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It’s what politicians will do unbribed that’s the bigger scandal

My Times column here.

I have a confession to make. Last week I held a
meeting with representatives of three organisations and offered to
raise an issue for them in the House of Lords. They claimed they
were charities seeking a smidgin of funding to push forward
promising research on a squirrel-pox vaccine, which might help to
save the red squirrel from extinction in this country.

Now I begin to wonder if these three charming people were
actually disguised investigative reporters who were trying to add
my name to that of my three fellow peers who were splashed over the
front page of The Sunday Times. Or perhaps they were
from a front for the Chinese People’s Liberation Army. (Tony Blair
apparently spoke at an event hosted by a front for the latter.) I
never checked their credentials or frisked them for hidden

Come to think of it, I even solicited payment from them. That is
to say, I told them I had given away my attractive green necktie
with red squirrels on it, emblem of the Red Squirrel Survival
Trust. Bold as brass, in broad daylight, they took the hint and
handed over another. It’s in my wardrobe, still in its

I am not mocking the seriousness of the recent scandal in the
Lords. But alleged bribery of politicians is among the least of the
problems of lobbying. To paraphrase Humbert Wolfe (“You cannot hope
to bribe or twist,/ Thank God! The British journalist./ But, seeing
what the man will do/ unbribed, there’s no occasion to”) it’s what
politicians will do unbribed that’s the bigger scandal.

All the time, entirely legal distortion of legislation occurs to
favour concentrated groups of producers at the expense of the wider
community of consumers. Adam Smith’s dictum that “the interest of
the producer ought to be attended to, only so far as it may be
necessary for promoting that of the consumer” is rarely observed.
This problem is something that an official register of lobbyists
will probably entrench rather than dissolve.

One of representative democracy’s chief features is that it
concentrates rewards and scatters costs. If I succeed in persuading
the Government to divert a few tens of thousands of pounds into
squirrel-pox vaccine research, the cost to any individual taxpayer
will be tiny, while the reward to vaccine researchers, and with
luck squirrels, will be significant; I may even be a minor hero in
the squirrel world for a few days. But if we all do this, soon
we’ve plucked the goose entirely. Almost by definition a lobbyist
is in this game of concentrating the gain and spreading the

Since joining the House of Lords I have been struck by how,
among other things, many of our debates are about special
interests, often very deserving ones. Mesothelioma patients (and
their less deserving lawyers) got a lot of attention last month. My
inbox fills with polite and well-meant pleas on behalf of excellent
causes. But only very rarely does it contain a plea on behalf of
those who have to pay.

A startling example appears in David Stockman’s angry new
bookThe Great Deformation — a free-market,
anti-crony-capitalist polemic of the kind we need over here. He
describes how Fannie Mae and Freddie Mac, the two
government-sponsored enterprises at the heart of the sub-prime
housing debacle, spent a sickening $175 million between 1998 and
2008 lobbying to protect their privileged government guarantee,
which enabled them to borrow cheaply.

Mandated by successive administrations to encourage lending to
the poor, Fannie and Freddie created huge demand for sub-prime
mortgages, of which they ended up holding $2 trillion worth.
Potential reforms, including those by Mr Stockman himself when he
was President Reagan’s budget director, were beaten back by a lobby
of house builders, estate agents, lawyers and charities, all
benefiting from the bubble. Nobody lobbied on behalf of the person
who was guaranteeing the cheap lending: the taxpayer.

In Westminster the interests of spenders are represented by
phalanxes of ministers, MPs, peers, lobbyists and journalists. The
interest of the taxpayers is represented by a couple of lonely
Treasury ministers and a few small voices such as the Taxpayers’
Alliance: it is an unequal battle.

Nowhere is this clearer than in the current Energy Bill. Look at
some of lobbyists who were pressing the Government this week to put
a 2030 carbon target in the Energy Bill. They wanted “certainty” —
wouldn’t we all? — that their renewable trough will long be filled
at the expense of the taxpayer and bill-payer: Renewable UK, the
Carbon Capture and Storage Association, the Solar Trade
Association, the Renewable Energy Association (plus some charities,
churches and unions that should know better). Crony capitalism in

A perfect example of concentrated gain and diffuse pain is the
issue of “green jobs”. Raising the cost of energy by subsidising
renewable energy kills far more non-green jobs than it creates
green ones, but they go unremarked. It is no accident that the fake
identity chosen by the journalists that enticed Lord Cunningham and
Lord Mackenzie into conversations was that of a solar-energy firm.
This is an industry that depends entirely on subsidies and is
political to the roots of its hair.

Meanwhile, the European Commission in Brussels has taken legal
lobbying to new depths. It subsidises the lobbyists it likes so
they can lobby it. This is known as sock-puppetry. Friends of the
Earth, for example, which is really just a big law firm these days,
has received an astonishing £6 million since 1997 from

So when Friends of the Earth took legal action against the
British Government last year over cuts in subsidies to (you guessed
it) solar power, you — the taxpayer — were paying the bills of
lawyers on both sides of the case. Research by the Taxpayers’
Alliance last year found that the EU spent a grotesque £75 million
subsidising environmentalist pressure groups between 1997 and

The continuing delay in Britain’s shale gas revolution is
largely Friends of the Earth’s doing. It was they who persuaded the
European Commission — which subsidises them, remember — to insist
that water left a mile underground in rocks after fracking must be
treated as waste. They did this deliberately so that Britain’s
Environment Agency would have to delay issuing a permit or face
judicial review. As a result, cheaper, home-grown energy is denied
to ordinary Britons, while lawyers and bureaucrats get extra

By Matt Ridley | Tagged:  rational-optimist  the-times