LORD LANG OF MONKTON DL

26 NOVEMBER 2009

  Q1 Chairman: Let me extend a warm welcome to Lord Lang, who comes to us as the interim chair of the Advisory Committee on Business Appointments. You come here for a pre-appointment hearing, even though the appointment, in a sense, has already happened. We come in after the event to do what we would do before the event or at the time, normally. You know what the format is. I wonder if you would like to say something to us by way of introduction or whether you would just like us to fire off some questions.

Lord Lang of Monkton: If I could make a short starting statement, Chairman, it would be appreciated. First of all, I welcome the opportunity to come to before the Committee, which I think is an important part of the pre-appointment process. I think you probably know quite a lot about our Committee already, a non-departmental public body appointed by the Prime Minister, who sets our rules. We are an advisory body and we have to be an independent body, and those are two very important elements of our work. We are not an enforcement agency, we are not a policing body, we are not an investigative body. We have no preventative powers. We operate on the basis of transparency, as recommended by Lord Nolan. Our membership is largely new this year. I think you know the names of all the members. We cover all the main political parties in Parliament, we cover the Ministry of Defence, we cover the Foreign Office, we cover the Civil Service and we cover business, which constitute, essentially, our client group base. Five of the Committee members are new since the summer, including myself. Sir Bryan Nicholson has been on the Committee for 11 years as the business representative. He is keen to stand down, and has been for quite some time, and the process of finding a replacement for him is underway using the Public Appointments Assessor. The Committee dates from 1975, but our rules were modified in 1996 on Nolan principles following Lord Nolan's report. Our secretariat is linked in to the Cabinet Office. We are paid a smallish honorarium, I believe, thanks to your Committee, thank you for that. We have been keen to see the Ministerial Code and Rules, which have been changed over the years, reflected in our areas of activity and our rules and guidance. We have been pressing for some considerable time for this. My predecessor and, indeed, his predecessor have been pressing the Cabinet Office to update the rules, and I am glad to say that, possibly because of this hearing today, we have received new draft rules and new draft ministerial guidance within the last day or two. I have not yet seen them myself, but I and the Committee look forward to tackling those and hope that they will update our basis of operation and enable us to do our job even better.

  Q2  Chairman: It is not unknown, a day before our hearing, for new bits of material to arrive; so we serve some purpose. Knowing all that as background, can you tell us how you became the person who was anointed to chair this Committee?

  Lord Lang of Monkton: I was nominated by the leader of the Conservative Party and invited to be our party's representative on the Committee and submitted to the Prime Minister for selection. That was agreed and then, later in the summer, I was invited by the Prime Minister to succeed Lord Wilson of Tillyorn, who was the acting interim Chairman since the retirement of Lord Mayhew. I have to say that I assumed that all the procedures were being properly handled, given the high status of my appointers; however, in preparing for this meeting today I discovered that there was one technical issue which concerned me slightly. My membership of the Committee was properly approved by the Commissioner for Public Appointments, but when it came to selecting the Chairman from the membership of the Committee, as had always been the practice, I gather that the Cabinet Office failed to clear that with the Commissioner also. I was in blissful ignorance of all that until about two days ago, but that was how I came to be appointed.

  Q3  Chairman: We know that to be the case too. How troubled are you by that procedural irregularity?

  Lord Lang of Monkton: I wish it had not happened. I feel an innocent victim, but I wish it had not happened. The fact that we have this meeting today is all the more useful as part of the appointment process. I hope that what matters is how we do our job and that we should be able to get on to the business of that and anticipate being quite busy in the next few months reviewing all the areas of activity that we have, considering a large number of new initiatives that we have in mind and maintaining our independence, our reputation for consistency and integrity in how we go about judging appointments.

  Q4  Chairman: You talked about the client groups who are represented on the Committee. Do you think it is satisfactory just to have the client groups represented, or do you think it would be better to have some genuinely independent people too?

  Lord Lang of Monkton: I know this is one of the recommendations that your Committee has made before. I think it is important that we have people of experience who have moved through the particular profession or activity that they represent now on the Committee. I think it is better that there are politicians who have been through the mill and understand how the process works and how it is possible, and, indeed, as our rules dictate, desirable, for members to move from politics and from government into business. If we had outside appointees they would start without that fundamental base of background in our areas of activity, but I am not sure who you have in mind to appoint. Would it be a judge, or a doctor, or a teacher, or a trade unionist or a lay member? What is a lay member?

  Q5  Chairman: The sort of people that the Commissioner for Public Appointments uses as independent people in appointments processes.

  Lord Lang of Monkton: Yes. The Committee is focused very closely on giving advice to certain categories of person, giving advice to the Prime Minister, publishing that advice when appointments are taken up, and is accountable to the wider world, to parliamentary committees, to the media, to the public and, indeed, to government. The process works well as it is. I do not myself see any reason to change it. It would be a matter for others to decide, of course, and if your Committee continues to recommend it, perhaps one day the Government will accept that.

  Q6  Chairman: When we have done work in this area in the past we have discovered that the Committee, in its previous incarnation, hardly ever used to meet as a committee, that it was all done by paper, the secretariat, as it were, did the work. Now that we have all managed to get you some money, do you actively meet and consider, as a committee, all these names that come in front of you?

  Lord Lang of Monkton: We do not meet and consider all names. Some of them are done by correspondence, particularly during the recess, if they are cases that are relatively straightforward, and quite a lot of them are fairly straightforward, but we do meet. We have met five times since I was appointed, we have met every month in the new session under my chairmanship, and we will continue to meet because we have a lot of items on our agenda. We are looking at everything we do. We recognise that we are operating in a new environment in which the public perception of former government ministers, if you like, or senior civil servants and what they do after they leave office is higher and more suspicious, and our obligation is not just to look at the reality of a particular appointment but to judge also what the perception might be and to react to that. Of course, we have to balance that with fairness to the individual and the entitlement of the individual to earn a living.

