Briefing on Part 1 of the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Bill: Introducing a Statutory Register

of Lobbyists
October 2013

Summary
The register of lobbyists, as proposed in the Bill is not fit for purpose. It will not deliver the coalition pledge to increase transparency in lobbying. The register fails for two central reasons: It will cover less than 20% of the UK's 2billion, commercial lobbying industry: only a minority of consultant lobbyists; It will include no meaningful information on the activities of those lobbyists it does cover, merely a list of clients. This is not sufficient to allow public or Parliamentary scrutiny of lobbying. As currently defined, the register would have the opposite effect to that intended: because the government has severely limited who should register, it would reduce the amount of information that is publicly available on the activities of lobbyists through the current system of self-regulation. The rationale for such a weak register does not stand up to scrutiny. There is a genuine public interest in knowing who is lobbying whom about what. Experience in other countries shows that this can be achieved in a reasonably straightforward way. A degree of consensus exists among transparency campaigners and the industry on how the Bill can be strengthened. As it stands, however, it has the potential to damage the reputation of politics. At committee stage, Graham Allen MP, Chair of the Political and Constitutional Reform select committee, described the Bills passage as "an intolerable way to produce bad law" that dragged the House into disrepute. The Bill must be amended to: 1. Include all paid lobbying activity rather than individually defined lobbyists A genuine register should cover all those who are paid to lobby public officials whether they are consultant lobbyists or work in-house. We support the amendments below tabled in the House of Commons on behalf of the Political and Constitutional Reform select committee. Page 1, line 11, Clause 2, leave out subsection (1) and insert the following (1) For the purposes of this Part, a person carries on the business of lobbying if in the course of a business and in return for payment, (a) the person makes communications within subsection (3), or advises another person on the making of communications within subsection (3), and (b) none of the exceptions in Part 1 of Schedule 1 applies.

Page 50, line 17, Schedule 1, leave out paragraph 3. 2. Broaden the definition of lobbying to include mid-ranking civil servants and special advisors As the lobbying industry bodies have stated, very little lobbying activity is aimed at government Ministers and Permanent Secretaries. If we are to bring transparency to lobbying in the UK then we need to look at where influence is exerted. We support the amendments below tabled in the House of Commons on behalf of the Political and Constitutional Reform select committee. Page 2, line 23, Clause 2(5) After (positions equivalent to permanent secretary) insert the following senior civil servant means a person holding a position of Grade 5 or above in the civil service of the State. special advisor has the same meaning as in the Constitutional Reform and Governance Act 2010. 3. Require lobbyists to disclose the target, topic and cost of their lobbying If the register is to be a transparency tool then it needs to reveal not just who is lobbying but whom is being lobbied, what issues are being lobbied on (area of policy, regulation, legislation etc) and a good faith estimate of how much they are spending on it. Simply revealing the name of the client will not allay public concerns about who is influencing government. We support the amendment on Clause 5 below tabled in the House of Commons on behalf of the Political and Constitutional Reform select committee, which would include information about the policy that is being lobbied on. Also the amendments on Clause 4 tabled by the Labour Party, which would include information on how much is being spent on lobbying. Page 3, line 47, Clause 5, at end of subsection (3) insert: (c) if the registered person engaged in lobbying in the quarter in return for payment (whether or not the payment has been received), the purpose and subject matter of the lobbying services provided by the registered person; and (d) if the registered person received payment in the quarter to engage in lobbying (whether or not the lobbying has been done) the purpose and subject matter of the lobbying services provided by the registered person. Page 3, line 21, Clause 4, at end insert:(c) the approximate value of the registered persons spending on their lobbying activities for each quarter. Clause 5, page 3, line 37, insert after client information: and spending on lobbying. Page 4, line 1, Clause 5, at end insert:(4) Spending on lobbying for each quarter is the approximate value of the amount a registered person spends on their lobbying activity for each quarter.

