Carillion; Corporatism and the Establishment Racketeers

Tax Dodgers

A series of delusional characters maintained that everything was hunky dory until it all went suddenly and unforeseeably wrong

Rachel Reeves MP and Frank Field MP following evidence given by former Carillion executives

The collapse of Carillion has revealed the ways in which members of the British establishment work to the detriment of its citizens. Intriguingly, some of these racketeers have even campaigned hard for Brexit while their commercial activities have served to undermine a major British company, putting at risk the jobs and services of millions of Britons!

The collapse of Carillion a few weeks ago again revealed the dangers of the control of large sectors of state activity by powerful private interest groups. It is clear that the company borrowed heavily whilst aggressively grabbing more and more contracts in a bid to squeeze competition out of the marketplace.

The situation culminated in a company which we are told was ‘too big to fail’. But this claim implies that we are left with no option but to help it out in some way. As with the banks, this should ring alarm bells; moreover the Government is complicit in creating these unaccountable behemoths which can hold a gun to the heads of taxpayers. It would seem that some of the biggest losers will be small businesses providing valuable employment and services which are often operating on narrow margins.

The Public Finance Initiative artful tax dodgers

The whole issue of Corporatism and the dangers it presents is now, thankfully, a matter of public debate. But in this post I want to look more closely at the activities of Carillion and the financial casino system which has become a corrosive part of the economy.

Let’s start with the selling of PFI contracts. The debate around corporatism has focussed around Private Finance Initiatives (PFI) and the enormous drag they are now having on our public services. What is less well known is that PFI contracts can be traded in the same way as other assets. So even if the Government has good reason for allocating a contract to a particular company it cannot be sure that the contract will not be sold on to someone else. This is exactly what Carillion has done and (surprise, surprise) involves tax dodging.

According to analysis by the European Services Strategy Unit (ESSU), Carillion made £500m from selling PFI projects, the most profitable being the sales of three NHS hospital buildings in Staffordshire, Swindon and Glasgow in 2007. These netted Carillion a 38.7 per cent annual return, Several of the purchasers are based offshore meaning they pay no UK corporation tax on the profits they derive from the schemes, which are ultimately paid for by all of us. An article in The Independent Newspaper pointed out that:

Several projects were bought by Secondary Market Infrastructure Fund and Land Securities Trillium, both of which are earlier names for what is now Semperian, a company based in Jersey and part-owned by the Daily Mail Senior Executives Pension Fund.[My italics]

Equitix, which also bought PFI projects from Carillion, was previously based in the UK but has now been sold to offshore funds.

Just to be clear about this, executives from the Daily Mail are benefitting from a company receiving public money but pay no UK tax on the profits.

What links Elizabeth Windsor’s banker to schools in East Dumbartonshire?

Though not related to Carillion it is instructive to consider the East Dunbartonshire Schools PFI project. This contract is currently half owned by Innisfree Nominees Ltd, which is in turn owned by Innisfree Group Ltd. The main shareholders in this firm is Jersey based Coutts and Co Trustees (Jersey) Ltd, and a part of the taxpayer-owned Royal Bank of Scotland group Coutts, the bank used by the Queen. Moreover as the Scottish Herald points out:

Coutts, whose chairman is Tory peer Lord Waldegrave, was named recently in the leaked Panama papers for asking offshore law firm Mosack Fonseca to set up almost 500 offshore companies for its clients.

Semperian PPP Holdings, which has a parent company also registered in Jersey, holds the other 50% stake in this project, which built six new schools in East Dunbartonshire including Bearsden Academy, Douglas Academy and Bishopbriggs Academy.

Semperian again! But it is hardly surprising since they now own many PFI contracts. So Daily Mail executives, the Conservative party chairman and peer of the realm and Elizabeth Windsor’s bankers. What a cabal!! But that’s not all, lets look at a side issue of the Carillion collapse involving hedge funds.

A hedge fund is an investment vehicle, often administered by a company. Amongst its socially useless activities is what is known as short selling where fund managers gamble that a company’s share price on the stock market will fall. As this Guardian article reports:

The biggest winner from July’s share price crash was hedge fund Marshall Wace, whose co-founder Sir Paul Marshall was a major backer of the leave campaign in the Brexit referendum.

Another institution that took out big bets on Carillion’s downfall is BlackRock, the US-based investment institution that hired former chancellor George Osborne as an adviser last year, on a £650,000 salary.

