Government rule breaches are to blame for UK’s corruption nadir, says Transparency International
openDemocracy’s revelations of corruption in UK public life have been cited in a damning new index that ranks perceptions of Britain’s transparency at an all-time low.
A ‘poll of polls’ by Transparency International’s Corruption Perceptions Index (CPI) found industry experts think the UK is more corrupt than ever.
The UK’s CPI score is based on data from eight independent sources including the Economist Intelligence Unit and the World Economic Forum, who surveyed experts and business executives for their views on abuses of public office for private gain and bribery in the UK.
Britain scored 73 this year, down from 78 in 2022, on a scale where zero means a country is perceived as highly corrupt and 100 means it is perceived as very clean. The NGO cited several pieces of journalism by openDemocracy as partial explanation for the slump, which saw the UK tumble in the global rankings from 11th to 18th.
openDemocracy was cited as revealing four of these breaches, one of which involved the government keeping large payments to the former prime minister Boris Johnson and other ministers secret for up to eight months.
Last year, the Cabinet Office insisted it would radically overhaul an ‘Orwellian’ government unit, almost two years after openDemocracy first revealed that it was vetting Freedom of Information requests.
Only five of the 180 countries assessed by Transparency for the 2022 Index saw their year-on-year scores drop by five or more points. The UK (-5) was joined by World Cup 2022 host Qatar (-5), Myanmar (-5), Azerbaijan (-7), and Oman (-8).
The countries perceived to be the least corrupt were Denmark, Finland and New Zealand, while those ranked most corrupt were South Sudan, Syria and Somalia.
Transparency International acknowledged that most countries at the bottom of its index were either currently experiencing conflict or had recently done so. It added that although most Western European countries had been ranked higher than African, Asian and Middle Eastern countries, they in fact played a central role in fostering global corruption.
“For decades, they have welcomed dirty money from abroad, allowing kleptocrats to increase their wealth, power and destructive geopolitical ambitions,” the report said.
The Guardian has a series of articles looking at UK’s water industry. Looks like it’s a cash cow for foreign investors with prices to consumers inflated to service debt and excessive payments to shareholders. Well worth a look (and tofu-eating is not mandatory ;) …
England is one of the few countries in the world where water is fully owned by private companies. These companies answer to investors based thousands of miles away from their customers.
“What we have here is just a crazy system,” said Kate Bayliss, from the department of economics at SOAS University of London and author of several papers on England’s privatised water. “We are managing our water in the interests of offshore investors.”
These offshore investors include private and state-owned international funds, banks, multinationals and billionaires headquartered outside the UK, and they control at least 72% of English water, new Guardian research has found.
Here’s how England’s profitable water system has been sold off around the world:
Foreign investment firms, private equity, pension funds and businesses lodged in tax havens own more than 70% of the water industry in England, according to research by the Guardian.
The complex web of ownership is revealed as the public and some politicians increasingly call for the industry to be held to account for sewage dumping, leaks and water shortages. Six water companies are under investigation for potentially illegal activities as pressure grows on the industry to put more money into replacing and restoring crumbling infrastructure to protect both the environment and public health.
More than three decades after the sector was sold off with a promise to the public they would become individual small shareholders or “H2Owners”, control of the water industry has become dominated by overseas investment vehicles, the super-rich, companies in tax havens and pension fund investors. The ownership structure is such that transparency and accountability are limited, according to Dr Kate Bayliss, a research associate with the department of economics at Soas University of London.
In the 30 years since England’s water was privatised by Margaret Thatcher, water companies have set up a system in which billions of pounds leave the network in an average year.
It’s money that could have gone towards building a more resilient water system, say academics. Among them, Dieter Helm, an Oxford professor of economic policy specialising in utilities, went as far as saying in 2021 that England’s water system was “a scandal of financial engineering”.
Just Stop Oil protests and arrests are continuing at the UK Houses of Parliament, Whitehall, London. There were 54 arrests on Tuesday, 25 today. Just Stop Oil are calling on the UK government to end new oil and gas.
