How we are witnessing state capture under the shadow of the pandemic
By Nick Ferris
It’s a label normally applied to the roguest of rogue states. A two-word phrase denoting the inconceivably corrupt, which we in the West can only presume would refer to a political stratosphere totally alien to our own.
“State capture” was defined by the World Bank in the early 2000s to describe how economies in former Soviet states were being drained of all that was valuable by a select few oligarchs. The term gained prominence a couple of years ago in South Africa, when a prominent Indian business family, the Guptas, was revealed to have gained such control over the Zuma administration that everyone from the state broadcaster to South African Airways was being collectively drained of tens of billions of dollars.
Such brazen manipulation of the sacred ordinances of government is shocking, and – surely – not something that could ever happen in the United Kingdom. Not here, home of the Mother of all Parliaments, the birthplace of modern industrial capitalism, and the freedom-loving nation that beat the forces of autocratic evil not once but twice in the twentieth century. Nothing so rotten could ever penetrate to the heart of our own systems of government. Could it?
Well, within the first year of Boris Johnson’s premiership, events that seemed only the stuff of disaster movies have actually come to pass, and much that once seemed unshakeable has shifted. The world is in the grips of the largest pandemic for one hundred years, with no obvious end in sight. But more insidious than this outright horror has been the way that those in power have seemingly used the cover of the pandemic to manipulate long-established protocols of state towards their own self-interests, or those of their associates.
Transparency International, the anti-corruption watchdog, defines state capture as “a situation where powerful individuals, institutions, companies or groups within or outside a country use corruption to shape a nation’s policies, legal environment and economy to benefit their own private interests”.
State capture is the manipulation of rules, regulation, personnel and law to work in one’s private interests, and not in the interests of the body that has been entrusted to run things on behalf of everyone – the state. And this is, undeniably, what is happening in the UK.
It is not simply the siphoning off of government funds to improve one’s own bank balance. State capture is the manipulation of rules, regulation, personnel and law to work in one’s private interests, and not in the interests of the body that has been entrusted to run things on behalf of everyone – the state. And this is, undeniably, what is happening in the UK.
For decades, government policy has favoured the interests of big business, but this was always with some rationale behind it – for example that the private sector was less bureaucratic, or that trickle-down economics would aid those who might not immediately seem to benefit from support for private enterprise. But none of these arguments stand when money is clearly being thrown so haphazardly at systems that are clearly inefficient and ineffective.
What is more, it is impossible to trust that there is a real belief in this ideology when funds are brazenly handed over to companies and individuals that have close ties to those in government.
Since the Coronavirus pandemic struck, the government has taken advantage of a freeze in standard procurement laws to avoid opening up public contracts to competition. In July, the shadow minister for the Cabinet Office, Helen Hayes, asked ministers to explain how deals of “more than £830m have been awarded to at least 12 different companies” for PPE that had never materialised.
Contracts worth tens or even hundreds of millions of pounds, were offered to companies without going to tender
Those companies include Ayanda Capital Limited, which was awarded a £252m PPE contract, despite having only five employees, £510,000 share capital and £44,509 of tangible assets listed on Companies House. The business is controlled by a company registered in a tax heaven, Mauritius, while the contract was brokered by Andrew Mills, an adviser to Ayanda and Liz Truss, the Secretary of State for International Trade.
This, and other contracts worth tens or even hundreds of millions of pounds, were offered to companies without going to tender. Much of the work uncovering these contracts has come from investigative news outlet OpenDemocracy, who earlier in October revealed that another small, lossmaking firm, P14 Medical, was awarded a £156m contract to import PPE from China without any competition.
It has no obvious track record of bringing PPE into the country, and – perhaps tellingly – it is run by a Conservative councillor in Stroud. And that story broke in the same week that it emerged that a company run by a Tory peer, Baroness Mone, had won a £122m contract to supply PPE to the NHS just seven weeks after it been set up. The overall situation reveals at best a lazy determinism to outsource government supply systems at all costs and at worst a genuine effort to award the juiciest government contracts to the friends of those in power.
But it is not just the awarding of contracts that has the trappings of state capture. The phenomenon has also manifested in how, in recent months, the Government has shown an eagerness to fill theoretically apolitical positions with political appointees.
Back in August, Dido Harding – a Conservative peer who had presided over England’s much ridiculed test and trace system – was chosen to run the new institute to replace Public Health England, after the controversial decision to axe the agency. Harding has been a member of the House of Lords since she was given a peerage in 2014 by her friend David Cameron.
Doubts have understandably arisen over the roll being offered to someone who has such clear political ties to the government. Dr Chaand Nagpaul, leader of the British Medical Association, warned ministers that: “The BMA strongly believes that the nation’s public health medicine service should be truly public, [and] independent of political influence.”
Then in September it was reported by The Sunday Times that Charles Moore and Paul Dacre – two socially conservative arch-critics of the UK’s state broadcaster – were respectively the government’s first choice for openings to chair the BBC and run Ofcom, the media regulator. Both had spent their careers railing against the BBC. Dacre is the former editor-in-chief of The Daily Mail, while Moore is a former Spectator and Telegraph editor, who employed Boris Johnson as a columnist and was recently given a peerage by him. He was once prosecuted, in 2010, for refusing to pay the licence fee.
And the Gonvernment has not simply been content with filling roles that already existed with its allies. It has also been creating new ones: a new daily briefings press secretary, modelled on the White House press secretary, is set to begin giving press briefings imminently. Unlike the USA, the UK constitution holds parliament sovereign. What a press secretary does is allow the executive to tighten its control on the agenda by bypassing parliament and allowing the government to get its message out directly, without opposition. There are, then, subtle manoeuvrings everywhere to shape the state into a body that is much more immediately answerable to the political classes and their allies. There is an unabashed disregard for the functioning of government and opposition forces, with an intent instead to fulfil the government’s mission at any cost. But what is the objective with all of this? The answer to that question lies, of course, with one man: Dominic Cummings, who few now doubt has taken complete control over the Government’s agenda.
In a 2014 blog post, Cummings explained what he believed about the UK Government: “Whitehall is a bureaucratic system that has gone wrong, so that duff people are promoted to the most senior roles and the thousands of able people who could do so much better cannot because of how they are managed and incentivised, hence lots of the best younger people leave”.
Whitehall is a bureaucratic system that has gone wrong, so that duff people are promoted to the most senior roles
Cummings describes telling this to “many” officials around Westminster, with one official rather portentously saying to him: “You’re a mutant virus, I’m the immune system and it’s my job to expel you from the organism.”
The Dominic Cummings version of state capture is to take control of state mechanisms not with the intention of establishing a fluid link between his finances and those of the government – but instead to establish that link between his ideas and those of the government. Cummings is at heart a free-marketeer who seems to have a real hatred for government. This attitude is coupled with a zealous belief that he should be able to do whatever it takes to bend the state to his will.
And these two things translate into an unashamed manipulation of the furniture of state, and a willingness to dismiss systems built up over generations – such as tendering processes – which were originally designed to ensure both the best result was reached and there was not undue influence on reaching that result. Because for Cummings, what is fair is simply what he wants to happen – and we may only be starting to witness the impacts of this. Ideally a few more words here to fill up the rest of the empty space, perhaps even another sentence or two.