Category Archives: Lobbying
Broken Britain 16: HMRC refuses to investigate money-laundering and tax fraud charges by largest Conservative donor
Professor Prem Sikka, Professor of Accounting at University of Sheffield and Emeritus Professor of Accounting at University of Essex, draws attention to the case of the UK telecoms giant Lycamobile, the biggest donor to the Conservative Party, which has accepted £2.2m in donations since 2011.
Her Majesty’s Revenue and Customs (HMRC) has refused to assist the French authorities and raid Lycamobile’s UK premises in order to investigate suspected money laundering and tax fraud.
Economia, the publication for members of the Institute of Chartered Accountants in England and Wales (ICAEW) which covers news and analysis on the essential issues in business, finance and accountancy, reports:
Following an initial denial (left, Financial Times), Economia confirmed that in an official response to the French government dated 30 March 2017, a HMRC official noted that Lycamobile is “a large multinational company” with “vast assets at their disposal” and would be “extremely unlikely to agree to having their premises searched”, said the report.
The letter from HMRC to the French government added, “It is of note that they are the biggest corporate donor to the Conservative party led by Prime Minister Theresa May and donated 1.25m Euros to the Prince Charles Trust in 2012”.
This is an ongoing saga: in 2016 Economia noted: “The Tories have come under fire for continuing to accept donations of more than £870,000 from Lycamobile since December, while it was being investigated for tax fraud and money laundering”.
In 2016 In May it emerged that KPMG’s audit of Lycamobile was limited due to the complex nature of the company’s accounts. Later, KPMG resigned saying it was unable to obtain “all the information and explanations from the company that we consider necessary for the purpose of our audit”.
HMRC: “has become a state within a state”.
In recent years, the Public Accounts Committee has conducted hearings into tax avoidance by giant global corporations such as Microsoft, Amazon, Google, Starbucks, Shire and others. The hearings have not been followed by HMRC test cases.
The Public Accounts Committee has also held hearings into the role of the large accountancy firms in designing and marketing avoidance schemes and exposed their predatory culture. In a telling rebuke to PricewaterhouseCoopers, the Committee chair said: “You are offering schemes to your clients—knowingly marketing these schemes—where you have judged there is a 75% risk of it then being deemed unlawful. That is a shocking finding for me to be told by one of your tax officials.”
Despite the above and numerous court judgments declaring the tax avoidance schemes marketed by accountancy firms to be unlawful, not a single firm has been investigated, fined or prosecuted.
There are real concerns that HMRC is too sympathetic to large companies and wealthy elites.
A major reason for that is the ‘revolving door’, the colonisation of HMRC by big business and its discourses: its current board members include non-executive directors connected with British Airways, Mondi, Anglo American, Aviva, PricewaterhouseCoopers and Rolls Royce.
After a stint at HMRC many of the non-execs return to big business. Corporate sympathies are therefore not counterbalanced by the presence of ordinary taxpayers or individuals from SMEs and civil society.
Sikka ends: “In such an environment, it is all too easy to turn a Nelsonian eye on corporate abuses and shower concessions on companies and wealthy individuals”. Read more here.
Why should we care?
Because tax revenue pays for the services used by all except the richest, the education health, transport and social services, increasingly impoverished by funding cuts imposed by the last two British governments.
The Shadow Chancellor has twice called for more rigorous examination and tightening of processes at HMRC to ensure that corporations and wealthy individuals are free from political corruption and pay fair rates of taxes.
Will the next government elected be for the many, not the few?
Posted in Austerity, Capitalism, Civil servants, Conflict of interest, Corporate political nexus, Cuts, Democracy undermined, disability rights, Education, Finance, Government, Health, Lobbying, Parliamentary failure, Party funding, Transport, Vested interests, Welfare payments
Professor Luis Suarez-Villa (Social Ecology and of Planning, Policy and Design at the University of California, Irvine) wrote in the FT recently:
American democracy was hijacked long ago by money and powerful interests, turning it into what amounts to a system of legalised corruption.