Twenty-five supporters of Just Stop Oil have been arrested after blocking traffic in central London, on the sixth consecutive day of protest by the group.
At about midday on Thursday, two groups of protesters with the climate activist campaign walked into the road and stopped traffic at the roundabout by Trafalgar Square.
Supporters of Just Stop Oil have vowed to block the streets of Westminster every single day until the government agrees a halt to all new oil and gas projects. The latest arrests bring the number of arrests related to their protests to more than 100 since Sunday.
Britain will be plunged into an even worse energy crisis in a year’s time without an immediate plan to improve leaky homes and dramatically reduce demand for gas, ministers have been warned.
The UK ranks among the worst in Europe for the energy efficiency of its homes, according to new research outlining an urgent need to reduce the amount of heat being wasted. Experts are warning that while Liz Truss has bought the government time with her £100bn-plus package to cap energy bills, similarly expensive and unsustainable schemes will be needed unless substantial plans are introduced to improve homes and reduce demand.
Experts believe a serious energy-efficiency programme could have a real impact within a year. The institute pointed to Germany as a success story, where grants, low-interest loans, tax rebates and free expert advice have all been used, resulting in high take-up figures.
Yet public ownership is opposed passionately by the Conservative government, while the leader of the opposition has said he is “not in favour” of it – despite his election on a platform that committed to “bring rail, mail, water and energy into public ownership to end the great privatisation rip-off and save you money on your fares and bills”.
Public ownership is on the media’s radar, too. When Labour leader Keir Starmer announced his policy to freeze bills this week, he was asked why he wouldn’t also nationalise energy, replying that: “In a national emergency where people are struggling to pay their bills … the right choice is for every single penny to go to reducing those bills.”
But so long as energy remains privatised, every single penny won’t. Billions of pennies will keep going to shareholders instead.
The energy market was fractured under the mass privatisations of the Thatcher governments in the 1980s. It contains three sectors: producers or suppliers (those that produce energy), retailers (those that sell you energy), and distribution or transmission (the infrastructure that transports energy to your home).
It is important to bear this in mind when we’re talking about taking energy into public ownership. We need to be clear about what we want in public ownership and why.
By 2019, Labour had a detailed plan on how to do this – worked up by the teams around then shadow business and energy secretary Rebecca Long Bailey and then shadow chancellor John McDonnell. The plan is not the only way, but it illustrates what exists and how one could go about re-establishing a public energy ecosystem, run for people not profit.
The recent TUC report shows the cost of nationalising the ‘Big 5’ energy retailers – British Gas, E.ON, EDF, Scottish Power and Ovo – to be £2.8bn, which would go on buying all the companies’ shares. That’s a lot of money, equivalent to more than the annual budget of the Sure Start programme in 2009/10 (its peak year). But it’s a one-off cost, not an annual one.
And it’s not like the current privatised system doesn’t have its costs: since June 2021, the UK government has spent £2.7bn bailing out 28 energy companies that collapsed because they put short-term profits ahead of long-term stability – companies like Bulb Energy. We have spent billions of pounds already to get nothing in return. So £2.8bn is not a large amount of money to pay to gain these assets, rather than just bailing them out.
The big energy retail companies made £23bn in dividends between 2010 and 2020 according to Common Wealth, and £43bn if you include share buy-backs. What you choose to do with that surplus in public ownership is another matter: you could use it to invest in new clean energy or to lower bills or fund staff pay rises, rather than subject your workers to fire-and-rehire practices as British Gas did last year.
Labour’s previous plan also involved taking the distribution networks – the National Grid – into public ownership. This would end the profiteering at this level, too – with £13bn paid out in dividends over the five years prior to 2019. As Long Bailey said at the time, we need “public driven and coordinated action, without which we simply will not be able to tackle climate change”. Like previous nationalisations, the purchase of the grid and distribution networks could be achieved by swapping shares for government bonds. By international accounting standards, the cost is fiscally neutral as the state gains a revenue-generating asset, which more than pays for the bond yield.
