News 04th Apr 2017

Corruption and British Politics: What We Can and Can’t Learn from the Osborne Case


Robert Barrington

Executive Director

Robert joined Transparency International UK in 2008 and was appointed as Executive Director in 2013. His areas of expertise include the Bribery Act integrity in the private sector and corruption within the UK. Recent projects and publications include ‘Anti-Bribery Due Diligence for Transactions’, ‘Adequate Procedures & Guidance to the UK Bribery Act’ and ‘Corruption in the UK’.

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Surveys show that the British public believe our politics and politicians to be corrupt.  But politicians don’t believe it, and all too often act in ways that seem to feather their own nests while ignoring the public interest.  The George Osborne affair has put this gilded world in the spotlight – and suggests that the Prime Minister needs to take action if she genuinely wants ‘a country that works for everyone’.

1. Is what he did corrupt?

One of the problems in researching corruption is that it’s in the interests of all the participants to hide it.  The victims – everyone else – often don’t know they are victims, and if they do can’t usually prove it.  So we don’t know much about genuine corruption in UK politics, or whether George Osborne has acted corruptly.

To illustrate this: we know that there is lots of lobbying, and sometimes surprising policy decisions, laws and regulations get made in the interests of a small number who benefit financially.  Some firms that employ former government ministers end up poorly regulated, or with large government contracts.  Coincidence?  Quite possibly – without being in the room, we just don’t know.  Consider also the revolving door.  We know that the Big Four accounting firms like KPMG seconded dozens of their own staff to the Treasury to advise on tax law – and we know that those accountancy firms’ corporate clients have benefitted greatly from the UK’s tax laws.  Corruption or coincidence – or something else?

Of course, part of this comes down to your definition of corruption, and it can be argued that TI’s standard definition of corruption – ‘the abuse of entrusted power for private gain’ – does not quite capture this very British form of establishment back-scratching, mutual interest and pervasive tilting of the system towards those who know how to work it.

But corruption is a big word, and it may be that the significance of the Osborne case is not that he himself acted corruptly, but what he has shown us about the gaping holes in the system and how it will be perceived by the wider public.

2. Does what he did reveal loopholes which could be used by those who are corrupt?

Let’s be clear about one thing: the law of averages tells us that, by any definition, some of our parliamentarians and senior civil servants will be out and out crooks.  Remember MPs expenses?  Lots of people’s actions fell into a grey area, so they were not prosecuted.  But five were prosecuted and went to jail – for example, Elliot Morley, who claimed for a mortgage that did not even exist.  So at minimum we need a system that does not allow the crooked to get away with it.  Ideally, a system that rewards and encourages good behaviour, and disincentivises poor behaviour.

TI’s research had found no fewer than 39 loopholes, even before the Osborne affair, and that has shown some more.

Take ACOBA, for example (the Advisory Committee on Business Appointments, which is meant to clear post-ministerial employment in advance).  It is so toothless that Osborne clearly felt no pressure to clear his Evening Standard post with them before he accepted and announced the job.  And even if ACOBA had advised him not to take the job, he could have ignored the advice with no penalty.  It’s worth remembering that despite being a former Chancellor he had previously been cleared by ACOBA to take up his job at Blackrock – just like Andrew Lansley the former Health Secretary now working for a healthcare consultancy advising on NHS contracting, and former Defence Secretary Geoff Hoon and dozens of senior military officers now working for defence companies.

Think also of the basic issue of conflict of interest, which the Osborne case has highlighted.  As Chancellor he was made and still remains a Privy Councillor – privy to state secrets, and sworn to keep them…secret.  As a newspaper editor he should be fearlessly pursuing transparency.

So the picture is this: even without going into deep definitions of corruption, we can confidently expect that some people in parliament and the civil service are corrupt.  We already knew there were 39 loopholes.  George Osborne has shown us a few more.

