Lobbying: Access and influence in Whitehall - Public Administration Committee Contents


3  How are these areas currently regulated?

How are lobbyists regulated?

44.  Lobbying activity in the United Kingdom is subject to no specific external regulation. Umbrella bodies and individual companies have codes of conduct for their members and staff which are generally described as a form of self-regulation. The Association of Professional Political Consultants (APPC), the Public Relations Consultants Association (PRCA) and Chartered Institute of Public Relations (CIPR), the three main membership organisations for public affairs practitioners, each require their relevant members to abide by their separate (although similar) codes of conduct.

45.  The main difference between the CIPR Code and the Codes of the APPC and PRCA is that the former does not require the public disclosure of clients' names, while the latter do. This issue is at the heart of debate within the lobbying world about the appropriate limits to transparency and the extent to which lobbyists have a duty to inform the wider public about their activities. While John Grogan described the publication of client lists as one of the "two major principles of self-regulation",[41] Mike Granatt of Luther Pendragon, a public affairs firm outside both the APPC and the PRCA, told us that, for him, a client's right to privacy was paramount; that "if a client does not wish to be named in public, sir, I see no reason why they should be named in public".[42]

46.  APPC and PRCA members (which are consultancies) are also required not to "employ any MP, MEP, sitting Peer or any member of the Scottish Parliament or the National Assembly of Wales or the Northern Ireland Assembly or the Greater London Assembly". An equivalent injunction does not apply to members of the CIPR (who are individuals—but who may work for or run consultancies which may or may not be members of the APPC or the PRCA). Members of Parliament for their part are forbidden from acting "as the representative of [an] outside body in regard to any matters to be transacted in Parliament" and from making "any approach … to Ministers or servants of the Crown" in return for money or other benefits.[43] This does not prevent Members from offering paid advice to outside bodies, for example as parliamentary advisers, or from representing their interests outside Parliament and Government, most commonly as lawyers. The rules for Members of the Lords are broadly speaking equivalent, although each House has its own enforcement mechanisms.

47.  Further differences between the Codes arise from the fact that APPC and PRCA members are companies, while CIPR members are individuals. Our witness from Bell Pottinger Public Affairs told us that if a complaint against an individual member of staff were upheld by the CIPR, he "would have to get rid of them".[44] What the CIPR Code cannot do is establish corporate incentives and sanctions to behave appropriately. Arguably, this could allow a company whose staff belong to the CIPR, but which does not belong to either the APPC or the PRCA, to shift responsibility from the corporate to the individual level.

48.  Public affairs companies which are members of neither the APPC nor the PRCA often have codes of conduct of their own, such as Luther Pendragon's "Luther Code".[45] Companies conducting public affairs in-house may well also require their staff to abide by ethical codes: there is a Tesco Code of Ethics, for example. A number of international non-governmental organisations have signed a joint accountability charter, which includes commitments to responsible advocacy and to transparency.[46]

49.  Solicitors' firms conducting public affairs work are regulated by the Solicitors Regulation Authority (SRA) and are bound by the Solicitors' Code of Conduct, which conflicts with the APPC and PRCA Codes by putting a (statutory) duty to client confidentiality above any (non-statutory) duty to disclose publicly who those clients are. Other trades and professions are also engaged in lobbying. As has been pointed out elsewhere:

Public relations specialists, journalists, lawyers, managers, accountants and even doctors and engineers can be found in the world of lobbying. Most of these fields are represented by professional bodies that have widely varying capacities to discipline their members and diverse views on what constitutes appropriate conduct.[47]

DOES THE CURRENT SYSTEM OF SELF-REGULATION WORK?

50.  Sir Philip Mawer, the Prime Minister's adviser on ministerial interests, formerly the Parliamentary Commissioner for Standards, has been quoted as saying that "self-regulation only works if it is of general application throughout the industry".[48] Professor A.P. Pross from Dalhousie University in Canada—a country with a legally binding code for lobbyists—has argued that:

While it may be possible to mount a lobby registration scheme on a voluntary basis, in the final analysis its success will depend on a level of enforcement that can only be achieved at the governmental level. Only government has the authority to require lobbyists to divulge information. Only government can require officials to report the failure of lobbyists to comply with the rules. Only government can investigate such failures and prosecute breaches of the rules. Only government can impose sanctions such as the denial of access … Professional organisations, even with government encouragement, find it difficult to effectively discipline their members.[49]

51.  We examine here three main areas to determine the extent to which the current system of self-regulation of public affairs consultancies is effective:

i.  First, is there a consistent approach across the sector?

ii.  Second, what are the prospects for a single organisation establishing itself as the regulator of multi-client consultancies?

iii.  Third, how well do current complaints and disciplinary processes work in practice?

Consistency of approach

52.  Successful self-regulation depends on a degree of consistency of approach among those involved in setting and monitoring the rules. It is difficult to see how any consistency can be achieved when so many disparate organisations and individuals are involved. The APPC, PRCA and CIPR have gone some way towards recognising this by producing a set of guiding principles of conduct, with the aim that these principles should be followed by all of the organisations and individuals involved in lobbying the institutions of government, including "law firms, management consultancies, charities, local authorities and individuals from all walks of life".[50] The principles are, perhaps unsurprisingly, something of a lowest common denominator. They contain no requirement to produce public client lists, for example. The guiding principles of conduct may not go far enough, but they are nonetheless a welcome and noteworthy step towards consistency of approach, which is certainly needed if self-regulation is to have any hope of meaningful success in such a fragmented landscape.

