First-tier Tribunal (General Regulatory Chamber)

Neutral Citation Number: [2025] UKFTT 385 (GRC)

Appeals No's: EA/2023/0444 & 0445

IN THE MATTER OF AN APPEAL TO

THE FIRST-TIER TRIBUNAL,

GENERAL REGULATORY CHAMBER

(INFORMATION RIGHTS)

 

Decision given on: 31 March 2025

 

BETWEEN:

 

GEORGE GREENWOOD

Appellant

and

 

THE INFORMATION COMMISSIONER

First Respondent

and

 

HM Treasury

Second Respondent

 

 

Hearing: 19 March 2024 (on the papers) and on CVP on 25 February 2025.

 

Before: Brian Kennedy KC, Miriam Scott & Naomi Matthews

 

Representations:

The Appellant as a Litigant in person.

First Respondent: Gemma Garvey of the ICO by written contributions.

Second Respondent: Laura Shepherd of Counsel.

 

Result: The Appeal is dismissed.

REASONS

 

Background;

1.      The Appellant appeals against the Information Commissioner's Decision Notices IC- 236007-C1C9 dated 5 October 2023 ("0444) and IC-236010-D4D5 dated 12 October 2023 ("0445"), which set out the Commissioner's findings in relation to HM Treasury's handling of the Appellant's requests for information dated 15 March and 11January 2023 respectively. The appeals are against two decisions are brought by George Greenwood ("the Appellant"), under section 57 of the Freedom of Information Act 2000 ("FOIA).

2.      The Appeals were listed as paper hearings to be heard together before the Tribunal on Tuesday 19 March 2024. The Panel had carried out a detailed examination of the papers and after deliberation found it impossible to determine, with definitive accuracy which exemption or exemptions cited from the FOIA have been properly (including subject to the public interest test) applied to the withheld information within the documents compiled and supplied to us in the relevant parts of the Commissioners' Closed Bundles.

Chronology:

3.      (Re:0444] On 11 January 2023, the Appellant asked HM Treasury ("HMT") as follows:

(1)  Please provide a list of meetings, including the meeting titles and dates, between ministers and Binance staff concerning cryptocurrency, blockchain or digital assets. Please provide information for the period 1st June 2021 to the date of this request.

(2)  Please provide a copy of correspondence between Binance staff and ministers concerning cryptocurrency, blockchain or digital assets for the period 1st June 2021 to the date of this request.

(3)  Please provide a copy of the minutes of the meeting held between Binance/ John Glen on 9th February 2022.

4.      On 8 March 2023, HMT responded to the Appellant's request, confirming that it held information within the scope of his request and disclosing the dates of two meetings between Binance staff and ministers within the scope of item (1) and correspondence between Binance staff and ministers within the scope of item (2), save that it contained various redactions made pursuant to ss 35(1)(a) (formulation of government policy), 40(2) (personal information), 41(1) (information provided in confidence), and 43(2) (commercial interests) of the Freedom of Information Act 2000 ('FOIA'). HMT stated that the rest of the requested information had also been withheld under those exemptions.

5.      On 15 March 2023, the Appellant asked HMT to conduct an internal review of its refusal to disclose the withheld information.

6.      On 17 May 2023, HMT notified the Appellant that it had completed an internal review of its decision and concluded that it was no longer appropriate to rely on s41 FOIA, in light of which it disclosed additional, albeit partly redacted, correspondence. It continued to refuse to disclose the remainder of the information, however, on the basis that it was exempt under ss 35(1)(a), 40(2) and 43(2) FOIA.

7.      On 31 May 2023, the Appellant complained to the Commissioner concerning HMT's handling of his request.

8.      On 12 October 2023, the Commissioner issued a Decision Notice ("DN") IC-236010-D4D5, in which he concluded materially as follows:

(i)                 Bearing in mind the need to give the term "relates to" in s35(1)(a) FOIA a broad interpretation, the Commissioner was satisfied that there was information within the scope of the Appellant's request which related to the formulation and development of the government's policies on cryptoasset regulation and the positioning of the UK as a place open for cryptoasset businesses. Among other things, the Commissioner noted HMT's position that it was considering feedback following the closure of the public consultation on these issues on 30 April 2023 and that its policy development was continuing. The exemption was therefore engaged (DN, paras 9-18 and 20);

