You are here: Parliament home page > Parliamentary business > Publications and Records > Committee Publications > All Select Committee Publications > Commons Select Committees > Public Administration > Public Administration

UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 884-iv

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

PUBLIC ADMINISTRATION SELECT COMMITTEE

 

 

ETHICS AND STANDARDS

 

 

Thursday 27 April 2006

SIR ALISTAIR GRAHAM and MR RICHARD JARVIS

Evidence heard in Public Questions 164 - 249

 

 

USE OF THE TRANSCRIPT

1.

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

 

2.

Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

 

3.

Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.

 

4.

Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.

 


Oral Evidence

Taken before the Public Administration Select Committee

on Thursday 27 April 2006

Members present

Dr Tony Wright, in the Chair

Mr David Burrowes

Paul Flynn

David Heyes

Kelvin Hopkins

Julie Morgan

Mr Gordon Prentice

Jenny Willott

________________

Witnesses: Sir Alistair Graham, Chairman, and Mr Richard Jarvis, Assistant Secretary, Committee on Standards in Public Life, gave evidence.

Q164 Chairman: Good morning everyone, and a particular welcome to our witnesses, Sir Alistair Graham, who chairs the Committee on Standards in Public Life, and Richard Jarvis, who is part of the secretariat. I am sure I have forgotten your exact title.

Mr Jarvis: I am the Assistant Secretary.

Q165 Chairman: Thank you very much for coming along. As you know, this Committee is having an inquiry into the general area of ethical regulation in government. You are a major part of that landscape and therefore we wanted to take some evidence from you. Do you want to say something by way of introduction, Alistair?

Sir Alistair Graham: Yes, I think it would be useful if I made a short opening statement. Thank you, Chairman, for the opportunity to come before you. Given that your inquiry is focusing on institutional arrangements for the regulation of ethical issues, I thought it might be helpful if I very briefly summarised some key points about the committee's status, its wide remit, the impact we think it has had and why we think it has been effective and, finally, the functions it believes it has and can continue to perform. First on status, it is important to stress that the committee is not a regulator. We are an independent committee which provides public policy advice to the Prime Minister on issues of ethics and propriety. We do not have any executive or regulatory powers or functions. Our line of accountability is to the Prime Minister and, through him, to Parliament, and he, in turn, is accountable for standards of conduct within government. Our role to provide public policy advice to the Prime Minister essentially, therefore, defines our status. The committee's remit is a wide one: to provide policy advice on standards of conduct of all public office holders, elected and appointed, central and local; and this is not, I believe, a remit that is duplicated by any other body. This remit means that, in addition to providing advice about standards of conduct within the Executive, the committee also has a role in providing public policy advice about standards of conduct in Parliament, and here our advice is given through the Prime Minister to Parliament. In terms of our impact, the breadth of our remit has, I believe, contributed to the impact the committee has been able to make over the last 11 years. Our written evidence sets this out in some detail and demonstrates we have had an impact throughout the public sector, through the incorporation of the seven principles of public life and the codes of conduct, and on the standards regime for Parliament, public bodies, for local government, for ministers and civil servants and for electoral propriety. In addition to our wide remit, we believe that the effectiveness of the committee drives from its ability to revisit sensitive and challenging policy questions, a membership of the committee which mixes open competition with nominations by the leaders of the major parties and by reporting directly to the Prime Minister. In terms of our function, I would like to summarise what we are and what we think we can continue to fulfil. First of all, identifying gaps in the current arrangements for ensuring the highest standards of conduct in public life and recommending proportionate (and I stress the word proportionate) measures based upon principles of strategic regulation to address the gaps, second, reviewing the impact and effectiveness of measures introduced to ensure the highest standards of conduct in public life, making recommendations for change where necessary and, third, scanning the horizon to identify potential problems and challenges that may impact upon standards of conduct in public life. The functions are, I believe, as important now as when the committee was created some 11 years ago.

Q166 Chairman: Thank you very much for that. It must be disappointing for you on the committee, we have had you for, as you say, 11 years, and you have spawned out of your work these new regulatory bodies. You say you are not a regulator but your work has given rise to a whole range of regulatory bodies. We have you in place, we have a range of new regulators and yet public confidence in standards in public life has not shifted by an inch. How are we to explain this?

Sir Alistair Graham: It is disappointing that there is this gap in public perception of standards in public life and trust in senior public office holders and the machinery that has been put in place, which I think has made a difference. I do believe that, for example, in terms of public appointments, the concentration on the appointment of people on merit is of enormous significance, and I think we do have to be careful in taking too gloomy a view about this. For example, from the survey which we carried out and published in 2004, 73 per cent, if I remember rightly, thought that the work of our committee was valuable, 45 per cent thought that standards of conduct were as high or higher than in the rest of Europe, but there are some problems in terms of trust in terms of public officials, though we should remember that the public officials that members of the population have most contact with - their local head teacher, their local general practitioner, even their local MP as opposed to MPs as a collective group - they have much more trust and confidence in.

Q167 Chairman: People turn to you at moments of difficulty to ask for your view on things, and there is an expectation that you will do something about it. In fact it is very difficult for you to do something about it because that is not, in the short-term, what you are about, is it? There is a sort of noises off when these things happen, because you cannot investigate particular cases, and you have a work programme and you do not respond, in the short-term, to difficulties that arise. Does that mean that there is a distance between the work that you are doing and the political pressures of the moment?

Sir Alistair Graham: I think it is an advantage, to some extent, that we have got this over-arching, public sector-wide review that covers, as I have said in my opening statement, the whole range of officials, both elected and unelected, and that we can stand back. For example, if you take the current controversy over loans for peerages, we are carrying out an inquiry, which we have published and issued some questions papers, and we are going to start a public hearing shortly on the Electoral Commission. I should be very surprised if some of the issues that are currently of concern surrounding loans for peerages will not come up in terms of examining the mandate and how effectively it has been applied by the Electoral Commission. You are absolutely right, as soon as a controversy arises we do not rush into some sort of inquiry into it, we do take a longer, considered look, but I do not think that is a disadvantage; I think that is an advantage.

Q168 Chairman: When should ministers resign?

Sir Alistair Graham: Ministers, of course, have to resign when they lose the confidence of the Prime Minister. In terms of whether they should resign when political difficulties arise in their particular areas of responsibilities, I do not think that is a matter for me to make a judgment. There clearly have been resignations when there have been, say, breaches of the Ministerial Code of Conduct, and the committee has made recommendations, which we have made some modest progress on but, I think, there is still some way to go, into how those breaches should be investigated.

Q169 Chairman: If someone asked you now whether Charles Clarke should resign or not, as the guardian of the seven principles of public life, the guardian of the Ministerial Code, would you be able to help someone with that inquiry?

Sir Alistair Graham: I do not think it would be appropriate for me, in the end, which is a political debate and part of the democratic system where government ministers have to be held to account for their actions, because I am not the guardian of the Ministerial Code. The Prime Minister is the guardian of the Ministerial Code of Conduct and it is up to the Prime Minister, as head of the Government, to decide whether the political difficulties are so great that a minister's position has become untenable.

