UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 137-v

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

PUBLIC ADMINISTRATION COMMITTEE

 

 

Lobbying

 

 

Thursday 6 March 2008

MR PETER BINGLE and MR MIKE GRANATT CB

MR RICHARD SCHOFIELD and MR EBEN BLACK

Evidence heard in Public Questions 333 - 541

 

 

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Oral Evidence

Taken before the Public Administration Committee

on Thursday 6 March 2008

Members present

Mr Gordon Prentice

Paul Flynn

David Heyes

Mr Ian Liddell-Grainger

Julie Morgan

Mr Charles Walker

Jenny Willott

________________

In the absence of the Chairman, Mr Prentice was called to the Chair.

 

Examination of Witnesses

Witnesses: Mr Peter Bingle, Chairman, Bell Pottinger Public Affairs, and Mr Mike Granatt CB, Partner, Luther Pendragon, gave evidence.

Q333 Chairman: Perhaps I could bring the Committee to order and welcome our two witnesses this morning, Mike Granatt and Peter Bingle. It is very good of you to give us your time to come along and help us in our inquiry into lobbying. As you know, there has not been a Parliamentary inquiry into lobbying since 1991 so we have a lot of ground to cover. Peter Bingle, you are Chairman of Bell Pottinger Public Affairs and you have been Chairman since January last year.

Mr Bingle: Yes.

Q334 Chairman: In the background material that I have been reading I see that your firm trains clients on how best to appear before Select Committees, so I expect a glittering performance from you. Mike Granatt, you are a senior consultant at Luther Pendragon but you were head of the Government Information and Communications Service for six years, I think, until 2003.

Mr Granatt: I think it was seven, sir.

Q335 Chairman: Both of you have a huge amount of experience to bring to bear on our inquiry and we are looking forward to the session very much indeed. Can I just get the ball rolling and ask you both if you are in fact lobbyists, and what we should understand by the term?

Mr Bingle: I am quite happy to say I am a lobbyist. I would define lobbying as seeking to persuade public policy in one way or the other. There is lobbying, there is public affairs, there is government relations. Lobbying: for example, if we are working on a particular Bill, we gave advice to some MPs on the International Development Bill pro bono, and that was to get that Bill passed. That is lobbying. Public affairs, I think, is wider. It is how a company is perceived by government and other stakeholders.

Q336 Chairman: You tell us that, in your view, lobbying should be seen as a force for good.

Mr Bingle: Yes.

Q337 Chairman: Fair enough. Mr Granatt, are you a lobbyist?

Mr Granatt: I think perhaps, in the widely understood term, we probably are, sir. We do not advocate on behalf of our clients generally. We generally advise them to advocate for themselves because we think that is much more effective. We advise them on how to do it. Very rarely, we do actually put a case forward for a client but I think in the wider sense of the term we probably are lobbyists.

Q338 Chairman: Why do the Speaker and the House of Commons Commission need lobbyists?

Mr Granatt: They hired me, sir, as a media adviser, not as a lobbyist.

Q339 Chairman: I see, and when was the contract given to Luther Pendragon?

Mr Granatt: May 2005, sir.

Q340 Chairman: Does Luther Pendragon still have a contract with the House of Commons Commission? I know you severed your connection with the client, if I can put it that way, but is the company still involved with the Speaker and the House of Commons Commission?

Mr Granatt: No, sir. I was the individual named in the contract to provide the service.

Q341 Chairman: You were. Do you feel very bitter or betrayed about what happened?

Mr Granatt: I feel very sad about what happened. Betrayal is a strong word. There are people who should have not let it happen. That is betrayal of a sense.

Q342 Chairman: You were misled and in turn you misled others. You misled the press, and you say in the public print that the Speaker did not mislead you, so who misled you?

Mr Granatt: I am sorry, sir. I am not prepared to go into details of names or places in respect of client business. It was not the Speaker and it was not, as it was put to me, Mrs Martin.

Q343 Chairman: It was not. But you feel that the record should have been corrected by someone after it appeared in the public print that the Speaker's wife was going shopping with the housekeeper and not with an official.

Mr Granatt: No, sir. I think that it should have been corrected before we said it.

Q344 Chairman: It should have been corrected before. Have you been in correspondence? I ask you all these questions, you see, because in the written material you have given us you place great store on ethical behaviour, playing it with a straight bat. That is why I am asking you these questions.

Mr Granatt: Of course.

Q345 Chairman: After you resigned, did you write to the House of Commons Commission expressing your concerns about what happened and asking them what they intended to do about it?

Mr Granatt: No, sir. I spoke to the Speaker before I announced the fact that I was standing down. I spoke to senior officials of the House.

Q346 Chairman: And that is it?

Mr Granatt: That is it.

Q347 Chairman: A line has been drawn under it?

Mr Granatt: Yes.

Q348 Chairman: Earlier, Mr Bingle, I quoted you as saying that lobbying was a force for good. Can you just give me a few examples so the Committee gets a flavour of campaigns that you have been involved in which had a beneficial outcome? Not a long list, just so we get a flavour.

Mr Bingle: I advised for ten years a campaign whose objective was to retain VAT at zero on newspapers, books and magazines. That was a campaign we won. We advised the institutional shareholders for Railtrack over getting compensation at £2.40 per share. That was successful. I could go through, but public affairs is ultimately to deliver for your clients an outcome that is successful.

Q349 Chairman: No, I ask the question because lobbying, public relations, can get a very bad press.

Mr Bingle: So we have seen, yes.

Q350 Chairman: I am giving you an opportunity to tell us the good things that you do.

Mr Bingle: In the past I have advised the Police Federation over the Sheehy inquiry-I think the outcome of that was beneficial to the Police Federation-and a whole range of issues in terms of financial services and others. We are retained by a client ultimately to give them a competitive advantage in their particular sector, and that is our job.

Q351 Chairman: That is fair enough. Mr Granatt, do you want to add anything?

Mr Granatt: No, sir, because you are asking for specific examples.

Q352 Chairman: Is lobbying/public relations always benign? Can it have malign effects? If so, give us some examples.

Mr Granatt: I think it should be benign in the sense that it should properly inform the public policy process. I think it can be malign if the activities of a lobbyist squeezed out other people's opinions or made a case that was strong but was not truthfully based.

Mr Bingle: We will turn down clients. We had a call from Zimbabwe asking us to advise Zimbabwe. We said, "Thank you very much but no." That would have been, I think, a very malign campaign if somebody had run it. We take every single day decisions whether what we are doing is right in the sense of whether it plays a part in the due process. My earlier point is that the debate in a way is about good lobbying versus bad lobbying and how it is done: is it done well and ultimately is it successful? That is the debate. Blurring lobbying and public affairs with PR[1] and communications, in a way, you are blurring what we do.

Q353 Chairman: I am blurring. It will become clear by the end of the session exactly what you do. Was Zimbabwe a one-off? Would you take a commission from the North Korean government, for example?

Mr Bingle: I would have thought not. What we do, often if we get a call from an overseas client, we would talk to the Foreign Office, take a view, look at whether or not actually we would want to work for that kind of country or a particular company. In the past we have fired clients; if we had clients we were working for we did not like, we did not like what they were doing in terms of using our name, we said, "Thank you very much and goodbye."

Q354 Chairman: Because your reputation is such you do not want to have it sullied?

Mr Bingle: The Bell Pottinger brand, I think, is very special; it is very blue chip, and it is our job to actually maintain it.

Chairman: Fair enough. Let me bring in some of my colleagues.

Q355 Mr Liddell-Grainger: Can I stick on ethical grounds. Can you give me an example of an ethical case that you have not taken up, both of you?

Mr Bingle: Zimbabwe.

Q356 Mr Liddell-Grainger: No, other ones than that, not a country. Something in this country-I do not know-foxhunting or something like that.

Mr Bingle: I am a Catholic. I could not work for a pro-abortion campaign. Whether my company did would be a matter for other people to determine. In terms of ethics, my view is quite straightforward. If there is a case to be made which is a legal case and that case has a right to be heard, in my view, as Bell Pottinger, we would probably be prepared to make that case.

Q357 Mr Liddell-Grainger: What about you, Mike?

Mr Granatt: I can think of two instances which I think fall inside your criteria. One was an approach by an overseas political party, which we felt was not-there was something else behind it. It was not open to us. We felt very uneasy about it, and we did not think we were being told the truth, so we turned them away. Another was a case where somebody came to us with a business proposition that they wanted to promote to the public which seemed to be along the lines of coercing people into a belief that was false, making them uneasy about something and then essentially saying "To protect yourself in these circumstances, take up our offer." That seemed to us to be wrong.

Q358 Mr Liddell-Grainger: Have you any examples of the second one?

Mr Granatt: To give you a precise example, sir, would tell you who it was and I do not want to do that. Let me try and do it generically, if I can. It was coercing people into believing that they needed to take out a form of insurance that actually was not necessary.

Q359 Mr Liddell-Grainger: Can I talk about ethical policies, coming back to you, Peter, about, say, General Pinochet? There was a furore when he came over here. He was arrested and it all went wrong. Were you looking after him at that time?

Mr Bingle: No. Bell Pottinger Public Affairs tends to deal with things like financial services and public policy in the UK. We are part of a wider group and that wider group does advise presidents, countries, overseas companies, but not Bell Pottinger Public Affairs.

Q360 Mr Liddell-Grainger: Is Pinochet part of your---

Mr Bingle: He is dead.

Q361 Mr Liddell-Grainger: No, but his family or anything like that? You do nothing. You do not do anything for that family at all?

Mr Bingle: In Bell Pottinger Public Affairs, no.

Q362 Mr Liddell-Grainger: What about Mark Thatcher? Are you still looking after him?

Mr Bingle: We do not tend to deal with individuals. We tend to deal with PLCs, FTSE 100 companies. We do not tend to deal with personalities.

