CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1762 -i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Public Administration Committee

Business Appointment Rules

Tuesday 6 March 2012

Sir Christopher Kelly

Professor David Miller and ChandraSHekhar Krishnan

Evidence heard in Public Questions 1 - 155

USE OF THE TRANSCRIPT

1.

This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

The transcript is an approved formal record of these proceedings.

Oral Evidence

Taken before the Public Administration Committee

on Tuesday 6 March 2012

Members present:

Mr Bernard Jenkin (Chair)

Alun Cairns

Charlie Elphicke

Paul Flynn

Robert Halfon

David Heyes

Kelvin Hopkins

Greg Mulholland

Lindsay Roy

________________

Examination of Witness

Witness: Sir Christopher Kelly, Chair, Committee on Standards in Public Life, gave evidence.

Q1 Chair: May I welcome you to this first witness session on our report on the Advisory Committee on Business Appointments? Please could you identify yourself for the record?

Sir Christopher Kelly: My name is Christopher Kelly. I am the Chairman of the Committee on Standards in Public Life.

Q2 Chair: In 2000, the CSPL said that the system of supervising business appointments, the Business Appointment Rules, appeared to be working well. Is that still your view?

Sir Christopher Kelly: I would like to begin by saying that although my committee has discussed this issue on a number of occasions, we have not done a full evidence-based inquiry on it, so when I express a view it is my view and not necessarily the view of the committee. I am not saying that because I have any reason to think they disagree with me, but I just wanted to make it clear that they are my personal views.

Q3 Chair: Is there any reason why the CSPL has not treated this matter with as much urgency as, say, party political funding?

Sir Christopher Kelly: I don’t think it is true to say we have not treated it with urgency. It was the subject of our last meeting. We had a full discussion of lobbying in the context of preparing our response to the Government’s consultation paper on lobbying, but when we do inquiries we decide what to do in the light of a number of things, including what other people are doing in the area. The fact that your Committee has already done one inquiry on lobbying and is now doing this one on ACoBA seems to me to be relevant to the way in which we spend our resources.

Q4 Chair: Did you discuss the fact that you were coming in front of us this morning?

Sir Christopher Kelly: I did mention that fact, yes.

Q5 Chair: So there was some discussion?

Sir Christopher Kelly: Indeed. Yes.

Q6 Chair: We understand the caveat that you attach to what you are saying. Is it still your view-though that view possibly pre-dates your tenure of office-that these Business Appointment Rules are working well?

Sir Christopher Kelly: It is my view that there is a distinct shortage of evidence in this area. I think if we were to be starting from scratch, we would probably think that some body like ACoBA was the right way to deal with these things, for reasons I can expand on. Whether or not it is actually working effectively depends on your view about two things. One is whether the rules are right and the other is whether the rules are being implemented robustly and correctly. As far as whether the rules are right is concerned, I know this Committee very much welcomes the changes that were made to the rules just at the end of the last Administration and at the beginning of this one. As far as how effectively they are implemented is concerned, I think one of the questions that was discussed at one of your previous sessions was whether the committee knows whether or not its recommendations are actually being implemented, and there there seems to be a distinct lack of evidence other than the absence of the media having identified instances where the recommendations were not accepted.

Q7 Chair: As the CSPL has not attached a high level of urgency to this question, can we take it that you think that this is working well?

Sir Christopher Kelly: No, I did not say that we did not attach a high degree of urgency. In fact, I think I said the opposite. The view of the committee is that it is extremely timely for your Committee to be conducting the inquiry that you are conducting and, indeed, if you had not been doing so, I think it very likely that we would have done one ourselves.

Q8 Chair: So you think the rules are not working well?

Sir Christopher Kelly: I think there are grounds for wanting to uncover more of the evidence. My committee prides itself on being evidence-based, and on this central question of whether or not ACoBA’s recommendations are actually observed, there is a distinct lack of evidence. It is also important to remember that ACoBA only sees the most senior appointments, and there is quite a lot of, or there ought to be quite a lot of, interest in the way in which Departments themselves operate the rules for other appointments. One of the things, again, I know my committee is in favour of is the move that ACOBA is now going to make towards having what is described as informal audit of the processes within Departments to observe the Business Appointment Rules. The question I would raise is whether or not there are sufficient resources in ACOBA to do that job properly.

Q9 Chair: That is an interesting point. Not to be too unkind, you are interested to know whether we think they are doing well.

Sir Christopher Kelly: No, I am saying that before reaching the sort of evidence-based conclusions I would want to reach, I would want to see more evidence. Even now there are things about ACoBA that could be improved.

Q10 Chair: Do you think the public are right to be concerned about what is known as the revolving door?

Sir Christopher Kelly: Yes, because there are real questions to answer about whether the phenomenon of the revolving door involves instances where people’s behaviour before leaving employment is altered in a way that is not in the public interest in anticipation of future employment or, post public office, commercial or other organisations are given unfair advantages over others as a result of the knowledge or contacts of people they employ post-office.

Q11 Chair: What, in your view, might need to be changed?

Sir Christopher Kelly: You have to identify what the nature of the concern is. As I say, I think it is those two things.

Q12 Chair: What do you think the nature of the concern is?

Sir Christopher Kelly: The nature of the concern that people have about lobbying is twofold. One is that lobbying may be taking place in secret in a way that people do not know about, and if you do not know that the lobbying is taking place and who is involved, then if you have a different point of view to that which is being lobbied for, you do not have the opportunity to make your views or your alternative interpretation of the facts known. The second major concern is this issue of people being given unfair advantage because of previous contacts or because they have been donors.

Q13 Chair: Sorry, I missed that last bit. Because they have been…?

Sir Christopher Kelly: Because they have been donors to political parties. It is a question of access.

Q14 Chair: Right. We are not discussing donors; we are discussing the Business Appointment Rules.

Sir Christopher Kelly: As I say, the nature of the concern is about access, and preferential access, in principle, can come about for a variety of reasons, of which previous employment is one and donations to political parties is potentially another.

Q15 Chair: Sorry, I do not quite understand what the Business Appointment Rules have to do with political donations.

Sir Christopher Kelly: I am sorry if I have been unclear. I think the concern is about access. You asked me what I thought the concerns were. One of the principle concerns is about access.

Q16 Chair: But how do donations to political parties relate to the revolving door?

Sir Christopher Kelly: It does not relate directly except they are both there on the issue of access.

Q17 Chair: Our inquiry is about the revolving door.

Sir Christopher Kelly: I understand that.

Q18 Chair: What sort of changes do you think we should be having to consider, given that there is this public concern?

Sir Christopher Kelly: If you take the two major concerns in order, the first is that lobbying is taking place in secret; I think it is a major advance that the Departments now have to publish a list of ministerial meetings and who they have seen. That leaves a potential lacuna in the sense that contacts can take place other than in official places. My understanding is that those contacts, if they are relevant to the official business of the Minister, have to be reported to the Department but they are not put on the register in the same way as official contacts are. In terms of access, one of the main things that has already been done is the standard two-year ban on lobbying by former Ministers or senior civil servants.

Q19 Chair: Do you think this is having an impact on public trust in the governmental process?

Sir Christopher Kelly: I do not know the answer to that question.

Q20 Chair: Has CSPL done any opinion research on this subject?

Sir Christopher Kelly: Chairman, I am sure you are aware that every two years we do research on trust in Government. We have not done any analysis of the relationship between what happens in relation to lobbying and public confidence, nor have we done a survey since the two-year ban on lobbying took effect.

Q21 Charlie Elphicke: I was interested in your focus, Sir Christopher, on access being the key issue that lies at the heart of this. It is a key issue in donations, which your committee investigated fairly exhaustively, but it is also an issue in terms of who you know. For example, let’s say that you are at the Treasury and Director of your particular area, and a former work colleague who had recently retired and gone to the private sector would pick up the phone and say, "I’m just wondering what is happening here," and would suddenly gather information. They have access, so these rules should apply arguably to civil servants and to former Ministers, because it is the access that is at the heart of that particular concern.

Sir Christopher Kelly: I agree. It is a different code, but my understanding is that the rules do apply to senior civil servants.

Q22 Charlie Elphicke: Do you think it would be right for your committee to investigate this whole access issue that we are looking into, and will your committee take that forward and have a proper evidence-based, detailed investigation?

Sir Christopher Kelly: It is one of the issues that my committee might decide to undertake depending on the outcome-among other things-of this Committee’s deliberations.

Q23 Paul Flynn: You touched on the fact that one of the great concerns of this Committee is not only the effect of what former Ministers, former senior civil servants, former admirals, generals, do when they leave an appointment but the great danger of how their judgments will be affected while they are actually in post, and will those judgments be affected by the possibility of future riches, future employment, in other bodies? You quote, as possibly the worst example of this, that the obvious one is "you wouldn’t want a procurement Minister immediately going to an organisation from which they have procured services". Now, if that should happen-if we had a procuring Minister who had settled a deal, involving possibly billions of pounds, and then, within a matter of months, works for one of the big companies who is the beneficiary of that award of contract-what should be done about it? Should it be our job to investigate it? Should it be your job?

Sir Christopher Kelly: If the advisory committee is working as it should and has all the facts in front of it, then if the facts were as you described I would find it extraordinary if the Advisory Committee were to approve such an appointment within two years of that Minister or senior civil servant leaving office.

Q24 Paul Flynn: You are about to hear some surprises, then. The other question you just touched on was the question of the Ministerial Code. We now have a Code in which Ministers have to declare things. There have been a number of instances where Ministers have declined to declare, for instance, hospitality, on the basis that on certain days they eat privately and other days they eat ministerially. The case involved-it has had some publicity-a Secretary of State who went to a dinner run by a lobbyist at which an applicant to his Department was one of the guests, and his defence was that that day he was eating privately, using his private stomach to digest the food, rather than using his ministerial stomach to digest the food. Are you happy with that arrangement? What I think we find is that when any new rule is applied, Ministers find a way of getting round it. Should you be investigating it? Should it be your responsibility or our responsibility?

Sir Christopher Kelly: As it happens, during the 30 years I was a civil servant, which is now some time ago, it was not my experience that Ministers in general did try to find ways round it, although I am aware, as you are, of instances where things have happened. No, it is not our job. We are not a committee whose job it is to look at individual cases. That is the responsibility of the Prime Minister’s Adviser on Ministerial Interests, about which I am aware there are other issues, which you have explored with the past incumbent.