Q170 Chairman: Do you think the case of Charles Clarke warrants an investigation under the Ministerial Code?

Sir Alistair Graham: No.

Q171 Chairman: For which reason?

Sir Alistair Graham: I do not think it arises as a breach of the Ministerial Code. It is about a matter in terms of how he has carried out his duties as the Home Secretary and whether questions of competence arise which preclude him from being an effective minister in the future, and I do not think that is a matter for investigation under the Ministerial Code of Conduct.

Q172 Chairman: There are issues about accountability for actions, are there not, which do come within the Ministerial Code. Is not one of the issues around the Ministerial Code, which your committee has reported on endlessly over the years, the need for some proper investigatory mechanism? In a case like this, where is the investigatory mechanism that is going to tell Parliament and tell the public precisely what happened, who did what, how did we arrive at this position?

Sir Alistair Graham: A lot of political crises arise, such as the one relating to the release of prisoners who should have been deported. That is a matter to be dealt with in our democratic system in the House of Commons. He has to make a statement, has to account for himself, both in the House of Commons and to the wider public, and it is part of that debate and, in the end, it is a matter for the Prime Minister: has that minister got into such serious difficulties that their competence is seriously in question and, therefore, can the Prime Minister no longer have such a person in Government? That is part of the cut and thrust of the democratic system. I think that is different from issues of conduct that have arisen under the Ministerial Code of Conduct. Of course, I have argued very strongly, it would be much fairer to ministers and to the public if there was a proper arrangement for investigating allegations of the breaches of the Ministerial Code of Conduct. As I say, we have made modest progress with the appointment of Sir John Bourne, but it would be entirely inappropriate for him to investigate the competence of a minister vis-à-vis a public policy issue.

Q173 Chairman: It is a funny kind of code though, is it not, which gets extraordinarily exercised about what may be minor issues of financial impropriety and yet does not kick in at all when we get major issues of accountability for the work of the department? The argument that you make, of course, is that final judgments on people have to be made politically by the Prime Minister, but the fact-gathering, the finding out what happened, which is the point about having an investigator for the Ministerial Code, surely should kick in at that point. Whatever else happens, whatever the final political judgment is, we need to know precisely what happened, and at the moment we do not have a mechanism to do this, unless we think the Ministerial Code covers it, but you tell us that it does not?

Sir Alistair Graham: I do not think the Ministerial Code of Conduct was ever envisaged to do that. It was about setting critical standards in terms of ministers in terms of their behaviour, and I think political issues, policy issues, were meant to be dealt with within the Parliamentary framework and it is for ministers to be held accountable within that framework.

Q174 Chairman: Accountability is one of these seven principles of public life which your committee invented and which we endlessly repeat: "Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office." How can you say that issues of basic performance do not raise the accountability principle amongst the seven principles?

Sir Alistair Graham: It seems to me that if you were to follow the line that you might be arguing there, you would be having constant investigations, and that would become a substitute for political debate and for ministers being held to account in the House of Commons. It is the fundamental role of the House of Commons to hold the Executive to account for their actions in carrying out the business of government.

Q175 Chairman: You are mixing up two things. You are mixing up the political judgment that Parliament and the Prime Minister has to make finally. The first stage is finding out what happened. This is true of investigations under the Ministerial Code, as you see it, which is presumably why you have argued over the years that there has to be a proper investigatory mechanism. I am putting to you that there are issues of accountability in relation to the performance of departments which are raised inherently by your seven principles, and yet we have no mechanism to find out what happened so that the political judgment can be made. I would have thought, given what the committee has said over the years about this, that you would have taken a rather stronger line on it.

Sir Alistair Graham: No, I still think on policy issues, on issues relating to carrying out a secretary of state's duties, the appropriate place for seeking to bring the minister to account and getting him to come forward with the appropriate information upon which judgments can be made about the effectiveness and competence of the minister is the House of Commons. The House of Commons has its own machinery, through various Select Committees, to try and get under the surface of policy issues, but I think it would be an intolerable situation if the Ministerial Code of Conduct was constantly seeking investigations. I think it would then become a party-political process, constantly asking for investigations into alleged policy failures, and that is not what the code of conduct was ever intended to be about.

Chairman: Let me bring some colleagues in.

Q176 Julie Morgan: I wanted to ask you about the suspension of the Mayor of London. What are your views about the suspension, of Ken Livingstone who was elected, by an appointed body? Have you any views on that?

Sir Alistair Graham: Of course, the Ethical Code, or Standards Framework, which operates in local government was approved by Parliament, it has a statutory basis, and the arrangements that are in place for that Ethical Standards Framework and for judging people's behaviour against it were, I think, introduced in 2000 or 2002 - somewhere around that period that legislation was introduced. In our Tenth Inquiry we had a look at the operation of the Standards Board for England and we came to very strong conclusions, and I think it is a good example of how an independent committee like the Committee on Standards in Public Life can be radical in its approach, in which we said this was a far too centralist, bureaucratic, disproportionate system for the operation of the ethical standards. It was a top-down system, because all the complaints come into the centre and are investigated by the Standards Board for England. Inevitably there were large numbers of relatively trivial complaints, a backlog built up, the whole system came into disrepute. In our Tenth Inquiry we looked at this in some depth and we said we have got to radically change that system to be a bottom-up system in which a standards committee at local authority level takes responsibility for sifting complaints and only the most serious - and I am not saying whether the one relating to Ken Livingstone was in that category, I think it depends on the penalty that might be applied if it was proven - should be investigated and that the Standards Board for England should be a strategic regulator of this system throughout local government. I think, if we had had that system in place, the Ken Livingstone issue would have been dealt with at a more local level before it got escalated to such a serious level. I am pleased to say, the Government have accepted all but one of our recommendations as far as reforming the Ethical Standards Framework and how behaviour is judged in local government and I hope, and we will be watching very carefully, that the Government follows through our recommendations.

Q177 Julie Morgan: You think that the reaction to what Ken Livingstone did was an overreaction?

Sir Alistair Graham: I think that there was a lot of criticism that judgments were being made by non-elected people about his behaviour. I think it was a symptom of a failed system, and I think the important thing is to reform the system entirely. We have made recommendations for such reform, which have been accepted by the Government, which I think will radically improve that system.

Q178 Julie Morgan: The fact that this has ended up in the courts is a failure of the system?

Sir Alistair Graham: Undoubtedly.

Q179 Julie Morgan: Going back to public attitudes and public perceptions, whose responsibility do you think it is to improve the public's view of public life and how it operates?