(ii)              In considering the balance of the public interest in relation to s35(1)(a), the Commissioner found that there was a strong public interest in protecting information "where release would be likely to have a detrimental impact on the ongoing development of policy" (DN, para 35). In this case, the requested information contained "open and frank views" from Binance employees which were shared on a confidential basis. HMT relied on information provided by stakeholders to better understand the impact of policy proposals. If the requested information were made public, therefore, it could deter stakeholders from similar future engagement with HMT, which could negatively impact policy development by limiting the range of views that officials can consider (paras 36-37);

(iii)            While the Commissioner accorded "significant weight" to the public interest in the accountability and transparency of public bodies and, in particular, the government's approach to the regulation of cryptoassets, (DN, para 39), he also afforded significant weight to the public interest in "not disclosing confidential information regarding businesses and thereby potentially negatively impacting policy development around financial regulation, in particular cryptoassets" (DN, para 40). The Commissioner also had particular regard to the fact that the public interest in the regulation of this area was "served in large part by the ongoing consultation and future response document, alongside regular government engagement across the financial services sector" (ibid). Consequently, he found, the public interest in maintaining the exemption outweighed that in the disclosure of the requested information (para 41);

(iv)            In relation to HMT's reliance on s43(2) FOIA, the Commissioner noted its concern that "disclosing the information in scope of this exemption would be likely to prejudice the commercial interests of Binance, for reasons provided in confidence to the Commissioner" (para 45). Having considered the withheld information and the closed arguments of HMT on this point, the Commissioner accepted that HMT's concerns were "credible" and its fear that the envisioned prejudice would be likely to occur was "reasonable" (para 47). Specifically, the Commissioner was satisfied that the chance of the prejudice occurring was "more than a hypothetical possibility and poses a real and significant risk" (ibid). The exemption was therefore engaged (para 48); and

(v)              In relation to the balance of the public interest under s43(2) FOIA, the Commissioner accepted that there was, in this case, "a clear public interest in ensuring that the fairness of competition in the financial market is not undermined" and that this outweighed the public interest in transparency and accountability of the government in relation to cryptoasset regulation, "particularly as the public interest is satisfied to some degree by HMT's ongoing policy work" (para 55). He therefore concluded that the balance of the public interest also favoured the maintenance of the exemption under s43(2) (DN, para 56).

9.      On 13 October 2023, the Appellant appealed to the Tribunal against the Commissioner's DN.

10. [Re: - (0445). On 15 March 2023, the Appellant asked HMT to provide him with: "a copy of the minutes of, and the civil service briefing issued to ministers ahead of, the following meeting as per FOI2023/00463. Meeting: UK Country Manager, Binance - 9 February 2022'

11. On 14 April 2023, HMT confirmed to the Appellant that it held information within the scope of his request. It disclosed one document with some information redacted on the basis that it was exempt under ss 35(1)(a), 40(2) and 43(2) FOIA and that the balance of the public interest favoured the maintenance of those exemptions. HMT withheld the readout of the meeting in its entirety under s35(1)(a) and 43(2).

12. On 17 April 2023, the Appellant asked HMT to undertake an internal review of its refusal to disclose the withheld information.

13. On 17 May 2023, HMT notified the Appellant that it had completed an internal review of its decision and concluded that it was appropriate to disclose a redacted copy of the civil service briefing but maintained its refusal in respect of the remainder of the requested information.

14. On 31 May 2023, the Appellant complained to the Commissioner concerning HMT's handling of his request for information. On 7 June 2023, the Commissioner notified HMT that it was investigating the Appellant's complaint.

15. On 19 July 2023, HMT wrote again to the Appellant, on this occasion disclosing additional material from the civil service briefing that had previously been withheld, but otherwise maintaining its refusal to disclose the remaining information.

16.  On 5 October 2023, the Commissioner issued Decision Notice IC-236007-C1C9, in which he concluded materially as follows:

                 i.            Bearing in mind the need to give the term "relates to" in s35(1)(a) FOIA a broad interpretation, the Commissioner was satisfied that there was information within the scope of the Appellant's request which related to the formulation and development of the government's policies on cryptoasset regulation and the positioning of the UK as a place open for cryptoasset businesses. Among other things, the Commissioner noted HMT's position that it was considering feedback following the closure of the public consultation on these issues on 30 April 2023 and that its policy development was continuing. S35(1)(a) was therefore engaged (DN, paras 12-18 and 20);

               ii.            In considering the balance of the public interest in relation to s35(1)(a), the Commissioner found that there was a strong public interest in protecting information "where release would be likely to have a detrimental impact on the ongoing development of policy" (DN, para 30). In this case, the requested information contained "open and frank views" from Binance employees which were shared on a confidential basis. HMT relied on information provided by stakeholders to better understand the impact of policy proposals. If the requested information were made public, therefore, it could deter stakeholders from similar future engagement with HMT, which could negatively impact policy development by limiting the range of views that officials can consider (paras 31-32);

