Consultants should be made to declare lobbying of spads, MPs told

Departments also urged to up their game on transparency surrounding perm sec and ministerial meetings
Harry Rich appears before PACAC yesterday

By Jim Dunton

16 Nov 2022

Professional lobbyists who target special advisers on behalf of clients should “undoubtedly” be required to register their work under any future reform of the Lobbying Act 2014, a watchdog has told MPs.

Harry Rich, who is registrar of consultant lobbyists, said the degree of influence that the elite band of ministerial aides commanded meant consultants who used them as a channel should be obliged to declare that work in their quarterly returns.

His comments came in a Public Administration and Constitutional Affairs Committee session on the effectiveness of the 2014 act, which has come under increased scrutiny in the wake of last year’s Greensill Scandal.

The affair highlighted both the extent of David Cameron’s lobbying on behalf of failed financial firm Greensill Capital and gaps in the rules meaning the former PM did not need to appear on the lobbyists’ register because he was directly employed by Greensill. Cameron was reportedly paid £720,000 a year in return for an expected annual 25 days of work for Greensill.

As part of his evidence yesterday, Rich said he was very much in favour of revising the Lobbying Act to cover approaches by consultants to spads, although he expressed reservations about the value of including director-general level civil servants within its remit.

He said the draft of the act “clearly envisaged the potential” for it to be widened beyond secretaries of state, ministers and departmental perm secs.

“It’s possible by regulation to bring special advisers into the remit of this disclosure,” he said. “That’s something that I would strongly advocate because if you’re trying to influence government, special advisers are clearly one of the key routes to do that, and if that lobbying is not disclosed then it’s not supporting the transparency aims of the act. So I would definitely include that.”

He added: “Special advisers, having the kind of influence they have, should be brought in, undoubtedly.”

Rich said extending the act to cover senior civil servants below permanent-secretary level was a different question, but one he could be open to if MPs concluded there was justification.

“There’s been talk of bringing directors general into the fold,” he said. “That would require primary legislation. I can see some merits in doing that. But that for me strays, from my perspective, too far into the policy area. But I can see it’s something worth looking at.”

The registrar also told MPs that consultant lobbyists should also be required to disclose a wider range of information about their work than is currently the case.  

“It ought to be who was lobbied, on which date they were lobbied, what subject they were lobbied on, and on behalf of which client,” he said.

“That is something that can be changed by regulation. It does not require primary legislation. It’s something that I would strongly advocate.”

Currently,  firms are only required to state who they lobbied on behalf of or who they were paid by not who they lobbied – or the frequency of any communications.

Departments ‘could do much more’

PACAC chair William Wragg asked Rich whether he thought there would still be a need for the Lobbying Act if departments published their quarterly transparency data about ministerial and perm-sec meetings, gifts and hospitality in an “accurate and timely manner”.

Rich responded: “Possibly not, if one had confidence that all the information that was needed in the transparency data was there.

“If you make the assumption, as I do, that the aim behind the act is that everybody can know who is lobbying who on behalf of whom, then that would be a means of achieving that.”

He added that awareness-raising work about the register appeared to be underscoring the need for more consultant lobbyists to join.

“In October 2020 we had 148 registrants; in October 2021 it was 179; last month was 216. So a significant increase,” Rich said.

As of yesterday, there were 238 registrants.

However, Rich acknowledged that there were known loopholes in the system that allowed consultant lobbyists to avoid the register if they do generate enough revenue to register for VAT.  

UK-based businesses do not have to register for VAT if their annual turnover is below £85,000.

Rich said he imagined that a “quite substantial” number of consultant lobbyists fell into that category.

“You can do an awful lot of good consultant lobbying for much less than that threshold,” he said. “There’s no reason to assume that people who are billing more than £85,000 a year are a completely different category than those who might be billing £75,000 a year. It’s bound to be a continuum.

“If there are people who we know of who are registered who are lobbying and are above the VAT threshold, it seems to me a rational conclusion that there may be people who are billing £50,000, £60,000, £70,000 a year who are also consultant lobbying. But I have no data on it.”

He added that huge consultant-lobbying operations that are based outside of the UK and which are not VAT registered fell “completely outside” the remit of the Lobbying Act.

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