Select Committee on Standards and Privileges Second Report


APPENDIX 1

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

SECTION IX

ANALYSIS

177.  The evidence is analysed under two main headings:

    (i)  was there an arrangement of any kind, involving either Dr Reid, Mr Maxton or both, under which the Labour Party`s internal planning, including its budget, assumed that the work done by any of the three researchers for the Party would, at least in part, be paid for from the House of Commons Office Costs Allowance (OCA)?

    (ii)  what was the level of the commitment by Mr Reid, Ms Hilliard and Mr Winslow to the Labour Party during the relevant periods?

(i)    Was there an arrangement of any kind, involving either Dr Reid, Mr Maxton or both, under which the Labour Party`s internal planning, including its budget, assumed that the work done by any of the three researchers for the Party would, at least in part, be paid for from the House of Commons Office Costs Allowance (OCA)?

178.  This question has to be considered against the background of a Labour Party facing elections of critical importance to the future of the Scottish Parliament, about to embark on a long and arduous campaign, and in a financial position which, by common consent, was difficult.

179.  It is not in dispute that Dr Reid offered his son`s services to the Party in April 1998 on the grounds that he had time to spare.

180.  The key divergence in the evidence is over whether Dr Reid offered to find a way of paying for his son`s services to the Party and, if so, what he meant by this remark. Dr Reid is not sure that he used the words ascribed to him but claims that, even if he did, he meant to imply that he would seek to obtain the necessary funding from Party sources, not that he would draw upon the Office Costs Allowance.

181.  Mr McKinney`s statements in his first conversation with Mr Nelson, taken at face value, tend to support the second possible interpretation of Dr Reid`s words. It is true— as Dr Reid points out— that, in that initial conversation, Mr McKinney is recorded by Mr Nelson as using two slightly different formulations ("I will pay for him (Kevin Reid)" and "I will find a way of paying him"). The latter form of words could be construed as meaning that Dr Reid would find a source of funding other than himself—ie the Labour Party. On the other hand, during the subsequent taped conversation, it was the use by Dr Reid of the expression "I`ll pay him" which Mr Nelson asked Mr McKinney to confirm—and he did so. For his part, Dr Reid has not provided me with any evidence that he followed up the suggestion he claims he made to Mr McKinney that he would try to obtain monies from the Labour Party or elsewhere to pay his son for his Party work.

182.  Dr Reid has, however, supplied me with a copy of the minutes of a Scottish Labour Party strategy meeting on 26 April 1998 containing an item headed "Campaign Team Structure", an extract from which reads as follows:

    "Campaign Team Structure
    Current KHH [Keir Hardie House] staff already tied up with party business.
    Urgent requirement for SNP researcher and rapid rebuttal unit.
    Staff also required for admin and policy research.
    Potential to draft in people currently employed by Scottish MPs."

183.  The last sentence could be construed as indicating that thought was being given to making up the admitted staff shortfall by diverting to Party work Parliamentary researchers paid from the OCA. An alternative interpretation is that the Party was keen to obtain the services of people with some experience of Parliamentary work and loyalty to the Labour Party and that any researchers recruited in this way would terminate their Westminster contracts before taking up employment with the Party. But as far as I am aware only Mr Kevin Reid did so, and that was six months later.

184.  I am reluctant to accept as coincidental the timing of the decision to place Mr Reid on a full-time contract with the Party in October 1998 and the media coverage during the summer and autumn of that year of alleged improprieties involving politicians—in particular claims that Conservative Members of the House of Commons had misused their Office Costs Allowance for party political purposes. According to Mr Rowley, Dr Reid was so concerned about the latter that he faxed a newspaper article on the subject to Mr Rowley in order to persuade him to place Mr Kevin Reid on a full-time footing with the Labour Party. Dr Reid accepts that he may have drawn Mr Rowley`s attention to the relevant press coverage but only as an illustration of why a full-time contract was "necessary to reflect the proposed change in [his son`s] duties".

185.  Given this background the decision to switch Kevin Reid to a full-time contract can be seen as an attempt to regularise his future position and reduce the risk of prejudicial publicity, by ensuring that his salary from the Party now reflected the reality of the full-time job he had been doing for it all along.

186.  Mr Rowley`s evidence supports this view. He maintains that it was well known within the Party that Mr Reid was working full-time for the Party between May and October 1998 whilst being paid partly from the OCA. Mr Rafferty says he was under a similar impression, based on the conference call with Mr Winslow shortly after the election in 1999.

