Former Ministers: Private Interests (Hansard, 26 June 1990)

§ The Lord Privy Seal (Lord Belstead)
My Lords, successive governments have taken the view that it is in the national interest that former Ministers should be able to put their experience at the service of industry. These matters are left to the discretion and good sense of the individuals concerned. It is a principle of public life that Ministers must order their affairs so that no conflict arises between public duties and their private interest, including their foreseeable future private interests.

§ Lord Hatch of Lusby
My Lords, I thank the noble Lord for that Answer. Does he agree that it is of the utmost importance that there should be a clear separation between the exercise of political power and activities within the commercial world, the main objective of which is the making of profit? As four former Ministers are now participating in some form in privatised industries which the Government have privatised, is this not derogating from that principle and allowing the commercial world the benefit of the inside knowledge gained from ministerial experience?

§ Lord Belstead
No, my Lords. The noble Lord's question is answered by part of the Answer which I gave; namely, that it is important to recognise that a Minister's actions towards a company when he is in office are constrained by well-established principles. If I may say so, there is very little difference as concerns that principle between a Minister in the Government going to work in a privatised company and a Minister going to work in an industry in the public sector.

§ Lord Mayhew
My Lords, does the noble Lord not recognise that the fact that the Government have made serious mistakes in this field is in no way exonerated by the fact that a previous Labour Government made equally bad mistakes?

§ Lord Belstead
My Lords, I would not accept either of the theses which the noble Lord puts to me.

§ Lord Dean of Beswick
My Lords, is the Leader of the House aware that some people are concerned when they see former Ministers from this Chamber and another place taking chairmanships and other high-salaried posts in companies which they helped to privatise in the very recent past? Does he not understand that people outside do not readily accept that as wholesome conduct?

§ Lord Belstead
My Lords, if the noble Lord will forgive me, I have answered that question. He is seeking to distinguish between those who work in government taking chairmanships in undertakings 1437 in the public sector and former Ministers taking positions in undertakings in the private sector. All I can say to him is that successive governments have always taken the view that it is in the national interest that former Ministers should be able to put their experience at the service of industry and that there should be a two-way flow between industry and government and government and industry. There is therefore no change in the principle.

The Earl of Halsbury
My Lords, from the standpoint of practical politics, what sanctions do the Government have against non-pensionable former Ministers?

§ Lord Belstead
My Lords, the sanction sought by the noble Earl is to be found in an area which I am sure has occurred to him and which I shall put to the House. There is an important consideration for Ministers. They are public figures and both they and the companies concerned have a strong motivation to protect their good name.

§ Lord Jenkins of Putney
My Lords, can the Leader of the House confirm that rules in this matter exist in relation to senior civil servants? Does not recent experience suggest that it would be a good idea if similar rules were published and were adopted by Ministers?

§ Lord Belstead
My Lords, there is a difference between the position I set out in reply to the noble Earl, Lord Halsbury, and that of civil servants. Civil servants are not normally public figures but are far more likely to have had detailed contractual dealings with their prospective employers and to be privy to trade secrets of competitors. It is worth noting that the rule for civil servants is not a prohibition for a period of time when they may not take a paid business appointment. The rule is that within a period of two years they must seek permission to do so.

§ Lord Williams of Elvel
My Lords, does the Leader of the House recognise that with the privatisations that have taken place there is a somewhat different dimension for Ministers and their future careers outside government? Ministers are responsible for privatisations. Privatisations are completed by government and Ministers are responsible for their departments. Is it not therefore rather odd that there are no rules governing the future careers of Ministers who are actually in charge of the privatisation of the companies which they then join?

§ Lord Belstead
My Lords, what the noble Lord is temporarily overlooking is the fact that in every case that I can think of the privatisation has always been accompanied by regulation—indeed, in some cases by very strict regulation. Therefore I go back to the original thesis of my first Answer. Provided a Minister has made absolutely certain that his affairs are so conducted that there is no conflict between public duties and private interest, the position we have had for many years of people working in government being able to put their experience at the service of industry should be continued.

§ Lord Mackie of Benshie
My Lords, should there not be an interval of some kind before a Minister takes a position? Although he may be of great value to the industry does it not look very bad if within a month or two a Minister joins a private firm which he has privatised?

§ Lord Belstead
My Lords, usually there is an interval and usually it is a quite substantial one. I repeat that for members of the Civil Service there is no mandatory interval. The rule is that within a period of two years there has to be an application for permission to take a paid business appointment.

§ Lord Cledwyn of Penrhos
My Lords, I certainly do not wish to make personal charges against any noble Lord or any right honourable or honourable Member of another place. But is it not the case that the privatisation measures which are the base of this charge were highly contentious both in Parliament and in the country? Is it not further the case that the right honourable gentlemen in question were members of the Cabinet who were responsible for those measures and in some cases took part in the debates in relation to privatisation? In those circumstances would it not have been better to allow a period to elapse before their appointment?

