House of Commons - Introducing a statutory register of lobbyists

Introducing a statutory register of lobbyists - Political and Constitutional Reform Contents

4 Other options for a statutory register

49. We do not regard the Government's proposals for a statutory register of lobbyists as fit for purpose. In this chapter we consider some alternative approaches, from no register at all to a highly regulated system such as the US Federal lobbying regulations. The options below are not meant to be an exhaustive list of all the potential forms that lobbying regulation could take, but rather seek to demonstrate the diversity that already exists in lobbying regulations in different jurisdictions.

OPTION 1: NO STATUTORY REGISTER

50. The first option would be to have no statutory register of lobbyists. Lobbyist Mark Adams and Professor Justin Fisher, were both unconvinced that a statutory register of lobbyists was necessary, and thought that self-regulation of the industry was still possible. However, Conor McGrath, an academic and public affairs consultant, stated, "the perfect lobbying regulation does not exist anywhere, but some regulation is always better than none".[62]

51. A statutory register that provides no more information than current self-regulatory regimes could have the perverse outcome of reducing regulation of the lobbying industry for the reasons discussed in the previous chapter. The Government's proposals for a statutory register are very narrowly defined, and most likely would not have prevented any of the recent allegations regarding undue influence.

52. While we are not, generally, in favour of this option we believe that no statutory register is better than what the Government currently proposes.

OPTION 2: MEDIUM REGULATION

53. Option 2 encompasses the Government's proposals for a statutory register of third party lobbyists, including disclosure of client lists, and whether or not the lobbyist is a former Minister or senior official, but includes the following additional features:

a broadened definition of a lobbyist, to include anyone who lobbies professionally in a paid role (thus in-house lobbyists, trade associations, trade unions, think tanks, campaign groups and charities may be required to register);
disclosure of the issues being lobbied on;
disclosure of when lobbying services have been provided on a pro bono basis;
a statutory code of conduct or a hybrid code of conduct (whereby organisations and individuals must indicate that they have signed up to their industry's relevant code of conduct, so it is clear where complaints can be addressed); and
incorporation of published data on whom Ministers are meeting.

54. There would be no requirement of financial disclosure, and the obligation would be on lobbyists to provide the necessary information to an independent body self-funded by the industry from subscription fees. Enforcement mechanisms could be limited to removal from the register. Ministers and officials would only meet with lobbyists who are on the register, although there could be a facility for retrospective registration (up to 28 days after the meeting occurred).

55. The European Transparency Register (covering the European Commission and the Parliament) is a voluntary register of lobbyists. Sanctions can be imposed for providing, or failing to correct, incomplete or inaccurate information in the register or for non-compliance with the code of practice. These sanctions include temporary suspension from the register or removal from it. Removal can lead to the withdrawal of access privileges to the European Parliament, and registration is a prerequisite for meeting with officials. If the Government introduced a compulsory statutory register along these lines, it would considered to be medium regulation.

56. Dr Raj Chari, commenting on the make-up of the European Transparency Register, stated that uptake of the voluntary register had been low despite attempts by the EU institutions to encourage registration:

If you actually look at the percentage of the in-house lobbyists and trade associations that are registered, that would represent about 50% of all of those that are registered in the Commission's transparency registry. NGOs and think-tanks would represent about 30%, other religious organisations and academic organisations about 10%. Effectively now we know that the uptake of registering professional consultancies in the European Commission has been very low.[63]

57. The advantages of medium regulation are that information on whom lobbyists are lobbying and why would all be on one searchable register, making it easier for the public, and other interested parties to access. Political Lobbying and Media Relations, a public affairs consultancy, stated that "a well-considered, all inclusive, and transparent, statutory register that requires universal membership would be a considerable step forward to restoring the confidence of the general public in the Public Affairs industry".[64] John Hogan, co-author of Regulating Lobbying: a global comparison, stated that politicians in countries that had lobbying regulations were in favour of registers as it gave legitimacy to their meetings. He stated: "lobbying legislation, however, places very little responsibility on the politicians themselves to declare with whom they talk. But our research has shown that with a register, politicians themselves are open with whom they have talked".[65]

58. The disadvantages of medium regulation would be that a definition of 'anyone who lobbies professionally' could lead to anomalies where small charities who employ a full time lobbyist would have to register yet activist volunteers of another charity would not. The Institute of Economic Affairs and the Taxpayers Alliance both provided examples of potential loopholes in a medium regulated system. However, the risk that some people would seek to act outside the system should not be a deterrent for implementing lobbying regulation, although any definition of lobbying would have to be carefully worded to avoid capturing ordinary citizens within the definition.

