How Corrupt is Britain?

David Whyte, David Whyte

• Publisher: Pluto Press
• Year: 2015
• ISBN:
  9781783712854
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Proceso político

Banks accused of rate-fixing. Members of Parliament cooking the books. Major defence contractors investigated over suspect arms deals. Police accused of being paid off by tabloids. The headlines are unrelenting these days. Perhaps it's high time we ask: just exactly how corrupt is Britain? David Whyte brings together a wide range of leading commentators and campaigners, offering a series of troubling answers. Unflinchingly facing the corruption in British public life, they show that it is no longer tenable to assume that corruption is something that happens elsewhere; corrupt practices are revealed across a wide range of venerated institutions, from local government to big business. These powerful exposes shine a light on the corruption fundamentally embedded in UK politics, police and finance.

Part I

Neoliberalism and Corruption

1

Moving Beyond a Narrow Definition of Corruption

David Beetham

In his introduction to this collection David Whyte refers to the World Bank’s definition of corruption as ‘the abuse of public office for private gain’, and he challenges the limitation of corruption implicit in this definition to the personal gain of office holders. Like him, I want to propose a wider conception which serves better to capture the different concerns of the contributors to this volume. These concerns include the following:

•	the capture of regulators and public officials by the corporate sector and its consultants
•	the ever-revolving door between government and business
•	the preferential access to ministers and officials enjoyed by the wealthy and powerful
•	corporate funding of political parties and politicians’ private offices in return for favours
•	the use of tax havens and other mechanisms to deprive the public purse of revenue
•	cover-ups of wrongdoing by officials to protect their personal reputation and position
•	police collusion in illegal information gathering by journalists.

Of these, perhaps only the last two could fit into a narrow World Bank definition of corruption as ‘the abuse of public office for private gain’, and we therefore need a wider conception of corruption if we are to capture what is distinctively worrying about these various practices. For that wider conception I propose ‘the distortion and subversion of the public realm in the service of private interests’. Crucial to this conception is the idea of a public realm which is more than simply the sum of public offices and their occupants. It includes the idea that the activities of government should serve a general or public interest rather than a set of private ones, and that there should be a transparent public debate to determine where the general interest lies. Such a debate is short-circuited by many of the practices outlined above, which systematically favour a limited set of special interests at the expense of more general ones. These practices make money, and the personal contacts and influence money can buy, a major determinant of public policy, even if the money does not directly line the pockets of office holders themselves. It is for this reason that we need a wider conception of corruption which goes beyond the narrow World Bank definition quoted above. To suggest that this is too normative a conception ignores the fact that any conception of ‘corruption’ must have a normative element, as the World Bank term ‘abuse of office’ itself entails.

Once we have articulated what is disturbing about the practices listed – what I call ‘the distortion and subversion of the public realm in the service of private interests’ – we need to explain why they have gained such a foothold in UK politics over the past few decades. The explanation lies in the privatisation of public services begun under Margaret Thatcher and continued by governments of all complexions ever since. Some services have been wholly privatised (public utilities), others contracted out by central or local government or public bodies like the NHS, while the construction and management of public infrastructure and buildings have been funded through the private finance initiative (PFI) programme. This record of privatisation is identified in the Introduction to this book as key to many of the concerns of the contributors to this volume.

Privatisation has itself been responsible for distortions of the public interest in the provision of essential public services, in which taxpayers have formed an impotent cash-cow for private profit. The utility providers constitute a de facto monopoly, inadequately regulated, which squeezes consumers in the interest of shareholders and directors’ fat remuneration packages. The privatisation of the railways has led to a fragmentation of services, the most expensive train fares in Europe and more than double the level of taxpayer subsidy that was provided under British Rail. Private service contractors are free to walk away from their contracts if they prove unprofitable, as has happened with the rail infrastructure company, with the modernisation of the London underground, with the failure of complex IT systems, and also in the health and local government sectors.¹ Or they provide an inadequate service, which can never be challenged because their terms of service are subject to commercial confidentiality clauses and immune from freedom of information scrutiny. Failures or fraudulent practices by private companies in the delivery of services, such as by G4S, Serco and Atos, prove no barrier to lucrative new contracts. Even PFI contracts can be sold on to third parties which use high interest charges and offshore jurisdictions to avoid paying corporation tax – a procedure that undermines the already questionable arithmetic on which the supposed advantage of the PFI system was originally based (see also Chapter 9).² And the process of privatisation itself can deprive taxpayers of much-needed revenue, as happened with the selling off of the Royal Mail, where the same company as advised the government on the price for shares was given a major allocation, and was thus able to benefit from the almost doubling in their price shortly after trading started.³

