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
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
- 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
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
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.
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".
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".
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.
60. Nigel Stanley of the Trade Union Congress
also raised similar concerns regarding the broadening of a definition
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.
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".
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".
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".
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.
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."
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."
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
activitiesor all of whose activitieswill not be
captured by the UK statutory register".
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".
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".
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".
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".
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.
John Wotton of the Law Society concurred with this.
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".
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".
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".
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.
Mark Boleat, a lobbyist, highlighted that "lobbying is generally
not a stand-alone function but rather part of a package of services".
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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