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

Andy Sawford Excerpts

Monday 9th September 2013 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I concur with my hon. Friend the Member for Rhondda (Chris Bryant). Consensus seems to be emerging among Members across the Committee, with the exception of Government Ministers. We want legislation that reflects, as the hon. Member for Chatham and Aylesford (Tracey Crouch) said, the reality of the lobbying industry as it operates at the moment.

Amendment 2, which was tabled by Labour spokespeople, amendments 48 and 49, which were tabled by members of the Political and Constitutional Reform Committee, amendment 161, which was tabled by the hon. Member for Foyle (Mark Durkan), and new clause 5, which was tabled by the hon. Member for St Albans (Mrs Main), all seek to achieve some understanding in government that the Bill should reflect the real world. On Second Reading, one of the best speeches was by the hon. Member for St Albans, who talked about her personal experience of what lobbying does in a particular constituency and the impact that it can have on one’s constituents. We want legislation that protects the individual Member of Parliament as well as his or her constituents.

I raised the example in my own constituency of the proposal for a third runway at Heathrow and what has happened over the past three decades, but more intensively over the past decade. The homes of some 10,000 people are at risk; 50,000 people, and perhaps more, are at risk of the atmosphere being poisoned in such a way that air pollution far exceeds European limits; 2 million people will experience increased noise across London. There was lobbying from the aviation industry, particularly BAA, formerly the British Airports Authority. A lobbying firm was employed, but its activities were largely a smokescreen for the real lobbying by BAA employees. As I said on Second Reading, many of them had passes to enter the Department for Transport and meet officials. The Bill does not catch that aspect of lobbying, as we have heard in every interpretation by Members on both sides of the Committee.

Amendment 48, however, is rather inadequate, as its definition of lobbying relates to the lobbying of Ministers and permanent secretaries, and does not relate in any way to the real world of lobbying. In the BAA lobby on the third runway there was, as I said, wining and dining of Ministers and senior civil servants, but that was a smokescreen for the intensive lobbying of fairly junior civil servants who undertook the assessments of traffic growth, air pollution impacts, noise impacts and the logistical arrangements around the airport. By the time that the reports that they prepared landed on the desks of the permanent secretary and of Ministers the decision had virtually been made.

[Andy Sawford (Corby) (Lab/Co-op)]

My hon. Friend illustrates the complexity of the situation. The staff of BAA would have been accompanied by planning consultants, highways consultants and lawyers, who also would have been on the payroll to lobby for the third runway and therefore should be included in our consideration if we want a proper Bill.

[John McDonnell]

That is an extremely valid point. In the real world of lobbying, I have experience of that constituency issue, with BAA employees employed virtually full-time—yes, with a range of experts—intensively lobbying relatively junior staff in the Department for Transport and the Treasury, building up a head of steam around a particular demand from BAA that eventually shapes the decision made by Ministers. My understanding of the debate so far is that such lobbying would not be covered by the Bill and BAA in its new form, as Heathrow airport, would not be caught by it.

Things have moved on. Governments are increasingly outsourcing the preparation of the material that will eventually enable Ministers to take decisions. That outsourcing relies upon the commissioning of external experts—not within Government, but often academics and others—and in addition to that, the setting up of various commissions. The Howard Davies commission is consulting various organisations on behalf of Government about the expansion of aviation in London and the south-east, especially the issues surrounding the expansion of Heathrow. My understanding of the Bill is that the lobbying of the external advisers and members of such commissions is also not caught by the legislation.

Members may have experienced that process, but let me explain. An intensive lobbying exercise is being undertaken by the aviation industry across the country. Businesses that own individual airports are intensively lobbying Howard Davies’s commission, and they are lobbying external experts commissioned to undertake pieces of work, because obviously they are looking to expand their particular airport. I do not believe, and I am happy if the Minister wants to advise me differently, that any of that lobbying will be caught by the Bill.

