UK: IN THE WAKE OF THE NOLAN RECOMMENDATIONS. - Is there any point in companies retaining MPs as consultants?

Last Updated: 31 Aug 2010

Is there any point in companies retaining MPs as consultants?

The vote by MPs last November to endorse the recommendations of the Nolan committee was hailed as the start of a new era of openness in the dealings of Parliamentarians with the outside world. Under the new rules, ratified by a huge cross-party majority, MPs are now barred from undertaking paid 'advocacy' - a term which covers the asking of questions, tabling of motions and drafting of legislation - on behalf of outside clients.

But what difference does this make to the often uneasy relationship between Parliament and industry? Is it still worth a company retaining an MP as a paid consultant? And, even if so, will a concern over propriety and allegations of 'sleaze' now make some companies less willing to do so?

One straw in the wind is the move by a number of major political consultancies to part company with their retained MPs. Last year, for example, Shandwick Consultants, which has a range of blue-chip clients, broke off its long-standing relationship with David Mellor, its only paid Parliamentary adviser. Similarly, in August, Westminster Communications dropped the four MPs - two Conservative, one Labour, one Liberal Democrat - it had previously retained. Tom NcNally, Shandwick's director of public affairs, explains the move in terms of the firm's exasperation at misinformed reporting in the media. 'Over the course of a year or more just about every "sleaze" story in the press made reference to the fact that Shandwick retained David Mellor. In the end it became too tiresome for both of us and simply not worth getting our two names intertwined.' Some in the lobbying industry observe the same principle at work among large industrial firms. 'In the wake of Nolan many companies are seeking to distance themselves from Parliamentarians,' says Gerry Wade, who, prior to setting up lobbying firm Bruce Naughton Wade, represented IBM for 25 years. Mark Hatcher, head of public affairs at Coopers & Lybrand, echoes this view, though adds. 'Just as we've seen increasing numbers of companies stopping their contributions to political parties, so I think we will see some who are cautious about renewing their contacts with MPs.' Coopers itself uses David Howell, former energy secretary and Conservative MP for Guildford, as a consultant. It stresses, however, that this arrangement is based on his professional skills as an energy economist, rather than in any lobbying capacity.

Over the last year some FTSE-100 companies have cut their links with Parliamentarians. On his appointment as director of UK government affairs at SmithKline Beecham last June, Chris Strutt unravelled the 10-year relationship with the drugs giant's retained MP. Strutt insists, however, that it was not Nolan-based sensitivity that motivated his decision but a hard-headed concern for value. 'A number of people in corporate affairs have begun to realise that their money is better spent through a specialist agency,' he says. 'The trend away from retained MPs was already in process before Nolan. The vote may well have either maintained or accelerated that trend.' Chris Davies, head of UK public affairs at Bristol Myers, concurs. 'Nolan isn't the only thing driving this forward. The whole lobbying business is becoming more high-profile and more professional - especially in highly-regulated industries such as pharmaceuticals, where the relationship with government is that much more important'.

The effects of this increasing professionalism, according to Peter Bingle, managing director of government and public affairs at lobbyists The Communication Group, will be two-fold: a move by companies to strengthen their in-house public affairs activities, and a switch from the use of MPs to paid consultancies; 'not because what happened in the past was wrong', he says, 'but because the public mood has changed'.

Charles Miller, secretary of the Association of Professional Political Consultants - a trade body set up for lobbyists who eschew financial links with Parliamentarians - is not so sure. 'Many organisations are reluctant to shed their retained MPs. One reason is that in most cases they paid MPs as advisers, not as fixers. The last thing they want is stories saying they have dropped their MP. On the contrary, they want to remain out of the spotlight.' Overall he predicts that 'there won't be an enormous shift. Companies will, however, be much tighter in their drafting of agreements with MPs, which will now be quite explicit about what they will and will not do.' Whether the days of the retained MP are over will only become clear at the beginning of April, when the Nolan rules take effect and MPs are for the first time obliged to disclose their outside earnings.

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