Examination of Witnesses (Questions 1-19)
RT HON
JOHN HUTTON
MP
1 NOVEMBER 2005
Q1 Chairman: May I welcome our witness
this morning, John Hutton, the Chancellor of the Duchy of Lancaster,
and the Minister for the Cabinet Office. We are delighted to have
you. I understand you are not going to say anything by way of
introduction, so, with your permission, we will plough on, and
I am sure you will be able to say anything you want to say as
we go along. I remember Michael Heseltine once telling us here
that the Cabinet Office is a "bran tub"—which
means you can find anything in it that you want; it is lucky dip
time. It means that these sessions are inevitably wide-ranging
because the Cabinet Office goes almost everywhere. I am sure that
will be reflected in what we do. We take some pleasure in the
fact that as a committee we have a continuing interest in public
service reform issues. We like to think we make a contribution
to that. We note with pleasure that a recommendation that we made
earlier in the year that there should be what we called a Public
Satisfaction Index (a way of giving systematic consumer monitoring
of public services) is something you have picked up and are calling
a Consumer Satisfaction Index. I suspect colleagues may want to
ask you about that as we go along. That is broadly the background.
Let me start by asking you this—perhaps to get it out of
the way: objective 4 of the Cabinet Office's objectives is: "To
promote standards that ensure good governance, including adherence
to the Ministerial and Civil Service Codes". There is a difficulty
about this floating around again at the moment, as you will not
be unaware. Is it your understanding that adherence to the Business
Appointment Rules as described in the Ministerial Code is a voluntary
activity?
Mr Hutton: No. It is a requirement.
Q2 Chairman: Right. And if the requirement
is breached what happens then?
Mr Hutton: That is a matter for
the Prime Minister to decide. He is responsible for adjudicating
on allegations of breach of the Ministerial Code.
Q3 Chairman: Do you think it is satisfactory
that it should be a voluntary requirement?
Mr Hutton: Ministers leaving the
Government are required to consult the committee, so, to that
extent, the code, I think, is clear. The code also makes clear,
however, that it is for the retiring minister to decide whether
to accept the advice of the Advisory Committee or not. That has
always been the position. If the retiring or resigning minister
decides not to follow the advice, then the Business Appointments
Committee make it clear they will publish their advice. I think
that probably strikes the right balance.
Q4 Chairman: If a minister, even
if consulting the Business Appointments Committee, decided not
to follow their advice, that would be satisfactory too?
Mr Hutton: If a minister decided
not to follow the advice, as I have said, the Advisory Committee
would clearly publish the advice that had been given. They have
made it clear that they will do that. I think that is the accepted
position. It has been the position for some considerable time
in relation to the code. The fundamental question, I would say,
is this: the code is designed fundamentally to deal with problems
about conflict of interest or suggestions of impropriety. I think
that, fundamentally, is the issue on which people need to focus
when they are looking at or trying to judge the behaviour of Ministers.
The code has always made it clear that there is a requirement
to consult—and that should be observed—but it is for
the retiring minister to make his or her decision about the advice
he or she receives, and then that would be in the public domain
and there would undoubtedly be argument about it. I think, as
I have said, that does strike the right balance here. The Secretary
for the Cabinet has made it clear that the code is there to advise.
It is not a "rule book," to use his expression. Ministers
through the years—all of us who are members of this House—have
to be able to account for our behaviour and to justify our behaviour.
Q5 Chairman: Obviously procedures
matter. We have spent quite a lot of time in the past demanding
that procedures matter. Do you remember, we used to get very exercised
by those Conservative former ministers who used to go straight
from privatising industries into the boardrooms of those industries?
We were pretty clear that we wanted some rules in this area and
we wanted adherence to those rules. We should not really be casual,
should we, when rules are not adhered to?
Mr Hutton: I am not suggesting
we should be. In relation to this particular incident, I do not
want to go into any detail because I do not think that would be
appropriate at this stage. The basic point I am trying to make
is illustrated well by the example you have just given of the
Minister leaving Government and going straight into work with
an industry that he had been involved in privatising. There is
an obvious conflict of interest in that situation, and it was
to prevent conflicts of interest that the procedure was established.
I agree with you that procedures matter. They are important and
they should be adhered to. In relation to this particular case,
as it is well known, the Secretary of State for Work and Pensions
has made it clear that he should have followed procedure, but
he argues very strongly that there was some confusion about the
procedure and what he was or was not required to do. I do not
want to go into the details of that because I do not think it
would be appropriate. I do not have in front of me, Chairman,
all of the details.
