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Sector: Government Relations and Public Affairs

Grayling Insights into the Digital Markets Act

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What can users and businesses expect from the EU’s bold new legislation that seeks to tackle Big Tech’s dominance in the digital market? Our factsheet provides all the information you need to understand the Digital Markets Act, and how it stands to change the digital world as we know it.

To learn more about the Digital Markets Act, please contact emma.omahony@grayling.com.

All change in Westminster? 

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While Westminster-watchers have been glued to the high drama playing out in Downing Street and the House of Commons over the past 48 hours, businesses and campaign groups up and down the country are seeking to understand what the change of Prime Minister will mean in practice. Here’s our take on what happens next. 

Leadership process
PM Boris Johnson has today announced that he will step down as soon as a new leader is in post. The Conservative Party will swing into action with a rapid leadership contest. The timetable for this will be published early next week, but at present, we are expecting that the party’s 1922 Committee will move to start and end the parliamentary element of the leadership process, where MPs nominate candidates, before summer recess in three weeks’ time.

Reports suggest that the threshold for candidates, currently set as a proposer, seconder and ten supporters from the Conservative parliamentary party, will be raised in order to prevent a broad field of candidates, as MPs will need to whittle down the nominees to a final two to be presented to the membership. In this stage, members of the Conservative Party will be asked to choose between these final two candidates, and this process is likely to take 4-6 weeks. We should expect a new Conservative leader to be in place ahead of Party Conference in Birmingham in early October. 

Bills and legislation
The almost unprecedented raft of ministerial resignations since 6pm on Tuesday have effectively paralysed Government business in the House of Commons in particular. On Thursday, three Bill Committees were cancelled owing to a lack of Ministers. Twenty-three Bills are currently making their way through both Houses of Parliament, from the Product Safety and Telecommunications Infrastructure Bill, which is close to finishing its passage through the Lords before Royal Assent, to the Energy Bill [HL], a crucial piece of legislation to bolster Britain’s energy security, which had just been introduced on Wednesday. 

The Government’s legislative programme, pre-leadership crisis, was already acknowledged to be ambitious and was already behind schedule, so the further delays caused this week are likely to lead to a re-phasing of legislation once Parliament returns post-Summer Recess, as a new Prime Minister moves to get Government back on course. This could go much further, with Bills being dropped and new legislation introduced if a new Prime Minister wants to signal a change in direction from the Johnson premiership. 

Runners and riders
At this stage, a small number of candidates have definitively thrown their hat into the ring – Attorney-General Suella Braverman announced live on ITV’s Peston on Wednesday night that she would be standing for the Conservative Party leadership, while arch-Brexiteer and chair of Conservative Way Forward Steve Baker said on Thursday morning that he is likely to put himself forward. Other likely runners and riders include Nadhim Zahawi, Chancellor of the Exchequer since Tuesday night, who is understood to have been working with external advisers to build a campaign plan over the past few months, as well as his predecessors Sajid Javid and Rishi Sunak. Both Foreign Secretary Liz Truss and International Trade Minister Penny Mordaunt rank highly with Conservative members and have long been rumoured to be interested in standing for the top job, but remaining in their posts during the slew of resignations may hurt their chances of progressing through the parliamentary shortlisting stage of the leadership process.  

Defence Secretary Ben Wallace currently tops ConservativeHome’s membership survey of favoured leaders, but has kept his distance from the ongoing political parlour games. Health and Social Care Committee Chair Jeremy Hunt, who lost the last leadership election to Boris Johnson, is clearly positioning himself for another campaign. 

But what about Labour?
At the same time, the main opposition party may be about to face its own leadership crisis. Both Leader of the Opposition Keir Starmer and Deputy Leader Angela Rayner have promised to resign if fined by Durham police for breaking Covid rules. In this situation, Labour’s National Executive Committee is mandated to order a ballot of party members, and in consultation with the Shadow Cabinet may choose to appoint a current Shadow Cabinet member to serve as party leader in the interim. 

What this means for businesses
In the short term, our advice to businesses and campaign groups is to let the high politics play out. MPs and peers from both main parties will be preoccupied with the internal politics, and on how their parties are presenting themselves to voters over the coming weeks. Any immediate requests to parliamentarians should be time-sensitive and absolutely critical. 

Over the leadership contest, there will be plenty of opportunities to offer visits and photo opportunities to candidates who will be keen to tour the country and demonstrate their appeal. Building and strengthening relationships with key parliamentary allies of the leadership contenders will also help to position organisations effectively with a new administration. 

In the meantime, civil servants will be keeping the day-to-day operations of Government going. At a time when Ministers and their special advisers may change roles very quickly, building strong working relationships with relevant civil servants should help to provide continuity and certainty for business. 

