Residents of North Tyneside might well have recognised him, because it was Stephen Byers, their MP. He is more widely remembered as a former transport minister who was close to Tony Blair.
The woman on the opposite side of the table was an executive from a communications company, seeking to hire Byers because of his connections in government.
What Byers did not know was that hidden between them in a bowl of potpourri was a tiny video camera pointing directly his way. The woman was an undercover reporter working for The Sunday Times and Channel 4’s Dispatches programme.
Would he use his government contacts to help influence policy on behalf of a business client? Would he lobby ministers? Would he provide confidential information from within the corridors of power?
The reporter barely had a chance to ask the questions because Byers was so keen to spill everything out. “I’m a bit like a sort of cab for hire,” he volunteered.
It is 16 years since Mohamed al-Fayed unleashed a political scandal by revealing that you can “hire an MP the way you hire a London taxi”. Since then the rules on lobbying by MPs have been tightened up considerably — but has anything really changed?
Here was Byers, a serving MP with three outside jobs, describing himself in the same terms. Not only would he lobby ministers on behalf of the “executive” but he also gave examples of occasions when he claimed he had successfully done this before.
He said he had saved hundreds of millions of pounds for National Express through his contacts with Lord Adonis, the transport minister, and had delayed and amended food labelling proposals for Tesco after phoning Lord Mandelson, the business secretary. “It’s a bit confidential, so keep it very much to yourself,” he added.
On Friday Sir Alistair Graham, the former parliamentary standards commissioner, said that if Byers’s claims were true he may have breached parliament’s strict rules on paid advocacy. (Code of Conduct at the bottom of the article- t_g.) Over the past two months a joint investigation secretly interviewed nine MPs — including four former cabinet ministers — who are leaving the Commons this spring.
The MPs were told that Anderson Perry, a fictitious US communications company, was forming an advisory board and wanted to hire them to sit on it. Meeting rooms were booked in a central London office block and the MPs were invited for informal interviews.
As the interviews progressed, the reporter posing as an Anderson Perry executive gently inquired about how much lobbying work the MPs were willing to do on behalf of her company’s clients.
The responses of the MPs varied greatly. Several were clearly seeking to cash in on their contacts and experience, some were keen to start before leaving parliament and some claimed they had already done similar work while serving as an MP. Others said they were hoping to be elevated to the Lords which would open new doors for them.
Among the high-profile figures was Patricia Hewitt, the former health secretary, who charged £3,000 a day for a range of advice and services that included helping to influence legislation. Geoff Hoon, the former defence secretary, said he wanted to translate his knowledge and contacts into cash and told the undercover reporter “I’m yours” — once he had retired as an MP.
Margaret Moran, the Labour MP who decided to stand down after being asked to pay back £22,500 in expenses, boasted that she could ring her “mates” in the “girls’ gang” for a client. She named them as Jacqui Smith, Hazel Blears, Caroline Flint and Harriet Harman.
Byers, 56, had announced his decision to quit parliament to “pursue other interests” in November last year. His five-year ministerial career began inauspiciously when as schools minister he famously multiplied 7 times 8 and answered “54”.
After spells at the Treasury and the Department of Trade and Industry, he was forced to resign as transport secretary in 2002 after his special adviser was revealed to have suggested that the 9/11 terror attacks were a good opportunity to bury “bad news” stories.
As a backbench MP he has taken on work as a consultant to a Lebanese construction company and became chairman of its Yorkshire water treatment subsidiary and another company that promotes links between Ukraine and the European Union. Byers was in Dubai working on a desalination project for the construction company when the reporter first called him in February. They arranged to meet the following week.
From the start of the meeting Byers appeared keen to work for the fictitious company and was quick to flag up his impeccable political connections. “I still get a lot of confidential information because I’m still linked in to No 10,” he told the reporter.
An extra string to his bow was his famous friend. “I see Tony Blair every month and you’ll probably find a lot of your clients really quite like him,” he said. “If there’s an event ... we could have a word with Tony, say come along for a drink.”
