HOUSE OF LORDS

Committee for Privileges and Conduct

3rd Report of Session 2013–14

The Conduct of Lord Dannatt

Ordered to be printed 10 June 2013

Published by the Authority of the House of Lords

London : The Stationery Office Limited £11.50

HL Paper 20 The Committee for Privileges and Conduct The Committee for Privileges and Conduct is appointed each session by the House to consider questions regarding its privileges and claims of peerage and precedence and to oversee the operation of the Code of Conduct. Detailed consideration of matters relating to the Code of Conduct is undertaken by the Sub- Committee on Lords’ Conduct.

Current Membership The Members of the Committee for Privileges and Conduct are: Baroness Anelay of St Johns Lord Bassam of Brighton Lord Brooke of Sutton Mandeville Lord Eames Lord Hill of Oareford Lord Howe of Aberavon Lord Irvine of Lairg Lord Laming Lord Mackay of Clashfern Lord McNally Baroness Manningham-Buller Lord Newby Baroness Royall of Blaisdon Baroness Scotland of Asthal Lord Scott of Foscote Lord Sewel (Chairman)

The Members of the Sub-Committee on Lords’ Conduct are: Lord Cope of Berkeley Lord Dholakia Lord Irvine of Lairg Baroness Manningham-Buller (Chairman) Baroness O’Neill of Bengarve The Code of Conduct and the up-to-date Register of Lords’ Interests are on the Internet at http://www.publications.parliament.uk/pa/ld/ldreg.htm

General Information General information about the House of Lords and its Committees can be found at http://www.parliament.uk/business/lords

Contacts General correspondence should be addressed to the Clerk of the Committee for Privileges and Conduct, House of Lords, London, SW1A 0PW (telephone 020 7219 3112).

Correspondence relating to the work of the Sub-Committee on Lords’ Conduct should be addressed to the Clerk of the Sub-Committee on Lords’ Conduct, House of Lords, London, SW1A 0PW (telephone 020 7219 1228). THE CONDUCT OF LORD DANNATT 1. Annexed to this report are reports by the Sub-Committee on Lords’ Conduct and the Commissioner for Standards relating to a complaint against Lord Dannatt. 2. The Commissioner has dismissed the complaint, and we therefore make this report for information. 4 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

ANNEX 1: REPORT FROM THE SUB-COMMITTEE ON LORDS’ CONDUCT 1. The Commissioner for Standards has submitted the attached report dismissing a complaint made against Lord Dannatt. 2. The complaint was based on articles in the Sunday Times which alleged that Lord Dannatt (and other retired senior military officers) used his influence within the Ministry of Defence to lobby on behalf of commercial interests. 3. The Commissioner found Lord Dannatt not to have breached the Code of Conduct as there was no evidence that he had used his position to exercise parliamentary influence for personal gain, or to provide parliamentary advice or services. The Commissioner further found that he entered into no relationship which gave rise to an interest which had to be registered. 4. We recommend that the Committee for Privileges and Conduct should make a report to the House on this case. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 5

ANNEX 2: REPORT FROM THE COMMISSIONER FOR STANDARDS

Summary of complaint 1. On 14 October 2012 The Sunday Times newspaper published a series of related articles under the front-page headline, “Arms firms call up ‘generals for hire’”. The articles claimed that retired senior military officers had boasted of their contacts with ministers and former colleagues and consequent ability to lobby for military procurement contracts. Relevant extracts from The Sunday Times website are in appendix A. 2. Two of the retired senior officers named in the articles were and are members of the House of Lords: General the Lord Dannatt GCB CBE MC DL and Air Chief Marshal the Lord Stirrup GCB AFC. 3. The articles in The Sunday Times generated widespread coverage. On 16 October 2012 Lord Laming wrote to me in his capacity as Convenor of the independent Crossbench Peers. He invited me to investigate the allegations against Lord Dannatt (and Lord Stirrup) (appendix B). The allegations contained in The Sunday Times were also raised in the House on the same day by Baroness Royall of Blaisdon, and it was confirmed that the allegations had been formally referred to my office (HL Deb, 16 October 2012, cols 1370–73). 4. I decided to treat Lord Laming’s referral as a complaint for the purposes of paragraph 103 of the Guide to the Code of Conduct. Lord Laming subsequently and very helpfully confirmed that that was his intention. He made clear that he was not personally alleging misconduct by Lord Dannatt (or Lord Stirrup)—rather that he felt an investigation was appropriate. I am reporting separately on Lord Stirrup, though many of the facts in his case are the same as in Lord Dannatt’s case. 5. The Code of Conduct for Members of the House of Lords is intended— “(a) to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary duties; the Code does not extend to Members’ performance of duties unrelated to parliamentary proceedings, or to their private lives; (b) to provide openness and accountability necessary to reinforce public confidence in the way in which Members of the House of Lords perform their parliamentary duties.” (Paragraph 3 of the Code of Conduct.) 6. Thus, my investigation is limited to the question of whether or not Lord Dannatt breached the Code of Conduct, not his remarks or behaviour on other matters. 7. I wrote to Lord Dannatt on 17 October 2012 (appendix C) to advise that I was investigating a complaint against him and specifically drew his attention to the following provisions of the 2010 Code of Conduct— “8. Members of the House: (a) must comply with the Code of Conduct; (b) should always act on their personal honour; (c) must never accept or agree to accept any financial inducement as an incentive or reward for exercising parliamentary influence; 6 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

(d) must not seek to profit from membership of the House by accepting or agreeing to accept payment or other incentive or reward in return for providing parliamentary advice or services. 10. In order to assist in openness and accountability Members shall: (a) register in the Register of Lords’ Interests all relevant interests, in order to make clear what are the interests that might reasonably be thought to influence their parliamentary actions […] 13. Members are responsible for ensuring that their registered interests are accurate and up-to-date. They should register any change in their relevant interests within one month of the change.” 8. Lord Dannatt replied in a letter dated 6 November 2012 (appendix D).

Key facts 9. The allegations of misconduct by the member concerned arose solely from a newspaper story. The background to the coverage in The Sunday Times appears to be uncontested, namely that journalists employed by The Sunday Times posed as “strategic consultants” and approached Lord Dannatt. The journalists purported to work for a company called Heller Lightfoot, which was acting on behalf of a South Korean technology company. 10. The Heller Lightfoot personnel, who called themselves Jeremy Beaufort and Anabel Asher, established contact with Lord Dannatt and a meeting was arranged for 2 October 2012 at Lord Dannatt’s official residence in the Tower of London. That meeting took place and was covertly recorded by the Heller Lightfoot personnel. The subsequent articles in The Sunday Times are all based on the audio record made of the meeting in the Tower of London on 2 October 2012. 11. I wrote to the editor of The Sunday Times on 17 October 2012 requesting access to the recording made by his journalists of their meeting with Lord Dannatt. Regrettably, it then took me until 5 February 2013 to secure the relevant transcripts. The relevant correspondence between The Sunday Times and me is in appendix E and the transcript of the meeting with Lord Dannatt is in appendix F. 12. The scenario evidenced in the transcript is relatively straightforward. The Heller Lightfoot representatives claimed that the South Korean company they represented had developed innovative technology which could revolutionise aspects of military capability. Specifically, the company had developed two unmanned aerial vehicles (UAVs), one being man-portable and the other carrying ground-penetrating radar. Heller Lightfoot were seeking to assist their client in breaking into the UK’s defence market. Their initial thoughts were that the creation of an advisory board was an essential preliminary step. They were approaching Lord Dannatt with a view to his joining such an advisory board. His role and indicative remuneration were discussed. The discussion also covered how best to break into the UK’s defence market and the contacts and expertise retired senior military personnel could contribute to such a venture. 13. Lord Dannatt in his response to me said that he had done nothing to compromise the standards of the House of Lords and had not used his membership of the House to influence any matter inappropriately. He stated that he would register any relevant contractual interest in the Register of Lords’ Interests, but at the time of the article his register entry was accurate. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 7

Findings 14. I reiterate that my role is to investigate allegations of breaches of the Code of Conduct and not to police members’ non-parliamentary activities. I have not found any evidence that Lord Dannatt breached the Code of Conduct. The only references to the House of Lords in the transcript are limited to briefings arranged by ministers and visits by the serving Chiefs of Staff. Lord Dannatt made no claims of using his position as a member to exercise parliamentary influence for personal gain. Nor did he offer to provide parliamentary advice or services. He entered into no relationship which gave rise to an interest which had to be registered. Equally, there is no evidence that he had failed to register any other defence-related interest. Thus, I dismiss this complaint against Lord Dannatt.

Paul Kernaghan CBE QPM Commissioner for Standards 8 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Appendix A: Articles in The Sunday Times, 14 October 2012

Arms firms call up ‘generals for hire’ Top-ranking retired military officers have been secretly filmed boasting about lobbying to win multi-million-pound defence deals for arms firms in breach of official rules. The “generals for hire” can be exposed after a Sunday Times investigation recorded them offering their contacts with ministers and former colleagues for six- figure sums. During a three–month investigation into the revolving door between the Ministry of Defence (MoD) and private arms companies:  Lieutenant-General Sir John Kiszely, a Falklands war hero and former head of the Defence Academy, confided that he could use his role as president of the Royal British Legion to push his clients’ agenda with the prime minister and other senior figures at Remembrance Day events. He also bragged about lobbying on a multimillion-pound contract that was in official “purdah”.  Lieutenant-General Richard Applegate, a former MoD procurement chief, described a secret and successful lobbying campaign in parliament for a £500m military programme on behalf of an Israeli arms company. He was barred from lobbying at the time because he had only recently retired.  Admiral Sir Trevor Soar, the commander of the naval fleet until last March, boasted that he would “ignore” his two–year ban on lobbying ministers and said the system used to enforce the rules was “broken”.  Lord Dannatt, the former head of the army, candidly talked about sidestepping a ban on discussion of a £400m contract by “targeting” the MoD’s top civil servant, with whom he went to school. All four officers have denied doing anything wrong and said they always had the best interests of the services at heart. Last night the MoD launched an investigation. “We will be looking to see if any of these individuals have broken any rules,” it said. “Former chiefs acting in a commercial capacity should not have any privileged access to the MoD and we will put in place measures to ensure this.” The watchdog that vets the private jobs taken by departing public officials described the allegations as “very serious”. Lord Stirrup, who was chief of the armed forces, and General Sir Mike Jackson, former head of the army, also boasted of “old friends” in the MoD who would help in a lobbying campaign—though they did not suggest breaking any rules. The Sunday Times began its investigation after being warned by a former civil servant that MoD procurement was being “contaminated” by retired generals lobbying for arms firms. Galloping greed of the old warhorses: An undercover investigation has found former military chiefs willing to cash in on their contacts, Insight reports 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 9

Lord Dannatt knew there was no better place to impress the two executives seeking his services than his weekday apartment in an exclusive gated residence that no amount of money could buy. The front door of his private lodging in the Tower of London is guarded by a beefeater and, as the former head of the army was quick to point out, its former occupants include Thomas More, Guy Fawkes and Anne Boleyn. “Is this all yours?” inquired one of the visitors as she was ushered into his drawing room overlooking the Thames. “It’s the Queen’s, really, without getting too picky about it;” Dannatt replied. The executives had called on Dannatt, who holds the ceremonial position of constable of the Tower, to discuss hiring him to lobby for a South Korean company that wanted to sell a cutting-edge drone to the British armed forces. The former army chief would be given a role on the company’s advisory board, but the executives made no bones about it: what they really wanted were his contacts. The fee on the table was £100,000 a year for two days’ work a month, which Dannatt described as “reasonable”. What he did not know was that the two executives sipping tea from his fine bone china cups were undercover reporters from The Sunday Times. As he began to explain how he would pull strings with former colleagues, from the head of the armed forces down, their hidden cameras were rolling. Dannatt wanted to know that the drone he would be pushing was a good bit of kit. With that proviso, he was happy to tap up Bernard Gray, the civilian chief of defence procurement, on their behalf. “I was rather aiming … to have a one-to- one session with him,” he said. “I probably would try and put a lunch date in his diary, and now clearly this conversation would make that even more attractive.” It quickly became clear that Dannatt—a former adviser to David Cameron—was no stranger to this kind of back-door lobbying. He told the reporters he was preparing to circumvent government procurement rules by engineering a dinner meeting with the top civil servant at the Ministry of Defence (MoD) so that he could lobby for a £400m contract. He was not alone among his former comrades. The ex-army chief was one of six top-ranking officers from all three forces who were filmed interviewing for the lucrative lobbying role. The meetings uncovered a world in which the country’s former military giants can be hired by a company seeking a slice of the MoD’s multi-billion-pound budget. They variously offered to pull strings with former subordinates or bend the ear of high-ranking chums to promote the interests of the private company that was offering to pay them. The conversations would mostly take place in unofficial settings such as dinners, drinks parties and during private phone calls. This newspaper began its three–month investigation when a former Whitehall permanent secretary warned that retired officers were corroding the MoD’s strict procurement system by lobbying for private firms—giving rise in his mind to the possibility that frontline troops might not get the best kit. The reporters approached eight of the country’s highest-ranking retired officers to see what they would offer for the right fee. Two showed no interest; the others agreed to discuss the proposal. All stressed that they had the best interests of the armed forces at heart and would not work for a company whose products they did not believe in. 10 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Dannatt, who retired as chief of staff three years ago with a pension pot worth £1.8m, already had four paid roles with private firms to top up the £85,000 a year he gets from the MoD. During the meeting earlier this month, the 61-year-old peer said he was also being paid to represent Capita Symonds, which is part of a consortium bidding for a £400m contract to manage the MoD’s estates. (He was yet to declare the role on his House of Lords register of interests but did so hours after being confronted by The Sunday Times on Friday.) Dannatt lamented the fact that the bidding for the management contract had entered the closed period where the interested parties could no longer lobby the MoD—but he had found a solution. “Philip Hammond, the defence secretary, will make the decision largely on the advice of Jon Thompson, the permanent secretary … who I’m rather targeting to talk to,” he said. He confided he had pulled strings to ensure he is seated next to Thompson at a dinner tomorrow hosted by the SSAFA (Soldiers, Sailors, Airmen and Families Association), the services charity, at Banqueting House in Whitehall. He had claimed he and Thompson went to the same school, he disclosed. “That’s why I said to the person organising the SSAFA dinner that I’d be fascinated to sit next to him, because … it would be good to catch up from school days.” Dannatt was educated at St Lawrence college, a boarding school in Ramsgate, Kent. Under the MoD’s procurement system, civil servants are not allowed to have unofficial discussions with companies in the advanced stages of bidding for government contracts. When confronted by The Sunday Times last week Dannatt denied that he had told the reporters he was planning to lobby Thompson. “I am quite clear that lobbying at this stage of a contract bid is against the procurement rules and I have neither the intention nor the inclination to do this,” he said. Dannatt added that he had not yet been paid by Capita Symonds and had no contract with it. Capita said it had not instructed Dannatt to lobby for the bid, “which would not be permitted at this stage”. The company said it always adhered strictly to procurement rules and would not condone any activity that breached them. Dannatt was not the only general to boast about using his military contacts to gain an advantage over the competition during the bidding process. Reporters had met Lieutenant-General Sir John Kiszely, a Falklands war hero and former director of the Defence Academy, over tea and biscuits at the Institute of Directors in central London at the end of last month. It soon became clear they had a seasoned lobbyist on their hands. Kiszely boasted that four years after retirement he kept his military connections “current” by mixing with top brass through his being president of the Royal British Legion and other honorary roles. He told the reporters: “Part of it is having the contacts to know who to talk to because … out of 50 generals, there’s probably only 10 worth talking to on that subject and only five who have their hands on the levers.” 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 11

