London Influence: CBI survives (for now) — Dark money deep dive — Unlocking trade

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A weekly newsletter on campaigning, lobbying and political influence in the U.K.

By JOHN JOHNSTON

Hello and welcome to London Influence, preparing for summer party season. Tips, gossip, state secrets and coffee requests @johnjohnstonmi or [email protected] | View in your browser

— The CBI survives — but financial pressure and fresh competition present new challenges.

— Influence takes a deep dive in the murky waters of dark money.

— Meet the group with a plan to unlock post-Brexit trade — if only it can get the government to listen.

CBI SURVIVES: The CBI's victory in a crunch confidence vote this week means a brief sigh of relief for the embattled lobby group … but there are still plenty of questions about what's next.

Scores on the doors: A motion asking members to approve the CBI's overhaul in the wake of a string of misconduct allegations passed with the backing of 93 per cent of the 371 members who took part. The CBI's new director general Rain Newton-Smith welcomed the result, saying it handed the group a "really strong mandate" for its reform plans.

But: The votes aren't weighted, so it's tricky to work out the true scale of support. Each member organization — whether that's an individual firm or a huge membership group — had one vote. And the 371 figure also represents just over half of the 700 member organizations the CBI claims to still represent.

Rocky road: While the vote gives the group room to breathe, it's still in a precarious financial situation, with reports last week it's bracing to cut a third of its staff to help balance the books.

Even then: The immediate response from Whitehall has been lukewarm, with a business department spokesperson saying the vote was a "matter for their CBI and their internal processes" and that they will "continue to engage with businesses on a case-by-case basis and business groups where appropriate." Speaking on his flight to D.C., Rishi Sunak wasn't exactly jumping for joy. Asked whether ministers would now reengage with the group, the PM said "matters at the CBI are for the CBI and for its members to work through."

Responding: Some observers reckon there's a long road ahead for the group now as it tries to restore its credibility. Anne Francke, chief exec of the Chartered Management Institute — which focuses on good management practice — said both business and government will now be looking for "clear evidence" the group is committed to the changes it's promised.

She added: "Committees and consultants don't transform organizations; leaders and managers do, through what they say and what they do each and every day."

Challengers ahead: Adding to those pressures came news this week that the British Chambers of Commerce is branching out. It's already attracted big firms — including Heathrow, BP, and Drax — to its new Business Council.

Different tracks: The group said it was all part of a "long-term" project that started last year — before the CBI scandal broke. A BCC insider pushed back at suggestions the project is an attempt to put them in direct competition with the CBI.

The official line: Shevaun Haviland, BCC director general, said the group had been "talking to the nation's largest corporates and it has become clear to us that they are looking for a different kind of representation."

Uh oh: The BCC's move has received mixed reviews from some public affairs pros. One senior industry figure representing a large overseas firm told Influence they were "reserving judgement" on the plans. "We are sceptical about whether the BCC is capable of filing any gap left the by the CBI," they added. "Whether intentional or not, their timing looks opportunistic and crass, which is not going down well with a lot of people in the industry."

No good time: The BCC source insisted their move is necessary to get the voice of industry heard in Whitehall during the crucial manifesto planning period. They argued that eyebrows would have been raised whenever they announced it given the CBI scandal is continuing to dominate.

DARK MONEY DEEP DIVE: As political donation dramas continue to hit the headlines, Influence decided to dive headfirst into the weird and wonderful world of unincorporated associations.

Too much tea: You can read all the gory details here — so feel free to bookmark it for your lunch break or the commute home — and we’ll take you through some of the key bits now.

What you need to know: A whopping £14m has gone into the political system from unincorporated associations (UAs) in the last five years — an amount close to the Tories’ entire 2019 election spend.

WTF are they then? UAs sit in a legal grey zone. They’re an organizational structure that can be established by any two people working toward a common goal that isn't making profits.

But but but: They don't need to be registered with any official entity, file accounts, use business banking or even have a name. It's possible you, dear reader, are part of a UA without even knowing it!