  Q7  Chairman: I was going to ask you precisely about that perception point, because there is concern, as you know, about the easy traffic from government, both on the Civil Service side and on the ministerial side, into outside organisations that people may have had some dealings with. Does that perception issue mean that you think you have to be particularly stringent in how you apply the rules so that that perception can be dissipated?

  Lord Lang of Monkton: Yes. I think the word stringent is a difficult one, because it would mean different things to different people. Some people think that the two-year limit that we can impose on somebody taking up a position is too short. I can see that point of view, but from the point of view of the individual who is seeking to earn a living, it is quite an important issue, and what I have noticed since I have been involved in the Committee is that two years is a long time, in that ministerial governmental contacts, background knowledge of companies and that sort of thing fade quite quickly. People change jobs; the world moves on. Quite a lot of the work that the Committee does does not see the light of day, in the sense that it does not get published because an appointment is not taken up. Quite a few appointments are tentatively put to the Committee and may not even reach the Committee itself. An indication of the potential advice that we would give from our secretariat, if it mentions the possibility of a two-year ban, could quite often lead to such an application being dropped from the outset. That is one area we are looking at. Unless the new rules have changed it, which I doubt, two years is our limit. There is a three-month ban on former cabinet ministers and very senior civil servants taking up any appointment that is paid other than certain professions where they go back to work that they were doing or, sometimes, even continue to do while in government with special permission. There is discretion for us over the time limit we could impose on any lobbying activity or on any contact with any particular company. For example, if a minister from a sensitive department such as Trade or Defence has had dealings with a certain company we might impose a ban of 12 months, or nine months, or 18 months rather than two years, if we thought that was appropriate. We look at each individual case very carefully. I would be happy to talk the Committee right through the whole process, if you would like that.

  Chairman: Let us see if it comes out through the questioning. I will bring some colleagues in. Paul.

  Q8  Paul Flynn: Marsh & McLennan, the second biggest insurance broker in the world, of which you have been a director, I understand, from 1997 until now, point out they will pay $400 million to settle a law suit by investors who said they lost money because the company failed to disclose illegal practices. That was in November, a few weeks ago. You are identified, "Lord Lang of Monkton, the former President of the Board of Trade, is being sued for his role, as a director of Marsh & McLennan for orchestrating a massive fraud against customers." You are a director. Do you take responsibility for that massive fraud?

  Lord Lang of Monkton: No, I most certainly do not. I was a director of the company, certainly, but I and the rest of the company very strongly refuted what we regarded as—

  Q9  Paul Flynn: Why did you pay the $400 million?

  Lord Lang of Monkton: If I could finish my answer, Mr Flynn, I will come to that. We as a board strongly refuted all the allegations made at a press conference, not actually in the official documents, by the then Attorney General, Mr Eliot Spitzer. It was a campaign he was launching, not just against Marsh & McLennan, but also against all the other large insurance brokers in the United States, over accepting contingency commissions which he alleged could be illegal but, in fact, which I think it has now been completely established are not. We resisted all those claims, we have settled our dispute with the Attorney General and, indeed, with other parties, at some cost to the company or to our insurers, as part of the normal process of negotiating civil suit settlements that takes place in the United States. It involves no admission of guilt, no acceptance of the allegations against us; it simply closes the case off.

  Q10  Paul Flynn: You paid the $400 million just out of the goodness of your hearts.

  Lord Lang of Monkton: No, we did not pay it out of the goodness of our heart; we paid it out of the interests of our shareholders, which we considered required settlement of an outstanding issue which could drag on, creating uncertainty, for a very long time.

  Q11  Paul Flynn: While you are secure in your belief that you are entirely innocent, do you not think that people outside might consider that there was a cloud over your background which would disqualify you from this appointment?

  Lord Lang of Monkton: No, I do not.

  Q12  Paul Flynn: You mentioned the need for looking after the interests of those who take jobs up in retirement. Is it true that the new membership of the Committee is entirely made up of the great and the good, those people who think it is normal to do five retirement jobs and earn £200,000? Is that not a fair criticism of all of them?

  Lord Lang of Monkton: The members of the Advisory Committee on Business Appointments?

  Q13  Paul Flynn: Yes.

  Lord Lang of Monkton: I do not know. I do not have details. I have seen their CVs, but I do not know precisely what other appointments they have.

  Q14  Paul Flynn: One of the problems we have now with the expenses is the criticism that this world of Parliament is out of touch with ordinary people, and there are no bus drivers or waitresses on this Committee. Your honorarium, which is regarded as a minor amount, is more than the income of pensioners in this country, even if you have the benefit of a part-time job, and many people would regard it as an outrage that a serving MP can take up five jobs, paying £175,000, but those on the Committee would regard it as entirely normal to do that. Is it not a fair criticism that the Committee is going to be out of touch?

  Lord Lang of Monkton: When I joined the Committee I was told it was a pro bono membership and would be unpaid, and I joined happily on that basis and would have continued, whether as a member or as Chairman, on that basis. I am grateful that the Committee has chosen to suggest to the Government that we should be paid, and I am prepared to accept the payment, as are the other committee members. I imagine some of them have other active employment which generates revenue to them. I have no idea whether the figures relate to the figures that you were quoting, but I do not regard that as in any way improper. These are very experienced people, all of whom have risen to the top of their professions, all of whom are well experienced and able to give useful guidance, judgment and independence of mind to the task before them.

  Q15  Paul Flynn: So it is a club of the great and the good.

  Lord Lang of Monkton: No, it is not a club.

  Q16  Paul Flynn: They are all distinguished people; we are not talking about that. It is whether they are in touch.

  Lord Lang of Monkton: They are appointed by the Prime Minister on the advice of other people within their professions or backgrounds.

