In the wake of the Owen Paterson affair, Boris Johnson hopes you will conclude that all politicians are the same, that they are all self-serving knaves and that all the fuss over lobbying is just another short-term political storm. That way, no scandal matters. That way, anything goes. That way, his own lifelong disregard for the norms of responsibility has no consequences. That way, shame doesn’t exist.
The U-turn performed by ministers over Paterson does not come from the heart. There is no real contrition here. Rather it was an entirely tactical response to what should have been a foreseeable public backlash against what the government was doing – ripping up the parliamentary standards process to save an MP found guilty of multiple breaches of the lobbying rules to push the interests of the companies paying him, one of which was awarded £600m of government contracts with no competitive tendering process whatsoever.
While Tory MPs who followed the prime minister’s instructions on this issue are left wondering why they ever trusted Johnson, there is a bigger question in play. That is how to ensure public standards in the UK remain high, that the country does not become a convenient home for more illicit finance or follow the dangerous path of tearing down every institution in sight because it attracts the ire of the faction in charge.
It is now more than a month since the Guardian’s publication of the Pandora papers – an enormous cache of documents revealing the secretive purchases of UK assets, widespread use of shell companies to cover tracks and the sources of wealth of some of those named who have given millions of pounds to the Conservative party.
After the publication of those papers, Labour is calling for four things.
First, the bringing forward of the registration of overseas entities bill. This legislation is aimed at showing the true nature of ownership of property and other assets in the UK. It has been promised by the government for almost four years and would enjoy cross-party support, but still it will not bring it forward.
Labour is today calling for the government to stop this prevarication, and to commit to bringing forward this legislation by 10 December 2021 – the fourth anniversary of the UK anti-corruption strategy, which in 2017 committed to bringing a draft bill in that session of parliament for the establishment of a public register of beneficial ownership of overseas legal entities.
Second, reform of Companies House must be brought forward. The use of shell companies lies at the heart of the secrecy outlined in the Pandora papers. There is no good reason for ownership to be hidden behind layer after layer of shell companies whose only purpose is to obscure the facts from public view. Companies House must be empowered to become a vigilant guardian of propriety, not be left as a passive library of data.
Third, the government must act on the recommendations made in the intelligence and security committee’s Russia report of last year. This report described London as a “laundromat” for illicit finance, and called for action to deal with shortcomings in the unexplained wealth order regime and for a register of members of the Lords or Commons who serve on the boards of overseas companies. The response of the government to these recommendations has been to hope they go away.
And fourth, we must ensure that the elections bill currently going through parliament requires political donations to be open and transparent, and to come from money generated in a legitimate fashion.
To reinforce all this, Labour has also announced the formation of an illicit finance taskforce with the aim of making the UK the most difficult place possible to launder the proceeds of looting and kleptocracy.
This is necessary because the use of the UK as a place to store or wash illicit money is not just an issue of financial regulation or tax revenue – it is a national security issue and should be recognised as such.
If the prime minister doesn’t urgently bring forward the four measures Labour has set out today, he may as well be giving yet another green light to tax avoidance.
The size of the UK’s financial services industry gives us both a special responsibility and an opportunity. The responsibility is to show that we are determined the UK will not be a welcome financial home to kleptocrats. And the opportunity is to set standards that will set an example elsewhere in the world.
Underlying all of these is something bigger – a rejection of the dismal idea that politics is simply a gravy train for the self-interested.
This recent lobbying scandal was certainly not the first involving money and politics, and it is unlikely to be the last. But what makes it stand out is the response of the government of the day, which was not to try to stop such things happening, but to rip up the system that declared they were wrong. The country deserves better than that.