Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 16 JANUARY 2002
SIR RICHARD
MOTTRAM KCB, SIR
MICHAEL PEAT
KCVO AND MR
IAN MCEWEN
20. May I refer you to page 23 and paragraph
3.2 and the guidance on who can travel? It does not spell out
what is meant by staff of the Royal Household. Are you satisfied
that the guidance is clear enough to ensure that such accompanying
persons are justified by the nature of the visit?
(Sir Richard Mottram) Yes, Chairman.
21. Do you want to say a bit more about that?
(Sir Richard Mottram) We have visibility of the guidelines
which the Household apply and if there is any doubt about whether
it would be appropriate, they consult us. I do not know of cases
where we have felt that what was being done was not appropriate.
Some examples are given in the report of people who are not strictly
speaking covered, but I would not myself have difficulty with
the notion that if there were an artist involved in some journey
they should travel in this way.
22. Do you think there is further scope to reduce
costs to the grant-in-aid by defining more clearly which individuals
are eligible to have their travel costs met by the grant-in-aid?
(Sir Michael Peat) No, not really because as the NAO
said in their report, this is purely a technical documentation
point. It has been understood for years what staff means in this
context and we have all understood it, and DTLR have understood
it. All that has not happened is that no-one actually wrote it
down in the relevant guidance. It is a very simple minor documentation
point which is being referred to here.
23. Last question, just so the Ministry of Defence
does not feel neglected. Now that we have agreed that the royal
use of 32 Squadron is secondary to its military use can you tell
us anything about how its size and configuration might change?
(Mr McEwen) It has been confirmed that the current
size and configuration are appropriate for the military tasks
it has to do, so there are no plans to change that in the near
future. The current aircraft are not intended to go out of service
until well into the next decade.
24. I must put it to you this way. We all know
that the Royal Yacht was supposed to be an ambulance ship, but
in fact it was the Royal Yacht. Now you are telling us that 32
Squadron is a military squadron. Are you saying that the military
use really is its dominant use and that the Queen would be turned
off a plane just because some general wanted to fly to Bosnia
or something? Are you telling us that would actually happen in
real life?
(Mr McEwen) The military requirement is the squadron's
basic raison d'être. If there is an operational need
for the planes, then clearly that would take precedence. The point
is, however, that what we are talking about is that the configuration
of the squadron is based on the need which would apply in a crisis.
Most of the time we are not in a crisis, so the squadron is not
required for all those operational needs that would occur then.
On that basis the Royal Household use the planes, Ministers use
the planes and senior military officers and officials in the Mod
and other departments can also use the planes.
25. Sir Michael, you might be asked whether
the Royal Family should use scheduled flights more often. Following
11 September has there been any more emphasis on the safety of
using 32 Squadron rather than scheduled flights?
(Sir Michael Peat) Yes, there have been concerns about
using scheduled flights and the security advice we get on that
is not really within our remit. The Queen was originally going
to go to Australia and New Zealand by scheduled flight for the
Commonwealth Heads of Government meeting. In fact the whole meeting
was cancelled as it happened, but before that happened our advice
was that she should not travel on a scheduled flight. I cannot
say personally how long we will receive advice along those lines.
Jon Trickett
26. Can you just explain to me about 32 Squadron?
How many aircraft and what manpower?
(Mr McEwen) As the report indicates, there are two
BAe 146 aircraft and these are four-engined jets taking about
21 passengers plus their luggage. There are five 125 aircraft
which can take about seven passengers. The total size of the squadron,
if I recall correctly, is 57 people.
27. You said it was configured for military
purposes. What did that particular phrase mean? It sounded like
a phrase you had practised a few times in front of the mirror
before you came here.
(Mr McEwen) No; merely the number and type of aircraft,
the two 146s and the five 125s.
28. Are you able to indicate the proportion
of use for military purposes and for non-military purposes, Royals
and politicians and so on? Do you have an idea?
(Mr McEwen) The purpose of the squadron is to meet
the operational needs of a crisis. What we are saying is that
in the event of the scenarios which the Department has defined
to meet its commitments and tasks, in the event of a crisis you
would need all of those aircraft for operational purposes. In
normal peace time we do not. If we take the last full year, the
Royal Household used the squadron for about eight per cent of
its flying time, Ministers used it for about 16 per cent of the
flying time, training took up about 19 per cent of the total flying
time and 56 per cent of the flying time was taken up by general
military use.
29. As far as changing accounting which has
been used for re-charging the squadron to the Household is concerned,
is that something which is now uniform across all non-military
uses? Is it the same pounds per mile or however it is calculated?
(Mr McEwen) Yes, the variable charges are now the
same for all those who are charged.
