A form of legalised larceny has allowed the ruling elite to suck wealth out of the state. Welcome back to pre-Victorian Britain.
Patrick Cockburn is the author of War in the Age of Trump (Verso)
Cross-posted from Counterpunch
Goldwyn Pictures 1922
Britain has entered an era of legalised larceny by the politically well-connected some 150 years after the Victorians ended what they execrated as the “Old Corruption”. By this they meant the toxic system whereby the ruling elite enjoyed a parasitic relationship with the state enabling them to obtain jobs and money through patronage, partisanship and purchase.
Generals appointed because of their wealth and social connections, rather than ability, produced spectacular debacles, such as the Charge of the Light Brigade. The best-known achievement of the Victorian reformers was the Northcote-Trevelyan Report of 1854 that intended to produce a Civil Service in which “none but qualified personnel will be appointed”.
The old corruption
Fast forward 170 years to the allegations against Baroness Michelle Mone over PPE procurement which so “shocked” Prime Minister Rishi Sunak and notice how many of the worst ingredients of the “Old Corruption” are re-emerging in modern Britain. The Victorians did not use the term to mean exclusively those doing anything illegal, but, then as now, the system was all the more pernicious because so much that was destructive to good government was permitted. We have yet to reach the stage, as happened long ago in Russia and the oil states of the Middle East and Africa, where government has become a looting machine run by a kleptocracy, but we are further down this road than most people in Britain imagine.
Signs of the retreat from the standards of honest and competent government to which the Victorian reformers aspired are today visible everywhere. What makes this decline so serious is the vast size of the sums of money now being wasted or misused. The most flagrant example of this was the waste of £12 billion spent on defective or over-priced PPE during the Covid-19 pandemic.
Probably, the figures are too gargantuan for people to take on board, but in a report published on June 2022, the House of Commons Public Accounts Committee, scarcely a muckraking body, spelled out the losses: equipment worth £4 billion did not meet NHS standards, £2.6 billion was not of a type or standard preferred by the NHS, £4.7 billion was written off because too much had been paid for it, and £673 million was spent on PPE that was defective.
The theft of the century
What we are really looking at here is one of the thefts of the century. The Government brushes aside this enormous useless expenditure of public funds, most of which ended up in somebody’s pockets, blaming it on an unprecedented emergency with which ministers were heroically seeking to cope. They argue that no time was available to check on PPE suppliers, however inadequate or dodgey they subsequently turned out to be.
This dubious argument silences many potential critics, aided by a certain naivety in Britain about the traditional mechanics of corruption. Our nineteenth-century ancestors would not have been so simple-minded, and would have been instantly suspicious of such self-serving government pretensions. They would not have been taken in by its claim that it was only its laudable enthusiasm to fend off disaster that regrettably led to so-many well-connected companies close to the Conservative Party winning profitable contracts.
And they would have been right: a study by the New York Times in December 2020 found that out of a sample of 1,200 Covid-19 related central government contracts worth £16 billion, about half of which worth £8bn, “went to companies either run by friends and associates of politicians in the Conservative Party, or with no prior experience or a history of controversy. Meanwhile, smaller firms without political clout got nowhere.”
The best moment to strike
I have heard too many excuses about an existential crisis producing understandable errors too many times during corruption scandals in the Middle East to believe them. People intending to steal billions from a government are not fools. They put a great deal of thought into their planning. They must have insiders working for them, but they must also avoid official scrutiny by departmental committees and oversight bodies.
A war is the best moment to strike for anybody intending to plunder the public purse without their activities being closely monitored. I was in Iraq after the US invasion in 2003 when the entire military procurement budget of $1.2 billion disappeared, nominally spent on some Soviet helicopters too old to fly purchased from Poland and a contract with a Pakistani company for military equipment worth hundreds of millions of dollars scribbled on a single sheet of A4 paper in such poor hand writing that Iraqi officials could not tell what had been ordered.
Wars may be good for mass thefts but a pandemic turns out to be even better because of the general panic. People plotting to part a government from its money have a nose for this sort of chaos and know how to exploit it. They know how to sniff out and pay off influential people they need to help them, safe in the knowledge that their lobbying is legal with no risk of punishment aside from reputational damage. If unmasked as secret influencers, they can hide behind the unlikely claim that they were paid a lot of money by some very tough and worldly-wise people – for whom they then did almost nothing to further their interests.
Another superficially plausible way to downplay the current avalanche of scandals is to say that nothing much new is happening and there have always been such scandals. So there have, but the lobbyists and influencers are now playing for much higher stakes than previously with tens of millions of pounds in the offing. Past scandals such as “cash-for-questions” in parliament or MPs’ expenses commonly involved paltry sums.
Looting government was easy in the eighteenth century because so many functions of government were out-sourced, a notable example being the East India Company with its own empire and army. Such outsourcing was a recognised feature of “Old Corruption” because profit was prioritised over performance and regulatory control was minimal. Much the same now happens in modern Britain as state functions are outsourced and degraded in the supposed interests of efficiency.
At the heart of the Northcote-Trevelyan Report was a determination that future members of the civil service would be appointed on merit and they would not lose their jobs following a change of government. But when Liz Truss became prime minister and Kwasi Kwarteng chancellor of the exchequer in September, almost their first act was to sack Sir Tom Scholar, the permanent secretary at the Treasury.
Or go back a couple of years to May 2020 at beginning of pandemic in 2020 when Baroness Dido Harding of Winscombe was appointed by the Health Secretary Matt Hancock to establish NHS Test and Trace to prevent the spread of Covid-19 among an unvaccinated population in England. The complicated task was taken out of the hands of experienced local officials and handed over to Harding, assisted by consultants paid £1,000 a day. Even in corrupt cynical eighteenth century Britain, people might have jibbed at that.