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How businesses influence government – and why it might need to change | Bonds & Ballots
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Oct 7, 2024
Lobbying. It’s a word that carries connotations of shady backroom deals and underhand discussions between businesses and politicians. But business engagement is an essential part of government. And as we head into an election in the UK, all political parties are on the front foot engaging with the private sector. In this week’s Bonds & Ballots, we dive into the lobbying industry with two professionals to hear just how the industry works and why it might need to change. Get more of City A.M. 👇 🌐 http://www.cityam.com X(formerly Twitter): http://twitter.com/CityAM Facebook: http://www.facebook.com/cityam Instagram: http://www.instagram.com/city_am LinkedIn: http://www.linkedin.com/company/cityam #businessnews #politics #government #business #government #ukpolitics #ukgovernment #uknews
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0:00
Lobbying. It's a word that can at times conjure up images of conspiratorial
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backroom meetings, grubby deals struck between businesses and politicians. But the reality
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is often a lot more run-of-the-mill above board. Politicians need to hear the voice of business
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just as they do the rest of the electorate. And as we head into an election year in the UK
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those conversations between the private sector and government are going on more fervently
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than ever. I'm Charlie Conchie Chief City Reporter at City AM here with another episode of Bonds and
0:32
Ballots where we will be looking at this often misunderstood world, hearing how it works
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and why it might need to change in the years ahead. To do that, we're going to speak with two people
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at the heart of the industry. Christian May, a former campaigns director at the Institute of Directors
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and Alastair MacCAPRA, the Chief of the Chartered Institute of Public Relations. They're both
0:52
in the swing of electioneering at the moment and those conversations. So let's go and hear what
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have to say. Christian, you were at the Institute of Directors for two years, arguably the final two years
1:08
of normal British politics we had over the past decades. You then obviously edited one of the
1:12
country's finest newspapers. You now work with businesses on their engagement with
1:17
government with Westminster. This is a big question, but can you just give us a sense of the
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change in the relationship over that past decade, where we are now compared to where we were, ten
1:26
years ago in business engagement? I think it always comes to answer the question of what motivates or why does a business or
1:35
a sector need to engage with government. And what I mean by that is that it is driven by the context
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So take an obvious example of the Brexit era. Obviously there was intense engagement with particular sectors affected by individual businesses
1:52
I mean a huge debate about the intricacies of that. So there was a really pragmatic and interesting
1:56
important reason for that kind of engagement. You can see now engagement focuses more on
2:03
perhaps preparing for a change of government. Lots of businesses going out of their way to engage
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with labour or try and figure out what a labour government might look like. So there's always going
2:12
to be engagement, absolutely vital engagement between the private sector, the kind of, you know
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economic engine of our economy. It has to have a good relationship with government, any government
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But the nature of that engagement is often determined by what is going on in the real world
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whether that's political chaos over here or chaos at the border or huge economic shocks and disruption
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Think of the pandemic, COVID. Think of the war in Ukraine. So the kind of engagement that the businesses seek is really driven by what is going on
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what is affecting their businesses. So as we, you know, in the run out of election, do you find that now there is more of an open door
2:54
more of a willing ear when businesses do engage in weapons given the environment we're in
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at the moment? If you look at what happened a couple of weeks ago, on the day the Labour Party hosted
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its widely celebrated business day down at the Oval Cricket Ground, and we can talk about that
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because it was very interesting to watch that new relationship between labour and business
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But on the same day, Rishi Sunak and Downing Street unveiled his newest business council reviled
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His newest iteration of the sort of business chiefs and chief execs that go into Downing Street once a quarter or informally to participate in these kind of conversations with the Prime Minister And some people thought why is he doing this Why is he you know he only got a few more months before at least a general election maybe only a few more months in office
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And the short answer is it's essential. I think people would be surprised at the extent to which almost constant contact takes place between businesses and the government
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I was, you know, I heard just yesterday of a CFO of a listed company who spent six hours on the phone with Jeremy Hunt on Boxing Day
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Now there was no press release around that. There was no, nobody was told about it. It was just the unglamorous, necessary, probably slightly annoying for both of their families, part of business engagement
4:16
Something was obviously going on or going down on that particular day
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But that's an example of the fact that that kind of conversation is taking place all the time
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You touch on the chaos in Westminster as well and they often do feel like different worlds interacting with each other
