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LONDON – Rishi Sunak’s government is reconsidering its much-vaunted plans for a US-style foreign lobbying register after an outcry from companies worried it would scare away foreign investment.
The Foreign Influence Registration Scheme – contained in the National Security Bill currently making its way through the British Parliament – is intended to protect British politics from malign foreign influence.
It has long been demanded by lawmakers concerned about covert lobbying by hostile states such as Russia and China, and the Home Office has looked to similar schemes in the United States and Australia for inspiration.
But overseas companies operating in the UK have warned that the current draft of the scheme is far broader than international equivalents and say it risks deterring investment as well as preventing the day-to-day engagement of companies based in UK-friendly countries.
One senior business figure — who represents a major overseas company in a UK ally — described the scheme as it stands as one of the “most thought-out, stupidest, ill-considered pieces of legislation” they had ever seen.
A British government official confirmed to POLITICO that the registry is now being reconsidered.
“It is under review,” the official said. There was a lot of opposition and it was recorded.
The planned scheme, which the government hopes will shine a light on hostile forces trying to influence UK decision-makers, will require most foreign organisations, including businesses and charities, to publicly register every interaction they have with a UK policymaker or risk committing a criminal offense that carries a potential prison sentence.
All communications with ministers, officials, MPs and election candidates deemed to be “for the purpose of influencing UK public life” will need to be registered in advance, within 10 days of planning.
But while ministers have promised that the registration requirements will be “clear, simple and proportionate”, they are yet to reveal details of how the scheme will work. The companies say they were caught off guard when the plan was revealed just before the Christmas holidays.
“We’re not going to stop lobbying or stop doing business in the UK, but it’s potentially going to be a lot of red tape,” said this overseas business person.
“It’s going to lead to over-compliance,” they added, “and in some extreme cases, talking to some of my colleagues in other companies and business organizations, their attitude is that it’s going to be so complicated that they’re just not going to be bothered to work together.” with the government.”
‘Crackers’
Business groups have raised a number of specific concerns about the current scheme — originally promised by Boris Johnson’s government — and have pressed the UK Home Office for a rethink.
Officials from the Ministry of Business, Energy and Industrial Strategy have also passed on concerns to the Home Office.
Critics of the proposed register argue that it does not distinguish between hostile powers and countries with which Britain has strong relations, and some companies are calling on the Home Office to introduce a “white list” of countries whose companies will not have to register.
“It’s just crackers in a way that doesn’t differentiate between a company from Norway and a company from North Korea,” said the business person quoted above.
The government has also been warned that the way the new scheme interacts with the UK’s current lobbying laws — long criticized as inadequate by transparency campaigners — will mean a large proportion of domestic lobbyists will continue to be exempt from any registration requirement , even as those working for foreign companies are forced to do so.
Other proposals put to ministers in a bid to improve the plan include introducing US-style exemptions for commercial activities or ditching the so-called “primary tier” of the scheme – which requires broad registration – in favor of more targeted moves by the government to name a specific foreign power and company it wants to hone in on.
A Home Office spokesman said: “The Foreign Influence Registration Scheme is designed to strengthen the integrity of British democracy and protect the UK from state threats.”
They added: “Openness and transparency are key in a democracy and the government is clear that the scheme will highlight the nature and extent of foreign influence in the UK.”