Sir Alistair Graham: I think we all have a role to play, and I think one of the things for the future is that we should try and collectively co-ordinate our act. We have traditionally, through you, Chairman, worked very closely, we have good relations with the other ethical regulators, but I do think we need to try and improve the system. For example, when we produce a report the convention always was that the Government responded within three months. In the Tenth Inquiry Report they took a year to respond. There normally used to be a Parliamentary debate around reports that came from the Committee of Standards. I think this happens less often now. In our Annual Report we do an annual standards check to see what have been the good things and less good things over the past year. It might be useful if there was a Parliamentary debate to test the temperature, but in the end perceptions are changed by people's behaviour. As I say, I think we have made some real progress, I have been disappointed that this Government and this Prime Minister have not made standards a high priority. I think that it could have taken a stronger stance as far as standards in public life, which would have been helpful. For example, both your Select Committee and ourselves feel very strongly about the introduction of a Civil Service hack, and I am disappointed that the Government, having gone through a consultation process, seems to have no desire to proceed with that.

Q180 Julie Morgan: You have listed there a number of things that the Government could do which would put public standards at a higher level - the things that you have said about responding more quickly, automatically having debates. Do you think that if all those things were introduced that would help move things along a bit?

Sir Alistair Graham: It would help. There is no doubt about it, you just need one or two instances, and we have got a week where it is happening, to get enormous media attention which can undoubtedly influence the public perception. It is very difficult to have public perception exactly on a par with what many of us might believe the reality has been, but the gap is far too wide for comfort and all of us need to work together to try and narrow that gap because I think lack of trust in Government, lack of trust in ministers and senior public officials leads to public cynicism and a disengagement in the political system, which is very damaging for our democratic system.

Q181 Julie Morgan: You say that this Prime Minister has not put high standards as a priority in what he has done. Which Prime Ministers do you think have had high standards in public life as one of their priorities?

Sir Alistair Graham: The name that always flashes into mind is Attlee, I suppose. I think that is a fair question. I do not know that I have got a very straight answer on this, but this particular Prime Minister, for example, as soon as he took office extended our terms of reference to look into party-political funding and a report was produced on that which led to the Electoral Commission. Therefore, it is very disappointing that the 'loans for peerages' issue has developed in the way that it has. We have had a whole series of allegations against ministers, some of which have led to resignations, when clearly the procedure for dealing with an investigation into those allegations has been at fault and has not been fair to ministers, in my view. I think there have been ample opportunities to really introduce some changes to the Ministerial Code of Conduct - the introduction of the Civil Service Act - which I think would have done this Government a great deal of good. I have to take some responsibility in terms of failure, because clearly I have not persuaded the Prime Minister, through our reports and public comments, that there is a clear link between high ethical standards and improved delivery of public services, which is the top political priority of this Government. I think there is a good relationship between those two, but the Prime Minister, I think, has not seen it.

Q182 Julie Morgan: Why do you think he has not made that link?

Sir Alistair Graham: I have no idea. I do not know. It does not seem an obvious relationship immediately, but the Government has placed an enormous emphasis on target setting, and I know, because I was Chairman of the Strategic Health Authority, I sat on the NHS Appointments Commission, and so I have seen some of these poor ethical standards in relation, for example, to things like targets which have been damaging and have undermined the targets, and so I think some of the relationships are very strong and it is a pity that the Government has not pursued them.

Q183 Chairman: It is a curious charge you make, is it not: because the first thing the Government did when it came in was to extend the terms of reference of your committee to include the murky world of party funding which the previous Government had resolutely disbarred you from. The result of that is that we have this great big inquiry with this great big legislation where the belief was that transparency would deliver public confidence, setting up the Electoral Commission to guard this whole area, and, of course, the consequence is that transparency just leads to more questions. It does not provide the answer at all. The idea that the Government did not make a major intervention into the standards area, unlike its predecessor, is not sustained by the facts, is it?

Sir Alistair Graham: Yes, and that was a very good thing to extend the terms of reference at the time, and a very substantial report was produced which led to the legislation which set up the Electoral Commission, but it did require, in terms of the loans issue, I think, political parties to follow the spirit of the letter; and, in fact, the report that led to the setting up of the Electoral Commission did make reference to loans and said that only loans where strict commercial terms apply should be outside the legislation. Other loans, which may have more beneficial rates of interest, or where it was a quasi donation, should clearly come within the ambit of disclosure and transparency.

Q184 Mr Burrowes: Does the affair involving the Deputy Prime Minister affect standards in public life?

Sir Alistair Graham: In terms of private behaviour, unless it has an impact on the conduct of a minister in terms of their public office, I do not think it is a standards issue. It is interesting that the public make a distinction between public officials' private lives and their public lives. It is only if the two get intertwined that we get into serious difficulty.

Q185 Mr Burrowes: You do not see it as a concern or a valid criticism that you may comment on such financial impropriety as that involving either David Blunkett or the Tessa Jowell affair, but when impropriety goes beyond a financial one in terms of breaches of trust in relationships that is when standards bodies such as yourselves do not make any comment?

Sir Alistair Graham: We have never looked into individual cases or individual incidents. We try to draw lessons from them to see if there are any changes in the system that are required.

Q186 Mr Burrowes: Indeed, around the time of David Blunkett's concerns and Tessa Jowell's, you have made specific comments on those individuals, as opposed to just looking at the whole ethical framework?

Sir Alistair Graham: My main approach has been to take the opportunity to highlight from those particular incidents failures in the system and how recommendations from the Committee on Standards in Public Life, if they were implemented, would have created less difficulty for the Government in dealing with those particular situations. Sometimes you get asked a straight question, as I think I was on the Today programme: "Has David Blunkett breached the Ministerial Code?" The Cabinet Secretary the evening before had come to the conclusion that he had, I concurred with that view and said so.

Q187 Mr Burrowes: Do you not think that standards in public life, going back to the Prime Minister, is also a concern of the public; that it impacts on integrity, honesty and, indeed, leadership, as an example?

Sir Alistair Graham: There may be issues that come out of that, because a civil servant may be involved, and, in fact, if there have been any breaches of the Civil Service Code, I am sure the Cabinet Secretary will investigate them and deal with them appropriately.

Q188 Mr Burrowes: In terms of your budget, you had a 40 per cent cut, along with others within the Cabinet Office. I understand that the current budget announced also indicates cuts in the Cabinet Office. Do you expect to be further sliced?

Sir Alistair Graham: No, I do not. We did, a couple of years ago, suffer the 40 per cent cut that you have outlined when other cuts were being applied in the Cabinet Office, but in the last two years we have not faced any cuts. We have got the budget that we sought. We do this through negotiation in the Cabinet Office and they have taken a reasonable approach to meeting the needs that we have laid out.

Q189 Mr Burrowes: Is it not fair to say by having that concern over budgets and the possible impact of cuts that does challenge your seeking to be independent? Indeed, you are at the behest of those who are in control of your finances and your ability to deliver a good service.

Sir Alistair Graham: If we were facing cuts year, after year, after year then I think that may be an issue, but I do not think anyone has questioned our independence. I have never had any pressure brought to bear on me as Chairman. The officials we recruit from across the Civil Service, when they are serving and supporting the committee, their loyalty is to the committee. We never have any problem in respect of that at all. I think the most important thing is that we report directly to the Prime Minister. The Prime Minister is held to account as Prime Minister for standards of conduct right across the Government. I report regularly and have discussions with the Cabinet Secretary. I do not think in those 11 years there has been any question mark about the effective independence of the Committee on Standards in Public Life, and long may it continue.