187.  Dr Reid, in his response, has questioned why, having agreed— because of worries about adverse press publicity—to regularise his son`s position by agreeing to his switch to a full-time contract, he should have then replicated the same allegedly improper arrangement with Ms Hilliard. But this was not the perverse decision Dr Reid makes it appear. Mr Kevin Reid`s vulnerability to criticism, and the reasons for the media attention, stemmed from the fact that he was the son of Dr Reid. This factor did not apply to Ms Hilliard. This interpretation is supported by the statement of Ms Hilliard that she "did not advertise her employment by Dr Reid" and that others working closely with her such as Mr Rafferty and Mr Sullivan were unaware of her employment by Dr Reid.

188.  Mr Rowley`s evidence is that the first offer of help with staffing for the campaign, in the form of Mr Winslow`s services, came from Mr Maxton—before Dr Reid had indicated that Kevin Reid was also available for this purpose. Mr Rowley is certain about this because the offer was reported to him on the grounds that the Labour Party`s agreement was needed for the arrangement. His clear recollection is that the offer involved Mr Winslow working full-time on the Party`s campaign, but partly paid through the OCA.

189.  The fact that Mr Winslow was working simultaneously for the Labour Party and for Mr Maxton was known by officers of the Party, including Mr Rafferty: there was, in any case, nothing necessarily wrong in such an arrangement. But as Mr Winslow`s workload increased with the approach of the election, Mr Rafferty came to suspect that the distinction between the two roles had become blurred, to the point where Mr Winslow could legitimately be seen as being at least partly paid from public funds (the Office Costs Allowance) for his Party campaigning activities.

190.  Such was the sensitivity to potential criticism for malpractice in the light of the "Lobbygate" case that Mr Winslow raised the issue during the conference call, shortly after the election, involving Mr Rafferty and the other special advisers in the Scottish Executive. Mr Winslow says that he had nothing to apologise for, but that he was concerned about the scope for misrepresentation by the media of his previous employment arrangements. Nevertheless, the degree of anxiety evinced by Mr Winslow and the terms in which it was expressed left Mr Rafferty, the senior Party official involved in the call, in no doubt that there was more to it than possible press mischief-making and that, indeed, there may have been "misuse of public funds".

191.  Mr Rafferty took the matter seriously enough to report Mr Winslow`s remarks to the First Minister, Mr Dewar. Unfortunately, Mr Dewar no longer recalls the conversation with Mr Rafferty.

192.  Mr Winslow has not provided me with the names of any others involved in the conference call to support his, rather than Mr Rafferty`s account, of the reasons for his anxiety.

The Scottish Labour Party`s budgetary arrangements

193.  Mr Rowley`s evidence is that the Scottish Labour Party`s campaign budget was adjusted to reflect the arrangement which had been entered into that the three researchers would be working full-time for the Party during the period in question but that part of their total salary would be paid to them through the Office Costs Allowance. Of course, since Ms Hilliard was never formally employed by the Party, she does not feature in the budget projections. But, if Mr Rowley`s account is correct, her volunteer status was a fiction: in reality she was working only, or almost exclusively, for the Party in what amounted to a full-time capacity, but— from November 1998 onwards—drawing a salary as a House of Commons researcher. Mr Rowley`s evidence is supported by the fact that Ms Hilliard was paid a bonus on the same basis as Party employees.[80]

194.  Mr Rowley`s explanation of the budget figures is that the original sum of £13,200 (or £1,100 per month), contained in the May 1998 document, represented the maximum amount judged for planning purposes to be affordable to cover the costs of employing each of Mr Reid and Mr Winslow full-time. Thereafter, the projected monthly salary figures included in Budget document 2 (dated early October 1998) were reduced to take account of the payments made to Mr Reid and Mr Winslow through the Office Costs Allowance. The difference between the two sets of figures roughly equates to their OCA funded salaries. Subsequently, when Mr Winslow`s Party salary was increased to reflect the doubling of his hours, this was done in such a way as to leave Mr Winslow`s salary from both sources (ie the Party and the OCA) equal to that Mr Kevin Reid was receiving from the Party for his full-time contract.

195.  Mr Rowley adds that these were deliberate and conscious decisions, discussed in advance by him with senior officers of the Party, including Mr Upton and Ms Whyte and that all of them were aware they were making use of the Office Costs Allowance to top up Party salaries. Ms Whyte denies ever having had such discussions with Mr Rowley, save for one conversation about Mr Winslow`s other sources of income—the purpose of which, she says, was to ensure that Mr Winslow was correctly taxed. It is not clear to me why, for tax reasons, an employer should require information in relation to one of its staff about his salary from another, entirely separate post.

