Influence / Lobbying

TESCO

A Corporate Profile

By Corporate Watch UK
Completed October 2004

3. Influence

'What saps our strength are high taxes: excessive regulations; inflexible working practices; and the gold plating of EU directives. All of this undermines British businesses on the home front as they battle in global markets.'

Sir Terry Leahy1

As the above quote highlights, Tesco has a bit of a problem with national and European regulation, and through lobby groups and close links with government, has sought to loosen ‘restrictive’ regulation.

Influencing Government


'Tesco supports the Government of the Day'2

Tesco says it made no political donations during 2003. During the year the group made contributions of £44,713 (2003 - £31,282) in the form of sponsorship for political events: Labour Party - £14,368; Conservative Party - £5,502; Liberal Democrat Party - £6,340; Plaid Cymru - £1,300; Fianna Fáil - £1,203; Usdaw (the main union for Tesco employees) - £16,000.3

According to Red Star research, in the late 1990s Tesco executives featured on six government task forces, more than for any single company and far more than the other supermarket chains. These included Terry Leahy, who sat on the Board of Trade's Competitiveness Advisory Group (although from the DTI website it is unclear whether this still exists in 2004)4 and former Tesco Retail director, Michael Wemms, who was a member of the New Deal Task Force.5

Currently, John Longworth, group trading, law and technical director of Tesco PLC, sits on the Government Advisory Committee on Packaging Waste and Recycling, and is also one of nine commissioners of the Health and Safety Commission.6 Lucy Neville Rolfe, Tesco's Director of Group Corporate Affairs, also sits on Government committees (see below).

Tesco gave the Labour Party more than £5,000 in sponsorship in 1997 and 1998. It is the biggest backer of the New Deal scheme7 and has offered 1500 'opportunities' for New Deal applicants.8 Tesco's former Chief Executive Ian McLaurin sits in the House of Lords, and in 1999 Tony Blair's government launched its first annual report in Kensington Tesco9.

Tesco was also a £12m sponsor of the Millennium Dome. It was reported in The Observer at the time10 that lobbying firm, LLM - involved in a campaign on behalf of Tesco to block plans for a tax on shopping centre car parks - had 'suggested that a £12 million Tesco donation to the Millennium Dome was part of a 'quid pro quo deal'—giving its support to a government project in order to endear itself to New Labour. The paper went on to say that there is no suggestion that Tesco made the Dome donation to help it get its way over the car park tax issue. But the plan to impose the tax was dropped from the White Paper on transport—and the terms of the exemption were exactly as LLM's Ben Lucas had suggested. The Sunday Times11 said that the estimated cost to Tesco of the car park tax would have been £40 million.12

Tesco has had a prominent presence at Labour Party conferences. In 2002, it sponsored the National Reception at the Party conference.13 In 2003, it sponsored the Constituency Delegates' Welcome reception, and co-ran a fringe debate 'Promising the Earth? Food, Farming and Rural Communities': presumably a fascinating 'greenwash' occasion considering the reality of Tesco's total contempt for UK farmers and rural communities. See section on 'Tesco's dealing with suppliers and farmers'.

It is quite clear that Tony Blair has a fascination for successful corporate bosses, including Terry Leahy who was knighted in 2002. Rumours in Management Today (January 2004) suggest that the government wants Terry Leahy to sort out the National Health Service.

Many campaigners believe that supermarkets bring undue influence on local government, especially when seeking planning permission for stores. Transforming local government is certainly on Tesco's agenda. Tesco is a corporate partner of the New Local Government Network (NLGN) which is 'an independent think tank seeking to transform public services, revitalise local political leadership and empower local communities'. NLGN has been favourably endorsed by Tony Blair, 'Modernising local government is vital to the future of our communities. NLGN contributes innovative and thought-provoking ideas to the debate on how we achieve that'.14

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Dame Shirley Porter - Heiress to the Tesco fortune

‘Shirley Porter was responsible for the worst, the most cynical and callous and indeed the most costly conspiracy of political corruption in this country in the modern age'
Peter Bradley MP

