Monday, December 02, 2024
Ongoing huge cost of Brexit divorce
The Independent reports that Britain has set aside more than £10bn for post-Brexit payments to the EU as the UK continues sending billions to Brussels despite leaving the bloc years ago.
The paper adds that to cover the cost of the UK’s divorce from Europe, the government has accounted for £10.6bn in future payments for Brussels staff and diplomats’ pensions, as well as Britain’s pre-existing financial obligations:
Official government figures this week revealed that the provision for ongoing “EU liabilities” has fallen from £31.7bn a year ago and £38.7bn the year before.
But the figure still stands at more than £10bn, with critics saying the UK is still “paying vast sums for a terrible Brexit deal”. The revelation comes after Rachel Reeves’ Budget piled £40bn of new taxes on households and businesses - with the chancellor claiming the changes were necessary to fill a black hole in the public finances left by the Conservatives.
SNP MP Stephen Gethins, an ardent anti-Brexit campaigner, added: “Not only is Brexit taking away our rights, hurting business and removing opportunities from young people, it’s also costing a fortune.
“We are unnecessarily crippling our economy and paying billions for the privilege.”
Former armed forces minister Sir Nick Harvey said that as well as ongoing payments to the EU, Brexit is still having a significant impact on the economy.
The Independent last month revealed that government estimates show Brexit will cut UK trade by 15 per cent in the long run. This paper then uncovered figures from the independent spending watchdog showing that just 40 per cent of the economic damage of Brexit has materialised, with the majority of the impact yet to be felt.
Former Lib Dem MP Sir Nick told The Independent the government is “tinkering around the edges” and that “addressing the economic damage done by Brexit must become a priority”.
And, amid Sir Keir Starmer’s post-Brexit reset with the bloc, Sir Nick said a return to the single market and customs union must be on the table.
This money could be better spent on public services, instead we are having to pay out vast sums, without getting any of the benefits of membership in return, while at the same time crippling our economy by not being part of the single market.
Sunday, December 01, 2024
Buying influence?
The paper says that cash from companies that have never turned a profit, from unincorporated associations that do not have to declare their funders, and banned donations from overseas donors via intermediaries are all entering the system, according to research by Transparency International (TI):
Foreign governments are also donating millions in the form of flights, food and hotel stays. The gifts and hospitality from governments including those of Qatar, Saudi Arabia and Azerbaijan are allowed, even though all other types of donations must come from a permissible UK source. “It is increasingly clear that this loophole presents a reputational and security risk to our democracy,” TI said.
The findings are revealed in a report by the campaign group to be published this week. TI researchers analysed 78,735 donations worth £1.19bn reported to the Electoral Commission between 2001 and 2024. They found that £115m came from unknown or “questionable” sources – equivalent to almost £1 in £10 donated to parties from private sources.
Of the £115m from unknown or questionable sources, more than two-thirds – £81.6m – went to the Conservatives, partly explained by the party’s greater reliance on private donors than Labour, which gets more from membership fees and unions.
In response, the Electoral Commission, which regulates political finance in the UK, said reform was needed to “strengthen the system further”. A spokesperson said: “We stand ready to work with government and parliament on delivering improvements.”
The analysis, seen by the Observer, also reveals that the total donated privately to parties has risen dramatically, from £30.6m in 2001 to £85m in 2023. Meanwhile, between March 2001 and July 2024, £48.2m was given to UK politicians and parties by donors alleged or proven to have bought privileged access, influence or honours; £42m came from donors alleged or proven to have been involved in other corruption, fraud or money laundering; £38.6m came from unincorporated associations that have not reported the source of their income, despite parliament introducing new transparency rules in 2010; £13m came from donors alleged or proven to be intermediaries for foreign funds or a hidden source; and £10.9m was from companies that have not made sufficient profits to support the political contributions they made.
Beyond financial donations, the researchers analysed transparency registers since 2001, finding that MPs have accepted £11.6m of visits abroad, including £4.5m from foreign governments, parliaments and regime-linked groups.
Among the biggest funders of overseas trips was Qatar, which spent £460,000 on gifts and hospitality for UK politicians, mostly in the run-up to the 2022 World Cup; Saudi Arabia, which spent £400,000; Bahrain, which spent £200,000; and Azerbaijan, which spent £140,000.
TI said this was possible due to a “gap in legislation which allows foreign governments, including hostile states, to court UK politicians through all-expenses-paid overseas visits”.
Other comparable democracies such as that of the US have explicit rules to manage the funding of overseas trips funded by foreign governments.
In some cases, politicians went on to promote the interests of the governments that gave them gifts and hospitality. In 2022, the Observer revealed how Alun Cairns, then chair of the Qatar all-party parliamentary group (APPG), made a Commons speech praising Qatar before the World Cup.
The former Tory MP had received £9,323 worth of donations from the Qatari government in 2022 for two trips to Qatar. A statement via Cairns from the since dissolved Qatar APPG said it played an “active role in scrutinising all aspects of UK-Qatar relations, including human rights, ethics, education, energy and infrastructure”.
TI’s analysis further reveals how companies can donate even if they have no clear record of doing business in the UK. They must be registered with Companies House, incorporated in the UK and should be “carrying on business here”.
But TI said this was a “low bar” because while political parties are supposed to check for suspicious activity, such as a company being dormant, there is no ban on accepting money from them.
Another “loophole” means that since 2010, unincorporated associations – groups with no legal entity or requirement to disclose their funders – have donated huge sums to UK political parties and MPs. This includes private clubs linked to both the Conservatives and Labour.
Campaigners say the findings show the UK’s vulnerability to “undue influence from large donors, suspicious and corrupt individuals and foreign governments”.A briefing from Spotlight on Corruption this year concluded that “our electoral finance laws are riddled with loopholes and the enforcement regime is not robust enough”.
This is a major contribution to the debate on funding politics and highlights how badly reforms are needed.
