Dark Arts Dispatch: Corporate capture, utilisation and storage

Plus, a Labour donor wins big on government contracts, a would-be MP fails upwards and the smoking lobby returns

Corporate Capture and Storage: Earlier this month, the government unveiled a sizable commitment to Carbon Capture Utilisation and Storage (CCUS), announcing it would spend £22bn over 25 years on two carbon storage clusters, which it said would entice a further £8bn of private investment. 

That investment was confirmed two weeks later at the UK’s flagship investment summit, when the government revealed it had reached a commercial agreement with investors including Eni, BP and Equinor to “unlock £8bn of private investment to launch carbon capture clusters”. 

CCUS is controversial because it is largely untested at scale and critics say it is essentially a sop to the fossil fuel industry – kicking the can down the road on the seismic shift in energy policy needed to genuinely meet net-zero targets. This announcement will do little to quell those concerns given the three main investors are among the largest oil and gas companies in the world. 

This investment follows a major campaign of engagement from the industry, particularly the representative body, the Carbon Capture and Storage Association (CCSA). The organisation has had big stands at the past few Labour conferences, where senior MPs have posed for pictures before privately sitting down with the CCSA and its members for private roundtable meetings. The CCSA had a particularly strong presence at this year’s conference in Liverpool, hosting a roundtable of its own with three Labour MPs, and featuring on two other private roundtables alongside MPs including energy minister Michael Shanks and Bill Esterson, the new chair of the Energy Security and Net Zero Select Committee.

The CCSA’s current chair is Baroness Liddell, a former Labour secretary of state, and its top lobbyist is Joe Butler-Trewin, who has held a number of positions in the Labour Party, including as an organiser with Keir Starmer’s leadership campaign. It was also the very first organisation to contact Ed Miliband requesting a meeting after he was appointed energy security and net zero secretary. 

As an industry representative body, the CCSA’s only task is to advocate (see: lobby) for the interests of its members, who last year provided around two-thirds of its revenue through membership fees. Many of these members also have seats on the organisation’s board, including the three investors named by the government – Eni, BP and Equinor – plus fellow oil giants Shell and Total. 

By setting up and funding industry representative groups, companies such as fossil fuel firms create a kind of front, through which they can have their interests advocated and their points raised without their immediate involvement or connection always being obvious. This is similar to why lobbying firms and corporations so often work with opaquely funded think tanks – a policy paper recommending further cuts to hen house safety seems more trustworthy and impartial when it comes from the Institute of Poultry Defence Research than it does coming from Fox Limited.

Baringa BONUS: Incidentally, another of the CCSA’s members is Baringa, a consultancy that is involved in one of the carbon capture clusters in Teesside. Between last November and the election in July, Baringa spent more than £30,000 providing a staff member to the office of Darren Jones, now the chief secretary to the treasury.

The company has also held government contracts worth a total of £98m between 2019 and this year’s election – an average of £1.5m of work per month – according to Tussell data. Since Labour took office, though, things are on the up for the firm. Baringa was awarded £10m of public contracts in just three months, more than doubling its previous average monthly earnings from the government. The bulk of that new income comes from its largest ever government contract, awarded in August and worth just short of £8m, to provide “procurement support required for strategic IT projects”. 

There’s no suggestion that Baringa’s close working relationship with Labour has influenced the awarding of these contracts, but it isn’t a great look for a party when its donors increase their government contract work within weeks of it gaining power.  

Failing upwards: Move over Jonathan Ashworth, there’s a new poster boy in town for failing to get elected and nonetheless picking up a plum job. Joe Dancey – a lobbyist, former Peter Mandelson adviser and health secretary Wes Streeting’s fiancé – has been hired as Labour’s new executive director of policy and comms, after failing to become the MP for Stockton West in July. 

Ashworth’s fall may have been more spectacular, having been all set up for a cabinet job and instead having to settle for a directorship of the well-resourced Labour Together (plus a seemingly open invitation to every political news and discussion show going) but Dancey’s new role is nothing to be sniffed at. 

The job ad that appeared for the role over summer listed a salary of £104,984 – a good £20k more than the MP starting salary he missed out on. The job description also makes for an interesting read, considering Dancey’s career as a lobbyist at Endeavour Advisory, a firm that has no website and doesn’t publish a list of its clients. It states the successful applicant will work closely with government teams across all departments on policy and oversee the National Policy Forum, while the person specification includes the requirement of a “proven track record of working with conflicting responsibilities”. Those are sure to crop up from time to time in Starmer’s business-friendly operation.

Arden’t we all better than this?: News that former Labour minister Jim Murphy’s lobbying shop Arden Strategies organised a roundtable discussion in the Treasury hasn’t gone down well in the wider public affairs world. Writing on LinkedIn (where else?) one lobbying boss stuck the boot in… 

“I don’t know a single professional lobbyist who isn’t enraged by this,” wrote Gabe Winn, CEO and founder of Blakeney, “and I’d underline ‘professional’ because lobbying scandals are always the result of former ministers or advisers thinking the rules don’t apply to them.” 

“Professional lobbyists have argued for years for better regulation of the work we do. We believe that, done properly, it’s a vital part of the democratic process. But reform has still not happened. This isn’t how this industry should work. This isn’t ok.”

