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

Lord Norton of Louth Excerpts

Tuesday 5th November 2013 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

My Lords, in moving Amendment 65 I shall also speak to Amendments 67, 70, 71, 75, 76, 77 and 113, which are in the names of my noble friends Lady Royall and Lady Hayter. This is an extensive group of amendments but the main focus is to expand greatly the amount of information that the register holds. For example, one of the key amendments in the middle of this group concentrates on the detail of spending by lobbyists. This is important as, without these details, it is possible only to build up a very limited picture of the lobbying activity taking place because, as Unlock Democracy says in its briefing to noble Lords:

“A good faith estimate of what it being spent on lobbying would also show scale, disparities and trends in lobbying”.

Compare the current, limited proposals in the Bill with the level of transparency in place in the United States, where it is relatively easy to find out how much is being spent, and by which companies and sectors, using publicly available information. For example, the Senate record of spending shows that Boeing spent $15,440,000 on lobbying in the US in 2012. General Electric spent $21,200,000. These are very significant sums and they are spent by in-house lobbyists. As we know, this can have a marked effect on policy and the discussions around it. For example, an IMF working paper from 2009 draws a direct link between the amounts of money spent in lobbying by financial services firms and high-risk lending practices before the financial crisis. Ameriquest Mortgage and Countrywide Financial, both of which were at the heart of the crash, spent $20.5 million and $8.7 million respectively in political donations, campaign contributions and lobbying activities from 2002 to 2006. The IMF paper concludes that,

“the prevention of future crises might require weakening political influence of the financial industry or closer monitoring of lobbying activities to understand better the incentives”.

This is still pertinent here. As recently as 2 July, the head of the Prudential Regulation Authority was reported in the FT as saying that he was going to draw up rules to prevent the banks lobbying parliamentary officials against new requirements for leverage. Under the proposals in the Bill, we will not get any of the same transparency when it comes, for example, to lobbying by the big six energy companies. It has been reported that Ministers from the Department of Energy and Climate Change have met representatives from the energy giants on 128 occasions since 2010, yet have held talks with the main groups representing energy consumers only 26 times during the same period. We need much more information about what is going on here.

Amendment 65 would exclude the option of an individual residence being listed as the address of a lobbyist. Our concern is that this seems to represent a potential loophole, which we urge the Government to reconsider. The effect of the Bill, if passed in its current form, is that the level of transparency for the register is limited to the individual name and address of a main place of business or, if there is no such place, the individual’s residence. This is surely a loophole that would bar us from knowing who the individual works for. That concern fits into the wider point raised by our Amendment 67: that an increase in transparency should allow us to see who is lobbying on behalf of a company and which members of staff are engaged in that lobbying.

There are also a number of amendments in this group in the name of the noble and learned Lord, Lord Hardie. We should be very grateful for the way in which he has gone through the Bill with such forensic attention to detail. His amendments have similar intentions to ours and we support them. I beg to move.

[Lord Norton of Louth (Con)]

My Lords, my Amendment 115 is in this group. From my point of view, it is the core amendment in terms of shifting the emphasis of the Bill. As I have drafted it, the clause is designed to be integrated in the Bill, but essentially it seeks to advance an alternative to what the Government propose. If the Government insist on the current provisions of the Bill then, as today has increasingly shown, it will achieve little by way of making lobbying of Government transparent; if anything, we are establishing that it may serve to obscure rather than enlighten.

As we have heard, the focus of Part 1 as it stands is on those who lobby. As I argued at Second Reading, a more comprehensive approach, achieving transparency without the need for a clunky bureaucratic framework, is to focus on those who are lobbied. That would shift the emphasis far more to the actual activity. My amendment is designed to give effect to what I argued at Second Reading.

