recollection of having discussed this matter with Mr Rafferty (Annex 211).

60.  Mr Winslow responded to my questions about the conference call by emphasising that his remarks had formed a small part of a discussion about an entirely separate issue, namely the alleged lobbying scandal. His concern had been that the media might seek to misrepresent his employment arrangements, not that there was a risk of genuine malpractice being uncovered. As far as he was concerned, this was a "very minor issue". He was not aware that his comments had been pursued at a higher level and he himself had not discussed the subject with anyone else (Annex 105, pp 6 and 7).

The Scottish Labour Party budget documents

61.  Following my request for any evidence confirming the details of the salaries paid by the Party to the staff concerned, I was supplied, by Mr Rowley, with copies of 3 budget documents relating to the SLP`s campaign for the Scottish Parliament elections ( Annex 129A), dated May 1998, October 1998 and January 1999, respectively. (As indicated earlier,[66] the authenticity of the first of these documents is not confirmed by the United Kingdom Labour Party). These documents set out in tabular form the projected monthly salary payments to members of staff at Scottish Labour Party headquarters during the period May 1998 to June 1999, as well as the planned totals for the period as a whole.

62.  The relevant figures for Mr Reid and Mr Winslow[67] have been extracted from the SLP documents and are reproduced in a separate table prepared by my office (Annex 200(i)). A further table, also prepared by my office (Annex 200(ii)) , sets out the monthly salaries paid by the Fees Office to Mr Reid and Mr Winslow, the monthly salary assumed to have been paid to them by the SLP on the basis of the two separate contract letters sent to them, and the monthly salary total derived from each of these components.

63.  Mr Rowley explained in a letter to me of 20 April 2000 (Annex 129A ) how, in his view, the successive versions of the budget documents substantiated his claim that an arrangement had been entered into to divert salaries paid through the OCA to the Labour Party`s campaign budget. The documents did this, according to Mr Rowley, by showing that, after October 1998 (when Mr Reid was put on a full-time Party contract) the budget figures had been reduced by an amount roughly equal to the salaries paid to Mr Reid and Mr Winslow through the Fees Office. In other words, the monthly sum the Labour Party expected to pay to Mr Reid and Mr Winslow was now lower because it was known that the remainder of the total amount which it had been agreed they should receive (for working, in effect, full-time for the Party) would be made up from their Parliamentary researchers` salaries.

64.  I asked Ms Whyte why the first document showed the projected monthly salary for each of Mr Reid and Mr Winslow as £1,100[68] when their contracted salaries from the Party bore no relation to that figure (£333 per month for Mr Reid up to October 1998 and £500 per month for Mr Winslow until November 1998). Ms Whyte replied that in both cases the figure of £1,100 was included "at an early stage" for planning purposes and assumed that Mr Reid and Mr Winslow would be taken on for 33¾ hours per week, although, as Ms Whyte added, "as it turned out the SLP did not do so".

65.  Mr Rowley disputed this interpretation, describing Ms Whyte`s reference to taking on Mr Winslow for a 33¾ hour working week as "simply not the case". As indicated earlier[69], he added: "We had already agreed that Chris would work for the Party on a full-time basis and that this would be funded in part by the Party and in part by John Maxton MP".

66.  At my request, Mr Rowley also provided me with a copy of an internal Party briefing note prepared in connection with the first of the three budget documents (Annex 129A). This consisted of numbered explanatory notes corresponding to different items in the budget. Notes 7 and 8, referring to the salary projections for Mr Winslow and Mr Reid respectively, read:

     7: "Salary & employers contributions—income of £6,000 from J Maxton MP"
     8: "Salary & employers contributions—income of £10,000 from J Reid MP".

67.  Ms Whyte`s explanation for the notes was that they were intended merely to record the fact that Mr Reid and Mr Winslow "had other sources of income from their MP employer". She further stated : "The Scottish Labour Party did not receive any payments from John Maxton or John Reid, nor did it regard itself as being subsidised by either MP". Mr Rowley described Ms Whyte`s account of the purpose of the notes as "not true". And of Ms Whyte`s claim that the SLP received no money from the two Members he added : "... neither John Reid nor John Maxton paid any money to the Party, they paid the individuals [ie Mr Reid and Mr Winslow] direct".

68.  I sought the advice and assistance of the House of Commons Director of Finance and Administration in analysing the SLP budget documents. I asked him to provide me with both innocent as well as more questionable interpretations which might be placed on the budget projections in the light of these complaints.