The plea from the hon. and learned Member for Torridge and West Devon (Mr Cox) and the hon. Members for Chatham and Aylesford, for St Albans and for Foyle—right across the piece—was that, if we are going to legislate, we must legislate in the real world, and we are not doing so. We are going through an exercise that people will think is a waste of time, and many will find it disingenuous. Some may think that, when we have ticked the box, we have sorted out lobbying, but the real-world lobbying will go on as before.

As the Prime Minister rightly said, lobbying is open to the potential for scandal. There have been scandals. What causes me anxiety is that I am prevented from protecting my constituents from a heavily resourced and effective internal lobbying machine within an organisation that could destroy parts of my community and the quality of life of hundreds of thousands of people in west London. The Bill does not meet the purpose. It does not rise to the challenge that the Prime Minister set us, which is to ensure that we have a transparent lobbying process. That transparency can, we hope, enable us to have some element of probity within the system of lobbying overall.

I take what my hon. Friend the Member for Rhondda said. The criticism has come from all parts of the Committee. There must be some recognition from Government that these legislative proposals do not stack up. I know that by way of a taunt to the Leader of the House what happened in the case of the NHS legislation was mentioned earlier, but I think the idea of a short pause while we try to get some consensus discussions going is the most constructive way forward. In that way we can learn the lessons from the lobbying industry itself. Members of this House across the parties have had years of experience of lobbying, so we can get some decent legislation in place, otherwise we will bring ourselves into potential disrepute. Members of the public who expect us to represent and protect them will think we are not doing our jobs effectively.

I urge the Government to listen to their own Back Benchers as much as to those on the Opposition Benches who have no axe to grind. Let us see whether we can have some cross-party discussions over the next week or two. We should not allow the Bill to leave this House and expect the House of Lords to sort it out, as usual. That is a derogation of our duty. We must do the work here and send the best Bill we possibly can to the other place, because that is what we are paid for.

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[Thomas Docherty]

I am most grateful to my hon. Friend, who spoke eloquently from the Front Bench during proceedings on my private Member’s Bill last year, setting out why the Opposition want to see workable legislation. I am more than happy to set out what is wrong with the impact assessment. It uses the Government’s figures and is confused. It says that the register, which covers only consultant lobbyists, will cost £500,000 to set up and a further £200,000 to run each year. That is according to the Government’s own figures, so it must be right. Almost all the firms who are members of the APPC are SMEs. I would be amazed if there were one that employed more than 250 people in total. Most are firms with between 20 and 50 employees, so these are not large firms. They are the entrepreneurial firms that we hear so much about from Government Members. But the Government and their civil servants have made up some rash figures. They have said that there are about 1,100 lobbying consultants in this country. I am still not clear where that figure has come from. I think they have taken the APPC list and accepted that that is probably pretty much every one who is “a lobbyist”. They have then said that, if the cost is £500,000, that can be shared by 1,000, which I assume is the 1,000 lobbyists. However, the Bill contradicts that. It says that payment is per firm—the Deputy Leader of the House graciously nods in agreement—and probably only 10 to 20 firms will be caught by the current definition. I am not a great mathematician, but if one takes £500,000 and divides it by 20, that is not £500. It is significantly more. That is just the start-up cost in the first year. That is a disproportionate and huge impact on small businesses.

[Andy Sawford]

I am trying to make some sense of a pretty nonsensical set of proposals. On my hon. Friend’s point about how the costs would stack up, there are some public affairs companies that are global, such as Edelman and Weber Shandwick. Does he have a view on whether there should be some variation in how the costs are apportioned to the small—perhaps one-person band—lobby company relative to some of these very large companies?

[Thomas Docherty]

I will just touch on the issue of some of the very large firms. One of the huge flaws is the issue of non-lobbying business—that a firm that is not a lobbying company would not be captured. One example is DLA Piper, a well-regarded law firm and lobbying communication consultancy; it is exactly the type of company that could probably afford to pay something. We are talking about £25,000 per company as the cost of the register, which is not the £500 that the Government’s impact assessment claims. DLA Piper is exempt. The irony about the Front-Bench team that we have today is that the reason why the Deputy Prime Minister’s fingerprints are not on the Bill is that his wife previously worked for DLA Piper. The Deputy Prime Minister, correctly in my view, recused himself from the whole process. Under the Bill as it has been drawn up, however, DLA Piper is not covered. I hope that the Minister for the Cabinet Office is reflecting on that irony.

