Donorgate
The Chancellor seems to have broken the Ministerial Code. The Government needs to get ahead of this - come clean, make more Spads, and launch an investigation. Otherwise things will keep getting worse
In 2021 Rachel Reeves, then shadow Chancellor of the Duchy of Lancaster stood up in Parliament to quote from the (then) Foreword of the Ministerial Code:
‘“There must be….no misuse of taxpayer money and no actual or perceived conflicts of interest.”’
She went on to say:
‘Those words are from the Prime Minister’s [Boris Johnson’s] foreword to the ministerial code. I do not know whether he believed them when he wrote them, but he is certainly trampling all over them today. The Prime Minister is now corrupting the standards of public life expected in high office as he dodges questions.
How times have changed.
Now it is a Labour Government embroiled in a cronyism row over taxpayers’ money and political donations, refusing to give clear answers to basic questions, and accused of corrupting the standards of public life.
Keir Starmer has not even had time to write a foreword to his version of the Ministerial Code. The only document online today is Rishi Sunak’s Code.
Donorgate
Two weeks ago, I asked a series of questions about the Chancellor’s appointment of her donor, Ian Corfield, to HM Treasury.
I also speculated about whether Reeves could have breached the Ministerial Code. It now looks as if she has, potentially in multiple ways.
The Times has today reported that Rachel ‘Reeves did not inform senior Treasury officials of a donation made to her in opposition by a banker who was also appointed as a senior civil servant’.
It continues to say that Mr Corfield’s job:
‘which was not subject to open contract, had to be explicitly approved by the Civil Service Commission, which vets Whitehall appointments.
‘The commission was not told about the donation and government sources said James Bowler, the permanent secretary in the department [ie HM Treasury], was also unaware of it’.
This is very serious.
What does the code say?
The Ministerial Code is quite strict about conflicts of interest:
7.1 ‘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.’
We know that a conflict of interest could be perceived to arise between a private interest (Mr Corfield donating to Rachel Reeves) and her public duties (as Chancellor, he was employed by her department).
And:
7.2 ‘It is the personal responsibility of each Minister to decide whether and what action is needed to avoid a conflict or the perception of a conflict, taking account of advice received from their Permanent Secretary and the Independent Adviser on Ministers’ interests’.
We know from the Times that Reeves did not take advice from her Permanent Secretary, nor did she inform the Civil Service Commission that she was seeking to appoint a donor. It does not seem she has taken action to avoid the perception of a conflict of interest, nor taken any advice.
The code also says:
7.3 ‘On appointment to each new office, Ministers must provide their Permanent Secretary with a full list in writing of all interests which might be thought to give rise to a conflict’.
We know from The Times that this did not include Mr Corfield’s donation. It was not, therefore, full.
There’s then a further requirement in the Code relating to financial interests:
7.7‘Ministers must scrupulously avoid any danger of an actual or perceived conflict of interest between their Ministerial position and their private financial interests. They should be guided by the general principle that they should either dispose of the interest giving rise to the conflict or take alternative steps to prevent it. In reaching their decision they should be guided by the advice given to them by their Permanent Secretary and the Independent Adviser on Ministers’ interests’.
Clearly, Rachel Reeves did not scrupulously avoid the danger of an actual or perceived conflict of interest. She also did not seem to follow the principle that she should take ‘alternative steps’ to prevent the conflict - these could have included recusing herself from a decision to appoint Mr Corfield (which there is no suggestion she did), or appointing him as a Special Adviser, or asking him to apply for an externally-advertised position. She also did not seek advice from her Permanent Secretary, because we know he was unaware of the donation. Nor is there any suggestion she sought advice from the Independent Adviser.
The Ministerial Code also requires Ministers to protect Civil Service impartiality
It says:
3.1 ‘Civil service appointments must be made in accordance with the requirements of the Constitutional Reform and Governance Act 2010. Ministerial involvement in such appointments is set out in the Civil Service Commission’s Recruitment Principles …. Ministers have a duty to ensure that influence over civil service…is not abused for partisan purposes’.
And
5.1 ‘Ministers must uphold the political impartiality of the Civil Service’
I think it would be challenging to argue that appointing a recent personal donor to the senior Civil Service (as Director) without a competition is compatible with upholding the political impartiality of the Civil Service. This situation is especially sticky because Mr Corfield’s role involves business relations - and there could be a sense that he is working to further links between Labour and Business, rather than the Government and Business.
The strange case of Louise Tinsley (see yesterday’s WhitehallProject post) who was ‘handed [a] big promotion’ could also be considered influencing the Civil Service for partisan purposes.
None of this is to say that people who have donated or worked for political parties can never serve as impartial officials, particularly if - for example - time has elapsed, or there was a full competition, or their post is relatively junior (diary management, speech writing, as a Policy Adviser) or without line management responsibilities. I will return to this in a future post but I think more transparency is essential.
