Liam Fox’s Brexit trade department has spent tens of millions on companies that have warned of “chaos” and economic disruption after the UK leaves the European Union (EU).
Fox, a Brexiteer in the UK Cabinet, has frequently said that British business would thrive even without a deal with the EU. But firms that have won lucrative contracts from the Department for International Trade (DIT) have warned that British politics is “so dysfunctional” that the government’s current Brexit strategy is “very unlikely” to survive “in its current form”.
A DIT-funded trade body complained that the Brexit trade ministry is “plagued” by indecision, with lateness “systemic in the organisation”.
Fox has also given thousands of pounds of public money to a company run by a former Westminster insider, and hired a contractor that had been accused of making excessive profits from aid contracts.
Anti-Brexit campaigners have accused Fox of the “height of hypocrisy” for championing Brexit while spending big with companies that have warned of the downsides of leaving the EU.
Over the past two years, DIT spent more than £23m on marketing campaigns with Dentsu Aegis, according to government transparency data. But earlier this year, the ad agency said that Brexit has resulted in less money being spent on advertising in Britain.
“The Brexit process has done little to boost economic confidence and there are concerns that a squeeze on household spending may result in cuts to marketing spend,” Dentsu Aegis’s global adspend forecast report said in January.
The Brexit process has done little to boost economic confidence. Dentsu Aegis
DIT also paid more than £20m to executive management firm Green Park. In a LinkedIn post last year, a managing partner in human resources at Green Park wrote that there is “no denying Brexit will affect the supply of talented, diverse candidates, will encourage movement of European talent and will enable large-scale off-shoring and the creation of new European hubs for historically British-based traders”.
Multinational consultancy EY has received more than £30m from Fox’s department. In its most recent advice to business on Brexit planning, EY warned that Prime Minister Theresa May’s Chequers plan for Brexit is “very unlikely” to survive “in its current form”.
Fox has complained the British businesses are “too lazy and fat” to export overseas but a trade body that received DIT funding said that the department has “no budget” for supporting small businesses and is “disincentivising” companies from exporting.
“There is no budget to support any exhibition in the shipbuilding sector in the 2018-19 financial year,” Tom Chant, director of the Society of Maritime Industries, said in June. The society has received over £57,000 from the department, with the last payment in 2017.
“Apart from the fact that we have no budget, the lateness of all DIT decisions seems to be systemic in the organisation,” said Chant. “How does this match with the UK being a global trading nation?”
DIT also spent more than £11.5m on ‘subscriptions’ to the World Trade Organisation (WTO) as part of the process of leaving the European Union. Liam Fox has spoken enthusiastically of trading under WTO terms in the event of no-deal Brexit, with the minister even putting the chances of the UK leaving the EU without an agreement at “60/40”.
The department’s published spending data lists hundreds of companies. Not all have a position on Brexit. In April of this year, DIT spent £189,000 on marketing and media with workspace start-up Second Home, which is run by former Number 10 advisor Rohan Silva. Fox’s department also hired a much-criticised aid consultancy as part of a new international investment promotion programme.
It’s the height of hypocrisy for Liam Fox, who frequently plays down the risks of a disastrous no deal Brexit, to be handing over millions to companies that are warning exactly the opposite. Spokesperson, People's Vote
Adam Smith International (ASI) withdrew itself from bidding for contracts from the Department for International Development (DFID) for a year up to February 2018 following media reports that a member of staff had improperly obtained DFID country business plans. A subsequent DFID assurance review found that “ASI did not gain any significant or specifically identifiable commercial advantage from reviewing the business plans”.
The contractor successfully bid for cash from Liam Fox’s department while it was sitting out DFID funding rounds. In December 2017, the department for international trade gave ASI a contract worth more than £25,000.
A spokesperson for Adam Smith International said: “ASI was engaged through the UK Government Prosperity Fund on a short study to provide business case design inputs into a new investment promotion programme in India, Pakistan, South Africa and Nigeria. The programme is aimed at facilitating increased foreign direct investment opportunities to generate jobs and livelihood opportunities; improve the quality and transparency of investment opportunities; and improve foreign investment opportunities for UK businesses and other foreign investors.”
A spokesperson for the People’s Vote campaign that argues for a second referendum on Brexit said: “It’s the height of hypocrisy for Liam Fox, who frequently plays down the risks of a disastrous no deal Brexit, to be handing over millions to companies that are warning exactly the opposite.
“Perhaps it should come as no surprise that the most pointless minister in the government doesn’t seem to be on top of his own department’s spending.”
A spokesman for DIT said: “We really don’t care [if a company] is for Brexit or against Brexit or have not expressed an interest at all. It is very much about providing services that deliver value for money for the taxpayer, which are high quality and which have been objectively identified through a fair, open and transparent tender process.”
A version of this article was published on openDemocracy on 4 September 2018.
Cover pic credit: CC | R. D. Ward | Some rights reserved