The Chancellor, her donor and the Ministerial Code
Why did the Civil Service advice on Ian Corfield's status change? Did he really resign? And why won't the Chancellor now set out the full facts of the case?
Yesterday, in HM Treasury Questions, the Chancellor was asked by Jeremy Hunt about the appointment of her personal donor, Ian Corfield, as a Treasury Director.
Here is the exchange from Hansard (you can also watch it here):
Jeremy Hunt
‘When the Chancellor was sitting on the Opposition Benches she repeatedly attacked cronyism, so will she tell the House whether she told the Treasury permanent secretary that Ian Corfield had made a donation to her before she got him appointed as a director in the Treasury—yes or no?’
Rachel Reeves
‘All Governments appoint people to the civil service. The donation from Ian Corfield was declared over a year ago in the proper way, and we answered all the questions in the right way that the civil service asked when we made that appointment. Ian Corfield is supporting this Government in hosting the international investment summit, which will bring hundreds of global investors to the UK next month’.
There’s several things to note about Reeves’s answer:
She chooses not to answer a direct ‘yes or no’ question, clearly revealing that she did not declare the donation to her permanent secretary, James Bowler.
She says ‘all Governments appoint people to the Civil Service’ - but her Government is the first to have appointed a political donor to the Senior Civil Service by an exceptional appointment. And she is the first Secretary of State who appointed her own personal donor to the Senior Civil Service in her department.
She insists that ‘the donation…was declared over a year ago in the proper way’ - but that’s a separate Parliamentary obligation. The question from Hunt was whether she declared it to her permanent secretary, after she became a minister, as required under the Ministerial Code. She chose not to answer.
Reeves says ‘we answered all the questions in the right way that the Civil Service asked when we made the appointment’. This convoluted phrasing appears to try to shift the blame on to her officials. Is she trying to imply that it’s the fault of officials for not asking the right questions?
Her use of ‘we’ is also interesting - who is the ‘we’? Why doesn’t she say ‘I’? Is ‘we’ her political team of special advisers? Does ‘we’ include other ministers? Or the Prime Minister? Or does ‘we’ include Ian Corfield?
The phrase ‘we answered all the questions that the Civil Service asked when we made the appointment’ is also revealing. I suspect it had not occurred to the Civil Service to ask whether Ian Corfield was a personal donor to the Chancellor. Why would it? As I said, I think the idea of a minister asking for an exceptional appointment of a personal donor is extraordinary. It also misses the point - under the Ministerial Code it is the explicit personal responsibility of the minister to make any necessary declarations - see section 7.2 of the code.
[Note - there are several Ministerial Code obligations - one is to declare all relevant interests in writing within 14 days of appointment; another to take steps scrupulously to avoid even the perception of conflicts of interest. For more exhaustive detail see this Donorgate blog].
So now we know that Rachel Reeves did not declare Corfield’s donation to her Permanent Secretary. The Chancellor returned to this point in his second question:
Jeremy Hunt
‘I think that means the answer is no. The ministerial code states:
“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”.
That did not happen. Will the right hon. Lady tell the House why cronyism is wrong under the Conservatives but acceptable under Labour?’
Rachel Reeves
‘The right hon. Gentleman has a bit of a brass neck criticising this Government, after the appointments and the partying at Downing Street that we saw under the last Conservative Government, and the billions of pounds’ worth of contracts handed out to friends and donors of the Conservative party. That is why this Government are appointing a covid corruption commissioner to get that money back for taxpayers; because unlike the last Government, we are determined that taxpayers’ money is treated with respect, and not handed out to donors of the party’.
Reeves did not deny in her second answer that she failed to make the declaration. Instead she sought to deflect with an attack on the last Conservative Government.
Ian Corfield’s new role
A few days ago HM Treasury put out a press release setting out Ian Corfield’s new role as an ‘unpaid International Investment Summit Adviser’ (quite a mouthful).
The press release announcing his new job title, emphasised that this adviser role is unpaid. Does HM Treasury now believe it inappropriate to use taxpayers’ money to pay for a role for the Chancellor’s personal donor? Which begs the question: will he will repay any salary he received in his previous role as a Director, which presumably was paid?
