Labour has accused the government of not being serious about tackling sleaze after ministers declined to punish or reprimand the Conservative former chancellor Philip Hammond for using his government connections to help a bank he is paid to advise. Labour’s deputy leader, Angela Rayner, said the government had “muzzled its own watchdog” after it emerged that no action would be taken against Hammond despite an official ruling that his actions had not been “in keeping with the letter or the spirit” of rules for ex-ministers. In August, the Advisory Committee on Business Appointments (Acoba), which looks at jobs taken by former ministers, said it was an “unwise step” for Hammond to contact a senior Treasury official about a project developed by OakNorth. Hammond argued he emailed Charles Roxburgh, the second permanent secretary at the Treasury (HMT), to establish that senior officials in the department were aware the bank was offering free support to aid the Covid pandemic national response. The chair of Acoba, Eric Pickles – who like Hammond is a former Tory MP and now a peer – ruled that Hammond should not have sought to use contacts made in government. “I do not consider it was in keeping with the letter or the spirit of the government’s rules for the former chancellor to contact HMT on behalf of a bank which pays for his advice,” Pickles wrote to Michael Gove, who at the time was the lead Cabinet Office minister. Pickles said it would be up to Gove, who has since moved to the Department for Levelling Up, Housing and Communities, to decide what sanctions would be appropriate in the case. After Pickles’ letter to Gove on 31 August there was no update until Rayner submitted a written parliamentary question to the Cabinet Office this week, asking whether any action was being taken. The reply, from Michael Ellis, who as paymaster general holds a more junior Cabinet Office title, told Rayner that “although we concur with the committee’s conclusion, we do not believe further sanctions should be taken given the particular circumstances of this case”. In a letter to Pickles yet another Cabinet Office minister, Tory peer Nicholas True, argued that Hammond had stated he was not seeking to lobby for commercial gain, and that there was also the “broader context” of the Covid pandemic. But Rayner said the response was “just the latest evidence that Boris Johnson will not tackle the corruption that has engulfed his government and the Conservative party”. She said: “By letting Hammond off the hook, the government has muzzled its own watchdog. Even when their own hand-picked anti-corruption tsar, a former Tory cabinet minister, asks them to take action over a flagrant breach of the rules they have outright refused.”