This is an extract from the Public Administration Select Committee evidence session on 10 February 2009 when we had Sir Christopher Kelly in front of us.

Sir Christopher is the Chairman of the Committee on Standards in Public Life

Mr Prentice: The American President lives in the White House. Should office holders in Britain, where an official residence has been provided, be obliged to live in that official residence?   

Sir Christopher Kelly: Should they be obliged to live in it?

Mr Prentice: Yes; it is a straightforward question.   

Sir Christopher Kelly: I am not sure that is a standards issue, but my answer to the question would be, no. I can think of examples in the past when people have not.

Mr Prentice: That is fair enough. How often do you meet the Prime Minister?   

Sir Christopher Kelly: I have met the Prime Minister twice since being appointed.

Mr Prentice: Is that enough? Do you need to see him more than that?   

Sir Christopher Kelly: I have no doubt that if I asked to see him, depending on the other things on his plate, he has made clear to me that he would be keen to talk to me.

Mr Prentice: What was on the agenda of your last meeting with the Prime Minister?   

Sir Christopher Kelly: The last meeting happened in July, and it was one of the meetings at which we discussed MPs' pay and allowances.

Mr Prentice: Did you raise the issue of the independent adviser on ministerial interests: because in your latest report you tell us that the set-up that we have at the moment has serious weaknesses because only the Prime Minister can trigger an investigation into an alleged breach of the Ministerial Code. Have you raised that with him face to face?   

Sir Christopher Kelly: I do not recall that I did at our July meeting, but I continue to believe that that is—

Mr Prentice: This is not an impertinent question, you understand, but you say in your report this is a serious weakness. If there is an allegation of impropriety, misconduct against a minister, the only person who can bring in an independent adviser is the Prime Minister himself.   

Sir Christopher Kelly: Yes.

Mr Prentice: Yet on the two occasions that you have met the Prime Minister you did not think this was important enough to raise with him?   

Sir Christopher Kelly: No, I did not say that. That was not the question you asked me. The first occasion happened soon after I was appointed, before that remark had been made, so it is not relevant to that. At the second one, the important thing we were discussing was MPs' pay and allowances.

Mr Prentice: You did not say, "By the way, Gordon, would you have another look at the independent adviser issue, because that is troubling the Committee"?   

Sir Christopher Kelly: If you think that sort of by-the-way remark is more influential than making clear that that is the view of the Committee in other ways, then maybe it was a mistake not to mention it. But, as I say, I think the issue we concentrated on was what seemed most important at the time.

Mr Prentice: Sir John Bourne, when he was the independent adviser, did not do any work at all in his two-year period.   

Sir Christopher Kelly: No.

Mr Prentice: Sir Philip Mawer, who is the independent adviser, told us when he came before us a year or so ago that he is there to offer advice to ministers on possible conflicts of interest. You must be in contact with Sir Phillip Mawer all the time. Has he been contacted by ministers who are worried about possible conflicts of interest—perhaps holidays they have had in Black Sea resorts, or something like that?   

Sir Christopher Kelly: I am in contact with Philip Mawer. I am not sure I would say I am in contact with him all the time, but those are surely questions you must address to him rather than ask me.

Mr Prentice: He has not been in front of us for a year. I was just taking the opportunity to quiz you, since you must see him regularly. You tell us in your annual report, and you just told us a few moments ago, that a focus of your work is party political funding. When I raised the issue of tax exiles with you a year ago, and you had only been in post two weeks—   

Sir Christopher Kelly: Yes.

Mr Prentice: —I asked you if being a tax exile should disqualify a person from membership of Parliament. I had a Private Member's Bill at the time. You said, "I have absolutely no idea whether I should agree with it." I just wondered if you have formed a view in the 12 months since.   

Sir Christopher Kelly: Yes, I have formed a view. I remember that exchange, if I may say so, extremely well. I do have a view. I can see why being a tax exile and contributing large amounts to one political party is something which sticks in some people's throats. Of course, there are other people who do not pay tax in this country, possibly because they are below the tax threshold, who also, if they wish to, could contribute to a political party, but I do not think that is the main issue, if I may say so.

