Ministerial Appointments: Vetting and Managing Conflicts of Interest

Before we come to the urgent question, I remind right hon. and hon. Members that, while it is perfectly in order to ask questions about the vetting arrangements for Ministers and the processes in place for managing conflicts of interest, this is not a substantive motion about the conduct of any Member. It is therefore not in order to make personal criticism of any right hon. or hon. Member.

(Urgent Question): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on his Department’s processes for vetting ministerial appointments and managing conflicts of interest.

I thank the right hon. Lady for her question, to which it is a pleasure to respond.

To start with ministerial appointments, appointments made to His Majesty’s Government are a matter solely for the Prime Minister in line with his constitutional position as the Sovereign’s principal adviser and the head of the Government. It is for the Prime Minister to recommend individuals for appointment. In considering potential appointments, the Prime Minister may receive advice from the civil service on matters of propriety and potential conflicts of interest. The civil service has no role in approving or vetoing appointments as appointments are a matter for the Prime Minister. It would not be appropriate for me to comment further on the advice that may be given during the appointments process.

It is critical that all Prime Ministers are able to receive advice in confidence. I would not want to do anything to erode that ability. Once an appointment is made, the process for the management of conflicts of interest and potential conflicts is clear and robust, and follows the processes set out in the ministerial code. It is the responsibility of all Ministers to ensure that no conflict arises, or could reasonably be perceived to arise, between their role and their private interests, financial or otherwise. That is ultimately incumbent on the individual and it is clearly set out in the ministerial code. Ministers should declare and manage potential conflicts of interest, working with their permanent secretary and the independent adviser on Ministers’ interests. They are under an ongoing duty to further declare relevant changes to their interests.

Hon. Members will be aware that the Prime Minister has appointed Sir Laurie Magnus as his independent adviser on Ministers’ interests. Sir Laurie will be taking forward the work on the declaration of Ministers’ interests in line with his published terms of reference. As the Prime Minister confirmed this morning, the independent adviser will also be conducting an investigation to establish the facts surrounding the matters concerning my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) that have been subject to media reports over the weekend. I know that Sir Laurie will bring integrity and rigour to the role of independent adviser and the outcome of his work will be made public in due course.

Thank you, Mr Speaker, for granting this urgent question. We may have a carousel of Ministers, but it is the same old excuses every single time. Reports that the then Chancellor of the Exchequer agreed a settlement with HMRC, including a penalty, raise serious concerns about not just that case but standards in this entire Government. Can the Minister tell us if the vetting process raised flags to the former Prime Minister about the original appointment and when exactly did the current Prime Minister know? Does he know if and how this conflict of interest was managed, and why was it kept secret? Is there no system in place to prevent a person being actively investigated for unpaid tax from being appointed to run the UK’s tax system? Maybe it is that absurd that no one would ever think it would happen. While we understand the confidentiality of the honours process, surely where a serving Minister is blocked, there is an overwhelming case for sounding the alarm. So did that happen and where is the report? If not, why is there a lower bar to get into this Cabinet than there is to get a knighthood?

No. 10 apparently still does not know if other Ministers are in dispute over their own taxes, so what is the Prime Minister doing about it? Last week, he told the House that all questions had been answered and he was told there were no outstanding issues, yet now the independent adviser is investigating. So will he publish the terms of reference, and why does the Prime Minister need an adviser to tell him that this conduct is unethical? If this is not a breach of the ministerial code, surely the code itself is wrong and it is the Prime Minister’s job to fix it.

If the Prime Minister came clean about what he knew and when, and took responsibility for the conduct of his own Cabinet, would we need yet another investigation into another member of his top team? Even now, No. 10 says that the party chair retains the Prime Minister’s full confidence. How can the Prime Minister claim to deliver the integrity, professionalism and accountability that he promised while his Conservative party chair still sits in his Cabinet?

We follow a proper process under the ministerial code. Interests are required to be declared. They are required to be shared through the ministerial code process and discussed with permanent secretaries. I am absolutely confident that the usual process will have been followed in the appointment process by this Prime Minister for my right hon. Friend the Member for Stratford- on-Avon (Nadhim Zahawi). If there are issues to be raised in respect of historic activities, as was suggested by the weekend’s press, that is a matter for the independent adviser to look at. The summary of his findings will be published in due course. Integrity and accountability are critical, as is professionalism, and the Government will wait and hear the facts before taking decisions based on those facts. The right hon. Lady would do well to do the same.

