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The corruption of Britain The Pandora Papers reveal that Westminster is covering for crooks

Waving away that stamp duty (Photo by Colin Davey/Getty Images)


October 5, 2021   5 mins

Last week, a man called Malcolm Offord joined the Government as a minister in the Scottish Office. This was a surprising appointment. His electoral experience seems limited, although he did fail to win a Lothian region seat in the Holyrood vote earlier this year. He was also backer of a pro-Union group in the 2014 referendum.

But the financier’s real qualification for office seems to be the accruement of a fortune so great that it enabled him to donate £147,500 to the Tories. So now he has been given a lovely lifetime place in parliament to rule over us with a peerage, plus the added bonus of a ministerial job with all those nice perks of office and status.

Offord will find himself in good company in the House of Lords. The Financial Times last year worked out that the elevation of billionaire Tory benefactor Michael Spicer made him the 22nd former donor to be given a peerage in 13 years. Between them, they had given more than ÂŁ50m to the three main parties.

Boris Johnson displays a special fondness for placing pals and party donors in the upper chamber; such folk comprise about one quarter of the people he has ennobled. The prime minister even overruled the appointments’ commission to force disgraced former party treasurer Peter Cruddas into the Lords. Lo and behold, the grateful new peer bunged another half a million into Tory coffers a few days after taking up his seat.

Yet Britons like to believe their country is not corrupt, preferring to lecture others on good governance. The harsh truth is the House of Lords, an archaic institution stuffed with people who bought seats or inherited titles, serves as a grotesque symbol of the blatant corruption that stains our nation. Instead of hiding the fact that well-connected people can buy power and influence, we hand them fancy titles, silly crests and scarlet robes.

Perhaps this is part of the same deluded exceptionalism that makes many Britons believe their empire was less brutal, damaging and greedy than others. Yet once again, we see how Britain is being built on foundations of stolen loot, led by the City of London as its accountants, bankers, estate agents, financiers and lawyers wash mountains of dirty cash for the planet’s dodgiest people. Another scandal has broken with the Pandora Papers, the latest massive cache of leaked papers, giving a glimpse into the hidden wealth, tax dodging and money laundering of some of the world’s richest and most powerful people. And with sickening inevitably, we see once again how our nation sits at the epicentre of these tawdry activities.

Take the revelations about the Aliyevs, the ruling family of oil-rich Azerbaijan which is led by a friend of Prince Andrew and has been home to huge British investment. When I visited Baku in 2012, I met an astonishingly brave woman called Khadija Ismayilova, who has endured blackmail, been filmed on hidden cameras having sex in her home and been imprisoned on trumped-up charges to stop her exposing corruption.

Another activist told me why he always locked his car: “Not just to stop people taking things but to stop the police planting drugs or a weapon.” Now we learn that a network of offshore companies tied to this gruesome family and its close associates has traded almost £400m of UK property over the past 15 years — including flogging a £67m property to the Queen’s crown estate.

Yet this is an autocratic regime frequently condemned for its nefarious activities that include rigged elections. Ismayilova and other journalists risked their liberty to fight for the democratic values we claim to espouse, revealing how their first family benefitted from state contracts awarded through hidden shell companies — including the £177m showpiece Crystal Hall used for the Eurovision Song Contest, which gave me cover to enter the country as a journalist. The European Union and human rights groups have condemned the “widespread and pervasive” corruption that scars Azerbaijan. Yet the Aliyevs were not stopped from buying and selling many lucrative properties in Kensington, Knightsbridge and Mayfair. One purchase was even made through an offshore company owned by the ruler’s son when he was 11.

Again, these sleazy disclosures cut deep into the heart of the UK establishment. They include one Russian businessman whose companies have backed 34 Tory MPs and made millions from an allegedly corrupt Russian pipeline deal, while another prominent Tory donor who backed Johnson’s leadership campaign was reportedly involved in one of Europe’s biggest corruption scandals. Only last month it emerged that George Osborne won business from a firm run by Oleg Deripaska, an oligarch close to Vladimir Putin and banned from the United States. It came through his friendship with the firm’s chairman Lord Barker, a former Tory minister in the coalition given a life peerage.

Similarly, half of Russian money-laundering involves Britain while our lawyers earn fortunes from their oligarchs fighting legal battles in London’s courts. No wonder Putin sees the West as so weak. The Pandora Papers show how even Raffaele Amato — the mobster tied to a dozen murders who inspired the gangster TV show Gomorrah — was able to use a shell company registered in the UK to buy property.

Five years ago, David Cameron hosted a landmark anti-corruption summit in London that underlined the self-deception — just a few weeks before losing the Brexit ballot and going off to lobby for Lex Greensill. We pour vast sums in aid into combating corruption around the world, then ignore how much of it is stolen by repulsive regimes.

The current chancellor Rishi Sunak seems complacent, claiming Britain’s track record on tackling money laundering is “very strong” while promoting freeports, So is it any wonder the Government does so little to stem the flow of dirty money, let alone shut down the tax havens under our jurisdiction that do so much harm to the world? Looters and thieves need help to stash their stolen cash. And according to the Tax Justice Network, the three places that do most to support such practices are the British Virgin Islands, Cayman Islands and Bermuda — all of which come under our flag. An analysis of these latest documents by the International Consortium of Investigative Journalists found 956 companies in offshore havens tied to 336 leaders, politicians and senior officials — with more than two-thirds set up in the British Virgin Islands.

Westminster could stop providing cover for crooks, despots and dodgy oligarchs with ease, if it were not so complicit. The Government has repeatedly pledged to bring in a register of the owners of the 100,000 offshore-owned properties; instead, we discover former Prime Minister Tony Blair and his wife Cherie saved themselves £312,000 in stamp duty using such tactics. The National Crime Agency’s international corruption unit has an annual budget of about £4m — which one quarter of the sum spent by its target, Zamira Hajiyeva, wife of a fraudulent Azerbaijani banker, in Harrods on jewellery and designer clothes. Needless to say, her £15m Knightsbridge home was owned by a company based in the British Virgin Islands.