Q363 Mr Liddell-Grainger: Are you working for Syria or Saudi Arabia?

Mr Bingle: At the moment Bell Pottinger Public Affairs is working for neither Syria nor Saudi Arabia.

Q364 Mr Liddell-Grainger: What other countries are you working for at the moment?

Mr Bingle: We have a small piece of work with the Embassy for Japan in London and one of my colleagues is currently out in Abu Dhabi. That is it.

Q365 Mr Liddell-Grainger: If you were looking at somewhere like Syria, where there are obviously connotations over international events that are going on over and above what we are looking at, would you turn Syria down? You would speak to the Foreign Office, the foreign office would say, "Hm, not so sure about this."

Mr Bingle: What would happen probably with an overseas country, they would come to a different part of Bell Pottinger. We are the public affairs company. We are not Bell Pottinger Sans Frontières. I am not Lord Bell. We tend to deal with UK-based policy, UK-based public policy, so we can go down this track but I will keep bringing you back to the fact that we tend to deal with the Parliament in the UK.

Q366 Mr Liddell-Grainger: You have an American arm. They have a different way of lobbying out there. We have been to America to talk about lobbying, as you are well aware, and it was very interesting indeed. They have to declare a lot more. If your American arm said they were unhappy, "We are getting it in the neck from Congress and the Senate that you are looking after somebody," as a British company, would you then say, "Right, we had better drop that because the Americans are pressurising"?

Mr Bingle: That would go to his Lordship. Tim would take a view. It would not be me. This path might not be very fruitful for you.

Q367 Mr Liddell-Grainger: In other words, you would say, "Right, okay, come on, we are getting pressure from the Americans, my lord. Yes or no?"

Mr Bingle: We tend to deal with things like home credit insurance, private equity, that sort of thing. We do not tend to deal with world affairs. We are a public affairs company in the UK. We are not sort of global domination.

Q368 Mr Liddell-Grainger: You are really, because you will look after anybody, will you not?

Mr Bingle: No, not true.

Q369 Mr Liddell-Grainger: Mike, can I come to you on this? The wider scope of lobbying is to try and, as you have said, achieve what you want for your clients, within parameters. Your bosses will say to you, "Look, we are not very sure about something." Have you ever gone back and said, "No, we think this is a good idea. We are going to go with it"? You have worked in the very heart of government, you have been in front of this Committee before on another issue, and you know how government works better than anybody.

Mr Granatt: Let me give you a clear example. I did actually do some work in Syria. I supported some work for the wife of President Assad, who was running a youth employment scheme, a scheme to try and improve the employability of young people in Syria to reform the economy. It is an issue I was working with in partnership with somebody else. I went back to my partners in the company and said, "This is the sort of work we are being offered. Have you any objections?" We discussed it and they did not, and indeed, we were encouraged and briefed by the British Ambassador in Syria.

Q370 Mr Liddell-Grainger: Have you ever, rather like a colleague you probably did not work with, who has just gone into the public sector from government, offered meetings with ministers, Secretaries of State or senior ministers?

Mr Granatt: To clients? No.

Q371 Mr Liddell-Grainger: Do you think that is right? Is that ethical? There has been a very high-profile case recently, as you are well aware.

Mr Granatt: I think to claim special access and I think to say you can get something done for a client because you have special access is wrong. The essence of the argument about lobbying is, are you actually doing something to contribute to the public policy process or are you distorting it? To my mind, offering a meeting with a Minister, and thereby implying that you will get some great change in place, is probably wrong if you have particular access. I also happen to think it is not very useful. If you really want to get involved with the public policy process, you talk to MPs and you talk to the officials in the Department who are actually putting together the advice, because that is where it makes an impact. I think most ministers are grown-up enough to know that an approach by somebody because they are who they are has to be looked at rather carefully.

Q372 Mr Liddell-Grainger: Ministers themselves like to get information. We are all curious people. That is why we are MPs. You do like to get people to brief you correctly, and the same goes all around this table. Therefore, what you are saying is that, although you do not like it, it does happen.

Mr Granatt: I am sure people do it. I am sure people do arrange meetings with ministers.

Q373 Mr Liddell-Grainger: But if you were asked by your company-because you have had enormous access at the highest level-let us be honest-and it is well documented. If your company came to you and said, "Look, we want you to get hold of a Minister. We want you to get us special access," you could probably do it because of your background and the knowledge you have. Would you do it?

Mr Granatt: If I thought it was a proper thing to do, that it was something that would not cause a problem for the client or for the Minister or for the process, I might well suggest a way in which it could be done. I think to do it merely for the sake of doing it, to show how clever we are, would be wrong. I think it would probably attract suspicion from the Department concerned, it might well attract suspicion from the Minister, and it would certainly attract the suspicion of other people that we were doing something outside the bounds of proper activity.

Chairman: You do not want to do a Derek Draper.

Q374 Mr Liddell-Grainger: There is an ethical line here which you seem to go on either side of, and in your own mind you think it should not be allowed.

Mr Granatt: I think it is very difficult to say you should not allow something just like that. I think there are bounds to what you should properly do. I think if a Minister's office was in the business of listening directly to people on an issue and was inviting people to come in, or you would be in a position of not getting something that somebody else could not get, I think it might be proper. I think to say something should never be allowed is silly because, as you say, ministers are entitled to take advice from wherever they can. I think, for example, buttonholing a Minister walking through the atrium of this building would be quite wrong.

Q375 Mr Liddell-Grainger: You could certainly do that because a Minister by and large would know who you are if you were sitting out there and saw so-and-so.

Mr Granatt: It is entirely possible. I think the controversy that surrounds this, the inequity that is seen in that particular circumstance, particularly other people who have perfectly legitimate positions on that, would put you in the wrong.

Q376 Mr Liddell-Grainger: Do you agree with that, Peter?

Mr Bingle: I have a different view, I suppose. My view is that if one goes back to 1995 to now, one of the changes has been the links between business and government. This Government has probably been the most open government I have known and I go back in this job to 1981. I have never known a government that has been so willing to talk to and involve business. Part of that involves CEOs[2] talking to members of the Cabinet and ministers, and that is a perfectly legitimate thing for them to do. That by itself achieves nothing because where Mike is right is it is the civil servants, it is the NGOs,[3] it is Select Committees, it is whatever, but actually there is a role. We do not advocate a view to a Minister on a client's behalf; a client is their own best advocate, but ultimately, it is important that senior ministers hear directly from business how life is, both here and internationally, in a particular sector. A lot of our work is encouraging dialogue between government and business at the very highest level. That seems to me an essential part of our work.

Q377 Chairman: So you are just facilitators.

Mr Bingle: To be fair, the impression that is given is of a black art.

Q378 Chairman: That was not derogatory.

Mr Bingle: You pick up the phone, you ring the diary secretary and the Minister will say "Yes, please come and see me next Thursday at half past two." That happens all the time and that is a perfectly good thing to do.

Q379 Mr Liddell-Grainger: So basically, you are opening the doors at whatever level and providing---

Mr Bingle: No, we are not opening the doors. We are giving advice to clients as to what they must do ultimately to achieve what they want to achieve. If that involves meeting a Minister, that is fine. If it involves meeting an all-party group, if it involves meeting MPs with a particular interest, that is fine.

Mr Liddell-Grainger: Opening doors.

Q380 Chairman: That was helpful. You advised McDonald's at the height of the BSE crisis, did you not?

Mr Bingle: We did.

Q381 Paul Flynn: Can I confirm you have in the past worked for General Pinochet, Thaksin Shinawatra, Mark Thatcher, BAE Systems, the South African National Party, Boris Berezovsky and the governments of Saudi Arabia, Syria and Iraq? You say you do not want to sully your reputation. What reputation?

Mr Bingle: We also advised Newport Council when it became a city, a good campaign that was successful.

Q382 Paul Flynn: Against my advice, may I say.

Mr Bingle: But it worked brilliantly.

Q383 Paul Flynn: That is what your claim is. I will not be diverted into that. You mentioned the pro bono things you do, the nano-proportion of your work that that probably is, but your work is to further advantage the already advantaged.

Mr Bingle: We are giving our skill; our objective is to give commercial advantage to our clients, yes, like lawyers, accountants and bankers.

Q384 Paul Flynn: Mr Granatt, what attracted you to lobbying?

Mr Granatt: I did not join the company, sir, to be a lobbyist. I joined it because my speciality is basically things like crisis management and strategic advice. I was not attracted to being a lobbyist and I did not join the company as a lobbyist.

Q385 Paul Flynn: You have left the civil service, where you held very high office. When the final obituary is written to Mr Granatt, what would you like to see at the top? Your work as a lobbyist or your work as a public servant?

Mr Granatt: I think my work as a public servant, sir.

Q386 Paul Flynn: So why are you a lobbyist now? What was the attraction?

Mr Granatt: Earning a living seemed to be a rather good idea.

Q387 Paul Flynn: Is it a handsome living compared with the civil service? How would you compare it? I do not want you to give us your pay rate but just give us some idea. It is crucial to our work.

Mr Granatt: I think it is essentially equivalent.

Q388 Paul Flynn: So there was no major attraction, unlike some others who have come to lobby or which we know in America, where there are huge sums of money?

Mr Granatt: It was not for the money, sir. I actually wanted to continue to earn a living. I am serious about that. Secondly, this is an organisation, a company, that offered me the chance to do much of what I had been doing before.

Q389 Paul Flynn: If the Government brought in a law to make it obligatory for your firms to announce who their clients were, how would you react?

Mr Bingle: If it is the law, it is the law.

Q390 Paul Flynn: And you would co-operate with that?