Q25 Paul Flynn: Are you aware that the holder of the office has resigned and he has expressed his unhappiness about a major investigation involving the Secretary of State for Defence, and he expressed a view that he-Philip Mawer-should be investigating it as the sole enforcer of the Ministerial Code and not have a rushed investigation put through, possibly for political reasons, by the senior civil servant? Now, that is the view of the adviser, who has resigned and been replaced. Again, are you concerned, as the Committee on Standards in Public Life, when a Government-we have not reported on this-could possibly put someone in who was not going to challenge them in future-who was not going to insist on his right and his full independence?

Sir Christopher Kelly: I am aware of the view expressed by Sir Philip Mawer, because I read the transcript of your session with him and I agree with him. The Adviser on Ministerial Interests was created as the result of the recommendation of my Committee, and on this occasion I think he should have been employed. Indeed, I think it was almost certainly a breach of the Ministerial Code that he was not employed1.

Q26 Paul Flynn: That might be helpful. We have not prepared a report on it, but you suggest that we do what in our report? What should we say on this and what should we recommend?

Sir Christopher Kelly: The view of the committee is first of all that there is advantage in the post existing. If the post is going to exist, then it has to be used in the way that is envisaged. The committee’s view also is that-as was expressed when they made the initial recommendation-just like the Parliamentary Commissioner, the adviser should be able to initiate inquiries of their own where there is a prima facie case to investigate, whereas at the moment he is only able to do so at the request of the Prime Minister.

Q27 Chair: ACoBA is operating in an increasingly complex environment, because the days when people joined the Civil Service for a whole career and then only left the service once are becoming rarer. It is becoming more common for people to leave mid-career or even leave for a period and then come back. Perhaps that is why it is called the revolving door. Isn’t that a good thing?

Sir Christopher Kelly: Yes.

Q28 Chair: If we create rules that, for example, prevent somebody of working age from obtaining a livelihood if they leave the service, isn’t that a bad thing?

Sir Christopher Kelly: I agree that what is needed in these circumstances is a proportionate approach that takes a balance between people’s right to earn a livelihood and the public interest, which is why I said at the beginning if we were going to create a new organisation from scratch I suspect it would look quite a bit like ACoBA because of their ability to look at the facts of individual cases and make a proportionate recommendation based on those facts.

Q29 Chair: Do we think it is a good thing that the Civil Service is able to recruit people from other walks of life into the Civil Service?

Sir Christopher Kelly: I am wholly in favour of interchange.

Q30 Chair: So inevitably we have a system that is going to inherently contain more potential conflicts of interest?

Sir Christopher Kelly: It is certainly the case that as interchange increases there will be more issues where a balance has to be struck between preserving the public interest and the desire to promote interchange. It is quite clear that, in the round of ministerial appointments of people who were not previously parliamentarians, there have been some issues. My understanding-and I have not been close to this-is that the issues arose as much as anything from the fact that the rules were not properly explained to them at the point at which they were appointed. I would, however, not support any notion that the Rules should be relaxed in order to allow such people to be appointed.

Q31 Chair: We know of one case, don’t we, where the Government hoped to appoint a Minister who eventually refused because of the requirements?

Sir Christopher Kelly: I am not sure what that case is.

.

Q32 Chair: But that is inevitable, isn’t it?

Sir Christopher Kelly: If there is a conflict of interest, then that is inevitable.

Q33 Chair: For a senior businessman with diverse interests, who is required not only to declare them but to divest himself of control of those interests, it is inevitably going to create those kinds of problems, isn’t it?

Sir Christopher Kelly: I imagine it is, yes.

Q34 Chair: In the private sector it is quite common to send people on gardening leave for a period before they take up a job with a competitor. Do you think ACoBA is going to need to be able to make that kind of recommendation?

Sir Christopher Kelly: My understanding is, first of all, that there is a standard three months of gardening leave before taking up an appointment on leaving the Civil Service. Secondly, I don’t think it is within ACoBA’s remit to say that anyone should do nothing, but it is certainly within their remit to recommend that an individual not take up a particular job for up to two years.

Q35 Chair: They have that power, but they do not have the power to recommend or to suggest that a civil servant leaving-perhaps someone who has come in on a short-term commission-cannot return to the original industry that he was in because of potential conflicts. Shouldn’t the Civil Service be prepared to pay compensation to people in those circumstances?

Sir Christopher Kelly: I am not familiar with the details as to whether or not the three months-

Q36 Chair: Well, two years is a very long time.

Sir Christopher Kelly: Yes, two years is a long time, but my understanding is that there is a standard three months’ gardening leave on leaving a senior position in the Civil Service. If your question is whether that applies to short-term contracts, I am afraid I don’t know the answer.

Q37 Chair: I am asking whether you think it should, or for longer, because if you want to be able to attract the right people into the Civil Service-

Sir Christopher Kelly: It depends on the facts of the case. Having been given a public office upon release of which, if you go straight back to your former employer, you are then in a position of having knowledge that provides commercial or other unfair advantage, then you should not be allowed to do that. If recruiting people requires compensation for that period and that is the cost-effective solution to the problem, then in my view that should be contemplated, but I think it would depend on the facts in each individual case, rather than necessarily being something that you make a rule about.

Q38 Kelvin Hopkins: Isn’t it absolutely essential that public servants should be recruited whose primary motivation is serving the public good? They are different kinds of animals to those who are looking after themselves or, indeed, promoting a company for private profit. A civil servant who perhaps is seconded to the private sector to get some experience but essentially their loyalty is to public good and to Government, the state, and the electorate is very different from those people who are business people who come in, perhaps on a contract to do a job, and then go out again. There are two different types of animals. Isn’t it essential that we have people whose primary motivation is serving the state, the electorate, and the public good rather than Mammon?

Sir Christopher Kelly: People have different motivations. It is certainly important that in the public service we recruit people who have the values that we think are important in the public service, and, indeed, one of the points I feel quite strongly about is that, in selection procedures, commonly people do not pay sufficient attention to this issue of values. If, Mr Hopkins, the question is: do I believe that anybody who has worked in business is incapable of understanding where the public interest arises and how to behave effectively and appropriately in public office, no I do not share that view.

Q39 Paul Flynn: Isn’t one of the problems that we insist on this ridiculous rule that civil servants have to retire at a very young age, often when they are reaching the peak of their experience, their powers, approaching the prime of life in their 70s, especially when we have got this wonderful example set by Her Majesty the Queen, who is doing a full-time job in her 87th year? Forcing people to retire at that very young age means that people plan for two careers and, because of that, the potential for misusing their experiences when in office or outside office is greater. They should be allowed to carry on in a respectable working life. I made this comment yesterday and a lady next to me, one of the baronesses, said to me, "I’ll be 93 next week." The idea that people should retire in their mid-60s seems to be crazy from all the evidence we have of people who are able and have a great deal to offer and suddenly their careers come to an end.

Sir Christopher Kelly: I am wholly in favour of people carrying on working, as indeed I have, having left the Civil Service at the age of 53. I am not necessarily in favour of reform, but I suspect that part of the answer to your question, Mr Flynn, is age discrimination legislation.

Paul Flynn: Indeed, yes.

Sir Christopher Kelly: But I don’t think I am in favour necessarily of people staying in the same position for a long period. On the whole, most organisations benefit from having the right balance of experience and change so that fresh ideas and energy and so on can be brought in.

Q40 Robert Halfon: Do you think that there is sometimes a too cosy relationship between headhunters and civil servants? For example, there are cases of top headhunters recruiting pretty quickly heads of human resources in various Civil Service Departments, who then come to work for the top headhunters. The headhunters, surprise surprise, then get the procurement contract from the Government Department for recruitment. Do you think that is something that needs to be looked at?

Sir Christopher Kelly: I don’t know that unaided I would have thought that the relationship between headhunters and former civil servants was a major issue. I think the point you make is a general point rather than a specific one.

Q41 Robert Halfon: A number of Government Departments spend huge amounts of taxpayers’ money employing, at vast cost, headhunters, and those headhunters have within them senior civil servants who used to do similar jobs, human resources-type jobs, in those Departments, and there are a few headhunters that seem to get the contracts all the time and are paid huge amounts of money for their tasks. Surely that is something that needs to be looked at: the relationship between recruitment civil servants who then go and get jobs in headhunters, and the headhunters that get procurement contracts? It is no different to lobbying. Surely, that is something that needs to be examined and there should be much tighter rules.

Sir Christopher Kelly: If there is indeed evidence that contracts are being let in a way that is unfair, then, of course, that should be looked at.

Q42 Robert Halfon: Do you think there should be the same kind of rules for headhunting companies as you or others are proposing for lobbying organisations?

Sir Christopher Kelly: It had not occurred to me before you made the suggestion.

Q43 Robert Halfon: Going back to ACoBA, when we had Lord Lang at the Committee, he said-and I was astonished at this-that no records at all were kept of people the committee had spoken to and who had accepted his advice or not accepted his advice. Do you think it should be a matter of public record that, when the committee advises an individual about their potential appointment, it should immediately be available for the public to see?

Sir Christopher Kelly: My understanding of the situation is that the committee only publishes the advice that they have given if and when an appointment is taken up, and they do not publish the information if they have given advice that an appointment is unsuitable and it is not taken up, although I did see that when Lord Lang gave evidence he said that in future they would be publishing the number of cases of that kind. There is a weakness in the arrangements from the point of view of ACoBA’s public relations in terms of convincing people that actually they are doing the robust, independent job you would want them to do. That is to say my understanding-and again, Lord Lang, when you see him again, will be much better placed than I am-is that there are quite a lot of instances where people seek advice-sometimes informally, sometimes more formally-and then, if they get a negative reception, withdraw their application for approval. When that happens it does not appear in the ACoBA statistics, so it might look as if ACoBA is simply nodding through every inquiry.

Q44 Robert Halfon: Surely there is a difference between formal and informal? If formally the committee goes to an individual and says, "We think this is right," or "We think this is wrong," why can’t that be a matter for the public to see? Surely that should be on record and should be published on their website.

Sir Christopher Kelly: It should be on record that somebody has thought about applying for a job, has taken advice, has accepted that advice and has not taken up the job. That should be on the public record.

Q45 Robert Halfon: For both accepted and not accepted?