This year’s party conferences will be crucial in helping to understand how both the Conservative and Labour parties will position themselves for the next election, and we expect to see a significant rise in attendance for both conferences. 

If you would like to discuss what the changes in Government mean for your organisation, please get in touch with Alan Boyd-Hall or Christine Quigley from our UK Public Affairs team.

France ends its EU Presidency on a high note despite tough political context

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Our Brussels and Paris offices assess the results from the French Presidency of the Council of the European Union which took place from January – June 2022.

Grounded on three key principles, namely “recovery, power and belonging”, the programme of the French Presidency was set up to achieve “a more sovereign Europe” and foster its strategic autonomy. So, what was achieved in the past 6 months and how will it impact the EU?

“Europe of January 2022 is not the same as Europe of June 2022”
French President Emmanuel Macron after the last European Council Summit under the French Presidency (24 June 2022)

Most EU experts agree that the programme of the French Presidency was ambitious; perhaps too ambitious. The 6-month period was disturbed by major crises, with the return of war on the European continent and a looming economic, energy and food crisis. With over 400 events held, more than 130 agreements reached, and over 2000 meetings of EU officials, French diplomats undeniably managed to make their presidential term a dynamic one. Overall, Paris achieved some big political wins, but also suffered some drawbacks

Significant progress on key legislative files

Some the of the presidency’s major achievements related to digital policy. The Digital Markets Act (DMA), which was fully agreed upon on 24 March, and the Digital Services Act (DSA), for which a provisional political agreement was found on 23 April. While the DMA creates competition rules for online commerce, the DSA regulates the responsibility of digital platforms in the dissemination of online content. Moreover, a proposal regarding the enforcement of the EU’s Artificial Intelligence Act was endorsed and a general approach on the governance framework for digital transformation was reached. Paris also succeeded in passing a new tool promoting reciprocity in access to international public contracts, ensuring fairer access for European companies competing in tenders abroad.

On the environmental front, the Council reached an agreement on most of the key files of the Fit for 55 package, allowing the European Parliament and the Council to begin negotiations in September. A general approach was agreed upon for the Carbon Border Adjustment Mechanism (CBAM) on 15 March, on the alternative infrastructure regulation (AFIR), the FuelEU Maritime and ReFuelEU Aviation directives on 2 June, and on the revision of the energy efficiency directive (EED) and of the renewable energy directive (RED) on 27 June. The reform of the Emissions Trading System (ETS) also passed in the Council on 28 June. However, with France racing to conclude negotiations before handing over the Presidency to the Czech Republic on 1 July, some Member States complained that Paris was overly cautious and too willing to water down some of the texts. Indeed, most of the agreements are largely aligned with the Commission’s initial proposals, and in some cases include exemptions and derogations, while the European Parliament has essentially been pushing for greater ambition. Against this background, the upcoming trilogue negotiations on most of these files are expected to be challenging.

The winding path towards a more geopolitical, democratic, and social EU

France’s ambition to make the EU a true geopolitical power only partially materialised. The Presidency did manage to conclude the work on the Strategic Compass, the white paper for European defence and security that was endorsed by the European Council on 24 and 25 March 2022. Some progress was also achieved on the flagship directive on minimum wages, with a provisional agreement reached with the European Parliament on 7 June. However, Central and Eastern European countries, especially Poland and Hungary, remain suspicious and are not fully convinced. Along the same lines, the proposal to impose a minimum 15% tax rate for multinationals across the EU was stalled, with some countries using it as a bargaining chip in other negotiations.

The French Presidency also opened the debate on including a rule of law conditionality regulation, now in force, which provides for the adoption of measures against any violation in this area that affects the EU budget. On migration, the Schengen Council was created but the Presidency struggled to pass any substantial asylum reforms. The French Presidency also oversaw the conclusion of the Conference on the Future of Europe with a report featuring citizens’ proposals being submitted to the European Parliament on 9 May. Paris gathered support regarding the possible revision of the EU treaties, a necessity according to President Macron, but the aftermath of the Conference remains uncertain.

A war and a presidential election to handle all at the same time

In the context of the war in Ukraine, the French Presidency successfully managed to maintain the Union’s unity and to conclude negotiations on several packages of sanctions against Russia, despite Hungary’s veto on a Russian oil embargo. The war also triggered major breakthroughs regarding EU defence such as delivering lethal weapons to the Ukrainian armed forces through the European Peace Facility. Moreover, at the Versailles Summit, France provided political support for the REPowerEU package, including measures to phase out the EU’s dependency on Russian fossil fuels.