Establishing trust across the industry

53.  Successful self-regulation also depends on those involved in winning the trust of the potential subjects of their regulation, as well as their clients, and, as far as possible, the wider public. Potentially this could create a virtuous circle, whereby lobbyists who attempted to evade self-regulation would find it difficult to find clients willing to take them on. None of the three umbrella organisations has so far succeeded in establishing itself in this role.

54.  The APPC has indeed come in for criticism for allegedly encouraging public sector organisations letting contracts for public affairs or lobbying services to make APPC membership an absolute requirement. The Law Society informed us that:

In effect, the measure being promoted would debar any companies that do not hold membership of the APPC from any public affairs or lobbying contract in the public and private sectors. We are concerned that this constitutes an abuse of APPC members' dominant market position and breaches competition law. The APPC has no statutory authority to act as market regulator. It is unfair and unlawful for solicitors' firms, and others, to be penalised for deciding not to become members of it, particularly given the professional difficulties in doing so.[51]

55.  We were also approached jointly by two firms, one an APPC member, the other a firm of solicitors, who noted that:

Earlier this year, the Met Office, which is overseen by the Ministry of Defence, issued a tender invitation to provide public relations support. The tender invitation, which was widely circulated in the public affairs/PR world, stipulated that respondents should be members of the APPC to be eligible to apply for the work. You have heard that the APPC is just one—self-regulatory and self-appointed—body which claims to regulate the public affairs industry. We are most concerned that the APPC has been able in this way to present itself as the sole acceptable arbiter of ethical standards in the profession for the purposes of this tender.[52]

56.  A witness from one of these organisations told us bluntly, "We cannot see what is the point of the APPC from our point of view".[53] A witness from another prominent public affairs consultancy told us along similar lines that "I just happen to feel it [the APPC] has failed as a body".[54]

57.  In no established profession that we are aware of are there three competing organisations each claiming to be responsible for self-regulation of their members' activities. For doctors, solicitors, journalists and advertisers, there is no choice of regulatory bodies to which to belong. The APPC does not seem to attract sufficient trust throughout the lobbying industry and among its clients for it to suggest with any authority that only its members should be eligible to apply for public contracts. But the spirit of this suggestion—the notion of a single self-regulating organisation for multi-client public affairs consultancies—recognises that the current situation allows consultancies to pick and choose the rules that apply to them in a way that is incompatible with effective self-regulation.

Complaints handling as a measure of effectiveness

58.  A crucial measure of the effectiveness of any system of self-regulation is how complaints are handled and disciplinary proceedings are pursued. Each of the three umbrella organisations has systems for dealing with these areas, which they have outlined in their evidence to us. For example, for the PRCA,

Any alleged breach of the Code is investigated thoroughly by the PRCA's Professional Practices Committee which is comprised of PRCA member consultancies and the PRCA Director General. Sanctions are imposed for proven breaches of the code including expulsion from the PRCA.[55]

These systems are, however, scarcely ever used. We understand that there has not been a formal complaint against a member of the PRCA "certainly in the last 10 years and I am not sure within the existence of the PRCA".[56]

59.  Similarly, for the APPC, while the systems exist …

Should there be a cause of complaint and a prima facie breach of our Code as we perceive it, we will then convene a professional practices panel to investigate the matter further and then they will make a judgment.[57]

… they are not in regular practical use:

I am happy to inform the Committee that we have not had to refer to the panel since 'Drapergate' over 10 years ago, or just coming up to 10 years.[58]

60.  In fact, shortly after we were told this, the APPC professional practices panel was convened to determine a complaint against an APPC member (Morgan Allen Moore). The panel concluded that there was a prima facie case for investigating, and a hearing was arranged. However, shortly before the hearing, the member announced that they were taking legal action against the complainant, and the panel suspended its proceedings. The action was subsequently settled, and the complainant wrote to the APPC "withdrawing his allegations without reservation and formally requesting that they be struck from the record". This was not an option under the APPC's rules, but the panel decided nonetheless to dismiss the complaint "as no useful purpose would be served" by its determination. The panel also decided that the complainant should pay the cost of the disciplinary proceedings, including the fees of the panel members and "professional legal fees and reasonable incidental expenses" incurred by the member in dealing with the complaint. We understand, although no formal announcement has been made by the APPC, that the member has since been suspended for failing to pay its membership fees. In addition it has failed to disclose its clients, as required by the rules of the APPC.[59]

61.  There is one other incident that is worth mentioning. In July 2005, the APPC decided that there was sufficient prima facie evidence to show that a member, Media Strategy, had breached Clause 8 of the APPC Code of Conduct by employing a Member of the Lords, Lord O'Neill of Clackmannan, to justify referring the issue to the professional practices panel. Media Strategy, however, resigned from the APPC before the matter could be formally referred and joined the PRCA instead. In October 2008, Hanover Communications (as Media Strategy was re-branded in 2007) re-joined the APPC. Charles Lewington, the Managing Director of the consultancy since 1998, is quoted on the APPC website as saying: "Hanover has been a member of the PRCA for three years and its ethical code of conduct covering public affairs is almost identical to that of the APPC, so joining is a logical step".[60] No mention is made on the APPC's website of the consultancy's previous membership of the APPC or the reasons for it leaving.

