FactCheck Q&A: Who’s on the plane with Cameron?
The Prime Minister is busy “flying the flag” for British business on a whistlestop trade delegation to Japan, Indonesia, Malaysia, Singapore and Burma.
Some 55 representatives from companies and other bodies have accompanied Mr Cameron on a private flight to the Far East, according to Number 10. You can read the whole list at the bottom of this blog.
The invitations come from Downing Street but UK Trade & Investment (UKTI) decides which firms get a seat on the Prime Ministerial plane. All the business leaders have to pay for their own flights and accommodation, UKTI told us.
There’s no dispute that military suppliers are getting support from Number 10, with Mr Cameron saying: “There are a number of defence manufacturers with us. I’m completely upfront about that because we do have a very strong defence sector.”
But just how much is this trip about the business of war?
Of the 55 companies, six are major defence players. Pride of place goes to BaE Systems, by far the biggest name in the UK defence industry and the second biggest arms dealer in the world, according to 2010 figures from the Stockholm International Peace Research Institute.
BaE has a history of doing deals in Indonesia. It exported more than 30 Hawk fighter jets to the country in the 1980s and 90s, when the dictator Suharto was brutally suppressing resistance to the Indonesian occupation of East Timor.
BaE’s representative on the plane is Alan Garwood, who was reportedly interviewed by the Serious Fraud Office (SFO) over allegations that BaE staff had paid bribes to Saudi royals and officials to expedite the massive al-Yamamah arms deal.
The SFO dropped the investigation against BaE in 2006. Mr Garwood, who was working as the head of the Ministry of Defence’s arms exports department at the time of the investigation, received a CBE the following year. There is no suggestion of any wrongdoing on the part of Mr Garwood.
But the US Department of Justice pursued the case, issuing subpoenas in 2008 to Mr Garwood, by now back at BaE, and several other employees in relation to the company’s activities.
In 2010 the defence giant pleaded guilty to two criminal charges, not related to corruption or bribery: conspiring to make false statements to the US government and failing to keep reasonably accurate accounting records in respect of activities in Tanzania. BaE was fined £286m.
MBDA systems, a missile systems manufacturer whose biggest shareholder is BaE Systems, also wins a place on the trip.
The other big names are Rolls Royce, the UK’s second-biggest arms exporter; anglo-Italian helicopter giant Agusta Westland; Thales, experts in fighter jet technology, and the high-tech military equipment company Ultra Electronics.
So, there are some big hitters, but it looks at first glance as though the defence industry has won a fairly small share of the seats on an apparently diverse delegation, which includes internet start-ups, nuclear decommissioning experts, universities, a clothing company and the English Premier League.
But six out of 55 isn’t the whole story – the influence of the defence sector stretches far beyond those acknowledged military specialists and can be felt up and down the aisle of Mr Cameron’s jet.
Scratch the surface, and you find that many other companies represented on the delegation also have major interests in winning defence contracts around the world.
In total, a further 12 companies taking part in the delegation sell products with military applications, including vehicle makers JCB, engineering firms AMEC and Atkins, builders Balfour Beatty and fuel cell specialists Intelligent Energy.
Even four out of five universities represented on the flight – Heriot Watt, Southampton, Nottingham and Open – have links to the arms trade. BaE Systems has funded research projects at all those institutions.
Barclays, the only bank on the list – which says it provides financial services to the defence sector but only within strict ethical and legal guidelines – owns a 3.98 per cent stake in BaE.
What about offshore?
Mr Cameron’s trip takes place amid an ongoing row over government measures to crack down on tax avoidance, including the use of tax havens.
But Barclays, the only bank represented on the trip, has a questionable track record when it comes to using offshore financial instruments.
Earlier this year, chief executive Bob Diamond told the Treasury Select Committee that the bank owned more than 300 subsidiaries in tax havens, and Barclays admitted using two tax avoidance schemes branded “highly abusive” by the government.
Of course, there is no suggestion that Barclays has done anything illegal. Indeed, that would be very unlikely as one of the bank’s divisions prides itself on helping customers stay inside the law.
Barclays Wealth International advertises its services by warning clients that “Offshore tax legislation is constantly evolving. New and wide-reaching measures continue to be introduced and the courts continually add to an already massive body of rulings and interpretations. For the unwary or ill-advised, going offshore could contain a number of potential pitfalls.”
