Examination of Witnesses (Questions 1
WEDNESDAY 28 MARCH 2001
1. Good morning. The inquiry this morning is
into the alleged misconduct affecting a witness before the Environment
Sub-Committee. Gentlemen, would you like to identify yourselves
for the record?
(Lord Cranbrook) I am Lord Cranbrook. I am Chairman
(Dr Sills) I am Richard Sills and I am the Chief Executive.
2. Do you want to say anything by way of comment
to start with?
(Lord Cranbrook) I should just like to say, Chairman,
that I have written two letters to you in response to the letter
from your Clerk dated 12 March. I wrote to you on 16 March and
on 27 March. In those letters, Chairman, I have made clear that
the contempt was inadvertent and unintended. At the same time
I have offered sincere apologies on behalf of Entrust, which I
represent here today, and I hope that this full and unreserved
apology is accepted by you and your Committee.
3. Thank you very much. Could you just explain
to us how you see now developing Entrust as a much more open body
which will accept criticism and not be as defensive as you appear
to have been?
(Lord Cranbrook) I have a feeling, Chairman, that
the appearance may be more than the reality. We have made Entrust
an extremely open body, Entrust has a website on which information
is very freely available, but at the same time we take very seriously
your criticism that we have failed to appear to have this openness.
We shall seek ways to ensure that this appearance is changed.
4. Lord Cranbrook, can I just clarify an issue
relating to Dr Aickin's appointment or otherwise to the Improvement
Panel. I am just looking at the correspondence which we have had.
When you appeared before us on 28 November, in answer to a question
that you had invited him to join the Improvement Panel Dr Sills
said he had still not accepted it in writing. Yet when Dr Aickin
appeared before this Committee six days previously when he was
asked the question "Are you now a member of the Improvement
Panel?" he answered "yes". Can you just clarify
precisely what his status was at that time?
(Lord Cranbrook) Let me just step back for a moment.
The Improvement Panel is part of the communications strategy of
Entrust. The Improvement Panel has perhaps a rather grand name
but the aim of it under the control of the communications manager
was to ensure that we were listening and learning from external
perceptions from those stakeholders, broadly interpreted, in the
Landfill Tax Credit Scheme other than EBCO. The Improvement Panel
was appointed in May 2000 for a trial period of one year under
the control of the Head of Communications who was responsible
for the recruitment and for the management of that under delegated
authority. It had always been anticipated there could be three
members. There were conversations between the Head of Communications
and there was an exchange of e-mails dated, as far as I recall,
6 October in which the offer was made but that was not followed
up. Dr Aickin had not written formally a letter of acceptance
and although Entrust had begun proceedings to develop a contract
with him there had been no further steps by the time he gave evidence.
5. You referred to the e-mail of 6 October,
just to quote from it, it said "I would like to confirm your
appointment as a member of the Entrust Improvement Panel as of
today, 6 October". I am not entirely clear, because you have
talked in terms of an offer and yet the e-mail you have just referred
to confirms the appointment. Can you just clarify for us was that
Entrust saying you have been appointed, in which case the wording
seems rather strange if it was, in fact, just an offer?
(Lord Cranbrook) We have consulted an employment lawyer,
but we believe that in fact there would exist a contract as a
result of that e-mail.
6. There would?
(Lord Cranbrook) There would.
7. Yes, that would be my view.
(Lord Cranbrook) There was an exchange between the
Head of Communications and Dr Aickin and when I gave evidence
I was not properly informed of Dr Aickin's status in the light
of that e-mail.
8. You were not aware that in fact he had been
given the job by virtue of that e-mail?
(Lord Cranbrook) At the time that I gave evidence
that is correct.
9. Right. Could you then explain to us what
it was that led you to decide to terminate the appointment, given
that you have just told us that an employment lawyer has advised
you that did constitute employment. Between you giving evidence
on 28 November when you were asked "would you invite him
again on the understanding that it was still a job offer"
and you saying "I think so", what was it that he had
done subsequently to 28 November, which after all was after his
draft memorandum had come to our attention and you had been questioned
on it, that led you to terminate his employment?
(Lord Cranbrook) On 23 November, if I remember correctly,
immediately after having given evidence to you he sent an e-mail
to the Head of Communications, again with whom he was negotiating,
which contained a draft letter which he was proposing to send
to The Guardian outlining his feelings under the circumstances.
In that e-mail he said that for the time being he was not intending
to pursue his appointment with the Improvement Panel.
10. When did you become aware of that correspondence?
(Lord Cranbrook) I think, to be frank, I became aware
of that correspondence when I reviewed the whole situation.
Chairman: When was that?
11. Was it before or after 28 November?
(Lord Cranbrook) At the time of 28 November, as I
said, I had understood that an offer had been made.
12. The correspondence that you have just referred
to that Dr Aickin was proposing to send after he gave evidence
on 22 November, were you aware of that before?
(Lord Cranbrook) The correspondence was with the Head
of Communications and I was not aware of it at the time.
13. So when Dr Sills said in answer to the question
"Would you invite him again" the reply "I think
so on the basis that, yes, he is a critic, but he is a strategic
critic rather than a critic on the tactical details of the scheme",
you made that statement not being aware that he was proposing
to write to The Guardian, is that correct?
(Dr Sills) That is correct. Indeed, what my Chairman
has just said is that at the end of that e-mail he said in the
draft that he had written today to Entrust to inform them. Now,
that letter has not been traced and I do not believe that it was
ever sent. Nevertheless, the uncertainty is implicit in the e-mail
which we subsequently found.
14. You mentioned, Lord Cranbrook, in your first
statement about openness and perhaps changing the public's perception
of Entrust. Are you going to be quite open in the changes you
make to your constitution and regulation at Entrust? Dr Aickin
seemed to think you were able to do this at a whim.
(Lord Cranbrook) Sir, we are, as you know, a private
company and subject to Companies Law. All the changes that we
have made to our constitution have been made under Companies Law
and are public in so far as they appear on the Register in Companies
House. I thinkI may be wrong in my recollectionthat
Dr Aickin made that clear in a subsequent exchange.
15. I asked him the question whether Entrust
had a remarkable ability to change their constitution and regulations
at a whim it seems and Dr Aickin replied "That is the conclusion
that I came to". What I am saying is have you changed that
culture? Yes, you are a private company but you get all your income
(Lord Cranbrook) We get our income, Sir, I suppose
you can say, through taxes but we get our income actually from
an administration charge on the environmental bodies.
16. It comes directly from the Landfill Tax,
does it not?
(Lord Cranbrook) It comes from contributions made
by landfill operators to environmental bodies which the landfill
operators are thereby able to claim as a rebate against the tax
that they would otherwise pay.
17. It is the levy that is laid down by Government
that they have to pay when they dispose on landfill sites. All
I am saying to you is even though you say you are private you
are a public body and I want to know whether you have changed
and whether your changes to the constitution and regulations are
open and in the public domain? They should be.
(Lord Cranbrook) They are, Sir, they are in the public
(Dr Sills) Moreover, as we said to the Committee during
our evidence, Customs does attend as an observer at all our major
meetings including the board. It is only the board meetings that
have the power to recommend and pass changes to the constitution.
18. They have been present at every board meeting?
Every board meeting?
(Dr Sills) They have missed one or two but that is
(Lord Cranbrook) Customs is also represented at the
management committee meetings and also at the operations executive
19. Each one?
(Lord Cranbrook) Each one.