 

             iii.            While the Commissioner accorded "significant weight" to the public interest in the accountability and transparency of public bodies and, in particular, the government's approach to the regulation of cryptoassets, (DN, para 34), he also afforded significant weight to the public interest in "not disclosing confidential information regarding businesses and thereby potentially negatively impacting policy development around financial regulation, in particular cryptoassets" (DN, para 35). The Commissioner also had particular regard to the fact that the public interest in the regulation of this area was "served in large part by the ongoing consultation and future response document, alongside regular government engagement across the financial services sector" (ibid). Consequently, he found, the public interest in maintaining the exemption outweighed that in the disclosure of the requested information (para 36);

             iv.            In relation to HMT's reliance on s43(2) FOIA, the Commissioner noted its concern that "disclosing the information in scope of this exemption would be likely to prejudice the commercial interests of Binance, for reasons provided in confidence to the Commissioner" (para 40). Having considered the withheld information and the closed arguments of HMT on this point, the Commissioner accepted that HMT's concerns were "credible" and its fear that the envisioned prejudice would be likely to occur was "reasonable" (para 42). Specifically, the Commissioner was satisfied that the chance of the prejudice occurring was "more than a hypothetical possibility and poses a real and significant risk" (ibid). The exemption was therefore engaged (para 43); and

               v.            In relation to the balance of the public interest under s43(2) FOIA, the Commissioner accepted that there was, in this case, "a clear public interest in ensuring that the fairness of competition in the financial market is not undermined" and that this outweighed the public interest in transparency and accountability of the government in relation to cryptoasset regulation, "particularly as the public interest is satisfied to some degree by HMT's ongoing policy work" (para 50). He therefore concluded that the balance of the public interest also favoured the maintenance of the exemption under s43(2) (DN, para 51).

17.  On 13 October 2023, the Appellant appealed to the Tribunal against the Commissioner's DN.

18.  On 20 November 2023, the Registrar of the First-tier Tribunal directed that both appeals (0444 & 0445) be heard together.

19.  The Appellant's grounds of appeal against both DNs are essence similar.

Ground (1) - He asserts that the Commissioner:

                 i.            failed to take account of the fact that the material is likely lobbying activity and, consequently, failed to attach due weight to the public interest in transparency concerning a company that is seeking to influence the development of government policy;

               ii.            gave undue weight to the fact that Binance had expressed 'open and frank' views in its meetings with HMT and wrongly concluded that these would bear on the ability of civil servants to advise ministers;

             iii.            misconstrued the nature of the public interest in transparency and accountability by attaching significant weight to the public interest in knowing that financial service businesses were being treated fairly by the government and that the correct amount of money was being spent on maintaining contact with such businesses;

             iv.            in relation to s43(2), failed to give even a broad indication of the harm disclosure could allegedly cause; and

               v.            failed to point to any evidence for the "catastrophic" conclusion that disclosure could cause "a highly significant distortion in the market".

20.  The Commissioner opposed the Appellant's appeal as follows:

Ground (1). Whether the Commissioner was required to attach particular weight to evidence of lobbying activity: The Appellant does not appear to dispute that the exemption under s35(1)(a) is engaged on the facts of each appeal but argues, in relation to the balance of the public interest, that the Commissioner failed to take account of the fact that the withheld material is "likely to constitute lobbying activity" (grounds, para 18). He relies on the decision in Corderoy v IC and DEXEU (EA/2019/0109 & 0111, 22 November 2019), in which the FTT placed weight on the Commissioner's own guidance on section 35 concerning the disclosure of the activities of lobbyists. Among other things, the Tribunal noted the following passages of the guidance: "Traditionally, safe space arguments relate to internal discussions, but modern government sometimes invites external organisations/individuals to participate in their decision-making process (eg consultants, lobbyists, interest groups, academics). Safe space arguments can still apply where external contributors have been involved, as long as those discussions have not been opened up for general external comment. However, this argument generally carries less weight than if the process involved only internal contributors". - - - "There may also be issues regarding lobbying. Lobbying is a legitimate activity that can benefit government decision making. However, there may be issues concerning the process of lobbying or influence of lobbyists. For example, if only certain lobbyists or interest groups have been given access to government and the opportunity to influence public policy has not been extended to others, then this increases the public interest in disclosure. This is especially relevant where the policy is still being formulated and there is still opportunity for others to present their views, as this broadens the range of opinions being taken into account". More generally, the Appellant criticises the Commissioner for failing to take account of the regulatory concerns about Binance's activities, given the civil and criminal investigations against it.

