Ivan Horrocks, for whose thinking I have much regard, wrote this as a comment on the blog this morning, responding to the story about the Public Accounts Committee criticising the role of the Big 4 in creating tax policy. I thought it worth sharing with a broader audience that a post gets:
I've been waiting for the PAC to catch up with blogs and comments on this matter that have appeared here over the past year, and now they have. That's good. But two problems now confront doing anything about this situation.
The first is that the views and opinions of Parliamentary Committees can be — and routinely are — ignored by government. That's not to say they cannot be effective at drawing attention to issues, and we've seen the PAC do that this past year or so, as did the Culture, Media and Sport Committee with phone hacking. Ultimately therefore the PAC's strategy has to be to keep on, and on about this until the government is embarrased into doing something about it.
The second problem is far more fundamental and thus more difficult to tackle. This is that at senior, managerial, levels, in central government (and to a lesser but growing extent in local government and public services more generally) public administration and public policy making in Britain has been turned from serving the broader public interest, to serving the interests of corporate Britain, the 1% and those individuals and organisations (such as the big four accountancy firms)whose role in society it is to promote and support the narrow interests of this ‘elite.'
This has been a long process that started for legitimate reasons in the 1960s and began to expand and speed up once Thatcher came to power. New Labour — as we might expect — continued to encourage the corporate takeover of policy making and public adminstration, with the likes of Mandelson et al happy to go along with the myth that the interests of big business almost always and everywhere serve the interests of the general public (or if they don't then the public interest is almost always secondary — though often rhetoric would suggest the reverse).
But the developments under Blair and Brown are dwarfed by what we've seen happen under the ConDem coalition. Any remaining vestiges of an open and plural policy process — that is, one that allows the views and opinions of multiple stakeholders to be taken into account — went out of the window within the first year (and as the membership of HMRC Board illustrates, the same happened with regulatory agencies). Meanwhile, the ethos, values and practices of commercial management continue to drive out the remaining traces of, and belief in, PUBLIC adminstration and management.
And so we come to what you outline here, Richard. Secondees from commercial organisations who are so confident that their ilk now control government, and that the few remaining civil servants who still see themselves as public servants are so cowed and intimidated that they dare not speak up (e.g. Department for Education, Home Office, HMRC, etc), that they no longer even feel the need to pretend to be working FOR government and the public interest.
And they are right to feel so, of course, because for the first time since the 19th century we have a government that believes absolutely that government by the market — and thus policy making and public adminstration that is driven by those interests and steered by representatives of this ‘class' — is what representative democracy is all about. It is, as has been noted here before on many occasions, a form of 21st century feudalism. That is what the PAC, you and your blog and others must now fight.
I agree with that. It is democracy that is at stake. And it's time all politicians realised. Too few do.
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you should know that treasury officials have effectively already said they are ignoring what the PAC say about all this.
Of course
They have been captured
Just as once pro-slavery thinkers controlled government
that did not stop change
to be clear, by treasury officials I am also including senior government ministers as well
They may be worse, of course
In fact, seeing them in action – they are worse
This was one of the points I made sure I picked up on in my comment, Anthony. Parliamentary Committees are routinely ignored, and if I had time to look, I’m sure I’d find that that’s even more likely to be the case where the Chair of a Committee is not from the party (or parties) in government. So Margaret Hodge has a double stuggle.
Sol Hughes is saying they’re deeply embedded in the Labour party too, sad to say: http://peoplesplaindealer.blogspot.co.uk/2013/04/ed-balls-has-subcontracted-labours.html
I drew attention to this in a comment to one of Richard’s blogs a few weeks ago, Strategist. For many years now the corrupting influence (as I would see it) of the big consultancy companies (which pretty much means the big four accountancy firms, plus the likes of McKinsey, etc)on the policy process has always started while a political party is in opposition. The result is that collectively and individually (as MPs) a party is ‘captured’ long before entering office.
Of course, we can question the depth and scope of that capture, and its a very difficult thing to research. But I think there’s little doubt that as many politicians have increasingly come to regard the only desirable post MP/government employment option as some form of private sector employment – and usually in an area they are regarded as having some expertise in – then their willingness to question the desirability (from the perspective of maintaining a healthy democracy) of many forms of potential or actual corporate capture or compromise has diminished considerably.