The point about former ministers seemingly believing they’re above the rules is an incisive one. Murphy is one of only two former Labour ministers who run their own lobbying companies. The other is Mandelson, who co-founded Global Counsel, a firm under investigation by the lobbying watchdog following a scoop from openDemocracy’s former editor-in-chief, Peter Geoghegan’s outlet, Democracy For Sale, that the firm was representing the state-backed Qatar Free Zones Authority (QFZA) without declaring it. The same watchdog investigated and cleared Arden just a few months ago. 

Waterbored: The BBC reports that water bills are expected to rise by more than initially thought over the next five years, to “fund higher costs and more investment”. This is a boon for the industry, which has been lobbying hard against regulator Ofwat’s efforts to avoid price hikes for customers.

In simple terms, the water industry is in a dire state. Bills are at record highs and our waterways are brimming with sewage. The firms say they’ve been unable to invest in infrastructure and repairs because Ofwat has sought to protect billpayers, and that this has in turn led to further issues with leaks and spills. 

The small matters of huge remuneration packages for executives and dividend payouts for shareholders are neither here nor there, seemingly. 

Either way, the firms’ investors want to generate more profits and are essentially holding out on providing the cash for further investment until the government tells Ofwat to lay off and stop blocking higher bills for consumers. 

Press reports suggest the industry has looked at the ‘plight’ of Thames Water – which risks collapsing under the weight of its huge debt and has seen two of its main investors write off their multi-billion pound stakes as a result – and decided that the UK’s privatised water market is not the easy, riskless profit-maker they once thought. Though water companies appear to blame regulation for that mess, Dark Arts readers may remember the prevailing view is actually that Thames Water’s downfall was largely due to its mismanagement by ‘the vampire kangaroo’ Macquarie – an asset manager that exited its stake in the firm in 2017.  

Last month, environment secretary Steve Reed – who is understood to see water as the most important aspect of his brief – sat down for a roundtable discussion with water industry investors. The meeting came a week after Reed had introduced the Water (Special Measures) Bill, heralded with tough-talk videos highlighting the aspects of the bill that allow for harsh penalties for water company bosses.

Did Reed’s rhetoric in the room match up to his public stance? It seems unlikely. Multiple reports from insiders suggest investors thought the meeting was very positive – ie, they were likely to get what they want. Dark Arts filed a Freedom of Information request for details of the meeting, including who was there and a readout of what was discussed. This is a standard request, which the government generally complies at least partially, but in this case it was flat out refused. 

In a press release, growth minister Lord Livermore accurately summed up the government’s priorities when he said that “private investment is at the core of how we grow our economy”, and that “creating a stable and investable water sector is long overdue”.

Also quoted in the release was chief executive of the Global Infrastructure Investor Association (GIIA), Jon Phillips. Phillips has been sounding the alarm publicly, and no doubt privately, about investors’ hesitancy to pile cash into the water industry because the returns aren’t up to par. He recently told Bloomberg that “multiple international investors have directly said to me they would not look at opportunities in the UK in the regulated utility space”. 

Who might these international investors be? The GIIA is a representative body for a significant proportion of the world’s biggest asset managers and other infrastructure investors. Their members include Blackstone, KKR and, of course, Macquarie. 

Lord Alli latest: The Lords standards commissioner has concluded an investigation into Lord Alli, Labour’s high profile donor, over the peer’s failure to declare a number of interests properly. As openDemocracy reported, Lord Alli failed to declare his directorship of a tax-haven based company, MAC (BVI), only adding it to his entry in the register after we contacted him last month. despite becoming a director in April 2023. 

Based on publicly available data, we reported that Alli had been a director of MAC (BVI) since April 2023, meaning the registration was around 18 months late, but in the course of the investigation Alli confirmed he’d actually been appointed in November 2022. 

The commissioner found Lord Alli had in fact breached the rules by declaring the interest late – even later than it had first appeared. But they also found there was no case to answer on another arguably more important element of the complaint, that Lord Alli was wrong to belatedly register the interest as ‘non-financial’. This is despite the Labour peer holding incentive shares in the firm that will entitle him to a one-off fee equal to £25,000 for every month he has been a director, in the event that the company makes an acquisition. Which means the standards commissioner seems to have rejected the suggestion that likely being entitled to collect a payout of £600k (and rising every month!) at some point in the future qualifies as a ‘financial interest’.   

Smoke on the Water: Earlier this week, an innocuous-sounding organisation called Forest invited MPs, spads and other SW1 denizens for a 2.5 hour booze cruise along the Thames, featuring live music and speeches – the latter, organisers stressed, would be brief. 

Forest, or ‘Freedom Organisation for the Right to Enjoy Smoking Tobacco’, is a fascinating organisation that was set up in 1979 and fronted for some time by a former fighter pilot, Sir Christopher Foxley-Norris. It was later chaired by Baron Harris of High Cross, the longest-serving director of the Institute of Economic Affairs, a free market think tank, who was elevated to the Lords by Margaret Thatcher. 

Forest receives most of its funding from UK-based tobacco companies, but disputes claims it is just a mouthpiece for Big Tobacco, instead claiming to represent “the consumer, not the tobacco industry”. 

This particular lobbying event has some pedigree; Forest ran an annual booze cruise like this one every year between 2011 and 2017, but packed it in mostly as a result of increased costs. Now, with a whole new host of MPs and staffers to court – plus a generational smoking ban and a rumoured ban on smoking in, er, smoking areas to be blocked – the event returned. 

It probably is a coincidence that an actual boatload of MPs and staffers took to the Thames courtesy of the smoking lobby on Wednesday evening, and by Friday morning several papers were reporting that the government is about to drop or soften the outdoor smoking ban. But it’s an illustrative coincidence. 

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