21.  The Commissioner recognises the decision in Corderoy and, indeed and subsequently updated his guidance on section 35 to take account of it. Corderoy is, however, not authority for the proposition that lobbying activity can never fall within the scope of section 35(1)(a). That much is plain from the Commissioner's guidance cited above. Even if Corderoy did reach such a conclusion (which it did not), it would not constitute a precedent of any sort.

22.  The Commissioner found that the Appellant also overlooks that the Tribunal in Corderoy was not concerned with the minutes or readout of a meeting but with the disclosure of information which a lobbying group had provided to the government department in that case. There is, in other words, a material difference between the disclosure of information provided by external lobbyists only, on the one hand, and the disclosure of information about discussions between a company and ministers which may involve an exchange of views by both sides.

23.  Further the Commissioner found the Appellant also overlooks that the Tribunal in Corderoy was not concerned with the minutes or readout of a meeting but with the disclosure of information which a lobbying group had provided to the government department in that case. There is, in other words, a material difference between the disclosure of information provided by external lobbyists only, on the one hand, and the disclosure of information about discussions between a company and ministers which may involve an exchange of views by both sides.

24.  The Commissioner denies that his assessment of the withheld material involved any error of law on his part. The Commissioner was aware of the Appellant's concerns about lobbying activity which were noted extensively in the Appellant's correspondence with HMT, including his requests for internal review and repeated in HMT's own response to the Commissioner's investigation. The fact that the Commissioner did not address Binance's activities as "lobbying" in his DN he argues, does not show that he was unaware of the Appellant's concerns on this point.

25.  The Commissioner notes both DNs, assert that "Binance has been subject to media attention and regulatory action globally, including in the UK, and there is a public interest in how this has been carried out" (see paras 24, 45 and 47 of the DN dated 5 October 2023 and paras 24, 50 and 52of the DN dated 12 October 2023, emphasis added). To describe these references, as the Appellant does, as "only passing mention as 'media attention'" is to entirely misrepresent the Commissioner's analysis.

Ground (2) - whether the Commissioner gave undue weight to the need for a safe space for policy development:

26.  The Appellant complains that the Commissioner erred in taking account of the fact that the requested information contained "open and frank views from Binance employees which were shared on a confidential basis" (grounds, para 22). The Appellant says that it is "not clear why the substance of the asks would change given a company would likely be commercially interested in certain outcomes regardless of publicity" (ibid).

27.  This overlooks, however, the extent to which a company may be more forthcoming and open in private than it would be in public, in effect offering the public authority information it otherwise it would not receive. The Commissioner does not consider that it was in any sense unreasonable for him to take such factors into account, particularly when the public interest identified by the Tribunal in DBERR (cited above at paragraph 36) is taken into account. Indeed, this ground of appeal amounts to no more than a disagreement with the Commissioner's analysis and does not identify any error of law.

Ground (3) - whether the Commissioner correctly apprehended the nature of the public interest in transparency and accountability.

28.  The Appellant argues that the Commissioner erred in concluding that the balance of the public interest favours the maintenance of the exemption under s35(1)(a) because the disclosure of the material was "highly unlikely to meaningfully prejudice civil servants in providing policy advice" (grounds, para 24).

29.  The Appellant does not, however, appear to dispute the Commissioner's finding that the withheld material concerns "live areas of Government policy development" in this area, and that the Government was still working on its response to the consultation (DN of 12 October 2023, para 14). Nor does the Appellant dispute that the withheld information "is information generated by considering options in relation to the development of government policy on cryptoassets" (ibid, para 20, emphasis added). Indeed, the very public profile of Binance upon which the Appellant has laid so much emphasis is entirely consistent with, and indeed reinforces, the Commissioner's conclusion that disclosure of the information "at the time the request was made, and any subsequent debate in the media, may have prevented or prejudiced the development of policy by causing undue distraction or hindered the consideration of all options" (ibid, para 28). The concern advanced by HMT and accepted by the Commissioner was not that civil servants would be dissuaded from giving their advice but rather the risk that the degree of press scrutiny following the disclosure of the requested information at such a preliminary stage might in effect foreclose the meaningful exploration of various options.

30.   For these reasons, the Commissioner submits that this ground of appeal, too, does not identify any errors of law in his DNs.

