It has been widely reported that Conservative Peer Baroness Michelle Mone and her family had received almost £29 million from a firm on whose behalf she had lobbied. She helped PPE Medpro to win government contracts worth over £200 million for providing personal protective equipment (PPE) during the pandemic.
As the Financial Times writes:
“The government came under heavy criticism last year when it emerged that in the early months of the pandemic it had awarded two contracts — for £80 million and £122 million — to PPE Medpro after Mone lobbied then ministers Michael Gove and Lord Theodore Agnew using their personal email addresses.
The largest part of the order, about 25 million surgical gowns, was ultimately deemed unfit for purpose.”
In short, Mone lobbied hard to make sure the contract would be awarded to PPE Medpro, rather than to a supplier who might have provided usable PPE at a time when it was urgently needed to save lives in the NHS. For some reason which has not been explained, PPE Medpro then transferred £65 million of profit to Douglas Barrowman, the husband of Baroness Mone, who in turn transferred £28.8 million to the trust of his wife and her children. PPE Medpro is currently under investigation by the National Crime Agency.
Here is a picture of the money trail. It is worth adding that all of the trusts and personal bank accounts shown in the diagram are based in the off-shore tax haven, the Isle of Man.
Source: FT; 99% analysis
The £29 million payment was first publicly revealed in The Guardian, following an internal investigation by the bank HSBC. The Guardian reported,
“Documents seen by the Guardian indicate tens of millions of pounds of PPE Medpro’s profits were later transferred to a secret offshore trust [the Keristal Trust] of which Mone and her adult children were the beneficiaries. Asked by the Guardian last year why Mone did not include PPE Medpro in her House of Lords register of financial interests, 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.’”
It is the job of the National Crime Agency and the Courts to determine whether there is anything illegal in what Mone, her husband and PPE Medpro did in this case. This article is concerned with a different question: was this just a monstrous aberration in the functioning of a generally decent government, or is it a core part of how this government functions?
Our conclusion is that, far from this being an aberration, it is emblematic of a new kind of government, the Plunderstate, into which our government is transforming the UK state:
- The UK government is now dominated by market fundamentalists who have a fundamentally different morality – particularly when it comes to the use of taxpayers’ money;
- They have created mechanisms to facilitate the kind of transaction illustrated above as a way of turning the state from a cost to wealthy taxpayers into an enormous profit opportunity; and
- They are being quite systematic in preventing our traditional democratic safeguards from operating to prevent this transformation.
The UK Government is Dominated by Market Fundamentalists
The UK no longer has a traditional Conservative Government, as many traditional Conservatives have pointed out.
Other prominent Conservatives and former Conservatives who have made similar points in public include Peter Aldous, Heidi Allen, Aaron Bell, Karen Bradley, Andrew Bridgen, Ken Clarke, Ruth Davidson, David Davis, Tobias Ellwood, David Gauke, Roger Gale, Nick Gibb, Dominic Grieve, Philip Hammond, Mark Harper, Neil Hudson, Tim Loughton, Anthony Mangnall, Nigel Mills, Andrew Mitchell, Caroline Nokes, Douglas Ross, Anna Soubry, Rory Stewart, Gary Streeter, Tom Tugendhat, Christian Wakeford, Charles Walker, Craig Whittaker, Lord Wolfson and William Wragg.
Market fundamentalists have a sense of morality which differs from almost everyone else’s – a core part of which is a belief that taxing the rich is fundamentally unjust, and whatever possible must be done to rectify that injustice. Their vision is a world where:
“The new Sovereign Individual will operate like the gods of myth in the same physical environment as the ordinary, subject citizen, but in a separate realm politically.”
They are Turning the State into a Profit Opportunity for the Wealthy
Whereas traditionally we have had governments of left and right arguing over whether a larger or smaller state will best serve the country, market fundamentalists have created a new vision: a state which exists to redistribute money back to the very wealthy. In a Plunderstate, the whole country becomes a giant profit opportunity, and the job of the state is to facilitate its exploitation by the wealthy. Their attitude to tax is:
“tax-funded spending is fine, as long as we can direct it to whom we want and as long as the tax burden does not fall on the wealthiest.”
We might expect money to flow like this:
In this picture, citizens elect politicians whose duty it is to represent the interests of the citizenry as a whole. The politicians form a government which taxes the citizens and provide transfers of cash (for example old-age pensions) and services (for example healthcare) to the citizens. That is the basis of the social contract.
But in a Plunderstate, the way money flows is like this:
In a full-blown Plunderstate, there would still be elections, but the politicians in power would receive most of their money in the form of ‘consultancy fees’ or ‘directors’ fees’ from the wealthy sovereign individuals, and as a result they would also receive their instructions from these wealthy individuals. The ordinary subject citizens would find themselves with decreasing influence over their elected representatives.
