Category Archives: Lobbying

A reader comments. “The FT seems to be taking the prospect of a Labour government seriously”

Over the next week, the Financial Times will be examining the impact of a prospective Corbyn government on the UK economy as memories of the financial crisis have reinforced the public’s perception of a system rigged against them – despite the ongoing exposures of the excesses of the financial services industry.

 FT: “A Corbyn government promises a genuine revolution in the British economy”

It looks at the plans already announced, describing them as “breathtaking in scope”. These include:

  • the nationalisation of rail, water, mail and electricity distribution companies,
  • significantly higher taxes on the rich,
  • the transfer of 10% of shares in every big company to workers (with a maximum annual £500 dividend,
  • reform of tenant rights, including a “right to buy” for private tenants,
  • borrowing to fund public investment.
  • a four-day week,
  • pay caps on executives,
  • an end to City bonuses,
  • a universal basic income,
  • £250bn to fund a National Investment Bank to build 1m social homes,
  • an increase in the minimum wage,
  • higher income tax for those earning over £80,000,
  • a new “excessive pay levy”,
  • a £5bn-a-year financial transactions tax,
  • a corporation tax rise from 19p to 26p in the pound,
  • the break-up of the Big Four auditors,
  • a ban on all share options and golden handshakes,
  • curbs on the voting rights of short-term shareholders,
  • the public naming of all workers on over £150,000 a year,
  • the nationalisation of parts of the struggling steel industry,
  • opposition to the Trident nuclear deterrent and
  • delisting of companies that fail to meet environmental criteria from the London Stock Exchange.

Thatcherism reversed

Mr Corbyn’s supporters see rebalancing of control from shareholders, landlords and other vested interests to workers, consumers and tenants, “reorienting an economy that works for those at the top but not for the young, the unemployed or those struggling on zero-hours contracts” as “fairness”. But to political opponents, high-earners, business owners, investors and landlords, it is alarming.

On September 1st, the FT declared: “A Corbyn government is no longer a remote prospect. With UK politics scrambled by Brexit, the landscape is unrecognisable”.

Lord David Willetts, a former Conservative cabinet minister who now chairs the Resolution Foundation think-tank, comments: “Brexit is so radical and such a massive gamble, breaking a 40-year trading arrangement, that it’s hard for Tories to say to people ‘don’t gamble on Labour”. They just think: ‘who’s the gambler?’”

Brexit as an opportunity: in his speech to the 2018 Labour conference, Shadow Chancellor John Donnell noted: “The greater the mess we inherit, the more radical we have to be.” 

Lord Bob Kerslake, former head of the civil service, who is helping Labour to prepare for government, believes Labour’s manifesto pledges are indeed ‘radical’ but can be delivered. He realises that there are questions about how much of the Corbyn-McDonnell policy platform can be carried out if there is a minority government and stresses the need to make significant progress on it in a first term.

As the FT wrote:Polling data show that voters currently evince little enthusiasm for a Corbyn government. And yet the existential shock of Brexit, combined with his appeal to younger voters and families fatigued by nearly a decade of austerity, could still deliver the unexpected”. 

 

 

 

 

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Small modular nuclear reactors: on the ‘inside track’, Lord Hutton

People on ‘the inside track . . . wield privileged access and disproportionate influence’ according to the Parliamentary Public Administration Select Committee [PASC].

Lord John Hutton: a brief chronology

2008-9: Secretary of State for Defence

2010: Joined the board of US nuclear power company Hyperion Power 

2011: Appointed Chair of the Nuclear Industries Association

2010- 2015, became Chairman of the Royal United Services Institute.

2014 -2018: was a defence advisor/consultant with US arms firm, Lockheed Martin

2017: Became chairman of Energy UK, a trade association for the GB energy industry with a membership of over 100 suppliers, generators, and stakeholders with a business interest in the production and supply of electricity and gas for domestic and business consumers

SMR: artist’s impression

2017: The UK SMR Consortium is the trade association for the GB energy industry. Moribund? Its website has only five news entries, all dated Sept 2017. Lord Hutton’s foreword to its 2017 report (cover below): “A UK SMR programme would support all ten ‘pillars’ of the Government’s Industrial Strategy, and assist in sustaining the skills required for the Royal Navy’s submarine programme.”