Mr Bingle: We disclose 99% of our clients. Most of our clients are on our website today. Occasionally, clients will ask us to sign a nondisclosure agreement if there is a commercial situation in terms of a potential bid where it would be unwise, but the crucial point over disclosure is that, even if we are working for a client whose name is not public, when my staff deal with government advisers, civil servants, ministers, they will say on whose behalf they are calling. The issue is simply whether or not we put their name on a public website. In terms of interaction with yourselves and government advisers, we will always say on whose behalf we are calling.

Q391 Paul Flynn: Do you think you have a commercial advantage by not belonging to any of the three associations that have certain minimum standards for lobbyists?

Mr Bingle: If it is the view that we are the largest company in this sector, it would seem not. We have had a consistent view. We agree with everything in the various codes apart from one thing: we are not prepared to join the APPC[4] and then break the rule by saying we will declare all clients when we cannot. I would rather be honest and upfront and say we support the code apart from one issue. We do not pay MPs, we do not pay peers. Everything in the codes we support. All of my staff are members of the CIPR.[5] That code is very stringent, quite Draconian, and that is a condition of employment. From my point of view, Mr Flynn, everything we need to do in terms of disclosure we do.

Q392 Paul Flynn: Do you not think the public have a right to know...

Mr Bingle: No.

Q393 Paul Flynn: ...who is lining the pockets of people who are advocating cases?

Mr Bingle: I think the tone of the question suggests the answer. No, I do not. The public has no right to know who our clients are.

Q394 Paul Flynn: You are arguing for large contracts and so on. They might have repercussions later on. You might have ministers or former ministers through the revolving door who might be working for you. Do you have former ministers or former special advisers working for you now?

Mr Bingle: I have one former specialist adviser, Jonathan Caine, who was an adviser to Sir Patrick Mayhew in Northern Ireland.

Q395 Paul Flynn: We have cases, if I can interrupt you there, where ministers have been involved in awarding contracts between companies A, B and C, and then, remarkably, within a year or so after stepping down as ministers, finding themselves working for those companies. There might be a doubt that those ministers might well have been influenced in their decisions by their future prospects of riches.

Mr Bingle: You are describing a world I do not know. I have been doing this for 27 years and my view of advisers, politicians and ministers who I have dealt with-I have a high regard for them. I do not believe politicians act in that way.

Q396 Paul Flynn: We have heard this before. I presume this is from your book of how to address a committee, by praising the Labour Government and praising the wonderful things that we are. You will tell us what a wonderful Committee this is in your next sentence. What is the attraction in employing special advisers? What do they bring to you? Is it contacts that is the main advantage?

Mr Bingle: My earlier point is that the idea that public affairs people are required to pick up the phone and speak to a Minister's office, anybody can do it. In the past there may have been the attempt to create a little black book, the black art of lobbying. The reality is to arrange a meeting between a client and a Minister is one phone call, and on the basis of the company concerned, often they do it themselves. We may say who they should meet. Often they do it themselves. The advantage of employing people with knowledge of politics-in fact I actually employed John Grogan's former special adviser.

Q397 Paul Flynn: Mr Granatt, you started work at Luther in March 2004 but you were banned from lobbying until 2005. What did you do for the company in that period?

Mr Granatt: I did what I joined them to do, sir. I exercised my expertise as somebody who deals with strategic communication and things like crisis management.

Q398 Paul Flynn: What miraculous thing happened in 2005 that made it possible for you to lobby when it was thought to be in the public interest that you could not lobby in the nine months before that?

Mr Granatt: I am entirely unclear about what happened at that point.

Q399 Paul Flynn: Was your memory washed out? Did you forget all your contacts? What was the purpose of that? Should it not be a lifetime ban? If people have information like that, should they not be told that they have had their careers in the civil service and high office and they should not go around and hawk the information and contacts they have to lobbying organisations?

Mr Granatt: I think there are two points there, sir. One is that the rules are laid down by the people you had before you, the people who run the committee on business interests. It is there to prevent the fact that somebody can suddenly let contracts one day and then leave the civil service or the armed services and join that company the next day. I think that is a perfectly understandable restriction. I do not see any reason why I should not be allowed to ply my trade as an individual outside the civil service when I have plied it inside the civil service, if I do it against certain standards. I did find the idea that I could not lobby until March 2005 slightly odd because I could not work out what it meant.

Q400 Paul Flynn: Mr Bingle, you have given us an example of your principled stand as a Roman Catholic, that you would not yourself be involved in advocating abortion, but you work for a company that would do that and this is an accommodation you make, presumably. How many other accommodations do you make on principle?

Mr Bingle: I am running a business, and every day in terms of our dealings between business and government all of my staff have to make sure they react in a way that reflects well on my company and the brand. In terms of how they behave, that is governed ultimately by the CIPR code. If they were to break that code, if there were to be a complaint against them, if the CIPR asked them to leave, I would have to get rid of them. My view is that day in, day out, I have 32 people who are acting professionally, with ethics and integrity and doing a very good job.

Q401 Chairman: There are an awful lot of acronyms flying around, are there not? You mentioned earlier the APPC, the Association of Professional Political Consultants-is that right? In an article that you wrote you said you wished they ceased to exist. So you feel quite strongly about some of those umbrella organisations in the industry, do you not?

Mr Bingle: I was a member of the APPC for 18 months working at a previous company. I just think there had been an attempt to create almost a closed shop whereby only by membership of the APPC or other bodies is there a label that you are a good, ethical, professional company. I do not accept that.

Q402 Chairman: I get the impression you think of them like a dose of anthrax; it is not good for the industry.

Mr Bingle: There are very good members within the APPC. I just happen to feel it has failed as a body.

Q403 Chairman: Can I just pick up briefly the point about transparency that Paul touched on. One of our colleagues, John Grogan, reminded us when he was before the Committee that Bell Pottinger had as clients the National Federation of SubPostmasters and also the Royal Mail. Would it not help if there were greater transparency so that people could see or form a view if there were a conflict of interest because you were representing clients with diverse interests?

Mr Bingle: The SubPostmasters had been a long-term client of Bell Pottinger. We were then approached by the Royal Mail, they knew we worked for the SubPostmasters, the SubPostmasters knew we worked for the Royal Mail and were perfectly happy. In a previous life a company I was working with was advising the Police Federation and the Bar Council at the same time. Both knew about it and both were happy.

Q404 Chairman: It sounds totally schizophrenic to me, but you can manage it?

Mr Bingle: The Chinese walls come into place.

Chairman: We will ask you about Chinese walls later.

Q405 Julie Morgan: Mr Bingle, you said that if the law said you had to declare your clients, you would declare your clients.

Mr Bingle: Of course.

Q406 Julie Morgan: You have been giving answers to the Chairman about how you can manage this situation, but you do not want to declare your clients so, if you had to, what are the difficulties you foresee?

Mr Bingle: If you were to look at our website this morning, every few minutes up come two more clients with examples of our work for them. Ninety-nine point nine-nine per cent of our client base is public. In fact, most of our clients, when we win them, are very happy to have a press release in the local trade papers stating that we have been appointed. Occasionally we are asked by a client not to make our appointment public, which we respect, but my earlier point applies. Even if client A says to us "Do not make public on your website that we are a client of yours", when dealing with government, our consultants will say to a civil servant "I am calling from Bell Pottinger on behalf of [that company]." So all we are talking about is whether or not on a public website we have to reveal all our clients. In our day-to-day dealings with government we are always open about every single one of our clients.

Q407 Julie Morgan: Are the only clients not on the website clients who have asked you not to reveal them?

Mr Bingle: Yes.

Q408 Julie Morgan: You do not not reveal any clients because you feel they may embarrass you?

Mr Bingle: It is interesting. Sometimes one pitches for a piece of business and you know that you are up against companies who are members of the APPC, but you also know that if you were to win that piece of business that client would not allow you to make public an appointment, so I would be interested in how a member of the APPC in that scenario deals with it.

Q409 Julie Morgan: The Chairman also referred to Chinese walls between clients. Could you say how you manage that situation?

Mr Bingle: I think one of the advantages of being 30-strong means that one gets separate account teams. So if you are working for two clients who have an actual or perceived conflict of interest, what we will do is make sure that there are two account teams. It is possible by IT to protect the information on the computer systems so that only members of the account team have access to that information. In the context of a conflict of interest, let us assume we are advising company A, we are approached by company B, potentially a client with a conflict of interest. We will tell company A first of all, the current client, we have been approached by a potential conflict. If they say that is fine, we will then speak to company B and explain about company A. If company A says to us at the start "Sorry, that's a conflict," we would go no further. It sounds like The Mikado!

Q410 Julie Morgan: So when company B applies, do they at that point know company A is your client?

Mr Bingle: Yes. We believe that this is a long-term business about relationships, trust and respect. We will do nothing in the short term which in the end, ultimately, would undermine our reputation among politicians and the business community. If we are working for a current company and we are approached by a competitor, we will tell our current client we have been approached. If they say it is okay to talk to the competitor, we will do so, but we will tell the competitor we have a conflict already.

Q411 Julie Morgan: Has this ever caused any difficulties?

Mr Bingle: Sometimes. I can think of recent examples in the energy field where, because we have a current client, we have not been able to take on quite lucrative additional work simply because we are not prepared to have a conflict that our current client does not like.

Q412 Julie Morgan: So you have refused work?

Mr Bingle: Yes, absolutely.

Q413 Julie Morgan: Because it would compromise your present client?

Mr Bingle: In this business reputation is all. If we are not respected by our peers, by business and by government, we cannot operate. Taking on a conflict which would damage us could be very, very damaging to us.

Q414 Julie Morgan: Do you feel you have ever been damaged by any clients you have taken on?

Mr Bingle: I am proud of my client list. We had a client two years ago who were using our name inappropriately. They were fired by me on the phone because we are not prepared to have our name sullied.

Q415 Julie Morgan: Do you think you have ever done anything unethical as a firm?

Mr Bingle: I have been there seven years. I have known Lord Bell many, many years and I do not believe that Tim would allow us to do anything that was not appropriate. We have high standards. That is why we are the largest company in the industry.