Nonetheless, despite his personal involvement in the Ukrainian war, President Macron was unable to obtain any meaningful concessions such as a ceasefire from Russian President Putin. His willingness to keep the “channel of negotiations” open with the Kremlin as well as his various statements on the need to avoid “humiliating Russia” were not well received by Central and Eastern European countries. Even though the last Council Summit under the French Presidency saw the EU granting candidate status to Ukraine and Moldova, the ambiguous French position triggered distrust among several EU Member States. The French Presidency also failed to overcome Bulgaria’s veto over the accession of North Macedonia and other Balkan countries to the EU. In the end, national preferences could not always be overcome.

Finally, the French Presidential and legislative elections somewhat overshadowed the Presidency, with some critics suggesting that President Macron instrumentalised his role for electoral purposes. The Presidency got off to a strong start, but notably slowed down in the spring, when several members of the French government were busy campaigning. Furthermore, President Macron suffered a blow during the legislative elections in June, with his party losing its majority in Parliament – and an opposition dominated by two Euroskeptic political parties –, somewhat weakening his position as a leader on the EU stage

The Czech Presidency, whose new mandate starts on 1July, will now have to build on the French achievements of past months. With the stalemate in Ukraine and the risk of a looming economic crisis, it will undoubtedly face several major challenges. Its priorities, stated in its political programme, relate mainly to the human, military, economic and energy consequences of the war. They indicate some kind of continuity, but several stakeholders in Brussels are already worried that they might limit progress on important environmental and climate legislation.

For more information, please get in touch at pa@grayling.com and affairespubliques@grayling.com. You can also follow us on Twitter @TheEULobby 

Grayling Insights into the Digital Services Act

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What can companies expect from the EU’s upcoming digital platform rules? Our factsheet details all the information you need to know around the Digital Services Act, the new EU legislation that aims to tackle illegal content online.

 

 

Fit for 55 2.0: new building blocks to support the EU’s climate ambitions

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Grayling Brussels explores the second instalment of the Fit for 55 package put forward by the European Commission on 14 and 15 December. What are the main proposals and how will they impact business?

The Green Deal strikes back: ten days before Christmas Eve, the European Commission followed up its 12 proposals from July 2021 with 8 new initiatives and 4 communications on energy, transport, and the environment. Although the proposal are primarily revisions of existing rules, the package also contains new legislation on methane emissions in the energy sector.

As the name implies, the Fit for 55 package intends to bring the EU’s regulatory framework in line with the intermediate emissions reduction target of 55% by 2030 on the path to climate neutrality by mid-century. The targets themselves were made binding by the European Climate Law earlier this year.

What is included in the second instalment?

The legislative package will have far reaching implications for sectors throughout the EU economy., particularly on the energy and transport sectors.

Energy

By proposing the Energy Performance of Buildings Directive, the European Commission makes its move to decarbonise the single largest energy consuming sector in Europe. The proposed framework sets new targets for renovating the least energy efficient buildings across the EU as well as phases out subsidies for fossil fuel powered boilers by 2027. The second major focus in the energy sector is the EU gas market, for which the Commission proposes the new Energy Package for Gas to support the uptake of decarbonised gases (including an end to long-term fossil fuel contracts by 2049) and mandatory mitigation measures in the EU Methane Regulation.

Transport

As core elements to the Trans-European Transport Network (TEN-T) Regulation revision, the Commission is proposing new requirements for the deployment of electric vehicle charging infrastructure across the core infrastructure network. Importantly, the Commission is also looking to connect major airports with high-speed rail connections to foster multimodal travel. In addition, the Commission puts forward a revision for the Intelligent Transport Systems Directive to lay down the foundations for automated mobility and improve multimodal ticketing.

Climate

The requests the Council of the European Union to adopt a draft recommendation on the just transition, which aims to provide guidance to national governments on a fair and inclusive transition to a decarbonised economy. This would include equal access to training opportunities and support to affordable housing renovations. Furthermore, the Commission puts forward a strategy on sustainable carbon cycles, which sets a plan for carbon removal certification in the EU.

Challenges ahead

As with the July tranche, the primary challenge is to ensure that the level of climate ambition in these new rules is indeed fit for the 55% emissions reductions target for 2030 and also aligned with the long-term objectives of the Paris Agreement. The earlier proposals on issues such as new Emissions Trading System (ETS) rules and sustainability targets for alternative fuels have already been subjected to intense political debates, and the situation is not going to be any different this time around. It will not be easy to reach a compromise that is both environmentally sufficient and politically feasible in all 27 Member States.

Second, as the Fit for 55 regulatory overhaul grows, it will be increasingly difficult to maintain consistency across the 20-odd initiatives. Many of the proposals are closely interlinked and need to impose mutually coherent rules to foster a successful transition to 55% emission reductions. As different files are dealt with different policymakers from various industry, environment, and transport committees and working groups, it becomes important for the stakeholders to keep track of the legislative processes.

