Written evidence from the UK Anti-Corruption Coalition (PGG17)
The Public Administration and Constitutional Affairs Committee
Propriety of governance in light of Greensill inquiry
Introduction and Recommendations
The revelations around Greensill have cast much-needed light on the way in which lobbying works in the UK. It has provided a textbook example of the ways in which those with access to decision-makers may abuse seek to use this for the benefit of private interests, and ultimately personal gain.
However, we urge the Committee to recognise that the only anomaly about this case is how much information has now been placed in the public domain, thanks largely to the diligent work of the media. It has highlighted just how much lobbying is conducted in a way that circumvents legislation and regulations intended to address it.
Transparency, integrity, and accountability are of critical importance to any functioning democratic system, and the UK is no exception. We urgently need reform to the UK’s systems for managing standards in public life, conflicts of interest, the revolving door, and lobbying.
In less than a year’s time, the US is due to host a global Summit for Democracies, with fighting corruption as one of its pillars. If the UK is to show that it is serious about addressing the threat of corruption and play an effective role in supporting democracy around the world, we urge the Committee to take this opportunity to push for long overdue reform.
Recommendations:
Ensuring High Standards and Effective Codes of Conduct
Managing Conflicts of Interest
Managing the Revolving Door
Effective Lobbying Regulation
Answers to Questions 1-4 posed by the Committee
In the light of the above, do the Codes governing the conduct of Ministers, Special Advisers and Officials properly reflect the behaviours we want them to display in this area? How well understood are they by those to whom they apply and how well are they complied with by them?
Codes of Conduct and standards of behaviour
The Seven Principles of Public Life, also known as the Nolan Principles, underpin the conduct of all public-office holders, regardless of level. These principles – integrity, objectivity, selflessness, accountability, openness, honesty, and integrity – have made a significant contribution to the building of positive social norms in the UK’s democratic system since their introduction in 1995.
However, there is growing evidence that these norms are being subverted in a number of ways, such as through attacks on public institutions and accountability mechanisms, the mishandling of allegations of misconduct, and the politicization of public appointments and spending decisions.[1]
The norms embodied in the Nolan Principles are supported to some extent by regulations and oversight mechanisms, forming a complex “patchwork” of codes, laws and conventions.[2] Yet often these regulations are too limited in scope, lack effective sanctions or independence, and are further hindered by a lack of transparency.
Amongst this “patchwork” are the Ministerial Code, Code of Conduct for Special Advisers, and Civil Service Code, tasked with regulating the conduct of each of these groups respectively. In particular, the Ministerial Code and the Code of Conduct for Special Advisers contain problematic weaknesses.
Ministerial Code
While the statutory basis for the management of the Civil Service – including the Civil Service Code and Code of Conduct for Special Advisers – is set out in the Constitutional Reform and Governance Act 2010[3], the Ministerial Code is not on a statutory footing. This is a significant anomaly, particularly since it regulates the conduct of those holding highest office.
Compounding this issue is the lack of any real independent oversight of the conduct of Ministers. Despite longstanding calls for reform, including from senior Conservatives[4], the Independent Adviser on Ministers’ Interests is still unable to initiate investigations into alleged breaches of the Code, depending instead on the Prime Ministers’ direction.[5] If the Prime Minister decides not to investigate alleged breaches of the Code, as has happened with increasing frequency, it could create the perception that members of the executive are above the law – both for the public and Ministers themselves.
It is difficult to gauge how well the Ministerial Code is understood by those who are bound to abide by it, particularly since investigations into alleged breaches are rare and the findings of these investigations are rarely put into the public domain. However, examples of significantly varied approaches to aspects of the Code – for example, the extent to which the financial interests of family members should be declared when looking at the approaches of Rishi Sunak and David Cameron[6] – would suggest that there are inconsistencies regarding how the Code is followed.
The gravest weakness of the Ministerial Code is therefore less to do with the content of the Code itself, but an inconsistency in the ways in which it is interpreted and enforced. There is, however, a concerning gap regarding what contact from lobbyists Ministers are required to disclose; Ministers are not bound to report calls, texts, or emails regarding official business. Although a comprehensive lobbying register would be the most appropriate place to capture this information, the UK’s existing Registrar for Consultant Lobbyists also fails to address this issue.