196.  There is one aspect of the budget documents which needs explanation. In some cases, the projected monthly salary payments are about 10 per cent higher than one would expect on the basis of dividing by 12 the figures contained in the contract letters sent to Mr Reid and Mr Winslow. The most likely explanation for this difference is that the budget figures allow for employers` National Insurance Contributions (NICs).[81]

197.  If Mr Rowley is truthful in saying that the SLP budget was adjusted for the reasons he describes, it should be possible to see from the documents a pattern which supports that explanation.

198.  In other words, for any given month[82] within the period in question, the Labour Party salaries projected in Budget document 2 (October 1998) should represent roughly the difference between the payments to Mr Reid and Mr Maxton through the OCA and the assumed monthly cost to the Party of employing a media monitor (that is to say, the original planning figure of £1,000).[83]

199.  In Budget document 3 (January 1999), the monthly Party salary projected for Mr Winslow should, according to Mr Rowley`s account, represent the difference between the initial planning figure of £1,000 and his House of Commons salary, up to the point in November 1998 when Mr Winslow`s hours for the Party were doubled. Thereafter, if Mr Rowley is correct, there should be some correlation between Mr Reid`s salary from the Party and Mr Winslow`s combined salary from the Party and the OCA.

200.  In my view, having carefully studied all the information provided by both Mr Rowley and the Labour Party, the three budget documents most probably support the following interpretation.

201.  Budget document 1 (May 1998) was drawn up before either Mr Reid or Mr Winslow were taken on by the Party. The monthly salary figure of £1,000 (net of NICs) was at that stage a planning assumption of what it might cost the Party (or, more to the point, what sum the Party would need to find, from whatever source) to employ a full-time media monitor.

202.  Budget document 2 (October 1998) was produced after Mr Reid and Mr Winslow had taken up employment with the Party, and shortly after Mr Reid was transferred onto a full-time contract, but before Mr Winslow`s hours for the Party were doubled. By this time, as suggested by Mr Rowley, an arrangement had already been in place for some months, whereby both Mr Reid and Mr Winslow would work full-time for the Party, but a portion of their total salaries would be made up from their Parliamentary researchers` salaries. The salaries offered in the initial contract letters, which were sent to Mr Reid and Mr Winslow very shortly after the first of the budget documents was produced in May 1998, reflected this arrangement. As would be expected, Budget document 2 shows only the salary payments from the Labour Party.

203.  Thus, in Budget document 2 (October 1998), Mr Reid`s projected monthly salary from the Party for the period up to October 1998 was reduced from £1,000 to £333, but his total monthly salary from both sources (including £850 through the OCA) was now £1,183. Of course, that figure does not itself appear in the budget document. In Mr Winslow`s case, the projected monthly salary from the Party was adjusted downwards to £500, but his total monthly salary from both sources, including £550 from the OCA, was now £1,050. Again, that figure does not appear in the budget document. Although the total salaries from both sources of £1,183 and £1,050 respectively do not exactly match the £1,000 (net) originally used for planning purposes, their closeness to that figure—which was itself only an estimate—is noteworthy. In October 1998, shortly after Dr Reid became concerned about possible adverse publicity over the alleged misuse of public funds, Mr Reid was put onto a full-time contract with the Party and ceased to work for his father, so that his projected monthly salary (from the Party only from that point onwards) became £1,500.[84]

204.  Because of the way in which the monthly salaries derive from a division by 12 of the annual figures, they give a misleading impression of precision in the planning assumptions embodied in the SLP budget documents. It is therefore more appropriate to translate these salary figures into annual terms.

205.  For Mr Reid the figures (for the period May to October 1998) are:


Salary from Party
£ 4,000
Salary from Dr Reid
£10,200
Total
£14,200
Original SLP Budget Planning Figure shown in Budget document 1
£13,200.[85]

206.  For Mr Winslow, the equivalent figures (for the period up to November 1998) are:


Salary from Party
£ 6,000
Salary from Mr Maxton
£ 6,600
Total
£12,600
Original SLP Budget Planning Figure shown in Budget document 1
£13,200.[86]

207.  Budget document 3 (January 1999) was produced after Mr Winslow`s hours for the Party increased from 15 to 30 hours a week in November 1998. Mr Reid`s total projected Party salary remained unchanged but Mr Winslow`s increased from £500 to £1,000, bringing his combined salary from both sources to £1,550 per month (ie allowing for the £550 from his contract with Mr Maxton). This was very close to Mr Reid`s projected salary from the Party of £1,500.[87] It therefore lends credence to Mr Rowley`s claim that a decision had been taken to bring Mr Winslow`s total pay into line with Mr Reid`s in order to reflect the similar (full-time) effort they were both putting in on the campaign.

