The call made by Mark Pack, amongst others, for suggestions for media reform is both timely and important. For the majority of the country, the media represents the most important source of information we access on a daily basis. As a result, it cannot help but shape our opinions and inform our democratic decision-making; it is a key part of our national discourse and must be seen as such.
And yet the phone hacking scandal has demonstrated that we cannot rely wholly on journalists to hold themselves and their colleagues to account for their own ethical transgressions. A press that delighted in the failings of others took years to reveal its own misdeeds. While the actions of the Guardian reporter Nick Davies are to be commended in helping to bring the story to light, it’s not clear that the Guardian itself wasn’t also complicit on some level. The system of self-regulation of the media previously in place has proved inadequate; when the guardians of the system are themselves a concentration of power, we cannot trust them to guard themselves.
This is troubling, because the phone hacking scandal followed two earlier crises that demonstrated the necessity of checks upon our most powerful institutions. The leaking of the receipts from MPs’ expense returns demonstrated that the informal practice of using the expenses system as a ‘top-up’ to parliamentarians’ wages was endemic, and had been carried out without public knowledge. When Parliament did release the expense receipts under the Freedom of Information Act, much of the information was blacked out. It is not clear that the widespread nature of the ‘top-up’ system would be public knowledge without the earlier leak.
During the banking crisis, inter-bank lending suddenly froze up, essentially shutting down the mechanisms by which our financial system sustained itself. This took place because banks were unable to verify the contents of the complex derivatives held on the books of their competitors, and were hence unable to identify which of their competitors was a ‘safe bet’ to supply credit to.
We can characterise these three crises as crises of transparency; with better information, the public would have been able to judge earlier which newspapers were engaged in unethical practices and which politicians were gaming the system – and change their purchasing and voting choices accordingly. With better information, banks would have been able to judge who had the dodgiest derivatives on their books, and perhaps have unlocked credit flows earlier.
To strengthen our democracy, we need to strengthen the ability of everyone to access information. To this end, I propose the expansion of the Freedom of Information Act into a General Right of Information, covering not just the public sector but any private organisation that relies on the existence of the State for its legal status. While the privacy of individuals must be protected, it’s not clear that the privacy of a limited-liability corporation should have the same protection. We already expect companies to be registered with Companies House and to provide their accounts – this right would merely expand the information required to that commensurate with the existing FOI Act. It is a suitable response to the socialisation of risk that a limited-liability corporation represents; society should have access to all available information about its risks.
This requirement – to hand over documentation and correspondence on particular subjects as required by any member of the public – could have helped to provide advance notice of the phone hacking scandal within News Corp and to have helped provide banks with increased certainty about the liabilities upon the books of their fellows. This requirement must be twinned with the removal of many of the exemptions included within the Act for the public sector – nothing our elected officials do as part of their duties, and no-one they make deals with, should be outside the public ken.
Naturally, this new right must be proportionate to the size of the risk involved – small companies may not be able to bear the costs of repeated information requests. However, we accept that the cost involved in providing information is small enough for the public sector to bear, so one would anticipate that the more productive private sector should be able to bear it with grace. Regardless, when the medium by which we access information about the powerful is itself too powerful, it is only through unmediated access to that information that we can hold them to account.
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10 Comments
Great idea.
Asymmetry of information is one of the reasons blamed for imperfect markets, I believe. Is there an even greater win here, that failed markets like train fare and energy prices may be able to behave better if more information was available?
Absolutely fantastic!
Great news for all our foreign competitors. They can get information about UK firms pricing, business plans etc.
and I’m sure those nice people at Goldman Sachs would love to have all the details of what derivatives etc UK banks are holding. Think of the money they could make with a detailed knowledge of their competitors holdings.
@Louise: I would expect that consumers would be highly interested in the decision-making process of the companies from which they buy their services.
@Simon: Britain has made its fortune as a trading nation, as being a great place to do business. Would you rather do business in a place in which you can guarantee the guy/gal on the other side of the table isn’t holding anything back, or where they could be concealing serious shortcomings in their business plan?
I think you’re focusing on the cut-throat competition aspect of capitalism while overlooking the fact that the main benefit of capitalism comes from the individuals making decisions on the ground – not just consumers. Businessmen need transparency too – why do you think due diligence exists?
FOI, as it stands, gives a time limit of 20 days to respond to a request. In investment banking, as in many businesses, knowing what your competitor was up to 20 days ago is rather pointless.
