Do me a favour, don’t do me a favour

Just days before the latest lobbying scandal that didn’t involve lobbyists broke, the Financial Times, expressed concern about the so-called revolving door through which civil servants and ministers pass to join companies as lobbyists. The drift of it’s columnist, John Gapper, was that we should be worried that decisions could thus, be made on the basis of favours.

We should certainly concern ourselves with how government decisions are made, but as I argued in a letter to the FT earlier this week; if you want to influence government effectively, there is no substitute for having a credible, well-argued and factually-based proposal.

In case you missed it, here is the text of my letter:

Sir, I dont doubt that former civil servants, ex-ministers, or even the occasional former prime minister can help businesses to influence government policy (We should worry about the revolving door for jobs, Comment, May 30). However, regardless of the status of such advisers, government policy is not decided on the basis of special favours. If government policy or procurement decisions cannot be justified on policy or financial grounds, or for meeting stated political objectives, then the dispensers of these favours would very quickly be found out.

John Gappers lobbyist informant is perfectly correct; large businesses do not need favours, as they will be listened to anyway. I was a special adviser for seven years, and I would never have risked my position by giving out favours to anyone.

Any business, large or small, that wants to influence government decisions will find that there is no substitute for having a credible, well-argued and factually-based proposal. There is no mystery or black arts involved. Advisers add value by helping businesses to articulate their case clearly and effectively. If they do that, then there is no need for favours.

In other words: “Do me a favour; don’t do me a favour”.

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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.

‘Elf ‘n’ safety. ‘Oo needs it?

In recent years, health and safety has taken its place alongside the European Union as an easy target for populist political baiting and slaying of myths. We’ve all heard of the EU’s straight bananas, although I’ve yet to see one. Now we have ‘elf ‘n’ safety threatening our way of life. Schools have banned children from playing conkers and toothpicks are too lethal for restaurants to provide at the end of a meal, etc, etc…

Within weeks of the general election, former Tory business secretary, Lord Young, was appointed to carry out an initial review of what he called, our “music hall joke” health and safety legislation. Subsequently, a more sober approach was taken by Professor Ragnar Lofstedt of King’s College, London, who was appointed in March 2011 to carry out an independent review of health and safety regulations and to “identify opportunities to simplify the rules”.

Lofstedt reported in November and all of his recommendations were accepted by employment minister, Chris Grayling. These included exempting some self-employed people from compliance with safety law, a review of core safety law to see if some common requirements can be consolidated and simplification of the Health and Safety Executive’s 53 approved codes of practice.

He has now been commissioned to produce a follow-up “mini report” assessing progress made on implementing his original recommendations and looking at specific issues such as the Work At Height regulations, and consolidating regulations limited to specific sectors, such as construction.

Yet, despite the fact that we have a university professor supported by Department for Work Pensions officials and an advisory panel including a Conservative MP, the Chair of the Olympic Delivery Authority and a representative of the British Chambers of Commerce, the Prime Minister still felt the need earlier this year to refer to the “health and safety monster” that is hampering business growth.

Last week I attended the annual Health and Safety Expo at the National Exhibition Centre. I didn’t see any signs of a monster. What I did see were hundreds of businesses and professionals who view health and safety policy as a means of improving business efficiency by reducing workplace accidents, injuries and illnesses. They included everyone from suppliers of gloves, hard hats, goggles and lighting, to safety harnesses, scaffolding and hydraulic lifts.

None of them is seeking to be a burden on business. Rather, they are providing equipment and services whose ultimate aim is to reduce the real burden on business, arising from workplace deaths and injuries. In the past two years, 323 people have died in the workplace and in 2010/11 there were 24,726 major injuries to employees – more than 40 percent caused by slipping or tripping. Workplace injury accounted for 4.4 million working days lost.

It’s not about more regulation or legislation. As one industry representative put it in a seminar at the Health and Safety Expo, “Communication and training are just as important as regulations”.

According to the Institution of Occupational Safety and Health, by spending time and energy on getting health and safety management right, business could save nearly £8 billion annually, individuals more than £5 billion, and the economy as a whole £22 billion.

Health and safety; it’s a serious business, not a music hall joke.

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.

Autumn statement gives Lib Dems seven-year itch

George Osborne’s autumn statement generated a lot of discussion about its economic implications, with much gloom and foreboding. But it will also have significant implications for the politics of the coalition, particularly for the Liberal Democrats.

The coalition was founded on the basis of a fixed five-year term. It was coupled with a five-year economic strategy that would see the elimination of the UK’s structural deficit in time for an election in 2015. This all seemed like neat political and economic symmetry.

The Conservative Party took a deep breath and gave up the notion of governing on its own. The Liberal Democrats, grateful for their first experience of power in 90 years, clutched their garlic and joined forces with a political party whom many regarded as bitter enemies.

It would be a rough ride at times, as the Liberal Democrats found out over tuition fees, but it would be a five-year project at the end of which the two parties would go their separate ways and face the electorate.

But now the structural deficit will be with us until 2017. Thus, we now have a five-year coalition pursuing a seven-year economic strategy. The coalition parties cannot now plan to go to the country separately in 2015 claiming to have balanced the books. Treasury Chief Secretary and Lib Dem strategist, Danny Alexander, clearly grasps this, but his acknowledgement of the changed political dynamic is bringing out other Lib Dems in a rash.

Alexander appeared on BBC 2’s Newsnight following the autumn statement and said that the Liberal Democrats would fight the next election committed to the additional £15 billion of cuts in 2016 and 2017 that they had agreed with their Conservative coalition partners.

He said: “As a government we originally set out plans that would meet our targets a year early in 2014/15. But because of the way that economic circumstances have deteriorated we need to make this commitment for future years, so yes Liberal Democrats and Conservatives will work together in government to set out plans for those following two years and, of course, we will both be committed to delivering them.”

This caused consternation among some of his Lib Dem colleagues who are wary of being too closely allied to the Conservative Party. They are anxious to preserve their party’s independence and to go into the next election on a manifesto that is distinct and separate from the Conservatives.

We are all adjusting to coalition politics. All that Danny Alexander’s comments show is that he has adjusted better than some of his Lib Dem colleagues. It will be extremely difficult, not to say, implausible, for the Lib Dems to support an economic strategy that runs into the next Parliament, but cease to support it on the day that the next election is called.

As they enter the next election, both coalition parties will have to claim that their partnership has been a success. Having trumpeted the success of the coalition and tied it to an economic policy that will still have another two years to run, it will require fairly tortuous logic to tell the electorate that it must come to an end.

I wouldn’t bet against the next election producing another hung Parliament and another coalition. So Danny Alexander may well have put down a useful hedge that he can cash when negotiations for the next coalition open.

Of course both parties will stand on separate manifestos and fight their own election campaigns. We are some way from a repeat of Lloyd George’s and Bonar Law’s “coupon” election of 1918, when candidates who had the official support of the coalition were issued with letters of endorsement. But if we have entered a period of hung parliaments and coalitions, Danny Alexander will appear more astute than some of his Lib Dem colleagues are giving him credit for. The prospect of another five years in power could provide the balm to cure their itches.