  Q17  Paul Flynn: While we were glad to see the members of the Committee getting some pay for this, it is the only recommendation we made that has been accepted. We were generally very unhappy about ministers taking jobs in the areas for which they were ministers in the past, and we have examples of people who have taken important decisions. There is the current one, John Hutton, who was in a government that gave a contract to a company for $12 billion, and then there were reports in August that there was a possibility he was taking a job with EDF, the company involved. He decided not to do it, after some adverse publicity on this, but how would you take that? The danger is this, if I can spell it out. We have been told that being the Prime Minister is a good job but you do not get paid as much as 195 other people with public jobs but the advantage of being Prime Minister is that when you retire you can get jobs that pay million of pounds. This is a situation with many serving ministers, civil servants, top admirals and generals, their aim in life is not the job they are doing as hugely important officers of state but that they might well be earning more in most cases when they retire and that might distort the decisions they make when they are serving as ministers, Prime Ministers, and so on. This does seem to be a real problem now, that decisions taken by these people in office will be distorted by the possibility of getting their hacienda in Spain when they retire.

  Lord Lang of Monkton: I absolutely accept that that possibility exists, and that is one of the reasons that our committee exists, to look at these cases individually. That is why these ministers are obliged to come to our committee and that is why we look at these cases very carefully. I do not think it is appropriate for me to talk about individual cases at this Committee meeting because, particularly when appointments are not taken up, we regard that as a confidential matter; indeed, it is set out in our rules that is so.

  Q18  Paul Flynn: There are so many cases, dozens we could give you. There was a report by the Health Committee of Parliament which was very critical of pharmaceutical companies. The serving Minister of the time, Lord Warner, then rubbished the report of the Committee and said the criticisms of the pharmaceutical companies were unjustified. Within a short period he had taken on, when he stood down as a minister, five jobs, at least one of which was directly for a pharmaceutical company. Do you not think that people can be cynical about this and doubtful of the value of his advice when he was a serving minister?

  Lord Lang of Monkton: When we look at applications from individuals, from former ministers, they have to fill in an application form, which you may have seen a copy of—I have one here—and disclose all their contacts with the companies in question and any relevant facts that would enable us to consider the matter properly. The Committee then is able to seek further information from senior members of the former department, or departments, of that individual and establish what contact the minister has had, and in what circumstances, with that particular company. Some of the information that derives from that does not necessarily conform to the headlines that appear about such cases sometimes in the press. We then explore those matters further and decide and discuss whether we think it appropriate to consider the appointment unsuitable, which we can do, and have done, or whether there should be a bar of two years, which might often be enough to make it effectively not happen, or to impose a lesser ban on the particular minister concerned. That minister can then come and explain his case to us and have a meeting with us in the Committee and pursue his case further, and he would then decide whether to take up the appointment or not. He would know that, if he took up the appointment, in due course, we would publish in our report what the Committee had decided and recommended and he would then be answerable in the court of public opinion.

  Q19  Paul Flynn: There has been a whole stream of former ministers who have taken up jobs—Patricia Hewitt in Health with Boots and Adam Ingram in Defence, and so on—that are directly related to their former ministerial duties. Do you not think this will arouse public cynicism and do you not believe that there should be a ban on ministers taking, possibly for life, any jobs in areas where they were former ministers?

  Lord Lang of Monkton: The Committee can say that, if a particular position is unsuitable. I was not on the Committee when some of the cases that you mention arose. The first sentence of the introduction on the guidelines on the acceptance of appointments says, "It is in the public interest that former ministers with experience in government should be able to move into business or into other areas of public life." Your concern, I think, Mr Flynn, is that they are able to use their particular specialised background to go to companies linked with that background. If it is of benefit to the nation, as well as to the individual, that they should use their experience and their success in a particular area of activity, that they should use that in public life afterwards in public appointment, in any sphere of activity except the one in which they are an expert, I think that is rather a waste of talent and experience. I accept the point that we have to balance that against the public interest and we have to seek to protect the exploitation of knowledge. We also have to protect the interests of competitors of the company for which the individual might work.

  Q20  Paul Flynn: I recommend that you read the evidence we have had on previous committees. One former minister justifies appointment because of the fact that he was chosen as the Apprentice of the Year in 1953. It is not a question of their experience and their knowledge, it is because of their contacts and their potential influence and the perception by outside firms that this is a way to influence the present ministers. That is why it is there; it is lobbying that they are there for. They are not used for their knowledge or their acumen. That is the perception, they are former ministers for hire, and that is the danger, and the other danger is that their decisions, when they are ministers, can be distorted by their future retirement prospects.

  Lord Lang of Monkton: I accept that there is concern over this, and it is a real concern, it is something that we are looking at, and within the limited powers we have we are seeking to consider if there are ways in which we can tighten things up. For example, one of the things we are looking at is whether we should contact the company that is proposing to employ this individual and request or require from them undertakings as to what they will or will not ask that person to do when in their employ. As well as imposing a ban on the minister on certain things, we could also seek undertakings from the future employer. We are considering that in the Committee at the moment along with a number of other things.

  Q21  Paul Flynn: Finally, would you say that you are the right person for the job—knowing the amount of public suspicion, some of it justified and some of it not, about sleaze and about the way that we conduct ourselves in this building, because of your background, earning (and you can tell us what you earn or you need not tell us what you earn) very large sums, and you regard it as normal to do that as a retirement job—that you are the person to sit on this Committee and make these decisions, in view of the need to have a clean sweep, to have new brooms, to say, "Look, the system we had here in the past has not worked, it has caused a great amount of public concern about it"? What we really need heading this Committee is a new broom, someone from outside, someone who does not think it is normal to have these jobs, someone who is not part of the political establishment at all. We need a thoroughly independent person to come in and give the whole system a good shaking up.

  Lord Lang of Monkton: The problem is one of government—parliamentarians, ministers and civil servants essentially—and I think that the accrued wisdom and judgment that the individuals, who are towards the end of their careers or, indeed, have finished their careers—and some of the Committee members in the past have been retired completely, as I understand it, not least because they served on the Committees for ten, 11 years in some cases, because the Prime Minister, or the Government failed to appoint successors at the end of their terms—bring to the Committee is beneficial. It is not a political committee, in the sense that although there are ministers on it there are others who are not politicians, and the collective benefit of the seven members of the Committee is to balance each other's area of experience and activity and to listen, almost subconsciously, for any suggestion of political bias or any other kind of bias that might enter into the consideration of cases. I think it is a better system than having seven people who have no experience whatever of government or business or the Ministry of Defence or the Foreign Office or the Civil Service.

