Hacker House

(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport if she will make a statement on payments made by her Department to Hacker House, and on how her Department manages possible conflicts of interest.

I thank the hon. Lady for raising this question today. I am answering it because it is part of my portfolio.

As hon. Members may know, the Department runs a programme known as the cyber-security immediate impact fund. It is one of a range of programmes designed to increase the number and diversity of people who pursue careers in the cyber-security profession. Through the fund, we want to support new, creative and innovative projects that are delivered by a range of organisations, including start-ups and small and medium-sized enterprises.

We have supported a variety of initiatives, awarding grants of between £20,000 and £500,000 since March 2018. Hacker House is one of the businesses that was awarded a £100,000 grant in February 2019 as part of our second funding round. To date, it has been paid around £47,000 for work completed. The grant was awarded by officials from DCMS, the Department for Education, techUK and, indeed, people from the National Cyber Security Centre. If the hon. Member for Oxford West and Abingdon (Layla Moran) wishes to impugn the motives of those officials, I invite her to think carefully before she does so.

To date, we have awarded 11 companies grants to deliver 12 initiatives. More than 400 people have benefited from support through the fund. Our objective is that even more people will benefit as the businesses with which we partner further invest in a sector that I know the hon. Lady agrees is vital to the future of our security and our economy. That is part of our mission as a Department to identify untapped talent and help a broader range of individuals who have the capabilities and aptitude to develop their careers in cyber-security. I assure the House that all grants are awarded through an open, transparent and competitive process. Each grant is judged on specific assessment criteria and is approved by the panel I referred to earlier, with cross-departmental and industry representation. We are, of course, aware of the claims raised recently by The Sunday Times, and the Department is reviewing the decision that was taken, but we monitor all initiatives that have been awarded grant funding and we treat any allegations of impropriety with the utmost seriousness. As soon as I have any further information to share on this matter, I will, of course, update the House at the earliest possible opportunity.

I thank the Minister for his reply. I should make it clear that I care very little about the personal life of the Prime Minister, but I care a lot about how this Government manage conflicts of interest and how they spend taxpayers’ money. On that basis, I am concerned that the Department appears to have given Hacker House a £100,000 grant in January 2019 as part of the cyber skills immediate impact fund, a grant that was open to initiatives based in, and that operate from, Britain. Furthermore, these grants should not exceed 50% of the company’s revenue.

We now know that Hacker House is not based in the UK. The Sunday Times reports that its owner, Jennifer Arcuri, moved back to the USA in June 2018. The grants were not open for application until November. The registered address of the company is in fact a house in Cheshire that she used to rent, and the current occupant apparently sends any post addressed to Ms Arcuri back to the sender.

Where is the due diligence? What steps did the Department take to ensure that Hacker House was indeed based in and operating in the UK? Why did officials waive the rule that the grants could not exceed 50% of the company’s collective income? How many of the other companies that we now find have had these grants have had this kind of preferential treatment? Did the Prime Minister, then a Back Bencher, make any representations, official or otherwise, to the Department recommending Hacker House for the funding? The Department says that it will investigate the award of the grant, but will the Minister tell us when will that review conclude and will it be made fully public?

The misuse of public funds and conflicts of interest in relation to Ms Arcuri run deeper than just this matter. I appreciate that the Minister will not be able to speak for the actions of the Prime Minister when he was the Mayor of London, but would he, on behalf of the Government and the Prime Minister, ensure that all Departments fully co-operate with the investigation being launched by the London Assembly’s oversight committee into how the Mayor’s office handled conflicts of interest?

I want to start by saying that the Prime Minister and his staff have had absolutely no role in the award of this grant; I suspect I will be saying that a number of times, but it will remain the case.

In answer to the hon. Lady’s other questions, the review will report by the end of next month, and I have said that I will update the House where necessary. Of course, we will fully co-operate with any other inquiry. She raises the matter of the match funding of 50%. The officials involved in awarding such grants scored the application very highly in all other aspects; as they routinely do in a number of other situations, they decided that the other aspects more than outweighed that particular criterion.

On the question of where the company is based, the officials have done the usual due diligence on the company. The hon. Lady herself mentioned the address where it is based. It will, of course, be a part of the review that we are doing, but, as I say, this is a company that is based in Britain as far as Companies House is concerned. It is a company with a British phone number. We will review that, but we have no reason to think that there is anything untoward in this particular matter.

Finally, to address the range of issues that the hon. Lady raised at the end of her question, if she wants to raise matters about a grant that was awarded by officials through the proper process, this is of course a completely legitimate forum for her to do so. If she wants to use this opportunity to try to spread tittle-tattle that is much more about politics, she should think very carefully before doing so.

I welcome what the Minister said about the review being conducted in the Department. He will know that the Secretary of State is due to give evidence to the Select Committee on Digital, Culture, Media and Sport on 16 October. Will he or the Secretary of State write to the Select Committee before then with an update on the terms of reference for the review and the results of the review so far, as well as the details of other awards made to other companies and how much was given under the same scheme?

I thank the Chair of the Select Committee for that question. My right hon. Friend the Secretary of State assures me that we are more than happy to write to his Committee. Of course, the awards that were made to other companies are no secret. A press release was put out about these things. We are of course happy to provide him with more details of that.

I welcome the Minister to his new role, and I thank the hon. Member for Oxford West and Abingdon (Layla Moran) for her forensic questioning this morning. This company, Hacker House, got a grant of £100,000. I have looked at the stated aim of the fund, and it says that it is

“to increase the diversity and numbers of those working in the UK’s booming cyber security sector”

and

“developing a sustainable supply of home-grown cyber security talent”.