Commonly: They are used by community groups or local sports teams to organize themselves, create a membership structure and manage their activities without the hassle of becoming a registered company or charity.

Best case: They are also permissible donors to political parties. In some cases that makes sense because it allows small campaign groups and local party associations to donate to causes they back.

However: The lack of regulation means UAs have become a common loophole for opaque donor groups to pump cash into party accounts without pesky journalists or the public knowing who is actually behind the donations.

Transparency: One big problem is the lack of information UAs have to provide. Often the only public information provided about them is a generic-sounding name and a basic post code.

Case in point: Influence looked at the curious case of the Portcullis Club.

Postcode lottery: The group has given £80,000 to ex-Tory chairman Jake Berry's Conservative association. It's had two registered addresses over the time it's been financially backing him.

On his doorstep: The first links it to a flat in London, where one of Berry's then-parliamentary staffers had also registered their own company. It then shifted to a Georgian manor house which is linked via Companies House records to a firm in which Berry is now a director.

Usual caveats: Berry did not respond to our questions about how it raised the funds, but neither the Tory MP or the group has broken any rules — and the relationship is actually not particularly uncommon for UAs.

Murky: Speaking to Influence, the Electoral Reform Society said UAs represent a "dangerous loophole" that allow donors to funnel cash into the political system without scrutiny.

Gaping hole: "At a time when concerns about who is attempting to influence our politics grow, that such a gaping hole remains in our rules on political donations, is deeply worrying," they said. And they’re not the only ones with concerns. Read on for more.

CORRUPTION CONUNDRUM: A year on since John Penrose stepped down as the PM's anti-corruption champion, Westminster is still waiting to meet his replacement.

Not like it's busy: It's the longest period that we’ve gone without an ACC since the post was created in 2006. Asked at DPMQs when a new ACC would be appointed, Oliver Dowden said it would happen "very shortly" — though he said something similar back in February.

Out of office: And according to Transparency International U.K., there has been at least 20 breaches of the parliamentary code since Penrose stepped down … leaving a hefty in-tray for his sucessor to chew over.

HANCOCK-ED IT UP: Matt Hancock was forced to give a mea culpa speech to fellow MPs after getting rapped on the knuckles by the Commons standards committee.

Once more unto the breach: The marsupial member-munching member was found to have committed a "minor breach" of the rules after he sent an "unsolicited" letter to the standards commissioner in support of Tory MP Steve Brine amid a lobbying probe.

Funny that: Hancock will also be required to attend a "briefing on his obligations" — a fancy phrase for a lecture on why lobbying the lobbying watchdog over lobbying is not a wise move.

RED SUE: Civil service legend Sue Gray could take up her new role as Keir Starmer's chief of staff this fall according to reports from The Times and the BBC.

Remember: Gray left the civil service in March, and advisory group ACOBA will have the final say on the length of time she must wait until taking up the political post.

But: The outlets believe she could be given just a six month waiting period — significantly shorter than that demanded by the government and Tory MPs who remain furious about the appointment. ACOBA is remaining tight-lipped on the gig, but keep your eyes peeled for advice on its website. It's what Influence does for fun anyway.

REGULATOR REBRAND: The Video Standards Council, the group responsible for putting PEGI age labels on video games — and thereby triggering "but mum all my friends are allowed it" rows across the country — rebranded and is now the Games Rating Authority.

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TRADING UP: A sluggish economy and low growth has left business crying out for change — and one group thinks it might have the solution to unlock trade. But first it has to persuade Westminster.

Study: The cross-party UK Trade & Business Commission unveiled a major report last week based on the testimony of hundreds of businesses. Influence caught up with Tom Bruffato, director of policy, to discuss next steps.

Comprehensive: The plan — consisting of 114 detailed proposals — was created after taking testimony from 234 witness in over 200 organizations. The group claims it's the largest post-Brexit trade consultation to date.

Key point: One of the biggest asks from the group is that the government ditch its "dogmatic divergence" on EU standards and regulations, and instead adopt a general policy of alignment.

Certainty: Bruffato says closer alignment, while still carving out niches where sensible, was overwhelmingly supported by business who see it as fundamental to giving British firms certainty and making the U.K. an attractive destination for investors.

