Select Committee on Standards and Privileges Thirteenth Report


Appendix 1: Memorandum from the Parliamentary Commissioner for Standards


Complaint against Mr John Prescott

The Background

1. On Saturday and Sunday, 1 and 2 July 2006, several newspapers carried stories to the effect that the Deputy Prime Minister, Rt Hon John Prescott (the Member for Kingston upon Hull East) was facing questions about hospitality he had received in July 2005 at the Colorado ranch of Mr Philip Anschutz. Mr Anschutz is the owner of Anschutz Entertainment Group (AEG) which is part of a consortium which, with English Partnerships, took over in 2004 responsibility for the redevelopment of the northern Greenwich peninsula, including the Millenium Dome. AEG, it was said, was lobbying the Government to allow the establishment of a super-casino in the Dome as part of redevelopment plans for the area. Mr Hugo Swire (Member for East Devon), the Shadow Secretary for Culture, Media and Sport, was reported as saying that acceptance of the hospitality raised the possibility of a conflict of interest in relation to Mr Prescott's ministerial responsibilities and was an error of judgement. A number of newspapers noted that Mr Prescott had not registered his stay at the ranch in the Register of Members' Interests.

2. The press also reported that Mr Prescott had denied that there had been any conflict of interest. A statement he issued said:

"It is not true to suggest that I had any involvement whatsoever in the sale of the Dome.

"I played no role with any planning decision relating to the Dome, or in any negotiations for the sale of the Dome.

"My contact with Philip Anschutz relates solely to the use of the Dome, post-sale, in terms of regeneration of the area, and Mr Anschutz's interest in William Wilberforce, former Hull MP and abolitionist, about whom Mr Anschutz is making a film, as I am personally involved in the 2007 Abolition Bicentenary."

Mr Prescott, who had been accompanied by officials during the stay, was reported to have made a donation to charity in lieu of the cost which would otherwise have fallen on his department for the overnight accommodation of his party. Mr Prescott subsequently made clear to me that the donation had in fact been made by his department.

3. The "Independent on Sunday" reported a spokesperson for Mr Prescott as saying that "the stay had not been registered because it had taken place during a departmental trip and there had been no benefit to the department. However, she also said that there was no conflict of interest because Mr Prescott had stayed during 'a day off'." Other papers also quoted a spokesperson for Mr Prescott as describing the stay as a 'day off', although Mr Prescott subsequently told me that he [Mr Prescott] had not used this expression.

The Complaint

4. Further press coverage of the story on 3 and 4 July referred to the likelihood of a complaint being made to me by Mr Swire in relation to Mr Prescott's alleged failure to register the hospitality he had received in the Register of Members' Interests. On the morning of 4 July, following an inquiry by my office, I received by fax a letter from Mr Swire, the text of which is reproduced at WE1.

5. Mr Swire referred to the recent press reports, continuing:

"A number of allegations have been made concerning the nature of the trip, and in particular whether it should have been registered as stipulated by the Ministerial Code.

"Paragraph 5.24 of the Ministerial Code states that 'no Minister or public servant should accept gifts, hospitality or services from anyone which would, or might appear to, place him or her under an obligation.'

"Clearly given the nature of Mr Prescott's role in relation to the awarding of the casino licenses, the fact that this meeting should take place raises a number of questions.

"In addition, the admission that the hospitality was not registered, and that the subsequent donation to a charity appears to have been made by a Government Department appears to raise further questions."

Mr Swire concluded:

"I would therefore be grateful if you could examine the circumstances surrounding the visit and the subsequent registering of the gift as a matter of urgency."

6. It was immediately apparent that Mr Swire's letter raised questions in relation to Mr Prescott's obligations under both the Parliamentary Code of Conduct and associated Rules on the registration and declaration of interests, and the Ministerial Code. In order to be able to establish precisely what matters properly fell within my responsibilities under Standing Order No. 150, and whether there was a case to answer, I needed to make preliminary inquiries of Mr Prescott and his Department to establish the facts surrounding Mr Prescott's stay at Mr Anschutz's ranch. I therefore replied to Mr Swire on the afternoon of 4 July saying that I would be making such inquiries, and pointing out that the matters concerning the interpretation and application of the Ministerial Code to which he had referred in his letter to me were the responsibility of the Prime Minister, advised by the Secretary to the Cabinet. I advised Mr Prescott's office and the Cabinet Office of Mr Swire's complaint and my response. The text of my reply to Mr Swire is at WE2.

7. On Sunday 9 July, further reports appeared in the press alleging that, while staying at Mr Anschutz's ranch, Mr Prescott had received gifts of a pair of tooled leather boots, a Stetson hat and a belt bearing his initials on its silver buckle. On Monday, 10 July, I received a further letter from Mr Swire asking whether, in the inquiries which, as I later describe, I had by then begun, I was "taking into account any other undeclared gifts or undeclared hospitality on this or other occasions" enjoyed by Mr Prescott. The text of this second letter from Mr Swire is at WE3.