  Q22  Mr Walker: It is now accepted that people will have many careers and many vocations. The average length of a parliamentary career is nine, 10, 11, 12 years, I think; it is certainly not 20, and it is certainly not 15. We are being told that many of us will have to work into our 70s. Many people want to work into their 70s. You, obviously, regard it as important to allow people when they leave government, when they leave the Civil Service, to go on and use their skills elsewhere. I was a little concerned when you said that you were going to place emphasis on perception. We know that the media's only interest is selling newspapers, taking two and two and making 973, and I think on occasions you are just going to have to tough it out and make brave decisions.

  Lord Lang of Monkton: I think, in retrospect, given the criticism on the activities of certain individuals who have passed through our Committee, perhaps we have taken brave decisions, but I absolutely emphasise our determination to be independent, to be balanced and to be fair and to recognise that there is the public interest in preventing the kind of things that Mr Flynn was identifying from happening, but also giving the individual the right to earn a living. Also, we have to consider sensitively the different circumstances of individuals in their different stages of career. For example, if a junior minister in, say, the Department for Transport, just as an example, lost his ministerial position after three months and, possibly, his seat in Parliament and was a youngish man with a young family, we would, obviously, I hope, be sensitive to that situation as compared with a permanent secretary who at the end of his career with large pension wanted to move out into industry. We have to take a lot of factors into account: the individual's circumstances, the substance of the position he was going to, the background experience and contacts that he might be in danger of exploiting and the perception. We are required, by our terms of reference, to take account of the public perception but, of course, we have to interpret what the perception is, and the perception is not always as portrayed in the media.

  Q23  Mr Walker: I am on a different side of the fence from my colleague, Paul Flynn, as you have probably gathered, but in one area I do have a little sympathy for his concerns. It seems that you have people who hold senior ministerial positions who leave that ministerial position but then remain in Parliament as Members of Parliament. While I am not against outside interests, I think there are some concerns raised when you have a member of the Cabinet who leaves but retains their seat in Parliament, as a Member of Parliament, and then goes and sits on a board. That is very different from leaving Parliament and continuing a new career. I wonder if you could advise the Committee how you deal with those cases because there are a number of former Cabinet ministers who now hold senior jobs in business. There are a number of former Cabinet ministers who went on to hold senior jobs in business who served on my bench—this is a non-partisan point—but there is a slight difference there between what you did when you left Parliament—of course, you were a man in your fifties: you needed to start a new career—as opposed to someone who has every intention of staying within Parliament but also holding on to some quite lucrative directorships while they are there.

  Lord Lang of Monkton: I think that does identify another category which needs to be looked at specially and in a slightly different way, and that is what I propose that we will do, along with a whole lot of other such cases. I notice that the Committee on Standards in Public Life recommended that it should be possible to make a complaint against an MP who took up an appointment without coming to the Committee for approval, in the sort of situation that you describe, and I think that is a helpful development. One should consider also what is known as GOATs (the government of all the talents), the people who come into government late in their business careers for a relatively short time and then leave. Some of them, it seems, are not made fully aware, or do not hear when it is told to them, that when they leave their ministerial job they would have to come to us and get our approval; they cannot just sweep straight back in and pick up all the paid appointments.

  Q24  Mr Walker: You have had problems with some of the GOATs, have you?

  Lord Lang of Monkton: It is possible. I do not want to get too personal on individuals because there are not very many of them that have come before us yet, but there is a danger there. You are going to come on to it, are you?

  Q25  Chairman: Yes, and I think we have guessed who you are referring to, but carry on.

  Lord Lang of Monkton: There are also Tsars, for example, appointed by government; there are other categories of people who are close to government. For example, there are ministers who attend Cabinet. Should they be treated in the same way as Cabinet ministers and have an automatic three-month ban from taking up any positions or not? I think we have to exercise our judgment on all of these. Perhaps we ought to set down some specific tariffs for ourselves as an objective basis from which to consider a case, although we would still need to apply objective criteria in a subjective way to reach a fair judgment in individual cases. This is the sort of thing that the Committee is meeting regularly at the moment to address and consider.

  Q26  Mr Walker: My colleague, Paul Flynn, also mentioned this chap called Eliot Spitzer in America. The name is familiar. What happened to Eliot Spitzer?

  Lord Lang of Monkton: He is no longer Attorney General for New York. He became Governor of New York State and had to resign in personal circumstances.

  Mr Walker: Of course; he had to resign. Thanks.

  Paul Flynn: Nothing to do with his work!

  Chairman: We will move on.

  Paul Flynn: He was a great man.

  Q27  David Heyes: This word "perception" has obviously been over used this morning, and we keep returning to it all the time. I guess we are talking about the view that the general public have about the way you do your work and about the decisions that you make. I see that it is an important line in your job description, under the list of tasks that go with the role of chair, that you should represent the views of the Committee to the public. It seems that is the means of influencing public perception and informing the public about what you do. How are you going to do that? What things are you going to do to achieve that?

  Lord Lang of Monkton: It is an interesting question. We are considering—indeed we are already revising our website to give more information and to make it clearer to the public—what we do and how we go about our work. I am considering ways in which, as Chairman, I might give an occasional interview on the record to try and explain to the media more clearly how things develop, not on individual cases, but on the general practice of what we do. The perception we are tasked with is to recognise the perception the public might have of a particular appointment. They might have it wrongly—in some cases they do—but it is the Caesar's wife principle. Most ministers come to us because they want the protection of our guidance, because they feel that we do give a fair and impartial judgment that takes account of circumstances and it gives them a degree of protection if they have been through the process with us. That in turn makes it all the more important that we get it right.

