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Euroleaks: Why release? And why now?

Euroleaks: Why release? And why now?

Adults In The RoomBrexitCampaigningDiEM25EnglishEuropean CrisisFinance MinisterFinMin2015GreeceGreek CrisisMeRA25Politics And EconomicsWebmaster YanisVaroufakis 2385 Views0 Comment  February 16, 2020

During 2015’s first half, as Greece’s finance minister, I participated in thirteen crucial Eurogroup meetings – before the SYRIZA government (disrespecting the referendum result of 5th July) capitulated. The result of that capitulation was my immediate resignation and a permanent austerity program (until… 2060). 

From the beginning, the first Eurogroup, it was clear that the troika leaders dominating those meetings were determined to prevent any serious debate on Greece’s ‘program’. I would arrive with a determination to find an honourable compromise on the basis of apt technical proposals the purpose of which was to help the people of Greece breathe again while minimising the costs to our creditors (that dominated the Eurogroup). 

In sharp contrast, the troika leaders, and their complicit finance ministers, would stonewall while refusing to discuss my proposals or to counter-propose anything that made financial, political or moral sense. Again and again they demanded our government’s surrender to a neocolonial, austerity, neocolonial program that they themselves, behind closed doors, confessed it had failed!

After the first three Eurogroup meetings I realised, to my horror, that no minutes were being taken down. Moreover, the absence of any record of what was being said allowed the troika apparatchiks to indulge in an orgy of leaks and innuendos that very quickly spread worldwide. 

It was a major Operation in Truth Reversal: The troika was leaking that I would come to the meetings unprepared, without technical preparation, and that I was, instead, boring my colleagues to death with ideological or theoretical speeches that were besides the point.

It was my first, real, and very painful, exposure to the true meaning of fake news. 

To be able to brief my PM and parliament accurately on what went on in those interminable meetings, as well as to defend myself from the distortions and downright lies regarding my interventions (as well as of the lies of what the troika folks were saying to me), I began recording the proceedings on my smart phone. 

Not wishing to keep this secret, I made this public in an interview with the New York Times – as a means of warning the purveyors of fake news that I could prove they were spreading lies. The reaction of the European Commission was one of fake outrage – but, interestingly, they stopped leaking!

Later, I published my memoir (ADULTS IN THE ROOM) which I based, to a large extent, on those recordings – thinking that it would be the end of the story.

Why am I bothering you now with this 5-year old story? 

Because, for reasons I shall outline below, MeRA25-DiEM25 and I have decided that now is the right time to make the said recordings available to the public. 

Why now?

After publishing ADULTS IN THE ROOM, I was not planning to make the unedited recordings public even though, for three years after the book’s publication, and especially here in Greece, the fake news of 2015 are still being peddled as facts. Having distilled in ADULTS most of what mattered, I was prepared to let the matter rest.

However, last week two events here in Greece changed my mind:

1. The new rightwing New Democracy government recently legislated the sale of non-performing mortgages to funds that will trigger mass evictions of families that, due to the never ending crisis, cannot service their mortgages. From 1st May, a new wave of misery is going to engulf our already defeated population. In Parliament, where I lead MeRA25 (DiEM25’s new progressive party in Greece), the PM and his ministers took turns to ‘explain’ what they are doing by blaming their new liquidationist drive on… me and the manner in which I ‘upset’ my finance minister colleagues in those Eurogroup meetings of 2015!

2. My former government colleagues (SYRIZA) have just leaked an internal review of what they did wrong since 2014 and why they were defeated in the July 2019 general election. Their main conclusion seems to be that their finance minister in 2015 (me!) antagonised his colleagues in the Eurogroup, failing to table reasonable proposals, being recalcitrant etc. (i.e. SYRIZA adopted fully the troika’s narrative).

In view of 1 and 2 above it is now abundantly clear to me that the fake news concerning the 2015 Eurogroup meetings are providing the cover for a new wave of assaults against the weakest of citizens. For this reason, in a Parliamentary debate on matters pertaining to labour law involving party leaders (last Friday 14th Feb), I addressed my detractors directly: 

“You have spent 5 years”, I told them “lying about what was going on in these Eurogroup meetings. Now you are building upon those distortions new austerity and liquidation legislation. For this reason, before Members of Parliament can cast an informed vote on these bills, they have a right and a duty to know exactly what was being said in those Eurogroup meetings.” 

At that point, I read out a Greek High Court decision advising that such recordings are fully legal (provided they do not pertain to the participants’ private life and are recorded in the course of one’s public duties). Then, I took out an envelop containing a USB stick with all the recordings in my possession and submitted it to the House’s secretariat saying that I leave it to the Speaker of the House to decide how he would make the material available to MPs and the public at large. 

Soon afterwards, a police officer returned the USB stick to my office, on the orders of the Speaker who deemed my gesture ‘unacceptable’. A few hours later, I issued a statement that DiEM25-MeRA25 will, in view of the Speaker’s stance, release the material to the public. 

“You have been telling stories about what went on in these meetings, as if you knew exactly what was said, but now you panic at the thought of finding out what was really said”, we added.

What is the significance of these recordings beyond Greece?

These recordings/transcripts make for fascinating listening/reading for those who want independent insights into the decision-making process within the EU: 

  • Europeanists have much to learn on how Euroscepticism, Brexit being a case in point, was aided and abetted by the unacceptable decision-making process at the heart of the EU. Learning these lessons is a prerequisite for reforming, or better still transforming, the EU.
  • Eurosceptics will, unfortunately, find evidence in these recordings that their attitudes are justified.
  • Students of international relations, European studies, finance and economics will gain invaluable insights in how flimsily crucial decisions for the world economy are reached. 
  • And, finally, since democracy without transparency is utterly impossible, the release of these files is a small, but not insignificant, service to democrats around the world.

WATCH THIS SPACE: DiEM25.org and MeRA25.gr for the release of the unedited recordings around the 10th of March 2020 (once transcripts have been produced and made properly accessible to everyone)

Sign up to the DiEM25 newsletter (https://i.diem25.org/newsletter) if you want to be informed the moment DiEM25 publishes the recordings and transcripts

Support for more tax & spend at fifteen-year high


21 September 2018.


The majority of Brits think the government should increase levels of tax and public spending – the highest proportion in fifteen years, according to findings from the most recent British Social Attitudes survey.
67% of Labour supporters and 53% of Conservative supporters think the government should increase taxes and spending on public services
Older people more supportive of more tax and spend than young
Health and education top list of priorities for extra public spending
The majority of Brits think the government should increase levels of tax and public spending – the highest proportion in fifteen years, according to findings from the most recent British Social Attitudes survey.
The research by the National Centre for Social Research (NatCen) shows that 60% of people are in favour of the government taxing and spending more, up from 49% in 2016 and 31% in 2010 when support for tax and spending increases were at its lowest. 33% now say that tax and spend should remain the same. Only 4% think that government should tax and spend less, the same as the previous year.
Those aged 55 and over are significantly more inclined (65%) to state that tax and spending should be increased than those aged 18-34 (54%). This trend appears to be consistent over time, with those aged 35 and over being more likely to back increased tax and spending than those aged 18-34 since 1993.
Although Labour supporters remain more likely than Conservative supporters to say that the government should increase tax and spending on health, education and social benefits (67% vs 53%), there has been a significant rise in Conservative voter support which has increased by 18 percentage points from 35% in 2015. The last time over half of Conservative voters thought the government should increase tax and spending was in 2002, when support among the whole population for public spending was at an all-time high. In contrast, 40% of Conservative supporters and 26% of Labour supporters believe the government should keep taxes and spending the same. Just 4% of Labour and Conservative supporters think the government should reduce tax and spend.
When asked what the top priority for extra public spending should be, the majority of respondents say they would like to see government spend more on health (54%),followed by education (26%) and housing (7%). Social security (2%), public transport (1%) and overseas aid (0%) were least popular.
All age groups cite health as the main priority for increased spending, but a generational dimension is reflected here; 18-34 year olds are more likely to favour increased spending on education (37%) compared with those aged 35-54 (26%) and 55+ year olds (18%). Reversely, older age groups place a higher importance on increases in health spending (53% for those aged 35-54, 59% for 55 year olds and over) than younger respondents (47%).
There were also notable differences between attitudes by people’s political party support. While both Conservative and Labour supporters view health as their top spending priority (54% both), 30% of Labour voters want more spending on education to be the top priority compared with 20% of Conservative voters. Equally, more Labour voters (8%) than Conservative supporters (5%) think increasing public spend for housing should come first. In turn, Conservative supporters are more likely to say extra government spending on defence should be the first priority (8%) than those supporting Labour (1%).
NatCen’s Head of Public Attitudes, Roger Harding, said: “Since 2010 the proportion of people who want more tax and spend has nearly doubled and shows the country is clearly tiring of austerity. The question for the government is whether their recent spending announcements have done enough to meet public demand for more public investment, including now from a majority of their own voters. The question for Labour is whether they can win over the many older people who support more spending but currently do not support the party.”

http://natcen.ac.uk/news-media/press-releases/2018/september/support-for-more-tax-spend-at-fifteen-year-high/

Why the EU Settlement Scheme is not good enough as it is

Now the UK has formally left the European Union, and entered the transition period, Alexandra Bulat assesses the flaws in the EU citizens’ Settlement Scheme and argues that it still undermines the fundamental rights of those affected.