Sir Christopher Kelly: Oh, if it is not accepted? My understanding is that ACoBA’s advice is published when jobs are taken up, and therefore if they gave advice that an appointment should not be taken up and somebody did so nevertheless, then that advice should already be on the public record.

Q46 Robert Halfon: Well, it is not. To go back to the evidence, Ian Lang said that they do not keep any records of whether people accept their advice or do not accept their advice. Given it does not have any sanctions, the best way to make this committee effective is just to publish everything openly on their website.

Sir Christopher Kelly: I am sorry; you are confusing me. The committee know when they have given advice. They presumably can see if someone has actually taken advice and has been advised against. They will publish that advice already if somebody then takes up the appointment. The weakness, I think, is in following up whether or not appointments have actually been taken up, because I think what Lord Lang said to you was that the only way they know what happens in the real world is by reading the media.

Q47 Robert Halfon: Surely they should be able to find out from the individual concerned that they have spoken to whether or not they have taken-

Sir Christopher Kelly: As I said at the beginning, I think there is a case for producing more evidence in this area.

Q48 Chair: So you think ACoBA should perhaps have investigatory powers?

Sir Christopher Kelly: Not necessarily, is the answer. Lord Lang, I think, told you that his understanding is their advice is almost always accepted. If that is the case, then I would not think that there is a strong case for giving them more formal statutory powers.

Q49 Robert Halfon: Although he said that, he also said that he did not know how many people had not accepted advice because they did not keep records.

Sir Christopher Kelly: Exactly. I was going to come on to that. I would think the first step is to discover whether or not there are lots of cases where they had given advice that was then ignored. If that were proved to be the case, then I would, myself, think that was beginning to make the argument for giving ACoBA statutory powers. If that was not the case and the evidence showed that the original intention of Lord Nolan’s committee when they made the recommendation was sufficient-that actually the power of transparency and the loss of reputation would dissuade people from ignoring the advice of ACoBA-then I would not, myself, think that it was a proportionate response to introduce statutory powers.

Q50 Robert Halfon: Just to confirm that: you would accept more transparency and you think that would be enough, and that statutory powers to stop people taking up appointments are not necessary?

Sir Christopher Kelly: No, I think the original notion was that transparency was enough. There is a case for examining whether that assertion-that transparency is enough-is actually borne out by the facts.

Q51 Robert Halfon: They are not transparent. People do not really know what is going on, who they are seeing, who is accepting, unless it comes out in the media. People cannot just go and look at their website. That is the kernel of the issue.

Sir Christopher Kelly: You could go and look at their website to see what advice they had given, which ought to include advice they had given that a post not be taken up when it has, in fact, been taken up.

Q52 Chair: Should an individual still be able to go to ACoBA and take private advice? Isn’t that informal advice important, or should ACoBA be publicly accountable for all the advice it gives?

Sir Christopher Kelly: I see no reason why someone thinking about what they should do post public office should not be able to have a conversation with the staff at ACoBA about what their understanding of the rules means that they should-

Q53 Chair: That would remain confidential?

Sir Christopher Kelly: I do not see why it should not.

Q54 Charlie Elphicke: Sir Christopher, a month and a half ago the Sunday Times reviewed this whole issue about the so-called "revolving door". I do not know if you read that report. It was on 15 January 2012 and it says, "Loophole lets former Ministers hide links to business". I am not going to mention any names, because that would be wrong, but some of the cases mentioned there are a cause of concern. You have a Defence Minister who, it is said, goes off to work for a firm to whom he handed a £1 billion contract. Do you think cases like that would cause understandable public concern as to whether the system was working?

Sir Christopher Kelly: I am not aware of the full facts of that case, so I cannot comment on the individual case.

Q55 Chair: Such reports are what give rise to public concern.

Sir Christopher Kelly: Absolutely. If it were the case that someone had a major role in letting a £1 billion contract and then, within a short period of time, went and worked for the company to whom the contract had been let, then I would come to a conclusion that the system was not working properly and I would share the concern that the Chairman says the public might have.

Q56 Charlie Elphicke: If that was an isolated case, just a one-off, then you might think that was just one thing, but unfortunately this article talks about quite a number of cases. There is a former Business Secretary, who we will not name, who has a lot of business clients for his large business; a former Justice Minister has a consultancy offering parliamentary advice; a former Health Minister offers advice on health matters; a Treasury Minister advises on how to build up your business; a former Work and Pensions Secretary advises on strategy and governance; a former Home Secretary offers public sector and central Government advice; and a former Schools Minister advises on the use of technology in education and the training sector. Now, given the sheer quantity of these kinds of cases, would you not think it is actually understandable public concern and ought to be investigated more thoroughly than perhaps it has been so far?

Sir Christopher Kelly: I am not surprised that people who have spent most of their working lives in and around Government and the legislature should, when seeking future employment, find that one of their main skills is precisely providing advice to people about how Government and the legislature works.

Q57 Charlie Elphicke: Access.

Sir Christopher Kelly: I do not see any difficulty in principle with people doing that. When it gets down to access and lobbying I feel differently about it. There is now an absolute ban on lobbying for two years in the sense of going to see one of your former colleagues. Speaking personally, I would feel more comfortable if the absolute ban on that sort of lobbying, as opposed to providing general advice about how to approach Select Committees, Ministers, whatever, was longer than two years, but my understanding is that the legal advice is that it would be difficult to justify a ban of longer than two years for reasons of restraint of trade. My understanding also is that legal advice has not been tested in the courts.

Q58 Charlie Elphicke: My constituents have a deep concern that there is, for the high-ups, a revolving door that is oiled by sleaze. Don’t you think that we should have far more transparent rules on this and take a far tougher approach to uphold public confidence?

Sir Christopher Kelly: Where would you want the toughening?

Q59 Charlie Elphicke: In terms of putting ACoBA on a statutory footing, fully transparent decisions on either side of whether they say yes or no, with reasoned explanations as to why there are no conflicts of interest, and no access being granted to the few at the expense of the many.

Sir Christopher Kelly: As I have said, I am not at all opposed in principle to ACoBA being put on a statutory basis, but, rather than create unnecessary legislation, the first step would be to look at the evidence-a more comprehensive look at the evidence than the list of names you have read out. As to whether or not ACoBA could be more transparent about what it does and the reasons for its decisions, it almost certainly could do that consistently with being proportionate about the public interest on the one hand and not displaying unnecessarily the personal interests of the people consulting them.

Q60 Charlie Elphicke: My basic concern is your committee has been looking very solidly at donors who walk in the front door and who have to declare everything now, and so their ability to access is limited, while we have in fact a whole load of sleaze around the back of the building in the revolving door. The sense is that sleaze is going on, which your committee has not looked at, which is why I put it to you that it is something your committee should look at urgently to ensure that things are not amiss at the back of the building of public life as you have so well put them right at the front of the building of public life.

Sir Christopher Kelly: Forgive me for saying so, but there is transparency. There used not to be transparency. There is now a measure of transparency that did not exist before, in the sense that Ministers now have to publish details of whom they meet and on what subject.

Q61 Charlie Elphicke: And civil servants?

Sir Christopher Kelly: Permanent secretaries do; I do not think that is necessarily the case for people below permanent secretary. What I take to be the Government’s view, which is that that element of transparency is better exercised from the point of view of the people being lobbied rather than those doing the lobbying, is not necessarily the wrong approach, although, as I have tried to say earlier, there are gaps in that in the sense that not all contacts with Ministers on matters dealing with their official business need to be recorded, because it is only those that take place under the aegis of the Department that need to be recorded in that way.

Q62 Chair: Just to be absolutely clear about this, the cases to which my colleague referred are all outside the two-year rule.

Sir Christopher Kelly: Yes.

Q63 Chair: So they are okay?

Sir Christopher Kelly: I think I said the opposite. I said that personally I would feel more comfortable if the two-year rule was replaced by a longer prohibition than two years, but I think there is a legal issue about that.

Q64 Paul Flynn: Which has never been tested?

Sir Christopher Kelly: Which has never been tested.

Q65 Chair: How many years should it be in an ideal world? Five years? 10 years? A former Defence Secretary going to a defence company? How many years should that be?

Sir Christopher Kelly: How long is a piece of string? There are two approaches to that. One is a rule. The other-which we have discussed to some extent in relation to Mr Hopkins’s question-is the responsibility of individuals holding public office to behave with integrity. There must be questions for an individual to resolve.

Q66 Chair: We are discussing the Business Appointment Rules and the manner in which these rules are supervised.

Sir Christopher Kelly: Indeed, but you asked me how long it would be.

Q67 Chair: What would be reasonable? Does it need to be a bespoke test in each case?

Sir Christopher Kelly: What I was trying to say was that there are two ways of approaching it. One is by having an absolute limit, which is where we are at the moment, and I have already said I think it should be longer than two years. Then there is an individual sense of responsibility, and in some cases I would expect them to think that longer than two years was an appropriate limit.

Q68 Chair: Even in some cases where the period has been substantially longer than two years, they finish up in an article like this.

Sir Christopher Kelly: Indeed.

Q69 Chair: So how are we going to deal with this?

Sir Christopher Kelly: You can only deal with it by putting a complete ban on people in certain circumstances taking up such employment.

Q70 Chair: What would that do to recruitment to the senior Civil Service?

Sir Christopher Kelly: That is absolutely right; that is why you need a system that is able to take appropriate and proportionate judgments in the light and knowledge of all the facts.

Q71 Chair: To some extent there are always going to be people writing newspaper articles-

Sir Christopher Kelly: That is absolutely right.

Chair: -and making implications about impropriety when in fact it is possible that no impropriety exists?

Sir Christopher Kelly: I could not agree more.

Q72 Chair: So what are we going to do about that?

Sir Christopher Kelly: If you know the answer to that, then I think you would be doing it-

Q73 Chair: But are tighter and tighter rules and longer and longer periods necessarily going to stop people writing articles that imply there is impropriety?

Sir Christopher Kelly: Chairman, I think we are in violent agreement.

Q74 Chair: You think that ACoBA should have the power to extend the period?

Sir Christopher Kelly: Specifically on the question of lobbying, and people taking jobs in lobbying where what is being purchased appears to be not knowledge of how the Government works but access to former colleagues, then speaking personally I would be more comfortable with a gap of longer than two years. I found it very instructive when I left the Department of Health in 2001. I was approached by a number of companies involved in the health area, and I thought it wholly inappropriate that I should take up employment with any of them. After a period of two years they stopped asking, and it may be that they by then had formed a view of my competence, but I suspect there were actually other reasons and it was that I would cease to be as much use to them because of the knowledge and contacts that I brought with me.

