Democratic Audit Shorts: Big business still has too much influence over public policy

Taken from Section 2.6.4 of the 2012 Democratic Audit Report – Business influence on public policy’

A recent Democratic Audit study by David Beetham argues that corporate and financial interests have, since the 1980s, inserted themselves increasingly into government and its decision-making processes, over which they now exercise substantial influence (Beetham, 2011). As well as exercising indirect power on governments, Beetham identifies two broad categories of direct business influence over public policy, as follows:

 1. The buying of influence: via donations to political parties and the funding of think tanks, through lobbying activities, the provision of corporate hospitality and financial support for individual parliamentarians and parliamentary groups.

 2. The operation of a variety of revolving doors: through which individuals move, in both directions, between senior positions in government and senior roles in big business, and government-corporate ties are strengthened via membership of regulatory, advisory and partnership bodies.

The scope for corporate interests to buy political influence through donations to political parties and the financing of election campaigns is highlighted in detail elsewhere in the Audit (see Sections 2.2.4 and 2.6.3). However, it is vital to underline that influence can also be bought through others means, such as the funding of think tanks and lobbying organisations. Financing think tanks, for instance, offers a potential means of influencing the policy agenda via organisations which purport to be impartial and non-partisan, but tend, in reality, to have clear ideological leanings and close links with a particular political party. Donating money to a think tank can also provide a means of bypassing the legal regulations placed on direct financial contributions to political parties, particularly those relating to disclosure, thus preserving the anonymity of the donor.

Lobbying organisations, meanwhile, have become increasingly professionalised and sophisticated, offering not only access to decision-makers, but also design and implementation of public relations strategies aimed to secure particular policy outcomes. As a consequence, lobbying has become an increasingly costly activity, further advantaging well-resourced business interests over other groups (for further detail on attempts to regulate lobbying, see Section 2.3.3). The imbalance of access to ministers enjoyed by different types of organised interests was made clear by data analysis published by the Guardian in October 2011 on meetings between coalition ministers and individuals and groups outside government (Guardian, 2011). These data showed that that between May 2010 and March 2011 there had been 1,537 meetings between ministers and representatives of corporate interests; 1,409 with trade groups, think-tanks and other interest groups; 833 with charities; and 130 with trades unions. These data do not include ‘private’ meetings, which it can be assumed showed at least as great a bias.

In its more narrow sense, the ‘revolving door’ is understood as the interchange of personnel, as salaried employees or consultants, between public and private sectors. The ‘revolving out’ of government ministers and senior civil servants to the private sector is perhaps the one area of government-corporate linkage for which there is sufficient evidence available to assess its scale and significance. The nature of this evidence, which exists largely because of the regulations governing such movements of personnel, in particular the Business Appointment Rules, is considered in more detail below. However, it is also important to note two further means through which corporate influence can be directed as a result of the interchange between governmental and business interests. These are, first, through membership of advisory bodies, whereby leading private sector representatives are recruited to official taskforces and committees. Illustrating the kind of tilt towards particular interests that can take place, Beetham (2011. p.17) has shown that ‘[a]ll three reviews following the 2007 [financial] crash […] into UK banking governance, British offshore financial centres and the UK international financial services respectively, were chaired by bankers, the last with membership drawn entirely from the City of London’. Second, business interests frequently form joint partnerships with government. These partnerships may be designed either to obtain private sector access to public sector business; to help obtain access to foreign markets for UK businesses; or to promote UK businesses abroad. Such entities seem to blur the line between public and private sectors, to the advantage of the latter.

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