Over the last two decades I have spent quite a lot of time tackling the issue of corruption. Tackling tax evasion has always been a theme of my work on tax justice. Only yesterday I took part in a meeting in Chile (via Zoom, of course) discussing how better appraisal of tax gaps can help focus resources on tackling this issue.
Two developments are, therefore, worthy of note. One is the Trump Organisation's conviction for tax fraud. This was not, of course, a conviction for Trump personally, and the penalty will not be financially significant, but the message is. The prosecution went out of its way to make clear that Trump knew of and approved the fraudulent actions. Whether or not prosecution of Trump himself follows (and I would hope it will, because high profile convictions for tax fraud have a big impact on tax morale) the move is significant. Trump is already proving to be an electoral liability for the Republicans, as the Georgia run off has proved, yet again. Convictions will only further undermine his chance of a comeback.
Michelle Mone provides the other development. I gather Mone still denies any wrong doing relating to PPE contracts and she has the legal right to maintain that position. The Guardian's patient and painstaking journalism that has investigated her case in great detail suggests otherwise. It will be interesting to note if Labour's successful humble address in the Commons yesterday, asking for the papers with regard to this case to be disclosed by the government, provides the information needed to prove what really happened. The fact that the Tories were almost entirely absent from the Commons during this debate is the clearest indication of the embarrassment this might cause them. There is a tax dimension to this issue as well: there is a good argument that the payment of £29 million from a trust to Mone should be taxable for services supplied in securing the contracts that did in the first instance give rise to the payment being made. Whether that tax has been paid is not known.
Both cases matter. They indicate the neoliberal indifference to law on those who think themselves part of an elite.
Both demonstrate the causal attitude of some who think they have power towards taxation.
The denials are as telling: those involved are more than willing to try to use the law (including that offshore in the case of Mone) to try to deny the allegations made against them.
However looked at, and whatever the outcome in the Mone case, these cases have the look and feel of corruption: gain was made whilst due process was ignored, and this was not be accident, but by desire.
What can be done about this? First, publicity matters. Cases like this are vital, and there should be immunity from libel action for those journalists seeking to ask questions in cases such as these so long as there is no malicious intent. Accountability is a public good and must be supported.
Second, the importance of having accounting on the public record cannot be emphasised enough. The practice of hiding accounting, beneficial ownership and government procurement practices from view has gone on for too long. Transparency is the key to free and fair markets. It is notable that those on the right are always those opposing both.
Third, there must be a willingness to prosecute. This government is dragging its feet. It has not even suspended the Tory whip in the Lords on Mone in her role as Baroness Mone, created by David Cameron.
One day we might have governments led by people who believe in upholding the law. It won't happen though until the neoliberal era is over. The abuse of law is at the heart of neoliberal thinking, where the opportunity to arbitrage the provisions of the law for private gain is seen as legitimate activity. It is not. And that is a message that still has to be said, time and again, and then again.
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What I do not understand about the Labour handling of the ‘humble address’ was the lack of evidence I have seen that Labour (or the media) had brought to attention the very serious difficulty well established businesses in Britain that already supplied good quality PPE to access the ‘VIP lane’. I recall stories of the frustration of competent PPE suppliers being recounted by media during the height of Covi-19. It should be very easy to journalists, Labour politicians or even spads to follow the trail to these sources and bring out the depth of the problem. Our Parliament flounders. The humble address produced a ‘win’ for Labour, but the sources will still not be fully revealed to the public, and commercial privacy still trumps (an apt word) the right of the public to know. This simply isn’t good enough – Labour, and Parliament sets the bar too low; because Parliament fails to recognise its own deep failings.
Good point
All very well summed up and said – thank you.
By coincidence (?), the latest from the Parody Project is ‘Prison Cells (Are Waiting)’ (https://www.youtube.com/watch?v=F-aj5G_ZhsY ). If only…
An excellent piece that moves us closer to a major if not the major reason that that the quality of life experienced by 80/90% of the population of the UK has declined over the last forty years in what is supposed to be the 5th/6th richest country in the world.
It has always seemed to me that most obvious feature of redesigning a society to make it easier for the already rich to become even richer is that the first thing they do is to use the new money to find a way of defeating the purpose of the laws of the country,
As you have pointed out, as well as all the legal, questionably legal and downright criminal ways they have used to do it, the Tories have now added chronically underfunding the law preserving institutions in our country so that they are incapable of doing their jobs.
It leads me back to the kind of radical argument that I grew up with in the 1960s, how much money does anybody actually need? Where might we draw the line, 10-20 million, 100-200million or 1-2 billion.
Based on the experience of the last forty years, how much can one person own before they inevitably lose track of any sense of the common good?
An interesting question
Is 10 million too high?
By the time you go beyond $20Bn, I suspect you come to believe that you are the Common Good.
🙂
Most people have no concept of big numbers. If you spend £1 every second, £60 every hour, £86, 400 every day you will spend £1 million in 11 days. To spend £1 billion would take you over 32 years.
The existence of billionaires should be seen as a damning indictment of the failure of tax policy and business regulation, both of which are of course anathema to neoliberalism
When considering the tax position, remember that Baroness Mone is married to Doug Barrowman…
Millions, billions. It is hard to keep track.
As I understand it, the allegation is Mone helped one company (seemingly controlled by her husband) to secure a £200m contract (selling PPE which was ultimately assessed as not suitable for front-line use) and that company made at least £65m of profits that was paid to Barrowman, of which £29m ended up in a trust for Mone and her children. Lucky her. Quite the commission. See https://www.theguardian.com/uk-news/2022/dec/06/revealed-second-firm-pushed-by-michelle-mone-was-secret-entity-of-husbands-office
This sounds like a straightforward example of the use of political connections for private advantage that was routine under the Johnson government, but it is a drop in the ocean of the PPE scandal.
