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

Lord Wallace of Saltaire Excerpts

Tuesday 5th November 2013 Lords Chamber

[Lord Campbell-Savours (Lab)]

My Lords, in a sentence, I oppose the amendment. The registrar is not an officer of Parliament. If the registrar had been an officer of Parliament, I would be in favour of the amendment.

[Lord Wallace of Saltaire (LD)]

My Lords, I recognise that this amendment, like some of those we were discussing in the previous group, is concerned with reinforcing the independence of the registrar in appointment, accountability to parliamentary committees and obstacles to what might be challengeable dismissal. Let me reassure noble Lords that the Government are committed to ensuring the independence of the registrar. The registrar’s ability to operate independently is clearly essential for the successful operation of the register.

The amendment specifically concerns potential dismissal. The Government are confident that the provisions as drafted will assure the independence of the registrar without those reinforcements. We will, however, continue to listen to and explore all suggestions for reiterating and firmly establishing that independence. Having given that assurance, I urge the noble Lord to withdraw the amendment.

[Lord Hodgson of Astley Abbotts]

My Lords, I am grateful to the Minister for that reassuring response. I am also grateful to the noble Lord, Lord Martin, for raising some of the practical issues. I tabled the amendment just to have a discussion about who can provide some back-up to the registrar, if needed. I think that the Minister has shown a willingness to listen. I am grateful for that and, in the circumstances, I am happy to withdraw the amendment.

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I agree with what the noble Lord, Lord Lang of Monkton, suggested at Second Reading—that a lobbying register is a more effective approach to the lobbying issue, but such a register should include entries by lobbyists as well as anyone in government. It would provide another form of central database available to the public from which the public could determine the involvement of others in the formulation of policy and in influencing the Government generally. The enforcement powers given to the registrar would make this an effective tool in the search for transparency. Will the Minister tell the House whether the Government considered such a register before introducing the Bill? If not, given that this issue was raised by the noble Lord, Lord Lang, has this matter been considered since Second Reading? What has been the outcome of that consideration?

[Lord Wallace of Saltaire]

My Lords, I thank the noble Lord, Lord—I am having a total blank.

[Noble Lords]

Stevenson.

[Lord Wallace of Saltaire]

My apologies. I thank the noble Lord, Lord Stevenson, for making the comparison with the United States. We are, of course, concerned to avoid British politics being invaded by the scale of money there; indeed, that is partly what Part 2 responds to, as I said at Second Reading. We make comparisons with the scale of lobbying in the United States but, thankfully, that problem has not yet arisen.

I am slightly puzzled by the Opposition’s Amendment 65, which would remove the requirement for lobbyists to provide a residential address in the absence of any registered address. That seems to us to provide a basic element of information. The consequence of the amendment would be that where there is no registered business address a lobbyist would not be required to provide any contact details. The information to the public would thus be reduced, and the registrar’s ability to investigate compliance and to enforce the registration requirements would be undermined.

[Lord Stevenson of Balmacara]

It will be worth clarifying this so that we understand each other. You may forget my name, but surely you will understand what I am trying to say. This is a probing amendment, so we do not expect that the wording will necessarily be accepted. However, if it is possible for someone simply to record themselves as a lobbyist on the register and give only their private address, the information that should be available—which business they are acting for—will be missing. One would hope that they would put in their business address, but if the current phrasing is adopted that will be a loophole. We are simply asking the Minister if he will take this away.

[Lord Wallace of Saltaire]

I will certainly take it away, and I am very happy to do so.

An amendment in the name of the noble Lord, Lord Campbell-Savours, would alter Clause 4 to require lobbyists to disclose the recipient of the payment for lobbying and the focus and subject of lobbying activity. The Opposition’s further amendments would require that lobbyists disclose the approximate value of spending on lobbying activity during a quarter. I suppose that I should welcome the pressure that is coming across the room for even greater transparency than we propose in the Bill; that is a splendid step forward. Under the previous Government there was some considerable resistance to this level of transparency.

We have been very clear that the objective of the register is limited, in our view, to the identification of the interests that are represented by consultant lobbying firms. Consultant lobbyists should therefore be required to disclose their clients. We are not yet persuaded that the burden that would be imposed on both the industry and the regulator of requiring further information—for example, spending and financial data—is justified by the limited insight it will provide. That sounds to me like something else we may discuss in the Corridors. However, we are not yet persuaded that that provides a proportionate approach to the problem identified. It is not necessary to require the disclosure of the subject or target due to the Government’s transparency regime, whereby Ministers’ and Permanent Secretaries’ meetings with external organisations are already declared.

I compliment the noble and learned Lord, Lord Hardie, on the detail and care with which he has prepared a large number of amendments. His new clause proposed in Amendment 81 would establish a second register—the register of lobbying activities, as he has explained—which would run in parallel to the register of lobbyists. He has tabled a number of consequential amendments with that. The register would record information both from lobbyists and from public officials in receipt of lobbying communications.