Marshall was actually employed by the Government and was a board member at the Department of Education (yet another one – how big is this ‘board’). Given a knighthood for services to charity and education he has been busy making money out of the collapse of a major British Company. That should improve the ‘educational outcomes’ for the children of laid off workers no end!

We should also mention his long association with leading Liberal Democrats (until he became a Brexiteer), co-authoring the Orange Book which advocated choice and competition. No wonder the LibDems jumped into power with the Conservatives in 2010!

If we look past the superficial aspects of the Carillion collapse we find the vultures of the British establishment syphoning off public money for their own gain or betting on the collapse of major companies, making money out of misery. Whether the Carillion executives are delusional or not, the company was both perpetrator and victim. But this just shows the closely interconnected nature of the problems we face ending this disgusting charade.

Zealous & Candid; The Powerful Poetry of Republican Chartist Gerald Massey

Gerald Massey Chartist poet

Kings are but giants because we kneel, one leap and up go we!

Percy Bysshe Shelley presents the British establishment with a conundrum. While acknowledging him as one of Britain’s greatest poets his reputation must be carefully marshalled to hide the devastating commentary he delivered on political and social conditions (as Graham Henderson points out here). For Shelley’s radical successors the situation is simpler – just pretend that they never existed.  Such a poet was Chartist Gerald Massey born 1828 in Hertfordshire.

‘A strong feeling against the British aristocracy….’

The titles of some of Massey’s poems such as The Red Republican (also the name of a publication) and The Last of the Queens and the Kings leave us in no doubt of his aims. Shelley had died in Italy in 1822 (at the tragically young age of 29), well before the rise of Chartist activity from the mid-1830s.  But being born almost 40 years later, much of Massey’s work is placed firmly in the cauldron of that political and social movement, with his early poems published from the mid-1840s onwards. The penalties for such activity could be severe, the Treason Felony Act being passed by Parliament in 1848 with the express purpose of increasing the chances of a guilty verdict being delivered against those tried for advocating the abolition of the monarchy.  A long prison term or transportation to Australia was a real possibility!

Massey came from impoverished beginnings and a scant education in a ‘penny-school’ meant that he was virtually an autodidact. He was to engage in a wide range of literary activities aside from poetry including journalism, theology, histotian and criticism. But just as with Shelley my aim is not to analyze his work as an academic exercise but to consider what insights his work holds for radicals and republicans today.  The great American poet  and essayist Walt Whitman was in no doubt about the aims of Massey’s poetry when in 1855 he observed:

I have looked over Gerald Massey’s Poems ― They seem to me zealous, candid, warlike, ― intended, as they surely are, to get up a strong feeling against the British aristocracy both in their social and governmental political capacity.

‘Put no faith in kings, nor merchant-princes trust’

In this short post it is not possible to do justice to the whole of Massey’s substantial output so I shall focus on just three of Massey’s poems Progress and TraditionThings Will Go Better Yet and Kings are but Giants Because we Kneel from which the following is the opening stanza:

Good People, put no faith in kings, nor merchant-princes trust,
Who grind your hearts in mammon’s press, your faces in the
Trust to your own stout hearts to break the Tyrant’s dark, dark
If yet one spark of freedom lives, let man be true to man,
We’ll never fight again, boys, with Yankee, Pole, and Russ,
We love the French as brothers, and Frenchmen too, love us!
But we’ll join to crush those fiends who kill all love and liberty,
Kings are but giants because we kneel, one leap and up go we.

We can learn much from this verse alone. The themes are similar to those which exercised Shelley, the people are good and monarchs are not worthy of trust. The term merchant-princes is telling and points to the autocratic nature of mid-Victorian trading companies with their lack of accountability and democratic control. This was the era when the activities of the British East India Company (EIC) were finally being acknowledged as a danger to even the British government (it was nationalised in 1858 and finally dissolved in 1874).  As I mentioned in this post the EIC was an effective forerunner and model for many of todays multinational Corporations who present such a danger to us. In the far less deferential 21st century, however, even the eager consumers of the products of corporations such as Microsoft and Apple would regard trusting those organisations as a little naive! Massey’s work is essentially internationalist in tone reflecting Tom Paine’s sentiment in his comment My country is the world which was to find expression in the realisation of the proto-socialist movements in the 1820s and 1830s that the problems faced by the people had a commonality throughout Europe.