8. In reply I told Mr Swire that I had asked Mr Prescott some questions designed to enable me to assess whether or not, if Mr Prescott had indeed received gifts during his stay, these were recordable in the Register of Members' Interests. I was not, however, looking into any matters concerning Mr Prescott other than those linked to his stay at Mr Anschutz's ranch. If Mr Swire was aware of evidence about other matters, in addition to those he had already raised with me, involving the conduct of Mr Prescott in relation to the Parliamentary Code and Rules, he should let me have it immediately. The text of my reply to this second letter from Mr Swire is at WE4.

Jurisdiction and the Scope of My Inquiries

9. Paragraph 7 of the introduction to the Guide to the Rules says:

"Ministers of the Crown who are Members of the House of Commons are subject to the rules of registration and declaration in the same way as all other Members (although Ministerial office is not registrable and the restrictions imposed by the ban on lobbying for reward or consideration do not apply to Ministers when acting in the House as Ministers). In addition, Ministers are subject to further guidelines and requirements laid down by successive Prime Ministers in order to ensure that no conflict arises, or appears to arise, between their private interests and their public duties ("The Ministerial Code"). These requirements are not enforced by the House of Commons and so are beyond the scope of this Guide."

10. My locus in relation to the issues Mr Swire raised therefore lies in respect of Mr Prescott's obligations as a Member under the Code of Conduct and the Guide to the Rules relating to the Conduct of Members approved by the House.[10] These obligations focus in this instance on the question of whether Mr Prescott was obliged to record in the Register of Members' Interests the hospitality he enjoyed at Mr Anschutz's ranch and any gifts he received during his stay there. The other matters raised by Mr Swire—for example, as to whether it was wise for Mr Prescott and his party to accept the hospitality and whether there was any potential conflict of interest as a Minister of the Crown in him doing so—are matters for the Prime Minister, advised by the Cabinet Secretary.

11. It follows that the scope of my inquiries has been limited purely to the registration and receipt of gifts issues. Because of the limitations on my jurisdiction, I have not—contrary to the impression given by some subsequent reports in the media—been empowered to conduct an extensive inquiry into Mr Prescott's relationship and dealings with Mr Anschutz. Rather my inquiries have been limited to establishing the facts necessary to answer the question posed by Mr Swire as to whether Mr Prescott should have registered his stay at Mr Anschutz's ranch in the Register of Members' Interests and his subsequent question as to whether any gifts Mr Prescott received there were recordable in the Register of Members' Interests.

Relevant Provisions of the Code of Conduct and the Guide to the Rules, and Related Matters.

12. Paragraph 16 of the Code of Conduct approved by the House on 13 July 2005 states:[11]

"Members shall fulfil conscientiously the requirements of the House in respect of the registration of interests in the Register of Members' Interests and shall always draw attention to any relevant interest in any proceeding of the House or its Committees, or in any communications with Ministers, Government Departments or Executive Agencies."

13. Paragraph 9 of the Guide to the Rules relating to the Conduct of Members describes the purpose of the Register of Members' Interests as being:

"To provide information of any pecuniary interest or other material benefit which a Member receives which might reasonably be thought by others to influence his or her actions, speeches or votes in Parliament, or actions taken in his or her capacity as a Member of Parliament."

14. Under Category 6 of the Rules on registering interests, a Member is required to register "Overseas visits made by the Member or the Member's spouse or partner relating to or in any way arising out of membership of the House where the cost of the visit was not wholly borne by the Member or by United Kingdom public funds." As Mr Prescott's visit to the United States was on Government business and the costs arising were met by the Government, there is no issue of registration in relation to this category.

15. Category 7 requires Members to register:

"Any gift to the Member or the Member's spouse or partner, or any material advantage, of a value greater than 1 percent of the current parliamentary salary from or on behalf of any company, organisation or person overseas which in any way relates to Membership of the House."

The threshold for registration—1% of the current parliamentary salary—was £590 on 22-24 July 2005, the dates of Mr Prescott's stay at Mr Anschutz's ranch. If there were to be an obligation on Mr Prescott to register the stay and any gifts he received during it, it would arise under this category.

16. In assessing whether there was such an obligation, it is also relevant to have regard to the general practice in relation to the registration of hospitality received by Members who are Government Ministers. It has never been the practice to record all hospitality received by such Members in the course of their ministerial duties in the Register of Members' Interests. However the question of registration may arise where hospitality or any other gift or benefit of registrable value has been received, for example, in the course of a private interlude in a ministerial programme. In making this assessment the nature of the occasion and the other circumstances involved are highly relevant. I consider below how these matters apply to Mr Prescott's case, in the context of the overall purpose of the Register itself.

17. There is a further relevant consideration to note at this stage. Although matters to do with the interpretation and application of the Ministerial Code are, as I have said, for the Prime Minister, advised by the Secretary to the Cabinet, efforts have been made over the years to ensure that the dual obligations falling on Ministers who are Members of the House are appropriately recognised in both the Parliamentary and the Ministerial documents. In this connection, paragraph 5.28 of the Ministerial Code provides:

"In the event of a Minister accepting hospitality on a scale or from a source which might reasonably be thought likely to influence Ministerial action, it should be declared in the Register of Members' or Peers' Interests."

