Examination of Witnesses (Questions 220-232)
LORD STEVENSON
OF CODDENHAM
CBE AND RT
HON LORD
HURD OF
WESTWELL CH CBE
11 OCTOBER 2007
Q220 Mr Prentice: But you have lived
and breathed this for the past 24 months, have you not?
Lord Stevenson of Coddenham: No.
Q221 Mr Prentice: You must have thought—
Lord Stevenson of Coddenham: Of
course, but we have been doing our job, which—boring as
it is—is quite narrow and quite small scale, and we helped
the police when necessary, but, no, we have not been living and
breathing the 1925 Act. We have watched with interest.
Q222 Mr Prentice: You must have gone
back to the legislation and looked at it and just talked amongst
yourselves; you must have done.
Lord Stevenson of Coddenham: I
regret to have to disappoint you; we are an unimaginative lot!
Can I just say as a citizen I would hope that people like you
are looking at it, which is what I think you are doing, because
clearly there is a case for a helicopter view being taken on the
whole thing, but I personally have no views on it.
Q223 Chairman: Could I just pick
up a few loose ends on this before we end, on the honours system
itself, because you have acquired this scrutiny role now for higher
honours of certain kinds. What I am not clear about is exactly
what your propriety checking is in relation to these higher honours.
For example, if a political party decided that it had become more
difficult to reward big donors with peerages but thought it could
quite conveniently give them knighthoods, I am not clear that
you are on the case there, are you?
Lord Stevenson of Coddenham: We
were put on the case, whenever it was, three years ago or something,
and my understanding—and I am looking around to my colleagues
to tell me if I am right—is that Mr Blair took us off the
case by saying, and I imagine he was speaking for the other parties,
that the politicians would not toss honours in. It would go through
these committees and the committee is chaired by the Head of the
Civil Service. I think I am right in saying we have not been given
any to look at since then. I am happy to write and confirm it,
but I think that if there were to be political recommendations,
they would go through our vetting processes for propriety and
they would be, for the time being, exactly the same as we do for
peerages, unless there was some good reason to the contrary, but
I think it is academic because I do not think there are going
to be any.
Q224 Chairman: Has the current Prime
Minister repeated the undertaking given by the previous Prime
Minister by taking himself completely off the honours system?
Lord Stevenson of Coddenham: I
do not know.
Lord Hurd of Westwell: I rather
think he did on the original statement on governance.
Q225 Chairman: I think he did, I
wondered if you knew.
Lord Hurd of Westwell: My recollection
is he did. What we do not know is how he would act on the convention
that has grown up that the Prime Minister as regards peerages
should have a right to a certain number in each Parliament. I
am talking about non-party peerages, for example people like chiefs-of-staff
and archbishops. I do not think we have heard from him on that.
It is quite an interesting point and no doubt he will get around
to it.
Q226 Chairman: Can I just return
to one or two other things. You keep saying that your remit is
a terribly narrow one and all that. I do not really buy that because
it seems to me that it is extraordinarily wide because, as it
were, you can make up things for yourself. The residency for tax
purposes thing, which is a rather major thing to have inserted
into the system, you have just done it, have you not? No-one has
given you the authority to do it. These terms that you work to
about "credibility" and "good-standing" are
enormously capacious terms that enable you to make all kinds of
judgments, so I think you are being disingenuous by keeping on
telling us how narrow your remit is; I think it is extraordinary.
Lord Stevenson of Coddenham: That
is a perfectly fair point. Within the really quite precise and,
I would say, quite narrow remit, we had little briefing from on
high as to what to do, except that we had inherited the PHSC's[5]
working practices and we have taken them on and modified them
so we have not been quite making it up in vacuo. I would
stick to it. I think it is important that we emphasise to people
the precise nature of our brief, precisely because there will
be those who think we can somehow have some locus on the police
inquiries and the law, et cetera, et cetera and we do not.
Within the areas which we are asked to look at, which are quite
precisely defined, I hope we jolly well are thinking about it
and, when you say "making it up", we are very precise
about doing it.
Q227 Chairman: Let us just take ourselves
back to where we started, which is this 2005 list just so we are
clear. Some of that turned on the inadequacy at the time of the
legislation about loans. You are a man who knows about loans,
you understand the money, which I think is an interesting dimension
of this whole story. You were on the case about loans, were you
not?
