A ‘cross-party’ group of MPs and peers created by a former Tory Ministry of Defence adviser has ceased its activities while it is being investigated for taking cash from an Israeli state-owned weapons company, a joint investigation by Democracy for Sale (DFS) and the Bureau of Investigative Journalism (BIJ) has revealed.
The ‘All-party Parliamentary Group (APPG) for ‘defence technology’ was set up in November last year by former Grant Shapps adviser James Clark, but has been under investigation by parliamentary standards since Declassified UK exposed its funding from a subsidiary of Israeli arms-maker Rafael, RUK Advanced Systems Limited.
Parliamentary rules ban APPGs from using a ‘secretariat’ funded directly or indirectly by any foreign government, but Rafael was founded as Israel’s ‘National R&D Defense Laboratory’, developing weapons and military technology within the Israeli Ministry of Defense, until it was turned into a limited company in 2002.
The APPG offered firms “opportunities to network with MPs and policymakers” including ministers of the Starmer government – and put dozens of questions in Parliament advocating for the arms industry – but has now been dissolved. Its former co-chairs, Labour MP Fred Thomas and Tory Neil Shastri-Hurst, declined to comment when approached by DFS and BIJ.
Clark, described by the investigators as “a serial failed Conservative parliamentary candidate”, was able to set up the group just six months after leaving the MoD despite rules supposedly restricting ex-advisers from parliamentary lobbying for at least a year, by exploiting a truck-sized loophole classifying his role as being, according to the Ministry of Defence, “within central government”. APPGs are not official bodies, but in effect often industry lobby forums within Parliament – with Clark’s group allowing arms industry players to be deeply involved since its creation.
Money from arms manufacturers was funnelled straight to a company set up by Clark to run the APPG, with more than £60,000 donated just two weeks after Clark set it up on 4 November last year by arms firms including Lockheed Martin and Leonardo – both firms supply arms to Israel despite its genocide of the Palestinians in Gaza, as well as the cash from RUK.
As DSF notes:
There is no central government guidance specifying whether APPGs should be considered inside or outside central government for business appointment rule purposes.
“This case exposes a glaring inconsistency in the government’s revolving door rules and creates a convenient loophole that undermines cooling-off periods,” said Steve Goodrich of Transparency International.
“When an APPG is funded by major defence contractors and explicitly aims to ‘promote engagement’ with the industry, it’s functionally operating as a lobbying vehicle – regardless of its classification. Labour promised to strengthen lobbying oversight, but cases like this show we need immediate action to close regulatory loopholes before they become established practice.”
According to his Linkedin profile, under Tory then-Defence Secretary Grant Shapps, Clark gave ministers “expert advice on defence policy and strategy” and “delivered the Defence Industrial Strategy”.
The APPG charged corporate sponsors for membership levels, with Tier 1 costing £1,499 and a higher Tier 2 costing £5,000, for varying degrees of access to elected officials and decision-makers – and they got access a-plenty, according to the investigators’ revelations:
MPs in the group have frequently advocated for the interests of defence tech companies, meeting ministers and asking numerous parliamentary questions on everything from defence spending and space policy to procurement and autonomous weapons.
The defence tech group’s first parliamentary reception, held in March, was addressed by veterans minister Alistair Carns and attended by various MPs and peers, according to a post from the APPG’s LinkedIn account, which is also now offline.
The group’s agenda has dovetailed with government priorities. Britain’s defence review in June stressed the growing importance of autonomy and AI, and ministers have pledged record increases in defence spending.
Peter Munro of the UK Anti-Corruption Coalition said:
Without substantial reforms, the revolving door between public sector and private interests will keep spinning freely. If the government is serious about closing loopholes, it should empower its new ethics and integrity commission to regulate lobbying across parliament – and hold those who abuse the system accountable.
Meanwhile, another cabinet reshuffle – another set of undeserved, unearned, grotesque pension pots for the taxpayer to fund.
Ministerial pensions desperately need reforming.
My idea? Not one cabinet minister should get a pension for the position unless and until they serve a minimum of three years uninterrupted in said position.
And even then they should only receive a percentage for the first three years…say 20% of full pension per year, so: 2 years served = 40% of full ministerial pension as it is today.
After a full three years they qualify for the full whack.
When you think of how much these talentless leeches like john reid, alan johnson and grant shafts are raking in for tje rest of their days…its beyond obscene.
But apparently it’s the sick & unemployed who are the leeches…but I’ll bet there’s very few sick and unemployed could do worse than those I’ve mentioned.
APPG’s such as this are not only open to such direct influence of outside powers. Indirect influence via Corporate bodies, lobby firms set up for that purpose, legal firms and similar are also problematic.
Take, for example, the APPG on unconventional oil and gas – i.e. Fracking – (vice-chair Angela ‘Tinge’ Smith) which was set up in February 2013 and ceased in 2017:
Its Group Secretariat was the consultancy firm Hill and Knowlton Strategies – which took over from the former Group Secretariat, Edelman, sometime after May 2014.
