Category Archives: MPs
George Monbiot recently pointed out that the Commons report on the Carillion fiasco is one of the most damning assessments of corporate behaviour parliament has ever published. It trounces the company’s executives and board and laments the weakness of the regulators.
But, as Prem Sikka said in his April article, it scarcely touches the structural causes that make gluttony a perennial feature of corporate life.
Both agree that the problem begins with an issue the report does not once mention: the extreme nature of limited liability. Sikka points out that this system, under which executives are only financially accountable for the value of their investment, has also benefited frauds and led to the self-enrichment of executives at the expense of workers, consumers, creditors, pensioners and citizens.
Monbiot adds that the current model of limited liability allowed the directors and executives of Carillion to rack up a pension deficit of £2.6 billion, leaving the 27,000 members of its schemes to be rescued by the state fund (which is financed by a levy on your pension – if you have one). The owners of the company were permitted to walk away from the £2 billion owed to its suppliers and subcontractors. (Left: the former Carillion chief executive Keith Cochrane in Westminster after appearing before the Commons work and pensions select committee)
Monbiot continues: “There is no way that fossil fuel companies could pay for the climate breakdown they cause. There is no way that car companies could meet the health costs of air pollution. Their business models rely on dumping their costs on other people. Were they not protected by the extreme form of limited liability that prevails today, they would be obliged to switch to clean technologies”.
So what is to be done?
Prem Sikka (right) proposes that the bearers of unlimited risks and liabilities should be given rights to control the day-to-day governance and direction of companies.
He advocates including employees and citizen/consumers on company boards – because both ultimately have to bear the financial, health, social and psychological costs associated with environmental damage, pollution, poor products, industrial accidents, loss of jobs, pensions and savings. Through seats on company boards, they could secure a fairer distribution of income, challenge discrimination, curb asset-stripping and influence investment, training and innovation.
Across the 28 European Union countries (plus Norway), most have a statutory requirement for employee representation on company boards – unlike the UK, Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta and Romania.
George Monbiot proposes a radical reassessment of limited liability.
He points out that a recent paper by the US law professor Michael Simkovic proposes that companies should pay a fee for this indemnity, calibrated to the level of risk they impose on society. He adds, significantly, that as numerous leaks show, companies tend to be far more aware of the risks they inflict than either governments or the rest of society. Various estimates put the cost that businesses dump on society at somewhere between 4% and 20% of GDP
His own ‘tentative’ and ingenious proposal is that any manager earning more than a certain amount – say £200,000 – would have half their total remuneration placed in an escrow account, which is controlled not by the company but by an external agency. The deferred half of their income would not become payable until the agency judged that the company had met the targets it set on pension provision, workers’ pay, the treatment of suppliers and contractors and wider social and environmental performance. This judgement should draw on mandatory social and environmental reporting, assessed by independent auditors.
If they miss their targets, the executives would lose part or all of the deferred sum. In other words, they would pay for any disasters they impose on others. To ensure it isn’t captured by corporate interests, the agency would be funded by the income it confiscates.
Monbiot then says “I know that, at best, they address only part of the problem” and asks, “Are these the right solutions?
- support them,
- oppose them
- or suggest better ideas.
He ends: “Should corporations in their current form exist at all? Is capitalism compatible with life on earth?”
A Liverpool reader draws attention to the news that Philip May, husband of the UK prime minister, works for Capital Group, the largest shareholder in arms manufacturer, BAE Systems, whose share price has soared since the recent airstrikes in Syria, employs. It is also the second-largest shareholder in Lockheed Martin – a US military arms firm that supplies weapons systems, aircraft and logistical support. Its shares have also rocketed since the missile strikes last week.
Selected evidence of the revolving doors between Whitehall appointments, their family and friends and the ‘defence’ industry in our archives, in chronological order:
Michael Portillo, the secretary of state for defence from 1995 to 1997, became non-executive director of BAE Systems in 2002 before stepping down in 2006.
Lord Reid, secretary of state for defence from 2005 to 2006, said in 2008 that he had become group consultant to G4S, the security company that worked closely with the Ministry of Defence in Iraq.