Meanwhile, governments encourage City advisory firms to spread like knotweed in the undergrowth of Whitehall, where they rake off big sums from taxpayers even as they advise plutocrats and multinationals how to avoid paying fair dues to the exchequer. The “Big Four” accountancy firms have been accused by parliament of using expertise from staff seconded to the Treasury to help clients avoid tax. But as the civil service was cut back, ministers increased use of these consultancies. The pandemic boosted their earnings again as normal rules on tendering were ditched. So we see a firm such as Mckinsey pay out fines over links to a destructive South African corruption scandal and its lethal role in the US opioid addiction crisis, yet its advisers are still hired on hefty daily rates by Whitehall.

Britain needs to wake up. The mother of democracy has given birth to a system that aids kleptocrats and thieves. And as the famous saying goes, a fish rots from the head down. When appointing his latest minister, Johnson claimed he scoured the country for the best talent and gave Offord the job and peerage because he had “a huge amount to offer”. Few will be fooled.

The Prime Minister’s words drip with contempt for all those artists, carers, doctors, factory workers, retailers, teachers, scientists and soldiers who might contribute far more to the benefit of our nation in return for the £323 attendance allowance in the Lords — a tax-free daily sum roughly the same as the weekly minimum wage. Behind our facade of democracy, led by such a selfish and soiled elite, lies a country hideously stained with corruption.


Ian Birrell is an award-winning foreign reporter and columnist. He is also the founder, with Damon Albarn, of Africa Express.

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Peter LR
Peter LR
2 years ago

This reads like a rant without a solution. What are you proposing? Do you have a political bias here? ‘‘Twas always so that money tends to corrupt human beings; but unfortunately humans are needed to run countries. Where Britain is on the corruption scale I don’t know; but people come here to set up business because there is generous redress in our legal system. Please write an article suggesting where we go from here to get even better.
PS the House of Lords has some great campaigning people in it as well as hangers-on. Without a second chamber to challenge legislation you end up with the kind of loony-laws the Scottish Parliament are trying to force through as there is only one legislative body.

Ian Barton
Ian Barton
2 years ago
Reply to  Peter LR

Indeed, it does read like a mild Guardian rant than an informative piece.
It should also be emphasised that Blair and Cameron were as/more guilty of “stuffing the Lords” with their mates as Johnson may be.

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Ian Barton

Why the whataboutery? He didn’t exclude Blair from his criticism but specifically mentioned him. Various Unherd commentators always seem uneasy, unless the article in question is a rant against the Left, particularly of the ‘woke’ variety. Why you can’t be both against identity politics and institutional corruption, I really don’t know.

The argument seems all too plausible, and includes many concrete examples. This is why among other ills London has become a playground for dodgy plutocrats, rather than the needs of its own population. There isn’t much difference between the Remainer and Brexiteer sides of (parts of) the Tory Party on this one. Fine, we have undertaken Brexit, the point of which was to govern ourselves in our own interests. The government should focus on the needs of its own population rather than its dodgy wealthy friends from around the world.

Last edited 2 years ago by Andrew Fisher
Ian Barton
Ian Barton
2 years ago
Reply to  Andrew Fisher

I and most others here are against both institutional corruption and identity politics, so you can rest easier on that.

Last edited 2 years ago by Ian Barton
Terry Needham
Terry Needham
2 years ago
Reply to  Ian Barton

That isn’t obvious I’m afraid.

Jeff Butcher
Jeff Butcher
2 years ago
Reply to  Andrew Fisher

I agree with you. I thought this was a great piece. Certain sections of this country’s establishment really do stink

Matt B
Matt B
2 years ago
Reply to  Peter LR

No it doesn’t. And ask yourself if you have a political bias while you are at it. This reads instead like a reminder, helped by Panama, that rampant corruption connected in turn to opposed foreign powers is not in our interest. When swathes of housing are bought up by launderers, tax-avoiders, dictators and criminals it is not in our interest. When sleaze and greed skew decisions and the functioning of parliament, the judiciary, professions and civil society to the point of their compromise it is not in our interest. Unfortunately, from a lazy and perhaps comfortable standpoint you show your own ignorance. Little is done but there ARE laws on the statute book to prevent this kind of activity while exposing and ending this stuff takes time, resources and enforcement. Start with the Bribery Act. But more importantly consider why you don’t care – or even take the time to inform yourself where we are on corruption scales (we are not the worst but is that your benchmark)?

Last edited 2 years ago by Matt B
Nick Wright
Nick Wright
2 years ago
Reply to  Matt B

Agreed. Start by regulating the housing market like the financial services market. Hold companies and individuals accountable for financial crime they’re facilitating. Ensure that those involved in the trade of property are fit and proper to do so. Disallow price fixing and collusion. Fine, ban and imprison those flouting the rules. Without the inflow of dirty foreign money, we might finally see the long-overdue correction in house prices.

Jon Redman
Jon Redman
2 years ago
Reply to  Nick Wright

We should ban murder and robbery, too. And burglary. Those murderers – they break into houses, they murder people, they steal stuff and all it’s completely legal in this filthy corrupt country.
And give me a cheap house now. I want to have bought in where other people bought in.

Nick Wright
Nick Wright
2 years ago
Reply to  Jon Redman

If I follow this logic (?) correctly, you’re saying that someone who has committed murder shouldn’t be “banned” (ie punished)? I’m just saying that better rules should be put in place with better oversight.

The point about cheap housing is just bizarre. I simply suggested there needed to be a correction.

Last edited 2 years ago by Nick Wright
Jon Redman
Jon Redman
2 years ago
Reply to  Nick Wright

You are ranting vehemently in favour of laws that already exist.
This being so, you should be ranting in favour of laws against murder.