Asked by a reporter if he knew them all, he grinned: “I do, actually.” Kiszely said he was working as an adviser for Babcock International, which is in the running for “regional prime” contracts worth up to £4.35 billion to take over the management of MoD properties. The bidding had reached a critical stage, he said, and the MoD was “in purdah to talk to any of the companies” involved. However, he had found a pretext to schedule a meeting with two friendly brigadiers who were “going to be responsible for recommending who does the contract”. “I shall say to them … ‘I also work for Babcock, how’s it going?’ And they will tell you. But if you wanted to book in not knowing them on behalf of Babcock … you wouldn’t get to talk to them. Their staff would say, ‘Absolutely not’.” Kiszely proudly claimed he had introduced the Babcock executives who had hired him to his friend General Sir David Richards, the chief of the defence staff, General Sir Peter Wall, the head of the army, and General Sir Nick Parker, the commander of land forces. Babcock said yesterday that Kiszely had never been instructed to lobby anyone over the regional prime contract with which, it said, he had no involvement. It added that the two brigadiers he had spoken to held no sway over the deal. Kiszely claimed at a meeting with the reporters that his various defence clients also had the benefit of his close personal friendship with Andrew Robathan, the armed forces minister. At a subsequent meeting a fortnight later, he name-dropped Robathan again. “He and his wife Rachel are coming to stay with us some time over Christmas,” he said. “He’ll say, ‘What are you doing?’ And you know, it’s those sorts of conversations … he then goes back to the office and says, ‘Hey, that sounds like an idea, write me a brief on that’.” Kiszely changed his story when confronted by this newspaper last week. He said he had not raised Babcock or the regional prime contract in his meeting with the brigadiers. He denied having any meetings with Robathan this year, and said he had no plans to host him over Christmas. Robathan said he had met Kiszely “infrequently” and had never discussed his private clients. Retired military officers are supposed to be prevented from exploiting “privileged access to contacts in government or sensitive information” for two years after leaving office by the Advisory Committee for Business Appointments (Acoba). The body is charged with monitoring the “revolving door” between government and industry and can ban officers from taking private jobs for up to six months after leaving office and from lobbying for up to two years. Dannatt and Kiszely are no longer bound by the bans imposed upon them and are free to lobby, except when working for firms in the final stages of bidding for big defence deals. However, Acoba has no powers to punish those who begin lobbying while they are still subject to the ban. The flimsiness of its powers was laid bare by two top- ranking officers from the army and navy who revealed to the undercover reporters how brazenly the rules can be flouted. In a London hotel Admiral Sir Trevor Soar hesitated when asked if he would be willing to lobby ministers on behalf of the fake South Korean company, but quickly appeared to overcome his qualms. 12 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

“I have to be slightly careful of lobbying ministers. There’s no reason I can’t see them but there’s again some criteria on that,” said Soar, who retired as commander in chief of the naval fleet earlier this year. “So how do you get round that?” asked one reporter. “You just basically ignore it,” came the prompt reply. Soar said that the rules “have no legality” and he dismissed the system for enforcing them as “broken”. He was keen to assure the reporters of his credentials for the lobbying job they were hiring him to do. “I’ve had six jobs in the Ministry of Defence, so … I’m a bit of a … MoD warrior. So I’m very familiar with the procurement, the way it … happens and certainly the politics—I know all the ministers,” he said. Once he was fully satisfied that the drone on offer was a decent bit of kit, Soar said he would approach his former subordinate, Rear Admiral Peter Hudson, and Rear Admiral Ian Jess, who he said had been given a new job in defence goods, which he had created personally before he left. “Are they chums of yours?” asked one of the reporters. “Yeah, they all worked for me. I was their boss … They’ve all done all right so I don’t think there is any antagonism there … We would target those individuals and get them interested,” Soar replied. The reporters had been introduced to Soar by his friend Lieutenant-General Richard Applegate, the former head of army procurement, who was also offering his services for hire. Applegate’s two–year lobbying ban had just expired, but he was not coy about boasting just how extensively he had flouted it while it was still in place. He proudly claimed he had spent the past 18 months orchestrating a secret campaign on behalf of an Israeli arms firm, successfully pressuring the government to release funds of £500m for a helicopter safety programme that he expected to enrich his client. Both Applegate and Soar joined the reporters for a celebratory dinner at the Goring hotel in London’s Victoria after their initial interviews. As they sipped champagne and leafed through a draft agreement, they came across something that alarmed them. “The word ‘lobbying’,” said Applegate, is “the sort of thing that can cause problems”. Soar was quick to agree: ‘‘Yeah, I mean theoretically we are banned from lobbying ministers for two years … The reality is we call it something different but the word lobbying would be contrary to the terms and conditions, and it would certainly apply to me as I only left the service in March.” Asked what he preferred to call it, Soar replied: “Consulting’’. When confronted last week, both men denied that they had broken the Acoba rules. Soar said all his private jobs had been given official approval and he was motivated by bringing “battle-winning equipment to the navy’’. Two of Britain’s best-known former top officers were also interviewed and spoke frankly about how easy it was for them to open doors at the MoD. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 13

Lord Stirrup, the former Air Chief Marshal Sir Jock Stirrup, retired as head of Britain’s armed forces two years ago when he was given a £430,000 one-off payment as part of his £2.9m pension pot. He was typically decisive when he met the undercover reporters earlier this month, mapping out a strategy in which he would “grill” top military officers and ministers on their behalf over private dinners at his house in London. “When do we start?” he asked after 30 minutes. He made clear he had never lobbied government for private clients but he was more than happy to start now. He named his “old friends” Wall and Air Marshal Stephen Hillier, the deputy chief of defence staff for military capability, as people he could lobby about the drone if he felt the technology was up to scratch. He would encourage his army contacts to tell the MoD: “God, you know, we really need this, this is the sort of capability our folks on the ground are going to need.” Asked whether he would be able to talk to ministers, Stirrup responded, “Yeah … the defence minister in the Lords is a friend … as is the minister of the armed forces. “If you’ve got ministers saying … this is just the sort of thing the armed forces need, we see that, then that’s going to be a great help,” he added. He added: “Other competitors in this market are doing exactly the sort of thing I’ve just been talking about. If you’re not doing it then, frankly, it’s going to be very, very difficult.” When confronted by The Sunday Times last week, Stirrup denied that he had offered to lobby for the reporters or gather intelligence from the MoD on their behalf. He said the meeting had only been an exploratory discussion. The former RAF chief is just emerging from his two–year ban on lobbying so would not have been breaking any rules. Nor would General Sir Mike Jackson, who led the army during the Iraq war. He has had a string of consultancies since retiring in 2006 with a £1.1m pension pot. Jackson met the reporters for lunch at an exclusive hotel in St James’s and immediately warmed to the task. He boasted that he could arrange a meeting with Wall, his “great mate”, in order to “dangle a fly on the waters” on the reporters’ behalf. General Sir David Richards, the head of the armed forces, and Jackson’s former subordinate, would also meet him, he said, because he would tell him: “Don’t forget, most of what you know, you learnt from me.” Later, over several glasses of white wine, the formidable retired general gave the reporters a glimpse of the link between serving officers and their former superiors. He would always have a hotline to “my boys”, he said.”You have done things together which sometimes are a bit tricky. And it doesn’t matter if you don’t see them for months, you just pick it up there and then … You drop straight into that … It’s mother’s milk. You grow up with it.” Last week Jackson said: “I have the highest regard for all senior members of the armed forces and certainly do not believe that they can be improperly influenced— nor would I dream of trying to do so.” 14 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Watchdog on March The official watchdog charged with vetting the private jobs taken by retiring public officials called on the head of the civil service to give this newspaper’s revelations his “urgent” attention. Lord Lang, the chairman of the Advisory Committee on Business Appointments, said: “We regard these allegations as very serious, and we are drawing them urgently to the attention of ministers, the head of the civil service and the permanent secretary of the MoD.” Former senior military officers must seek the committee’s permission before taking new jobs within two years of leaving the MoD. They are routinely banned from lobbying ministers or crown servants for up to two years. MPs have branded the committee “toothless” because it has no power to punish those who defy its rules. In July, the public administration select committee of MPs called for it to be scrapped and replaced with a statutory regulator.

Pot of gold Former senior military leaders are paid generous pensions from the public purse. Lord Dannatt left his role as chief of the general staff in 2009. He received a lump sum of up to £260,000 and has an annual pension of about £90,000 from a pension pot of £1.7m. Lord Stirrup retired as chief of the defence staff in late 2010 with a one-off exit package of £430,000. He receives an annual pension from the Ministry of Defence of up to £145,000 out of a pot of £2.9m. General Sir Mike Jackson retired as head of the British Army in 2006. He was awarded an exit package of £230,000 and now receives an annual pension of up to £80,000 from a pension pot of about £1.2m.

Appendix B: Letter from Lord Laming, Convenor of the independent Crossbench Peers, to the Commissioner, 16 October 2012 I am writing with regard to the Article ‘Arms firm calls up generals for hire’ that was published in The Sunday Times on 14 October 2012 and has understandably caused concern. In view of the fact that the article involved the conduct of two members of the Crossbench Group, Lord Dannatt and Lord Stirrup, who rightly enjoy high reputations, I would like to invite you to consider whether the allegations in the article constitute a breach of paragraph 8 of the House of Lords Code of Conduct. I am also sending a copy of this letter to Lord Dannatt and Lord Stirrup.

Appendix C: Letter from the Commissioner to Lord Dannatt, 17 October 2012 I am writing to you in my capacity as the Commissioner for Standards to advise you that I have received a complaint against you. I enclose a copy of the letter I have received from the complainant (Lord Laming, Convenor of the Independent Crossbench Peers). I also enclose a copy of the relevant press article from The Sunday Times of 14 October 2012. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 15

It appears on the basis of the complaint that you may have breached the following provisions of the 2010 Code of Conduct: 8. Members of the House: (a) must comply with the Code of Conduct; (b) should always act on their personal honour; (c) must never accept or agree to accept any financial inducement as an incentive or reward for exercising parliamentary influence; (d) must not seek to profit from membership of the House by accepting or agreeing to accept payment or other incentive or reward in return for providing parliamentary advice or services. 10. In order to assist in openness and accountability Members shall: (a) register in the Register of Lords’ Interests all relevant interests, in order to make clear what are the interests that might reasonably be thought to influence their parliamentary actions […] 13. Members are responsible for ensuring that their registered interests are accurate and up-to-date. They should register any change in their relevant interests within one month of the change. I would also draw your attention to the seven general principles of conduct identified by the Committee on Standards in Public Life and incorporated in the Code of Conduct. I have conducted a preliminary assessment of the complaint and believe it is appropriate and in the interests of all concerned that I investigate it. Therefore, I now invite you to respond in writing with a full and accurate account of the matters in question. A response by 7 November 2012 would greatly assist me in investigating this matter in a timely fashion. I attach for ease of reference a copy of the Code of Conduct for Members of the House of Lords and Guide to the Code of Conduct (second edition: November 2011).

Appendix D: Letter from Lord Dannatt to the Commissioner, 6 November 2012 Thank you for your letter of 17th October advising me that you hadh received a complaint against me from Lord Laming, Convenor of the Independent Crossbench Peers, following an article in The Sunday Times of 14th October 2012. I enclose a lengthy explanation of the circumstances surrounding the article in The Sunday Times in question. I trust that I have been able to provide a full and accurate explanation of the matters in question. Should there be any further matters that need further explanation or amplification, I am available at your convenience to meet you or provide any further information.

