Beginning to See the Light: Power, Corruption, and Brexit 

 

Before the main event, a brief diversion into the World Cup, at which headlines are still dominated by protests against the repressive host nation, and FIFA, their toadies – by Philip Gilbert

 
Teams continue to protest subtly, standing up for universal rights, for tolerance and freedom. This should be of greater importance than 22-people kicking a ball around, it’s unfortunate that FIFA seems unable to understand, or accept this. 

Last week I featured the Iranian players refusing to sing their anthem in a silent protest against their home regime, this week we salute the German team photographed with their hands over their mouths after Fifa stopped them and six other nations from wearing a OneLove armband. 

As Germany’s captain, Manuel Neuer, explained after the game; ‘We said they can take our armband, but as much as Fifa might want to, they will never silence us. We stand for our values and for human rights. We wanted to show that.’ 

FIFA are living proof that nothing and no one is immune to corruption, and that absolute power does corrupt.

Unfortunately, so is our government. Stories of cronyism allied to PPE procurement during Covid are nothing new, however the recent revelations about Michelle Mone and her children secretly received £29m originating from the profits of a PPE business that she recommended is worth looking at in greater detail. 

Firstly, she was undoubtedly conflicted. Secondly, it highlights the lack of due diligence afforded to projects that went via the Tory ‘VIP lane’. 

By way of background, PPE Medpro was referred by Lady Mone, a Tory peer, to the Cabinet Office in May 2020, five days before it was even registered as a company.

Contact was via the then ministers Michael Gove and Conservative peer Lord Agnew, the latter referred PPE Medpro to the ‘VIP lane’, fast-tracking the bid for public contracts, which resulted in the business being awarded a contract worth £203m to supply face masks and sterile surgical gowns.  

It now appears that tens of millions of pounds from those contracts ended up in offshore accounts connected to the individuals involved. 

We know that 25m surgical gowns, for which the government paid PPE Medpro £122m of our money, were subsequently rejected after inspection. They were never even used, and the government is trying to recover this money. For its part, PPE Medpro insists the gowns passed inspection and that the company – and, presumably, the beneficiaries of its profits – are entitled to keep the money. 

There are still outstanding answers, and this includes her previous denials of involvement in PPE Medpro and her apparent failure to declare it. When asked about this omission, her lawyer replied: ‘Baroness Mone did not declare any interest as she did not benefit financially and was not connected to PPE Medpro in any capacity.’  

Documents appear to show that Tens of millions of pounds of PPE Medpro’s profits were later transferred to a secret offshore trust of which Mone and her adult children were the beneficiaries. They also show that the secret payment to the trust was via Mone’s husband, Douglas Barrowman, who weeks earlier had received at least £65m in profits from PPE Medpro. 
 

Tens of millions of pounds of PPE Medpro’s profits were later transferred to a secret offshore trust of which Mone and her adult children were the beneficiaries

 
Lady Mone is being investigated by the Lords commissioner for standards after being accused of failing to declare an interest in PPE Medpro. The firm is also being pursued by HM Revenue and Customs, apparently for unpaid taxes. It says that it will ‘pay in full‘ if any outstanding moneys are owed. 

This case shouldn’t obscure the bigger picture; this government has written off more than £9bn on PPE bought with our money, that was deemed unfit for use – unusable, overpriced or undelivered.

We, the taxpayers, are still paying £770,000 every day on the storage of PPE that is unfit for use, and amount that would suffice to put C.36,000 children into part-time nursery care.  

It would seem that this shameful government have learnt nothing from his shambles, as the new procurement bill gives them free rein to hand out billions of pounds of taxpayers’ cash once more.  

The £9bn that was wasted on unusable PPE, is only a billion short of what the health secretary estimates nurses pay demands to total; a 19.2% pay rise costing £10bn a year. You don’t see their request being fast-tracked through the VIP Lane anytime soon. 

At the time the government was squandering our money on their mates, nurses and the NHS were everyone’s favourites; Johnson referred to them as ‘angels‘ and encouraged us to stand outside on Thursday evenings  to ‘clap for them.’  

Applause was as good as it got; the RCN estimate that despite a pay rise of about £1,400 awarded in the summer, experienced nurses were worse off by 20% in real terms due to successive below-inflation awards since 2010. Because they are so poorly paid there is a shortage of nurses, but never fear, the government has found a solution, paying billions of pounds for agency staff to fill the gaps they have created. 

Last year, 25,000 nursing staff around the UK had left the Nursing and Midwifery Council register. There are 47,000 unfilled NHS registered nurse posts in England alone. 

The health secretary, Steve Barclay, said he was ‘hugely grateful‘ for the hard work of nurses, but  he refused to open formal talks and described the RCN’s demands as ‘not affordable‘. What he really means is it’s about priorities. Nurses are unlikely to vote Tory, and there is lots of political mileage in whipping-up anti-nurses fury in the Daily Mail, and Fascist GB News.  

