Posts Tagged ‘KPMG and Deloitte’

Bravo! Margaret Hodge Tackles the Political Accountancy Companies

February 9, 2015

Mike over at Vox Political has this story about Labour’s Margaret Hodge criticising the increasing involvement of PricewaterhouseCoopers and the other major accountancy firms in working for political parties: The perils of pandering to PricewaterhouseCoopers. He writes

This is something that broke while Yr Obdt Srvt was still recovering from a recent illness, but is still worth covering because Labour really needs to understand the danger of association.

Margaret Hodge, Labour’s chair of the Commons Public Accounts Committee, broke ranks to warn the Shadow Cabinet against accepting – shall we call it – “help” from accounting firms like PricewaterhouseCoopers on Friday. She said it was “inappropriate” and she was right to do so.

It’s the political equivalent of accepting “help” from the Mafia – you end up in their pocket, owing them favours.

According to the BBC, Labour MPs including Ed Balls (Shadow Chancellor) and Chukka Umunna (Shadow Business Secretary), along with Rachel Reeves (Shadow Work and Pensions Secretary) have received more than £540,000 in research assistance from the firm in the past 18 months alone.

PwC is one of the ‘Big Four’ accountancy firms – the others are Ernst & Young, KPMG and Deloitte – who also advise the Conservative-run Treasury on tax policy. It should not be beyond anybody’s wit to see there’s a clear conflict of interest if the firm is advising both Labour and the Tories on tax policy.

Mike also points out that PricewaterhouseCoopers were also advising businesses on how they could avoid tax, which is another conflict of interest. He makes the point that where they are advising all parties, and making their own observations and suggestions, the danger is that political parties will be promoting the accountancy firms’ own policies, against the interest of their constituents and electorate.

PricewaterhouseCoopers have also said that they welcome Margaret Hodge’s report, but say that they did not mislead parliament when they appeared before it two years ago in 2013.

Mike askes the obvious question of whether this can be believed. He fully agrees with Hodge, and recommends that all of the big accountancy firms be removed from assisting political parties.

This is exactly right. Private Eye for years has been covering the way the big four accountancy firms have been ‘assisting’ the political parties. The question of how far they are responsible for the mass of legislation allowing massive corporate tax avoidance, while the tax burden is passed on to the poorest sections of society. They aren’t alone in peddling assistance and influence to the major parties. The Eye has also reported on how big business, including the banks, insurance companies, arms dealers, private healthcare companies and the gambling industry, have lobbied parliament, and sponsored party conferences and meetings. Under Blair, the companies striving for corporate influence even included Wackenhut, a private prison company.

This is just a small part of a particularly noisome Augean stable that desperately needs to be cleaned out.

We can begin by showing the door to the accountancy firms.