Political and Constitutional Reform Committee - Minutes of EvidenceHC 1809-iv

House of commons

oral EVIDENCE

TAKEN BEFORE THE

Political and Constitutional Reform Committee

Introducing a statutory register of lobbyists

Thursday 22 March 2012

Ben Kernighan and Nigel Stanley

John Wotton

Evidence heard in Public Questions 254 - 328

USE OF THE TRANSCRIPT

1.

This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Political and Constitutional Reform Committee

on Thursday 22 March 2012

Members present:

Mr Graham Allen (Chair)

Mr Christopher Chope

Paul Flynn

Andrew Griffiths

Fabian Hamilton

Simon Hart

Tristram Hunt

Mrs Eleanor Laing

________________

Examination of Witnesses

Witnesses: Ben Kernighan, Deputy Chief Executive, National Council for Voluntary Organisations, and Nigel Stanley, Head of Campaigns and Communications, Trade Union Congress, gave evidence.

Q254 Chair: Welcome to our Committee, Ben and Nigel. As you know, we are doing an inquiry into lobbying. As you also know, we are the Political and Constitutional Reform Committee, the baby of the Committees, but we hope we are kicking and screaming as loud as possible on some of these key issues and we intend to produce a report on lobbying in the not too distant future. I think you are among some of the last witnesses that we are going to hear from but don’t read anything into that. We are very, very pleased to see you and you are very welcome.

Would you like to make an opening statement, Ben?

Ben Kernighan: Thank you, and thanks for the opportunity for coming and talking to you today. As you will all know, charities have a great deal of experience of working with people on the ground, including some people who do not always get a loud voice in terms of influencing public policy. That gives them, often, a unique insight into how public policy shapes our society, and it is not surprising that many of them want to use that experience to influence public policy. So we see lobbying as an essential part of democracy and it is right that outside interests inform public policy process. Often, lobbyists can help parliamentarians and others and be a beneficial source of information, improve debate and strengthen the law-making process. However, we also recognise that there is a need to regulate lobbying activity in order to prevent further ambiguity and mistrust of the political system.

It is important to remember that charities lobbying government are different in a number of ways from other types of lobbyists. For example, they are accountable to a board of trustees, usually unpaid, they are legally required to act for public benefit, and all but the tiniest of them are regulated in their lobbying activity by the Charity Commission. NCVO has previously argued that lobbyists should be subject to the same rules and regulations, regardless of whom they lobby for. Indeed, we think it important that there is a high level of public trust. But when we look at the proposals that government has come up with we don’t think there is an argument in favour of charities being part of that register. The reason for that is that we think it is pretty self-evident who it is that charities are lobbying for. The nature of what they do is pretty clear to organisations and they do that quite specifically and are only allowed to do it, by law, for their charitable purpose.

We think that the Government has missed an opportunity in its proposals in taking a wider look at lobbying, which may have led to a greater increase in public trust and confidence, and there are two key things that we think are missing. One is setting out clear standards of professional conduct for lobbyists, and the other is making it clear who is lobbying whom. If all those things were in place, we could see a value in terms of charities being involved in that process. But in the very narrow register that is being proposed, we don’t think that that would add value, and the added cost and regulation burden would not warrant their involvement in the proposals as presented by the Government.

Q255 Chair: Thank you, Ben. Nigel.

Nigel Stanley: Thanks very much for inviting me this morning. I have to say that, having looked at some of the previous sessions and some of the evidence submitted, I am finding this a rather confused and confusing debate. The problem is that the register seems to be being advanced to solve a number of completely different problems and there are, therefore, a number of different agendas getting confused together.

At the broadest, there is a broad concern that people with wealth and power have superior access to decision makers over others. Whether the register can deal with what is a fundamental, society-wide issue, I don’t know. But there are also rather precise and narrowly focused concerns about the role of third-party lobbyists, and we share some of those. On the other hand the professional third-party lobbyists say, "Not just us, guv. We should be treated the same as everybody else, so everyone should be registered", so you then immediately get into a broad agenda again.

Then there are other concerns that have been put into the Government’s consultation paper. Unions have been singled out, along with charities and think-tanks-a concept that has no legal meaning at all, I think-as giving rise to some special concern in this process. But it is an odd list. Even the 19th-century Combination Acts at least maintained the pretence that employers and unions would be regulated in the same way, but there is no mention of employer groups in this, despite the fact we are both registered by the Certification Officer process and by the same Act of Parliament. There is a missing category of groups as well: the rise of what you might call campaign groups that are not charities, not unions, not professional lobbyists, and that clearly get a lot of money from somewhere-one doesn’t really quite know where-but are very influential in the way that they brief MPs, talk to ministers and dominate the media agenda. There is no mention of these coming into the scope of a register at all.

So, if I could just sum up our approach. We do think there is a particular problem with lack of transparency around professional lobbyists-knowing that a minister has met one of them, doesn’t quite know what the issues are and what the clients are there. We would support much more disclosure about that, their clients, the issues they are lobbying on and their finances. The TUC is already fantastically open, transparent and highly regulated and we don’t understand why we have been singled out. You may disagree with us, of course, but there is nothing mysterious or secret about the TUC. There is also the problem of who needs to be registered. 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. Do we register all the staff or not, even if they don’t lobby anyone for a year because their issue is not in the limelight? So, we have an issue there.

We have no problem in being added to another register to reveal all the same things that are on there and all the other registers that we are already on, but we would be a bit resentful if we were singled out as some special category of people that needed registering. We think there is a basic problem here-that the real onus for transparency should be on those being lobbied. Whatever rules you have around lobbying, people will try to get round them, but they are all aimed at the same decision makers, so really the onus should be on the decision makers to declare their contacts and attempts to lobby them. That seems to us to get round a lot of the rather tricky administrative issues that we can see in the approach set out in the consultation document.

Sorry, I have probably spoken for too long but-

Chair: No, that is fine; very helpful.

Q256 Tristram Hunt: I agree with your analysis and I think in the Government’s proposals at the moment there is no appreciation of the broader civil society role of trade unions, and to reduce them to the same as Lowe Bell Communications or whatever seems a rather reductive approach. Can you spell out more in terms of the complexities of how trade unions, as you understand it, will have to apply themselves to the register? Obviously, you have the TUC but then you will have all sorts of individual unions; you might even then have regional branches. In terms of the consultation document at the moment, how will it affect union declarations?

Nigel Stanley: These are difficult questions. I don’t think the answer is clear in the consultation document, because one gets the impression that unions and charities and think-tanks were rather a last-minute addition to it. One can read the consultation document as being originally a proposal about third-party lobbyists with a few bits bolted on to it. But I think that is a very good question. It comes back to whom exactly do we register as lobbyists. Is a voluntary union activist in your town who comes to see you-not necessarily a constituent, but someone acting on behalf of the general interests of trade union members in Stoke-a lobbyist? I don’t know. It depends what your definition is. They are certainly trying to influence you, so in one broad definition they are; but are they a paid lobbyist for hire like Lowe Bell, who are doing it because they make money from it? I think that is so distant a part on the spectrum of lobbying that you can’t force them into the same compartment.

Q257 Tristram Hunt: That seems exactly right, because I will have branch members of a union of the CWU or the FBU come to see me, probably both as constituents and as members of trade unions. Whether I will then have to, on your idea, register them as being lobbyists, or they themselves will have to register, seems to me perverse.

Can you spell out your hesitations about those organisations whom you don’t think are covered by this? Do you mean campaigning groups and organisations such as the TaxPayers’ Alliance?

