Wednesday, 23 April 2014 10:01

Lax lobbying rules lead to reform

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Australia's rules for lobbyists, which the UK has chosen to copy, are set to be reformed in the wake of yet more lobbying scandals. 

Prime Minister Tony Abbott is said to be 'deeply concerned' about the behaviour of officials and former MPs in his Liberal Party as they try to covertly influence government decisions outside of the rules. In recent weeks, an official inquiry has exposed evidence of murky political ­influence-peddling in the party.

As a consequence, Australia's weak transparency regulations for lobbyists have come under scrutiny. Currently, only lobbyists-for-hire working on behalf of third party clients are required to declare their existence on a public register. Lobbyists working in-house for corporations are exempt from the rules. 

This is the model register of lobbyists adopted by the UK government earlier this year. It will require that only a tiny fraction of lobbyists sign up. As one former Australian politician says of this system: 'What you've got covered is the tip of the iceberg.'

'Chairmen of boards, boards of directors, CEOs, directors of government relations for any Australian company can walk in and out of any Australian parliament unrecorded and unregulated.'

The UK government has been warned that scandals involving lobbyists will continue to dog politics unless robust transparency rules are put in place. Yet, it is determined to follow the weak system adopted by Australia, a system now undergoing urgent reform. 

“We need to bite the bullet and get this process done and dusted," Liberal party member and long-term advocate for party reform, John Ruddick, told the Guardian.

The UK government seems intent on taking the same road, one that inevitably leads to more scandals, resignations and damage to the reputation of politics. 

Wednesday, 16 April 2014 13:07

Shining Big Tobacco's shoes

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US Chamber of Commerce chief Tom Donohoe (right) meets José Manuel Barroso in Brussels
US Chamber of Commerce chief Tom Donohoe (right) meets José Manuel Barroso in Brussels

Two very powerful Americans – let’s call them VPAs – have been welcomed to Brussels by the EU’s grandees over the past month.

The first of these visitors was Barack Obama. Displaying his usual charm, the president received a lot of attention when he declared his love for Belgian beer and chocolate.

By contrast, the second visit of a VPA went largely unreported. It was by Tom Donohoe, head of the US Chamber of Commerce. Last week, he met top-level representatives of the European Commission.

The low profile nature of his trip belies Donohoe’s influence.

The US Chamber of Commerce boasts of being the world’s largest business association. It has spent more than $1 billion on lobbying since 1998.

Donohoe, who commands a $5 million annual salary, was in town to discuss the planned trans-Atlantic trade and investment agreement.

Nothing to hide?

While Donohoe was chatting with Karel de Gucht, the EU’s trade commissioner, their meeting took place behind closed doors. De Gucht’s spokesman refused to give me any details about what was discussed, replying with a bland comment about how it was a “stakeholder meeting”, rather than a formal negotiation. That was despite how de Gucht claimed not long ago that he has “nothing to hide”.

As it happens, de Gucht has many things to hide. And he has good reason not to be transparent. Because if de Gucht was really candid about what he and his colleagues are doing, they would probably face mass public resistance.

Labour has pledged to repeal the Lobbying Act if it gets into power. This is welcome news. The 'dog's breakfast' of a law is not fit-for-purpose and must be rewritten.


The Lobbying Act, which was passed by the Coalition in January this year, purports to introduce new transparency rules for lobbyists. The statutory register of lobbyists contained in the Act, however, is a fake. It will not allow the public to see who is lobbying the government. 


Ed Miliband has now committed Labour to introducing a more robust register. Sensibly, Labour's register would cover all lobbyists. The Coalition's covers only a small fraction of the industry. It remains to be seen, however, whether the opposition would require lobbyists to reveal enough information to allow us to know who is lobbying whom in government, and what they are seeking to influence, whether that's fracking regulations, NHS contracts, or more tax breaks for multi-nationals. The current register, as laid out in the Lobbying Act, would reveal none of this. It is merely a list of (some) lobbying companies and their clients


A robust register of lobbyists that is fit-for-purpose must: 

Cover all lobbyists, including: those working in-house, whether in a corporation, a trade union, a charity or a trade body; and all lobbyists-for-hire, whether working for a lobbying agency, a law firm, an accountancy firm, in a management consultancy or a think tank. 
 