Eldest daughter of Sir Jack Cohen, Shirley Porter was the Conservative Party leader of Westminster council and later Mayor of Westminster during the late 1980's and 1990's. She is perhaps best known for the 'Homes for Votes' scandal in which council houses were sold off in marginal wards on the basis that homeowners were more likely to vote Conservative. After refusing to pay the £27m surcharge (plus interest and costs) for the costs to the Council of her actions, and initially insisting that her assets were only worth £300,000, she eventually reached a deal with Westminster Council, paying £12m in 2004.15

Revolving doors

Tesco is keen on employing former government officials. In 2001, it paid Philip Gould, one of Tony Blair's most trusted political advisers, to help reorganise its publicity, media and lobbying operation. It also hired David North, the Prime Minister's private secretary and a specialist in rural affairs, to take up a new position as director of government affairs and Corporate Social Responsibility, a post that was introduced as a direct result of Philip Gould's advice. North represented Blair on the Rural Recovery Task Force, set up to rebuild British farming after the foot and mouth crisis. He also helped to run the Cabinet Office's unit to support biotechnology at the height of the GM foods controversy in 1999.16

Conservative spokesman on environment, food and rural affairs, Peter Ainsworth, condemned the appointments, telling the Independent on Sunday, 'This reinforces the sense that there is a charmed circle around the Prime Minister which major corporations feel they need to get inside.'

Tesco's Company Secretary and Director of Group Corporate Affairs, Lucy Neville-Rolfe, is a fascinating example of 'revolving doors' between industry and government. At Tesco, her responsibilities include government, EU and competition issues, investor relations, communications, community affairs and corporate affairs policy for the international business in 10 countries. She reports directly to Terry Leahy.

Neville-Rolfe’s external appointments include business lobby groups, NGOs and government committees such as the CBI Europe Committee, UNICE Task Force on Enlargement and the boards of EuroCommerce and the British Retail Consortium. She also sits on a 'work and enterprise' panel for The Work Foundation and is on the advisory committee for the Economic and Social Research Council 'Cultures of Consumption' project. Another advisory role is sitting on the President's committee of London First, which Tesco also sponsors.17 She has been a-appointed to the Foreign and Commonwealth Office Management Board,18 as well as to the Deputy Prime Ministers' Local Government funding committee, which is looking into better ways of funding council services19, further crossing the line between influencing the government and being the government.

Neville-Rolfe joined Tesco from the Cabinet Office in 1997. She was formerly Director of the Cabinet Office Deregulation Unit under Michael Heseltine and later with Lord Chris Haskins who transformed it under New Labour. With Haskins, she wrote 'Is there a future for European Farming?' (2002) for the Foreign Policy Centre (see 'Relations with Suppliers and Farmers' section).

From 1992 to 1994 she was a member of the Prime Minister’s Policy Unit where her responsibilities included home and legal affairs and public sector reform. From 1973 to 1992 she worked at the Ministry of Agriculture, Fisheries and Food on EU and countryside issues and was Private Secretary to the late Rt Hon John Silkin MP. From 1991 to 1992, she was non-executive director of construction firm, J. Laing Plc.

Covering both bases (Labour and Tory) she spoke at the Conservative Party conference in 2003.

Neville-Rolfe’s husband, Sir Richard Packer, was Permanent Secretary at the Ministry of Agriculture, Fisheries and Food (now incorporated into DEFRA) from 1993 to 2000. He was mainly concerned with European Union polices on agriculture.

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Lobby Groups

Tesco, along with most other supermarkets, is a member of the Freight Transport Association, 'the lobby group representing the interests of road hauliers …(which) campaigns against restrictions on lorries travelling through residential areas at night, against constraint on the size of lorries and for increases in the speed limit for large lorries on small country roads.'20 In June 2004, Tesco co-signed a letter to the Chancellor calling on him to increase transport spending and 'fund the widening of the most congested parts of our key Trade Routes: the M1, M25, M4, M6, and M62'.21

Tesco is a member of the British Retail Consortium (BRC)22 , and regularly attends the BRC summer Parliamentary reception and the Scottish Retail Consortium (SRC) Summer Parliamentary reception, where guests were given weighty going-home bags courtesy of Tesco and others. John Longworth, group trading, law and technical director of Tesco PLC, sits on several British Retail Consortium policy committees. Michael Wemms, a former Tesco director who went on to become chairman of House of Fraser, is the new chair of the British Retail Consortium.23

Tesco is a member of the Institute of Grocery Retailers (IGD).24 John Longworth is also chair of the IGD Director's Technical Forum.