Nigel Stanley: I think the TaxPayers’ Alliance are a very good example because they are particularly opaque about their finances. They claim to represent taxpayers but they certainly do not ever ask me my views as a taxpayer. All we generally know about their financing, I understand, is that one of their main financiers is a tax exile from France who is not even a taxpayer. So, the idea that they are in some way representative-[Interruption.] I don’t wish to enter into controversy in my evidence this morning, but the idea that they are not covered in any way-do they come under this rather nebulous term "think-tank", which is an interesting catch-all? Some think-tanks are registered charities and very proper and precise, and other people call themselves a think-tank and are not registered charities, and may well be proper and precise in different ways but have very clear political alignments. I do worry that because companies and individuals have to declare political donations to political parties now-I think rightly so-there is a kind of new breed of quasi-American organisations set up to get round this, so people can give money for political campaigning without having to declare it. Fine, they should be allowed to do that, but we should know where people get their money from and how much they get and what issues they are pursuing. That is the real transparency gap, and that has not even begun to be mentioned in the Government’s consultation document.

Q258 Tristram Hunt: But it also seems to mean, does it not, that this slightly poisons the well of debate? Once you make think-tanks-whether it is the Centre for Policy Studies, the Adam Smith Institute, Demos or whatever-and trade unions lobbyists, the nature of political debate sometimes becomes a very mechanical exchange. Actually, however, what is involved-both on left and right-is a discussion and a search for ideas, rather than a utilitarian exchange of access for money, for influence, for policy.

Nigel Stanley: There is an interesting debate about what professional lobbyists can actually achieve. I often think that effective lobbying is not about the big political ideas and the big political issues. I recognise Members sitting around this table have a number of very different ideological views, and the idea that by somehow spending money on top-rate lobbyists you are going to shift those views seems to me absurd. It is in the narrow little bits of policy, the precise implementation, the detail, where I think professional lobbyists can help their clients. In some ways that can also be helpful to government. All of the meetings I have had with officials in the last year have been at their request, not my request, because they value TUC views and insights into the world of workplace pensions, which is my particular policy interest. Of course they talk to a whole range of stakeholders as well, and I have no complaints there is inappropriate access at all. But in terms of the narrow implementation-who gets this contract; what precise form does that regulation take, because that might benefit me or my competitors in some way?-that seems to me where more of the problem with lobbying is. There is a separate and important issue-but it is separate-about people with more money having more influence over political debate because they can fund more. But I don’t think you solve that particularly with a register, because it is rather obvious that the TaxPayers’ Alliance have as much money as they possibly want, and putting that on the register isn’t going to tell me anything-although I would quite like to know who gives them their money.

Q259 Tristram Hunt: Finally, without wishing to lead you in any particular direction, if you looked at the politics of this, would it be fair to suggest that on the one hand we have a Liberal Democrat manifesto commitment to have a register of lobbyists, and in the coalition carve-up there might have been views on the Conservative side of life that this would be a good vehicle to bring in the trade unions? Secondly, are there those within the professional lobbyist community who wish to undermine what might be a register for professional lobbyists by broadening it out to the Charity of Landscape Architects and whatever?

Nigel Stanley: That is a good interpretation of what is happening. There is a narrow and precise point about the role of professional lobbyists. There is not enough transparency about their clients, the issues they are taking on and how much they are receiving for that. I think there should be more transparency about that.

Trying to deal with all the other issues, some of which are real issues, using the same tool is not right. I was always brought up to think that you should use one tool for one purpose: the purpose it was designed for. Attempts to use a register for dealing with a whole number of different problems-you can’t put a screw in with a hammer.

Q260 Mrs Laing: If I may say so, Mr Stanley, that is something we should all remember-you can’t put a screw in with a hammer.

In trying to work out what we should do, may I go to Mr Kernighan first? You represent an enormous variety of charities and voluntary organisations. Do some of those organisations receive grants from government departments-from taxpayers’ money?

Ben Kernighan: Yes.

Q261 Mrs Laing: Do they have to apply for those grants?

Ben Kernighan: More often than not, yes, certainly.

Q262 Mrs Laing: In doing so, do your organisations then disclose what that money is used for?

Ben Kernighan: They would certainly disclose that, in that they will have some agreement with the statutory organisation that is providing them with a grant, in terms of what that is used for. They will provide summary financial information to the Charity Commission, as well.

Q263 Mrs Laing: Thank you. Do some of those charities seek to influence government?

Ben Kernighan: Yes, certainly they do. The Government often wants to be influenced by them and will frequently seek their views, because it will recognise the expertise that they have in terms of working with a particular group of individuals. For example, in working with people with disabilities and providing support-sometimes paid for by the Government-when at a local or national level they are looking to develop their policies, they will recognise that that charity will have real expertise, grounded on an understanding developed through the process of delivering those services.

Q264 Mrs Laing: Indeed. Can I just clarify that point? Would you agree that it is often the case that a particular government department will recognise beyond doubt that the organisation that can best implement its policy is a voluntary organisation that has the expertise?

Ben Kernighan: Yes, and furthermore they will sometimes also recognise that that charity can help the Government to influence their policy positively, not just to implement their policy.

Q265 Mrs Laing: Indeed, that is a very good point and I am glad we have put that on the record. Thank you very much.

Can I turn to Mr Stanley. Can you just remind us, Mr Stanley, what is your title within the TUC?

Nigel Stanley: I am the Head of Campaigns and Communications.

Q266 Mrs Laing: So, do you campaign?

Nigel Stanley: I do campaign, yes, but I would define the TUC as a campaigning organisation. We have a number of roles, but one of them is speaking up for people at work and trying to influence the public policy agenda and employer activities-to treat people better at work. That is why I find quite tricky this idea that some of the people who work at the TUC are lobbyists and some are not, because for anyone who works on policy, part of their job is influencing across the piece-whether it be Ministers, MPs or the media-the way public policy is agreed and decided in this country.

Q267 Mrs Laing: Thank you. You have anticipated my next few questions. That is very helpful.

Nigel Stanley: We are very keen on improving productivity.

Q268 Mrs Laing: That was very good, yes. Mine isn’t usually improved so dramatically; I should come to you more often. So, the TUC seeks to influence government?

Nigel Stanley: Yes.

Q269 Mrs Laing: Given that that is an open role and that everyone assumes that that is what you do, and you have just said that is what you do, what is the problem if you were to register your interest in influencing government?

Nigel Stanley: I don’t think there would be a problem in us joining another register that revealed the TUC was entirely open and transparent about what it did. Whether it would add anything to the sum of human knowledge having it in more than one place, I don’t know, but I think it would also be quite hard for us to do it if it was a list of named individuals. I don’t quite know how you capture the definition of a lobbyist in organisations like the TUC, or in many charities and voluntary groups-even think-tanks-as well.

If it was a list of organisations then, yes, we would be happy to join it. We would be a little resentful, though, if we were singled out as a special category of organisation that needed to be registered when, say, employer organisations-which have a perfectly legitimate role in influencing public policy in the same way that we do, and in many ways are rather analogous-don’t have to join that register. I think we would feel a bit cheesed off if that happened.

Q270 Mrs Laing: Thank you. Does the TUC gather money from its members in order to fund its activities?

Nigel Stanley: We are an umbrella body for Britain’s unions, whereby unions join as organisations and pay an affiliation fee, depending on how many members they have. That is our major source of income.

Q271 Mrs Laing: You have, over the years, been successful in many of the campaigns that you have run.

Nigel Stanley: I am not sure that all our member unions often appreciate that sufficiently, but yes.

