Malcolm Rifkind and Jack Straw were unlucky enough, or silly enough, to get caught. But just because hundreds of MPs and Lords have paid jobs advising companies, doesn't excuse them. It makes it worse.

When the MPs expenses scandal broke in 2009 the immediate defence of many MPs was that what they were doing was all 'within the rules of Parliament'. But that didn't make it right. Nor did it alter public opinion. It took a while for the penny to drop, but finally, MPs realised that their behaviour - moat cleaning, duck housing, wisteria trimming, second homing all on the public purse – was unacceptable to the wider public. Finally, the bubble burst.

Today, we have arrived back at the issue of MPs and their second (third, fourth) jobs. The two MPs at the centre of the sting, Malcolm Rifkind and Jack Straw, both lawyers, conducted their own defence this morning. Both appear to be using the same playbook. It goes something like this: 

  1. 'Anything I said I would do has been taken out of context and anyway, it's all perfectly innocent.'
    From the few clips released by the programme makers ahead of tonight's Dispatches, I suspect this defence will fairly rapidly fall apart as the undercover films are aired. Some of it is truly shocking, whether Jack Straw's 'charm and menace' tactics, or Rifkind who is clearly under the impression that he doesn't have a job or a salary as an MP.

The Telegraph is committing 'a form of fraud on its readers'. That is the damning verdict of journalist Peter Oborne, who until yesterday was the Telegraph's chief political commentator. Why? Because, according to Oborne: 'It has been placing what it perceives to be the interests of a major international bank above its duty to bring the news to Telegraph readers.'

Oborne accuses the paper of deliberately suppressing stories about HSBC's involvement in tax dodging in order to keep the bank's 'extremely valuable' advertising account.

‘It has long been axiomatic in quality British journalism that the advertising department and editorial should be kept rigorously apart. There is a great deal of evidence that, at the Telegraph, this distinction has collapsed,’ he wrote in an article explaining why he quit on the OpenDemocracy website.

Oborne said the paper had discouraged stories critical of HSBC since the start of 2013, when the bank suspended its advertising with the paper following a Telegraph investigation into accounts held with HSBC in Jersey. He said one former Telegraph executive told him HSBC was ‘the advertiser you literally cannot afford to offend’.

Interference by management in stories about the bank was happening ‘on an industrial scale’ according to Oborne. Last week amid front page splashes and an international outcry over HSBC’s latest Swiss tax transgressions, ‘you needed a microscope to find the Telegraph coverage’ he said. Another article written last year by the paper’s former banking editor about a £70bn capital ‘black hole’ in HSBC Hong Kong’s accounts, had mysteriously disappeared from the website. And an attempt by Oborne to publish a story on HSBC’s sudden closure last summer of bank accounts belonging to well-known British Muslims came to naught – with an executive eventually admitting to him that ‘there was a bit of an issue’ with HSBC.

World HQ of banks HSBC and Barclays
World HQ of banks HSBC and Barclays

There has been an international outcry over the leaked HSBC files, which provide evidence that the bank’s Swiss arm helped wealthy clients put millions of dollars worth of assets out of the reach of the tax authorities. Naturally, politicians from all parties have responded by committing to holding anyone found guilty of tax evasion accountable for their actions.

There has also been disbelief and growing scrutiny of government watchdogs, such as Britain’s tax authority HM Revenue & Customs (HMRC) for failing to properly investigate the matter. According to Danny Alexander, the Liberal Democrat chief secretary to the Treasury:

We quite rightly prosecute and often jail people guilty of damaging our society through conventional crime and antisocial behaviour. The way we treat systematic tax evasion should be no different. If that means jail for offenders and those that conspire with them, then so be it.

Such calls to punish elites are indeed laudable and urgent. Yet this issue runs deeper than a few bad apples. Instead it touches on the fundamental problems of corporate power and political plutocracy plaguing our economy and politics. While punishing privileged wrongdoers may be just and feel good, this should not distract from the larger need to change the very system giving birth to these actions.

The London headquarters of some of the world's biggest banks in London
The London headquarters of some of the world's biggest banks in London

The revelation in leaked bank files that HSBC’s Swiss banking arm has helped wealthy customers put millions of dollars worth of assets out of the reach of the tax authorities confirms the way in which the use of tax havens has become commonplace.

In the globalised modern world, the vast majority of wealthy individuals and medium-sized and large corporations habitually seek ways to avoid taxes.

