To be published as HC 156-xv

House of COMMONS



Scottish Affairs Committee


Tuesday 12 March 2013

Mike Peasland

Evidence heard in Public Questions 2236 - 2631



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Oral Evidence

Taken before the Scottish Affairs Committee

on Tuesday 12 March 2013

Members present:

Mr Ian Davidson (Chair)

Jim McGovern

Graeme Morrice

Pamela Nash

Simon Reevell

Mr Alan Reid

Lindsay Roy


Examination of Witness

Witness: Mike Peasland, CEO, Construction Services UK, Balfour Beatty, gave sworn evidence.

Q2236 Chair: We will just put you under oath first, if you don’t mind. (Mike Peasland was sworn) Do we have to swear in the lawyers, since we do not allow them to speak? No?

Simon Reevell: You did not need to look quite so nervous at the prospect.

Chair: Welcome to the Committee, Mr Peasland. Can you introduce yourself and your companion and give us a little background on yourself and why you are here on behalf of the company?

Mike Peasland: I am Mike Peasland. I am the chief executive officer of Balfour Beatty’s construction business in the UK. I have been at Balfour Beatty for 43 years, since I left school in Edinburgh. I started off in Balfour Beatty Construction as a civil engineering technician. I eventually became the general manager for construction for Balfour Beatty in Scotland. I then moved to Balfour Kilpatrick, where I was the managing director in 1999. When we acquired Mansell, our building business, in 2004, I was the managing director of Mansell. In 2006 I moved to the group and became the group managing director. In 2010 I took up the position of CEO for our construction business in the UK, which includes all our building, our civil engineering and our engineering services business.

Chair: Thanks very much.

Jim McGovern: For the purposes of clarity, I am not sure whether Mr de Freitas refused to take the oath.

Chair: No. I indicated that, on reflection, because he is not a witness and is not allowed to say anything-

Jim McGovern: So any advice he gives to Mr Peasland is not covered by oath.

Chair: No. There again, we would not hear it.

Jim McGovern: No; normally they do it by whispering.

Simon Reevell: It would be covered by privilege anyway.

Chair: We have just had some more free legal advice from Mr Reevell as well. Goodness me, this does not happen very often, so make the most of receiving free legal advice.

Jim McGovern: So Mr de Freitas has indicated that he does not want to be here under oath.

Chair: No. To be fair, I took the view just now that, on reflection, we did not need to have the lawyer under oath, because he is quite clearly not going to be a witness. He will not be answering.

Simon Reevell: Because he is not giving evidence to the Committee, the effect of the oath would be to force him to tell the truth under oath to his client. He does not need an oath to do that. That is covered by privilege anyway, so the oath would not matter. It is slightly misleading, because they are sitting next to each other. If he were sitting behind, you would not think to put him under oath. There is nothing at all unusual about that.

Jim McGovern: You are the lawyer.

Q2237 Chair: It does not mean that we always accept what you say, but we will on this occasion.

We have heard from our previous inquiries into blacklisting that Balfour Beatty, in its various divisions, was a founder member of the Consulting Association, was previously involved with the Economic League and was involved in the services group. Can you take us through that? First, is that true, and secondly, why did you feel the need to be involved in these organisations?

Mike Peasland: We were members of the Economic League from some time in the 1970s. It changed, and we became members of the Consulting Association. I became aware of the Consulting Association in 1999, when I moved to Balfour Kilpatrick.

Q2238 Chair: But you are here speaking on behalf of the company and the group.

Mike Peasland: Correct.

Q2239 Chair: You mentioned earlier that you had moved between various divisions. Were all the divisions part of the Economic League and the Consulting Association, or was this handled centrally? What was the structure?

Mike Peasland: There were six individual operating companies. Balfour Beatty Civil Engineering, Balfour Beatty Northern, Balfour Beatty Scottish and Southern, Balfour Kilpatrick and Haden Young were the operating companies involved.

Q2240 Chair: We also have mention of Raynesway, which was Balfour Beatty Infrastructure Services, and Balfour Beatty Scottish and Southern.

Mike Peasland: Correct. I said that.

Q2241 Chair: I just wanted to be clear. As far as you are aware, all of those were, either individually or as part of the group, members of both the Economic League and the Consulting Association.

Mike Peasland: Yes. Each of these individual companies took checks from the Consulting Association. The membership was taken by one of the operating companies, Balfour Beatty Civil Engineering Ltd.

Q2242 Lindsay Roy: Good afternoon, Mr Peasland. Balfour Beatty spent thousands of pounds a year on the Consulting Association. What was the money for?

Mike Peasland: The money was for various things. There was the subscription, and there were the individual checks for referencing purposes.

Q2243 Lindsay Roy: When you say subscription, what was that for? Was it for a membership?

Mike Peasland: A membership subscription.

Q2244 Lindsay Roy: What kind of checks were done?

Mike Peasland: Basically, a name and an insurance number would be sent to the Consulting Association. Either that would not come back at all or it might come back with a comment.

Q2245 Lindsay Roy: How was it sent and how did it come back? Was it by e-mail?

Mike Peasland: I believe it was sent by fax. I am sorry; it was sent in various ways, I believe. I am not sure how it was actually sent.

Q2246 Lindsay Roy: Does it not seem strange that, first, you are not sure, and secondly, from what we understand, it was by fax and not by e-mail? You would have thought that in the last five or six years e-mail would have been used quite prolifically.

Mike Peasland: It may have been, but it probably was by fax. I think fax was the way it was sent.

Q2247 Lindsay Roy: Was it value for money?

Mike Peasland: Shall I say at the outset that we do regret the use of the Consulting Association? It should not have happened, and we apologise to all the workers and their families who were affected by this.

Q2248 Lindsay Roy: Does the company still do independent checks?

Mike Peasland: We do not do any independent checks of that sort. We have in place an ethics code of conduct that ensures that no references are taken without the individual’s knowledge, which would be the normal part of an employment referencing situation.

Q2249 Lindsay Roy: Can you explain why you used an independent company before? Again, can I probe you on value for money? Most businesses monitor very closely a value-for-money approach.

Mike Peasland: At the time, we were suffering huge amounts of disruption in our business from unlawful acts on our sites. That would have led to major issues in terms of disruption for our customers, for our staff and for our own work force. We felt that this was a way to help prevent unlawful acts on our sites from happening.

Q2250 Chair: What sort of unlawful acts are we talking about?

Mike Peasland: We are talking about unofficial action by workers and things such as harassment and bullying on our sites.

Q2251 Chair: Right. When you use the term unlawful, you have in mind violence and so on, but most of this could be described as trade union action, even if it was unofficial, rather than unlawful action.

Mike Peasland: I would say both. I have experience of both unofficial action and acts of harassment and bullying.

Q2252 Simon Reevell: What do you actually mean by an act of bullying? Give me an example so I can understand.

Mike Peasland: People being coerced into going off site when they would rather have stayed on site and done some work, people being coerced into doing their work more slowly than they normally would, and other acts such as sabotage on the projects.

Q2253 Simon Reevell: Are you saying that you were encountering an organised programme of people trying to disrupt and sabotage projects?

Mike Peasland: I could not say for certain that it was organised, but it certainly did occur.

Q2254 Simon Reevell: To what extent and by whom?

Mike Peasland: By individuals on our projects.

Q2255 Simon Reevell: In what sort of numbers? I am trying to understand this. You are going to an organisation and giving it a name and a national insurance number to see whether somebody should be employed. I am trying to understand what you are actually worried they might do if you employed them, how they would work and with whom.

Mike Peasland: The main worry was unofficial action that would disrupt the normal operation of our sites.

Q2256 Simon Reevell: But what does that mean? You have talked about whispering in someone’s ear to go slowly.

Mike Peasland: It means people not working to our programme, people leaving the site, and our site not operating efficiently and effectively, as it should do.

Q2257 Simon Reevell: Are you talking about someone being lazy and going home early, or are you talking about some sort of organised programme of disruption?

Mike Peasland: It was a programme of disruption.

Q2258 Simon Reevell: What did you believe was behind that?

Mike Peasland: Purely disobedience-civil disobedience.

Q2259 Jim McGovern: Disobedience to your company.

Mike Peasland: Yes.

Q2260 Simon Reevell: Are you suggesting that there were individuals who were targeting your company for reasons of civil disobedience?

Mike Peasland: In some cases.

Q2261 Simon Reevell: So they just didn’t like your company-so much so that they wanted to work for you in order to be disruptive.

Mike Peasland: It was not something directed purely at Balfour Beatty; this was an industry-wide problem. That is why the industry as a whole was using the services of the Consulting Association.

Q2262 Simon Reevell: So they wanted a job in the building industry in order to be disruptive in the building industry.

Mike Peasland: I cannot say for certain. I am not in the business of-

Q2263 Simon Reevell: You used the company. You must have had an idea why you used this company.

Mike Peasland: As I said, because we were keen, and felt it was important, to avoid disruption on our sites in terms of the proper operation of our site activities.

Q2264 Simon Reevell: I am trying to gauge the threat that you perceived-whether you thought there might be a few lazy people out there who, if you employed them, would not work very hard, or whether you thought there was this group of people who wanted jobs in the construction industry so they could try and bring it to its knees. I do not understand what you are saying.

Mike Peasland: The reason was unofficial action on our sites. That manifested itself in some different ways. Most of the time, it was unofficial action that meant that work stopped and people left the sites. In some cases, there was evidence that there was some harassment and some bullying.

Q2265 Simon Reevell: Is this unofficial action to a purpose? Are these pockets of things that are in concert? Is that what you are suggesting?

Mike Peasland: They may not have been linked-they may have been separate-but it is all around unofficial action on the projects.

Q2266 Simon Reevell: It just sounds a bit as if you did not want to employ anyone you thought might be slightly awkward.

Mike Peasland: No, certainly not.

Simon Reevell: You were concerned.

Q2267 Jim McGovern: I have a couple of points. We have heard evidence that people who promoted health and safety-such as safety reps on building sites who said, "We should have a toilet on this site," or, "We should have somewhere decent to sit and have a sandwich at lunch time," or whatever-were blacklisted because they were raising such issues.

Mike Peasland: We would never discriminate against people for legitimate health and-

Q2268 Jim McGovern: Remember that you are under oath.

Mike Peasland: Absolutely. We would never discriminate against people for genuine health and safety grievances. Our quality in terms of what we do on safety has improved immensely over the years. In the last 10 years our accident frequency rate has more than halved, while our man hours have actually doubled to something like 120 million man hours per year. In that time, our accident frequency rate has actually halved.

Q2269 Jim McGovern: Is that because safety reps have been snuffed out?

Mike Peasland: Not at all. We introduced ListenUp, which is a whistleblowing line that allows anybody to name or anonymously to raise issues of health and safety or any concerns at all on our projects. These are taken up and investigated by the compliance officers in our company. Health and safety performance has actually improved through the behavioural safety that we have put in place with our work force. We are looking for our work force to help us. We provide the leadership, but we are looking for the work force to raise any of these issues and, in terms of behaviour, to look after themselves and their colleagues and to help us as a company to improve our safety record.

Q2270 Jim McGovern: The second point I want to make relates to something that you mentioned earlier. You referred to the annual subscription plus a fee for each inquiry. I do not know what the annual subscription was-perhaps you can tell us that-but we have heard evidence that, for each inquiry you made about an individual, the fee was either £1.75 or £2.20. Is that accurate?

Mike Peasland: I have a fact sheet here, so I would be happy to give you that information. Our overall spend between 2004 and 2008 was £50,998.

Q2271 Jim McGovern: Was that the annual subscription?

Mike Peasland: No; that is the spend.

Q2272 Jim McGovern: What was the annual subscription?

Mike Peasland: The membership fees were £3,500 per year, and the reference fee check was £2.40 to £3 per individual.

Q2273 Simon Reevell: Sorry, could you just confirm that? I didn’t get my pen going in time. This was for 2004 to 2008.

Mike Peasland: Correct.

Q2274 Simon Reevell: What was the total spend?

Mike Peasland: It was £50,998.

Q2275 Simon Reevell: What was the annual fee?

Mike Peasland: It was £3,500.

Q2276 Simon Reevell: So £50,900 less £14,000, divided by the inquiry fee, would be the number of inquiries in four years.

Mike Peasland: It is about 15,000 checks per year.

Q2277 Jim McGovern: So, for between £2.50 and £3.50, you could prevent someone from getting a job and feeding their family.

Mike Peasland: No, the purpose of this was a reference check. It was an additional reference check to our normal reference checking. It was one of the tools we used, as we would normally do, when referencing somebody for a project. It was not the sole reason why somebody would or would not be appointed to the project.

Q2278 Jim McGovern: We have seen written evidence from people who have been blacklisted by your company and other companies where the advice is not to give them a job because they are trade union activists, shop stewards or health and safety reps. Presumably your company took that advice.

Mike Peasland: We took that advice into consideration when deciding whether or not we would employ somebody, along with the other factors of previous experience and previous knowledge of their work and skills, as you would do in a normal employment referencing situation or with a normal recruitment issue.

Q2279 Chair: Can I be clear? From the evidence we have had, some of the people involved were put on the blacklist because they had raised issues related to health and safety; that is why some of them got on to the blacklist. Also, in the evidence that we heard from Ian Kerr, he said, "The Balfour Beatty companies were particularly hard-nosed, I found". The evidence he gave us indicated that Balfour Beatty, in particular, tended just to refuse to take on people on the basis that their names were on the list-that they would not be employed if their names were flagged up at all, and that you were far worse than anybody else that he named. When we pursued him, he then mentioned some others that were baddish, but you were the baddest-as it were-which tends not to support your suggestion that this was one of the things that you took into account. We very much had the impression from Mr Kerr, both publicly and privately, that simply to have the name on the list at all was sufficient for Balfour Beatty to rule people out of employment.

Mike Peasland: That is not my understanding of what we did.

Q2280 Chair: On what do you base your understanding?

Mike Peasland: On being in the company at the time.

Q2281 Chair: You became aware of this only in 1999. Were you actually handling the forms directly and making the decisions?

Mike Peasland: No, I was not.

Q2282 Chair: So how do you know what was happening?

Mike Peasland: Through the employees who were working with me.

Q2283 Chair: So you were under the impression that they were not doing as Ian Kerr suggested.

Mike Peasland: I do not understand and am not sure what he meant by "hard-nosed". If he meant that we checked every single person on a project, I would agree that that was hard-nosed. We were a heavy user of the Consulting Association.

