Commercial Lobbyists (Registration and Code of Conduct) Bill

Debate between Mark Tami and James Duddridge

Friday 1st February 2013 Commons Chamber

[James Duddridge]

I am not desperately familiar with Unlock Democracy, but I remember the name and having a disagreement with it over policy substance, so I suspect that the organisation does not share my views in totality. I am not sure that it is effective to pray in aid that organisation, among others.

[Mark Tami (Alyn and Deeside) (Lab)]

As a point of interest, I understand that the organisation was born out of the Communist party and that it runs out of its old offices.

[James Duddridge]

I know that Labour Members have a deep background in socialist as well as Labour history, and I appreciate that some of them also have a deep background in and understanding of communist history, which certainly brings something to the House.

This debate has been well received. I was going to point out, slightly more aggressively, to the hon. Member for Dunfermline and West Fife that Labour did not undertake anything to deal with this problem in 13 years of government, but that is unnecessary because we are building a broad consensus. However, those 13 years, as opposed to the timely debate on this Bill and the proposed Government legislation, put in context the time it has taken this Government to come up with some details, particularly considering that we are mindful of wanting to do the right thing slowly, rather than the wrong thing quickly.

I want to outline the background to the situation. I am sure there are many other examples like Invicta, but I do not want to go into them. Members of Parliament need to be very careful when dealing with such organisations. I was particularly interested to hear about Invicta’s manipulation, for want of a better word, of the political process by putting up candidates. I would encourage the hon. Gentleman to look at whether Government or Opposition Members contribute to the Invicta magazine and consider whether it is appropriate to share that information.

The hon. Gentleman mentioned the Public Administration Committee, which produced an interesting report. It was kicked off in 2007 and published in January 2009, and the fact that it took so long is itself an indication that this is a complex subject. That is an exceptional amount of time to take over a report. I am not suggesting that the Committee was in any way tardy, but that this is a complicated subject and that the Committee took appropriate time to consider it.

The Committee identified five principles for the register of lobbying activity. The first is that it should be mandatory, and the report goes on to describe what that would mean. The report also says that

“it should cover all those outside the public sector”,

and defines exempt organisations, but even there we have to be careful. Under the previous Labour Government, commercial lobbyists were employed by quangos to lobby central Government. This Government feel that that is inappropriate for a financial reason. It may well also be inappropriate for reasons of transparency. If future Governments were to do as the previous Government did and used lobbyists to lobby other parts of the Government, surely they should be defined as being within rather than outside the public sector, so I disagree with the Committee in that respect, although the principle of defining people outside the public sector is a good one.

The Committee’s idea that the register

“should be managed and enforced by a body independent of both Government and lobbyists”

is also a good one. I reel with discomfort at the idea that the body should involve only lobbyists. It is important for corporate structure and governance to involve a wide range of people. I would encourage the body to include people not only from outside, but from within government, by which I mean from the civil service or, perhaps, the House of Commons, to give their perspective. One of the anecdotes used by the hon. Gentleman was that of someone roaming the corridors with a pass for one thing but lobbying on another. I do not think that anyone outside this place would envisage that type of problem, even if it is not too dissimilar from gaining entry to a tenement block. I think that a Member of Parliament, alongside a policy-related civil servant, would add an awful lot of value. When we set up these rules, we need to think about how a lobbyist or organisation would try to get round them. We have examples of organisations that have tried to get round the current best practices and rules and regulations.

The Committee also suggested that the register should include

“information of genuine potential value to the general public”.

Who should define that? I believe in open government and in the production of as much information as possible. Often, from the open-source viewpoint, the most valuable information produced is that whose value the Government have no idea about. It is for people outside this place and outside lobbying bodies to decide. I would be inclined to make the production of information as large as possible.