In the summer of 2019, I wrote to explain why the rights of EU citizens were not a done deal. The Withdrawal Agreement Bill has since passed all its stages in January 2020. After almost four years of uncertainty, Brexit will happen. Part 3 of the Bill puts the provisions on EU citizens’ rights into law. Surely, the debate on EU citizens’ rights is done and dusted? Well, not quite. The issues raised by citizens’ rights campaigners months ago are largely still unresolved, and this will certainly have consequences.

There is no doubt that EU citizens in the UK will have to apply for the EU Settlement Scheme if they want to stay after Brexit and the 2020 transition period. The EU Settlement Scheme is a far cry from the ‘automatic grant’ of all existing rights that was promised by Boris Johnson and others during the Vote Leave campaign, but the application scheme is here to stay. EU/EEA citizens and their family members have until 30 June, 2021 to apply.

Government ministers do not miss any media occasion to say that 2.8 million applications have been made to the scheme so far. However, these large numbers presented without context do not solve the outstanding issues. Most of the problems that have been raised for months still exist and will have a real impact in the near future.

During the debates on the Withdrawal Agreement, two key changes to the scheme were proposed: to change its legal basis to a declaratory registration scheme (as opposed to the current constitutive application system); and to include an option for physical proof of status. The government suffered its first parliamentary defeat when the amendment on the EU Settlement Scheme was passed by the Lords. Nevertheless, this was voted down when the Bill returned to the Commons.

Why is the EU Settlement Scheme not good enough as it is?

The arguments for a declaratory scheme and physical proof of status seem to be misunderstood by the government. More dither and delay on their part in responding to concerns raised by experts, lawyers and migrant rights groups will not make the problems disappear. Under the current application scheme, those whom the government fails to inform on time that they need to apply will be unlawfully resident in the UK after the deadline. Everyone working on the ground with migrant communities, including myself, is aware that there are still people who do not know about the scheme or think that the scheme does not apply to them, for various reasons. No similar system in the world has reached 100% of its target audience. It is simply inevitable that there will be people who will be left behind by the scheme, in particular more vulnerable groups. We do not have an exact number of EU citizens in the UK and therefore it is impossible to know exactly how many will find themselves without status – estimates range from thousands to hundreds of thousands.

The government has two responses to this concern, both unsatisfactory. First, Ministers claim that there will be ‘no automatic deportation of EU citizens’ who do not apply on time. But ‘automatic deportation’ is not the main concern of those campaigning for EU citizens’ rights. This is simply not how the system works. Before even considering someone for removal, the hostile environment policies impact that individual. Those EU citizens who will not have lawful status after the deadline will not be able to work, go to the doctor or rent a home, since all require proof of immigration status.

Moreover, it is not only about the deadline of 30, June 2021. Over 40% of EU citizens who have applied so far got ‘pre-settled’ status (limited leave to remain), which means they will have to go through the system again before their status expires in five years’ time. There will be around one million individual cliff-edges and EU citizens will need to be informed accurately and on time about their rights.

Second, Home Office spokespeople claim that late applications will be considered if the applicant has a ‘good reason’. But we do not know what these ‘good reasons’ are. Consider this example: Maria was born in the UK. Her parents, both EU citizens, were not permanently resident (or ‘settled’) in the UK when she was born. Therefore, Maria was not born automatically British – but her parents wrongly assumed she is. In ten years from now, Maria gets her first summer job and is asked to prove she is a lawful migrant. She realises her parents had to apply for her status years ago when she was a child. Would ‘My parents did not know they had to apply for me’ be considered a ‘good reason’? A declaratory system would avoid these situations where people become unlawful through no fault of their own.

The calls for physical proof of status have also been widely misrepresented. Having the option of physical proof does not mean scrapping the EU Settlement Scheme. In fact, under the current system, non-EU family members who are granted pre-settled or settled status do receive physical proof of status. It is also not true that EU citizens can simply print their settled status email letter and use it as proof. The PDF attachment clearly states, in bold, that it is not proof of status. EU citizens, as well as those who have to check migrants’ legal status, such as employers and landlords, will have to perform those checks through an online system. Compared to showing a physical document, this involves having some digital skills, more spare time, the right tech and hoping the system will work properly (which is not always the case).

Organisations like the3million have warned there will be increased discrimination with a digital-only status. Almost nine in every ten EU citizens in a recent survey with over 3,000 respondents were concerned about the lack of physical documents. The Residential Landlords Association (RLA) backed the proposals for physical documents. There is widespread support for this change, yet the government ignores expert advice and has decided to proceed with the system as it is.

What can still be done?

EU citizens need a legal safety net – firm, legally binding guarantees that the consequences of an application process with a strict deadline will not impact the most at risk in our society. A physical proof of status is not only what the vast majority of EU citizens want, but it will also reduce discrimination in right-to-work and rent checks and restore some trust in the system. The largest survey of EU citizens’ experiences of the EU Settlement Scheme revealed that even after receiving their status, the majority do not trust their status is secure and future-proof.

Trust was broken when the government failed to deliver on the automatic grant of indefinite leave to remain promised in the 2016 campaign. This trust cannot be restored if the government consistently avoids engaging with genuine concerns from migrants’ rights organisations and be honest about the issues with the current scheme and the consequences. There is still time for the government to listen and engage with EU citizens, instead of dismissing concerns and pretending citizens’ rights is a debate of the past.

https://blogs.lse.ac.uk/politicsandpolicy/why-the-eu-settlement-scheme-is-not-good-enough-as-it-is/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+LSEGeneralElectionBlog+%28General+Election+2015%29

__________________

Note: The above was first published on Democratic Audit and represents the views of the author. Featured image credit: European Union 2017 – European Parliament / CC BY-NC-ND 4.0 licence

About the Author

Alexandra Bulat (@alexandrabulat) is completing her PhD studies at the School of Slavonic and East European Studies (SSEES), University College London (UCL). Alexandra has been an advocate of EU migrants’ rights since 2016 and is currently the chair of Young Europeans, part of the EU citizens’ rights organisation the3million. She is also a volunteer with the charity Settled, advising EU citizens on their rights in the UK.

Opaque: an empirical evaluation of lobbying transparency in the UK

McKay, A.M. & Wozniak, A. Int Groups Adv (2020). https://doi.org/10.1057/s41309-019-00074-9

Abstract

The government of the UK is reputed to be among the world’s most transparent governments. Yet in comparison with many other countries, its 5-year-old register of lobbyists provides little information about the lobbying activity directed at the British state. Further, its published lists of meetings with government ministers are vague, delayed, and scattered across numerous online locations. Our analysis of more than 72,000 reported ministerial meetings and nearly 1000 lobbying clients and consultants reveals major discrepancies between these two sources of information about lobbying in the UK. Over the same four quarters, we find that only about 29% of clients listed in the lobby register appear in the published record of ministerial meetings with outside groups, and less than 4% of groups disclosed in ministerial meetings records appear in the lobby register. This wide variation between the two sets of data, along with other evidence, contribute to our conclusion that the Government could have made, and still should make, the lobby register more robust.