Q2284 Simon Reevell: If you do not understand what he meant, I can help you. He said that there were some companies-and you were one-where he would actually hold back information unless he was certain that he had the right person and the fullest information, because some people would act just on a first name or on partial information. In other words, the slightest whiff of anything and that was it: the person was not going to get the job. That was the sort of thing he was talking about.

Mike Peasland: As I said, if any information came from the Consulting Association about any issues with a person, it would come back to a senior member of our HR team and a decision would be made, as part of our recruitment agenda, as to whether or not they would be given a start.

Q2285 Chair: I can give you the whole quote from Ian Kerr’s evidence. He said, "It could be shown that some companies took a harder line, to be fair, and didn’t employ because-I think this is what you are saying-the name was there. Some would say, ‘Well, that was a long time ago’, or ‘He’s not to come along with any of the others,’-say there were half a dozen involved in a project. ‘We’ll take a chance. We will note and monitor.’ In other cases, if the information was quite old or they thought it was minor, or if they knew the person it had come from and they thought that person was too hard, too harsh, they would say, ‘We’ll take him on.’ This depended, to a degree, on the company’s philosophy. Some were more hard and earnest than others." In a later part of the evidence, he says, "The Balfour Beatty companies were particularly hard-nosed, I found". That does tend to indicate that you were the hardest of all. It has been suggested to us-again, this is from other conversations-that if somebody’s name appeared on the list that was it. It was not a question of taking other things into account-the whiff of suspicion was sufficient.

Mike Peasland: It is difficult to comment on that, because I do not know what others were doing and how they acted. If that is Mr Kerr’s evidence, that is Mr Kerr’s evidence.

Chair: That is right, but Mr Kerr’s evidence was based on the companies reporting back on whether or not they took people on. He was the one person, as it were, who was in the centre of the web and would be able to compare and contrast. It is perhaps significant that he saw you as particularly hard-nosed.

Q2286 Mr Reid: Earlier you used words such as "coerced", "harassment" and "bullying" to refer to things you were concerned about. Have there been experiences on your sites of coercion, harassment and bullying involving violence or threats of violence?

Mike Peasland: Yes, there have.

Q2287 Mr Reid: Actual violence.

Mike Peasland: Yes.

Q2288 Mr Reid: When information about an individual came back from the Consulting Association, would it include allegations that that person had been involved in violence or making threats of violence?

Mike Peasland: The information would come back as cleared or not cleared. In fact, potentially, if it was cleared, it would not come back at all. If it was not cleared, it would come back and there would be a discussion about that.

Q2289 Mr Reid: You say that there would be a discussion. So the information that came back was not black and white; it involved a discussion. Was that discussion within Balfour Beatty, or backwards and forwards with Mr Kerr?

Mike Peasland: That would be from Mr Kerr’s organisation back to us. Then internally we would make a decision ourselves as to whether it was appropriate to employ that person, subject to other information that we gleaned on that person through normal recruitment methods.

Q2290 Mr Reid: So the information that came back from Mr Kerr might say "cleared". If it did not say "cleared"-if it said that the individual was not cleared-would it give the reason for their not being cleared?

Mike Peasland: He would come back and explain verbally why that was.

Q2291 Mr Reid: Would that be on the telephone?

Mike Peasland: Yes.

Q2292 Mr Reid: Did that information sometimes say that individuals had been involved in threatening violence or acts of violence?

Mike Peasland: I do not know the detail of what that information would have been. I was not directly involved in that.

Q2293 Mr Reid: Can you tell us which employees within the company would have been directly involved in talking to Mr Kerr on the phone?

Mike Peasland: These were individuals who were following company procedure. If you need to know the names, the names can be provided.

Chair: Fine. It would be helpful if you gave us these names after the meeting.

Q2294 Mr Reid: Did a central unit deal with Mr Kerr, or did different projects have different units?

Mike Peasland: It would be done centrally within each of the operating companies.

Q2295 Mr Reid: But they all had to follow a policy issued by the company.

Mike Peasland: Each of the operating companies had individual policies.

Q2296 Mr Reid: Were those individual companies’ operating policies in writing?

Mike Peasland: There were procedures within each of the individual companies-

Q2297 Mr Reid: Would you be able to send us copies of those procedures?

Mike Peasland: If they are available, we will send those.

Chair: That would be helpful.

Q2298 Simon Reevell: Why might they not be available?

Mike Peasland: Because that is not something that we have now. Since 2009 we have totally revamped our policies. Our data protection policy has been redone, our ethics code of conduct has been redone-

Q2299 Simon Reevell: If they exist, you will send them. You understand that there is a difference between saying you will send them if they exist, and saying you will send them if they are available.

Mike Peasland: Okay.

Q2300 Graeme Morrice: I want to follow on from the discussion about disruptive behaviour, as you put it, on work sites by certain individuals, which you suggested might be undertaken in a concerted way. You used the term "civil disobedience" as well. Obviously this was your perception or belief, but you never actually said why all this was happening. Why did people do it? If it was indeed happening-and you are making these allegations-to what end was it happening?

Mike Peasland: In my personal experience, some of these projects were around the millennium-the end of the century-so the ability to disrupt the projects and for them therefore not to be completed on time was a big issue for the individual companies. The issue around creating that disruption was for the disruption itself, but obviously additional payments to complete by the millennium were another issue.

Q2301 Graeme Morrice: I am sorry, but I am not sure what you mean by that last point. Do you mean that, the longer it took, the more it cost the company?

Mike Peasland: No, I meant that there would be accelerated and additional payments to ensure that it did finish on time.

Q2302 Graeme Morrice: Are you suggesting that people were holding things up so that, the longer it took, those employees-we are talking about employees, not subcontractors-would end up benefiting financially as a result?

Mike Peasland: Yes.

Q2303 Graeme Morrice: Is that civil disobedience?

Mike Peasland: I am not a lawyer. I probably used the wrong term; I apologise if it is not-

Chair: "Capitalism" might be a way of describing it.

Mike Peasland: I know I’ve got a blue tie on, but-

Graeme Morrice: I thought that, when you referred to civil disobedience, you were suggesting that people were trying to bring down capitalism by joining a company and helping with a few building projects-but perhaps not.

Q2304 Chair: Can I be clear? I think that you are saying to us-understandably, if I have got this right-that the actions that were being taken through unofficial strikes and so on were costing you money, that you were incurring penalties on contracts, late payments and so on, and that this was an investment to try to save you money, to make sure that you did not incur those other expenses.

Mike Peasland: They were disrupting our clients, our own staff and our own work force. Obviously customers themselves-our clients-do not want disruption on their jobs. This was industry-wide at that time. Why it was used cannot be justified-again, we regret the use of the Consulting Association-but, if we had not been using it and had been subject to more disruption than others, it could have affected us in terms of our projects.

Q2305 Lindsay Roy: Can you give us instances of disruption and the costs that were incurred?

Mike Peasland: I can give you instances of disruption. The costs, to an extent, are very subjective.

Q2306 Chair: How do you know there were costs, then? We are assuming that-

Mike Peasland: If the project overruns, obviously we have costs.

Q2307 Lindsay Roy: A penalty clause.

Mike Peasland: You have your own costs in the prolongation of the project, your own costs if you have to accelerate back to finish near the completion date, and the costs of liquidated damages, which would be coming from our customer.

Q2308 Lindsay Roy: At what level in the company was this spend authorised?

Mike Peasland: Which spend?

Q2309 Lindsay Roy: At what level in the company was this expenditure-the investment with the Consulting Association-authorised?

Mike Peasland: It was done within each of the individual operating companies, through the HR departments.

Q2310 Lindsay Roy: So the chief executive knew about it.

Mike Peasland: When I was at Balfour Kilpatrick as the managing director, I knew about it.

Q2311 Lindsay Roy: I assume the same would be the case with other companies.

Mike Peasland: The managing directors of the other companies would know about it.

Q2312 Lindsay Roy: You said there were around 15,000 checks a year. How many people were embargoed from working for Balfour Beatty and its associated companies over that period, roughly, per year? How many were blacklisted?

Mike Peasland: I do not actually have information about how many we did not take on.

Q2313 Lindsay Roy: I would have thought that, as a business that was concerned about value for money, you would have kept a check on that-how effective the system was, what the purpose was and whether the purpose was being achieved.

Mike Peasland: We kept a list of those who were cleared, so that if they came up for employment again we did not pay for the check again.

Q2314 Lindsay Roy: I would have thought that, as part of the monitoring, you would have known who these people were and what the focus of the concern was-whether it was unofficial action, health and safety, or whatever.

Mike Peasland: We would look at each individual project. As I said, we would clear everybody on every project. This was a sort of standard procedure within the company, so we would do a clearance procedure for everybody and check everybody every time. Skills and so on are different for different projects. We would be looking at different skills.

Q2315 Lindsay Roy: Did you feed information into the Consulting Association?

Mike Peasland: We did.

Q2316 Lindsay Roy: How frequently?

Mike Peasland: We have very limited information on what that was, but I am aware that information was passed to the Consulting Association from us in 1999 and 2000.

Q2317 Lindsay Roy: Why is the information limited?

Mike Peasland: I have no evidence of it. There could have been more than that; I am just not able to tell you, because I do not know.

Q2318 Lindsay Roy: Was this a covert operation, then? Given the way in which businesses operate, you would have thought that it would be up front-that the expenditure and the value for money would be there to highlight any dividends to the company from this process.

Mike Peasland: The costs of it were up front and were put through the system. Invoices came from the Consulting Association and we paid the Consulting Association. That went through the books of each of the individual operating companies.

Q2319 Chair: In terms of the way in which the accounting was done for this, can I clarify whether it was charged against particular projects? If you were building a school in, say, Coatbridge, they were proposing to take on 30 people and sent off names, the names were faxed in and so on, and the invoice came back, would that be charged against that project?

Mike Peasland: No. It was held centrally in the individual operating companies.

Q2320 Chair: Right. When we spoke with Skanska, it indicated that it would be charged to individual projects. You are saying that you did not do that.

Mike Peasland: No.

Q2321 Chair: Are you able to tell us from the records that you have which projects did use the Consulting Association, so that we are able to identify schools, hospitals or any other projects that you did?

Mike Peasland: As I said, generally it was used as a standard procedure through the business, so we did it on all our projects. If you have any specific projects in mind, we can check back.

Q2322 Chair: No. I think that covers it, if you are saying that you did it on all your projects.

Mike Peasland: We did not discriminate according to whether it was a private project or a public project, or whether it was a big project or a small project.

Chair: Fine. Skanska said something different to us. We just wanted to clarify that.

Q2323 Lindsay Roy: Was it also done through subcontractors? Did you engage subcontractors in that process as well?

Mike Peasland: Yes, in a very limited way. It was not a standard procedure to involve subcontractors. Subcontractor selection is done in a different way, through the companies themselves, looking at the various elements-as well as price, their ethics, their sustainability, their health and safety record and so on. We look at the company or subcontractor holistically, rather than at individual members of that subcontract organisation.

Q2324 Lindsay Roy: Could subcontractor employees not have brought disruption to sites?

Mike Peasland: That may have been the case, but we employ subcontractors at varying levels. We have an approved subcontractor, which is the bottom level. Then you go up the list to a preferred subcontractor, and from there to a strategic subcontractor. These are subcontractors that are all known to us and used on our projects on a regular basis.

Q2325 Pamela Nash: You said that there was no physical evidence left of the checks, but have the people who were carrying out the checks on behalf of Balfour Beatty been asked for any evidence about this at any stage?

Mike Peasland: I am not sure whether they have-[Interruption] Yes, they have.

Q2326 Pamela Nash: Has that now been taken down as written evidence within Balfour Beatty?

Mike Peasland: I am advised that that is legally privileged and I cannot answer that question.

Q2327 Pamela Nash: You also mentioned that 15,000 checks were carried out per year.

Mike Peasland: On average, obviously.

Q2328 Pamela Nash: You said that, while you did not have a record of those who had been denied employment, you did have a record of those who were cleared by that check. I guess a simple subtraction would be able to tell us how many people had been denied employment as a result of those checks. Would you be able to provide us with the figures for how many were given employment after you were told that they were not on the blacklist?

Mike Peasland: We could look into that.

Q2329 Chair: You say you could look into that. We want to be quite clear that you will look into that.

Mike Peasland: We will look into it. If we have that information, we will provide it.

Q2330 Pamela Nash: If you do not, will you tell us that, too?

Mike Peasland: Correct.

Q2331 Pamela Nash: I would also be interested to see whether there are any examples within the company, or at least within the memory of the company, of persons who were granted employment despite being found to be on the blacklist. Earlier you were very clear when you said that your understanding of the working of the blacklist was dependent on the information that was in the file, not just the fact that someone was on it. For us to see that, it would be good to see whether people who were found to be on the blacklist were subsequently given employment. Are you aware of any examples of people who were given employment?

Mike Peasland: There are examples. We will provide that information if we have it.

Q2332 Pamela Nash: Okay. You said that all projects were checked through the Consulting Association. Just to be clear, was that the case in every single operating company within Balfour Beatty?

Mike Peasland: Yes, in the six companies I named.

Q2333 Chair: I am sorry, but I did not catch that. In the ones that were what?

Mike Peasland: I gave you the names of the six companies.

Chair: Oh yes.

Pamela Nash: So that was the case in all six companies.

Q2334 Jim McGovern: Can we move on to subcontractors?

Mike Peasland: Are we on-? I thought we were talking about something else. Are we talking about subcontractors?

Pamela Nash: I wasn’t, but-

Chair: No, not at the moment. We are on the question of the main companies. I will come back to that, Jim.

Q2335 Pamela Nash: We were talking about public sector projects. Just so we are clear, even though you said it was used for all the projects you worked on, can you give us a list of all the public sector projects you have worked on that have used blacklisting, or sought the services of the Consulting Association?

Mike Peasland: From when to when?

Q2336 Pamela Nash: Until you finished using the blacklist.

Chair: From the beginning of the Consulting Association until the end. That should be perfectly straightforward. You are bound to have a record of the jobs you have worked on.

Mike Peasland: Yes. I was thinking about the number of projects, but yes, if we can provide that, we will.

Q2337 Pamela Nash: That is what concerns us-whether there will be a long list of projects.

Mike Peasland: We are a major company. We are the biggest construction contractor in UK.

Chair: That is right. We understand that. The fact that you have a footprint in a whole number of areas means that the blacklisting of workers was not confined to single areas, so there are a large number of areas of the country where people might have been blacklisted. We want to pick that up.

