Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill

Lord Hardie Excerpts

Tuesday 5th November 2013 Lords Chamber

[Lord Aberdare (CB)]

My Lords, I support Amendment 115, tabled by the noble Lord, Lord Norton. If the Government are not willing to go for a comprehensive register covering a wider range of lobbyists and those who are lobbied than currently envisaged, this seems a much simpler and more sensible approach that will be cheaper for the public purse and for the relatively small number of consultancy companies that would otherwise have to bear the not-insignificant costs of the registration system.

[Lord Hardie (CB)]

My Lords, I welcomed the amendment of the noble Lord, Lord Tyler. The amendment of the noble Lord, Lord Norton of Louth, goes further and I welcome that even more. In Amendment 81 I go even further. Noble Lords will see that it would introduce a register of lobbying activities. It gives statutory effect to the welcome initiative of the Government in requiring Ministers and Permanent Secretaries to publish on a quarterly basis details of meetings they hold with external organisations. This statutory register would ensure that this practice continues under future Governments. It would also include details of lobbying activity submitted by lobbyists. The public would obtain from this register a clear picture of lobbying activity within any quarter.

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[Lord Wallace of Saltaire]

My Lords, as regards my noble friend’s reference to the Canadian system, the Government consider that that system is onerous, expensive and more than we need. My task in Committee and on Report is to convince this House that the proposals in the Bill are proportionate and provide additional transparency. However, I will check and get back to my noble friend on how many of the current lobbying companies on the voluntary register publish their clients’ names, as that is clearly an excellent question that deserves an answer.

[Lord Hardie]

I would like to clarify the following point. First, does the Minister accept that there would be benefit in enshrining in statute in some way—whether by accepting the measure proposed by the noble Lord, Lord Tyler, that proposed by the noble Lord, Lord Norton of Louth, or my extreme proposal for a new clause—the practice that the Government have introduced of disclosing information to the public? The Government could claim credit for that initiative and could ensure that future Governments of any colour would be bound by the statute unless they sought to amend it. Secondly, can the noble Lord tell me what consideration the Government have given at any stage—either before the introduction of the Bill or after Second Reading—to creating a lobbying register?

[Lord Wallace of Saltaire]

I apologise to the noble and learned Lord; I should have answered his question about the noble Lord, Lord Lang. I am not aware that the Government have investigated that issue in detail but I will write to the noble and learned Lord as soon as I have the answer.

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[Lord Hardie]

I am sorry; the noble Lord has not answered my first question: namely, whether he sees any advantage in enshrining the good practice to which I referred in statute.

[Lord Wallace of Saltaire]

Let me take that away and speak to the noble and learned Lord further. I understand his concerns and I am very grateful for the detailed interest that he is taking in the Bill. We will make sure that we have adequate answers for him.

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[Lord Norton of Louth]

My Lords, I will be very interested to see whether anyone reports the words of the noble Lord, Lord Martin, about the Press Gallery.

I rise to support the amendment of the noble Lord, Lord Campbell-Savours, because he makes a very important point—I am surprised that it has not come up more in our discussions on the Bill—and that is this point about a kitemark for lobbying firms. Lobbying has always been a contentious activity. When I was writing about lobbying in the 1980s I made the point then that quite often the problem is not in the relationship between the lobbyist and the parliamentarian. Parliamentarians know perfectly well when they are being lobbied and essentially where it is coming from and can assess what is happening; if you like, they know the quality of the lobbying. The real problem, I argued, was between the client and the lobbyist, because clients would not necessarily know the quality of the firms they were employing to make representations. Lobbying firms are very good at making grand claims for their success rates.

Therefore, there is an issue of lobbying firms wanting to portray themselves in a certain way. My concern here is the one made by the noble Lord, Lord Campbell-Savours: you will get firms on the register using that to promote their interests to potential clients—putting on the notepaper something such as “Registered lobbyist, regulated by the Registrar of Lobbying Companies”, as a way of giving themselves the seal of approval. I fully endorse what the noble Lord, Lord Campbell-Savours, is trying to do in his amendment but I think that it raises that broader issue which he has touched on and which we need to be very much aware of. I am surprised that we have not considered that to a greater extent. It is just one of the problems if you go down this particular route of having a formal register, especially if there is no code attached to it.