208.  This interpretation of the three budget documents is broadly consistent with Mr Rowley`s account, although, for the reasons I have indicated, the figures in those documents do not in every case correspond exactly with the amounts actually paid to Mr Reid and Mr Maxton. Indeed, in my view, it would be surprising if they did, given the provisional nature of the budget documents. The differences are, however, slight.

209.  There could, of course, be other explanations as to why the SLP salary projections were adjusted in the way that they were and over the timescale in question. But I am bound to observe that no substantiated alternative explanation has been provided by the Labour Party. Both Dr Reid and Mr Maxton have disclaimed any responsibility for, or prior knowledge of, the budget documents and have declined to comment on the figures contained in them—save, in Dr Reid`s case, to say that he does not accept any link between the salary figures from the Party and those from the OCA.

210.  In her letter to me of 21 June 2000, Ms Whyte states that, in the case of Mr Winslow, the projected £1,000 (net of NICs) monthly salary contained in the May 1998 Document was based on the hope that Mr Winslow would be employed for a 33¾ hours a week. Mr Rowley counters in his e-mail of 27 July that this is "simply not the case" and that it had already been agreed that "Mr Winslow 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".

211.  The House of Commons Director of Finance and Administration has speculated that another possible explanation was that the Party originally hoped to employ the two researchers full-time but, for reasons unknown, decided in the event to take them on on a part-time basis only (hence the fall in the projected Party salaries). This interpretation of the budget documents is, of course, theoretically possible. But it is fundamentally at odds with the evidence of Mr Rowley, who was responsible for the budget and has direct knowledge of its compilation and the assumptions on which it was based.

212.  The authenticity of the first budget document has not been confirmed by Mr Upton, who says he does not recognise the figures in it and that it is "of doubtful provenance". He referred me to Mr Rowley for detailed information on all three documents, saying that it was Mr Rowley who was responsible for producing the budget. For his part, Mr Rowley, as its author, has confirmed to me that the first document is genuine. Mr Upton adds that the projected salaries bear no relation to those eventually paid to Mr Reid and Mr Winslow. This is, of course, precisely why Budget document 1 has attracted attention and why it lends itself to the interpretation put forward by Mr Rowley — because it predated the arrangement which is alleged to have been made.

213.  Mr Rowley himself counsels against attaching too much importance to the budget projections. I also note the view of the Director of Finance and Administration that, as possible evidence of cross-subsidisation, the figures could not of themselves be said to be conclusive. This of course must be so.

214.  Taking all these factors into account, my view is, however, that there is a credible relationship between Mr Rowley`s explanation and the budget documents. But whilst the match between the initial salary projections and the amounts actually paid from both sources (Party and OCA) is as close as could be expected given the preliminary nature of the former, it is not sufficiently exact to enable me to conclude with certainty that the figures, on their own, conclusively prove Mr Rowley`s contention—though they are compatible with it and certainly do not contradict it.

215.  But there is an additional, significant feature of the budget documents which causes me concern and for which no satisfactory explanation has been provided by the Labour Party, Dr Reid or Mr Maxton, namely the notes numbered 7 and 8[88] which relate to the salary projections for Mr Winslow and Mr Reid:—

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

216.  The salary figure quoted for Mr Reid is not precisely accurate (it was in fact £10,200). Even so, there appears to be no reason for this cross-reference unless some allowance was intended to be made, in fixing the Party salaries to be paid to Mr Winslow and Mr Reid, for the salaries they were receiving from non-Party sources. Those salaries could otherwise have no relevance to the Labour Party`s internal budgetary arrangements. Indeed, it is difficult to place any interpretation on the notes other than Mr Rowley`s—namely that the "the budget papers took account of the researchers` money".

217.  Mr Maxton has suggested that the relevance of the information about the researchers` parliamentary salaries to the SLPs campaign budget was the assurance this provided that Mr Reid and Mr Winslow had enough to live on. Ms Whyte similarly claims that the purpose of these notes to the budget documents was to record the fact that Mr Reid and Mr Winslow "had other means of income from their MP employer". Mr Rowley (the person responsible for the budget documents) says this explanation is untrue.

218.  I am not convinced by the explanations advanced by Mr Maxton and Ms Whyte. Information about other sources of income, earned or otherwise, available to an employee is not usually relevant for financial planning purposes. Its inclusion in the Scottish Labour Party budget documents made no sense, unless it had a bearing on the projected expenditure figures, and was intended to indicate the overall staff resources available to the Party.