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[Thomas Docherty]

With your indulgence, Sir Roger, let me try to answer what I think is a genuine intervention from the Deputy Leader of the House. I was involved in the APPC back in 2008-09, when the previous Government effectively told the industry that it was drinking in the last chance saloon. In the previous Parliament, we had the Public Administration Committee report that, as I recall, recommended a statutory register if the industry did not improve public confidence and Parliament’s confidence in it. I made the point that those firms that are working in the correct manner and striving to improve their reputation would join a voluntary body, which they duly did, and the UK Public Affairs Council was set up to try to bring those things together. Regrettably, it was clear that the small number of dubious lobbying firms—dubious individuals, to be more accurate—would choose not to. Many of those who sign up to the voluntary register do so because they want to demonstrate that they are playing to the highest ethical standards and that there is bureaucracy and paperwork involved. It is not a case of chaps sitting around and signing off each other’s practices.

Firms also made the point that, when asked by potential clients whether they are a member of a register, they would simply say, “Well, we don’t do that activity.” In my three years as a consultant lobbyist—I understand that the Government do not accept my definition of a lobbyist—I do not recall once having a meeting with a permanent secretary or Minister, so my firm would have had no need to register. That is why I think that there is a real danger that those firms would say, “We don’t undertake that activity, so the Government and Parliament do not think we need to register,” and therefore the provisions will fall away.

[Andy Sawford]

I am trying to understand the intention of the Bill as well as its effect. My understanding of the companies that currently participate in the voluntary register is that effectively they are the good guys, although I am sure that we could find examples of where they have not always met the highest standards. What we should really be trying to do, with regard to bringing transparency, is identifying people currently operating outside any ability for us to see what their line of work is or their willingness to be transparent and bring them into some sphere of registration.

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[Thomas Docherty]

I am most grateful to be admonished for staying in order.

The hon. Lady makes a serious point. We have only four and a half or five hours to consider a huge piece of legislation. Frankly, this should have been scrutinised much better. I fail to see what constitutional imperative has brought it to the Floor of the House. I hope that the other place will do a genuine job of forcing the Government to come back and make some proper amendments, because I think that there are some real issues.

These are not issues that just I have concerns about. We have had the most bizarre and unlikely coalition. The Alliance for Lobbying Transparency has said of the Bill:

“It only applies to consultant lobbyists whose business is mainly lobbying. It would exclude those for whom lobbying is only a small part of the business. This could apply to a large number of significant lobbyists-for-hire”.

At the other end of the debate, the Public Relations Consultants Association polled its own members and found that only 1% of activity was covered from under 20% of the organisation’s concern. Even the hon. Member for Christchurch (Mr Chope), who I see in his place paying close attention, has said:

“The Bill tries to exclude people whose main business is not lobbying, but it does not define what constitutes a mainly non-lobbying business.”

The hon. Member for Clacton (Mr Carswell) has also criticised the loophole, saying:

“I suspect all that this new rule will do is ensure that in some instances big corporate interests will bring their lobbying activity back ‘in house’. Instead of hiring a public affairs consultancy, the big defence, banking and energy interests will give the work to their public affairs department. And because their main business is defence, or banking, or energy, they can safely ignore those provisions of the Bill.”

It is a dreadful state of affairs when two Government Back Benchers—I use the word “Government” slightly loosely, perhaps—are criticising the Bill. I hope the Minister will take on board the genuine concerns that have been expressed.

We have been told that the intention is not to exclude people. To pick up the point made by my hon. Friend the Member for Corby (Andy Sawford), let me give one example of a significant public affairs consultancy—MHP Communications. I should declare that I have met MHP Communications representatives, who have seen me about developments in my constituency. They conducted themselves appropriately at all times.