Code of Conduct for Special Advisers
On the other hand, the Code of Conduct for Special Advisers is far too narrow in scope. While there are transparency obligations surrounding the acceptance of gifts and hospitality, there is no obligation for Special Advisers to publish details of who they meet and for what purpose.[7] Since this information is also not captured by the Registrar for Consultant Lobbyists, the public is left in the dark about the actions of Special Advisers. This is particularly concerning given that Special Advisers, such as Dominic Cummings, can have huge influence over the direction of policy and the actions of the Ministers they serve.
The failure of these systems in relation to Greensill
The Greensill case raises questions about these issues. The Secretary of State for Health and Social Care met with Lex Greensill and David Cameron for “a private drink” in order to discuss a new payment scheme for the NHS in October 2019, as reported by the BBC.[8] However, this meeting was not disclosed in Ministerial meetings data, although the Ministerial Code states that Ministers must tell officials of any official business discussed at social occasions. The Health Secretary insists that he did this and that no wrongdoing occurred.
While it may be the case that no wrongdoing has occurred, the inability of the Independent Adviser on Ministers’ Interests to instigate an investigation means that there is no way to find out if this is indeed true unless the Prime Minister instructs him to investigate. This allows the perception of wrongdoing to corrosively continue if the Minister has indeed conducted himself properly. If he has not, it denies the public accountability from those who govern them.
The Greensill case is, however, only one example of this problem, and arguably not the most egregious that has occurred; analysis from Transparency International UK has found that there were nine alleged breaches of the Ministerial Code in 2020 alone.[9]
Recommendations
How are potential conflicts of interest of current and former Ministers, Special Advisors and Officials identified and managed and how effective is this? Are there gaps in the current system?
The systems in place to identify and manage conflicts of interest in the UK Government
There are several reasons why conflicts of interest must be effectively managed. They may lead to the undue influence of particular interests to the exclusion of others, even to the extent of becoming regulatory capture, for policy decisions to become vehicles for personal enrichment instead of the public good, or even lead to the abuse of office. Each of these issues is detrimental for UK democracy, weighting decisions in favour of those with political access at the expense of the broader public interest.
Despite this, the current system for identifying and managing conflicts of interest among current and former Ministers, Special Advisors, and Officials is not effective in practice, with the rules are inconsistently applied across Government.
In the Ministerial Code, General Principle 7.1 states that, “Ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise.”[10] This responsibility extends beyond their time in office, with Ministers to be prohibited from lobbying Government for two years. Of the three codes, the Ministerial Code is the most extensive and specific regarding obligations and procedure. Ministers are expected to provide a full list in writing of all interests which may give rise to a conflict, including those of their spouse or partner and close family. If necessary, the Minister will meet with will meet with the Permanent Secretary and Independent Adviser on Ministerial Interests to agree action on how to handle interests, with the action taken recorded and a copy provide to the Permanent Secretary and Independent Adviser on Ministerial Interests respectively. This information will be treated in confidence, however a statement covering Ministers’ interests will be published twice each year. Ministers should declare and recuse themselves from any decisions in which their private interests could impact decision-making.
The Civil Service Code outlines certain standards of behaviour in line with its core values: integrity, honesty, objectivity, and impartiality. Under integrity, the code outlines that civil servants must not “misuse your official position, for example by using information acquired in the course of your official duties to further your private interests or those of others”, while also making reference to not being improperly influenced, taking decisions on the merits of each case, and not acting in a way that unjustifiably favours or discriminates against certain individuals or interests under the other values.[11] Each department or agency has a duty to make civil servants aware of the Code and its values.
The Code of Conduct for Special Advisers lacks any substantial conflicts of interest policy, although Advisers are required to “declare details of gifts and hospitality received in accordance with the rules set out in their departmental staff handbooks.”[12]
Significantly, the conduct or conflicts of interest of unpaid advisors and Crown Representatives are not regulated by any of the above codes.
The failure of these systems in relation to Greensill
One of the most significant issues relating to the events surrounding Greensill Capital and conflicts of interest relate to Lex Greensill himself. It has been widely reported that he was brought in to work as an unpaid adviser to the Government in January 2012, during David Cameron’s tenure as Prime Minister. As outlined by Darren Tierney, the Director General of Propriety and Ethics in the Cabinet Office during evidence to this Committee, he worked in this capacity until 2015, also becoming a Crown Representative in 2013 until leaving the Cabinet Office in 2016.[13]
During this time, Greensill Capital is incorporated (on 19 April 2012), with Lex Greensill as its Director. In October of the same year, Prime Minister David Cameron announces that the government supports Greensill’s initiative to encourage large companies to use supply chain finance (SCF) to enable their suppliers to access low-cost credit.[14] Despite obtaining a security pass for the Cabinet Office and Downing Street, officials stated that he was neither a civil servant nor a special adviser. No contract is available for his employment between 2012 and 2015.[15] Simon Case, the Cabinet Secretary and Head of the Civil Service, stated that he did not think this was appropriate and that he could not explain the lack of documentation during evidence to this Committee.