Tesco also appears influential within the Confederation of British Industry (CBI), Britain's biggest business lobby, with Terry Leahy being invited to address its annual conference in November 2001 and the CBI's Business Summit in June 2004. Lucy Neville-Rolfe, Tesco's Director of Corporate Affairs, sits on the CBI's Europe Committee and accompanied a Foreign Office delegation to the Czech Republic in this capacity.25 In a recent poll of companies, the CBI supported Tesco's claim that a high proportion of absence at work is due to feigned sickness.26

Lucy Neville-Rolfe also sits on the UNICE Task Force on Enlargement, UNICE being the Union of Industry and Employers Federations of Europe, of which the CBI is a member- federation.27 UNICE has been picked out by Corporate Europe Observatory for its lobbying against binding agreements on greenhouse gas emissions,28 which sits somewhat uncomfortably with Tesco's professed concern about the subject. (see Corporate Crimes)

Terry Leahy is also on the Advisory Board of influencial policy think-tank, Demos.29

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Public relations

Tesco uses a range of Public Relations firms including:

Weber Shandwick Worldwide; 72 Point (part of the SWNS Group - the UK's biggest independent press agency);
CHA, the workplace communications consultancy;
Good Relations;30
GGK Public Relations (Poland);31
The Maitland Consultancy.
Lawson Lucas Mendelsohn (LLM)32

Cause related marketing

Tesco is a high profile sponsor of Cancer Research (UK)'s Race for Life. It became a lead sponsor of the annual fundraising run in 2002, generating around 22% of the total £17m of funds. It undertook a large-scale recruitment campaign to encourage women to participate, supported through extensive TV, radio and in-store promotion. Cancer Research UK says the involvement gave the event a high street presence, with awareness among Tesco customers increasing from 14% in February 2002 to 39% in August. Funds raised by Tesco employees were topped up by 20% by the Tesco Charity Trust, resulting in a total contribution of £646,627. The company also delivered 55,055 of the 254,726 runners in 2002 (16,743 of these were staff), helping CRUK to exceed its participation targets.33

Special mention for Tesco champion, Prunella Scales

Prunella Scales' adverts for Tesco, in which she played a busybody housewife, are reputed to have added £2.2bn to Tesco's profits. Her support for Tesco is ironic given her concern for the countryside. From 1997 – 2002 she was the President of the CPRE, and is now the face of the (Tesco-sponsored) Woodland Trust.34

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Education

‘The school of the future will be franchised, branded and sponsored. To you it is a nightmare prospect. To New Labour it represents progress, modernisation and the future.’

‘The prime minister wants schools to be run like Tesco stores. We’ll have special offers. Two chemistry lessons for the price of one...’
Doug McAvoy, General Secretary of the National Union of Teachers35

Tesco began its Computers for Schools scheme in 1990. On a similar theme, to celebrate the Millennium, Tesco ran a project (which now appears to have disappeared from the web),36 called Tesco SchoolNet 2000. It was billed as the world's biggest schools internet project. Thousands of kids from more than 8000 schools around the country created a unique record of the community life in the UK, 'a Domesday Book for the 21st Century' based on the national curriculum. Tesco provided curriculum support materials, 52 advisory teachers, 340 internet centres in Tesco stores, 17 internet centres in libraries in areas where there are no Tesco stores and a help team. Schools booked into the internet centres where they could upload pupils’ work onto the website. This work was showcased in the Learning Zone at the Millenium Dome, and due to its success ran into 2001.

Tesco and Education Action Zones

Education action zones (EAZs) were initially local partnerships between groups of schools, businesses, parents, local education authorities and others designed to boost standards in challenging areas. These are now being transformed into Excellence in Cities Action Zones (EiCAZs) or Excellence Clusters. Tesco has been very involved in these ‘public private partnerships’. Sponsored projects included a school tour of the local supermarket in the Digby Granby and Toxteth EAZ.37

Targetting Children and Influencing Education

Marketing experts reckon that if you start kids early on brand recognition, you've got them hooked for life.38 In recent years, many corporations have moved into schools offering educational materials, events and competitions, as well as supplying schools with technology in exchange for high company visibility.

