Category Archives: UK Parliament

Were you up for Portillo (on lobbying)?

Last week, on the BBC’s This Week programme, former MP and memorable victim of the electorate’s wrath, Michael Portillo, spoke about the recent so-called lobbying scandal.

Since seeing it live – it’s on at about 11.30pm, putting off most viewers – I’ve watched it on BBC iPlayer many times. In about 90 seconds, he beautifully sums up the churlishness of portraying the recent stings on politicians as a scandal about lobbyists, even though none were involved. This is a point being made by many decent, integrity-driven public affairs practitioners, and one which is roundly ignored by the media.  [If anyone reading can tell me when the last lobbying scandal worthy of national media hysteria that actually did involve lobbyists was, please do let me know.]

But Portillo goes a step further even than that, expounding the crucial role that lobbying plays in politics. He goes so far to say that without lobbying, politics would not function. You can watch it here, 25 minutes into the show:  http://www.bbc.co.uk/iplayer/episode/b02w2wxt/This_Week_06_06_2013/

Or, if you can’t be bothered to click on it, or are simply unwilling to catch a glimpse of Andrew Neil in the presenter’s chair, here’s a transcript of what Portillo said:

“It’s perfectly clear that the things of which these people are accused would be offences. They would be against the rules and they would certainly lead to their expulsion from their parties and possibly suspension from Parliament, and so on. So it’s perfectly clear that the rules are already in place.

Secondly, it’s pretty clear that these people were all caught by a sting; in other words, there wasn’t a real lobbyist involved at all… So actually, creating a register has nothing to do with what’s just happened… If you create the register, you simply allow people to find our more easily, the people that are genuine lobbyists and those that are journalists.

But let me make a fundamental point: all politics rests upon lobbying. The principle rooms in Parliament are called lobbies. And the reason they exist is to allow the public to come into Parliament and visit their Members of Parliament, and they meet them in a place called a lobby, which is the origin of the term, and the interchange between the people who have interests, which need to be considered or even protected by Parliament and the people in Parliament, is fundamental to the democratic process. And since time immemorial, to smooth the interface between the public and the different vest interests, and the Members of Parliament, there have been people who undertake lobbying, and lobbying can be a very respectful thing, and without lobbying, politics wouldn’t function.”

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A house divided can stand

Abraham Lincoln quoted scripture when he said of the young United States, as it faced threats of seccession by southern slave-owning states, that a divided house cannot stand. He went on to defeat these threats in the bloodiest war the United States has ever endured.

The British government doesn’t face quite the same existential threat, thankfully. But the steady occurrence of divisive political issues keeps raising the spectre of the Coalition’s collapse.

Yesterday in Parliament we were treated to the bizarre spectacle of the Prime Minister, David Cameron’s, statement opposing much of the Leveson report on the press, being starkly contradicted by his Deputy, Nick Clegg, who supports it. Also in Parliament yesterday, we saw the Lib Dem energy secretary, Ed Davey, present his battle-scarred Energy Bill, with his wind-sceptic Tory junior, John Hayes, sitting behind him, glowering supportively.

We’ve also had, recently, the unceremonious ditching by the Conservatives of Lords reform advocated by the Lib Dems. As an eye for an eye, the Lib Dems have said that they will oppose the re-drawing of Parliamentary boundary changes that would have benefited their coalition partners.

Opposition MPs’ criticism that Lib Dem ministers who can’t abide by collective responsibility should resign is an obvious debating point. This ignores the fact that it is in the nature of governments to set precedents. And with the first peacetime coalition formed purely as a result of Parliament being hung, the nature of the government itself is unprecedented.

The rules of collective responsibility have been re-written. There will no doubt be more intra-Coalition spats in the months to come, but none of them will bring down the Coalition until one, or both, parties decides that it’s time to pull down the temple.

The Coalition may eventually reach the point where it falls apart, but my hunch is that this won’t happen until well into 2014 at the earliest. The reason is that both parties are wedded to austerity and need to be able to demonstrate that it has worked. The economy will need to have returned clearly to growth, or be showing credible signs that it will do so. Only then can they face the electorate and be able to tell them that the pain has been worth it.

We will then face the delicious irony that as soon as the Conservatives and Liberal Democrats can demonstrate that the Coalition has been successful, they might then decide to terminate it. Quite what the electorate will make of that, we will have to wait and see.

Chancellor confirms nothing new under The Sun

On Wednesday, the Chancellor of the ExchequerGeorge Osborne, fulfilled his constitutional duty by confirming the past few weeks’ media speculation on what changes there should be to tax rates and allowances and how they would be funded. This is known as The Budget.

Each year beginning in early March, we avidly read the papers to see what lies in store for us and on Budget day, the Chancellor confirms that he has read them too.