Key myths in the lobbying transparency debate

Lobbying is a persuasive industry. Many myths have been put forward as to why a robust register of lobbyists would be impossible or undesirable. Myth 1: It is impossible to define who is a lobbyist Given the range of actors involved in lobbying, defining who should register is not a simple task. However, it can and has been achieved by defining what constitutes lobbying. Registration would then be required of anyone who is paid to undertake such activity. Robust definitions have existed is Canada, the US, Brussels and other countries for decades that could be adapted to suit the UK. A system of registration should not attempt to capture all lobbying activity, merely the most significant. Myth 2: A robust register would be overly bureaucratic The government is proposing a very shallow register, containing minimal information, merely who is lobbying. For it to be meaningful, a register must also require lobbyists to disclose information on the lobbying activity. International experience suggests that half an hour per quarter on average would be required to fill in a secure, online form. This is not an unreasonable burden to place on paid lobbyists. Myth 3: The register would be expensive to operate Costs associated with robust registration systems are not substantial. In Canada, an annual budget of C$1.1 million (706,682) is spent on the administration of the detailed national register. This includes salaries for the equivalent of six full-time employees and C$4500,000 invested annually in technical work to maintain and upgrade the system. The European Union also operates a relatively detailed lobbying register. The 2013 operating budget of the Joint Transparency Register, serving both the Commission and Parliament, is 130,000 (110,430). Myth 3: A universal register would create a barrier to participation in politics The register is concerned with transparency, not restricting lobbying. It should aim to make public all significant lobbying activity. As such, there should be a threshold under which small businesses and smaller charities would not have to register. Research undertaken in the US suggests that there are important benefits to civil society and businesses from lobbying transparency. By encouraging more informed debate around policy-making, it can boost participation and promote citizen trust in government. Registration must not be linked to access to decision-makers. A register would not create a list of sanctioned lobbyists. It merely puts the identities of professional lobbyists and their activities in the public domain. Myth 4: Lobbying is a legitimate activity making transparency unnecessary Lobbying is an essential feature of good governance. In theory, it leads to better decisionmaking and ensures that different interests have a voice. In a liberal democracy, everyone has the ability to lobby. Concerns stem from what happens in practice within the context of the UKs sophisticated, 2billion commercial lobbying industry. Certain players in society,

through their paid lobbyists, enjoy disproportionate access and influence. Viewed from this angle, lobbying is perceived by many as a corrupting force that can undermine democracy. Myth 5: Lobbyists should be allowed to regulate themselves The current system of self-regulation, operating since the mid-1990s, was described by the Public Administration Committee as little better that the emperors new clothes. Self regulation fails to provide adequate transparency for a number of reasons. It lacks universality: a large proportion of the lobbying industry are not signed up, including nine out of ten in-house lobbyists, dozens of agencies-for-hire, law and accountancy firms, management consultancies and think tanks. It is operated by self-interested actors that do not have sufficient authority to police the system. Under self-regulation, lobbyists are required to reveal little information. Myth 6: The public does not care about lobbying Lobbying will rarely be cited by voters as a priority concern. However, lobbying is viewed by many as a gateway problem affecting a number of issues of public concern, such as the governments willingness to tackle high energy prices, the practices of high street banks, or ensuring value for money from government contracts. Public unease over lobbying is growing, partly as a result of recent media coverage. Nearly two thirds of respondents to a recent poll said they saw lobbying as an issue of growing concern. 1 Another survey revealed that 90% of those polled believe that the UK government is run by a few big entities acting in their own interest.2 This should be of grave concern to politicians.

A genuine register of lobbyists

A register of lobbyists, as seen in the US, Canada and Brussels, is founded on two principles: It must be universal. It must include all paid lobbyists, including consultant lobbyists working on behalf of clients (this would apply to some think tanks); and lobbyists employed in-house by companies, trade bodies, trade unions and charities. How this has been achieved overseas is to define the activity of lobbying. The register would then apply to anyone who is paid to undertake this activity, with clear and straightforward exemptions. It must as a minimum require lobbyists to state: who is lobbying and for whom; which agency of government is being lobbied; and broadly what they are seeking to influence. A good faith estimate of what it being spent on lobbying would also show scale, disparities and trends in lobbying. This would not create a bureaucratic monster as has been suggested by government. A mock registration by Unlock Democracy took 20 minutes to complete.