2018: A report by the Expert Finance Working Group (EFWG), convened by BEIS in January, recommended that: “For technologies capable of being commercially deployed by 2030, HMG should focus its resources on bringing First of a Kind (FOAK) projects to market by reducing the cost of capital and sharing risks through:

  • assisting with the financing of small nuclear through a new infrastructure fund (seed funded by HMG) and/or direct equity and/or Government guarantees; and
  • assisting with the financing of small nuclear projects through funding support mechanisms such as a Contract for Difference (CfD)/ Power Purchase Agreement (PPA) or potentially a Regulated Asset Base (RAB) model while maintaining the supply chain plans required for larger low carbon projects”

2019: a July commitment to initial funding for SMRs is welcomed by the UK SMR Consortium (Rolls-Royce website)

“Our consortium warmly welcomes the Government’s decision to advance our new innovative small modular reactor programme. The government has today committed £18 million of initial funds to support the development of this power station as part of the Industrial Strategy Challenge Fund, subject to final confirmation in early autumn. Our design will bolster the UK’s ambitions to tackle climate change”.

The next step? Final confirmation of taxpayers’ funding for the small modular reactor programme in early autumn.

 

 

 

 

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Jeremy Corbyn’s pledge to “drive big money out of democracy”

In Bolton on Sunday (18.8.19) Mr Corbyn announced a new policy to ban donations or loans to parties from non-doms and those not registered for tax in Britain. He said:

“People are right to feel that politics doesn’t work for them. It doesn’t. Boris Johnson and the Conservative Party are captured by big donors, who are corrupting democracy. If you have the money you can get access to ministers. Look at the fracking industry. But if you wish to protest against the frackers because it will damage the environment, you can’t get a hearing”.

Lamiat Sabin (right) reports that Cabinet Office shadow minister Jon Trickett is working on a comprehensive plan to stop big money “buying up our democracy” before outlining further plans in the autumn and that Mr Corbyn revealed details of donations to PM Boris Johnson – nearly a million pounds – from hedge funds and bankers.

In all: £953,056.47 came from hedge funds and bankers in donations and income over the last 15 years, (Labour’s analysis of Electoral Commission data and register of members’ interests entries) and contributions of up £730,000 to him or Conservative Associations in his Henley and Uxbridge seats. Some detail:

  • speeches to banks in Europe and the US: £233,056;
  • £100,000 received in June from Ipex Capital chairman Jonathan Moynihan, who also chaired the Vote Leave finance committee;
  • £10,000 in June from hedge fund manager Robin Crispin Odey, who is short-selling the sterling in expectation of a slide in the value of the pound in the event of Mr Johnson’s no-deal Brexit — according to Labour;
  • Johnson flown to New York and paid £94,507.85 for a two-hour speech at the multibillion-dollar hedge fund company Golden Tree Asset Management and
  • £88,000 from hedge fund boss Johan Christofferson from direct donations or contributions to Uxbridge Conservative Association.

He said: “We have to stop the influx of big money into politics. Politics should work for the millions, not the millionaires. Labour is the party of the many, not the few and we do things very differently. We are funded by workers through their trade unions and small donations, averaging just £22 in the last general election. That’s why we will be able to drive big money out of our democracy.”

 

 

 

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Yet another Thatcher-privatised-off-shored-debt-laden industry is seeking subsidies

Most UK care homes were managed by local authorities until Margaret Thatcher ‘reformed’ the system in the 1980s; now just 8% are said to be under state control.

In April, the shadow minister for social care and mental health said, There are major concerns about the debt-driven business models of some companies in the care sector and the role of foreign private equity firms and hedge funds in deciding the future care arrangements for large numbers of vulnerable people. The real price of this instability and underfunding is now being paid by the 17,000 older people in Four Seasons care homes and their families who face an uncertain future”.