Keywords

Lobbying Government transparency Lobbying regulation Interest groups British lobbying UK Office of the Registrar of Consultant Lobbyists 

Introduction

The UK ranks number one in the world in terms of the openness of its government data.1 This puts the UK ahead of, respectively, the USA, France, Canada, Germany, and Japan. The British public has access to open data regarding budget, spending, legislation, elections, British companies, trade, the performance of education and health agencies, crime, and more. Yet when it comes to lobbying, the UK is still quite opaque.

Following a high volume of scandals, as well as domestic and international pressure, the Conservative–Liberal Democrat Government created in 2014 the Office of the Registrar of Consultant Lobbyists. The overdue register this office oversees is notably weaker than advocates requested, and it is inadequate compared to lobbying disclosure laws in many other countries. Similarly, the data the Government has published since 2010 about ministerial meetings with external groups are unwieldy, unclear, and unpunctual. We identify five aspects that together suggest that the Government purposely chose to keep lobbying in the UK in the dark. These findings are summarized as follows:

1.
Lobbying regulation in the UK is among the very weakest of countries that have developed lobbying disclosure laws;

 

2.
The set of lobby clients listed in the register is significantly different from the set of groups with whom ministerial offices report having met;

 

3.
Collating information about ministerial meetings is too burdensome for any layperson to do;

 

4.
The debate surrounding lobbying transparency as the law was being written made clear that the proposal was not robust enough; and

 

5.
Lobbying clients meet more frequently with Government ministers than unregistered groups, and a small number of lobby clients dominate over the others.

 

In short, we join with others (Chari et al. 2019; Pegg 2015; McGrath 2009; Miller and Dinan 2008; Jordan 1998) who recognize the need for a more robust lobbying regime in the UK.

UK lobbying regulation in international comparison

In recent years, the world has seen a remarkable expansion of lobbying regulations. In 2000, there were five national or supranational jurisdictions with lobbying disclosure requirements—the U.S. (1946, 1996, 2008), Germany (19512), Canada (1989, 2003, 2008), Georgia (1998), and the European Parliament (1996).3 Since then, 13 additional countries have established lobbying regulations—Lithuania (2001), Poland (2005), Taiwan (2008), Israel (2008, 2010), France (2009, 2016), Mexico (2010), Slovenia (2010), Netherlands (2012), Austria (2013), Chile (2013), the UK (2014), Ireland (2015), and Italy (2017)—as well as the European Commission (2008). Lobbying reform has been attempted but has failed to fully materialize in Brazil, Croatia, the Czech Republic, Spain, and other jurisdictions, including Hungary, where a lobbying reform law was adopted (2006) and then repealed (2011), and North Macedonia, where a law was created but never implemented (Holman and Luneburg 2012; Crepaz 2017b). The rapid expansion is partly due to successful policy learning/transfer/diffusion (Radaelli 2000; Graham, Shipan and Volden 2013) and partly due to external and internal pressure (e.g., Pegg 2015; Miller and Dinan 2008). Such pressure is often instigated by widespread media attention to lobbying scandals (Allen 2002; Ozymy 2013).

The Organization for Economic Cooperation and Development (OECD) in 2014 asserted that governments should require lobbying activities to be disclosed in a manner that is transparent and accessible to the general public. OECD highlights five elements of effective regulation: an unambiguous definition of lobbying; disclosure of funding sources; disclosure of lobbying targets; clear standards of behavior regarding especially revolving-door practices; and appropriate monitoring and enforcement. Similarly, the U.S. Center for Public Integrity (CPI) defines eight key components of lobbying regulation (2003). In its view, effective lobbying regulations should unambiguously define lobbying; mandate the registration of individual lobbyists and clients by name; require disclosure of expenditures on lobbying by client and lobby firm; provide for electronic filing; ensure public access to the registry; include enforcement provisions; and specify revolving-door provisions, especially cooling-off periods for government employees. Opheim (1991), Newmark (2005), and Holman and Luneburg (2012) have similarly developed criteria for assessing the robustness of lobbying regimes; Chari et al. (2019) find that the correlations between these methods and those of the CPI are .80, .62, and .65, respectively. While the CPI criteria, especially the focus on disclosure of financial information, may be more suitable for the U.S. than for other jurisdictions (Chari et al. 2019), Chari et al. (2019) rate CPI’s index as having the highest content validity among these alternatives (i.e., it best captures the robustness of a lobbying regime). As such, our criteria for evaluating the lobbying regulations in the UK are based primarily on those of the CPI.

At the high end of robustness of lobbying regulatory schemes, the Center for Public Integrity gives the U.S. 62 out of 100 possible points. At the federal level in the U.S., lobbying is clearly defined as contacting officials about matters of public policy. Anyone who spends more than 20% of their time communicating with government officials in either the legislative or executive branch and is paid more than $3000 for a client in a quarter (or $11,500 for in-house lobbyists) must register. Every quarter lobbying organizations report the identities of their clients, the names of individual lobbyists working for each client, the issue areas about which they lobby for each client, as well as the bill numbers or titles of legislation they lobby about for each client and in each issue area. Failure to report is punishable by up to a year in prison and a fine of up to $50,000.4 The House defeated an amendment that would have created an enforcement agency, however (Chari et al. 2019, 22). Since 2008, U.S. lobbyists must also disclose their own federal campaign contributions and those of any political action committee (PAC) the lobbyist “controls.” (A PAC is a fundraising organization that donates to federal candidates and is associated with a company, union, or nonprofit organization.) Gift-giving to government employees or the members of their household is prohibited without explicit permission by the House or Senate ethics committee. Staff who leave government service must wait one or two years (depending on their level in government) before registering as lobbyists. While the U.S. is considered the most robust system of any nation, 20 U.S. states have higher scores than the federal government (Chari et al. 2019), and LaPira and Thomas (2017) estimate that more than half (52%) of U.S. federal lobbying activity still goes unregistered, especially lobbying in the executive branch.

Using the CPI’s quantitative method for assessing the stringency of lobbying legislation, Keeling et al. (2017) give the UK a significantly lower score than the U.S., at 33, tying it with Australia and putting it above the European Union (32) and France (30), among others. A score of 30–60 classifies a system as medium-robust (Chari et al. 2019). Chari et al. (2019) describe medium-robust regimes as requiring individual lobbyists to disclose their personal identities, as well as the issue, bill, or government institution they are lobbying; medium-robust countries also limit or prohibit lobbyists from giving gifts or contributions to politicians and they require former legislators to observe a cooling-off period between being a registered lobbyist and working for government. However, none of these requirements apply in the UK. In Britain, only consultant lobbying firms must register—not campaigning organizations and not “in-house” lobbyists, even though the Government estimated that the number of in-house lobbyists—those who are employed by the businesses and organizations for whom they lobby—could be six times more than the number who work on contract as lobbying consultants (Cabinet Office 2013). This leaves a significant blindspot in the register. Further, the names of individual lobbyists are not reported, nor are the targets, expenditures, or subject matter of lobbying activities. There are no restrictions on gift-giving or revolving-door employment.

These limitations challenge the classification of the UK as “medium-robust” according to the criteria set out by Keeling et al. (2017) which has been reproduced elsewhere including the second edition of the book Regulating Lobbying (Chari et al. 2019). In particular, we take issue with Keeling et al.’s (2017) coding of the UK system in two respects. First, Keeling et al. gave the UK full credit (4 points under CPI’s scheme) for requiring every lobbyist to register with no minimum threshold for money spent. In fact, however, UK lobby firms need not register if they do not have a VAT number, which requires an annual revenue of £85,000 or more. The CPI gives 0 points if the threshold is higher than $500. Second, Keeling et al. give the UK credit (3 points) for requiring individual lobbyists to register, when in fact only consultant lobbying firms must register, not the individuals who work for the consultancy, nor any in-house lobbyists. CPI gives 0 points if individual lobbyists are not required to register. These corrections reduce the UK total score from 33 to 26, and this score moves the UK into the “low robustness” category (Chari et al. 2019). It is now ahead of only two systems that are in effect today—those of the Netherlands and “the strange case” of Germany (Ronit and Schneider 1998).