Grounds (4) and (5) - whether the Commissioner was entitled to take account of HMT's arguments under s43(2), notwithstanding that they could not be publicly disclosed

31.  Both these grounds of appeal may be taken together, dealing as they do with HMT's reliance on closed submissions in relation to the application of s43(2) to the withheld material. The Commissioner accepts that, in the Appellant's words, "very little of substance of the arguments made [in favour of withholding the information under s43] has been disclosed in the decision notice" (grounds, para 28). The Commissioner is also mindful of the disadvantage that the Appellant faces in seeking to challenge his findings on this point.

32.  The Commissioner has considered the possibility of providing the Appellant with a gist or summary of the confidential information in order to assist his understanding of the Commissioner's reasoning on this point. Having done so, however, the Commissioner remains satisfied that the information set out in his DNs is the maximum amount of information that he is able to provide consistent with his statutory duties, his duties to the Tribunal and the interests of HMT and Binance. In the circumstances, he can do no more than reiterate that the public interest in favour of maintaining the exemption under s43(2) outweighs that in the disclosure of the requested information for the reasons set out in his DNs and, in particular, his finding that the public interest in transparency and accountability of the government in the regulation of cryptoassets is already "satisfied to some degree by HMT's ongoing policy work" (para 50, DN of 12 October 2023).

The Appellants Response:

33.  The appeal does not challenge the application of section 35(1)(a) to the information requested. For the reasons stated in the Commissioner's reply, the exemption has a wide application due to its "relates to" construction. However, the appellant asserts the public interest lies in a greater range of material in the scope of the requests being released.

34.  Not all of the material in scope will be of equal sensitivity. It is accepted there may be for example, highly sensitive financial information which falls within both 35(1)(a) and 43(2) and would be fair to exempt. However, it is suggested this is likely to be a highly limited amount of information (for example, information on the profit margins of Binance) which could be redacted, with more of the remaining information provided. The redactions applied in this case appear to the Appellant to be overzealous.

35.  The Commissioner makes the point that in essence, lobbying material is not automatically exempt just because it is lobbying material, and there can be cases where there is a public interest in withholding this. The Appellant concedes this but argues that each case must be looked at on its merits, and in the practical context of UK lobbying rules as they stand.

36.  With reference to the section of Corderoy cited by the Commissioner the Appellant notes: "There may also be issues regarding lobbying. Lobbying is a legitimate activity that can benefit government decision making. However, there may be issues concerning the process of lobbying or influence of lobbyists. For example, if only certain lobbyists or interest groups have been given access to government and the opportunity to influence public policy has not been extended to others, then this increases the public interest in disclosure. This is especially relevant where the policy is still being formulated and there is still opportunity for others to present their views" and continues to observe that under current lobbying rules, there is a significant democratic deficit when it comes to lobbying. Major companies, through well-funded in-house or external lobbying teams who employ former political advisers and civil servants know who to talk to get their points best across, are a significant advantage when it comes to the practical process of lobbying.

37.  There is no register of actual lobbying activity in the UK, unlike other countries like Ireland where at least a summary of the arguments made are included in the register of each meaningful contact. This makes it very hard to work out who has argued for what ahead of a policy being introduced or holding influence on that policy to proper account.

38.  The Appellant further observed that in reality these sources of information as they stand are now often comically brief. While departments will list who their ministers have met, the short descriptions of these meetings are extremely vague. For example, in the case of numerous meetings held by Kwasi Kwarteng whilst he was serving as Business Secretary the description is merely cited as being "to discuss business". This register was also released only after a nine-month delay, reducing its value., which is common for this kind of disclosure. In other cases, ministers will forget they had meetings and have to update their registers when this comes to light, such as in the case of Lord Bethell in 2021. The disclosure also covers few senior civil servants. In other cases, ministers will forget they had meetings and have to update their registers when this comes to light, such as in the case of Lord Bethell in 2021. The only reliable route for a member of the public to access information about what a company has actually asked government in meetings is through FOIA. While lobbying is a legitimate activity, given the barriers to access to information about it, especially where those conducting the lobbying will sometimes be lobbying for their private interest, not the general public interest, there is an elevated public interest in transparency around this lobbying. FOIA is one of the few enforceable powers that can be used to address this democratic deficit.

39.  The Appellant stresses that at the time of the request, it was very clear that Binance was not a normal company as set out in his grounds of appeal. Despite this context being made clear, there was only one brief reference to relevant investigations in the Decision Notice.

40.  The Appellant observers that the fact that government was taking advice from such a company is something worthy of investigation and is at the heart of why he is trying to obtain this information.