What comes next?
I think it’s obvious (having seen scandals play out up close during my time in Government) that there will ultimately need to be an investigation under the Ministerial Code.
Under the current system:
‘If there is an allegation about a breach of the Code, and the Prime Minister, having consulted the Cabinet Secretary, feels that it warrants further investigation, he may ask the Cabinet Office to investigate the facts of the case and/or refer the matter to the independent adviser on Ministers’ interests’.
So the Prime Minister can choose to ask the Cabinet Office to investigate the facts of the case and/or refer the matter to the Independent Adviser on Ministers’ interests.
If the Prime Minister were to ask the Cabinet Office to investigate the facts, the team that would be doing the investigation is itself embroiled in a donation / cronyism scandal. That’s over the entirely unprecedented appointment of former Labour Together staffer Jess Sargeant as a Deputy Director in the Propriety & Constitution Group (previously the Propriety and Ethics Team - PET). I don’t see how anyone could have confidence in the Propriety & Constitution Group doing this work, whatever Cabinet Office wants to promise about a ‘Chinese wall’ between Sargeant and propriety casework.
So that leaves the Independent Adviser.
It’s also possible for the Independent Adviser on Ministers’ interests to start his own investigation, following changes made in May 2022. Section 2.2 of the relevant guidance [also echoed in the Ministerial Code] sets out:
‘Where the Independent Adviser believes that an alleged breach of the Code warrants further investigation and that matter has not already been referred to him, he may initiate an investigation. Before doing so, the Independent Adviser will consult the Prime Minister who will normally give his consent. However, where there are public interest reasons for doing so, the Prime Minister may raise concerns about a proposed investigation such that the Independent Adviser does not proceed. In such an event, the Independent Adviser may still require that the reasons for an investigation not proceeding be made public unless this would undermine the grounds that have led to the investigation not proceeding’.
So the rules now allow the Independent Adviser to press the Prime Minister to open his own investigation. [This was a change which Boris Johnson made as previously cases had to be referred by Downing Street]. The Prime Minister could choose to block the Independent Adviser, but his decision to do so would usually become public. I think Keir Starmer would find doing that pretty terminal to his - already shaky - promises about a Government of ‘service’.
With the Times today saying that Reeves ‘could be in breach of the ministerial code’ over her failure to declare the Corfield donation, and the Times leader yesterday calling the Government a ‘chumocracy’, saying it has ‘left itself vulnerable to accusations of cronyism’, it will be difficult for the Independent Adviser to look credible if he does not now press for an investigation.
What I do not know is whether the Independent Adviser would be given support from officials in the Propriety & Constitution Group in conducting any investigation, or perhaps even considering whether to recommend one. That’s why action to resolve the Jess Sargeant scandal is especially urgent (see below).
As a reminder, the Independent Adviser is responsible for reviewing Ministers’s Interests. This is set out in Section 1.2 of the guidance:
‘Ministers are required, upon appointment to each new office, to provide to the Independent Adviser a full list of interests which might be thought to give rise to a conflict with the Minister’s public duties. This must occur within 14 days. The list should have been reviewed where relevant by the appropriate Permanent Secretary’
We know Reeves did not declare the Corfield donation to her Permanent Secretary so it seems probable she also did not declare it to the Independent Adviser.
I also heard that Downing Street was not made aware of the Corfield donation either. [Although I have only heard this second-hand].
I wonder whether the other ministers who have received donations, which have been linked to subsequent hiring decisions in their departments, also neglected to inform their Permanent Secretaries and the Independent Adviser….
Getting ahead of all this
If the Government wants to stop the growing clamour about cronyism, the only option is to come clean. Otherwise they may find the ground cut away from under them by the Independent Adviser or the Civil Service Commission [more on that later].
Government must take three steps:
Transparency. Government must answer basic questions - how many exceptional appointments have been made to the Civil Service since the General Election, and who are they? How many promotions have been demanded?
Special Advisers. I cannot see how Ian Corfield, Emily Middleton (another ex-Labour Together Staffer), or Jess Sargeant can stay in their posts. All should become Special Advisers. As, probably, should Louise Tinsley.
Independent Investigation. And Keir Starmer should refer each minister linked to a donation scandal - so far that’s Reeves, Peter Kyle, Angela Rayner and Nick Thomas-Symonds - to the Independent Adviser on Ministers’ Interests.
These steps will be painful but otherwise things will only get worse, as more facts emerge, more ‘crony’ jobs are discovered, the web connecting Labour Together, donations, ministers and their new appointees extends, and the stench of scandal grows. Patrick Maguire ominously warned yesterday ‘there’s more to come’ - meaning more political people parachuted into plum civil service jobs.