Nick Wright
Nick Wright
2 years ago
Reply to  Jon Redman

Regulation and law are two different things. And so are ranting and expressing a reasoned point of view. Tough morning?

Jon Redman
Jon Redman
2 years ago
Reply to  Nick Wright

Stupid and ignorant aren’t a reasoned point of view.

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Jon Redman

‘Stupid’ and ‘ignorant’ are just slurs, the only person making extreme and aggressive comments on here us you. Either make a specific argument or leave it to those who are.

Last edited 2 years ago by Andrew Fisher
David Morley
David Morley
2 years ago
Reply to  Nick Wright

I think some tablets might be sitting at home untaken.

Charles Lawton
Charles Lawton
2 years ago
Reply to  Jon Redman

Yes, the laws exist, however for them to work transparency is needed.

Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Jon Redman

Making an argument, as Nick Wright and others do, isn’t a ‘rant’ . Laws aren’t everything. It is the institutional culture that also matters, as do the resources put into combatting corruption and venality. And doesn’t appointing someone based on the size of their political donation stink, whether or not any specific law (yet on the statute book) has been broken?

Your murder example is actually not an inapt comparison, there are many countries where political murders are rife despite murder being a crime on the statute book.

Last edited 2 years ago by Andrew Fisher
Matt B
Matt B
2 years ago
Reply to  Andrew Fisher

True

David Morley
David Morley
2 years ago
Reply to  Nick Wright

I think he is saying that in spite of the law murder happen so this just isn’t news and we can’t do much about it.
Its a silly point either way, since the point of the article is that we not only turn a blind eye but actively collude.

Last edited 2 years ago by David Morley
Andrew Fisher
Andrew Fisher
2 years ago
Reply to  David Morley

And in fact the murder example is apt in some societies where police turn a blind eye to political murders for example. I don’t understand his aggressive response to this, maybe he loves the government uncritically.

David Morley
David Morley
2 years ago
Reply to  Andrew Fisher

I think some people just go off on one. It’s their personality. But it doesn’t help the debate.

Billy Bob
Billy Bob
2 years ago
Reply to  Jon Redman

You really are a fool. I don’t believe murder is tolerated in this country the way corruption clearly is. Just because it’s a more sophisticated corruption than you’ll find in a banana republic doesn’t mean it’s any less corrosive.
Where your strange rant regarding taking people’s property comes from I have no idea

Steven Farrall
Steven Farrall
2 years ago
Reply to  Nick Wright

Oooo noooooo,. The Financial Catastrophe Authority is up there in the 1st class seats with the whole rotten lot of them The FCA is a very subtle form of corruption, but corrupt it is. Do not visit its model on any other sector.

Jon Redman
Jon Redman
2 years ago
Reply to  Steven Farrall

Since 2016, when the Market Abuse Regulation came in, the FCA has received about 5,000 reports of market manipulation, but has issued only two sanctions, for a total of ÂŁ140,000. In the other 4,998 cases they got away scot free.
So even if you do something so bad that it gets you reported to the regulator, there’s a 99.96% chance you’ll get away with it. In the stunningly unlikely event you don’t get away with it, the fine will be so trivial it needn’t dissuade you. In fact, you can pay the fine with some of the proceeds of all the other market abuse you’re getting away with.
Market abuse is tolerated in UK financial markets by its regulator.

David Morley
David Morley
2 years ago
Reply to  Jon Redman

Jon – I think you got into an argument above with people you basically agree with.

Matt B
Matt B
2 years ago
Reply to  David Morley

Seems – esp wrt above FCA comment – until you read comments below that do not accept the corrosive effect of corrupt and ill-gotten gains being ‘legally’ ‘invested’ in Britain (my main concern). Not only is some tainted but it is just as interested in investing in securing control or outcomes- or avoiding both elsewhere.

Last edited 2 years ago by Matt B
Andrew Fisher
Andrew Fisher
2 years ago
Reply to  Jon Redman

So… are you saying this is a good, or a bad thing?

robert stowells
robert stowells
2 years ago
Reply to  Nick Wright

My experience of the Financial Services Market regulators was a nightmare. Seemed completely in the pockets of the establishment.

Jon Redman
Jon Redman
2 years ago
Reply to  Matt B

How about if you educate yourself on “where we are on corruption scales”? You don’t appear to have a clue and in fact your comment reads like something one might find on http://www.housepricecrash.com.

Matt B
Matt B
2 years ago
Reply to  Jon Redman

Very (too) aware thanks. And we clearly have very different reading lists, concerns and experiences of corruption. Try reading the UK Anti-Corruption Strategy 2017-2022, Nick Shaxon’s work (e.g.) on offshore havens and the recent history of criminal/stolen national resource and other revenue being sequestered or ‘invested’ in Britain. And that’s before we get to the rest of the world’s poisonous proceeds silting down quietly and even outwardly ‘legally’ in the gentle marshes of Thames London – after raging through deep-cut canyons of suffering, death and destruction in their making overseas. It is a threat to integrity. Wake up.

Last edited 2 years ago by Matt B
Billy Bob
Billy Bob
2 years ago
Reply to  Jon Redman

Educate yourself? Somebody has been hanging around in woke circles clearly!
It’s the statement of choice when you’re unable to get your point across clearly, simply accuse the other side of ignorance and walk away.

Ferrusian Gambit
Ferrusian Gambit
2 years ago
Reply to  Matt B

Is it really not in our interest or is it just what you wish wasn’t in our interest?
Switzerland seems to be humming along just fine these days after having turned a blind eye to looted Nazi gold.