  Q28  David Heyes: It is going to be a difficult task influencing the public perception of what you do, given the background of yourself and many members of your Committee. Many of them have experience of taking on these kind of public appointments. We have already referred to the attractions of having a member of the public, more of a lay person, as a member of your Committee to give you some feedback on how the public are likely to see what you do, but I think you said you could not see any merit in that.

  Lord Lang of Monkton: We are not short of feedback on what the public think about the behaviour of ministers who have been to our Committee or civil servants. It is what they do that becomes the issue as much as what we recommend that they do. Once we have given our advice, as I said earlier, we are not a policing, or an investigative or an enforcement agency; it is the court of public opinion that decides thereafter, in line with Nolan principles. "A free media and a free democratic Parliament", as Lord Mayhew described it.

  Q29  David Heyes: I think you said earlier—I just want to check I heard you correctly—that you did not know about the outside interests of the other members of your Committee.

  Lord Lang of Monkton: I have their CVs and I have read them. I simply cannot remember them all off the top of my head.

  Q30  David Heyes: But you have that information.

  Lord Lang of Monkton: Yes, I have.

  David Heyes: I think I will leave it there.

  Mr Walker: The court of public opinion used to be called a lynch mob. Please, please, do not allow yourself to be dragged into talking and deferring to the court of public opinion. We spent hundreds of years creating laws to stop people being hung from trees by the court of public opinion.

  Chairman: Charles is the only Member of Parliament not keen on public opinion.

  Mr Walker: No, the court of public opinion.

  Chairman: Let us not explore that any further.

  Q31  Julie Morgan: I wonder if we could explore this issue of different personal circumstances for the people who come before your Committee. I did feel a degree of alarm, when you used the example of a young man with a family who he had to support, that you might make a different decision in that sort of situation than you would for somebody who was maybe older and had more income. It seems to me that those sorts of criteria should not be influencing your decisions. I wonder if you can comment on that.

  Lord Lang of Monkton: I agree, it is a difficult issue and it is one of balance, as I also said, but we would be pretty hard-hearted if, because we had treated a retired permanent secretary in a fairly robust way, we automatically treated the other example that I gave in the same way in broadly comparable circumstances. There might be a nuance there that might vary the waiting period that we might request. I am simply trying to explain that the cases that reach us are all different, they are all sui generis. We have a limited number of levers at our disposal and it is important that we get the balance right, and so we do consider cases very carefully. They come on paper to us from the secretariat initially and, in my experience (and I shall make them blush if they are sitting behind me) they do lay the details out very succinctly but in a well balanced way. They sometimes come to conclusions with which some of us disagree, that is when we need to meet and discuss them or else have further exchanges between ourselves and reach agreement. It is essentially a matter of judgment, the judgment of seven independent minded individuals all trying to reach the right fair answer. I am simply trying to make the point that our client group have circumstances that we ought also to take into account.

  Q32  Julie Morgan: I am concerned that you used that expression of a young man with a family, implying that that should have some influence on your decision. How could that influence your decision?

  Lord Lang of Monkton: It is important, as the Government said, it is in the public interest that former ministers with experience in government should be able to move into business or into other areas of public life. Where a person's living is at stake, rather than his or her pension being added to, that is a factor that could inform our judgment. I am not saying it would decide it.

  Q33  Julie Morgan: I would have thought the important things to inform your judgment would be the issues of the previous job held and the link with the job that was coming up and inside information.

  Lord Lang of Monkton: Yes to both of those.

  Q34  Julie Morgan: Those are the things that should be the key issues.

  Lord Lang of Monkton: Yes to both of those, and a lot of other factors, but we do not operate with an absolutely fixed penalty system. If we did there would be no point in having a committee; we would just have a rubber-stamping exercise. We have to look at each case on its merits.

  Q35  Julie Morgan: In taking up this post, how do you see yourself leading the Committee now over the next year? Have you got things in your mind that you want to achieve or a direction you want to go in?

  Lord Lang of Monkton: Yes, I want to maintain the Committee's reputation, which I think it does have, for independence, integrity, consistency, balance, and I want also to make sure that it is aligned with the changing circumstances, such as they are. Because the activities of Members of Parliament and Members of the House of Lords has been much in the public eye lately, the media reaction tends to be more colourful and more heightened, and that in turn can influence public opinion. Part of our job is to help, as we all want to do, to maintain and uphold and improve the reputation of Parliament, and, therefore, we have to take account of the environment in which we are operating, and that is why we are looking at all the things that we do. That is why we were so keen to have updated rules. We shall now look at those draft rules, and, again, I thank your Committee for recommending to the Government that they should give us the chance to comment on them before they finalise them, and we will try to make sure that these are the right rules to help us to do our job to the best extent.

  Q36  Mr Prentice: You were nominated by David Cameron, the Leader of the Opposition, and you were appointed by the Prime Minister. Did you actually meet the Prime Minister? Did he call you into 10 Downing Street to talk to you about the job, or was it all done by letter?

  Lord Lang of Monkton: It was done by letter. I did not meet David Cameron either, but I have met him on other occasions.

  Q37  Mr Prentice: Has there been any subsequent correspondence with Number 10 about your business background and the material that has now surfaced in the press and which has been alluded to by Paul?

  Lord Lang of Monkton: The material which you say has surfaced in the press has been in the public domain for five years and I do not think that influences the matter at all.

  Q38  Mr Prentice: The first reference that we have got in our briefing material is 2004, but there is the other story that I have in front of me, which is very current, published by Bloomberg on 13 November 2009, which says that Marsh & McLennan are going to pay out $400 million to settle this law suit. You told the Committee that the company was doing this to get closure. Are all other US insurance brokers paying out to get closure or was it just Marsh & McLennan?

  Lord Lang of Monkton: Other large insurance brokers had to give undertakings to the Attorney General's office in New York that they would cease to collect contingency commissions, something which every other insurance broker in the United States continued to accept, but I do not know how much in terms of settlement they paid out. This was a civil law suit. This was not with the Attorney General. This was a civil law suit against the company.