Q2338 Pamela Nash: I am sure you will appreciate that a lot of our colleagues in local government are now concerned that they have been employing companies using the blacklist for projects in their area, so I would ask for us to have the detail of the list down to that level. I would like to return to the line of questioning that Mr Reevell and Mr Morrice pursued earlier about unlawful disruption, civil disobedience, capitalism or whatever we are going to call it now. You said a lot of this was about employees trying to drag out a project, maybe to get a bonus or extra money. Can you provide us with the link to the information that was held on the blacklist, given that the information on the blacklist was mostly about someone’s trade union membership or reporting health and safety problems on the construction site? How would that help you prevent that disruption?

Mike Peasland: Again, we would not discriminate against anybody for being a member of a trade union. We have good relationships with the trade unions, but obviously our relationship with the unions has been somewhat tarnished by this whole process. That is something that we need to address, but we have always had good relationships with UCATT, Unite and GMB. We intend to repair any damage that has been done to those.

Q2339 Chair: Can I clarify that? You had good relationships with these trade unions while you were actually blacklisting some of their members. At the time when you were blacklisting them, you were not open and honest with those unions and telling them that you were doing blacklisting: you were doing it in a sort of organised conspiracy. Would your relationships with the unions involved have been as good if you had told them that you were blacklisting people?

Mike Peasland: It is a hypothetical question. As I said, we regret the use of the Consulting Association and the issues that have been caused. Again, we apologise to all the workers who have been affected by our using the Consulting Association.

Q2340 Pamela Nash: I do not think it is a hypothetical question, but I think it is one for your trade union colleagues, who might be able to answer it. You said earlier that Balfour Beatty had also contributed information to the Consulting Association blacklist. Did you say that that ended in 2000 and that you had records only up till then?

Mike Peasland: That is the only evidence I am aware of that we contributed names to the Consulting Association.

Q2341 Pamela Nash: Do you have a record of the information that was provided to the Consulting Association at that point?

Mike Peasland: There will be, but it will be subject to the ICO and so on.

Q2342 Chair: I am sorry, subject to what?

Mike Peasland: The Information Commissioner’s Office. All that information is beyond use.

Pamela Nash: In terms of its being published, but could we not have access to it?

Q2343 Chair: Can I be clear? You are saying that the only records of which you are aware are those actually held by the Information Commissioner.

Mike Peasland: Yes.

Q2344 Chair: I was not clear about whether you said that you as a company had information about the names that you had submitted to the Consulting Association. Which is it? Do you still retain information yourselves, or is the only place that the information exists-

Mike Peasland: There is information retained, which is put beyond use because of the pending legal action that is to take place. We have complied with the enforcement notice of the ICO and put the information beyond use.

Q2345 Chair: When you say "put beyond use", what does that mean?

Mike Peasland: It means that it is parked up and that, since the ICO closed down the Consulting Association, none of that information has ever been used. There has been no-

Q2346 Chair: Ian Kerr told us that he burned a lot of stuff. That has put it beyond use. That is slightly different from your putting it beyond use: as I understand it, you have retained it and still have it.

Mike Peasland: And the ICO is aware of that.

Q2347 Pamela Nash: It would be interesting to know what information Balfour Beatty gave to the Consulting Association. Most of the files that the Committee has seen have contained information about trade union membership, health and safety reps or people reporting health and safety incidents, so you can understand why the Committee is interested to see whether that sort of information was given by Balfour Beatty.

Mike Peasland: I appreciate that, but I can only reiterate that we would never discriminate against anybody who was a bona fide member of a trade union and would never discriminate against anybody who had bona fide health and safety issues. We would want to-

Q2348 Pamela Nash: I am still not clear about what exactly you were looking for on the blacklist when you were looking for evidence.

Mike Peasland: We were looking for people who were likely to disrupt our projects.

Q2349 Pamela Nash: What information would tell you whether they were likely to disrupt?

Mike Peasland: Potentially, some information that would come back from the Consulting Association, which we would then take into account with the rest of the recruitment process, and our knowledge of that person from other jobs where they may have worked with us.

Q2350 Pamela Nash: What specific information would you be looking for on someone’s file on the blacklist that would indicate to you that they would be likely to disrupt a job?

Mike Peasland: We would not be looking for specific information; it would depend on what information came back. We would have no prerequisite for the information we were asking for; it was just a question of sending a name and a national insurance number. We did not say on what basis. We waited to see what information, if any, came back from the Consulting Association. We would then make a decision based on that and the other information that we took into account.

Q2351 Pamela Nash: Are you saying that if, like the majority of cards that the Committee has seen, a person’s record just said that they were a member of a trade union or a political party, or that they had reported a health and safety incident in the past, that person could continue to get employment with Balfour Beatty?

Mike Peasland: That is correct.

Q2352 Pamela Nash: But you have not given me any examples of what could be on that file that would prevent someone from getting employment.

Mike Peasland: As I said, the examples of reasons for not getting employment were about disruption-disrupting the projects.

Q2353 Simon Reevell: What were the words?

Pamela Nash: Yes, what would it say?

Mike Peasland: I could not say what exactly it would say.

Q2354 Pamela Nash: Do you mean that they had caused disruption in the past? Would there be anything else?

Mike Peasland: It would be about what they had done in the past.

Q2355 Mr Reid: Did information saying things like, "On a previous site, this individual threatened other workers," come back from the Consulting Association about people?

Mike Peasland: I do not have actual information on the individual things that were said-on exactly what was said.

Q2356 Mr Reid: Did anything ever come back from the Consulting Association on any individual that said, "This individual has disrupted a site"?

Mike Peasland: That would be the nature of the information that would come back.

Q2357 Mr Reid: Are you saying that, on at least one occasion, information did come back from the Consulting Association saying that an individual had disrupted a site?

Mike Peasland: I would say that that would be the case probably on more than one occasion.

Q2358 Jim McGovern: You said that your company’s use of the services of the Consulting Association would be clear on the books. I suppose that is fair comment, but were the people who were blacklisted aware that they were being blacklisted? We have heard evidence here from people who have said, "I just wondered why I couldn’t get a job. I’m a fully qualified sparky living in Dundee, but I had to spend years and years away from my family, and I’ve only found out since then that I was on a blacklist." You talk about transparency, but were the people who were blacklisted by your company aware that they were on a blacklist?

Mike Peasland: The people we did not clear through our processes were not aware of that. The central location would go back to the site and say "not cleared"; that would be the limit of the information. It would not go to the individual.

Q2359 Jim McGovern: We have seen information here: we have it on paper. All that was on the list for one person, an electrician, who gave evidence to the Committee was a name, a national insurance number and "not wanted". Does that sound fair?

Mike Peasland: It certainly does not. As I said, we are highly embarrassed by the whole issue around using the offices of the Consulting Association. It is something we are not proud of. As I said, we apologise to those workers for the issues that have occurred.

Q2360 Jim McGovern: I am sure you are aware that there was a House of Commons debate on this issue fairly recently. One of the Members said that, because he had been jailed during the miners’ strike in the mid-’80s, his wife could not get a job. She was on a blacklist because of his trade union activities. Does that sound fair to you?

Mike Peasland: Certainly not.

Chair: Before I ask Graeme-I am sorry.

Mike Peasland: It is all right. I was just going to say again that we would not discriminate against anybody for being a member of a trade union. As I said, we work with the trade unions, not against them.

Q2361 Chair: Graeme wants to come in, but could I follow up on a couple of the points that have been touched on? Unless I am mistaken, you have said to us that you still have files, which you have put beyond use. Are these files on workers you yourselves refused to employ, on workers whose names you put in to the Consulting Association, or both?

Mike Peasland: I am not sure-[Interruption] We do have information on the ones we checked through the system. The ones we are talking about as not cleared are taken from information from our people. There is not a list for that.

Chair: I am sorry, but I am not clear.

Q2362 Jim McGovern: Whether or not the people who were on the blacklist were informed at the time, I think you said that you had retained the names of the people who were on that list, although it is not used now. Do you intend to inform those people, "You were on this list"?

Mike Peasland: I think that, again, that is subject to-

Jim McGovern: Your lawyer.

Q2363 Simon Reevell: Can you tell us why it is? The question you have been asked is: are you going to inform some people whose names you hold of the circumstances in which you hold the names? If you are saying that there is some sort of privilege attaching to the answer to that question, perhaps you would explain why.

Mike Peasland: I am not a lawyer.

Simon Reevell: No, but Mr de Freitas and I both are.

Chair: We are not going to have a dispute between lawyers, because life is too short.

Simon Reevell: I am just asking the witness to answer the question-or to provide us with an explanation of why he cannot.

Q2364 Chair: Maybe I can cut to the chase more quickly. I have been allowed by the Information Commissioner to see, with a member of my staff, the files that he has. I have seen them all, under conditions of confidentiality. I want to see yours, under the same conditions, and to clarify exactly what you have, so that at some stage in the future it can inform our discussions and dialogue. If you wish, we will do this in private at the end of the meeting, but what has become clear to me is that you, unlike the other firms, seem still to be retaining files on employees. We want to get to the bottom of this. Maybe we can lay it to one side at the moment and discuss it in private at the end. The other point I want to be absolutely clear on, which I am not at the moment, is whether or not you systematically ran the names of contractors’ staff through the Consulting Association. I am presuming that you were advised before you came along to this meeting about what other people have been asked and so on.

Mike Peasland: Yes.

Q2365 Chair: Other people have told us that there were circumstances in which the names of contractors’ staff had to be submitted to the main contractor and were then run through the Consulting Association. Did you do that?

Mike Peasland: There were instances where that did occur, yes.

Q2366 Chair: Right. Subsequently you would go back and tell the firms involved that such and such an individual was not acceptable on your site.

Mike Peasland: Correct.

Chair: Fine. I wanted to be clear about that as well.

Q2367 Graeme Morrice: You said earlier that you would not have discriminated against anyone on the basis of their trade union membership or of reporting a legitimate health and safety concern, but that you would look at those who had been involved in previous disruption. Occasionally there would have been instances of involvement in official trade union industrial action. Would you have discriminated on the basis of that kind of disruption?

Mike Peasland: Not for legitimate trade union activity.

Graeme Morrice: So categorically no.

Mike Peasland: From the evidence I have and in my own personal experience, that would be the case.

Q2368 Graeme Morrice: You said right at the beginning that there were instances of individual disruption but also of concerted disruption on sites. Were you suggesting that that concerted action involved the trade unions in any way?

Mike Peasland: No.

Q2369 Graeme Morrice: Would it involve trade union members?

Mike Peasland: I presume that some may have been trade union members.

Chair: As you would imagine, we have been briefed as well, so we have a list of questions that we wanted to cover. Graeme, can you pick up question 8, about meetings?

Graeme Morrice: Question 8 has been asked umpteen times by several different members.

Chair: Sorry, I meant question 9.

Q2370 Graeme Morrice: Mr Peasland, can you confirm that it was the case that representatives of Balfour Beatty attended meetings of the Consulting Association?

Mike Peasland: Yes.

Q2371 Graeme Morrice: Can you elaborate on the kind of meetings, the occasions, the frequency, what representatives of Balfour Beatty were involved and at what level?

Mike Peasland: We were involved in meetings of the Consulting Association. These would be forum meetings and meetings that would be attended by a cohort of senior HR managers from individual companies.

Q2372 Graeme Morrice: What kind of meetings were these? Were they information exchange meetings? Were they to discuss the operation of the Consulting Association? Were they to discuss policy? Were they to discuss future work streams?

Mike Peasland: These would be meetings to discuss the general atmosphere or the general nature of industrial action across projects in the UK-a general exchange of information on industrial action across sites in the UK.

Q2373 Graeme Morrice: Did you attend any of these meetings?

Mike Peasland: No, I did not personally.

Q2374 Graeme Morrice: Were people at a senior level of your company at the meetings?

Mike Peasland: It would be the HR members of the individual operating companies.

Q2375 Graeme Morrice: Were there regular reports back to the chief executive officer, the board of directors and other senior managers within the company?

Mike Peasland: There was no regular, detailed or written information that went back into the company. It was done through the HR people.

Q2376 Graeme Morrice: Did you meet any politicians at the time to discuss the issue of blacklisting?

Mike Peasland: No, I did not.

Chair: I am sorry, but you are not here just as an individual.

Mike Peasland: I am not aware that the company met any politicians.

Chair: In Scots there is sometimes the term "youse", which is the second person plural. When we say "you", we mean "youse", if I can use that term.

Mike Peasland: If you had made it more explicit and said "youse yins", I would have understood what you were saying.

Chair: We may go on to say "youse bad yins"-but we will leave that aside for the moment. You are here as a representative of the company.

Mike Peasland: Correct.

Chair: You are therefore here not simply as an individual, so we expect you to speak on behalf of the company as a whole.

Mike Peasland: Absolutely. All I was trying to do was to evidence things, where I can, through my personal involvement, but you are right-I am representing the company as a whole.

Q2377 Graeme Morrice: Were there any meetings with the police or the security services?

Mike Peasland: There is no evidence to suggest that there were any meetings with the police or security services.

Q2378 Graeme Morrice: You say that there is no evidence, but were there any meetings?

Mike Peasland: Not that I am aware of, and not that the company is aware of.

Graeme Morrice: So that is a no.

Mike Peasland: That is a no.

Q2379 Chair: Well, there was; we know that there was. To the best of my recollection, I believe that representatives of Balfour Beatty were there. How can this be?

Mike Peasland: I am not aware of that.

Chair: If you do not know that-

Graeme Morrice: You should not have said no.

Q2380 Chair: If you do not know that, what confidence can we have in the trawl for information that you have undertaken? I will go and check, but I am pretty certain that Balfour Beatty was represented at the meeting referred to last week in the evidence from Skanska, at which it met an organisation in the police whose initials I forget; I am being told that it was NETCU. I am not quite sure what the initials stand for, but basically it is the police unit against bad people, extremists and stuff like that. I am being told that it is the national extremism tactical co-ordination unit. I would add that the "T" is not for Trotskyists, although it could very well have been. We understand that Balfour Beatty were there, although we will check that. You have been asked that specifically and you have given us an answer that is incorrect. I am quite prepared to accept that you might have been unaware of the meeting, but it does cast doubt on the extent to which you are reasonably speaking on behalf of the company.

Mike Peasland: We have no record of that and no access to these files that you have. We as a company are unaware of that.