Creation of a minimalist lobby register

The establishment of an official and mandatory register of lobbying in Britain was first discussed by the Select Committee on Members’ Interests in 1991, but no measures were adopted. Twenty years later, Conservative Party Prime Minister David Cameron called lobbying “the next big scandal waiting to happen” (Porter 2010). Indeed, in the following 5 years there were 15 lobbying scandals in Britain (Transparency International 2015), with names such as “Cash for Amendments” (2009), “Cash for Influence” (2010), and “Cash for Questions” (2013). Meanwhile, the OECD was recommending (2009) to its then 30 member nations that they adopt greater transparency of government activity, and jurisdictions including Estonia, Slovenia, Brazil, Canada, Chile, Mexico, and the European Union all considered creating or strengthening laws that govern lobbying activities.

Announcing that “Transparency is at the heart of this Government’s agenda,”5 the Conservative–Liberal Democrat coalition Government created in 2014 a mandatory register of consultant lobbyists. The Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act requires consultant lobbyists (also known as contract or third-party lobbyists) to register with the Office of the Registrar of Consultant Lobbyists, overseen by the Cabinet Office. Registered consultant lobbyists must disclose quarterly a list of clients —and that is all. The Government itself estimated that the exclusion of in-house lobbyist from the requirement to register would leave 85% of lobbying unreported (Cabinet Office 2013). The register specifically excludes several types of communication with government officials from the need for registration, including communication between client organizations and Government, communication with senior civil servants and ministers’ special advisers, and communication with government officials by organizations not represented by a consultant lobbyist. Violators may be fined but are not subject to prison time. Lobbyist gift-giving is allowed, and no revolving-door provisions exist. And although the three British associations that represent lobbyists6 had operated under a long-standing shared code of conduct, the Government chose not to include in the statute this code of conduct or any other rules of behavior.

The House of Common’s Public Administration Select Committee (2009) had recommended much more stringent regulations, which would have required that both consultant and in-house lobbyists register; that lobbyists report previously held public office jobs and that senior public officials disclose their previous private-sector employment; that details of meetings be disclosed including dates and topics discussed, if not full minutes; that gifts and hospitality be disclosed; and that compliance be monitored and enforced by a body independent of lobbying organizations and of the Government. The committee also recommended strengthening the existing Advisory Committee on Business Appointments, a part-time, unpaid, Cabinet Office committee that advises the Prime Minister on the ethics of proposed appointments of “revolving-door” government officials as they enter the private sector. Of these, only the recommendation that registering be mandatory (or lobbyists would not be allowed to meet with officials), rather than voluntary, was adopted in the law.

While mandatory registration is a step in the right direction (Kanol 2012), the Government missed the opportunity to make lobbying regulation more rigorous, as requested by stakeholders. A total of 259 comments submitted about the proposal during the consultation period (80 representative bodies and trade associations, 34 civil society organizations, 34 companies, 10 trade unions, 10 research organizations, 9 campaign groups, 78 individuals, 3 regulators, and one Member of Parliament; Cabinet Office 2012). Crepaz (2017a) reviewed these and found that 85% wanted the law to be stricter than proposed. Opposition party members called the proposal “ridiculously narrow”7 and speculated that it would likely “make lobbying more opaque, rather than more transparent.”8

The Government and some who submitted comments argued that further regulations could become burdensome and costly; that publishing financial information in the register would breach commercial confidentiality; that disclosure of staff lists from organizations working on high-profile and contentious issues would put individual people at risk; that adherence to a further code of conduct would be unproportionate and add additional burden on organizations already subscribing to wider industry codes; and that it was questionable whether a register would have any significant impact on lobbyists’ behavior (Cabinet Office 2012). We think a more plausible explanation is that the Government was more interested in publicly embracing transparency and accountability than it was in inviting public scrutiny of its private discussions and decision-making (see also Vargovčíková 2017, who makes a similar argument regarding attempts at regulating lobbying in Poland and the Czech Republic).

Difficult-to-use data on meetings with government ministers

In pursuit of transparency, and at least somewhat in response to the multiple lobbying scandals, in 2010 the Conservative–Liberal Democrat coalition established in the Ministerial Code a new requirement that British Government departments disclose quarterly lists of the external groups who met with government ministers. Each department uploads its own lists in its own format. The name of the organization or individual, the quarter in which they met with the minister or permanent secretary, and the purpose of the meeting must be reported, though the purpose is often listed as “general discussion” or similarly vague language. No additional information is required, though more information exists: minutes are generally kept, and the meetings are audio-recorded and frequently transcribed. The government argued that making available the minutes of meetings between all outside interests and government ministers would be costly and time-consuming.

Quarterly reports are filed online at http://www.gov.uk under the heading “transparency data,” along with tens of thousands of other government documents that might relate to transparency (e.g., salary disclosure data, hospitality and gifts, departmental spending). Thus, to get to ministerial meetings data, one has to search manually using either a keyword search (“meet*”) or by browsing the publication database by department and time period. While the data are arranged quarterly, they are not updated nearly as often as every quarter. Further, the published records are disclosed in different formats and with varying titles: For our period of analysis from the first quarter of 2011 up to and including the fourth quarter of 2015 there were 234 PDFs, 700 comma-separated value files, 52 MS Excel worksheets, 23 MS Word documents, six Open Document spreadsheets, 24 Open Document texts, and six rich text files. Some reports contained only meetings with external groups, others combined these with gifts, hospitality, and overseas travel reports; some reports separately reported meetings of individual ministers or secretaries, others synthesized all meetings of a department’s senior staff in one document; occasionally data from more than one quarter were included in a single document. As a result of these challenges, the meetings data are seldom analyzed (exceptions are Dommett et al. 2017 and Transparency International 2015).9

Focusing specifically on the evaluation of the usability of transparency data for member of the public (one of the CPI’s stringency criteria mentioned before), we follow Piotrowski and Liao (2012), who identify a set of criteria—accuracy, accessibility, completeness, understandability, timeliness, and low cost—which can be applied to any government transparency data. Following Holman and Luneburg (2012), we add as another criterion whether the provided data are searchable, so that comprehensive, comparative, and specially targeted database queries are possible. We now evaluate the ministerial meetings data according to these usability criteria.

Accuracy

(preciseness, factuality) The meetings data offer little information about the meetings other than the broad “purpose of the meeting.” Among the most commonly stated purposes are generic descriptions such as “trade and investment,” “energy issues,” or “tax matters.” And some are even less precise: More than 2500 entries refer to “general discussions,” another 2500 to “introductory” meetings, 1050 to “catch-up” meetings, around 450 to “regular meetings,” around 250 to “general meetings,” and around 550 to either “routine meeting,” “talk meeting,” or “roundtable discussion.” In an additional 200 cases, the purpose of the meeting is not reported at all. A total of 10% of our acquired reports fail to offer any policy-specific information about what was discussed in any of the meetings listed.

Another problematic aspect is the frequent disclosure of individuals’ names without any indication of organizational affiliation. In a random sample of 5% of the groups listed in the meetings data, we identified 53 such cases (5.2%). Examples include Jacqueline Gold, CEO of the multinational retail company Ann Summers; Jin Liqun, who was helping the government to establish the Asian Infrastructure Investment Bank; and Michael Hintze, founder and chief executive of CQS, a credit asset management firm. While most of these individuals have some level of prominence, ordinary citizens cannot be expected to recognize their names and link them to the organizations they represent. The vague descriptions of the purpose of meetings and the omission of organizations’ names suggest they are what Piotrowski and Liao (2012) would label “intentional concealment.”

Accessibility

Online access to the meetings data is public and open; no registration is necessary. All files can be accessed via either the general gov.uk website or the publications section of the individual department websites. All files can be downloaded in the format provided by the source. Files provided in the .csv format can also be previewed in-browser.

Completeness

By the middle of 2016, 92.6% of the 877 required quarterly reports were available for the years 2011–2015. (The “877” is a function of 20 quarters x 44 department positions, minus three quarters during which the office of the Deputy Prime Minister no longer existed.) The data cover only the top two of the three tiers of government ministers (the Secretaries of State and the Ministers of State; only the Foreign and Commonwealth Office and the Department for International Development also consistently reported meetings by their Parliamentary Under-Secretaries of State) plus the top level of the Civil Service (the Permanent Secretaries). However, the 5000 senior civil servants at the next levels do not have to report their meetings, nor do Special Advisers to ministers (their political staff). One department, Export Finance, had not published any meeting disclosures by mid-2016. The incomplete data provided and nondisclosure of meetings with other levels of government suggest a substantial shortfall in fulfilling Piotrowski and Liao’s (2012) specification that “all necessary parts” be published.