Q75 Kelvin Hopkins: That is wholly admirable and that is what I would expect of a good public servant, and you are the right person with the right background, but by contrast we have a former Prime Minister who is now an extremely wealthy man who openly loathed your predecessor because he was a ramrod-straight puritan who did not like what he was doing. It was evident that in public life we want people who have your values and, I like to think, my values, and not the values of some of the people who are now in this list and, indeed, the previous Prime Minister, who has now made countless millions out of business contacts shortly after ceasing to be a Member of Parliament.

Sir Christopher Kelly: I agree with your point about the values being important.

Q76 Alun Cairns: That point is slightly separate from the point you have been labouring in relation to lobbying. If you take a Secretary of State or a former Secretary of State who goes to work for another organisation, not in a lobbying capacity-because you almost understood the use of their skills in terms of understanding Government in order to work for an organisation, rather than in a lobbying capacity-would you think the two-year period is sufficient in that position, where, for example, a former Secretary of State for Defence could go and work for a company where the procurement period is much longer than two years in terms of securing contracts? That would quite obviously be a conflict of interest, but I am just concerned that you are emphasising more the lobbying rather than using skills in a private organisation.

Sir Christopher Kelly: I agree with you. I would feel more comfortable with a standard ban of longer than two years on lobbying. I would feel more comfortable with a longer distance between leaving office and employment in the particular case you mentioned. Yes, of course.

Q77 Paul Flynn: If we are to get rid of what is the most potentially corrupting element-people doing the job properly as Ministers and civil servants, admirals and so on but also having this dual ambition of finding information and contacts that can serve them in their retirement jobs when they leave-the only way of stopping that happening is to say to them, "Well, you do not serve after retirement in the areas in which you are regulating now." If we want to cleanse the stables in this area, we should insist on that, otherwise that dual ambition will be there. I entirely disagree with the Chairman, who seems to be attacking the press for introducing transparency. Of course we should know what Ministers do. In one case, not quoted there, it was a contract involving £5 billion. It is right that we should know that one of the people involved in that contract is now working for one of the beneficiaries. Of course we should know about that. We have had transparency in this-we are in no position to complain as MPs, which means that we have to take possibly a decade to rebuild our reputation. But we do need fundamental reforms on this. Transparency International reported that the two issues that the public were most worried about involving corruption were the award of honours to people who had given political donations and people taking advantage of the revolving door. Do you agree that we really need a root-and-branch reform? We need something that is as much a shock to the system as the reforms that took place as far as MPs are concerned. If we all start with the idea that we have a duty to restore the public’s faith in democracy-

Chair: Is this a question?

Paul Flynn: It is a question. It has a fairly long preamble.

Chair: Yes.

Paul Flynn: Do you not think the fundamental need of all of us who are concerned about democracy and the role it is going to play is to restore confidence in Parliament, in the systems and the way we behave, and we are not going to do that by pussy-footing around or trying to silence journalists? That is the question.

Sir Christopher Kelly: I agree with you; there are some aspects that need to be reformed. In reforming the system, though, you need to be very careful that you identify those things that really cause you concern, like the case suggested by Mr Cairns, and that you do not rule out a whole field of post-office employment for former Ministers, Chairmen of Select Committees, what have you, where their expertise is in knowing how Government works, and where many organisations and, indeed, the public interest would be served by allowing them to do that-by people knowing, if you have got a strong argument to make, how to make that in the most effective way, so that when decisions are taken they are taken in the light of all the arguments-

Q78 Paul Flynn: What should your committee’s role be in increasing public trust in Government?

Sir Christopher Kelly: My committee’s role, as ever, is not to investigate individual cases. My committee’s role is to make recommendations to the Prime Minister of the day about structures and processes and that is what we have done.

Q79 Alun Cairns: I am glad that you underlined your role, because my series of questions relate to the role of your committee, but there is a myriad of organisations that look into standards. There is the Committee on Standards in Public Life, obviously, the Parliamentary Commissioner for Standards, there is the Adviser on Ministerial Interests and there is the Advisory Committee on Business Appointments. All of these look at various different areas. How closely do you work as individual committees or organisations?

Sir Christopher Kelly: You mean collectively? The Committee on Standards in Public Life is independent and we maintain our independence. We used to share offices; we now share the same corridor with a number of those organisations. A number of us get together every four months or so for lunch to exchange views informally about what is concerning us, what is going on, what we are doing, and where we think we can share information that would help advance the general cause.

Q80 Alun Cairns: How transparent is that arrangement?

Sir Christopher Kelly: You mean the lunch?

Q81 Alun Cairns: The liaisons. Potentially the lunch. The meetings-

Chair: Do they lobby you?

Sir Christopher Kelly: No. It is not a secret. I have just described it to you now. I am not quite understanding the implication of your question?

Q82 Alun Cairns: If one organisation or one committee is meeting another committee and they are discussing various issues of common interest, do you think there should be reports of it or do you think that should be on the public record? Do you think that should be held in public?

Sir Christopher Kelly: If we have a committee discussion with another committee, that would be recorded in the minutes of our meeting, which are on our website, so that is transparent.

Q83 Alun Cairns: The lunch meeting: is that a committee discussion?

Sir Christopher Kelly: No, the lunchtime discussion is me, the Chairman of the Electoral Commission, and others.

Q84 Alun Cairns: What I am getting at is whether you think it is time to rationalise the committees that are looking at it, and is there not an opportunity to reconsider how the standards regulation structure and infrastructure works to come up with a simple, transparent, easily understood process?

Sir Christopher Kelly: There might be a case for doing that, and since your Committee in a previous guise made that recommendation earlier, there has been some move in that direction in the sense that the Civil Service Commission and the Commissioner for Public Appointments have now been merged.

Q85 Chair: That was not our recommendation.

Sir Christopher Kelly: No, but your recommendation was-

Chair: That was done without consulting us.

Sir Christopher Kelly: As I recall it, and I am sure I recall it inaccurately, your recommendation was very much along the lines of what Mr Cairns has just suggested. All I am saying is that, since that recommendation was made, there has been some move in that direction, the other one being that the Secretariat of ACoBA and the House of Lords Appointments Commission-

Q86 Alun Cairns: Would you support such a recommendation?

Sir Christopher Kelly: You need to be careful in recognising the different roles of the different bodies, because many of those bodies that you have mentioned are regulators. We are not a regulator. Some of them are responsible to different people. The Parliamentary Commissioner is responsible to the House. The Ministerial Adviser is-as things are constituted at the moment-responsible to the Prime Minister. So there are issues of that kind.

Apart from the general drive towards economy, I would be disappointed if a recommendation of that kind was considered solely in terms of saving costs. The issue is: would it lead to, as you have said, a better, more transparent, more effective system for maintaining standards? It may very well be time to reconsider that.

Q87 Alun Cairns: In terms of maintaining-and I underline "maintaining"-the integrity of the organisations we have talked about, you have mentioned some are regulators and some are not, and therefore is the potential liaison not as public as it could be-and I do not mean the luncheon; I am talking about the meetings taking place that maybe are not held in public because it has never been questioned until now. Do you not think that every organisation, in whichever way, would help support and maintain integrity where there is a separation between the regulators and the other bodies?

Sir Christopher Kelly: If underlying that question is the thought that I should never talk to any of the regulators or I should always record it when I have done so, then I am not sure that the sort of conversations I might have on those occasions need be on the public record.

Q88 Alun Cairns: Could there not be an accusation of collusion between the regulators and those who are setting the standards?

Sir Christopher Kelly: There could be accusations of that kind. I don’t think they would be justified.

Q89 Chair: It is something to think about.

Sir Christopher Kelly: Yes, it is something to think about.

Q90 Lindsay Roy: Sir Christopher, you have been in post for almost five years. What have been the main achievements during that time?

Sir Christopher Kelly: An interesting question. We have produced two full inquiry reports: one on MPs’ expenses, with which you will be very familiar, and the other on party funding. The report on MPs’ expenses was accepted by all the main political parties within a matter of hours of it being produced, although some of it was later unstitched as a result of the decisions of the Independent Parliamentary Standards Authority, although most of that has now been restored. The report we have produced on party funding will, I hope, prove to be rather more of a slow burner. This is an issue that has defied attempts to find an appropriate resolution for some time. We looked at it for a year and produced a set of recommendations that are uncomfortable for almost all the main parties, which is one of the reasons why it was not greeted with universal acclaim.

I am fairly confident in my own mind that the committee, having looked exhaustively and independently and without the sort of thoughts of party advantage that bedevil negotiations between the parties on this subject, have presented a set of recommendations, which if they were accepted, however difficult they might be, would remove one of biggest sores-according to Transparency International-underlying public trust in the way we are governed. Apart from that, we have responded to a very large number of consultations of one kind or another.

Q91 Lindsay Roy: Challenging work that you have not shied away from.

Sir Christopher Kelly: I hope so.

Q92 Lindsay Roy: What are the key things that you have learnt that you would pass on to your successor?

Sir Christopher Kelly: Two things. One is the importance of transparency. I very much agree with Mr Flynn. Transparency is two-edged. It can be misused, but actually transparency in my view, as said by Lord Nolan right at the beginning, is one of the most effective controls on integrity that it is possible to have. Secondly, you can create all the bureaucracy and regulation and bodies and regulators that you like, and that is not unimportant, but what really matters to standards in public life is people taking personal responsibility, leadership and culture. Culture is not independent of structure but it is also vastly affected by the sort of leadership that is exercised.

Q93 Lindsay Roy: Culture and clear outcomes.

Sir Christopher Kelly: Absolutely.

Q94 Lindsay Roy: Is the committee, which was established in 1994, still fit for purpose in your view or would you like to see some change?

Sir Christopher Kelly: You mean, do we need to continue to exist? My understanding is that we will be shortly subjected-like other non-departmental public bodies-to a tri-annual review, which will address that question. My view is that there still remains very much a need for us, for a number of reasons. One is that circumstances change and what might have seemed right at some point in the past might no longer meet the standards that people expect now. Secondly, because things continue to happen, as with the revolving doors and MPs’ expenses, I think there is a value in having an independent body like my committee able to investigate and express views, and the fact we are a standing committee has advantages in that context, rather than setting up ad hoc inquiries each time it happens. Thirdly, there is a tendency for scandals to happen and then for overreaction to be the result. My view is that IPSA overreacted in the case of some of the things they did on MPs’ expenses. We saw it with the Electoral Commission, which was set up as a result of a recommendation of a predecessor committee, but not in the way the committee had recommended and some time later it was changed.