Q2381 Chair: How thoroughly, then, were you prepared and briefed for this? Given that we discussed this last week with Skanska, I would have thought that those staff working on your behalf would have run that question past those who might have been at various meetings, to check what their recollection was. Presumably you know that we are likely to ask you whether or not you have any minutes remaining of the meetings of the Consulting Association, and if so, whether we can have them. Presumably you have been prepared for that.

Mike Peasland: Absolutely.

Chair: So I am surprised you have not been prepared for this one.

Mike Peasland: I am certainly not aware of that particular issue.

Q2382 Jim McGovern: I know you have your lawyer sitting next to you, but constantly saying, "There is no evidence," or, "There is no record," does not mean that something did not happen, does it?

Mike Peasland: It is trying to be categorical. If you are being categorical, you go through all the information you’ve got, everything that you’ve checked and everything you are aware of. Therefore, if there is no evidence you are not aware of it-but you cannot be absolutely cast-iron certain that something did not happen. I have given you the best information I can give you.

Q2383 Jim McGovern: We have heard evidence that the Consulting Association was set up with money from Sir Robert McAlpine Ltd, and Cullum McAlpine has given evidence here-if my memory serves me correctly-that he chaired the meetings. I think you have just said that the people from Balfour Beatty who attended the meetings were there to discuss how it was progressing, industrial unrest and so on. If my memory serves me correctly, Cullum McAlpine said that these meetings only discussed finance.

Mike Peasland: These are separate meetings. There would be a meeting of the finance committee and there would be the general meetings that took place with the HR people. There was a finance committee-

Q2384 Jim McGovern: Were both formal? Did Cullum McAlpine chair both of them?

Mike Peasland: Cullum McAlpine will have chaired them. I think he did say that he chaired them for a time.

Jim McGovern: Yes, but he said that they only discussed finance. You are saying that they discussed industrial relations and industrial unrest.

Mike Peasland: The finance meetings only discussed finance.

Jim McGovern: Yes, but there were other meetings.

Mike Peasland: There were other meetings that took place.

Jim McGovern: Chaired by Cullum McAlpine-

Mike Peasland: There was a revolving chair, so there would be different people chairing those meetings. Those forum meetings would be chaired by a revolving chair around the companies.

Jim McGovern: Of which McAlpine was one.

Mike Peasland: McAlpine would have been one of those companies.

Jim McGovern: So someone is not being quite up front.

Q2385 Chair: Balfour Beatty also chaired the Consulting Association at one point, did it not?

Mike Peasland: It did-we did.

Q2386 Chair: Why was Balfour Beatty willing to take the chair of this, rather than just be passive members?

Mike Peasland: It was just part of the industry-wide issue in supporting the Consulting Association. The industry was involved, so it was appropriate that the chair of these meetings was spread around the companies that were involved.

Q2387 Chair: Right. However, from recollection, there were only four or five companies that had the chair. You were obviously one of the main users, protagonists and drivers of the Consulting Association during its life. Is that fair?

Mike Peasland: We were heavy users of the Consulting Association, as were some of the others that you have mentioned, on the basis that we are all major companies within the UK. That is the reason we were heavy users.

Q2388 Pamela Nash: Can I ask a further question about your obligations as one of the main members? We spoke earlier about Balfour Beatty providing information for the blacklist. While you do not have evidence of that past 2000, was there an obligation on you as a member to provide information?

Mike Peasland: There was no obligation to provide information.

Q2389 Pamela Nash: Was there an unofficial obligation? Was there an expectation that you would provide information on certain criteria?

Mike Peasland: No; there was not any expectation or any obligation on the companies to do that.

Q2390 Pamela Nash: How did it work, then? How did the Consulting Association ensure that it had enough information on the blacklist to make it a value-for-money membership for companies?

Mike Peasland: I think that that was one of the issues: there were no checks and balances on the Consulting Association by any of the members.

Q2391 Pamela Nash: But how could it guarantee that it had enough information if members were not obliged to put in information? If I were setting up the Consulting Association, there would be an obligation on members to provide information to put into the files, as well as the ability to purchase information out of them. I cannot understand how it would be able to operate a business model if it was not guaranteed incoming information.

Mike Peasland: I can only tell you that there was no obligation on the members to provide information.

Chair: But you did.

Mike Peasland: But we did.

Q2392 Lindsay Roy: Did Balfour Beatty try to have some kind of formative input into shaping how the Consulting Association operated?

Mike Peasland: We were not part of setting up the Consulting Association.

Lindsay Roy: No, but as a member-

Mike Peasland: We were a member of it. At the meetings, questions would be asked of Mr Kerr about the operation of his business, but Mr Kerr very much ran the business. It was down to him to do that.

Q2393 Lindsay Roy: Did Balfour Beatty indicate any ways in which it thought the Consulting Association could be more effective in what it was trying to do?

Mike Peasland: Not that I am aware of.

Q2394 Chair: But you did have the chair for a period. Presumably the chair did not just sit there and chair the meetings. Presumably he was helping to drive it forward and being the member of the board, as it were, to whom Ian Kerr would respond in the first instance.

Mike Peasland: It would be chairing the meeting and chairing on the finances of the company-what the finances were, what the balance sheet looked like and whether it was a viable business. Those would be the issues. The running of the company was down to Mr Kerr.

Q2395 Lindsay Roy: But there was more than that. There were meetings about its effectiveness in terms of identifying those who might want to disrupt construction businesses.

Mike Peasland: That would not be the case for the finance committee.

Q2396 Lindsay Roy: No, but you have already indicated that there were other committees that met.

Mike Peasland: Those were about general industrial action. There was no mention of individuals in any of those meetings.

Q2397 Lindsay Roy: Did Balfour Beatty chair any of these meetings?

Mike Peasland: As I said, there would be a revolving chair, so we would have chaired some of those meetings.

Q2398 Lindsay Roy: Are you suggesting to us that you had no input into trying to make this operation more effective? Were you happy with the way things were organised?

Mike Peasland: In general, it did what it did-yes.

Q2399 Simon Reevell: If I am right, you have told us that in 1999 and 2000, certainly, you fed in information about people. You know that because, for those two years, you have the information. Is that right?

Mike Peasland: That is correct. We have the information, which has been gleaned from our people.

Q2400 Simon Reevell: You do not know whether you fed in information in other years, because you do not have the data.

Mike Peasland: That is correct.

Simon Reevell: If there are any data.

Mike Peasland: That is correct.

Q2401 Simon Reevell: You told us that there was no obligation on a member company to feed in information.

Mike Peasland: Yes.

Simon Reevell: Who at Balfour Beatty decided that Balfour Beatty would begin to feed in information, and when was that decision made?

Mike Peasland: I do not know the answer to that. I can only talk for the ones that I know about-

Q2402 Simon Reevell: I am talking the policy. There was a point where Balfour Beatty as a member did not feed in information, nor was it obliged to. A decision was made that, although there was no obligation to feed in information, information would be fed in. That decision must have been taken before 1999, because in 1999 information was fed in.

Mike Peasland: Correct.

Q2403 Simon Reevell: What I am asking is: who made that policy decision and when?

Mike Peasland: I do not know the answer to that.

Simon Reevell: Can you find out?

Mike Peasland: If we have the information, I will provide it.

Simon Reevell: Presumably you will be able to find out by asking people.

Mike Peasland: Correct.

Q2404 Simon Reevell: You have referred to Mr Kerr’s organisation, but it wasn’t Mr Kerr’s organisation, was it?

Mike Peasland: The Consulting Association was Mr Kerr’s business.

Q2405 Simon Reevell: How was it funded?

Mike Peasland: There were initial set-up funds. Then it was funded by-

Q2406 Simon Reevell: Who provided the initial set-up funds?

Mike Peasland: From the evidence I have heard, McAlpine provided that.

Q2407 Simon Reevell: Other companies became a part of it and funded it through an annual fee, and the finance committee made all the decisions.

Mike Peasland: I think the finance committee was there to ensure that the company that was running was still a viable business.

Q2408 Simon Reevell: So it is not Mr Kerr’s organisation in the sense that a shopkeeper owns and opens a shop and sees who comes to do business. Mr Kerr is working on behalf of the companies that, between them, are funding the organisation.

Mike Peasland: Through the check-off, we were receiving a service for which we paid.

Q2409 Simon Reevell: But you were also instrumental in funding it through an annual fee. I am trying to draw the distinction between Mr Kerr knocking on your door to say, "I’ve got my business here. This is what I do, and I want to do it for you," and you saying, "Thank you, we’ll have some of that," and people putting something together and sticking Mr Kerr in the middle of it. This was the latter.

Mike Peasland: It depends on how you see the fee. The fee could be seen as a cash-flow issue-to help the cash flow of the business, and for a minimum amount of checks in the year. The remainder was then the individual checks. It is a moot point what a membership fee actually is.

Q2410 Simon Reevell: Who had the greater authority-Mr Kerr or the chairman of the finance committee?

Mike Peasland: Mr Kerr.

Q2411 Simon Reevell: So Mr Kerr’s decisions go, as far as all these arrangements are concerned.

Mike Peasland: As far as I am aware.

Q2412 Chair: Are you aware of the evidence from Mr Kerr in which he says, "I was asked to become its salaried Chief Officer and I signed a Contract of Employment to this effect"?

Mike Peasland: We can find no evidence of any involvement by Balfour Beatty in terms of the contract set up with Mr Kerr.

Q2413 Chair: To be fair, that was not quite what I asked you. The written evidence that we have had from Ian Kerr, which you should either have seen or have had drawn to your attention, makes quite clear that the Consulting Association started out of the services group, which was operated by and within the Economic League, of which you were members. We have already had evidence, of which you will no doubt be aware, from Cullum McAlpine that the services group decided to keep going and then decided to employ Ian Kerr, so that Ian Kerr was an employee, rather than the principal of a business. Is that news to you?

Mike Peasland: I saw Mr Kerr as being the owner of the company.

Chair: I just want to make it clear that that is incorrect and is contradicted by the evidence. Maybe you ought to have been briefed, either by your legal advisers or by someone else, about what the position was.

Q2414 Simon Reevell: Am I to understand that your evidence is that, at a time when you were an MD of a company that was dealing with this organisation, you believed that you were dealing with a private company owned by Mr Kerr?

Mike Peasland: That is correct.

Q2415 Simon Reevell: Did your colleagues in other Balfour Beatty companies at the same level to whom you spoke about this indicate a similar belief?

Mike Peasland: I did not speak to any of my colleagues in other parts of the business about it.

Q2416 Simon Reevell: Did your belief that you were dealing with a private company owned by Mr Kerr change at any point?

Mike Peasland: No. I saw that this was a company whose services we used and that we paid for those services, partly through a fee and partly through a payment per person that went through the checking procedure.

Q2417 Simon Reevell: So your understanding was that, on about 15,000 occasions per year, you went to an independent private company for data that contributed to your decision about whether or not to employ someone.

Mike Peasland: That is my understanding.

Q2418 Simon Reevell: We are talking about 2004 to 2008, because we have these 15,000 occasions from your figures. After the first year, during which you went to this company 15,000 times, how many times had it provided useful information?

Mike Peasland: It is difficult to say. I do not have those figures.

Q2419 Simon Reevell: The following year you went back about 15,000 more times, so at the end of two years you had been in contact with it 30,000 times. Even if we assume every day is a working day, we can work out quite easily how many times a day, and therefore how many times an hour of the working day, you were in touch with it. Presumably you were getting something back, because in year 3 you embarked on another 15,000 contacts with this company. From these 15,000 annual contacts, how much useful information were you getting?

Mike Peasland: From what you have said and the information that we have, we were getting a service we were happy with. We therefore continued to pay for that service. If we were not happy with a service, as in any company, we would either speak to the principals of that company to say, "The service is not good enough. We want an improved service," or stop using the services of that company and go elsewhere.

Q2420 Simon Reevell: With your experience and knowledge of the company for which you have worked for over four decades, if we are talking about 15,000 pieces of information per year, what sort of percentage of those would have to be helpful to you to make it a valuable exercise?

Mike Peasland: Generally, the information would mostly be of value to us.

Q2421 Simon Reevell: So if 10% of these 15,000 gave you information to act on, that would not represent a good return.

Mike Peasland: I would have said that it would be adequate.

Simon Reevell: That would be adequate.

Mike Peasland: Yes.

Q2422 Simon Reevell: So is it nearly all of them, or is it about 10%?

Mike Peasland: Can you give me the question again?

Q2423 Simon Reevell: Let me try to explain it to you. In each of four years, you have 15,000 interactions with this company that you pay for one after the other. Every time you pay for one, you go back to it and pay for another. What I am trying to understand is how many of those transactions would be of benefit to your company and give you information that you wanted.

Mike Peasland: We would assume that they would all be of some benefit, either through the fact that people were cleared or through the fact that information came back that said they were not cleared.

Q2424 Simon Reevell: You told us that the ones that were cleared did not come back to you. It was just the ones that were not cleared that came back.

Mike Peasland: Yes.

Simon Reevell: So how did you know that a request had not been missed?

Mike Peasland: We would not necessarily know that.

Q2425 Simon Reevell: So you had a system that involved 60,000 transactions over four years that meant you sent details to what you believed was a private company that might or might not reply; you had no means of checking. Based on its reply-if it sent a reply-you would look at the information and it might or might not influence your decision to employ someone.

Mike Peasland: That is the way that we operated.

Q2426 Simon Reevell: As far as your subcontractors were concerned, some of them you introduced to this and some of them you did not.

Mike Peasland: That is correct.

Q2427 Simon Reevell: So the first obvious gap is the requests you make to which this company simply does not respond. The second obvious gap is the subcontractors that do not use this system, who employ all the people you are trying to keep off site.

Mike Peasland: As I said, we have a different system for employing subcontractors. We are looking for the subcontractors themselves to maintain their own work force.

Q2428 Simon Reevell: How are you looking for them to do that?

Mike Peasland: Through their record of having worked with us, because we will be using a cohort of the same subcontractors again as preferred or strategic subcontractors in our supply chain.

Q2429 Simon Reevell: Yes, but subcontractors are not the same as employees working for subcontractors, are they? If I subcontract to you, you do not know who I am going to bring along to the site to do the work, do you?

Mike Peasland: Within our employment contracts, we would look for the subcontractors directly to employ their work force as bona fide workers.

Q2430 Simon Reevell: How is that achieved? If I am subcontracting for you, how do you know that my work force are bona fide workers?