  Q39  Mr Prentice: I understand that. I am ignorant about these matters, I am just a Member of Parliament, but you told us earlier that contingency commissions are not illegal. It just strikes me as strange that the company that you are a director of has shelled out this huge sum of money for collecting contingency commissions which you tell us were not illegal. My question is: was this an industry-wide response or was it just your company that shelled out all this money?

  Lord Lang of Monkton: I think the other companies who had to give the undertaking to the Attorney General that they would suspend contingency commissions—

  Q40  Mr Prentice: Why did not your company, Marsh & McLennan, simply say, "We are not going to have anything to do with contingency commissions in future"?

  Lord Lang of Monkton: We did.

  Q41  Mr Prentice: And that was not enough?

  Lord Lang of Monkton: This law suit was not about the contingency commissions. As I recall (and I may not be quite correct on this), this law suit concerned the fact that the share price collapsed when Mr Spitzer made a number of very outspoken remarks, which Mr Flynn has in his documents there, and I think the law suit related primarily to that issue, the fact that the shareholders had lost value in their shareholding. Litigation in America is rather different from in this country, and many such cases are pursued with a view to achieving some kind of ultimate settlement in order to gain closure for the benefit of shareholders, which is what happened in this case. Therefore, the merits of the actual case tend not to be ever tested in court.

  Q42  Mr Prentice: I do not know if I can get much further on this one, but I will try one last time. There were other insurance brokers that did not pay out money but just gave an undertaking that they would not have anything to do with these contingency commissions. That is the reality, is it not?

  Lord Lang of Monkton: I do not know whether they paid out money or not, I cannot recall—it was some five years ago—but they did undertake not to continue to collect contingency commissions even though other insurance brokers around the world were collecting contingency commissions.

  Q43  Mr Prentice: Has there been any reputational damage to Marsh & McLennan as a result of this?

  Lord Lang of Monkton: There certainly was at the time, but not now, no, because the issue is now seen in perspective and the reality is apparent.

  Q44  Mr Prentice: Has there been any reputational damage to you, Lord Lang, through your association with this company?

  Lord Lang of Monkton: No.

  Q45  Mr Prentice: Was there any reputational damage to you over the Thistle Mining issue? Again, it is yellowing at the corners now. This is going back a few years.

  Lord Lang of Monkton: Not that I am aware.

  Q46  Mr Prentice: These matters never arose with the Prime Minister or David Cameron, because you did not meet either of them face to face?

  Lord Lang of Monkton: I have no idea what inquiries or research either of them made.

  Q47  Mr Prentice: Can I ask, again prompted by a story very recently in The Daily Mail where the headlines screamed, "Fury as credit crunch civil servant lands Rothschild job". This about John Kingman, the former Chief Executive of UK Financial Investments, who was at the centre of bailing out the banks, and so on. We know that he is to become a new managing director of NM Rothschild. You said to Paul a few moments ago that there were circumstances where you may get in touch with an employer to find out what the duties of the new employee would be, the person who has come from politics or from the senior Civil Service. Did you get in touch with NM Rothschild over the Kingman appointment?

  Lord Lang of Monkton: I am sorry, but we do not talk about individual cases. That is one of the confidential obligations that we actually have, and is set down in our rules, for former ministers.

  Q48  Mr Prentice: I understand that. It just puts me in a difficult position, because this is not any old appointment, this is hugely important. I am told that the appointment has been vetted by the Advisory Committee on Business Appointments. Can I ask you that? Has it been vetted?

  Lord Lang of Monkton: I am sorry; it is our absolute practice not to talk about individual cases. In due course we publish on our website and in our Annual Report the advice we have given to individuals who have taken up appointments.

  Q49  Mr Prentice: Let me try it this way. We talked about the time limit, this quarantine period of two years. Do you think in certain circumstances that ought to be extended, because we know the Government wants to sell back to the private sector banks which have been nationalised, taken into public control—Lloyd's and so on—and that is a complicated business and it may take longer than two years? It could take three years, for example. Do you think there is a call for flexibility perhaps?

  Lord Lang of Monkton: As I said earlier, we are considering all these matters and, if we think that there is a need to extend the two-year period, we would then ask Government for that to happen. Whether they would agree or not is another matter. We have also the option of saying that an appointment is unsuitable, which, effectively, is a ban, unless the individual wants to defy us.

  Q50  Mr Prentice: You told us earlier that you are not a policing organisation; you are not investigative; you do not enforce. Are there any circumstances where you would take the initiative and write to a former senior civil servant or a former politician, because information has come your way, asking them for more information? Let me give you an idea where I am going. We know that the former Prime Minister, Tony Blair, has this constellation of companies, Windrush Ventures and others, that have not all been passed over to you in the Advisory Committee for you to form a view on. All the stuff is in public print. Would you, in these circumstances, write to Tony Blair and ask him for more information, or is that not your responsibility?

  Lord Lang of Monkton: Again, I cannot talk about individuals, but, as a generalisation, if we thought that in a particular case we had been given incomplete or inaccurate information or that something had developed in a way that had not been indicated to us, we might make inquiries, if it was an application that in the broader sense had been taken up. I think there are issues with partnerships and consultancies, and perhaps this would be a moment to mention that, because it is possible that a partnership or a consultancy could be an umbrella under which a range of activities, not necessarily all commercial or all charitable, but perhaps a mixture of both, could exist, and issues arise then over the use of subsidiary administrative companies from which it is possible that some commercial benefit can flow which might have been appropriately considered in Committee. I am speculating on that and, as I say, I am making this as a general comment not related to any particular case. This is an area that we are looking at. We are wondering how we can explore more fully, without carrying the thing to absurd extremes, the activities that could take place under a consultancy or a partnership, but if a consultancy is set up and takes on 20 clients or 30 clients, should the individual come to the Committee before accepting every contract with every client during the two-year period under which they are responsible to come to us? I ask the question not in the expectation of a firm answer, it is a matter we are considering, but we recognise the difficulties.