219.  I also agree with Mr Rowley that Ms Whyte`s denial, repeated by Dr Reid, that the SLP received any payments from Mr Maxton or Dr Reid is disingenuous. It has not been alleged by any witness that this was the case. The thrust of the complaint is not that money passed between the two Members and the Party but that salaries paid through the OCA were used to subsidise party political work.

(ii)  What was the level of commitment to the Labour Party by Mr Reid, Ms Hilliard and Mr Winslow during the relevant periods?

(i)    Mr Kevin Reid

220.  Mr Reid`s employment over the period in question was as follows:—

Employer
Duration of Employment
Terms
Remuneration
Election bonus
Dr Reid
April to October 1998
20 hrs per week
£10,200 p.a.
Labour Party
25 May to 12 October 1998
15 hrs per week
£ 4,000 p.a.
Labour Party
12 October 1998 to end of May 1999
Full-time
£18,132 p.a.
£ 406.78

221.  Mr Reid ceased to work for Dr Reid on 12 October 1998. Since at that point he no longer had any contractual commitment to the House of Commons, it is only the period between 25 May 1998 (when Mr Reid`s employment with the Labour Party began) and 12 October 1998 which is relevant to this investigation.

222.  Dr Reid maintains that his son`s commitment to the Party amounted to about 3 hours a day until July 1998 and thereafter about 4 to 4½ hours a day, before he went onto a full-time contract. The evidence from Party officials on this point is difficult to assess because it is not always clear whether the time-frame referred to is that before October 1998 or after (when Mr Reid was no longer employed by his father). Mr Rafferty, for example, can only speak for the period from January to May 1999. Nevertheless, my impression from the evidence is that during the period from the end of May to mid-October 1998 Mr Reid was working increasingly long hours for the Party, starting very early in the morning and continuing until the early afternoon, and that even the higher figure quoted by Dr Reid probably understates the level of his son`s commitment. By October 1998 this may well have reached the point where, even allowing for breaks, it was tantamount to a full day`s work—especially given the unsocial nature of the starting time. And it was this full-time commitment which, in Mr Rowley`s eyes, was the justification for topping up Mr Reid`s Party salary to a full-time rate with money paid to him as a House of Commons researcher.

223.  Mr Reid does not deny that during that period he worked long hours, but maintains that he had the rest of the day—that is to say from early afternoon onwards—available for his Parliamentary duties. And he points to the fact that his contract with Dr Reid allowed sufficient flexibility to enable him to manage his time effectively to carry out both tasks.

224.  Dr Reid has consistently maintained that even if his son was working long hours for the Party he still had time to fulfil his duties as a House of Commons researcher. For this to be disproved it would be necessary to show that the effort put in by Mr Reid on behalf of the Party was so extensive that he could not realistically have had the time to do justice to his Parliamentary commitments, or to demonstrate that the volume of work he carried out during that period as a House of Commons researcher did not justify the payment through the OCA of a salary based on 20 hours a week. On this point the evidence is inconclusive : it cannot be said with certainty that Mr Reid could not have met both obligations. But to do so would have required four hours` work in the afternoon or evening, following a very early start to the day and a long morning. Whilst not impossible, such a régime would, in my view (shared by those working alongside Mr Reid), have been extremely tiring, and increasingly so over a period of almost 5 months.

225.  Dr Reid provided me with a binder of documents which, he said, illustrated both the volume and type of work undertaken for him by Mr Kevin Reid during the period from June to October 1998 and by Ms Hilliard from November 1998 until May 1999. The contents of the binder were summarised earlier in this report.[89]

226.  As far as Mr Reid is concerned, the documents show that, whilst employed as a Parliamentary researcher, he was indeed producing some work for Dr Reid of the kinds mentioned in the original statements of both Dr Reid and his son. Since, however, the dossier does not claim to be exhaustive but merely illustrative, it is difficult to draw any firm conclusions about whether the volume of work involved was sufficient to meet Mr Reid`s Parliamentary contractual obligation of 20 hours a week. I am surprised that Dr Reid has not sought to provide me with more comprehensive evidence of the work undertaken for him by his son as his parliamentary researcher.

(ii)  Ms Hilliard

227.  Ms Hilliard`s employment over the period in question was as follows:—

Employer
Duration of Employment
Terms
Remuneration
Election bonus
Worked as volunteer for Labour Party
April 1998 to June 1999
N/A
N/A
£ 406.78
Dr Reid
mid-October 1998 to June 1999
20 hrs per week
£10,200 p.a.
Mr Maxton
June to September 1999
25 hrs per week
£ 7,200 p.a.