The biggest example is the Standards Board for England, for local authority standards, which was set up following the recommendations of the committee in an over-the-top way that the committee had not recommended, and not surprisingly created a large number of enemies and difficulties because of the way it happened. The result was that its successor body, Standards for England, has now been abolished, and in my view the regime that is now in place is insufficient to do the job. I will continue to say so, and I am pretty certain that my successor as chair of this committee in a few years’ time will be producing a report suggesting changes to that regime.

Q95 Lindsay Roy: So in essence, continuity in terms of challenge and rigour, but perhaps not in exactly the form it is in at the present time. Would that be a fair summary?

Sir Christopher Kelly: You have expressed that more elegantly than I have; thank you.

Q96 Chair: A lot has happened since Nolan was originally set up and those bodies which Mr Cairns referred to, yet you are still an all-powerful fire engine that will go anywhere in any emergency, which is a very powerful position for you to be in. Do you think there are any questions about the accountability of the Committee on Standards in Public Life in that you yourself have said you could be abolished at the stroke of a pen by the Prime Minister? You are a personal appointment by the Prime Minister. Is it entirely appropriate that as a body you should be so answerable to the Executive rather than more broadly accountable, though you are here in front of us now?

Sir Christopher Kelly: I don’t feel that I am accountable only to the Executive. It is true that all members of the committee are appointed by the Prime Minister. We are appointed after a public appointments process. We are as transparent as we can be in terms of publishing an annual report, putting our minutes on the website, publishing all our evidence and so on, although I have taken note of what Mr Cairns has said about some aspects of that. I regard it as part of my responsibility to be accountable to others, including appearing before this Select Committee, if I may say so.

Q97 Robert Halfon: Your committee is engaged in biennial surveys. They have been quite costly: £260,000 of taxpayers’ money for each of the previous three surveys, and £45,000 in 2010. Do you think that this is a good use of taxpayers’ money?

Sir Christopher Kelly: I would not think it to be a good use of taxpayers’ money to continue to pay £260,000 for them, which is one of the reasons why under my chairmanship we now do the surveys in a different way. As far as the principle is concerned, when we were first set up our terms of reference were to address concerns about standards in public life. I think it would be grossly irresponsible of us to assume that we knew what those concerns were without taking some steps to ascertain not just what the media or what the Westminster commentariat think but what the general public think as well.

Q98 Robert Halfon: How was the decision made to spend nearly £800,000 on surveys? £260,000 for one opinion poll survey is an obscene amount of money.

Sir Christopher Kelly: You are asking the wrong person because the last but one survey did happen under my chairmanship or did report under my chairmanship, but was commissioned before I arrived. The one that was commissioned under my chairmanship has cost much less than that because, on the basis of the experience we’ve had with the previous surveys, we have found a cheaper way of doing it.

Q99 Robert Halfon: How do you choose the survey company?

Sir Christopher Kelly: How do we choose the survey company? The surveys are undertaken for us by a research advisory board that we have established with a number of academics on it, including someone who was a director at the Office of National Statistics. They undertake a procurement exercise based on Cabinet Office rules. The Chairman and I have exchanged views about this on a previous occasion.

Q100 Robert Halfon: Do you use internet polling, which is much cheaper?

Sir Christopher Kelly: At the time we started these surveys, there were no other comparable surveys. A lot of the value of it is that we have a continuous data set, so you are not just taking views at one point in time; you can also see how views have changed, and there are some interesting points in doing that. At the same time as conducting the face-to-face survey, one of the things we did last time was conduct an internet-based survey to see whether it gave the same results so we could think about substituting an entirely internet-based survey and still have a continuous data set. Unfortunately, the advice from the research advisory board was that they thought we would lose the continuity of the data if we did that.

Q101 Robert Halfon: Why did they give you that advice? Was that because you were paying them £45,000 a year?

Sir Christopher Kelly: No, the research advisory board gets paid a daily fee. I think the total cost of the research advisory board last year was £3,000.

Q102 Robert Halfon: The results of the 2010 survey were not published until September 2011. What was the reason for that?

Sir Christopher Kelly: The reason for that is previously the report has been written up by the research company undertaking the survey. That was a significant part of the cost of doing it. On this occasion, in order to save money, the report of the survey was written by the Research Advisory Board themselves, and since they are not working on this full-time, unfortunately that took some time. We also paid part of the cost of a PhD student, who did some further analysis of the whole series of data, going back to the original survey.

Q103 Robert Halfon: What other ways are you using to cut costs in your organisation so that things like spending £260,000 on a survey for three years at a time does not happen again?

Sir Christopher Kelly: We have very few costs. The cost of the committee includes the costs of setting up public hearings and so on. The secretariat is now about half the size that it was when I took office. It now consists only of four people plus a part-time press officer. In fact, at the moment, because we are in the process of transition, the entire secretariat is sitting behind me. Cost is a very important consideration.

Q104 Paul Flynn: This Committee has been unhappy about ACoBA for many years. Our main concern was that ACoBA was part of the problem rather than the solution, because it was made up of the great and the good, and most of its members have two jobs anyway and many outside interests. We suggested they were paid in order to get a wider cross-section of society. They are paid but they comprise, at the moment, a general, three lords and two knights, which is not a cross-section of society in the street where I live. There has been virtually no progress in sharpening the surveillance of the job, so finding out if their decisions are carried out, and it is not the reforming watchdog that we need. It is a Bagpuss with no teeth or claws, going on in the same broad way-

Chair: Okay. Can we have a question?

Paul Flynn: Do you think it needs to be abolished and we need to start from square one with an entirely new set-up?

Sir Christopher Kelly: Two quick responses: one of our academic advisers did some analysis of ACoBA decisions going back over the years, and one of the striking things is that actually there is a very strong movement towards imposing a far greater number of conditions on appointments that they approve. The evidence is that they have become more robust as time has gone on.

Secondly, in terms of the membership, I understand the reasoning for its composition is the thought that, if you are dealing with retired generals, ambassadors and senior civil servants, there ought to be somebody who understands the worlds in which they live and the worlds to which they might go. I see that argument. But one of the striking things about ACoBA-and I am glad you have given me the opportunity to say this-is that, with the exception of the representative from business, they are all members of the tribes to whom they are providing advice. Although I have no reason in the absence of evidence to think that they are not giving entirely independent, objective advice, I would feel more comfortable if there were more people on ACoBA who belonged to different tribes and might provide more grit in the oyster. I am not sure I would go as far as to say they should be former bus conductors and waitresses, Mr Flynn. No doubt, you can find the qualities you need there, but I think we can also find them elsewhere.

Kelvin Hopkins: I nominate Paul Flynn.

Q105 Paul Flynn: The reason that arose is that I think those were the categories suggested by the Chairman as people who would be unsuitable, and I had the joy of telling him, as a former bus conductor of many years’ standing who married a waitress, I thought that either of us could do a reasonable job on his committee, which came as a great surprise to him, I am sure.

Q106 Chair: On that happy note, Sir Christopher, thank you very much for appearing before us today and for your continued work.

Sir Christopher Kelly: Thank you very much.

Examination of Witnesses

Witnesses: Professor David Miller, Spinwatch, and Chandrashekhar Krishnan, Executive Director, Transparency International UK, gave evidence.

Q107 Chair: May I welcome our second panel of witnesses today? Could each of you identify yourselves for the record please?

Chandrashekhar Krishnan: I am Chandrashekhar Krishnan, and I am the Executive Director of Transparency International UK. We are the UK national branch of the global movement Transparency International.

Professor Miller: My name is David Miller. I am Professor of Sociology at the University of Bath and the director of an organisation called Spinwatch.

Q108 Paul Flynn: Welcome here. It is great to see you. The Committee is indebted to you for the work you have done. Having listened to the last session, what do you think our main priority should be?

Professor Miller: I do think that ACoBA should be abolished and one should start again with an organisation that has power, in the sense it is not an advisory committee, it is accountable not to the Prime Minister but to Parliament, and it should be able to investigate matters and have some sanctions. In a nutshell that is what I think would be important in reforming ACoBA, but I am not sure that just reforming ACoBA is where one should stop. I know that is what you are looking at.

It seems to me that the number of bodies that Sir Christopher was talking about there fairly made my head spin. I had not quite appreciated how many there were, and I could add quite a few to that. There are quite a lot of bodies that are there and what maybe needs to be done is to bring quite a number of them together, giving them significantly more power and resources, which might be shared across organisations so that, as Robert Halfon was saying, they do not need to spend so much money on surveys or whatever. Certainly, there are a number of organisations out there who already gather the kind of information that would be necessary for such a body-on ministerial meetings, on MPs’ and Lords’ interests-even organisations like the Information Commissioner’s Office or the freedom of information offices. Those are existing bodies that do similar kinds of investigations.

There is a wider question about what kind of ethics regulation this country ought to have, which might be thought of in the wider context. I know it is not necessarily what you want to do. I do think that ACoBA should be abolished, but there is then the question of what you replace it with.

Chandrashekhar Krishnan: We have, of course, prepared a very detailed report on the subject, which was published last year, and we have submitted written recommendations. We do believe that the time has come for urgent, radical reforms, because ACoBA and the current regime is clearly not working and we do believe that public confidence in the system has been undermined. That is evidenced by results of opinion surveys, both undertaken by us and also the YouGov survey, which was mentioned and which was collected in January. We think it would be beneficial to replace ACoBA with a statutory body that is capable of acting with total transparency and monitoring and enforcing new, robust rules to regulate the revolving door.

I should hasten to add that TI UK is not against the revolving door. We do believe that both Government and business benefit from this interchange of skills and experience, and we would like to see that continue. However, the current system for regulating that process is broken and therefore it needs to be fixed, and we think that the best way to go about this is to have a statutory body and have new, robust rules that are capable of being enforced, with also a provision for penalties in case the new rules are not implemented.

Q109 Paul Flynn: One surprising bit of evidence we had from you, gentlemen, is this news that so many senior people, including very senior civil servants, apply retrospectively, and the other piece of evidence was that many military people, knowing that this is one of the main areas of traffic-from military jobs to the defence industries-are now not applying at all. What does that say about the system?