[Andy Sawford]

My hon. Friend illustrates the complexity of the industry well. MHP Communications derived originally from AS Biss, which was a public affairs-focused agency. It merged with a media company to become Mandate—I am not sure what the balance of that new company would have been—and has now become MHP. It has taken lots of different forms.

We refer to the different registers; the PRCA code, the Chartered Institute of Public Relations government affairs group’s code and the Association of Professional Political Consultants code relate to different kinds of companies. That is why catching APPC members, of whom we are all very aware and whose business is on the web for us to see, does not get us far at all in terms of transparency.

[Thomas Docherty]

My hon. Friend is absolutely right. That is the heart of the problem. Let me quote what MHP itself has said:

“do we work for a ‘non-lobbying business’? In our case, MHP Communications is a full service communications consultancy. We operate a single bottom line approach, and so do not break out the work of our public affairs division. Employees are employees; there is no ‘MHP Public Affairs Ltd’. And the work of MHP is certainly not mainly concerned with lobbying. Even if we were to limit ourselves to our public affairs team, the definition talks about actively lobbying, in the sense of seeking to persuade…members of the Government as well as officials—and this is not ‘mainly’ what we do all day.”

That is the problem with the clause and the Government’s attempt to fix it. It all gets circular—even if we accept that MHP is a lobbying entity, lobbying is defined purely as communicating with a Minister of the Crown and a permanent secretary.

Let us take special advisers, who are not covered at all; we all know that they often have more influence than the Under-Secretary of State. Under the Government’s plan, the lobbyist will be perfectly entitled to have lengthy and detailed influential discussions with a special adviser, and that would not be covered by the Bill. However, the lobbyist could meet the Under-Secretary of State and that meeting would be. Which meeting would be the real problem? One needs look only at the debacle of News International and Fred Michel to see the kind of scandal that can happen.

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[Mr Thomas]

I rise to speak to the amendments tabled in the names of my right hon. and hon. Friends. Given the lack of time for debate that Ministers are allowing for this part of the Bill, let me rattle through the case for the amendments.

Amendment 3—the lead amendment in the group—is a probing amendment to explore why Ministers do not want the employer of a lobbyist to be revealed. We were led to believe that the motivation behind the Bill was to make the lobbying industry more transparent. Making it harder to understand who the employer of a person engaged in consultant lobbying is will hardly achieve that objective.

Let us take the example of the lobbying firm that has provided so much of the backdrop to debates on the Bill. If Crosby Textor suddenly decided that, after all, it is a firm of consultant lobbyists, the individuals working as consultant lobbyists for Crosby Textor would not, under the Bill, need to record by whom they are employed. Given the widespread concerns about what and who Crosby Textor lobbies for, it seems reasonable that the individual consultant lobbyists who work for Crosby Textor should reveal who employs them. The Opposition want transparency, and the Minister says she wants the same thing. We therefore want to hear more on why Ministers do not believe that revealing employers is required.

In speaking to amendment 4, I shall also refer to new clause 1 and amendment 42. Unless the Minister makes a dramatic speech, the Opposition will press amendment 4 to a Division. New clause 1, and amendments 4 and 42, require the establishment of a code of conduct. Such a code of conduct would be introduced after full consultation with all relevant stakeholders. It would have as its top line the need to avoid any inappropriate financial relations between registered persons and parliamentarians. It would also, of course, be available for parliamentary scrutiny.

The absence of a code of conduct from the Bill means there is currently no mechanism for removing or taking other sanctions against consultants who act in an unethical manner. Indeed, as the excellent Political and Constitutional Reform Committee has pointed out, if there is no code of conduct at the end of the Bill’s passage through both Houses, we will have the bizarre situation whereby the registrar can punish lateness in providing or submitting information, but cannot punish unethical behaviour. Arguably, the absence of a code of conduct means that some on the register will describe themselves as registered or approved without having to meet any minimum standards.

[Andy Sawford]

Given the role of the Association of Professional Political Consultants on standards within the industry, the bizarre consequence of the Bill could be that organisations that are self-regulated will be less regulated than they are currently.