Earlier we debated who should be registered—whether it should be the body corporate or individuals. I was not convinced by the argument deployed by the hon. Member for Dunfermline and West Fife that things have been sufficiently thought through. The examples of the finance director or board lobbying at a more senior level and a secretary or someone who had non-contact time but who worked in public affairs were not considered adequately. The hon. Gentleman spoke of some Members of Parliament accepting meetings with organisations directly, rather than lobbyists. I must admit, however, that when I go through my invites I am much more inclined to meet someone with a solid business title, such as a chief executive, a finance director or a regional head of a business, than someone whose title relates to public affairs or corporate affairs. Inadvertently, I suppose I am pulling those individuals into the lobbying sphere. I would worry if this Bill progressed and the code of conduct remained as defined by the hon. Gentleman. That would make it less likely for those chief executives and business leaders to be prepared to lobby me, because they would need the protection of having to go on the register, which would be very costly. They could not be fleet of foot. I had a meeting arranged with a chief executive earlier this week to discuss an issue. They wanted to lobby me and I wanted to hear about their industry, but their plane was delayed. They are based overseas and, according to the method that has been described, could not have sent someone else if they had not been on the register.

I am also unsure about individual registration—giving a “get out of jail free” card to some of the senior management. If someone lower down the organisation who is not registered inadvertently or purposefully lobbies, who is responsible? Is it the most senior person in the company who is on the register? Is it the company’s chief executive? These are not insurmountable problems; they can be overcome, but there are a few issues with the Bill.

The Public Administration Committee also proposed that certain information would need to be provided by lobbyists and by the target of their lobbying, in order to abide by the principles. The information includes

“the names of the individuals carrying out lobbying activity and of any organisation employing or hiring them”.

When I looked at the job titles at a couple of lobbying organisations, I found them a little confusing. I understand the titles “account director” and “senior manager”, but a lot of organisations are proud to hire “consultants”. I am not sure whether that is because they do not have the critical mass required or because they bring in additional people for certain clients. However, it is essential that we look at the consultants who work through such organisations. That is particularly relevant to the planning example.

I am not convinced that publication every three months is sufficient, because a lot can happen in three months. From my experience of lobbying, although an issue may be long standing for those in the relevant industry, it can crop up quite quickly. For example, the House of Commons can have an Opposition day debate that is announced only 48 hours in advance. We will receive a plethora of publications, some of which are produced not by full-time employees, but by a so-called consultant—somebody on the lobby firm’s books—whom they phone up. Such consultants are often people who are well connected to this place and who could lever that relationship for the most nefarious of purposes.

--- Later in debate ---

[James Duddridge]

I fully understand the hon. Gentleman’s point. I can assure him unequivocally that I will not speak for anywhere near as long as he did. It is quite common in this place to have certain individuals—I shall not name them—shamelessly talking Bills out, but never before have I seen an hon. Member trying to talk out his own Bill. I ask him to intervene on me again if I get anywhere close to the length of his speech.

I will try to be brief, but there are a number of countries with really interesting examples. Just before I leave the subject of European Union, I want to point out that it has gone for a wide scope, yet it leaves out certain organisations, one category of which is described as “social partners”. I was not quite sure what social partners were, particularly in the light of the debate that we will have next Tuesday, but it turns out that they include trade unions and trade associations, both of which I would like to see included in the register. So if four or five companies in, say, the concrete industry had their own lobbying organisations, those organisations would have to be on the register, but if they spent the same money employing a trade association to do the same job, that trade association would not have to be on the register. That is absolutely bonkers, but it illustrates how the European Parliament has done what I fear the Bill might do, and what the Government might be tempted to do. I fear that, in the interest of trying to do the right thing, they might actually cause a lot more confusion and complexity. I could go on about the specific information requirements. An annual information update is required, yet I get the feeling that hon. Members think that a quarterly update is insufficient.

Turning to the regulations in the United States, I am amazed by their detail and complexity. They make the EU look almost lightweight in comparison.

[Mark Tami]

Will the hon. Gentleman give way?

[James Duddridge]

Yes; I look forward to hearing more information about the Communist party.

--- Later in debate ---

[Mark Tami]

I have nothing more to add on the Communist party at the moment. The hon. Gentleman has mentioned the US. Does he agree that its regulations go to ludicrous lengths? I understand, for instance, that people are not allowed to have a sit-down meal with a lobbyist, although they are allowed to eat finger food. They are not, however, allowed to eat that food with a fork, because that would constitute a meal. They also have to wear badges with an L on, to identify them as lobbyists. Does he think that that is going too far?

[James Duddridge]

The hon. Gentleman’s research into this subject is much greater than mine. The arrangements are even more ludicrous than I had thought. Even here in the UK we have some ludicrous examples. One person on the Greater London assembly has told me that, when they are invited out to lunch with someone who might be a friend but who might also be lobbying them, they look down the menu and pick whatever ensures that they stay below the threshold, simply to avoid the administrative hassle, rather than to avoid declaring the relationship. All sorts of odd scenarios come about because of the level of complexity in the regulations.

