How ex-ministers make a fortune out of insider lobbying

stephen byers- like a cab for hire-pic courtesy daily telegraph

The damning disclosures about former Cabinet ministers Stephen Byers, Geoff Hoon and Patricia Hewitt touting for paid advocacy expose a fundamental flaw in the regulation of the lobbying industry. They also reveal fundamental weaknesses in blocking ex ministers and former senior civil servants making a fortune from “insider” knowledge gained in government.

For years it has been an open secret that the lobbying industry has failed spectacularly to regulate itself. Divided between two groups, the Association of Professional Political Consultants and the Public Relations Consultants Association, it is still not agreed to set up a joint body with agreed standards on how to conduct business. Nor do all companies have to belong to either association. Some companies voluntarily register clients, others keep lists secret. Some companies (belonging to the APPC) ban politicians from directorships, but the politicians themselves can and have set up their own lobbying and public relations companies which avoid membership of the APPC. Similarly large legal firms also have lobbying and public relations arms and avoid disclosing the identities of their clients under   spurious “client confidentiality” rules. They also employ ex Cabinet ministers.

The government had a chance to do something about this a year ago by introducing a statutory register for lobbyists. The all party Commons Public Administration Committee called for it in a report. Tom Watson, as a junior Cabinet Office minister, was sympathetic to tougher action to curb excesses, but only now has Harriet Harman, leader of the House, committed the government to do anything about it. Better late than never, but I suspect the Sunday Times and Channel Four Dispatches revelations have had more effect than any serious deliberations by MPs.

If the government had acted earlier neither the TV company nor the Sunday Times could have set up a fake lobbying company to talk to ex ministers, because it would have be registered- and the game would have been up from day one.

Worse this lack of control of lobbying is compounded by the toothless role of the Advisory Committee on Business Appointments which is supposed to vet ex-ministers jobs. Effectively however, this body allows ex ministers to do what they like when they leave office. Yes, they are expected to seek their advice for any appointment within two years of leaving government. And the committee can impose restrictions on jobs they could take up. But ministers can ignore their advice knowing they face no penalty whatsoever and knowing that the committee has no resources to ever check up whether the minister is even following their imposed restrictions – particularly over lobbying.

 The fundamental weaknesses on both sides created the perfect storm that allowed the media to expose the latest lobbying scandal over the weekend. Sadly we shouldn’t be too surprised that ex ministers can carry on like this in private in order to make more money in a day than a state pensioner receives in a year. The present system is designed to allow both ministers and lobbyists to get away with it with impunity.

A shorter version of this post is in today’s Guardian and a longer version on the Guardian’s Comment is Free website.