Hammond accused of breaching rules on access for bank

‘He has entirely disregarded the conditions that were made clear to him when he took the job with the bank’

LORD Hammond of Runnymede, the former chancellor, has been accused of breaching the ministerial code after writing to one of his former senior officials to advocate on behalf of a bank he was paid to advise.

In an email obtained by The Sunday Telegraph, Lord Hammond told Charles Roxburgh, the Treasury’s second most senior civil servant, that OakNorth Bank wanted to offer the Government the use of a “toolkit” it had developed to assess potential borrowers.

He attached the company’s pitch to the Treasury and asked Mr Roxburgh to “pass it to anyone else who might be appropriate”. Labour said the intervention by Lord Hammond, who became a paid adviser to OakNorth after leaving government in July 2019, flouted an explicit ban by the advisory committee on business appointments on contacting officials and ministers on behalf of the company to influence policy or secure business.

In a letter to the former chancellor on Dec 4 2019, the committee said: “For two years from your last day in ministerial office, you should not ... make use ... of your government and/or ministerial contacts to influence policy or secure business on behalf of OakNorth.”

The ministerial code states former ministers “must abide by the advice of the committee”. A spokesman for Lord Hammond insisted no rules were broken because OakNorth were offering their toolkit to the Treasury “free of charge”. “The email makes very clear that this was not a commercial offer,” the spokesman said. “He did not engage in any lobbying and acted entirely within the rules.”

But Angela Rayner, Labour’s deputy leader, said: “Philip Hammond has broken the ministerial code, which is very clear about the conduct of former ministers. The breach needs to be investigated by the Cabinet Secretary.

“Hammond has entirely disregarded the conditions that were made clear to him when he took the job with OakNorth Bank. If the rules are treated with such derision by the former chancellor, then the whole system is rotten.”

The disclosure follows a series of embarrassing revelations about David Cameron’s involvement in extensive lobbying for Greensill Capital last year.

Mr Cameron left Downing Street in 2016 so his work for Greensill was not covered by the standard ban preventing ministers contacting former colleagues

on behalf of new employers for two years.

Mr Roxburgh, the Treasury’s second permanent secretary, who was also intensively lobbied by Lex Greensill, Mr Cameron’s former employer, went on to meet senior representatives of OakNorth less than a month later, on Aug 10. Replying to Lord Hammond’s email, he said that he was “trying to schedule a meeting” with Rishi Khosla, the co-founder of OakNorth.

A Treasury spokesman said: “Senior officials and ministers routinely meet with a range of private sector stakeholders, and we received representations from the entire spectrum of British business during the pandemic. We considered the proposals from OakNorth Bank in the usual way before rejecting them.”

OakNorth is accredited as a lender as part of the Government’s Covid support schemes, in which capacity Treasury officials have held routine talks with the firm.

In an email to Mr Roxburgh on Friday July 24 2020 – a year after quitting as chancellor – Lord Hammond named the Treasury officials whom OakNorth had already managed to meet about their proposal, adding “none of which” he remembered from his time in office. OakNorth, he said, were “very keen to ensure that the right people” in the Treasury see a presentation they had prepared, and which he attached to his email.

In the email, addressed “Dear Charles”, and obtained by The Sunday Telegraph under the Freedom of Information Act, Lord Hammond wrote to Mr Roxburgh: “As you may be aware, I am on the advisory Board of OakNorth Bank. During the crisis, OakNorth has used its data-driven model to develop a Covid stress-testing toolkit which analyses borrower vulnerability at subsectoral level, primarily as a tool for managing its loan book and to support other banks using the OakNorth platform to manage their small business loans. However, the OakNorth data science team is also very keen to explore whether there could be a role for this toolkit to support future policy lending to smaller businesses in the recovery.”

OakNorth had, Lord Hammond said, “presented” to Bank of England officials several weeks earlier and “the week before last came into the Treasury”.

He added: “They are very keen to ensure that the right people in HMT [Her Majesty’s Treasury] see this presentation, and I hope you won’t mind me attaching an updated copy of the PowerPoint that they presented for your information. Perhaps you would pass it to anyone else who might be appropriate. OakNorth is very proud of the platform they have built and would love to think that it might have a use beyond the commercial.”

In a response shortly after 8am on the Monday morning after Lord Hammond’s Friday email, Mr Roxburgh said: “My office is trying to schedule a meeting with Rishi K shortly.”

Lord Hammond’s spokesman said: “Lord Hammond contacted HMT about OakNorth’s offer to make their IP available to the Government free or charge.”

A spokesman for OakNorth said: “There was absolutely no reference to payment in the presentation.”