As I understand it, Hacker House is a company headquartered in California and the principal owners of the company live in the United States. The company claims to have employees in London, but refuses to reveal who they are or where they are.

It is very difficult to see how the company fulfilled the criteria for these grants, so will the Minister explain to us how Hacker House did so? Was the connection with the then Foreign Secretary, or any other MP in this House, declared when the application was made? Will all applications and paperwork relating to the Hacker House grant now be published in the Library or made available for public scrutiny? Did any MPs lobby on behalf of the company in regard to this or other grants granted by Government Departments?

The broader questions that the Minister has alluded to need answering, because they keep coming back to the current Prime Minister. The issue of whether he has represented the interests of the company or other companies requires scrutiny, as the Chair of the Digital, Culture, Media and Sport Committee alluded to. This is fundamentally a question of character and of suitability. Is the Prime Minister of sufficient character to occupy high office and disburse public funds? Is he suitable? Does he understand that the trappings and privileges of power come with restrictions and restraints? Is he capable of restraining himself?

The hon. Gentleman said that it was a pleasure to see me in my place, and it is a pleasure to see him still in his, although I am not sure how many of his hon. Friends share that view.

I am, of course, happy to repeat what I said before. The Prime Minister has had no role whatsoever in this application, and it is, I think, important to bear in mind that this is a decision made by officials, including people from the National Cyber Security Centre, the Department for Education and the Department for Digital, Culture, Media and Sport. These are honourable people doing the right thing, and their reputation should not be impugned in the way the hon. Gentleman seeks to impugn it.

I have said that there was no lobbying, from either the Prime Minister or any other Member of Parliament, and we will seek to make public the bid submitted by Hacker House—I have it here—so long as there are no commercial sensitivities. The aim of the cyber skills immediate impact fund is to build our strength and depth in what is, as I know the hon. Gentleman will agree, a vital area. The Hacker House bid seeks to train people and to build a platform to train more people. That platform has already been built. He can check it out online for himself—he could even sign up—and we will seek to ensure it reaches hundreds of people. That is part of the bid and an important part of this country’s national cyber-security strategy. I would have hoped that he would have supported it, rather than raise a whole host of issues that are not relevant to this question.

I congratulate my hon. Friend on the assumption of his office. I quite agree that the cyber skills immediate impact fund is a crucial driver for Britain to upweight its skills in this vital and growing area. I commend the DCMS officials and those at the National Cyber Security Centre who have managed this fund, but I ask him to look closely at its performance in relation to the grant given to Hacker House in the light of the information shared with the House by the hon. Member for Oxford West and Abingdon. Close scrutiny of what it is doing with the money is of paramount importance.

I pay tribute to the hon. Lady for her work as my predecessor. It is an honour to follow her at the Dispatch Box. She is completely right. She will know that we as a Department routinely talk to those in receipt of grants and ensure as much oversight as possible, and that process will continue. As I have said, there is a review into this particular grant to make sure it delivers maximum value for money for the taxpayer.

I too welcome the Minister to his place. I wonder if when he was discussing accepting the job he knew he would be doing the Prime Minister’s bidding in cleaning up his mess.

It is fair to thank and to pay tribute to the bravery and determination of those who fought through the courts to ensure we could be back here today and able to hold the Government to account: my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry), Gina Miller and Jo Maugham of the Good Law Project. We thank and salute them.

The blame and bluster that has come out of this Government over this issue and the matter of what happened in the Supreme Court is outrageous. The Prime Minister is under significant pressure to declare what interests and relationship he had with Jennifer Arcuri. There is no disputing that the work is important—I agree with the Minister on that—but, despite what he says about other Members impugning her character, in reality it is the Prime Minister who is impugning her character because of the lack of transparency and his unwillingness to answer questions about their relationship.

The Minister will be aware that Hacker House received £100,000 from the DCMS. Members have already raised the matter of where that business is domiciled. Given the huge amount of public money spent, does he think it appropriate that his Department is investigating itself in those discussions and in that process? I would suggest that that is highly inappropriate and that there should be an independent—

Order. I am extremely grateful to the hon. Lady, but she has exceeded her time by 50% already, so that’s the end of that I’m afraid.

I am glad that the hon. Lady welcomes the importance of this work. This process, like all Government grant-giving processes, is conducted in a transparent way. The review will not be the Department marking its own homework, and as I said, we will put any further updates to the House as they become available, which will be by the end of next month.

I understand that Ms Arcuri’s mother has described the Prime Minister as her daughter’s sponsor? What kind of sponsorship does he provide?

I struggle to see how that question is directly relevant to the one that I am here to answer, but I would say, as I have said before—[Interruption.] I am not here to answer for anyone’s mother. As I have said before, the Prime Minister had no role whatsoever in the application, but none the less we are reviewing the process.

I welcome my hon. Friend to his place. I also welcome the support he is providing to small and medium-sized enterprises in this area. Can he confirm that clear criteria are applied in the awarding of these grants and that grants are made on the basis of a business case and adherence to those criteria? Does he agree that Opposition Members should probably learn from the past and suspend making wild allegations until a proper review has taken place?

I thank my hon. Friend for his kind words. He is absolutely right that supporting SMEs in such a sector is particularly important. It is something we will continue to do. On the process, I referred to the bid earlier. I have the form here—several dozen pages—that must be provided to access Government funding. That is right and proper. He is right also that we should all shy away from making unsubstantiated allegations.