Kleptocracy UK?

The term "kleptocracy" was coined to define countries, often newly developing, in which the ruling elite creamed of the nation's wealth to the detriment of the welfare of ordinary people.  Something similar seems to be happening in Britain today, though the beneficiaries  are not exclusively the ruling elite as normally defined.

The demise of British Home Stores (BHS) is but the latest example.  This staple of the high street was bought by Philip Green (later "Sir" Philip and invited to be a minor member of Mr Cameron's government) for £200m, who put ownership of it in his non-dom wife's name (to avoid tax?), took at least around £500m out of it and then flogged it for £1 to Dominic Chappell, a former racing driver with no retail experience. Quite how much Mr Chappell has made out of it is not clear, though he appears to have moved £1.5million to his own advantage only days before BHS went "into administration" (ie bust) leaving a deficit in the pension fund of £571m.

Something similar happened earlier this century when what was left of  Britain's remaining motor company, British  Leyland, was bought of £10 by four businessmen calling themselves the Phoenix Corporation.  The company was relaunched as MG Rover and the government put in £16m to help it revive but to no avail. In 2005 it went bust, but not before the four businessmen had allegedly taken £42m out of it.  In this case the accounting firm Deloitte was fined ₤14 million for failing to recognise a conflict of interest. 

Who will be slapped on the wrist for the BHS deals?

This plundering of pension funds may not have been invented by the late newspaper publisher Robert Maxwell, but his raids on the pension fund of Mirror Group Newspapers caused the ploy to be well-publicised the early 1990s.  In this case Coopers &amp Lybrand Deloitte accountants “failed to report abuses” to pension fund trustees {Coopers & Lybrand Deloitte are now part of PricewaterhouseCoopers (PwC)}.


More recently was the part privatisation of our Royal Mail at a one third discount, but not before the lucky private buyers were relieved of the Royal Mail's  pension fund liabilities, maybe as much as £10bn, which were taken over by the public purse..

And perhaps it's unfair speculation, but one cannot help wondering if the government's determination to turn all remaining local authority schools into "academies" is not at least partly motivated by the opportunity  to grab ownership of their playing fields, ready for sale to the private sector.

These events do not strictly speaking make it legitimate to describe the UK as a kleptocracy, since private individuals rather than public or elected officials are involved, but it is clear that our laws make it too easy assets to be acquired, often with the connivance of politicians and with the indulgence of the major accounting firms, by ruthless individuals with the necessary  nous but without any sense of moral responsibility.

We do not have a fair society, we are not "all in this together," and our political system is singularly failing to put the matter right.