Follow the Money: from the Province of the Cat
In his screenplay for the Oscar winning film “All The President’s Men” William Goldman has the character Deep Throat instruct the two intrepid reporters to “Follow the money.” This is one of narrative fictions great lines and is far more memorable than what real-life Senator Sam Erwin, who was also conducting his own enquiry into President Nixon, said – which was, “The key was the secret campaign cash, and it should be traced.” I hear Hal Holbrook’s voice as Deep Throat as I watch Theresa May trying to sell her “deal” to the media and, by extension, to the people. History has taught us, in Scotland at least, that in every aspect of every Tory policy or political action it is always crucial to “Follow the money”, be it “dark money” or “dodgy money”; or more generally, to ask, “who benefits?”
William Goldman died this month (November) on Friday16th. He was not perfect – indeed, he was deeply flawed – but he was forensic, candid, brilliant and dugid. He has come into my mind often these past weeks as the flagellating carnival of Brexit passes by on its TV and radio bandwagon. The Prime Minister is currently spinning the deal as being the only one possible, when it’s not and knowing full well that, in all probability, the House of Commons will vote it down next month. So who is she really selling this amalgamation of compromises to?
Well, it will not be to those who are trying to live with the effects of her governments austerity programme; those who are struggling with Universal Credit and who suffer from the resulting hardship, depression and despair. It will not be sold easily to those wrestling with a mortgage, rent, low wages, homelessness, joblessness, disability, single parenthood, or to those from ethnic minorities or who are seeking asylum, or to women or children or anyone who is poor in any way whatever. So who does that leave? The middle class? The rich?
A recent report by Philip Alston, the United Nations rapporteur on extreme poverty and human rights has laid bare the misery the UK government has inflicted on its people with what he called “punitive, mean-spirited, and often callous” austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity. About 14 million people, a fifth of the UK population, live in poverty and 1.5 million are destitute, being unable to afford basic essentials. These are figures the rapporteur has cited from the Institute for Fiscal Studies and the Joseph Rowntree Foundation. He highlighted predictions that child poverty could rise by 7 percentage points between 2015 and 2022, possibly up to a rate of 40%. Alston concluded his two-week fact-finding mission to the UK with a stinging declaration that levels of child poverty were “not just a disgrace, but a social calamity and an economic disaster”, pointing out that the UK is the world’s fifth largest economy. Is this is the Great British family Theresa May loves to imagine out loud?
Add to this a report published this week and commissioned by the Equality and Human Rights Commission (EHRC) and we can see where the money is definitely not going. These figures show that on a per-head basis, social spending reductions (tax and benefit changes) since 2010 were significantly higher in England – equivalent to about 18% – than in Wales (5.5%) and Scotland (1%), in part because the devolved governments chose to mitigate some effects of the cuts.
The report makes clear that the decision to load austerity cuts excessively on to vulnerable groups contravenes the non-discrimination principles the UK is signed up to under international human rights law. There was little evidence, it concludes, that UK ministers had taken equality factors into account when taking tax and spending decisions.
The EHRC goes on to reveal that poorest 20% of people in England lost an average of 11% of their incomes as a result of austerity, compared with zero losses for the top fifth of households. Measured in cash terms, total spending on public services will have fallen by £1,500 per household in England by 2021-22, compared with just under £500 in Wales and £200 in Scotland, according to the study commissioned by the Equality and Human Rights Commission. The EHRC states the case plainly, “The results for Scotland, in particular, show that it has been possible to make spending choices which result in better outcomes for disadvantaged groups in Scotland than has been the case in England.” This is proof that at least in these crucial areas the devolved Scottish government can alleviate social deprivation imposed on the weakest in our society by the UK government, when the political will is there to do it. Would Labour or the Liberals keep the reductions to 1%? I doubt it. We know what the Tories would do.
So where does the money go? We can begin to see the corruption if we bother to look. Observation is, after all, revelation. For example The National Crime Agency is to investigate allegations of multiple criminal offences by Arron Banks and his unofficial leave campaign in the Brexit referendum. The Electoral Commission said the investigations would focus on £2m reported to have been lent to Better for the Country (BFTC), a company that was used to finance Leave.EU, and £6m more reportedly provided to the organisation, on behalf of Leave.EU, by Banks. Of the total, £2.9m was used to fund referendum spending on behalf of Leave.EU. There have been many cries of “crimes against democracy” from several politicians and outraged intimations that the Bank’s cash came from Russia. So far no-one has been arrested, charged or put on trial.
A similar haze of ordure hangs over the Scottish Tories and the “dark money” donated by the Scottish Unionist Association Trust (SUAT) to the Conservative Party. Dogged investigative work by the Ferret website has shown that the SUAT donated £318,876 to the Scottish Conservatives between April 2001 and February 2018. Under Electoral Commission rules, groups which make political contributions of more than £25,000 have to register with the watchdog, and report any donations in excess of £7,500. From Theresa May to Ruth Davidson and downwards, the Tories deny everything, that they were not “systematically shielding their donations” from view. Even though, ahem, (cough, cough) they were, and are.
Oppressing the poor. Channeling dodgy money for dubious practices. Playing a fast and cynically loose game with representative democracy. In Scotland these are the out of tune banjos we are used to hearing the Tories play. We have also grown accustomed to their excuses, bluster and untruths. There is always a talking head to be found to put up a defence, however flimsy. But even the magic membrane of political spin and convenient memory loss cannot hide or cover the sheer venality surrounding the latest money scandal to surround the Secretary of State for Scotland, the ever-confused David Mundell, who was described recently of threatening to morph into a “mendacious barnacle”.