Briefing on the Bill

1 Survey of 2,000 members of the public conducted by global research agency OnePoll, published in PR Week, 4 July 2013: www.prweek.com/uk/features/1188888 2 Transparency Internationals Global Corruption Barometer 2013 surveyed 114,000 people in 107 countries: www.transparency.org.uk/news-room/blog/12-blog/679-global-corruption-barometer-2013

Part one of the Bill sets out the governments proposals for a limited register of lobbyists. It introduces a statutory register of consultant lobbyists and establishes a Registrar. The stated aim of the register is to increase the transparency of the lobbying industry by opening it up to government and public scrutiny which will increase government accountability and public trust, improving the efficiency of government policy outcomes. As currently drafted, the register will not meet the governments objectives. Central failings of the proposed register of lobbyists 1. The definition of who a lobbyist is too narrow. It excludes at least 80 per cent of the industry, notably in-house lobbyists. It could also exclude most key consultant lobbyists through two significant loopholes: those whose operate in a mainly nonlobbying business, which would apply to the big agencies that offer a range of communication services, as well as law and accountancy firms; and those who in the course of their lobbying do not make contact with Ministers and Permanent Secretaries, which is a majority of lobbyists (see 3 below). As drafted, the register could provide less transparency in lobbying than the current system of self-regulation. 2. As proposed, the register will contain no meaningful information on lobbying activity. It will only require lobbyists to register their clients, but reveal nothing of their interaction with government, i.e. whom they are lobbying, and what they are seeking to influence. Only by seeing policy-makers dealings with lobbyists can they be held to account for their decisions. By not including this information, government has exempted itself from this transparency measure. A register of lobbyists is perhaps not a comfortable thing for government, much like Freedom of Information law, but it is necessary to address declining public trust. 3. The proposed register only covers those who lobby Ministers and Permanent Secretaries. This would capture only a tiny proportion of lobbying activity: the vast majority of contacts are with mid-ranking civil servants, special advisors or Parliamentarians. Furthermore, analysis of Department of Business Innovation and Skills data on Ministers and Permanent Secretaries meetings found that only 1% were with consultant lobbyists. The government is, therefore, proposing a register that would potentially cover just 1% of recorded lobbying activity. Background to the Bill A register of lobbyists was a central recommendation of a three year inquiry into lobbying by the Public Administration Select Committee (2009). PASC Chair, Tony wright, said: Lobbying enhances democracy, but it can also subvert it... There is a public interest in knowing who is lobbying whom about what. Our proposals show that this can be achieved in a reasonably straightforward way." Following a series of media scandals, the Coalition agreement included a commitment to introduce a statutory register of lobbyists (2010). After a lengthy delay, the government published and consulted on its initial plans for a minimal register (2012). Responses to the consultation showed widespread support for major revisions to the governments approach, including: strong backing for the register to include all lobbyists (the range of consultant and in-house lobbyists); significant support for the register to include more information on

lobbying activity, including what issues are being lobbied on; and a majority in favour of disclosure of lobbying spend. The Political and Constitutional Reform Committee inquiry into the governments approach called on Ministers to scrap its initial proposals in favour of a more robust register (2012). The current Bill (July 2013), introduced on the back of more lobbying scandals, contains a weaker version of the governments original proposals. A further report by the Political and Constitutional Reform Committee (Sept 2013) described the plans as seriously flawed, a result of inadequate consultation with those it affects and without the proper involvement of Parliament, not least through pre-legislative scrutiny. It noted the unnecessarily rushed way in which this Bill is being proceeded. It was, it said, an object lesson in how not to produce legislation. The inquiry also revealed strong consensus between the lobbying industry and transparency campaigners for a wider definition of who should be included on the register. These points were reiterated in the Committee stage (Sept 2013). Government was also accused of showing contempt for the public, abusing Parliament and bringing it into disrepute with this Bill.