Mike Peasland: Basically, because of the subcontractors that we use. If we were to find any evidence that they were not, we have remedies through the contract to determine their contracts and put them off the job.

Q2431 Simon Reevell: I do not understand the detail of this. Are you saying that your subcontractors had an approved list of people to employ?

Mike Peasland: No. We approved the subcontractor companies. It was for the subcontractor to determine their employment regime with their own employees.

Q2432 Simon Reevell: And you introduced some of the subcontractors to this system of blacklisting-the names of the people employed by your subcontractors were fed in and checked.

Mike Peasland: Yes. You said that we introduced the subcontractors. We did not introduce the subcontractors. In some circumstances, we would ask the subcontractor for the names of the subcontractors that they intended to employ on that site.

Q2433 Simon Reevell: So you subcontract to me, and you want a list from me of the people I am going to employ. You then send that to be checked.

Mike Peasland: That is correct.

Q2434 Simon Reevell: Do you do that with all your subcontractors?

Mike Peasland: No.

Q2435 Simon Reevell: Why do it with some but not with all?

Mike Peasland: I cannot answer for that, because it is about whatever the individual operating companies did at a particular time. There was a procedure that we would check all our directly employed operatives, but there was not a procedure that said we would check every single subcontractor.

Q2436 Simon Reevell: Could anybody be directly employed by you without being vetted by this company?

Mike Peasland: By the Consulting Association?

Simon Reevell: Yes.

Mike Peasland: No, it was a standard procedure that, among the other vetting that we would do, we would put them through the Consulting Association.

Q2437 Simon Reevell: So, to come back to the 15,000 contacts per year, they are requests that represent everybody in a given year whom you were thinking of employing directly.

Mike Peasland: That was largely so, yes.

Q2438 Simon Reevell: You would know how many people you needed to employ in a given year.

Mike Peasland: Yes.

Q2439 Simon Reevell: The difference between the number of people checked and the number of people you needed to employ would be those who were cast aside in the process because they were failed.

Mike Peasland: Not necessarily. We could have put through checks on 10 people, looked at all 10 and had clearances. Our vetting procedures may have said that all 10 were cleared, but we might employ only five.

Q2440 Simon Reevell: At what stage in the process was this vetting procedure utilised?

Chair: I am sorry, but I think we will have to stop there because we have a vote in the Commons. We have to go down to vote, and we will then come back again. We will recommence at a quarter past 4, if we can be back by then-but if there are two votes, we will not be able to start again until about half-past 4. I am sorry about that, but there is nothing else we can do.

Sitting suspended for Divisions in the House.

On resuming-

Q2441 Chair: I wonder if we could restart. I understand, Mr Peasland, that you want to make a point about the earlier line of questioning for clarification.

Mike Peasland: Yes. It was the questioning from Mr Reevell. You took down some figures that I was reading from my fact sheet. Just to remind you, I said that the overall expenditure between 2004 and 2008 was £50,998.

Simon Reevell: Yes.

Mike Peasland: You picked that up. I gave you the reference fee at £2.40 to £3, and the membership fee at £3,500. Maybe I did not clarify it properly. Over the period 2004-2008 there were, approximately, 15,000 checks. So it is 15,000 over that period.

Q2442 Simon Reevell: It is 3,750, which is just over 10 a day.

Mike Peasland: It is 3,000 a year for five years.

Q2443 Simon Reevell: That is 15,000 between 2004 and 2008.

Mike Peasland: Including 2004 to 2008.

Q2444 Simon Reevell: They are not financial years but four calendar years.

Mike Peasland: Four years with 3,000 checks.

Q2445 Simon Reevell: We have dropped down below 10 a day. Thank you. You said on a number of occasions that people were never blacklisted for raising genuine health and safety concerns. The phrase "genuine health and safety concerns" is at point 4.1 of the document that you have prepared for us today. Who decided whether a health and safety concern that had raised was genuine or not?

Mike Peasland: It would be decided by the management on the project.

Q2446 Simon Reevell: If there was a well-meaning health and safety concern that the project management decided was not genuine, that could affect whether or not you would employ the person who had raised it.

Mike Peasland: If they were using or hiding behind health and safety for some other reason, then, yes, that would be a form of disruption and, therefore, that would lead to an exclusion.

Q2447 Simon Reevell: What I asked was, if somebody raised what they believed to be a genuine health and safety issue but your site manager decided it was not genuine, could that mean that the person in future would not be employed?

Mike Peasland: It would not necessarily mean that, no.

Simon Reevell: It would not necessarily, but it could.

Mike Peasland: It could.

Q2448 Simon Reevell: So someone who genuinely thought that they were raising an important health and safety issue could find themselves blacklisted for doing that if the site management, genuinely, took the view that they were wrong.

Mike Peasland: If that was a genuine position, correct.

Q2449 Simon Reevell: I just want to be clear. You used the word "genuine" and I was sure you would not have used it unless there was a reason. It is the subjective view of your site management whether the health and safety complaint is genuine.

Mike Peasland: No. There are health and safety regulations, and we meet those health and safety regulations.

Q2450 Simon Reevell: The word used is "concerns". I am reading from your piece, "we have seen no evidence that Balfour Beatty workers were ever blacklisted for raising genuine health and safety concerns." That means that somebody had to decide, when the health and safety concern was raised, whether it was genuine or not.

Mike Peasland: That is correct.

Q2451 Simon Reevell: It was down to the site manager to decide if it was a genuine health and safety concern. Is that right?

Mike Peasland: That would be the case.

Q2452 Simon Reevell: If he took the view that it was not genuine, that could see somebody blacklisted in the future.

Mike Peasland: Your question is about taking a view. He would take into account the legislation, the requirements of health and safety and the requirements of Balfour Beatty in terms of our health and safety policy. All these things would be taken into account. It is not a matter of just taking a view.

Q2453 Simon Reevell: You know the regulations are not black and white in every eventuality. If somebody raises a concern because they think that something is happening that is dangerous, and the site manager takes the view that that is an unnecessary concern and it is not dangerous-so one person thinks that there is a genuine health and safety concern and the site manager says that there is not-someone who persists in that complaint could find themselves blacklisted.

Mike Peasland: If there was a consistent complaint about health and safety that was not bona fide, then that may be the case.

Q2454 Simon Reevell: The point I am making, and I think you know, is that the decision about whether it is bona fide is the subjective decision of the site manager.

Mike Peasland: It is the view of the management.

Q2455 Simon Reevell: Was anything done to make sure that those assessments of health and safety concerns were fair, because a manager under pressure to finish a particular job might say, "No, no, no, that is not a genuine concern", for reasons that were not legitimate? Was that ever monitored?

Mike Peasland: If there was any issue or anything that continued, it would go to a senior level of management. Someone beyond the contracts manager would intervene if this became an issue. Then it would go to a higher level to confirm whether that judgment was correct or not.

Q2456 Simon Reevell: Who takes it to the higher level?

Mike Peasland: It would be the contracts manager himself in his visits, who would be recognising that something needed to be dealt with. That is why he is there as a senior manager. Therefore, he would pick up that point.

Q2457 Simon Reevell: That is different, is it not? That is if the senior manager comes along and sees for himself something that concerns him from a health and safety perspective.

Mike Peasland: It is his job to do that.

Simon Reevell: Yes, it is.

Mike Peasland: It is his job to oversee these sites and be on these sites on a regular basis.

Q2458 Simon Reevell: Yes, it is. I am asking you about what happens when an employee raises what he believes to be a genuine health and safety concern and the site manager says it is not. I am asking you who would know about that and who would be able to determine whether the site manager’s assessment was fair and objective.

Mike Peasland: The contracts manager.

Q2459 Simon Reevell: How would he come to know about it?

Mike Peasland: Because it had become an issue on the site.

Q2460 Simon Reevell: So there is no system. If I come to you to complain about a health and safety issue and you tell me to get lost-

Mike Peasland: We have totally revamped our systems and the way these systems work.

Q2461 Simon Reevell: We are talking about this time, are we not? It does not really matter, with respect, what is happening today, or I hope it does not, but let’s talk about this period of time.

Mike Peasland: Okay, but it very much does matter what is happening today to make sure that these sorts of things, and these kinds of issues which fall between the gaps of whose view is what, are properly dealt with so that a person can raise it anonymously to the business and the business as a whole can take it up, not just relying on the site manager’s version of events and so on.

Q2462 Simon Reevell: You mentioned "anonymously", because part of the provisions that you have at the moment is for someone to raise a health and safety concern anonymously.

Mike Peasland: It does not have to be anonymously.

Simon Reevell: No, no, but it can be anonymously.

Mike Peasland: If they wish it to be anonymous, it can be, which means that it is as open as it possibly can be for people to raise issues of health and safety.

Q2463 Simon Reevell: Why do issues of health and safety still need to be raised anonymously?

Mike Peasland: It is just giving the opportunity to anybody in our business to raise any issues-not just health and safety.

Q2464 Simon Reevell: Let us stick with the question. Why does the culture of your company necessitate a means of raising health and safety concerns anonymously today?

Mike Peasland: Only to give everybody the opportunity to make and raise issues that they feel they do not want to raise as an individual. We have a whistleblowing policy and people can raise issues, some of which are raised anonymously, and in some cases names are given.

Q2465 Simon Reevell: They are raised anonymously so that people do not worry that they might suffer as a result of raising them.

Mike Peasland: In some cases it may be because they are raising an issue about a colleague and, therefore, do not want to be in a situation where they get into conflict with a colleague because they have raised an issue that could be about health and safety or a number of issues about the behaviour of a colleague. They want it to be investigated but they don’t want to be part of that evidence gathering because of the conflict that may affect them.

Q2466 Simon Reevell: Let me phrase it this way. There is provision to do it anonymously so that they cannot be identified. That is inevitably part of the process of anonymity. The reason for that is to give them the confidence to come forward, if they require the confidence of anonymity to come forward.

Mike Peasland: If they require anonymity, they can do so and, obviously, that anonymity is preserved.

Q2467 Simon Reevell: In the period of time that we are talking about, was somebody able to raise a health and safety concern anonymously in the same way?

Mike Peasland: There wasn’t a proper and robust procedure at that time.

Q2468 Simon Reevell: People had to raise health and safety concerns in person.

Mike Peasland: They would do that.

Q2469 Simon Reevell: If the site manager and/or someone else decided it was not genuine, then they could end up being blacklisted.

Mike Peasland: That is supposition, but it may be the case.

Q2470 Simon Reevell: The reason why you have introduced the anonymity provisions is to deal with that problem.

Mike Peasland: Somebody could raise an issue of health and safety genuinely, they could get a genuine answer as to why that was not a health and safety issue and things would continue as normal. People could raise an issue of health and safety, they could be told that what was being done was correct and they would continue in employment.

Q2471 Simon Reevell: You had a subsidiary called Haden Young; is that right?

Mike Peasland: That is correct.

Q2472 Simon Reevell: There was an employee who worked for Haden Young who raised concerns about blacklisting; is that right?

Mike Peasland: That is correct.

Q2473 Simon Reevell: That was Mr Wainwright.

Mike Peasland: Yes.

Q2474 Simon Reevell: He raised those concerns in 2005.

Mike Peasland: In 2005-2006.

Q2475 Simon Reevell: First of all, at what level in Haden Young did he work?

Mike Peasland: He was a labour manager in Haden Young.

Q2476 Simon Reevell: Give us an idea of what that means in terms of that company’s structure.

Mike Peasland: That would be a middle manager.

Q2477 Simon Reevell: A middle manager. Within Haden Young, how far up did his concerns go?

Mike Peasland: They would go to the managing director of Haden Young.

Q2478 Simon Reevell: It is a subsidiary company, so which part of your company was it linked to?

Mike Peasland: Haden Young no longer exists. Haden Young has now joined with Balfour Kilpatrick and it is now the company of Balfour Beatty Engineering Services.

Q2479 Simon Reevell: So that I can understand, which bit of Balfour Beatty was Haden Young related to or closest to?

Mike Peasland: Haden Young was part of the Balfour Beatty group.

Q2480 Simon Reevell: Who did the MD of Haden Young report to?

Mike Peasland: He would have reported to a group managing director of the Balfour Beatty group.

Q2481 Simon Reevell: Who was above him?

Mike Peasland: Above the Balfour Beatty group director would have been the chief executive of the Balfour Beatty group.

Q2482 Simon Reevell: The MD of Haden Young, you have told us, was made aware of Mr Wainwright’s concerns. What was the name of the MD of Haden Young?

Mike Peasland: At that time it was David Beck.

Q2483 Simon Reevell: With whom did Mr Beck raise that within Balfour Beatty?

Mike Peasland: It was raised with Mr Raby.

Q2484 Simon Reevell: Who is Mr Raby?

Mike Peasland: Mr Raby is the senior HR director.

Q2485 Simon Reevell: Where does he fit into the overall scheme of things?

Mike Peasland: He sits at group level.

Q2486 Simon Reevell: A moment or two ago when you were explaining the structure, you told us that there was the chief executive and below him was the person to whom Mr Beck would report. What was the name of the person below the chief executive at that time?

Mike Peasland: Mr Wivell.

Q2487 Simon Reevell: Is Mr Wivell on the same level as the senior HR person?

Mike Peasland: He would have been at group level.

Simon Reevell: Is that the same level?

Mike Peasland: Yes.

Q2488 Simon Reevell: But, normally, Mr Beck would report to Mr Wivell.

Mike Peasland: Correct.

Q2489 Simon Reevell: Do you know why Mr Beck did not report this issue to Mr Wivell?

Mike Peasland: It was seen as something that would be dealt with within the operating company itself.

Q2490 Simon Reevell: Just explain what you mean by that.

Mike Peasland: The way that Balfour Beatty ran at that time was that there were autonomous businesses, so each of those businesses ran independently. Haden Young ran independently; the management above that was a thin level of management. All their business was done within the company itself.

Q2491 Simon Reevell: The HR person that Mr Beck reported to was who?

Mike Peasland: He did not report to the HR person.

Simon Reevell: I am sorry. The person who he spoke to was?

Mike Peasland: It was Mr Raby.

Q2492 Simon Reevell: Who does Mr Raby report to?

Mike Peasland: He reports to the chief executive.

Q2493 Simon Reevell: Does he go through Mr Wivell to get to the chief exec or does he go straight to the chief exec?

Mike Peasland: He would go straight to the chief exec.