[Mr Thomas]

I fear that my hon. Friend’s intervention strikes a chord. I will come on to some of the points made by the Association of Professional Political Consultants shortly. Gavin Devine, the chief executive of one of the big lobbying firms, says that

“there is a risk that the register will give a kitemark or endorsement to some who do not deserve it.”

I read the APPC code of conduct, to which my hon. Friend has just referred, with interest. One key element is that

“practitioners”—

lobbyists who have signed up to the code—

“must use reasonable endeavours to satisfy themselves of the truth and accuracy of all statements…by or on behalf of clients to institutions of government.”

I struggle to understand why Ministers would not want to ensure that all consultant lobbyists ensure their clients tell the truth to them. A code of conduct with such a provision, properly policed, would help to raise the bar—raise the standards—of the whole industry, rather than just those who subscribe to the APPC code.

Consultant lobbyists who sign up the APPC code are expected to be open in disclosing the identity of their clients and must not misrepresent their interests. Having a code of conduct with such a provision would help to ensure that Ministers and MPs would know who was trying to meet us and allow us to explore whether there were other motives for consultant lobbyists asking for information or advocating particular causes. It seems hardly unreasonable for such a basic standard of behaviour to be expected of all lobbyists covered by the legislation.

The APPC code requires practitioners to have a duty to advise their clients if they think they are about to commit illegal or unethical acts. They have a duty to refuse to act for such a client if the client persists. It is surely not unreasonable, and not too burdensome on the consultant lobbyist, to expect lobbyists to be able to abide by such a requirement in a code of conduct. Ministers need to explain why such reasonable requirements are so burdensome that they cannot be included in a code of conduct, or why they do not think we need to uphold, or ask consultant lobbyists to uphold, such basic standards of behaviour.

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[Andy Sawford]

The discussion seems to be going against the grain of recent experience and, when it comes to regulation in the UK, what I think would enjoy cross-party support. In the case of organisations such as the Royal Pharmaceutical Society and many other health organisations, the regulatory role has been split from the membership role. The regulatory role has emphasised a code of conduct and enforcement of standards, whereas the representative membership role has been about advocating for the profession. The two roles are quite different. The voluntary side is about working together, mutual support, peer support and advocating for the role that a profession plays in public policy making; the regulatory role is about ensuring that we can have confidence in the standards of that industry.

[Mr Thomas]

My hon. Friend makes an important point. One way to have transparency and clarity and to minimise the burden of regulation for the industry would be to ensure that there is one clear code of conduct and therefore one clear set of principles that everybody has to sign up to in order to do business.

Another provision in the APPC code—one that seems eminently sensible, at least on the face of it—says that

“practitioners”—

that is, lobbyists—

“must not make misleading, exaggerated or extravagant claims to clients about”

what they can do for them. That is hardly an unreasonable or burdensome principle to have in a code of conduct either, so I ask again: why do Ministers not want such a basic principle covered in a clear code of conduct? The APPC code contains other suggestions that we might take forward, including the proposal that

“Political practitioners must not…Make any award or payment in money or in kind (including equity in a member firm)…to any member of…the National Assembly of Wales or the Northern Ireland Assembly or the Greater London Authority”.

As I understand the drafting of the Bill, Ministers have not gone so far as to cover those bodies. Perhaps the Minister can use her response to this debate as an opportunity to explain why a code of conduct should not cover those organisations as well.

Including such requirements or versions of them—I do not want to be prescriptive; there should be proper consultation with all stakeholders about what should be in a code of conduct—would help to raise the standards of the whole profession and, as a result, give the registrar the means to begin to challenge any poor behaviour in the industry that he or she might come across.

New clause 2 would help to ensure proper oversight and better public scrutiny of any potential conflicts of interest when senior roles are taken up in Government by people who were—or, indeed, perhaps still are—lobbyists. It would require the Government to disclose the names of any professional lobbyists who work for them, including those employed directly by the Government and those employed by the political parties that form the Government. The new clause would help to prevent a situation in which the country did not know definitively whether a lobbyist working at the heart of government for a political party, with access to the inner sanctums of No. 10 and No. 11, was at the same time lobbying on behalf of commercial interests such as big tobacco or the alcohol industry.