Q416 Julie Morgan: I wondered, Mr Granatt, whether you could say the difference that you find in the ethics, having come from the public sector and coming to work in a different scene.

Mr Granatt: I think in terms of the importance to the organisation you work for, nothing, because it comes down to reputation. Not sullying the reputation of government and not sullying its credibility is as important to government as not sullying your reputation or credibility is to a private company. In that sense, it is just as important to have a set of rules by which you work and to stick by them. In that sense, yes. I think there are differences, of course, between what government does, because it is working for the public as a whole, and what a private company does.

Q417 Julie Morgan: Did you find it relatively easy to move between the two sectors?

Mr Granatt: Yes, in the sense that it was not particularly painful. I think it took me some time to work out how relationships worked and what clients expected of you. It is quite different from working for one organisation, a government department, or indeed one single company, than working for a number of different clients where you may have differences of interest, differences of priority, differences of pressure.

Q418 Julie Morgan: But did you feel there was anything different about the ethics?

Mr Granatt: I have found that the people I work with in the company I work with, Luther Pendragon, are very clear that they want to be seen to be abiding by rules because it is good for them and it is good for the business that we do. They are very interested in making sure that people understand that they work to standards.

Mr Bingle: I was a councillor in my youth for eight years and having seen the other side in terms of public service, officers, councillors, and now doing this job, reputation is reputation whether you are in the public sector, local government or the private sector.

Q419 Chairman: Mr Granatt, your company has its own code, does it not?

Mr Granatt: Yes.

Q420 Chairman: The Luther Code. Is that more ethical than the other codes?

Mr Granatt: It is more comprehensive. The code that we operate is based on the CIPR code.

Q421 Chairman: That is the Chartered Institute of Public Relations.

Mr Granatt: That deals, for instance, with all of the stakeholders involved, not just one set of stakeholders. The particular example I am thinking of is that the CIPR code deals with, for example, client confidentiality. The APPC code does not.

Paul Flynn: It seems to me significant that you did not say that your company is abiding by the rules; you said your company is keen to be seen to be abiding by the rules. Is that significant? This messianic vision that you have of yourself and the man you referred to as "his Lordship", you admitted to employing people who are mass murderers, who are racialists, who have oppressed their own people.

Mr Walker: And your Prime Minister talks to them on a regular basis and rolls out the red carpet.

Paul Flynn: I am just saying, do you see yourself as a principled operation when you have taken on some of the worst people in the world as your clients?

Mr Walker: Who are regularly entertained at Number 10 by Gordon Brown.

Q422 Chairman: Can I ask what I was going to ask?

Mr Bingle: Thank you, Chairman.

Q423 Chairman: It makes great television, but on this central question of client confidentiality, this is one of the things we are looking at because there must be regimes elsewhere in the "developed world" where companies such as yours publish the client lists. John Grogan, a colleague who has spent a long time looking at lobbying issues, said this: an absolutely essential and non-negotiable part of any decent system of self-regulation-and that is what we are talking about, self-regulation, the Luther code and all that-for consultancies engaged in public affairs work is the public declaration of all client and employee names. Mr Granatt, what is wrong with that?

Mr Granatt: I think if a client does not wish to be named in public, sir, I see no reason why they should be named in public. They are entitled to their privacy.

Q424 Chairman: Are there instances elsewhere in the world where there is complete disclosure?

Mr Granatt: Truthfully, sir, I do not know.

Q425 Chairman: Goodness me! You are involved in this business. You must know what happens in, say, Canada, where there is regulation, or the United States.

Mr Granatt: Sir, if I knew, I would tell you, but I do not know. I have not studied elsewhere. I have studied what we do in this country and I have studied the circumstances of this country but I cannot say to you I have studied comprehensively what happens elsewhere in the world.

Q426 Chairman: You would have to wait until you got a client from Canada or the United States or Australia.

Mr Granatt: We have clients from the United States. You asked me a specific question and the truth is I do not know.

Q427 Chairman: On something as fundamental as this-I am sorry to press this point-I am not springing something on you that you could not possibly have thought about before, and you cannot give an answer.

Mr Granatt: The answer I gave you, sir, is the only answer I can. You asked me across the world what the position is. The answer is I do not know. I am sure there are places where there is full disclosure and I am sure there are places where there is not. I am also 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.

Chairman: It is a slippery business, is it not? Goodness me!

Q428 Jenny Willott: I want to ask you some questions more about what regulation there could be in the UK. First, you talk about the APPC being a closed shop. There are plenty of other parts of society in Britain where you have one regulator. If you are going to put in a gas appliance, you have to get somebody who is CORGI-registered. If you are going to be a solicitor, you have to be registered both with the Law Society and now the Solicitors Regulation Authority and so on. There are plenty of areas where actually there is one regulator that you have to sign up to if you are going to operate. What makes public affairs and lobbying different so that that rule should not apply?

Mr Bingle: I thought what was interesting in your first session was when Stephen Pound was saying it is for Parliament to work out how you want to engage with us, and then when you come to a decision about that, we can then obviously deal with it. In the context of the APPC, there was a recent survey which showed that for in-house public affairs people actually appoint people like me. Five per cent of those people thought the APPC was an issue. There is a danger that we all take this terribly seriously but to the rest of the world, they do not sit at home thinking about whether I should be declaring my clients on the website. It is much more about how we behave day in, day out with the Government. My concern with the APPC is how they have behaved over the last few years. The PRCA,[6] the director, Francis, is extremely good. The CIPR are extremely good. We have no problem with their codes, with one exception, which is the issue of having to declare all clients. Because we could not keep to that particular part of the code, we would rather say, "Hands up, we will not join you. We do not want to lie", rather than do what Mike said, which is just trade the company in two and hide conflicts and therefore not declare what we are doing. All of my team are on our website; every single member of staff is on the website; their background is on the website. It is entirely open. We are simply talking about whether or not every client should be on a public website. Our answer is 99% of them are. Occasionally they say "Don't" and we say, "That is fine." That is the debate: whether or not I put all of my clients on the website. I do not think that defines what kind of company we are.

Q429 Jenny Willott: If everyone were forced to sign up to disclosure, if all companies had to do that, clients would then have the option of either having their names made public or not paying a lobbying company. What would be the problem with that?

Mr Bingle: Most clients are happy for their names to be made public. We press release 95% of our wins and they are pleased because it gives the impression "We are doing really well and people can be appointed by us." We are keen to be out there telling the world who our clients are.

Q430 Jenny Willott: What is the problem?

Mr Bingle: What we are saying is that there are instances when sometimes a company has a global policy for their suppliers not to make public that they work for that company. We respect that. What Mike was saying was if a company wants our appointment to be kept private, we think that is fine. I can see situations in terms of a bid scenario where a consortium coming together would not want made public that they were bringing together a consortium for commercial reasons. Again, that is entirely fine. Everybody else is happy for their names to be made public. If you read PRWeek and Public Affairs News, it is full of our clients.

Q431 Jenny Willott: I understand that but specifically on the point that if it was compulsory for everybody, what problem would that cause?

Mr Granatt: The obvious problem would be for people who wanted to buy professional advice and found that they could not get it from the best people in the industry because they were not prepared to sign up with a company that would be forced to reveal who all their clients were. I really do not see the case for saying you should deprive people of getting good professional advice by imposing a code for one particular reason that may not apply to other circumstances.

Q432 Jenny Willott: I am talking about if every company had to sign up to that, if it was compulsory, and so whether it was by law or by self-regulation, everybody had to declare the clients. There is no commercial advantage for any one company then to go to Bell Pottinger or Luther Pendragon because they do not declare their clients.

Mr Bingle: I would expect you would find law firms developing public affairs practices because they would not have to disclose their clients.

Q433 Jenny Willott: That is our next session as to whether or not that is valid.

Mr Granatt: That is right. You would end up with an unregulated, covert sector essentially.

Mr Bingle: That is right.

Q434 Jenny Willott: Is there a code that you would be able to sign up to?

Mr Bingle: The CIPR code. All of our staff sign up to the CIPR code. As Mike was saying, if you look at the discipline procedure, the complaints procedure, what it demands of my consultants, it is much more demanding than the PRCA code or the APPC code. All of my staff have to sign that code.

Q435 Chairman: The acronyms are losing people, I am sure. That is the Chartered Institute of Public Relations and about 90% of people involved in the industry are signed up to that.

Mr Bingle: They have 9,000 members, they have a Royal Charter, and it is by far the most comprehensive and detailed code. All of my staff have to sign up to that code or they cannot work for us.

Q436 Chairman: In so far as you have a problem, it is with the other two?

Mr Bingle: The PRCA I am fine about. It is the other one.

Mr Granatt: Can I make a point? There are these guiding principles of conduct that have been drawn up jointly by the APPC and the PRCA and the Government Affairs Group of the CIPR, which we would easily sign up to because basically we did all of that. Our only problem with the other codes is this business about client confidentiality. That is the only point at issue.

Q437 Jenny Willott: The difference though between the CIPR code and the others is that the CIPR is for individuals, not for firms, so it does not get round the issue of potential conflicts of interest and so on, because it just regulates how one individual behaves.

Mr Bingle: It does actually. If you read it, it is very precise about client confidentiality and breach of a client's confidential information risks a complaint, risks being suspended. If that were to happen, I would have to fire somebody. So it is very precise. That code deals with all of those issues.

Mr Granatt: The reason that we put together a code of our own was twofold in that sense. One, because we wanted to make sure that we could extend the individual to the corporate and secondly, it helps us train our staff.

Q438 Jenny Willott: If 90% or whatever proportion of people working in public affairs are bound by the CIPR, why do you feel that other companies, other firms, felt there was a need for other codes?