Lobbying, political action committees (super-pacs), myriad forms of campaign contributions and patronage are at the core of this phenomenon.
By comparison, the so-called Russian meddling in the 2016 election seems amateurish at best, and perhaps (more seriously) a way for the political establishment to divert the attention of the American people from the real problems of a corrupt system of public governance, whose patrons and beneficiaries want the rest of the world to think it is democratic.
A review of his book Corporate Power, Oligopolies, and the Crisis of the State (2015) expands his argument:
“From cradle to grave the decisions made by these entities have an enormous impact on how we live and work, what we eat, our physical and psychological health, what we know or believe, whom we elect, and how we deal with one another and with the natural world around us.
“At the same time, government seems ever more subservient to the power of these oligopolies, providing numerous forms of corporate welfare—tax breaks, subsidies, guarantees, and bailouts—while neglecting the most basic needs of the population.
“In Corporate Power, Oligopolies, and the Crisis of the State, Luis Suarez-Villa employs a multidisciplinary perspective to provide unprecedented documentation of a growing crisis of governance, marked by a massive transfer of risk from the private sector to the state, skyrocketing debt, great inequality and economic insecurity, along with an alignment of the interests of politicians and a new, minuscule but immensely wealthy and influential corporate elite.
“Thanks to this dysfunctional environment, Suarez-Villa argues, stagnation and a vanishing public trust have become the hallmarks of our time”.
His charges apply just as accurately to the British scene: British democracy has also been hijacked by money and powerful interests, turning it into what amounts to a system of legalised corruption.
Emeritus Professor Luis Suarez-Villa is the author of several other books, including Globalization and Technocapitalism: The Political Economy of Corporate Power and Technological Domination and Technocapitalism: A Critical Perspective on Technological Innovation and Corporatism.
Carillion provokes MP’s broadside: “taxpayer-funded services should be conducted in an ethos of public service rather than for private advantage”
Major banks and credit insurers are calling on the government to ‘step in’, as Carillion’s debts soar and ‘huge write-downs’ are announced on the value of several old contracts.
Some – according to the Financial Times – are seeking a taxpayer guarantee for the company’s debt and assurances that Carillion will be allowed to compete for future contracts, despite the company’s troubled state. Oliver Dowden, newly promoted to the frontbench, says that the government is making contingency plans for Carillion folding.
If Carillion goes under, writes MP Jon Trickett, “We would effectively be paying for these services twice. This government has socialised the risk but privatised years’ worth of profit for shareholders . . . it is allowing firms with public contracts to pay millions to private shareholders as the public suffers from cuts to disability benefits, schools and the NHS”. He adds:
“They are in debt to the tune of £1.5bn, while being valued at less than £100m and are being investigated by the Financial Conduct Authority over financial statements issued in the run-up to July’s profit warning . . .and if they fold, Britain could face a huge bailout so that our schools, hospitals and train lines keep running”.
Will the 99% bail Carillion out?
The government now relies on this contractor for a wide range of services. The Financial Times lists Carillion’s major contracts in the transport, defence/security and health sectors and points out that Labour’s Shadow Business Secretary has asked why ministers continued to sign off major contracts with the company even after it issued a profit warning in July 2017.
Theresa May’s new Cabinet ministers have – nevertheless – confirmed that they still intend to continue with the privatisation and outsourcing of public services to private firms which then make a profit at the expense of the taxpayer.
Some politicians and party members have, through directorships, shareholdings or the employment of family and friends, a vested interest in these companies, many of which donate to Conservative party funds, hoping to ensure another Conservative government.
MP Jon Trickett, shadow minister for the cabinet office, whose principled political life is outlined here, presents the view of ‘Corbyn Labour’, that taxpayer-funded services should be conducted in an ethos of public service rather than for private advantage: “Whether that’s to run welfare payments to those receiving universal credit, running hospitals or administrating schools in huge academy chains . . . “
He points out that when these firms cannot make good on their obligations under these contracts the British public picks up the bill, citing the termination of Virgin’s contracts on the East Coast main line.