228.  Although Ms Hilliard resumed work as a volunteer for the Labour Party in September 1998, she only took up her post as Dr Reid`s researcher on 1 November of that year. The period which is relevant to the complaint against Dr Reid therefore starts on that date and runs until the end of her employment with Dr Reid (or, more precisely, until the end of the Scottish Parliament election campaign on 6 May 1999).

229.  As in the case of Mr Kevin Reid, there is no disagreement that Ms Hilliard`s efforts on behalf of the Party were considerable. Witnesses variously refer to her "long, long hours" and her "arduous" pattern of shift-work. Both Mr Rafferty and Mr Sullivan describe the way in which Ms Hilliard`s contribution grew as the election approached, to the point where the former feels it had become a full-time commitment, whilst the latter thinks she would have had "no spare time". Mr Sullivan also claims to have been told by Ms Hilliard that she felt under "extreme pressure".

230.  Ms Hilliard maintains that she did all the constituency work for Dr Reid at her flat in the mornings before going to Labour Party headquarters. Certainly, as Dr Reid points out in his response, no one employed there at the time has specifically claimed to have seen Ms Hilliard at work before lunch. Ms Hilliard further argues that her contract with Dr Reid was sufficiently flexible to allow for this pattern of work and she adds that the only pressure she experienced was the sense of responsibility which came from the knowledge that her Party role was important to the campaign and demanded a high standard of accuracy.

231.  She accepts, however, that as the election approached, her workload for the Party may have increased to 6 or 7 hours a day, whilst her commitment to Dr Reid may have dipped below the contractual requirement of 20 hours a week—to perhaps 12-15 hours. Even so, she claims to have done everything required of her by Dr Reid. For his part, Dr Reid has acknowledged that the number of hours devoted by Ms Hilliard to his work may have fallen short during the pre-election period. But he did so only in his main response to the complaint, not in his original statement—in other words after Ms Hilliard gave her evidence.

232.  If anything, the statements by witnesses may understate Ms Hilliard`s efforts for the Party particularly during the latter stages of the campaign. Although not formally employed by the Party, she received a bonus payment of the same amount as those awarded to Mr Reid and Mr Winslow, in recognition of her equal (indeed, as Mr Upton put it, "enormous") contribution to the campaign. Eligibility for the bonuses was determined by local management and individual payments were calculated on the basis of at least 25 hours a week worked "in excess of contractual hours". The payment of these bonuses was intended to reflect an effort "above and beyond the call of duty", in Mr Upton`s words.

233.  Dr Reid interprets the bonus paid to Ms Hilliard as a reward for putting in at least 25 hours a week—with the clear implication that her actual hours were not much in excess of that figure. And he adds that, if that was the case, Ms Hilliard had plenty of time left in the day to carry out her duties for him. Dr Reid`s theory about the criterion for paying a bonus to Ms Hilliard is, of course, possible. But a more plausible explanation, in my view, is that the starting point for determining the size of her bonus was the number of hours she had been putting in, set alongside those worked by Mr Reid and Mr Winslow. The rationale for awarding Ms Hilliard a bonus at all was presumably that whereas the Party had no obligation to pay her for her usual, or "standard", hours, once she significantly exceeded these as the election approached, the case for treating her on a par with Mr Reid and Mr Winslow grew. This means that if Mr Reid was taken as the point of comparison (and assuming his full-time contract to have entailed 35 hours a week), Ms Hilliard was rewarded for a minimum commitment of 60 hours a week to the Party. If Mr Winslow`s 30 hours a week contractual obligation was taken as the benchmark, Ms Hilliard can be presumed to have worked a minimum of 55 hours a week for the Party. The award of a bonus to a volunteer (who, by definition, has no contractual obligation) is unusual and could be seen as reflecting the fact that Ms Hilliard was regarded by the Party as having the status of a full-time employee. The Labour Party has not responded to my request for information on whether a similar bonus was paid to any other volunteer (Annex 186A).

234.  If Ms Hilliard`s and Dr Reid`s account is accepted, Ms Hilliard would have worked a further 20 hours a week for Dr Reid (although she concedes that this did not always fully materialise as the campaign approached its conclusion). As I have observed in the case of Kevin Reid, this is not, of itself, a totally untenable workload over a very short time. Over the 4 to 6 week period in question it would, in my view, have been difficult to sustain. It is a reasonable assumption that if something had to give (the Party work being seen as both paramount and urgent) it would have been Ms Hilliard`s Parliamentary duties. The fact that Ms Hilliard found it impossible to combine her Party work with her degree course—even when the former commitment was at a lower level—goes some way to support this supposition.