41.  The Appellant notes also that the Commissioner further argues the public interest in the regulation of this area was "served in large part by the ongoing consultation and future response document." These documents, the Appellant argues are often short, highly narrow, anonymised, and do not reflect what the individual asks of companies have been.

The Hearing on 25^th February 2025.

42.   The Tribunal have had the advantage of an oral hearing on 25 February 2025 and a closed session where we directed all our concerns to Counsel for HMT and were placed in a well-informed position to consider in depth the issues and perhaps most importantly the public interest in disclosure of the withheld information. We were also provided thereafter with comprehensive written submissions by the Appellant and on behalf of HMT and deliberated on 18 March 2025.

43.  The Parties essentially continued to rely on their earlier submissions with some minor changes but as before the most significant remaining issue is the public interest balance.

44.  The Appellant further submits as follows:

a)      HMT cited the issue of the FCA regulatory activity around Binance was not really the main thrust of the requests and cited that as the FCA was an independent regulator, any attempt by Binance to lobby HMT over its regulatory issues with FCA was unlikely to succeed.

b)     While the FCA has day to day independence, it is a body sponsored by HMT. HMT sets the overall framework for financial regulation and can influence the FCA through legislation, statutory objectives, and regulatory perimeter changes.

c)      While Binance would have been unlikely to influence individual FCA investigations, lobbying could have had an effect on the more general regulatory framework to its benefit. He contends there is a very clear public interest in knowing what discussions were had related to the FCA in this correspondence.

d)     Additionally, he argues he has not identified anywhere publicly that the FCA publicly stated what its regulatory concerns were about Binance as referenced in this material. There is a clear public interest in investors and the public understanding what these concerns were, even, as HMT suggests, they were not eventually pursued. While Binance's criminal prosecution by the US Department of Justice fell after this request was made, The Appellant feels this is such a significant event that it must have some weight in this case, given some investigations were live when the request was filed.

e)      He notes that the FCA has not made substantive submissions in this case, despite having every opportunity to. This must inevitably weaken the strength of any concerns raised by the FCA about disclosure though he notes HMT no longer seeks to rely on Section 31 arguments.

f)       HMT argues that those willing to influence the consultation of cryptocurrency regulation were on an equal footing, and HMT had access to alternative viewpoints from other parties, weakening the public interest in disclosure.

g)     It is highly pertinent that Binance received ministerial access, when others didn't. Getting access to the minister inevitably means that a party's arguments are more likely to succeed, given the direct access to executive decision makers this provides. 

h)     The UK has a very weak lobbying transparency framework, which campaign group Transparency International has set out extensively. Given this lack of transparency, there is a strong public interest in knowing what parties who get elevated access did with that access.

i)       The gist provided shows that the material clearly constitutes lobbying and looks targeted to achieve a specific policy outcome (agreement by HMT to sponsor Binance's proposal, and a more forgiving regulatory environment). Disclosure is important to assess whether Binance was accurate in its submissions, and whether these submissions led to policy changes which could affect the public.

j)        I believe my submissions demonstrate that HMT (and the Information Commissioner) has taken a highly risk averse approach in this case, concerned solely with the public harms of disclosure without considering the public harms of non-disclosure that I have presented and here need not be disclosure of every line of each document, should a pressing section 35 or 43 argument have been made which I could not be a party to due to the near to hear them in the closed session. However, HMT has taken a blanket approach to redaction across the requested material, without properly justified reasons in all cases. 

45.  The Commissioner accords significant weight to the public interest in not disclosing confidential information regarding businesses and thereby potentially negatively impacting on policy development around financial regulation, in this case in particular surrounding cryptoassets. The Commissioner is mindful of the fact that the public interest as outlined is served in large part by the ongoing consultation and future response document, alongside regular government engagement across the financial services sector.

Information Withheld Pursuant to Section 35(1)(a) FOIA 2000

46.  Section 35(1)(a) provides as follows:

(1)    Information held by a government department or by the Welsh Assembly Government is exempt information if it relates to—

a)      The formulation or development of government policy,

b)     Ministerial communication,

c)      The provision of advice by any of the law officers or any request for the provision of such advice or any request for the provision of such advice, or

d)     The operation of any ministerial private office.

47.  The public interest underlying the exemption in section 35(1)(a) of FOIA is to preserve a safe space to debate live policy issues away from external interference and distraction.

48.  HMT issued its original responses to the request; it was undertaking a live consultation on the Future financial services' regulatory regime for crypto assets. This HMT maintain is a highly significant factor because, where policy development is ongoing, the case law is clear that it is highly unlikely that the public interest will favour disclosure and a good reason would be required to justify departure from that general position: Department of Health v Information Commissioner (EA/2018/0001, EA/2018/0002), [88].