STATEMENT BY GENERAL THE LORD DANNATT IN RELATION TO THE SUNDAY TIMES ARTICLE ON 14th OCTOBER 2012

Narrative On 24th September 2012 I called in to my office in No 1 Millbank to check my Parliamentary email account as I had been away from London for some time. 16 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Amongst the emails, I found one from a person called Jeremy Beaufort who introduced himself in the email as the director of a strategic consulting company called Heller Lightfoot. In the email (a copy of which I enclose), was the request to meet over lunch or an evening drink in connection with a possible role on an advisory board being established by a Far East company who had apparently developed some leading edge technology which they claimed could “revolutionise” aspects of military capability. Curious to know more about these technologies, I replied a couple of days later inviting Jeremy Beaufort to ring me. He did so and we agreed that he would call on me at 3.30pm on Tuesday 2nd October in the Tower of London. I invited him to come to the Tower as I had a gap between two other appointments both of which were in the Tower, and were Tower business. The meeting would take place in Queen’s House, where I live, as I do not have an office in the Tower. On 2nd October, Jeremy Beaufort arrived for the meeting, accompanied by Anabel Asher, who he introduced as an assistant director of Heller Lightfoot. Both gave me their business cards, which I enclose. Both visitors were well dressed, polite and about 30 years old. I gave them a cup of tea. After a short preliminary conversation about Queen’s House and the Tower, the two visitors explained their proposition. They told me that their client was a South Korean defence manufacturing company who believed they had invented a mini unmanned aerial vehicle (UAV) and a ground-penetrating radar. In discussion they confirmed that the mini UAV would be man portable and able to send back real time live images to the user. As an infantry officer, I quickly appreciated the value of such a product as I did the other product which they claimed would help identify buried improvised explosive devices (IEDs). I was naturally and professionally ve1y excited about both products—their value on the front line in Afghanistan and elsewhere could be significant. My enthusiasm thoroughly engaged, the conversation then turned to how the South Korean client might go about marketing their products. I told them that I was not an expert in this field but it seemed to me that there were two broad options. One would be to take a stand at the next big trade fair and put their products on display, but I said I thought that was a poor approach as their competitors would quickly see what they had to offer. The other approach I suggested would be to take a more subtle approach and quietly let senior people know what they had to offer. Using a milita1y analogy, I recall suggesting that this would be an indirect approach and potentially more successful. They were very interested to know how one would go about this. I said that one would use opportunities as they presented themselves to tell senior people that these products existed. They pressed me on who I thought should be approached and I suggested that people like General Sir David Richards, Chief of the Defence Staff, Bernard Gray, Chief of Defence Materiel, and Air Chief Marshal Sir Stephen Dalton, Chief of the Air Staff, were the sort of people who would be interested. I said that in the course of attending briefings in the Ministry of Defence or social events it would be perfectly possible to have a word with such people about their products. However, in the conversation, I made clear that before I would be willing to advocate their products I would need to meet the South Korean company and view the products in operation. I presumed this mean visiting South Korea. I also said that it would be important to know whether the MOD had an existing requirement for such products and, if so, whether contracts had already been let. I suggested that BAe Systems and Thales were the most likely companies to be already competing for contracts and for all I knew might already have a contract, 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 17 in which case their bid would be in vain. I said that to find out the detailed situation it would be necessary to speak to more junior people, who I did not know, to discover the situation. The conversation then turned to how to go about establishing these contacts. I said. that if they were serious they would need to put a team together of senior and junior retired officers who could work on this project for them, with expertise across the three operational environments as I said I could see useful applications of their products for not just the Army, but for the Navy and Air Force too. I asked who else they had already talked to, but they declined to tell me for confidentiality reasons—an explanation which I accepted. Finally the conversation turned to remuneration. They asked me what my daily consultancy rate was which I told them it was £1,500 per day to which they replied that their client was thinking of paying rather more than that and mentioned either £8,000 per month or £100,000 per year. Somewhat surprised by that I recall commenting in a fairly neutral way that I thought that was “reasonable”, given that an unknown South Korean company would have to work hard to break into the European market. The meeting concluded after about an hour and I had the impression that they would be talking to other people but would revert to me in due course. Some days later I sent Jeremy Beaufort a fairly short email summarising for him what I thought was the best way to take their project forward. A little while after that he rang me to say that their South Korean clients would be in London in early October and would like to meet me. On the date in question the only engagement I could offer was breakfast. I suggested meeting at The Savoy as it was on my route from the Tower of London to Westminster. Nothing was, however, confirmed. On Friday 12th October, I received an email (enclosed) from Heidi Blake, Deputy Insight Editor of The Sunday Times. I realised then that the two “executives” from Heller Lightfoot were in fact journalists and that I had been caught in a sting operation by the newspaper. I contacted Paul Matthews of Birketts LLP to seek legal advice. Over the next few hours I put a statement together for The Sunday Times (copy enclosed) and alerted those who I felt needed to know about the forthcoming story. Among those I rang were: Sir Christopher Geidt, PS to HM The Queen (as Constable, I am the Queen’s Representative in the Tower), Sir David Brewer, Lord Lieutenant of London (I am a DL in London), Mr Richard Jewson, Lord Lieutenant of Norfolk (I am a DL in Norfolk), Mr Charles Mackay, Chairman, Historic Royal Palaces (I am on the Board), Mr Wesley Paul, Chairman, Royal Armouries (I am on the Board) and Mr Jonathon Goring, Managing Director, Capita Symonds, as I had mentioned Capita during the meeting with Heller Lightfoot. During my telephoning, General Sir David Richards rang me as the MOD and No l0 had heard about the likely story. I explained the background to all those to whom I spoke and sent them a copy of the statement that I had sent to The Sunday Times. On Saturday 13th October I spoke with Lord Bell to seek his advice handling of the issue as during the day most of the television and radio channels had requested an interview and most national newspapers had asked for comment. To all who asked for interviews, I declined but sent a copy of my statement. On Lord Bell’s advice, at 10pm that evening as the story broke in the early edition of The Sunday Times, I did live interview by telephone with Sky News. Thereafter I offered no further comment in order not to fuel the story further. 18 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Comment My overwhelming comment about this matter is the apparent absence of wrongdoing by the Heller Lightfoot “ executives” who approached me with a story which was itself a lie, sought a meeting with me based on that lie, a meeting that was then granted in good faith, conducted on the basis of that lie, participated in by me in good faith, moreover hosted in my own private space within the Tower of London, but then the substance of the meeting was published widely despite the filmed recording of that conversation being obtained covertly and without either my knowledge or permission. Apparently the justification for such activity is that is in “the public interest”. I am no expert on these matters, but my understanding of exposing matters “in the public interest” is that where there is prior evidence of wrongdoing or illegal activity, clandestine activity can be condoned as it is “in the public interest”. In this case there is no evidence obtainable of wrongdoing on my part that would justify such an intrusion into my private life or conversations. Whether there is substantive evidence of activity of wrongdoing by others with regard to the story that The Sunday Times wished to investigate, I do not know, but it is not relevant to my involvement in this business. The Sunday Times approached me through my publicly available email address as a member of the House of Lords purely on the basis of a “fishing trip”. I have a high profile and they thought they would have a go. I have asked The Sunday Times, so far without reply, to provide me with a transcript of the conversation that I held with the bogus “executives”, so even at this moment I can only rely on my recollection for exoneration. Most of the conversation is as described in the Narrative section above. Two issues of important detail remain to be addressed. First, I recall some discussion about my prior involvement with Defence companies. I believe I told the Heller Lightfoot “executives” that I had acted as a consultant to Ricardo plc, the company with whose US partner, Force Protection, had successfully bid for the contract to produce the new Light Protected Patrol Vehicle (LPPV). This vehicle was the successor to the much maligned Snatch LandRover which itself had been the object of much well-placed criticism over many years. My relationship with Ricardo plc had been dormant since summer 2011 which was about the time that the company appointed a far better qualified retired officer than me to their Board as a Non Executive Director. I have now removed Ricardo plc from my entry in the House of Lords Register of Interests. Second, I mentioned that my only other involvement in the Defence sector was a very new one with Capita Symonds who was bidding to become the Strategic Partner to the MoD in the Defence Infrastructure competition. It was in this context that the conversation with the Heller Lightfoot “executives” turned to the issue of those contractual discussions being in “purdah”. I enclose a copy of the relevant part of the transcript (obtained via the Internet) of the conversation for your analysis. The Sunday Times contention is that in this part of the conversation I laid out a carefully thought through plan to circumvent the “purdah” rules by arranging to sit next to the Permanent Secretary of the MoD at a forthcoming Defence Industry dinner in order to lobby him to persuade the Secretary of State to give the contract to Capita Symonds. Quite frankly, that assertion is placing an unjustified and extravagant interpretation on that part of the conversation. The real explanation is far less exciting. In the conversation with the Heller Lightfoot “executives”, I introduced my involvement with Capita Symonds simply 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 19 to describe that my only current involvement in the defence arena was in the infrastructure area not in the equipment area, thus if l were to act for their South Korean clients I would be facing no conflicts of interest. On reflection I was surprised that the issue of “purdah” was raised by the Heller Lightfoot “executives” because I was, and am, so far removed from the contractual negotiations with regard to the Defence Infrastructure Strategic Partner discussions, that I had no real idea what was being talked about. Keen to be involved in the mini-UAV and counter IED projects, I did not wish to seem unduly naïve about this particular aspect of Defence procurement. Hence my comments about Philip Hammond and John Thompson were supposed to be classic networking—rather than evidence of some well thought through plot to circumvent MoD rules, of which I was largely unaware. The transcript reveals that the “executive” introduced the idea of “purdah” into the conversation not me. I just carried on talking about creating the opportunity for conversations. On reflection, I should have realised that the suggestion of “purdah” voiced by the “executive” itself suggested a degree of knowledge about MoD business that a general consulting firm would not have had. Hindsight is interesting, but not always useful! I made the honest mistake of trusting the people to whom I was talking. It is worth noting that none of the meetings that I suggested as examples of how to talk people have taken place. I have not met or spoken to Bernard Gray or Jonathon Thompson since I left the MOD in August 2009. I should also add that in a follow up article on 21st October, The Sunday Times reported that I had visited the MOD 17 times since I had retired in 2009. The implication being that I was a serial lobbyist. The reality is that the majority of these visits have been to attend briefings arranged by Lord Astor for Peers who have an interest in Defence. The topics briefed range from current operations to Olympic security to cyber warfare but, to date, have never covered Defence Procurement. I enter and leave the MOD Main Building for these events but do not then go wandering off on some lobbying trip. The implication by The Sunday Times was mischievous, and wrong

The House of Lords Code of Conduct Given the narrative and the comments above, I am left with the need to address the specific issues raised by you, at the instigation of my colleague Lord Laming, the Convenor of the Crossbench Peers. Against the background described above I firmly believe that I have done nothing to compromise the standards of the House of Lords or my own personal integrity, although I have caused embarrassment to myself and damage to my own reputation. The whole story has caused irritation amongst some members of the military community who see our overall reputation as an institution with high integrity, damaged. Therefore it is particularly distressing from a personal point of view that it was in good faith that I entered into discussions with “Heller Lightfoot”, apparently representing their South Korean clients—who appeared to offer the prospect of significant battlefield benefits for our soldiers. My over-riding motivation derived over 40 years as a soldier, chronicled in my autobiography and defended in the media when David Cameron made an unfortunate attempt in 2009 to recruit me as a defence advisor, is that I act only in the best interests of the defence of the Realm, the safety of our citizens and the well-being of the Armed Forces. An analysis of my diary and my bank account would show that is how my time and energy is largely spent. 20 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

As to the specific matter of not declaring my involvement with Capita Symonds, this is something that I would have done if and when I had agreed a contract with the company. To date, I have not been offered any contractual arrangement with the company nor received any money for the little work that I have done for them so far, however, I should mention that Jonathon Goring, the Manager Director of Capita Symonds has told me that he has disregarded The Sunday Times story and still wishes me to act as an advisor to the Company in their bid to the MOD. Naturally I am pleased about that as my wish remains to see the well-being of our soldiers, sailors, airmen and marines safeguarded and that of their families and our veterans. This is consistent with my overall motivation. Were this not so, I would not be expending so much of my time and energy in roles such as President and Founder Patron of Help for Heroes, Patron of Coming Home, a Vice Patron of Blind Veterans UK, an Appeal Board Member of Combat Stress, Patron of The Royal British Legion in Norfolk and President of The Army Benevolent Fund/Soldiers’ Charity in Norfolk. If I have transgressed, then it was a result of over-enthusiasm to be involved in a project that could have brought significant additional battlefield capabilities into the hands of our soldiers. It is easy to criticise that enthusiasm as being motivated by financial gain, but I stand on my record of public service as evidence that such accusations are mischievous and designed to sell newspapers rather than seek the truth. After a 40 year career in the public service for which I receive a pension equivalent to half my former final salary, I have no difficulty in accepting payment for work I might do for commercial organisations in the private sector, but would simply observe that most of what I do is pro bono in the charitable sector. I would hope to be respected for that. From the comments above, I would hope that you can appreciate that matters relating to the Code of Conduct and personal honour are matters that I take very seriously. I have never benefitted in a financial way from my membership of the House of Lords nor used my membership of the House to influence any matter in an inappropriate way. I believe that I have always acted correctly with regard to the Members’ Register of Interests, and, to be specific, would have registered my association with Capita Symonds at the appropriate moment. As a public servant for 40 years in the Army and more recently in the House of Lords, I am annoyed and embarrassed by my involvement by The Sunday Times in their investigation into Defence Procurement. I believe that no previous actions on my part justified their actions as being “in the public interest” furthermore I believe that their actions constitute a deliberate misrepresentation of my character. If there is any natural justice, I believe that I have a strong case against The Sunday Times, but given the high costs of legal action and the uncertain nature of the current Press Complaints Commission I do not intend to seek to put the record straight publicly. In any event that would bring the whole matter back into the public domain, contrary to Lord Bell’s sound advice to say nothing and let the whole sad episode slip from public memory. Finally, I would comment that I regard myself as a victim, not a guilty party, in this matter, and it will never slip from my memory. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 21

Appendix E: Correspondence between the Commissioner and The Sunday Times

Letter from the Commissioner to Mr John Witherow, Editor of The Sunday Times, 17 October 2012 I have begun an investigation into the conduct of Lord Dannatt and Lord Stirrup in relation to a potential breach of the House of Lords Code of Conduct that may be demonstrated by their conduct as reported from in The Sunday Times of 14 October 2012. This was in the articles headlined “Arms firms call up ‘generals for hire’” and “Galloping greed of the old warhorses”. I would be grateful if you could supply me with any relevant information about your journalists’ contacts with Lord Dannatt and Lord Stirrup; in particular, I should be grateful for transcripts of those interviews. The House of Lords Guide to the Code of Conduct requires correspondence relating to an investigation to remain confidential until published by the relevant committee of the House. I therefore request that this correspondence remains confidential.