30. To somebody who is not an accountant but
who as a councillor has been interested from time to time in creative
accountancy by a government which was not too keen on those things,
this does look slightly like creative accountancy, does it not,
since the cost of maintaining the squadron consists both of variable
and fixed costs? It is presumably true to say that this change
in accounting mechanisms has not resulted in a saving to the taxpayer
overall; in fact our brief says that there has been a saving to
the taxpayer. Presumably it means that there has been an increase
in the cost to the taxpayer of the Ministry of Defence and a reduction
in cost to the taxpayer of the Royal Household. Is that correct?
(Mr McEwen) No. The way the system worked under the
system of fixed and variable charges was that the fixed charges
for the Royal Household were worked out on the basis of the planned
flying hours by the Royal Household. Those fixed charges then
form part of the money which the MoD transferred to the DTLR,
which then formed part of the transfer to the grant-in-aid and
was then repaid to us by the Royal Household. So there was no
net effect, positive or negative, as far as the Ministry of Defence
was concerned, it was just a way of making visible the full material
costs to the Royal Household. Now that we are charging variable
costs, we do not have that circulation of money for the fixed
charge.
31. I would guess that the accounts will show
a change to the net cost to the Ministry. There is no other way
it can have been accounted for and it could be represented as
a soft-shoe shuffle, but since your argument is that this is now
a homogeneous treatment and all departments are treated just the
same I dare say it is arguable that fixed costs should not be
charged. The other argument might be though, if you are wanting
to argue the Ministry of Defence's case rather than the Household's
case, that actually what should have happened is the true cost,
that is fixed plus variable, should have been charged to all users.
It so happens that a method of accounting has been chosen which
is favourable to the net cost to the Household. Would you agree
with that?
(Sir Michael Peat) We are only 8 per cent users of
the service, so it would be slightly odd if the charging regime
was determined with just 8 per cent of the users in mind. As the
NAO say quite clearly in their report, there is a saving to the
taxpayer as a result of just charging the variable rate to the
Household because previously the Household were buying their air
services outside the public sector. We were buying them from charter
firms and therefore the money was going outside the public sector
to charter firms. We were paying more to charter firms than the
variable rate we might have paid to the Ministry of Defence. I
agree with the National Audit Office when they say that there
is a saving to the taxpayer as a result of the Household just
being charged variable rates.
32. No doubt that is because the private sector
are required, necessarily, to charge both fixed and variable costs.
That is a road I do not wish to go down. I do think that there
is clear evidence that somebody has applied decent management
techniques and as a result savings have been produced; there is
no doubt in my mind that this report does demonstrate that. May
I move on to the definition of private use of transport? I am
curious to understand whether, for example, the Royal Family going
to Balmoral would be regarded as private travel or whether it
would be regarded as something which was chargeable to the public
purse.
(Sir Michael Peat) Going to Balmoral is categorised
as residence to residence travel and not as private. That is because
the Queen travels as Head of State, she is accompanied by quite
a number of official staff and she continues to undertake official
work and duties whether she is at Balmoral or at Buckingham Palace.
When it is actually private the Queen pays herself.
33. Whenever she is moving from one residence
to another, or the family, it is appropriate not to regard it
as private in your view.
(Sir Michael Peat) No, not the family.
34. Those people who are nominated.
(Sir Michael Peat) Yes. It is only really Balmoral
because the Queen goes by car to the other residences.
35. Often I have come across people who have
gone on business somewhere but managed to secure some private
enjoyment while they are there carrying out business. I am sure
that will not be unfamiliar to you observing the private sector.
I am just wondering what happens in such circumstances. Is the
full cost charged to the public purse or is some balance struck
or how is that done were that ever to happen?
(Sir Michael Peat) The Chairman asked the question
earlier and our very clear ruling guideline on it is that business
and private should not be mixed and if it is a visit overseas
someone is doing for an official purpose at the request of the
Foreign Office or an official engagement in this country, that
is what it should be and private pleasure or private business,
for those members of the Royal Family who have private businesses—and
most do not, should not come into it.
36. Can you give us an assurance that there
has been no occasion upon which any member of the Royal Family
has received assistance with travel and used part of the visit
for business purposes, in other words for income generation, as
we know some members of the Royal Family are involved in private
business?
(Sir Michael Peat) Very few members of the Royal Family
are involved in private business; the Queen certainly is not,
nor the Duke of Edinburgh, Queen Mother, etcetera. The only member
of the Royal Family who undertakes official engagements who is
involved in private business is Prince Edward. He actually did
not use 32 Squadron at all last year as it happens but did undertake
two or three visits at the request of the Royal Visits Committee.
Yes, I can give you every assurance that it does not happen.
37. It has never happened.
(Sir Michael Peat) As far as I am aware it has never
happened.
38. You can use the past tense as well as the
present.
(Sir Michael Peat) Yes. We have only been responsible
for four years, as you know.
Mr Williams
39. Sir Michael, I believe this is likely to
be your last visit, is it not? You are moving on.
(Sir Michael Peat) Yes, I am afraid so.
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