The Bracknell care home and Kingsmills care home (above) are two of more than 300 owned by Four Seasons Health Care. In May, administrators were called in by the firm which has struggled to repay its debts.

All four of Britain’s biggest care-home businesses have been up for sale in the past year and have failed to secure deals.

recent report by the Association of Directors of Adult Social Services reported that almost half of councils have seen the closure of domestic home care providers in their area in the past year and a third had seen residential care homes closed, collectively affecting more than 8,000 clients and residents.

Gill Plimmer reports an estimate by Care England, which represents the independent providers, that around £4bn is needed from the government to stabilise the sector.

In addition to sharp cuts to social care budgets due to the government’s austerity policy, private care providers have had to deal with an increase in the minimum wage and rising food costs.

Ms Plimmer comments that understanding where taxpayers’ money is going is essential if Britain is to resolve the funding crisis in elderly care, adding, “This is made difficult by the companies’ complex, multi-layered offshore private equity structures”.

Nick Hood, debt restructuring adviser at Opus, the social-care analysts, said, “We don’t know whether taxpayers’ money is going to the private equity owners or the financiers, or indeed how much is being paid in cash and how much rolled up on the debt”.

He pointed out that the care companies’ debt interest payments which average £4,800 per bed per year, contributed to overall losses at the companies of £900m from 2015 to 2017, adding:

“The figures showed that the “debt-laden model, which demands an unsustainable level of return, is completely inappropriate for social care. Hundreds of millions of pounds that could be going into improving facilities and care are being sucked out of the industry every year to fund the debt”.

image

and reality

Some question the whole concept of residential care as inspections by the Care Quality Commission, which oversees provision of social care, find that some homes shamefully neglect residents – citing here an establishment owned and controlled by a US property investment group.

 

 

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FT highlights corporate financial rewards for MPs, April 2018-April 2019

In 2009 this site was set up to report on the distortion of policy-making by those on ‘an inside track, largely drawn from the corporate world, who wield privileged access and disproportionate influence’ according to a 2009 report by the Parliamentary Public Administration Select Committee [PASC].

Tactics covered, such as the ‘revolving door, rewards for failure, widespread behind-the-scene lobbying and party funding, continue to block effective action addressing the social, environmental and economic challenges facing this country.

It became common knowledge, with the growth of social media, that those on the ‘inside track’ are skewing parliamentary decision-making and revelations of this corruption are now accepted as the norm. Therefore, after December 14th 2013, individual examples of this practice were no longer listed.

Today, award-winning journalist Owen Walker has once again highlighted the close relationships between politicians and investment fund managers

Mr Walker is a commissioning editor for the Financial Times, selecting and commissioning writers to write specific articles. He has previously edited specialist FT publications on corporate governance, retail investment and pension scheme management. Barbarians in the Boardroom, his book on activist investors, was published in June.

They bring stardust – really?

Last May, Owen Walker (right) quoted David Pitt-Watson’s explanation. This visiting professor of finance at Cambridge Judge Business School said that much of the appeal of recruiting former politicians is the stardust they bring.

He also pointed out the down-side: “If you take up demanding roles in addition to being an MP, your constituents are going to be asking ‘do you not already have a full-time job?’ “

Insuring against loss of office is nothing new; Mr Walker notes that every UK chancellor since 1983 has taken up a position in investment management after leaving the Treasury, giving names and dates.

In today’s article he records that asset/investment managers paid MPs at least £126,000 in speaker fees, thousands of pounds’ worth of hospitality and more than £110,000 for advice during the year April 2018-April 2019. Readers may read names and amounts by clicking on the link above.

 

 

And now it’s 2019 – time for change!

 

 

 

 

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Disloyal, nakedly ambitious, Watson further assists the media campaign against his decent, honest leader

 


Francis Elliott and Kate Devlin report, in the Times, that Tom Watson declared “I am not Jeremy’s deputy” as he sought to distance himself further from the Labour leader.