Letter from Mr John Witherow, Editor of The Sunday Times, to the Commissioner, 27 October 2012 Thank you for your letter of October 17. The Sunday Times is usually willing to assist with investigations but has to ensure that journalists’ are not made available unless necessary. It would therefore be helpful if you could explain which breaches of the Code of Conduct by Lord Dannatt and Lord Stirrup you are investigating. I imagine you have based the investigation on what we published so you will not need the transcripts to decide. If I know what the investigation is about, I can then ask the journalists to identify the relevant parts of the transcripts and I can then consider handing over that information to you.

Letter from the Commissioner to Mr John Witherow, Editor of The Sunday Times, 31 October 2012 Thank you for your letter of 27 October 2012. I am grateful for your confirmation that The Sunday Times is usually willing to assist with investigations of this type. In this case the article in The Sunday Times of 14 October 2012 led to a complaint against two members of the House of Lords. Although the article covered other former senior military officers, my investigation has only come about because two of them are members of the House of Lords. The relevant investigative process is set out at paragraph 122 of the House of Lords Guide to the Code of Conduct— “The Commissioner first informs the Member concerned of the nature of the complaint and provides copies of the evidence offered in support of it. He sets out the particular provisions of the Code that appear, either on the basis of the complaint, or his preliminary assessment of the facts, to have been breached, at the same time inviting the Member to respond in writing with a full and accurate account of the matters in question.” The only evidence supplied to me to date, is a copy of the article published by The Sunday Times on 14 October 2012 in the print edition. On that basis, I have drawn 22 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT the attention of the relevant members to sections 8, 9, 10 and 13 of the Code of Conduct. My interest in obtaining the full transcripts of the conversations between your journalists and Lord Dannatt and Lord Stirrup is to ensure I have the best evidence available. If I only have access to selected extracts, it would be hard for me to arrive at any firm findings which do justice to all concerned, including to the public interest. For example, it may be that a member said something in a part of the extract which is not disclosed which appears irrelevant, but is in fact material to the case. As the House’s appointed Commissioner I feel that only I can make such judgments. I confirm that I am only seeking the transcripts of conversations with Lord Dannatt and Lord Stirrup, and not with any of the other retired officers concerned.

Letter from the Commissioner to Mr John Witherow, Editor of The Sunday Times, 14 November 2012 I write further to your letter of 27 October 2012 and my reply of 31 October 2012. I have not yet received a response to my most recent letter. I would be grateful if you could address the issue of transcripts urgently. I note that The Sunday Times have in the past provided the full contents of interviews with members of the House of Lords, when those interviews gave rise to stories which led to complaints of misconduct by the members concerned. I hope that you will maintain that good practice. In relation to the complaints I am investigating arising from your articles on 14 October 2012, I can advise that the accuracy of the reporting has been challenged. Specifically, it has been claimed that snippets of conversation from different parts of the discussion have been linked together and taken out of context, in an inaccurate and dishonest way. You will recognise that in order for me to undertake a proper investigation access to the full interview transcripts is essential. I look forward to hearing from you, as I am keen to progress this matter rapidly.

Letter from Mr John Witherow, Editor of The Sunday Times, to the Commissioner, 16 November 2012 Thank you for your letter of October 31. Sorry not to reply sooner, I have been away. I am reviewing your request and will be back in touch soon.

Letter from Mr John Witherow, Editor of The Sunday Times, to the Commissioner, 6 December 2012 I would be content for someone from your office to read the transcript of the meetings between the journalists and Lord Stirrup and Lord Dannatt at our offices and then decide whether you intend to take matters further. If this suggestion is acceptable, then the legal department will be in touch to arrange this with you. If you then decide to continue with your investigation, I will consider releasing the transcript to you provided copies are not made and the transcripts are not released to Lords Stirrup and Dannatt. I would imagine they would be able to read the transcripts at your offices. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 23

I’m sorry to do this in a rather pedantic manner, but we have had a bad episode previously when we assisted someone, and we’re trying to learn from experience.

Letter from the Commissioner to Mr John Witherow, Editor of The Sunday Times, 12 December 2012 Thank you for your letter dated 6 December 2012. I am pleased to note that you are willing to let me have access to the relevant transcripts. However, the conditions you mention are incompatible with my responsibilities as the Commissioner for Standards. I have already advised Lord Dannatt and Lord Stirrup that I am conducting formal investigations of the complaints I have received against each of them—complaints based solely on the articles published by The Sunday Times. If the transcripts establish that either of them breached the Code of Conduct, the relevant report will naturally have to set out the basis on which I came to that judgement. Equally, if I came to the judgement that their behaviour as evidenced in the relevant transcripts did not amount to breaches of the Code of Conduct, then again I would be expected to set out my reasoning and the relevant evidence. I am sure you will recognise that a judgement by me without supporting evidence might give rise to a suggestion that I was conducting a whitewash or operating a system lacking in transparency. I am happy to undertake that during my investigation I will not allow the transcripts to be copied. However, at the conclusion of the investigation I would intend to append the transcripts to the relevant reports. I trust you will see the logic of my position and the need to be fair to all parties. I look forward to hearing from you shortly and to finalising arrangements for the supply of the transcripts.

Letter from Mr John Witherow, Editor of The Sunday Times to the Commissioner, 22 December 2012 Thank you for your letter of December 12. I understand your position and will arrange for the legal department to send the transcripts. I appreciate your pledge not to copy them during the investigation.

Letter from Ms Pia Sharma, Editorial Legal Director of Times Newspapers Ltd, to the Commissioner, 5 February 2013 Further to your letters to John Witherow, I am authorised to send the enclosed transcripts of recordings of conversations between The Sunday Times’s journalists and each of Lord Dannatt and Lord Stirrup. You have agreed not to allow the transcripts to be copied during your investigation [The transcript is in appendix F.]

Letter from the Commissioner to Ms Pia Sharma, Editorial Legal Director of Times Newspapers Ltd, 11 February 2013 Thank you for the transcript material delivered to the House of Lords on 6 February 2013. I have now had the opportunity to read through the transcripts and would appreciate clarification on the following matters— 24 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

(1) In the transcript involving Lord Dannatt, what is meant by the terms “clip 4”, “clip 5”, etc.? (2) Why does the clip numbering start at “clip 4”? Was anything said during clips 1 to 3? (3) In the transcript involving Lord Dannatt each of the speakers is identified. The other transcript only refers to unidentified male and female speakers, and does not assign the contributions of a third person. Can you please confirm that the male is Jonathan Calvert, the female Heidi Blake, and the unassigned speaker is Lord Stirrup? (4) The transcript involving Lord Stirrup does not detail the “general chat and introductions” or the “chat on leaving”. Can you please confirm that nothing material was said during those conversations? (5) Do the transcripts supplied to me constitute an unedited, full and true record of the recorded interviews with Lords Dannatt and Stirrup? I will need to interview Lord Dannatt and Lord Stirrup in relation to the complaints made against them. The key evidence in both their cases is the interviews conducted by your employees. I am not prepared to approach the members concerned until I have been re-assured that the transcripts supplied are unedited, full and accurate records of their meetings with Sunday Times journalists. I look forward to receiving the clarifications sought above as a matter of urgency.

Letter from Ms Pia Sharma, Editorial Legal Director of Times Newspapers Ltd, to the Commissioner, 12 February 2013 Thank you for your letter of 11th February. The transcripts are unedited, continuous and accurate accounts of the meetings between The Sunday Times journalists and the two members of the House of Lords. They are a full account except for short passages of irrelevant chatter at the beginning and end of each meeting. In response to your questions: (1) The transcripts are taken from video cameras which we hire from an outside firm. The camera automatically breaks the filming into clips of approximately five or six minutes, or less if we switch the device on and off. (2) Clip 1 was a test by the providers of the camera and clips 2 and 3 are recordings of the reporters walking to Lord Dannatt’s apartment after the device was switched on outside the Tower of London. The only conversation is between the reporters and has no relevance. (3) Yes, the male and female are Jonathan Calvert and Heidi Blake. The third person, “Jock”, is Lord Jock Stirrup. (4) The short general chat at the beginning is just Heidi signing for the coffee which arrives at the same time as Lord Stirrup and some small talk about where he lives in central London. The proper introduction is made at the point the transcript begins. At the end of the meeting, Lord Stirrup says he is on his way to an opera performance and checks that the reporters have his correct mobile ‘phone number. Nothing material was said in these passages. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 25

(5) Yes, with the obvious caveat that we have not transcribed the very short passages of unnecessary chatter at the beginning and end of the meetings. I hope this is of assistance.

Appendix F: Transcript of meeting between Lord Dannatt, Heidi Blake (Sunday Times) and Jonathan Calvert (Sunday Times), 2 October 2012 HB: Is this all yours? RD: It’s the Queen’s, really, without getting too picky about it. HB: Oh, I see, she lets you borrow it? RD: Put your coat down on any chair. HB: Thank you. JC: Great views. HB: They’re lovely. RD: It’s rather nice, the Thames out one side and the inside of the Tower of London the other side. I’ve got the honorary and ceremonial post of Constable of the Tower of London. JC: Oh, I see. RD: Which is a Queen’s appointment. I’m the Queen’s representative at the Tower, which is why we lodge in the Queen’s house. JC: What does the Constable do? RD: It’s analogous to being a Lord Lieutenant in a very small county. Like 17 acres. JC: Right. RD: So, when senior people come here I have to you know be here. Also, as Constable, the Tower is run by historic royal palaces, which also runs Hampton Court, Kensington Palace, Kew Palace and the Banqueting House, and as constable on the board of HRP— JC: Oh, of course. RD: And I’m also on the board of Royal Armouries. So there’s a number of things tied up with it. But it’s just quite a nice place to be. HB: Yes. Absolutely. JC: It is nice, isn’t it? RD: Anyway, have a cup of tea. HB: Thank you, a cup of tea would be lovely. RD: Yes, I made this on the basis that you’d probably be here at half past three, so that was good. HB: Yes. RD: Are you—, Canary Wharf is where you— HB: That’s right, yeah, but it’s always better to come over this way to meet people, because it’s a bit of a trek out there for people. So you’re here part 26 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

of the week, and then do you have another base, or do you work from home? RD: Our home is in Norfolk. HB: Oh, right. RD: So I tend to come up to London on Mondays, except today we came today. JC: Where abouts in Norfolk are you from? RD: Keswick. It’s just south of Norwich. HB: Oh, lovely. JC: Oh right. I know north Norfolk quite well. RD: Right. JC: I have various relatives in Dersingham and Wells next the Sea. RD: Dersingham’s jolly nice isn’t it? JC: Yeah, it is. The sea’s quite cold but apart from that, it’s quite pleasant. RD: It’s always quite windy as well. JC: It is quite windy as well. RD: But it’s a very nice part of the world. I play golf … JC: Oh, do you? RD: … On Saturday in the teeth of a howling gale, which was very exciting on the first nine because the wind was blowing the ball in the right direction, but coming back it was blowing it back over our heads. HB: So can you stay here when you’re in London or do you have alternative lodgings? RD: No, we, we live here. HB: Oh, wonderful. RD: The way we operate is, we have a bedroom and a bathroom and a spare room and a small sitting room which we regard as ours, and then rooms like the drawing room which we’re in and the dining room next door, they’re sort of historic rooms in the house as well. One where Thomas More was kept for the last 18 months of his life and that kind of thing. JC: In this house itself? RD: In this house. And the council chamber where Guy Fawkes was tried is just above us here. [Gosh] We’d regard those as public spaces. We do quite a lot of entertaining for Historic Royal Palaces or charities I’m involved in and that kind of stuff. So we kind of live privately for part of the week amongst a wider public space. If you can sort of get that. I don’t get paid anything for this; I don’t pay anything for it either, so it sort of— HB: Ah, it works quite well. JC: As we were coming in, we were just saying, when people were put in the Tower, is there actually a tower within the Tower that they went to? RD: Well, Anne Boleyn, for whom this house was built, um, it wasn’t completed by her coronation but it was for the last few days of her life, so she was led out to execution from this house. Generally, people who were held in the 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 27