49.  HMT submits that disclosure of the requested information would substantially undermine the safe space needed for policy development and result in a real chilling effect on future policy development:

a)      HMT relies on information provided by a range of stakeholders to better understand the impact of policy proposals on different sectors of the economy. This process of engagement and feedback is central to economic policy decision-making. Meetings with third parties provide a crucial commercial perspective on delivery of government policy. The "strong public interest" in government engaging with business representatives has been recognised in the case law (e.g. Department of Business, Enterprise and Regulatory Reform v Information Commissioner and Friends of the Earth (EA/2007/0072), [119]);

b)     if it had been disclosed, this information would likely have attracted media attention which could have disrupted the policy-making process by pre- judging the issues on which views were sought through the consultation;

c)      the requested information contains open and frank views expressed by Binance. Although HMT recognises that such contributions can never be made with a guarantee of confidentiality, the Tribunal will be able to see for itself the candour with which Binance expressed itself. Disclosure of this information could deter stakeholders from engaging with HMT in a similarly open manner which would be detrimental to the policy-making process;

d)     the withheld information makes reference to cryptoasset regulation in other jurisdictions. The UK is in competition with other jurisdictions to attract cryptoasset firms and therefore the government's policy ambition to become a global cryptoasset technology hub could be undermined by disclosure of this information.

50.  The policy area was the Government's approach to cryptoasset regulation, and the position of the UK as a place open for cryptoasset business, and the approach to anti- money laundering and counter-terrorism and financing regulations. The policy considerations under discussion therefore were the balance between technological and financial progress via the greater proliferation of cryptoassets and the potential fiscal stimulus that might bring, versus the need for security of assets, protection of consumers, and the avoidance of abuse of the technology.

51.  As such, the public interest balancing exercise in this case really comes down to whether the safe space for policymakers should be preserved or whether there should be transparency. The Appellant puts forward compelling arguments for transparency but ignores the following:

a)      That more information is likely to be received in circumstances where the information is provided on the understanding that it will not be disclosed to the public as a matter of course;

b)     That more information being provided in a frank and open manner is likely to lead to improved policymaking;

c)      That, in the present case, the Government clearly had in mind the particular biases and agendas of Binance when putting forward its views;

d)     That allowing for a safe space in the formative stages of policymaking allows for ministers and officials to properly interrogate the information and consider it alongside information provided by those with opposing views.

52.  Therefore, HMT submit the balancing exercise really comes down to the question of whether better policies in this area are more likely to be derived at by there being a public debate on the issues when the policy is at a formative stage or via more private fora. The Appellant suggests that HMT have applied a blanket approach. It is submitted by HMT that this is not a fair analysis of the careful consideration HMT have given to disclosing and withholding the information. This careful consideration is, HMT argue, demonstrated in the approach HMT have taken to disclosing parts of documents not captured by the exemption, or where the exemption applies but the public interest in disclosing the information requires the information to be disclosed. The Commissioner agreed with HMT's approach.

53.  There is also the separate issue of allowing the UK to be competitive in this area, an aim which is damaged by the public, which includes other countries, having access to the discussions which feed into the policymaking in this area.

54.  In order to obtain the widest range of views and receive the most frank and open views from stakeholders, it is submitted that it is preferable to allow exchanges such as Binance to give information to the Government on the understanding that the information would not be shared more widely with the public. Were their contributions to be made public there is a risk of journalists such as the Appellant writing articles criticising their lobbying behaviour, or merely members of the public accusing them of underhand activities or of trying to influence Government policy. That behaviour is of course entirely appropriate and part of the freedom of expression enjoyed by journalists and the public. However, where that public debate on policymaking is likely to prevent such companies from wanting to engage with the Government on this level, HMT submit that the public interest lies in maintaining the exemption. HMT submit there is a real risk to the safe space being impinged by such communications being made more widely available.

55.  As to allegations of lobbying, HMT submit the fact that something constitutes lobbying does not automatically mean that the information should be disclosable. It is important, they argue to consider the case law in detail as opposed to making generalisations.

56.  In the present case, Binance were not being heard at the exclusion of other voices as there was an active consultation at the time. Binance's views were therefore being considered as part of a wider picture. It is submitted that this significantly limits the concerns expressed by the Tribunal in Corderoy.