Q6 Chairman: No. As you realise,
I am not doing that; I am trying to establish some of the principles
involved here. Are these rules voluntary for departing civil servants
too?
Mr Hutton: I think they are a
requirement for departing civil servants in the same way as they
are for ministers. There is a requirement to consult, yes.
Q7 Chairman: But, if I am right,
I think the requirement on civil servants is a compulsory requirement
not just to consult but to take account of what they are told.
I think it is a more permissive arrangement with ministers and
I am wondering if you think that is a satisfactory or acceptable
difference.
Mr Hutton: The code is prepared
by the Prime Minister. It is the Prime Minister's responsibility
to construct a set of rules and then to police them. The arrangements
in relation to civil servants are exactly as you have described
them. Because of maybe the differences in roles and responsibilities,
I think that might be a much more appropriate and sensible balance
to strike. It is difficult. I am sure there will be members of
this Committee who have a different view about it, and I am sure
we will get into that, but I do want to emphasise this point,
Chairman—I know I have done it once, and I would like to
do it again—that the really important thing to focus on
is the abuse. What is the abuse that people are alleging? What
are the consequences of that? And is there any impropriety in
terms of a conflict of interest? It is those three things that
the Ministerial Code in particular is designed to try to target.
Q8 Chairman: That leads us on directly
to another question. In the absence of any effective investigatory
machinery, we cannot even establish what the facts of the case
are upon which a political judgment can be made. With the absence
of a machinery of that kind which we have recommended in that
area, which the Committee on Standards in Public Life is recommending
in that area, every time a case comes up like this, does it not
show that it would be useful all round if there were somewhere
somebody who could take on a case and find out what had happened?—so
that we all at least know the facts that we are dealing with.
Mr Hutton: Again, it is for the
Prime Minister to decide what actions he wants to take in relation
to any allegation of a breach of the Ministerial Code. That has
always been the position. I recall, in relation to a previous
series of allegations against the Secretary of State for Work
and Pensions at the end of last year, that precisely such an external
inquiry was established to investigate the allegations then.
Q9 Chairman: The person who undertook
it, Sir Alan Budd, who came and gave evidence to us, said that
he thought this was a quite unsatisfactory way of proceeding,
that it would be much better if there were some proper machinery
in place to do this kind of thing.
Mr Hutton: This issue has been
raised before. I think it was raised in the ninth report of Sir
Alistair Graham's committee.[5]
The point is an arguable point and our response to it indicated
that we would set up appropriate machinery to investigate allegations
of impropriety, and that is the responsibility of the Prime Minister.
He will make the decision as to what investigative arrangements
are necessary to pursue an allegation against a minister or a
former minister. We have disputed the idea that there should be
a number of people who are appointed, for example, at the beginning
of a parliament, who have this particular responsibility or who
should be appointed to do that. We do not think that is necessarily
a terribly sensible way to proceed. We would like to look at each
case on its merits and to make a decision about what the appropriate
way to investigate any allegation is.
Q10 Chairman: I suspect this issue is
one which will be reviewed again in the light of what has happened.
Let me just ask you this on the same area: the Prime Minister
commissioned a review of the Business Appointment Rules about
two years ago. You look puzzled about this. I can assure you that
there was such a review; I can assure you that Sir Patrick Brown
undertook it.
Mr Hutton: That was in relation
to civil servants, I think.
Q11 Chairman: There was a review
of the Business Appointment Rules because clearly they were felt
in some way not to be adequate or working well. When we saw Sir
Patrick Brown over a year ago, he said this review would be done
by Christmas. It has not yet been sighted and I wondered what
had happened to it.
Mr Hutton: I will have to write
to the Committee about that and let you know where it has got
to, but my understanding is that Sir Patrick Brown was looking
at the rules in relation to people who are civil servants leaving
the Civil Service.[6]
Q12 Chairman: You have no idea what has
happened to it anyway?
Mr Hutton: It certainly has not
come on my desk, that is for sure.
Q13 Mr Liddell-Grainger: You have
very neatly skirted round some of this by saying it is up to the
Prime Minister. Should it be up to the Prime Minister or should
it be up to Parliament to decide when a minister is investigated?
We have written copious reports on the Civil Service and copious
reports on the Ombudsman and all the rest of it. Do you not think
it should be taken away from the Prime Minister if there is a
discrepancy in public life of the behaviour of a minister or a
secretary of state?
