Welcome, dear reader, to the inaugural edition of the new Dark Arts newsletter, in which I will try to keep you up to date with what’s afoot in the murky world of lobbying, influence and money in politics.
And what better time to get started? This general election is set to see the main parties raise and spend more than ever before, thanks to the new electoral spending rules quietly ushered through Parliament late last year, which increased the national spending limit from £19m to £34m.
It’s also a fairly unique election in that everyone knows who is going to win. Much of the press pack will dance around it, if only to retain some sense of jeopardy and excitement in their coverage, but everyone knows – and many have done for quite some time – that Labour will form the next government. This is particularly true of the corporate lobbying industry, which has spent the past 12 to 18 months embarking on an unprecedented rush to forge ties with Starmer’s Labour in anticipation of a change of government.
That the result of this election is essentially a foregone conclusion will inform the focus of this newsletter – which should be with you every week between now and polling day. After 14 years of Conservative-led government, the UK and its beleaguered inhabitants are in desperate need of positive change, and there are aspects of Labour’s platform that, if the party follows through on them, do give some cause for optimism.
But under Starmer’s leadership, Labour seems to be increasingly under the influence of the financial sector and Big Business, whose interests are often diametrically opposed to those of working people. Corporate influence is brought to bear in many ways, and the UK’s vast corporate lobbying industry is perhaps the most pernicious and effective tool at the disposal of those with money to spend on bending the body politic to their will.
At Dark Arts, we think it important to monitor and map the ways in which Starmer’s Labour is being targeted and perhaps even co-opted by corporate lobbyists. Doing so will not only allow us to better understand how Labour will govern, but will hopefully expose potential conflicts of interest now, before the party enters government.
If you have any tips, comments, thoughts or anything else, please don’t hesitate to get in touch – I’m on ethan.shone@opendemocracy.net.
Lobbying Together
As an organisation, Labour Together is hard to categorise. Partly an in-house think tank and policy shop, partly a factional campaign group and, perhaps only to Dark Arts’ jaded eye, partly a convenient funnel for big money and corporate influence to flow directly to Labour’s key players, as well as being an institutional counter to trade union influence.
In recent months, Labour Together has quietly added two new directors to its board. The first is Fran Perrin, a major Labour donor in her own right but also the daughter of the party’s largest donor, Lord David Sainsbury – not to be confused with his late cousin, Lord John Sainsbury, who was one of the Conservatives’ largest donors. The world of British party political donations is nothing if not heterogeneous.
Perrin is – as is the wont of so many scions – a philanthropist with a penchant for politics. In recent years she’s mainly focused on philanthropy, giving out bucket loads of cash to varying causes through her foundation, the Indigo Trust. But back in the mid-2000s, shortly after graduating from Cambridge with a masters in criminology, Perrin found herself at the heart of Tony Blair’s No 10 strategy team – an appointment that obviously had nothing to do with her father’s hefty donations to the party in years prior, or his role as science minister.
If Perrin is now eyeing a return to the political frontline she could pick a worse horse than Labour Together, which has already sent a small army of advisers directly into the offices of key frontbenchers in recent months, and will likely form a key ideological pillar of Starmer’s Downing Street operation when he wins power later this year.
But a surely more intriguing figure to Dark Arts readers is the other new addition to Labour Together’s board, a former Labour adviser and veteran lobbyist, Mike Craven.
Craven is executive chair of Lexington, a leading Westminster lobbying firm that he co-founded in the same year he stepped down as a director of GPC Market Access to become the Labour Party’s chief media officer in early 1998. Months after Craven left GPC, the firm was embroiled in a major cash-for-access scandal uncovered by The Observer and detailed at length in investigative journalist Greg Palast’s book, The Best Democracy Money Can Buy. There’s no suggestion Craven was involved in this particular scandal, but in January the following year The Observer followed up on the GPC story with a piece on him. I quote below from the 1999 article by Antony Barnett:
“The man John Prescott invited to advise him on transport policy was secretly lining up a lucrative lobbying deal with British Airways as he helped the government.
