20 January 2012

Response from the Alliance for Lobbying Transparency to government proposals for a statutory register of lobbyists.

Tamasin Cave of ALT says: "As anticipated, the government's plans for transparency regulations for the influence industry have lobbyists' fingerprints all over them. The proposals lack both breadth and depth: they would reveal on only a tiny proportion of the industry, and then no meaningful information. The lobbying industry has triumphed here. This is what they want; a partial system of minimal disclosure.

The key flaws in the government's plans are:

• It would only cover lobbying agencies: the plans are for only 'those who undertake lobbying activities on behalf of a third party client' should be covered, ie lobbying agencies. This would exclude the thousands of people who work in-house for large corporations, trade bodies, charities and others. This is non-sensical when in-house lobbyists outnumber lobbyists-for-hire by at least 4 to 1. It would mean, for example, a supermarket with a team of 10 in-house, full-time lobbyists wouldn't have to register, but if it temporarily took on an agency to increase its lobbying firepower, only the agency would have to register its lobbyists. 

• It would reveal little meaningful information: It is one thing to know who is lobbying for whom, but without disclosure of what they are lobbying for, it would be impossible to scrutinse the influence they are having. The register must reveal their activities: we need to see which policies, legislation, regulation and government contracts they are seeking to influence. Imagine the case of defence company X: It hires lobbying agency Y. This much would be recorded on a public register under the government's plans. What would not be revealed is that defence company X is lobbying for a government contract worth millions of pounds. Or supermarket X is hiring agency Y. Are they lobbying on tax issues, planning law, food or alcohol policy? Without this being revealed, the information on the register would be meaningless.

In addition, ALT considers the following key to a robust register:

• Financial information: the government acknowledges the call for financial information to be included on the register, but appears luke-warm on the details. We need public scrutiny of how much money is being spent trying to influence our politicians. If we knew, for example, how much money was being spent by the private healthcare industry for the current NHS reforms, it would change the debate entirely.

• Independent of the industry: ALT agrees with the government that the register should be held by a body independent of the industry. However, it should be publicly funded with adequate resources to monitor and enforce it.

Today's announcement is long overdue. Nearly two years ago David Cameron warned that lobbying in this country had got 'out of control'.  Now is the time to shine a light on those that seek to influence our politicians. The government must now listen to a public that feels shut out of decision-making and allow real public scrutiny of lobbying. We need a statutory register to require lobbyists to reveal who is is lobbying whom, what they are seeking to influence and how much money they are spending on lobbying. Anything less and we can assume that they are willing to put the interests of their friends in the influence industry above public demands for full transparency."

The Cabinet Office's consultation document can be downloaded here.

19 January 2012

The government is expected to announce its plans for a statutory register of lobbyists tomorrow (Friday 20 January). Ahead of publication of its consultation, Tamasin Cave of the Alliance for Lobbying Transparency said:

"The devil will be in the detail. We need a robust, compulsory register to reveal: who is lobbying whom, what they are lobbying about, and how much is being spent trying to influence our politicians. And it needs to be overseen by a body independent of the industry.

Anything less and we can assume that the government is putting the interests of its friends in the influence industry above public demands for full transparency.

David Cameron has voiced deep concerns about lobbying in the UK getting 'out of control'. The government must now tackle this £2billion industry and bring their activities into the open. Britain needs to catch up with other countries and allow real public scrutiny of lobbying with a robust register of lobbyists. Only then will we be able to fully understand the impact they have on the way this country is run."

The Alliance for Lobbying Transparency is calling for a robust statutory register, which would require lobbyists - whether companies or trade unions, lobbying agencies or law firms, and larger charities (above a minimum financial threshold) - to regularly declare on a public register:

• Names of individual lobbyists;
• The special interest lobbying (either the employer or agency clients);
• Public body being lobbied;
• Information on any public office held by lobbyists within 5 years (to reveal the 'revolving door')
• Area of policy they seek to influence, whether legislation, regulation or 
public contract;
• Amount of money spent on lobbying (good faith estimate). This will reveal scale, disparities and trends in lobbying.

9 Dec 2011

In the wake of this week's lobbying scandal involving Bell Pottinger, one of the lobbyists' key prepresntative bodies has dropped its opposition to full transparency, and backed calls for a statutory register of lobbyists.

Tamasin Cave of the Alliance for Lobbying Transparency said: "Lobbyists have finally recognised the public's legitimate demand that they operate in the open.

"The government is now the stumbling block to reform. It must publish its plans for a statutory register of lobbyists without delay, and appoint a senior government figure to push the policy through.

The industry wants this, politicians now need to make it happen. Lobbying that's shrouded in secrecy leads to scandal. But it can be legitimate, so long as its in the open and we can see who is lobbying whom, about what, and how much money is being spent in the process." 

By the industry's own admission, its attempt to provide an alternative to an independent statutory register  "lacks credibility and competence". This failure has delayed a statutory register by 18 months. The government must delay no more."