69.  The Director of Finance`s view, having considered the documents with the House of Commons Accountant, was that they did not, on their own, constitute prima facie evidence of a cross-subsidy to the Scottish Labour Party from the Office Costs Allowance.

70.  He said that there was not a complete correlation between the monthly salary payments included in the budget documents and Mr Rowley`s contention that the figures had been adjusted to take account of the amounts received by the three researchers through the Office Costs Allowance.

71.  And the Director of Finance offered the following possible, entirely innocent, hypothesis to explain the budgetary projections:—

  • the SLP were initially considering paying Mr Reid and Mr Winslow £1,100 each per month; but in the event (and for reasons not explained) they decided to engage the two on a part-time basis only;

  • when things began to get busier later in the year, the Party asked Mr Reid to work full-time (which he did from October 1998, giving up his employment with Dr Reid in the process) and the budget was adjusted accordingly, both retrospectively and prospectively;

  • the following month, Mr Rowley increased Mr Winslow`s pay so that his total earnings from all sources were broadly equivalent to Kevin Reid`s. This was done partly out of a sense of fairness, and partly because Mr Winslow increased his hours for the SLP (though he still remained part-time).

72.  Mr Upton provided me with a schedule of monthly salary payments showing the amounts actually received from the Party by Mr Reid and Mr Winslow, including the bonus payments (Annex 196). At my further request, Mr Upton agreed to supply me with photocopies of the relevant personal payslips, which matched the figures contained in the schedule (Annex 199). The Director of Finance and Administration has confirmed that these figures are consistent with the salaries offered in the four contract letters (Annex 209).

Bonus payments

73.  I asked Mr Upton for details of the bonus payments which had been made to the three researchers. He told me that a sum of £8,000 had been set aside to reward staff after the Scottish election campaign for effort "above and beyond the call of duty", the benchmark for which was the number of hours worked in excess of the contractual obligation. Entitlement to a bonus, and the amount due, was determined, by local management, according to 3 bands:

    Band 1  :  at least 5-15 hours extra per week
    Band 2  :  at least 15-25 hours extra per week
    Band 3  :  at least 25 hours extra per week.

74.  Mr Upton stated that Mr Reid and Mr Winslow had been placed in Band 3 and had each received £406.78. He said that Ms Hilliard, although not a contracted member of the Labour Party staff, also received this sum, "to recognise her enormous effort during the campaign" (Annex 188). Mr Winslow told me he had submitted a record of his hours to obtain his bonus (Annex 105, pp 17 and 18) and I have asked both Ms Annmarie Whyte and Mr Upton for a copy. Ms Whyte said they had been sent to Labour Party headquarters and Mr Upton said he would ask his personnel manager whether the information was available. On 2 October 2000 Mr Upton wrote to me to say that the personnel manager does not have the time sheets (Annex 199C).

Mr Reid`s mortgage application

75.  I asked Mr Rowley whether he was aware of any other information, such as financial references, which might establish the salaries paid to the researchers. Mr Rowley said he thought he recalled a mortgage reference for Mr Reid having been provided around 1998. I wrote to Mr Reid asking whether the Party had provided him with such a reference in that year. Mr Reid replied "No". He did not at that stage inform me of a reference having been provided in 1999. I put Mr Reid`s reply to Mr Rowley who suggested that the year in question might have been 1999. I wrote again to Mr Reid, this time couching the question more generally, namely: "whether the Labour Party has provided you (him) with a financial reference of any kind at any time?" I informed him that Mr Rowley had checked this information with Ms Quinn, the General Secretary of the Scottish Labour Party, who had confirmed its accuracy. Mr Reid replied that he had "not requested, or received, or been provided with, a financial reference from the Labour Party". He went on "I assume Northern Rock will have obtained a reference from the Labour Party".

76.  A copy of the mortgage reference in question was supplied to me by the Labour Party and subsequently confirmed as authentic by the Northern Rock Building Society. Since the reference is dated 14 April 1999 it relates to the period when Mr Reid was working full-time for the Party and therefore records his salary as £18,132 per annum, the same as that offered in the contract letter of October 1998.

64  See paragraphs 61-74. Back

65  The so-called "Lobbygate" case. Back

66  See paragraph 47. Back

67  As Ms Hilliard was never formally an employee of the Labour Party there are no salary projections in her case. Back

68  Equivalent to £1,000 when employers' National Insurance Contributions are subtracted (see paragraph 196). Back

69  See paragraph 53. Back

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2000
Prepared 22 December 2000