Q2494 Simon Reevell: Mr Beck reports to Mr Raby-

Mike Peasland: No.

Simon Reevell: -a concern. He reports in the sense of communicates.

Mike Peasland: Okay. I am sorry; I thought you meant management reporting.

Simon Reevell: No, no. He reports to Mr Raby a concern about blacklisting. Does Mr Raby take this to the chief executive?

Mike Peasland: No.

Q2495 Simon Reevell: Do you know why not?

Mike Peasland: He felt he could deal with it himself.

Q2496 Simon Reevell: How did he deal with it?

Mike Peasland: That is subject to legal privilege.

Q2497 Simon Reevell: Right. So he dealt with it in a way that you don’t want to talk about.

Mike Peasland: It is subject to legal privilege.

Q2498 Simon Reevell: Do you mean legal privilege or are you saying that it is sub judice?

Mike Peasland: It is legal privilege.

Q2499 Simon Reevell: I see. So there are reasons of legal confidentiality that preclude you from telling us what steps Mr Raby took in terms of his knowledge of the blacklisting.

Mike Peasland: That is correct.

Q2500 Simon Reevell: Are you, personally, facing litigation in respect of this?

Mike Peasland: We are.

Q2501 Simon Reevell: No, you personally.

Mike Peasland: No.

Q2502 Simon Reevell: Are you a witness as far as your employer is concerned?

Mike Peasland: No.

Q2503 Simon Reevell: So you, personally, are not named on court papers and you have not made a witness statement in relation to any court proceedings.

Mike Peasland: No.

Q2504 Simon Reevell: All right. Do you want to ask your lawyer to advise you on what basis you are claiming legal privilege, bearing in mind you are under oath? [Interruption.]

Mike Peasland: It is legal privilege. I am not prepared to go into the whys and wherefores of that because then I would be waiving legal privilege.

Q2505 Simon Reevell: I see. Do you happen to know if one of Mr de Freitas’s specialities is crisis management?

Mike Peasland: I am not aware of that.

Q2506 Simon Reevell: He was not asked to come along on the off chance that there might be a crisis or there already was one.

Mike Peasland: Not at all. He is here purely to support me and to support the company, as has been the case with other companies.

Q2507 Simon Reevell: We know that Mr Wainwright raised the question within Haden Young; we know that Mr Beck became aware; we know that Mr Raby became aware because Mr Beck told him; and that is as far as you feel able to help us today.

Mike Peasland: That is correct.

Q2508 Simon Reevell: When was the company first proactive in terms of doing something about its use of blacklisting?

Mike Peasland: When the ICO raided the offices of the Consulting Association we were put under an enforcement notice. At that time, which was obviously complying with the Data Protection Act and also not using any information from the Consulting Association, we then reviewed our whole situation on data protection, our code of conduct and our ListenUp where there was whistleblowing. We did a complete review of all of those things.

Q2509 Simon Reevell: Were you in any way proactive before you were raided?

Mike Peasland: No.

Q2510 Simon Reevell: Did you have any plans to change any of those things before you were raided?

Mike Peasland: We did not have any plans.

Q2511 Simon Reevell: In paragraph 2.4 of the document that you have supplied, you say "we recognise that we were slow to move with changing times and public expectations in the area of data privacy." Do you recognise, and you might want to ask Mr de Freitas if you are allowed to answer this, that you were somewhat slow to move as far as the law was concerned as well?

Mike Peasland: Yes.

Simon Reevell: Thank you very much.

Chair: I now turn to Jim McGovern, who wants to pick up questions 12 and 13.

Jim McGovern: I think Simon has probably covered them-certainly no. 12 anyway.

Chair: Maybe just to clarify, to ask you about your reaction, I think it is worth our while asking both you and the company what was the reaction when the activities of the Consulting Association came to light following the Information Commissioner’s raid.

Mike Peasland: The reaction was to review exactly where we were with what we were doing and to change and improve our policies both in terms of our code of conduct and data protection.

Q2512 Chair: Am I right in thinking that, had you not been caught, things would have gone on as they were before?

Mike Peasland: I, personally, believe that we would have got there. We would just have been slower in getting there, but we would have got to that point.

Q2513 Chair: What sort of evidence is there that you would have got there?

Mike Peasland: There is no evidence of that.

Q2514 Jim McGovern: What point would you have got to?

Mike Peasland: At some stage.

Q2515 Jim McGovern: Yes, but which point?

Mike Peasland: At some stage we would have got to the point where the use of the Consulting Association was not the right thing to do. We needed to stop doing that.

Q2516 Chair: What evidence have you got for that?

Mike Peasland: None.

Q2517 Chair: When Alan Wainwright kicked up a fuss about it, that would have been an opportunity for people to review it, but you did not take it then. I am struck by your submission where you said, "We regret this." I am left with the view that you regret getting caught-certainly I think you are pretty clear about that-but there is no evidence that at the time the company regretted using the Consulting Association at all.

Jim McGovern: On the contrary, I think Mr Peasland said that the company was happy with the service. I am quoting you here. You said that you were happy with the service you were getting.

Mike Peasland: I did say that; I did say that.

Q2518 Chair: You did regret getting caught because you would have been perfectly happy to have carried on, and, maybe, at some time in the future you might have had a review. You are aware that other companies have said to us that they became unhappy about the procedure used by the Consulting Association and stopped using it before they were caught. I am sorry but nodding does not work because we have to take a record. You are nodding your head. I take it that that is an agreement.

Mike Peasland: I was waiting for you to complete your question.

Chair: I am sorry. I thought your enthusiasm to respond was why you were nodding. Other companies pulled out voluntarily. You did not. As a result, that leaves us with a view that you don’t regret having used it at all, that you regret now but you did not regret it at the time, and you would have been perfectly happy to have carried on.

Mike Peasland: As I said before, we regret using the Consulting Association. I believe that we would have got there eventually and that we would have stopped using the Consulting Association, irrespective of whether the ICO had raided the Consulting Association.

Chair: But you have absolutely no evidence of that.

Q2519 Jim McGovern: You have said that it was a service that you were happy with.

Mike Peasland: Yes, but over time we were talking about-

Q2520 Simon Reevell: Over what period do you think you might have come to stop using it?

Mike Peasland: It is hypothetical. I would have thought that-

Simon Reevell: You raised it. Over what period do you think?

Mike Peasland: I would have thought, probably, within about a couple of years.

Q2521 Simon Reevell: So, from having no plans at all to do anything, you would have got to the point of not using it within 24 months if you hadn’t got caught.

Mike Peasland: That would be my belief.

Q2522 Graeme Morrice: When you were at the time using the services of the Consulting Association-you said you were happy about the service-did you have any qualms about the morality of what you were doing?

Mike Peasland: When I took over as MD of Balfour Kilpatrick I was made aware of the Consulting Association. I viewed it in my own mind. On the balance of the disruption, the unofficial action that we were experiencing and the problems with our projects, my decision was to continue.

Q2523 Graeme Morrice: On balance, you reviewed it within your own mind, as you said. Obviously, you looked at the pros and the cons, so you believed that there were cons to using it. Could you maybe explain what your concerns were? But obviously on balance, you decided to press ahead. Nevertheless, what were your concerns when you were reviewing it within your own mind?

Mike Peasland: It was on the basis of whether it was the right thing to do in my own mind.

Q2524 Jim McGovern: The best way to make money for the company.

Mike Peasland: No. It was the best way to prevent disruption on our projects.

Q2525 Jim McGovern: But certainly not the best way to prevent accidents.

Mike Peasland: I thought that I had explained that earlier. I do believe that our health and safety performance has continually improved. Since 2002, our accident frequency rate has halved over that period. We have done significant amounts with our work force in our behavioural safety plans-Safe on Site, Whatever it takes!, Mad About Safety and Make Safety Personal. All these are issues to engage with the work force to help us as leaders to make our sites much safer. That is the whole intent of what we are doing. In 2008 we introduced Zero Harm, which was a worldwide initiative on improvements in safety.

Q2526 Jim McGovern: Let me give you an example. My own background prior to being in this job was in the construction industry. Under health and safety legislation, a ladder is meant to give you access to a job that you are going to be doing. It is not meant to be a work platform. I am a glazier. If I said to the management every time a window was broken on the third storey of a tenement building, "No, I can’t do that from a ladder. I will need a scaffold," they would say, "No. You’re sacked. You’re finished. You’re not getting that." Are you telling me, or can I understand you to be saying, that Balfour Beatty adhered to that health and safety legislation as closely as that?

Mike Peasland: Yes. We only use access platforms and proper staging. The only time that we would use a ladder would be where there has been no other means than using that ladder, and that would be under a permit-to-work system. There would have to be a formal request that the ladder is the only methodology that could be used; you could not use a MEWP, an access platform or a mobile scaffold. Therefore, you would ask for a specific-

Q2527 Jim McGovern: I understand you. You are quoting health and safety legislation. The question was, does Balfour Beatty adhere to it as strictly as that?

Mike Peasland: You asked me what we would do. That is the policy in Balfour Beatty.

Jim McGovern: Apologies for my scepticism.

Q2528 Graeme Morrice: Just going back to the initial line of questioning from myself, you say that when you reviewed this whole aspect of whether it was the right thing to do to utilise the services of the Consulting Association, did you feel that those kinds of concerns that you did have in your own mind were troubling or worrying in some way? Could you maybe elucidate and indicate what those troubles and concerns were? What were the doubts that you had?

Mike Peasland: Again, it was a general, "Is this the right thing to do?", and balancing that against the disruption and unofficial actions that we were having on our sites.

Q2529 Graeme Morrice: I understand that, but why did you ask that question, "Is it the right thing to do?" If people do wrong things, they probably know why they are doing it. They may still do it, but at least they will know why they are doing it. Why did you have those concerns and what were those particular concerns specifically?

Mike Peasland: Just about using a third party in terms of using those checks.

Q2530 Graeme Morrice: It was simply just using a third party and not about the morality of blacklisting, or using a blacklisting outfit.

Mike Peasland: I was looking more about the clearance procedure and how we went about that. I think that Mr Reevell asked if we were capturing everything. Were we capturing all the things-

Graeme Morrice: That is about the effectiveness of it, not about the morality of using a blacklisting organisation.

Mike Peasland: I still had checks in my own mind that, if there were some issues with this company, then was it the right thing to do? In other words, could there have been incorrect information?

Q2531 Simon Reevell: Was it the method or the principle that you were concerned about?

Mike Peasland: Personally, I rolled over in my own mind the principle of using the Consulting Association. On balance, I decided-

Q2532 Simon Reevell: Is it the principle of blacklisting or the method by which the firm you used compiled its blacklisting data?

Mike Peasland: It was to do with the methodology of the Consulting Association.

Q2533 Chair: That was on the basis that it might not have been particularly efficient.

Mike Peasland: That is correct.

Q2534 Chair: If it had been more efficient and more effective and able to blacklist more accurately, that would not have been a problem.

Mike Peasland: It was about the checking procedure, and I say, on balance, again, was the checking the right thing to do?

Q2535 Chair: Were you or the company aware that from 2003 what the Consulting Association was doing was illegal?

Mike Peasland: I was not.

Q2536 Chair: Was the company?

Mike Peasland: I don’t believe so.

Q2537 Chair: When it was raised by Alan Wainwright, did nobody go and check whether or not this was actually legal or illegal?

Mike Peasland: [Interruption] I am being advised that we are getting into areas of privilege that I cannot answer.

Q2538 Chair: I must confess I don’t understand why that should be privileged. If you did not have a lawyer beside you, you would have gone ahead and, presumably, said that you didn’t know. Maybe we have made a mistake in that regard, because I think you are hiding behind the lawyer on this. Okay, so you did not know that.

Can I just come back to the question of your reaction? Your reaction when you got caught doing this was to have a review of all the things that you were doing. The Information Commissioner gave you enforcement notices to stop doing what you were doing, did it not?

Mike Peasland: That is correct.

Q2539 Chair: And it did not issue enforcement notices to some other companies, did it?

Mike Peasland: I believe that is correct.

Q2540 Chair: Why do you think that you got enforcement notices and other people didn’t?

Mike Peasland: I don’t know the answer to that. I don’t know why the ICO decided that we should get enforcement notices rather than some of the other companies.

Q2541 Jim McGovern: There were 14 enforcement notices issued, and six of them were to Balfour Beatty companies. It does seem to be quite a large proportion of the notices. You have no explanation for that.

Mike Peasland: We were a large user. As you said, we were a heavy user of the Consulting Association and probably one of the biggest users. As you said, there were six companies that used the services of the Consulting Association.

Q2542 Chair: Did you not seek legal advice at the time? I am surprised that you are not telling us that that is legally privileged as well? Did you not seek legal advice about that at the time, or do you feel that you can discuss this with us?

Mike Peasland: The enforcement notices were put in place. At that point there was a question of looking at the whole issue around what we needed to do to bring ourselves up to scratch in terms of our code of conduct and the issues around the Data Protection Act. There would be a prohibition on anybody using or supporting any kind of list that excluded people. That would be the subject of disciplinary action and could lead to dismissal from the company. There were very strict rules around that. Compliance officers were put into the business. Since that time, these six companies do not exist in that form any more. So we have one company, which is called Construction Services UK, of which I am the CEO, and below that there are now three business streams. Those three business streams are operational business streams. They look at the front end, towards the customer, at the enabling functions, and the services elements are all now controlled centrally as well. So our HR function no longer sits within the six companies or three business streams. It sits centrally and it is controlled centrally. So we have much more control and compliance over the things that we do now than we did in the past.

Q2543 Simon Reevell: Could I ask something, Chair? At the time that Mr Beck received the complaint that we have talked about and he took it to Mr Raby, did the HR department have in-house lawyers who were working within the company?

Mike Peasland: At that time there was an in-house company lawyer.

Q2544 Simon Reevell: Did you have external lawyers who were either retained by the company or to whom you went on a regular basis?

Mike Peasland: We did and do have external lawyers that we use for specific elements of whatever it might be, in terms of mergers and acquisitions, or whether it is employment law or whatever. We use specific lawyers for these individual specialities as such.

Q2545 Simon Reevell: Such as crisis management. At the time that Mr Beck spoke to Mr Raby, there was an in-house lawyer, and there was also a regular system of access to whatever external lawyers were needed.

Mike Peasland: That was the system in place.

Q2546 Lindsay Roy: Would it be fair to say that Balfour Beatty did not know how effective their engagement with the Consulting Association was in this so-called business?