57.  Further, the Appellant suggests that Binance were given direct access to the ministers where others were not. This HMT maintain is not correct, as the register of ministerial meetings, which is published online and is readily available to the public, demonstrates. There were also lots of ministerial meetings from January 2022 to June 2023 with other stakeholders and the names of the companies or individuals met have been published.

58.  The examples of lobbying in this case are what might be described as soft or indirect lobbying in that Binance is presenting cryptocurrency in a positive light, which is of course in their interests. That is not to say that the Government does not want to hear different sides of the debate regarding the potential risks and rewards of cryptocurrency. The policies generated by the Government are likely to be improved by hearing a wide range of views, whether self-serving or not.

59.  The Appellant places great reliance on the idea that the FCA investigation may be in anyway influenced by the correspondence/meeting with HMT. It is submitted by HMT, firstly that the closed material entirely refutes any such suggestion. Secondly, it is submitted that any potential influence is a fanciful suggestion; the FCA is separate from HMT and exercises its regulatory powers without external influence from HMT.

Information Withheld Pursuant to Section 43(2) FOIA 2000:

60.  Section 43(2) provides as follows:

(2) Information is exempt information if its disclosure under this Act would, or would be likely to, prejudice the commercial interests of any person (including the public authority holding it).

61.  In relation to section 43(2), HMT acknowledges that crypto assets are a volatile and high-risk investment category and therefore there is a public interest in greater understanding of the government's approach to regulating this sector. HMT also acknowledges that Binance had, prior to its response to the requests, been subject to regulatory action by the Financial Conduct Authority.

62.  However, HMT submits that there is a strong public interest in protecting Binance's ability to compete in the market:

a)      the information withheld under this exemption is confidential and commercially sensitive for Binance and could therefore be exploited by its competitors in the cryptoexchange market. As one of the largest operators in that market, a negative commercial impact on Binance could have caused a highly significant market distortion;

b)     the crypto asset market is highly volatile and recent events (most notably the collapse of FTX, the largest cryptoexchange globally at the time) have exposed the structural vulnerability of some business models in this sector;

c)      the withheld information could be perceived as reflecting on HMT's views on Binance and would therefore be likely to have a significant impact on the firm's customer confidence and commercial standing.

Conclusion:

63.  The Tribunal have fully considered the public interest test  which we do consider to be extremely finely balanced and conclude that given the risk to consumers of this type  of high risk investment  that the arguments put forward in respect of safe spaces for the development of government policy  in oral and written submissions by HMT, while not at first sight compelling, are undoubtedly strong. On balance, on the facts now before us, we consider that the extent and nature of the information that has already been disclosed is sufficient for us to decide that the public interest test lies just in favour of withholding the remaining information. We do not accept that HMT have adopted a blanket approach as suggested by the Appellant. 

64.  In relation to commercial interest as assessed by the Commissioner - we accept the Commissioner, having perused the withheld information and HMT's arguments (particularly those which cannot be reproduced in this Judgment), considers that HMT's concern is credible and that a position that the envisioned prejudice would be likely to occur is reasonable. The Commissioner is satisfied that the chance of the envisioned prejudice occurring is more than a hypothetical possibility and poses a real and significant risk. In all the circumstances of the evidence before us we cannot find this is an error of law in the exercise of his discretion.

65.  The Commissioner considers that there is a clear public interest in ensuring that the fairness of competition in the financial market is not undermined. He considers that this outweighs the public interest in transparency and accountability of the government in financial regulation, particularly as the public interest is satisfied to some degree by HMT's ongoing policy work. Again, on all the evidence now before us we cannot find this amount to an error of Law in the exercise of his discretion.

66.  We accept that in principle, the combined public interest reflected in sections 35(1)(a) and 43(2) may be aggregated when carrying out the public interest test: Department for Business and Trade v Information Commissioner and Montague [2023] EWCA Civ 1378, [37]. In this regard, HMT submits that the combination of harm to the policy development process and harm to the commercial interests of a key contributor to that process clearly outweigh the public interest in disclosure of this information.

67.  HMT made extensive closed submissions with a detailed analysis of each of the withheld items and data which highlighted the essential elements of the exemptions relied upon and the public interest in non-disclosure which have persuaded us that the balance of public interest just lies in favour of non-disclosure of the withheld information.

68.  Further and in light of all the evidence now before us, and in particular with regard to the extent and nature of the information which has been disclosed, the Tribunal now accept that the aims of transparency are achieved with this disclosure and we are satisfied that the public interest balance lies in favour of withholding the rest of the information.

69.  Accordingly, we must dismiss the appeals before us.

 

Judge Brian Kennedy KC                                                                  28 March 2025.