Q272 Mrs Laing: I think you probably have and you are still there. What I am getting at here is that you stated earlier that you were concerned about those who have wealth and power. I put it to you that the TUC has wealth and power.

Nigel Stanley: Yes, but not as much as Mr Murdoch.

Q273 Mrs Laing: It is a matter of opinion whether anyone has as much as Mr Murdoch, but I do not think he is the touchstone. Would you agree that the TUC has wealth and power?

Nigel Stanley: Yes, I think that’s right. Let’s answer that question more seriously. I think the reason why organisations like the TUC and other civil society organisations arise is that we are speaking up for people who, just left to themselves, would not have much of a voice-ordinary people without much wealth or money. By aggregating their interests together in a democratic umbrella body and seeking to represent their views collectively, yes, I think we bring some weight and influence to public discourse. I think it has more to do with the fact that we have, between our unions, over 6 million members-which makes us the biggest voluntary movement in Britain-that gives us or should give us some entry into civil society and the policymaking process. Actually, in terms of our central resources in the TUC they are not that huge. I don’t have big budgets generally for my campaigns. I have to think of smart arguments, rather than things to spend money on.

Q274 Mrs Laing: Let me just clarify your argument. You were saying that the exercise of power is not always done through the spending of money. It can be done through the actions of a great many people.

Nigel Stanley: Indeed.

Q275 Mrs Laing: You have just made the case for the power of the TUC.

Nigel Stanley: Yes.

Q276 Mrs Laing: So, even if it does not have wealth, it has power?

Nigel Stanley: Well, it has some influence; I am not sure power is the right word. We live in a pluralist society, and that is a good thing, and I think that public policy discourse should recognise that and should recognise there are legitimate interest groups. Trade unions are a legitimate interest group, employer bodies are a legitimate interest group. I think some of the concern about this is that some people, because they have wealth, power, connections, can barge a bit more into that discourse than perhaps they deserve, given whom they represent or the interest groups they represent. I think that is the wider concern that I meant to refer to in my opening remarks.

Q277 Mrs Laing: Are you saying then that there is a difference between power and influence?

Nigel Stanley: Yes. I think governments have power; people can seek to influence them. If they are successful at that, then you could argue that they are shaping the way government exercises its power. I am not sure that unions have power. We almost were formed because ordinary people at work have very little power. The relationship between an employer and an employee is fundamentally unequal, but by joining together and giving workers a collective voice you restore some of that balance-both legitimate voices, but you restore that balance. To say that we have power is not quite right, but to say we have influence, yes, and to say that governments of all stripes should listen to us and recognise that we are a serious organisation with a serious role in civil society and a pluralist democracy is right.

Q278 Mrs Laing: I would entirely agree with you on everything you have just said, for what it is worth. But what I am getting at is that in your opening remarks you showed some concern about those who exercise wealth and power. I am seeking to find the difference between the TUC and those whom you put in that category who have wealth and power. That is why I was putting it to you that the TUC has wealth and power, but I accept that perhaps it is not power, but influence. So are there other bodies or organisations that you see as having not just influence but power? Why should the TUC be treated differently from those other organisations? Who are those other organisations that you are worried about?

Nigel Stanley: I think I may have used the precise term "power" in a rather loose way and in different ways in different arguments; I think you are right to pick me up on that. In the way that people talk about trade union power, people on our side of the argument will talk about other organisations having power. In a formal sense that may not be true, because governments, we hope, act without being influenced in an inappropriate way for a power relationship. But there is a sense that, because governments respond to public opinion and what is in the media, it is not unfair to use the word "power" if you are talking about the power of the media to set an argument and set a debate. That may not be a very precise transmission belt-that the media can therefore get minister X to do thing Y on day Z-but it does mean that the media, by setting the terms of public debate, by influencing people, have a pretty powerful influence, but it is a powerful influence rather than direct power. So, perhaps that is what I meant in my earlier remarks about power.

Q279 Mrs Laing: Thank you for clarifying that, but I don’t think it adds much light to differentiate the media. What I am trying to get at is, am I right in thinking that you are putting the case that there are organisations that should be regulated by the Government because they are lobbyists, but that the TUC is not one of those organisations because they are not lobbyists? What I am getting at is, what differentiates the TUC from those people about whom you are concerned in the exercise of their influence, power, wealth or whatever it might be, in order to affect the actions of government?

Nigel Stanley: My argument is that we can see a strong role for a register for the precise group of paid-for third-party lobbyists. We think there is a problem when you go wider than that to include a random list of organisations, as in the Government’s consultation paper-unions but not employers, think-tanks but not campaign groups. We would not object to being part of a register if absolutely everybody was on it, but I can see problems with defining who everybody is and what organisations are covered by this, which makes us sceptical that this is the right route to go down. That is why we think that the onus is on ministers and special advisors to declare who is lobbying and seeking to influence them, rather than trying to get everyone who seeks to do that-whether successfully or completely unsuccessfully and ineffectively-to declare their interest. Does that clarify what I am saying?

Q280 Mrs Laing: It does, thank you very much. Can I ask Mr Kernighan if he has anything to add to that?

Ben Kernighan: Yes. The perspective we are coming from is that there is a very high level of public trust in charities, so we don’t think charities are what is leading to a decrease in trust in lobbying activity, but we think that lobbying activity should be properly regulated. We do not think what is proposed by the Government would do that, because it does not address two issues. It does not put in place a code of conduct and it does not address people reporting the issues on which they are lobbying. Because what charities lobby on is so narrow and self-evident, we don’t think it would be of value to have charities on this particular register.

There are some practical issues for charities that it is important to consider. 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. So, it would need to be proportionate if charities were to be involved. There is another issue, which is that quite a lot of small organisations, small charities, are nervous about taking on any kind of activity in influencing policy, and we would not want them to be deterred from doing that, in the sense that this is seen as another obstacle for their engagement, particularly small local charities.

Mrs Laing: Thank you very much.

Q281 Simon Hart: At last, I think, we have got suddenly to where I hoped we would get, which is to talk about "what" rather than "who". It seems to me that we have spent quite a lot of the evidence session talking about who might qualify rather than what might qualify. Surely-and I would be interested in your view on this-you can have good corporate lobbyists and bad charitable lobbyists. Do you agree?

Nigel Stanley: It depends whether you mean good as in effective, or good as in moral. Which do you mean?

Simon Hart: Well, to be good I think you need to be moral. I should have clarified that.

Nigel Stanley: I think that is right. In any democracy it is entirely legitimate for anyone to put forward their views. It is legitimate for them to seek advice on how best to put forward those views, and I don’t think you can object to that. One can be a bit worried that one side of the argument may have more access to that kind of good advice, which may make it harder for politicians to hear both sides of an argument properly; but there is certainly nothing fundamentally immoral about anyone attempting to influence decision making in a pluralist democracy.

Ben Kernighan: I think my answer to that would be that to be a charity in law you have to be working for the public benefit. In order to be a charity, most of your activity also has to be around providing services. You can, from time to time and to varying degrees, lobby on the basis of the knowledge that you get from the provision of those services. Most of the time you will be accountable to an unpaid group of trustees and that group of trustees, by law, has to ensure that the activities of that organisation are for the public benefit and consistent with their charitable objectives. So, I think there are a range of reasons there, which means that more often than not lobbying activity within charities will be for the good. I agree with you, of course, that in theory at least there will be good and bad lobbyists in a variety of different sectors. That is also why we are not making the general case that charities should not be subject to good practice in terms of lobbying-something this consultation misses out-or indeed in terms of transparency more generally. I am making the case that for the proposed register, there wouldn’t be value because so little information is required and because the public generally are aware of what it is that charities are lobbying on, because they are only allowed to lobby on their charitable objectives.