The ‘badge of shame’ misleading/mischief making headline – not the first spotted in this newspaper – is belied by the text. Watson actually described the departure of Luciana Berger (MP for Liverpool Wavertree) as a “badge of shame”.

Watson as compassionate hero

He told the Emma Barnett programme on BBC Radio 5 Live: “It is a badge of shame that Luciana Berger, a bright young female pregnant MP, was bullied out of her own constituency by racist thugs. I’m not putting up with it. I owe it to the 500,000 members of the party to defend their integrity against claims that we are a racist party or we are not dealing with racism.”

He repeated similar charges in Sky News – close to crocodile tears as he ‘feared’ that more MPs would leave the Labour Party.

And confirms another subversive move:  his plans to arrange a group of MPs away from the shadow cabinet to create their own policies.

 

 

 

 

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Cash or cashless? Vested interests strive to win the argument

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Charles Randell, chair of the government’s Payment Systems Regulator asks a pertinent question:Should access to such a basic financial service be universal, or commercially driven?”

Cashless: “Digital payments are clearly the future”: a spokeswoman for digital payment company Square

One protagonist, Helen Prowse, a spokeswoman for digital payment company Square, spoke at a debate held by Monzo, a London-based fintech startup. “Digital payments are clearly the future.” She continued: “In the UK, plastic payment cards are the most popular way to buy things. Only about 30% of transactions use paper notes and coins, The ratio is already at 15% in Sweden, which will become effectively cashless in a few years’ time”. Quartz journalist John Detrixhe appears to agree. He gives several reasons for ‘getting rid’ of cash:

  • When shops switch over to digital money, their workers are less likely to be subject to violent robbery.
  • It can also be faster and cheaper to process than notes and coins.
  • Cash helps to enable the underground economy through tax evasion as well as illicit finance.

But G4S issued a report (April ’18) showing that cash circulation has increased

G4S which transports, process, recycle, securely store and manages cash published the World Cash Report in April 2018.  It surveyed 47 countries covering 75% of the global population and over 90% of the world’s GDP. The findings show that demand for cash continues to rise globally, despite the increase in electronic payment options in recent years; cash in circulation relative to GDP has increased to 9.6% across all continents, up from 8.1% in 2011.

The report highlights the variety of payment habits in different regions. In Europe 80% of point-of-sale transactions are conducted in cash, while in North America, where card payments are most regularly used, cash use still accounts for 31%. In Asia the rise of online purchases does not mean that cash is taken out of the equation, with more than 3 out of every 4 online purchases in a number of countries paid for by cash on delivery.

Access to Cash Review: cash is “an economic necessity” for around 25 million people in Britain

Natalie Ceeney (right), a successful civil servant who is now non-executive chair of Innovate Finance, chaired the independent Access to Cash Review, funded by Link, the UK’s biggest network of cash machines. She said “The issue is that digital does not yet work for everyone.”

The review indicated that physical notes and coins are “an economic necessity” for around 25 million people in Britain, and nearly half of people surveyed said a cashless society would be problematic for them. ATMs and bank branches are under particular pressure in rural communities, where broadband and mobile service is unreliable or unavailable. Next month, the review plans to publish its recommendations on how to deal with declining cash availability.

Nicky Morgan, chair of the UK’s Treasury Committee, said recently, “Whilst cash may no longer be king, it continues to play an important role in the lives of millions. So what we’ve heard today from the PSR should set alarm bells ringing. It’s clear that the whole way that people access their cash via ATMs is starting to fail. With the way that people access their cash seemingly on the precipice of collapsing, the government can’t just bury its head in the sand. . . .”

And what will happen in a cashless society when electronic systems malfunction – as machines do – when the mobile phone cannot get a signal, when cable sheaths fail or when someone accidentally damages a phone cable?

 

 

 

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Gove ‘pledges’ cheaper, unlabelled, gene-edited food in his Brave New World

At a time when apprehensions about low-quality food entering the country post Brexit are rising, the Times reports that Michael Gove, the environment secretary has announced that “Britain will lead an agricultural revolution with the use of gene editing”.