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The City of London Corporation; The Solid Gold Woodlouse

Firstly, to put this post into some historical perspective. Of the many Clauses comprising the various versions of the 13th Century Magna Carta only a very few are still relevant, including Clause 9 which states:

The City of London shall have all the old Liberties and Customs which it hath been used to have.

Other cities are indeed mentioned (including the Cinque Ports) but these have long been absorbed into the mainstream of British politics and administration. Fast forward three centuries and in 1571 the City of London Corporation (CofL) created the Remembrancer post as a channel of communication between the Lord Mayor and the Crown (including Parliament). Now to 1647. The Lord Mayor and Common Council petition a recalcitrant Civil War Parliament to allow an expansion of its forces to oppose the New Model Army. Both the City and Parliament backed down when Oliver Cromwell threatened to destroy the city.

These episodes from history tell us much about the CofL. It is the woodlouse of British institutions – ancient, adaptable and a born survivor. It is these features which are the biggest obstacles in holding to account this blot on our democracy. The CofL itself points out that there is a considerable degree of misunderstanding regarding the City Remembrancer. For example, it is often stated that the Remembrancer sits in the House of Commons. He does not, as the CofL points out here; if he occupies any position it is in the Under Gallery overlooking the Chamber, but not part of it. It is not difficult to realise that a seat in the Chamber itself would be a waste of the Remembrancer’s time. He would not be allowed to take part in debates and I imagine pulling faces or looking disapprovingly at the Chief Secretary of the Treasury would not have a great effect. In fact, power is much more effectively exercised at the Reading and Committee stages of Parliamentary business. This sloppy thinking on the part of critics does nothing to help frame the urgently needed reforms.

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David Cameron’s Friends are Experiencing a Lot of ‘Administrative Errors’

Administrative error! An intriguing phrase considering the fact that the Prime Minister is hosting a summit on corruption and throwing around brickbats regarding foreign countries. But ironically it appears to be fast becoming the standard defence for organizations associated with David Cameron and under investigation by authorities. The Conservative Party’s election expenses scandal revealed by Channel 4 News is supposedly an ‘administrative error’, the same explanation used by the Perry Beaches Academy Trust School chain in Birmingham.

The Chief Executive of Perry Beeches has resigned and the governing body is stepping down amid serious issues with incorrect governance. In March the Academy had to pay back £118,000 of Government (ie our) money as it failed to keep proper records on school meals. Now a whistleblower as revealed that the CE Liam Nolan was apparently paid an extra £160,000 via a third party over 3 years on top of his £120,000 a year salary. This led the Education Funding Agency to issue a Financial Notice to Improve. But Mr Nolan’s determination to grab a much bigger salary is no real surprise. Back in November 2014 he was already complaining that his salary was too low compared with other school heads. So another example of a greedy salary race to the top now fostered by a competitive Free School system.

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The Queen’s Birthday Celebrations; a Cynical Exercise in Corporate Branding

A few weeks ago during April (2016) I was invited to celebrate the 90th birthday of a very wealthy and privileged Londoner I knew little about, had never met and was never likely to meet.  For me Elizabeth Windsor is a media entity with no more reality than, say, Sherlock Holmes or Daffy Duck.  I cannot truly say I never wish to meet the Queen since I have some questions I would like to put to our Head of State! A casual observer of the British media, however, may have concluded that I was almost unique in finding the whole situation bewildering, not to say nauseating. That I am not a casual observer is evidenced by the fact that I made a brief appearance in Stephen Smith’s biassed BBC Newsnight package on Republicanism. By the way, my balding pate can just be seen in the background at a Republic Birmingham meeting as CEO Graham Smith was interviewed. I mention it in case my fame suddenly accelerates and I am the subject of a future Have I Got News For You round!

Back to reality and the whole experience led me to reflect on how this preposterous situation came about and, more importantly for todays republicans, how it is maintained.  The conclusion was that we are the victims of a single event which allowed a psychotic chancer and a bunch of bandits to seize power, initially in England, almost a thousand years ago in 1066. Now, we cannot be sure how history would be different if Harold’s troops had not been duped into breaking ranks, handing victory to William the Conqueror (or more correctly William the Bastard). It may be that I would be encouraged to celebrate the birthday of an entirely different Londoner equally remote and unaccountable.