If one placed a statutory requirement on Ministers when making statements of the sort enumerated in Clause 3 to publish at the same time details of those who lobbied them on the matter, that would ensure that the public were aware of all those who had lobbied the department. I stress the department because the amendment encompasses civil servants, special advisers and PPSs. Any representations made to anyone in the department would be shown. It would not matter who the lobbyists were: full-time independent lobbyists, in-house lobbyists, part-time lobbyists or individuals making representations on that particular issue—all would be caught. We would thus have true, comprehensive transparency. That is the key point, and it is important that we establish the principle.

I know what the Government’s response will be because the Minister kindly replied to my amendment earlier, before I had spoken to it. It is clear what the Government’s position is: “We believe in transparency as long as it’s not too much trouble”. That is essentially what was advanced. Yet we have already heard today a fair amount of material that suggests that it is doable. My noble friend Lord Tyler has made a powerful case for a database and has explained how it could be done—it is manageable. My amendment would take us somewhat further than that in terms of the amount of information that would be produced, and perhaps the time when it was produced because it would be drawn together at a particular point, but, as my noble friend has demonstrated, putting that material together is not that difficult.

At Second Reading I made the case, and I will revert to it, about what Select Committees do. The Minister was saying, “When a Minister brings forward a Bill, good heavens, he might receive lots of representations. If he had to produce and publish those, my goodness, the workload would be horrendous. How could it be achievable?”. Well, what would happen if a Select Committee received lots of representation, perhaps in three figures, when it was conducting an inquiry, and then when it was doing its report actually had to list those who had made representations and then publish the evidence? Oh, my goodness—it already does. Select Committees manage that sort of exercise on very lean resources, so the Government should be able to undertake a similar exercise with the resources at their disposal. As my noble friend Lord Tyler has indicated, it is no longer a case of putting together lots of papers from different sources; much can be done electronically, such as recording meetings for the database and publishing Ministers’ diaries the day after the event, so we are already getting there. That is not the obstacle that the Minister was suggesting, so it is not really credible now to argue that it is not doable; it is.

The problem is not the practicality but the political will. If the political will were there to achieve it then it could be done, and it would achieve the Government’s stated aim in a way that Part 1 simply does not do. As it is drafted, it would not achieve a great deal at all; it would create a burden of bureaucracy that would not add much by way of transparency. If we believe in the transparency of lobbying—in other words, if we actually want to give effect to the first words of the Short Title—then this is the route to go. I look forward to the Minister’s second response.

[Lord Campbell-Savours]

My Lords, I support wholeheartedly the amendment spoken to by the noble Lord, Lord Norton of Louth, although I have slight reservations as it is debatable whether PPSs should be included.

I shall speak to Amendments 68 and 69, which stand in my name in this group. Amendment 68 is to press Ministers on whether they feel the Bill adequately covers the possibility that lobbyists may, for whatever reason, seek to hide the name of the recipient of the payment. There is a reference in Schedule 1, Part 2 to the beneficiaries of payments, but I do not think it is absolutely clear what the intention is there. A person lobbying may be acting on behalf of another whose identity as a lobbyist is not to be revealed, but where the person whose name or company name is not to be revealed is the recipient of the financial consideration. There may be circumstances where a lobbyist has been subcontracted by another lobbyist to carry out work where the subcontractor has an expertise which the main contractor lacks, but where the main contractor does not wish to lose their client account due to a lack of expertise. There may be circumstances where a lobbyist subcontracts the work for a particular client to avoid revealing to another client that the main contractor lobbyist has other clients in the same commercial sector. There may be circumstances where a lobbyist hires a subcontractor for Client A to avoid revealing to his or her client that he is also representing Client B, whose interests are diametrically opposed. These are but a few scenarios that could include the avoidance of registrar penalties, potential disqualification as a registered person or even matters relating to liability to the Inland Revenue.

Amendment 69 brings us to the heart of the legislation. It dominated debate in the Commons. It would require the name of the person lobbied and the subject of the lobbying, which we have been dealing with extensively this evening. It follows broadly the case made by Graham Allen MP, chair of Political and Constitutional Reform Committee, in his Amendment 100 during Report stage in the Commons. His committee had recommended:

“The information that the registrar requires to be listed should be expanded to include the subject matter and purpose of the lobbying, when this is not already clear from a company’s name. To be clear, this should not involve the disclosure of detailed information about the content of the meeting—just a broad outline of the subject matter and the intended outcome”.

