Ex-chancellor faces no sanctions for contacting Treasury on bank's behalf

Philip Hammond's approach on behalf of OakNorth Bank “would have been more appropriate” coming from someone else, minister says
Ex-chancellor Philip Hammond. Photo: amer ghazzal/Alamy Live News

Former chancellor Philip Hammond will not be sanctioned for contacting a top Treasury official on behalf of a bank, the Cabinet Office has said.

Lord Hammond was reprimanded by the Advisory Council on Business Appointments this summer after it emerged he had contacted the second permanent secretary at his former department on OakNorth Bank’s behalf last summer.

Acoba found Hammond had breached lobbying rules by contacting Sir Charles Roxburgh well within two years of leaving government – the standard timeframe within which ex-ministers are banned from lobbying and using their government contacts to secure business or influence decisions.

Committee chair Eric Pickles wrote to then-Cabinet Office minister Michael Gove in August following a combative back-and-forth with the ex-chancellor, alerting Gove to the breach and saying it was up to the Cabinet Office “to decide what appropriate action to take”.

Hammond had argued that he was following up on an offer from the bank, for which he was working as a senior adviser, not to drum up business but to provide software to the government for free to aid the coronavirus response.

In a letter to Pickles this week, Cabinet Office minister Nicholas True said the Cabinet Office had “noted” Acoba’s view that Hammond’s contact with Roxburgh was not in keeping with the lobbying rules.

However, he said the department did not believe sanctions were necessary.

“We also note there has already been public criticism from your committee,” he added. Acoba correspondence is published in the name of transparency, but the exchange between Pickles and Hammond shows the ex-politician considered taking out an injunction to prevent the messages being published.

Lord True said in his letter that the contact between OakNorth and the Treasury “would not have been disallowed” had it come from another individual representing the bank, but that it “would have been more appropriate” coming from someone else.

He also said Hammond’s interests had been declared in the Lords register, and that he was transparent about who he was representing.

True also noted the “broader context” that the government was seeking help from businesses to help its response to Covid.

He also said the rules around lobbying needed to be “strengthened and clarified”.

“We will take steps to highlight to departments that in their communications they should be conscious of the restrictions on direct engagement with those subject to business appointment conditions,” he added.

The lobbying rules have come under scrutiny in recent months, following revelations that former prime minister David Cameron lobbied cabinet ministers and senior officials on behalf of Greensill Capital.

A more recent corruption scandal in which ministers attempted a rushed overhaul of the standards process for MPs, before a backlash prompted a U-turn, has drawn further attention to the matter.

The Committee on Standards in Public Life has called for a series of reforms including the introduction of “meaningful sanctions” for politicians who break lobbying rules and for Acoba and government departments to be given the power to issue a five-year lobbying ban for top officials.

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