PARLIAMENTARY DEBATE
Ministerial Appointments: Vetting and Managing Conflicts of Interest - 23 January 2023 (Commons/Commons Chamber)

Before we come to the urgent question, I remind right hon. and hon. Members that, while it is perfectly in order to ask questions about the vetting arrangements for Ministers and the processes in place for managing conflicts of interest, this is not a substantive motion about the conduct of any Member. It is therefore not in order to make personal criticism of any right hon. or hon. Member.

(Urgent Question): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on his Department’s processes for vetting ministerial appointments and managing conflicts of interest.

I thank the right hon. Lady for her question, to which it is a pleasure to respond.

To start with ministerial appointments, appointments made to His Majesty’s Government are a matter solely for the Prime Minister in line with his constitutional position as the Sovereign’s principal adviser and the head of the Government. It is for the Prime Minister to recommend individuals for appointment. In considering potential appointments, the Prime Minister may receive advice from the civil service on matters of propriety and potential conflicts of interest. The civil service has no role in approving or vetoing appointments as appointments are a matter for the Prime Minister. It would not be appropriate for me to comment further on the advice that may be given during the appointments process.

It is critical that all Prime Ministers are able to receive advice in confidence. I would not want to do anything to erode that ability. Once an appointment is made, the process for the management of conflicts of interest and potential conflicts is clear and robust, and follows the processes set out in the ministerial code. It is the responsibility of all Ministers to ensure that no conflict arises, or could reasonably be perceived to arise, between their role and their private interests, financial or otherwise. That is ultimately incumbent on the individual and it is clearly set out in the ministerial code. Ministers should declare and manage potential conflicts of interest, working with their permanent secretary and the independent adviser on Ministers’ interests. They are under an ongoing duty to further declare relevant changes to their interests.

Hon. Members will be aware that the Prime Minister has appointed Sir Laurie Magnus as his independent adviser on Ministers’ interests. Sir Laurie will be taking forward the work on the declaration of Ministers’ interests in line with his published terms of reference. As the Prime Minister confirmed this morning, the independent adviser will also be conducting an investigation to establish the facts surrounding the matters concerning my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) that have been subject to media reports over the weekend. I know that Sir Laurie will bring integrity and rigour to the role of independent adviser and the outcome of his work will be made public in due course.

Thank you, Mr Speaker, for granting this urgent question. We may have a carousel of Ministers, but it is the same old excuses every single time. Reports that the then Chancellor of the Exchequer agreed a settlement with HMRC, including a penalty, raise serious concerns about not just that case but standards in this entire Government. Can the Minister tell us if the vetting process raised flags to the former Prime Minister about the original appointment and when exactly did the current Prime Minister know? Does he know if and how this conflict of interest was managed, and why was it kept secret? Is there no system in place to prevent a person being actively investigated for unpaid tax from being appointed to run the UK’s tax system? Maybe it is that absurd that no one would ever think it would happen. While we understand the confidentiality of the honours process, surely where a serving Minister is blocked, there is an overwhelming case for sounding the alarm. So did that happen and where is the report? If not, why is there a lower bar to get into this Cabinet than there is to get a knighthood?

No. 10 apparently still does not know if other Ministers are in dispute over their own taxes, so what is the Prime Minister doing about it? Last week, he told the House that all questions had been answered and he was told there were no outstanding issues, yet now the independent adviser is investigating. So will he publish the terms of reference, and why does the Prime Minister need an adviser to tell him that this conduct is unethical? If this is not a breach of the ministerial code, surely the code itself is wrong and it is the Prime Minister’s job to fix it.

If the Prime Minister came clean about what he knew and when, and took responsibility for the conduct of his own Cabinet, would we need yet another investigation into another member of his top team? Even now, No. 10 says that the party chair retains the Prime Minister’s full confidence. How can the Prime Minister claim to deliver the integrity, professionalism and accountability that he promised while his Conservative party chair still sits in his Cabinet?

We follow a proper process under the ministerial code. Interests are required to be declared. They are required to be shared through the ministerial code process and discussed with permanent secretaries. I am absolutely confident that the usual process will have been followed in the appointment process by this Prime Minister for my right hon. Friend the Member for Stratford- on-Avon (Nadhim Zahawi). If there are issues to be raised in respect of historic activities, as was suggested by the weekend’s press, that is a matter for the independent adviser to look at. The summary of his findings will be published in due course. Integrity and accountability are critical, as is professionalism, and the Government will wait and hear the facts before taking decisions based on those facts. The right hon. Lady would do well to do the same.