Q190 Mr Burrowes: Would you not be strengthened if there were a more direct link to Parliament and accountability to Parliament?

Sir Alistair Graham: I have made some suggestions before about how Parliament could be more involved, and, on a lot of the ethical standards issues, I have been a strong proponent for Parliamentary debate and have challenged, for example, changes for orders in council that have not been, first of all, submitted to Parliament for debate. I had a bit of a public row about that last year. I do think our role in covering the whole field, including the parliamentary field, right across the whole of the public service, is a valuable arrangement whereby we report directly to the Prime Minister and the Prime Minister is held to account for standards right across the whole piece. That is not to say that we cannot work more closely together, that is not to say there is more scope for Parliamentary debates on standards issues, but I am not convinced of the need for some direct relationship with Parliament, because there are parliamentary issues which we need to have a look at.

Q191 Mr Burrowes: Not least in relation to determining, providing your budget and appointment, but is there not an appropriate role for Parliament which may well assist the functions of your role?

Sir Alistair Graham: I am open-minded about it, but I do not think there is anything fundamentally wrong with the present arrangements, which, I think, work quite well.

Q192 Jenny Willott: Can I ask one further question on that particular issue. Why is it that there is less Parliamentary debate on your reports? Is it because the Government is not making time, or is it because Parliament is not interested?

Sir Alistair Graham: I suspect it is just like in getting a response. These conventions, which have developed over a period of time, have just slipped. Very often there will be either a written statement or a ministerial statement, but you do have to provide arrangements, do you not, in the timetable for Parliament to ensure that these matters are discussed? I think it would be a good convention if we did get a government response in three months. Certainly the Tenth Report covered public appointments and the local government ethical standards, and they were really big issues worthy of a Parliamentary debate. I also think it might be valuable if some mechanism could be found for our annual standards check that we report in our annual report to be also debated in Parliament.

Q193 Jenny Willott: Can I extend looking at the issue of accountability back to the Ministerial Code and deal with that? After an investigation has been done now by an independent person, do you think that the ultimate decision should be made by the Prime Minister, by an independent person or by the House of Commons? One of the problems with the Prime Minister making the decision as it is at the moment is that nobody believes that it is not entirely political. If you had an independent regulator, would that undermine democratic accountability? Who should be the ultimate arbiter?

Sir Alistair Graham: To specifically answer your question, I think the Prime Minister is the guardian of the Ministerial Code of Conduct. He is the head of Government, constitutionally he has to decide the future of any minister in his government, but that is not to say that I am entirely happy with the arrangements that the Prime Minister has introduced in terms of the appointment of Sir John Bourne. We welcomed his appointment as the adviser to ministers on ministerial interest, I would like to see greater clarity about the roles that he is going to play in terms of possible conflicts of interest, and also, is this independent person, Sir John Bourne, going to investigate the facts surrounding allegations of a breach of the Ministerial Code of Conduct? Is his report, which he will present to the Prime Minister, going to be published? If Sir John retires at some point, are the opposition parties going to be consulted about the appointment of a successor, because, though they welcomed it, I do not think they were consulted. Sir John is of such unimpeachable integrity, I do not think anybody would raise any question mark about his suitability, but I do think we need clarification of the role. The statement said he would be available to deal with investigating the facts surrounding allegations of a breach of the Ministerial Code, but it did not cover whether any report that he produces is going to be published, it did not deal with consulting the opposition parties and we do not know: is the Ministerial Code of Conduct going to be amended - it was reviewed immediately after the General Election, but is it going to be further amended - to lay out exactly the procedures operating for dealing with these matters?

Q194 Chairman: Just on the John Bourne point, is there an oddity about having an officer of Parliament appointed by the Prime Minister to investigate? Is there not a confusion of roles?

Sir Alistair Graham: I think it is seen as something entirely separate from those other roles, because he is being paid additional money to carry out his additional role, but I do agree with you that there needs to be greater clarity in terms of how it fits in. It was clearly a decision made under political pressure at the time to try and restore some public confidence in these arrangements. I think there needs to be some clarity. I have written to Sir John myself asking for a meeting to try and clarify some of these points.

Q195 Chairman: Four things happen as a result of political pressure. The Committee on Standards in Public Life was set up as a result of political pressure.

Sir Alistair Graham: That is very true.

Q196 Jenny Willott: Julie asked you about who has responsibility for improving standards in public life. There is evidence that suggests that standards are higher than they were 15 years ago in terms of personal standards amongst public office holders, though that is not reflected in public opinion. Who is responsible for giving the wrong impression about standards in public life?

Sir Alistair Graham: I think it is a mixture of behaviour. It is media treatment and sometimes the media treatment of these, as we well know, is never fair and is sensationalist, so the media have to take some responsibility, but I think it is too easy always to blame the media if you get an adverse public perception. In the end, I think it is the range of incidents that happen, it is the behaviour that people can see in terms of senior public officials, that will influence public opinion, but we have to be careful we do not beat ourselves too much about this, for the reasons I gave earlier on, that from the survey that we have done (and we are repeating it every two years and we shall publish the results of the second survey in a few months' time, though I would be very surprised if public perception has moved in a very positive way in the intervening two-year period), there are some signs that the public do recognise that we have some good arrangements in place. For example, the public fear that cronyism is still rife in public appointments. Given the changes in the system that have been made, it is still a depressing finding.

Q197 Jenny Willott: Do you think the fact that a number of different ethical regulators produce reports on a fairly regular basis highlighting the problems and highlighting negative points has an impact on public opinion?

Sir Alistair Graham: Yes, if they are seen to be effective. When we looked at the Public Appointments Regime, and you yourself did a fairly major report on this I think two or three years ago, we were anxious to strengthen the powers of the Public Appointments Commissioner. We were attracted by the arrangement the Scottish Parliament has whereby the Public Appointments Commissioner for Scotland can recommend a delay until Parliament has had an opportunity to look at the report setting out a potential breach in the code of practice which relates to public appointments. I think we could make some changes to the operation, particularly in the public appointments area, that would strengthen the effectiveness of those regulators and I think would be a disincentive to getting breaches of the code of practice as far as public appointments are concerned.

Q198 Jenny Willott: One final question. If standards are actually improving amongst office holders, does it matter what the public think?

Sir Alistair Graham: Yes, of course it matters. It certainly matters what the public think because I think a lack of trust, a lack of confidence, leads to cynicism which leads to disengagement. One of the issues in our current inquiry on the Electoral Commission that I am going to be interested in is how the Electoral Commission is getting to grips with voter registration, which I think is a very central issue to our democratic system: because I think the facts show at the moment that the numbers of people who are participating who are on the electoral role is going down, particularly in inner city areas, which means, therefore, that people are not going to be participating in our democratic system, and we have to get to grips with this. Disengagement in the political system is very damaging for the whole quality of our society, so I think it is a very important issue.

