UK CONSULTATION ON A STATUTORY REGISTER OF CONSULTANT LOBBYISTS

The recently enacted Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 (“The Act”) is designed to give the public more confidence in the way third parties interact with the political system.

Part 1 of the Act provides for, amongst other things, a Statutory Register of Consultant Lobbyists on which those who undertake the business of consultant lobbying will be required to register and to disclose the names of their clients and declare whether or not they subscribe to a relevant code of conduct.

 The Register will complement the Government’s transparency initiatives – which include the quarterly publication of details of Ministers and Permanent Secretaries’ meetings with organisations – and the industry’s existing self-regulatory regime. It will address the specific problem that it is not always clear whose interests are being represented by Consultant Lobbyists and will increase transparency and help to drive up standards by enhancing scrutiny of the ethical principles to which lobbyists subscribe.

The register will be kept and published by the Registrar of Consultant Lobbyists who will be established as an independent, statutory office. The Registrar will have a duty to monitor compliance with the requirement to register and a power to undertake enforcement action in instances of non-compliance. He or she will be expected to develop and publish guidance for the industry on their duties under the Act.

The Government is currently recruiting for the role of Registrar and hopes to appoint an individual in the autumn. Once appointed, the Government expects that the Registrar will wish to engage with interested stakeholders regarding the practicalities of launching the Register and the content of the guidance on compliance.

While the framework for the Statutory Register is outlined in the Act, it is necessary to provide for further matters of detail in regulations (secondary legislation).

The consultation is an opportunity for all stakeholders to express their views on the content of the draft regulations. The Government will take all responses and suggestions into account before producing the final version of the regulations.

Draft Regulation 2 prescribes the information that must be included in the register entry of each Consultant Lobbyist covered by the terms of the Act. The provision of these details will allow the Registrar to update and maintain the Register with the required information. The Government wishes to assess the impact on the industry of these requirements and particularly to identify whether these will introduce significant or relatively minor changes to existing procedures within the lobbying industry for recording details of clients and what (if any) will be the extra administrative costs. The Government also would like to identify any familiarisation costs associated with introduction – these are the costs of adapting to the new requirement by ensuring that relevant members of staff within an organisation are familiar with them and are able to adopt new procedures that may be necessary to meet them. This could include the cost of any necessary training or issuing communications to staff and others.

The draft regulation specifies that an information return required by the Act must be made in writing rather than an update given by verbal means or in an informal setting; ‘writing’ includes written communications made by electronic means. The Registrar will specify the format in which this written submission will be expected to be made.

The Registrar will have a duty to monitor compliance with the requirement to register. In connection with this duty, the Registrar may serve an information notice on “any registered person” (i.e. a registered Consultant Lobbyist) or any person who is not entered in the register but whom the Registrar has reasonable grounds for believing to be a Consultant Lobbyist, requiring that person to supply information requested in the notice. The Secretary of State has the power to make provision in Regulations to specify forms of information that the Registrar may not request under this power.

In draft regulation 4 there is a provision that the Registrar may not request the communications which are subject to legal professional privilege. This is to guarantee the long standing confidentiality of such protected material and ensure that legal advice can be given freely without fear of it being disclosed to the Registrar in the future. This is an appropriate and proportionate limitation on the ability of the Registrar to request information in order to monitor compliance with the requirements of this part of the Act.

The Government has always been clear that the cost of the register should not be funded from the public purse but instead recovered from the consultant lobbying industry via a subscription charge. The Registrar will have the power to impose charges for or in connection with the making, updating and maintenance of entries in the register. The regulations must be set at such a level so as to recover the full costs incurred by the Registrar in exercising his or her statutory functions . Draft Regulation 5 provides for those charges.

a. An application processing charge: an amount to cover the cost of processing an application to register;

b. An information return processing charge: an amount to cover the cost of processing the return; and

c. An annual maintenance charge that covers maintenance costs of the register. Maintenance costs could include compliance-monitoring activities, enforcement action, staffing costs and the cost of software necessary to support the register.

It will be for the Registrar to determine the practical arrangements for invoicing for those charges. However,it is anticipated that the most practical approach will be for the Registrar to collect the charges as a flat fee comprising the different charges outlined above, rather than as separate charges. This charge will be set at the same level for all Consultant Lobbyists that are required to register and will not be graduated according to the size of the business concerned.