62.  The CIPR has on "very rare" occasions, convened its disciplinary committee.[61] This has happened however only twice in the last ten years. Of the two individuals involved one was "reprimanded" and the other was "severely reprimanded".[62]

63.  Comparison with other industries is instructive:

  • In 2007, the Advertising Standards Authority resolved 23,953 complaints about 14,009 advertisements. 3,866 of these complaints were formally investigated; of these, 2,579 complaints were upheld, relating to 389 advertisements.[63]
  • In the six months between October 2007 and March 2008, the Press Complaints Commission processed 2,946 complaints (2,292 of which were not investigated). Of those investigated, 258 complaints were resolved. Of the nine complaints going to adjudication, six were upheld.[64]
  • The Solicitors Regulation Authority (SRA) receives, assesses and investigates reports about misconduct and breaches of the rules by solicitors. In 2006, 51 firms were subject to closure, 14 of them for suspected dishonesty. There were 247 orders made by the Solicitors Disciplinary Tribunal on SRA referrals, resulting in 66 strikings-off, 32 suspensions and 76 fines. Solicitors from 366 different firms were issued 562 reprimands and severe reprimands, and solicitors from 189 firms were issued a total of 259 findings and warnings.[65]

64.  We would not expect to see as many complaints made against lobbyists as against doctors and solicitors, whose behaviour has a clear and direct personal impact on individual members of the public; nor as against advertisers and journalists, whose work is in the public eye. But the vast disparity is patent. A complaints system that was working would have produced more than three cases in the last ten years, even if the vast majority of lobbyists were operating ethically and transparently. Reprimands and "severe" reprimands, the only outcomes to have been seen in the two cases decided against members of any of the three umbrella groups (both within the CIPR), are not of a kind that would give confidence to any outsider that disciplinary processes are robust. The APPC's policy of expecting complainants to be prepared to bear the costs of an investigation, including the legal fees of the member complained against, is unacceptable: it is unique as far as we are aware in any industry complaints system and is an obvious barrier to potential complainants.

Conclusion

65.  Lobbyists outside the APPC have criticised its processes …

Given the lack of proactive auditing of compliance and a complaints procedure that lacks credibility, questions inevitably arise as to the extent to which APPC members comply with the code. Anecdotal evidence of non-compliance is abundant and we have no reason to doubt this.[66]

I am … sure that there are companies here that manage to sign up to the APPC code, for example, by splitting their operation in half so they have one half that deals with one sort of business, one half they say deals with public affairs business and signs up to the APPC code, but they do not for the other half of their business declare who their clients are, and I think their interests are exactly the same.[67]

… but much the same criticisms could doubtless also be made of the PRCA and CIPR—although the PRCA does at least appear to demand independent audit of consultancies' processes as part of its membership requirements.[68] The central problem is that the three umbrella groups have an in-built conflict of interest, in that they attempt to act both as trade associations for the lobbyists themselves and as the regulators of their members' behaviour.

66.  The conditions are not currently in place for genuinely effective self-regulation of lobbying activity by those who carry out this activity. Despite tentative steps towards a very basic consistency of approach, this consistency does not yet exist, and there is no one organisation that has the trust and authority to carry out a regulatory role across the multi-client sector. Even if there were, a large question mark would remain over in-house public affairs staff in corporate and campaigning organisations, who comprise a large part of the lobbying industry—although at least some of these will be members of the CIPR. The complaints and disciplinary processes of the lobbying umbrella bodies are under-used and ineffective. In the final analysis, what lobbying organisations refer to as "self-regulation" appears to involve very little regulation of any substance.

How are the lobbied regulated?

67.  Civil servants and Ministers are subject to a degree of regulation in the context both of being lobbied, and of moving from within Government to lobbying on behalf of an outside organisation. This regulation takes the form both of statutory controls, and of contractual terms and employment guidance.

68.  Thinking about how to manage relations between those in Departments and those outside is not absent from the Government's agenda, but it has a very low profile. There appears to be only one piece of central guidance for those in Government on contact with lobbyists. This guidance for civil servants was issued by the Central Secretariat in the Cabinet Office in July 1998, shortly after allegations in the media that lobbyists were claiming to be able to sell access to government ministers. The guidance does not seem to have been updated since 1998, and it is by no means prominently available. It remains essentially valid, and attempts to be a practical guide:

If for instance you have a friend who is a lobbyist you do not have to sever your friendship and stop meeting them socially. If you are married to one, you do not have to get divorced! But do make sure that the ground rules are understood, that you make proper arrangements to deal with any conflict of interest and that you do not get tempted into doing something which would lay you open to criticism or be misunderstood.[69]

69.  Interestingly in the context of the criticisms of lobbying organisations we have made above for their weak complaints handling procedures, the Cabinet Office is not aware of any complaints ever having been made by Ministers or civil servants about approaches made to them by people outside Government. Nor is it aware of any complaints being made about the propriety of the behaviour of Ministers or civil servants when in contact with people outside Government.[70]

70.  In general, what regulation does exist covers transparency on the one hand, thanks to the Freedom of Information Act, and rules concerning financial propriety on the other. There are also reasonably developed if somewhat uncertain procedures around the transfer of Ministers and staff from the service of the Crown into other employment. We now turn to examine each of these areas.

71.  There are also well-developed rules covering the financing of political parties and the disclosure of political donations, which are relevant to concerns about lobbying, but which we do not cover in this Report.