Q199 David Heyes: I want to remind you of the comment you made earlier about being disappointed that the Prime Minister had not made standards a high priority and to contrast that with your opening comments, where you established a legitimacy through the fact that you report directly to the Prime Minister - I think that is what you said - and your role was to provide standards advice to the PM. The obvious question from that is has he asked to see you recently?

Sir Alistair Graham: No, he has not asked to see me recently. I have written to him on a number of occasions. For example, we have a political nominee from each of the political parties. We currently do not have one from the Labour Party and, given we are starting this inquiry on the Electoral Commission in which the Labour Party has got a major interest, I have tried through the normal offices to ensure that we have a nominee, but, unfortunately, that has not worked because we are also waiting for a reshuffle, a reshuffle that never seems to happen; so I have written directly to the Prime Minister to ask him to take urgent action.

Q200 David Heyes: When did you last meet him on the basis of the committee?

Sir Alistair Graham: I have not met him. That is not how the system has worked traditionally. The system has worked traditionally through having regular meetings with the Cabinet Secretary who reports to the Prime Minister, and I have at least quarterly meetings with the Cabinet Secretary to talk through the business of the committee, to raise issues of common concern between us, and the Cabinet Secretary reports regularly to the Prime Minister on these matters.

Q201 David Heyes: That is a tenuous way of reporting directly to the Prime Minister, is it not? If other reports that we hear are to be believed, and I cannot speak for the current Cabinet Secretary, but previous Cabinet Secretaries have not had that much of a hotline to the Prime Minister and yet it would be difficult to imagine, given the enormously busy agenda that they must have in their meetings, that your business would figure higher than that. It is a very tenuous link, is not it?

Sir Alistair Graham: I have to say that my own direct experience has been that these issues are raised, and, as far as I am aware, the current Cabinet Secretary, Gus O'Donnell, does have regular weekly meetings with the Prime Minister in which there is ample opportunity to raise issues with him, but that is not to say that I would not welcome a meeting with the Prime Minister on the standards issue. I do take the opportunity to go and see other Cabinet ministers, and I have had a whole series of meetings with Cabinet ministers on the work of the Committee on Standards in Public Life. For example, we went through a consultation period after the General Election about the future work programme in which I had meetings with a range of Cabinet ministers - the Secretary of State for Constitutional Affairs, the Home Secretary, who was the Education Secretary at the time, I have got a meeting with the Chancellor of the Exchequer shortly - so there is a regular flow in to senior members of the Government.

Q202 David Heyes: But you have been working with the 40 per cent budget cut that you have referred to earlier for some time now, and you have not had the opportunity of raising that directly with the Prime Minister. Presumably it is a matter that you raised in your conversations with the Cabinet Secretary. It seems quite surprising to me that you could operate with that level of deficiency in staffing. This may be an opportunity for Richard to come in here. He is presumably the guy who has to carry this organisation that is 40 per cent under-staffed. It would be interesting to know where the original staffing establishment derived from and what are the consequences of continuing for a long period with considerably less than that?

Mr Jarvis: I think it has been described as a budget cut. The reduction came as a result of the Cabinet Office's Quinquennial Review of the committee in 2000, and it was agreed with the then Chairman, Sir Nigel Wickes, that the secretariat would come down to a smaller core of permanent staff and it would be better to deal with the peaks and troughs of the committee's work; but the agreement at the time was, should the committee need more resources, because of a particularly difficult inquiry or, for example, if it took more than one inquiry at once, then resources would be made available.

Q203 David Heyes: Has that happened in practice?

Mr Jarvis: That has not. We have not had a situation where the Chair has felt that we have needed more.

Q204 David Heyes: There have been no peaks and troughs in your work. That is hard to imagine?

Mr Jarvis: When we are doing an inquiry we have used resources from elsewhere. For instance, the Cabinet Office has provided a member of staff for three months who is an expert in electoral matters to work with the committee for its current inquiry. On the previous inquiry we had an intern from the University of Nottingham, so we have managed the peaks through university sustention.

Q205 David Heyes: Does this system to beg, steal or borrow staff, or whatever you might need, not compromise the thing you are very proud to state: your independence? You have got to go to the Cabinet Secretary to borrow staff to carry out whatever this week's crisis is?

Sir Alistair Graham: We have never been refused resources that were required. For example, we have extended the work of the committee into this research work and we are doing it every two years now. This year we have extended that to cover Scotland and Northern Ireland with extra money from those devolved governments so that we can disaggregate the results for Scotland and Northern Ireland to see if there is a different approach amongst the public to standards issues there. As part of the Tenth Inquiry we did some survey work into the attitude of candidates for public appointments to see if they felt that the procedures were disproportionate and heavyweight. We have been able, within the resources available, to extend the work of the committee; so I do not think resources is a critical issue, but you never know with public funding.

Q206 David Heyes: Let us give you an example of why you might be suspicious that resources could be a problem for you. The notorious Standards Board for England is a desperately incompetent outfit. You have damned it with your own words this morning, and I would agree with what you said. Could it be that your shortage of resources and shortage of staffing was the reason why it took five years for you to conclude that something radical needed to be done about it? They operated in an incompetent manner for five years, and it was within months of them starting that it became a matter of public debate and public concern that they were not doing the job that they were set up to do and they were doing it in a very satisfactory manner. The response from you was to allow that to run for five years. Is that connected with the fact that you are under-resourced?

Sir Alistair Graham: I do not think so. If we did not move in more quickly to consider it - we have to take direct responsibility - that is a failure on our part, not a failure of the resources available. I think the important thing is that when we did get to grips with it we made some radical recommendations which the Government has accepted.

Q207 Chairman: You mentioned the Quinquennial Review in 2000, what the Quinquennial Review 2000 said was: "Two things are now clear: the task is substantially completed and the ethical framework has been changed significantly." Is not that the context in which possibly a review of resourcing took place? The nature of the enterprise was seen to have been different.

Mr Jarvis: I think that the review, if I recall, went on to say, "But there is a continuing need for the committee to act as an ethical workshop to review and consider ethical issues". As I have said, in my time with the committee, under both Sir Nigel Wickes and Sir Alistair, there has not been an occasion where we have been refused resources that we have asked for.

Sir Alistair Graham: I have always taken the view that sometimes a small, tight ship can be more effective than an organisation of greater resource. I think we should take some pride that we can be effective with a budget around about half a million. If, in fact, resources ever became a serious constraint on our ability to do our job, I would shout long and hard about it.

Q208 Mr Prentice: You told us at the very beginning that your committee scans the horizon; so what is the next bombshell that is going to hit us?

Sir Alistair Graham: Have we not got enough bombshells to be dealing with at the moment without anticipating any more? Can the Government cope with any more bombshells?

Q209 Mr Prentice: Was it not possible to foresee the kind of controversy that we have between loans and donations at the time of your Fifth Report, with your horizon scanning?