Mike Peasland: I can only look at the outcome, and the outcome was that over the period generally our sites were well run and undisrupted by the methodology of the checking system that we used, and the Consulting Association was a part of that.

Q2547 Lindsay Roy: Was there a reduction in disruption and industrial action over the period that you were involved with the Consulting Association?

Mike Peasland: There were ups and downs over the period.

Q2548 Lindsay Roy: So, in effect, you don’t know how effective it was.

Mike Peasland: In the ’70s there was quite a lot of industrial action. Again, it happened in the ’80s and then we saw it, again, as I mentioned to you earlier, at round about the millennium. There were waves of industrial disputes throughout the period. As far as Balfour Beatty was concerned, in general, the checking system that we used meant that we had less disruption than otherwise might have been the case.

Q2549 Lindsay Roy: How do you know that?

Mike Peasland: That is my opinion.

Q2550 Lindsay Roy: It strikes me that it has been a very complacent management and leadership system where you invest this money and don’t know what the outcomes are.

Mike Peasland: As I said, I believe the outcome was that we had less unofficial industrial action and disputes than we would otherwise have had on our projects.

Q2551 Lindsay Roy: You say you believe that, but do you have hard evidence to support that?

Mike Peasland: Yes. There is evidence of our businesses and projects being well run.

Q2552 Lindsay Roy: Can you provide the evidence to us then? We are talking here about disruption and unofficial industrial action. Can you provide evidence to us that indicates that this has been a worthwhile investment?

Mike Peasland: I can attempt to provide information on sites in those periods where we had industrial action as opposed to when we did not. I am trying to provide you with information that we have.

Q2553 Graeme Morrice: You said some time ago that in using blacklisting companies you did not discriminate against anyone on the basis of legitimate trade union activities, such as industrial action.

Mike Peasland: That is correct.

Q2554 Graeme Morrice: But you have just said that your industrial relations record was better than others’. In other words, you were indicating that there were less official industrial disputes compared with other companies as a result of using blacklisting organisations and the information leading form it.

Mike Peasland: When I said "industrial disputes", I meant unofficial action and wildcat strikes.

Q2555 Graeme Morrice: But you did not say "unofficial wildcat strikes". You said "industrial action". To me, industrial action is legitimate, official conduct by trade unions.

Lindsay Roy: Can you provide us with that evidence?

Mike Peasland: I have said it a number of times. It was due to unofficial, disruptive action. In that last sentence I said "industrial action" because I left out the adjective "unjustifiable".

Q2556 Lindsay Roy: Can you provide us with that evidence?

Mike Peasland: I will attempt to do that.

Q2557 Lindsay Roy: In terms of numerical values-

Mike Peasland: Numbers?

Lindsay Roy: -numbers of incidents and numbers of people involved. According to what you say, there should be a declining curve.

Mike Peasland: I can attempt to do that. I can attempt to give you some evidence, if possible.

Q2558 Mr Reid: After the ICO raid on the Consulting Association, you carried out an internal review. What were the revelations of that review?

Mike Peasland: The review was that both our data protection policies and our code of conduct needed to be reviewed and strengthened to make it much more visible and explicit in terms of the actions that would be taken for either the use of or support of lists that supported people being excluded from sites without reference. It was specifically about referencing. It was again that no reference would be taken on anybody without that person knowing, and seeking approval and getting approval from that individual that they had approval to seek a reference from another employer.

Q2559 Mr Reid: Did you not have procedures in place before that raid? For example, the data protection law was changed. Did you not have procedures in place that your lawyers would tell you, "This particular law has been changed? You need to"-

Mike Peasland: There were procedures in place.

Q2560 Mr Reid: So why do you think that they did not work in this case?

Mike Peasland: They obviously were not robust enough.

Q2561 Mr Reid: Are you confident that these procedures are now robust enough? In what way weren’t they robust enough? What changes have you made to make them robust?

Mike Peasland: We have introduced a mandatory e-learning course so that, on their induction into the company, everybody receives an e-learning course on data protection. Each individual now, as opposed to relying on a procedure, gets that e-learning course at their induction, when they start with the company, on data protection in association with other things, like health and safety requirements and so on.

Q2562 Mr Reid: If the law on, say, health and safety data protection employment rights changes, do you have a part of your company that monitors what Parliament does and then draws your attention to any changes that have to be made?

Mike Peasland: Yes. It is incumbent upon us to what you would call "horizon scan", to know what is the up-and-coming legislation, what things are coming that we need to be aware of. Do we need to look at our processes and procedures, and do we need to upgrade them, subject to new things appearing on the statute?

Q2563 Mr Reid: Has that procedure only been introduced since 2009?

Mike Peasland: In terms of that situation, yes.

Q2564 Mr Reid: Would you be able to give us a copy of the internal review?

Mike Peasland: I can give you a copy of our code of conduct and a copy of our data protection policy.

Q2565 Mr Reid: What about the internal review itself-the report that was produced to you? Would you give us a copy of that?

Mike Peasland: No. These reviews are internal for our own use.

Q2566 Chair: No, sorry. We are asking you for a copy of the report. We are not concerned with whether or not it is internal. We want to have a copy; we want to see the report. We want to see the analysis that you drew.

Mike Peasland: [Interruption.] We can check and we can provide that, if we can.

Q2567 Chair: Sorry, what is it that you have got to check?

Mike Peasland: If it was checked by external lawyers, then it is subject to legal privilege. If it was checked by an internal review, then, obviously, we will make it available.

Q2568 Chair: We would want to have the House of Commons legal advice involved in that process rather than simply having your own definition of whether or not it is legally privileged. I am sure that lawyers can butt heads over that in due course and we can correspond.

Can I clarify this? I am told that the new legislation on data protection came through in 2003. None of your lawyers drew to your attention that you were behaving illegally until you were caught. That just seems astounding. Did anybody get sacked, disciplined or punished in any way, or did everybody just carry on as before or get promoted?

Mike Peasland: Nobody was made redundant because of that situation.

Q2569 Jim McGovern: Redundancy is a different thing from sacking, isn’t it?

Mike Peasland: Nobody was sacked because of that situation.

Q2570 Mr Reid: Was anybody disciplined in any way?

Mike Peasland: Not that I am aware of. There was no disciplinary action.

Q2571 Chair: Did you get new lawyers or anything like that?

Mike Peasland: Our lawyers remained the same.

Q2572 Chair: Can you understand why there seems here to be one rule for management staff and another for people on the sites? If somebody on the sites had made a mistake the equivalent in scale to this, surely they would have been sacked and blacklisted.

Mike Peasland: Our employees were following the procedures of the company at the time.

Q2573 Chair: No, no. The procedure, surely, was to tell you that you were behaving illegally. You don’t have an instruction, do you, to your lawyers saying, "Don’t tell us if we are behaving illegally"? There is either a question that they were deliberately not telling you, or there is a question of competence. Now which is it?

Mike Peasland: There may have been a situation where we obviously weren’t doing what we should have been doing.

Q2574 Mr Reid: But the data protection law changed in 2003. Who in the company was responsible for flagging that change up to senior management?

Mike Peasland: It would have been any of the individual heads of legal within individual companies.

Q2575 Mr Reid: So none of the heads of legal in each of your different companies flagged up that the data protection law had been changed.

Mike Peasland: The process now is that there is a much more robust system in place, which means that we look at these issues much more closely.

Q2576 Graeme Morrice: This is about the law. The law was changed. A new law was introduced-the Data Protection Act-in 2003. Did your company take a decision? Did your senior management, your board of directors or whoever, take a decision that your lawyers would look at this, or did your lawyers come in and say, "We need to review this because there has been a change in the law"?

Mike Peasland: There was no direct instruction or agreement that we would be breaching the law.

Q2577 Chair: Okay. Was that reviewed? They just didn’t tell you.

Mr Reid: Was there anybody in the company charged with monitoring Parliament and flagging up when the law changed?

Mike Peasland: No.

Q2578 Mr Reid: Was it only data protection law that you have fallen foul of? When employment law and health and safety law changed, did you fall foul of those?

Mike Peasland: Not really. We haven’t fallen foul of any other.

Mr Reid: Just data protection.

Q2579 Chair: But to be fair, you were not aware of breaching data protection law until you got caught. By definition, you could be breaking all sorts of laws, but until you are caught, presumably, your defence is, "We didn’t know."

Mike Peasland: We have very robust systems in the likes of health and safety. We are very aware of health and safety legislation as it comes forward. In fact, in a lot of cases we like to be ahead of legislation in terms of what is coming so that we can-

Q2580 Chair: I understand that. That is what we would expect from a major company for reputational reasons.

Mike Peasland: Again, employment law would be the same. There is no evidence of us having missed anything on health and safety laws, nor any evidence that we have missed anything on employment law.

Q2581 Mr Reid: Going back to 2003, were your lawyers just charged with looking at specific areas of the law rather than the law as a whole?

Mike Peasland: As I was saying earlier, we would use specific legal companies for particular specialisms, such as employment, health and safety and other areas of the law.

Q2582 Mr Reid: Are you able to give us a list of the particular specialisms that you had asked to be informed of when the law changed?

Mike Peasland: I don’t know the answer to that one.

Mr Reid: Could you go back and investigate and find out?

Q2583 Chair: You can understand why a major company, along with other major companies, completely seemed to have overlooked a change in legislation, when ignoring it was enormously to their financial benefit, and only stopped breaking the law when they were caught. You can understand why we have some anxieties about this situation and why we are trying to clarify the position.

Mike Peasland: Absolutely.

Chair: There are a couple of other points that we want to raise. Do you still want to continue? I see that Alan Reid wants to ask a question.

Q2584 Mr Reid: Are you now confident that the changes in procedures you put in place following the 2009 raid will mean that you will not be engaged in blacklisting?

Mike Peasland: We are confident of that. As I said, we have put in these robust procedures. We have our whistleblowing line in place. Just to give you some information, since 2009, since we introduced ListenUp, which is our hotline, a total of 216 reports have been made; 28 related to health and safety issues. From the resultant investigations, seven of the 28 health and safety-related cases were substantiated and we dealt with them. In that period there were no issues raised on blacklisting.

Q2585 Chair: Did you ever, as a company, deny being involved in blacklisting while you were doing it?

Mike Peasland: Not that I am aware of. I do not want to get into moot points about what blacklisting means, but from our point of view we were using the Consulting Association for reference checking, and that reference checking was part of our overall recruitment policy.

Q2586 Chair: That is a good one. If you define blacklisting in the way that you wish, then nobody ever blacklists anybody; I understand that. Can I phrase it differently, then? This was a secret-clandestine-system of checking references. Do you think that that is a fair assessment?

Mike Peasland: It would be secret to the workers. That is correct.

Q2587 Chair: It was secret to everybody, wasn’t it? Nobody else outside management in construction companies knew that the Consulting Association existed or was active.

Mike Peasland: The companies that used it-it was industry-wide-knew it.

Q2588 Chair: But the unions didn’t use it, none of the employees used it, the press didn’t know of it, and nobody else knew about it at all, did they?

Mike Peasland: That is correct.

Q2589 Chair: Faxes were sent in and Ian Kerr was under instructions to destroy them at the end of the day so that there was no trace. That tends to make me think it was secret. Nothing seems to have been written down in any of the companies. That tends to make me think it was secret. That is why I am making the point about it being clandestine. Coming back, then, to this clandestine operation-you can quibble about whether or not it is blacklisting-did you ever deny being involved in this while you were doing it?

Mike Peasland: Not that I am aware of.

Chair: Have you checked? Maybe you could go back and check that, because we are going to check with you and a number of other companies to see if you can identify any evidence about companies having denied being involved in blacklisting while they were actually doing it. Obviously, we would be upset about that if we discovered that, because it would call into question the veracity of any assurances that we are receiving at the moment.

Q2590 Jim McGovern: Chairman, could I ask Mr Peasland a question on that subject about the law? Do you have an opinion-you might want to speak to your lawyer about it-on why Ian Kerr was fined £5,000 and, of course, McAlpine paid his fine, his legal fees and so on, and why the companies like your company that were breaking the law were never taken to court?

Mike Peasland: I don’t know the answer to that. It was the ICO that made that decision. I presume that they would give a reason for that, but I have no idea why they did that.

Q2591 Jim McGovern: But you freely admit that your company and numerous other companies were in breach of the law.

Mike Peasland: Yes; we were using the Consulting Association.

Q2592 Chair: You have given us a statement, which is very helpful, which is marked "Privileged and Confidential". I assume that it is neither. It is neither privileged in the sense of legal privilege, nor is it confidential, since it would be our intention, as a public body, to publish everything.

Mike Peasland: We have given you that as a record document for public consumption.

Q2593 Chair: Right. So in fact it is neither privileged nor confidential. Can I come to paragraph 2.1 where you acknowledge using the services of the Consulting Association? Then you go on to say: "We regret this. It should not have happened and we apologise".

I have some qualms about the genuineness of your apology and about the genuineness of your regret, given that it is my understanding that you intend to fight, as vigorously as you possibly can, any claim for compensation that is brought against you by anybody at all. I can understand it if the company said, "Look, we put up our hands. We recognise that we have adversely affected people. We are prepared, in these circumstances, to pay compensation." But, to admit that you were a part of this conspiracy, you admit that you were doing things that you should not have done, and then be prepared to vigorously defend them in court, can you see how, from our perspective, there does seem to be somewhat of a contradiction there?

Mike Peasland: We will make financial recompense to those who have been affected by this.

Q2594 Chair: How do people go about proving it? One of the difficulties that we have with this is that, if somebody went for a job with you and was refused, and then had to travel to the other end of the country and got a job there, can they prove loss of wages there? Well, not if the wages were the same.

Mike Peasland: The courts are there to make the decisions-proper decisions. They are there to support individuals and people in law in what should be done. Having said that, if there are genuine cases that fall between the cracks, as you might say, in circumstances that you have just mentioned, then, obviously, we would be looking at that as to whether compensation was due or not.

Q2595 Chair: When you say "we would be looking at that", are you looking at that?

Mike Peasland: I don’t know the nature of the claims at the moment. I haven’t seen them.

Q2596 Chair: As I understand it, there are some legal claims but there are no other unofficial claims. Can you understand why we are surprised? As I understand it, you are not just simply going to be leaving the court to determine damages, but you are going to vigorously defend every case that comes in front of the court to which you are attached. It looks as if you don’t really regret it at all. You only regret being caught.