In July, after hearing scientific evidence that gene editing “causes many profound mutations and DNA damage”, the European Court of Justice ruled that food resulting from genome editing would be regarded as genetically modified, which is outlawed in Europe.

The Country Land and Business Association (CLA) is underwhelmed

Disregarding this science-based evidence, Gove pledged, at yesterday’s CLA meeting in Westminster, that scientists and farmers would be freed from this European court ruling. The first report seen however, makes no reference to this exciting prospect, whatsoever.

Genome editing, or genome engineering is a type of genetic engineering in which DNA is inserted, deleted, modified or replaced in a specific location in the genome (genetic material) of a living organism, unlike early genetic engineering techniques that randomly insert genetic material into a host genome.

Support from vested interests

Scientists in the industry, like the Biotechnology and Biological Sciences Research Council, funded by the government’s Department of Business believe that the technique will lead to crops and animals with higher yields, resistance to disease and the ability to cope with the effects of climate change.

Emma Hockridge, head of policy at the Soil Association, urged the government to keep the UK aligned with the European court: “Scientific research has long shown that these new gene-editing technologies give rise to similar uncertainties and risks as GM always has. We have always been clear that these new plant breeding techniques are GMOs [genetically modified organisms] and therefore are banned in organic farming and food”.

Bloomberg reports that under the Trump administration, gene-edited foods don’t need to be labelled or regulated and that Zach Luttrell, a principal at industry consultant StraightRow LLC, sees gene-editing as a way to continue lowering costs. 

 

 

 

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Public trust has plunged in recent years as corruption plagues politics

A recent Telegraph investigation (paywall) revealed that senior MPs and peers, including many ministers, have given access to Parliament to spouses involved in lobbying for companies and campaign groups. Karen Bradley, the Northern Ireland Secretary, and Sir Kevin Barron, the chairman of the Commons Standards and Privileges Committee (Telegraph, ‘sleaze watchdog’, are among 900 parliamentarians whose partners hold “spouse passes” entitling them to around-the-clock access to the Palace of Westminster despite their work for organisations that lobby MPs and ministers over policies and funding.

Transparency International UK (UKTI) has published a policy paper on politics and report on the Revolving Door.

They note that in recent years politics in the UK has been plagued by corruption scandals and public trust in politicians is plunging.

These scandals have exposed serious fault lines in the UK political system, and have raised particular concerns over the following:

  • The regime for parliamentary expenses
  • Lobbying of politicians by those who can apparently buy access that influences legislation spending priorities or policy decisions;
  • The revolving door between government and resources-resources-business;
  • Political party funding; and
  • Oversight regimes.

They explain that the problem lies when it happens behind closed doors and away from public scrutiny. It can lead politicians in office to steer away from good government. Their decisions can benefit those who fund them. The public interest comes second. Special interests, backed by money, may sway decision-making and undermine democracy.

Opaque lobbying practices backed up by extensive funds at the disposal of interest groups can lead to undue, unfair influence in policies – creating risks for political corruption and undermining public trust in decision-making institutions. We can attribute this factor, in part, to the crisis of confidence in politics we have seen unravel in the UK in recent years, resulting in apathy and low voter turnouts.

TI-UK believes regulation needs to address both those who seek to influence inappropriately and those who are being lobbied:

  • Money should not be a distorting factor in forming policy or gaining access to decision makers.
  • Lobbying on any particular issue or decision should be visible and have an audit trail.

Such information should be presented in a manner that is accessible and comparable for the public, media and civil society to scrutinise.

The report on UK corruption by TI-UK revealed that the British public perceive political parties to be the most corrupt sector in the UK and parliament to be the third most corrupt. It concludes there is a danger that the public will cease to regard decisions made by government and parliament as legitimate and fair; this represents a serious threat to British democracy and ultimately, to the rule of law.

 

 

 

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Could British farmers build a vote-bank and influence policy?