Q282 Simon Hart: I’m not sure I am any clearer, because surely the whole purpose of us having this inquiry and of the introduction of the register in the first place is to deal with a problem, either existing or potential, in a proportionate manner. But so far-and you must be the sixth or seventh group of witnesses we have had here-nobody has been able to put their finger on precisely what the problem is, existing or potential. Given what you have just told us, unless we can identify the problem, should we be doing this at all? We can make the argument-which I happen to support-that this is a complete waste of time and we shouldn’t be doing it, or that it has to be much more of an all-encompassing proposal that deals with a problem that we can all clearly identify, and which there is evidence to suggest exists in the first place. There is a lot of strong feeling about it, there is a lot of anecdote, but nobody has actually sat where you are and said, "This is the problem". When I have asked the question of previous witnesses, "What was David Cameron meaning when he said lobbying is the next big scandal?" nobody, but nobody, has been able to answer the question. So I am optimistically hoping that perhaps that drought of answers is about to come to an end. Perhaps you can help us.

Ben Kernighan: It would seem sensible to ask David Cameron what he-

Simon Hart: Unfortunately, he has not come before the Committee but I would very much like him to. We have to settle for the Deputy Prime Minister here.

Ben Kernighan: He is obviously subject to a great deal more lobbying than I am, so he will have an insight that I do not have. What we know is that the level of public trust in the political system has taken a dive over recent years, for a number of different reasons. There is a public perception that part of that is to do with the extent to which there isn’t a sense of fairness regarding who influences that political process. To be clearer about who is influencing that process and on what issues, and to have enshrined some good practice around what good lobbying activity is, could go some way to increasing both public trust in and public understanding of the political process. I agree with you that what is proposed-which doesn’t make many requirements and doesn’t, for example, put in a code of good practice or require people to say on which issues they are lobbying-would not achieve a great deal. So I have some sympathy with your view that either more needs to be done, or that to do this amount, on a cost-benefit analysis of cost/regulatory burden versus benefits, may not achieve that end.

Nigel Stanley: What is the precise problem? I think there is a narrow but real problem about the transparency around professional third-party, paid-for lobbyists, whether they are public affairs companies, lawyers or whatever. I think there is insufficient disclosure about who their clients are and what issues they are seeking to raise. Having that in the public domain-

Q283 Simon Hart: Disclosure to whom?

Nigel Stanley: To the public, the electors, and sometimes perhaps even those being lobbied, who may not be quite aware of the full agenda. So, there is a strong argument for a degree of openness. Going beyond that gets you into fantastically difficult areas where there are genuine issues of debate but they are rather different, which goes back to my point about the hammer and the screw. I think there is an argument for what I rather suspect was the first draft of the consultation paper, which concerned paid-for lobbyists. One can go through the detail and argue it in various ways, but there is an issue there. Trying to bring these other things into this exercise is a mistake. That is another series of debates and we might have proposals on that, but I am not sure that this is the best place to capture those.

Q284 Simon Hart: I have one further question, which deals slightly more precisely with charities, and particularly arm’s-length lobbying as opposed to third-party lobbying, if there is a difference. We touched in earlier evidence sessions on the manner in which some lobbyists and some charities work, which is to provide the information and the ammunition to facilitate its members to undertake the lobbying. One rather good example, which I am keen on, is, oddly enough, the Women’s Institute who undertook a very effective lobbying campaign on food labelling, which was organised at a constituency level. As I have indicated, I am very happy and keen to be lobbied by as many different people as possible and I have never been conned by a paid-for lobbyist into not understanding where he came from or what he was trying to do. But I think it would be a mistake to think that charities can’t be extremely aggressive, and often very effective and penetrative, lobbyists. I personally have met many, and full marks to them for being so effective. But in those circumstances, do they fit into the lobbying model we are looking at, as I suspect they don’t, given what you have told us so far? If they do, who is the lobbyist? Is it the member who comes to a Friday afternoon surgery in one of our constituencies; is it the person behind them who is providing them the information and the technique to be as effective as they possibly can; or who? Again, if you cannot answer that, would these people appear on a register anyway? Should they?

Ben Kernighan: Clearly, you could not register the members of even the major charities because you would have a register of most of the population of the United Kingdom. There are major charities that have millions of members who at certain points may get engaged in some kind of activity in terms of trying to influence. If there was to be a register, you would have to have some way of defining a lobbyist as somebody who perhaps spent most of their time on lobbying activity. It would be impractical for each member of the Women’s Institute to be on such a register.

Simon Hart: Of course-which is my point, really. They are effective lobbyists, they are attempting to influence government through MPs-either members of government or backbenchers-and very good at it they are, too. They are, by my definition, lobbyists, but they should not be anywhere near a register; but that is just an opinion. Thank you.

Q285 Mr Chope: Do you both think that it would be better not to have any legislation than what is proposed in this consultation paper?

Nigel Stanley: I am not sure there is a well-thought-through proposal in the consultation paper that could be legislated. I think at its kernel is an idea about a register for third-party lobbyists, and one can discuss the detail but there is an argument for knowing that. Whether people fall for third-party lobbyists is a different question. I think people need to know what is going on. That is a transparency argument. Having a proposal that included trade unions but not employer associations, think-tanks but not campaign groups-I don’t see how you could have that kind of legislation. In using the kind of rather loose language there at the moment, it is not legislatable. It is a very hypothetical question, because I don’t think you could even draft legislation with that in.

Ben Kernighan: A better solution than the one proposed would be to have a register that makes it clear who was lobbying whom on what and put in place a code of good practice. I think I am neutral on whether or not the proposal as it is is better than nothing, but I am very clear that with the proposal as it is there would not be an added benefit to either charities or the public if charities were engaged with it.

Q286 Mr Chope: Underlying all this is alleged to be public disillusionment. There was quite a lot of public disillusionment in my constituency during the lifetime of the previous Government when, in the same way as I have to explain now that the Government is constrained by the coalition agreement, I then had to explain that the Government was constrained by what was called the Warwick Agreement. Mr Stanley, I wondered if you could tell us how the Warwick Agreement came about, whether there was transparent lobbying in advance of it and so on?

Nigel Stanley: I am not sure I can provide the insight that you want, because this was a process within the Labour Party and the TUC is not affiliated to the Labour Party and most of our unions are not. I know many people in the trade union movement who would have a diametrically opposite view of the last Government-who would have said they were terrified of doing quite common-sense, practical things because they were so terrified of being tagged as being in the pocket of the trade unions. There is more than one way to look at that particular relationship.

Q287 Mr Chope: Do you think that there was a problem about the Warwick Agreement yourself?

Nigel Stanley: I think political parties should be free to have whatever policymaking mechanisms they wish.

Q288 Mr Chope: But this was not a question of a political party. This was a group outside politics, of trade unionists who were funders of the Labour Party, basically making their continued funding and support conditional upon the Government of the day, the elected Government, pursuing particular political policies.

Nigel Stanley: I wouldn’t agree with your characterisation that it was some way outside the Labour Party. As I understand it, although I wasn’t there and am not an expert, what happened at Warwick was a meeting of Labour’s national policy forum within the party’s democratic structures. I think that it would be a dangerous road to go down to start legislating for the internal democratic structures of political parties.

Q289 Mr Chope: So you do not think that what happened at Warwick would be a cause for public disillusionment, or sufficient cause to want to have legislation and more regulation?