The MP adds: “I represent a former mining area, which hasn’t seen meaningful private investment in decades, and little public investment since the 2010 election. Some of the poorest people in the country, with some of the worst prospects due to years of Tory government, live there. They have seen private firms make profit out of their benefits, their schools and crisis-stricken NHS services”. He ends by giving an assurance:
“Labour would reverse the presumption in favour of outsourcing and provide more cost-effective services, treating workers better by running many services in-house”.
Posted in Admirable politician, Banking, Capitalism, Conflict of interest, Corporate political nexus, Cuts, Defence, disability rights, Economy, Finance, Government, Lobbying, Outsourcing, Party funding, Privatisation, Reward for failure, Taxpayers' money, Vested interests
Parliamentary lobbying condemned: 2010-2017
“It is the next big scandal waiting to happen. It’s an issue that crosses party lines and has tainted our politics for too long, an issue that exposes the far-too-cosy relationship between politics, government, business and money.”
David Cameron, then prime minister, promised that a Conservative government would stop the lobbying industry’s attempts through former ministers to access and influence policy. His attack on “crony capitalism” came in a speech in which he attempted to tackle Britain’s “broken politics”:
“Now we all know that expenses has dominated politics for the last year. But if anyone thinks that cleaning up politics means dealing with this alone and then forgetting about it, they are wrong. Because there is another big issue that we can no longer ignore.
The Conservative leader said that the “£2 billion industry” has a big presence at Westminster and take in some cases MPs are approached more than 100 times a week by lobbyists.”
But in 2013:
And in 2017, admirable MP Paul Flynn sponsored Early Day Motion 1079
ADVISORY COMMITTEE ON BUSINESS APPOINTMENTS
Date tabled: 15.03.2017
Primary sponsor: Flynn, Paul
That this House recalls former Prime Minister David Cameron’s condemnation in 2010 of politicians who are out to serve themselves and not the country by lobbying; notes the abject failure of the Government’s watchdog, the Advisory Committee on Business Appointments, to reduce the abuses of the potentially corrupting revolving door between ministerial office and big business lobbying; and calls on the Government to establish an effective watchdog that would enhance the House’s reputation for probity, removing the opportunities for former Ministers to sell their inside knowledge and contacts for financial advantage by prohibiting their lobbying for companies they influenced or regulated in their Ministerial roles.
As ACOBA, the Government’s ‘watchdog’, has failed to reduce the abuses of the revolving door between ministerial office and big business lobbying, government should establish an effective mechanism which would prevent former Ministers from selling their inside knowledge and contacts for financial gain.
Weakening the political-corporate nexus? Bell Pottinger, arch-facilitators for the wealthy, are in administration
The Financial Times reported recently that the Public Relations and Communications Association has expelled Bell Pottinger after scrutinising its campaign work on behalf of the Gupta family in South Africa; Francis Ingham, the head of the PRCA, described it as the “most blatant instance of unethical practice” he had ever seen.
Political Cleanup stopped reporting on this seemingly invincible prince of lobbyists in 2012, as enough had been said on its website. Its exposure, however, a rare reversal in such circles, is a landmark.
Lord Tim Bell, its co-founder, Margaret Thatcher’s close friend and favourite spin-doctor, advising her on interview techniques, clothing and hairstyle choices. For her first election victory, he created the ‘Labour Isn’t Working’ campaign with its famous poster.
There have been concerns over Bell Pottinger’s role and influence for many years. Below: in ending coverage, PCU listed some of its past coverage of Bell Pottinger, though many incidental references appear in other blogs.
These notes cover only a fraction of Bell Pottinger’s activities., making no reference to its extensive activities in the Middle East
Due to a malfunction all pictures in these blogs are missing and links to the former website are no longer working.