“Mike Craven, who first worked for Prescott in the Eighties, helped to write July's Transport White Paper and ran Labour's press office between September and November. The latter post – cleared by Tony Blair – gave him access to senior ministers.
“The Observer has established that Craven began setting up a lobbying company, Lexington Communications, in September. BA was one of his first clients, with a £100,000-plus contract for 'strategic political advice'.
“He had previously been chief lobbyist for BA at his old company, Market Access, which was acquired by GPC - the firm in the cash-for-access scandal revealed by The Observer last year.
“While advising Prescott, unpaid, Craven maintained his links with BA and was its guest at the CBI's annual dinner in May. That was a critical point in the drafting of the White Paper, a week before Prescott approved BA's Eurostar takeover.
“The White Paper later backed BA's plans to connect Eurostar to Heathrow. This should allow the airline to make millions by using rail as part of a plan to switch short-haul air slots to more profitable long-haul ones.”
Now, some 25 years later, as Labour looks set to gain power again, Craven has once again positioned himself at a crucial intersection between the party and the corporate world. With a key seat around the tables of both Labour’s foremost internal grouping and a leading lobby shop, Craven’s clients will benefit from near unparalleled access to the party. Which begs the question: who are they?
Lexington boasts an impressive list of public affairs clients, including construction giants like Kier, energy firms like United Utilities, Big Pharma mainstays including Pfizer and Novartis, and a number of leading house builders. One standout individual client is Labour mega-donor Gary Lubner. But in terms of sheer size, the firm’s biggest client is likely the Australian asset manager Macquarie. Though perhaps not as infamous as competitor BlackRock, Macquarie is no less of a corporate bogeyman, reviled by many for its role in developing and popularising the model of buying up infrastructure relied on by the public, piling on the debt and stripping out value for the benefit of shareholders. This approach has earned the firm a suitably villainous nickname: the vampire kangaroo.
Those who’ve been following the catastrophic decline of Thames Water will know all about Macquarie. Thames Water had a relatively healthy balance sheet when it passed from public to private hands in 1989, but may soon be subsumed back into public ownership to avoid its collapse under the weight of billions in debt. Analysts and financial boffins much sharper than Dark Arts have observed that one key factor in Thames Water’s downfall is Macquarie and its patented approach of acquisition through leveraged buyout, then skimping on investment and maximising shareholder payouts over several years – though the firm has previously defended its stewardship, arguing that it invested £11bn in the company. Macquarie sold its final stake in Thames Water for £1.35bn in 2017, but both the environmental and financial effects of its reign are still being felt by the public, and the costs of its vast corporate greed may be borne by taxpayers for years to come.
Firms like Macquarie operate at the most exploitative, vulturous and destructive end of the spectrum of capitalist enterprise. Now, a man who is paid to represent their interests to government holds a key role at one of the most influential organisations within the Labour Party as it prepares to take power. We know very little about which firms Labour is meeting with, but records of meeting room bookings on the parliamentary estate obtained by Dark Arts reveal that one of Starmer’s key lieutenants, Labour MP Pat McFadden, booked a room in Parliament for a sit down with Macquarie execs last year. Dark Arts enquired as to whether Craven was present or involved in organising the meeting, but answer came there none.
Contacted by Dark Arts, a Labour Together spokesperson said Craven “brings decades-long service to the Labour Party and wide Labour(sic) movement” to their board. They added that he sits on the board “in a personal capacity” and they are “proud of that fact”.
Dinner for spooks
Hakluyt is a globally operating corporate strategy firm that advises some of the largest companies in the world across all sectors. It spun out of MI6 and despite attempts to shake off its reputation for remaining relatively ‘close’ to the intelligence services in the years since, it is still widely regarded as a retirement home for spies.
Last year, Bloomberg reported that Labour had begun working with Hakluyt to help in its courting of Big Business. Both sides played down any connection and a Hakluyt source has since told Dark Arts that while the firm doesn’t work for or support any political parties, it does host events bringing together politicians with public figures from various sectors, including sports, the academy and, of course, business.