I have appended at WE5 paragraphs 5.24-28 of the Ministerial Code, which contain that Code's relevant provisions relating to gifts and hospitality.

My Inquiries

18. Having written to Mr Swire on the afternoon of 4 July as at WE2, I began to prepare a formal letter of inquiry to Mr Prescott in the normal way. It emerged, however, that Mr Swire had written directly to Mr Prescott and to the Secretary to the Cabinet, in similar terms, it appeared, to his letter to me. Mr Prescott replied to Mr Swire on the afternoon of 4 July, responding to the various questions Mr Swire had raised, attaching the outline programme for his visit and detailing the dates on which he had met Mr Anschutz. The text of Mr Prescott's letter of 4 July to Mr Swire is at WE6 and the programme and list of dates at WE7.

Mr Prescott's Response to Mr Swire

19. Mr Prescott said that his official visit to the United States had been to discuss issues around urban and rural sustainability and regeneration. At the request of the Foreign and Commonwealth Office, it had also involved a visit to parts of "Middle America", and specifically to Colorado. Towards the end of the trip, after engagements in Denver and at a sugar beet farm, he had traveled on to Mr Anschutz's ranch near Denver, accompanied by two civil servants and his media special adviser, where Mr Anschutz had hosted an informal dinner for Mr Prescott's team and some of Mr Anschutz's staff.

20. Mr Prescott said that as a Minister he had played no role in any planning decision related to the Dome or any negotiations for the sale of the Dome. He had met Mr Anschutz on 7 occasions between August 2002 and July 2005, with officials present at all times. These meetings had related to the post-sale use of the Dome and its potential involvement in promoting London's 2012 Olympic bid. Mr Prescott and Mr Anschutz also shared an interest in events to mark the 200th anniversary of the abolition of slavery (in relation to which Mr Prescott chairs the Government's 200th anniversary Advisory Panel) and in particular the role played by the former MP for Hull, William Wilberforce, about whom Mr Anschutz's production company was planning to make a film.

21. During his stay at the ranch, the only discussions Mr Prescott had had with Mr Anschutz:

"concerned the running of a large ranch and William Wilberforce and the abolition of slavery, and the production of a film that Mr Anschutz is making on this issue. At no time were any issues regarding the Dome or casinos discussed, and at no time did I hold any private discussions with Mr Anschutz on this or any other issues."

Mr Anschutz had left the ranch early on the morning following the dinner, and Mr Prescott had spent the day (Saturday):

"traveling around the cattle ranch, discussing with ranch staff the issues and problems of running a large scale farming enterprise. We then left early the next morning and spent Sunday traveling to Los Angeles."

22. Mr Prescott said that he had sought and accepted the advice of his then Permanent Secretary on all aspects of the visit. The department had offered to meet the cost of the stay on the ranch but this was declined. In lieu of payment, a donation of $600 had been made by the department to the Red Cross appeal for the victims of the 7 July bombings. On the issues of registration, Mr Prescott concluded:

"No record of this stay was made in the Register of Members' Interests, as my visit to the US was entirely on official business and the cost was entirely covered by public funds."

Meeting with Mr Prescott

23. On the morning of 5 July, Mr Prescott invited me to see him to discuss Mr Swire's complaint. An agreed file note I made of our conversation is at WE8. One of Mr Prescott's special advisers was also present.

24. As can be seen from WE8, during our conversation and in response to my questions Mr Prescott confirmed the points he had made in his letter to Mr Swire. Mr Prescott said that his main reason for asking me to see him had been to inform me of his decision to register his stay at Mr Anschutz's ranch in the Register of Members' Interests. He had originally assumed that, given that his stay had been approved by his then Permanent Secretary as part of his official ministerial programme, and given also the payment made to charity, he was not under any obligation to register it. He continued to feel that he had done nothing improper in accepting the hospitality. However his attention had been drawn to paragraph 5.28 of the Ministerial Code (quoted in paragraph 17 above). In the light of the fact that recent events had illustrated the possibility that his acceptance of the hospitality might be perceived as laying him open to influence (though for all the reasons he had given, in his view it had not), he had decided to register the stay.[12]

Register Entry

25. Later on the morning of 5 July, the following entry was accordingly made in the Register of Members' Interests in relation to Mr Prescott:

PRESCOTT, Rt. Hon. John (Kingston upon Hull East)

7.  Overseas benefits and gifts

22-25 July 2005, while on government business in the United States, I stayed, together with three civil servants, at a ranch near Denver owned by Mr Phil Anschutz. My Department made a contribution to the Red Cross appeal for victims of the London bombings of 7 July in lieu of the cost of this accommodation. (Registered 5 July 2006)

26. Having had Mr Prescott's account of the circumstances surrounding his stay at the ranch, and in the light of his decision to register it, it seemed to me appropriate to make some inquiries of Mr Prescott's Permanent Secretary at the time of his visit to Colorado, Dame Mavis McDonald, and of officials in his Private Office, to confirm the precise nature of the stay and its relationship to the rest of the programme for Mr Prescott's tour. Mr Prescott (supported by the Cabinet Office) readily agreed to this. I also spoke to the former special adviser who had accompanied Mr Prescott on the tour. My focus, as in my questions to Mr Prescott himself, was on the extent to which the stay at the ranch formed a clear part of Mr Prescott's ministerial programme. It was not within my remit to examine the actions of the civil servants to whom I spoke in relation to the stay. Because I had moved beyond preliminary inquiries of Mr Prescott, I subsequently let it be known in response to inquiries that I had decided to examine the registration issues raised by Mr Swire, and expected to report on the matter to the Committee on Standards and Privileges by the Summer Recess.

