What we think

Champagne problems: Why being irate about spending a few quid on an important lunch is not just ridiculous, but dangerous

Perhaps it was because the festivities were over and the prospect of a long Dry January was looming that prompted so many people to get so upset. Perhaps it was just a slow news day. But the leak of emails from civil servants questioning the cost and location of a lunch given by the Foreign Secretary for the US Trade Representative prompted a short-lived but intense storm on social media and in the newspapers this week. Which leaves me asking: why?

The facts are that the Foreign Secretary wanted to provide a working lunch as part of talks with the USTR, Katherine Tai. Ten people were to attend. Given the nature of the conversation a private dining room was required. Presumably the Minister and her advisors wanted to impress. So they proposed (or “insisted upon”) going to the private members’ club, 5 Hertford Street, and ended up paying £130 a head including drinks.

Cue snide headlines implying that Liz Truss somehow personally benefitted (this was an official event and she didn’t). Others spotted that the club is owned by Robin Birley who donated to Boris Johnson’s leadership campaign (although it is doubtful that he is so short of cash that he was desperate for the profit margin on a £1300 bill). And there was a general feeling that “public money” was being squandered on an “obviously expensive” meal, and that probably they should have gone somewhere cheaper.

Where even to start with this? At a time when there are so many things to criticise the Government for, and so many reasons to question Liz Truss’s record, spending a few quid on a really important working meal is ridiculous and infantile. For one thing, how much money spent at what location would be acceptable? The civil servants apparently thought Quo Vadis at £100 a head would be okay. But would that have passed muster with the self-appointed auditors general online? It is impossible to know.

This matters for two reasons. First, it demonstrates how pathetically penny-pinching our attitudes towards public bodies have become. Do we really want to entertain a senior official from our closest ally on the cheap? What does that say about us and our global standing? Wouldn’t we rather impress, showcase the best that the UK has to offer (Hertford Street isn’t that, but it is the principle that counts!) and demonstrate that we matter?

This all reminds me of working in Parliament and someone suggesting that Select Committee fact-finding visits should be conducted via low cost airlines. Fine, obviously public money shouldn’t be spent frivolously, but does it really present the best image of the UK to the world for senior Parliamentarians to stumble off planes filled with boozy stag parties to go into meetings in which they are representing our country? Whilst we wouldn’t want to go as far as the US, which sends a huge entourage with every visiting member of Congress, surely we can have a bit of pride?

I appreciate that focusing on this aspect of the story is idiosyncratic. Maybe what we spend on diplomacy, hard and soft, is not important. But it is indicative of an attitude in which almost any spending on anything (perhaps other than the NHS) is viewed by many, including in the media, as inherently wasteful. We are particularly cheeseparing when it comes to pay or to working conditions. This damages our public services in countless ways, not least the difficulties faced in attracting and retaining good quality staff. Being cheap is not always efficient. We need to think again.

The second, and most important reason this matters is that this story reflects a dangerous lack of understanding of where our taxes actually go. Spending this amount on lunch might on one level sound like a lot, but by comparison to what Government spends – and wastes – on so many other things it is not even remotely relevant. For example, it takes the NHS around a third of a second to spend what Ms Truss did on lunch. Yet coverage of the mechanics of health policy (as opposed to individual cases and coronavirus) is incredibly slight when compared to the front pages devoted to this restaurant bill.

The endless stories about sleazy politicians – and yes, profligate lunch choices – obscure what is really important. Polling published just before Christmas showed that the public believes that fully 8 percent of public spending goes on MPs’ pay, an over-estimate of staggering proportions. But they also think that only 11 percent goes on pensions and benefits (the real figure is 26 percent). This feeds upon itself: the public is interested in political sleaze so there are more and more stories about it, so we think it is far more important than it really is – and inevitably we end up collectively focused on the wrong things.

I am not at all sure how we break out of this cycle. But the mainstream media definitely has a role to play. It could do a better job of filtering out whether a ‘political sleaze’ story really matters (or even really involves much sleaze) and of instead looking in detail at the many ways Ministers spend billions of pounds of our money. Maybe that would make the media unreadable and uninteresting. But it is what we as taxpayers need, and so it surely has to be worth a try. Something has to change.

Bending to the Wind: Sustainability in 2022

Until 2021 became all about Covid (again), it was meant to be a key year in the struggle for a more sustainable future. The EU continued with its pledge to build back better via its Recovery Fund, whilst the UK was meant to be building back greener and in the US President Biden promised a $2 trillion package of green investments. In March, China published its 14th five year plan, which focused largely on climate change. And COP26 in Glasgow in November was intended to put a cap on all of this activity with new pledges to limit global warming to 1.5 degrees and to promote greater resilience.