In addition, a Dark Arts contact who covers the global intelligence community confirms that Hakluyt courted Darren Jones, former chair of the business select committee and now an increasingly important figure in Starmer’s shadow cabinet as shadow chief secretary to the Treasury and chair of a major infrastructure review. Jones and his partner were invited to and attended a low-key seminar at the firm’s London HQ last year.
The ‘spooky’ corporate intelligence firm forked out several thousand pounds to ferry Labour’s shadow science and technology secretary Peter Kyle around San Francisco earlier this year. We know that Kyle sat down with senior figures at all the big silicon valley firms while he was there: Amazon, Meta, Google, Oracle, Open AI et al. Yet to be reported though, including by Kyle in the register of members’ financial interests, is that Hakluyt arranged a secretive dinner for Kyle to meet with more influential people while he was in the US. A source close to Hakluyt would not provide any further details, but did say that the total value of the in-kind donation recorded in the register by Kyle, £2,758.95, did not include the cost of the dinner – a potential breach of the rules.
Hakluyt bonus: FWIW, Dark Arts also received a somewhat baffling response to an FOI request about a meeting between Hakluyt and business minister Lord Johnson on 20 December 2023. Transparency records show the meeting was held “to discuss the investment environment in the UK”. The response from the Department for Business and Trade confirmed the meeting took place at the very swanky Corinthia Hotel in Whitehall, and lasted approximately 45 minutes. But the notes, presumably made by Lord Johnson’s private secretary who was present alongside the minister and Hakluyt managing partner Varun Chandra, are pretty sparse. The whole meeting is summed up in three bullet points, 63 words:
• DJ and VC discussed the housing market, its issues and how best to address them.
• DJ and VC discussed the current political cycle – and how best to navigate the system in Whitehall, and the importance of relationships.
• DJ noted he wants to see regulation as a service and not a blocker, and to create a cultural change across the board.
The ‘importance of relationships’, indeed.
AIn’t that convenient
Let’s stick with Peter Kyle for a moment. The Hove MP might well take up one of the most lobbyable briefs in government should he keep his current portfolio of Secretary of State for Science, Innovation and Technology.
He is one of many Labour frontbenchers to have benefited from external support in his office in recent months, with the consultancy Public Digital providing a member of staff four days per week to support on policy. The current arrangement began in April and runs until July, just a few days after polling day, at a cost to Public Digital of more than £33,000. It’s worth noting that the staffer in question is also a policy fellow at Labour Together — small world, eh?
But Public Digital are no longer alone in their charitable decision to help out the potential future secretary of state. As of this month Kyle’s office also benefits one day per week from the expertise of a member of staff from Faculty AI.
The firm has won government contracts to the tune of £24 million in recent years, some of which were awarded without competition. The government has said where contracts were awarded without competition this was because Faculty was the only firm capable of delivering the work – though this has been questioned. Though there’s no suggestion any rules have been broken, the arrangement has nonetheless raised a few eyebrows, in part due to Faculty’s considerable links to government – a number of execs at the company are former senior civil servants; the company’s chief Marc Warner has sat on a number of government advisory boards and both he and his brother worked with the Vote Leave campaign; a government minister was forced to put £90,000 of Faculty shares in a ‘blind trust’ arrangement due to concerns about possible conflicts of interest.
Now the firm looks to be bolstering its connections with the incoming government. The arrangement with Kyle’s office – valued at £36,000 – is only scheduled to last a couple of months, according to the register of members’ financial interests, but it was arranged prior to the election being called so could well be extended. The firm also recently co-authored a substantial policy report titled ‘Governing in the Age of AI: A New Model to Transform the State’. The report was published with the Tony Blair Institute for Global Change, which retains very close ties to the party.
The relevant question here, as ever when profit-seeking companies provide their services for free to political parties, is what do they expect to gain from this arrangement?
When we put this question to them, a Faculty spokesperson said: “AI policy is complex, but getting it right will mean vast economic and productivity gains for the country. It is therefore right Labour are drawing on us and other experts to help shape their approach.
“It remains the case that we do not do party politics, or activities such as supporting election campaigns, voter engagement, or enhancing a party's popularity."
Dark Arts readers with a particularly keen eye will note that this does not, in fact, answer the question.