Of course, Chancellors always mange to pull some rabbits out of the hat and catch us by surprise with a gleeful “tah-dah!” Although pensioners might be thinking that the freezing of their tax allowance looks more like a poisonous snake than a fluffy white rabbit. If this group of voters were less steadfast in their voting allegiances, it might have more of ta-ta effect. The self-same well-briefed papers seem to think so and have branded it straight away as “Granny Tax”.

Pre-briefing (or spinning, if you prefer) of the Budget is not new. We can speculate how hard Charlie WhelanEd Balls and Alastair Campbell worked in advance of Budgets to secure the headlines they wanted. And this year’s process has been amplified by the dynamics of coalition politics. The well-informed press speculation has partly been a reflection of the internal negotiation between Conservative and Lib Dem ministers on what should be in the Budget and each party’s determination to show that they managed to put their stamp on the final package.

Speculation on the content of Budgets is not new and has always been driven by a combination of journalistic competition, political gossip and in recent decades, by politicians’ determined efforts to “manage” the media’s coverage.

It doesn’t always work, of course, and according to the Chancellor, the reason he is getting such bad headlines on the “Granny Tax” is because it was “the bit of news people didn’t have”. Shadow Treasury minister, Chris Leslie has said that the leaks were a “serious breach” and an “insult” to Parliament.

Chris Leslie’s criticism won’t hurt George Osborne, but as a mark of how far the conduct of politics has changed, just look at what happened to Labour’s first post-war Chancellor, Hugh Dalton, as described in meticulous detail in the late Ben Pimlott’s masterful biography of him.

As Dalton passed through central lobby on his way to deliver his 1947 Budget, he whispered a few of the budget details to a journalist on the Star, a London evening paper. The grateful recipient was able to phone through to his news desk just in time to catch the old Stop Press or “fudge” section of the paper before the presses started rolling. A few thousand copies ran with the line on gambling: “There will also be a tax on dogs and football pools, but not on horse racing.” Minutes later, the sub-editors removed the “will” and toned it down to “Also likely to be…”

The offending tip off appeared on the streets just 20 minutes before Dalton actually spoke in no more than 260 copies that were sold on Fleet Street, Middle Temple Lane and at a bus stop near Aldwych. Competing newspapers noticed it, brought it to the attention of suitably outraged opposition MPs, and an urgent Commons question was tabled the next day. Dalton defended himself as best he could but tendered his resignation that evening, as he believed that “one must always own up”.

Prime Minister Clement Attlee, possibly for a variety of reasons, accepted Dalton’s resignation, but stressed that “the principle of the inviolability of the Budget is of the highest importance and the discretion of the Chancellor of the Exchequer […] must be beyond question”.

The days of the inviolability of the Budget are long gone, but that can also mean that Chancellors’ “tah-dah!” moments are not always of their own planning.

A cautionary tale from the United States

The Financial Services Bill, which will abolish the Financial Services Authority and enact a new regulatory regime for financial services, is currently being considered at public bill committee stage in the House of Commons. But, as is the way with Bills in committee stage, it has all but disappeared from view.

However, sometimes public bill committee debates can shed some light on the finer points of legislation that escape debate in the more general second reading debates. The United Food and Commercial Workers (UFCW) union of North America has done us all a service by highlighting a loophole in the legislation that gives lighter touch regulation of some new banks (such as those run by supermarkets) compared to the established high street banking operators.

Under the legislation, the remit of the new regulators will automatically extend to bank holding companies but not to non-financial holding companies, eg retailers, that own banking subsidiaries. The Bill does give the Chancellor the power to extend by Order the regulation to new entrants like Tesco. But this begs the question put by shadow Treasury minister, Cathy Jamieson MP, “if a company is or wants to become a bank holding company, why should it not be regulated as such”?

This is a question that exercised US regulators and legislators in 2005 when ASDA owners, Wal-Mart, applied for a banking licence. The UFCW joined a coalition of bankers, the Federal Reserve and regulators in opposition. Even the then Federal Reserve Chairman, Alan Greenspan, called for the closing of the loophole in US law that allowed some commercial firms to open banks, on the grounds that the Federal Reserve would not have the power to oversee the parent company and banking subsidiary on a so-called “consolidated basis”. In the absence of such a power, he argued, commercial firms should not be allowed to enter banking. The Federal Deposit Insurance Corporation – a US supervisory body – imposed an unprecedented moratorium on applications for the type of licence that Wal-Mart sought, and bills were introduced in Congress to outlaw commercial firms from owning banks. Wal-Mart subsequently withdrew its application.

As Jamieson put it to the Financial Secretary to the Treasury, Mark Hoban MP: “Does this not represent a cautionary tale for us here in the UK?”