All of this should be fertile territory for Labour, at least Angela Rayner is doing her bit by raising questions about PPE Medpro. Unfortunately, the same can’t be said for Keir Starmer, who, other than some useful cameo’s in PMQ’s seems conspicuous by his silence. When he does speak he seems ‘light blue’, a Tory clone who is nice, not racist, and middle-of-the-road. 

For years I have believed that Labour loses elections rather than the Tory’s actually winning them. Starmer has always seemed terrified of reigniting the Brexit fires, but assuming he wants to undo the damage done, he has an open goal to aim at. 

A recent YouGov poll on Brexit shows the following: 
 

• 56% of people think we were wrong to leave the EU and only 32% that we were right.  
• 19% of those who own up to having voted leave now think they were wrong.  

 

 
• The only age group containing a majority still in favour of Brexit is the over-65s . 
• 88% of those who voted Labour in 2019 think leave was the wrong decision.   

 
Even some loyal Starmer supporters, resolved to do whatever it takes to win this time, struggle with watching him hold the Brexit line just as public opinion seems to be shifting against it, with a new Redfield and Wilton poll showing 57% would now vote to rejoin the EU. It’s dispiriting, too, to watch business make the case for more immigration while a Labour party that prides itself on being serious and honest about the big challenges hides behind its skirt. 

Despite this, Starmer has said that Brexit has already happened and ‘ripping up‘ the deal would lead to years more wrangling with Brussels. Within this he has ruled out bringing back free movement of people between Britain and the EU, saying it would be a ‘red line‘ for Labour if it gets into power – despite supporting the policy just three years ago. 

In addition, Starmer also ruled out a ‘Swiss-style’ deal with the EU, which would allow access to the single market but require more generous immigration rules. 

He told the Mail on Sunday: ‘A Swiss deal simply wouldn’t work for Britain. We’ll have a stronger trading relationship and we’ll reduce red tape for British business – but freedom of movement is a red line for me. It was part of the deal of being in the EU but since we left I’ve been clear it won’t come back under my government. Ripping up the Brexit deal would lead to years more wrangling and arguing, when we should be facing the future.’ 

The Mail on Sunday, oh c’mon, he will need to be a much darker shade of blue to get votes from that corner. As for ‘facing the future,’ while we are stuck with this terrible Brexit the only future we have is grim! 
 

‘freedom of movement is a red line for me. It was part of the deal of being in the EU but since we left I’ve been clear it won’t come back under my government’

 
The unpalatable truth is that, as pre-Britain joining the EU, we are once again the ‘sick man of Europe.‘ According to the OECD, of the group of 20 leading economies, only Russia is performing worse than the UK, and they are at war! 

The OBR calculates the cumulative damage of Brexit to be C.4% p.a. off our potential GDP. As Michael Saunders, a former member of the Bank of England’s monetary policy committee, has said: ‘The need for tax rises [and] spending cuts wouldn’t be there if Brexit hadn’t reduced the economy’s potential output so much.’  

Most of the problems derive from the adverse impact on international trade of Brexit as businesses struggle with the increased customs checks and bureaucracy involved in exporting to Europe. 

The OBR report published this month assumes UK trading intensity will be 15% lower in the long run. 

Liz Truss is no loss as PM, but she did understand that economic growth was needed. If her diagnosis was correct, her treatment of tax cuts for the richest was not. She stated that anyone who opposed this was ‘anti-growth’; again she was on the right lines. What she should have said was that anyone who supports Brexit is anti-growth, because Brexit is destroying our trade, and without trade you don’t get growth. 

We were told that leaving the EU and agreeing our own trade deals was the route to nirvana, it has turned out to be the road to perdition. 

One of the more meaningful post-Brexit trade deals should have been the one  Liz Truss signed with Japan, when she was trade secretary. It was described as a ‘landmark moment for Britain‘, which, it was claimed, would boost trade by billions of pounds and help the UK recover from the pandemic. 

However, figures collated by the Department for International Trade show exports to Japan fell from £12.3bn to £11.9bn in the year to June 2022. Exports in goods fell 4.9% to £6.1bn and services fell 2% to £5.8bn. 

Another much vaunted trade deal was with Australia; earlier this month the former environment secretary, George Eustice, said it was ‘not actually a very good deal for the UK‘. 

Comparative analysis of UK-Japan trade figures for 2020 and 2021 by Morita-Jaeger (1) and a colleague states: ‘In all cases but one, Japanese exports and imports of goods and services with the UK performed worse than the equivalent flows with the EU or the rest of the world.’ 

She added that Japanese businesses had used the UK as a gateway to Europe since the 1980s. 

The government, at least in public, are still putting their faith in the ‘EU retained law bill’, commonly referred to as the Brexit freedoms bill, a plan to purge a wide range of EU laws from the British statute book. The bill was a key policy reform introduced under Liz Truss’s short-lived premiership, promoted by her business secretary, Jacob Rees-Mogg. 