The Government are not persuaded that a register of lobbying activities is necessary, nor do we think it necessary to require that both the maker and the recipient of a lobbying communication submit a report on that activity. The noble and learned Lord’s register would duplicate existing information—that provided in government transparency reporting—and the information requirements of the register appear to duplicate each other: both the lobbyist and the recipient of the lobbying would have to report any interaction. Even the American system does not come close to imposing such onerous requirements on industry and public officials. The administrative cost of complying with such a scheme would be high, both for industry and for public bodies. The cost of regulating it could be ever more expensive—costs which would surely fall either on the industry or the public purse.

Amendment 112, in the name of the noble Lord, Lord Campbell-Savours, would provide that the subscription charge be set as a percentage of the lobbyist’s turnover. The noble Lord does not specify at what percentage the charge should be set and instead provides that the level could be set in regulations. As outlined in our impact assessment, we anticipate that the charge will be approximately £650. That figure should not prove too burdensome on any organisations that undertake professional consultant lobbying. Indeed, it compares favourably with the fee charged by the host of the industry’s voluntary register. The fee will be set to recover the full costs of the registrar’s activities—including those in relation to enforcement—and will ensure that the register is not funded by public money.

The noble Lord may be concerned that such a charge should be minimised for the smallest businesses. However, as I commented earlier, the VAT exemption is intended to exempt the smallest businesses from the requirement to register.

[Lord Campbell-Savours]

Does the Minister accept that, if the charge is going to be £650, some companies may well simply deregister and the professional lobbyists’ lists may no longer exist? In so far as those lists have more information than what is currently provided by the Bill, would that be helpful to the issue of transparency?

[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.

[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.

[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.

[Lord Stevenson of Balmacara]

My Lords, I am grateful to the Minister for his very full coverage of the points, although it is becoming clear that he is expending considerable effort in trying to give no more commitments on any of these questions than are in his brief, except to welcome occasional points that he will take back. The noble Lord, Lord Norton of Louth, is right to say that it is not worth discussing the Bill if it does not deliver—either directly or through voluntary means—something more than we have at present. The wicked thought occurred to me that perhaps the amendment we ought to be tabling and debating is whether the Title of the Bill should be changed to “The Proportionate and Moderate Transparency of Lobbying Bill”.

What is going on here? Does the Minister really believe that this Bill will add very much to what we have at present? If not, why on earth are we wasting our time on it? We are discussing Part 1, but I am afraid that the same questions will come back to haunt him in Part 2. He may well be able to escape the Bench on Part 3, but they will be there in Part 3 as well. This Bill does not add very much to the effectiveness of what most people in the country, and certainly Members around this House and in another place, would like to see happen. When we were in power, we moved forward on this. We did not move very fast because it is a difficult issue, as the Minister would accept, but we would not have got into the position where the Minister is today—that is very clear.

While I thank the Minister very much for taking back my proposal that we should look again at the possible loophole in Amendment 65, I do not think that he has given clear answers to my questions on Amendments 70, 71, 75, 76 and 77 about the money. Having said that the money is important and that we do not want to go the way that the Americans and those in other territories have gone, he also said that we could not possibly put a burden on those who have to participate in the system that would cause them difficulties. However, in Parts 2 and 3, burdens are being sallied out to charities and trade unions without any shame at all, as far as I can see. Apparently, what is meat for one is not meat for the other. The noble Lord, Lord Aberdare, had it right in a very brief but salient interjection. Transparency is not capable of being moderated. Something is transparent or it is not. This Bill is heading towards having no transparency at all.

Finally, we were intrigued by the announcement about the likely fee of £650, if I correctly took down the figure. Why is there no variation on that figure between small and large firms? The scale in this sector is substantial, so even if we are going to have a register, the costs of which are met by those participating, it seems absurd to charge some of the large companies the same amount as those firms with one or two persons working in them. Perhaps the noble Lord can think about that. We on this side are not at all clear why our proposals for a more expanded register that would work only if it delivered full transparency—I understand that point—will cost so much more. Perhaps the noble Lord will write to explain how his calculations arrive at figures in the millions of pounds, when the figure for the current register is so modest. With that, I beg leave to withdraw the amendment.

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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.

[Baroness Hayter of Kentish Town]

Before that happens, may I just be assured that I have understood that even if someone is convicted under the Bribery Act in a criminal case, they could still stay on the register?

[Lord Wallace of Saltaire]

The register is not intended to have sanctions on it, but let me take that away and come back. I appreciate that we are in an area here where the question is how much the register is intended to be one which you go on to if you are engaged in this activity, or whether the register should begin to develop a disciplinary dimension, which raises some of the questions that the noble and learned Lord, Lord Hardie, in particular has pursued.