Commission meeting with Duncan Hames 9 November 2023
The Commission met with Duncan Hames, the Director of Policy at Transparency International UK and a former MP, to discuss our inquiry into corruption and political funding.
He introduced the work and concerns of Transparency International UK which is part of a worldwide anti-corruption coalition. He talked about how to identify conditions that enable corruption to occur and held a mirror up to the UK, which has problems.
He said that corruption in the UK was increasingly plain to see, with substantive consequences, and not as exceptional an occurrence as we might hope. Corruption in the UK is typically not transactional, but more subtle. For example: seats in the Lords are not openly sold, but we are supposed to believe they are only coincidental to large donations to political parties!
Corruption includes misdirection of public funds which are meant to be for the common good and tends to happen when individuals have a monopoly of decision making powers and discretion over who gets what, without accountability.
One form this takes in the UK is the exercise of political patronage, for example appointments to the House of Lords, and the dominance of the executive over the legislature. This discretion even extended to preference given to companies referred to a VIP lane during the pandemic when contracts were awarded without the normal processes of competition and transparency.
Billions were lost to fraud via business support loans some of which were exploited by organised criminals.
Politicians have also exercised this discretion to direct public funds to locations that suit them electorally, for example the ‘towns fund’.
The normal processes of governance and accountability were knocked off course during the Johnson era and have not recovered.
The question as to whether politicians are working in the public interest or serving private interests is most readily understood in concern about MPs’ ‘second jobs’.
Whilst second jobs may not always garner huge sums for the individual politician they are corrupting when the private interests paying for them come into conflict with the public interest, for example advice to betting companies.
Payments to politicians are not limited to employment. Other methods include holidays, gifts and hospitality, even inflated payments for translation fees on books.
The conditions, therefore, which produce most risk of corruption in politics are: political donations, lobbying, and conflicts of interest often arising from second or subsequent jobs.
Individual cases of corruption can be easier to discern and the public understands such wrongdoing. The systemic corruption of public decision making by private interests is more complex but potentially more damaging.
People who are putting big money into politics think they are buying something; they buy access to get what they want. Big money buys big influence.
Duncan Hames laid out some possible recommendations for reform.
Political Finance
Tighter controls on election campaign spending would reduce politicians’ dependency on their financial backers. We could also put in place controls on party donations with an upper limit of, say, £50k, on annual donations and a limit on lifetime donations. This would apply to both individuals and corporations. This would inhibit capture of political decisions by a small number of individuals, and curtail selling access to ministers at fundraising dinners and similar events.
Corporate donations should be made only from profits generated within the UK. It should not be possible to set up a small company office with one receptionist in the UK and then act as a conduit for funding that is coming from outside the country, sometimes from very dubious sources.
The Prime Minister should no longer be able to make appointments to the second chamber at will and in future they should be made through an enhanced House of Lords Appointments Commission.
Lobbying
Lobbying politicians in itself is not a bad thing as they need to be well-informed, but we need equal access and transparency. Government departments should publish a stakeholder analysis, for any policy area, and demonstrate balance in the voices heard in policy formulation.
It should be the norm that meetings identify the public interest that they are fulfilling. Politicians, and especially ministers, should declare lobbying by private or organised interests, other than of their own constituents, even when civil servants are not present to record meetings themselves.
All submissions to government consultations and parliamentary committees should be published and companies not hide behind commercial sensitivity when they are lobbying.
Openness and Transparency
Special advisors should be subject to open recruitment - the covid inquiry has revealed how influential they are.
Members of the Commission discussed how a balance between transparency, systems of rules, and sanctions needs to be put in place.
Transparency is important as the fear of getting caught is a deterrent.
It was suggested that a beefed up Serious Fraud Office could deal with things that are against the law and a few show trials might be a deterrent. We could change the name to the Serious Fraud and Corruption Office which would at least acknowledge that we have a problem.
Some corruption is transactional and can be dealt with through the criminal courts but it is much harder to use the criminal law to address inappropriate and corrupting influence.
We have a problem but no one who can address it likes to acknowledge it.