Business Appointment Rules - Public Administration Committee Contents

7  The way forward

75.  Conflicts of interest and interchange between the public and private sectors in the UK are currently regulated through a system of voluntary rules and divided responsibilities, which—to many people—seems opaque. It does not command public confidence and needs to be reformed, particularly in the light of planned reforms to public sector delivery.

76.  An advisory committee such as ACoBA lacks the authority to impose sanctions for non-compliance with its advice, and it currently also lacks the resources to do so effectively. Creating a statutory ethics regulator would reflect the importance that the UK attaches to the ethical conduct of its public office holders, and it could have stronger powers to enforce compliance. Legislation would also provide a more systematic and fairer basis for its decisions.

77.  We recommend that the Government take the opportunity afforded by its proposed legislation on the statutory registration of lobbyists also to establish clear, statutory, conflict of interest and business appointment rules for former Ministers, civil servants and special advisers. The legislation should impose clear duties on all current and former public servants to minimise the possibility of real, apparent or potential conflicts of interest between their new employment and their most recent responsibilities within the public service. It should also impose clear duties not to take improper advantage of public office, nor to disclose "insider information" which was gained through the public office and is not available to the wider public.

78.  We recommend that all public servants should be subject to broadly similar post-public employment restrictions, preventing them from taking up employment with any organisation with which they had "significant official dealings" within the year immediately prior to leaving office. A lobbying ban should also apply.

79.   We recommend that, unless varied in individual cases, the prohibitions above should apply for two years to former Ministers, special advisers, and senior civil servants, and for at least one year for civil servants at lower grades. Appropriate civil sanctions should be available for contraventions of the legislation, and should include the possibility of sanctions against employers who hire former public servants in contravention of the rules (for example, exclusion from eligibility to bid for Government contracts). Permanent Secretaries should be accountable to Parliament for compliance with the legislation by staff from their department.

80.  Alongside the introduction of statutory ethics regulation, we recommend that the existing Advisory Committee on Business Appointments be abolished and replaced by a new, statutory, Conflicts of Interest and Ethics Commissioner following the Canadian model. The Commissioner should be politically neutral, not a former politician or career civil servant, and should be made an Officer of Parliament. The Commissioner should also have his or her own budget, and powers to employ his or her own staff, in order to ensure the independence of the office from Government.

81.  In deciding applications, the Commissioner should be supported by a pool of panel members, appointed on merit in accordance with the Commissioner for Public Appointments' Code of Practice. Each application should be decided by the Commissioner and a small number of panellists, selected from the pool.

82.  The Commissioner should have discretion to order that former public servants continue to be paid a proportion of their salary from the public purse during any enforced waiting period. He or she should also have discretion to waive, reduce or increase the statutory waiting periods up to a maximum of five years if it seems proportionate and fair to do so, and having regard to the risks of actual or perceived impropriety, but must publish his or her reasons for varying the waiting period in any particular case. In deciding whether to vary the waiting period, the Commissioner should be required to have regard to the same matters identified by the Canadian legislation (as set out in Annex A).

83.  To further enhance predictability for applicants, the Commissioner should be required to publish clear guidance on the procedures which he or she will follow when considering an application, and the expected timescale for each stage of the process. Target timescales should be consistent for all former public servants, regardless of whether they were Ministers, special advisers or civil servants. The Commissioner's decisions in individual cases, and his or her reasons, should also be published when the appointment is taken up. Applicants should have a corresponding duty to notify the Commissioner when they take up an appointment. The Commissioner should be required to monitor compliance with his or her decisions, and to report annually to Parliament on the cases considered during that year, any contraventions of the rules and any sanctions imposed.

Other powers

84.  The Canadian Conflict of Interest and Ethics Commissioner also has powers similar to those of the Prime Minister's Adviser on Ministers' Interests, providing confidential advice to the Prime Minister and public office holders with respect to their obligations under the Conflict of Interest Act.[77]

85.  Powers for a UK ethics regulator to provide advice to public servants on the handling of their private interests would overlap with those of the Prime Minister's Adviser on Ministers' Interests, about whom we expressed concerns in an earlier Report. We recommend, therefore, that the new Commissioner should assume this role as well, with the power to instigate investigations into breaches of the Ministerial Code on his or her own initiative.

86.  The new Commissioner's role would also bring into question the continuing role of the Committee on Standards in Public Life (CPSL), which is also due for triennial review. We recommend that the Government consider whether it may be expedient to merge the functions of the Committee on Standards in Public Life, of investigating and reporting on general questions of ethical conduct in public life, into those of the new Commissioner.

87.  The Parliament of Canada Act also provides for the Canadian House of Commons to assign functions to the Commissioner in relation to "governing the conduct of its Members when they are carrying out the duties and functions of their office as Members of that House", although the Act makes clear that it should "not be interpreted as limiting in any way the powers, privileges, rights and immunities of the House of Commons or its members".[78] The Canadian House of Commons has adopted a Code of Conduct for Members of the House of Commons, which is not itself statutory but forms part of the Standing Orders of that House.[79] The Conflict of Interest and Ethics Commissioner has been charged with providing advice to Members and investigating alleged breaches of the Code: a role similar to that of the Parliamentary Commissioner for Standards in the UK.

88.  Article 9 of the UK's Bill of Rights makes clear that "freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament".[80] It would not be appropriate to attempt to legislate in the UK with respect to the conduct of Members of either House of Parliament, since to do so could invite the law courts to adjudicate on Members' behaviour. We do not propose that the new statutory ethics regulator should take on any of the functions currently performed by the Parliamentary Commissioner for Standards or his equivalent in the House of Lords, or of the Standards and Privileges Committee.

77   Conflict of Interest Act section 43 Back

78   Parliament of Canada Act (RSC 1985, C. P-1), section 86(5) Back

79   Code of Conduct for Members of the House of Commons, paragraph 34  Back

80   Bill of Rights 1689 Back

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Prepared 25 July 2012