Three issues arise in relation to these revelations. Firstly, it is deeply inappropriate that an unpaid adviser was able to gain such significant access to government departments, particularly given the way this was used to promote Lex Greensill’s private interests and abused, for example, through the use of business cards stating that he acted as a senior adviser to the then Prime Minister.[16] This is particularly concerning given that there is no code of conduct governing the actions of either unpaid advisors or Crown Representatives. With Bill Crothers also working as a Crown Representative, there should be closer scrutiny of whether these roles contribute to the undue influence of certain interests in policymaking.
Secondly, as noted in the Cabinet Secretary’s evidence to the Committee, an unknown number of other individuals have been given roles as unpaid advisers to government. This points to a broader issue, whereby too little information is collected and published regarding the private interests of those involved in the policy making process. For example, although information on Minister’s financial interests is due to be published twice per year, this information has not been published since July 2020.[17] These issues are compounded by the weaknesses of the Business Appointment Rules and ACoBA, which will be discussed in more detail in the next section.
Lastly, it is significant that, even if Lex Greensill had been employed as a Special Adviser, he would have been under no obligation to declare any conflicts of interest according to the Code of Conduct for Special Advisers. Given the influence that Special Advisers can have over policy and their extensive access to areas of government, this seems like a glaring omission.
Recommendations
Is the scope of the Business Appointment Rules broad enough? Do the Rules apply to all those to whom they should? Is ACOBA’s application of the Business Appointment Rules sufficiently effective and robust?
At present, the Business Appointment rules are too narrow in scope and the Advisory Committee on Business Appointments (ACoBA) lacks the powers, sanctions and resources needed to make it a robust and effective regulator of the revolving door.
The Business Appointment Rules for Civil Servants state that senior civil servants must seek approval from ACoBA for new roles for two years after their last day of paid employment with the civil service. Ministers must also seek ACoBA’s approval during the two-year period after leaving office.
One of the fundamental problems with ACoBA is that it is advisory. Although Ministers and senior officials are required to apply to it for advice on new roles, it can and has been ignored. ACoBA remains under-resourced and lacks the legal clout needed to enforce its decisions, never mind investigate potential breaches of the Business Appointment Rules. Its remit is also too narrow in scope, tasked with reviewing the future work of Ministers and only the most senior civil servants for two years after the end of their employment. In contrast, the rules in the US form part of the contractual obligations of those working in the Biden Administration and take a risk-based approach to the level of regulation required for different roles.[18]
While we certainly welcome that the current Chair of ACoBA has been taking a stronger tone in responding to breaches of the rules, these warnings can be all too easily dismissed without the necessary sanctions in place to deter wrongdoing. This Committee referred to ACoBA as a “toothless regulator”[19] nearly ten years ago and we endorse that conclusion. Replacing ACoBA with a new statutory body is long overdue.
More junior roles within the civil service require approval for new roles from their own department for one year after leaving. However, enforcement has been shown to be lacking – a National Audit Office investigation from 2017 outlined that the approach to implementing the rules varies widely among departments and that there was no oversight from the Cabinet Office to ensure that standards were being maintained. Of the eight departments investigated, only one consistently informed prospective employers of conditions attached to a business appointment approval, as required by the rules. Only one department had set out and communicated to staff measures for dealing with non-compliance. No department had assurance that former civil servants remained compliant with the rules for up to two years after they have left public service. Four departments approved retrospective business appointment applications, which the rules state will not normally be accepted[20].
The failure of these systems in relation to Greensill
The movement of Bill Crothers from the civil service to Greensill Capital perfectly demonstrates these problems. While still employed as the UK Government’s Chief Commercial Officer, he became a part-time advisor to Greensill Capital in September 2015, approved by the Cabinet Office at the time. This is particularly concerning given the public procurement brief of this role, widely held as the number one corruption risk countries across the world face and one in which conflicts of interest should be managed with great care.[21] In the same month, he incorporated his own firm.[22] By November 2015 he had left the civil service, taking up a position as a Director of Greensill Capital in August 2016.