I like the thrust of the idea, although I’d like more emphasis placed on a duty to publish in the first place, rather than wait for people to come asking. Like Simon, hw, I don’t agree that this shld also fall on businesses (unless it’s about work they conduct on behalf of or with the Government) as despite the potentially damaging effect of having to release business intelligence, which Simon mentions, it would also allow foreign competitors to lodge myriad questions, costing our businesses lots to answer them. I think you’d just see lots of businesses moving elsewhere, and that doesn’t do us any good.
That said, I like the idea.
@Stuart: I’m not sure how one can avoid it falling on businesses if one wants to also apply to the media, which are businesses. I would point out that the existing FOI act contains provisions for vexatious requests, which repeated requests would fall under.
I understand the desire to broaden the FOI remit to gain better access to information. It is a worthy intention, but as always the devil is in the detail.
The FOI Act, (rightly) intended that it be used as a ‘forensic’ tool to access information that is in the public good. The Act, (also rightly), does not allow a reciprocal question of, Why do you want that information?
This extremely useful public tool can also cause public concern, as in the case of a tobacco company, (rightly and legally) requesting detailed methodology and data from a public body that has done research into smoking by children and young adults. We may suspect their motives for wanting that information, but we cannot deny their request.
This idea of an ‘expanded’ FOI is a body of work that needs a great deal of study, if we’re not to fall into a trap of unintended consequences. I think the present FOI requesting structure works fairly well and often with a bit of lateral thinking you can use it to good effect. As an example.
Suppose you believe that the ‘Deluxe Double Glazing’ firm uses (UPVc), that is potentially toxic because (you believe) it uses ‘Chemical X’ as a hardening component in its manufacture?
It’s reasonable to ask a ‘forensic’ question, but of course the way the question is phrased is all important.
Asking. – Does your company or suppliers to your company use ‘Chemical X’ in the manufacture of materials for your products, and have you checked for toxicity in your final product?
Is far different to, – What are the chemical constituents of the UPVc that you use in the manufacture of your products?
The second question is far easier to ‘bat away’, from public disclosure.
Also, if you feel the company is giving you the run-around, you can try perhaps a different method. If you are aware that a particular Local Authority uses products from the Deluxe Double Glazing Company, it would be reasonable to ask that L.A.
Have you checked that the UPVc windows and associated products sourced from outside companies are safe, non toxic and do not use ‘Chemical X’ in their manufacture?
You can be confident that if they hadn’t checked before, their Health and Safety people would not reply before doing their own forensic research.
If you look hard enough, you will find that most private companies (of any kind), will have some connection with a public agency or body at some level. And that is the likely source of your forensic investigation. I suppose my point is that sometimes using what we have in a smarter way, can be as good as inventing a new tool.
@DavidB: I would agree that reinventing the wheel is not necessary in some cases – my concern is that on many matters, especially financial ones, the current FOI Act is limited in terms of what it can access on commercial confidentiality grounds. Much of public procurement, for example, is somewhat opaque: http://www.ogc.gov.uk/documents/OGC_FOI_and_Civil_Procurement_guidance.pdf. It’s not clear that the chemical composition of the windows in your example would not fall under the ‘trade secret’ exemption, for example.
Thanks Adam. You make a fair point.
I suppose what I’m saying is that the act of ‘delving’ for information, will inevitably face some resistance. But by approaching from a different angle, you can get to the same point.
If (say) Company A is a newspaper, that you suspect of some ‘dodgy dealings’, it might be better to pursue disclosure through Company B, who might be Marks & Spencer, Tesco, Asda etc. who put a lot of advertising revenue into the coffers of the newspaper.
It would be very easy to construct a question to (say) Tesco, which falls short of accusing the newspaper, yet creates sufficient doubts and risk to their reputation, were they not to check the facts.
The newspaper may be too big for an individual to take on, but they are not too big for Tesco to take on and investigate when their brand name is potentially at risk, by association.
The above is just one more example. What I‘m suggesting is that ALL companies and organizations have ‘a soft spot’. Find the soft spot, and use that as the entry point, for accessing disclosure of information.
Thanks Adam, for the interesting discussion on information disclosure.
I just add one final observation.
Sometimes the ‘soft spot’ of an organization appears as a Black Swan.
Who could have possibly imagined that the ‘soft spot’ of News International and Rupert Murdoch was a teenage girl’s mobile phone?