FREEDOM OF INFORMATION

72.  The Freedom of Information (FoI) Act has introduced some transparency into meetings between Government representatives and outside interest groups. Departments appear generally ready to publish basic information about who their Ministers have met and on what subject, when relevant FoI requests are made asking for this information.[71] On occasion, they have withheld even this information about some meetings, on the grounds (under Section 35 (1) (a) of the FoI Act) that they related specifically to policy development.[72]

73.  Departments have been less ready to publish detailed minutes of meetings, claiming both that the cost of doing so would be excessive and that the information involved is exempt from publication under various provisions of the FoI Act, such as information relating to the formulation of government policy (section 35), information provided in confidence (section 41) and commercially sensitive information (section 43).[73]

74.  An Information Tribunal judgement promulgated in April 2008, in a case brought by Friends of the Earth (FOE), required the release of documents relating to meetings held between the then Department of Trade and Industry and the Confederation of British Industries, including notes of informal meetings and of an away day. This may have an impact on the ability of Departments to withhold similar information in the future.

75.  The Tribunal's judgement found FOE's arguments on the public interest factors in favour of disclosure "very persuasive":

It will only be in rare cases (perhaps where certain national security considerations are at play) that public scrutiny should give way entirely to blind faith that public officers will always do the right thing. The public interest in achieving a better understanding of the way in which lobbyists can seek to influence policy also involves an interest in understanding the nature and extent of the relationship between lobbyists and government departments. Understanding the relationship serves at least two purposes. First, it enables the public to better understand the mechanics of lobbying in that it reveals the many different ways in which lobbying can take place, from bilateral monthly meetings through to away-day (or away-morning) meetings with ministers and senior officials. Second, it subjects the relationship to a certain degree of scrutiny which can assist in ensuring that a particular relationship does not become unduly influential or dependent.[74]

76.  The Tribunal did, however, accept that "there is a strong public interest in the value of government being able to test ideas with informed third parties out of the public eye and knowing what the reaction of particular groups of stakeholders might be if particular policy lines/negotiating positions were to be taken".[75]

77.  In summary, while it is clear that some information about contacts between Government and lobbyists is subject to release under the FoI Act, the extent to which this is the case remains open to interpretation by the courts.

CONSULTATION

78.  Statutory consultation requirements, commonly built into primary legislation, provide opportunities for lobbying by a wide range of stakeholders, thus ensuring at least that more than one team is on the playing field, whether it is level or not.

INTERESTS, GIFTS AND HOSPITALITY

79.  It is potentially compromising and can create improper obligations for Ministers and civil servants to receive gifts and hospitality. This is recognised in the Civil Service and Ministerial Codes.

The rules

80.  The Ministerial Code provides that "Ministers should take care to ensure that they do not become associated with non-public organisations whose objectives may in any degree conflict with Government policy and thus give rise to a conflict of interest" and that "no Minister should accept gifts, hospitality or services from anyone which would, or might appear to, place him or her under an obligation". The same principle applies if gifts etc are offered to a member of their family. Gifts given to Ministers in their ministerial capacity become the property of the Government, but may be bought back by the Minister.

81.  The Civil Service Code forms part of civil servants' (and specialist advisers') contract of employment. It contains provisions requiring civil servants not to "accept gifts or hospitality or receive other benefits from anyone which might reasonably be seen to compromise your personal judgement or integrity", nor to "be influenced by improper pressures from others or the prospect of personal gain". The Code of Conduct for Special Advisers states that they "should not receive benefits of any kind which others might reasonably see as compromising their personal judgement or integrity".

The practice: Ministers

82.  The Cabinet Office publishes an annual list of gifts received by Ministers over the value of £140 (the limit above which they become government property). The most recent edition reveals, for example, that the Prime Minister opted to purchase a porcelain figure from the Government of Germany valued at £250, while a mobile phone from an unknown admirer was held by the Cabinet Office. Hampers from a variety of sources were donated to charity.[76]

83.  Unlike gifts, it is not clear whether Ministers are required to register hospitality offered or received in their capacity as Ministers. Although it would appear that some information in this area is recorded by Departments, it is not routinely published.[77] There is also some confusion as to responsibility. The Ministerial Code suggests that "if a Minister accepts hospitality, … it should be declared in the Register of Members' or Peers' Interests".[78] A response of 28 May 2008 to an FoI request made to the Department for Transport asking for information about the Department's hospitality book likewise claimed that this information was available in the Commons Register of Members' Interests. In fact the Registers of Members' and Peers' Interests only contain information about hospitality received in a parliamentary capacity; they do not contain information about hospitality received in a ministerial capacity. There may not be a clear-cut distinction between these capacities, but the current framework is confusing, and doubtless leads to conflicting advice to Ministers from departmental and parliamentary authorities.[79] In our view, it is far better that hospitality received should be recorded in more than one place, than not be recorded at all. The Ministerial Code requires adjustment, to reflect the duty on Ministers to record within Government all offers of hospitality which a reasonable person might consider to have been made to them in their capacity as Ministers.