Mr Bingle: I was around at the time that the APPC was first created, and it came into being because there was a particular scandal at the time, and the major five players in the industry at that time came together, and their view was the big five at the time setting out principles for behaviour. It was never the intention at that time that the APPC would last for ever. The view was to sort it out and then move on. We now have it, it has grown and grown, and they have been trying to bounce people like us into joining them, and our view is we should have a right whether or not to join the APPC, the PRCA or the CIPR. We have chosen the CIPR.

Q439 Jenny Willott: There has been a suggestion-and I cannot find the exact quote-that the best way to regulate and to disclose lobbying activity would be for a register to be held in Parliament, similar to all-party parliamentary groups so that Parliament would hold a register of names and clients and so on. Are either of you supportive of that as an idea?

Mr Granatt: I think there is a difficulty with it only in this sense: who do you put on it? Do you put companies like ours on it? Do you put organisations that lobby for themselves on it, like campaigning groups like Greenpeace and Friends of the Earth? Do you put on it all those people who work in-house who actually do it?

Q440 Jenny Willott: I think the suggestion is that all of those people would be on it.

Mr Bingle: Trade unions, for example?

Mr Granatt: I think it is an idea that could be put into place. I am not entirely sure what it would do, what it would achieve. That is the problem.

Q441 Jenny Willott: I was going to ask, given the current climate around public unease about parliamentary rules, whether that would actually help the situation or just make it worse.

Mr Granatt: Certainty is a good thing but if you create more uncertainty by creating a huge list that seems to have no great utility, I am not sure it makes things better.

Q442 Jenny Willott: Final question: Bell Pottinger operates in the United States as well, I believe. Does Luther Pendragon have any operations in the States?

Mr Granatt: We have affiliates, companies that we work with in the United States.

Q443 Jenny Willott: Given that the rules are much, much tighter in the States than they are over here, I was wondering if there was any evidence that having those sorts of rules restricting your business opportunities in the States could cause problems for the clients over there.

Mr Bingle: I am not really able to go into detail because my dealings in the US personally are nil because I am entirely UK-based.

Q444 Chairman: But you must know. Goodness me!

Mr Bingle: No, because Bell Pottinger in the States is linked to a different part of the group called Bell Pottinger Sans Frontières. That is the company which tends to deal with overseas companies.

Q445 Jenny Willott: Would you be able to provide a note for us after the session about whether it is has had any implications on your business? We would find that very useful.

Mr Bingle: Of course.

Q446 Chairman: Can I just say there has been a huge amount of comment on the tightening up of the regulation of lobbyists in the United States. You cannot switch on the television without Barack Obama talking about the role that he played in the legislation that went through Congress on lobbying. You do not follow what is happening in America very closely, do you?

Mr Bingle: I am more focused on what is in the Budget for my clients.

Chairman: I think that is astonishing. I have been following the American presidential case quite closely. It does not personally affect me. But there you go.

Q447 David Heyes: We mentioned Chinese walls. Can you help us understand how these Chinese walls operate in your companies? How does it work?

Mr Bingle: Company A, company B. Company A will have a director and two or three staff working on it. The same with company B; a different director, different consultants. The information in terms of the PC relating to both clients is security-locked, so any members of that account team can get access to the information about that particular client by password security. On that basis, it is entirely possible to work for two companies with a potential or a real conflict. We would only be in that situation if both companies were happy for us to be working for them. In the past I worked for a company called GPC,[7] which was known to have the best health team. They at the time worked for most of the British pharma-industry. All of the companies in that sector were aware of it, were perfectly happy; why? They had a very good health care team. In theory, lots of conflicts. In reality, the companies were perfectly happy for GPC to advise a number of health companies. It is two things. One is openness to both sides you are working for about the other company. Secondly, it is making sure that the two account teams are separate and distinct. Thirdly, it is making sure that in terms of the information about both-back to the CIPR code and client confidentiality-we would only allow one account team to have access to that particular client's commercially confidential information. Again, the loser if that were to break down would be us, therefore it does not break down.

Q448 David Heyes: Is it similar in Luther?

Mr Granatt: It is very similar. You make sure the information being held by the account team is confined to that account team. There are, of course, issues about making sure there are not conflicts of interest that would offend the CIPR code, for example. We rely on the fact that partners discuss regularly whether there are issues coming up within an account that they think would affect the reputation of the company or offend the code. We also make sure that if a client is not known publicly, and they may not be known among of a number of people in the organisation, the partner responsible for the knowledge of that client makes sure by looking at what is coming up in terms of proposed new business and other activity that there is no conflict of interest.

Q449 David Heyes: How do the CIPR monitor the workings and the validity of your Chinese walls?

Mr Granatt: The CIPR do not, as far as I am aware, monitor companies or individuals directly. They rely on the fact that the code encourages people to report to the CIPR any breaches of the code.

Q450 David Heyes: It is not surprising that you give that answer. We had the CIPR here a few weeks ago and they explained that with the 9,000-plus membership they have, it would be impossible for them to do detailed monitoring. They are not equipped to do that. It is light‑touch monitoring. It is mostly self-monitoring and self-regulation. If that is the case, how is it that the CIPR are the right organisation to produce these codes and for you to try and work to their methodology?

Mr Bingle: I have six directors, and they have a job in terms of line management and mentoring. We have a system whereby for somebody to go from being a consultant to senior consultant their behaviours are monitored and they are checked; there is regular interaction between the junior staff and the more senior staff. It is on that basis that we are monitoring almost day in, day out how our junior staff are behaving. We cannot afford any of our staff not to behave well at all times and in a company of 30 people you can monitor them day by day.

Mr Granatt: Within our set-up we are appointing somebody who will be independent, who will look at the way in which we operate our code and how we do that, and will report to the board of directors every year on how that is doing, and will be available to anybody in the company on a confidential basis if they wish to report something they feel is a breach of the code.

Q451 David Heyes: Basically, it is "Trust us. We are good chaps and it would be bad business to not create this system."

Mr Granatt: I think it would be "Trust us, sir, because we do the best we can to make sure we are accountable."

Q452 Mr Walker: Last time I checked we lived in a democracy, despite the best efforts of the current Government, and part of living in a democracy is the right to put your case to government, whoever you are, be you a private citizen or an organisation. So I do not believe lobbying is either grubby or dirty, but I do think a lot of it is rather amateurish and there has been a mushrooming growth in lobbying across all sectors: the public sector, the private sector, the nebulous third sector. Really I just want to know why, in your view, so much of it is just so bad and is just so low-grade.

Mr Granatt: One reason is that people do not understand how parliament or government works. They have a view they get from watching television and reading newspapers which is a very surface view. They believe that certain things work and certain things do not and that is basically it. If people knew more about what happened, if there was more guidance offered by government and parliament on the best way of making approaches, that would be helpful.

Mr Bingle: I think it is a number of things including quality control by the public affairs companies themselves. I am not sure ten years on there has been a dramatic improvement in the quality of people employed in public affairs companies and that is an issue both for the companies and for their clients. It is for clients to be more demanding of what they expect from their consultants. There are too many clients who pay fees and do not get an awful lot back in terms of monitoring. They could read The Times in the morning and get as good information. Ultimately it is about people like me being very tough in terms of who we recruit and the quality of people. It is for the client, if you were approached by a public affairs consultant who was hopeless, to ring up his boss and say he is hopeless.

Q453 Mr Walker: What responsibility do you, as individuals and leaders of your profession, bear for improving its profile both within the House of Commons and more generally outside the House of Commons.

Mr Bingle: I used an example in an article a while back. When the Press Council was in difficulty it was replaced by the Press Complaints Commission and they appointed Lord McGregor, and Mark Bolland, as its director. One of the issues for the industry is to have somebody talk on its behalf who is a skilled communicator, who actually can get across what we do and be proud of our industry and that would encourage a higher quality of person coming into it. At the same time, it is then down to us to be very, very tough and if people are hopeless to get rid of them.

Mr Granatt: Another point to add to what Peter said is that we do offer you evidence and the fact we are prepared to stand up by standards we espouse.

Q454 Mr Walker: I am going to ask you a question regarding your relationship with the Speaker. Do you think your decision to resign that account has enhanced your professional reputation and that of your organisation?

Mr Granatt: I will let other people be the judge of that. I have taken no view on it. I have to tell you it is not something that I wished to happen. It is not something I would have calculated to happen. If it had never happened, I would be a happier man.

Q455 Mr Walker: You did say earlier on in your evidence session that your speciality was crisis management but actually you resigning turned a crisis into a disaster potentially. I am not meaning to have a go at you but this is a legitimate question. If I was running a large plc, I might think that Mike Granatt took a principled decision to resign that account but my God I would not want him doing that for me. You might become rather toxic out there in the private sector because you could be seen as fairly high risk.

Mr Granatt: I am sure that is a possibility.

Q456 Mr Walker: Would you make the same decision again?

Mr Granatt: Under the same circumstances, yes, I would have to.

Q457 Mr Walker: How many accounts have you resigned in your professional career as a lobbyist?

Mr Granatt: One.

Q458 Mr Walker: It is not something you are going to make a habit of doing.

Mr Granatt: No.

Q459 Mr Walker: Do you think you and your organisation did enough due diligence before accepting that role?

Mr Granatt: At the time I certainly thought we did. The one mistake I made was believing that the standards and behaviour I enjoyed from colleagues in Whitehall for 25 years I would also find elsewhere.

Q460 Mr Walker: Part of crisis management, having done a bit of it myself, is knowing where all the skeletons and bodies are buried and getting everything out on the table from the outset. Do you perhaps feel that you, or your business, did not quite achieve that when you took on the account?

Mr Granatt: It is entirely clear I did not achieve it in that particular instance but in many other instances I did. If you are asking me if I failed to achieve it in the one you are talking about, it is self-evident that I did not.

Q461 Mr Walker: You have learned some lessons.