Tower were held not because they had done things wrong but because they were politically inconvenient, so they were taken out of circulation by being held in the Tower. So they were quite—,there are 13 towers within the Tower of London. People were often held in one tower, then another. Walter Raleigh was held for 13 years, in the tower where the two little princes were [HB: Gosh, 13 years] but he had two children while he was here. So he wasn’t totally denied—, by his wife, so she popped in and out from time to time presumably. HB: Oh right, I see. RD: So it’s evolved over the thousand years that it’s lived, and the smart royal palace where Henry VIII and people like him lived, that was the part that’s fallen down actually, it got badly bombed in the war and wasn’t restored afterwards. But the White Tower, the central bit in the middle— JC: Where the Crown Jewels are. RD: The Crown Jewels are in the Waterloo Block, in the Jewel house—now there’s a funny thing. But the White Tower was started by William the Conqueror, 1087, and in fact the Chapel of St John in the White Tower, as our chaplain says, if William the Conqueror were to come back, this is one place he’d recognise, because he probably worshipped here. Quite extraordinary to think that he’s been gone a thousand years— JC: But he could come back and recognise it. RD: Yeah. JC: That is extraordinary isn’t it? RD: Yes. Anyway— HB: Gosh. RD: It’s a very useful place for us during the week. And I sally forth to other historical places like the House of Lords. Other things like that. JC: Well, thank you for agreeing to see us. HB: Yes, thank you so much. JC: You—, we sent you an email so you sort of have a vague idea, but the email probably wasn’t that fulsome. RD: Well, I was rather hoping we could start from [JC: From scratch] ‘Hello, would you like a cup of tea? Now tell me what this is all about.’ HB: Yes. Well, we represent a company called Heller Lightfoot, which is a strategic consultancy, and we, Jeremy and I, are based in the London office. There are offices around Europe and the head office is in Lausanne. But we have been taken on by a client who’s based in South Korea, and they are a really exciting technology company. They have been specialising in robotics, mostly for civilian use for the last six years or so, but recently— well, in the last two years—they’ve diversified into defence electronics, mostly because there’s been some concern, which you may be aware of, in South Korea that the North is developing some very promising electronic warfare capabilities and the South feels it’s lagging behind. So there’s been quite a lot of government money available to fund that sort of work. Our company that we’re working for is based in a really exciting technology hub called Daejon Innopolis, which is about an hour south of Seoul, and it’s 28 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

called Daedeok Electronics, and they are working on two, two UAVs basically. Can we assume that everything that we discuss in this meeting is confidential? RD: That’s fine. HB: That’s great. I mean, we’ve, we’ve got authorisation from the client to disclose a certain amount of technical detail at this stage, and then if we were to progress any further there’d be a non-disclosure agreement and that sort of thing. RD: If it’s any help, I’m not involved with any other companies in the same area of work. [HB: Right] I mean, there are a number of things I am involved in, but I think it’s fair to say that I’m not involved in … so I, I … there’s no danger of me overlapping … JC: Having any conflict of interest. HB: That’s really useful to know. That’s good. So, there are two products which are being—, sort of approaching being finalised at this point, and there’s the possibility of others down the line. The most exciting, we think, is a hyper- miniaturised drone, which is designed for surveillance and reconnaissance purposes, and it is very leading-edge. As far as we’re aware there is nothing in development which is so advanced. It’s small enough to land in the palm of your hand. RD: I mean, this is very exciting. This is physically quite small. JC: Yes. It’s really small. I mean, the technology that goes into making it that small is quite extraordinary. RD: I mean, I, in my professional life I was an infantryman, so you always want to know what’s over the next hill [HB: Exactly] and we’ve been kind of waiting for the drone that you have in your backpack, in a sense, to go—, as a brigade commander, divisional commander, the big picture, what’s going on in the rest of the world is very interesting, but actually, what’s going to happen just over there tomorrow, or even in the next half an hour [HB: Quite], has always been the big unanswered question. [HB: Yup] So if that technology’s becoming available, ahead of the competition, it’s a good thing. HB: Yes. We think it’s very exciting, and certainly the client is very excited. We have to confess, we’re quite new to this area ourselves, we’re sort of jacks of all trade. JC: We’re not, we’re not technical experts in any sense at all. HB: No, we’re not, but we’re getting our head around it as quickly as we can. But, yes, it is a very exciting product. The second product is a um slightly larger unit, which is I think a sort of similar size to Scan Eagle um, and is—, the idea of that is that it will carry ground penetrating radar, um, which I think will be very useful because, um, I don’t think there’s anything else available, or being developed, which carries ground penetrating radar on a UAV. Um, and it would obviously, it travels quickly and it gives the ability to sort of scan the horizon for hazards. JC: Which takes huge processing power, and it’s quite a—, again quite a technical feat, in order just—, because if you imagine travelling over that land, looking, looking for, well, you’d be looking at a road, but still, you’d 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 29

be having to go quite fast, so processing that amount of information as you’re going along is quite, quite, quite a strength … RD: Yes. Is the technological ambition to be able to see disturbed ground, for example on the counter-IED— HB: Exactly. That’s the idea. And that all of that information is streamed back to base very quickly, um, and therefore giving the unit the ability to sort of scan ahead of themselves, um, and detect any potential hazards. So that appears very exciting too. Um, originally the idea that the client had was that these were being developed for use by the government of South Korea, um, but they’ve taken some advice that they have a far wider application. That they would presumably, they would potentially generate a lot of interest in Europe, possibly in America, and so they’ve taken us on board because they need some help bridging the culture gap between South Korea and the West. [RD: Sure] They need some help understanding the way that defence procurement works over here, um, and building contacts. They’re complete outsiders. They’re actually, they’re a fairly discreet, little-known operation, so, outside South Korea anyway. So what we’ve advised them to do, um, in the first instance anyway, is to appoint a small board of advisors, starting off in this country, um, who can give them some advice on how to make contact with the Ministry of Defence over here, and we’re hoping that those people could give some advice on how defence procurement works in this country, how to market the product, but also we’re looking for people who have strong connections with the Ministry of Defence, who can sort of open doors in that way, who also have good political connections, and who can also pick up some intelligence on what the MoD might be looking for, what their budget is in this area, um, so that we’re sort of ahead of the game really when we approach them. And obviously we couldn’t think of a better candidate than er, than you in that regard. So we—that’s the proposition really. JC: Because we’re not, clearly you realise we’re not defence specialists. [RD: Sure.] What we’re—we’re specialists in helping businesses. [Yeah.] And when we looked at it we clearly thought that actually we needed some proper help and advice if we were going to do this. RD: So your business is making the connection between the client and the way he can actually deliver on his hopes and aspirations and objectives. HB: Exactly. JC: And you would probably, you would deal with us in the first instance, and we’d want you to, if you had the opportunity, to go to South Korea and view the product, understand what it is that we … we have, and why we … RD: That would be quite important so one knew what one was talking about in some detail, so there’s confidence and credibility in terms of, in terms of that. HB: Exactly. I mean, I think the idea would be, um, if you were interested, we could have a second meeting and fill you in a bit more on the sort of basics of the way the product works, and then it may be possible to arrange a conference call with the team in South Korea. But in the sort of short to medium term it would be great to get you out there, to just give you the opportunity to play with it and see how it works and talk to the guys that are building it. 30 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

RD: Who else are you talking to? I mean, you mentioned an advisory board. Was that your term? Advisory board, or— HB: Yup, we, um, yes Advisory Board is the idea … We’re looking at appointing, if possible, a representative from each of the three forces. So we’ve talked to a number of people who are, um, of similar rank to yourself. Um, and we are—but we are still open to suggestions, so if you’ve got anyone in mind who you think would be interested in this sort of work, or you think would be useful to us, we’d love to, to hear your thought. JC: It might be someone who’s still in the services and who’s, who’s looking to retire. RD: Well, yes, there are always people like that, because, you know, it’s an organisation that refreshes itself fairly regularly, [yes] so there are always people sort of, in their early, mid, late fifties flopping out of the system. HB: Yes. And their contacts would presumably be really fresh, which would be great [RD: Yeah], you know if they’re still in that at this point. [Yeah.] Jeremy, would you mind putting that on the table for me? JC: Yeah, of course. HB: Thank you. RD: I mean, sorry, if you don’t, if you don’t, if you’re not able to give me an answer that’s fine, but who are you talking to? Who else? Or are you still fairly early in the process? HB: Um, we’re fairly early, we have had some conversations, I’m just, what do you think about, I’m not sure whether it’s fair on— JC: I think we ought to ask them first before. I mean, I don’t have any objection to telling you, but I think maybe we ought to ask them first before we, before we tell you. HB: Yeah. I mean, all our conversations have been on a confidential basis so far [RD: Right] and just, I don’t know whether, because some of the people that we’re talking to for example have other roles which, where they would need to sort of notify the people they’re working for that they might be coming on board with us to make sure that their current clients didn’t feel there was a conflict, so if we were to tell people now and it were to get out, it might, cause a stir. RD: Which is why I asked the question twice— JC: They wouldn’t, they wouldn’t be people who would embarrass you, and they’re probably people you would know quite well I would have thought. RD: Well, I mean, at the top end of defence most people know most people, which was why I was just intrigued to know who else you were talking to. HB: Sure. Well, we can certainly, I mean, I would imagine that they would— JC: Unless you have any real enemies … ? [laughter] RD: Well, there are probably one or two people I’d probably be less keen to work with, but there’s no one I’d actually red card. But again, again, if I’ve listened to you carefully, you talked about an advisory board? HB: Yes. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 31

RD: Boards have chairmen. Where are you thinking of going as far as that’s concerned? HB: At this stage, we were, we’re sort of more in the process of just, um, appointing advisors. I suppose having done that we would probably look to, um, nominate maybe one of those people as a chairman. Is that, if that role—is that a role you’d be interested in? RD: Well, that’s partly, partly linked to who else you were talking to. Because in a sense, our past catches up with us to the extent where we all know where we finished up in the pecking order, um, I’ve got to the point where I’m quite happy to do things on a standalone basis, or I quite like chairing things, as opposed to necessarily … um … I’ve tried to avoid getting into too many non-executive board situations, because actually going to endless meetings, um, I find fundamentally boring. They’re less boring if you’re in the chair. HB: Yes. Sure. I wonder whether that’s something we could discuss, if you’re interested, at the next meeting, and then that would give us an opportunity to speak to some of the other candidates and just to check that they’re happy for us—I mean, I imagine they all know you well and would be happy for us to-to-to tell you that we’re talking to them, it’s just that we— RD: Yes, but other people would say, as far as I’m concerned, um, yes, I mean, he was very senior in defence, he understands the broad generality of the business, and was much more an operator than a sort of technical person. So I would be interested in seeing who you were also talking to, and I don’t mean, I’m not asking for names again, but there are some people who have got a deep background in the technical side, who I wouldn’t necessarily say were quite as much in the sort of operating side. HB: Yes, ok. RD: What you need to get is a mixture of both, between what you want to achieve and how you might achieve it, in a technical sense. [Hmm, Hmm, yes] HB: Yes. Well, it would be good to have your thoughts on how to achieve that sort of mix, um … JC: I mean, we don’t really want it to be a situation where you’re just attending lots of meetings, [RD: No] we’d rather it was that you were out and about and meeting people, on the times where you were meeting people—, because we’re not, we’re not talking about a job that we expect is going to be, er, like a sort of full time position at all, I mean we’re talking about probably one or two days a month, but we’d like you to be spending that, you know, sort of … um … meeting, I don’t know, ex colleagues or whatever, or maybe lunching, or … and just, and just talking to the people that, that actually matter. HB: Yup. And there will, there will obviously be some meetings. It may be that a lot of that can be done by video conference, or it may be that there will probably be a certain number of meetings, but we’re not planning on it being a kind of talking shop, it’s more about having people out on the ground talking to people and building connections for us. And you’d be liaising with us on the phone. JC: It would be great to draw on your advice at times, and so actually the work itself probably wouldn’t be very structured in that way. Some of it you may 32 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

be able to do from your home. Some of it’s just one call in the morning to someone, I mean— RD: Yup. I think what you’ve described so far, it’s more an intelligence gathering, um, role and connection-making role. JC: Yes, yeah. HB: That’s probably a fair summary, yeah, I’d have thought so. And how does that strike you? Is that the sort of thing you’d—? RD: No, having thought about it before I had guessed that that—because it was a new entrant into the UK and European defence market, which of course, uh, as you appreciate and the client will appreciate is quite a congested area … HB: Exactly. Well, that’s why we need the help. RD: And in some ways I suppose you could say it’s quite a contracting area, um, and that’s why the BAE systems, EADS potential hook-up is of great interest at the present moment. Because they say it’s all about growth, but actually it’s not it’s about contraction. But getting governments to sign up to something that’s about contraction, um, there’s always jobs and that kind of stuff. [Hmm, yes] And of course a lot of the people coming out of the services who wanted to continue their work in the defence technical area would probably automatically go to BAE Systems, or Thales, or Finmeccanica or something like that, um, or might already be there … HB: Yes. RD: So, there’s some challenges, undoubtedly. Which is why, perhaps talking to those who are on the verge of coming out and haven’t signed up with anybody. [HB: Yes] But again, sorry, I’m thinking off the top of my head now, in that sort of technical, intelligence, commercial world, Cabinet Office rules often impose time embargoes. So someone who’s been a deep expert or very much involved in the procurement process may get time barred for 6, 9, 12, 15 months between leaving the service before they can do anything in the commercial world, in order to protect what, what they know from when they were serving. HB: I see. JC: Is it, is it sort of ruthlessly enforced, or is it … RD: Pretty much so, actually. Pretty much so. I think in these days of freedom of information and scrutiny, quite difficult to bend that one. A colleague of mine who was head of the Air Force same time I was head of the Army is now the senior big military cheese at BAE systems, but I think they, I think they kept him out for almost two years. HB: That must be really tiresome, to sort of sit and twiddle your thumbs. [laughs] RD: It is actually, it is frustrating, because you can’t start, you can’t get paid, and, um, you know, you’re on full pay one day and the pension half-pay the next day. Bills don’t get paid quite the same way. HB: No, exactly. Yes, it must be really frustrating. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 33