It is a great shame that the processes of the propriety and ethics team of our civil service are being called into disrepute by the comments of the right hon. Member for Ashton-under-Lyne (Angela Rayner). We have to accept in public life that there are times when you may be asked to serve in government. When you go through that process, you are required, rightly, to disclose absolutely everything that might cause conflict with you being a Minister of the Crown. Does my right hon. Friend agree that that process can survive only when there is both confidentiality about disclosures and tolerance on all sides while that process is completed?

I thank my hon. Friend for what he said. He is absolutely right. For people being called into government, there is a proper process and there is a requirement for full disclosure. For that process to continue to be meaningful and to work for decades into the future, we need to retain confidentiality. That has to be part of it and the right way forward when an issue has been raised is for the independent adviser to look into it, as he is doing.

I call the SNP spokesperson.

Here is what we know about the appointment of the BBC chair. The BBC chair Richard Sharp helped to arrange a £600,000 loan for the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), weeks before he was chosen by the former Prime Minister to become BBC chair. Mr Sharp appeared before the Digital, Culture, Media and Sport Committee, on which I sit. We grilled him about his £400,000 gift to the Conservative party. However, he did not disclose his role in getting the man appointing him a huge loan. Mr Sharp, the former Prime Minister and the cousin offering the loan dined together at Chequers pre-loan and pre-appointment—and the former Prime Minister’s spokesperson says, “So what? Big deal.”

The Cabinet Office ethics team told the former Prime Minister to stop talking to Mr Sharp about his finances. Ministers told other applicants not to waste their time applying; the appointment was to go to the friend of the right hon. Member for Uxbridge and South Ruislip, the Tory donor. Even by the grubby standards of this Government, it is all a bit banana republic, is it not?

I thank the hon. Gentleman for his question. As he knows, there was a very robust process in place for the appointment of the chairman of the BBC, including a pre-appointment hearing. I read the transcript this morning, in which he played his usual prominent role in grilling the appointee, pre-appointment. It was an incredibly robust process, with an independent panel of five members going through that process. To reassure the House, I understand that the Commissioner for Public Appointments is going to double-check that that process was absolutely consistent with the proper governance expected of these appointments. I know that the chairman of the BBC has invited the BBC’s senior non-executive director to discuss the matter with the board to make certain that all relevant conflicts of interest were properly disclosed. So there are two processes ongoing. But this was a very robust process.

I am astonished, though I should not be, at the brass neck of the shadow Leader of the Opposition in suggesting that the Prime Minister did not need to ask his independent adviser about the matter when the Opposition spent months calling for an independent adviser to be appointed. Is my right hon. Friend the Minister aware of any plans that the independent adviser has to publish an updated list of ministerial interests?

My hon. Friend is absolutely right. Opposition Members have been calling for an independent adviser for months. When one is appointed, it is not good enough; then they say that the Government should take all decisions by themselves, without all the facts. It is useful to have an independent adviser to deal with these issues when appropriate. I reassure my hon. Friend that my understanding is that the independent adviser plans to issue a publication on ministerial interests before his report in May.

The Public Administration and Constitutional Affairs Committee, of which I am a member, is ready to help, and looks forward to meeting the new ethics adviser. The Prime Minister has said that there are questions to be answered. The Minister has been very careful to say that declaring interests under the ministerial code is up to the individual, which is correct. Did the Prime Minister know that the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) was due to be investigated?

The usual appointment process was undertaken, so the Prime Minister will have had the benefit of full disclosure of the interests that my right hon. Friend the Member for Stratford-on-Avon declared when the Prime Minister appointed him chair of the Conservative party.

The Prime Minister correctly asked his independent adviser on ministers’ interests to establish the facts. Does my right hon. Friend agree that we must not prejudge the outcome, and should allow the process to conclude?

I agree. That is the purpose of having an independent adviser. He has been asked to investigate, and to work out exactly what the facts are. It would be ill-judged to make a decision before knowing all the facts that pertain.

I am sure that we all remember the Prime Minister’s first speech from Downing Street, in which he promised us

“integrity, professionalism and accountability at every level.”

Unfortunately, we have seen precious little evidence of that so far. This weekend, yet more doubt has been heaped on the minds of the electorate, certainly in my constituency, as to whether they can trust politicians. Does the Minister accept that unless something is done very quickly about the vetting and management of conflicts of interest, further damage will be done to the British public’s confidence in this place?

We have the Nolan principles and the ministerial code. Both are extremely important documents, and extremely important approaches. The hon. Lady rightly refers to professionalism, but part of professionalism is being certain to take decisions based on all the facts. I know that she will respect the point that it is useful to have those facts established, but I concede that they should be established swiftly.