59. The Law Society cautioned that if the definition of lobbying were to be broadened then careful consideration would need to be given to a definition that drew a distinction between legal advice and lobbying. John Wotton, the President of the Law Society, told us

Where one is assisting the client in the client's interactions with the decision maker, which may be an investigating body or a licence-granting body or whatever, then I think that is clearly not within lobbying activity. That is the legal advice and representation area. When one moves into the area of seeking to influence other parties or the legislative process, then that is probably within the area of lobbying. So in the case of a law firm that has a significant activity, let us say, in advising clients on lobbying Parliament on legislation, I think that is lobbying in principle.[66]

60. Nigel Stanley of the Trade Union Congress also raised similar concerns regarding the broadening of a definition of lobbying:

I can't go round the TUC staff and say, 'They're a lobbyist and they're not a lobbyist'. Anyone who works on policy in the TUC may well meet an MP, meet a minister, meet a special advisor, because on the whole we like to send the people who know what they are talking about to see ministers.[67]

61. It was suggested that the activity of lobbying should be defined first, rather than attempting to define what a lobbyist is. Tamasin Cave of Spinwatch told us: "In terms of defining lobbying, we look at the activity and we define the activity. Whoever is carrying out the activity defined as lobbying is a lobbyist, whether they work for a trade union, in-house, an agency or a charity".[68] Who's Lobbying agreed, adding: "it is the activity that needs to be defined, and then anyone engaged in an activity should be included in the legislation as being required to register".[69] If it is the activity of lobbying that is defined, rather than what a lobbyist is, then it should be easier to require anyone who is carrying out the defined activity to be registered as a lobbyist.

62. Another key disadvantage of a medium regulated system would be that if the definition of lobbying were broadened organisations that are already regulated could be subject to even more regulation. Charities and trade unions, who are likely to be caught by an expanded definition of lobbying are already regulated by the Charity Commission and the Certification Office respectively, and must submit detailed accounts which are already searchable online. Ben Kernighan, Deputy Chief Executive of the National Council for Voluntary Organisations, highlighted what he saw as the differences between charities who engage in lobbying and professional lobbyists: charities "are accountable to a board of trustees, usually unpaid, they are legally required to act for public benefit, and all but the tiniest bit of them are regulated in their lobbying activity by the Charity Commission".[70]

63. Mr Kernighan explained the extent to which austerity was already squeezing charities' resources:

we anticipate that about £3 billion of charitable income is going to be reduced between now and the end of the next Parliament because of reductions in public spending, and a large majority of charities are very small organisations. We are concerned about a regulatory burden, both in terms of what that might mean for the time people have to spend, and in terms of costs.[71]

We would not wish to burden any organisations with undue regulation, particularly during the difficult economic climate, and consider that any financial or administrative cost of the register should be minimal. Lionel Zetter, a lobbyist and former President of the Chartered Institute of Public Relations, outlined the costs of belonging to their organisation:"It has 9,500 members, it charges about £200 a year and it makes a very small profit, so it is self-financing."[72] A sum in the region of £200 is not unreasonable for registration and membership of a register, and exemptions could be considered for very small organisations who wish to lobby but could not afford even nominal fees.

OPTION 3: A HIGHLY REGULATED SYSTEM

64. Option 3 encompasses the Government's proposals, and the features of medium regulation as outlined in option 2, but includes the following additional features:

a statutory register run by an independent regulatory body either self-funded by subscriptions or funded by Government;
financial disclosure of both money made as a lobbyist and the amount spent on lobbying activities in bands of £5,000; and
stiff penalties for breaches of the rules, including large monetary fines, and possible jail sentences.