Require lobbyists to reveal sufficient information, namely: who is lobbying and for whom; what they are lobbying for; whom they are lobbying in government; and how much they are spending to influence government. 
 

Be financed by the public purse. We know from other countries that have robust transparency rules for lobbyists that the costs associated with operating a register are not significant. Transparency in policy-making is the responsibility of the state, and should not be financed by the industry.


The government must now own up to the fact that its new rules for lobbyists are a sham. Everyone knows they are a sham (including the commercial lobbying industry). Any more lobbying scandals in the run up to the general election will expose them for what they are. 

 

Since the mid-noughties the private health insurance industry has worked to 'get some of the think tanks' to 'help it take forward the debate' over how to pay for healthcare in Britain. Is today's report by Reform calling for NHS charges the result?

People in England should be forced to pay a £10-a-month NHS "membership charge" if we want to save the service from ruin, according to the report by the think tank Reform. 

Solving the NHS care and cash crisis also recommends that people staying overnight in hospital should pay ‘hotel charges’. 

Reform, which has long advocated free-market reforms to the NHS, is funded by companies which would benefit greatly from the introduction of changes to the way we pay for healthcare. These have included General Healthcare Group, the UK’s largest private hospital firm, but more significantly a large number of corporations in the private health insurance industry. 

In recent years Reform has been funded by: Prudential, Legal & General, Scottish Widows, Aviva, Benenden insurance, Gen Re (reinsurer of health products) and US health insurance giant UnitedHealth, which has faced accusations of overcharging and malpractice. The industry’s trade body, the Association of British Insurers, is also a donor. 

Prudential was Reform’s most generous funder in 2012, handing over £67,500. What it received in return is not known. Reform describes itself as determinedly independent and states that none of its research is funded by either companies or individuals.

However, in the mid-noughties, a lobbyist for Standard Life Healthcare, which is now part of PruHealth, grumbled about the communication challenge facing the private healthcare industry (page 6 of pdf).

Wednesday, 26 March 2014 00:00

Your guide to corporate lobbying

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Originally published in the Guardian, 12 March 2014

What does a tax-avoiding, polluting, privatising corporation have to do to get its way with the British government? "We all know how it works," said David Cameron of lobbying. But do we? Lobbyists are the paid persuaders whose job it is to influence the decisions of government. Typically, they operate behind closed doors, through quiet negotiation with politicians. And the influence they enjoy is constructed very consciously, using a whole array of tactics.

Lobbyists operate in the shadows – deliberately. As one lobbyist notes: "The influence of lobbyists increases when it goes largely unnoticed by the public." But if the reasons why companies lobby are often obscured, it is always a tactical investment. Whether facing down a threat to profits from a corporate tax hike, or pushing for market opportunities – such as government privatisations – lobbying has become another way of making money.


Here are the 10 key steps that lobbying businesses will follow to bend government to their will.


1. Control the ground

Lobbyists succeed by owning the terms of debate, steering conversations away from those they can't win and on to those they can. If a public discussion on a company's environmental impact is unwelcome, lobbyists will push instead to have a debate with politicians and the media on the hypothetical economic benefits of their ambitions. Once this narrowly framed conversation becomes dominant, dissenting voices will appear marginal and irrelevant.

Everybody's doing it, including lobbyists for fracking and nuclear power, public sector reform and bank regulation. It doesn't matter if the new frame relies on fabrication. The referendum on an alternative voting system was not, as anticipated, so much a conversation about the merits of first past the post. No2AV was "very quick off the mark" to make it about cost to the public purse, explains Dylan Sharpe, of the No camp's TaxPayers' Alliance. They led with the claim that switching to AV would deny troops badly needed equipment and sick babies incubators. The Yes camp lost the vote two to one.


2. Spin the media

The trick is in knowing when to use the press and when to avoid it. The more noise there is, the less control lobbyists have. As a way of talking to government, though, the media is crucial. Messages are carefully crafted. Even if the corporate goal is pure, self-interested profit-making, it will be dressed up to appear synonymous with the wider, national interest. At the moment, that means economic growth and jobs.