When the conversation turned to clients that might wish to influence legislation, Byers leapt at the opportunity, suggesting he should start in April when parliament had been dissolved for the general election and most politicians would be out campaigning for their party. “It’s a great time if there’s an issue where your clients actually want to get a regulation changed or some law amended. That’s the time to get in to see the civil servants. Because there’s no ministers around, they’ve got more time,” he said.
He was happy to ring ministers, talk to civil servants and arrange meetings and was confident of his ability to open doors. “It’s all part of the democratic process really and ... I can’t think of any occasion when someone has said no to a meeting,” he said.
To help the reporter through the democratic process, he charges a fee. “It’s usually between £3,000 and £5,000 a day, that’s the sort of wage,” he said. Expenses were extra.
Part of the service was to use his inside knowledge of government. He described himself as the “architect” of the Enterprise Act and could therefore offer help to any clients “operating as restrictive practice” or “price-fixing”. He said: “That’s an animal I created, for better or worse ... but you always know ways around it, well actually ... there’s an ace you can play there.”
To show that he could produce results, Byers spoke candidly about an occasion when he claimed to have successfully lobbied former cabinet colleagues. One of his “trump cards”, he said, was his friendship with Lord Mandelson.
Byers recounted an occasion when Lucy Neville-Rolfe, the corporate and legal affairs chief at Tesco, rang him because she was concerned about a possible food labelling regulation being proposed by Hilary Benn at the Department for Environment, Food and Rural Affairs.
Rather than approach Benn, Byers chose a more circuitous route. “So you ring Peter Mandelson and say, ‘Peter, did you know what Hilary Benn’s about to do? ... He’s going to introduce a regulation which is going to have this huge nightmare in every supermarket’.”
As a result, Byers claims, “Peter got it delayed and then got it amended.”
He regards his greatest success, however, as his “work” for National Express when the company was in negotiation with the government over its loss-making rail franchises that cost £1.4 billion.
This is how he tells the story: “They approached me, June of last year, and said, ‘We’ve got a huge problem. We want to get out of the East Coast main line but not pay a huge penalty and we want to keep the other two franchises as long we can’.
“So between you and I, I then spoke to Andrew Adonis, the transport secretary, and said, ‘Andrew, look, they’ve got a huge problem. Is there a way out of this?’ And then we, we sort of worked together — basically, the way he was comfortable doing it and you have to keep this very confidential yourself.”
“He [Adonis] said we shouldn’t be involved in the detailed negotiation between his civil servants and National Express but we can give them a broad steer. So we basically got to a situation where we agreed with Andrew he would publicly be very critical of National Express and talk about, ‘I’m going to strip you of the franchise’ and be very gung-ho.
“And we said we will live with that and we won’t challenge you in the court, provided you then let us out by December, by the end of the year, and we can keep the other two franchises for a little longer. So, and that’s what we managed to do.”
Adonis criticised the company on July 1 and it escaped without a penalty, leaving the railway line in the hands of the taxpayer. Critics have said the exchequer is likely to lose hundreds of millions of pounds when it sells the franchise to a new operator.
The story does not end there. After the meeting, Byers sent a quick note to the reporter saying it was “good to meet”. The next day, however, he sent an email effectively claiming that he had lied throughout the meeting.
“In reality I have not been engaged in lobbying ministers here in the UK. My statements yesterday would have given the opposite impression and I would like to take this opportunity to withdraw them,” he wrote.
This applied to the conversations with Mandelson and Adonis. Had Byers become suspicious about the fictitious Anderson Perry? In a statement on Friday he said he had “made some exaggerated claims” and on reflection “regretted that my misleading comments might be taken seriously”.
National Express said it had held discussions with a number of MPs whose constituencies were along the East Coast main line and Byers had been one of them. The company said it had not paid Byers: “Any actions that Mr Byers may or may not have taken following our discussions with him were entirely of his own choice.”
A source close to Richard Bowker, who was chief executive of National Express at the tims, said Byers’s version of events told to the undercover reporter was a “close footprint” that was “pretty accurate”. He said he understood the relationship with Byers was “commercial” and that he had been acting on the company’s behalf. The source added that Byers had written to Adonis and met him after the decision was taken in July to terminate the franchise.