PCU’s Bell Pottinger Roll of Dishonour
February 25th, 2010: Bingle gave a further caution against increasing regulation of the PR industry, pointing out that a member of UKPAC accused of wrongdoing would have to hire lawyers to fight the case and suggesting that UKPAC might not have the funds to take on a legal case. He said: “I suspect PAC would not want to take on [law firms] Carter-Ruck or Norton Rose over an alleged transgression” – a veiled threat?
June 2nd, 2010: Jim Pickard, a Financial Times Westminster ‘lobby team’ correspondent yesterday wrote an article: Lobbyists flock to court Lib Dems. Pickard quotes Peter Bingle, saying that these were “heady and exciting days” for public affairs consultants affiliated to the Liberal Democrat party – and patronisingly: “After years of being locked away in the cupboard and only being let out for birthdays, weddings, funerals and Southwark council’s planning committee, they are suddenly much in demand,” he wrote on his blog. “In the public affairs market, one good Lib Dem consultant is now worth at least 14 former Labour special advisers.”
July 12th, 2010: Bell Pottinger Public Affairs chairman Peter Bingle, defended his agency’s policy of declining to name all its clients, claiming that an all-lobbyist ‘client register’ would “increase misunderstanding” of lobbying. The debate took place a few hours after Conservative leader David Cameron had launched an attack on lobbyists ‘Lobbying at Westminster is “out of control”. Referring to Cameron’s remarks, Peter Bingle’s threat?: “I would just caution [the Conservatives] against being too ‘pure’ at this stage.” A Birmingham comment: Sure, ask the turkeys to vote for Christmas…
July 28th, 2010: Bell Pottinger, the lobbying firm acting for Monsanto, was paying up to £10,000 a year to MP Peter Luff, the Tory chairman of the Agriculture Select Committee which policed Government food policy. Monsanto met government minister Jack Cunningham when he was chair of the cabinet committee on GM. His special adviser, Cathy McGlynn, went on to join Bell Pottinger.
December 6th, 2011: this site covered the Independent’s publication of a Bureau investigation into Bell Pottinger which revealed how these lobbyists boasted of access to leading politicians.
The Bureau of Investigative Journalism secretly recorded some of the firm’s executives boasting of its connections at the top of UK government to journalists posing as agents for the government of Uzbekistan. Last year the Sunday Times revealed that the company’s conflict-resolution division had been hired by the US military between 2007 and 2011 to orchestrate a $540m “covert” propaganda campaign in Iraq. Bell Pottinger hoped to muzzle the Bureau of Investigative Journalism and those who published its reports by complaining to the Press Complaints Commission – through Carter-Ruck solicitors – that a series of articles produced by the Bureau, had been based on information obtained through subterfuge. The establishment’s PR firm claimed that the material was not of sufficient public interest to merit the Bureau’s undercover investigation.
December 8th, 2011: Today’s Financial Times reports at length that Wikipedia has suspended 10 accounts associated with Bell Pottinger, the firm at the heart of a dispute over lobbying industry ethics, on suspicion there may have been a breach of its editing rules. The Bureau’s ‘sting’ recorded senior Bell Pottinger employees boasting to undercover reporters about their ability to influence the prime minister, manipulate web search results and “sort” negative Wikipedia articles on behalf of clients.
There was indeed a ‘broad public interest in exploring the relationship between lobbying and politics’ and it would not have been possible to obtain details of the techniques used to represent tainted regimes through other means.
Which pillar of the establishment will crumble next?
Times journalist Hamish MacDonnell writes of the Scottish Labour leadership campaign as being ‘expected to turn into a battle between the anti-Corbyn and moderate wings of the party’.
Later he amplifies: a “battle between those who want the party to become more left-wing, in tune with Jeremy Corbyn and his hard-left Momentum followers, and those who are more moderate”
- hard left Momentum followers: people who want to see social justice in the country
- the ‘more moderate’: career-minded people – sometimes described as ‘Tory-lite’ who would only slightly mitigate the worst excesses of ‘Broken Britain’ if given the chance.
Wholesale radical reform is sought by ‘Corbynites’ – and what a threat that is to the vested political and finaial interest with which most moderates are entangled – or hope to be.