RD: Yes, that is quite frustrating. So I think that’s a bit of a factor. But of course people who have stayed involved in the debate, even though they may be a few years out are still very well connected. HB: And that would obviously be true of yourself, so … RD: Yeah, yeah, yeah. So, I know I’m arguing slightly against myself by saying exactly it’s good to get someone who’s fresh out because they are well connected, but they get embargoed, but actually having been out for a while, you also realise the greater potential of not being responsible to the system any more. If I want to make a comment in the press, I just make a comment in the press. I haven’t got to clear it with anybody any more. HB: Yes, it must be liberating. RD: It is, yes. Still lands me in the same degree of trouble. [Laughter] HB: Yeah, okay. RD: So, how would you want to take this forward in an ideal world? HB: Well, could you tell us a little bit about the sort of work that you’ve been doing in the past couple of years. I mean, we’ve done a bit of work on your background, and I think you’re working for Ricardo, is that right, and, er, another company … ? RD: I was doing some stuff with Ricardo initially. I’ve actually, funnily enough, I’ve just in the last month or two, um, closed down my involvement with Ricardo. HB: Oh yeah? RD: Partly because they appointed someone else to be non-executive on their board, who was quite well versed in the sort of areas I was talking to them in, and I frankly thought they didn’t need us both. And my real interest was the much-maligned Snatch Land Rover, developed for Belfast in the 1970s and misused in Iraq and Afghanistan and a lot of our people have died in. Ricardo, with a US company called Force Protection won the contract to provide the replacement. I was very keen to see that through, that actually has now gone through. So actually my interest in them sort of lapsed. HB: I see. Sure. And you must have been a great asset to them in, in helping them to develop that, I would imagine. RD: Well, I was certainly an enthusiast that they were going down the right track, and also trying to get them to put a strategy in place whereby they understood that the future of defence, sort of land warfare, was going to be highly capable systems based on lightweight vehicle frames, which of course Foxhound, which is what their vehicle is called, is the ideal vehicle for that, as opposed to 70 tonne heavyweight tanks clanking round the battlefield. And I think that encouraged them to continue going down that track, so that’s, that’s fine. Um, a company called Control Risks, in a very sort of different area, the original private security company, in a sense, but it’s always majored on business to business intelligence, if you like, assessing risks, assessing the risks of doing business here and everyone where in the world, um, advising businesses on where is a good place to do business and where is not. RD: Like all these companies they got involved in the armed guarding business in and to a certain extend in Afghanistan as well, but its main business has 34 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

been, um, sort of business to business risk analysis and, and, and advice, and they’re also leaders in kidnap and ransom, [oh, right] which is obviously closely related to piracy in the Indian Ocean, you know, off West Africa and that sort of stuff, and I am a senior advisor to them. [Yep, hmm] HB: So do you get involved in, in assessing risk for them or are you more strategically helping them build their client base or their business? RD: Um, probably a little bit of both, I mean I—I do whatever they, whatever they want me to do, which is sometimes being present at events when they’ve got senior people coming in, so the credibility of the company is increased by having senior people like, like me there. I’ve just done, last week, spent two days at their annual strategy review and we, they, we looked at the whole business of how they were running the company and whether they could be doing it better and more efficiently, and you know … what they would differently on Monday morning as a result of a 48 hour seminar. Um, and that was very revealing and a very interesting session, with all their sort of A-team senior leadership. And then sort of I’m involved in that, an ex-chief constable is involved in that and an ex- ambassador is involved in that as a sort of team of senior advisors. HB: Right. RD: So that’s quite interesting. And then, in rather more eclectic areas, um, I’m involved with a company called Joule Africa, as in power, power generation, hydroelectric power generation, um, and they are principally working in West Africa, on the back of my son running a charity in Sierra Leone, [HB: Oh, I see], so it’s a sort of virtuous circle where the company supports the charity, and the charity do the company’s corporate social responsibility agenda. Because the new big Bambuna Dam is going to require 12 villages to be uprooted and moved [HB: Oh gosh]. Well if one can make life better for the people once they’ve moved, then the company is seen in a good light, therefore the government is more likely to give the company work. HB: Oh, okay. RD: So that’s, um, something I’m also involved in … And then I’m also involved in something which I don’t think will see the light of day—I haven’t told them that—which is one of the burgeoning counter-piracy, um, operations in the Indian Ocean and wherever else. And of course, that very much relies on surveillance as well, the business model there is very much to use surveillance means. JC: Oh, I see. To, to spot pirate ships. RD: Yeah, yeah, yeah. Based around a mother ship with helicopters and ropes and inflatables, but being serviced by intelligence from above. But I think that they’ve taken such a long—, it’s an ambitious plan, it’s a good plan, but they’ve taken a long time putting their funding together, and my own feeling is that they have missed the market, which I think has now got overcrowded. JC: It is quite a—, I mean that security market, they’re all trying to protect ships going through— RD: Well they’ve found actually that the easiest thing to do is to put armed guards on ships, and no ship with an armed guard has been taken by pirates. Which is a relatively low-tech solution to the problem. [right] I don’t think it solves the problem. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 35

HB: And you’re—are you an advisor to them? RD: Yes. HB: What was the company called? RD: Typhon. HB: Typhon, oh right. Yes, I think I’d seen that. RD: I’m not sure if it’s yet—, actually, it has gone public. I took part in the sort of, the— JC: Is it a UK company? RD: Yes. Um … That said, as of today, I don’t know where the money has come from in totality. They were trying to put about a £12m package together, which the guy running it now tells me he’s done. HB: Right. RD: And I’m also involved with—again, it’s in a different area—the Ministry of Defence, defence infrastructure organisation that provides all the barracks, houses, manages the training estate, training areas, has decided that it would do its business better with a commercial strategic partner. And there’s a competition running between three consortia, I’m advising one of those consortia, the one I think actually will win it. HB: Oh, really? Who are they? RD: Well, it’s an amalgam of Capita Symonds, URS which are an American company, PA Consulting, you presumably know PA Consulting [HB: Ah yes, very well]. So I cannot wait to see how that will go. JC: And who else is involved, people like Babcock? RD: I think they’ve all been excluded. JC: Oh have they? RD: Serco’s one, and, I was just talking about this earlier on this afternoon. And I think … [looking at paper]… Trilliam. Do you know Trilliam? JC: I’ve heard of them RD: It might be a made up consortium. Trilliam and Serco Bechtel are the two other contenders along with Capita, URS and PA Consulting. HB: Oh right. And you think your chaps are going to win? RD: Hope so. I’d like us to win because I think it’s a much more interesting consortium than the others. And a lot of the usual eggs, you know the usual suspects, the Babcocks and whoever, have now been swept out. JC: Because there’s been quite a rigorous process leading up to this presumably? RD: Yeah. Yeah. And because I feel very strongly about, always have done, about sort of the morale, welfare, the motivation side of the Armed Forces, and if we get this right, it will be really in the soldiers’, sailors’, airmen’s, marines’ best interests, and their families’ best interests. And I come with a conscience to this consortium, and I would like them to win it. HB: Sure. And presumably you must have been doing a similar sort of work to the kind of work you’ll be doing for us? 36 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

RD: So I routinely talk to various people, um— HB: At the MoD? RD: At the MoD and senior people, many of whom are involved in these sort of areas as well. HB: Yes. That’s really useful. And I imagine it must be sort of tremendously reassuring to people at the MoD to know that somebody like you is on board with a company, you know, with a consortium like that, because they then know that these people understand— RD: Yes. As long as they are grown up enough to take a little criticism sometimes. HB: Right. [laughter] RD: The last government didn’t like me because I criticised them a lot, which was why they didn’t make me chief of the defence staff and retired me slightly early. HB: Oh, really? Dear oh dear. RD: David Cameron then wanted me to be one of his defence advisors, um, three years ago, but then, in his puppyish enthusiasm, announced it in his Conservative Party end of conference speech. Which actually completely stuffed me, I couldn’t, I hadn’t, I’d only been out of the Army six weeks, I was still on the Army’s payroll, so all the chattering classes said this is outrageous, [JC: Oh, I see] so I couldn’t do anything. Which was really very frustrating. HB: Oh no. That is frustrating. RD: Yeah. HB: But are you still on good terms with the Tories? RD: I’m on good terms with them but he didn’t do me any favours. HB: Oh, that’s a shame. JC: So you didn’t do that role at all then, it never, never materialised? RD: Not really. Not really. I mean, if it had been handled more sensitively, and if the Conservatives had won the election rather as opposed to going into Coalition, I might well have wound up in Government. Um, that was kind of his plan, but he mishandled it—very frustrating, um … JC: So you could have been a minister, presumably. RD: I could have been. Yeah. Mmm. Which would have been, I think, would have been fun. But actually, three years on, I’m rather happier doing what I’m doing. [Yes, hmm.] Because if I was a minister in the House of Lords, I’d have to be subject to the Conservative Party whip. I’d have to be there all hours that God gave me to vote. As a crossbencher, independent, which I am, I come and go as I want to. So, you know. If I think it’s important, I’ll go and vote. If it’s not important, I’ll be at home having dinner or be somewhere else. HB: Okay. Well, that’s all very interesting. I wonder whether we should talk about remuneration, and then it might be useful just to talk a bit more broadly, if you’ve got time, about what sort of strategy you might propose for us. I mean, I know it’s all a bit new at the moment, but it would be 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 37

useful to have your thoughts. But in terms of a—do you have a standard rate that you charge, a day rate, for this sort of work, or … ? RD: I think we had a conversation about this didn’t we? Didn’t we? On the telephone? JC: Did we? I can’t remember actually. Forgive me if I—forgive me if we did, I don’t— RD: Well, I thought we had, we had a brief conversation, or I think we did. I think in the original email you sent said your client was talking … thinking JC: About a generous remuneration package. RD: And it was really a question of, I mean I do things in a variety of ways. Um, if I give a lecture, a leadership development seminar to BP, a 45 minute lecture, 45 minute questions, they pay me £5,000 for that. JC: Yes, I do remember that. Forgive me, yes, So we did discuss it. RD: So two or three things like that, but then Control Risks, because it’s a company I enjoy working for, um, I’m quite happy to charge them a daily rate of £1,500. [right, hmm] But, then that’s a sort of … all the employees are shareholders. It’s not a big cash operation. It wouldn’t sort of pay hugely, um … HB: Well, I think the package that the client was proposing for someone of your level would fall quite well between those two stools. It’s, it’s basically £4,000 a day, um, which works out if you do one or two days a month, at £100,000 a year, um, which is somewhere in the middle. Does that … would that sound suitable to you? RD: I think, um … I think that sounds, I think that sounds very fair. I think that’s quite realistic in terms of the amount of time that I could give. And of course, some of the things that one would do would overlap with other things, because in a sense you’re meeting someone, and you can have—you can achieve two or three objectives over, over one lunch, or whatever, so one would be kind of fair about what one charged who for. Um … I think that’s, I think that’s reasonable. HB: Great. And obviously your expenses would all be paid on top of that if you’re out, if you’re taking people out for dinner or lunch or whatever. RD: Yeah. JC: In terms of engaging interest in our product, what sort of level would you go in at, would you go in, because obviously I would assume that your connections are quite high up in the … RD: Yes, I mean, you’ve got … in defence you’ve got decision makers, sort of top level, but then you’ve got the, um, the informers who are further down who are much more in the sort of worker bee area, which is why … which is why I think to be successful one wants to put a team together which is not all senior people, because you’d be tripping over each other’s egos and backgrounds or whatever, um, and I think you want to cherry pick from the sort of senior operative level, um, sort of colonels and brigadiers and sort of area. Um … I think you want to have a sort of rank range, really, of senior people who can provide the overview and those who are rather closer to the coal face, um, who understand the nuts and bolts rather better. Um … And 38 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

those types of people are less likely to have a lengthy time embargo placed upon them, because they weren’t decision makers. JC: Right, I see, yes. Do they have any embargo on them? RD: I’m not sure. I’m not sure. HB: Well that’s useful to know, because presumably they still have the contacts and the ability to pick up bits of intelligence but without the embargo, which would be … right. RD: Yeah, yeah, yeah. So I think, when I was sort of talking about meetings, I wasn’t talking about sort of boring board meetings, whatever. But if one is building a team, then the team occasionally needs to put its heads together to work out where to put its energies, and where it’s going to attack next as it were. HB: Mmm, of course. RD: It’s a bit of a leadership function I suppose, I suppose it’s a suggestion. HB: Hmm, sure. So give that we are, as you correctly say, or our client is a total outsider to, defence in this country certainly, how would you sort of propose that we would go about starting to try and introduce our product and our client in this country? RD: Well, um, I think there are two or three possible answers and it would need a modicum of thought to know what was the right way to go about it. Of course, there are several official fora during the year, um, whether it’s the big exhibition at Excel every second year, um, this kind of technology would play into Farnborough Air Show every other year, or even the Paris Air Show, because again, aircraft and UAVs are very much on the cross- over between the air environment and the land environment, and the mari- maritime. I think Scan Eagle was originally conceived as a maritime project. HB: Yes, I believe so. RD: Interesting you mention Scan Eagle. I was pressing really hard for us to buy Scan Eagle in a hurry for Iraq and Afghanistan, and it was pooh-pooh- poohed at the time, and then I’ve heard in the last year that we have bought Scan Eagle. Very annoying that they don’t do these things when you first suggest them. Um … So, why … why I’m also hesitating is because I think there’s, there’s a toss up to be had between, does a new company go very public and show itself in the market place—you know, these are our wares, come and look at us, get to know us. Or does it sneak, or does it sneak up on the market [HB: Yes] and kind of sneak in? Um … The advantage of, you know, being all there on the big public agenda is that people know who you are, but then the competition knows who you are as well, so you’re immediately competing with BAE Systems, Thales, on, er, the various projects, some of which have been running for quite a long time. [Hmm] HB: Yeah, I think the client’s instinct— RD: Or you can be more covert to start with, try to get a bit of a foothold of interest in the market, and … and sneak up on people a little bit. I think it needs a little bit of thought as to which is the best approach to take. HB: Yeah. I think the client— RD: It may be too clever to sneak up on them. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 39