  Q51  Mr Prentice: It seems to me, listening to what you are telling the Committee, that you see the Advisory Committee being a bit more muscular in future. Is that right?

  Lord Lang of Monkton: Possibly muscular, possibly more flexible, possibly more inquiring. I hope that a lot of the things that I have indicated to you today demonstrate that we are lifting the lid on everything and wondering whether we are doing it in the correct way or whether things should be tweaked in a certain direction or pursued substantially differently. So, yes, we are looking at everything.

  Q52  Chairman: As a matter of information, on your website when you publish what you have told people who are taking up appointments, do you publish the numbers of instances—I know not the names—where you have deemed an application to be unsuitable?

  Lord Lang of Monkton: No, I do not think we do, unless I hear a correction coming from behind me. I hear no correction

  Q53  Chairman: Would that be something that you might consider doing?

  Lord Lang of Monkton: We have said that issues would be explored with us by ministers and senior civil servants in confidence. In the case of ministers, we have said that we would not subsequently release such information. In the case of civil servants, the rules say that we may or may not release such information. Again, it is the sort of thing that we could look at and probably will look at, but at the moment I think what we do is correct; because it is very important that the minister coming to us in confidence is not exposed as having been approached by a certain company with which he does not subsequently take up an appointment.

  Q54  Chairman: I am not asking you to name names, but in terms of people's understanding and perception of how effective this body is, one thing that people want to know is do these people ever turn anybody down? We do not want to know who these people are and what you turn them down for, but we do want to know if you are turning people down, and it would be a perfectly proper thing to say that over a period of time we handled things this way and these are the number of cases, not the names, where we did think an application was unsuitable and said so.

  Lord Lang of Monkton: It is possible. It is possible we could do it in future, but we have not discussed it in committee yet.

  Q55  Chairman: What would be the argument against it?

  Lord Lang of Monkton: The argument against it is, once you know that something has been turned down, who is it, what was it, step by step by step, you get into a stage where you are releasing information such as would undermine the benefit to the individual and to the Committee of having confidentiality, because without that confidentiality ministers or senior civil servants might be less keen to come to us to consult us.

  Q56  Chairman: But if you are just reporting in a reporting year that X number of applications were said to be unsuitable, that would not embarrass anybody or cause difficulty?

  Lord Lang of Monkton: I have said, this is the sort of thing we are going to look at.

  Q57  Chairman: What I am asking you is, give me a good argument against doing it, and I have not heard one.

  Lord Lang of Monkton: I have just indicated the step by step intrusion into the confidential commitment that we have to give, which might be appropriately changed one day, but at the moment our view, the view of our predecessors and the view of government seems to be collectively that this confidentiality component in our work is necessary.

  Q58  Chairman: Perhaps I am not making myself clear.

  Lord Lang of Monkton: You are, Chairman.

  Chairman: I am not asking you to depart from that. Anyway, I just flag it up.

  Q59  Kelvin Hopkins: Following this up, this confidentiality, I have a suspicion that no-one is really ever turned down and that everyone is approved.

  Lord Lang of Monkton: No, that is not correct.

  Q60  Kelvin Hopkins: If I put our papers and what we have been saying today to my local constituency, and particularly to the members of my local Labour Party, I think they would be incredulous. They would just say this looks like a cosy establishment arrangement where a lot of people in the establishment are approving other people to join the club.

  Lord Lang of Monkton: You would not say that, and they would not say that, if they had attended one or two of our meetings when we have interviewed people who were unhappy with our decision.

  Q61  Kelvin Hopkins: There are a number of Labour MPs who are still serving—I will not mention names, they are all publicly known, they have been listed in our papers—earning considerable sums of money, much larger than their parliamentary salaries. They are all ex ministers and they are still Members of Parliament. Some are standing down, some are not. Again, with the public reaction to expenses, these kinds of figures would just add fuel to that fire.

  Lord Lang of Monkton: Yes, I said earlier that we are willing to look at that matter, and there has been a change to the extent that the Standards Committee has recommended an obligation to come to ACoBA.

  Q62  Kelvin Hopkins: You went through the members of the Committee and said they are all fine, good men and women true, and so on, and rejected the idea of independent people. Even if there were one or two people that were independent, not part of the establishment, if you like—even backbench Labour MPs like myself who do not have any other business arrangements, for example, or a retired ombudsman, somebody who was seen to be not part of the moneyed establishment—if they were on the Committee, they might take a different view. They might be more reflective of the kind of view my constituents and my Labour Party members might have.

  Lord Lang of Monkton: I am not sure what the "moneyed establishment" is. I do not think many of the members of the Committee would feel they were the "moneyed establishment". They are people who have had successful careers in particular sectors which gives them the kind of background experience, knowledge, commitment and judgment to serve beneficially on the Committee. If we had a backbench Labour MP, then I dare say we would have pressure to have a backbench Liberal MP and a backbench Conservative MP and possibly a Scottish National MP, because we do have responsibility for the devolved assemblies.

  Q63  Kelvin Hopkins: Indeed; and I have no doubt our leaders would choose an appropriate backbench MP who would not cause any trouble.

  Lord Lang of Monkton: You are back in the establishment then, are you not!

  Q64  Kelvin Hopkins: Indeed. Can I ask a specific question? You said that it is not true that all are automatically approved and nodded through, but can you tell us about the kinds of circumstances in which you would be likely not to approve an appointment or to impose other strictures?

  Lord Lang of Monkton: Yes. First of all, I am trying to think of a clear and simple example. In a case where a minister or a senior civil servant had been closely involved in a decision recently to grant a major contract or funds for some kind of project to a particular company and either the minister or the civil servant left his position, either by retirement or by dismissal or promotion, or whatever, soon afterwards and was then in a position to take outside interests and was promptly offered a very substantial, well paid job in that company in the particular sector for which the grant or contract had been given, that is a pretty clear case where we would almost certainly say "not suitable", but, again, we would look at all the circumstances.