The wealthy, in return for these ‘fees,’ would receive huge amounts of taxpayers’ money in the form of uncontested contracts or other forms of cash injection into their businesses – what they receive might be 10x, 100x or even 1,000x greater than their payments to the politicians.
In addition, the sovereign individuals would largely have removed themselves from the tax system, for example by holding all their wealth in off-shore trusts. So the government would increasingly be acting as a mechanism for redistributing wealth from the ordinary subject citizen to the sovereign individuals.
The parallel with the Mone affair is obvious. But that affair on its own does not show that the UK is moving towards being a Plunderstate in any systematic way. To see that, it is worth looking a little wider.
During the early months of the pandemic, the Government set up a new system of ‘VIP lanes’ to enable contacts of ministers to obtain contracts during COVID, often crowding-out more capable suppliers. It was these lanes that Mone used to facilitate the contract for PPE Medpro. In the case of PPE contracts, the total value ran into £ billions – with the NHS often receiving nothing usable in return. The Mone affair was just one of many highly suspect transactions of this sort.
Even greater was the scale of the procurement issue around Test & Trace: the government ear-marked £37 billion to the Test & Trace programme and instead of – as would have been the obvious course of action – allowing the procurement to be undertaken by public health officials with experience of test and trace and an ability to navigate the NHS system, they chose largely to side-line the NHS and to put the procurement in the charge of Baroness Dido Harding (but still to brand it NHS Test & Trace). To prevent accusations of corruption, the government also had an anti-corruption Tsar – who at the time was John Penrose, the husband of Baroness Dido Harding.
Did Harding spend the money well? Not according to the National Audit Office, who found:
“NHST&T has signed 407 contracts worth £7 billion with 217 public and private organisations. NHST&T relies on contractors for many of its supplies, services and infrastructure. It estimates it will sign a further 154 contracts worth £16.2 billion between November 2020 and March 2021 (with not all that spending occurring in this financial year). As with many other government procurements during the pandemic, 70% of early contracts by value were assigned as direct awards without competition under emergency measures.”
And the results have not been good. The NAO report has some strongly-worded criticisms:
“16 NHST&T has not met a target to provide results within 24 hours for tests carried out in person in the community.
17 NHST&T did not plan for a sharp rise in testing demand in early autumn when schools and universities reopened.
22 There has been no shortage of central tracers and, at times, parts of the national tracing service have been barely used.
24 The Scientific Advisory Group for Emergencies (SAGE) has provided advice on what a testing and tracing system needs to achieve in order to be effective; to date NHST&T has not achieved these standards.”
So, the Mone affair is far from being an isolated incident: it reflects a modus operandi which is being deliberately institutionalised – eg by creating new systems like the VIP lanes.
Of course, most UK citizens do not want to see their country turned into a Plunderstate, so the government has been working hard to reduce our ability to resist the change.
They are Systematically Dismantling Our Democratic Safeguards
Although we do not have a written Constitution – and this government shows us why we really need one – we do have a system of checks and balances on the power of the executive, which are intended to prevent large-scale abuse of power by our government.
But the government has, with uncharacteristic focus and competence, been working to dismantle these safeguards. Through a series of Bills, the government has restricted our ability to resist their transformation of the UK into a Plunderstate:
- The Judicial Review and Courts Act 2022 makes it harder for citizens to take the government to court over its illegal actions – things which in the past have been overturned by the courts such as the illegal proroguing of Parliament, will be harder to challenge in the future;
- The Police, Crime, Sentencing and Courts Act 2022 means, among other things, that UK citizens no longer have the right to peaceful protest – if the government believes that a protest might be too noisy or cause disturbance, it can declare it illegal;
- The Elections Act 2022 makes what used to be an independent regulator, the Electoral Commission, report to ministers – in effect it is now the government that decides whether an election campaign is legal and whether the results are fair. It makes it harder for young people to vote, and it restricts the ability of opposition parties to co-operate;
- The Bill of Rights Bill is an enormous threat to our human rights, and in particular, it proposes to make it far harder for a UK citizen to rely on internationally agreed Human Rights legislation – the UK courts will no longer be bound to uphold it.
Our government is systematically transforming the UK from what used to be a moderately prosperous and moderately democratic country into a Plunderstate in which ordinary citizens will have few rights and fewer opportunities.
Fortunately, the UK population is beginning to appreciate the scale of the hardship which lies in store if there is no change in direction, and the Conservatives are well behind in the polls. This means that we have the power to force the government to change direction. As the ousting of both Johnson and Truss indicates, if we make our MPs aware of the scale of our discontent, they will act – if only out of self-preservation.
If you would like to send a message to your MP, these notes will make it quick and easy for you.
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