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Do you find that business and politics, you know, Westminster sometimes struggle to speak the same language
4:37
Do they always, you know, have an ability to actually convey their message in as effective a terms as they would like to
4:44
There's a lot that's lost in translation, if I could put it like that
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I was speaking to somebody whose job it was at number 10 for a couple of years was to head up business relations who said that he still worries
4:56
that too many people in government and in the sort of permanent ruling bodies of the civil service
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don't fully understand the reality and the life of the private sector
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particularly small businesses, particularly entrepreneurs. There are some very good people in government and in the civil service who do
5:13
The question is, is it broad enough? Are the relations good enough? Is the understanding good enough
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Is there enough mutual grounds for that to be a sort of permanently effective relationship
5:23
I fear not. And there are lots of different reasons for that
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And that might go through a new iteration under a new government if there is to be an incoming
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Labour government. I think businesses are going to have to work very hard to be part of the conversation under
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a Labour government. And that's something that I think businesses are scratching their heads about at the moment
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I mean, you've been in the room for a lot of those sort of discussions over the past decade
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Are there particular examples when you sat there and gone? look, we're not getting anywhere here
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These people are on entirely different planets. Are there particular sort of instances
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that do capture that breakdown sometimes in communication between the two? It can very often depend on the individual
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that you're talking to. When I was at the IOD, I remember going in with a number of colleagues
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from the policy team there to talk to Vince Cable as business secretary
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And I have to say, if we went in with 10 requests
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maybe it was five, He kind of at least understood and maybe granted the vast majority of them
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We had some concerns about this, something to do with flexible labour market
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something to do with immigration rules, etc. And he just sort of, you know, he really absorbed them
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I was quite surprised by that until my boss at the time said, and another thing, and sort of pushed on on really quite a kind of bullsy free market request
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And Vince Cable at that point just said, I've given you so much
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Have you not just listened to me? And some of us sat there thinking, oh, don't, you know, don't push your luck because this is a Liberal Democrat business secretary
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So again in that instance I would suggest that there was perhaps somebody at the IOD who jeopardised at least that meeting if not the overall relationship by not recognising the diplomacy involved in the give and take which of course you have to appreciate And there were plenty of other occasions perhaps in number 10 number 11 also during my time at the IOD
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but also, you know, as editor at Citi AM, going in for sort of background chats
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I remember going in with the IOD to talk to the Prime Minister at the time David Cameron about quite a punchy tax reform that the IOD had cooked up
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And David Cameron was very diplomatic. He let us spell out the idea and then he simply said that it was fascinating
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And then nobody had ever suggested it to him before. And then he moved on very quickly
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And we all left number 10 thinking, that was good. He really liked the idea and then we thought, or did he
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So David Cameron was a very good diplomat in those situations. Christian, they're giving an insight into how businesses can engage Westminster
7:56
and the tactics often used by politicians to deflect some of those demands
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But the engagement between those two worlds has been dented in recent years
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We've had a number of scandals, green silk involving now foreign minister Lord Cameron
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companies taking backdoor routes into government through COVID, and just in recent months a gambling sting against a sitting Tory MP
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So does the industry need to change? Alison McApher, the chief of the Chartered Institute of Public Relations, is a man that thinks so
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So, Alisa, you are essentially a man with a bird's eye panoramic view of what's going on
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in the world of public affairs and lobbying. at the moment. Is this as frantic, as sort of active as a time
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as the industry will ever see? It is, being an election year
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And everyone is, of course, we don't know when the election is going to be, which adds some tension and drama
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So there's a whole question about how you engage with the current government if you need to
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how you engage with the next government, and what their plans and aspirations are
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and how you help your clients. make that transition and how you make sure you get your point across to a completely different
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team who will be starting starting afresh presumably you know you might think that because all the
