Ruling on Peter Mandelson’s firm shows Britain’s lobbying laws are a farce
The lobbying watchdog has cleared almost every case it has investigated. Why? Because our laws are designed to be ineffective.
Britain would be better off if it had no laws on lobbying.
Yes, you read that right. Our lobbying rules shouldn’t exist.
Before you start to wonder if Democracy for Sale has lost its mind, let’s imagine for a moment if we had no lobbying laws. Every time a scandal broke, ministers would be forced to field questions about their absence.
“How can this government allow a situation where the public has no idea about who is being lobbied and by whom?”
Instead, we have lobbying rules so bad they are practically useless.
Today we’ve got two prime examples, both relating to Global Counsel, the lobbying firm founded—and still part-owned—by our new ambassador to the US, former New Labour supremo Peter Mandelson.
Later in the piece we’ll be talking about new documents that we unearthed that show how Global Counsel has been advising government ministers that it previously donated free staff to.
But first, let’s look at the latest ruling from the Office of the Registrar of Consultant Lobbyists (ORCL).
The lobbying regulator launched a probe into Global Counsel in October after an investigation by this newsletter revealed that the firm had failed to disclose its work for the Qatar Free Zone Authority (QFZA).
We had found that Global Counsel’s London-based chief executive, Benjamin Wegg-Prosser, met then-international trade minister Lord Dominic Johnson three times in 2023, lobbying on “twinning” UK freeports with Qatar free trade zones, among other things.
ORCL didn’t dispute our story but found that Global Counsel hadn’t broken any rules. Why? Because QFZA had hired the firm's Middle East subsidiary, Global Counsel MENA, rather than the UK parent company.
“Based on assurances provided, GCL did not receive any payments from QFZA, directly or indirectly, for the periods investigated,” the regulator said.
You might ask how a parent company would not benefit when its subsidiary does business. You might also say it shouldn’t really matter whether it was Global Counsel Ltd in London or Global Counsel MENA doing the lobbying, it should all be registered. But no.
Under the grandly named Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, lobbyists who are not registered for VAT in the UK are exempt.
Yes, you read that right. If you are a UK-based lobbyist who has turnover of less than £90,000 you don’t have to register. Even worse, foreign businesses don’t pay VAT - so foreign lobbying firms can operate in the UK with almost no scrutiny.
The Qataris were a client of Global Counsel’s Doha office, which doesn’t pay VAT, so nothing needed to be registered.
This so-called ‘VAT loophole’ isn’t new. Last year, former Tory minister Brooks Newmark (yes, that Brooks Newmark) was cleared of failing to register as a lobbyist for a Hong Kong-based PPE supplier that received nearly £260m in Covid contracts. The reason? The payments came from an overseas company, meaning there was no UK VAT registration.
The VAT loophole is just one of many exemptions that make it almost impossible to break our lobbying laws. That’s why 96% of investigations by the regulator in the five years to 2024 ended in no action, with just £3,180 in fines levied in that time.
And who was responsible for these laws, which Transparency International estimates capture just 4% of lobbying activity? Former prime minister David Cameron—the same David Cameron who didn’t have to declare lobbying for Greensill Capital because ‘in-house’ lobbyists don’t have to register.
Following Greensill’s collapse in 2021, the House of Commons Public Administration Committee (PACAC) last year criticised the VAT loophole and called for monthly government transparency releases so we can see who is meeting whom. What’s happened since then? Not much.
As Spotlight on Corruption’s Sue Hawley told the Financial Times last week, the Global Counsel decision shows it is “long overdue for the government to undertake major lobbying transparency reform so that the public can know who is lobbying their elected representatives and why.” (Props to the FT for covering the story—and crediting our work. Spotlight, who made the complaint to ORCL, has also got an excellent blog on the case.)
Global Counsel was given the lightest of raps on the knuckles. ORCL offered the firm “advice on transparency regarding which legal entity is being represented in communications.” The regulator also updated its guidance following our investigation. But that’s hardly sufficient.
And the VAT loophole isn’t the only problem with Britain’s lobbying laws that our investigations into Global Counsel have uncovered.
