Article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.
After failing to ‘clean up politics’ as promised, top Starmer advisers have set up advisory firms that experts warn can exploit Lobbying Act loopholes
Soon after Morgan McSweeney left Downing Street this February in the wake of the Peter Mandelson scandal, he told the BBC he was “committing to being out of politics” for the next few years. By August however, the chief architect of Keir Starmer’s ill-fated tenure as Prime Minister had established his own firm, McSweeney Advisory, which will offer strategic advice on politics.
McSweeney isn’t the only Starmerite alumni to set up their own ‘one-man-band’ advisory firms, openDemocracy can reveal.
After pledging to reform lobbying and clean-up money in politics, the so-called Starmer-project has spawned a mini-cottage industry of consultants and advisors, that includes Baroness Martin, a former top adviser to Starmer’s chancellor Rachel Reeves and Starmer’s former communications’ director Ben Nunn.
The irony is not lost on Labour veterans.
“They waged a dirty tricks campaign to take control of the party, then wasted a massive opportunity. Meanwhile we’re still here, in government, fighting for working people and trying to clean up the mess they left, while they swan off to coin it in the City,” as one staffer said, adding that these advisers are now being rewarded “not for failure, but for doing what their corporate backers wanted the whole time”.
Transparency activists and anti-corruption activists, meanwhile, describe the current lobbying rules as “pitiful”, with past research estimating that the current framework captures less than 1% of the actual lobbying which takes place in Westminster.
Value Added Exemptions
Advisory firms often fall outside the narrow legislative definition of ‘consultant lobbying’. Rather than contacting ministers directly on behalf of their clients (which could trigger transparency legislation), these firms skirt the rules by offering paid-for-advice to their clients on how to interact with the government, or how to pursue their policy goals based on the deep knowledge the advisors have acquired over years spent in party politics and in government.
Campaigners have warned that the current lobbying rules also mean that small firms of this type are well-suited to make use of a loophole which means that, even if they do carry out work which meets the narrow definition of consultant lobbying, they still may never have to register or declare their clients.
This loophole in the Lobbying Act, known as the so-called ‘VAT exemption’, means a company or individual is not required to register as a consultant lobbyist – no matter how much actual lobbying they do which would otherwise meet the statutory definition – if they are not a VAT registered business.
In the past, this has meant that MPs have been let off for breaching lobbying rules, because they are not VAT registered businesses, or that major lobbying firms, like the now-defunct Global Counsel, have not been required to register clients that have been billed through their overseas subsidiaries.
MPs and campaigners have also highlighted how this exemption means relatively small businesses whose turnover is less than the VAT threshold of £90,000 are not required to register. In practice this means that an individual lobbyist who sets up a company to serve one or two large clients could still carry out a significant amount of paid lobbying without ever needing to register.
Such flaws in the Lobbying Act are so self-evident that even industry representative bodies for the lobbying industry itself are in favour of a stricter, more comprehensive system to regulate the industry.
Senior campaign lead at Spotlight on Corruption Kamila Kingstone told openDemocracy: “The fact that even powerful and influential consultant lobbyists can get away with not putting their name on the lobbying register highlights the pitiful state of the UK’s lobbying rules.
“Experts have repeatedly pointed out that the VAT exemption is a massive loophole, but successive governments have repeatedly ignored it.”
A McSweet Deal
Senior advisers that leave government to take up private sector roles must get sign-off from the Civil Service Commission, which assesses potential conflicts of interest and imposes conditions on their employment – though in practice the commission has no formal powers to investigate or enforce these rules.
When openDemocracy reached out to McSweeney, he said his firm offers “strategic advice and analysis on political developments, geopolitics, democratic security and related issues”.
“My work involves helping organisations understand political and geopolitical developments, not seeking to influence government decisions on their behalf,” he said.
Rachel Reeves’ top adviser throughout her time as shadow chancellor and in government has also set up shop as a corporate adviser, establishing Katie Martin Advisory earlier this year, despite sitting in the House of Lords as a serving peer.
The now-ennobled Baroness Martin of Brockley had as much influence over and insight into Starmerism’s economic platform as any other adviser in government. She also led on business engagement, developing relationships with City firms and other major Treasury stakeholders.
In addition, Baroness Martin has taken up a senior advisory role with Peel Hunt, an investment bank she met with several times in office, and will support the bank to develop relationships with ministers, while sitting as a peer in the House of Lords.
According to correspondence published by the Civil Service Commission, Baroness Martin “will advise Peel Hunt’s leadership on brand and positioning to expand their presence in the UK” but will also advise on “how to strengthen relationships with officials, ministers and regional leaders in government”. Baroness Martin told the commission she “would not facilitate these relationships personally” and confirmed her role “will not involve contact with, or lobbying of, government”.
Baroness Martin met with Peel Hunt formally twice in government and acknowledged she had likely met representatives of the bank a further “two or three times at events”. She was also involved in conversations about London IPOs, a policy area she acknowledged Peel Hunt “had an interest in”. Her new job includes supporting the bank’s “emerging work with the London Stock Exchange to encourage more companies to launch on the UK stock market”.
Alongside her advisory work Baroness Martin has also joined the board of ThinkLabour, the organisation formerly known as Labour Together; the Commission approved the unpaid role on 8 October. She sits on the board alongside veteran finance lobbyist Mike Craven, founder of public affairs agency Lexington.
Beyond McSweeney and Baroness Martin, few figures have been as close to the Starmer project for as long as Ben Nunn. He was Starmer’s communications director in opposition, then Reeves’. He left the party to work for Lexington for a time, then returned in November 2025 to replace Baroness Martin as Reeves’ chief of staff, staying until the project’s collapse in July.
He is now sole director of Arlington Road Consultants, a political advisory seemingly named after the “Arlington Road” group that plotted to oust Jeremy Corbyn and install Starmer as Labour leader.
Earlier this month, the Mail on Sunday reported that Nunn and Reeves had met two City firms days before the Budget, to discuss “the political advice the pair could offer”. Sources told the paper that both chief executives had met Reeves several times while she was Chancellor. The Conservative chairman, Kevin Hollinrake, has asked the independent adviser on ministerial standards to investigate.
In response to the Mandelson scandal, Starmer’s No10 commissioned the Ethics and Integrity Commission (EIC) to produce the latest in a long series of independent reviews into lobbying reform which reported back earlier this year.
Starmer’s administration did not act on the EIC’s recommendations, though they came not long before he was ousted by Andy Burnham, whose administration is yet to commit to any reform.
Kingstone and other campaigners have urged the government to look seriously at the recommendations put forward by the EIC, including to broaden out the statutory definition of consultant lobbying to capture a much wider range of activity.
She said: “The government needs to accept the Ethics and Integrity Commission’s recommendations to require all lobbyists to have to register on a comprehensive transparency portal – whatever their tax arrangements – so that the public can see who is meeting the government, who they are representing, and what they are discussing”
McSweeney told openDemocracy: “I do not provide lobbying services, nor do I intend to.”
“I therefore have no plans to register as a consultant lobbyist, as that is not the business I conduct. The suggestion that my company is well-placed to exploit a loophole in lobbying legislation is misleading. I have no intention of using any such loophole.”
openDemocracy contacted Baroness Martin and Ben Nunn with questions about the nature of their work, but had received no response at time of publication.
Article by Ethan Shone republished from OpenDemocracy under a Creative Commons Attribution-NonCommercial 4.0 International licence.