Sir Alistair Graham: In fact, the report did say that only loans on a proper commercial basis, paying proper commercial rates, should be outside of the regime for reporting to the nation. I do not think they were well cited. Of course, they looked at the issue of public funding, state funding for political parties, which, of course, as we know, already exists but in a more sort of major way, and they felt the argument was very finely balanced but were of the view that the public were not ready for state funding of political parties on a larger scale than already exists. I am not sure there is a great deal of evidence that public attitudes have changed much.

Q210 Mr Prentice: Did you have any inkling that political parties were raising millions and millions of pounds through these loans on a commercial basis, and did you turn your mind to this whole question of what exactly constitutes a loan on a commercial basis?

Sir Alistair Graham: I was not aware. It is one of the issues, I think, we would want to explore because I think this was an issue directly for the Electoral Commission. Our first evidence-gathering session will be taking evidence from the Chairman and officials of the Electoral Commission, and we will want to explore how well cited everybody was on this issue of loans. I suspect people were not very well cited. I certainly was not aware and had not picked up through any sort of intelligence or anecdote that there was a scale of borrowing as currently came out.

Q211 Mr Prentice: You were not alone. The Treasurer of the Labour Party did not know either.

Sir Alistair Graham: Yes.

Q212 Mr Prentice: Why have you not announced an inquiry into political honours?

Sir Alistair Graham: Of course, there was a review that was carried out by Hayden Phillips. There have been one or two areas. In fact, we offered to carry out an inquiry into the Business Appointments Rules, we offered to carry out an inquiry into the loans for peerages issue to the Cabinet Office and that had not been taken up. Of course, we have freedom. It is part of the convention that we consult about what we do. We can set up any inquiries and we went through a consultation process, for the first time, on a face-to-face basis with key stakeholders after the General Election and the unanimous view really was that a review of the work of the Electoral Commission would be very timely, and that is what we gave priority to. We do not have the capacity to suddenly say, "We will have another inquiry on top of that." We do have to take time, and I think that is part of the way we work to prepare for that.

Q213 Mr Prentice: When did you make this offer to do a review on loans for peerages, the offer that went to the Cabinet Office?

Mr Jarvis: I think the previous Chair, Nigel Wickes, made an offer to look into honours during his time, but I think the response was that the Government was having its own look and I think Hayden Phillips did that.

Q214 Mr Prentice: The Prime Minister said he would bring in Hayden Phillips, saying to the Committee on Standards in Public Life, "Thank you for your offer, but, no."

Sir Alistair Graham: Of course, that is one of the things I think we all have to be careful about in this business, that sometimes governments will ask people to carry out inquiries that they think will produce the answer that they want to have.

Q215 Mr Prentice: Yes. It is an incredible state of affairs. There you are, sitting at the apex of the pyramid, and you make this offer and it is just turned down by the Cabinet Office. And it is all done in a very ad hoc way, bringing in a distinguished civil servant - a former civil servant, we know - but just plucking him out of nowhere: "He's the man who is going to find the answers."

Sir Alistair Graham: I think you can say the same point about Patrick Brown in relation to Business Appointment Rules. We are rather critical of the conclusions that Sir Patrick has made.

Q216 Mr Prentice: Yes. Are you as surprised and as shocked and as staggered as most people are that the police are investigating this whole "cash for honours" business?

Sir Alistair Graham: Indeed. The possibility that we are into criminal offences relating to corruption would be very damning. Already the way the issue has developed has been very damaging to trust in government and senior officials, so the fact that the police are in the middle of an investigation to see whether there have been any criminal offences is very worrying and very damaging.

Q217 Mr Prentice: You have obviously looked at these matters in great detail. Do you think the Honours (Prevention of Abuses) Act 1925 should be reviewed or amended in any way? It is an old piece of legislation. There has only been one successful prosecution, in 1933. Does it need amending?

Sir Alistair Graham: I suspect out of all of this that there are going to be some important lessons. Of course, a number of select committees are looking and inquiring. As part of the work of the Electoral Commission, I would be very surprised if the Committee does not want to look into some of these areas.

Q218 Mr Prentice: Does it surprise you that the Prime Minister very, very recently - a matter of days - has said that he sees no need - and I think I am quoting him correctly - for a review of that legislation. Does that disappoint you?

Sir Alistair Graham: I am disappointed if a situation comes to be perceived by the public at large that you can buy your way into the legislature of this country. I think that is a very damaging matter.

Q219 Mr Prentice: Are honours for sale? I have put this question to a number of very distinguished people who have come before the Committee as part of our inquiry: the former Defence Secretary Tom King, celebrated columnist Simon Jenkins, and they have told us on the record, publicly, that they believe honours are for sale. Do you believe honours are for sale?

Sir Alistair Graham: I shall be rather surprised, even if a police investigation takes place, if evidence comes out of a direct linkage - of a political donation or a contribution to an academy or whatever and a direct link.

Q220 Mr Prentice: Why is that? Is that because under the law the bribery affects both parties: the person who offered the inducement and the person who received the benefit, and they are both equally guilty. Is that the problem?

Sir Alistair Graham: I do not know what the problem is in evidence terms. I am just saying that I would be surprised if there is evidence which shows a direct link between those two things. But public perception is extremely damaging and there are undoubtedly going to be issues arising out of this that need to be addressed. I would be very surprised if they do not come up in our inquiry in relation to the Electoral Commission.

Q221 Mr Prentice: Did it shock you - and that is the second time I have asked you if it shocked you - because we are all shocked.

Sir Alistair Graham: I am not easily shockable.

Q222 Mr Prentice: I am. That is the difference between us. Were you shocked when you read the piece in the Observer which quoted a senior Downing Street source - not subsequently contradicted by Number 10 or withdrawn by Number 10 or clarified by Number 10, so we assume or I assume that it is the position - "No 10 admits link between school donors and peerages" and the strap line reads: "Blair wanted greater political support in House of Lords for his controversial education policy." Then it quotes this unnamed senior Downing Street source saying: "What we wanted was people with expertise in [city] academies as working peers, taking the Labour whip, who could actively contribute with a massive amount of knowledge to the debate on education in the House of Lords." Do you think it is proper that people should be elevated to the House of Lords in these circumstances, so that they can advance the policy objective of the government of the day that maybe not everyone is signed up to?

Sir Alistair Graham: No, I do not.

Q223 Mr Prentice: This is the academy programme of getting private sector involvement in state education.

Sir Alistair Graham: No, I do not, because the reality means that access to the House of Lords is primarily only open to a narrow clique of people.

Q224 Mr Prentice: So you would condemn this.

Sir Alistair Graham: I would indeed condemn that if that is the truth of the situation, and I think it gets to the heart of the issue, which is a current political issue, of reforming the House of Lords so that you cannot have such a situation in the future.

Q225 Mr Prentice: If people are going to be elevated to the House of Lords, then it should be because they have contributed in some way to a wide public benefit and they are not just subscribing to the Government of the day. That is what you are saying.

Sir Alistair Graham: Of course, we have always had people who have been put forward on a political support basis. That is one of the current arrangements and one of the patronages, that the Prime Minister has to recommend to the Queen people who will be working peers.