Mr Prentice: It is the issue I am asking about.   

Sir Christopher Kelly: Yes, but one can deal with issues of that kind or one can say: what is the main issue? The main issue seems to me the fact that any single individual is able to have a major influence on political parties because of their ability to provide large amounts of funding. I think the answer to the question, rather than banning particular individuals, who presumably are on the electoral register, from contributing to political parties, is addressing the issue of whether it is a reasonable state of affairs for anybody to be able to contribute large amounts to a political party or whether those contributions should be capped. If the contributions were capped, then the particular issue you have in mind would be dealt with.

Mr Prentice: Let us rephrase it. Let us leave the Lords to one side and let me ask you a very straightforward question. Should any UK citizen who is not a UK resident for tax purposes be allowed to donate money to a political party? The case that is in my mind, of course, is Lord Laidlaw, who over the past seven years has been the biggest donor to any British political party, the Conservatives, giving them over four million pounds, and over the past 12 months he has given the Conservatives over £100,000, and he is a self-confessed tax exile. So my simple question to you is: is it right or wrong for UK citizens who are not resident in the United Kingdom for tax purposes to bankroll British political parties?   

Sir Christopher Kelly: I understand why you ask the question. Simple questions, of course, are not always capable of having simple answers.

Mr Prentice: You are hard work, you know!   

Sir Christopher Kelly: Let me respond. As I understand it, the law allows people who are not resident in this country to vote in elections, and that is quite an important principle and saying there is something more important about funding than there is about voting is quite interesting. I repeat, I think the issue is not residence, unless you want to ban people who are not resident from having any influence on electoral outcomes in this country. It is about the ability of people with more substantial means to fund political parties without there being a cap on the size of their contributions.

Mr Prentice: I cannot rework the question to make it more simple, but people would have heard your response.

Later………

 Mr Prentice: I do not think Parliament is a den of thieves but there are millions of people out there, especially after the Lords revelations, especially after the Home Secretary is not staying in an official residence which is provided for her, who think that our act needs to be cleaned up and pretty quickly. You are Chairman of the Committee of Standards in Public Life, right at the apex, and if something is not right then it is your responsibility to take action.  

Sir Christopher Kelly: If I may say so, it is not my responsibility to take action. It is my responsibility to point to areas where action needs to be taken.

Mr Prentice: Are you doing sufficient about it?   

Sir Christopher Kelly: You clearly believe that we are not. I take a different view.

Mr Prentice: Yes. Away from that—it is almost like self-flagellation here—   

Sir Christopher Kelly: I am not disagreeing with the central point about the housing allowance, which is that it is capable of being exploited.

Mr Prentice: Okay. You have read the Committee's report on lobbying.   

Sir Christopher Kelly: I have.

Mr Prentice: You told us earlier that you agree with a mandatory register of lobbyists, which was a central recommendation. The other big thing that we looked at was the so-called revolving door issue. We said, "We are strongly concerned that former ministers in particular appear to be able to use with impunity the contacts they have built up as public servants to further a private interest. We think that is unacceptable." My simple question is: do you agree with what the Committee has said on this whole issue of revolving doors?   

Sir Christopher Kelly: I certainly think there are issues about the way in which ministers go on to take up paid employment and the arrangements which exist for giving them advice about that. Do I think that someone who has had a successful Parliamentary career should never be able to do anything which draws on experience they have gained from—

Mr Prentice: We are not saying that and you know we are not saying that.   

Sir Christopher Kelly: No, I know you are not.

Mr Prentice: That is just a red herring.   

Sir Christopher Kelly: It is not a red herring.

Mr Prentice: Yes, it is.   

Sir Christopher Kelly: Because, as so often with these things, they are not black and white. Of course a minister should not be able to leave office and immediately go and work for a company which pays him money in relation to some activity he has had before. As I said: do I think the arrangements currently in place to make sure that that does not happen are working effectively. Answer: Your own evidence and observations suggest that they are not working adequately.