In the time it was operating, it received the following sums:*
2014: £140,260
2015: £131,426
2016: £57,123
2017: £10,000
Total: £338,809
It’s contributors by sector were:
Oil & Gas – Including construction & service suppliers = £217,730
Consultancies = £40,748
Legal Firms = £26,832
Manufacturing = £17,548
Insurance = £12,291
Energy Asset Development & Management = £11,250
Real Estate = £2,500
Other = £7,500
This represented an average investment of approximately £85,000 per annum, with the year of the largest sum of over £140 thousand being 2014 – the year prior to significant tax breaks and subsidies being announced by the Chancellor.
The return for those contributions was phenomenal:
Along with other lobbying groups in the wider oil and gas energy extraction industry, fracking obtained:
2015 Budget:
– A decrease in the Petroleum Revenue Tax (PRT) from 50% to 35%
– A decrease in the Supplementary Charge (SC) from 30% to 20%.
– An Investment Allowance (replacing the existing system of Field Allowances for investment in fossil fuel production), which exempts a portion of oil and gas companies’ profits from the SC.
– Reducing the tax rate on that portion from 50% to 30%
– Allocation of direct funding worth $32 million for seismic surveys in under-explored areas for 2015/2016.
These are public assets under the ground of the country which, unlike Norway which uses its resource extraction system of its public assets to create a Sovereign Wealth Fund, successive UK Government’s not only reduced taxes on these operations but also gives away billions of pounds in direct and indirect subsidies, virtually rent free.
To put this into context, the changes to just these measures meant:
• An average of $538 million in foregone revenue a year.
• Which is equivalent to two thirds of the value of the total government revenue from all oil and gas production from 2016 onwards (Office for Budget Responsibility, 2015).
In the longer term, Government revenues from oil and gas production were forecast:
• To fall below 0.05% of GDP .
• And close to zero from 2025 onwards.
This is a significant drop. Government revenues from oil and gas stood as high as $16 billion in 2011/12, but dropped steadily to $7 billion in 2013/14 and to $4 billion in 2014/15 (HM Revenue & Customs, 2015b)
An ODI Report in November 2015…..
https://www.odi.org/publications/10058-empty-promises-g20-subsidies-oil-gas-and-coal-production
…..highlighted the following subsidies to the oil and gas extractive industries – including fracking, at the time:
• The ODI (Overseas Development Institute) submitted a report in November 2015 which revealed that G20 nations provide $452bn (£297bn) a year in subsidies for fossil fuel production.
• In the UK, production subsidies of £5.9bn have already benefited major fossil fuel companies operating in the country, most foreign-owned.
• £3.7bn is used to subsidise fossil fuel production overseas in countries including Russia, Saudi Arabia and China.
• New tax breaks for North Sea oil and gas production announced by the chancellor, George Osborne, earlier in 2015 will cost taxpayers a further £1.7bn by 2020.
• Earlier UK tax breaks for North Sea exploration from 2009-14 were worth:
◦ £551m to the French company Total. -Which gave £9,971 in benefits to the APPG on Unconventional Oil and Gas in 2014-17
◦ £131m to the US-based Apache.
◦ £267m to Norway’s state-owned Statoil. – Which gave £3,000 in benefits to the APPG on Unconventional Oil and Gas in 2014
The report analysed three types of production subsidy, all recognised by the World Trade Organisation, given to fossil fuels by G20 nations. It found:
• $78bn a year in “national subsidies” (direct spending and tax breaks).
• $88bn of support via public finance.
• $286bn in support via state-owned companies.
Far from being the champions of entrepreneurs involved in creating and developing the new industries of the future, the Government and those in other Westminster political parties who are involved in these types of All Party Parliamentary Groups were advancing narrow rentier interests.
Giving those interests access to the resources of the country for a tax return which will reduce to near zero, whilst advancing large sums of taxpayer funds in subsidies and tax breaks from a dwindling public pot.
And clearly, this scam continues today, a decade later.
* All data quoted from research I conducted in October 2017 for the local CLP.
Skwawk IS taking his time announcing Rayner’s resignation…
What’s the betting that Wes Streeting’s “people” had a hand in exposing the original Telegraph tax evasion article? Question number 1: who benefits from her downfall? Very convenient for the Blairites’ anointed candidate for future leader, donchathink?
Good riddance to bad rubbish!
Oh & FT today (5/9) on the recent China/Russia meeting.
New Russian pipeline use to China with liquid petroleum gas to have a massive impact on the West & the market in this.
Western Right Wing Neo-Liberal capitalist big stick approach scoring own goals.
Need more civilised Western Leaders who build peace & co-operation between ALL countries to benefit all of our diverse humanity. ☮️