Despite his obligation under the Business Appointment Rules, Bill Crothers did not seek approval from ACoBA for his new position at Greensill, despite seeking approval for other advisory positions with Salesforce.com and Green Park in 2016 and 2017 respectively.[23] He notes in a letter to ACoBA that this was because he had already received approval from the Cabinet Office for his advisory role while employed as a civil servant and was told he would not need to apply to ACoBA.[24] That ACoBA was unable to pick up on this contravention of the Business Appointment Rules at the time is testament to the problem posed by its lack of investigative capacity. This, in turn, leads to an inconsistency in how the rules are applied.
Significantly, Bill Crothers noted that, “this advisory role was not seen as contentious, and I believe not uncommon.”[25] He further stresses that Greensill was a small business and “not viewed as a contentious company”, further adding that it had no business with the UK Public Sector.[26] Lex Greensill was, however, at this time already a Crown Representative and Greensill did go on to later win a public contract with NHSX for its Earnd app. It is likely that its connections with key decision-makers assisted them in this endeavour. In further correspondence, ACoBA outlined that Bill Crothers should have sought approval had the role changed substantially from when approval by the Cabinet Office was first given.[27] Most would argue that it indeed had.
Despite being publicly chastised by ACoBA for his failure to seek its approval, that is the extent to which ACoBA is empowered to sanction Bill Crothers, or anyone else, for breaches of the rules. ACoBA needs to be able to take meaningful action if it is to act in any way as a credible and authoritative deterrent against the revolving door in UK politics.
Recommendations
How should lobbying activity be regulated? How far does the Lobbying Act provide an effective statutory basis for the regulation of lobbying? Are the scope and remit of the Registrar of Consultant Lobbyists adequate? Are key aspects of lobbying omitted and, if so, how can they be addressed?
The Lobbying Act fails to regulate lobbying of the UK Parliament and Government in any meaningful way; the Registrar of Consultant Lobbyists capturing a mere fraction of the actual lobbying that occurs, while Ministerial meetings data lacking any meaningful information about the content of discussions and too often published late or with inaccuracies.
The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014 was criticised at the time of its passing as a half-measure approach to tackling lobbying in the UK. One of the most significant issues with the Act and the lobbying register lies in its sole focus on consultant lobbyists, to the exclusion of all those working on lobbying in-house. In doing so, it automatically obscures swathes of interactions between lobbyists and policymakers from view.
Research from Transparency International UK’s 2015 report Accountable Influence found a mere 96 consultant lobbyists on the register, despite there being an estimated 4000 people working as professional lobbyists in the UK and 2,735 meetings held between UK Ministers and lobbyists during the most recent quarterly data when the research was carried out.[28] This approach to lobbying is uniquely narrow amongst similar Western democracies, with in-house lobbyists included in the scope of lobbying legislation in the US, Canada, Ireland, and Scotland.[29]
A second issue is the scope of communications included within the Act. While the Act covers both oral and written communications, the details of these are not reported in returns. Moreover, the Act lacks clarity over what these communications entail. In contrast, both Ireland and Canada’s lobbying acts explicitly state that electronic communications should be included within the scope and stipulate that this information is reported in detail.
Another two areas where the UK’s lobbying legislation is uniquely deficient among similar Western democracies is the scope of public officials included in lobbying legislation. In the UK, the Lobbying Act only applies to members of the Executive, while in the US, Canada, Ireland, and Scotland members of the legislature and special advisors are also within scope.[30]
The failure of these systems in relation to Greensill
The conduct of David Cameron in particular shows how ineffective the UK’s current lobbying rules are when it comes to capturing the ways in which senior officials and Ministers are lobbied.
Via text and email, the former Prime Minister contacted the Bank of England Deputy Governor, the Treasury’s Permanent Secretary, the head of NHSX (the digital arm of the NHS), the Chancellor of the Exchequer, the Economic Secretary to the Treasury, and the Financial Secretary to the Treasury. Given the scope of the Lobbying Act, none of this would have to be disclosed.
Further evidence of the use of WhatsApp and other messaging services for lobbying include the widely published messages sent by James Dyson to the Prime Minister, requesting an alteration to rules that the Prime Minister assured him he could deliver.[31] Such interactions are problematic because they are both opaque and exclusive, allowing those with the phone numbers of Ministers privileged access.
Even more conceringly, not one of David Cameron’s interactions with officials – regardless of format – would need to be disclosed, nor would the interactions of any of his Greensill colleagues. This is because he worked as an in-house lobbyist for Greensill rather than as a consultant lobbyist for a dedicated communications firm. No businesses, charities, or organisations are required to declare their interactions in the register unless they conduct these meetings through a consultant lobbyist, regardless of how frequently they meet with policymakers.