Nigel Stanley: I think it is probably one of the reasons why you are a member of the party you are, and why people vote for you rather than for some of the other people around this. It is in the public domain, people have that information, and they know about it before they go to the ballot box. I am very happy that those issues are decided by the people when they go to cast their votes.

Q290 Mr Chope: I think we are probably in agreement on this: less regulation, more transparency and leave people to judge on the basis of what they see as to where they wish to put their support in political elections?

Nigel Stanley: I think sometimes you need regulation to secure transparency, but I think the objective of all of this is to secure transparency.

Q291 Mr Chope: You do not think the way this draft is going is the right direction?

Nigel Stanley: I think I have already explained why.

Q292 Chair: Are political parties lobbying organisations?

Nigel Stanley: It depends how you define lobbying, is the only answer to that, but I think it does go to some of the problems. Am I lobbying you this morning? That is an interesting question; I will leave you to decide that one.

Q293 Chair: So it is possible that political parties may have to be registered under the current proposals if the definition was broadened?

Nigel Stanley: It is possible, although of course you could argue, just as unions are registered by the Certification Officer and charities are regulated by the Charity Commission, so political parties are highly regulated and have to declare all their sources of income. I think that is right. That is an example of where you did need regulatory or legal changes to secure transparency, and I think that is a good thing. But adding political parties to provide exactly that information again in a different register strikes me as a bit bizarre, given they will all be available in your internet browser.

Q294 Paul Flynn: Your presence here this morning is proof that the lobbying industry has been very successful in lobbying to ensure that this issue has not become one concentrated on corporate lobbying but is spread as wide as possible to make the future register as shallow as possible. You were not invited to the previous inquiry, either of you, because the previous inquiry never thought for one moment you were the problem. Do you think that when the Prime Minister talked about the future scandal, he had your union or your charities in mind as causing that scandal? If he didn’t, what did he have in mind?

Nigel Stanley: Like Ben, I would not claim to have any special insight into the Prime Minister’s mind. I think that he may-and this is a guess-have been using the word "lobbying" to talk about corporate relationships. You could say that News International was a fantastically successful organisation in lobbying ministers of all parties. They didn’t do it through corporate lobbyists; they didn’t need to. They seemed to have their own office in Downing Street for at least some of the time. So there is an issue around that-that excessively close relationship between politicians and one narrow commercial interest. That is rather different from the wider concern. But to answer your first question, you are right, and of course the lobbying industry does employ an enormous number of smart people, and one should only admire their ability to have broadened this debate into these fields.

Ben Kernighan: I am pretty confident that most politicians and most of the public would not see charitable lobbying as being a major cause of the problem. The evidence for that is the very high levels of public trust and confidence that exists in charities, and indeed the public nature of a lot of their lobbying. So the public know that we do it and generally the public are happy that we do it. I don’t leap from that to saying therefore that there shouldn’t be any more transparency in what we do under any circumstances, but I do say you have to think about which circumstances. It has to be proportionate and must not affect small charities in an unhelpful way. It has to add to what the public already know and understand about charities.

Q295 Paul Flynn: Would you accept that the lobbying industry was shocked by the previous report by the Public Administration Committee that called for a much stronger register than they were expecting? They now look at the present Government and decide how they can weaken any future lobbyists, so they pick on cuddly charities to be involved-nobody wants to be beastly to them-and appeal to the erogenous zones of the Conservative Party on trade unions, because the Government and Conservative MPs find it almost irresistible to take an opportunity to give the trade union movement a kicking. But by dragging this into the wider group, do you think that this is the strategy of the lobbying industry, as presented by them in a unified form: "Let’s not concentrate on the corporate lobbyists who were involved in previous scandals, but let’s apply it to everybody so we can’t have stricter regulation"? Isn’t that what is behind all this and why you are here?

Nigel Stanley: I think the waters have become rather muddied. You have at this table different yet in some ways similar organisations, in as much as I think people know what we do. They may agree or disagree with us based on what we do, but there is nothing secret about us. Making us be more transparent about what we are already highly transparent about achieves very little. However, the more secretive world of professional lobbying-in which there are many perfectly good ethical performers, but there is a degree of secrecy-seems to me a much more valuable subject for investigation and transparency.

Q296 Paul Flynn: Mr Kernighan, I think we all accept the benign nature of the mass of charitable organisations, but do you accept that there are lobbying wolves in charitable sheep’s clothing that are active in trying to corrupt the nature of charities?

Ben Kernighan: There are more than 100,000 charities.

Q297 Paul Flynn: Would it be helpful if I gave an example of one? The Depression Alliance was set up in 1990 in order to publicise depression as an illness. It may be very successful, but 300% more people take time off for depression than ever before. It was set up ostensibly as a charity, as a patients’ association, but was in fact 100% funded by pharmaceutical organisations selling antidepressants. There are many other examples of lobbyists cleverly using the sheep’s clothing of charities in order to disguise what is a crude commercial aim to sell their products.

Ben Kernighan: The way charitable law is set up means that charities can only act, by law, if it is for the public benefit and they can only lobby on issues related to that. If there are abuses of that process, there is a regulator in place. I would be open to considering other ways in which any abuses should be dealt with, but I am not clear that the current proposals would help solve the problem that you are suggesting, which, I would also say, in the scale of the more than 100,000 charities, is a small problem.

Q298 Paul Flynn: If you take the activities of charities in this building, where there is an investigation going on into all-party groups-virtually every illness has its own all-party group, and many of these have services provided by the pharmaceutical organisations, which provide remedies for the illness in question-is this a matter of concern to you? Is this a way of lobbying that, although ostensibly charitable, is really deeply commercial and should be considered as an area the register should cover?

Ben Kernighan: I think most charities think very carefully about where they accept money from, the strings attached to those resources and the expectations that funders have. Charities are usually careful in terms of the strings that can come from rich individuals, from government or from companies. But it is their job, and I think they mostly do a good job in ensuring that their activities are for their charitable purpose and that they act independently.

Q299 Paul Flynn: As two people who have studied the evidence of the witnesses coming before this Committee, do you think it is the duty of the Committee to look beyond the evidence as presented by professional persuaders? The people who come before us actually train people on how to give evidence. Should we look beyond that, as the previous Committee did, and ensure that their conclusions are based not so much on the evidence provided by those who have a vested interest in selling their own case but, in the words of the past Prime Minister, recognise that there is a paramount need to restore the reputation of Parliament and to avoid the potential great scandal that David Cameron envisaged in opposition?

Ben Kernighan: Absolutely, yes. Lobbyists are one stakeholder in relation to this consultation but the public is an important other stakeholder.

Nigel Stanley: I think there is an important point about the reputation of politics and democracy, although I think the responsibility lies primarily with politicians to restore faith in politics. I come back to my point that trying to regulate or register everyone who seeks to influence politicians, ministers or special advisors is really quite hard to do, although one should have more transparency around all the people trying to do it in various ways, using different routes perhaps. But the prime responsibility is with the politicians to behave properly, to ensure that they seek views on all sides of an argument when they are taking decisions, and to be open about the contacts they receive, rather than having random slots for official meetings that are subject to freedom of information requests and declarations, and for private or personal meetings where the same things can be discussed, but which are not subject to that. That leads to a lack of trust and people seeing conspiracies even when there aren’t any.