235.  In his response to the complaint, Dr Reid has pointed to what he claims was the significant volume of constituency case-work Ms Hilliard handled on his behalf, particularly in the absence of his constituency secretary. Indeed, Dr Reid has argued that he could not have continued to function both as a Member of Parliament and as a Minister without the help provided by Ms Hilliard. As he did in relation to Mr Kevin Reid, Dr Reid has provided me with a dossier of documents to support this contention.

236.  The dossier confirms that while Dr Reid`s constituency secretary was off sick there was a requirement for some other person, presumably Ms Hilliard, to help with the constituency case-load. Dr Reid`s need for assistance would presumably have varied as between those periods when his constituency secretary was either frequently absent or was only working part-time (roughly, October and November 1999 and February to July 1999), on the one hand, and the period when she was permanently unavailable for work (roughly, December 1998 and January 1999). The dossier contains examples of correspondence produced during each of those three periods and the Susan Hamilton agency has confirmed that about 440 letters were typed for Dr Reid during the first six months of 1999—though not that these were drafted by Ms Hilliard. But as in the case of the material supplied in relation to Mr Kevin Reid, the dossier does not purport to comprise a comprehensive set of documents, but simply to provide examples of the kind of letters Ms Hilliard was engaged in preparing for Dr Reid. These ranged from simple acknowledgments and standard letters passing cases to the relevant department or agency, to correspondence with constituents which would have required some careful thought in drafting.

237.  It is clear that, whilst under contract to him, Ms Hilliard did carry out some constituency work for Dr Reid, particularly during the period of illness of Dr Reid`s secretary. But it is not possible to say whether, on the basis of the material supplied by Dr Reid, Ms Hilliard fulfilled her contractual requirement of 20 hours a week. As with Mr Kevin Reid, I am surprised that Dr Reid has not provided more comprehensive (as opposed to merely illustrative) documentary evidence to support his claim that Ms Hilliard fulfilled her Parliamentary obligations.

238.  Regrettably, I experienced lengthy and, in my view, unjustified delays in obtaining from Ms Hilliard the evidence which she agreed to let me have, in the form of telephone accounts, which might corroborate her contention that in the mornings she was in regular communication with Dr Reid using her mobile telephone from her flat. As she originally explained the position to me: "I would page him [Dr Reid] or, more generally, he would phone me if there was anything" (Annex 111, p. 10). In a subsequent note to the interview transcript, however, Ms Hilliard gave a somewhat different explanation: "Dr Reid was almost always the one who made contact with me". Even so, I would have expected Ms Hilliard`s mobile phone accounts to show some evidence of outgoing calls to Dr Reid`s pager. It is therefore surprising that Ms Hilliard`s solicitors told me on 23 September 2000 that no such calls were made from Ms Hilliard`s mobile phone during a critical period of the campaign, namely April and early May 1999. Nor has Ms Hilliard provided me with any details of calls made to Dr Reid from the payphone in her flat. For his part, Dr Reid has not provided me with his own telephone accounts for the period in question, despite several requests to him to let me have any relevant supporting documentation.

(iii)  Mr Winslow

239.  Mr Winslow`s employment over the period in question was as follows:—

Employer
Duration of Employment
Terms
Remuneration
Election bonus
Mr Maxton
1 June 1998 to end of May 1999
20 hrs per week
£ 6,600 p.a.
Labour Party
mid-June 1998 to early November 1998
15 hrs per week
£ 6,000 p.a.
Labour Party
early November 1998 to end of May 1999
30 hrs per week
£12,000 p.a.
£ 406.78

240.  Mr Winslow`s employment with the Labour Party coincides almost exactly with his period as House of Commons researcher (June 1998 to the end of May 1999).

241.  During that period it is Mr Rowley`s understanding, based on a statement by Ms Whyte, that Mr Winslow was "available full-time" for Party work. Mr Winslow is variously described by a number of witnesses employed by the Party at the time as having worked "very, very long hours" and as having done "a very hard year`s work"—an effort which, according to Mr Rafferty, amounted to a full-time commitment for at least the latter part of the election campaign. Indeed neither Mr Sullivan nor Mr Rafferty can see how Mr Winslow could have managed a second job in the very limited spare time he had available to him during that period. This view is borne out by both Mr McKinney and Mr Sullivan, the latter estimating that all Party workers were campaigning for between 12 and 14 hours a day during the immediate run-up to polling day.