Last edited 2 years ago by Ferrusian Gambit
Matt B
Matt B
2 years ago

Both – interest having many meanings

Last edited 2 years ago by Matt B
Peter LR
Peter LR
2 years ago
Reply to  Matt B

Hi Matt, I try not to have a political bias but a utilitarian view: how do we solve it. I do not have the necessary information to work out a corruption scale. Do you; or could you point me to where the data is?
I am biased against slagging off Britain for the sake of it; preferring to see our shortcomings in an international context.
How long have these loopholes been in place? How old is the Bribery Act? How has it been effectively used since globalisation has been the driver of economics? As I said, it would be great to see workable solutions suggested.

Jon Redman
Jon Redman
2 years ago
Reply to  Peter LR

I do not have the necessary information to work out a corruption scale. Do you; or could you point me to where the data is?

https://www.transparency.org/en/what-is-corruption
is a good start.

Peter LR
Peter LR
2 years ago
Reply to  Jon Redman

Thanks, it’s an interesting site.

Peter LR
Peter LR
2 years ago
Reply to  Matt B

Matt, thanks to Jon below for the reference: Transparency International lists UK as joint 11th in the corruption list of 180
countries, i.e. clean.

Will R
Will R
2 years ago
Reply to  Matt B

Succinctly put,

Alan Hawkes
Alan Hawkes
2 years ago
Reply to  Matt B

I have a political bias of being against corruption. Does this rule me in, or out?

Alan Thorpe
Alan Thorpe
2 years ago
Reply to  Peter LR

There is a solution. The politicians allow the loopholes, but if they closed them the money would go elsewhere. We regularly have the youth of today demanding higher taxes on the rich but if they are taxed more they will move the money and pay less tax. It isn’t the rich that bother me, it’s the incompetent politicians. Yesterday Sunak was boasting about 10 years of sound Tory management of the economy. Why he is considered a possible leader is beyond me, but with Boris he doesn’t have much to live up to.

Peter LR
Peter LR
2 years ago
Reply to  Alan Thorpe

Alan, I’m sure there is a better way, but I don’t know the law enough. I’m interested to know how long these loopholes have been around and how many Governments have conveniently “ignored” them.
I fear we have the politicians we deserve by making politics a hostile environment in which to serve the country. Those who would be better leaders are no doubt doing things outside of ranting spotlights. Meanwhile we probably have spawned a self-serving class who are impervious to criticism and abuse.

Sarah H
Sarah H
2 years ago
Reply to  Peter LR

retracted

Last edited 2 years ago by Sarah H
Peter LR
Peter LR
2 years ago
Reply to  Sarah H

Hi Sarah, I assume that if someone cannot propose solutions they may well not be presenting information with due respect to the nuances implicit in the problem. I’m looking for constructive criticism which seemed absent in Ian Birrell’s article.

Billy Bob
Billy Bob
2 years ago
Reply to  Peter LR

It’s not the journalists job to find solutions though, that’s supposedly the job of our elected MPs. All a journalist has to do is expose wrongdoing

Christopher Barclay
Christopher Barclay
2 years ago
Reply to  Peter LR

The first step to finding a solution is to recognise that there is a problem. You presumably see the current situation as quite acceptable: the highest ever rate of peacetime taxation with falling standards of public services.

Peter LR
Peter LR
2 years ago

Hi Christopher, the Panama papers showed there is a problem years ago. I don’t think it is at all acceptable and would like to hear constructive solutions. I am not at all happy with how the Government is dealing with things at the moment.

Dave Corby
Dave Corby
2 years ago
Reply to  Peter LR

After doing international business and working with charities I would happily put Britain low on the corruption scale.
When I want a government official to do something I may have to wait in line for ages, but i do not have to slip them some cash under the table.
Equally I never had to produce a packed envelope to complete a project.
My dealings elsewhere were often plagued with finding ways to avoid these or give up on what I wanted to do.
Yes I want the laws enforced, but I find it hard to care that someone is so lost that they will pay large sums of money so they can pretend they are important.

Matt B
Matt B
2 years ago
Reply to  Dave Corby

It matters from the moment they unduly and/or with no merit affect or make decisions that affect others – esp in the public domain.

Last edited 2 years ago by Matt B
Doug Pingel
Doug Pingel
2 years ago
Reply to  Dave Corby

Many of the “Thinking” people of the UK do not understand what you have had to contend with. As a Shipmaster my problems were not on the same scale but never-the-less real. Whenever I spoke of “Dash” to many people in the UK most just exclaimed “but that’s against the law”. Their naivety sometimes made me angry.

Jorge Espinha
Jorge Espinha
2 years ago
Reply to  Peter LR

The solution is implicit. Change the laws and pratices that have turned Britain into a money laundromat. Kick the oligarchs out. Change the libel laws. This is one the few problems that can be solved with laws.

Claire D
Claire D
2 years ago

It would be helpful if there could be an impartial, systematic analysis done by someone, for UnHerd say, to assess how many members of the House of Lords seem to have acquired their seats via corrupt practices, and how many are genuine, having useful skills to offer in helping to run the country.
I find articles like this, important as they may be in exposing bad practice, unhelpful because they are so opinion based, Ian Birrell obviously wants to scrap the upper House. All that happens then is some people who want to scrap the HoLs will agree and others who want to maintain it will disagree. Let’s have some fact based analysis please.
After all there are 788 members, if 300 for example are there for no good reason, then that still leaves nearly 500 who are worth listening to.

Last edited 2 years ago by Claire D
Ferrusian Gambit
Ferrusian Gambit
2 years ago
Reply to  Claire D

There are many who were selected for their expertise and specialist knowledge, especially in law, science and art who are there to refine and put suggestions and amendments based on that expertise. I would say this group performs a valuable national service.
I do not know how feasible or possible it is, but increasing the number of these types of peers and decreasing the numbers associated with particular parties as political appointments would be a good reform.

Claire D
Claire D
2 years ago

Yes, that’s what I would like to see.

jill dowling
jill dowling
2 years ago
Reply to  Claire D

Excellent suggestion. I was hoping UnHerd would bring balance that is lacking in most other sections of the media.