84.  The version of the Ministerial Code published in July 2007 promised for the first time that an annual statement covering relevant Ministers' interests would be published.[80] We understand from the Prime Minister's Independent Adviser on Ministerial Interests that the preparation of this list has proved more time-consuming than initially expected. We welcome the proposal to publish a statement of Ministers' interests. We do not think, however, that an annual list is the best solution. Much of the information it contained might quickly become historic: even the names of some of the Ministers. We would prefer to see an online register, which could be kept regularly updated. In our view, the register should be inclusive, not exclusive. It is not always clear in what capacity a Minister is acting: as a Minister, a Member of Parliament, a party politician, or a private individual. If in doubt, an interest should be included. The test needs to be whether a reasonable person could consider that an interest is relevant.

The practice: Civil servants

85.  The Civil Service Management Code devolves to Departments and agencies the responsibility to define "the circumstances in which [their staff] need to report offers of gifts, hospitality, awards, decorations and other benefits and of the circumstances in which they need to seek permission before accepting them".[81] We asked the Parliamentary Under-Secretary from the Cabinet Office, why rules in this area were not consistent across Government. His explanation was that "Circumstances are different for each department":

If I can give you an example, if you were offered a gift or hospitality and you were a foreign office minister it would be very different to a housing minister or a transport minister involved in a procurement contract being offered a gift. You would not want to give insult to an ally or another nation that sends some kind of ceremonial gift but you would send a gift back if you were a housing minister on a procurement project. You need to allow departments a degree of flexibility to administer their own policies on how hospitality is accepted.[82]

86.  We have seen copies of the rules for civil servants in the Cabinet Office, Department for Communities and Local Government (DCLG), and Department for Transport (DfT). In each case they set out clearly and in some detail how offers of hospitality and gifts should be treated. They are reasonable and contain a great deal of common sense. The rules for DCLG and DfT are strikingly similar. We see no reason why the principle-based approach to gifts and hospitality adopted by Departments could not be developed into central guidance, incorporating the flexibility required to allow offers from potential contractors and from foreign diplomats to be treated differently.

87.  While the rules we have seen are robust in theory, we have some doubts about their implementation in practice. We asked the Cabinet Office for copies of the hospitality registers for the three Departments mentioned above. Instead of providing these registers, the Government referred to its commitment to publish an annual list of hospitality received by Board members by Department.[83] Given the delay in publishing this list coupled with the very straightforward information required for its collation, and given the failure to provide the registers we requested, we suspect that information on gifts and hospitality has not been kept across Government as rigorously as it might.

88.  Concerns about lobbying are not restricted to Board members. Very senior civil servants responsible for important areas of policy and contract negotiation are often not represented on departmental Boards. Why not also publish or otherwise make available information about hospitality and gifts they had received? The Minister told us after our evidence session, in response to this suggestion, that "to collect a similar level of information for all senior civil servants in all departments would be extremely resource intensive and in my view disproportionate".[84] This is an argument we find hard to understand, as this is information that Departments are required to collect in any case. The only novelty would be making it available beyond the Department, perhaps online.

BUSINESS APPOINTMENT RULES

89.  We published a report on the Rules on the Acceptance of Outside Appointments, commonly known as the Business Appointment Rules, in June 2007.[85] These rules set out the circumstances in which civil servants and others, including members of the Armed Forces and diplomats, need to obtain government approval to accept an outside appointment within two years of leaving Crown service. The rules are aimed at ensuring that, when a Crown servant leaves and takes an outside job, there is no cause for any suspicion of impropriety, in particular that such a job might:

  • be a "reward for past favours" granted by the applicant to the employer;
  • be one which could enable a particular employer to gain an improper advantage by employing someone who had access to what its competitors "might legitimately regard as their own trade secrets or information relating to proposed developments in government policy which may affect that firm or its competitors"; or
  • be sensitive for other reasons.[86]

90.  All applications for approval are initially made to the employing department. According to the procedure set out in the Rules, the Department will send them to either the independent Advisory Committee on Business Appointments (ACoBA) or the Cabinet Office or deal with them itself. The seniority of the applicant and the sensitivity of the particular case determine how it is handled. Currently decisions are taken as follows:

  • the Prime Minister or the Foreign Secretary approves applications from Permanent Secretaries and the next most senior civil servants, and their equivalents (other than special advisers), on advice from the Advisory Committee;
  • the employing department approves applications from other members of the Senior Civil Service and all those below it, after consultation in appropriate cases with the Head of the Home Civil Service or the Cabinet Office (the same team providing the Secretary to the Advisory Committee). The responsibility for the decisions taken in departments (other than on applications from special advisers) rests with the Minister in charge, although they may delegate this function;
  • the Head of the Home Civil Service or the Permanent Secretary of the department concerned approve applications from special advisers. Ministers are not involved in these decisions, although the Advisory Committee will advise on the most senior cases.

91.  As well as considering cases at the highest level, ACoBA also reviews a wider sample of applications in order to ensure consistency and effectiveness. Any application may be referred to the Cabinet Office for advice, and to ACoBA if the Head of the Home Civil Service and the departmental Minister agree.

92.  A similar system for former Ministers was introduced following a recommendation from the Committee on Standards in Public Life in 1996, although under these arrangements ACoBA gives its advice directly to the former Minister. The new Ministerial Code published in July 2007 makes clear that on leaving office, Ministers must seek advice from ACoBA about any appointments or employment they wish to take up within two years of leaving office, apart from unpaid appointments in non-commercial organisations. The Code also makes clear that Ministers are expected to abide by the advice of the Committee.