[Lord Hardie]

My Lords, I agree with the noble Lord, Lord Norton of Louth, and support the amendment proposed by the noble Lord, Lord Campbell-Savours, for the same reasons. I also support the amendment proposed by my noble friend Lord Martin of Springburn but for a different reason from that given by the noble Lord, Lord Tyler. The example the noble Lord gave of meeting the employer in the company of someone who was both a lobbyist and a newspaper reporter highlights the need for a code of conduct. What is there to stop the lobbyist in that situation from sitting in on a meeting and then rushing away and phoning his newspaper to tell them he has a scoop—or whatever it is called nowadays—that the factory in Springburn has or has not been saved. More subtly, he could tell one of his fellow reporters. Therefore it is important that the distinction is maintained. Of course, if there was a code of conduct I would hope that that would be contrary to the code and the lobbyist could be deregistered, or whatever the appropriate word is.

[Lord Hodgson of Astley Abbotts]

My Lords, I support this issue. If you are regulated by the Financial Services Authority you have to mention it. There is a very substantial series of penalties and enforcement procedures if you fail to comply with the authority’s regulations. We need to be clear in our own mind whether this is going to be seen as the kitemark, whether it is going to be permitted as the kitemark and, if it is, how we make sure the kitemark standards are achieved.

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[Lord Campbell-Savours]

My Lords, in moving Amendment 88, I will also speak to Amendment 90. The Bill as it stands sets out a series of offences under Clause 12. The offences include “inaccurate or incomplete” registration and failing,

“to submit an information return under section 5”.

The Bill then goes on to propose penalties in the form of fines. What the Bill does not do at this stage is set out the arrangements for removal from the register, which is what my amendment is intended to deal with. Under the heading “Guidance”, Clause 21 states:

“The Registrar may give guidance about how the Registrar proposes to exercise the functions under this Part”.

Under Clause 21(2)(c), it is proposed that the guidance may indicate,

“the circumstances in which the Registrar would … remove a person’s entry from the register”.

My amendment flags up what I believe these circumstances should be.

The first circumstance is bringing Parliament into disrepute. I recognise that the professional associations have their own codes of conduct, but their codes are not written by Parliament—they are written by their legal advisers and approved, I presume, by their members. Parliament, in conditions of a statutory register, although not included in the Bill, needs to seek protection against being itself brought into disrepute through the actions of lobbyists who are not subject to a code. We will all be aware of the well documented and publicised scandals of recent years and that a small minority of lobbyists can abuse their relationships with Members of Parliament. The same applies with civil servants: if a lobbying operation is found to have compromised the integrity or independence of a civil servant, it is not just the civil servant who is necessarily at fault; a heavy burden of blame inevitably falls on the lobbyist. We need to be sure that the lobbyist concerned loses his or her official seal of approval, which is effectively what registration provides.

As to the wider issue of offences under Clause 12, there can be no circumstances in which a lobbyist who commits an offence under this clause should be allowed to remain on the register. We need more than guidance at this stage. We need to place firmly and clearly in the Bill our view as Parliament on what the circumstances for deregistration are. I beg to move.

[Lord Hardie]

My Lords, Amendments 89, 103, 109 and 110 stand in my name. Amendment 89 is concerned with Clause 6. Your Lordships will note that Clause 6 empowers the registrar to do a number of things, including, under Clause 6(6)(b), to decide whether a person’s entry should be removed from the register:

“If the Registrar has reasonable grounds for believing that a registered person is not (or is no longer) a consultant lobbyist”.

It is important to bear in mind that under Clause 1, a person cannot be in business as a consultant lobbyist unless he or she is registered. The decision of the registrar to remove someone from the register effectively stops that individual from operating in business. As far as I can see, there is no right of appeal against the decision of the registrar, which seems fundamentally unjust. Anyone who is aggrieved by a decision to remove him or her from the register ought to have a right of appeal to the tribunal, and that is what this amendment seeks to do.