No candidate has yet to declare that they will stand, but the frontrunners — one from each side of the party — have made it clear they are almost ready to enter the fray.
Richard Leonard, former union organiser with the GMB, is seen as the pro-Corbyn candidate with trade unions (the bogey) ‘lobbying hard’ for him. No reference was made to trade unions Unite and Community, to which Anas Sarwar, of Labour’s ‘moderate’ wing, belongs.
Since this was written, both men have announced that they will stand for election.
Three of many reasons for Jeremy Corbyn’s popularity are his care for the ‘ordinary person’, his ‘sufficient’ lifestyle and his freedom from the greed which leads many in the political landscape to ‘milk’ the system and promote decisions needed by moneyed interests.
Attitudes to public expenditure
It was retweeted by a friend and in another article Greg Foxsmith neatly summarises: “Grayling is an MP who purports to want to cut public expenditure. However, when it comes to his own public expenditure, Chris likes to get as much of it as he can”. Foxsmith refers readers to the Telegraph for more information. Grayling’s record on cutting access to legal aid and lack of concern about prison suicides adds charges of inhumane conduct to those of greed.
Apart from passing through the revolving door to industry and then returning to aid government’s decision-making process, civil servants feature in the news less frequently than MPs.
Award-winning investigative journalist David Hencke recently re-published information about top bonuses and pay rises for five of the most senior and well paid civil servants at the Department of Work and Pensions over the last two years, which appears in the annual report and accounts of the DWP released last month.
The five civil servants named in Hencke’s article are Sir Robert Devereux, permanent secretary at the Department of Work and Pensions; Neil Couling, director general of universal credit; Jeremy Moore, director of strategy; Mayank Prakash, director general of digital technology and Andrew Rhodes, director of operations. All are responsible in one way or another for the delivery of Universal Credit.
All but Andrew Rhodes are paid more than Theresa May, the PM, but are, nevertheless, receiving bonuses
This, even though their new Universal Credit programme is said to be in chaos – leaving some claimants without money for up to six weeks. MP Kevan Jones (Durham North) has described the bonuses of £10-20,000 as “a reward for failure”, based on its performance in the Newcastle-upon-Tyne pilot project.
Catherine McKinnell, Labour MP for Newcastle North, said: “My office has been deluged with complaints from constituents about a Universal Credit system that is clearly struggling to cope and failing to deliver the support that claimants need in anything like an orderly or timely fashion. She reveals a very sorry picture. The new IT system means people can’t talk to a human. It has a verification process that requires claimants to produce photographic identification such as a passport or driving licence, “which many simply do not possess and certainly cannot afford”. There are numerous examples of Universal Credit claims being shut down before they should be; of documentation being provided to the DWP, at the constituent’s cost, and repeatedly being lost or even destroyed; and of totally conflicting, often incorrect, information being provided to constituents about their claims.” Precisely the case seen repeatedly 20 years ago when the writer was a volunteer in a local night-shelter.
In Civil Service World. Jawad Raza, of the FDA (the First Division Association) which represents the top civil service, said that the suggestion that these civil servants have been rewarded for failure shows a blatant disregard for the facts regarding their pay, and that highly skilled professionals working in challenging circumstances deserve to be adequately remunerated without having their names, faces (and incomes) spread across news pages – as they are in Hencke’s article.
All these pay rises were decided objectively by line managers, but the Department declined to say who these line managers are and which outside organisations and people recommended they should get bonuses. MP Kevan Jones plans to table a Parliamentary Question next month asking for this information.
Hencke ends, “What this shows to me is a growing disconnect between the people at the top – who are computer savvy, have nice centrally heated homes, no problems with bills, can afford expensive holidays, and can’t conceive of anyone not having a passport – designing a system for poor, dispossessed, desperate people without any understanding of how the world works for them.
“It was this disconnect between the elite and the poor in the USA that led to the rise of Donald Trump and I suspect this huge gulf between the Metropolitan elite (of which top Whitehall civil servants are part) and the provincial poor, is in the end going to propel Jeremy Corbyn into Downing Street”.
