Lobbying: how politicians are bought and sold

In his masterpiece called  Origins of the Family, Private Property and the State, Engels pointed out that even in a “democratic republic”, wealth still wields power indirectly, but all the more surely. “It does this in two ways”, he explains, “by plain corruption of officials, of which America is the classic example, and by an alliance between the government and the stock exchange.”

In a later work, State and Revolution, Lenin took up the same theme, examining the completely fraudulent character of parliamentary democracy. “At the present time”, he wrote,” Imperialism and the domination of the banks have ‘developed’ both these methods of defending and asserting the omnipotence of wealth in democratic republics of all descriptions.”

Writing in 1917, Lenin went on to quote the example of a minister in the Provisional Government, Palchinsky, who resigned his office and was promptly rewarded with a cosy job by the capitalists, on a salary of 120,000 roubles a year. “What would you call this,” Lenin asked, “direct or indirect corruption?”

These arguments of Engels and Lenin, which are fundamental to a Marxist understanding of politics and the parliamentary process, have been completely vindicated over and over again down the years. Recent revelations of parliamentary sleaze have once again laid bare the thousands of threads that big business has woven into the fabric of so-called representative government.

It is well-known that, in Britain, Tory ministers have an open-door policy when it comes to meeting lobbyists and the representatives of capitalism, but it was revealed recently that the Government has an organised system to ‘buddy’ multi-national firms with Tory ministers and moreover, there were plans to expand it. In July 2011, the trade minister Lord Green announced the original initiative to give 38 firms, including telecoms, pharmaceutical and oil companies, a direct line to ministers and officials. In 2013, it was announced, a further 12 firms were being added to the list and 30 more are under consideration.

The original 38 firms, it was announced, had nearly 700 cosy face-to-face meetings with ministers in the first two years of the scheme. The oil company Shell alone has had 56 face-to-face meetings with ministers.

Before the election, David Cameron said that the £2bn British lobbying industry was “out of control” but now that he’s in Downing Street, it is clear that the Tories have no intention to limit the access of their business pals to ministers and officials. The latest Government proposal to ‘register’ lobbyists is no more than a fig-leaf that would only require the registration of professional lobbying firms. As the campaign group Lobbying Transparency explained, there are fundamental flaws with this approach. “Lobbyists-for-hire in agencies”, they explain, “account for only a small proportion of Britain's influence industry. They are outnumbered by in-house lobbyists by at least six to one”.

Lobbying Transparency go on to explain how the system would be nonsensical: “a supermarket, say, with a team of six in-house, full-time lobbyists would not have to declare its lobbying, but if it temporarily took on an agency to increase its influence, only the agency would have to register its lobbyists.” Secondly, the government are proposing that lobbyists who are registered reveal only minimal information, that is, their names and their clients. This completely undermines any attempt to increase government accountability because it misses out completely any lobbyists' interaction with officials and ministers.

It is clear that the Lobbying Bill is not intended to in any way shape or form to curtail the official or unofficial links between business and Parliament. The only firm measure it does offer is against the trade unions, in that it aims to put a limit on donations from the trade unions to the Labour Party – so the interests of thousands of working people are equated with the profits of big companies. While the howls of rage from ordinary people about endless austerity will continue to be met with blanket indifference, the representatives of big companies will still be feted and Government policies will be shaped and moulded to best suit the profits of the corporations.

Tory policy on food labelling will continue to be made by the food companies; cigarette packaging policy by the Tobacco industry; policy on minimum alcohol pricing by the brewers and distillers; and health policies by the private health sector.

What also ties business to officials and MPs and effectively buys them off is the ‘revolving door’ policy that gives ex-ministers and ex-civil servants well-paid jobs in the private sector – and almost always in that part of big business for which they were previously responsible and which in some cases they were previously ‘policing’. Thus defence contractors take on ex-Defence ministers as consultants, private health companies take on ex-Health ministers, and so on. One of the most blatant was the appointment a few months ago of David Hartnett to work for one day a week for Deloitte, one of the top four auditing companies. Hartnett was until recently the head of HM Revenue and Customs. It was during his time in charge that cosy sweetheart deals were agreed between HMRC and Vodafone and Goldman Sachs to pay a nominal sum in taxes in lieu of what they ought to have paid.

