Examination of Witnesses (Question Numbers
820-839)
MR TOM
WATSON MP, MR
TOM HARRIS
MP AND MR
IAIN WRIGHT
MP
19 JUNE 2008
Q820 Mr Walker: I am not talking
about MPs but ministers and senior civil servants. What is the
Code relating to ministers and senior civil servants, not special
advisers or not press officers but senior civil servants, accepting
hospitality from the Daily Mail or The Express or
somebody? What are the rules relating to that?
Mr Watson: You have to let me
clarify this after the Committee. I suspect the publication we
are going to do later in the year if it was hospitality over a
certain amount would include the press, but if I could come back
to you on that I will find out exactly.
Q821 Mr Walker: Obviously when you
meet the press there is a purpose. The press tend to report the
conversation but not all meetings with the media get reported
by the relevant journalist. If there was a register of meetings
that you had had as part of your day-to-day jobs with private
companies, should that register be extended to all meetings and
include meetings with journalists. It might cause some embarrassment
occasionally if something was leaked and not attributed but do
you think that should be covered?
Mr Watson: If that is a recommendation
of the Committee then obviously we will have to consider it.
Mr Walker: I did not ask that.
Q822 Chairman: That is ministerspeak.
Mr Watson: Let us be candid with
you. There is not a cat's chance in hell that you are going to
get a register of every politician who has lunch with a journalist.
Q823 Mr Prentice: Something that
was raised by Tom Harris about franchising, because decisions
there are worth millions, we are not talking about business lunches,
£100 or £200, but millions perhaps billions. You told
us that Jack Paine, who is here, is the filter who protects you.
The Transport Committee, my notes tell me here, says that the
re-franchising process is driven by consultants and lawyers. What
steps do you take to ensure that the consultants the Department
of Transport employs to advise you on franchising and re-franchising
do not have another foot in the industry because many of them
have an old British Rail background I suppose? Do you check them
out?
Mr Harris: It is true that the
re-franchising process is driven by consultants and lawyers working
for the individual train-owning companies. At the very start of
a process of course they are hyperactive, they are trying to get
as much information as they can about the franchise, about the
nature of the geographical area and a huge amount of work goes
into those train operating companies. They always employ firms
of consultants to gather that information and input it into the
system. In terms of making sure that civil servants are not unduly
influenced by those consultants, as I say as soon as an invitation
to tender is actually issued that is when the hatches are brought
down as far as the DfT is concerned. Nobody who is involved at
all in assessing those bids is open to influence by outside consultants
from the invitation to tender, including myself. That is the advice
I have been given. For example in the South Central franchise,
ITT goes out later this year and at that point I would no longer
meet any of the trade and operating groups who have expressed
an interest in the franchise.
Q824 Mr Prentice: It is hermetically
sealed and there is no possibility that consultants could be working
for both sides.
Mr Harris: They can be working
for both sides. What I would hope is that civil servants involved
in the franchise process would be open in as much as if a train
operating company, represented either by themselves directly or
by a consultancy, needed more information that was a legitimate
piece of information I would hope they would get that information.
I would not want it to be a situation where they could not speak
to the edifice which is the DfT. There has to be some reasonable
access to get information for a bid. I do not have a problem with
that. In terms of being able to exert influence, it does not happen.
Can I give you one example? Within a couple of weeks of my becoming
a minister I was asked to open the envelope announcing the winner
of the South West franchise. It was a very strange process because
at that point opening the envelope was a bit like announcing the
winner of an Academy Award. That was the first time the minister
has any idea about who has actually won the franchise. Likewise,
almost nobody in the room, including officials, knows the name
of the winning company until the minister opens that envelope
and the only person who knows, who put that bit of paper into
the envelope, is Jack who is effectively hermetically sealed from
the whole industry from the minute the ITT is put out. It is a
very robust system.
Q825 David Heyes: I was going to
ask about this area. Going back to the beginning of this session
when we asked which lobbying organisations came to mind, the first
ones you mentioned were the Rail Industry Association and the
Association of Train Operating Companies. You described them in
passing as respected organisations. You then went on to talk about
what I guess are more user orientated groups and you mentioned
Rail Future. You were a bit disparaging about them and said they
were train spotters.
Mr Harris: I do not use train
spotters as an insult at all; it is a fine occupation.
Q826 David Heyes: Is there a hierarchy
in your mind of the people you should listen to?
