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Labour once again refuses to break with ‘business as usual’

Labour's links to PricewatehouseCoopers is yet another sign of a party unwilling to break from 'business as usual' and of a political system captured by corporate interests, writes Andrew Dolan

November 20, 2014
8 min read


Andrew DolanAndrew Dolan Red Pepper co-editor. @Andrew__Dolan


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reevesPhoto: Policy Exchange/FlickrRachel Reeves (right) is the latest Labour MP to accept the services of PricewaterhouseCoopers.

Another week, another cause for disappointment. As reported by Private Eye, Labour’s Shadow Work and Pensions Secretary, Rachel ‘tougher than Tories’ Reeves, has accepted help from PricewaterhouseCoopers (PwC), the multinational professional services network implicated in tax avoidance on an industrial scale. PwC has provided Reeves with an analyst to support her in her role as shadow minister, at a value of £41,125.

As Private Eye noted, since PwC is already advising the government on outsourcing welfare services, it appears Labour intends to ‘stick with this commercial approach to welfare should it find itself back in power next year.’ Not too surprising from a shadow minister who has repeatedly insisted she ‘agrees in principle’ with almost every aspect of the Conservative’s welfare reforms and has stated her intention to continue contracting out public services to the private sector, albeit at a more local level.

Reeves, however, is not the only Labour MP to accept PwC’s help, not by a long way. As the Guardian recently revealed, PwC has supplied over £600,000 worth of assistance to Labour to ‘help form policy on tax, business and welfare.’ Along with Shadow Chancellor of the Exchequer Ed Balls, shadow ministers Chuka Umunna and Tristram Hunt were recipients of PwC’s services.

Were it not so thoroughly worrying, the irony would be delicious: the party pledging to get tough on tax avoidance taking policy advice from the company facilitating it; the ‘people’s party’ working with those who pay no heed to the needs of the ‘people’s purse’ and the public services it funds. But it is, of course, very worrying: another sign of the corporate capture of democracy and the Labour Party’s unwillingness, or inability, to move beyond rhetoric and break with ‘business as usual.’

Labour has responded to accusations of political misconduct and of a conflict of interests by denying PwC influences policy decisions and defending the use of its services on the basis that it’s a long-standing practice of all three main parties that allows for ‘better scrutiny of government policy.’ In one sense Labour is right, the practice is well-established. For the last ten years opposition parties have received regular support from the ‘Big Four’ professional services networks—PwC, Deloitte, KPMG, Ernst & Young. Most notably, in 2009 PwC donated over £100,000 worth of services to the Conservatives so as to ‘prepare them for government.’

Nonetheless, in unabashedly dismissing legitimate political concerns with talk of tradition and mere technical assistance, Labour’s response only serves to highlight the extent to which corporate involvement in politics has become normalised. Figures from PwC’s annual reports support this conclusion: for the financial year ending 30 June 2005, they provided approximately 150 hours of ‘free technical support’ to political parties, yet in the last financial year this figure was 6,004, a staggering increase of almost 4,000 per cent. Of those 6,004 hours, 4,493 were provided to Labour.

‘In the interests of the firm’

As to the nature of PwC’s involvement, they claim only to help political parties to ‘better understand technical matters and the consequences of their policy proposals’ and deny actively assisting in their development. Without substantive evidence one cannot directly contradict PwC’s claim, yet, as the Guardian uncovered, they did provide ‘support’ to the shadow treasury for finance legislation passed in 2013—legislation that included revised anti-tax avoidance rules. It is unlikely that such ‘support’ is isolated.

Yet more important than specific policy assistance is the underlying motivation behind PwC’s political involvement and one does not have to dig too deep to discover what it is. According to PwC’s annual report, the cultivation of relationships with the main political parties is done ‘in the interests of the firm and its clients.’

‘In the interests of the firm and its clients.’ Worth repeating if only to underscore who exactly PwC analysts and researchers are working for when in Westminster, for it is certainly not the electorate. As to what these interests are, aside from being specialists in tax avoidance, PwC are global experts in the privatisation of the public, in transforming the social wage into shareholder profits. Over the years, PwC has held hundreds of mandates for privatisation and has been involved in the sale or attempted sale of public assets ranging from sewerage in Malaysia to council housing in Salford, and from postal services in Argentina to health services in South Africa. The list goes on and one can almost guarantee that where there are politicians looking to sell public services, PwC will look to profit.

All of this is not necessarily to say that those PwC employees working with Labour are actively agitating for privatisation or for looser tax structures, but rather to emphasise how their seamless integration into the process of party policy formation indicates how both institutions share a common ideological commitment to neo-liberalism and all its miserable manifest realities. Put simply, they don’t even need to agitate, a legacy of Tony Blair’s transformation of the Labour Party from a social democratic alternative to the Conservatives into what Tony Benn accurately termed a ‘a quasi-Thatcherite sect.’

One only has to look at the euphoric support of the three main political parties for the capitalist golden goose that is the Transatlantic Trade and Investment Partnership to see how far corporate interests and attitudes are accommodated and reflected throughout the political establishment. Indeed, a week rarely goes by without at least one prominent politician declaring their party to be the most ‘pro-business.’ As the saying goes, what is good for business is good for the country, and it is precisely this axiom that enables firms like PwC to intervene in the democratic process in open pursuit of its own interests and those of its clients and get away with it.

Of course, corporate involvement in politics is neither new nor restricted to Labour. Yet PwC and many more firms like it are together hollowing out what remains of our fragile democratic institutions and submitting them to the will of corporate capital with increasing regularity.

Still, if one were to believe the shrill and repetitive cries of the mainstream media and the political establishment, the greatest threat to democracy still comes from the trade union ‘barons’ and ‘gang-masters’ supposedly controlling the Labour Party. Old myths do indeed die hard. Yet these latest revelations should serve as another reminder of the other ‘enemies within’ and that should Labour win the 2015 general election, what awaits the British public is indeed ‘business as usual,’ despite the best efforts of the Labour press core to tell you otherwise. Afterall, the best way to judge someone is by the company they keep.

For full Private Eye article see: Vox Political

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Andrew DolanAndrew Dolan Red Pepper co-editor. @Andrew__Dolan


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