Evidence of Dame Mavis McDonald

27. An agreed file note of a telephone conversation I had with Dame Mavis is at WE9. Dame Mavis confirmed that she had been consulted about whether an invitation from Mr Anschutz to Mr Prescott to stay at his ranch should be accepted. Her primary concern had been that there should be no impropriety or perceived conflict of interest in Mr Prescott's accepting the invitation. She had established that there were no outstanding issues relating either to the Dome or to the regeneration of the Greenwich peninsula awaiting Departmental decision. She had satisfied herself that there was no conflict of interest in relation to these matters and that, from this point of view, the invitation could be accepted. It then became a matter of judgement whether or not to accept the invitation. She had not been asked to advise on whether the visit to the ranch should be recorded in the Register of Members' Interests.

28. Dame Mavis said that the overall programme for Mr Prescott's tour had been fully justified in terms of his concern for regeneration policy and the international profile he enjoyed on such matters. It had also included elements, of which the Denver part of the programme had been one, suggested by the Foreign and Commonwealth Office, which reflected Mr Prescott's wider role as Deputy Prime Minister. In response to my comment that I could not easily see a clear departmental purpose to the visit to the ranch, Dame Mavis pointed out that Mr Prescott and his party would have needed to be accommodated elsewhere, at departmental expense, if the visit to the ranch had not been accepted.

Evidence of Private Office Staff

29. I met Mr Prescott's Principal Private Secretary, together with one of his officials who had been a Private Secretary in July 2005 . This official had had particular responsibility for the Deputy Prime Minister's overseas visits, and had accompanied Mr Prescott on his US tour, including the stay at Mr Anschutz's ranch. An agreed note of our discussion is at WE10.

30. The Private Secretaries confirmed, in its essentials, the account I had been given by Mr Prescott and Dame Mavis of the overall purpose of Mr Prescott's US tour and of the discussions in the Department which had preceded acceptance of Mr Anschutz's invitation to the Deputy Prime Minister to visit his ranch in Colorado. Officials had seen value to the department in such a visit in terms of maintaining the relationship with Mr Anschutz, who was a key player in the regeneration of the Greenwich peninsula. Nonetheless they had been concerned to ensure there would be no conflict of interest from a departmental point of view. The payment of $600 to a charity of Mr Anschutz's choosing had been envisaged as providing an element of reciprocity for the 2 night stay and as covering all 6 members of Mr Prescott's party (Mr Prescott himself, his special adviser, 2 officials and 2 protection officers). The figure had been that suggested by Mr Anschutz. (ie 6x $100 per person for the two night stay.)

31. The former Private Secretary who had been one of the two officials accompanying Mr Prescott confirmed that there had been no private conversations between Mr Prescott and Mr Anschutz at the ranch. The party had arrived on the Friday evening in time for an informal dinner hosted by Mr Anschutz. The conversation over dinner had been wide-ranging but because the occasion had been informal and no action points had come out of it: she had not taken a note. She recalled that Mr Prescott had spoken about his tour and discussion had also embraced the events of 7 July and Mr Anschutz's planned films (including one about William Wilberforce). Mr Prescott had also outlined his early thoughts about linking Bristol, Hull and Liverpool to mark the anniversary of the end of slavery. She did not recall any discussion about the Dome or the Government's plans in respect of super-casinos.

32. As to the purpose and nature of the visit to the ranch, the Principal Private Secretary agreed with my suggestion that there had been an element in the arrangement of finding a suitable way in which to occupy Mr Prescott over the weekend in Denver. But the visit had also enabled the relationship with Mr Anschutz to be maintained and, given Mr Prescott's wider role as Deputy Prime Minister, it had a broader, in part educational value, since it had enabled Mr Prescott to learn more about farming (a theme of this part of the trip) and about running a large ranch.

Evidence of former Special Adviser

33. The former Special Adviser who had been one of those accompanying Mr Prescott at the ranch gave me a similar account of the time Mr Prescott and his party had spent there. The only conversation of substance between Mr Prescott and Mr Anschutz of which he was aware was that which had taken place around the dinner table on the first evening of the party's stay. It had embraced terrorism and the events of 7 July 2005 in London; the nature of the media in Britain; Mr Anschutz's forthcoming film productions, including his planned film about William Wilberforce; the Deputy Prime Minister's initial ideas for marking the 200th anniversary of the Abolition of Slavery; and the running of a large ranch. The occasion had been relaxed and informal. There had been no discussion about the Dome or planning or casinos.