Q226 Mr Prentice: Yes, but this is explicit. If we had a change of government and a Conservative Government - and I know this is not their policy at the moment, but who knows - said that they want to encourage grammar schools and they want to encourage endowments, wealthy people to endow grammar schools, and to say as explicitly as this has been said about city academies: "Honours are there for people who support and advance the Government's policy of the day, which is to expand the number of grammar schools".

Sir Alistair Graham: I think it is quite wrong and very demeaning if such arrangements are in place, but I think the answer to it is in the hands of Members of Parliament to reform, to get agreement about the reform of the House of Lords.

Q227 Mr Prentice: Since I have put it on the public record, you would expect Number 10 to repudiate this or clarify it. You would, would you not?

Sir Alistair Graham: I would.

Mr Prentice: Thank you for that.

Q228 Chairman: Why are you more shocked by this than what happens all the time, which is people putting party hacks in the House of Lords? Prime Ministers' parties can put whoever they want in the House of Lords.

Sir Alistair Graham: Yes, but that was a conscious, transparent arrangement, where people put in working peers to support the government of the day, and of course the opposition, in pursuing their political objectives. It was apparent, it was transparent. It is part of the patronage of the Prime Minister. I am not defending that; it is just a fact of life. It is slightly different when you get one particular government programme, in this case education, where a small group of people - because they are a relatively small group of people - have the money to make a contribution to an academy and therefore make a position in the House of Lords as a result of that.

Q229 Mr Prentice: Is it so unique? You just need to sit back and reflect for a few minutes. Let us take another policy objective of the Government, to bring in the private sector to the National Health Service. Fifteen per cent - that is the cap that was set by the former health secretary - 15 per cent of services delivered by the private sector. It does not take a big leap of imagination to imagine people being involved in health being ennobled in this way because they are supporting the Government's policy objective, does it? It is corrupt, is it not?

Sir Alistair Graham: Yes.

Q230 Mr Prentice: It is corrupt.

Sir Alistair Graham: Yes.

Q231 Mr Prentice: Can I finish on the regulatory landscape, I suppose. I have just a few questions. Does your remit extend to the devolved institutions? You talked about your research programme taking in Scotland and, I think, Northern Ireland, but what about the devolved institutions?

Sir Alistair Graham: We are UK-wide. Of course, when we were appointed, we were given a remit in terms of the whole of the United Kingdom but since then we have had the creation of devolved governments. Of course we do not have one in Northern Ireland at the moment but we do in Scotland and we do in Wales. Whenever we hold an inquiry, we hold hearings in Belfast, Edinburgh and Cardiff. We have had discussions with the Presiding Officer, for example, in Scotland, with the head of the Civil Service in Scotland, to see if there are areas where they would like us to do some work, and we are still in discussion, for example, because there are issues relating to the Ministerial Code of Conduct in Scotland, that some people would like us to do some work on.

Q232 Mr Prentice: Are you tip-toeing around this? Devolution was seven years ago. It was seven years ago. Is it not about time that you really clarified your position vis-à-vis the devolved institutions?

Sir Alistair Graham: We are in no doubt, as I say, that we are UK-wide. We have drawn upon the experience of Scotland, for example, in the arrangements I have already touched upon for the Public Appointments Commissioner. We specifically drew upon the experience of Scotland because we thought they had a superior arrangement to what we had in England. We are just being sensitive to the fact that we have got devolved governments there, making sure we have the full range of discussions before we start any specific work.

Mr Prentice: Okay. I will leave it there.

Q233 Chairman: We have just come back from Scotland and we did undertake to ask you this. I thought Gordon was going to, but he did not quite get there. There is quite a debate raging in Scotland at the moment about the position of these parliamentary commissioners, these ethical watchdogs who in Scotland are creatures of the Parliament. There is now an attempt, in a sense, to haul them in and there are issues about their independence in relation to their accountability. We heard suggestions that they needed more political control and direction, and we heard disquiet about this, not least from ethical regulators themselves. It was put to us, as there is not a Committee on Standards in Public Life in Scotland but your remit was a UK-wide remit, that this was there and that you could legitimately look at it as it raised quite important public life issues. Could you clarify that that is something that you might look at?

Sir Alistair Graham: Definitely. We have had, as I say, some discussions and we have picked up some of the issues you have raised. We have discussed it with the Cabinet Secretary, about the possibility of looking at some of the governance arrangements in the devolved administrations as something that our Committee would like to take on board. Perhaps it being raised here will add a bit of sharpness to us proceeding on that.

Chairman: Thank you for that.

Q234 Paul Flynn: You have a concern about the influence of outside bodies (lobbyists, commercial bodies, pharmaceutical companies and so on) on Parliament through their influence on all-party parliamentary groups. I think it arises, out of this report, from the Health Committee, the influence of the pharmaceutical industry and a recent article in The Sunday Times. Could you describe the concern?

Sir Alistair Graham: The concern has been that there are rules relating to all-party groups and I think it was the Times that did some investigative work that those rules were not being very strongly adhered to. I am in favour of all-party groups. Of course, they have burgeoned in recent years. There is a very large number of them and they have become a possible vehicle whereby specific interest groups outside can get reports which give the impression that they have all-party support via these all-party groups. In some cases the reports are actually written by a lobbyist or a lobby group or some trade association, and that seems to me to undermine the authority of Parliament in some way. We were very anxious to get greater transparency on this. We have had some contact with the Parliamentary Commissioner for Standards and he was happy to do some further work in this area.

Q235 Paul Flynn: As I mentioned, this was raised nearly two years ago now by the Health Committee. If you are a pharmaceutical company, say, called Drug Pushers plc, and you have a drug that is reasonably expensive, has a very questionable record, has dangerous side effects and has not been approved by NICE, the way to promote it is via the people who we used to call lobbyists and who are calling themselves something else now, and a report will come out, and, as you have rightly said, when that report comes out and is presented in the press as the work of an all-party group of MPs it carries some authority.

Sir Alistair Graham: Yes.

Q236 Paul Flynn: The rules of the House are such that possibly the majority of all-party groups have their secretarial services provided by outside bodies. You suggest that the rules have not been implemented but there is some criticism that the rules themselves allow undue influence from outside bodies.

Sir Alistair Graham: I have written to Sir George Young on this matter because I think it is very important, if a report is produced by an all-party group and the report has been written by, say, an outside lobbyist or by some industry association or something, that that should be explicitly explained on the front of the report, so everybody knows where the help is given to have produced that particular report. If I remember rightly, we had a positive reply from Sir George on that matter.

Q237 Paul Flynn: There is no group now calling themselves lobbyists, and there are no people stuffing fivers in envelopes and giving them directly to MPs any more as far as we know. The nature of the beast has changed. This is one area they have gone to use their influence on parliamentary decisions. Are there other areas you are concerned about in the development of people using Parliament in this way?

Sir Alistair Graham: I think that was the main area of concern that we had.

Q238 Paul Flynn: Do you think that your judgment on the question of honours would be compromised in any way by the fact that you have accepted one yourself?

