The Liberal Democrats’ vision of a John Lewis economy, and an end to ‘crony capitalism’, as articulated by Nick Clegg, is welcome. So why, then, is this approach not yet embedded in Government?
Rewards for failure, a failure to listen to small business over big property interests, short-termism and the perpetuation of a failed business model are at the heart of the Government’s pubs policy, according to MPs of all parties in a Commons debate on 12 January.
The answer, it seems, lies in the habitual practices of the Department of Business, Innovation and Skills (BIS) and its notorious revolving door to its pet trade interest groups. So when the British Beer & Pub Association (BBPA), the in-house lobbyists of the pubcos that have done more than anyone to close community pubs, come calling, the condemnation of the outside world seems not to matter. BIS ducked the solution supported by the cross-party BIS Select Committee and a huge range of business and consumer groups including the Federation of Small Business.
Because, as Parliament heard on Thursday, the BBPA were not only invited into BIS regularly to discuss the Government’s response to the fourth critical Select Committee report on the pubco business; they were allowed to draft most of the reply. We know this thanks to an extensive Freedom of Information investigation by the All-Party Parliamentary Save the Pub Group, Chaired by Greg Mulholland MP.
That FoI request lists dozens upon dozens of communications with the BBPA between the Select Committee reporting and the Goverment responding. In the same period, none of the bodies supporting the Select Committee – CAMRA, the Federation of Small Businesses and a host of others – were not given the courtesy of a meeting to discuss the response at all. One rule for one side of the debate, one for the other. That hardly tallies with evidence-based and independent decision-making. It rather smacks of the ‘crony capitalism’ Nick wants to bring to an end.
The ensuing headlines saw a Liberal Democrat Minister, Ed Davey, accused of ‘collusion’ by his own colleagues, as well as coming under repeated fire from Tory and Labour MPs. This in a debate on a motion backing the Select Committee in its anger at the irresponsible capitalism of the pubcos and at the failure of successive Governments to act on a series of concerns about the treatment of tenant lessees. The Select Committee called for a statutory code of practice which includes a free-of-tie option with an open market rent review and an independent adjudicator.
Instead of this, and without evidence that an alternative would deliver the reform needed, Ed turned to the BBPA, an organisation discredited by the Select Committee and others, for a solution of self-regulation. The BBPA presented a report to BIS on 21 October and the Government response is basically the provisions contained therein. Significant sections of the Government response are similar to the BBPA report, much of it word for word – typos included, showing that BIS officials simply cut and pasted the BBPA’s view and presented it as the Department’s. Then the BBPA were working with the BIS press office on their press release as early as October 31, three weeks ahead of the Government response and just five weeks after the Select Committee report was published.
I have some sympathy with our Minister’s room for manoeuvre, in terms of the availability of Parliamentary time and in terms of the ‘one in, one out’ limit on regulation. This and the need for proper consultation may have meant some delay to Government taking the action the Select Committee called for – regulation even Conservative MPs want. However, I have no sympathy with the enhanced access to the very trade body slammed by four successive Select Committee reports, and letting it alone draft the Government’s own response. No wonder the Save the Pub Group and others have questioned the appropriateness of the relationship between BIS mandarins and the pubcos’ lobbyists.
A number of myths have been peddled by BIS and the BBPA; most significantly that the debate centred around competition and customer choice, on which a contentious OFT report had let the pubcos off the hook. In fact, the Select Committee’s inquiry and recommendations were not about this but the maltreatment of pubco tenants. Critically, the FoI reveals that the BBPA lied to the Government about the extent of trade support for its deal from other bodies in particular.
Ironically, of course, if Nick Clegg’s model of increased worker participation were extended to the pub trade, pubco tenants would without doubt lobby to radically change the broken business model. Instead, Nick’s description of the ‘economy driven by immensely powerful vested interests…. that politicians have abjectly failed to stand up to’ seems alive and well in BIS. In a similar way, Whitehall has faced criticism for years about the ‘revolving door’ between its top civil servants (not just BIS but the MoD) and the senior jobs in the arms industry that they are able to walk into and vice-versa.
The underlying reform highlighted by this sorry episode, therefore, concerns BIS itself. Our Ministers have done an effective job of encouraging long-termism and developing manufacturing and other industries long shut out of the corridors of power (not enough, in my view, to green industries – but that’s another subject for another day). Now it’s time to clean the stables. Get the builders in and take out the revolving door for the likes of BAe and the BBPA. Sack civil servants who let their cronies and lobbyists dictate government policy; and listen to the small entrepreneur as much as big business. Much of this was highlighted by Vince himself in opposition: now it’s time to change the culture of Government.
A shorter version of this article will appear on Lib Dem Voice.
For Greg Mulholland MP’s take on what happened, see: http://gregmulholland.org/en/article/2012/548932/foi-reveals-that-the-government-response-on-pubcos-is-actually-the-work-of-the-pubcos-representative-organisation-the-bbpa