93.  Three of the members of ACoBA are politicians with legal experience; the four others have experience at senior levels in various walks of life: the home civil service, the diplomatic service, the armed forces, and business. All of the members are more than 70 years old, and all were educated at Oxford or Cambridge (either at undergraduate or postgraduate level). The membership of ACoBA has not been refreshed for more than five years; some of its members have been in place for nearly ten.

94.  We took evidence from the then Chairman of ACoBA, Lord Mayhew of Twysden, alongside a fellow member of ACoBA, Lord Maclennan of Rogart, and the Committee Secretary, Tony Nichols.

95.  The two main concerns that we investigated were that civil servants or Ministers might be recruited by outside bodies in order to help them gain access or influence within Government, and conversely that the prospect of future employment might lead a serving official or Minister to take decisions with the interests of an outside body in mind.

ACoBA's definition of lobbying

96.  ACoBA has on various occasions advised that appointments should only be taken up if the person concerned does not become "personally involved in lobbying" UK Ministers or Crown Servants for a specified period—usually a year after leaving office. There has, however, been some confusion as to what this means in practice.

97.  The terms of ACoBA's advice have varied from case to case:

  • Some have been given 12 month bans on lobbying "UK ministers or officials", whereas others have been banned only from lobbying named departments;
  • Some (e.g Stephen Twigg[87]) have been banned from lobbying their own former department for 12 months, but other departments for only 6;
  • Rt Hon David Blunkett MP[88] appears uniquely to have been given a two-year lobbying ban,[89] while Lord Whitty's[90] ban lasted 18 months;
  • Some people (e.g Rt Hon Tony Blair) have been specifically reminded that they should not draw on privileged information which was available to them in their former roles[91]—even though the Committee acknowledges that this is "normal practice".[92]

98.  It is worth noting that while most former ministers and Crown servants have been given blanket, undefined bans on "lobbying", there are some variations to this construction. A salient example is Lord Whitty's move to Eaga Partnerships in January 2006. The Committee advised that he should:

stand aside from advising the company on any bids for future Government business, including in the devolved administrations, and from lobbying their Ministers or officials on the company's behalf.[93]

99.  The clear suggestion here is that advising on bids is not considered to be "lobbying". Similarly, Rt Hon Charles Clarke MP was told he "should not be personally involved in, or give advice on, any of the firm's [Beachcroft LLP] business directly relating to Government, nor in lobbying the Government on behalf of the firm or its clients".[94]

100.  Stephen Haddrill, who went from the Department of Trade and Industry to be Director General of the Association of British Insurers, told us that he did not receive "a straight ban", but had been told that, although he could not initiate contact for lobbying purposes "if [he] was approached … [he] could take part in the discussion". Similarly, Lord Warner, a former Health Minister, told us that "the main thing" he was told not to do after leaving the Government was "to lobby ministers, whatever that means":[95]

The letter I received, a copy of which I am very happy to send to the Committee, said that I should not lobby government. That was the key sentence. I would not have dreamt of lobbying government, but it seems absolute nonsense to say it means that if someone in government approaches me for my views I cannot talk to that individual for 12 months. In that case it is not I who takes the initiative; it is they.[96]

101.  We understand from ACoBA that "while not recognising any fully comprehensive definition of lobbying", it "considers and intends that any ban on lobbying that it may recommend extends to any contact made with a view to influencing the exercise of a discretion or a decision".[97] We doubt that this clarification will be of great assistance in helping those advised not to become involved in lobbying to identify precisely what they should or should not be doing.

102.  Lord Maclennan has suggested that ACoBA's ban on lobbying is "wholly unenforceable". He therefore believes that "certain categories of private sector employment are entirely unsuitable for retiring Crown servants".[98] Lord Mayhew told us that his colleague was at the "austere" end of the spectrum of approach.[99]

Ministers

103.  There was a significant turnover of ministers in 2007, and a number of former Cabinet ministers have taken on new roles, including Rt Hon Hilary Armstrong MP, as a member of the Advisory Board for GovNet Communications, and Rt Hon Patricia Hewitt MP as Special Consultant to Alliance Boots Ltd and Senior Adviser to Cinven. Most prominent, though, have been the former Prime Minister's new roles as consultant/senior adviser to JP Morgan Chase & Co. and Zurich Financial Services.

104.  There are specific concerns about former Ministers who take up paid employment after they have left ministerial office but while they remain Members of Parliament paid from the public purse. In a recent case, Dr Stephen Ladyman MP, a former Minister of State at the Department for Transport working as an adviser to ITIS Holding plc, a company selling traffic information, for an annual fee of between £10,001 and £15,000, approached a senior official at the Highways Agency while still subject to an ACoBA lobbying ban, to make initial contact with a view to arranging a meeting once the lobbying ban had expired. He has since mentioned his former ministerial position as a way of introducing himself when lobbying on behalf of ITIS.[100] This case shows both the potential for differing interpretations of ACoBA's lobbying ban and the way in which former Ministers can, within all existing rules, use their former Ministerial position to help them to gain access for private interests.