The Goldman Sachs deal saved them £20m in interest payments that ought to have gone to the Exchequer. Hartnett was said to have personally negotiated a deal with Vodafone who paid only £1.25bn of the £6bn originally claimed by HMRC. It was also on Harnnett’s ‘watch’ that other companies, like Starbucks, paid nothing at all. Lo and behold, it transpires that Deloitte, Harnett’s new bosses, are the official auditors for Vodafone! Harnett’s wonderfully lucrative part-time job at Deloitte’s hasn’t stopped him getting another part-time post as an adviser to the banking group, HSBC. This is the bank, let us recall, which was fined $1.9bn by the authorities in the USA for laundering Mexican drugs money.

Deloitte, of course, are not unique. All of the big four accountancy companies, including also KPMG, Price Waterhouse Coopers and Ernst & Young, frequently have their own staff seconded to work in the Treasury and in other government departments and they regularly recruit ex-civil servants with ‘inside’ knowledge to work for them.
Looking at all this, as Lenin would have asked: is it direct or indirect corruption?

In the US Congress, the number of lobbying organisations is even more phenomenal. There are nearly fifteen thousand of them, around thirty for each and every elected representative. On every single issue, from climate change to taxation to health, to gun control – on every issue – these professional ear-benders are canvassing, phoning, meeting and schmoozing with elected representatives. Billions of dollars are spent on an industrial scale – over $3bn in each of the last five years – to buy the politicians that millions of Americans think they have elected. They have a thousand threads connecting them to PR agencies so they can spread unfavourable stories in the press to blackmail representatives who might be reluctant to follow their cues. It makes no difference whether they are Democrat or Republican – the overwhelming majority are in the pockets on business. The ‘revolving door’ operates here, too, with former lobbyists getting top jobs as aides to congress members and then former aides going back into lucrative jobs among the lobbying firms.

During recent demonstrations in Egypt, a BBC journalist asked a man in a Cairo street why he was demanding the overthrow of Morsi. The man replied that Morsi and the Egyptian Assembly had not put in practice the policies on which they were elected. Without a blush or a hint of irony, the BBC journalist asked, “but that’s democracy, isn’t it?” It might be democracy to an unprincipled philistine, or to a representative of business, but to any normal worker it is the opposite of democracy.

The 2011 Survey of British Social attitudes posed the following statement to which people were asked to express agreement or disagreement: “Generally speaking those we elect as MPs lose touch with people pretty quickly”. The answers showed that nearly 73 per cent either “agreed” or “agreed strongly”. This shows the huge reservoir of cynicism that exists about politicians of all parties and it is a serious issue for the labour movement. It is an issue about how its elected representatives ought to behave in office. It is a disgrace that so many Labour MPs are out of touch with the lives and conditions faced by ordinary workers. It is an even greater disgrace that from time to time it is Labour politicians, like peers Lords Cunningham and Mackenzie, who have been embroiled in the sleazy cash-for-political-work business.

The policy applied in practice by three Labour MPs in the 1980s – “A worker’s MP on a worker’s wage” – has more validity today than it has ever had and Labour Party members ought to make it a central theme of any discussions on Party elections and representation. Labour MPs should not hob-nob with the spokes-persons of big business; they should avoid the junkets and the ‘social club’ atmosphere of the House and they should faithfully represent the people who elected them, by living on the same living standards and opening themselves to re-selection at every election.

Cosy relationships: Tory business ‘buddies’

  1. Property firms Atkins and Balfour Beatty are ‘paired’ with climate change minister, Greg Barker, who is in charge of the Tories’ “green homes” policy.
  2. Nestle, Unilever, Mondelez (including Cadbury, formerly part of Kraft) and Associated Britiish Food are ‘paired’ with David Heath, of the Department of Agriculture.
  3. Oil firms are ‘paired’ with Vince Cable, Business Secretary.
  4. Proctor and Gamble, Willetts and Cisco are ‘paired’ with Foreign Office minister Hugo Swire.
  5. Telefonica (O2), Orange and T-Mobile (EE) are ‘paired’ with culture minister, Ed Vaizey.

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