Third, the overarching focus on cross-border energy and transport infrastructure, mainly gas pipelines and roads, are likely to cause significant headaches in the Council regarding their cross-border nature and the region-specific needs of various Member States. The pan-European projects are at the heart of delivering the European Green Deal, but differences between the Member States’ dependency on natural gas, average age of building stock, or use of travel modes are all potential sparks for heated debates between the capitals.

Combined, these legislative challenges are a source of uncertainty in the European business environment at least for the remainder of this European Parliamentary term (until Mau 2024). There is also uncertainty on the timing of the legislative procedure in the Council, as France’s EU Council Presidency (Q1-Q2 2022) will inevitably be preoccupied with the French presidential elections in the spring. At the same time, competition over the ownership of the new files between European Parliament committees and political groups will add to the unpredictability in early 2022.

Managing stakeholders’ expectations, a balancing act

The new proposals were met with mixed reviews. For instance, while the new methane mitigation initiative was commended for its binding rules on measurement and leakage detection, it was simultaneously criticised for failing to take the upstream emissions of imported gas and oil sufficiently into account. According to the Environmental Defense Fund, this means that the proposal does not cover the production emissions of around 85% of the gas consumed in the Single Market.

Similarly, the Commission was for example faulted for sending mixed signals on the future fossil fuel heating systems in buildings. On the other hand, stakeholders also praised the higher targets for electric vehicle charging infrastructure and the introduction of the Minimum Energy Performance Standards (MEPS) for the entire European building stock.

Ultimately, the policymakers will need to rely on the sectoral expertise of stakeholders to determine the ways to enact fit-for-purpose legislation. As we enter the new year, business must make plans to push for this exchange with the right policymakers with influence over the right regulations.

 

Get in touch with us (EU.energy@grayling.com) and follow the conversation on the Fit for 55 package on Twitter @TheEULobby

Grayling wins Consultancy of the Year at the PRCA Public Affairs Awards

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Grayling UK was named Consultancy of the Year at the annual PRCA Public Affairs Awards in London last night.

The PRCA Public Affairs Awards celebrate the very best of the UK’s public affairs and lobbying industry, whilst the prestigious Consultancy of the Year category celebrates the overall top consultancy of the year. Judges based their decision on growth in fee income, improvement to bottom line and client and staff satisfaction and retention.

The Grayling UK Public Affairs team have had a fantastic year, adding several exciting new clients to their roster, and seeing growth in both revenue and staff numbers across our UK network.

This accolade is latest in a series of wins in 2021 for Grayling UK and brings our total to 23 for this year alone, in a list which includes PRWeek’s Best Place to Work and 30 Under 30 Star Employer and Large Consultancies of the Year for Grayling North and Scotland at the PRCA DARE Awards.

What is next for the German energy sector?

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Energy and climate issues were at the centre of this year’s federal election in Germany. It is obvious that the profound transformation of the energy sector towards a greener future yields significant opportunities and financial incentives for a broad range of industries. Yet it is also true that notable hurdles have to be overcome.

What are the challenges and opportunities for the energy sector under the next coalition government?

Download and read our free analysis here.

As a leading Public Affairs Agency, Grayling is committed to serve their clients in transformative environments. We identify risks and opportunities and devise tailored and long-term oriented communications and dialogue strategies, using a host of proprietary data analysis tools.

Interested to speak to our energy experts in more depth? Please get in touch with Geraldine Schroeder: Geraldine.Schroeder@grayling.com.

 

Walking the tightrope: our take on today’s Spending Review and Budget

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Rishi Sunak has given his third Budget since his appointment and the first multi-year Spending Review to set the scope for government departmental spending since 2015.

Today’s announcements were made amidst a backdrop of a stronger than expected economic recovery from the pandemic and encouraging signs that its damage to the economy was less severe than previously thought.

Read on to find out more about the numbers, the politics, and what it means for businesses and organisations across the country here.

 

Fit for 55 – Key players in the European Parliament

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On the 14th of July, the European Commission published the Fit for 55 package, a legislative package that aims to reduce European Union’s emissions by 55% by 2030 and to reach climate neutrality by 2050.

The legislative work is slowly beginning in the European Parliament with political groups distributing files and nominating rapporteurs and shadows.

Our Grayling team in Brussels provides a snapshot of key players to date involved in the race towards climate neutrality.

Click here to download our stakeholder map for free.

Would you like to know more or get in touch with these policymakers? Our Brussels-based Grayling team can help you navigate the European Union, inform you about the latest developments in the European institutions and support you in your engagement with decision makers:brusselspa@grayling.com.