Mundell is accused of “trousering” £40,000 in donations from property magnate Brian Gillies, a Singapore based businessman. Wealthy donors who live abroad can get around political funding laws by channelling funds through their companies based in Britain. As reported in The Morning Star on 23rd November, “Mr Gillies’s latest firm, Kirklee Property Company (2) Ltd, has given £27,500 to Mr Mundell’s office since 2016. Earlier donations were made through his now defunct companies Alchemist Estates Ltd and Stridewell Estates Ltd. His donations to Mr Mundell and Tory organisations since 2011 add up to a whopping £144,000.”
When you follow the money into this particular instance of corruption it gets worse. Brian Gilles is not a silent donor. In fact he has made it plain that he sees something like the current recession as a “massive wealth-building opportunity in disguise.” In an interview with the Scotsman’s business section in 2009, Mr Gillies said: “What you can do now (in a recession) is take advantage of a market where you can buy the properties you want to buy and you can buy them very cheaply. If you are profiting from the mistakes of other people, it’s people who didn’t do their job right in the first place. If they had actually looked at the economic fundamentals and studied the trends, they wouldn’t be exposing themselves. They were reckless with the amount of the debt they took on. They’ve got themselves in the problem.”
David Mundell has praised Mr Gilles “integrity and personal probity.” So much so that he gave him a business reference and has said that he has had “a significant involvement with the Conservative Party.” That the property tycoon, whose companies have also given £85,500 to the Tories’ central office, “provided valuable input … at the highest level” and that Gillies has also “taken a direct interest in campaigning and candidate development at local level.” Joined at the hip? Do mendacious barnacles have hips?
The pattern may be crooked, but it is a pattern none the less. Following the money gets us back to the question: who benefits? Why this urgency to leave the European Union? Why is Theresa May selling this deal in such a flamboyant fashion? It could be the mere fact that her political life depends on it, but in the scheme of things that is not a big enough reason. Could it be that the elite, the wealthy Tories and their supporters, including the PM, what they are actually aiming for is to stop the new EU Anti-Tax Avoidance Directive from becoming UK law? Which it must do in the UK in 2019/20 if we remain in the EU. This is aimed at company taxation, but that can seriously affect the dividends of company owners, directors and investors.
On its website the Anti-Tax Avoidance Directive state the five legally-binding anti-abuse measures, which all Member States could apply against common forms of aggressive tax planning. Member States can apply these measures as from 1 January 2019. It creates a minimum level of protection against corporate tax avoidance throughout the EU, while ensuring a fairer and more stable environment for businesses. The anti-avoidance measures in the Anti-Tax Avoidance Directive other than the rule on hybrid mismatches, are:
– Controlled foreign company (CFC) rule: to deter profit shifting to a low/no tax country.
– Switchover rule: to prevent double non-taxation of certain income.
– Exit taxation: to prevent companies from avoiding tax when re-locating assets.
– Interest limitation: to discourage artificial debt arrangements designed to minimise taxes.
– General anti-abuse rule: to counteract aggressive tax planning when other rules don’t apply.
No wonder the likes of Aaron Banks and Brian Gilles hate these measures. Having followed the money here I think we can begin to see just why the Tories want out of the EU. And as soon as possible.
Their nightmare vision of a low-tax offshore aircraft carrier economy would not benefit those who rely on what taxes are supposed to pay for. It would instead benefit people who do not use the NHS because they have private medical insurance, who do not need a state education system because they educate their children privately, who will never need to use social security because they are rich, who despise and want to make illegal trades unions, who believe in zero hours contracts, who do not care if the air quality in the cities is bad because they have houses in the country, who do not care if our beaches are dirty because they can take their holidays in exotic locations abroad. That is the reality of Brexit. That is what Theresa May is selling us.
At least is Scotland we have an alternative political route. We can make every election a referendum on independence. Then the people will know what they are voting for. It will be clear. It is the Tories who have reduced it down to this simple question. They have done so by their actions. Now we Scots have to stand by our actions. If there is a majority for independence then we declare independence. If we do not then we have to answer the question as posed by the African American poet Langston Hughes when he wrote, “What happens to a dream deferred?” Brexit means we cannot defer independence for much longer. Our society will not stand it. We acquired this burden of a union in 1707 but we can no longer endure it. We cannot afford to. The Tories pseudo-mantra is all about the “individual”, but no person or group can be human alone. As we know their real coda is money. Their fear is the truth.
In our current relationship with England we have reached a point of crisis. Edinburgh has a longitudinal equality relationship with London. We do not have a latitudinal equality relationship. We may share the same time, but we certainly do not share the same political temperature. We have to follow the money into this new, militant geography. Who knows if we will succeed, but I believe un-faked failure is far better and more acceptable than faked success. Theresa May is selling faked success. But we have to hold our nerve and acquire what the Georgian poet Titian Tabidze called “gadavardna”, which means “to throw oneself headlong, to take the plunge”, or as William Goldman had Butch Cassidy and The Sundance Kid say, on their famous cliff-jump scene,
Butch Cassidy: Alright. I’ll jump first,
Sundance Kid: Nope.
Butch Cassidy: Then you jump first.
Sundance Kid: No, I said.
Butch Cassidy: What’s the matter with you?
Sundance Kid: I can’t swim!
Butch Cassidy: [pauses, then laughs] Are you crazy? The fall will probably kill ya.
©George Gunn 2018