Q300 Paul Flynn: Just a final question, Mr Stanley. You said, quite fairly, that if you are going to be regulated, so should the employers associations, and that then, the register becomes fantastically difficult. Don’t you think that introducing complexity is the aim of the lobbyists, making it as complex and impossible to regulate as possible, so that they can’t come up with a strong register that is targeted on the real problem: the corporate lobbyist? Isn’t that precisely what the lobbying industry has done in this instrument to defend their bad practices?

Nigel Stanley: I think I have already answered that question by saying, essentially, yes. There is a particular issue around third-party, paid-for lobbyists that a register would help illuminate. I think there are a whole set of other agenda items but they are not best caught with that register.

Paul Flynn: Thank you.

Q301 Chair: Nigel and Ben, we had Tamasin Cave here from the Alliance for Lobbying Transparency and she told us that there was a massive disparity in the financial resources that various lobbyists can bring to bear. What is your view on the importance and centrality of financial disclosure in any register of lobbyists?

Nigel Stanley: I think it is important, because seeing how much money is being spent-without necessarily getting down into the precise details, but in broad bands-does provide some sense of what resources are going into the influencing process.

Ben Kernighan: I agree with that. As I understand it, the United States has a model-clearly, there is some complexity involved-in which people are asked roughly to assess the level of resources.

Chair: Ben, Nigel, thank you very much for your time this morning; it was a very enlightening session. Thank you so much.

Examination of Witness

Witness: John Wotton, President of the Law Society, gave evidence.

Q302 Chair: We now have Mr John Wotton, President of the Law Society. Welcome, John. Thank you for joining us this morning. You know we are inquiring into lobbying. We are coming, hopefully, towards the end of our inquiry and you are one of the last witnesses that we are going to see. Would you like to make an opening statement?

John Wotton: If I may, just briefly. First of all, thank you very much for inviting me to give evidence to the Committee this morning. The Law Society, as you will be aware, is the professional body for the solicitors in England and Wales, who number about 150,000 at present. It is, in a sense, a representative body rather than a regulatory body, as the regulatory function is delegated under the Legal Services Act to a separate board: the Solicitors Regulation Authority. The Law Society is very supportive of the principle of transparency in lobbying. We recognise that, as a professional body representing our members, we are from time to time a lobbying organisation ourselves, a responsibility we take quite seriously as law reform is really at the heart of the Law Society’s mission.

We have considerable experience of the development of lobbying registers from the European Transparency Initiative, in which we have engaged very actively from an early stage. The Law Society is registered as an interest representative under that register in its role as the professional body. We have also engaged in quite detailed discussions with the European institutions on the definition of lobbying specifically in the context of legal advisors. The scope of the European Transparency Initiative, and indeed the potential scope of the Government’s proposals on lobbying, would extend to lobbying government departments as well as Parliament, and potentially even a wider class of people. In many cases, therefore, it could extend to interactions between individuals-whether people or corporations-and government departments in their capacity as people engaged in the administrative process, whether themselves applying for a decision or on the receiving end of an investigation or other inquiry. I don’t think the role of legal advisors in that process is normally regarded as lobbying. For that reason we have had discussions with the European institutions, which have led, I think, to a fairly well-crafted exclusion for legal advice and representation, designed to particular processes and structures in Europe. One of our core points in relation to the Government’s proposals is that some similar exclusion would be appropriate in any register that was contemplated for this jurisdiction.

Another distinction we regard as quite important is whether the register is voluntary or statutory. A voluntary register presents a number of difficulties. One is the more general point that if it is voluntary, it would be possible for people to engage lobbyists who are not on the register and so bypass the transparency process. The other is that, quite rightly, legal professional privilege and the duty of client confidentiality binds a lawyer and the only basis on which that confidentiality can be breached is with the express consent of the client. That makes it quite difficult to deal with the European Transparency Initiative voluntary provisions. If the register were statutory, then, with proper notification to the client, the duty to disclose would, in certain circumstances, override the duty of confidentiality and make it possible for the purposes of the register to be achieved if any activity in which lawyers were engaged strayed into the area of lobbying.

Lobbying has not become a very big activity as such for lawyers in this country. Very few law firms have identified a specific public affairs or lobbying activity. Most of their activity-if it could be described as lobbying-would at most be incidental to their role as legal advisors and representatives in proceedings.

That is all I want to say by way of introduction, if I may, but thank you.

Q303 Fabian Hamilton: Mr Wotton, welcome. The Government’s consultation paper claims that their aim is to increase the information available about lobbyists without unduly restricting lobbyists’ freedom. Do you think that the current proposals for a statutory register of lobbyists will achieve the Government’s aim?

John Wotton: I think they can do so because they are designed to make transparent the capacity in which a lobbyist is lobbying, whether on their own behalf or on behalf of an identified client, and I think that is a very important distinction. If an organisation is lobbying on its own behalf then it is transparent to all-the institution and the public-who they are and what they are about. It is only where there is a client involved that there is an additional need for transparency.

Q304 Fabian Hamilton: Notwithstanding what you said in your opening remarks, the Law Society has historically been against the idea of a voluntary register of lobbyists. In your written evidence you state that a statutory register would appear to level the playing field. Can you add to the comments you made earlier as to why you think a statutory register would be preferable? You made some very important points and I wonder if you could add to that.

John Wotton: Yes. The key public interest point is that unless the register is statutory, it is difficult to see how it can become observed universally unless there are other non-statutory and non-transparent sanctions for not registering. One of the unsatisfactory aspects, for example, of the voluntary register in Europe is the spoken or unspoken threat that parliamentarians or officials will not speak to you unless you are on the register, even in matters where properly, in the interests of the client, they should do so. That is not the sort of process-it is not transparent and it is not fair, whereas a statutory register should avoid that. I don’t think it is special pleading in relation to lawyers, though, to say that the statutory register provides a more practical solution to balancing the duty of confidentiality with the public interest in disclosure than any voluntary arrangement could do.

Q305 Fabian Hamilton: Do you think that charities, therefore, trade unions-we have just heard from them-and law firms, obviously, should be on that statutory register of lobbyists?

John Wotton: You mention three quite different categories. A trade union is an example of a representative body where it is clear for whom they are engaging in lobbying activity-for their members. It seems to me there is no great difference in principle between a trade union and a professional body like the Law Society or the Institute of Chartered Accountants in England and Wales, or indeed a trade association representing an identified group of companies. I am not sure that I would understand a logic that said that trade unions should be exempt whereas professional associations should not. So that would be one question.

I don’t claim any great expertise on charities, to be honest. I would have thought that if a law firm is retained by a charity, whether on a pro bono or a paid-for basis, the interest of transparency is broadly the same. If it were thought that there should be, in terms of greater accessibility, an exemption for pro bono arrangements on behalf of charities, I doubt whether that would seriously undermine the public interest. But, as I say, I claim no special expertise in that area.

Q306 Fabian Hamilton: I suppose the difference here, and it may be a false difference, is between lobbyists who carry out lobbying for private gain-for the profit of the lobbying organisation-and those trying to do it for the public good: Greenpeace, Friends of the Earth, Amnesty, for example, charities that just want to promote a better environment or fairness and justice in parts of the world. They are not doing it to make a profit. They are not doing it for shareholders. They are doing it because they believe they want the world to be a better place, through their lobbying of parliamentarians. Is that a false difference, or is it all the same thing?

John Wotton: I don’t see it as a difference. As you put it, it seems to me part of the principle, which I think is rightly identified in the Government’s Green Paper, that where organisations are lobbying on their own behalf, they should not have to register. It is fairly clear who charities like Greenpeace or Save the Children are, and I don’t think any public purpose would be served in placing them on the register. On the other hand, if they retain a lobbying organisation, presumably it is just as important that Parliament, government and the public should know that that organisation is representing Greenpeace or Save the Children as it is that it is representing Unilever or ICI or whatever.