Since 1992 Tesco has been running the Computers for Schools scheme, whereby tokens on certain products (Walkers' crisps, Tetley tea and Mcvitie's biscuits) or with any purchase of over £10 at a Tesco store can be exchanged for computer equipment for local schools. Tesco is very proud of this scheme, which in October 2000 won the Nestle Social Commitment prize [yes, really] at the Food and Industry Awards. However, parents and teachers have expressed concerns over the way the scheme encourages children to be brand-conscious consumers at an early age in order to get hold of the equipment their school needs.

A report by Which? magazine in 2001 showed that under the Tesco Computers for Schools scheme 21,990 vouchers were needed to buy a personal computer costing around £1,000. Parents would have to spend nearly £250,000 to obtain the necessary vouchers. Voucher schemes mean that pressure is put on parents to buy particular brands and shop in particular shops. This can cause additional financial pressures for less well off parents who might not normally shop there or choose to spend their income on junk food. It also puts pressure on pupils whose parents choose not to participate in a scheme.39

The provision of school equipment by corporations not only raises corporate brand awareness (the computers have Tesco's logos on them) but also lets the government off the hook, ultimately allowing less spending on schools. The National Union of Teachers has voiced concerns about schools’ creeping reliance on corporations for the provision of essential equipment.40

There are also concerns that most of the products blessed with free computer vouchers come into the category of junk food. Children may learn about nutrition at school, but the next day in assembly they will be encouraged to buy as many crisps, biscuits and fizzy drinks as they can to enable them to get a computer. Tesco's statement on this is profoundly unhelpful: 'All products are clearly labelled and if a shopper should have any health concerns they should directly contact the product concerned.' 41 Tesco also points out that customers do not have to buy the marked products to get tokens; rather than spending 35p on a packet of crisps, they can spend £10 on any purchase from Tesco and get a token worth the same amount. Cheers, Tesco.

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Universities

Research Tesco sponsors the Tesco Centre for Organic Agriculture at the University of Newcastle on Tyne42 to provide research and development support for the UK organic food industry. A five year £450,000 sponsorship has been given to focus on a range of research, from organic crop rotation to livestock nutrition. Tesco works with a similar project at the University of Aberdeen.43

Tesco provides core sponsorship for the 'Food Animal Initiative', based primarily at the University of Oxford, which develops new farming practices that are 'welfare friendly, food safe and environmentally sustainable'. See section on 'animal welfare' in Corporate crimes.
Tesco also sponsored a Masters course in Strategic Communications at UMIST, along with Burson Marsteller and British American Tobacco. 44 This course, the 'MSc in Corporate Communications and Reputation Management' is now offered on a full time basis at Manchester Business School.45

Recruitment
Tesco estimates that between 20,000 – 25,000 of its staff work in Tesco while pursuing qualifications in further or higher education. It takes on about 120 staff a year through its graduate scheme.

‘Training in Partnership’

Since 1999, Tesco has run a Business Improvement Programme at Manchester Business School (MBS) for management staff.

In October 2001, Tesco and the University of Westminster pledged to work together over the only degree-recognised centre of excellence for Merchandise Planning. Tesco offers paid work placements and commercial rounding to 5 undergraduates in the second year of the course.

Tesco managers at distribution centres have the oppportunity to study through the Institute of Logistics and Transport.

Tesco has two Lifelong Learning Centres – at Welham Green Distribution Centre in Hertfordshire and Fennylock Distribution centre in Milton Keynes, where employees can sign up for e-learning through Learndirect.