Does my right hon. Friend agree that under their bluster, what Opposition Members are really saying is that there are various questions to which they do not have the answer, and issues that they do not have the facts about, not least because His Majesty’s Revenue and Customs does not comment on people’s tax affairs? It is absolutely right that the independent adviser be allowed to collect and publish those facts, to set the record straight.

Indeed. I have absolutely no doubt that my right hon. Friend the Member for Stratford-on-Avon will co-operate in every way with the independent adviser to make certain that all the facts are known. In due course, the independent adviser will come to his conclusions, and the summarised conclusions will be published.

The Prime Minister stood on the steps of No. 10 Downing Street and promised the nation that he would act with integrity, yet here we are again. Is this whole affair not yet more proof that there are far more likely to be conflicts of interest when we have a Government of the super-rich, for the super-rich?

I would never have guessed that I would get a question along those lines from the hon. Gentleman. The important thing, as the Prime Minister said, is integrity, accountability and professionalism. That is absolutely right; that absolutely underpins this Government. Part of that is about making certain that we have the facts—and that is what we are undertaking to do under the auspices of the independent adviser.

The ministerial code seems now to be a set of guidelines. This is starting to sound like a script for “Pirates of the Caribbean”. If someone has disclosed that they are in dispute with the Inland Revenue about their taxes, is it appropriate to appoint that person as Chancellor of the Exchequer? Surely the matter should have been resolved before such an appointment took place.

The hon. Gentleman will have to excuse me: I do not know what was disclosed, and nor does the hon. Gentleman. That is why we have an independent adviser making certain that we have the facts addressed.

The current chairman of the Conservative party went on television before he settled his tax debt and said that his tax affairs were “fully paid and up to date”. We now know that that statement was untrue, do we not?

I have a great deal of respect for the right hon. Gentleman, but he knows that I do not know the answer to that question—I genuinely do not. But I have no doubt that the work of the independent adviser will establish the facts and that that will be reported to the Prime Minister.

The challenge here for the Minister is that the original allegations arose in July of last year, publicly. Indeed, there was subsequent evidence that lawyers were instructed to try to suppress those allegations, well before any appointment was made by his political party, or indeed by the Prime Minister. The Minister talks about allegations arising this weekend. Whose due diligence was lacking: was it the Cabinet Office’s, was it the Conservative office’s, or are we just not being told the whole truth in this matter?

The full process would have been undergone, in terms of the appointment of my right hon. Friend the Member for Stratford-on-Avon to the Government as chairman of the Conservative party or his appointment to the Cabinet Office, when he was appointed by this Prime Minister. That was clearly in a period after the July commentary in the press. I do not know what was disclosed; I imagine that everything was disclosed, but that is a matter for the independent adviser to ascertain.

BBC journalists have to spend a great deal of their time defending the BBC’s impartiality and integrity from criticism from all sides in this country. How is their job made easier by the revelation that the current BBC chairman involved himself in the private financial affairs of the then Prime Minister before he was appointed to the job? That was something that, under civil service rules and BBC rules, they should both have disclosed to the independent Commissioner for Public Appointments, but apparently—according to the former commissioner Sir Peter Riddell—neither did.

My understanding is that my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) and the gentleman in question have both said that no financial advice was provided from one to the other. That is my understanding. I do know that the chairman of the BBC has invited the senior non-executive at the BBC to look into his disclosures to make certain that everything was done properly. That process will also be undertaken by William Shawcross as Commissioner for Public Appointments, to make certain that the process, which appeared to be an extremely robust one—indeed, it involved a grilling in front of the Select Committee, before the right hon. Member for Exeter (Mr Bradshaw) and others—was absolutely consistent with the Government’s rules on these appointments.

Actually, the Minister is making an interesting point. Before the candidate appeared before the Select Committee, he had to fill in a questionnaire and answer the question, “Do you currently or potentially have a business, financial or non-pecuniary interest or commitment that might give rise to the perception of a conflict of interest if you are appointed?” Does the Minister agree that helping to arrange an £800,000 loan for the person ultimately responsible for the appointment was something that should have been declared in response to that question?

The hon. Gentleman is making a statement about helping to arrange a loan. I do not know the basis on which he makes that assertion, but I know that all matters to do with any conflicts of interest or perception of conflicts of interest will be looked at by the BBC under the process established by the chairman.

On Wednesday the Prime Minister stated that there were no outstanding issues. By the weekend, he had ordered an independent internal investigation. Can the Minister ensure that all the information that escalated this from “nothing to see” to an investigation of this kind is placed in the Library of the House?

What is absolutely the case is that a summary of the findings of the independent adviser and the outcome of that work will be shared with the House.

A person is 23 times more likely to be prosecuted for benefit irregularities than to be prosecuted for tax irregularities, but tax irregularities lose the economy nine times more. Have the Government any plans to redress that imbalance?

