By John Pickard
In a period characterised by uncertainties, the one thing we can be sure about in 2021 is that the Tory Chancellor, Rishi Sunak, will be putting the huge burden of government debt on the shoulders of working-class people. It has just been announced that government borrowing between April and November, at close to £300bn, is three times higher than the previous highest figure since comparable records began in 1984.
Government borrowing this year is likely to be close to £400bn, a peace-time record. “When our economy recovers,” Sunak told the Financial Times, “it’s right that we take the necessary steps to put the public finances on a more sustainable footing.”
Profiteering and looting
We all know what the “necessary steps” will be, and they will not include a much-deserved pay-rise for ‘key’ public sector workers. They will not include any relief for local authorities, staggering along with only half the level of finances they had a decade ago. And they will not include relief for the NHS, weighed down by the double whammy of a Covid pandemic and a plague of profiteering and looting by the private sector.
What the Labour opposition should be demanding – but isn’t, largely because of Starmer’s insipid ‘opposition’ to Johnson – is that the Tories publicise the names of all those companies and individuals who have benefitted from the government cash bonanza. When it has come to workers on furlough, self-employed workers, small businesses or those on benefit, the government has had to be dragged kicking and screaming into giving any financial support at all. It has taken the professional footballer, Marcus Rashford, to do what Keir Starmer was incapable of doing: to force the Tories into some minimal efforts on the provision of free school meals over the holidays.
Money thrown about like confetti
But when it has come to big businesses and the pals of the Tory Party, nothing has stood in the way of taxpayers’ money being thrown about like confetti. A recent report in the Guardian (December 21), noted that, “A company with mystery investors and links to the Isle of Man was awarded government contracts worth £200m to supply the UK with personal protective equipment (PPE) after it was placed in a ‘high-priority lane’ for well-connected firms”
The ‘high priority lane’ was introduced by the Tories as a supposed pandemic emergency measure – and meekly supported by Labour – as a catch-all to give money to those with the best political connections, including companies dodging taxes by being registered off-shore.
Nods, winks and lucrative contracts
According to the Guardian, the high-priority lane was set up to assess and process potential leads from “government officials, ministers’ offices, MPs, members of the House of Lords, senior NHS staff and other health professionals”. It is by this means – friendly contacts, nods and winks all round – that uncontested contracts have been handed out to the tune of billions of pounds, many of them still not published to this day. It is by this means that a WhatsApp message from a friend and neighbour to Health Minister Matt Hancock manages to land a nice multi-million contract.
According to the National Audit Office, companies going through the high-priority lane were ten times more successful in landing contracts – irrespective of past experience in PPE or health-related contracts – than those outside the lane. Needless to say, the government has no plans to disclose the names of those companies in the high-priority lane – not that Keir Starmer has demanded they should be published.
Loan scheme abused ‘on an industrial scale’
Amid the deafening silence from the leader the Labour Party, it has taken Jolyon Maugham QC, director of the Good Law Project, to demand that the government should disclose which companies have got contracts through the high-priority lane. “Slowly it is going to emerge”, he says, “which companies won highly lucrative public contracts having been ushered through the VIP lane. There is a serious public interest in the government explaining precisely who was put in that lane, and why.”
As well as this particular gravy-train, it now looks like the government loan scheme to businesses has also been a good little earner for a lot of unscrupulous companies and business-people. More than £43bn has been lent to businesses and, according the Financial Times, as much as half of this may never be recovered. This lavish loan scheme – which, you can bet, is not going to benefit your local corner shop or the self-employed plumber up your street – has been described as a “giant bonfire of tax-payers’ money”.
The rules of the loan scheme are so loose that as much as £26bn of the loans are expected to lost to fraud. According to senior bankers, interview by the Financial Times, the scheme is being “abused on an industrial scale.” The chairman of the Fraud Advisory Panel reckons that “in 10 years’ time, people will still be looking for the money.”
Spivs who milk the system
Sunak announced the measure in May, saying “there will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.” Loans of up to £50,000, with no repayments for a year and then 2.5% interest over ten years. “It’s basically free money”, one banker told the Financial Times.
Within days, £8bn had been lent to a quarter of a million businesses. Many of these will have been set up as empty shells just to get loans, and in due course they will be ‘turned over’ – wound up – and the money lost. The kind of spivs who infest the Tory Party know all the ropes when it comes to ducking and diving within the parameters of company law.
Even the House of Commons public accounts committee criticised the government’s inability to assess the levels of fraud or even the likely economic benefits of the scheme. The chair of the committee, Labour MP, Meg Hillier, noted that “dropping the most basic checks was a huge issue that put the taxpayer at risk to the tune of billions.”
Bentley sales at record levels
So, while many workers are struggling cope with the insecurities of the pandemic and the lockdown, sales of luxury cars to business-types continues apace. According to Business Live, sales for the luxury Bentley car are booming, the company announcing that its “current order book is 60 per cent higher than it was at the start of the year – when it had the ‘best order bank’ in 10 years”.
Those at the top are creating the biggest ‘trough’ in the history of the British economy and their pals and associates are pushing their greedy snouts into it. Meanwhile, those at the bottom are struggling to cope and will be expected in the coming year to pay the bill.
This government, by its incompetence and corruption, has shown itself incapable of offering anything to the big majority of the population. There has never been a more important time for the Labour Party to be offering a vigorous and militant opposition to the Tories, to demand the publication of all the contracts, for all pandemic contracts to be based on in-house NHS procurement, and for an end to the corruption-fest. Unfortunately, that opposition is not going to come from Keir Starmer and his Shadow Cabinet. As the year of the pandemic draws to a close and a New Year looms, we need to redouble our efforts to take the Labour Party back to policies that are in the interests of the Many and not for the benefit of a corrupt Few.
December 22, 2020