Understandability

All meetings disclosures are arranged and written in a way that makes them easily understandable. For the most part, the reports eschew technical language and the use of uncommon acronyms. Filers could possibly argue that the use of generic statements of the meetings’ purposes increases their understandability for the lay public; however, their lack of accuracy and completeness is better described as a hindrance to transparency and open government.

Timeliness

As mentioned above, our data collection during the third and fourth quarters of 2016 revealed that 7.4% of quarterly reports from the years 2011 to 2015 were still not available online. Moreover, almost 30% of reports about the first quarter of 2016 and 21% of reports about the fourth quarter of 2015 had not yet been uploaded, which indicates a failure on the part of departments to provide their transparency information in a timely manner.

Free or low cost

Apart from acquisition costs and internet access fees, access to the quarterly meetings reports is free of charge.

Searchability

The biggest usability obstacle is the lack of a complete and searchable database of ministerial meetings with external groups. Meeting reports are found in the publications database at gov.uk; they do not have their own site. This means users have to search and sift through a very large database of different document types to reach the meetings data. To give but one example: a keyword search for “BAE Systems” Inc., a company that has met with department officials 383 times between 2011 and 2015, with the filter “transparency data” for publication type at http://www.gov.uk/government/publications, yields 309 results, including documents about transactions, departmental spending, and contracts. And users still may not have a comprehensive set of what is available, since there is no website dedicated to meetings disclosure. It is also not possible to do a reliable targeted search for either external groups or Ministers/Secretaries. Considerable time and skill are required to collect, synthesize, and clean the disparate data.

Based on these criteria, the usability of the Ministerial Meetings data for citizens at large can be categorized as low. In Piotrowski and Liao’s four-quadrant typology of the relationship between transparency and usability (2012, 86), we would assign the UK to the “overload” designation “in which government information is disclosed in large amounts, but without sufficient attention to information usability” (Piotrowski and Liao 2012, 88).

The mismatch between groups that lobby and groups that meet with government ministers

Despite their numerous limitations, we now have access to plentiful data about the names of external groups that are meeting with particular British ministerial offices. We identified and collected 1045 files containing information about the ministerial meetings of 23 UK Government departments (including the Offices of the Leaders of the House of Commons and House of Lords10) from the first quarter of 2011 through the last quarter of 2015.11 In total the files include 72,756 recorded contacts between a ministerial department senior official and an external organization or individual. This is the greatest number of meetings between government officials and outside interests that has ever been included in a single data set (in a similar study, Dommett et al. 2017 retrieve and code 6192 meetings).

To calculate the number of unique entities with one or more meeting, a second data set was created which eliminated all semantic duplicates in the “external group” column. All acronyms were checked via a Google search, and entries’ designations in both data sets were changed to the full designation of the group. To also account for small differences in how organizations were designated (as well as typing errors), we used the Fuzzy Lookup add-on for MS Excel. All matched pairs with a matching score higher than 0.90 were checked for congruence and the designation of all entries referring to the same group—both in the list of organizations and the original list of all meetings—were standardized in a new variable according to the designation most commonly used by the group itself. The Fuzzy Lookup procedure also yielded matches for direct subsidiaries of business conglomerates (e.g., “Vodafone UK” and “Vodafone Group”); these were standardized under a single name (e.g., “Vodafone”). A manual check revealed further duplicates that could not be detected through semantic criteria; as examples, the “Anglican Church” was merged with the entry which uses the more commonly used designation “Church of England,” the “Government of Singapore Investment Corporation” was merged with the entry “GSIC Limited,” and “Harrow Council” was merged with the entry “Harrow London Borough Council.”

Figures 1 and 2 show the overlap between unique groups in the two sets of data. The light gray shows Type I error in the lobby register—lobbyists’ clients who have no reported meetings with government ministers. The dark gray shows Type II error in the register—groups that meet with government officials but are not included in the register. The overlap is the set of groups that appear in both sources of data. The two sets of data overlapped temporally in the four quarters of 2015; as such we provide statistics for the 2015 data alone in Fig. 2, and Fig. 1 presents the full data set—2011–2015 for meetings, and the first quarter of 2015 through the third quarter of 2016 for the register. For both data sets, the starting date is when the data began and the ending date is a function of when we wrote the first draft of this paper.

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Fig. 1

Overlap between groups in the lobby register and groups in the ministerial meetings data in the UK. Notes: The data describe groups in the lobby register for the seven quarters starting in January of 2015 and groups in the ministerial meetings data for the 5 years from 2011 to 2015. Circles and overlap are proportional in size to the populations indicated. Our analysis indicates that 44% of lobby clients and consultants in the lobby register appear in the meetings data, and just 2% of the groups in the meetings data appear in the lobby register

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Fig. 2

Overlap between groups in the lobby register and groups in the ministerial meetings data in 2015. Notes: Circles and overlap are proportional in size to the populations indicated. The data show that in 2015, 29% of lobby clients and consultants appear in the meetings data, and only about 3% of groups in the meetings data appear in the lobby register

Meetings without lobbyists

Only 2% of groups that we know met with government ministers and permanent secretaries in the 2011–2015 time frame are listed in the lobby register during the seven quarters starting in January of 2015. In the shared time frame of the four quarters of 2015, just less than 4% of groups mentioned in the ministerial meetings data also appear in the register of consultant lobbyists. Counting in terms of meetings rather than groups, 91% of reported ministerial meetings (and 91% in 2015 alone) were with groups and individuals whose names do not appear as clients in the lobby register. These high numbers were anticipated by the Public Relations and Communications Association and openly discussed during the bill’s debate on the floor of the House.12

Lobbyists that don’t lobby

Our analysis shows that 44% of the 918 clients and 116 consultant lobbying firms13 that are listed in the register in 2015–2016 also appear in the ministerial meetings data of 2011–2015. Restricting the sample to the 12 months for which we have data from both sources, Fig. 2 shows that just 250 of the 852 groups that appear in the register—29%—also appear among the 7303 groups in the meetings data.

The differences between data from different time periods suggest that lobbyists may register their clients as a matter of course or routine, while their meetings with ministers are intermittent and dependent on current events and shifting government priorities. Or, it may be that lobbying consultants find professional benefits to registering even if they are not actively communicating about policy with high-level ministers, which is an argument lobbyists made before the register was created. Alternatively, the issue may be that lobbyists meet most frequently with Special Advisers and civil servants (Zetter 2008), neither of which publish their meetings. Only officials in the top two levels of government—ministers, secretaries, and the leaders of the House of Commons and House of Lords—report their meetings activity, while lobbyists likely have more meetings with lower-level employees. Thus, there may be a large number of meetings between government officials and lobbyists that are not reported—and are not required to be.

The skewed distribution of ministerial meetings across groups

In addition to the many groups that meet with government officials but do not register as lobbying organizations, we know very little about the groups that are registered. This absence matters because registered lobby clients account for a disproportionate number of meetings. In 2015, the 3.4% of groups that appear in the meetings data that are also lobby clients account for 8.6% of meetings. Across the 5-year period, the average group in the meetings data appears 3–4 times, while the average lobby client appears in the meetings data 17 times. (In 2015, the average group meets twice with ministers’ offices while the average lobbying client attends five meetings.)14 Thus, the lobbying clients listed in the register are groups that the Government listens to, or at least meets with, especially frequently (Fig. 3).

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Fig. 3

Groups that met with UK Government departments from 2011 to 2015: distribution by number of meetings

Even if we disregard the lobby clients, the meetings data are distributed unequally. As seen in Table 1, 15 of the 25 most active lobby groups seen in the ministerial meetings data are not listed as lobbying clients in the register. These include umbrella business associations, such as the Confederation of British Industry and the British Chambers of Commerce, as well as companies with household names, such as the BT Group (formerly British Telecom), Shell, BP (British Petroleum), and Rolls-Royce, which together attended 960 meetings with government ministers in the 5 years between 2011 and 2015. The two-thirds of groups listed in the meetings data that attend just one meeting account for 20% of the meetings. Meanwhile, the 10% most frequent visitors account for 60% of all meetings with department officials, and the 1% most frequent visitors are present at 27% of the meetings. Among groups that meet with ministers that are also listed in the register, the top decile of most frequent visitors accounts for 64% of the meetings (45% in 2015 alone), and the top 1% are present at 14% of all meetings with department officials (8% in 2015 alone). This uneven distribution is evidence that some lobbyists have far greater access than others (also see Dommett et al. 2017). Yet users of the two data sets know nothing about the identities of these lobbyists, what measures they are lobbying about, or how much money may be involved.