Mr Hutton: I personally think
it is the responsibility of the Prime Minister. He, after all,
appoints ministers and is ultimately responsible for their behaviour
and their conduct in government.
Q14 Mr Liddell-Grainger: He is accountable
to Parliament.
Mr Hutton: Yes.
Q15 Mr Liddell-Grainger: Should it
not be Parliament that investigates if there has been a breach?
It can be private; it can be public: it is up to Parliament to
decide. If the Prime Minister says, "Look, I'm terribly sorry,
he maybe has not been very clever"—and we are not talking
about any specific case—"but therefore it should be
okay"—the view that goes on out there and in the Westminster
village is not very clever.
Mr Hutton: That is an arguable
point. Our view is that it is entirely appropriate and entirely
consistent with our constitution, the way that we run affairs,
for these matters ultimately to be the responsibility of the Prime
Minister. If you look back on particular instances—and I
know Sir Alan Budd indicated some concerns about the process—I
think that was a transparent and open process and his report was
in the public domain. It could not be argued, for example, in
relation to that episode that anything was done in anything other
than an open and democratic way. I think the system can work in
that way. I think it is not, as it were, that it should be taken
as a given that if a prime minister has ultimate responsibility
for enforcing the code, therefore that is in itself a defective
process. I do not accept that and it is not an argument, I have
to say, that I remember anyone on the Conservative side making
when they were—
Q16 Mr Liddell-Grainger: I am not
making the point as a Conservative but as a parliamentarian.
Mr Hutton: No, but I am making
a political point and I think we have to be clear, all of us,
that there is inevitably an element of politics in this debate
and people will look for an advantage and a process that might
secure them some advantage. The wider fundamental point, I would
argue, is: What is the system that is most compatible with the
constitutional practice in this country? I think the practice
that has evolved—that I think is clearly defensible—is
one that would say it is the Prime Minister who should have ultimately
this responsibility.
Q17 Mr Liddell-Grainger: Could I
give you an example: Jo Moore and Martin Sixsmith. That was dragged
on and on and on. There were breaches everywhere. This Committee
got the changes in the end because nobody else would accept responsibility.
We had the Head of the Cabinet Office and everybody in here to
try to find that out. Surely, with examples like that and others
on all sides, in all governments going back, there really must
be some sort of way. You say the constitution. We do not have
a constitution. We have royal prerogative, which is up to the
Prime Minister. Surely it is the Prime Minister's decision. Do
you not think the Prime Minister should make that decision to
allow it to be investigated? We are investigated if we do something
wrong by Standards and Privileges. Why not the minister or secretary
of state?
Mr Hutton: That is the argument
and I am trying to explain to you why I think there is an alternative
viewpoint on this. There are many people, I am sure, who would
agree, that that would be a reform that we should make. It is
just not my view that that is a reform that we should make. I
do not believe there is anything fundamentally undemocratic or
ineffective or, if you like, conspiratorial about the present
arrangements. I do not believe that. I think the code has proven
itself to be an effective instrument. The argument that it could
only be effective if there is a parliamentary committee or some
parliamentary process to oversee it, I do not think, with great
respect, is a case that could be made out. There is of course
an argument to say that we should nonetheless do it. I understand
the argument that you are making—do not get me wrong—it
is a perfectly credible argument. I just do not see the evidence
for the fact that the current arrangements are unsatisfactory
or ineffective and cannot be made to work effectively. What matters
is a commitment to the principles that underpin the Ministerial
Code, and I think the Prime Minister has demonstrated that time
and time again.
Q18 Mr Liddell-Grainger: Are you
happy with trial by media?
Mr Hutton: No. Who is?
Q19 Mr Liddell-Grainger: Surely,
to take it out of trial by media, you have to make a decision,
the Prime Minister has to make a decision, to stop that.
Mr Hutton: So, if we were to set
up a parliamentary committee, none of the newspapers would write
stories about Mr Blunkett or anyone else.
Mr Liddell-Grainger: Yes, but they are
doing it because there is no other investigation of the process.
5 Committee on Standards in Public Life, Ninth
Report: Defining the Boundaries within the Executive: Ministers,
Special Advisers and the permanent Civil Service, Cm 5775,
8 April 2003, available at http://www.public-standards.gov.uk/publications/reports/9th_report/index.asp Back
6
Copies of Sir Patrick Brown's report, Review of the Business
Appointment Rules, have been placed in the House of Commons
library. Back
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