8 December 2011

Following this week's revelations about lobbying, the Independent reports today that "the trade body which represents the UK's public relations and lobbying industry is to investigate Bell Pottinger over claims made by executives during a business pitch to undercover reporters".

A rival lobbyist, Mark 'stand up for lobbying' Adams, has made the complaint to the Public Relations Consultants Association (PRCA), one of three trade bodies running the lobbying industry's system of self-regulation. 

Adams states: "I am a strong proponent of self-regulation for the lobbying industry...Ideally Bell Pottinger will clear their name and demonstrate they have done nothing wrong. But if they have behaved in an unethical manner, then the appropriate sanctions should be taken against them."

The toughest sanction available to the PRCA is that they terminate Bell Pottinger's membership. That's it. And you thought the Press Complaints Commission lacked teeth. 

So the worst that can happen is that Bell Pottinger gets chucked out of the club. The result would be that they would no longer be required (under the PRCA rules) to declare their lobbyists and clients on a voluntarily register. They would join the scores of other agencies who choose to stand outside the system and remain in the shadows. 

This would probably suit Bell Pottinger down to the ground. Only three years ago Bell Pottinger Public Affairs' chairman, Peter Bingle, openly told a committee of MPs that he was opposed to transparency. Committee member Paul Flynn MP addressed Bingle: "You've worked for mass murders, racists, people who've oppressed their own people...Doesn't the public have a right to know who your clients are?" No, Bingle replied, "the public has no right to know."

This is a test of the system of self-regulation. If the PRCA refuse to act, and Bell Pottinger is let off the hook (it does appear to be in clear breach of the PRCA's code), self-regulation will be seen for what it is: 'little better than the emperor's new clothes' is how the Committee of MPs described it. The system was designed by lobbyists as a way to head off statutory regulation.

But if the PRCA comes down hard on Bell Pottinger, the firm will be free to operate outside of the system, without any public scrutiny at all.

If anything underlines the need for a statutory register of lobbyists, which would compel lobbyists to operate in the open, it's this.

6 December 2011

Claims of influence and access by lobbying firm Bell Pottinger have been met by an astonishing denial from Downing Street, the prime minister's official spokesman telling reporters today:

“It simply isn't true to say that Bell Pottinger or any other lobbying company has influenced government policy... I am challenging this idea that this company or any other lobbying company have influenced policy.”

It’s in the interests of lobbyists to advertise their influence on politicians, and in politicians’ interest to deny it. But is there any truth in the government’s claim; should lobbying firms just shut up shop and go home?

Leaving aside the too-many-to-mention UK government policies covered in the fingerprints of lobbyists, and the obvious truth that companies wouldn't pay for lobbying if it didn't work, there are a number of studies that explain why companies invest in lobbying. (Most are from the US, which says a lot about the transparency they have in lobbying stateside, and how little knowledge we have of our industry here, clothed as it is in secrecy).

• American corporations currently spend about $3.5 billion/year on lobbying.  It has been estimated by the right-wing Cato Institute that the value of the resulting corporate welfare is about $90 billion/year.

• A recent study shows that the rate of return for money spent on lobbying for corporate tax benefits alone is between 6 and 21 times.

• Another study demonstrates that firms which lobby ‘significantly outperform non-lobbying firms with respect to increased market value of equity'.  This can be as high as adding another 2% per year to returns.    

• Related to this, the Economist reports that an index based on the amount of lobbying that American firms do has outperformed the broader market since its creation in 2008. “The results have been stunning,” reports the Economist, “comparable to the returns of the most blistering hedge fund".

• According to a study on the connections between lobbyists and politicians in the US, it’s been found that the most 'politically connected' lobbyists, those with the closest relationships to senators, suffered a 24% fall in revenues when 'their' senator left office. The value of direct access to influential Cabinet ministers has been estimated at £112,000.

Alliance for Lobbying Transparency statement: 6 December 2011

“This is reminiscent of the old Tory days of sleaze. A Conservative government at the heart of yet another lobbying scandal. Last month’s led to the resignation of the defence secretary. This one leads to the Prime Minister himself.
 
One of the lobbyists caught by today’s investigation by the Independent / Bureau of Investigative Journalism, Tim Collins, is the chief lobbyist at Bell Pottinger Public Affairs. He is caught on camera boasting of his contacts:
 
“I was in the Conservative research department with David Cameron and George Osborne… I was in the Shadow Cabinet under two or three leaders, again with David Cameron and George Osborne… I've been working with people like Steve Hilton, David Cameron, George Osborne, for 20 years-plus. Edward Llewellyn, who's the Prime Minister's chief of staff, was my deputy in Central Office for a long time. Steve Hilton was my deputy in a different capacity. I know all these people. There is not a problem in getting the messages through to them.”
 