34. Mr Anschutz had left the ranch after breakfast the following day. The former Special Adviser had subsequently accompanied Mr Prescott touring the ranch on horseback, talking to an experienced ranch hand about running the ranch, and enjoying the countryside. In response to my question as to whether he would describe the nature and content of the visit to the ranch as primarily ministerial or otherwise, the former special adviser said that it was more difficult to characterize than the rest of the tour. However, if pressed, he would describe it as primarily a ministerial occasion. An agreed note of our conversation is at WE11.

Gifts received by Mr Prescott

35. I have previously mentioned that press reports on Sunday, 9 July had suggested that, while staying at Mr Anschutz's ranch, Mr Prescott had received gifts of registrable value from Mr Anschutz. In the light of these reports, I wrote to Mr Prescott on 10 July inquiring as to the position.

36. In my letter (the text of which is at WE12), I referred to paragraph 5.26 of the Ministerial Code, which says in relation to gifts:

"Gifts given to Ministers in their Ministerial capacity become the property of the Government and do not need to be declared in the Register of Members' or Peers' Interests. Gifts given to Ministers as constituency MPs or members of a political Party fall within the rules relating to the Register of Members' and Peers' Interests."

I continued that if the weekend press allegations that Mr Prescott had received these gifts were correct, there would be no need to register them provided that they had immediately been handled in accordance with paragraph 5.25 of the Ministerial Code, ie

a)  Mr Prescott had reported receipt of the gifts to his then Permanent Secretary immediately on his return to the UK.

b)  Assuming the gifts had a value greater than £140, they had either been retained by the Department or had been purchased by Mr Prescott for their cash value minus £140.[13]

If however, the gifts had not been declared or had been retained by Mr Prescott without any off-setting payment to the Department, they would in my view be registrable under Category 7 of the Rules on the registration of interests.

37. The principle I had in mind is that, in the interests of transparency and accountability, gifts of the appropriate value received by a Member who is a Minister should appear either in the list of gifts valued at more than £140 received by Ministers in the course of their official duties [14]which is published annually by the Cabinet Office[15] or if of registrable value,[16] in the Register of Members' Interests, unless, of course, they were not received in any capacity related to their membership of the House. They should not simply be able to drop from sight.

38. I accordingly asked Mr Prescott:

(1) Did you receive any gifts from Mr Philip Anschutz during your stay at his ranch in July 2005?

(2) If so, what was their nature and the estimated cash value of each of them?

(3) Were they declared on your return to the UK to your then Permanent Secretary? When were they declared?

(4) Were they retained by the Department or purchased by you in accordance with paragraph 5.25 of the Ministerial Code?

39. Mr Prescott replied as in the letter at WE13. He had initially been provided with various items—viz a stetson hat, a pair of calf length boots, a belt and buckle, a pair of spurs and a pair of jeans—to enable him to spend a day touring Mr Anschutz's ranch. Subsequently all but the last of these items had been sent on by Mr Anschutz to Mr Prescott's departmental office. He had also received a leather-bound notebook. Following considerable effort, his office had valued these gifts (excluding the notebook) at about £600 in total. This broadly coincided with the value the American press reported a spokesman for Mr Anschutz to have put on the gifts.[17]

40. The gifts Mr Prescott had received had been retained by his Department and would be included in the annual list of gifts received by Ministers, to be published by the Cabinet Office shortly.

41. Mr Prescott's letter of 14 July[18] - conveying both his initial response to my questions about gifts and his comments on the draft of the factual sections of this report—did not respond in terms to the third of the questions listed in paragraph 38 above. I accordingly wrote to Mr Prescott on 17 July enclosing a revised draft and inviting his response to this particular question (WE14).

42. Mr Prescott replied on 18 July. His letter (the text of which is at WE15) included a more specific response to the four questions in paragraph 38, and commented on one other point of substance relating to the registration of hospitality which I set out below.

43. On gifts, Mr Prescott confirmed that those he had received had been given to him in his ministerial capacity. He confirmed that he had understood at the time of his visit that the Stetson hat and other items he had used during his tour of Mr Anschutz's ranch were intended as gifts and would be posted to his office in the UK after he had used them. The gifts had been noted by the civil servants present with him at the ranch and, on return to the UK, recorded in the official file kept in his Private Office. He had himself played no part in this process, nor had he sought at any time to purchase the gifts.

44. In response to my question as to when the gifts had been declared to his Permanent Secretary, Mr Prescott wrote:

"You seek the assurance that [the gifts] were declared to the Permanent Secretary immediately on their receipt into my office. The record of gifts kept in my Private Office is always available for inspection by my Permanent Secretary, and in accordance with my department's procedures, there was no correspondence between my Private Office and my Permanent Secretary about these gifts—though she did see at least some of the Anschutz gifts when they were displayed in the office on their arrival.

The practice adopted by my department is in line with section 5.25 of the Ministerial Code, which I have an obligation to adhere to at all times. It states that "receipt of gifts should be reported to the Permanent Secretary". The Code does not state that this must be done "immediately", though, as I have explained, this "requirement" was, in practice, achieved on this occasion.