105.  We heard from Rt Hon Richard Caborn MP and have received written evidence from Rt Hon Ian McCartney MP about the appointments that they have accepted,[101] in Mr Caborn's case as a consultant for AMEC Plc (for which he is paid between £70,001 and £75,000) and in Mr McCartney's case as a senior adviser to the Fluor Corporation (for which he receives between £110,000 and £115,000—although he does not take this money as personal income).[102] Witnesses from campaigning organisations have suggested that there are connections between these companies and lobbying both for nuclear contracts and for an increased use of nuclear power.[103]

106.  Richard Caborn was advised by ACoBA that he could take up the post forthwith, but that "for 12 months after leaving office, he should not be personally involved in lobbying the Government or the UK National Decommissioning Authority on behalf of the company". One member of ACoBA dissented from this advice. Ian McCartney was advised unanimously that he could take up the post forthwith, but that, "for 12 months after leaving office, he should not be personally involved in lobbying the Government on behalf of the company or its clients".[104]

107.  Richard Caborn denied that his appointment "was anything to do with [his] being a minister".[105] Both are also clear that they have not been involved in lobbying the government:

It is not about lobbying at all; it is about the fact that I am an engineer and I have had a lot of experience in Europe and have been a trade union official. It is nothing to do with my ministerial career.[106]

I don't lobby for Fluor and this is explicit in our agreement, lodged with the House authorities.[107]

108.  Both, however, are retained as advisers. Ian McCartney advises Fluor on, among other things, "outside relations".[108] Many of the self-professed lobbyists to whom we spoke explained that they do not usually lobby Government directly, but instead advise their clients on how to do this themselves.[109] For example, Grayling Communications wrote to us that:

Our consultants will always encourage our clients to meet with contacts themselves and will not themselves meet and brief parliamentarians, ministers or officials unless all parties are aware and happy for this to be the case.[110]

109.  The question, as one of our other witnesses put it to us, is:

When does Ian McCartney's work, if he is influencing the public policy environment, stop being advice to his client and start becoming lobbying?[111]

110.  Richard Caborn and Ian McCartney have both taken advice from ACoBA and from the parliamentary authorities on their appointments, and there is nothing to suggest that they have done anything in breach of either body's rules. We think though that it stretches the bounds of credulity to suggest that the fact that they were former Ministers with contacts in Government did not play a part in the decisions by AMEC and Fluor to employ them. Part of the appeal of employing former ministers is the perception—accurate or not—that they will be able to offer access across government. This is particularly so when their party remains in government.

Special advisers

111.  Former Special Advisers will be expected to have access and possibly influence across government. The roles taken on by former Ministers are at least transparent. But of the exodus of Special Advisers in 2007, only two went through the ACoBA system: the former Chief of Staff to the Prime Minister, Jonathan Powell, and his deputy Elizabeth Lloyd.

112.  The remaining former Special Advisers were not senior enough (in terms of their Civil Service grades) to go through the ACoBA process. They will have had to be cleared by the Permanent Secretaries of the departments in which they worked before taking up new jobs. However, this does not offer a transparent record of any terms imposed on the Blair administration's former Special Advisers in their employment on leaving the service of the Crown. It is clear that many are now employed in the private sector (such as Jonathan Powell at Morgan Stanley), while others are in the not-for-profit sector (such as Peter Kyle at ACEVO or Matthew Taylor at the RSA) where they are just as likely to be seeking to influence government.

113.  In particular, there is a record of movement between the public relations industry, including public affairs, and government:

  • David Hill, the former Director of Government Communications, worked for the Bell Pottinger Group before replacing Alistair Campbell at Number 10, and has returned there since. He was Director of Communications for the Labour Party between 1991 and 1997.
  • Mick Halloran, a Special Adviser to John Prescott, is a director of Citigate Dewe Rogerson's new public affairs arm CDR Public Policy.
  • Darren Murphy, a special adviser for political communications at Number 10 and previously special adviser to Rt Hon Alan Milburn MP as Health Secretary, is managing director of APCO Worldwide's London office.

None of these appointments is registered on the ACoBA website, in the latter two cases because the individuals were not senior enough in terms of pay and analogous grading in the civil service. David Hill did not have to go through ACoBA's process because he returned to the same employer from which he came into Crown service.

114.  John Grogan MP was uncomfortable with much of this:

There is a particular problem with multi-client lobbyists being seconded into government and then being seconded out. I feel uncomfortable with that. You can go and work in a minister's office for a couple of years and then you go back where you came from.[112]

Crown servants' prospects of future employment

115.  Lord Maclennan has in the past publicly stated his concern about the risk that when a civil servant is "contemplating a post-service move into the private sector the interest of the Department's client is more salient in the mind of the Crown servant than is the need to protect the public interest".[113] This is likely to be a particular risk in parts of the civil service with a history of employment moves into a particular sector or company. ACoBA has for example previously written of a "traffic" of personnel from the Ministry of Defence to the defence contractors who supply it.[114] Perhaps surprisingly in the light of this, we have learnt from the Cabinet Office that "no information is held centrally on trends in the employment of former civil servants, and there is no particular requirement on departments to collect data or undertake analyses on this."[115]

Procurement as an issue of particular concern

116.  The running theme in the cases which have caused ACoBA concern may not have been so much about the defence sector, as about the particular issue of public procurement. In particular, the sense of the cases examined by ACoBA is that they feel the public's greatest concern is that contracts are awarded in a fair manner. There appear to be two main concerns:

  • Insider information: the individual leaving the government may have access to knowledge which will unfairly advantage a bidding company; and
  • Undue influence over decision-making: the individual might either illicitly lobby themselves, or be able to point companies/clients in the direction of who to attempt to influence.