Mr Granatt: You learn every day in this business.

Q462 Chairman: I have a few questions to wrap-up what has been a fascinating hour or so. Do you pay any MPs or Peers or offer them retainers?

Mr Bingle: No.

Mr Granatt: No, we pay no-one in that respect. We do actually engage one MP, who was a professional presenter in a previous life, to do professional presentation training for some of our staff.

Q463 Chairman: Who is that? It will be in the public record.

Mr Granatt: Mr Opik.

Q464 Chairman: Lembit Opik.

Mr Walker: My God! That's damaging. Forget the speaker that's your problem.

Mr Granatt: I'll tell him you said so.

Q465 Chairman: I really did not want to give Lembit any more publicity but there you go. You talked, Mr Bingle, about your staff and how good and professional they are. Do you employ former senior civil servants, politicians, special advisers?

Mr Bingle: I thought you might be asking that question. In terms of civil servants, we employ a former private secretary to the former Deputy Prime Minister, John Prescott, when he was at ODPM.[8] I retain John Grogan's former researcher, which is slightly ironic. I employ a former researcher to Ben Chapman. I am happy to give you a list of people.

Q466 Chairman: That is not confidential then?

Mr Bingle: No, that is on our website always.

Q467 Chairman: Do you get value for money from them?

Mr Bingle: They are good people. They understand politics and that is our game.

Q468 Chairman: There are people out there skilled in lobbying and PR. What special attributes do they bring to an organisation such yours, which is a world leader you tell us?

Mr Bingle: A former special adviser will understand private office, committees, Cabinet committees, the workings of parliament. He will understand how government has changed over the last ten years in terms of where the centres of power are between parliament, the executive and the like. A former researcher will understand process: Standing Committees, Select Committees, Second Readings, Report Stage, how the House of Lords work. That is interesting and important and what we try and do is to use that knowledge of how the system works.

Q469 Chairman: Someone like Patrica Hewitt, who is now being paid by Boots the Chemist, Boots probably hired Patrica Hewitt because of the knowledge she would have about how the Department of Health is run.

Mr Bingle: Why not ask her?

Q470 Chairman: We may well do.

Mr Granatt: We obviously employ one ex-senior civil servant which is me. We have a number of people, not many, who were former press officers in departments. We have somebody who is a labour councillor in Hackney. Again, if you want a list of those people we are happy to provide it. What do they bring? They bring a knowledge of how systems work and a particular experience of how certain issues work as well.

Q471 Chairman: I could get a job if I wanted with you because I know how Select Committees work?

Mr Bingle: Not now but after you stand down from the House.

Mr Granatt: We would not employ you as an MP.

Q472 Chairman: There are some serving MPs who are involved in the lobbying business, we know that. The former Prime Minister is making a lot of money, millions upon millions, and he said way back in 2004: "We intend to continue to recruit extensively [that is the Government] from outside the Civil Service to senior posts including at the highest levels. We also need to examine the business rules to make it easier for civil servants to move into the private sector and back again." I am looking at you, Mr Granatt. Is there a problem there at all or should it be very easy for senior civil servants like you to move out of the civil service into business, where they make a lot of money-you told us you are getting as much now as you did when you were head of government communications-and back again with no problems?

Mr Granatt: You have to have some system which ensures that this is not generating a circle of people who then take advantage of their position in government. I think there is a very serious question about public confidence personally. I do not think I would advocate in any way letting up the Advisory Committee rules.

Q473 Chairman: You take issue with Mr Blair.

Mr Granatt: If he wanted to loosen those bonds to let people move in and out more quickly and in that way, expose the public service to criticism and even more decline in trust, I would certainly disagree with him.

Chairman: Thank you both very much for giving us your time in coming along this morning. We have learnt a great deal.

Mr Richard Schofield, Acting Head of Legal Policy, Law Society and Mr Eben Black, Head of Media, DLA Piper Global Government Relations, gave evidence.

Q474 Chairman: I want to welcome to our Committee meeting this morning our witnesses from the Law Society and from DLA Piper Global Government Relations. We have Eben Black who is Head of Media at Global Government Relations, which is part of the law firm DLA Piper. You were, in a previous life, with the Sunday Times and industrial editor at The Sun.

Mr Black: That is right.

Q475 Chairman: Richard Schofield comes to us from the regulatory affairs section of the Law Society, Head of Regulatory Affairs, but that regulation is moving, I believe, elsewhere in due course.

Mr Schofield: Regulation has already moved to the SRA[9] in anticipation of the implementation of the Legal Services Act. My role is on the representative side of the Law Society dealing with representative issues.

Q476 Chairman: Do either of you want to make a preliminary statement to tell us about law firms and how they are getting involved, and are involved, in lobbying and touch on some of the key issues that we should be aware of?

Mr Black: I think law firms are becoming more and more involved in lobbying and the reason is we are moving into an area of full service essentially. The idea is that clients will not want a simple straight forward traditional legal service but want other things as well to take them right from the beginning to the end of a particular project. Because this is very much the American model, with American law firms moving into London in greater numbers, we will see very much more in the future.

Mr Schofield: I agree with everything that Eben said. Obviously law firms have many of the skills you would associate with effective and skilled lobbying in that they have a lot of detailed expertise in somewhat arcane areas. Also they have relationships, particularly with the regulatory branches of government, which they have built up over many years doing transactional work and applying some of that skill and knowledge to a broader lobbying audience in a similar way to American firms.

Q477 Chairman: Can you tell the Committee the effect that the Legal Services Act has had on the law firms engaged who want to go into lobbying?

Mr Schofield: The Legal Services Act itself will have no particular impact on that in that as now any law firm that engages in lobbying will be subject to the Solicitors' Code of Conduct and the full regulatory framework governing the profession, and the Legal Services Act will continue that. There will be developments around entities being regulated as well as individuals and firms where you might have people practising more than one discipline but that is more about how the entities are owned and managed rather than whether or not they will be regulated. They will continue to be regulated in a similar way.

Q478 Chairman: Am I right in thinking that law firms will become multi-disciplinary? They could act for people drawing in the expertise of a multiplicity of experts and that is a step change, is it not?

Mr Schofield: Yes, it is, but what the Legal Services Act is permitting is more around the ownership of law firms and who is allowed to be engaged in the management of them. Law firms now might well employ accountants, tax advisers, some even employ barristers, but those people are not allowed to own and are excluded from certain parts of the management, particularly the financial management, of the organisation.

Q479 Mr Walker: I am quite interested in the growth of lobbying within law firms. As you know, in the US law firms do a lot of lobbying; in fact lobbying in the United States is probably far more professional than it is over here for that reason. One of the problems with lobbying is actually that it commands very low cash premiums compared to other forms of advice. Lobbying companies, when you compare them to lawyers, barristers, people working in the financial services sector, tend to charge much smaller fees. Is it really not the case that law firms are eyeing this up as a very lucrative way of charging £1,000 an hour fees not just for legal advice but also public affairs advice as well? It is quite a lucrative market for you to be in.

Mr Black: I would say that our fee structure for the public affairs side of things is different to the legal structure. One thousand pounds an hour is not exactly the amount we are talking about here.

Q480 Mr Walker: It is an ambition.

Mr Black: Certainly. I think it is about full service. It is about the concept of giving a full service to clients, giving them every possible avenue of advise they could possibly want.

Q481 Mr Walker: I am interested in your fee structure. Is it 50% of what a lawyer would charge, is it 80%?

Mr Black: It depends on the seniority. It is less than a lawyer would charge for similar seniority.

Q482 Mr Walker: Is it going to be a lawyer providing that advice?

Mr Black: No, it would be somebody such as myself or one of my colleagues in most cases. We will obviously draw on legal advice. There are occasions when you might consider that lawyers are doing what you might consider lobbying work but it is a very, very fluid idea.

Q483 Mr Walker: What sort of growth do you see in the market-place as far as your organisation is concerned? Do you see it as a fairly immature market where there is plenty of room to grab market share, as far as the lobbying spend goes, of organisations?

Mr Black: We have a unique offer within the public affairs market because of our attachment and being part of a legal firm. There is no other legal firm in London which does it in the same way we do. We think it is definitely a growing market. We are exploiting it and we are the market leader in it.

Q484 Mr Walker: How do you get around the thorny issue of publishing client names? One of the issues we are concerned about is the fact that some organisations do not allow their names to be published or some lobbying firms do not want to publish the names of their clients.

Mr Black: At the moment there is no way around that because we, as part of a law firm, even though some of us are not lawyers, are actually subject to the SRA, and the SRA demands confidentiality. The only way around that is to supersede it. We have suggested in our written evidence that we would like to see a statutory register of lobbyists and their clients administered by the House of Commons.

Q485 Mr Walker: That would allow you to participate in that. You are in favour of full declaration and openness.

Mr Black: Absolutely.

Q486 Mr Walker: You would argue you are on the side of the angels.

Mr Black: I would not go that far.

Q487 Jenny Willott: The point that you just made links to a question I asked the previous witnesses. Given the public unease at the moment about parliamentary regulation of anything, do you think that having a register held by the House authorities would overcome the perceived problem?

Mr Black: I certainly think it would be superior to a voluntary disclosure register held by something like the APPC, yes.

Q488 Jenny Willott: Why?

Mr Black: Because that is entirely voluntary. There are no sanctions if you break it. We suspect within the industry, quite frankly, that the APPC register is more honoured in the breach than it is in actually being kept to by members. The APPC generally, we think, is not really tough enough on its members. It does not have the authority to implement what it actually says it will. We think that perhaps the House of Commons, as a respected institution, would be better to organise that.

Q489 Jenny Willott: You have a very generous view of the House of Commons and regulation. From the SRA's perspective, is there a problem with disclosure of client names?

Mr Schofield: There is no problem with disclosure of client names so long as the client gives consent to that disclosure.