Professor Miller: The military example is an interesting example because this only became apparent retrospectively, I think. There was two-year period in which senior military people were just refusing to go to ACoBA, and they had been advised that they did not have to go. That has now been apparently resolved and they now are going to ACoBA, so there was quite a failure of the process, which did not really raise any red flags. It was not apparent until after. That is the kind of issue that comes up. It is not just an isolated example. There are many examples. You mention the retrospective nature and the fact that they only look at senior people. More junior people are looked at by the Cabinet Office, and others by their own Departments. There are a lot of those kinds of issues, which suggest that the system is not working.

Q110 Paul Flynn: There is evidence, certainly from constituents of mine, who complain bitterly of former military personnel being brought into firms. They have nothing to offer to the firm’s work and they exist only to ensure that their pals that are still in the military have an influence on awarding contracts. Knowing the sad history of defence procurement-of monumental waste on an unimaginable scale, and this has been one of the great successes-this is an area where we do need stronger surveillance of people coming from the military into the defence industries.

Professor Miller: The defence industry is one area where that is important and, as you say, the budgets in defence procurement are huge, and that obviously gives the possibility of very significant potential for corruption. But I don’t think that is the only area. Health is another one where there are large procurement procedures, and there are a number of other ministries as well. The question of procurement itself is an issue, but the question of whether people work in the Civil Service or in regulatory agencies or in Government and take decisions that benefit outside companies, and then some years or months later get a lucrative post with one of those organisations-whether that is entirely legitimate or not; it might well be-leaves us with the potential for the perception of a conflict of interest. We don’t have a proper way of dealing with that. I don’t think one should necessarily eliminate conflicts of interest. That would be impossible, but I don’t think it is enough just to declare conflicts of interest. There has to be a process of trying to manage and diminish them if possible.

Chandrashekhar Krishnan: Clearly, there are some sectors that are high risk and therefore more vulnerable, potentially, to abuses occurring. Defence is one, health is one, education, transport and so forth. Clearly, where someone has been in a senior position involving decision making on procurement, probably that warrants a system where the cooling-off period should be longer. We have recommended that the current two-year period during which former Crown servants and Ministers should be applying to ACoBA for permission should be extended to at least three years, and possibly even more in the case of higher-risk positions. We also think that there is a case for extending the current ban on lobbying, which is now two years, to three years, and again, that could be extended in high-risk cases. We also think there is a case for considering whether there should be a ban on employment in a company or a specific industry sector for a specific period of time, again, in high-risk cases.

Let us take the case of defence, where a person has been involved in a major defence procurement decision while in government, say as a Minister. Now, if that person six years later joins the defence company that benefited from the contract that was given when this person was Defence Minister, no one is saying that the person concerned has done something wrong but there clearly would be a suspicion of impropriety. That is the weakness of the current system. One issue that could be considered in this context is whether, in such situations, the person should simply be prevented from seeking employment in that particular company, as a lifetime ban. It could be considered draconian. I know that other issues have been mentioned but we do need to assess the pros and cons of adopting such a regime, because otherwise we will continue to have such cases coming through and this will undermine public confidence even more.

Q111 Paul Flynn: Do you think we should follow the French example and fine former civil servants who take jobs in industries that they previously regulated-fine them €30,000 or imprison them for up to three years? Do you think that would be a reasonable model to follow?

Chandrashekhar Krishnan: I am not familiar with the French system, but I think that we need to move to a system where we have more robust laws and the means of monitoring and enforcing them and imposing penalties if required.

Professor Miller: I agree. We need a system that has the possibility of penalties in order for us to work out if the system is actually working. We need to monitor it and enforce penalties. I don’t have a specific gradation of penalties written down, but certainly we need to have a system that has some kind of teeth.

Q112 Kelvin Hopkins: Is there not a much bigger political question underlying all this? Over the last 30 years we have seen massive privatisation, reduction of the public sector, a diminishing of the professional Civil Service. Given that, the Government becomes an organisation for collecting taxes and handing out contracts, rather than having direct employment with public servants who are accountable to Government and to the electorate through their elected representatives. Does that not make the problem much bigger, and would it not be a good idea to think about stopping that process and, perhaps, reversing that process, certainly in the Health Service, where we want-I believe-direct employment rather than privatisation?

Professor Miller: I don’t necessarily disagree with your outline of the history. However, one other thing that you did not mention is that those changes that have taken place in the last 30 years under Labour and Conservative Governments have also allowed a much greater direct role for corporations in particular and lobbyists in Government. That is part of this process. We are not talking about lobbyists, but when one is thinking about the wider context and one thinks about corporate strategies, when corporations want to pursue changes in laws or pursue particular contracts, they adopt a whole panoply of measures, including party funding, yes, including lobbying and also including buying up ex-Ministers or civil servants as part of their strategy. So there is a wider context to this, and if one wants to seriously deal with that, then ACoBA is one step, wider ethics regulations is another, and certainly redrawing the balance between the public and the private might be a further step, but this committee is not going to do that, right? So, maybe one needs to think about what the first step is and where we might go after that.

Q113 Kelvin Hopkins: What about the, I believe, unhealthy relationship between consultancies, such as McKinsey-McKinsey employs lots of consultants, some of whom get into Parliament, even become Ministers and then pursue, in legislative form, the objectives that McKinsey wants: privatising the Health Service. McKinsey is now advising GP fundholders, GP groups, about how they go about commissioning. Some of the people from McKinsey go into Government, into Parliament, out again, and are now associated with health privatisation and McKinsey. Is there not almost a kind of seamless relationship now between people like McKinsey and Government, which is wholly inappropriate?

Professor Miller: There has been a breakdown of the dividing lines between the private and public sector so that people can move from one to the other in a seamless process. That leads to the difficulty that you have people on both sides of the question. You have someone who is in a private consultancy or in the Civil Service and is advising all sides to the question. That is a conflict of interest in most fields of criminal justice and the law, and it is a conflict in governance. That is a problem in the way in which the culture of governance now operates-that you find it difficult to draw a line between private and public.

Q114 Alun Cairns: Very briefly on that point, you said, "draw a line between private and public," but is the benefit not greater innovation in both the public and private sectors? We assume that a separation, effectively, is better that not having that separation.

Professor Miller: If you abolish the separation or make it more permeable, then you may argue that there are advantages to that, and we could look at the evidence for that, but certainly what will come with that is the danger of potential conflict of interest and corruption, and there is no way of getting around that.

Q115 Chair: You think that public services should not contract with the private sector at all?

Professor Miller: No. On the contrary, I think the issue is about being able to draw the line between private interests and public interests, so that you don’t have a corporation come into a public agency and bidding for contracts, and having people inside the public agency deciding on whether it should get those contracts. That does happen.

Q116 Chair: It is about regulation of these conflicts of interest?

Professor Miller: Yes.

Q117 Chair: Mr Krishnan, have you anything to add?

Chandrashekhar Krishnan: Yes, I would agree. I think there is a definite trend towards downsizing of government, and greater movement of personnel back and forth between Government and the private sector, and a reverse flow. The key thing is effective regulation and greater transparency. If you can ensure there are suitable Chinese walls that prevent people coming into Government from taking decisions that might benefit the company from which they came, then the system could work better.

Q118 Chair: Looking at the way ACoBA operates, Professor Miller, you would suggest that ACoBA’s powers are much too weak and it does not have the ability to monitor whether Ministers and officials actually respect its advice. Is that your concern?

Professor Miller: With the best will in the world, the committee is made up of people who come from the world it is supposed to be monitoring. Now, Sir Christopher said that part of the problem might be that they come from the same tribes, meaning the same political parties, I take it. I see that as an issue, but also the issue is that they come from this world, the world of Whitehall and Westminster, and that is a world that is sometimes seen-from the outside at least-as being insulated from the concerns of ordinary people. That is the concern. When you go and get tried for murder, you are judged by a jury of your peers. When you come out of the Commons or a ministerial post, you are not judged by a jury of peers of the country; you are judged by people who have been in that environment, some of who themselves have interests that could arguably be regarded as conflicts of interest. That is a situation that the public at large are not going to see as something they trust. The danger is that you have a committee that is seen as a chummy committee to understand what is happening in Parliament or amongst Ministers or civil servants, rather than being there to guard the public interest. It is about shifting the balance from understanding to public interest.

Q119 Chair: Do you have evidence that there are former Ministers or officials who disregard the advice of ACoBA or fail to take their advice?

Professor Miller: There seems to be. The data that is available suggests that 25% from last year did not bother to go to ACoBA, and they were retrospectively allowed-one of them was told off, one of them was named. There does seem to be evidence that people are simply ignoring it, and in any case they are only responsible for seeing the most senior people. The other people-more junior civil servants, etc-are monitored by the Cabinet Office, and ACoBA apparently looks at a sample of the advice given to them. That is the other problem with it being a part-time advisory committee. It does not have the resources to properly examine these things.

Q120 Chair: Why do you think Ministers and civil servants are not instantly going to ACoBA when it is appropriate?

Professor Miller: Because they don’t take it seriously.

Q121 Chair: And why do you think that is?

Professor Miller: Because they know it has not got any powers to do anything about it.

Q122 Chair: Because it is only an advisory committee?

Professor Miller: Yes.

Q123 Greg Mulholland: Just following on from that, if I may, the 12th Annual Report was published in November 2011, despite covering the period 1 April 2010 to 31 March 2011. That strikes me as a very long gap between the end of that period and publication, which seems odd, but in it-and I quote from the Report-it says, "No applications by former Ministers were considered by the committee to be unsuitable." A very simple question is: do you think any of those appointments were in any way unsuitable?

Professor Miller: The difficulty is that the committee is very reluctant to make those kinds of judgments. The evidence in our submissions shows that very few Ministers and a slightly larger number of civil servants-I think the evidence suggests two or three-have been told that they cannot take jobs. That already suggests there is a problem with the judgments, because outside Parliament that looks like just nodding things through. There is no serious judgment made of these things. That is a problem anyhow, but if the public think it is a problem, I think, yes, it is a problem. The whole question of whether they should be prohibiting people is one that should be opened up a bit further. I agree with what you were saying about extending the limits, so the possibility of banning employment at all in particular industries, but I think there is another issue that comes in between that, which is the question of what lobbying entails.