117.  While these are general concerns about any business appointment, they are particularly acute around procurement exercises because the amount of money may be so large. There is also a legal angle, in that influencing policymaking is rarely illegal, but influencing procurement decisions can be.

118.  Most of the examples cited by ACoBA were about defence procurement, but in the course of our inquiry we have also touched on several other areas of public suspicion about lobbying and the pursuit of public contracts:

  • NHS contracts: there appears to have been significant movement in both directions between the NHS and organisations bidding for contracts from individual trusts;
  • Policy on "supercasinos" was widely believed to be influenced heavily by an American "gambling lobby" driven by a desire to manage those casinos;
  • The nuclear industry, as mentioned above.[116]

Conclusion

119.  What emerges from this survey is that while the activities of lobbyists are scarcely regulated at all, there are a variety of ways in which the lobbied are subject to behavioural constraints and transparency requirements. These have developed piecemeal, however, and with different times and issues in mind. We therefore now go on to explore whether a more coherent approach is required.

120.  First, however, we look at what lessons can be learnt from the experiences of jurisdictions outside the United Kingdom.




41   Q 3 Back

42   Q 423 Back

43   House of Commons Resolution of 6 November 1995 Back

44   Q 400 [Peter Bingle] Back

45   Qq 419-420 Back

46   http://www.ingoaccountabilitycharter.org Back

47   Professor A.P. Pross, Lobbying: Models for Regulation, May 2007, p 33 (OECD Paper GOV/PGC/ETH(2007)4: henceforth cited as 'Pross') Back

48   Lobbyists: It's time for action, Public Affairs News, April 2007 Back

49   Pross, p 33 Back

50   Ev 137 Back

51   Ev 213 Back

52   Ev 204 Back

53   Q 491 [Eben Black] Back

54   Q 402 [Peter Bingle] Back

55   Ev 161 Back

56   Q 156 [Rod Cartwright] Back

57   Q 156 [Gill Morris] Back

58   Q 156 [Gill Morris] Back

59   As of 19 November 2008, no record of Morgan Allen Moore's clients could be found either on their own website or on that of the APPC. Back

60   http://www.appc.org.uk/appc/index.cfm/pcms/site.newsandevents.five_more_companies_joins_appc/ Back

61   Q 154 [Lionel Zetter] Back

62   Qq 155-156 [Lionel Zetter] Back

63   ASA Annual Report 2007 Back

64   www.pcc.org.uk Back

65   SRA Annual Report for 2006/07, p 11 Back

66   Ev 203 [DLA Piper] Back

67   Q 427 Back

68   PRCA Consultancy Management Standard Back

69   Ev 130  Back

70   Ev 127 Back

71   DfID FoI references F2006/83 and 103. DfT F0003554. Treasury (201207). Back

72   Treasury (201207) Back

73   DfID decision 14 January 2005; DTI decision 26 July 2005 Back

74   EA/2007/0072, paras 133-134 Back

75   Para 119 Back

76   List of Ministerial gifts received by Ministers valued over £140, 1 April 2007-31 March 2008, Cabinet Office, July 2008 Back

77   Qq 809-812 Back

78   Para 7.24 Back

79   Guidance from the House of Lords makes clear that "any queries about ministers' interests should be addressed to the relevant Government department". Back

80   Para 7.5 Back

81   Paragraph 4.3.5 Back

82   Q 811 Back

83   Ev 127 Back

84   Ev 132 Back

85   Public Administration Select Committee, Sixth Report of Session 2006-07, The Business Appointment Rules, HC 651 Back

86   Ibid. p 3

 Back

87   Minister of State for School Standards, Department for Education and Skills, 2004-05 Back

88   Secretary of State for Work and Pensions, 2005 Back

89   Advisory Committee on Business Appointments, Ninth Report, 2006-2008, p 19 Back

90   Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs, 2001-05 Back

91   Advisory Committee on Business Appointments, Ninth Report, 2006-2008, p 18 Back

92   See Advisory Committee on Business Appointments, Eighth Report, 2005-2006, p 14 Back

93   Ibid, p 16 Back

94   Advisory Committee on Business Appointments, Ninth Report, 2006-2008, p 20 Back

95   Q 544 Back

96   Q 624 Back

97   Q 242 Back

98   Public Administration Select Committee, Fourth Report of Session 2006-07, Ethics and Standards: The Regulation of Conduct in Public Life, HC 121-II, Ev 133 Back

99   Q 256 Back

100   Department for Transport, Response to FoI requests, October 2008, Correspondence between Stephen Ladyman and ITIS Holdings, http://www.dft.gov.uk/foi/responses/2008/oct/correspondence/ Back

101   Q 555; Ev 135 Back

102   Register of Members' Interests Back

103   Q 714 [John Sauven]; Ev 222 [Spinwatch] Back

104   Advisory Committee on Business Appointments, Ninth Report 2006-08, p 22 Back

105   Q 542 Back

106   Q 628 Back

107   Ev 135 Back

108   Ev 135 Back

109   Q 337 [Mike Granatt], Q 376 [Peter Bingle] Back

110   Ev 206 Back

111   Q 17 [Peter Luff] Back

112   Q 34 Back

113   Advisory Committee on Business Appointments, Seventh Report 2005-06, Annex E Back

114   Advisory Committee on Business Appointments. Sixth Report 2002-04, para 18 Back

115   Ev 128 Back

116   Paras 40-41 Back


 
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