“Ask Becca… what our priorities should be”
Britain’s lobbying rules don’t just allow undisclosed influence—they enable lobbyists to donate free staff to political parties.
In the run-up to the general election, Global Counsel seconded a financial services specialist to Labour’s shadow Treasury minister, Tulip Siddiq, for six months. This free labour was recorded as an in-kind donation worth £35,835 in the MPs’ register of interests.
Concerns about “conflicts of interest distorting the priorities of an incoming Labour government” were dismissed. But just months later, who did Treasury minister Siddiq turn to for advice on financial services reform? That’s right: Global Counsel.
The firm’s managing director, Becca Park, met Siddiq in November. A briefing prepared for Siddiq instructed her to “ask Becca… what our priorities should be” and to get her views on “how to drive the growth and competitiveness of the financial services sector,” according to documents we obtained under Freedom of Information legislation. (Attached at end of this piece.)
Before joining Global Counsel, both Park and the staffer seconded to Siddiq, Harry Palmer, worked for UK Finance, the industry body representing over 300 banks and financial firms. Siddiq later resigned after becoming embroiled in a corruption probe in Bangladesh.
Global Counsel refuses to list its clients. But public records show that since Labour took office in July, it has lobbied the government on behalf of at least eight financial services firms, including Standard Chartered, insurance giant Howden, and venture capitalists Sequoia. It has also worked for TikTok and Shein, the controversial Chinese fast fashion brand that wants to list in London - with Labour’s support.
Shortly after Siddiq’s meeting with Global Counsel, chancellor Rachel Reeves pledged in a major City of London speech to roll back regulations and make life easier for banks, money managers, and insurers. Her announcement was welcomed by JP Morgan—which just happens to be a client of Global Counsel.
With Mandelson now in Washington, questions have been raised about his interests in Global Counsel. In January, the Financial Times reported that Mandelson, who set up Global Counsel after leaving the New Labour government, is expected to sell his stake in the lobbying firm over time but has not set a deadline for fully divesting.
For most people, getting face time with a government minister is difficult. But as Transparency International’s Steve Goodrich told us, “those with the right contacts and favours to call in seem to have little issue.”
“It's highly problematic when those who can jump to the front of the queue may be representing clients with a particular policy to plug—potentially to the detriment of consumers and the wider public,” Goodrich said.
Because UK politics is so opaque, it’s hard to untangle who is really influencing government policy. That’s even more concerning when, like Global Counsel, they are donating to politicians and securing privileged access to ministers.
Goodrich is rightly worried that Britain could be sliding towards a US-style ‘pay-to-play’ model of politics.
“To date, the UK has largely avoided the crude 'pay-to-play' approach in the US, whereby lobbyists secure access and influence through campaign contributions,” he said. “If there's anything to learn from across the Atlantic, it's that this practice does untold damage to trust in democracy.”
We asked Global Counsel and the Treasury about whether it declared the interests of its clients at their meeting but have yet to receive a response.
Incidentally, we also asked for a copy of the “readout” of the meeting between Global Counsel and Siddiq. It was withheld because it relates to “live policy development.”
The Treasury insists the “public interest” lies in withholding this information.
So much for “transparency of lobbying.”
For a change, we also have some good news to report today. For the past few months we have been busy working behind the scenes with some amazing lawyers to fight for transparency to obtain public documents. And we have had some big wins.
Last week judges at the Information Tribunal ruled the government must publish the official advice given to former secretary of state Michael Gove before he greenlit a controversial “net zero” coal mine in Cumbria. The ruling came after we went to court to contest the refusal to release the information under FOI laws.
Labour has already kiboshed Whitehaven but the documents should shine new light on how the decision was made in the first place. We will be publishing them as soon as we have them.
Huge thanks to our brilliant legal team - Sahil Kher at Kingsley Napley and Peter Lockley at 11KBW - and to former Tory energy minister Chris Skidmore who gave witness evidence on our behalf. We have a lot more work like this in the pipeline, too.
The only way we will get transparency is by fighting for it!
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Where there’s a loophole there’s always politicians behind it 💩💩💩
That "could be" is doing some heavy lifting.