Gone are the days of companies being in just one jurisdiction. British companies already bear the burdens of EU requirements—I am not quite sure how—and of US regulations. These provisions would be an additional issue for them. They would not be incremental additions; they would create added complexity as all the different requirements were put together.

One area in which the Americans have got it right is setting out details of punishment for people who do not comply with the regulations. The Bill does not touch on that matter, and it has not been discussed today. Turning to neighbouring Canada, its first attempt to regulate lobbying was the Lobbyists Registration Act, which came into force in 1989. It was not the first such attempt in the world; I will come to the Australian example later, if time permits. That 1989 Act provided for the public registration of individuals paid to lobby public office holders. It covered consultant lobbyists, commercial in-house lobbyists and not-for-profit organisations. It is interesting that it included that last category; the Bill does not do so, and I think that that area needs much greater consideration, particularly as not-for-profit organisations sometimes have commercial arms that cross-subsidise their other work. The lines between each type of work are often unclear.

In Australia, the first attempt at regulating the lobbying industry was the lobbyist registration scheme of 1983. The scheme set up two confidential registers: one for lobbyists representing foreign clients and a general one for lobbyists representing domestic clients. It is fascinating to think about how that worked; I cannot really see the need for two registers. The scheme required lobbyists to apply to register each time they took on a client and to give a short description of the task undertaken. Although I like the idea of having ample information, I am concerned that some of it might be commercially sensitive. A lobbying organisation might want to speak to the Government and other people about a new product and how it would fit in within existing legislation, but might not want to give competitors an idea of what exactly is going on.

The Australian example—we should remember that this is the most long-standing example of a commercial register—becomes very interesting when it comes to the definition of a lobbyist. A lobbyist is defined as

“any person, company or organisation who conducts lobbying activities on behalf of a third party client or whose employees conduct lobbying activities on behalf of a third party client”.

The definition goes on, however, to state what is not included. This is something that I have said this Bill should do—exempt certain organisations from its scope. Priests were mentioned earlier, and religious organisations are exempt in this case, as are charitable organisations. However, there is a confusing reference to

“funds that are endorsed as deductible gift recipients”.

To be frank, I am not entirely sure what the implications are. An example that I had not thought of was

“members of trade delegations visiting Australia”.

If Australian Members of Parliament came to the UK to encourage us to invest more in Australia, would they have to register under the Bill? Clearly, there was an issue with delegations coming in to Australia, and I think we should look at the same point.

Before I conclude, I would like to mention some other organisations that have registers and some of the issues they face, as a way of probing some of the complexity and detail that surrounds any register. The General Dental Council, for example, is governed by the Dentists Act 1984, which provides for a criminal offence punishable by a fine of up to £5,000. This Bill, however, which is not self-regulatory, does not state what the fines will be or, indeed, whether there will be a criminal fine at all. Costs to the GDC are about £24 million, but we have had no indication of the cost of the commercial lobbyist register; nobody has provided any information. One of the weaknesses of private Members’ Bills, alongside their many benefits, is that there is no regulatory assessment and no clear statement of the burdens placed on businesses. It is clear in the case of this Bill that there will be significant costs. There are about 38,000 dentists, but no one has identified how many lobbyists there are, and this is particularly worrying given the lack of clarity over whether chief executives, finance directors or secretaries of public affairs departments need to register. The size of the register has not been considered.

Ofsted is another interesting example. A vast number of cases and concerns—whole processes—are at issue, including failing to comply with a register, but we have not probed or even touched on those points in this debate. If we allow this Bill to pass, I wonder whether we will be in Committee for ever.

I promised not to speak as long as the Bill’s promoter, the hon. Member for Dunfermline and West Fife, did. I congratulate him on securing the opportunity to debate this Bill today, which has been incredibly useful. I am sure that the Minister and her Department will have listened to the points that the hon. Gentleman and other colleagues have raised. Our debate should be informative and contribute to shaping the Government’s response to the more formal consultation. I urge the hon. Gentleman, now that he has listened to the debate, not to press for a vote, to withdraw his Bill and to seek reassurances from the Minister that the Government are taking the issues forward in a proper and timely way.