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Cameron Can't Be Trusted on Transparency

12/04/2016 15:53

So, the PM's is in. The Chancellor's too, but a bit trimmed. Boris' is much bigger. Corbyn's was late. Many are unremarkable.

What real difference has it made that that our political leaders have published details of their tax affairs?

Not a lot.

Should we be demanding more: that all politicians publish annually? What about the tax affairs of politicians' family members? As the Panama papers have shown, offshoring money isn't something people necessarily do under their own name. It's done through spouses, trusted friends and by parents.

The risk of going down this path, as Aditya Chakrabortty noted yesterday, is that the publication of politicians' tax returns will descend into a morass of semi-titillating detail.... [but] will miss the wider truth.'

"At root, the Panama Papers are not about tax. They're not even about money. What the Panama Papers really depict is the corruption of our democracy."


As Chakrabortty rightly points out, what we have learnt from the leak is that the super-rich have secured a position where they can hide their money from the taxman - they have 'exited the economic system the rest of us have to live in'. Yet at the same time, they are being allowed, using their wealth, to set the rules in the societies they have quit through political funding and lobbying.

They have broken the rule: if you don't like the system, stay and reform it. Or leave. You don't get to do both. That wealthy elites can and do is what lies behind much discontent.

David Cameron may not feel it, but he has a good grasp on the public mood. He repeats it back to us time and again. The lack of 'fairness' of it all.

He echoes the unfairness felt by 'hardworking people who do the right thing and pay their taxes' when faced with industrial-scale tax avoidance. 'After years of abuse, people are rightly calling for more action,' he says. He 'gets' that the majority in Britain regard our political system as 'a cosy club at the top making decisions in their own interest' (the PM's words). 'I believe that secret corporate lobbying goes to the heart of why people are so fed up with politics,' he said.

Cameron's promised solution to tackling both tax avoidance and lobbying, at least publicly, is also the same: greater transparency.

Yet, anyone anticipating meaningful reforms in light of the Panama papers, would do well to scrutinise his record on 'shining the light of transparency on lobbying' (his words again). Has he really 'forced our politics to come clean about who is buying power and influence', as promised?

As reported yesterday, the transparency rules introduced by Cameron a year ago in the form of a register of lobbyists, are a sham.

In 12 months, only 124 lobbying firms have bothered to sign up to the government's register. The UK has the third largest lobbying industry in the world, estimated to be worth £2bn. Compare this to Ireland, where the influence industry is much smaller: there are 1198 lobbyists on its register (also introduced in 2015), almost ten times as many.

Over a quarter of lobbyists registered in the UK don't declare a single client, the interest that is ultimately seeking to influence policy. Sixty per cent register two or fewer clients. As this is the only piece of information of value they are required to register, it means we've learnt nothing, or next to nothing from their entries. Blank registrations include one of the UK's most influential lobbyists-for-hire (and the man behind the main anti-Brexit campaign), Roland Rudd. The government's register won't tell you, but his firm lobbies our politicians on behalf of, among others, scandal-hit car maker, VW; under-fire bookmaker, Paddy Power, and Google.

The register also tells us nothing about the influence of in-house corporate lobbyists. It reveals more about the contact the government has had with motorcross enthusiasts, the Amateur Motorcycle Association, than either oil giant, BP; major UK car manufacturer, Toyota; or the UK's powerful road lobby, the Automobile Association.

The UK's biggest fracking firm, Cuadrilla, is listed on the register as employing a single lobbying firm. In the real world, Cuadrilla employs 7 major UK lobbying firms (5 agencies directly, plus 2 through its support for fracking lobby groups) as part of an 'industry-wide offensive' to sway public and political opinion. You wouldn't know from looking.

Finally, if the register is to be believed, Berkshire-based lobbying agencies enjoy more ministerial ear-time than the big four accountancy firms. All four acknowledge that they are commercial lobbyists-for-hire by registering, but besides Ernst & Young declaring a couple of clients, reveal nothing on the register. The influence-seeking corporate clients of PricewaterhouseCoopers for example - the company accused of promoting corporate tax avoidance on an 'industrial scale' - remain secret.

This overwhelming lack of disclosure is by design.

Lobbyists aren't breaking the rules by not signing up, or by failing to declare their clients and activities on the register. The rules were carefully crafted by government in such a way as to be seen to be doing something, while revealing as little as possible.

What is transparent from the government's action on lobbying, is that David Cameron never wanted us to know who his government is 'having a quiet word with, whether any favours are being exchanged, and which lobbyists are wielding unhealthy influence', to quote him, again.

He said he understood concerns about this 'cosy club at the top'. He promised to open it up to public scrutiny. What he did was make sure that everything remained just as it was. Treat all promises of tax transparency with extreme caution.

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