Quick hits
There’ll be no New Deal then? I’ll tell the workers… There’s major frustration among many of Dark Arts’ trade union contacts following the publication of Labour’s policy document on workers rights, formerly known as the New Deal for Workers, which has been rebranded as the ‘Plan to Make Work Pay’ and, according to many trade unionists, been watered down significantly from the original proposals. The plans have been the subject of intense lobbying by business for months, both publicly and behind the scenes. Sharon Graham, general secretary of one of the largest UK trade unions who has been none-too-shy about criticising Starmer, said the new plan “has more holes in it than Swiss cheese” and “is in danger of becoming a bad bosses’ charter”. Graham has also hit out at Labour over the inclusion of a boss who the union dubbed a “Covid rogue” in a list of business executives endorsing the party - more on this here from Novara Media’s Polly Smythe.
Unfortunately, Dark Arts had long been predicting this development. And if you’d like to be ahead of Starmer’s next U-turn, our money is on the party dropping its commitment to abolish the ‘carried interest’ loophole, which effectively allows private equity firms to pay a lower rate of tax on bonuses. More on this in next week’s email.
FGS! We’ve previously reported on the staffers seconded to Labour from corporate lobbying firms and consultants, and the potential for conflicts of interest that arise from these kinds of arrangements. The latest firm to get in on the act is FGS Global, which has provided a campaign adviser to work in shadow chancellor Rachel Reeves’ office since mid February. The arrangement has so far been valued at more than £10,000, so you’d have to assume this is a fairly senior staffer at the firm, which represents big four consultancy EY and investment firm KKR, among others.
Second job watch: Former deputy PM and renowned karate expert Dominic Raab continues his ascent to the top of the ignominious list of MPs who earn the most from second jobs. Raab, who has announced his intention to step down at the next election, already earns £118,000 per year as an adviser to Appian Capital, an investment vehicle specialising in critical minerals. He’s now consulting on a report for the World Gold Council on “countering the risks created by illegal mining, organised crime and illicit financial flows in the international gold market”. The retainer for five months is £100,000. Now we’ve heard of a gold-plated pension, but that’s just ridiculous…
Now check out:
Read: This Sunday Times story from last year about Labour Together’s failure to declare more than £700,000 in donations, and this recent New Statesman interview with the think tank’s director, Josh Simons – who has been parachuted into a safe seat in the North West of England.
Listen to: This edition of the FT’s Behind the Money podcast, which takes a closer look at ‘Macquarie’s grip on global infrastructure’
Watch: On a totally non-lobbying note, this week I realised that 2004’s King Arthur (starring Clive Owen and Keira Knightley) walked so that Game of Thrones could run. Worth the Amazon Prime rental fee for Ray Winstone’s turn as Bors the Younger alone.
That was extremely interesting and worrying in equal measure. Personally my conscience means I can't vote for Labour.
None of it surprising and all the unpleasant people like John Mann and many others, are back again. I am a Quaker and I cannot vote for anyone, who is in a Party with some Friends of Israel. Im truly disgusted with Starmer, whipping the Party to vote against a ceasefire. Only about 50+ voted for the ceasefire. He claims to be a human rights lawyer but is actually on Israel's side in this one sided war. It isn't the war in Gaza, its the war on Gaza. It is also a genocide. I feel like I must not stop being with these poor suffering people. We just have to hold them to account. We have to, or this will destroy these long suffering people.
The occupation and settlements are illegal and must be dismantled and the Palestinians must be free, and get equal human rights to other human beings.
Labour are morally bankrupt and haven't got the definition of Official Opposition quite right! They are the tory party and the tories are supporting a fascist Israeli government and mass punishment by starvation, bombs, bullets, dehydration, disease. A thirteen year old boy died of starvation yesterday. It's horrific, as are our complicit government and our Official Opportunists. We have to get them all to the ICC along with the Israelis.
The security council Veto has to go. It is a licence to commit genocide.
The UN is a dysfunctional body who's remit is to attempt to stop and prevent genocides.
I am voting TUSC- Trades Union and Socialist Coalition because they have moral fibre.
Aljazeera remains on 24hours a day.
I shall stay with them until there is a shift and aid gets in.