Socialist Worker

The Troublemaker—‘Unlawful’ to hand contract to firm run by Tories’ friends

Issue No. 2759

Michael Goves contracts “gave rise to apparent bias”

Michael Gove's contracts “gave rise to apparent bias”


Tory cabinet minister Michael Gove broke the law when the ­government handed a £560,000 Covid-19 contract to a business he had “personal connections” with.

The High Court ruled last week that the Cabinet Office’s contract with PR firm Public First was “unlawful”. It also “gave rise to apparent bias”.

The company was run by close allies of Gove and the prime minister’s former chief adviser, Dominic Cummings.

One of Public First’s directors, Rachel Wolf, used to be an adviser to Gove and co-wrote the Conservative Party’s ­election manifesto in 2019.

The firm’s other director is James Frayne, whose work alongside Cummings dates back 20 years and who was also hired by Gove when he was education secretary.

Emails revealed in court show that both Gove and Number 10 wanted Public First to be given the work. The firm was subsequently handed contracts without competitive tender.

The judge said, “The existence of personal connections between the Defendant (Gove), Mr Cummings and the directors of Public First was a relevant circumstance that might be perceived to compromise their impartiality and independence in the context of a public procurement.”

The private firms making a killing from Covid
The private firms making a killing from Covid
  Read More

Last year, the government defended the contract, saying it was awarded under emergency Covid-19 regulations.

But the Cabinet Office’s own public records show that some of the work was, in fact, about Brexit.

The court found that the ­government’s version of events “does not stand up to scrutiny”.

The judge added, “Failure to consider any other research agency… would lead a fair minded and informed observer to conclude that there was a real possibility, or a real danger, that the decision maker was biased.”

Public First went on to win more than £1 million of public contracts ­without tender under emergency Covid-19 provisions.

Cummings has described Frayne as a friend, saying he has talked to him “extensively about focus groups and public opinion over many years”.

The government is reported to have spent up to £600,000 on its failed legal defence—exceeding the value of the original contract for Public First.

The ruling follows a joint investigation by openDemocracy website and The Guardian newspaper.


Morrisons supermarket shareholders have voted overwhelmingly against the award of millions of pounds in bonuses to executives.

The vote was not binding. A spokesperson said the executive team would collect their awards in full.

The chief executive, David Potts, and his two most senior managers will receive £9 million in pay and bonuses. Potts will collect his full £1.7 million bonus, bringing his total pay packet to £4.2 million

Only 30 percent of votes at the company’s meeting were in favour of the payouts.


Big dividends follow grab of furlough cash

The major construction equipment rental firm, VP plc plans to shower its shareholders with millions of pounds. This is the same company that pocketed a fortune from the furlough scheme.

VP claimed £7 million from the jobs retention scheme that it used until October 2020.

At the peak, bosses furloughed up to 1,000 workers.

Construction News website says VP will pay out £10 million to shareholders.

It’s one in a long line of companies taking state aid and then handing wads of cash to shareholders.

In April JD Sports said it would pay out nearly £15 million in dividends.

Grabbed

But it has not offered to return any of the coronavirus-related help it grabbed.

That included about £38 million of rates relief. MPs have wailed for businesses to “act responsibly”.

But there is no legislation forcing profitable companies to repay the cash that was handed out.

Chief executive of VP, Neil Stothard says the furlough scheme “did what it was meant to do” and saved jobs.

However, VP sacked 160 workers and failed to refill 119 vacant positions during the year.

VP includes brands such as Brandon Hire Station and HS. It made the dividend announcement as it revealed a £2.3 million pre-tax loss for the year.

But this was only because it had to pay a big fine. In December last year the Competition and Markets Authority fined Groundforce, which is owned by VP, £11.2 million.

This was for “anti‑competitive practices” between 2011 and 2016.

With the fine and other one-off items excluded, VP reported a pre-tax profit of around £12.8 million.


A Tory MP has been fined after his puppy caused a stampede when it chased a 200-strong herd of deer in London’s Richmond Park.

Danny Kruger admitted losing control of his 11 month old Jack Russell, Pebble, during a walk with his family. He pled guilty to causing or permitting an animal to chase or worry another animal in a royal park.


Millions face retirement with not enough to live on

Five million older workers face a retirement crisis as they will fall short of an “adequate” income once they leave work, an industry report has warned.

More than 90 percent of private sector workers with “defined contribution” pensions will not be able to afford an “adequate” standard of living.

They will pay out less than workers expect.

Millions of over-50s could be pushed into poverty and financial insecurity, a situation that has been worsened by the pandemic.

The report, which was sponsored by the charity Centre for Ageing Better, warned a low state pension and increasing unemployment were key factors that would leave a quarter of those approaching retirement without enough.

A large number of over-55s were forced into leaving work early during the pandemic.

Redundancies have been higher for older workers throughout the Covid-19 crisis.


The 25 US richest pay just a pittance in tax

The richest 25 people in the US—including Jeff Bezos, Elon Musk and Warren Buffett—paid as little as 3.4 percent of their gains in wealth in tax between 2014 and 2018.

An investigation by US news organisation ProPublica into the tax returns of the 25 found their net worth rose by £282.77 billion in those years.

They paid a total of £9.62 billion in federal income taxes in the same period.

Internal Revenue Service data shows Amazon founder Bezos paid no federal taxes in 2007, or in 2011 when he instead received a £2,800 tax credit for his children.

Leaked documents show US super-rich pay a pittance in tax
Leaked documents show US super-rich pay a pittance in tax
  Read More

Bezos’ wealth grew by £70 billion in the four‑year period, but he paid 0.98 percent of it in tax.

Buffett paid £16.7 million in taxes between 2014 and 2018 on a reported income of £88 million.

Yet Buffett’s wealth grew by £17.1 billion—giving him a “true tax rate” of 0.1 percent.

He is currently worth £67 billion.

And Tesla owner Musk, now worth some £106 billion, paid 3.27 percent.

US tax laws do not treat increases in wealth from assets in the same way as wealth from wages.


‘We’re going to pull together—with the UK as a midfield playmaker— to conquer Covid and prevent a rematch against another virus’

Football-based nonsense from Boris Johnson

‘The stock market’s response has been a collective yawn’

The Financial Times newspaper reports on bosses’ response to the G7 tax plans

‘The UK Government will stand up for the British sausage and no-one will ever be able to destroy it”

International trade minister Ranil Jayawardena

‘There is no evidence that I have seen that a shortage of PPE provision led to anyone dying of Covid’

Health secretary Matt Hancock giving evidence to the Commons health and science select committee


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