Britain: Greensill scandal reveals corrupt politicians

Demonstrating for the right to protest, Newcastle, in north east England, April 2021, (Photo: Elaine Brunskill)

Corrupt politicians with their snouts in the trough are nothing new. From ‘cash for questions’ under Tory prime minister John Major, to ‘honours’ for business people under New Labour leader Tony Blair, and then the eruption of the MPs’ expenses scandal under his successor Gordon Brown; the stink of corruption has long wafted from Westminster.

Now we have the Greensill scandal which reveals even more clearly the rotten character of capitalist politics. ‘Fish rots from the head first’ and this time it is not just backbenchers or even ministers, but the former Tory prime minister David Cameron who is centre stage, along with senior civil servants.

Lex Greensill seems to have relied entirely on cronyism to build his now-bankrupt company, Greensill Capital. Brought in as an unpaid ‘senior advisor’ to Cameron’s government in 2011 – the same year he founded Greensill Capital – he used his position to argue for large companies to adopt ‘supply chain financing’, including a number of NHS Trusts, which his company went on to provide.

Austerity attacks

At a time when the government was driving through savage cuts in living standards and public services, Cameron’s cronies were clearly doing very nicely indeed. While workers were being told they had to tighten their belts as a result of a financial crash triggered by speculation, Greensill became a billionaire via a new form of government-supported financial speculation. Cameron then got some personal payback when, two years after his resignation as prime minister – meaning the regulators could not intervene – he was taken on in a lucrative role as an advisor to Greensill Capital.

The collapse of Greensill Capital has put the jobs of thousands of workers at risk, including Liberty Steel workers. But while Greensill himself may have been knocked out of the billionaires’ list, the $200 million worth of shares he sold a year before the collapse will ensure he remains in the super-rich club.

Current Tory prime minister Boris Johnson won the last general election by distancing himself from his own party – including Cameron – and ludicrously posing as some kind of champion of the ‘little people’ against the elites. This scandal, however, has the potential to wreck any last shreds of that illusion; hence the media warnings to Johnson that sleaze could lose him the ‘red wall’ seats.

With every passing day, the avalanche of sleaze grows and threatens to engulf Boris Johnson’s government. The company of health minister Matt Hancock’s sister, in which Hancock has shares, has won a series of NHS contracts, including one for £300,000 just this year.

And Johnson’s government is also up to its neck in the Greensill scandal. Hancock met Lex Greensill to discuss the company having access to NHS contracts. Chancellor Rishi Sunak was lobbied by David Cameron to allow the company access to the largest possible government-backed Covid loans. While that was not granted, Greensill was allowed access to a scheme allowing it to offer loans, backed by the government, of up to £50 million. Clearly, this was not based on the financial viability of Greensill – just months later the company went into liquidation!

Faced with this growing tide of filth, Johnson has not set up a democratic inquiry designed to reveal what happened but is instead attempting a blatant and cynical cover-up. The private ‘inquiry’ that has been set up will be conducted by Nigel Boardman, himself a billionaire, who is on the board of a private bank which is chaired and majority-owned by one of the Tory party’s biggest donors!

‘Parliamentary democracy’

Cameron and Johnson were both educated at the elite private school, Eton, then went on to Oxford University, where they were members of the elite Bullingdon drinking club. At one level this is likely to be one member of the elite seeking to look after another, despite the widely reported antipathy between the two men. But it is much more than that; it is an attempt to cover up the inherently corrupt character of British ‘parliamentary democracy’, and the sham of a supposedly neutral civil service.

In reality, far from being neutral, the senior civil servants and apparatus of government have always ultimately acted to defend the interests of the existing capitalist order. The Greensill revelations also show that some were also defending their own individual right to shove their noses in the capitalist trough. Bill Crothers, for example, who managed billions of pounds of taxpayers’ money as the government’s chief procurement officer, was both a supposedly ‘neutral’ senior civil servant and an advisor to Greensill, before later becoming one of the company’s directors.

The Labour Party, now thoroughly reclaimed for big business under Keir Starmer, is currently languishing in the polls as a result of its failure to offer any serious opposition to Johnson. But it may conceivably recover some ground as Johnson is damaged by this scandal. In reality, however, Blairite Labour is not untouched by the mire.  While they are out of government there may be fewer lobbyists sniffing around them, but they are not immune.

In fact, the shadow attorney general, Lord Falconer, works for a legal company providing advice to global companies on ‘political lobbying in the UK’. And look at New Labour’s record in power, not least the Blair-era minister, Peter Mandelson, now Starmer’s advisor, who under Blair had to resign after receiving an interest-free loan to buy a house.