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References
1. Tesco:a new international company, a new perspective Speech by Terry Leahy 26/1/04 www.tesco.com/corporateinfo
2. Management Today interview with Chris Blackhurst
3. Tesco Plc Annual Report 2004
4. House of Commons Hansard for 14th October 1997, http://www.parliament.the-stationery-office.co.uk/pa/ld199798/ldhansrd/vo971014/text/71014w03.htm
5. http://www.prnewswire.co.uk/cgi/news/release?id=47745 viewed 28/7/04
6. http://www.hse.gov.uk/aboutus/hsc/longworth.htm viewed 28/7/04
7. www.red-star-research.org.uk/subframe3
8. http://www.hm-treasury.gov.uk/budget/1998/chap3.htm
9. ibid p206
10.The Observer 26/7/98
11.The Sunday Times 12/7/98
12. As reported in www.publications.parliament.uk/pa/cm199899/cmselect/cmcumeds/21-ii/21app17.htm
13. See Friends of the Earth reports 'Big Business in Bournemouth 2003' http://www.foe.co.uk/resource/reports/exposed_bournemouth_2003.pdf and http://www.foe.co.uk/resource/reports/terrible_ten.pdf viewed 24/3/04
14. http://www.nlgn.org.uk/nlgn.php See 'About NLGN' viewed 8/7/04
15. http://news.bbc.co.uk/1/hi/uk_politics/3867387.stm viewed 28/7/04
16. 'Tesco recruits two Blair Aides' Severin Carrell Independent on Sunday 9/12/01
17. www.london-first.co.uk/about_us/ourmembers.asp?L2=79
18. House of Commons Hansard Written Answers for 23rd June 2000, http://www.parliament.the-stationery-office.co.uk/pa/cm199900/cmhansrd/vo000623/text/00623w04.htm
19. www.local.odpm.gov.uk/finance/balance/membrshp.pdf
20. George Monbiot Captive State 2000 p.176
21. http://www.fta.co.uk/news/pressreleases/archive/20040628Openletter.htm viewed 8/7/04
22. www.parliament.the-stationery-office.co.uk/pa/cm199899/cmselect/cmtrdind/678/9070622.htm
23. www.theretailbulletin.com/index.php?page=5&cat=rese&id=4308 viewed 28/7/04
24. www.igd.com/default.asp?/about/member_fs.asp?menuid=41
25. http://www.nds.coi.gov.uk/coi/coipress.nsf/898f421d664e93ca802567350057b240/5c6867abef1c2a5c802569dd0057df0a?OpenDocument
26. http://news.bbc.co.uk/1/hi/uk/3741275.stm viewed 8/7/04
27. www.esrc.ac.uk/newsociety/newsociety/whoinvests.html
28. see http://www.xs4all.nl/~ceo/greenhouse/european.html. For more on UNICE, see http://www.xs4all.nl/~ceo/ebsummit/factsheet2.htm
29. http://www.demos.co.uk/aboutus/ournetwork/advisorycouncil/ viewed 28/7/04
30. http://directories.mad.co.uk/mw/ccs/public-relations/goodrelations.asp viewed 8/7/04
31. http://www.zfpr.pl/ggkeng.htm viewed 8/7/04
32. www.red-star-research.org.uk/llm.html viewed 28/7/04
33. 'Knowing which Lever to Pull' by Liza Ramrayka The Guardian Society pages 17/11/03
34. See 'The case against Prunella Scales' The Ecologist special edition September 2004 p.g.49
35. 'Union Leader warns of “nightmare prospect” for education under Labour government' Liz Smith 29/4/04 wsws.org
36. Records from the projects exist on schools websites such as http://www.brynmawr.gwent.sch.uk/tesco2000.htm viewed 10/7/04
37. http://www.dgteaz.org.uk/news/tescometro.htm viewed 20/9/04
38. For an interesting article, see http://www.media-awareness.ca/english/parents/marketing/marketers_target_kids.cfm
39. National Union of Teachers’ briefing on 'School's Role in promoting Child Health and Combating Commercialisation' www.teachers.org.uk/resources/pdf/combating_comm.pdf
40. www.teachers.org.uk/resources/pdf/combating_comm.pdf
41. Quoted in The Guardian 11/4/01
42. http://www.ncl.ac.uk/tcoa/ viewed 12/7/04
43. http://www.abdn.ac.uk/organic/organic_07.php viewed 12/7/04
44. The Guardian, 8/12/00
45. http://www.mbs.ac.uk/news/story.asp?story=43 viewed 28/7/04
 
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