Sir Christopher was talking about the ban on lobbying possibly being extended. I wouldn’t have a problem with that, but I think the question of what constitutes lobbying and the definition given to lobbying by the committee is a problematic one, because it says it is when a former Minister or civil servant goes to speak face-to-face with a current Minister or civil servant, and that is not what most lobbying is about. It is a very small part of lobbying, so people can go into a business and be advising them and taking part in lobbying activity without breaking the law, as it were, as laid down by the Code. There is a problem with even the definitions used, because much of lobbying is beyond the face-to-face activity. If it was only face-to-face activity, you would not have a lobbying industry.

Q124 Greg Mulholland: Just to push you slightly further on that, are you saying that the system as set is not sufficiently robust, rather than that any of those appointments are possibly not suitable within the current rules? We had a very helpful session with Mary Dawson, who is the Conflict of Interests and Ethics Commissioner in Canada, and, as I said, the report says that all applications by former Ministers, including those submitted retrospectively, were approved as being suitable or deemed not to be unsuitable. But she clearly told us of situations where people had been advised that the appointment was not suitable and that those individuals then-I think in all cases-have not been taken up. It would certainly be interesting if you could point us to any appointments that have been made that you believe not to be suitable, even if they are within the current rules. I would like to get your thoughts as well, Mr Krishnan: do you think it is the rules that are not adequate, or is it the case that the committee is not doing its job and perhaps some of those jobs were not suitable?

Professor Miller: It is both. The rules are not adequate. The atmosphere of the committee is such that there is not a sufficiently stringent test of the public interest. Some of those appointments, no doubt, were unsuitable. One could not say without having seen the data which ones in particular, but I think it is both of those questions. The committee itself needs to be reformed to properly pursue the objectives it currently has, and also the rules need to be significantly tightened up, which I believe means abolishing the committee.

Chandrashekhar Krishnan: Yes, we need more robust rules and, secondly, this voluntary regime is not working. Your own Committee’s paper did point out that ACoBA is overly reliant on voluntary compliance and goodwill. That is the fundamental problem we face. We did not undertake detailed research of each and every case coming up before ACoBA in our report, but there were enough cases there, we felt, that suggested there was: firstly, a lack of transparency in the decision making of ACoBA; and secondly, an inconsistency in that decision making. It is very difficult to establish the rationale for ACoBA’s decisions in different cases. Why is it, for instance, that in the case of a former Ambassador to Saudi Arabia, the decision was taken that it was permissible to join a major defence company and a ban on lobbying of two years was imposed, but if you look elsewhere the period for which that restriction is imposed is different? All this suggested that we do need a more rational, transparent system, and that is what we are recommending.

May I just make an observation on the composition of ACoBA? We also take the view that its current composition does not reflect UK society as a whole. It is very important to remember that this is a body that is supposed to be protecting the public interest. It is not a recruitment agency for the private sector. The fact that it has members that represent all the sectors from which applications tend to come is not a good enough reason for justifying the current composition of the committee. It should be broadened to include people, for instance, from the arts, the sciences, civil society, the media. Only then I think would there be confidence that this body is really upholding the public interest, but we still would prefer to see a statutory body replacing ACoBA-

Chair: We are coming to that.

Chandrashekhar Krishnan: -with a membership that is representative of UK society. That is all.

Greg Mulholland: I think that is a very useful answer, but it would be useful if either or both of your organisations could carry out some analysis of those appointments to say where you think there are potential question marks over them or inconsistencies in decision making. I think that would be very helpful for the Committee.

Q125 Chair: I think that would be very helpful. We are not going to produce a report that prosecutes individuals, but to have some concrete examples for us to consider would be very helpful. Can I press you on the question of statutory footing? You both favour the regulation of business appointments by statute. Why is that the case? Could this not be done on a non-statutory footing?

Professor Miller: A statutory body would have more independence, could issue judgments, and would have powers to investigate. The example of the Freedom of Information Laws and the Information Commissioner for both Scotland and England, where they issue judgments in detail on particular cases, which then sets precedent-can be tested in the courts-is a useful approach. I, personally, am a big user of FOI, and I do not always appreciate or approve of the judgments made by the Information Commissioner, but they are closely reasoned judgments and they do appeal to questions of precedent. One can understand the logic of them, even if one disagrees with them. That kind of approach to an open consideration of the principles of decision making and then the practical questions in particular cases is the kind of decision making that I think would command more respect. You do not have people judging the Information Commissioner to be in the pocket of the powerful, for example.

Chandrashekhar Krishnan: When you think about this question, one option would be that you continue to have an advisory committee but you have more robust rules, but it is not a statutory body. The problem there is that you will still have a problem in terms of monitoring and enforcement. That is the reason why we have come to the conclusion that it would be better to have a statutory body, because then it is very clear what the rules are and what they require of the individuals concerned. This is then not an advisory role for a committee, and I think that then sends a very clear message to applicants: this is what they can do and this is what they cannot do. That clarity is what we need right now.

Q126 Chair: Are there any particular examples of statutory regulation in other countries that you would point to as a good example for us?

Professor Miller: There are a lot of other examples. You mentioned Canada. We did some work for the Organisation for Economic Co-operation and Development in Paris, which has a whole compendium of experience in different countries and a compendium of best practice, and I refer to that in my evidence. That is a place to look because the experience of other countries that the OECD has is immense and very broad. Some of those examples are bad, but others are very good, so I would say look at the experience of other countries.

Chandrashekhar Krishnan: I am not an expert on what other countries are doing, but in our report, for instance, for which we did some research, we found that there is primary legislation to deal with this question of the revolving door in countries including Belgium, France, Austria and Germany. So it is worth looking at what the experience has been in these countries.

Q127 Chair: There are two interesting factors we have looked at in the Canadian situation. One is that there are clearly deficiencies in the legislation, which I think are causing some frustration, both at the regulatory level and from the users’ point of view, if I may put it that way. Would you accept that and what are the lessons we need to learn from other statutory jurisdictions?

Professor Miller: That is true. Legislation like that can be tricky and it needs to be considered seriously, but also legislation like that dates and it sometimes needs updating. If you look at the experience in both Canada and the US in terms of lobbying regulation and ethics regulation, both at the federal level and the state level, as I am sure you know, many of the state legislatures have their own ethics commissioner. There is lots of experience there of the kinds of difficulties that you can get into and then how those are resolved, and there are many systems in the US, at the state level as well as federal, where they have proper ethics bodies that often have a range of responsibilities including lobbying, business appointments, the revolving door, and those kinds of issues. Yes, there can be difficulties but that does not argue that one should not try.

Q128 Chair: The other interesting thing about Canada is that they have lobbying and business appointment rules all under the same, single body. It is very striking for us because we supervise Business Appointment Rules and a different Select Committee supervises lobbying. Do you think this is an artificial split? Were we to recommend a statutory body or any kind of reform, should we be suggesting that this is all brought under one heading?

Professor Miller: I think so. They clearly are similar sorts of organisations and they would clearly be collecting similar data, so you would have duplication if you have separate bodies. So yes, one body gives it the possibility of having more clout.

Q129 Chair: Mr Krishnan, you are nodding.

Chandrashekhar Krishnan: Yes, I would tend to agree. Obviously, one needs to do more analysis of the pros and cons, but we believe that it is essential that you should also be enacting legislation as soon as possible to make mandatory the registration of all lobbying activity, and once we have got that in place I think it will strengthen the case to have a single body enforcing a regime that both regulates the revolving door and also regulates lobbying.

Q130 Chair: One of the objections that the Government will, no doubt, raise is the additional cost. Mr Krishnan, you recommend that there should be some sort of fee basis for funding this supervision-that people employing ex-Ministers and civil servants should have to pay the organisation to vet these appointments.

Chandrashekhar Krishnan: Yes.

Q131 Chair: Have I got that right? Is there an example of that elsewhere?

Chandrashekhar Krishnan: Yes. I am not aware of examples, but we did take the view that, after all, if industry is benefiting from this, then in addition to the public purse being drawn upon to fund a better system, companies could also be asked to contribute to a fund to meet the costs of this regime. This would apply during the period when Crown servants and Ministers have to come to a body to seek permission to take up employment.

Q132 Chair: Would that act as a deterrent for people even considering such appointments? Do you think that is a good thing or a bad thing? It might be a good thing.

Chandrashekhar Krishnan: We need to test this regime. The problem is that what we have right now is not working.

Q133 Chair: On the question of the time limits, at the moment we have a time limit of up to two years. My guess is you both agree that two years is not nearly long enough in all cases?

Chandrashekhar Krishnan: You mean the period of time during which you are expected to inform ACoBA and seek advice?

Q134 Chair: Yes, or indeed in which you would be banned from moving to somewhere where there was an obvious overlap with your previous employment.

Chandrashekhar Krishnan: Yes, in both cases we would favour a longer time period.

Q135 Chair: How long would you favour?

Chandrashekhar Krishnan: I go back to my point about risk assessment. I think it can be differentiated depending upon the posts concerned, and we have also recommended that there should be an audit undertaken of all major senior posts in Government, especially those involving major procurement decisions. Let me just give an example. If the position in question was, say, Permanent Secretary, Department for International Development, I think the risk associated with the movement from that post to a private sector position would be less than, say, Permanent Secretary, Ministry of Defence. In the latter case we would recommend a longer time period, and in the former case a shorter time period. It is possible to have a differently shaded system.

Q136 Chair: But you have to have an end stop. At the moment it is a two-year limit. How long should the limit be?

Chandrashekhar Krishnan: You could think of a five-year limit as a maximum period.

Q137 Chair: Why five years?

Chandrashekhar Krishnan: Again, one would have to do a risk assessment and then evolve a system that can be justified. That has obviously not been undertaken and we would recommend that that be done.

Q138 Chair: What about the 20-year, £5 billion contract, which is much longer than five years? Doesn’t that create a conflict?

Professor Miller: It does. You cannot eliminate all conflicts of interest, but they cannot just be declared. They should be managed and diminished where possible. The question of the length will depend on the circumstances. At present the ban for two years appears to be two years without lobbying as opposed to two years without taking the job, so there are all sorts of ways in which one could increase the recommendations: perhaps two years without a job and then a further two years without lobbying, or you define the question of what lobbying meant so that it was two years without lobbying defined in a stricter sense. There are all sorts of ways in which the limits might stay the same, at two years, but the penalties might be different.