Further Comment by Mr Prescott on the Registration of Hospitality

45. Commenting, in his letter at WE15, on a first draft of the factual sections of this report, Mr Prescott clarified further his reasons for deciding to register the hospitality he had received from Mr Anschutz once the matter had been raised with him by Mr Swire. His motivation had not been that acceptance of Mr Anschutz's invitation might possibly be perceived as laying him open to influence. Rather, he wrote:

"I received clear advice before the visit by my then Permanent Secretary that I could stay at the ranch. I subsequently sought advice from the Cabinet Secretary when this whole matter came to light. His advice was that he would not have authorised a charitable donation for this purpose and that the visit could potentially be deemed as hospitality.

On hearing this I decided for the absolute avoidance of any doubt to record the stay in the Register of Members' Interests.

As the statement issued at the time said, for the avoidance of "any doubt" that I acted "at all times with integrity", I therefore decided to register the stay by me and my civil servants in the Register of Members' Interests."

Findings of Fact

46. Between 18 and 26 July 2005, the Deputy Prime Minister, Rt Hon John Prescott made an official visit to the USA. The primary purpose of the tour was to discuss matters to do with urban regeneration but the visit also touched on issues of rural sustainability and, at the suggestion of the Foreign and Commonwealth Office, included, among other things, a visit to Denver, Colorado.

47. Mr Philip Anschutz, with whom Mr Prescott had had a total of 6 meetings, in each case together with officials, prior to July 2005, suggested to Mr Prescott that when he was in the area of Denver he should visit Mr Anschutz's Colorado ranch. This invitation was subsequently discussed in Mr Prescott's department and the then Permanent Secretary was consulted. She satisfied herself that there would be no conflict of interest from a departmental point of view in accepting the invitation and approved a payment of $600 by the Department to a July 7, 2005 charity nominated by Mr Anschutz, thus providing some element of reciprocity in the arrangement. The invitation was then accepted.

48. Mr Prescott—accompanied by a special adviser, two officials and two protection officers—arrived at Mr Anschutz's ranch in time for an informal dinner hosted by Mr Anschutz on the evening of Friday, 22 July 2005. According to Mr Prescott, his former special adviser and one of the other officials accompanying him, the conversation over dinner included discussion of a film on William Wilberforce which Mr Anschutz's production company was planning. Mr Prescott described his early thoughts about marking the 200th anniversary of the end of slavery. Mr Prescott says that there was no discussion of the Dome or the Government's plans in respect of super-casinos. Both the former special adviser and the official present whom I interviewed also do not recall any such discussion.

49. Mr Prescott says that his visit to the ranch was part of his official programme and consistent with one of its themes—rural sustainability, farming and international trade. From his department's point of view, the visit was a means of maintaining contact with Mr Anschutz, a key player in the regeneration of the Greenwich peninsula. Officials say that the visit also had to be seen in terms of Mr Prescott's wider role as Deputy Prime Minister. They accept that there was an element in the arrangement of finding a suitable way in which to occupy Mr Prescott and his party in Denver over a weekend, the expense of which would in any event have fallen on the department.

50. Mr Prescott originally saw no need to register his stay at Mr Anschutz's ranch in the Register of Members' Interests, as his visit to the USA was on official business, he was advised by his then Permanent Secretary that he could stay at the ranch, and a donation had been made to a charity in partial offset of the cost of his stay. He continues to feel that he has done nothing improper in accepting Mr Anschutz's invitation. However, in the light of subsequent advice from the Secretary to the Cabinet[19] that he would not have authorised a charitable donation for this purpose and that the visit could potentially be deemed as hospitality, he decided, to avoid any doubt that he had acted with integrity, to register the stay. An appropriate entry was accordingly made in the Register of Members' Interests on 5 July 2006.

51. After his stay, Mr Prescott was sent by Mr Anschutz a number of items which he had used during his day touring the ranch on horse back. These were a Stetson hat, a pair of calf length boots, a belt and buckle and a pair of spurs, which Mr Prescott's department has subsequently valued at around £600 in total. Mr Anschutz's spokesman is reported to have put a broadly similar value on the gifts. Mr Prescott also received a leather-bound notebook (not valued). Mr Prescott has assured me that all of these gifts were, on his return to the UK, duly recorded in the official file kept in his Private Office, which was available for inspection by his then Permanent Secretary. The gifts have all been retained by his department and will be included in the annual list of gifts received by Ministers which the Cabinet Office will publish shortly.

Conclusions

52. As I have previously explained (paragraphs 9-11 above), the primary issue raised by Mr Swire in his letter to me of 3 July which clearly falls within my terms of reference is whether Mr Prescott should have registered the hospitality he received during his two-night stay at Mr Anschutz's ranch in the Register of Members' Interests. A secondary issue, raised by Mr Swire in his letter of 10 July, is whether Mr Prescott should have registered any gifts he received related to that stay.