Air Chief Marshal Sir Glenn Torpy, the chief of staff from 2006-2009, retired from the RAF last year and will become senior military adviser to BAE Systems in January.
Sir Kevin Tebbit, under-secretary at the MoD, became chairman of Finmeccanica UK, owner of Westland helicopters in 2007 and has a variety of other defence related appointments.
Major-General Graham Binns left the military in 2010 and became chief executive of Aegis Defence Services, a leading security company.
David Gould, the former chief operating officer of the MoD’s procurement division, became chairman of Selex Systems, part of Finmeccanica in 2010.
Lady Taylor of Bolton was minister for defence equipment for a year until 2008 and became minister for international defence and security until Labour lost the general election in May.In 2010 she joined the arms contractor Thales, which is part of the consortium supplying two aircraft carriers that are £1.541bn over budget.
In 2010 Geoff Hoon, the ex-Defence Secretary caught attempting to sell his services to fake lobbyists back alongside Stephen Byers. When he was an MP, military helicopter company AgustaWestland were awarded a billion-pound order. Now out of Parliament, Hoon earns his way as the company’s Vice-President of international business.
Andrew Tyler (above, right), the British Defence Ministry’s former procurement chief, became chief operating officer of Defence Equipment & Support (DE&S), responsible for the procurement and support of all the equipment used by the British Armed Forces. Siemens’ Marine Current Turbines unit appointed Andrew Tyler as acting CEO in 2011 and in 2012 he became the chief executive of Northrop Grumman’s UK & European operations; NG is a large American global aerospace and defence technology company. Above, still from a video made at a 2015 Defence and Security Equipment International (DSEI) arms fair
Then Business Secretary Vince Cable was one of 40 MPs on the guest list for a £250-a-head gathering in 2015 at the Hilton hotel on Park Lane. he gave a speech at the event organised by trade organisation ADS, the trade body for UK Aerospace, Defence, Security and Space industries arms fair..
Ministers were wined-and-dined in 2015 by the arms trade at a £450-a-head banquet on Tuesday night just hours after parliament’s International Development Committee said the UK should suspend all arms sales to Saudi Arabia.
In 2017, some of the senior politicians or members of their families lobbying for the nuclear industry were listed on this site (Powerbase source):
Three former Labour Energy Ministers (John Hutton, Helen Liddell, Brian Wilson)
Gordon Brown’s brother worked as head lobbyist for EDF
Jack Cunningham chaired Transatlantic Nuclear Energy Forum
Labour Minister Yvette Cooper’s dad was chair of nuclear lobbyists The Nuclear Industry Association.
Ed Davey, Lib Dem energy minister’s brother worked for a nuclear lobbyist. When failed to be re-elected went to work for the same nuclear lobbying firm as his brother.
Lord Clement Jones who was Nick Clegg’s General Election Party Treasurer was a nuclear industry lobbyist.
Tory Peer Lady Maitland is board member of nuclear lobbyist Sovereign Strategy.
Bernard Ingham, Mrs Thatcher’s press spokesperson, has been nuclear lobbyist for over 25 years.
Lord Jenkin was a paid consultant to nuclear industry.
MEP Giles Chichester is president of nuclear lobbyists EEF.
Concerns about the ‘cosy relationship between the government and the arms trade’ are expressed well by CAAT:
A disturbing number of senior officials, military staff and ministers have passed through the ‘revolving door’ to join arms and security companies. This process has helped to create the current cosy relationship between the government and the arms trade – with politicians and civil servants often acting in the interests of companies, not the interests of the public.
When these ‘revolvers’ leave public service for the arms trade, they take with them extensive contacts and privileged access. As current government decision-makers are willing to meet and listen to former Defence Ministers and ex-Generals, particularly if they used to work with them, this increases the arms trade’s already excessive influence over our government’s actions.
On top of this, there is the risk that government decision-makers will be reluctant to displease arms companies as this could ruin their chances of landing a lucrative arms industry job in the future.