Brendan O'Leary
Brendan O'Leary
2 years ago

I don’t know how you managed to stuff “freeports”into this rant.
They offer a good solution for exporting businesses who also have to import materials to avoid paying double tax at point of export then employing extra staff just to claim it back.

Andrew Sainsbury
Andrew Sainsbury
2 years ago

Then make the whole country a freeport. Defining geographical zones to apply discriminatory taxation is an attack on democracy, efficiency and common sense. Complex taxation is a tool politicians use to divide and rule.

Brendan O'Leary
Brendan O'Leary
2 years ago

The last sentence I can agree with to some extent but I see it more as job creation scheme for lawyers and bureaucrats. Which occupations, coincidentally, are the backgrounds of the majority of politicians.
No politician will push for the whole country a freeport because border taxes are the original taxes of gatekeepers and highway bandits, before income taxes, and they are addicted to them.
But freeports are politically possible for a limited number of ports, and they tend to benefit medium sized manufacturing businesses more than megacorps.

Michael Joseph
Michael Joseph
2 years ago

“But as the civil service was cut back, ministers increased use of these consultancies.”
This comment tells you all you need to know about Birrell’s biases. If only the civil service and the rest of Britain’s bloated bureaucracy actually had been cut back! We can only dream…
There’s something cloyingly narcissistic about this piece and others that portray Britain (and the West) as somehow uniquely wicked. Of course there is corruption here and of course things could be improved. But utopians like Birrell seem to think that anything less than some imaginary perfection is an evil betrayal. For somebody who seems to pride himself on being a well-travelled man of the world, Birrell always strikes me as someone who is remarkably naĂŻve. Instead of using the people he meets on his travels as sticks to beat Britain and the West with, perhaps he should actually listen to them. I think he’ll find (as I do) that most people would give anything to live in a society as free and as relatively free of corruption as Britain.

Jon Redman
Jon Redman
2 years ago

What a poor article.
We don’t really need Mr Birrell’s rather foam-flecked contribution to form a view on the extent of corruption in the UK. We have people like Transparency International, not exactly a hotbed of Tories, to do it for us. Their latest Transparency Index tells us Britain is 11= of 190-odd countries.
The author is any case clearly confused between where the corruption occurs and where the proceeds are spent. If some crook steals a lot of the national wealth of Azerbaijan and then spends it in London, he evidently sees London as the real problem. This is, of course, very silly indeed. The fact is that the UK is an attractive place to live and this is true whatever the origins of one’s money. He might equally well have written that Mars is at fault for the shoplifting of so many of its Mars bars.
The real giveaway is the final sentence, where Ian is forced to concede that all Mr Offord’s alleged “corruption” has bought him is a worthless title that dies with him, and ÂŁ323 a day. Well, blow me down! Never mind the hundreds of millions in Azerbaijan – if the chiselling little git turns up to the House of Lords 450 times, he’ll be in profit!

Colin Elliott
Colin Elliott
2 years ago
Reply to  Jon Redman

In the last few days, I have heard the fact that lots of ill-gotten wealth ends up passing through London used to imply that the UK is laundering such wealth.
The fact is that London is one of the major financial centres in the world, it is physically safe (in comparison to much of the world), the law is reliable, and there is no bar to foreigners investing in, e.g. property.
In the UK, details of both companies and properties are publicly available. There are havens where this is not so, although that does not mean that tax authorities are unable to find out. However, it is too easy to circumvent these by the use of foreign companies, nominees, and trusts.
This may have been adequate in past times, but there has been phenomenal growth in dirty money. It is now necessary to declare ‘people with significant control’ over companies, and there is a similar proposal for properties, which should be made live without further delay.
We all know that there are far too many in the Lords, and although they can play a useful role, they have in the recent past shown that they can also cause considerable trouble for the elected government, when they are predominantly opposition, or opposition masquerading as cross-bench, after years of being appointed or proposed by Labour and Liberal Democrats. I’m disappointed Johnson has carried on putting political friends in there, but can’t blame him. If I was unable to abolish it, I would have considered ennobling two or three hundred, just to redress the balance, which also might have had the beneficial side-effect of concentrating minds on rationalising the place and saving money.

David McDowell
David McDowell
2 years ago

Birrell has done excellent work exposing the cover-up of Coronavirus origins in a Chinese lab but this is a rant.

Mel Shaw
Mel Shaw
2 years ago

I’m confused. Is the ÂŁ147,500 donated to the Tories the same ÂŁ147,500 his campaign group spent during the Scottish independence referendum? Or is it different? And, on a minor point, failing to win a seat in the list system of proportional representation doesn’t rank very high on the scale of political failure in my book, but no doubt the author thought it started off his piece nicely.

Ian Barton
Ian Barton
2 years ago
Reply to  Mel Shaw

A very good question

J P
J P
2 years ago

The BBC broke this, initially with a story on how the political elite all around to world are using offshore mechanisms to hide investments, often property deals. The BBC then chose to go down a narrow path of insinuation as to how the U.K. government is corrupted by foreign money, as well as how foreign money is ploughed into London property. This article takes the latter and simply rehashes it.
The issue that is worthy of journalism is that the political class globally is seen to capitalise on position to generate personal wealth, and does a good job (until now) of keeping it out of the limelight.
We need two things:

  1. A global effort to get offshore investment under control. Global is the only way to address this.
  2. Evidence of corruption. It is not enough to lazily infer corruption without evidence. At present all you have is a story about people making money in a way the everyday person cannot due to no access.

What the British media should not do, but cannot help itself in doing, is go after our government with unproven tales of corruption. All that does is to further undermine us as a country and add to the populism we already see. This is a global issue that requires a more sophisticated global discussion than is offered in this “me too” article.