Will we see a new breed of politicians in such a government? A significant mass?
Many see the need for the number of MPs who have lived for the public good, even using their basic salaries to do this, such as former Coventry MP Dave Nellist, to increase to such an extent that they will be able to transform the country.
Reminding the public that universities receive benefits from their charitable status and are required to disclose information about the basis on which salaries are calculated, former Labour education minister Andrew Adonis is campaigning for a reduction in the high salaries awarded to university vice-chancellors, which only increased following the introduction of tuition fees.
1. State Pensions
2.6 million women born in the 1950s will ‘lose out’ because of changes to pension law: “while corporations and the richest individuals receive tax breaks”
WASPIs (Women against state pension inequality) protest outside Parliament. Their aim: to achieve fair transitional arrangements for women born in the 1950s, for whom the state pension age is being raised from 60 to 66 by 2020.Photo: WASPI Campaign/Twitter
A Bournville reader draws attention to an article in Welfare Weekly reporting the findings of a new analysis by the Labour Party which reveals that tens of thousands of Theresa May’s constituents will be adversely affected by her decision to bring forward changes to the state pension age. The state pension age for men and women will be equal at 65 at the end of 2018, before rising to 66 in 2020 and then 67 in 2028. This will then rise again to 68 between 2037 and 2039, meaning those born between 1970 and 1978 will be made to wait an extra year before becoming eligible to claim.
Data obtained by Labour from the House of Commons Library finds that nearly 37 million people in total will be affected, including 56,547 people in Theresa May’s constituency of Maidenhead. 61,753 people who are under the age of 47 will be hit by the changes in Chancellor Philip Hammond’s constituency of Runnymede and Weybridge. 59,290 people will also be affected in the Work and Pension Secretary David Gauke’s constituency of South West Hertfordshire.
A BBC video clip showed that an outline given by MP Guy Opperman (right, Work and Pensions) of government measures to assist older people back into work, including apprenticeships and retraining received a mixed reception.
Labour’s Shadow Work and Pensions Secretary, Debbie Abrahams, said: “Thanks to the Tories increasing the state pension age, 36.9m people will be forced to work longer, at the same time that evidence indicates life expectancy has stalled in some places and is reducing in others.” She called on Tory MPs to “explain to the tens of thousands of people in their constituencies why the burden of Tory austerity is being pushed on them, while corporations and the richest individuals receive tax breaks.”
Abrahams added: “Theresa May should answer her 56,547 constituents, and the 36.9m people across Britain, whose hard-earned retirements are being postponed because of her Government.”
Labour is to begin a “national state pension tour” to draw attention to how many people will be affected and voice their opposition to the policy.
A Times reader emphasises the growing awareness of the imperative to eradicate ‘the frankly corrupt, hypocritical behaviour some British MPs have indulged in for decades’
Oliver Wright, policy editor for The Times, focusses only on the tip of the iceberg – the ‘revolving door’. He reports a recommendation by the public administration select committee (PASC) that ministers and civil servants should be banned from taking up lucrative private sector jobs for two years when they leave office. (The article may be read here – possible paywall.) They said that more than 600 former ministers and senior civil servants had been appointed to 1,000 business roles. The committee wants the government to impose a two-year ban on taking up jobs that relate “directly to their previous areas of policy and responsibility”.
From many instances Mr Wright singled out:
- Lord Hague of Richmond, who now advises Teneo, an international business consultancy,
- Sir Ed Davey, the former energy secretary, who advises a PR and lobbying company that lists EDF Energy as a client.
- Mark Britnell (though un-named in the article), a former director-general of commissioning at the Department of Health who became global head of healthcare at KPMG, which bids for government health contracts.
There is no reference to extra ‘jobs’ done whilst MPs are in office – except from one of The Times readers who bluntly writes: “Any MP should not be able to hold any extra job outside the House of Parliament”. Constituency work and special responsibilities – if properly attended to – would occupy an MP full time.