Business appears to be distinctly underwhelmed by the proposal; the British Chamber of Commerce (‘BCC’) said as only around 4% of businesses understood the bill and its potential impact on them. When asked which regulations they would keep, amend, or remove completely, more than half (58%) said they had no preference. 

Last week, the chancellor, Jeremy Hunt, argued that the bill was the way for growth in key sector, comparing it to Nigel Lawson’s 1986 ‘big bang’ City reforms, he said: ‘We have a huge Brexit opportunity to set our own regulations. You can set out long-term plans for growth industries like life sciences, technology and green industries, which attracts people to come to the UK, because we are using our Brexit freedoms to allow things to happen with forward-looking regulatory structures that you cannot do in other countries.’ 

The BCC see it somewhat differently, saying there was little appetite among firms for UK rules to diverge significantly from EU regulations, warning that too many differences would add to company costs at a time when businesses were already struggling with soaring inflation and other barriers to trade with the EU. 
 

‘Two-thirds of voters overall favour closer future ties with the EU’

 
Two-thirds of voters overall favour closer future ties with the EU, according to polling from the Tony Blair Institute for Global Change, which this week published a blueprint for sidling in that direction. 

First, the paper argues, the government should build goodwill with our neighbours – something Sunak is in fairness now attempting – and seek a workable solution to the flaws in the Northern Ireland protocol. Then it should adopt high standards on food, labour and the environment to show that Britain isn’t trying to undercut its neighbours.

Only then should it try negotiating a better deal, although still one that stops short of joining the single market. The overall idea is to insist that Brexit is now a reality but start moving the public towards a softer version of it, without ever quite calling it that. If there is a sense, hanging unspoken in the air, that eventually Britain could move back towards EU membership, then it’s nowhere to be found in this report. 

For it’s a long, long haul from here to anything like the relationship with Europe we once had, assuming that it will be 2028 at least before any major party dares to stand on a remain-friendly platform of pointing out the bleeding obvious. By then we will have had 12 wasted years of missed opportunities, and the EU may have moved on far enough without us that rejoining no longer seems realistic. 

 
 

‘Rip it up and start again 

I hope to God you’re not as dumb as you make out’ 

 
 

Notes: 

1. A senior research fellow in international trade at Sussex University business school and a policy research fellow of the UK Trade Policy Observatory 

 

 

So what are you thinking Philip?

‘This week we start with a brief look at the World Cup, and focus on how some teams have spoken out in their own, subtle ways. Big-up’s go to Iran and Germany for their powerful messages. FIFA, the governing body, will never be seen as representative until they can admit their chosen venue was a mistake, until then they will always be tainted with corruption.

We continue with the theme of corruption by looking at the ongoing PPE VIP-lane scandal, by focussing on PPE Medpro and Lady Mone who, despite being conflicted, put them forward as providers.

Of the £203m contract they were awarded, £122m of the equipment was found to be faulty and was never used. This is the tip of a £9bn iceberg of unused PPE now costing £770k a day to store.

What makes it worse is that this money could have been used to pay nurses a living wage, rather than making a series of dubious entrepreneurs richer than they already are.

The reason we have hospital waiting lists is because they are understaffed, people are leaving in droves and few are foolish enough to just work for “thanks”. The government compounds this stupidity by paying agencies for nurses at a cost in excess of what nurses would be paid if they had a proper pay rise.

We don’t need austerity, we need a government with common sense and a calculator!

Instead, it’s about priorities, making their mates richer, keeping those who vote Tory on-side, and damn the rest.

“Growth” is the big buzz word. Liz was right that we need growth, but she didn’t understand how. Growth comes through trade which Brexit decimated. Whatever crap they spout the figures speak for themselves, post-Brexit trade is down de facto so is growth. The EU didn’t hold us back, it was Brexiters.  

As far as I can see this country will go nowhere until this wrong is righted. There is not a chance of a Tory leader doing so, which leaves Labour, who, under Starmer, are Tory’s in drag. Yes, he’s a decent chap, honest, not bad at the despatch box, but he’s meek. He needs to win, not just sit and wait for the Tory’s to lose. Brexit renegotiation is an open goal, the polls tell him that.

I will go as far as to say that Starmer won’t win the next election. If Labour wants to win it needs either a new leader or an electoral pact with the LibDems. Sunak has no control, the party is running wild, housing, wind farms, it’s all happening around him. As I wrote in “Just Passing Through” he’s keeping the seat warm for Johnson who will beat Starmer because he’s a better politician. Starmer would make a better PM but he doesn’t know the game!

Lyrically, we keep with the European theme. We start with Roxy Music and “The Song for Europe”, which shows Ferry at his pretentious best. To finish the sound of young Scotland, Orange Juice and “Rip it Up”, because that’s exactly what should happen to Brexit. Enjoy!

 
@coldwarsteve
 

 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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