Q490 Jenny Willott: If there was going to be a situation where it was statutorily required, or it was required by some form of self-regulation, that all companies, all firms, who were operating any business which was involved in lobbying had to make their clients' names publicly disclosed and, therefore, any firm that was signing a contract with a firm that did lobbying was aware their name was going to be disclosed, the SRA would not have a problem with that.

Mr Schofield: The SRA would not have a problem with that, no. Just a nuance, if it was a statutory code there would be no issue. Law firms would comply with the law, and the general law would supersede the confidentiality rule in Rule 4. In relation to self-regulation, if what we are talking about is where any firm engaged in lobbying voluntarily signed up to a code and said that they would disclose the names of their clients under some kind of a register, then, yes, they would have to refuse to act for any client who refused that disclosure but that comes to the issue of whether or not law firms would want to enter into a voluntary arrangement of that kind.

Q491 Jenny Willott: If the APPC dropped the client disclosure requirements and toughened up their regulation, would your organisation be happy to sign up to their code?

Mr Black: We do not see the need because we are all members of the CIPR. We have our own code and we also are bound by the SRA. We cannot see what is the point of the APPC from our point of view.

Q492 Jenny Willott: If the CIPR code is generally signed up to by most companies and you are bound by the SRA and you think that is enough, what should the situation be for firms like Bell Pottinger and Luther Pendragon? What should they be signed up to?

Mr Black: That is entirely up to them.

Q493 Jenny Willott: From your perspective.

Mr Black: They are members of the CIPR.

Q494 Jenny Willott: The CIPR code is for individuals not organisations. The SRA regulates your behaviour as an organisation. Therefore, if you are bound by two different codes and you are saying that is good enough for your organisation, then surely there should be similar arrangements for your competitors rather than only having to sign up to one which is the individual's code. In those circumstances, what do you personally think other organisations should sign up to, those that are not bound by the SRA?

Mr Black: That is matter for them. I do not think I am qualified to comment on what they should do.

Q495 Jenny Willott: I am asking you as an individual in terms of our remit of looking at what regulation there should be for lobbying organisations.

Mr Black: I think that the code which one signs up to should be as stringent as possible. It is really up to them to defend whether they think what they signed up to is stringent or not.

Q496 Jenny Willott: In terms of public concern about lobbying organisations, which there does appear to be from various polls, and there does seem to be a general feeling that something should be done to try and tighten up regulation, effectively you are saying that what is there at the moment is enough.

Mr Black: We are suggesting, as I say, to get over the disclosure problem, a register held by the House of Commons of lobbyists and their clients. That would get over the question you are asking me and that depends whether you want to move into statutory regulation of the lobbying industry or not. That is not a question for me because I am already subject to statutory regulation.

Q497 Jenny Willott: Around the issue of conflict of interest, if you are bound, as you say, by the SRA regulations which cover client confidentiality, how do you get around issues of the conflict of the interest between clients?

Mr Black: We are strictly bound by the conflict of interest rules as would any other employee of a legal services organisation. We have to not work if there is any chance of a conflict of interest whatsoever.

Q498 Jenny Willott: How do you manage that on a day-to-day basis?

Mr Black: In the same way that any law firm does, by constant conflict checks.

Q499 Jenny Willott: Unlike the two previous witnesses, you would not take on an organisation if they seemed to be potentially conflicting with an existing client.

Mr Black: Absolutely not. We simply would not be permitted to do that.

Q500 Jenny Willott: Do you think that strictness of rule should be applied to other lobbying firms?

Mr Black: Possibly, it is a matter for the clients. Certainly in a law firm it is impossible to have a conflict like that.

Q501 Mr Walker: That was interesting what you said about the statutory register because one of the issues we have touched on during our investigation is that there are literally thousands of organisations lobbying, not just private companies, public companies, but also third sector organisations and charities within that sector. How would you feel the register should address those sort of organisations?

Mr Black: I think they should be on it because they are acting as lobbyists. For example, any pressure group, any interest group, will have people who are lobbying parliament who are employed to do so and they should be on the register and it should not just be the commercial aspect of it.

Q502 Mr Walker: How do you define lobbying? Is a one-off meeting with a Member of Parliament from an organisation active lobbying? Would that need be to registered? Would the whole organisation need to be registered? Where do you draw the line as to what is active lobbying?

Mr Black: Can I quote from our written evidence? This is how we define lobbying. We would define lobbying as being "any activity undertaken with a view to influencing government or party policy; the outcome of a decision in which a politician is the final arbitrator or upon which they may have an influence; and alterations and interpretations of legislation or regulations." Yes, would be the answer to your question.

Q503 Mr Walker: It is a tough one. If Broxbourne Canine League came to see me about the Council and stray dogs and what I was going to do in parliament, would they have to be registered on that list? Not that there is such an organisation but let us say there was.

Mr Black: I suppose, and this is simply an idea, one way around this would be that branches such as the Broxbourne Canine League would often have a national organisation behind them and therefore you would have one, two or more people registered for that national organisation as lobbyists who would be the conduit for the local organisation.

Q504 Mr Walker: What if it is just a local drugs charity that is concerned about a Bill passing through parliament and the impact it may have on their clients? What if it is just a clinic in Hertford?

Mr Black: Perhaps there should be some distinction made between a constituent and a lobbyist.

Q505 Mr Walker: One of the reasons we are told we need a register is for greater transparency. If we have the register, a lot of concerns that are covered in the press will go away and the press will move on to other things. You are an ex-Sun journalist, is that really going to be the case or is it too rich a source of stories to ever be left alone? Once it is in the public domain it will make your colleagues' job so much easier to go through with a red pen every Monday morning and see who is doing what and what stories that enables them to write.

Mr Black: The essence of the story is surely the alleged or implied secrecy not fact. If there was more openness, there would be fewer stories. I think that is true of life in general from my experience.

Mr Walker: That is a valid defence of your former colleagues' motives.

Q506 Jenny Willott: I am not sure it is true that the more open the fewer stories there are. In my experience it is completely the reverse of that.

Mr Black: But the implication in a story is different.

Q507 Chairman: You made your position clear that you want to see a statutory register that lobbyists sign up to. You are not happy with the Association of Professional Political Consultants. I am going to try and get away from these acronyms because I am sure we are losing people. I am losing myself. You have a problem with the Association of Professional Political Consultants, have you not?

Mr Black: Yes.

Q508 Chairman: My colleague, John Grogan-this is the third time I have mentioned his name this morning but he does take a special interest in lobbying matters-told us this: "Those firms like DLA Piper"-and then he goes on to mention Bell Pottinger who were here a few moments ago-"who choose not to subscribe to the ethical approach laid out by the APPC and PRCA are badly letting the side down." Do you disagree with that?

Mr Black: Yes, I do disagree with that. I cannot speak for Bell Pottinger, and Mr Bingle has had an opportunity to speak for himself, but as far as we are concerned letting the side down absolutely not because we are regulated by the SRA. I do not consider that to be letting the side down in any way. In fact, I consider that to be far superior to a voluntary code drawn up by a self-selecting group such as that of the Association of Professional Political Consultants.

Q509 Chairman: I want to ask you where we are on this. DLA Piper wrote in September last year to the Office of Fair Trading and they asked them to intervene because public authorities, like the Greater London Authority, allegedly were going to let contracts to those organisations in membership of the APPC.

Mr Black: That is not quite how it was to be frank. The reason we wrote was a letter which was sent out by the chairman of the APPC to all MPs saying that in her view only lobbying firms which signed up to the APCC should be eligible for public sector contracts. We saw this an attempt at restrictive trade, as an attempt to set up a new closed shop and return our industry to 30 years ago. We thought some action had to be taken so we wrote to the OFT[10] to ask them to investigate.

Q510 Chairman: I do not know how long it takes to get to grips with these things but what is the position as it stands at the moment?

Mr Black: The OFT wrote back to us and said that we certainly had a case but that the guiding principles which were released after this by the APPC, CIPR and the PRCA, which did not include this particular suggestion, superseded the letter which had been sent. Therefore, although they agreed that we certainly had a case on the basis of the letter they did not propose to put public funds into investigation.

Q511 Chairman: What does that actually mean if we deconstruct it? Does it mean that the GLA,[11] and other public authorities, can go to lobbying firms who sign up to the APPC?

Mr Black: It means they can or cannot; it is entirely a matter of policy for the GLA or any other body.

Q512 Chairman: That must disappoint you.

Mr Black: No, not at all. The point of our letter was an attempt by the APPC to impose a closed shop, not to interfere in the internal runnings of any other body. It is up to a body whether or not they employ people who are or are not members of the APPC. That is not for me to determine. What I think is for us to challenge is an attempt by something like the APPC to corner the market for their members.

Q513 Chairman: I am being very slow. You are saying it is up to the GLA to decide what their policy is on who they recruit and if they just want to go to people who are in membership of the APPC then that is a matter for them.

Mr Black: I would suggest so, yes, would you not?

Q514 Chairman: I got it completely wrong then. I thought DLA Piper saw this as being anti-competitive, that DLA was going to be frozen out of lucrative contracts because public authorities were going to go to the APCC.

Mr Black: No, that is not the point. The point is that the APPC wanted to make it an absolute requirement for a public sector body when letting a public affairs contract that the company which they employed should be a member of the APPC. That is very different from allowing a body to decide who it should employ.

Q515 David Heyes: I am going to pursue the same thing further. I am taken aback by the level of antagonism that exists. I did not realise it was quite so deep-seated and almost personal. You are accusing the APCC of pursuing a closed shop, building its membership to the point where they have a monopoly position.

Mr Black: No, I did not say that.

Q516 David Heyes: That was my projection.

Mr Black: They are not building their membership to a monopoly position. What they are trying to do is to freeze anybody else out of the public sector market by the issuing of this letter.