The Government’s response to that recommendation is just not credible. It talks of the availability of information, which I raised on an earlier amendment on ministerial diaries. We know that that system does not work because it is a congested system. The truth is that we have a huge gap in transparency and, sadly, the Government are doing very little to bridge it. The register is useless if all it does is list a few names that are already on the lists of the professional bodies. We need real hard information on who is lobbying, when they lobby, on what issue and on whose account.

--- Later in debate ---

[Lord Wallace of Saltaire]

I think that that is unlikely, but this is obviously something on which we should perhaps consult informally with the industry, to see whether there are any serious concerns. I am not aware that there are and, as I have said, the current voluntary register is in the same league but slightly more expensive.

Amendment 113, from the Opposition, would amend the reference to the setting of the subscription charge from one that requires the Minister to seek to recover the full costs to one that would require the Minister to ensure that the charge is set so as to recover the full costs of the registrar’s activities. I recognise that it is intended to emphasise the importance of ensuring that the charge recoups completely the cost of the register, but assure the Opposition that the Government are very well aware of the importance of ensuring that the register is fully funded by the industry.

We expect that the register will cost around £200,000 a year to run and that that cost will be borne not by the taxpayer but by the lobbying industry. The register that the Opposition have suggested would cost a great deal more—possibly nearer the £3 million that it costs to operate the Canadian register. Perhaps they would like to consider how they would ensure that those costs were recovered from the much larger number of individuals and organisations that they intend to capture.

The Opposition’s Amendment 114A would remove subsection (2) from Clause 24, thereby affecting the regulation-making powers under that part. The Joint Committee on Delegated Powers and Regulatory Reform has recently published a very thorough and thoughtful report on the delegated powers included in the Bill. The Government are giving the committee’s recommendations careful consideration and will respond formally shortly.

I apologise to the noble Lord, Lord Norton, that I responded to his Amendment 115 before he had spoken to it. Rather too many meetings over the past day left me less well organised than ideally I should have been. I took him down as saying that the Government believe in transparency but not too far. I would say that the Government believe in transparency, but want to be proportionate in our approach. I fear that some of the amendments that have been floated today have suggested that we move from a situation of extremely moderate transparency to one in which there will be a very burdensome set of regulations, which would go further than we need to at this time.

[Lord Norton of Louth]

My noble friend is now talking about moderate transparency rather than transparency, so he is already limiting it. He is very keen on “proportionate”, I have noticed; it has come up a number of times today. I am just wondering how proportionate it is to introduce a register of perhaps 350 companies when we have not established how many of them already publish their client list. If most of those who are going to be registered already publish their client list, it is proportionate at the wrong end, because there is no point, really, in doing it. It is not good enough just to establish how many would be covered by the register; we need to know whether it would actually add anything to our knowledge of what those companies are doing and who their clients are. There may not be any point in doing it.

My point is that, if you are going to do it, do it properly; if you want transparency for lobbying and you are going to be comprehensive, there will be a cost to it. If you are going to do it properly and have a register, I am afraid that you have to go down the Canadian route. My argument is that you can avoid doing that by going down my route, whereby you get transparency of lobbying, not simply listing lobbyists.

--- Later in debate ---

[Lord Tyler (LD)]

My Lords, I want to reinforce the contributions that have been made on these two amendments, particularly the point made by the noble Lord, Lord Martin of Springburn, about the relationship between a constituency Member of Parliament and any representatives of any interests in that constituency. As I understand it—as I recall, this was reinforced in the other place on Report—there is nothing in the Bill that in any way impedes the opportunity and the responsibility of representing the people of one’s constituency in any way that may be appropriate. It is very important that we reiterate that principle now. I am very pleased to hear the noble Lord, Lord Martin, make that point again.

[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.