Lobbyists battle for key changes

Many PR battles are fought ahead of the budget as lobbyists try to influence the finance minister, writes Kyran Fitzgerald.

The contents of the Finance Minister Michael Noonan’s budget and of the subsequent Finance Act can be shaped by subtle efforts at lobbying. Or at least, special interests will attempt to influence key areas. Picture: Julien Behal/PA Wire

The journalist Martin Kettle recently recalled a particularly notorious leak in the run up to a budget.

In 1947, Britain’s chancellor of the exchequer, Hugh Dalton, ran into a leading lobby journalist, John Carvel, while on his way to the House of commons. Dalton gave a grateful Mr Carvel some important clues about an upcoming big event : “No more on tobacco ; a penny on beer ; something on dogs and (football) pools, but not on horses ; increase in purchase tax.. profits tax doubled.”

Carvel had his scoop. The news reached the streets before the budget was presented and within two days, the hapless Dalton had resigned. His boss, prime minister Clem Attlee was astonished : “Talked to the Press ? Why on earth would he want to talk to the Press ?”

You can bet you last bottom dollar that the canny Michael Noonan would not be caught out in this fashion, though times have changed since finance ministers and chancellors went into deepest purdah before appearing before the cameras with the contents of their briefcase, and with perhaps a spouse or child in tow. Taoiseach Enda Kenny has already released a few cats from Mr Noonan’s bag. The public is being prepared and kites are being flown.

Budget day is a big event in the public mind. Six years of austerity have seen to that. Saturday’s huge march against water charges serves as a timely reminder of just what is at stake. But the contents of the budget and of the subsequent Finance Act can also be shaped by subtle efforts at lobbying, the bending of powerful ears, by experts, economists, public affairs specialists, lawyers, accountants, and by some of the most experienced organisations in the country.

The influence game is a year round affair. However, for many, it is at budget time that organisations and individuals get to display their clout. Ministers of finance like to surprise, no more so than ‘champagne’ Charlie McCreevy, whose ‘decentralisation’ proposals, unveiled in December 2003, stunned many in the Dáil chamber and beyond.

But most budget day initiatives are the product of a lengthy process of representation and consultation.

In late September, the IFA hosted a briefing day for TDs and senators. Around 100 attended. A politician ignores the leading farming body in the country at their peril. The process kicked off early in the summer when the IFA’s 29 strong Farm business committee, drawn from each county and every key sector, gathered to draw up a draft budget submission. This went to the Executive Council for approval — the formal IFA budget submission emerged.

This year, an agri taxation review is underway, the first in a decade. IFA sources consider this to be the equivalent of two budgets coming together. The outcome of the review should be known tomorrow. The IFA is keen to secure funds for a development scheme aimed at low income members, in livestock, in particular. It is seeking tax changes aimed at promoting inter-generational farm transfers, and at tacking the issue of income volatility by allowing greater carry over of losses incurred in low income years. A major victory secured in the past was that of 90% agriculture relief, limiting the tax burden applying to transfers of businesses. The IFA will be hoping to secure a similar result, this time round.

Small groups and organisations rely more on outside PR firms and public affairs specialists when they are not engaging in direct action.

Public affairs specialist Paul Allen acted for the micro brewers association when it secured important excise duty concessions. Allen’s firm got an economist to conduct a study and when then finance minister, Brian Cowen, agreed to the changes, they came up with a new limited edition brew, ‘Brian’s Brew’, also known as ‘Biffo’s Beer.’

Allen has engaged in lobbying campaigns on behalf of the Alzheimer’s Society, the Wine Development Board and the motor industry, among others. “The budget campaign begins in April-May,” he says.

Building relationships with officials is vital. Department of Finance officials require forensic detail as when the wine trade were seeking an equivalence in excuse duty with the makers of lagers. “Some cases do not make economic sense — then, we step away.”

Allen is wary of ‘megaphone diplomacy’ which can get peoples’ backs up. In his view, the union movement are “particularly effective lobbyists” while the Restaurants Association did very well in the run up to Mr Noonan’s decision, in 2011, to cut Vat on hospitality serves from 12.5% to 9%.

But there were losers as well as winners on that occasion. That pro jobs move was funded by a levy on private sector savings that reached 0.75% of the total value of the funds in 2014. There is resentment at a measure which targeted vulnerable private savers and exempted public servants and politicians. The Irish Association of Pensions Funds is campaigning strongly for its removal in Budget 2015. Within the industry there is some resentment at the life companies. Senior executives from Irish Life and Eagle Star made a strong last minute, case to the minister for the retention of tax relief on contributions, thereby protecting their companies, but at the expense of a hit to existing savers, some say.

Jackie Gallagher, co-founder of PR firm, Q4, worked as a journalist before serving as an advisor to former Taoiseach Bertie Ahern. In his view, a lot of what is in a budget tends to be ‘very programmatic’. “In these times, there is not much room for changes.” He accepts that before the bust, “a lot of the big lobbying happened around tax based schemes — that’s not there any more.”

In reality, however, the big battalions — multinationals, especially — continue to carry clout with decision makers, here. The influence exerted over Irish governments by Apple is a case in point. The major corporations operate through top legal and accounting firms.

Google spent $25m (€19.7m) during a probe by the US Fair Trade Commission into its accounting practices, according to the website, Politico. Google’s arguments, in turn, were opposed by Microsoft, while 14 top IT companies formed the Internet Association to push their case on Capitol Hill with the congressmen and senators.

In 2010, the US Supreme Court in a majority 5-4 ruling struck down legislation prohibiting corporations, including so called non-profits like ‘PACs from spending heavily on electronic communications. The decision has been criticised as favouring those who can spend their way to victory in elections.

Irish people in the public affairs game believe when there are detailed arguments to be made in support of sophisticated policy initiatives that can work to the benefit of the wider public, ‘lobbyists’ play a constructive role in the process.

Trade unionists and other groups can bring thousands out on to the street in support of various populist causes. Such action is also a key part of decision making in a parliamentary system, but not every decision can be put to a street plebiscite.

That said, following 2008, the public affairs community have had to work harder than ever before to justify their existence. In an age of instant communication and public anger, wheezes aimed at delivering windfall benefits to a small, but well connected group, do not seem that clever, after all.


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