Alyona Song
Alyona Song
2 years ago

Thank you Ian Birrell for yet another piece of honest and principled journalism. It is a fact that London provides safe heavens for an ongoing money laundry operation of global proportions. The Nazarbayevs, the Aliyevs, scores of Russian oligarchs of all hues own many of the toniest properties in the UK, their wheels greased by the government, regardless of whether Labor or Tories in charge. Their proclamations of democratic values ring hollow.

Matt B
Matt B
2 years ago
Reply to  Alyona Song

Well said.

Geoffrey Wilson
Geoffrey Wilson
2 years ago

I was really interested to start reading this article, hoping to find some investigative journalism uncovering actual serious criminals (for example if some politicians have received large undeclared sums from Soros, Zuckerberg or Gates). Instead, I found a silly rant about minor legal networking in Britain, supposedly proving we are as corrupt as Azerbaijan. What a pity. Anyone know where I can find actual journalism about these leaked documents?

Mel Shaw
Mel Shaw
2 years ago

I agree with you that it is a silly rant. I also wonder what Malcolm Offord has done to the author to be chosen as his target. The author seems to think he has been appointed to a sinecure as Parliamentary Under Secretary at the Scottish Office. Perhaps he doesn’t realise that governments need ministers to represent departments in the Lords. These are often appointed as working peers because they have useful experience, or political connections, as seems to be the case here.

Mel Shaw
Mel Shaw
2 years ago
Reply to  Mel Shaw

And, as a working minister, he will be on the government payroll, rather than receive the daily attendance rate.

Francis MacGabhann
Francis MacGabhann
2 years ago

It’s hard to see what can be done with the House of Lords. If you reform it as a second chamber with elected representatives, like the US Senate, then it has a democratic mandate which will give it a legitimacy on a par with the Commons. That’s fine for the voters, but who cares about them? As far as MPs are concerned, they’re never going to allow a legitimate second chamber to become established. On the other hand, if you leave it as it is, the corruption and rewards-for-cronies scandal drags on. If you just abolish it altogether, the clean-up function on legislation which the Lords does do quite well will be lost.

Giles Chance
Giles Chance
2 years ago

Unfortunately, corruption has always been a factor in British politics. Sometimes it has retreated, only to resurface during boom times, such as now. The article is correct in saying that it is easy to buy an honour or a seat in the Lords. The price for a knighthood is about 250,000 and for a peerage is 500,000 upwards, depending on the timing and how short the Party is of funds at that moment. There are tens, hundreds of examples. Everyone knows about them, and everyone regard the practice as business as usual.
So it’s not so much a question of revealing corruption in Britain, but of persuading British people not to pretend that Britain is a model of good governance and uncorrupt practices, when it isn’t and has never been.

Ferrusian Gambit
Ferrusian Gambit
2 years ago
Reply to  Giles Chance

Correction: “Unfortunately, corruption has always been a factor in politics.”
C.f. Cicero vs the governor of Sicily Gaius Verres.

Matt B
Matt B
2 years ago
Reply to  Giles Chance

Exactly. If you benchmark off those worse than you, you end up with a crooked house. Being watchful is the job of a good govt. It’s not a debate to close down, as many here would.

Last edited 2 years ago by Matt B
Tony Buck
Tony Buck
2 years ago

There are quite a few people in this discussion playing down corruption – as
if it didn’t matter !

It matters because the people who commit it – or turn a blind eye to it – are powerful, influential, outwardly respectable people, who set the trend.

As the article says, a fish rots from the head – and Britain sure is rotten !

And cynical; which is tragic, since cynicism is the mark of the defeated , the morally burnt-out.

Some are saying: “everyone’s a crook, given the chance.” Which is fine – IF you want our civilization to collapse. Which will be uncomfortable.

Ferrusian Gambit
Ferrusian Gambit
2 years ago

The question I keep asking people is: if you had that sort if money would you do the same? The sheepish response is usually, that yes, they probably would. It’s perfectly rational for people to want to find ways to protect their earnings from the depredations of the taxman.

Now whether they should be allowed to do so so easily and with impunity is a separate question. And yet I don’t see Panama, Monaco, Andorra, Isle of Man, Jersey, BVI, Cayman Islands etc. going anywhere soon. In any case in the British territories the trust structures used for this are such an integral part if common law it seems hard to imagine then changed dramatically.

Last edited 2 years ago by Ferrusian Gambit
Jon Redman
Jon Redman
2 years ago

There is a thing in Liechtenstein called an Anstalt (roughly, a foundation). These pay a fixed tax of about 20,000 euros a year regardless of income or profit. The directors can be nominees, so Mr Khan or Mr Schmidt. The beneficial owner can be M. Brun.
And that’s it, from the point of view of public filings. Anyone who wants to ask questions, such as “who is your ultimate beneficial owner”, would have to write to the company’s auditors, who might reply. If they do they would just say “M Brun”. If you ask for details of the nominees, they’d say “Mr Khan and Mr Schmidt”. Those are all the details you’re entitled to. That is full legal disclosure.
Cyprus is good too. In Cyprus a company has to have two directors, only one of whom has to be a person. The other can be a company, which has to have two directors, only one of whom has to be a person…and so on. There are thousands and thousands of Cypriot companies with a junior law firm employee as a director and an anonymous Cypriot firm as the other, and when that latter firm gets wound up, that’s fine. No problem.
Don’t get me started on Malta.
What have all these places in common? Why, they’re all either in the EU or the single market, that’s what!
Frankly, anyone who thinks Britain has a problem here must be some sort of crazed Remoaner federast.

Claire D
Claire D
2 years ago
Reply to  Jon Redman

“crazed Remoaner federast”
that’s very good.