Q139 Chair: If somebody is in defence procurement and that is all they know about, they cannot leave the Civil Service because they cannot become a teacher or a banker. That is not their profession. If they leave the Civil Service, they would have to be two years without a job.

Professor Miller: It is possible that might be the case, yes. In high-risk situations like that, that is possible, yes.

Chandrashekhar Krishnan: With that procurement experience, they could move to another part of the private sector. It does not necessarily have to be defence.

Q140 Chair: They could not go into retailing. They do not know anything about retailing. If you are 50 years old, you are not going to go into a completely new industry. It just does not happen.

Paul Flynn: You reach the pinnacle of becoming a Minister or a Secretary of State; it is not training for recruitment to an entirely different job.

Chair: I was talking about a civil servant in-

Kelvin Hopkins: Civil servants tend to be generalists anyway.

Chair: We can have our own debate. I am asking them the question. I am not cross-examining you.

Chandrashekhar Krishnan: I suppose if you are moving to a system that is more stringent and where there is opportunity cost of enforcing it in terms of income and employment forgone by the person concerned, then you may have to look at that person’s remuneration package while they are in post and look at their pension arrangements and so forth. I have heard it put to me by retired diplomats, for instance, that one of the reasons why senior diplomats have a fairly good retirement package is precisely to address this issue that you are not expected on the day of retirement to approach ACoBA and say, "Well, look, can I join company X or Y?" for the reason that you are taken care of with a fairly healthy package. If it is the case that that package needs some rethinking, let that be done and let us see whether the system needs some improvement. There are many people who think that the current arrangements are quite generous.

Q141 Greg Mulholland: If I can just go back to your previous answer, which I thought was interesting, Mr Krishnan, do you think that we need to be much more sophisticated in drawing up laws? You correctly identified the biggest concern, which is where there are multi-million pound contracts being awarded and that there should be a particular case for people who have been involved with those, and you even suggested a lifetime ban. Do you think we need to look at a more sophisticated set of rules, so potentially even that it would not stop someone working in that sector but it would absolutely stop them ever working for a company with which they had been dealing? You could set a minimum level of the contract. That is the concern: there is a danger with general rules that we might be throwing the baby out with the bathwater, but clearly what we as a Committee, the public and you want to avoid is people who have been involved in awarding very large public contracts to private companies then working for those companies at some time in the future. Do you think we need to get more sophisticated in drawing up the rules and would you perhaps come up with some suggestions for us?

Chandrashekhar Krishnan: Yes, I agree that we do need a more sophisticated system. We would recommend a risk assessment of different positions in Government for that reason, and we would attach more risk to positions involving procurement compared with those that do not. On this question of what the time period should be, I cannot give you the answer now, but if one has done a proper risk assessment, then one would be in a better position to make recommendations about what should be the period of time during which you may not lobby and also whether a permanent ban is justifiable. In a case where you have been responsible for a major procurement decision and a company has benefited, you should not ever be employed by that company, probably for the rest of your life, but you can work for another company in the same sector, whether it is transport or defence or whatever.

Professor Miller: Then there is the additional question which relates to pre-post-employment. There is the question of recusal rules when one is still in the Civil Service in procurement, and whether people have got conflicts of interest from previous employment and what decisions they should step out of when they have got that kind of conflict of interest. Those kinds of questions could be more transparent and could be looked at again-the rules inside the Civil Service about when you step out or not.

Q142 Paul Flynn: Sir Christopher seemed to be encouraging us to challenge the assumption that it is only two years that people have, and the excuse is given of restraint of trade and human rights legislation. Do you think this should be done? This is possibly a belief that is always there when not being challenged.

Professor Miller: There are places where periods of longer than two years are in legislation already. Of course, UK legislation is not the same as other legislation, but the legal questions could be looked at again. I don’t think there is any reason why one cannot extend particular periods for particular reasons.

Q143 Chair: Have you taken legal advice on this matter?

Professor Miller: I haven’t, no.

Q144 Chair: Have you?

Chandrashekhar Krishnan: No.

Chair: We have yet to find anybody who has.

Q145 Kelvin Hopkins: I agree very strongly with your view about legislation being required-strong statutory regulation. I have to say that I tabled an early-day motion at the beginning of this parliamentary Session calling for a statutory register of lobbyists. Over 150 MPs have already signed it, but Governments of both colours seem reluctant to pursue that course at this stage. Even in Canada there are still loopholes. Would you not agree that it is not about winning over a handful of MPs or even a Committee like ours, but actually getting to the heart of Government to say, "If you leave a loophole, we will focus on that loophole until you close it," because that is what they will do?

Chandrashekhar Krishnan: Obviously, when one devises legislation, one should try to anticipate ways in which people will try to get around it, and close as many loopholes as possible. This brings me to a more fundamental point. I think Sir Christopher mentioned it. Yes, we need a rule-based system that is enforceable but ultimately we are also talking about values and culture-

Kelvin Hopkins: Absolutely.

Chandrashekhar Krishnan: -and integrity and the Nolan principles. That is absolutely essential, because without that the most intricate rules will not work. People will always be trying to get around them.

Q146 Kelvin Hopkins: It is a point I made to Sir Christopher Kelly earlier on, and I agree entirely with you. If we take the example of the senior civil servant negotiating a contract, he should see his job as representing the public interest, and as long as he lives, his interest should be the public interest. If at any point there is the slightest hint that he is thinking about his job with the defence industry after he has left the Civil Service, that could influence the decision he makes and the system becomes corrupted.

Chandrashekhar Krishnan: Yes, and I would even venture to say that in your hypothetical case, if, say, it was a Minister who was in that role, then it is also the duty of the senior-most civil servant in his Department to be telling him or her that these are the things that you need to be careful about. I sometimes wonder whether that is happening to the level that we think it should in modern Government.

Q147 Kelvin Hopkins: One final point: I have made the point many times on this Committee that, 2,500 years ago, Plato understood this well when he said of the guardians, those who govern, "Their only pleasure should be good governance. They should not be corrupted by money or other interests." Now, to find good people like that is maybe difficult. I do not think it is that difficult at all, but would you not agree that in recent years we have actually seen Governments that deliberately avoided those kinds of people to make sure that Government moves in a particular direction: a commercial direction, a business direction, moving away from statism and democratic public interest provision?

Chandrashekhar Krishnan: I suppose it would be wonderful if you could just have philosopher kings in Government, but the modern reality is that one will have that sort of an inflow. There is a lot of benefit to be gained from having very competent people moving back and forth between the public and private sectors, and I personally do not see anything wrong with that. I think it is healthy, but the system to control it needs to be much more robust.

Kelvin Hopkins: The French have this concept of l’État, the state, and they have these very senior people who see their loyalty as to France, to the state. They go into the private sector and come back to the public sector, but they see their role as serving the interests of their society as a state representative, not as somebody who is essentially in profit.

Q148 Chair: Mr Krishnan, you just said something very important. A free interchange between people in Government and outside Government is important in modern Government. It is about striking the right balance, isn’t it?

Chandrashekhar Krishnan: Yes, and if you look around the world, it is happening in many other countries. The UK is not unique in this respect. Everybody is grappling with this problem. Solutions can be found, and it would be wrong to think that one should simply start erecting barriers to stop this, because that would not make sense from a public interest standpoint. However, I should stress that if, on balance, the risks that the public interest would not be served are greater, then one would have to move in the direction of more draconian systems.

Q149 Chair: Do you agree with that, Professor Miller?

Professor Miller: There is a difficulty in that what we are talking about here is the interchange between the private sector and the public sector in governance. If we are talking about the Government requiring the best raw talent to come in and advise, well, no doubt some of those will come from the private sector, but presumably they might also come from the legal system or from civil society or from the trade unions or from academia.

Q150 Chair: Trade unions do not have conflicts of interest with Government?

Professor Miller: No, they do, but the point is that what we are talking about here is just the private sector.

Q151 Chair: But it is not just the private sector, is it?

Professor Miller: We tend just to talk about the private sector in terms of monetary interest, but there are other sorts of conflicts of interest.

Q152 Chair: We would not want to be accused of anti-private sector bias, would we?

Professor Miller: This is my point. If we are thinking about bringing talent from society, then we should be thinking about bringing talent from across society, including the private sector.

Chair: Indeed.

Professor Miller: If we think about it in that wider frame, then rather than confining ourselves to thinking, "Well, we can get the best talents from the private sector only," which seems to be the case in some quarters, then you start to think you do not have to have someone necessarily from the private sector; you could also have perhaps someone from academia, the trade unions, civil society or any other organisation. That is a wider frame that tends to get lost, and I think that should be put back on the agenda.

Q153 Chair: But it would be possible for somebody moving from Government to a major charity to find themselves with a conflict of interest.

Professor Miller: It would, yes.

Chandrashekhar Krishnan: It is good that the rules also apply to those movements.

Q154 Chair: Finally, we have received some evidence suggesting-and one or two members of the Committee are very strong on this point-that the membership of ACoBA is inadequate because it represents the tribe that it is seeking to advise. If there was a statutory body, would you have a very different kind of membership?

Professor Miller: Yes, you would. You would have people who were much less likely to have external competing interests and who also would not be members of the tribe-who potentially could come from outside that. Now, I understand that ACoBA has in the last couple of months advertised for two lay members, and that process will go on and we will see who is appointed.

Q155 Chair: So that is a good development?

Professor Miller: That is a good development, but we need to move much further on that.

Chandrashekhar Krishnan: If we have a statutory body, it will be more representative of UK society as a whole.

Chair: Thank you both very much indeed for your evidence. I am sorry we have run over time. I am very grateful you have stayed with us, and I hope that we will produce a report that will provoke some debate. Thank you very much indeed.


[1] Note from the witness: In referring to the Ministerial Code I said that the Prime Minister had broken the Code by not referring the recent investigation into the Rt Hon Dr Liam Fox MP to the Independent Adviser on Ministerial Interests. This was incorrect. The code is clear that the Prime Minister has discretion about whether to invite the Independent Adviser to undertake an investigation, even in the case of allegations about breaches of the code as serious as those made about Dr Fox.   The point I was trying to make was that having decided that an investigation was necessary, as it clearly was in this case, it would have been better in my view to ask the Adviser on Ministerial Interests to undertake it rather than leaving it to the Permanent Secretary of the Ministry of Defence and the Cabinet Secretary.

[1]

Prepared 29th March 2012