Such defects give the lie to the neoliberal dogma that the market is always superior to the public sector. In his book The Great Divestiture, Massimo Florio showed how the supposed gains in productivity and efficiency arising from privatisation had proved illusory, and that it brought all kinds of negative consequences for social welfare and the United Kingdom’s industrial development.⁴ Yet beyond the direct distortions of the public interest involved in so much privatisation, the process has also served to undermine the capacity and integrity of government itself. The hollowing out of government at central and local levels that result from so much outsourcing deprives government of the skills, experience and personnel that flow from providing services directly, and gives the private sector a key advantage when negotiating service contracts. It also leads to the burgeoning government use of private consultancies and business personnel in key positions, who will invariably recommend further privatisation and outsourcing as the solution to any public sector problem.⁵

More serious even than the loss of capacity is the loss of government integrity. With private firms hovering like vultures over the easy prey afforded by the guaranteed income of taxpayer-funded contracts, there is a ready market for the employment of newly retired ministers, civil servants and military commanders who can bring their inside knowledge and contacts to bear on the commissioning process. And the latter, in turn, while still in office have a considerable incentive to conduct themselves with an eye to their future well-remunerated employment as consultants or directors in the private sector. Hence the rapidly revolving door between government and business, which is documented in detail but inadequately policed by the so-called Advisory Committee on Business Appointments (ACoBA; see also Chapter 10). A glance at its website is enough to reveal the large numbers regularly marching through this revolving door.⁶

Then there is the huge corporate lobbying industry, enjoying in the words of a Commons Public Administration Select Committee Report, ‘privileged access and disproportionate influence … which is related to the amount of money they are able to bring to bear on the political process’.⁷ Their money funds political parties, think tanks enjoying charitable status and politicians’ private offices, and can effectively purchase seats in the second chamber of parliament.⁸

These practices may not meet the World Bank’s narrow definition of corruption, but they certainly count as such if we expand the conception in the way I have proposed. They all fit squarely as examples of the distortion and subversion of the public realm in the service of private interests, once we understand ‘the public realm’ to include more than the sum of public offices, and ‘private interests’ to involve more than the personal advantage of office holders themselves.

To be sure, the public is slowly waking up to the perverse effects of market penetration into the heart of the public sector. People are aware that they are being ripped off by the utility providers and the rail companies. They don’t want further privatisation or marketisation in the NHS. Through the activities of the Occupy Movement and UK Uncut they know about the scandals of corporate tax avoidance and the widespread use of tax havens. They are unhappy about the power of corporate lobbying and the revolving door, with former ministers selling themselves, in the words of former Labour government minister Stephen Byers, ‘like a cab for hire’.⁹ Yet they lack a coherent narrative which links these different phenomena together, explains their common causes and systematic effects. This would involve not only the kind of analysis offered here, but a changed evaluation of government – not as a negative obstacle to economic and social well-being, but as a necessary contributor to it.¹⁰

It would also require an even fuller conception of the public realm than was articulated at the outset of this chapter. Its essence lies not only in a sense of the common or public good, but also in a set of distinctive values, relationships and ways of working. Its core is a common citizenship and a sense of mutual responsibility when we fall on hard times. Its distinctive ethos is one of public service – that furthering the common good is a worthy calling, deserving of the best talents. And its goal is a quality of service provision available equally to all whatever their background or level of resources. Against this the market promotes individual self-interest, aggressive competition and unchecked inequality, while also offering the illusion of unlimited choice to the consumer. Such features may indeed have their place in the provision of consumer goods and some kinds of service. Yet they need to be complemented by a strong and distinctive public realm if market values are not to end up destroying the fabric of civilised society.¹¹

What we have been witnessing over the past 30 years has been the systematic erosion of this public realm as more and more of the public sector has been privatised, outsourced, or made subject to market principles. It is this process that has led to the long list of abuses catalogued at the outset of this chapter and by other contributors to this book. Is it any wonder that ministers, civil servants and military leaders should expect to use their office as a means of leveraging fat jobs in the private sector when those they rub shoulders with on a daily basis are doing the same in their own business sphere? Is it any wonder that those in the corporate sector should employ any means and connections they can to win lucrative contracts funded by our taxes, or work to promote further business opportunities when they are seconded to government service? Is it any wonder that politicians who look to the corporate sector to fund their electoral campaigns should be ready to return the favour with sympathetic policies and the offer of lordships?

Instead of the public sphere constituting a separate life domain, with its own values, relationships and ways of working, it has become an extension of the private market, permeated by the market’s logic and interests. Instead of a common citizenship, we have subordination to an oligarchy of the wealthy and powerful. Instead of a public service ethos we have the well-oiled revolving door between government and business. And instead of governments controlling the excesses of the corporate sector in the public interest, they have increasingly become its chief promotional agent. Without a radical programme to restore the distinctiveness and integrity of the public sphere we shall have to learn to live with the recurrent abuses attendant upon its progressive dismemberment by market forces and their cheerleaders.

Notes

1	For the London Underground as a case study see the House of Lords ...