It is surely worth drawing the Committee’s attention to the scandal surrounding Lynton Crosby. The reason that that will not go away as an issue for the Conservatives is that the country does not know whether he is lobbying Ministers on behalf of any big commercial business groups here in the UK. New clause 2—coupled with other amendments to widen the definition of lobbying and to require an estimate of expenditure on lobbying activity—would help to tease out whether Mr Crosby was able to use his position working for the Conservative party to raise the concerns of other clients that he or his business might have.

The issues relating to Lynton Crosby raise the question of whether other lobbyists are employed, perhaps part time, to work for the Government while separately working for their clients to lobby Ministers, permanent secretaries, other senior civil servants or special advisers. New clause 2 is a sensible proposal that would help to make transparent the role of lobbyists who pass from an area of commercial life to become more actively engaged in public life as well.

Big tobacco appears to have successfully exerted considerable influence on Ministers recently. Similarly, minimum alcohol pricing seems to have been dropped as a major Government priority. The presence in the Conservative party of a lobbyist who has access to No. 10, who is notorious in other countries for his other interests and who will not, at first glance, be covered by the legislation does not help to ease people’s fears that Ministers are not being quite so straightforward in their professed commitment to transparency as they might be.

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[Mr Thomas]

If Lynton Crosby is only doing a bit of analytical work on polling data, I would gently suggest that the Conservative party is paying rather a lot of money for that service. If the hon. Lady votes with us to ensure that new clause 2 becomes part of the Bill, I put it to her that when we form the next Government, as we surely will do, we will of course be covered by its provisions.

[Andy Sawford]

Let me clarify my interpretation of the debate on the amendments to which my hon. Friend is speaking. The general tone of the discussion from the Opposition Benches has been about the need to enhance transparency. There is no suggestion in the initiative that the organisations that might be encompassed by a proper regulatory code are engaged in something that is in any way wrong. I think that Opposition Members are therefore quite right to seek to broaden the provisions. I wonder whether Government Members do not protest too much and whether, in a sense, they have something to hide. There may be nothing wrong in the actions of Linton Crosby, but as far as the public are concerned—and I hope this is parliamentary, Sir Roger—it stinks. Nobody should have anything to fear from transparency if they are doing nothing wrong.

[Mr Thomas]

My hon. Friend makes the perfectly reasonable point that new clause 2 is an attempt to prevent the sort of concerns that have arisen, going wider than our Benches and our parties, about the role of Mr Crosby. New clause 2 seems to me to be a perfectly sensible provision to prevent any similar situation from happening in future.

New clause 7 is designed to make provision for professional lobbyists taking up employment in government. It deals with similar territory, albeit on a slightly different issue, to new clause 2. It would similarly deal with the potential conflicts of interest that can arise when a lobbyist seeks to take up a senior position in government. It is quite possible that someone with considerable skill and expertise who is working as a lobbyist at the moment might secure an offer to work as a senior civil servant. Such a person who has worked in a senior position in government before and has been seeking to widen their career profile might now successfully seek to return to a senior position in government. Having a system in place, which is what new clause 7 allows for, to check that there are no conflicts of interest around such employment is surely sensible and would help to build trust in the new appointment. Together with new clause 2, that new clause would allow the relevant Committee to probe whether there were any reasons to be concerned about any ongoing commercial lobbying interests that such a person might have. I say gently to Government Members that the new clause could have helped to prevent the ongoing concern about Mr Crosby’s role and his access within No. 10, so I commend it to the hon. Member for Truro and Falmouth (Sarah Newton), who intervened on me earlier.

The most appropriate Committee would perhaps be the excellent Political and Constitutional Reform Committee. It has a mix of cross-party talent among its membership and it could explore with the relevant individual whether there were any potential conflicts of interest and, if not, how the situation should be handled, leaving the individual free to go about their public role, with the worry and concern that something improper is somehow going on and is attached to them no longer being an issue.