Q517 David Heyes: Is it not the case that because of what you describe as your full service, your unique offer, you are already effectively in that closed shop position in relation to your clients, in relation to your market, because of your base in the legal practice?

Mr Black: It is really up to clients whether they come to us or not. It is not a question of that. I do not see there is an analogy between the two at all quite frankly.

Q518 David Heyes: Part of your unique offer is less openness about your client base than would be required from a member of the APPC.

Mr Black: That is because we are part of a law firm. It is up to them whether they come to us or not. I am saying we would be very happy to disclose our clients under the terms we have suggested today.

Q519 David Heyes: You have said several times that you believe there should be a register held by the House. How does that work? How do you envisage that?

Mr Black: A register works by having people registered on it. If you are a lobbyist lobbying politicians in any way then you should be on that register. That is the way we would see it, as would be your clients. For example, I would be registered as a lobbyist for Global Government Relations DLA Piper and you would have a list of people I would be working for and that list would change as people dropped off or rejoined it.

Q520 David Heyes: Where would the rules and regulations surrounding that derive from?

Mr Black: I assume they would derive from the House of Commons.

Q521 David Heyes: Perhaps ultimately from a recommendation from this Committee.

Mr Black: Yes.

Q522 David Heyes: You mentioned your preference for membership of the CIPR.

Mr Black: Yes, we are members of the CIPR, my colleagues and I.

Q523 David Heyes: You also talked about the need for stringently applied standards. The evidence we have had from the CIPR is that they are not in a position to require stringent standards because they are a multi-member organisation and operate on light touch self-assessment monitoring.

Mr Black: The point I must make in that case is that we are regulated, as I have said several times, by the Solicitors Regulation Authority, which is an extremely stringent organisation as Richard will now doubt tell you. We are regulated by them so whatever criticisms you have with the CIPR quite frankly do not really resonate as far as we are concerned.

Mr Schofield: Can I add something to what has been said? Taking Eben's suggestion of a statutory register and your question about how that would actually work, whatever regulatory rules you put in place are only as good as the monitoring and enforcement regime you put around them. That is the problem of just having a register or the Association of Professional Political Consultants' code or the other codes; they simply do not have the resources to monitor and enforce them to the same standard of efficacy of the SRA which is required by statute to provide the resources to ensure that can be done. That is a weakness of all these voluntary schemes and potentially a statutory code unless it is backed by that kind of regime.

Q524 David Heyes: That was my question to you. Where does that happen in relation to a register that might be held by the House of Commons? The names would be registered but where would the monitoring and enforcement take place?

Mr Black: That is a very interesting question. You may wish to put something in place to work with that. That is not a matter for me but I think there should be very stringent monitoring and enforcement and we are subject to that.

Q525 Jenny Willott: Does that mean from what you were saying you believe that regulation of PR firms and public affairs should be on a statutory basis?

Mr Schofield: I do not think I am making that case. What I am saying is if it were on a statutory basis then there would have to be a decision to commit the resources to ensure the regulation was effective.

Q526 Jenny Willott: DLA Piper operates in the States as well. A question that I asked the others is, is there any evidence that the very tight enforcement of regulations in the US as regards lobbying has made any difference to the clients' attitude of purchasing services or being prepared to put their names on a register. Has it made any difference to the lobbying market in the States?

Mr Black: As far as I am aware, no.

Q527 Jenny Willott: Companies generally are not afraid of having their names made public or having it much more tightly regulated than it is at the moment.

Mr Black: It does not seem that way from the evidence I have seen. I am not an expert on the American market.

Mr Schofield: If I can make a point about the American model, my understanding of the Lobbying Disclosure Act is that there are a couple of provisions in there which specifically address some of the issues of the law firms. It is very explicit within the Act that anything which constitutes legal advice, and there is a statutory definition of that, is excluded from the definition of lobbying and is therefore not disclosable to ensure there is client confidentiality guaranteed around pure legal advice. There is a de minimis rule so that if the lobbying advice you give to clients is incidental to the broader legal advice, and I think the current view is about 20% of time in any reportable period, if it is incidental to the legal advice that you are giving, given that it can be in commercial transactions, that would be excluded from disclosure. There are just a couple of points there. Any statutory code, in most of the jurisdictions that have any kind of statutory provisions, do address the issues that affect law firms as indeed do some of the recommendations coming out of the European Commission through their European Transparency Initiative.

Q528 Jenny Willott: The distinction in the States is between the activity you are carrying out rather than the original basis of your firm. For example, with DLA Piper and GGR[12] it would not be what the individual was actually doing which meant which set of regulations they were controlled by rather than who they worked for.

Mr Schofield: Not really. This goes back to the point I was making about the Solicitors' Code here which says you can only disclose the name of your client if it is required by law. The Lobbying Disclosure Act means that in the States it is required by law that when you engage in this kind of activity you have to disclose. If you introduced a statutory provision here then you would have to disclose clients for whom you engage in that activity.

Chairman: Disclosure does happen in America and life goes on, yet our people earlier did not know anything about what was happening in the United States. That is just an observation.

Q529 Mr Walker: Am I right that DLA is based in the Midlands? Was it a Midlands law firm?

Mr Black: It is a northern law firm.

Q530 Mr Walker: It has grown quite quickly over the last decade and has a reputation for being hard-nosed and aggressive, moving into new markets and making its name.

Mr Black: If you say so.

Q531 Mr Walker: That is nothing to be ashamed of; that is the nature of the private sector. You claim that anecdotal evidence of non-compliance with the APPC code is abundant. I have not read in detail what you have submitted but the committee staff have so if I am misquoting I apologise. Can you share some of those examples?

Mr Black: I cannot give you any named examples, no. It would be improper for me to recount rumour but within the industry it is very well known that if you happen to not want to register somebody then perhaps they might not be registered. It is quite obvious and you had an example earlier on of firms who are members of the APPC clearly pitching for work which they should be excluded from by their membership. The thing with the register is that it is un-policed. You really do not know what is going on, it is entirely voluntary and it can be used the other way as well: to put a client on where you have done £300 worth of work for and you might have had a conversation with. If it is actually a very big name and you put that on the register, then it is marketing. It does not work, in both ways, if you see what I mean. That is the important thing about it.

Q532 Mr Walker: In reality you want to increase the regulatory burden on small agencies to make it harder for them to operate so you can hoover up their market share.

Mr Black: Not at all. We think that if there is concern then we are suggesting one way forward. We have no intention of it making us more competitive or able to squeeze out smaller agencies. If you want to go to a smaller agency, you are probably not thinking of going to us anyway. That is not in our interests.

Q533 Mr Walker: It must really annoy you as an organisation when you have this big blue chip client and they are using a PR agency, a public affairs agency, like the Communications Group, Westminster Strategy, and you think: why are we missing out on that fee income; we must get that in-house; we must make it as difficult as possible for them to operate.

Mr Black: Why would it make it more difficult for them to operate under this suggestion than us?

Q534 Mr Walker: Because the regulatory burden would be higher for them than it would be on you. You have more financial resources to meet that regulatory burden than they would.

Mr Black: What financial resources would we actually need to put our names on a register and say who our clients were?

Q535 Mr Walker: When I was in recruitment I worked for a very large company and we loved the regulation that this government was producing at the time because it knocked so many smaller agencies out of the market-place which meant more for us. Perhaps I am applying my past business experience.

Mr Black: You are suggesting that we are suggesting regulation as a way of squeezing other people out. What we are actually doing is reacting to the concerns that have been expressed and offering a possible way forward.

Q536 Chairman: I have just a few final questions to tie things up. We spoke earlier about the revolving door: politicians and very senior civil servants going into lobbying firms. Can I ask you, Mr Black, how many senior civil servants and how many politicians work for you?

Mr Black: Senior civil servants, none. As you may know, our co-chairman of Global Government Relations is Lord Tim Clement-Jones, a member of the Upper House, and that is it.

Q537 Chairman: That surprises me. What about Norman Warner?

Mr Black: He is a consultant to DLA Piper but not directly to GGR.

Q538 Chairman: He is not involved in your business at all?

Mr Black: He will give us advice as asked for but he is not actually employed by GGR but by DLA Piper.

Q539 Chairman: He is still a Member of Parliament, is he not?

Mr Black: Yes.

Q540 Chairman: Lord Norman Warner left the government in December 2006 and he was Minister of State for NHS reform. I remember his plans to move 250,000 people employed by the NHS Primary Care Trusts out of the NHS into the private sector, the voluntary sector, and the not-for-profit sector. What kind of advice is he giving you?

Mr Black: He is basically there to give advice as needed on policy development. I have here a list of what he is supposed to do for us if you would like me to repeat it.

Q541 Chairman: Just a couple of things to give us a flavour. As an issue we have 28 former ministers now who are employed in one way or another in the private sector. Maybe 28 is a bit over the top because someone like John Reid is chairman of the Celtic Football Club and I do not find a problem with that. It is an issue and I mentioned earlier that the former Secretary of State for Health, Patrica Hewitt, is now getting £50,000 or £60,000 from Boots the Chemist. This is all in the public record. What are Boots getting for this? My question to you is what are you getting from Norman Warner, policy advice?

Mr Black: Identifying upcoming public policy, assist in and advising in raising the profile of the firm-and this I stress is DLA Piper not GGR-deepening client relationships, introducing new contacts, undertake speaking engagements.

Chairman: We overran earlier but I do want to thank you both for coming along this morning and giving us the benefit of your experience. Thank you very much.

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[1] Public Relations

[2] Chief Executive Officer

[3] Non-governmental organisation

[4] Association of Professional Political Consultants

[5] Chartered Institute of Public Relations

[6] Public Relations Consultants Association

[7] Global Pharma Consulting

[8] Office of the Deputy Prime Minister

[9] Solicitors Regulation Authority

[10] Office of Fair Trading

[11] Greater London Authority

[12] Global Government Relations