RELATIONS between MPs and lobbyists face their biggest overhaul in more than a decade after an investigation by The Times revealed how business pays for influence.

Parliament’s sleaze watchdog said yesterday that it was determined to limit the activities of lobbyists who are giving financial support to supposedly independent groups of MPs that investigate controversial policies in which they have a commercial interest. The watchdog held an inquiry into the activities of MPs and lobbyists after The Times discovered that representatives of the nuclear, pharmaceutical and drinks industries were funding the activities of politicians and even writing policy reports.

The Parliamentary Commissioner for Standards called on all lobbyists yesterday to reveal their client lists and urged MPs to act with caution when dealing with those who did not. One in five refuses to sign up to the voluntary code to say who clients are.

Sir Philip Mawer, the commissioner, has moved to close a loophole that allowed lobbyists to withhold the names of relevant clients. He also said that charities who helped MPs should reveal the name of any company that gave them more than £5,000, a move that would have wider repercussions in the charity sector.

The recommendations, which could be implemented early next year, would represent the most significant rule change since the “cash-for-questions” affair that cost the careers of several Tory MPs.

The Times investigation focused on the role of all-party groups — supposedly independent groups of MPs with a common interest in a subject — and revealed that six had failed to disclose the source of their financial and secretarial support. The rules state: “Where a consultancy provides benefits (eg, secretarial services) at the request of the client, you must state the name both of the consultancy and the client.”

The Committee on Standards and Privileges upheld a complaint against three of the groups: Intellectual Property, Patient Safety and Pharmacy. The consultancy firm, Luther Pendragon, which provided secretarial support, has now listed the groups’ backers on the Parliament website.

The Mobile Communications, Export and Fire Safety and Rescue groups escaped censure because the lobbyists involved — Doug Smith and Nicholas Lansman from Political Intelligence — argued that they were operating independently of their clients, some of whose interests overlap with the work of these allparty groups.

However, Sir Philip has proposed a change in the rules to prevent this defence in future. He said: “It would, in my view, be inappropriate if the requirement to identify clients of a consultancy with an interest in a particular group assisted by the consultancy could be intentionally circumvented simply by the device of funding the assistance out of the general fee income of the firm, rather than by a specific grant from, or at the specific request of, a named client.”

The committee also found that the Mobile Communications group failed to register two areas of financial support, worth £6,500, from BT and O2.

The Times investigation also discovered that several industries were writing policy reports in the name of all-party groups. Sir Philip has recommended that all press releases, reports and other publications provide the name of the author, the organisation that provided secretarial support and any relevant clients or sponsors.

The report found no evidence that all-party groups were being “suborned by outside interests”, although it added that they were “not neutral surveyors of a particular area of public policy, but conduits . . . for pressure to change public policy”.

Sir Philip said that MPs must find a better way to distinguish all-party groups from select committees. He suggested that the Speaker write to chairmen of all-party groups to make sure they did not give the impression that they had “institutional status”.

The Committee on Standards and Privileges has asked relevant parties to submit opinions before the summer recess.

THE PRESSURE GROUPS

What are all-party groups? Enable MPs and peers with shared interests to discuss issues and act as a pressure group

How many are there? They have mushroomed from 148 in 1986 to 442 this year

How official are they? Formally recognised in 1985. Registration is compulsory for any group that includes MPs from more than one party and has at least one officer from the Commons

How important are they? The Parliamentary Commissioner said: “Those with a special interest in a particular issue have the potential to gain considerably from the access to an all-party group”

How do they differ from select committees? They are not an official part of the parliamentary process, have no limit on the number of members and have no formal powers to request the presence of ministers

Times Recommends

• Milk: do we need a dairy godmother?
• DIY: the women doing it for themselves
• First double portrait of Princes unveiled