The final part of the plan – and the most complicated – is production and supply. It would be impossible to nationalise the oilfields of Saudi Arabia or Qatar – and for good reasons we should want to leave fossil fuels in the ground, anyway, rather than contest their ownership.
And so what Labour proposed in 2019 was a mass investment in new renewable energy generation projects, with the public sector taking a stake and returning profits to the public. For example, under the ‘People’s Power Plan’, we proposed 37 new offshore wind farms with a 51% public stake, delivering 52GW alone by 2030, equivalent to 38 coal power stations. There were additional proposals for onshore wind, solar, and tidal schemes, as part of a 10-year £250bn Green Transformation Fund, which included other schemes like the Warm Homes insulation initiative.
Labour’s new shadow chancellor Rachel Reeves has promised a similar level of investment – a £28bn a year climate investment pledge.
Any surplus energy would then be sold on international markets, with a People’s Power Fund – a sort of sovereign wealth fund – to deliver public investment in local communities’ social infrastructure: a genuine levelling-up fund, perhaps.
Many people will say this can’t be done, but of course it has been before. The 1945 Attlee government nationalised energy and successive Conservative governments – including those of Churchill, MacMillan and Heath – were happy to have a nationalised asset. Harold MacMillan famously accused Margaret Thatcher of “selling off the family silver” when she privatised state industries.
When I was born in 1979, the National Coal Board, British Gas and British Petroleum were all publicly-owned or majority publicly-owned companies. Between them, they were the major suppliers of our energy. Our gas bills came from British Gas and our electricity bills from our regional electricity board (in my case Seeboard, the South Eastern Electricity Board), and coal and oil fuelled our power stations.
The regional electricity boards had been brought into being by the Attlee government’s Electricity Act 1947, when electricity companies were forcibly merged into regional area boards and nationalised. The Coal Industry Nationalisation Act 1946 and the Gas Act 1948 had together brought energy into public ownership.
Seeboard was privatised in 1990, and later became part of EDF Energy – ironically, the nationalised French energy company, whose profits from the UK’s stupidity are used to subsidise French consumers.
The French government has now fully nationalised EDF (previously it was 84% publicly owned), and household energy bills rose by just 4% this year – compared to over 50% in the UK and a forecast 200% by January 2023.
If Starmer doesn’t want to listen to me (or his own commitments from 2020), perhaps emulating the centrist Emmanuel Macron in this instance would be palatable?
From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources
In his later years, Robin Cook argued: “The market is incapable of respecting a common resource such as the environment, which provides no price signal to express the cost of its erosion nor to warn of the long-term dangers of its destruction.”
From the depletion of fish stocks to the burning of the Amazon, profit has proved a failed regulator for use of our natural resources. The market has also failed to decarbonise at pace, or to end the scourge of fuel poverty.
On the media this week, shadow energy secretary Ed Miliband said Labour is “continuing to look at what the right long-term solution is for our energy system”. It is up to all of us to campaign for that solution to be public ownership – whether that’s from within the Labour Party (like me) or from the outside.
We have been told repeatedly that the UK was unprepared for this pandemic. This is untrue. The UK was prepared, but then it de-prepared. Last year, the Global Health Security Index ranked this nation second in the world for pandemic readiness, while the US was first. Broadly speaking, in both nations the necessary systems were in place. Our governments chose not to use them.
Had the government acted in February, we can hazard a guess about what the result would have been, as the world has conducted a clear controlled experiment: weighing South Korea, Taiwan and New Zealand against the UK, the US and Brazil. South Korea did everything the UK government could have done, but refused to implement. Its death toll so far: 263. It still has an occasional cluster of infection, which it promptly contains. By contrast, the entire UK is now a cluster of infection.
Starting tomorrow for a week or so a series of articles on the NHS. I’ll be mostly lifting the articles from OpenDemocracy with a few embelishments. The following week or so I intend to be featuring articles about tax-avoidance and UK wealth distribution. The intention is to inform.