HOSPITALITY

53. As the "Guide to the Rules"[20] makes clear, Members are responsible for making a full disclosure of their interests.[21] They are required to notify changes in their registrable interests within 4 weeks of each change occurring.[22] There is no doubt that the overall nature of Mr Prescott's visit to the United States was Ministerial in character and related not only to his departmental responsibilities, but also to his wider role as Deputy Prime Minister.[23] In registering, almost a year after the event, the hospitality he received from Mr Anschutz under Category 7 (Overseas Benefits and Gifts), Mr Prescott has implicitly acknowledged both that this hospitality was on a scale or from a source that might reasonably be thought likely to influence Ministerial action, and that in his opinion its value exceeded the registration threshold set by the House.[24]

54. Mr Prescott was right, I believe, to accept the advice of the Cabinet Secretary that his visit to Mr Anschutz's ranch could be regarded as hospitality and thus to register, albeit belatedly, his stay at the ranch. In believing that he was right to do this, I have the following considerations in mind.

55. First, in order to decide whether such hospitality would be recordable in the Register of Members' Interests, an assessment is necessary as to whether the stay at the ranch was entirely ministerial in character or whether there were other elements which would have rendered the stay potentially registrable.

56. The stay at the ranch was certainly part of Mr Prescott's official tour. He was accompanied by a special adviser and two officials, and the Department made a payment to a charity in partial off-set of the costs which would otherwise have fallen on it for accommodating Mr Prescott and his party in Denver over the weekend in question.

57. What was the ministerial content of the stay at the ranch? Mr Prescott says that the visit was consistent with one of the themes of his overall tour—rural sustainability, farming and international trade. He has shared interests with Mr Anschutz, not only in relation to regeneration but to William Wilberforce and the marking of the 200th anniversary of the abolition of slavery. Officials have confirmed that these were among the topics discussed at the informal dinner Mr Anschutz hosted for Mr Prescott and his party on the evening of their arrival at the ranch.[25]

58. Mr Prescott's officials point out that there was a departmental purpose in maintaining the relationship with Mr Anschutz, a key player in the regeneration of the Greenwich peninsula. The visit also had to be seen in the wider context of Mr Prescott's role as Deputy Prime Minister. In that it enabled Mr Prescott to learn more about farming and running a large ranch, it had a broader, in part educational value. They accept, however, that there was also an element of finding a suitable way in which to occupy Mr Prescott and his party over the weekend when they were in the Denver area, given that they could hardly be flown home and back out again to complete the final part of Mr Prescott's programme for his tour in Los Angeles.

59. Weighing the evidence available, my own assessment is that the ministerial content of the stay at the ranch was limited. It contained elements - in nurturing the relationship with Mr Anschutz and in some of the conversation over the dinner table—of official business. However, it involved the receipt of significant hospitality by Mr Prescott and his party, the benefit of which was not greatly offset by the relatively modest payment suggested by Mr Anschutz and made by the Department to a charity of Mr Anschutz's choosing. The conversation about William Wilberforce and the 200th anniversary of the abolition of slavery reflected a constituency as well as a ministerial interest of Mr Prescott. And the stay taken as a whole, while no doubt broadly educational, was also a pleasant and necessary interlude in an otherwise busy and no doubt tiring ministerial programme. It is therefore to be seen as involving an offer, and the acceptance, of significant hospitality, and the Cabinet Secretary was right so to advise Mr Prescott.

60. A question in this case is whether accepting Mr Anschutz's invitation to stay at his ranch was an appropriate way in which both to nurture the relationship with Mr Anschutz and to occupy Mr Prescott and his party over their weekend in Denver or whether there were other, more appropriate, ways in which to achieve these ends. Mr Prescott's then Permanent Secretary satisfied herself that there would be no impropriety or conflict of departmental interest if the invitation were to be accepted. As she noted, "It then became a matter of judgement whether or not to accept the offer." As paragraph 5.25 of the Ministerial Code makes clear, "this is primarily a matter which must be left to the good sense of Ministers", taking advice as necessary and seeking the Prime Minister's guidance if in doubt. The judgement made in this case is not one on which, given my terms of reference, it is for me to comment.

61. A judgement was also required as to whether, the invitation having been accepted, the receipt of Mr Anschutz's hospitality should be recorded in the Register of Members' Interests. Central to that judgement, as I have already indicated, was an assessment of the content of the stay at the ranch. A second key consideration is an understanding of the purpose of the Register as set out in paragraph 9 of the Guide and already quoted in paragraph 13 above. This makes clear that registration does not depend on whether or not a material benefit received by a Member has in fact influenced them in their actions as a Member, but whether the benefit "might reasonably be thought by others" to do so.

62. In other words, the issue of how the receipt of a benefit might be perceived is crucial. It is this issue of perception which is also reflected in the terms of paragraph 5.28 of the Ministerial Code:

"In the event of a Minister accepting hospitality on a scale or from a source which might reasonably be thought likely to influence Ministerial action, it should be declared in the Register of Members' or Peers' Interests." (emphasis added)

63. Might Mr Prescott's acceptance of Mr Anschutz's invitation reasonably be thought likely to influence his actions in the capacity of both a Member and a Minister? In my submission, yes. Mr Anschutz is a private citizen with substantial business interests, someone with whom Mr Prescott has had official dealings reflecting both his responsibilities and interests as a Minister and as a Member of Parliament for Hull. Given that Mr Prescott had both departmental Ministerial responsibilities relating directly to the interests of Mr Anschutz and a wider role as Deputy Prime Minister going beyond matters specifically relating to those of his own department, there was in my view a real risk that his acceptance of Mr Anschutz's hospitality could create a perception that Ministerial action could be influenced, not only departmentally but more widely, as a result. The payment made to a charity by Mr Prescott's department, whilst it established an element of reciprocity in the arrangement, in no way offset this risk.