As I know from my work in the Cabinet Office, there is a huge focus across Government on ensuring that we go after tax evasion in all its forms. It is incredibly important that we do so and that we cut waste across Government, particularly when it results from fraudulent behaviour. That is what we do every day, and HMRC is responsible for following it up and making certain that people pay the tax that is owed.

I am hearing from constituents that they are heartily sick and tired of incessantly reading stories about tax irregularities, cheating and fraud, and the self-serving elite. Faith in politics and in this institution is at an all-time low, as is faith in the BBC in the light of these revelations. The one common denominator is the Conservative party, and this will only ever be cleared up once that lot are out of the door and out of government.

I am not certain what the question was, but I certainly disagree with the tone taken by the hon. Gentleman. I think that we have an incredibly valuable organisation in the shape of the BBC. I for one support it, and I think it is unfortunate to start making allegations about the BBC as a whole on the basis of something the facts of which are disputed.

Are any other Ministers currently in dispute with HMRC about their tax arrangements?

It is a matter for individual Ministers to go through the proper process under the ministerial code, and that is what everyone does. It is a requirement under this Government, as it has been a requirement under all Governments. There is full disclosure in that process. The Minister needs to talk to his or her permanent secretary, and it is critical that no conflicts of interest or, indeed, perceived conflicts of interest are established.

Will the inquiry confirm the nature of the agreement between the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) and HMRC?

I have every confidence that my right hon. Friend the Member for Stratford-on-Avon will be totally open with the independent adviser who will be producing a report for the Prime Minister so that the facts can be fully established.

With respect, the Minister is attempting to balance on the head of a pin when it comes to Richard Sharp’s involvement in the loan to the former Prime Minister. He may not have provided advice and he may not have arranged it, but he was clearly involved in the introduction. On that basis, should he not have made the declaration referred to by my hon. Friend the Member for Cardiff West (Kevin Brennan) when he appeared before the Committee?

Obviously Mr Sharp felt that that was not required, and that that was not the case. I understand that a process was put in place to separate him from the loan arrangement. As I have said, Mr Sharp has asked a senior non-executive director at the BBC to ensure that all matters relating to disclosure were followed correctly by him in this process.

Can the Minister tell us whether any Ministers were informed that the Conservative party chair had been blocked from receiving an honour? If so, did the Government take any action after receiving that news?

I genuinely do not know the answer to that question. There is a process for honours and awards, which is kept highly confidential. I do not know whether my right hon. Friend was up for an award or whether that was blocked. It would have been a very tight process and I do not know if there is any ministerial involvement in that process.

Here we go once again, having a debate after being angered by the lack of ethics and the alleged serious wrongdoing of Government Ministers. Despite the Prime Minister making big promises about integrity, professionalism and accountability, we know that he will do diddly squat about it because he is too weak and he is beholden to those very Cabinet Ministers to cling to power. Does the Minister not think that the British people will smell a rat when they see that the Conservative party chairman, when he was Chancellor, was supposed to be in charge of the Government’s finances at the same time as trying to strike a multimillion-pound tax deal with HMRC for alleged serious wrongdoing?

The hon. Gentleman’s view of the Government and mine come from different perspectives. I have a huge amount of time for my right hon. Friend the Prime Minister, who is leading this Government in the right direction. The hon. Gentleman is unwise to take a view on the outcome of an inquiry that has not yet properly commenced. But it will—the independent adviser will get there and will establish the facts.

Can the Minister confirm whether the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) will make his tax affairs transparent to an investigation by the independent adviser, and will he confirm that the Prime Minister will set that as a requirement of the investigation?

As I have made clear, I cannot imagine circumstances under which my right hon. Friend the Member for Stratford-on-Avon would not wish to be fully transparent with the independent adviser. That will be necessary for the independent adviser to do his job and it will enable him to establish the facts.

I will not get into the specifics of the individuals concerned but, following on from the question from the hon. Member for Guildford (Angela Richardson), I want to know why we do not yet have in the public domain the financial interests of all Ministers. The list on the website is 243 days old. It is not even an accurate list of Ministers. It is not even an accurate list of the last set of Ministers or the one before that.

This Government have been in place for 90 days. There are now Ministers who were not even a Member of either House back then and who do not appear anywhere. Surely, the public ought to know within a week or so of a Minister being appointed what all their financial interests are. Why can we not have that? Why must we wait another three months—that is what the Minister said earlier—before we find out all the financial interests of Ministers? We should know that now.

It may be three months, but it may be three hours. My understanding is that it will be by May. I cannot commit to a date because I am not the independent adviser. He has work to do to publish it, but my understanding is that an updated list of financial interests will be published before his report is out in May.