02 March 2009
Lobbying, big business and the Common Good
I was recently sent some material raising concerns about the decisions made by leading politicians, civil servants and their advisers. The concern is that pubic decisions and proposals are often developed in close collaboration with big business. Are they developed to serve the public interest or to serve the needs of big business?
It was pointed out to me that the UK Government’s Public Administration Select Committee [PASC] has recently called for:
1) consistent rules to prevent former ministers and other public servants from using contacts built up in public office to further their own and others’ private interests.
2) a single body to oversee and regulate lobbying.
Groups such as Vested interest in Politics [VIP] support this proposal and call for the banning of lobbies, large-scale funding of parties, and the revolving door (the practice of ministers, diplomats, civil servants and government advisors passing through the revolving door between government and private sector posts).
I was asked to comment on this. My comments are below:
I too am very concerned about the influence of big money on our public life. I certainly worry that many of our public policies e.g. on NHS drugs, satellite TV, financial regulation, armaments, and to a lesser extent energy and transport, are driven much more by the needs of the companies providing products and services than they are by the desire to serve the public good. To me the most outrages cases occur in the courts. It seems to me that if a case is presented in court, then justice requires some proportionality in the resources that the two disputing parties have to put into the legal case. I fear that sometimes (especially in the US) court cases are won by sheer weight of legal representation.
Unfortunately it is often very difficult to distinguish legitimate lobbying from illegitimate lobbying. Many areas of public life are now so complicated that professional input is absolutely necessary, even though it often represents a self-interest agenda. For example there are many areas of the debate about Nuclear Power, that only those involved in the Nuclear Power industry can properly comment on. Those people, and the consultants that they hire, almost always have a vested interest in the development of the Nuclear Power industry. Despite this it is still definitely in the public interest that their arguments are properly presented, even if we disagree with them and even if they are tainted by self interest.
When I lobby on the subject of executive pay, I have sometimes obtained lists of people who have submitted responses to a formal consultation about proposed amendments to the Combined Code on Corporate Governance for example. Overwhelmingly the responses come from corporations or consultancies who have the resources to get properly to grips with the issues and submit a constructive response. A few private individuals respond, but they usually have had some previous professional interest in the question. Responses from completely independent parties are very rare, and usually (like mine!) so tangential to the overall sense of direction that they cannot be worked with constructively.
What can be done?
We can't ban all lobbying; how would government ever know what to do?
I think we should do what we can to make the revolving door turn much more slowly. To ban it completely government would have to be able to grow and retain its own expertise among its own staff. This is made difficult by the hugely better pay and rewards that exist in the private sector. This could be addressed through better public sector pay, but I think that would just force the private sector pay higher. The better (but harder) solution is to constrain private sector pay. Another approach is to assume that the public sector will hire consultants when it needs expertise, but this is at best a partial solution too, because consultants always want to see growth and development in the sector they serve.
To me the most important thing is to build and develop in the Civil Service a very strong sense of public service and of the need to do things for the public good. This can only happen if the top people in the Civil service are those who have demonstrably done this over many years. It is undermined if the top people are those who have come in recently through the revolving door. It seems to me that this sense of making decisions for the public good must always be strengthened. Without this there is a danger than any restrictions on lobbying simply create a dangerous vacuum.
As ever there is an executive pay angle on this, because incentives drive our behaviours. The best rewarded people in our society should be those who make decisions for the benefit of the whole public interest; the common good which especially includes the good of the poor and those unable to represent themselves effectively. One would hope that such best rewarded people would include top civil servants and government ministers. Private sector pay, pay in specific sectors (such as healthcare) and most especially pay for consultancies, should generally be lower than top public sector pay. People who are paid owe a duty to work for the good of their employer. High pay suggests that this duty is being eclipsed by self interest. At present the top paid people in specific sectors are those who best demonstrate to the wider world the importance of the sector and why it should be developed. This situation somehow needs to be reversed. The best paid people in a sector should be those with a strong common good credentials who can explain to the specific sector how best it can serve the common good. Obviously we are a very long way away from this, but somehow the competition paradigm that we currently live under needs to be replaced by a public interest/common good paradigm, which is strong enough to control competition.