In future years, the calculation of the charge will be straightforward as it will be informed by the number of lobbyists registering in the previous year and the total costs of the Registrar’s activities in the previous year (these are expected to be fairly stable).

However, for the first year it will be necessary for the Government to estimate the level of the maintenance charge to be included in the Regulations for the year of its implementation.

One of the purposes of the consultation is to help us assess the number of lobbyists who will be covered by the registration requirement. As such, the Government is asking respondents from the lobbying industry to indicate if they believe they will be covered by the provisions and therefore required to register. While the Government acknowledges that there are limitations to estimates based on this approach, it wishes to gain as accurate a picture as possible of the coverage of this Act in order to set the fee at a level which reflects the number of those subscribing to the Register.

Section 2 (1) (b) of the Act provides that one of the criteria for determining if a person is a Consultant Lobbyist is that “ the person is registered under the Value Added Tax Act 1994.” It may therefore be necessary for compliance monitoring or enforcement purposes for the Registrar to determine the VAT-registration status of a firm or individual.

Draft regulation 6 therefore provides that Her Majesty’s Revenue and Customs may confirm to the Registrar whether or not someone is (or was previously) VAT-registered so that the Registrar may determine whether or not the firm or individual is exempt from the requirement to register.

Meaning of Consultant Lobbying 

(1) A person carries on the business of consultant lobbying if a. in the course of a business and in return for payment, the person makes communications within subsection (3) on behalf of another person or persons, b. the person is registered under the Value Added Tax Act 1994 and c. none of the exceptions in Part 1 of Schedules 1 applies

(2) Communications are oral or written communications made personally to a Minister of the Crown or Permanent Secretary relating to a. the development, adoption or modification of any proposal of the government to make or amend primary or subordinate legislation; b. the development, adoption or modification of any other policy of the government; c. the making, giving or issuing by the government of, or the taking of any other steps by the government in relation to (i) any contract or other agreement, (ii) any grant or other financial assistance, or (iii) any licence or other authorisation; or d. the exercise of any other function of the government.

(3) It does not matter whether the person to whom the communication is made, or the person making it, or both, are outside the United Kingdom when the communication is made.

Exceptions

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

    (2) In sub-paragraph (1) "non-lobbying activities" are activities other than making, on behalf of another person or persons, communications which (a) relate to any of the matters mentioned in section 2(3)(a) to (d), and (b) are made to any of the persons within sub-paragraph (3)

    (3) The persons are (a) mmebers of, and office holders in, government, and (b) officials and members of staff of government.

    (4) For the purposes of this paragraph, 'government' includes (a) Her Majesty's Government in the United KIngdom, (b) the Scottish Administration, the Welsh Assembly Government, (d) the First Minister, the deputy First Minister, the Northern Ireland Ministers and any Northern Ireland department, (e) the Goverment of any sovereign Power other than the United Kingdom, (f) local government in any part of the United Kingdom, and (g) any institution of the European Union (and the references to the 'government' in section 2(3)(a) to (d) as applied in sub-paragraph (2)(a) are to be read accordingly).

2. A person does not carry on the business of consultant lobbying if (a) the person acts generally as a representative of persons of a particular class or description, (b) the income of the person derives wholly or mainly from persons of that class or description, and (c) the making of communications within section 2(3) on behalf of those persons is no more than an incidental part of that general activity.

3   (1) A person who, as an official or member of staff of (a) a sovereign Power other than the United Kingdom, or the Government of such Power, or (b) an international organisation, makes communications within section (2)(3) on its behalf does not, by reason of those communications, carry on the business of consultant lobbying.

     (2) An 'international organisation' is any organisation, which for the purposes of section 1 of the International Organisations Act 1968, is declared to be (or treated as being an organisation of which (a) the United Kingdom, or Her Majesty's Government in the United KIngdom, and (b) at least one other sovereign Power, or the Government of sucha Power, are members.

     (3) Regulations may specify other organisations which are to be 'international organisations' for the purpose of this paragraph.

4. An individual does not carry on the business of consultant lobbying, by reason of making communications as an employee in the course of a business carried on by the individual's employer.