Decision

Summary of business appointment applications - Rt Hon Sir Michael Fallon

Updated 5 June 2019

Sir Michael left his position as Secretary of State for Defence in November 2017.

1. Non-Executive Director, Infinite Percent

Sir Michael sought the Committee’s advice about taking up an appointment as a Non-Executive Director with Infinite Percent

The letter containing the Committee’s consideration and the conditions imposed on the appointment was sent in May 2019; and the appointment was taken later that month.

2. International Advisory Board, Investcorp International Ltd.

Sir Michael sought the Committee’s advice about joining the International Advisory Board of Investcorp International Ltd.

The letter containing the Committee’s consideration and the conditions imposed on the appointment was sent in August 2018 and the appointment was announced in September.

John Wood recused himself from this application.

3. Advisor, Klesch & Company Limited

Sir Michael sought the Committee’s advice about taking up a position as Advisor to Klesch & Company Limited, a global industrial company specialising in the production and trading of oil, chemicals and metals, and the trading of other global commodities and related financial derivatives.

The letter containing the Committee’s consideration and the conditions imposed on the appointment was sent in June 2018 and the appointment was taken up later that month.

4. Wilton Engineering Services Ltd

Sir Michael sought the Committee’s advice on accepting a commission from Wilton Engineering Services Ltd (Wilton) to research and write a report on “local content” in their supply chain contracts.

This is a one-off piece of paid work, which will take approximately 4-5 days, and will be published. It will not involve any contact or dealings with Government.

The Committee approached the Permanent Secretaries at the Ministry of Defence (MOD) and the Department for Business, Energy and Industrial Strategy (BEIS) for their views on the appointment.

The MOD confirmed it has no contracts or spend with Wilton Engineering Services, no knowledge of official contact between Sir Michael and Wilton and no concerns about this appointment.

The information provided by BEIS suggests that Wilton benefitted from the decision to award a contract for electricity generation to Ørsted’s Hornsea One offshore windfarm. However, the link between the Government’s decision to award the contract to Ørsted and Wilton’s involvement is indirect. Ørsted contracted with Steelwind Nordenham following a competitive tender process, and Steelwind is, in turn, engaging Wilton. There is, consequently, no basis for perceiving decisions Sir Michael made in office were in expectation of this short-term appointment with Wilton.

The Committee’s assessment is that it is unlikely that Wilton will stand to gain an unfair advantage as a result of Sir Michael’s time in Ministerial office. 3 ½ years have passed since he left his role as Energy Minister and while it is possible that he was party to discussions about energy matters in Cabinet as Defence Secretary, the Committee considers that the privileged information and lobbying bans set out below sufficiently mitigate any remaining risks.

Taking into account these factors, in accordance with the Government’s Business Appointment Rules, the Committee advised the appointment be subject to the following conditions:

• he should not draw on (disclose or use for the benefit of himself or the organisation to which this advice refers) any privileged information available to him from his time in ministerial office; and

• for two years from his last day in Ministerial office, he should not become personally involved in lobbying the UK Government on behalf of Wilton Engineering Services Ltd or their clients. Neither should he make use, directly or indirectly, of his contacts in Government to influence policy or secure business on their behalf.

The Committee’s advice letter was sent to Sir Michael in February 2018 and the appointment was announced in the same month.

5. Non-Executive Chairman, Avanton Ltd

Sir Michael sought the Committee’s advice on taking up an appointment as Non-Executive Chairman of Avanton Ltd (Avanton).

He explained the role will be paid, will involve approximately one day per month, and is not likely to include any contact or dealings with his former Department or Government more generally.

Sir Michael informed the Committee that he would be using his previous experience in property development to help grow and expand Avanton’s business.

The Permanent Secretary for the MOD was consulted and has no concerns about the appointment.

The Committee concluded that there is no basis for viewing this appointment as a reward for decisions made in office. Avanton is a newly established company, incorporated in June 2017, and the MOD has no contractual relationship with it or its sister company, Weinbergers Investments Ltd. The MOD has also confirmed that Sir Michael had no contact with Avanton or any other individual property companies during his last two years in office.

The Committee assessed that the risk of Sir Michael’s appointment affording Avanton an unfair advantage is low. In reaching this view the Committee acknowledged that whilst he had responsibility for Defence Estates Strategy, the company does not work in the defence sector and his role will not involve contact with Government. It placed weight on the assessment from the MOD that he would not have acquired any commercially sensitive information or specific information on estate planning which could be perceived as giving an unfair advantage to his prospective employer. However, to mitigate any propriety risks that might arise were Avanton to seek to acquire defence sites in future, it has imposed a condition on Sir Michael’s appointment precluding him from providing advice on the terms of or with regard to the subject matter of a bid or contract relating directly to the work of the MOD or its trading funds, property and estates.

As a former Cabinet Minister, Sir Michael was subject to a three-month waiting period before taking up any outside appointment.

The Committee advised that, in accordance with the Government’s Business Appointment Rules, the appointment be subject to the following conditions:

• a three month waiting period from his last day in Ministerial office;

• he should not draw on (disclose or use for the benefit of himself or the organisation to which this advice refers) any privileged information available to him from his time in ministerial office;

• for two years from his last day in Ministerial office, he should not become personally involved in lobbying the UK Government on behalf of Avanton Ltd, Weinbergers Investments Ltd, their partners or clients. Neither should he make use, directly or indirectly, of his contacts in Government to influence policy or secure business on their behalf; and

• for two years from his last day in Ministerial office, he should not provide advice on the terms of or with regard to the subject matter of a bid or contract relating directly to the work of the MOD or its trading funds, property and estates.

The Committee wrote to Sir Michael in January 2018 and he took up the appointment in February 2018.