HB: Maybe. They are, they are sort of hyper secretive about their product at the moment, especially because it’s so leading edge, and they are very very nervous about letting out any details at all, so I imagine they would definitely favour the slightly more covert approach of—, I think what they would love to do is try to find a way of generating a demand for the product and an interest in the product sort of first, by having conversations with people and doing that quite discreetly, and then kind of introducing it in that way rather than just, as you say, putting it out there on the open market and hoping that somebody notices it. Because then, as you say, it gives the competition the opportunity to come and look at it and think, oh, that’s nifty, let’s make one of those ourselves. RD: No, of course. HB: So if we were to go for the more covert approach, how would that work? Is that, sort of, would that be a case of somebody like you, or the other people working for us approaching people to have discreet conversations over lunch, or … ? RD: Well I think it’s probably a question of trying to find out, um … knowing in slightly more detail what the likely product is the Korean company is working to develop, and what its capabilities are … of talking to people who are in the process now to see where contracts already are with other companies, what products are either under development or the MoD is already contracted to, to try and work out where, where the gaps in the market are, or whether, or whether one is actually now offering something that’s genuinely new. Because if it’s genuinely new, it’s therefore attractive, and stands a chance of getting ahead— JC: Yes, because it’s quite hard for us from the outside to get any intelligence as to what the MoD is doing, doing, doing this with. I mean, I suppose by its very nature, the … all that sort of military procurement, is going to have a secretive edge to it … or … RD: It is, but I think um, almost by definition military technology, um, is cutting edge, and it’s always designed to give you an edge over the opposition, so therefore security and secrecy are very much a part and parcel of, of, that, um … I think it’s a question of trying to see whether the product under development genuinely fills a gap in the market, or whether otherwise it’s then got to compete in the market and prove that actually, it potentially offers more, at a more attractive price, in a programme that is not yet already sewn up in a … in a contract. HB: Mmm, and presumably the um, the best thing to do is try to get in there before the programme has been sewn up in a contract as you say, or before that so that we can try to influence that process to some extent … RD: Yes. I mean, again, the Ministry of Defence, um, by its very nature as a public organisation, has to do its procurement under Treasury rules, so everything at every stage is competed for, so one’s got to get, typically the way it’s done is invitations to tender are put out, and then all those that tender are, are looked at, and down-selected into a certain shortlist, you go through a trials process and someone is then … is then selected. And the Treasury applies, you know, sort of value for money. So it is quite a tortuous process, which is for sure. Although, um, when you said right at the start you wanted to talk to people who know how the government does its procurement … um, that’s all a bit of a, a black mystery to most people. 40 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

HB: Right. RD: They don’t do it very well. They are just about to do things very differently … HB: Oh yes. RD: … um … and I’m going to a briefing, at the Ministry of Defence—I think it’s actually next week, or the week after, when the current head of procurement, someone called Bernard Gray, will be talking about the new way they’re going to do it. HB: Oh. RD: … and, um … the policy they’re going to follow is GOCO in the shorthand, um, er Government Owned Commercially Operated. HB: Right. RD: Um … and that’s, that’s quite a different process, putting much more in the commercial sector. HB: In terms of the actual procurement process itself? RD: Yes, I mean, I think … I think that the problem with many procurements in recent years is that initially, um, the Ministry of Defence articulates its requirement, and then that’s agreed, and it goes out to tender, it goes to contract, and someone gets on with procuring this system or this bit of equipment. It usually takes quite a long time, because it’s cutting edge and therefore it’s, you know, fraught with difficulty. And during that period of time, new technologies emerge, or new ideas come in, and therefore the user—army, navy or air force, whoever it is, through the Ministry of Defence—wants to change the requirement, well the contractor doesn’t mind that, because he can usually change the terms of the contract in his favour. HB: Right. RD: So it increases the cost to the MoD, usually increases the timeframe. HB: Right. RD: So these things always run late and over cost. HB: Right. RD: The hope is that the new way of doing it, will be that the Ministry of Defence articulates its requirement, that’s then sealed, and the commercial side of it gets on and delivers it, no messing around. HB: Right, okay. RD: So you said you wanted this, you’ve now got this, get on and use it. HB: Yeah. RD: When you next want something else, say what the something else is, and then in the commercial system … whichever company will deliver that, um … HB: Okay. RD: … Which I think the hope is that it’ll make the system rather more responsive and more agile. Potentially a lot more cost effective. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 41

JC: Mm. HB: Yeah that’s interesting. RD: And transfer, I suppose, some of the risk from the MoD procurement process to the commercial world, the commercial … partly … HB: So does that mean—what does that mean for Defence Equipment and Support, will they be, um, being scaled down? RD: It should mean that they’re less scaled down. HB: Oh okay. JC: Oh I see. RD: And I mean it’s a little bit the same with the infrastructure of the organisation I was talking about. HB: Oh right. RD: Um … there should be many more people working to deliver the overall outcome, in the commercial sector than there are in the military sector. HB: Right. RD: Which is better from the government department’s point of view. JC: And er you, you’re privy to this because are they seeking your advice, or are they … ? RD: I’m privy to this particular briefing with the Ministry of Defence because it’s been organised for interested members of the House of Lords. HB: Ah I see. JC: I see yeah. RD: That’s, I mean that’s exactly the sort of intelligence which is fabulous for us. RD: It, it is quite a useful … um, Lord Astor, Johnny Astor, who is the Defence Spokesman in the Lords, has been very good about laying on briefings for the members of the House of Lords interested in defence on a whole range of subjects. JC: Right, I see. HB: Fantastic. RD: Um, so … you know, this is currently one of the stuff upcoming. JC: And is Bernard Gray someone worth talking to about this, or the … ? RD: Yes, yeah he I mean … (laughs) Funny chap Bernard Gray. JC: He’s not a … not a, I mean, he’s not Army is he? RD: No he’s a journalist. HB: Oh! [laughs] RD: He’s a journalist. HB: Oh no. RD: He was George Robertson’s Special Adviser … JC: Mm hm. 42 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

RD: … in the 1997/1998 defence review, when George Robertson was Defence Secretary. JC: Right. RD: I was branching into all of those places, I was brigadier at the time, um, we didn’t rate Bernard Gray. He was putting George Robertson all kinds of whacky ideas, eventually he was discredited to the Ministry of Defence and left, he then managed to get himself—he wheeled himself back in, in about 2008/2009, to do a review into the defence procurement process. JC: Mm hm. RD: And produced a very good analysis as to the problem, which I’ve given you a little bit of, and produced what was considered to be a very radical solution, which is this GOCO solution. Everyone said ‘oh that’ll never work, too radical’. Um, come the last general election, change of government, um, Liam Fox actually thought his ideas were radical and perhaps weren’t too rubbish to the extent that the establishment was rubbishing them hitherto. JC: Mm hm. RD: So, so somewhat to our surprise he appointed him to the head of defence equipment and support … JC: Oh I see. RD: … to now implement his radical solution. So we’re watching with interest to see whether this converted journalist, who hasn’t run anything more than a twenty-first birthday party as far as we can see—if that—is going to get on running this multi-billion business. JC: Oh, I see. Yeah. RD: So it—it is genuinely work in progress HB: Mm. RD: … very interesting for us at the moment. HB: Yeah. RD: So urn, and I … I’ve kept in touch with him … well, I’ve had a certain amount of dealing with him over the years. So, um, I’m interested to hear what he says, week after next, or whenever it is … HB: Yeah. RD: … I was rather aiming to have a one-to-one session with him. JC: Mm hm. RD: So … I probably would try and put a lunch date in his diary … JC: Mm hm. RD: … um, you know, this conversation would make that even more attractive. HE: Yes that sounds brilliant. JC: Yeah. And the heads of the army … is it worth say, I don’t know … the head of the Armed Forces is Sir David Richards. RD: Sir David Richards, yep. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 43

JC: Who you’ve worked with … RD: Who’s my successor as the head of the army … HB: Oh yes. JC: Is he worth talking to about things like this, or is it too … ? RD: Well, he’s in quite a conflicted position, I mean, he—he would certainly … Well I could talk to him … um … I … HB: Hmmm. JC: I assume we wouldn’t be able to talk to him because that would be quite difficult. RD: And quite difficult to sort of get to him really … HB: Yes that’s why we need people like you … RD: Yeah. HB: … to sort of help us with all that … RD: Um … I mean he would, he would have a general view of what, what we need in this area. HB: Mmm. RD: And he hasn’t got any—he doesn’t have a technical background either. Um. The head of the Air Force: the Air Force naturally is more technically minded, er, the Air Force is very interested in UAVs. JC: Mm. RD: Because it’s … the hierarchy of the Air Force are all fast jet jockeys. They’ve all grown up, you know, sitting on a big firework, punting at six hundred knots through the sky, making a big bang behind them every now and then, and occasionally dropping a bomb on someone. So UAVs are a real risk of doing them out of a job. But they know, that actually, they are the future. It’s not so exciting, sending a Reaper, you know, a large unmanned aerial vehicle with weapons, over Afghanistan—the classic drone of the media … HB: Yes. JC: Yes. RD: Is not so heroic, as a fast jet jock taking his Typhoon off into enemy territory. JC: Yes I can see that. RD: The Air Force are very … they know it’s the future, but they don’t really like it. HB: Right. JC: Right. RD: Um … HB: So that would be a bit of a kind of hearts and minds battle … RD: And the Navy’s sort of comes in there somewhere as well. It’s … it’s had its fast jets taken off them anyway, so they’re rather more comfortable with the notion of UAVs and advanced technology. 44 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

HB: Mmm. JC: So maybe the head of the armed forces but maybe … but … not the head of the Royal Air Force? RD: Steve Dalton—he’s current head of the Air Force—and going out quite soon. He’d be someone who might be quite interesting to talk to. JC: Yes he probably would, yeah. HB: Um that would … would he be somebody that you could arrange a meeting with? Or are these people who … presumably if you pick up the phone to these people, they’re going to [inaudible] … ? RD: Er, I could certainly um, I mean he … I know him—he’s been, you know, here in this room, not many months ago, um, he’d be a little bit surprised if I said ‘let’s have lunch’, he’d rather wonder what my agenda was, um, and I would probably tell him, um. Well I would tell him … HB: Mm. RD: But there are … others who, who’ve got rather more of a deep background in the sort of procurement area, which is where one would really sort of want to go, at the sort of various levels that I was talking about … HB: Mm. Okay. I suppose the other thing we were thinking about was the sort of political lobbying side of things and whether it’s necessary to try to get, um, ministers interested in the product as well, so you have the kind of top down approach, erm, in place too. Is that—do you, do you think that’s useful, is that … is that something you’re accustomed to doing? RD: Um, I mean lobbying certainly goes, goes on. HB: Mm. RD: Lobbying can be counterproductive, um, I, I always think the more subtle way of doing it is probably trying to go in at—at a lower level [HB: Hmm], to interest those whose business it really is, to know that there is something new in this marketplace, and if it’s something unique, or materially better, then that’s quite gripping. HB: Mm, yeah. RD: Um, in that sort of circumstances, then that tends to get briefed up, and though they might be an opportunity of the minister then going to look at this thing, because he’s been told by some of these people, ‘well actually there seems to be something emerging on the marketplace, that could be the solution to some of our problems’ … HB: Yeah, OK. RD: Just trying to get sufficient access to a minister, to sell a product … the cynicism of the civil servants around him, um, would actually protect any— protect him from a meaningful engagement. HB: Right, OK. Sure. And are there other things we ought to be thinking about, um, in terms of a strategy at this point … that, that you would suggest? RD: … I think I’d probably need to think about that. HB: Yeah, sure. RD: Rather than say ‘no I can’t think of any’. Um, but erm, I think building the right team, um, across the environments—air, sea and land … because 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 45

although UAVs potentially are common, um, the applications in the sea, and in the sort of maritime area, as opposed to on the land are, are different. HB: Yeah. RD: Um, and the use of the medium of the air, for example. HB: Yeah. RD: Um, and as I say, I think a … a mixed team of people who know what they want from an operating point of view, and those who are, are well-versed in the procurement system, because they know in detail how these things are done, and they also know in some detail what’s already out there. JC: Mm. HB: Yeah, sure. And presumably all of this is just very hard to achieve unless you have that sort of team in place, I suppose, I mean it’s suppose because people within the armed forces have a loyalty to people who have been within the armed forces, is that sort of the way it works? RD: Um, yeah there’s an element of that, but I think, people, um I’d like to think most people genuinely operate on the basis of what is best for the services, what is best for the operational capability that they want to see in the hands of our soldiers, sailors, airmen and marines really. HB: Yeah, yeah. RD: Um, I mean, nobody in the army, navy, or air force while is serving, has any loyalty to BAE Systems, to Talis, or … or Finmeccanica. HB: Yeah. RD: You might have had some exposure to them because they’ve delivered a piece of equipment that you, you need. And increasingly contracts have been let whereby, um … whereas in the past, a bit of equipment was developed and then delivered, and then the services maintained it all the way through, from the front line, back to sort of base workshops as it were, but the civilian partner is increasingly coming forward, and up the supply chain, and the repair chain, so the overlap between somebody in uniform, and somebody in coveralls, wearing ‘Talis’ on his coveralls, um overlaps enormously. JC: I guess, I guess there is this serious purpose to it as well, because presumably—I don’t know—but with something like the Ricardo contract for the er vehicles, [RD: Yep] um, it’s useful to have someone like you, who’s been in the service. Actually, once you have … er presumably you were, you were hired after the contract was signed, and once you have the contract, to be a … who knows the military, and can advise them on how … the best way of interfacing, and smooth over the, development of the thing. I presume that’s how it works. RD: Yep, yep. There is definitely an element of that, because after all if the user who is in uniform doesn’t talk with the supplier, there’s a real danger that that happens. [Makes crossover gesture with hands.] HB: Yeah, RD: And the supplier produces something wonderful, that doesn’t actually meet the user’s requirement. 46 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