The parliamentary decision-making process is sometimes shown, with hindsight, to have been affected by MPs’ connections with the armaments, healthcare and tobacco industry and many companies based in tax havens.
Property interests are less well covered, but itemised two months ago in Property Week:
Social Investigations reports that their research into Lords’ and MPs’ connections to private healthcare through the register of interests is complete.
Below are listed a few of the key findings. Research into the Health and Social Care bill is ongoing and more facts will be added as and when they arise.
- 225 parliamentarians have recent or present financial private healthcare connections
- 145 Lords have recent or present financial connections to companies or individuals involved in healthcare
- 1 in 4 Conservative Peers have recent or present financial connections to companies or individuals involved in healthcare
- 1 in 6 Labour Peers have recent or present financial connections to companies or individuals involved in healthcare
- 1 in 6 Crossbench Peers have recent or present financial connections to companies or individuals involved in healthcare
- 1 in 10 Liberal Democrat Peers have recent or present financial connections to companies or individuals involved in healthcare
- 75 MPs have recent or present financial links to companies or individuals involved in private healthcare
- 81% of these are Conservative
- 4 Key members of the Associate Parliamentary Health Group have parliamentarians with financial connections to companies or individuals involved in healthcare.
Endnote: a Times reader comments: “When I was growing up British MPs would sneer at the corrupt goings on by politicians from various pejoratively termed ‘banana republics’ and declare that such behaviour would never be tolerated in the UK. Well, it soon became obvious that this was nonsense and the issues outlined in this June article illustrate the frankly corrupt, hypocritical behaviour our British MPs have indulged in for decades, and the higher the office they occupied the more hypocritical the behaviour – proving time and again the accuracy of the saying that power corrupts and absolute power corrupts absolutely”.
Posted in Arms trade, Conflict of interest, Corporate political nexus, Democracy undermined, Finance, Foreign policy, Government, Health, Housing, Lobbying, Privatisation, Revolving door, Vested interests
The Department for Digital, Culture, Media and Sport (DCMS) has launched a review into the bookmaking industry, scrutinising gambling machines known as fixed-odds betting terminals (FOBTs).
The machines, which campaigners describe as highly addictive, allow gamblers to stake up to £100 every 20 seconds. They made £1.82bn in the year to September 2016 and account for 56% of revenues at betting shops, according to figures released by the industry regulator the Gambling Commission,
Online Casino notes that in a research note in April, analysts at Barclays Capital forecast that if MPs restrict the size of the stake to £2, Ladbrokes Coral would lose £449m in revenues in 2018, and William Hill £284m. Betfair, another gambling company, would lose £55m.
The Financial Times reports that William Hill and Ladbrokes Coral, two of the UK’s biggest bookmakers, spent just £2,004 in 2015, £2,800 in 2014 and £3,300 in 2013. According to the parliamentary register they significantly increased the amount they spent on entertaining MPs – £18,018 on hospitality for 12 MPs – since the start of 2016.
A staunch defender of the gambling industry, Mr Davies chairs the Betting and Gaming All-Party Parliamentary Group (APPG), and vice-chair of both the Bingo APPG and the Racing and Bloodstock APPG.
Labour wants to see the maximum stake reduced from £100 to £2 because the addictive high-stakes machines have become a huge problem for communities that are often struggling to cope with underinvestment and high unemployment.
Neil Austin comments that MP Philip Davies (left), chairman of the betting and gaming all party parliamentary group, is quite right to say it would be extraordinary of he did not engage with the betting industry. He adds:
“The reputation of parliament and of MPs is languishing far below where it needs to be for a strong democracy. Mr Davies and the other MPs mentioned in your report seem to have learnt nothing from the expenses scandal.
“Many organisations have strict rules prohibiting employees from accepting almost any hospitality where a conflict of interest could be perceived. If we are to try to return parliament to a more trusted position in the country, one small step would be for MPs to abide by the same rules”.