Boris Johnson is facing questions over his support for a company that employed Guto Harri, his new communications chief, after it emerged the firm signed a £150m deal in Downing Street with the endorsement of the prime minister.
Harri, a former adviser to Johnson when he was London mayor, was a director of Hydro Industries when he accompanied a team from the water technology firm to No 10 in February 2020.
While they were in Downing Street, a press release from Hydro Industries revealed they signed a £150m deal with an Egyptian gas company and were provided with a supportive quote by the prime minister, with Johnson saying it was “exactly the type of contract in the post-Brexit era that showcases the best of UK industry”.
The Hydro Industries team also attended a St David’s Day reception at No 10 that day, where the chief executive spoke to Johnson directly. Tweeting a picture of the team and Harri in Downing Street, the firm said: “Grateful for the PM’s support and encouragement.”
Labour accused the prime minister of cronyism and questioned whether Harri had facilitated “privileged access to government” for the firm, which has given about £70,000 to the Tory party since 2015. They called on past communications between Harri and the government to be disclosed.
Harri, who has known the prime minister for decades, returned to work for his old boss this week to help him to deal with the fallout of the “partygate” scandal and to try to refocus his premiership on the challenges facing the UK.
But days into the new role as director of communications, Harri has come under scrutiny over his business interests, including lobbying No 10 on behalf of Huawei, a Chinese telecoms company that is currently being removed from the UK’s 5G network amid security concerns.
Hydro Industries was also one of 16 firms in Wales to get funding from the government’s Future Fund to help with pandemic recovery, which was later converted into equity worth £3.5m. This has given the government-owned British Business Bank a stake in the firm.
Executives from Hydro also met and were pictured with the prime minister at Conservative party conference last year but it is understood Harri was not present on that occasion.
Hydro is a prominent company in Wales, with its chairman, David Pickering, a major figure in Welsh rugby, and the £150m deal was to build a water treatment plant in Egypt to service an oil terminal on the Red Sea coast.
No 10 declined to answer questions about whether Harri had facilitated access to Johnson for Hydro Industries. A spokesman for No 10 said: “Guto resigned as a director of Hydro Industries on taking up a position for No 10.”
Harri has previously made clear on social media that he is proud to have worked for the company and its work on clean water.
Harri stepped down from his non-executive board position at the firm on Monday and has also resigned his position at Hawthorn Advisors, the lobbying firm that represents Huawei. However, No 10 has not disclosed whether Harri retains any equity in companies he has worked for.
He would likely be advised by the Cabinet Office’s propriety and ethics team on whether he is allowed to keep any private business interests.
Links between Johnson, Harri and Hydro Industries have previously been reported by Voice.Wales and OpenDemocracy but Harri’s appointment to Johnson’s top team raises fresh questions about the revolving door between private business and government.
Angela Rayner, the deputy Labour leader, said it was an example of “cronyism” and called for “full transparency from Harri about any shares, profit or ownership arrangements he maintains with Hydro Industries and disclosure of all contact he had with government before he took up his new appointment”.
She added: “It’s vital that anyone entering government service leaves their private sector interests at the door. The prime minister needs to make clear to Guto Harri the restrictions on his interests outlined in the special advisers’ code of conduct. The rules are there for a reason and they have to apply to everyone.”
Hydro Industries did not answer questions about its past dealings with No 10. Wayne Preece, the chief executive of the company, said: “We can confirm that Guto has this week resigned as a board director and we all wish him the very best in his new appointment.”
Following questions about Harri’s lobbying for Huawei, No 10 defended his appointment saying he had previously “provided advice to the clients of a private company, and that is entirely legitimate”.