§ Lord Belstead
My Lords, I recognise what the noble Lord the Leader of the Opposition is saying about the desirability of there being a reasonable lapse of time. However, I have already answered that point. The difference between going into the public sector or the private sector is that, in many cases, those going into the privatised companies move into companies which have been made into profit-making concerns. This has been for the good not only of them but also of the country. There have been concerns—this applies in all the cases about which I can think—which have always been regulated, and very strictly regulated indeed, in the legislation.

§ Lord Cledwyn of Penrhos
My Lords, will the noble Lord convey to his right honourable friend the general feeling that there is something not quite right about this situation?

§ Lord Belstead
My Lords, I must tell the noble Lord the Leader of the Opposition that I do not agree with him in that argument.

§ Viscount Mountgarret
My Lords, does my noble friend agree that, despite what some people may think, there are many Ministers and former Ministers who can bring an enormous amount of influence and practical experience to many companies, in the same way that many people involved in companies can bring a good deal of experience and practicality to another place and, indeed, to this House?

§ Lord Belstead
My Lords, I am most grateful to my noble friend. That is the view which has been taken by successive governments over many years.

§ Lord Mason of Barnsley
my Lords, I have been intrigued by the discussion which has taken place so far. If the noble Lord will look back at the records, he will find that in the 1960s I questioned the scandal of senior civil servants leaving government departments and, within a short time, taking jobs in companies with which they had had relations in their civil servant capacity.
The matter was taken up by Hugh Gaitskell, the then Leader of the Opposition, and the ruling was made that senior civil servants would not be allowed to embark upon careers in private enterprise until they had left the government department concerned for two years. That is how the ruling was established.Why cannot this be done now in respect of Ministers?
There are scandals taking place. The noble Lord knows this. It is smearing Privy Counsellors and right honourable gentlemen who have held posts in government and who are now taking posts in private enterprise with which they have had contact. They have been bought because of their knowledge—

Noble Lords
Order!

§ Lord Mason of Barnsley
My Lords, the noble Lord knows that this is quite true. Therefore, there ought also to be a two-year rule for Ministers.

§ Lord Belstead
My Lords, I can only repeat that there is not a two-year prohibition so far as concerns the Civil Service. However, there is a two-year period during which it is necessary for those in public service to apply for permission if they wish to take a paid business appointment. I shall not go over the same ground. I believe that the position we have at present is right.

§ Viscount Whitelaw
My Lords, are we not perhaps taking rather too serious a view of the matter? After all, there have been Ministers in all governments, if I may say so, who have taken jobs. I can see two former Prime Ministers who saw some of their Ministers properly take jobs after leaving their position in the Government. Similarly, there are others who have not done so.
It seems to me perfectly simple. Some Ministers who have a perfect expertise and who would be valuable to industry are employed by them and others—of whom I can name one very easily—do not seem to have such a value and, therefore, are not employed in that way. Therefore, there is no reason to differentiate between them.

§ Lord Belstead
My Lords, apart from the self-criticism indulged in by my noble friend Lord Whitelaw, I could not have put the position better myself.

Noble Lords
Next Question!

§ Lord Molloy
My Lords, if noble Lords will be quiet I shall get on with it! Can the noble Lord the Leader of the House tell us whether what he said applies to British institutions or organisations which have been privatised and which, having been privatised, now have overseas and foreign elements 1440 involved in them? I repeat; does what he has said up to now involve such organisations containing a foreign element which have taken over British companies?

§ Lord Belstead
My Lords, in so far as I could hear the content of the noble Lord's question, I think that the answer is yes, indeed. My answers have taken account of that aspect of the matter.

§ Lord Nugent of Guildford
My Lords, I should like to point out to my noble friend that we have now taken 27 minutes to deal with three Questions. We have far exceeded the time allotted for Question Time. If this very important point is to be continued, should it not be continued by way of a debate? I think that we should now proceed with the next Question.

§ Lord Belstead
My Lords, I think that we are in danger of turning this matter into a debate. However, I am in the hands of the House.

§ Lord Hatch of Lusby
My Lords, before we move to the next Question I should like the noble Lord to answer the question which I put to him. Does he agree that it is important for public confidence sharply to separate political power and ministerial access to commercial and political information from the use of such information in the private sector of industry? In particular, will he comment upon the negotiations which took place when the Secretary of State for Trade and Industry announced that Mercury would be given a licence and then, less than 12 months later, the same Secretary of State became chairman of Cable and Wireless which owns Mercury?

§ Lord Belstead
My Lords, I have nothing to add to what I have already said.

A noble Lord
Well done!