It was pointed out to me that the UK Government’s Public Administration Select Committee [PASC] has recently called for:
1) consistent rules to prevent former ministers and other public servants from using contacts built up in public office to further their own and others’ private interests.
2) a single body to oversee and regulate lobbying.
Groups such as Vested interest in Politics [VIP] support this proposal and call for the banning of lobbies, large-scale funding of parties, and the revolving door (the practice of ministers, diplomats, civil servants and government advisors passing through the revolving door between government and private sector posts).
I was asked to comment on this. My comments are below:
I too am very concerned about the influence of big money on our public life. I certainly worry that many of our public policies e.g. on NHS drugs, satellite TV, financial regulation, armaments, and to a lesser extent energy and transport, are driven much more by the needs of the companies providing products and services than they are by the desire to serve the public good. To me the most outrages cases occur in the courts. It seems to me that if a case is presented in court, then justice requires some proportionality in the resources that the two disputing parties have to put into the legal case. I fear that sometimes (especially in the US) court cases are won by sheer weight of legal representation.
Unfortunately it is often very difficult to distinguish legitimate lobbying from illegitimate lobbying. Many areas of public life are now so complicated that professional input is absolutely necessary, even though it often represents a self-interest agenda. For example there are many areas of the debate about Nuclear Power, that only those involved in the Nuclear Power industry can properly comment on. Those people, and the consultants that they hire, almost always have a vested interest in the development of the Nuclear Power industry. Despite this it is still definitely in the public interest that their arguments are properly presented, even if we disagree with them and even if they are tainted by self interest.
When I lobby on the subject of executive pay, I have sometimes obtained lists of people who have submitted responses to a formal consultation about proposed amendments to the Combined Code on Corporate Governance for example. Overwhelmingly the responses come from corporations or consultancies who have the resources to get properly to grips with the issues and submit a constructive response. A few private individuals respond, but they usually have had some previous professional interest in the question. Responses from completely independent parties are very rare, and usually (like mine!) so tangential to the overall sense of direction that they cannot be worked with constructively.
What can be done?
We can't ban all lobbying; how would government ever know what to do?
I think we should do what we can to make the revolving door turn much more slowly. To ban it completely government would have to be able to grow and retain its own expertise among its own staff. This is made difficult by the hugely better pay and rewards that exist in the private sector. This could be addressed through better public sector pay, but I think that would just force the private sector pay higher. The better (but harder) solution is to constrain private sector pay. Another approach is to assume that the public sector will hire consultants when it needs expertise, but this is at best a partial solution too, because consultants always want to see growth and development in the sector they serve.
To me the most important thing is to build and develop in the Civil Service a very strong sense of public service and of the need to do things for the public good. This can only happen if the top people in the Civil service are those who have demonstrably done this over many years. It is undermined if the top people are those who have come in recently through the revolving door. It seems to me that this sense of making decisions for the public good must always be strengthened. Without this there is a danger than any restrictions on lobbying simply create a dangerous vacuum.
As ever there is an executive pay angle on this, because incentives drive our behaviours. The best rewarded people in our society should be those who make decisions for the benefit of the whole public interest; the common good which especially includes the good of the poor and those unable to represent themselves effectively. One would hope that such best rewarded people would include top civil servants and government ministers. Private sector pay, pay in specific sectors (such as healthcare) and most especially pay for consultancies, should generally be lower than top public sector pay. People who are paid owe a duty to work for the good of their employer. High pay suggests that this duty is being eclipsed by self interest. At present the top paid people in specific sectors are those who best demonstrate to the wider world the importance of the sector and why it should be developed. This situation somehow needs to be reversed. The best paid people in a sector should be those with a strong common good credentials who can explain to the specific sector how best it can serve the common good. Obviously we are a very long way away from this, but somehow the competition paradigm that we currently live under needs to be replaced by a public interest/common good paradigm, which is strong enough to control competition.
Labels: business, common good, lobbying, public interest