As Richard Murphy, Christian Chavagneux and I researched for our book, Tax havens: how globalization really works, we discovered that tax havens are an integral node of globalised capitalism. They are just part of the way business is conducted these days. And the leaked HSBC files are a prime example of this in action.

According to the leaked files, HSBC maintained 30,000 accounts holding almost $120 billion of assets in its Geneva branch between 2005 and 2007. The files appear to show that the largest proportion of account holders were Swiss, holding altogether about $31 billion. They also show 8,883 UK citizens holding $21.7 billion, 1,138 Venezuelans holding $14.7 billion, Americans holding $13.7 billion, French with $12.5 billion, Israelis with $10 billion and even the Palestinian authority had 55 holders with $150m.

Lessons to be learned

There are a number of lessons to be learned from these leaks. First, foreign nationals of many countries are allowed to maintain accounts in foreign banks, but typically they are required to declare those accounts on their tax return. Only their national inland revenues would be able to confirm if they had done so.

Considering that HSBC Geneva did not provide a particularly competitive savings rate, and the report prepared by the International Consortium of Investigative Journalists which reveals the secret Swiss accounts, presents a picture of secrecy and deception, it is not unreasonable to suspect that a good portion, if not the vast majority of these accounts, have had something to do with reducing their clients' tax obligations.

Tuesday, 10 February 2015 11:08

The problem with lobbying laid bare

By

The Lobbying Act has solved nothing and, although barely a year old, it is already a thoroughly discredited piece of legislation.

This is just one of many conclusions of a new study into lobbying in the UK by Transparency International. Lifting the Lid on Lobbying, which is being launched in Parliament tonight, is a thorough look at what has happened since David Cameron warned in 2010 that lobbying was the 'next big scandal waiting to happen'.

At the time, Cameron promised to 'sort it out'. The report rather pointedly details some of the lobbying scandals since Cameron made this pledge, involving ministers, MPs, Lords, and generals. It shows that no sector, or issue is immune, whether its the NHS, airport expansion, defence, food regulation, alcohol policy, tax, or tax avoidance. 

Perhaps the most damning section, however, is the annex at the back on 'Permissible behaviour in the UK under the current rules', which is a useful summary of what legislators, lobbyists, and wealthy donors can get away with in this country. For example, 'All UK legislators and all but the most senior civil service officials may keep lobbying meetings secret, unless a specific Freedom of Information request is submitted' (and even then there's no guarantee); 'ministers are not obliged to declare lobbying meetings if they are classified as taking place in their private time or constituency roles'; 'All lobbyists in the UK may keep information on whom they have lobbied and on what issues they have lobbied concealed from the public'. Its helpful to have it written down. 

And this is where it leads: 90 per cent of UK respondents believe our Government is run by a few big entities acting in their own interest (according to a recent TI poll). 

I dare Cameron to stand up now and claim he's 'sorted it out'.

 

Scottish Parliament
Scottish Parliament

Lobbying disclosure in Scotland is now back on the agenda. The Scottish Parliament’s Standards Procedures and Public Appointments (SPPA) committee has at last reported on its consultation on a lobbying register for Holyrood. This report should be welcomed by the growing number of organisations pushing for lobbying transparency.

The headline news is that a lobbying disclosure system will be introduced - at some point in the future... and possibly after another bout of government led consultation, though it is hard to conceive what added value yet more consultation can deliver. The onus is now very much on a legislative proposal from the Scottish government. 

The SPPA deserve much credit for their careful handling of this issue, and the painstaking efforts taken to ensure their inquiry process and recommendations strike an appropriate balance between promoting transparency and facilitating participation at Holyrood. 

Some of the recommendations that jump out from their report include an explicit recognition that the purpose of the proposed register is to ‘detail lobbying activity as opposed to simply being a list of names of lobbyists. The register should detail who is lobbying, how and why’. This is eminently sensible and proportionate. However, to make a meaningful contribution to transparency and accountability this needs to be a live rather than historical record of lobbying – such information is only useful if it can be used by all stakeholders to understand where influence is being brought to bear.

A new report, published the same day the EU Commission-Parliament launched a joint lobby transparency register, reveals the weakness of allowing companies and lobbyists to choose what data they disclose.

New research published by the Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) shows how the voluntary approach to EU lobby transparency regulation fails to provide citizens with an accurate picture of the lobby scene in Brussels.