Originally published on the FDF website

On another website, we read that in India, farmers only appear on the economic radar screen of the country when elections are around the corner (original source: Ground Reality).

Not so in UK. Whereas 43% are employed in Indian agriculture, British farmers and employees registered to vote are only 1% of the country’s population according to the World Bank’s interesting list and so are not regarded as politically significant, despite their vital role.

Is building a vote-bank the British farmers’ only chance of a fair deal?

A call, not to back a particular party or candidate but a policy such as the one set out by Farmers for Action (NI) and other farm groups (below), which commissioned the drafting of a parliamentary bill on farmgate prices. If successful it would return farmers a minimum of the cost of production plus a margin inflation linked across the staples. 

A vote-bank could be built by enlisting the support of the public and those who do business with dairy farmers:

  • feed mills
  • vets
  • contractors
  • hauliers
  • retailers
  • teachers
  • auctioneers
  • merchants
  • tradesmen
  • machinery suppliers 

Juliette Jowit of the Financial Times summarised: “As farm incomes fall thousands of jobs go in allied industries: vets, feed and machinery suppliers”. (Farmers suffer under the yoke of global forces, 2.5.00) 

Douglas Chalmers, when regional director for the Country Land and Business Association [North], said “Agriculture . . . supports jobs and services in the local villages and often the larger towns, especially if there is a market . . . As farming loses critical mass, all the agriculturally dependent businesses become unsustainable, and with no vets, marts, hauliers and merchants, further pressure is felt by those who have continued to farm . . .” He continues:

“We ask for a fair deal: that those who set policies and impose legislation consider the wider and real effects of their actions on individuals, farms and businesses in rural areas”. FG: 9.1.04

  • Some years ago David and Rosemary Jones of Trebersed Farm, Carmarthen, highlighted the importance of farming to the rural economy by presenting their accounts which reveal that in an eight-month period they paid 117 separate rural businesses and companies for work done or goods supplied. The yearly total is estimated at 130 suppliers. Rural economy: Farmers Guardian 19.3.99 
  • Ruth and Richard Burrows, Devonshire farmers, assembled suppliers representing 3000 others whose livelihoods depend on them and other farmers. A photograph was taken with notes giving the names and roles of the people pictured. Mrs Burrows said: “They are living proof of the importance of the spending power of the farmer and how enormously important agriculture is in terms of the entire economic structure around here. The rural communities of Britain tick over on a system of mutual dependency of which the farm often forms the hub. If it goes to the wall, dozens of ancillary trades suffer. The web of rural ruin, Richard Price, Daily Mail, 23.9.99

The problems being faced by dairy farmers do not stop at the farm gate but threaten the thousands of other business and jobs both locally and nationally.

Maintaining viable dairy farms not only protects livelihoods of farming families and others directly involved, it also makes a major contribution to local economies and the future of businesses, jobs, and families in the locality.

That is the key message from dairy farmer’s wife, Kathleen Calvert (left), who asks for a fair deal for dairy farmers who receive a significantly lower share of the retail milk price than they did ten years ago, despite considerably higher costs:

“Payment which covers production costs and overheads must be the norm for British food producers. This money will circulate around individual rural communities through the supply of professional goods and services to the prime producer, helping to provide a diverse range of other employment opportunities that support individual families within rural communities.”

Dugdale Nutrition, one of the 60 local businesses with which she trades, specialises in feeds for ruminant animals, its core market being dairy farming. This means its 49 employees and their families rely heavily in turn on local dairy farms for their livelihood. Matthew Dugdale, managing director of this company which has supplied the Calvert family for three generations, explains: “Dairy farming is like any business, needing a fair and sustainable price for its product to ensure a fair income for the long hours worked and a decent return on the often large amounts of capital employed, and very importantly, surplus profit to reinvest for the future.”

Locally based businesses circulate profits within the communities they serve. In turn they are reliant on viable, widespread and profitable farm businesses adding immense value to local economies. It is in their interests to see that farmers get a fair price for their produce.

 

 

 

 

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