Questions for Cameron over Lynton Crosby's links to alcohol and tobacco firms

After minimum alcohol pricing and plain cigarette packaging are dropped from the Queen's Speech, Labour and Tory MPs point to the election chief's connections.

As notable as what is in today's Queen's Speech is what isn't. Despite repeated promises by ministers, the speech will not include a bill enshrining the government's commitment to spend 0.7 per cent of GNI on aid in law, nor, to the dismay of public heath campaigners, will there be any mention of minimum alcohol pricing or plain cigarette packaging. Only gay marriage survives as an emblem of Cameroon modernisation. 

Conservative MPs attribute this strategic shift to Lynton Crosby, the Tories' recently appointed campaign strategist, who speaks of scraping the "barnacles off the boat". By this, the hard-nosed Australian means dispensing with namby-pamby measures of little concern to the average voter (such as minimum  pricing and plain packaging) and focusing on people's core concerns: the economy, immigration, education and welfare reform.

But could Crosby's motives go beyond the merely political? As the Daily Mirror reports, the strategy chief's PR and lobbying firm Crosby Textor has long-standing links with the alcohol and tobacco industries. The company was on a retainer with British American Tobacco when cigarette companies fought the introduction of plain packaging by the Australian government and Crosby was federal director of the Liberal Party when it accepted large donations from the industry. Crosby Textor Fullbrook, the UK arm of the firm, has represented tobacco companies since the 1980s. 

The company's links with the alcohol industry are no less notable. The Distilled Spirits Industry Council of Australia, which campaigned against minimum alcohol pricing, is listed as a client of Crosby Textor in a New South Wales register of lobbyists. The trade body includes multinational companies such as Diageo and Bacardi, currently lobbying against a price floor in the UK. 

With minimum alcohol pricing and plain cigarette packaging both abandoned in quick succession, some in Westminster are beginning to smell a rat. Shadow health secretary Andy Burnham said: "Two public health policies have been dropped since Lynton Crosby arrived. David Cameron needs to come clean about whether Crosby had any involvement in these decisions. From the outside it looks very much like a right-wing lobbyist is dictating the coalition’s public health policy."

Downing Street has so far refused to say whether it was aware of Crosby's links to the alcohol and tobacco industries and what role he played in the decision to abandon the measures. But it isn't just Labour that is sounding the alarm. Sarah Wollaston, the independent-minded Conservative MP for Totnes, and a former GP, tweeted the Mirror's story with the accompanying words: "Why we desperately need an effective register of lobbyists.

Convenient, then, that a statutory register of lobbyists is another of the "barnacles" that Crosby has scraped off the boat. 

Lynton Crosby, who was recently appointed as the Conservatives' election campaign manager after running Boris Johnson's re-election campaign.

George Eaton is political editor of the New Statesman.

Getty
Show Hide image

BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.