If Byers’s relationship with National Express was commercial, then he should have registered it with the House of Commons. He did not.
Adonis’s department issued a statement on Friday saying: “There is no truth whatsoever in the suggestion that Byers came to any arrangement with Andrew Adonis on any matter relating to National Express.” However, it did not deny that Byers had spoken to Adonis.
Tesco also last week denied ever “engaging” Byers to deal with food labelling regulations. It said in a statement: "We did not speak to Mr Byers on food labelling, regulation or indeed any other issue. These claims are completely fictitious and Mr Byers has acknowledged this to us." Mandelson said he had “no recollection” of talking to Byers about the issue.
Two weeks after the Byers meeting, another well known face was waiting in the foyer of Anderson Perry’s rented office. It was Patricia Hewitt, who was a minister for nine years in the Treasury and the departments of trade and health.
Since stepping down in 2007 she has taken four appointments with BT, Alliance Boots, Barclays Capital and a private equity firm called Cinven which she says pays her £60,000 a year for 18 days’ work. She told the reporter she was leaving parliament to spend more time with her family and pursue her business interests.
Hewitt was much more measured than Byers. She acknowledged that she could help the fictitious company’s clients to influence legislation. “If you’ve got a client who needs a particular regulation removed, then we can often package that up [for a minister],” she said.
It was not a role she wanted to do full-time. She listed five ways that a company could contact a minister including by funding think tanks and seminars, hospitality, sponsoring events in party conferences, contacting special advisers and finding a connection with the minister’s constituency.
When asked for examples of the type of consultancy work she had done previously, Hewitt spoke at length of her involvement with Partnerships in Care (PIC), a private mental service provider owned by Cinven. She claimed it was through her efforts that PIC was able to give evidence to the Bradley report, a government study about providing care outside prison for criminals with mental health problems.
The report had recommended the creation of a Home Office and Department of Health advisory group. Hewitt claims she paved the way for PIC to be the only contractor on the group. The following is Hewitt’s account, recorded in the meeting.
She said that Lord Bradley had been talking only to the public sector when producing his report into mental health services for criminals.
“So I was able to get them [PIC], basically, in front of Bradley, and I got Bradley to go and, actually I think he visited one of their establishments, he took evidence from them,” she said.
The Health and Criminal National Advisory Group was formed as a result of the report and Hewitt claimed: “I was able to persuade the chairman of that taskforce that there would be a private sector, independent sector, representative on that taskforce.”
Her client, PIC, became the representative on the advisory group as it was the “most active” private sector company in respect of the Bradley report. She continued:
Hewitt: I’ve kind of got them into the system where they can build the relationships, they can make the arguments.
Reporter: Yes, with a view to getting further contracts, presumably, and being able to expand their work?
On Friday PIC said that its involvement in the Bradley report had been nothing to do with Hewitt and arose solely out of its membership of the Confederation of British Industry. The company said it was invited to join the advisory group because of its leading market position. Hewitt’s solicitor said she had “no influence” on PIC’s selection.
During the meeting Hewitt also claimed she had “spoken to ministers and civil servants” about changing a carbon reduction regulation that helped her client Cinven and other private equity companies.
However, Cinven says she was not hired to “influence” legislation but to advise on a possible amendment. Hewitt’s lawyers said she was merely advising on how the regulations might be changed in future to make them fairer.
In a statement Hewitt said: “I have always observed the code of conduct for members of parliament. The code makes it clear that MPs are free to take on outside appointments, subject to the conditions which I have always observed.”
Code of conduct
The code of conduct for MPs bans a member from acting as a “paid advocate” in any proceeding of the House of Commons, such as promoting a bill, tabling an amendment or speaking.
It also makes clear that an MP is forbidden from taking money to “advocate or initiate any cause or matter on behalf of any outside body or individual” when approaching, writing or talking to ministers and servants of the crown.
There are no rules to prevent former MPs from lobbying. Former ministers have to consult an advisory committee after leaving office if they wish to take up a new job. This ceases to be the case after two years.
MPs must register outside earnings and paid work. “A financial interest should be declared if it might reasonably be thought by others to influence the speech, representation or communication in question,” the code states.