It begged a number of other questions that she put to Hoban:

  • Why has this exemption to regulation been made?
  • Is light touch regulation being offered in order to attract new entrants?
  • If it is necessary to regulate financial holding companies, why is it not necessary for non-financial ones? Are the risks different?
  • Under what circumstances and what criteria would an Order be made to extend regulation to non-financial groups?
  • If the regulation is not extended until after a problem has arisen, won’t that be too late?
  • What guarantees are there that new entrants with customers’ non-banking data won’t misuse that data or infringe people’s privacy?

In proposing amendments that would have automatically extend the new regulators’ remits to new entrants, Jamieson made it clear that no one is talking about telling supermarkets how to stock their shelves or airlines how to plan their routes. The regulators would only exercise their powers if they considered that a parent company’s actions or omissions could have a material or adverse effect on the regulated subsidiary. Regulators could require the parent to take or refrain from specific actions or compel it to provide information. This didn’t prevent Mark Hoban from joking that we wanted to avoid regulators intervening on the price of bread in Tesco or Sainsbury’s. Beyond that rather obvious joke, the minister didn’t have much by way of response or than to say that the proposed regulation represents a “proportionate power of intervention”.

The amendments were not pressed to a vote as Jamieson was probing Hoban to see if he accepted that there was a problem. His response to the debate (Hansard Financial Services Bill committee 8/3/12 columns 463-467) suggested that he didn’t and she promised to return to it in the future. This is a relatively small part of the Bill, but in terms of clarity, consumer confidence and protecting the taxpayer, every little helps. Now where have we heard that before?

Lobbyists: how to lose friends and alienate people

When Altitude was being formed as a company and we were discussing a name for the company, I jokingly suggested that we call ourselves Bill Pottinger, so that we might accidentally be invited to tender for work. Had we gone down that route, perhaps the public affairs industry would have been spared the embarrassment poured upon it by the ‘sting’ that takes up the first seven pages of today’s Independent.

Under-cover journalists from something called the ‘Bureau of Investigative Journalism’ invited ten London firms (not including Altitude) to pitch to a (fictitious) Uzbek organisation to promote its supposed interests. And, according to today’s report, Bell Pottinger employees made some rather staggering – and rather foolish – claims pertaining to their personal influence over members of the Government and Downing Street staff.

A few points immediately spring to mind…

1. After so many attempts by the press to dirty the reputation of lobbying, they seem finally to have succeeded in including some actual lobbyists in the story. Not fictitious ones acted by journalists to catch out politicians, nor businessmen with an interest in swaying political decisions but with nothing to do with the public affairs industry. No, this time they have actually caught out some real lobbyists. Well done the Independent – you’re the first paper to at least identify some lobbyists!

2. Let’s just re-read part of that story. Ten firms were approached for the fictitious work for the fictitious Uzbeks. Of those, two refused the work and three didn’t respond. Of the other four firms, there is no mention. Could it be that they – whisper it – acted ethically? Given the apparently scurrilous nature of the entire public affairs world, surely this is the newsworthy element!

3. And while I’m on that subject: I’ve written here before about how journalists are desperate to find a group in society on which to shift the focus of public disgust from the press itself. Yesterday, the Independent gave a curiously large amount of space to the establishment of The Journalism Foundation. The paper’s editor, Simon Kelner wrote:

“Journalism itself has had a bad press recently: here is a positive initiative that seeks to redress the balance and, whatever you may think when following the latest developments from the Leveson Inquiry, it’s in all our interests that, if nothing else, we keep monitoring those centres of power.”

Quite right too, Simon. Mud has been thrown and it has stuck, even on the holier-than-thou Indy, whose owner and financial backer, we discover in Kelner’s last paragraph (by which most people have stopped reading), are the founders of the Journalism Foundation.

Lo and behold, the day after the fanfare about this cuddly new Foundation – a new knight in shining armour to salvage the reputation of the press – we have an attempt to demonise the public affairs industry. Which compels me to quote Kelner again:

“…this skulduggery was practised only by a small minority, and one of the prices to be paid for having our vibrant and diverse press is occasional unruliness born of competition.”

He is referring, of course, to the press, not to the public affairs industry, which his newspaper today smeared with one broad brush. That’s a smart line in hypocrisy.

4. Some people – especially some of those who have worked within the circles of power but then faded away and perhaps feel resentment – really cannot help but boast in order to make themselves feel better about themselves. It happened before and it will happen again – it’s the frailty of the human ego. That doesn’t make the claims true.

5. The vast majority of the public affairs industry – represented in this instance by the unidentified firms that did NOT want to work for the shady outfit cobbled together for the Indy’s sting – whether members of industry associations or not, have long called for a regulatory code. This is because they have nothing to hide and want their industry respected for the legitimate role it plays in informing government policy.