Ferrusian Gambit
Ferrusian Gambit
2 years ago
Reply to  Jon Redman

Britain clearly doesn’t. Some of the overseas territories do, but that is because they are largely sovereign in these matters. The common thread are small countries that for lack of internal industry or tax raising capacity rely on influxes of capital (and the interest that accrues) to make them viable independent or semi-independent nations. Again, I am not sure why it is worth the time blaming these places such as you have mentioned. They are just doing what is in their national self-interest, as much as those using it are doing so in their personal interest.

rodney foy
rodney foy
2 years ago
Last edited 2 years ago by rodney foy
Dustin Needle
Dustin Needle
2 years ago

Don’t have answers either to this. Expecting Labour to stand up for the working man, or Conservatives to “conserve”, is a lost cause.
The brand titles remain the same but it’s a bit like turning up at a Fleetwood Mac gig expecting to hear “Shake Your Money Maker” and Jeremy Spencer’s Elvis routine.
Continuing the analogy, I was amused that even Satan got dragged into all this, the week after Keir Starmer announced he was going to get the New Labour band back on the road to play us their hits again, to general acclaim. Good job the BBC didn’t schedule the Panama Papers a week earlier, eh?
Tories, well what do you expect; the current lot stand for nothing.
I get the general idea of where Ian would like to get to, but how on earth do you get there from here? If any outsider did enter politics with the aim of root and branch reform/return to principles, the Media pack would hunt the “fox” down as a mere Tribute Band to “proper” political parties.
Because for “the Few” the system is perfect – everybody’s getting rich.

Last edited 2 years ago by Dustin Needle
vecchidf
vecchidf
2 years ago

this is a lousy article chasing silly headlines. for a start none of the jurisdiction you mentioned are on a black list as they fully cooperate. secondly, if a country is able to live without charging taxes so what? good on them. or are you praising the OECD gurus who earn tax free salaries and then they recommend tax hells? third, the jurisdictions you mentioned abide to common reporting standards so ample transparency. fourth, it is difficult to evade or elude taxes in a jurisdiction that doesn’t tax you so this is a crime committed on shore!!!!! same is for money laundry!!! these are on shore crimes so you are pointing to the wrong guys. fifth money laundering schemes involve many countries and two years ago several Nordic banks were caught washing out more than 200bn dollars of Russian money. Bottom line: i am not claiming that Britain is a perfectly clean place but the situation is more complex and please tell us how many people were eventually convicted for tax evasion following the paradise and panama papers?

Brendan O'Leary
Brendan O'Leary
2 years ago

Only last month it emerged that George Osborne won business from a firm run by Oleg Deripaska

Yet if you follow the link, it quite clearly says the firm has not been run by Deripaska since before Osborne got involved.

Zorro Tomorrow
Zorro Tomorrow
2 years ago

I’ve got loads of money. I don’t want Keir Starmer, Lucas, Davie, Sturgeon, who don’t like me, in any position near the reins of political power. I also have a family pile with a working farm which employs 40 British people full time. ReformUK are in the polling doldrums. Hmmm…how best to spend my money?

saxby46
saxby46
2 years ago
Reply to  Zorro Tomorrow

The point is that we’re allowing corrupt people to shape our country.

Zorro Tomorrow
Zorro Tomorrow
2 years ago
Reply to  saxby46

Go back and have a look at the pious Cromwell and his efforts to clean up Parliament. They dug him up for the way he went about it and executed him for high treason after his death. The so called corruption now is nowhere near as bad as the puritanical modern version of wokeism infecting our society by the left who as we speak are shaping our country.

Jonathan Ellman
Jonathan Ellman
2 years ago

Brexit done. Now HoL.

Ian Barton
Ian Barton
2 years ago

It’s hard to see any party in power choosing to reform the HoL – and conceding a lever of power – unless the electorate show significant support for doing so.
Equally hard to see how that kind of enthusiasm can be generated 


Last edited 2 years ago by Ian Barton
D Ward
D Ward
2 years ago
Reply to  Ian Barton

Taking it back to how it was before Bliar wrecked it would be a start. It’s now a house of patronage and corruption. A national disgrace.

rodney foy
rodney foy
2 years ago
Reply to  Ian Barton

Time to take to the streets? Oh, I forgot, Priti Patel would lock us up for being a nuisance

Leon Wivlow
Leon Wivlow
2 years ago
Reply to  rodney foy

Like she locked up the protesters stopping the traffic on the M25? All fur coat and no knickxrs as my nan would say!

rodney foy
rodney foy
2 years ago
Reply to  rodney foy

… although blocking motorways for HoL reform probably wouldn’t get much support from the public

Leon Wivlow
Leon Wivlow
2 years ago
Reply to  rodney foy

Blocking motorways is not getting much support from the public for insulating Britain either. Pity Priti doesn’t have the gumption to remove them from the roads like the general public yesterday.

rodney foy
rodney foy
2 years ago
Reply to  Leon Wivlow

Peaceful protest is necessary in a democracy. The Suffragettes got themselves locked up, and they were protesting about a democratic issue. Would women have got the vote without them breaking the law?

The HoL isn’t democratic because it’s unelected. If we get to the point were any protest is breaking the law, then it stifles democratic change.

Maybe Priti has gone too far IF creating a nuisance is now unlawful. However, blocking motorways may also be going too far

mike otter
mike otter
2 years ago
Reply to  rodney foy

Not in uk but they did in Netherlands, Finland and USSR …

andrew harman
andrew harman
2 years ago

Unherd is very good at showing how our democratic “choice” is in fact no choice at all. Labour and the Tories are both undesirable albeit for different reasons. Corrupt and dishonest in their different ways.
Yet venality, corruption and cronyism have always been present in all polities, from ancient Greece to now. None is perfect.
The H of L could do with slimming down at the least or scrapping altogether.

Last edited 2 years ago by andrew harman
Pamela Booker
Pamela Booker
2 years ago

The Monarch should be the one who, ultimately, decides who gets an honour – as it used to be. Time for the monarch to have the same powers as a president if we are not to fall into the uncertainty of elected heads of state.

George Wells
George Wells
2 years ago

ÂŁ323 a day tax free for life for ÂŁ147,500 is a superb rate of return. There are lots of interesting things to do with the rest of the day in central London, after signing on at the House of Loads, sorry ‘Lords’. Please can we have an article explaining how our readers can jump on this gravy train. Toot toot!