Option 3 would be considered to be a highly regulated system. Dr Raj Chari told us: "What distinguishes the high-regulated systems from the medium or the low is that there are full spending disclosures given by the lobbyists."[73]

65. A highly regulated UK system could also include a provision similar to the US 1938 Foreign Agents Registration Act (FARA). The Act requires that all lobbyists working on behalf of foreign governments must declare whom they are working for, how much is being spent on lobbying activity and who is being lobbied. Index on Censorship endorsed a FARA style Act for the UK and stated:

the lack of transparency in international lobbying can and should be tackled both at source and at destination. Index considers wider consideration is needed of how to promote transparency of lobby organisations based in the UK but lobbying abroad whose activities—or all of whose activities—will not be captured by the UK statutory register".[74]

The Bureau of Investigative Journalism also called for the UK to require lobbyists working on behalf of foreign governments to disclose that activity: "for journalists aiming to scrutinize the lobbying process, a US FARA-type register is most helpful, as it is so comprehensive".[75]

66. Under the US and Canadian federal lobbying regulations, steep fines and prison sentences can be meted out to those who knowingly flout the rules. In Canada knowingly giving false or misleading statements in returns can result in a fine of up to $200,000 or two years' imprisonment, while other contraventions are punishable by a fine of up to $50,000. However, Karen E. Shepherd, Canada's Lobbying Commissioner told us: "no one has ever been charged or convicted of an offence under either the Lobbyists Registration Act, or the Lobbying Act ... Since 2005, twelve cases have been referred to the Royal Canadian Mounted Police".[76]

67. Under the US Lobbying Disclosure Act 1995 and the Honest Leadership and Open Government Act 2007, a civil penalty of up to $200,000 can be levied for failure to "remedy a defective filing within 60 days after notice of such a defect by the Secretary of the Senate or the Clerk of the House of Representatives; or...[to]comply with any other provision of this Act".[77] The Lobbying Disclosure Act states that a lobbyist who "knowingly and corruptly fails to comply with any provision of this Act shall be imprisoned for not more than 5 years or fined".[78]

68. Canada and the US require lobbyists to register only if they spend more than 20% of their time on lobbying activities. In giving evidence Dr Raj Chari stated that lobbying thresholds were often very difficult to assess objectively, and led to suspicions that some lobbyists were underestimating the time they spent on lobbying activity to avoid registration. He told us:

If you were to follow the Canadian model then avoid things like trying to quantify it in terms of percentage of time. This is also seen in the United States as well: that if you work 20% over six months, then you are required to register. So this threshold of 20% is very contentious.[79]

John Wotton of the Law Society concurred with this.[80] We would not consider a simple 20% threshold to be a sensible way to determine whether or not an organisation or an individual should be required to register as a lobbyist.

69. The advantages of a highly regulated system are that it would be highly transparent, as financial resources and the issues being lobbied on would be disclosed. Dr Raj Chari told us that lobbying registers are "widely consumed, yes. In fact registrars will get third-party complaints all the time about citizens knowing, or I suppose competitors as well, that people are lobbying without having registered, and they will file that third party complaint to a registrar".[81] Karen Shepherd, Canada's Lobbying Commissioner, noted that the Commission's website, which includes the register, is widely used. She stated: "Our website is one of our main outreach tools, and visits to the website are on the rise. More than 110,000 visits were recorded last year, an increase from the 89,000 visits in the previous year".[82]

70. The main disadvantages of such a system are that highly regulated systems are costly to run. When Dr Raj Chari gave evidence to us, he stated that "the disadvantage is that you might have regulatory offices that are highly staffed, which could cost a lot of money to the state".[83] Another key disadvantage is that organisations which lobby but also provide other services may find it difficult to determine exactly how much of their income is derived from lobbying, as would be necessary under a US style system.[84] Mark Boleat, a lobbyist, highlighted that "lobbying is generally not a stand-alone function but rather part of a package of services".[85]

71. However desirable it may be to have a comprehensive register of lobbying activity with full spending disclosures, the regulator needed to enforce such a register would be likely to be very costly. We do not think it would be appropriate to recommend a highly regulated system as a starting point for statutory registration of the lobbying industry in the current economic climate.

72. In our view, medium regulation is the most desirable, and most feasible form of a statutory register, and would certainly be an improvement on the register the Government currently proposes. We recommend that Government implement medium regulation as a starting point for a statutory register of lobbyists.

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