Table 1

External groups that met most frequently with UK ministerial government departments, 2011–2015 (excluding media outlets)

Rank. Group. Type. Number of meetings

1 Confederation of British Industry. Business association (all business types). 608

2 BAE Systemsa. * Firm (aerospace, defense, security). 384

3 BT Group. Firm (telecom). 313

4 Barclays. * Firm (banking and financial services). 274

5 Shell. Firm (oil and gas). 270

6 Local Government Association. Organization of local authorities. 270

7 Federation of Small Businesses. Business association. 268

8 HSBC. Firm (banking and financial services). 247

9. Royal Bank of Scotland. Firm (banking and financial services). 245

10 Lloyds Bank. * Firm (banking and financial services). 212

11 British Chambers of Commerce. Business association (all business types). 201

12 Association of British Insurers. * Business association (insurance). 200

13 Pricewaterhouse Coopers. * Firm (professional services).198

14 BP (British Petroleum). Firm (oil and gas). 193

15 Trades Union Congress. Trade union federation. 188

16 National Farmers Union. Trade union. 185

17 Rolls-Royce. Firm (aerospace, defense, energy). 184

18 Network Rail. * “Arms-length public body”. 179

19 GlaxoSmithKline. * Firm (pharmaceuticals). 174

20 EDF Energy. * Firm (energy). 170

21 Centrica. * Firm (energy). 163

22 KPMG. Firm * (professional services). 162

23 British Retail Consortium. Business association (retail). 161

24 Tesco PLC. Firm (groceries). 150

25 EEF Manufacturers Organisation. Business association. 147

* These groups also appear as clients in the consultant lobbyist register

Discussion

Why did the UK Government choose not to adopt stricter lobbying regulations in 2014? Let us examine the Government’s stated reasons. First, the Government argued that additional requirements would be too costly and burdensome. We think it would not be costly or burdensome, and might even reduce the cost and burden, if ministers’ offices were given a common form, format, or online portal for reporting meetings. It would also not be costly and burdensome to the Government to ask consultant lobbyists to supply, in addition to the names of their clients, the names or offices of their lobbying targets as well as the subjects on which they were lobbying. Second, the Government claimed that greater disclosure of lobbying practices could lead to competitive advantages and disadvantages for registered lobbyists—but even if true, this would not affect Government, only lobbyists. Third, the government argued that the purpose of the register was simply to complement the meetings data that was already being published because “it remains unclear exactly whose interests are being represented when consultant lobbyists meet with government” (Cabinet Office 2013). But this disclosure was both unnecessary and unfulfilled: Our data show that lobby firms account for less than 1% of external groups in the meetings data and less than 1% of meetings. In fact, consultants named in the 2015 data were mentioned in the meetings data only five times before the 2014 law was adopted. Across the 5-year period, by our count, the meetings data include the names of 31 known consultant lobbyists, while the same data contain 431 registered lobby clients. Moreover, even in those relatively few cases in which a consultant firm is mentioned as having met with a government minister’s office, we still do not know on whose behalf the consultant lobbyist was working, since the register shows that firms represent 8–9 clients on average. So, the explanation that the purpose of the register was to identify the clients of lobbyists’ meeting with departments does not hold water. In summary, we find that none of the Government’s arguments for its minimalist register withstand close scrutiny, especially given the significant and growing number of other jurisdictions that now regulate lobbying around the world.

Crepaz (2017a) argues that the UK regulation is yet another example of how right-leaning political parties in government share an ideological preference for low-regulation lobbying. Crepaz concludes that lobbying scandals had only an “agenda-setting effect” on the UK’s lobbying law. We think that, while the Government may well have had an ideological commitment to “light touch” governance, the main reasons the Conservative–Liberal Democrat coalition Government created a lobby register were to respond to criticism and to prevent future lobbying scandals. Less charitably, the objective might also have been to obscure the fact that ministers and their offices spend about 60% of their external group meetings with the 10% of groups that visit most frequently, and that they spend 27% of their meetings with the most frequently visiting 1% of groups. This fact is consistent with the idea that politicians across Governments are cross-pressured to demonstrate a commitment to public accountability while keeping much of their decision-making processes private.

Conclusions

The late Grant Jordan contended that an examination of lobbying is essential to understanding contemporary British politics (1991, vii), and lobbying in Britain is considered by some to be “the most developed” in Western Europe (Miller and Dinan 2008). Yet the centrality of lobbying in the UK is belied by the inadequate rules governing disclosure of lobbying activities.

We make four critiques of the UK government’s transparency efforts regarding lobbying. First, the 5-year-old lobby register misses the majority of lobbying that occurs in London, especially lobbying by those firms and campaigning organizations that lobby on their own behalf. The names, targets, and expenditures of lobbyists are not reported, let alone the subject matter being discussed, and there are no limitations on gift-giving or revolving-door employment. Our corrected application of the criteria of the U.S. Center for Public Integrity, as also used by Keeling et al. (2017) and Chari et al. (2019), puts the UK as among the least robust of lobbying regulation regimes.

Second, the Government’s published data about ministers’ meetings with outside groups, which were touted as an effort toward transparency, are almost totally unusable as provided. Applying the criteria for the usability of government information laid out by Piotrowski and Liao (2012), with the addition of Holman and Luneburg’s (2012) searchability criterion, we conclude that the usability of the meetings data is low.

Third, there is very little overlap between the two sets of data. Our analysis of more than 72,000 meetings reported by government departments shows that the lobby register contains less than 4% of the organizations that we know met with government ministries. Conversely, data about ministerial meetings data contain no records of meetings with as many as 70% of the clients we know contracted with professional lobbying firms.

Fourth, we note a tremendous skew in the distribution of ministers’ meetings with lobby groups. The majority of meetings are held with just 10% of the groups, and more than a quarter of meetings are with just 1% of groups. This skew may be the kind of private information that the Government does not wish to make public.

The inadequacy of the lobby register and the meetings data, combined with the Government’s conscious decision not to adopt stricter regulations, call into question the transparency to which the Coalition Government said it was dedicated. Worse, these lapses make it easy for firms and special interests in the UK to manipulate the policy process out of the public eye. As a result, researchers, journalists, and the public do not know whether or to what extent outside groups are taking advantage of this opportunity to work in relative secrecy—and we cannot find out using the data available.

Footnotes

1.
This ranking is conducted by the World Wide Web Foundation in the third edition of its Open Data Barometer Global Report (2016), available at http://opendatabarometer.org.

2.
Despite being among the first countries to regulate lobbying, Germany’s lobbying regulations are comparably quite weak (Ronit and Schneider 1998).

3.
In addition, all 50 U.S. states have a degree of lobbying regulation (Newmark 2005).

4.
According to the law, “knowingly and willfully” failing to report may be punished by up to one year in prison and a fine of up to $50,000; “knowingly and corruptly” failing to comply may result in up to five years in prison and a fine of up to $200,000.

5.
Tom Brake, debate on floor of the House, 22 January 2014.

6.
The three organizations representing the lobbying profession were the Public Relations and Communications Association, the Association of Professional Political Consultants, and the Chartered Institute of Public Relations.

7.
Michael Meacher, debate of the Floor of the House, 3 September 2013.

8.
Jon Trickett, debate of the Floor of the House, 9 September 2013.

9.
For about a year and a half, a website run by the company Moving Flow consolidated these meetings data and provided a searchable interface (http://whoslobbying.com), but they ceased doing so in September 2011.

10.
The Offices of the Leader of the House of Commons and the House of Lords constitute ministerial departments within the Cabinet Office, which is itself a ministerial department of the UK Government.

11.
The Department for Energy and Climate Change became part of the Department for Business, Energy and Industrial Strategy in July 2016, and the Department for International Trade was established in July 2016.