Wednesday, 29 January 2014 12:17

Lobbying: it will come back to bite them

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With the controversial Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill passing through the Lords last night, the government can now tick the box that says it has introduced a register of lobbyists. But it has not fulfilled its promise to open up lobbying. 

The register of lobbyists, now set to become law is a fake. A sham. It will not allow the public to see who is influencing our politicians.

As the graphics above and below show, the government's register fails in two key ways. First and fundamentally, it covers barely any lobbyists, requiring only those working as lobbyists-for-hire who meet ministers (or permanent secretaries) to register (image above). All in-house lobbyists working inside banks, energy firms, payday loan lenders, alcohol and tobacco companies etc are exempt, as are corporate lobbyists in business lobby groups like the CBI, as is anyone who doesn't lobby a minister directly, which is the majority.

Second, it will reveal nothing of what or whom they are seeking to influence (image below). Lobbyists in those agencies that have direct contact with ministers will be required to list merely their clients. There will be no record of dealings with special advisers, civil servants or regulators; no information on what they are seeking to influence or what deals are being done; nor how much money is being spent to sway government. 

The government's decision to pretend to open up lobbying will come back to bite them. Lobbyists are a permanent feature in British politics. They are not going away and neither will the widespread feeling that their private interests are being favoured over the public interest. 

This new law will do nothing to open up decision-making and restore trust. It is an exercise in epic time-wasting. 

 

 

 

Friday, 17 January 2014 14:03

Lobbying: a roundup of the week

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Westminster’s failed attempt to open up lobbying continues; making the case for a register in Scotland; and the business of politics exposed.

First, the Lobbying Bill, working its way through the Lords, remains a dog’s breakfast, despite efforts by some peers to improve it. 

Monday’s session in the House of Lords created the potential for a tiny tweak to the Bill. One of the major loopholes in the government’s Bill was made marginally smaller when peers voted through an amendment that would require lobbyists who meet with ministerial special advisers (SpAds) to register their lobbying.  

As it is currently drafted, only lobbying of ministers and permanent secretaries would trigger registration, which as any commercial lobbyist will confirm, is seldom the case. It remains to be seen whether the government will accept this minor change to the Bill. 

Regardless, the register of lobbyists proposed in the Bill remains bogus. It will not allow us to see who is influencing our politicians and for what, whether that’s a tax break, more privatisation or fighting against public health measures. As shadow cabinet office minister, Baroness Hayter remarked this week: 'It introduces a register of lobbyists so limited that it is not worthy of the name and might actually make things worse.'

***

Meanwhile the Alliance for Lobbying Transparency and others campaigning for a register have given evidence this week to Members of the Scottish Parliament conducting an inquiry into the need for a register at Holyrood. Commercial lobbyists in Scotland were also given the opportunity to present their case.

Downplaying their role in influencing the decisions of government, representatives of the lobbying industry insisted their role was merely to ‘inform’ politicians’ decisions. No mention was made of the massive, persuasive campaigns orchestrated by lobbyists to shift government thinking.   

A representative from the trade body, the Association of Professional Political Consultants, Illiam Costain McCade, did suggest, however, that commercial lobbyists would be willing to reveal more information on their lobbying activity, namely their interactions with politicians. He told the inquiry that lobbyists in the APPC would be willing to publicly declare more than just who is lobbying, but also who they’re meeting in government and what was discussed. Previously, the lobbying body has agreed only to reveal the names of lobbyists and their clients, information that is useless for anyone trying to find out about lobbyists’ dealings with politicians. This is a welcome step forward. 

The Scottish inquiry comes on the back of a commitment in the summer by the Scottish government to introduce a bill on Lobbying Transparency within this session of the Scottish Parliament, after Labour MSP Neil Findlay’s private members’ bill got cross-party support in Edinburgh. 

***

Finally, looking forward to this programme from the BBC on Monday: Declared Interests: the business of politics (Radio 4, 8pm). It promises to expose ‘the ways in which outside interests try to gain access to the corridors of power without anyone breaking the rules.’ Timely stuff.   