[Lord Campbell-Savours]

I did not want to tie the Order Paper down with a very long amendment but if I had done more homework I would have introduced an element of appeal. I was simply floating the principle and I am sure that, were the Government to accept it, an appeal procedure would be introduced into the Bill.

[Lord Hardie]

I take the noble Lord’s point. I am not criticising his amendment; I am criticising the Bill. The Bill does not contain any right of appeal. My Amendment 89 introduces such a right for someone who is aggrieved by the registrar’s decision.

Not only does the Bill deprive someone of the right to a livelihood, perhaps, but Clause 12 creates an offence: it is a criminal offence to lobby if you are not on the register. Not only do you deprive someone of their livelihood but you subject them to the possibility of criminal proceedings and a fine. Clearly there ought to be a right of appeal. There is a tribunal in existence so there is no difficulty about that.

I have already referred to Amendment 103, which creates similar offences in relation to the register of lobbying activities, so I will say no more about that.

Amendment 109 relates to Clause 16, which concerns the ability of the registrar to impose civil penalties. The level of the penalty is fixed at £7,500. I have suggested that that should be reduced to £5,000. The civil penalty is an alternative to prosecution and, if you are prosecuted, the maximum summary fine in Scotland is £5,000 so I do not understand why the civil penalty is half as much again. There may be a reason for that; if there is, I would like the Minister to tell me; if there is not, there should be equivalence of penalties.

My final amendment is Amendment 110. It relates to Clause 18, which states:

“The Registrar may not impose a civil penalty on a person in respect of any conduct … at any time after criminal proceedings … have been instituted … and before they have been concluded, or … after the person has been convicted of an offence under this Part”.

My amendment introduces, after the word “convicted” in subsection (1)(b), the words “or acquitted”. Once we get to that stage, the individual has gone through a criminal trial and a court has decided that he or she is not guilty. Unless we include the words “or acquitted”, a court may have acquitted someone but the registrar could still impose a civil penalty of £5,000. Again, that is unjust. That is the reason for that amendment.

[Baroness Hayter of Kentish Town]

My Lords, in supporting Amendments 88 and 90, which stand in the name of my noble friend Lord Campbell-Savours, I will speak in particular to Amendments 107 and 108, which are in my name and that of my noble friend Lady Royall.

The four amendments comprise the framework that would enable the register to be more than just a limp piece of paper. Taken together, they provide that if someone on the register breaches the code of conduct or the Bribery Act, or is found unfit to be registered as a lobbyist—for example, if they have brought Parliament into disrepute—the registrar would have the power either to remove them from the register or to impose an appropriate civil penalty. That is perhaps rather closer to what was suggested earlier by the noble Lord, Lord Hodgson of Astley Abbots, which is what happens under what is now the Financial Conduct Authority’s list of recognised people. So this is an important combination of amendments.

Of course, we agree that someone should have the right of appeal to a tribunal, as with any such threat to the removal of one’s profession and employment. As the noble and learned Lord said, there is already a well established tribunal that deals with appeals from the pensions regulator and other similar bodies.

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[Lord Wallace of Saltaire]

My Lords, when considering the most appropriate sanctions in respect of non-compliance with the register, Ministers considered the option of removing a person from the register, thereby prohibiting them from continuing to operate as a lobbyist. However, we concluded that such a sanction would represent too extreme a penalty, as it would essentially take away their livelihood.

I am conscious that I speak on the edge of my expertise, but a number of professions have disciplinary procedures and appeals within those procedures, some of which are very complex. I was once approached to join the General Medical Council but once I understood what it did, I rapidly said no. The issues of due process and dismissal, judicial review et cetera are ones that we are reluctant to enter into in this respect. The sanctions regime that we have designed is therefore more limited and designed to provide on appropriate deterrent against, and punishment for, non-compliance with the register’s provisions.

As the Committee will know, breaches of the Bribery Act are punishable by unlimited fines, up to 10 years’ imprisonment, or both. I am not convinced that an additional sanction—that of being prohibited from carrying on a certain profession—should be added to those already significant penalties. Further, breaches of the Bribery Act must be proven beyond reasonable doubt in a criminal court, yet the Opposition’s amendment would enable the registrar to draw his or her own conclusion as to whether the Act had been breached, and to impose sanctions on the basis of that conclusion. I suggest that such a power or responsibility is not a suitable one for the registrar of a new register, but instead that breaches of the Bribery Act should continue to be determined in court.