Q307 Fabian Hamilton: Surely the important thing is that parliamentarians know that that third-party organisation is representing those other organisations, rather than whether they are doing it pro bono or not. Is that relevant, the pro bono aspect? For example, if a law firm had a passion about the environment, justice abroad or prisoners and it was happy to represent Amnesty for the public good and for the good of people who were being perhaps tortured in jails abroad, but it didn’t want to charge a penny because it felt it was a public benefit, is that different from that same firm taking on a client for profit? Should there be a distinction there?

John Wotton: I am not convinced there should. In professional terms, the client is still a client whether the engagement is pro bono or for reward, and the professional duties to the client are the same. The interest on the part of government or Parliament, or indeed the public, in knowing on whose behalf this law firm is acting is probably just the same whether it is pro bono or paid for. I think it most unlikely that such activity would be concealed, though. Generally, a law firm engaged in socially responsible pro bono work, as long as the client permits it, would wish it to be known.

Fabian Hamilton: Yes, absolutely. Thank you. That is very helpful.

Q308 Mr Chope: Can I extend your argument about the need for confidentiality? What about newspapers? A lot of newspapers have undisclosed agendas on particular campaigns. How do you think they could be brought into this net, or do you think they should be?

John Wotton: It is a very interesting question and not one that I have ever considered, and again I claim no particular expertise on the press and media as such. For a news medium, it is at the heart of the agenda-and a requirement, of course, for broadcasting media-that they be impartial, so they shouldn’t be carrying a torch. Equally, broadcasters and newspaper proprietors are commercial organisations that may engage in lobbying in pursuit of commercial interests, just in the same way as any other commercial, industrial or financial company might do. I am not sure that I see a need for any very different treatment. If a media organisation is on a campaign, it is generally fairly clear that it is on a campaign and its editorial content will make that clear. That does seem to me rather different from lobbying, though. It seems to me to be part of the fundamental role of the press.

Q309 Mr Chope: But it may be that the campaign is encouraged by the fact that one of the people on behalf of whom they are campaigning is giving them a lot of advertising revenue, editorial content or help in some way. How does that differ from the situation you are describing with your clients? You are saying you have to have a statutory register, because otherwise you wouldn’t be able to disclose on behalf of your clients that you are lobbying on behalf of those specific clients.

John Wotton: This is trespassing rather close to Leveson territory that it’s probably not appropriate to go into. But if a law firm is advising a newspaper, then I can’t see that there is any difference in terms of the duty of confidentiality, the right to legal professional privilege or the public interest, as compared with any other client, whatever their interests. If a firm is advising on a lobbying campaign, the same level of transparency should be required whoever the client is lobbying for.

Q310 Mr Chope: So the Law Society thinks it would be a worthwhile exercise having such a register, provided it was a statutory register?

John Wotton: I think so, provided it is a statutory register, provided that the area of legal advice and representation in proceedings, decision making and so forth is carved out and provided the level of representation is appropriate. Perhaps a pragmatic approach to not just law firms but to all organisations where lobbying is only incidental to their other activities should also be looked at. One might envisage a situation in which a client who wishes to produce a paper to lobby Parliament or government asks for legal advice on all or part of the content, which might be provided as legal advice. The legal advisor would have no hands-on involvement in the lobbying process. If they entered or took part in any meetings, they would be doing so quite transparently as a representative of the client in just the same way as if the client used their in-house lawyers for that advice. Under the current proposals, that would be regarded as lobbying in your own interests and not requiring specific registration. As we said in our initial evidence-I must emphasise that we have not yet responded to the Government Green Paper; we are still formulating our thoughts-there may be some scope for a de minimis or incidental lobbying type of exemption.

Q311 Mr Chope: Say we are about to discuss the Finance Bill in Committee. You are a firm of solicitors; you have a big client with global interests; you want to lobby on particular parts of the Finance Bill, perhaps dealing with exploration and the tax regime or something else. How do you see this working? Do you think that when you write your letter to the Treasury saying how you would like to see these provisions tweaked in a particular way, you should say, "By the way, I am writing on behalf of"-whatever large oil company is the client? How do you see that working?

John Wotton: I do see it working normally, rather in the way you have described. I don’t think a law firm would normally write a paper to Government where it was putting a case on behalf of a particular client without disclosing that to the recipient. Normally speaking, one is engaged in a transparent capacity as legal advisor and representative. Occasionally a law firm may put in their own representation but then they would make it clear that those are their own views and not those of their clients. The professional ethical standards and code under which solicitors and barristers operate contain general principles that would certainly mean that any misleading of government or Parliament as to the capacity in which representations were being made would not be regarded as good professional conduct.

Q312 Mr Chope: I am not suggesting you would be misleading. Have you, in preparing your response, worked out what definition of lobbying you think is best?

John Wotton: No. We are still in the process of that exercise, but we do think that aspects of the UKPAC definition are perhaps unduly broad and that an exemption for legal advice would be helpful, just in the interests of clarity.

Q313 Mrs Laing: I don’t think I really have to declare an interest but, erring on the side of being careful, I should declare that once upon a time I was a member of the Law Society of Scotland but have not been for many years. I have not paid a subscription for many years, either; nor, as I keep on telling my constituents, do I carry professional indemnity insurance and I can’t give them advice. Mr Wotton will understand that if nobody else does.

John Wotton: Particularly in the case of your world, if I may say so.

Mrs Laing: I was interested in what you said in your opening remarks-that lobbying is incidental to the work of your members. I was trying to think if there are any obvious examples of the way in which your members might become involved in what might be deemed as lobbying, and where the fine line can be drawn between acting on behalf of or giving advice to clients, and lobbying on their behalf. If a firm has been advising a client, or indeed putting the client’s case in law, at what point does it become lobbying if the firm is then making the client’s case to government, let us say? If that is not an easy question to answer, then that itself is an answer.

John Wotton: Yes. I think there are principles that would guide one towards an answer. 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. It might be regarded as outside the definition if it were all done in the back room-providing legal advice to the organisation that then represented itself in all dealings with Parliament.

Q314 Mrs Laing: Thank you. I can think of an example that concerns an accountancy firm, but I think it is the same principle as a law firm, where a large company is advising a professional body on a matter of tax and VAT. There was a point where the company was representing the professional body in writing on an appeal against VAT and so on. But now the professional body has decided to put the case to government that the law in this area should be changed, and therefore the accountancy firm is now seeking, on behalf of its client, to change the law. Would you say that that goes over the line, the grey area?

John Wotton: I think the case you describe has the potential to fall within a sensible definition of lobbying, yes. If there were a statutory lobbying register, I anticipate that the Law Society would register and if its tax law committee, let us say, had proposals on law reform to make they would be put forward within the scope of that registration.

That reminds me of a point I did wish to make, and that is the practicality of identifying the individuals within an organisation who would be identified in the registration. If the registration extended to professional bodies, I think that would be pretty cumbersome, because a professional body like the Law Society has views on law reform across an extraordinary range-from legal aid at the one end to company and tax law and international law at the other. In order to be effectively representative of the wider profession, of course we endeavour to engage as many of our members as possible in that activity. I think it would be unfortunate to be constrained to certain named individuals in any lobbying activity that we were to take part in. I don’t think that would be in the interests of the legislative process.

Q315 Mrs Laing: Likewise, when the matter is examined from that angle, at what point would there be a conflict between preserving client confidentiality and privilege, and an obligation for disclosure in a statutory register?