  Q65  Kelvin Hopkins: It seems that several of our Labour colleagues—I will not mention the Conservatives—who have recently been ministers have been permitted to take on business responsibilities in areas where they had had ministerial responsibility. Alan Milburn with healthcare firms, for example.

  Lord Lang of Monkton: We cannot ban people from taking jobs in areas where they have particular experience that makes them suitable to people. I know Mr Flynn and perhaps others think that would be a good idea, but we do have to entitle people to earn a living under the Human Rights legislation, under action in restraint of trade, and so on. We have to get the balance right. We think we do. If we do not, it is probably because our powers of limitation or delay are insufficiently strong, and that, again, is what we are looking at. If we think we need stronger powers, we will ask for them. If you think we need stronger powers, you should ask for them.

  Q66  Kelvin Hopkins: Maybe just stronger judgments. Two or three independent people might make a difference.

  Lord Lang of Monkton: I cannot comment on the individual cases. I do not think I handled the cases that you are referring to.

  Q67  Kelvin Hopkins: I am still trying to tease out where you would say, no, given that some of the people clearly would, in fact, not be appropriate because they have got contracts or responsible jobs in areas where they have recently had ministerial responsibility. John Hutton has recently been mentioned. This is the list we have got here. Patricia Hewitt, a former Health Secretary: a consultant with Boots.

  Lord Lang of Monkton: I assume that Mrs Hewitt came to the Committee and I assume that, if she was given advice, that advice was published and I assume that she took it but, if she did not, the remedy is in the hands of others, not in our Committee.

  Q68  Kelvin Hopkins: As I say, I am still trying to find out where you would actually say, "No, that is not on." You just cannot do that if these are approved.

  Lord Lang of Monkton: I gave you an example, I think.

  Q69  Kelvin Hopkins: Without more openness, more transparency, more publication, it is difficult to see that you are doing a serious and effective job.

  Lord Lang of Monkton: They are all listed here in detail, every single application taken up. Since I joined the Committee we have approved or handled six applications from former ministers and 17 from the Civil Service, and those details will appear in next year's report and on our website.

  Kelvin Hopkins: I will certainly be arguing the case personally, and possibly as a backbench MP, that we should have independent members and not just the establishment and relatively well off elite making judgments about people who want to join their club.

  Q70  Chairman: During that period have any been turned down?

  Lord Lang of Monkton: During the period that I have been Chairman?

  Q71  Chairman: Yes. Can you give us the figures?

  Lord Lang of Monkton: I think there is some on-going discussion at the moment with one or two.

  Q72  Chairman: So, no.

  Lord Lang of Monkton: I cannot think of any where we gave an absolute block, but some may have been withdrawn, and, therefore, effectively turned down, because they may have approached the secretariat for provisional guidance. Of course, departments also approach the secretariat because they themselves handle civil service cases below the top two levels, the permanent secretary and director general. Some of those may have been turned down.

  Q73  David Heyes: You said earlier that the negative stories about the business connections that you have had not been reputationally damaging. I find that a little difficult to believe. One of the headlines I have seen says, "Lord Lang hit by legal bombshell over Marsh & McLennan fraud". It is hard to imagine how that is not, rightly or wrongly, reputationally damaging. Thistle Mining shares suspended again, and your name being associated with that. It is a couple of years ago now.

  Lord Lang of Monkton: Can I answer those two points? Firstly, the last time I was up for election for the Board I received, I think, over 90% approval, votes in favour, and as far as the Thistle Mining suspension of shares was concerned, that was done at the company's request because we were undergoing take-over negotiations, which was price sensitive.

  Q74  David Heyes: The question that I was trying to lead to is that I think as a committee our duty this morning really is to ask you if we can be assured that there is nothing else in the pipeline, that there are no other things that are not yet in the public domain that might lead to the kind of reputationally damaging headlines that we have seen in the past and that might, therefore, compromise you in your role as Chairman of this Committee.

  Lord Lang of Monkton: I am not aware of any such issues.

  Q75  Paul Flynn: Is it fair to conclude in relation to the reforms you would like to see you used the word "tweaking", which was the strongest word, and you said repeatedly that you were genuinely proud of the work of the Committee. Do think the public would understand that you want to continue with a system that allows a serving MP earning £65,000 a year, a full-time job, to do other jobs that pay them £200,000 a year? If you feel that is normal and right and you are proud of that system, do you not think that you are the wrong person to take up this job, because you would not be seen as the answer to the bewilderment and fury of the public against a system that they regard as being sleazy and corrupt?

  Lord Lang of Monkton: I did not just say tweaking, I said tweaking or changing, making substantial alterations to. All the issues of the Committee and the way we operate are on the table at the moment and we are working our way through them with the new membership. So far as the question of MPs taking outside jobs and being highly paid, I really do not think that is a matter for this Committee or for me. I think that is matter for others.

  Q76  Mr Walker: You are right on that, because Sir Christopher Kelly has looked at that and decided that, as long as Members of Parliament make it clear to their constituents that they have outside interests, they should continue. So I think it would be a dangerous area for you to stray into.

  Lord Lang of Monkton: Thank you for that advice.

  Q77  Chairman: I think we are probably in danger of going round the circuit we have been round already. So I think I am going to draw stumps at that point. Thank you very much for coming along. They are designed to be testing and bracing sessions and I hope you found it sufficiently testing and bracing. We have the job now of meeting immediately to produce an immediate report and, as they say, you will be the first to know.

  Lord Lang of Monkton: Instant judgment. Thank you.

  Q78  Chairman: Thank you very much indeed for coming and talking to us.

  Lord Lang of Monkton: Thank you very much. I found the experience stimulating.

  Q79  Chairman: I notice you could not quite manage the word enjoy, but we have enjoyed seeing you.

  Lord Lang of Monkton: That will depend on the outcome!

  Q80  Chairman: Thank you very much.

  Lord Lang of Monkton: Thank you.