The loan was from a man who his department was in charge of investigating, and Mandelson was repeatedly under fire for accepting holidays on yachts from Russian oligarchs and other similar favours. Contrast his money-grubbing to the approach of Jeremy Corbyn, whose legacy Mandelson is determined to obliterate, who had the lowest expenses claims of any MP for years.

New Labour

More fundamentally, Starmer’s New Labour will never act – as a workers’ party would – to expose the underlying cause of the cesspool of corruption at Westminster because it aims to defend the capitalist system rather than build support for a socialist alternative. This is graphically demonstrated by Starmer’s support for the outrageous undemocratic measures taken against the people of Liverpool.

There is a huge contrast between the cosy little private inquiry into Cameron’s misdeeds and the Tory government’s treatment of Liverpool. The secretary of state for local government, Robert Jenrick – himself facing allegations of unlawfully agreeing a luxury housing development being built by a Tory donor – has used claims of corruption against the outgoing Labour mayor of Liverpool, Joe Anderson, to justify sending Tory-appointed commissioners into a city that has not elected a Tory council in half a century.

At the same time, Jenrick is proposing to slash local democracy with, from 2023 onwards, the number of Liverpool councillors to be reduced by two-thirds, and elections only every four years.

This is a punishment not of Joe Anderson, who obediently implemented every cut the Tories demanded of him, but of the working class of Liverpool with its proud record of defying the Tories, not least in 1983-1987 when Liverpool city council, with Militant (now the Socialist Party) in the leadership, took on Tory prime minister Margaret Thatcher.

Starmer’s Labour has not only backed the Tories’ undemocratic attacks to the hilt, but it has also carried out its own brutally undemocratic measures to prevent Liverpool Labour from selecting a candidate supported by Jeremy Corbyn.

Both the chaos in Liverpool and Labour’s weak response to the Greensill scandal, drive home the urgent need for the working class to have its own political voice. In the elections on 6 May, the Socialist Party is part of the stand by the Trade Unionist and Socialist Coalition (TUSC), as a first step to creating such a voice, including standing Socialist Party member Roger Bannister for Liverpool mayor.

From its inception, the workers’ movement has campaigned for democratic measures and defended those that exist. Our forebears fought heroically for the right to vote, trade union rights, and electoral systems which could reflect the ‘will of the people’. The current scandals reveal how far the Westminster parliament is from these basic necessities and the need for the workers’ movement to fight on democratic issues today.

That includes key issues like fighting for the repeal of the undemocratic Tory anti-trade union laws and opposing the attempts to beef up repressive powers in the Police and Crime Bill. However, it also includes fighting to extend the extremely truncated and corrupt ‘democracy’ currently on offer.

MPs’ pay

In 2015, the last year for which figures are available, only a minuscule 19 MPs had a history of doing manual work. MPs’ basic salary of £81,000 a year puts them in the top 5% of earners, with no concept of what life is like for low-paid workers or the millions suffering on Universal Credit, with a basic allowance of less than £5,000 a year. And MPs, normally only elected once every five years, are completely unaccountable to their electors.

When the first Labour MP, Keir Hardie, entered the House of Commons he was not paid and nor were any MPs. Unlike Hardie, the overwhelming majority were from the elite and had ‘independent incomes’.

A first demand of the workers’ movement today has to be for a ban on MPs having ‘outside interests’, in the form of directorships, major shareholdings, or advisory positions with private companies. That is not enough, however. We should also demand that MPs can take only an average workers’ wage, as the Militant-supporting Labour MPs – Terry Fields, Pat Wall and Dave Nellist – did in the 1980s.

Alongside that it is necessary to fight for genuine democracy. The Chartists – the first independent workers’ party in history – demanded annual elections to parliament. Today MPs should be elected for a maximum of two years, with a right of recall at any time by their constituents.

The unelected House of Lords should be abolished, with instead a single assembly combining the legislative and executive powers, which are currently divided in Britain. The right to vote should start for 16-year-olds. Proportional representation would also be a step forward.

The fight for such democratic improvements is part and parcel of the struggle for socialism. Capitalism is a system based on production for the profits of the few rather than the social needs of the majority. The inevitable result is the cronyism and corruption we are witnessing.

Only by taking into public ownership the major corporations and banks that dominate the economy, under the control and scrutiny of the working class, in order to allow the development of a democratic socialist plan of production, would it be possible to lay the basis for a genuinely democratic society free from the muck and profiteering of capitalism.

For millions of working-class people, for whom the pandemic has meant enormous hardship, the Greensill scandal will act to drive home that we live in a society run by and for the 1%, at the expense of the 99%. It will fuel the growing search for a socialist alternative.



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April 2021