So how did we get from that moment to 2016? Initially, the shock of conquest combined with the application of the feudal system subdued the population with William allocating tracts of land to his invading Earls, who ruled absolutely and in the case of the North of England, genocidally.  Coincidentally with feudal overlordship a concept was promulgated which still finds some traction hundreds of years later, the idea that the King is the ultimate protector and guarantor of the security and liberty of the people. If your Lord is oppressive then you can petition the King who will either summon the miscreant for punishment or arrive in person with a body of troops to sort things out.  It was on this acceptance of the nature of the King which the leaders of the Peasants Revolt (incidentally triggered by the imposition of a punitive Poll Tax) met with King Richard II in 1381, during which the leader Wat Tyler was slaughtered. This should have been a warning, but there was another crucial factor at work.  The concept of a society without a King was literally unthinkable to the vast majority of the population in medieval times. The King was appointed by god and was the earthly kingdom’s link with the eternal state of heaven.  An appointed Head of State was therefore impossible and only a very few were aware of the ancient Roman Republic or he existence of the Serene Republic of Venice with its Head (the Doge) elected by a closed college system.

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Bombay 1668; Autocratic Corporatism Then and Now

On March 27th 1668 an event took place which has an important lesson for us today with the possibility of a free Trade Agreement between the United States and the UK replicating parts of the stalled Transatlantic Trade and Investment Partnership agreement making democratically elected Governments subject to Corporate interests. I have written a post about how TTIP would work in practice. Back in March 1668, the restored British monarch Charles II leased Bombay (now called Mumbai) to the East India Company (EIC) for £10 a year. Charles acquired the Bombay islands from the Portuguese as part of a dowry payment when he married Catherine of Braganza. This was all part of a strategy to give extensive autocratic powers to the EIC and over the next couple of years Charles issued five Charters allowing the company rights to autonomous territorial acquisitions; to mint money; to command fortresses and troops and form alliances; to make war and peace, and to exercise both civil and criminal jurisdiction over the acquired areas. The Bombay islands was just one event in a series of significant events over the next 100 years which led to the EIC virtually monopolizing India (except for some minor areas of local control in the South) and becoming so powerful as to rival the British Government itself. This led to a series of Parliamentary Acts during the 1770s and 1780s which separated the commercial and administrative/political functions of the EIC and reasserted the supremacy of Parliament over the corporation. Apologists of the British Empire will point to the economic and administrative benefits of the EIC while avoiding the awkward facts of endemic corruption; massacres; looting of Indian treasures resulting in poverty; numerous famines including the Great Bengal of 1770; and exploitative systems of agriculture including the forced cultivation of opium in place of foodstuffs.

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Coventry University Music: A Victim of Vandals in Suits

In the late autumn of 2015 a rumour was circulating that Coventry University was axing its Music Degree programmes. The University was tight lipped about it but confirmation was provided by the fact that all reference to the programmes were removed from the University website and they were no longer recruiting for 2016/17. To my knowledge the University shamefully delayed announcing the move to their then current student cohort. Here is a copy of the comment I have made on the protest petition.  Note that I no longer had any association at this point and so had no vested interest in the outcome.

Put simply, it is an act of cultural vandalism. We are familiar with the media stereotype of a vandal as a teenager in a hoodie. But in reality they come in all forms. In this case the vandals wear suits, ties and possess Doctorates. I studied Music at Coventry University a few years ago as a mature student and have since been occasionally employed as an Hourly Paid Lecturer. The courses at Coventry have a distinctive character which emphasise creative exploration and collaboration, stretching the student and engendering a tolerance of diverse musical forms. Moreover it results in graduates who are more flexible and able to cope with the ever changing demands of a fast changing musical environment. For me it meant a transformation in my view of music, arts and even social issues. It eventually led me to discover the solutions to political problems which had troubled me for, literally, decades,

It is ironic that this is happening at just the moment when we learned of the sad passing of David Bowie. There is a broad hope amongst many artists that the consequent rediscovery of his music will inspire a new generation to adventurous artistic exploration. This will NOT now happen at Coventry. Ironic, also, when the city itself is prominent in the bidding for City of Culture in 2021. The council and local MPs need to know that their efforts are being undermined

We are continually told that organisations need to pay senior officers vast amounts of money to attract the right calibre of people. In 2014 the Vice Chancellor was reported as receiving a salary of about £250,000 It is difficult to see just how this salary is justified while simply axing valued assets. Sadly I do not think that Coventry will be the last to kill artistic programmes. Universities have now become part of the Corporate world where those very wealthy senior individuals are effectively lackeys to a philistine government intent on forcing through a doubtful ideological programme.