Crony capitalism alive and well under the Conservatives

David Cameron claimed to be against “the far-too-cosy relationship between politics, government, business and money”. The reality of the Conservatives in power is somewhat different.

Tamasin Cave of Spinwatch looks at the links between politicians in charge of big outsourcing departments, lobbyists and the corporate world, after welfare minister Chris Grayling faced calls yesterday for a probe into donations he received before the election from firms involved in competing for public sector contracts.

In February last year David Cameron declared: “In this party, we believe in competition, not cronyism. We believe in market economics, not crony capitalism”, referring to what he described as “the far-too-cosy relationship between politics, government, business and money”.

And yet, this is the picture that is starting to emerge, as donors to the Conservative party and politicians are awarded lucrative contracts.

As our public services are offered wholesale to private sector companies, such lobbying will only intensify. As Cameron also says:

“This isn’t a minor issue with minor consequences. Commercial interests – not to mention government contracts – worth hundreds of billions of pounds are potentially at stake.”

For companies bidding for public sector work, lobbying is a tactical investment, whether in the form of donations to politicians, the hiring of political insiders, or sponsoring influential and well-connected think tanks to increase their profile and push their agenda.

Witness the sustained lobbying by the private healthcare sector in the UK. (For more on private healthcare lobbying in the UK, watch this short film,  or read the excellent ‘The Plot Against the NHS’). The revolving door between healthcare companies ( in black), think tanks ( in grey) and government is shown in the chart below. It spreads through Labour as well as the Conservatives.

No figures exist for the UK, but the estimated rate of return in the US from lobbying activity is that for every $1 spent, a company can expect to see a $100 boost to their bottom line. If it didn’t, they wouldn’t do it.

Lobbying opportunities are opening up all the time. The Liberal Democrats are now offering face-to-face meetings with ministers, including the deputy prime minister, for a £25,000 annual membership fee to its Leaders’ Forum.The party defends it as an opportunity to ‘stimulate conversation’, though to many it smacks of privileged access for cash.

“I believe that it is increasingly clear that lobbying in this country is getting out of control,” says the prime minister. And yet, there is no sign of the only measure capable of revealing the behind-the-scenes lobbying for government contracts – a statutory register of lobbyists – being legislated for any time soon.

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