The HM Treasury release states:
‘In this role, Ian Corfield will work with the Chancellor, her political advisers and officials in the Treasury, as well as relevant teams across Government, to advise and help on delivering the International Investment Summit on 14 October 2024’.
The reference to political advisers was prominent and I thought noteworthy. Why did HM Treasury feel it necessary to include this reference?
It goes on to set out that:
Ian Corfield will advise on delivering these objectives in relation to the agenda, engagement of key businesses, and the investment pipeline generated from the event.
Ian Corfield will be in post until 31 October 2024. Declarations of interests have been made in the usual way.
Whenever Whitehall press releases say something is in the usual way it suggests to me that there has been something abnormal. It’s like when a minister says ‘I have always been clear that’…it suggests there’s total confusion and they previously misspoke.
Acting under advice
A few days ago Times Radio’s Theo Usherwood interviewed the ‘real’ Deputy Prime Minister, Pat McFadden (for more on him see here). Usherwood asked about Corfield:
Theo Usherwood:
‘Can I just move on to Ian Corfield? Why has he decided to resign his post, his paid post, and take up voluntary work for Rachel Reeves, the Chancellor? What's behind that decision?’
Pat McFadden:
‘Well, it's always been the case that people can be employed for short term projects or for policy advice reasons in this way. And we respect the rules. We'll follow the rules always, precisely because we do respect this. And we do respect the way the civil service operates’.
‘So if there's been a change in his status, I assume it's on civil service advice. And that's why we would immediately say, yes, if he has to change his status, if that's the advice, we'll accept that. That's the way that we operate, precisely because we want a good relationship with the civil service. We want to work well with them. And so we take seriously the advice that we get on these things’.
Theo Usherwood:
‘So when you're looking at this, there's obviously... Something's gone wrong in the process of appointing Ian Corfield. And therefore, you've decided to row back on it. And he's gone from being a paid advisor to taking a voluntary role’.
Pat McFadden:
‘Well, if he was employed in the first place on a different basis, I assume that was on the basis of advice too, because we don't do these things directly. You always take advice on them. And if that advice has changed and there should be a change in his status, we'll accept that advice too. And we do that precisely because we do respect the rules. We want to abide by them. And I would stress, appointments like this have taken place under successive governments. That isn't anything new here. But we are very keen to respect the advice that we're given’.
McFadden’s department, the Cabinet Office, are responsible for what used to be called the Propriety and Ethics Team, but is now known as the Propriety and Constitution Group. This is the team which oversees ethical standards in Government. This team also handles relations with the Civil Service Commission - which had to sign off Corfield’s initial appointment - and has now launched a ‘short review’ into Civil Service appointments at more junior grades made under exception.
It is inconceivable that McFadden would not have been sighted on the Corfield issue by this point (the interview was 25 August). McFadden is an experienced politician, who also worked in Downing Street for Tony Blair - he knows his ways around Government and around a political scandal. He will have chosen his words carefully.
‘So if there's been a change in his status, I assume it's on civil service advice’
His emphasis on the fact that the Government was acting on ‘Civil Service advice’ is noteworthy. What was that? And why did it change, as McFadden suggests twice?
Publish the advice
Clearly, there has been some official advice on Ian Corfield. As McFadden was careful to emphasise this Government acts on advice and accepts advice.
What was that advice, initially? What did it change to, and why? It’s important because it goes to the core of questions of whether the Chancellor broke the Ministerial Code.
Did the changed advice say that Mr Corfield’s role in Whitehall should be terminated? If so, the Government’s insistence that he resigned may have been misleading. If the advice suggested he should stop being a civil servant, what did it say about any salary he was paid?
Normally when a minister is facing a series of questions like this, and they want to clear things up, they choose to set out some of the facts of the case. The Chancellor has refused to do so which is exacerbating the controversy.
The Independent Adviser
Under changes agreed by Prime Minister Boris Johnson, and widely supported by everyone from the Institute for Government to the Committee on Standards in Public Life, the Independent Adviser on Minister’s Ethics now has the power to initiate inquiries himself (or, technically, to recommend to the Prime Minister that he does).
