The Lobbying Act is as leaky as a sieve – this is how to stop Whitehall ‘sleaze’

‘Chumocracy’ provides a breeding ground for corruption. The rules need to be precise and the sanctions clear, writes Vince Cable

Thursday 22 April 2021 12:17
<p>David Cameron and Rishi Sunak have been summoned to give evidence in an inquiry on the Greensill lobbying scandal</p>

David Cameron and Rishi Sunak have been summoned to give evidence in an inquiry on the Greensill lobbying scandal

I suspect that the public will be underwhelmed by the report that parliament and the government have initiated no fewer than six inquiries into what appears to the outsider to be rampant corruption in Whitehall.

Part of the problem is one of language. You don’t hear the word “corruption”. Instead, there is something called “sleaze”. But sleaze covers a multitude of sins. These include: offering and taking bribes for personal or party purposes (clearly illegal but with murky arrears like peerages for party donations); fraud (illegal but difficult to prove); fiddling expenses (technically theft but with a lot of grey areas); facilitating access to decision-makers through “contacts” (legal but controversial, as with David Cameron); various forms of legal but unseemly behaviour (bullying, leaking confidential information, lying other than on oath); sex scandals (no longer very scandalous unless favours are involved).

In an attempt to strengthen standards, those of us who have been in senior positions in public life are expected to subscribe to the Nolan Principles. But these are so vague they are vacuous. They include “selflessness”, “integrity”, “objectivity” and “leadership”.  I suspect that we all say “yes” when asked to subscribe to these platitudes. The public doesn’t expect to be ruled by saints – but it does want to be protected from crooks. And, at the moment, there seem to be too many crooks in and around the government.

The problem with vagueness around standards is that it is all too easy to settle into a cosy cynicism about public life: “They are all at it”, “it is human nature to misbehave”, “it’s the same everywhere” and “I don’t expect that anything will be done”.  But the cynicism is misplaced. Things can be done if the rules are precise and the sanctions are clear.  The MP expenses scandal more than a decade ago shocked the country. Then, instead of a system of casual self-policing, strict, independent, compulsory processes were introduced. The worst offenders went to prison. Others were shamed. The scandal came to an end.

There are also international comparisons that enable us to compare progress in stamping out “sleaze”. As someone whose professional work, before I entered parliament, took me to Kenya, Venezuela, India, Russia, China and Nigeria I can assure you that “sleaze” is not the same everywhere. The admirable non-government body Transparency International carefully studies and measures levels of corruption. Britain is relatively “clean” – we rank 11th. But we are still a long way behind the squeaky-clean countries of Scandinavia, or New Zealand, Germany, Singapore and Hong Kong, and we have fallen four places since 2017.

What do we need to do to climb the league table? Instead of writing lots of long reports about “who said what to whom” we should focus on the things that can be done now.  For politicians, the priority is to stop political corruption that comes from the offer of peerages or other “gongs” or favours, in return for large party donations to fight elections. Britain is not at the level of corruption we can see in the USA or India (or, as we have recently seen, France), but it is bad enough, despite the existence of criminal sanctions if outright bribery can be proven beyond doubt.

In practice, it can rarely be proven to the satisfaction of the police that a billionaire is in the Lords as a reward for a cheque to the party rather than as a reward for charitable work. And it could be entirely coincidental that the housing secretary takes a favourable view of a controversial planning appeal, which affects a generous contributor to party coffers.

There is a solution (in fact, two). There should be a low cap on political donations making parties dependent on many small donations (or spending less on campaigns). It is time to end the process of political appointments to the Lords (which, we often forget, passes legislation). It could be an elected chamber or have worthy appointees made by a fully independent body – or (my preference) abolished.

Then there are the abuses that have been exposed by the David Cameron/Greensill affair. When politicians are defeated or retire (I have been through both) they take with them contacts in the form of key government officials or ministers who are political friends and who make important decisions. These connections are valuable to businesses bidding for contracts or lobbying for changes to policy.  There is an obvious common interest between the company and the former politician looking for work and income (and perhaps not easily employable elsewhere). Their mutual interest is, however, unlikely to be in the wider public interest.

To police this “revolving door” there are two mechanisms that have been shown to be woefully inadequate. First, there is an Advisory Committee on Business Appointments (ACOBA) chaired by Eric (now Lord) Pickles which vets both politicians and civil servants taking up business appointments within two years of leaving Whitehall – a total of 34,000 last year. However, Lord Pickles has no power or sanctions beyond raising his eyebrows (as he has been doing).

ACOBA has four officials vetting more than 100 cases each working day. The cases range from middle-level officials or junior ministers taking up an unpaid charity role or a business unconnected with their former job, to senior ministers and former permanent secretaries whose contact list is worth a fortune to the firms which hire them as “advisers” or “consultants”.

ACOBA needs a triage system to isolate the small number of senior ministers and officials seeking appointments with potentially serious conflicts. It should have powers to block, not merely advise, and to sanction rule breakers. It should have the power to impose long periods of exclusion for senior people. There is no reason why ex-prime ministers should ever be allowed to hustle for government business or senior civil servants to moonlight with a (self-interested) private employer. To police all of that appropriately it will need to be properly staffed.

Then, second, there is the Lobbying Act, which has been shown to be as leaky as a sieve. It is incomprehensible that a professional lobbying company – some of which do valuable and necessary work – should have to register its activities, but a senior minister can do the same job covertly, as a self-styled “employee”. A legislative change is needed.

More could also be done to ensure lobbying is not, as transparency campaigners say, “hidden in plain sight”. As things stand, if I wanted to find out who Greensill has met in government over the past 12 months, I would have to manually go to each of the 23 ministerial departments and look at each of their individual quarterly spreadsheets, nearly 100 in total, some of which differ in presentation. Complexity is being used to obstruct transparency. A simple and searchable central database would help solve these issues.

At the heart of better, more honest, government is transparency: the ability of parliament, the press and the public to scrutinise activities on the borderline between politics, public administration and business. Denmark is number one on the list of honest countries because of its culture of openness. Tax returns are available for public inspection. By contrast, British secrecy – which we dignify as “privacy” – and the networks of informal contacts – “chumocracy” - provide a possible breeding ground for corruption.

So, we should stop talking vaguely about “sleaze” and start being honest about the extent and risk of corruption. Instead of producing lots of reports, government and parliament should take the small number of steps needed to clean up the system.

Sir Vince Cable is a former leader of the Liberal Democrats and served as secretary of state for business, innovation and skills from 2010 to 2015

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