12.
Graham Allen, debate of the Floor of the House, 9 September 2013.

13.
We estimate that less than 1 percent of the meetings listed were with registered lobby consultancies.

14.
These numbers are means; the medians are 1 and 6 for the whole period of the data and 1 and 2 for 2015 alone.

Notes

Funding

Funding was provided by Economic and Social Research Council (GB) (Grant No. 102907R).

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

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Brexit: epitaph for a national trajectory now loss

Brexit: epitaph for a national trajectory now los

Many developments in national histories also mark watersheds in the personal lives of their citizens, and for the economist John Van Reenen the advent of ‘Brexit Day’ is a case in point. In a personal essay he reflects both on the emotional colouring of this event, and on the economic costs implied for the United Kingdom.

As I write on 31 January 2020, Britain leaves the European Union (EU). The loss I feel is almost as much as when my father died, almost a quarter century ago. He was 16 when he came to Britain with my grandfather who was a South African political refugee. After completing his UK national service, he married the daughter of a Merseyside dockworker. They moved to Carlisle where I was born, to run a new community centre. Then later back to Liverpool where I started school.

My secondary education was in Kelsey Park Comprehensive School. When I started it had just converted from a Secondary Modern, schools for kids who failed their 11+ exams. It was in the late 1970s and early 1980s – a brutal place in a brutal time. I remember our class having a mock vote in the 1979 election. The most popular two parties for our boys were Mrs. Thatcher’s Conservatives and the National Front, an overtly racist party promising to send foreigners ‘back to where they came from’.

The lead up to and aftermath of the Brexit vote reminded me of the atmosphere of those times. Hate crimesboomed. Economic hardship meant that people wanted to find someone to blame. Many groups stoked up fear of immigrants ‘sponging’ on welfare – even though European migrants were young, educated and paid more in taxes than they used in public services, subsidising the British-born. If it is not immigrants, then it is all the fault of those foreign Brussels bureaucrats. Decades of anti-EU propaganda poured poison into English ears, leaving many people woefully uninformed on EU issues. A leader in the media tirade was the Daily Telegraph’s Brussels correspondent, Boris Johnson.

I often wondered why the Leavers kept lying about the membership fee we pay to be in the EU. Everyone from the head of the Statistics Authority down called Johnson out on it. But then I began to recognize that it was all deliberate. First, every time it was shot down the figure was mentioned, and all people would remember was the lie, like an advertising jingle. Second, it was like Donald Trump: a deliberate strategy to show utter contempt for the truth. The populist right abetted by a supine media, now create a set of alternative facts, where you trust your tribe and are sick of experts. So I was saddened, but not surprised, when Leave won the referendum vote. The blossoming of fear and erosion of reason gave me an awful sense of déjà vu from my school days.

Do not get me wrong: people in the UK have every right to be angry about many things. Average real wagesare still lower than before the global financial crisis – making it the worst UK pay stagnation for centuries. The irony is that this has nothing to do with immigration or the EU, but much more to do with domestic policy failure. In particular, the Conservatives enthusiastically embraced extreme austerity in 2010, cutting public investment and keeping productivity growth in the economy miserably low. No surprise then that the areas hardest hit by austerity were the ones most likely to later vote for Brexit. Attacking the EU meant that the Conservatives were able to pretend it was not their cuts that meant you waited longer for your GP, or found it hard to get a place at the local school. It was the immigrants cutting in line. And many in the media merrily thumped the same beat.

The high economic price of Brexit 

The worst aspect of Brexit is the political and moral damage it does to the nation. But the economic damage is also horrendous. The economic hurt from Brexit is easy to understand. Thousands of years of human history have taught us two lessons about trade. First, we trade most with countries that are geographicallyclosest to us, and even in these days of low communication costs, distance seems to matter just as much as ever. The second lesson is that trade makes us more prosperous, especially when we exchange with wealthy countries like those in the EU, where there is little risk of increases in our domestic wage inequality (compared with a lower wage country like China).

Brexit will raise trade costs with our nearest neighbours. Even if we somehow manage to have a big beautiful trade deal with the EU and set all tariffs to zero, the non-tariff barriers of border checks and regulatory divergence will be much bigger barriers. These higher costs mean less trade and less trade will mean lower British incomes. It also means less foreign investment because the Japanese carmakers and American banks who come here do so, in large part, to get access to the EU, still the largest single market on the face of planet earth worth $19 trillion and including half a billion people. Lowering trade and investment reduces productivity still further, pushing down wages.

The precise scale of the cost will depend on the type of Brexit. The independent think-tank, UK in A Changing Europe estimate that Johnson’s deal will, in the medium run, cut average incomes by around 7.8% compared to remaining in the EU. Trading under WTO terms is worse (an 8.7% loss), but not much worse. These are pretty much the consensus estimates – even the government’s own official estimates agree. These losses include the savings made from cutting our EU membership fee, but this fiscal transfer is trivial – 10 or 20 times smaller than the impact of higher trade costs. Some estimates of the Brexit losses (like my own) are bigger and others are smaller. But every credible estimate has shown that Brexit will make Britain poorer than remaining. For the masochistically inclined there is some more in this post on the economics or the excellent Centre for Economic Performance (CEP) series here and here.

An 8% loss of income is truly awful. In human terms, it means fewer nurses and doctors, so that more people are left waiting in pain for healthcare, and more will die due to inadequate care. Fewer police mean that more people will be the victims of crime and fewer criminals will be brought to justice. Fewer teachers mean that kids will get a worse education and suffer worse outcomes for the rest of their lives. In plain terms, this is the Brexit legacy: a conscious choice to have more death, pain, violence and ignorance.

Ah, but don’t economic forecasts always get it wrong? These are not forecasts trying to guess exactly where the economy will be. They are like a doctor’s advice telling you not to take up a 20-a-day cigarette habit. The doctor cannot say at what date you will die or get lung cancer, but she can tell you for sure that the ciggies will be very, very bad for your health.

What has happened to the economy since the vote?

The major damage of Brexit will happen after we find out what deal is struck with the EU. But the fact that we will be poorer in the future is already having an impact. For example, sterling crashed in the hours after the first referendum results came in, which drove up UK prices over the next few years. Weaker demand has also caused big falls in investment in capital and training. Most estimates suggest 2-3% has already been knocked off national income whether we compare Britain to other countries, to counter-factual economic models (what would growth have been without Brexit and the referendum?) or to pre-referendum forecasts. ‘Project Fear’ has turned out to be Project Reality.

I was Director of the CEP at LSE for 13 years. Almost immediately after Cameron’s 2013 speech promising a referendum on the EU, I put a team together to analyse the likely impact of leaving. The reward for the careful work and reports on Brexit we produced over the next few years was ongoing vilification by Brexiters. My personal nadir was when Michael Gove told us that we were like ‘Nazi scientists’ persecuting Einstein with our pesky facts and reason. Well, when the Minister of Justice calls you a Nazi, you know it’s time to get out of town. So, I did my own personal Brexit and took a job at MIT.

Democracy under attack 

I came back last year to fight for a Peoples Vote. In my view, allowing Britain a chance to vote on what the terms were for leaving the EU was a democratic and moral imperative. The idea that the UK would flounce off the Single Market and Customs Union under Johnson’s hard Brexit was not on the 2016 ballot paper. The country was split down the middle by the vote with two of the four nations of the UK voting to remain. Polling from 2017 to late 2019 consistently put Remain ahead of any sort of Leave, let alone its extreme form. This was hardly surprising as the public is now more aware of what Brexit actually means.

I strongly felt that now we know what Brexit is, surely the only democratic thing was to put it back to the people? Let us be honest. No one fully understood what Brexit meant in 2016 – I certainly did not and I have spent much of my adult life studying trade and the EU. We do know that the vote was corrupted by manipulation on social media, the illegality of the Leave campaigns and Russian money (and we would know more, if the government would release the suppressed report). Talking up the ‘biggest democratic vote’ ever is palpable nonsense, when the UK population is the largest it has ever been! It seems crazy that we can have a violent constitutional rupture of a near 50-year marriage based on the view of 25% of the population, or 37% of the eligible voters, in a contest where a 2% swing would have changed the result.