The rational case against metro mayors ably set out by Richard Hatcher, George Morran and Steve Beauchampé, has been shattered for the writer by the media-feeding chaotic, emotion-led, vicious, counterproductive squabbling in the Labour & Conservative ranks.
Still, evidently, a tribal people, we appear to need the ‘high-profile leadership’ extolled by Andrew Carter, chief executive of the Centre for Cities , largest funders Gatsby Charitable Foundation (Lord Sainsbury) and Catapult network, established by Innovate UK, a government agency. (see report cover right)
As yet, the announcements made by the West Midlands metro mayor Andy Street, respected even by most opponents of the post, with a business record seen as a guarantee of efficiency, are provoking little dissension.
Dan Jarvis, who is expected to win the Sheffield election becoming Britain’s seventh metro mayor, intends to continue to sit in the House of Commons to work for a better devolution deal and speak for the whole county. (map, regions in 2017)
His desire to stay in parliament while serving as a mayor is thought, by the author of FT View, to reflect a recognition that the real authority and power of these positions is limited:
- The six mayors have no say on how taxes are raised and spent.
- Outside Greater Manchester, the mayors have little control over health policy.
- Major spending decisions on transport policy are still taken by central government.
Days after taking office in Greater Manchester, Andy Burnham’s announcement of a new fund to tackle the region’s homelessness problem was backed by ‘a chunk’ of his own mayoral salary.
Andrew Carter points out that England’s mayors are highly constrained in their control over local tax revenue and how it is spent, compared with their counterparts in other countries.
FT View describes this extra layer of government as yet merely creating cheerleaders, adding:
“Voices alone will not be enough to shift economic and political power to the regions. England’s mayors need more control. If the government is serious about devolution, the mayors need the powers to match that ambition”.
Could well-endowed, unsuborned metro mayors out-perform successive corporate-bound national governments?
On 1 April 2018 the government will introduce the first Accountable Care Organisations (ACOs), which are to act as partnership bodies incorporating hospitals, community services and councils into the NHS in England.
The Health Service Journal reports that ACOs organisation, a corporate joint venture with GPs, will bring together most of a local area’s NHS services under a single budget, run directly by one big organisation – the ACO. which are to act as partnership bodies incorporating hospitals, community services and councils
Government intends to pass laws allowing ACOs to be set up (see above) without an automatic vote in Parliament.
A BBC website reports that campaigners has been given permission to challenge a government health policy in the High Court. They will pursue a judicial review against Health Secretary Jeremy Hunt and NHS England over plans to create ACOs. Campaigners say it risks privatisation, but this is denied by ministers. The group bringing the case to court says an act of Parliament would be needed for the changes.
The DHSS said the claims would be resisted and it is irresponsible scaremongering to say ACOs were supporting privatisation. A spokesman said: “The NHS will remain a taxpayer-funded system free at the point of use; ACOs are simply about making care more joined-up between different health and care organisations. “Our consultation on changes to support ACOs is entirely appropriate and lawful”.
Dr Kailash Chand, an honorary Vice President of the British Medical Association, claimed ACOs could be a “Trojan horse for privatisation” adding:
“At worst, they are the end game for the NHS.”
The British Medical Association union warned: “Combining multiple services into one contract risks the potential for non-NHS providers taking over the provision of care for entire health economies.”
And the Commons Health Committee chair Dr Sarah Wollaston (Conservative) said: “There is a great deal of anxiety out there that this is going to be a mechanism for privatising the NHS.”
Paul Tyler was appointed Liberal Democrat Spokesman on Rural Affairs, Agriculture and Transport following his election 1992.
- He gained the Country Life Parliamentarian of the Year Award for his persistent and effective challenging of Agriculture Ministers during the BSEBeef crisis.
- After the 1997 election, as the Foot and Mouth epidemic devastated livestock areas, Party Leader Charles Kennedy appointed Tyler to co-ordinate the response, and work with farming and other organisations, to seek more effective Government action.
- He led a campaign to uncover the truth behind the Lowermoor Water Poisoning incident, and the ensuing cover-up, which occurred shortly before the Conservative Party privatised the water industry.