The Independent Adviser is still Sir Laurie Magnus as Sir Keir Starmer has neither appointed a new one, nor published a new version of the Ministerial Code. To change Independent Adviser now would look like goalpost moving.
I suspect Sir Laurie will be loath to jump into this issue, especially so early in the new Government’s time in office, and because he will be conscious that he was appointed by Rishi Sunak. But he is in a difficult situation - not acting in the middle of a cronyism scandal risks making a mockery of his new powers to recommend inquiries.
Sir Laurie could try and argue, for example as Mikey Smith (Deputy Political Editor of the Daily Mirror) has, that political donations, properly declared, are not private financial interests. I don’t think that can be correct. The Independent Adviser’s gov.uk pages set out that ‘all Ministers are required to complete a form giving information about’ a series of things one of which is ‘their financial interests, including both assets and liabilities’ but another of which is ‘any other relevant interests’. The reason the political donation is a relevant interest is simply because Reeves tried to employ the donor. If she hadn’t, it would not have been something to declare to her department. And, even if you try to argue that Reeves did not need to declare the donation upon appointment, surely she did at the time she tried to appoint Corfield.
Sir Laurie could try and argue that the situation has been rectified as Corfield is no longer a civil servant. I am not convinced that is a sustainable argument. It would also overturn precedent. For example, the Cabinet Office pursued an investigation into former civil servant, Sue Gray, after she had resigned from the Civil Service to work for the Leader of the Opposition.
And, in 2021, there were continued calls for Boris Johnson to be investigated over the refurbishment of the 11 Downing Street flat, even after it had been confirmed that he had paid the costs. For example, Keir Starmer reminded the then Prime Minister of his ministerial code obligations, saying he ‘will also know that any donation must be recorded in the register of Ministers’ interests’, after it was clear that Johnson had paid for the refurbishment.
Transparency and accepting responsibility
In 2015, a previous Independent Adviser did note that there was nothing for him to investigate regarding the ‘leak of a Scotland Office memorandum’, because ‘the former Secretary of State, Mr Alistair Carmichael, accepted responsibility’.
In the Corfield case, however, Reeves has not accepted anything went wrong - and has certainly not accepted any responsibility. In fact, yesterday in Parliament, she angrily went on the attack, accusing Jeremy Hunt of ‘brass neck’.
Another relevant precedent is set out in the Independent Adviser’s 2022 report:
‘The Code provides for a serious allegation to be investigated independently. However, in a large number of cases the appropriate initial response when a concern is raised about conduct under the Code, is for a Minister - or the Government on behalf of the Minister - to respond to such concerns with an account of their actions and conduct, and very often that provides sufficient explanation to allow an issue to be resolved.
‘As an example of this process working in practice, in November 2021 certain concerns were raised, both publicly and with me directly, about the perceived actions of the Secretary of State for Transport in relation to the 'General Aviation' sector. In response to these allegations, the Minister for Aviation provided a full account which set out publicly the Government’s policy in relation to the sector and addressed the concerns that had been raised. I was provided with this account and judged in light of that account being provided that the provisions of the Ministerial Code that had been cited were not engaged’.
If I were advising Rachel Reeves I would suggest that HM Treasury sets out now all the facts, publishing all the advice ministers received on Corfield and all documents submitted to the Civil Service Commission. That would help ensure the Code’s provisions were not engaged.
The Cabinet Office
The problem with a lot of this goes back to the Cabinet Office.
It is Propriety and Constitution Group which will have fed in to any advice given to Reeves on Corfield’s changed status (Remember: Downing Street will have signed off his new role as Ministerial Direct Appointments are approved by the Prime Minister).
It will be the Propriety and Constitution Group which supports the work of the Independent Adviser, and who will be advising Sir Laurie on whether or not to recommend opening an investigation.
And yet the Propriety and Constitution Group is itself implicated in cronyism - due to the position of Jess Sargeant, the Labour Together staffer currently a Deputy Director in the Group, which was approved by the Cabinet Office Permanent Secretary.
The only way to start to restore confidence is to remove Jess Sargeant from her role.