It’s not entirely clear that 2021 delivered all that might have been hoped for in terms of the climate. Glasgow saw some positive developments, including far greater engagement from the private sector and from cities and other public institutions, but did not end with the blockbuster intergovernmental deal that had been hoped for. And whilst campaigners against hydrocarbons would have been cheered by the decision of another major mining company to exit coal when Anglo American spun out its operations in that sector this year they might have been less thrilled when the new company, Thungela Resources, ended the year up more than 150% in value as investors warmed to coal in the face of soaring prices for natural gas.

Just today we have learned that Germany has shut down three of its remaining six nuclear power stations with the rest to follow this year. I am obviously a fan of nuclear, having worked for the industry for years, but it is indisputable that the decisions taken in that country post-Fukushima, known as the Energiewende, have caused much more coal to be burned than would otherwise have been the case. It will be intriguing to see how the new Greenish Government in Berlin responds to the reality that Germany’s emissions remain much higher than other major European nations, particularly with the 12% of its electricity generation that it got from very low carbon nuclear in 2021 not being available at the end of 2022.

So we go into 2022 on the back of some more downbeat news when it comes to our climate. But perhaps this is no bad thing. For a long time there has been a tendency for politicians from all nations and of every political persuasion to make sweeping commitments to address this subject without much realistic thinking about how these will be delivered. For example, the UK has pledged to decarbonise domestic heating but it is far from clear where all of the tens of thousands of installers of heat pumps will come from. Countries everywhere want to phase out petrol and diesel cars and promote electric vehicles but are lagging behind when it comes to ensuring their electricity grids will be ready. Governments are promoting renewables without much thought about intermittency, as the UK’s experience this Autumn showed. And only lately have questions started to be asked about the true sustainability of batteries with their reliance on rare minerals, often from challenging geopolitical locations.

Perhaps the biggest question of all is who will foot the bill for all of these changes. The speed and scale of the transition needed means that taxpayers and consumers are going to face significant extra costs. There are already signs of a backlash; for example, prominent politicians from the governing party in the UK such as Steve Baker MP are aligned with a new campaigning group called ‘Net Zero Watch’, which aims to “highlight the serious economic and societal implications of expensive and poorly considered climate and energy policies”. But this is not just the domain of sceptics about climate science: plenty of organisations which fully accept that urgent action is needed are nevertheless worried about the fairness of loading new costs on people who can’t afford them.

The hope for 2022 is that the debate will become much more practical, much more realistic, and much more action-orientated. After all, there is actually broad agreement about the steps required, at least in the UK, so now let’s see how in practice we can make them happen. And let’s also start to be much more realistic about adaptation and resilience too: even if increases in temperature are limited the climate is still changing. Time to harness the more positive aspects of the debate in Glasgow – the interest shown by cities, companies and others, the new focus on resilience, and the innovations on show when it comes to financing the transition, as well as the evolution of the debate to consider nature and biodiversity as well as carbon alone. Time too to think about the skilled workforce we are going to need to get this right. If we do this the next 12 months could actually be the pivotal year for sustainability that 2021 was meant to be.

People throw rocks at things that shine: Why we should not worry too much about All-Party Parliamentary Groups

At the start of August, two newspapers splashed stories about All-Party Parliamentary Groups. First the Mirror claimed that a ‘Tory MP [had] handed paid roles on Parliamentary groups’ to a lobbyist; and then the Guardian said that ‘MPs serving on informal parliamentary groups while working in second jobs are facing scrutiny’. In both cases it was All-Party Parliamentary Groups in the spotlight. And each story revealed a whole bunch of misapprehensions about these Groups and also how regulation of them is actually working rather well.

First, the misapprehensions. It is standard fare for the media to overstate the importance of All-Party Parliamentary Groups, implying that they give some sort of privileged access or play a formal role in the legislature’s activities. Sometimes they are put on a par with Select Committees; as a former Parliamentary Clerk, this used to be pretty irritating. The fact is, they have none of these powers or responsibilities.

What APPGs do is bring together MPs with an interest in a particular subject to debate and discuss the issues, and perhaps even to work out ways to make their case to Ministers. But they have no formal role and their powers are no greater than an individual MP or Peer acting on their own. They have no access to public money, so the idea of doling our paid roles is a touch misleading. What these Groups do can be important, but it is essential not to overstate their influence.