- Experience working the Royal Institute of British Architects(1966–73) and SHELTER (1975–76) has given Tyler a special interest in housing and planning policy.
- For many years he has campaigned to change Britain’s dysfunctional electoral system and to replace the House of Lords with an elected Senate.
His work as Chair of the All-Party Parliamentary Group on Organophosphates (1992-2005) was widely appreciated. He campaigned about their adverse effects on farmers (through sheep dip), pilots and cabin crew (through contaminated cabin air) and gulf war veterans (through pesticides used to repel insects).
“100 tenants a day lose homes as rising rents and benefit freeze hit” – The Observer July 2017.
In the same month, a Joseph Rowntree Foundation study attributed 80% of the recent rise in evictions to the “no fault” process under section 21 of the Housing Act 1988.
Two months’ written notice is all that private landlords need to do: they don’t need to give any reason when they ask tenants to leave.
It allows the worst landlords to ignore disrepair – tenants who complain are given notice – a process officially recognised under the name ‘retaliatory eviction’.
Read more about retaliatory eviction’ – the subject of Commons Briefing paper SN07015 by Wendy Wilson – published on June 13, 2017.
Jeremy Corbyn raised the issue forcefully in Wednesday’s Prime Minister’s Questions
Mr Corbyn reviewed the government’s record:
- Homelessness is up by 50% and rough sleeping has doubled. Homelessness and rough sleeping have risen every single year since 2010.
- Evictions by private landlords have quadrupled since 2010. There is no security in the private rented sector.
- One-for-one replacement of council housing sold off through the right to buy was promised, but just one in five council homes have been replaced.
- Hundreds of thousands of people are on housing waiting lists.
Campbell Robb, chief executive, said: “With the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people – particularly families – the stability they need to put down roots. The stable rental contract offers renters a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework”.
Scotland for best practice to date: the Scottish secure tenancy
In Scotland, under Jack McConnell’s Labour government, by an order under section 11 of the 2001 the Housing (Scotland) Act tenants of local authorities, housing associations & tenants who are members of fully mutual co-operative housing associations, from 30 September 2002, became Scottish secure tenants.
Read the excellent terms here. Will a Labour government in this country adopt this Rolls Royce standard model and also introduce a stable rental contract for those in private accommodation? Or will the profit motive win the day?
Broken Britain 8: EU nationals experience the maladministration which has affected the country’s poorest for decades
EU nationals’ deportation threat was an ‘unfortunate error’, according to Theresa May
The Home Office mistakenly sent up to 100 letters to EU citizens telling them to leave UK or face removal
One of these, academic Eva Johanna Holmberg has lived in the UK with her British husband for most of the last decade, but the letter from the Home Office said that ‘A decision has been taken to remove you from the UK.’ It added that if she did not leave the country of her own accord the department would give “directions for [her] removal” as “a person liable to be detained under the Immigration Act”.
Her story was picked up on social media and the Home Office then said the letter had been sent by mistake. Several people have been told wrongly they should leave the country after trying to apply for permanent residency but this is the first time the Home Office has issued a letter telling people to leave.
Though the department called to apologise, the person who telephoned did not agree that the government would cover her legal costs of about £3,800.
The Financial Times reports that more than 120 MPs have challenged the rollout of Britain’s flagship “Universal Credit” benefits system, saying that delays are leaving poor households exposed.
Universal credit payments are withheld for the first week and then paid monthly in arrears. In practice, almost a quarter of claimants are waiting even longer — for up to 12-13 weeks. A DWP spokesperson said “Around 80% of payments are made on time and where they are not it is usually because a claimant commitment has not been signed or there is a verification issue over information”.
Citizens’ Advice has helped more than 30,000 people facing problems with the new system, and the Trussell Trust ((food banks) has seen a sharp rise in referrals for emergency food in areas where universal credit has been introduced.
But private enterprise flourishes: MP Ruth George said there was evidence that high-cost payday lenders were targeting areas where the universal credit system has just been introduced – and household debt is already 140% of GDP.