242.  Mr Winslow does not deny that he worked long hours for the Party; indeed, he says that his commitment exceeded his contractual obligations by some 10 hours a week until his contract was extended in November 1998 and that after that date he continued to put in significantly more hours than was strictly required. But he insists that the flexibility of his arrangement with Mr Maxton still allowed sufficient time to carry out his duties as a Parliamentary researcher. If, as he concedes, his commitment to Mr Maxton fell short of the contractual stipulation during the 3 or 4 weeks prior to the election this was counterbalanced by weeks outside the campaign period when he clocked up more than 20 hours on his researcher`s duties. And Mr Maxton himself maintains that Mr Winslow at all times met the requirements of his contract as a researcher, but that when, where and how he did it was a matter for him.

243.  Both Mr Winslow and Mr Maxton have referred to the leave entitlement of 18 days which Mr Winslow had accumulated by the time of the run-up to the election. It may well have been the case that Mr Winslow and Mr Maxton could have arranged matters so that the former could legitimately have minimised his Parliamentary obligations by taking leave from his employment with Mr Maxton at the point where his commitments to the Party were at their heaviest. But even then, Mr Winslow could not, within the terms of his contract, have freed himself entirely from his duties to Mr Maxton, since the amount of leave due did not cover a long enough period. Moreover, I have been provided with no evidence as to when, or on what basis, any such arrangement was reached, or the date from which it was intended to operate.

244.  Mr Rafferty accepts that he occasionally heard Mr Winslow refer to work which he had to finish for Mr Maxton before he could take on a particular campaigning task (though he does not make clear whether this continued to be the case in the closing stages of the campaign). Mr Rafferty also refers to Mr Winslow`s "enormous capacity for work".

245.  This capacity would have been severely tested as polling day approached. The bonus paid to Mr Winslow was based on 25 hours a week above his contractual commitment of 30 hours to the Party. To fulfil completely his obligations to Mr Maxton (20 hours) on top of his Party duties would therefore have entailed working at the minimum a 75 hour week during the closing stages of the campaign, but with the added pressure of operating in a highly charged election atmosphere and meeting important deadlines. This would have been an even more punishing schedule than those adopted by Mr Reid and Ms Hilliard—if their evidence is to be accepted. Again, it is open to question whether such a workload could have been sustained for more than a few days without detriment to either the Party campaign work or the Parliamentary researcher`s duties—with the likelihood that the latter would have taken the strain.

246.  Although Mr Winslow told me that he had returned a record of the extra hours he worked to secure a bonus, neither he nor the Labour Party have provided copies of these returns or of the document which set out for employees the basis on which returns should be made. In a letter dated 15 September 2000 (Annex 199B) Mr Upton told me that he would check with his personnel manager whether the relevant information is available.

247.  Unlike Dr Reid, Mr Maxton has not taken the opportunity to provide me with any documentary or other material which might vouch for the volume of work Mr Winslow claims to have done for Mr Maxton during the period in question. Again, I must register my surprise that Mr Maxton has not responded to repeated requests to him for any relevant documentary evidence of any kind to support his account.

Opportunity for Dr Reid and Mr Maxton to comment on this memorandum in draft

248.  When I had drafted my memorandum, but prior to coming to any conclusions, I sent copies to Dr Reid and Mr Maxton on 6 September 2000 so that they could provide any further comments if they wished along with any corrections of fact. Mr Maxton replied on 20 September (Annex 84A) to say he would not be providing any further comments to me but would write to the Members of the Standards and Privileges Committee himself. Dr Reid replied on 25 September (Annex 29B) in the same terms.



80  See paragraphs 231 and 232. Back

81  In a note (Annex 209), the Director of Finance and Administration explained that, whilst the relevant percentage of earnings payable as employers' NICs would not always be 10 per cent, this was not an unreasonable figure to use for planning purposes in relation to salaries of this size. Back

82  Other than those months when special factors applied, such as those during the course of which the relevant contract was changed, so that (for example, in October 1998) two different salary rates were payable. Back

83  ie £1,100 minus 10 per cent NICs. Back

84  See footnote to paragraph 206. Back

85  Includes NICs. Back

86  Includes NICs. Back

87   The amount actually paid to Mr Reid was slightly higher than this, reflecting the fact that the full-time salary offered in the contract letter of October 1998 was a little over £18,000 (£18,132). Back

88  These appear in the first Budget document, dated May 1998; see paragraph 66. Back

89  See paragraphs 84 and 92. Back


 
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