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The revolving door between government and the arms industry 

The Prime Minister’s commitment to spending on warfare rather than welfare is good news for the arms-corporation grifters, says SOLOMON HUGHES

BORIS JOHNSON’S announcement that the Ministry of Defence will get £16.5 billion extra over the next four years — a 10 per cent increase in the arms budget — gives a simple message: the government would rather spend money on the possibility of a future war than the reality of our health and education.

If nurses are being offered no real pay rise after inflation but the money for rockets and bombs is going up, then the lesson is obvious.

The government thinks the “strength of the nation” is in fighter jets and tanks. 

But our “national security” is really about making the people of the nation secure — about having decent housing, food for our kids, welfare services, education and so on.

Johnson is making a simple calculation that the chance of warfare is more important than the reality of welfare.

But there are also other figures in the sums. Increasing the money spent on “defence” also means that billions will bleed out to favoured arms firms, often for poorly working kit and systems. 

But those corporations use some of that money to hire key insiders. The arms industry is a bit of a racket.

Take, for example, Babcock. It started life as a big heavy-engineering firm. But since the 1990s it has moved to being more and more a military “service” company, making most of its £5 billion a year from “supporting” the armed forces. 

Babcock runs the Rosyth naval docks in Scotland and relies on fitting and servicing Royal Navy warships and submarines for much income, with other big contracts maintaining the army’s armoured cars and RAF airbases.

Babcock gets the ams investment and spends money investing in top people.

Until April 2020 Andrew Parker was the director general of MI5. Now he is a director of Babcock. 

As boss of MI5, Parker had access to ministers. Now Babcock has bought him, his reputation and his contact book.

The advisory committee on business appointments (ACoBA) is supposed to police the “revolving door” between government and industry. 

It is supposed to stop former officials lobbying the government — usually with a two-year ban on such lobbying.

According to ACoBA papers, Parker made clear he did want to immediately start speaking directly to the MoD as a Babcock representative. 

He said he wanted “board-level contact” between himself and the MoD. 

Parker said Babcock and the MoD had a “partnership” and he wanted to “contribute to the effectiveness of the partnership by assisting with close engagement and mutual understanding.”

ACoBA was clearly troubled by this “close engagement” of a former key government official with the current government on behalf of a big government contractor. 

It said Parker should not lobby the government, but it appeared to agree that he could have these “board-level” meetings with the MoD anyway, on the very thin grounds that they are not “lobbying” because Parker promised he would not be involved in “commercial negotiations.” 

So ACoBA agreed Parker could join Babcock. It said he should avoid sharing “privileged information” he learned in government with Babcock and avoid “lobbying” for the firm (although he is allowed to meet the highest officials of government). 

None of these restrictions are policed. All are based on “personal honour.”

Parker is not the only ex-security official working at Babcock. 

Sir David Omand, former head of GCHQ and Cabinet Office permanent secretary in charge of security, is the senior independent director on Babcock’s board.

The prospect of future plum jobs on military boards provides extra encouragement for ministers and officials to shower money on the arms industry. 

The revolving door between government and the arms industry also discourages the government from cracking down on wasteful, over-expensive, ineffective military kit. Babcock has some form in this area.

Babcock and fellow arms firm Lockheed run a joint venture called Ascent, which took over the core of British military flight training in a massive £3.2 billion private-finance initiative (PFI) contract awarded in 2008. 

The PFI has been subject to much criticism: in 2015 spending watchdog the National Audit Office (NAO) reported that delays meant the scheme would only become fully operational six years late, in 2019. 

Last year the NAO looked again at the scheme and found that “aircraft availability has been poor across the system.” 

The MoD shared some blame for shortages, but “Ascent did not provide the elementary flying, rear crew and multi-engine aircraft required” in the inspected period.

When the NAO first looked at the Ascent Training PFI in 2015, it warned that “By transferring control of training to a contracted provider, the department has less flexibility to increase or decrease training capacity without requiring contract renegotiations and incurring extra costs and time.”

This has now happened: the 2015 Strategic Defence Review called for more pilots than bargained for in the original Ascent deal. In response the MoD had to hand even more contracts to Ascent.

So Johnson’s announcement of extra spending is first and foremost an announcement of more spending on warfare, less on welfare. 

But it will also contain a slice of “corporate welfare,” of easy payments to big arms  corporations for over-expensive, underperforming kit. 

It will also fund the cushy post-retirement careers of lots of high officials and former ministers.

Moulding’s money well spent

MATTHEW MOULDING made an £830 million fortune this month when he took his online retail firm The Hut Group “public.” 

He grabbed nearly a billion pounds by selling slices of the firm on the stock exchange. 

Luke Hildyard, director of campaign group the High Pay Centre, did a good job getting his comment into a lot of the news coverage of Moulding’s fortune. 

Hildyard said: “Payments worth hundreds of millions of pounds are far more than any individual needs or could possibly ever spend, and will strengthen the argument for more effective taxation of corporations and the super-rich.”

My guess is that Moulding knows this is true, and so has made an investment to try to make sure any calls for better taxation are not heard. 

Moulding’s other company, CEND Ltd, has given the Tories £300,000 since 2017. 

Moulding makes hundreds of millions, and gives hundreds of thousands to the party that he thinks will defend him from future taxes.

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