3. If what he did is seen as corrupt, what are the consequences?

Opinion surveys regularly show that the public have a low opinion of our politicians.  59% of UK citizens believe that the UK Government is ‘entirely’ or ‘to a large extent’ run by a few big entities acting in their own best interests.  67% simply say that UK political parties are corrupt.

While it may seem a natural and unproblematic transition to George Osborne himself, to ordinary voters moving in a few months from being the Chancellor to a £600,000 two-day-a-month job in the City looks simply corrupt.  It looks like the gilded out-of-touch elite feathering their own nests, and it’s a very short leap of the imagination to conclude they do the same when they are in office.

Donald Trump came to power claiming he would ‘drain the swamp.’  It has been a feature of recent politics around the world – Russia, Turkey, Hungary, to name but a few – that ‘strongmen’ come to power on an anti-corruption ticket and very shortly afterwards become even worse than those they managed to defeat.  Elsewhere – Austria, France, the Netherlands – populist politicians ride the wave of the anti-establishment, anti-elitist mood.  This was surely what Theresa May was responding to when she came to power, in her post-Brexit Downing Street speech, promising ‘a country that is run for everyone’.

Could it happen here?  The Osborne affair comes on top of many other such unsavoury moments.  It’s difficult to know whether the tipping point will be an accumulation of these smaller incidents, or one gob-smackingly large one.  But there is a tipping point, and the UK will reach it one day unless Theresa May takes action.

Public or private interests?

In sum, do we want a ‘government that works for everyone’, or politicians who work for anyone who can pay for their time?   MPs like George Osborne argue that it brings a useful external perspective to their parliamentary role if they have outside jobs as well as being an MP.  It is even less straightforward once people have left office.  Former ministers, MPs and civil servants can rightly say that they, too, need to earn a living; and the skills and experience they gained can be of use in their life after public office.  They are private citizens – but do they also retain wider responsibilities?

The problems come broadly in four areas: the revolving door, conflicts of interest, lobbying and party funding.  In all of these, the remedies are a mixture of properly enforcing existing rules, transparency, behavioural incentives, new rules, stronger oversights and genuine disincentives.

Will the PM grasp the nettle?

There is an obvious place to make a commitment to reform: the national Anti-Corruption Strategy that the government was meant to publish by December last year, and which has been continually delayed.  It is said that one of the battlegrounds is whether corruption in politics should be included.  Certainly, it is a key test of whether this government understands the nature of corruption in the UK and how the British people feel about it.

But those in politics seem to be in active denial about the problem.  They characterise the noise that surrounds each scandal as a by-product of party politics, without ever being willing to respond to the real issues.

Of course, there are many vested interests who have good reason not to admit there is a problem, let alone implement solutions: all those in parliament, government and the senior military and civil service posts who would not mind a £600,000 2-day-a-month City job, or to transition smoothly into something well-paid and not too taxing. £5,000 a day for advising Chinese ‘investors’? Call a former Foreign Secretary like Malcolm Rifkind; need a ‘cab for hire’?  Try former Transport Secretary Stephen Byers.

It’s an unsavoury picture, but not yet a crisis – though it could become one at any time.  So here are three suggestions about what the Prime Minister could do.

1. Admit the problem.  Give corruption in politics a prominent place in the forthcoming Anti-Corruption Strategy.  Not buried in the small print, or blamed on local government.  Have the courage to call it out.

2. Abolish ACOBA.  It’s a laughing stock, and as a Cabinet Office NDPB could be abolished at the stroke of the prime ministerial pen.  Replace it with something that has teeth and power.

3. Work out what to do.  Yes, these are complex issues; yes the situation can be improved.  For all that there are crooks, we in general have excellent parliamentarians, ministers and civil servants.  Get that brainpower to work in the public interest, not in self-interest.  Ask the Parliamentary Standards Commissioner – or indeed any other body that has expertise and credibility –  to have a thorough look at this whole issue.

One final thought.  The Government has an Anti-Corruption Champion, Sir Eric Pickles: perhaps time for him to take ownership of an issue which the British public believes to be the most important part of his brief?


image: Milner (CC BY 2.0)