For people wishing to take advantage of the world of offshore tax planning, Barclays recommends the services of its “preferred tax partners”, the financial services firm Ernst & Young” – who also have a seat on Mr Cameron’s flight.
FactCheck was slightly surprised to see the Asia-focussed business group Jardine Matheson on the seating list, as the company is not a major UK employer and is in fact domiciled not in Britain but in Bermuda.
A spokesman for the company said the decision to base the company in Bermuda had nothing to do with tax but was “in order to be subject to British Law, with ultimate legal recourse to the highest court authority in the UK, the Privy Council”.
He added: “Jardine Matheson and its affiliates employ approximately 7,000 people in the UK, principally in the fields of insurance, motor distribution and hotels.
“Jardine Matheson and its worldwide interests employ British solicitors, accountants, banks and numerous other UK-based professionals. Six group companies, including Jardine Matheson, have their primary listing in this country.
“The Jardine Matheson Group pays normal tax on its profits in every country where it operates. For example its affiliate, Jardine Lloyd Thompson, paid over £40 million tax in respect of 2011, of which half was UK corporation tax.”
We wondered whether the fact that one of the company’s directors, Sir Henry Keswick, is a major Conservative donor was a factor in Mr Cameron’s decision to extend an invitation to Jardines.
Sir Henry Keswick gave £50,000 to the party last year, a sum that gets him personal access to the Prime Minister via the party’s Leader’s Club. His brother, fellow director Simon Keswick, is also a regular donor and Simon’s son Ben has the seat on the plane as Jardine Matheson’s chief executive.
A Jardines spokesman said: “There is no connection of any sort between this trip and any political donations.”
By Patrick Worrall
That list in full:
Aggreko (Rupert Soames)
Agusta Westland (Graham Cole)
Airbus (Tom Williams)
Amec Samir (Brikho)
Andrews & Wykeham (Geoffrey Webb)
Arup (Philip Dilley)
Atkins Global (Uwe Krueger)
Babcock (Norman Harrison)
BAE Systems (Alan Garwood, Tony Ennis)
Balfour Beatty (Manfred Leger)
Barclays (Sir David Wright)
Benoy (Simon Blore)
BG (Martin Houston)
BHP Billiton (Andrew Mackenzie)
Blippar (Ambarish Mitra)
BP (Dev Sanyal)
Cooper & Stollbrand (James Eden)
Dyson (Philipp Baechtold)
Energy Technologies Institute (Dr David Clarke)
English Premier League (Richard Scudamore)
Ernst & Young (Steve Varley)
Foster & Partners (Mouzhan Majidi)
Heriot-Watt University (Bob Craik)
Intelligent Energy (Phil Caldwell)
International Nuclear Service (Mark Jervis)
Jardine Matheson (Ben Keswick)
JCB (Philip Bouverat)
Kiely Rowan Plc (Dermott Rowan)
Lifesaver (Michael Pritchard)
MBDA (Steve Wadey)
Monitise (Alastair Lukies)
National Nuclear Laboratory (Paul Howarth)
Norbar Torque Tools (Neill Brodey)
Nottingham University (Prof Ian Pashby)
Novauris Technologies (Dr Melvyn Hunt)
Nu Desine (Adam Place)
Nu Instruments (Alan McCall)
Nuclear Decommissioning Authority (John Clarke)
Nuclear Industry Association (Lord Hutton)
Open University (Martin Bean)
Oxford Business Group (Andrew Jeffreys)
Premier Oil (Robin Allan)
Rolls Royce (Adrian Short, Richard Thornley, Olof Rapp)
Shell (Andy Brown)
Somo (Tom Schulz)
Southampton University (Prof Don Nutbeam)
Standard Chartered (Neeraj Swaroop, Tom Aaker)
Surrey Satellites (Martin Sweeting)
Thales (Alex Dorrian)
Training Gateway (York University) Amanda Selvaratnam
Travelex (Peter Jackson)
Ultra Electronics Douglas Caster)
Unilever (Maurits Lalisang)
Universities UK (Dr Joanna Newman)
Weston Williamson Chris Williamson)