Mike Peasland: There are maybe claims that are not competent, which are not there for compensation to be applied.

Q2597 Chair: That is a very helpful point. We have had cases, as I understand it, rejected by tribunals and courts where, say, a subcontractor has been sacked because of the actions of the main contactor, but because the person involved was not employed directly by the person who made the decision, they could not take a case against them. The main contractor hid behind that legal technicality. Or some cases have been out of time and, therefore, have fallen. That, again, is a legal technicality. Morally, the main company is as responsible as it would have been earlier on had the case come on earlier. Do you not see that, in terms of reputation, there is a difficulty for companies like yours if you are seen to be hiding behind and vigorously fighting legal cases, while at the same time pretending-well, giving the impression-that you are genuinely upset and regretful about what you did?

Mike Peasland: We are genuinely upset and regretful. Personally, it is an issue for me. But the courts are there to protect people, and that is where they should take these cases. We will pay what is due. As I said, if there are legitimate claims where people fall between the cracks because there is dubiety about the issue, then we will seriously look at that.

Q2598 Jim McGovern: How can people find out if they have been on a blacklist?

Mike Peasland: I understand that each individual can make representation to the ICO. I believe that is what was done.

Q2599 Jim McGovern: Previously, why people would not do that was because, if they made a phone call, they had to pay a fee for the information, and, if they found out they were not on a blacklist, they were immediately put on it because the organisation was saying, "They must have something to hide so we are going to put them on a blacklist."

Mike Peasland: I thought you were meaning now, Jim. I thought you were meaning at this moment; that is how they find it. But now they would go to the-

Q2600 Jim McGovern: You can understand why people would be a bit reticent about approaching them or pursuing that. They are going to end up on a blacklist because they were trying to find out if they had been on one.

Mike Peasland: That would not be the case now. Certainly within our organisation, the way that we operate now, the robust procedures that we have put in place means that anybody using or supporting any kind of list would be subject to serious disciplinary action.

Q2601 Jim McGovern: Chair, can I ask another question? Given the nature of the whole blacklisting thing-it might go further or it might end up on a par with the Leveson inquiry, I don’t know-and given that most of the people who suffered because of blacklisting were involved in trade union activities, how is your company engaging now with trade unions to ensure that it never happens again and to try and address the problems that have happened before?

Mike Peasland: We have certainly invested in the way that we have redone our policies and procedures to make sure that it does not happen again. We have got compliance officers in place. We will be engaging with the unions as we go forward.

Q2602 Jim McGovern: I know that this is asking for an opinion rather than some sort of statement of fact, but do you think it still exists in the construction industry?

Mike Peasland: I am not aware of that. I, personally, have not seen or heard of any anecdotal evidence, personally, that it still exists.

Jim McGovern: Okay, thank you.

Q2603 Chair: I wonder if I could sweep up some smaller points that are outstanding. When the Consulting Association closed down, there were obviously costs involved. I understand that Mr Kerr’s fine was paid by McAlpine and so on. There were obviously the costs of closing down the business. Were you, as a company, asked to contribute to those at all?

Mike Peasland: We were sent invoices by lawyers for costs.

Q2604 Chair: Did you, therefore, contribute towards the closing-down costs?

Mike Peasland: We didn’t pay that. We sent those costs on to the ICO. We sent those invoices on to the ICO.

Q2605 Chair: But were these closing-down costs as distinct from invoices for services that you had already received? Do you understand the distinction?

Mike Peasland: Yes. I don’t actually know what the invoices were for. I can find out what the invoices were for.

Q2606 Chair: There were ongoing invoices; that is when the business was stopped. We understand that some companies were approached and declined to pay a share of the closing-down costs and that Mr Kerr and his family feel, quite understandably, that he was hung out to dry by the companies involved, which had been happy to use his services and then walked away at a time of difficulties. Had McAlpine not met all the costs, then he might have ended up personally liable. I am trying to clarify what your actions, activities and views were at that stage.

Mike Peasland: The actions were to cease any communication with the Consulting Association on the basis that we may have been breaching the enforcement notice that was put on us.

Q2607 Chair: Did you take legal advice on that?

Mike Peasland: Not that I am aware of.

Q2608 Chair: You have hidden behind the lawyers on a number of occasions here. It seems surprising that you did not take legal advice on something like that, since those were legal processes that were being undertaken. It does sound to me rather as if you were one of those who left Ian Kerr hanging out to dry. Is that a fair assessment?

Mike Peasland: We certainly did not pay any of the costs for the close-down of the Consulting Association.

Q2609 Chair: Were you asked to do so?

Mike Peasland: We were not asked to do so.

Chair: If you weren’t asked, I think that is slightly different.

Mike Peasland: I said that we were not asked to contribute from the Consulting Association, but, separately, we were sent invoices from lawyers for costs that we did not pay and forwarded directly to the ICO.

Q2610 Chair: I want to clarify this. Were they the costs of the business that had been ongoing or were they costs-

Mike Peasland: I will clarify that for you. I don’t have that information to hand.

Q2611 Chair: But you did not take any legal advice about whether or not there was any liability to you at that stage. You just ignored it and hoped that it would go away, and indeed it did because McAlpine took the view, "It’s a relatively small sum of money so we’ll just pay it."

Jim McGovern: I think, Chair, Callum McAlpine said that they paid the fine and the associated expenses for humanitarian reasons.

Chair: That is right, because everybody else ran away.

Jim McGovern: But Balfour Beatty did not see it that way, for humanitarian reasons.

Mike Peasland: We took the view that we could be in breach of the enforcement notice and, therefore, we passed the costs back to the ICO.

Jim McGovern: I should make it clear that I don’t believe Callum McAlpine when he says that it was done for humanitarian reasons.

Chair: That is another issue. But you did not seek or receive any legal advice on that. I think you have agreed that earlier on. That was just an assessment that was made by staff.

Q2612 Lindsay Roy: Were these invoices from lawyers acting on behalf of the Consultancy Association, and, if so, who were they?

Mike Peasland: I don’t know. If I can provide that information, I will.

Q2613 Chair: Were you aware as a company at any stage that the files held by the Consulting Association contained the lists of names of environmentalists, green activists and the like?

Mike Peasland: I wasn’t aware of that.

Chair: You have not been made aware of that at all in your preparation for this meeting.

Mike Peasland: No.

Chair: I am genuinely surprised at that.

Mike Peasland: We don’t have the information that you have. I have not seen the files.

Chair: No, no; I understand that. But a lot of this is in the public domain. That information about the holding of files on environmentalists has been raised in our public hearings. I would have thought that as part of the briefings that you received for coming along here you would have had a response ready for that. I accept that some companies would not have used those, but they were obviously being held for a reason and that is what we are trying to clarify.

Jim McGovern: It is also fair to say that we don’t have the information that you have.

Chair: That is a very fair point. Are there any other questions that colleagues want to raise?

Q2614 Pamela Nash: I would presume, unfortunately, that there have been redundancies from Balfour Beatty over the last few years. Do you have set criteria for those who are made redundant? Are those different for the different companies that make up the Balfour Beatty group, or is that across the group?

Mike Peasland: It has changed over time. If you look at where it would have been in the past, there would have been an element of last in, first out. Over time we have spoken with the unions and negotiated with them that we should be looking at skills. Therefore, the selection for redundancy was skills-based rather than a time-based situation.

Q2615 Pamela Nash: At the time when it was last in, first out, was a vetting criteria agreed or was it just in and out?

Mike Peasland: It would be straightforward. If you were last to be employed, therefore you would be first to go.

Q2616 Pamela Nash: It would just be that. There are now set criteria; is that correct? Is there a document that sets out the criteria for redundancy-

Mike Peasland: There is certainly agreement with the unions in terms of how we would go about selection for redundancy.

Q2617 Pamela Nash: Is that a written document?

Mike Peasland: I will check to see what is available.

Q2618 Pamela Nash: It would be helpful for us to see that because there have also been allegations of redundancies being allocated in response to people’s trade union or health and safety work. You said something that was different from other companies. You said that your bill to the Consulting Association was paid centrally for the whole group. Was there one main contact, one person, who was in contact with the Association?

Mike Peasland: No. When I said "centrally", one of the companies took the lead in terms of paying the membership fee, but each of the individual companies did their cheques to the Consulting Association and paid the check fee separately. That was invoiced to those companies. So one of the operating companies took the fee on but the other companies paid-

Q2619 Pamela Nash: Who was that?

Mike Peasland: It was Balfour Beatty Civil Engineering Limited.

Q2620 Pamela Nash: Was there a person from Civil Engineering who represented Balfour Beatty at the meetings? It was one person. Who was that?

Mike Peasland: There was, and we can provide that for you.

Q2621 Pamela Nash: That has to be done privately. Can I just ask this? If there are people involved from the other companies within the group and this person, we will take private evidence from them. Are they still employed by Balfour Beatty at the moment?

Mike Peasland: The person whom we are talking about here has retired and is no longer employed.

Pamela Nash: Thank you.

Q2622 Chair: Could I draw to your attention one of the sheets I have had that is in the public domain? It is a card for somebody, and it refers to action that took place on 21 June 2000. That was when the information was put in. It says: "In addition, the following were not re-employed by"-and it gives you a code number-"following the unofficial action at Pfizer, Sandwich, between mid-April and mid-May 2000. These were regarded as followers rather than leaders of the unofficial action." Then there is a list of about 30 to 40 names. Again, it says that the source of that information was you. We have notes here indicating that this record was following them, and in one case-the latest here is 27 July 2007-where the company has not furthered. Does it not seem to you to be a bit harsh that somebody who, by your company, was described as a "follower" rather than a leader of the unofficial action is still getting turned down for jobs on your recommendation seven years later?

Mike Peasland: Certainly from my point of view, as I said earlier, a number of people were almost forced to follow what the requirements were. I would really regret the situation if anybody in that position was denied employment for feeling that they had to follow a course of action that they did not believe in.

Q2623 Lindsay Roy: What evidence do you have that they were forced to follow?

Mike Peasland: Would you say that again?

Lindsay Roy: What evidence did you have that they were forced to follow?

Mike Peasland: I don’t know what evidence was available.

Lindsay Roy: But you have just stated that.

Mike Peasland: I am just quoting from the Chairman. You were talking about the follower. I am just giving that information.

Q2624 Chair: Your company blacklisted these people and said that these were regarded as followers rather than leaders, and seven years later people were still rejecting them for jobs on the basis that they were on the list. If you remember, you were described as among the most hard-nosed of companies of all in that regard, so, had anything like this come in, I think we have to draw the conclusion that if anybody else had put in that somebody was regarded as a follower you would have rejected their application right away. We have covered most of that.

Finally, from my perspective, can I ask you what confidence workers can have that you are not still blacklisting, when quite a lot of the people who were involved in the blacklisting, who did things like the contributions by putting that in, are still with the company? In particular, a Gerry Harvey is remaining in a senior HR role, who seems to have been a major contact with the blacklisting group. Given the fact that nobody who did all this seems to have been punished, rebuked, chastised or sacked in any way, people, surely, can draw the conclusion that they are still up to their old tricks but now you are just cleverer about concealing it than you were before.

Mike Peasland: As I say, prior to 2009 these employees were following the company procedure; they were doing what was asked of them by the company. Since 2009 the whole checking system, the code of conduct and the various checks that have been put in place have all been revised, and anybody who is supporting or using any of that kind of information would be subject to dismissal. We have compliance officers and we do regular audits of all of this. As I say, we have also our ListenUp hotline for people to report any of these issues. We are constantly monitoring these things. I have no evidence that this is continuing and I am confident that it is not continuing, and it has not continued since 2009. This is an historical issue that has not been repeated.

Q2625 Chair: Can I clarify that your defence for these people is that they were only obeying orders?

Mike Peasland: That is right. They were following the procedures and processes that were in place.

Jim McGovern: It was a long time ago and they were obeying orders.

Chair: That is right. That is what it boils down to-that these people were only obeying orders.

Q2626 Lindsay Roy: Who in the company instructed this policy to be carried out?

Mike Peasland: It was a policy or a procedure that had been in place for a long time. It was just something that was almost indigenous within our organisation.

Q2627 Lindsay Roy: There must be a record of the decision to pursue that with the Consultancy Association somewhere within the company records, whether it is a board of directors’ meeting or whatever.

Mike Peasland: We, obviously, have some of the Consulting Association minutes, but we have no record of that information.

Lindsay Roy: I am not talking about records of meetings with the Consulting Association.

Mike Peasland: I thought you were asking for information.

Lindsay Roy: I am talking about records within the company as to how to pursue this process.

Mike Peasland: We have not found any records of that information.

Lindsay Roy: Have you looked for them?

Mike Peasland: We have looked.

Q2628 Chair: Given the point that you were just obeying orders, if there is not individual guilt, there surely is a general principle here of collective guilt for the company as a whole. We have just seen banks fined huge amounts of money, both in damages and exemplary damages. Do you think it is appropriate that the same thing either should happen to you through the courts or that you and other building firms should be voluntarily making financial contributions in order to compensate some of the workers whose lives have been ruined by your actions, and from which you have profited?

Mike Peasland: As I said, the courts are there to support the people. The first course of action for them is through the courts. That is what the courts are for. But we will not rest on that wholly. We will look at any individual case where there is a bona fide issue and an issue against Balfour Beatty.

Chair: We did say earlier on informally when we met outside that, at the end, we would give you the opportunity to answer any-

Q2629 Jim McGovern: I have one more question. When was this submission to the Committee written and who was it compiled by?

Mike Peasland: We have been iterating it over time. It was submitted to you this week, so it would have been completed this week.

Q2630 Jim McGovern: I am just intrigued because it says: "We have ceased all contact with Ian Kerr." He died last year, so it is obvious that you have ceased all contact with him. Is this contemporaneous or is it old stuff?

Mike Peasland: That is information that we put in the latest information. Ian Kerr is AKA the Consulting Association.

Q2631 Chair: As I was saying, are there any questions for which you had answers prepared that we have not asked, or are there any points that you want to make that you feel we have not covered adequately?

Mike Peasland: I think we have covered all the points. I would add that we have robust processes in place. This will not happen again. This is a historical issue. This has not happened in Balfour Beatty since 2009, and we are confident that this will not happen going forward. We have no evidence that this has happened since 2009.

Chair: Fine. Thank you very much for being with us for so long. We had not anticipated that we would necessarily take so long, but there was quite a lot of ground to cover, as you will appreciate. Thank you very much.

Prepared 19th March 2013