The Lobbying Bill being debated this week will do nothing to expose corporate lobbying. If we are going to diminish their influence in government, we need to understand their tactics better and call them out. 

The addiction industries – gambling, alcohol and now sugar – had it tough last week. All are under pressure to defend their industries against increasing evidence of their harm and calls for intervention. But the chances of this government acting in the wider public interest are almost nil. Lobbying by these industries has put paid to that. 

The lobbying strategies they employ to win politicians to their cause are strikingly similar. And they have all learnt their tactics from one industry: tobacco.

The lobbying starts with denial. When the sugar industry was last week forced onto the back foot by public health scientists calling for action to cut sugar intake to protect public health, the predictable response was to deny the now substantial evidence showing sugar’s harm: ‘Sugars... are not the cause of obesity,’ said industry lobby group, the Food and Drink Federation. This has long been the position of the industry.

Support for the government's mock register of lobbyists shows the Liberal Democrats are not reliable champions of clean and open politics.

Ahead of this week’s debates on the controversial Lobbying Bill, Lib Dem peers Paul Tyler and Shirley Williams are seeking to reassure their natural allies in the charity world. The Gagging Bill, as the legislation has been dubbed, will not impact the sector it says, contrary to what 120 NGOs believe.

According to the Lib Dem peers in today's Guardian, "the point" of the Bill, which introduces curbs on the money spent in the run up to elections, is simply to "prevent big money piling into constituency election campaigns, dwarfing the spending limits of candidates themselves, and effectively buying seats for rich benefactors."

This "noble purpose", they claim, is an issue dear to the Lib Dems, who have always pushed tirelessly to stop influence and access being auctioned off to the highest bidder. 

Yet, the Lib Dems active involvement in pushing through Part 1 of the Bill, the supposed register of lobbyists, exposes their true position: they don’t want big money damaging their electoral hopes, but they are happy for corporate lobbyists – whose trade is in access and influence – to remain under the radar. 

The £2bn commercial lobbying industry, which as we have seen recently is more than capable of shifting public policy, is of little concern to the party. The regulations in Part 1 of the Bill, which are supposed to open up ‘secret corporate lobbying’, are a sham. They will do nothing to shine a light on who, on a regular basis never mind in the run up to an election, has access and influence over government. Thus far, the Lib Dems have been unwavering in their support for the government’s mock register of lobbyists.

If the Lib Dems are at all concerned about influence and access, they will support Labour’s amendments in the debate this afternoon. If not, their insistence that they are the party of probity and the natural allies of those in the charity sector that defend the public interest, will ring hollow. 

Entrance to the Serious Fraud Office, 10-16 Elm Street, London
Entrance to the Serious Fraud Office, 10-16 Elm Street, London

Iceland has sent four former directors of its bank Kaupthing to prison for fraud. But the chances of similar legal action happening in the UK are low, where fraud investigators have a poor record.

The Serious Fraud Office (SFO) is the main agency for investigating and prosecuting major fraud. It was formed in 1988 after a spate of high-profile cases. A government-sponsored inquiry into share price rigging at Guinness in the 1980s concluded that too many executives at major corporations had a 'cynical disregard of laws and regulations … cavalier misuse of company monies … contempt for truth and common honesty. All these in a part of the City which was thought respectable'.

But rather than changing corporate laws, amending personal liability of directors, or creating an effective enforcement agency, the government created the SFO.

Last week, the SFO's case against businessman Victor Dahdaleh collapsed because at the last minute it could not provide evidence of alleged graft. This is not the only case the SFO has botched. It spent between £25-40m investigating price-fixing by pharmaceutical companies supplying the UK’s National Health Service (NHS), but the case collapsed because of errors in the interpretation of law.

Previously, the SFO was very slow in taking action against BAE Systems over allegations of corrupt practice. The SFO mislaid 32,000 documents relating to the case. It is currently facing a lawsuit for damages from the Tchenguiz brothers after dropping a three-year investigation into the collapse of Icelandic bank Kaupthing.

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