Lord Stevenson of Coddenham: Yes.
Q228 Chairman: Was that a factor
in your scrutiny of these names even at the time, and did you
feel then that there was a loophole in relation to commercial
or non-commercial loans which you applied to these names that
you were being given?
Lord Stevenson of Coddenham: First
of all, it is important to say that quite a lot of nominees had
told us about loans, as indeed I would expect them to. It is pretty
obvious that they should, irrespective of what the 2000 Act said.
It is important to know that quite a lot of people have told us
about loans. And secondly the history: what happened was we got
the list in October or something like that, and we went back to
the Prime Minister at the beginning of February, there or thereabouts,
and we only discovered a very few weeks after that that there
had been a loan from one of them, and we then moved very fast
to ask the political parties to tell us what other loans there
were and if there was anything else we should know. It is quite
an important piece of fact that we had given our advice to the
Prime Minister without knowledge of the loans which subsequently
came to light. The loans then came to light. Answering your question—and
this is not something I have discussed with my colleagues so I
am speaking personally—I personally was and am quite shocked
by the expediency of loans. I am not saying they were illegal
but I was quite shocked, it is a bit like tax avoidance, and second,
I use my words advisedly, there are some real shades-of-grey territory
as to what is commercial and what is not. You try coming to my
bank and getting an unsecured loan with interest rolled up at
one or two points over base, and I would hate to disappoint you,
Chairman! That was the history as to what had happened. We did
not know about the loans when we wrote the letter to the Prime
Minister. We moved very fast when we found out about them, and
answering your question—speaking entirely personally—I
found them very shocking, and I am glad that loopholes have been
closed.
Q229 Chairman: Just to finish the
story, if amongst the individuals that you, as it were, put the
black spot on at that time, one of them, say, had been a perfectly
upstanding person, who had been advised to give a loan of a certain
kind rather than a donation because that would be helpful to the
party and had innocently done that, and had done it as it turns
out within the terms of the law at the time, would that person
not feel slightly aggrieved that you had marked him down?
Lord Stevenson of Coddenham: He
might or she might. I would observe that within the spirit, although
we have changed our wording to make it plain beyond peradventure
that we expect people to tell us anything and everything that
might bear on a nomination for a peerage (which by the way 99.9%
of people always have, to be quite plain), actually our previous
wording was pretty strong and I would say to such a person, "Come
on, it is perfectly obvious that you should have told us about
that loan". You can go back and read what we have asked.
Q230 Chairman: It was not necessarily
obvious at the time, was it?
Lord Stevenson of Coddenham: I
would say go back and look at it.
Q231 Chairman: Because you have changed
your certification now to get catch-all information about any
kind of—
Lord Stevenson of Coddenham: I
could read it out to you. If you actually read the words we put
on the previous form, they were pretty strong, and the fact is,
Chairman, that an awful lot of our nominees, I am glad to report,
tend to throw everything in at us. If they so much as bought an
ice-cream for a politician's child, they will put that in. I am
exaggerating a little bit, but half a dozen bottles of beer featured,
so, no, I would not. It is a matter of judgment and that person
would be entitled to their view, but I would not be very sympathetic.
Q232 Chairman: All this has been
fascinating and helpful to us. Can I just say as we end that I
was first of all delighted to see that you cost the taxpayer only
£125,000 a year, which for a regulatory body seems to me
to be quite a modest sum. And, secondly, that, in my judgment,
your role as a committee in recent events has been a rather impressive
one because you have plainly developed a more robust system of
scrutiny than I think historically has existed, so one of the
things that has emerged from this is that far from our regulators
being deficient it has actually rather proved itself, which takes
us back to the conversation we had right at the beginning. I think
we have had some very interesting exchanges which we shall make
good advantage of, I hope, and thank you very much to both of
you.
Lord Stevenson of Coddenham: Thank
you, Chairman. I shall take the first of your very kind observations
as approval from the Chairman to take my hard-worked staff, who
have been utterly fantastic, out to lunch on the taxpayer. I will
not—I will pay for it myself, it is all right! Thank you
very much.
5 Political Honours Scrutiny Committee Back
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