The electoral victory of the Conservatives in 2019 was no vindication of Brexit – most people voted for parties that did not want to leave today. The chief enabler of the Conservative win was Jeremy Corbyn, who refused to vigorously campaign against a Brexit that will impoverish the working class. His ambivalence helped Leave win in 2016 and his irrational choice of voting for an election he was certain to lose seems a perfect example of the hard left’s refusal to ever look reality square in the face. Johnson’s majority reflects the failings of Corbyn’s unpopular manifesto policies and feeble leadership of the Opposition.

How did we get here?

The EU has been a force for peace between nations that until recently were at war for centuries. It has enabled these warring tribes to trade and grow closer. European countries now fight each other over fishing quotas instead of bloody fields. This accomplishment was achieved without blood and battles, but through a growing club who realised that our mutual self-interest lay in cooperation instead of conflict. Britain has been a later but proud member of this club, helping build the single market and guiding the club’s expansion to help bring prosperity and stability to countries formerly under the yoke of fascist regimes in southern Europe and communism in eastern Europe.

Many Brexiters are the vanguard of the populist nationalists who hate the EU, because it promotes a rules-based order rather than a tribally-based struggle for power. Unsurprisingly it is apparent that Trump and Putin love a weakened Europe, one that they can bend to their will. They undermine the international cooperation, which is our only hope to deal with the global challenges humanity faces. No wonder these authoritarians reject policies to tackle climate change. They reject reason, facts and experts. They want to return to a nativist world based on gut instinct, where civility is overruled by the mob, manipulated of course by the iron fist of demagogues.

Where do we go from here? 

It is easy to fall into despair in these dark times, but from where we are we must look to the future. First, the main opposition party needs to be re-built. Corbyn was a disaster as leader – a dinosaur of the Eurosceptic left who regard the EU as a capitalist conspiracy to thwart socialism in one country. By contrast, the election of a credible pro-European leader like Keir Starmer would be the first step towards renewal.

Second, it is vital for people to know their enemy. From Trump to Bolsonaro, the populist modus operandi is to stoke nationalism and blame foreigners. Johnson illegally suspended parliament rather than let MPs hold him to account. His government seems likely to continue an assault on facts and reason. If it follows the populist playbook it will soon attempt to corrupt and corrode independent institutions like the judiciary, university and the media. We must prepare to fight tooth and nail to defend key institutions against any such onslaught.

Third, we need to find stronger alternative policies and much better professional and economic narratives to deal with the real social and economic problems that caused the Brexit spasm. This needs new economic models and fresh thinking .

Finally, the project for us, our children and grandchildren must be to rejoin the EU – or whatever successor form it evolves into. The challenges that we face as a species are global, whether it is healthcare pandemics, climate change, AI-enabled military threats, the dominance of superstar multinational firms, or dealing with the emerging giant states in China and India, each commanding a sixth of the world’s population. Reverting to a petty UK nationalism does not solve these problems – it just makes them worse. One day we will rejoin and rejoice. Today we mourn, but tomorrow the fightback starts.

 _____________________

Note: The author’s original article included this dedication: ‘Dedicated to the memory of Jo Cox.’

About the Author

John Van Reenen is the Gordon Y Billard Professor in Management and Economics and is jointly appointed as Professor of Applied Economics at the MIT Sloan School of Management and in the Department of Economics.

 

The above blog gives the views of the author, and not the position of LSE British Politics and Policy, nor of the London School of Economics and Political Science. Featured image credit: Jannes Van den wouwer on Unsplash.

One Comment

  1. Clint Ballinger January 31, 2020 at 3:05 pm – Reply
  2. You write “it means fewer nurses and doctors…Fewer police…Fewer teachers…”
    But the amount of funding for the NHS, for police, and for teachers are policy choices. The UK can hire (or provide £s to local councils to hire) as many nurses, doctors, police, and teachers (and hospitals, schools, training facilities, etc.) as there are available resources in the UK (or willing to work for £ in the UK).
    ECB austerity policies (enabled by the EU) have done exactly what you worry about in the Eurozone, and to a massive degree, causing utterly unnecessary suffering in Greece and throughout the Eurozone.
    It is ridiculous to state that leaving the EU in any way changes the ability of the UK to provide itself with anything less than world class healthcare, well trained police forces, and world class education. The austerity mindset of the EU, the Tories, and Blairite “Labour” (i.e., not Corbyn) is why the UK has suffered a decline across the board in those areas.
    An understanding of the power of the UK government to organize world class performance in all of those areas, and the current political lack of will to do so, is crucial.
    To state that the problems have to do with Brexit is nonsense.
    It is a question of the public electing politicians who understand how government finance actually works, and the power of the UK government to organize public projects.

A sense of public duty and freedom of the press are considered to be vital for the health of liberal democracies.

The press is supposedly devoted to pluralist perspectives and exposing all that governments and wealthy elites routinely would like to sweep under the rug.

But does the media truly value this responsibility?

The 2019 general election campaign saw much of the media systematically cover the Labour Party’s leader in a negative light, often with little/no discussion of the policies. Hostile press coverage aimed at Labour in December’s election was more than double the intensity found during the 2017 vote, according to a study reported by the Independent.

Events and angles threatening to major advertisers, financial backers and influencers are all too often marginalised or ignored altogether.

Peter Oborne, the Daily Telegraph’s former chief political commentator resigned over what he said was a policy of deliberately suppressing negative stories relating to HSBC, including the latter’s role in allegedly helping wealthy clients to dodge taxes.

HSBC was a lucrative advertising account for the Telegraph. For the paper, Oborne reported, HSBC was “the advertiser you literally cannot afford to offend”.

Craven coverage in the finance industry

The finance industry has a history of mis-selling a variety of financial products, such as mortgages, investment bonds, split-capital investment trusts, precipice bonds, interest rate swaps, self-invested personal pensions, payment protection insurance and pension transfer advice. It has been involved in the rigging of interest/exchange rates, tax avoidance, bribery, corruption and money laundering. The UK has had a banking crisis in every decade since the 1970s, culminating in the 2007-08 crash.

Amidst the stream of anti-social practices, the finance industry is seeking to portray itself as socially responsible by showing how much tax it pays.

Earlier this month, a report by PricewaterhouseCoopers (PwC) claimed that in 2019 the industry paid £75.5bn in UK taxes. PwC audits many of the financial enterprises but here is acting as a PR and policy advocate for the industry, all for an undisclosed fee.

The press release and the £75.5bn figure was dutifully parroted by the Daily Telegraph, Daily Mail, New York Times, City AM, Accountancy Daily (published by the Institute of Chartered Accountants in England & Wales) and many other outlets –without asking any questions about PwC’s conflict of interests.

None seem to have actually examined the report. If they did, they would have noticed that the £75.5bn is not an actual amount. It is extrapolated from a sample of 52 companies. The report adds that “PwC has not verified, validated, or audited the data and cannot therefore give any undertaking as to the accuracy of the study results”.

£42.1bn of the alleged tax contribution relates to taxes collected from customers (e.g. VAT) and employees (PAYE and National Insurance Contributions). These are not directly borne by the industry.

The PwC report is silent on the cash flow boost provided by taxpayers. Taxes are collected and paid by companies to HMRC in arrears. For example, VAT settlement is generally made each quarter and PAYE amounts are paid to HMRC about three weeks after the event. The net effect is that the finance industry effectively received an interest-free loan of £42.1bn, financed by customers and employees, for a period of three weeks to three months.

The report claims that £33.4bn of taxes were directly borne by financial services firms – a claim which cannot be corroborated.

The report makes no mention of the social impact of its anti-social practices,and in doing so exaggerates the finance industry’s contribution to society.

We all remember the 2007-08 bank bailout which ushered in never-ending austerity, the ongoing scandals of HBOS and RBS frauds, forging of customer signatures, mis-selling of financial products,  London Capital & Finance and other corporate collapses.  

An independent study estimated that between 1995 and 2015, the UK finance sector cost the UK economy around £4,500bn in lost economic output. £2,700 billion relates to misallocation of resources which have been diverted away from more productive activities of the economy to the finance sector, and £1,800bn relates to the 2007-08 crash and its aftermath.

The skewed reporting of finance and politics more generally is a matter of deliberate choice by the media.

It is a form of censorship, with advocacy for advertisers and political objectives favoured by the elites. The left needs to develop strategies for resistance.

Prem Sikka is professor of accounting at the University of Sheffield and emeritus professor of accounting at the University of Essex. He is a contributing editor to LFF and tweets here.

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