1 June 2015

FIFA, the EU and the UN‎ are riddled with crony corporatism


Janice Turner, a Times columnist, found delightfully apt words to describe the FIFA officials arrested in Switzerland last week:

“The seven men arrested share a familiar look — jowly, hair-dyed, corpulent, self-regarding, bespoke-suited, pinky-ringed — and an expression of outraged entitlement.”

Yup, I’d say that sums them up pretty well. I was reminded of Ayn Rand’s description of the directors of a mega-corporation:

“Men whose careers depended on keeping their faces bland, their remarks inconclusive and their clothes immaculate”.

Meet Davos Man. You can find him in the upper echelons of almost any bureaucracy – the CBI, the TUC, the big quangos. (He is usually a man, although you occasionally come across his female equivalent, short-haired, power-suited, and with that same expression of smug disdain.) Davos Man is happiest in international organisations, though, free from scrutiny. Look at the people who run the International Olympics Committee, the European Commission or the United Nations. Sure, there are some good and honourable public servants there; but the jowly men with their neat suits and their careful opinions predominate.

I’ve written a great deal over the years about Brussels corruption: the fraud, the waste, the tax-free perks, the entertainment budgets, the petty scams. But perhaps I was wrong to pick on the EU. All international bureaucracies tend to be self-serving, and for the same reason: there is nothing to stop them. An entrepreneur has to worry about his customers, an MP about his voters. But a UN official, like a FIFA delegate or a Eurocrat, doesn’t really answer to anybody. He can concentrate on making himself comfortable.

Now ask yourself this. Who are the biggest supporters of the EU project? What kinds of people, in the 28 member states, are keenest on the Brussels racket? By and large, they are the local equivalents of those bespoke-suited Eurocrats: big bankers, heads of mega-charities and NGOs, cartel politicians, civil servants, spokesmen for trade and professional associations, lobbyists, directors of multi-national corporations.

Consider, for example, Sir Mike Rake, the deputy-chairman of Barclays and President of the CBI, who declared two weeks ago that business should “turn up the volume” on behalf of the EU – on the very day that his bank was fined £284.4 million for “brazen” currency rigging. This is the Sir Mike Rake who, in 2003, sonorously warned us that “the risks of staying outside the euro far outweigh any risks of joining”. And this is the CBI, come to that, that has received £800,000 in grants from the EU, and that spent the entire 1990s campaigning to scrap the pound.

Or consider Airbus, which is now trying to hint – though, naturally without committing itself to anything – that a British withdrawal from the EU might jeopardise future investment. This claim is not just implausible; it’s risible. How can I be so sure? Well, listen to what the Chief Executive of Airbus himself said 15 months ago, before the Davos Men started encouraging each other to join the referendum campaign:

“Clearly we have a massive investment in the UK and I don’t think there has ever been a plan to change that. Profitable trade and political union are not joined at the hip. Russian and American companies trade with companies in Europe without being part of a political union. Business investment depends on profits, not politics.”

That sounds pretty unarguable, doesn’t it? So why this latest intervention? Could it be that Airbus, like so many mega-corporations, is attracted to the EU, not because it encourages free competition but, on the contrary, because it restricts it? Might the appeal of EU membership reside precisely in those burdensome rules, which hit start-ups and consumers, but which give the giant corporations an advantage over smaller rivals which can’t afford the compliance costs – let alone the Euro-lobbying. Airbus employs ten people to lobby the Brussels institutions. Those lobbyists give it an advantage which it might lose in a deregulated, post-EU future.

I’ve argued many times on CapX that being pro-business is not the same as being pro-market. The EU is arguably pro-business, or at least pro-big-business; but it is certainly not pro-market. Davos Man loves the Brussels set-up, sensing instinctively that it was designed by and for people like himself. As Steve Hilton, David Cameron’s former policy advisor, puts it from the opposite perspective, “Spend time in Brussels and you will find in the European Parliament and Commission a vast, stinking cesspit of corporate corruption gussied up in the garb of idealistic internationalism.”

That’s what the referendum will ultimately be about. Does Britain want free trade and democracy, or corporatism and crony capitalism? I know which side I’m on.

Daniel Hannan is a Conservative Member of the European Parliament and blogs at www.hannan.co.uk.