Tough crowd: Convincing Tory MPs to adopt that recommendation is going to be a hard sell. Bruffato admits events like the recent right-wing National Conservative Conference show there are still deep divisions within the governing party. Kemi Badenoch — who slowed Britain's big regulatory divergence drive recently — got a bit of a kicking from top Brexiteers this week too.

But but but: Recent events have offered a glimmer of hope, with Bruffato pointing towards the "watering down" of Britain's position to land the Windsor Framework and Badenoch's decision to step back from the cliff edge over that Retained EU Law Bill sunset deadline.

Right path: "I do think there is a general recognition that this is the right path, but it's the detail that is lacking," he said. But Bruffato adds: "The question is — how far can this government actually go on this?"

Key point two: The group is pitching a new independent Board of Trade, placed on a statutory footing similar to the ONS. The new board would continue to report to Badenoch, but would have its own staff and governance, giving it "real teeth" when it comes to scrutinizing trade deals.

Handcuffed: Dismissing suggestions this would dilute ministerial power, Bruffato argues the move would instead put the U.K. on the same track as many other countries.

Unwise: "It's often forgotten, but post-Brexit trade deals are going to be high on the agenda for quite some time, and before Brexit lots of trade negotiations were actually done in the European Union," he said. "Any government would be unwise to claim they don't need help professionalising trade."

On that point: My colleague Graham Lanktree published an astonishing yarn last week showing how the Aussies deployed a case of wine, a handheld printer, and a hamper of Boris-branded goodies to secure beneficial trade terms from Downing Street.

Pressure point: While the commission has plans to continue its own advocacy work, their big hope is that supportive businesses will adopt the blueprint as part of their own lobbying efforts as the parties put the final touches on manifestos.

Next steps: The report is set to be the focal point of Trade Unlocked — a big conference planned for later this month to give business and politicians a chance to chew over the plans.

RSVP’d: Both Labour's shadow trade and foreign secretaries are planning to attend, with Bruffato saying the opposition mood music gives them hope closer alignment with EU rules could form a major plank of its economic offering.

Late arrivals: The group's still waiting to see if any ministers will accept an invite, but Bruffato says it would send a "really bad message" if the government refuses to come and listen to business concerns.

Brussels lobbying veteran Tzveta Dryanovska is moving from H+K Brussels to join the firm's London office working on tech, entertainment and commerce.

Former Labour policy chief Jade Azim is the lastest party insider to be snapped up by WPI Strategy. PR Week has more on the latest hires.

Jonathan Lima-Matthews is taking up a new post as head of public affairs at UK Finance.

Former Westminster political reporter George Ryan is joining Public First as an associate director.

The Centre for Long-Term Resilience think-tank snapped up Cassidy Nelson as head of biosecurity policy.

Toby Flower is starting as an account manager at CMS Strategic with a focus on defense, aerospace and security.

Recently launched Ridgeway Strategies (profiled in Influence) hired ex-Downing Street adviser Andrew Wong.

Sally Herd is starting as an associate director at APCO Worldwide.

Arden Strategies announced Shelley McNicol is joining as their new chief operating officer.

Juliette Gerstein started a new gig as a senior public affairs manager at the British Private Equity & Venture Capital Association.

Macarena Chiclana is joining Teneo as an associate consultant after a two-year stint at Portland.

Jobs jobs jobs: Hanover‘s on the hunt for a senior account director to work on financial services … Cadent needs an external affairs manager covering the West Midlands … Dogs Trust are looking for senior public affairs officer … the Road Haulage Association wants a public affairs manager … DeHavilland‘s after a policy consultant on their infrastructure team … Last chance to apply to be the Social Market Foundation's new director … And Labour‘s teamed up with the Patchwork Foundation to offer a paid summer internship across several teams at Labour HQ. The scheme is looking to hire someone from an ethnic minority or lower socio-economic background.

Thanks: To editor Matt Honeycombe-Foster for letting that second mention slide. And to the production team for sliding this into your DMs.

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