Amendment 89, tabled by the noble and learned Lord, Lord Hardie, would enable a person to appeal against the registrar’s decision to remove them from the register as per Clause 6(6). We do not envisage that the registrar would remove any person from the register unless they were confident that that person no longer engaged, or wished to engage in future, in consultant lobbying. The removal power is not intended as a sanction but rather as an administrative housekeeping measure to enable the registrar to maintain the accessibility and relevance of the register.

[Lord Hardie]

Does the Minister accept that while I do not dispute that the registrar would be operating in good faith, he may genuinely make a mistake—and if he does, it has the effect of removing someone from the register. Is there to be no appeal to the tribunal for that? There may not be many appeals at all. It is only if the person is aggrieved that he has a right of appeal.

[Lord Wallace of Saltaire]

My Lords, that seems unlikely, on the face of it, but I am very glad to go away and consult officials to make sure that there is not a lacuna here. I appreciate where the noble and learned Lord is coming from, with a genuine concern on this issue. If one were to accept some of his other amendments, the case for writing into the Bill the appeal to the tribunal would be stronger. If a person were to object, under our scheme, to the registrar’s decision they could advise him or her accordingly and reregister without difficulty. We do not therefore consider that appeals to the tribunal should be necessary in those circumstances.

The Opposition’s proposed amendments, Amendments 101, 105 and 106, appear designed to ensure that the provision of misleading information is captured by the offence outlined in Clause 12 and, as a consequence, by the civil penalty power provided for in Clause 14. I am advised that “incomplete or inaccurate register” also covers the question of “misleading”. I can therefore confirm that the provision of misleading information in any of these instances would be captured by the concept of,

“information which is inaccurate or incomplete in a material particular”,

as provided in subsections (2)(b), (3)(b) and (4)(b) of Clause 12.

The offence outlined in Clause 12 is designed to be applicable in both the civil and criminal systems. We anticipate that the provision of inaccurate or incomplete information due to administrative oversight will be sanctioned by the imposition of a civil penalty. If, however, inaccurate or incomplete information had been provided in an attempt to deliberately mislead, we could expect such non-compliance to be prosecuted in a criminal court.

The Opposition’s Amendment 108 would enable the registrar to impose civil penalties for breaches of the code of conduct. The establishment of sanctions, whether civil or criminal, requires detailed and measured consideration. The Opposition have been able to identify only one of the provisions to be included in the statutory register. I suggest that the provisions with which lobbyists would be required to comply should surely be identified before it was determined whether they should be liable to a civil penalty in the event of a breach.

Amendment 103, tabled by the noble and learned Lord, Lord Hardie, would impose an offence on those who failed to submit lobbying activity reports as and when required. We recognise that this amendment is consequential to his other proposals so I will not address it further. His Amendment 109 would amend Clause 16(3) so that the maximum amount for a penalty notice would be reduced from £7,500 to £5,000. I note that his point of comparison is the Scottish civil penalty. In setting the maximum amount for a penalty notice at £7,500, the Government were mindful of comparable regulatory regimes, such as the fines imposed by the Companies Act in relation to the late filing of accounts, and we took that as our comparator. The Government are confident that the proposed limit of the civil penalty is thus an appropriate one and are not persuaded that it should be reduced, although of course the registrar is able to issue civil penalties of any amount up to £7,500, so not in every case would it be the amount.

The noble and learned Lord’s Amendment 110 would prevent the registrar from issuing a civil penalty to a person if that person had been acquitted of an offence under this part in relation to their conduct. We then get into interesting questions; as a non-lawyer, I am not entirely an expert on the difference between the evidence required to prove a criminal case and that which is required to produce a civil one. Perhaps we might consult on that off the Floor to resolve that very delicate distinction. Having answered some of those extremely interesting and detailed probing amendments, I hope that the noble Lord will feel able to withdraw his amendment.