Some of the main groups that are actively lobbying the EU institutions have still not registered in the EU's Transparency Register. These include:

  • Financial lobbyists such as Standard & Poors, City of London Corporation and Credit Suisse
  • Lobby consultancies, such as EUTOP Brussels
  • Law firms such as Covington & Burling and Freshfields Bruckhaus Deringer
  • Major corporations such as Electrabel, Anglo American and General Motors.

Meanwhile, too many of the register's entries are unreliable: lobby firms and law firms fail to disclose clients - which is a clear breach of the rules for the register - or they mask their identities behind meaningless acronyms. In addition lobby spending and lobbyist numbers are often under-reported, and there are far too many implausible entries. For example:

It's been a year since the Lobbying Bill passed into law – amid howls of protest from charities, derision from transparency campaigners, and warnings from Parliament. Is it delivering on its promises to clean up politics?

First, let's recall what the government said the legislation was going to do. It all began with a pledge made in the Coalition Agreement of May 2010: a commitment to 'regulate lobbying through introducing a statutory register of lobbyists and ensuring greater transparency.'

Four years (and one too many lobbying scandals) later, the government came up with the Lobbying Bill. Except, by this stage, it had ballooned into the ‘Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Bill’. Out of nowhere the Coalition had decided to couple a transparency measure targeting professional lobbyists with regulation of charities and trade unions. It had become ‘the gagging bill’.  

Not only that, the register of lobbyists as drafted in the Bill was a sham. The government’s stated aim of the register, according to Andrew Lansley who pushed it through for the Tories, was ‘to make it clear who is lobbying the Government and for whom’. You'd have a better idea of who is lobbying government if you were to stand on the corner of Whitehall with a clipboard.

Is the Health Secretary trying to put distance between himself and NHS England?

This morning Health Secretary Jeremy Hunt told NHS leaders that the service must undertake a ‘fundamental rethink’ of how it spends its £110bn budget.

He has warned that the NHS needs to save £10bn a year by using fewer temporary staff and management consultants.

Just how much NHS leaders are spending on, for example, management consultants is something that Hunt knows, but we don’t... yet. 

NHS England, unlike all other government agencies, does not make public how it spends our money. 

A petition launched this week, which has so far been signed by 68,000 people, is demanding that NHS England publishes its spending data without delay. (It said it would publish its receipts in September, then October. It has yet to). This would reveal how much of NHS funds are going on management consultants, lawyers, accountants, PR campaigns etc. 

Is Hunt trying to distance himself from NHS England by calling now for a “fundamental rethink” of how it spends our money? 

Hunt cannot absolve himself of responsibility, however. It was the reforms brought in by this government that created NHS England, stewards of the NHS budget. The policies it has since pursued have been set out and encouraged by the Coalition.  

Whatever NHS England is doing with our money is Hunt’s responsibility. We just now need to find out what Hunt knows and we don't. Sign the petition here. 

 

Wednesday, 12 November 2014 01:44

BICOM airbrushes Simon Barrett

By
Howard Condor, founder of Revelation TV
Howard Condor, founder of Revelation TV


Last week Spinwatch reported on the appointment of Simon Barrett as the new communications director of the Britain Israel Communications and Research Centre (BICOM). The following day the lobby group's website was updated with Barrett now listed as its head of media. The staff page now carries this description of their newest employee:

'Simon Barrett has more than ten years’ media and journalistic experience specialising in issues relating to the Middle East. He has organised high profile conferences on security issues and worked on significant news stories in the national and international press. As a broadcast journalist he produces and presents his own TV programmes such as The Middle East Report in which he has interviewed Ministers of State, MP’s, Ambassadors, Middle East experts and high profile Israeli guests. He also hosts a monthly political discussion programme from the European Parliament called The European Report.'

The description fails to mention that Barrett's Middle East Report programme appears on Revelation TV - an evangelical Christian channel founded by 'Britain's first televangelist', Howard Conder. The channel's website carries a statement on the recent conflict in Gaza declaring that:

'The Scriptures tell us that the Jews are the "apple of God’s eye"... In these end times, God is working out His purposes in the Middle East. We are seeing Bible Prophecy fulfilled before our eyes and the State of Israel is right at the centre of it.'

Of course, Barrett is not responsible for the views of the founders of Revelation TV, but these comments chime rather well with his description of the occupied West Bank as: “the Biblical heartland of the Jewish people promised to them by the God of Abraham, Isaac and Jacob”. In a visit to Israel in 2013 Barrett remarked that: 'You really sense that God's hand is upon this nation... He loves this people, he loves this land – he's fighting for it. And it [Israel] is a beacon of light in the Middle East.'

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