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Financial incentives

A typical lobbying tactic of large companies around the world is to give policymakers a financial interest in helping them. In many countries, these incentives are direct and overt. For example, in a controversial campaign to reverse the Lithuanian government’s ban on alcohol advertising in 2011, four of the six parties that opposed the ban (and so promoted industry interests) received financial support from alcohol retailers and producers. One Lithuanian MP allegedly received a €16,000 for proposing legislative amendments, including the cancellation of the advertising ban.[1]

In the UK, such outright bribery has not been uncovered, and campaign donations are smaller and less significant than in the US and other countries. However, misdemeanours do occur: for example, in 2006 Nick Clegg – later to be Liberal Democrat leader and Deputy Prime Minister – received hundreds of pounds in monthly payments direct to his personal bank account from Ian Wright, a senior executive at Diageo. According to Clegg, the money had been used to pay for a member of staff and not his own expenditure, even though these salaries are covered by parliamentary expenses.[2]

More common in the UK is the use of employment opportunities as an incentive – many policymakers take jobs with alcohol companies after they leave public service, giving them a motivation to help these firms while in government. This phenomenon is often referred to as the ‘revolving door’, with politicians and officials moving smoothly between jobs in government and industry. For example, South Africa’s former Finance Minister, Trevor Manuel, sits on the board of SABMiller. In the UK, David Frost, then a senior civil servant in the UK Department of Business, Innovation and Skills agreed to join the Scotch Whisky Association while his responsibilities continued to include representing the UK Government on trade issues related to alcohol (including MUP, over which the SWA has legally challenged the Scottish Government, as mentioned previously).[3] Frost’s predecessor at the SWA,[4] and the Current Chief Executives of the WSTA[5] and Portman Group,[6] are all also former civil servants.

It has been suggested that such appointments provide the alcohol industry with inside knowledge, experience and contacts in the political process. Moreover, they create potential conflicts of interest if public servants are making decisions that affect potential future employers. For example, implementing regulations that would harm the profits of an alcohol producer may reduce the likelihood of getting a job with them. There is no mandatory regulation of such conflicts in the UK, with the Advisory Committee on Business Appointments merely advising public servants on ‘cooling-off periods’, and whether or not to accept new positions.[7] In 2012, the UK Parliament’s Public Administration Select Committee objected that this arrangement is not fit for purpose, and called for a statutory body to oversee ‘interchange’ of staff between the public and private sector.[8]

In some cases, policymakers take up roles with alcohol companies while still in public service. For example, in 2014, John Manzoni was appointed Chief Executive of the UK Civil Service despite being paid £100,000 as a non-executive director for SABMiller. Manzoni later agreed to leave his post in summer 2015 and to waive his fees in the interim. Lord Davies of Abersoch, a Labour peer, remains Senior Independent Director of Diageo. Lord Bilimoria of Chelsea founded Corba beer before joining the House of Lords, and remains its Chairman.[9]

 

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[1] Paukste, E. et al (2014), Overturn of the proposed alcohol advertising ban in Lithuania, Addiction 109, p. 716.

[2] Winnett, R. & Swaine, J. (2010), General Election 2010: Nick Clegg, the Lib Dem donors and payments into his private bank account, The Telegraph (21 April). [Accessed 21 March 2016].

[3] Miller, D. & Harkins, C. (2013), Revolving doors and alcohol policy: a cautionary tale, ALICE RAP Blog [online]. [Accessed 21 March 2016].

[4] Hewitt, G. (2014), Independence essay: Important issues not addressed, Scotsman (10 June 2014) [online]. [Accessed 21 March 2016].

[5] Gerrard, N. (2012), Wine & Spirit Trade Association (WSTA) appoints new chief executive, The Caterer (20 March) [online]. [Accessed 21 March 2016]

[6] Portman Group, Henry Ashworth [online]. [Accessed 21 March 2016].

[7] Miller & Harkins (2013), op. cit.

[8] House of Commons Public Administration Select Committee (2012), Business Appointment Rules Third Report of Session 2012-13.

[9] Lord Bilimoria of Chelsea [website], Biography. [Accessed 21 March 2016].