Another misapprehension surrounds the ‘revelation’ that MPs who have interests in the subject matter often serve on these Groups – or even set them up. Well, that’s the point. Surely it can be no surprise that MPs from former coalmining areas dominate the Coalfield Communities APPG, or that those who have an interest in manufacturing or have relevant firms in their constituencies are part of the Aerospace APPG? And is it really unexpected that an MP who worked in the packaging industry for 30 years now has a role as Chair of the Foodservice Packaging Association and at the same time runs the Packaging Manufacturing Industry APPG? What is the Guardian’s point: that Mark Pawsey shouldn’t use his experience and contacts to help to ensure that an important industry is regulated efficiently and effectively?

Which brings us to the second point: that regulation of these matters works rather well. In fact, neither of these articles could have been written without the transparency engendered by the existing rules. We know that the various MPs cited by the Guardian have paid external roles, and even how much they are paid, because they have declared it in the Register of Members’ Interests. We know they serve on various APPGs because they have completed the very frequent returns required for the Register of All-Party Parliamentary Groups. We can see who their fellow office-holders are and if anyone provides them with support in the same, available-to-the-public-on-the-internet, register. In this case, at least, Parliament’s rules and regulations really deliver.

It seems to me that what’s really bothering the media isn’t APPGs at all: it is MPs having second jobs or being too close to ‘business’. There’s a debate to be had about Members received money from outside sources; personally, I think it is entirely legitimate if it is declared for all to see. And the discussion about proximity to companies is a tired conversation about lobbying itself. I don’t know how many times it has to be pointed out that if Parliamentarians do not speak up for major employers in their constituencies or industries they used to work in or businesses they understand and support we will end up with bad laws and regulations devised by officials who can never have knowledge of every facet of the economy and society they oversee. Lobbying is all about ensuring that the legislative process is well-informed, and if APPGs play a role in that, great.

Sitting behind all this is the on-going inquiry by the Committee on Standards into the rules for and regulation of All-Party Parliamentary Groups. This will consider all of the issues raised by the two newspaper articles and much else besides. I hope that the Committee will put any prejudices about ‘big business’ aside and judge the work of APPGs representing industry in the same way as those that are ostensibly more ‘worthy’. And I hope too that it will reflect on the way that the existing rules already promote openness; and that there is a real risk that without APPGs MPs and Lords with common interests would simply get together informally without any transparency at all.

Originally published as “Are All-Party Parliamentary Groups something to worry about?” on the Vuelio blog.

Response to the Registrar of Consultant Lobbyists

This afternoon the Office of the Registrar of Consultant Lobbyists has published a note claiming that comments made recently about the Lobbying Act, particularly in the wake of the stories about David Cameron and Greensill, have been “inaccurate and misleading”. The Registrar appears to be particularly exercised about the PRCA and others repeatedly pointing out that loopholes in the Act mean that many lawyers and other consultants who lobby can in effect decide for themselves if they want to apply the legislation to themselves or not.

The note says: “Some recent comment has suggested that a number of groups of people, such as lawyers,
management consultants or politicians, are not bound by the current law and that only businesses defining themselves as ‘consultant lobbyists’ are subject to the rules…. Whether an activity needs to be registered as consultant lobbying depends on the nature of the activity, not on the sector or whether the individual or company considers themselves to be a lobbyist”.

It is slightly surprising that these remarks ignore Schedule 1 of the Act, which is devoted to setting out who is exempt from the Act’s provisions, stating:

A person does not, by reason of making a communication, carry on the business of consultant lobbying if (a) the person carries on a business which consists mainly of non lobbying activities, and (b) the making of the communication is incidental to the carrying on of those activities.

At first glance this loophole seems sensible: it means that the boss of a widget manufacturer who writes a letter to a Minister on behalf of someone else doesn’t have to register as a lobbyist. But in practice it leaves it wide open for pretty much any consultancy business to omit itself if it wants to, given that in the vast, vast, majority of cases lobbying on behalf of clients makes up only a tiny fraction of overall business activities.