64. To sum up on this point, in his letter of 3 July Mr Swire asked me to consider whether Mr Prescott's visit to Mr Anschutz's ranch should have been registered in the Register of Members' Interests. For the reasons I have given, my answer to this question is 'yes'. Mr Prescott was some 11 months late in registering Mr Anschutz's hospitality. The Committee will wish to take into account when considering this matter both that fact and the fact that once the matter had been raised with him by Mr Swire, Mr Prescott took advice from the Cabinet Secretary, accepted that advice and registered the stay on his own initiative. He was, in my view, right to do so.

GIFTS

65. In his letter of 10 July, Mr Swire raised with me the question of any gifts received by Mr Prescott during or in connection with his visit. I have described the factual position, as explained to me by Mr Prescott, at paragraphs 39-40 above. It appears that the value of the gifts was significantly less than the press has suggested, although large enough in aggregate to bring them above the threshold for registration under Category 7.[26]

66. As I explained in paragraph 36, the gifts Mr Prescott confirms he received from Mr Anschutz, though of registrable value, would only require to be registered in the Register of Members' Interests if they were not immediately handled in accordance with paragraph 5.25 of the Ministerial Code. Mr Prescott has stated that, on his return to the UK, the gifts were duly recorded in the official file kept by his Private Office. The gifts have been retained by his Department and their receipt will be recorded in the annual list of gifts received by Ministers which is shortly to be published by the Cabinet Office. On the basis of this evidence, no issue as to the inclusion of these gifts in the Register of Members' Interests arises.

67. That said, paragraph 5.25 (a) of the Ministerial Code provides that:

"Receipt of gifts should be reported to the Permanent Secretary."

I do not find Mr Prescott's account of the procedures in his Department reassuring on this point, in that they seem to have relied on the fact that the Permanent Secretary had access to a file in the Private Office in which gifts received by Ministers were recorded.[27] I believe that the public interest requires a system to be in place which would actively alert the Permanent Secretary to such matters, not require him or her to remember to consult the file. Moreover, the Permanent Secretary must be alerted to such matters within a reasonable time frame. This is essential if he or she is to be able to advise a Minister on any possible conflict of interest issues which may arise from the receipt of such gifts. This is a matter to which, I suggest, Mr Prescott and his department should pay urgent attention.

POSTSCRIPT

68. In the light of this case, it may assist Ministers and those advising them if I set out the questions additional to the considerations set out in the Guide to the Rules which I suggest should be addressed in deciding whether or not to record in the Register of Members' Interests hospitality or other material benefits received in the course of their Ministerial duties:

a)  Did the value of the benefit, alone or aggregated with other benefits from the same source in the current calendar year, exceed the registration threshold?

b)  Was the occasion on which the hospitality was received purely Ministerial or Governmental in character, or did it include, for example, a significant constituency, party or personal element?

c)  Was the hospitality received from official (eg overseas government) or from private sources?

d)  Could the receipt of the hospitality reasonably be thought, by the Minister, or by others, to have the potential to influence his or her actions, either in a Ministerial capacity, or as a Member?

69. The Registrar of Members' Interests is always available to advise Members, including Ministers, on meeting their obligations under the Parliamentary Code and Guide to the Rules, just as the Cabinet Office is available to advise Ministers and their Departments in relation to the requirements of the Ministerial Code.

18 July 2006                 Sir Philip Mawer



10   HC 351, Session 2005-06  Back

11   Although this, the current version of the Code was approved only a few days before Mr Prescott began his visit to the United States, a similar provision had been included in the version previously in force and the relevant Rules on registration had been in force since 14 May 2002.  Back

12   See also paragraph 45 below for an account of Mr Prescott's reasoning on this matter.  Back

13   Gifts below £140 may be retained by the recipient.  Back

14   Ministerial Code, paragraphs 5.24 to 5.28 and 10.19  Back

15   See paragraph 5.27 of the Ministerial Code  Back

16   For the purposes of registration in Category 7, the threshold value in July 2005 was £590 per gift (or in aggregate in the case of gifts received from the same source.)  Back

17   Los Angeles Times, 13 July 2006. See also WE 13.  Back

18   WE13 Back

19   The current Cabinet Secretary, Sir Gus O'Donnell, was appointed with effect from 1 August 2005. Back

20   See The Code of Conduct together with the Guide to the Rules relating to the Conduct of Members, HC 351 (2005-06) Back

21   Paragraph 13  Back

22   Guide, paragraph 11  Back

23   See the evidence from officials in WE9-11  Back

24   Ministerial Code, para 5.28. From inquiries I have made about the cost of commercially-available acoommodation and horse-riding facilities in Colorado, I am satisfied that Mr Prescott was correct in his assessment of the potential value of the hospitality he received.  Back

25   See WE10 & WE11 Back

26   £590 in July 2005 Back

27   WE15  Back


 
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