Mr Harris: If I am being completely
honest, if there are a lot of demands on my diary and I have room
to put one more meeting in and the choice is between the Director
General of First Group or a rail user group representing a small
station somewhere in the West Midlands the chances are I will
speak to the Director General of First Group because I have a
relationship there. There is almost always a financial relationship
between the department and the particular train operating company.
In all honesty I could not say that someone who is a member of
a voluntary group supporting the railways would have exactly the
same access to me as one of the train operating companies.
Q827 David Heyes: You did not mention,
when you were volunteering who you get lobbied by, rail unions.
I would have though they would be making very significant attempts
to influence.
Mr Harris: On the first day I
became a minister I was presented with a long list of organisations
by my private secretary of people I should meet. I took one look
at it and said there were no trade unions on the list and could
you put the three rail unions on it and give me the list back.
I have not had the list back yet but I do make the effort to meet
the trade unions on a regular basis.
Q828 David Heyes: I am not sure how
you make the decision about which type of organisations to give
weight to. Is it something that is in you because you are a politician
or does it come with the status of minister? Is there a process
you go through?
Mr Harris: In February this year
we had a political difficulty with First Great Western, the train
operating company in the South West of England, whereby the Secretary
of State and I had to decide what to do about its under-performance.
Given the political sensitivity and given the effect that was
having on passengers, I think it was entirely legitimate of me
to spend quite a lot of time speaking to First Great Western on
a formal basis with the managing director and with the route director
of Network Rail in that area.
Q829 David Heyes: That is more consulting
and taking soundings rather than you being on the receiving end
of lobbying from them and that is the focus of our interest.
Mr Harris: It was two ways and
it always is with train operating companies. If any train operating
company comes to see me because they want to raise a concern about
rolling stock shortage, for example, I will always use the opportunity
to ask them or to promote the Government's policy to them as well.
I have never from memory been in a situation where there has not
been exchange and where it has only been one way.
Q830 David Heyes: How do you go about
ensuring that you listen to a variety of perspectives and not
just the big strong powerful ones?
Mr Wright: Given the thrust of
the department about locally devolved matters, I am particularly
keen to speak to relatively small scale tenants groups. I think
that is very important and is one of the reasons I go up and down
the country discussing that. I take advice from officials and
I trust the judgment that I get. A big part of my ministerial
box every night is diary engagements and advice as to whether
we should or should not meet with them. I can only think of one
example where officials advised that I should not meet with people
but I said I would like to and that was a transport group, because
I think the importance of housing communities and related infrastructure
about transport is very important. That is when I went against
official advice and said I would like to meet with these people.
Q831 David Heyes: Are you the minister
who is responsible in government for this issue of lobbying?
Mr Watson: I think ministers themselves
have to take personal responsibility for how they conduct themselves.
What underpins our approach to lobbyists is the Ministerial Code.
It is very important that ministers on the subject of access strive
to give a level playing field. There should be no question of
preferential access for different groups. You also have to recognise
that some people carry gravitas, greater weight, greater strength
of knowledge on particular issues, so you have to allow ministers
some flexibility to make a judgment on who comes to see them and
who does not. They should always take advice from officials as
well.
Q832 David Heyes: When our report
is published later this year, whether it is a controversial report
or not—we do not know at this stage what the recommendations
will be—is yours the desk it will land on?
Mr Watson: I suspect it will land
on my desk and others. I have an open mind on where to go next
on some of this stuff so I would read the report with great interest.
Can I also say that from previous experience it usually pays to
listen to the Public Administration Committee. I just have memories
of the MoD.
David Heyes: I think I have just been
lobbied!
Q833 Kelvin Hopkins: I separate in
my mind two kinds of lobbying: lobbying for contracts and lobbying
on policy issues, which is altruistic and I like to think I do
quite a lot of that myself, as a Member of Parliament. If we can
go back to the rail franchises, I am sure Tom is right and within
that box Tom describes everything is absolutely straight. But
something somewhere happens which means that decisions are made
which could be construed as being against the public interest.
South East trains sort of collapsed and it was later run effectively
in the public sector for a time when its performance improved
both as an operating company and also financially. But it was
forced back into the private sector despite the fact that it was
apparently doing a better job for the public than the private
franchisees. Someone somewhere lobbied hard for that to happen.
Presumably it was ATOC[1]
or the TOC[2]
saying we do not want a public sector comparator which shows us
up as not doing a good job. How did that happen? How was that
decision taken and who lobbied you?