We know from Ministerial meetings data that Greensill met the Second Permanent Secretary five times during the space of little more than two months, from April 24 2020 to 26 June 2020, yet these meetings were only described as “Discussion of Eligibility for Covid Support Packages.”[32] These descriptions are wholly insufficient for helping the public understand the context of what was discussed, particularly in light of the details revealed by the media. This is deeply problematic given that these meetings disclosures are intended to form the basis of the UK’s lobbying transparency regime.
While there has been some suggestion that increasing the amount of information included in Ministerial meetings data could address some of these transparency gaps, we do not agree with this position, not least due to the existing problems with the timeliness and quality of these disclosures. However, there is also a more fundamental reason for why this is not the best solution; put simply, lobbyists know best what they are lobbying officials or Ministers about, and the onus should be on them to disclose this. It is hard to accept that this would be overly burdensome or in any way limit the participation of external actors in the policymaking process, given that it is common practice in similar Western democracies.
Recommendations
May 2021
12
[1] For more information, see UK Anti-Corruption Coalition, Submission to the Committee on Standards in Public Life Standards Matter 2 Review, January 2020.
[2] Heywood, P.M. 2012. “Integrity management and the public service ethos in the UK: patchwork quilt or threadbare blanket?”, International Review of Administrative Sciences 78(3): 474-493.
[3] Constitutional Reform and Governance Act 2010, Section 3.
[4] See spoken contributions from John Penrose MP, the Prime Minister’s Anti-Corruption Champion, and Sir Bernard Jenkin MP, Chair of the Liaison Committee in the following debate: House of Commons, Ministerial Code, 26 April 2021.
[5] The new Terms of Reference fail to provide this power. See Cabinet Office, Terms of Reference for the Independent Adviser on Ministers’ Interests, 28 April 2020.
[6] https://www.theguardian.com/politics/2020/nov/27/huge-wealth-of-sunaks-family-not-declared-in-ministerial-register
[7] Cabinet Office, Code of Conduct for Special Advisers, December 2016.
[8] BBC News, ‘Matt Hancock ‘had private drink’ with David Cameron and Lex Greensill’, 11 April 2021.
[9] Please refer to the evidence submitted to the Committee by Transparency International UK, one of the members of the UK Anti-Corruption Coalition.
[10] Cabinet Office, Ministerial Code, August 2019. Paragraph 7.1, p.16.
[11] Civil Service, The Civil Service Code, March 2015.
[12] Cabinet Office, Code of Conduct for Special Advisers, December 2016, Paragraph 15.
[13] PACAC, Oral evidence: The work of the Cabinet Office, HC 118, 26 April 2011.
[15] PACAC, Oral evidence: The work of the Cabinet Office, HC 118, 26 April 2011.
[16] The Guardian, ‘Business card puts Greensill founder at the heart of Downing Street’, 30 March 2021.
[17] Cabinet Office, List of Ministers’ Interests, July 2020.
[18]US Executive Order on Ethics, introduced 20 January 2021
[19] Civil Service World, ‘PACAC to relaunch inquiry into ‘toothless regulator’ of Whitehall revolving door’, 26 January 2018.
[20] National Audit Office, Investigation into Government’s Management of the Business Appointment Rules, 19 July 2017.
[21] ; OECD, Preventing Corruption in Public Procurement, 2016
[22] Companies House filing available here.
[23] Correspondence between ACoBA and Bill Crothers available here, here, and here.
[24] Letter from Alex Chisholm to Lord Pickles re Bill Crothers, 12 April 2021.
[25] Letter from Bill Crothers to Lord Pickles, 9 April 2021
[26] Ibid.
[27] Letter from Alex Chisholm to Lord Pickles regarding Bill Crothers, 12 April 2021
[28] Transparency International UK, Accountable Influence, 2015.
[29] Irish Regulation of Lobbying Act 2015, Section 5(1) and 5(2) ; Canadian Lobbying Act 2008, Sections 5 and 7; US Lobbying Disclosure Act of 1995, Section 3; Scottish Lobbying Act 2016, Section 1.
[30] Irish Regulation of Lobbying Act 2015, Section 6 ; Canadian Lobbying Act 2008, Sections 2; US Lobbying Disclosure Act of 1995, Section 3; Scottish Lobbying Act 2016, Section 1.
[31] BBC News, ‘Dyson lobbying row: Labour calls for probe into PM texts’, 22 April 2021.
[32] HM Treasury, Permanent Secretaries’ meetings – April to June 2020, 17 February 2021.