It is a great shame that the processes of the propriety and ethics team of our civil service are being called into disrepute by the comments of the right hon. Member for Ashton-under-Lyne (Angela Rayner). We have to accept in public life that there are times when you may be asked to serve in government. When you go through that process, you are required, rightly, to disclose absolutely everything that might cause conflict with you being a Minister of the Crown. Does my right hon. Friend agree that that process can survive only when there is both confidentiality about disclosures and tolerance on all sides while that process is completed?

I thank my hon. Friend for what he said. He is absolutely right. For people being called into government, there is a proper process and there is a requirement for full disclosure. For that process to continue to be meaningful and to work for decades into the future, we need to retain confidentiality. That has to be part of it and the right way forward when an issue has been raised is for the independent adviser to look into it, as he is doing.

I call the SNP spokesperson.

Here is what we know about the appointment of the BBC chair. The BBC chair Richard Sharp helped to arrange a £600,000 loan for the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), weeks before he was chosen by the former Prime Minister to become BBC chair. Mr Sharp appeared before the Digital, Culture, Media and Sport Committee, on which I sit. We grilled him about his £400,000 gift to the Conservative party. However, he did not disclose his role in getting the man appointing him a huge loan. Mr Sharp, the former Prime Minister and the cousin offering the loan dined together at Chequers pre-loan and pre-appointment—and the former Prime Minister’s spokesperson says, “So what? Big deal.”

The Cabinet Office ethics team told the former Prime Minister to stop talking to Mr Sharp about his finances. Ministers told other applicants not to waste their time applying; the appointment was to go to the friend of the right hon. Member for Uxbridge and South Ruislip, the Tory donor. Even by the grubby standards of this Government, it is all a bit banana republic, is it not?

I thank the hon. Gentleman for his question. As he knows, there was a very robust process in place for the appointment of the chairman of the BBC, including a pre-appointment hearing. I read the transcript this morning, in which he played his usual prominent role in grilling the appointee, pre-appointment. It was an incredibly robust process, with an independent panel of five members going through that process. To reassure the House, I understand that the Commissioner for Public Appointments is going to double-check that that process was absolutely consistent with the proper governance expected of these appointments. I know that the chairman of the BBC has invited the BBC’s senior non-executive director to discuss the matter with the board to make certain that all relevant conflicts of interest were properly disclosed. So there are two processes ongoing. But this was a very robust process.

I am astonished, though I should not be, at the brass neck of the shadow Leader of the Opposition in suggesting that the Prime Minister did not need to ask his independent adviser about the matter when the Opposition spent months calling for an independent adviser to be appointed. Is my right hon. Friend the Minister aware of any plans that the independent adviser has to publish an updated list of ministerial interests?

My hon. Friend is absolutely right. Opposition Members have been calling for an independent adviser for months. When one is appointed, it is not good enough; then they say that the Government should take all decisions by themselves, without all the facts. It is useful to have an independent adviser to deal with these issues when appropriate. I reassure my hon. Friend that my understanding is that the independent adviser plans to issue a publication on ministerial interests before his report in May.

The Public Administration and Constitutional Affairs Committee, of which I am a member, is ready to help, and looks forward to meeting the new ethics adviser. The Prime Minister has said that there are questions to be answered. The Minister has been very careful to say that declaring interests under the ministerial code is up to the individual, which is correct. Did the Prime Minister know that the right hon. Member for Stratford-on-Avon (Nadhim Zahawi) was due to be investigated?

The usual appointment process was undertaken, so the Prime Minister will have had the benefit of full disclosure of the interests that my right hon. Friend the Member for Stratford-on-Avon declared when the Prime Minister appointed him chair of the Conservative party.

The Prime Minister correctly asked his independent adviser on ministers’ interests to establish the facts. Does my right hon. Friend agree that we must not prejudge the outcome, and should allow the process to conclude?

I agree. That is the purpose of having an independent adviser. He has been asked to investigate, and to work out exactly what the facts are. It would be ill-judged to make a decision before knowing all the facts that pertain.