John Wotton: If the professional body is making representations in what its members believe to be the public interest then there is no client, as it were, and no duty of confidentiality arises. The professional body would not normally be acting as a legal advisor to any individual member or firm, so again that issue would not arise. But if a law firm is putting forward a paper or a submission, I think it should be clear in what capacity it is doing so. If it is in fact acting on behalf of a client, I would have thought that the principle of transparency requires the identity of the client to be disclosed.

Q316 Mrs Laing: That is encouraging. Taking that further, you would not then have a problem with a statutory register?

John Wotton: No. I think the statutory register is potentially practical for lawyers, because a statutory duty of disclosure in the circumstances-probably quite limited-in which it applies to a law firm’s activity would override the duty of confidentiality. There might well be a duty imposed on the law firm to make the client aware before instructions were taken that there were circumstances in which the statute would require disclosure if lobbying, as defined, were undertaken, but I think that is how it would work. At the moment, we have had to produce a very cumbersome practice note to deal with the European Transparency Initiative, which involves obtaining the consent of every client for whom one has done or may do lobbying work to the disclosure of their identity and the turnover that one has had on lobbying work with that client over the past year before the registration can be made.

Q317 Mrs Laing: You have already had this?

John Wotton: Yes.

Q318 Mrs Laing: Winding back for one minute, to whom is this disclosure made? I am sorry, this is just my not having-

John Wotton: That then goes on the public register maintained by the European Commission and Parliament.

Q319 Mrs Laing: Right. So, to a great extent your members are already dealing with the sort of registration that would be required?

John Wotton: I would say to quite a limited extent, because the number of law firms that have registered under the European Transparency Initiative is very low, reflecting the fact that most lawyers take the view that the work they are doing in Brussels is legal advice and representation rather than lobbying. But of course, one has to reach that conclusion based on the terms of the joint agreement between Parliament and the Commission in which the definition of lobbying is set out and the quite detailed exemption for legal advice in proceedings is contained.

Q320 Mrs Laing: Could the experience of the operation of that system at present shed any light on what ought to happen in the UK in future?

John Wotton: Yes, I think so, particularly on the specific aspect of defining the boundary between lobbying and legal advice.

Q321 Mrs Laing: I was concerned that the boundary between lobbying and legal advice would be too much of a grey area and would be very difficult to define, but you are putting my mind at rest to a very great extent. You consider that it can be defined?

John Wotton: I think a proper area can be carved out that is legal advice and representation as properly understood, and not lobbying, yes.

Mrs Laing: Thank you very much.

Q322 Andrew Griffiths: Can we go back to that discussion you were having about the European register and the fact that lots of law firms are not registering because they feel that the work they are doing is legal advice and not lobbying? Do you think that is a deliberate interpretation? Do you think that those firms are choosing not to register as lobbyists because it is cumbersome, onerous and expensive, or because they just don’t feel that they are undertaking any sort of lobbying activity?

John Wotton: I think they are taking the issue very seriously. Indeed, as chair of the Law Society’s EU Law Committee before I became president, I was involved in very detailed and serious discussions with a number of law firms, particularly those who have a substantial presence in Brussels, over a number of years on how this matter should be dealt with. I know that they have all taken that issue very seriously indeed. The pattern is largely repeated around Europe that very few law firms from any of the member states have registered under the European Transparency Initiative, but by contrast almost all the bar associations and law societies around Europe have done so as interest representatives of their members.

Q323 Andrew Griffiths: Do you think there is anything we should learn from that process in relation to implementing a register in the UK?

John Wotton: Yes. I think that going beyond the identification of the client is probably not worth the effort. I know that for those organisations that have mixed businesses-in my experience, principally law firms who may do some lobbying work-identifying the lobbying turnover for particular clients is an awful waste of time and effort. Of course, if the business that is being carried on is not purely a lobbying activity, then there is no equation between the lobbying income from a particular client and the client’s influence on the organisation or its contribution to its finance.

Q324 Andrew Griffiths: Can you tell us a little bit about the driver, the motivation, in Brussels for the implementation of the transparency register?

John Wotton: I think it was very similar to the motivation here-that it was important that the legislative footprint on European measures should be clear, and that officials, legislators, commissioners and the public should be aware of who was influencing the legislative process and in what capacity.

Q325 Andrew Griffiths: Could I just turn, if I may, to the statutory code as set out. We heard from Elizabeth France, the Chairman of the UK Public Affairs Council, and she suggested that a register without a code of conduct could lead to less regulation of lobbying activity. Could you tell us whether you think a requirement for all those who sign up to a statutory register to adhere to a code of conduct would be a workable suggestion?

John Wotton: I am not an expert on the lobbying industry at large. In relation to lawyers, and the same would go for barristers, I think that the detailed and principle-based professional code of ethics under which we operate should be a sufficient safeguard. I can see that it could well be useful if other lobbyists also had an appropriate code of conduct. I would not favour, though, a lobbying regulator. I think we are seeing some of the difficulties of having a number of regulators in the legal sector already. I think it works better to have an operation under the jurisdiction of one well-resourced and experienced regulator. In our case it would be the Solicitors Regulation Authority, which is a uniquely well-resourced regulator in the legal field. I don’t think that requiring lawyers who undertake lobbying activity also to subject themselves to regulation under a new code would serve any particular purpose.

Q326 Andrew Griffiths: Finally, do you have any information, any view, on the relative size of the companies engaged in that lobbying activity? Do they tend to be the larger firms or the smaller firms? The reason I ask is in case you have a view about the level at which fees should be set for registration, and whether that would impact on smaller or larger firms.

John Wotton: My impression is that they are quite a mix. I am not sure that any of them are large in terms of lobbying business themselves, but some are associated with larger groups involved in related activities. I am not sure that the level of fees should be set by reference to the size of the organisation that is the lobbyist. It seems to me desirable that, with proper transparency, decision makers and legislators should be as accessible as possible to those whose vital interests are affected by what they do. It would be unfortunate if fees were set at an unreasonably high level, either for those who are doing lobbying as a commercial activity or for those, such as you mentioned earlier, Mr Hamilton, who are doing it on a purely pro bono basis.

Q327 Fabian Hamilton: Mr Wotton, the USA’s Lobbying Disclosure Act 1995 and the Canadian Lobbying Act 2008 require only those who spend more than 20% of their time engaged in lobbying activities to register. Do you think that a threshold of time spent on lobbying would be a workable way of defining those who need to register, or would it simply create a loophole to be exploited and drive up the costs of running a register?

John Wotton: I am not sure that is necessarily the right test. I can see that it would be cumbersome to administer from the point of view of the lobbying community, and cumbersome to administer from the point of view of the register. I think, though, having put forward the idea that there should be some de minimis or incidental exemption, it is incumbent on us to develop those thoughts in our response to the Green Paper, and we will. I am not at this point sure whether we will incline towards a quantitative or qualitative test of what is incidental. I am sorry I can’t-

Q328 Fabian Hamilton: Presumably you do not know much about the workings of the Canadian and USA Acts?

John Wotton: No, I don’t. We did make some reference to them in the course of the discussions on the ETI, but we didn’t go into their operation in detail.

Chair: John, thank you so much for your time this morning. It has been very helpful.

John Wotton: Thank you very much, Chairman.

Chair: You have given us lots of food for thought. Members are getting ever more interested in this topic and I have a feeling we are going to produce quite an interesting report at the end of all of this. Thank you, John. It was good to see you today.

Prepared 18th April 2012