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Anas Sarwar MP’s speech to the OECD conference on Political Financing and Averting Policy Capture

10 December 2014

by Anas Sarwar MP, Shadow International Development Minister, to the OECD Political Financing and Averting Policy Capture Conference

As a parliamentarian in the United Kingdom, working in the “Mother of Democracies” is both an honour and a huge responsibility. Being the gold standard for Parliamentary systems means that we must have the highest standards of governance and best practice, not just at home, but in our interactions around the globe.

As we continually move towards a more integrated and globalised world, the political actions we take and the examples we set, must earn the trust and respect of UK citizens and also do no harm to our global neighbours.

More than that, we should be leaders in ensuring that our style of governance promotes prosperity and wellbeing right around the world. Whilst the UK may enjoy the historic title of good governance, there are still many ways in which we need to improve.

In Transparency International’s Global Corruption Barometer 2013, 90% of respondents believed that the UK Government is run by a few big entities acting in their own interest.

This shows that the social contract in Britain is broken. The erosion of trust in authorities is creating disconnect between the parliamentarians and the people that they seek to represent. People are angry with the establishment and the cosy interactions of the power brokers.

They’re angry with banks following the global financial crisis and soaring bankers’ bonuses

they’re angry with the Big Five energy companies who have increased prices to record highs whilst ordinary people

have to choose between heating their homes and eating

they’re angry with the media who have invaded people’s privacy

They’re angry with politicians who they feel do not represent them

The same study showed that in the UK, people’s appraisal of their leaders’ efforts to stop corruption is worse than before the financial crisis began. In 2008, only 31% people said the government’s efforts to fight corruption were effective, with that number falling even further to 22% of respondents.

The MPs expenses scandal which was uncovered in 2010 would likely be a significant impact on this. It was found that a minority of MPs were making excessive and ineligible expense claims which was then reported continuously and in great detail in the media. The result was the resignation of six ministers, more than a dozen MPs named chose not to stand for re-election, four MPs and two peers faced criminal charges of false accounting.

The UK public felt massively betrayed by this abuse of power and the whole issue has left a legacy of mistrust. Democratic systems can only be effective if they have input of both the government and the citizens they represent.

This relationship breaks down when people believe that corporate money can be used to buy influence and political

This disenchantment with political systems is becoming more and more apparent. We’ve seen the rise of anti-establishment, civil protest movements like Occupy Wall Street, Anonymous, Wikileaks and most significantly the Arab Spring. From hyper local to global, each of these movements successfully mobilised grassroots activists and overturned oligarchies, with varying degrees of success.

People are demanding a change in political practice. They want the representatives that they elect to govern in the interests of the masses, and they want to know exactly how politicians can achieve this.

The UK has recognised and made changes on some of the big issues of transparency and accountability.

Following the MPs’ expenses scandal, the Independent Parliamentary Standards Authority was created which now oversees all of MPs’ spending.

The Serious Fraud Office was created in 1988 and is now responsible for reducing fraud and corruption, delivering justice and maintaining confidence in the UK’s business and financial institutions.

The Bribery Act 2010 is now among the strictest legislation internationally on bribery. The legislation creates four prime offences: the receipt or provision of bribery, the receipt or provision of advantage, bribery of a foreign official and failure by a company to prevent these.

Lobbying is one of the most harmful threats to British democracy. A worrying 67% of UK respondents consider political parties to be corrupt or extremely corrupt. In light of this, the Lobbying Bill sets out to cap donations to political parties, end the revolving door of employment between big business and senior government officials, reform the honours system and renew emphasis on ethical conduct for parliamentarians.

However, despite these, public opinion of politics has not improved. The current UK government has been reluctant and duplicitous in its willingness to combat corruption, most recently displayed with the consideration of abolishing the Serious Fraud Office.

BOND, a coalition of around 600 NGOs recently wrote to the government to express their “serious concern about the recurring suggestions from [the] government that the Serious Fraud Office might be abolished, while failing to propose an adequate replacement.”

This paired with the government’s sacking of the Anticorruption Champion and the continual delay in publishing the Anticorruption National Action Plan since October 2013, does not present the best scorecard for the current UK government.

Despite the UK having one of the strictest anti-bribery legislation worldwide, not one charge has been enforced in nearly four years since the Bribery Act came into law.

The introduction of IPSA to handle MPs’ expenses has made little difference, with this year’s bill a similar cost to the year the scandal was uncovered. To add insult to injury, IPSA has suggested an 11% increase to MPs’ salary. This would take it to three times the average wage, whilst public sector workers above £21,000 suffer a pay freeze.

We can’t expect citizens to enthusiastically contribute to society and the common pot when they feel like they are not getting a fair deal.

Whilst austerity inhibits growth in the UK, on the international stage there are examples of extreme misappropriation of public funds, like in Nigeria. Subsidiaries of Italian oil company ENI and Royal Dutch Shell paid Nigerian government US $1.1billion for oil block OPL 245. Suspiciously, the same amount then paid to Malabu Oil and Gas, a company owned by former oil minister Chief Dan Etete, which has been investigated by several authorities including the UK Crown Prosecution Service.

Nigeria has enjoyed a 50 year oil boom but at the same time has lost $400billion in oil revenues, whilst 84% of the population live on less than $2 a day. This loss of revenue could provide education to 1.7million of the 5.5million girls out of school. It also equates to around two thirds of the health budget.

This outlines the importance and need for smarter and more efficient investments, especially of DFID sponsored aid.

In 1998 DFID under Labour invested £20million into creating a Rwandan Revenue Authority. In the first year it collected £60million and by 2006 it collected £240million a year. Consequently, poverty levels fell from 74% in 1994 to 56% in 2006. One of the most telling figures is that government expenditure received from aid is down from 85% in 2000 to 45% in 2010.

The Rwanda model is a great example of how political finance, if it is raised and directed by transparent and competent agencies, can truly serve its citizens.

The UK has enjoyed the rights of a global leader, but more importantly it must live up to the responsibilities of a global leader. Whilst our priorities must be to honestly and transparently represent our constituents in the UK, we must ensure that our domestic politics do not spill over to the detriment of our neighbours in today’s globalised village.

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