Last edited 2 years ago by George Wells
robert stowells
robert stowells
2 years ago

As one who voted for Brexit, post Brexit I see UK probably being more of a niche manoeuvrable outpost type economy, or even to some degree that very haven type economy rather than, as many anti-Brexiteers represent of us Brexiteers, a UK that is forlornly attempting to recapture some perceived previous national glory. I am just so glad that we got Brexit done before we truly sleepwalked into total dependency on the EU and became another total basket case and for that we have one man, Boris Johnson, to thank. Whatever happens we are standing on our two feet and that is reason for leaving in itself.
I think that we are a nation, or even world, that appears to be sleep walking so while I do have some definite sympathy with reforming the House Of Lords (particularly to avoid the likes of Tony Blair getting in there) I think at present that we need to keep all of our national faculties of awareness and will (such as we have) focused on the bizarre goings on in the world and try to keep some sense of sanity.
Like one other comment I see the trust structures of the UK inevitably ones which the well-off will utilise to protect their wealth and see many of the other aspects described like tax minimisation and buying houses by larger overseas bodies sometimes even possibly shady overseas bodies as just an extension of that. It is just a feature of Capitalism which is the best of the worst systems for humanity’s present largely self-focused state. Things may, and I believe will, change or improve but ideological ideas of what those changes or states should be should not be imposed on humanity or the UK (otherwise we get USSR and the EU or even worse).

Alan Thorpe
Alan Thorpe
2 years ago

Westminster covering for crooks? They are the crooks.

Jeffrey Chongsathien
Jeffrey Chongsathien
2 years ago

The dumb sheeple keep voting/non-voting for the same corrupt scum, so this is all just whistling in the wind. Just give them their chips, football and housing Ponzi scheme.

Andrew Wise
Andrew Wise
2 years ago

Yawn…. heard it all before, nothing new here

Richard Lord
Richard Lord
2 years ago

Surely this article could have been written about any country. It’s a sad but true fact that power breeds corruption. Where you have one you’ll have the other.

Adrian Maxwell
Adrian Maxwell
2 years ago

Despite the lurid phrasing ‘…..knotweed in the undergrowth of Whitehall’ and ‘hideously stained with corruption’ there are interesting points that need a second thought. To complain that the author does not provide an answer is usually a comment by those with little else to say. The UK comes in at a respectable 11th (out of 189) on the corruption Perception Index, equal with Canada, Australia and Honk Kong (the traditions and values of an old skool civil service?). Interestingly, Switzerland comes in at 3. The difference between Switzerland and the UK is that no one complains about the hard work of the Gnomes whereas here we had a prime minister who stated he would sort out the offshore nonsense and promptly did nothing. The UK has a rich tradition of shooting itself in the foot where loot is concerned – Prime Ministers elevating urchins everyone knew would be a disaster, paddling the Janus canoe up and down the arms river and trying to emulate the SEC with a feeble SFO, notice of which no one takes. There is a strong perception that individuals from the east of the Urals are encouraged to buy only the green and dark blue sites and never the stations or utilities (but who knows?). Real estate and the UK’s scandalous libel laws provide safe harbours for money most people would rather do without. Without an effective opposition and despite Gove being in charge of housing, this government finds it hard to avoid the sticky problems of which the author complains.

hugh bennett
hugh bennett
2 years ago

The sad thing is that a proportion of the dues of corruption are paid by those that play with a straight bat but sadder still is the chunk paid by the very poorest in society.
But are not the majority of us guilty of indifference?
I take solice in the thought that, scum just like cream settles at the top.
Finally here`s something to make you laugh (or cry) –
“ Corruption is a cancer, a cancer that eats away at a citizen’s faith in democracy, diminishes the instinct for innovation and creativity.” — Joe Biden.

Adam Bacon
Adam Bacon
2 years ago

Not an easy reading article, though presumably fairly accurate. Presumably this is how we keep the London centric post colonial economy running.

It’s obviously easy to be outraged by how much the grubby oligarchs/politicians are siphoning off, but presumably this is also probably a genuine case of ‘trickle down ‘, for all us in this country, at the expense of those in the territories of the oligarchs?

Tom Watson
Tom Watson
2 years ago

ÂŁ147,500 (let’s call it ÂŁ150k) for a peerage entitling you to ÂŁ323 per diem?
ÂŁ323 per day = ÂŁ1615 per week (assuming a 5-day week) = ÂŁ72675 per year (assuming 45 weeks’ attendance). Bloody hell, that’s a 48% rate of return, annualised for life, tax-free and all you have to do is clock in once a day.
Brb off to donate some money to the Tories…

Oliver McCarthy
Oliver McCarthy
2 years ago

It’s an odd definition of “corruption” that covers something that happens completely legally and in plain sight.

William McKinney
William McKinney
2 years ago

And an equally odd definition that would require something to be illegal and covert to be considered corrupt.

saxby46
saxby46
2 years ago

We allow corrupt people to operate legally in our country. That’s not good.

mike otter
mike otter
2 years ago

Surely some mistake? Messrs Ingrams, Cooke, Russell and Foote revealed all this and more 50 yrs ago. For some reason they were ignored or ridiculed. Pick up the pace guys. what needs to be added is this: if the kleptocrats‘ and narcos’ money didn’t come here it would go elsewhere, As far as the “deserving” go heres my duro’s worth: artists, (none) carers (nearly all) d octors +other drug vendors (few) factory workers + retailers,(nearly all) teacher + scientists (almost none) and soldiers ( nearly all) … hacks n cops n politicos ( none)

mike otter
mike otter
2 years ago
Reply to  mike otter

theres also a nasty mysogenia and racism to the fonseca / snowden pandora bs…. you know my hips don’t lie but my accountant probably does