Brits are best at lobbying the EU... to what end?

The British lobby has one of the loudest voices in Brussels, doing untold damage to European law and democracy. Who are these shadowy lobbyists, what are they pushing for and who benefits?

Rachel Tansey
13 December 2012



Lobby firms active in Brussels by turnover

In Brussels, where there is less civil society pressure and little public debate, corporate lobbyists play a bigger role than nationally. Lobbyists have become a comfortably and deliberately entrenched part of the policy-making process. The lack of proper transparency and ethics rules, the power of money,  Europe's complex decision-making processes and the general public disengagement, mean that progressive social and environmental policies are too often abandoned in the interests of big business. From austerity measures that are ripping apart the social fabric in many EU states, to woefully inadequate environmental policies and a catastrophic lack of climate ambition.

 The rise of corporate lobbying is accompanied by an erosion of participatory democracy in both the UK and the EU. Democracy gives way to lobbycracy. But it is not a simple story, and certainly not the story the tabloids tell. Euroscepticism may be widespread among the British public, but big business knows the value of the EU, estimated at £30bn-£90bn per year, or as much as 15 times the "cost" to the UK of its membership in 2011. Big business also knows that around half of UK laws originate in Brussels.

 Which is why, whatever the public mood may be, our profit-hungry, tax-avoiding, business-as-usual-and-to-hell-with-the-consequences corporations care very much about Europe.

 The Great British lobby-off

 The EU has a voluntary lobby transparency register, run by the European Parliament and the Commission. No prizes for spotting the irony. Those who choose not to sign up can comfortably remain out of the public eye. The EU's register has 5,491 entries, but there are many missing from this list.  An estimated 25,000 lobbyists roam the corridors of Brussels. Much of the register's information appears incomplete or misleading, with budgets under-reported, and clients undisclosed. Nonetheless, it is better than no register at all - which is the situation in the UK.

 British lobby groups and corporations are among the biggest players in the murky world of the so-called “Brussels bubble”. Britain is the home to some 13% of the lobby groups active in Brussells. Given that there are 27 EU member states, and many other non-EU country lobby groups targeting Brussels, the UK's companies, trade associations, consultancies, law firms and think tanks are punching well above their weight. We come second only to Germany, which, it's worth bearing in mind, is a country with 20 million more people and a GDP one third bigger –  over $1 trillion – than Britain's.

 Banking on British business interests

 Numbers aside, UK business interests have done lasting damage to EU law. In Brussels, the UK is understood to be one of the most “business-friendly” member states. When it comes to the financial sector, it is taken for granted that the UK's position is, quite simply, the City's. This has huge repercussions on policy.

The World Development Movement has described how the UK's financial regulator, the Financial Services Authority (FSA), has been captured by the commercial interests of the industry it is meant to regulate. With extensive funding from the City, big banks on their board, and a revolving door between FSA staff and lucrative banking jobs, the FSA has become a puppet for the interests of the financial sector. And it acts in their interests in Brussels. As a result, Members of European Parliament (MEPs) have tabled pro-industry amendments that came directly from the FSA; FSA staff members have been seconded to EU institutions and committees, and the City of London has enormous influence over EU policy.

 Climatastrophe, brought to you by BP

 The impact of Britain's corporate giants is also conspicuous on the EU's climate and energy policy. It is mainly thanks to British Petroleum (BP) that the EU is home to the biggest carbon market in the world, the EU Emissions Trading System (ETS). Europe's flagship policy for dealing with climate change. But the EU's flagship is captained by big business and manned by corporate brigands; it has failed to reduce carbon emissions, created billions of pounds of windfall profits for the biggest polluters, and locked-Europe into a fossil-fuel economy.

 BP's Brussels office on Rond-Pont Schuman is the most expensive office space in the city, next door to the European Commission headquarters, and opposite the European Council, where heads of state and national ministers gather. An excellent place to ensure their voice was heard when touting the merits of a carbon market. A message they'd honed in partnership with the UK government.

 Their trick, like most big-business, is to promote their message through many channels, building the appearance of legitimacy. BP lobbies directly, using lobby consultancies, through the UK government, and through industry groups, such as the European Petroleum Industry Association, the European Round Table of Industrialists and Business Europe. BP also works through think thanks that aim to shape the public debate, like the Centre for European Policy Studies and Friends of Europe. And through MEP-industry forums like the European Energy Forum (EEF), a club bringing together MEPs and major energy companies. EEF has the appearance of Parliamentary credibility, but represents little more than an under-the-radar lobby showcase for big energy corporations.

 Expert lobbyists and revolving-doors

 Corporate lobbyists and big business representatives also play a role as in-house experts for EU institutions, as members of expert groups, set up to advise the European Commission on different policy areas and issues. Expert groups are often dominated by industry, contributing to corporate capture at a very early stage of policy-making. The register of expert groups shows that UK interests are very prominent, with 13% of “individual experts representing an interest” from the UK, more than either France or Germany.

 The revolving door also sees public officials go straight into lobby jobs for big business. Big business gains inside-knowledge, vital contacts, and above all, powerful influence. The interests of the regulator merge with the interests of the regulated. This practice is common in Westminster as well as in Brussels.

 A number of staff from the UK government's permanent representation in Brussels have jumped straight into EU-level lobby jobs linked to the finance sector. In 2011, Mark Foster joined lobby consultancy Kreab Gavin Anderson, and Parvez Khan joined consultancy g+, from senior positions in economic and monetary affairs. Although there are some rules intended to prevent conflicts of interest from arising through the revolving door for EU staff, there are none for permanent representation staff.

 Smokescreen or smoking gun: the “Dalligate” lobby scandal

 A recent lobby scandal has rocked Brussels, with one of the European Commission’s top officials being forced to resign following allegations of cash-for-influence. The tobacco industry claimed they’d been asked for tens of millions of euros by an unregistered lobbyist linked to health commissioner, John Dalli, in exchange for influencing EU tobacco policy. But the whole scandal remains shrouded in smoke, with fears that Dalli may have been caught in a tobacco industry set-up designed to delay changes they don't want. Civil society is demanding that the facts be released and stronger rules on lobbying transparency.

 Although much remains unknown about “Dalligate”, a number of lessons are very clear. The voluntary lobby register must become mandatory, ending the bizarre system whereby transparency rests on the whim of those attempting to promote their interests. This is a necessary prerequisite to enabling public scrutiny of who is trying to influence who, on what topics, on behalf of which clients, and with what budgets. The UK must also urgently introduce a system of mandatory and enforceable lobby transparency, so that the process of exposing the layers of lobbycracy can begin.

 Dalligate has also shown the need for more proactive transparency from the EU institutions. If Commissioners regularly published details of their meetings with lobbyists, the mystery and appearance of corruption that comes from undeclared, behind-closed-doors meetings would have been avoided. In this area at least, the UK has the beginnings of better system, requiring government ministries to publish quarterly reports.

 Lessons for lobbycracies?

 The moral of our story, the fairytale of Lobbystiltskin, is that democracy is getting a pummelling from corporate lobbyists on both sides of the Channel. We urgently need rules to curb corporate capture, and politicians bold enough to stand up to big business, in Westminster and in Brussels. But the more disinterested the "demos" is, wherever that may be, the easier it is for the voices of narrow economic interests to fill the gap, pushing for weak regulatory frameworks that allow profit-maximisation at the expense of social and environmental justice. And the more democracy gives way to lobbycracy.


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