As it happens, all of the Big Four management consultancy firms do register. But we cannot be sure if smaller companies in that sector act as consultant lobbyists, and whether they register the fact or not. Of the magic circle law firms only Clifford Chance appears on the ORCL register (it’s worth noting that two other companies with high profile public affairs offers, Norton Rose and DLA Piper, also do), but there could be any number of smaller law firms, not to mention ‘strategic consultants’ and others, who lobby but do not feel any compunction to register the fact. In fact, David Cameron could have set himself up as a business consultant and lobbied on behalf of Greensill as a third party and still not needed to register that he was doing so provided it did not make up the “main” part of his business. As it turns out he was seemingly employed direct, but the result is the same: there was no need for him to register what he was doing.

All this means that I’m afraid to say that the Registrar’s note today is itself somewhat misleading. And we haven’t even got started on the other side of all of this, namely that the Register records whether or not the registrant has signed up to a Code of Conduct governing the behaviour of the lobbyists concerned. According to the ORCL website, despite the fact that they commendably register as lobbyists, none of the management consultants and the law firms mentioned have adopted a relevant Code. They are of course highly reputable organisations, so I am sure they always behave properly, but we do not know what rules they follow. Moreover, unlike members of the PRCA Public Affairs Board they are excused from publishing their client list; I am not aware that any of them choose to do so voluntarily. In short, even if we know that they lobby we can have no clue who for, which is hardly very transparent.

The correct response to all of this is not for the Registrar to waste time criticising entirely reasonable and accurate comments made about the deficiencies of the Act and instead to recommend that the Government and Parliament make two big changes to it. First, the exemptions under the Act should be ended, and anyone who is paid by someone else to lobby government should be treated as a consultant lobbyist, even if such activities are a very small part of what they do. Second, the Act should require all consultant lobbyists to sign up to a recognised Code of Conduct which obliges them to publish a list of their public affairs clients. These are simple changes. I’m looking forward to an update from ORCL that backs them.

Life in a Northern Town: Some thoughts on the Treasury move to Darlington

Amongst the many goodies dispensed by the Chancellor in his Budget last week was a special gift to the North East: an announcement that a significant part of the Treasury would move to Darlington. Over the next few years 750 senior civil servants will move up to County Durham. Yes, it is cynical politics aimed at shoring up newly-won ‘red wall’ seats and at bolstering the position of Ben Houchen, the hyperactive Mayor of Tees Valley. But even so, surely this is unalloyed good news, on multiple levels?

Not if you read the comments from a few local people on social media. Some expressed the rather sour-faced view that moving suits up from London wouldn’t create any jobs for Darlington residents, whilst others said that “the best we can hope for” are office cleaning and taxi driving roles. This is both depressingly defeatist and economically illiterate. For one thing, even if every one of the 750 suits is someone relocating from London, they will spend in local businesses, buy local houses, their kids will attend local schools, and generally they and their families will participate in the community and spend money. New companies will spring up to serve the needs of ‘Treasury North’ and its staff, both directly and indirectly, and those firms will bring jobs and opportunities for local people.

This trickle down effect of relocating public sector roles from London is demonstrable and significant. For example, despite some early quibbles it is now generally accepted that moving large parts of the BBC to Salford has brought measurable economic growth. This has included a cluster of new and innovative firms locally, making up “the second largest cluster of digital and creative business in Europe” and creating thousands of new jobs. In Darlington we can expect to see a similar process, including via spin offs such as economic consultancies founded by former HMT officials. In my own sector, I wonder whether we’ll see a few new public affairs folk operating in the area?

In many ways, though, all this is the least we can expect. In fact not everyone offered the move to Darlington will take it, so there will be spaces to fill right away. Over time the Department will need new recruits; people in the area now in education can hope to work at the Treasury one day without needing to leave the North East. With luck and good judgement schools and universities will adapt to meet this demand for highly qualified staff, bringing further knock on benefits.

But the economic and educational fillip for the North East is really only a small part of what Treasury North can deliver. Perhaps the greatest advantage of all is the change of perspective it ought to inspire. Removing people at the epicentre of policy-making from the Westminster and London bubble will allow them to see at first hand the impact of their decisions and recommendations so far away from the capital. If that doesn’t lead to more humane and responsive thinking it is hard to see what will.

For me, then, moving part of the Treasury to Darlington is a great idea, and one that probably should be repeated for other Government Departments. Of course there are risks, the greatest of which being that if Ministers stay in London to be close to Parliament the most senior officials will try to do the same, meaning that the North East will not receive the best civil servants and could become a backwater. Ministers will need to fight this natural instinct. Parliament can help too by allowing Ministers to strike a balance between being present in the Chamber and sitting in their office up north. But all this can be overcome, and in difficult economic times Treasury North should be one big success.