It will be interesting to see how this story plays out. By 8.15am today, Twitter was flushed with comments on why this story wasn’t gaining more coverage on the BBC. I’m starting to hope that it escalates and is addressed at the highest levels because now that actual lobbyists are involved, it cannot be ignored.

Previously, I’ve defended my industry in the belief, gained through more than a decade’s experience in it, that the many, many people I’ve worked with are representative of the industry as a whole: honest, decent people who are open in their methods and who help their clients to open doors with their messages and arguments rather than their black books. Regretfully, I was wrong.

Let’s have a proper review of the industry, looking at how the bad apples may have smeared the reputation of the rest of public affairs (if, indeed, any actual wrong-doing took place). Without such a review or inquiry, it seems that the industry is destined to death by a thousand cuts, mainly inflicted by journalists trying to lift themselves from the bottom rung of the public’s ladder of disdain.

Boris throws a FIT

David Cameron must getting used to being sniped at by erstwhile allies. His Liberal Democrat coalition partners have made regular show of objecting to their own government’s plans on the NHS, tuition fees, repatriation of powers from the EU.

I suppose that comes with being in coalition. The junior partner will genuinely take a different view in some policy areas. It will also be looking to the next election and will feel the need to do something to preserve its vote. What better way than to set position yourself against particular policies, particularly if they are controversial.

This has also been Boris Johnson’s approach, almost since the moment he was first chosen as the Conservative Party candidate for London Mayor in September 2007. David Cameron, his nominal leader, acknowledged this when he launched his first mayoral election campaign, saying: “I don’t always agree with him, but I respect the fact that he’s absolutely his own man.”

Whether it was suggesting a one-off amnesty for illegal immigrants or proposing a new airport in the Thames estuary to replace Heathrow, Johnson has frequently pursued his own unique policy lines. Some issues, like the future of Heathrow are a legitimate concern of the Mayor. Others, like the UK’s approach to the EU are, to say the least, stretching it a bit.

This week, he has been at it again. In a letter to the Chancellor that somehow found its way into the press, he threw a hissy fit (or is that a hissy FIT?) and attacked the Government’s decision to halve the feed-in tariff (FIT) for solar photovoltaic electricity. He argued that this will “slowly suffocate the growth that this policy has so far encouraged.” In his letter, he writes that “While the government will argue that the costs of solar panels have reduced, the costs of inverters, stands and labour have not.”

Boris Johnson’s intervention comes on the eve of a Labour Party opposition day debate on support for the solar industry in the Commons on Wednesday and a mass rally in Parliament today. Ministers will come under pressure to justify the cuts to FITs. The solar power sector will find some relief that such a senior figure in the Conservative Party is taking its side and not just the Labour opposition.

Of course, Johnson is facing London’s voters in just over five months, and is looking for ways to portray himself as not the Government’s candidate. It will be tempting to take a cynical view Johnson’s support for solar power subsidy, but right now the industry needs all the support it can find.

Johnson may also be looking to elections much further in the future that would give him power over more than just bendy buses and pay-as-you-go bicycles. The trick for the industry is to keep his support over the long-term, that is, if it survives that long.

Political scandal? Time to kick the dog again…

Last year I blogged about lobbying, pointing out how the poor old lobbyist seems to be the end of the easy target in a political crisis, the dog that politicians and media go home and kick at the end of a bad day.

It seems that history is repeating itself and, once again, a lazy shortcut down the path to an unpopular but misunderstood cohort of practitioners of the supposedly ‘dark arts’ of lobbying is once again being beaten.

The scandal of Liam Fox’s friend Adam Werrity has predictably resulted in a call for tighter restrictions and regulations on lobbyists. This case is very similar to last year’s case on which I blogged – insofar as it hasn’t actually involved a bona fide lobbyist!

Proposals for a statutory register of lobbyists have long been supported within the public affairs industry, mainly because the industry has nothing to hide. In the recent case, it was Adam Werritty, who must surely have had no doubt that what he was doing was not wholly ethical or above board. In other words, he did have something to hide.

Being neither a lobbyist or in a position where he would have wanted to publicise his dubious activities, how on earth would a register of lobbyists have made a difference? Werritty would not have been required to be on the register – he’s not a lobbyist, he’s just a chancer of a businessman who abused the position of a friend. And even if he were a lobbyist it is unlikely that he would (a) register himself and put himself up for scrutiny or (b) given his clear lack of moral or ethical compunction, be swayed by any statutory requirement to register.

But once again, the whole saga provides two of the most abhorred sections of society – politicians and journalists – to take the moral high ground and kick the lobbying dog. Never let the facts get in the way of a good story, eh?