Indeed, we can take the whole situation a stage further, and posit that it could potentially be very useful to a politician/minister (or civil servant) who is looking to their future employment prospects to encourage and nurture the involvement of commercial organisations and personnel in a policy area over which they have some responsibility. The contacts made and networks accessed could prove invaluable. Perhaps the example you link to illustrates in some ways what I describe.
Or even ‘struggle’ 🙂
“Business friendly” – more than just a codeword, then?
So what we have here is poacher turned gamekeeper turned poacher again. Were these secondees required when working with the government, to sign the Official Secrets Act (as I am working in the Public Sector). If they were engaged in such dubious financial acts after secondment and had signed the Official Secret Act then surely they could be charged under this act as ultimatly they were seeking, with information they they were privvy to in their secondment, to defraud the public purse.
Maybe the threat of spell at Her Majesty’s Pleasure would concentrate the minds of the Big 4.
please dont use one of Hodge’s soundbites. In my view she is courting media attention at the expense of accuracy over the issues – the celebrity of all this is detracting from the important messages in my opinion. Her responses on the Today programme were ridiculous, ranging from either incredularity or just plain laughing at the accountant which detracts from her position. She would have done better to actually make some points backed up by evidence frankly.
You really don’t realise it is you who looks the fool, do you?
Please stop wasting my time
I’m sure there’s a place for you on Tim Worstall’s blog
im not sure what you are trying to say, all i am saying is that she had a good opportunity to make her points and didnt, preferring to use the time to laugh.
I do agree with her that a code of practice in terms of these secondment arrangements is a good idea though as it introduces clarity into the arrangement for both sides (and the public, assuming the code is made public obviously).
Respectfully, the vast majority would disagree with you
The point is that when they return to poaching they have fixed things in their favour, so no need for telling secrets.
The PAC and others really need to consider making common cause with the EU Commission and more specifically the proposals put forward by Commissioner Barnier on audit reform. The Big 4 are an international problem that need to be dealt with internationally – especially given that they got the Treasury and UK Govt on side a long time ago when the Barnier proposals were first announced. Personally, I think the time has come for audits to be performed by “pure” audit firms which are not entitled to engage in other activities – the profession has repeatedly demonstrated its failure to properly manage conflicts of interest. And I am not sure that this is a problem which is just confined to the Big 4 – many smaller firms often take an even more lax approach when it comes to bending accounting so as to evade tax and other requirements.
Some attention also needs to be paid to the activities of those who leave often much less well paid jobs at the HMRC to join the tax departments of accounting firms. Gamekeepers are often the best poachers.
Ivan Horrocks is absolutely right, I have said previously that the HMRC Large Business Service’s philosophy is one of “customer facilitation” in other words “help” them to get their tax right rather than challenging them robustly by carrying out in depth transaction analysis ( as used to happen). The relationship has become too cosy – evidenced by the preponderance of ex private sector individuals on the HMRC board- we no longer have an impartial service
The capture of policy making by the big consultancy firms, corporate funded think tanks and the carousel of politicians and civil servants in and out of the private sector, or into corporate funded academic posts, is well illustrated by the involvement of Unum, a US private health employment insurer. To add insult to injury, Unum advertise their insurance policies in the media by referencing the inadequacy of state provision.. the inadequacy of benefits being that, which they themselves designed.
Ultimately, this all stems back to the determination of the US to ‘liberalise’ and harmonise global markets for the benefit of their corporate owners, the 0.01% (The American century/Washington Consensus/GATS). Heath’s government began the process but it was Mrs Thatcher who provided the conditions for their dismantling of the postwar consensus by stealth. The irony is that many/most of the politicians subsequently involved seem to have not fully realised the underlying agenda or the implications for the UK economy of the policies designed by the financial and corporate sectors.
http://think-left.org/2013/04/15/mrs-thatcher-was-not-the-wicked-witch-of-the-west/
However, George Osborne’s glee when he voices another ‘big’ lie suggests that he may be well aware that he is implementing the financial-corporate ‘heist’. This is a post-democracy government determined to impose an even greater level of corporate control with a rapid adoption of the US-EU FTA by 2014. A corporate tribunal will then take supremacy over sovereign governments and have the power to require changes to domestic legislation such as employment and environmental protection… in the name of creating a level playing field for the ‘free-market’ to operate. Level for whom, and what free-market?