George Osborne and the Revolving Door of Politics
By MATTHEW OULTON
When George Osborne lost his job as Chancellor of the Exchequer in 2016, there would have been a cruel irony if he’d been forced onto Universal Credit, the meagre payment for the jobless that he helped design. Instead, he had to rely on an MP’s salary of £74,962 – around 20 times higher than Universal Credit. Nevertheless, Osborne was soon ‘on his bike’ looking for work.
Since leaving Number 11, he has had a succession of part-time or sporadic work, including editing the Evening Standard, acting as an advisor to Black Rock, and now, a full-time role in the boutique investment bank, Robey Warshaw. What all of these roles have in common are tremendous salaries; his Black Rock position paid £650,000 per annum for one day per week. It would take the average British worker 25 years of full-time work to rack up what Osborne made in a side-gig.
And Osborne isn’t the only high-profile politician to take well-paid work in the private sector. Nick Clegg, former Deputy Prime Minister, now works as Vice-President for Global Affairs and Communications at Facebook. Having honed his Public Relations skills as the acceptable liberal face of the Coalition, he seems to be capitalising on his experience. Former Prime Ministers David Cameron, Gordon Brown, and Tony Blair all took the more conventional route of public speaking, lecture circuits, and publishing memoirs, making a killing on each.
Is it a problem that our politicians enter office knowing that they can make more money out than in?
In theory, former government officials could add a lot of value to the private sector, both to firms and to the economy. After all, regulatory frameworks can be complicated and a productivity drain. Who better as a guide for your corporation than the people who helped write them? Likewise, with a politician at hand to translate policy-speak to corporate English, perhaps the government will find it easier to communicate their desires. A seamless link between the corporate world and the political sphere is no bad thing, right?
Except, of course, that former politicians don’t just act as neutral translators. Although becoming a lobbyist in areas you regulated is restricted in the UK, many politicians are clearly exploiting specific knowledge or contacts they developed whilst in ministerial office. That poses a threat to the public interest in three major areas.
Firstly, there’s the issue of conflict of interest. If a politician knows in office that they’ll need friendly contacts in the private sector to give them a job, they might be disinclined to impose necessary regulations. Since political employment is famously insecure – see Ed Balls, for example, who went from Number 2 in the Labour Party to the dole queue in 24 hours – there is undoubtedly a temptation for politicians to make important friends whilst they can. It goes without saying that this isn’t in the interests of the country.
Secondly, there’s the injustice of it. We wouldn’t casually tolerate the idea that ‘who you know’ can grant you a £650,000 salary in other walks of life, and we shouldn’t in this sphere. Accessing important public information and regulatory insight is a privilege granted by the electorate; it’s wrong that former politicians are able to profit off it so dramatically. Similarly, offering a company an unfair benefit in exploiting government edicts is also wrong. Small firms generally can’t afford to pay for a former minister to help them out, leaving larger and more profitable firms with an unassailable advantage.
Finally, there’s the potential for interference. The revolving doors don’t just accommodate politicians walking into corporate jobs, they accommodate corporates walking into government. The cosy relationship between companies, politicians, and former politicians allows too much pressure, both political and personal, to be wielded by the well-connected.
So, what can we do about it?
One, admittedly simplistic, solution would be to ban former politicians from taking work in the private sector. However, since many political careers end early and abruptly, many MPs and ministers need employment of some kind after they leave Parliament. Most rank-and-file politicians don’t have the media profile to make money selling books or giving talks. It’s understandable that former corporate denizens, like George Osborne, will seek to return to their old careers. Can a former politician help that their reputation, contacts, and expertise come as a package? It would be impossible for Osborne to take any job without his experience as Chancellor affecting both his hiring and his job-performance.
A better solution, then, is to change who is hired in politics in the first place. Consistently stacking the Treasury with people who have City connections, for example, is not a good strategy. Of the four occupants Chancellors of the Exchequer since 2010, three (Rishi Sunak, Sajid Javid, and George Osborne) are former investment bankers. Likewise, the flow of advisors between government, industry consultants, and City firms needs to stop. It’s one thing to ‘retire’ to industry, but many political advisors will move backwards and forwards between government and the private sector, gaining experience and contacts in one that they can sell to the other.
The most important thing, though, is increased scrutiny. Politicians couldn’t get away with buttering up would-be employers whilst in office if the voters were paying more attention. As it is, voters’ attention is dispersed, but corporate attention is focussed. Consumer advocacy groups need to fill this gap, publicising any indiscretions. Likewise, if politicians are blatantly influence-peddling after they leave office, voters and the media should hold their political allies to account.
The threat of corporate work distorting politicians’ interests will always loom over British politics. The private sector has much deeper pockets than Her Majesty’s Government. For now, the only solution is vigilance. One day, we might be able to develop better tools for preventing these conflicts of interest. Until then, we should at least stop complaining when politicians make money from a book deal or speech-run. At least selling a book is vaguely in the public interest.
Image - Wiki Commons.