Mr Harris: As you know, that happened
long before I was appointed as minister. I would be happy to confirm
this after the meeting but I would be very surprised if any private
sector company would have to lobby on that since having a privatised
railway system, fully privatised without a public sector comparator,
is actually government policy. If it were to remain in public
hands that would be against government policy so I do not think
you needed a private company to lobby in favour of government
policy on the railways in that instance.
Q834 Kelvin Hopkins: Even when it
was evidently in the public interest to keep it in the public
sector and not put it back in the private sector?
Mr Harris: My own view would be
it would not be in the public interest to keep it in the public
sector and the performance of South East Trains has improved since
it went back to the private sector.
Q835 Kelvin Hopkins: Let us take
Jarvis. Jarvis has a pretty appalling record in many respects
and almost went bankrupt at one point. At this point we still
have not found out the whole truth about Potters Bar. Questions
are still being asked and we still want to find out what happened.
That was clearly a Jarvis responsibility and yet Jarvis continues
to get government contracts. What pull does Jarvis have? Who lobbies
you? Who lobbies government on behalf of Jarvis?
Mr Harris: I can honestly say
that I have never been lobbied, as far as I am aware but my published
diary may show this to be different, by Jarvis for any reason
let alone a contract. As far as Potters Bar is concerned, as you
know the Secretary of State has still to make a decision as to
whether there will be a joint public inquiry on Potters Bar and
that decision will be made later this year. I would not want to
go into too many details there but I have never been approached
by a private sector company ever lobbying me for a specific company.
To add to that, the contract that you are referring to would actually
have been let by Railtrack, now Network Rail, rather than by the
Government. The Government does not actually let out contracts
for maintenance or renewals on the railway network. Ministers
do not take those decisions.
Q836 Kelvin Hopkins: I asked a question
of the previous Prime Minister about Jarvis some time ago, I understand
Cabinet was panicking at the time and desperate to keep Jarvis
alive and fed them lots of contracts, but that is another story.
What you say, and what has been said today, suggests that the
real power, influence and decisions take place in a rather mysterious
way not at your level. Things happen which seem to have been influenced
by the private sector and yet for some reason we do not know how
it happened. At your level I am sure everything is straight. It
is rather like having a respectable front, but behind that there
is the "walk in the park". Someone, somewhere is actually
influencing decisions above or away from your level.
Mr Harris: If you forgive me that
is an unnecessarily cynical approach to take to what is a very
robust and effective system. Let us go back to franchising. When
the short-listed companies are actually in the process of having
their bids assessed the key officials who are making the assessment
on whatever grounds, deliverability of rolling stock programmes
or whatever, do not even know which companies they are assessing
because they are all given code names at that stage. They will
be called Tom, Dick and Harry, and Tom may have advantages in
this area and Dick in others. Actually in a paradoxical way the
process has to be less than transparent in order to make sure
it is an absolutely level playing field and no company has any
advantage over the other. In that respect we can have absolute
confidence that it is not lobbying that has resulted in a particular
contract being awarded but actual deliverability and the assessment
of their bid.
Q837 Kelvin Hopkins: I will move
on. There was also the mysterious reason why Midland Mainline
had its franchise taken away when it was apparently the best of
the franchisees.
Mr Harris: Midland Mainline came
to the end of their franchise and there was a new franchise issued
and another company put in a better bid.
Q838 Kelvin Hopkins: You will remember
that I am a member of the Council Housing Group in the House and
we recently had a meeting in this building. I had a very strong
feeling, and forgive me for saying this, that we were something
of an annoyance, an irrelevance, a bit irritating and we were
not going to be taken seriously.
Mr Wright: Absolutely not. I completely
disagree with that.
Q839 Kelvin Hopkins: Not just on
this front but on a whole range of fronts there is a very strong
feeling that there are outsiders and insiders, insiders who have
pull with government and outsiders who do not. Consultants—the
"consultocracy"—big business lobbyists, have much
more pull than backbench MPs, even when there is a substantial
body of parliamentary support for a particular view.
Mr Wright: Let me talk in general
and then talk about that specifically. I go back to one of the
earliest points I made to the Committee today which was that I
will always agree to meet with MPs. With particular regard to
that meeting which was organised by Austin Mitchell, that came
in response to a Report and Third Reading of the Housing and Regeneration
Bill and certainly in terms of the role of local authorities in
the delivery of new houses it is something I am particularly interested
in. It is something where we are trying to remove some disincentives
and barriers so that local authorities do play a greater role
and it is something I am interested in. Maybe it was my presentational
skills but the idea that you are an irrelevance is absolutely
completely wide of the mark, certainly not.
1 Association of Train Operating Companies Back
2
Train Operating Company Back
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