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forecasts are pointing one way in the election it would be a pretty straightforward task but actually
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there's a lot to do and a lot of a lot of uncertainty to work around so businesses very much trying
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to hedge their bets and make sure they're you know delicately balancing their efforts to both sides
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Yes, I mean, most businesses are extremely careful about this, and they measure their words and they measure their connections quite carefully
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What you've laid out there, you know, it sounds quite above-board and formulaic way of kind of engaging with ministers
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and there's perhaps a slightly nefarious and shadowy reputation that surrounds the lobbying industry
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Do you think that that reputation is a problem? What has caused that reputation, and is it any reflection of what actually goes on behind the scenes
9:57
Well, I think what's caused it is the fact that, for the most part, whenever the public hears about lobbying, they're hearing about a scandal
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And one of the telling things about that is that almost never does that actually involve a consultant lobbyist
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It doesn't involve professional lobbyists. It's either involves a politician doing something they shouldn't be doing, or it involves a newspaper setting up an MP for a scam
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But lobbying is a really important activity. And I think it's important for us to say that we are in favour of lobbying reform, not because
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we think lobbying is a bad thing and it needs to be curtailed, we think lobbying should be
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transparent because it a really important thing in a properly functioning democracy It necessary for politicians to engage with business and other stakeholders in order to frame legislation that actually going to work So I mean what does reform actually look like from where we are at the moment
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then? What would you like to see change in the system? Well, we're starting from a very bad
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place. We have a piece of legislation at the moment that came into force 10 years ago
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And it came into force at a time when the camera and government was really interested in light touch
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regulation. It's extremely light touch. Transparency International estimates that it only covers about
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4% of all lobbying activity. So the great majority of lobbying that goes on is out of any kind of
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public site. So we think that's not satisfactory at all. And we think we want to create an environment
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in which decent ethical lobbying can flourish and isn't tainted with the kind of reputational
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damage that you've just alluded to. So I mean you touched on the scandals there we've had Cameron
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we've had the gambling scandal as well recently would that kind of reform help shut out and help
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prevent those sort of you know backdoor routes into parliament? The backdoor routes are exactly
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the issue I mean I will say that with in the case of the of the gambling case there weren't any
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lobbyists involved in that. So but lobbyists get tired with that brush, you know. So I think basically
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the public has an interest in knowing who is trying to influence and shape legislation and nobody
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should have anything to fear from that. If you are going about your business legitimately and your
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clients have something legitimate to ask for, then the interesting thing is the great majority
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of lobbyists think that the lobbying law should be changed and that there should be more regulation
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of this because it's not doing that the current situation isn't doing the many favours
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See, I mean, you're banging the drum at the moment for this reform, the change to go through
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Are you seeing appetite for it? Is there appetite from within Westminster as well
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From the government, not at all. I think they've made clear that, I mean, they are, you know
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they're introducing a new foreign interest registration scheme. There are other things they're doing
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but they're not interested in going back and revisiting the Lobbying Act. Labour are interested, and for them it sits within a wider framework
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of their proposed business kind of ethics commission. And the Liberal Democrats are also interested
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We're not really down to specifics, but there's a wide recognition that the current situation really can't go on
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Have you had reasons why there is so little appetite from the government
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Is it a lack of response completely or do they give reason for why they don't want to see reform
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I'm not clear myself why they are opposed to it. They may think that it does the job that it was intended to do
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I don't know, but I think they're certainly in a minority view on that
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So there you have it, a snapshot into how businesses look to engage with politicians and Westminster
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and influence the direction of government. Does it need to change? Do the rules need to be adapted
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