Sir Alistair Graham: I sincerely hope not.

Q239 Paul Flynn: I am curious about the perception of honours as seen outside. Because of the publicity that has come recently, do you think there is a danger that the role that honours might play, by saying these are examples of people with a distinguished career in public life and so on, might be tarnished to such an extent that it might well be more prestigious to refuse an honour rather than to accept one?

Sir Alistair Graham: That would be a depressing situation for any honours system in any country if people felt there was more honour in refusing an honour than accepting it. I sincerely hope we never get to that situation in this country. As I say, nobody has every questioned my independence on a whole range of matters. I take a pretty robust view to a number of the issues with which we have had to deal and I sincerely hope that people will judge me on the approach I have taken on a whole range of issues.

Paul Flynn: I am grateful to you.

Q240 Chairman: The Committee does not always get it right, does it?

Sir Alistair Graham: No, of course not, which is why we have arrangements. We are a standing committee, we can go back over territory and see if we got it right. Or if we did not get it right or there is new evidence available or it is clearly wrong, we can put it right.

Q241 Chairman: If Parliament or Government dissented from your recommendations, it is conceivable that Parliament and Government could be right.

Sir Alistair Graham: Absolutely. Absolutely. That is part of the reason why, for example, the recommendations were not accepted in terms of the Ministerial Code of Conduct. By raising them as incidents arise, you do subject the recommendations to public debate and public consideration. I think that is the approach we should continue to take. We should not get out of our pram just because a recommendation has not been accepted. For example, in relation to a Civil Service Act, your recommendation has not been accepted, our recommendation has not been accepted. I still passionately believe that it would be right to introduce a Civil Service Act in this country.

Q242 Chairman: On reflection - and you are looking at this again now - where the Committee got it fundamentally wrong was its big report on party funding, where it said there should not be a cap on individual donations. That has been a source of much of our difficulties on the party funding and honours side. Is it not clear now that we need to move to a system where there is a cap on individual donations?

Sir Alistair Graham: I really would not want to comment on that when we are just about to start taking evidence in relation to some of these matters. The whole issue, if you put a cap on it, is then does it mean that you have to take a different approach towards state funding of political parties? I think you would have to take a very balanced approach to these matters.

Q243 Chairman: Yes, but you have been pretty frank with us this morning. You know, do you not, that having a situation where people can give millions of pounds to a party, with the consequences that we know come from that, is one which is not tolerable? The Committee argued that transparency was enough; that as long as people knew that they had given millions of pounds, it would be all right. That is not the case, is it?

Sir Alistair Graham: It raises some interesting questions.

Q244 Chairman: Largely because of the Committee's work, we now have a very different system of ethical regulation in this country. We have bodies that did not exist before. Do you think in general terms that what we have now is all right? Do you think we have the right number of bodies doing the right things? Do you think there is duplication? Do you think there is some scope for rationalisation? Is it time to look at what we have created and see if we could put it into a more coherent shape?

Sir Alistair Graham: We always have to keep a fresh look at these things. There always is the danger of over-regulation or disproportionate regulation, which is why, when we looked at public appointments, for example, we suggested that we should get a closer alignment between the approach on public appointments and the approach on civil service appointments, which, over a period of time, we thought could lead to a common set of commissioners dealing with civil service appointments and dealing with public appointments. The Government did not accept our recommendations, just as they did not accept your recommendations in relation to public appointments. We are constantly looking at this issue of proportionality: Is the existing framework working well and sensible? The fact that we made radical changes, radical recommendations in relation to the local government standards where something clearly was not working, and the Government have accepted our recommendations, I think is a positive sign. I think all of us, including yourselves, have to keep looking at the territory to see if there is skill to getting it more effective, more proportionate to the outcome that we are trying to achieve. I do not think at the moment there is massive duplication in the ethical area. I think ourselves looking right across the piece, not as a regulator but giving policy advice, is a very effective arrangement. You do have the Public Appointments Regulator and there is the Civil Service Commissioner and we would have liked to have brought their regimes closer together, so that eventually you have a common set of Commissioners, but we were unsuccessful in that, and they do different jobs now and therefore I think it is right to have different regulators.

Q245 Kelvin Hopkins: I have not been able to be here for most of the meeting, but there is one point raised by Peter Riddell, one of your Committee members who submitted a brief memorandum. He highlighted a concern that: "Officials working for ethical watchdogs should not have to worry that what the Cabinet Office thinks of their activities may affect their future careers." One could spread that wider and say that public officials right down the management chain, to the local level almost, might be fearful of saying what needs to be said because of how it might affect their future careers. Is that not something that you could be concerned about and could look into?

Sir Alistair Graham: That is why I think a Civil Service Act would set a certain tone about these matters, because you would embody the values of impartiality and integrity in legislation, plus the fact that some of the arrangements that we have at the moment, which are covered by Order in Council, would become subject to parliamentary scrutiny; for example, as far as special advisors are concerned. But I believe we still have a strong public service ethos in this country that constantly needs reinforcing. We are having a fresh look, for example, at the seven principles in public life to see if the language we are using there is clear enough to deal with current situations. So we always have to be willing to take a fresh look at these matters. I do not believe that is an issue at the moment, but we constantly need to be watching to ensure that we have the best arrangements in place. But one of the most significant things, I think, by this Government which would show a change from past behaviour would be the introduction of a Civil Service Act.

Q246 Chairman: There is no question, is there, that public life is dramatically cleaner now, at the beginning of the 21st century than it was at the beginning of the 20th century?

Sir Alistair Graham: Yes.

Q247 Chairman: And those people who look back to a golden age of higher public standards are massively wrong.

Sir Alistair Graham: I think so, particularly the emphasis on the principle of merit in terms of public appointments, with some of the arrangements we have in place. And the fact that, where things go wrong, they are likely to get a strong focus and national attention, and our media do a good job in that respect. But we must never be complacent. I still think the point that I talked about of worry about public perception, about cronyism is rife in terms of public appointments, and the lack of trust in government ministers and senior public officials is still a very worrying matter to which all of us have to give attention, as to how we can narrow that damaging perception.

Q248 Chairman: It could be that the great British public quite likes to believe that their political class is sleazy and it is quite likely that the great British press likes to foster the belief that the political class is sleazy. Compared with that, the chances of ethical regulators like you or even ethical supervisors like you doing anything about it is pretty remote, is it not?

Sir Alistair Graham: It cannot have been an aim of this Government when it came into office in 1997 that it would get public opinion polls - in the last couple of weeks, by YouGov or something - that 63 per cent think they are as sleazy as the previous Conservative Government, can it? That cannot have been an objective of the Government to have reached that situation, can it?

Q249 Chairman: It was certainly the objective of sections of the political class and of the media to produce that outcome. In that sense, with a bit of horizon scanning, one could have entirely predicted that as the thing that would happen. Anyway, that takes us into territory that is larger and longer than we have now. We have had a very interesting session and we are very grateful to you for coming along and giving us evidence. Thank you very much indeed.

Sir Alistair Graham: Thank you very much.