Scotland Redefines Corruption?
Recent revelations about the Tory party election investigations and the huge numbers of British-owned shell companies in British Overseas Territories and British Crown Dependencies revealed in the Panama papers makes it difficult to understand how Cameron could stick his brass neck out and expect the world to take his anti-corruption crusade seriously.
Clearly we are in a surreal moment in British politics. But the remarkable hypocrisy that dominated the headlines last week should not detract from the fundamental underlying conditions of the corruption of public life in Britain. Equally pertinent to understanding Cameron’s complacency is an increasingly collusive relationship between government and businesses at the heart of Westminster politics. Those relationships are undermining public trust in democratic institutions and calling into question the integrity of public officials charged with serving the public good. In particular, ‘revolving door’ appointments between the public and private sector, and the role of private companies in public functions have the distinct whiff of something rotten in the state of politics.
To explore what people really think about these issues, we commissioned a YouGov survey to ask a representative sample of people in Britain what they thought about a range of routine UK government practices. The practices that we asked about have at times been controversial, but crucially, they are not necessarily regarded by any standard definition as “corrupt”.
The results of the survey overwhelmingly point to a public intolerance for these ‘normalised’ practices:
- 73% said that the practice of ministers accepting corporate boardroom appointments on leaving office should be banned.
- 75% said that the practice of senior civil servants accepting corporate consultancies should be banned.
- 62% said that inviting private corporations into government to help shape the regulation of business should be banned.
- 68% say that current PFI [private finance initiatives] arrangements for public projects should be banned.
Nowhere was this opposition more strongly held than in Scotland. Those results also revealed:
- 82% of the Scottish public want the practice of ministers accepting corporate boardroom appointments on leaving office to be banned.
- 83% of the Scottish public want that the practice of senior civil servants accepting corporate consultancies to be banned.
- 69% of the Scottish public want the practice inviting private corporations into government to help shape the regulation of business to be banned.
- 76% of the Scottish public want current PFI arrangements to be banned.
Given that the electorate in Scotland is much more decisive on those issues, we should ask why the collusive relationship between government and business has not been rehearsed in any detail as an election, or as a referendum issue. Why was the alternative to British crony capitalism not at the heart of the Indyref debates?
There may have been progress in Scotland to deliver a new politics, one that is distinct from the grotesque cronyism of Westminster. Yet far from diminishing, the the influence of private sector has showed signs of intensifying. Of particular concern is the growth of the lobbying industry and the opportunities for revolving door appointments it brings forth. Likewise, while the unpalatable legacy of PFI is appreciated in Scotland more so than anywhere else and has appropriately been abolished, the alternative off-balance sheet funding scheme that replaced it, the Scottish Futures Trust (launched in 2008), remains a funding mechanism that makes government overly reliant on private capital. Moreover, the SNP may be rather complacent about the strength of feeling in the Scottish electorate as it continues to take its cues on taxing business not from the people, but from key figures in the business world.
As our survey indicates, banning revolving door appointments and abolishing PFI-type arrangements would be both a populist and realistic way of wrestling back some of the power from private capital in the public interest. The new politics must recognise that the overwhelming majority of the Scottish people want rid of the normalised collusion between business and government and the ways that it undermines any prospects of achieving a more equal society.
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Redefining corruption: Public attitudes to the relationship between government and business (Scotland results)
Q 1. A government minister who served in the Department of Health is part of a committee that awards a major contract to a private healthcare provider M.H.B. Ltd. Less than a year after leaving office, the same minister joins M.H.B. Ltd. as a Director. He is paid £100,000 a year and given a one-off gift of shares in the company worth £250,000.This appointment is within the current rules.
Do you think profiting from political experience in this way should be prohibited?
Q 2. M.H.B. Ltd has a tax bill for £250 million. The head of the government tax authority, Her Majesty’s Revenue and Customs (HMRC), negotiates a tax settlement with M.H.B. Ltd. and reduces its tax bill to £50 million. After leaving HMRC, the former head is appointed as a special advisor to the accountancy firm that helped M.H.B. Ltd. during negotiations with the government. This appointment is within the current rules. Do you think appointments like this should be prohibited?
Q 3. A government minister invites a senior representative of a major UK accountancy firm to help in the design of tax reform policies. This company provides technical advice that helps major corporate clients in tax avoidance. Do you think this type of appointment should be prohibited?
Q 4. A local government Department agrees a contract with a private building firm to build a hospital. Rather than being paid immediately for the work, the building firm will be allowed to rent the building back to the local authority on a 30 year lease. By the end of the contract, the building firm will earn a sum valued at around 5 times the original cost of the hospital. This cost will be at the expense of taxpayers. Do you think this type of contract should be prohibited?
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David Ellis is a Post-Doctoral Researcher and David Whyte is Professor of Socio-legal Studies, both at the University of Liverpool. The Scottish results of their British survey Redefining corruption: Public attitudes to the relationship between government and business are published here exclusively for Bella Caledonia.
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