To quote from here: https://commonslibrary.parliament.uk/research-briefings/cdp-2022-0229/
“NAO’s most recent investigation into the management of PPE contracts by the Department of Health and Social Care during the pandemic was published in March 2022. According to the report, by January 2022 the Department had awarded nearly 10,000 contracts of PPE worth £13.1 billion. Of these, the DHSC has identified some 3.6 billion PPE items (11% of the total) as “not currently suitable” for front-line services (some of these items could be repurposed). These items were purchased at a cost of £2.9 billion.”
10,000 contracts worth £13 billion is about £1.3 million each, so £200 million is a big one. And 11% of the items were not suitable, but somehow accounted for 22% of the cost (2.9/13.1). Well, 32.5% (65/200) is a nice profit margin.
Thanks
Companies House reports – “Accounts over due”, for LFI Diagnostics Ltd. The two directors are both Chinese, resident in Hong Kong, one seems to be a Principal in a wholesaler business.
Regarding PPE Medpro, it is absolutely astounding how a company incorporated on 12 May 2020, with £100 of share capital, and its sole individual shareholder and two of its three directors all working at a corporate services provider based on the Isle of Man – https://knoxhousetrust.com/ – could win government supply contracts for over £200m within months.
Despite becoming prominent recently, this concern is not new.
https://twitter.com/antonyslumbers/status/1314858150688890882
https://www.theguardian.com/world/2020/dec/21/firm-with-mystery-investors-wins-200m-of-ppe-contracts-via-high-priority-lane
The company’s filed accounts for the year to 5 April 2021 are laughable. https://find-and-update.company-information.service.gov.uk/company/12597000/filing-history
11 pages, mostly blank white space with a few lines of text. Just a balance sheet with very brief notes. No fixed assets: nil. £4m of debtors (an unnamed related party) and £0.8m of investments, and £3m of creditors. No income statement or P&L, no disclosure of turnover, or profits made, or dividends paid.
And a debenture owed to a BVI company, Perree (Ptc) Limited, which carefully does not disclose anything much about the debt.
Looking at the PSC register, is Anthony Page (the director and shareholder, from Knox House) really the only “person with significant control” of the company through the shares being registered in his name? Does he have beneficial ownership or is there a trust, and if so does anyone have significant influence or control over that trust?
Typical non-disclosure now permitted by U.K. company law
Andrew,
Very well presented double comment, if I may say. We can see here that business confidentiality is so powerful an ideological drug for the neoliberal addict, it reduces Conservative politicians (like James Cartlidge, a minor Treasury minister today) to an inchoate, persistent vegetative state; which is accompanied by a very distinctive gabbling sound, curiously like Turkeys discovering the unique significance for them, of a Christmas menu.
Business confidentiality is now so sacred, so imbued with retributive authority, no Conservative will even dare speak about it.
Agreed
I have spent decades fighting it
If it is proven that she was guilty of wrongdoing, would she face any legal penalty? Confiscation of the money, fine, prison?
If those poor people who ran post offices when the computer system was giving false reports, can be sent to prison, I hope that being rich and a peer will not exempt her.
Genuine answer: who knows? It is not clear
Richard, great topic. And a new word for you – ‘Toryfied’ (terrified); these people are ‘Toryfing’ (terrifying) monsters.
Unfortunately the citizen now has to be vigilant to casual theft, graft and scraping of their money as that ‘casual’ attitude to probity has ‘trickled down’. Simple honesty and curticy are too frequently things of the past. Perhaps we can classify that as deliberate and a low-level fraud.
We’ve all experienced Website and Parking Ticket arm-wrestling sports, designed for us to go away exhausted, give in confused or pay that refund fee.
I am hoping for incarceration in the Tower. It goes with the ermine and red robes.
https://www.theyworkforyou.com/mp/25455/baroness_mone
Michelle Mone’s record in the Lords. Someone on the radio this morning said he had had a cup of tea with her when she first went in, but can’t recall meeting her since. Somehow, I don’t think she will be missed.
I am sure she won’t be
Wee typo: “Both demonstrate the causal attitude …” should be casual?
Yes, sorry. I am human.
Again Tony the Liar and Gordon Gekko in 97 could have dissolved the tax havens, virtually all of them are Crown Colonies and reset the tax laws in the Isle of Man and the Channel Islands. The Labour party is part of the Establishment. Until those who express an interest in real change are prepared to actually do something about it there will be no change. That will involve personal risk and most don’t have the bottle – so it goes.
It took massive effort on my part (quite a lot) to get then to even comprehend the issue
To join the dots a little, Anthony Page and his former co-director of PPE Medpro, Voirrey Coole, work for the Knox organisation on the Isle of Man, as the Knox House Trust website shows. The principal of Knox is Michelle Mone’s husband, Doug Barrowman. Chief among the services provided by Knox/AML (the A in AML being for Aston, after Barrowman’s favourite car, Aston Martin) has been the promotion of tax avoidance schemes to UK residents.
The balance on PPE Medpro’s P&L account at 5 April 2021 is £,3,890,109. The tax provision is £913,019. Add those together, £4,803,128 is most likely the profit before tax for the period. £913,019 is 19% of that figure; 19% being the prevailing rate of Corporation Tax. Whoever prepared the accounts (and the company directors who must have approved them) obviously expected the taxable profits to be £4.8m. The Guardian report suggests the £65m came out of PPE Medpro and into the various trusts by October 2020. I really hope HMRC have clocked this.