In a speech before last year’s election, David Cameron attacked “secret corporate lobbying”: “We all know how it works. The lunches, the hospitality, the quiet word in your ear…  It arouses people’s worst fears and suspicions about how our political system works… a cosy club at the top making decisions in their own interest.”
 
We all know how it works now.
 
Yet, in government, Cameron’s hostility to lobbyists appears to have evaporated, along with his commitment to “shine the light of transparency on lobbying in our country”.
 
In recent months we have learnt that it is “completely commonplace" for Whitehall departments to contact corporate lobbyists about government business using text messages as a way to avoid disclosure under the Freedom of Information Act. We’ve  seen the “systematic use of private e-mails” by education Secretary Michael Gove for the same reason.  Local government secretary, Eric Pickles, kept hidden a dinner with lobbyists (the same firm, Bell Pottinger, incidentally) and businesses with an interest in his department, because he claims to have attended in a ‘private’ and not a ‘ministerial’ capacity. A week before the publication of the government’s radical changes to the planning system, planning minister Bob Neill enjoyed an informal drink on the lawns of Westminster Abbey with Tesco’s chief lobbyist Lucy Neville-Rolf.
 
Meanwhile, there are the very private relationships between members of the Cabinet and lobbyists: former defence secretary Liam Fox’s friendship with lobbyist Adam Werritty led to his resignation. Last month, the partner of energy secretary Chris Huhne was caught hawking her services to lobbying firms on the strength of her “excellent contacts... from Cabinet members to more junior ministers”; The health secretary Andrew Lansley’s wife runs a lobbying firm that boasts clients in the drug and food business, and advices on establishing “positive relationships with decision-makers”.  Nick Clegg, who is ultimately responsible for the lobbying register’s introduction as head of the Cabinet Office, will not take a position on the policy because his wife is a lobbyist.
 
We were reminded last month of the Prime Minister’s relationship with his neighbour and close ally Lord Chadlington, thanks to a deal they had struck over a plot of land and a garage. Like Lord Bell, Lord Chadlington owns and runs a vast communications group that includes three lobbying firms, whose clients include HSBC, Tesco and the City of London Corporation. Employees include lobbyists George Bridges, who is Cameron's former campaign director and a good friend of the Chancellor George Osborne; and Malcolm Morton, an ex-adviser to the Cabinet Office Minister in charge of regulating lobbyists, Mark Harper.
 
“I believe that it is increasingly clear that lobbying in this country is getting out of control,” said David Cameron in opposition. The situation under his leadership, is undoubtedly worse.
 
And yet, there is no sign of the only measure capable of revealing such behind-the-scenes lobbying – a statutory register of lobbyists. It’s time his government ignored the private protests of the influence industry – whether Conservative peers, former colleagues, friends, neighbours, or wives – and listened to public demands for transparency.
 
The longer he delays the greater the smell.

2 October 2011

With a straight face, the Policy Exchange think tank is hosting an event at next week’s Conservative conference called: Let there be Light: Technology, transparency and fixing Britain’s broken government.

The line up of speakers includes: Francis Maude MP, Minister for the Cabinet Office (and co-founder of Policy Exchange); Rishi Saha, Director at PR and lobbying giant Hill & Knowlton and former Head of Digital Communications in No 10; and Piotr Brzezinski, Head of Digital Government at the Policy Exchange.

So, should we be looking to politicians, think tanks and lobbyists for how to fix Britain’s broken government?

Let’s start with politicians: Policy Exchange’s first chair, Michael Gove, for example, appears to be using technology to hide government business from the public: he’s just been caught using a private email account (registered in his wife’s name) to discuss policy with his advisors. This, they (wrongly) claim, exempts such correspondence from Freedom of Information laws.

More regressive use of technology was revealed last week: the routine use of texts by ministers to contact corporate lobbyists about government business, again as a way to slip through the net of Freedom of Information requests.

Do think tanks fare any better on transparency?

Radio 4’s latest File on 4 programme posed the question: Is there a conflict of interest when public servants take private sector jobs?

The so-called ‘revolving door’, which the programme examines, is part of the lobbying toolbox. How does a company wanting to secure government contracts get its foot in the door of the government department? One of the best ways is to employ an insider, someone with the political contacts in the department and detailed knowledge of how the system works.

While some have argued that this leads to better understanding between commerce and government, the pitfalls are enormous. “Crony capitalism ” is how David Cameron referred to it in a speech on lobbying last year: “We all know how it works. The lunches, the hospitality, the quiet word in your ear, the ex-ministers and ex-advisors for hire, helping big business find the right way to get its way.”

When a Committee of MPs conducted an inquiry into lobbying a couple of years ago, it concluded on the issue of the revolving door: “With the rules as loosely and variously interpreted as they are,  former Ministers in particular appear to be able to use with impunity the  contacts  they  built  up  as  public  servants  to  further a private interest”.  

This appears to be particularly the case with former health ministers. Here's a list: