Lobbying loophole: How big business influences Scottish ministers without scrutiny 8

Lobbying loophole: How big business influences Scottish ministers without scrutiny

Lobbying loophole: How big business influences Scottish ministers without scrutiny 9

Hundreds of meetings between Scottish ministers and multinationals, wealthy individuals and other influential organisations were left off the lobbying register in 2020 due to loopholes in legislation, The Ferret can reveal.

Analysis of Scottish Government ministers’ engagements in 2020 shows that meetings, potentially of key public interest, were not in the register, including those between ministers and companies awarded multi-million pound UK and Scottish contracts to supply the NHS in the run-up to Covid-19. 

As these meetings took place by phone they did not fall under regulated lobbying rules, an exemption which means they don’t need to appear on the lobbying register. Others in this category included meetings between ministers and the billionaire steel tycoon behind GFG Alliance, Sanjeev Gupta.

Research also showed Scottish Ministers had telephone meetings regularly with Scotland’s richest men – including billionaires Sir Ian Wood and Sir Tom Hunter – about a wide range of topics from business to Covid-19 and renewables, and in the case of Hunter, social renewal, education and transport. 

Under the Lobbying (Scotland) Act 2016, which came into force in 2018, all face-to-face lobbying is regulated. This means all such meetings with elected politicians and civil servants must be registered.

Details must be given about the subject and purpose of the meeting, what was discussed, the name of the person lobbying and the organisation. Face-to-face meetings anywhere count – at work, a conference, social events, zoom calls (with cameras on) or even outwith Scotland. Fines of up to £1,000 can be imposed. 

However lobbying via phone calls, emails and other communications such as WhatsApp are not included. Meetings do not need to be entered on the register if they were instigated by a minister – even where lobbying might take place – and meetings on constituency business are also exempt. 

The existence of these meetings is revealed in the diaries of ministers’ engagements which are published monthly. However these often contain only a couple of words to describe the subject and may not include the name of the individual, or of the company.

Lobbying organisations told The Ferret they were increasingly asked to meet ministers in telephone meetings, which meant even when they instigated the meeting it did not count as regulated lobbying. 

The Scottish Alliance for Lobbying Transparency (SALT) said the loopholes made “a mockery” of Scotland’s transparency ambitions. It meant the public was denied critical information about public interest meetings, the contents of which could not be interrogated, it added. 

Meetings found by The Ferret on ministers’ engagements, but not on the lobbying register, include those between ministers and high profile potential investors about BiFab, the company which had two steel fabrication yards in Fife and the Isle of Lewis. The firm collapsed last year after failing to secure any new contracts.

Ministers’ engagement documents also showed phone meetings between Fergus Ewing, former Cabinet Secretary for the Rural Economy, and billionaire steel magnate Sanjeev Gupta, chairman and finance director of troubled metals manufacturer, Liberty Steel. These were not in the register, and so no detail about their content was provided. 

Our research also found that engagements with big business, including energy companies and renewables chasing Scotland’s booming renewables sector, dominated the diaries of several ministers. 

No wrongdoing by any of the companies highlighted was found in The Ferret’s research. 

However, thousands of meetings were logged where lobbying could have taken place. Research found over 150 meetings in February 2020 with external, unelected individuals. In both June and November 2020 ministers had about 200 meetings with potential for lobbying but where it was not possible to tell what was discussed. 

NHS supply

A series of calls between then Minister for Trade, Investment and Innovation Ivan McKee and NHS suppliers were recorded in the ministerial diaries from 20 to 31 March 2020.

McKee had a call with engineering and defence giant Babcock just over two weeks before it was reported the company had been awarded a Cabinet Office contract to manufacture 10,000 ventilators. In the end the agreement was not upheld. 

At the time the Scottish Government highlighted manufacturing facilities in Kelso, Livingston and Glenrothes belonging to engineering firms Plexus and Raytheon UK would be involved in Babcock’s supply chain.

In the announcement at the time, McKee expressed his pride in the deal and said that Plexus and Raytheon UK “have been supported by Scottish Enterprise to facilitate their involvement in vital efforts to increase capacity for the NHS and the Scottish Government”. Scottish Enterprise were on hand “to provide any operational support they require”, he added. 

A spokesman for Babcock said the Scottish Government had requested the meeting adding: “Due to rapid changes in the requirement for ventilators, no formal order was placed by the UK Government before the programme was wound down.”

Three meetings were also held with Plexus in late March before a £12.8m UK Government contract for producing ventilators for the NHS from their Kelso facility was announced on 2 April.

McKee also spoke by phone to Vyaire Medical in late March. The company later won a contract for ventilators with NHS National Services Scotland – worth £526,675 – published on 3 June.

Other meetings were held between McKee and Draeger in March, which was awarded six UK contracts for ventilators in 2020 collectively worth £491m and PA Consulting, reportedly paid £1.5m by the UK Government to manage Covid-19 communications

Of the companies highlighted, only Babcock responded to requests for comment. 

Lobbying loophole: How big business influences Scottish ministers without scrutiny 10
Illustration by David Peter Kerr.

Meetings with business giants

The Ferret also looked at meetings in October and November 2020, the period following the collapse of BiFab’s Fife and Lewis fabrication yards

As well as a further meeting with owners and unions, Hyslop held a phone call on 22 October with former Rangers Football Club chairman and entrepreneur Sir David Murray about BiFab. A spokesman from Charlotte Street Partners, which represents Murray, said the meeting was at Hyslop’s request for advice and was not lobbying. 

The Scottish Government is currently considering the traffic impact of Murray’s proposed Edinburgh International Business Gateway – a development near the city’s airport.

It recently emerged the Scottish Government rejected a rescue deal made by the businessman when the Tata Steel Dalzell and Clydebridge steelworks was on the verge of collapse in late 2015.

At the time the Scottish Government held a series of meetings with Murray but instead struck a deal with Sanjeev Gupta’s Liberty Steel, a subsidiary of his GFG Alliance group. That business was plunged into crisis in March 2021 following the collapse of major investor Greensill capital.

Former Cabinet Secretary for Rural Economy and Tourism Fergus Ewing was the key contact for steel billionaire Gupta, holding regular meetings, including an un-minuted, private dinner with the controversial banker at the heart of the Conservative lobbying scandal, Lex Greensill, and Gupta back in 2017. 

Ministers engagements for 2020 list three phone meetings with Gupta and Ewing not on the lobbying register.

A GFG Alliance spokesperson said: “GFG is a significant employer and investor in the UK and as part of its normal course of doing business we engage with a range of stakeholders, including politicians, on a number of topics that relate to our businesses.  We have strong links with the Scottish and Welsh governments because of the plants and jobs in Scotland and Wales.”

Other examples of unlogged lobbying opportunities in November 2020 include a meeting held by minister Kate Forbes with UK Hospitality Scotland executive director Willie Macleod, who later welcomed a £104m government support package for tourism and hospitality businesses.

Both Forbes and fellow minister Fergus Ewing also met a number of pub owners that month. The lobbyist behind Wilson-Macleod Consulting also has many entries on the lobbying register, including one in the same month by phone with Ewing, but the video meeting with Forbes does not appear. 

Environmental concerns 

The Ferret also analysed six months of engagements for energy minister Paul Wheelhouse, who had dozens of meetings by phone and video with powerful energy companies including Red Rock Power, GE Renewables, EDF, Ryse Hydrogen, Brookfield Renewables, the Green Investment Group and Ovo. Several others were held with industry bodies including Oil and Gas UK.

The Scottish Government is committed to a “just transition” from fossil fuels to meet net zero carbon targets by 2045. In December, its vision for Scotland to become “a leading hydrogen nation” was published, and warmly welcomed by Oil and Gas UK, whose representatives met with the minister.

Over the six months, only one meeting with a campaign group was noted – Arran Ferry Action Group. Though he had no diary engagements with environmentalists the lobbying register does record one “fringe event” with Friends of the Earth and another with Greenpeace.

Meanwhile environmental campaigners such as Friends of the Earth have raised “deep concerns” about the large-scale plans to develop hydrogen. 

A Scottish Government spokesperson said that in the previous parliamentary term, the Energy Minister “naturally met predominantly with energy stakeholders, with the Environment Secretary and Natural Environment Minister meeting with many environmental stakeholders over the same period”.

In May it created new Net Zero Secretary and Just Transition minister roles which it said “reflect our ongoing, cross-government commitment to engaging with and working with every corner of society on our continuing journey to net zero”. 

Other ministers with regular private sector meetings include Ewing, who regularly spoke to leading fish farming producers. In November he spoke with Bakkafrost and Mowi but had no engagements with environmental groups calling for increased regulation.

Hamish Macdonell, strategic engagement director of the Scottish Salmon Producers Organisation, said ministers “appreciate having regular contact with Scotland’s salmon producers – which is unsurprising given the enormous value our producers generate for rural Scotland”.

From energy giants to fish farming companies, big business doesn’t seem to have much trouble getting a meeting with ministers.  Civil society groups, on the other hand, rarely feature in ministers’ diaries. This lack of transparency on lobbying undermines democracy.

Richard Dixon, Friends of the Earth Scotland

But Richard Dixon, chief executive of Friends of the Earth Scotland, said: “From energy giants to fish farming companies, big business doesn’t seem to have much trouble getting a meeting with ministers.  Civil society groups, on the other hand, rarely feature in ministers’ diaries. 

He said the loopholes in the register allowed big companies and lobbyists to “bend the ear of decision makers” without the details being reported. 

“This lack of transparency on lobbying undermines democracy.”

Susannah Fitzgerald, network coordinator at Transparency International UK, said the lobbying register “doesn’t yet live up to this promise”. 

She added: “The loopholes are glaring. Ensuring that decisions are made in the public interest, rather than for those with the deepest pockets, is the responsibility of all policymakers.”

Influential business leaders

The Ferret also found key individuals, with a variety of roles, had noteworthy access to ministers. These included Sandy Begbie, chief executive of Scottish Financial Enterprise (SFE), the representative body for Scotland’s financial services industry, who had 22 meetings with a wide range of ministers last year. at least 17 of which were telephone discussions.

As well as representing one of Scotland’s biggest industry sectors, Begbie was last year tasked with recommending how Scottish Government’s Youth Guarantee– which promises every young person in Scotland between the ages of 16 and 24 either a job, an apprenticeship, study or a volunteering placement – should work in practice.  Some of the meeting titles mentioned the youth guarantee, some did not or used his SFE job title.

A spokesperson for SFE said: “Developing and implementing the guarantee is in the clear interests of young people and the wider economy and is, by definition, not lobbying.

“Engagement we undertake on behalf of the financial services sector, and all those employed in it, in our role as a representative body is registered transparently in line with the legislation.”

Sir Tom Hunter, the billionaire businessman and philanthropist who in June urged the Scottish Government to “let business lead the Covid-19 recovery” had 13 meetings by phone with seven Scottish ministers between April and December last year.

Hunter manages his interests through his investment operation West Coast Capital, whose interests include property and analytics for the energy industry. The entrepreneur behind Sports Division also runs the Tom Hunter Foundation. Topics of the meetings took in a wide portfolio from education to social justice and the digital economy.

A spokesperson for Sir Tom Hunter commented: “These meetings were predominantly around The Hunter Foundation and our co-investments with government for the common good.”

Fellow billionaire Sir Ian Wood, who chairs Opportunity North East (ONE), a major private sector-led project working towards economic diversification and renewal in north east Scotland, met ministers seven times, mostly by phone. 

Wood, who is the fourth richest man in Scotland according to the Sunday Times Rich List, met three different ministers on behalf of ONE  to discuss a wide range of issues from green recovery to life sciences.

A spokesperson for ONE stressed it was a not-for-profit company working in partnership between private and public sectors.  

They added: “Maintaining positive and constructive relationships between industry and government will be particularly important as we embark upon economic recovery and the strong emergence of energy transition activities alongside oil and gas.” 

Likewise Benny Higgins, strategic adviser to the First Minister on the development of the Scottish National Investment Bank, and chair of the Scottish Government’s Advisory Group on Economic Recovery had 11 meetings with ministers including Sturgeon, Hyslop and Cunninghame last year, with titles including Covid-19, the economy and the environment. Again, all except two of these were over the phone.

I fully support transparency around engagement with government ministers and civil servants. I think it is also important that people with business and civic experience are encouraged to engage with decision-makers to help make a contribution to civic life.

Benny Higgins, strategic advisor and chair of Buccleuch Estates

Higgins is also the executive chairman of the Buccleuch Estates, chair of a number of financial firms such as Forster Chase and on the boards of a clutch of arts organisations including the National Galleries of Scotland.

He told The Ferret: “I fully support transparency around engagement with government ministers and civil servants. I think it is also important that people with business and civic experience are encouraged to engage with decision-makers to help make a contribution to civic life.”

The STUC also had regular access to numerous ministers, as well as a substantial record on the lobbying register. Dave Moxham, STUC deputy general secretary, said the trade union congress – which represents half a million members – was “proud” of both.

“Everyone knows what we want to do and so we go to government and civil servants to push for change,” he added. “We report on it at our meetings and conferences, publish papers and shout about it. We’re not trying to hide anything we are doing.

“But we don’t always know what is going on between government and the private sector and it’s clear that government listens to big business very closely.”

Former Labour MSP Neil Findlay, whose private members bill resulted in the current lobbying legislation, insisted transparency was key. “The reality is the Scottish Government took over my bill and watered it down leaving loophole after loophole to be exploited by powerful vested interests,” he added. 

If we really want to know what’s going on behind ministers’ closed doors, then all meetings with ministers or special advisers will have to be minuted, and those minutes should then be published automatically a few weeks later.

James Mackenzie, freelance consultant

Campaigner James Mackenzie, whose lobbying work includes that on the circular economy, rewilding and inshore fisheries, said the act was “a sideshow” in its current form.

He added: “If we really want to know what’s going on behind ministers’ closed doors, then all meetings with ministers or special advisers will have to be minuted, and those minutes should then be published automatically a few weeks later, with redactions only in line with the existing exemptions of freedom of information legislation.

A Scottish Government spokesperson said: “The Scottish Government is committed to transparency and all ministerial engagements are recorded and published, including meetings held via phone calls.
“It is the responsibility of those who lobby to consider whether any engagement they have with lobbyees should be registered.

“If there is any uncertainty concerning the need to register, definitive guidance should be sought directly from the Scottish Parliament lobbying register team.”

This investigation is part of our Who Runs Scotland series. We will be shedding a light on ownership and power in Scotland’s economy, environment and politics.

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Illustration by David Peter Kerr.

1 comment
  1. Would “charities” and 3rd sector organisations be considered as having an influence over policy? In particular I’m thinking about how the Drugs Deaths Task Force ignored the voices of Lived Experience and recommitted to the same organisations who already had a working partnership/funding with government.
    And more recently, how the call for Long Covid Clinics was ignored in favour of funding 3rd sector/orgs like CHSS and ALLIANCE who already have partnerships with government.

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