HB: Mm. JC: Did you … were you a part of getting the contract? RD: No I wasn’t, no. JC: No. Okay. HB: Mm. RD: Um, it um … It was down to a shortlist of two, um, when I was first involved, but then quite quickly Ricardo Force Protection got the contract. HB: Mm. JC: Right, I see. RD: And I, the role I played, actually was getting them to understand that this wasn’t an end in itself, this actually was a means to a wider end, which actually was to continue investment in this, potentially, family of platforms, onto which other things could then be added, high technology weapons systems and surveillance systems, on a well designed, well protected, live platform. HB: Oh I see. So what, is there the possibility for more orders being placed for … RD: Should be, should be. HB: Okay. RD: I mean it’s, it’s one of the things the Ministry of Defence is fudging with at the moment. In the last defence review, in shorthand terms, they chose to prioritise certain expensive equipment programmes, based in the maritime and air area, typically the aircraft carrier programme … HB: Oh, a bit of a disaster by the sounds of RD: … and Typhoon Eurofighter tranche three … over land systems and also manpower. HB: Mm. RD: Which is why the very expensive carrier strike programme—two aircraft carriers—and so far unidentified aircraft to fly off them, has been given a higher priority than the size of the army … HB: Mm. RD: So the army is carrying now a hundred and two thousand to eighty two thousand … JC: Yes. RD: … over the next few years … HB: It seems crazy. RD: Which is pretty controversial. Manpower is expensive, so the size of the army has been sacrificed, um, to maintain an equipment programme. JC: Hm. Yeah. RD: Now, that’s controversial, [JC: I can imagine, yeah.] but given the government policy is to come out of Afghanistan in 2014, and they’re determined not to get us involved in another nation building exercise under 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 47

fire, um like Iraq and Afghanistan, in the near future, then perhaps it’s a reasonable policy. HB: Mm. RD: They also said they want to make more of our reserves so that they can top up the size of the regular army. That’ll fail … HB: Right. RD: … on presentation it looks like a good policy—I mean it’s cheaper. But the world is an unsafe place and getting unsafer by the, by the year really. So it’s very hard to say that in five–ten years’ time we won’t rue the day that we decided to make the army twenty per cent smaller. HB: Mm. RD: Government has to make its decisions to carry risk. JC: Yes I can see that. RD: Uh, and you’ve got to manage those risks. JC: And, you know, things happen, like Libya happened recently, and everyone basically didn’t … RD: Well it’s very interesting, you see, whereas in Iraq and Afghanistan we intervened big time, with boots on the ground, in Libya it was ‘intervention lite’, just from the air. In Syria, it’s ‘intervention zero’. JC: Mm. RD: You don’t want to touch it with a barge pole. HB: Mm. RD: Partly because it’s very complicated, and technically very difficult. HB: Mm. RD: The Russian air … the Russians supply the air defence system in Syr—in Syria, it’s very sophisticated, and unless we were invited in, we physically couldn’t go in. HB: Really? RD: Yeah. So … we’d have to take out the whole Syrian integrated air defence system. HB: Gosh. RD: Huge air force operation. It’s undoable. HB: Right. RD: In the same way, bombing Iran’s emerging nuclear capability is technically very difficult, probably impossible. HB: Really? JC: Really? RD: Yep. So one’s got to accept the practical limitations … Sorry, we’re straying … HB: No, it’s fascinating though. JC: Yeah, yeah, well no the Israelis seem keen to do it though don’t they? 48 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

RD: Yeah, well then … if you were sitting in the middle of the Middle East, with everybody on your borders hating you, and you were really worried that someone’s got a capability that could wipe you out, then you might just be tempted to give it a go. JC: Yeah. RD: But that would be wrong. JC: No. HB: Yeah, no. JC: It wouldn’t surprise me. RD: No. They are … when they’re under enough pressure they become a bit irrational … JC: Mm, HB: Mm. Oh it’s all … RD: … and lash out. HB: … fascinating stuff. And it’s great, I mean it’s fantastic that you’re able to pick up that sort of information and understanding, broad overview of the way that—the sort of direction that British defence is going in. And things like the briefing, um, that you get … is that, is that a regular thing, briefings at the MoD of that sort? RD: Yes, on one subject or another. HB: Yeah, that’s great. RD: No, one gets access to quite a lot of things like that, for example—I mean, I mean I did it when I was in the army—the service chiefs come to the House of Lords at least once a year, and just talk about what’s going on in the Army, the Navy or the Air Force to the peers that are interested. HB: And what’s the … what’s in it for them doing that? Because I can see how it’s great for you guys, but … RD: It increases your understanding. So there’s, um, if members of the House of Lords, part of Parliament, have a greater understanding of the pressures for example the Army might be under, and the head of the Army sits [inaudible] and does something, there’s a greater understanding of that, and a greater sympathy of the position … HB: Oh I see. RD: … amongst people in the House of Lords. HB: Okay. RD: So, transparency isn’t a bad thing. HB: So it’s just fantastically useful to have that kind of access to that sort of information, as well, I mean as well as your existing contacts in er, in the MoD. That’s brilliant. Um … was there anything else you wanted to raise Jeremy? JC: I don’t think there is, I think we’ve discussed most things have we? Is there anything else? 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 49

RD: I think err, I think probably coming back to it a little again … I think the, the better role that I can play, and I’ve said it before, is if you can put the right team together—with an understanding of air, land and maritime environments, and a sort of across vertically, through the sort of pecking order as it were, the more one can put a team together then that can actually push at the various pressure points … JC: Yeah, so … RD: … and gather information at various levels. JC: So you … from, from say the chief of staff, down to say … RD: Down to the sort of colonels and the, the, the [unclear] JC: And, and I don’t know do you also—would you also, also concentrate on whoever the MoD officials are? So, so … RD: Yeah. Yeah, erm … I mean … many civil servants are sort of wonderfully secretive, closed-shoppy, but um, you can sort of breach that from time to time. JC: Mm hm. RD: Of course a lot of this goes on at Abbey Wood, down in Bristol. HB: Mm. That’s where Bernard Gray is based, is that right? RD: Yup, yup. Um … The Ministry of Defence in London is sort of Head Office and then other things happen elsewhere. Army and Navy, Army and Navy and Air Force headquarters are now elsewhere … JC: It is difficult, from the outside knowing how we would approach the MOD cold, and that’s, that’s obviously why we’re looking for experts such as yourself, because it’s quite hard to, it’s quite hard to break in … RD: Hm, yes, it is. I mean I think one … that’s why one … you do need to talk to people who understand the system. And it’s a complex system, and there aren’t, there aren’t easy winners in this. A bit like, sort of, property development deals—they often take, you know, five years to come off. HB: Yep … yes well that’s what we’ve been trying to explain to the client really, and part of what we need to do is help them to understand why it’s important to … to take people on. JC: So, say for example you were able to talk to Bernard Gray and Bernard Gray was able to say: well look, the person you need to speak to is X. Er, you know he’s, he’s at Abbey Wood—and a referral like that would certainly open a door that we wouldn’t otherwise have. RD: Yup, I … I completely agree with that. HB: Hm, brilliant. Was there anything else that you would like to ask us about, about the role, or … ? RD: I think I sort of sense after this conversation that the ball is probably in your court? HB: Yeah, I think what we need to do next is, if you’re interested in principle, then we would go back to the client and just explain a little bit to them about this conversation. I’m sure if you were interested, they’d be absolutely delighted to hear that, um, and then we’d just get their approval to have a second meeting and just to talk to you a little bit more about how 50 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

the product works and just sort of start to work out a strategy, and we can work on it. That might be a good time to talk about a Chairman role or also to talk about who else might be on the board, um … RD: Yes, I think that’s really quite important. I know I’ve come back to it two, two or three times … um … because once you’ve brought people in, you’ve brought them in—getting rid of them isn’t necessarily very easy. It’s rather better being quite careful about who you bring in, you know—of what background and what level right from the start. HB: Sure. So would you be interested in principle in a, in a second meeting? RD: In principle, I’m very happy, I’m very happy to … I, I talk a lot about myself. So you can go back to the client and say: well we’ve talked to this chap Dannatt and he seems to know about this, that and the other, and not much about the other … but … um … HB: I’m not sure there’s very much in the second category, but um … (laughs) JC: I suppose, yeah, one of the things that might be useful for us, I suppose, is to be able to say to them, look, you know, you have been involved in this sort of work before, in terms of … we were talking earlier about the … the … all the … um … Army and you’ve been quite successful in promoting the interests of that company—or whatever it is, I don’t, I don’t know. RD: I think you’re [pointing at papers on chair]. That’s the defence infrastructure one—that’s the meeting I had just before you arrived. JC: Oh right, so you’re not there with that yet? RD: We’ve got, we’ve got to win the competition. HB: But you think you’re—do you have, I mean do you sort of pick up from your sources within the MOD whether you’re likely to be on-track to win. Is that, is that the sort of thing that you … ? RD: I think this consortium on that particular one is probably in pole position. If there’s a fair analysis of the relative merits of the three contenders, it ought to win, but Phillip Hammond the Defence Secretary will make the decision largely on the advice of Jon Thompson, the permanent secretary who he has just appointed, he was previously the finance director … um … who I’m rather targeting to talk to. HB: I see. RD: But this is a dinner in ten days’ time, and I’ve asked the organisers—can you put me next to him. HB: Ah, good plan. JC: What’s the dinner? RD: It’s the SSAFA Defence Industry dinner. SSAFA is one of the big service charities, and for … and for reasons best known to themselves, they host a dinner every year, which they invite most of the big defence companies to go to. JC: And is this, is he someone you know already? RD: Well, he was very keen to make the—he’s younger than me—he was very keen to make the connection, had I, had I realised we were at the same school? So, fine. 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT 51

HB: Oh, that’s great. And is it … JC: Good opportunity to talk about the merits of this … RD: Yes, that’s why I said to the person organising the SSAFA dinner that I’d be fascinated to sit next to him, because we were in the same—it would be good to catch up from school days. HB: Oh right, oh that’s brilliant. JC: Oh I see, so you’re currently … you what, you … are you employed by the consortium, or are you employed by one of the consortium? RD: Capita is the company I am involved with, who are in with URS and PA Consulting, and I’m on a daily rate with them. JC: Does that compare well to our, I mean are we paying a … RD: It … it depends how many days I do really. Um … actually it’s still early days … um … We need to win the competition. HB: And is it, um have they got to the stage where it’s, they’re in that purdah period where they’re not allowed to talk directly to the MoD anymore? RD: Well that’s exactly the reason why I had the meeting just before you came, because there was someone a little more junior to me in the Army who I’ve known quite a long time, who is employed by Capita, and I wanted to know from him who he was able to talk to, and what level of—it’s going back to what I was saying before, actually building a team that is layered um, because at various layers you can get greater or lesser access. HB: Yeah, absolutely, because presumably once they’ve gone into that period where they can’t do any more talking to the MoD then having people like you who can— RD: Well the real irony with this one though, is three companies contending to be the strategic partner have got less access now that they are formally on the shortlist than previously. So the real danger is that they all work up a wonderful solution that doesn’t actually answer the question. So [laughs] I’m very keen that we do understand what the question is to make sure that the answer we’re putting together actually answers the question. HB: And that’s because of this funny purdah rule? RD: Yes. JC: When does the purdah start? Is it once the contract is … once you’ve put the bid in for the contract, or … ? RD: I think now these three consortiums are now selected. JC: Oh because they’ve now been selected. The cho—the preferred bidders, or, or … RD: Well, the next stage is the preferred bidder. Once you’re the preferred bidder, then you’re—pretty much you can get on with it. JC: Right, ok. RD: It’s yours to lose at that point. JC: So the key now is getting to the preferred bidder. RD: To the preferred bidder, yes. I’ve seen a preferred bidder lose it in the past. 52 3RD REPORT FROM THE COMMITTEE FOR PRIVILEGES AND CONDUCT

Both: Oh really? RD: Yup, um … HB: So I suppose it’s just important to keep making sure you’re getting the last word all the time. [laughs] RD: Well sometimes the preferred bidder can lose it through no fault of their own, the Ministry of Defence can change its requirement … HB: Right, so I suppose that again, is important to keep on talking to them, so you know if that might be going to happen, so you can try and adapt last minute. It could be quite— RD: Yes and also keep an ear open for what … what’s affordable and what’s not affordable, what’s going to get cut out of the programme. JC: Do you have, do you have … in a … in a meeting like that, do you have to declare your interest for the company or not? RD: Um … it would be usual to do so. JC: Right. Even though it’s an informal dinner and in which … RD: I think it’s a matter of judgement really. I mean sometimes one can … um … have lunch with someone and declare one interest, and the conversation then ranges on to something else. JC: Hm, which might be your other interest? RD: Yeah, exactly. HB: Yeah, that’s a good way of doing it. RD: Yeah, because we’re all interested in these things. Both: Yeah. JC: I wish you luck with it and … HB: Yeah, I hope it goes well. RD: Good. Well look … um, I’m sorry I’m looking at my watch here … HB: No sorry, we’ve taken up so much of your time than we meant to … Lovely, well thank you so much for meeting us, it was great—let me, um, I think my card are in there—can I just grab that back, thank you. Let’s give you a card … RD: Look, I won’t ring you, you ring me. HB: Absolutely, I’m so glad you’re interested on principle, and we’ll, we’ll have a—we’ve got to schedule a video conference with the client in the next few days anyway, so we will try and talk to them then about this, and hopefully get back to you. Goodbyes.